<PAGE>

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ------------------

                                    FORM 10-Q

[ X ]    Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                 FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2000
 OR

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

                        COMMISSION FILE NUMBER: 001-11807
                           ---------------------------

                                UNIFY CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           Delaware                                        94-2710559
-------------------------------                 -------------------------------
(STATE OR OTHER JURISDICTION OF                (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION)                              NUMBER)

                       100 CENTURY CENTER COURT, SUITE 302
                           SAN JOSE, CALIFORNIA 95112
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                            TELEPHONE: (408) 451-2000
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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

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

  18,391,419 shares of Common Stock, $0.001 par value, as of February 29, 2000

------------------------------------------------------------------------------
<PAGE>

                                UNIFY CORPORATION
                                    FORM 10-Q

                                      INDEX
<TABLE>
<CAPTION>

                                                                                         PAGE
                                                                                        NUMBER
                                                                                        ------
<S>         <C>                                                                         <C>

PART I.       FINANCIAL INFORMATION

Item 1.       Financial Statements

              Condensed Consolidated Balance Sheets as of
               January 31, 2000 and April 30, 1999................................         3

              Condensed Consolidated Statements of Operations for
                  the three and nine months ended January 31, 2000
                  and 1999........................................................         4

              Condensed Consolidated Statements of Cash Flows
                  for the nine months ended January 31, 2000 and 1999.............         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 5.       Disclosure of Investment in Evergreen Internet, Inc.................        14

Item 6.       Exhibits and Reports on Form 8-K....................................        14


SIGNATURE.........................................................................        15
</TABLE>


                                        2
<PAGE>


PART I.       FINANCIAL INFORMATION
ITEM 1.       FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                UNIFY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

                                                                        January 31,       April 30,
                                                                            2000             1999
                                                                        ----------        ---------
ASSETS                                                                  (unaudited)              (1)
<S>                                                                   <C>             <C>
Current assets:
   Cash and cash equivalents                                            $   11,529       $    5,315
   Short-term investments                                                    3,669            6,072
   Accounts receivable, net                                                  9,763            9,156
   Prepaid expenses and other current assets                                   897              732
                                                                        ----------       ----------
      Total current assets                                                  25,858           21,275

Property and equipment, net                                                  1,097            1,417
Other assets                                                                 3,232              242
                                                                        ----------       ----------
      Total assets                                                      $   30,187       $   22,934
                                                                        ==========       ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                     $    1,059       $    1,138
   Amounts due to minority interest stockholders                               475              608
   Accrued compensation and related expenses                                 1,604            1,650
   Other accrued liabilities                                                 2,328            2,621
   Deferred revenue                                                          3,303            3,326
                                                                        ----------       ----------
      Total current liabilities                                              8,769            9,343

Minority interest                                                              306              265

Stockholders' equity:
   Common stock                                                                  9                9
   Additional paid-in capital                                               55,290           54,123
   Notes receivable from stockholder                                           (52)            (125)
   Cumulative other comprehensive income                                      (741)            (653)
   Accumulated deficit                                                     (33,394)         (40,028)
                                                                        ----------       ----------
      Total stockholders' equity                                            21,112           13,326
                                                                        ----------       ----------
      Total liabilities and stockholders' equity                        $   30,187       $   22,934
                                                                        ==========       ==========
</TABLE>


(1) Derived from the audited consolidated financial statements for the year
ended April 30, 1999.



     See accompanying notes to condensed consolidated financial statements.


                                        3
<PAGE>

                                UNIFY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                Three Months Ended               Nine  Months Ended
                                                    January 31,                      January 31,
                                            ---------------------------      ---------------------------
                                                 2000            1999             2000            1999
                                             ---------       ---------        ---------       ---------
<S>                                       <C>             <C>              <C>              <C>
Revenues:
   Software licenses                         $   7,104       $   5,343        $  19,519       $  14,311
   Services                                      2,997           2,734            8,506           7,626
                                             ---------       ---------        ---------       ---------
      Total revenues                            10,101           8,077           28,025          21,937
                                             ---------       ---------        ---------       ---------

