<PAGE>


================================================================================

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

                                   FORM 10-Q/A

                                 AMENDMENT NO. 1

[ 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)

                            2101ARENA BLVD, SUITE 100

                          SACRAMENTO, CALIFORNIA 95834
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                            TELEPHONE: (916) 928-6400
              (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, $0.0005 par value, as of February 29, 2000

================================================================================

<PAGE>

                                UNIFY CORPORATION
                                    FORM 10-Q

<TABLE>
<CAPTION>
                                      INDEX

                                                                          PAGE
                                                                         NUMBER
                                                                         ------
<S>           <C>                                                        <C>
PART I.       FINANCIAL INFORMATION

Item 1.       Financial Statements

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

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

              Condensed Consolidated Statements of Cash Flows
                for the nine months ended January 31, 2000 (Restated)
                and 1999................................................      5

              Notes to Condensed Consolidated Financial Statements......      6

Item 2.       Management's Discussion and Analysis of
                 Financial Condition and Results of Operations..........      9


PART II.      OTHER INFORMATION


Item 5.       Disclosure of Investment in Evergreen Internet, Inc.......     15

Item 6.       Exhibits and Reports on Form 8-K..........................     15


SIGNATURE  ..............................................................    16

</TABLE>




                                       2
<PAGE>







PART I.       FINANCIAL INFORMATION
ITEM 1.       FINANCIAL STATEMENTS


                                UNIFY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                       January 31,       April 30,
                                                          2000              1999
                                                       -----------       ----------
                                                       (UNAUDITED            (1)
                                                       AS RESTATED
 ASSETS                                                 -SEE NOTE 1)
<S>                                                    <C>              <C>
Current assets:
   Cash and cash equivalents                           $   11,529       $    5,315
   Investments                                              3,669            6,072
   Accounts receivable, net                                 4,108            9,156
   Prepaid expenses and other current assets                  710              732
                                                        ---------        ---------
      Total current assets                                 20,016           21,275

Property and equipment, net                                 1,097            1,417
Other investments                                             550
Other assets                                                1,064              242
                                                       ----------       ----------
      Total assets                                     $   22,727       $   22,934
                                                       ==========       ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                    $    1,160       $    1,138
   Notes payable to minority interest stockholders            475              608
   Accrued compensation and related expenses                1,604            1,650
   Other accrued liabilities                                3,417            2,621
   Deferred revenue                                         5,559            3,326
                                                       ----------       ----------
      Total current liabilities                            12,215            9,343

Minority interest                                               -              265

Stockholders' equity:
   Common stock                                                 9                9
   Additional paid-in capital                              55,290           54,123
   Note receivable from stockholder                           (52)            (125)
   Accumulated other comprehensive loss                      (777)            (653)
   Accumulated deficit                                    (43,958)         (40,028)
                                                       ----------       ----------
      Total stockholders' equity                           10,512           13,326
                                                       ----------       ----------
      Total liabilities and stockholders' equity       $   22,727       $   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
                                                  --------      -------           -------     -------
                                                (AS RESTATED                     (AS RESTATED
                                                 -SEE NOTE 1)                    -SEE NOTE 1)
<S>                                          <C>             <C>              <C>             <C>
Revenues:
   Software licenses                         $   2,988       $   5,343        $   9,676       $  14,311
   Services                                      2,003           2,734            6,211           7,626
                                             ---------       ---------        ---------       ---------
      Total revenues                             4,991           8,077           15,887          21,937
                                             ---------       ---------        ---------       ---------

Cost of revenues:
   Software licenses                               222             172              661             634
   Services                                        772           1,088            3,044           3,215
                                             ---------       ---------        ---------       ---------
      Total cost of revenues                       994           1,260            3,705           3,849
                                             ---------       ---------        ---------       ---------

Gross margin                                     3,997           6,817           12,182          18,088
                                             ---------       ---------        ---------       ---------

Operating expenses:
   Product development                           1,562           1,457            4,845           4,390
   Selling, general and administrative           3,546           3,933           11,646          11,192
                                             ---------       ---------        ---------       ---------
      Total operating expenses                   5,108           5,390           16,491          15,582
                                             ---------       ---------        ---------       ---------

      Income (loss) from operations             (1,111)          1,427           (4,309)          2,506
Other income, net                                   78              53              650             176
                                             ---------       ---------        ---------       ---------
      Income (loss) before income taxes         (1,033)          1,480           (3,659)          2,682
Provision for income taxes                          74              72              271             160
                                             ---------       ---------        ---------       ---------
      Net income (loss)                      $  (1,107)      $   1,408        $  (3,930)      $   2,522
                                             ==========      =========        ==========      =========


