<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10-Q/A


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                 FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2003

                         Commission file number 0-20008


                             FORGENT NETWORKS, INC.

A DELAWARE CORPORATION                            IRS EMPLOYER ID NO. 74-2415696


                               108 WILD BASIN ROAD
                               AUSTIN, TEXAS 78746
                                 (512) 437-2700


The registrant has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports) and
has been subject to such filing requirements for the past 90 days. The
registrant is not an accelerated filer as defined in Rule 12b-2 of the Act.

At March 4, 2003 the registrant had outstanding 24,690,544 shares of its Common
Stock, $0.01 par value.
<PAGE>
                             FORGENT NETWORKS, INC.
                           CONSOLIDATED BALANCE SHEETS
                  (Amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                              JANUARY 31,       JULY 31,
                                                                 2003            2002
                                                                 ----            ----
                                                              (unaudited)
<S>                                                           <C>             <C>
ASSETS
Current assets:
   Cash and equivalents                                        $  17,383       $  17,237
   Short-term investments                                          1,216           2,715
   Accounts receivable, net of allowance for doubtful
     accounts of $975 and $815 at January 31, 2003 and
     July 31, 2002                                                 4,057           5,390

   Notes receivable, net of reserve of $521 and $967 at
     January 31, 2003 and July 31, 2002                               94             189
   Inventories                                                       656             563
   Prepaid expenses and other current assets                         997             609
                                                               ---------       ---------
        Total current assets                                      24,403          26,703
Property and equipment, net                                        5,505           5,734
Goodwill, net                                                     15,303          15,833
Capitalized software, net                                          4,460           3,537
Other assets                                                         336             415
                                                               ---------       ---------
                                                               $  50,007       $  52,222
                                                               =========       =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                            $   3,519       $   5,687
   Accrued compensation and benefits                               1,484           1,264
   Other accrued liabilities                                       1,374           2,049
   Notes payable, current portion                                    233             899
   Deferred revenue                                                7,114           7,047
                                                               ---------       ---------
      Total current liabilities                                   13,724          16,946

Long-term liabilities:
   Deferred revenue                                                  815           1,015
   Other long-term obligations                                     1,601           1,983
                                                               ---------       ---------
      Total long-term liabilities                                  2,416           2,998

Stockholders' equity:
   Preferred stock, $.01 par value; 10,000
      Authorized; none issued or outstanding                          --              --
   Common stock, $.01 par value; 40,00 authorized; 25,893
      and 25,755 shares issued; 24,663 and 24,880 shares
      outstanding at January 31, 2003 and July 31, 2002,
      respectively                                                   258             257
   Treasury stock, 1,230 and 875 issued at January 31,
      2003 and July 31, 2002, respectively                        (3,500)         (2,857)
   Additional paid-in capital                                    263,505         263,334
   Accumulated deficit                                          (225,771)       (228,011)
   Unearned compensation                                             (89)           (227)
   Accumulated other comprehensive income                           (536)           (218)
                                                               ---------       ---------
      Total stockholders' equity                                  33,867          32,278
                                                               $  50,007       $  52,222
                                                               =========       =========
</TABLE>

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


                                       2
<PAGE>
                             FORGENT NETWORKS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                           FOR THE                      FOR THE
                                                     THREE MONTHS ENDED            SIX MONTHS ENDED
                                                         JANUARY 31,                  JANUARY 31,
                                                    2003           2002           2003           2002
                                                    ----           ----           ----           ----
                                                         (UNAUDITED)                  (UNAUDITED)
<S>                                               <C>            <C>            <C>            <C>
REVENUES:
  Software and professional services              $  1,031       $    375       $  2,245       $    457
  Intellectual property licensing                    7,255             --         13,468             --
  Services and other                                 4,215          7,643          9,319         14,229
                                                  --------       --------       --------       --------
    Total revenues                                  12,501          8,018         25,032         14,686
                                                  ========       ========       ========       ========

COST OF SALES:
  Software and professional services                   740          2,802          1,473          2,995
  Intellectual property licensing                    3,628             --          6,734             --
  Services and other                                 2,713          4,454          6,219          8,597
                                                  --------       --------       --------       --------
    Total cost of sales                              7,081          7,256         14,426         11,592
                                                  ========       ========       ========       ========

GROSS MARGIN                                         5,420            762         10,606          3,094
                                                  --------       --------       --------       --------

OPERATING EXPENSE:
  Selling, general and administrative                3,677          2,420          7,355          5,613
  Research and development                             711            681          1,883          1,458
  Impairment of assets                                  --             --           (499)            --
  Restructuring expense                                 --             --             --            818
                                                  --------       --------       --------       --------
    Total operating expenses                         4,388          3,101          8,739          7,889
                                                  ========       ========       ========       ========

INCOME (LOSS) FROM OPERATIONS                        1,032         (2,339)         1,867         (4,795)
                                                  --------       --------       --------       --------

OTHER INCOME (EXPENSE):
  Interest income                                       42             71            139            183
  Gain on investment                                    --             --             --          1,670
  Interest expense and other                           265           (117)           277            (64)
                                                  --------       --------       --------       --------
    TOTAL OTHER INCOME (EXPENSE)                       307            (46)           416          1,789
                                                  ========       ========       ========       ========

INCOME (LOSS) FROM CONTINUING
  OPERATIONS, BEFORE INCOME TAXES                    1,339         (2,385)         2,283         (3,006)
    Provision for income taxes                         (24)            --            (43)            --
INCOME (LOSS) FROM CONTINUING OPERATIONS             1,315         (2,385)         2,240         (3,006)

  Loss from discontinued operations,
    net of income taxes                                 --         (5,913)            --         (7,861)
  Loss on disposal, net of income taxes                 --           (255)            --           (255)
                                                  --------       --------       --------       --------
LOSS FROM DISCONTINUED OPERATIONS,
  NET OF INCOME TAXES                                   --         (6,168)            --         (8,116)
                                                  --------       --------       --------       --------
NET INCOME (LOSS)                                 $  1,315       $ (8,553)      $  2,240       $(11,122)
                                                  ========       ========       ========       ========

BASIC AND DILUTED INCOME (LOSS) PER SHARE:
  Income (loss) from continuing operations        $   0.05       $  (0.09)      $   0.09       $  (0.12)
                                                  ========       ========       ========       ========

  Income (loss) from discontinued operations      $   0.00       $  (0.25)      $   0.00       $  (0.33)
                                                  ========       ========       ========       ========
  Net income (loss)                               $   0.05       $  (0.34)      $   0.09       $  (0.45)
                                                  ========       ========       ========       ========
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic                                             24,638         24,802         24,725         24,829
  Diluted                                           25,030         24,802         25,272         24,829
</TABLE>

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


                                       3
<PAGE>
                             FORGENT NETWORKS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                       FOR THE SIX MONTHS ENDED
                                                              JANUARY 31,
                                                              -----------
                                                         2003           2002
                                                         ----           ----
                                                              (UNAUDITED)
<S>                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Income (loss) from continuing operations             $  2,240       $ (3,006)
  Adjustments to reconcile net income (loss)
    to net cash provided by operations:
      Depreciation and amortization                       1,877          3,015
      Amortization of unearned compensation                 180             51
      Foreign currency translation gain                    (335)            --
      (Gain) loss on sale of fixed assets                   (31)            34
      Asset impairment                                     (499)         2,381
      Sale of accounts receivable                            --          4,064
      Decrease in accounts receivable                     1,149          4,118
      Decrease in notes receivable                           95             --
      Increase in inventories                               (93)          (303)
      (Increase) decrease in prepaid expenses
        and other current assets                           (388)           256
      Decrease in accounts payable                       (1,649)        (1,544)
      Decrease in other accrued liabilities                (624)        (2,177)
      Decrease in deferred revenues                        (110)          (268)
                                                       --------       --------
        Net cash provided by operating activities         1,812          6,621
                                                       --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net sales of short-term investments                     1,499          1,591
  Net purchases of property and equipment                  (733)          (476)
  Collection of notes receivable                             79            241
  Increase in capitalized software                       (1,644)        (1,933)
  Increase in other assets                                  (45)            --
                                                       --------       --------
    Net cash used in investing activities                  (844)          (577)
                                                       --------       --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from issuance of stock                       139            712
  Purchase of treasury stock                               (651)        (1,377)
  Proceeds from notes payable                               119            498
  Payments on notes payable                                (446)          (309)
                                                       --------       --------
    Net cash used in financing activities                  (839)          (476)
                                                       --------       --------
CASH FLOWS FROM DISCONTINUED OPERATIONS:
  Net cash provided by discontinued operations               --         (4,224)
                                                       --------       --------
Effect of translation exchange rates on cash                 17            200
                                                       --------       --------
Net increase in cash and equivalents                        146          1,544
Cash and equivalents at beginning of period              17,237         15,848
Cash and equivalents at end of period                  $ 17,383       $ 17,392
                                                       ========       ========
</TABLE>

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


                                       4
<PAGE>
                             FORGENT NETWORKS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           (Amounts in thousands, except per share and employee data
                             unless otherwise noted)


NOTE 1 - GENERAL AND BASIS OF FINANCIAL STATEMENTS

      The accompanying unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission and accordingly, do not include all information and
footnotes required under accounting principals generally accepted in the United
States for complete financial statements. In the opinion of management, these
interim financial statements contain all adjustments, consisting of normal,
recurring adjustments, necessary for a fair presentation of the financial
position of Forgent Networks, Inc. ("Forgent") as of January 31, 2003 and July
31, 2002 and the results of operations for the three and six months ended
January 31, 2003 and January 31, 2002, and the cash flows for the six months
ended January 31, 2003 and January 31, 2002. The results for interim periods are
not necessarily indicative of results for a full fiscal year.

