<PAGE>

                                 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, 1998
                                       
                                      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: 0-20124
                                       
                                       
                        NETWORK COMPUTING DEVICES, INC.
            (Exact name of registrant as specified in its charter)
                                       
                                       
               California                    77-0177255
    (State or other jurisdiction of       (I.R.S. Employer
     incorporation or organization)     Identification No.)

          350 North Bernardo Avenue, Mountain View, California 94043
             (Address of principal executive offices and zip code)
                                       
                Registrant's telephone number:  (650) 694-0650
                                       

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 ____
                                       
                                       
The number of shares outstanding of the Registrant's Common Stock was
17,121,409 at March 31, 1998.

<PAGE>

                        NETWORK COMPUTING DEVICES, INC.

                                     INDEX


<TABLE>
<CAPTION>
              DESCRIPTION                               PAGE NUMBER
----------------------------------------                -----------
<S>                                                         <C>
Cover Page                                                    1

Index                                                         2

Part I:   Financial Information

   Item 1:   Financial Statements

       Condensed Consolidated Balance Sheets as of March
          31, 1998 and December 31, 1997                      3
       Condensed Consolidated Statements of Operations for
          the Three-Month Periods Ended March 31, 1998 and
          1997                                                4
       Condensed Consolidated Statements of Cash Flows for
          the Three-Month Periods Ended March 31, 1998 and
          1997                                                5
       Notes to Condensed Consolidated Financial Statements   6
       
   Item 2:   Management's Discussion and Analysis of 
             Financial Condition and Results of Operations    8

Part II:  Other Information
   
   Item 6:   Exhibits and Reports on Form 8-K                13
   
Signature                                                    14
</TABLE>


<PAGE>

                      NETWORK COMPUTING DEVICES, INC.

                        PART I:  FINANCIAL INFORMATION
                        ITEM 1.  FINANCIAL STATEMENTS

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                               (IN THOUSANDS)


                                    ASSETS
<TABLE>
<CAPTION>
                                                         March 31,     December 31,
                                                           1998           1997
                                                        ----------     ------------
                                                        (UNAUDITED)
<S>                                                     <C>           <C>
Current assets:
  Cash and cash equivalents                             $  28,870     $  21,240
  Short-term investments                                   10,732        10,240
  Accounts receivable, net                                 23,282        25,148
  Inventories                                              13,761        15,412
  Refundable and deferred income tax assets                 5,009         4,763
  Other current assets                                      3,178         2,843
                                                       ------------   -----------
Total current assets                                       84,832        79,646

Property and equipment, net                                 3,863         4,424
Other assets                                                1,559         2,444
                                                       ------------   -----------
Total assets                                            $  90,254     $  86,514
                                                       ------------   -----------
                                                       ------------   -----------

                         LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                       $  9,841     $  11,211
  Accrued expenses                                          7,869         8,955
  Income taxes payable                                        485           597
  Current portion of capital lease obligations                116           154
  Deferred revenue                                          4,369         4,918
                                                       ------------   -----------
Total current liabilities                                  22,680        25,835
Long-term portion of capital lease obligations                137           160
Shareholders' equity:
  Undesignated preferred stock                                  -             -
  Common stock                                             66,037        58,630
  Retained earnings (accumulated deficit)                   1,400         1,889
                                                       ------------   -----------
Total shareholders' equity                                 67,437        60,519
                                                       ------------   -----------
Total liabilities and shareholders' equity              $  90,254     $  86,514
                                                       ------------   -----------
                                                       ------------   -----------
</TABLE>

                            See accompanying notes
                                       3
<PAGE>

                            NETWORK COMPUTING DEVICES, INC.

