As filed with the Securities and Exchange Commission on August 30, 1996December 23, 1999
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------------

FORM______________________

Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------

UNITY FIRST ACQUISITION CORP.______________________

GraphOn Corporation
(Exact name of registrantRegistrant as specified in its charter)

Delaware 6770
Delaware 7372 13-3899021
(State or other jurisdiction (Primary Standard (I.R.S. Employer
jurisdiction of Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification
incorporation Classification Code) Number)
or organization)

245 Fifth

150 Harrison Avenue
- Suite 1500
New York, New York 10016
(212) 696-4282Campbell, California 95008
(408) 370-4080
(Address, including zip code, and telephone number, including area code, of
registrant'sRegistrant's principal executive offices)

----------------

LAWRENCE BURSTEIN,______________________

Walter Keller
President
UNITY FIRST ACQUISITION CORP.
245 FifthGraphOn Corporation
150 Harrison Avenue
- Suite 1502
New York, New York 10016
(212) 696-4282Campbell, California 95008
(408) 370-4080
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

----------------

Copies to:
IRA I. ROXLAND,----------
Ira Roxland, Esq.
DAVID ALAN MILLER,Joseph H. Schmitt, Esq.
PARKER DURYEE ROSOFFCooperman Levitt Winikoff Lester & HAFT GRAUBARD MOLLEN & MILLER
529 Fifth Avenue 600Newman, P.C.
800 Third Avenue
New York, New York 10017 New York, New York 1001610022
(212) 599-0500 (212) 818-8661688-7000
Fax: (212) 972-9487 Fax: (212) 818-8881

----------------755-2839

______________________

Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statementregistration statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. /X/

[x]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /[_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /[_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /[_]

CALCULATION OF REGISTRATION FEE

- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of each classEach Class of Amount to be Proposed maximum Proposed maximum Amount of
securitiesPrice Per Offering Registration
Securities to be registered registered offering price aggregate offering registration
per unit(1) price(1) feeRegistered be Registered Share (1) Price (1) Fee (1)
--------------------------- ------------- --------- -------- -------
- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Units, consisting of one share of Common Stock, $.0001 par value, one Class A Warrant
and one Class B Warrant, each Warrant to
purchase one share of Common
Stock(2).................. 1,437,500 uts. $6.00Stock............... 300,000 shs. $ 8,625,000 $ 2,974.1420.00 $6,000,000.00 $1,584.00
- -------------------------------------------------------------------------------------------------------------------------
Underwriter's Unit Purchase Option........... 125,000 opts. - $ 100 (3)
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Units, issuable upon exercise of the
Underwriter's Unit Purchase Option,
consisting of one share of Common Stock,
$.0001 par value, one Class A Warrant and one
Class B Warrant, each Warrant to purchase
one share of Common
Stock(4).................. 125,000 uts. $6.60 $ 825,000 $ 284.48
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Class A Warrants, each to purchase one share
of Common Stock(4).......... 100,000 wts. - - (3)
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Class B Warrants, each to purchase one Share
of Common Stock(4).......... 100,000 wts. - - (3)
- -------------------------------------------------------------------------------------------------------------------------
Common Stock, $.0001 par value, issuable upon
exercise of Class A Warrants(5).............. 1,662,500 shs. $5.50 $ 9,143,750 $ 3,153.02
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Common Stock, $.0001 par value, issuable upon
exercise of Class B Warrants(5)............. 1,662,500 shs. $7.50 $12,468,750 $ 4,299.57
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Total..................... $10,711.21

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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.

(2) Includes 187,500 Units457(c) under the Securities Act of 1933.

----------------------

Pursuant to Rule 429, promulgated under the Securities Act of 1933, the
prospectus forming a part of this registration statement also relates to
(1)(i)(A) 1,250,000 shares of common stock issuable pursuantupon the exercise of
1,250,000 Class A redeemable common stock purchase warrants and (B) 1,250,000
shares of common stock issuable upon the exercise of 1,250,000 Class B
redeemable common stock purchase warrants (collectively, the "IPO Securities"),
(ii)(A) 125,000 shares of common stock, (B) 125,000 shares of common stock
issuable upon the exercise of 125,000 Class A common stock purchase warrants and
(C) 125,000 shares of common stock issuable upon the exercise of 125,000 Class B
common stock purchase warrants, issuable to the Underwriter's over-
allotment option.

(3) No fee pursuant to Rule 457(g).

(4) Represents outstanding Warrants which may be sold by a Warrantholder aftermanaging underwriters of the consummation of a Business Combination (as defined herein).

(5) Includes shares of Common Stock reserved for issuanceIPO
Securities upon the exercise of the Warrants included in the Units subject to the Underwriter's over-
allotmentmanaging underwriters' unit purchase option,
and (iii)(A) 200,000 shares of Common Stock reserved for issuancecommon stock issuable upon the exercise of
200,000 Class A common stock purchase warrants and (B) 200,000 shares of common
stock issuable upon the Warrantsexercise of 200,000 Class B common stock purchase
warrants issued to officers and directors of registrant, all initially included
in the Units reserved for issuanceregistrant's registration statement on Form S-1 (File No. 333-11165)
declared effective on December 12, 1996 and (2)(i) 876,790 shares of common
stock issuable upon the exercise of the Underwriter's Unit Purchase Optioncommon stock purchase warrants assumed by
registrant pursuant to a merger on July 12, 1999 and (ii) 250,000 shares of
Common
Stock reserved for issuancecommon stock issuable upon the exercise of outstanding Warrants; also
includes250,000 Class A common stock purchase
warrants issued in consideration for consulting services performed in connection
with the merger, all initially included in the registrant's registration
statement on Form S-4 (File No. 333-76333) declared effective on June 15, 1999.

______________________

The Registrant hereby amends this registration statement on such presently indeterminate number of additional shares of Common
Stockdate or
dates as may be issuednecessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to the respective anti-dilution provisions
of the Warrants and the Underwriter's Unit Purchase Option.

--------------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTIONsaid Section 8(a),
MAY DETERMINE.

- -------------------------------------------------------------------------------may determine.
================================================================================

InformationThe information contained hereinin this prospectus is subject to completion or amendment. A
registration statement relating tonot complete and may be changed.
We may not sell these securities has beenuntil the registration statement filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomesCommission is effective. This prospectus shallis not constitute an offer
to sell or the
solicitation ofsecurities and it is not soliciting an offer to buy nor shall there be any sale of these securities in
any state in which suchwhere the offer solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.

------------------is not permitted.

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Subject to Completion Preliminary- Dated December 23, 1999

Prospectus

dated August 30, 1996

PROSPECTUS

1,250,000 UNITS

UNITY FIRST ACQUISITION CORP.

EACH UNIT CONSISTING OF ONE SHARE OF COMMON STOCK,
ONE CLASS A COMMON STOCK PURCHASE WARRANT
AND ONE CLASS B COMMON STOCK PURCHASE WARRANT

------------------

Unity First Acquisition Corp. ("Company") is offering hereby 1,250,000 Units
("Units"), each consisting of one share of Common Stock, par value $0.0001 per
share ("Common Stock"), one Class A Redeemable Common Stock Purchase Warrant
("Class A Warrants") and one Class B Redeemable Common Stock Purchase Warrant
("Class B Warrants" and together with the Class A Warrants, the "Warrants"). The
Common Stock and the Warrants will become separable and transferable only upon
consummation of a Business Combination (as hereinafter defined). One Class A
Warrant and one Class B Warrant each entitle the holder to purchase one share of
Common Stock at a price of $5.50 and $7.50, respectively, commencing on the
later of (i) the consummation of a Business Combination or (ii) one year from
the date of this Prospectus and ending on , 2002 [six years after the
effective date of the Registration Statement (as hereinafter defined)]. The
Class A Warrants and the Class B Warrants are redeemable, each as a class, in
whole and not in part, at the option of the Company and with the consent of the
Underwriter, at a price of $.05 per Warrant at any time after the Warrants
become exercisable upon not less than 30 days' prior written notice, provided
that the last reported bid price of the Common Stock equals or exceeds $8.50
per share, with respect to the Class A Warrants, and $10.50 per share, with
respect to the Class B Warrants, for the 20 consecutive trading days ending on
the third day prior to the notice of redemption. See "Description of
Securities."

Prior to this offering, there has been no public market for the Units, theGRAPHON CORPORATION

300,000 shares of Common Stock

or the Warrants and there can be

no assurance that such a market will develop after the completionThe person named on page 62 of this offering. For information regardingprospectus, whom we call the factors considered in determining"selling
stockholder," may use this prospectus to offer and sell up to 300,000 shares of
our common stock from time to time. We are registering these shares for offer
and sale as required under the initial public offering priceterms of a certain registration rights agreement
between us and the selling stockholder. Our registration of the Units andoffered shares
does not mean that the exercise priceselling stockholder will offer or sell any of these
shares. We will receive no proceeds of any sales of the Warrants, see "Underwriting." The Company anticipates that the Units will be
quoted on the OTC Bulletin Board under the symbol "UFACU" upon completion of
this offering.

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND ARE NOT SUBJECT
TO THE PROTECTIONS OF THE RULES UNDER THE SECURITIES ACT OF 1933 RELATING TO
"BLANK CHECK" OFFERINGS. SEE "RISK FACTORS" ON PAGE 12.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
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Per Unit.... $6.00 $0.48 $5.52
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Total(3).... $7,500,000 $600,000 $ 6,900,000
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- ---------
(1) Does not include a 3% non-accountable expense allowance which the Company
has agreed to pay to the Underwriter. The Company has also agreed to sell
to the Underwriter an option ("Unit Purchase Option") to purchase up to
125,000 Units and to indemnify the Underwriter against certain liabilities
under the Securities Act of 1933, as amended (the "Securities Act"). See
"Underwriting."

(2) Before deducting estimated expenses payableoffered shares by the
Company, including the
Underwriter's non-accountable expense allowance in the amount of $225,000
($258,750 if the Underwriter's over-allotment option is exercised in
full), estimated at $450,000.

(3) The Company has granted the Underwriter a 45-day option to purchase up to
187,500 additional Units upon the same terms and conditions as set forth
above, solely to cover over-allotments, if any. If such over-allotment
option is exercised in full, the total Price to Public, Underwriting
Discounts and Proceeds to Companyselling stockholder, but we will be $8,625,000, $690,000 and
$7,935,000, respectively. See "Underwriting."

The Units are offered, subject to prior sale, when, as and if delivered to and
accepted by the Underwriter and subject to approval of certain legal matters by
counsel and certain other conditions. The Underwriter reserves the right to
withdraw, cancel or modify this offering and to reject any order in whole or in
part. It is expected that delivery of certificates will be made against payment
therefor on or about , 1996, at the offices of the Underwriter in
New York City.

GKN SECURITIES

, 1996

STATE BLUE SKY INFORMATION

The Units will only be offered and sold by the Company in the States of
Delaware, District of Columbia, Florida, Hawaii, Illinois, Maryland, New York
and West Virginia (the "Primary Distribution States"). In addition, such
securities will be immediately eligible for resale in the secondary market in
each of the Primary Distribution States and in the States of [Iowa and
Pennsylvania]. Purchasers of such securities either in this offering or in any
subsequent trading market which may develop must be residents of such states.
The Company will amend this prospectus for the purpose of disclosing additional
states, if any, in which the Company's securities will be eligible for resale in
the secondary trading market.

---------------------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE UNITS AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

---------------------

FURTHER INFORMATION

The Company intends to furnish to its stockholders annual reports
containing financial statements audited and reported upon by its independent
public accounting firm and such other reports as the Company may determine to be
appropriate or as may be required by law.

SUMMARY

THE FOLLOWING IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE
DETAILED INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
APPEARING ELSEWHERE IN THIS PROSPECTUS. EACH PROSPECTIVE INVESTOR IS URGED TO
READ THIS PROSPECTUS IN ITS ENTIRETY. UNLESS OTHERWISE INDICATED, THE
INFORMATION IN THIS PROSPECTUS DOES NOT GIVE EFFECT TO THE EXERCISE OF THE
UNDERWRITER'S OVER-ALLOTMENT OPTION, THE UNIT PURCHASE OPTION AND THE WARRANTS.

THE COMPANY

BUSINESS OBJECTIVE

Unity First Acquisition Corp. ("Company") was formed on May 30, 1996 to
serve as a vehicle to effect a merger, exchange of capital stock, asset
acquisition or other similar business combination (a "Business Combination")
with an operating business (a "Target Business") which the Company believes has
significant growth potential. The Company intends to utilize cash (to be derived
from the proceeds of this offering), equity, debt or a combination thereof in
effecting a Business Combination. The Company's efforts in identifying a
prospective Target Business will be limited to the following industries: (i) the
manufacture of analytical and controlling equipment, chemicals and allied
products, electronic equipment and medical instrumentation; (ii) health services
(including HMOs, laboratories and nursing homes); (iii) environmental services
and products; (iv) engineering and construction; (v) wholesale and retail
distribution (including discount operations) of home furnishings, office
supplies, computers and related products, medical equipment and supplies,
apparel and accessories, automotive parts and supplies and food and beverage
products; (vi) internet and other new media products and services; and (vii)
communications and entertainment ("Target Industries").

PRIOR INVOLVEMENT OF PRINCIPALS IN "BLANK CHECK" COMPANIES

The officers and directors of the Company (other than Mr. Norman Leben)
have held similar positions in seven other "blank

check" companies (i.e, a development stage company that has no specific business
plan or has indicated that its business plan is to engage in a merger or
acquisition with an unidentified company), each of which has consummated a
Business Combination as of the date of this Prospectus. Certain information
with respect to each such Business Combination is set forth below:

TRADING
DATE OF MARKET AND
NAME OF TARGET BUSINESS TICKER
BUSINESS COMBINATION NATURE OF BUSINESS SYMBOL
- -------------- ----------- ------------------ ------

Bloc Development March 1988 Software development NYSE
Corp.(1) (GML)

Polyvision April 1990 Manufacture and AMEX (PLI)
Corporation sale of vision projec-
tion systems,
architectural building
panels, modular
partitions and catalog
office products

T-HQ Inc. August 1991 Design and market- OTC Bulletin
ing of Nintendo and Board (TOYH)
SEGA games

SubMicron Systems August 1993 Semi-conductor capital NASDAQ-NMS
equipment manufacturer (SUBM)

Alliance November 1993 Distributor of pre- NYSE
Entertainment Corp. recorded music, (CDS)
accessories and
entertainment
related products

USCI Inc. May 1995 Centralized auto- NASDAQ-NMS
mated computer- (USCM)
based cellular
telephone activation
systems

Brazil Fast Food Corp. March 1996 Owner and operator NASDAQ
of hamburger fast food SmallCap
restaurants (BOBS)
in Brazil

- --------------------
(1) Bloc Development Corp. was acquired by Global Direct Mail Corp. in 1995.

There can be no assurance that the Company will be able to effect a
Business Combination or that the type of business or the performance of the
Target Business, if any, will be similar to that of these other "blank check"
companies. See "Management."

OFFERING PROCEEDS HELD IN TRUST

The proceeds of this offering, after payment of underwriting discounts and
the Underwriter's non-accountable expense allowance, will be $6,675,000
($7,676,250 if the Underwriter's over-allotment option is exercised in full).
Ninety percent (90%) of such amount, or $6,007,500 ($6,908,625 if the
Underwriter's over-allotment option is exercised in full), will be placed in a
trust account (the "Trust Fund"), and invested in United States government
securities. The Trust Fund will not be released until the earlier of the
consummation of a Business Combination or the liquidation of the Company, which
may not occur until 24 months from the consummation of this offering.
Therefore, unless and until a Business Combination is consummated, the proceeds
held in the Trust Fund will not be available for use by the Company for anyincur expenses related to this offering or expenses which may be incurred by the
Company related to the investigation and selection of a Target Business and the
negotiation of an agreement to acquire a Target Business. Such expenses may be
paid from the net proceeds not held in the Trust Fund (approximately $667,500 or
$767,625 if the Underwriter's over-allotment option is exercised in full). See
"Use of Proceeds."

FAIR MARKET VALUE OF TARGET BUSINESS

The Company will not acquire a Target Business unless the fair market value
of such business, as determined by the Board of Directors of the Company based
upon standards generally accepted by the financial community, such as actual and
potential sales, earnings and cash flow and book value ("Fair Market Value"), is
at least 80% of the net assets of the Company at the time of such acquisition.
If the Board of Directors is not able to independently determine that the Target
Business has a sufficient Fair Market Value, the Company will obtain an opinion
from an unaffiliated, independent investment banking firm which is a member of
the National Association of Securities Dealers, Inc. ("NASD") with respect to
the satisfaction of such criteria. Since any opinion, if obtained, would merely
state that Fair Market Value meets the 80% of net assets threshold, it is not
anticipated that copies of such opinion would be distributed to stockholders of
the Company, although copies will be provided to stockholders who request it.
The Company will not be required to obtain an opinion from an investment banking
firm as to Fair Market Value if the Board of Directors determines that the
Target Business does have sufficient Fair Market Value.

STOCKHOLDER APPROVAL OF BUSINESS COMBINATION

The Company, after signing a definitive agreement for the acquisition of a
Target Business, but prior to the consummation of any Business Combination, will
submit such transaction to the Company's stockholders for their approval, even
if the nature of the acquisition is such as would not ordinarily require
stockholder approval under applicable state law. All of the Company's
stockholders prior to this offering ("Initial Stockholders"), including all of
the officers and directors of the Company, have agreed to vote their respective
shares of Common Stock owned by them immediately prior to this offering in
accordance with the vote of the majority of all the other shares of Common Stock
("Public Shares") voted on any Business Combination. The holders of the Public
Shares will be referred to herein as the "Public Stockholders." The Initial
Stockholders shall be deemed to be "Public Stockholders" with respect to any
Public Shares they acquire. The Company will proceed with the Business
Combination only if the holders of at least a majority of the outstanding shares
of Common Stock vote in favor of the Business Combination and less than 20% in
interest of the Public Stockholders exercise their conversion rights described
below.

CONVERSION RIGHTS

At the time the Company seeks stockholder approval of any Business
Combination, the Company will offer each Public Stockholder the right to have
his shares of Common Stock converted to cash if such stockholder votes against
the Business Combination and the Business Combination is approved and
consummated. The per-share conversion price will be equal to the amount in the
Trust Fund (inclusive of any interest thereon) as of the record date for
determination of stockholders entitled to vote on such Business Combination,
divided by the number of Public Shares. Without taking into account interest,
if any, earned on the Trust Fund, the per-share conversion price would be $4.81,
or $1.19 less than the per-Unit offering price of $6.00. There will be no
distribution from the Trust Fund with respect to the Warrants included in the
Units. A Public Stockholder may request conversion of his shares at any time
prior to the vote taken with respect to a proposed Business Combination at a
meeting held for that purpose, but such request will not be granted unless such
stockholder votes against the Business Combination and the Business Combination
is approved and consummated. It is anticipated that the funds to be distributed
to the Public Stockholders who have their shares converted will be distributed
promptly after consummation of a Business Combination. The Initial Stockholders
will not have any conversion rights with respect to the shares of Common Stock
owned by them immediately prior to this offering. The Company will not
consummate any Business Combination if 20% or more in interest of the Public
Stockholders exercise their conversion rights.

ESCROW OF PRINCIPALS' SECURITIES

The shares of the Company's Common Stock owned as of the date hereof by
all of the executive officers and directors of the Company and their
respective affiliates (excluding, however, their respective spouses and adult
children) and by all persons owning 5% or more of the currently outstanding
shares of Common Stock (collectively, the "Affiliated Initial Stockholders"),
representing in the aggregate approximately 49.8% of the outstanding Common
Stock as of the date hereof, will be placed in escrow with American Stock
Transfer & Trust Company, as escrow agent (the "Escrow Agent"), until the
earlier of (i) six months following the consummation of a Business
Combination or (ii) the liquidation of the Company. During such escrow
period, such persons will not be able to sell their respective shares of
Common Stock, but will retain all other rights as stockholders of the
Company, including, without limitation, the right to vote such shares of
Common Stock. In addition, the Directors' Warrants (as hereinafter defined)
will also be deposited with the Escrow Agent, to be released only upon the
consummation of a Business Combination. Upon liquidation of the Company, the
shares will be cancelled. All other Initial Stockholders ("Non-Affiliated
Initial Stockholders") have agreed not to sell their respective shares of
Common Stock until the occurrence of a Business Combination.

LIQUIDATION IF NO BUSINESS COMBINATION

In the event that the Company does not consummate a Business Combination
within 18 months from the consummation of this offering, or 24 months from
the consummation of this offering if the "Extension Criteria" described below
have been satisfied, the Company will be dissolved and will distribute to all
Public Stockholders in proportion to their respective equity interests in the
Company, an aggregate sum equal to the amount in the Trust Fund, inclusive of
any interest thereon, plus any remaining net assets of the Company. The
Initial Stockholders have waived their respective rights to participate in
any liquidation distribution with respect to the shares of Common Stock owned
by them immediately prior to this offering. If the Company were to expend
all of the net proceeds of this offering, other than the proceeds deposited
in the Trust Fund, and without taking into account interest, if any, earned
on the Trust Fund, the per-share liquidation price would be $4.81 or $1.19
less than the per-Unit offering price of $6.00. The proceeds deposited in
the Trust Fund could, however, become subject to the claims of creditors of
the Company which could be prior to the claims of stockholders of the
Company. Accordingly, there can be no assurance that the per-share
liquidation price will not be less than $4.81, plus interest. There will be
no distribution from the Trust Fund with respect to the Warrants included in
the Units. Notwithstanding the Company's commitment to liquidate if it is
unable to effect a Business Combination within 18 months from the
consummation of this offering, if the Company enters into either a letter of
intent, an agreement in principle or a definitive agreement to effectuate a
Business Combination prior to the expiration of such 18-month period, but is
unable to

consummate such Business Combination within such 18-month period ("Extension
Criteria"), then the Company will have an additional six months in which to
consummate that Business Combination contemplated by such letter of intent or
definitive agreement, as applicable. If the Company is unable to do so by the
expiration of the 24-month period from the consummation of this offering, it
will then liquidate. Upon notice from the Company, the trustee of the Trust
Fund will commence liquidating the investments constituting the Trust Fund and
will turn over the proceeds to the transfer agent for the Common Stock for
distribution to the Public Stockholders. The Company anticipates that its
instruction to the Trustee would be given promptly after the expiration of the
applicable 18-month or 24-month period.

A Public Stockholder shall be entitled to receive funds from the Trust Fund
only in the event of a liquidation of the Company or if he seeks to convert his
shares into cash in connection with a Business Combination which he voted
against and which is actually consummated by the Company. In no other
circumstances shall a Public Stockholder have any right or interest of any kind
to or in the Trust Fund.

THE OFFERING

Securities offered 1,250,000 Units, at $6.00 per Unit, each
Unit consisting of one share of Common Stock,
one Class A Warrant to purchase one share of
Common Stock, and one Class B Warrant to
purchase one share of Common Stock. The Common
Stock and the Warrants will become separable
and transferable only upon consummation of a
Business Combination. See "Description of
Securities" and "Underwriting."

Common Stock outstanding 625,000 shares
prior to the offering

Common Stock to be
outstanding after
the offering(1) 1,875,000 shares

Warrants:
Number to be
outstanding after
the offering(2) 1,350,000 Class A Warrants
1,350,000 Class B Warrants

Exercise price The exercise price of each Class A Warrant is
$5.50 per share and the

exercise price of each Class B Warrant is
$7.50 per share, subject to adjustment in
certain circumstances. See "Description of
Securities."

Exercise period The Warrants will become exercisable on the
later of (i) the consummation of a Business
Combination or (ii) one year from the date of
this Prospectus and will expire at 5:00 p.m.,
New York City time, on , 2002.

Redemption The Warrants are redeemable, each as a class,
in whole and not in part, at the option of the
Company and with the consent of the
Underwriter, at a price of $.05 per Warrant at
any time after the Warrants become exercisable
upon not less than 30 days' prior written
notice, provided that the reported closing bid
price of the Common Stock equals or exceeds
$8.50 per share, with respect to the Class A
Warrants, and $10.50 per share, with respect
to the Class B Warrants, for the 20
consecutive trading days ending on the third
day prior to the notice of redemption.

Proposed OTC Bulletin
Board Symbol for
Units(3) UFACU

- --------------------
(1) Does not include (i) 2,700,000 shares of Common Stock reserved for issuance
upon the exercise of (A) currently outstanding Directors' Warrants (as
hereinafter defined) and (B) the Warrants, (ii) 187,500 shares of Common
Stock included in the Units subject to the Underwriter's over-allotment
option, (iii) 375,000 shares of Common Stock reserved for issuance upon the
exercise of the Warrants included in the Units subject to the Underwriter's
over-allotment option, (iv) 125,000 shares of Common Stock included in the
Units reserved for issuance upon exercise of the Unit Purchase Options, (v)
250,000 shares of Common Stock reserved for issuance upon the exercise of
the Warrants included in the Units reserved for issuance upon exercise of
the Unit Purchase Options, or (vi) 187,500 shares of Common Stock reserved
for issuance upon exercise of options available for grant under the
Company's 1996 Stock Option Plan. See "Management - Stock Option Plan,"
"Certain Transactions," and "Underwriting."

(2) Includes 100,000 Class A Warrants and 100,000 Class B Warrants heretofore
issued to the Company's officers and directors

(collectively, the "Directors' Warrants"). The Directors' Warrants are
identical to the Class A Warrants and the Class B Warrants, respectively,
except that the Directors' Warrants are not redeemable and cannot be
transferred or exercised until the consummation of a Business Combination.
See "Certain Transactions."

(3) The inclusion of the Units on the OTC Bulletin Board does not imply that a
public trading market will develop therefor or, if developed, that such
market will be sustained.

USE OF PROCEEDS

The Company intends to apply substantially all of the net proceeds of this
offering, which are estimated to be approximately $6,450,000 ($7,451,250 if the
Underwriter's over-allotment option is exercised in full), to acquire a Target
Business, including identifying and evaluating prospective acquisition
candidates, selecting a Target Business and structuring, negotiating and
consummating the Business Combination. The proceeds of this offering, after
payment of underwriting discounts and the Underwriter's non-accountable expense
allowance, will be $6,675,000 ($7,676,250 if the Underwriter's over-allotment
option is exercised in full). Ninety percent (90%) of such amount, or $6,007,500
($6,908,625 if the Underwriter's over-allotment option is exercised in full),
will be held in a trust account established with The Bank of New York until the
earlier of (i) the consummation of a Business Combination or (ii) the
liquidation of the Company.

That portion of the net proceeds of this offering that will not be held in
the Trust Fund, approximately $442,500 ($542,625 if the Underwriter's over-
allotment option is exercised in full), will be used for (i) the performance of
"due diligence" investigations of prospective acquisition candidates, (ii)
legal, accounting and other expenses attendant to such "due diligence"
investigations and to structuring, negotiating and consummating a Business
Combination, (iii) legal and accounting fees to be incurred in connection with the Company's obligationoffering.

The selling stockholder may sell the offered shares in public or private
transactions, on or off the Nasdaq SmallCap Market, at prevailing market prices
or at privately negotiated prices. The selling stockholder may sell the offered
shares directly or through agents or broker-dealers acting as principal or
agent, or in a distribution by underwriters.

Our common stock is quoted on The Nasdaq SmallCap Market under the symbol
"GOJO." The closing price of our common stock on December ___, 1999 was $_____
per share.

Please read the Risk Factors beginning on page 7 of this prospectus before
making a decision to file periodic reports, proxy statements and other
informational material withinvest in our common stock.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. It is illegal for any person to tell you
otherwise.

___________, 1999

Table of Contents

Page
----

Summary................................................... 3
Risk Factors.............................................. 7
Price Ranges of Securities................................ 19
Selected Historical Financial Data........................ 20
Management's Discussion and (iv) the
Company's generalAnalysis of
Financial Condition and administrative expenses, including $7,500 per month
payableResults of Operations.......... 22
Business.................................................. 32
Management................................................ 45
Certain Relationships and Transactions.................... 55
Principal Stockholders.................................... 59
Selling Stockholder....................................... 62
Description of Securities................................. 64
Legal Matters............................................. 69
Experts................................................... 69
Available Information..................................... 69
Index to Unity Venture Capital Associates Ltd., an affiliate of the Company's
directors. See "Use of Proceeds", "Proposed Business" and "Certain
Transactions."

RISK FACTORS

The securities offered hereby involve a high degree of risk and are not
subject to the protection of the Rules of the

12Financial Statements............................. F-1

Securities Act of 1933 relating to "blank check" offerings. See "Risk Factors."

SUMMARY FINANCIAL INFORMATION

The following data have been derivedsummary highlights selected information from this prospectus
and may not contain all the information that is important to you. To understand
our business and this offering fully, you should read this entire prospectus
carefully, including the Risk Factors and the financial statements of the
Company and
should be read in conjunction with those statements, which are
included in this Prospectus. The "As Adjusted" financial information givesaccompanying notes. Unless otherwise indicated, all share and per share amounts
give effect to our merger on July 12, 1999 with GraphOn Corporation, a
California corporation.

Our Business

We develop, market, sell and support server-based software for the
issuance ofenterprise computing environment. Server-based computing, sometimes referred to
as thin-client computing, is a computing model where traditional desktop
software applications are relocated to run entirely on a server or host
computer. Our technology uses a small software program at each desktop, which
allows the securities in this offeringuser to interface with an application as if it were running on the
user's desktop computer. This centralized deployment and management of
applications reduces the complexity and total costs associated with enterprise
computing. In addition, the ability to access such applications over the
Internet creates new operational models and sales channels. We provide the
technology to access applications over the Internet. Our server-based technology
works on today's most powerful personal computer or low-end network computer,
without application rewrites or changes to the corporate computing
infrastructure.

We have established strategic alliances with technology leaders such as Sun
Microsystems, Compuware and Corel, who have licensed our technology. Using our
technology, Sun Microsystems provides its network computers access to UNIX
applications. Compuware has expressed its intention to use our technology to
provide access over the Internet to applications built with its UNIFACE product.
Corel currently plans to use our technology to provide access to some of its
applications, such as WordPerfect(TM), over the Internet.

We are headquartered in Campbell, California with offices in Bellevue,
Washington, Concord, New Hampshire, and Reading, United Kingdom.

The Offering

Common stock offered for sale
by the selling stockholder 300,000 shares (1)
Common stock to be outstanding after offering had occurred at July 31, 1996.

July 31, 1996
-----------------------------
Actual As Adjusted(1)
---------- --------------
Balance Sheet Data:

Total assets $250,563 $6,435,063(2)

Working capital (deficit) $(14,937) $6,435,063(2)

Total liabilities $265,500 $ -

Value11,566,302 shares (1)(2)

__________
(1) Assumes the exercise by the selling stockholder of Common Stock subjectwarrants to possible conversion $ - $1,201,899(3)

Stockholders' equity (deficit) $(14,937) $6,435,063(3)

- --------------------
(1) Gives effect topurchase a
like number of shares of our common stock.

(2) Excludes 811,723 shares of our common stock issuable upon exercise of
outstanding warrants and options under our stock option plans. An
additional 1,418,677 shares are reserved for future grants under our stock
option plans.

Use of Proceeds

We will not receive any proceeds from the sale of the Unitscommon stock offered
herebyby the selling stockholder. We will receive the proceeds from the exercise of
the selling stockholder's warrants, which will amount to $2,550,000 if all of
these warrants are exercised. We intend to use any such monies, net of our
expenses in preparing this prospectus, for working capital and other general
corporate purposes.

Summary Historical Financial Data

You should read the following summary consolidated financial data in
conjunction with the audited financial statements and the application of
the estimated net proceeds therefrom. See "Underwriting."

(2) Includes $6,007,500 being held in the Trust Fundunaudited financial
statements, and their accompanying notes, which will be available to
the Company only upon the consummation of a Business Combination within the
time period describedare contained elsewhere in this
Prospectus. If a Business Combination is not
so consummated, the Company will be dissolvedprospectus. You should also read "Selected Historical Financial Data" and
the proceeds held"Management's Discussion and Analysis of Financial Condition and Results of
Operations," which are both contained elsewhere in the
Trust Fund will be distributed to the Public Stockholders. See "Usethis prospectus. The results
of Proceeds."

(3) In the event the Company consummates a Business Combination, the conversion
rights to the Public Stockholders may result in the conversion into cash of
up to approximately 19.99% of the aggregate number of Public Shares at a
per-share conversion price equal to the amount in the Trust Fund as of the
record dateoperations for the determination of stockholders entitled to vote on the
Business Combination (inclusive of any interest thereon) divided by the
number of Public Shares.

THE COMPANY

BUSINESS OBJECTIVE

The Company was formed to serve as a vehicle to effect a merger, exchange
of capital stock, asset acquisition or other similar business combination (a
"Business Combination") with an operating business (a "Target Business"). The
business objective of the Company is to seek to effect a Business Combination
with a Target Business which the Company believes has significant growth
potential. The Company intends to utilize cash (to be derived from the proceeds
of this offering), equity, debt or a combination thereof in effecting a Business
Combination. The Company's efforts in identifying a prospective Target Business
will be limited to the following industries: (i) the manufacture of analyticalnine months ending September 30, 1999 and controlling equipment, chemicals and allied products, electronic equipment
and medical instrumentation; (ii) health services (including HMOs, laboratories
and nursing homes); (iii) environmental services and products; (iv) engineering
and construction; (v) wholesale and retail distribution (including discount
operations) of home furnishings, office supplies, computes and related products,
medical equipment and supplies, apparel and accessories, automotive parts and
supplies and food and beverage products; (vi) internet and other new media
products and services; and (vii) communications and entertainment (the "Target
Industries").

To date, the Company's efforts have been limited to organizational
activities. The implementation of the Company's business plans1998 are wholly
contingent upon the successful sale of the Units offered hereby. See "Proposed
Business."

The Company was organized under the laws of the State of Delaware on
May 30, 1996. The Company's office is located at 245 Fifth Avenue, Suite 1500,
New York, New York 10016, and its telephone number is (212) 696-4282.

RISK FACTORS

The securities offered hereby involve a high degree of risk, including, but not
necessarily limited to,indicative of results that may be expected for the several factors described below. Each
prospective investor should carefully considerfull year.

Statements of Operations Data
(dollars in thousands, except per share amounts):

Nine Months Ended
September 30, Year Ended December 31,
----------------------- -----------------------------------------------------------------
1999 1998 1998 1997 1996 (1) 1995 (1) 1994 (1)

Revenues................. $ 2,450 $ 1,499 $ 2,124 $ 1,926 $ 595 $ 588 $ 1,097
Costs of revenues........ 291 251 344 463 336 214 350
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit............. 2,159 1,248 1,780 1,463 259 375 747
Operating expenses:
Selling and.............. 2,359 860 1,440 827 193 - -
marketing
General and.............. 3,725 783 1,119 325 219 389 647
administrative
Research and
development.............. 1,772 634 840 191 42 59 67
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating
expenses................. 7,856 2,277 3,399 1,343 453 448 714
---------- ---------- ---------- ---------- ---------- ---------- ----------

(Loss) income from
operations............... (5,697) (1,029) (1,619) 120 (194) (73) 33

Other income
(expense):
Interest and other
income................... 77 9 10 7 6 - -

Interest expense......... ( 9) (368) (522) (2) - - -

Other expense............ - - (17) - - - -
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Loss) income
before provision
for income taxes......... (5,630) (1,389) (2,148) 125 (188) (73) 33
Provision for
income taxes............. 1 1 1 1 1 - 15
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net (loss) income........ $ (5,631) $ (1,390) $ (2,149) $ 124 $ (189) $ (73) $ 18
========== ========== ========== ========== ========== ========== ==========
Basic and diluted
(loss) income
per share................ $ ( 0.59) $ ( 0.39) $ (0.32) $ 0.02 $ (0.03) $ - $ -
========== ========== ========== ========== ========== ========== ==========
Weighted average
common shares
outstanding.............. 9,540,148 3,583,798 6,762,669 6,000,000 6,000,000 3,345,600 3,345,600
========== ========== ========== ========== ========== ========== ==========

Balance Sheet Data
(in thousands):

September 30, 1999 December 31, 1998 December 31, 1997
------------------ ----------------- -----------------
Working capital....... $4,719 $1,193 $ 23
Total assets.......... 8,199 7,110 733
Total liabilities..... 952 1,202 615
Stockholders' equity.. 7,248 5,908 118
___________

(1) During the following risk factors
inherentyears ended December 31, 1996, 1995 and 1994, we were engaged in and affecting
the business of the Companymanufacturing, marketing and this offering before
makingselling computer terminal
hardware in an investment decision.

RECENTLY ORGANIZED COMPANY; LIMITED RESOURCES;
NO PRESENT SOURCE OF REVENUES

The Company,industry significantly different from that in which was organized on May 30, 1996 and is in the development
stage, has not as yet attempted to seek a Business Combination. Although the
Company's President and two of its three other directors have had prior
experience relating to the identification, evaluation and acquisition of a
Target Business, the Company has no such experience and, accordingly, there is
only a limited basis upon which to evaluate the Company's prospects for
achieving its intended business objectives. To date, the Company's efforts have
been limited primarily to organizational activities and this offering. The
Company has limited resources and has had no revenues to date. In addition, the
Company will not achieve any revenues (other than interest income upon the
proceeds of this offering) until, at the earliest, the consummation of a
Business Combination. Moreover, there can be no assurance that any Target
Business, at the time of the Company's consummation of a Business Combination,
or at any time thereafter, will derive any material revenues from its operations
or operate on a profitable basis.we
presently do business. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

MODIFIED REPORT6

RISK FACTORS

Before you invest in our common stock, you should be aware that there are
various risks, including those described below. You should carefully consider
these risk factors together with all other information included in this
prospectus, before you decide whether or not to purchase our shares.

We recently changed our corporate strategy and have a limited history operating
under our current business model

Although we were founded in 1982, we have a relatively brief operating
history as a provider of server-based software. We changed our strategic focus
in early 1996 from manufacturing and selling computer terminal hardware to
developing server-based software. This change in strategic focus required us to
make changes to our business processes and to make a number of significant
personnel changes, including changes and additions to our engineering and
management teams. As a result of our relatively brief operating history as a
provider of server-based software, you must consider the risks and difficulties
frequently encountered by early stage companies in new and rapidly evolving
markets. These risks include our:

. substantial dependence on products with only limited market acceptance;

. need to expand our sales and support organizations;

. competition with established and emerging companies;

. need to manage changing operations;

. reliance upon strategic relationships; and

. dependence upon key personnel.

We also depend to a significant degree on the continued growing use of the
Internet for commerce and communication. We cannot be certain that our business
strategy will be successful or that we will successfully address these risks.

We have a history of operating losses and we expect these losses to continue
and to increase, at least for the near future

We have experienced significant losses since we began operations. We expect
to continue to incur significant losses for the foreseeable future. We incurred
net losses of approximately

$5,630,500 and $2,148,500 for the nine months ended September 30, 1999 and for
the year ended December 31, 1998. We expect our expenses to increase as we
expand our business but we cannot assure you that our revenues will increase as
a result of increased spending. If revenues grow more slowly than anticipated,
or if operating expenses exceed expectations, we may not become profitable. Even
if we become profitable, we may be unable to sustain profitability.

Our operating results in one or more future periods are likely to fluctuate
significantly and may fail to meet or exceed the expectations of securities
analysts or investors

Our operating results are likely to fluctuate significantly in the future
on a quarterly and on an annual basis due to a number of factors, many of which
are outside our control. Factors that could cause our revenues to fluctuate
include the following:

. the degree of success of our recently introduced products;

. variations in the timing of and shipments of our products;

. variations in the size of orders by our customers;

. increased competition;

. the proportion of overall revenues derived from different sales
channels such as distributors, OEMs and others;

. changes in our pricing policies or those of our competitors;

. the financial stability of major customers;

. new product introductions or enhancements by us or by competitors;

. delays in the introduction of products or product enhancements by us
or by competitors;

. the degree of success of new products;

. any changes in operating expenses; and

. general economic conditions and economic conditions specific to the
software industry.

In addition, our royalty and license revenues are impacted by fluctuations
in OEM licensing activity from quarter to quarter which may involve one-time
royalty payments and license fees. Our expense levels are based, in part, on
expected future orders and sales. Therefore, if orders and sales levels are
below expectations, our operating results are likely to be materially adversely
affected. Additionally, because a significant portion of our expenses are fixed,
a reduction in sales levels may disproportionately affect our net income. Also,
we may reduce prices or increase spending in response to competition or to
pursue new market opportunities. Because of these factors, our operating results
in one or more future periods may fail to meet or exceed the expectations of
securities analysts or investors. In that event, the trading price of our common
stock would likely decline.