Cost of revenues:
   Software licenses                               261             172              700             634
   Services                                      1,200           1,088            3,549           3,215
                                             ---------       ---------        ---------       ---------
      Total cost of revenues                     1,461           1,260            4,249           3,849
                                             ---------       ---------        ---------       ---------

Gross margin                                     8,640           6,817           23,776          18,088
                                             ---------       ---------        ---------       ---------

Operating expenses:
   Product development                           1,562           1,457            4,719           4,390
   Selling, general and administrative           4,303           3,933           12,431          11,192
                                             ---------       ---------        ---------       ---------
      Total operating expenses                   5,865           5,390           17,150          15,582
                                             ---------       ---------        ---------       ---------

      Income from operations                     2,775           1,427            6,626           2,506
Other income, net                                  113              53              361             176
                                             ---------       ---------        ---------       ---------
      Income before income taxes                 2,888           1,480            6,987           2,682
Provision for income taxes                        (113)            (72)            (354)           (160)
                                             ----------      ---------        ---------       ---------
      Net income                             $   2,775       $   1,408        $   6,633       $   2,522
                                             =========       =========        =========       =========


Net income per share:
   Basic                                     $    0.15       $    0.08        $    0.37       $    0.15
                                             =========       =========        =========       =========
   Diluted                                   $    0.14       $    0.08        $    0.35       $    0.14
                                             =========       =========        =========       =========

Shares used in computing net income
per share:
   Basic                                        18,183          17,046           17,714          16,988
                                             =========       =========        =========       =========
   Diluted                                      19,843          18,710           18,781          18,176
                                             =========       =========        =========       =========
</TABLE>


         See accompanying notes to condensed consolidated financial statements.


                                        4
<PAGE>

                                UNIFY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                          Nine Months Ended January 31,
                                                                          -----------------------------
                                                                               2000              1999
                                                                          -----------        ----------
<S>                                                                   <C>                <C>
Cash flows from operating activities:
   Net income                                                             $    6,633        $   2,522
   Reconciliation of net income to net cash provided by
   (used in) in operating activities:
      Depreciation                                                               740              826
      Provision for losses on accounts receivable                                                 481
      Minority interest                                                           40              (38)
      Changes in operating assets and liabilities:
         Accounts receivable, net                                             (1,722)          (2,316)
         Prepaid expenses and other current assets                              (154)             113
         Accounts payable                                                        (99)             (81)
         Amounts due to minority interest stockholders                          (203)            (212)
         Accrued compensation and related expenses                               (51)            (521)
         Other accrued liabilities                                              (283)            (166)
         Deferred revenue                                                        (33)            (760)
                                                                          ----------        ---------
            Net cash provided by in operating activities                       4,868             (152)
                                                                          ----------        ---------

Cash flows from investing activities:
   Purchases of available-for-sale securities                                 (3,669)          (2,300)
   Sales of available-for-sale securities                                      6,072            3,460
   Purchases of property and equipment                                          (418)            (450)
   Other assets                                                               (1,778)              12
                                                                          -----------       ---------
            Net cash provided by investing activities                            207              722
                                                                          ----------        ---------

Cash flows from financing activities:
   Principal payments under debt obligations                                                      (22)
   Proceeds from issuance of common stock, net                                 1,167              547
   Repurchase of common stock                                                                    (159)
   Accrual of interest on notes receivable from stockholders                                       (8)
   Collection of notes receivable from stockholders,
    net of interest receivable                                                    75               75
                                                                          ----------        ---------
            Net cash provided by financing activities                          1,242              433
                                                                          ----------        ---------

Effect of exchange rate changes on cash                                         (102)             (27)
                                                                          ----------        ---------
Net increase in cash and cash equivalents                                      6,214              976
Cash and cash equivalents, beginning of period                                 5,315            5,279
                                                                          ----------        ---------
Cash and cash equivalents, end of period                                  $   11,529        $   6,255
                                                                          ==========        =========

Supplemental schedule of noncash investing and financing activities:
Cash paid during the period for:
   Interest                                                               $       63        $     108
                                                                          ==========        =========
   Income taxes                                                           $      152        $      68
                                                                          ==========        =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                        5
<PAGE>

                                UNIFY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

The condensed consolidated financial statements have been prepared by Unify
Corporation (the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). While the interim financial
information contained in this filing is unaudited, such financial statements
reflect all adjustments (consisting only of normal recurring adjustments)
which the Company considers necessary for a fair presentation. The results
for interim periods are not necessarily indicative of the results to be
expected for the entire fiscal year. These financial statements should be
read in conjunction with the Consolidated Financial Statements and Notes
thereto, together with Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are included in the Company's
Annual Report on Form 10-K for the year ended April 30, 1999 as filed with
the SEC.

