<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 October 31, 1998

                                       or

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities 
     Exchange Act of 1934

Commission File Number:  0-21683

                          Unity First Acquisition Corp.
             (Exact name of registrant as specified in its charter)

     Delaware                                             13-3899021
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)

245 Fifth Avenue, Suite 1500
New York, New York                                            10016
(Address of principal executive offices)                    (Zip Code)

                                 (212) 696-4282
              (Registrant's telephone number, including area code)


              (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

                Applicable Only to Issuers Involved in Bankruptcy
                   Proceeding During the Preceding Five Years:

     Indicate by check mark whether the registrant has filed all documents 
and reports required to be filed by Sections 12, 13 or 15(d) of the 
Securities Exchange Act of 1934 subsequent to the distribution of securities 
under a plan confirmed by a court.                            [ ] Yes   [ ] No

                      Applicable Only to Corporate Issuers:

     Indicate the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practicable date.

     1,875,000 shares of Common Stock at February 1, 1999


<PAGE>
                         PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements

          The condensed financial statements included herein have been 
prepared by Unity First Acquisition Corp. (the "Company"), without audit, 
pursuant to the rules and regulations of the Securities and Exchange 
Commission.  While 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, the Company believes that the disclosures made 
herein are adequate to make the information presented not misleading.


<PAGE>

                          UNITY FIRST ACQUISITION CORP.
                          (A DEVELOPMENT STAGE ENTITY)

                                 BALANCE SHEETS

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                     ASSETS
                                                                    OCTOBER 31, 1998     JULY 31, 1998
                                                                    ----------------     -------------
                                                                      (Unaudited)
<S>                                                                 <C>                  <C>        
CASH AND CASH EQUIVALENTS                                              $     1,587         $       196

RESTRICTED CASH AND INVESTMENTS                                          6,548,275           6,489,707
                                                                       -----------         -----------
         TOTAL ASSETS                                                  $ 6,549,862         $ 6,489,903
                                                                       -----------         -----------
                                                                       -----------         -----------
                      LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
 ACCRUED EXPENSES                                                      $   639,044         $   379,082

 ADVANCES FROM AFFILIATE                                                    48,000              33,000
                                                                       -----------         -----------
         TOTAL LIABILITIES                                                 687,044             412,082
                                                                       -----------         -----------
COMMITMENTS AND CONTINGENCIES:

  Common stock, $.0001 par value,
    249,875 shares subject to possible
      conversion, at conversion value                                    1,308,995           1,297,301
                                                                       -----------         -----------

STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value,
   5,000 shares authorized, no shares
     issued or outstanding                                                  --                  --
  Common stock, $.0001 par value,
   20,000,000 shares authorized, 1,625,125
    shares issued and outstanding
     (excluding 249,875 shares subject to possible conversion)                 163                 163
  Additional paid-in capital                                             5,093,017           5,104,711
  Deficit accumulated during the development stage                        (539,357)           (324,354)
                                                                       -----------         -----------
         TOTAL STOCKHOLDERS' EQUITY                                      4,553,823           4,780,520
                                                                       -----------         -----------
         TOTAL LIABILITIES AND SHAREHOLDERS'
         EQUITY                                                        $ 6,549,862         $ 6,489,903
                                                                       -----------         -----------
                                                                       -----------         -----------
</TABLE>


                   See Selected Notes to Financial Statement.

                                       1
<PAGE>


                          UNITY FIRST ACQUISITION CORP.
                          (A DEVELOPMENT STAGE ENTITY)

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                              FOR THE                     CUMULATIVE
                                         THREE MONTHS ENDED                 AMOUNTS
                                             OCTOBER 31,                 FROM INCEPTION
                                   -------------------------------       --------------
                                      1998                1997      
                                   -----------         -----------
<S>                                <C>                 <C>                <C>         
REVENUE                            $    --             $    --            $    --   
                                   -----------         -----------        -----------
EXPENSES:
 General and administrative            289,550              55,956          1,109,276
                                   -----------         -----------        -----------
OTHER INCOME:
  Interest and dividends                74,547              75,524            573,494
                                   -----------         -----------        -----------
OPERATING (LOSS) INCOME               (215,003)             19,568           (535,782)

PROVISION FOR INCOME TAXES              --                   7,863              3,575
                                   -----------         -----------        -----------

NET (LOSS) INCOME                  $  (215,003)        $    11,705        $  (539,357)
                                   -----------         -----------        -----------
                                   -----------         -----------        -----------
NET (LOSS) INCOME PER
 COMMON SHARE-BASIC
  AND DILUTED                      $      (.11)        $      .01
                                   -----------         -----------
                                   -----------         -----------
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING
    BASIC AND DILUTED                1,875,000           1,875,000
                                   -----------         -----------
                                   -----------         -----------
</TABLE>



                   See Selected Notes to Financial Statement.

