8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________

Form 8-K/A

(Amendment No. 1)

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

Date of report (date of earliest event reported):
June 25, 2010

Unify Corporation
(Exact name of registrant as specified in its charter)

Delaware	001-11807	94-2710559
(State or other jurisdiction of incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

1420 Rocky Ridge Drive, Suite 380

Roseville, California 95661
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(916) 928-6400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

- 1 -

Explanatory Note

     This Current Report on Form 8-K/A (Amendment No. 1) is being filed to amend and supplement Item 9.01 of the Current Report on Form 8-K filed by Unify Corporation on July 1, 2010 (the “Initial Filing”), to include the required financial statements of Strategic Office Solutions, Inc., a California corporation (“Daegis”) and the unaudited pro forma financial information required pursuant to Regulation S-X. The Company and its wholly-owned subsidiary, Unify Acquisition Corp., a California corporation, acquired Daegis through a merger on June 29, 2010. This Amendment No. 1 is filed to include historical audited and unaudited financial statements and unaudited pro forma financial information required by Item 9.01 of Form 8-K. The required audited and unaudited financial statements and unaudited pro forma financial information are filed as exhibits to this report under Item 9.01.

The information previously reported on the Initial Filing is incorporated by reference into this Amendment No. 1. The other items and exhibits to the Initial Filing further remain unchanged and are not amended hereby.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Business Acquired

The following financial statements are filed as Exhibits to this Amendment and incorporated in their entirety herein by reference:

• The audited financial statements of Daegis as of December 31,2009 and 2008 and for the years then ended, and the notes related thereto, and the related independent auditor’s report of Grant Thornton LLP, are incorporated by reference to Exhibit 99.1 hereto.
• The unaudited interim condensed financial statements of Daegis as of March 31, 2010 and for the three months ended March 31, 2010 and 2009, and the notes related thereto, are hereby incorporated by reference to Exhibit 99.2 hereto.

(b) Unaudited Pro Forma Financial Information

The following information is hereby incorporated by reference to Exhibit 99.3 hereto:

• Unaudited pro forma condensed combined financial statements as of April 30, 2010 and for the year then ended, and the notes related thereto.

(c)Not applicable

(d) Exhibits

Exhibit
Number	Description
23.1	Consent of Grant Thornton LLP, Independent Certified Public Accountants.
99.1	The audited financial statements of Daegis as of December 31,2009 and 2008 and for the years then ended, and the notes related thereto, and the related independent auditor’s report of Grant Thornton LLP.
99.2	The unaudited interim condensed financial statements of Daegis as of March 31, 2010 and for the three months ended March 31, 2010 and 2009.
99.3	Unaudited pro forma condensed combined financial statements as of April 30, 2010 and for the year then ended.

- 2 -

SIGNATURE

     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 hereunto duly authorized.

Dated: September 7, 2010

Unify Corporation
By:	/s/ Steven D. Bonham
	Steven D. Bonham
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

- 3 -

Exhibit
Number	Description
23.1	Consent of Grant Thornton LLP, Independent Certified Public Accountants.
99.1	The audited financial statements of Daegis as of December 31, 2009 and 2008 and for the years then ended, and the notes related thereto, and the related independent auditor’s report of Grant Thornton LLP.
99.2	The unaudited interim condensed financial statements of Daegis as of March 31, 2010 and for the three months ended March 31, 2010 and 2009.
99.3	Unaudited pro forma condensed combined financial statements as of April 30, 2010 and for the year then ended.

- 4 -

EX-23.1

Consent of Independent Certified Public Accountants

We have issued our report, dated June 8, 2010, with respect to the financial statements of Strategic Office Solutions, Inc., dba Daegis, included in Exhibit 99.1 to this current report on Form 8-K/A. We hereby consent to the incorporation by reference of said report in the Registration Statements of Unify Corporation on Form S-3 (File No. 333-161645, effective November 12, 2009) and on Forms S-8 (File No. 333-13203, effective October 1, 1996, File No. 333-61705, effective August 18, 1998, File No. 333-92973, effective December 17, 1999, File No. 333-71814, effective October 18, 2001, File No. 333-98633, effective August 23, 2002, File No. 333-120750, effective November 24, 2004 and File No. 333-149905, effective March 26, 2008).

/s/ Grant Thornton LLP

Reno, Nevada
September 7, 2010

EX-99.1

Financial Statements and Report of Independent

Certified Public Accountants

Strategic Office Solutions, Inc.
dba Daegis

December 31, 2009 and 2008

Contents

	Page
Report of Independent Certified Public Accountants	3
Balance Sheets	4
Statements of Income	5
Statement of Stockholders’ Equity	6
Statements of Cash Flows	7
Notes to Financial Statements	8

	Audit ● Tax ● Advisory
	Grant Thornton LLP 100 W Liberty Street, Suite 770 Reno, NV 89501-1965
Report of Independent Certified Public Accountants	T 775.786.1520 F 775.786.7091 www.GrantThornton.com

To the Board of Directors
Strategic Office Solutions, Inc. dba Daegis

We have audited the accompanying balance sheets of Strategic Office Solutions, Inc. dba Daegis (a California corporation) as of December 31, 2009 and 2008, and the related statements of income, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America as established by the Auditing Standards Board of the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as ev aluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strategic Office Solutions, Inc. dba Daegis as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Reno, Nevada
June 8, 2010

Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd

Strategic Office Solutions, Inc.
dba Daegis

BALANCE SHEETS

December 31,

ASSETS
	2009		2008
CURRENT ASSETS
Cash	$	5,710,206	$	2,013,314
Accounts receivable		6,105,205		7,264,053
Prepaid expenses		202,420		210,604
State franchise and income tax receivable		21,186		21,276
Total current assets		12,039,017		9,509,247
PROPERTY AND EQUIPMENT, net		1,284,450		1,437,229
DEPOSITS		184,005		208,052
Total assets	$	13,507,472	$	11,154,528
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	255,754	$	272,653
Accrued expenses		1,208,370		821,790
Current portion of long-term capital lease obligations		265,468		376,489
Current portion of deferred rent		49,992		-
Total current liabilities		1,779,584		1,470,932
LONG-TERM CAPITAL LEASE OBLIGATIONS		-		265,328
NONCURRENT PORTION OF DEFERRED RENT		119,114		-
Total liabilities		1,898,698		1,736,260
STOCKHOLDERS' EQUITY
Common stock		309,934		309,934
Additional paid-in capital		1,153,995		1,016,862
Retained earnings		10,144,845		8,091,472
Total stockholders' equity		11,608,774		9,418,268
Total liabilities and stockholders' equity	$	13,507,472	$	11,154,528

The accompanying notes are an integral part of these statements.