Our failure to adequately protect our proprietary rights may adversely affect us

Our commercial success is dependent, in large part, upon our ability to
protect our proprietary rights. We rely on a combination of patent, copyright
and trademark laws, and on trade secrets and confidentiality provisions and
other contractual provisions to protect our proprietary rights. These measures
afford only limited protection. We cannot assure you that measures we have taken
will be adequate to protect us from misappropriation or infringement of our
intellectual property.

We license essential components of our core technology from one party to
whom we pay royalties, although we hold an option, which is exercisable in the
year 2001, to purchase the technology under such license. This license may be
terminated upon material breach of the agreement, and if it is terminated our
business will be harmed.

Despite our efforts to protect proprietary rights, it may be possible for
unauthorized third parties to copy aspects of our products or obtain and use
information that we regard as proprietary. In addition, the laws of some foreign
countries do not protect our intellectual property rights as fully as do the
laws of the United States. Furthermore, we cannot assure you that the existence
of any proprietary rights will prevent the development of competitive products.
The infringement upon or loss of any proprietary rights, or the development of
competitive products despite such proprietary rights, could have a material
adverse effect on our business.

We face risks of claims from third parties for intellectual property
infringement that could adversely affect our business

At any time, we may receive communications from third parties asserting
that features or content of our products may infringe upon their intellectual
property rights. Any such claims, with or without merit, and regardless of their
outcome, may be time consuming and costly to defend. We may not have sufficient
resources to defend such claims and they could divert management's attention and
resources, cause product shipment delays or require us to enter into

new royalty or licensing agreements. New royalty or licensing agreements may not
be available on beneficial terms, and may not be available at all. If a
successful infringement claim is brought against us and we fail to license the
infringed or similar technology, our business could be materially adversely
affected.

Our business significantly benefits from strategic relationships and there can
be no assurance that such relationships will continue in the future

Our business and strategy relies to a significant extent on our strategic
relationships with other companies. There is no assurance that we will be able
to maintain or develop any of these relationships or to replace them in the
event any of these relationships are terminated. In addition, any failure to
renew or extend any licenses between us and any third party may adversely affect
our business.

Because our market is new and emerging, we cannot accurately predict its future
growth rate or its ultimate size, and widespread acceptance of our products is
uncertain

The market for server-based software, which enables programs to be accessed
and run with minimal memory resident on a desktop computer or remote user
device, still is emerging, and we cannot assure you that our products will
receive broad-based market acceptance or that this market will continue to grow.
Additionally, we cannot accurately predict our market's future growth rate or
its ultimate size. Even if server-based software products achieve market
acceptance and the market for these products grows, we cannot assure you that we
will have a significant share of that market. If we fail to achieve a
significant share of the server-based software market or if such market does not
grow as anticipated, our business, results of operations and financial condition
may be adversely affected.

We may need additional capital in the future and may not be able to secure
adequate funds on terms acceptable to us

In the future, we may need to raise additional funds to meet our
obligations, cover operating expenses, pursue business strategies, respond to
financial, technological or marketing hurdles or take advantage of new
opportunities. However, we cannot assure you that any additional funds required
will be available at the time or times needed, or available on terms acceptable
to us. If adequate funds are not available, or are not available on acceptable
terms, we may not be able to meet our obligations, pursue business strategies,
take advantage of market opportunities, develop new products or otherwise
respond to competitive pressures. Such inability could have a material adverse
effect on our business, financial condition and results of operations.

We rely on indirect distribution channels for our products and may not be able
to retain existing reseller relationships or to develop new reseller
relationships

Our products primarily are sold through several distribution channels. An
integral part of our strategy is to strengthen our relationships with resellers
such as value-added resellers, distributors, OEMs, systems integrators and other
vendors to encourage these parties to recommend or distribute our products and
to add resellers both domestically and internationally. We currently invest in
and intend to continue to invest significant resources to expand our sales and
marketing capabilities. We cannot assure you that we will be able to attract
and/or retain resellers to market our products effectively. Our inability to
attract resellers and the loss of any current reseller relationships could have
a material adverse effect on our business, results of operations and financial
condition. Additionally, we cannot assure you that resellers will devote enough
resources to provide effective sales and marketing support to our products.

Our future success will depend in part upon our ability to enhance our existing
products and to develop and introduce, on a timely basis, new products and
features that meet changing customer requirements and emerging industry
standards

The server-based software market still is emerging and characterized by
rapid technological change, evolving industry standards, changes in end-user
requirements and frequent new product introductions and enhancements. The
introduction of new technological products and the emergence of new industry
standards could render our products obsolete and unmarketable. From time to
time, we may develop new products, capabilities or technologies that have the
potential to replace or shorten the life cycle of our existing products.
Additionally, we cannot assure you that announcements of currently planned or
newly introduced product offerings will not cause customers to defer purchasing
our existing products.

In addition, we cannot assure you that we will be able to develop products
that keep pace with new technology, or that new technology will not obviate the
need for our products. If any new or enhanced technology gains widespread
acceptance and we fail to develop and provide compatible products on a timely
basis, our competitive position, business, results of operations and financial
condition could be adversely affected. Our future success depends in large part
upon:

. our ability to enhance our current products;

. our ability to develop and successfully introduce new products that
keep pace with technological developments; and

. our ability to respond to evolving end-user requirements.

We cannot assure you that we will successfully develop and market new
products or product enhancements on a timely basis, or that new products or
product enhancements we develop will achieve market acceptance.

We filed for bankruptcy on November 15, 1991 and may be required to pay up to
$2.23 million and interest, if any, to creditors.

On November 15, 1991, we filed for reorganization under Chapter 11 of the
United States Bankruptcy Code and, later, submitted a Debtor's Proposed Amended
Plan of Reorganization. The plan was confirmed by order of the bankruptcy court
on July 11, 1994 and the court established a plan of payment for the benefit of
our creditors. Under the bankruptcy court order, we established a disbursement
account into which 50% of the ongoing terminal royalties we receive from OEMs
with whom we had a current relationship must be deposited to pay named
creditors. See "Business -- Corporate History" for a more complete description
of these OEMs. For all but one unsecured creditor, payments from the
disbursement account were ordered to continue up to the earlier of:

. the limit of our liability to each unsecured creditor or

. through the year 2000.

However, the largest unsecured creditor's claim, which currently totals
approximately $964,000, must be paid from available funds, if any, in the
disbursement account until such amount is fully paid. Our potential total
remaining liability under the bankruptcy, as of September 30, 1999, is limited
to the lesser of:

. approximately $2,230,000 or
. 50% of future ongoing terminal royalties we receive from the OEMs.

To date, only royalties received pursuant to some of our license agreements
existing at the time of the bankruptcy have been deposited into the disbursement
account, and we have not deposited into such account or paid creditors out of
royalties received or currently received on our subsequently developed and
licensed server-based technology. We believe that our royalty payment
obligations under the bankruptcy court order relate only to licenses in place as
of July 11, 1994, and no payments to creditors have been made since November 14,
1997. We cannot assure you that a court will not interpret our obligation to
include payments to the disbursement account from royalties earned from
subsequent licenses of the server-based technology or licenses that we secure in
the future, or that our current technology will not be deemed derivative of our
technology existing at July 11, 1994. Consequently, we cannot assure you that we
will not be required to repay creditors referenced in the bankruptcy proceedings
the full amount of our liability, which is approximately $2,230,000, and
interest on any payments

that a court deems to be owed based upon a ruling that our interpretation is
wrong. In addition, we cannot guarantee you that a creditor will not assert a
claim for payment out of the royalties from subsequent licenses of the server-
based technology. Such claims could be costly and time-consuming for us. If any
of these events takes place, it could have a material adverse effect on our
business, financial condition and results of operations. See Note 6 to our
Financial Statements.

Our failure to manage expanding operations could adversely affect us

To exploit the emerging server-based software market, we must rapidly
execute our business strategy and further develop products while managing our
anticipated growth in operations. To manage our growth, we must:

. continue to implement and improve our operational, financial and
management information systems;

. hire and train additional qualified personnel;

. continue to expand and upgrade core technologies; and

. effectively manage multiple relationships with various licensees,
consultants, strategic and technological partners and other third
parties.

We cannot assure you that our systems, procedures, personnel or controls
will be adequate to support our operations or that management will be able to
execute strategies rapidly enough to exploit the market for our products and
services. Our failure to manage growth effectively or execute strategies rapidly
could have a material adverse effect on our business, financial condition and
results of operations.

Competition for key management and other personnel in our industry is intense,
and we may not be successful in attracting and retaining these personnel

Our success and business strategy is dependent in large part on our ability
to attract and retain key management and other personnel. Such individuals are
in high demand and often have competing employment offers. In particular, our
success depends on our ability to retain the services of Mr. Walter Keller, our
President and Ms. Robin Ford, our Executive Vice President, Marketing and Sales.
We have entered into employment agreements with these individuals that each
contain non-competition and confidentiality covenants. We currently anticipate
the need to attract additional sales, marketing, financial and software engineer
personnel in the near future. Competition for such personnel in the computer
software and services industry is intense,

and therefore, we cannot assure you we will be able to attract or retain such
personnel. The loss of the services of one or more members of our management
group or the inability to retain or hire additional personnel as needed may have
a material adverse effect on our business.

Our planned expansion into international markets makes us susceptible to risks
from international operations

As part of our long term strategy we intend to address the global needs of
our customers and expand our business to commit resources to international
market expansion. In order to execute this strategy, we will need to hire and
train additional personnel and recruit additional international resellers to
successfully expand our international sales. We cannot assure you that we will
be able to increase or maintain international sales of our products or that
international reseller channels will be willing or able to adequately service
and support our products. Our international operations will be subject to a
number of risks including:

. difficulties in staffing and managing foreign operations;

. variability of foreign economic conditions and changing restrictions
imposed by United States export laws;

. unexpected changes in regulatory requirements;

. tariffs and other trade barriers;

. lack of acceptance of products in foreign countries;

. the burdens of complying with a wide variety of foreign laws; and

. foreign restrictions on the transfer of currency and variability of
foreign currency exchange rates.

We cannot assure you that these factors will not have a material adverse
effect on our future international sales and, consequently, our business,
results of operations and financial condition.

The market in which we participate is highly competitive and has more
established competitors

The market we participate in is intensely competitive, rapidly evolving and
subject to technological changes. We expect competition to increase as other
companies introduce additional competitive products. In order to compete
effectively, we must continually develop and market new and enhanced products
and market those products at competitive prices. As markets for our products
continue to develop, additional companies, including companies in the computer
hardware, software and networking industries with significant market presence,
may enter the markets in which we compete and further intensify competition. A
number of our current and potential competitors have longer operating histories,
greater name recognition and significantly greater financial, sales, technical,
marketing and other resources than we do. We cannot assure you that our
competitors will not develop and market competitive products that will offer
superior price or performance features or that new competitors will not enter
our markets and offer such products. We believe that we will need to invest
increasing financial resources in research and development to remain competitive
in the future. Such financial resources may not be available to us at the time
or times that we need them or upon terms acceptable to us. We cannot assure you
that we will be able to establish and maintain a significant market position in
the face of our competition and our failure to do so would adversely affect our
business.

We are subject to risk of undetected errors which could substantially reduce the
effectiveness of our products and adversely affect us

Our complex software products may contain undetected errors or failures
when first introduced or as new versions are released. We cannot assure you that
errors will not be found in our products after commencement of commercial
shipments. In addition, third-party products that our products depend upon,
including current and future versions of operating systems and application
programs provided by companies such as Sun Microsystems, IBM and Microsoft, may
contain defects which could reduce the performance of our products or render
them useless. Because we do not develop our own application programs and depend
upon third party applications, errors in any application utilized by our
customers could adversely impact the marketability of our products. Similarly,
we cannot assure you that errors or defects in our products will not be
discovered, causing delays in product introductions and shipments or requiring
design modifications that could adversely affect our reputation, competitive
position, business, results of operations and financial condition.

Our management are able to exert significant control over us

Our executive officers, directors and their affiliates own or have voting
control over approximately 38.47% of the outstanding shares of common stock. As
a result, if they act as a

group, the executive officers and directors may exercise significant influence
over such matters as amendments to our charter and fundamental corporate
transactions such as mergers, asset sales and our sale. In addition, they will
be able to influence the direction of our business and the election of members
to the board of directors.

We have agreed to contractual provisions that could discourage acquisition bids

A number of our agreements contain express provisions that do not allow us
to assign them without written consent. These provisions could deter third
parties from making bids to acquire us. These provisions could also limit the
price future investors are willing to pay for shares of our common stock.

Our failure to be Year 2000 compliant would negatively impact our business

Many currently installed computer systems and software products are coded
to accept only two digit entries in the date code field and therefore are not
designed to handle any dates beyond the year 1999. These date code fields will
need to accept four digit entries to distinguish 21st century dates from 20th
century dates. As a result, in a relatively short time, computer systems and/or
software used by many companies may need to be upgraded to comply with such year
2000 requirements to remain functional. Significant uncertainty exists in the
software industry concerning the potential effects associated with such
compliance. Although we currently offer software products that are designed and,
in certain circumstances, are warranted to be year 2000 compliant, there can be
no assurance that our software products contain all necessary date code changes.
In addition, there may be a significant amount of litigation arising out of year
2000 compliance issues. Because of the unprecedented nature of such litigation,
it is uncertain whether or to what extent we may be affected by it.

We believe that the purchasing patterns of customers and potential
customers may be affected by year 2000 issues in a variety of ways. Many
companies are expending significant resources to purchase new software or
correct their current software systems for year 2000 compliance. These
expenditures may result in reduced funds available to purchase our products. In
addition, many potential customers may choose to defer purchasing year 2000
compliant products until they believe it is absolutely necessary, thus resulting
in potentially stalled market sales within the server-based software industry.
Conversely, year 2000 issues may cause other companies to accelerate purchases,
causing an increase in short-term demand and a consequent decrease in long-term
demand for our year 2000 compliant products. There can be no assurance that year
2000 issues will not affect us in one or more of a number of possible ways, and
will not result in a material adverse effect on our business, operating results
and financial condition.

Potential public sales of a significant number of shares of our common stock
could reduce the market price of our common stock

We cannot predict the effect, if any, that future sales of shares, or the
availability of shares for future sale, will have on the market price of our
common stock. Sales of substantial amounts of common stock, or the perception
that such sales could occur, may adversely affect prevailing market prices for
our common stock.

As of the date of this prospectus, there are 11,266,302 shares of our
common stock outstanding and 5,004,125 shares issuable upon exercise of
outstanding options and warrants. Restrictions under the securities laws and
lock-up agreements prevent the immediate sale in the public market of 811,723 of
such shares of common stock. However, all of these restricted shares will become
available for sale on January 12, 2000.

No dividends will be paid in the foreseeable future

We have never paid cash dividends on our common stock and do not anticipate
paying cash dividends for the foreseeable future. We intend to reinvest any
funds that might otherwise be available for the payment of dividends in further
development of our business.

The price of our securities may fluctuate

The market price of our securities is likely to be highly volatile as the
stock market in general, and the market for technology companies in particular,
has been highly volatile. Stockholders may have difficulty selling our common
stock following periods of volatility because of the market's adverse reaction
to such volatility.

Factors which could cause such volatility may include, among others:

. conditions or trends in the computer software industry;

. changes in the market valuations of other computer software companies;

. actual or anticipated variations in quarterly operating results;

. announcements of technological innovations;

. capital commitments and expenditures;

. departures of key employees; and

. announcements by us or our competitors of strategic alliances, joint
ventures and significant acquisitions.

Many of these factors are beyond our control and may materially adversely affect
the market price of our common stock, regardless of our future operating
results.

The trading prices of many technology companies' stocks have reached
historical highs within the last 12 months and have reflected valuations
substantially above historical levels. During the same period, such companies'
stocks have also been highly volatile and have recorded lows well below such
historical highs. We cannot assure you that our securities will trade at the
same levels of other technology companies or that technology stocks in general
will sustain their current levels.

Our certificate of incorporation and bylaws could make it difficult for a third
party to acquire us

Our amended and restated certificate of incorporation and bylaws could have
the effect of delaying, deferring or preventing an acquisition of us. For
example, our board may issue preferred stock without stockholder approval.
Additionally, such certificate of incorporation provides for a classified board,
with each member having a staggered three year term, prohibits the stockholders
from taking action by written consent and limits their ability to call special
meetings and make proposals at such meetings. These provisions could make it
more difficult for a third party to remove or replace our management or to
acquire us.

Forward-looking statements found in this prospectus may not be accurate
indicators of our future performance

This prospectus contains certain forward-looking statements and information
relating to our business. We have identified forward-looking statements in this
prospectus using words such as "believes," "intends," "expects," "predicts,"
"may," "will," "should," "contemplates," "anticipates," or similar statements.
These statements are based on our beliefs as well as assumptions we made using
information currently available to us. Because these statements reflect our
current views concerning future events, these statements involve certain risks,
uncertainties and assumptions. Actual future results may differ significantly
from the results discussed in the forward-looking statements.

PRICE RANGES OF AUDITORSSECURITIES

Since August 26, 1999, our common stock, Class A redeemable warrants and
Class B redeemable warrants have been quoted on The reportNasdaq SmallCap Market under
the symbols GOJO, GOJOW and GOJOZ, respectively. Prior to such date, such
securities were quoted on the OTC Bulletin Board The following table sets forth
the range of the high and low bid quotations of such securities on The Nasdaq
SmallCap Market and the OTC Bulletin Board for the periods indicated:

Class A Class B
Common Stock Redeemable Warrants Redeemable Warrants
----------------------- ------------------------- -------------------------
Quarter Ended High Low High Low High Low
- -------------------- ----------------------- ------------------------- -------------------------

March 31, 1997 $ 5-1/8 $ 4-3/8 $ 1-5/16 $ 5/8 $ 1-1/4 $ 5/8
June 30, 1997 5-1/8 4-7/16 1 3/8 1 5/16
September 30, 1997 5-1/8 4-9/16 3/4 1/4 9/16 1/8
December 31, 1997 5-3/8 4-5/8 1-1/16 5/16 3/4 3/16
March 31, 1998 5-1/2 4-3/4 1-1/4 7/16 3/4 1/4
June 30, 1998 5-5/16 4-3/4 1-1/4 3/8 1/2 3/16
September 30, 1998 5-3/8 4-3/4 1-3/8 1/32 1/2 1/4
December 31, 1998 5-7/16 4-11/16 15/16 11/16 5/8 1/16
March 31, 1999 5-3/8 5 1-17/32 1-1/16 1 7/16
June 30, 1999 7-15/16 5-1/8 2-13/16 1-1/16 1-3/4 11/16
September 30, 1999 9-1/2 3 4-5/16 1-1/8 3-9/16 3/4
December 31, 1999 14-5/16 6-1/8 8-3/4 3-1/8 6-3/4 2-1/6
(through December 3)

The above quotations represent prices between dealers and do not include
retail markup, markdown or commission. They do not necessarily represent actual
transactions.

On December 3, 1999, the last reported closing bid prices of our common
stock, Class A redeemable warrants and Class B redeemable warrants were $13, $7-
3/4 and $5-7/8. On that date, there were 257 recordholders of our common stock,
although we believe that there are other persons who are beneficial owners of
shares of our common stock held in street name.

SELECTED HISTORICAL FINANCIAL DATA

The following selected historical financial data should be read in
conjunction with our historical financial statements and the notes thereto
beginning on page F-1 of this prospectus. Our selected financial data as of
December 31, 1998 and 1997 and for the years ended December 31, 1998, 1997 and
1996 have been derived from our financial statements which have been audited by
BDO Seidman LLP, independent public accountants onaccountants. The data as of September 30,
1999 and for the Company'snine months ended September 30, 1999 and 1998 and for the years
ended December 31, 1995 and 1994 have been derived from our unaudited condensed
financial statements includeswhich, in the opinion of management, include all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation of the information set forth in such financial statements. The
results of operations for the nine months ended September 30, 1999 are not
necessarily indicative of results that may be expected for the full year.

Statements of Operations Data
(dollars in thousands, except per share amounts):

Nine Months Ended
September 30, Year Ended December 31,
----------------------- ----------------------------------------------------------------------
1999 1998 1998 1997 1996 (1) 1995 (1) 1994 (1)
---------- ---------- ---------- ---------- ---------- ---------- ----------

Revenues................... $ 2,450 $ 1,499 $ 2,124 $ 1,926 $ 595 $ 588 $ 1,097
Costs of revenues.......... 291 251 344 463 336 214 350
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit............... 2,159 1,248 1,780 1,463 259 375 747
Operating expenses:
Selling and
marketing............ 2,359 860 1,440 827 193 - -
General and
administrative....... 3,725 783 1,119 325 219 389 647
Research and
development.......... 1,772 634 840 191 42 59 67
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating
expenses........ 7,856 2,277 3,399 1,343 453 448 714
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Loss) income from
operations.............. (5,697) (1,029) (1,619) 120 (194) (73) 33

Other income
(expense):
Interest and other
income............ 77 9 10 7 6 - -
Interest expense........ ( 9) (368) (522) (2) - - -
Other expense........... - - (17) - - - -
---------- ---------- ---------- ----------- ---------- ---------- ----------
(Loss) income
before provision
for income taxes........ (5,630) (1,389) (2,148) 125 (188) (73) 33

Provision for
income taxes........... 1 1 1 1 1 - 15
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net (loss) income......... $ (5,631) $ (1,390) $ (2,149) $ 124 $ (189) $ (73) $ 18
========== ========== ========== ========== ========== ========== ==========
Basic and diluted
(loss) income
per share.............. $ ( 0.59) $ ( 0.39) $ (0.32) $ 0.02 $ (0.03) $ - $ -
========== ========== ========== ========== ========== ========== ==========
Weighted average
common shares
outstanding............ 9,540,148 3,583,798 6,762,669 6,000,000 6,000,000 3,345,600 3,345,600
========== ========== ========== ========== ========== ========== ==========

Balance Sheet Data
(in thousands):

September 30, 1999 December 31, 1998 December 31, 1997
------------------ ----------------- -----------------

Working capital........ $4,719 $1,193 $ 23

Total assets........... 8,199 7,110 733

Total liabilities...... 952 1,202 615

Stockholders' equity... 7,248 5,908 118

___________

(1) During the years ended December 31, 1996, 1995 and 1994, we were engaged in
the business of manufacturing, marketing and selling computer terminal
hardware in an explanatory paragraph with respect to the Company
beingindustry significantly different from that in its development stage, which raises substantial doubt about its
ability to continue as a going concern.we
presently do business. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial
Statements of the Company included elsewhere in this Prospectus.

POSSIBLE LIQUIDATION OF THE COMPANY; PER-SHARE LIQUIDATION PRICE LESS THAN
PUBLIC OFFERING PRICE; WARRANTS EXPIRE WORTHLESS IN EVENT OF LIQUIDATION

If the Company does not consummate a Business Combination within 18 months
from the consummation of this offering, or 24 months from the consummation of
this offering if the Extension Criteria have been satisfied, the Company will be
dissolved and will distribute to all Public Stockholders in proportion to their
respective equity interests in the Company, an aggregate sum equal to the amount
in the Trust Fund, inclusive of any interest thereon, plus any remaining net
assets of the Company. It is likely that, in the event of any such liquidation,
the per-share liquidation distribution will be less than the initial per-share
public offering price (assuming no value is attributed to the Warrants included
in the Units offered hereby) as a consequence of the expenses of this offering
and the anticipated costs which will be incurred by the Company in seeking a
Business Combination. If the Company were to expend all of the net proceeds of
this offering not

held in the Trust Fund prior to liquidation, and without taking into account
interest, if any, earned on the Trust Fund, the per-share liquidation price
would be $4.81, or $1.19 less than the per-Unit offering price of $6.00. The
proceeds deposited in the Trust Fund could, however, become subject to the
claims of creditors of the Company which could be prior to the claims of
stockholders of the Company. Accordingly, there can be no assurance that the
per-share liquidation price will not be less than $4.81, plus interest. There
will be no distribution from the Trust Fund with respect to the Warrants
included in the Units and, accordingly, the Warrants will expire worthless in
the event of a liquidation prior to the consummation of a Business Combination.
The Initial Stockholders have waived their respective rights to participate in
any liquidation distribution with respect to the shares of Common Stock owned by
them immediately prior to this offering.

A Public Stockholder shall be entitled to receive funds from the Trust Fund
only in the event of a liquidation or in the event he seeks to convert his
shares into cash in connection with a Business Combination which he voted
against and which is actually consummated by the Company. In no other
circumstances shall a Public Stockholder have any right or interest of any kind
to and in the Trust Fund.

UNSPECIFIED INDUSTRY AND TARGET
BUSINESS; UNASCERTAINABLE RISKS

To date, the Company has not selected any particular industry from the
Target Industries or any Target Business in which to concentrate its search for
a Business Combination. Accordingly, there is no current basis for prospective
investors to evaluate the possible merits or risks of the Target Business or the
particular industry in which the Company may ultimately operate. However, in
connection with seeking stockholder approval of a Business Combination, the
Company intends to furnish its stockholders with proxy solicitation materials
prepared in accordance with the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which, among other matters, will include a description of the
operations of the Target Business and audited historical financial statements
thereof. To the extent the Company effects a Business Combination with a
financially unstable company or an entity in its early stage of development or
growth (including entities without established records of sales or earnings),
the Company will become subject to numerous risks inherent in the business
operations of financially unstable and early stage or potential emerging growth
companies. In addition, to the extent that the Company effects a Business
Combination with an entity in an industry characterized by a high level of risk,
the Company will become subject to the currently unascertainable risks of that
industry. An extremely high level of risk frequently characterizes certain
industries which experience rapid growth. Although Management will endeavor

to evaluate the risks inherent in a particular Target Business or industry,
there can be no assurance that the Company will properly ascertain or assess all
such significant risk factors. See "Proposed Business - Blank Check Offering.Operations."

DETERMINATION OF FAIR MARKET VALUE

The Fair Market Value of the Target Business will be determined by the
Board of Directors of the Company, unless the Board of Directors is not able to
independently determine that the Target Business has sufficient Fair Market
Value. Therefore, the Board of Directors has significant discretion in
determining whether a Target Business is suitable for a proposed Business
Combination and, since each of the directors of the Company owns shares of the
Company's Common Stock which will be released from escrow only if a Business
Combination is successfully consummated, the Board of Directors may have a
conflict of interest in determining the Fair Market Value of a Target Business.
The Board of Directors, however, has a fiduciary duty under the laws of Delaware
to act in the best interests of all of the Company's stockholders, particularly
when faced with a conflict of interest. See "Management - Conflicts of
Interest."

UNCERTAIN STRUCTURE OF BUSINESS COMBINATION;
REDUCTION IN STOCKHOLDER EQUITY INTEREST

The structure of a Business Combination with a Target Business, which may
take the form of a merger, exchange of capital stock or asset acquisition,
cannot be presently determined since neither the Company's officers or directors
nor their respective affiliates have had any preliminary contacts, discussions
or understandings with representatives of any potential Target Business
regarding the possibility of a Business Combination. The Company may use the
funds held in the Trust Fund as part of the consideration for the Business
Combination or may issue additional Shares of Common Stock or shares of
Preferred Stock, or incur debt, or any combination thereof. In the event the
Company issues capital stock, the current equity interest of the stockholders
may be significantly reduced. See "Proposed Business - Selection of Target
Business and Structuring a Business Combination."

DISCRETIONARY USE OF PROCEEDS; ABSENCE OF CURRENT
SUBSTANTIVE DISCLOSURE RELATING TO BUSINESS COMBINATIONS

The Company's Management has broad discretion with respect to the specific
application of the net proceeds of this offering, although substantially all of
the net proceeds of this offering are intended to be generally applied toward
effecting a Business Combination, subject to the limitation concerning Target
Industries

discussed under "The Company - Business Objectives." As of the date of this
Prospectus, the Company has not identified a prospective Target Business
and, accordingly, investors in this offering do not currently have any
substantive information available for consideration of any Business
Combination. Notwithstanding the foregoing, in connection with seeking
stockholder approval of a Business Combination, the Company intends to
furnish its stockholders with proxy solicitation materials prepared in
accordance with the Securities Exchange Act of 1934, as amended ("Exchange
Act") which will include a description of the operations of the Target
Business and audited historical financial statements thereof. Such proxy
solicitation materials will be filed with, and be subject to the review of,
the Securities and Exchange Commission ("Commission"). See "Use of Proceeds"
and "Proposed Business - Blank Check Offering."

LIMITED ABILITY TO EVALUATE TARGET BUSINESS MANAGEMENT

While the Company's ability to successfully effect a Business Combination
will be dependent upon the efforts of its officers and directors, the future
role of such persons, if any, in the Target Business cannot presently be stated
with any certainty. While it is possible that one or more of these persons will
remain associated in some capacity with the Company following a Business
Combination, it is unlikely that any of them will devote their full efforts to
the affairs of the Company subsequent thereto. Moreover, there can be no
assurance that such persons will have significant experience or knowledge
relating to the operations of the particular Target Business. Furthermore,
although the Company intends to closely scrutinize the management of a
prospective Target Business in connection with evaluating the desirability of
effecting a Business Combination, there can be no assurance that the Company's
assessment of such management will prove to be correct, especially in light of
the possible inexperience of the Company's officers and directors in evaluating
certain types of businesses. In addition, there can be no assurance that such
future management will have the necessary skills, qualifications or abilities to
manage a public company intending to embark on a program of business
development. The Company may also seek to recruit additional managers to
supplement the incumbent management of the Target Business. There can be no
assurance that the Company will have the ability to recruit such additional
managers, or that such additional managers will have the requisite skills,
knowledge or experience necessary to enhance the incumbent management. See
"Proposed Business - 'Blank Check' Offering."

INVESTOR DOES NOT RECEIVE PROTECTION OF
CERTAIN RULES PROMULGATED UNDER THE SECURITIES ACT OF 1933

This offering is not being conducted in accordance with Rule 419,
promulgated by the Commission under the Securities Act ("Rule 419"), which
regulates securities offerings by "blank check" companies. Since the Company's
net tangible assets will be in excess of $5,000,000 upon its receipt of the
proceeds of this offering (as supported through audited financial statements),
the Company is not subject to Rule 419. Rule 419 requires that the securities
to be issued and the funds received in a blank check offering be deposited and
held in an escrow account until an acquisition meeting specified criteria is
completed. Before the acquisition can be completed and before the funds and
securities can be released, the blank check company is required to update its
registration statement with a post-effective amendment and, after the effective
date thereof, the blank check company is required to furnish investors with a
prospectus (which forms a part of the post-effective amendment to its
registration statement) containing specified information, including a discussion
of the business and the audited financial statements of the proposed acquisition
candidate. According to Rule 419, the investors must have no less than 20 and
no more than 45 days from the effective date of the post-effective amendment to
decide whether to remain an investor or require the return of their investment
funds. Any investor not making such decision within such 45-day period is
automatically entitled to receive a return of his investment funds. Unless a
sufficient number of investors elect to remain investors, all of the deposited
funds in the escrow account must be returned to all investors and none of the
securities will be issued. Rule 419 further provides that if the blank check
company does not complete an acquisition meeting the specified criteria within
18 months, all of the deposited funds must be returned to investors.

SEEKING TO ACHIEVE PUBLIC TRADING
MARKET THROUGH BUSINESS COMBINATION

While a prospective Target Business may deem a Business Combination with
the Company desirable for diverse reasons, a Business Combination may involve
the acquisition of, or merger with, a company which does not need substantial
additional capital but which desires to establish a public trading market for
its shares, while avoiding what it may deem to be adverse consequences of
undertaking a public offering itself, such as time delays, significant expense,
loss of voting control and compliance with various Federal and state securities
laws. See the risk factors herein entitled "Unspecified Industry and Target
Business; Unascertainable Risks" and "No Assurance of Public Market; Arbitrary
Determination of Offering Price."

PROBABLE LACK OF BUSINESS DIVERSIFICATION

While the Company may, under certain circumstances, seek to effect Business
Combinations with more than one Target Business, its initial Business
Combination must be with a Target Business which satisfies the Fair Market Value
criteria at the time of such acquisition. Consequently, it is likely that the
Company will have the ability to effect only a single Business Combination.
Accordingly, the prospects for the Company's success will be entirely dependent
upon the future performance of a single business. Unlike certain entities which
have the resources to consummate several Business Combinations of entities
operating in multiple industries or multiple areas of a single industry, it is
highly likely that the Company will not have the resources to diversify its
operations or benefit from the possible spreading of risks or offsetting of
losses. The Company's probable lack of diversification may subject the Company
to numerous economic, competitive and regulatory developments, any or all of
which may have a substantial adverse impact upon the particular industry in
which the Company may operate subsequent to a Business Combination. In
addition, by consummating a Business Combination with only a single entity, the
prospects for the Company's success may become dependent upon the development or
market acceptance of a single or limited number of products, processes or
services. Consequently, there can be no assurance that the Target Business will
prove to be commercially viable. See "Proposed Business - 'Blank Check'
Offering."

DEPENDENCE UPON KEY PERSONNEL

The ability of the Company to successfully effect a Business Combination
will be largely dependent upon the efforts of Lawrence Burstein, the Company's
President. The Company has not entered into an employment agreement with Mr.
Burstein or obtained any "key man" life insurance on his life. The loss of Mr.
Burstein's services could have a material adverse effect on the Company's
ability to successfully achieve its business objectives. None of the Company's
officers and directors are required to commit their full time to the affairs of
the Company. Accordingly, conflicts of interest may arise in the allocation of
management time among various business activities. In addition, the success of
the Company may be dependent upon its ability to retain additional personnel
with specific knowledge or skills who may be necessary to assist the Company in
evaluating a potential Business Combination. There can be no assurance that the
Company will be able to retain such necessary additional personnel. See
"Proposed Business - Employees" and "Management - Conflicts of Interest."

COMPETITION

The Company expects to encounter intense competition from other entities
having a business objective similar to that of the

Company. Many of these entities are well-established and have extensive
experience in connection with identifying and effecting business combinations
directly or through affiliates. Many of these competitors possess greater
financial, technical, personnel and other resources than the Company and there
can be no assurance that the Company will have the ability to compete
successfully. The Company's financial resources will be relatively limited when
contrasted with those of many of its competitors. This inherent competitive
limitation may compel the Company to select certain less attractive Business
Combination prospects. See "Proposed Business - Selection of Target Business
and Structuring a Business Combination."

CONFLICTS OF INTEREST

None of the Company's officers and directors are required to commit their
full time to the affairs of the Company; therefore, such persons may have
conflicts of interest in allocating management time among various business
activities. Certain of these persons may in the future become affiliated with
entities, including other "blank check" companies, engaged in business
activities similar to those intended to be conducted by the Company. Such
persons may have conflicts of interest in determining to which entity a
particular business opportunity should be presented. In order to reduce
potential conflicts of interest, the Company's officers and directors have
agreed that they will offer all suitable prospective Target Businesses to the
Company before any other company until the earlier of a Business Combination or
the liquidation of the Company. In general, officers and directors of a
corporation incorporated under the laws of the State of Delaware are required to
present certain business opportunities to such corporation. Accordingly, as a
result of multiple business affiliations, certain of the Company's officers and
directors may have similar legal obligations to present certain business
opportunities to multiple entities.

Conflicts of interest may also arise between the Company and Unity Venture
Capital Associates Ltd. ("Unity"). Pursuant to a general and administrative
services agreement, the Company is obligated to pay Unity a monthly fee of
$7,500 for general and administrative services, including the use of
approximately 500 square feet of office space in premises occupied by Unity.
Mr. Burstein is the President and principal shareholder of Unity. Mr. Leben, as
well as John Cattier and Barry Ridings, each a director of the Company, are also
shareholders of Unity. Dalessio, Millner & Leben ("DML"), an accounting firm of
which Mr. Leben is a partner, affords Unity the use of such space at a monthly
rental of $2,000. DML which has performed bookkeeping, tax and accounting
services for certain of the "blank check" companies of which Messrs. Burstein,
Cattier and Ridings, have been directors and shareholders from their inceptions
through the consummation of

their respective Business Combinations, is expected to perform similar services
for the Company at an aggregate cost of approximately $12,000 per annum. DML
may also perform financial "due diligence" services for the Company in
connection with its evaluation of prospective Target Businesses for a Business
Combination. In addition, Unity has made non-interest demand loans aggregating
approximately $40,500 to the Company as of the date of this Prospectus to cover
expenses related to this offering. The Company intends to repay these loans, as
well as both those accrued general and administrative expenses owed to Unity
discussed above, out of the proceeds of this offering. See "Management -
Conflicts of Interest" and "Certain Transactions."

POSSIBLE NEED FOR ADDITIONAL FINANCING

The Company has had no revenues to date and is entirely dependent upon the
proceeds of this offering to commence operations relating to selection of a
prospective Target Business. The Company will not achieve any revenues (other
than interest income derived from investment of the net proceeds of this
offering) until, at the earliest, the consummation of a Business Combination.
Although the Company believes that the proceeds of this offering will be
sufficient to effect a Business Combination, inasmuch as the Company has not yet
identified any prospective Target Business candidates, the Company cannot
ascertain with any degree of certainty the capital requirements for any
particular transaction. In the event that the net proceeds of this offering
prove to be insufficient for purposes of effecting a Business Combination
(because of the size of the Business Combination or the depletion of the net
proceeds in search of a Target Business), the Company will be required to seek
additional financing. There can be no assurance that such financing would be
available on acceptable terms, if at all. To the extent that such additional
financing proves to be unavailable when needed to consummate a particular
Business Combination, the Company would, in all likelihood, be compelled to
restructure the transaction or abandon that particular Business Combination and
seek an alternative Target Business candidate. In addition, in the event of the
consummation of a Business Combination, the Company may require additional
financing to fund the operations or growth of the Target Business. The failure
by the Company to secure such additional financing could have a material adverse
effect on the continued development or growth of the Target Business. See
"Proposed Business - 'Blank Check' Offering - Selection of a Target Business and
Structuring of a Business Combination."

RISKS OF LEVERAGE

The Company may borrow money to consummate the Business Combination or
assume or refinance the indebtedness of the Target

Business if the Company's management deems it to be beneficial to the Company.
There is no legal limit on the amount of leverage that the Company may incur.
Among the possible adverse effects of any such leverage are: (i) if the
Company's operating revenues after the Business Combination were insufficient to
pay debt services, there would be a risk of default and foreclosure on the
Company's assets; (ii) if a loan agreement contains covenants that require the
maintenance of certain financial ratios or reserves, and any such covenant is
breached without a waiver or renegotiation of the terms of that covenant, then
the lender could have the right to accelerate the payment of the indebtedness
even if the Company has made all principal and interest payments when due; (iii)
if the interest rate on a loan fluctuated or the loan was payable on demand, the
Company would bear the risk of variations in the interest rate or demand for
payment; and (iv) if the terms of a loan did not provide for amortization prior
to maturity of the full amount borrowed and the "balloon" payment could not be
refinanced at maturity on acceptable terms, the Company might be required to
seek additional financing and, to the extent that additional financing were not
available on acceptable terms, to liquidate its assets. See "Proposed Business
- - Selection of Target Business and Structuring in Business Combination."

AUTHORIZATION OF ADDITIONAL SECURITIES

The Company's Certificate of Incorporation authorizes the issuance of
20,000,000 shares of Common Stock. Upon completion of this offering (assuming no
exercise of the Underwriter's over-allotment option), there will be 14,862,500
authorized but unissued shares of Common Stock available for issuance (after
appropriate reservation for the issuance of shares upon full exercise of the
Warrants, the Unit Purchase Option and the Directors' Warrants and for future
grants under the Company's 1996 Stock Option Plan). The Company's Board of
Directors has the power to issue any or all of such authorized but unissued
shares without stockholder approval. However, the Underwriting Agreement
between the Company and the Underwriter (the "Underwriting Agreement") prohibits
the Company from issuing shares of Common Stock prior to a Business Combination
other than as described in this Prospectus. Although the Company has no
commitments as of the date of this Prospectus to issue any additional shares of
Common Stock, the Company will, in all likelihood, issue a substantial number of
additional shares in connection with a Business Combination. To the extent that
additional shares of Common Stock are issued, dilution to the interests of the
Public Stockholders will occur. Additionally, if a substantial number of shares
of Common Stock are issued in connection with a Business Combination, a change
in control of the Company may occur which may affect, among other things, the
Company's ability to utilize its net operating loss carryforwards, if any.
Furthermore, the issuance of a substantial number of shares of Common Stock may
adversely affect prevailing

market prices, if any, for the Common Stock and could impair the Company's
ability to raise additional capital through the sale of its equity securities.
See "Proposed Business - 'Blank Check' Offering - Selection of a Target Business
and Structuring of a Business Combination" and "Description of Securities."