                    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                      Three Months Ended March 31,
                                                     -----------------------------
                                                           1998          1997
                                                       ------------   -----------
<S>                                                    <C>            <C>
Net revenues:
    Hardware products and services                      $  22,573     $  22,927
    Software licenses and services                          8,091         8,137
                                                       ------------   -----------
Total net revenues                                         30,664        31,064
Cost of revenues:
    Hardware products and services                         17,344        15,069
    Software licenses and services                          2,466         2,992
                                                       ------------   -----------
Total cost of revenues                                     19,810        18,061
                                                       ------------   -----------

Gross margin                                               10,854        13,003
Operating expenses:
  Research and development                                  3,471         3,444
  Marketing and selling                                     7,505         7,141
  General and administrative                                1,041         1,665
                                                       ------------   -----------
Total operating expenses                                   12,017        12,250
                                                       ------------   -----------
Operating income (loss)                                    (1,163)          753
Interest income, net                                          411           468
Other income                                                    -           200
                                                       ------------   -----------
Income (loss) before income taxes                            (752)        1,421
Provision for income taxes (income tax benefit)              (263)          569
                                                       ------------   -----------

Net income (loss)                                       $    (489)    $     852
                                                       ------------   -----------
                                                       ------------   -----------

Net income (loss) per share
  Basic                                                 $   (0.03)     $   0.05
                                                       ------------   -----------
                                                       ------------   -----------
  Diluted                                               $   (0.03)     $   0.05
                                                       ------------   -----------
                                                       ------------   -----------

Shares used in per share computations
  Basic                                                    16,612        17,089
                                                       ------------   -----------
                                                       ------------   -----------
  Diluted                                                  16,612        18,889
                                                       ------------   -----------
                                                       ------------   -----------
</TABLE>

                             See accompanying notes.
                                       4
<PAGE>

                             NETWORK COMPUTING DEVICES, INC.

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

<TABLE>
<CAPTION>
                                                       Three Months Ended March 31,
                                                       ----------------------------
                                                            1998           1997
                                                       ------------    ------------
<S>                                                      <C>             <C>
Cash flows from operations:
 Net income (loss)                                       $  (489)      $    852
 Reconciliation to cash provided by (used in) operations:
  Depreciation and amortization                              830            776
  Changes in:
   Accounts receivable, net                                1,866          1,066
   Inventories                                             1,651         (1,461)
   Refundable and deferred income taxes                     (246)           797
   Other current assets                                     (335)        (1,286)
   Accounts payable                                       (1,370)         2,858
   Income taxes payable                                     (112)          (324)
   Accrued expenses                                       (1,086)           858
   Deferred revenue                                         (549)          (243)
                                                       ------------    ----------
  Cash provided by operations                                160          3,893
  Cash flows from investing activities:
   Short-term investments, net                              (492)        (1,015)
   Changes in other assets                                   885           (103)
   Property and equipment purchases, net                    (269)        (1,174)
                                                       ------------   -----------
  Cash provided by (used in) investing activities            124         (2,292)
  Cash flows from financing activities:
   Principal payments on capital lease obligations           (61)          (228)
   Proceeds from issuance of stock, net                    7,407            391
                                                       ------------   -----------
  Cash provided by financing activities                    7,346            163
                                                       ------------   -----------
  Increase in cash and equivalents                         7,630          1,764
  Cash and equivalents:
   Beginning of period                                    21,240         23,832
                                                       ------------   -----------
   End of period                                         $28,870       $ 25,596
                                                       ------------   -----------
                                                       ------------   -----------
</TABLE>

                             See accompanying notes.
                                       5
<PAGE>

               NETWORK COMPUTING DEVICES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

The unaudited condensed consolidated financial information of Network 
Computing Devices, Inc. (the "Company") furnished herein reflects all 
adjustments, consisting only of normal recurring adjustments, which in the 
opinion of management are necessary to fairly state the Company's 
consolidated financial position, results of operations and cash flows for the 
periods presented.  This Quarterly Report on Form 10-Q should be read in 
conjunction with the consolidated financial statements and notes thereto 
included in the Company's 1997 Annual Report on Form 10-K.  The consolidated 
results of operations for the three-month period ended March 31, 1998 are 
not necessarily indicative of the results to be expected for any subsequent 
quarter or for the entire year ending December 31, 1998.

