<PAGE>   1

                        SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

          (Mark One)

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended DECEMBER 31, 2000
                                               -----------------

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

             For the transition period from            to
                                            ----------    ----------

                         Commission file number 0-24544

                             CYBERGUARD CORPORATION
--------------------------------------------------------------------------------
             (Exact name of Registrant as Specified in Its Charter)

            FLORIDA                                            65-0510339
--------------------------------------------------------------------------------
(State or Other Jurisdiction of                            (I.R.S. Employer
 Incorporation or Organization)                           Identification No.)

2000 WEST COMMERCIAL BLVD., SUITE 200,
       FORT LAUDERDALE, FLORIDA                                  33309
--------------------------------------------------------------------------------
(Address of Principle Executive Offices)                      (Zip Code)

Registrant's Telephone Number, Including Area Code  954-958-3900
                                                   ----------------------------

--------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

         Indicate by check [X] whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports),

Yes [X] No [ ]

and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

         As of February 9, 2001, 17,736,936 shares of the Registrant's $0.01 par
value Common Stock were outstanding.


<PAGE>   2

CYBERGUARD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
(UNAUDITED)

PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                             CYBERGUARD CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
             (Dollars in thousands except share and per share data)

<TABLE>
<CAPTION>
                                                                           Three Months Ended              Six Months Ended
                                                                        Dec. 31,        Dec. 31,       Dec. 31,        Dec. 31,
                                                                          2000            1999           2000             1999
                                                                      -----------     -----------     -----------     -----------
<S>                                                                   <C>             <C>             <C>             <C>
Revenues:
Products                                                              $     4,938     $     3,498     $     7,879     $     6,763
Services                                                                    1,411             872           2,517           1,939
                                                                      -----------     -----------     -----------     -----------
  Total revenues                                                            6,349           4,370          10,396           8,702

Cost of revenues:
Products                                                                    1,222             849           1,880           1,387
Services                                                                      668             259           1,190             948
                                                                      -----------     -----------     -----------     -----------
  Total cost of revenues                                                    1,890           1,108           3,070           2,335

                                                                      -----------     -----------     -----------     -----------
Gross profit                                                                4,459           3,262           7,326           6,367
                                                                      -----------     -----------     -----------     -----------

Operating expenses:
Research and development                                                    1,113             707           2,427           1,552
Selling, general and administrative                                         3,529           2,407           6,759           4,896
                                                                      -----------     -----------     -----------     -----------
  Total operating expenses                                                  4,642           3,114           9,186           6,448

                                                                      -----------     -----------     -----------     -----------
Operating income (loss)                                                      (183)            148          (1,860)            (81)
                                                                      -----------     -----------     -----------     -----------

Other income (expense)
Interest expense, net                                                        (240)           (319)           (438)           (662)
Gain on sale of assets                                                          0              24              13               0
Other income (expense)                                                        (62)             85             (60)             98
                                                                      -----------     -----------     -----------     -----------
  Total other income (expense)                                               (302)           (210)           (485)           (564)

Loss before cumulative effect of change in accounting principle       $      (485)    $       (62)    $    (2,345)    $      (645)
                                                                      -----------     -----------     -----------     -----------

Cumulative effect of change in accounting principle                          (129)              0            (129)              0

Net Loss                                                              $      (614)    $       (62)    $    (2,474)    $      (645)
                                                                      ===========     ===========     ===========     ===========

Basic and fully-diluted loss per common share:
Before cumulative effect of change in accounting principle            $     (0.05)    $     (0.01)    $     (0.24)    $     (0.07)
Cummulative effect of change in accounting principle                  $     (0.01)    $        --     $     (0.01)    $        --
                                                                      -----------     -----------     -----------     -----------
Net Loss                                                              $     (0.06)    $     (0.01)    $     (0.25)    $     (0.07)
                                                                      ===========     ===========     ===========     ===========

Weighted average number of common shares outstanding                    9,907,451       9,148,283       9,878,423       9,118,481
                                                                      ===========     ===========     ===========     ===========
</TABLE>

      See accompanying notes to condensed consolidated financial statements




                                       1
<PAGE>   3

                             CYBERGUARD CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                 Dec. 31,             June 30,
                                                                                   2000                 2000
                                                                                ----------           ----------
<S>                                                                             <C>                  <C>
ASSETS
Cash and cash equivalents                                                       $    2,332           $    2,497
Restricted cash                                                                        703                  800
Accounts receivable, less allowance for  uncollectible accounts
  of $98 at Dec. 31, 2000 and $52 at June 30, 2000                                   5,015                3,614
Inventories, net                                                                       279                  159
Other current assets                                                                 1,895                1,255
                                                                                ----------           ----------
        Total current assets                                                        10,224                8,325

Property and equipment at cost, less accumulated
  depreciation of $1,431 at Dec. 31, 2000 and
  $1,181 at June 30, 2000                                                            1,299                1,086
Capitalized sofware, net                                                             1,150                1,142
Non-compete agreements, net                                                            140                  280
Other assets                                                                           171                  163
                                                                                ----------           ----------
        Total assets                                                            $   12,984           $   10,996
                                                                                ==========           ==========

LIABILITIES AND SHAREHOLDERS' DEFICIT
Line of credit and note payable                                                      1,230                1,575
Accounts payable                                                                     2,674                1,424
Deferred revenue                                                                     3,386                2,912
Accrued expenses and other liabilities                                               3,430                1,942
                                                                                ----------           ----------
        Total current liabilities                                                   10,720                7,853

Note Payable                                                                           650                  650
Convertible debenture, net                                                           5,479                4,445
                                                                                ----------           ----------
        Total liabilities                                                           16,849               12,948
                                                                                ----------           ----------

Shareholders' deficit
Common stock par value $0.01 authorized 50,000,000 shares
   issued and outstanding 9,941,820 at Dec. 31, 2000
   and 9,799,321 at June 30, 2000                                                       99                   98
Additional paid-in capital                                                          75,773               75,290
Accumulated deficit                                                                (79,923)             (77,451)
Accumulated other comprehensive income                                                 186                  111
                                                                                ----------           ----------
        Total shareholders' deficit                                                 (3,865)              (1,952)
                                                                                ----------           ----------