4

Strategic Office Solutions, Inc.
dba Daegis

STATEMENTS OF INCOME

Years ended December 31,

	2009			2008
Sales, net	$	23,550,599		$	22,051,341
Cost of sales		3,615,949			3,216,398
Gross profit		19,934,650			18,834,943
Operating expenses
Salaries and wages		9,257,869			9,243,005
Payroll taxes		842,604			795,095
Employee benefits		1,079,731			831,946
Stock-based compensation		137,125			954,184
Outside services		257,123			65,503
Rent		792,537			533,346
Supplies		107,629			81,766
Utilities and telephone		652,903			564,569
Travel and entertainment		538,810			509,215
Office expense		180,221			266,911
Professional fees		451,822			220,695
Repairs and maintenance		144,914			110,682
Advertising/promotion		74,146			80,646
Taxes and licenses		194,228			140,652
Insurance		174,870			202,401
Other		370,746			90,754
Depreciation and amortization		945,062			629,002
Total operating expenses		16,202,340			15,320,372
Income from operations		3,732,310			3,514,571
Other income (expense)
Interest expense		(41,140	)		(55,339	)
Interest and other income		61,713			27,238
Total other income (expense)		20,573			(28,101	)
Income before taxes		3,752,883			3,486,470
State income tax expense		92,836			2,256
NET INCOME	$	3,660,047		$	3,484,214

The accompanying notes are an integral part of these statements.

5

Strategic Office Solutions, Inc.
dba Daegis

STATEMENT OF STOCKHOLDERS' EQUITY

Year ended December 31, 2009

	Common Stock
	20,000,000 Shares
	Authorized,
	15,207,163
	Issued and		Additional					Total
	Outstanding,		Paid-in		Retained			Stockholders'
	No Par Value		Capital		Earnings			Equity
Balance, December 31, 2007	$	309,934	$	62,678	$	4,921,458		$	5,294,070
Stock-based compensation		-		954,184		-			954,184
Dividends paid		-		-		(314,200	)		(314,200	)
Net income		-		-		3,484,214			3,484,214
Balance, December 31, 2008		309,934		1,016,862		8,091,472			9,418,268
Stock-based compensation		-		137,133		-			137,133
Dividends paid		-		-		(1,341,530	)		(1,341,530	)
Advances to stockholders		-		-		(265,144	)		(265,144	)
Net income		-		-		3,660,047			3,660,047
Balance, December 31, 2009	$	309,934	$	1,153,995	$	10,144,845		$	11,608,774

The accompanying notes are an integral part of this statement.

6

Strategic Office Solutions, Inc.
dba Daegis

STATEMENTS OF CASH FLOWS

Years ended December 31,

	2009			2008
Cash flows from operating activities:
Net income	$	3,660,047		$	3,484,214
Items not requiring the use of cash:
Depreciation and amortization		945,062			629,002
(Gain) on sale of equipment		-			(2,981	)
Stock compensation expense		137,133			954,184
Changes in assets and liabilities:
Accounts receivable		1,158,848			(1,719,369	)
Prepaid expenses		8,184			14,850
State franchise and income tax receivable		90			7,324
Deposits		24,047			(85,262	)
Accounts payable		(16,899	)		49,649
Accrued expenses		386,580			(33,107	)
Deferred rent expense		169,106			-
Net cash provided by operating activities		6,472,198			3,298,504
Cash flows from investing activities:
Purchase of property and equipment		(792,283	)		(713,723	)
Proceeds from sale of equipment		-			3,000
Net cash used in investing activities		(792,283	)		(710,723	)
Cash flows from financing activities:
Borrowings on line of credit		1,000,000			13,117
Payments on line of credit		(1,000,000	)		(13,117	)
Payments on long-term capital lease obligations		(376,349	)		(404,369	)
Dividends paid		(1,341,530	)		(314,200	)
Advances to stockholders		(265,144	)		-
Net cash used in financing activities		(1,983,023	)		(718,569	)
INCREASE IN CASH		3,696,892			1,869,212
Cash at beginning of year		2,013,314			144,102
Cash at end of year	$	5,710,206		$	2,013,314
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	41,140		$	55,339
State franchise and income tax	$	76,341		$	9,081

The accompanying notes are an integral part of these statements.

7

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO FINANCIAL STATEMENTS

December 31, 2009 and 2008

NOTE A - ORGANIZATION

Strategic Office Solutions, Inc., an S-Corporation, was incorporated in 1999 to operate as a service bureau, providing time-sensitive document management services and finding cost-effective means by which their customers can meet their information management needs. The Company is headquartered in San Francisco, California, and principally provides litigation support services for attorneys and large corporations. As of August 21, 2006, Strategic Office Solutions, Inc. began doing business as Daegis.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting

The Company’s financial records are maintained on the accrual basis of accounting. Revenues are recognized in the accounting period in which they are earned and become measurable; and expenses are recognized in the period incurred.

2.Revenue Recognition

The Company recognizes revenue as services are performed.

Various states impose a sales tax of 5.0% to 9.5% on all sales to in-state consumers. The Company collects that sales tax from customers and remits it to the various states. The Company’s accounting policy is to exclude the tax collected and remitted to the states from revenues and operating expenses.

3.Cash and Cash Equivalents

The Company considers all short-term investments with original maturities of ninety days or less to be cash equivalents.

4.Accounts Receivable

The majority of the Company’s accounts receivable are due from law firms or companies involved in litigation. The Company does not require collateral from its customers to secure accounts receivable and generally requires payment in thirty days. The Company evaluates the collectability of its accounts receivable and writes off any amounts that are determined to be uncollectible.

5.Property and Depreciation

Property and equipment are recorded at cost and depreciated using the straight-line and declining-balance methods over estimated useful lives of three to seven years.

6.Accounting for Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets in accordance with accounting guidance requiring recognition of impairment of long-lived assets in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. Accordingly, the Company evaluates asset recoverability at each balance sheet date or when an event occurs that may impair recoverability of an asset. No impairment was recorded in 2009 or 2008.

8

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2009 and 2008

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

7.Advertising Costs

The Company’s policy is to expense advertising costs as incurred. Advertising expenses for the years ended December 31, 2009 and 2008 were $74,146 and $80,646, respectively.

8.Compensated Absences

It is the Company’s policy to permit employees to accumulate earned but unused vacation, which will be paid to employees upon separation from the Company’s service. The cost of vacation is recorded in the period earned.

9.Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. Actual results could differ from those estimates.

10. Income Taxes

The Company elected to be taxed as an S-Corporation as of May 7, 1999. Income tax effects resulting from the Company’s operations pass through to the stockholders; and accordingly, no provision for income taxes is included in the financial statements. It is the Company’s policy to declare and pay dividends to its stockholders to assist them in funding their income tax payments as a result of the S-Corporation election.

On January 1, 2009, the Company adopted accounting guidance related to accounting for uncertainty in income taxes, which required the recognition of uncertain tax positions taken or expected to be taken in a tax return when it is “more likely than not” to be sustained upon examination by tax authorities. This assessment assumes that tax authorities evaluate the technical merits of transactions individually with full knowledge of all facts and circumstances surrounding the issue. A recognized tax position is recorded in the financial statements at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement with the relevant tax authority. Changes in judgment resulting in subsequent recognition, de-recognition, or adjusted measurement of a tax position taken in a prior annual period, including any related interest and penalties, are recognized as discrete items during the period in which the change occurs.