Net income (loss) per share:
   Basic                                     $  (0.06)       $    0.08        $  (0.22)       $    0.15
                                             =========       =========        =========       =========
   Diluted                                   $  (0.06)       $    0.08        $  (0.22)       $    0.14
                                             =========       =========        =========       =========

Shares used in computing net
income (loss) per share:
   Basic                                        18,143          17,046           17,715          16,988
                                             =========       =========        =========       =========
   Diluted                                      18,143          18,710           17,715          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
                                                                          ---------          --------
                                                                          (AS RESTATED
                                                                          -SEE NOTE 1)

<S>                                                                       <C>               <C>
Cash flows from operating activities:
   Net income (loss)                                                      $   (3,930)       $   2,522
   Reconciliation of net income (loss) to net cash provided by
   (used in) in operating activities:
      Depreciation                                                               740              826
      Adjustment to minority interest                                           (265)             (38)
      Changes in operating assets and liabilities:
         Accounts receivable, net                                              5,137           (1,835)
         Prepaid expenses and other current assets                                33              113
         Accounts payable                                                          1              (81)
         Notes payable to minority interest stockholders                        (203)            (212)
         Accrued compensation and related expenses                               (51)            (521)
         Other accrued liabilities                                               805             (166)
         Deferred revenue                                                      2,170             (760)
                                                                          ----------        ----------
            Net cash provided by (used in) operating activities                4,437             (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)
   Decrease in other assets                                                     (550)               -
   Other assets                                                                 (824)              12
                                                                          ----------        ----------
            Net cash provided by investing activities                            611              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 stockholder                        -               (8)
   Collection of note receivable from stockholder,
     net of interest receivable                                                   74               75
                                                                          ----------        ----------
            Net cash provided by financing activities                          1,241              433
                                                                          ----------        ----------

Effect of exchange rate changes on cash                                          (75)             (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 cash flow information:
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 AND RESTATEMENT OF FINANCIAL STATEMENTS

INVESTIGATION AND RESTATEMENT

In June 2000, certain matters came to the attention of the Company's Board of
Directors that indicated that the Company had engaged in improper accounting
practices. The Company's Board of Directors authorized its Audit Committee to
conduct an investigation of the Company's accounting and financial reporting
practices and to recommend remedial action, if any, as a result of the findings
of their investigation. In July 2000, in connection with the ongoing
investigation, the Company placed its chief executive officer and its chief
financial officer on administrative leave, and in November 2000, the Company
terminated its chief executive officer and its chief financial officer resigned.
Based on the results of the Audit Committee's investigation, the Company
concluded that revenue, and in some cases expenses, had been improperly
accounted for in certain transactions during the fiscal year ended April 30,
2000, primarily related to the following:

-    Reciprocal agreement transactions for which there was insufficient support
     for the fair market valuation of inventory, funded development activities,
     or consulting services received by the Company, or equity investments made
     by the Company in connection with the Company delivering products or
     providing services.

-    Improper application of AICPA Statement of Position 97-2, Software Revenue
     Recognition ("SOP 97-2") in which all of the conditions for revenue
     recognition required by SOP 97-2 had not been met.

-    Contingent revenue transactions in which sales of software, services and
     other related items were contingent upon future events, including
     contingencies that were contained in side agreements.

-    Service revenue which was recognized during the first month of the
     contract, rather than ratably over the term of the contract in accordance
     with SOP 97-2

-    Other adjustments, including insufficiently supported journal entries and
     improper recording of marketing co-operative agreements.

The investigation also identified commissions, bonuses and other payments made
to the Company's former chief executive officer during the fiscal year ended
April 30, 2000, which the Company believes were not appropriate. Such amounts
have been charged to expense in that fiscal year; however, the Company is
seeking to have the amounts repaid by the former chief executive officer. The
investigation also included a review of transactions in earlier fiscal years.
After evaluating information from the results of the investigation, the Company
concluded that its financial statements for the fiscal year ended April 30, 1999
and earlier years were not materially misstated. Also, the Company concluded
that the effect on the financial statements for fiscal year


                                       6
<PAGE>

                                UNIFY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2000 of adjustments relating to transactions of earlier years not being made in
those years is not material.

