<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 OCTOBER 31, 1999
        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
    INCORPORATION OR ORGANIZATION)                IDENTIFICATION NUMBER)


                           2101 ARENA 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.

18,180,904 shares of Common Stock, $0.0005 par value, as of November 30, 1999

===============================================================================
<PAGE>

                                UNIFY CORPORATION
                                   FORM 10-Q/A

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                NUMBER
<S>                                                                                             <C>

PART I.               FINANCIAL INFORMATION

Item 1.               Financial Statements

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

                      Condensed Consolidated Statements of Operations for
                          the three and six months ended October 31, 1999
                          (Restated) and 1998.............................................         4

                      Condensed Consolidated Statements of Cash Flows
                          for the six months ended October 31, 1999 (Restated)
                          and 1998........................................................         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 4.               Submission of Matters to a Vote of Security Holders.................        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>
                                                                        October 31,       April 30,
                                                                           1999             1999
                                                                         ---------       ----------
                                                                        (UNAUDITED
                                                                        AS RESTATED
                                                                       - SEE NOTE 1)         (1)
<S>                                                                    <C>              <C>
ASSETS
Current assets:
   Cash and cash equivalents                                            $    8,666       $    5,315
   Investments                                                               4,713            6,072
   Accounts receivable, net                                                  5,581            9,156
   Prepaid expenses and other current assets                                   708              732
                                                                        ----------       ----------
      Total current assets                                                  19,668           21,275

Property and equipment, net                                                  1,240            1,417
Other investments                                                              550
Other assets                                                                 1,034              242
                                                                        ----------       ----------
      Total assets                                                      $   22,492       $   22,934
                                                                        ==========       ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                     $      916       $    1,138
   Notes payable to minority interest stockholders                             576              608
   Accrued compensation and related expenses                                 1,598            1,650
   Other accrued liabilities                                                 3,793            2,621
   Deferred revenue                                                          4,411            3,326
                                                                        ----------       ----------
      Total current liabilities                                             11,294            9,343

Minority interest                                                                -              265

Stockholders' equity:
   Common stock                                                                  9                9
   Additional paid-in capital                                               54,852           54,123
   Note receivable from stockholder                                            (77)            (125)
   Accumulated other comprehensive loss                                       (735)            (653)
   Accumulated deficit                                                     (42,851)         (40,028)
                                                                        ----------       ----------
      Total stockholders' equity                                            11,198           13,326
                                                                        ----------       ----------
      Total liabilities and stockholders' equity                        $   22,492       $   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                 Six Months Ended
                                                    October 31,                       October 31,
                                            ---------------------------      ---------------------------
                                               1999            1998             1999            1998
                                             ---------       ---------        ---------       ---------
                                             (AS RESTATED                     (AS RESTATED
                                             -SEE NOTE 1)                     -SEE NOTE 1)
<S>                                         <C>             <C>              <C>             <C>
Revenues:
   Software licenses                         $   3,578       $   4,726        $   6,688       $   8,968
   Services                                      2,036           2,474            4,208           4,892
                                             ---------       ---------        ---------       ---------
      Total revenues                             5,614           7,200           10,896          13,860
                                             ---------       ---------        ---------       ---------

Cost of revenues:
   Software licenses                               210             236              439             462
   Services                                      1,129           1,074            2,272           2,127
                                             ---------       ---------        ---------       ---------
      Total cost of revenues                     1,339           1,310            2,711           2,589
                                             ---------       ---------        ---------       ---------

Gross margin                                     4,275           5,890            8,185          11,271
                                             ---------       ---------        ---------       ---------

Operating expenses:
   Product development                           1,719           1,484            3,283           2,933
   Selling, general and administrative           4,094           3,606            8,100           7,259
                                             ---------       ---------        ---------       ---------
      Total operating expenses                   5,813           5,090           11,383          10,192
                                             ---------       ---------        ---------       ---------

      Income  (loss) from operations            (1,538)            800           (3,198)          1,079
Other income, net                                  122             100              572             123
                                             ---------       ---------        ---------       ---------
      Income (loss) before income taxes         (1,416)            900           (2,626)          1,202
Provision for income taxes                          96              44              197              88
                                             ---------       ---------        ---------       ---------
      Net income (loss)                      $  (1,512)      $     856        $  (2,823)      $   1,114
                                             ==========      =========        ==========      =========