The adoption of the new accounting guidance related to accounting for uncertainty in income taxes did not have an impact on the financial statements, as all position taken on prior year income tax returns were deemed highly certain. The Company did not have a liability for unrecognized tax benefits upon adoption of the guidance or as of December 31, 2009.

9

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2009 and 2008

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

10. Income Taxes - Continued

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits. As of December 31, 2009, the Company did not have any unrecognized tax benefits; therefore, the Company did not have any interest or penalties expense related to unrecognized tax benefits for the year ended December 31, 2009. The Company is unaware of information concerning any tax positions for which a material change in the unrecognized tax benefit or liability is reasonably possible within the next twelve months. The Company files income tax returns in the United States. The Company is no longer subject to United States federal income tax examinations for years before 2006. The Company files federal and various state income tax returns and is no longer subject to federal income tax examinations for years before 2006 or state income tax examinations for years before 2005.

11. Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and accounts receivable.

The Company maintains, at times, a cash balance at a single financial institution in excess of the $250,000 limit insured by the Federal Deposit Insurance Corporation.

The Company considers accounts receivable to be fully collectible, and no allowance for bad debts has been recorded.

As of December 31, 2009 and 2008, 58% of accounts receivable was due from three customers, and 57% of accounts receivable was due from four customers, respectively.

For the years ended December 31, 2009 and 2008, sales to two customers comprised 52%, and sales to three customers comprised 39% of sales revenue, respectively.

12. Recently Issued Accounting Standards

The Financial Accounting Standards Board (“FASB”) has established the Accounting Standards CodificationTM (“Codification” or “ASC”) as the single source of authoritative GAAP recognized by the FASB to be applied by non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates, which will serve to update the Codificat ion, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. GAAP is not intended to be changed as a result of the FASB’s Codification project, but it will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has implemented the Codification in this Annual Report by providing a plain English approach when describing any new or updated authoritative guidance.

10

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2009 and 2008

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

12. Recently Issued Accounting Standards - Continued

In May 2009, the FASB issued general standards for the accounting and reporting of subsequent events that occur between the balance sheet date and issuance of financial statements. Issuers will be required to recognize the effects, if material, of subsequent events in the financial statements if the subsequent event provides additional evidence about conditions that existed as of the balance sheet date. The issuer must also disclose the date through which subsequent events have been evaluated and the nature of any nonrecognized subsequent events. Nonrecognized subsequent events include events that provide evidence about conditions that did not exist as of the balance sheet date, but which are of such a nature that they must be disclosed to keep the financial statements from being misleading. These new standards became effective for financial reporting periods ending after June 15, 2009. The adoption has had no material effec t on the Company’s consolidated financial statements. The Company evaluated subsequent events through June 8, 2010, the date the financial statements were available to be issued.

NOTE C - PROPERTY AND EQUPMENT

Property and equipment consist of the following at December 31:

	2009		2008
Computer equipment	$	3,115,033	$	2,707,751
Computer software		668,602		544,648
Office equipment		230,455		140,511
Leasehold improvements		324,663		153,560
Total property and equipment		4,338,753		3,546,470
Less accumulated depreciation		3,054,303		2,109,241
	$	1,284,450	$	1,437,229

Depreciation expense was $945,062 and $629,002 for the years ended December 31, 2009 and 2008, respectively.

NOTE D - LINE OF CREDIT

The Company has a $1,000,000 revolving line of credit with a bank secured by accounts receivable, inventory, equipment, and intangibles which expire in April 2010. The line of credit is due on demand, and there are currently no amounts outstanding. Interest is at prime plus 0.75% and was 4.00% as of December 31, 2009. The line of credit has certain financial covenants which the Company was in compliance with at December 31, 2009. The line of credit is guaranteed by certain shareholders of the Company.

11

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2009 and 2008

NOTE E - LONG-TERM CAPITAL LEASE OBLIGATIONS

The Company leases equipment and software under capital leases expiring in various years through 2010. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are depreciated using straight-line and declining-balance methods over the life of the capital lease or the estimated life whichever is shorter. Equipment and software serve as collateral for capital lease obligations.

The following is a summary of equipment under capital leases at December 31:

	2009		2008
Equipment and software	$	1,028,898	$	1,159,740
Less accumulated depreciation		781,617		576,788
Equipment, net	$	247,281	$	582,952

Minimum future lease payments under capital leases are as follows:

Year ending December 31, 2010	$	275,507
Total minimum annual lease payments		275,507
Less amount representing interest		10,039
Less current portion		265,468
Long-term capital lease obligations	$	-0-

12

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2009 and 2008

NOTE F - OPERATING LEASES

The Company leases office space under various long-term operating leases, several of which include provisions for rent escalations. Rent expense is charged to operations using the straight-line method over the lease period. The lease terms vary and expire from 2009 to 2016 with the leases guaranteed by a certain stockholder. Total rental expense for the years ended December 31, 2009 and 2008 were $792,537 and $533,346, respectively.

Years ending December 31,
2010	$	834,151
2011		791,076
2012		534,854
2013		262,283
2014		277,528
Thereafter		701,345
	$	3,401,237

NOTE G - STOCK OPTIONS

The Company adopted a stock option plan in 2001. Effective February 1, 2008, the Company amended the plan to increase the shares of common stock reserved from 5,650,000 to 8,750,000 shares. The Company may issue incentive stock options to officers, directors, and key employees as defined under current tax laws and non-qualified stock options to non-employees of the Company. The option price, number of shares, and grant date are determined at the discretion of the Company’s Board of Directors. Currently, options for approximately 8.1 million shares of common stock have been issued under this plan. The options are either exercisable in two equal installments, with the first installment becoming exercisable on the date of the grant of the options, or they are fully exercisable on the date of the grant of the options. The options have expiration dates of five and ten years fro m the dates of the grant of the options. Accounting guidance related to Share-Based Payment requires stock option plans to be accounted for using the Fair-Value-Based Method.

Under the accounting guidance, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized over the stated vesting period. The Company uses the Black-Scholes option-pricing model to estimate the fair value of employee stock-based compensation at the date of grant, which requires the use of accounting judgment and financial estimates. The expected life of the options used in this calculation is the period of time the options are expected to be outstanding, and is determined by the simplified method which states, “The midpoint of the average vesting period and contractual life is an acceptable expected life assumption.” Expected stock volatility is based on the median historical volatility of comparable guideline public companies. Expected option exercises, the period of time the options are held, forfe itures, employee terminations and other criteria are based on previous experiences. The risk-free rates for periods within the contractual life of the options are based on United States Treasury Note rates in effect at the time of the grant for the period equal to the expected life. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the

13

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2009 and 2008

NOTE G - STOCK OPTIONS - Continued

related amounts recognized in the Statements of Income. In December 2007, accounting guidance was issued which extends the use of the “simplified” method for those companies that conclude that it is not reasonable to base its estimate of expected life of options on its historical share option exercise experience. The Company uses the “simplified” method for all estimations of stock option compensation expense due to insufficient historical exercise data and changes in the terms of the share option grants.

