<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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 September 30, 1999

                                       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 0-23239

                                   UBICS, INC.
             (Exact name of registrant as specified in its charter)

          PENNSYLVANIA                                   34-1744587
(State or other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization

333 TECHNOLOGY DRIVE, SUITE 210 SOUTHPOINTE, CANONSBURG, PENNSYLVANIA      15317
            (Address of Principal Executive Offices)                  (Zip Code)

                                 (724) 746-6001
              (Registrant's Telephone Number, Including Area Code)

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

         Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock as of the latest practicable date:

                   Class                 Outstanding at October 31, 1999
                   -----                 -------------------------------

        Common Stock, $.01 par value                 6,479,800

<PAGE>   2

                                   UBICS, INC.

                                    Form 10-Q

                                TABLE OF CONTENTS

PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements

         Balance Sheets as of December 31, 1998 and September 30, 1999

         Statements of Operations for the three months ended September 30, 1998
         and 1999 and the nine months ended September 30, 1998 and 1999

         Statements of Cash Flows for the nine months ended September 30, 1998
         and 1999

         Notes to Unaudited Financial Statements

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities and Use of Proceeds

Item 3.  Defaults upon Senior Securities

Item 4.  Submission of Matters to a Vote of Security Holders

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

SIGNATURES

                                       2
<PAGE>   3

                                   UBICS, INC.

                                 BALANCE SHEETS
                 (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                              December 31,     September 30,
                                                                                  1998             1999
                                                                              ------------------------------
                                                                                               (unaudited)
               <S>                                                            <C>                 <C>
               ASSETS
               Current assets:

                    Cash and cash equivalents                                 $ 11,470             $ 12,053
                    Accounts receivable, net of allowance for
                       doubtful accounts of $305
                       and $750, respectively                                    4,152                4,783
                    Unbilled receivables                                         2,973                2,829
                    Employee advances                                              164                   98
                    Prepaids and other                                             258                  511
                    Due from affiliates, net                                       174                  193
                    Deferred tax asset                                             206                  259
                                                                              --------             --------
                    Total current assets                                        19,397               20,726
                                                                              --------             --------
               Property and equipment:
                    Leasehold improvement                                           40                   40
                    Motor car                                                       72                   72
                    Computer equipment                                           1,026                1,399
                    Furniture and fixtures                                         623                  659
                    Office and other equipment                                      30                   40
                                                                              --------             --------
                    Total property and equipment                                 1,791                2,210
               Accumulated depreciation                                            170)                (374)
                                                                              --------             --------
                    Net property and equipment                                   1,621                1,836
                                                                              --------             --------
               Other long term asset                                               200                  250
                                                                              ========             ========
                      Total assets                                            $ 21,218             $ 22,812
                                                                              ========             ========

               LIABILITIES AND STOCKHOLDERS' EQUITY
               Current liabilities:
                    Accounts payable                                             2,034                2,703
                    Payroll liabilities                                          1,628                2,042
                    Accrued taxes                                                   46                   --
                    Other current liabilities                                      230                  314
                                                                              --------             --------
                    Total liabilities                                            3,938                5,059
                                                                              --------             --------
               Stockholders' equity:
                    Preferred stock, $.01 par value, 2,000,000
                       shares authorized, no shares issued and
                       Outstanding                                                  --                   --
                    Common stock, $.01 par value, 20,000,000
                       shares authorized, 6,491,400 shares
                       issued and outstanding                                       65                   65
                    Additional paid-in capital                                  13,160               13,160
                    Retained earnings                                            4,155                4,628
                    Treasury stock                                                (100)                (100)
                                                                              --------             --------
                    Total stockholders' equity                                  17,280               17,753
                                                                              --------             --------

                        Total liabilities and stockholders' equity            $ 21,218             $ 22,812
                                                                              ========             ========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       3
<PAGE>   4

                                   UBICS, INC.

                            STATEMENTS OF OPERATIONS
                 (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                             Three Months                      Nine Months
                                         Ended September 30,              Ended September 30,
                                     ----------------------------------------------------------

                                         1998            1999           1998            1999
                                     (unaudited)     (unaudited)     (unaudited)     (unaudited)
                                     ----------------------------------------------------------
<S>                                  <C>             <C>             <C>             <C>
Revenues                             $    8,451      $    9,603      $   21,627      $   28,320
Cost of revenues                          5,774           6,893          14,632          20,486
                                     ----------      ----------      ----------      ----------
  Gross profit                            2,677           2,710           6,995           7,834
Selling, general and
  administrative expense                  1,784           2,254           4,395           6,530
Merger related expenses                      --              --              --             869
                                     ----------      ----------      ----------      ----------
Income from operations                      893             456           2,600             435
Interest income  (expense), net             147             136             474             396
                                     ----------      ----------      ----------      ----------
Income before income taxes                1,040             592           3,074             831
Provision for income taxes                  420             256           1,240             358
                                     ----------      ----------      ----------      ----------
  Net income                         $      620      $      336      $    1,834      $      473
                                     ==========      ==========      ==========      ==========
Basic and diluted earnings per
  share                              $     0.10      $     0.05      $     0.28      $     0.07
                                     ==========      ==========      ==========      ==========

Weighted average shares
  outstanding                         6,499,149       6,481,234       6,576,338       6,482,153
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       4
<PAGE>   5

                                   UBICS, INC.