                                                                                ----------           ----------
        Total liabilities and shareholders' deficit                             $   12,984           $   10,996
                                                                                ==========           ==========
</TABLE>

      See accompanying notes to condensed consolidated financial statements




                                       2
<PAGE>   4

                             CYBERGUARD CORPORATION
                  CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                       Six Months Ended
                                                                                 Dec. 31,             Dec. 31,
                                                                                   2000                 1999
                                                                                ----------           ----------
<S>                                                                             <C>                  <C>
Cash flows from operating activities:
Net  loss                                                                       $   (2,474)          $     (645)
Adjustment to reconcile net loss to net cash
  used by operating activities:
Depreciation                                                                           361                  188
Amortization                                                                           569                  244
Interest on retirement of convertible debt                                              --                  240
Interest on new convertible debt                                                        --                   95
Provision for uncollectible accounts receivable                                         46                 (266)
Provision for inventory reserve                                                         (1)                  --
Modification to stock options                                                           68                   --
Beneficial conversion feature on Aug. 1999 and Dec. 2000 convertible debt              162                   --

Changes in assets and liabilities:
Accounts receivable                                                                 (1,447)                 205
Other current assets                                                                  (640)                (141)
Inventories                                                                           (120)                  91
Accounts payable                                                                     1,250               (1,723)
Accrued expenses and other liabilities                                               1,488               (1,511)
Deferred revenue                                                                       475                  952
Other, net                                                                              66                   78
                                                                                ----------           ----------
  Net cash used in operating activities                                               (197)              (2,193)
                                                                                ----------           ----------

Cash flows used in investing activities:
Capitalized software costs                                                            (360)                (350)
Additions/deletions to Property & Equipment                                           (574)                (130)
                                                                                ----------           ----------
  Net cash used in investing activities                                               (934)                (480)
                                                                                ----------           ----------

Cash flows provided by financing activities:
Change in restricted cash                                                               97                  258
Issuance of new convertible debt                                                     1,000                4,314
Retirement of existing convertible debt                                                 --               (1,125)
Notes Payable                                                                         (214)                (610)
Revolving line of credit                                                              (132)                 (55)
Proceeds from stock options exercised                                                  109                   --
Proceeds from sale of securities                                                        --                   --
Proceeds from sale of common stock                                                     106                  196
                                                                                ----------           ----------
  Net cash provided by financing activities                                            966                2,978
                                                                                ----------           ----------

Net increase (decrease) in cash                                                       (165)                 305
Cash and cash equivalents at beginning of period                                     2,497                2,622
                                                                                ----------           ----------
Cash and cash equivalents at end of period                                      $    2,332           $    2,927
                                                                                ==========           ==========

Supplemental disclosure of cash flow information
Cash paid for interest                                                                 364                  482
                                                                                ==========           ==========
Cash paid for income taxes                                                              --                   --
                                                                                ==========           ==========
</TABLE>

Supplemental disclosure of non-cash information

Modification to stock options - on November 27, 2000, the Compensation Committee
of the Board of Directors of the Company resolved that the February 4, 2001
expiration date of each of the options to purchase shares of the Company's
common stock granted on February 4, 1996 would be extended by three years. All
129,100 shares granted on February 4, 1996 will now expire in their entirety on
February 4, 2004. This modification required the Company to record compensation
expense during the quarter of approximately $68,000.

Beneficial conversion feature on Aug. 1999 and Dec. 2000 convertible debt - at
the November 2000 meeting, The Emerging Issues Task Force (EITF) reached a
consensus opinion on Issue 00-27 regarding the "Aplication of EITF Issue 98-5,
"Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios," to Certain Convertible Instruments". The
consensus opinion required the Company to use an effective conversion price to
determmine a convertible instrument's beneficial conversion feature. The change
is effective retroactively to transactions for which a commitment date occurs
prior to November 16, 2000. As a result, the Company recognized $129,000 as a
cumulative effect of a change in accounting principle associated with the
convertible debt issued in August 1999. The change is effective prospectively
to transactions for which a commitment date occurs after November 16, 2000. As
a result, the Company recognized $33,000 in interest expense associated with the
convertible debt issued in December 2000.

      See accompanying notes to condensed consolidated financial statements





                                       3
<PAGE>   5

CYBERGUARD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
(UNAUDITED)

1.       BASIS OF PRESENTATION

         The Company has prepared the consolidated financial statements included
herein, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission with respect to Form 10-Q. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures made are adequate so as to make the information contained
not misleading. These interim financial statements and the notes should be read
in conjunction with the financial statements and the notes included in the
Company's 10-K for the year ended June 30, 2000. In the Company's opinion, all
adjustments (consisting only of normal recurring adjustments) necessary for fair
presentation of the information shown have been included. Generally accepted
accounting standards also requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues and expenses,
and disclose contingent assets and liabilities at the date of the financial
statements. Significant estimates include those made for software development
costs, reserve for inventories, the allowance for uncollectible accounts, and
contingencies. Actual results could differ from those estimates.

         The results of operations for the six months ended December 31, 2000
presented are not necessarily indicative of the results of operations that may
be expected for the year ending June 30, 2001.

         Basic loss per share is calculated by dividing net loss by the weighted
average number of common shares outstanding during the year. Diluted per share
data includes the dilutive effect of options, warrants and convertible
securities. Since the effects of the outstanding options, warrants and
convertible securities are anti-dilutive, they are not included in the
calculation of diluted loss per share.

         The Company's operating results and financial condition may be impacted
by a number of factors including, but not limited to the following, any of which
could cause actual results to vary materially from current and historical
results or the Company's anticipated future results. A portion of the Company's
revenue is derived from its international operations and sources. As a result,
the Company's operations and financial results could be affected by
international factors such as changes in foreign currency exchange rates or weak
economic conditions in the international markets in which the Company
distributes its products. The network security industry is highly competitive
and competition is expected to intensify. There are numerous companies competing
in segments of the market in which the Company does business. Competitors
include organizations significantly larger and with more development, marketing
and financial resources than the Company. In addition, the Company is subject to
risks and uncertainties which include, but are not limited to, the timely
development of and acceptance of new products, impact of competitive products,
competition for and retention of key management and technology employees,
regulation, inventory obsolescence, the ultimate outcome of certain litigation
matters, and cash balances in excess of federally insured limits.