These amounts were determined using the Black-Scholes option-pricing model, which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the expected life of the option. There were no stock options granted in 2009. The assumptions used in the Black-Scholes model for the year ended December 31, 2008 was as follows:

Risk-free interest rate	1.65%
Dividend yield	0.00%
Volatility factor	40.00%
Expected life (in years)	3

A summary of the activity under the stock option plan and related information is presented below:

	December 31, 2009				December 31, 2008
			Weighted			Weighted
	Number		Average		Number	Average
	of Shares		Exercise		of Shares	Exercise
	(Options)		Price		(Options)	Price
Balance at beginning of year	4,792,837		$	0.64	1,507,023	$	0.62
Options granted	-			-	3,285,814		0.65
Options forfeited	(642,858	)		0.60	-		-
Options exercised	-			-	-		-
Balance at end of year	4,149,979		$	0.64	4,792,837	$	0.64
Exercisable at end of year	3,740,336		$	0.64	3,901,050	$	0.64

As of December 31, 2009, the total compensation cost related to unvested stock-based awards granted to employees under the Company’s stock option plan but not yet recognized was $13,780. This cost will be amortized during the year ended December 31, 2010. If all stock options were exercised, there would be no significant change in ownership percentages to the majority shareholders.

14

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2009 and 2008

NOTE G - STOCK OPTIONS - Continued

A summary of the Company’s nonvested stock option activity for the years ended December 31, 2009 and 2008 is as follows:

	December 31, 2009				December 31, 2008
	Number		Weighted		Number		Weighted
	of Shares		Average		of Shares		Average
	(Options)		Fair Value		(Options)		Fair Value
Nonvested at beginning of year	891,786		$	0.34	160,715		$	0.36
Granted	-			-	3,285,814			0.33
Vested	(160,715	)		0.36	(2,554,743	)		0.32
Forfeited	(321,429	)		0.35	-			-
Nonvested at end of year	409,642		$	0.32	891,786		$	0.34

NOTE H - 401(k) PLAN

The Company has a 401(k) plan effective January 2003. The plan is available to all employees who have met certain service requirements. On October 15, 2007, the Company amended the plan to change employer contributions from discretionary to 100% of the first 3% of participants’ contributions and 50% of the next 2% of participants’ contributions. The Company’s contributions were $210,506 and $178,268 for the years ended December 31, 2009 and 2008, respectively.

15

EX-99.2

Unaudited Interim Condensed Financial Statements

Strategic Office Solutions, Inc.

dba Daegis

For the quarterly period ended March 31, 2010

Contents

Unaudited Condensed Financial Statements:	Page
Balance Sheets	3
Statements of Income	4
Statements of Cash Flows	5
Notes to Financial Statements	6

Strategic Office Solutions, Inc.
dba Daegis

UNAUDITED CONDENSED BALANCE SHEETS

ASSETS

	March 31,		December 31,
	2010		2009
CURRENT ASSETS
Cash	$	4,205,758	$	5,710,206
Accounts receivable		4,816,820		6,105,205
Prepaid expenses		386,359		202,420
State franchise and income tax receivable		16,405		21,186
Total current assets		9,425,342		12,039,017
PROPERTY AND EQUIPMENT, net		1,626,396		1,284,450
DEPOSITS		146,005		184,005
Total assets	$	11,197,743	$	13,507,472
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	312,464	$	255,754
Accrued expenses		967,745		1,208,370
Current portion of long-term capital lease obligations		357,047		265,468
Current portion of deferred rent		8,670		49,992
Total current liabilities		1,645,926		1,779,584
LONG-TERM CAPITAL LEASE OBLIGATIONS		369,443		-
NONCURRENT PORTION OF DEFERRED RENT		161,403		119,114
Total liabilities		2,176,772		1,898,698
STOCKHOLDERS' EQUITY
Common stock		309,934		309,934
Additional paid-in capital		1,153,981		1,153,995
Retained earnings		7,557,056		10,144,845
Total stockholders' equity		9,020,971		11,608,774
Total liabilities and stockholders' equity	$	11,197,743	$	13,507,472

The accompanying notes are an integral part of these statements.

3

Strategic Office Solutions, Inc.
dba Daegis

UNAUDITED CONDENSED STATEMENTS OF INCOME

Three Months ended March 31,

	2010			2009
Sales, net	$	4,754,903		$	4,894,645
Cost of sales		742,969			793,661
Gross profit		4,011,934			4,100,984
Operating expenses
Salaries and wages		1,346,159			1,657,946
Payroll taxes		244,715			221,766
Employee benefits		293,702			230,156
Stock-based compensation		-			34,281
Outside services		58,414			59,670
Rent		205,353			235,585
Supplies		15,833			17,107
Utilities and telephone		170,407			143,261
Travel and entertainment		30,597			151,488
Office expense		56,976			48,988
Professional fees		74,957			128,868
Repairs and maintenance		28,469			35,023
Advertising/promotion		11,125			27,317
Taxes and licenses		80,685			133,969
Insurance		40,102			44,390
Other		12,414			7,681
Depreciation and amortization		192,987			128,535
Total operating expenses		2,862,895			3,306,031
Income from operations		1,149,039			794,953
Other income (expense)
Interest expense		(4,190	)		(12,715	)
Interest and other income		9,482			15,336
Total other income (expense)		5,292			2,621
Income before taxes		1,154,331			797,574
State income tax expense		207,596			88,076
NET INCOME	$	946,735		$	709,498

The accompanying notes are an integral part of these statements.

4

Strategic Office Solutions, Inc.
dba Daegis

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

Three Months ended March 31,

	2010			2009
Cash flows from operating activities:
Net income	$	946,735		$	709,498
Items not requiring the use of cash:
Depreciation and amortization		192,987			128,535
Stock compensation expense		-			34,281
Changes in assets and liabilities:
Accounts receivable		1,288,385			867,376
Prepaid expenses		(183,939	)		(58,317	)
State franchise and income tax receivable		4,781			21,276
Deposits		38,000			(8,385	)
Accounts payable		56,710			244,120
Accrued expenses		(240,626	)		252,512
Deferred rent expense		967			134,628
Net cash provided by operating activities		2,104,000			2,325,524
Cash flows from investing activities:
Purchase of property and equipment		(6,584	)		(115,869	)
Net cash used in investing activities		(6,584	)		(115,869	)
Cash flows from financing activities:
Payments on long-term capital lease obligations		(67,326	)		(97,711	)
Dividends paid		(3,534,538	)		-
Net cash used in financing activities		(3,601,864	)		(97,711	)
INCREASE (DECREASE) IN CASH		(1,504,448	)		2,111,944
Cash at beginning of period		5,710,206			2,013,314
Cash at end of period	$	4,205,758		$	4,125,258
Supplemental disclosure of cash flow information:
Non-cash acquisition of property and equipment	$	528,348		$	-
Cash paid during the period for:
Interest	$	4,190		$	12,715
State franchise and income tax	$	207,596		$	88,076

The accompanying notes are an integral part of these statements.