COMPREHENSIVE INCOME

In June 1997, the FASB issued Statement of Financial Accounting Standards 
("SFAS") No. 130, "Reporting Comprehensive Income," which establishes 
standards for reporting and disclosures of comprehensive income and its 
components (revenues, expenses, gains and losses) in a full set of 
general-purpose financial statements.  SFAS No. 130 is effective for fiscal 
years beginning after December 15, 1997 and requires reclassification of 
financial statements for earlier periods to be provided for comparative 
purposes.  The Company has not determined the manner in which it will present 
the information required by SFAS No. 130 in its annual consolidated financial 
statements for the year ending December 31, 1998.  The Company's total 
comprehensive income (loss) for all periods presented herein would not have 
differed from those amounts reported as net income (loss) in the consolidated 
statements of operations.

NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed using the weighted-average 
number of common shares outstanding during the period.  Diluted net income 
(loss) per share is computed using the weighted-average number of common 
shares and common equivalent shares from stock options (1,799,720 in the 
first quarter of 1997) outstanding, when dilutive, using the treasury stock 
method.  In the first quarter of 1998 there were 3,471,402 options 
outstanding that could potentially dilute basic earnings per share ("EPS") in 
the future that were not included in the computation of diluted EPS because 
to do so would have been antidilutive for those years.

INVENTORIES

Inventories, stated at the lower of standard cost, which approximates actual 
cost on a first-in, first-out basis, or market, consisted of (in thousands):

<TABLE>

                                               March 31,       December 31,
                                                1998               1997
                                                ----               ----
<S>                                            <C>             <C>

    Purchased components and sub-assemblies     $11,736         $13,178
    Work in process                                 636             545
    Finished goods                                1,389           1,689
                                                  -----           -----
                                                $13,761         $15,412
                                                -------         -------
                                                -------         -------

</TABLE>

INTEREST AND TAX PAYMENTS

Interest payments, primarily related to interest on capital lease 
liabilities, were $5,300 and $22,000 for the first three months of 1998 and 
1997, respectively.  Income tax payments were $40,200 and $53,600 for the 
first three months of 1998 and 1997, respectively.

STOCK REPURCHASE PROGRAM

In April 1997, the Company's Board of Directors adopted a program to 
repurchase up to 1,000,000 shares of the Company's common stock during the 
12-month period ending April 30, 1998.  Repurchases were made under the 
program using the Company's cash resources.  Shares repurchased are available 
for the issuance under the Company's stock plans and for other

                                       6
<PAGE>


               NETWORK COMPUTING DEVICES, INC.
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

corporate purposes.  In September 1997, the repurchase program was completed 
with an aggregate of 1,000,000 shares repurchased at prices ranging from 
$8.38 to $12.00 per share for a total purchase price of $10.7 million.  In 
November 1997, the Company's Board of Directors adopted an additional program 
to repurchase up to 1,000,000 shares of the Company's common stock during the 
12-month period ending October 31, 1998.  Repurchases of 191,400 shares were 
made in 1997 under the second program at prices ranging from $7.19 to $8.75 
at a total aggregate price of $1.5 million.  Total repurchases of 1,191,400 
shares were made in 1997 at prices ranging from $7.19 to $12.00 per share for 
a total purchase price of $12.2 million.  No repurchases were made in the 
first quarter of 1998.

MAJOR CUSTOMERS AND RELATED ACCOUNTS RECEIVABLE

International Business Machines Corporation ("IBM") accounted for 
approximately 24% and 17% of the Company's revenues for the first three 
months of 1998 and 1997, respectively.  At March 31, 1998, related accounts 
receivable due from IBM were approximately $6.3 million.