      Please note that for comparability purposes a reclassification was made on
the Company's originally filed Form 10-K for the fiscal year ended July 31,
2002, which is reflected in the Company's Form 10-K/A-2 for the same fiscal
period, in the Company's Form 10-Q/A for the fiscal quarter ended October 31,
2002, as well as in this Form 10-Q/A for the fiscal quarter ended January 31,
2003.

NOTE 2 - BUSINESS DISPOSITION

      On January 6, 2003, Forgent signed a definitive agreement to sell the
operations and substantially all of the assets of its videoconferencing hardware
services business, based in King of Prussia, Pennsylvania, to an affiliate of
Gores Technology Group ("Gores"), a privately held international acquisition and
management firm, in order to focus solely on growing its software and
professional services and its intellectual property licensing businesses. The
acquisition agreement calls for consideration of $10.0 million in cash and the
assumption of approximately $8.0 million in liabilities, subject to adjustments.
Approximately 84% of the liabilities to be assumed represents deferred revenue
and the remaining 16% represents certain identified accounts payable and capital
lease obligations. The assets sold include accounts receivable, inventory, fixed
assets, and certain prepaid assets. The transaction is subject to certain
regulatory filings, approval by the Company's shareholders, and other customary
conditions. Forgent and Gores will also execute co-marketing and reseller
agreements, allowing both companies to provide software, software-related
services and hardware services to their customers and prospects.

      The divestiture is a strategic move that is designed to enable Forgent to
focus on growing its software and professional services and its intellectual
property licensing businesses, increasing its cash balances, improving its gross
margins and reducing its operating expenses. Customers of Forgent's
videoconferencing hardware services business should also benefit from the
divestiture by having a service provider focused on services as its primary
business. Management anticipates finalizing the sale during the fourth fiscal
quarter of 2003. Management anticipates that Gores will retain the approximately
70 employees, currently employed by Forgent's videoconferencing hardware
services business. Once the sale of the videoconferencing hardware services
business unit is finalized, Forgent will employ approximately 90 employees.

NOTE 3 - DISCONTINUED OPERATIONS

      In April 2002, Forgent sold inventory and certain other assets related to
its integration business to SPL Integrated Solutions ("SPL"), a leading
nationwide integrator that designs and installs large-display videoconferencing
systems and fully integrated multimedia systems for corporations, educational
institutions and government agencies. SPL currently provides all of the
integration services for Forgent and Forgent became the exclusive service
provider for SPL, thus allowing each company to strengthen and to significantly
expand its individual core services while complementing each others' product
offerings. As a result of the sale of its integration business, Forgent received
$150 in cash and a $282 note receivable from SPL. SPL absorbed 15 members of
Forgent's Professional Services Integration team and re-located to Forgent's
facility in King of Prussia, Pennsylvania, where the combined team of engineers
and technicians manage and execute the delivery of audio-video system
integration and support. The assets related to the integration business were
sold for approximately their net book value and thus an immaterial amount of
gain was recorded during the third quarter of fiscal 2002. The sale


                                       5
<PAGE>
                             FORGENT NETWORKS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           (Amounts in thousands, except per share and employee data
                             unless otherwise noted)


allowed Forgent to focus its strengths and resources on growing its software
business while still providing multimedia systems to its customers through SPL.
As of January 31, 2003, the balance on the note receivable from SPL was $94.

      After receiving approval from the Company's shareholders during its 2001
annual meeting, Forgent finalized the sale of its Products business unit,
including the VTEL name, on January 23, 2002 in order to devote its energies and
resources to the development of Forgent's software business. The sale of the
operations and substantially all of the assets used in the Products business
unit was made to VTEL Products Corporation ("VTEL"), a privately held company
created by the former Vice-President of Manufacturing of the Products business
unit and two other senior management members of the Products business unit. As a
result, the Company received cash of $500, a 90-day subordinated promissory
note, bearing interest at an annual rate of five percent, for $967, a 5-year
subordinated promissory note, bearing interest at an annual rate of five
percent, for $5,000 and 1,045 shares of common stock, par value $0.01 per share,
representing 19.9% of the new company's fully diluted equity. Additionally,
Forgent and VTEL entered into a general license agreement, in which VTEL was
granted certain non-exclusive rights in and to certain patents, software,
proprietary know-how, and information of the Company that was used in the daily
operations of the Products business unit. The group of management who purchased
the products division (now referred to as VTEL) put up $500 of their own money
at the closing. In addition, VTEL also received a $750 line of credit from a
bank, which was not guaranteed by Forgent. The facilities lease was signed over
to VTEL, which was accepted by the landlord with no further obligations by
Forgent. Furthermore, Forgent did not remain contingently liable for performance
on existing contracts or future contracts entered into by the newly formed
entity. The Company does not have any continuing involvement in the go-forward
operations of VTEL. It does not have veto power or any means to exercise
influence over the operations of that company. The Company has made no
guarantees with respect to any business matters as they relate to VTEL nor are
there any situations whereby the Company would be required to reassume any
obligations of VTEL. Due to uncertainties regarding VTEL's future business,
Forgent fully reserved its equity interest in VTEL.

      VTEL did not remit payment on its first subordinated promissory note due
in April 2002, as stipulated in the sales agreement, and management is currently
renegotiating the terms of the note. As a result of this default and due to the
uncertainty in collecting the two outstanding notes from VTEL, the Company
recorded a $5,967 charge for the reserve of both notes from VTEL during the
third fiscal quarter of 2002. However, management is continuing its efforts on
collecting these outstanding notes receivables despite the low probability of
collection due to VTEL's current financial condition. During the quarter ended
October 31, 2002, management agreed with VTEL's management to offset Forgent's
accounts payable to VTEL with its accounts receivable and notes receivable from
VTEL. The net $499 Forgent liability was partially offset with the note in
default, thus relieving $499 of the reserve on the notes receivable. This relief
was accounted for as part of continuing operations on the Company's consolidated
statement of operations. No cash was exchanged with this transaction.

      As a result of the sales of the products and integration businesses, the
Company has presented these businesses as discontinued operations on the
accompanying consolidated financial statements. For the three and six months
ended January 31, 2002, the Company recorded a $6,168 and $8,116 loss for its
discontinued operations, respectively. Since the products and integration
businesses were sold during fiscal 2002, no income or losses were recorded for
discontinued operations for the three and six months ended January 31, 2003.

NOTE 4 - ACQUISITIONS

      As approved by each company's board of directors, Forgent acquired certain
assets and liabilities in a purchase business combination structured as an asset
purchase of Global Scheduling Solutions, Inc., a global provider of enterprise
conference room scheduling and resource management solutions, on June 4, 2002.

      This business combination was completed in order for Forgent to expand the
quality and reach of its existing enterprise software sales and marketing
efforts and to acquire an enterprise scheduling software solution to complement
its existing Video Network Platform solution. Forgent continues to market Global
Scheduling


                                       6
<PAGE>
                             FORGENT NETWORKS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           (Amounts in thousands, except per share and employee data
                             unless otherwise noted)


Solutions, Inc.'s flagship product, Global Scheduling System, an industry
leading web-based application that combines the management of large-scale
meeting environments and all necessary resources and services while reducing the
cost and time associated with such management. As a result of the acquisition,
Forgent becomes the only vendor that can provide complete one-stop video network
scheduling, launching, monitoring and management solution.

      Forgent agreed to pay Global Scheduling Solutions, Inc. a combination of
$3,750 in cash, $250 held in escrow for representations and warrants, and $700
tied to certain future contingent "earn-out" payments and the assumption of
certain liabilities. The $700 liability was dependent upon the purchased assets
generating a certain level of net revenue between April 2002 and September 2002.
The acquisition was accounted for as a purchase of assets. Accordingly, the
purchase price was allocated to tangible and identifiable intangible assets
acquired based on their estimated fair values at the date of acquisition.
Approximately $5,229 was recorded as goodwill, which represents the excess of
total cost over tangible and intangible assets acquired. Forgent continues to
market Global Scheduling Solutions, Inc.'s acquired flagship product, Global
Scheduling System, an industry leading web-based application that combines the
management of large-scale meeting environments and all necessary resources and
services while reducing the cost and time associated with such management. As a
result of the acquisition, Forgent became a leading vendor that provides
complete one-stop video network scheduling, launching, monitoring and management
solution.

      During the three months ended January 31, 2003, management settled the
contingent liability and paid Global Scheduling Solutions, Inc. $375. As part of
the settlement, the $250 held in escrow was relieved. Therefore, the related
goodwill was adjusted for the remaining contingent liability of $325 and the
$250 escrow. Additionally, the related goodwill was adjusted for $45 as a result
of finalizing the valuation of the assets acquired and liabilities assumed. As
of January 31, 2003, the Company no longer had any liabilities owed to Global
Scheduling Solutions, Inc.

NOTE 5 - COMPREHENSIVE INCOME (LOSS)

      In accordance with the disclosure requirements of SFAS No. 130, "Reporting
Comprehensive Income", the Company's other comprehensive income (loss) is
comprised of net income (loss), foreign currency translation adjustments and
unrealized gains and losses on short-term investments held as available-for-sale
securities. Comprehensive income for the three and six months ended January 31,
2003 was $1,303 and $2,458, respectively, and comprehensive loss for the three
and six months ended January 31, 2002 was $8,242 and $12,559, respectively.