5

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

March 31, 2010

NOTE A - ORGANIZATION

Strategic Office Solutions, Inc., an S-Corporation, was incorporated in 1999 to operate as a service bureau, providing time-sensitive document management services and finding cost-effective means by which their customers can meet their information management needs. The Company is headquartered in San Francisco, California, and principally provides litigation support services for attorneys and large corporations. As of August 21, 2006, Strategic Office Solutions, Inc. began doing business as Daegis.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.Basis of Accounting

The Company’s financial records are maintained on the accrual basis of accounting. Revenues are recognized in the accounting period in which they are earned and become measurable; and expenses are recognized in the period incurred.

2.Revenue Recognition

The Company recognizes revenue as services are performed.

Various states impose a sales tax of 5.0% to 9.5% on all sales to in-state consumers. The Company collects that sales tax from customers and remits it to the various states. The Company’s accounting policy is to exclude the tax collected and remitted to the states from revenues and operating expenses.

3.Cash and Cash Equivalents

The Company considers all short-term investments with original maturities of ninety days or less to be cash equivalents.

4.Accounts Receivable

The majority of the Company’s accounts receivable are due from law firms or companies involved in litigation. The Company does not require collateral from its customers to secure accounts receivable and generally requires payment in thirty days. The Company evaluates the collectability of its accounts receivable and writes off any amounts that are determined to be uncollectible.

5.Property and Depreciation

Property and equipment are recorded at cost and depreciated using the straight-line and declining-balance methods over estimated useful lives of three to seven years.

6.Accounting for Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets in accordance with accounting guidance requiring recognition of impairment of long-lived assets in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. Accordingly, the Company evaluates asset recoverability at each balance sheet date or when an event occurs that may impair recoverability of an asset. No impairment was recorded in 2010 or 2009.

6

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS - CONTINUED

March 31, 2010

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

7.Advertising Costs

The Company’s policy is to expense advertising costs as incurred. Advertising expenses for the three month periods ended March 31, 2010 and 2009 were $11,125 and $27,317, respectively.

8.Compensated Absences

It is the Company’s policy to permit employees to accumulate earned but unused vacation, which will be paid to employees upon separation from the Company’s service. The cost of vacation is recorded in the period earned.

9.Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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. Actual results could differ from those estimates.

10. Income Taxes

The Company elected to be taxed as an S-Corporation as of May 7, 1999. Income tax effects resulting from the Company’s operations pass through to the stockholders; and accordingly, no provision for income taxes is included in the financial statements. It is the Company’s policy to declare and pay dividends to its stockholders to assist them in funding their income tax payments as a result of the S-Corporation election.

On January 1, 2009, the Company adopted accounting guidance related to accounting for uncertainty in income taxes, which required the recognition of uncertain tax positions taken or expected to be taken in a tax return when it is “more likely than not” to be sustained upon examination by tax authorities. This assessment assumes that tax authorities evaluate the technical merits of transactions individually with full knowledge of all facts and circumstances surrounding the issue. A recognized tax position is recorded in the financial statements at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement with the relevant tax authority. Changes in judgment resulting in subsequent recognition, de-recognition, or adjusted measurement of a tax position taken in a prior annual period, including any related interest and penalties, are recognized as discrete it ems during the period in which the change occurs.

The adoption of the new accounting guidance related to accounting for uncertainty in income taxes did not have an impact on the financial statements, as all position taken on prior year income tax returns were deemed highly certain. The Company did not have a liability for unrecognized tax benefits upon adoption of the guidance or as of March 31, 2010.

7

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS - CONTINUED

March 31, 2010

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

10. Income Taxes - Continued

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits. As of March 31, 2010, the Company did not have any unrecognized tax benefits; therefore, the Company did not have any interest or penalties expense related to unrecognized tax benefits for three months ended March 31, 2010. The Company is unaware of information concerning any tax positions for which a material change in the unrecognized tax benefit or liability is reasonably possible within the next twelve months. The Company files income tax returns in the United States. The Company is no longer subject to United States federal income tax examinations for years before 2006. The Company files federal and various state income tax returns and is no longer subject to federal income tax examinations for years before 2006 or state income tax examinations for years before 2005.

11. Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of cash and accounts receivable.

The Company maintains, at times, a cash balance at a single financial institution in excess of the $250,000 limit insured by the Federal Deposit Insurance Corporation.

The Company considers accounts receivable to be fully collectible, and no allowance for bad debts has been recorded.

As of March 31, 2010 and December 31, 2009, 51% of accounts receivable was due from four customers, and 58% of accounts receivable was due from three customers, respectively.

For the three months ended March 31, 2010 and 2009, sales to two customers comprised 50%, and sales to six customers comprised 70% of sales revenue, respectively.

12. Recently Issued Accounting Standards

The Financial Accounting Standards Board (“FASB”) has established the Accounting Standards CodificationTM (“Codification” or “ASC”) as the single source of authoritative GAAP recognized by the FASB to be applied by non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates, which will serve to updat e the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. GAAP is not intended to be changed as a result of the FASB’s Codification project, but it will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has implemented the Codification in these financial statements by providing a plain English approach when describing any new or updated authoritative guidance.

8

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS - CONTINUED

March 31, 2010

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

12. Recently Issued Accounting Standards - Continued

In May 2009, the FASB issued general standards for the accounting and reporting of subsequent events that occur between the balance sheet date and issuance of financial statements. Issuers will be required to recognize the effects, if material, of subsequent events in the financial statements if the subsequent event provides additional evidence about conditions that existed as of the balance sheet date. The issuer must also disclose the date through which subsequent events have been evaluated and the nature of any non-recognized subsequent events. Non-recognized subsequent events include events that provide evidence about conditions that did not exist as of the balance sheet date, but which are of such a nature that they must be disclosed to keep the financial statements from being misleading. These new standards became effective for financial reporting periods ending after June 15, 2009. The adoption has had no material effect on the Company’s consolidated financial statements. The Company evaluated subsequent events through September 7, 2010, the date the financial statements were issued.

NOTE C - PROPERTY AND EQUIPMENT

Property and equipment consist of the following at March 31, 2010 and December 31, 2009:

	March 31,		December, 31,
	2010		2009
Computer equipment	$	3,648,764	$	3,115,033
Computer software		668,602		668,602
Office equipment		231,657		230,455
Leasehold improvements		324,663		324,663
Total property and equipment		4,873,686		4,338,753
Less accumulated depreciation		3,247,290		3,054,303
	$	1,626,396	$	1,284,450

Depreciation expense was $192,987 and $128,535 for the three months ended March 31, 2010 and 2009, respectively.

NOTE D - LINE OF CREDIT

The Company had a $1,000,000 revolving line of credit with a bank secured by accounts receivable, inventory, equipment, and intangibles which expired in April 2010. The line of credit was due on demand, and there were no amounts outstanding as of March 31, 2010. Interest was at prime plus 0.75% and was 3.25% as of March 31, 2010. The line of credit had certain financial covenants which the Company was in compliance with at March 31, 2010. The line of credit was guaranteed by certain shareholders of the Company.