Net income (loss) per share:
   Basic                                     $  (0.09)       $    0.05        $  (0.16)       $    0.07
                                             =========       =========        =========       =========
   Diluted                                   $  (0.09)       $    0.05        $  (0.16)       $    0.07
                                             =========       =========        =========       =========

Shares used in computing net income
 (loss) per share:
   Basic                                        17,767          16,870           17,811          16,828
                                             =========       =========        =========       =========
   Diluted                                      17,767          17,094           17,811          17,076
                                             =========       =========        =========       =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>

                                UNIFY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                          SIX MONTHS ENDED OCTOBER 31,
                                                                             1999              1998
                                                                          ----------        ---------
                                                                         (AS RESTATED
                                                                         -SEE NOTE 1)
<S>                                                                      <C>               <C>
Cash flows from operating activities:
   Net income (loss)                                                      $   (2,823)       $   1,114
   Reconciliation of net income (loss) to net cash provided by
   (used in) in operating activities:
      Depreciation                                                               496              554
      Adjustments to minority interest                                          (265)             (27)
     Changes in operating assets and liabilities:
        Accounts receivable, net                                               3,787               97
        Prepaid expenses and other current assets                                 34               32
        Accounts payable                                                        (245)             188
        Notes payable to minority interest stockholders                         (109)            (198)
        Accrued compensation and related expenses                                (73)            (239)
        Other accrued liabilities                                              1,161             (359)
        Deferred revenue                                                         971           (1,288)
                                                                          ----------        ---------
            Net cash provided by (used in) operating activities                2,934             (126)
                                                                          ----------        ---------

Cash flows from investing activities:
   Purchases of available-for-sale securities                                 (4,713)           1,160
   Sales of available-for-sale securities                                      6,072                -
   Purchases of property and equipment                                          (313)            (344)
   Other assets                                                               (1,342)              12
                                                                          -----------       ---------
            Net cash provided by (used in) investing activities                 (296)             828
                                                                          -----------       ---------

Cash flows from financing activities:
   Principal payments under debt obligations                                       -              (22)
   Proceeds from issuance of common stock, net                                   729              211
   Repurchase of common stock                                                      -              (91)
   Collection of note receivable from stockholder,
      net of interest receivable                                                  49               (5)
                                                                          ----------        ---------
            Net cash provided by financing activities                            778               93
                                                                          ----------        ---------

Effect of exchange rate changes on cash                                          (65)             (25)
                                                                          ----------        ---------
Net increase in cash and cash equivalents                                      3,351              770
Cash and cash equivalents, beginning of period                                 5,315            5,279
                                                                          ----------        ---------
Cash and cash equivalents, end of period                                  $    8,666        $   6,049
                                                                          ==========        =========

Supplemental cash flow information: Cash paid during the period for:
   Interest                                                               $       27        $      81
                                                                          ==========        =========
   Income taxes                                                           $      254        $      54
                                                                          ==========        =========
</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 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 six months ended October 31,
1999 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


                                       6
<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


statements as of and for the three months and six months ended October 31, 2000
(in thousands, except per share amounts):

<TABLE>
                                                      Three Months Ended          Six Months Ended
                                                       October 31, 1999           October 31, 1999
                                                     --------------------        ------------------
                                                       As            As           As             As
                                                    Reported     Restated      Reported       Restated
                                                    --------     --------      --------       --------
<S>                                               <C>           <C>          <C>            <C>
     Total Revenue                                $    9,216    $   5,614    $   17,924     $   10,896
     Gross Margin                                 $    7,801    $   4,275    $   15,137     $    8,185
     Net Income (Loss)                            $    2,112    $  (1,512)   $    3,858     $   (2,823)
     Basic Earnings (Loss) per share              $     0.12    $   (0.09)   $     0.22     $    (0.16)
     Diluted Earnings (loss) per share            $     0.11    $   (0.09)   $     0.20     $    (0.16)

</TABLE>
<TABLE>
<CAPTION>
                                                                                As of October 31, 1999
                                                                                ----------------------
                                                                                   As            As
                                                                                Reported      Restated
                                                                                --------      --------
<S>                                                                          <C>            <C>
     Total Current Assets                                                     $   23,044     $   19,668
     Total Current Liabilities                                                $    8,267     $   11,294
     Total Stockholders' Equity                                               $   17,926     $   11,198
    Total Assets                                                              $   26,539     $   22,492
</TABLE>

BASIS OF PRESENTATION

The condensed consolidated financial statements have been prepared by 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 years 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.