NOTE 6 - RESTRUCTURING ACTIVITIES

      In August 2001, the Company restructured its organization, which involved
the termination of 65 employees, or 17% of the workforce, who were assisted with
outplacement support and severance. The reduction affected 16 employees in
Austin, Texas, 30 employees in King of Prussia, Pennsylvania, and 19 employees
in remote and international locations. The restructuring was the result of
eliminating certain business elements that did not contribute to Forgent's
software and professional services and intellectual property licensing
businesses as well as efforts to increase efficiencies and to significantly
reduce administrative costs. All of the employees were terminated and the
Company recorded a one-time charge of $818 in the first quarter of fiscal 2002
for the restructuring. All of the involuntary termination benefits were paid in
fiscal 2002.

NOTE 7 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

      On August 31, 2000 the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives) and for hedging
activities. SFAS No. 133 requires the recognition of all derivatives as either
assets or liabilities on the Consolidated Balance Sheet with changes in fair
value recorded in the Consolidated Statement of Operations.


                                       7
<PAGE>
                             FORGENT NETWORKS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           (Amounts in thousands, except per share and employee data
                             unless otherwise noted)


      The accounting for changes in fair value of a derivative depends upon
whether it has been designated in a hedging relationship and, further, on the
type of hedging relationship pursuant to SFAS No. 133. Changes in the fair value
of derivatives not designated in a hedging relationship are recognized each
period in earnings. Hedging relationships are established pursuant to the
Company's risk management policies, and are initially and regularly evaluated to
determine whether they are expected to be, and have been, highly effective
hedges. If a derivative ceases to be a highly effective hedge, hedge accounting
is discontinued prospectively, and future changes in the fair value of the
derivative is recognized in earnings each period. For derivatives designated as
hedges of the variability of cash flows related to a recognized asset or
liability (cash flow hedges), the effective portion of the change in fair value
of the derivatives is reported in other comprehensive income and reclassified
into earnings in the period in which the hedged items affect earnings. Gains or
losses deferred in accumulated other comprehensive income associated with
terminated derivatives remain in accumulated other comprehensive income until
the hedged items affect earnings. Forecasted transactions designated as the
hedged items in cash flow hedges are regularly evaluated to assess that they
continue to be probable of occurring, and if the forecasted transactions are no
longer probable of occurring, any gain or loss deferred in accumulated other
comprehensive income is recognized in earnings currently.

      The Company utilized derivatives designated as cash flow hedges to ensure
a minimum level of cash flows as related to its investment in the Polycom stock.
The amount of ineffectiveness with respect to these cash flow hedges was not
material. During the three months ended October 31, 2001, the remaining 77
shares of Polycom were sold under a cash flow hedge and $1.7 million was
reclassed from other comprehensive income to earnings.

NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS

      In November 2002, the FASB reached a consensus on EITF Issue No. 00-21,
"Accounting for Revenue Arrangements with Multiple Deliverables" ("Issue
00-21"). Issue 00-21 sets out criteria for whether revenue can be recognized
separately from other deliverables in a multiple deliverable arrangement. The
criteria considers whether the delivered item has stand-alone value to the
customer, whether the fair value of the delivered item can be reliably
determined and the rights of returns for the delivered item. We are required to
adopt Issue 00-21 beginning August 1, 2003. We are currently assessing the
impact of Issue 00-21 on our consolidated financial statements.

      In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS 146 addresses accounting for
restructuring costs and supersedes previous accounting guidance, principally
Emerging Issues Task Force ("EITF") No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires that the
liability associated with exit or disposal activities be recognized when the
liability is incurred. As a contrast under EITF 94-3, a liability for an exit
cost is recognized when a Company commits to an exit plan. SFAS No. 146 also
establishes that a liability should initially be measured and recorded at fair
value. Accordingly, SFAS No. 146 may affect the timing and amount of recognizing
restructuring costs. The Company will adopt the provisions of this statement for
any restructuring activities initiated after December 31, 2002. No such
activities were initiated during the three months ended January 31, 2003.

      In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supercedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," as well as the accounting and
reporting provisions relating to the disposal of a segment of a business
as required by Accounting Principles Board No. 30. Effective August 1,
2002, the Company adopted SFAS No. 144, which did not have a significant
impact on its financial statements.

NOTE 9 - SEGMENT INFORMATION

      As a result of the Company's current business strategy, the Company
operates in three distinct segments: software and professional services,
intellectual property licensing, and services and other. Forgent's software and
professional services business provides customers with video network management
and scheduling software


                                       8
<PAGE>
                             FORGENT NETWORKS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           (Amounts in thousands, except per share and employee data
                             unless otherwise noted)


applications as well as software customization, installation, training, network
consulting, hardware devices, and other comprehensive related services.
Forgent's intellectual property licensing business is currently focused on
generating license revenues relating to the Company's data compression
technology embodied in U.S. Patent No. 4,698,672 and its foreign counterparts.
The Company's services and other segment helps companies maximize their video
communications investments through maintenance, hardware installation, technical
support and resident engineer services.

      The Company evaluates the performance as well as the financial results of
its segments. Included in the segment operating income (loss) is an allocation
of certain corporate operating expenses. The prior year's segment information
has been restated to present the Company's reportable segments as they are
currently defined. The Company does not identify assets or capital expenditures
by reportable segments. Additionally, the Chief Executive Officer and Chief
Financial Officer do not evaluate the business groups based on these criteria.

      The table below presents segment information about revenue from
unaffiliated customers, gross margins, and operating income (loss) for the three
and six months ended January 31, 2003 and 2002:

<TABLE>
<CAPTION>
                                                       SOFTWARE &    INTELLECTUAL
                                                      PROFESSIONAL     PROPERTY       SERVICES
                                                        SERVICES       LICENSING      & OTHER        TOTAL
                                                        --------       ---------      -------        -----
<S>                                                   <C>            <C>              <C>           <C>
FOR THE THREE-MONTH PERIOD ENDING JANUARY 31, 2003
Revenues from unaffiliated customers                    $  1,031       $  7,255       $  4,215      $ 12,501
Gross margin                                                 291          3,627          1,502         5,420
Operating (loss) income                                   (2,501)         3,184            349         1,032

FOR THE THREE-MONTH PERIOD ENDING JANUARY 31, 2002
Revenues from unaffiliated customers                    $    375       $     --       $  7,643      $  8,018
Gross margin                                              (2,427)            --          3,189           762
Operating (loss) income                                   (4,928)          (175)         2,764        (2,339)

FOR THE SIX-MONTH PERIOD ENDING JANUARY 31, 2003
Revenues from unaffiliated customers                    $  2,245       $ 13,468       $  9,319      $ 25,032
Gross margin                                                 772          6,734          3,100        10,606
Operating (loss) income                                   (5,120)         5,674          1,313         1,867

FOR THE SIX-MONTH PERIOD ENDING JANUARY 31, 2002
Revenues from unaffiliated customers                    $    457       $     --       $ 14,229      $ 14,686
Gross margin                                              (2,538)            --          5,632         3,094
Operating (loss) income                                   (7,507)          (288)         3,000        (4,795)
</TABLE>


                                       9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

      The following review of Forgent's financial position as of January 31,
2003 and July 31, 2002 and for the three and six months ended January 31, 2003
and 2002 should be read in conjunction with the Company's 2002 Annual Report on
Form 10-K and 2002 Amended Annual Report on Form 10-K/A-2 filed with the
Securities and Exchange Commission.

RESULTS OF OPERATIONS

      The following table sets forth for the periods indicated the percentage of
total revenues represented by certain items in Forgent's Consolidated Statements
of Operations:

<TABLE>
<CAPTION>
                                                        FOR THE THREE                   FOR THE SIX
                                                         MONTHS ENDED                   MONTHS ENDED
                                                          JANUARY 31,                    JANUARY 31,
                                                          -----------                    -----------
                                                     2003           2002            2003            2002
                                                     ----           ----            ----            ----
<S>                                                  <C>            <C>             <C>             <C>
Software and professional services revenues             8%             5%              9%              3%
Intellectual property licensing revenues               58             --              54              --
Services and other revenues                            34             95              37              97
Gross margin                                           43             10              42              21
Selling, general and administrative                    29             30              29              38
Research and development                                6              8               8              10
Impairment of assets                                   --             --              (2)             --
Restructuring expense                                  --             --              --               6
Total operating expenses                               35             39              35              54
Other income, net                                       2             (1)              2              12
Income (loss) from continuing operations               11            (30)              9             (21)
Income (loss) from discontinued operations             --            (77)             --             (55)
Net income (loss)                                      11%          (107)%             9%            (76)%
</TABLE>

THREE AND SIX MONTHS ENDED JANUARY 31, 2003 AND 2002

      REVENUES. Revenues for the three months ended January 31, 2003 were $12.5
million, an increase of $4.5 million, or 56%, from the $8.0 million reported for
the three months ended January 31, 2002. Revenues for the six months ended
January 31, 2003 were $25.0 million, an increase of $10.3 million, or 70%, from
the $14.7 million reported for the six months ended January 31, 2002.
Consolidated revenues represent the combined revenues including sale of
Forgent's software products, software customization, installation and training,
network consulting, hardware devices, maintenance services, multi-vendor
products and other comprehensive professional services as well as royalties
received from licensing the Company's intellectual property. Consolidated
revenues do not include any revenues from Forgent's discontinued products
business, which manufactured and sold endpoint systems or the Company's
discontinued integration business, which provided customized videoconferencing
solutions.

