<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 January 31, 1999

                                       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.                [X] Yes   [ ] 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 March 11, 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
                                                              JANUARY 31, 1999  JULY 31, 1998
                                                              ----------------  -------------
                                                                 (Unaudited)    
<S>                                                              <C>             <C>        
CASH AND CASH EQUIVALENTS                                        $       956     $       196
                                                                                
RESTRICTED CASH AND INVESTMENTS                                    6,604,929       6,489,707
                                                                 -----------     -----------
                                                                                
         TOTAL ASSETS                                            $ 6,605,885     $ 6,489,903
                                                                 ===========     ===========
                                                                                
                       LIABILITIES AND SHAREHOLDERS' EQUITY                                            
                                                                                
LIABILITIES:                                                                    
 ACCRUED EXPENSES                                                $   690,817     $   379,082
                                                                                
 ADVANCES FROM AFFILIATE                                              76,282          33,000
                                                                 -----------     -----------
                                                                                
         TOTAL LIABILITIES                                           767,099         412,082
                                                                 -----------     -----------
                                                                                
COMMITMENTS AND CONTINGENCIES:                                                  
                                                                                
  Common stock, $.0001 par value,                                               
    249,875 shares subject to possible                                          
      conversion, at conversion value                              1,320,325       1,297,301
                                                                 -----------     -----------
                                                                                
SHAREHOLDERS' 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                                       5,081,687       5,104,711
  Deficit accumulated during the development stage                  (563,389)       (324,354)
                                                                 -----------     -----------
                                                                                
         TOTAL SHAREHOLDERS' EQUITY                                4,518,461       4,780,520
                                                                 -----------     -----------
                                                                                
         TOTAL LIABILITIES AND SHAREHOLDERS'                                    
               EQUITY                                            $ 6,605,885     $ 6,489,903
                                                                 ===========     ===========
</TABLE>

See Selected Notes to Financial Statements.
<PAGE>

UNITY FIRST ACQUISITION CORP.
(A DEVELOPMENT STAGE ENTITY)

STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                      For The                   For The            Cumulative
                                  Six Months Ended         Three Months Ended        Amounts
                                     January 31,               January 31,       from Inception
                              ------------------------  ------------------------ --------------
                                 1999          1998        1999          1998 
                              -----------   ----------  -----------   ----------
<S>                           <C>           <C>         <C>           <C>         <C>         
REVENUE                       $        --   $       --  $        --   $       --  $        -- 
                              -----------   ----------  -----------   ----------  -----------
EXPENSES:
 General and administrative       378,450      110,100       88,900       54,144    1,198,176

OTHER INCOME:
  Interest and dividends          139,415      149,594       64,868       74,070      638,362
                              -----------   ----------  -----------   ----------  -----------

OPERATING (LOSS) INCOME          (239,035)      39,494      (24,032)      19,926     (559,814)

PROVISION FOR INCOME TAXES             --        8,968           --        1,105        3,575
                              -----------   ----------  -----------   ----------  -----------

NET (LOSS) INCOME             $  (239,035)  $   30,526  $   (24,032)  $   18,821  $  (563,389)
                              ===========   ==========  ===========   ==========  ===========

NET (LOSS) INCOME PER
  COMMON SHARE-BASIC AND
  DILUTED                     $      (.13)  $      .02  $      (.01)  $      .01
                              ===========   ==========  ===========   ==========

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING     1,875,000    1,875,000    1,875,000    1,875,000
                              ===========   ==========  ===========   ==========
</TABLE>

See Selected Notes to Financial Statements.
<PAGE>

UNITY FIRST ACQUISITION CORP.
(A DEVELOPMENT STAGE ENTITY)

STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                        For The
                                                       Six Months        Cumulative
                                                         Ended             Amounts
                                                       January 31,      from Inception
                                                 ---------------------  --------------
                                                   1999        1998 
                                                 ---------   ---------   
<S>                                              <C>         <C>         <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                              $(239,035)  $  30,526   $  (563,389)

CHANGES IN CERTAIN ASSETS AND LIABILITIES:
  Increase (decrease) in accrued expenses          311,735     (20,208)      715,817
                                                 ---------   ---------   -----------
         NET CASH PROVIDED BY
           OPERATING ACTIVITIES                     72,700      10,318       152,428
                                                 ---------   ---------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                --          --     6,402,175
  Advances from affiliate                           43,282          --       172,199
  Repayment to affiliate                                --          --       (95,917)
  Deferred registration costs                           --          --       (25,000)
                                                 ---------   ---------   -----------
         NET CASH PROVIDED BY
           FINANCING ACTIVITIES                     43,282          --     6,453,457
                                                 ---------   ---------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  (Increase) in restricted cash and investments   (115,222)   (145,133)   (6,604,929)
                                                 ---------   ---------   -----------
NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                 760    (134,815)          956

CASH AND CASH EQUIVALENTS,
    beginning of period                                196     266,533            -- 
                                                 ---------   ---------   -----------
CASH AND CASH EQUIVALENTS,
    end of period                                $     956   $ 131,718   $       956
                                                 =========   =========   ===========
</TABLE>

See Selected Notes to Financial Statements.
<PAGE>

UNITY FIRST ACQUISITION CORP.
(A DEVELOPMENT STAGE ENTITY)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

FOR THE SIX MONTHS ENDED JANUARY 31, 1999

<TABLE>
<CAPTION>
                                                                 (Deficit)
                                                                Accumulated
                                                Additional      During the
                             Common Stock        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
 six months ended
 January 31, 1999               --       --              --       (239,035)        (239,035)

Increase in value
 attributable to
 common shares
 subject to possible
 conversion                     --       --         (23,024)            --          (23,024)
                         ---------     ----     -----------      ---------      -----------

Balance,
 January 31, 1999        1,875,000     $163     $ 5,081,687      $(563,389)     $ 4,518,461
                         =========     ====     ===========      =========      ===========
</TABLE>

See Selected Notes to Financial Statements.
<PAGE>

UNITY FIRST ACQUISITION CORP.
(A DEVELOPMENT STAGE ENTITY)

SELECTED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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 January 31, 1999 and for all periods presented have been
         made. The results of operations for the period ended January 31, 1999
         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.

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.

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.
<PAGE>

UNITY FIRST ACQUISITION CORP.
(A DEVELOPMENT STAGE ENTITY)

SELECTED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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 options 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.

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 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
         Unity (See note 5).
<PAGE>

UNITY FIRST ACQUISITION CORP.
(A DEVELOPMENT STAGE ENTITY)

SELECTED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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 $6.6 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.
<PAGE>

UNITY FIRST ACQUISITION CORP.
(A DEVELOPMENT STAGE ENTITY)

SELECTED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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.
<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 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 six months ended January 31, 1999, Unity had a net loss of $239,035
attributable to interest income of $139,415, offset by operating expenses of
$378,450, primarily consisting of unsuccessful deal fees of $209,163, management
and professional fees of $151,282, and franchise taxes of $17,500.
<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: March 11, 1999                  By: /s/ Lawrence Burstein 
                                           ---------------------------------
                                             Lawrence Burstein
                                             President
                                             (Principal Executive Officer)



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