                                       7
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

THIS DISCUSSION INCLUDES FORWARD-LOOKING STATEMENTS, INCLUDING BUT NOT 
LIMITED TO STATEMENTS WITH RESPECT TO THE COMPANY'S FUTURE FINANCIAL 
PERFORMANCE, OPERATING RESULTS, PLANS AND OBJECTIVES.  ACTUAL RESULTS MAY 
DIFFER MATERIALLY FROM THOSE CURRENTLY ANTICIPATED DEPENDING UPON A VARIETY 
OF FACTORS, INCLUDING THOSE DESCRIBED BELOW UNDER THE SUB-HEADING, "FUTURE 
PERFORMANCE AND RISK FACTORS."

THE FOLLOWING DISCUSSION SHOULD BE READ ONLY IN CONJUNCTION WITH THE 
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND NOTES 
THERETO INCLUDED IN PART I -- ITEM 1 OF THIS QUARTERLY REPORT ON FORM 10-Q, 
AND THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO AND 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997, CONTAINED IN THE COMPANY'S 
1997 ANNUAL REPORT ON FORM 10-K.

OVERVIEW

Network Computing Devices, Inc. provides thin client hardware and software 
that delivers simultaneous, high-performance, easy-to-manage access to any 
application from thin client, UNIX and PC desktops.  The Company's product 
lines include the EXPLORA and family of thin clients, WINCENTER PRO-TM- 
multi-user WINDOWS NT-Registered Tradmark- application server software, and 
PC-XWARE-Registered Tradmark- software that delivers PC access to UNIX and 
multi-user WINDOWS NT PCs.

The Company sells hardware product to International Business Machines 
Corporation ("IBM") pursuant to the joint development agreement dated June 
27, 1996 (the "IBM Agreement") of a network application terminal for resale 
by IBM.  The IBM Agreement provides for IBM to purchase a substantial portion 
of its requirements for such products from the Company through December 31, 
2000.

RECENT DEVELOPMENTS

During the first quarter of 1998, the Company signed a non-exclusive 
three-year agreement with Intel Corporation under which the Company and Intel 
will collaborate to produce desktop devices based on guidelines for Lean 
Client systems outlined by Intel in December 1997.  Under the terms of the 
agreement, the Company will develop a "reference platform design" consisting 
of Pentium-based lean client hardware integrated with software technology 
from both companies.  Subject to the Company's successful completion of the 
development project, including the Company's demonstration of volume 
production, Intel has agreed to (i) reference the Company's lean client 
design(s) as the "preferred design" for the lean client marketplace and (ii) 
refrain from developing a board level product(s) substantially equivalent to 
the Company's lean client design(s) for a specified period of time. 
Additionally, Intel has agreed to provide the Company with chipset and CPU 
product pricing consistent with pricing offered to other market makers or 
market leaders shipping the largest volume of units in a given market 
segment. The agreement provides that the Company will develop new product 
designs based on Intel architecture and the Company will have a limited 
period of exclusivity for such design(s). Thereafter, Intel shall have the 
option to acquire a non-exclusive license to any Company lean client 
design(s) developed by the Company under the auspices of the agreement. The 
agreement further contemplates that Intel may elect to terminate the 
agreement for convenience prior to the Company's completion of its 
development efforts upon Intel's payment to the Company of substantial 
specified lump sum payments.

RESULTS OF OPERATIONS

TOTAL NET REVENUES

Total net revenues for the first three months of 1998 were $30.7 million, a 
decrease of 1% from 1997 net revenues of $31.1 million.  Sales related to the 
IBM Agreement accounted for approximately 24% and 17% of revenues in the 
first three months of 1998 and 1997, respectively.

HARDWARE REVENUES

Hardware revenues consist primarily of revenues from the sale of thin client 
products and related hardware, and to a lesser extent, fees for related 
service activities.  Hardware revenues were $22.6 million for the first three 
months of 1998, essentially unchanged from revenues of $22.9 million in the 
first three months of 1997.  The mix in revenues changed, however, as 
increased shipments to IBM and increased shipments of monitors offset the 
combined impact of lower volume and lower average selling prices to other 
customers.

