<PAGE>

    As filed with the Securities and Exchange Commission on July 29, 1999.
                                                    Registration No. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

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

                                  Viador Inc.
   (Exact Name of Registrant as Specified in its Certificate of Incorporation)

<TABLE>
<CAPTION>
            Delaware                           7372                        94-3234636
 <S>                              <C>                            <C>
  (State or Other Jurisdiction
               of                  (Primary Standard Industrial         (I.R.S. Employer
 Incorporation or Organization)    Classification Code Number)       Identification Number)
</TABLE>

                               167 Second Avenue
                              San Mateo, CA 94401
                                (650) 685-3000
  (Address, Including Zip Code, and Telephone Number, Including Area Code, of
                 the Registrant's Principal Executive Offices)

                                 STAN X. WANG
                     President and Chief Executive Officer
                                  VIADOR INC.
                               167 Second Avenue
                              San Mateo, CA 94401
                                (650) 685-3000
  (Name and Address, Including Zip Code, and Telephone Number, Including Area
                          Code, of Agent for Service)

                                  Copies to:
<TABLE>
<S>                                            <C>
             CURTIS L. MO, ESQ.                           GREGORY K. MILLER, ESQ.
           RICHARD C. LESKA, ESQ.                       ANDREW S. WILLIAMSON, ESQ.
            J. OMAR MAHMUD, ESQ.                             LATHAM & WATKINS
       BROBECK, PHLEGER & HARRISON LLP                     505 Montgomery Street
            Two Embarcadero Place                               Suite 1900
               2200 Geng Road                         San Francisco, California 94111
      Palo Alto, California 94303-0913                        (415) 391-0600
               (650) 424-0160                               Fax (415) 395-8095
             Fax (650) 496-2885
</TABLE>

   Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
   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, check the following box. [_]
   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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(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,
check the following box. [_]

                        CALCULATION OF REGISTRATION FEE
<TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<CAPTION>
                                             Proposed Maximum
           Title of Each Class of                Aggregate         Amount of
        Securities to be Registered          Offering Price(1)  Registration Fee
--------------------------------------------------------------------------------
<S>                                          <C>                <C>
Common Stock, $0.001 par value.............     $46,000,000        $12,788.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee
    pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

   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 that 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 such Section
8(a), may determine.

-------------------------------------------------------------------------------
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<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the     +
+Securities and Exchange Commission is effective. This prospectus is not an    +
+offer to sell these securities and we are not soliciting an offer to buy      +
+these securities in any state where the offer or sale is not permitted.       +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                  SUBJECT TO COMPLETION, DATED          , 1999

PRELIMINARY PROSPECTUS

                                [LOGO OF VIADOR]

                                       Shares

                                  Viador Inc.

                                  Common Stock

                                  -----------

This is an initial public offering of        shares of our common stock. We are
selling all of the shares of common stock offered under this prospectus.

There is currently no public market for our shares. We intend to apply to have
our common stock approved for listing on the Nasdaq National Market under the
symbol "VIAD."

See "Risk Factors" beginning on page 5 to read about certain risks that you
should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.

                                  -----------

<TABLE>
<CAPTION>
                                                                   Per
                                                                  Share  Total
                                                                  ------ ------
<S>                                                               <C>    <C>
Public offering price............................................ $      $
Underwriting discounts and commissions........................... $      $
Proceeds, before expenses, to us................................. $      $
</TABLE>

                                  -----------

The underwriters may, under certain circumstances, purchase up to an additional
           shares of common stock from us at the initial public offering price
less the underwriting discount, solely to cover over-allotments.

The underwriters are severally underwriting the shares being offered. The
underwriters expect to deliver the shares against payment in New York, New York
on or about           , 1999.

                                  -----------

Bear, Stearns & Co. Inc.

                               CIBC World Markets

                                                      U.S. Bancorp Piper Jaffray

                The date of this prospectus is           , 1999
<PAGE>

                              [Inside cover page]



 [A graphic depicting the components of the Viador E-Portal Suite and how they
                                work together.]
<PAGE>

                               PROSPECTUS SUMMARY

   This summary contains basic information about us and this offering. Because
it is a summary, it does not contain all of the information that you should
consider before investing. You should read the entire prospectus carefully,
including the section entitled "Risk Factors" and our financial statements and
the notes thereto before making an investment decision. In this prospectus,
"Viador", "we", "us", and "our" refers to Viador Inc., but not to the
underwriters listed in this prospectus.

                                  VIADOR INC.

Our Business

   We are one of the first providers of internet software that enables
businesses to create enterprise information portals. An enterprise information
portal provides users with a personalized single point of access to an
organization's electronic information. This is similar to popular consumer
internet portals that provide access to the world wide web. We believe the
Viador E-Portal Suite offers a comprehensive and integrated enterprise
information portal that gives users a quick and easy way to organize, search
for and access up-to-the-minute information from a variety of enterprise data
sources. Our software is specifically designed for the web and works with a
customer's existing hardware and software systems, without the need for
additional technology expenditures. It provides a highly adaptable platform for
the management and sharing of information on a secure and cost-effective basis
that can accommodate significant increases in the number of users and amount of
information. In addition, our software enables users to securely deliver
information over the internet to facilitate e-business. As more users
contribute increasing amounts of information to the portal, we believe our
customers and their users are able to realize greater productivity and
efficiency in their businesses. Our customers include Charles Schwab, CIBC,
Citibank, IBM, Mitsui, Sprint and Xerox.

Our Market Opportunity

   In today's highly competitive environment, business decision-makers need
quick access to relevant information. However, the large and growing quantity
of information makes it difficult to identify and utilize relevant information.
In addition, there is a rapidly growing variety of technologies used for
creating, storing and organizing information. These include many different
hardware platforms--such as mainframe computers and client/server network
systems requiring the use of several access terminals and security protocols--
and different software applications--such as database, sales force automation,
client relationship management, intranet and document management systems and
enterprise resource planning software. Many of these hardware platforms and
software applications were developed independently and do not easily work
together. As a result, it is increasingly difficult and time consuming for
users to gain access to all relevant information for decision- making.

   To address these problems, we have developed the Viador E-Portal Suite,
which offers the following benefits:

  .  Single Access Point for All Enterprise Information. Our software
     provides a single access point to data from multiple sources within and
     outside the company.

  .  Adaptable Web-Based Architecture. In contrast to existing solutions, our
     software architecture is designed for the internet and can accommodate
     significant increases in the number of users and amount of information.

                                       1
<PAGE>


  .  Customized and Personalized Information. We address the information
     overload problem by helping users locate and retrieve the most pertinent
     business information. This capability increases the efficiency of
     information use by our customers' employees.

  .  Combines Ease of Use with Sophisticated Functionality.  Our browser
     interface combines the ease of use of popular consumer internet portals
     with a full range of sophisticated search and analysis functionality.

  .  Builds Upon Customers' Existing Investments in Information
     Technology. Because most businesses operate in a diverse computing
     environment, our products are designed to interact with and access a
     broad range of software platforms and products.

  .  Ease of Implementation. The Viador E-Portal Suite is designed to be
     implemented rapidly over the web using our customers' existing
     information technology.

  .  Secure and Selective Access. Our security features permit customers to
     become extended enterprises that share confidential information rapidly
     over the internet with a large number of geographically distributed
     offices, employees, customers, suppliers and partners.

Our Strategy

   Our strategy is to be the leading provider of enterprise information portal
software solutions. We believe that the most effective way to achieve our goal
is to continue to improve our products and to significantly grow our direct
sales organization to expand coverage and penetration of large enterprise
opportunities. As a complement to our internal sales, marketing and development
efforts, we intend to continue to develop strategic relationships with
companies that are at the forefront of e-business technology.

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

   We were incorporated in the State of California as Infospace, Inc. on
December 4, 1995 and changed our name to Viador Inc. on January 28, 1999. Our
principal headquarters are located at 167 Second Avenue, San Mateo, California
94401, and our telephone number is (650) 685-3000. Information contained on our
web site is not a part of this prospectus.

   Viador E-Portal Suite(TM) and the Viador name and logo and the names of
products and services offered by Viador (including those referred to in
"Business") are trademarks, registered trademarks, service marks or registered
service marks of Viador. This prospectus also includes product names, trade
names and trademarks of other companies.

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

   Unless we indicate otherwise, all information in this prospectus assumes:

  .  the reincorporation of Viador in Delaware at or prior to the
     consummation of this offering;

  .  the conversion of each outstanding share of our convertible preferred
     stock into common stock immediately prior to the consummation of this
     offering;

  .  the exercise of outstanding warrants to purchase 75,001 shares of our
     common stock at an exercise price of $0.72 per share, the exercise of
     outstanding warrants to purchase 5,834 shares of our common stock at an
     exercise price of $0.24 per share and the exercise of outstanding
     warrants to purchase 9,615 shares of our Series C Preferred Stock at an
     exercise price of $2.434 per share, upon the consummation of this
     offering;

  .  no exercise of the underwriters' over-allotment option; and

  .  a 1 for 2.4 reverse stock split of all our outstanding shares of capital
     stock to be effected immediately prior to the completion of this
     offering.

                                       2
<PAGE>


                                  The Offering

<TABLE>
<S>                                         <C>
Common stock being offered.................               shares
Common stock outstanding after this                       shares
 offering..................................
Use of proceeds............................ We plan to use the net proceeds from this
                                            offering to fund operating losses, working
                                            capital needs and capital expenditures
                                            expected to be incurred in connection with
                                            our operations.
Proposed Nasdaq National Market symbol..... VIAD
</TABLE>

   The common stock outstanding after this offering is based on the number of
shares outstanding as of
June 30, 1999, and excludes:

  .  3,287,155 shares of common stock issuable upon exercise of outstanding
     options with a weighted average exercise price of $0.74 per share;

  .  12,292,000 shares reserved for issuance under our 1999 Stock Incentive
     Plan; and

  .  300,000 shares reserved for issuance under our 1999 Employee Stock
     Purchase Plan.

                                       3
<PAGE>

                             SUMMARY FINANCIAL DATA
                     (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                Six Months
                                Years Ended December 31,      Ended June 30,
                              ------------------------------  ----------------
                              1995   1996    1997     1998     1998     1999
                              ----- ------  -------  -------  -------  -------
                                                                (unaudited)
<S>                           <C>   <C>     <C>      <C>      <C>      <C>
Statements of Operations
 Data:
Revenue...................... $  80 $  997  $ 1,582  $ 3,825  $ 1,754  $ 3,290
Cost of revenue..............    10    314      903    1,387      640      874
                              ----- ------  -------  -------  -------  -------
Gross profit.................    70    683      679    2,438    1,114    2,416
Operating expenses...........    34    847    4,089    8,586    3,381    7,793
                              ----- ------  -------  -------  -------  -------
Operating income (loss)......    36   (164)  (3,410)  (6,148)  (2,267)  (5,377)
Interest income (expense),
 net.........................   --      10       62      (63)      (2)     116
                              ----- ------  -------  -------  -------  -------
Net income (loss)............    36 $ (154) $(3,348) $(6,211) $(2,269) $(5,261)
                              ===== ======  =======  =======  =======  =======
Basic and diluted net loss
 per share................... $0.02 $(0.08) $ (1.34) $ (1.82) $ (0.71) $ (1.28)
                              ===== ======  =======  =======  =======  =======
Weighted average shares used
 in computing basic and
 diluted net loss per share.. 1,563  1,993    2,495    3,416    3,177    4,126
</TABLE>

<TABLE>
<CAPTION>
                                                                June 30, 1999
                                                             -------------------
                                                                      Pro Forma
                                                             Actual  As Adjusted
                                                             ------- -----------
                                                               (in thousands)
<S>                                                          <C>     <C>
Balance Sheet Data:
Cash and cash equivalents................................... $14,259   $
Working capital.............................................  12,169
Total assets................................................  18,869
Total stockholders' equity .................................  13,284
</TABLE>

  The above balance sheet data is set forth:

  .  on an actual basis; and

  .  on a pro forma as adjusted basis assuming the conversion of all
     outstanding shares of convertible preferred stock into common stock and
     the exercise of outstanding warrants to purchase 75,001 shares of common
     stock at an exercise price of $0.72 per share, the exercise of
     outstanding warrants to purchase 5,834 shares of common stock at an
     exercise price of $0.24 per share and the exercise of outstanding
     warrants to purchase 9,615 shares of Series C Preferred Stock at an
     exercise price of $2.434 per share upon the consummation of this
     offering, as adjusted to reflect the sale of          shares of common
     stock by Viador at an assumed initial public offering price of $
     per share and after deducting the underwriting discounts and commissions
     and estimated offering expenses.


                                       4
<PAGE>

                                  RISK FACTORS

   An investment in our shares is extremely risky. This section describes some,
but not all, of the risk factors involved in purchasing our common stock. You
should carefully consider the following factors, in addition to the other
information presented in this prospectus, in evaluating us and our business.
Any of the following risks, as well as other risks we have not yet identified
or which we believe are not material, could seriously harm our business and
cause the trading price of our common stock to decline which could cause you to
lose all or part of your investment.

                            Risks Related to Viador

We have a short operating history, have incurred operating losses since our
inception and expect future operating losses.

   We were founded in 1995, and began offering software products in the third
quarter of 1996. Our primary product, the Viador E-Portal Suite, was first
shipped in the first quarter of 1999. From inception, we have experienced
operating losses, negative cash flows from operations and net losses in each
quarterly and annual period. As of June 30, 1999, we had an accumulated deficit
of approximately $14.8 million. The revenue and income potential of our
business and market is unproven, and our limited operating history makes it
difficult to evaluate us and our prospects.

   Currently, we anticipate making significant investments in our sales and
marketing programs, personnel recruitment, product development and
infrastructure. Therefore, we believe that we will continue to experience
significant losses on a quarterly and annual basis for the foreseeable future.
You must consider us and our prospects in light of the risks and difficulties
encountered by companies in the early stage of development, particularly
companies in new and rapidly evolving markets. Our ability to address these
risks depends on a number of factors which include our ability to:

  .  provide products and services that are reliable, cost-effective and able
     to accommodate significant increases in the number of users and amount
     of information;

  .  market our products and brand name effectively;

  .  continue to grow our infrastructure to accommodate new developments in
     the enterprise information portal software market and increased sales;

  .  hire, retain and motivate qualified personnel; and

  .  respond to competition.

   We may not be successful in meeting these challenges and addressing these
risks and uncertainties. If we are unable to do so, our business will not be
successful and your investment in our capital stock will decline in value.

   Although we have experienced growth in revenue in recent periods, this
growth rate may not be indicative of future operating results. We may never be
able to achieve or sustain profitability.

We cannot accurately predict the size of our market and widespread acceptance
of our products and services is uncertain.

   The market for enterprise information portal software is newly emerging and
there can be no assurance that it will grow or that, even if the market does
grow, customers will adopt our products. Accordingly, we cannot accurately
estimate the size of our market or the potential demand for our products and
services. We believe that market acceptance depends principally on our:

  .  marketing strategy and efforts;

                                       5
<PAGE>

  .  product and service differentiation and quality;

  .  customer support;

  .  distribution and pricing strategies as compared to our competitors;

  .  industry reputation; and

  .  general economic conditions.

   Some of the foregoing factors are beyond our control. If our customer base
does not expand, our business, prospects, results of operations and financial
condition will be materially adversely affected.

We rely heavily on revenue related to the Viador E-Portal Suite.

   We generate much of our revenue from licenses and services related to the
products comprising the Viador E-Portal Suite. We expect that these products
will continue to account for a large portion of our revenue for the foreseeable
future. Our future financial performance will depend on the successful
development, introduction and customer acceptance of new and enhanced versions
of our products and our business could be harmed if we fail to deliver the
enhancements to our products that customers want.

   Our services consist of maintenance, support, consulting and implementation.
Service revenue represented 47% and 40% of total revenue for 1997 and 1998,
respectively, and 35% of total revenue for the six months ended June 30, 1998
and June 30, 1999. We anticipate that service revenue will continue to
represent a significant percentage of total revenue. To a large degree, the
level of service revenue is dependent upon sales of the Viador E-Portal Suite,
the renewal of maintenance contracts by our installed customer base and the use
of our consulting services by clients. If service revenue is less than
anticipated, our operating results could be materially adversely affected. Our
ability to increase our service revenue will depend in large part on our
ability to increase the scale of our service organization, including our
ability to recruit and train a sufficient number of qualified service
representatives. There can be no assurance that we will be able to successfully
expand our service organization, which could materially adversely affect our
business, prospects, operating results and financial condition.

There are many factors beyond our control which may cause fluctuations in our
quarterly operating results.

   We expect to experience significant fluctuations in our future results of
operations due to a variety of factors, many of which are outside of our
control, including:

  .  demand for and market acceptance of our products and services;

  .  expansion into international markets;

  .  introduction of products and services or enhancements by us and our
     competitors;

  .  competitive factors that affect our pricing;

  .  the timing of customer installations;

  .  the mix of products and services we sell;

  .  the timing and magnitude of capital expenditures, including costs
     relating to the expansion of operations;

  .  the size of customer orders, some of which account for more than 10% of
     total revenue during a particular quarter;

  .  the hiring and retention of key personnel;

  .  conditions specific to the internet industry and other general economic
     factors; and

  .  new government legislation or regulation.

                                       6
<PAGE>

   We typically receive a substantial portion of our orders in the last two
weeks of each fiscal quarter because our customers often delay purchases of
products to the end of the quarter. Because a substantial portion of our costs
are relatively fixed and based on anticipated revenue, a failure to book an
expected order in a given quarter will likely not be offset by a corresponding
reduction in costs and, therefore, could adversely affect our operating
results.

   In addition, we plan to significantly increase our operating expenses to
expand our sales and marketing operations and consulting and training programs,
broaden our customer support capabilities, and fund greater levels of research
and development. Our operating expenses, which include research and
development, sales and marketing, and general and administrative expenses, are
based on our expectations of future revenues and are relatively fixed in the
short term. If revenue falls below our expectations in any quarter and we are
not able to quickly reduce our spending in response, our operating results will
be adversely affected and our stock price may fall.

Because our customers' orders vary substantially in size, our quarterly
operating results are difficult to forecast and may fluctuate.

   Customer orders during a particular quarter typically vary considerably in
size, from as low as several thousand dollars to over $500,000. For example,
during the quarter ended June 30, 1999, we recognized 18.5% of our revenue for
the quarter from a single customer. Similarly, for each of the quarters ended
September 30, 1998 and December 31, 1998, we had a single customer that
accounted for over 20% of our revenue for that quarter. In addition, we expect
to recognize revenue from one or more customers during the quarter ending
September 30, 1999 that exceeds 10% of our total revenue for the quarter.
Because of the large size of some individual customer orders relative to total
orders during a quarter, our revenue may fluctuate significantly from one
quarter to the next. If a customer who placed a large order were to cancel or
reduce the magnitude of the order, or if we were unable to fulfill the order in
a timely fashion or were otherwise unable to recognize revenue for the order in
the quarter it was anticipated, it could result in increased volatility in our
revenue and stock price and may materially affect our business, prospects,
operating results and financial condition.

Our sales cycle is long, unpredictable and subject to seasonal fluctuations, so
it is difficult to forecast our revenue.

   Any delay in sales of our products or services could cause our quarterly
revenue and operating results to fluctuate. The typical sales cycle of our
products is long and unpredictable and requires both a significant capital
investment decision by our customers and our education of potential customers
regarding the use and benefits of our products. Our sales cycle is generally
between three and nine months. A successful sales cycle typically includes
presentations to both business and technical decision makers, as well as a
limited pilot program to establish technical fit. Our products are typically
purchased as part of a significant enhancement to a customer's information
technology system. The implementation of our products involves a significant
commitment of resources by prospective customers. Accordingly, a purchase
decision for a potential customer typically requires the approval of several
senior decision makers. Our sales cycle is affected by the business conditions
of each prospective customer. Due to the relative importance of many of our
individual product sales, a lost or delayed sale could adversely affect our
quarterly operating results. Our sales cycle is affected by seasonal
fluctuations as a result of our customers' fiscal year budgeting cycles and
slow summer purchasing patterns overseas. Also, we expect revenue to be higher
in the fourth quarter than in other quarters of the year.

Our business will suffer if we do not retain and expand our customer base.

   Our success depends on the continued growth of our customer base and the
retention of our customers. Our ability to attract new customers depends on a
variety of factors, including:

  .  the willingness of businesses to adopt enterprise information portal
     solutions;

  .  the reliability and cost-effectiveness of our products and services; and

  .  our ability to effectively market our products and services.

                                       7
<PAGE>

   To attract new customers we intend to significantly increase our sales and
marketing expenditures. However, our efforts might not result in more sales as
a result of the following factors:

  .  we may be unsuccessful in implementing our marketing strategies;

  .  we may be unsuccessful in hiring a sufficient number of qualified sales
     and marketing personnel; and

  .  any implemented strategies might not result in increased sales.

Software defects, service delays or security breaches could diminish demand for
our products or lead to product-related liabilities.

   Complex software products like ours frequently contain defects or errors
that may be detected only when the product is in use. Further, we often render
implementation, consulting and other technical services, the performance of
which typically involves working with sophisticated software, computing and
networking systems, and we could fail to meet project milestones in a timely
manner or to meet customer expectations as a result of any defects or errors.
Our products are designed to facilitate the secure transmission of sensitive
business information to specified parties outside the business over the
internet. As such, the reputation of our software products for providing good
security is vital to their acceptance by customers. Our products may be
vulnerable to break-ins, theft or other improper activity that could jeopardize
the security of information for which we are responsible. Problems caused by
product defects, failure to meet project milestones for services or security
breaches could result in loss of or delay in revenue, loss of market share,
failure to achieve market acceptance, diversion of development resources, harm
to our reputation, increased insurance costs or increased service and warranty
costs. To address these problems, we may need to expend significant capital and
resources that may not have been budgeted.

   Our license agreements with customers typically contain provisions designed
to limit our exposure to potential product liability claims. All domestic and
international jurisdictions may not enforce these limitations. Although we have
not experienced any product liability claims to date, we may encounter this
type of claim in the future. Product liability claims brought against us,
whether or not successful, could divert the attention of our management and key
personnel and could be expensive to defend.

We may be unable to maintain or grow our international operations.

   During 1996, 1997 and 1998, we derived 0%, 14% and 12% of our total revenue
from sales outside the United States. We intend to expand our international
operations and anticipate that in the foreseeable future a significant portion
of our revenue may be derived from sources outside the United States.

   We also expect to commit additional resources to customizing our products
for selected international markets and developing international sales and
support organizations. In addition, even if our international operations are
successfully expanded and our products are successfully customized, there can
be no assurance that we will be able to maintain or increase international
market demand for our products.

   Our international operations are subject to a number of risks, including:

  .  costs of customizing products for foreign countries;

  .  protectionist laws and business practices favoring local competition;

  .  dependence on the performance of local resellers and other strategic
     partners;

  .  adoption of general internet technologies in each international market;

  .  compliance with multiple, conflicting and changing governmental laws and
     regulations;

  .  longer sales and payment cycles;

  .  import and export restrictions and tariffs;

                                       8
<PAGE>

  .  difficulties in staffing and managing international operations;

  .  greater difficulty or delay in accounts receivable collection;

  .  foreign currency exchange rate fluctuations;

  .  multiple and conflicting tax laws and regulations; and

  .  political and economic instability.

Our growth is dependent upon the successful development of our direct sales
model.

   We sell our products primarily through our domestic direct sales
organization and we support our customers with our technical and customer
support staff in several field offices. Our ability to achieve revenue growth
in the future will depend on our ability to recruit and train sufficient
technical, customer and direct sales personnel, particularly additional sales
personnel focusing on the new vertical market segments that we target. We have
in the past and may in the future experience difficulty in recruiting qualified
sales, technical and support personnel. Our inability to rapidly and
effectively expand our direct sales force and our technical and support staff
could materially adversely affect our business, prospects, results of
operations and financial condition.

Year 2000 considerations among our customers and potential customers may reduce
our revenue.

   We may experience reduced revenue from sales of products and services as
customers and potential customers put a priority on correcting year 2000
problems and therefore defer purchases of our products and services until later
in 2000. Accordingly, demand for our products and services may be particularly
volatile and unpredictable for the remainder of 1999 and early 2000.

We rely on third-party software that may be difficult to replace.

   Some of the software we license from third parties would be difficult to
replace. This software may not continue to be available on commercially
reasonable terms, or at all. The loss or inability to maintain any of these
technology licenses could result in delays in the sale of our products and
services until equivalent technology, if available, is identified, licensed and
integrated, which could harm our business.

We will require additional capital in the future and may not be able to obtain
adequate financing on terms acceptable to us.

   The expansion and development of our business will require significant
capital to fund our operating losses, working capital needs and capital
expenditures. Our principal capital expenditures and lease payments include
those for desktop workstations for new employees, servers for engineering
product development, telephone equipment for all employees and facility tenant
improvements. Our working capital is primarily comprised of accounts
receivable, accounts payable and accrued expenses. The timing and amount of our
future capital requirements may vary significantly depending on numerous
factors, including regulatory, technological, competitive and other
developments in our industry. During the next twelve months, we expect to meet
our cash requirements with existing cash and cash equivalents and short-term
investments, the net proceeds from this offering, cash flow from sales of our
services and proceeds from existing and future working capital lines of credit
and other borrowings. Our failure to generate sufficient cash flows from sales
of services or to raise sufficient funds may require us to delay or abandon
some or all of our development and expansion plans or otherwise forego market
opportunities. Due to the uncertainty of these factors, our actual revenue and
costs may vary from expected amounts, possibly to a material degree, and these
variations are likely to affect our future capital requirements.

   Future equity or debt financing may not be available to us on favorable
terms or at all. In addition, our credit agreements contain certain covenants
restricting our ability to incur further indebtedness and we have

                                       9
<PAGE>

pledged some of our assets as security for any borrowings thereunder. Future
borrowing instruments such as credit facilities and lease agreements are also
likely to contain similar or more restrictive covenants and will likely require
us to pledge assets as security for borrowings under those future arrangements.
Our inability to obtain additional capital on satisfactory terms may delay or
prevent the expansion of our business which could cause our business and
prospects to suffer.

Our plan to sell products as an internet-based application service provider may
fail.

   In addition to licensing our software applications, we plan to offer them as
an internet-based enterprise service provider. We would price solutions on a
per-transaction basis or on a subscription basis to companies seeking to
outsource their employee-facing business applications. This business model is
unproven and represents a significant departure from the strategies
traditionally employed by us and other enterprise software vendors. We have no
experience selling products or services as an application service provider, and
our efforts to develop this application service provider business may take
significant management time and attention which may adversely impact revenue.
In connection with our planned application service provider business model, we
will engage third-party service providers to perform many of the necessary
services as independent contractors, and we will be responsible for monitoring
their performance. We have limited experience outsourcing services or other
important business functions in the past, and independent contractors may not
perform those services adequately. If any service provider delivers inadequate
support or service to our customers, our reputation could be harmed. In
addition, we plan to use resellers to market enterprise service products. We
have no experience utilizing resellers and we may not be successful in this
effort.

   If customers determine that our products are not able to accommodate
significant increases in the number of users and amount of information, do not
provide adequate security for the dissemination of information over the
internet, or are otherwise inadequate for internet-based use, or if for any
other reason customers fail to accept our products for use on the internet or
on a per-transaction or subscription basis, our business will be harmed. As an
outsourced application service provider, we may regularly receive large amounts
of confidential information, including credit card and other financial and
accounting data through the internet or extranets, and there can be no
assurance that this information will not be subject to computer break-ins,
theft and other improper activity that could jeopardize the security of
information for which we are responsible. Even if our strategy of offering
products to customers over the internet is successful, some of those internet
customers may be ones that otherwise might have bought our software and
services through our traditional licensing arrangements. Any shift in potential
license revenues to the application service provider model, which is unproven
and potentially less profitable, could harm our business.

Our failure to manage growth could adversely affect us.

   The planned expansion of our operations will place a significant strain on
our management, financial controls, operations systems, personnel and other
resources. Our ability to manage our future growth, should it occur, will
depend in large part upon a number of factors including our ability to:

  .  control costs;

  .  maintain effective quality controls;

  .  significantly expand our internal management and financial control
     systems; and

  .  attract, assimilate and retain qualified personnel.

   We hired our Chief Financial Officer, Raja H. Venkatesh, in June 1999. We do
not currently have a corporate controller. While we have commenced a search for
a controller and additional financial and accounting personnel, these people
will need time to familiarize themselves with Viador and our accounting and
sales practices. In addition, we anticipate switching from our current
accounting software to a more sophisticated accounting and financial
information software system in the near future. If we are unable to

                                       10
<PAGE>

successfully hire and integrate additional financial and accounting personnel
or successfully transition to new accounting software, our business and
prospects will suffer.

   We also plan to hire additional personnel to establish and implement
corporate security processes and policies in light of our planned expansion of
our operations. If we are unable to implement these measures in advance of our
planned future growth, our business and prospects could suffer.

   We expect that our customers increasingly will demand additional information
and reports with respect to the services we provide. To do so, we must develop
and implement an automated customer service system to handle these demands and
enable future sales growth. In addition, if we are successful in implementing
our marketing strategy, we also expect the demands on our technical support
resources to grow rapidly, and we may experience difficulties responding to
customer demand for our services and providing technical support in accordance
with our customers' expectations. We expect that these demands will require not
only the addition of new management personnel, but also the development of
additional expertise by existing management personnel and the establishment of
long-term relationships with third-party service vendors. We may not be able to
keep pace with any growth, successfully implement and maintain our operational
and financial systems or successfully obtain, integrate and utilize the
employees, facilities, third-party vendors and equipment, or management,
operational and financial resources necessary to manage a developing and
expanding business in our evolving and increasingly competitive industry. If we
are unable to address these customer demands in connection with our growth, our
business and prospects will suffer.

We may not be able to recruit and retain the personnel we need to succeed.

   We have recently hired a number of key employees and officers, including our
Chief Financial Officer, who has been with us for less than two months. The
integration of new personnel has resulted and will continue to result in some
disruption to our ongoing operations. Our failure to complete this integration
in an efficient manner could harm our business and prospects.

   We are highly dependent on certain members of our management and engineering
staff, including, without limitation, our Chief Executive Officer, our Senior
Vice President of North American Operations and our Chief Financial Officer.
The loss of one or more of these officers might impede the achievement of our
business objectives. Furthermore, recruiting and retaining qualified financial
and technical personnel is critical to our success. If our business grows, we
will also need to recruit a significant number of management, technical and
other personnel for our business. Competition for employees in our industry is
intense. We may not be able to continue to attract and retain skilled and
experienced personnel on acceptable terms.

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

   We believe that proprietary rights are important to our business. We
principally rely upon a combination of patent, copyright, trademark and trade
secret laws as well as contractual restrictions to protect our proprietary
technology.

   Patents. We have been awarded U.S. patents on two inventions. However, none
of our technology is patented abroad, nor do we have any international patent
applications pending. Moreover, it is possible that:

  .  any patents issued to us could be successfully challenged by third
     parties, which could result in our loss of the right to prevent others
     from exploiting the inventions claimed in those patents;

  .  current or future competitors may develop similar technology, duplicate
     our products or design around any patents that may be issued to us;

  .  effective patent protection may not be available in every country in
     which we do business; and

  .  any patents issued to us may not provide significant proprietary
     protection or commercial advantage to us.

                                       11
<PAGE>

   Trademarks, copyrights and trade secrets. We also rely upon a combination of
copyright, trademark and trade secret laws, and contractual restrictions to
protect our proprietary technology. In addition to those protections, we also
rely upon know-how, continuing technological innovations and licensing
opportunities to develop and maintain our competitive position. There can be no
assurance that others will not independently develop substantially equivalent
proprietary information or otherwise gain access to or disclose our proprietary
information. It is our policy to require our employees, certain contractors,
consultants, directors, customers, prospective customers and corporate partners
to execute non-disclosure agreements upon the commencement of those sort of
relationships with us. These agreements may be breached, and they may not
provide meaningful protection of our trade secrets or adequate remedies in the
event of unauthorized use or disclosure of that information, and our trade
secrets may become known or be independently discovered by our competitors.

   Our commercial success will also depend in part on our not infringing the
proprietary rights of others and not breaching technology licenses that cover
technology used in our products. It is uncertain whether any third party
proprietary rights will require us to develop alternative technology or to
alter our products or processes, obtain licenses or cease certain activities.
If any licenses of that type are required, we may not be able to obtain those
licenses on commercially favorable terms, if at all. Our failure to obtain a
license to any technology that we may require to commercialize our products and
services could cause our business and prospects to suffer. Litigation, which
could result in substantial cost to us, may also be necessary to enforce any
patents issued or licensed to us or to determine the scope and validity of
third party proprietary rights.

Potential year 2000 problems with our products or internal systems may involve
significant time and expense.

   Many currently installed computer systems and software products store dates
using only the last two digits of the calendar year. As a result, those systems
may not be able to distinguish whether "00" means 1900 or 2000, which may cause
those systems to fail or produce erroneous results. Year 2000 problems could
subject us to liability claims or disrupt our business, either of which could
harm our business.

   Based upon our assessment to date, we believe that our software products are
capable of adequately distinguishing 21st century dates from 20th century
dates. However, our products operate in complex network environments and
directly or indirectly interact with a number or other hardware and software
systems that we cannot adequately evaluate for year 2000 compliance. We may
face claims based upon year 2000 problems in other companies' products, or
issues arising from the integration of multiple products into an overall
system. Although we have not been a party to any litigation or arbitration
proceeding involving our products or services related to year 2000 compliance
issues, we may in the future be required to defend our products or services in
those proceedings, or to negotiate resolutions of claims based upon year 2000
issues. Defending and resolving year 2000 disputes, regardless of the merits of
those disputes, and any liability we have for year 2000-related damages,
including consequential damages, could be expensive to us.

   We also need to ensure the year 2000 compliance of our internal computer and
other systems, to continue testing our software products, to audit the year
2000 compliance status of our suppliers and business partners, and to conduct a
legal audit. We have not completed our year 2000 compliance investigation and
overall compliance initiative, nor have we developed a contingency plan for
handling year 2000 problems that are not detected and corrected prior to their
occurrence. Moreover, we have a limited number of personnel who are technically
experienced with our year 2000 compliance procedures and, in the event our
systems were to fail as a result of year 2000 problems, these employees would
likely be unable to timely comply with several customers' requests for year
2000 remediation. Any such delay could impair our business or prospects or
relationships with those customers. The total cost of year 2000 compliance and
remediation may be material and may harm our business.

                                       12
<PAGE>

If important strategic relationships are discontinued for any reason, there may
be a material adverse effect on our business, results of operations and
financial condition.

   Although our strategic relationships are a key factor in our overall
business strategy, our strategic partners may not view their relationship with
us as significant to their own business. There is a risk that parties with whom
we have strategic alliance agreements may not perform their obligations as
agreed. Our arrangements with strategic partners generally do not establish
minimum performance requirements but instead rely on the voluntary efforts of
our partners. In addition, most of our agreements with strategic partners may
be terminated by either party with little notice. If important strategic
relationships are discontinued for any reason, our business, prospects, results
of operations and financial condition may be adversely affected.

                         Risks Related to Our Industry

We may not be able to successfully compete against our current and future
competitors, which could adversely affect our business.

   The existing enterprise information portal software market is intensely
competitive. There are few substantial barriers to entry and we expect that
this market will face additional competition from existing competitors in the
future. Moreover, if our approach is successful, it is likely that additional
competitors will enter the market. Some of these additional competitors may
have significantly more resources than we have, and could devote the resources
necessary to independently develop technology which provides equivalent or
superior functionality compared to our products. For example, we also compete
against larger companies providing a suite of products targeting business
internet applications, including Microsoft and Oracle, who we expect may
provide products as part of their suite that compete with ours. To date, we
have faced competition and sales resistance from potential customers that have
developed or may develop in-house systems that may substitute for those we
offer. We expect that in-house systems will continue to be a principal source
of competition for the foreseeable future. In particular, we have had
difficulties making sales to organizations whose internal development groups
have already progressed significantly toward completion of systems that our
products might replace, or where the underlying technologies used by those
groups differ fundamentally from ours. In addition, we compete against
providers of decision support software, data warehousing software and
enterprise resource planning software. We also compete with portal software
companies in the area of document management. Companies in each of these areas
may expand their technologies or acquire companies to support greater
functionality and capability, particularly in the areas of query response time
and ability to support large numbers of users.

   We seek to provide products that are complementary to the services offered
by systems integrators and professional service organizations, such as CSC and
IBM Global Services, and to work together with these firms to provide
integration solutions. However, we cannot assure you that those firms will
utilize our products in their integration efforts, and unless and until they do
so, they will continue to offer competitive solutions to customers' integration
needs. We also seek to work closely with enterprise application vendors so that
we can provide integration among products offered by different vendors. Many of
these vendors, however, have other initiatives under way to facilitate these
integrations independently. We can not assure the extent to which enterprise
application vendors will adopt or continue to support our integration approach.
Increased competition is likely to result in price reductions, decreased sales
levels, reduced gross margins and loss of market share, any of which could
materially adversely affect our business, prospects, operating results and
financial condition. We can not assure you that we will be able to successfully
compete against current and future competitors, or that competitive pressures
we face will not materially adversely affect our business, prospects, operating
results and financial condition. See "Business--Competition."

We depend upon the growth of the emerging market for enterprise information
portal software.

   We expect much of our revenue growth, if any, in the foreseeable future will
be derived from sales of enterprise information portal software products and
services. The market for enterprise information portal

                                       13
<PAGE>

software is relatively new and emerging. Our future financial performance will
largely depend on continued growth in the number of organizations demanding
software and services for enterprise information and outside vendors to
develop, manage and maintain the networking software used for those
organizations' critical applications. Many potential customers for third-party
enterprise portal software have made significant investments in internally
developed integration systems, and are highly dependent upon the continued use
of those internally developed systems. Organizations' dependence on internally
developed systems coupled with the significant costs required to shift to
third-party products may substantially inhibit future demand for third-party
enterprise portal software products, such as those we offer. We can not assure
you that the market for enterprise portal software products and services will
continue to grow. If the enterprise portal market fails to grow or grows more
slowly than we currently anticipate, our business, operating results and
financial condition would be materially adversely affected.

   We intend to continue to expend considerable resources educating potential
customers about enterprise portal software. Even if a sizable market for third-
party enterprise portal software continues to develop, there can be no
assurance that those expenditures or any other marketing efforts will enable
our products to achieve or sustain any significant degree of market acceptance.
If we are unable to establish broad market acceptance for our current and
future products, our future growth, financial condition and results of
operations will be materially adversely affected. The timing and degree of our
success largely depends on the timely adoption of our products by users in the
commercial market.

Our market changes rapidly due to changing technology and evolving industry
standards, and our future success will depend on our ability to effectively
respond to these changes.

   The market for our services is characterized by rapidly changing technology,
evolving industry standards, frequent new service and product introductions and
changes in customer demands. Our future success will depend to a substantial
degree on our ability to offer products and services that incorporate leading
technology, and respond to technological advances and emerging industry
standards and practices on a timely and cost-effective basis. You should be
aware that:

  .  our technology or systems may become obsolete upon the introduction of
     alternative technologies;

  .  the technological life cycles of our products are difficult to estimate,
     and may vary across vertical market segments;

  .  we may not have sufficient resources to develop or acquire new
     technologies or to introduce new services capable of competing with
     future technologies or service offerings; and

  .  the price of the services provided by us is expected to decline as
     rapidly as the cost of any competitive alternatives.

   We may not be able to effectively respond to the technological requirements
of the changing market. To the extent we determine that new technologies and
equipment are required to remain competitive, the development, acquisition and
implementation of those technologies and equipment are likely to continue to
require significant capital investment by us. Sufficient capital may not be
available for this purpose in the future, and even if it is available,
investments in new technologies may not result in commercially viable
technological processes and there may not be commercial applications for those
technologies. However, if we do not develop and introduce new products and
services and achieve market acceptance in a timely manner, our business,
financial condition and results of operations may be materially adversely
affected.

Our future success will depend on our ability to meet the sophisticated needs
of our customers, including the need to support several platforms.

   We currently serve, and intend to continue to serve, a customer base with a
wide variety of hardware, software, database and networking platforms. To gain
broad market acceptance, we believe that we must support an increased number of
platforms in the future. We currently develop our products on Microsoft

                                       14
<PAGE>

Windows NT. Therefore, we experience a delay when we adapt our products to be
installed on other major platforms. For example, we are contractually obligated
to provide a version of our software that operates on the Unix platform in the
third fiscal quarter of 1999. A delay in this or any other rollout of our
product onto a new platform could adversely affect our revenues and operating
results. There can be no assurance that we will adequately expand our database
and platform coverage to service potential customers, or that the expansion
will be sufficiently rapid to meet or exceed the platform and database coverage
of our competitors.

   The success of our products will depend on various factors, including the
ability to integrate our products with customer platforms as compared to
competitive offerings, the portability of our products, particularly the number
of hardware platforms, operating systems and databases that our products can
source or target, the integration of additional software modules under
development with existing products, and our management of software development
being performed by third-party developers. We can not assure you that we will
successfully develop and market product enhancements or new products that
respond to these technological changes, shifting customer tastes, or evolving
industry standards, or that we will not experience difficulties that could
delay or prevent the successful development, introduction and marketing of
these products. If we are unable to develop and introduce new products or
enhancements of existing products in a timely manner or if we experience delays
in the commencement of commercial shipments of new products and enhancements,
our business, operating results and financial condition would be materially
adversely affected.

                         Risks Related to Our Offering

Our stock will likely be subject to substantial price and volume fluctuations
due to a number of factors, some of which are beyond our control.

   Stock prices and trading volumes for many internet related companies
fluctuate widely for a number of reasons, including some reasons which may be
unrelated to their businesses or results of operations. This market volatility,
as well as general domestic or international economic, market and political
conditions, could materially adversely affect the price of our common stock
without regard to our operating performance. In addition, our operating results
may be below the expectations of public market analysts and investors. If this
were to occur, the market price of our common stock would likely decrease
significantly.

After this offering, our officers, directors, and their affiliates, in the
aggregate, will control    % of our voting stock.

   Some of our stockholders own a large enough stake in us to have an influence
on the matters presented to stockholders. As a result, these stockholders may
be able to control all matters requiring stockholder approval, including the
election and removal of directors, the approval of significant corporate
transactions, such as any merger, consolidation or sale of all or substantially
all of our assets, and the control of our management and affairs. Accordingly,
that concentration of ownership may delay, defer or prevent a change in control
of Viador, impede a merger, consolidation, takeover or other business
combination involving Viador or discourage a potential acquirer from making a
tender offer or otherwise attempting to obtain control of Viador, any of which
could have a material adverse effect on the market price of our common stock.

The sale of shares eligible for future sale in the open market could depress
our stock price.

   Sales of substantial amounts of our common stock, including shares issued
upon the exercise of outstanding options and warrants, in the public market
after this offering could adversely affect the market price of our common
stock. Those sales also might make it more difficult for us to sell equity-
related securities in the future at a time and price that we deem appropriate.
In addition to the          shares of common stock offered hereby, assuming no
exercise of the underwriters' over-allotment option, as of June 30, 1999, there
were 4,915,433 shares of common stock outstanding, all of which are restricted
shares under the Securities Act of 1933, as amended. These restricted shares
will not be immediately eligible for sale in the public market.

                                       15
<PAGE>

However, following the expiration of the 180-day lock-up agreements with the
representatives of the underwriters,           restricted shares will be
available for sale in the public market and the remaining restricted shares
will be eligible for sale from time to time thereafter upon expiration of
applicable holding periods under Rule 144, 144(k) or 701 promulgated under the
Securities Act of 1933, as amended. In addition, as of June 30, 1999, there
were options and warrants outstanding to purchase 3,287,155 shares of common
stock, all of which warrants are expected to be exercised on or before the
closing of this offering. However, the shares of common stock underlying such
options and warrants will not be immediately eligible for sale in the public
market since they are subject to a 180-day lock-up period. Bear, Stearns & Co.
Inc. may, in its sole discretion and at any time without notice, release all or
any portion of the securities subject to lock-up agreements. In addition, the
holders of 16,326,863 restricted shares and warrants to purchase 9,615 shares
of our Series C Preferred Stock are entitled to certain rights with respect to
registration of those shares for sale in the public market. If those holders
sell in the public market, those sales could have a material adverse effect on
the market price of our common stock.

Our management will have broad discretion in allocating proceeds from this
offering.

   Our net proceeds from this offering, after deducting underwriting
commissions and expenses payable by us, are estimated to be approximately
$      million. The primary purposes of this offering are to fund capital
expenditures, working capital and operating losses expected to be incurred in
connection with the execution of our business plan, including the expansion of
our operations. A portion of the net proceeds may also be used to repay
currently outstanding or future indebtedness, or to acquire or invest in
complementary businesses or products. Accordingly, our management will retain
broad discretion as to the allocation of most of the proceeds of this offering.
The failure of management to apply these funds effectively could have a
material adverse effect on our business, results of operations and financial
condition.

There is no current market for our common stock.

   Prior to this offering, there has been no public market for our common
stock. An active public market may not develop or be sustained after this
offering and investors may not be able to sell our common stock should they
desire to do so. The initial public offering price will be determined by
negotiations between us and the representatives of the underwriters and may
bear no relationship to the price at which the common stock will trade upon
completion of this offering. See "Underwriting" for a discussion of the factors
to be considered in determining the initial public offering price.

We have certain anti-takeover defenses that could delay or prevent an
acquisition of our business.

   Certain provisions of our certificate of incorporation and bylaws and the
provisions of Delaware law could have the effect of delaying, deferring or
preventing an acquisition of our business. For example, our board of directors
is divided into three classes to serve staggered three-year terms, we may
authorize the issuance of up to 10,000,000 shares of "blank check" preferred
stock, our stockholders may not take actions by written consent and our
stockholders are limited in their ability to make proposals at stockholder
meetings. See "Description of Capital Stock" for a further discussion of these
provisions.

You will incur immediate and substantial dilution.

   We expect the initial public offering price to be substantially higher than
the net tangible book value per share of common stock. Therefore, you will
incur immediate dilution in net tangible book value of $       per share,
assuming an initial public offering price of $         per share. You may incur
additional dilution if holders of stock options, whether currently outstanding
or subsequently granted, exercise their options or if warrantholders exercise
their warrants to purchase common stock. See "Dilution" on page     .

                                       16
<PAGE>

Relying on forward-looking statements in this prospectus could cause you to
incorrectly assess the risks and uncertainties of investing in our stock
because our actual results may differ materially from what was anticipated in
those statements.

   Some of the matters discussed under the captions "Prospectus Summary," "Risk
Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business" and elsewhere in this prospectus include
forward-looking statements. We have based these forward-looking statements on
our current expectations and projections about future events, including, among
other things,

  .  implementing our business strategy;

  .  obtaining and expanding market acceptance of the products and services
     we offer;

  .  forecasts of the internet and our market size and growth;

  .  meeting our requirements under key contracts; and

  .  competition in our market.

   In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," "estimates" and similar
expressions. These statements are based on our current beliefs, expectations
and assumptions and are subject to a number of risks and uncertainties. Actual
results and events may vary significantly from those discussed in the forward-
looking statements. A description of certain risks that could cause our results
to vary appears under the caption "Risk Factors" and elsewhere in this
prospectus. These forward-looking statements are made as of the date of this
prospectus, and we assume no obligation to update them or to explain the
reasons why actual results may differ. In light of these assumptions, risks and
uncertainties, the forward-looking events discussed in this prospectus might
not occur.

                                       17
<PAGE>

                                USE OF PROCEEDS

   The net proceeds from this offering, at an assumed initial public offering
price of $      per share, are estimated to be $        million, after
deducting estimated underwriting discounts and commissions and expenses payable
by us. We expect to use the net proceeds from this offering to fund operating
losses and our working capital needs. Our management will retain broad
discretion in the allocation of such net proceeds. Although we may use a
portion of the net proceeds to pursue possible acquisitions of, or enter into
joint ventures with respect to, complementary businesses, technologies or
products in the future, there are no present understandings, commitments or
agreements with respect to any such acquisitions or joint ventures. Pending the
use of such net proceeds, we intend to invest these funds in short-term,
investment grade securities.

                                DIVIDEND POLICY

   We have not declared or paid any dividends since our inception and do not
intend to pay cash dividends on our capital stock in the foreseeable future. We
anticipate that we will retain all future earnings, if any, for use in our
operations and the expansion of our business. Certain of our credit agreements
restrict our ability to declare or pay any dividends while the credit agreement
is in effect. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources."

                                       18
<PAGE>

                                 CAPITALIZATION

   The following table sets forth, as of June 30, 1999:

  .  Our actual capitalization;

  .  Our pro forma capitalization, assuming the exercise of a warrant to
     purchase 9,165 shares of Series C preferred stock, the conversion of
     outstanding shares of our convertible preferred stock into common stock
     and the exercise of warrants to purchase 80,835 shares of our common
     stock; and

  .  Our pro forma capitalization, as adjusted to give effect to the sale of
             shares of common stock offered by us in this offering at an
     assumed initial public offering price of $      per share, after
     deducting the underwriting discounts and commissions and estimated
     offering expenses payable by us, and the application of the estimated
     net proceeds from this offering.

   This information should be read in conjunction with our financial statements
and the notes related thereto appearing elsewhere in this prospectus. See "Use
of Proceeds."

<TABLE>
<CAPTION>
                                                        June 30, 1999
                                               ---------------------------------
                                                         (unaudited)
                                                Actual    Pro Forma  As Adjusted
                                               --------  ----------- -----------
                                               (in thousands except share data)
<S>                                            <C>       <C>         <C>
Long-term obligations, less current portion..  $     --     $ --        $ --
Stockholders' equity:
  Convertible preferred stock, $0.001 par
   value, 25,000,000 shares authorized,
   16,326,863 shares issued and outstanding,
   actual;     shares authorized, no shares
   issued and outstanding, pro forma and as
   adjusted..................................        16       --          --
  Common stock $0.001 par value, 20,833,333
   shares authorized, 4,915,433 shares issued
   and outstanding, actual;     shares
   authorized,     shares issued and
   outstanding, pro forma, issued and
   outstanding, as adjusted..................        12       --          --
  Additional paid-in capital.................    30,257       --          --
  Deferred stock-based compensation..........    (2,029)      --          --
  Treasury stock.............................       (34)      --          --
  Accumulated deficit........................   (14,938)      --
                                               --------     ----        ----
    Total stockholders' equity...............    13,284       --          --
                                               --------     ----        ----
      Total capitalization...................  $ 13,284     $           $
                                               ========     ====        ====
</TABLE>

   The table excludes the following shares: 3,287,155 shares of common stock
issuable upon exercise of options outstanding at a weighted average exercise
price of $0.74 per share and 12,292,000 shares reserved for future issuance
under our Amended and Restated 1997 Stock Option/Stock Issuance Plan and 1999
Stock Incentive Plan. See "Management--Executive Compensation and Other
Information--Employee Benefit Plans" and Note 4 of the Notes to Consolidated
Financial Statements.

                                       19
<PAGE>

                                    DILUTION

   Our pro forma net tangible book value as of June 30, 1999 was approximately
$13.4 million, or $     per share of common stock. Pro forma net tangible book
value per share is calculated by subtracting our total liabilities from our
total tangible assets, which equals total assets less intangible assets, and
dividing this amount by the number of shares of common stock outstanding as of
June 30, 1999. Assuming the sale by us of         shares of common stock
offered in this offering at an assumed initial public offering price of $
per share and the application of the estimated net proceeds from this offering,
our net tangible book value as of June 30, 1999 would be $        million, or $
        per share of common stock. Assuming completion of this offering, there
will be an immediate increase in the net tangible book value of $         per
share to our existing stockholders and an immediate dilution in the net
tangible book value of $      per share to new investors. The following table
illustrates this per share dilution:

<TABLE>
<S>                                                                <C>   <C>
Assumed initial public offering price per share...................       $
  Pro forma net tangible book value per share as of June 30,
   1999........................................................... $
  Pro forma increase attributable to new investors................ $
                                                                   -----
Pro forma net tangible book value per share after the offering....       $
                                                                         ------
Pro forma dilution per share to new investors.....................       $
                                                                         ======
</TABLE>

   The following table summarizes the total number of shares of common stock
purchased from us, the total consideration paid to us and the average price per
share paid by existing stockholders and by new investors, in each case based
upon the number of shares of common stock outstanding as of June 30, 1999.

<TABLE>
<CAPTION>
                             Shares Purchased  Total Consideration
                            ------------------ ------------------- Average Price
                              Number   Percent   Amount    Percent   Per Share
                            ---------- ------- ----------- ------- -------------
<S>                         <C>        <C>     <C>         <C>     <C>
Existing stockholders...... 11,803,134      %  $                %     $
New investors..............                 %  $                %     $
                            ----------   ---   -----------   ---
  Total....................                 %  $                %
                            ==========   ===   ===========   ===
</TABLE>

   If the underwriters' over-allotment is exercised in full, the number of
shares of common stock held by existing stockholders will be reduced to
       , or         % of the total number of shares of common stock to be
outstanding after this offering, and will increase the number of shares of
common stock held by the new investors to        , or         % of the total
number of shares of common stock to be outstanding immediately after this
offering. See "Principal Stockholders."

   The tables and calculations above assume no exercise of outstanding options.
At June 30, 1999, there were 3,287,155 shares of common stock issuable upon
exercise of options outstanding with a weighted average exercise price of $0.74
per share and 12,292,000 shares reserved for future issuance under our Amended
and Restated 1997 Stock Option/Stock Issuance Plan and our 1999 Stock Incentive
Plan. To the extent that these options are exercised, there will be further
dilution to new investors. See "Management--Executive Compensation and Other
Information--Employee Benefit Plans."