2.       CHANGE IN ACCOUNTING PRINCIPLE

         At the November 2000 meeting, The Emerging Issues Task Force (EITF)
reached a consensus opinion on Issue 00-27 regarding the "Application of EITF
Issue 98-5, "Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios," to Certain Convertible Instruments".
The consensus opinion required the Company to use an effective conversion price
to determine a convertible instrument's beneficial conversion feature. The
change is effective retroactively to transactions for which a commitment date
occurs prior to November 16, 2000. As a result, the



                                       4
<PAGE>   6

CYBERGUARD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
(UNAUDITED)

Company recognized $129,000 as a cumulative effect of a change in accounting
principle associated with the convertible debt issued in August 1999. The change
is effective prospectively to transactions for which a commitment date occurs
after November 16, 2000. As a result, the Company recognized $33,000 in interest
expense associated with the convertible debt issued in December 2000.

3.       LITIGATION

         On August 24, 1998, the Company announced, among other things, that due
to a review of its revenue recognition practices relating to distributors and
resellers, it would restate prior financial results. After the August 24, 1998
announcement, twenty-five purported class action lawsuits were filed by alleged
shareholders against the Company and certain former officers and directors.
Pursuant to an order issued by the Court, these actions have been consolidated
into one action, styled Stephen Cheney, et al. v. CyberGuard Corporation, et
al., Case No. 98-6879-CIV-Gold, in the United States District Court, Southern
District of Florida. On August 23, 1999, the plaintiffs filed a Consolidated and
Amended Class Action Complaint. This action seeks damages purportedly on behalf
of all persons who purchased or otherwise acquired the Company's common stock
during various periods from November 7, 1996 through August 24, 1998. The
complaint alleges, among other things, that as a result of accounting
irregularities relating to the Company's revenue recognition policies, the
Company's previously issued financial statements were materially false and
misleading and that the defendants knowingly or recklessly published these
financial statements which caused the Company's common stock prices to rise
artificially. The action alleges violations of Section 10(b) of the Securities
Exchange Act of 1934 ("Exchange Act") and SEC Rule 10b-5 promulgated thereunder
and Section 20(a) of the Exchange Act. Subsequently, the defendants, including
the Company, filed their respective motions to dismiss the amended complaint. On
July 31, 2000, the Court issued a ruling denying the Company's and Robert L.
Carberry's (the Company's CEO from June 1996 through August 1998) motions to
dismiss. The court granted the motions to dismiss with prejudice for defendants
William D. Murray (the Company's CFO from November 1997 through August 1998),
Patrick O. Wheeler (the Company's CFO from April 1996 through October 1997), C.
Shelton James (former Audit Committee Chairman), and KPMG Peat Marwick LLP
("KPMG"). On August 14, 2000, the plaintiffs filed a motion for reconsideration
of that order. The Company filed an answer to the plaintiffs' complaint on
August 24, 2000.

         The Company's obligation to indemnify its officers and directors under
the aforementioned lawsuit is insured to the extent of the limits of the
applicable insurance policies. The Company has notified its insurance carrier of
the existence of the lawsuit, and the carrier has sent the Company a reservation
of rights letter. The Company intends to vigorously defend this action, and
believes that in the event that it is unsuccessful, insurance coverage will be
available to defray a portion, or substantially all, of the expense of defending
and settling the lawsuit or paying a judgment. However, the Company is unable to
predict the ultimate outcome of the litigation. There can be no assurance that
the Company will be successful in defending the lawsuit or if unsuccessful,
insurance will be available to pay all or any portion of the expense of the
lawsuit. If the Company is unsuccessful in defending the lawsuit and the
insurance coverage is unavailable or insufficient, the resolution of the lawsuit
could have an effect on the Company's consolidated financial position, results
of operations, and cash flows. The Company's consolidated financial statements
do not include any adjustments related to these matters.

         In August 1998, the Securities and Exchange Commission ("SEC")
commenced an informal inquiry into certain accounting and financial reporting
practices of the Company and its officers, directors and employees. On March 25,
1999, the SEC issued a formal order of investigation (which the Company learned
of on September 27, 1999) into certain accounting and financial reporting
practices of the



                                       5
<PAGE>   7

CYBERGUARD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
(UNAUDITED)

Company and its officers, directors and employees. The SEC's investigation is
ongoing.

         On September 16, 1999, the Company filed a lawsuit against KPMG and
August A. Smith, the KPMG engagement partner. The lawsuit is pending in the
Circuit Court of the 17th Judicial Circuit in and for Broward County, Case No.
00-004102-CACE-14. On May 1, 2000, the Company filed the First Amended
Complaint, alleging that KPMG failed to properly audit the Company's financial
statements and provided inaccurate advice on accounting matters for fiscal years
1996, 1997 and 1998. The action alleges professional malpractice, breach of
fiduciary duty, breach of contract and breach of implied duty of good faith, and
seeks damages in excess of $10 million. KPMG and Mr. Smith filed motions to
dismiss, which were denied. In August 2000, KPMG and Mr. Smith filed their
answers and KPMG filed counterclaims against the Company, alleging the Company's
breach of contract, negligent misrepresentation and abuse of process, and seeks
an unspecified amount of damages consisting of unpaid service fees and legal
fees and costs.

         The Company is involved from time to time in other litigation on
various matters relating to the conduct of its business. The Company believes
that these other litigation matters, single or collective, will not have a
material adverse effect on its consolidated financial position, results of
operations or cash flows.