      Software and professional services revenues increased by $0.6 million, or
175%, to $1.0 million for the quarter ended January 31, 2003 from $0.4 million
for the quarter ended January 31, 2002. Software and professional services
revenues increased by $1.7 million, or 391%, to $2.2 million for the six months
ended January 31, 2003 from $0.5 million for the six months ended January 31,
2002. Software and professional services revenues as a percentage of total
revenues were 8% and 9% for the three and six months ended January 31, 2003,
respectively. Software and professional services revenues as a percentage of
total revenues were 5% and 3% for the three and six months ended January 31,
2002, respectively. Revenues from this line of business include sales of
Forgent's Video Network Platform ("VNP"), Global Scheduling System ("GSS"), and
VideoWorks, which is a bundling of Forgent's software products and may include
hardware devices based on customer preference. Also included are professional
services, and royalties. VNP is an enterprise-class network management software
product designed to manage video, voice and web content on multi-protocol,
multi-vendor networks, and is designed to schedule, monitor and manage
enterprise video networks from a central location, thus improving ease-of-use,
reliability, and manageability of video communications, as well as cost of
ownership. GSS is a web-based scheduling application that helps


                                       10
<PAGE>
organizations plan, execute, and manage their meeting environments effectively
and efficiently. Forgent's professional services include software customization,
installation and training, and network consulting services to evaluate and
analyze customers' networks as well as to test multiple network systems for
manageability, interoperability, and optimum connectivity.

      The $0.6 million increase during the three months ended January 31, 2003
and the $1.7 million increase during the six months ended January 31, 2003 are
due to increases in sales of software licenses during fiscal 2003 as compared to
the related periods in fiscal 2002. Included in the fiscal 2003 revenues are
sales of the GSS software. Since the Company did not acquire GSS until the
fourth quarter of fiscal year 2002, no software revenues were generated by sales
of the GSS software during the three and six months ended January 31, 2002.
However, software and professional services revenues for the three months ended
January 31, 2003 were 15% less than software and professional services revenues
for the three months ended October 31, 2002. Despite a significant increase in
the number of customers interested in the Company's software during the three
months ended January 31, 2003, unpredictable delays in the sales cycle caused
anticipated sales for the second fiscal quarter to be delayed. Management
believes that these delays are attributable to the current lack of spending by
corporate IT departments and the seasonality impact, which caused customer
reviews and approvals to be lengthened. As the Company's sales organization
matures and fully implements its strategies to demonstrate to potential
customers the comprehensive and cost saving solutions Forgent provides,
management expects software and professional services revenues to become more
predictable.

      Intellectual property licensing revenues were $7.3 million and $13.5
million for the three and six months ended January 31, 2003, respectively. No
such revenues were generated during the three and six months ended January 31,
2002. Intellectual property licensing revenues represented 58% and 54% of total
revenues for the three and six months ended January 31, 2003, respectively.
These licensing revenues relate to one-time intellectual property licensing
agreements with companies for Forgent's data compression technology embodied in
U.S. Patent No. 4,698,672 and its foreign counterparts. These licenses were
fully paid during the second fiscal quarter, thus continuing the success of the
Company's developing Patent Licensing Program. The Company does not anticipate
any additional intellectual property revenue from these companies but it
continues to actively seek licenses with other users of its intellectual
property.

      The second fiscal quarter of 2003 marks the fourth consecutive quarter
that Forgent has generated intellectual property licensing revenues. To date,
Forgent has achieved $44.6 million in revenues from these licensing agreements.
Although initially targeting manufacturers of digital cameras, the Company is
currently notifying companies with a much broader field of use. Since January
31, 2003, Forgent has entered into additional license agreements and the Company
continues to actively seek licenses with other users of its intellectual
property. Although there continues to be uncertainty and risk related to the
Company's Patent Licensing Program, management anticipates generating revenues
from its intellectual property licensing segment during the next fiscal quarter.
Forgent's Patent Licensing Program involves risks inherent in licensing
intellectual property, including risks of protracted delays, possible legal
challenges that would lead to disruption or curtailment of the licensing
program, increasing expenditures associated with pursuit of the program, and
other risks that could adversely affect the Company's licensing program.
Additionally, the U.S. patent, which has generated the intellectual property
licensing revenues, expires in October 2006 and its foreign counterparts expire
in September 2007. There can be no assurance that the Company will be able to
continue to effectively license its technology to others.

      Services and other revenues decreased by $3.4 million, or 45%, to $4.2
million for the quarter ended January 31, 2003 from $7.6 million for the quarter
ended January 31, 2002. Services and other revenues decreased by $4.9 million,
or 35%, to $9.3 million for the six months ended January 31, 2003 from $14.2
million for the six months ended January 31, 2002. Services and other revenues
as a percentage of total revenues were 34% and 37% for the three and six months
ended January 31, 2003, respectively. Services and other revenues as a
percentage of total revenues were 95% and 97% for the three and six months ended
January 31, 2002, respectively. Services and other revenues include the
maintenance and support of thousands of endpoints and bridges under maintenance
agreements, as well as sales of a variety of third-party manufactured equipment
through its Multi-Vendor Partners Program ("MVP"). The decline in service
revenues is due to the decrease in the renewal rate of service contracts for
VTEL products. As a vendor-neutral service provider, offering installation,
technical support, and maintenance to a wider array of videoconferencing
devices, including endpoints, multipoint control units, gateways, gatekeepers,
and


                                       11
<PAGE>
traditional network switches and routers, Forgent is offsetting the decrease in
renewal of VTEL contracts with service contracts for other third party products.
However, the service contract sales for third party products have not been
sufficient to recover the decline in service revenues from VTEL contract
renewals. Management anticipates relatively little change in service revenues
during the third fiscal quarter. Forgent will continue to sell equipment through
its MVP program.

      GROSS MARGIN. Gross margins increased $4.6 million, or 611%, to $5.4
million for the three months ended January 31, 2003 from $0.8 million for the
three months ended January 31, 2002. Gross margins increased $7.5 million, or
243%, to $10.6 million for the six months ended January 31, 2003 from $3.1
million for the six months ended January 31, 2002. Gross margin as a percentage
of total revenues was 43% and 42% for the three and six months ended January 31,
2003, respectively, an increase from the gross margin as a percentage of total
revenues of 10% and 21% for the three and six months ended January 31, 2002,
respectively.

      The Company's total gross margins grew significantly during the quarter
ended January 31, 2003 as compared to the quarter ended January 31, 2002 due
primarily to two reasons. First, $3.6 million of the increase resulted from the
patent license agreements signed during the three months ended January 31, 2003.
The cost of sales on the intellectual property licensing business relates to the
legal fees incurred on successfully achieving signed agreements. The current
contingent legal fees are based on 50% of the aggregate recoveries received on
the signed agreements and are paid to a national law firm per the Company's
agreement with this firm. Because of the inherent risks in licensing
intellectual property, including the October 2006 expiration of the U.S. patent
which has generated the licensing revenues and the September 2007 expiration of
the patent's foreign counterparts, gross margins could be adversely affected in
the future if intellectual property licensing revenues decline.

      Second, $2.4 million of the increase resulted from the impairment of
capitalized software development costs associated with the video streaming
technology during the three months ended January 31, 2002. Initially, management
intended to further develop its video streaming technology, which is a server
application with the abilities to create video e-mail programs and to store
streamed video for later non-real time playback as an added feature to its VNP
software. Based upon customer feedback regarding the VNP software during the
second quarter of fiscal 2002, customers did not need these advanced features
but desired fundamental network management applications with more robust device
level support and valued added network level instrumentation for ISDN and IP
networks to enable them to understand and monitor how well their networks were
performing. Therefore, management determined the video streaming technology
would not be used in the development of VNP and impaired $2.4 million of the
related capitalized software development costs, which was included in software
and professional services cost of sales during the three months ended January
31, 2002.

      The increases in gross margins as a result of the intellectual property
licensing agreements in fiscal 2003 and the impairment of the capitalized
software development costs in fiscal 2002 were offset by a $1.7 million decrease
in gross margins from the services and other segment for the three months ended
January 31, 2003 as compared to the three months ended January 31, 2002. The
costs associated with the services and other business are labor intensive and
relatively fixed, which causes gross margins to be directly affected by the
level of revenue generated primarily from new and renewed service contracts. The
$3.4 million decrease in services and other revenues for the quarter ended
January 31, 2003 as compared to the quarter ended January 31, 2002 directly
contributed to the decrease in the gross margins. However, based on the active
management of the videoconferencing hardware services business, gross margins
from the services and other segment increased to 36% during the three months
ended January 31, 2003, as compared to 31% during the previous fiscal quarter.
Forgent will continue to manage the videoconferencing hardware services business
to maintain leveled revenues and gross margins until the divestiture of this
business line is finalized.

      Similarly, of the $7.5 million increase in gross margins for the six
months ended January 31, 2003 as compared to the six months ended January 31,
2002, $6.7 million resulted from patent license agreements during the six months
ended January 31, 2003 and $2.4 million resulted from the impairment of
capitalized software development costs associated with the video streaming
technology during the three months ended January 31, 2002. These increases were
offset by a $2.5 million decrease in gross margins from the services and other
segment for the six months ended January 31, 2003 as compared to the six months
ended January 31, 2002.


                                       12
<PAGE>
      For the three months ended January 31, 2003, approximately 66% of the cost
of sales associated with the software and professional services business
resulted from the amortization of the Company's capitalized software development
costs and compensation. Thus, the cost of sales from this line of business is
relatively fixed, and remained relatively flat compared to the cost of sales
incurred during the first fiscal quarter. Therefore, gross margins from the
software and professional services business is directly affected by the related
revenues generated. As discussed above, software and professional services
revenues slightly declined during the second fiscal quarter as compared to the
first fiscal quarter, which caused a decrease in gross margins. Based on
identified strategies to grow revenues from this line of business, management
anticipates additional sales to generate higher gross margins in absolute terms
and in terms of percentage of revenue.

      SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
("SG&A") expenses increased by $1.3 million, or 52%, to $3.7 million for the
quarter ended January 31, 2003 from $2.4 million for the quarter ended January
31, 2002. SG&A expenses increased by $1.7 million, or 31%, to $7.3 million for
the six months ended January 31, 2003 from $5.6 million for the six months ended
January 31, 2002. SG&A expenses as a percentage of revenues were 29% and 30% for
the three months ended January 31, 2003 and 2002, respectively, and were 29% and
38% for the six months ended January 31, 2003 and 2002, respectively.

      The $1.3 million increase in SG&A expenses during the three months ended
January 31, 2003, as compared to the three months ended January 31, 2002, is due
primarily to $0.4 million in expenses related to the Patent Licensing Program, a
$0.3 million increase in sales and marketing expenses, and $0.2 million in
consulting and legal expenses related to the divestiture of the
videoconferencing hardware business. Similarly, the $1.7 million increase in
SG&A expenses during the six months ended January 31, 2003, as compared to the
six months ended January 31, 2002, is due primarily to $0.8 million in expenses
related to the Patent Licensing Program, and a $1.1 million increase in sales
and marketing expenses.

      When Forgent acquired certain assets and liabilities of Global Scheduling
Systems Inc. during the fourth fiscal quarter of 2002, Forgent's sales force
more than doubled. Additionally, Forgent hired a Senior Vice-President of Sales
during the first fiscal quarter. These additional personnel, among a few other
sales hires, account for the increase in sales and marketing expenses during the
three and six months ended January 31, 2003. Forgent's new sales structure was
implemented during the first fiscal quarter and has been improved during the
second fiscal quarter to hire experienced enterprise software sales veterans, to
implement improved sales execution tactics, and to modify the sales commission
structure. As a result, the sales organization significantly increased the sales
pipeline during the three months ended January 31, 2003. There can be no
assurance, however, that sales from this pipeline will be finalized. The Company
will continue to implement its sales strategy to further increase its sales
pipeline and more importantly, to finalize sales transactions to generate
revenues. Additionally, during the three and six months ended January 31, 2003,
Forgent's Patent Licensing Program incurred consulting expenses, international
travel and other related expenses, which were not incurred during the comparable
periods ended January 31, 2002.

      Forgent intends to further decrease any unnecessary SG&A expenses that do
not directly support the generation of revenues for Forgent. However, the future
expense reductions will not impact the Company's ability to engage with its
customers.

      RESEARCH AND DEVELOPMENT. Research and development ("R&D") expenses
increased by $30 thousand, or 4%, to $0.7 million for the quarter ended January
31, 2003 from $0.7 million for the quarter ended January 31, 2002. R&D expenses
increased by $0.4 million, or 29%, to $1.9 million for the six months ended
January 31, 2003 from $1.5 million for the six months ended January 31, 2002.
R&D as a percentage of revenues were 6% and 8% for the three months ended
January 31, 2003 and 2002, respectively, and were 8% and 10% for the six months
ended January 31, 2003 and 2002, respectively.

      During the three and six months ended January 31, 2003, the Company
incurred $0.7 million and $1.9 million, respectively, in research and
development expenses, which are related to the continued efforts on enhancing
Forgent's award-winning Video Network Platform ("VNP") and Global Scheduling
System ("GSS"). VNP 3.0, the Company's upcoming version of its network
management software product, leverages in-house bridges to reduce reliance on
costly audio service providers in order to schedule mixed audio and video or
standalone audio conferences. The new release will allow for the seamless
hand-off of overflow requests for internal resources to


                                       13
<PAGE>
specified external service providers. VNP 3.0 also will add several new
administrative options for autoconfiguring and dialing complex calls and support
for automatically alerting and handling unanticipated calls involving ISDN and
IP endpoints. These additions will allow administrators to set policies which
automatically terminate unwanted calls or notify operations that unauthorized
calls are in progress. GSS Version 4.0 fully integrates its capabilities with
corporate scheduling standards Microsoft(R) Outlook(R) and Lotus Notes and will
enable organizations to empower their users to concurrently schedule all
elements of their meetings including rooms, audio/video conferencing, catering,
equipment, and technicians, directly from their current scheduling tool.
Additionally, GSS 4.0 will provide organizations improved abilities to control
and track the access, use, and costs associated with their meeting environment.
Both enhanced versions of the Company's software products will be made available
to the general public in the United States, Europe, and Australia starting in
July 2003.

      The R&D expenses are net of $0.8 million and $1.6 million capitalized
during the three and six months ended January 31, 2003, respectively, as
compared to $1.1 million and $1.9 million capitalized during the three and six
months ended January 31, 2002. Software development costs are capitalized after
a product is determined to be technologically feasible and is in the process of
being developed for market. At the time the product is released for sale, the
capitalized software is amortized over the estimated economic life of the
related projects, generally three years. As of January 31, 2003, approximately
92% of the Company's capitalized software development costs related to efforts
on designing Forgent's VNP and 8% related to efforts on designing GSS. Total R&D
expenses, including capitalized software development costs, increased 2% and 4%
for the three and six months ended January 31, 2003, as compared to the three
and six months ended January 31, 2002.

      During the three months ended January 31, 2003, Forgent filed five new
collaboration management patents with the United States Patent and Trademark
Office. Forgent currently has fifty-nine applications on file with the United
States Patent and Trademark Office, including patents originally filed by the
Company's divested products business unit. Forgent holds approximately forty
issued patents related to videoconferencing, data compression, video mail and
other technology developed or acquired by the Company.

      Forgent's ability to successfully develop software solutions to enable
enterprise collaboration networks is a significant factor in the Company's
success. As Forgent develops its research and development strategy, management
anticipates additional costs associated with the recruiting and retention of
engineering professionals. Management will attempt to maintain research and
development expenses at reasonable levels in terms of percentage of revenue.
However, the Company's control of its R&D expenses will not impact Forgent's
ability to develop new products since management believes Forgent's ultimate
future success is based primarily on the development and success of its solution
offerings related to its software roadmap.

      IMPAIRMENT OF ASSETS. As a result of the sale of its Products business
unit during fiscal 2002, Forgent received two subordinated promissory notes from
VTEL Products Corporation ("VTEL"). Due to the defaulted payment on the first
subordinated promissory note due in April 2002 and due to the uncertainty in
collecting the two outstanding notes from VTEL, the Company recorded a $6.0
million charge for the reserve of both notes from VTEL during fiscal 2002.
Management is currently renegotiating the payment terms of the note in default.
During the quarter ended October 31, 2002, management agreed with VTEL's
management to offset Forgent's accounts payable to VTEL with its accounts
receivable from VTEL. The net $0.5 million Forgent liability was partially
offset with the note in default, thus relieving $0.5 million of the reserve on
the notes receivable. This relief was accounted for as part of continuing
operations on the Company's consolidated statement of operations. No cash was
exchanged with this transaction.

      OTHER INCOME (EXPENSE). Other income increased by $0.4 million, or 767%,
to $0.3 million for the quarter ended January 31, 2003 from $46 thousand in
other expense for the quarter ended January 31, 2002. Other income decreased by
$1.4 million, or 77%, to $0.4 million for the six months ended January 31, 2003
from $1.8 million for the six months ended January 31, 2002. Other income
(expense) as a percentage of revenues were 2% and (1%) for the three months
ended January 31, 2003 and 2002, respectively, and were 2% and 12% for the six
months ended January 31, 2003 and 2002, respectively. The $1.4 million decrease
during the six months ended January 31, 2003 is due primarily to the 76,625
shares of Polycom common stock that were sold under a cash flow hedge, resulting
in a $1.7 million realized gain for the first fiscal quarter of 2002. The
Company no longer had any investment in Polycom as of October 31, 2001.


                                       14
<PAGE>
      INCOME (LOSS) FROM DISCONTINUED OPERATIONS. During fiscal year 2002, the
Company sold the operations and substantially all of the assets of its VTEL
products business, including the VTEL name, to VTEL and the operations and
assets of its integration business to SPL Integrated Solutions. Accordingly, the
products and integration businesses have been accounted for and presented as
discontinued operations in the consolidated financial statements.

      Loss from discontinued operations was $6.2 million and $8.1 million for
the three and six months ended January 31, 2002, respectively. Loss from
discontinued operations was 77% and 55% of total revenues for the three and six
months ended January 31, 2002. Since the products and integration businesses
were sold during fiscal 2002, no income or losses were recorded for discontinued
operations for the three and six months ended January 31, 2003.

      NET INCOME (LOSS). Forgent generated net income of $1.3 million, or $0.05
per share, during the quarter ended January 31, 2003, as compared to a net loss
of $8.6 million, or $0.34 per share, during the quarter ended January 31, 2002.
Forgent generated net income of $2.2 million, or $0.09 per share, for the six
months ended January 31, 2003, as compared to a net loss of $11.1 million, or
$0.45 per share, for the six months ended January 31, 2002. Net income (loss) as
a percentage of total revenues was 11% and (107%) for the three months ended
January 31, 2003 and 2002, respectively. Net income (loss) as a percentage of
total revenues was 9% and (76%) for the six months ended January 31, 2003 and
2002, respectively.

      Net income increased by $9.9 million or 115% during the three months ended
January 31, 2003 as compared to the three months ended January 31, 2002.
Approximately 63%, or $6.2 million, of the increase is due to the improvement in
earnings from discontinued operations and 37%, or $3.6 million, is due to the
gross margins generated by the intellectual property licensing business. Net
income increased by $13.4 million or 120% during the six months ended January
31, 2003 as compared to the six months ended January 31, 2002. The increase is
due primarily to $8.1 million improvement in earnings from discontinued
operations and $6.7 million gross margins generated by the intellectual property
licensing business.