                                       2


<PAGE>


                          UNITY FIRST ACQUISITION CORP.
                          (A DEVELOPMENT STAGE ENTITY)

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                   FOR THE THREE MONTHS ENDED OCTOBER 31, 1998
                                   (UNAUDITED)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                      (DEFICIT)
                                                                                     ACCUMULATED
                                     COMMON STOCK                  ADDITIONAL         DURING THE
                              ----------------------------          PAID-IN          DEVELOPMENT
                                SHARES          PAR VALUE           CAPITAL             STAGE               TOTAL      
                              ---------        -----------        -----------         -----------         -----------
<S>                           <C>              <C>                <C>                <C>                  <C>        
Balance,
 July 31, 1998                1,875,000        $       163        $ 5,104,711         $  (324,354)        $ 4,780,520

Net loss for the
 three months ended
 October 31, 1998                --                 --                 --                (215,003)           (215,003)

Increase in value
 attributable to
 common shares
 subject to possible
 conversion                      --                 --                (11,694)             --                 (11,694)
                              ---------        -----------        -----------         -----------         -----------
Balance,
 October 31, 1998             1,875,000        $       163        $ 5,093,017         $  (539,357)        $ 4,553,823
                              ---------        -----------        -----------         -----------         -----------
                              ---------        -----------        -----------         -----------         -----------
</TABLE>



                   See Selected Notes to Financial Statement.
                                        3


<PAGE>


                          UNITY FIRST ACQUISITION CORP.
                          (A DEVELOPMENT STAGE ENTITY)

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  FOR THE
                                                                THREE MONTHS                 CUMULATIVE
                                                                   ENDED                       AMOUNTS
                                                                 OCTOBER 31,                FROM INCEPTION
                                                           -----------------------          --------------
                                                           1998               1997
                                                           ----               ----
<S>                                                    <C>                 <C>                 <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                    $  (215,003)        $    11,705         $  (539,357)

CHANGES IN CERTAIN ASSETS AND LIABILITIES:
  Increase (decrease) in accrued expenses
         and taxes                                         259,962              (3,995)            664,044
                                                       -----------         -----------         -----------
         NET CASH PROVIDED BY
           OPERATING ACTIVITIES                             44,959               7,710             124,687
                                                       -----------         -----------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                    --                  --               6,402,175
  Advances from affiliate                                   15,000              --                 143,917
  Repayment to affiliate                                    --                  --                 (95,917)
  Deferred registration costs                               --                  --                (25,000)
                                                       -----------         -----------         -----------
         NET CASH PROVIDED BY FINANCING
           ACTIVITIES                                      (15,000)             --               6,425,175
                                                       -----------         -----------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  (Increase) in restricted cash and investments            (58,568)            (72,934)         (6,548,275)
                                                       -----------         -----------         -----------
         NET INCREASE (DECREASE) IN CASH
           AND CASH EQUIVALENTS                              1,391             (65,224)              1,587

CASH AND CASH EQUIVALENTS,
    beginning of period                                        196             266,533              --   
                                                       -----------         -----------         -----------
CASH AND CASH EQUIVALENTS,
    end of period                                      $     1,587         $   201,309         $     1,587
                                                       -----------         -----------         -----------
                                                       -----------         -----------         -----------
</TABLE>

                   See Selected Notes to Financial Statement.
                                        4


<PAGE>



                          UNITY FIRST ACQUISITION CORP.
                          (A DEVELOPMENT STAGE ENTITY)

                     SELECTED NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NOTE 1 - FINANCIAL STATEMENTS

         The financial statements have been prepared by Unity First Acquisition
         Corp. ("Unity"), without audit. In the opinion of management, all
         adjustments (which include only normal recurring adjustments) necessary
         to present fairly the financial position, results of operations and
         cash flows at October 31, 1998 and for all periods presented have been
         made. The results of operations for the period ended October 31, 1998
         are not necessarily indicative of the operating results for a full
         year.