                            STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                 Nine Months
                                             Ended September 30,
                                           -----------------------
                                               1998        1999
                                           (Unaudited)  (Unaudited)
                                           -----------------------
<S>                                        <C>            <C>
 Cash flows from operating activities:
  Net income                               $  1,834       $    473
  Adjustments to reconcile net
     income to net cash provided by
     operating activities--
     Depreciation                                49            204
     Changes in operating assets and
       liabilities--
       Accounts receivable, net              (1,744)          (631)
       Unbilled receivables                    (894)           144
       Employee advances                       (258)            66
       Other long term asset                     --            (50)
       Due to affiliates, net                  (120)           (19)
       Deferred tax asset                        --            (53)
       Prepaids and other                      (195)          (253)
       Accounts payable                       1,366            669
       Payroll liabilities                      412            414
       Accrued taxes and other
          Current liabilities                  (637)            38
                                           --------       --------
  Net cash (used) provided by
    operating activities                       (187)         1,002
                                           --------       --------

Cash flows from investing activities:
  Purchases of property and
     equipment                               (1,120)          (419)
                                           --------       --------
   Net cash used by investing
     activities                              (1,120)          (419)
                                           --------       --------

Cash flows from financing activities:
  Treasury stock purchased                      (47)            --
                                           --------       --------
     Net cash provided by financing
       activities                               (47)            --
                                           --------       --------
Net increase (decrease) in cash
  and cash equivalents                       (1,354)           583
Cash and cash equivalents, at
  beginning of period                        12,790         11,470
                                           --------       --------
Cash and cash equivalents, at
  end of period                            $ 11,436       $ 12,053
                                           ========       ========
Supplemental data:
  Cash payments for income taxes           $  1,863       $    750
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>   6

                                   UBICS, INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

1. BASIS OF PRESENTATION

    The financial statements of UBICS, Inc. ("UBICS" or "the Company") presented
herein are unaudited. Certain information and footnote disclosures normally
prepared in accordance with generally accepted accounting principles have been
either condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. Although the Company believes that all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation have been made, interim periods are not necessarily indicative
of the financial results of operations for a full year. As such, these financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for its fiscal year
ended December 31, 1998 filed on March 31, 1999, as amended by a Form 10-K/A
filed on April 30, 1999.

    Reclassifications
    Certain prior balances have been reclassified to conform to the current
period presentation.

2. OPERATIONS:

    UBICS, a Delaware corporation, provides information technology professional
services to large and mid-sized organizations. The Company provides its clients
with a wide range of professional services in such areas as client/server design
and development, enterprise resource planning package implementation and
customization, applications maintenance programming and database and systems
administration.

3. REVOLVING CREDIT FACILITY:

    The Company had a revolving credit facility with PNC Bank, National
Association ("PNC") at the end of December 31, 1998. Borrowings under this
arrangement are limited to $1,000, bear interest at prime rate as defined (7.75%
at December 31, 1998) plus 0.5% and are payable upon demand. The revolving
credit facility was secured by the assets of the Company. Because the Company
had no immediate plans to utilize this credit facility, the Company elected not
to renew the facility in August 1999.

    There were no borrowings outstanding as of December 31, 1998.

4. RELATED PARTY TRANSACTIONS:

    As of December 31, 1998 and September 30, 1999, the Company had a net
receivable from the UB Group, totaling $174 and $193, respectively, resulting
from expenses incurred by the Company on behalf of the UB Group.

5. EARNINGS PER SHARE:

    Under Financial Accounting Standards Board Statement on Financial Accounting
Standards ("SFAS") No. 128, "Earnings Per Share," earnings per share are
classified as basic earnings per share and diluted earnings per share. Basic
earnings per share included only the weighted average common shares outstanding.
Diluted earnings per share included the weighted average common shares
outstanding and any dilutive common stock equivalent shares in the calculation.
All prior periods have been restated to reflect the Company's adoption of SFAS
No 128. Treasury shares are treated as retired for earnings per share purposes.
In 1999, stock options of 391,000 shares are not included in the diluted
earnings per share calculations as the Company's average market price for the
period was less than the exercise price.