      During the three months ended January 31, 2003, as compared to the prior
fiscal quarter, Forgent grew revenues from intellectual property licensing by
19%, maintained the level of total revenues and total operating expenses, and
improved earnings per share by $0.01. The second fiscal quarter also marked
Forgent's fourth consecutive quarter of intellectual property licensing revenues
and profitability. Additionally, the Company signed a definitive agreement to
sell its videoconferencing hardware services business, thus eliminating efforts
required to improve operations unrelated to Forgent's core competencies. These
significant indicators, as well as those achieved in the research and
development of the Company's software products, further strengthen the Company's
resolve to become a collaboration software company that delivers enterprise
solutions. However, uncertainties and challenges remain, and there can be no
assurance that the Company can successfully grow its revenues or maintain
profitability.

LIQUIDITY AND CAPITAL RESOURCES

      On January 31, 2003, Forgent had working capital of $10.7 million,
including the Company's principal source of liquidity, which consisted of $18.6
million in cash, cash equivalents and short-term investments. During the three
months ended January 31, 2003, the Company grew its cash and short-term
investments balance by over 27% and its working capital by 12% from the end of
the previous fiscal quarter.

      Cash provided by operating activities was $1.8 million for the six months
ended January 31, 2003 due to $2.2 million in net income, $1.4 million of
non-cash depreciation, amortization and impairment expenses, and a $1.1 million
decrease in accounts receivable, which were offset by a $2.3 million decrease in
accounts payable and other accrued expenses. Cash provided by operating
activities was $6.6 million for the six months ended January 31, 2002 and
largely resulted from a $3.0 million net loss and a $3.7 million decrease in
accounts payable and other accrued liabilities, which were offset by a $8.2
million sale and decrease in accounts receivable, $5.4 million of non-cash
depreciation, amortization, and impairment expenses. During the six months ended
January 31, 2003, the Company collected $6.7 million in royalties from its
intellectual property licensing agreements and anticipates collecting additional
royalties in future quarters. This significant internal source of cash provides
funding for the Company's current software and professional services operations
and allows management to strategically utilize this


                                       15
<PAGE>
positive cash flow to invest further in developing Forgent's VNP, GSS, and
VideoWorks software. Furthermore, management is exploring other opportunities
for growing the software business through acquisitions. As more license
agreements are signed and related payments are received under the continued
success of the Company's Patent Licensing Program, management anticipates that
the Company's cash position will strengthen. However, risks and uncertainties
remain as to the timing of the receipts of license fees due, in part, to the
inherent nature of a patent licensing program. Therefore, there is no assurance
that the Company will be able to limit its cash consumption and continue to
preserve its cash balances, and it is possible that the Company's business
demands may lead to cash utilization at levels greater than recently experienced
due to investments in research and development, increased expense levels and
other factors.

      Cash used in investing activities was $0.8 million for the six months
ended January 31, 2003 due to the $1.6 million capitalization of software
development costs and $0.7 million in purchases of property and equipment, which
were offset by $1.5 million in net sales of short-term investments. Cash used in
investing activities was $0.6 million for the six months ended January 31, 2002
due primarily to the $1.9 million capitalization of software development, which
was offset by $1.6 million net sales of short-term investments. During the three
months ended October 31, 2001, Forgent sold its remaining investment in Polycom,
resulting in a net cash inflow of $1.8 million, which significantly contributed
to decreasing the cash used in investing activities.

      Cash used in financing activities was $0.8 million for the six months
ended January 31, 2003 due primarily to the $0.7 million purchase of treasury
stock. Cash used in financing activities was $0.5 million for the six months
ended January 31, 2002 due largely to the $1.4 million purchase of treasury
stock, which was offset by $0.7 million net proceeds from the issuance of stock.
In fiscal 2001 Forgent announced a stock repurchase program to purchase up to
two million of the Company's common stock. During the first fiscal quarter of
2003, Forgent's board of directors approved the repurchase of an additional
million shares of the Company's stock. During the six months ended January 31,
2003, the Company repurchased 354,686 shares for $0.7 million, bringing the
total number of shares repurchased to date to 1.2 million shares. Management
intends to repurchase additional shares in fiscal 2003, depending on the
Company's cash position, market conditions, and other factors. During the six
months ended January 31, 2002 Forgent entered into a three-year notes payable of
$0.5 million for the purchase of the Company's new accounting system. At January
31, 2003, Forgent did not have a line of credit in place. Based on the Company's
current cash position and the significant cash inflows generated from the
intellectual property licensing agreements, management does not expect to obtain
any line of credit during the current fiscal year.

LEGAL MATTERS

      Forgent is the defendant or plaintiff in various actions that arose in the
normal course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse affect on the
Company's financial condition or results of operations.

      In late February 2003, the Company received a letter from legal counsel
for the independent executrix of the Estate of Gordon Matthews, asserting that
the Company was obligated to pay the independent executrix of the Estate of
Gordon Matthews for the asserted value of services claimed to have been rendered
by Mr. Matthews in connection with his alleged involvement in the Company's
Patent Licensing Program. In late February 2003, the Company initiated an action
in the 261st District Court in Travis County Texas, styled Forgent Networks,
Inc. v. Monika Matthews, et al, for the purposes of declaring that the Company
has no obligation to the defendant. In that action, the defendant has filed a
counter claim asserting that the independent executrix of the Estate of Gordon
Matthews is entitled to recover in quantum meruit for the reasonable value of
the work and services claimed to have been provided by Gordon Matthews, a former
member of the Board of Directors and consultant to the Company, which the
defendant asserts is at least $5 million. The Company does not believe the
counter claim has merit and intends to vigorously pursue declaratory relief from
the court that no liability is due to the independent executrix of the Estate of
Gordon Matthews.


                                       16
<PAGE>
CRITICAL ACCOUNTING POLICIES

      The consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States and include
the accounts of Forgent's wholly owned subsidiaries. All significant
intercompany transactions and balances have been eliminated in the
consolidation. Preparation of the consolidated financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Management periodically
evaluates estimates used in the preparation of the financial statements for
continued reasonableness. Appropriate adjustments, if any, to the estimates used
are made prospectively based upon such periodic evaluation.

      Management believes the following represent Forgent's critical accounting
policies:

REVENUE RECOGNITION

      The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred, the fee is fixed or determinable, and
collectibility is probable. The Company recognizes revenue in accordance with
Statement of Position ("SOP") 97-2, "Software Revenue Recognition," as amended
by SOP 98-4 and SOP 98-9, and Securities and Exchange Commission Staff
Accounting Bulletin 101, Revenue Recognition in Financial Statements.

      The Company does not recognize revenue for agreements with rights of
return, refundable fees, cancellation rights or acceptance clauses until such
rights of return, refund or cancellation have expired or acceptance has
occurred. The Company's arrangements with resellers do not allow for any rights
of return.

      Software and professional service revenue consists of license and service
fees. License fee revenue is earned through the licensing or right to use the
Company's software and from the sale of specific software products. Service fee
income is earned through the sale of maintenance and technical support,
training, and installation services related to the sale of the software
products. The Company allocates the total fee to the various elements based on
the relative fair values of the elements specific to the Company. The Company
determines the fair value of each element in the arrangement based on
vendor-specific objective evidence ("VSOE") of fair value. When VSOE of fair
value for the license element is not available, license revenue is recognized
using the residual method. Under the residual method, the contract value is
first allocated to the undelivered elements (maintenance and service elements)
based upon their VSOE of fair value; the remaining contract value, including any
discount, is allocated to the delivered element. For maintenance, VSOE of fair
value is based upon the renewal rate specified in each contract, which is in
accordance with the Company's standard price list. For training and installation
services, VSOE of fair value is based upon the rates charged for these services
when sold separately. Revenue allocated to maintenance and technical support is
recognized ratably over the maintenance term (typically one year). Revenue
allocated to training is recognized as the services are performed. Revenue
allocated to installation is recognized upon completion of these services due to
their short-term nature. The Company's training and installation services are
not essential to the functionality of its products as (1) such services are
available from other vendors and (2) the Company has sufficient experience in
providing such services. For instances in which VSOE cannot be determined for
undelivered elements, and these undelivered elements do not provide significant
customization or modification of the Company's software product, Forgent
recognizes the entire contract amount ratably over the period during which the
services are expected to be performed.

      Service and other revenues consist of legacy service programs that provide
maintenance, technical support, installation and resident engineering services
to companies that deploy video networks. Services and other revenues are
recognized ratably over the term of the service agreement, as there is no
discernible pattern of service delivery.

      Intellectual property licensing revenue is derived from the Company's
Patent Licensing Program, which is currently focused on generating license
revenues relating to the Company's data compression technology embodied in U.S.
Patent No. 4,698,672, and its foreign counterparts. Gross intellectual property
licensing revenue is recognized at the time a license agreement has been
executed and related costs are recorded as cost of sales. The cost


                                       17
<PAGE>
of sales on the intellectual property licensing business relates to the legal
fees incurred on successfully achieving signed agreements. The contingent legal
fees are based on a percentage of the revenues received on the signed agreements
and are paid to a national law firm. The percentage payment to this law firm was
set based on a sliding scale that began at 35% and increased to 50% based on the
aggregate recoveries achieved. Future percentage payments will be 50% of license
receipts per the agreement with this firm.

      Deferred revenue includes amounts received from customers in excess of
revenue recognized, and is comprised of deferred maintenance, service and other
revenue. Deferred revenues are recognized in the statement of operations over
the terms of the arrangements, primarily ranging from one to three years.