SOFTWARE REVENUES

Software revenues consist primarily of revenues from the licensing of 
software products and related support services.  Current software products 
that are generating revenue include WINCENTER-TM-, the Company's multi-user 
WINDOWS NT application server 

                                       8

<PAGE>

software, PC-XWARE, the Company's thin client software for PCs, and NCDWARE, 
the Company's proprietary thin client software.  Revenues from software and 
related services were $8.1 million for the first three months of both 1998 
and 1997.  The mix of software revenues changed slightly, reflecting higher 
WINCENTER revenues and software support revenues and lower PC-XWARE revenues 
in the first three months of 1998.  In addition, revenues for the first three 
months of 1997 reflected $797,000 related to an agreement with AT&T that 
terminated in September 1997.

GROSS MARGIN ON HARDWARE REVENUES

The Company's gross margin percentages on Hardware revenues were 23% and 34% 
for the first three months of 1998 and 1997, respectively.  The decrease in 
margin for the first three months of 1998 relates to increased sales of lower 
margin products including lower-priced EXPLORA thin clients, monitors and 
products sold to IBM on an OEM basis under the IBM Agreement.  The Company 
currently anticipates that the mix of hardware OEM revenues as a component of 
total hardware revenues will continue to rise.  In addition, the Company 
plans to increase the percentage of revenues generated through indirect 
channels. The combined impact of changes is likely to result in reduced 
overall gross margin percentages on hardware revenues in future periods.

GROSS MARGIN ON SOFTWARE REVENUES

The Company's gross margin percentages on Software revenues were 70% and 63% 
for the first three months of 1998 and 1997, respectively.  The increase in 
gross margin percentages for the first three months of 1998 is primarily 
related to increased sales of software support, which have higher margins 
than other software sales.  Certain technology used in the Company's products 
is licensed from third parties on a royalty-bearing basis; accordingly, 
royalties are a significant component of total software cost of sales for 
1998 and 1997.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development ("R&D") expenses of $3.5 million and $3.4 million 
for the first three months of 1998 and 1997, respectively, were essentially 
unchanged both in dollars and as a percentage of revenues.

MARKETING AND SELLING EXPENSES

Marketing and selling expenses were $7.5 million and $7.1 million for the 
first three months of 1998 and 1997, respectively.  The increase primarily 
reflects increased costs related to the Company's increased focus on 
technical support. As a percentage of net revenues, marketing and selling 
expenses were 24% and 23% for the first three months of 1998 and 1997, 
respectively.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative ("G&A") expenses were $1.0 million and $1.7 
million for the first three months of 1998 and 1997, respectively.  The 
decrease in the first three months of 1998 primarily reflects increased 
efficiencies and continued cost controls related to personnel costs, 
facilities costs and outside service fees.  As a percentage of net revenues, 
G&A expenses were 3% and 5% for the first three months of 1998 and 1997, 
respectively.

INTEREST INCOME, NET

Interest income, net of interest expense, was $411,000 and $468,000 for the 
first three months of 1998 and 1997, respectively.  The decreases were 
primarily due to lower average balances in interest-earning accounts.

OTHER INCOME, NET

Other income includes non-operating income, net of non-operating expense. 
Other income in the first three months of 1997 reflects the receipt of 
insurance proceeds for certain legal expenses incurred in association with 
the securities litigation costs.  No significant other income was produced 
during 1998.

INCOME TAXES AND INCOME TAX BENEFIT

The Company recognized an income tax benefit of $263,000 in the first three 
months of 1998 compared to income tax provision of $569,000 in the first 
three months of 1997.  At March 31, 1998, the Company's gross deferred tax 
assets are approximately $5.4 million.  Based on the Company's expected 
operating results, management believes that it is more likely than not that 
the Company will realize the benefit of the deferred tax assets recorded and, 
accordingly, has established no asset valuation allowances.