2.       OTHER ASSETS

<TABLE>
<CAPTION>
                                                                              January 31,      April 30,
                                                                                  2000            1999
                                                                              --------        --------
<S>                                                                        <C>             <C>
Investments                                                                   $     800       $       0
Notes Receivable                                                                  1,587             118
Other Assets                                                                        845             124
                                                                              ---------       ---------
      Total Other Assets                                                      $   3,232       $     242
                                                                              =========       =========
</TABLE>

3.   AMOUNTS DUE TO MINORITY INTEREST STOCKHOLDERS

In September 1995, Unify Japan entered into a 100 million yen loan agreement
with a bank affiliated with Sumitomo Metals Industries, Ltd. ("SMI"). The
loan bears interest at the Japanese prime rate (approximately 1% at February
29, 2000), and is secured by the assets of Unify Japan. In September 1999,
this loan was extended for an additional year with a guarantee letter from
SMI. The balance of the loan was 50 million yen at February 29, 2000.

4.   EARNINGS PER SHARE

SFAS No. 128, EARNINGS PER SHARE, requires a dual presentation of basic and
diluted earnings per share ("EPS"). Basic EPS excludes dilution and is
computed by dividing net income attributable to common stockholders by the
weighted average of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock (e.g. common stock options) were exercised or
converted into common stock.


                                        6
<PAGE>

                                UNIFY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share computations for the periods indicated:
<TABLE>
<CAPTION>

                                                Three Months Ended               Nine Months Ended
                                                    January 31,                      January 31,
                                            ---------------------------      ---------------------------
                                                 2000            1999             2000            1999
                                             ---------       ---------        ---------       ---------
<S>                                        <C>             <C>              <C>             <C>
NET INCOME  (NUMERATOR):
Net income, basic and diluted                $   2,775       $   1,408        $   6,633       $   2,522
                                             =========       =========        =========       =========

SHARES  (DENOMINATOR):
Weighted average shares of common
    stock outstanding, basic                    18,183          17,046           17,714          16,988
Weighted average common equivalent
    shares outstanding                           1,660           1,664            1,077           1,188
                                             ---------       ---------        ---------       ---------
Weighted average shares of common
    stock outstanding, diluted                  19,843          18,710           18,781          18,176
                                             =========       =========        =========       =========

PER SHARE AMOUNT:
Net income per share, basic                  $    0.15       $    0.08        $    0.37       $    0.15
Reduction in net income per share due
    due to weighted average common
    common equivalent shares                    (0.01)               -           (0.02)          (0.01)
                                             ---------       ---------        ---------       ---------
Net income per share, diluted                $    0.14       $    0.08        $    0.35       $    0.13
                                             =========       =========        =========       =========

ANTIDILUTIVE SHARES:                                 6               0                3              22
                                             =========       =========        =========       =========
</TABLE>



5.   COMPREHENSIVE INCOME

The Company's total comprehensive income for the periods shown was as follows:
<TABLE>
<CAPTION>

                                                Three Months Ended                Nine Months Ended
                                                    January 31,                       January 31,
                                            ---------------------------      ---------------------------
                                                 2000            1999             2000            1999
                                             ---------       ---------        ---------       ---------
<S>                                        <C>             <C>              <C>              <C>

Net income                                   $   2,775       $   1,408        $   6,633       $   2,522
Foreign currency translation                       (52)            (32)             (88)            (73)
                                             ---------       ---------        ---------       ---------
    Total comprehensive income               $   2,723       $   1,376        $   6,545       $   2,449
                                             =========       =========        =========       =========
</TABLE>