                                       20
<PAGE>

                            SELECTED FINANCIAL DATA

   The tables that follow present portions of our financial statements and are
not complete. You should read the following selected financial data in
conjunction with our financial statements and related notes thereto and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this prospectus. The statements of operations
data for the years ended December 31, 1996, 1997 and 1998, and the balance
sheet data as of December 31, 1997 and 1998, are derived from our financial
statements that have been audited by KPMG LLP, independent auditors, which are
included elsewhere in this prospectus. The statements of operations data for
the year ended December 31, 1995 and the balance sheet data as of December 31,
1995 and 1996 are derived from audited financial statements that are not
included in this prospectus. The statements of operations data for the six
months ended June 30, 1998 and 1999 and the balance sheet date as of June 30,
1999 are derived from our unaudited financial statements included elsewhere in
this prospectus and include, in the opinion of management, all adjustments,
consisting only of normal recurring adjustments, that we consider necessary for
the fair presentation of our financial position and results of operations for
those periods. The historical results presented below are not necessarily
indicative of the results to be expected for any future fiscal year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

<TABLE>
<CAPTION>
                                                               Six Months
                               Years Ended December 31,      Ended June 30,
                             ------------------------------  ----------------
                             1995   1996    1997     1998     1998     1999
                             ----- ------  -------  -------  -------  -------
                                                               (unaudited)
                                 (in thousands except per share data)
<S>                          <C>   <C>     <C>      <C>      <C>      <C>
Statement of Operations
 Data:
Revenue..................... $  80 $  997  $ 1,582  $ 3,825  $ 1,754  $ 3,290
Cost of revenue.............    10    314      903    1,387      640      874
                             ----- ------  -------  -------  -------  -------
Gross profit................    70    683      679    2,438    1,114    2,416
                             ----- ------  -------  -------  -------  -------
Operating expenses:
  Research and development..    15    364    1,351    2,481    1,107    1,871
  Sales and marketing.......    11    125    1,802    4,295    1,806    4,397
  General and
   administrative...........     8    358      936    1,365      374      859
  Amortization of stock-
   based compensation.......   --      --       --      445       94      667
                             ----- ------  -------  -------  -------  -------
Total operating expenses....    34    847    4,089    8,586    3,381    7,793
                             ----- ------  -------  -------  -------  -------
Loss from operations........    36   (164)  (3,410)  (6,148)  (2,267)  (5,377)
Interest income (expense),
 net........................    --     10       62      (63)      (2)     116
                             ----- ------  -------  -------  -------  -------
Net income (loss)........... $  36 $ (154) $(3,348) $(6,211) $(2,269) $(5,261)
                             ===== ======  =======  =======  =======  =======
Pro forma basic and diluted
 net (loss) per share (1)... $0.02 $(0.08) $ (1.34) $ (1.82) $ (0.71) $ (1.28)
                             ===== ======  =======  =======  =======  =======
Shares used in computing
 basic and diluted net loss
 per share (1).............. 1,563  1,993    2,495    3,416    3,177    4,126
</TABLE>

<TABLE>
<CAPTION>
                                               December 31,
                                          -------------------------  June 30,
                                          1995 1996   1997    1998     1999
                                          ---- ----  ------  ------ -----------
                                                                    (unaudited)
                                                     (in thousands)
<S>                                       <C>  <C>   <C>     <C>    <C>
Balance Sheet Data:
Cash and cash equivalents...............  $ 42 $290  $1,029  $4,181   $14,259
Working capital.........................    78   (5)   (317)  2,771    12,169
Total assets............................   123  530   2,918   7,185    18,869
Long-term obligations, including current
 portion................................     0  100       0      20         0
Total stockholders' equity (deficit)....    86  (67)     90   3,371    13,284
</TABLE>
----------
(1) See Note 2 of Notes to Financial Statements for the determination of shares
    used in computing pro forma basic and diluted net loss per share.

                                       21
<PAGE>

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

   The following discussion of the financial condition and results of
operations of Viador should be read in conjunction with the financial
statements and the related notes thereto included elsewhere in this prospectus.
This discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including but not limited to those discussed in "Risk Factors," "Business" and
elsewhere in this prospectus.

Overview

   We are one of the first providers of internet software that enables
businesses to create enterprise information portals. An enterprise information
portal is a single point of access to an organization's electronic information
similar to popular consumer internet portals that provide access to the world
wide web. We believe the Viador E-Portal Suite offers a comprehensive and
integrated enterprise information portal that gives users a single browser-
based interface with which to quickly and easily access up-to-the-minute
information from a variety of enterprise data sources. Our software is
specifically designed for the web and works with a customer's existing hardware
and software systems, without the need for additional technology expenditures.
It provides a highly adaptable platform for the management and sharing of
information on a secure and cost-effective basis that can accommodate
significant increases in the number of users and amount of information. As more
users contribute increasing amounts of information to the portal, we believe
our customers and their users are able to realize greater productivity and
efficiency in their businesses. Since January 1, 1998 over 30 of our customers
have purchased over $50,000 of our products and services, including Charles
Schwab, CIBC, Citibank, IBM, Mitsui, Sprint and Xerox.

   Historically, we have focused our selling efforts in North America and
derived a significant majority of our revenues from North America. However, we
believe that our international sales will increase. We currently have
distribution agreements with partners in Japan and Europe, and we have
delivered our products to customers in Latin America.

   We were incorporated in 1995 as Infospace, Inc., changed our name to Viador,
Inc. in January 1999 and subsequently changed our name to Viador Inc. in May
1999. Since our inception, we have developed web-based products designed to
permit our customers to search, analyze and deliver relevant information to
users within and outside the enterprise. We delivered our first product, Web-
Charts, in September 1996. During the next two years, we introduced more
sophisticated web products and a proprietary web security server product. In
the first quarter of 1999, we first shipped a fully integrated web-based
product suite called the Viador E-Portal Suite, which integrated our prior
product offerings and is now our primary licensed product. Since 1997, revenue
from licenses of our software products has accounted for a majority of revenue
and we expect this trend to continue in the future.

   We derive our revenue from the sale of software product licenses and from
professional consulting, maintenance and support services. In December 1997, we
adopted Statement of Position 97-2 (SOP 97-2), Software Revenue Recognition.
SOP 97-2 generally requires revenue earned on software arrangements involving
multiple elements to be allocated to each element based on its relative fair
value. We recognize product license revenue when persuasive evidence of an
agreement exists, the product has been delivered, the license fee is fixed or
determinable and collection of the fee is probable. Services revenue consists
of fees from professional services and from maintenance and support.
Professional services include integration of software, application development,
training and software installation. We bill professional services fees either
on a time and materials basis or on a fixed-price schedule. We recognize
professional services fees billed on a time and materials basis as the services
are performed. We recognize professional services fees on fixed-price service
arrangements upon the completion of specific contractual milestone events, or
based on an estimated percentage of completion as work progresses. Our clients
typically purchase maintenance agreements annually, and we

                                       22
<PAGE>

price maintenance agreements based on a percentage of the product license fee.
We price telephone support based on differing contracted levels of support.
Customers purchasing maintenance agreements receive future product upgrades and
electronic, web-based technical support and basic ten hours per day, five days
per week telephone support. Customers can also purchase extended telephone
support, available 24 hours per day, seven days per week, for an additional
fee. We recognize revenue from maintenance and support agreements ratably over
the term of the agreement, typically one year. We record cash receipts from
customers and billed amounts due from customers in excess of revenue recognized
as deferred revenue. The timing and amount of revenue recognized from
individual contracts, some of which may represent over 10% of revenue
recognized during a particular quarter, can vary significantly and can
therefore result in significant fluctuations in revenue from one quarter to the
next. Furthermore, the timing and amount of cash receipts from customers can
vary significantly depending on specific contract terms and can therefore have
a significant impact on the amount of deferred revenue in any given period.

   Our cost of revenue includes salaries and related expenses for our customer
support, implementation and training services organizations and costs of
contracting with third parties to provide consulting services to customers. Our
cost of revenue also includes royalties due to third parties for integrated
technology, the cost of manuals and product documentation, production media
used to deliver our products and shipping costs, including the costs associated
with the electronic transmission of software to new customers and an allocation
of our facilities, communications and depreciation expenses. Cost of license
revenue has not been significant to date.

   Our operating expenses are classified into four general categories: sales
and marketing, research and development, general and administrative and
amortization of deferred stock-based compensation. We classify all charges to
these operating expense categories based on the nature of the expenditures.
Although each category includes expenses that are category specific, each
category includes expenses that are common to the other two, such as salaries,
employee benefits, incentive compensation, bonuses, travel and entertainment
costs, telephone expenses, communication expenses, rent and facilities costs,
and third-party professional services fees. The sales and marketing category of
operating expenses includes expenditures specific to the marketing group, such
as sales commissions, public relations and advertising, trade shows, marketing
collateral materials and web seminars. We allocate the total costs for overhead
and facilities to each of the functional areas that use the overhead and
facilities services based on their estimated usage as measured primarily by
headcount. These allocated charges include facility rent for the corporate
office, communication charges and depreciation expense for office furniture and
equipment.

   Since our inception, we have incurred substantial costs to develop our
technology and products, to recruit and train personnel for our engineering,
sales and marketing and professional services departments and to establish an
administrative organization. As a result, we have incurred net losses in each
fiscal quarter since inception and, as of June 30, 1999, had an accumulated
deficit of $14.8 million. We anticipate that our operating expenses will
increase substantially in future quarters as we increase sales and marketing
operations, develop new distribution channels, fund greater levels of research
and development, broaden professional services and support, and improve
operational and financial systems. Accordingly, we expect to incur additional
losses for the foreseeable future. In addition, our limited operating history
makes it difficult for us to predict future operating results and, accordingly,
we cannot assure you that we will achieve or sustain revenue growth or
profitability.

   We had 108 full-time employees at June 30, 1999, up from 83, 61 and 17 at
December 31, 1998, 1997 and 1996, respectively. This rapid growth places a
significant demand on our management and operational resources. In order to
manage growth effectively, we must implement and improve our operational
systems, procedures and controls on a timely basis. In addition, we expect that
future expansion will continue to challenge our ability to hire, train,
motivate, and manage our employees.

   In May 1997, we raised $3.5 million in private equity investment from a
group of investors led by Mitsui Ltd. who, at the same time, purchased from us
exclusive distribution rights for our products in Japan. In August 1998, we
raised an additional $8.5 million in private equity investment from a group of
investors led by

                                       23
<PAGE>

Information Technology Ventures. In May 1999, we raised an additional $14.5
million in private equity investment from a group of investors led by CDB
Venture Management (USA) and Crosslink Technology Partners.

Results of Operations

   The following table sets forth certain statement of operations data as a
percentage of total revenue for the periods indicated:

<TABLE>
<CAPTION>
                                                                     Six
                                                                Months Ended
                                  Years Ended December 31,        June 30,
                                  ----------------------------  --------------
                                  1995   1996    1997    1998    1998    1999
                                  -----  -----  ------  ------  ------  ------
<S>                               <C>    <C>    <C>     <C>     <C>     <C>
Revenue:
  License........................    --%   5.6%   53.0%   59.7%   65.1%   64.8%
  Service........................ 100.0   94.4    47.0    40.3    34.9    35.2
                                  -----  -----  ------  ------  ------  ------
    Total revenue................ 100.0  100.0   100.0   100.0   100.0   100.0
                                  -----  -----  ------  ------  ------  ------
Cost of revenue..................  12.5   31.5    57.1    36.3    36.5    26.6
Gross profit.....................  87.5   68.5    42.9    63.7    63.5    73.4
                                  -----  -----  ------  ------  ------  ------
Operating expenses
  Research and development.......  18.8   36.5    85.4    64.9    63.1    56.9
  Sales and marketing............  13.8   12.6   113.9   112.3   103.0   133.6
  General and administrative.....  10.0   35.9    59.2    35.7    21.3    30.2
  Amortization of stock-based
   compensation..................    --     --      --      --     5.4    16.1
                                  -----  -----  ------  ------  ------  ------
    Total operating expenses.....  42.6   85.0   258.5   224.5   192.8   236.8
Operating loss...................  44.9  (16.5) (215.6) (160.8) (129.3) (159.3)
    Interest income (expense),
     net.........................    --    1.0     4.0    (1.6)   (0.1)    3.5
Net loss.........................  44.9  (15.9) (211.6) (162.4) (129.4) (155.8)
</TABLE>

Six Months Ended June 30, 1999 and 1998

   Revenue. Revenue increased to approximately $3.3 million for the six months
ended June 30, 1999 from approximately $1.8 million for the six months ended
June 30, 1998, representing an increase of approximately $1.5 million, or 88%.
The increase in revenue was due primarily to an increase in the number of new
customers and increased usage by existing customers. This increase in revenue
was attributable to a significant increase in the number of employees in sales
operations and the introduction of the Viador E-Portal Suite.

   License Revenue. License revenue increased to approximately $2.1 million for
the six months ended June 30, 1999, from approximately $1.1 million for the six
months ended June 30, 1998, representing an increase of approximately 87%. The
increase in license revenue was due primarily to an increase in the number of
clients resulting from growing market acceptance of the Viador E-Portal Suite
which first shipped in the first quarter of 1999. These new large customers
were complemented by continuing sales to existing accounts and a number of
smaller new customer sales.

   Services Revenue. Service revenue increased to approximately $1.2 million
for the six months ended June 30, 1999, from $612,000 for the six months ended
June 30, 1998, representing an increase of approximately $588,000, or 89%. This
increase was a result of an increase in services provided in connection with
increasing license sales. This increase included an increase of $305,000 in
consulting revenue and an increase in customer training revenue. The increase
in training revenue reflects the availability of our San Mateo training center
which opened in the second quarter of 1998.

                                       24
<PAGE>

   Cost of Revenue. Cost of revenue increased to $874,000 for the six months
ended June 30, 1999 from $640,000 for the six months ended June 30, 1998,
representing an increase of $234,000, or 37%. The increase was primarily due to
the cost of providing consulting and training services incurred in the six-
month period ended June 30, 1999. We anticipate that our cost of revenue will
grow significantly in future periods in order to accommodate planned increases
in the number of customers and greater utilization of products by existing
customers.

   Research and Development. Research and development expenses consist
primarily of costs associated with new product introductions and product
improvements. Research and development expenses increased to approximately $1.9
million for the six-month period ended June 30, 1999 from approximately $1.1
million for the six-month period ended June 30, 1998, representing an increase
of approximately $800,000, or 69%. This increase was due primarily to a 24%
growth in personnel and personnel related costs, to new product introductions
and to upgrades to the latest computer platforms used by engineers and to a
move to a new facility in April 1998.

   Sales and Marketing. Sales and marketing expenses increased to approximately
$4.4 million for the six months ended June 30, 1999 from approximately $1.8
million during the six months ended June 30, 1998, representing an increase of
$2.6 million, or 143%. Approximately $2.0 million dollars of this increase is
attributable to increased selling expenses, most of which were salary and
commissions paid to salespeople. Marketing expenses doubled during the six
months ended June 30, 1999 over the same period last year, reflecting
advertising campaigns launched for the Viador E-Portal Suite in the first half
of 1999.

   General and Administrative. General and administrative expenses increased to
$996,000 for the six months ended June 30, 1999 from $374,000 during the six
months ended June 30, 1998, representing an increase of $622,000, or 166%. Over
half of the increase was attributable to increases in professional services
fees, primarily legal and accounting fees related to increased business
activities. The remaining expense increases were due primarily to increases in
office space.

   Interest Income, Net. Interest income, net, includes interest income from
our cash and cash equivalents, and investments. Interest expense relates to our
financing obligations, including bank borrowings. Interest expense, net,
increased to $116,000 of interest income for the six months ended June 30, 1999
up from $2,000 of interest expense for the six months ended June 30, 1998,
representing an increase of $118,000. This increase was primarily due to a
higher average cash balance as a result of the proceeds from the issuance of
shares of our preferred stock in August 1998 and May 1999.

Years Ended December 31, 1998, 1997 and 1996

   Revenue. Revenue was approximately $1.0 million, $1.6 million and $3.8
million in 1996, 1997 and 1998, respectively, representing increases of
$585,000, or 59%, from 1996 to 1997 and approximately $2.2 million, or 142%,
from 1997 to 1998. The increase in revenue from 1996 to 1997 consulting was due
primarily to an increase in product license sales as revenue in 1996 primarily
consisted of service revenue. The increase in revenue from 1997 to 1998 was due
primarily to growth in market acceptance of our software products.

   License Revenue. License revenue was $56,000, $839,000 and approximately
$2.3 million in 1996, 1997 and 1998, respectively. Revenue in 1996 for product
sales was low as we shipped our first product only in September of that year.
License revenue increased from 1996 to 1997 in large part because we introduced
two new web-based products which accounted for the majority of the $839,000 in
revenue. License revenue increased 172% from 1997 to 1998 as our products
gained market acceptance.

   Service Revenue. Service Revenue were $941,000, $743,000 and approximately
$1.5 million in 1996, 1997, and 1998, respectively. Our first full year of
operation was 1996, and much of that year was focused on providing customer
database consulting services to confirm the accuracy of the product plan and
direction. In 1997, service revenue dropped by 21% from 1996 because we shifted
our focus to developing and supporting

                                       25
<PAGE>

our software product line. Service revenue climbed by 108% in 1998 compared to
1997 due to our expansion of the services to include customer maintenance and
support services as well as consulting in support of our licensed product
sales.

   Cost of Revenue. Cost of revenue was $314,000, $903,000 and approximately
$1.4 million in 1996, 1997 and 1998, respectively, representing increases of
$589,000, or 187%, from 1996 to 1997 and $484,000, or 54%, from 1997 to 1998.
These increases were due to the additions to our support and consulting
services staff and a new training facility opened in 1998.

   Research and Development. Research and development expenses were $364,000,
approximately $1.4 million and $2.5 million in 1996, 1997 and 1998,
respectively, representing increases of approximately $1.0 million, or 271%,
from 1996 to 1997 and approximately $1.1 million, or 84%, from 1997 to 1998.
These increases were primarily due to growth in personnel and personnel related
costs, to improved quality assurance programs, and to new product program
expenses, as well as a move of engineering staff to a new facility in April
1998.

   Sales and Marketing. Sales and marketing expenses increased from $125,000 in
1996 to approximately $1.8 million in 1997 and approximately $4.3 million in
1998, which represent increases of over 1300% and 138%, respectively. In 1996,
selling expenses only started in the fourth quarter, and marketing was largely
related to trade shows. This trend continued in 1997, as the first commissions
were paid only late in the year, and trade show and related expenses were heavy
throughout the year. The growth in 1998 over 1997 was almost entirely
attributable to selling, commissions and sales travel expense, as marketing
trade show expenses remained constant relative to 1997.

   General and Administrative. General and administrative expenses increased
from $358,000 in 1996 to $936,000 in 1997 and approximately $1.4 million in
1998, which represent year-to-year increases of 161% and 46%, respectively. In
1997, we used the proceeds of the first round of external financing to hire a
small administrative staff and to expand to a second office. Facility expenses
increased in 1998 as our San Mateo offices were consolidated, and new field
offices were opened. Professional expenses, chiefly for legal and accounting
support, increased sharply in 1998 relative to 1997. Depreciation expenses for
new office equipment and amortization of improvements to our San Mateo offices
over two-year leases largely account for the remainder of the increase.

   Interest Income, Net. Interest income, net, was $10,000, $62,000 and an
expense of $63,000 in 1996, 1997 and 1998, respectively, representing an
increase of $52,000 from 1996 to 1997 and a decrease of $125,000 from 1997 to
1998. The increase from 1996 to 1997 was due to a higher average cash balance
as a result of the proceeds from the issuance of shares of our preferred stock
and the decrease from 1997 to 1998 was due to the use of cash for operations
and the payment of interest on a $2.0 million bridge loan obligation starting
in the second quarter.


                                       26
<PAGE>

Quarterly Results of Operations

   The following tables set forth certain unaudited statements of operations
data for the six quarters ended June 30, 1999, as well as the percentages of
our revenues represented by each item. This data has been derived from the
unaudited interim financial statements prepared on the same basis as the
audited financial statements contained herein and, in the opinion of
management, include all adjustments consisting only of normal recurring
adjustments that we consider necessary for a fair presentation of such
information when read in conjunction with the financial statements and notes
thereto appearing elsewhere in this prospectus. The operating results for any
quarter should not be considered indicative of results of any future period.

<TABLE>
<CAPTION>
                                       Three months ended
                         --------------------------------------------------------
                          Mar.      June     Sept.     Dec.      Mar.      June
                           31,       30,      30,       31,       31,       30,
                          1998      1998     1998      1998      1999      1999
                         -------   -------  -------   -------   -------   -------
<S>                      <C>       <C>      <C>       <C>       <C>       <C>
Statement of Operations    (unaudited, dollars in thousands except per
 Data:                                     share data)
Revenue................. $   725   $ 1,029  $   669   $ 1,402   $ 1,228   $ 2,062
Cost of revenue.........     312       328      391       356       353       521
Gross profit............     413       701      278     1,046       875     1,541
Operating expenses:
  Research and
   development..........     521       586      654       720       820     1,051
  Sales and marketing...     836       970    1,214     1,275     1,968     2,429
  General and
   administrative.......     166       208      529       462       305       691
  Amortization of stock-
   based compensation...      --        94      158       193       253       276
                         -------   -------  -------   -------   -------   -------
Total operating
 expenses...............   1,523     1,858    2,555     2,650     3,346     4,447
                         -------   -------  -------   -------   -------   -------
Operating income
 (loss).................  (1,110)   (1,157)  (2,277)   (1,604)   (2,471)   (2,906)
Interest income
 (expense), net.........     (11)       10     (198)     (260)       35        81
                         =======   =======  =======   =======   =======   =======
Net income (loss)....... $(1,121)  $(1,147) $(2,079)  $(1,864)  $(2,436)  $(2,825)
                         =======   =======  =======   =======   =======   =======
Basic and diluted net
 income (loss) per
 share.................. $ (0.35)  $ (0.33) $ (0.56)  $ (0.48)  $ (0.59)  $ (0.62)
                         =======   =======  =======   =======   =======   =======
Weighted average shares
 used in basic and
 diluted net loss per
 share..................   3,219     3,467    3,690     3,900     4,121     4,568
                         =======   =======  =======   =======   =======   =======
As a Percent of Total
 Revenue:
Revenue.................   100.0%    100.0%   100.0%    100.0%    100.0%    100.0%
Cost of revenue.........    43.0      31.9     58.4      25.4      28.7      25.3
                         -------   -------  -------   -------   -------   -------
Gross profit............     6.9      68.1     41.6      74.6      71.3      74.7
Operating expenses:
  Research and
   development..........    71.9         5     97.8      51.4      66.8      50.9
  Sales and marketing...   115.3      94.3    181.5      90.9     160.3     117.8
  General and
   administrative.......    22.9      20.2     79.1      32.9      24.8      33.5
  Amortization of stock-
   based compensation...     0.0       9.1     23.6      13.8      20.6      13.4
                         -------   -------  -------   -------   -------   -------
Total operating
 expenses...............   210.1     180.5    382.0     189.0     272.5     215.6
                         -------   -------  -------   -------   -------   -------
Operating income
 (loss).................  (153.1)   (112.4)  (340.4)   (114.4)   (201.2)   (140.9)
Interest income
 (expense), net.........    (1.5)      1.0    (29.6)    (18.5)      2.9       3.9
                         -------   -------  -------   -------   -------   -------
Net income (loss).......  (154.5)%   111.4%  (310.8)%  (132.9)%  (198.3)% (137.0)%
</TABLE>

   We expect to experience significant fluctuations in our future results of
operations due to a variety of factors, many of which are outside of our
control, including:

  .  demand for and market acceptance of our products and services;

  .  expansion into international markets;

  .  introduction of products and services or enhancements by us and our
     competitors;

                                       27
<PAGE>

  .  competitive factors that affect our pricing;

  .  the timing of customer installations;

  .  the mix of products and services we sell;

  .  the timing and magnitude of capital expenditures, including costs
     relating to the expansion of operations;

  .  the size of customer orders, some of which may account for more than 10%
     of total revenue during a particular quarter;

  .  the hiring and retention of key personnel;

  .  conditions specific to the internet industry and other general economic
     factors; and

  .  new government legislation or regulation.

   In addition, a relatively large portion of our expenses are fixed in the
short-term, particularly with respect to depreciation, real estate and
personnel costs, and therefore our results of operations are particularly
sensitive to fluctuations in revenues. Due to the foregoing factors, we believe
that period-to-period comparisons of our operating results are not necessarily
meaningful and that such comparisons cannot be relied upon as indicators of
future performance.

Liquidity and Capital Resources

   From inception through June 30, 1999, we financed our operations primarily
through private equity placements totaling approximately $26.6 million and
drawdowns from a revolving facility of up to $500,000. At June 30, 1999, we had
an accumulated deficit of approximately $14.8 million and cash and cash
equivalents of approximately $14.3 million.

   Net cash used in our operating activities for the six months ended June 30,
1999 was approximately $3.9 million. The net cash used by operations was
primarily due to working capital requirements and net losses, offset by
increases in accounts payable and accrued expenses. Net cash used in investing
activities was $588,000 for the period ended June 30, 1999, which is comprised
of property and equipment purchases. Net cash provided by financing activities
was approximately $14.6 million and is related primarily to a private placement
of equity securities.

   We have a $2.5 million line of credit with a commercial bank for the purpose
of financing working capital requirements and equipment purchases. As of June
30, 1999, no amount was outstanding thereunder. The loan contains certain
standard covenants, is based on a percentage of qualified outstanding accounts
receivables and is secured by a security interest in certain of our
intellectual property. Interest on borrowings thereunder accrues at the rate of
1% over prime rate for the revolver and 1.5% over prime rate for an equipment
note.

   We believe that the estimated net proceeds from this offering, together with
our existing cash and funds available under our existing credit facilities,
will be sufficient to fund our capital expenditures, cash needs and operating
losses for at least the next 12 months. The execution of our business plan will
require substantial additional capital to fund our operating losses, sales and
marketing expenses, capital expenditures, lease payments and working capital
requirements thereafter. We intend to continue to consider our future financing
alternatives, which may include the incurrence of indebtedness, additional
public or private equity offerings or an equity investment by a strategic
partner. Actual capital requirements may vary based upon the timing and success
of the expansion of our operations. Our capital requirements may change based
upon technological and competitive developments. In addition, several factors
may affect our capital requirements, including:

  .  demand for our products and services or our anticipated cash flow from
     operations being less than expected;

                                       28
<PAGE>

  .  our development plans or projections proving to be inaccurate; or

  .  our engaging in acquisitions or other strategic transactions.

   Other than our $2.5 million line of credit, we have no present commitments
or arrangements assuring us of any future equity or debt financing, and there
can be no assurance that any such equity or debt financing will be available to
us on favorable terms, or at all.

Deferred Stock-based Compensation

   Certain options granted and common stock issued during the 18 months ended
June 30, 1999 have been considered to be compensation. Total deferred stock-
based compensation associated with such equity transactions for the year ended
December 31, 1998 and for the six months ended June 30, 1999 were approximately
$1.6 million and approximately $1.4 million, respectively. These amounts are
being amortized over the vesting periods of the options. Of the total stock
compensation expense, $445,000 was amortized in the 12 months ended December
31, 1998 and $529,000 was amortized in the six months ended June 30, 1999. We
expect amortization of approximately $1.1 million and $805,000 in the years
ended December 31, 1999 and 2000, respectively.

Recent Accounting Pronouncements

   In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No.
133 establishes accounting and reporting standards for derivative financial
instruments and hedging activities related to those instruments, as well as
other hedging activities. Because we do not currently hold any derivative
instruments and do not engage in hedging activities, we expect that the
adoption of SFAS No. 133 will not have a material impact on our financial
position, results of operations, or cash flows. We will be required to adopt
SFAS No. 133 in fiscal 2000.

   In December 1998, the American Institute of Certified Public Accountants'
issued SOP 98-9, Software Revenue Recognition, with Respect to Certain
Arrangements, which requires recognition of revenue using the "residual method"
in a multiple element arrangement when fair value does not exist for one or
more of the delivered elements in the arrangement. Under the "residual method,"
the total fair value of the undelivered elements is deferred and subsequently
recognized in accordance with SOP 97-2. We did not have a material change to
our accounting for revenue as a result of the provisions of SOP 98-9.

Year 2000 Compliance

 Background of Year 2000 Issues

   Many currently installed computer systems and software products are unable
to distinguish between twentieth century dates and twenty-first century dates
because such systems were developed using two digits rather than four to
determine the applicable year. For example, computer programs that have date-
sensitive software may recognize a date using "00" as the year 1900 rather than
the year 2000. This error could result in system failures or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities. As a result, many companies' software and computer systems
may need to be upgraded or replaced to comply with these year 2000
requirements.

 State of Readiness

   Our business is dependent on the operation of numerous systems that could
potentially be affected by year 2000-related problems. Those systems include,
among others:

  .  hardware and software systems used by us to deliver products and
     services to customers, including our proprietary software systems as
     well as software supplied by third parties;

                                       29
<PAGE>

  .  communications networks such as the internet and private intranets;

  .  the internal systems of our customers and suppliers;

  .  software products sold to customers;

  .  the hardware and software systems used internally by us in the
     management of our business; and

  .  non-information technology systems and services, such as power,
     telephone systems and building systems.

   We have established steering committees composed of senior executives and a
year 2000 compliance task force composed of representatives from various
functional areas, including our product, management and information systems
departments. This task force also included outside consultants with expertise
in addressing year 2000 issues. The task force has been charged with the
responsibility of formulating and implementing our year 2000 readiness and is
applying a phased approach to analyzing our operations and relationships as
they relate to the year 2000 problem. The phases of our year 2000 program are
as follows:

  .  establishment of a year 2000 steering committee and task force;

  .  assignment of responsibility for external issues, such as products
     licensed by us, internal issues, such as hardware, facilities,
     equipment, and software;

  .  inventory of all aspects of our operations and third party relationships
     subject to the year 2000 problem;

  .  comprehensive analysis, including impact analysis and cost analysis, of
     our year 2000 readiness; and

  .  remediation, testing and contingency planning.

   We have completed the first two phases of the program, and expect that the
final three phases will be completed for our mission-critical systems by
September 30, 1999 and for all of our systems by October 31, 1999. Because our
plan is still in progress, we have not yet identified and remediated all year
2000 business risks. We estimate that we will spend approximately an additional
$100,000 to complete our year 2000 program.

 Risks Related to Year 2000 Issues

   Based on our assessment to date, we believe the current versions of our
software products are "year 2000 compliant." We have performed various testing
processes to confirm that our products do not have identifiable year 2000
problems. However, we continue to formally retest and document the processes we
have completed and the results thereof. We expect this product retesting and
documentation to be completed by September 30, 1999. We continue to evaluate
the year 2000 compliance of our vendors, and it may be necessary to take
precautions to make sure that our services will continue to function
efficiently. Furthermore, we are also subject to external forces that might
generally affect industry and commerce, such as extended power outages or
widespread failures across the internet, which would create disruptions that
would take time to repair. The time required to make such repairs would depend
on the severity of the power outages or widespread failures. The costs
associated with any such external forces could be material.

   Our products are generally used with sophisticated hardware and complex
software products which may not be year 2000 compliant. The accuracy of the
information generated by our products is inherently dependent on the quality of
the source data from these other hardware and software products. Therefore, to
the extent that the underlying source data is inaccurate or corrupted, or to
the extent that the hardware or software products that generate or store that
data are not year 2000 compliant or are otherwise flawed, the information
generated by our products may be similarly inaccurate or corrupted. Success of
our year 2000 compliance efforts may depend on the success of our customers in
dealing with their year 2000 issues. We sell our products to companies in a
variety of industries, each of which is experiencing different year 2000
compliance issues. Customer difficulties with year 2000 issues might require us
to devote additional resources to resolve underlying problems.


                                       30
<PAGE>

   Although we have not been a party to any litigation or arbitration
proceeding to date involving our products or services and related to year 2000
compliance issues, there can be no assurance that we will not in the future be
required to defend our products or services in such proceedings, or to
negotiate resolutions of claims based on year 2000 issues. The costs of
defending and resolving year 2000-related disputes, regardless of the merits of
such disputes, and any liability for year 2000-related damages, including
consequential
damages, may have a material adverse effect on our business, results of
operations and financial condition. In addition, we believe that purchasing
patterns of customers and potential customers may be affected by year 2000
issues as companies expend significant resources to correct or upgrade their
current software systems for year 2000 compliance or defer additional software
purchases until after 2000. As a result, some customers and potential customers
may have more limited budgets available to purchase software products such as
those offered by us, and others may choose to refrain from changes in their
information technology environment until after 2000. To the extent year 2000
issues cause significant delay in, or cancellation of, decisions to purchase
our products or services, our business would be materially adversely affected.

   We are also reviewing our internal management information and other systems
in order to identify any products, services or systems that are not year 2000
compliant, in order to take corrective action. To date, we have not encountered
any material year 2000 problems with our computer systems or any other
equipment that might be subject to such problems. We continue to formally
document the results of our review. We expect that our review will be completed
and fully documented before year end.

   Our plan for the year 2000 calls for compliance verification of external
vendors supplying software and information systems to us and communication with
significant suppliers to determine the readiness of third parties' remediation
of their own year 2000 issues. As part of our assessment, we are evaluating the
level of validation we will require of third parties to ensure their year 2000
compliance. We could also experience material adverse effects on our business
if we fail to identify all year 2000 dependencies in our systems and in the
systems of our suppliers, customers and financial institutions. We will
identify mission critical business operations and develop contingency plans for
those operations. We presently do not have a contingency plan for handling year
2000 problems that are not detected and corrected prior to their occurrence.
There can be no assurance that the total cost of year 2000 compliance will not
be material to our business. We may not identify and remediate all significant
year 2000 problems on a timely basis, remediation efforts may involve
significant time and expense, and unremediated problems may have a material
adverse effect on our business. See "Risk Factors--Potential year 2000 problems
with our products or internal systems may involve significant time and expense"
and "--Year 2000 considerations among our customers and potential customers may
reduce our sales revenue."

Qualitative and Quantitative Disclosures about Market Risk

   We develop products in the United States and market our products in North
America, Europe and the Asia-Pacific region. As a result, our financial results
could be affected by factors such as changes in foreign currency exchange rates
or weak economic conditions in foreign markets. As all of our sales are
currently made in U.S. dollars, a strengthening of the dollar could make our
products less competitive in foreign markets. Our interest income is sensitive
to changes in the general level of U.S. interest rates, particularly since the
majority of our investments are in short-term instruments. Due to the short-
term nature of our investments, we believe that there is no material risk
exposure. Therefore, no quantitative tabular disclosures are required.

                                       31
<PAGE>

                                    BUSINESS

   The following description contains forward-looking statements that involve
risks and uncertainties. Our actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that may cause the
results to differ include those discussed in "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Overview

   We are one of the first providers of internet software that enables
businesses to create enterprise information portals. An enterprise information
portal is a single point of access to an organization's electronic information
similar to popular consumer internet portals that provide access to the world
wide web. We believe the Viador E-Portal Suite offers a comprehensive and
integrated enterprise information portal that gives users a single browser-
based interface with which to quickly and easily access up-to-the-minute
information from a variety of enterprise data sources. Our software is
specifically designed for the web and works with a customer's existing hardware
and software systems, without the need for additional technology expenditures.
It provides a highly adaptable platform for the management and sharing of
information on a secure and cost-effective basis that can accommodate
significant increases in the number of users and amount of information. As more
users contribute increasing amounts of information to the portal, we believe
our customers and their users are able to realize greater productivity and
efficiency in their businesses. Since January 1, 1998, over 30 of our customers
have purchased more than $50,000 of our products and services, including
Charles Schwab, CIBC, Citibank, IBM, Mitsui, Sprint and Xerox.

Industry Background

   In today's highly competitive environment, businesses are focused on
improving their efficiency, effectiveness and ability to meet customer demands.
Providing diverse internal decision-makers with relevant, accurate and timely
information is a key strategic priority for business and an important element
of achieving competitive advantage. Similarly, sharing information with
customers and suppliers is essential to succeed as an e-business.

 Abundance of Information

   Business decision-makers need quick access to relevant information from a
variety of sources, including the internet, corporate intranets, e-mail,
databases, business applications and other software programs. However, the
large and growing quantity of information, coupled with the lack of effective
solutions for efficiently accessing it and organizing it, make it difficult to
identify and utilize relevant information. Due to this information overload,
businesses need to be able to quickly identify and obtain relevant information
in order to make timely and informed decisions.

 The Proliferation of Disparate Information Technology Formats

   There is a rapidly growing variety of technologies used for creating,
storing and organizing information. These include many different hardware
platforms--such as mainframe computers and client/server network systems, which
may involve using different access terminals and fulfilling multiple access and
security protocols--and different software applications--such as database,
sales force automation, client relationship management, intranet and document
management systems and enterprise resource planning software. However, many of
these hardware platforms and software applications were developed independently
to be operated on a stand-alone basis or without a view to being operated with
other hardware platforms and software applications. As a result of these
different hardware and software formats, it is increasingly difficult and time
consuming to gain access to all relevant information. For example, some
relevant information may only be accessed through a human resources application
using a client/server system, while other relevant information may only be
available from a database on a central mainframe computer. In order to access
all this information, users may

                                       32
<PAGE>

need to open separate software applications, complete separate security
protocols, and perhaps even use different terminals. As the amount of formats
and information grows, it becomes increasingly difficult and time consuming to
navigate around these technological obstacles to obtain relevant information.

 Emergence of the Internet as the Universal Information Infrastructure

   The internet continues to experience rapid growth and expansion as an
important global medium for communications and business due to its cost
effectiveness, extensive reach and ability to handle tremendous growth. The
internet provides a powerful medium for enterprises and their customers,
suppliers and strategic partners to share business information efficiently. We
expect that the ability to share information efficiently over the internet will
become increasingly enhanced and lead growing numbers of enterprises to adopt
web-based information and communication solutions.

 Growth of E-Business

   The internet continues to transform the way that business is conducted. It
can help businesses improve customer satisfaction, reduce cost structures,
globalize operations, foster innovation and accelerate speed to market. E-
business is the use of the internet and emerging technologies to replace or
supplement traditional business channels and practices. As the number of
internet users has grown, enterprises have increasingly viewed the internet as
an opportunity to interact rapidly with a larger number of geographically
distributed offices, employees, customers, suppliers and partners. In many
cases, the adoption of a web-based marketing, communication or financial model
provides enterprises with strategic competitive advantages and can prevent the
loss of market share to aggressive e-business innovators.

 Need for a Comprehensive Solution

   The above factors suggest the need for a solution that facilitates the
organization, access and use of enterprise information by those who require it,
regardless of whether they are users inside the business or outside partners.
However, current solutions generally do not enable companies to use multiple
hardware and software technologies and to organize and securely access
enterprise information through a single interface regardless of its format.

   Although software companies have started to provide internet access to
information stored in their own format, they generally do not provide access to
information stored in other formats. For example, enterprise resource planning
companies have established portals that permit access over the internet to the
structured data contained in their particular products. However, these portals
do not provide access to other sources of structured data, nor do they provide
access to unstructured or event data. Structured data is information from
databases, data marts, data warehouses or enterprise resource planning systems.
Unstructured data is contained in company intranets, on the internet, in
groupware such as Lotus Notes, in document management systems or existing
business intelligence applications. Event data, such as news or stock quotes,
is data which is constantly changing and which is delivered in real time. The
ideal solution would work with all of the enterprise's information technology
and provide integrated access to all enterprise information regardless of
whether the data is structured, unstructured or event data. Furthermore, given
the large amounts of electronic data being generated, the ideal solution would
help users get fast access to personalized and relevant information.

   In addition, a comprehensive solution would work with existing customer
information systems, and would not require the customer to replace or upgrade
its existing technology investments. Furthermore, a comprehensive solution
would utilize the internet, so that it would work through a web browser without
any need to install additional software on users' computers. An internet-based
solution could be implemented quickly, accommodate significant increases in the
number of users and amount of information, and adapt to changes in the
customer's business model. In contrast, we believe that any solution that does
not utilize the internet would have significant difficulty accommodating
substantial increases in the number of users and amount of information.

                                       33
<PAGE>

The Viador E-Portal Suite

   We provide a suite of enterprise software products that enables
organizations to build enterprise information portals which permit quick, easy
access to all enterprise information, facilitates the provision of customized
and personalized information, and permits the secure sharing of enterprise
information both within the enterprise and with outside partners.

   Single Access Point for All Enterprise Information. Our software provides a
single access point to structured, unstructured and event data from multiple
sources within and outside the company. We provide a comprehensive and
integrated enterprise information portal solution which provides access to
customized, up-to-the-minute information quickly and easily.

   Adaptable Web-Based Architecture. In contrast to existing solutions, our
software architecture can accommodate significant increases in the number of
users and amount of information. Our software architecture is designed for the
internet, which means that it:

  .  works through a user's existing web browser,

  .  does not require the installation of any additional software on the
     user's desktop, and

  .  can be quickly rolled-out to thousands of additional users.

Our solution provides a platform for building and enhancing over time the
methods by which our customers organize, retrieve and distribute information.
The open and highly adaptable architecture of our software gives our customers
the flexibility to customize and extend their enterprise portal framework as
their needs evolve. The Viador E-Portal Suite is centralized on the customer's
servers, which makes it cost-effective to deploy and easy to manage a large
number of users. Our information portal platform provides greater benefits to
the enterprise the more users it reaches and the more broadly our software is
deployed.

   Customized and Personalized Information. We address the information overload
problem by helping users locate and retrieve the most pertinent business
information. This capability increases the efficiency of information use by our
customers' employees. Our software allows the organization to focus information
by subject, by user, by department, by role within the organization and
according to other criteria. Its capabilities permit the location of and access
desired information from structured, unstructured and event data sources. In
addition, our software permits each user to customize his or her portal
interface to access and display information in accordance with that user's
needs and preferences. We expect that future versions of our products will be
able to automatically track users' information retrieval patterns over time in
order to further personalize the information provided to each user.

   Combines Ease of Use with Sophisticated Functionality. The Viador E-Portal
Suite provides browser-based searchable access to the entire range of an
organization's enterprise information assets, facilitating location of and
access to information, regardless of the underlying data source. Our browser
interface combines the ease of use of popular consumer internet portals with a
full range of sophisticated search and analysis functionality. The database
access capabilities within our software are all web-based and, unlike
unintegrated database access tools, offer a uniform look and feel for
reporting, query and analytical processing.

   Builds Upon Customers' Existing Investments in Information
Technology. Customers who utilize our software are able to build upon their new
and existing hardware, database applications, enterprise software applications
and other software investments. Because most businesses operate in a diverse
computing environment, our products are designed to interact with and access a
broad range of software platforms and products, including multiple operating
systems, browsers, databases, groupware, intranet sites and major enterprise
resource planning programs.

   Ease of Implementation. The Viador E-Portal Suite is designed to be
implemented rapidly over the web using our customers' existing information
technology. Once installed on an organization's servers, our software

                                       34
<PAGE>

can reach employees enterprise-wide via their existing browsers. New users can
be added in minutes on the customer's servers since no software has to be
installed on the desktop.

   Secure and Selective Access. Security features are essential to permit
customers to become extended enterprises that share confidential information
rapidly over the internet with a large number of geographically distributed
offices, employees, customers, suppliers and partners. Our software allows the
organization to customize information access by individual user and category of
user. Our product's security features operate in conjunction with our
customers' existing security services--such as firewalls, encryption and proxy
servers-- to identify and authenticate users, process requests and securely
deliver sensitive information.

Viador Strategy

   Our goal is to be the leading provider of enterprise information portal
software solutions. Key elements of our strategy include:

   Extend Technology Leadership. We believe we are among the first companies to
provide a solution that has all of the following features:

  .  based on pure internet architecture;

  .  provides search capabilities using internet search technology;

  .  facilitates personalization of the information provided to each user;

  .  designed to accommodate significant increases in the number of users and
     amount of information;

  .  can retrieve and deliver information from different, otherwise
     incompatible sources; and

  .  provides multi-level security.

We intend to enhance our technology by continuing to devote significant
resources to research and development efforts and by forming strategic
relationships that will enable us to further enhance the performance and
adaptability of our software.

   Expand Sales, Distribution and Marketing. We intend to significantly grow
our direct sales organization to expand coverage and penetration of large
enterprise opportunities to take advantage of our innovative technologies. We
are making significant new investments in our corporate and field marketing
capacity as well as efforts to improve awareness of Viador and the Viador E-
Portal Suite solution. In addition, we will continue to exploit and build our
network of resellers of products who also provide related services,
manufacturers who use our software in their product, system integrators who
bring together various hardware and software to solve a specific customer
problem, and distributors to expand our indirect distribution worldwide.

   Increase Use by Existing Customers. The value of our software to our
customers grows as it is deployed more widely throughout the organization,
since our products and service offerings are designed to enable organizations
to deploy enterprise-scale information access and analysis. As more and more
users related to a customer contribute information to the portal, as the
customer adds more users to the portal, and as the users become accustomed to
using information in this way, the value of our software to the customer grows.
As more users contribute increasing amounts of information to the portal, we
believe our customers and their users are able to realize greater productivity
and efficiency in their businesses. For these reasons, we believe that our
success at winning and delivering deployments can be grown to enterprise-wide
adoption of our technology, which would generate significant added revenue.

   Build Strategic Relationships. We have formed strategic relationships
covering marketing, engineering and sales with numerous multinational companies
that are at the forefront of e-business technology. We have an established
marketing arrangement with IBM which has significantly improved our
distribution capabilities and resulted in additional sales. In addition, our
technology is used in IBM's Net.Commerce initiative for

                                       35
<PAGE>

e-commerce storefronts and we are delivering our technology onto the IBM CS/390
enterprise server. Our products are currently distributed in Japan by Mitsui,
who assisted us in adapting our products for Japan and other international
markets. In addition, we have partnered with Infoseek for joint marketing
purposes and to incorporate into our software Infoseek's technologies for
searching and indexing information available on the internet and on our
customers' intranets. We also intend to develop new strategic relationships
with other large hardware, software and e-commerce companies.

   Create Standardized Business Portal Solutions. We are creating a series of
standardized portal formats for specific business uses. These portal formats
provide a turn-key solution by meeting the specific information requirements of
customers with similar business needs. For example, we have developed an e-
commerce portal format to assist e-commerce companies to understand information
regarding shopping behavior of those using their web sites. This contrasts with
the format requirements of a supply chain portal. Our standardized business
portals are designed to significantly reduce the time required to implement the
Viador E-Portal Suite in a tailored format that satisfies a significant portion
of the customer's information needs. Furthermore, these standardized formats
can be customized over time to better suit the information needs of a specific
customer. These standardized portal formats complement our broader sales
strategy by facilitating initial deployments at new customers, so that our
relationship with these customers can develop over time resulting in broader
deployments of our software.

   Build World Class Service and Support Operations. Superior customer service,
training and support is necessary to build long-term customer relationships
that enable enterprise-wide deployments of our software. Our goal is to deliver
technology and services that enable our customers to rapidly implement advanced
technology business solutions throughout their organizations at the lowest
possible cost. To succeed and maintain a competitive edge, we will continue to
build on the success of our Advanced Solutions Division, which uses our core
technology to solve customers' individual problems. We intend to grow our
direct service and support organization to expand our training capabilities and
to provide reliable customer support.

Technology

   We believe the Viador E-Portal Suite offers a comprehensive and integrated
enterprise information portal that gives users a single browser-based interface
with which to quickly and easily access up-to-the-minute information from a
variety of enterprise data sources. Combining this easy-to-use portal interface
with an adaptable server-based information backbone, our software provides
secure access and delivery for structured, unstructured and event data.

 Adaptable Internet Architecture

   The architecture of the Viador E-Portal Suite is designed for the web, which
gives it the ability to accommodate significant increases in the number of
users and the amount of information. Our Software's highly adaptable
architecture and open application programming interface give customers the
added flexibility to customize and extend their enterprise portal framework as
their needs evolve. It is Java-based, it operates on the Microsoft Windows NT
server platform, and we anticipate that it will operate on Unix server
platforms beginning in the third fiscal quarter of 1999. Our software works
with major web servers and browsers, and offers open application processing
interfaces to create custom portals.

   We provide a high-performance, server-based information backbone that
provides data access, content delivery, session management and user security.
We further ensure enterprise-wide scalability through add-on options that
enable multiple servers, distributed throughout a customer's organization, to
work together in servicing user information requests.


                                       36
<PAGE>

 Comprehensive Access

   Our software provides comprehensive information access for the following
categories of data:

  .  structured data, including data from databases, data marts, data
     warehouses and enterprise resource planning systems and other software;

  .  unstructured data, including data contained in company intranets, on the
     internet, in groupware such as Lotus Notes, in document management
     systems and existing business intelligence applications; and

  .  event data, such as news or stock quotes, that is constantly changing
     and which is delivered in real time.

 Information Personalization

   We address the information overload problem by helping users locate and
retrieve the most pertinent business information. This capability increases the
efficiency of information use by our customers' employees. Our software allows
the organization to focus information by subject, by user, by department, by
role within the organization and according to other criteria. Its capabilities
permit the location of and access to desired information from structured,
unstructured and event data sources. In addition, our software permits each
user to customize his or her portal interface to access and display information
in accordance with that user's needs and preferences. We expect that future
versions of our products will be able to automatically track users' information
retrieval patterns over time in order to further personalize the information
provided to each user.

 Secure Information Sharing

   Security features are essential to permit customers to become extended
enterprises that share their confidential information rapidly over the internet
with a large number of geographically distributed offices, employees,
customers, suppliers and partners. Our product's security features operate in
conjunction with our customers' existing security services--such as firewalls,
encryption and proxy servers--to identify and authenticate users, process
requests, and securely deliver sensitive information. These features permit the
enterprise to establish multiple levels of access rights based upon the user's
job function and organizational role.

 Easy Administration

   Our software facilitates the management of enterprise information in large
organizations with thousands of users, giving the system administrator an added
measure of freedom and flexibility to centrally monitor and administer the
system from virtually anywhere. User administration by the user's job function
and organizational role enables the administrator to precisely delineate access
privileges to reports and databases for individual users and groups. The server
management component of our software audits server usage and monitors user
access in real-time.

                                       37
<PAGE>

Products and Services

 Products

   The following diagram briefly describes the products that comprise the
Viador E-Portal Suite:

   [A graphic depicting the flow of information through the components of the
 Viador E-Portal Suite and briefly describing the function of each component.]

                                       38
<PAGE>

   The Viador E-Portal Suite is comprised of the following products, which are
sold both individually and as a suite:

   Viador Sage is a browser-like portal interface that gives users the ability
to search, access, analyze and share business information through a simple
interface similar to popular consumer internet portals. Both organizations and
individual users can customize the Viador Sage interface to meet their
information needs. Viador Sage provides comprehensive data access capabilities
to structured, unstructured and event data. Personalization capabilities enable
the filtering of information by time, subject and job function to improve user
productivity.

   Viador Information Center is a high-performance Java server-based adaptable
information backbone that provides data access, content delivery, session
management and user security. Viador Information Center further ensures that
our software can grow with the enterprise-wide through add-on options that
provide support for additional computers and balancing the needs of multiple
users. These options enable multiple servers, distributed enterprise-wide, to
work together in servicing user information requests.

   Viador Gateway allows customers to choose from a wide range of drivers to
provide access to the data sources they would like to include in the Viador
Information Center. These sources include: Oracle, Sybase, Informix, DB2,
Microsoft SQL Server, Hyperion, Essbase, Oracle Express, WhiteLight, ODBC,
Lotus Notes, Microsoft Office, intranet sites, business intelligence tools and
others.

   Viador Sentinel is an integrated security server for extending secure web-
based access to partners, customers and suppliers over the internet. Sentinel
operates in conjunction with existing security services--such as firewalls,
encryption and proxy servers--to identify and authenticate users, process
requests and securely deliver sensitive information. Viador Sentinel allows
companies to exchange information with e-business customers, suppliers and
partners, thereby facilitating more efficient operations and improving customer
satisfaction.

   Viador Administrator facilitates the management of large customer
information technology environments with thousands of users by giving the
system administrator an added measure of freedom and flexibility to centrally
monitor and administer the system from virtually anywhere. Administration of
users by job responsibilities and role within the organization enables the
administrator to precisely define access privileges to reports and databases
for individual users and groups. A server management feature audits server
usage and monitors user access in real-time.

   In addition, we offer Viador SDK, a software development kit for creating
custom portals to meet the specific needs of an enterprise.

 Services

   Our Advanced Solutions Group offers architectural and technical consulting
services, customer support and training in connection with licenses of our
software. We believe that services are an important part of our success and we
continue to expand our professional services organization.

   Consulting. Our pre-sale and post-sale technology implementation services
are organized into a single organization so that our assigned consulting
engagement team can work with a customer from the initial business problem
discussions through implementation of their solution. We believe that this
allows us to develop greater knowledge of the customers environment and add the
highest level of value. Our consultants are qualified and trained to perform a
wide variety of services including: architectural assessment, prototype
development, installation, configuration and testing of our software and
integration with the customer's existing databases, security and other systems.
Our consultants also help customers develop a strategy for the customers'
enterprise-wide deployment of our software. Once deployed into a customer site
on an engagement, our consultants become advisors and help us discover new
business opportunities around the company.

   Customer Support. We provide product upgrades and customer support through
our customer support program. Customer support personnel are available 24 hours
a day, seven days a week. We also offer

                                       39
<PAGE>

e-mail-based support. Customers generally purchase the first year of product
support at the time they license our software; thereafter, support may be
renewed on an annual basis. Our support engineers will immediately render
assistance to system critical problems and work with the customer to diagnose
the issue and resolve it until the customer is satisfied. Once a customer has
purchased a technical support contract, they are entitled to free upgrades for
the software they have licensed. Our support organization interfaces with our
sales force in identifying new opportunities, product uses and for maintenance
renewals.

   Training. We offer a variety of training programs tailored to particular
user groups, including end users and information technology personnel. Training
classes are offered at customer sites, in various high demand cities and also
at our headquarters in San Mateo, California. We also provide training classes
for third-party service providers, such as systems integrators and
distributors. Viador also offers training for other trainers to expand our
reach to customers. Viador incorporates training early on in the sales cycle to
ensure successful implementations and even sponsors free one-day enterprise
portal training seminars in cities as an early entry into accounts.

Customers

   Our customer base spans multiple industry segments including financial
services, government, healthcare, manufacturing and telecommunications. The
following is a representative list of companies that have purchased over
$50,000 of our products and services since January 1, 1998. We do not intend
the identification of these customers to imply that these customers are
actively endorsing or promoting our products.