The Company's Certificate of Incorporation also authorizes the issuance of
5,000 shares of "blank check" preferred stock ("Preferred Stock") with such
designation, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of the Company's Common Stock,
although the Underwriting Agreement prohibits the Company, prior to a Business
Combination, from issuing Preferred Stock which participates in any manner in
the proceeds of the Trust Fund, or which votes as a class with the Common Stock
on a Business Combination. The Company may issue some or all of such shares in
connection with a Business Combination. In addition, the Preferred Stock could
be utilized, under certain circumstances, as a method of discouraging, delaying
or preventing a change in control of the Company. Although the Company does not
currently intend to issue any shares of Preferred Stock, there can be no
assurance that the Company will not do so in the future. See "Proposed Business
- - 'Blank Check' Offering - Selection of a Target Business and Structuring of a
Business Combination" and "Description of Securities."

INVESTMENT COMPANY ACT CONSIDERATIONS

The regulatory scope of the Investment Company Act of 1940, as amended
("Investment Company Act"), which was enacted principally for the purpose of
regulating vehicles for pooled investments in securities, extends generally to
companies engaged primarily in the business of investing, reinvesting, owning,
holding or trading in securities. The Investment Company Act may, however, also
be deemed to be applicable to a company which does not intend to be
characterized as an investment company but which, nevertheless, engages in
activities which may be deemed to be within the definitional scope of certain
provisions of the Investment Company Act. The Company believes that its
anticipated principal activities, which will involve acquiring control of an
operating company, will not subject the Company to regulation under the
Investment Company Act. Nevertheless, there can be no assurance that the
Company will not be deemed to be an investment company, especially during the
period prior to a Business Combination. In the event the Company is deemed to
be an investment company, the Company may become subject to certain restrictions
relating to the Company's activities, including restrictions on the nature of
its investments and the issuance of securities. In addition, the

Investment Company Act imposes certain requirements on companies deemed to be
within its regulatory scope, including registration as an investment company,
adoption of a specific form of corporate structure and compliance with certain
burdensome reporting, recordkeeping, voting, proxy, disclosure and other rules
and regulations. In the event of characterization of the Company as an
investment company, the failure by the Company to satisfy regulatory
requirements, whether on a timely basis or at all, would, under certain
circumstances, have a material adverse effect on the Company. See "Proposed
Business - Investment Company Act Considerations."

TAX CONSIDERATIONS

As a general rule, Federal and state tax laws and regulations have a
significant impact upon the structuring of business combinations. The Company
will evaluate the possible tax consequences of any prospective Business
Combination and will endeavor to structure the Business Combination so as to
achieve the most favorable tax treatment to the Company, the Target Business and
their respective stockholders. There can be no assurance, however, that the
Internal Revenue Service (the "IRS") or appropriate state tax authorities will
ultimately assent to the Company's tax treatment of a consummated Business
Combination. To the extent the IRS or state tax authorities ultimately prevail
in recharacterizing the tax treatment of a Business Combination, there may be
adverse tax consequences to the Company, the Target Business and their
respective stockholders. See "Proposed Business - 'Blank Check' Offering -
Selection of a Target Business and Structuring of a Business Combination."

DIVIDENDS UNLIKELY

The Company has not paid any dividends on its Common Stock to date and does
not intend to pay dividends prior to the consummation of a Business Combination.
The payment of dividends after any such Business Combination, if any, will be
contingent upon the Company's revenues and earnings, if any, capital
requirements and general financial condition subsequent to consummation of a
Business Combination. The payment of any dividends subsequent to a Business
Combination will be within the discretion of the Company's then Board of
Directors. It is the present intention of the Board of Directors to retain all
earnings, if any, for use in the Company's business operations and, accordingly,
the Board does not anticipate declaring any dividends in the foreseeable future.
See "Description of Securities - Dividends."

CONTROL BY PRESENT STOCKHOLDERS

Upon consummation of this offering, Initial Stockholders, including the
present management of the Company, will collectively own approximately 33.3% of
the then-issued and outstanding shares of Common Stock (assuming no exercise of
the Underwriter's over-allotment option). In the election of directors,
stockholders are not entitled to cumulate their votes for nominees. Accordingly,
it is likely that the Initial Stockholders will be able to elect all of the
Company's directors and otherwise direct the affairs of the Company. See
"Principal Stockholders," "Certain Transactions" and "Description of
Securities."

NO ASSURANCE OF PUBLIC MARKET;
ARBITRARY DETERMINATION OF OFFERING PRICE

Prior to this offering, there has been no public trading market for the
Units, Common Stock, Class A Warrants or Class B Warrants. The initial public
offering price of the Units and the exercise prices of the Class A Warrants and
the Class B Warrants have been arbitrarily determined by negotiations between
the Company and the Underwriter, and bear no relationship to such established
valuation criteria as assets, book value or prospective earnings. There is no
assurance that a regular trading market will develop for the Units after this
offering or for the Common Stock and the Warrants subsequent to a Business
Combination, or that, if developed, that any such market will be sustained. The
Underwriter has advised the Company that it currently intends to serve as a
market maker of the Units but is not obligated to do so and any market making
may be discontinued at any time. See "Underwriting."

OTC BULLETIN BOARD

The Units will be traded in the over-the-counter market. It is anticipated
that they will be quoted on the OTC Bulletin Board, an NASD sponsored and
operated inter-dealer automated quotation system for equity securities not
included in The Nasdaq Stock Market, as well as in the NQB Pink Sheets published
by National Quotation Bureau Incorporated. The OTC Bulletin Board was
introduced as an alternative to "pink sheet" trading of over-the-counter
securities. Although the Company believes that the OTC Bulletin Board has been
recognized by the brokerage community as an acceptable alternative to the NQB
Pink Sheets, there can be no assurance that the liquidity and prices of the
Units in the secondary market will not be adversely affected. See
"Underwriting."

IMMEDIATE DILUTION; DISPARITY OF CONSIDERATION

This offering involves an immediate and substantial dilution of $2.57 per
share (approximately 43.0% of the public offering price) between the pro forma
net tangible book

value per share after the offering of $3.43 and the public offering price of
$6.00 per share allocable to the share of Common Stock included in the Units
(assuming no value is attributed to the Warrants included in the Units). The
Initial Stockholders acquired their shares of Common Stock at a nominal price
and, accordingly, new investors will bear virtually all of the risks inherent in
an investment in the Company. See "Dilution."

SHARES ELIGIBLE FOR FUTURE SALE

All of the 625,000 shares of Common Stock issued and outstanding as of the
date of this Prospectus are "restricted securities," as that term is defined
under Rule 144 ("Rule 144"), promulgated by the Commission under the Securities
Act. None of such shares will be eligible for sale under Rule 144 prior to May
30, 1998. Notwithstanding such eligibility, the Affiliated Initial Stockholders
have agreed not to sell their respective shares of Common Stock prior to six
months following the consummation of a Business Combination and the Non-
Affiliated Initial Stockholders have agreed not to sell their respective shares
of Common Stock, which were acquired prior to the date of this Prospectus, prior
to the occurrence of a Business Combination.

An additional 200,000 shares of Common Stock, which have been registered
pursuant to the Registration Statement of which this Prospectus forms a part,
are issuable upon the exercise of the Directors' Warrants. The Directors'
Warrants, however, will not be transferable or exercisable until the
consummation of a Business Combination.

No prediction can be made as to the effect, if any, that sales of such
625,000 restricted shares of Common Stock and such 200,000 registered shares of
Common Stock, or the availability of such shares for sale, will have on the
market prices prevailing from time to time. Nevertheless, the possibility that
substantial amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for the Common Stock and could impair
the Company's ability to raise capital through the sale of its equity
securities. See "Certain Transactions" and "Shares Eligible for Future Sale."

CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION
REQUIRED IN CONNECTION WITH EXERCISE OF WARRANTS

Beginning on the later of the consummation of a Business Combination or one
year from the date of this Prospectus, the Company will be able to issue shares
of its Common Stock upon exercise of the Warrants only if there is then a
current prospectus relating to the Common Stock issuable upon the exercise of
the Warrants under an effective registration statement filed with the

Commission, and only if such Common Stock is qualified for sale or exempt from
qualification under applicable state securities laws of the jurisdictions in
which the various holders of Warrants reside. Although the Company has agreed
to use its best efforts to meet such requirements, there can be no assurance
that the Company will be able to do so. The Warrants may be deprived of any
value and the market for the Warrants may be limited if a then current
prospectus covering the Common Stock issuable upon the exercise of the Warrants
is not effective pursuant to an effective registration statement or if such
Common Stock is not qualified or exempt from qualification in the jurisdictions
in which the holders of the Warrants reside. See "Description of Securities."

OUTSTANDING WARRANTS

In connection with this offering, as part of the Units, the Company will be
issuing Warrants to purchase 2,500,000 shares of Common Stock (2,875,000 if the
Underwriter's over-allotment option is exercised in full). Additionally, the
Company issued Directors' Warrants to purchase 200,000 shares of Common Stock
and will issue the Unit Purchase Option entitling the Underwriter to purchase up
to 375,000 shares of Common Stock. To the extent shares of Common Stock are to
be issued by the Company to effect a Business Combination, the potential for the
issuance of substantial numbers of additional shares upon exercise of these
warrants could increase the cost to the Company of the Target Business (in terms
of number of shares required to be issued). See "Description of Securities
- -Warrants."

POTENTIAL ADVERSE EFFECT OF REDEMPTION OF WARRANTS

The Warrants may be redeemed by the Company, at a price of $.05 per
Warrant, at any time they are exercisable, subject to not less than 30 days
prior written notice to the holders thereof, provided that the last sale price
of the Common Stock had been at least $8.50 per share for the redemption of the
Class A Warrants and at least $10.50 per share for the redemption of the Class B
Warrants, respectively, for the 20 consecutive trading days ending on the third
day prior to the day on which notice is given. Notice of the redemption of the
Warrants could force the holders thereof to exercise the Warrants and pay the
exercise price at a time when it may be disadvantageous for them to do so to
sell the Warrants, or accept the redemption price which is likely to be
substantially less than the market value of the Warrants at the time of
redemption. See "Description of Securities - Warrants."

USE OF PROCEEDS

The net proceeds to the Company, after offering expenses and underwriting
discounts of approximately $1,050,000 ($1,173,750 if the Underwriter's
over-allotment option is exercised in full), from the sale of the Units offered
hereby are estimated to be $6,450,000 ($7,451,250 if the Underwriter's
over-allotment option is exercised in full). The Company will use substantially
all of the net proceeds of this offering to acquire a Target Business, including
identifying and evaluating prospective acquisition candidates, selecting the
Target Business, and structuring, negotiating and consummating the Business
Combination. The Company will not acquire a Target Business unless it satisfies
the Minimum Valuation Standard at the time of such acquisition. To the extent
that securities of the Company are used in whole or in part as consideration to
effect a Business Combination, the balance of the net proceeds of this offering
not theretofore expended will be used to finance the operations of the Target
Business.

The proceeds of this offering, after payment of underwriting discounts and
the Underwriter's non-accountable expense allowance, will be $6,675,000
($7,676,250 if the Underwriter's over-allotment option is exercised in full).
Ninety percent (90%) of such amount, or $6,007,500 ($6,908,625 if the
Underwriter's over-allotment option is exercised in full), will be placed in the
Trust Fund to be maintained by , , New York,
New York , as trustee, until the earlier of (i) the consummation of a
Business Combination or (ii) the liquidation of the Company. Therefore,
unless and until a Business Combination is consummated, the proceeds held in
the Trust Fund will not be available for use by the Company for any expenses
related to this offering or expenses which may be incurred by the Company
related to the investigation and selection of a Target Business and the
negotiation of an agreement to acquire the Target Business. The trustee of
the Trust Fund is only authorized to invest the funds in certain government,
quasi-government and investment grade debt securities and to disburse the
funds as indicated above; it has no other duties or obligations.

Approximately $50,000 as of the date of this Prospectus has been advanced
by Unity on a non-interest bearing demand basis, for payment on the Company's
behalf of certain expenses of this offering. Such advances will be repaid out of
the gross proceeds of this offering.

The net proceeds not held in the Trust Fund, approximately $442,500
($542,625 if the Underwriter's over-allotment option is exercised in full), will
be used for, or in connection with (i) the performance of "due diligence"
investigations of prospective acquisition candidates, (ii) legal, accounting and
other expenses attendant to such "due diligence" investigations and to
structuring, negotiating and consummating a Business Combination, and (iii)
legal and accounting fees to be incurred in connection with the Company's
obligation to file periodic reports, proxy statements and other informational
material with the Securities and Exchange Commission. In addition, the Company
has been obligated to pay to Unity, since June 1, 1996, a monthly fee of
$7,500 for general and administrative expenses. Such general and administrative
expenses have been accrued and will be paid to Unity

out of that portion of the net proceeds not held in the Trust Fund. See "Certain
Transactions."

Proceeds of this offering not immediately required for the purposes set
forth above will be invested in United States Government securities or other
high-quality, short-term interest-bearing investments, provided, however, that
the Company will attempt to invest the net proceeds in a manner which does not
result in the Company being deemed to be an investment company under the
Investment Company Act. The Company believes that, in the event a Business
Combination is not effected during the 18-month period from the date of the
consummation of this offering, unless extended to 24 months as discussed
elsewhere herein, and to the extent that a significant portion of the net
proceeds is not used in evaluating various prospective Target Businesses, the
interest income derived from investment of the net proceeds during such period
will be sufficient to defray continuing general and administrative expenses, as
well as costs relating to compliance with securities laws and regulations
(including associated professional fees).

A Public Stockholder shall be entitled to receive funds from the Trust Fund
only in the event of a liquidation or if he seeks to convert his shares into
cash in connection with a Business Combination which he voted against and which
is actually consummated by the Company. In no other circumstances shall a
Public Stockholder have any right or interest of any kind or in the Trust Fund.

DILUTION

The difference between the public offering price per share of Common Stock
(assuming no value is attributed to the Warrants included in the Units) and the
pro forma net tangible book value per share of Common Stock of the Company after
this offering constitutes the dilution to investors in this offering. Net
tangible book value per share is determined by dividing the net tangible book
value of the Company (total tangible assets less total liabilities) by the
number of outstanding shares of Common Stock.

At July 31, 1996, the net tangible book value of the Company was
$(264,937), or $(.42) per share of Common Stock. After giving effect to the sale
of 1,250,000 shares of Common Stock included in the Units offered hereby and the
application of the estimated net proceeds therefrom, the pro forma net tangible
book value of the Company at July 31, 1996 would have been $6,435,063, or $3.43
per share of Common Stock, representing an immediate increase in net tangible
book value of $3.85 per share to existing stockholders and an immediate dilution
of $2.57 per share to new investors. The following table illustrates the
foregoing information with respect to dilution to new investors on a per-share
basis (assuming no value is attributed to the Warrants included in the Units):

Public offering price per share of Common Stock $6.00

Net tangible book value
before this offering $( .42)

Increase attributable
to new investors 3.85
-----

Pro forma net tangible book
value after this offering 3.43
------

Dilution to new investors $2.57
------
------

The following table sets forth, with respect to Initial Stockholders and
new investors, a comparison of the number of shares of Common Stock acquired
from the Company, the percentage ownership of such shares, the total
consideration paid, the percentage of total consideration paid and the average
price per share:

SHARES PURCHASED (1) TOTAL CONSIDERATION AVERAGE
-------------------- ------------------- PRICE
AMOUNT PERCENTAGE AMOUNT PERCENTAGE PER SHARE
------ ---------- ------ ---------- ---------
Initial
Stockholders 625,000 33.3% $ 125 - % $ .0001

New Investors 1,250,000 66.7% $7,500,000 100.0% $6.00
--------- ----- ---------- -----

TOTAL 1,875,000 100.0% $7,500,125 100.0%
--------- ----- ---------- -----
--------- ----- ---------- -----

- --------------------
(1) The above table assumes no exercise of the Underwriter's over-allotment
option. If the Underwriter's over-allotment option is exercised in full,
the new investors will have paid $8,625,000 for 1,437,500 shares of Common
Stock, representing virtually 100.0% of the total consideration for
approximately 69.7% of the total number of shares of Common Stock then
outstanding. See "Underwriting."

CAPITALIZATION

The following table sets forth the capitalization of the Company at July
31, 1996 and as adjusted to give effect to the sale of the Units being offered
hereby and the application of the estimated net proceeds therefrom:

AS
ACTUAL ADJUSTED
------ --------
Stockholders' equity:
Common Stock, subject to possible
conversion, 249,875 shares
at conversion value $ - $1,201,899
Preferred Stock, $.01 par
value, 5,000 shares authorized;
none issued - -
Common Stock, $.0001 par
value, 20,000,000 shares
authorized; 625,000 shares
issued and outstanding;
1,625,125 shares issued and
outstanding (excluding 249,875
shares subject to possible
conversion), as adjusted 63 163
Capital in excess of par value - 5,248,001
Deficit accumulated during (15,000) (15,000)
development stage ------ ---------

Total stockholders' equity $(14,937) $6,435,063
------ ---------
------ ---------

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company, a development stage entity, was formed on May 30, 1996 to
servefollowing description of our financial condition and results of
operations should be read in conjunction with the information included in this
prospectus. The description contains forward-looking statements that involve
risks and uncertainties. Our actual results could differ significantly from the
results discussed in the forward-looking statements as a vehicleresult of the risk
factors set forth below and elsewhere in this prospectus.

Overview

We develop, market, sell and support server-based software that is designed
to effectenable a merger, exchangediverse range of capital stock, asset
acquisitiondesktop computers to access server-based Windows
and UNIX applications from any location, over fast or other similar business combination (a "Business Combination")slow Internet connections.
We were incorporated in May 1982 and engaged in the development and manufacture
of hardware computer terminals. In 1996, we started to transition from a
hardware to a software manufacturer by working with three independent software
developers, with whom we entered into exclusive license agreements calling for
royalties aggregating 16.4%, 9.7%, 4.8% and 2.9% of net revenues from sales of
software products which contain the licensed technology for the years 1997,
1998, 1999 and 2000. After December 31, 2000, we have the option, under
particular circumstances, to purchase the licensed technology or exclusive
rights to it. We purchased most of the licensed technology from two of the
software developers for an operating business (a "Target Business") whichaggregate purchase price of $378,000 in the Company believes
has significant growth potential. The Company intends to utilize cash (to bethird
quarter of 1999.

Before October 1996, while we were developing our server-based software
products, our revenue was derived principally from the proceedssale and repair of
hardware computer terminals. We discontinued selling hardware products in 1996
and now provide only return-to-factory repair for the installed customer base.
Software licensing revenue in 1996 was $72,900, representing only 12.3% of our
revenue. Software revenue consists of licensing fees for products sold and
revenues from OEM license agreements relating to our software products called
GO-Global, GO-Joe and GO-Between, in addition to fees for training and software
maintenance. Consequently, we do not consider comparisons between 1997 and 1996
fiscal performance to be meaningful.

In October 1996, Sun Microsystems licensed GO-Joe for distribution with its
network computers, our server software for distribution with its UNIX operating
systems and GO-Global for use by its employees. GO-Global was released for sale
to customers other than Sun Microsystems in March 1997. In April 1998, IBM
licensed GO-Joe for distribution with its network computers and our server
software for distribution with computers using its UNIX operating systems. GO-
Joe was released for sale to customers other than IBM in July 1998. In December
1998, Corel licensed our software for distribution with its WordPerfect Office
Suite products.

During 1997 and part of 1998, we concentrated our efforts on OEM
opportunities and strategic alliances to establish product acceptance. OEM
licensing revenue from the Sun Microsystems agreement accounted for
approximately 70.0% of revenue in 1997 and licensing revenue from the Sun
Microsystems, IBM and Corel agreements accounted for approximately 18.8%, 16.5%
and 20.6% of revenues in 1998. We intend to continue to commit significant
financial and other resources toward our objective of expanding our strategic
OEM relationships and developing reseller channels. In pursuit of this
offering)objective, in August 1998, we hired a Vice President of Sales and two sales
directors to create and develop our reseller channel.

In May 1998, we hired eight software engineers based in Bellevue,
Washington and in December 1998 added eight engineers in Concord, New Hampshire
in connection with the acquisition of Corel's jBridge technology. In February
1999, we hired a Chief Financial Officer. We have increased our headcount from
12 at December 31, 1997 to 49 at September 30, 1999.

Product license revenues are recognized upon shipment only if we have no
significant obligations and collection of the resulting receivable is deemed
probable. When product licenses require product engineering development by us,
recognition of revenue is after delivery and customer acceptance of contract
milestones. Revenues for training are recognized when the services are
performed. Revenue from customer yearly maintenance fees, for ongoing customer
support and product updates are recognized equally over the term of the
contract, which typically is 12 months.

Our limited operating history as a software developer and manufacturer
makes the prediction of future operating results difficult and unreliable.
Future operating results may fluctuate due to many factors, including our
ability to attract and retain strategic partners, the degree and rate of growth
of the markets in which we compete and accompanying demand for our products, the
level of product and price competition, and our ability to establish and build
our software product reseller channels.

Nine Months Ended September 30, 1999 Versus Nine Months Ended September 30, 1998

Revenues. Software revenues have been derived primarily from two sources:
GO-Global product sales and OEM licensing revenues for GO-Joe, GO-Global and our
server software. Total revenues for the nine-month period ended September 30,
1999 increased by $950,500, or 63.4%, equity, debtto $2,449,500 from $1,499,000 for the same
period in 1998. The most important contributing factor was an increase in OEM
license sales in 1999 as compared to 1998.

revenue, for the nine months ended September 30, 1999 from $860,000, or 57.4% of
revenue, for the same period in 1998. This increase primarily is attributable to
the addition of sales and marketing personnel and a combination
thereofsubstantial increase in
effectingtrade show, promotional and public relations activities.

General and Administrative. General and administrative expenses primarily
consist of salaries and legal and professional services. In addition, our
corporate rent, utilities and administrative employee benefits are included in
general and administrative expenses. General and administrative expenses
increased by $2,942,700, or 375.9%, to $3,725,500, or 152.1% of revenue, for the
nine months ended September 30, 1999 from $782,800, or 52.2% of revenue, for the
same period in 1998. This increase is primarily due to:

. amortization and depreciation expense recorded in connection with the
acquisition of technology and assets from Corel Corporation in the
approximate amount of $2,400,000 for the nine months ended September
30, 1999, respectively;

. an increase in legal services;

. hiring additional administrative personnel; and

. increased utilities expenses necessary to support expanding
operations.

In addition, we recognized non-cash compensation charges in 1999 due to the
recognition of deferred compensation charges in the latter part of 1998.

Research and Development. Research and development expenses consist
primarily of salaries and benefits to software engineers, supplies and payments
to contract programmers and rent on facilities. Research and development
expenses increased by $1,137,400, or 179.3%, to $1,771,800, or 72.3% of revenue,
for the nine months ended September 30, 1999 from $634,400, or 42.3% of revenue,
for the same period in 1998. The increase was primarily due to the addition of
software engineers and the rent on new facility locations. As of September 30,
1999, we had 28 software engineers compared to 13 as of September 30, 1998.

Interest Expense. Interest expense decreased in 1999 as compared to 1998
due to the repayment of a Business Combination.convertible note payable in January 1999.

Year Ended December 31, 1998 Versus Year Ended December 31, 1997

Revenues. Total revenues for the year ended December 31, 1998 were
$2,124,200, an increase of 10.3% over the same period in 1997. The Company's effortsmost
important contributing factor was a 10.4% increase in identifyingsoftware-related revenues
to $1,971,000 in 1998 as compared to $1,785,000 in 1997. Our software revenues
have been derived primarily from two sources: GO-Global product sales and OEM
licensing revenues for GO-Joe, GO-Global and our server software. Revenues from
the Sun Microsystems OEM licensing agreement represented 70.0% of total revenue
in 1997 and from OEM license agreements with Sun Microsystems, IBM and Corel,
collectively, represented 67.0% of revenues in 1998.

Revenues also include service fees from maintenance contracts and training
services. The maintenance program was started in June 1997 to provide product
updates and support from the time of purchase. It is expected that many of the
maintenance programs will be renewed by customers to assure continued product
updates and support. Service revenue was $116,000 in 1998, or 5.5% of revenue,
as compared to a prospective Target Businessnominal amount of revenue in 1997.

Cost of Goods Sold. Cost of goods sold consists primarily of royalties,
materials such as manuals, media and packaging, expenses associated with product
maintenance and enhancements such as software corrections and updates, and
amortization of capitalized research and development expenses. Research and
development costs for new product development, after technological feasibility
is established, are treated as "capitalized software" on our balance sheet and
subsequently expensed as cost of goods sold over the shorter of three years or
the remaining estimated life of the products, whichever produces the higher
expense for the period.

Cost of goods sold was reduced to 16.2% of revenue in 1998, as compared to
24.1% in 1997. This primarily is attributed to the reduction in the royalty rate
paid to outside software developers under our exclusive licensing agreements.

Sales and Marketing Expenses. Sales and marketing expenses primarily
consist of salaries, sales commissions, travel expenses, trade show related
activities and promotional costs. Sales and marketing expenses increased 74.1%
to $1,440,300, or 67.8% of revenue, in 1998 from $827,300, or 43.0% of revenue,
in 1997. This increase primarily is attributable to the addition of sales and
marketing personnel and a substantial increase in trade show, promotional and
public relations activities. We expect that sales and marketing expenses will
continue to increase in dollar amounts, but decline as a percentage of total
revenues, as we continue to hire additional sales and marketing personnel,
establish reseller channels and expand promotional activities.

General and Administrative. General and administrative expenses primarily
consist of salaries and legal and professional services. In addition, our rent,
utilities and administrative employee benefits are included in general and
administrative expenses. General and

administrative expenses increased 244.5% to $1,118,600, or 52.7% of revenue, in
1998, from $324,700, or 16.9% of revenue, in 1997. This increase primarily is
attributed to legal services, hiring additional administrative personnel and
increased rent, utilities and benefit expenses necessary to support expanding
operations.

Interest Expense. Interest expense increased in the amount of $519,800 in
1998 primarily due to the recording of interest expense in the amount of
$475,000 on the convertible note payable as a result of the issuance of 278,800
shares of common stock at $.09 per share in connection with such note.

Research and Development. Research and development expenses consist
primarily of salaries and benefits to software engineers, supplies and payments
to contract programmers. Research and development expenses increased by 341.1%
to $840,200, or 39.6% of revenue, in 1998, from $190,500, or 9.9% of revenue, in
1997. We believe that a significant level of investment for research and
development is required to remain competitive and that such expenses are
expected to continue to increase over the foreseeable future.

Provision for Income Taxes. At December 31, 1998, we had approximately
$2.8 million in federal net operating loss carryforwards. The federal net
operating loss carryforwards will expire through 2018, if not utilized. In
addition, the Tax Reform Act of 1986 contains provisions that may limit the net
operating loss carryforwards available for use in any given period upon the
occurrence of various events, including a significant change in ownership
interests. In 1998, we experienced a "change of ownership" as defined by the
provisions of the Tax Reform Act of 1986. As such, our utilization of our net
operating loss carryforwards will be limited to approximately $400,000 per year
until such carryforwards are fully utilized. To date, we have utilized a portion
of our net operating loss carryforwards to reduce our overall income tax
liability.

Year Ended December 31, 1997 Versus Year Ended December 31, 1996

Before October 1996, while we were developing our server-based software
products, our revenue was derived principally from the following
industries: (i)sale and repair of
hardware computer terminals. We discontinued selling hardware products in 1996
and now provide only return-to-factory repair for the manufactureinstalled customer base.
Software licensing revenue in 1996 was $72,900, representing only 12.3% of
analytical and controlling equipment,
chemicals and allied products, electronic equipment and medical
instrumentation; (ii) health services (including HMOs, laboratories and
nursing homes); (iii) environmental services and products; (iv) engineering
and construction; (v) wholesale and retail distribution (including discount
operations)revenue as compared to 92.7% in 1997. Accordingly, the comparison of home furnishings, office supplies, computers andthe year
ended December 31, 1997 to the year ended December 31, 1996 is considered not
meaningful by management.

Revenues. Total revenues for the year ended December 31, 1997 were
$1,926,100, an increase of 223.8% over the same period in 1996. We believe the
most important contributing factor was a $1,712,000 increase in software-
related
products, medical equipment and supplies, apparel and accessories, automotive
parts and supplies and food and beverage products; (vi) internet and other
new media products and services; and (vii) communications and entertainment.
It has neither engaged in any operations nor generated any revenues to date.
The Company's entire activity since its inception has been$1,785,000 in 1997 versus

$72,900 in 1996 due to prepare for its
proposed fundraising through an offeringour change from selling hardware products in 1996 to
software products in 1997.

Cost of equity securitiesGoods Sold. Cost of goods sold was reduced to 24.1% of revenue in
1997, versus 50.4% in 1996. This reduction primarily is attributable to our
change in products from hardware to software as contemplated
by this Prospectus.

The Company'sdiscussed above.

Sales and Marketing Expenses. Sales and marketing expenses increased
329.3% to $827,300, or 43.0% of $15,000 through July 31, 1996 all relaterevenue, in 1997 from $192,700, or 32.4% of
revenue, in 1996. This increase primarily is attributable to generalthe addition of
sales and marketing personnel and a substantial increase in trade show,
promotional and public relations activities.

General and Administrative. General and administrative expenses providedincreased
by Unity.48.4% to $324,700, or 16.9% of revenue, in 1997 from $218,900, or 36.8% of
revenue, in 1996. This increase primarily is attributed to hiring additional
administrative personnel, legal services and benefit expenses necessary to
support expanding operations.

Research and Development. Research and development expenses increased by
356.8% to $190,500, or 9.9% of revenue, in 1997 from $41,700, or 7.0% of
revenue, in 1996 due to the change in our products as discussed above.

Liquidity and Capital Resources

Prior to 1998, we funded our operations, working capital needs and capital
expenditures primarily through cash flow from operations. In addition, since May
1996, $40,500 has been advanced1998, we received
$775,000 from the issuance of notes convertible into shares of our common stock
and in October and December of 1998 received aggregate net proceeds of
$2,697,400 in connection with the first and second closings of a private
placement offering.

On December 31, 1998, a $200,000 note converted into 111,520 shares of our
common stock and a note in the amount of $100,000 was repaid by Unity, on a non-interest bearing basis, for
payment onus.

In January 1999, the Company's behalf of certain expenses of this offering. Such
amounts will be paid to Unity out of that portion ofabove $475,000 convertible note was repaid from the
net proceeds notof the final closing of our private placement of securities whereby
we received additional net proceeds of $1,708,600 in consideration of 1,095,053
shares of our common stock and warrants to purchase an additional 219,010 shares
of our common stock.

In February 1999, we sold 62,525 shares of our common stock and warrants to
purchase an additional 676 shares of our common stock for gross proceeds of
$97,200.

On July 12, 1999, we completed a merger with GraphOn Corporation, a
California corporation ("GraphOn-CA"). By reason of the merger, each share of
GraphOn-CA's common stock was exchanged for 0.5576 shares of our common stock
and each outstanding option and warrant to purchase GraphOn-CA's common stock
was exchanged for options or warrants to purchase 0.5576 shares of our common
stock. We were the surviving corporation and changed our name, which was then
Unity First Acquisition Corp., to GraphOn Corporation. Each of GraphOn-CA's
officers is continuing in such role with us. The merger provided us with
$5,425,000 in net cash proceeds which was previously held in trust for us until
we consummated a merger with an operating business.

As of September 30, 1999, we had and cash equivalents of $2,795,200 as well
as $999,000 in available-for-sale securities compared to total liabilities of
$876,500, exclusive of deferred revenue of $75,400.

We anticipate that cash balances as of September 30, 1999, as well as
anticipated revenue from operations, will be sufficient to meet our working
capital and capital expenditure needs through the Trust Fund.

The net proceedsnext twelve months. We have no
material capital expenditure commitments for the next twelve months.

Year 2000 Compliance

We are aware of problems associated with computer systems as the year 2000
approaches. Many existing computer systems and applications and other control
devices use only two digits to identify a year in the date field, without
considering the impact of the upcoming change in the century. Others do not
correctly process "leap year" dates. As a result, such systems and applications
could fail or create erroneous results unless corrected so that they can
correctly process data related to the Company, after offering expensesyear 2000 and underwriting discountsbeyond. These problems are
expected to increase in frequency and severity as the year 2000 approaches, and
are commonly referred to as the "year 2000 problem."

We are continuing to assess the impact that the year 2000 problem may have
on our operations and have identified the following three key areas of approximately $1,050,000 ($1,173,750 ifour
business that may be affected:

. Products. We have evaluated each of our most current products and
older versions and believe that each is substantially year 2000
compliant. However, we believe that it is not possible to determine
whether all of our customers' products into which our products are
incorporated or connected will be year 2000 complaint because we have
little or no control over the Underwriter's over-allotment option is exercised in full), fromdesign, production and testing of our
customers' products.

. Internal Infrastructure. The year 2000 problem could affect the
salesystems, transaction processing computer applications and devices used
by us to operate and monitor all major aspects of the Units offered hereby are estimated to be $6,450,000 ($7,451,250 if the
Underwriter's over-allotment option is exercised in full). The Company will
useour business,
including financial systems, customer services, infrastructure,
materials requirement planning, master production scheduling, networks
and telecommunications systems. We believe that we have identified
substantially all of the net proceeds of this offering to acquire a
Target Business, including identifyingmajor systems, software applications and
evaluating prospective acquisition
candidates, selecting the Target Business, and structuring, negotiating and
consummating the Business Combination. The Company will not acquire a Target
Business unless it satisfies the Fair Market Value criteria at the time of
such acquisition. To the extent that securities of the Company arerelated equipment used in
whole or in part as consideration to effect a Business Combination, the
balance of the net proceeds of this offering not theretofore expended will be
used to finance the operations of the Target Business.

The net proceeds not held in the Trust Fund, approximately $442,500
($542,625 if the Underwriter's over-allotment option is exercised in full),
will be used for, or in connection with (i)our internal operations that
must be modified or upgraded in order to minimize the performancepossibility of "due
diligence" investigationsa
material disruption to our business. We have modified and upgraded all
affected systems. Because most of prospective acquisition candidates, (ii) legal,
accountingthe software applications used by us
are recent versions of vendor supported, commercially available
products, we have not incurred, and other expenses attendantdo not expect in the future to
incur, significant costs to upgrade these applications as year 2000
complaint versions are released by the respective vendors.

. Facility Systems. Systems such "due diligence"
investigationsas heating, sprinklers, test equipment
and to structuring, negotiatingsecurity systems at our facilities also may be affected by the
year 2000 problem. We currently are assessing the potential effect of
and consummatingcosts of remediating the year 2000 problem on our facility
systems. We estimate that our total cost of completing any required
modifications, upgrades or replacements of these systems will not have
a Business
Combination, and (iii) legal and accounting fees to be incurred in connection
withmaterial adverse effect on our business or results of operations.

We presently estimate that the Company's obligation to file periodic reports, proxy statements and
other informational material with the Securities and Exchange Commission. In
addition, the Company has been obligated to pay to Unity, since June 1,
1996, a monthly feetotal cost of $7,500 for general and administrative expenses. Such
general and administrative expenses have been accrued andaddressing our year 2000
issues will be paid to
Unity out ofless than approximately $10,000. This estimate was derived
utilizing numerous assumptions, including the assumption that portion of the net proceeds not held in the Trust Fund. See
"Certain Transactions."

The report of independent public accountants on the Company's financial
statements includes an explanatory paragraph with respect to the Company being
in its development stage, which raises substantial doubt about its ability to
continue as a going concern.

PROPOSED BUSINESS

INTRODUCTION

The Company was formed to serve as a vehicle for the acquisition of a
Target Business which the Company believes haswe already have
identified our most significant growth potential. The
Company intends to utilize cash (derived from the proceeds of this offering),
equity, debt or a combination of these in effecting a Business Combination. The
Company's efforts in identifying a prospective Target Business will be limited
to the Target Industries. While the Company may, under certain circumstances,
seek to effect Business Combinations with more than one Target Business, the
Company will, in all likelihood, have the ability, as a result of its limited
resources, to effect only a single Business Combination. The Company may effect
a Business Combination with a Target Business which may be financially unstable
or in its early stages of development or growth.

"BLANK CHECK" OFFERING

BACKGROUND. As a result of Management's broad discretion with respect to
the specific application of the net proceeds of this offering, this offeringyear 2000 issues. However, there can be characterized asno
guarantee that these assumptions are accurate, and actual results could differ
materially from those anticipated.

We currently are developing contingency plans to address the year 2000
issues that may pose a "blank check" offering. Although substantially allsignificant risk to our on-going operations. Such plans
could include accelerated replacement of the
net proceedsaffected equipment or software,
temporary use of this offering are intended to be generally applied toward
effecting a Business Combination, subject to the limitation concerning Target
Industries discussed under "- Introduction", such proceeds are not otherwise
being designated for any more specific purposes. Accordingly, prospective
investors will invest in the Company without an opportunity to evaluate the
specific meritsback-up equipment or risks of any one or more Business Combinations. A Business
Combination may involve the acquisition of, or merger with, a company which does
not need substantial additional capital but which desires to establish a public
trading market for its shares, while avoiding what it may deem to be adverse
consequences of undertaking a public offering itself, such as time delays,
significant expense, loss of voting control and compliance with various Federal
and state securities laws.

UNSPECIFIED INDUSTRY AND TARGET BUSINESS. To date, the Company has not
selected any particular industry from the Target Industries or any Target
Business in which to concentrate its search for a Business Combination.
Accordingly, there is no basis for investors in this offering to evaluate the
possible merits or risks of the Target Businesssoftware or the particular industry in
which the Company may ultimately operate. To the extent the Company effects a
Business Combination with a financially unstable company or an entity in its
early stageimplementation of development or growth (including entities without established
records of sales or earnings), the Company will become subjectmanual
procedures to numerous risks
inherent in the

business and operations of financially unstable and early stage or potential
emerging growth companies. In addition, to the extent that the Company effects
a Business Combination with an entity in an industry characterized by a high
level of risk, the Company will become subject to the currently unascertainable
risks of that industry. An extremely high level of risk frequently
characterizes certain industries which experience rapid growth. In addition,
although Management will endeavor to evaluate the risks inherent in a particular
industry or Target Business,compensate for system deficiencies. However, there can be no
assurance that any contingency plans that we implement would be adequate to meet
our needs without materially impacting our operations, that any such plan would
be successful or that our results of operations would not be materially and
adversely affected by the Companydelays and inefficiencies inherent in conducting
operations in an alternative manner.

Quantitative and Qualitative Disclosures about Market Risk

We are not exposed to financial market risks from changes in foreign
currency exchange rates or changes in interest rates and do not use derivative
financial instruments. A substantial majority of our revenue and capital
spending is transacted in U.S. dollars. However, in the future, we may enter
into transactions in other currencies. An adverse change in exchange rates would
result in a decline in income before taxes, assuming that each exchange rate
would change in the same direction relative to the U.S. dollar. In addition to
the direct effects of changes in exchange rates, such changes typically affect
the volume of sales or foreign currency sales price as competitors' products
become more or less attractive.

Adoption of New Accounting Pronouncements

In February 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 132, "Employer's Disclosure about Pensions
and Other Postretirement Benefits," which standardizes the disclosure
requirements for pension and other post-retirement benefits. The adoption of
SFAS No. 132 did not impact our disclosures.

Recently Issued Accounting Standards and Pronouncements Not Yet Adopted

In June 1998, FASB issued Statement of Financial Accounting Standard No.
133, "Accounting for Derivative Instruments and Hedging Activities." This
standard requires that every derivative instrument, including derivative
instruments embedded in other contracts, be

recorded on the balance sheet as either an asset or liability measured at its
fair value. The standard is effective for all fiscal years beginning after June
15, 2000. As we currently are not a party to any derivative financial
instruments and do not anticipate becoming a party to any derivative
instruments, management does not expect this standard to have a significant
impact on our financial statements.

BUSINESS

General

We develop, market, sell and support server-based software for the
application service providers, independent software vendors, and the enterprise
computing environment. Server-based computing, sometimes referred to as thin-
client computing, is a computing model where traditional desktop software
applications are relocated to run entirely on a server or host computer. Our
technology uses a small software program at each desktop, which allows the user
to interface with an application as if it where running on the user's desktop
computer. This centralized deployment and management of applications reduces the
complexity and total costs associated with desktop computing. The ability to
access such applications over computer networks and the Internet creates new
computing and operational models, in addition to new sales channels. Our server-
based technology works on today's most powerful personal computer or low-end
network computer, without application rewrites or changes to the corporate
computing infrastructure.