                                        7

<PAGE>

                                UNIFY CORPORATION

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

THE DISCUSSION IN THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING
STATEMENTS THAT HAVE BEEN MADE PURSUANT TO THE PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING STATEMENTS ARE
BASED ON CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS ABOUT THE SOFTWARE
INDUSTRY AND CERTAIN ASSUMPTIONS MADE BY THE COMPANY'S MANAGEMENT. WORDS SUCH
AS "ANTICIPATES", "EXPECTS", "INTENDS", "PLANS", "BELIEVES", "SEEKS",
"ESTIMATES", VARIATIONS OF SUCH WORDS AND SIMILAR EXPRESSIONS ARE INTENDED TO
IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE STATEMENTS ARE NOT GUARANTEES
OF FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND
ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT; THEREFORE, ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE EXPRESSED OR FORECASTED IN ANY SUCH
FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT
LIMITED TO, THOSE SET FORTH HEREIN UNDER "VOLATILITY OF STOCK PRICE AND
GENERAL RISK FACTORS AFFECTING QUARTERLY RESULTS" AND IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-K UNDER "BUSINESS - RISK FACTORS." UNLESS REQUIRED BY LAW,
THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING
STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR
OTHERWISE. HOWEVER, READERS SHOULD CAREFULLY REVIEW THE RISK FACTORS SET
FORTH IN OTHER REPORTS OR DOCUMENTS THE COMPANY FILES FROM TIME TO TIME WITH
THE SEC, PARTICULARLY THE COMPANY'S ANNUAL REPORTS ON FORM 10-K, QUARTERLY
REPORTS ON FORM 10-Q AND ANY CURRENT REPORTS ON FORM 8-K.

The following discussion should be read in conjunction with the unaudited
Condensed Consolidated Financial Statements and Notes thereto in Part I, Item
1 of this Quarterly Report on Form 10-Q and with the audited Consolidated
Financial Statements and Notes thereto, together with Management's Discussion
and Analysis of Financial Condition and Results of Operations, which are
included in the Company's Annual Report on Form 10-K for the year ended April
30, 1999 as filed with the SEC.

RESULTS OF OPERATIONS

REVENUES

The Company's strategy is to aggressively market and enhance its e-commerce
and Internet products. The Company continues to support its extensive
installed base of client/server products, which the Company believes
represents a significant source of potential customers for its Internet
products. The Company also generates significant revenues from services,
including customer maintenance, consulting and training. The following table
sets forth revenues from licenses of its Internet and client/server products
and from services for the periods indicated:


                                        8
<PAGE>

<TABLE>
<CAPTION>

                                                Three Months Ended                Nine Months Ended
                                                    JANUARY 31,                       JANUARY 31,
                                            ---------------------------      ---------------------------
                                                 2000            1999             2000            1999
                                             ---------       ---------        ---------       ---------
<S>                                       <C>              <C>              <C>             <C>
License revenues:
   Internet products                         $   5,002       $   3,139        $  13,029       $   8,008
   Client/server products                        2,102           2,204            6,490           6,303
                                             ---------       ---------        ---------       ---------
      Total license revenues                     7,104           5,343           19,519          14,311
Services revenues                                2,997           2,734            8,506           7,626
                                             ---------       ---------        ---------       ---------
      Total revenues                         $  10,101       $   8,077        $  28,025       $  21,937
                                             =========       =========        =========       =========
</TABLE>

Total revenues for the three and nine months ended January 31, 2000 increased
25% and 28%, respectively, over the same periods of the prior year. License
revenues from internet products for the three and nine months ended January
31, 2000 were 59% and 63% higher, respectively, than for the same periods of
the prior year, reflecting increased customer acceptance of those products.
License revenues from client/server products were comparable at approximately
$2 million in each of the quarters ended January 31, 2000 and 1999.
Client/server license revenues for the nine months ended January 31, 2000
increased 3% over the same period of the prior year. Service revenues for the
three and nine months ended January 31, 2000 increased 10% and 12%,
respectively, over the same periods of the prior year principally due to
higher consulting revenues which resulted from the company's pursuit of new
internet consulting opportunities during fiscal 2000.

International revenues decreased to 44% and 41% of total revenues in the
three and nine months ended January 31, 2000 from 48% and 52% of total
revenues in the three and nine months ended January 31, 1999, due to
increased focus on the domestic internet and e-commerce market.