<TABLE>
<CAPTION>
Financial                  Energy & Utilities                    High Tech/Telecom
<S>                        <C>                                   <C>
 .  American Century        .  INTESA                             .  3Com
 .  Charles Schwab          .  Pacific Gas & Electric             .  Cisco Systems
 .  CIBC                    .  Retail Energy Transaction Exchange .  IBM
 .  Citibank                Government/Education                  .  Lucent Technologies
 .  Putnam Investments      .  Federal Aviation Administration    .  Nortel
Manufacturing              .  Internal Revenue Service           .  Sprint PCS
 .  Allied Signal           .  University of Buffalo              .  Sterling Software
 .  Raytheon                .  Multnomah County, Oregon           .  Sun Microsystems
Internet                   .  US Department of Defense           .  Sybase
 .  Baker                   Healthcare                            .  Xerox
   Street Technologies
 .  Netcentives             .  Ministry Health Care
 .  FaceTime Communication  Services
 .  Micromuse               .  Gelco Information Systems
                           .  Mitsui
</TABLE>

   The following examples, which are based on information furnished by the
companies listed below, illustrate how certain of our customers use the Viador
E-Portal Suite to perform business-critical tasks:

   Sprint PCS. Sprint PCS provides digital personal communication services over
a nationwide wireless network, covering more than 280 metropolitan areas and
over 1,100 cities. Sprint was rapidly hiring employees, resulting in an
increase from a few hundred users of its information systems to thousands of
users. Sprint sought an enterprise solution that would enable it to deliver to
thousands of users and critical customers financial information from multiple
data sources that normally could only be accessed with a disparate collection
of client/server tools. Sprint knew that it would be cost prohibitive to use
client/server database access tools because the high cost of installing and
maintaining the necessary PC software on thousands of desktops. Sprint
determined that the way to scale its information technology infrastructure was
to use its existing desktop browsers and its intranet. After 90 days following
project initiation, we were able to provide Sprint with a solution that offered
hundreds of users web-based access to a wide variety of financial data sources
through the users' web browsers and the ability to significantly and easily
expand the number of users in the future. In addition to addressing the
scalability issue with the web, Viador offered Sprint a secure way to access
the data on the internet and personalize user access based on the user's job
function.

                                       40
<PAGE>

   Xerox. Xerox offers a wide variety of document-related solutions, products
and services that enhance business productivity. Xerox needed an efficient
method for searching, analyzing and distributing business information from its
many different corporate data sources so that its thousands of employees
worldwide could directly access timely, customized information. Xerox required
a solution that would support thousands of users around the world, which
existing client/server solutions are not capable of efficiently doing. Thus,
Xerox conducted a comprehensive evaluation of web data access solutions, after
which Xerox selected the Viador E-Portal Suite. Xerox chose our software in
order to provide a single solution that can be used across multiple platforms
to access any corporate data source including databases, data warehouses,
desktop applications and enterprise resource planning software applications.
Viador offered Xerox comprehensive user functionality along with a 100% web
software architecture to permit Xerox to deploy the solution worldwide. The
Viador E-Portal Suite is now being used in several areas by Xerox including e-
business channel supply tracking, data warehouse access, and reporting for
customer service administration, human resources/payroll and global service.

Sales

   We sell our software primarily through our domestic direct sales
organization, with sales professionals located in eight regions in the United
States including the North Atlantic, Rocky Mountain, Southeast, Eastern,
Pacific Northwest, South Central, Western and Great Lakes regions. The field
sales force is complemented by direct telesales and telemarketing
representatives based at our headquarters in San Mateo, California. As of June
30, 1999, we employed 16 commission-based sales people. Technical sales support
is provided by sales engineers located in several of the field offices. We
currently intend to add a significant number of sales representatives and sales
engineers in other domestic locations. We use distributors in the Netherlands,
Germany, United Kingdom, Canada, Hong Kong and Japan and plan to expand our
distributor channel to other international markets. See "Risk Factors--Our
growth is dependent upon the successful development of our direct sales model."

   Since our products affect users throughout the customer's organization, our
sales effort involves multiple decision makers and frequently includes the
chief financial officer, vice president of finance, controller and vice
president of purchasing. While the average sales cycle varies substantially
from customer to customer, for initial sales it has generally ranged from three
to nine months. Our sales cycle is affected by seasonal fluctuations as a
result of our customers' fiscal year budgeting cycles and slow summer
purchasing patterns overseas. We typically receive a substantial portion of our
orders in the last two weeks of each fiscal quarter because our customers often
delay purchases of products to the end of the quarter. Also, we expect our
revenue to be higher in the fourth quarter than in other quarters of the year.
Implementation of additional components of our software and broader rollout to
additional users within the organization generally occur over multiyear
periods.

Marketing

   Our marketing efforts are directed at promoting our enterprise information
portal product family, building a leadership position by defining the EIP
market space and increasing our market share in that market. Our marketing
programs are targeted at both mid- to executive-level information technology
professionals as well as line-of-business executives and are focused on
creating awareness of, and generating interest in, our software.

   We engage in a variety of marketing activities, including developing and
executing joint marketing strategies designed to leverage our existing
strategic relationships, managing and maintaining our web site, issuing
newsletters and direct mailings, e-marketing campaigns, creating and placing
advertisements in various media, conducting aggressive public relations
campaigns, and establishing and maintaining close relationships with recognized
industry analysts. We are an active participant in technology-related
conferences and demonstrate our products at trade shows targeted at information
technology audiences. Our marketing campaigns are tightly synchronized with our
sales force to ensure appropriate follow up with sales leads.


                                       41
<PAGE>

   We expect to grow our sales and marketing staff significantly. We believe
that demand is increasing, and will continue to increase, for web enterprise
information access software and services, such as those sold by us. We may not
be able to expand our sales and marketing staff, either domestically or
internationally, to take advantage of any increase in demand for web enterprise
information portals. Our failure to expand our sales and marketing organization
or other distribution channels could materially adversely affect our business.
See "Risk Factors--Our business will suffer if we do not retain and expand our
customer base."

Product Development

   Our development staff is responsible for enhancing our existing products and
expanding our product line. We believe that a technically skilled, quality
oriented and highly productive software development organization will be a key
component of the continued success of our new product offerings. We expect that
we will increase our product development expenditures substantially in the
future.

   Our current product development activities focus on product enhancements to
the Viador E-Portal Suite and the integration of external services and partner
technology. These development efforts may not be completed within our
anticipated schedules, and if completed, they may not have the features
necessary to make them successful in the marketplace. Delays or problems in the
development or marketing of product enhancements or new products could result
in a material adverse effect on our business. See "Risk Factors--Our market
changes rapidly due to changing technology and evolving industry standards, and
our future success will depend on our ability to effectively respond to these
changes" and "--Our plan to sell products as an internet-based application
service provider may fail."

Competition

   The market for our products is intensely competitive, subject to rapid
change and significantly affected by new product introductions and other market
activities of industry participants. Our primary source of direct competition
comes from independent software vendors of corporate portal software, and from
providers of business intelligence tools that have or may be developing
business intelligence portal products. We also face indirect competition from
potential customers' internal development efforts.

   Our major competitors in the corporate portal field tend to be early stage
private companies. In addition, several major business intelligence vendors
have introduced business intelligence portal products as a way to integrate
their business intelligence tools. At least one enterprise resource planning
company has introduced a portal (Peoplesoft) and we expect more will do so.
These companies may begin to sell their product along with their enterprise
resource planning application suites. We also expect to face competition from
new entrants. Most of the major enterprise resource planning providers and
larger business intelligence tools providers have a significantly installed
customer base and have the opportunity to offer additional products to those
customers as additional components of their respective enterprise resource
planning application suites or business intelligence tools.

   We believe that the principal competitive factors considered in selecting
enterprise information portal solutions are comprehensive access to existing IT
infrastructure, security, scalability, personalization and filtering
capabilities and an installed referenceable base of customers. We believe that
our ability to access a wide variety of data sources is a major benefit to
existing and future customers. The corporate portals are targeted at providing
access to unstructured data in the form of websites and documents, while the
business intelligence portals are targeted at integrating and accessing
structured data, and the enterprise resource planning portals are targeted at
individual applications.

   Many of our competitors in both the business intelligence and enterprise
resource planning markets have longer operating histories, significantly
greater financial, technical, marketing and other resources, significantly
greater name recognition and a larger installed base of customers. Moreover, a
number of our competitors, particularly major enterprise resource planning
vendors, have well-established relationships with our current

                                       42
<PAGE>

and potential customers as well as with systems integrators and other vendors
and service providers. In addition, these competitors may be able to respond
more quickly to new or emerging technologies and changes in customer
requirements, or to devote greater resources to the development, promotion and
sale of their products, than we can.

   It is also possible that new competitors, alliances among competitors or
other third parties may emerge and rapidly acquire significant market share. We
expect that competition in our markets will increase as a result of
consolidation and the formation of alliances in the industry. Increased
competition may result in price reductions, reduced gross margins and loss of
market share, any of which could materially adversely affect our business. We
may be unable to compete successfully against current or future competitors and
the competitive pressures we face may materially adversely affect our business.
See "Risk Factors--We may not be able to successfully compete against our
current and future competitors, which could adversely affect our business" and
"--If important strategic relationships are discontinued for any reason, there
may be a material adverse effect on our business, results of operations and
financial condition."

Intellectual Property Rights

   Our success depends upon our proprietary technology. We rely primarily on a
combination of patent, copyright, trade secret and trademark laws,
confidentiality procedures, contractual provisions and other similar measures
to protect our proprietary information. For example, we license rather than
sell our software to customers and require licensees to enter into license
agreements that impose certain restrictions on licensees' ability to utilize
the software. We currently hold two U.S. patents, but we have no patents or
patent applications pending in any foreign countries. There can be no assurance
that any of our patents, copyrights or trademarks will not be challenged or
invalidated.

   As part of our confidentiality procedures, we enter into non-disclosure
agreements with certain of our employees, directors, contractors, consultants,
corporate partners, customers and prospective customers. We also enter into
license agreements with respect to our technology, documentation and other
proprietary information. Those licenses are generally non-transferable and have
a perpetual term. Despite our best efforts to protect our proprietary rights,
unauthorized parties may attempt to copy or otherwise obtain and use our
products or technology that we consider proprietary and third parties may
attempt to develop similar technology independently. In particular, we provide
our licensees with access to object code versions of our software, and other
proprietary information underlying our licensed software. Policing unauthorized
use of our products is difficult, particularly because the global nature of the
internet makes it difficult to control the ultimate destination or security of
software or other data transmitted. While we are unable to determine the extent
to which piracy of our software exists, we expect software piracy to be a
persistent problem. In addition, effective protection of proprietary rights may
be unavailable or limited in certain countries. The laws of some foreign
countries do not protect our proprietary rights to the same extent as do the
laws of the United States. Overall, the protection of our proprietary rights
may not be adequate and our competitors may independently develop similar
technology.

   We are not aware that our products, trademarks, copyrights or other
proprietary rights infringe the proprietary rights of third parties. Third
parties may assert infringement claims against us in the future with respect to
current or future products. Further, we expect that software product developers
will increasingly be subject to infringement claims as the number of products
and competitors in our industry segment grows and the functionality of products
in different industry segments overlaps. From time to time, we hire or retain
employees or consultants who have worked for independent software vendors or
other companies developing products similar to those offered by us. Those prior
employers may claim that our products are based on their products and that we
have misappropriated their intellectual property. Any claims of that variety,
with or without merit, could cause a significant diversion of management
attention, result in costly and protracted litigation, cause product shipment
delays or require us to enter into royalty or licensing agreements. Those

                                       43
<PAGE>

royalty or licensing agreements, if required, may not be available on terms
acceptable to us or at all, which would have a material adverse affect on our
business. See "Risk Factors--Our failure to adequately protect our proprietary
rights may adversely affect us."

Employees

   As of June 30, 1999, we had a total of 108 employees, including 49 people in
sales and marketing, 32 people in engineering, 16 people in operations and 11
people in finance and administration. We believe that our future success will
depend in part on our continued ability to attract, hire and retain qualified
personnel. The competition for those personnel is intense, and there can be no
assurance that we will be able to identify, attract and retain those personnel
in the future. None of our employees is represented by a labor union, and
management believes that our employee relations are good.

Facilities

   We currently lease the following facilities: our corporate headquarters in
San Mateo, California and sales offices in New York, New York, Arlington,
Virginia, League City, Texas, Huntington Beach, California, Palm Coast, Florida
and Sylvan Lake, Michigan.

Legal Proceedings

   We are not a party to any material legal proceedings.

                                       44
<PAGE>

                                   MANAGEMENT

Executive Officers and Directors

   The following table sets forth certain information regarding the executive
officers and directors of Viador as of July 20, 1999:

<TABLE>
<CAPTION>
Name                     Age                                Position
----                     ---                                --------
<S>                      <C> <C>
Stan X. Wang............  37 Chief Executive Officer, President, Chairman of the Board of Directors
Jonathan M. Harding.....  46 Senior Vice President, North American Operations
Raja H. Venkatesh.......  38 Vice President and Chief Financial Officer and Secretary
Ben C. Connors..........  41 Vice President, Business Development
Steven C. Dille.........  39 Vice President, Marketing
Paul C. Vilandre........  57 Vice President
Teddy Kiang(1)..........  46 Director
Dawn G. Lepore..........  45 Director
Chong Sup Park(2).......  51 Director
Virginia M.
 Turezyn(1)(2)..........  41 Director
</TABLE>
----------
(1) Member of Compensation Committee
(2) Member of Audit Committee

   Each director will hold office for the term described below in "--Classified
Board" and until such director's successor is elected and qualified or until
such director's earlier resignation or removal. Each officer serves at the
discretion of the Board of Directors of Viador.

   Stan X. Wang is a co-founder of Viador. Mr. Wang has served as President,
Chief Executive Officer and Chairman of the Board of Directors since Viador was
founded in December 1995. Prior to founding Viador, from January 1995 to
December 1995, Mr. Wang oversaw the data warehouse division of the RightSizing
Group, a software and services company focused on Internet, data warehouse and
large database and financial database applications where he designed and
implemented numerous large enterprise software projects. From July 1990 to
January 1995, Mr. Wang was an architect in Oracle Corporation's information
access tools group. Mr. Wang holds a B.S. in Electrical Engineering from Tsing
Hua University in China, an M.S. in Mathematics from Oregon State University
and an M.S. in Mechanical Engineering from the California Institute of
Technology.

   Jonathan M. Harding has served as Senior Vice President of North American
Operations since April 1998. Prior to joining Viador, from July 1994 to April
1998, Mr. Harding was Managing Partner at Vision Unlimited, an information
technology consulting company. Mr. Harding also served as Vice President of
Professional Services at Brock Control Systems from July 1993 to July 1994.
Previously, Mr. Harding has held senior executive positions at Computer Task
Group and Knowledge Ware. Mr. Harding holds a B.S. in Economics from SUNY-
Brockport and attended the Graduate School of Industrial Administration at
Carnegie Mellon University.

   Raja H. Venkatesh joined Viador as Vice President and Chief Financial
Officer and Secretary in June 1999. Prior to joining Viador, from August 1997
to June 1999, Mr. Venkatesh served as Corporate Treasurer at Maxtor
Corporation, a manufacturer of information storage products for desktop
computer systems. From April 1996 to August 1997, Mr. Venkatesh served as
Director of Corporate Strategy and Development at the Pacific Telesis Group.
Previously, Mr. Venkatesh served in various capacities in the Treasurer's
office of General Motors Corporation from July 1990 to March 1996. Mr.
Venkatesh holds a bachelor's degree in Engineering from the Regional
Engineering College in India and an M.B.A. from the Darden Graduate School of
Business Administration at the University of Virginia.


                                       45
<PAGE>

   Ben C. Connors is a co-founder of Viador. Mr. Connors has served as Vice
President of Business Development since November 1998. Mr. Connors served as
Chief Operating Officer from July 1997 to November 1998 and as Vice President
of Sales and Marketing from January 1996 to July 1997. Prior to joining Viador,
from November 1995 to Jan 1996, Mr. Connors served as Chief Executive Officer
of Quadsoft, Inc., a custom software development and outsourcing company, which
he also co-founded. Mr. Connors also served as Vice President of Sales and
Marketing for The RightSizing Group from May 1994 to November 1995. Previously,
Mr. Connors held sales and marketing management positions with The ASK Group,
Oracle Corporation and Hewlett-Packard Company. Mr. Connors holds a B.S. in
Mechanical Engineering from Stanford University and a M.B.A. from Harvard
Business School.

   Steven C. Dille has served as Vice President of Marketing since December
1997. Prior to joining Viador, from February 1992 to November 1997, Mr. Dille
served in the marketing division at Sybase, Inc., a global independent software
company, most recently as director of data warehousing. Previously, Mr. Dille
has held marketing and technology leadership positions at Hewlett-Packard
Company, NCR and as an independent consultant. Mr. Dille holds a B.S. in
Computer Science and Mathematics from the University of Pittsburgh and a M.B.A.
in Marketing and Finance from The University of Chicago.

   Paul C. Vilandre has served as Vice President since November 1997 and
previously served as Chief Financial Officer and Secretary. Prior to joining
Viador, from January 1996 to August 1996, Mr. Vilandre served as Vice President
of Finance and Chief Financial Officer of Metra Corporation and from September
1993 to August 1995, he served as Vice President of Finance and Chief Financial
Officer of Axil Computers, Inc. Mr. Vilandre was a professor in finance at San
Jose State University before joining Viador. Previously, Mr. Vilandre held
financial management positions at Intel Corporation, Digital Equipment
Corporation and IBM Corporation. Mr. Vilandre has served as Area Vice President
and National Director for the Financial Executives Institute, an international
organization of senior financial officers. Mr. Vilandre holds a B.A. in
Accounting from Loyola College and an M.B.A. from Harvard Business School.

   Teddy Kiang has served as a director since April 1997. Mr. Kiang is a
Managing Director of Crosslink Technology Partners, an early stage venture
capital firm, specializing in funding and developing healthcare, network and
information technology ventures. From July 1990 to September 1995, Mr. Kiang
was the program director and a business development executive for the Point-of-
Care Coagulation product system at Boeringer Mannheim Corporation, a
biotechnology firm. From August 1980 to July 1990, Mr. Kiang served as a
project manager in the Medical Products Group at Hewlett Packard Laboratories.
Mr. Kiang serves on the Board of Directors of two privately-held companies as
the investment representative of Standard Foods Taiwan, Ltd., a publicly traded
company in Taiwan. He also serves as a special advisor to the Chairman of
AboveNet Communications, Inc. Mr. Kiang holds an M.S. in Chemistry from
Columbia University and a Ph.D. in Chemical Physics from Stanford University.

   Dawn G. Lepore has served as a director since July 1999. Ms. Lepore is
Executive Vice President and Chief Information Officer and a member of the
Management Committee of The Charles Schwab Corporation, where she has served
for over fifteen years in various capacities. Prior to her appointment as Chief
Information Officer at Schwab in 1993, Ms. Lepore served as Senior Vice
President of Information Technology at Schwab, responsible for the development
of a wide range of systems to support Schwab's growing product offerings and
client base. She also led a strategic initiative for redesigning Schwab's
entire technology platform. Prior to joining Schwab in 1983, Ms. Lepore was
employed at Informatics, an information consulting firm in San Francisco. Ms.
Lepore serves on the Board of Directors of Times Mirror Company, a publisher of
several daily news and specialty publications. Ms. Lepore holds a B.A. in Music
from Smith College.

   Chong Sup Park has served as a director since March 1999. Mr. Park is
President and Chief Executive Officer of Hyundai Electronics America. Prior to
joining Hyundai, from February 1995 to August 1996, Mr. Park served as
President and Chief Executive Officer of Maxtor Corporation, a manufacturer of
information storage products for desktop computer systems. From July 1993 to
January 1995, Mr. Park served as President and Chief Executive Officer of Axil
Computers Inc. Mr. Park serves on the board of directors of several companies,
both publicly and privately held, which include Maxtor Corporation, Artecon,
Inc.,

                                       46
<PAGE>

ChipPAC, Inc. and MMC, Inc. Mr. Park holds a B.A. in Business Administration
from Yonsei University in Seoul, Korea, a M.B.A. from The University of Chicago
and a doctorate in Business Administration from Nova Southeastern University.

   Virginia Turezyn has served as a director since September 1998. Ms. Turezyn
co-founded Information Technology Ventures, a venture capital firm in September
1994 and has served as a General Partner since its founding. From April 1982 to
September 1994, she served in a variety of capacities at Morgan Stanley &
Company, Inc., including most recently as Vice President in the Venture Capital
Group. Ms. Turezyn serves on the Board of Directors of several privately held
companies. Ms. Turezyn holds a B.A. in Accounting from Queens College and is a
Certified Public Accountant.

Director Compensation

   Directors of Viador receive $1,000 for each board meeting attended if in
person and $500 if attended telephonically. Directors also receive $500 for
each board committee meeting attended if in person and $250 if attended
telephonically. All directors are also reimbursed for their reasonable out-of-
pocket expenses in serving on the Board of Directors or any Committee thereof.
Directors are eligible to receive equity incentives in the form of stock option
grants or direct stock issuances under our 1999 Stock Incentive Plan.

Classified Board

   Our certificate of incorporation provides for a classified Board of
Directors consisting of three classes of directors, each serving staggered
three-year terms. As a result, a portion of our Board of Directors will be
elected each year. To implement the classified structure, prior to the
consummation of the offering, one of the nominees to the board will be elected
to one-year terms, two will be elected to two-year terms and two will be
elected to three-year terms. Thereafter, directors will be elected for three-
year terms. Virginia M. Turezyn has been designated a Class I director whose
term expires at the 2000 annual meeting of stockholders. Dawn G. Lepore and
Chong Sup Park have been designated Class II directors whose terms expire at
the 2001 annual meeting of stockholders. Stan X. Wang and Teddy Kiang have been
designated Class III directors whose terms expire at the 2002 annual meeting of
stockholders. See "Description of Capital Stock--Certain Anti-takeover, Limited
Liability and Indemnification Provisions."

Board Committees

   The audit committee of the Board of Directors consists of Chong Sup Park and
Virginia Turezyn. The audit committee reviews our financial statements and
accounting practices, makes recommendations to the Board of Directors regarding
the selection of independent auditors and reviews the results and scope of our
annual audit and other services provided by our independent auditors.

   The compensation committee of the Board of Directors consists of Teddy Kiang
and Virginia Turezyn. The compensation committee makes recommendations to the
Board of Directors concerning salaries and incentive compensation for our
officers and employees and administers our employee benefit plans.

Compensation Committee Interlocks and Insider Participation

   None of the members of the compensation committee of the Board of Directors
was at any time since the formation of Viador an officer or employee of Viador.
No executive officer of Viador serves as a member of the Board of Directors or
compensation committee of any entity that has one or more executive officers
serving on our Board of Directors or our compensation committee of the Board of
Directors.


                                       47
<PAGE>

                  EXECUTIVE COMPENSATION AND OTHER INFORMATION

Summary of Cash and Certain Other Compensation

   The following table sets forth the compensation earned by our Named
Executive Officers which include our Chief Executive Officer and our four other
executive officers whose salary and bonus for services rendered to Viador for
the fiscal year ended December 31, 1998 exceeded $100,000. Since such date,
certain of these executive officers have been succeeded by new persons and we
have added additional officers. For a list of our current executive officers
and certain members of senior management, see "Management."

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                   Long Term
                                                1998 Annual       Compensation
                                                Compensation         Awards
                                              ------------------- ------------
                                                                   Number of
                                                                   Securities
                                                                   Underlying
Name and Principal Position(s)                 Salary      Bonus   Options(1)
------------------------------                --------    ------- ------------
<S>                                           <C>         <C>     <C>
Stan X. Wang................................. $100,000    $20,000   898,783
 President, Chief Executive Officer and
 Chairman of the Board of Directors
Jonathan M. Harding(2)....................... $ 73,920(3)      --    79,167
 Senior Vice President of North American
 Operations
Ben Connors.................................. $105,000    $ 5,000        --
 Vice President of Business Development
Steven C. Dille.............................. $115,000    $ 7,500    58,334
 Vice President of Marketing
Paul C. Vilandre............................. $100,000    $15,000    96,222
 Vice President of Administration and
  Secretary
</TABLE>
----------
(1) The options listed in the table were originally granted under either our
    1996 Stock Option/Stock Issuance Plan or our Amended and Restated 1997
    Stock Option/Stock Issuance Plan. These options will be incorporated into
    the new 1999 Stock Incentive Plan, but will continue to be governed by
    their existing terms. See "--Executive Compensation and Other Information--
    Employee Benefit Plans."

(2) Mr. Harding has served as Senior Vice President of North American
    Operations since April 1998.

(3) Mr. Harding's annual base salary was $115,000.

                                       48
<PAGE>

Stock Options and Stock Appreciation Rights

   The following table sets forth information regarding option grants to each
of the Named Executive Officers during the fiscal year ended December 31, 1998.
No stock appreciation rights were granted to the Named Executive Officers
during the 1998 fiscal year.

                    Stock Option Grants in Fiscal Year 1998

<TABLE>
<CAPTION>
                                                                            Potential
                                                                        Realizable Value
                                                                           at Assumed
                                                                         Annual Rates of
                          Number of  Percentage of                         Stock Price
                         Securities  Total Options Exercise             Appreciation for
                         Underlying   Granted to     Price                 Option Term
                           Options   Employees in  Per Share Expiration -----------------
          Name           Granted (#)     1998       ($/Sh)      Date       5%       10%
          ----           ----------- ------------- --------- ---------- -------- --------
<S>                      <C>         <C>           <C>       <C>        <C>      <C>
Stan X. Wang............       --          --           --         --         --       --
Ben Connors.............       --          --           --         --         --       --
Jonathan Harding........   79,167        11.7%       $0.24    4/19/08   $ 11,949 $ 30,281
Steven Dille............       --          --           --         --         --       --
Paul C. Vilandre........       --          --           --         --         --       --
</TABLE>

Aggregated Option/SAR Exercises and Fiscal Year-End Values

   The following table sets forth information with respect to the Named
Executive Officers concerning their exercise of stock options during the fiscal
year ended December 31, 1998 and the number of shares subject to unexercised
stock options held by them as of the close of such fiscal year. No stock
appreciation rights were exercised during the fiscal year ended December 31,
1998, and no stock appreciation rights were outstanding at the close of such
year.

            Aggregated Option Exercises in 1998 and Year-End Values

<TABLE>
<CAPTION>
                                                     Number of Securities      Value of Unexercised
                                                    Underlying Unexercised     In-the-Money Options
                            Shares                    Options at Year-End         at Year-End(1)
                         Acquired on     Value     ------------------------- -------------------------
Name                     Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
----                     ------------ ------------ ----------- ------------- ----------- -------------
<S>                      <C>          <C>          <C>         <C>           <C>         <C>
Stan X. Wang............      --           --        898,783         --      $3,623,893        --
Ben Connors.............      --           --             --         --              --        --
Jonathan Harding........      --           --         79,167         --      $  304,000        --
Steven Dille............      --           --         58,334         --      $  224,000        --
Paul C. Vilandre........      --           --         96,222         --      $  369,490        --
</TABLE>
----------
(1) Based upon the fair market value per share at the close of the 1998 fiscal
    year of $4.08 less the exercise price payable per share.

Employee Benefit Plans

 1999 Stock Incentive Plan.

   Introduction. The 1999 Stock Incentive Plan is intended to serve as the
successor program to both our 1996 Stock Option/Stock Issuance and 1997 Stock
Option/Stock Issuance Plans. The 1999 plan was adopted by the board on July 20,
1999 and has not yet been approved by our stockholders. The 1999 plan will
become effective when the underwriting agreement for this offering is signed.
At that time, all outstanding options under our existing 1996 and 1997 plans
will be transferred to the 1999 plan, and no further option grants will be made
under the 1996 or 1997 plans. The transferred options will continue to be
governed by their existing terms, unless our compensation committee decides to
extend one or more features of the 1999 plan to those options. Except as
otherwise noted below, the transferred options have substantially the same
terms as will be in effect for grants made under the discretionary option grant
program of our 1999 plan.

                                       49
<PAGE>

   Share Reserve. 12,292,000 shares of our common stock have been authorized
for issuance under the 1999 plan. This share reserve consists of the number of
shares we estimate will be carried over from the 1996 and 1997 plans plus an
additional increase of approximately 3,000,000 shares. The share reserve under
our 1999 plan will automatically increase on the first trading day in January
each calendar year, beginning with calendar year 2000, by an amount equal to
four percent of the total number of shares of our common stock outstanding on
the last trading day of December in the prior calendar year, but in no event
will this annual increase exceed 3,000,000 shares. In addition, no participant
in the 1999 plan may be granted stock options or direct stock issuances for
more than 1,000,000 shares of common stock in total in any calendar year.

   Programs. Our 1999 plan has five separate programs:

  .  the discretionary option grant program, under which eligible individuals
     in our employ may be granted options to purchase shares of our common
     stock at an exercise price not less than the fair market value of those
     shares on the grant date;

  .  the stock issuance program, under which eligible individuals may be
     issued shares of common stock directly, upon the attainment of
     performance milestones or the completion of a specified period of
     service or as a bonus for past services;

  .  the salary investment option grant program, under which our executive
     officers and other highly compensated employees may be given the
     opportunity to apply a portion of their base salary each year to the
     acquisition of special below market stock option grants;

  .  the automatic option grant program, under which option grants will
     automatically be made at periodic intervals to eligible non-employee
     board members to purchase shares of common stock at an exercise price
     equal to the fair market value of those shares on the grant date; and

  .  the director fee option grant program, under which our non-employee
     board members may be given the opportunity to apply a portion of any
     director or retainer fee otherwise payable to them in cash each year to
     the acquisition of special below-market option grants.

   Eligibility. The individuals eligible to participate in our 1999 plan
include our officers and other employees, our board members and any consultants
we hire.

   Administration. The discretionary option grant and stock issuance programs
will be administered by our compensation committee. This committee will
determine which eligible individuals are to receive option grants or stock
issuances under those programs, the time or times when the grants or issuances
are to be made, the number of shares subject to each grant or issuance, the
status of any granted option as either an incentive stock option or a
nonstatutory stock option under the federal tax laws, the vesting schedule to
be in effect for the option grant or stock issuance and the maximum term for
which any granted option is to remain outstanding. The compensation committee
will also have the authority to select the executive officers and other highly
compensated employees who may participate in the salary investment option grant
program in the event that program is put into effect for one or more calendar
years.

   Plan Features. Our 1999 plan will include the following features:

  .  The exercise price for any options granted the plan may be paid in cash
     or in shares of our common stock valued at fair market value on the
     exercise date. The option may also be exercised through a same-day sale
     program without any cash outlay by the optionee.

  .  The compensation committee will have the authority to cancel outstanding
     options under the discretionary option grant program, including any
     transferred options from our 1996 or 1997 plans, 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 our common
     stock on the new grant date.

  .  Stock appreciation rights may be issued under the discretionary option
     grant program. These rights will provide the holders with the election
     to surrender their outstanding options for a payment from

                                       50
<PAGE>

     us equal to the fair market value of the shares subject to the
     surrendered options less the exercise price payable for those shares. We
     may make the payment in cash or in shares of our common stock. None of
     the options under our 1996 or 1997 plan have any stock appreciation
     rights.

   Change in Control. The 1999 plan will include the following change in
control provisions which may result in the accelerated vesting of outstanding
option grants and stock issuances:

  .  In the event that we are acquired by merger or asset sale, each
     outstanding option under the discretionary option grant program which is
     not to be assumed by the successor corporation will immediately become
     exercisable for all the option shares, and all outstanding unvested
     shares will immediately vest, except to the extent our repurchase rights
     with respect to those shares are to be assigned to the successor
     corporation.

  .  The compensation committee will have complete discretion to grant one or
     more options which will become exercisable for all the option shares in
     the event those options are assumed in the acquisition but the
     optionee's service with us or the acquiring entity is subsequently
     terminated. The vesting of any outstanding shares under our 1999 plan
     may be accelerated upon similar terms and conditions.

  .  The compensation committee may grant options and structure repurchase
     rights so that the shares subject to those options or repurchase rights
     will immediately vest in connection with a successful tender offer for
     more than fifty percent of our outstanding voting stock or a change in
     the majority of our board through one or more contested elections. Such
     accelerated vesting may occur either at the time of such transaction or
     upon the subsequent termination of the individual's service.

  .  The options currently outstanding under our 1996 and 1997 plans will
     immediately vest in the event we are acquired, unless those options are
     assumed by the acquiring entity or our repurchase rights with respect to
     any unvested shares subject to those options are assigned to such
     entity. However, several options outstanding under the 1996 and 1997
     plans contain additional acceleration provisions. Some of those options
     will vest up to 50% of the unvested shares immediately upon the
     acquisition, whether or not those options are assumed, and other of
     those options will immediately vest upon an involuntary termination of
     the optionee's employment within 18 months following an acquisition in
     which those options are assumed.

   Salary Investment Option Grant Program. In the event the compensation
committee decides to put this program into effect for one or more calendar
years, each of our executive officers and other highly compensated employees
may elect to reduce his or her base salary for the calendar year by an amount
not less than $10,000 nor more than $50,000. Each selected individual who makes
such an election will automatically be granted, on the first trading day in
January of the calendar year for which his or her salary reduction is to be in
effect, an option to purchase that number of shares of common stock determined
by dividing the salary reduction amount by two-thirds of the fair market value
per share of our common stock on the grant date. The option will have exercise
price per share equal to one-third of the fair market value of the option
shares on the grant date. As a result, the option will be structured so that
the fair market value of the option shares on the grant date less the exercise
price payable for those shares will be equal to the amount of the salary
reduction. The option will become exercisable in a series of twelve equal
monthly installments over the calendar year for which the salary reduction is
to be in effect.

   Automatic Option Grant Program. Each individual who first becomes a non-
employee board member at any time after the effective date of this offering
will receive an option grant to purchase 15,000 shares of common stock on the
date such individual joins the board. In addition, on the date of each annual
stockholders meeting held after the effective date of this offering, each non-
employee board member who is to continue to serve as a non-employee board
member, including each of our current non-employee board members, will
automatically be granted an option to purchase 5,000 shares of common stock,
provided such individual has served on the board for at least six months.


                                       51
<PAGE>

   Each automatic grant will have an exercise price per share equal to the fair
market value per share of our common stock on the grant date and will have a
term of 10 years, subject to earlier termination following the optionee's
cessation of board service. The option will be immediately exercisable for all
of the option shares; however, we may repurchase, at the exercise price paid
per share, any shares purchased under the option which are not vested at the
time of the optionee's cessation of board service. The shares subject to each
initial 15,000-share automatic option grant will vest in a series of six
successive semi-annual installments upon the optionee's completion of each six-
month of board service over the thirty-six-month period measured from the grant
date. However, the shares will immediately vest in full upon certain changes in
control or ownership or upon the optionee's death or disability while a board
member. The shares subject to each annual 5,000-share automatic grant will be
fully-vested when granted.

   If the financial accounting treatment for non-employee director stock
options proposed in the March 31, 1999 Exposure Draft of the Financial
Accounting Standards Board under APB Opinion No. 25 is adopted, then following
changes shall be made to the foregoing provisions of the Automatic Option Grant
Program:

  .  The 15,000-share option grant shall not be made to a newly-elected or
     appointed non-employee Board member until the first Annual Stockholders
     Meeting held more than twelve months after the date of his or her
     initial election or appointment to the Board. At that annual meeting,
     the non-employee Board member shall also receive an option grant for an
     additional 5,000 shares under the annual grant portion of the Automatic
     Option Grant Program.

  .  One-third of the shares subject to the 15,000-share option grant shall
     be immediately vested at the time of the option grant, and the remaining
     shares shall vest in a series of four successive equal semi-annual
     installments upon the Optionee's completion of each six-month period of
     Board service over the twenty-four-month period measured from the grant
     date.

   Director Fee Option Grant Program. If this program is put into effect in the
future, then each non-employee board member may elect to apply all or a portion
of any cash retainer fee for the calendar year to the acquisition of a below-
market option grant. The option grant will automatically be made on the first
trading day in January in the calendar year for which the non-employee board
member would otherwise be paid the cash retainer fee in the absence of his or
her election. The option will have an exercise price per share equal to one-
third of the fair market value of the option shares on the grant date, and the
number of shares subject to the option will be determined by dividing the
amount of the retainer fee applied to the program by two-thirds of the fair
market value per share of our common stock on the grant date. As a result, the
option will be structured so that the fair market value of the option shares on
the grant date less the exercise price payable for those shares will be equal
to the portion of the director or retainer fee applied to that option. The
option will become exercisable in a series of twelve equal monthly installments
over the calendar year for which the election is in effect. However, the option
will become immediately exercisable for all the option shares upon the death or
disability of the optionee while serving as a board member.

   Additional Program Features. Our 1999 plan will also have the following
features:

  .  Outstanding options under the salary investment and director fee option
     grant programs will immediately vest if we are acquired by a merger or
     asset sale or if there is a successful tender offer for more than 50% of
     our outstanding voting stock or a change in the majority of our board
     through one or more contested elections.

  .  Limited stock appreciation rights will automatically be included as part
     of each grant made under the salary investment option grant program and
     the automatic and director fee option grant programs, and these rights
     may also be granted to one or more officers as part of their option
     grants under the discretionary option grant program. Options with this
     feature may be surrendered to us upon the successful completion of a
     hostile tender offer for more than 50% of our outstanding voting stock.
     In return for the surrendered option, the optionee will be entitled to a
     cash distribution from us in an amount per surrendered option share
     based upon the highest price per share of our common stock paid in that
     tender offer.

                                       52
<PAGE>

  .  The board may amend or modify the 1999 plan at any time, subject to any
     required stockholder approval. The 1999 plan will terminate no later
     than June 15, 2009.

 1999 Employee Stock Purchase Plan.

   Introduction. Our 1999 Employee Stock Purchase Plan was adopted by the board
on July 20, 1999 and has not yet been approved by our stockholders. The plan
will become effective immediately upon the signing of the underwriting
agreement for this offering. The plan is designed to allow our eligible
employees and the eligible employees our participating subsidiaries to purchase
shares of common stock, at semi-annual intervals, with their accumulated
payroll deductions.

   Share Reserve. 300,000 shares of our common stock will initially be reserved
for issuance. The reserve will automatically increase on the first trading day
in January each calendar year, beginning in calendar year 2000, by an amount
equal to one percent of the total number of outstanding shares of our common
stock on the last trading day in December in the prior calendar year. In no
event will any such annual increase exceed 500,000 shares.

   Offering Periods. The plan will have a series of successive offering
periods, each with a maximum duration of 24 months. The initial offering period
will start on the date the underwriting agreement for the offering covered is
signed and will end on the last business day in October 2001. The next offering
period will start on the first business day in November 2001, and subsequent
offering periods will set by our compensation committee.

   Eligible Employees. Individuals scheduled to work more than 20 hours per
week for more than 5 calendar months per year may join an offering period on
the start date or any semi-annual entry date within that period. Semi-annual
entry dates will occur on the first business day of May and November each year.
Individuals who become eligible employees after the start date of an offering
period may join the plan on any subsequent semi-annual entry date within that
offering period.

   Payroll Deductions. A participant may contribute up to 15% of his or her
cash earnings through payroll deductions, and the accumulated deductions will
be applied to the purchase of shares on each semi-annual purchase date. The
purchase price per share will be equal to 85% of the fair market value per
share on the participant's entry date into the offering period or, if lower,
85% of the fair market value per share on the semi-annual purchase date. Semi-
annual purchase dates will occur on the last business day of April and October
each year. However, a participant may not purchase more than 750 shares on any
purchase date, and not more than 75,000 shares may be purchased in total by all
participants on any purchase date. Our compensation committee will have the
authority to change these limitations for any subsequent offering period.

   Reset Feature. If the fair market value per share of our common stock on any
purchase date is less than the fair market value per share on the start date of
the two-year offering period, then that offering period will automatically
terminate, and a new two-year offering period will begin on the next business
day. All participants in the terminated offering will be transferred to the new
offering period.

   Change in Control. Should we be acquired by merger or sale of substantially
all of our assets or more than fifty percent of our voting securities, then all
outstanding purchase rights will automatically be exercised immediately prior
to the effective date of the acquisition. The purchase price will be equal to
85% of the market value per share on the participant's entry date into the
offering period in which an acquisition occurs or, if lower, 85% of the fair
market value per share immediately prior to the acquisition.

   Plan Provisions. The following provisions will also be in effect under the
plan:

  .  The plan will terminate no later than the last business day of October
     2009.

  .  The board may at any time amend, suspend or discontinue the plan.
     However, certain amendments may require stockholder approval.

                                       53
<PAGE>

Change of Control Arrangements

   A limited number of employees have stock options that will partially
accelerate upon a change of control. Typically, one half of the person's
options will vest upon a change of control.

Limitation of Liability and Indemnification

   Our certificate of incorporation eliminates, to the fullest extent permitted
by Delaware law, liability of a director to Viador or our stockholders for
monetary damages for conduct as a director. Although liability for monetary
damages has been eliminated, equitable remedies such as injunctive relief or
rescission remain available. In addition, a director is not relieved of his or
her responsibilities under any other law, including the federal securities
laws.

   Our certificate of incorporation requires us to indemnify our directors to
the fullest extent permitted by Delaware law. We have also entered into
indemnification agreements with each of our directors. We believe that the
limitation of liability provisions in our certificate of incorporation and
indemnification agreements may enhance our ability to attract and retain
qualified individuals to serve as directors. See "Description of
Capital Stock."


                                       54
<PAGE>

                              CERTAIN TRANSACTIONS

   Since June 30, 1999, there has not been, nor is there currently proposed,
any transaction or series of similar transactions to which we were or are to be
a party in which the amount involved exceeded or will exceed $60,000 and in
which any director, executive officer, holder of more than 5% of our common
stock or any member of the immediate family of any of the foregoing persons had
or will have a direct or indirect material interest other than (A) compensation
agreements and other arrangements, which are described where required in
"Management" and (B) the transactions described below.

Preferred Stock Financings

   Since May 23, 1997, we have issued 5,990,385 shares of our Series C
Preferred Stock at a price of $2.434 per share, 6,632,716 shares of our Series
B Preferred Stock at a price of $1.30 per share and 3,703,764 shares of our
Series A Preferred Stock at a price of $1.031 per share in a series of private
financings. We issued these securities pursuant to preferred stock purchase
agreements and an investors' rights agreement on substantially similar terms
(except for terms relating to date and price), under which we made standard
representations, warranties, and covenants, and which provided the purchasers
thereunder with registration rights, information rights, and rights of first
refusal, among other provisions standard in venture capital financings. Each
share of our preferred stock will automatically convert into 0.417 shares of
our common stock upon the completion of the offering. The purchasers of our
preferred stock included, among others, the following holders of 5% or more of
our common stock, directors, and entities associated with directors:

<TABLE>
<CAPTION>
                           Shares of Preferred Stock
                                   Purchased
                          ------------------------------
                          Series
Name                         A    Series B     Series C
----                      ------- ---------    ---------
<S>                       <C>     <C>          <C>
Stan X. Wang............   11,737        --           --
Ruby McGrath............   17,606        --           --
Y. P. Cheng.............  176,056        --           --
Teddy Kiang & Sylvia Te-
 Yi Kiang...............   58,685        --      246,508
Crosslink Semiconductor,
 Inc. (Taiwan)(1).......  586,854        --           --
Information Technology
 Ventures II, L.P.(2)...       -- 4,230,770(3) 1,027,116(3)
Standard Foods Taiwan,
 Ltd.(4)................       -- 1,185,996           --
</TABLE>
----------
(1) Teddy Kiang, a director of Viador, is the investment representative of
    Crosslink Semiconductor, Inc. (Taiwan).

(2) Virginia Turezyn, a director of Viador, is a principal member of ITV
    Management II, LLC, the general partner of Information Technology Ventures
    II, L.P.

(3) Includes shares held by ITV Affiliates Fund II, L.P., an entity affiliated
    with Information Technology Ventures II, L.P.

(4) Teddy Kiang, a director of Viador, is the investment representative for
    Standard Foods Taiwan, Ltd.

Amended and Restated Investors' Rights Agreement

   Pursuant to the terms of an Amended and Restated Investors' Rights Agreement
dated May 21, 1999, by and among Viador and the holders of our preferred stock,
the investors acquired certain registration rights with respect to their
capital stock of Viador. At any time after three-months following our initial
public offering, holders of more than 40% of the outstanding preferred stock
may require us to effect registration under the Securities Act covering at
least 40% of the outstanding Registrable Securities (as defined in the
Investors' Rights Agreement), subject in either case to the board of directors'
right to defer such registration for a period up to 60 days; provided, however,
that Viador is obligated to effect only two such registrations. In addition, if
we propose to issue equity securities under the Securities Act for our own
account in an underwritten public offering, then any of the investors has a
right (subject to quantity limitations determined by the underwriters) to
request that Viador register such investor's Registrable Securities. All
registration expenses incurred in connection with the first two demand
registrations described above and all piggyback registrations will be

                                       55
<PAGE>

borne by Viador. The participating investors will pay for underwriting
discounts and commissions incurred in connection with any such registrations.
We have agreed to indemnify the investors against certain liabilities in
connection with any registration effected pursuant to the foregoing Investors'
Rights Agreement, including Securities Act liabilities.

Amended and Restated Right of First Refusal and Co-Sale Agreement

   Pursuant to the terms of an Amended and Restated Right of First Refusal and
Co-Sale Agreement dated May 21, 1999 by and among Viador and certain investors,
such investors acquired certain first refusal and co-sale rights with respect
to their shares of preferred stock. Subject to certain customary exceptions, in
the event that any of our Management Members (defined in the Amended and
Restated Right of First Refusal and Co-Sale Agreement) or Major Shareholders
(defined in the Amended and Restated Right of First Refusal and Co-Sale
Agreement) propose to sell shares of common stock, such investor may elect to
participate pro-rata in such sale or purchase the shares being sold on the same
terms and conditions as the seller. These rights will terminate upon completion
of this offering.

Amended and Restated Voting Agreement

   Pursuant to an Amended and Restated Voting Agreement dated May 21, 1999 by
and among Viador, the Common Shareholders (defined in the Amended and Restated
Voting Agreement) and the holders of our Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock, one of our directors is elected
by the holders of the common stock and the holders of our Series A Preferred
Stock and another of our directors is elected by the holders of our Series B
Preferred Stock. This agreement shall terminate upon the completion of this
offering.

Certain Business Relationships

   Dawn G. Lepore, a director of Viador, also serves as Executive Vice
President and Chief Information Officer and a member of the Management
Committee of the Charles Schwab Corporation. Sales to Schwab accounted for more
than 5% of Viador's gross revenues during fiscal year 1998.

Indemnification Agreements

   We have entered into indemnification agreements with each of our directors
and officers. See "Management--Executive Compensation and Other Information--
Limitation of Liability and Indemnification."

                                       56
<PAGE>

                             PRINCIPAL STOCKHOLDERS

   The following table sets forth certain information as of June 30, 1999
(except as indicated in the footnotes below) with respect to the beneficial
ownership of our common stock by:

  .  each person known by us to own beneficially more than 5%, in the
     aggregate, of the outstanding shares of our common stock,

  .  the directors and Named Executive Officers of Viador who hold securities
     of Viador, and

  .  all executive officers and directors as a group.

   Unless otherwise indicated, the address for each shareholder is c/o Viador
Inc., 167 Second Avenue, San Mateo, CA 94401. Except as indicated by footnote,
we understand that the persons named in the table below have sole voting and
investment power with respect to all shares shown as beneficially owned by
them, subject to community property laws where applicable.

   Shares of common stock subject to options, which are currently exercisable
or exercisable within 60 days of June 30, 1999, are deemed outstanding for
computing the percentages of the person holding such options but are not deemed
outstanding for computing the percentages of any other person. The number of
shares reflects the number of shares of common stock in the aggregate assuming
the conversion of the preferred stock. Each share of preferred stock is
currently convertible into one share of common stock. Percentage ownership is
based on 11,803,134 shares of common stock and preferred stock, as converted,
outstanding as of June 30, 1999. See "Description of Capital Stock--Preferred
Stock." "Beneficial Ownership of Shares Before the Offering" reflects the
beneficial ownership of the common stock, assuming the conversion of the
preferred stock. "Beneficial Ownership of Shares After the Offering" reflects
the beneficial ownership of common stock, assuming the conversion of the
preferred stock and after giving effect to the Offering.

<TABLE>
<CAPTION>
                                              Beneficial        Beneficial
                                             Ownership of      Ownership of
                                           Shares Before the Shares After the
                                               Offering          Offering
                                           ----------------- -----------------
         Name of Beneficial Owner           Number   Percent  Number   Percent
         ------------------------          --------- ------- --------- -------
<S>                                        <C>       <C>     <C>       <C>
Entities affiliated with Information
 Technology Ventures(1)................... 2,190,786  18.6%  2,190,786
Entities affiliated with Mitsui & Co.,
 Ltd.(2)..................................   606,207   5.1%    606,207
Jia-Bao Chu(3)............................ 1,326,838  11.2%  1,326,838
Kin Liu(4)................................ 1,088,928   9.2%  1,088,928
Stan X. Wang(5)........................... 2,120,318  18.0%  2,120,318
Jonathan M. Harding(6)....................   158,334   1.3%    158,334
Raja H. Venkatesh(7)......................   100,000     *     100,000
Ben C. Connors(8).........................   530,735   4.5%    530,735
Steven C. Dille(9)........................   125,001   1.1%    125,001
Paul C. Vilandre(10)......................    96,222     *      96,222
Teddy Kiang(11)...........................   160,498   1.4%    160,498
Dawn G. Lepore(12)........................    --        --      --
Chong Sup Park(13)........................    20,834     *      20,834
Virginia Turezyn(14)......................    --        --      --
All directors and executive officers as a
 group (ten persons)(15).................. 3,311,942  28.1%  3,311,942
</TABLE>
----------
  * Less than 1%.

 (1) Stock consists of 4,075,585 shares of Series B Preferred Stock and 989,441
     shares of Series C Preferred Stock held by Information Technology Ventures
     II, L.P. and 155,185 shares of Series B Preferred Stock and 37,675 shares
     of Series C Preferred Stock held by ITV Affiliates Fund II, L.P. Ms.
     Turezyn, a director of Viador, is a principal member of ITV Management II,
     LLC, the general partner of Information Technology Ventures II, L.P. and
     ITV Affiliates Fund II, L.P. The address for Information Technology
     Ventures is 3000 Sand Hill Road, Suite 1-280, Menlo Park, California
     94025.

                                       57
<PAGE>

 (2) Stock consists of 290,979 shares of Series A Preferred Stock held by
     Mitsui & Co. (USA), Inc., 775,945 shares of Series A Preferred Stock held
     by Mitsui & Co., Ltd., 193,986 shares of Series A Preferred Stock held by
     Mitsui Comtek Corporation and 193,986 shares of Series A Preferred Stock
     held by MVC Global Japan Fund I. The address for Mitsui & Co. (USA), Inc.
     is 200 Park Avenue, New York, NY 10166.

 (3) Stock consists of 800,094 shares of common stock held directly by Mr. Chu,
     of which 130,198 shares are subject to repurchase by Viador, and 526,744
     shares of common stock subject to options exercisable within 60 days of
     June 30, 1999.

 (4) Stock consists of 702,680 shares of common stock held directly by Mr. Liu,
     of which 123,257 shares are subject to repurchase by Viador, and 386,248
     shares of common stock subject to options exercisable within 60 days of
     June 30, 1999.

 (5) Stock consists of 1,216,644 shares of common stock held directly by Mr.
     Wang, of which 173,618 shares are subject to repurchase by Viador, 11,737
     shares of Series A Preferred Stock held directly by Mr. Wang and 898,783
     shares of common stock subject to options exercisable within 60 days of
     June 30, 1999.

 (6) Stock consists of 158,324 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999.

 (7) Stock consists of 100,000 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999.

 (8) Stock consists of 530,735 shares of common stock held directly by Mr.
     Connors of which 53,678 shares are subject to repurchase by Viador.

 (9) Stock consists of 125,001 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999.

(10) Stock consists of 96,222 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999, of which 4,972 shares were
     exercised by Mr. Vilandre on February 5, 1999 and 2,084 shares were
     exercised by Mr Vilandre on June 11, 1999. Of these shares, 4,972 shares
     are held directly by Mr. Vilandre and 2,084 shares are held by his wife
     and children.

(11) Stock consists of 58,685 shares of Series A Preferred Stock and 246,508
     shares of Series C Preferred Stock held directly by Mr. Kiang and his wife
     and 33,334 shares of common stock subject to options exercisable within 60
     days of June 30, 1999. Excludes 1,185,996 shares of Series B Preferred
     Stock, as converted, and warrants to purchase 46,875 shares of common
     stock at an exercise price of $0.72 per share held by Standard Foods
     Taiwan, Ltd; 226,854 shares of Series A Preferred Stock, as converted,
     held by Crosslink Semiconductor, Inc. (Taiwan); 120,000 shares of Series A
     Preferred Stock, as converted, held by Eric S. Chen; 120,000 shares of
     Series A Preferred Stock, as converted, held by Ju-Liang Chen; 120,000
     shares of Series A Preferred Stock held by Paula Chen; 58,685 shares of
     Series A Preferred Stock and 246,508 shares of Series C Preferred Stock
     held by the Chen Living Trust dated 7/22/96; 58,685 shares of Series A
     Preferred Stock and 246,508 shares of Series C Preferred Stock held by the
     Cheng Living Trust dated 8/8/95; 58,685 shares of Series A Preferred
     Stock, as converted, and 246,508 shares of Series C Preferred Stock held
     by Ter-Fung Tsao and 58,685 shares of Series A Preferred Stock, as
     converted, and 246,508 shares of Series C Preferred Stock held by Wendy
     Te-Hau Wang, for all of whom Crosslink Technology Partners LLC holds a
     power of attorney. Mr. Kiang, a director of Viador, is a Managing Director
     of Crosslink Technology Partners LLC and the investment representative for
     Standard Foods Taiwan, Ltd. and Crosslink Semiconductor, Inc. (Taiwan).
     Mr. Kiang disclaims beneficial ownership of the shares of preferred and/or
     common stock held by Crosslink Semiconductor, Inc. (Taiwan), Standard
     Foods Taiwan, Ltd., Eric S. Chen, Ju-Liang Chen, Paula Chen, Chen Living
     Trust dated 7/22/96, Cheng Living Trust dated 8/8/95, Ter Fung Tsao and
     Wendy Te-Hua Wang, except to the extent of his pecuniary interest therein.

(12) As of June 30, 1999, Ms. Lepore does not own any stock or hold any options
     to purchase common stock. At the meeting of our board of directors held on
     July 20, 1999, Ms. Lepore was granted options to purchase 40,000 shares of
     common stock.

                                       58
<PAGE>

(13) Stock consists of 20,834 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999.

(14) Excludes an aggregate of 5,257,886 shares of preferred stock, as
     converted, held by Information Technology Ventures II, L.P. and ITV
     Affiliates Fund II, L.P. Ms. Turezyn, a director of Viador, is a principal
     member of ITV Management II, LLC, the general partner of Information
     Technology Ventures II, L.P. and ITV Affiliates Fund II, L.P. Ms. Turezyn
     disclaims beneficial ownership of the shares held by Information
     Technology Ventures II, L.P. and ITV Affiliates Fund II, L.P.

(15) See footnotes 5 through 13 above. Includes options exercisable for
     1,425,450 shares of common stock within 60 days of June 1999 under the
     1997 Stock Option/Stock Issuance Plan.