As a result of the investigation, the Company has restated its condensed
consolidated financial statements as of and for the nine months ended January
31, 2000 from amounts previously reported to appropriately account for the
transactions referred to above. The following summarizes the significant effects
of the restatement on the condensed consolidated financial statements as of and
for the three months and nine months ended January 31, 2000 (in thousands,
except per share amounts)

<TABLE>
<CAPTION>
                                                     Three Months Ended            Nine Months Ended
                                                      January 31, 2000             January 31, 2000
                                                     ------------------            -----------------
                                                        As          As             As            As
                                                   Reported      Restated      Reported       Restated
                                                  ----------    ----------    ----------     ----------
<S>                                              <C>           <C>           <C>            <C>
     Total Revenue                               $   10,101    $    4,991    $   28,025     $   15,887
     Gross Margin                                $    8,640    $    3,997    $   23,776     $   12,182
     Net Income (Loss)                           $    2,775    $  (1,107)    $    6,663     $   (3,930)
     Basic Earnings (Loss) per share             $     0.15    $   (0.06)    $     0.37     $    (0.22)
     Diluted Earnings (loss) per share           $     0.14    $   (0.06)    $     0.35     $    (0.22)

                                                                               As of January 31, 2000
                                                                               ----------------------
                                                                                   As              As
                                                                                Reported       Restated
                                                                               ----------     ----------
<S>                                                                           <C>            <C>
    Total Current Assets                                                      $   25,858     $   20,016
    Total Current Liabilities                                                 $    7,769     $   12,215
    Total Stockholders' Equity                                                $   21,112     $   10,512
    Total Assets                                                              $   30,187     $   22,727

</TABLE>

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 fiscal year ended April 30, 2000 and 1999 as filed with the SEC.

2.   NOTES 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 Tokyo International Bank Offered Rate ("TIBOR") plus 50
basis points (approximately 1% at October 31, 1999), and is secured by the
assets of Unify Japan.


                                       7
<PAGE>

                                UNIFY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3.   EARNINGS PER SHARE

SFAS No. 128, EARNINGS PER SHARE, requires a dual presentation of basic and
diluted income (loss) 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. convertible preferred stock, warrants, and
common stock options) were exercised or converted into common stock. The effect
of dilutive securities (stock options) is excluded in the diluted EPS
computation for the three and nine months ended January 31, 2000 as their effect
would be antidilutive. The following is a reconciliation of the numerators and
denominators of the basic and diluted earnings per share computations for the
periods indicated (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                Three Months Ended                Nine Months Ended
                                                    January 31,                      January 31,
                                                ------------------                ------------------
                                                 2000        1999                  2000        1999
                                                ------      ------                ------      ------
<S>                                          <C>             <C>              <C>             <C>
NET INCOME (LOSS)  (NUMERATOR):
Net income (loss), basic and diluted         $  (1,107)      $   1,408        $  (3,930)      $   2,522
                                             ==========      =========        ==========      =========

SHARES  (DENOMINATOR):
Weighted average shares of common
    stock outstanding, basic                    18,143          17,046           17,715          16,988
Effect of dilutive securities (stock options)        -           1,664                -           1,188
                                             ---------       ---------        ---------       ---------
Weighted average shares of common
    stock outstanding, diluted                  18,143          18,710           17,715          18,176
                                             =========       =========        =========       =========

PER SHARE AMOUNT:
Net income (loss) per share, basic           $  (0.06)       $    0.08        $  (0.22)       $    0.15
Effect of dilutive securities (stock options)        -               -                -          (0.01)
                                             ---------       ---------        ---------       ---------
Net income (loss) per share, diluted         $  (0.06)       $    0.08        $  (0.23)       $    0.14
                                             =========       =========        =========       =========

ANTIDILUTIVE SHARES:                         $   1,598               0            1,597              44
                                             =========       =========        =========       =========
</TABLE>

4.   COMPREHENSIVE INCOME (LOSS)

The Company's total comprehensive income (loss) 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 (loss)                            $  (1,107)      $   1,408        $  (3,930)      $   2,522
Foreign currency translation                       (42)            (32)            (124)            (73)
                                             ---------       ---------        ---------       ---------
  Total comprehensive income (loss)          $  (1,149)      $   1,376        $  (4,054)      $   2,449
                                             ==========      =========        ==========      =========
</TABLE>



                                UNIFY CORPORATION


                                       8
<PAGE>


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 fiscal year ended
April 30, 1999 and 2000 as filed with the SEC.