COST OF REVENUES

Cost of software licenses represented 4% of software license revenues for
both the three month period and the nine month period ended January 31, 2000
and were comparable to cost of software licenses in the same periods of the
prior year.

Cost of services for the three and nine months ended January 31, 2000
increased by 10% and 10%, respectively, compared to the same periods of the
prior year, primarily due to higher consulting costs associated with the
company's pursuit of new internet consulting opportunities during fiscal
2000. In percentage terms, cost of services for the three months ended
January 31, 2000 reflected no change (at 40%) and also reflected no change
(at 42%) for the nine months ended January 31, 2000, primarily due to higher
service revenues in these fiscal 2000 periods.


                                        9
<PAGE>

PRODUCT DEVELOPMENT

Product development expenses for the quarters ended January 31, 2000 and 1999
were comparable at $1.6 million and $1.5 million, respectively, and
represented 15% and 18% of total revenues for those periods. Product
development expenses for the nine months ended January 31, 2000 and 1999 were
also stable at approximately $4.7 million and $4.4 million, respectively and
represented 17% and 20% of total revenues for those periods. The decreases in
product development expenses as a percentage of total revenues were due to
the growth in license revenues during the fiscal 2000 periods as compared to
the same periods of the prior year. The Company believes that substantial
investment in product development is critical to maintaining technological
leadership and therefore intends to continue to devote significant resources
to product development.

SELLING, GENERAL AND ADMINISTRATIVE

Selling, general and administrative ("SG&A") expenses for the quarter ended
Janaury 31, 2000 increased to $4.3 million, or 43% of total revenues, as
compared to $3.9 million, or 49% of total revenues, for the same quarter of
the prior year. SG&A expenses for the nine months ended January 31, 2000
increased to $12.4 million, or 44% of total revenues, as compared to $11.2
million, or 51% of total revenues, for the same period of the prior year.
Fiscal 2000 SG&A expenses were higher in absolute dollars compared to the
same period of the prior year as the Company executed marketing programs to
support the launch of its new eWave family of Internet products and augmented
its bad debt reserves. These increases were partially offset by a decrease in
sales expense due to open sales positions. The decreases in SG&A expenses as
a percentage of total revenues were attributable to the increase in fiscal
2000 license revenues as compared to the same periods of the prior year. The
Company expects that total SG&A expenses will fluctuate from quarter to
quarter primarily because of variability in marketing program spending and
sales commission expense.

PROVISION FOR INCOME TAXES

The Company recorded tax provisions for the three and nine months ended
January 31, 2000 and 1999 which related primarily to foreign income tax
withholding on software license royalties paid to the Company by certain
foreign licensees. For the same periods, the Company recorded no significant
federal or state income tax provisions as the Company utilized net operating
loss carryforwards.

VOLATILITY OF STOCK PRICE AND GENERAL RISK FACTORS AFFECTING QUARTERLY RESULTS

The Company's common stock price has been and is likely to continue to be
subject to significant volatility. A variety of factors could cause the price
of the Company's common stock to fluctuate, perhaps substantially, including:
announcements of developments related to the Company's business; fluctuations
in the Company's or its competitors' quarterly operating results and order
levels; general conditions in the computer industry or the worldwide economy;
announcements of technological innovations; new products or product
enhancements by the Company or its


                                       10
<PAGE>

competitors; changes in financial estimates by securities analysts;
developments in patent, copyright or other intellectual property rights; and
developments in the Company's relationships with its customers, distributors
and suppliers. In addition, in recent years the stock market in general, and
the market for shares of equity securities of many high technology companies
in particular, has experienced extreme price fluctuations which have often
been unrelated to the operating performance of those companies. Such
fluctuations may adversely affect the market price of the Company's common
stock.