4.       CONVERTIBLE DEBT

         On December 29, 2000, the Company completed an additional $1 million
financing transaction with Fernwood Partners II LLC, which was constructed as an
add-on to the earlier Fernwood Financing (see Part 1, Item 2). The additional
note is convertible into the Company's common stock at $1.51 per share and
carries a warrant to purchase an additional 333,877 shares of the Company's
common stock at $2.51 per share. The additional convertible note bears interest
at 11.5% per annum with no principal payments due until June 30, 2002. The
Fernwood Financing is subordinated to senior debt and is collateralized by the
assets of the Company.

         At the November 2000 meeting, The Emerging Issues Task Force (EITF)
reached a consensus opinion on Issue 00-27 regarding the "Application of EITF
Issue 98-5, "Convertible Securities with Beneficial Conversion Features or
Contingently Adjustable Conversion Ratios," to Certain Convertible Instruments".
The consensus opinion required the Company to use an effective conversion price
to determine a convertible instrument's beneficial conversion feature. In
applying the consensus opinion, the Company recognized $33,000 in interest
expense.

5.       MODIFICATION OF STOCK OPTIONS

         On November 2, 2000, the Board of Directors resolved that upon Mr.
Terrence Zielinski's, the Company's Chief Financial Officer ("CFO"), retirement
date, full vesting of all options held by Mr. Zielinski to purchase the
Company's common stock ("Options"), with the Options remaining exercisable
through June 30, 2003, or the Options' expiration, whichever comes first. There
was no accounting effect as a result of this resolution.

         On November 17, 2000, the Compensation Committee of the Board of
Directors of the Company resolved that upon the termination of David R. Proctor
as the Company's Chief Executive Officer ("CEO") and President, Mr. Proctor's
"Officer Options" shall become fully vested to the extent such Officer Options
have not yet fully vested and shall remain exercisable for a period of two years
from the




                                       6
<PAGE>   8

CYBERGUARD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
(UNAUDITED)

termination date. Upon his termination date the Company will record associated
compensation expense of approximately $20,000.

         On November 27, 2000, the Compensation Committee of the Board of
Directors of the Company resolved that the February 4, 2001 expiration date of
each of the options to purchase shares of the Company's common stock granted on
February 4, 1996 would be extended by three years. All 129,100 shares granted on
February 4, 1996 will now expire in their entirety on February 4, 2004. This
modification required the Company to record compensation expense during the
quarter of approximately $68,000.

6.       RELATED PARTY TRANSACTIONS

         On August 26, 1999, certain directors, officers and employees
participated in the Fernwood Financing, contributing a total of $614,000. The
interest rate on the convertible debt is 11.5% per annum. The debt can be
converted into approximately 614,000 shares of common stock at a conversion
price equal to $1.00 per share. In addition, the Company issued approximately
614,000 warrants to purchase the Company's common stock at $2.00 per share. The
warrants are exercisable any time before August 2004.

         Subsequently, certain directors and officers elected to convert
approximately $0.428 million of convertible debt and interest on that debt into
approximately 428,000 shares of common stock at $1.00 per share. Certain
directors also elected to exercise warrants for the purchase of approximately
110,000 shares of the Company's common stock for approximately $0.220 million in
cash (see note 7).

7.       SUBSEQUENT EVENTS

         On January 2, 2001, Scott J. Hammack was appointed the CEO of the
Company. David R. Proctor, who had been serving as the Company's President, CEO
and Chairman of the Board, will continue as Chairman of the Board.

         On January 18, 2001, Patrick J. Clawson was appointed the President of
the Company.

         On January 24, 2001, in connection with the Fernwood Financing,
approximately $5.7 million of convertible debt and the interest accrued on that
debt was converted into approximately 4.6 million shares of common stock at
$1.00 per share and approximately 668,000 million shares of common stock at
$1.51 per share. In connection with the Fernwood Financing, approximately
$252,000 in convertible debt and interest accrued on that debt is still
outstanding.

         During January 2000, in connection with the Fernwood Financing,
warrants for the purchase of approximately 2.4 million shares of the Company's
common stock were exercised at a total of approximately $4.8 million in cash. In
connection with the Fernwood Financing, approximately 1.9 million warrants are
still outstanding.

         During January 2000, newly appointed CEO Scott J. Hammack invested
$500,000 to purchase at the market value 142,857 shares of common stock at $1.75
share and 62,500 shares of common stock at $4.00 per share. In conjunction with
the purchase of the 142,857 shares of common stock, Mr. Hammack was granted an
equal number of warrants to purchase the Company's common stock at $1.75 per
share. The warrants are exercisable any time before December 25, 2005.




                                       7
<PAGE>   9

CYBERGUARD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
(UNAUDITED)

         The pro-forma balance sheet below reflects the effect of the above
transactions had they occurred prior to December 31, 2000:


                             CYBERGUARD CORPORATION
                 CONDENSED PRO-FORMA CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                 Dec. 31,        Proforma Dec. 31,
                                                                                   2000                 2000
                                                                                ----------       -----------------
<S>                                                                             <C>              <C>
ASSETS
Cash and cash equivalents                                                       $    2,332           $    7,636
Restricted cash                                                                        703                  703
Accounts receivable, less allowance for  uncollectible accounts
  of $98 at Dec. 31, 2000                                                            5,015                5,015
Inventories, net                                                                       279                  279
Other current assets                                                                 1,895                1,895
                                                                                ----------           ----------
        Total current assets                                                        10,224               15,528

Property and equipment at cost, less accumulated
  depreciation of $1,431 at Dec. 31, 2000                                            1,299                1,299
Capitalized sofware, net                                                             1,150                1,150
Non-compete agreements, net                                                            140                  140
Other assets                                                                           171                  171
                                                                                ----------           ----------
        Total assets                                                            $   12,984           $   18,288
                                                                                ==========           ==========

LIABILITIES AND SHAREHOLDERS' DEFICIT
Line of credit and note payable                                                      1,230                1,230
Accounts payable                                                                     2,674                2,674
Deferred revenue                                                                     3,386                3,386
Accrued expenses and other liabilities                                               3,430                3,313
                                                                                ----------           ----------
        Total current liabilities                                                   10,720               10,603