9

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS - CONTINUED

March 31, 2010

NOTE E - LONG-TERM CAPITAL LEASE OBLIGATIONS

The Company leases equipment and software under capital leases expiring in various years through 2013. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are depreciated using straight-line and declining-balance methods over the life of the capital lease or the estimated life whichever is shorter. Equipment and software serve as collateral for capital lease obligations.

The following is a summary of equipment under capital leases at March 31, 2010 and December 31, 2009:

	March 31,		December 31,
	2010		2009
Equipment and software	$	1,430,689	$	1,028,898
Less accumulated depreciation		750,299		781,617
Equipment, net	$	680,390	$	247,281

Years Ending December 31,	Amount
Remainder of 2010	$	353,573
2011		219,754
2012		219,754
2013		18,313
Total minimum lease payments		811,394
Less amount representing interest		( 84,904	)
Present value of minimum lease payments		726,490
Less current portion		(357,047	)
Long-term portion	$	369,443

10

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS - CONTINUED

March 31, 2010

NOTE F - STOCK OPTIONS

The Company adopted a stock option plan in 2001. Effective February 1, 2008, the Company amended the plan to increase the shares of common stock reserved from 5,650,000 to 8,750,000 shares. The Company may issue incentive stock options to officers, directors, and key employees as defined under current tax laws and non-qualified stock options to non-employees of the Company. The option price, number of shares, and grant date are determined at the discretion of the Company’s Board of Directors. Currently, options for approximately 8.1 million shares of common stock have been issued under this plan. The options are either exercisable in two equal installments, with the first installment becoming exercisable on the date of the grant of the options, or they are fully exercisable on the date of the grant of the options. The options have expiration date s of five and ten years from the dates of the grant of the options. Accounting guidance related to Share-Based Payment requires stock option plans to be accounted for using the Fair-Value-Based Method.

Under the accounting guidance, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized over the stated vesting period. The Company uses the Black-Scholes option-pricing model to estimate the fair value of employee stock-based compensation at the date of grant, which requires the use of accounting judgment and financial estimates. The expected life of the options used in this calculation is the period of time the options are expected to be outstanding, and is determined by the simplified method which states, “The midpoint of the average vesting period and contractual life is an acceptable expected life assumption.” Expected stock volatility is based on the median historical volatility of comparable guideline public companies. Expected option exercises, the period of time the options are held, forfeitures, employee terminations and other criteria are based on previous experiences. The risk-free rates for periods within the contractual life of the options are based on United States Treasury Note rates in effect at the time of the grant for the period equal to the expected life. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the

11

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS - CONTINUED

March 31, 2010

NOTE F - STOCK OPTIONS - Continued

related amounts recognized in the Statements of Income. In December 2007, accounting guidance was issued which extends the use of the “simplified” method for those companies that conclude that it is not reasonable to base its estimate of expected life of options on its historical share option exercise experience. The Company uses the “simplified” method for all estimations of stock option compensation expense due to insufficient historical exercise data and changes in the terms of the share option grants.

There were no stock options granted in 2009 or the first three months of 2010.

A summary of the activity under the stock option plan and related information is presented below:

	March 31, 2010
		Weighted
	Number	Average
	of Shares	Exercise
	(Options)	Price
Balance at beginning of period	4,149,979	$	0.64
Options granted	-		-
Options forfeited	-		-
Options exercised	-		-
Balance at end of period	4,149,979	$	0.64
Exercisable at end of period	4,149,979	$	0.64

As of March 31, 2010, the total compensation cost related to unvested stock-based awards granted to employees under the Company’s stock option plan but not yet recognized was $0. If all stock options were exercised, there would be no significant change in ownership percentages to the majority shareholders.

12

Strategic Office Solutions, Inc.
dba Daegis

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS - CONTINUED

March 31, 2010

NOTE F - STOCK OPTIONS - Continued

A summary of the Company’s nonvested stock option activity for the period ended March 31, 2010 is as follows:

	March 31, 2010
	Number		Weighted
	of Shares		Average
	(Options)		Fair Value
Nonvested at beginning of period	409,642		$	0.32
Granted	-			-
Vested	(409,642	)		0.32
Forfeited	-			-
Nonvested at end of period	-			-

NOTE G- 401(k) PLAN

The Company has a 401(k) plan effective January 2003. The plan is available to all employees who have met certain service requirements. On October 15, 2007, the Company amended the plan to change employer contributions from discretionary to 100% of the first 3% of participants’ contributions and 50% of the next 2% of participants’ contributions. The Company’s contributions were $53,735 and $50,095 for the three months ended March 31, 2010 and 2009, respectively.

NOTE H – SUBSEQUENT EVENT

On June 29, 2010 the Company sold all of its issued and outstanding shares of common stock to Unify Corporation for approximately $37.4 million. Shareholders of the Company received $24.0 million in cash, 2,085,714 shares of Unify Corporation common stock, and convertible notes totaling $6.2 million. The notes are convertible for a total of 1,771,428 shares of Unify Corporation common stock.

13

EX-99.3

UNIFY CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     On June 29, 2010, Unify Corporation (‘Unify”) acquired Strategic Office Solutions, Inc., a California corporation (“Daegis”), by merging a newly-formed, wholly-owned subsidiary of Unify with and into Daegis (the “Merger”) pursuant to the Agreement and Plan of Merger by and among Unify, Unify Acquisition Corp., Daegis, and the shareholders of Daegis (the “Merger Agreement”).

Pursuant to the Merger Agreement, each outstanding share of Daegis common stock was automatically converted into the right to receive its pro rata share of $24.0 million in cash, 2,085,714 shares of Unify common stock and $6.2 million in convertible promissory notes.

To finance the cash portion of the purchase price for Daegis, Unify entered into a $30.0 million senior credit agreement between Unify and Hercules Technology II, L.P. (“Hercules”). In connection with the Hercules credit agreement, Unify issued Hercules a warrant to purchase 718,860 shares of Unify common stock.

The following unaudited pro forma condensed combined financial statements are presented to illustrate the estimated effects of the acquisition of Daegis on Unify’s consolidated financial statements. Such pro forma financial statements are based upon historical financial statements and notes thereto of Unify and Daegis. These unaudited pro forma condensed combined financial statements should be read in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Unify’s Annual Report on Form 10-K, Unify’s historical financial statements and accompanying notes appearing in its historical period SEC filings including Forms 10-K and 10-Q, and the historical financial statements and accompanying notes of Daegis (contained elsewhere in this Current Report on Form 8-K). The financial statements of Daegis and Unify have been prepared in conformity with the accounting principles generally accepted in the United States of America (US GAAP).