The Company's quarterly operating results have varied significantly in the
past, and the Company expects that its operating results are likely to vary
significantly from time to time in the future. Such variations result from,
among other factors, the following: the size and timing of significant orders
and their fulfillment; demand for the Company's products; the number, timing
and significance of product enhancements and new product announcements by the
Company and its competitors; ability of the Company to attract and retain key
employees; seasonality; changes in pricing policies by the Company or its
competitors; realignment of the Company's organizational structure; changes
in the level of the Company's operating expenses; changes in the Company's
sales incentive plans; budgeting cycles of the Company's customers; customer
order deferrals in anticipation of enhancements or new products offered by
the Company or its competitors; product life cycles; product defects and
other product quality problems; the results of international expansion;
currency fluctuations; and general domestic and international economic and
political conditions. Because a significant portion of the Company's revenues
have been, and the Company believes will continue to be, derived from orders
ranging in size from $250,000 to approximately $1 million or more, the timing
of such orders and their fulfillment has caused and is expected to continue
to cause material fluctuations in the Company's operating results,
particularly on a quarterly basis.

Due to the foregoing factors, quarterly revenues and operating results are
difficult to forecast. Revenues are also difficult to forecast because the
market for Internet and e-commerce application development software is
rapidly evolving, and the Company's sales cycle, from initial evaluation to
purchase and the provision of maintenance services, is lengthy and varies
substantially from customer to customer. Because the Company normally ships
products within a short time after it receives an order, it typically does
not have any material backlog. As a result, to achieve its quarterly revenue
objectives, the Company is dependent upon obtaining orders in any given
quarter for shipment in that quarter. Furthermore, because many customers
place orders toward the end of a fiscal quarter, the Company generally
recognizes a substantial portion of its revenues at the end of a quarter. As
the Company's expense levels are based in significant part on the Company's
expectations as to future revenues and are therefore relatively fixed in the
short term, if revenue levels fall below expectations operating results are
likely to be disproportionately adversely affected.

The Company also expects that its operating results will be affected by
seasonal trends. The Company believes that, in general, it is likely it will
experience relatively higher revenues in fiscal quarters ending April 30 and
relatively lower revenues in fiscal quarters ending July 31 as a result of
efforts by its sales force to meet fiscal year-end sales quotas. The Company
also anticipates that it may experience relatively weaker demand in fiscal
quarters ending July 31 and October 31 as a result of reduced business
activity in Europe during the summer months.


                                       11
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

At January 31, 2000, the Company had cash, cash equivalents and short-term
investments of $15.2 million, compared to $11.4 million at April 30, 1999.
Working capital increased to $17.1 million at January 31, 2000 from $11.9
million at April 30, 1999.

The Company's operating activities generated cash of $4.9 million during the
nine months ended January 31, 2000, primarily from net income. Investing
activities during the period generated cash of $.2 million, consisting
principally of net sales of available-for-sale securities. Cash provided by
financing activities during the period was $1.2 million, primarily comprised
of proceeds from issuance of common stock under the Company's stock option
and stock purchase plans.

The Company believes that current cash, cash equivalents and short-term
investments will be sufficient to meet its cash requirements during the next
12 months. Thereafter, depending on its operating results, the Company may
require additional equity or debt financing to meet its working capital or
capital equipment requirements. There can be no assurance that additional
financing will be available when required or, if available, that it will be
on terms satisfactory to the Company.


DISCLOSURES ABOUT MARKET RATE RISK

INTEREST RATE RISK. The Company's exposure to market rate risk for changes in
interest rates relates primarily to its investment portfolio, which consists
of cash equivalents and short-term investments. Cash equivalents are highly
liquid investments with original maturities of three months or less and are
stated at cost. Cash equivalents are generally maintained in money market
accounts which have as their objective preservation of principal and which
hold investments with maturity dates of less than 90 days. The Company does
not believe its exposure to interest rate risk is material for these
balances, which totaled $11.5 million at January 31, 2000. The securities in
the Company's short-term investment portfolio are generally classified as
available-for-sale and, consequently, are recorded on the consolidated
balance sheet at fair value with unrealized gains or losses reported as a
separate component of stockholders' equity. Short-term investments totaled
$3.7 million at January 31, 2000 and there were no material realized or
unrealized gains or losses on short-term investments during the first nine
months of fiscal 2000. Unify does not use derivative financial instruments in
its short-term investment portfolio, places its investments with high quality
issuers and, by policy, limits the amount of credit exposure to any one
issuer. The Company is averse to principal loss and attempts to ensure the
safety of its invested funds by limiting default, market and reinvestment
risk. Unify's short-term investments at January 31, 2000 consisted of $3.7
million in high quality corporate bonds maturing within one year, which the
Company does not believe carry any material interest rate exposure. If market
interest rates were to change immediately and uniformly by ten percent from
levels at January 31, 2000, the fair value of the Company's cash equivalents
and short-term investments would change by an insignificant amount.