Note Payable                                                                           650                  650
Convertible debenture, net                                                           5,479                  240
                                                                                ----------           ----------
        Total liabilities                                                           16,849               11,493
                                                                                ----------           ----------

Shareholders' deficit
Common stock par value $0.01 authorized 50,000,000 shares
   issued and outstanding 9,941,820 at Dec. 31, 2000                                    99                  178
Additional paid-in capital                                                          75,773               86,655
Accumulated deficit                                                                (79,923)             (80,223)
Accumulated other comprehensive income                                                 186                  186
                                                                                ----------           ----------
        Total shareholders' deficit                                                 (3,865)               6,795
                                                                                ----------           ----------

                                                                                ----------           ----------
        Total liabilities and shareholders' deficit                             $   12,984           $   18,288
                                                                                ==========           ==========
</TABLE>

      See accompanying notes to condensed consolidated financial statements

         On February 13, 2001, Michael Matte was appointed CFO of the Company.
Terrence A. Zielinski, who had been serving as the Company's CFO since August
1998, has retired.

         On February 13, 2001, the Board of Directors nominated Richard L. Scott
to the Board of Directors.





                                       8
<PAGE>   10

CYBERGUARD CORPORATION
DECEMBER 31, 2000
(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

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

         The Company provides a full suite of products and services for the
network security industry. The products offered by the Company include the
CyberGuard(R) Firewall, proprietary and third-party technology (such as Virtual
Private Network, authentication, virus scanning, encryption, advanced reporting,
high availability and centralized management), and consulting, support, and
installation services.

RESULTS OF OPERATIONS

THE QUARTER ENDED DECEMBER 31, 2000 COMPARED TO THE QUARTER ENDED DECEMBER 31,
1999

NET REVENUES

         Net revenues consist primarily of network security products and
services including third party security products and service and support related
to security products. For the quarter ended December 31, 2000, net revenues were
$6.349 million compared to $4.370 million for the quarter ended December 31,
1999. The increase was comprised of an increase of $1.440 million in network
security product revenues and an increase of $0.539 million in service revenues.
The increase in network security product revenues was primarily the result of
continued acceptance of the Company's family of appliance products, particularly
in Europe and Asia. The increase in service revenue corresponds to the growth in
the Company's customer base. Network security products accounted for 77.8% of
revenues during the quarter ended December 31, 2000 as compared to 80.0% of
revenues during the quarter ended December 31, 1999. Support services for
network security products accounted for 22.2% of revenues during the quarter
ended December 31, 2000 as compared to 20.0% of revenues during the quarter
ended December 31, 1999.

GROSS PROFIT

         Gross Profit as a percentage of revenues decreased to 70.2% from 74.64%
for the quarter ended December 31, 2000 as compared to the quarter ended
December 31, 1999. The decrease is attributable to the increase in the hardware
component of cost of revenues associated with the appliance family of products.

OPERATING EXPENSES, OTHER INCOME AND EXPENSE AND NET LOSS

         Overall, operating expenses increased $1.528 million for the quarter
ended December 31, 2000 to $4.642 million when compared to December 31, 1999.
This is due to increased compensation and related employee costs, the initial
investment in a new marketing and branding campaign and litigation expenses.

         Total Other Income and Expense increased $0.092 million for the quarter
ended December 31, 2000 to ($0.302) million. This was in part due to a decrease
in the interest expense associated with the Fernwood Financing and a foreign
currency transaction expense for the Company's foreign subsidiary.

         Cumulative effect of change in accounting principle increased $0.129
million for the quarter ended December 31, 2000 to ($0.129) million. The
Emerging Issues Task Force (EITF) reached a consensus opinion regarding the
"Application of EITF Issue 98-5, "Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios," to Certain
Convertible Instruments". The consensus opinion required the Company to use an
effective conversion price to


                                       9
<PAGE>   11

CYBERGUARD CORPORATION
DECEMBER 31, 2000
(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

determine a convertible instrument's beneficial conversion feature, which
resulted in the recognition of additional expense associated with the
convertible debt issued in August 1999. The expense is reported as a cumulative
effect on prior periods of a change in accounting principle.

         Net loss for the quarter ended December 31, 2000 was $0.614 million
compared to $0.062 million for the quarter ended December 31, 1999. The Company
did not provide for income taxes due to the significant net operating loss
carryforwards available.

THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2000 COMPARED TO THE SIX-MONTH PERIOD
ENDED DECEMBER 31, 1999

NET REVENUES

         For the six-month period ended December 31, 2000, net revenues were
$10.396 million when compared $8.702 million for the six-month period ended
December 31, 1999. The increase was comprised of an increase of $1.116 million
in network security product revenues and an increase of $0.578 million in
service revenues. The increase in both product and service revenue is directly
attributed to the market's acceptance of the Company's appliance family of
products and the Company's growing customer base. Network security products
accounted for 75.79% of revenues during the six-month period ended December 31,
2000 as compared to 77.72% of revenues during the six-month period ended
December 31, 1999. Support services for network security products accounted for
24.21% of revenues during the six-month period ended December 31, 2000 as
compared to 22.28% of revenues during the six-month ended December 31, 1999.

GROSS PROFIT

         Gross Profit as a percentage of revenues decreased to 70.47% from
73.17% for the six-month period ended December 31, 2000 when compared to the
six-month period ended December 31, 1999. This is attributable to the increase
in the hardware component of cost of revenues associated with the appliance
family of products.

OPERATING EXPENSES, OTHER INCOME AND EXPENSE AND NET LOSS

         Overall, operating expenses increased $2.738 million for the six-month
period ended December 31, 2000 to $9.186 million. There was a $1.863 million
increase in selling, general and administrative expenses that was the result of
increased staffing, marketing expenditures relating to the Company's branding
and advertising campaign and litigation expenses associated with the KPMG
lawsuit. There was also a $0.875 million increase in research and development
directly related to increased staffing.

         Total Other Income and Expense decreased slightly by $0.079 million for
the six-month period ended December 31, 2000 to ($0.485). This was due to a
decrease in the interest expense associated with the Fernwood Financing and a
foreign currency transaction expense for the Company's foreign subsidiary.