                                       59
<PAGE>

                          DESCRIPTION OF CAPITAL STOCK

   Upon the closing of this offering, the authorized capital stock of Viador
will consist of 100,000,000 shares of common stock, $0.001 par value per share,
and 10,000,000 shares of preferred stock, $0.001 par value per share.

Common Stock

   As of June 30, 1999, 4,915,433 shares of our common stock were outstanding
and held of record by 120 stockholders. After this offering,
shares will be outstanding. Concurrently with the completion of this offering,
each outstanding share of our preferred stock will be exchanged for and
converted into one share of our common stock. The following description of
rights assumes this conversion.

   Holders of common stock are entitled to receive dividends as may from time
to time be declared by our Board of Directors out of funds legally available
therefor. See "Dividend Policy." Holders of common stock are entitled to one
vote per share on all matters on which the holders of common stock are entitled
to vote and do not have any cumulative voting rights. Holders of common stock
have no preemptive, conversion, redemption or sinking fund rights. In the event
of a liquidation, dissolution or winding up of Viador, holders of common stock
are entitled to share equally and ratably in the assets of Viador, if any,
remaining after the payment of all our liabilities and the liquidation
preference of any then outstanding class or series of preferred stock. The
outstanding shares of common stock are, and the shares of common stock offered
by us in this offering when issued will be, fully paid and nonassessable. The
rights, preferences and privileges of holders of common stock are subject to
any series of preferred stock that we may issue in the future, as described
below.

Preferred Stock

   Our Board of Directors has the authority to issue preferred stock in one or
more series and to fix the number of shares constituting any such series and
the preferences, limitations and relative rights, including dividend rights,
dividend rate, voting rights, terms of redemption, redemption price or prices,
conversion rights and liquidation preferences of the shares constituting any
series, without any further vote or action by our stockholders. The issuance of
preferred stock by our Board of Directors could adversely affect the rights of
holders of common stock.

   The potential issuance of preferred stock may have the effect of delaying or
preventing a change in control of Viador, may discourage bids for our common
stock at a premium over the market price of the common stock and may adversely
affect the market price of, and the voting and other rights of the holders of,
common stock. Immediately after this offering there will be no shares of
preferred stock outstanding, and we have no current plans to issue shares of
preferred stock.

Certain Anti-takeover, Limited Liability and Indemnification Provisions

   Effect of Delaware Anti-takeover Statute. We are subject to Section 203 of
the Delaware General Corporation Law, as amended, which, subject to certain
exceptions, prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years
following the date that such stockholder became an interested stockholder,
unless:

  .  prior to such date, the board of directors of the corporation approved
     either the business combination or the transaction that resulted in the
     stockholder becoming an interested stockholder;

  .  upon consummation of the transaction that resulted in the stockholder
     becoming an interested stockholder, the interested stockholder owned at
     least 85% of the voting stock of the corporation outstanding at the time
     the transaction commenced, excluding for purposes of determining the
     number of shares outstanding those shares owned

    .  by persons who are directors and also officers and

                                       60
<PAGE>

    .  by employee stock plans in which employee participants do not have
       the right to determine confidentially whether shares held subject to
       the plan will be tendered in a tender or exchange offer; or

  .  on or subsequent to such date, the business combination is approved by
     the board of directors and authorized at an annual or special meeting of
     stockholders, and not by written consent, by the affirmative vote of at
     least 66 2/3% of the outstanding voting stock that is not owned by the
     interested stockholder.

   Section 203 defines business combinations to include:

  .  any merger or consolidation involving the corporation or any majority-
     owned subsidiary of the corporation and any other person or entity;

  .  subject to certain exceptions, any sale, transfer, pledge or other
     disposition of 10% or more of the assets of the corporation or any
     majority-owned subsidiary of the corporation involving the interested
     stockholder;

  .  subject to certain exceptions, any transaction that results in the
     issuance or transfer by the corporation or any majority-owned subsidiary
     of the corporation of any stock of the corporation to the interested
     stockholder;

  .  any transaction involving the corporation or any majority-owned
     subsidiary of the corporation that has the effect of increasing the
     proportionate share of the stock of any class or series of the
     corporation or any majority-owned subsidiary of the corporation
     beneficially owned by the interested stockholder; or

  .  the receipt by the interested stockholder of the benefit of any loans,
     advances, guarantees, pledges or other financial benefits provided by or
     through the corporation or any majority-owned subsidiary of the
     corporation.

   In general, Section 203 defines an interested stockholder as any entity or
person beneficially owning 15% or more or the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.

   Certificate of Incorporation and Bylaw Provisions. Our certificate of
incorporation and bylaws include provisions that may have the effect of
discouraging, delaying or preventing a change in control of Viador or an
unsolicited acquisition proposal that a stockholder might consider favorable,
including a proposal that might result in the payment of a premium over the
market price for the shares held by stockholders. These provisions are
summarized in the following paragraphs.

   Classified Board of Directors. Our certificate of incorporation and bylaws
provide for our board to be divided into three classes of directors serving
staggered, three year terms. The classification of the board has the effect of
requiring at least two annual stockholder meetings, instead of one, to replace
a majority of the members of the Board of Directors. See "Management--
Classified Board."

   Supermajority Voting. Our certificate of incorporation requires the approval
of the holders of at least 66 2/3% of our combined voting power to effect
certain amendments to the certificate of incorporation or to effect any
business combination, as defined in Section 203, relating to us. Our bylaws may
be amended by either a majority of the Board of Directors, or the holders of a
majority of our voting stock, provided that certain amendments approved by
stockholders require the approval of at least 66 2/3% of our combined voting
power.

   Authorized but Unissued or Undesignated Capital Stock. Our authorized
capital stock consists of 100,000,000 shares of common stock and 10,000,000
shares of preferred stock. No preferred stock will be designated upon
consummation of this offering. After this offering, we will have outstanding
               shares of common stock. The authorized but unissued--and in the
case of preferred stock, undesignated--stock may be issued by the Board of
Directors in one or more transactions. In this regard, our certificate of
incorporation grants the Board of Directors broad power to establish the rights
and preferences of authorized

                                       61
<PAGE>

and unissued preferred stock. The issuance of shares of preferred stock
pursuant to the Board of Director's authority described above could decrease
the amount of earnings and assets available for distribution to holders of
common stock and adversely affect the rights and powers, including voting
rights, of such holders and may have the effect of delaying, deferring or
preventing a change in control of Viador. The Board of Directors does not
currently intend to seek stockholder approval prior to any issuance of
preferred stock, unless otherwise required by law.

   Special Meetings of Stockholders. Our bylaws provide that special meetings
of stockholders of Viador may be called only by the Board of Directors, or by
the Chairman of our Board of Directors or our President.

   No Stockholder Action by Written Consent. Our certificate of incorporation
and bylaws provide that an action required or permitted to be taken at any
annual or special meeting of the stockholders of Viador may only be taken at a
duly called annual or special meeting of stockholders. This provision prevents
stockholders from initiating or effecting any action by written consent.

   Notice Procedures. Our bylaws establish advance notice procedures with
regard to all stockholder proposals to be brought before meetings of
stockholders of Viador, including proposals relating to the nomination of
candidates for election as directors, the removal of directors and amendments
to our certificate of incorporation or bylaws. These procedures provide that
notice of such stockholder proposals must be timely given in writing to the
Secretary of Viador prior to the meeting. Generally, to be timely, notice must
be received by our Secretary not less than 120 days prior to the meeting. The
notice must contain certain information specified in the bylaws.

   Other Anti-takeover Provisions. See "Management--Executive Compensation and
Other Information--Employee Benefit Plans" for a discussion of certain
provisions of the 1999 Stock Incentive Plan which may have the effect of
discouraging, delaying or preventing a change in control of Viador or
unsolicited acquisition proposals.

   Limitation of Director Liability. Our certificate of incorporation limits
the liability of our directors (in their capacity as directors but not in their
capacity as officers) to Viador or our stockholders to the fullest extent
permitted by Delaware law. Specifically, directors of Viador will not be
personally liable for monetary damages for breach of a director's fiduciary
duty as a director, except for liability:

  .  for any breach of the director's duty of loyalty to Viador or our
     stockholders;

  .  for acts or omissions not in good faith or which involve intentional
     misconduct or a knowing violation of law;

  .  under Section 174 of the Delaware General Corporation Law, which relates
     to unlawful payments of dividends or unlawful stock repurchases or
     redemptions; or

  .  for any transaction from which the director derived an improper personal
     benefit.

   Indemnification Arrangements. Our bylaws provide that the directors and
officers of Viador shall be indemnified and provide for the advancement to them
of expenses in connection with actual or threatened proceedings and claims
arising out of their status as such to the fullest extent permitted by the
Delaware General Corporation Law. Prior to consummation of this offering, we
will enter into indemnification agreements with each of our directors and
executives officers that will provide them with rights to indemnification and
expense advancement to the fullest extent permitted under the Delaware General
Corporation Law.

Transfer Agent and Registrar

   The transfer agent and registrar for the common stock is Boston Equiserve.

                                       62
<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE

   Prior to this offering, there has not been any public market for our common
stock. Future sales of substantial amounts of common stock in the public
market, or the prospect of such sales, could adversely affect prevailing market
prices.

   Upon completion of this offering,           shares of common stock will be
outstanding. Of these shares, all of the shares sold in this offering will be
freely tradable without restriction under the Securities Act, unless purchased
by an "affiliate" of Viador, as that term is defined in Rule 144. The remaining
          shares outstanding after completion of this offering are "restricted
securities" as defined in Rule 144 and may be sold in the public market only if
registered under the Securities Act or if they qualify for an exemption from
registration, including an exemption pursuant to Rule 144.

   Holders of approximately 98% our outstanding common stock as of the date
hereof have agreed that, subject to certain exceptions and consents, during the
period beginning from the date of this prospectus, and continuing to and
including the date 180 days after the date of this prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any securities of Viador.
Upon expiration of these agreements,           shares will be eligible for
immediate resale in the public market subject to the volume and other
limitations of Rule 144, and          shares will be eligible for immediate
resale pursuant to Rule 144(k) without such limitations, unless they are held
by affiliates of Viador. Of such shares, approximately           will be
eligible for immediate resale in the public market pursuant to Rule 144 subject
to the volume and manner of sale limitations in Rule 144 and         shares
will be eligible for resale without such volume limitations.

   In general under Rule 144, a person, including an "affiliate" of Viador, who
has beneficially owned restricted shares for at least one year is entitled to
sell within any three-month period a number of shares that does not exceed the
greater of 1% of the then outstanding shares of common stock (approximately
        shares immediately following this offering) or the average weekly
trading volume of the common stock during the four calendar weeks preceding
such sale. Sales under Rule 144 are subject to certain manner of sale
limitations, notice requirements and the availability of current public
information about Viador. Rule 144(k) provides that a person who is not an
"affiliate" of the issuer at any time during the three-months preceding a sale
and who has beneficially owned shares for at least two years is entitled to
sell those shares at any time without compliance with the public information,
volume limitation, manner of sale and notice provisions of Rule 144.

   As of June 30, 1999, options to purchase 786,417 shares of common stock were
outstanding under the Amended and Restated 1997 Stock Option/Stock Issuance
Plan. Simultaneously with the completion of this offering, options to purchase
7,500,000 shares of common stock will be granted under the 1999 Stock Incentive
Plan. We intend to file as soon as practicable following completion of this
offering a registration statement on Form S-8 under the Securities Act covering
shares of common stock reserved for issuance under the 1999 Stock Incentive
Plan. Based on the number of options expected to be outstanding upon completion
of this offering and shares reserved for issuance under the 1999 Stock
Incentive Plan, the registration statement would cover          shares. See
"Management--Executive Compensation and Other Information--Employee Benefit
Plans". The registration statement will become effective immediately upon
filing, whereupon, subject to the satisfaction of applicable exercisability
periods, Rule 144 volume limitations applicable to affiliates and, in certain
cases, the agreements with the underwriters referred to above, shares of Common
Stock to be issued upon exercise of outstanding options granted pursuant to the
1999 Stock Incentive Plan, to the extent that such shares were held by
affiliates, will be available for immediate resale in the open market.

                                       63
<PAGE>

                                  UNDERWRITING

   The underwriters of this offering named below, for whom Bear, Stearns & Co.
Inc., CIBC World Markets Corp. and U.S. Bancorp Piper Jaffray Inc. are acting
as representatives, have severally agreed with Viador, subject to the terms and
conditions of the Underwriting Agreement (the form of which has been filed as
an exhibit to the Registration Statement on Form S-1 of which this prospectus
is a part), to purchase from Viador the aggregate number of shares of common
stock set forth opposite their respective names below:

<TABLE>
<CAPTION>
   Underwriter                                                  Number of Shares
   -----------                                                  ----------------
   <S>                                                          <C>
   Bear, Stearns & Co. Inc. ...................................
   CIBC World Markets Corp. ...................................
   U.S. Bancorp Piper Jaffray Inc. ............................
                                                                      ----
     Total.....................................................
                                                                      ====
</TABLE>

   The nature of the respective obligations of the underwriters is such that
all of the shares of common stock (other than shares of common stock covered by
the over-allotment option described below) must be purchased if any are
purchased. Those obligations are subject, however, to various conditions,
including the approval of certain matters by counsel. We have agreed to
indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act, and, where such indemnification is unavailable, to
contribute to payments that the underwriters may be required to make in respect
of such liabilities.

   We have been advised that the underwriters propose to offer the shares of
common stock directly to the public initially at the public offering price set
forth on the cover page of this prospectus and to certain selected dealers at
such price less a concession not to exceed $      per share, that the
underwriters may allow, and such selected dealers may reallow, a concession to
certain other dealers not to exceed $     per share and that after the
commencement of this offering, the public offering price and the concessions
may be changed.

   We have granted to the underwriters an option to purchase in the aggregate
up to              additional shares of common stock to be sold in this
offering solely to cover over-allotments, if any. The option may be exercised
in whole or in part at any time within 30 days after the date of this
prospectus. To the extent the option is exercised, the underwriters will be
severally committed, subject to certain conditions, including the approval of
certain matters by counsel, to purchase the additional shares of common stock
in proportion to their respective purchase commitments as indicated in the
preceding table.

   The underwriters have reserved for sale at the initial public offering price
up to 5% of the number of shares of common stock offered hereby for sale to
certain directors, officers, other employees, business affiliates and related
persons of Viador who have expressed an interest in purchasing shares. The
number of shares available for sale to the general public will be reduced to
the extent any reserved shares are purchased. Any reserved shares not so
purchased will be offered by the underwriters on the same basis as the other
shares offered hereby.

   Viador and our executive officers, directors and our current stockholders,
holding approximately 98% of our common stock, have agreed that, subject to
certain limited exceptions, for a period of 180 days after the date of this
prospectus, without the prior written consent of Bear, Stearns & Co. Inc., they
will not, directly or indirectly, issue, sell, offer or agree to sell or
otherwise dispose of any shares of common stock (or securities convertible
into, exchangeable for or evidencing the right to purchase shares of common
stock.)

   Prior to this offering, there has been no public market for the common
stock. Consequently, the initial public offering price will be determined
through negotiations among Viador and the representatives of the underwriters.
Among the factors considered in making such determination were our financial
and operating history and condition, market valuations of other companies
engaged in activities similar to ours, our prospects and prospects for the
industry in which we do business in general, our management, prevailing equity
market conditions and the demand for securities considered comparable to those
of Viador.

                                       64
<PAGE>

   In order to facilitate this offering, certain persons participating in this
offering may engage in transactions that stabilize, maintain or otherwise
affect the price of the common stock during and after this offering.
Specifically, the underwriters may over-allot or otherwise create a short
position in the common stock for their own account by selling more shares of
common stock, than have been sold to them by Viador. The underwriters may elect
to cover any such short position by purchasing shares of common stock in the
open market or by exercising the over-allotment option granted to the
underwriters. In addition, the underwriters may stabilize or maintain the price
of the common stock by bidding for or purchasing shares of common stock in the
open market and may impose penalty bids, under which selling concessions
allowed to syndicate members or other broker-dealers participating in this
offering are reclaimed if shares of common stock previously distributed in this
offering are repurchased in connection with stabilization transactions or
otherwise. The effect of these transactions may be to stabilize or maintain the
market price of the common stock at a level above that which might otherwise
prevail in the open market. The imposition of a penalty bid may also affect the
price of the common stock to the extent that it discourages resales thereof. No
representation is made as to the magnitude or effect of any such stabilization
or other transactions. Such transactions may be effected on the Nasdaq National
Market or otherwise and, if commenced, may be discontinued at any time.

                                       65
<PAGE>

                                 LEGAL MATTERS

   The validity of the issuance of the common stock offered in this offering
will be passed upon for us by Brobeck, Phleger & Harrison LLP, Palo Alto,
California. Brobeck, Phleger & Harrison LLP and certain attorneys currently
affiliated with Brobeck, Phleger & Harrison LLP currently hold an aggregate of
86,442 shares of our capital stock and a warrant to purchase an additional
12,500 shares of our capital stock. Certain legal matters in connection with
this offering will be passed upon for the underwriters by Latham & Watkins, San
Francisco.

                                    EXPERTS

   The Financial Statements and Schedule of Viador as of December 31, 1997 and
1998 and for each of the years in the three-year period ended December 31,
1998, have been included herein and in the registration statement in reliance
upon the report of KPMG LLP, independent auditors, appearing elsewhere herein,
and upon the authority of said firm as experts in accounting and auditing.

                             ADDITIONAL INFORMATION

   Viador has filed with the Securities and Exchange Commission, Washington,
D.C. 20549, a Registration Statement on Form S-1 under the Securities Act with
respect to the common stock offered in this offering. This prospectus omits
certain information set forth in the Registration Statement and the exhibits
and schedules thereto. For further information with respect to Viador and the
common stock offered in this offering, reference is made to such Registration
Statement, exhibits and schedules. Statements contained in this prospectus as
to the contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. After consummation of this offering we will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and in accordance therewith, will be required to file annual and quarterly
reports, proxy statements and other information with the Commission. The
Registration Statement, including the exhibits and schedules filed therewith,
as well as such reports and other information filed by us may be inspected
without charge at the public reference facilities maintained by the Securities
and Exchange Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the regional offices of the Securities and Exchange Commission
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials may be obtained from the Public Reference Section of
the Securities and Exchange Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates and from the Commission's Internet
Web site at http://www.sec.gov.

                                       66
<PAGE>

                                  VIADOR INC.

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
Form of Independent Auditors' Report.....................................  F-2

Balance Sheets as of December 31, 1997 and 1998 and June 30, 1999
 (unaudited).............................................................  F-3

Statements of Operations for the years ended December 31, 1996, 1997, and
 1998, and for the six months ended June 30, 1998 and 1999 (unaudited)...  F-4

Statements of Stockholders' Equity (Deficit) for the years ended December
 31, 1996, 1997 and 1998, and for the six months ended June 30, 1999
 (unaudited).............................................................  F-5

Statements of Cash Flows for the years ended December 31, 1996, 1997, and
 1998, and for the six months ended June 30, 1998 and 1999 (unaudited)...  F-6

Notes to Financial Statements............................................  F-7
</TABLE>

                                      F-1
<PAGE>

                      FORM OF INDEPENDENT AUDITORS' REPORT

   When the events referred to in Note 8(c) to the Financial Statements have
been consummated, we will be in a position to render the following report.

                                          /s/ KPMG LLP
The Board of Directors
Viador Inc.:

   We have audited the accompanying balance sheets of Viador Inc. (the
Company), as of December 31, 1997 and 1998, and the related statements of
operations, stockholders' equity (deficit), and cash flows for each of the
years in the three-year period ended December 31, 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 audits.

   We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes 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 financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

   In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Viador Inc., as of December
31, 1997 and 1998, and the results of its operations and its cash flows for
each of the years in the three-year period ended December 31, 1998, in
conformity with generally accepted accounting principles.

Mountain View, California
June 11, 1999, except as to note 8,
 which is as of July 20, 1999

                                      F-2
<PAGE>

                                  VIADOR INC.

                                 BALANCE SHEETS
                       (In thousands, except share data)

<TABLE>
<CAPTION>
                                           December 31,       June 30, 1999
                                          ----------------  -------------------
                                           1997     1998     Actual   Pro Forma
                                          -------  -------  --------  ---------
                                                               (unaudited)
<S>                                       <C>      <C>      <C>       <C>
ASSETS
Current assets:
  Cash and cash equivalents.............. $ 1,029  $ 4,181  $ 14,259    $
  Accounts receivable, net of allowance
   of $50,000, $53,000 and $90,000 in
   fiscal 1997, 1998 and June 30, 1999...   1,473    2,404     3,085
  Other current assets...................       9       --       410
                                          -------  -------  --------    ----
    Total current assets.................   2,511    6,585    17,754
Property and equipment, net..............     341      577       917
Other assets.............................      66       23       198
                                          -------  -------  --------    ----
                                          $ 2,918  $ 7,185  $ 18,869    $
                                          =======  =======  ========    ====
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable....................... $   222  $   542  $    686    $
  Accrued liabilities....................     525      565     1,779
  Deferred revenue.......................   2,081    2,707     3,120
                                          -------  -------  --------    ----
    Total liabilities....................   2,828    3,814     5,585
                                          -------  -------  --------    ----
Commitments
Stockholders' equity:
  Convertible preferred stock, $0.001 par
   value; actual--10,000,000, 12,500,000,
   and 25,000,000 shares authorized as of
   December 31, 1997 and 1998, and June
   30, 1999, respectively; 3,703,764,
   10,336,478, and 16,326,863 shares
   issued and outstanding as of December
   31, 1997 and 1998, and June 30, 1999,
   respectively; aggregate liquidation
   preference of $3,819, $12,441, and
   $27,022 as of December 31, 1997 and
   1998, and June 30, 1999, respectively;
   pro forma--    shares authorized; no
   shares issued and outstanding.........       4       10        16      --
  Common stock, $0.001 par value;
   actual--16,666,667, 16,666,667, and
   20,833,333 shares authorized as of
   December 31, 1997 and 1998, and June
   30,1999 respectively; 4,612,512,
   4,664,589, and 4,915,433 shares issued
   and outstanding as of December 31,
   1997 and 1998 and June 30, 1999,
   respectively; pro forma--    shares
   authorized;     shares issued and
   outstanding...........................      11       11        12
  Additional paid-in capital............. 3,679    14,209   30,257
  Deferred stock-based compensation......      --   (1,148)   (2,029)
  Treasury stock.........................      --      (34)      (34)
  Notes receivable from stockholders.....    (138)      --        --      --
  Accumulated deficit....................  (3,466)  (9,677)  (14,938)
                                          -------  -------  --------    ----
    Total stockholders' equity...........      90    3,371    13,422
                                          -------  -------  --------    ----
                                          $ 2,918  $ 7,185  $ 18,869    $
                                          =======  =======  ========    ====
</TABLE>

                See accompanying notes to financial statements.

                                      F-3
<PAGE>

                                  VIADOR INC.

                            STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                           Six Months Ended
                              Years Ended December 31,         June 30,
                              ---------------------------  ------------------
                               1996      1997      1998      1998      1999
                              -------- --------  --------  --------  --------
                                                              (unaudited)
<S>                           <C>      <C>       <C>       <C>       <C>
Revenue:
  License.................... $    56  $    839  $  2,283  $  1,142  $  2,131
  Services...................     941       743     1,542       612     1,159
                              -------  --------  --------  --------  --------
    Total revenue............     997     1,582     3,825     1,754     3,290
Cost of revenue..............     314       903     1,387       640       874
                              -------  --------  --------  --------  --------
    Gross profit.............     683       679     2,438     1,114     2,416
                              -------  --------  --------  --------  --------
Operating expenses:
  Research and development...     364     1,351     2,481     1,107     1,871
  Sales and marketing........     125     1,802     4,295     1,806     4,397
  General and
   administrative............     358       936     1,365       374       996
  Amortization of stock-based
   compensation..............      --        --       445        94       529
                              -------  --------  --------  --------  --------
    Total operating
     expenses................     847     4,089     8,586     3,381     7,793
                              -------  --------  --------  --------  --------
    Operating loss...........    (164)   (3,410)   (6,148)   (2,267)   (5,377)
Interest income..............      10        68       134        32       116
Interest expense.............      --        (6)     (197)      (34)       --
                              -------  --------  --------  --------  --------
    Net loss.................  $ (154)  $(3,348)  $(6,211)  $(2,269)  $(5,261)
                              =======  ========  ========  ========  ========
Basic and diluted net loss
 per share...................  $(0.08) $  (1.34) $  (1.82) $  (0.71) $  (1.28)
                              =======  ========  ========  ========  ========
Shares used in computing
 basic and diluted net loss
 per share...................   1,993     2,495     3,416     3,177     4,126
                              =======  ========  ========  ========  ========
</TABLE>



                See accompanying notes to financial statements.

                                      F-4
<PAGE>

                                  VIADOR INC.

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                       (In thousands, except share data)

<TABLE>
<CAPTION>
                     Convertible                                                          Notes                     Total
                   preferred stock    Common stock    Additional   Deferred             receivable              stockholders'
                  ----------------- -----------------  paid-in   stock-based  Treasury     from     Accumulated    equity
                    Shares   Amount  Shares    Amount  capital   compensation  stock   stockholders   deficit     (deficit)
                  ---------- ------ ---------  ------ ---------- ------------ -------- ------------ ----------- -------------
<S>               <C>        <C>    <C>        <C>    <C>        <C>          <C>      <C>          <C>         <C>
Balances as of
 December 31,
 1995............         --  $ --  1,843,752   $  5   $    45     $     --    $  --       $ --      $      36    $     86
 Issuance of
  common stock to
  founders for
  cash...........         --    --    187,504     --         5           --       --         --             --           5
 Issuance of
  common stock to
  founders for
  notes..........         --    --  2,560,422      6       117           --       --       (123)            --          --
 Interest on
  notes
  receivable from
  stockholders...                                                                            (4)                        (4)
 Net loss........         --    --         --     --        --           --       --         --           (154)       (154)
                  ----------  ----  ---------   ----   -------     --------    -----       ----      ---------    --------
Balances as of
 December 31,
 1996............         --    --  4,591,678     11       167           --       --       (127)          (118)        (67)
 Stock options
  exercised......         --    --     20,834     --         1           --       --         --             --           1
 Issuance of
  Series A
  convertible
  preferred
  stock..........  3,703,764     4         --     --     3,511           --       --         --             --       3,515
 Interest on
  notes
  receivable from
  stockholders...         --    --         --     --        --           --       --        (11)            --         (11)
 Net loss........         --    --         --     --        --           --       --         --         (3,348)     (3,348)
                  ----------  ----  ---------   ----   -------     --------    -----       ----      ---------    --------
Balances as of
 December 31,
 1997............  3,703,764     4  4,612,512     11     3,679           --       --       (138)        (3,466)         90
 Stock options
  exercised......         --    --     78,996     --         8           --       --         --             --           8
 Repurchase of
  stock in
  settlement of
  notes
  receivable from
  founders.......         --    --    (26,919)              (1)          --      (34)        35             --          --
 Cancellation of
  stockholders
  notes..........         --    --         --     --        --           --       --        103             --         103
 Issuance of
  Series B
  convertible
  preferred stock
  net of $92
  issuance
  costs..........  6,632,714     6         --     --     8,524           --       --         --             --       8,530
 Deferred stock-
  based
  compensation
  related to
  stock option
  grants.........         --    --         --     --     1,593       (1,593)      --         --             --          --
 Amortization of
  stock-based
  compensation...         --    --         --     --        --          445       --         --             --         445
 Warrants for
  services
  performed......         --    --         --               88           --       --         --             --          88
 Options issued
  to
  nonemployees...         --    --         --              188           --       --         --             --         188
 Warrants issued
  in connection
  with bridge
  loan...........         --    --         --              130           --       --         --             --         130
 Net loss........         --    --         --     --        --           --       --         --         (6,211)     (6,211)
                  ----------  ----  ---------   ----   -------     --------    -----       ----      ---------    --------
Balances as of
 December 31,
 1998............ 10,336,478    10  4,664,589     11    14,209       (1,148)     (34)        --         (9,677)      3,371
 Stock options
  exercised
  (unaudited)....         --    --    250,844      1        29           --       --         --             --          30
 Issuance of
  Series C
  convertible
  preferred stock
  net of $38
  issuance costs
  (unaudited)....  5,990,385     6         --     --    14,537           --       --         --             --      14,543
 Warrants for
  services
  performed
  (unaudited)....         --               --               37           --       --         --             --          37
 Options issued
  to nonemployees
  (unaudited)....         --    --         --               35           --       --         --             --          35
 Deferred stock-
  based
  compensation
  related to
  stock option
  grants
  (unaudited)....         --    --         --            1,410       (1,410)      --         --             --          --
 Amortization of
  stock-based
  compensation
  (unaudited)....         --    --         --     --        --          529       --         --             --         529
 Net loss
  (unaudited)....                                           --           --       --         --         (5,261)     (5,261)
                  ----------  ----  ---------   ----   -------     --------    -----       ----      ---------    --------
Balances as of
 June 30, 1999
 (unaudited)..... 16,326,863  $ 16  4,915,433   $ 12   $30,257     $ (2,029)   $ (34)      $ --      $ (14,938)   $ 13,284
                  ==========  ====  =========   ====   =======     ========    =====       ====      =========    ========
</TABLE>

                See accompanying notes to financial statements.

                                      F-5
<PAGE>

                                  VIADOR INC.

                            STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                             Six Months ended
                                 Years Ended December 31,        June 30,
                                 --------------------------  ------------------
                                  1996     1997      1998      1998      1999
                                 ----------------  --------  --------  --------
                                                                (unaudited)
<S>                              <C>     <C>       <C>       <C>       <C>
Cash flows from operating ac-
 tivities:
 Net loss......................  $ (154)  $(3,348)  $(6,211)  $(2,269)  $(5,261)
 Adjustments to reconcile net
  loss to net cash provided by
  (used in) operating
  activities:
   Cancellation of stockholder
    notes......................      --        --       103        --        --
   Issuance of options for
    services performed.........      --        --       188        --        35
   Interest on bridge loan.....      --        --        63        --        --
   Interest on note receivable
    from stockholders..........       3        11        --        --        --
   Warrants issued for services
    performed..................      --        --        88        --        37
   Amortization of discount on
    bridge loan................      --        --       130        --        --
   Amortization of deferred
    stock-based compensation...      --        --       445        93       529
   Software sold in exchange
    for property and
    equipment..................      --       (22)       --        --        --
   Depreciation and
    amortization...............      18        89       248        84       248
   Changes in operating assets
    and liabilities:
    Accounts receivable........      --    (1,342)     (931)      158      (681)
    Other assets...............     (69)       (4)       52        19      (585)
    Accounts payable and
     accrued liabilities.......     440       261       360        75     1,358
    Deferred revenue...........      11     2,020       626      (264)      413
                                 ------  --------  --------  --------  --------
    Net cash provided by (used
     in) operating activities..     249    (2,335)   (4,839)   (2,104)   (3,907)
                                 ------  --------  --------  --------  --------
Cash flows used in investing
 activities--acquisition of
 property and equipment........    (106)     (342)     (484)     (218)     (588)
                                 ------  --------  --------  --------  --------
Cash flows from financing
 activities:
 Proceeds from issuance of
  common stock.................       5         1         8         3        30
 Proceeds from issuance of
  preferred stock, net.........      --     3,515     6,467        --    14,543
 Loan from stockholder.........     100        --        --        --        --
 Proceeds from bridge loan.....      --        --     1,870     1,870        --
 Proceeds from issuance of
  warrants.....................      --        --       130       130        --
 Borrowing under line of
  credit.......................      --       100       500       500        --
 Repayment under line of
  credit.......................      --      (100)     (500)     (300)       --
 Repayment of loan from
  stockholder..................      --      (100)       --        --        --
                                 ------  --------  --------  --------  --------
    Net cash provided by
     financing activities......     105     3,416     8,475     2,203    14,573
                                 ------  --------  --------  --------  --------
Net increase (decrease) in cash
 and cash equivalents..........     248       739     3,152      (119)   10,078
Cash and cash equivalents,
 beginning of period...........      42       290     1,029     1,029     4,181
                                 ------  --------  --------  --------  --------
Cash and cash equivalents, end
 of period.....................  $  290  $  1,029  $  4,181  $    910   $14,259
                                 ======  ========  ========  ========  ========
Supplemental disclosures of
 cash flow information:
 Cash paid during period for
  interest.....................  $   --  $      6  $     22  $      9  $     --
                                 ======  ========  ========  ========  ========
 Noncash financing activities:
  Common stock issued to
   founders for note
   receivable..................  $  123  $     --  $     --  $     --  $     --
                                 ======  ========  ========  ========  ========
  Repurchase of common stock in
   settlement of notes
   receivable from
   stockholders................  $   --  $     --  $     35  $     --  $     --
                                 ======  ========  ========  ========  ========
  Preferred stock issued upon
   conversion of bridge loan
   and accrued interest........  $   --  $     --  $  2,063  $     --  $     --
                                 ======  ========  ========  ========  ========
  Deferred stock-based
   compensation................  $   --  $     --  $  1,593  $  1,114  $  1,410
                                 ======  ========  ========  ========  ========
</TABLE>

                See accompanying notes to financial statements.

                                      F-6
<PAGE>

                                  VIADOR INC.

                         NOTES TO FINANCIAL STATEMENTS

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

(1) Business of the Company

   Viador Inc. (the Company) was incorporated as Infospace Inc. in California
in December 1995. In January 1999, the Company changed its name to Viador Inc.
The Company develops web-based products designed to search, analyze and deliver
relevant information to users within and outside an enterprise.

(2) Summary of Significant Accounting Policies

 (a) Use of Estimates

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

 (b) Revenue Recognition

   The Company has adopted Statement of Position (SOP) 97-2, Software Revenue
Recognition, as amended by SOP 98-4. SOP 97-2 as amended, generally requires
revenue earned on software arrangements involving multiple elements to be
allocated to each element based on the relative fair value of the elements. The
adoption of SOP 97-2, as amended, did not have a significant impact on the
Company's accounting for revenues.

   In December 1998, the American Institute of Certified Public Accountants'
(AICPA) issued SOP 98-9, Software Revenue Recognition, with Respect to Certain
Arrangements, which requires recognition of revenue using the "residual method"
in a multiple element arrangement when fair value does not exist for one or
more of the delivered elements in the arrangement. Under the "residual method",
the total fair value of the undelivered elements is deferred and subsequently
recognized in accordance with SOP 97-2. The Company does not expect a material
change to its accounting for revenues as a result of the provisions of SOP 98-
9.

   The Company licenses its products to end user customers, original equipment
manufacturers (OEM) and value added resellers (VAR). Software license revenue
from sales to end users is generally recognized upon receipt of a signed
contract or purchase order and delivery of the software, provided the related
fee is fixed and determinable and collectibility of the fee is probable. All of
the contract software revenue related to arrangements that require the Company
to deliver specified additional features or upgrades is deferred until delivery
of the feature and/or upgrade has occurred. All of the contract software
revenue related to arrangements involving consulting services that are
essential to the functionality of the software at the customer site is deferred
until the consulting services have been completed and customer acceptance has
been obtained. License revenue from OEM and VAR arrangements in which the
Company earns a royalty based on a specified percentage of OEM and VAR sales to
end users incorporating the Company's software is recognized upon delivery to
the end user. Nonrefundable prepaid royalty fees received by the Company from
OEM and VAR customers are deferred and recognized as the end user sales are
reported to the Company by the OEM or VAR, unless the Company has an
arrangement to maintain the compatability of its software products with the
software products or platforms of the OEM or VAR. In that case, due to the
Company's software compatibility obligation, the prepaid royalty fees are
recognized as the end user sales are reported to the Company by the OEM or VAR
but limited to no more than the fee that would be recognizable on a cumulative
basis if the entire fee was being recognized ratably over the term of the
arrangement.

   Service revenue includes fees derived from maintenance and support,
training, installation, and consulting services. Revenue from training,
installation, and time and material consulting services are recognized when the

                                      F-7
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

related services are performed. Consulting revenue related to fixed price
arrangements are recognized upon completion and acceptance by the customer. The
Company recognizes maintenance revenue ratably over the term of the related
contract, generally 12 months. The Company typically invoices and collects
maintenance revenue on an annual basis at the anniversary date of the software
license. Billings in excess of recognized license and service revenue are
included in deferred revenue.

   Cost of service revenue includes salaries and related expenses for
consulting services, customer support, implementation and training services
organizations, costs of contracting with third parties contracted to provide
consulting services to customers. Cost of license revenue includes royalties
due to third parties for integrated technology, the cost of manuals and product
documentation, production media used to deliver our products and shipping
costs, including the costs associated with the electronic transmission of
software to new customers and an allocation of our facilities, communications
and depreciation expenses. Costs of license revenues have not been significant
to date.

 (c) Initial Public Offering and Unaudited Pro Forma Balance Sheet

   In May 1999, the Board of Directors authorized the filing of a registration
statement with the Securities and Exchange Commission ("SEC") that would permit
the Company to sell shares of the Company's common stock in connection with a
proposed initial public offering ("IPO"). Following the closing of the
Company's IPO, the number of authorized shares of convertible preferred stock
and common stock will be     and    , respectively. If the offering is
consummated under the terms presently anticipated, all the then outstanding
shares of the Company's convertible preferred stock will automatically convert
into 0.417 shares of common stock upon the closing of the proposed IPO. The
conversion of all of the convertible preferred stock has been reflected in the
accompanying unaudited pro forma consolidated balance sheet as if it had
occurred on June 30, 1999.

 (d) Cash and Cash Equivalents

   Cash and cash equivalents consists of cash and highly liquid investments
such as money market funds purchased with remaining maturities of three months
or less. The Company is exposed to credit risk in the event of default by the
financial institutions or the issuers of these investments to the extent of the
amounts recorded on the balance sheet.

 (e) Financial Instruments and Concentration of Credit Risk

   The carrying value of the Company's financial instruments, including cash
and cash equivalents and accounts receivable approximates fair market value.
Financial instruments that subject the Company to concentrations of credit risk
consist primarily of cash and cash equivalents and trade accounts receivable.

   The Company sells its products and services primarily to established
customers. Credit risk is concentrated in North America and Asia. The Company
performs ongoing credit evaluations of its customer's financial condition and,
generally, requires no collateral from its customers.

 (f) Property and Equipment

   Property and equipment are recorded at cost less accumulated depreciation
and amortization. Depreciation is calculated using the straight-line method
over the estimated useful lives of the respective assets generally three to
five years. Leasehold improvements are amortized on a straight line basis over
the shorter of the estimated useful lives of the assets or the lease term.

                                      F-8
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)


 (g) Software Development Costs

   Development costs incurred in the research and development of software
products are expensed as incurred until technological feasibility in the form
of a working model has been established. As of June 30, 1999, technological
feasibility was established concurrent with the general release of the software
and therefore, no costs have been capitalized.

 (h) Impairment of Long-Lived Assets

   The Company evaluates its long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used is measured by
a comparison of the carrying amount of an asset to future undiscounted net cash
flows expected to be generated by the asset. If such assets are considered to
be impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets. Assets
to be disposed of are reported at the lower of the carrying amount of the
assets or fair value less costs to sell.

 (i) Income Taxes

   The Company utilizes the asset and liability method of accounting for income
taxes. Deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amounts
expected to be recovered.

 (j) Defined Contribution Plan

   The Company has a defined contribution retirement plan under Section 401(k)
of the Internal Revenue Code which covers substantially all employees. Eligible
employees may contribute amounts to the plan, via payroll withholding, subject
to certain limitations. Under the 401(k) plan, employees may elect to reduce
their current compensation by up to the statutorily prescribed annual limit and
to have the amount of such reduction contributed to the 401(k) plan. The 401(k)
plan permits, but does not require, additional matching contributions to the
401(k) plan by the Company on behalf of all participants in the 401(k) plan. To
date, the Company has not made any matching contributions to the 401(k) plan.

 (k) Stock-Based Compensation

   The Company uses the intrinsic-value method to account for all of its
employee stock-based compensation plans. Expense associated with stock-based
compensation is being amortized on an accelerated basis over the vesting period
of the individual award consistent with the method described in Financial
Accounting Standards Board (FASB) Interpretation No. 28.

 (l) Advertising Expense

   The cost of advertising is generally expensed as incurred. Such costs are
included in selling and marketing expense and totalled approximately $10,000,
$114,000, $273,000, $132,000, and $400,000, for the years ended December 31,
1996, 1997 and 1998, and for the six months ended June 30, 1998 and 1999,
respectively.

                                      F-9
<PAGE>

                                  VIADOR INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
  (Information for the six months ended June 30, 1998 and 1999 is unaudited)


 (m) Comprehensive Income

   The Company has no material components of other comprehensive income (loss)
for all periods presented.

 (n) Unaudited Interim Financial Statements

   The accompanying unaudited interim financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. In the opinion of management, the accompanying
unaudited financial statements have been prepared on the same basis as the
audited financial statements and include all adjustments, consisting only of
normal recurring adjustments, for the fair statement of the Company's
financial condition as of June 30, 1999 and its results of operations and cash
flows for the six months ended June 30, 1998 and 1999.

 (o) Net Loss Per Share

   Basic net loss per share is computed using the weighted-average number of
outstanding shares of common stock excluding shares of restricted stock
subject to repurchase summarized below. Diluted net loss per share is computed
using the weighted-average number of shares of common stock outstanding
excluding shares of restricted stock subject to repurchase and, when dilutive,
potential common shares from restricted stock options and warrants to purchase
common stock using the treasury stock method and from convertible securities
using the "as if converted" basis. The following potential common shares have
been excluded from the computation of diluted net loss per share for all
periods presented because the effect would have been antidilutive (in
thousands):

<TABLE>
<CAPTION>
                                                                   Six Months
                                                   Year Ended      Ended June
                                                  December 31,        30,
                                               ------------------ ------------
                                               1996  1997   1998  1998   1999
                                               ----- ----- ------ ----- ------
<S>                                            <C>   <C>   <C>    <C>   <C>
Shares issuable under stock options........... 2,365 2,823  3,045 3,315  3,287
Shares of restricted stock subject to
 repurchase................................... 2,560 1,636    765 1,209    348
Shares issuable pursuant to warrants to
 purchase common and convertible preferred
 stock........................................    --    --     90    63    102
Shares of convertible preferred stock on an
 "as if converted" basis......................    -- 3,704 10,336 3,704 16,327
</TABLE>

   The weighted-average exercise price of stock options was $0.05, $0.05 and
$0.12 for the years ended December 31, 1996, 1997, and 1998 and $0.10 and
$0.74 for the six months ended June 30, 1998 and 1999, respectively. The
weighted-average purchase price of restricted stock was $0.02 for all periods
presented. The weighted-average exercise price of the warrants was $0.70,
$0.72, and $0.89 for the year ended December 31, 1998 and for the six months
ended June 30, 1998 and 1999.

 (q) Recent Accounting Pronouncements

   In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS
No. 133 establishes accounting and reporting standards for derivative
financial instruments and hedging activities related to those instruments, as
well as other hedging activities. Because the Company does not currently hold
any derivative instruments and does not engage in hedging activities, the
Company expects that the adoption of SFAS No. 133 will not have a material
impact on its financial position, results of operations, or cash flows. The
Company will be required to adopt SFAS No. 133 in fiscal 2001.

                                     F-10
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)


(3) Property and Equipment

   A summary of property and equipment consisted of the following (in
thousands):

<TABLE>
<CAPTION>
                                                         December 31,
                                                         ------------- June 30,
                                                          1997   1998    1999
                                                         ------ ------ --------
   <S>                                                   <C>    <C>    <C>
   Computers and software............................... $  387 $  608  $1,046
   Furniture and fixtures...............................     61    120     260
   Leasehold improvements...............................     --    204     214
                                                         ------ ------  ------
                                                            448    932   1,520
   Less accumulated depreciation and amortization.......    107    355     603
                                                         ------ ------  ------
                                                         $  341 $  577  $  959
                                                         ====== ======  ======
</TABLE>

(4) Stockholders' Equity

 (a) Convertible Preferred Stock

   Convertible preferred stock outstanding as of June 30, 1999 is as follows
(in thousands):

<TABLE>
<CAPTION>
                                                            Shares   Issued and
                                                          Designated Outstanding
                                                          ---------- -----------
   <S>                                                    <C>        <C>
     Series A............................................    3,704      3,704
     Series B............................................    8,000      6,633
     Series C............................................    6,000      5,990
                                                            ------     ------
                                                            17,704     16,327
                                                            ======     ======
</TABLE>

   The rights, preferences, privileges, and restrictions of Series A and B
convertible preferred stock are as follows:

  .  Each share of Series A and B convertible preferred stock is convertible
     at the option of the holder, at any time after the date of issuance,
     into 0.417 shares of common stock, subject to adjustment for certain
     dilutive events. Each share has voting rights equal to the common stock
     on an "as-if-converted" basis.

  .  Conversion into common stock is automatic upon the closing of a public
     offering of the Company's common stock at a purchase price of not less
     than $7.42 and $12.00 per share and at an aggregate offering price of
     not less than $7,500,000 and $15,000,000 for Series A and B convertible
     preferred stock, respectively.

  .  Series A and B convertible preferred stockholders are entitled to
     noncumulative dividends of $0.10 and $0.13 per share per annum,
     respectively, when and if declared by the Company's Board of Directors.
     As of June 30, 1999, no dividends have been declared.

  .  Each share of Series A and B convertible preferred stock has a
     liquidation preference of $1.031 and $1.30 per share, respectively, plus
     any declared but unpaid dividends over holders of common stock.

     In the event of liquidation of the Company, after payment has been made
     to the holders of Series A and B convertible preferred stock of the full
     preferential amounts, any remaining assets would be distributed ratably
     amongst the common and convertible preferred stockholders in proportion
     to their common ownership on an "as if converted" basis up to a maximum
     of three times the initial preferred investment. Thereafter common
     shareholders equally divide the remaining assets.

                                      F-11
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)


   In April 1998, the Company issued $2,000,000 in convertible bridge notes,
bearing 9% interest, payable to certain preferred stockholders. The full amount
of the notes plus accrued interest payable of $63,000 was converted into
2,350,559 shares of Series B preferred stock in August 1998. In conjunction
with the issuance of the convertible notes, the Company issued warrants to
purchase 62,500 common stock at an exercise price of $0.30 per share. The
$130,000 fair value assigned to the warrants and related discount on the notes
was determined using the Black-Scholes option pricing model using the following
assumptions: no dividends; contractual life of 5 years; risk-free interest rate
of 6.9%; and expected volatility of 65%. The discount on the notes payable was
amortized to interest expense over the period the notes were outstanding. The
warrants expire in April 2003 or upon the closing of an IPO, whichever occurs
first.

   On May 14, 1999, the Company issued 5,990,385 shares of Series C convertible
preferred stock for $2.434 per share resulting in gross proceeds to the Company
of approximately $14,581,000. The rights, preferences, and privileges of the
holders of Series C preferred stock are the same as the holders of Series A and
B convertible preferred stock discussed above, except that the dividend rate is
$0.15 per share, and the liquidation preference is $2.434 per share.

 (b) Stock Plan

   The Company has reserved 4,047,326 shares of common stock for issuance under
its 1997 stock option plan (the Plan). The Plan provides for the issuance of
stock purchase rights, incentive stock options, or nonstatutory stock options.

   The stock purchase rights are subject to a restricted stock purchase
agreement whereby the Company has the right to repurchase the stock upon the
voluntary or involuntary termination of the purchaser's employment with the
Company at the original issuance cost. The Company's repurchase right lapses
generally over a three year period. Through June 30, 1999, the Company has
issued 2,560,417 shares under restricted stock purchase agreements of which
347,695 are subject to repurchase at a weighted average price of $0.05 per
share. These restricted shares were issued to officers of the Company for full
recourse promissory notes with an interest rate of 9% and a term of three
years.

   The incentive stock options under the Plan can be exercised at a price of at
least 85% of the stock's fair market value on the date of grant for employees
owning less than 10% of the voting power of all classes of stock, and at least
110% of the fair market value on the date of grant for employees owning more
than 10% of the voting power of all classes of stock.

   Under the Plan, options generally expire in 10 years. However, the term of
the options may be limited to 5 years if the optionee owns stock representing
more than 10% of the voting power of all classes of stock. Vesting periods are
determined by the Company's Board of Directors and generally provide for shares
to vest ratably over a 3 to 4 year period.

   In August 1998, the Company repurchased 26,920 shares of common stock at
prices ranging from $.113 to $1.44 per share in settlement of $35,000 notes
receivable from two stockholders and forgave notes receivable from five other
stockholders totaling $103,000 for the return of 181,414 unvested stock
options. The Company recorded a $103,000 compensation charge for the
forgiveness of the notes.

   The Company issued options to purchase 94,783 shares of common stock at
exercise prices ranging from $0.05 to $0.24 to non-employees for services
performed. The fair value of the options at the vesting date was

                                      F-12
<PAGE>

                                  VIADOR INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
  (Information for the six months ended June 30, 1998 and 1999 is unaudited)

determined to be $188,000 using the Black-Scholes option pricing model using
the following assumptions: no dividends; contractual life of 10 years; risk-
free interest rate of 6.9%; and expected volatility of 65%. The fair value of
the options was charged to expense in 1998 as the related services were
performed.

   In the first six months of 1999, the Company issued options to purchase
9,358 shares of common stock at exercise prices ranging from $0.62 to $5.28 to
non-employees for services performed. The fair value of the options at the
vesting date was determined to be $35,000 using the Black-Scholes option
pricing model using the following assumptions: no dividends; contractual life
of 10 years; risk-free interest rate of 5.6%; and expected volatility of 65%.
The fair value of the options was charged to expense in 1999 as the related
services were performed.

   As of December 31, 1998, there were 396,481 additional stock options
available for grant under the Plan.

 (c) Warrants

   In 1998, the Company issued warrants to purchase 12,500 shares of common
stock at an exercise price of $0.72 per share in exchange for services. These
warrants expire upon the earlier of August 2003, or upon an IPO of the
Company's common stock. The $39,000 fair value of the warrants was determined
using the Black-Scholes option pricing model, using the following assumptions:
no dividends; contractual life of 5 years; risk-free interest rate of 6.5%;
and expected volatility of 65%. The fair value of the warrants was charged to
expense in 1998 as the related services were performed.

   In 1998, the Company issued warrants to purchase 14,760 shares of common
stock at prices ranging from $0.24 to $0.26 per share in exchange for
services. These warrants expire upon the earlier of five years from the grant
date, or upon an IPO of the Company's common stock. The $49,000 fair value of
the warrants was determined using the Black-Scholes option pricing model using
the following assumptions: no dividends; contractual life of 5 years; risk-
free interest rate of 6.5%; and expected volatility of 65%. The fair value of
the warrants was charged to expense in 1998 as the related services were
performed.

   In May 1999, the Company issued warrants to purchase 9,615 shares of Series
C preferred stock at a price of $2.434 per share in exchange for services.
These warrants expire upon the earlier of May 2003, or upon an IPO of the
Company's common stock. The $15,000 fair value of the warrants was determined
using the Black-Scholes option pricing model using the following assumptions:
no dividends; contractual life of 5 years; risk-free interest rate of 5.6%;
and expected volatility of 65%. The fair value of the warrants was charged to
expense in 1999 as the related services were performed.

   In the first six months of fiscal 1999, the Company issued 3,479 warrants
to purchase common stock at a price of $0.62 per share in exchange for
services. These warrants expire upon the earlier of five years from the grant
date, or upon an IPO of the Company's common stock. The $22,000 fair value of
the warrants was determined using the Black-Scholes option pricing model using
the following assumptions: no dividends; contractual life of 5 years; risk-
free interest rate of 5.6%; and expected volatility of 65%. The fair value of
the warrants was charged to expense in 1999 as the related services were
performed.

 (d) Stock-Based Compensation

   The Company uses the intrinsic-value method in accounting for its employee
stock-based compensation plans. Accordingly, no compensation cost has been
recognized for any of its stock options granted or restricted

                                     F-13
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

stock sold because the exercise price of each option or purchase price of each
share of restricted stock equaled or exceeded the fair value of the underlying
common stock as of the grant date for each stock option or purchase date of
each restricted stock share, except for stock options granted and restricted
stock sold from September 1998 through June 1999. With respect to the stock
options granted and restricted stock sold from September 1998 to June 1999, the
Company recorded deferred stock compensation of $3,003,000 for the difference
at the grant or issuance date between the exercise price of each stock option
granted or purchase price of each restricted share sold and the fair value of
the underlying common stock. This amount is being amortized on an accelerated
basis over the vesting period, generally 48 months. Had compensation costs been
determined in accordance with SFAS No. 123 for all of the Company's stock-based
compensation plans, net loss and basic and diluted net loss per share would
have been as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                   Years Ended December 31,
                                                   ---------------------------
                                                    1996      1997      1998
                                                   -------- --------  --------
   <S>                                             <C>      <C>       <C>
   Net loss:
     As reported.................................. $  (154) $ (3,348) $ (6,211)
     Pro forma....................................    (154)   (3,366)   (6,389)
   Basic and diluted net loss per share:
     As reported.................................. $ (0.08) $  (1.34) $  (1.82)
     Pro forma....................................   (0.08)    (1.35)    (1.87)
</TABLE>

   The fair value of each option was estimated on the date of grant using the
minimum value method with the following weighted-average assumptions: no
dividends, risk-free interest rate of 6.6%, 6.5%, and 5.6% for fiscal 1996,
1997, and 1998, respectively, and expected life of 4.3, 4.6 and 4.1 years for
1996, 1997 and 1998, respectively.