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<PAGE>

FOREIGN CURRENCY EXCHANGE RATE RISK. As a global concern, the Company faces
exposure to adverse movements in foreign currency exchange rates. These
exposures may change over time as business practices evolve and could have a
material adverse impact on the Company's business, operating results and
financial position. Historically, the Company's primary exposures have
related to local currency denominated sales and expenses in Europe, Japan and
Australia. Due to the substantial volatility of currency exchange rates,
among other factors, the Company cannot predict the effect of exchange rate
fluctuations on its future operating results. The Company also has currency
exchange rate exposures on intercompany accounts receivable owed to the
Company as a result of local currency sales of software licenses by the
Company's international subsidiaries in the United Kingdom, France and Japan.
At January 31, 2000, the Company had $2.0 million, $0.4 million and $1.4
million in such receivables denominated in British pounds, French francs and
Japanese yen, respectively. The Company encourages prompt payment of these
intercompany balances in order to minimize its exposure to currency
fluctuations, but it engages in no hedging activities to reduce the risk of
such fluctuations. A hypothetical ten percent change in foreign currency
rates would have an insignificant impact on the Company's business, operating
results and financial position. The Company has not experienced material
exchange losses on intercompany balances in the past; however, due to the
substantial volatility of currency exchange rates, among other factors, it
cannot predict the effect of exchange rate fluctuations on its future
business, operating results and financial position.

YEAR 2000

The Company did not experience any significant issues for any of its products
with the advent of the new millenium. All current Unify products use
four-digit years for all internal manipulations and representations. The
Company informed its customers that it was phasing out support for certain
older versions of Unify products that were not Year 2000 compliant by
December 15, 1999. The Company has not been sued and is not aware of any
potential lawsuits regarding Year 2000 claims. The possibility exists that
the Company may face claims based on Year 2000 problems in other companies'
products or issues arising from the integration of multiple products within
an overall system. The costs of defending and resolving Year 2000 issues,
regardless of the merits of such disputes, and any liability the Company may
have for such Year 2000 related damages, could materially adversely affect
the Company's business, operating results, and financial condition.

To date, the Company is not aware of any significant supplier or service
provider with a Year 2000 issue that would materially impact the Company's
business, operating results or financial condition.

COSTS. The costs incurred in addressing the Year 2000 issue were expensed as
incurred in compliance with generally accepted accounting principles. The
total cost of these Year 2000 compliance activities was approximately
$950,000. Funding of these costs have come from existing cash resources. No
current or future expenditures for the Year 2000 issue are foreseen at this
time.


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PART II.            OTHER INFORMATION


ITEM 5.             DISCLOSURE OF INVESTMENT IN EVERGREEN INTERNET, INC.

                     The Company has entered into two Stock Subscription
                     Agreements with Evergreen Internet, Inc. The Company will
                     issue Unify Corporation shares worth $5 million to
                     Evergreen Internet, Inc. in exchange for a total of
                     1,040,993 common shares, or approximately 10% of Evergreen
                     Internet, Inc. The Company currently has an OEM agreement
                     with Evergreen Internet, Inc. related to its eWave Commerce
                     product.


ITEM 6.             EXHIBITS AND REPORTS ON FORM 8-K

                      (a)    Exhibits
                             Exhibit 27          Financial Data Schedule


                      (b)    Reports on Form 8-K
                             The Company filed no reports on Form 8-K during the
                             quarter ended January 31, 2000.


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                                    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.


Date:   March 14, 2000            Unify Corporation
                                  (REGISTRANT)



                                  By:

                                  /s/ Gary Pado
                                  --------------------------------------------
                                  Gary Pado
                                  Vice President, Finance, and Chief Financial
                                  Officer  (Principal Financial and Accounting
                                  Officer)


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