         Cumulative effect of a change in accounting principle increased $0.129
million for the six-month period ended December 31, 2000 to ($0.129) million.
The Emerging Issues Task Force (EITF) reached a consensus opinion regarding the
"Application of EITF Issue 98-5, "Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios," to Certain
Convertible Instruments". The consensus opinion required the Company to use an
effective conversion price to determine a convertible instrument's beneficial
conversion feature, which resulted in the recognition of


                                       10

<PAGE>   12

CYBERGUARD CORPORATION
DECEMBER 31, 2000
(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

additional expense associated with the convertible debt issued in August 1999.
The expense is reported as a cumulative effect on prior periods of a change in
accounting principle.

         Net loss for the six-month period ended December 31, 2000 was $2.474
million compared to $0.645 million for the six-month period ended December 31,
1999. The Company did not provide for income taxes due to the significant net
operating loss carryforwards available.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has experienced losses since its inception as a network
security company. The Company's historical uses of cash have been to fund net
losses from operations, establish inventory stocking levels, and fund capital
expenditures for property, equipment and software. For the quarter ended
December 31, 2000, the Company incurred a net loss of approximately $0.614
million on revenues of approximately $6.349 million. For the quarter ended
December 31, 1999, the Company incurred a net loss of approximately $0.062
million on revenues of approximately $4.370 million.

         In August 1998, the Company and certain former officers and directors
were named in twenty-five shareholder lawsuits. The plaintiffs sued for
unspecified compensatory damages, legal fees, and litigation costs. The Company
is unable to predict the ultimate outcome or potential financial impact of this
litigation.

         The consolidated financial statements do not include any adjustments
relating to the realization of assets and the recognition and satisfaction of
liabilities that might be necessary as a result of the matters described in this
Item 2 or Part II, Item 1 of this report.

         At December 31, 2000, the Company had cash and cash equivalents on hand
of $2.332 million representing a decrease of $0.165 million from $2.497 million
as of June 30, 2000. Accounts payable and accrued liabilities increased by
$2.738 million, accounts receivable increased by $1.401 million, property and
equipment increased $0.213 million, and inventory levels increased by $0.120
million compared to June 30, 2000.

         The Company's principal sources of liquidity at December 31, 2000,
consisted of cash, accounts receivable, a revolving line of credit with Coast
Business Credit, and vendor trade credit. The revolving line of credit with
Coast Business Credit is based on available eligible account receivables and
inventory. The line of credit decreased $.132 million, from $1.316 million to
$1.184 million compared to June 30, 2000.

         On August 26, 1999, the Company entered into a financing transaction
with Fernwood Partners II, LLC ("Fernwood") and certain officers, directors and
employees of the Company, through which the Company obtained a total amount of
$4,313,484 (the "Fernwood Financing"). In the Fernwood Financing, Fernwood
provided $3,699,484 and certain other directors, executive officers and
employees of the Company provided $614,000. All of the financing consisted of
promissory notes convertible into the Company's Common Stock at $1.00 per share
and warrants to purchase an equivalent number of shares of the Company's Common
Stock at $2.00 per share. The Fernwood Financing bears interest at a rate of
11.5% per annum and is secured by a lien on all of the Company's assets.
Interest is payable quarterly, except that interest accruing from the date of
issuance through July 1, 2000, which was added to the principal amount of the
note. Part of the proceeds from this financing was used to repay a $1,125,000
loan and accrued interest to Fernwood Partners, LLC, a limited liability company
that provided financing to the Company in December 1998.



                                       11
<PAGE>   13

CYBERGUARD CORPORATION
DECEMBER 31, 2000
(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

         On December 29, 2000, the Company completed an additional $1 million
financing transaction with Fernwood, which was constructed as an add-on to the
earlier Fernwood Financing. The additional note is convertible into the
Company's common stock at $1.51 per share and carries a warrant to purchase an
additional 333,877 shares of the Company's common stock at $2.51 per share. The
additional convertible note bears interest at 11.5% per annum with no principal
payments due until June 30, 2002. The Fernwood Financing is subordinated to
senior debt and is collateralized by the assets of the Company.

         On January 24, 2001, in connection with the Fernwood Financing,
approximately $5.7 million of convertible debt and the interest accrued on that
debt was converted into approximately 4.6 million shares of common stock at
$1.00 per share and approximately 668,000 million shares of common stock at
$1.51 per share. In connection with the Fernwood Financing, approximately
$252,000 in convertible debt and interest accrued on that debt is still
outstanding.

         During January 2000, in connection with the Fernwood Financing,
warrants for the purchase of approximately 2.4 million shares of the Company's
common stock were exercised at a total of approximately $4.8 million in cash. In
connection with the Fernwood Financing, approximately 1.9 million warrants are
still outstanding.

         The Company uses the U.S. Dollar as its reporting currency for
financial statement purposes. The Company conducts business in numerous
countries around the world through its international subsidiary that uses the
local currency to denominate its transactions. Therefore, the Company is subject
to certain risks associated with fluctuating foreign currencies. The resulting
changes in the financial statements do not indicate any underlying changes in
the financial position of the international subsidiary, but merely reflect the
adjustment in the carrying value of the net assets of this subsidiary at the
current U.S. dollar exchange rate.

         Due to the long-term nature of the Company's investment in this
subsidiary, the translation adjustments resulting from these exchange rate
fluctuations are excluded from the results of operations and recorded in a
separate component of consolidated stockholders' equity. The Company monitors
its currency exposure but does not hedge its translation exposure due to the
high economic costs of such a program and the long-term nature of its investment
in its European subsidiary.

         Based upon information currently available to the Company, including
the Company's current level of sales, its margins on sales, its expected levels
of expense, opportunities for selling additional network security products and
the availability of additional equity and debt financing, the Company believes
that it has an opportunity to execute on its business plans and achieve
profitability in the long term. There can be no assurance, however, that the
Company will be able to execute on its business plans, or that it will not be
required to obtain additional financing or capital infusions. There can be no
assurance that the Company will be able to secure additional financing or that
such additional financing will be on terms and conditions acceptable to the
Company. Any additional financing may involve dilution of the interests of the
Company's then existing shareholders. The future liquidity of the Company will
be affected by numerous factors, including sales volumes, gross margins, the
levels of selling, general and administrative expenses, levels of required
capital expenditures and access to external sources of financing. Other recent
and possible future events that could also materially impact the Company's
ability to successfully execute on its business plans are described in
Information Relating to Forward Looking Statements of this Report on Form 10-Q.