                                      F-14
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)


   A summary of the status of the Company's options under the Plan is as
follows:

<TABLE>
<CAPTION>
                                              Years Ended December 31,
                             -------------------------------------------------------------
                                    1996                1997                 1998
                             ------------------- -------------------- --------------------
                                       Weighted-            Weighted-            Weighted-
                                        average              average              average
                                       exercise             exercise             exercise
                              Shares     price    Shares      price    Shares      price
                             --------- --------- ---------  --------- ---------  ---------
   <S>                       <C>       <C>       <C>        <C>       <C>        <C>
   Outstanding at beginning
    of period..............         --   $  --   2,364,583    $0.05   2,822,481    $0.05
   Granted.................  2,364,583    0.05     570,580     0.10     723,736     0.26
   Exercised...............         --      --     (20,833)    0.05     (78,990)    0.10
   Canceled................         --      --     (91,849)    0.05    (421,865)    0.05
                             ---------           ---------            ---------
   Outstanding at end of
    period.................  2,364,583    0.05   2,822,481     0.05   3,045,362     0.12
                             =========           =========            =========
   Options vested and
    exercisable at end of
    period.................         --      --     854,941     0.05   1,781,060     0.07
                             =========           =========            =========
   Weighted-average fair
    value of options
    granted during the
    period with exercise
    prices equal to fair
    value at date of
    grant..................              $0.02                $0.02                $  --
   Weighted-average fair
    value of options
    granted during the
    period with exercise
    prices less than fair
    value at date of
    grant..................              $  --                $  --                $1.73
</TABLE>

   As of December 31, 1998, the range of exercise prices and weighted-average
remaining contractual life of outstanding options were as follows:

<TABLE>
<CAPTION>
                              Options outstanding          Options exercisable
                       ---------------------------------- ---------------------
                                    Weighted-
                                     average    Weighted-             Weighted-
                                    remaining    average               average
        Exercise         Number    contractual  exercise    Number    exercise
         prices        outstanding life (years)   price   exercisable   price
        --------       ----------- ------------ --------- ----------- ---------
   <S>                 <C>         <C>          <C>       <C>         <C>
   $0.05..............  2,207,628      7.74       $0.05    1,559,203    0.05
    0.24..............    778,985      9.29        0.24      221,023    0.24
    0.62..............     58,750      9.88        0.62           --      --
                        ---------                          ---------
                        3,045,363      8.18        0.12    1,780,226    0.72
                        =========                          =========
</TABLE>

                                      F-15
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)


(5) Income Taxes

   The differences between the income tax benefit computed at the federal
statutory rate and the Company's tax provision for all periods presented
primarily relate to net operating losses not benefited.

   The types of temporary differences that give rise to significant portions of
the Company's deferred tax assets and liabilities as of December 31, 1996,
1997, and 1998 are as follows (in thousands):

<TABLE>
<CAPTION>
                                 1996   1997     1998
                                 ----  -------  -------
   <S>                           <C>   <C>      <C>
   Deferred tax assets:
     Reserves and accruals.....  $ 54      116      523
     Net operating loss and tax
      credit carryforwards.....    32    1,366    3,266
                                 ----  -------  -------
     Gross deferred tax
      assets...................    86    1,482    3,789
     Less valuation allowance..   (83)  (1,474)  (3,788)
                                 ----  -------  -------
       Total deferred tax
        assets.................     3        8        1
     Deferred tax liabilities--
      property and equipment...    (3)      (8)      (1)
                                 ----  -------  -------
       Net deferred tax
        assets.................  $ --  $    --  $    --
                                 ====  =======  =======
</TABLE>

   In light of the Company's recent history of operating losses, the Company
has provided a valuation allowance for its net deferred tax assets as it is
presently unable to conclude that it is more likely than not that the deferred
tax assets will be realized. The net change in the total valuation allowance
for the year ended December 31, 1998, was $2,314,000.

   As of December 31, 1998, the Company has net operating loss carryforwards
for federal and state income tax purposes of approximately $6,700,000 available
to reduce future income subject to income taxes. The federal net operating loss
carryforwards expire between 2012 and 2019. The state net operating loss
carryforwards expire beginning in 2004.

   As of December 31, 1998, the Company also has research credit carryforwards
for federal and state income tax purposes of approximately $210,000 and
$169,000, respectively, available to reduce future income taxes. The federal
research credit carryfoward expire beginning in 2011 through 2019. The research
credit carryforwards for state purposes carry forward indefinitely until
utilized. The Company has a foreign tax credit carryforward for federal tax
purposes in the amount of $20,000. The foreign tax credit carryforward expires
in 2002.

   Federal and state tax laws impose substantial restrictions on the
utilization of net operating loss carryforwards in the event of an "ownership
change" as defined in Section 382 of the Internal Revenue Code. If the Company
has an ownership change, utilization of the above mentioned carryforwards could
be reduced significantly.

                                      F-16
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)


(6) Geographic, Segment and Significant Customer Information

   In 1998, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 131, Disclosures about Segments of an Enterprise and Related
Information. SFAS No. 131 establishes standards for the manner in which public
companies report information about operating segments in annual and interim
financial statements. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. The method
for determining what information to report is based on the way management
organizes the operating segments within the Company for making operating
decisions and assessing financial performance.

   The Company's chief operating decision-maker is considered to be the chief
executive officer (CEO). The CEO reviews financial information presented on an
entity level basis accompanied by disaggregated information about revenues by
product type and certain information about geographic regions for purposes of
making operating decisions and assessing financial performance. The entity
level financial information is identical to the information presented in the
accompanying statements of operations. Therefore, the Company has determined
that it operates in a single operating segment: Enterprise information portal
systems. The disaggregated information reviewed on a product basis by the CEO
is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                     Six Months
                                                      Years Ended    Ended June
                                                      December 31,       30,
                                                    ---------------- -----------
                                                    1996 1997  1998  1998  1999
                                                    ---- ----- ----- ----- -----
   <S>                                              <C>  <C>   <C>   <C>   <C>
   Revenue
     License.......................................  56    839 2,283 1,142 2,131
     Services
      Consulting................................... 940    638 1,112   518   823
      Maintenance..................................   1    105   430    94   336
                                                    ---  ----- ----- ----- -----
                                                    997  1,582 3,825 1,754 3,290
                                                    ===  ===== ===== ===== =====
</TABLE>

   Significant customer information is as follows:
<TABLE>
<CAPTION>
                                                                           % of Total Accounts
                                    % of Total Revenue                         Receivable
                            -------------------------------------------   ---------------------
                                                          Six Months
                                                             Ended
                            Year Ended December 31,        June 30,
                            ---------------------------   -------------   December 31, June 30,
                             1996      1997      1998     1998    1999        1998       1999
                            -------   -------   -------   -----   -----   ------------ --------
   <S>                      <C>       <C>       <C>       <C>     <C>     <C>          <C>
   Customer A..............      23%       --        --      --      --        --         --
   Customer B..............       1%       10%       11%      6%      4%       14%         6%
   Customer C..............      --        --        --      --      12%       17%         1%
   Customer D..............      43%       --        --      --      --        --         --
   Customer E..............      --         2%        5%     12%     --         1%        --
   Customer F..............      --         5%       15%     17%      3%        6%        --
   Customer G..............      18%        8%       --      --      --        --         --
   Customer H..............      --        --         6%     10%      1%        4%         1%
</TABLE>

   Revenues aggregating 4% and 6% of total revenues for the year ended December
31, 1998 and for the six months ended June 30, 1998, respectively, were
generated from customers who are also stockholders of the Company, and whose
ownership percentages ranged from 5% to 10% as of June 30, 1999.

                                      F-17
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)


   The Company markets its products from its operations in North America.
International sales are primarily to customers in Europe and Asia Pacific.
Revenues derived from International sales were 14% and 12% for the years ended
December 31, 1997 and 1998 and 8% and 14% for the six months ended June 30,
1998 and 1999. Sales did not exceed 4% for any one country outside of North
America in any period presented.

(7) Bank Borrowing, Commitments and Contingencies

   In 1998 the Company had a $1.5 million line of credit. The contractual rate
of interest under this line of credit was 9.5%. The Company had no balances
outstanding under this line of credit at December 31, 1998.

   On March 17, 1999, the Company entered into a $2,000,000 bank line of
credit. Borrowings under the agreement bear interest of prime plus 1%. On March
17, 1999 the Company also entered into a revolving equipment loan in the amount
of $500,000. This loan bears interest at prime plus 1.5%. As of June 30, 1999,
the Company had no balances outstanding under the line of credit or the
equipment loan. The loans are based on a percentage of qualified outstanding
accounts receivable and is secured by a security interest in certain of the
Company's intellectual property.

   The Company leases its facilities and certain equipment under noncancelable
operating lease agreements expiring in the year 2000. Rent expense was
approximately $38,000, $103,000 and $312,000 for the years ended December 31,
1996, 1997 and 1998, respectively. Future minimum lease payments under
noncancelable operating leases are approximately $391,000 and $200,000 for
fiscal years 1999 and 2000, respectively.

   On April 1, 1999 the Company entered into a software marketing and
distribution agreement with a distributor located in Germany. The agreement
includes a buyout obligation that can be exercised by the distributor following
the third anniversary of the agreement if minimum sales quotas and certain
conditions have been met. As of June 30, 1999, no sales have been reported by
the distributor.

   In 1999, a third party advised the Company of objections to an advertising
campaign the Company undertook in connection with its name change. The third
party filed a complaint in California state court alleging that the Company
violated their right of publicity, the Lanham Act and unfair competition law
because of the advertising campaign. The complaint seeks an injunction against
further advertising that uses the third parties name or likeness, compensatory
damages, the Company's profits resulting from the advertising, punitive
damages, attorneys' fees and costs and interest. The Company estimates this
matter will result in a settlement of approximately $138,000 which has been
accrued as of June 30, 1999 and is reflected in the accompanying statements of
operations for the six months then ended.

(8) Subsequent Events

 (a) Employee Stock Purchase Plan

   The Company's Board of Directors adopted the Employee Stock Purchase Plan
(the Purchase Plan) on July 20, 1999 under which 300,000 shares have been
reserved for issuance. The Purchase Plan is pending approval by the
stockholders. The number of shares reserved under the Purchase Plan will
automatically increase beginning on January 1 of each year by the lesser of an
amount equal to 1% of the total number of outstanding shares, or 500,000
shares. Under the Purchase Plan, eligible employees may purchase common stock
in an amount not to exceed 15% of an employee's cash compensation. The purchase
price per share will be 85% of the common stock fair value at the lower of
certain plan defined dates.

                                      F-18
<PAGE>

                                  VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1999 and 1999 is unaudited)


 (b) 1999 Stock Incentive Plan

   The Company's Board of Directors adopted the 1999 Stock Incentive Plan (the
Incentive Plan) on July 20, 1999 under which 12,292,000 shares have been
reserved for issuance. The Directors Plan is pending approval by the
stockholders. The number of shares reserved under the Incentive Plan will
automatically increase beginning on January 1 of each year by the lessor of 4%
of the total number of shares outstanding or 3,000,000 shares. The Incentive
Plan has five separate programs which allows non-employee board members,
executive officers and other highly compensated employees to purchase shares
using a portion of their salary or retainer fee. The Incentive Plan allows
eligible employee to be issued shares of common stock directly, upon the
attainment of performance milestones or the completion of services. The
Incentive Plan also allows automatic option grants at periodic intervals to
eligible non-employee board members to purchase shares of common stock.

 (c) Reverse Stock Split and Reincorporation

   On July 28, 1999, the Board of Directors approved a 1 for 2.4 reverse stock
split of the Company's convertible preferred stock and common stock and a
reincorporation in the state of Delaware to be completed prior to the
effectiveness of the Company's IPO. The accompanying financial statements have
been retroactively restated to give effect to the reverse stock split and the
reincorporation in Delaware.

                                      F-19
<PAGE>

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

Prospective investors may rely only on the information contained in this pro-
spectus. Neither Viador Inc. nor any underwriter has authorized anyone to pro-
vide prospective investors with different or additional information. This pro-
spectus is not an offer to sell nor is it seeking an offer to buy these securi-
ties in any jurisdiction where the offer or sale is not permitted. The informa-
tion contained in this prospectus is correct only as of the date of this pro-
spectus, regardless of the time of the delivery of this prospectus or any sale
of these securities.

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

                               TABLE OF CONTENTS

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

<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
<S>                                                                       <C>
Prospectus Summary.......................................................   1
The Offering.............................................................   3
Risk Factors.............................................................   5
Use of Proceeds..........................................................  18
Dividend Policy..........................................................  18
Capitalization...........................................................  19
Dilution.................................................................  20
Selected Financial Data..................................................  21
Management's Discussion and Analysis of Financial Condition and Results
 of Operations...........................................................  22
Business.................................................................  32
Management...............................................................  45
Certain Transactions.....................................................  55
Principal Stockholders...................................................  57
Description of Capital Stock.............................................  60
Shares Eligible for Future Sale..........................................  63
Underwriting.............................................................  64
Legal Matters............................................................  66
Experts..................................................................  66
Additional Information...................................................  66
</TABLE>

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

Until      , 1999 (25 days after the date of this prospectus), all dealers that
effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.

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

                                         Shares

                                [LOGO OF VIADOR]

                                  Viador Inc.

                                  Common Stock

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

                             PRELIMINARY PROSPECTUS

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

                            Bear, Stearns & Co. Inc.

                               CIBC World Markets

                           U.S. Bancorp Piper Jaffray

                                       , 1999

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                                    PART II

                    INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

   The following table sets forth the costs and expenses, other than
underwriting discounts, payable by the Registrant in connection with the offer
and sale of the common stock being registered. All amounts are estimates
except the registration fee, the NASD filing fee and the Nasdaq National
Market entry and application fee.

<TABLE>
   <S>                                                                  <C>
   Registration fee.................................................... $12,788
   NASD filing fee.....................................................   5,100
   Blue Sky/NASD fees and expenses (including legal fees)..............       *
   Nasdaq National Market entry and application fee....................       *
   Accounting fees and expenses........................................       *
   Other legal fees and expenses.......................................       *
   Transfer agent and registrar fee....................................       *
   Printing and engraving..............................................       *
   Miscellaneous.......................................................       *
                                                                        -------
     Total............................................................. $     *
                                                                        =======
</TABLE>
   *  To be supplied by amendment.

Item 14. Indemnification of Directors and Officers

   Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
the 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. Article VII, Section
6, of the Registrant's Bylaws provides for mandatory indemnification of its
directors and officers and permissible indemnification of employees and other
agents to the maximum extent permitted by the Delaware General Corporation
Law. The Registrant's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") provides that, pursuant to Delaware law, its
directors shall not be liable for monetary damages for breach of the
directors' fiduciary duty as directors to the Company or its stockholders.
This provision in the Certificate of Incorporation does not eliminate the
directors' fiduciary duty, and in appropriate circumstances equitable remedies
such as injunctive or other forms of non-monetary relief will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Company for acts
or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Registrant has
entered into Indemnity Agreements with its officers and directors, a form of
which is attached as Exhibit 10.4 hereto and incorporated herein by reference.
The Indemnification Agreements provide the Registrant's officers and directors
with further indemnification to the maximum extent permitted by the Delaware
General Corporation Law. The Registrant maintains directors and officers
liabilities insurance. Reference is made to Section 8 of the Underwriting
Agreement contained in Exhibit 1.1 hereto, indemnifying officers and directors
of the Registrant against certain liabilities.

                                     II-1
<PAGE>

Item 15. Recent Sales of Unregistered Securities

   Since July 1996, we have issued and sold the following securities:

     (a) We issued and sold 2,560,417 shares of our common stock to founders
  for an aggregate purchase price of $122,900 pursuant to direct stock
  issuances and we issued approximately 350,000 shares of common stock for
  consideration of approximately $39,000 upon the exercise of options under
  our Amended and Restated 1997 Stock Option/Stock Issuance Plan.

     (b) We issued options to purchase 3,287,155 shares of common stock with
  a weighted average exercise price of $0.744 per share.

     (c) In May 1998, we issued a warrant which currently permits the holder
  to purchase up to 46,875 shares of our common stock, at an exercise price
  of $0.72 per share (subject to adjustment), to Standard Foods Taiwan, Ltd.
  and two of its affiliated entities.

     (d) In August 1998, we issued a warrant which currently permits the
  holder to purchase up to 12,500 shares of our common stock, at an exercise
  price of $0.72 per share (subject to adjustment), to Brobeck, Phleger &
  Harrison LLP.

     (e) In November 1998, we issued a warrant which currently permits the
  holder to purchase up to 5,834 shares of our common stock, at an exercise
  price of $0.24 per share (subject to adjustment), to Outcast
  Communications, Inc.

     (f) In July 1998, we issued 46,000 shares of Series B preferred stock to
  Mr. Robert Santoni pursuant to settlement agreement entered into between
  Health Point Ltd., Mr. Santoni and us. We also issued an option to purchase
  18,334 shares of common stock, at an exercise price of $0.24 per share
  (subject to adjustment) to Mr. Santoni pursuant to such settlement
  agreement.

     (g) In July 1999, we issued a warrant to purchase 9,615 shares of Series
  C preferred stock, at an exercise price of $2.434 per share (subject to
  adjustment), to a commercial bank.

     (h) In May 1997, we issued and sold an aggregate of 3,703,764 shares of
  Series A preferred stock to several investors for an aggregate purchase
  price of $3,818,581.

     (i) In August 1998, we issued and sold an aggregate of 6,586,716 shares
  of Series B preferred stock to several investors for an aggregate purchase
  price of $8,561,743.

     (j) In May 1999, we issued and sold an aggregate of 5,990,385 shares of
  Series C preferred stock to several investors for an aggregate purchase
  price of $14,580,597.

   None of the foregoing transactions involved any underwriters, underwriting
discounts or commissions, or any public offering, and we believe that each
transaction was exempt from the registration requirements of the Securities
Act by virtue of Section 4(2) thereof, Regulation D promulgated thereunder or
Rule 701 pursuant to compensatory benefit plans and contracts relating to
compensation as provided under such Rule 701. The recipients in such
transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof, and appropriate legends were affixed to the share
certificates and instruments issued in such transactions. All recipients had
adequate access, through their relationships with us, to information about us.

                                     II-2
<PAGE>

Item 16. Exhibits and Financial Statement Schedules

   (a) Exhibits

<TABLE>
 <C>   <S>
  1.1* Form of Underwriting Agreement
  2.1  Form of Agreement and Plan of Merger of Viador Inc., a Delaware
       corporation, and Viador, Inc., a California Corporation
  3.1  Second Amended and Restated Certificate of Incorporation
  3.2  Amended and Restated Bylaws
  4.1  Reference is made to Exhibit 3.1
  4.2* Specimen Common Stock Certificate
  4.3  Amended and Restated Investors' Rights Agreement, among the registrant
       and the parties listed on Schedule A thereto dated May 21, 1999, as
       amended on July 23, 1999
  5.1* Opinion of Brobeck, Phleger & Harrison LLP
 10.1  Form of Amended and Restated 1997 Stock Option/Stock Issuance Plan
 10.2  Form of 1999 Stock Incentive Plan
 10.3  Form of 1999 Employee Stock Purchase Plan
 10.4  Form of Indemnification Agreement for Officers and Directors
 10.5  Assignment of Lease, by and between the Registrant and Valley of
       California, Inc., and Consent to Assignment, dated as of December 16,
       1997 and related office leases
 10.6  Collateral Assignment, Patent Mortgage and Security Agreement, by and
       between the Registrant and Comerica Bank--California, dated March 4,
       1997
 10.7  Revolving Credit Loan and Security Agreement, by and between the
       Registrant and Comerica Bank--California, dated March 17, 1999
 23.1  Consent of KPMG LLP, independent auditors
 23.2* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
 24.1  Power of Attorney (included on signature page)
 27.1  Financial Data Schedule
</TABLE>
----------
*To be filed by amendment.

   (b) Financial Statement Schedules not listed above have been omitted
because the information required to be set forth therein is not applicable or
is shown in the financial statements.

Item 17. Undertakings

   Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14, or otherwise, the
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
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the 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, the 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 of
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue. The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser. The undersigned
Registrant hereby undertakes that: (1) For purposes of determining any
liability under the Securities Act, the information omitted from the form of
Prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of Prospectus filed by the 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 Statement as of the time it was declared effective
and (2) 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 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.

                                     II-3
<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-1 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Palo Alto, State of California, on
this 29th day of July, 1999.

                                          VIADOR INC.

                                                      /s/ Stan X. Wang
                                          By: _________________________________
                                                        Stan X. Wang
                                               President and Chief Executive
                                                          Officer

                               POWER OF ATTORNEY

   KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, Stan X. Wang
and Raja H. Venkatesh, and each one of them, his true and lawful attorneys-in-
fact and agents, each with full power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to sign any registration statement for the same offering
covered by this Registration Statement that is to be effective upon filing
pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as
amended, and all post-effective amendments thereto, and to file the same, with
all exhibits thereto and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming that each of said attorneys-in-fact
and agents or any of them, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

   IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.

   Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the persons whose signatures
appear below, which persons have signed such Registration Statement in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
              Signature                              Title                       Date
              ---------                              -----                       ----

<S>                                    <C>                                <C>
         /s/ Stan X. Wang              Chief Executive Officer, President    July 29, 1999
______________________________________  and Director (Principal Executive
             Stan X. Wang               Officer)

      /s/ Raja H. Venkatesh            Chief Financial Officer (Principal    July 29, 1999
______________________________________  Financial Officer and Principal
          Raja H. Venkatesh             Accounting Officer)

         /s/ Teddy Kiang               Director                              July 29, 1999
______________________________________
             Teddy Kiang

        /s/ Dawn G. Lepore             Director                              July 29, 1999
______________________________________
            Dawn G. Lepore

        /s/ Chong Sup Park             Director                              July 29, 1999
______________________________________
            Chong Sup Park

     /s/ Virginia M. Turezyn           Director                              July 29, 1999
______________________________________
         Virginia M. Turezyn
</TABLE>

                                     II-4
<PAGE>

                                  VIADOR INC.

                       VALUATION AND QUALIFYING ACCOUNTS

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

<TABLE>
<CAPTION>
                          Balance at  Charged to                           Balance at
                         beginning of  cost and    Charged to                end of
                           the year    expenses  other accounts Deductions  the year
                         ------------ ---------- -------------- ---------- ----------
<S>                      <C>          <C>        <C>            <C>        <C>
Year ended December 31,
 1998
Allowance for doubtful
 accounts...............   $50,000     $112,575       $--        $109,575   $53,000
Year ended December 31,
 1997
Allowance for doubtful
 accounts...............   $20,000     $ 43,000                  $ 13,000   $50,000
Year ended December 31,
 1996
Allowance for doubtful
 accounts...............   $   --      $ 20,000       $--        $    --    $20,000
</TABLE>


                                      S-1
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit
   No.   Exhibit Name
 ------- ------------
 <C>     <S>
  1.1*   Form of Underwriting Agreement
  2.1    Form of Agreement and Plan of Merger of Viador Inc., a Delaware
         corporation, and Viador, Inc., a California Corporation
  3.1    Second Amended and Restated Certificate of Incorporation
  3.2    Amended and Restated Bylaws
  4.1    Reference is made to Exhibit 3.1
  4.2*   Specimen Common Stock Certificate
  4.3    Amended and Restated Investors' Rights Agreement, among the registrant
         and the parties listed on Schedule A thereto dated May 21, 1999, as
         amended on July 23, 1999
  5.1*   Opinion of Brobeck, Phleger & Harrison LLP
 10.1    Form of Amended and Restated 1997 Stock Option/Stock Issuance Plan
 10.2    Form of 1999 Stock Incentive Plan
 10.3    Form of 1999 Employee Stock Purchase Plan
 10.4    Form of Indemnification Agreement for Officers and Directors
 10.5    Assignment of Lease, by and between the Registrant and Valley of
         California, Inc., and Consent to Assignment, dated as of December 16,
         1997 and related office leases
 10.6    Collateral Assignment, Patent Mortgage and Security Agreement, by and
         between the Registrant and Comerica Bank--California, dated March 4,
         1997
 10.7    Revolving Credit Loan and Security Agreement, by and between the
         Registrant and Comerica Bank--California, dated March 17, 1999
 23.1    Consent of KPMG LLP, independent auditors
 23.2*   Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
 24.1    Power of Attorney (included on signature page)
 27.1    Financial Data Schedule
</TABLE>
----------
*To be filed by amendment.
[{"type": "S-1", "sequence": "1", "description": "FORM S-1", "secsgml_size_bytes": 352565}]
{"company-data": {"conformed-name": "VIADOR INC", "cik": "0001089026", "assigned-sic": "", "irs-number": "943234636"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-84041", "film-number": "99673418"}, "business-address": {"street1": "167 SECOND AVENUE", "city": "SAN MATEN", "state": "CA", "zip": "94401", "phone": "6506853000"}, "mail-address": {"street1": "167 SECOND AVENUE", "city": "SAN MATEN", "state": "CA", "zip": "94401"}}
As filed with the Securities and Exchange Commission on July 29, 1999.
                                                    Registration No. 333-
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

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

                                  Viador Inc.
   (Exact Name of Registrant as Specified in its Certificate of Incorporation)
Delaware                           7372                        94-3234636
(State or Other Jurisdiction
               of                  (Primary Standard Industrial         (I.R.S. Employer
 Incorporation or Organization)    Classification Code Number)       Identification Number)
167 Second Avenue
                              San Mateo, CA 94401
                                (650) 685-3000
  (Address, Including Zip Code, and Telephone Number, Including Area Code, of
                 the Registrant's Principal Executive Offices)

                                 STAN X. WANG
                     President and Chief Executive Officer
                                  VIADOR INC.
                               167 Second Avenue
                              San Mateo, CA 94401
                                (650) 685-3000
  (Name and Address, Including Zip Code, and Telephone Number, Including Area
                          Code, of Agent for Service)

                                  Copies to:
CURTIS L. MO, ESQ.                           GREGORY K. MILLER, ESQ.
           RICHARD C. LESKA, ESQ.                       ANDREW S. WILLIAMSON, ESQ.
            J. OMAR MAHMUD, ESQ.                             LATHAM & WATKINS
       BROBECK, PHLEGER & HARRISON LLP                     505 Montgomery Street
            Two Embarcadero Place                               Suite 1900
               2200 Geng Road                         San Francisco, California 94111
      Palo Alto, California 94303-0913                        (415) 391-0600
               (650) 424-0160                               Fax (415) 395-8095
             Fax (650) 496-2885
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
   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, check the following box. [_]
   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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(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,
check the following box. [_]

                        CALCULATION OF REGISTRATION FEE

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Proposed Maximum
           Title of Each Class of                Aggregate         Amount of
        Securities to be Registered          Offering Price(1)  Registration Fee
--------------------------------------------------------------------------------
Common Stock, $0.001 par value.............     $46,000,000        $12,788.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the registration fee
    pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

   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 that 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 such Section
8(a), may determine.

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the     +
+Securities and Exchange Commission is effective. This prospectus is not an    +
+offer to sell these securities and we are not soliciting an offer to buy      +
+these securities in any state where the offer or sale is not permitted.       +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                  SUBJECT TO COMPLETION, DATED          , 1999

PRELIMINARY PROSPECTUS

                                [LOGO OF VIADOR]

                                       Shares

                                  Viador Inc.

                                  Common Stock

                                  -----------

This is an initial public offering of        shares of our common stock. We are
selling all of the shares of common stock offered under this prospectus.

There is currently no public market for our shares. We intend to apply to have
our common stock approved for listing on the Nasdaq National Market under the
symbol "VIAD."

See "Risk Factors" beginning on page 5 to read about certain risks that you
should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.

                                  -----------
Per
                                                                  Share  Total
                                                                  ------ ------
Public offering price............................................ $      $
Underwriting discounts and commissions........................... $      $
Proceeds, before expenses, to us................................. $      $
-----------

The underwriters may, under certain circumstances, purchase up to an additional
           shares of common stock from us at the initial public offering price
less the underwriting discount, solely to cover over-allotments.

The underwriters are severally underwriting the shares being offered. The
underwriters expect to deliver the shares against payment in New York, New York
on or about           , 1999.

                                  -----------

Bear, Stearns & Co. Inc.

                               CIBC World Markets

                                                      U.S. Bancorp Piper Jaffray

                The date of this prospectus is           , 1999
[Inside cover page]

 [A graphic depicting the components of the Viador E-Portal Suite and how they
                                work together.]
PROSPECTUS SUMMARY

   This summary contains basic information about us and this offering. Because
it is a summary, it does not contain all of the information that you should
consider before investing. You should read the entire prospectus carefully,
including the section entitled "Risk Factors" and our financial statements and
the notes thereto before making an investment decision. In this prospectus,
"Viador", "we", "us", and "our" refers to Viador Inc., but not to the
underwriters listed in this prospectus.

                                  VIADOR INC.

Our Business

   We are one of the first providers of internet software that enables
businesses to create enterprise information portals. An enterprise information
portal provides users with a personalized single point of access to an
organization's electronic information. This is similar to popular consumer
internet portals that provide access to the world wide web. We believe the
Viador E-Portal Suite offers a comprehensive and integrated enterprise
information portal that gives users a quick and easy way to organize, search
for and access up-to-the-minute information from a variety of enterprise data
sources. Our software is specifically designed for the web and works with a
customer's existing hardware and software systems, without the need for
additional technology expenditures. It provides a highly adaptable platform for
the management and sharing of information on a secure and cost-effective basis
that can accommodate significant increases in the number of users and amount of
information. In addition, our software enables users to securely deliver
information over the internet to facilitate e-business. As more users
contribute increasing amounts of information to the portal, we believe our
customers and their users are able to realize greater productivity and
efficiency in their businesses. Our customers include Charles Schwab, CIBC,
Citibank, IBM, Mitsui, Sprint and Xerox.

Our Market Opportunity

   In today's highly competitive environment, business decision-makers need
quick access to relevant information. However, the large and growing quantity
of information makes it difficult to identify and utilize relevant information.
In addition, there is a rapidly growing variety of technologies used for
creating, storing and organizing information. These include many different
hardware platforms--such as mainframe computers and client/server network
systems requiring the use of several access terminals and security protocols--
and different software applications--such as database, sales force automation,
client relationship management, intranet and document management systems and
enterprise resource planning software. Many of these hardware platforms and
software applications were developed independently and do not easily work
together. As a result, it is increasingly difficult and time consuming for
users to gain access to all relevant information for decision- making.

   To address these problems, we have developed the Viador E-Portal Suite,
which offers the following benefits:

  .  Single Access Point for All Enterprise Information. Our software
     provides a single access point to data from multiple sources within and
     outside the company.

  .  Adaptable Web-Based Architecture. In contrast to existing solutions, our
     software architecture is designed for the internet and can accommodate
     significant increases in the number of users and amount of information.

                                       1
.  Customized and Personalized Information. We address the information
     overload problem by helping users locate and retrieve the most pertinent
     business information. This capability increases the efficiency of
     information use by our customers' employees.

  .  Combines Ease of Use with Sophisticated Functionality.  Our browser
     interface combines the ease of use of popular consumer internet portals
     with a full range of sophisticated search and analysis functionality.

  .  Builds Upon Customers' Existing Investments in Information
     Technology. Because most businesses operate in a diverse computing
     environment, our products are designed to interact with and access a
     broad range of software platforms and products.

  .  Ease of Implementation. The Viador E-Portal Suite is designed to be
     implemented rapidly over the web using our customers' existing
     information technology.

  .  Secure and Selective Access. Our security features permit customers to
     become extended enterprises that share confidential information rapidly
     over the internet with a large number of geographically distributed
     offices, employees, customers, suppliers and partners.

Our Strategy

   Our strategy is to be the leading provider of enterprise information portal
software solutions. We believe that the most effective way to achieve our goal
is to continue to improve our products and to significantly grow our direct
sales organization to expand coverage and penetration of large enterprise
opportunities. As a complement to our internal sales, marketing and development
efforts, we intend to continue to develop strategic relationships with
companies that are at the forefront of e-business technology.

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

   We were incorporated in the State of California as Infospace, Inc. on
December 4, 1995 and changed our name to Viador Inc. on January 28, 1999. Our
principal headquarters are located at 167 Second Avenue, San Mateo, California
94401, and our telephone number is (650) 685-3000. Information contained on our
web site is not a part of this prospectus.

   Viador E-Portal Suite(TM) and the Viador name and logo and the names of
products and services offered by Viador (including those referred to in
"Business") are trademarks, registered trademarks, service marks or registered
service marks of Viador. This prospectus also includes product names, trade
names and trademarks of other companies.

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

   Unless we indicate otherwise, all information in this prospectus assumes:

  .  the reincorporation of Viador in Delaware at or prior to the
     consummation of this offering;

  .  the conversion of each outstanding share of our convertible preferred
     stock into common stock immediately prior to the consummation of this
     offering;

  .  the exercise of outstanding warrants to purchase 75,001 shares of our
     common stock at an exercise price of $0.72 per share, the exercise of
     outstanding warrants to purchase 5,834 shares of our common stock at an
     exercise price of $0.24 per share and the exercise of outstanding
     warrants to purchase 9,615 shares of our Series C Preferred Stock at an
     exercise price of $2.434 per share, upon the consummation of this
     offering;

  .  no exercise of the underwriters' over-allotment option; and

  .  a 1 for 2.4 reverse stock split of all our outstanding shares of capital
     stock to be effected immediately prior to the completion of this
     offering.

                                       2
The Offering
Common stock being offered.................               shares
Common stock outstanding after this                       shares
 offering..................................
Use of proceeds............................ We plan to use the net proceeds from this
                                            offering to fund operating losses, working
                                            capital needs and capital expenditures
                                            expected to be incurred in connection with
                                            our operations.
Proposed Nasdaq National Market symbol..... VIAD
The common stock outstanding after this offering is based on the number of
shares outstanding as of
June 30, 1999, and excludes:

  .  3,287,155 shares of common stock issuable upon exercise of outstanding
     options with a weighted average exercise price of $0.74 per share;

  .  12,292,000 shares reserved for issuance under our 1999 Stock Incentive
     Plan; and

  .  300,000 shares reserved for issuance under our 1999 Employee Stock
     Purchase Plan.

                                       3
SUMMARY FINANCIAL DATA
                     (in thousands, except per share data)
Six Months
                                Years Ended December 31,      Ended June 30,
                              ------------------------------  ----------------
                              1995   1996    1997     1998     1998     1999
                              ----- ------  -------  -------  -------  -------
                                                                (unaudited)
Statements of Operations
 Data:
Revenue...................... $  80 $  997  $ 1,582  $ 3,825  $ 1,754  $ 3,290
Cost of revenue..............    10    314      903    1,387      640      874
                              ----- ------  -------  -------  -------  -------
Gross profit.................    70    683      679    2,438    1,114    2,416
Operating expenses...........    34    847    4,089    8,586    3,381    7,793
                              ----- ------  -------  -------  -------  -------
Operating income (loss)......    36   (164)  (3,410)  (6,148)  (2,267)  (5,377)
Interest income (expense),
 net.........................   --      10       62      (63)      (2)     116
                              ----- ------  -------  -------  -------  -------
Net income (loss)............    36 $ (154) $(3,348) $(6,211) $(2,269) $(5,261)
                              ===== ======  =======  =======  =======  =======
Basic and diluted net loss
 per share................... $0.02 $(0.08) $ (1.34) $ (1.82) $ (0.71) $ (1.28)
                              ===== ======  =======  =======  =======  =======
Weighted average shares used
 in computing basic and
 diluted net loss per share.. 1,563  1,993    2,495    3,416    3,177    4,126
June 30, 1999
                                                             -------------------
                                                                      Pro Forma
                                                             Actual  As Adjusted
                                                             ------- -----------
                                                               (in thousands)
Balance Sheet Data:
Cash and cash equivalents................................... $14,259   $
Working capital.............................................  12,169
Total assets................................................  18,869
Total stockholders' equity .................................  13,284
The above balance sheet data is set forth:

  .  on an actual basis; and

  .  on a pro forma as adjusted basis assuming the conversion of all
     outstanding shares of convertible preferred stock into common stock and
     the exercise of outstanding warrants to purchase 75,001 shares of common
     stock at an exercise price of $0.72 per share, the exercise of
     outstanding warrants to purchase 5,834 shares of common stock at an
     exercise price of $0.24 per share and the exercise of outstanding
     warrants to purchase 9,615 shares of Series C Preferred Stock at an
     exercise price of $2.434 per share upon the consummation of this
     offering, as adjusted to reflect the sale of          shares of common
     stock by Viador at an assumed initial public offering price of $
     per share and after deducting the underwriting discounts and commissions
     and estimated offering expenses.

                                       4
RISK FACTORS

   An investment in our shares is extremely risky. This section describes some,
but not all, of the risk factors involved in purchasing our common stock. You
should carefully consider the following factors, in addition to the other
information presented in this prospectus, in evaluating us and our business.
Any of the following risks, as well as other risks we have not yet identified
or which we believe are not material, could seriously harm our business and
cause the trading price of our common stock to decline which could cause you to
lose all or part of your investment.

                            Risks Related to Viador

We have a short operating history, have incurred operating losses since our
inception and expect future operating losses.

   We were founded in 1995, and began offering software products in the third
quarter of 1996. Our primary product, the Viador E-Portal Suite, was first
shipped in the first quarter of 1999. From inception, we have experienced
operating losses, negative cash flows from operations and net losses in each
quarterly and annual period. As of June 30, 1999, we had an accumulated deficit
of approximately $14.8 million. The revenue and income potential of our
business and market is unproven, and our limited operating history makes it
difficult to evaluate us and our prospects.

   Currently, we anticipate making significant investments in our sales and
marketing programs, personnel recruitment, product development and
infrastructure. Therefore, we believe that we will continue to experience
significant losses on a quarterly and annual basis for the foreseeable future.
You must consider us and our prospects in light of the risks and difficulties
encountered by companies in the early stage of development, particularly
companies in new and rapidly evolving markets. Our ability to address these
risks depends on a number of factors which include our ability to:

  .  provide products and services that are reliable, cost-effective and able
     to accommodate significant increases in the number of users and amount
     of information;

  .  market our products and brand name effectively;

  .  continue to grow our infrastructure to accommodate new developments in
     the enterprise information portal software market and increased sales;

  .  hire, retain and motivate qualified personnel; and

  .  respond to competition.

   We may not be successful in meeting these challenges and addressing these
risks and uncertainties. If we are unable to do so, our business will not be
successful and your investment in our capital stock will decline in value.

   Although we have experienced growth in revenue in recent periods, this
growth rate may not be indicative of future operating results. We may never be
able to achieve or sustain profitability.

We cannot accurately predict the size of our market and widespread acceptance
of our products and services is uncertain.

   The market for enterprise information portal software is newly emerging and
there can be no assurance that it will grow or that, even if the market does
grow, customers will adopt our products. Accordingly, we cannot accurately
estimate the size of our market or the potential demand for our products and
services. We believe that market acceptance depends principally on our:

  .  marketing strategy and efforts;

                                       5
.  product and service differentiation and quality;

  .  customer support;

  .  distribution and pricing strategies as compared to our competitors;

  .  industry reputation; and

  .  general economic conditions.

   Some of the foregoing factors are beyond our control. If our customer base
does not expand, our business, prospects, results of operations and financial
condition will be materially adversely affected.

We rely heavily on revenue related to the Viador E-Portal Suite.

   We generate much of our revenue from licenses and services related to the
products comprising the Viador E-Portal Suite. We expect that these products
will continue to account for a large portion of our revenue for the foreseeable
future. Our future financial performance will depend on the successful
development, introduction and customer acceptance of new and enhanced versions
of our products and our business could be harmed if we fail to deliver the
enhancements to our products that customers want.

   Our services consist of maintenance, support, consulting and implementation.
Service revenue represented 47% and 40% of total revenue for 1997 and 1998,
respectively, and 35% of total revenue for the six months ended June 30, 1998
and June 30, 1999. We anticipate that service revenue will continue to
represent a significant percentage of total revenue. To a large degree, the
level of service revenue is dependent upon sales of the Viador E-Portal Suite,
the renewal of maintenance contracts by our installed customer base and the use
of our consulting services by clients. If service revenue is less than
anticipated, our operating results could be materially adversely affected. Our
ability to increase our service revenue will depend in large part on our
ability to increase the scale of our service organization, including our
ability to recruit and train a sufficient number of qualified service
representatives. There can be no assurance that we will be able to successfully
expand our service organization, which could materially adversely affect our
business, prospects, operating results and financial condition.

There are many factors beyond our control which may cause fluctuations in our
quarterly operating results.

   We expect to experience significant fluctuations in our future results of
operations due to a variety of factors, many of which are outside of our
control, including:

  .  demand for and market acceptance of our products and services;

  .  expansion into international markets;

  .  introduction of products and services or enhancements by us and our
     competitors;

  .  competitive factors that affect our pricing;

  .  the timing of customer installations;

  .  the mix of products and services we sell;

  .  the timing and magnitude of capital expenditures, including costs
     relating to the expansion of operations;

  .  the size of customer orders, some of which account for more than 10% of
     total revenue during a particular quarter;

  .  the hiring and retention of key personnel;

  .  conditions specific to the internet industry and other general economic
     factors; and

  .  new government legislation or regulation.

                                       6
We typically receive a substantial portion of our orders in the last two
weeks of each fiscal quarter because our customers often delay purchases of
products to the end of the quarter. Because a substantial portion of our costs
are relatively fixed and based on anticipated revenue, a failure to book an
expected order in a given quarter will likely not be offset by a corresponding
reduction in costs and, therefore, could adversely affect our operating
results.

   In addition, we plan to significantly increase our operating expenses to
expand our sales and marketing operations and consulting and training programs,
broaden our customer support capabilities, and fund greater levels of research
and development. Our operating expenses, which include research and
development, sales and marketing, and general and administrative expenses, are
based on our expectations of future revenues and are relatively fixed in the
short term. If revenue falls below our expectations in any quarter and we are
not able to quickly reduce our spending in response, our operating results will
be adversely affected and our stock price may fall.

Because our customers' orders vary substantially in size, our quarterly
operating results are difficult to forecast and may fluctuate.

   Customer orders during a particular quarter typically vary considerably in
size, from as low as several thousand dollars to over $500,000. For example,
during the quarter ended June 30, 1999, we recognized 18.5% of our revenue for
the quarter from a single customer. Similarly, for each of the quarters ended
September 30, 1998 and December 31, 1998, we had a single customer that
accounted for over 20% of our revenue for that quarter. In addition, we expect
to recognize revenue from one or more customers during the quarter ending
September 30, 1999 that exceeds 10% of our total revenue for the quarter.
Because of the large size of some individual customer orders relative to total
orders during a quarter, our revenue may fluctuate significantly from one
quarter to the next. If a customer who placed a large order were to cancel or
reduce the magnitude of the order, or if we were unable to fulfill the order in
a timely fashion or were otherwise unable to recognize revenue for the order in
the quarter it was anticipated, it could result in increased volatility in our
revenue and stock price and may materially affect our business, prospects,
operating results and financial condition.

Our sales cycle is long, unpredictable and subject to seasonal fluctuations, so
it is difficult to forecast our revenue.

   Any delay in sales of our products or services could cause our quarterly
revenue and operating results to fluctuate. The typical sales cycle of our
products is long and unpredictable and requires both a significant capital
investment decision by our customers and our education of potential customers
regarding the use and benefits of our products. Our sales cycle is generally
between three and nine months. A successful sales cycle typically includes
presentations to both business and technical decision makers, as well as a
limited pilot program to establish technical fit. Our products are typically
purchased as part of a significant enhancement to a customer's information
technology system. The implementation of our products involves a significant
commitment of resources by prospective customers. Accordingly, a purchase
decision for a potential customer typically requires the approval of several
senior decision makers. Our sales cycle is affected by the business conditions
of each prospective customer. Due to the relative importance of many of our
individual product sales, a lost or delayed sale could adversely affect our
quarterly operating results. Our sales cycle is affected by seasonal
fluctuations as a result of our customers' fiscal year budgeting cycles and
slow summer purchasing patterns overseas. Also, we expect revenue to be higher
in the fourth quarter than in other quarters of the year.

Our business will suffer if we do not retain and expand our customer base.

   Our success depends on the continued growth of our customer base and the
retention of our customers. Our ability to attract new customers depends on a
variety of factors, including:

  .  the willingness of businesses to adopt enterprise information portal
     solutions;

  .  the reliability and cost-effectiveness of our products and services; and

  .  our ability to effectively market our products and services.

                                       7
To attract new customers we intend to significantly increase our sales and
marketing expenditures. However, our efforts might not result in more sales as
a result of the following factors:

  .  we may be unsuccessful in implementing our marketing strategies;

  .  we may be unsuccessful in hiring a sufficient number of qualified sales
     and marketing personnel; and

  .  any implemented strategies might not result in increased sales.

Software defects, service delays or security breaches could diminish demand for
our products or lead to product-related liabilities.

   Complex software products like ours frequently contain defects or errors
that may be detected only when the product is in use. Further, we often render
implementation, consulting and other technical services, the performance of
which typically involves working with sophisticated software, computing and
networking systems, and we could fail to meet project milestones in a timely
manner or to meet customer expectations as a result of any defects or errors.
Our products are designed to facilitate the secure transmission of sensitive
business information to specified parties outside the business over the
internet. As such, the reputation of our software products for providing good
security is vital to their acceptance by customers. Our products may be
vulnerable to break-ins, theft or other improper activity that could jeopardize
the security of information for which we are responsible. Problems caused by
product defects, failure to meet project milestones for services or security
breaches could result in loss of or delay in revenue, loss of market share,
failure to achieve market acceptance, diversion of development resources, harm
to our reputation, increased insurance costs or increased service and warranty
costs. To address these problems, we may need to expend significant capital and
resources that may not have been budgeted.

   Our license agreements with customers typically contain provisions designed
to limit our exposure to potential product liability claims. All domestic and
international jurisdictions may not enforce these limitations. Although we have
not experienced any product liability claims to date, we may encounter this
type of claim in the future. Product liability claims brought against us,
whether or not successful, could divert the attention of our management and key
personnel and could be expensive to defend.

We may be unable to maintain or grow our international operations.

   During 1996, 1997 and 1998, we derived 0%, 14% and 12% of our total revenue
from sales outside the United States. We intend to expand our international
operations and anticipate that in the foreseeable future a significant portion
of our revenue may be derived from sources outside the United States.

   We also expect to commit additional resources to customizing our products
for selected international markets and developing international sales and
support organizations. In addition, even if our international operations are
successfully expanded and our products are successfully customized, there can
be no assurance that we will be able to maintain or increase international
market demand for our products.

   Our international operations are subject to a number of risks, including:

  .  costs of customizing products for foreign countries;

  .  protectionist laws and business practices favoring local competition;

  .  dependence on the performance of local resellers and other strategic
     partners;

  .  adoption of general internet technologies in each international market;

  .  compliance with multiple, conflicting and changing governmental laws and
     regulations;

  .  longer sales and payment cycles;

  .  import and export restrictions and tariffs;

                                       8
.  difficulties in staffing and managing international operations;

  .  greater difficulty or delay in accounts receivable collection;

  .  foreign currency exchange rate fluctuations;

  .  multiple and conflicting tax laws and regulations; and

  .  political and economic instability.

Our growth is dependent upon the successful development of our direct sales
model.

   We sell our products primarily through our domestic direct sales
organization and we support our customers with our technical and customer
support staff in several field offices. Our ability to achieve revenue growth
in the future will depend on our ability to recruit and train sufficient
technical, customer and direct sales personnel, particularly additional sales
personnel focusing on the new vertical market segments that we target. We have
in the past and may in the future experience difficulty in recruiting qualified
sales, technical and support personnel. Our inability to rapidly and
effectively expand our direct sales force and our technical and support staff
could materially adversely affect our business, prospects, results of
operations and financial condition.

Year 2000 considerations among our customers and potential customers may reduce
our revenue.

   We may experience reduced revenue from sales of products and services as
customers and potential customers put a priority on correcting year 2000
problems and therefore defer purchases of our products and services until later
in 2000. Accordingly, demand for our products and services may be particularly
volatile and unpredictable for the remainder of 1999 and early 2000.

We rely on third-party software that may be difficult to replace.

   Some of the software we license from third parties would be difficult to
replace. This software may not continue to be available on commercially
reasonable terms, or at all. The loss or inability to maintain any of these
technology licenses could result in delays in the sale of our products and
services until equivalent technology, if available, is identified, licensed and
integrated, which could harm our business.

We will require additional capital in the future and may not be able to obtain
adequate financing on terms acceptable to us.

   The expansion and development of our business will require significant
capital to fund our operating losses, working capital needs and capital
expenditures. Our principal capital expenditures and lease payments include
those for desktop workstations for new employees, servers for engineering
product development, telephone equipment for all employees and facility tenant
improvements. Our working capital is primarily comprised of accounts
receivable, accounts payable and accrued expenses. The timing and amount of our
future capital requirements may vary significantly depending on numerous
factors, including regulatory, technological, competitive and other
developments in our industry. During the next twelve months, we expect to meet
our cash requirements with existing cash and cash equivalents and short-term
investments, the net proceeds from this offering, cash flow from sales of our
services and proceeds from existing and future working capital lines of credit
and other borrowings. Our failure to generate sufficient cash flows from sales
of services or to raise sufficient funds may require us to delay or abandon
some or all of our development and expansion plans or otherwise forego market
opportunities. Due to the uncertainty of these factors, our actual revenue and
costs may vary from expected amounts, possibly to a material degree, and these
variations are likely to affect our future capital requirements.

   Future equity or debt financing may not be available to us on favorable
terms or at all. In addition, our credit agreements contain certain covenants
restricting our ability to incur further indebtedness and we have

                                       9
pledged some of our assets as security for any borrowings thereunder. Future
borrowing instruments such as credit facilities and lease agreements are also
likely to contain similar or more restrictive covenants and will likely require
us to pledge assets as security for borrowings under those future arrangements.
Our inability to obtain additional capital on satisfactory terms may delay or
prevent the expansion of our business which could cause our business and
prospects to suffer.

Our plan to sell products as an internet-based application service provider may
fail.

   In addition to licensing our software applications, we plan to offer them as
an internet-based enterprise service provider. We would price solutions on a
per-transaction basis or on a subscription basis to companies seeking to
outsource their employee-facing business applications. This business model is
unproven and represents a significant departure from the strategies
traditionally employed by us and other enterprise software vendors. We have no
experience selling products or services as an application service provider, and
our efforts to develop this application service provider business may take
significant management time and attention which may adversely impact revenue.
In connection with our planned application service provider business model, we
will engage third-party service providers to perform many of the necessary
services as independent contractors, and we will be responsible for monitoring
their performance. We have limited experience outsourcing services or other
important business functions in the past, and independent contractors may not
perform those services adequately. If any service provider delivers inadequate
support or service to our customers, our reputation could be harmed. In
addition, we plan to use resellers to market enterprise service products. We
have no experience utilizing resellers and we may not be successful in this
effort.

   If customers determine that our products are not able to accommodate
significant increases in the number of users and amount of information, do not
provide adequate security for the dissemination of information over the
internet, or are otherwise inadequate for internet-based use, or if for any
other reason customers fail to accept our products for use on the internet or
on a per-transaction or subscription basis, our business will be harmed. As an
outsourced application service provider, we may regularly receive large amounts
of confidential information, including credit card and other financial and
accounting data through the internet or extranets, and there can be no
assurance that this information will not be subject to computer break-ins,
theft and other improper activity that could jeopardize the security of
information for which we are responsible. Even if our strategy of offering
products to customers over the internet is successful, some of those internet
customers may be ones that otherwise might have bought our software and
services through our traditional licensing arrangements. Any shift in potential
license revenues to the application service provider model, which is unproven
and potentially less profitable, could harm our business.

Our failure to manage growth could adversely affect us.

   The planned expansion of our operations will place a significant strain on
our management, financial controls, operations systems, personnel and other
resources. Our ability to manage our future growth, should it occur, will
depend in large part upon a number of factors including our ability to:

  .  control costs;

  .  maintain effective quality controls;

  .  significantly expand our internal management and financial control
     systems; and

  .  attract, assimilate and retain qualified personnel.

   We hired our Chief Financial Officer, Raja H. Venkatesh, in June 1999. We do
not currently have a corporate controller. While we have commenced a search for
a controller and additional financial and accounting personnel, these people
will need time to familiarize themselves with Viador and our accounting and
sales practices. In addition, we anticipate switching from our current
accounting software to a more sophisticated accounting and financial
information software system in the near future. If we are unable to

                                       10
successfully hire and integrate additional financial and accounting personnel
or successfully transition to new accounting software, our business and
prospects will suffer.

   We also plan to hire additional personnel to establish and implement
corporate security processes and policies in light of our planned expansion of
our operations. If we are unable to implement these measures in advance of our
planned future growth, our business and prospects could suffer.

   We expect that our customers increasingly will demand additional information
and reports with respect to the services we provide. To do so, we must develop
and implement an automated customer service system to handle these demands and
enable future sales growth. In addition, if we are successful in implementing
our marketing strategy, we also expect the demands on our technical support
resources to grow rapidly, and we may experience difficulties responding to
customer demand for our services and providing technical support in accordance
with our customers' expectations. We expect that these demands will require not
only the addition of new management personnel, but also the development of
additional expertise by existing management personnel and the establishment of
long-term relationships with third-party service vendors. We may not be able to
keep pace with any growth, successfully implement and maintain our operational
and financial systems or successfully obtain, integrate and utilize the
employees, facilities, third-party vendors and equipment, or management,
operational and financial resources necessary to manage a developing and
expanding business in our evolving and increasingly competitive industry. If we
are unable to address these customer demands in connection with our growth, our
business and prospects will suffer.

We may not be able to recruit and retain the personnel we need to succeed.

   We have recently hired a number of key employees and officers, including our
Chief Financial Officer, who has been with us for less than two months. The
integration of new personnel has resulted and will continue to result in some
disruption to our ongoing operations. Our failure to complete this integration
in an efficient manner could harm our business and prospects.

   We are highly dependent on certain members of our management and engineering
staff, including, without limitation, our Chief Executive Officer, our Senior
Vice President of North American Operations and our Chief Financial Officer.
The loss of one or more of these officers might impede the achievement of our
business objectives. Furthermore, recruiting and retaining qualified financial
and technical personnel is critical to our success. If our business grows, we
will also need to recruit a significant number of management, technical and
other personnel for our business. Competition for employees in our industry is
intense. We may not be able to continue to attract and retain skilled and
experienced personnel on acceptable terms.

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

   We believe that proprietary rights are important to our business. We
principally rely upon a combination of patent, copyright, trademark and trade
secret laws as well as contractual restrictions to protect our proprietary
technology.

   Patents. We have been awarded U.S. patents on two inventions. However, none
of our technology is patented abroad, nor do we have any international patent
applications pending. Moreover, it is possible that:

  .  any patents issued to us could be successfully challenged by third
     parties, which could result in our loss of the right to prevent others
     from exploiting the inventions claimed in those patents;

  .  current or future competitors may develop similar technology, duplicate
     our products or design around any patents that may be issued to us;

  .  effective patent protection may not be available in every country in
     which we do business; and

  .  any patents issued to us may not provide significant proprietary
     protection or commercial advantage to us.

                                       11
Trademarks, copyrights and trade secrets. We also rely upon a combination of
copyright, trademark and trade secret laws, and contractual restrictions to
protect our proprietary technology. In addition to those protections, we also
rely upon know-how, continuing technological innovations and licensing
opportunities to develop and maintain our competitive position. There can be no
assurance that others will not independently develop substantially equivalent
proprietary information or otherwise gain access to or disclose our proprietary
information. It is our policy to require our employees, certain contractors,
consultants, directors, customers, prospective customers and corporate partners
to execute non-disclosure agreements upon the commencement of those sort of
relationships with us. These agreements may be breached, and they may not
provide meaningful protection of our trade secrets or adequate remedies in the
event of unauthorized use or disclosure of that information, and our trade
secrets may become known or be independently discovered by our competitors.