The unaudited pro forma condensed combined balance sheet as of April 30, 2010 gives pro forma effect to the Merger and related events as if they had been consummated on April 30, 2010. The unaudited pro forma condensed combined statement of operations for the year ended April 30, 2010 gives pro forma effect to the Merger and related events as if they had been consummated on May 1, 2009, the beginning of Unify’s 2010 fiscal year. The unaudited pro forma financial statements are presented for informational purposes only and are not intended to represent or be indicative of the financial position or results of operations that would have been achieved if the Merger had been completed as of the dates indicated, and should not be taken as representative of future consolidated results of operations or financial position of Unify. Preparation of the unaudi ted pro forma financial statements for all periods presented required management to make certain judgments and estimates to determine the pro forma adjustments such as purchase accounting adjustments, which include, among others, amortization charges from acquired intangible assets and adjustments to interest expense. In addition, with respect to the unaudited pro forma condensed combined balance sheet at April 30, 2010, management estimated the fair value of Daegis’ assets acquired and liabilities assumed as of April 30, 2010, based on the preliminary purchase price allocation performed as of the June 29, 2010 Merger Agreement signing date.

A final determination of fair values relating to the Merger may differ materially from preliminary estimates and will include management’s final valuation of the fair value of assets acquired and liabilities assumed. This final valuation will be based on the actual net tangible and intangible assets of Daegis that existed as of the date of the completion of the Merger. The final valuation may materially change the allocation of the purchase price, which could materially affect the fair values assigned to the assets and liabilities, and could result in a material change to the unaudited pro forma condensed combined financial statements.

The unaudited pro forma information does not reflect cost savings, operating synergies or revenue enhancements expected to result from the Merger or the costs to achieve these cost savings, operating synergies and revenue enhancements.

UNIFY CORPORATION
Unaudited Pro Forma Condensed Combined Balance Sheet
As of April 30, 2010

	Unify			Daegis
	April 30,			April 30,					Pro Forma				Pro Forma
	2010			2010		Combined			Adjustments				Combined
ASSETS	(In thousands)
Current assets:
Cash and cash equivalents	$	3,055		$	3,751	$	6,806		$	741		A	$	7,547
Accounts receivable, net		6,194			5,318		11,512							11,512
Prepaid expenses and other current assets		493			500		993							993
Total current assets		9,742			9,569		19,311			741				20,052
Property and equipment, net		350			1,894		2,244							2,244
Goodwill		15,835			-		15,835			16,505		B		32,340
Intangibles, net		8,613			-		8,613			14,700		C		23,313
Other assets, net		228			136		364			991		D		1,355
Total assets	$	34,768		$	11,599	$	46,367		$	32,937			$	79,304
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	380		$	512	$	892		$	3,319		E	$	4,211
Current portion of long term debt		1,397			-		1,397			(168	)	F		1,229
Accrued compensation and related expenses		1,308			954		2,262							2,262
Other accrued liabilities		2,349			68		2,417							2,417
Deferred revenue		9,733			-		9,733							9,733
Total current liabilities		15,167			1,534		16,701			3,151				19,852
Long term debt, net of current portion		12			-		12			31,434		G		31,446
Deferred tax liabilities, net		557			-		557							557
Other long term liabilities		636			534		1,170							1,170
Commitments and contingencies		-			-		-							-
Stockholders’ equity:
Common stock		10			310		320			(308	)	H		12
Additional paid-in capital		80,312			1,154		81,466			8,227		I		89,693
Accumulated other comprehensive income		383			-		383			-				383
(Accumulated deficit) retained earnings		(62,309	)		8,067		(54,242	)		(9,567	)	J		(63,809	)
Total stockholders’ equity		18,396			9,531		27,927			(1,648	)			26,279
Total liabilities and stockholders’ equity	$	34,768		$	11,599	$	46,367		$	32,937			$	79,304

See accompanying footnotes to Unaudited Pro Forma Condensed Combined Financial Statements.

UNIFY CORPORATION
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended April 30, 2010
(In thousands, except per share data)

										Pro Forma				Pro Forma
	Unify			Daegis			Combined			Adjustments				Combined
Revenues:
Software licenses	$	7,379		$	-		$	7,379						$	7,379
Services		15,816			23,219			39,035							39,035
Migration Solutions		5,397			-			5,397							5,397
Total revenues		28,592			23,219			51,811			-				51,811
Cost of Revenues:
Software licenses		346			-			346							346
Services		3,202			3,734			6,936							6,936
Migration Solutions		2,537			-			2,537							2,537
Total cost of revenues		6,085			3,734			9,819			-				9,819
Gross profit		22,507			19,485			41,992			-				41,992
Operating Expenses:
Product development		6,470			2,258			8,728							8,728
Selling, general and administrative		17,664			14,428			32,092			3,920		K		36,012
Total operating expenses		24,134			16,686			40,820			3,920				44,740
Income (loss) from operations		(1,627	)		2,799			1,172			(3,920	)			(2,748	)
Interest expense		(267	)		-			(267	)		(2,840	)	L		(3,107	)
Other income (expense), net		(14	)		(11	)		(25	)						(25	)
Income (loss) before income taxes		(1,908	)		2,788			880			(6,760	)			(5,880	)
Provision for income taxes		(131	)		253			122							122
Net income (loss)	$	(1,777	)	$	2,535		$	758		$	(6,760	)		$	(6,002	)
Net income (loss) per share:
Basic	$	(0.18	)											$	(0.45	)
Dilutive	$	(0.18	)											$	(0.45	)
Shares used in computing net income (loss) per share:
Basic		9,691									3,514		M		13,205
Dilutive		9,691									3,514		N		13,205

UNIFY CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1.Basis of Presentation

     The unaudited pro forma condensed combined financial statements were prepared using the purchase method of accounting and are based on the historical financial statements of Unify and Daegis. The purchase method of accounting was based on Financial Accounting Standard Board (“FASB”) guidance on business combinations. Unify applied the provisions of this guidance for the purpose of Unify’s pro forma disclosures. Unify’s fiscal year ends on April 30 of each year and Daegis’ fiscal year ends on December 31 of each year. The unaudited pro forma condensed combined balance sheet as of April 30, 2010 combines the historical Unify balance sheet as of April 30, 2010 and Daegis’ balance sheet as of April 30, 2010 as if the Merger had closed on April 30, 2010. The unaudited pro forma condensed combined statement of operations for the year ended April 30, 2010, combines the historical Uni fy and Daegis statements of operations for the twelve months ended April 30, 2010 as if the Acquisition had closed on May 1, 2009. The statement of operations of Daegis for the twelve months ended April 30, 2010 has been regrouped and reclassified to match the groupings of Unify’s statement of operations.

2.Purchase Price Allocation

On June 29, 2010, Unify Corporation acquired Strategic Office Solutions, Inc., a California corporation (“Daegis”), by merging a wholly owned subsidiary of Unify with and into Daegis. As consideration for the acquisition of Daegis, Unify paid the shareholders of Daegis $24.0 million in cash and, in a private placement, issued these shareholders $6.2 million in convertible promissory notes (the “Convertible Notes”) and 2,085,714 shares of Unify common stock. Unify has agreed to file with the Securities and Exchange Commission (the “SEC”) a registration statement registering the shares issued to the Daegis shareholders and the shares issuable upon conversion of the Convertible Notes. Each of the merger agreement pursuant to which Unify acquired Daegis and the registration rights agreement pursuant to which Unify has agre ed to register these shares was filed with the SEC as an exhibit to Unify’s Current Report on Form 8-K filed on July 1, 2010.