CREDIT POLICY

      The Company reviews potential customers' credit ratings to evaluate
customers' ability to pay an obligation within the payment term, which is net
thirty days. When payment is reasonably assured, and no known barriers exist to
legally enforcing the payment, the Company extends credit to customers, not to
exceed 10% of their net worth. An account is placed on "Credit Hold" if it is
thirty days past due or a placed order exceeds the credit limit, and may be
placed on "Credit Hold" sooner if circumstances warrant. The Company follows its
credit policy consistently and constantly monitors all of its delinquent
accounts for indications of uncollectibility.

SOFTWARE DEVELOPMENT COSTS

      Costs incurred in connection with the development of software products are
accounted for in accordance with Statement of Financial Accounting Standards
("SFAS") No. 86, "Accounting for the Costs of Computer Software to Be Sold,
Leased or Otherwise Marketed." Costs incurred prior to the establishment of
technological feasibility are charged to research and development expense.
Amortization of capitalized software begins upon initial product shipment.
Software development costs are amortized over the estimated life of the related
product (generally thirty-six months), using the straight-line method.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

      The Company maintains an allowance for doubtful accounts to estimate
losses from uncollectable customer receivables. This estimate is based in the
aggregate, on historical collection experience, age of receivables and general
economic conditions. It also considers individual customers' payment experience,
credit-worthiness and age of receivable balances.

IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS

      The Company adopted Statement of Financial Accounting Standards ('SFAS")
No. 142, "Goodwill and Other Intangible Assets" on August 1, 2001 and thus is
required to review the carrying value of goodwill and other intangible assets
annually. Forgent also reviews goodwill and other intangibles for possible
impairment whenever specific events warrant. Events that may create an
impairment review include, but are not limited to: significant and sustained
decline in the Company's stock price or market capitalization; significant
underperformance of operating units; significant changes in market conditions
and trends. If a review event has occurred, the value of the goodwill or
intangible is compared to the estimate of future cash flows, and if required, an
impairment is recorded.

RISK FACTORS

      There are many factors that affect the Company's business, prospects and
the results of its operations, some of which are beyond the control of the
Company. The following is a discussion of some of these and other important risk
factors that may cause the actual results of the Company's operations in future
periods to differ materially from those currently expected or desired.


                                       18
<PAGE>
GENERAL ECONOMIC AND INDUSTRY CONDITIONS

      Any adverse change in general economic, business or industry conditions
could have a material adverse effect on the Company's business, prospects and
financial performance if those conditions caused customers or potential
customers to reduce or delay their investments in software and professional
services. Due to the current economic circumstances affecting U.S. businesses,
there has been a slow down in capital spending, which adversely affects the
willingness of companies to purchase enterprise software products and
professional services. If this slow down is prolonged, current economic
conditions could have a continued adverse effect on the demand for the Company's
products and services and could result in declining revenue and earnings growth
rates for the Company.

TECHNOLOGICAL CHANGES AND PRODUCT TRANSITIONS

      The technology industry is characterized by continuing improvements in
technology, which results in the frequent introduction of new products, short
product life cycles and continual improvement in product price/performance
characteristics. These improvements could render the Company's products
noncompetitive, if the Company fails to anticipate and respond effectively to
these improvements and new product introductions. While the Company believes
that its experience in the videoconferencing industry affords it a competitive
advantage over some of its competitors, rapid changes in technology present some
of the greatest challenges and risks for any software and technology-based
company.

SALES CYCLE

      Forgent has a long sales cycle because it generally takes time to educate
potential customers regarding the use and benefits of its software applications.
The long sales cycle makes it difficult to predict the quarter in which sales
may fall. Because the Company's expense levels are relatively fixed, the shift
of sales from one quarter to a later quarter will adversely affect results in
operations in an affected quarter, as the Company would not be able to adjust
its expense levels to match fluctuations in revenues. If the Company failed to
meet expectations by shareholders, analysts or others as to products sales
anticipated in any particular quarter, the market price of the Company's stock
may significantly decrease.

PRODUCT IMPLEMENTATION

      The Company recognizes a portion of its revenue from product sales upon
implementation of its software, and the timing of product implementation could
cause significant variability in product license revenues and operating results
for any particular period.

NEW BUSINESS MODEL

      In accordance with its reorganization efforts previously described, the
Company is currently transitioning its business and realigning its strategic
focus towards a new core market, software and professional services. Internal
changes resulting from the business restructuring announced during 2001 and 2002
are substantially complete, but many factors may negatively impact the Company's
ability to implement its strategic focus, including the ability or possible
inability to manage the implementation and development of its new product and
professional service business, sustain the productivity of Forgent's workforce
and retain key employees, manage operating expenses and quickly respond to and
recover from unforeseen events associated with the reorganization. The Company
may be required by market conditions and other factors to undertake additional
restructuring efforts in the future. Forgent's business, results of operations
or financial condition could be materially adversely affected if it is unable to
manage the implementation and development of its new business strategy, sustain
the productivity of its workforce and retain key employees, manage its operating
expenses or quickly respond to and recover from unforeseen events associated
with any future restructuring efforts.

LIMITED OPERATING HISTORY

      Despite being founded in 1985, Forgent has a limited operating history
because of the Company's recent transition to a software and professional
services company. As a result of its limited operating history, Forgent


                                       19
<PAGE>
cannot forecast revenue and operating expenses based on historical results. The
Company's ability to forecast accurate quarterly revenue is limited because
Forgent's software products have a long sales cycle that makes it difficult to
predict the quarter in which sales will occur. The Company's business, operating
results and financial condition will be materially adversely affected if
revenues do not meet projections and if results in a given quarter do not meet
expectations.

COMPETITION AND NEW ENTRANTS

      The Company may encounter new entrants or competition from competitors in
some or all aspects of its business. The Company competes on the basis of price,
technology availability, performance, quality, reliability, service and support.
The Company believes that its experience and business model creates a
competitive advantage over its competitors. However, there can be no assurance
that the Company will be able to maintain this advantage. Many of the Company's
current and possibly future competitors have greater resources than the Company
and therefore, may be able to compete more effectively on price and other terms.

SOFTWARE MARKETING AND SALES

      Forgent's software products are relatively new to the market and the
Company, and as such, have limited market awareness and to date, limited sales.
Forgent's VNP software product was introduced in the fall of 2001, and Forgent
acquired GSS in June 2002. The Company's future success will be dependent in
significant part on its ability to generate demand for its software products and
professional services. To this end, Forgent's direct and indirect sales
operations must increase market awareness of its products to generate increased
revenue. The Company's products and services require a sophisticated sales
effort targeted at the senior management of its prospective customers. All new
hires will require training and will take time to achieve full productivity.
Forgent cannot be certain that its new hires will become as productive as
necessary or that it will be able to hire enough qualified individuals or retain
existing employees in the future. The Company cannot be certain that it will be
successful in its efforts to market and sell its products, and if it is not
successful in building greater market awareness and generating increased sales,
future results of operations will be adversely affected.

SOFTWARE AND PROFESSIONAL SERVICES DEVELOPMENT

      Forgent expects that its future financial performance will depend
significantly on revenue from existing and future enterprise software products
and the related tools that the Company plans to develop, which is subject to
significant risks. There are significant risks inherent in a new product
introduction, such as its VNP and GSS software products. Market acceptance of
these and future products will depend on continued market development for
collaboration management. Forgent cannot be certain that its existing or future
products offerings will meet customer performance needs or expectations when
shipped or that it will be free of significant software defects or bugs. If the
Company's products do not meet customer needs or expectations, for whatever
reason, the Company's sales would be adversely affected and further, upgrading
or enhancing the product could be costly and time consuming.

LICENSE PROGRAM

      The Company's intellectual property licensing revenues are difficult to
predict. The Company's Patent Licensing Program involves risks inherent in
licensing intellectual property, including risks of protracted delays, possible
legal challenges that would lead to disruption or curtailment of the program,
increasing expenditures associated with the pursuit of the program, and other
risks that could adversely affect the Company's licensing program. Thus, there
can be no assurance that the Company will be able to continue to license its
technology to others. If the Company fails to meet the expectations of public
market analysts or investors, the market price of Forgent's common stock may
decrease significantly. Quarterly operating results may fail to meet these
expectations for a number of reasons, including the inability of licensees to
pay the license and other fees, a decline in the demand for the Company's
patented technology, higher than expected operating expenses, and license delays
due to legal and other factors.


                                       20
<PAGE>
PATENTS AND TRADEMARKS

      The Company's success and ability to compete are substantially dependent
on its proprietary technology and trademarks. The Company seeks to protect these
assets through a combination of patent, copyright, trade secret, and trademark
laws, as well as confidentiality procedures and contractual provisions. These
legal protections afford only limited protection and enforcement of these rights
may be time consuming and expensive. Furthermore, despite best efforts, the
Company may be unable to prevent third parties from infringing upon or
misappropriating its intellectual property. Also, competitors may independently
develop similar, but not infringing, technology, duplicate products, or design
around the Company's patents or other intellectual property.

      The Company's patent applications or trademark registrations may not be
approved. Moreover, even if approved, the resulting patents or trademarks may
not provide Forgent with any competitive advantage or may be challenged by third
parties. If challenged, patents might not be upheld or claims could be narrowed.
Any litigation surrounding the Company's rights could force Forgent to divert
important financial and other resources away from business operations.

ACQUISITION INTEGRATION

      The Company has made, and may continue to evaluate and make, strategic
acquisitions in public and privately held technology companies. Because some of
these companies may be early-stage ventures with either unproven business
models, products that are not yet fully developed or products that have not yet
achieved market acceptance, these transactions are inherently risky. Many
factors outside of the Company's control determine whether or not the Company's
investments will be successful. Such factors include the ability of a company to
obtain additional private equity financing, to access the public capital
markets, to affect a sale or merger, or to achieve commercial success with its
products or services. Accordingly, there can be no assurances that any of the
Company's investments will be successful or that the Company will be able to
recover the amount invested.