   Our commercial success will also depend in part on our not infringing the
proprietary rights of others and not breaching technology licenses that cover
technology used in our products. It is uncertain whether any third party
proprietary rights will require us to develop alternative technology or to
alter our products or processes, obtain licenses or cease certain activities.
If any licenses of that type are required, we may not be able to obtain those
licenses on commercially favorable terms, if at all. Our failure to obtain a
license to any technology that we may require to commercialize our products and
services could cause our business and prospects to suffer. Litigation, which
could result in substantial cost to us, may also be necessary to enforce any
patents issued or licensed to us or to determine the scope and validity of
third party proprietary rights.

Potential year 2000 problems with our products or internal systems may involve
significant time and expense.

   Many currently installed computer systems and software products store dates
using only the last two digits of the calendar year. As a result, those systems
may not be able to distinguish whether "00" means 1900 or 2000, which may cause
those systems to fail or produce erroneous results. Year 2000 problems could
subject us to liability claims or disrupt our business, either of which could
harm our business.

   Based upon our assessment to date, we believe that our software products are
capable of adequately distinguishing 21st century dates from 20th century
dates. However, our products operate in complex network environments and
directly or indirectly interact with a number or other hardware and software
systems that we cannot adequately evaluate for year 2000 compliance. We may
face claims based upon year 2000 problems in other companies' products, or
issues arising from the integration of multiple products into an overall
system. Although we have not been a party to any litigation or arbitration
proceeding involving our products or services related to year 2000 compliance
issues, we may in the future be required to defend our products or services in
those proceedings, or to negotiate resolutions of claims based upon year 2000
issues. Defending and resolving year 2000 disputes, regardless of the merits of
those disputes, and any liability we have for year 2000-related damages,
including consequential damages, could be expensive to us.

   We also need to ensure the year 2000 compliance of our internal computer and
other systems, to continue testing our software products, to audit the year
2000 compliance status of our suppliers and business partners, and to conduct a
legal audit. We have not completed our year 2000 compliance investigation and
overall compliance initiative, nor have we developed a contingency plan for
handling year 2000 problems that are not detected and corrected prior to their
occurrence. Moreover, we have a limited number of personnel who are technically
experienced with our year 2000 compliance procedures and, in the event our
systems were to fail as a result of year 2000 problems, these employees would
likely be unable to timely comply with several customers' requests for year
2000 remediation. Any such delay could impair our business or prospects or
relationships with those customers. The total cost of year 2000 compliance and
remediation may be material and may harm our business.

                                       12
If important strategic relationships are discontinued for any reason, there may
be a material adverse effect on our business, results of operations and
financial condition.

   Although our strategic relationships are a key factor in our overall
business strategy, our strategic partners may not view their relationship with
us as significant to their own business. There is a risk that parties with whom
we have strategic alliance agreements may not perform their obligations as
agreed. Our arrangements with strategic partners generally do not establish
minimum performance requirements but instead rely on the voluntary efforts of
our partners. In addition, most of our agreements with strategic partners may
be terminated by either party with little notice. If important strategic
relationships are discontinued for any reason, our business, prospects, results
of operations and financial condition may be adversely affected.

                         Risks Related to Our Industry

We may not be able to successfully compete against our current and future
competitors, which could adversely affect our business.

   The existing enterprise information portal software market is intensely
competitive. There are few substantial barriers to entry and we expect that
this market will face additional competition from existing competitors in the
future. Moreover, if our approach is successful, it is likely that additional
competitors will enter the market. Some of these additional competitors may
have significantly more resources than we have, and could devote the resources
necessary to independently develop technology which provides equivalent or
superior functionality compared to our products. For example, we also compete
against larger companies providing a suite of products targeting business
internet applications, including Microsoft and Oracle, who we expect may
provide products as part of their suite that compete with ours. To date, we
have faced competition and sales resistance from potential customers that have
developed or may develop in-house systems that may substitute for those we
offer. We expect that in-house systems will continue to be a principal source
of competition for the foreseeable future. In particular, we have had
difficulties making sales to organizations whose internal development groups
have already progressed significantly toward completion of systems that our
products might replace, or where the underlying technologies used by those
groups differ fundamentally from ours. In addition, we compete against
providers of decision support software, data warehousing software and
enterprise resource planning software. We also compete with portal software
companies in the area of document management. Companies in each of these areas
may expand their technologies or acquire companies to support greater
functionality and capability, particularly in the areas of query response time
and ability to support large numbers of users.

   We seek to provide products that are complementary to the services offered
by systems integrators and professional service organizations, such as CSC and
IBM Global Services, and to work together with these firms to provide
integration solutions. However, we cannot assure you that those firms will
utilize our products in their integration efforts, and unless and until they do
so, they will continue to offer competitive solutions to customers' integration
needs. We also seek to work closely with enterprise application vendors so that
we can provide integration among products offered by different vendors. Many of
these vendors, however, have other initiatives under way to facilitate these
integrations independently. We can not assure the extent to which enterprise
application vendors will adopt or continue to support our integration approach.
Increased competition is likely to result in price reductions, decreased sales
levels, reduced gross margins and loss of market share, any of which could
materially adversely affect our business, prospects, operating results and
financial condition. We can not assure you that we will be able to successfully
compete against current and future competitors, or that competitive pressures
we face will not materially adversely affect our business, prospects, operating
results and financial condition. See "Business--Competition."

We depend upon the growth of the emerging market for enterprise information
portal software.

   We expect much of our revenue growth, if any, in the foreseeable future will
be derived from sales of enterprise information portal software products and
services. The market for enterprise information portal

                                       13
software is relatively new and emerging. Our future financial performance will
largely depend on continued growth in the number of organizations demanding
software and services for enterprise information and outside vendors to
develop, manage and maintain the networking software used for those
organizations' critical applications. Many potential customers for third-party
enterprise portal software have made significant investments in internally
developed integration systems, and are highly dependent upon the continued use
of those internally developed systems. Organizations' dependence on internally
developed systems coupled with the significant costs required to shift to
third-party products may substantially inhibit future demand for third-party
enterprise portal software products, such as those we offer. We can not assure
you that the market for enterprise portal software products and services will
continue to grow. If the enterprise portal market fails to grow or grows more
slowly than we currently anticipate, our business, operating results and
financial condition would be materially adversely affected.

   We intend to continue to expend considerable resources educating potential
customers about enterprise portal software. Even if a sizable market for third-
party enterprise portal software continues to develop, there can be no
assurance that those expenditures or any other marketing efforts will enable
our products to achieve or sustain any significant degree of market acceptance.
If we are unable to establish broad market acceptance for our current and
future products, our future growth, financial condition and results of
operations will be materially adversely affected. The timing and degree of our
success largely depends on the timely adoption of our products by users in the
commercial market.

Our market changes rapidly due to changing technology and evolving industry
standards, and our future success will depend on our ability to effectively
respond to these changes.

   The market for our services is characterized by rapidly changing technology,
evolving industry standards, frequent new service and product introductions and
changes in customer demands. Our future success will depend to a substantial
degree on our ability to offer products and services that incorporate leading
technology, and respond to technological advances and emerging industry
standards and practices on a timely and cost-effective basis. You should be
aware that:

  .  our technology or systems may become obsolete upon the introduction of
     alternative technologies;

  .  the technological life cycles of our products are difficult to estimate,
     and may vary across vertical market segments;

  .  we may not have sufficient resources to develop or acquire new
     technologies or to introduce new services capable of competing with
     future technologies or service offerings; and

  .  the price of the services provided by us is expected to decline as
     rapidly as the cost of any competitive alternatives.

   We may not be able to effectively respond to the technological requirements
of the changing market. To the extent we determine that new technologies and
equipment are required to remain competitive, the development, acquisition and
implementation of those technologies and equipment are likely to continue to
require significant capital investment by us. Sufficient capital may not be
available for this purpose in the future, and even if it is available,
investments in new technologies may not result in commercially viable
technological processes and there may not be commercial applications for those
technologies. However, if we do not develop and introduce new products and
services and achieve market acceptance in a timely manner, our business,
financial condition and results of operations may be materially adversely
affected.

Our future success will depend on our ability to meet the sophisticated needs
of our customers, including the need to support several platforms.

   We currently serve, and intend to continue to serve, a customer base with a
wide variety of hardware, software, database and networking platforms. To gain
broad market acceptance, we believe that we must support an increased number of
platforms in the future. We currently develop our products on Microsoft

                                       14
Windows NT. Therefore, we experience a delay when we adapt our products to be
installed on other major platforms. For example, we are contractually obligated
to provide a version of our software that operates on the Unix platform in the
third fiscal quarter of 1999. A delay in this or any other rollout of our
product onto a new platform could adversely affect our revenues and operating
results. There can be no assurance that we will adequately expand our database
and platform coverage to service potential customers, or that the expansion
will be sufficiently rapid to meet or exceed the platform and database coverage
of our competitors.

   The success of our products will depend on various factors, including the
ability to integrate our products with customer platforms as compared to
competitive offerings, the portability of our products, particularly the number
of hardware platforms, operating systems and databases that our products can
source or target, the integration of additional software modules under
development with existing products, and our management of software development
being performed by third-party developers. We can not assure you that we will
successfully develop and market product enhancements or new products that
respond to these technological changes, shifting customer tastes, or evolving
industry standards, or that we will not experience difficulties that could
delay or prevent the successful development, introduction and marketing of
these products. If we are unable to develop and introduce new products or
enhancements of existing products in a timely manner or if we experience delays
in the commencement of commercial shipments of new products and enhancements,
our business, operating results and financial condition would be materially
adversely affected.

                         Risks Related to Our Offering

Our stock will likely be subject to substantial price and volume fluctuations
due to a number of factors, some of which are beyond our control.

   Stock prices and trading volumes for many internet related companies
fluctuate widely for a number of reasons, including some reasons which may be
unrelated to their businesses or results of operations. This market volatility,
as well as general domestic or international economic, market and political
conditions, could materially adversely affect the price of our common stock
without regard to our operating performance. In addition, our operating results
may be below the expectations of public market analysts and investors. If this
were to occur, the market price of our common stock would likely decrease
significantly.

After this offering, our officers, directors, and their affiliates, in the
aggregate, will control    % of our voting stock.

   Some of our stockholders own a large enough stake in us to have an influence
on the matters presented to stockholders. As a result, these stockholders may
be able to control all matters requiring stockholder approval, including the
election and removal of directors, the approval of significant corporate
transactions, such as any merger, consolidation or sale of all or substantially
all of our assets, and the control of our management and affairs. Accordingly,
that concentration of ownership may delay, defer or prevent a change in control
of Viador, impede a merger, consolidation, takeover or other business
combination involving Viador or discourage a potential acquirer from making a
tender offer or otherwise attempting to obtain control of Viador, any of which
could have a material adverse effect on the market price of our common stock.

The sale of shares eligible for future sale in the open market could depress
our stock price.

   Sales of substantial amounts of our common stock, including shares issued
upon the exercise of outstanding options and warrants, in the public market
after this offering could adversely affect the market price of our common
stock. Those sales also might make it more difficult for us to sell equity-
related securities in the future at a time and price that we deem appropriate.
In addition to the          shares of common stock offered hereby, assuming no
exercise of the underwriters' over-allotment option, as of June 30, 1999, there
were 4,915,433 shares of common stock outstanding, all of which are restricted
shares under the Securities Act of 1933, as amended. These restricted shares
will not be immediately eligible for sale in the public market.

                                       15
However, following the expiration of the 180-day lock-up agreements with the
representatives of the underwriters,           restricted shares will be
available for sale in the public market and the remaining restricted shares
will be eligible for sale from time to time thereafter upon expiration of
applicable holding periods under Rule 144, 144(k) or 701 promulgated under the
Securities Act of 1933, as amended. In addition, as of June 30, 1999, there
were options and warrants outstanding to purchase 3,287,155 shares of common
stock, all of which warrants are expected to be exercised on or before the
closing of this offering. However, the shares of common stock underlying such
options and warrants will not be immediately eligible for sale in the public
market since they are subject to a 180-day lock-up period. Bear, Stearns & Co.
Inc. may, in its sole discretion and at any time without notice, release all or
any portion of the securities subject to lock-up agreements. In addition, the
holders of 16,326,863 restricted shares and warrants to purchase 9,615 shares
of our Series C Preferred Stock are entitled to certain rights with respect to
registration of those shares for sale in the public market. If those holders
sell in the public market, those sales could have a material adverse effect on
the market price of our common stock.

Our management will have broad discretion in allocating proceeds from this
offering.

   Our net proceeds from this offering, after deducting underwriting
commissions and expenses payable by us, are estimated to be approximately
$      million. The primary purposes of this offering are to fund capital
expenditures, working capital and operating losses expected to be incurred in
connection with the execution of our business plan, including the expansion of
our operations. A portion of the net proceeds may also be used to repay
currently outstanding or future indebtedness, or to acquire or invest in
complementary businesses or products. Accordingly, our management will retain
broad discretion as to the allocation of most of the proceeds of this offering.
The failure of management to apply these funds effectively could have a
material adverse effect on our business, results of operations and financial
condition.

There is no current market for our common stock.

   Prior to this offering, there has been no public market for our common
stock. An active public market may not develop or be sustained after this
offering and investors may not be able to sell our common stock should they
desire to do so. The initial public offering price will be determined by
negotiations between us and the representatives of the underwriters and may
bear no relationship to the price at which the common stock will trade upon
completion of this offering. See "Underwriting" for a discussion of the factors
to be considered in determining the initial public offering price.

We have certain anti-takeover defenses that could delay or prevent an
acquisition of our business.

   Certain provisions of our certificate of incorporation and bylaws and the
provisions of Delaware law could have the effect of delaying, deferring or
preventing an acquisition of our business. For example, our board of directors
is divided into three classes to serve staggered three-year terms, we may
authorize the issuance of up to 10,000,000 shares of "blank check" preferred
stock, our stockholders may not take actions by written consent and our
stockholders are limited in their ability to make proposals at stockholder
meetings. See "Description of Capital Stock" for a further discussion of these
provisions.

You will incur immediate and substantial dilution.

   We expect the initial public offering price to be substantially higher than
the net tangible book value per share of common stock. Therefore, you will
incur immediate dilution in net tangible book value of $       per share,
assuming an initial public offering price of $         per share. You may incur
additional dilution if holders of stock options, whether currently outstanding
or subsequently granted, exercise their options or if warrantholders exercise
their warrants to purchase common stock. See "Dilution" on page     .

                                       16
Relying on forward-looking statements in this prospectus could cause you to
incorrectly assess the risks and uncertainties of investing in our stock
because our actual results may differ materially from what was anticipated in
those statements.

   Some of the matters discussed under the captions "Prospectus Summary," "Risk
Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business" and elsewhere in this prospectus include
forward-looking statements. We have based these forward-looking statements on
our current expectations and projections about future events, including, among
other things,

  .  implementing our business strategy;

  .  obtaining and expanding market acceptance of the products and services
     we offer;

  .  forecasts of the internet and our market size and growth;

  .  meeting our requirements under key contracts; and

  .  competition in our market.

   In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," "estimates" and similar
expressions. These statements are based on our current beliefs, expectations
and assumptions and are subject to a number of risks and uncertainties. Actual
results and events may vary significantly from those discussed in the forward-
looking statements. A description of certain risks that could cause our results
to vary appears under the caption "Risk Factors" and elsewhere in this
prospectus. These forward-looking statements are made as of the date of this
prospectus, and we assume no obligation to update them or to explain the
reasons why actual results may differ. In light of these assumptions, risks and
uncertainties, the forward-looking events discussed in this prospectus might
not occur.

                                       17
USE OF PROCEEDS

   The net proceeds from this offering, at an assumed initial public offering
price of $      per share, are estimated to be $        million, after
deducting estimated underwriting discounts and commissions and expenses payable
by us. We expect to use the net proceeds from this offering to fund operating
losses and our working capital needs. Our management will retain broad
discretion in the allocation of such net proceeds. Although we may use a
portion of the net proceeds to pursue possible acquisitions of, or enter into
joint ventures with respect to, complementary businesses, technologies or
products in the future, there are no present understandings, commitments or
agreements with respect to any such acquisitions or joint ventures. Pending the
use of such net proceeds, we intend to invest these funds in short-term,
investment grade securities.

                                DIVIDEND POLICY

   We have not declared or paid any dividends since our inception and do not
intend to pay cash dividends on our capital stock in the foreseeable future. We
anticipate that we will retain all future earnings, if any, for use in our
operations and the expansion of our business. Certain of our credit agreements
restrict our ability to declare or pay any dividends while the credit agreement
is in effect. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources."

                                       18
CAPITALIZATION

   The following table sets forth, as of June 30, 1999:

  .  Our actual capitalization;

  .  Our pro forma capitalization, assuming the exercise of a warrant to
     purchase 9,165 shares of Series C preferred stock, the conversion of
     outstanding shares of our convertible preferred stock into common stock
     and the exercise of warrants to purchase 80,835 shares of our common
     stock; and

  .  Our pro forma capitalization, as adjusted to give effect to the sale of
             shares of common stock offered by us in this offering at an
     assumed initial public offering price of $      per share, after
     deducting the underwriting discounts and commissions and estimated
     offering expenses payable by us, and the application of the estimated
     net proceeds from this offering.

   This information should be read in conjunction with our financial statements
and the notes related thereto appearing elsewhere in this prospectus. See "Use
of Proceeds."
June 30, 1999
                                               ---------------------------------
                                                         (unaudited)
                                                Actual    Pro Forma  As Adjusted
                                               --------  ----------- -----------
                                               (in thousands except share data)
Long-term obligations, less current portion..  $     --     $ --        $ --
Stockholders' equity:
  Convertible preferred stock, $0.001 par
   value, 25,000,000 shares authorized,
   16,326,863 shares issued and outstanding,
   actual;     shares authorized, no shares
   issued and outstanding, pro forma and as
   adjusted..................................        16       --          --
  Common stock $0.001 par value, 20,833,333
   shares authorized, 4,915,433 shares issued
   and outstanding, actual;     shares
   authorized,     shares issued and
   outstanding, pro forma, issued and
   outstanding, as adjusted..................        12       --          --
  Additional paid-in capital.................    30,257       --          --
  Deferred stock-based compensation..........    (2,029)      --          --
  Treasury stock.............................       (34)      --          --
  Accumulated deficit........................   (14,938)      --
                                               --------     ----        ----
    Total stockholders' equity...............    13,284       --          --
                                               --------     ----        ----
      Total capitalization...................  $ 13,284     $           $
                                               ========     ====        ====
The table excludes the following shares: 3,287,155 shares of common stock
issuable upon exercise of options outstanding at a weighted average exercise
price of $0.74 per share and 12,292,000 shares reserved for future issuance
under our Amended and Restated 1997 Stock Option/Stock Issuance Plan and 1999
Stock Incentive Plan. See "Management--Executive Compensation and Other
Information--Employee Benefit Plans" and Note 4 of the Notes to Consolidated
Financial Statements.

                                       19
DILUTION

   Our pro forma net tangible book value as of June 30, 1999 was approximately
$13.4 million, or $     per share of common stock. Pro forma net tangible book
value per share is calculated by subtracting our total liabilities from our
total tangible assets, which equals total assets less intangible assets, and
dividing this amount by the number of shares of common stock outstanding as of
June 30, 1999. Assuming the sale by us of         shares of common stock
offered in this offering at an assumed initial public offering price of $
per share and the application of the estimated net proceeds from this offering,
our net tangible book value as of June 30, 1999 would be $        million, or $
        per share of common stock. Assuming completion of this offering, there
will be an immediate increase in the net tangible book value of $         per
share to our existing stockholders and an immediate dilution in the net
tangible book value of $      per share to new investors. The following table
illustrates this per share dilution:
Assumed initial public offering price per share...................       $
  Pro forma net tangible book value per share as of June 30,
   1999........................................................... $
  Pro forma increase attributable to new investors................ $
                                                                   -----
Pro forma net tangible book value per share after the offering....       $
                                                                         ------
Pro forma dilution per share to new investors.....................       $
                                                                         ======
The following table summarizes the total number of shares of common stock
purchased from us, the total consideration paid to us and the average price per
share paid by existing stockholders and by new investors, in each case based
upon the number of shares of common stock outstanding as of June 30, 1999.
Shares Purchased  Total Consideration
                            ------------------ ------------------- Average Price
                              Number   Percent   Amount    Percent   Per Share
                            ---------- ------- ----------- ------- -------------
Existing stockholders...... 11,803,134      %  $                %     $
New investors..............                 %  $                %     $
                            ----------   ---   -----------   ---
  Total....................                 %  $                %
                            ==========   ===   ===========   ===
If the underwriters' over-allotment is exercised in full, the number of
shares of common stock held by existing stockholders will be reduced to
       , or         % of the total number of shares of common stock to be
outstanding after this offering, and will increase the number of shares of
common stock held by the new investors to        , or         % of the total
number of shares of common stock to be outstanding immediately after this
offering. See "Principal Stockholders."

   The tables and calculations above assume no exercise of outstanding options.
At June 30, 1999, there were 3,287,155 shares of common stock issuable upon
exercise of options outstanding with a weighted average exercise price of $0.74
per share and 12,292,000 shares reserved for future issuance under our Amended
and Restated 1997 Stock Option/Stock Issuance Plan and our 1999 Stock Incentive
Plan. To the extent that these options are exercised, there will be further
dilution to new investors. See "Management--Executive Compensation and Other
Information--Employee Benefit Plans."

                                       20
SELECTED FINANCIAL DATA

   The tables that follow present portions of our financial statements and are
not complete. You should read the following selected financial data in
conjunction with our financial statements and related notes thereto and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this prospectus. The statements of operations
data for the years ended December 31, 1996, 1997 and 1998, and the balance
sheet data as of December 31, 1997 and 1998, are derived from our financial
statements that have been audited by KPMG LLP, independent auditors, which are
included elsewhere in this prospectus. The statements of operations data for
the year ended December 31, 1995 and the balance sheet data as of December 31,
1995 and 1996 are derived from audited financial statements that are not
included in this prospectus. The statements of operations data for the six
months ended June 30, 1998 and 1999 and the balance sheet date as of June 30,
1999 are derived from our unaudited financial statements included elsewhere in
this prospectus and include, in the opinion of management, all adjustments,
consisting only of normal recurring adjustments, that we consider necessary for
the fair presentation of our financial position and results of operations for
those periods. The historical results presented below are not necessarily
indicative of the results to be expected for any future fiscal year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
Six Months
                               Years Ended December 31,      Ended June 30,
                             ------------------------------  ----------------
                             1995   1996    1997     1998     1998     1999
                             ----- ------  -------  -------  -------  -------
                                                               (unaudited)
                                 (in thousands except per share data)
Statement of Operations
 Data:
Revenue..................... $  80 $  997  $ 1,582  $ 3,825  $ 1,754  $ 3,290
Cost of revenue.............    10    314      903    1,387      640      874
                             ----- ------  -------  -------  -------  -------
Gross profit................    70    683      679    2,438    1,114    2,416
                             ----- ------  -------  -------  -------  -------
Operating expenses:
  Research and development..    15    364    1,351    2,481    1,107    1,871
  Sales and marketing.......    11    125    1,802    4,295    1,806    4,397
  General and
   administrative...........     8    358      936    1,365      374      859
  Amortization of stock-
   based compensation.......   --      --       --      445       94      667
                             ----- ------  -------  -------  -------  -------
Total operating expenses....    34    847    4,089    8,586    3,381    7,793
                             ----- ------  -------  -------  -------  -------
Loss from operations........    36   (164)  (3,410)  (6,148)  (2,267)  (5,377)
Interest income (expense),
 net........................    --     10       62      (63)      (2)     116
                             ----- ------  -------  -------  -------  -------
Net income (loss)........... $  36 $ (154) $(3,348) $(6,211) $(2,269) $(5,261)
                             ===== ======  =======  =======  =======  =======
Pro forma basic and diluted
 net (loss) per share (1)... $0.02 $(0.08) $ (1.34) $ (1.82) $ (0.71) $ (1.28)
                             ===== ======  =======  =======  =======  =======
Shares used in computing
 basic and diluted net loss
 per share (1).............. 1,563  1,993    2,495    3,416    3,177    4,126
December 31,
                                          -------------------------  June 30,
                                          1995 1996   1997    1998     1999
                                          ---- ----  ------  ------ -----------
                                                                    (unaudited)
                                                     (in thousands)
Balance Sheet Data:
Cash and cash equivalents...............  $ 42 $290  $1,029  $4,181   $14,259
Working capital.........................    78   (5)   (317)  2,771    12,169
Total assets............................   123  530   2,918   7,185    18,869
Long-term obligations, including current
 portion................................     0  100       0      20         0
Total stockholders' equity (deficit)....    86  (67)     90   3,371    13,284
----------
(1) See Note 2 of Notes to Financial Statements for the determination of shares
    used in computing pro forma basic and diluted net loss per share.

                                       21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   The following discussion of the financial condition and results of
operations of Viador should be read in conjunction with the financial
statements and the related notes thereto included elsewhere in this prospectus.
This discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including but not limited to those discussed in "Risk Factors," "Business" and
elsewhere in this prospectus.

Overview

   We are one of the first providers of internet software that enables
businesses to create enterprise information portals. An enterprise information
portal is a single point of access to an organization's electronic information
similar to popular consumer internet portals that provide access to the world
wide web. We believe the Viador E-Portal Suite offers a comprehensive and
integrated enterprise information portal that gives users a single browser-
based interface with which to quickly and easily access up-to-the-minute
information from a variety of enterprise data sources. Our software is
specifically designed for the web and works with a customer's existing hardware
and software systems, without the need for additional technology expenditures.
It provides a highly adaptable platform for the management and sharing of
information on a secure and cost-effective basis that can accommodate
significant increases in the number of users and amount of information. As more
users contribute increasing amounts of information to the portal, we believe
our customers and their users are able to realize greater productivity and
efficiency in their businesses. Since January 1, 1998 over 30 of our customers
have purchased over $50,000 of our products and services, including Charles
Schwab, CIBC, Citibank, IBM, Mitsui, Sprint and Xerox.

   Historically, we have focused our selling efforts in North America and
derived a significant majority of our revenues from North America. However, we
believe that our international sales will increase. We currently have
distribution agreements with partners in Japan and Europe, and we have
delivered our products to customers in Latin America.

   We were incorporated in 1995 as Infospace, Inc., changed our name to Viador,
Inc. in January 1999 and subsequently changed our name to Viador Inc. in May
1999. Since our inception, we have developed web-based products designed to
permit our customers to search, analyze and deliver relevant information to
users within and outside the enterprise. We delivered our first product, Web-
Charts, in September 1996. During the next two years, we introduced more
sophisticated web products and a proprietary web security server product. In
the first quarter of 1999, we first shipped a fully integrated web-based
product suite called the Viador E-Portal Suite, which integrated our prior
product offerings and is now our primary licensed product. Since 1997, revenue
from licenses of our software products has accounted for a majority of revenue
and we expect this trend to continue in the future.

   We derive our revenue from the sale of software product licenses and from
professional consulting, maintenance and support services. In December 1997, we
adopted Statement of Position 97-2 (SOP 97-2), Software Revenue Recognition.
SOP 97-2 generally requires revenue earned on software arrangements involving
multiple elements to be allocated to each element based on its relative fair
value. We recognize product license revenue when persuasive evidence of an
agreement exists, the product has been delivered, the license fee is fixed or
determinable and collection of the fee is probable. Services revenue consists
of fees from professional services and from maintenance and support.
Professional services include integration of software, application development,
training and software installation. We bill professional services fees either
on a time and materials basis or on a fixed-price schedule. We recognize
professional services fees billed on a time and materials basis as the services
are performed. We recognize professional services fees on fixed-price service
arrangements upon the completion of specific contractual milestone events, or
based on an estimated percentage of completion as work progresses. Our clients
typically purchase maintenance agreements annually, and we

                                       22
price maintenance agreements based on a percentage of the product license fee.
We price telephone support based on differing contracted levels of support.
Customers purchasing maintenance agreements receive future product upgrades and
electronic, web-based technical support and basic ten hours per day, five days
per week telephone support. Customers can also purchase extended telephone
support, available 24 hours per day, seven days per week, for an additional
fee. We recognize revenue from maintenance and support agreements ratably over
the term of the agreement, typically one year. We record cash receipts from
customers and billed amounts due from customers in excess of revenue recognized
as deferred revenue. The timing and amount of revenue recognized from
individual contracts, some of which may represent over 10% of revenue
recognized during a particular quarter, can vary significantly and can
therefore result in significant fluctuations in revenue from one quarter to the
next. Furthermore, the timing and amount of cash receipts from customers can
vary significantly depending on specific contract terms and can therefore have
a significant impact on the amount of deferred revenue in any given period.

   Our cost of revenue includes salaries and related expenses for our customer
support, implementation and training services organizations and costs of
contracting with third parties to provide consulting services to customers. Our
cost of revenue also includes royalties due to third parties for integrated
technology, the cost of manuals and product documentation, production media
used to deliver our products and shipping costs, including the costs associated
with the electronic transmission of software to new customers and an allocation
of our facilities, communications and depreciation expenses. Cost of license
revenue has not been significant to date.

   Our operating expenses are classified into four general categories: sales
and marketing, research and development, general and administrative and
amortization of deferred stock-based compensation. We classify all charges to
these operating expense categories based on the nature of the expenditures.
Although each category includes expenses that are category specific, each
category includes expenses that are common to the other two, such as salaries,
employee benefits, incentive compensation, bonuses, travel and entertainment
costs, telephone expenses, communication expenses, rent and facilities costs,
and third-party professional services fees. The sales and marketing category of
operating expenses includes expenditures specific to the marketing group, such
as sales commissions, public relations and advertising, trade shows, marketing
collateral materials and web seminars. We allocate the total costs for overhead
and facilities to each of the functional areas that use the overhead and
facilities services based on their estimated usage as measured primarily by
headcount. These allocated charges include facility rent for the corporate
office, communication charges and depreciation expense for office furniture and
equipment.

   Since our inception, we have incurred substantial costs to develop our
technology and products, to recruit and train personnel for our engineering,
sales and marketing and professional services departments and to establish an
administrative organization. As a result, we have incurred net losses in each
fiscal quarter since inception and, as of June 30, 1999, had an accumulated
deficit of $14.8 million. We anticipate that our operating expenses will
increase substantially in future quarters as we increase sales and marketing
operations, develop new distribution channels, fund greater levels of research
and development, broaden professional services and support, and improve
operational and financial systems. Accordingly, we expect to incur additional
losses for the foreseeable future. In addition, our limited operating history
makes it difficult for us to predict future operating results and, accordingly,
we cannot assure you that we will achieve or sustain revenue growth or
profitability.

   We had 108 full-time employees at June 30, 1999, up from 83, 61 and 17 at
December 31, 1998, 1997 and 1996, respectively. This rapid growth places a
significant demand on our management and operational resources. In order to
manage growth effectively, we must implement and improve our operational
systems, procedures and controls on a timely basis. In addition, we expect that
future expansion will continue to challenge our ability to hire, train,
motivate, and manage our employees.

   In May 1997, we raised $3.5 million in private equity investment from a
group of investors led by Mitsui Ltd. who, at the same time, purchased from us
exclusive distribution rights for our products in Japan. In August 1998, we
raised an additional $8.5 million in private equity investment from a group of
investors led by

                                       23
Information Technology Ventures. In May 1999, we raised an additional $14.5
million in private equity investment from a group of investors led by CDB
Venture Management (USA) and Crosslink Technology Partners.

Results of Operations

   The following table sets forth certain statement of operations data as a
percentage of total revenue for the periods indicated:
Six
                                                                Months Ended
                                  Years Ended December 31,        June 30,
                                  ----------------------------  --------------
                                  1995   1996    1997    1998    1998    1999
                                  -----  -----  ------  ------  ------  ------
Revenue:
  License........................    --%   5.6%   53.0%   59.7%   65.1%   64.8%
  Service........................ 100.0   94.4    47.0    40.3    34.9    35.2
                                  -----  -----  ------  ------  ------  ------
    Total revenue................ 100.0  100.0   100.0   100.0   100.0   100.0
                                  -----  -----  ------  ------  ------  ------
Cost of revenue..................  12.5   31.5    57.1    36.3    36.5    26.6
Gross profit.....................  87.5   68.5    42.9    63.7    63.5    73.4
                                  -----  -----  ------  ------  ------  ------
Operating expenses
  Research and development.......  18.8   36.5    85.4    64.9    63.1    56.9
  Sales and marketing............  13.8   12.6   113.9   112.3   103.0   133.6
  General and administrative.....  10.0   35.9    59.2    35.7    21.3    30.2
  Amortization of stock-based
   compensation..................    --     --      --      --     5.4    16.1
                                  -----  -----  ------  ------  ------  ------
    Total operating expenses.....  42.6   85.0   258.5   224.5   192.8   236.8
Operating loss...................  44.9  (16.5) (215.6) (160.8) (129.3) (159.3)
    Interest income (expense),
     net.........................    --    1.0     4.0    (1.6)   (0.1)    3.5
Net loss.........................  44.9  (15.9) (211.6) (162.4) (129.4) (155.8)
Six Months Ended June 30, 1999 and 1998

   Revenue. Revenue increased to approximately $3.3 million for the six months
ended June 30, 1999 from approximately $1.8 million for the six months ended
June 30, 1998, representing an increase of approximately $1.5 million, or 88%.
The increase in revenue was due primarily to an increase in the number of new
customers and increased usage by existing customers. This increase in revenue
was attributable to a significant increase in the number of employees in sales
operations and the introduction of the Viador E-Portal Suite.

   License Revenue. License revenue increased to approximately $2.1 million for
the six months ended June 30, 1999, from approximately $1.1 million for the six
months ended June 30, 1998, representing an increase of approximately 87%. The
increase in license revenue was due primarily to an increase in the number of
clients resulting from growing market acceptance of the Viador E-Portal Suite
which first shipped in the first quarter of 1999. These new large customers
were complemented by continuing sales to existing accounts and a number of
smaller new customer sales.

   Services Revenue. Service revenue increased to approximately $1.2 million
for the six months ended June 30, 1999, from $612,000 for the six months ended
June 30, 1998, representing an increase of approximately $588,000, or 89%. This
increase was a result of an increase in services provided in connection with
increasing license sales. This increase included an increase of $305,000 in
consulting revenue and an increase in customer training revenue. The increase
in training revenue reflects the availability of our San Mateo training center
which opened in the second quarter of 1998.

                                       24
Cost of Revenue. Cost of revenue increased to $874,000 for the six months
ended June 30, 1999 from $640,000 for the six months ended June 30, 1998,
representing an increase of $234,000, or 37%. The increase was primarily due to
the cost of providing consulting and training services incurred in the six-
month period ended June 30, 1999. We anticipate that our cost of revenue will
grow significantly in future periods in order to accommodate planned increases
in the number of customers and greater utilization of products by existing
customers.

   Research and Development. Research and development expenses consist
primarily of costs associated with new product introductions and product
improvements. Research and development expenses increased to approximately $1.9
million for the six-month period ended June 30, 1999 from approximately $1.1
million for the six-month period ended June 30, 1998, representing an increase
of approximately $800,000, or 69%. This increase was due primarily to a 24%
growth in personnel and personnel related costs, to new product introductions
and to upgrades to the latest computer platforms used by engineers and to a
move to a new facility in April 1998.

   Sales and Marketing. Sales and marketing expenses increased to approximately
$4.4 million for the six months ended June 30, 1999 from approximately $1.8
million during the six months ended June 30, 1998, representing an increase of
$2.6 million, or 143%. Approximately $2.0 million dollars of this increase is
attributable to increased selling expenses, most of which were salary and
commissions paid to salespeople. Marketing expenses doubled during the six
months ended June 30, 1999 over the same period last year, reflecting
advertising campaigns launched for the Viador E-Portal Suite in the first half
of 1999.

   General and Administrative. General and administrative expenses increased to
$996,000 for the six months ended June 30, 1999 from $374,000 during the six
months ended June 30, 1998, representing an increase of $622,000, or 166%. Over
half of the increase was attributable to increases in professional services
fees, primarily legal and accounting fees related to increased business
activities. The remaining expense increases were due primarily to increases in
office space.

   Interest Income, Net. Interest income, net, includes interest income from
our cash and cash equivalents, and investments. Interest expense relates to our
financing obligations, including bank borrowings. Interest expense, net,
increased to $116,000 of interest income for the six months ended June 30, 1999
up from $2,000 of interest expense for the six months ended June 30, 1998,
representing an increase of $118,000. This increase was primarily due to a
higher average cash balance as a result of the proceeds from the issuance of
shares of our preferred stock in August 1998 and May 1999.

Years Ended December 31, 1998, 1997 and 1996

   Revenue. Revenue was approximately $1.0 million, $1.6 million and $3.8
million in 1996, 1997 and 1998, respectively, representing increases of
$585,000, or 59%, from 1996 to 1997 and approximately $2.2 million, or 142%,
from 1997 to 1998. The increase in revenue from 1996 to 1997 consulting was due
primarily to an increase in product license sales as revenue in 1996 primarily
consisted of service revenue. The increase in revenue from 1997 to 1998 was due
primarily to growth in market acceptance of our software products.

   License Revenue. License revenue was $56,000, $839,000 and approximately
$2.3 million in 1996, 1997 and 1998, respectively. Revenue in 1996 for product
sales was low as we shipped our first product only in September of that year.
License revenue increased from 1996 to 1997 in large part because we introduced
two new web-based products which accounted for the majority of the $839,000 in
revenue. License revenue increased 172% from 1997 to 1998 as our products
gained market acceptance.

   Service Revenue. Service Revenue were $941,000, $743,000 and approximately
$1.5 million in 1996, 1997, and 1998, respectively. Our first full year of
operation was 1996, and much of that year was focused on providing customer
database consulting services to confirm the accuracy of the product plan and
direction. In 1997, service revenue dropped by 21% from 1996 because we shifted
our focus to developing and supporting

                                       25
our software product line. Service revenue climbed by 108% in 1998 compared to
1997 due to our expansion of the services to include customer maintenance and
support services as well as consulting in support of our licensed product
sales.

   Cost of Revenue. Cost of revenue was $314,000, $903,000 and approximately
$1.4 million in 1996, 1997 and 1998, respectively, representing increases of
$589,000, or 187%, from 1996 to 1997 and $484,000, or 54%, from 1997 to 1998.
These increases were due to the additions to our support and consulting
services staff and a new training facility opened in 1998.

   Research and Development. Research and development expenses were $364,000,
approximately $1.4 million and $2.5 million in 1996, 1997 and 1998,
respectively, representing increases of approximately $1.0 million, or 271%,
from 1996 to 1997 and approximately $1.1 million, or 84%, from 1997 to 1998.
These increases were primarily due to growth in personnel and personnel related
costs, to improved quality assurance programs, and to new product program
expenses, as well as a move of engineering staff to a new facility in April
1998.

   Sales and Marketing. Sales and marketing expenses increased from $125,000 in
1996 to approximately $1.8 million in 1997 and approximately $4.3 million in
1998, which represent increases of over 1300% and 138%, respectively. In 1996,
selling expenses only started in the fourth quarter, and marketing was largely
related to trade shows. This trend continued in 1997, as the first commissions
were paid only late in the year, and trade show and related expenses were heavy
throughout the year. The growth in 1998 over 1997 was almost entirely
attributable to selling, commissions and sales travel expense, as marketing
trade show expenses remained constant relative to 1997.

   General and Administrative. General and administrative expenses increased
from $358,000 in 1996 to $936,000 in 1997 and approximately $1.4 million in
1998, which represent year-to-year increases of 161% and 46%, respectively. In
1997, we used the proceeds of the first round of external financing to hire a
small administrative staff and to expand to a second office. Facility expenses
increased in 1998 as our San Mateo offices were consolidated, and new field
offices were opened. Professional expenses, chiefly for legal and accounting
support, increased sharply in 1998 relative to 1997. Depreciation expenses for
new office equipment and amortization of improvements to our San Mateo offices
over two-year leases largely account for the remainder of the increase.

   Interest Income, Net. Interest income, net, was $10,000, $62,000 and an
expense of $63,000 in 1996, 1997 and 1998, respectively, representing an
increase of $52,000 from 1996 to 1997 and a decrease of $125,000 from 1997 to
1998. The increase from 1996 to 1997 was due to a higher average cash balance
as a result of the proceeds from the issuance of shares of our preferred stock
and the decrease from 1997 to 1998 was due to the use of cash for operations
and the payment of interest on a $2.0 million bridge loan obligation starting
in the second quarter.

                                       26
Quarterly Results of Operations

   The following tables set forth certain unaudited statements of operations
data for the six quarters ended June 30, 1999, as well as the percentages of
our revenues represented by each item. This data has been derived from the
unaudited interim financial statements prepared on the same basis as the
audited financial statements contained herein and, in the opinion of
management, include all adjustments consisting only of normal recurring
adjustments that we consider necessary for a fair presentation of such
information when read in conjunction with the financial statements and notes
thereto appearing elsewhere in this prospectus. The operating results for any
quarter should not be considered indicative of results of any future period.
Three months ended
                         --------------------------------------------------------
                          Mar.      June     Sept.     Dec.      Mar.      June
                           31,       30,      30,       31,       31,       30,
                          1998      1998     1998      1998      1999      1999
                         -------   -------  -------   -------   -------   -------
Statement of Operations    (unaudited, dollars in thousands except per
 Data:                                     share data)
Revenue................. $   725   $ 1,029  $   669   $ 1,402   $ 1,228   $ 2,062
Cost of revenue.........     312       328      391       356       353       521
Gross profit............     413       701      278     1,046       875     1,541
Operating expenses:
  Research and
   development..........     521       586      654       720       820     1,051
  Sales and marketing...     836       970    1,214     1,275     1,968     2,429
  General and
   administrative.......     166       208      529       462       305       691
  Amortization of stock-
   based compensation...      --        94      158       193       253       276
                         -------   -------  -------   -------   -------   -------
Total operating
 expenses...............   1,523     1,858    2,555     2,650     3,346     4,447
                         -------   -------  -------   -------   -------   -------
Operating income
 (loss).................  (1,110)   (1,157)  (2,277)   (1,604)   (2,471)   (2,906)
Interest income
 (expense), net.........     (11)       10     (198)     (260)       35        81
                         =======   =======  =======   =======   =======   =======
Net income (loss)....... $(1,121)  $(1,147) $(2,079)  $(1,864)  $(2,436)  $(2,825)
                         =======   =======  =======   =======   =======   =======
Basic and diluted net
 income (loss) per
 share.................. $ (0.35)  $ (0.33) $ (0.56)  $ (0.48)  $ (0.59)  $ (0.62)
                         =======   =======  =======   =======   =======   =======
Weighted average shares
 used in basic and
 diluted net loss per
 share..................   3,219     3,467    3,690     3,900     4,121     4,568
                         =======   =======  =======   =======   =======   =======
As a Percent of Total
 Revenue:
Revenue.................   100.0%    100.0%   100.0%    100.0%    100.0%    100.0%
Cost of revenue.........    43.0      31.9     58.4      25.4      28.7      25.3
                         -------   -------  -------   -------   -------   -------
Gross profit............     6.9      68.1     41.6      74.6      71.3      74.7
Operating expenses:
  Research and
   development..........    71.9         5     97.8      51.4      66.8      50.9
  Sales and marketing...   115.3      94.3    181.5      90.9     160.3     117.8
  General and
   administrative.......    22.9      20.2     79.1      32.9      24.8      33.5
  Amortization of stock-
   based compensation...     0.0       9.1     23.6      13.8      20.6      13.4
                         -------   -------  -------   -------   -------   -------
Total operating
 expenses...............   210.1     180.5    382.0     189.0     272.5     215.6
                         -------   -------  -------   -------   -------   -------
Operating income
 (loss).................  (153.1)   (112.4)  (340.4)   (114.4)   (201.2)   (140.9)
Interest income
 (expense), net.........    (1.5)      1.0    (29.6)    (18.5)      2.9       3.9
                         -------   -------  -------   -------   -------   -------
Net income (loss).......  (154.5)%   111.4%  (310.8)%  (132.9)%  (198.3)% (137.0)%
We expect to experience significant fluctuations in our future results of
operations due to a variety of factors, many of which are outside of our
control, including:

  .  demand for and market acceptance of our products and services;

  .  expansion into international markets;

  .  introduction of products and services or enhancements by us and our
     competitors;

                                       27
.  competitive factors that affect our pricing;

  .  the timing of customer installations;

  .  the mix of products and services we sell;

  .  the timing and magnitude of capital expenditures, including costs
     relating to the expansion of operations;

  .  the size of customer orders, some of which may account for more than 10%
     of total revenue during a particular quarter;

  .  the hiring and retention of key personnel;

  .  conditions specific to the internet industry and other general economic
     factors; and

  .  new government legislation or regulation.

   In addition, a relatively large portion of our expenses are fixed in the
short-term, particularly with respect to depreciation, real estate and
personnel costs, and therefore our results of operations are particularly
sensitive to fluctuations in revenues. Due to the foregoing factors, we believe
that period-to-period comparisons of our operating results are not necessarily
meaningful and that such comparisons cannot be relied upon as indicators of
future performance.

Liquidity and Capital Resources

   From inception through June 30, 1999, we financed our operations primarily
through private equity placements totaling approximately $26.6 million and
drawdowns from a revolving facility of up to $500,000. At June 30, 1999, we had
an accumulated deficit of approximately $14.8 million and cash and cash
equivalents of approximately $14.3 million.

   Net cash used in our operating activities for the six months ended June 30,
1999 was approximately $3.9 million. The net cash used by operations was
primarily due to working capital requirements and net losses, offset by
increases in accounts payable and accrued expenses. Net cash used in investing
activities was $588,000 for the period ended June 30, 1999, which is comprised
of property and equipment purchases. Net cash provided by financing activities
was approximately $14.6 million and is related primarily to a private placement
of equity securities.

   We have a $2.5 million line of credit with a commercial bank for the purpose
of financing working capital requirements and equipment purchases. As of June
30, 1999, no amount was outstanding thereunder. The loan contains certain
standard covenants, is based on a percentage of qualified outstanding accounts
receivables and is secured by a security interest in certain of our
intellectual property. Interest on borrowings thereunder accrues at the rate of
1% over prime rate for the revolver and 1.5% over prime rate for an equipment
note.

   We believe that the estimated net proceeds from this offering, together with
our existing cash and funds available under our existing credit facilities,
will be sufficient to fund our capital expenditures, cash needs and operating
losses for at least the next 12 months. The execution of our business plan will
require substantial additional capital to fund our operating losses, sales and
marketing expenses, capital expenditures, lease payments and working capital
requirements thereafter. We intend to continue to consider our future financing
alternatives, which may include the incurrence of indebtedness, additional
public or private equity offerings or an equity investment by a strategic
partner. Actual capital requirements may vary based upon the timing and success
of the expansion of our operations. Our capital requirements may change based
upon technological and competitive developments. In addition, several factors
may affect our capital requirements, including:

  .  demand for our products and services or our anticipated cash flow from
     operations being less than expected;

                                       28
.  our development plans or projections proving to be inaccurate; or

  .  our engaging in acquisitions or other strategic transactions.

   Other than our $2.5 million line of credit, we have no present commitments
or arrangements assuring us of any future equity or debt financing, and there
can be no assurance that any such equity or debt financing will be available to
us on favorable terms, or at all.

Deferred Stock-based Compensation

   Certain options granted and common stock issued during the 18 months ended
June 30, 1999 have been considered to be compensation. Total deferred stock-
based compensation associated with such equity transactions for the year ended
December 31, 1998 and for the six months ended June 30, 1999 were approximately
$1.6 million and approximately $1.4 million, respectively. These amounts are
being amortized over the vesting periods of the options. Of the total stock
compensation expense, $445,000 was amortized in the 12 months ended December
31, 1998 and $529,000 was amortized in the six months ended June 30, 1999. We
expect amortization of approximately $1.1 million and $805,000 in the years
ended December 31, 1999 and 2000, respectively.

Recent Accounting Pronouncements

   In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No.
133 establishes accounting and reporting standards for derivative financial
instruments and hedging activities related to those instruments, as well as
other hedging activities. Because we do not currently hold any derivative
instruments and do not engage in hedging activities, we expect that the
adoption of SFAS No. 133 will not have a material impact on our financial
position, results of operations, or cash flows. We will be required to adopt
SFAS No. 133 in fiscal 2000.

   In December 1998, the American Institute of Certified Public Accountants'
issued SOP 98-9, Software Revenue Recognition, with Respect to Certain
Arrangements, which requires recognition of revenue using the "residual method"
in a multiple element arrangement when fair value does not exist for one or
more of the delivered elements in the arrangement. Under the "residual method,"
the total fair value of the undelivered elements is deferred and subsequently
recognized in accordance with SOP 97-2. We did not have a material change to
our accounting for revenue as a result of the provisions of SOP 98-9.

Year 2000 Compliance

 Background of Year 2000 Issues

   Many currently installed computer systems and software products are unable
to distinguish between twentieth century dates and twenty-first century dates
because such systems were developed using two digits rather than four to
determine the applicable year. For example, computer programs that have date-
sensitive software may recognize a date using "00" as the year 1900 rather than
the year 2000. This error could result in system failures or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities. As a result, many companies' software and computer systems
may need to be upgraded or replaced to comply with these year 2000
requirements.

 State of Readiness

   Our business is dependent on the operation of numerous systems that could
potentially be affected by year 2000-related problems. Those systems include,
among others:

  .  hardware and software systems used by us to deliver products and
     services to customers, including our proprietary software systems as
     well as software supplied by third parties;

                                       29
.  communications networks such as the internet and private intranets;

  .  the internal systems of our customers and suppliers;

  .  software products sold to customers;

  .  the hardware and software systems used internally by us in the
     management of our business; and

  .  non-information technology systems and services, such as power,
     telephone systems and building systems.

   We have established steering committees composed of senior executives and a
year 2000 compliance task force composed of representatives from various
functional areas, including our product, management and information systems
departments. This task force also included outside consultants with expertise
in addressing year 2000 issues. The task force has been charged with the
responsibility of formulating and implementing our year 2000 readiness and is
applying a phased approach to analyzing our operations and relationships as
they relate to the year 2000 problem. The phases of our year 2000 program are
as follows:

  .  establishment of a year 2000 steering committee and task force;

  .  assignment of responsibility for external issues, such as products
     licensed by us, internal issues, such as hardware, facilities,
     equipment, and software;

  .  inventory of all aspects of our operations and third party relationships
     subject to the year 2000 problem;

  .  comprehensive analysis, including impact analysis and cost analysis, of
     our year 2000 readiness; and

  .  remediation, testing and contingency planning.

   We have completed the first two phases of the program, and expect that the
final three phases will be completed for our mission-critical systems by
September 30, 1999 and for all of our systems by October 31, 1999. Because our
plan is still in progress, we have not yet identified and remediated all year
2000 business risks. We estimate that we will spend approximately an additional
$100,000 to complete our year 2000 program.

 Risks Related to Year 2000 Issues

   Based on our assessment to date, we believe the current versions of our
software products are "year 2000 compliant." We have performed various testing
processes to confirm that our products do not have identifiable year 2000
problems. However, we continue to formally retest and document the processes we
have completed and the results thereof. We expect this product retesting and
documentation to be completed by September 30, 1999. We continue to evaluate
the year 2000 compliance of our vendors, and it may be necessary to take
precautions to make sure that our services will continue to function
efficiently. Furthermore, we are also subject to external forces that might
generally affect industry and commerce, such as extended power outages or
widespread failures across the internet, which would create disruptions that
would take time to repair. The time required to make such repairs would depend
on the severity of the power outages or widespread failures. The costs
associated with any such external forces could be material.

   Our products are generally used with sophisticated hardware and complex
software products which may not be year 2000 compliant. The accuracy of the
information generated by our products is inherently dependent on the quality of
the source data from these other hardware and software products. Therefore, to
the extent that the underlying source data is inaccurate or corrupted, or to
the extent that the hardware or software products that generate or store that
data are not year 2000 compliant or are otherwise flawed, the information
generated by our products may be similarly inaccurate or corrupted. Success of
our year 2000 compliance efforts may depend on the success of our customers in
dealing with their year 2000 issues. We sell our products to companies in a
variety of industries, each of which is experiencing different year 2000
compliance issues. Customer difficulties with year 2000 issues might require us
to devote additional resources to resolve underlying problems.

                                       30
Although we have not been a party to any litigation or arbitration
proceeding to date involving our products or services and related to year 2000
compliance issues, there can be no assurance that we will not in the future be
required to defend our products or services in such proceedings, or to
negotiate resolutions of claims based on year 2000 issues. The costs of
defending and resolving year 2000-related disputes, regardless of the merits of
such disputes, and any liability for year 2000-related damages, including
consequential
damages, may have a material adverse effect on our business, results of
operations and financial condition. In addition, we believe that purchasing
patterns of customers and potential customers may be affected by year 2000
issues as companies expend significant resources to correct or upgrade their
current software systems for year 2000 compliance or defer additional software
purchases until after 2000. As a result, some customers and potential customers
may have more limited budgets available to purchase software products such as
those offered by us, and others may choose to refrain from changes in their
information technology environment until after 2000. To the extent year 2000
issues cause significant delay in, or cancellation of, decisions to purchase
our products or services, our business would be materially adversely affected.

   We are also reviewing our internal management information and other systems
in order to identify any products, services or systems that are not year 2000
compliant, in order to take corrective action. To date, we have not encountered
any material year 2000 problems with our computer systems or any other
equipment that might be subject to such problems. We continue to formally
document the results of our review. We expect that our review will be completed
and fully documented before year end.

   Our plan for the year 2000 calls for compliance verification of external
vendors supplying software and information systems to us and communication with
significant suppliers to determine the readiness of third parties' remediation
of their own year 2000 issues. As part of our assessment, we are evaluating the
level of validation we will require of third parties to ensure their year 2000
compliance. We could also experience material adverse effects on our business
if we fail to identify all year 2000 dependencies in our systems and in the
systems of our suppliers, customers and financial institutions. We will
identify mission critical business operations and develop contingency plans for
those operations. We presently do not have a contingency plan for handling year
2000 problems that are not detected and corrected prior to their occurrence.
There can be no assurance that the total cost of year 2000 compliance will not
be material to our business. We may not identify and remediate all significant
year 2000 problems on a timely basis, remediation efforts may involve
significant time and expense, and unremediated problems may have a material
adverse effect on our business. See "Risk Factors--Potential year 2000 problems
with our products or internal systems may involve significant time and expense"
and "--Year 2000 considerations among our customers and potential customers may
reduce our sales revenue."