The acquisition will be accounted for under the purchase method of accounting, and under this method of accounting the total consideration was approximately $37.4 million.

The following table summarizes the components of the estimated total purchase price determined for accounting purposes of these pro forma condensed combined financial statements (in thousands):

Cash	$	24,000
Fair value of Unify common stock issued to Daegis stockholders		7,217
Fair value of convertible promissory notes issued to Daegis stockholders		6,200
Total consideration	$	37,417

The fair value of the shares of Unify common stock issued was estimated using the closing price of Unify’s common stock on June 29, 2010 (the acquisition date), or $3.46 per share.

The purchase price was allocated based on the estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the Merger. An allocation of the purchase price was made to major categories of assets and liabilities in the accompanying unaudited pro forma condensed combined balance sheet based on management’s best estimates, assuming the Acquisition had closed on April 30, 2010. The excess of the purchase price over the estimated fair value of tangible and identifiable intangible assets acquired and liabilities assumed was allocated to goodwill.

Goodwill and other intangibles are based on management’s best estimates. The final determination of goodwill and other intangibles will be based on the results of an independent valuation expert’s report. The report of the third-party valuation expert will be used to determine intangible assets, thus the provisional measurements of intangible assets, and the resulting goodwill are subject to change. The final allocation of the purchase price will be

determined after completion of a thorough analysis to determine the fair values of Daegis’ tangible and identifiable intangible assets and liabilities. Accordingly, the final purchase accounting adjustments could be materially different from the preliminary unaudited pro forma adjustments presented herein. Any increase or decrease in the fair values of Daegis’ assets, liabilities and other items, as compared to the information shown herein, will change the portion of the purchase price allocable to goodwill and will also impact the combined statements of operations due to adjustments in amortization or accretion related to the adjusted assets or liabilities. The allocation of the purchase price in the unaudited pro forma condensed combined balance sheet as of April 30, 2010 was prepared based on management’s best estimates of the fair value of assets acquired and liabilities assumed. Accordingly, the purchase price is allocated to the assets and liabilities of Daegis as presented below (in thousands).

Cash and cash equivalents	$	3,751
Accounts receivable		5,318
Prepaids and other current assets		500
Property and equipment		1,894
Other assets		136
Accounts payable		(3,831	)
Accrued expenses		(1,022	)
Other long term liabilities		(534	)
Amortizable intangible assets:
Customer relationships		4,200
Trademarks		2,000
Developed technology		6,800
Backlog		200
Non-compete agreement		500
Patents		1,000
Goodwill		16,505
Total net assets acquired	$	37,417

     Intangible assets of $14,700 consist primarily of customer relationships, trademarks, developed technology, backlog, non-compete agreement and patents. Customer relationships relate to Daegis’ ability to sell existing, in-process and future versions of its products to its existing customers. Trademarks represent future value to be derived associated with the use of existing trademarks. Developed technology relates to Daegis’ product offerings which are currently generating revenue. Backlog represents the value of projects that were in process as of the date of the merger. The non-compete agreement represents the arrangement in place with the former CEO of Daegis. Patents represent the future value to be derived associated with the use of existing patents. Unify expects to amortize customer relationships over their expected useful life of 10 years. Unify expects to amortize trademarks over their expec ted useful life of 5 years. Unify expects to amortize developed technology over the expected useful life of 6 years. Unify expects to amortize backlog over the expected useful life of .5 years. Unify expects to amortize the non-compete agreement over the expected useful life of 3 years. Unify expects to amortize patents over the expected useful life of 10 years.

Of the total estimated purchase price, $16,505 was allocated to goodwill. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. In accordance with FASB guidance, goodwill resulting from business combinations is tested for impairment at least annually (or more frequently if certain indicators are present). In the event that management determines that the value of goodwill has become impaired, the combined company will incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

3.Pro Forma Adjustments

     The accompanying unaudited pro forma condensed combined financial statements have been prepared as if the Merger was completed on April 30, 2010 for balance sheet purposes and on May 1, 2009 for statement of operations purposes and reflect the following pro forma adjustments:

(A)	Adjustment to record cash retained from the initial draw on the line of credit.
(B)	Adjustment to record the goodwill resulting from the Merger.
(C)	Adjustment to record the fair value of intangible assets acquired, which includes customer relationships, trademarks, developed technology, backlog, non-compete agreement and patents.
(D)	Adjustment to record the asset related to the Hercules commitment and due diligence fee.
(E)	Adjustment to record the liability associated with the working capital adjustment.
(F)	Adjustment to record the change in current portion of long term debt as follows (in thousands):

Eliminate Comvest debt which was repaid as of the date of merger	$	(768	)
Addition of current portion of long term debt related to Hercules term loan		600
Total	$	(168	)

(G)   Adjustment to record the change in long term debt as follows (in thousands):

Addition of long term debt related to Hercules term loan	$	23,400
Addition of convertible promissory notes issued to stockholders		6,200
Addition of initial draw on Hercules line of credit at date of merger		4,000
Amount recorded for the warrant discount associated with warrants issued to Hercules		(2,166	)
Total	$	31,434

(H)   To adjust common stock as follows (in thousands):

Eliminate Daegis' historical common stock	$	(310	)
Par value of Unify common stock issued in connection with the acquisition		2
Total	$	(308	)

(I)   To adjust additional paid-in capital as follows (in thousands):

Eliminate Daegis' historical stockholders' equity	$	(1,154	)
Additional paid-in capital recorded related to the warrant discount		2,166
Fair value, net of par value, of Unify common stock issued in connection with the Merger		7,215
Total	$	8,227

(J)   Adjustment to accumulated deficit as follows (in thousands):

Eliminate Daegis' historical retained earnings	$	(8,067	)
Transaction expenses recorded at time of acquisition		(1,500	)
Total	$	(9,567	)

(K)  Adjustment to selling, general and administrative expenses as follows (in thousands):

Record expense for amortization of intangibles	$	2,420
Record transaction expenses related to merger		1,500
Total	$	3,920

(L)	Adjustment to record the interest expense associated with the Hercules debt.
(M)	The pro forma basic net loss per share is based on the historical number of shares of Unify common stock used in computing basic net loss per share, plus 3.51 million shares of Unify common stock assumed to be issued in connection with the acquisition. The shares issued assumes the conversion of the $5 million convertible note to the former stockholders of Daegis within the first year after the date of the merger. The $1.2 million escrow note is assumed to convert within 18 months from the closing date of the acquisition.
(N)	The pro forma diluted net loss per share is based on the historical number of shares of Unify common stock used in computing diluted net loss per share, plus 3.51 million shares of Unify common stock assumed to be issued in connection with the acquisition. The shares issued assumes the conversion of the $5 million convertible note to the former stockholders of Daegis within the first year after the date of the merger. The $1.2 million escrow note is assumed to convert within 18 months from the closing date of the acquisition.