                                       12
<PAGE>   14

CYBERGUARD CORPORATION
DECEMBER 31, 2000
(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

RISK RELATED TO YEAR 2000 PROBLEM

         The Year 2000 problem stems from the use of a two-digit date to
represent the year (e.g., 85 = 1985) in computer software and firmware. It was
thought that many currently installed computer systems were not capable of
distinguishing dates beginning with the year 2000 from dates prior to the year
2000. Computer systems or applications used by many companies in a wide variety
of industries could experience operating difficulties unless the systems or
applications were modified to adequately process information related to the date
change. A degree of uncertainty still exists in the software and other
industries concerning the scope and magnitude of problems associated with the
century change. Many industry experts believe that the extent of Year 2000
issues may not be realized until after March 31, 2001.

         While the Company believes its Year 2000 risk management initiative's
scope covered both the Company's information technology (IT) systems and non-IT
systems and addressed all areas of the Year 2000 issues as defined by the
Information Technology Association of America (ITAA), and to date there have
been no Year 2000 issues detected, there can be no assurance that the Company
has identified and remedied all Year 2000 problems, and that such problems will
not have a material adverse affect on the Company's business.

INFORMATION RELATING TO FORWARD LOOKING STATEMENTS

         Statements regarding future products, future prospects, future
profitability, business plans and strategies, future revenues and revenue
sources, future liquidity and capital resources, computer network security
market directions, future acceptance of the Company's products, possible growth
in markets, as well as all other statements contained in this Report on Form
10-Q that are not purely historical are forward-looking statements.

         These statements are based upon assumptions and analyses made by the
Company in light of current conditions, future developments and other factors
the Company believes are appropriate in the circumstances, or information
obtained from third parties and are subject to a number of assumptions, risks
and uncertainties. Readers are cautioned that forward-looking statements are not
guarantees of future performance and that the actual results might differ
materially from those suggested or projected in the forward-looking statements.
Accordingly, there can be no assurance that the forward-looking statements will
occur, or that results will not vary significantly from those described in the
forward-looking statements. Some of the factors that might cause future actual
events to differ from those predicted or assumed include: future advances in
technologies and computer security; the Company's history of annual net
operating losses and the financing of these losses through the sale of assets
and newly issued Company securities; risks related to the early stage of the
Company's existence and its products' development; the Company's ability to
execute on its business plans; the Company's dependence on outside parties such
as its key customers and alliance partners; competition from major computer
hardware, software, and networking companies; risk and expense of government
regulation and effects on changes in regulation; the limited experience of the
Company in marketing its products; uncertainties associated with product
performance liability; risks associated with growth and expansion; risks
associated with obtaining patent and intellectual property right protection;
uncertainties in availability of expansion capital in the future and other risks
associated with capital markets. In addition, certain events that have occurred
also are factors that might cause future actual events to differ from those
predicted or assumed, including: the impact of the restatement of financial
results for the Company's fiscal year ended June 30, 1997 and quarters ended
September 30, 1997, December 31, 1997 and March 31, 1998; the completion of the
numerous organizational changes and the assembly of a new management




                                       13
<PAGE>   15

CYBERGUARD CORPORATION
DECEMBER 31, 2000
(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

team for CyberGuard; the outcome of a purported class action lawsuit against the
Company and former CEO, Mr. Robert L. Carberry, relating to the restatement of
financial results for the fiscal periods noted above and an SEC investigation
regarding these matters; and the de-listing of the Company from the NASDAQ
National Market. In addition, the forward-looking statements herein involve
assumptions, risks and uncertainties, including, but not limited to economic,
competitive, operational, management, governmental, regulatory, litigation and
technological factors affecting the Company's operations, liquidity, capital
resources, markets, strategies, products, prices and other factors discussed
elsewhere herein and in the other documents filed by the Company with the
Securities and Exchange Commission. Many of the foregoing factors are beyond the
Company's control.

         The Company's future success is based largely on its ability to develop
and sell increasingly technologically advanced network security solutions in
sufficient volume and at sufficient prices to become profitable on a consistent
basis. In addition, the network security market is characterized by extremely
rapid technological change, requiring rapid product development. The velocity of
technological change has accelerated and the Company believes that it is
important to its future that it keeps pace with these changes. The Company
believes that competition will continue to intensify in the rapidly evolving
markets in which the Company is involved, and that the continued development of
technologically advanced products will be necessary to keep its products
current. In addition, the competition for and retention of key management and
technology employees is a critical challenge. The Company believes that its
ability to generate adequate cash flow from operations will also be critical to
its future.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES CONCERNING MARKET RISK

         We have limited exposure to financial market risks, including changes
in interest rates. The fair value of our investment portfolio or related income
would not be significantly impacted by a 100 basis point increase or decrease in
interest rates due mainly to the short-term nature of the major portion of our
investment portfolio. A fluctuation in interest rates would not significantly
affect interest expense on debt obligations since a significant portion of the
debt obligation is at a fixed rate of interest.

PART II: OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On August 24, 1998, the Company announced, among other things, that due
to a review of its revenue recognition practices relating to distributors and
resellers, it would restate prior financial results. After the August 24, 1998
announcement, twenty-five purported class action lawsuits were filed by alleged
shareholders against the Company and certain former officers and directors.
Pursuant to an order issued by the Court, these actions have been consolidated
into one action, styled Stephen Cheney, et al. v. CyberGuard Corporation, et
al., Case No. 98-6879-CIV-Gold, in the United States District Court, Southern
District of Florida. On August 23, 1999, the plaintiffs filed a Consolidated and
Amended Class Action Complaint. This action seeks damages purportedly on behalf
of all persons who purchased or otherwise acquired the Company's common stock
during various periods from November 7, 1996 through August 24, 1998. The
complaint alleges, among other things, that as a result of accounting
irregularities relating to the Company's revenue recognition policies, the
Company's previously issued financial statements were materially false and
misleading and that the defendants knowingly or recklessly published these
financial statements which caused the Company's common stock prices to rise
artificially. The action alleges violations of Section 10(b) of the Securities
Exchange Act of 1934 ("Exchange Act") and SEC Rule 10b-5 promulgated thereunder
and Section 20(a) of the Exchange Act.