RESULTS OF OPERATIONS

Unify develops, markets and supports Internet software that extends business
applications to the Web. The Company provides features-rich products and
services for organizations growing their business on the Web, based on open,
Java technologies. Unify's products provide enterprise, scalable and affordable
software for building and managing online applications. The Company's flagship
product line, Unify eWave, includes a Web application server, enterprise
application server and commerce framework built on the the Java 2 Enterprise
Edition ("J2EE") platform technology. These products are designed to enable
developers to rapidly build production-ready, scalable Internet and e-commerce
applications that are easy to manage and run with minimal down-time.

In June 2000, certain matters came to the attention of the Company's Board of
Directors that indicated that the Company had engaged in improper accounting
practices. The Company's Board of Directors authorized its Audit Committee to
conduct an investigation of the Company's accounting and financial reporting
practices and to recommend remedial action, if any, as a result of the findings
of its investigation. In July 2000, in connection with the ongoing
investigation, the Company placed its chief executive officer and its chief
financial officer on administrative leave, and in November 2000, the Company
terminated its chief executive officer and its chief financial officer resigned.
Based on the results of the Audit Committee's investigation, the Company
concluded that revenue, and in some cases expenses, had been improperly
accounted for in certain transactions during the fiscal year ended April 30,
2000, primarily related to the following:


                                       9
<PAGE>

                                UNIFY CORPORATION

-    Reciprocal agreement transactions for which there was insufficient support
     for the fair market valuation of inventory, funded development activities,
     or consulting services received by the Company, or equity investments made
     by the Company in connection with the Company delivering products or
     providing services.

-    Improper application of AICPA Statement of Position 97-2, Software Revenue
     Recognition ("SOP 97-2") in which all of the conditions for revenue
     recognition required by SOP 97-2 had not been met.

-    Contingent revenue transactions in which sales of software, services and
     other related items were contingent upon future events, including
     contingencies that were contained in side agreements.

-    Service revenue which was recognized during the first month of the
     contract, rather than ratably over the term of the contract in accordance
     with SOP 97-2.

-    Other adjustments including insufficiently supported journal entries and
     improper recording of marketing co-operative agreements.

The investigation also identified commissions, bonuses and other payments made
to the Company's former chief executive officer during the fiscal year ended
April 30, 2000, which the Company believes were not appropriate. Such payments
have been charged to expense in that fiscal year; however, the Company is
seeking to have the amounts repaid by the former chief executive officer. The
investigation also included a review of transactions in earlier fiscal years.
After evaluating information from the results of the investigation, the Company
concluded that its financial statements for the fiscal year ended April 30, 1999
and earlier years were not materially misstated. Also, the Company concluded
that the effect on the financial statements for fiscal year 2000 of adjustments
relating to transactions of earlier years not being made in those years is not
material.

REVENUES

The Company's strategy is to 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.

Total revenue for the third quarter ended January 31, 2000 decreased $3.1
million (38%) to $5.0 million from $8.1 in the third quarter ended January
31, 1999. Total revenue for the nine months ended January 31, 2000 decreased
$6.1 million (28%) to $15.9 million from $21.9 for the nine months ended
January 31, 1999.

The decrease in total revenues was primarily driven by software license
revenues, which decreased by 44%, or $2.4 million for the three months ended
January 31, 2000, and 32%, or $4.6 million, for the nine months period ended
January 31, 2000 as compared to the same periods in the prior fiscal year.
The decrease was primarily related to the Company's shift in focus from its
client/server product line to its Unify eWave product line, for which the
revenues to date have not met expectations. As the Company emphasized the
sale and marketing of the Unify eWave product line the Unify VISION and
client-server software license revenues also declined further.

                                       10
<PAGE>

                                UNIFY CORPORATION

Service revenue for the third quarter ended January 31, 2000 decreased $0.7
million (27%) to $2.0 million from $2.7 for the same quarter in fiscal 1999.
Total service revenue for the nine months ended January 31, 2000 decreased
$1.4 million (19%) to $6.2 million from $7.6 for the nine months ended
January 31, 1999. Maintenance revenues decreased for the three and nine
months period by 9% and 12%, respectively, from the prior comparative
periods. This reduction in revenues corresponded to decreases in initial
orders in conjunction with the reductions of product sales. Consulting
revenues were down 34% for the nine months ended January 31, 2000 and 68% for
the three months ended January 31, 2000 as compared to the same period in
fiscal 1999. These decreases reflect the cumulative impact on the change in
emphasis to product sales.

International revenues include all software license and service revenues from
customers located outside the United States. International revenues from the
Company's direct sales organizations in Europe and Japan and from value added
resellers, distributors, and other partners in all international locations
accounted for 58% and 48% of total revenues in the quarters ended January 31,
2000 and 1999 respectively, and 57% and 52% for the comparative nine-month
periods ended January 31, 2000 and 1999, respectively.