                                       9
<PAGE>

FINANCIAL CONDITION

Total assets of $90.3 million at March 31, 1998 increased from $86.5 million 
at December 31, 1997.  The change in total assets reflects increases in cash 
and short-term investments and income tax assets of $8.1 million and $1.0 
million, respectively, partially offset by decreases in accounts receivable 
and inventories of $1.9 million and $1.7 million, respectively.  Cash and 
short-term investments increased primarily from cash received from equity 
investment by Intel.  Total liabilities as of March 31, 1998 decreased by 
$3.2 million, or 12%, from December 31, 1997.  The decrease was primarily 
related to decreases in accounts payable and accrued expenses of $1.4 million 
and $1.1 million, respectively.

CAPITAL REQUIREMENTS

Capital spending requirements for the remainder of 1998 are estimated at 
approximately $3.0 million.  At March 31, 1998, the Company had commitments 
for capital expenditures of approximately $220,000, primarily related to 
manufacturing tooling and facilities.

LIQUIDITY

As of March 31, 1998, the Company had combined cash and equivalents and 
short-term investments totaling $39.6 million, with no significant debt.  
Cash provided by operations was $1.0 million in the first three months of 
1998 compared to $3.9 million in the first three months of 1997.  In 1998, 
decreases in accounts receivable and inventories of $1.9 million and $1.7 
million, respectively, and depreciation of $830,000 were largely offset by 
decreases in accounts payable and accrued expenses of $1.4 million and $1.1 
million, respectively, and a net loss of $489,000.  In the first three months 
of 1997, increases in accounts payable of $2.9 million, decreases in accounts 
receivable of $1.1 million, net income of $852,000 and depreciation of 
$776,000 were only partially offset by an increase in inventories of $1.5 
million and a decrease in other current assets and other of $1.3 million.  
Cash flows provided by financing activities in 1998 primarily reflects 
Intel's investment in the Company's common stock.

The Company believes that its existing sources of liquidity, including cash 
generated from operations, will be sufficient to meet operating cash 
requirements and capital lease repayment obligations at least through the 
next twelve months.

FUTURE PERFORMANCE AND RISK FACTORS

THE COMPANY'S FUTURE BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION ARE 
SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING THOSE DESCRIBED BELOW.

EVOLVING THIN CLIENT COMPUTING MARKET

The Company derives a majority of its revenues from the sale of thin client 
computing products and related software.  During the past several years, the 
Company and other manufacturers of network computing systems and products 
have experienced intense competition from alternative desktop computing 
products, particularly personal computers, which has slowed the growth and 
development of the network computing market.  Until recently, the absence of 
X protocol support from Microsoft, combined with the proliferation of 
off-the-shelf Windows-based application software, constituted an obstacle to 
the expansion of the network computing model into Windows-based environments. 
The introduction of the Company's WINCENTER multi-user WINDOWS NT 
application server software and new, lower-priced thin client computing 
products have allowed the Company to offer thin client computing systems that 
provide users with access to Windows applications, although sales of these 
new products have been limited to date.  The Company's future success will 
depend in substantial part upon increased acceptance of the thin client 
computing  model and the successful marketing of the Company's new thin 
client computing  products.  There can be no assurance that the Company's new 
thin client computing  products will compete successfully with alternative 
desktop solutions or that the thin client computing  model will be widely 
adopted in the rapidly evolving desktop computer market.  The failure of new 
markets to develop for the Company's thin client computing  products would 
have a material, adverse effect on the Company's business, operating results 
and financial condition.

RELIANCE ON OEM RELATIONSHIPS

The Company has committed significant resources, including research and 
development, manufacturing and sales and marketing resources, to the 
execution of the IBM Agreement.  The production cycle of related product 
requires the Company to rely on IBM to provide accurate product requirement 
forecasts, which have in the past, and will in the future, be subject to 
changes by IBM.  Should the Company commence production of related product 
based on provided forecasts that are 

                                       10
<PAGE>

subsequently reduced, the Company bears the risk of increased levels of 
unsold inventories.  Should the expected business volumes associated with the 
IBM Agreement not occur, or occur in volumes below management's expectations, 
there would be a material, adverse effect on the Company's operating results.

The Company currently anticipates that the mix of hardware revenues as a 
component of total revenues may rise as a result of potential OEM 
relationships for the Company's thin client computing products, which would 
likely lead to overall reduced gross margins on total revenues.