Qualitative and Quantitative Disclosures about Market Risk

   We develop products in the United States and market our products in North
America, Europe and the Asia-Pacific region. As a result, our financial results
could be affected by factors such as changes in foreign currency exchange rates
or weak economic conditions in foreign markets. As all of our sales are
currently made in U.S. dollars, a strengthening of the dollar could make our
products less competitive in foreign markets. Our interest income is sensitive
to changes in the general level of U.S. interest rates, particularly since the
majority of our investments are in short-term instruments. Due to the short-
term nature of our investments, we believe that there is no material risk
exposure. Therefore, no quantitative tabular disclosures are required.

                                       31
BUSINESS

   The following description contains forward-looking statements that involve
risks and uncertainties. Our actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that may cause the
results to differ include those discussed in "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Overview

   We are one of the first providers of internet software that enables
businesses to create enterprise information portals. An enterprise information
portal is a single point of access to an organization's electronic information
similar to popular consumer internet portals that provide access to the world
wide web. We believe the Viador E-Portal Suite offers a comprehensive and
integrated enterprise information portal that gives users a single browser-
based interface with which to quickly and easily access up-to-the-minute
information from a variety of enterprise data sources. Our software is
specifically designed for the web and works with a customer's existing hardware
and software systems, without the need for additional technology expenditures.
It provides a highly adaptable platform for the management and sharing of
information on a secure and cost-effective basis that can accommodate
significant increases in the number of users and amount of information. As more
users contribute increasing amounts of information to the portal, we believe
our customers and their users are able to realize greater productivity and
efficiency in their businesses. Since January 1, 1998, over 30 of our customers
have purchased more than $50,000 of our products and services, including
Charles Schwab, CIBC, Citibank, IBM, Mitsui, Sprint and Xerox.

Industry Background

   In today's highly competitive environment, businesses are focused on
improving their efficiency, effectiveness and ability to meet customer demands.
Providing diverse internal decision-makers with relevant, accurate and timely
information is a key strategic priority for business and an important element
of achieving competitive advantage. Similarly, sharing information with
customers and suppliers is essential to succeed as an e-business.

 Abundance of Information

   Business decision-makers need quick access to relevant information from a
variety of sources, including the internet, corporate intranets, e-mail,
databases, business applications and other software programs. However, the
large and growing quantity of information, coupled with the lack of effective
solutions for efficiently accessing it and organizing it, make it difficult to
identify and utilize relevant information. Due to this information overload,
businesses need to be able to quickly identify and obtain relevant information
in order to make timely and informed decisions.

 The Proliferation of Disparate Information Technology Formats

   There is a rapidly growing variety of technologies used for creating,
storing and organizing information. These include many different hardware
platforms--such as mainframe computers and client/server network systems, which
may involve using different access terminals and fulfilling multiple access and
security protocols--and different software applications--such as database,
sales force automation, client relationship management, intranet and document
management systems and enterprise resource planning software. However, many of
these hardware platforms and software applications were developed independently
to be operated on a stand-alone basis or without a view to being operated with
other hardware platforms and software applications. As a result of these
different hardware and software formats, it is increasingly difficult and time
consuming to gain access to all relevant information. For example, some
relevant information may only be accessed through a human resources application
using a client/server system, while other relevant information may only be
available from a database on a central mainframe computer. In order to access
all this information, users may

                                       32
need to open separate software applications, complete separate security
protocols, and perhaps even use different terminals. As the amount of formats
and information grows, it becomes increasingly difficult and time consuming to
navigate around these technological obstacles to obtain relevant information.

 Emergence of the Internet as the Universal Information Infrastructure

   The internet continues to experience rapid growth and expansion as an
important global medium for communications and business due to its cost
effectiveness, extensive reach and ability to handle tremendous growth. The
internet provides a powerful medium for enterprises and their customers,
suppliers and strategic partners to share business information efficiently. We
expect that the ability to share information efficiently over the internet will
become increasingly enhanced and lead growing numbers of enterprises to adopt
web-based information and communication solutions.

 Growth of E-Business

   The internet continues to transform the way that business is conducted. It
can help businesses improve customer satisfaction, reduce cost structures,
globalize operations, foster innovation and accelerate speed to market. E-
business is the use of the internet and emerging technologies to replace or
supplement traditional business channels and practices. As the number of
internet users has grown, enterprises have increasingly viewed the internet as
an opportunity to interact rapidly with a larger number of geographically
distributed offices, employees, customers, suppliers and partners. In many
cases, the adoption of a web-based marketing, communication or financial model
provides enterprises with strategic competitive advantages and can prevent the
loss of market share to aggressive e-business innovators.

 Need for a Comprehensive Solution

   The above factors suggest the need for a solution that facilitates the
organization, access and use of enterprise information by those who require it,
regardless of whether they are users inside the business or outside partners.
However, current solutions generally do not enable companies to use multiple
hardware and software technologies and to organize and securely access
enterprise information through a single interface regardless of its format.

   Although software companies have started to provide internet access to
information stored in their own format, they generally do not provide access to
information stored in other formats. For example, enterprise resource planning
companies have established portals that permit access over the internet to the
structured data contained in their particular products. However, these portals
do not provide access to other sources of structured data, nor do they provide
access to unstructured or event data. Structured data is information from
databases, data marts, data warehouses or enterprise resource planning systems.
Unstructured data is contained in company intranets, on the internet, in
groupware such as Lotus Notes, in document management systems or existing
business intelligence applications. Event data, such as news or stock quotes,
is data which is constantly changing and which is delivered in real time. The
ideal solution would work with all of the enterprise's information technology
and provide integrated access to all enterprise information regardless of
whether the data is structured, unstructured or event data. Furthermore, given
the large amounts of electronic data being generated, the ideal solution would
help users get fast access to personalized and relevant information.

   In addition, a comprehensive solution would work with existing customer
information systems, and would not require the customer to replace or upgrade
its existing technology investments. Furthermore, a comprehensive solution
would utilize the internet, so that it would work through a web browser without
any need to install additional software on users' computers. An internet-based
solution could be implemented quickly, accommodate significant increases in the
number of users and amount of information, and adapt to changes in the
customer's business model. In contrast, we believe that any solution that does
not utilize the internet would have significant difficulty accommodating
substantial increases in the number of users and amount of information.

                                       33
The Viador E-Portal Suite

   We provide a suite of enterprise software products that enables
organizations to build enterprise information portals which permit quick, easy
access to all enterprise information, facilitates the provision of customized
and personalized information, and permits the secure sharing of enterprise
information both within the enterprise and with outside partners.

   Single Access Point for All Enterprise Information. Our software provides a
single access point to structured, unstructured and event data from multiple
sources within and outside the company. We provide a comprehensive and
integrated enterprise information portal solution which provides access to
customized, up-to-the-minute information quickly and easily.

   Adaptable Web-Based Architecture. In contrast to existing solutions, our
software architecture can accommodate significant increases in the number of
users and amount of information. Our software architecture is designed for the
internet, which means that it:

  .  works through a user's existing web browser,

  .  does not require the installation of any additional software on the
     user's desktop, and

  .  can be quickly rolled-out to thousands of additional users.

Our solution provides a platform for building and enhancing over time the
methods by which our customers organize, retrieve and distribute information.
The open and highly adaptable architecture of our software gives our customers
the flexibility to customize and extend their enterprise portal framework as
their needs evolve. The Viador E-Portal Suite is centralized on the customer's
servers, which makes it cost-effective to deploy and easy to manage a large
number of users. Our information portal platform provides greater benefits to
the enterprise the more users it reaches and the more broadly our software is
deployed.

   Customized and Personalized Information. We address the information overload
problem by helping users locate and retrieve the most pertinent business
information. This capability increases the efficiency of information use by our
customers' employees. Our software allows the organization to focus information
by subject, by user, by department, by role within the organization and
according to other criteria. Its capabilities permit the location of and access
desired information from structured, unstructured and event data sources. In
addition, our software permits each user to customize his or her portal
interface to access and display information in accordance with that user's
needs and preferences. We expect that future versions of our products will be
able to automatically track users' information retrieval patterns over time in
order to further personalize the information provided to each user.

   Combines Ease of Use with Sophisticated Functionality. The Viador E-Portal
Suite provides browser-based searchable access to the entire range of an
organization's enterprise information assets, facilitating location of and
access to information, regardless of the underlying data source. Our browser
interface combines the ease of use of popular consumer internet portals with a
full range of sophisticated search and analysis functionality. The database
access capabilities within our software are all web-based and, unlike
unintegrated database access tools, offer a uniform look and feel for
reporting, query and analytical processing.

   Builds Upon Customers' Existing Investments in Information
Technology. Customers who utilize our software are able to build upon their new
and existing hardware, database applications, enterprise software applications
and other software investments. Because most businesses operate in a diverse
computing environment, our products are designed to interact with and access a
broad range of software platforms and products, including multiple operating
systems, browsers, databases, groupware, intranet sites and major enterprise
resource planning programs.

   Ease of Implementation. The Viador E-Portal Suite is designed to be
implemented rapidly over the web using our customers' existing information
technology. Once installed on an organization's servers, our software

                                       34
can reach employees enterprise-wide via their existing browsers. New users can
be added in minutes on the customer's servers since no software has to be
installed on the desktop.

   Secure and Selective Access. Security features are essential to permit
customers to become extended enterprises that share confidential information
rapidly over the internet with a large number of geographically distributed
offices, employees, customers, suppliers and partners. Our software allows the
organization to customize information access by individual user and category of
user. Our product's security features operate in conjunction with our
customers' existing security services--such as firewalls, encryption and proxy
servers-- to identify and authenticate users, process requests and securely
deliver sensitive information.

Viador Strategy

   Our goal is to be the leading provider of enterprise information portal
software solutions. Key elements of our strategy include:

   Extend Technology Leadership. We believe we are among the first companies to
provide a solution that has all of the following features:

  .  based on pure internet architecture;

  .  provides search capabilities using internet search technology;

  .  facilitates personalization of the information provided to each user;

  .  designed to accommodate significant increases in the number of users and
     amount of information;

  .  can retrieve and deliver information from different, otherwise
     incompatible sources; and

  .  provides multi-level security.

We intend to enhance our technology by continuing to devote significant
resources to research and development efforts and by forming strategic
relationships that will enable us to further enhance the performance and
adaptability of our software.

   Expand Sales, Distribution and Marketing. We intend to significantly grow
our direct sales organization to expand coverage and penetration of large
enterprise opportunities to take advantage of our innovative technologies. We
are making significant new investments in our corporate and field marketing
capacity as well as efforts to improve awareness of Viador and the Viador E-
Portal Suite solution. In addition, we will continue to exploit and build our
network of resellers of products who also provide related services,
manufacturers who use our software in their product, system integrators who
bring together various hardware and software to solve a specific customer
problem, and distributors to expand our indirect distribution worldwide.

   Increase Use by Existing Customers. The value of our software to our
customers grows as it is deployed more widely throughout the organization,
since our products and service offerings are designed to enable organizations
to deploy enterprise-scale information access and analysis. As more and more
users related to a customer contribute information to the portal, as the
customer adds more users to the portal, and as the users become accustomed to
using information in this way, the value of our software to the customer grows.
As more users contribute increasing amounts of information to the portal, we
believe our customers and their users are able to realize greater productivity
and efficiency in their businesses. For these reasons, we believe that our
success at winning and delivering deployments can be grown to enterprise-wide
adoption of our technology, which would generate significant added revenue.

   Build Strategic Relationships. We have formed strategic relationships
covering marketing, engineering and sales with numerous multinational companies
that are at the forefront of e-business technology. We have an established
marketing arrangement with IBM which has significantly improved our
distribution capabilities and resulted in additional sales. In addition, our
technology is used in IBM's Net.Commerce initiative for

                                       35
e-commerce storefronts and we are delivering our technology onto the IBM CS/390
enterprise server. Our products are currently distributed in Japan by Mitsui,
who assisted us in adapting our products for Japan and other international
markets. In addition, we have partnered with Infoseek for joint marketing
purposes and to incorporate into our software Infoseek's technologies for
searching and indexing information available on the internet and on our
customers' intranets. We also intend to develop new strategic relationships
with other large hardware, software and e-commerce companies.

   Create Standardized Business Portal Solutions. We are creating a series of
standardized portal formats for specific business uses. These portal formats
provide a turn-key solution by meeting the specific information requirements of
customers with similar business needs. For example, we have developed an e-
commerce portal format to assist e-commerce companies to understand information
regarding shopping behavior of those using their web sites. This contrasts with
the format requirements of a supply chain portal. Our standardized business
portals are designed to significantly reduce the time required to implement the
Viador E-Portal Suite in a tailored format that satisfies a significant portion
of the customer's information needs. Furthermore, these standardized formats
can be customized over time to better suit the information needs of a specific
customer. These standardized portal formats complement our broader sales
strategy by facilitating initial deployments at new customers, so that our
relationship with these customers can develop over time resulting in broader
deployments of our software.

   Build World Class Service and Support Operations. Superior customer service,
training and support is necessary to build long-term customer relationships
that enable enterprise-wide deployments of our software. Our goal is to deliver
technology and services that enable our customers to rapidly implement advanced
technology business solutions throughout their organizations at the lowest
possible cost. To succeed and maintain a competitive edge, we will continue to
build on the success of our Advanced Solutions Division, which uses our core
technology to solve customers' individual problems. We intend to grow our
direct service and support organization to expand our training capabilities and
to provide reliable customer support.

Technology

   We believe the Viador E-Portal Suite offers a comprehensive and integrated
enterprise information portal that gives users a single browser-based interface
with which to quickly and easily access up-to-the-minute information from a
variety of enterprise data sources. Combining this easy-to-use portal interface
with an adaptable server-based information backbone, our software provides
secure access and delivery for structured, unstructured and event data.

 Adaptable Internet Architecture

   The architecture of the Viador E-Portal Suite is designed for the web, which
gives it the ability to accommodate significant increases in the number of
users and the amount of information. Our Software's highly adaptable
architecture and open application programming interface give customers the
added flexibility to customize and extend their enterprise portal framework as
their needs evolve. It is Java-based, it operates on the Microsoft Windows NT
server platform, and we anticipate that it will operate on Unix server
platforms beginning in the third fiscal quarter of 1999. Our software works
with major web servers and browsers, and offers open application processing
interfaces to create custom portals.

   We provide a high-performance, server-based information backbone that
provides data access, content delivery, session management and user security.
We further ensure enterprise-wide scalability through add-on options that
enable multiple servers, distributed throughout a customer's organization, to
work together in servicing user information requests.

                                       36
Comprehensive Access

   Our software provides comprehensive information access for the following
categories of data:

  .  structured data, including data from databases, data marts, data
     warehouses and enterprise resource planning systems and other software;

  .  unstructured data, including data contained in company intranets, on the
     internet, in groupware such as Lotus Notes, in document management
     systems and existing business intelligence applications; and

  .  event data, such as news or stock quotes, that is constantly changing
     and which is delivered in real time.

 Information Personalization

   We address the information overload problem by helping users locate and
retrieve the most pertinent business information. This capability increases the
efficiency of information use by our customers' employees. Our software allows
the organization to focus information by subject, by user, by department, by
role within the organization and according to other criteria. Its capabilities
permit the location of and access to desired information from structured,
unstructured and event data sources. In addition, our software permits each
user to customize his or her portal interface to access and display information
in accordance with that user's needs and preferences. We expect that future
versions of our products will be able to automatically track users' information
retrieval patterns over time in order to further personalize the information
provided to each user.

 Secure Information Sharing

   Security features are essential to permit customers to become extended
enterprises that share their confidential information rapidly over the internet
with a large number of geographically distributed offices, employees,
customers, suppliers and partners. Our product's security features operate in
conjunction with our customers' existing security services--such as firewalls,
encryption and proxy servers--to identify and authenticate users, process
requests, and securely deliver sensitive information. These features permit the
enterprise to establish multiple levels of access rights based upon the user's
job function and organizational role.

 Easy Administration

   Our software facilitates the management of enterprise information in large
organizations with thousands of users, giving the system administrator an added
measure of freedom and flexibility to centrally monitor and administer the
system from virtually anywhere. User administration by the user's job function
and organizational role enables the administrator to precisely delineate access
privileges to reports and databases for individual users and groups. The server
management component of our software audits server usage and monitors user
access in real-time.

                                       37
Products and Services

 Products

   The following diagram briefly describes the products that comprise the
Viador E-Portal Suite:

   [A graphic depicting the flow of information through the components of the
 Viador E-Portal Suite and briefly describing the function of each component.]

                                       38
The Viador E-Portal Suite is comprised of the following products, which are
sold both individually and as a suite:

   Viador Sage is a browser-like portal interface that gives users the ability
to search, access, analyze and share business information through a simple
interface similar to popular consumer internet portals. Both organizations and
individual users can customize the Viador Sage interface to meet their
information needs. Viador Sage provides comprehensive data access capabilities
to structured, unstructured and event data. Personalization capabilities enable
the filtering of information by time, subject and job function to improve user
productivity.

   Viador Information Center is a high-performance Java server-based adaptable
information backbone that provides data access, content delivery, session
management and user security. Viador Information Center further ensures that
our software can grow with the enterprise-wide through add-on options that
provide support for additional computers and balancing the needs of multiple
users. These options enable multiple servers, distributed enterprise-wide, to
work together in servicing user information requests.

   Viador Gateway allows customers to choose from a wide range of drivers to
provide access to the data sources they would like to include in the Viador
Information Center. These sources include: Oracle, Sybase, Informix, DB2,
Microsoft SQL Server, Hyperion, Essbase, Oracle Express, WhiteLight, ODBC,
Lotus Notes, Microsoft Office, intranet sites, business intelligence tools and
others.

   Viador Sentinel is an integrated security server for extending secure web-
based access to partners, customers and suppliers over the internet. Sentinel
operates in conjunction with existing security services--such as firewalls,
encryption and proxy servers--to identify and authenticate users, process
requests and securely deliver sensitive information. Viador Sentinel allows
companies to exchange information with e-business customers, suppliers and
partners, thereby facilitating more efficient operations and improving customer
satisfaction.

   Viador Administrator facilitates the management of large customer
information technology environments with thousands of users by giving the
system administrator an added measure of freedom and flexibility to centrally
monitor and administer the system from virtually anywhere. Administration of
users by job responsibilities and role within the organization enables the
administrator to precisely define access privileges to reports and databases
for individual users and groups. A server management feature audits server
usage and monitors user access in real-time.

   In addition, we offer Viador SDK, a software development kit for creating
custom portals to meet the specific needs of an enterprise.

 Services

   Our Advanced Solutions Group offers architectural and technical consulting
services, customer support and training in connection with licenses of our
software. We believe that services are an important part of our success and we
continue to expand our professional services organization.

   Consulting. Our pre-sale and post-sale technology implementation services
are organized into a single organization so that our assigned consulting
engagement team can work with a customer from the initial business problem
discussions through implementation of their solution. We believe that this
allows us to develop greater knowledge of the customers environment and add the
highest level of value. Our consultants are qualified and trained to perform a
wide variety of services including: architectural assessment, prototype
development, installation, configuration and testing of our software and
integration with the customer's existing databases, security and other systems.
Our consultants also help customers develop a strategy for the customers'
enterprise-wide deployment of our software. Once deployed into a customer site
on an engagement, our consultants become advisors and help us discover new
business opportunities around the company.

   Customer Support. We provide product upgrades and customer support through
our customer support program. Customer support personnel are available 24 hours
a day, seven days a week. We also offer

                                       39
e-mail-based support. Customers generally purchase the first year of product
support at the time they license our software; thereafter, support may be
renewed on an annual basis. Our support engineers will immediately render
assistance to system critical problems and work with the customer to diagnose
the issue and resolve it until the customer is satisfied. Once a customer has
purchased a technical support contract, they are entitled to free upgrades for
the software they have licensed. Our support organization interfaces with our
sales force in identifying new opportunities, product uses and for maintenance
renewals.

   Training. We offer a variety of training programs tailored to particular
user groups, including end users and information technology personnel. Training
classes are offered at customer sites, in various high demand cities and also
at our headquarters in San Mateo, California. We also provide training classes
for third-party service providers, such as systems integrators and
distributors. Viador also offers training for other trainers to expand our
reach to customers. Viador incorporates training early on in the sales cycle to
ensure successful implementations and even sponsors free one-day enterprise
portal training seminars in cities as an early entry into accounts.

Customers

   Our customer base spans multiple industry segments including financial
services, government, healthcare, manufacturing and telecommunications. The
following is a representative list of companies that have purchased over
$50,000 of our products and services since January 1, 1998. We do not intend
the identification of these customers to imply that these customers are
actively endorsing or promoting our products.
Financial                  Energy & Utilities                    High Tech/Telecom
.  American Century        .  INTESA                             .  3Com
 .  Charles Schwab          .  Pacific Gas & Electric             .  Cisco Systems
 .  CIBC                    .  Retail Energy Transaction Exchange .  IBM
 .  Citibank                Government/Education                  .  Lucent Technologies
 .  Putnam Investments      .  Federal Aviation Administration    .  Nortel
Manufacturing              .  Internal Revenue Service           .  Sprint PCS
 .  Allied Signal           .  University of Buffalo              .  Sterling Software
 .  Raytheon                .  Multnomah County, Oregon           .  Sun Microsystems
Internet                   .  US Department of Defense           .  Sybase
 .  Baker                   Healthcare                            .  Xerox
   Street Technologies
 .  Netcentives             .  Ministry Health Care
 .  FaceTime Communication  Services
 .  Micromuse               .  Gelco Information Systems
                           .  Mitsui
The following examples, which are based on information furnished by the
companies listed below, illustrate how certain of our customers use the Viador
E-Portal Suite to perform business-critical tasks:

   Sprint PCS. Sprint PCS provides digital personal communication services over
a nationwide wireless network, covering more than 280 metropolitan areas and
over 1,100 cities. Sprint was rapidly hiring employees, resulting in an
increase from a few hundred users of its information systems to thousands of
users. Sprint sought an enterprise solution that would enable it to deliver to
thousands of users and critical customers financial information from multiple
data sources that normally could only be accessed with a disparate collection
of client/server tools. Sprint knew that it would be cost prohibitive to use
client/server database access tools because the high cost of installing and
maintaining the necessary PC software on thousands of desktops. Sprint
determined that the way to scale its information technology infrastructure was
to use its existing desktop browsers and its intranet. After 90 days following
project initiation, we were able to provide Sprint with a solution that offered
hundreds of users web-based access to a wide variety of financial data sources
through the users' web browsers and the ability to significantly and easily
expand the number of users in the future. In addition to addressing the
scalability issue with the web, Viador offered Sprint a secure way to access
the data on the internet and personalize user access based on the user's job
function.

                                       40
Xerox. Xerox offers a wide variety of document-related solutions, products
and services that enhance business productivity. Xerox needed an efficient
method for searching, analyzing and distributing business information from its
many different corporate data sources so that its thousands of employees
worldwide could directly access timely, customized information. Xerox required
a solution that would support thousands of users around the world, which
existing client/server solutions are not capable of efficiently doing. Thus,
Xerox conducted a comprehensive evaluation of web data access solutions, after
which Xerox selected the Viador E-Portal Suite. Xerox chose our software in
order to provide a single solution that can be used across multiple platforms
to access any corporate data source including databases, data warehouses,
desktop applications and enterprise resource planning software applications.
Viador offered Xerox comprehensive user functionality along with a 100% web
software architecture to permit Xerox to deploy the solution worldwide. The
Viador E-Portal Suite is now being used in several areas by Xerox including e-
business channel supply tracking, data warehouse access, and reporting for
customer service administration, human resources/payroll and global service.

Sales

   We sell our software primarily through our domestic direct sales
organization, with sales professionals located in eight regions in the United
States including the North Atlantic, Rocky Mountain, Southeast, Eastern,
Pacific Northwest, South Central, Western and Great Lakes regions. The field
sales force is complemented by direct telesales and telemarketing
representatives based at our headquarters in San Mateo, California. As of June
30, 1999, we employed 16 commission-based sales people. Technical sales support
is provided by sales engineers located in several of the field offices. We
currently intend to add a significant number of sales representatives and sales
engineers in other domestic locations. We use distributors in the Netherlands,
Germany, United Kingdom, Canada, Hong Kong and Japan and plan to expand our
distributor channel to other international markets. See "Risk Factors--Our
growth is dependent upon the successful development of our direct sales model."

   Since our products affect users throughout the customer's organization, our
sales effort involves multiple decision makers and frequently includes the
chief financial officer, vice president of finance, controller and vice
president of purchasing. While the average sales cycle varies substantially
from customer to customer, for initial sales it has generally ranged from three
to nine months. Our sales cycle is affected by seasonal fluctuations as a
result of our customers' fiscal year budgeting cycles and slow summer
purchasing patterns overseas. We typically receive a substantial portion of our
orders in the last two weeks of each fiscal quarter because our customers often
delay purchases of products to the end of the quarter. Also, we expect our
revenue to be higher in the fourth quarter than in other quarters of the year.
Implementation of additional components of our software and broader rollout to
additional users within the organization generally occur over multiyear
periods.

Marketing

   Our marketing efforts are directed at promoting our enterprise information
portal product family, building a leadership position by defining the EIP
market space and increasing our market share in that market. Our marketing
programs are targeted at both mid- to executive-level information technology
professionals as well as line-of-business executives and are focused on
creating awareness of, and generating interest in, our software.

   We engage in a variety of marketing activities, including developing and
executing joint marketing strategies designed to leverage our existing
strategic relationships, managing and maintaining our web site, issuing
newsletters and direct mailings, e-marketing campaigns, creating and placing
advertisements in various media, conducting aggressive public relations
campaigns, and establishing and maintaining close relationships with recognized
industry analysts. We are an active participant in technology-related
conferences and demonstrate our products at trade shows targeted at information
technology audiences. Our marketing campaigns are tightly synchronized with our
sales force to ensure appropriate follow up with sales leads.

                                       41
We expect to grow our sales and marketing staff significantly. We believe
that demand is increasing, and will continue to increase, for web enterprise
information access software and services, such as those sold by us. We may not
be able to expand our sales and marketing staff, either domestically or
internationally, to take advantage of any increase in demand for web enterprise
information portals. Our failure to expand our sales and marketing organization
or other distribution channels could materially adversely affect our business.
See "Risk Factors--Our business will suffer if we do not retain and expand our
customer base."

Product Development

   Our development staff is responsible for enhancing our existing products and
expanding our product line. We believe that a technically skilled, quality
oriented and highly productive software development organization will be a key
component of the continued success of our new product offerings. We expect that
we will increase our product development expenditures substantially in the
future.

   Our current product development activities focus on product enhancements to
the Viador E-Portal Suite and the integration of external services and partner
technology. These development efforts may not be completed within our
anticipated schedules, and if completed, they may not have the features
necessary to make them successful in the marketplace. Delays or problems in the
development or marketing of product enhancements or new products could result
in a material adverse effect on our business. See "Risk Factors--Our market
changes rapidly due to changing technology and evolving industry standards, and
our future success will depend on our ability to effectively respond to these
changes" and "--Our plan to sell products as an internet-based application
service provider may fail."

Competition

   The market for our products is intensely competitive, subject to rapid
change and significantly affected by new product introductions and other market
activities of industry participants. Our primary source of direct competition
comes from independent software vendors of corporate portal software, and from
providers of business intelligence tools that have or may be developing
business intelligence portal products. We also face indirect competition from
potential customers' internal development efforts.

   Our major competitors in the corporate portal field tend to be early stage
private companies. In addition, several major business intelligence vendors
have introduced business intelligence portal products as a way to integrate
their business intelligence tools. At least one enterprise resource planning
company has introduced a portal (Peoplesoft) and we expect more will do so.
These companies may begin to sell their product along with their enterprise
resource planning application suites. We also expect to face competition from
new entrants. Most of the major enterprise resource planning providers and
larger business intelligence tools providers have a significantly installed
customer base and have the opportunity to offer additional products to those
customers as additional components of their respective enterprise resource
planning application suites or business intelligence tools.

   We believe that the principal competitive factors considered in selecting
enterprise information portal solutions are comprehensive access to existing IT
infrastructure, security, scalability, personalization and filtering
capabilities and an installed referenceable base of customers. We believe that
our ability to access a wide variety of data sources is a major benefit to
existing and future customers. The corporate portals are targeted at providing
access to unstructured data in the form of websites and documents, while the
business intelligence portals are targeted at integrating and accessing
structured data, and the enterprise resource planning portals are targeted at
individual applications.

   Many of our competitors in both the business intelligence and enterprise
resource planning markets have longer operating histories, significantly
greater financial, technical, marketing and other resources, significantly
greater name recognition and a larger installed base of customers. Moreover, a
number of our competitors, particularly major enterprise resource planning
vendors, have well-established relationships with our current

                                       42
and potential customers as well as with systems integrators and other vendors
and service providers. In addition, these competitors may be able to respond
more quickly to new or emerging technologies and changes in customer
requirements, or to devote greater resources to the development, promotion and
sale of their products, than we can.

   It is also possible that new competitors, alliances among competitors or
other third parties may emerge and rapidly acquire significant market share. We
expect that competition in our markets will increase as a result of
consolidation and the formation of alliances in the industry. Increased
competition may result in price reductions, reduced gross margins and loss of
market share, any of which could materially adversely affect our business. We
may be unable to compete successfully against current or future competitors and
the competitive pressures we face may materially adversely affect our business.
See "Risk Factors--We may not be able to successfully compete against our
current and future competitors, which could adversely affect our business" and
"--If important strategic relationships are discontinued for any reason, there
may be a material adverse effect on our business, results of operations and
financial condition."

Intellectual Property Rights

   Our success depends upon our proprietary technology. We rely primarily on a
combination of patent, copyright, trade secret and trademark laws,
confidentiality procedures, contractual provisions and other similar measures
to protect our proprietary information. For example, we license rather than
sell our software to customers and require licensees to enter into license
agreements that impose certain restrictions on licensees' ability to utilize
the software. We currently hold two U.S. patents, but we have no patents or
patent applications pending in any foreign countries. There can be no assurance
that any of our patents, copyrights or trademarks will not be challenged or
invalidated.

   As part of our confidentiality procedures, we enter into non-disclosure
agreements with certain of our employees, directors, contractors, consultants,
corporate partners, customers and prospective customers. We also enter into
license agreements with respect to our technology, documentation and other
proprietary information. Those licenses are generally non-transferable and have
a perpetual term. Despite our best efforts to protect our proprietary rights,
unauthorized parties may attempt to copy or otherwise obtain and use our
products or technology that we consider proprietary and third parties may
attempt to develop similar technology independently. In particular, we provide
our licensees with access to object code versions of our software, and other
proprietary information underlying our licensed software. Policing unauthorized
use of our products is difficult, particularly because the global nature of the
internet makes it difficult to control the ultimate destination or security of
software or other data transmitted. While we are unable to determine the extent
to which piracy of our software exists, we expect software piracy to be a
persistent problem. In addition, effective protection of proprietary rights may
be unavailable or limited in certain countries. The laws of some foreign
countries do not protect our proprietary rights to the same extent as do the
laws of the United States. Overall, the protection of our proprietary rights
may not be adequate and our competitors may independently develop similar
technology.

   We are not aware that our products, trademarks, copyrights or other
proprietary rights infringe the proprietary rights of third parties. Third
parties may assert infringement claims against us in the future with respect to
current or future products. Further, we expect that software product developers
will increasingly be subject to infringement claims as the number of products
and competitors in our industry segment grows and the functionality of products
in different industry segments overlaps. From time to time, we hire or retain
employees or consultants who have worked for independent software vendors or
other companies developing products similar to those offered by us. Those prior
employers may claim that our products are based on their products and that we
have misappropriated their intellectual property. Any claims of that variety,
with or without merit, could cause a significant diversion of management
attention, result in costly and protracted litigation, cause product shipment
delays or require us to enter into royalty or licensing agreements. Those

                                       43
royalty or licensing agreements, if required, may not be available on terms
acceptable to us or at all, which would have a material adverse affect on our
business. See "Risk Factors--Our failure to adequately protect our proprietary
rights may adversely affect us."

Employees

   As of June 30, 1999, we had a total of 108 employees, including 49 people in
sales and marketing, 32 people in engineering, 16 people in operations and 11
people in finance and administration. We believe that our future success will
depend in part on our continued ability to attract, hire and retain qualified
personnel. The competition for those personnel is intense, and there can be no
assurance that we will be able to identify, attract and retain those personnel
in the future. None of our employees is represented by a labor union, and
management believes that our employee relations are good.

Facilities

   We currently lease the following facilities: our corporate headquarters in
San Mateo, California and sales offices in New York, New York, Arlington,
Virginia, League City, Texas, Huntington Beach, California, Palm Coast, Florida
and Sylvan Lake, Michigan.

Legal Proceedings

   We are not a party to any material legal proceedings.

                                       44
MANAGEMENT

Executive Officers and Directors

   The following table sets forth certain information regarding the executive
officers and directors of Viador as of July 20, 1999:
Name                     Age                                Position
----                     ---                                --------
Stan X. Wang............  37 Chief Executive Officer, President, Chairman of the Board of Directors
Jonathan M. Harding.....  46 Senior Vice President, North American Operations
Raja H. Venkatesh.......  38 Vice President and Chief Financial Officer and Secretary
Ben C. Connors..........  41 Vice President, Business Development
Steven C. Dille.........  39 Vice President, Marketing
Paul C. Vilandre........  57 Vice President
Teddy Kiang(1)..........  46 Director
Dawn G. Lepore..........  45 Director
Chong Sup Park(2).......  51 Director
Virginia M.
 Turezyn(1)(2)..........  41 Director
----------
(1) Member of Compensation Committee
(2) Member of Audit Committee

   Each director will hold office for the term described below in "--Classified
Board" and until such director's successor is elected and qualified or until
such director's earlier resignation or removal. Each officer serves at the
discretion of the Board of Directors of Viador.

   Stan X. Wang is a co-founder of Viador. Mr. Wang has served as President,
Chief Executive Officer and Chairman of the Board of Directors since Viador was
founded in December 1995. Prior to founding Viador, from January 1995 to
December 1995, Mr. Wang oversaw the data warehouse division of the RightSizing
Group, a software and services company focused on Internet, data warehouse and
large database and financial database applications where he designed and
implemented numerous large enterprise software projects. From July 1990 to
January 1995, Mr. Wang was an architect in Oracle Corporation's information
access tools group. Mr. Wang holds a B.S. in Electrical Engineering from Tsing
Hua University in China, an M.S. in Mathematics from Oregon State University
and an M.S. in Mechanical Engineering from the California Institute of
Technology.

   Jonathan M. Harding has served as Senior Vice President of North American
Operations since April 1998. Prior to joining Viador, from July 1994 to April
1998, Mr. Harding was Managing Partner at Vision Unlimited, an information
technology consulting company. Mr. Harding also served as Vice President of
Professional Services at Brock Control Systems from July 1993 to July 1994.
Previously, Mr. Harding has held senior executive positions at Computer Task
Group and Knowledge Ware. Mr. Harding holds a B.S. in Economics from SUNY-
Brockport and attended the Graduate School of Industrial Administration at
Carnegie Mellon University.

   Raja H. Venkatesh joined Viador as Vice President and Chief Financial
Officer and Secretary in June 1999. Prior to joining Viador, from August 1997
to June 1999, Mr. Venkatesh served as Corporate Treasurer at Maxtor
Corporation, a manufacturer of information storage products for desktop
computer systems. From April 1996 to August 1997, Mr. Venkatesh served as
Director of Corporate Strategy and Development at the Pacific Telesis Group.
Previously, Mr. Venkatesh served in various capacities in the Treasurer's
office of General Motors Corporation from July 1990 to March 1996. Mr.
Venkatesh holds a bachelor's degree in Engineering from the Regional
Engineering College in India and an M.B.A. from the Darden Graduate School of
Business Administration at the University of Virginia.

                                       45
Ben C. Connors is a co-founder of Viador. Mr. Connors has served as Vice
President of Business Development since November 1998. Mr. Connors served as
Chief Operating Officer from July 1997 to November 1998 and as Vice President
of Sales and Marketing from January 1996 to July 1997. Prior to joining Viador,
from November 1995 to Jan 1996, Mr. Connors served as Chief Executive Officer
of Quadsoft, Inc., a custom software development and outsourcing company, which
he also co-founded. Mr. Connors also served as Vice President of Sales and
Marketing for The RightSizing Group from May 1994 to November 1995. Previously,
Mr. Connors held sales and marketing management positions with The ASK Group,
Oracle Corporation and Hewlett-Packard Company. Mr. Connors holds a B.S. in
Mechanical Engineering from Stanford University and a M.B.A. from Harvard
Business School.

   Steven C. Dille has served as Vice President of Marketing since December
1997. Prior to joining Viador, from February 1992 to November 1997, Mr. Dille
served in the marketing division at Sybase, Inc., a global independent software
company, most recently as director of data warehousing. Previously, Mr. Dille
has held marketing and technology leadership positions at Hewlett-Packard
Company, NCR and as an independent consultant. Mr. Dille holds a B.S. in
Computer Science and Mathematics from the University of Pittsburgh and a M.B.A.
in Marketing and Finance from The University of Chicago.

   Paul C. Vilandre has served as Vice President since November 1997 and
previously served as Chief Financial Officer and Secretary. Prior to joining
Viador, from January 1996 to August 1996, Mr. Vilandre served as Vice President
of Finance and Chief Financial Officer of Metra Corporation and from September
1993 to August 1995, he served as Vice President of Finance and Chief Financial
Officer of Axil Computers, Inc. Mr. Vilandre was a professor in finance at San
Jose State University before joining Viador. Previously, Mr. Vilandre held
financial management positions at Intel Corporation, Digital Equipment
Corporation and IBM Corporation. Mr. Vilandre has served as Area Vice President
and National Director for the Financial Executives Institute, an international
organization of senior financial officers. Mr. Vilandre holds a B.A. in
Accounting from Loyola College and an M.B.A. from Harvard Business School.

   Teddy Kiang has served as a director since April 1997. Mr. Kiang is a
Managing Director of Crosslink Technology Partners, an early stage venture
capital firm, specializing in funding and developing healthcare, network and
information technology ventures. From July 1990 to September 1995, Mr. Kiang
was the program director and a business development executive for the Point-of-
Care Coagulation product system at Boeringer Mannheim Corporation, a
biotechnology firm. From August 1980 to July 1990, Mr. Kiang served as a
project manager in the Medical Products Group at Hewlett Packard Laboratories.
Mr. Kiang serves on the Board of Directors of two privately-held companies as
the investment representative of Standard Foods Taiwan, Ltd., a publicly traded
company in Taiwan. He also serves as a special advisor to the Chairman of
AboveNet Communications, Inc. Mr. Kiang holds an M.S. in Chemistry from
Columbia University and a Ph.D. in Chemical Physics from Stanford University.

   Dawn G. Lepore has served as a director since July 1999. Ms. Lepore is
Executive Vice President and Chief Information Officer and a member of the
Management Committee of The Charles Schwab Corporation, where she has served
for over fifteen years in various capacities. Prior to her appointment as Chief
Information Officer at Schwab in 1993, Ms. Lepore served as Senior Vice
President of Information Technology at Schwab, responsible for the development
of a wide range of systems to support Schwab's growing product offerings and
client base. She also led a strategic initiative for redesigning Schwab's
entire technology platform. Prior to joining Schwab in 1983, Ms. Lepore was
employed at Informatics, an information consulting firm in San Francisco. Ms.
Lepore serves on the Board of Directors of Times Mirror Company, a publisher of
several daily news and specialty publications. Ms. Lepore holds a B.A. in Music
from Smith College.

   Chong Sup Park has served as a director since March 1999. Mr. Park is
President and Chief Executive Officer of Hyundai Electronics America. Prior to
joining Hyundai, from February 1995 to August 1996, Mr. Park served as
President and Chief Executive Officer of Maxtor Corporation, a manufacturer of
information storage products for desktop computer systems. From July 1993 to
January 1995, Mr. Park served as President and Chief Executive Officer of Axil
Computers Inc. Mr. Park serves on the board of directors of several companies,
both publicly and privately held, which include Maxtor Corporation, Artecon,
Inc.,

                                       46
ChipPAC, Inc. and MMC, Inc. Mr. Park holds a B.A. in Business Administration
from Yonsei University in Seoul, Korea, a M.B.A. from The University of Chicago
and a doctorate in Business Administration from Nova Southeastern University.

   Virginia Turezyn has served as a director since September 1998. Ms. Turezyn
co-founded Information Technology Ventures, a venture capital firm in September
1994 and has served as a General Partner since its founding. From April 1982 to
September 1994, she served in a variety of capacities at Morgan Stanley &
Company, Inc., including most recently as Vice President in the Venture Capital
Group. Ms. Turezyn serves on the Board of Directors of several privately held
companies. Ms. Turezyn holds a B.A. in Accounting from Queens College and is a
Certified Public Accountant.

Director Compensation

   Directors of Viador receive $1,000 for each board meeting attended if in
person and $500 if attended telephonically. Directors also receive $500 for
each board committee meeting attended if in person and $250 if attended
telephonically. All directors are also reimbursed for their reasonable out-of-
pocket expenses in serving on the Board of Directors or any Committee thereof.
Directors are eligible to receive equity incentives in the form of stock option
grants or direct stock issuances under our 1999 Stock Incentive Plan.

Classified Board

   Our certificate of incorporation provides for a classified Board of
Directors consisting of three classes of directors, each serving staggered
three-year terms. As a result, a portion of our Board of Directors will be
elected each year. To implement the classified structure, prior to the
consummation of the offering, one of the nominees to the board will be elected
to one-year terms, two will be elected to two-year terms and two will be
elected to three-year terms. Thereafter, directors will be elected for three-
year terms. Virginia M. Turezyn has been designated a Class I director whose
term expires at the 2000 annual meeting of stockholders. Dawn G. Lepore and
Chong Sup Park have been designated Class II directors whose terms expire at
the 2001 annual meeting of stockholders. Stan X. Wang and Teddy Kiang have been
designated Class III directors whose terms expire at the 2002 annual meeting of
stockholders. See "Description of Capital Stock--Certain Anti-takeover, Limited
Liability and Indemnification Provisions."

Board Committees

   The audit committee of the Board of Directors consists of Chong Sup Park and
Virginia Turezyn. The audit committee reviews our financial statements and
accounting practices, makes recommendations to the Board of Directors regarding
the selection of independent auditors and reviews the results and scope of our
annual audit and other services provided by our independent auditors.

   The compensation committee of the Board of Directors consists of Teddy Kiang
and Virginia Turezyn. The compensation committee makes recommendations to the
Board of Directors concerning salaries and incentive compensation for our
officers and employees and administers our employee benefit plans.

Compensation Committee Interlocks and Insider Participation

   None of the members of the compensation committee of the Board of Directors
was at any time since the formation of Viador an officer or employee of Viador.
No executive officer of Viador serves as a member of the Board of Directors or
compensation committee of any entity that has one or more executive officers
serving on our Board of Directors or our compensation committee of the Board of
Directors.

                                       47
EXECUTIVE COMPENSATION AND OTHER INFORMATION

Summary of Cash and Certain Other Compensation

   The following table sets forth the compensation earned by our Named
Executive Officers which include our Chief Executive Officer and our four other
executive officers whose salary and bonus for services rendered to Viador for
the fiscal year ended December 31, 1998 exceeded $100,000. Since such date,
certain of these executive officers have been succeeded by new persons and we
have added additional officers. For a list of our current executive officers
and certain members of senior management, see "Management."

                           SUMMARY COMPENSATION TABLE
Long Term
                                                1998 Annual       Compensation
                                                Compensation         Awards
                                              ------------------- ------------
                                                                   Number of
                                                                   Securities
                                                                   Underlying
Name and Principal Position(s)                 Salary      Bonus   Options(1)
------------------------------                --------    ------- ------------
Stan X. Wang................................. $100,000    $20,000   898,783
 President, Chief Executive Officer and
 Chairman of the Board of Directors
Jonathan M. Harding(2)....................... $ 73,920(3)      --    79,167
 Senior Vice President of North American
 Operations
Ben Connors.................................. $105,000    $ 5,000        --
 Vice President of Business Development
Steven C. Dille.............................. $115,000    $ 7,500    58,334
 Vice President of Marketing
Paul C. Vilandre............................. $100,000    $15,000    96,222
 Vice President of Administration and
  Secretary
----------
(1) The options listed in the table were originally granted under either our
    1996 Stock Option/Stock Issuance Plan or our Amended and Restated 1997
    Stock Option/Stock Issuance Plan. These options will be incorporated into
    the new 1999 Stock Incentive Plan, but will continue to be governed by
    their existing terms. See "--Executive Compensation and Other Information--
    Employee Benefit Plans."

(2) Mr. Harding has served as Senior Vice President of North American
    Operations since April 1998.

(3) Mr. Harding's annual base salary was $115,000.

                                       48
Stock Options and Stock Appreciation Rights

   The following table sets forth information regarding option grants to each
of the Named Executive Officers during the fiscal year ended December 31, 1998.
No stock appreciation rights were granted to the Named Executive Officers
during the 1998 fiscal year.

                    Stock Option Grants in Fiscal Year 1998
Potential
                                                                        Realizable Value
                                                                           at Assumed
                                                                         Annual Rates of
                          Number of  Percentage of                         Stock Price
                         Securities  Total Options Exercise             Appreciation for
                         Underlying   Granted to     Price                 Option Term
                           Options   Employees in  Per Share Expiration -----------------
          Name           Granted (#)     1998       ($/Sh)      Date       5%       10%
          ----           ----------- ------------- --------- ---------- -------- --------
Stan X. Wang............       --          --           --         --         --       --
Ben Connors.............       --          --           --         --         --       --
Jonathan Harding........   79,167        11.7%       $0.24    4/19/08   $ 11,949 $ 30,281
Steven Dille............       --          --           --         --         --       --
Paul C. Vilandre........       --          --           --         --         --       --
Aggregated Option/SAR Exercises and Fiscal Year-End Values

   The following table sets forth information with respect to the Named
Executive Officers concerning their exercise of stock options during the fiscal
year ended December 31, 1998 and the number of shares subject to unexercised
stock options held by them as of the close of such fiscal year. No stock
appreciation rights were exercised during the fiscal year ended December 31,
1998, and no stock appreciation rights were outstanding at the close of such
year.

            Aggregated Option Exercises in 1998 and Year-End Values
Number of Securities      Value of Unexercised
                                                    Underlying Unexercised     In-the-Money Options
                            Shares                    Options at Year-End         at Year-End(1)
                         Acquired on     Value     ------------------------- -------------------------
Name                     Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
----                     ------------ ------------ ----------- ------------- ----------- -------------
Stan X. Wang............      --           --        898,783         --      $3,623,893        --
Ben Connors.............      --           --             --         --              --        --
Jonathan Harding........      --           --         79,167         --      $  304,000        --
Steven Dille............      --           --         58,334         --      $  224,000        --
Paul C. Vilandre........      --           --         96,222         --      $  369,490        --
----------
(1) Based upon the fair market value per share at the close of the 1998 fiscal
    year of $4.08 less the exercise price payable per share.

Employee Benefit Plans

 1999 Stock Incentive Plan.

   Introduction. The 1999 Stock Incentive Plan is intended to serve as the
successor program to both our 1996 Stock Option/Stock Issuance and 1997 Stock
Option/Stock Issuance Plans. The 1999 plan was adopted by the board on July 20,
1999 and has not yet been approved by our stockholders. The 1999 plan will
become effective when the underwriting agreement for this offering is signed.
At that time, all outstanding options under our existing 1996 and 1997 plans
will be transferred to the 1999 plan, and no further option grants will be made
under the 1996 or 1997 plans. The transferred options will continue to be
governed by their existing terms, unless our compensation committee decides to
extend one or more features of the 1999 plan to those options. Except as
otherwise noted below, the transferred options have substantially the same
terms as will be in effect for grants made under the discretionary option grant
program of our 1999 plan.

                                       49
Share Reserve. 12,292,000 shares of our common stock have been authorized
for issuance under the 1999 plan. This share reserve consists of the number of
shares we estimate will be carried over from the 1996 and 1997 plans plus an
additional increase of approximately 3,000,000 shares. The share reserve under
our 1999 plan will automatically increase on the first trading day in January
each calendar year, beginning with calendar year 2000, by an amount equal to
four percent of the total number of shares of our common stock outstanding on
the last trading day of December in the prior calendar year, but in no event
will this annual increase exceed 3,000,000 shares. In addition, no participant
in the 1999 plan may be granted stock options or direct stock issuances for
more than 1,000,000 shares of common stock in total in any calendar year.

   Programs. Our 1999 plan has five separate programs:

  .  the discretionary option grant program, under which eligible individuals
     in our employ may be granted options to purchase shares of our common
     stock at an exercise price not less than the fair market value of those
     shares on the grant date;

  .  the stock issuance program, under which eligible individuals may be
     issued shares of common stock directly, upon the attainment of
     performance milestones or the completion of a specified period of
     service or as a bonus for past services;

  .  the salary investment option grant program, under which our executive
     officers and other highly compensated employees may be given the
     opportunity to apply a portion of their base salary each year to the
     acquisition of special below market stock option grants;

  .  the automatic option grant program, under which option grants will
     automatically be made at periodic intervals to eligible non-employee
     board members to purchase shares of common stock at an exercise price
     equal to the fair market value of those shares on the grant date; and

  .  the director fee option grant program, under which our non-employee
     board members may be given the opportunity to apply a portion of any
     director or retainer fee otherwise payable to them in cash each year to
     the acquisition of special below-market option grants.

   Eligibility. The individuals eligible to participate in our 1999 plan
include our officers and other employees, our board members and any consultants
we hire.

   Administration. The discretionary option grant and stock issuance programs
will be administered by our compensation committee. This committee will
determine which eligible individuals are to receive option grants or stock
issuances under those programs, the time or times when the grants or issuances
are to be made, the number of shares subject to each grant or issuance, the
status of any granted option as either an incentive stock option or a
nonstatutory stock option under the federal tax laws, the vesting schedule to
be in effect for the option grant or stock issuance and the maximum term for
which any granted option is to remain outstanding. The compensation committee
will also have the authority to select the executive officers and other highly
compensated employees who may participate in the salary investment option grant
program in the event that program is put into effect for one or more calendar
years.

   Plan Features. Our 1999 plan will include the following features:

  .  The exercise price for any options granted the plan may be paid in cash
     or in shares of our common stock valued at fair market value on the
     exercise date. The option may also be exercised through a same-day sale
     program without any cash outlay by the optionee.

  .  The compensation committee will have the authority to cancel outstanding
     options under the discretionary option grant program, including any
     transferred options from our 1996 or 1997 plans, 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 our common
     stock on the new grant date.

  .  Stock appreciation rights may be issued under the discretionary option
     grant program. These rights will provide the holders with the election
     to surrender their outstanding options for a payment from

                                       50
us equal to the fair market value of the shares subject to the
     surrendered options less the exercise price payable for those shares. We
     may make the payment in cash or in shares of our common stock. None of
     the options under our 1996 or 1997 plan have any stock appreciation
     rights.

   Change in Control. The 1999 plan will include the following change in
control provisions which may result in the accelerated vesting of outstanding
option grants and stock issuances:

  .  In the event that we are acquired by merger or asset sale, each
     outstanding option under the discretionary option grant program which is
     not to be assumed by the successor corporation will immediately become
     exercisable for all the option shares, and all outstanding unvested
     shares will immediately vest, except to the extent our repurchase rights
     with respect to those shares are to be assigned to the successor
     corporation.

  .  The compensation committee will have complete discretion to grant one or
     more options which will become exercisable for all the option shares in
     the event those options are assumed in the acquisition but the
     optionee's service with us or the acquiring entity is subsequently
     terminated. The vesting of any outstanding shares under our 1999 plan
     may be accelerated upon similar terms and conditions.

  .  The compensation committee may grant options and structure repurchase
     rights so that the shares subject to those options or repurchase rights
     will immediately vest in connection with a successful tender offer for
     more than fifty percent of our outstanding voting stock or a change in
     the majority of our board through one or more contested elections. Such
     accelerated vesting may occur either at the time of such transaction or
     upon the subsequent termination of the individual's service.

  .  The options currently outstanding under our 1996 and 1997 plans will
     immediately vest in the event we are acquired, unless those options are
     assumed by the acquiring entity or our repurchase rights with respect to
     any unvested shares subject to those options are assigned to such
     entity. However, several options outstanding under the 1996 and 1997
     plans contain additional acceleration provisions. Some of those options
     will vest up to 50% of the unvested shares immediately upon the
     acquisition, whether or not those options are assumed, and other of
     those options will immediately vest upon an involuntary termination of
     the optionee's employment within 18 months following an acquisition in
     which those options are assumed.

   Salary Investment Option Grant Program. In the event the compensation
committee decides to put this program into effect for one or more calendar
years, each of our executive officers and other highly compensated employees
may elect to reduce his or her base salary for the calendar year by an amount
not less than $10,000 nor more than $50,000. Each selected individual who makes
such an election will automatically be granted, on the first trading day in
January of the calendar year for which his or her salary reduction is to be in
effect, an option to purchase that number of shares of common stock determined
by dividing the salary reduction amount by two-thirds of the fair market value
per share of our common stock on the grant date. The option will have exercise
price per share equal to one-third of the fair market value of the option
shares on the grant date. As a result, the option will be structured so that
the fair market value of the option shares on the grant date less the exercise
price payable for those shares will be equal to the amount of the salary
reduction. The option will become exercisable in a series of twelve equal
monthly installments over the calendar year for which the salary reduction is
to be in effect.

   Automatic Option Grant Program. Each individual who first becomes a non-
employee board member at any time after the effective date of this offering
will receive an option grant to purchase 15,000 shares of common stock on the
date such individual joins the board. In addition, on the date of each annual
stockholders meeting held after the effective date of this offering, each non-
employee board member who is to continue to serve as a non-employee board
member, including each of our current non-employee board members, will
automatically be granted an option to purchase 5,000 shares of common stock,
provided such individual has served on the board for at least six months.

                                       51
Each automatic grant will have an exercise price per share equal to the fair
market value per share of our common stock on the grant date and will have a
term of 10 years, subject to earlier termination following the optionee's
cessation of board service. The option will be immediately exercisable for all
of the option shares; however, we may repurchase, at the exercise price paid
per share, any shares purchased under the option which are not vested at the
time of the optionee's cessation of board service. The shares subject to each
initial 15,000-share automatic option grant will vest in a series of six
successive semi-annual installments upon the optionee's completion of each six-
month of board service over the thirty-six-month period measured from the grant
date. However, the shares will immediately vest in full upon certain changes in
control or ownership or upon the optionee's death or disability while a board
member. The shares subject to each annual 5,000-share automatic grant will be
fully-vested when granted.