                                       14
<PAGE>   16

CYBERGUARD CORPORATION
DECEMBER 31, 2000
(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

Subsequently, the defendants, including the Company, filed their respective
motions to dismiss the amended complaint. On July 31, 2000, the Court issued a
ruling denying the Company's and Robert L. Carberry's (the Company's CEO from
June 1996 through August 1998) motions to dismiss. The court granted the motions
to dismiss with prejudice for defendants William D. Murray (the Company's CFO
from November 1997 through August 1998), Patrick O. Wheeler (the Company's CFO
from April 1996 through October 1997), C. Shelton James (former Audit Committee
Chairman), and KPMG Peat Marwick LLP ("KPMG"). On August 14, 2000, the
plaintiffs filed a motion for reconsideration of that order. The Company filed
an answer to the plaintiffs' complaint on August 24, 2000.

         On September 16, 1999, the Company filed a lawsuit against KPMG and
August A. Smith, the KPMG engagement partner. The lawsuit is pending in the
Circuit Court of the 17th Judicial Circuit in and for Broward County, Case No.
00-004102-CACE-14. On May 1, 2000, the Company filed the First Amended
Complaint, alleging that KPMG failed to properly audit the Company's financial
statements and provided inaccurate advice on accounting matters for fiscal years
1996, 1997 and 1998. The action alleges professional malpractice, breach of
fiduciary duty, breach of contract and breach of implied duty of good faith, and
seeks damages in excess of $10 million. KPMG and Mr. Smith filed motions to
dismiss, which were denied. In August 2000, KPMG and Mr. Smith filed their
answers and KPMG filed counterclaims against the Company, alleging the Company's
breach of contract, negligent misrepresentation and abuse of process, and seeks
an unspecified amount of damages consisting of unpaid service fees and legal
fees and costs.

         In August 1998, the Securities and Exchange Commission ("SEC")
commenced an informal inquiry into certain accounting and financial reporting
practices of the Company and its officers, directors and employees. On March 25,
1999, the SEC issued a formal order of investigation (which the Company learned
of on September 27, 1999) into certain accounting and financial reporting
practices of the Company and its officers, directors and employees. The SEC's
investigation is ongoing.

         The Company is unable to predict the ultimate outcome of the litigation
and investigation described above in this Part II, Item 1. The resolution of
such matters could have a material adverse affect on the Company's results of
operations and financial position. The Company's financial statements do not
include any adjustments related to these matters.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

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

         On December 6, 2000, the Company held its Annual Meeting of
Shareholders at the Marriott by Courtyard at Cypress Creek, in Fort Lauderdale,
Florida. John V. Tiberi and David T. Vandewater were nominated as members to the
Board of Directors for a period of three years. Mr. Tiberi received 8,821,206
votes in favor of his appointment, while 47,489 shares were withheld and Mr.
Vandewater received 8,821,206 votes in favor of his appointment, while 47,489
shares were withheld. David L. Manning, David R. Proctor and William G. Scott
will continue on in their current capacity as Board members.




                                       15
<PAGE>   17

CYBERGUARD CORPORATION
DECEMBER 31, 2000
(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

         Two other matters were brought for vote during the annual meeting: the
ratification of the CyberGuard Corporation 2000 Employee Stock Purchase Plan and
the ratification of Grant Thornton LLP as the Company's independent public
accountants for the fiscal year ending June 30, 2001. The amendment to ratify
the Employee Stock Purchase Plan was passed with 2,428,923 votes in favor,
205,915 votes against and 40,821 abstentions. The ratification of Grant Thornton
LLP was passed with 8,744,241 votes in favor, 32,241 votes against, and 22,846
abstentions.

ITEM 5.  OTHER INFORMATION

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

<TABLE>
<CAPTION>
Exhibit Nr.       Exhibit Description
-----------       -------------------
<S>               <C>
10.1              Amendment to Employment Agreement between the Company and Mike
                  Wittig dated December 13, 2000.
10.2              Amendment No.1 to Loan Agreement between the Company and
                  Fernwood Partners II, LLC dated December 29, 2000.
10.3              Agreements dated January 24, 2001 relating to the conversion
                  of promissory notes and exercise of warrants issued under (i)
                  the Loan Agreement, as amended, between the Company and
                  Fernwood Partners II, LLC, and (ii) the Loan Agreement between
                  the Company and certain officers, directors and employees of
                  the Company.
10.4              Employment Agreement between the Company and Scott J. Hammack
                  effective as of January 2, 2001.
10.5              Agreement between the Company and Scott J. Hammack dated
                  December 26, 2000.
10.6              Agreement between the Company and Scott J. Hammack dated
                  January 17, 2001.
10.7              Employment Agreement between the Company and Patrick J.
                  Clawson dated January 18, 2001.
</TABLE>

(b)      Reports filed on Form 8-K during the quarter ended December 31, 2000:

         During the quarter ended December 31, 2000, the Company filed one
         report on Form 8-K on November 2, 2000. The report furnished
         information relating to the Company's appeal to list the Company's
         securities on the NASDAQ Small-Cap Market.


                                       16
<PAGE>   18

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: February 13, 2001                CYBERGUARD CORPORATION



                                       By: /s/ Scott Hammack
                                          --------------------------------------

                                       Chief Executive Officer



                                       By: /s/ Terrence A. Zielinski
                                          --------------------------------------
                                          Vice President of Finance and Chief
                                          Financial Officer (Principal Financial
                                          and Accounting Officer)




                                       17