Industry Background

History

In the 1970's, software applications were executed on central mainframes
and typically accessed by low-cost display terminals. Information technology
departments were responsible for deploying, managing and supporting the
applications to create a reliable environment for users. In the 1980's, the PC
became the desktop of choice, empowering the user with flexibility, a graphical
user interface, and a multitude of productive and inexpensive applications. In
the 1990's, the desktop was provided access to mainframe applications and
databases, which run on large server computers. Throughout this computing
evolution, the modern desktop has become increasingly complex and costly to
administer and maintain. This is further exacerbated as organizations become
more dispersed with remote employees, and the desire increases to become more
closely connected with vendors and customers through the Internet.

Lowering Total Cost of Ownership

PC software in general has grown dramatically in size and complexity in
recent years. As a result, the cost of supporting and maintaining PC desktops
has increased substantially. A leading research firm estimates the annual cost
of operating a corporate PC was as much as $9,382 in 1997 and will increase to
as much as $13,485 by 2001. Industry analysts and enterprise users alike have
begun to recognize that the total cost of ownership of a PC, taking into account
the recurring cost of technical support, administration and end-user down time,
has become high both in absolute terms and relative to the initial hardware
purchase price.

With increasing demands to better control corporate computing costs,
industry leaders are developing technology to address total cost of ownership
issues. One approach, led by Sun Microsystems and IBM, utilizes Java-based
network computers, which operate by downloading small Java programs to the
desktop, which in turn are used for accessing server-based applications. The
other approach is Microsoft's Windows NT(TM), terminal server edition,
introduced in June 1998, which permits server-based Windows applications to be
accessed from the new Windows-based network computers. Both initiatives are
examples of server-based computing, which simplifies the desktop by moving the
responsibility of running applications to a central server, with the promise of
lowering total cost of ownership.

Cross-Platform Computing

Today's enterprises contain a diverse collection of desktop computers, each
with its particular operating system, processing power and connection type.
Consequently, it is becoming increasingly difficult to provide universal desktop
access to business-critical applications across the enterprise. As a result,
organizations resort to desktop emulation software, new hardware or costly
application rewrites.

A common cross-platform problem is the need to access UNIX or Linux
applications from a PC desktop. While UNIX-based computers dominate the
enterprise applications market, Microsoft Windows-based PCs are used on the
majority of enterprise desktops. Since the early 1990's, organizations have been
striving to connect desktop PCs to UNIX applications over all types of
connections, including networks and standard phone lines. This effort, however,
is complex and costly. The primary solution to date is known as PC X Server
software, large software programs that require substantial memory and processing
resources on the desktop. Typically, PC X Server software is difficult to
install, configure and maintain. Enterprises are looking for an effective UNIX
connectivity software for PCs and non-PC desktops that is easier and less
expensive to administer and maintain.

Application Service Providers

The nature of the Internet has led to the emergence of new operational
models and sales channels. Traditional high-end software packages that were once
too expensive for many companies are now available for rent over the Internet.
By servicing customers through a centralized operation rather than installing
and maintaining applications at each customer site, we expect that application
service providers quickly will play an important role in addressing an
enterprise's computing requirements. Today, application service providers are
faced with the difficult task of creating or rewriting applications to entertain
the broader market. Though the application service provider industry is just
beginning to emerge, we expect it to develop rapidly, due to application
vendors' desire to expand their markets.

Remote Computing

The cost and complexity of contemporary enterprise computing has been
further complicated by the growth in remote access requirements. As business
activities become physically distributed, computer users have looked to portable
computers with remote access capabilities to stay connected in a highly
dispersed work environment. One problem facing remote computing over the
Internet or direct telephone connections is the slow speed of communication in
contrast to the high speed of internal corporate networks. Today, applications
requiring remote access must be tailored to the limited speed and lower
reliability of remote connections, further complicating the already significant
challenge of connecting desktop users to business-critical applications.

The GraphOn Approach

Our server-based software deploys, manages, supports and executes
applications entirely on the server computer and distributes them efficiently
and instantaneously to virtually any desktop device. Our technology consists of
three key components:

. The server component runs alongside the server-based application and
is responsible for intercepting user-specific information for display
at the desktop.

. The desktop component is responsible only for sending keystrokes and
mouse motion to the server, as well as presenting the application
interface to the desktop user. This keeps the desktop simple, or thin,
as well as independent of application requirements for resources,
processing power and operating systems.

. Our protocol enables efficient communication over fast networks or
slow dial-up connections and allows applications to be accessed from
virtually any location with network-like performance and
responsiveness.

The major benefits of our approach are as follows:

. Lowers Total Cost of Ownership. Shrinking recurring costs is a primary
goal of our products. Today, installing enterprise applications
typically is time-consuming, complex and expensive, requiring
administrators to manually install and support diverse desktop
configurations and interactions. Our server-based software simplifies
application management by enabling deployment, administration and
support from a central location. Installation and updates are made
only at the server, avoiding desktop software and operating system
conflicts and minimizing at-the-desk support. According to a leading
research firm, server-based computing strategies, such as those
offered by us, may achieve as

much as a 30% savings by, among other things, simplifying the desktop
and moving application processing and management from individual
desktops to a centralized server-based infrastructure. For example, in
a 2,500-PC computing environment, a leading research firm has
calculated that a server-based approach would have saved approximately
$4.5 million in 1997 and, as computing complexity continues to grow,
could save approximately $16 million in 2001.

. Connects Diverse Computing Platforms. Today's computing
infrastructures are a mix of desktop devices, network connections and
operating systems. Enterprise-wide communication often requires costly
and complex emulation software or application rewrites. For example,
Windows PCs typically may not access a company's UNIX applications
without installing complex PC X Server software on each PC. Typical PC
X Servers are large and require an information technology professional
to properly ascertaininstall and configure each desktop. For Macintosh, the
choices are even fewer, requiring the addition of yet another vendor
product. For the newer desktop technologies, such as Sun Microsystems'
and IBM's network computers, access to UNIX is impractical without
server-based products. To rewrite an application for each different
desktop and their many diverse operating systems is often a difficult
and time-consuming task. In addition to the development expense,
issues of desktop performance, data compatibility and support costs
often make this option prohibitive. Our products provide organizations
the ability to access applications from virtually all desktops,
utilizing their existing computing infrastructure, without rewriting a
single line of code or assesschanging or reconfiguring desktop hardware.
This means that enterprises can maximize their investment in existing
technology and allow users to work in their preferred desktop
environment.

. Application Service Providers. Many large enterprises have made
significant investments in developing, marketing and selling
enterprise-wide software solutions. Our server-based technology is
designed to allow Windows, Linux and UNIX access from any desktop
connected to the Internet. Today's packaged applications can be
accessed quickly, easily and without modification.

. Leverages Existing PCs and Deploys New Desktop Hardware. Our software
brings the benefits of server-based computing to users of existing PC
hardware, while simultaneously enabling enterprises to begin to take
advantage of and deploy less complex network computers. This assists
organizations in maximizing their current investment in hardware and
software while, at the same time, facilitating a manageable and cost
effective transition to newer desktop devices.

. Efficient Protocol. Applications typically are designed for network-
connected desktops, which can put tremendous strain on congested
networks and may yield

poor, sometimes unacceptable, performance over remote connections. For
application service providers, bandwidth typically is the top
recurring expense when web-enabling or renting access to applications
over the Internet. Our highly efficient protocol sends only
keystrokes, mouse clicks and display updates over the network
resulting in minimal impact on bandwidth for application deployment,
thus lowering cost on a per user basis. Within the enterprise, our
protocol can extend the reach of business- critical applications to
all significant risk factors.

PROBABLE LACK OF BUSINESS DIVERSIFICATION. Whileareas, including branch offices, telecommuters and remote users,
over the CompanyInternet, phone lines or wireless connections. This concept
may under
certain circumstances, seekbe extended further to effect Business Combinationsinclude vendors and customers for increased
manufacturing flexibility, time-to-market and customer satisfaction.

Products

Our products are designed to allow enterprises to access UNIX, Linux and
Windows, applications from centrally managed servers without modification.
Currently, our products provide the UNIX and Linux server-based software. With
the integration of the WinBridge (formerly jBridge) technology in early 2000,
our current product line will be extended to access Windows applications from
centrally managed servers, widening our product offering and opportunities.

. GO-Global is a server-based software product for high performance
access to UNIX and Linux applications from any Windows PC located
virtually anywhere on an organization's network, the Internet or even
over a phone line. We began selling GO-Global in March 1997.

. GO-Joe is a server-based software product for accessing Unix and Linux
applications, from virtually any Java-enabled desktop or device,
including the Sun Microsystems and IBM network computers, desktops and
hand-held devices with web browsers such as Microsoft Internet
Explorer(TM) or Netscape Navigator(TM). We began selling GO-Joe in
July 1998. Sun Microsystems began shipping GO-Joe for distribution
with its network computers in July 1998.

. GO-Between is a server-based software product for accessing UNIX and
Linux applications from Microsoft's Windows NT, terminal server
edition. GO-Between minimizes the impact on server resources over
traditional emulator solutions for accessing UNIX and Linux
applications from Microsoft's terminal server edition products. This
increases the number of simultaneous users that may access UNIX from
any one terminal server edition server. Microsoft has released a
technical

whitepaper describing the UNIX access benefits of GO-Between for
terminal server edition users. We began shipping GO-Between in October
1998.

. WinBridge (formerly jBridge) is a technology we acquired from Corel in
December 1998. It will enable GO-Global, GO-Between and GO-Joe to
access server-based Windows applications. With the anticipated
integration of the WinBridge technology in early 2000, we will offer
complete cross platform access to Windows applications from virtually
any desktop. Since the applications are not running on the desktop,
even a non-Windows desktop will be able to access Windows
applications. Windows applications can be accessed from desktop
computers using various operating systems such as Macintosh, UNIX,
Linux and OS/2, which will appear and function as if they were running
locally on the desktop.

Target Markets

The market for our products comprises all organizations that need to access
UNIX, Linux and Windows applications from a wide variety of desktops from any
location, including over the Internet and dial-up lines. This includes large
organizations, such as Fortune 1000 companies, government and educational
institutions. Our software is designed to allow these enterprises to use the
best desktop for a particular purpose, rather than following a "one PC fits
all," high total cost of ownership model. Our opportunity within the marketplace
is more specifically broken down as follows:

. Enterprises Employing a Mix of Unix and Windows. Most major
enterprises employ a mix of UNIX computers and Windows PCs. Companies
that utilize a mixed computing environment require cross-platform
connectivity solutions like GO-Global that will allow users to access
UNIX applications from desktop PCs. It has been estimated that PCs
represent over 90% of enterprise desktops. We believe that our
products are well positioned to exploit this opportunity and that our
server-based software products will significantly reduce the cost and
complexity of connecting PCs to UNIX applications.

. Enterprises That Employ Microsoft's Terminal Server Edition. A leading
research firm estimates that the Microsoft terminal server market will
start to accelerate rapidly, with more than 390,000 host servers
installed by the end of 2000. Each terminal server edition server
supports a minimum of 10 users, such that the estimated user base for
terminal server editions will be at least 3.9 million in 2000. A
leading research firm reports that 38% of surveyed terminal server
edition users will require access to UNIX applications. Our management
believes the terminal server edition market to be a significant
opportunity for GO-Between.

. Enterprises With Remote Computer Users. Remote computer users comprise
one Target Business,of the fastest growing market segments in the computing industry.
Efficient remote access to applications has become an important part
of many enterprise computing strategies. A leading research firm
projects that approximately 25 million business users access computing
resources remotely in 1998 and that this number will grow to
approximately 137 million worldwide in 2003, with 60% of these users
still connecting via low-bandwidth modems. Our protocol is designed to
enable highly efficient low-bandwidth connections.

. Application Service Providers. High-end software applications in the
fields of human resources, enterprise resource planning, enterprise
relationship management and others historically only have been
available to organizations able to make large investments in capital
and personnel. The Internet has opened up global and mid-tier markets
to vendors of this software who may now offer it to a broader market
on a rental basis. Our products enable the vendors to provide Internet
access to their applications with minimal additional investment in
development implementation.

. Extended Enterprise Software Market. Extended enterprises allow access
to their computing resources to their customers, suppliers,
distributors and other partners, gaining flexibility in manufacturing
and increasing speed-to-market and customer satisfaction. For example,
extended enterprises may maintain decreased inventory via just-in-
time, vendor-managed inventory and related techniques. The Internet
has facilitated this development and a leading research firm has
predicted the extended enterprise software market will grow to an
estimated $5.76 billion in 2002. The early adoption of extended
enterprise solutions may be driven in part by enterprises' need to
exchange information over a wide variety of computing platforms. We
believe that our server-based software products, along with our low-
impact protocol, are well positioned to provide enabling solutions for
extended enterprise computing.

Strategic Relationships

We believe it is important to maintain our current strategic alliances and
intend to seek suitable new alliances in order to improve our technology and/or
enhance our ability to penetrate relevant target markets. The alliances that we
currently are focusing on are those that have immediate revenue generating
potential, strengthen our position in the server-based software market, add
complementary capabilities and/or raise awareness of our products.

Sun MicroSystems. In October 1996, Sun MicroSystems licensed our GO-Joe
for distribution within its initial Business Combination must benetwork computers and our server component for
distribution with its

UNIX computers and operating system. Pursuant to the Sun Microsystems agreement,
Sun has a perpetual, non-exclusive, world-wide and fully paid up license to,
among other things, distribute and sell GO-Joe with its network computers and to
distribute our server component with its UNIX computers and operating systems.
The license to Sun also allows Sun employees to use GO-Global internally and
remotely. In addition to what is provided for in the Sun agreement, Sun's
network computers currently display the GO-Joe logo, our name and our website
address each time GO-Joe is started, further increasing company and product
awareness. We plan to work with Sun's sales force and resellers to sell and
promote GO-Global and GO-Between as UNIX access solutions for users of PCs and
multi-user NT. As of September 30, 1999, Sun paid us a $2,500,000 one-time
royalty payment for completion of product delivery requirements and for a site
license for GO-Global. The Sun agreement is expected to terminate in December
2000, although Sun will continue to have rights to our products licensed
pursuant to the agreement after its termination.

Compuware. In September 1999, we entered into a three year, non-
exclusive agreement with Compuware, an international software and services
company. Pursuant to this agreement, we will license our WinBridge
(formerlyjBridge) server-based software for inclusion with Compuware's UNIFACE
software, a powerful development and deployment environment for enterprise
customer-facing applications. Compuware customers will use GraphOn's server-
based solution to provide enterprise-level UNIFACE applications over the
Internet. Compuware will private label and completely integrate WinBridge into
its UNIFACE deployment architecture as UNIFACE Jti.

Corel Corporation. In December 1998, we acquired Corel's jBridge
technology and its jBridge development team, in exchange for our securities. See
"Description of Securities-Corel Warrant and Similar Warrant." jBridge is
designed to allow any device running Java to access 32-bit Windows applications
remotely and unmodified. When combined with our UNIX products, we believe that
jBridge will provide our customers with a Target Business
which satisfies the Minimum Valuation Standard at the timecomplete enterprise solution, linking
any of such acquisition.
Consequently, itplatforms to virtually any desktop over virtually any connection.

In addition, we entered into a strategic alliance with Corel. We intend
through this alliance to promote our products to Corel's Windows, UNIX and Linux
customers. The alliance has a one year term ending in July 2000 which is
likelyrenewable by mutual consent for successive one year periods, and is terminable
at will by either party.

In October 1999, we entered into an agreement with Corel pursuant to
which we licensed to Corel the right to include our WinBridge technology with
any of Corel's applications. Under this non-exclusive perpetual license, Corel
will bundle our WinBridge software with certain of its applications, beginning
with its WordPerfect Office 2000 suite and, in the future, will fully
integrate our software into these applications. We are to receive $1,000,000
for this license, of which $600,000 has been recognized to date, with the
balance scheduled to be paid prior to the end of calendar year 2000.

Alcatel Italia. In July 1999, we entered into a five-year non-exclusive
agreement with Alcatel Italia, the Italian Division of Alcatel, the
telecommunications, network systems and services company. Pursuant to this
agreement, Alcatel will license our GO-Global thin-client server software for
inclusion with Alcatel's Turn-key Solution software, an optical networking
system. Alcatel customers are expected to use GraphOn's server-based solution
to access Alcatel's UNIX/X Network Management Systems applications from T-
based PCs. In addition,

Alcatel will deploy GO-Global internally to provide Alcatel employees with high-
speed network access to Alcatel's own server-based software over dial-up, LANs
and WANs.

Sales, Marketing and Support

Our customers, to date, are primarily Fortune 1000 companies and large
government organizations. Among our current customers are the following:

Alcatel Johnson & Johnson
Ameritech Corporation Lucent Technologies, Inc.
Amoco Corporation Motorola, Inc.
AT&T Corporation Nortel Technology
Canadian Meteorological Centre National Semiconductor Corp.
Cisco Systems, Inc. Pfizer Inc.
Corel Corporation Shell Oil Company
Ericsson Telecommunicatie B.V. Sun Microsystems, Inc.
Hewlett-Packard Company United States Geological Survey
IBM

While previously most of our revenues were from direct sales and OEM
agreements, we currently are developing and expanding relationships with a
select number of resellers. We expect to benefit from these relationships by
availing ourselves of their established customer-base, co-marketing programs and
marketing and sales capabilities. Such resellers include value-added resellers,
system integrators and OEM licensees. Our sales and marketing efforts will be
focused on increasing product awareness and demand among large enterprises and
developing formal distribution relationships with UNIX and Windows-oriented
resellers. Current marketing activities include a targeted direct mail campaign,
tradeshows, production of promotional materials, public relations and
maintaining an Internet presence for marketing and sales purposes. In August
1998, we hired three senior level sales professionals to develop our reseller
channels.

Due to the nature of our products, remote access via telephone lines or the
Internet can be used to troubleshoot and diagnose problems. We provide technical
support and training to OEMs and resellers that function as the Companyfirst line of
support for their own customers. We provide 90-day online Internet, e-mail, fax
and telephone-based services for technical support and software upgrades at no
charge. Additionally, purchasers of our products can choose to purchase an
annual extended maintenance program, which currently costs 15% of the product
purchase price per year.

Research and Development

Our research and development efforts currently are focused on developing
new products and further enhancing the functionality, performance and
reliability of existing products. We invested $840,200 and $1,771,800 in
research and development in 1998 and in the first nine months of 1999. We expect
increased expenditures in 2000. We have made significant investments in our
protocol and in the performance and development of our server-based software.

In May 1998, we hired a group of eight software engineers located in
Bellevue, Washington. They have experience in Java, protocol technology and
various Microsoft Windows operating systems. They are working to enhance our
existing software products as well as beginning to conceptualize and architect
future products. In December 1998, we hired nine additional software engineers
located in Concord, New Hampshire in connection with the acquisition of the
jBridge technology from Corel. This group has substantial Windows and Java
experience. We plan to continue to add software engineers in order to expand our
research and development capabilities, although there can be no assurances that
qualified personnel will be available to us as needed.

Operations

We control all purchasing, inventory, order processing and shipping of our
products and accounting functions related to our operations. Production of
software masters, development of documentation, packaging designs, quality
control and testing also are performed by us. CD-ROM and floppy disk
duplication, printing of documentation and packaging are accomplished through
outside vendors. We generally ship products upon receipt of order. As a result,
we have relatively little backlog at any given time, and do not consider backlog
a significant indicator of future performance.

Competition

The server-based software market in which we participate is highly-
competitive, although we believe we have significant advantages over our
competitors, both in product performance and market positioning. This market
ranges from remote access for a single PC user to server-based software for
large numbers of users over many different types of desktop hardware and
connections. Our competitors include manufacturers of conventional PC X Server
software and competition is expected from these and other companies in the
server-based software market. Competitive factors in the market in which we
compete include price, product quality, functionality, product differentiation
and breadth.

We believe our principal competitors for our current products include
Citrix Systems, Inc., Hummingbird Communications, Ltd., SCO, WRQ, Network
Computing Devices and NetManage. Hummingbird is the established market leader in
PC X Servers, believed to have over 50% of that market. WRQ, Network Computing
Devices and NetManage also offer traditional PC X Server software and have
minority positions within that market.

SCO introduced Tarantella, a server-based Java-to-Unix connectivity product
which competes with GO-Joe. However, SCO's principal product is a UNIX operating
system that competes with UNIX vendors like Sun Microsystems and IBM. We believe
that SCO, as a competitor to the other UNIX vendors, will have difficulty in
penetrating enterprises who utilize other vendors' UNIX operating systems, such
as Sun Microsystems and IBM.

Proprietary Technology

We license key components of our server-based technology from one
software developer to whom we pay royalties pursuant to an exclusive license
agreement. Minor elements of our server-based technology also are licensed
pursuant to a non-exclusive agreement, which calls for royalty payments by us.
Such royalty payments are based on a percentage of net revenues received by us
for sales of our products that contain the abilitylicensed technology. The royalty
rate under all of these agreements is an aggregate of 4.8% and 2.9% for 1999
and 2000. We hold options to purchase the developed technology and to purchase
a perpetual license to some of the non-exclusively licensed technology which
are exercisable beginning in December 2000. If we do not exercise our options
under the exclusive license agreements, the applicable royalty rate would
continue at 2% in 2001 and beyond. The exclusive license agreement, unless
terminated earlier pursuant to its terms, will terminate on September 6, 2006.
The non-exclusive agreement continues unless terminated for material breach.
We purchased most of the licensed technology for an aggregate purchase price
of $378,000 in the third quarter of 1999.

We rely primarily on trade secret protection, copyright law,
confidentiality and proprietary information agreements to protect our
proprietary technology and registered trademarks. The loss of any material trade
secret, trademark, trade name or copyright could have a material adverse effect
only
a single Business Combination. Accordingly, the prospects for the Company's
successon our results of operations and financial condition. There can be no assurance
that our efforts to protect our proprietary technology rights will be
entirely dependent uponsuccessful. Despite our precautions it may be possible for unauthorized third
parties to copy portions of our products, or to obtain information we regard as
proprietary. See "Legal Proceedings." We do not believe our products infringe on
the future performancerights of a single
business. Unlike certain entities which have the resources to consummate
several Business Combinations of entities operating in multiple industries or
multiple areas of a single industry, it is highly likely that the Company will
not have the resources to diversify its operations or benefit from the possible
spreading of risks or offsetting of losses. The Company's probable lack of
diversification may subject the Company to numerous economic, competitive and
regulatory developments, any or all of which may have a substantial adverse
impact upon the particular industry in which the Company may operate subsequent
to a Business Combination. In addition, by consummating a Business Combination
with only a single entity, the prospects for the Company's success may become
dependent upon the development or market acceptance of a single or limited
number of products, processes or services. Accordingly, notwithstanding the
possibility of capital investment in and management assistance to the Target
Business by the Company,third parties, but there can be no assurance that third
parties will not assert infringement claims against us in the Target Businessfuture, or that
any such assertion will provenot result in costly litigation or require us to be commercially viable. Priorobtain
a license to proprietary technology rights of such parties.

In November 1999, we acquire a U.S. patent for the consummationremote display of
a Business
Combination, the Company has no intention of either loaning any of the proceeds
of this offering to any company or purchasing a minority equity interest in any
company.

OPPORTUNITY FOR STOCKHOLDER EVALUATION OR APPROVAL OF BUSINESS
COMBINATIONS. The investors in this offering will, in all likelihood, neither
receive nor otherwise have the opportunity to evaluate any financial or other
information which will be made available to the Company in connectionMicrosoft Windows applications on UNIX and Linux desktops with selecting a potential Business Combination until after the Company has entered
into an agreement to effectuate a Business Combination. Such agreement to
effectuate a Business Combination, however, will be subject to stockholder
approval as discussed elsewhere herein.X Windows. As a
result, 36

investors in this offering will be almost entirely dependent onwe believe that we have acquired patent protection and licensing rights
for the judgment of
Management in connection with the selection and ultimate consummation of a
Business Combination. In connection with seeking stockholder approval of a
Business Combination, the Company intends to furnish its stockholders with proxy
solicitation materials prepared in accordance with the Exchange Act, which,
among other matters, will include a description of the operations of the Target
Business and audited historical financial statements thereof.

Under the Delaware Business Corporation Act, various forms of Business
Combinations can be effected without stockholder approval. In addition, the form
of Business Combination will have an impact upon the availability of dissenters'
rights (i.e., the right to receive fair payment with respect to the Company's
Common Stock) to stockholders disapproving the proposed Business Combination.
Under current applicable laws, only a merger, consolidation or share exchange
may give rise to a stockholder vote and to dissenters' rights. Nevertheless,
the Company will afford to investors in this offering the right to approve any
Business Combination, irrespective of whether such approval would be required
under applicable Delaware law. In the event, however, that 20% or more in
interest of Public Stockholders vote against approval of any Business
Combination, the Company will not consummate such Business Combination. All of
the Initial Stockholders, including all of the officers and directors of the
Company, have agreed to vote their respective shares of Common Stock in
accordance with the vote of the majority in interestdeployment of all Public Stockholders
with respectWindows applications remoted, or displayed, over a
network or any other type of connection to any Business Combination.

LIMITED ABILITY TO EVALUATE TARGET BUSINESS' MANAGEMENT. While the
Company's ability to successfully effectX Window systems, This patent,
which covers our WinBridge (formerly jBridge) technology, was originally
developed by a Business Combination will be
dependent upon the effortsteam of its officersengineers formerly with Exodus Technology and directors, the future rolehired by us
in May 1998.

Employees and Facilities

As of such persons, if any,September 30, 1999, we had a total of 49 employees, including 14 in
the Target Business cannot presently be stated with any
certainty. While it is possible that one or more of these persons will remain
associatedmarketing, sales and support, 28 in some capacity with the Company followingresearch and development and 7 in
administration and finance. No employees are covered by a Business Combination,
it is unlikely that any of them will devote their full efforts to the affairs of
the Company subsequent thereto. Moreover, there can be no assurance that such
persons will have significant experience or knowledge relating to the operations
of the particular Target Business. Furthermore, although the Company intends to
closely scrutinize the management of a prospective Target Business in connection
with evaluating the desirability of effecting a Business Combination, there can
be no assurance that the Company's assessment of such management will prove to
be correct, especially in light of the possible inexperience of the Company's
officers and directors in evaluating certain types of businesses. In addition,
there can be no assurance that such future management will have the necessary
skills, qualifications or abilities to manage a public company intending to
embark on a program of business development. The Company may also seek to
recruit additional managers to

supplement the incumbent management of the Target Business. There can be no
assurance that the Company will have the ability to recruit such additional
managers, or that such additional managers will have the requisite skills,
knowledge or experience necessary to enhance the incumbent management.

SELECTION OF A TARGET BUSINESS AND STRUCTURING OF A TARGET COMBINATION.
Subject to the limitation that a Target Business be within the Target
Industries, Management of the Company will have virtually unrestricted
flexibility in identifying and selecting a prospective Target Business. In
evaluating a prospective Target Business, Management will consider, among other
factors, the following:

- financial condition and results of operation;

- growth potential;

- experience and skill of management and availability of additional
personnel;

- capital requirements;

- competitive position;

- stage of development of the products, processes or services;

- degree of current or potential market acceptance of the products,
processes or services;

- proprietary features and degree of intellectual property or other
protection of the products, processes or services;

- regulatory environment of the industry; and

- costs associated with effecting the Business Combination.

The foregoing criteria are not intended to be exhaustive; any evaluation
relating to the merits of a particular Business Combination will be based, to
the extent relevant, on the above factors as well as other considerations deemed
relevant by Management in connection with effecting a Business Combination
consistent with the Company's business objective. In connection with its
evaluation of a prospective Target Business, Management anticipates that it will
conduct an extensive due diligence review which will encompass, among other
things, meetings with incumbent management and inspection of facilities, as well
as review of financial or other information which will be made available to the
Company.

The time and costs required to select and evaluate a Target Business
(including conducting a due diligence review) and to structure and consummate
the Business Combination (including negotiating relevant agreements and
preparing requisite documents for filing pursuant to applicable securities laws
and state corporation laws) cannot presently be ascertained with any degree of
certainty. Mr. Burstein, the Company's President and principal stockholder,
intends to devotecollective bargaining
agreement.

We currently occupy approximately 30% of his time to the affairs of the Company
and, accordingly, consummation of a Business Combination may require a greater
period of time than if such persons devoted their full time to the Company's
affairs. Any costs incurred in connection with the identification and evaluation
of a prospective Target Business with which a Business Combination is not
ultimately consummated will result in a loss to the Company and reduce the
amount of capital available to otherwise complete a Business Combination.

PRIOR INVOLVEMENT OF PRINCIPALS IN "BLANK CHECK" COMPANIES

The officers and directors of the Company (other than Mr. Norman Leben)
have held similar positions in seven other "blank check" companies, each of
which has consummated a Business Combination as of the date of this Prospectus.
Certain information with respect to each such Business Combination is set forth
below:

TRADING
DATE OF MARKET AND
NAME OF TARGET BUSINESS TICKER
BUSINESS COMBINATION NATURE OF BUSINESS SYMBOL
- ---------------- ----------- ------------------ ------

Bloc Development NYSE
Corp.(1) March 1988 Software development (GML)

Polyvision
Corporation April 1990 Manufacture and AMEX (PLI)
sale of vision projec-
tion systems,
architectural building
panels, modular
partitions and catalog
office products

T-HQ Inc. August 1991 Design and market- OTC Bulle-tin
ing of Nintendo and Board
SEGA games (TOYH)

SubMicron Systems August 1993 Semi-conductor capital NASDAQ-NMS
equipment manufacturer (SUBM)

Alliance
Entertainment Corp. November 1993 Distributor of pre- NYSE
recorded music, (CDS)
accessories and
entertainment
related products

USCI Inc. May 1995 Centralized auto- NASDAQ-NMS
mated computer- (USCM)
based cellular
telephone activation
systems

Brazil Fast Food Corp. March 1996 Owner and operator NASDAQ
of hamburger fast food SmallCap
restaurants (BOBS)
in Brazil
- ------------
(1) Bloc Development Corp. was acquired by Global Direct Mail Corp. in 1995.

SOURCES OF TARGET BUSINESSES

The Company anticipates that various Target Business candidates will be
brought to its attention from various unaffiliated sources, including securities
broker-dealers, investment bankers, venture capitalists, bankers, other members
of the financial community, and affiliated sources, including, possibly, the
Company's officers, directors and their affiliates, who may present solicited or
unsolicited proposals. While the Company does not presently anticipate engaging
the services of professional firms that specialize in business acquisitions on
any formal basis, the Company may engage such firms in the future, in which
event the Company may pay a finder's fee or other compensation. In no event,
however, will the Company pay a finder's fee or commission to officers or
directors of the Company or any entity with which they are affiliated for such
service. See "Management - Conflicts of Interest."

COMPETITION

In identifying, evaluating and selecting a Target Business, the Company
expects to encounter intense competition from other entities having a business
objective similar to that of the Company. Many of these entities are well
established and have extensive experience in connection with identifying and
effecting business combinations directly or through affiliates. Many of these
competitors possess greater technical, human and/or other resources than the
Company and the Company's financial resources will be relatively limited when
contrasted with those of many of these competitors. This inherent competitive
limitation may give others an advantage in pursuing the acquisition of certain
Target

Businesses. Further, the Company's obligation to seek stockholder approval of a
Business Combination may delay the consummation of a transaction; and the
Company's obligation in certain circumstances to convert into cash shares of
Common Stock held by Public Stockholders may reduce the resources available to
the Company for a Business Combination or for other corporate purposes. Either
of these obligations may place the Company at a competitive disadvantage in
successfully negotiating a Business Combination. Management believes, however,
that the Company's status as a public entity and its potential access to the
United States public equity markets may give the Company a competitive advantage
over privately-held entities having a similar business objective to that of the
Company in acquiring a Target Business with significant growth potential on
favorable terms.

UNCERTAINTY OF COMPETITIVE ENVIRONMENT OF TARGET BUSINESS

In the event that the Company succeeds in effecting a Business Combination,
the Company will, in all likelihood, become subject to intense competition from
competitors of the Target Business. In particular, certain industries which
experience rapid growth frequently attract an increasingly larger number of
competitors, including competitors with increasingly greater financial,
marketing, technical and other resources than the initial competitors in the
industry. The degree of competition characterizing the industry of any
prospective Target Business cannot presently be ascertained. There can be no
assurance that, subsequent to a Business Combination, the Company will have the
resources to compete effectively, especially to the extent that the Target
Business is in a high-growth industry.

FACILITIES

The Company presently occupies approximately 5007,200 square feet of office space in
Campbell, California pursuant to a lease which expires in April 2000, but is
renewable each year at our option until April 2006. We are required to vacate
these premises occupied by Unity. The costthe end of February 2000 as the City of Campbell has acquired
the building for such space is includedredevelopment. We anticipate no particular difficulty in
locating and moving to new facilities in a $7,500-per-month fee chargedtimely fashion. The City of Campbell
has agreed to pay us $85,000 to facilitate our relocation.

We also occupy leased facilities in Bellevue, Washington, Concord, New
Hampshire, and Reading, United Kingdom pursuant to leases expiring at varying
dates through 2003. Annual lease payments currently are approximately $310,000.
We believe our current facilities, other that those in Campbell, will be
adequate to accommodate our needs until the end of 2000.

Legal Proceedings

In late 1996, we disclosed numerous aspects of our proprietary technology
on a confidential basis to Insignia Solutions plc, some of whose assets were
later acquired by UnityCitrix Systems, Inc. When we learned of that acquisition in
January 1998, we made inquiry of Citrix and Insignia seeking assurances that
there had been no potential misuse of our confidential information.

On November 23, 1998, Citrix instituted litigation in the United States
District Court for the Southern District of Florida seeking a judicial
declaration that neither Citrix nor Insignia had misappropriated or infringed
upon our proprietary technology or breached the non-disclosure agreement. We
responded by filing a motion to dismiss the action for lack of jurisdiction. On
May 14, 1999, the court granted our motion and dismissed the case. Essentially,
the Florida court held there was no existing dispute between us and Citrix.
Citrix has appealed the dismissal of its case to the United States Court of
Appeals for the Eleventh Circuit, where the matter is awaiting oral argument.

On October 4, 1999, Insignia filed a complaint against us in the Superior
Court of the State of California, Santa Clara County, alleging that we had
attempted to disrupt Insignia's sale to Citrix, on February 5, 1998, of assets
related to Insignia's NTRIGUE software product line.

The complaint alleges that, as a result of such efforts, Insignia was required
by Citrix to place $8.75 million in escrow to enable Citrix to deal with
potential claims by us of proprietary rights in the assets being sold. The
complaint seeks unspecified general and administrative services.punitive damages. On December 13, 1999
we filed an answer denying the material allegations in Insignia's complaint.

Insignia's complaint also names Citrix and its UK subsidiary as defendants,
alleging that these companies have breached their February 5, 1998 contract with
Insignia by refusing to release money from the escrow. The Company believes, based upon rentscomplaint seeks
compensatory damages from Citrix related to that company's refusal to release
purchase money from escrow for payment to Insignia and feesother unspecified
damages.

MANAGEMENT

General

The following table sets forth information regarding our executive
officers, directors and other key employees:

Name Age Position
----- --- --------

Executive Officers and Directors
Robert Dilworth .................. 58 Chairman of the Board of Directors
Walter Keller .................... 49 President and Director
Robin Ford ....................... 49 Executive Vice President, Marketing and Sales and Director
Vince Pfeifer .................... 34 Vice President, Product Development
Eric Lefebvre .................... 33 Vice President, Business Development
Edmund Becmer .................... 41 Chief Financial Officer and Secretary
Lawrence Burstein ................ 57 Director
August P. Klein .................. 63 Director
Michael P. O'Reilly .............. 46 Director
Marshall C. Phelps, Jr. .......... 55 Director

Key Employees
Russann Keller ................... 30 Director of Marketing and Public Relations
Prakash Jadeja .................. 44 Director of Engineering
Robert Currey ................... 33 Principal Architect
William Tidd ..................... 37 Director of Software Development

The members of our board of directors are classified into three classes,
one of which is elected at each annual meeting of stockholders to hold office
for similar servicesa three-year term and until successors of such class have been elected and
qualified. The respective members of each class are set forth below:

. Class III: Walter Keller and Robin Ford (terms expire 2002)
. Class II: Robert Dilworth and August Klein (terms expire 2001)

. Class I: Michael O'Reilly, Lawrence Burstein and Marshall C. Phelps,
Jr. (terms expire 2000)

Robert Dilworth was appointed our Chairman in the New
York City metropolitan area, that the fee charged by Unity is at leastDecember 1999. He previously
served as favorableone of our directors since July 1999 and of GraphOn-CA between July
1998 and July 1999. Mr. Dilworth has served as it could have obtained from an unaffiliated person. See "Certain
Transactions."

EMPLOYEES

AsChairman of the dateBoard of
this Prospectus, the Company, in additionMetricom, Inc. since 1996, and as a director since 1987. He served as Metricom's
CEO from 1987 to its two
officers, has one part-time employee who1998. Metricom is employed in an administrative
capacity.

PERIODIC REPORTING AND AUDITED FINANCIAL STATEMENTS

The Company has registered its securities under the Exchange Acta leading provider of wireless data
communication and therefore has certain reporting obligations, including the requirement that it
file annualnetwork solutions. Prior to joining Metricom, from 1985 to
1987, Mr. Dilworth served as President of Zenith Data Systems Corporation, a
microcomputer manufacturer. Earlier positions include CEO at Morrow Designs, CEO
at Ultramagnetics, Division Manager at Varian Associates, Director of
Minicomputer Systems at Sperry Univac and quarterly reports with the Commission. In accordance with the
requirementsVice President of the Exchange Act, the Company intends to furnish to its
stockholders Annual Reports containing financial statements auditedFinance and
reported
on by its independent accountants.

The Company will not acquire a Target Business if audited financial
statements cannot be obtained for such Target Business. Additionally,
management will provide the Public Stockholders with audited financial
statements (prepared in accordance with generally accepted accounting
principles) of the prospective Target Business as part of the proxy solicitation
materials sent to the Public Stockholders to assist them in assessing the Target
Business. Management believes that the requirement of having available audited
financial statements for the Target Business will not materially limit the pool
of potential Target Businesses available for acquisition.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The current directors and officers of the Company are as follows:

NAME AGE POSITION
---- --- --------

Lawrence Burstein 53 President, Treasurer and
Director

John Cattier 62 Director

Barry Ridings 43 Director

Norman Leben 36 Secretary and Director

LAWRENCE BURSTEIN has been President, Treasurer andAdministration at Varian Data Machines. Mr. Dilworth is also a director of VLSI
Technology, Inc., Data Technology Corporation, Cortelco Systems, Inc. and
Photonics Corp. Mr. Dilworth holds a B.S. in Business and Mathematics from L.A.
State University.

Walter Keller has served as our President since July 1999 and of GraphOn-CA
between 1982 and July 1999. Mr. Keller, who previously served as our Chairman
from July 1999 until succeeded by Mr. Dilworth in December 1999 and as Chairman
of GraphOn-CA between 1982 and July 1999, was Chief Financial Officer of
GraphOn-CA from 1991 until February 8, 1999. Prior to the Companyfounding of GraphOn-CA
in 1992, Mr. Keller's experience included executive staff and senior level
management, sales and engineering positions at United Technologies Corporation
and Honeywell Inc. Mr. Keller is a member of the Society of Professional
Engineers and holds a B.S. in Mechanical Engineering and a M.S. in Electrical
Engineering from Santa Clara University in Santa Clara, CA. Mr. Keller is the
husband of Ms. Ford.

Robin Ford has served as our Executive Vice President, Marketing and
Sales since its inception.July 1999 and of GraphOn-CA between 1996 and July 1999. She was
elected as one of our directors in December 1999. Ms Ford was Vice President,
Marketing and Sales of GraphOn-CA from 1991 to 1996 and held various positions
in sales and marketing at GraphOn-CA from 1983 to 1991. Ms. Ford was a
director of GraphOn-CA from October 1991 to June 1998. Prior to joining
GraphOn-CA, Ms. Ford held various sales management and technical positions at
Intel Corporation, National Semiconductor Corporation and Grid Systems
Corporation. Ms. Ford's responsibilities with GraphOn and GraphOn-CA have
included building and maintaining GraphOn's and GraphOn-CA's sales and
marketing operations and obtaining major government and OEM contracts. Ms.
Ford is the wife of Mr. Keller.