OTHER RISK FACTORS

The Company experiences significant competition from other network computer 
manufacturers, suppliers of personal computers and workstations and software 
developers.  Competition within the thin client computing market has 
intensified over the past several years, resulting in price reductions and 
reduced profit margins.  The Company expects this intense competition to 
continue, and there can be no assurance that the Company will be able to 
continue to compete successfully against current and future competitors as 
the desktop computer market evolves and competition increases.  The Company's 
software products also face substantial competition from software vendors 
that offer similar products, including several large software companies. 

The Company operates with a relatively small backlog.  Revenues and operating 
results therefore generally depend on the volume and timing of orders 
received, which are difficult to forecast and which may occur 
disproportionately during any given quarter or year.  The Company's expense 
levels are based in part on its forecast of future revenues.  If revenues are 
below expectations, the Company's operating results may be adversely 
affected.  The Company has experienced a disproportionate amount of shipments 
occurring in the last month of its fiscal quarters.  This trend increases the 
risk of material quarter-to-quarter fluctuations in the Company's revenues 
and operating results.

The Company's operating results have varied significantly, particularly on a 
quarterly basis, as a result of a number of factors, including general 
economic conditions affecting industry demand for computer products, the 
timing and market acceptance of new product introductions by the Company and 
its competitors, the timing of significant orders from and shipments to large 
customers, periodic changes in product pricing and discounting due to 
competitive factors, and the availability and pricing of key components, such 
as DRAMs, video monitors, integrated circuits and electronic sub-assemblies, 
some of which require substantial order lead times.  The Company's operating 
results may fluctuate in the future as a result of these and other factors, 
including the Company's success in developing and introducing new products, 
its product and customer mix, licensing costs, the level of competition which 
it experiences and its ability to develop and maintain strategic business 
alliances.

The Company's future results will depend to a considerable extent on its 
ability to continuously develop, introduce and deliver in quantity new 
hardware and software products that offer its customers enhanced performance 
at competitive prices.  The introduction of new or enhanced products also 
requires the Company to manage the transition from older, displaced products 
in order to minimize disruption to customer ordering patterns, avoid 
excessive levels of older product inventories and ensure that adequate 
supplies of new products can be delivered to meet customer demand.  As the 
Company is continuously engaged in this product development and transition 
process, its operating results may be subject to considerable fluctuation, 
particularly when measured on a quarterly basis.  The inability to finance 
important research and development projects, delays in the introduction of 
new and enhanced products, the failure of such products to gain market 
acceptance, or problems associated with new product transitions could 
adversely affect the Company's operating results.

The Company has significant deferred tax assets and will have to generate a 
significant amount of future taxable income to realize its deferred tax 
assets. There can be no assurance that future levels of pretax earnings for 
financial reporting purposes will be sufficient to realize the deferred tax 
assets.

The Company relies substantially on independent distributors and resellers, 
particularly in European markets, for the marketing and distribution of its 
products, particularly its software products.  In early 1996, the Company 
experienced significant returns of its software products from its 
distributors. There can be no assurance that the Company will not experience 
some level of returns in the future.  In addition, there can be no assurance 
that the Company's distributors and resellers will continue their current 
relationships with the Company or that they will not give higher priority to 
the sale of other products, which could include products of the Company's 
competitors.  A reduction in sales effort or discontinuance of sales of the 
Company's products by its distributors and resellers could lead to reduced 
sales and could adversely affect the Company's operating results.  In 
addition, there can be no assurance as to the continued viability or the 
financial stability of 

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<PAGE>

the Company's distributors and resellers, the Company's ability to retain its 
existing distributors and resellers or the Company's ability to add 
distributors and resellers in the future.