        Certain information and footnote disclosures prepared in accordance with
        general accepted accounting principles and normally included in the
        financial statements have been condensed or omitted. It is suggested
        that these financial statements be read in conjunction with the
        financial statements and notes included in Unity's annual report Form
        10-k for the year ended July 31, 1998.

NOTE 2 - ORGANIZATION AND OPERATIONS

         Unity was incorporated in the State of Delaware on May 30, 1996 to
         serve as a vehicle to effect a merger, exchange of capital stock, asset
         acquisition or other similar business combination (a "Business
         Combination"). Unity is currently in the development stage. All
         activity of Unity to date relates to its formation, fund-raising, and
         search to effect a Business Combination.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         UTILIZATION OF ESTIMATES

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.

                                       5
<PAGE>


                          UNITY FIRST ACQUISITION CORP.
                          (A DEVELOPMENT STAGE ENTITY)

                     SELECTED NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

         NET INCOME (LOSS) PER COMMON SHARE

         Net income (loss) per common share is computed based on the weighted
         average number of common shares outstanding and common stock
         equivalents, if not anti-dilutive.

         In 1997, the Financial Accounting Standards Board issued Statement of
         Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share".
         This statement establishes standards for computing and presenting
         earnings per share ("EPS"), replacing the presentation of primary EPS
         with a presentation of Basic EPS. For entities with complex capital
         structures, the statement requires the dual presentation of both Basic
         EPS and Diluted EPS on the face of the statement of operations. Under
         this new standard, Basic EPS is computed based on the weighted average
         number of shares actually outstanding during the year. Diluted EPS
         includes the effect of potential dilution from the exercise of
         outstanding dilutive stock operations and warrants into common stock
         using the treasury stock method. SFAS No. 128 is effective for
         financial statements issued for periods ending after December 15, 1997,
         and early application is not permitted. The adoption of this statement
         did not have a material effect on Unity's financial position or on the
         results of its operations.

NOTE 4 - RESTRICTED CASH AND INVESTMENTS

         Unity, pursuant to the terms of its initial public offering (the
         "Offering"), placed $6,007,500 as of November 19, 1996, in a trust
         account which was primarily invested in a short-term U.S. Government
         Security. These funds are subject to release upon the earlier of (i)
         written notification by the Unity of its need for all or substantially
         all of the net proceeds for the purpose of implementing or facilitating
         the implementation of a Business Combination or (ii) the liquidation of
         the Unity (See note 5).

                                       6
<PAGE>


                          UNITY FIRST ACQUISITION CORP.
                          (A DEVELOPMENT STAGE ENTITY)

                     SELECTED NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NOTE 5 - PENDING ACQUISITION

         On May 6, 1998, Unity entered into a letter of intent to effectuate a
         Business Combination ("Merger") with Worlds, Inc. ("Worlds"), a company
         engaged in developing music-oriented content applications for its
         proprietary 3D Internet technology for consumer markets, as well as
         developing select business oriented applications. On June 25, 1998,
         Unity and Worlds entered into a definitive Agreement and Plan of Merger
         and Reorganization (the "Merger Agreement") to effectuate the Merger.

         On October 29, 1998, Unity's stockholders, at a special meeting
         convened to consider whether to approve or reject the Merger
         contemplated by the Merger Agreement, rejected the Merger.

         As a consequence of the rejection of the Worlds Merger by the Unity
         Public Stockholders, Article SEVENTH, paragraph (c) of Unity's
         Certificate of Incorporation would have required the liquidation and
         dissolution of Unity (the "Liquidation") no later than January 11,
         1999. Had such Liquidation taken place on that date, the Unity Public
         Stockholders, collectively, would have received a liquidating
         distribution representing their respective pro rata interest in a trust
         fund established for their benefit upon the consummation of the IPO,
         which currently approximates $6.5 million.

         On December 10, 1998, Unity entered into a letter of intent to
         effectuate a Business Combination with GraphOn Corporation ("GraphOn"),
         a privately owned developer and marketer of proprietary "thin client"
         software that enables a diverse range of desktop computing devices
         ("desktops") to easily access and utilize UNIX applications from an
         location, over both fast networks and slow internet connections.