Vince Pfeifer has served as our Vice President, Product Development since
July 1999 and of GraphOn-CA between October 1998 and July 1999. Mr. Pfeifer was
General Manager and Director of Product Development of GraphOn-CA from June 1998
to August 1998. From June 1995 to May 1998, Mr. Pfeifer served as the Vice-
President of Product Development for Exodus Technologies and ConnectSoft
Communication Corporation and has nine years of experience in designing,
developing, testing and supporting commercial grade software.

Eric Lefebvre has served as our Vice President, Business Development since
July 1999 and of GraphOn-CA between June 1999 and July 1999. From April 1997
through June 1999, he served as Director of Strategic Business and Alliances at
Corel Corporation where he was responsible for developing strategic alliances
and seeking new areas of business. From April 1996 to May 1997, Mr. Lefebvre
served as International Corporate Communications Manager at Corel. From November
1991 to April 1996, her served at Corel as Communication and Market Development
Manager and Marketing Manager (Europe). Mr. Lefebvre holds a Masters of
International Affairs from Carleton University and an Honours B.Sc. in
Government and Politics and Business Management from the University of Maryland.

Edmund Becmer has served as our Chief Financial Officer and Vice President
of Finance & Administration since July 1999 and of GraphOn-CA between February
1999 and July 1999. From May 1998 until December 1998, Mr. Becmer was Chief
Financial Officer of TMCI Electronics, Inc., a publicly-traded company, based in
San Jose, CA, with subsidiaries involved in the manufacturing of semiconductor
equipment. In February, 1999, TMCI Electronics filed for reorganization under
Chapter 11 of the United States Bankruptcy Code. Prior to joining TMCI
Electronics, from March 1996 to May 1998, Mr. Becmer was a member of the
accounting firm of Moore Stephens, P.C., where he was responsible for SEC
audits, mergers and acquisitions and business consulting. From August 1993 to
June 1995, Mr. Becmer was controller of First City Industries, Inc. in New York,
NY, a holding company with subsidiaries in manufacturing, commercial real estate
and residential real estate. From June 1987 to June 1993, Mr. Becmer was
CFO/Controller of Lincorp Holdings, Inc., a public investment holding company in
New York, NY, with investments in banking and commercial real estate and a
Fortune Service 500 company. Mr. Becmer also was with the accounting firms of
BDO Seidman, LLP and Deloitte and Touche LLP. Mr. Becmer holds a B.S.B.A. from
San Diego State University and is a Certified Public Accountant.

Lawrence Burstein has served as one of our directors since May 1996. Mr.
Burstein was President and Treasurer between May 1996 and July 1999. For
approximately ten years prior to 1996, Mr. Burstein was the President, a
director and principal stockholder of Trinity Capital Corporation, a private
investment banking concern. Trinity ceased operations upon the formation of
Unity Venture Capital Associates Ltd. ("Unity VCA"). Since March 1996, Mr.
Burstein has been Chairman of
the BoardPresident and a principal shareholderstockholder of Unity.Unity VCA. Mr.
Burstein is a director of fivethe following four public companies, being, respectively, TOYH, USCM, BOBS,companies: T-HQ Inc., which
designs and markets Nintendo and Sega

games; Brazil Fast Food Corp., the owner and operator of the second largest fast
food restaurant chain in Brazil; CAS Medical Systems, Inc., engaged in the
manufacture and marketing of blood pressure monitors and other medical products
principally for the neonatal market,market; and The MNI Group Inc., engaged in the
marketing of specially formulated medical foods. Mr. Burstein received an L.L.B.
from Columbia Law School.

JOHN CATTIERAugust P. Klein has served as one of our directors since July 1999 and of
GraphOn-CA between August 1998 and July 1999. Mr. Klein has been, a director ofsince 1995,
the Company since its inception. Since
May 1996, Mr. Cattier has been a director and a shareholder of Unity. Mr.
Cattier has been an independent consultant since January 1985. From 1957 to
December 1984, Mr. Cattier was associated with White Weld & Co., investment
bankers, serving as a general partner, and with Credit Suisse White Weld (which
subsequently became Credit Suisse First Boston), investment bankers, in various
capacities. Mr. Cattier is a director of Pacific Assets Trust PLC, a United
Kingdom investment trust,Founder, CEO and Chairman of the Board of DirectorsJSK Corporation and, since 1997,
of Heptagon
Investments Limited,APJK Corporation, general contractors and service providers for the insurance
industry. From 1989 to 1993, Mr. Klein was founder and CEO of Uniquest, Inc., an
investment company ("Heptagon").object oriented application software company. From 1984 to 1988, Mr. Cattier receivedKlein
served as CEO of Masscomp, Inc., a B.A. from Yale University.

BARRY RIDINGSdeveloper of high performance real time
mission critical systems and UNIX-based applications. Mr. Klein has beenserved as
Group Vice President, Serial Printers at Data Products Corporation and President
and CEO at Integral Data Systems, a directormanufacturer of personal computer printers.
From 1957 to 1982, he was General Manager of the Company since its inception. Since
March 1990, Mr. Ridings has been a ManagingRetail Distribution Business
Unit and Director of Alex Brown & Sons,
investment bankers. From June 1986 to March 1990,Systems Marketing at IBM. Mr. Ridings was a Managing
Director of Drexel Burnham Lambert, investment bankers. Mr. RidingsKlein is a director of
SubMicron SystemsQuickSite Corporation and serves as a company engagedtrustee of the Computer Museum in Boston,
Massachusetts. Mr. Klein holds a B.S. in Mathematics from St. Vincent's College.

Michael P. O'Reilly has served as one of our directors since July 1999 and
of GraphOn-CA between December 1998 and July 1999. Mr. O'Reilly has served as
Executive Vice President, Finance, Chief Financial Officer and Treasurer of
Corel Corporation since December, 1997. Prior to joining Corel, from 1988 until
1997, Mr. O'Reilly was a senior tax partner in the design,
manufactureOttawa practice of KPMG, the
international professional advisory services firm. Mr. O'Reilly is a Chartered
Accountant. He holds a B.A. from the University of Western Ontario and marketingan Hons.
B. Comm from the University of advanced processing systems sold primarily to
manufacturersWindsor. Mr. O'Reilly is a nominee of semiconductor chips, Transcor Waste

Services Corp.,Corel.

Marshall C. Phelps, Jr. has served as one of our directors since November
1999. From 1980 until August 1999, Mr. Phelps was employed by IBM in a waste management company, Leaseway Transportation Corp., a
trucking company, Rax Restaurants Inc., a restaurant chainseries of
executive positions, most recently as IBM's Vice President, Intellectual
Property and Norex America
Inc., a shipping company. Mr. Ridings received an M.B.A. from Cornell
University.

NORMAN LEBEN has been SecretaryLicensing, with responsibility for IBM's worldwide intellectual
property activities, licensing, standards and telecommunications policy. He is a
director of CommercialWare Inc., a developer of order processing and fulfillment
sofware for direct marketing concerns. Mr. Phelps holds a BA from Muskingum
College, an MS in Advanced Management from Stanford Graduate School of Business,
and a JD from Cornell University School of Law.

Russann Keller has served as our Director of Marketing Communications and
Public Relations since early 1999 and previously held various sales, marketing,
and technical positions with us since 1990, including MarCom Manager, Corporate
Communications Manager and Support Manager. Ms. Kelley has also held various
technical, editorial, and marketing positions at Knight-Ridder, Boole and
Babbage, Elan Software, and was co-founder and Vice President at

Syber Sonic, Inc. Ms. Keller holds a degree in Environmental Biology. Ms. Keller
is the Companydaughter of Mr. Keller.

Prakash Jadeja has served as our Director of Engineering since its
inception.July 1999
and of GraphOn-CA between September 1997 and July 1999. From February 1996 to
August 1997, Mr. Leben is,Jadeja led the Digital Video Disc and since 1988 has been, a partnerCompact Disc Recordable
System software group at Apple Computer. From February 1992 to January 1996, Mr.
Jadeja was Vice President of DML, certified
public accountants. Prior thereto and from 1985, Mr. Leben was engaged in the
acquisition, management, syndication and operation of real estate and other
emerging marketing businesses.Engineering at Workstation, Inc. Prior to 1985,that, Mr.
LebenJadeja held a number of technical and management positions at Insignia
Solutions, Inc., which he co-founded. Mr. Jadeja holds a B.S. in Applied
Computer Science from De Montford University in England.

Robert Currey has served as our Principal Architect and developer since
July 1999 and of GraphOn-CA between June 1998 and July 1999. Prior to joining
GraphOn-CA, beginning in November 1996, Mr. Currey served as team leader at
Exodus Technologies. Mr. Currey was employed by
Laventhol & Horwath.Senior Engineer at Connectsoft Corp. from
January 1994 until November 1996. Previously, Mr. Leben receivedCurrey was Senior Engineer at
Attachmate Corp. from June 1992 to January 1994. Mr. Currey has an M.S. in
computer science and a B.B.A.B.S. in applied mathematics from George WashingtonOregon State University.

All directors hold office until the next annual meetingWilliam Tidd has served as our Director of stockholdersSoftware Development since July
1999 and the electionof GraphOn-CA between January 1999 and qualification of their successors. Directors receive no
compensation for servingJuly 1999. Prior to joining
GraphOn-CA, from 1996 to 1998, Mr. Tidd served on the BoardjBridge development team
for Corel Corporation. Mr. Tidd owned and operated Tirel Corporation, a software
development company, from 1994 to 1996 after co-founding Atlantic Design
Systems, which became Tirel Corporation in 1994. Mr. Tidd holds a Master of
Directors other than reimbursement of
reasonable expenses incurredEngineering Degree in attending meetings. Officers are elected
annually by themechanical engineering from Carnegie Mellon University.

Board of Directors and Committees

Our board of directors consists of seven individuals. Corel has a
contractual right to designate one individual to be a nominee to serve as a
director until Corel controls less than 17% of the voting power of our capital
stock. We also agreed not to reduce the size of the our board below six without
Corel's prior written consent, until the date which is two years after the date
of the initial public offering of our equity securities or the closing of the
sale of all or substantially all of our assets or of any merger or consolidation
with any other entity. The non-employee directors are eligible to participate in
our stock option plan.

We have established an audit committee which reviews and supervises our
financial controls, including selection of our auditors, reviewing the books and
accounts, meeting with our officers regarding our financial controls, acting
upon recommendations of auditors and taking further actions as the audit
committee deems necessary to complete an audit of our books and accounts. The
audit committee also evaluates potential conflicts of interest between us and
our

executive officers and directors and serves to evaluate any transactions or
events which could be deemed to be improper, as well as other matters which may
come before it or as directed by the board. The audit committee currently
consists of two directors, Messrs. O'Reilly and Phelps.

We have established a compensation committee, which reviews and approves
the compensation and benefits for our executive officers, administers our stock
plans and performs other duties as may from time to time be determined by the
board. The compensation committee currently consists of two directors, Messrs.
Dilworth and Klein.

Executive Compensation and Employment Agreements

The compensation for our key management is determined from time to time by
our board or compensation committee. In addition, our board or compensation
committee may, in our discretion, award these individuals cash bonuses, options
to purchase shares of our common stock under the Stock Option Plan, and such
other compensation, including equity-based compensation, as our board or
compensation committee shall approve from time to time.

The following table sets forth information with respect to the compensation
of our Chief Executive Officer and each of the two other executive officers who
were serving as our executive officers during fiscal year 1998 and whose total
annual salary and bonus during such fiscal year exceeded $100,000:

Summary Compensation

Annual Compensation
-------------------
All Other
Year Salary Bonus Compensation
---- --------- ------ ------------

Walter Keller ............................. 1998 $135,181 0 $ 0
President and Chief Executive Officer
Robin Ford ................................ 1998 $141,960 0 $ 0
Executive Vice President,
Marketing and Sales
Zdravko Podolski(1) ....................... 1998 $ 94,750 0 $75,000
Vice President, Strategic
Sales and Alliances

___________
(1) Mr. Podolski's employment with us was terminated on September 1, 1998.
Pursuant to a severance agreement with Mr. Podolski, we paid him $75,000 in
consideration for the release of any and all claims he may have had against
us.

Employment Agreements

On October 22, 1998, we entered into employment agreements with Mr. Keller
and Ms. Ford which provide for a term of two years, annual base salaries of
$140,000 and $130,000, respectively, and eligibility to receive bonuses at the
discretion of our board. Such agreements contain provisions for bonuses upon
achievement of milestones set forth in such agreements, non-competition for the
term of each agreement and confidentiality. The base salaries are subject to
change at the discretion of our board. Mr. Keller and Ms. Ford also are entitled
to participate in any of our pension, insurance or benefit plans, including our
stock option plans. Each employment agreement also provides for a severance
payment in the amount of one year's compensation in the event that the employee
is terminated by us without cause, or the employee resigns for Good Reason (as
defined in the agreement) during the employment term. Good Reason includes,
among other things, the failure of a successor to us to assume the employment
agreements in connection with change in control transactions such as a merger,
consolidation or a sale of all or substantially all of our assets. Good Reason
also includes substantial changes in the duties, position, compensation and
location of the employment.

On February 8, 1999, we entered into an employment agreement with Mr.
Becmer providing for employment at-will, an annual base salary of $125,000 and
options to purchase up to 69,700 shares of common stock under our Stock
Option/Stock Issuance Plan. Options to purchase 4,356 shares vested on May 8,
1999 and the remaining options will vest monthly in 45 equal installments. The
base salary is subject to annual review by our board. The agreement provides for
eligibility to receive additional options to purchase up to 13,940 shares of our
common stock upon meeting quarterly management objectives during his first year
of employment. Mr. Becmer also is entitled to participate in any of our pension,
insurance or benefit plans, including our stock option plans. The agreement
provides for a severance payment in the amount of six months' compensation in
the event of a termination due to a merger or acquisition where Mr. Becmer's
duties substantially change, a reduction in his compensation, a relocation or
the failure of any successor to us to assume the agreement.

1998 Stock Option/Stock Issuance Plan

Our 1998 Stock Option/Stock Issuance Plan is intended to promote our
interests by providing eligible persons with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in us as
an incentive for them to remain in our service. The plan was adopted by our
board on June 23, 1998 and was approved by our stockholders on June 23, 1998.

Pursuant to the terms of the plan, 2,230,400 shares of common stock may be
issued to our officers and other employees, our non-employee board members and
independent consultants in our service. However, in no event may any one
participant in the plan receive option grants or

direct stock issuances for more than 278,000 shares of common stock in the
aggregate per calendar year.

The shares of common stock reserved for issuance under the plan are made
available from authorized but unissued common stock or from shares of common
stock reacquired by us, including shares repurchased on the open market. Should
an option expire or terminate for any reason prior to exercise in full, the
shares subject to the portion of the option not so exercised will be available
for subsequent issuance under the plan. Unvested shares issued under the plan
and subsequently repurchased by us will be added back to the share reserve and
will accordingly be available for subsequent issuance under the plan.

The compensation committee of the board will have exclusive authority to
administer the plan with respect to option grants and stock issuances made to
our executive officers and non-employee board members. The compensation
committee and a secondary committee of one or more board members will each have
separate but concurrent authority to make option grants and stock issuances
under those programs to all other eligible individuals. The term "plan
administrator," as used in this description of the plan, will mean either the
compensation committee or the secondary committee, to the extent each such
entity is acting in its capacity as administrator of the plan.

The plan is divided into two separate components:

. the option grant program under which eligible individuals may, at the
discretion of the Board. Mr.
Burstein intendsplan administrator, be granted options to devote approximately 30%purchase
shares of his time tocommon stock at an exercise price not less than 85% of their
fair market value on the affairsgrant date and

. the stock issuance program under which such individuals may, in the
discretion of the Company. The Company hasplan administrator, be issued shares of common stock
directly, through the purchase of vested or unvested shares at a price
not entered into employment agreements with anyless than 85% of its
officers.

EXECUTIVE COMPENSATION

No officer has received any cash compensation fromtheir fair market value at the Company since
inceptiontime of issuance
or as a fully-vested bonus for services rendered. Other than the $7,500 monthly administrative
fee, no compensation of any kind (including finders and consulting fees) will
be paid to any Initial Stockholder, or any affiliate thereof forpast services rendered to us.

The shares subject to each option granted under the Company prioroption grant program
and unvested shares issued under the stock issuance program will vest in one or
more installments over the recipient's period of service with us. However, no
vesting schedule will be at a rate less than 20% per year, with the initial
vesting to occur no later than one year after the grant date of the option or
the issue date of the unvested shares. No granted option may have a term in
excess of ten years, and each granted option will be subject to earlier
termination within a designated period following the optionee's cessation of
service with us.

The exercise price may be paid in cash or in shares of common stock.
Options may also be exercised for vested shares through a same-day sale program,
pursuant to which a designated brokerage firm effects the immediate sale of
those shares and pays over to us, out of the sale proceeds available on the
settlement date, sufficient funds to cover the exercise price for the purchased
shares. In addition, the plan administrator may provide financial assistance to
one or more participants in connection with the exercise of their outstanding
options or the purchase of their unvested shares by allowing such individuals to
deliver a full-recourse, interest-bearing promissory note in payment of the
exercise or purchase price and any associated withholding taxes incurred in
connection with such exercise or purchase.

In the event that we are acquired by merger or sale of substantially all of
our assets, each outstanding option under the option grant program which is not
to be assumed by the successor corporation or otherwise continued in effect will
automatically accelerate in full, and all unvested shares under the plan will
immediately vest, except to the extent our repurchase rights with respect to
those shares are assigned to the successor corporation or otherwise continued in
effect. The plan administrator will have complete discretion to grant one or
more options under the option grant program which will become exercisable on an
accelerated basis for all of the option shares upon either:

. an acquisition of us, whether or not those options are assumed or
otherwise continued in effect or

. the termination of the optionee's service within a designated period
following an acquisition in which those options are assumed or
continued in effect.

The vesting of outstanding shares under the stock issuance program may be
accelerated upon similar terms and conditions.

The plan administrator also is authorized under the option grant and stock
issuance programs to grant options and to structure repurchase rights so that
the shares subject to those options or repurchase rights will immediately vest
in connection with a change in ownership or control of us, whether by successful
tender offer for more than 50% of the outstanding voting stock or by a change in
the majority of the board by reason of one or more contested elections for board
membership. Such accelerated vesting may occur either at the time of such change
in ownership or control or upon the subsequent involuntary termination of the
individual's service within a designated period, not to exceed 18 months,
following such change in ownership or control.

In the event any change is made to the outstanding shares of common stock
by reason of any recapitalization, stock dividend, stock split, combination of
shares, exchange of shares or

other change in corporate structure effected without our receipt of
consideration, appropriate adjustments will be made to:

. the maximum number and/or class of securities issuable under the plan;

. the number and/or class of securities for which any one person may be
granted stock options and direct stock issuances under the plan per
calendar year; and

. the number and/or class of securities and the exercise price per share
in effect under each outstanding option.

Such adjustments will be designed to preclude any dilution or enlargement of
benefits under the plan or the outstanding options granted pursuant to the plan.

The plan administrator has the authority to effect the cancellation of
outstanding options under the option grant program in return for the grant of
new options for the same or different number of option shares with an exercise
price per share based upon the fair market value of the common stock on the new
grant date.

The board may amend or modify the plan at any time. The plan will terminate
on June 22, 2007, unless sooner terminated by the board or in connection with the Business
Combination; provided, however, that such persons shall be entitled to
receive, upon consummationan
acquisition of the Business Combination, commissions for
monies raised by them for the Companyus in connection with the Business
Combination, at rates that are no less favorable to the Company than those which the Company would pay to unaffiliated third parties. In addition,plan is not assumed by the Affiliated Initial Stockholders will receive reimbursement for any
out-of-pocket expenses incurred in connection with activities on behalf of
the Company. There is no limit on the amount of such reimbursable expenses
and there will be no review of the reasonableness of such expenses by anyone
other than the Board of Directors which includes two members who are officers
and who may seek reimbursement.

STOCK OPTION PLAN

The Company'sacquiring entity.

1996 Stock Option Plan

("Our 1996 Plan")Stock Option Plan was adopted by both the
Board of Directorsour board and a majority in
interest of theour stockholders of the Company on May 30, 1996. The 1996 Planplan provides for the granting
of options which are intended to qualify either as 44

incentive stock options ("Incentive Stock Options")
within the meaning of Section 422 of the Internal Revenue Code of 1986 or as
nonstatutory stock options which are not intended to meet the requirements of
such section ("Nonstatutory Stock
Options").section. The total number of shares of Common Stockour common stock reserved for
issuance under the 1996 Planplan is 187,500. Options to purchase shares may be granted
under the 1996 Planplan to persons who, in the case of Incentive Stock Options,incentive stock options, are our
employees, (including officers) of the Company,including officers, or, in the case of Nonstatutory
Stock Options,nonstatutory stock options,
are our employees, (including officers)including officers, or our non-employee directors of
the Company.directors.

The 1996 Planplan provides for its administration by the Board of Directorsour board or a committee chosen
by the Board of Directors,our board, which has discretionary authority, subject to certain restrictions,restriction, to
determine the number of shares issued pursuant to Incentive Stock Optionsincentive stock options and
Nonstatutory Stock Optionsnonstatutory stock options and the individuals to whom, the times at which and
the exercise price for which options will be granted.

54
The exercise price of all Incentive Stock Optionsincentive stock options granted under the 1996
Planplan
must be at least equal to the fair market value of such shares on the date of
the grant or, in the case of Incentive Stock Optionsincentive stock options granted to the holder of
more than 10% of the Company's Common Stock,our common stock, at least 110% of the fair market value of
such shares on the date of the grant. The maximum exercise period for which
Incentiveincentive stock Optionsoptions may be granted is ten years from the date of grant (fiveor
five years in the case of an individual owning more than 10% of the Company's
Common Stock).our common
stock. The aggregate fair market value (determined at the date of the
option grant) of shares with respect to which Incentive Stock Optionsincentive
stock options are exercisable for the first time by the holder of the option
during any calendar year shall not exceed $100,000. NoThe aggregate fair market
value is determined at the date of the option grant.

As of September 30, 1999, options may be grantedfor 811,723 shares of common stock were
outstanding under our 1998 and 1996 plans, no options had been exercised and
1,418,677 shares remained available for future issuance under these plans.

CERTAIN RELATIONSHIPS AND TRANSACTIONS

Mr. Keller, our Chairman and President, sold to Mr. Thomas A. Bevilacqua:

. on January 1, 1998, 19,518 shares of our common stock for an aggregate
purchase price of $700 and

. on August 20, 1998, 38,049 shares of our common stock for an aggregate
purchase price of $5,118.

Mr. Bevilacqua, who was one of our directors until his resignation in December
1999, is a former partner in the 1996 Plan priorlaw firm of Brobeck, Phleger & Harrison LLP,
which firm we have retained from time to time for legal services. The 38,049
shares originally were subject to Mr. Keller's right of repurchase which lapses
monthly in a series of equal monthly installments upon Mr. Bevilacqua's
completion of each month of service on our board until May 2000. In addition,
Mr. Keller has a right of first refusal exercisable in connection with any
proposed transfer of such shares for which the repurchase right has lapsed.

As of August 20, 1998, Mr. Keller sold 55,760 shares of our common stock to
Mr. Bradlee, one of our former executive officers, for an aggregate purchase
price of $7,500 evidenced by a full-recourse note secured by the shares
purchased. The note bore interest at the rate of 5.41% per annum, compounded
semi-annually. The 55,760 shares originally were subject to Mr. Keller's right
of repurchase which began to lapse November 20, 1998 in a series of 45
successive, equal monthly installments upon Mr. Bradlee's completion of each
month of service with us. In addition, Mr. Keller had a right of first refusal
exercisable in connection with any proposed transfer of such shares for which
the repurchase right has lapsed. Upon the end of

Mr. Bradlee's employment with us in May 1999, Mr. Keller repurchased 48,324 of
such shares paid for by forgiving $6,500 of the note.

As of August 20, 1998, Mr. Keller sold 13,940 shares of our common stock to
Mr. Klein, one of our directors, for an aggregate purchase price of $1,875. The
13,940 shares are subject to Mr. Keller's right of repurchase which began to
lapse November 20, 1998 in a series of 21 successive, equal monthly installments
upon Mr. Klein's completion of each month of consulting services to us. In
addition, Mr. Keller has a right of first refusal exercisable in connection with
any proposed transfer of such shares for which the repurchase right has lapsed.

As of August 20, 1998, Eric Kim, then one of our directors, and Messrs.
Dilworth and Klein, each one of our directors, were each issued 41,820 shares of
our common stock under our stock option plan at a purchase price of $0.135 per
share. Such shares are subject to our right of repurchase which began to lapse
November 20, 1998 in a series of 45 successive, equal monthly installments upon
completion of each month of service on our board until May 2000. On September
30, 1999, Mr. Kim resigned as a director and we purchased 30,668 shares of our
common stock from Mr. Kim for $4,294.

In March 1998, Spencer Trask Investors, an affiliate of Spencer Trask,
purchased 278,800 shares of our common stock from us for an aggregate purchase
price of $25,000. Concurrently with such transaction, Spencer Trask Investors
loaned us $475,000 evidenced by a convertible promissory note, bearing interest
at a rate of 10% per annum. The convertible promissory note was redeemed by us
on January 27, 1999.

In March 1998, Spencer Trask Investors, entered into a sale arrangement
with Mr. Keller and Ms. Ford, our Executive Vice President, Marketing and Sales,
with respect to the consummationsale of an aggregate of 1,951,600 shares of our common stock
for aggregate consideration of $3,500,000, comprised of $200,000 cash, a non-
recourse promissory note in the principal amount of $800,000 which became due on
January 20, 1999, a non-recourse promissory note in the principal amount of
$1,000,000 which became due on July 20, 1999, and a non-recourse promissory note
in the principal amount of $1,500,000 which becomes due on January 20, 2000.
Each of the foregoing notes bears interest at the rate of 6% per annum, payable
quarterly, and each note is secured by a pledge of the shares purchased, with
one share pledged for each $1.79 of principal amount. The shares of our common
stock pledged with respect to each note were placed in escrow until payment in
full of the principal and accrued interest of the note representing the purchase
price of such shares. The $800,000 note was paid by Spencer Trask Investors and
the 446,080 shares pledged with respect to such note were released from escrow
on January 20, 1999. The $1,000,000 note was paid by Spencer Trask Investors and
the 557,600 shares pledged with respect to such note were released from escrow
on July 20, 1999. In the event that a note is not paid, the shares securing it
will be released to Mr. Keller and Ms. Ford, who also maintain voting control
over such pledged shares unless and until the related notes are fully paid and
the shares are released to Spencer Trask Investors.

In connection with the issuance and sale by us of an aggregate of
2,878,815 shares of our common stock for an aggregate purchase price of
$5,162,868 in three separate closings, the final such closing occurring January
27, 1999, in connection with and pursuant to the terms of a Business Combination.

CONFLICTS OF INTEREST

Noneprivate placement
memorandum and related agreements (the "private placement"), we entered into a
placement agency agreement, dated September 2, 1998, with Spencer Trask.
Pursuant to the placement agency agreement, Spencer Trask received a fee equal
to 10% of the Company's officersaggregate offering price for our common stock sold in the private
placement. In addition, we issued to Spencer Trask the Spencer Trask Warrants.
See "Description of Securities-Spencer Trask Warrants and Similar Warrants."
Spencer Trask, together with its affiliates, holds an aggregate of 1,686,461
shares of our common stock and warrants to purchase 880,427 shares of our common
stock.

Mr. Bevilacqua, together with his wife, Therese Mrozek, currently a partner
in the law firm of Brobeck, Phleger & Harrison LLP, purchased 2,788 shares of
our common stock in the private placement for an aggregate purchase price of
$5,000 and Brobeck, Phleger & Harrison LLP purchased 27,880 shares for an
aggregate purchase price of $50,000.

Spencer Trask Investors and Mr. Keller, upon the commencement of the
private placement, loaned $200,000 and $100,000, respectively, to us pursuant to
convertible promissory notes which bore interest at 8% per annum and matured at
the earlier of the first closing of the private placement or 12 months from the
date of the notes. Spencer Trask converted the $200,000 note into 111,520 shares
of our common stock on December 31, 1998 and we paid the $100,000 note held by
Mr. Keller on that same date. In addition, Spencer Trask Investors was issued,
upon the commencement of the private placement, a warrant to purchase 55,760
shares of our common stock at $1.79 per share, and Mr. Keller was issued a
warrant to purchase 27,880 shares of our common stock at $1.79 per share. See
"Description of Securities - Spencer Trask Warrants and Similar Warrants."

On December 31, 1998, in consideration of tangible and intangible assets,
we sold to Corel Corporation 2,167,114 shares of our common stock and a warrant
to purchase up to 216,711 shares of our common stock. We also granted Corel the
right to appoint a nominee to our board and registration. See "Management of
Directors" and "Description of Securities-Corel Warrant and Similar Warrant."

In consideration of consulting services performed in connection with the
merger between us and GraphOn-CA, we issued to Spencer Trask Class A redeemable
common stock purchase warrants to purchase an aggregate of up to 250,000 shares
of our common stock at an exercise price of $5.50 per share, and pay Spencer
Trask up to $575,000.

In June 1996, we issued an aggregate of 625,000 shares of our common stock
at a price of $.0001 per share, as follows: 150,000 shares to Lawrence Burstein,
one of our directors, are required25,000

shares to commit their
full timeUnity VCA, an affiliate of Mr. Burstein, 136,500 shares to the affairsthree
other then directors of GraphOn and their affiliates, and 313,500 shares to
various other persons.

In June 1996, we issued 58,334 and 141,666 Class A and a like number of
Class B warrants to Mr. Burstein and the Company and, accordingly,three other then directors of GraphOn
in consideration for future services to be rendered by such persons may have
conflictson behalf of
interestus. Such warrants are identical to our Class A and Class B redeemable warrants
offered and sold in allocating management time among various business
activities. Certainour initial public offering but are not redeemable by us.

We paid Unity VCA between June 1996 and July 1999 a monthly fee of these persons may$7,500
for general and administrative services. Such fee included the use of
approximately 500 square feet of office space in premises occupied by Unity VCA.
Dalessio Miliner & Leben ("DML"), an accounting firm which is an affiliate of a
then director of us, affords Unity VCA the future become affiliated with
entities, includinguse of such space at a monthly rental
of $2,000. Mr. Burstein and two other "blank check" companies, engaged in business
activities similar to those intended to be conducted by the Company. Messrs.
Burstein, Leben and Cattierthen directors of GraphOn are each
directors and together with Mr. Ridings,
shareholdersstockholders of Unity which is engaged principally in making investments in
privately held companies. Mr. Burstein and eachVCA. The agreement with Unity VCA has been
terminated.

Unity VCA had made non-interest demand loans aggregating approximately
$50,000 to us as of the other directors of the
Company also serve as directors of various private companies and are engaged in
various other business activities. In the course of

their other business activities, certain of the Company's officers and directors
may become aware of investment and business opportunities which may be
appropriate for presentationNovember 12, 1996 to the Company as well as the other entities with
which they are affiliated. Such persons may have conflicts of interest in
determining to which entity a particular business opportunity should be
presented. In order to reduce potential conflicts of interest, the Company's
officers and directors have agreed that they will offer all suitable prospective
Target Businesses to the Company before any other company until the earlier of a
Business Combination or the liquidation of the Company. In general, officers
and directors of a corporation incorporated under the laws of the State of
Delaware are required to present certain business opportunities to such
corporation. Under Delaware law, officers and directors generally are required
to bring business opportunities to the attention of such corporation if: such
corporation could financially undertake the opportunity; the opportunity is
within the corporation's line of business; and it would not be fair to the
corporation and its stockholders for the opportunity not to be brought to the
attention of such corporation. Accordingly, as a result of multiple business
affiliations, certain of the Company's officers and directors may have similar
legal obligations relating to presenting certain business opportunities to
multiple entities. In addition, conflicts of interest may arisecover expenses incurred by us in
connection with evaluations of a particular business opportunity by the Board of Directors
with respect to the foregoing criteria. There can be no assurance that anyour initial public offering. We repaid these loans out of the
foregoing conflicts will be resolved in favorproceeds of the Company. See "Proposed
Business - 'Blank Check' Offering - Selection of a Target Business and
Structuring of a Business Combination."

In order to minimize potential conflicts of interest which may arise from
multiple corporate affiliations, each of Messrs. Burstein, Leben and Cattier
have agreed in principle to present to the Company for its consideration, prior
to presentation to any other entity, any business opportunity which, under
Delaware law, may reasonably be required to be presented to the Company.

To further minimize potential conflicts of interest, the Company is
restricted from pursuing any transactions with entities affiliated with an
officer or director of the Company without the prior approval of a majority of
its disinterested directors.

In connection with any stockholder vote relating to approval of a Business
Combination, all of the Initial Stockholders, including all of the officers and
directors of the Company, have agreed to vote their respective shares of Common
Stock in accordance with the vote of the majority in interest of the Public
Stockholders. In addition, the Initial Stockholders have agreed to waive their
respective rights to participate in any liquidation distribution but only with
respect to those shares of Common Stock acquired by such persons prior to thisour initial public offering.

4658

PRINCIPAL STOCKHOLDERS

The following table sets forth information known to us as of July 31, 1996 and as
adjusted to reflect the sale of the shares of Common Stock included in the Units
offered hereby,December 3,
1999, based on information obtained from the persons named below, with respect
to the beneficial ownership of shares of Common Stockour common stock held by

(i). each person known by the Companyus to be the owner of 5% or more than 5% of the
outstanding shares of Common Stock, (ii)our common stock;

. each director of the Companyour directors; and

(iii). all officers and
directors of the Company as a group:

AMOUNT AND PERCENTAGE OF
NATURE OF OUTSTANDING SHARES
------------------------
BENEFICIAL BEFORE AFTER
OWNERSHIP(1)(2) OFFERING OFFERING
--------------- -------- --------

Lawrence Burstein 175,000(3) 28.0% 9.33%
245 Fifth Avenue
New York, NY 10016

John Cattier 140,500(3)(4) 22.48% 7.49%
Achlain Invermoriston
Invernesshire
IV3 6YN, United Kingdom

Barry Ridings 6,000 0.01% - %
16 Erwin Park
Montclair, NJ 07902

Norman Leben 40,000(3) 6.40% 2.13%
245 Fifth Avenue
New York, NY 10016

Allour executive officers and directors as a group (4 persons) 311,500(3)(4) 49.84% 16.61%

- ----------
(1)group.

Unless otherwise noted,indicated, the Company believes thataddress for each stockholder is c/o GraphOn
Corporation, 150 Harrison Avenue, Campbell, CA 95008.

Number of Shares
Beneficially Owned (1) Percent of Class
------------------------- -----------------

Corel Corporation (2)................................ 2,383,825 20.76%
1600 Carling Avenue
Ottawa, Ontario
K1Z 8R7, Canada
Spencer Trask Holdings, Inc. (3)...................... 1,686,461 19.48%
535 Madison Avenue
New York, NY 10022
Walter Keller (4) ................................... 1,005,582 9.15%
Robert Dilworth .................................... 41,820 *
August P. Klein .................................... 55,760 *
Michael O'Reilly (2) ................................ 2,383,825 20.76%
Robin Ford (5) ...................................... 641,240 5.69%
Vince Pfeifer (6) ................................... 19,143 *
Edmund Becmer (7) ................................... 9,293 *
Eric Lefebvre(8) ................................... 3,666 *
Lawrence Burstein(9)................................. 291,668 2.56%
Marshall C. Phelps, Jr...............................
All executive officers and directors as a group 4,479,877 38.47%
(10 persons) (10)..................................

___________
* Denotes less than 1% of our outstanding common stock

(1) As used in this prospectus, beneficial ownership means the sole or shared
power to vote, or direct the voting of, a security, or the sole or shared
power to invest or dispose, or direct the investment or disposition, of a
security. Except as otherwise indicated, all persons named in this
prospectus have sole voting power and investment power with respect to
their respective shares of our common stock, except to the table haveextent that
authority is shared by spouses under applicable law, and record and
beneficial ownership with respect to their respective shares of our common
stock. With respect to each stockholder, any shares issuable upon exercise
of all options and warrants held by such stockholder that are currently
exercisable or will become exercisable within 60 days of December 3, 1999
are deemed outstanding for computing the percentage of the person holding
such options but are not deemed outstanding for computing the percentage of
any other person. Percentage ownership of our common stock is based on
11,266,302 shares of our common stock outstanding as of December 3, 1999.

(2) Includes 2,167,114 shares of common stock and a warrant exercisable for up
to 216,711 shares of our common stock at an exercise price of $1.79 per
share held by Corel. Mr. O'Reilly is the Executive Vice President, Finance,
Chief Financial Officer and Treasurer of Corel and a director of us.
However, Mr O'Reilly disclaims beneficial ownership of all of these shares.

(3) Includes 94,792 shares held by Spencer Trask, 717,631 shares held by Kevin
Kimberlin Partners, L.P. ("KKP"), an affiliate of Spencer Trask Holdings,
Inc., the 100% owner of Spencer Trask, 37,638 shares and warrants
exercisable for up to an aggregate of 66,900 shares of our common stock at
an exercise price of $1.79 per share held by William P. Dioguardi, the
President of the Spencer Trask, three warrants exercisable for up to an
aggregate of 58,971 shares of our common stock at an exercise price of
$1.79 per share held by KKP, a warrant exercisable for up to an aggregate
of 12,261 shares of our common stock at an exercise price of $1.79 per
share held by Kevin Kimberlin, a general partner of KKP and a majority
holder of Spencer Trask Holdings, four warrants exercisable for up to an
aggregate of 242,293 shares of our common stock at an exercise price of
$1.79 per share held by Spencer Trask Holdings and 250,000 warrants
exercisable for up to an aggregate of 250,000 shares of our common stock at
an exercise price of $5.50 held by Spencer Trask. Excludes 324,667 shares
of our common stock issuable upon exercise of the Spencer Trask Warrants in
which Spencer Trask has no beneficial interest. See "Description of
Securities-Spencer Trask Warrants and Similar Warrants."

(4) Includes 418,200 shares of our common stock placed in escrow with Brobeck,
Phleger & Harrison LLP ("BPH"), as escrow agent, to be sold to Spencer
Trask Investors on January 20, 2000. During the escrow period, Mr. Keller
cannot sell or otherwise transfer such shares but retains all other
stockholder rights, including, without limitation, the right to vote such
shares. Also includes a warrant exercisable for up to 27,880 shares of our

common stock at an exercise price of $1.79 per share and 22,304 shares of
our common stock held by relatives of Mr. Keller who, at the option of
Spencer Trask, can be required to enter into a voting agreement granting
Mr. Keller the right to vote such shares. Mr. Keller and Ms. Ford are
husband and wife. See footnote 5 below.

(5) Includes 418,200 shares of our common stock placed in escrow with BPH, as
escrow agent, to be sold to Spencer Trask Investors on January 20, 2000.
During the escrow period, Ms. Ford cannot sell or otherwise transfer such
shares but retains all other stockholder rights, including, without
limitation, the right to vote such shares. Also includes 16,728 shares
held by relatives of Ms. Ford who, at the option of Spencer Trask, can be
required to enter into a voting agreement granting Ms. Ford the right to
vote such shares. Mr. Keller and Ms. Ford are husband and wife. See
footnote 4 above.

(6) Includes options exercisable for up to 5,203 shares of our common stock at
an exercise price of $1.52 per share.

(7) Includes options exercisable for up to 9,293 shares of our common stock at
an exercise price of $1.52 per share.

(8) Includes options exercisable for up to 3,666 shares of our common stock at
an exercise price of $1.52 per share.

(9) Includes 25,000 shares of our common stock owned by Unity VCA, over which
shares Mr. Burstein shares voting and investment power. Also includes
58,334 shares issuable upon exercise of Class A warrants and 58,334 shares
issuable upon exercise of Class B warrants.

(10) See footnotes 3 through 7 above. Includes warrants held by Mr. Keller and
Corel exercisable for up to 244,591 shares of our common stock at an
exercise price of $1.79 per share and options exercisable for up to 18,162
shares of our common stock held by three of our officers.

SELLING STOCKHOLDER

The registration statement, of which this prospectus forms a part, relates
to our registration, for the account of the selling stockholder, of an aggregate
of 300,000 shares of our common stock underlying warrants issued to the selling
stockholder in October 1999. These shares are being registered pursuant to
registration rights granted by us to the selling stockholder in connection with
its acquisition of these warrants.

We believe, based on information supplied by the selling stockholder, that
except as noted, it has sole voting and investment power with respect to all
shares of Common Stockcommon stock which it beneficially ownedowns. The last column in this table
assumes the sale of all of our shares offered by them.