                                       6
<PAGE>   7

    The following table reflects the calculation of earnings per share under
SFAS No. 128:

<TABLE>
<CAPTION>
                                                 Three Months                      Nine Months
                                              Ended September 30,              Ended September 30,
                                         ------------------------------------------------------------

                                              1998           1999             1998           1999
                                         (unaudited)     (unaudited)      (unaudited)     (unaudited)
                                         ------------------------------------------------------------
    <S>                                  <C>             <C>              <C>             <C>
     (Dollars in thousands, except per
     share data)

     BASIC EARNINGS PER SHARE

     Net income                          $       620     $       336      $     1,834     $       473

     DIVIDED BY:

     Weighted average common shares        6,498,738       6,479,800        6,499,575       6,479,800

     Basic earnings per share                   0.10            0.05             0.28            0.07
                                         -----------     -----------      -----------     -----------

     DILUTED EARNINGS PER SHARE:

     Net income                                  620             336            1,834             473

     DIVIDED BY:
     Weighted average common shares        6,498,738       6,479,800        6,499,575       6,479,800
     Dilutive effect of options                  411           1,434           76,764           2,353
                                         -----------     -----------      -----------     -----------
     Dilutive average common shares        6,499,149       6,481,234        6,576,338       6,482,153

     Diluted earnings per share          $      0.10     $      0.05      $      0.28     $      0.07
</TABLE>

                                       7

<PAGE>   8

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

         The following discussion should be read in conjunction with, and is
qualified in its entirety by, the financial statements and notes thereto
included in Item 1 of this report.

         The following Management's Discussion and Analysis of Results of
Operations and Financial Condition contains certain forward looking statements
that involve substantial risks and uncertainties. When used in this section, the
words "anticipate," "believe," "estimate," "expect" and similar expressions as
they relate to the Company or its management are intended to identify such
forward looking statements. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward looking statements.

OVERVIEW

         UBICS, Inc. ("UBICS" or the "Company"), founded in 1993, provides IT
professional services to large and mid-sized organizations. UBICS provides its
clients with a wide range of professional services in such areas as
client/server design and development, ERP package implementation and
customization, e-commerce applications design and development, applications
maintenance programming and database and systems administration. UBICS' services
are provided on a time-and-materials basis to client-managed projects, with
UBICS IT professionals providing integral support as project team members. The
Company currently has offices in the Pittsburgh, Pennsylvania and San Francisco,
California areas. UBICS is an affiliate of the UB Group, a multinational group
of companies headquartered in India (the "UB Group").

         The Company's revenues are based on the hourly billing of its IT
professionals. Revenue is recognized as services are provided. The billing
rate for an IT professional varies for different service offerings and is
also dependent upon market demand, experience and competence level of the IT
professional. Generally, the rates for IT professionals placed on ERP package
implementation projects are higher. As of September 30, 1999, 68 IT
professionals, or over one-fifth of the Company's deployed IT professionals,
were placed on such projects.

         UBICS attempts to minimize the number of days IT professionals are not
assigned to projects by proactively marketing these professionals to clients.
Resource managers closely monitor the availability of IT professionals and
utilize subcontractors when UBICS IT professionals are unavailable. The Company
maintains strong relationships with nearly 65 subcontractors located worldwide.
Approximately 41% of the Company's revenues were derived from IT professionals
deployed from subcontractors for the three months ended September 30, 1999. As
of September 30, 1999, IT professionals deployed from subcontractors comprised
111 of the Company's 286 deployed IT professionals. The Company believes that
its network of subcontractors enables it to maintain closer relationships with
clients by fulfilling more of their needs for IT professional services.

         Since inception the Company has developed relationships with 403
clients in a range of industries and the Company rendered IT services to 167 of
these clients during the current quarter of 1999. Although the Company's five
largest clients accounted for approximately 19% of revenues for the third
quarter of 1999, this revenue concentration has been declining since the
Company's inception. The Company's strategy is to continue to provide services
to clients across the U.S. in a range of industries, in order to reduce credit
risk from conditions or occurrences within any specific industry or region in
which these clients operate.

                                       8
<PAGE>   9

RECENT DEVELOPMENTS

         On July 1, 1999, UBICS announced that it would not complete its
previously announced acquisition of privately held California-based R Systems,
Inc. The acquisition was to be completed by June 30, 1999 following a
stockholder vote during UBICS's Annual Meeting. Because of delays in receiving
Securities and Exchange Commission clearance of UBICS's proxy materials, the
annual meeting could not be held and the acquisition could not be closed by the
June 30 transaction deadline. The parties were unable to agree on an extension
of the acquisition agreement and therefore the transaction was terminated.
Expenses related to the transaction of approximately $900,000 were recorded
during the quarter ended June 30, 1999 ( See "Merger Related Expenses" below).

RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, selected
statements of operations data as a percentage of revenues:

<TABLE>
<CAPTION>
                                                    PERCENTAGE OF REVENUES
                                                    ----------------------

                                            THREE MONTHS                NINE MONTHS
                                        ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                        -------------------         -------------------
                                        1998          1999           1998          1999
                                        ----          ----           ----          ----
<S>                                     <C>           <C>           <C>           <C>
Revenues .....................          100.0%        100.0%        100.0%        100.0%
Cost of revenues .............           68.3          71.8          67.7          72.3
                                        -----         -----         -----         -----
Gross profit .................            1.7          28.2          32.3          27.7
Selling, general and
  administrative expense .....           21.1          23.4          20.3          23.0
Merger related expenses ......             --            --            --           3.1
                                        -----         -----         -----         -----
Income from operations .......           10.6           4.8          12.0           1.6
Interest income (expense), net            1.7           1.4           2.2           1.4
                                        -----         -----         -----         -----
Income before income taxes ...           12.3           6.2          14.2           3.0
Provision for income taxes ...            5.0           2.7           5.7           1.3
                                        -----         -----         -----         -----
Net income ...................            7.3           3.5           8.5           1.7
                                        =====         =====         =====         =====
</TABLE>

THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1998.

Revenues

         Revenues for the quarter ended September 30, 1999 were $9.6 million,
compared to $8.5 million for the quarter ended September 30, 1997, an increase
of $1.1 million, or 14%. Approximately 98% of the increase in revenues was due
to an increase in the number of IT professionals deployed to provide services to
new and existing clients and approximately 2% of the increase in revenues was
due to higher average hourly billing rates resulting in increased demand for IT
professionals.

Gross Profit

         Gross profit for the third quarter of 1999 was $2.7 million, the same
as the third quarter of 1998. Gross profit as a percentage of revenues decreased
to 28.2% for the third quarter of 1998, compared to 31.7% for the third quarter
of 1997. Approximately 5% of the decrease in gross profits as a percentage of
revenues resulted

                                       9
<PAGE>   10

from increases in the rates paid for subcontractor professionals and
approximately 95% of such decrease resulted from an increase in the number of
employee professionals waiting to be deployed.

Selling, General and Administrative Expense

         Selling, general and administrative expense for the quarter ended
September 30, 1999 was $2.3 million, compared to $1.8 million for the same
quarter of 1997, an increase of $0.5 million or 26%. Selling, general and
administrative expense as a percentage of revenues increased to 23.4% for the
third quarter of 1998 from 21.1% for the third quarter of 1998. The increase in
expense was primarily due to increases in costs to support the Company's growth,
including a $150,000 increase in salaries and commissions paid to employees and
a $40,000 increase in rental payments resulting from the relocation of the
Company's principal offices in 1998. In addition, the Company incurred
approximately $ 87,000 in fees and travel costs in connection with its
recruitment of additional sales personnel and other executive officers.

Interest Income (Expense) Net

         Interest income for the third quarter of 1999 was $136,000, compared to
interest income of $147,000 for the third quarter of 1998. The decrease resulted
from a reduction in the amount of net proceeds of the Company's 1997 initial
public offering available for investment.

Provision for Income Taxes

         The Company's effective tax rate was 43.2% for the quarter ended
September 30, 1999 compared to 40.4% for the quarter ended September 30, 1998.

NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1998.

Revenues

         Revenues for the nine months ended September 30, 1999 were $26.3
million, compared to $21.6 million for the nine months ended September 30, 1998,
an increase of $4.7 million, or 22%. Approximately 80% of the increase in
revenues was due to an increase in the number of IT professionals deployed to
provide services to new and existing clients and approximately 20% of the
increase in revenues was due to higher average hourly billing rates resulting
from a shift toward higher value-added services including ERP-related services
as well as increased demand for IT professionals.

Gross Profit

         Gross profit for the first nine months of 1999 was $7.8 million,
compared to $7.0 million for the first nine months of 1998, an increase of $0.8
million, or 12%. Gross profit as a percentage of revenues decreased to 27.7% for
the nine months ended September 30 1999, compared to 32.3% for the same period
of 1998. Approximately 15% of the decrease in gross profits as a percentage of
revenues resulted from increases in the rates paid for subcontractor
professionals and approximately 85% of such decrease resulted from an increase
in the number of employee professionals waiting to be deployed.

Selling, General and Administrative Expense

         Selling, general and administrative expense for the nine months ended
September 30, 1999 was $6.5 million, compared to $4.4 million for the same
period of 1998, an increase of $2.1 million or 49%. Selling, general and
administrative expense as a percentage of revenues increased to 23.0% for the
nine months ended September 30, 1999 from 20.3% for the nine months ended
September 30, 1998. The increase in expense was

                                       10
<PAGE>   11

primarily due to increases in costs to support the Company's growth, including a
$850,000 increase in salaries and commissions paid to employees and a $175,000
increase in rental payments resulting from the relocation of the Company's
principal offices in 1998. In addition, the Company incurred approximately
$119,000 in fees and travel costs in connection with its recruitment of
additional sales personnel and other executive officers.