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


                                       7
<PAGE>

                                UNIFY CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 six months ended October 31, 1999 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                Six Months Ended
                                                    October 31,                      October 31,
                                             -------------------------        -------------------------
                                               1999            1998             1999            1998
                                             ---------       ---------        ---------       ---------
<S>                                         <C>             <C>              <C>             <C>
NET INCOME (LOSS)  (NUMERATOR):
Net income (loss), basic and diluted         $  (1,512)      $     856        $  (2,823)      $   1,114
                                             ==========      =========        ==========      =========
SHARES  (DENOMINATOR):
Weighted average shares of common
    stock outstanding, basic                    17,767          16,870           17,811          16,828
Effect of dilutive securities (stock options)        -             224                -             248
                                             ---------       ---------        ---------       ---------
Weighted average shares of common
    stock outstanding, diluted                  17,767          17,094           17,811          17,076
                                             =========       =========        =========       =========
PER SHARE AMOUNT:
Net income (loss) per share, basic           $   (0.09)       $   0.05        $   (0.16)       $   0.07
Effect of dilutive securities (stock options)        -               -                -               -
                                             ---------       ---------        ---------       ---------
Net income (loss) per share, diluted         $   (0.09)       $   0.05        $   (0.16)       $   0.07
                                             =========       =========        =========       =========

ANTIDILUTIVE SHARES:                             1,557           1,056            1,597           1,066
                                             =========================        =========       =========
</TABLE>

4.  COMPREHENSIVE INCOME (LOSS)

The Company's total comprehensive income (loss) for the periods shown was as
follows (in thousands):

<TABLE>
<CAPTION>
                                                 Three Months Ended               Six Months Ended
                                                     October 31,                     October 31,
                                             -------------------------        -------------------------
                                                1999            1998             1999            1998
                                             ---------       ---------        ---------       ---------
<S>                                         <C>             <C>              <C>             <C>

Net income (loss)                            $  (1,512)      $     856        $  (2,823)      $   1,114
Foreign currency translation                       (52)            (75)             (82)            (41)
                                             ----------      ---------        ----------      ---------
   Total comprehensive income (loss)         $  (1,564)      $     781        $  (2,905)      $   1,073
                                             ==========      =========        ==========      =========
</TABLE>



                                       8
<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 fiscal years 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 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 three months ended October 31, 1999 decreased $1.6 million
(22%) to $5.6 million from $7.2 in the three months ended October 31, 1998.
Total revenue for the six months ended October 31, 1999 decreased $3.0 million
(21%) to $10.9 million from $13.9 for the six months ended October 31, 1998.

Software license revenues represented the majority of the decrease in total
revenues with a 24% decrease for the three months ended October 31, 1999 and a
25% decrease for the six months ended October 31, 1999 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 the Unify eWave
product line, for which revenues to date have not met expectations. The Company
VISION and client/server software license revenues have also declined as a
result of the emphasis on the Unify eWave product line.


                                       10
<PAGE>
                                UNIFY CORPORATION


Service revenue for the second quarter ended October 31, 1999 decreased $0.4
million (18%) to $2.0 million from $2.5 for the same quarter in fiscal 1999.
Total service revenue for the six months ended October 31, 1999 decreased
$0.7 million (14%) to $4.2 million from $4.9 for the six months ended October
31, 1998. Maintenance revenues decreased for the three and six months period
by 10% and 14%, respectively, from the prior comparative periods. This
reduction in revenues correspond to decreases in initial maintenance orders
which decreased in conjunction with the reductions of product sales.
Consulting revenues were down 10% for the six months ended October 31, 1999
and 31% for the three months ended October 31, 1999 as compared to the same
period in 1998, reflecting the impact on the increased emphasis on 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 54% and 56% of total revenues in the quarters ended October 31,
1999 and 1998 respectively, and 57% and 54% for the comparative six months
period ended October 31, 1999 and 1998, respectively.

COST OF REVENUES

Total cost of revenue for the second quarter ended October 31, 1999 increased 2%
over the cost reported during the second quarter ended October 31, 1998. Total
cost of revenue for the six months ended October 31, 1999 increased 5% when
compared to the same period in the prior year.

Cost of software licenses represented 10% of software license revenues for the
three months ended October 31, 1999 and 10% of software licenses for the six
months ended October 31, 1999 and were comparable to 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 for the three and six months
ended October 31, 1999 increased 5% and 7% 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.
The cost of service has a high component of fixed costs, and therefore does not
fluctuate as readily with the changes in revenues.