COST OF REVENUES

Total cost of revenue for the third quarter ended January 31, 2000 decreased
21% from the cost reported during the third quarter ended January 31, 1999.
Total cost of revenue for the nine months ended January 31, 2000 decreased 4%
when compared to the same period in the prior year.

Cost of software licenses represented 7% of software license revenues for the
three months period ended January 31, 2000 and 7% for the nine months period
ended January 31, 2000 and were comparable to the absolute dollar cost of
software licenses in the same periods of the prior year. Cost of services
consists primarily of employee, facilities and travel costs incurred in
providing customer support under software maintenance contracts and
consulting and training services. Cost of services decreased 29%, and 5%,
respectively, for the three and nine-month periods ended January 31, 2000
when compared to the same two periods of the prior year. The costs associated
with training and consulting were primarily responsible for the decrease in
the third quarter, as the Company required less contract labor as a result of
reduced revenues.

PRODUCT DEVELOPMENT

Product development expenses for the quarters ended January 31, 2000 and 1999
were comparable, with a slight increase during fiscal 2000, at $1.6 million
and $1.5 million, respectively. Product development expenses for the nine
months ended January 31, 2000 and 1999 were also comparable, with a slight
increase during fiscal 2000, at $4.8 million and $4.4 million, respectively.
The increases in product development expenses is the result of the
development of the Unify eWave family of products and the resources required
to maintain and support this product line. 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 decreased to $3.5 million, or 71% 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


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                                UNIFY CORPORATION

January 31, 2000 increased to $11.6 million, or 73% of total revenues, as
compared to $11.2 million, or 51% of total revenues, for the same periods of
the prior year. The major components of SG&A for the third quarter of fiscal
2000 were sales expenses of $2.2 million, marketing expenses of $0.7 million,
general and administrative of $0.5 million and bad debt expenses of less than
$0.1 million. Sales expenses decreased $0.2 million when compared to the same
quarter of the prior fiscal year, as a result of the shift in focus to the
Unify eWave product line which had not been fully implemented in the first
quarter. This expense decrease was partially offset by an increase in
marketing expense of $0.1 million as a result of this new product promotion.
General and administrative expenses decreased less than $0.1 million for the
third quarter of fiscal 2000 as compared to the same quarter of fiscal 1999.
On a year to date basis for the nine months ended January 31, 2000 sales
expenses, decreased $0.7 million as a result of the shift in focus to the
Unify eWave product line; marketing expense increased $0.6 million as a
result of the new Unify eWave promotion; general and administrative expenses
decreased $0.6 million primarily as a result of reduced spending the first
quarter and bad debt expenses were increased by $1.1 million when compared to
the same nine months period for fiscal year 1999. 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 taxes and
withholding taxes 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.

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 decreased to $7.7 million at January 31, 2000 from $11.9 million
at April 30, 1999.

The Company's operating activities generated cash of $4.4 million during the
nine months ended January 31, 2000, as a result of increases in deferred
revenue of $2.2 million and increases in other accrued liabilities of $0.8
million, and accounts receivable of $5.1 million, offset by operating losses
of $3.9 million for the fist nine months of fiscal year 2000. Accounts
receivable decreased by $5.1 million of which $2.8 million was achieved
through the sale of receivables without recourse. Increases in other
liabilities were due primarily to accrued software and developmental costs.
Investing activities during the period generated cash of $0.6 million,
consisting principally of net sales of available-for-sale securities of $2.4
million of which $1.4 million was used to acquire other investments and
developed software. Cash provided by financing activities during the period
was $1.2 million, which represented proceeds the issuance of common stock
under the Company's stock option and stock purchase plan of $1.2 million.

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


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                                UNIFY CORPORATION

business; fluctuations in the Company's or its competitors' 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 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; legal proceedings brought against the
Company or its officers; significant changes in the Company' senior management
team. 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; realignments 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. 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, and 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.

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


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                                UNIFY CORPORATION

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. The Company 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. The Company'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.

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 $1.0 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.





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                                UNIFY CORPORATION


PART II.         OTHER INFORMATION


ITEM 6.          EXHIBITS AND REPORTS ON FORM 8-K

                   (a)    Exhibits
                          None


                   (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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                                UNIFY CORPORATION


                                    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:   January 30, 2001           Unify Corporation
                                   (REGISTRANT)



                                    By:

                                    /s/   DAVID H. ADAMS
                                    -----------------------------
                                           David H. Adams
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)





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