Merger-Related Expenses

         Merger-related expenses for the nine months ended September 30, 1999
were $0.9 million or 3.1% as a percentage of revenues. These expenses relate
to the termination of the Company's proposed acquisition of R Systems, Inc.
described above and are non-recurring in nature.

Interest Income (Expense) Net

         Interest income for the first nine months of 1999 was $396,000,
compared to interest income of $474,000 for the first nine months of 1998. The
decrease resulted from a reduction in the amount of net proceeds of the
Company's 1997 initial public offering available for investment.

Provision for Income Taxes

         The Company's effective tax rate was 43.2% for the nine months ended
September 30, 1999 compared to 40.3% for the nine months ended September 30,
1998.


LIQUIDITY AND CAPITAL RESOURCES

         In November 1997, the Company generated net proceeds of approximately
$13.2 million from its underwritten initial public offering of 1,500,000 shares
of Common Stock (the "Offering"). The Company used approximately $775,000 of the
net proceeds of the Offering to repay its outstanding indebtedness under a
$1,000,000 Committed Line of Credit from PNC Bank, National Association (the
"Line of Credit"). The Company also has used a portion of the net proceeds of
the Offering for general corporate purposes and intends to use a portion of such
net proceeds for the capital expenditures described below.

         The Company's principal uses of cash have been to fund receivables and
other working capital, reflecting the Company's growth. Net cash provided by
operating activities was $1,002,000 for the first nine months of 1999 compared
to net cash used by operating activities of $187,000 for the same period in
1998. Because the Company had no immediate plans to utilize its Line of Credit,
the Company elected not to renew the facility in August 1999.

         Capital expenditures for the first nine months of 1999 and 1998 were
$419,000 and $1,120,000 respectively. The Company intends to use approximately
$2.0 million of its available cash to expand its existing operations, including
approximately $1.2 million for the eventual expansion of the Company's
recruiting and training center in India. The initial phase of the center was
placed in operation in the fall of 1998 (including the purchase of hardware and
software with respect thereto). Because the Company currently has a sufficient
supply of IT professionals awaiting deployment, as well as a shift in the
Company's strategic focus in favor of domestic sales growth, the Company has
deferred previously disclosed plans to establish offshore recruiting offices in
various foreign locations. Except as set forth above, the Company currently has
no material commitments for capital expenditures.

         The Company currently anticipates that the remaining proceeds from the
Offering, together with the existing sources of liquidity and cash generated
from operations, will be sufficient to satisfy its cash needs at least through
the next twelve months.

                                       11
<PAGE>   12

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

         In June 1999, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 136, "Transfers of Assets to a
Not-for-Profit Organization or Charitable Trust That Raises or Holds
Contributions for Others" (SFAS No. 136). SFAS No. 136 establishes reporting
standards for transactions in which an entity - the donor - makes a contribution
by transferring assets to a not-for-profit organization or charitable trust -
the recipient organization- that accepts and agrees to use those assets on
behalf of or transfer those assets, the return on investment of those assets or
both to another entity- the beneficiary- that is specified by the donor. SFAS No
136 requires that a specified beneficiary recognize its rights to the assets
held by a recipient organization as an asset unless the donor has explicitly
granted the recipient organization variance power. If the beneficiary and the
recipient organization are financially interrelated organizations, the
beneficiary is required to recognize its interest in the net assets of the
recipient organization and adjust that interest in its share of the change in
net assets of the recipient organization. SFAS No. 136 is effective for fiscal
years beginning after December 15, 1999.

         The Company will adopt SFAS No 136 in the year 2000.

YEAR 2000 COMPLIANCE

         The "Year 2000" issue concerns the potential exposures related to the
automated generation of business and financial misinformation resulting from the
use of computer programs which have been written using two digits rather than
four, to define the applicable year of business transactions. The Company has
evaluated its principal staffing and financial systems, which are licensed from
and maintained by third party software development companies, and believes that
such systems are Year 2000 compliant. The Company is currently in the process of
implementing additional and new staffing and financial systems which management
expects to be Year 2000 compliant. Management expects to achieve year 2000
compliance by upgrading the software licensed from third parties, internal
testing and recording and applying year 2000 patches as may be relevant before
December 1, 1999. The Company's telephone, voice mail and e-mail systems, which
are its principal non-IT systems, have also been determined to be Year 2000
compliant. The Company's total costs with respect to Year 2000 compliance as of
September 30, 1999 have not been material. Because UBICS has determined that all
of its principal internal systems are Year 2000 compliant, management does not
anticipate that any remaining costs associated with assuring that its internal
systems will be Year 2000 compliant will be material to its business, operations
or financial condition.