PRODUCT DEVELOPMENT

Product development expenses for the quarters ended October 31, 1999 and 1998
were comparable at $1.7 million and $1.5 million, respectively. Product
development expenses for the six months ended October 31, 1999 and 1998 were
also stable at approximately $3.3 million and $2.9 million. The slight
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 a 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
October 31, 1999 increased to $4.1 million, or 73% of total revenues, as
compared to $3.6 million, or 50% of total revenues, for the same quarter of the
prior year. SG&A expenses for the six months ended


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                                UNIFY CORPORATION


October 31, 1999 increased to $8.1 million, or 74% of total revenues, as
compared to $7.3 million, or 52% of total revenues, for the same period of
the prior year. The major components of SG&A for the second three months of
fiscal 2000 were sales expenses of $2.2 million, marketing expenses of $0.7
million, general and administrative of $0.7 million and bad debt expenses of
$0.5 million. Sales expenses decreased $0.1 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 $0.2 million as a result of this new product promotion.
General and administrative expenses decreased less than $0.1 million for the
second three months of fiscal 2000 compared to the comparable period for the
prior year. Bad debt expenses increased by $0.5 million during the three
months ended October 31, 1999 as compared to the comparable period for the
prior fiscal year. For the six months ended October 31, 1999 sales expenses
decreased $0.5 million as the result of the shift in focus to the Unify eWave
product line; marketing expense increased $0.5 million as a result of the new
product promotion; general and administrative expenses decreased $0.5 and bad
debt expenses were increased by $1.3 million when compared to the same six
months period for fiscal 1999. The Company expects that total SG&A expenses
may 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 six months ended October
31, 1999 and 1998 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 had substantial net
operating loss carryforwards.

LIQUIDITY AND CAPITAL RESOURCES

At October 31, 1999, the Company had cash, cash equivalents and short-term
investments of $13.4 million, compared to $11.4 million at April 30, 1999.
Working capital decreased to $8.3 million at October 31, 1999 from $11.9 million
at April 30, 1999.

The Company's operating activities generated cash of $2.9 million during the
six months ended October 31, 1999, as a result of increases in deferred
revenue and accrued liabilities of $2.1 million and a decreases in accounts
recievable of $3.9 million partially offset by operating losses of $2.8
million for the first six months of fiscal 2000. Accounts receivable
decreased by $3.8 million of which $1.5 million was achieved through the sale
of receivables without recourse. Increases in accrued liabilities was due
primarily to accrued software and developmental costs. Investing activities
during the period reduced cash by $0.3 million, consisting principally of
investments in and purchase of other assets and equipment of $1.7 million
partially offset with funds provided from the net sale of available-for-sale
securities of $1.4 million. Cash provided by financing activities during the
period was $.8 million, which primarily represents the issuance of common
stock under the Company's stock option and stock purchase plan of $0.7
million.

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                                UNIFY CORPORATION

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' 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 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.


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<PAGE>
                                UNIFY CORPORATION

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
$8.7 million at October 31, 1999. 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 $4.7 million at October 31, 1999 and
there were no material realized or unrealized gains or losses on short-term
investments during the first six 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 adverse to principal loss and
attempts to ensure the safety of its invested funds by limiting default. The
Company's short-term investments at October 31, 1999 consisted of $4.7 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 October
31, 1999, 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 October 31, 1999, the
Company had $1.3 million, $0.3 million and $0.9 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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<PAGE>
                                UNIFY CORPORATION

PART II. OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the annual meeting of the Company's stockholders held on October 8, 1999, the
following matters were voted upon:

1.       The election of each of the nominees for director were approved with
         the following votes:
                                    IN FAVOR                  WITHHELD
                                    --------                  --------
         Reza Mikailli              8,246,655                 189,320
         Kurt M. Garbe              8,247,963                 188,012
         Steven D. Whiteman         8,249,813                 186,162

2.       The amendment of the Company's 1991 Stock Option Plan to increase the
         maximum aggregate number of shares of the Company's Common Stock
         authorized for issuance from 2,700,000 shares to 3,100,000. Of the
         total shares voting on the foregoing amendment, 6,663,486 voted in
         favor, 1,752,134 voted against, and 20,355 abstained.
3.       The appointment of Deloitte & Touche LLP as the Company's independent
         accountants for the fiscal year ending April 30, 2000. Of the total
         shares voting on the foregoing resolution, 8,361,935 voted in favor,
         60,005 voted against, and 14,035 abstained.


THE 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 October 31, 1999.


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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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