(2) Does not include shares issuable upon exercisethis prospectus.

Number of Number of
Shares Shares
Beneficially Offered by Number of Shares Beneficially
Owned Prior Selling Owned After Offering
----------------------------
Name of Selling Stockholder to Offering Stockholder Number Percent
- ------------------------------ -------------- -------------- ------------ ----------

Super Tech Holdings Limited..... 300,000 300,000 -- --%

The sale of the Directors' Warrantsselling stockholder's shares may be effected from time to
time in transactions, which are beneficially ownedmay include block transactions by eachor for the account
of the persons namedselling stockholder, in the above
table butover-the-counter market or in negotiated
transactions, or through the writing of options on the selling stockholder's
shares, a combination of these methods of sale, or otherwise. Sales may be made
at fixed prices which are not exercisable untilmay be changed, at market prices prevailing at the consummationtime of
sale, or at negotiated prices.

The selling stockholder may effect the transactions by selling its shares
directly to purchasers, through broker-dealers acting as agents for the selling
stockholder, or to broker-dealers who may purchase shares as principals and
thereafter sell the selling stockholders's shares from time to time in the over-
the-counter market, in negotiated transactions, or otherwise. In effecting
sales, brokers and dealers engaged by the selling stockholder may arrange for
other broker-dealers to participate in the resales. The selling stockholder may
enter into hedging transactions with broker-dealers, and in connection with
these transactions, broker-dealers may engage in short sales of the shares. The
selling stockholder may also sell shares short and deliver these shares to close
out their short positions. Selling stockholder may also enter into option or
other transactions with broker-dealers that involve the delivery of these shares
to the broker-dealers, who may then resell or otherwise transfer such shares.
The selling stockholder may also pledge these shares to a Business
Combination.

(3) Includes 25,000 shares of Common Stock owned by Unity, over which shares
Messrs. Burstein, Leben and Cattier share voting and investment power.

(4) Includes (i) 75,000 shares held by Heptagon and (ii) 1,500 shares held by
an affiliate of Heptagon. Mr. Cattier is Chairman of Heptagon's board of
directors and exercises voting and dispositive control over approximately
4.5% of Heptagon's shares of capital stock. Mr. Cattier disclaims any
votingbroker-dealer who,
upon a default, may sell or dispositive power overotherwise transfer these shares.

Also includes 39,000
shares owned by Cricket Services, Ltd. ("Cricket"), over62

These broker-dealers, if any, may receive compensation in the form of
discounts, concessions or commissions from the selling stockholder and/or the
purchaser for whom such broker-dealers may act as agents or to whom they may
sell as principals or both, which shares Mr.
Cattier exercises votingcompensation as to a particular broker-dealer
may be in excess of customary commissions.

The selling stockholder and dispositive control.

The shares of the Company's Common Stock owned as of the date hereof by all
of the officers and directors of the Company and by all persons owning more than
5% of the currently outstanding shares

of Common Stock will be placedbroker-dealers, if any, acting in escrowconnection
with American Stock Transfer & Trust
Company, as escrow agent, until the earlier of (i) six months following the
consummation of a Business Combination or (ii) the liquidation of the Company.
During such escrow period, such persons will not be able to sell their
respective shares of Common Stock, but will retain all other rights as
stockholders of the Company, including, without limitation, the right to vote
such shares of Common Stock.

Messrs. Burstein, Leben and Cattier, as well as Unity, maythese sales might be deemed to be "parents" and "promoters""underwriters" within the meaning of
section 2(11) of the Company, as such terms are definedSecurities Act of 1933. Any commission they receive and any
profit upon the resale of the securities might be deemed to be underwriting
discounts and commissions under the Federal securities laws.

CERTAIN TRANSACTIONS

In June 1996,Securities Act.

We have advised the Company issued an aggregateselling stockholder that during such time as it may be
engaged in a distribution of 625,000 sharesthe common stock covered by this prospectus it will
be required to comply with Regulation M promulgated under the Securities
Exchange Act of Common Stock at a1934. With certain exceptions, Regulation M precludes any
selling stockholder, any affiliated purchasers, and any broker-dealer or other
person who participates in such distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase any security which is the
subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases made in order to stabilize the
price of $.0001 per share, as follows: 25,000
shares to Unity; 150,000 shares to Mr. Burstein; 15,000 shares to Mr. Leben;
an aggregate of 76,500 shares to Heptagon and its affiliate; 39,000 shares to
Cricket; 6,000 shares to Barry Ridings; and 313,500 shares to 24 other
persons.

In June 1996, the Company issued 58,334, 58,333, 58,333 and 25,000 Class A
and Class B Warrants to each of, respectively, Messrs. Burstein, Leben, Cattier
and Ridings ("collectively, the "Directors' Warrants"), in consideration for
future services to be rendered by such persons on behalf of the Company. The
Directors' Warrants and the Common Stock underlying such warrants have been
registered pursuant to the Registration Statement of which this Prospectus forms
a part. The Directors' Warrants are identical to the Warrants offered hereby
but are not redeemable by the Company and may not be transferred or exercised
until the consummation of a Business Combination.

The Company has been obligated to pay Unity, since June 1, 1996, a monthly
fee of $7,500 for general and administrative services pursuant to an agreement
which may be canceled by either party upon 30 days' prior written notice. Such
fee includes the use of approximately 500 square feet of office space in
premises occupied by Unity. An accounting firm which is an affiliate of Mr.
Leben affords Unity the use of such space at a monthly rental of $2,000.
Messrs. Burstein, Leben and Cattier are each directors and shareholders of
Unity.

Unity has made non-interest demand loans aggregating approximately $50,000
to the Company as of the date of this Prospectus to cover expenses related to
this offering. The Company intends to repay these loans, as well as those
accrued general and administrative expenses owed to Unity discussed above, out
of the proceeds of this offering not held in the Trust Fund.

DML has performed bookkeeping, tax and accounting services for certain of
the "blank check" companies of which Messrs. Burstein, Cattier and Ridings, have
been directors and shareholders from their dates of inceptions through the
consummation of their respective Business Combinations and is expected to
perform similar services for the Company at an aggregate cost of approximately
$12,000 per annum. DML may also be paid to engage in financial "due diligence"
activities for the Company in connection with its evaluation of prospective
Target Companies for a Business Combination.

Other than the $7,500 monthly administrative fee, no compensation of any
kind (including finders and consulting fees) will be paid to any Initial
Stockholder, or any affiliate thereof for services rendered to the Company
prior to orsecurity in connection with the Business Combination; provided, however,distribution of that such persons shall be entitled to receive, upon consummationsecurity. All of
the Business Combination, commissionsforegoing may affect the marketability of our common stock.

Sales of any shares of our common stock by the selling stockholder may
depress the market price of our common stock.

Any securities covered by this prospectus that qualify for monies raised by them forsale pursuant to
SEC Rule 144 under the Company
in connection withSecurities Act may be sold under that Rule rather than
pursuant to this prospectus.

There can be no assurance that the Business Combination, at rates that are no less
favorable to the Company than those which the Company would pay to
unaffiliated third parties.

All ongoing transactions between the Company andselling stockholder will sell any or all
of the Affiliated
Initial Stockholders or their respective affiliates, as well as any future
transactions, will be on terms believedshares of common stock covered by the Company to be no less favorable
than are available from unaffiliated third parties and will be subject to prior
approval in each instance by a majority of the members of the Company's Board of
Directors who do not have an interest in the transaction.this prospectus.

DESCRIPTION OF SECURITIES

GENERAL

The Company isGeneral

We are authorized to issue 20,000,00045,000,000 shares of Common Stock,common stock, par value
$.0001 per share, and 5,0005,000,000 shares of Preferred Stock,"blank check" preferred stock, par
value $.01 per share. As of the date of this Prospectus, 625,000December 3, 1999, 11,266,302 shares of Common Stock areour common
stock were outstanding, held of record by 31257 persons. No shares of Preferred Stockour
preferred stock currently are currently outstanding.

UNITS

Each Unit consists of one share of

Common Stock one Class A Warrant and
one Class B Warrant, each Warrant entitling the holder to purchase one share
of Common Stock. The Common Stock and Warrants will become separable and
transferable upon consummation of a Business Combination.

COMMON STOCK

The holders of Common Stockour common stock are entitled to one vote for each share
held of record on all matters to be voted on by stockholders. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of more than 50% of the shares voted for the election of
directors can elect all of the directors. The holders of Common Stockour common stock are
entitled to receive dividends when, as and if declared by the Boardour board of Directorsdirectors
out of funds legally available therefore.therefor. In the event of our liquidation,

dissolution or winding up, of the Company, the holders of Common Stock (except
for the Affiliated Initial Stockholders who have agreed to waive their rights
and the Non-Affiliated Initial Stockholders who have agreed to waive certain of
their rights to share in any distribution relating to a liquidation of the
Company due to the failure of the Company to effect a Business Combination
within 18 or 24 months, as the case may be, from the date of consummation of
this offering)our common stock are entitled to share
ratably in all assets remaining available for distribution to them after payment
of liabilities and after provision has been made for each class of stock, if
any, having preference over the Common
Stock.our common stock. Holders of shares of Common Stock,our common stock, as
such, have no conversion, redemption, preemptive or other subscription rights, and, except as noted below, there are
no redemption provisions applicable to the Common Stock.rights.
All of the outstanding shares of Common Stockour common stock are and the shares of Common Stock included in the
Units, when issued and paid for as set forth in this Prospectus, will be, fully paid and
nonassessable.

PREFERRED STOCK

The Company's CertificatePreferred Stock

Our certificate of Incorporationincorporation authorizes the issuance of 5,0005,000,000
shares of a "blank check" preferred stock (the "Preferred Stock") with such designation, rights and preferences as may
be determined from time to time by the Boardour board of Directors.directors. Accordingly, the Board of Directorsour
board is empowered, without stockholder approval, to issue Preferred Stockpreferred stock with
dividend, liquidation, conversion, voting or other rights which could adversely
affect the voting power or other rights of the holders of the Company's Common Stock,
although the Underwriting Agreement prohibits the Company, prior to a Business
Combination, from issuing Preferred Stock which participates in any manner in
the proceeds of the Trust Fund, or which votes as a class with the Common Stock
on a Business Combination. The Company may issue some or all of such shares in
connection with a Business Combination. In addition, the Preferred Stockour common stock. Our
preferred stock could be utilized under certain circumstances, as a method of discouraging, delaying or
preventing a change in control of us subsequent to the Company.effective time. Although
the Company doeswe do not currently intend to issue any shares of Preferred Stock,preferred stock, there can be
no assurance that the Companywe will not do so in the future.

WARRANTSDividends

We do not presently intend to pay any cash dividends as all available cash
will be utilized to further the growth of our business for the proximate future
thereafter. The payment of any cash dividends will be in the discretion of our
board and will be dependent upon our results of operations, financial condition,
contractual restrictions and other factors deemed relevant by our board.

Transfer Agent

The transfer agent for the our common stock is American Stock Transfer &
Trust Company, 40 Wall Street, New York, New York 10005.

IPO Warrants

As of December 3, 1999, there were 1,056,949 Class A redeemable warrants
and 1,249,799 Class B redeemable warrants (collectively, the "IPO warrants")
outstanding, held of record by 6 and 7 persons.

Each Class A Warrantredeemable warrant entitles the registered holder to purchase
one share of Common Stock of the Companyour common stock at a price of $5.50 per share, subject to
adjustment, in certain circumstances, at any timefor a period of five years commencing on the later of (i)
the consummation of a Business Combination or (ii) one year from the date of
this Prospectus and ending at 5:00 p.m., New York City time, on , 2002, at
which time the Class A Warrants will expire.July 12, 1999. Each Class B
Warrantredeemable warrant entitles the registered holder to purchase one share of 50

the Company's Common Stockour
common stock at a price of $7.50 per share, subject to adjustment, in certain circumstances, at any timefor a period
of five years commencing on the later of (i) the
consummation of a Business Combination or (ii) one year from the date of this
Prospectus and ending at 5:00 p.m., New York City time, on , 2002, at
which time the Class B Warrants will expire.

The CompanyJuly 12, 1999.

We may call the Class A Warrantsredeemable warrants and the Class B Warrantsredeemable
warrants for redemption, each as a class, in whole and not in part, at theour
option, of the
Company and with the consent of the Underwriter, at a price of $.05 per WarrantIPO warrant at any time after the Warrants become exercisable upon not less than 30
days' prior written notice, provided that the reported closinghigh bid price of the
Common Stockour
common stock equals or exceeds $8.50 per share with respect to the Class A
Warrants,warrants, and $10.50 per share with respect to the Class B Warrants,warrants, for the 20
consecutive trading days ending on the third dayimmediately prior to the notice of redemption to
warrantholders. The warrantholders shall have exercise rights until the close of
business on the date fixed for redemption. On December 21, 1999, we called the
warrants for redemption as the price of our common stock had satisfied the
redemption criteria. We fixed January 24, 2000 as the redemption date.

The Warrants will beIPO warrants are issued in registered form under a Warrant Agreementwarrant agreement
between the Companyus and American Stock Transfer & Trust Company, as Warrant
Agent. Reference is made to said Warrant Agreement (which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part) for a
complete description of the terms and conditions applicable to the Warrants
(the description herein contained being qualified in its entirety by reference
to such Warrant Agreement).warrant agent.

The exercise price and number of shares of Common Stockour common stock issuable on
exercise of the WarrantsIPO warrants are subject to adjustment, in certain circumstances including in the event
of a stock dividend, recapitalization, reorganization, merger or consolidation
of the Company.us. However, the WarrantsIPO warrants are not subject to adjustment for issuances of
Common Stockour common stock at a price below their respective exercise prices.

The Company hasWe have the right, in itsour sole discretion, to decrease the exercise price
of the WarrantsIPO warrants for a period of not less than 30 days on not less than 30
days' prior written notice to the warrantholders. In addition, the Company haswe have the
right, in itsour sole discretion, to extend the expiration date of the WarrantsIPO warrants
on five business days' prior written notice to the warrantholders.

The WarrantsIPO warrants may be exercised upon surrender of the Warrant Certificatewarrant certificate
on or prior to the expiration date at the offices of the Warrant Agent,warrant agent, with the
exercise form on the reverse side of the Warrant Certificatewarrant certificate completed and
executed as indicated, accompanied by full paymentspayment

of the exercise price (byto the warrant agent for the number of IPO warrants being
exercised. Payment of the exercise price is by certified check, payable to the Company) to the Warrant Agent for the number of
Warrants being exercised.us.
The warrantholders do not have the rights or privileges of holders of Common Stock.

our common
stock.

No WarrantsIPO warrants will be exercisable unless at the time of exercise the Company
haswe have
filed with the CommissionSEC a current prospectus covering the shares of Common
Stockour common stock
issuable upon exercise of such WarrantsIPO warrants and such shares have been registered or
qualified or deemed to be exempt under the securities laws of the state of
residence of the holder of such Warrants. The CompanyIPO warrants. We will use itsour best efforts to
have all shares so registered or qualified on or before the exercise date and to
maintain a current prospectus relating thereto until the expiration of the Warrants,IPO
warrants, subject to the terms of the Warrant Agreement.warrant agreement. While it is the Company'sour
intention to do so, there is no assurance that itwe will be able to do so. See "Risk Factors - Risks Relating to the Offering -Current
Prospectus and State Blue Sky Registration Required in Connection with Exercise
of Warrants."

No fractional shares will be issued upon exercise of the Warrants.IPO warrants.
However, if a warrantholder exercises all WarrantsIPO warrants then owned of record by
him, the Companywe will pay to such warrantholder, in lieu of the issuance of any
fractional share which otherwise is otherwise issuable to such warrantholder, an amount in
cash based on the market value of the Common Stockour common stock on the last trading day prior
to the exercise date.

DIVIDENDSUpon consummation of our merger with GraphOn-CA, we issued to Spencer Trask
250,000 Class A redeemable common stock purchase warrants exercisable for an
aggregate of up to 250,000 shares of our common stock at an exercise price of
$5.50 per share. The Company hasterms of the warrants are substantially the same as the
terms of the Class A redeemable warrants described above, except that the
warrants will not paid any dividends on its Common Stock to date and does
not intend to pay dividendsbe redeemable until the reported high bid price of our common
stock equals or exceeds $15.00 per share for the 20 consecutive trading days
immediately prior to the consummationnotice of a Business Combination.
The payment of dividends in the future, if any, will be contingent upon the
Company's revenues and earnings, if any, capital requirements and general
financial condition subsequent to consummation of a Business Combination. The
payment of any dividends subsequent to a Business Combination will be within the
discretion of the Company's then Board of Directors. It is the present intention
of the Board of Directors to retain all earnings, if any, for use in the
Company's business operations and, accordingly, the Board does not anticipate
declaring any dividends in the foreseeable future.

TRANSFER AGENT

The transfer agent for the Company's securities is American Stock Transfer
& Trust Company, 40 Wall Street, New York, New York 10005.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the consummation of this offering, the Company will have 1,875,000
shares of Common Stock outstanding (2,062,500 shares if the Underwriter's
over-allotment option is exercised in full). Of

these shares, the 1,250,000 shares sold in this offering (1,437,500 shares in
the event of the exercise of the over-allotment option) will be freely tradeable
without restriction or further registration under the Securities Act, except for
any shares purchased by an "affiliate" of the Company (in general, a person who
has a control relationship with the Company) which will be subject to
limitations of Rule 144. All of the remaining 625,000 shares are deemed to be
"restricted securities", as that term is defined under Rule 144, in that such
shares were issued in private transactions not involving a public offering. None
of such shares will be eligible for sale under Rule 144 prior to May 30, 1998.
Notwithstanding this, the Affiliated Initial Stockholders have agreed not to
sell their respective shares of Common Stock prior to six months following the
consummation of a Business Combination and the Non-Affiliated Initial
Stockholders have agreed not to sell their respective shares of Common Stock,
which were acquired priorredemption to the date of this Prospectus, priorwarrantholders.

Underwriters' IPO Securities

In connection with our initial public offering, we sold to the
occurrence of a Business Combination.

In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company (or persons whose shares are aggregated), who has owned restricted
shares of Common Stock beneficially for at least two years is entitled to sell,
within any three-month period, a number of shares that does not exceed the
greater of 1% of the total number of outstanding shares of the same class or, if
the Common Stock is quoted on The Nasdaq Stock Market, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has not been an affiliate of the Company for at least the three months
immediately preceding the sale and who has beneficially owned shares of Common
Stock for at least three years is entitled to sell such shares under Rule 144
without regard to any of the limitations described above.

An additional 200,000 shares of Common Stock, which have been registered
pursuant to the Registration Statement of which this Prospectus forms a part,
are issuable upon the exercise of the Directors' Warrants issued to Messrs.
Burstein, Leben, Cattier and Ridings. The Directors' Warrants are identical to
the Warrants offered hereby but are not redeemable by the Company and may not
be exercised until the consummation of a Business Combination.

Prior to this offering, there has been no market for the Common Stock and
no prediction can be made as to the effect, if any, that market sales of
restricted shares of Common Stock or the availability of such shares for sale
will have on the market prices prevailing from time to time. Nevertheless, the
possibility that substantial amounts of Common Stock may be sold in the public
market may adversely affect prevailing market prices for the Common Stock and
could impair the Company's ability to raise capital through the sale of its
equity securities.

STATE BLUE SKY INFORMATION

The Units will only be offered and sold by the Company in the States of
Delaware, District of Columbia, Florida, Hawaii, Illinois, Maryland, New York
and West Virginia (the "Primary Distribution States"). In addition, such
securities will be immediately eligible for resale in the secondary market in
each of the Primary Distribution States and in the States of Iowa and
Pennsylvania. Purchasers of such securities either in this offering or in any
subsequent trading market which may develop must be residents of such states.
The Company will amend this prospectus for the purpose of disclosing additional
states, if any, in which the Company's securities will be eligible for resale in
the secondary trading market.

UNDERWRITING GKN Securities
Corp. has agreed, subject toand Gaines, Berland Inc., the terms and conditionsunderwriters of the
Underwriting Agreement, to purchase from the Company a total of 1,250,000 Units.
The Underwriting Agreement provides that the obligations of the Underwriter are
subject to approval of certain legal matters by counsel and various other
conditions precedent, and that the Underwriter is obligated to purchase all of
the Units offered by this Prospectus (other than the Units covered by the over-
allotment option described below), if any are purchased.

The Company has been advised by the Underwriter that it proposes to offer
the Units to the public at the initial offering price set forth on the cover
page of this Prospectus and to certain dealers at that price less a concession
not in excess of $ per Unit. The Underwriter may allow, and such dealers may
reallow, a concession not in excess of $ per Unit to certain other dealers.
After theour initial public offering,
the offering price and other selling terms
may be changed by the Underwriter.

The Company has granted to the Underwriter an option, exercisable during
the 45-day period after the date of this Prospectus, to purchase from the
Company at the offering price, less underwriting discounts and the
non-accountable expense allowance, up to an aggregate of 187,500 additional
Units for the sole purpose of covering over-allotments, if any.

The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act. The Company has
also agreed to pay to the Underwriter an expense allowance on a non-accountable
basis equal to 3% of the gross proceeds derived from the sale of the Units
underwritten ($225,000 if the Underwriter's over-allotment option is not
exercised and $258,750 if the Underwriter's over-allotment option is
exercised in full), $25,000 of which has been paid to date.

The Company has granted the Underwriter for a period of three years from
the date hereof the right to have the Underwriter's designee present at all
meetings of the Company's Board of Directors. Such designee will be entitled to
the same notices and communications sent by the Company to its directors and to
attend directors' meetings, but will not be entitled to vote thereat. The
Underwriter has not named such designee as of the date of this Prospectus.

The Company has engaged GKN, on a non-exclusive basis, as its agent for
the solicitation of the exercise of the Warrants. To the extent not
inconsistent with the guidelines of the NASD and the rules and regulations of
the Commission, the Company has agreed to pay GKN for bona fide services
rendered a commission equal to 5% of the exercise price for each Warrant
exercised more than one year after the date of this Prospectus if the
exercise was solicited by GKN. In addition to soliciting, either orally or
in writing, the exercise of the Warrants, such services may also include
disseminating information, either orally or in writing, to warrantholders
about the Company or the market for the Company's securities, and assisting
in the processing of the exercise of Warrants. No compensation will be paid
to GKN in connection with the exercise of the Warrants if the market price of
the underlying shares of Common Stock is lower than the exercise price, the
holder of the Warrants has not confirmed in writing that GKN solicited such
exercise, the Warrants are held in a discretionary account, the Warrants are
exercised in an unsolicited transaction or the arrangement to pay the
commission is not disclosed in the prospectus provided to warrantholders at
the time of exercise. In addition, unless granted an exemption by the
Commission from Rule 10b-6 under the Exchange Act, while it is soliciting
exercise of the Warrants, GKN will be prohibited from engaging in any market
making activities or solicited brokerage activities with regard to the
Company's securities unless GKN has waived its right to receive a fee for the
exercise of the Warrants.

In connection with this offering, the Company has agreed to sell to the
Underwriter, for nominal consideration, an option ("Unit Purchase Option")the right to purchase up to an aggregate of 125,000
Units. The Unitsunits (the "Underwriters' IPO Securities"). Each unit issuable upon exercise of
the Unit Purchase OptionUnderwriters' IPO Securities consists of one share of our common stock, one
Class A warrant and one Class B warrant (the Class A warrants and the Class B
warrants are collectively referred to in this prospectus as the "Warrants"). The
Warrants are identical to those offered herebythe IPO warrants described above except that the
Warrants contained therein expire five years from the date
hereof.cannot be redeemed. The Unit Purchase Option isUnderwriters' IPO Securities are exercisable
initially at $6.60 per Unitunit (the "Exercise Price") for a period of fourfive years
commencing one year from the date hereof.on November 12, 1996. The Unit
Purchase Option may not be transferred, sold, assigned or hypothecated during
the one-year period following the date of this Prospectus, except to membersUnderwriters' IPO Securities contain anti-
dilution provisions providing for adjustment of the selected dealers and officers and partnersexercise price upon the
occurrence of certain events including the issuance of shares of our common
stock or other securities convertible into or exercisable for shares of our
common stock at a price per share less

than the exercise price, or in the event of any recapitalization,
reclassification, stock dividend, stock split, stock combination or similar
transaction.

We also agreed at the time of the Underwriter orissuance of the selected dealers. The Unit Purchase Option grantsUnderwriters' IPO
Securities to use our best efforts to maintain an effective registration
statement with respect to the Underwriters' IPO Securities and the underlying
units. In addition, the Underwriters' IPO Securities grant to the holders thereof
certain demandof the
securities "piggy back" and "piggy back""demand" rights for periods of seven and five and seven years
respectively, from the date of this ProspectusNovember 12, 1996 with

respect to the registration under the Securities Act
of the securities directly and indirectly issuable upon exercise of the
Unit Purchase Option.

Prior to this offering there has been no public market for anyUnderwriters' IPO Securities.

As of December 3, 1999, 34,125 of the Company's securities. Accordingly,Underwriters' IPO Securities remained
outstanding and unexercised.

Directors' Warrants

In June 1996, we issued 58,334 and 141,666 Class A and a like number of
Class B warrants to Mr. Burstein and the three other then directors of GraphOn
in consideration for future services to be rendered by such persons on our
behalf. Such warrants are identical to our Class A and Class B redeemable
warrants offered and sold in our initial public offering but are not redeemable
by us.

Spencer Trask Warrants and Similar Warrants

We issued 575,763 warrants to Spencer Trask to purchase up to an aggregate
of 575,763 shares of our common stock in January 1999. Spencer Trask
subsequently transferred its interests in 324,667 of such warrants to
nonaffiliated parties. The exercise price of such warrants is $1.79 per share.
The Spencer Trask warrants are exercisable until January 27, 2006. The exercise
price and number of shares of our common stock issuable on exercise of the
Units offered
herebywarrants are subject to adjustment in particular circumstances, including in the
event of a stock dividend, recapitalization, subdivision or consolidation of us,
or issuance of our common stock, or options, rights or warrants to subscribe for
shares of our common stock, or securities convertible into or exchangeable for
shares of our common stock, at a price below their respective exercise prices.

The Spencer Trask warrants may be exercised upon surrender of the
certificate evidencing the respective warrant on or prior to the expiration date
at the offices of us, with the annexed exercise form completed and executed as
indicated, accompanied by full payment of the exercise price to us for the
number of warrant shares being exercised. The exercise price may be paid by
certified or official bank check, in shares of our common stock or by the "net
issuance" method. The holders of Spencer Trask warrants do not have the rights
or privileges of holders of our common stock. No fractional shares will be
issued upon exercise of such warrants. However, we will pay to such
warrantholder, in lieu of the issuance of any fractional share which otherwise

is issuable to such warrantholder, an amount in cash based on the fair market
value of our common stock as determined in good faith by our board.

Spencer Trask Investors, an affiliate of Spencer Trask, and Mr. Keller hold
warrants exercisable for up to 55,760 and 27,880 shares of our common stock, the
terms of which are substantially the Warrants weresame as those of the Spencer Trask
warrants.

Corel Warrant and Similar Warrant

Corel and one additional stockholder holding less than 1% of the
outstanding shares of our common stock hold an aggregate of two warrants to
purchase up to 216,711 and 676 shares of our common stock. The exercise price of
such warrants is $1.79 per share, and they are exercisable until December 18,
2003. The exercise price and number of shares of our common stock issuable on
exercise of such warrants are subject to adjustment in particular circumstances,
including in the event of a stock dividend, subdivision or combination of our
capital stock, reclassification, capital reorganization or change in our capital
stock, or consolidation, merger or sale of all or substantially all of our
assets. Such warrants may be exercised upon surrender of the certificates
evidencing them, with the annexed exercise form completed and executed as
indicated, accompanied by full payment of the exercise price to us for the
number of warrant shares being exercised. The exercise price may be paid by cash
or check or by the "net issuance" method. Holders of the warrants, as such, are
not entitled to the rights or privileges of holders of our common stock. No
fractional shares will be issued upon exercise of such warrants. However, we
will pay to such warrantholders, in lieu of the issuance of any fractional share
which otherwise is issuable to such warrantholders, an amount in cash based on
the fair market value of our common stock as determined in good faith by negotiation between
the Company andour
board.

Shares Eligible for Future Sale

We cannot predict the Underwriter and do not necessarily beareffect, if any, relation to
established valuation criteria. Factors considered in determiningthat future sales of shares, or the
availability of shares for future sale, will have on the market price of our
common stock. Sales of substantial amounts of common stock, or the perception
that such prices
and terms, in addition tosales could occur, may adversely affect prevailing market conditions, included the history
of and the prospectsprices for
the industry in which the Company competes, an
assessmentour common stock.

As of the Company's Management,date of this prospectus, there are 11,266,302 shares of our
common stock outstanding and 5,004,125 shares issuable upon exercise of
outstanding options and warrants. Restrictions under the prospectssecurities laws and
lock-up agreements prevent the immediate sale in the public market of 9,435,383
of such shares of common stock. However, 7,268,269 of these restricted shares
will become available for sale on January 12, 2000.

Legal Matters

The validity of the Company, its
capital structure and such other factors as were deemed relevant.

Although it is not obligated to do so, the Underwriter may introduce
the Company to potential Target Businesses or assist the Company in raising
additional capital, as needs may arise in the future. The Company is not
under any contractual obligation with the Underwriter to engage it to provide
any services for the Company after consummationshares of our common stock covered by this offering, but if it
does, it may pay the Underwriter a finder's fee or other compensation.

LEGAL MATTERS

The legality of the securities offered hereby will beprospectus
has been passed upon for the
Company by Parker Duryee RosoffCooperman Levitt Winikoff Lester & Haft A Professional Corporation,Newman, P.C., New
York, New York. Graubard Mollen & Miller, New York, New York, has actedCertain members of this firm own shares of our common stock.

Experts

Our financial statements as counselof December 31, 1998, 1997 and for the Underwriter in connection with this offering. A member of Parker Duryee
Rosoff & Haft beneficially owns 6,000 shares of the Company's Common Stock.

EXPERTS

The financial statementsyears
ended December 31, 1998, 1997 and 1996 and related schedules included in this
Prospectusprospectus have been audited by Arthur AndersenBDO Seidman, LLP, independent certified public
accountants, as indicatedto the extent and for the periods set forth in their report with respect thereto,reports
appearing elsewhere herein and in this prospectus, and are included herein in reliance
upon such reports given upon the authority of said firm as experts in accountingauditing
and auditing in giving said
report. Reference is made to said report which includes an explanatory paragraph
with regard to the Company being in its development stage, which raises
substantial doubt about its ability to continue as a going concern.

ADDITIONAL INFORMATION

The Company hasaccounting.

Available Information

We have filed with the Commission in Washington, D.C.,SEC a Registration Statement ("Registration Statement")registration statement on Form S-1, including
all amendments, exhibits, schedules and supplements thereto, under the
Securities Act with respect to the Units, the Common Stock and the Warrants offered by this
Prospectus. This Prospectus does not contain allrules and regulations thereunder for the regulations
thereunder, for the registration of the our common stock offered hereby.
Although this prospectus, which forms a part of the registration statement,
contains all material information set forthincluded in the Registration Statement, certainregistration statement, parts
of which arethe registration statement have been omitted in
accordance withas permitted by the rules and
regulations of the Commission.SEC. For further information with respectabout us and the common stock
offered in this prospectus, you should refer to the Companyregistration statement and
this offering, reference is made
toits exhibits. You may read and copy any document we file with the Registration Statement, including the exhibits filed therewith, copies
of which may be obtained at prescribed rates from theSecurities and
Exchange Commission at the public reference facilities maintained by the CommissionSEC at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the followingSEC's
regional offices: 7 World Trade Center, New York, New York 10048, andoffices at 3475 Lenox Road, N.E., Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60611.
In addition, all reports filed by the Company via the Commission's
Electronic Data Gathering and Retrieval System (EDGAR) can1000, Atlanta, Georgia 30326-
1232. Copies of such material may be obtained from the Commission'sPublic Reference Section
of the SEC at 450 Fifth Street, NW, Washington, D.C. 20549, at prescribed rates.
You can also review such material by accessing the SEC's Internet web set locatedsite at
http://www.sec.gov. Descriptions
contained in this Prospectus as toThis site contains reports, proxy and information statements
and other information regarding issuers that file electronically with the contents of any contract or other
document filed as an exhibit to the Registration Statement are not
necessarily complete and each such description is qualified by reference to
such contract or document.

57SEC.

UNITY FIRST ACQUISITION CORP.
(A DEVELOPMENT STAGE ENTITY)

INDEX TO FINANCIAL STATEMENTS

PAGE
----
ReportIndependent Auditors' Report................................. F-2

Balance Sheets as of Independent Public Accountants . . . . . . . . . . . . F-2

FinancialDecember 31, 1998 and 1997.............. F-3

Statements

Balance Sheet - July 31, 1996. . . . . . . . . . . . . . . . . F-3

Statement of Operations for the period
May 30, 1996 (Dateand Comprehensive Income
as of Inception)
Through JulyDecember 31, 1996 . . . . . . . . . . . . . . . . . . .1998 and 1997............................. F-4

StatementStatements of Changes in Shareholders'Stockholders' Equity for the period May 30, 1996
(Date of Inception) Through
Julyyears ended
December 31, 1996 . . . . . . . . . . . . . . . . . . . . . . .1998, 1997 and 1996............................. F-5

StatementStatements of Cash Flows for the period
May 30, 1996 (Dateas of Inception)
Through JulyDecember 31, 1996 . . . . . . . . . . . . . . . . . . .1998 and 1997.... F-6

Summary of Accounting Policies............................... F-7

Notes to Financial Statements. . . . . . . . . . . . . . . . . .F-7Statements................................ F-10

Balance Sheets as of September 30, 1999 (unaudited) and
December 31, 1998............................................ F-20

Statements of Operations and Comprehensive Income
as of September 30, 1999 and September 30, 1998 (unaudited).. F-21

Statements of Stockholders' Equity for the nine months
ended September 30, 1999 (unaudited)......................... F-22

Statements of Cash Flows as of September 30, 1999 and
September 30, 1998 (unaudited)............................... F-23

Notes to F-14Financial Statements (unaudited).................... F-24

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Unity First Acquisition Corp.:Independent Auditors' Report

Stockholders and Board of Directors
GraphOn Corporation
Campbell, California

We have audited the accompanying balance sheetsheets of Unity First Acquisition
Corp. (a Delaware corporation in the development stage)GraphOn Corporation as
of JulyDecember 31, 1996,1998 and 1997 and the related statements of operations changes in shareholders'and
comprehensive income, stockholders' equity (deficit) and cash flows for each of the three
years in the period from inception (May 30, 1996) to Julyended December 31, 1996.1998. 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 audit.audits.

We conducted our auditaudits in accordance with generally accepted auditing
standards. ThoseThese standards require that we plan and perform the auditour audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statement presentation.statements. We believe that our audit providesaudits 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 Unity First Acquisition
Corp.GraphOn Corporation as of
JulyDecember 31, 1996,1998 and 1997, and the results of its operations and its cash flows
for each of the three years in the period from inception (May 30, 1996) to Julyended December 31, 1996,1998 in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the accompanying
financial statements, the Company is a development stage enterprise/s/ BDO Seidman, LLP
BDO Seidman, LLP

San Jose, California
February 25, 1999, except with no
significant operating resultsrespect to date. The factorsmatters discussed
in Note 16 as to which the date is May 30, 1999.

F-2

GraphOn Corporation
Balance Sheets

December 31,
----------------------------
1998 1997
----------- ----------

Assets
Current Assets:
Cash and cash equivalents (Note 8).......................................... $ 1,798,400 $ 302,800
Accounts receivable, net of allowance for doubtful accounts of
$25,000, $25,000 and $0, respectively (Notes 8 and 9)...................... 564,700 308,100
Available-for-sale securities (Notes 1 and 8)............................... -- 8,600
Prepaid expenses and other assets........................................... 32,100 18,300
------------ ----------
Total Current Assets......................................................... 2,395,200 637,800
------------ ----------
Property and Equipment, net (Notes 2 and 3).................................. 423,300 50,300

Purchased Technology, net (Note 3)........................................... 3,645,400 --

Capitalized Software, net.................................................... 74,200 43,200

Deferred Compensation Expense (Note 6)....................................... 566,000 --

Other Assets................................................................. 6,400 2,000
------------ ----------
$ 7,110,500 $ 733,300
============ ==========

Liabilities And Stockholders' Equity

Current Liabilities:
Convertible note payable (Notes 5, 6 and 13)................................ $ 475,000 $ --
Accounts payable............................................................ 115,700 28,400
Accrued expenses (Note 4)................................................... 498,900 142,900
Deferred revenue............................................................ 112,600 443,800
------------ ----------
Total Current Liabilities..................................................... 1,202,200 615,100

Commitments, Contingencies and Subsequent Events (Notes 5, 6, 10, 11,
and 13).....................................................................
Stockholders' Equity (Notes 5, 6, and 13).....................................
Preferred stock, no par value, 5,000,000 shares authorized, no
shares issued and outstanding............................................. -- --
Common stock, no par value, 50,000,000 shares authorized,
16,363,959, 14,294,003 and 6,000,000 shares issued and
outstanding............................................................... 8,431,500 505,000
Accumulated other comprehensive income (Notes 1 and 8)...................... -- (12,100)
Accumulated deficit......................................................... (2,523,200) (374,700)
------------ ----------
Stockholders' Equity.......................................................... 5,908,300 118,200
------------ ----------

$ 7,110,500 $ 733,300
============ ==========

See accompanying summary of accounting policies and notes to financial
statements.