         UBICS believes that the reasonably likely worst case scenario involving
Year 2000 with respect to each material IT and non-IT system involves a failure
resulting from Year 2000 problems affecting service providers such as utilities,
which could render UBICS's own internal systems and those of all other
businesses served by such providers inoperable for an extended period of time.
If utilities or other service providers encounter such problems, the ability of
UBICS to conduct business may be materially adversely affected until such
problems are resolved. Further, if UBICS's clients experience similar disruption
in utilities and other essential services, they may elect to postpone and cancel
IT projects involving UBICS until such disruptions are resolved, which could
materially adversely affect UBICS's results of operations or financial
condition. UBICS currently does not have contingency plans with respect to such
failures but will continue to evaluate whether such plans might be necessary
with respect to particular third party providers based on the status of its
assessment of third party readiness described below.

                                       12
<PAGE>   13

         The Company is conducting an assessment to determine the preparedness
level of its significant clients, vendors, and other service providers with
respect to Year 2000 issues and the subsequent impact on the Company. Management
has identified the following potentially significant risks relating to the Year
2000:

o        If a significant client of the Company encounters Year 2000 problems,
         such client could be forced to reduce its expenditures on IT projects
         involving the Company's IT professionals, either because the client
         would have to divert resources from such projects to address its Year
         2000 problem or because of the adverse financial effects of such
         problems on the client. UBICS is attempting to determine its potential
         exposure to such risk through its assessment of third party
         preparedness, however it may not be successful in fully evaluating such
         risks.

o        Clients which incur significant costs in achieving Year 2000 compliance
         could be forced or could elect to reallocate funds being used for
         projects involving the Company's IT professionals to address Year 2000
         compliance issues. In addition, as a result of uncertainties relating
         to the completion of Year 2000 compliance work as companies achieve
         such compliance, there may be changes in normal buying patterns for IT
         services by companies, which could make it difficult to forecast demand
         for IT services. The Company does not believe its current projects will
         be adversely affected by problems its clients may encounter resulting
         from lack of Year 2000 compliance because most such projects will be
         completed before the Year 2000. However, reallocation of IT-related
         expenditures by a client in connection with achieving Year 2000
         compliance could affect the duration of the Company's existing projects
         with such client or the availability to the Company of future IT
         projects.

o        If UBICS's service providers, such as utilities and courier delivery
         service providers, encounter Year 2000 problems, UBICS's ability to
         conduct business could experience short-term disruptions which could
         have a material adverse impact on results of operations.

o        A small number of the Company's IT professionals perform Year 2000 work
         for certain clients as an adjunct to other projects performed for such
         clients. The Company has a $5 million professional liability insurance
         policy, which covers, among other things, Year 2000 compliance work
         performed by UBICS at client sites. Some of the Company's clients have
         requested the Company to warrant that the services performed by the
         Company's IT professionals are Year 2000 compliant. The Company is
         evaluating such requests from clients to determine whether and the
         extent to which it is appropriate for UBICS to make such
         certifications.

         The Company's review of client and vendor readiness with respect to
Year 2000 has been completed. As of September 30, 1999, approximately 10% of the
third parties contacted by UBICS had certified as to Year 2000 compliance,
approximately 35% had indicated that they expected to be compliant by a date
prior to the end of 1999, and approximately 55% either had not responded or had
indicated that they would not certify as to their Year 2000 status. The Company
currently does not believe that a contingency plan to help limit the impact of
potentially significant failures of clients, vendors or other third parties with
respect to Year 2000 compliance will be needed since most of its key clients and
vendors have indicated that they expect to be compliant. The Company will
continue to monitor the situation, however, and may incur internal staff costs
and related expenses if the need arises but is unable to form an estimate of
such costs at this time.

U.S. REGULATION OF IMMIGRATION

         The Company's services historically have been performed in the U.S. and
the Company has recruited most of its IT professionals outside the U.S. The
Company's business, therefore, is subject to U.S. immigration laws. Over 90% of
the Company's IT professionals are citizens of other countries, with most of
those in the U.S. working under H-1B temporary work permits. There is a limit on
the number of new H-1B permits that may be approved in any U.S. government
fiscal year. In the federal fiscal year ended September 30, 1997, this

                                       13
<PAGE>   14

limit was reached in August and in the federal fiscal year ended September 30,
1998, this limit was reached in May. The inability to obtain additional H-1B
permits during the federal fiscal year ended September 30, 1998 resulted in
increased use of subcontractor professionals by UBICS.