The Company relies on independent contractors for virtually all of the 
sub-assembly of the Company's thin client computing products.  The Company's 
reliance on these independent contractors limits its control over delivery 
schedules, quality assurance and product costs.  In addition, a number of the 
Company's independent suppliers are located abroad.  The Company's reliance 
on these foreign suppliers subjects the Company to risks such as the 
imposition of unfavorable governmental controls or other trade restrictions, 
changes in tariffs and political instability.  The Company currently obtains 
all of the sub-assemblies used for its thin client computing products 
(consisting of all major components except monitors and cables) from a single 
supplier located in Thailand.  Any significant interruption in the supply of 
sub-assemblies from this contractor would have a material adverse effect on 
the Company's business and operating results.

A majority of the Company's international sales are denominated in U.S. 
dollars, and an increase in the value of the U.S. dollar relative to foreign 
currencies could make the Company's products less competitive in those 
markets. International sales and operations may also be subject to risks such 
as the imposition of governmental controls, export license requirements, 
restrictions on the export of technology, political instability, trade 
restrictions, changes in tariffs and difficulties in staffing and managing 
international operations and managing accounts receivable.  In addition, the 
laws of certain countries do not protect the Company's products and 
intellectual property rights to the same extent as the laws of the United 
States.  There can be no assurance that these factors will not have an 
adverse effect on the Company's future international sales and, consequently, 
on the Company's operating results.

The Company's success depends to a significant degree upon the continuing 
contributions of its senior management and other key employees, particularly 
Robert G. Gilbertson, President and Chief Executive Officer and Rudolph G. 
Morin, Executive Vice President of Operations & Finance and Chief Financial 
Officer.  The Company believes that its future success will depend in large 
part on its ability to attract and retain highly-skilled engineering, 
managerial, sales and marketing personnel.  Competition for such personnel is 
intense, and there can be no assurance that the Company will be successful in 
attracting, integrating and retaining such personnel.  Failure to attract and 
retain key personnel could have a material adverse effect on the Company's 
business, operating results or financial condition.

The market price of the Company's common stock has fluctuated significantly 
over the past several years and is subject to material fluctuations in the 
future in response to announcements concerning the Company or its competitors 
or customers, quarterly variations in operating results, announcements of 
technological innovations, the introduction of new products or changes in 
product pricing policies by the Company or its competitors, general 
conditions in the computer industry, developments in the financial markets 
and other factors.  In particular, shortfalls in the Company's quarterly 
operating results from historical levels or from levels forecast by 
securities analysts could have an adverse effect on the trading price of the 
common stock.  The Company may not be able to quantify such a quarterly 
shortfall until the end of the quarter, which could result in an immediate 
and adverse effect on the common stock price.  In addition, the stock market 
has, from time to time, experienced extreme price and volume fluctuations 
that have particularly affected the market prices for technology companies 
and which have been unrelated to the operating performance of the affected 
companies.  Broad market fluctuations of this type may adversely affect the 
future market price of the Company's common stock.

See Part II - Item 7. Management's Discussion and Analysis of Financial 
Condition and Results of Operations -- Future Performance and Risk Factors 
contained in the Company's 1997 Annual Report on Form 10-K.

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<PAGE>

                        NETWORK COMPUTING DEVICES, INC.

                          PART II - OTHER INFORMATION



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are filed herewith:

     *Exhibit 10.47  Development and License Agreement dated March 6, 
                     1998 between Registrant and Intel Corporation.
      Exhibit 27     Financial Data Schedule.
      Exhibit 27.1   Restated March 31, 1997 Financial Data Schedule.

     *    Confidential treatment has been requested as to a portion of this 
          exhibit.

(b)  The Company filed no reports on Form 8-K during the three-month period 
     ended March 31, 1998.

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<PAGE>

                        NETWORK COMPUTING DEVICES, INC.

                                   SIGNATURE


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



                         Network Computing Devices, Inc.
                         (Registrant)

Date:  May 8, 1998

                         By: /S/ RUDOLPH G. MORIN
                            ---------------------------------
                              Rudolph G. Morin
                              Executive Vice President, Operations & Finance
                              and Chief Financial Officer (Duly Authorized and
                              Principal Financial and Accounting Officer)

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