F-3

GraphOn Corporation

Statements of Operations and Comprehensive Income

For the Years Ended December 31, 1998, 1997 and 1996

Years ended December 31,
---------------------------------------
1998 1997 1996
----------- ----------- -----------

Revenues (Notes 8 and 9):
Product sales........................................... $ 608,700 $ 480,000 $ 505,000
Maintenance............................................. 320,300 8,200 75,000
OEM licenses............................................ 1,184,800 1,437,900 14,800
Training................................................ 10,400 -- --
----------- ----------- -----------
Total Revenues........................................... 2,124,200 1,926,100 594,800

Cost of Revenues (Note 10):
Product sales........................................... 28,500 43,500 261,300
Maintenance............................................. 22,200 16,600 12,800
OEM licenses............................................ 293,500 403,200 61,500
----------- ----------- -----------
Total Cost of Revenues................................... 344,200 463,300 335,600

Gross Profit............................................. 1,780,000 1,462,800 259,200
----------- ----------- -----------
Operating Expenses:
Selling and marketing................................... 1,440,300 827,300 192,700
General and administrative (Notes 6 and 10)............. 1,118,600 324,700 218,900
Research and development................................ 840,200 190,500 41,700
----------- ----------- -----------
Total Operating Expenses................................. 3,399,100 1,342,500 453,300
----------- ----------- -----------
(Loss) Income From Operations............................ (1,619,100) 120,300 (194,100)

Other Income (Expense):
Interest and other income............................... 9,800 7,200 6,400
Interest expense (Note 6)............................... (521,900) (2,100) --
Loss on sale of available-for-sale securities
(Note 1)............................................... (16,500) -- --
----------- ----------- -----------
(Loss) Income Before Provision for Income
Taxes ................................................ (2,147,000) 125,400 (187,700)
Provision for Income Taxes (Note 7) ..................... 800 900 800
----------- ----------- -----------
Net (Loss) Income........................................ (2,148,500) 124,500 (188,500)
----------- ----------- -----------

Other Comprehensive Income (Loss), net of tax
Unrealized holding gain (loss) on investment
(Note 1) .............................................. 12,100 (8,100) 7,500
----------- ----------- -----------
Comprehensive (Loss) Income.............................. $(2,136,400) $ 116,400 $ (181,000)
=========== =========== ===========
Basic and Diluted (Loss) Earnings per
Common Share............................................ $ (0.32) $ 0.02 $ (0.03)
=========== =========== ===========
Weighted Average Common Shares Outstanding............... 6,762,667 6,000,000 6,000,000
=========== =========== ===========

See accompanying summary of accounting policies and notes to financial
statements

raise a substantial doubt about the ability of the Company
to continue as a going concern. Management's plans in regards to those matters
are also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP

New York, New York
August 16, 1996

F-2

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

BALANCE SHEET
JULY 31, 1996

- -----------------------------------------------------------------------------

ASSETS

CURRENT ASSETS:
Cash $ 563
--------
DEFERRED REGISTRATION COSTS 250,000
--------
TOTAL ASSETS $250,563
--------
--------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
Accrued registration costs $225,000
Advances from affiliate 40,500
--------
TOTAL CURRENT LIABILITIES 265,500
--------
COMMITMENTS AND CONTINGENCIES (Note 6)

SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value, 5,000 shares
authorized, no shares issued -
Common stock, $.0001 par value, 20,000,000
shares authorized, 625,000 shares issued and
outstanding 63
Additional paid-in-capital -
Deficit accumulated during the development stage (15,000)
--------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (14,937)
--------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $250,563
--------
--------

See Accompanying Notes to Financial Statements

F-3

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

STATEMENT OF OPERATIONS
FOR THE PERIOD MAY 30, 1996
(DATE OF INCEPTION) THROUGH JULY 31, 1996

- -----------------------------------------------------------------------------

REVENUES $ -
---------
EXPENSES:
General and administrative 15,000
---------
TOTAL EXPENSES 15,000
---------
NET LOSS $ (15,000)
---------
---------
NET LOSS PER COMMON SHARE ($.02)
---------
---------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 625,000
---------
---------

See Accompanying Notes to Financial Statements

F-4

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD MAY 30,GraphOn Corporation

Statements of Stockholders' Equity

For the Years Ended December 31, 1998, 1997 and 1996

(DATE OF INCEPTION) THROUGH JULY 31, 1996

- -----------------------------------------------------------------------------(Notes 1,2,3,6 and 13)

Deficit
Common Stock Additional Accumulated
During
------------ Paid-In the Development------------------------ Comprehensive Accumulated
Shares Par Value Capital StageAmount Income Deficit Total
------ --------- ---------- ------------------- ------------------- ------------- ----------- -----------

Balances, December 31, 1995................... 6,000,000 $ 505,000 $ (11,500) $ (310,700) $ 182,800
Change in market value of available-for-
sale securities............................. -- -- 7,500 -- 7,500
Net loss...................................... -- -- -- (188,500) (188,500)
---------- ---------- ------------ ----------- -----------
Balances, December 31, 1996................... 6,000,000 505,000 (4,000) (499,200) 1,800
Change in market value of available-for-
sale securities............................ -- -- (8,100) -- (8,100)
Net income.................................... -- -- -- 124,500 124,500
---------- ---------- ------------ ----------- -----------
Balances, December 31, 1997................... 6,000,000 505,000 (12,100) (374,700) 118,200
Change in market value of available-for-
sale securities............................ -- -- 12,100 -- 12,100
Compensation expense related to
issuance of common stock and granted
options.................................... -- 667,600 -- -- 667,600
Interest expense related to issuance of
common stock............................... -- 475,000 -- -- 475,000
Proceeds from employee stock purchase......... 508,500 38,100 -- -- 38,100
Proceeds from sale of common stock,
net of offering costs of $564,700.......... 3,699,000 2,659,300 -- -- 2,659,300
Issuance of common stock to original foundersand warrants
for cash, at par value 625,000 $63property and equipment and
purchased technology....................... 3,886,503 3,886,500 -- -- 3,886,500
Exchange of convertible notes payable......... 200,000 200,000 -- -- 200,000
Net loss...................................... -- -- -- (2,148,500) (2,148,500)
---------- ---------- ------------ ----------- -----------
Balances, December 31, 1998................... 14,294,003 $8,431,500 $ --- $(2,523,200) $ - $ 63

Net loss for the period
May 30, 1996 (date of
inception) through July
31, 1996 - - - (15,000) (15,000)
------- --------- ---------- ------------------- ----------
Balance, July 31, 1996 625,000 $63 $ - $(15,000) $(14,937)
------- --------- ---------- ------------------- ----------
------- --------- ---------- ------------------- ----------5,908,300
========== ========== ============ =========== ===========

See Accompanying Notesaccompanying summary of accounting policies and notes to Financial Statementsfinancial
statements.

F-5

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

STATEMENT OF CASH FLOWS
FOR THE PERIOD MAY 30,Graphon Corporation

Statements Of Cash Flows

For The Years Ended December 31, 1998, 1997 and 1996

(DATE OF INCEPTION) THROUGH JULY 31, 1996

- -----------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(15,000)

NET CASH USED IN OPERATING ACTIVITIES (15,000)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:(Note 12)

Years Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- -----------

Increase (Decrease) In Cash and Cash Equivalents

Cash Flows From Operating Activities:
Net (loss) income........................................... $(2,148,500) $ 124,500 $(188,500)
Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activities:
Depreciation and amortization............................... 65,200 31,000 1,100
Allowance for doubtful accounts............................. 25,000 -- --
Loss (gain) on sale of available-for-sale
securities................................................. 16,500 -- (4,400)
Compensation expense (Note 6)............................... 101,600 -- --
Interest expense (Note 6)................................... 475,000 -- --
Changes in operating assets and liabilities:
Accounts receivable........................................ (281,600) 232,000 (461,700)
Related party receivable................................... -- 34,400 (8,500)
Prepaid expenses and other assets.......................... (13,900) (400) 28,900
Accounts payable........................................... 87,300 12,900 (1,800)
Accrued expenses........................................... 356,000 137,000 (19,500)
Deferred revenue........................................... (331,200) (358,300) 802,100
----------- --------- ---------
Net Cash (Used In) Provided By Operating Activities.......... (1,648,600) 213,100 147,700
----------- --------- ---------
Cash Flows From Investing Activities:
Proceeds from sale of available-for-sale
securities................................................. 4,300 -- 40,500
Purchase of available-for-sale securities................... -- -- (20,700)
Capitalization of software development costs................ (53,100) (24,000) (35,900)
Capital expenditures........................................ (179,400) (39,300) (28,500)
Other assets................................................ -- -- --
----------- --------- ---------
Net Cash Used In Investing Activities........................ (228,200) (63,300) (44,600)
----------- --------- ---------
Cash Flows From Financing Activities:
Proceeds from convertible notes payable..................... 775,000 -- --
Repayment of convertible notes payable...................... (100,000) -- --
Net proceeds from issuance of common stock.................. 2,697,400 -- --
Purchase and retirement of stock............................ -- -- --
----------- --------- ---------
Net Cash Provided By Financing Activities.................... 3,372,400 -- --
----------- --------- ---------
Net Increase in Cash and Cash Equivalents.................... 1,495,600 149,800 103,100

Cash and Cash Equivalents, beginning of the period........... 302,800 153,000 49,900
----------- --------- ---------
Cash and Cash Equivalents, end of the period................. $ 1,798,400 $ 302,800 $ 153,000
=========== ========= =========

See accompanying summary of common stock 63
Advance from affiliate 40,500
Deferred registration costs (25,000)
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 15,563
--------
NET INCREASE IN CASH 563

CASH, beginning of period -
--------
CASH, end of period $ 563
--------
--------

See Accompanying Notesaccounting policies and notes to Financial Statementsfinancial
statements.

F-6

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

NOTES TO FINANCIAL STATEMENTS

- -----------------------------------------------------------------------------

NOTE 1. ORGANIZATION AND OPERATIONS

Unity First Acquisition Corp.GraphOn Corporation
Summary of Accounting Policies

Organization and Business

GraphOn Corporation (the "Company")Company) was incorporated in the Statestate of
Delaware onCalifornia in May 30, 1996, for the purpose of raising capital which is to
be used to effect a business combination (the "Business Combination").1982 and has headquarters in Campbell, California. The Company
is currently in the development stage. All activitydevelops, markets, sells and supports server-based software that empowers a
diverse range of the Companydesktop computing devices (desktops) to date relates to its formationaccess server-based
Windows and proposed fund raising. Management has
elected a July 31 fiscal year-end for the Company.

The Company's ability to commence operations is contingent upon obtaining
financing through a public offering (the "Proposed Offering")UNIX applications from any location, over network or Internet
connections.

Use of the
Company's common stock (the "Common Stock"). Note 2 discusses the details
of the Proposed Offering.

The Proposed Offering can be considered a "blind pool." Blind pool
offerings are inherently characterized by an absence of substantive
disclosures relating to the use of the net proceeds of the offering.
Consequently, although substantially all of the proceeds of the Proposed
Offering are intended to be utilized to effect a Business Combination, the
proceeds are not specifically designated for this purpose. Upon completion
of this Proposed Offering, 90% of the net proceeds, after payment of
underwriting discounts and commissions and the underwriter's non-
accountable expense allowance, will be held in an interest-bearing trust
account ("Trust Account") until the earlier of (1) written notification by
the Company of its need for all or substantially all of such net proceeds
for the purpose of implementing a Business Combination, or (2) the
liquidation of the Company in the event that the Company does not effect a
Business Combination within 18 months from the consummation of the
offering. Notwithstanding the foregoing, if the Company enters into a
letter of intent, an agreement in principle or a definitive agreement to
effectuate a Business Combination prior to the expiration of such 18-month
period, the Company's Certificate of Incorporation provides that the
Company will be afforded up to an additional 6 months following the
expiration of the initial 18-month period to consummate such Business
Transaction. Moreover, since the Company has not yet identified an
acquisition target (the "Target") investors in the Proposed Offering will
have virtually no substantive information available for advance
consideration of any specified Business Combination.

F-7

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

NOTES TO FINANCIAL STATEMENTS

- -----------------------------------------------------------------------------

NOTE 1. ORGANIZATION AND OPERATIONS (CONT'D)

The Proposed Offering is not being conducted in accordance with Rule 419
which was adopted by the Securities and Exchange Commission (the
"Commission") to strengthen the regulation of securities offered by "blank
check" companies. A blank check company is defined as (a) a development
stage company that has no specific business plan or has indicated that its
business plan is to engage in a merger or acquisition with an unidentified
company and (b) a company which issues securities that, among other things,
(i) are not quoted in the NASDAQ system, or, (ii) in the case of a company
which has been in continuous operation for less than three years, has net
tangible assets of less than $5,000,000. Although the Company is a "blank
check" company, it does not believe that Rule 419 will be applicable to it
in view of the fact that upon its receipt of the net proceeds of this
offering, the Company's net tangible assets will exceed $5,000,000.
Accordingly, investors in this offering will not receive the substantive
protection provided by Rule 419. Additionally, there can be no assurances
that the United States Congress will not enact legislation which will
prohibit or restrict the sale of securities of "blank check" companies.

As a result of its limited resources, the Company will, in all likelihood,
have the ability to effect only a single Business Combination.
Accordingly, the prospects for the Company's success will be entirely
dependent upon the future performance of a single business.

The Company will not effect a Business Combination unless the fair market
value of the Target, as determined by the Board of Directors of the Company
in its sole discretion, based upon valuation standards generally accepted
by the financial community including, among others, book value, cash flow,
and both actual and potential earnings, is at least equal to 80% of the net
assets (assets less liabilities) of the Company at the time of such
acquisition.

Upon the completion of this offering, the Company will not satisfy the
criteria for qualifying its securities in the NASDAQ system. The Company's
securities will be traded in the over-the-counter market. It is anticipated
that they will be quoted on the OTC Bulletin Board, an NASD sponsored and
operated inter-dealer automated quotation system for equity securities not
included in The NASDAQ Stock Market, as well as in the NQB Pink Sheets
published by National Quotation Bureau Incorporated. The OTC Bulletin
Board was introduced as an alternative to "pink sheet" trading of
over-the-counter securities. Although the Company believes that the OTC
Bulletin Board has been recognized by the brokerage community as an
acceptable alternative to the NQB Pink Sheets, there can be no assurance
that the liquidity and prices of the Units in the secondary market will
not be adversely affected.

F-8

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

NOTES TO FINANCIAL STATEMENTS

- -----------------------------------------------------------------------------

NOTE 1. ORGANIZATION AND OPERATIONS (CONT'D)

Furthermore, there is no assurance that the Company will be able to
successfully effect a Business Combination. As discussed previously, if
the Company is unable to effect a Business Combination within 24 months of
the consummation of the Proposed Offering, the Company's Certificate of
Incorporation provides for the Company's automatic liquidation. In the
event of liquidation, the per share value of the residual assets remaining
available for distribution may be less than the initial public offer price
per share in the Proposed Offering. In no event, however, will the
Company's liquidation value be less than the amount in the Trust Account,
inclusive of any net interest income thereon.

Moreover, all of the Company's present stockholders have agreed to waive
their respective rights to participate in any such liquidation distribution
on shares owned prior to the Proposed Offering.

If the Company is unable to acquire control of an operating business or
businesses, it may be required to register as an investment company under
the Investment Company Act of 1940, as amended (the "Act"). The Company is
unable to predict what effect registration under such Act would have, but
it believes that its ability to pursue its current business plan could be
adversely affected as a result. The most significant difference with
respect to financial statement presentation and disclosure requirements for
companies registered under the Act would require the investments held by
the Company to be adjusted to market value at the balance sheet date. The
Company believes that its anticipated principal activities, which will
involve acquiring control of an operating company, will not subject the
Company to regulation under the Act.

F-9

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

NOTES TO FINANCIAL STATEMENTS

- -----------------------------------------------------------------------------

NOTE 2. PROPOSED PUBLIC OFFERING OF SECURITIES

The Proposed Offering calls for the Company to offer for public sale up to
1,250,000 units (the "Units") at a price of $6.00 per Unit. Each Unit
consists of one share of the Company's Common Stock, $.0001 par value, one
Class A Redeemable Warrant and one Class B Redeemable Warrant. Each Class
A Redeemable Warrant and Class B Redeemable Warrant entitles the holder to
purchase from the Company one share of Common Stock at an exercise price of
$5.50 and $7.50, respectively, commencing on the later of (i) the
consummation of a Business Combination, or (ii) one year from the effective
date of the Prospectus and ending six years after the effective date of the
Proposed Offering (the "Effective Date"). The Class A Redeemable Warrants
and Class B Redeemable Warrants will be redeemable at the option of the
Company, and with the consent of the underwriter of the Proposed Offering
(the "Underwriter") each as a class, in whole and not in part, upon 30
days' notice at any time after the Redeemable Warrants become exercisable,
only in the event that the closing bid price of the Common Stock is at
least $8.50 per share with respect to the Class A Redeemable Warrant(s),
and $10.50 with respect to the Class B Redeemable Warrants for 20
consecutive trading days immediately prior to notice of redemption, at a
price of $.05 per Class A Redeemable Warrant or Class B Redeemable Warrant.
The warrants will become separable and transferable only upon consummation
of a Business Combination.

F-10

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

NOTES TO FINANCIAL STATEMENTS

- -----------------------------------------------------------------------------

NOTE 2. PROPOSED PUBLIC OFFERING OF SECURITIES (CONT'D)

The Company has granted the Underwriter an option, exercisable within 45
business days from the Effective Date, to purchase up to 187,500 additional
Units at $6.00 per Unit. This option is solely for the purpose of covering
over-allotments.

In connection with the Proposed Offering, the Company will sell to the
Underwriter and its designees, for nominal consideration, Unit Purchase
Option(s) (the "Underwriter's UPO") to purchase up to 125,000 Units at an
exercise price of $6.60 per Unit. The Underwriter's UPO's will be
exercisable for a period of four years commencing one year from the
Effective Date.

The Company has granted its executive officers and directors 200,000
warrants (50% Class A Warrants and 50% Class B Warrants, collectively the
"Directors' Warrants") to purchase Common Stock at $5.50 and $7.50,
respectively, per share in consideration of future services to be rendered
on behalf of the Company. The Directors' Warrants are not exercisable
until the consummation by the Company of a Business Combination and are not
redeemable by the Company.

All of the Company's present stockholders have agreed to vote their
respective shares of Common Stock in accordance with the vote of the
majority of all nonaffiliated future stockholders of the Company with
respect to a Business Combination.

In addition, the Common Stock owned by all of the executive officers and
directors of the Company, their affiliates and by all persons owning 5% or
more of the currently outstanding shares of Common Stock has been placed in
escrow until the earlier of (i) the occurrence of a Business Combination,
or (ii) the Liquidation Date. During the escrow period, such stockholders
will not be able to sell or otherwise transfer their respective shares of
Common Stock, but retain all other rights as stockholders of the Company,
including, without limitation, the right to vote such shares of Common
Stock.

As of July 31, 1996, the Company has recorded deferred registration costs
of $250,000 relating to various expenses incurred and accrued for in
connection with the Proposed Offering. Upon consummation of the Proposed
Offering, these costs will be charged to equity. Should the Proposed
Offering prove to be unsuccessful, these deferred costs, as well as any
other additional expenses that may be incurred, will be charged to
operations.

F-11

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

NOTES TO FINANCIAL STATEMENTS

- -----------------------------------------------------------------------------

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

UTILIZATION OF ESTIMATESEstimates

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.

NET INCOME (LOSS) PER COMMON SHARE

Net income (loss) per common share is computed based on the weighted
average numberCash and Cash Equivalents

The Company considers all highly liquid investments purchased with original
maturities of common shares outstanding and common stock equivalents,
if not anti-dilutive.

NOTE 4. CAPITAL STOCKthree months or less to be cash equivalents.

Marketable Securities

The Company's Certificate of Incorporation authorizes the issuance of
20,000,000 shares of Common Stock. Upon completion of the Proposed
Offering (assuming no exercise of the Underwriter's over-allotment option),
there will be 14,862,500 authorized but unissued shares of Common Stock
availableCompany accounts for issuance (after appropriate reserves for the issuance of
Common Stockinvestments in connection with the Class A Redeemable Warrants and Class B
Redeemable Warrants, the Underwriters's UPO's, the executive officers and
director Class A Warrants and Class B Warrants, and the future grantsmarketable securities under the
Company's 1996 Stock Option Plan). The Company's Boardprovisions of Directors
has the power to issue any or all of the future grants under the Company's
1996 Stock Option Plan. The Company's Board of Directors has the power to
issue any or all of the authorized but unissued Common Stock without
stockholder approval. The Company currently has no commitments to issue
any shares of Common Stock other than as described in the Proposed
Offering; however, the Company will, in all likelihood, issue a substantial
number of additional shares in connection with a Business Combination. To
the extent that additional shares of Common Stock are issued, dilution to
the interests of the Company's stockholders participating in the Proposed
Offering will occur.

The Board of Directors of the Company is empowered, without stockholder
approval, to issue up to 5,000 shares of "blank check" preferred stock (the
"Preferred Stock") with dividend, liquidation, conversion, voting or other
rights which could adversely affect the voting power or other rights of the
holders of the Company's Common Stock.

F-12

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

NOTES TO FINANCIAL STATEMENTS

- -----------------------------------------------------------------------------

NOTE 5. RELATED PARTY TRANSACTIONS

The Chairman of the Board of Directors and the President of the Company are
principal shareholders, officers and directors of Unity Venture Capital
Associates Ltd. ("Unity") which owns shares in the Company. Beginning
June 1, 1996, commensurate with the Company's activities primarily related
to the Proposed Offering, the Company will be obligated to pay Unity a
monthly fee of $7,500 for general and administrative services, including
the use of office space in premises occupied by Unity. At July 31, 1996,
the Company owed $15,000 (included in advances from affiliate on the
balance sheet) to Unity for administrative services.

Through July 31, 1996, the Company has obtained advances totaling $25,500
from Unity to cover expenses related to the Proposed Offering which are
included in advances from affiliate on the balance sheet. These advances
are due on demand and are expected to be repaid out of the proceeds of the
Proposed Offering.

At July 31, 1996, a member of the Company's legal counsel owned 6,000
shares of the Company's Common Stock.

NOTE 6. STOCK OPTION PLAN

On May 30, 1996, the Company's Board of Directors approved a stock option
plan (the "Plan"). The Plan, which is subject to shareholder approval,
provides for issuance of up to 187,500 options (the "Options") to acquire
shares of the Company's Common Stock.

The Options are intended to qualify either as incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986 or as options which are not intended to meet
the requirements of such section ("Nonstatutory Stock Options"). The
Options may be granted under the Plan to persons who, in the case of
Incentive Stock Options, are key employees (including officers) of the
Company, or, in the case of Nonstatutory Stock Options, are key employees
(including officers) and nonemployee directors of the Company, except that
Nonstatutory Stock Options may not be granted to a holder of more than 10%
of the total voting power of the Company.

F-13

UNITY FIRST ACQUISITION CORP.
(a development stage entity)

NOTES TO FINANCIAL STATEMENTS

- -----------------------------------------------------------------------------

NOTE 6. STOCK OPTION PLAN (CONT'D)

The exercise price of all Incentive Stock Options granted under the Plan
must be at least equal to the fair market value of such shares on the date
of grant or, in the case of Incentive Stock Options granted to the holder
of 10% or more of the Company's Common Stock, at least 110% of the fair
market value of such shares on the date of grant. The exercise price of
all Nonstatutory Stock Options granted under the Plan shall be determined
by the Board of Directors of the Company at the time of grant. The maximum
exercise period for which the Options may be granted is ten years from the
date of grant (five years in the case of Incentive Stock Options granted to
an individual owning more than 10% of the Company's Common Stock). The
aggregate fair market value (determined at the date of the option grant) of
such shares with respect to which Incentive Stock Options are exercisable
for the first time by the holder of the option during any calendar year
shall not exceed $100,000.

The FASB issued StatementStatements of Financial Accounting Standards (SFAS) No. 123,
"Accounting115,
Accounting for Stock Based Compensation" ("Certain Investments in Debt and Equity Securities. Under SFAS 123"), which will require
companiesNo.
115, securities are classified and accounted for as follows:

- Debt securities that the enterprise has the positive intent and ability
to hold to maturity are classified as held-to-maturity securities and
reported at amortized cost.

- Debt and equity securities that are bought and held principally for the
purpose of selling them in the near term are classified as trading
securities and reported at fair value, with unrealized gains and losses
included in earnings.

- Debt and equity securities not classified as either to reflect in their financial statementsheld-to-maturity
securities or reflecttrading securities are classified as supplemental disclosure the impact onavailable-for-sale
securities and reported at fair value, with unrealized gains and losses
excluded from earnings and earnings per sharereported in a separate component of
shareholders' equity.

Property and Equipment

Property and equipment are stated at cost. Depreciation is calculated using
the straight-line method over the estimated useful lives of the respective
assets, generally three to seven years. Amortization of leasehold improvements
is calculated using the straight-line method over the lesser of the lease term
or useful lives of the respective asset, generally seven years.

Purchased Technology

Purchased technology is to be amortized on a straight-line basis over the
life of the related technology or five years, whichever is less.

Capitalized Software Costs

Costs incurred internally in creating computer software products to be
sold, leased, or otherwise marketed are charged to expense when incurred as
research and development until technological feasibility has been established
for the product. Thereafter, such costs are capitalized until the product is
available for general release to customers and amortized based on either
estimated current and future

F-7

revenue for each product or straight-line amortization over the shorter of three
years or the remaining estimated life of the product, whichever produces the
higher expense for the period. As of December 31, 1998 and 1997, capitalized
costs aggregated $113,000 and $59,800, with accumulated amortization of $38,800
and $16,600. For the three months ended March 31, 1999, no additional costs had
been capitalized and accumulated amortization aggregated $48,200.

Revenue Recognition and Deferred Revenue

In October 1997, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) 97-2, Software Revenue Recognition,
which generally requires revenue earned on software arrangements involving
multiple elements to be allocated to each element arrangement based on the
relative fair values of the elements. If there is no evidence of the fair value
for all the elements in a multiple element arrangement all revenue from the
arrangement is deferred until such evidence exists or until all elements are
delivered. In accordance with SOP 97-2, the Company recognizes revenue from the
sale of stock based compensation using certain pricing modelssoftware licenses when all the following conditions are met: the
software has been shipped to the customer, no significant obligations remain,
and collection is probable. Revenue from sale of maintenance agreements is
recognized ratably over the term of the agreement. OEM (Original Equipment
Manufacturer) licenses revenue is generally recognized as deliveries are made or
at the completion of contractual billing milestones. Deferred revenue, resulting
from maintenance and license agreements, aggregated $112,600 and $443,800 as of
December 31, 1998 and 1997.

Advertising Costs

The cost of advertising is expensed as incurred. Advertising costs for the
option component of stock option plans. As of Julyyears ended December 31, 1998, 1997 and 1996 no
options have been granted underand for the Plan. Disclosure, as required by SFAS
123, will be made upon the issuance of options.

NOTE 7. INCOME TAXESthree month period
ended March 31, 1999, were approximately $58,400, $60,000, $0, and $109,600,
respectively.

Income Taxes

Income taxes are accountedcalculated using the liability method of accounting for
in accordance with Statement of Financial
Accounting Standardsincome taxes specified by SFAS No. 109, "AccountingAccounting for Income Taxes." Under this
method, deferred Deferred
income taxes are determined based onrecognized for the tax consequences of temporary differences
between the financial statements and income tax bases of assets, and liabilities and
their financial reporting
amounts at each year end, and are measured based oncarryforwards using enacted tax rates and
laws that will be in effect when the differences are expected to reverse.rates. Valuation allowances are established when
necessary, to reduce deferred tax assets to the amount expected to be realized.
NOTE 8. CONTINGENCYRealization is dependent upon future pre-tax earnings, the reversal of temporary
differences between book and tax income, and the expected tax rates in effect in
future periods.

Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:

Cash and cash equivalents:

The carrying amount reported in the balance sheet for cash and cash
equivalents approximate fair value.

Investment securities:

The fair values of marketable debt and equity securities are based on
quoted market prices.

Short-term debt:

The fair value of short-term debt is estimated based on current interest
notes available to the Company for debt instruments with similar terms and
maturities.

F-8

As of December 31, 1998 and 1997, the fair values of the Company's
financial instruments approximate their historical carrying amounts.

Long-Lived Assets

Long-lived assets are assessed for possible impairment whenever events or
changes in circumstances indicate that the carrying amounts may not be
recoverable, or whenever management has committed to a plan to dispose of the
assets. Such assets are carried at the lower of book value or fair value as
estimated by management based on appraisals, current market value, comparable
sales value, and undiscounted future cash flows as appropriate. Assets to be
held and used affected by such impairment loss are depreciated or amortized at
their new carrying amount over the remaining estimated life; assets to be sold
or otherwise disposed of are not subject to further depreciation or
amortization.

Stock-Based Incentive Programs

SFAS No. 123, Accounting for Stock-Based Compensation, encourages entities
to recognize compensation costs for stock-based employee compensation plans
using the fair value based method of accounting defined in SFAS No. 123, but
allows for the continued use of the intrinsic value based method of accounting
prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees. The Company has agreedcontinues to indemnifyuse the Underwriter againstaccounting
prescribed by APB Opinion No. 25 and as such is required to disclose pro forma
net income and earnings per share as if the fair value based method of
accounting had been applied.

Adoption of New Accounting Pronouncements

In February 1998, the Financial Accounting Standards Board (FASB) issued
SFAS No. 132, Employer's Disclosure about Pensions and Other Postretirement
Benefits, which standardizes the disclosure requirements for pension and other
postretirement benefits. The adoption of SFAS No. 132 did not have a material
impact the Company's current disclosures.

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 requires companies to recognize
all derivatives contracts as either assets or liabilities in the balance sheet
and to measure them at fair value. If certain liabilities, including liabilities underconditions are met, a derivative
may be specifically designated as a hedge, the Securities Act. Theobjective of which is to match
the timing of gain or loss recognition on the hedging derivative with the
recognition of (i) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized in income in the period of
change. SFAS No. 133 is effective for all fiscal years beginning June 15, 2000.

Historically, the Company has also agreednot entered into derivatives contracts either
to payhedge existing risks or for speculative purposes. Accordingly, the Company
does not expect adoption of the new standard on July 1, 1999 to affect its
financial statements.

Earnings Per Common Share

In February 1997, the FASB issued SFAS No. 128, Earnings Per Share, which
was effective December 28, 1997. Conforming to SFAS No. 128, the Company changed
its method of computing earnings per share and restated all prior periods
included in the financial statements. Under SFAS No. 128, the dilutive effect of
stock options is excluded from the calculation of basic earnings per share.

Reclassifications

Certain amounts in the 1997 financial statements have been reclassified to
conform with the 1996 and 1998 presentation.

F-9

GraphOn Corporation

Notes to Financial Statements

1. Available-For-Sale Securities

As of December 31, 1997, the Company held 4,000 shares of common stock in a
publicly traded company. In 1998, the Company sold these shares and recorded a
loss on the sale of $16,500. A summary of available-for-sale securities follows:

December 31,
---------------------
1998 1997
--------- --------

Cost of securities....................................... $ -- $ 20,700
Less unrealized loss..................................... -- 12,100
-------- --------
$ -- $ 8,600
======== ========

2. Property and Equipment

Property and equipment consisted of the following:

December 31,
-----------------------
1998 1997
--------- ---------

Equipment................................................ $292,800 $61,700
Furniture and fixtures................................... 175,600 2,300
Leasehold improvements................................... 13,500 1,900
--------- ---------
481,900 65,900

Less accumulated depreciation and amortization........... 58,600 15,600
--------- ---------
$423,300 $50,300
========= =========

3. Purchased Technology

In December 1998, the Company issued 3,886,503 shares of common stock and
388,650 warrants to Corel Corporation in exchange for certain fixed assets and
technology for the deployment of Windows NT applications through server based
computing (Note 6). Based on the fair market value of the securities issued, as
determined by the prices associated with the Private Placement Offering (Note
6), the aggregate purchase price was $3,886,500, which was allocated to the
Underwriterfollowing respective assets based on their fair market value at the time of the
transaction:

Equipment................................................................... $ 77,100
Furniture................................................................... 164,000
Purchased technology........................................................ 3,645,400
----------
$3,886,500
==========

F-10

GraphOn Corporation

Notes to Financial Statements (Continued)

3. Purchased Technology (Continued)

December 31,
1998
--------------

Purchased technology........................... $3,645,400
Less accumulated amortization.................. --
----------
$3,645,400
==========

4. Accrued Expenses

Accrued expenses consisted of the following:

December 31,
-----------------------
1998 1997
---------- ----------

Payroll and related expenses................... $ 140,600 $ 34,400
Professional fees.............................. 180,000 35,000
Accrued payroll taxes.......................... 76,700 --
Royalties...................................... 65,300 46,100
Other.......................................... 36,300 27,400
---------- ----------
$ 498,900 $ 142,900
========== ==========

5. Convertible Note Payable

In March 1998 the Company issued a convertible note payable for $475,000 to
an expense allowanceaffiliate (the Agent Affiliate) of the placement agent dated September 2,
1998 for the Company's subsequent private placement offering of common stock
(the Offering). The convertible note bears interest at 10% and is due upon the
earlier date of the Company raising between $2,500,000 and $3,000,000 in the
Offering or six months after its commencement. The note is convertible into
shares of common stock at $1.00 per share at the option of the note holder (Note
13).

In September 1998, the Agent Affiliate and the Company's CEO loaned $200,000
and $100,000, respectively, to the Company pursuant to convertible promissory
notes bearing interest at 8% per annum, which mature at the earlier of the first
closing of the Offering or 12 months from the date of the notes. Such notes, at
the option of the lender, may be converted into shares of common stock at $1.00
per share. In connection with this transaction, the Agent Affiliate and CEO were
issued warrants to purchase 100,000 and 50,000 shares, respectively, at $1.00
per share (Note 6).

On December 31, 1998, the loan by the Agent Affiliate was converted into
200,000 shares of common stock. Also on December 31, 1998, the Company repaid
the $100,000 loan from the CEO, plus accrued interest.

F-11

GraphOn Corporation

Notes to Financial Statements (Continued)

6. Stockholders' Equity

Prior Bankruptcy

In November 1991, the Company filed a non-
accountable basis equalVoluntary Petition for Relief under
Chapter 11 of the Bankruptcy Code. At that time, the Company had indebtedness in
excess of $2.3 million and had 1,624,940 voting shares of common stock
outstanding. In July 1994, the Company's plan of reorganization under Chapter 11
(the Reorganization Plan) was confirmed.

At the time of the confirmation of the Reorganization Plan, all shares of
stock, options, and warrants outstanding were canceled. In addition, the
Reorganization Plan provided for the issuance of 100 shares of the Company's
reorganized common stock in exchange for waiver of certain unsecured claims
against the Company by its then, and current, CEO.

In addition, all administrative claims, priority claims, and allowed claims
in the administrative convenience class (generally, those under $200) were paid
in full. Unsecured creditors are to 3%receive payment of 50% of the gross
proceeds derivedroyalties received by the Company from certain licensees up to the amount of
their total liability, through the year 2000. However, the largest unsecured
creditor will receive payments of 50% of the gross royalties received by the
Company from the revenue from certain licensees until its claim is paid in full.
The remaining 50% of the gross royalties received by the Company from these
certain licensees was available to the Company to conduct its ongoing
operations. As of December 31, 1998, the Company does not expect to pay any
additional significant amounts under the Reorganization Plan. Accordingly, the
amounts are treated as included in the relief of debt as part of the bankruptcy
confirmed in 1994.

The Company believes that its royalty payment obligations under the
bankruptcy court order relate only to licenses in place as of July 11, 1994.
However, there is no assurance that the court will not interpret the obligation
of the Company to include making payments from royalties earned from subsequent
licenses or licenses that it may secure in the future, or that its current
technology will not be deemed derivative of its technology existing at July 11,
1994.

Consequently, there can be no assurance that the Company will not be
required to repay the creditors referenced in the bankruptcy proceedings to the
full amount of its liability of approximately $2,230,000. In addition, there is
no guarantee that a creditor will not attempt to assert a claim for royalties
from subsequent licenses, which could be costly and could have a material
adverse effect on the Company's business, financial condition, and/or results of
operations.

Common Stock

In January 1998, the CEO personally sold 440,016 shares of his stock to
various employees and directors of the Company at a price of $0.02, the then
fair market value of the stock, and in May and August, 193,238 additional shares
at $0.075. The ownership of these shares vest over approximately four years with
the CEO having the right to repurchase non-vested shares upon termination of
employment. In May 1998, the Company issued and sold 508,500 shares under the
Stock Grant Program, at $0.075 and granted 20,000 options, under Stock Option
Plan, at $0.075 to employees of the Company which also vest over a four year
period. The shares sold and options granted from March 1998 forward were
ascribed a fair market value of $1.00 per share, the price at which the Company
offered its shares through a private placement stock offering in September 1998.

The Company recognized $667,600 in deferred compensation expense associated
with the sale of the Units underwritten (includingabove securities, to be amortized over the vesting period
of the underlying securities.

F-12

GraphOn Corporation

Notes to Financial Statements (Continued)

6. Stockholders' Equity (Continued)

In accordance with APB Opinion No. 25, Accounting for Stock Issued to
Employees, the Company recorded, in General and Administrative expense, $101,600
of compensation costs for the year ended December 31, 1998 and $41,700 for the
three months period ended March 31, 1999.

In March 1998, the Company sold 500,000 shares of common stock for cash
proceeds of $25,000 to the Agent Affiliate, concurrent with the issuance of
convertible notes for $475,000. During 1998, the Company recognized interest
expenses of $475,000 relating to this transaction.

In July 1998, the Company's Board of Directors declared a 60,000 to 1 stock
split. All references to number of shares and per share data in the financial
statements have been adjusted to reflect the stock split on a retroactive basis.

In September 1998, the Company offered shares of its common stock through a
private placement stock offering (the Offering). The Offering established a
minimum and maximum offering of 2,500,000 and 4,500,000 shares of common stock,
respectively, at $1.00 per share, plus an additional 675,000 shares in the event
of over-subscriptions. As part of the Offering, the placement agent received
warrants to purchase 20,000 shares of common stock at $1.00 per share for each
100,000 shares sold through the Offering.

Pursuant to a Subscription Agreement, executed by each investor who
purchased shares of the Company's common stock in connection with the first
closing of the Offering (the First Closing Investors), each First Closing
Investor holds the right to purchase his pro rata portion of any securities
issued by the Company for cash at an amount equal to the price, or other
consideration, for which such securities were issued until such time as there is
an initial public offering of the Company's securities. Such preemptive rights
do not apply to any securities issued pursuant to options, warrants and rights
and option plans existing at the time of the first closing. The investors who
purchased common stock in connection with the second closing of the Offering, as
well as certain of the First Closing Investors who agreed to amend their rights,
hold the same right except that such right does not apply to securities issued
by the Company in connection with, or in consideration of, (i) the Company's
acquisition of another corporation or entity by consolidation, merger, purchase
of all or substantially all of the assets or other business combination in which
the Company is the surviving entity, provided such issuance is approved by a
majority of the Board of Directors or (ii) any equipment or real property lease,
loan, credit line, guaranty of indebtedness or acquisition of assets, other than
cash but including intellectual property or other intangible assets.

Additionally, in March 1998, the CEO and Executive Vice President of the
Company entered into a contingent sale arrangement with respect to the sale of
any Units subject3,500,000 shares of their common stock in the Company to the Underwriter's over-allotment option)Agent Affiliate
under non-recourse installment notes. Under the terms of the notes, $200,000 was
due and paid with the commencement of the Offering, with $800,000; $1,000,000;
and $1,500,000 being due and payable January 1999, July 1999 and January 2000,
respectively (Note 13). The notes bear interest at 6%, payable quarterly, and
are secured by the underlying pledged shares. The CEO and Executive Vice
President retained voting privilege on these shares until fully paid for, and
said shares revert back to the CEO and Executive Vice President in case of
default by the Agent Affiliate.

In December 1998, the Company issued 3,886,503 shares of common stock with
an ascribed value of $3,886,500, and granted warrants to purchase 388,650 shares
of common stock at $1.00 in exchange for certain fixed assets and technology.
The terms of this purchase agreement also require that the

F-13

GraphOn Corporation

Notes to Financial Statements (Continued)

6. Stockholders' Equity (Continued)

Company shall issue an additional 1,607,000 shares of common stock, for no
additional consideration, on June 30, 2000, if the Company at that date has not
completed an initial public offering of any of its equity securities or a merger
or sale of all, or substantially all, of its assets. Should these contingent
shares be issued, they will be valued at their fair market value at the time of
such issuance with a resulting charge to the statement of operations.

Stock Purchase Warrants

As of December 31, 1998, the following common stock warrants were issued
and outstanding:

Shares Subject Exercise Expiration
Issued with respect to: to Warrant Price Date
----------------------- -------------- -------- ------------

Convertible notes............................ 150,000 $1.00 (A)
Private placement............................ 639,800 $1.00 (A)
Purchased technology......................... 388,650 $1.00 12/2003
======= ===== =======

- --------------------

(A) The warrants issued with respect to the convertible notes and the private
placement expire upon earlier of three years after the closing date of a
merger (Note 13), three years after the closing date of an IPO, or January
2006.

Stock Grant Program

In July 1998, the Company adopted a stock grant program (Stock Grant
Program), which is restricted to employees, officers, and consultants of the
Company. The Company has authorized the issuance of up to 1,300,000 shares of
the Company's common stock in connection with the Stock Grant Program and the
Stock Option Plan, discussed below. In May 1999, the number of shares authorized
under the plan was increased by 2,700,000 shares to 4,000,000 shares.

Under the Stock Grant Program, eligible individuals may, at the Plan
Administrator's discretion, be issued shares of common stock directly, either
through (a) the purchase of shares at a price not less than 85% of the estimated
fair market value of the stock at the time of the issuance, or (b) as a bonus
for past services rendered. Ownership of such shares generally vest over a four
year period. During August 1998, the Company issued 508,500 shares under the
Stock Grant Program.

Stock Option Plan

In July 1998, the Company adopted a Stock Option Plan (The Plan). The Plan
is restricted to employees, officers, and consultants of the Company. Options
granted under the Plan generally vest over four years and are exercisable over
ten years. Non-satutory options are granted at prices not less than 85% of the
estimated fair value of the stock on the date of grant as determined by the
Board of Directors. Incentive options are granted at prices not less than 100%
of the estimated fair value of stock on the date of grant. However, options
granted to shareholders who own greater than 10% of the outstanding stock are
established at no less than 110% of the estimated fair value of the stock on the
date of grant.

F-14

No dealer, salespersonGraphOn Corporation

Notes to Financial Statements (Continued)

6. Stockholders' Equity (Continued)

A summary of status of the Company's Stock Option Plan as of December 31,
1998, and changes during the year then ended is presented in the following
table:

Options Outstanding
--------------------
Weighted-
Average
Exercise
Shares Price
-------- ---------

Balances, December 31, 1997..................................... -- $ --
Shares reserved................................................. 791,500 --
Granted......................................................... (20,000) 0.075
------- ---------
Balances, December 31, 1998..................................... 771,500 $0.075
======= =========
Exercisable at year-end......................................... 2,664 $0.075
======= =========

Weighted-average fair value of options granted during the period: $0.075
=========

During the three months ended March 31, 1999, the Company granted 748,500
stock options at an average exercise price of $0.85 per share, which represented
85% of the estimated fair market value of the stock.