         During 1998 the U.S. government increased the limit on the number of
new H-1B permits to 115,000 for each of the 1999 and 2000 federal fiscal years,
and to 107,500 for fiscal year 2001 before reverting to existing limits from
fiscal year 2002 onwards. Despite the increase in the limit, in the federal
fiscal year ended September 30, 1999, this limit was reached in June 1999. The
U.S. government, in October 1999, announced that the Immigration and
Naturalization Service granted between 10,000 and 20,000 more H-1B permits than
the previously stated limit for the 1999 federal fiscal year. If this excess
number of permits is applied towards the limit for the 2000 federal fiscal year,
then such limit may be reached earlier than in prior years.

         If in the current federal fiscal year or in future years the limit on
H-1B permits is reached, the Company may again be unable to obtain enough H-1B
permits to meet its requirements. If the Company were unable to obtain H-1B
permits for its IT professionals in sufficient quantities or at a sufficient
rate, the Company's business, operating results and financial condition could be
materially adversely affected.

         The U.S. government in connection with its increase in the limit on
H-1B permits, also imposed a fee to be paid by companies for new approvals and
for renewals. UBICS does not anticipate that the imposition of such fees will
have a material adverse impact on its results of operations.

         Congress and administrative agencies with jurisdiction over immigration
matters have periodically expressed concerns over the levels of legal and
illegal immigration into the U.S. These concerns have often resulted in proposed
legislation, rules and regulations aimed at reducing the number of work permits
that may be issued. Any changes in such laws making it more difficult to hire
foreign nationals or limiting the ability of the Company to retain foreign
employees could require the Company to incur additional unexpected labor costs
and expenses. Any such restrictions or limitations on the Company's hiring
practices could have a material adverse effect on the Company's business,
operating result and financial condition.

ITEM 3. QUANTITIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The Company currently does not invest excess funds in derivative
financial instruments or other market risk sensitive instruments for the purpose
of managing its foreign currency exchange rate risk or for any other purpose.

                                       14
<PAGE>   15



PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings -- Not Applicable

Item 2.  Changes in Securities and Use of Proceeds -- Not applicable

          (a)     Not applicable.

          (b)     Not applicable.

          (c)     Not applicable.

          (d)     The following information relates to the Company's use of the
                  net proceeds of the Company's initial public offering (the
                  "Offering"):

                  On October 27, 1997, the Company's registration statement on
                  Form S-1, No. 333-35171, became effective. The Company sold a
                  total of 1,500,000 shares of common stock, par value $.01 per
                  share at a price per share of $10.00 pursuant to the Offering.
                  The Offering, which was managed by Parker/Hunter Incorporated,
                  as lead underwriter, and Scott & Stringfellow, Inc., as
                  co-manager, closed on November 4, 1997.

                  The following table summarizes the expenses incurred for the
                  Company's account in connection with the Offering:

<TABLE>
<CAPTION>

                              <S>                                             <C>
                              Underwriting discounts                          $1,050,000
                              Finder's fees                                          --
                              Expenses paid to or for underwriters                   --
                              Other expenses                                     775,000
                                                                              ----------
                              TOTAL                                           $1,825,000
</TABLE>

                  The following table summarizes the amount of net offering
                  proceeds to the Company ($13,175,000) used for the purposes
                  listed below:

<TABLE>
<CAPTION>
                              <S>                                             <C>
                              Construction of plant, building                 $        0
                                and facilities
                              Purchase and installation of machinery           1,768,000
                                and equipment
                              Acquisition of other business(es)                        0
                              Repayment of indebtedness                          775,000
                              Working capital                                    772,000
                              Temporary investments*                           9,860,000
                              Other purposes                                           0
                                                                              ----------
                              Total                                          $13,175,000
</TABLE>
------------------
*Approximately $5,000,000 of such amount is currently invested in a Prudential
money market mutual fund with the balance invested in certificates of deposit
with PNC Bank.

                                       15
<PAGE>   16

Item 3.  Defaults Upon Senior Securities -- Not Applicable

Item 4.  Submission of Matters to a Vote of Security Holders -- Not Applicable

Item 5.  Other Information -- Not Applicable

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:

