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| William Swain, GraphOn Corporation1.800.GRAPHONBill.Swain@GraphOn.com |   |
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| GRAPHON CORPORATION                                                                |                                                             |                                                                                                                                                          |                                                             |                                                                                                                                              |
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|  Condensed Consolidated Balance Sheets                                        |                                                             |                                                                                                                                                          |                                                             |                                                                                                                                              |
|                                                                               |                                                             |  December 31,                                                                                                                                            |                                                             |  December 31,                                                                                                                                |
|                                                                               |                                                             | 2009                                                                                                                                                          |                                                             | 2008                                                                                                                                              |
|                                                                               |                                                             | (Unaudited)                                                                                                                                                   |                                                             | (Unaudited)                                                                                                                                       |
|  Assets                                                                       |                                                             |                                                                                                                                                          |                                                             |                                                                                                                                              |
|  Cash and cash equivalents                                                    |                                                             |  $       2,852,900                                                                                                    |                                                             |  $        3,742,200                                                                                  |
|  Accounts receivable, net                                                     |                                                             |              839,600                                                                         |                                                             |               970,000                                                       |
|  Other current assets                                                         |                                                             |                64,500                                                              |                                                             |                 63,400                                            |
|  Total current assets                                                         |                                                             |           3,757,000                                                                                         |                                                             |            4,775,600                                                                       |
|  Property and equipment, net                                                  |                                                             |              127,100                                                                         |                                                             |               182,700                                                       |
|  Patents, net                                                                 |                                                             |              511,700                                                                         |                                                             |               984,000                                                       |
|  Other assets                                                                 |                                                             |                14,800                                                              |                                                             |                 20,200                                            |
|  Total assets                                                                 |                                                             |  $       4,410,600                                                                                                    |                                                             |  $        5,962,500                                                                                  |
|                                                                               |                                                             |                                                                                                                                                          |                                                             |                                                                                                                                              |
|  Liabilities and stockholders' equity                                         |                                                             |                                                                                                                                                          |                                                             |                                                                                                                                              |
|  Accounts payable and accrued liabilities                                     |                                                             |  $          986,200                                                                                    |                                                             |  $          795,700                                                                        |
|  Deferred revenue - current                                                   |                                                             |           1,862,600                                                                                         |                                                             |           1,744,600                                                                             |
|  Total current liabilities                                                    |                                                             |           2,848,800                                                                                         |                                                             |           2,540,300                                                                             |
|  Deferred revenue - long term                                                 |                                                             |              836,200                                                                         |                                                             |              858,500                                                             |
|  Other liabilities - long term                                                |                                                             |                         -             |                                                             |                28,400                                                  |
|  Stockholders' equity                                                         |                                                             |              725,600                                                                         |                                                             |           2,535,300                                                                             |
|  Total liabilities and stockholders' equity                                   |                                                             |  $       4,410,600                                                                                                    |                                                             |  $        5,962,500                                                                                  |
|                                                                               |                                                             |                                                                                                                                                          |                                                             |                                                                                                                                              |
|   Condensed Consolidated Statements of Operations and Comprehensive Loss |
|                                                                               |                                                             |                                                                                                                                                          |                                                             |                                                                                                                                              |
|                                                                               |                                                             |  Year ended December 31,                                                                                                                                 |
|                                                                               |                                                             | 2009                                                                                                                                                          |                                                             | 2008                                                                                                                                              |
|                                                                               |                                                             |  (Unaudited)                                                                                                                                             |                                                             |  (Unaudited)                                                                                                                                 |
|  Revenue                                                                      |                                                             |  $        8,077,200                                                                                              |                                                             |  $        6,708,700                                                                                  |
|  Cost of revenue                                                              |                                                             |            1,381,100                                                                                   |                                                             |               575,100                                                       |
|  Gross profit                                                                 |                                                             |            6,696,100                                                                                   |                                                             |            6,133,600                                                                       |
|                                                                               |                                                             |                                                                                                                                                          |                                                             |                                                                                                                                              |
|  Selling and marketing                                                        |                                                             |            1,871,500                                                                                   |                                                             |            1,816,100                                                                       |
|  General and administrative                                                   |                                                             |            3,889,600                                                                                   |                                                             |            3,796,100                                                                       |
|  Research and development                                                     |                                                             |            2,768,600                                                                                   |                                                             |            2,373,500                                                                       |
|  Impairment of patents                                                        |                                                             |                          -       |                                                             |               868,200                                                       |
|  Total operating expenses                                                     |                                                             |            8,529,700                                                                                   |                                                             |            8,853,900                                                                       |
|  Loss from operations                                                         |                                                             |          (1,833,600)                                                                                             |                                                             |          (2,720,300)                                                                                 |
|  Other income, net                                                            |                                                             |                15,400                                                              |                                                             |                81,800                                                  |
|  Loss before income taxes                                                     |                                                             |          (1,818,200)                                                                                             |                                                             |          (2,638,500)                                                                                 |
|  Income taxes                                                                 |                                                             |                  2,000                                                   |                                                             |               (11,700)                                                      |
|  Net loss                                                                     |                                                             |          (1,820,200)                                                                                             |                                                             |          (2,626,800)                                                                                 |
|  Other comprehensive income (loss)                                            |                                                             |                           - |                                                             |                         - |
|  Comprehensive loss                                                           |                                                             |  $      (1,820,200)                                                                                                        |                                                             |  $      (2,626,800)                                                                                            |
|  Loss per common share - basic and diluted                                    |                                                             |  $               (0.04)                                                       |                                                             |  $               (0.06)                                           |
|  Weighted average shares outstanding - basic and diluted                      |          47,212,851 |                                                                                                                                                          |          47,022,803 |

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