         Unity's Board of Directors has unanimously concluded that a Business
         Combination with GraphOn would be in the best interests of both Unity
         and its stockholders, including the Unity Public Stockholders.
         Consequently, Unity's Board of Directors has sought and obtained an
         opinion from special Delaware counsel to the effect that such Article
         SEVENTH, paragraph (c), which attempts to waive Unity's statutory right
         to amend the Unity Certificate of Incorporation, is contrary to
         Delaware law and cannot prevent Unity and its stockholders from
         amending the Unity Certificate of Incorporation.


                                       7
<PAGE>

                          UNITY FIRST ACQUISITION CORP.
                          (A DEVELOPMENT STAGE ENTITY)

                     SELECTED NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NOTE 10 - PENDING ACQUISITION (CONT'D) 

         Subject to its submission under the Securities Exchange Act of 1934, as
         amended, of proxy solicitation material, Unity's Board of Directors
         intends to seek the approval of the Unity Public Stockholders to (i)
         amend the Unity Certificate of Incorporation to remove the provision
         therein that would have required Unity to commence the Liquidation as a
         consequence of its inability to consummate a Business Combination
         within the period defined by Article SEVENTH, paragraph (c) of the
         Unity Certificate of Incorporation and, if such approval is obtained,
         to (ii) consider and vote upon a proposal to approve Unity's Business
         Combination with GraphOn. There can be no assurance that the Unity
         Stockholders will approve the proposed amendment to the certificate of
         Incorporation, or the proposed Business Combination with GraphOn
         Corporation.

         The proposed amendment to the Unity Certificate of Incorporation will
         not affect the right of any Unity Public Stockholder to convert his
         shares of Unity Common Stock into cash, as provided in Article SEVENTH
         of the Unity Certificate of Incorporation, should such Unity Public
         Stockholder object to the GraphOn Business Combination and such
         Business Combination is approved by a majority in equity interest of
         the Unity Public Stockholders and thereafter consummated.

         Depending upon the voting of the Unity Public Stockholders as to the
         amendment to the Unity Certificate of Incorporation or the Business
         Combination with GraphOn, Unity may liquidate. The accompanying
         financial statements have not been presented on a liquidation basis of
         accounting as Unity has not decided to liquidate. Additionally, it is
         not expected that the carrying value of Unity's assets and liabilities
         would be materially different if presented under a liquidation basis
         based on the nature of such assets and liabilities.


                                       8
<PAGE>


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

Unity First Acquisition Corp. ("Unity") was incorporated in May 1996 for the
purpose of raising money to fund a vehicle to effect a Business Combination with
an operating business. On November 12, 1996 the Unity's Registration Statement
covering 1,250,000 Units was declared effective by the Securities and Exchange
Commission. Each Unit consists of one share of Unity's Common Stock, one Class A
Redeemable Warrant and one Class B Redeemable Warrant (hereafter the "Units").

Unity, after the Offering, had net proceeds of approximately $6,402,000.
Approximately $6,007,500 was invested in an interest bearing Trust Fund at The
Bank of New York and the balance at the same banking institution in checking and
money market accounts.

For the three months ended October 31, 1998, Unity had a net loss of $215,003
attributable to interest income of $74,547, offset by operating expenses of
$289,550, primarily consisting of unsuccessful deal fees of $205,163, management
and professional fees of $79,137, and taxes of $5,250.


                                       9


<PAGE>

                             PART II - OTHER INFORMATION


Item 6.   Exhibits and Reports on Form 8-K

          (A)  Exhibits

               (i)  Financial Data Schedule (Exhibit 27)

          (B)  Reports on Form 8-K

               Inapplicable


<PAGE>


                                      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.

                                        UNITY FIRST ACQUISITION CORP.
                                                 (Registrant)


Dated: February 1, 1999                 By: /s/ Lawrence Burstein 
                                           ---------------------------------
                                             Lawrence Burstein
                                             President
                                             (Principal Executive Officer)



                                        By: /s/ Norman Leben
                                           ---------------------------------
                                             Norman Leben
                                             Secretary
                                             (Principal Financial and
                                              Accounting Officer)