DIVESTITURE TRANSACTIONS

      As a result Forgent's transition to a software and professional services
company, it has substantially completed a program to divest certain non-core
assets, including a videoconferencing endpoint manufacturing business as well as
other related businesses. There can be no assurance that, having divested such
non-core operations, Forgent will be able to achieve greater or any
profitability, strengthen its core operations or compete more effectively in
existing markets. In addition, the Company continues to evaluate the
profitability realized or likely to be realized by its existing businesses and
operations, and Forgent reviews from a strategic standpoint, which, if any, of
its businesses or operations should be divested. Entering into, evaluating or
consummating divestiture transactions may entail risks and uncertainties in
addition to those which may result from the divestiture-related change in the
Company's business operations, including but not limited to extraordinary
transaction costs, unknown indemnification liabilities and unforeseen
administrative complications, any of which could result in reduced revenues,
increased charges, or post-transaction administrative costs or could otherwise
have a material adverse effect on Forgent's business, financial condition or
results of operations.

      Due to the risk factors noted above and elsewhere in the Management's
Discussion and Analysis of Financial Condition and Results of Operations,
Forgent's past earnings and stock price have been, and future earnings and stock
price potentially may be, subject to significant volatility, particularly on a
quarterly basis. Past financial performance should not be considered a reliable
indicator of future performance and investors are cautioned in using historical
trends to anticipate results or trends in future periods. Any shortfall in
revenue or earnings from the levels anticipated by securities analysts could
have an immediate and significant effect on the trading price of the Company's
common stock in any given period.

CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT
FUTURE RESULTS

      Certain portions of this report contain forward-looking statements that
reflect the Company's current expectations regarding future results of
operations, economic performance, financial condition and achievements.


                                       21
<PAGE>
Whenever possible, Forgent attempted to identify these forward-looking
statements with the words "believes," "estimates," "plans," "expects,"
"anticipates" and other similar expressions. These statements reflect
management's current plans and expectations that rely on a number of assumptions
and estimates that are subject to risks and uncertainties including, but not
limited to rapid changes in technology, unexpected changes in customer order
patterns, the intensity of competition, economic conditions, pricing pressures,
interest rates fluctuations, changes in the capital markets, litigation
involving intellectual property, changes in tax and other laws and governmental
rules applicable to Forgent's business and other risks indicated in Forgent's
filings with the Securities and Exchange Commission. These risks and
uncertainties are beyond the Company's control, and in many cases, management
cannot predict all of the risks and uncertainties that could cause actual
results to differ materially from those indicated by the forward-looking
statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company's primary market risk exposure relates to interest rate risk
and foreign currency exchange fluctuations. Forgent's interest income is
sensitive to changes in U.S. interest rates. However, due to the short-term
nature of the Company's investments, Forgent does not consider these risks to be
significant. The Company previously invested in Accord Networks ("Accord") an
Israeli-based manufacturer of networking equipment. In June of 2000, Accord
filed an initial public offering on the NASDAQ stock exchange in which the
Company was apportioned 1.3 million shares. In February 2001, Accord was
acquired by Polycom Inc. ("Polycom") and Forgent's investment in Accord
converted to 399,000 shares of Polycom. The Company sold 246,000 shares and then
entered into a cash flow hedge to ensure a minimum level of cash flow from the
153,000 remaining shares. The settlement of these hedges and related shares of
Polycom occurred in July and October 2001. During the three months ended October
31, 2001, the remaining Polycom shares were sold under a cash flow hedge,
realizing $1.7 million in gain and $1.8 million in net cash flows. As of October
31, 2001, the Company no longer had market risks related to the Polycom stock.

      Forgent's objective in managing its exposure to foreign currency exchange
rate fluctuations is to reduce the impact of adverse fluctuations in earnings
and cash flows associated with foreign currency exchange rate changes.
Accordingly, the Company historically utilized forward contracts to hedge its
foreign currency exposure on firm commitments denominated in the Euro and
Australian dollar. As of January 31, 2003 and January 31, 2002, the Company held
no foreign currency contracts. Due to the Company's reduction in international
offices and related reduction in foreign exchange risks, management does not
anticipate any additional foreign currency hedges.

      For additional Quantitative and Qualitative Disclosures about Market Risk
reference is made to Part II, Item 7A, Quantitative and Qualitative Disclosures
about Market Risk, in the Company's Annual Report on Form 10-K for the year
ended July 31, 2002, as amended.

ITEM 4. CONTROLS AND PROCEDURES

      Under the supervision and with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, management of the Company has
evaluated the effectiveness of the Company's disclosure controls and procedures
(as defined in Rule 13a-14(c) and Rule 15d-14 under the Securities Exchange Act
of 1934) as of a date within 90 days prior to the filing date of this report.
Based on that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that, as of the date of the evaluation, the Company's
disclosure controls and procedures are effective in timely alerting them to the
material information relating to the Company required to be included in its
periodic filings with the Securities and Exchange Commission.

      During the period covered by this report, there were no significant
changes in the Company's internal controls or, to management's knowledge, in
other factors that could significantly affect these controls subsequent to the
date of their evaluation.


                                       22
<PAGE>
                          PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      Forgent is the defendant or plaintiff in various actions that arose in the
normal course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse affect on our
financial condition or results of operations.

      In late February 2003, the Company received a letter from legal counsel
for the independent executrix of the Estate of Gordon Matthews, asserting that
the Company was obligated to pay the independent executrix of the Estate of
Gordon Matthews for the asserted value of services claimed to have been rendered
by Mr. Matthews in connection with his alleged involvement in the Company's
Patent Licensing Program. In late February 2003, the Company initiated an action
in the 261st District Court in Travis County Texas, styled Forgent Networks,
Inc. v. Monika Matthews, et al, for the purposes of declaring that the Company
has no obligation to the defendant. In that action, the defendant has filed a
counter claim asserting that the independent executrix of the Estate of Gordon
Matthews is entitled to recover in quantum meruit for the reasonable value of
the work and services claimed to have been provided by Gordon Matthews, a former
member of the Board of Directors and consultant to the Company, which the
defendant asserts is at least $5 million. The Company does not believe the
counter claim has merit and intends to vigorously pursue declaratory relief from
the court that no liability is due to the independent executrix of the Estate of
Gordon Matthews.

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

            None

ITEM 5. OTHER INFORMATION

            None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a) Exhibits:

<TABLE>
<S>               <C>
            99.1  Certification pursuant to 18 U.S.C. Section 1350, as
                  adopted pursuant to Section 906 the Sarbanes-Oxley Act
                  of 2002
</TABLE>

      (b) Reports on Form 8-K:

            None


                                      * * *


                                       23
<PAGE>
                                   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.


<TABLE>
<S>                                       <C>
                                          FORGENT NETWORKS, INC.


May 29, 2003                              By:   /s/ RICHARD N. SNYDER
                                                --------------------------------
                                                       Richard N. Snyder
                                                    Chief Executive Officer

May 29, 2003                              By:   /s/ JAY C. PETERSON
                                                --------------------------------
                                                        Jay C. Peterson
                                                    Chief Financial Officer
</TABLE>


                                       24
<PAGE>
                             FORGENT NETWORKS, INC.
                                JANUARY 31, 2003
                                 CERTIFICATIONS

I, Richard N. Snyder, Chief Executive Officer of Forgent Networks, Inc., certify
that:

1.    I have reviewed this amended quarterly report on Form 10-Q/A (the
      "quarterly report") of Forgent Networks, Inc. ("Registrant");

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations, and cash
      flows of the Registrant as of, and for, the periods presented in this
      quarterly report;

4.    The Registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
      have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to the Registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      b)    evaluated the effectiveness of the Registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      c)    presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date.

5.    The Registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation, to the Registrant's auditors and the audit
      committee of the Registrant's board of directors:

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect the Registrant's ability to
            record, process, summarize and report financial data and have
            identified for the Registrant's auditors any material weaknesses in
            internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal controls; and

6.    The Registrant's other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

<TABLE>
<S>                                       <C>
                                          /s/ RICHARD N. SNYDER
                                          -------------------------
                                          Richard N. Snyder
                                          Chief Executive Officer
                                          May 29, 2003
</TABLE>


                                       25
<PAGE>
                             FORGENT NETWORKS, INC.
                                JANUARY 31, 2003
                                 CERTIFICATIONS

I, Jay C. Peterson, Chief Financial Officer of Forgent Networks, Inc., certify
that:

1.    I have reviewed this amended quarterly report on Form 10-Q/A (the
      "quarterly by report") of Forgent Networks, Inc. ("Registrant");

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations, and cash
      flows of the Registrant as of, and for, the periods presented in this
      quarterly report;

4.    The Registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
      have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to the Registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      b)    evaluated the effectiveness of the Registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      c)    presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date.

5.    The Registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation, to the Registrant's auditors and the audit
      committee of the Registrant's board of directors:

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect the Registrant's ability to
            record, process, summarize and report financial data and have
            identified for the Registrant's auditors any material weaknesses in
            internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal controls; and

6.    The Registrant's other certifying officer and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.

<TABLE>
<S>                                       <C>
                                          /s/ JAY C. PETERSON
                                          ------------------------
                                          Jay C. Peterson
                                          Chief Financial Officer
                                          May 29, 2003
</TABLE>


                                       26
<PAGE>
                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER      DESCRIPTION
------      -----------
<S>         <C>
 99.1       Certification pursuant to 18 U.S.C. Section 1350, as adopted
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>