         3.1      Amended and Restated Certificate of Incorporation of UBICS,
                  Inc. (1)
         3.2      Amended and Restated By-Laws of UBICS, Inc. (1)
         10.1     UBICS, Inc. 1997 Stock Option Plan(1)
         10.2     Noncompetition Agreement dated October 27, 1997 among the
                  Company, Vijay Mallya and UB Information Consultancy Services
                  Ltd.(2)
         10.3     Employment Agreement dated September 1, 1997 between the
                  Company and Vijay Mallya(2)
         10.4     Employment Agreement dated October 1, 1997 between the Company
                  and Manohar B. Hira(2)
         10.5     Employment Agreement dated September 1, 1997 between the
                  Company and O'Neil Nalavadi(2)
         10.6     Employment Agreement dated September 1, 1997 between the
                  Company and Babu Srinivas(2)
         10.7     Employment Agreement dated September 1, 1999 between the
                  Company and Dennis M. Stocker
         10.8     Agreement of Severance, Waiver and Release dated March 18,
                  1999 between the Company and Manohar B. Hira (3)
         10.9     Services Agreement dated October 27, 1997 among the Company,
                  Vijay Mallya and United Breweries Limited(2)
         10.10    Form of Director Indemnification Agreement(2)
         10.11    Form of Sublease and Consent among the Company, Marin
                  Executive Park and United Breweries of America, Inc.(2)
         10.12    Noncompetition Agreement dated October 27, 1997 among the
                  Company, Vijay Mallya and United Breweries Limited(2)
         10.13    Noncompetition Agreement dated October 27, 1997 among the
                  Company, Vijay Mallya and UB International Limited(2)
         10.14    Services Agreement dated October 27, 1997 among the Company,
                  Vijay Mallya and UB International Limited(2)
         10.15    Lease Agreement dated June 30, 1998 between the Company and
                  Stealth Technology Associates (4)
         27       Financial Data Schedule

-------------------
(1)      Incorporated by reference to the Company's Registration Statement on
         Form S-1, No. 333-35171, filed September 8, 1997.

(2)      Incorporated by reference to Post-Effective Amendment No. 1 to the
         Company's Registration Statement on Form S-1, No. 333-35171, filed
         October 29, 1997.

(3)      Incorporated by reference to the Company's Annual Report on Form 10-K
         for the year ended December 31, 1998.

                                       16
<PAGE>   17

(4)      Incorporated by reference to the Company's Quarterly Report on Form
         10-Q for the quarter ended September 30, 1998.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed for the three months ended September
         30, 1999.

                                       17
<PAGE>   18

                                   SIGNATURES

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

                                   UBICS, Inc.
                                   (Registrant)

Date: November 15, 1999

                                   By: /s/ Manohar B. Hira
                                       ------------------------
                                           Manohar B. Hira
                                           President

                                   By: /s/ O'Neil Nalavadi
                                       ------------------------
                                           O'Neil Nalavadi
                                           Senior Vice President and Chief
                                                  Financial Officer

                                       18
<PAGE>   19

                                  EXHIBIT INDEX

No.      Description                                                        Page

3.1      Amended and Restated Certificate of Incorporation of UBICS, Inc. (1)

3.2      Amended and Restated By-Laws of UBICS, Inc.(1)

10.1     UBICS, Inc. 1997 Stock Option Plan(1)

10.2     Noncompetition Agreement dated October 27, 1997 among the Company,
         Vijay Mallya and UB Information Consultancy Services Ltd.(2)

10.3     Employment Agreement dated September 1, 1997 between the Company and
         Vijay Mallya(2)

10.4     Employment Agreement dated October 1, 1997 between the Company and
         Manohar B. Hira(2)

10.5     Employment Agreement dated September 1, 1997 between the Company and
         O'Neil Nalavadi(2)

10.6     Employment Agreement dated September 1, 1997 between the Company and
         Babu Srinivas(2)

10.7     Employment Agreement dated September 1, 1999 between the Company and
         Dennis M. Stocker

10.8     Agreement of Severance, Waiver and Release dated March 18, 1999 between
         the Company and Manohar B. Hira (3)

10.9     Services Agreement dated October 27, 1997 among the Company, Vijay
         Mallya and United Breweries Limited(2)

10.10    Form of Director Indemnification Agreement(2)

10.11    Form of Sublease and Consent among the Company, Marin Executive Park
         and United Breweries of America, Inc.(2)

10.12    Noncompetition Agreement dated October 27, 1997 among the Company,
         Vijay Mallya and United Breweries Limited(2)

10.13    Noncompetition Agreement dated October 27, 1997 among the Company,
         Vijay Mallya and UB International Limited(2)

10.14    Services Agreement dated October 27, 1997 among the Company, Vijay
         Mallya and UB International Limited(2)

10.15    Lease Agreement dated June 30, 1998 between the Company and Stealth
         Technology Associates(4)

27       Financial Data Schedule

------------------
(1)      Incorporated by reference to the Company's Registration Statement on
         Form S-1, No. 333-35171, filed September 8, 1997.

(2)      Incorporated by reference to Post-Effective Amendment No. 1 to the
         Company's Registration Statement on Form S-1, No. 333-35171, filed
         October 29, 1997.

(3)      Incorporated by reference to the Company's Annual Report on Form 10-K
         for the year ended December 31, 1998.

(4)      Incorporated by reference to the Company's Quarterly Report on Form
         10-Q for the quarter ended September 20, 1998.

                                       19