The following table summarizes information about stock options outstanding
as of December 31, 1998:

Options Outstanding Options Exerccisable
- ---------------------------------------------------------------------------- --------------------------------
Weighted-
Average Weighted- Weighted-
Remaining Average Average
Range of Exercise Number Contractual Life Exercise Price Number Exercise Price
Price Outstanding (Years) per Share Exercisable per Share
- ------------------- ------------- ------------------ ----------------- ------------- -------------

$0.075 - $1.00 20,000 9.67 $0.075 2,664 $0.075

SFAS No. 123, Accounting for Stock-based Compensation, requires the Company
to provide pro forma information regarding net (loss) income and (loss) earnings
per share as if compensation cost for the Company's stock option plan had been
determined in accordance with the fair value based method prescribed in SFAS
No.123. The Company estimates the fair value of stock options at the grant date
by using the Black-Scholes option pricing-model with the following weighted
average assumptions used for grants in 1998: dividend yield of 0; expected
volatility of 112%; risk-free interest rate of 5.7%; and expected lives of three
years for all plan options. Under the accounting provisions of SFAS No. 123, the
Company's pro forma net loss would have been $2,137,900, and the basic net loss
per common share would have remained unchanged at $0.32.

7. Income Taxes

The provision for income taxes for the years ended December 31, 1998, 1997
and 1996 and for the three months ended March 31, 1999 and 1998 consist of
minimum state taxes.

F-15

GraphOn Corporation

Notes to Financial Statements (Continued)

7. Income Taxes (Continued)

The following summarizes the differences between income tax expense and the
amount computed applying the federal income tax rate of 34%:

December 31,
--------------------------------------
1998 1997 1996
-------- ----------- --------

Federal income tax at
statutory rate............................................................ $(599,400) $ 41,600 $(63,800)
State income taxes, net of
federal benefit........................................................... (102,400) 7,700 (11,500)
Utilization of net operating
loss carryforwards........................................................ -- (51,400) --
Tax benefit not currently
recognizable.............................................................. 697,700 -- 75,300
Other....................................................................... 4,900 3,000 800
--------- ----------- --------
Provision for income taxes.................................................. $ 800 $ 900 $ 800
========= =========== ========

Deferred income taxes and benefits result from temporary timing differences
in the recognition of certain expenses and income items for tax and financial
reporting purposes, as follows:

December 31,
----------------------
1998 1997
---------- ---------

Net operating loss carryforward.................................................. $ 1,038,800 $ 452,900
Tax credit carryforward.......................................................... 112,100 22,800
Capitalized software............................................................. (29,600) (17,200)
Depreciation and amortization.................................................... (6,000) (2,500)
Accrued compensation and benefits................................................ 37,500 4,200
Reserves not currently deductible................................................ 35,800 17,900
---------- ---------
Total deferred tax asset......................................................... 1,188,600 478,100
Valuation allowance (1,188,600) (478,100)
---------- ---------
Net deferred tax asset $ -- $ --
========== =========

The Company has net operating loss carryforwards available to reduce future
taxable income, if any, of approximately $2,780,800 for Federal income tax
purposes. The benefits from these carryforwards expire through 2018. As of
December 31, 1998, management believes it cannot be determined that it is more
likely than not that these carryforwards and its other deferred tax assets will
be realized, and accordingly, fully reserved for these deferred tax assets.

In 1998 the Company experienced a "change of ownership" as defined by the
provisions of the Tax Reform Act of 1986. As such, the Company's utilization of
its net operating loss carryforwards will be limited to approximately $400,000
per year until such carryforwards are fully utilized.

F-16

GraphOn Corporation

Notes to Financial Statements (Continued)

8. Concentration of Credit Risk

Financial instruments, which potentially subject the Company to
concentration of credit risk, consist principally of cash and cash equivalents,
investments and trade receivables. The Company places its cash and cash
equivalents with high quality financial institutions and, by policy, limits the
amounts of credit exposure to any one financial institution. Available-for-sale
securities are held in public companies for which there is a ready market.

The Company's accounts receivable are derived from many customers in
various industries. The Company believes any risk of accounting loss is
significantly reduced due to the diversity of its end-customers and geographic
sales areas. The Company performs credit evaluation of its customers' financial
condition whenever necessary, and generally does not require cash collateral or
any other person has been authorizedsecurity to give any
informationsupport customer receivables.

9. Major Customers

For the year ended December 31, 1998, three customers accounted for
approximately 29%, 21% and 17% of revenues, respectively with related accounts
receivable as of December 31, 1998 of $0, $500,000 and $0, respectively.

For the year ended December 31, 1997, one customer accounted for
approximately 70% of revenues, with related accounts receivable at December 31,
1997 of $62,500.

In 1996, no one customer accounted for greater than 10% of revenues.

10. Commitments

Operating Leases

In April 1995, the Company entered into an operating lease for its current
headquarters facility, which is renewable in one-year increments for ten years.
In June 1998, the Company entered into a three-year non-cancelable operating
lease for a facility in Washington. In December 1998, the Company entered into a
five-year operating lease for a facility in New Hampshire, which is cancelable
as of October 31, 2001.

The facility leases require the Company to pay certain maintenance and
operating expenses, such as taxes, insurance, and utilities. Rent expense for
the years ended December 31, 1998, 1997 and 1996 aggregated $48,300, $17,120 and
$14,900, respectively. Rent expense for the three months ended March 31, 1999
and 1998 aggregated $76,400 and $12,100, respectively.

Future minimum annual lease payments for these leases are as follows:

Year Ending December 31,
------------------------

1999.......................................................... $261,600
2000.......................................................... 256,900
2001.......................................................... 194,000
--------
$712,500
========

F-17

GraphOn Corporation

Notes to Financial Statements (Continued)

10. Commitments (Continued)

Royalty Agreements

The Company licenses essential components (Developed Technology) of its
core technology from three different parties (collectively, Software Developers)
to whom it pays royalties pursuant to three different exclusive license
agreements (Technology Agreements). Certain minor elements of the Company's
technology (Nonexclusive Technology) are also licensed from the Software
Developers pursuant to non-exclusive agreements (Nonexclusive Agreements). The
Technology Agreements and the Nonexclusive Agreements call for royalty payments
to the Software Developers. Such royalty payments are based on a percentage of
net revenues (Royalty Rate) received by the Company for sales of the Company's
products that contain the Developed Technology. The Royalty Rate is 4.8% and
2.9% for 1999 and 2000, respectively. The Company also holds an option to
purchase the Developed Technology, and to purchase a perpetual license to the
Nonexclusive Technology from the Software Developers, which is exercisable
beginning in December 2000, for an aggregate of $6,000 plus the difference
between royalties paid to date and certain minimum royalty payments. If the
Company does not exercise its option, the Royalty Rate would continue at 2.0%
with respect to the Developed Technology.

The Technology Agreements and the Nonexclusive Agreements also call for
lump sum payments by the Company in the event of a change in control
transaction, defined as a sale of all or to make any representations other than those contained in this
Prospectus, and, if givensubstantially all of the Company's
assets or made, such informationa merger or representations must not
be relied on as having been authorizedreorganization with another business entity after which
the shareholders of the Company hold 50% or less of the total equity or voting
power of the surviving entity. The payments are based upon a percentage of the
total consideration received by the Company or payable to its shareholders in
such a transaction (Transaction Rate). The Transaction Rate would be 4.8% and
2.9% if the change in control transaction occurs in 1999 or 2000, respectively.
Each of the Technology and Nonexclusive Agreements, unless terminated earlier
pursuant to the terms of the Agreements, will terminate on September 6, 2006
(Note 13).

11. Employee 401(k) Plan

In December 1998, the Company adopted a 401(k) Plan ("the Plan") to provide
retirement benefit for its employees. As allowed under Section 401(k) of the
Internal Revenue Code, the Plan provides tax-deferred salary deductions for
eligible employees.

Employees may contribute up to 15% of their annual compensation to the
Plan, limited to a maximum annual amount as set periodically by the Underwriter.
This ProspectusInternal
Revenue Service. The Company made no contributions to the Plan in 1998.

F-18

GraphOn Corporation

Notes to Financial Statements (Continued)

12. Supplemental Disclosure of Cash Flow Information

The following is supplemental disclosure for the statements of cash flows.

Years Ended December 31,
----------------------------------
1998 1997 1996
---------- -------- --------

Cash Paid:
Income taxes................................................................. $ 900 $ 800 $ 800
Interest..................................................................... $ 11,300 $ 2,100 $ --
Noncash Investing Activities:
Stock and warrants issued for
purchased technology and other
assets...................................................................... $3,886,500 $ -- $ --

Noncash Financing Activities:
Issuance of common stock for
convertible note payable.................................................... $ 200,000 $ -- $ --

13. Subsequent Events

In January 1999, the Company completed the third and final closing of the
Offering, in which it sold 1,963,868 shares of common stock at $1.00 per share,
for net proceeds of $1,708,600, and granted additional warrants to purchase
392,774 shares of common stock.

In January 1999, the convertible note payable for $475,000 to the Agent
Affiliate was retired from proceeds from the third closing of the Offering.

In January 1999, the CEO and Executive Vice President received $800,000 for
the sale of 800,000 shares of their common stock of the Company to the Agent
Affiliate.

In February 1999, the Company and its shareholders entered into a merger
agreement with Unity First Acquisition Corporation (UFAC), a publicly-traded
holding company in New York, under which GraphOn will exchange all its
outstanding common stock for UFAC shares at the rate of 0.5576 UFAC shares for
every 1.00 GraphOn shares. The transaction will be a forward merger, with UFAC
surviving the merger and changing its name to GraphOn Corporation. The merger is
expected to close in June 1999 and is subject to approval of the respective
shareholders of UFAC and GraphOn Corporation.

In March 1999, the Company entered into a non-binding agreement with the
Software Developers of the Technology Agreements (Note 10) whereby on the
successful consumation of the UFAC merger, the Company would pay the Software
Developers a lump sum of $520,400 in settlement of all future royalties due
under the Technology Agreements.

In May 1999, the Company granted 50,000 stock options at an average
exercise price of $3.26 per share, which represented the estimated fair market
value of the stock.

F-19

PART I--FINANCIAL INFORMATION

ITEM I Financial Statements

GRAPHON CORPORATION

BALANCE SHEETS

September 30, December 31,
1999 1998
------------- ------------
(Unaudited)

ASSETS
------
Current Assets:
Cash and cash equivalents....................... $ 2,795,200 $ 1,798,400
Accounts receivable, net of allowance for
doubtful accounts of $25,000 and $25,000....... 1,322,800 564,700
Available for sale securities................... 999,000 --
Prepaid expenses and other assets............... 554,100 32,100
----------- -----------
Total Current Assets........................ 5,671,100 2,395,200
----------- -----------
Property and Equipment, net....................... 548,200 423,300
Purchased Technology , net........................ 1,301,400 3,645,400
Capitalized Software, net......................... 231,500 74,200
Deferred Compensation Expense..................... 440,800 566,000
Other Assets...................................... 6,400 6,400
----------- -----------
$ 8,199,400 $ 7,110,500
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Convertible note payable........................ $ -- $ 475,000
Accounts payable................................ 382,000 115,700
Accrued expenses................................ 494,500 498,900
Deferred revenue................................ 75,400 112,600
----------- -----------
Total Current Liabilities................... 951,900 1,202,200
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.01 par value, 5,000 shares
authorized, no shares issued and outstanding... -- --
Common stock, $0.0001 par value, 20,000,000
shares authorized, 10,969,471 and 7,970,336
shares issued and outstanding.................. 1,100 800
Additional paid in capital...................... 15,399,800 8,430,700
Accumulated other comprehensive income........ 300 --
Accumulated deficit........................... (8,153,700) (2,523,200)
----------- -----------
Stockholders' Equity........................ 7,247,500 5,908,300
----------- -----------
$ 8,199,400 $ 7,110,500
=========== ===========

See accompanying summary of accounting policies and notes to financial
statements.

F-20

GRAPHON CORPORATION

STATEMENTS OF OPERATIONS

Nine Months Ended Three Months Ended
September 30, September 30,
------------------------ -----------------------
1999 1998 1999 1998
----------- ----------- ----------- ----------
(Unaudited)

Revenues
Product sales.............. $ 602,600 $ 447,700 $ 225,700 $ 207,400
Maintenance................ 131,900 76,300 36,900 28,400
OEM license................ 1,115,000 964,600 240,000 100,000
OEM license--related
party..................... 600,000 -- 600,000 --
Training................... -- 10,400 -- --
----------- ----------- ----------- ----------
Total Revenues......... 2,449,500 1,499,000 1,102,600 335,800
Cost of Revenues
Product sales.............. 10,400 20,900 3,600 5,100
Maintenance................ 28,200 15,000 9,400 5,000
OEM license................ 251,900 215,500 79,300 60,000
----------- ----------- ----------- ----------
Total Cost of
Revenues.............. 290,500 251,400 92,300 70,100
Gross Profit........... 2,159,000 1,247,600 1,010,300 265,700
----------- ----------- ----------- ----------
Operating Expenses:
Selling and marketing...... 2,359,200 860,000 783,800 335,600
General and
administrative............ 3,725,500 782,800 1,340,500 441,700
Research and development... 1,771,800 634,400 517,000 299,500
----------- ----------- ----------- ----------
Total Operating
Expenses.............. 7,856,500 2,277,200 2,641,300 1,076,800
----------- ----------- ----------- ----------
Loss From Operations....... (5,697,500) (1,029,600) (1,631,000) (811,100)
Other Income (Expense):
Interest and other
income.................. 76,900 8,800 49,900 1,700
Interest expense......... (9,100) (368,000) (1,700) (166,600)
----------- ----------- ----------- ----------
Loss Before Provision for
Income Taxes.............. (5,629,700) (1,388,800) (1,582,800) (976,000)
Provision for Income
Taxes..................... 800 800 -- --
----------- ----------- ----------- ----------
Net Loss................... $(5,630,500) $(1,389,600) $(1,582,800) $ (976,000)
=========== =========== =========== ==========
Basic and Diluted Loss per
Common Share.............. $ (0.59) $ (0.39) $ (0.15) $ (0.26)
=========== =========== =========== ==========
Weighted Average Common
Shares Outstanding........ 9,540,148 3,583,798 10,712,629 3,750,418
=========== =========== =========== ==========

See accompanying summary of accounting policies and notes to financial
statements.

F-21

GRAPHON CORPORATION

STATEMENTS OF CASH FLOWS

Nine Months Nine Months
Ended Ended
September 30, 1999 September 30, 1998
------------------ ------------------
(Unaudited)

Cash Flows From Operating Activities:
Net (loss) income....................... $(5,630,500) $(1,389,600)
Adjustments to reconcile net (loss)
income to net cash (used in) provided
by operating activities:
Depreciation and amortization......... 2,473,900 41,700
Loss on available-for-sale
securities........................... -- 16,500
Non-cash compensation expense......... 125,200 59,900
Interest expense...................... -- 323,100
Changes in operating assets and
liabilities:
Accounts receivable................. (758,100) 149,900
Available for sale securities....... (998,700) --
Prepaid expenses and other assets... (522,000) (31,600)
Accounts payable.................... 266,300 204,000
Accrued expenses.................... (4,400) 202,100
Deferred revenue.................... (37,200) (398,100)
----------- -----------
Net Cash Used In Operating
Activities....................... (5,085,500) (822,100)
----------- -----------
Cash Flows From Investing Activities:
Other assets............................ -- (4,500)
Capital expenditures.................... (412,100) (158,600)
----------- -----------
Net Cash Used In Investing
Activities....................... (412,100) (163,100)
----------- -----------
Cash Flows From Financing Activities:
Proceeds from convertible notes
payable................................ -- 775,000
Repayment of convertible notes payable.. (475,000) --
Net proceeds from issuance of common
stock.................................. 6,975,100 63,100
Purchase and retirement of common
stock.................................. (5,700) --
----------- -----------
Net Cash Provided By Financing
Activities....................... 6,494,400 838,100
----------- -----------
Net Increase (Decrease) in Cash and Cash
Equivalents............................ 996,800 (147,100)
Cash and Cash Equivalents, beginning of
period................................. 1,798,400 302,800
----------- -----------
Cash and Cash Equivalents, end of
period................................. $ 2,795,200 $ 155,700
=========== ===========

See accompanying summary of accounting policies and notes to financial
statements.

F-22

GRAPHON CORPORATION

STATEMENT OF EQUITY

Common Stock Unrealized
------------------ Additional Paid Gain on Accumulated
Shares Amount in Capital Securities Deficit Total
---------- ------ --------------- ----------- ----------- -----------

Balances, December 31,
1998................... 7,970,336 $ 800 $ 8,430,700 $ -- $(2,523,200) $ 5,908,300
Balance of information
is unaudited through
September 30,1999:
Proceeds from sale of
common stock.......... 62,525 -- 97,200 -- -- 97,200
Net proceeds from sale
of common stock, net
of offering costs of
$255,300.............. 1,095,053 100 1,708,500 -- -- 1,708,600
Repurchase and
retirement of common
stock................. (40,952) -- (5,700) -- -- (5,700)
Recapitalization of
company through
merger, net of merger
costs of $255,700..... 1,875,000 200 5,169,100 -- -- 5,169,300
Unrealized gain on
available for sale
securities............ -- -- -- 300 -- 300
Issuance of common
stock due to the
exercise of warrants.. 7,509 -- -- -- -- --
Net loss............... -- -- -- -- (5,630,500) (5,630,500)
---------- ------ ----------- ----- ----------- -----------
Balances, September 30,
1999.................. 10,969,471 $1,100 $15,399,800 $ 300 $(8,153,700) $ 7,247,500
========== ====== =========== ===== =========== ===========

F-23

GRAPHON CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. Merger with Unity First Acquisition Corp. and Basis of Presentation

On July 12, 1999, GraphOn Corporation, a California corporation ("GraphOn-
CA"), merged with and into Unity First Acquisition Corp., a Delaware
corporation ("Unity"). Unity, as the surviving entity to the merger and the
Registrant, then changed its name to GraphOn Corporation ("GraphOn"), and the
GraphOn-CA management team continued in their existing roles at GraphOn.
Pursuant to the merger, each outstanding share of GraphOn-CA common stock was
exchanged for 0.5576 shares of Unity common stock and each outstanding option
and warrant to purchase shares of GraphOn-CA common stock was exchanged for
0.5576 options or warrants to purchase shares of Unity common stock.
Additionally, GraphOn received $5,425,000 in cash which was placed into trust
upon Unity's initial public offering in November 1996 and released from trust
upon consummation of the merger. As of July 12, 1999, GraphOn-CA had
outstanding 16,296,559 shares of common stock. As a result of the merger, the
GraphOn-CA shareholders acquired approximately 9,086,961 shares of Unity common
stock, or approximately 82.9% of the then outstanding Unity common stock. The
merger was accounted for as a capital transaction which is equivalent to the
issuance of stock by GraphOn-CA for Unity's net monetary assets of
approximately $5,425,000, accompanied by a recapitalization of GraphOn-CA.

The unaudited historical financial statements of GraphOn-CA included herein
have been prepared in accordance with the instructions for Form 10-Q and,
therefore, do not include all information and footnotes necessary for a
complete presentation of GraphOn-CA's results of operations, financial position
and cash flows. We filed audited financial statements that included all
information and footnotes necessary for a complete presentation for each of the
years in the two-year period ended December 31, 1998 in the Unity Registration
Statement on Form S-4 filed on June 15, 1999.

The unaudited financial statements included herein reflect all adjustments
(which include only normal, recurring adjustments) which are, in the opinion of
management, necessary to state fairly the results for the three and nine months
ended September 30, 1999. The results for the three and nine months ended
September 30, 1999 are not necessarily indicative of the results expected for
the full fiscal year.

2. Earnings Per Share

Basic earnings per share is calculated using the weighted average number of
shares outstanding during the period. Dilutive earnings per share is computed
on the basis of the weighted average number of common shares outstanding plus
the dilutive effect of outstanding stock options and warrants using the
"treasury stock" method and are not included since they are antidilutive.

As noted above, in July 1999, GraphOn-CA merged with and into Unity. All
references to share and per-share data for all periods presented have been
adjusted to give effect to the .5576 exchange of GraphOn-CA stock (See Note 3).

3. Stockholders' Equity

In January 1999, GraphOn-CA completed the third and final closing of a
private placement offering, in which it sold 1,095,053 shares of its common
stock at $1.79 per share and granted warrants to purchase an additional 219,010
shares of common stock for net proceeds of $1,708,600.

In January 1999, a convertible note payable for $475,000 to Spencer Trask
Investors, an affiliate of GraphOn-CA, was retired from proceeds from the third
closing of the private placement offering.

In February 1999, GraphOn-CA sold 62,525 shares of its common stock and
warrants to purchase an additional 676 shares for gross proceeds of $97,200.

F-24

GRAPHON CORPORATION

NOTES TO FINANCIAL STATEMENTS--(Continued)

In July 1999, GraphOn-CA merged with and into Unity. As discussed above,
each share of GraphOn-CA common stock was exchanged for .5576 shares of Unity
common stock and each outstanding GraphOn-CA option and warrant was exchanged
for .5576 options and warrants of Unity. Additionally, GraphOn received
$5,425,000 in cash and the merger was accounted for as a capital transaction
giving effect to the 1,875,000 shares of Unity. All references to share and
per-share data for all periods presented have been adjusted to give effect to
this .5576 exchange of GraphOn-CA stock.

4. Recent Accounting Pronouncements

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 requires companies to
recognize all derivative contracts as either assets or liabilities in the
balance sheet and to measure them at fair value. If certain conditions are met,
a derivative may be specifically designated as a hedge, the objective of which
is to match the timing of gain or loss recognition on the hedging derivative
with the recognition of (i) the changes in the fair value of the hedged assets
or liability that are attributable to the hedged risk or (ii) the earnings
effect of the hedged forecasted transaction. For a derivative not designated as
a hedging instrument, the gain and loss is recognized in income in the period
of change. In June 1999, the FASB issued SFAS No. 137, "Accounting for
Derivative instruments and Hedging Activities--Deferring the Effective Date of
FASB Statement No. 133," which amends SFAS No. 133 to be effective for all
fiscal quarters of all fiscal years beginning after June 15, 2000.

Historically, the Company has not entered into derivative contracts either
to hedge existing risks or for speculative purposes. Accordingly, the Company
does not constituteexpect adoption of the new standard to have a material impact on the
Company's results of operations, financial position or cash flows.

5. Litigation

On October 4, 1999, Insignia Solutions plc, a British company with a
California subsidiary, filed a complaint against GraphOn Corporation in the
Superior Court of the State of California, Santa Clara County, alleging the
GraphOn intentionally disrupted Insignia's sale to Citrix Systems, Inc., on
February 5, 1998, of assets related to Insignia's NTRIGUE software product
line. The complaint alleges that, as a result of GraphOn's conduct in
connection with that sale of assets, Insignia was required by Citrix to place
$8.75 million in escrow to enable Citrix to deal with potential claims by
GraphOn of proprietary rights in the assets being sold. The complaint seeks
unspecified damages from GraphOn.

The complaint also names Citrix and its subsidiary in the United Kingdom
("Citrix UK") as defendants, alleging that these companies breached the
February 5, 1998 contract with Insignia. The complaint seeks compensatory
damages from Citrix related to that company's refusal to release purchase money
from escrow for payment to Insignia.

Insignia's California state court complaint makes reference to a declaratory
judgment lawsuit that Citrix filed against GraphOn, on November 23, 1998, in
the United States District Court for the Southern District of Florida, seeking
a declaration of Citrix's right to use software purchased from Insignia, free
and clear of any claim by GraphOn that such software may incorporate
proprietary information owned by GraphOn. On May 14, 1999, Citrix's Florida-
based lawsuit against GraphOn was dismissed for lack of subject matter
jurisdiction. Essentially, the Florida court held that GraphOn has not
threatened Citrix with litigation, and there is no existing dispute between
GraphOn and Citrix. Citrix has filed an offerappeal from this ruling, which is
presently pending.

At the request of Citrix and Insignia, GraphOn has agreed to sellparticipate in
mediation aimed at resolving the dispute. In light of that effort, the parties
to the California state court case have agreed to extend GraphOn's time to
respond to the complaint until early December. GraphOn has not yet filed an
answer or other responsive pleading in the California state court action, but
GraphOn presently intends to deny the principal allegations made by Insignia in
the complaint. GraphOn views the matter as a solicitation of an
offer to buy the Units offered hereby by anyone in any jurisdictiondispute between Citrix and
Insignia, in which such offer or solicitationGraphOn is not authorized or is unlawful. The delivery of
this Prospectus shall not, under any circumstances create any implication that
the information herein is correct as of any time subsequent to the date of the
Prospectus.
____________________

TABLE OF CONTENTS

Page
----
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . .
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management's Discussion and Analysis
of Financial Condition and Results
of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proposed Business. . . . . . . . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Principal Stockholders . . . . . . . . . . . . . . . . . . . . . . . .
Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Securities. . . . . . . . . . . . . . . . . . . . . . .
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Information . . . . . . . . . . . . . . . . . . . . . . . .
Index to Financial Statements. . . . . . . . . . . . . . . . . . . . F-1

--------------------

Until , 1996, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a Prospectus. This is in addition to the obligations of dealers to
deliver a Prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.

1,250,000 Units

UNITY FIRST ACQUISITION CORP.

____________________

PROSPECTUS
____________________

GKN SECURITIES

, 1996directly involved.

F-25

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. . . . . . . . . . Other Expenses of Issuance and Distribution

The following table sets forth various expenses, other than underwriting
discounts, which will be incurred in connection with the offering. Other than
thethis offering:

SEC registration fee, NASD filing fee and the non-accountable expense
allowance of GKN Securities Corp. (the "Underwriter"), amounts set forth below
are estimates:

SEC registration fee..............................................fee...................... $ 10,711
NASD filing fee .................................................. 3,606
Underwriter's nonaccountable
expense allowance . ........................................ 225,000*
Blue sky fees and expenses........................................ 25,0001,584.00

Printing and engraving expenses................................... 75,000expenses........... 12,500.00

Legal fees and expenses........................................... 65,000expenses................... 35,000.00

Accounting fees and expenses...................................... 42,000
Transfer and Warrant Agent fees................................... 3,500expenses.............. 10,000.00

Miscellaneous expenses............................................ 183
---------
$450,000
---------
---------

- --------
* Assumes no exercise of the Underwriter's over-allotment option.expenses.................... 916.00
----------
Total $60,000.00
==========

Item 14. Indemnification of Directors and Officers

Article SEVENTH of the Certificate of Incorporation of Unity First
Acquisition Corp. ("Registrant") provides with respect to the indemnification of
directors and officers that Registrant shall indemnify to the fullest extent
permitted by Sections 102(b)(7) andSection 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as amendedwell as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee of or agent to the Registrant. The
statute provides that it is not exclusive of other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise. The Registrant's by-laws
provides for indemnification by the Registrant of any director or officer (as
such term is defined in the by-laws) of the Registrant who is or was a director
of any of its subsidiaries, or, at the request of the Registrant, is or was
serving as a director or officer of, or in any other capacity for, any other
enterprise, to the fullest extent permitted by law. The by-laws also provide
that the Registrant shall advance expenses to a director or officer and, if
reimbursement of such expenses is demanded in advance of the final disposition
of the matter with respect to which such demand is being made, upon receipt of
an undertaking by or on behalf of such director or officer to repay such amount
if it is ultimately determined that the director or

II-1

officer is not entitled to be indemnified by the Registrant. To the extent
authorized from time to time each person that such Sections grantby the board of directors of the Registrant, the
powerRegistrant may provide to indemnify. Article SEVENTHany one or more employees of the CertificateRegistrant, one or
more officers, employees and other agents of Incorporationany subsidiary or one or more
directors, officers, employees and other agents of any other enterprise, rights
of indemnification and to receive payment or reimbursement of expenses,
including attorneys' fees, that are similar to the rights conferred in the by-
laws of the Registrant also provideson directors and officers of the Registrant or any
subsidiary or other enterprise. The by-laws do not limit the power of the
Registrant or its board of directors to provide other indemnification and
expense reimbursement rights to directors, officers, employees, agents and other
persons otherwise than pursuant to the by-laws. The Registrant intends to enter
into agreements with certain directors, officers and employees who are asked to
serve in specified capacities at subsidiaries and other entities.

Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that noa director of
the corporation shall not be personally liable to the corporation or
any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except with respect to (1) afor liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (2)(ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3)
liability under Section 174(iii) for
payments of the Delaware General Corporation Lawunlawful dividends or (4) aunlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit, it
beingbenefit. The Registrant's certificate of incorporation provides for such
limitation of liability.

The Registrant maintains policies of insurance under which its directors
and officers are insured, within the intentionlimits and subject to the limitations of
the foregoing provisionpolicies, against certain expenses in connection with the defense of, and
certain liabilities which might be imposed as a result of, actions, suits or
proceedings to eliminate the liabilitywhich they are parties by reason of the
corporation'sbeing or having been such
directors to the corporation or its stockholders to the fullest
extent permitted by

Section 102(b)(7) of Delaware General Corporation Law, as amended from time to
time.

Reference is made to Section 5 of the Underwriting Agreement, which
provides for indemnification of the officers and directors of Registrant
under certain circumstances.officers.

Item 15. Recent Sales of Unregistered Securities

The following sets forth information relating to all securities of
Registrant sold by it since May 30, 1996,On July 12, 1999, the date of Registrant's inception:

CONSIDE-
DATE OF NUMBER OF RATION
NAME ISSUANCE SHARES PER SHARE
- ---- -------- ---------- ---------

Lawrence Burstein May 30,1996 150,000 $.0001

Unity Venture
Capital Associates Ltd. May 30, 1996 25,000 $.0001

Cowen & Co., as
Custodian for
Stanley Hollander
IRA May 30, 1996 30,000 $.0001

Jerome Baron May 30, 1996 12,000 $.0001

Murdoch & Company May 30, 1996 30,000 $.0001

Cricket Services Ltd. May 30, 1996 39,000 $.0001

Richard Kress &
Cheryl Kress JTWROS May 30, 1996 4,500 $.0001

Stephen Verchick May 30, 1996 31,000 $.0001

Richard Braver May 30, 1996 4,500 $.0001

Dan Brecher IRA/RO May 30, 1996 10,500 $.0001

Barry Ridings May 30, 1996 6,000 $.0001

Carl L. Norton May 30, 1996 9,000 $.0001

Financiera e
Inversionista
Salles, S.A. May 30, 1996 12,000 $.0001

II-2

Ian Barnett May 30, 1996 4,500 $.0001

Henry Rothman May 30, 1996 6,000 $.0001

Donald Rabinovitch May 30, 1996 5,250 $.0001

David Vozick May 30, 1996 5,250 $.0001

Tarzana Associates May 30, 1996 5,000 $.0001

Jonathan Rothschild May 30, 1996 1,500 $.0001

Equity Interest Inc. May 30, 1996 1,500 $.0001

Domaco Venture
Capital Fund May 30, 1996 1,500 $.0001

KGM Associates May 30, 1996 7,000 $.0001

Sagres Group Ltd. May 30, 1996 6,000 $.0001

Ronald Koenig May 30, 1996 30,000 $.0001

Heptagon Investments
Ltd. May 30, 1996 75,000 $.0001

Jay M. Haft May 30, 1996 10,500 $.0001

Ira Roxland May 30, 1996 6,000 $.0001

Denis Frelinghuysen May 30, 1996 3,000 $.0001

Steven Millner May 30, 1996 15,000 $.0001

Norman Leben May 30, 1996 15,000 $.0001

Heptagon Capital
Management, Inc. May 30, 1996 1,500 $.0001

Michael Karfunkel May 30, 1996 31,000 $.0001

George Karfunkel May 30, 1996 31,000 $.0001

On May 30, 1996, Registrant issued 58,334, 58,333, 58,333 and 25,000to Spencer Trask 250,000 Class A
and Class B Warrants to Lawrence Burstein, Norman Leben, John Cattier and
Barry Ridings, respectively,common stock purchase warrants exercisable at $5.50 per share into 250,000
shares of common stock in consideration for futureconsulting services performed in
connection with the merger of GraphOn Corporation, a California corporation,
with and into the Registrant that was consummated on that date.

On October 14, 1999, the Registrant issued to be rendered
by such persons on behalfSuperTech Holdings Ltd.
common stock purchase warrants exercisable at $8.50 per share into 300,000
shares of Registrant.

Exemptioncommon stock in consideration for consulting services related to the
generation of business opportunities for the Registrant in the People's Republic
of China.

II-2

Each of these transactions were exempt from registration under the
Securities Act of 1933 as amended
(the "Securities Act"), is claimed forby reason of the salesprovisions of Common Stock referred to
above in reliance upon the exemption afforded by Section 4(2) of the Securities
Act for transactions not

II-3

involving a public offering. Each certificate evidencing such shares of Common
Stock bears an appropriate restrictive legend and "stop transfer" orders are
maintained on Registrant's stock transfer records thereagainst. None of these
sales involved participation by an underwriter or a broker-dealer.thereof.

Item 16.21. Exhibits and Financial Statement SchedulesSchedules.

(a) Exhibits

The following is a list of Exhibitsexhibits are filed herewith as part of thethis Registration Statement:

1.1 FormExhibit Description of UnderwritingExhibit
Number ----------------------
- -------

2.1 Agreement and Plan of Merger and Reorganization dated as of February 1,
1999, between Registrant and the UnderwriterGraphOn Corporation, a California
corporation(1)
3.1 Amended and Restated Certificate of Incorporation of RegistrantRegistrant(1)
3.2 By-lawsAmended and Restated Bylaws of Registrant

4.1*Registrant(1)
4.1 Form of certificate evidencing shares of Common Stock

4.2*common stock of Registrant(2)
4.2 Form of certificate evidencing Class A Redeemable Warrants 4.3*of
Registrant(2)
4.3 Form of certificate evidencingevidecing Class B Redeemable Warrants of
Registrant(2)
4.4 Form of Unit Purchase OptionWarrant Agreement dated November 12, 1996 between Registrant and the UnderwriterGKN
Securities Corp. and Gaines, Berland, Inc.(2)
4.5 Form ofRedeemable Warrant Agreement dated November 12, 1996 between Registrant
and American Stock Transfer & Trust Company, as escrow agent

5.1*Company(2)
4.6 Registration Rights Agreement dated October 28, 1998 between
Registrant, Spencer Trask Investors, Walter Keller and the investors
purchasing units in Registrant's private placement(1)
4.7 Amendment to Registration Rights Agreement(1)
4.8 Amendment to Registration Rights Agreement(1)
4.9 Common Stock Purchase Warrant dated October 14, 1999 issued to
SuperTech Holdings Limited
5.1 Opinion of Parker Duryee RosoffCooperman Levitt Winikoff Lester & Haft A Professional CorporationNewman, P.C.
10.1 1996 Stock Option Plan 10.2* Form of TrustRegistrant(2)
10.2 1998 Stock Option/Stock Issuance Plan of Registrant(1)
10.3 Placement Agency Agreement by and between Registrant and [ ]

10.3 FormSpencer Trask
Securities, Inc., dated as of Insider's LetterSeptember 2, 1998(1)
10.4 Form of EscrowAsset Purchase Agreement by and among Registrant, Lawrence Burstein,
John Cattier, Cricket Services, Ltd., Barry Ridings, Norman Leben,
Unity Venture Capital Associates Ltd. ("Unity")Corel Corporation,
Corel Corporation Limited and American Stock
Transfer & Trust Company

II-4

10.5 General and Administrative Services Agreement,Corel, Inc. (collectively, "Corel"),
dated as of May 30,
1996,December 18, 1998(1)

II-3

10.5 Securities Purchase Agreement by and among Registrant and Corel, dated
as of December 18, 1998(1)
10.6 Standard Industrial Lease between Registrant and UnityMildred K. Dibona,
dated April 14, 1995, as amended on October 2, 1998(1)
10.7 Hidden Valley Office Park Lease Agreement between Registrant and ASA
Properties, Inc., dated June 5, 1998(1)
10.8 Lease Agreement between Corel Inc. and CML Realty Corp., dated
September, 1998 and assumed by Registrant on December 31, 1998(1)
10.9 Consulting Agreement dated October 14, 1999 between Registrant and
SuperTech Holdings Limited
23.1 Consent of Arthur AndersenBDO Seidman, LLP
23.2*23.2 Consent of Parker Duryee RosoffCooperman Levitt Winikoff Lester & Haft (to be includedNewman, P.C. (included in
Exhibit 5.1)
24.1 Power of Attorney (included on the signature pageSignature Page of Part II of this
Registration Statement)

- -----------
* To be___________
(1) Incorporated by reference from Registrant's Form S-4, file number 333-
76333, filed with the SEC on April 15, 1999.

(2) Incorporated by Amendment to this Registration Statement.reference from Registrant's Form S-1, file number 333-
11165, filed with the SEC on August 30, 1996.

(b) Financial Statement Schedules.

Financial statement schedules are
omitted because the conditions requiring their filing do not exist or the
information required thereby is included in the financial statements filed,
including the notes thereto.None.

Item 17. Undertakings

RegistrantThe undersigned registrant hereby undertakes:

(1) That for purposes of determining any liability under the Securities
Act, the information omitted from the form of Prospectusprospectus filed as part of this
Registration Statementregistration statement in reliance upon Rule 430A and contained in a form of
Prospectusprospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this Registration Statementregistration statement as
of the time it was declared effective.

(2) That for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new

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registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:registration statement:

(a) To include any Prospectusprospectus required by Section

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10(a)(3) of the
Securities Act;

(b) To reflect in the Prospectusprospectus any facts or events arising after
the effective date of the Registration Statementregistration statement (or the most recent post-effectivepost-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in "Calculation of Registration Statement;Fee" table in the
effective registration statement;

(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statementregistration statement or any
material change to such information in the Registration Statement.registration statement.

(4) That for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(5) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
thethis offering.

(5)(6) To provide to the Representativerepresentatives at the closing specified in the
Underwriting Agreement,underwriting agreement, certificates in such denominations and registered in
such names as required by the Representativerepresentatives to permit prompt delivery to each
purchaser.

(6)(7) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Registrant pursuant to Item 14 of this Part II to the Registration Statement,registration statement, or
otherwise, Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act, and is, therefore, unenforceable. In the event that a
claim for

II-5

indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against the public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York,Campbell, State of
New
York,California, on the 29th day of August, 1996.

UNITY FIRST ACQUISITION CORP.December 21, 1999.

GRAPHON CORPORATION

By: /s/ LAWERENCE BURSTEIN
------------------------
Lawrence BursteinWalter Keller
-------------------------------------------
Walter Keller, President

POWER OF ATTORNEY

KNOW ALL MENPERSONS BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Lawrence BursteinWalter Keller and Norman Leben, and
each of them, with full power to act without the other, hisEdmund Becmer as such person's
true and lawful attorney-in-fact and agent, acting alone, with full powerpowers of
substitution and resubstitutionrevocation, for himsuch person and in hissuch person's name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration
Statement,registration statement and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-factattorney-in-fact and
agents, and each of them,agent, acting alone, full power and authority to do and perform each and every
act and thing requisite orand necessary to be done, in and about the premises, as fully to all intents and
purposes as hesuch person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-factattorney-in-fact and agents or any of them, or theiragent, acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
__________________

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:

SIGNATURE TITLE DATE
--------- ----- ----

/s/ LAWERENCE BURSTEIN President, Director,
- ---------------------- Principal Executive
Lawrence Burstein Officer August 29, 1996

Secretary, Director,
Principal Financial
/s/ NORMAN LEBEN and Accounting Officer August 29, 1996
- ----------------------
Norman Leben

- ----------------------
John Cattier Director

/s/ BARRY RIDINGS
- ---------------------- Director August 29, 1996
Barry Ridings

indicated.

Signature Title Date
--------- ----- ----

/s/ Robert Dilworth Chairman of the Board December 21, 1999
- -------------------------
Robert Dilworth

/s/ Walter Keller President (Principal Executive Officer) December 21, 1999
- ------------------------- and Director
Walter Keller

/s/ Edmund Becmer Chief Financial Officer (Principal December 21, 1999
- ------------------------- Financial and Accounting Officer)
Edmund Becmer

/s/ Robin Ford Executive Vice President, December 21, 1999
- ------------------------- Marketing and Sales
Robin Ford and Director

/s/ Lawrence Burstein Director December 21, 1999
- -------------------------
Lawrence Burstein

/s/ August P. Klein Director December 21, 1999
- -------------------------
August P. Klein

_________________________ Director
Michael P. O'Reilly

_________________________ Director
Marshall C. Phelps, Jr.

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