   If the financial accounting treatment for non-employee director stock
options proposed in the March 31, 1999 Exposure Draft of the Financial
Accounting Standards Board under APB Opinion No. 25 is adopted, then following
changes shall be made to the foregoing provisions of the Automatic Option Grant
Program:

  .  The 15,000-share option grant shall not be made to a newly-elected or
     appointed non-employee Board member until the first Annual Stockholders
     Meeting held more than twelve months after the date of his or her
     initial election or appointment to the Board. At that annual meeting,
     the non-employee Board member shall also receive an option grant for an
     additional 5,000 shares under the annual grant portion of the Automatic
     Option Grant Program.

  .  One-third of the shares subject to the 15,000-share option grant shall
     be immediately vested at the time of the option grant, and the remaining
     shares shall vest in a series of four successive equal semi-annual
     installments upon the Optionee's completion of each six-month period of
     Board service over the twenty-four-month period measured from the grant
     date.

   Director Fee Option Grant Program. If this program is put into effect in the
future, then each non-employee board member may elect to apply all or a portion
of any cash retainer fee for the calendar year to the acquisition of a below-
market option grant. The option grant will automatically be made on the first
trading day in January in the calendar year for which the non-employee board
member would otherwise be paid the cash retainer fee in the absence of his or
her election. The option will have an exercise price per share equal to one-
third of the fair market value of the option shares on the grant date, and the
number of shares subject to the option will be determined by dividing the
amount of the retainer fee applied to the program by two-thirds of the fair
market value per share of our common stock on the grant date. As a result, the
option will be structured so that the fair market value of the option shares on
the grant date less the exercise price payable for those shares will be equal
to the portion of the director or retainer fee applied to that option. The
option will become exercisable in a series of twelve equal monthly installments
over the calendar year for which the election is in effect. However, the option
will become immediately exercisable for all the option shares upon the death or
disability of the optionee while serving as a board member.

   Additional Program Features. Our 1999 plan will also have the following
features:

  .  Outstanding options under the salary investment and director fee option
     grant programs will immediately vest if we are acquired by a merger or
     asset sale or if there is a successful tender offer for more than 50% of
     our outstanding voting stock or a change in the majority of our board
     through one or more contested elections.

  .  Limited stock appreciation rights will automatically be included as part
     of each grant made under the salary investment option grant program and
     the automatic and director fee option grant programs, and these rights
     may also be granted to one or more officers as part of their option
     grants under the discretionary option grant program. Options with this
     feature may be surrendered to us upon the successful completion of a
     hostile tender offer for more than 50% of our outstanding voting stock.
     In return for the surrendered option, the optionee will be entitled to a
     cash distribution from us in an amount per surrendered option share
     based upon the highest price per share of our common stock paid in that
     tender offer.

                                       52
.  The board may amend or modify the 1999 plan at any time, subject to any
     required stockholder approval. The 1999 plan will terminate no later
     than June 15, 2009.

 1999 Employee Stock Purchase Plan.

   Introduction. Our 1999 Employee Stock Purchase Plan was adopted by the board
on July 20, 1999 and has not yet been approved by our stockholders. The plan
will become effective immediately upon the signing of the underwriting
agreement for this offering. The plan is designed to allow our eligible
employees and the eligible employees our participating subsidiaries to purchase
shares of common stock, at semi-annual intervals, with their accumulated
payroll deductions.

   Share Reserve. 300,000 shares of our common stock will initially be reserved
for issuance. The reserve will automatically increase on the first trading day
in January each calendar year, beginning in calendar year 2000, by an amount
equal to one percent of the total number of outstanding shares of our common
stock on the last trading day in December in the prior calendar year. In no
event will any such annual increase exceed 500,000 shares.

   Offering Periods. The plan will have a series of successive offering
periods, each with a maximum duration of 24 months. The initial offering period
will start on the date the underwriting agreement for the offering covered is
signed and will end on the last business day in October 2001. The next offering
period will start on the first business day in November 2001, and subsequent
offering periods will set by our compensation committee.

   Eligible Employees. Individuals scheduled to work more than 20 hours per
week for more than 5 calendar months per year may join an offering period on
the start date or any semi-annual entry date within that period. Semi-annual
entry dates will occur on the first business day of May and November each year.
Individuals who become eligible employees after the start date of an offering
period may join the plan on any subsequent semi-annual entry date within that
offering period.

   Payroll Deductions. A participant may contribute up to 15% of his or her
cash earnings through payroll deductions, and the accumulated deductions will
be applied to the purchase of shares on each semi-annual purchase date. The
purchase price per share will be equal to 85% of the fair market value per
share on the participant's entry date into the offering period or, if lower,
85% of the fair market value per share on the semi-annual purchase date. Semi-
annual purchase dates will occur on the last business day of April and October
each year. However, a participant may not purchase more than 750 shares on any
purchase date, and not more than 75,000 shares may be purchased in total by all
participants on any purchase date. Our compensation committee will have the
authority to change these limitations for any subsequent offering period.

   Reset Feature. If the fair market value per share of our common stock on any
purchase date is less than the fair market value per share on the start date of
the two-year offering period, then that offering period will automatically
terminate, and a new two-year offering period will begin on the next business
day. All participants in the terminated offering will be transferred to the new
offering period.

   Change in Control. Should we be acquired by merger or sale of substantially
all of our assets or more than fifty percent of our voting securities, then all
outstanding purchase rights will automatically be exercised immediately prior
to the effective date of the acquisition. The purchase price will be equal to
85% of the market value per share on the participant's entry date into the
offering period in which an acquisition occurs or, if lower, 85% of the fair
market value per share immediately prior to the acquisition.

   Plan Provisions. The following provisions will also be in effect under the
plan:

  .  The plan will terminate no later than the last business day of October
     2009.

  .  The board may at any time amend, suspend or discontinue the plan.
     However, certain amendments may require stockholder approval.

                                       53
Change of Control Arrangements

   A limited number of employees have stock options that will partially
accelerate upon a change of control. Typically, one half of the person's
options will vest upon a change of control.

Limitation of Liability and Indemnification

   Our certificate of incorporation eliminates, to the fullest extent permitted
by Delaware law, liability of a director to Viador or our stockholders for
monetary damages for conduct as a director. Although liability for monetary
damages has been eliminated, equitable remedies such as injunctive relief or
rescission remain available. In addition, a director is not relieved of his or
her responsibilities under any other law, including the federal securities
laws.

   Our certificate of incorporation requires us to indemnify our directors to
the fullest extent permitted by Delaware law. We have also entered into
indemnification agreements with each of our directors. We believe that the
limitation of liability provisions in our certificate of incorporation and
indemnification agreements may enhance our ability to attract and retain
qualified individuals to serve as directors. See "Description of
Capital Stock."

                                       54
CERTAIN TRANSACTIONS

   Since June 30, 1999, there has not been, nor is there currently proposed,
any transaction or series of similar transactions to which we were or are to be
a party in which the amount involved exceeded or will exceed $60,000 and in
which any director, executive officer, holder of more than 5% of our common
stock or any member of the immediate family of any of the foregoing persons had
or will have a direct or indirect material interest other than (A) compensation
agreements and other arrangements, which are described where required in
"Management" and (B) the transactions described below.

Preferred Stock Financings

   Since May 23, 1997, we have issued 5,990,385 shares of our Series C
Preferred Stock at a price of $2.434 per share, 6,632,716 shares of our Series
B Preferred Stock at a price of $1.30 per share and 3,703,764 shares of our
Series A Preferred Stock at a price of $1.031 per share in a series of private
financings. We issued these securities pursuant to preferred stock purchase
agreements and an investors' rights agreement on substantially similar terms
(except for terms relating to date and price), under which we made standard
representations, warranties, and covenants, and which provided the purchasers
thereunder with registration rights, information rights, and rights of first
refusal, among other provisions standard in venture capital financings. Each
share of our preferred stock will automatically convert into 0.417 shares of
our common stock upon the completion of the offering. The purchasers of our
preferred stock included, among others, the following holders of 5% or more of
our common stock, directors, and entities associated with directors:
Shares of Preferred Stock
                                   Purchased
                          ------------------------------
                          Series
Name                         A    Series B     Series C
----                      ------- ---------    ---------
Stan X. Wang............   11,737        --           --
Ruby McGrath............   17,606        --           --
Y. P. Cheng.............  176,056        --           --
Teddy Kiang & Sylvia Te-
 Yi Kiang...............   58,685        --      246,508
Crosslink Semiconductor,
 Inc. (Taiwan)(1).......  586,854        --           --
Information Technology
 Ventures II, L.P.(2)...       -- 4,230,770(3) 1,027,116(3)
Standard Foods Taiwan,
 Ltd.(4)................       -- 1,185,996           --
----------
(1) Teddy Kiang, a director of Viador, is the investment representative of
    Crosslink Semiconductor, Inc. (Taiwan).

(2) Virginia Turezyn, a director of Viador, is a principal member of ITV
    Management II, LLC, the general partner of Information Technology Ventures
    II, L.P.

(3) Includes shares held by ITV Affiliates Fund II, L.P., an entity affiliated
    with Information Technology Ventures II, L.P.

(4) Teddy Kiang, a director of Viador, is the investment representative for
    Standard Foods Taiwan, Ltd.

Amended and Restated Investors' Rights Agreement

   Pursuant to the terms of an Amended and Restated Investors' Rights Agreement
dated May 21, 1999, by and among Viador and the holders of our preferred stock,
the investors acquired certain registration rights with respect to their
capital stock of Viador. At any time after three-months following our initial
public offering, holders of more than 40% of the outstanding preferred stock
may require us to effect registration under the Securities Act covering at
least 40% of the outstanding Registrable Securities (as defined in the
Investors' Rights Agreement), subject in either case to the board of directors'
right to defer such registration for a period up to 60 days; provided, however,
that Viador is obligated to effect only two such registrations. In addition, if
we propose to issue equity securities under the Securities Act for our own
account in an underwritten public offering, then any of the investors has a
right (subject to quantity limitations determined by the underwriters) to
request that Viador register such investor's Registrable Securities. All
registration expenses incurred in connection with the first two demand
registrations described above and all piggyback registrations will be

                                       55
borne by Viador. The participating investors will pay for underwriting
discounts and commissions incurred in connection with any such registrations.
We have agreed to indemnify the investors against certain liabilities in
connection with any registration effected pursuant to the foregoing Investors'
Rights Agreement, including Securities Act liabilities.

Amended and Restated Right of First Refusal and Co-Sale Agreement

   Pursuant to the terms of an Amended and Restated Right of First Refusal and
Co-Sale Agreement dated May 21, 1999 by and among Viador and certain investors,
such investors acquired certain first refusal and co-sale rights with respect
to their shares of preferred stock. Subject to certain customary exceptions, in
the event that any of our Management Members (defined in the Amended and
Restated Right of First Refusal and Co-Sale Agreement) or Major Shareholders
(defined in the Amended and Restated Right of First Refusal and Co-Sale
Agreement) propose to sell shares of common stock, such investor may elect to
participate pro-rata in such sale or purchase the shares being sold on the same
terms and conditions as the seller. These rights will terminate upon completion
of this offering.

Amended and Restated Voting Agreement

   Pursuant to an Amended and Restated Voting Agreement dated May 21, 1999 by
and among Viador, the Common Shareholders (defined in the Amended and Restated
Voting Agreement) and the holders of our Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock, one of our directors is elected
by the holders of the common stock and the holders of our Series A Preferred
Stock and another of our directors is elected by the holders of our Series B
Preferred Stock. This agreement shall terminate upon the completion of this
offering.

Certain Business Relationships

   Dawn G. Lepore, a director of Viador, also serves as Executive Vice
President and Chief Information Officer and a member of the Management
Committee of the Charles Schwab Corporation. Sales to Schwab accounted for more
than 5% of Viador's gross revenues during fiscal year 1998.

Indemnification Agreements

   We have entered into indemnification agreements with each of our directors
and officers. See "Management--Executive Compensation and Other Information--
Limitation of Liability and Indemnification."

                                       56
PRINCIPAL STOCKHOLDERS

   The following table sets forth certain information as of June 30, 1999
(except as indicated in the footnotes below) with respect to the beneficial
ownership of our common stock by:

  .  each person known by us to own beneficially more than 5%, in the
     aggregate, of the outstanding shares of our common stock,

  .  the directors and Named Executive Officers of Viador who hold securities
     of Viador, and

  .  all executive officers and directors as a group.

   Unless otherwise indicated, the address for each shareholder is c/o Viador
Inc., 167 Second Avenue, San Mateo, CA 94401. Except as indicated by footnote,
we understand that the persons named in the table below have sole voting and
investment power with respect to all shares shown as beneficially owned by
them, subject to community property laws where applicable.

   Shares of common stock subject to options, which are currently exercisable
or exercisable within 60 days of June 30, 1999, are deemed outstanding for
computing the percentages of the person holding such options but are not deemed
outstanding for computing the percentages of any other person. The number of
shares reflects the number of shares of common stock in the aggregate assuming
the conversion of the preferred stock. Each share of preferred stock is
currently convertible into one share of common stock. Percentage ownership is
based on 11,803,134 shares of common stock and preferred stock, as converted,
outstanding as of June 30, 1999. See "Description of Capital Stock--Preferred
Stock." "Beneficial Ownership of Shares Before the Offering" reflects the
beneficial ownership of the common stock, assuming the conversion of the
preferred stock. "Beneficial Ownership of Shares After the Offering" reflects
the beneficial ownership of common stock, assuming the conversion of the
preferred stock and after giving effect to the Offering.
Beneficial        Beneficial
                                             Ownership of      Ownership of
                                           Shares Before the Shares After the
                                               Offering          Offering
                                           ----------------- -----------------
         Name of Beneficial Owner           Number   Percent  Number   Percent
         ------------------------          --------- ------- --------- -------
Entities affiliated with Information
 Technology Ventures(1)................... 2,190,786  18.6%  2,190,786
Entities affiliated with Mitsui & Co.,
 Ltd.(2)..................................   606,207   5.1%    606,207
Jia-Bao Chu(3)............................ 1,326,838  11.2%  1,326,838
Kin Liu(4)................................ 1,088,928   9.2%  1,088,928
Stan X. Wang(5)........................... 2,120,318  18.0%  2,120,318
Jonathan M. Harding(6)....................   158,334   1.3%    158,334
Raja H. Venkatesh(7)......................   100,000     *     100,000
Ben C. Connors(8).........................   530,735   4.5%    530,735
Steven C. Dille(9)........................   125,001   1.1%    125,001
Paul C. Vilandre(10)......................    96,222     *      96,222
Teddy Kiang(11)...........................   160,498   1.4%    160,498
Dawn G. Lepore(12)........................    --        --      --
Chong Sup Park(13)........................    20,834     *      20,834
Virginia Turezyn(14)......................    --        --      --
All directors and executive officers as a
 group (ten persons)(15).................. 3,311,942  28.1%  3,311,942
----------
  * Less than 1%.

 (1) Stock consists of 4,075,585 shares of Series B Preferred Stock and 989,441
     shares of Series C Preferred Stock held by Information Technology Ventures
     II, L.P. and 155,185 shares of Series B Preferred Stock and 37,675 shares
     of Series C Preferred Stock held by ITV Affiliates Fund II, L.P. Ms.
     Turezyn, a director of Viador, is a principal member of ITV Management II,
     LLC, the general partner of Information Technology Ventures II, L.P. and
     ITV Affiliates Fund II, L.P. The address for Information Technology
     Ventures is 3000 Sand Hill Road, Suite 1-280, Menlo Park, California
     94025.

                                       57
(2) Stock consists of 290,979 shares of Series A Preferred Stock held by
     Mitsui & Co. (USA), Inc., 775,945 shares of Series A Preferred Stock held
     by Mitsui & Co., Ltd., 193,986 shares of Series A Preferred Stock held by
     Mitsui Comtek Corporation and 193,986 shares of Series A Preferred Stock
     held by MVC Global Japan Fund I. The address for Mitsui & Co. (USA), Inc.
     is 200 Park Avenue, New York, NY 10166.

 (3) Stock consists of 800,094 shares of common stock held directly by Mr. Chu,
     of which 130,198 shares are subject to repurchase by Viador, and 526,744
     shares of common stock subject to options exercisable within 60 days of
     June 30, 1999.

 (4) Stock consists of 702,680 shares of common stock held directly by Mr. Liu,
     of which 123,257 shares are subject to repurchase by Viador, and 386,248
     shares of common stock subject to options exercisable within 60 days of
     June 30, 1999.

 (5) Stock consists of 1,216,644 shares of common stock held directly by Mr.
     Wang, of which 173,618 shares are subject to repurchase by Viador, 11,737
     shares of Series A Preferred Stock held directly by Mr. Wang and 898,783
     shares of common stock subject to options exercisable within 60 days of
     June 30, 1999.

 (6) Stock consists of 158,324 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999.

 (7) Stock consists of 100,000 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999.

 (8) Stock consists of 530,735 shares of common stock held directly by Mr.
     Connors of which 53,678 shares are subject to repurchase by Viador.

 (9) Stock consists of 125,001 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999.

(10) Stock consists of 96,222 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999, of which 4,972 shares were
     exercised by Mr. Vilandre on February 5, 1999 and 2,084 shares were
     exercised by Mr Vilandre on June 11, 1999. Of these shares, 4,972 shares
     are held directly by Mr. Vilandre and 2,084 shares are held by his wife
     and children.

(11) Stock consists of 58,685 shares of Series A Preferred Stock and 246,508
     shares of Series C Preferred Stock held directly by Mr. Kiang and his wife
     and 33,334 shares of common stock subject to options exercisable within 60
     days of June 30, 1999. Excludes 1,185,996 shares of Series B Preferred
     Stock, as converted, and warrants to purchase 46,875 shares of common
     stock at an exercise price of $0.72 per share held by Standard Foods
     Taiwan, Ltd; 226,854 shares of Series A Preferred Stock, as converted,
     held by Crosslink Semiconductor, Inc. (Taiwan); 120,000 shares of Series A
     Preferred Stock, as converted, held by Eric S. Chen; 120,000 shares of
     Series A Preferred Stock, as converted, held by Ju-Liang Chen; 120,000
     shares of Series A Preferred Stock held by Paula Chen; 58,685 shares of
     Series A Preferred Stock and 246,508 shares of Series C Preferred Stock
     held by the Chen Living Trust dated 7/22/96; 58,685 shares of Series A
     Preferred Stock and 246,508 shares of Series C Preferred Stock held by the
     Cheng Living Trust dated 8/8/95; 58,685 shares of Series A Preferred
     Stock, as converted, and 246,508 shares of Series C Preferred Stock held
     by Ter-Fung Tsao and 58,685 shares of Series A Preferred Stock, as
     converted, and 246,508 shares of Series C Preferred Stock held by Wendy
     Te-Hau Wang, for all of whom Crosslink Technology Partners LLC holds a
     power of attorney. Mr. Kiang, a director of Viador, is a Managing Director
     of Crosslink Technology Partners LLC and the investment representative for
     Standard Foods Taiwan, Ltd. and Crosslink Semiconductor, Inc. (Taiwan).
     Mr. Kiang disclaims beneficial ownership of the shares of preferred and/or
     common stock held by Crosslink Semiconductor, Inc. (Taiwan), Standard
     Foods Taiwan, Ltd., Eric S. Chen, Ju-Liang Chen, Paula Chen, Chen Living
     Trust dated 7/22/96, Cheng Living Trust dated 8/8/95, Ter Fung Tsao and
     Wendy Te-Hua Wang, except to the extent of his pecuniary interest therein.

(12) As of June 30, 1999, Ms. Lepore does not own any stock or hold any options
     to purchase common stock. At the meeting of our board of directors held on
     July 20, 1999, Ms. Lepore was granted options to purchase 40,000 shares of
     common stock.

                                       58
(13) Stock consists of 20,834 shares of common stock subject to options
     exercisable within 60 days of June 30, 1999.

(14) Excludes an aggregate of 5,257,886 shares of preferred stock, as
     converted, held by Information Technology Ventures II, L.P. and ITV
     Affiliates Fund II, L.P. Ms. Turezyn, a director of Viador, is a principal
     member of ITV Management II, LLC, the general partner of Information
     Technology Ventures II, L.P. and ITV Affiliates Fund II, L.P. Ms. Turezyn
     disclaims beneficial ownership of the shares held by Information
     Technology Ventures II, L.P. and ITV Affiliates Fund II, L.P.

(15) See footnotes 5 through 13 above. Includes options exercisable for
     1,425,450 shares of common stock within 60 days of June 1999 under the
     1997 Stock Option/Stock Issuance Plan.

                                       59
DESCRIPTION OF CAPITAL STOCK

   Upon the closing of this offering, the authorized capital stock of Viador
will consist of 100,000,000 shares of common stock, $0.001 par value per share,
and 10,000,000 shares of preferred stock, $0.001 par value per share.

Common Stock

   As of June 30, 1999, 4,915,433 shares of our common stock were outstanding
and held of record by 120 stockholders. After this offering,
shares will be outstanding. Concurrently with the completion of this offering,
each outstanding share of our preferred stock will be exchanged for and
converted into one share of our common stock. The following description of
rights assumes this conversion.

   Holders of common stock are entitled to receive dividends as may from time
to time be declared by our Board of Directors out of funds legally available
therefor. See "Dividend Policy." Holders of common stock are entitled to one
vote per share on all matters on which the holders of common stock are entitled
to vote and do not have any cumulative voting rights. Holders of common stock
have no preemptive, conversion, redemption or sinking fund rights. In the event
of a liquidation, dissolution or winding up of Viador, holders of common stock
are entitled to share equally and ratably in the assets of Viador, if any,
remaining after the payment of all our liabilities and the liquidation
preference of any then outstanding class or series of preferred stock. The
outstanding shares of common stock are, and the shares of common stock offered
by us in this offering when issued will be, fully paid and nonassessable. The
rights, preferences and privileges of holders of common stock are subject to
any series of preferred stock that we may issue in the future, as described
below.

Preferred Stock

   Our Board of Directors has the authority to issue preferred stock in one or
more series and to fix the number of shares constituting any such series and
the preferences, limitations and relative rights, including dividend rights,
dividend rate, voting rights, terms of redemption, redemption price or prices,
conversion rights and liquidation preferences of the shares constituting any
series, without any further vote or action by our stockholders. The issuance of
preferred stock by our Board of Directors could adversely affect the rights of
holders of common stock.

   The potential issuance of preferred stock may have the effect of delaying or
preventing a change in control of Viador, may discourage bids for our common
stock at a premium over the market price of the common stock and may adversely
affect the market price of, and the voting and other rights of the holders of,
common stock. Immediately after this offering there will be no shares of
preferred stock outstanding, and we have no current plans to issue shares of
preferred stock.

Certain Anti-takeover, Limited Liability and Indemnification Provisions

   Effect of Delaware Anti-takeover Statute. We are subject to Section 203 of
the Delaware General Corporation Law, as amended, which, subject to certain
exceptions, prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years
following the date that such stockholder became an interested stockholder,
unless:

  .  prior to such date, the board of directors of the corporation approved
     either the business combination or the transaction that resulted in the
     stockholder becoming an interested stockholder;

  .  upon consummation of the transaction that resulted in the stockholder
     becoming an interested stockholder, the interested stockholder owned at
     least 85% of the voting stock of the corporation outstanding at the time
     the transaction commenced, excluding for purposes of determining the
     number of shares outstanding those shares owned

    .  by persons who are directors and also officers and

                                       60
.  by employee stock plans in which employee participants do not have
       the right to determine confidentially whether shares held subject to
       the plan will be tendered in a tender or exchange offer; or

  .  on or subsequent to such date, the business combination is approved by
     the board of directors and authorized at an annual or special meeting of
     stockholders, and not by written consent, by the affirmative vote of at
     least 66 2/3% of the outstanding voting stock that is not owned by the
     interested stockholder.

   Section 203 defines business combinations to include:

  .  any merger or consolidation involving the corporation or any majority-
     owned subsidiary of the corporation and any other person or entity;

  .  subject to certain exceptions, any sale, transfer, pledge or other
     disposition of 10% or more of the assets of the corporation or any
     majority-owned subsidiary of the corporation involving the interested
     stockholder;

  .  subject to certain exceptions, any transaction that results in the
     issuance or transfer by the corporation or any majority-owned subsidiary
     of the corporation of any stock of the corporation to the interested
     stockholder;

  .  any transaction involving the corporation or any majority-owned
     subsidiary of the corporation that has the effect of increasing the
     proportionate share of the stock of any class or series of the
     corporation or any majority-owned subsidiary of the corporation
     beneficially owned by the interested stockholder; or

  .  the receipt by the interested stockholder of the benefit of any loans,
     advances, guarantees, pledges or other financial benefits provided by or
     through the corporation or any majority-owned subsidiary of the
     corporation.

   In general, Section 203 defines an interested stockholder as any entity or
person beneficially owning 15% or more or the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.

   Certificate of Incorporation and Bylaw Provisions. Our certificate of
incorporation and bylaws include provisions that may have the effect of
discouraging, delaying or preventing a change in control of Viador or an
unsolicited acquisition proposal that a stockholder might consider favorable,
including a proposal that might result in the payment of a premium over the
market price for the shares held by stockholders. These provisions are
summarized in the following paragraphs.

   Classified Board of Directors. Our certificate of incorporation and bylaws
provide for our board to be divided into three classes of directors serving
staggered, three year terms. The classification of the board has the effect of
requiring at least two annual stockholder meetings, instead of one, to replace
a majority of the members of the Board of Directors. See "Management--
Classified Board."

   Supermajority Voting. Our certificate of incorporation requires the approval
of the holders of at least 66 2/3% of our combined voting power to effect
certain amendments to the certificate of incorporation or to effect any
business combination, as defined in Section 203, relating to us. Our bylaws may
be amended by either a majority of the Board of Directors, or the holders of a
majority of our voting stock, provided that certain amendments approved by
stockholders require the approval of at least 66 2/3% of our combined voting
power.

   Authorized but Unissued or Undesignated Capital Stock. Our authorized
capital stock consists of 100,000,000 shares of common stock and 10,000,000
shares of preferred stock. No preferred stock will be designated upon
consummation of this offering. After this offering, we will have outstanding
               shares of common stock. The authorized but unissued--and in the
case of preferred stock, undesignated--stock may be issued by the Board of
Directors in one or more transactions. In this regard, our certificate of
incorporation grants the Board of Directors broad power to establish the rights
and preferences of authorized

                                       61
and unissued preferred stock. The issuance of shares of preferred stock
pursuant to the Board of Director's authority described above could decrease
the amount of earnings and assets available for distribution to holders of
common stock and adversely affect the rights and powers, including voting
rights, of such holders and may have the effect of delaying, deferring or
preventing a change in control of Viador. The Board of Directors does not
currently intend to seek stockholder approval prior to any issuance of
preferred stock, unless otherwise required by law.

   Special Meetings of Stockholders. Our bylaws provide that special meetings
of stockholders of Viador may be called only by the Board of Directors, or by
the Chairman of our Board of Directors or our President.

   No Stockholder Action by Written Consent. Our certificate of incorporation
and bylaws provide that an action required or permitted to be taken at any
annual or special meeting of the stockholders of Viador may only be taken at a
duly called annual or special meeting of stockholders. This provision prevents
stockholders from initiating or effecting any action by written consent.

   Notice Procedures. Our bylaws establish advance notice procedures with
regard to all stockholder proposals to be brought before meetings of
stockholders of Viador, including proposals relating to the nomination of
candidates for election as directors, the removal of directors and amendments
to our certificate of incorporation or bylaws. These procedures provide that
notice of such stockholder proposals must be timely given in writing to the
Secretary of Viador prior to the meeting. Generally, to be timely, notice must
be received by our Secretary not less than 120 days prior to the meeting. The
notice must contain certain information specified in the bylaws.

   Other Anti-takeover Provisions. See "Management--Executive Compensation and
Other Information--Employee Benefit Plans" for a discussion of certain
provisions of the 1999 Stock Incentive Plan which may have the effect of
discouraging, delaying or preventing a change in control of Viador or
unsolicited acquisition proposals.

   Limitation of Director Liability. Our certificate of incorporation limits
the liability of our directors (in their capacity as directors but not in their
capacity as officers) to Viador or our stockholders to the fullest extent
permitted by Delaware law. Specifically, directors of Viador will not be
personally liable for monetary damages for breach of a director's fiduciary
duty as a director, except for liability:

  .  for any breach of the director's duty of loyalty to Viador or our
     stockholders;

  .  for acts or omissions not in good faith or which involve intentional
     misconduct or a knowing violation of law;

  .  under Section 174 of the Delaware General Corporation Law, which relates
     to unlawful payments of dividends or unlawful stock repurchases or
     redemptions; or

  .  for any transaction from which the director derived an improper personal
     benefit.

   Indemnification Arrangements. Our bylaws provide that the directors and
officers of Viador shall be indemnified and provide for the advancement to them
of expenses in connection with actual or threatened proceedings and claims
arising out of their status as such to the fullest extent permitted by the
Delaware General Corporation Law. Prior to consummation of this offering, we
will enter into indemnification agreements with each of our directors and
executives officers that will provide them with rights to indemnification and
expense advancement to the fullest extent permitted under the Delaware General
Corporation Law.

Transfer Agent and Registrar

   The transfer agent and registrar for the common stock is Boston Equiserve.

                                       62
SHARES ELIGIBLE FOR FUTURE SALE

   Prior to this offering, there has not been any public market for our common
stock. Future sales of substantial amounts of common stock in the public
market, or the prospect of such sales, could adversely affect prevailing market
prices.

   Upon completion of this offering,           shares of common stock will be
outstanding. Of these shares, all of the shares sold in this offering will be
freely tradable without restriction under the Securities Act, unless purchased
by an "affiliate" of Viador, as that term is defined in Rule 144. The remaining
          shares outstanding after completion of this offering are "restricted
securities" as defined in Rule 144 and may be sold in the public market only if
registered under the Securities Act or if they qualify for an exemption from
registration, including an exemption pursuant to Rule 144.

   Holders of approximately 98% our outstanding common stock as of the date
hereof have agreed that, subject to certain exceptions and consents, during the
period beginning from the date of this prospectus, and continuing to and
including the date 180 days after the date of this prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any securities of Viador.
Upon expiration of these agreements,           shares will be eligible for
immediate resale in the public market subject to the volume and other
limitations of Rule 144, and          shares will be eligible for immediate
resale pursuant to Rule 144(k) without such limitations, unless they are held
by affiliates of Viador. Of such shares, approximately           will be
eligible for immediate resale in the public market pursuant to Rule 144 subject
to the volume and manner of sale limitations in Rule 144 and         shares
will be eligible for resale without such volume limitations.

   In general under Rule 144, a person, including an "affiliate" of Viador, who
has beneficially owned restricted shares for at least one year is entitled to
sell within any three-month period a number of shares that does not exceed the
greater of 1% of the then outstanding shares of common stock (approximately
        shares immediately following this offering) or the average weekly
trading volume of the common stock during the four calendar weeks preceding
such sale. Sales under Rule 144 are subject to certain manner of sale
limitations, notice requirements and the availability of current public
information about Viador. Rule 144(k) provides that a person who is not an
"affiliate" of the issuer at any time during the three-months preceding a sale
and who has beneficially owned shares for at least two years is entitled to
sell those shares at any time without compliance with the public information,
volume limitation, manner of sale and notice provisions of Rule 144.

   As of June 30, 1999, options to purchase 786,417 shares of common stock were
outstanding under the Amended and Restated 1997 Stock Option/Stock Issuance
Plan. Simultaneously with the completion of this offering, options to purchase
7,500,000 shares of common stock will be granted under the 1999 Stock Incentive
Plan. We intend to file as soon as practicable following completion of this
offering a registration statement on Form S-8 under the Securities Act covering
shares of common stock reserved for issuance under the 1999 Stock Incentive
Plan. Based on the number of options expected to be outstanding upon completion
of this offering and shares reserved for issuance under the 1999 Stock
Incentive Plan, the registration statement would cover          shares. See
"Management--Executive Compensation and Other Information--Employee Benefit
Plans". The registration statement will become effective immediately upon
filing, whereupon, subject to the satisfaction of applicable exercisability
periods, Rule 144 volume limitations applicable to affiliates and, in certain
cases, the agreements with the underwriters referred to above, shares of Common
Stock to be issued upon exercise of outstanding options granted pursuant to the
1999 Stock Incentive Plan, to the extent that such shares were held by
affiliates, will be available for immediate resale in the open market.

                                       63
UNDERWRITING

   The underwriters of this offering named below, for whom Bear, Stearns & Co.
Inc., CIBC World Markets Corp. and U.S. Bancorp Piper Jaffray Inc. are acting
as representatives, have severally agreed with Viador, subject to the terms and
conditions of the Underwriting Agreement (the form of which has been filed as
an exhibit to the Registration Statement on Form S-1 of which this prospectus
is a part), to purchase from Viador the aggregate number of shares of common
stock set forth opposite their respective names below:
Underwriter                                                  Number of Shares
   -----------                                                  ----------------
Bear, Stearns & Co. Inc. ...................................
   CIBC World Markets Corp. ...................................
   U.S. Bancorp Piper Jaffray Inc. ............................
                                                                      ----
     Total.....................................................
                                                                      ====
The nature of the respective obligations of the underwriters is such that
all of the shares of common stock (other than shares of common stock covered by
the over-allotment option described below) must be purchased if any are
purchased. Those obligations are subject, however, to various conditions,
including the approval of certain matters by counsel. We have agreed to
indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act, and, where such indemnification is unavailable, to
contribute to payments that the underwriters may be required to make in respect
of such liabilities.

   We have been advised that the underwriters propose to offer the shares of
common stock directly to the public initially at the public offering price set
forth on the cover page of this prospectus and to certain selected dealers at
such price less a concession not to exceed $      per share, that the
underwriters may allow, and such selected dealers may reallow, a concession to
certain other dealers not to exceed $     per share and that after the
commencement of this offering, the public offering price and the concessions
may be changed.

   We have granted to the underwriters an option to purchase in the aggregate
up to              additional shares of common stock to be sold in this
offering solely to cover over-allotments, if any. The option may be exercised
in whole or in part at any time within 30 days after the date of this
prospectus. To the extent the option is exercised, the underwriters will be
severally committed, subject to certain conditions, including the approval of
certain matters by counsel, to purchase the additional shares of common stock
in proportion to their respective purchase commitments as indicated in the
preceding table.

   The underwriters have reserved for sale at the initial public offering price
up to 5% of the number of shares of common stock offered hereby for sale to
certain directors, officers, other employees, business affiliates and related
persons of Viador who have expressed an interest in purchasing shares. The
number of shares available for sale to the general public will be reduced to
the extent any reserved shares are purchased. Any reserved shares not so
purchased will be offered by the underwriters on the same basis as the other
shares offered hereby.

   Viador and our executive officers, directors and our current stockholders,
holding approximately 98% of our common stock, have agreed that, subject to
certain limited exceptions, for a period of 180 days after the date of this
prospectus, without the prior written consent of Bear, Stearns & Co. Inc., they
will not, directly or indirectly, issue, sell, offer or agree to sell or
otherwise dispose of any shares of common stock (or securities convertible
into, exchangeable for or evidencing the right to purchase shares of common
stock.)

   Prior to this offering, there has been no public market for the common
stock. Consequently, the initial public offering price will be determined
through negotiations among Viador and the representatives of the underwriters.
Among the factors considered in making such determination were our financial
and operating history and condition, market valuations of other companies
engaged in activities similar to ours, our prospects and prospects for the
industry in which we do business in general, our management, prevailing equity
market conditions and the demand for securities considered comparable to those
of Viador.

                                       64
In order to facilitate this offering, certain persons participating in this
offering may engage in transactions that stabilize, maintain or otherwise
affect the price of the common stock during and after this offering.
Specifically, the underwriters may over-allot or otherwise create a short
position in the common stock for their own account by selling more shares of
common stock, than have been sold to them by Viador. The underwriters may elect
to cover any such short position by purchasing shares of common stock in the
open market or by exercising the over-allotment option granted to the
underwriters. In addition, the underwriters may stabilize or maintain the price
of the common stock by bidding for or purchasing shares of common stock in the
open market and may impose penalty bids, under which selling concessions
allowed to syndicate members or other broker-dealers participating in this
offering are reclaimed if shares of common stock previously distributed in this
offering are repurchased in connection with stabilization transactions or
otherwise. The effect of these transactions may be to stabilize or maintain the
market price of the common stock at a level above that which might otherwise
prevail in the open market. The imposition of a penalty bid may also affect the
price of the common stock to the extent that it discourages resales thereof. No
representation is made as to the magnitude or effect of any such stabilization
or other transactions. Such transactions may be effected on the Nasdaq National
Market or otherwise and, if commenced, may be discontinued at any time.

                                       65
LEGAL MATTERS

   The validity of the issuance of the common stock offered in this offering
will be passed upon for us by Brobeck, Phleger & Harrison LLP, Palo Alto,
California. Brobeck, Phleger & Harrison LLP and certain attorneys currently
affiliated with Brobeck, Phleger & Harrison LLP currently hold an aggregate of
86,442 shares of our capital stock and a warrant to purchase an additional
12,500 shares of our capital stock. Certain legal matters in connection with
this offering will be passed upon for the underwriters by Latham & Watkins, San
Francisco.

                                    EXPERTS

   The Financial Statements and Schedule of Viador as of December 31, 1997 and
1998 and for each of the years in the three-year period ended December 31,
1998, have been included herein and in the registration statement in reliance
upon the report of KPMG LLP, independent auditors, appearing elsewhere herein,
and upon the authority of said firm as experts in accounting and auditing.

                             ADDITIONAL INFORMATION

   Viador has filed with the Securities and Exchange Commission, Washington,
D.C. 20549, a Registration Statement on Form S-1 under the Securities Act with
respect to the common stock offered in this offering. This prospectus omits
certain information set forth in the Registration Statement and the exhibits
and schedules thereto. For further information with respect to Viador and the
common stock offered in this offering, reference is made to such Registration
Statement, exhibits and schedules. Statements contained in this prospectus as
to the contents of any contract or other document referred to are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. After consummation of this offering we will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and in accordance therewith, will be required to file annual and quarterly
reports, proxy statements and other information with the Commission. The
Registration Statement, including the exhibits and schedules filed therewith,
as well as such reports and other information filed by us may be inspected
without charge at the public reference facilities maintained by the Securities
and Exchange Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the regional offices of the Securities and Exchange Commission
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials may be obtained from the Public Reference Section of
the Securities and Exchange Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates and from the Commission's Internet
Web site at http://www.sec.gov.

                                       66
VIADOR INC.

                         INDEX TO FINANCIAL STATEMENTS
Page
                                                                           ----
Form of Independent Auditors' Report.....................................  F-2

Balance Sheets as of December 31, 1997 and 1998 and June 30, 1999
 (unaudited).............................................................  F-3

Statements of Operations for the years ended December 31, 1996, 1997, and
 1998, and for the six months ended June 30, 1998 and 1999 (unaudited)...  F-4

Statements of Stockholders' Equity (Deficit) for the years ended December
 31, 1996, 1997 and 1998, and for the six months ended June 30, 1999
 (unaudited).............................................................  F-5

Statements of Cash Flows for the years ended December 31, 1996, 1997, and
 1998, and for the six months ended June 30, 1998 and 1999 (unaudited)...  F-6

Notes to Financial Statements............................................  F-7
F-1
FORM OF INDEPENDENT AUDITORS' REPORT

   When the events referred to in Note 8(c) to the Financial Statements have
been consummated, we will be in a position to render the following report.

                                          /s/ KPMG LLP
The Board of Directors
Viador Inc.:

   We have audited the accompanying balance sheets of Viador Inc. (the
Company), as of December 31, 1997 and 1998, and the related statements of
operations, stockholders' equity (deficit), and cash flows for each of the
years in the three-year period ended December 31, 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 audits.

   We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes 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 financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

   In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Viador Inc., as of December
31, 1997 and 1998, and the results of its operations and its cash flows for
each of the years in the three-year period ended December 31, 1998, in
conformity with generally accepted accounting principles.

Mountain View, California
June 11, 1999, except as to note 8,
 which is as of July 20, 1999

                                      F-2
VIADOR INC.

                                 BALANCE SHEETS
                       (In thousands, except share data)
December 31,       June 30, 1999
                                          ----------------  -------------------
                                           1997     1998     Actual   Pro Forma
                                          -------  -------  --------  ---------
                                                               (unaudited)
ASSETS
Current assets:
  Cash and cash equivalents.............. $ 1,029  $ 4,181  $ 14,259    $
  Accounts receivable, net of allowance
   of $50,000, $53,000 and $90,000 in
   fiscal 1997, 1998 and June 30, 1999...   1,473    2,404     3,085
  Other current assets...................       9       --       410
                                          -------  -------  --------    ----
    Total current assets.................   2,511    6,585    17,754
Property and equipment, net..............     341      577       917
Other assets.............................      66       23       198
                                          -------  -------  --------    ----
                                          $ 2,918  $ 7,185  $ 18,869    $
                                          =======  =======  ========    ====
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable....................... $   222  $   542  $    686    $
  Accrued liabilities....................     525      565     1,779
  Deferred revenue.......................   2,081    2,707     3,120
                                          -------  -------  --------    ----
    Total liabilities....................   2,828    3,814     5,585
                                          -------  -------  --------    ----
Commitments
Stockholders' equity:
  Convertible preferred stock, $0.001 par
   value; actual--10,000,000, 12,500,000,
   and 25,000,000 shares authorized as of
   December 31, 1997 and 1998, and June
   30, 1999, respectively; 3,703,764,
   10,336,478, and 16,326,863 shares
   issued and outstanding as of December
   31, 1997 and 1998, and June 30, 1999,
   respectively; aggregate liquidation
   preference of $3,819, $12,441, and
   $27,022 as of December 31, 1997 and
   1998, and June 30, 1999, respectively;
   pro forma--    shares authorized; no
   shares issued and outstanding.........       4       10        16      --
  Common stock, $0.001 par value;
   actual--16,666,667, 16,666,667, and
   20,833,333 shares authorized as of
   December 31, 1997 and 1998, and June
   30,1999 respectively; 4,612,512,
   4,664,589, and 4,915,433 shares issued
   and outstanding as of December 31,
   1997 and 1998 and June 30, 1999,
   respectively; pro forma--    shares
   authorized;     shares issued and
   outstanding...........................      11       11        12
  Additional paid-in capital............. 3,679    14,209   30,257
  Deferred stock-based compensation......      --   (1,148)   (2,029)
  Treasury stock.........................      --      (34)      (34)
  Notes receivable from stockholders.....    (138)      --        --      --
  Accumulated deficit....................  (3,466)  (9,677)  (14,938)
                                          -------  -------  --------    ----
    Total stockholders' equity...........      90    3,371    13,422
                                          -------  -------  --------    ----
                                          $ 2,918  $ 7,185  $ 18,869    $
                                          =======  =======  ========    ====
See accompanying notes to financial statements.

                                      F-3
VIADOR INC.

                            STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
Six Months Ended
                              Years Ended December 31,         June 30,
                              ---------------------------  ------------------
                               1996      1997      1998      1998      1999
                              -------- --------  --------  --------  --------
                                                              (unaudited)
Revenue:
  License.................... $    56  $    839  $  2,283  $  1,142  $  2,131
  Services...................     941       743     1,542       612     1,159
                              -------  --------  --------  --------  --------
    Total revenue............     997     1,582     3,825     1,754     3,290
Cost of revenue..............     314       903     1,387       640       874
                              -------  --------  --------  --------  --------
    Gross profit.............     683       679     2,438     1,114     2,416
                              -------  --------  --------  --------  --------
Operating expenses:
  Research and development...     364     1,351     2,481     1,107     1,871
  Sales and marketing........     125     1,802     4,295     1,806     4,397
  General and
   administrative............     358       936     1,365       374       996
  Amortization of stock-based
   compensation..............      --        --       445        94       529
                              -------  --------  --------  --------  --------
    Total operating
     expenses................     847     4,089     8,586     3,381     7,793
                              -------  --------  --------  --------  --------
    Operating loss...........    (164)   (3,410)   (6,148)   (2,267)   (5,377)
Interest income..............      10        68       134        32       116
Interest expense.............      --        (6)     (197)      (34)       --
                              -------  --------  --------  --------  --------
    Net loss.................  $ (154)  $(3,348)  $(6,211)  $(2,269)  $(5,261)
                              =======  ========  ========  ========  ========
Basic and diluted net loss
 per share...................  $(0.08) $  (1.34) $  (1.82) $  (0.71) $  (1.28)
                              =======  ========  ========  ========  ========
Shares used in computing
 basic and diluted net loss
 per share...................   1,993     2,495     3,416     3,177     4,126
                              =======  ========  ========  ========  ========
See accompanying notes to financial statements.

                                      F-4
VIADOR INC.

                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                       (In thousands, except share data)
Convertible                                                          Notes                     Total
                   preferred stock    Common stock    Additional   Deferred             receivable              stockholders'
                  ----------------- -----------------  paid-in   stock-based  Treasury     from     Accumulated    equity
                    Shares   Amount  Shares    Amount  capital   compensation  stock   stockholders   deficit     (deficit)
                  ---------- ------ ---------  ------ ---------- ------------ -------- ------------ ----------- -------------
Balances as of
 December 31,
 1995............         --  $ --  1,843,752   $  5   $    45     $     --    $  --       $ --      $      36    $     86
 Issuance of
  common stock to
  founders for
  cash...........         --    --    187,504     --         5           --       --         --             --           5
 Issuance of
  common stock to
  founders for
  notes..........         --    --  2,560,422      6       117           --       --       (123)            --          --
 Interest on
  notes
  receivable from
  stockholders...                                                                            (4)                        (4)
 Net loss........         --    --         --     --        --           --       --         --           (154)       (154)
                  ----------  ----  ---------   ----   -------     --------    -----       ----      ---------    --------
Balances as of
 December 31,
 1996............         --    --  4,591,678     11       167           --       --       (127)          (118)        (67)
 Stock options
  exercised......         --    --     20,834     --         1           --       --         --             --           1
 Issuance of
  Series A
  convertible
  preferred
  stock..........  3,703,764     4         --     --     3,511           --       --         --             --       3,515
 Interest on
  notes
  receivable from
  stockholders...         --    --         --     --        --           --       --        (11)            --         (11)
 Net loss........         --    --         --     --        --           --       --         --         (3,348)     (3,348)
                  ----------  ----  ---------   ----   -------     --------    -----       ----      ---------    --------
Balances as of
 December 31,
 1997............  3,703,764     4  4,612,512     11     3,679           --       --       (138)        (3,466)         90
 Stock options
  exercised......         --    --     78,996     --         8           --       --         --             --           8
 Repurchase of
  stock in
  settlement of
  notes
  receivable from
  founders.......         --    --    (26,919)              (1)          --      (34)        35             --          --
 Cancellation of
  stockholders
  notes..........         --    --         --     --        --           --       --        103             --         103
 Issuance of
  Series B
  convertible
  preferred stock
  net of $92
  issuance
  costs..........  6,632,714     6         --     --     8,524           --       --         --             --       8,530
 Deferred stock-
  based
  compensation
  related to
  stock option
  grants.........         --    --         --     --     1,593       (1,593)      --         --             --          --
 Amortization of
  stock-based
  compensation...         --    --         --     --        --          445       --         --             --         445
 Warrants for
  services
  performed......         --    --         --               88           --       --         --             --          88
 Options issued
  to
  nonemployees...         --    --         --              188           --       --         --             --         188
 Warrants issued
  in connection
  with bridge
  loan...........         --    --         --              130           --       --         --             --         130
 Net loss........         --    --         --     --        --           --       --         --         (6,211)     (6,211)
                  ----------  ----  ---------   ----   -------     --------    -----       ----      ---------    --------
Balances as of
 December 31,
 1998............ 10,336,478    10  4,664,589     11    14,209       (1,148)     (34)        --         (9,677)      3,371
 Stock options
  exercised
  (unaudited)....         --    --    250,844      1        29           --       --         --             --          30
 Issuance of
  Series C
  convertible
  preferred stock
  net of $38
  issuance costs
  (unaudited)....  5,990,385     6         --     --    14,537           --       --         --             --      14,543
 Warrants for
  services
  performed
  (unaudited)....         --               --               37           --       --         --             --          37
 Options issued
  to nonemployees
  (unaudited)....         --    --         --               35           --       --         --             --          35
 Deferred stock-
  based
  compensation
  related to
  stock option
  grants
  (unaudited)....         --    --         --            1,410       (1,410)      --         --             --          --
 Amortization of
  stock-based
  compensation
  (unaudited)....         --    --         --     --        --          529       --         --             --         529
 Net loss
  (unaudited)....                                           --           --       --         --         (5,261)     (5,261)
                  ----------  ----  ---------   ----   -------     --------    -----       ----      ---------    --------
Balances as of
 June 30, 1999
 (unaudited)..... 16,326,863  $ 16  4,915,433   $ 12   $30,257     $ (2,029)   $ (34)      $ --      $ (14,938)   $ 13,284
                  ==========  ====  =========   ====   =======     ========    =====       ====      =========    ========
See accompanying notes to financial statements.

                                      F-5
VIADOR INC.

                            STATEMENTS OF CASH FLOWS
                                 (In thousands)
Six Months ended
                                 Years Ended December 31,        June 30,
                                 --------------------------  ------------------
                                  1996     1997      1998      1998      1999
                                 ----------------  --------  --------  --------
                                                                (unaudited)
Cash flows from operating ac-
 tivities:
 Net loss......................  $ (154)  $(3,348)  $(6,211)  $(2,269)  $(5,261)
 Adjustments to reconcile net
  loss to net cash provided by
  (used in) operating
  activities:
   Cancellation of stockholder
    notes......................      --        --       103        --        --
   Issuance of options for
    services performed.........      --        --       188        --        35
   Interest on bridge loan.....      --        --        63        --        --
   Interest on note receivable
    from stockholders..........       3        11        --        --        --
   Warrants issued for services
    performed..................      --        --        88        --        37
   Amortization of discount on
    bridge loan................      --        --       130        --        --
   Amortization of deferred
    stock-based compensation...      --        --       445        93       529
   Software sold in exchange
    for property and
    equipment..................      --       (22)       --        --        --
   Depreciation and
    amortization...............      18        89       248        84       248
   Changes in operating assets
    and liabilities:
    Accounts receivable........      --    (1,342)     (931)      158      (681)
    Other assets...............     (69)       (4)       52        19      (585)
    Accounts payable and
     accrued liabilities.......     440       261       360        75     1,358
    Deferred revenue...........      11     2,020       626      (264)      413
                                 ------  --------  --------  --------  --------
    Net cash provided by (used
     in) operating activities..     249    (2,335)   (4,839)   (2,104)   (3,907)
                                 ------  --------  --------  --------  --------
Cash flows used in investing
 activities--acquisition of
 property and equipment........    (106)     (342)     (484)     (218)     (588)
                                 ------  --------  --------  --------  --------
Cash flows from financing
 activities:
 Proceeds from issuance of
  common stock.................       5         1         8         3        30
 Proceeds from issuance of
  preferred stock, net.........      --     3,515     6,467        --    14,543
 Loan from stockholder.........     100        --        --        --        --
 Proceeds from bridge loan.....      --        --     1,870     1,870        --
 Proceeds from issuance of
  warrants.....................      --        --       130       130        --
 Borrowing under line of
  credit.......................      --       100       500       500        --
 Repayment under line of
  credit.......................      --      (100)     (500)     (300)       --
 Repayment of loan from
  stockholder..................      --      (100)       --        --        --
                                 ------  --------  --------  --------  --------
    Net cash provided by
     financing activities......     105     3,416     8,475     2,203    14,573
                                 ------  --------  --------  --------  --------
Net increase (decrease) in cash
 and cash equivalents..........     248       739     3,152      (119)   10,078
Cash and cash equivalents,
 beginning of period...........      42       290     1,029     1,029     4,181
                                 ------  --------  --------  --------  --------
Cash and cash equivalents, end
 of period.....................  $  290  $  1,029  $  4,181  $    910   $14,259
                                 ======  ========  ========  ========  ========
Supplemental disclosures of
 cash flow information:
 Cash paid during period for
  interest.....................  $   --  $      6  $     22  $      9  $     --
                                 ======  ========  ========  ========  ========
 Noncash financing activities:
  Common stock issued to
   founders for note
   receivable..................  $  123  $     --  $     --  $     --  $     --
                                 ======  ========  ========  ========  ========
  Repurchase of common stock in
   settlement of notes
   receivable from
   stockholders................  $   --  $     --  $     35  $     --  $     --
                                 ======  ========  ========  ========  ========
  Preferred stock issued upon
   conversion of bridge loan
   and accrued interest........  $   --  $     --  $  2,063  $     --  $     --
                                 ======  ========  ========  ========  ========
  Deferred stock-based
   compensation................  $   --  $     --  $  1,593  $  1,114  $  1,410
                                 ======  ========  ========  ========  ========
See accompanying notes to financial statements.

                                      F-6
VIADOR INC.

                         NOTES TO FINANCIAL STATEMENTS

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

(1) Business of the Company

   Viador Inc. (the Company) was incorporated as Infospace Inc. in California
in December 1995. In January 1999, the Company changed its name to Viador Inc.
The Company develops web-based products designed to search, analyze and deliver
relevant information to users within and outside an enterprise.

(2) Summary of Significant Accounting Policies

 (a) Use of Estimates

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

 (b) Revenue Recognition

   The Company has adopted Statement of Position (SOP) 97-2, Software Revenue
Recognition, as amended by SOP 98-4. SOP 97-2 as amended, generally requires
revenue earned on software arrangements involving multiple elements to be
allocated to each element based on the relative fair value of the elements. The
adoption of SOP 97-2, as amended, did not have a significant impact on the
Company's accounting for revenues.

   In December 1998, the American Institute of Certified Public Accountants'
(AICPA) issued SOP 98-9, Software Revenue Recognition, with Respect to Certain
Arrangements, which requires recognition of revenue using the "residual method"
in a multiple element arrangement when fair value does not exist for one or
more of the delivered elements in the arrangement. Under the "residual method",
the total fair value of the undelivered elements is deferred and subsequently
recognized in accordance with SOP 97-2. The Company does not expect a material
change to its accounting for revenues as a result of the provisions of SOP 98-
9.

   The Company licenses its products to end user customers, original equipment
manufacturers (OEM) and value added resellers (VAR). Software license revenue
from sales to end users is generally recognized upon receipt of a signed
contract or purchase order and delivery of the software, provided the related
fee is fixed and determinable and collectibility of the fee is probable. All of
the contract software revenue related to arrangements that require the Company
to deliver specified additional features or upgrades is deferred until delivery
of the feature and/or upgrade has occurred. All of the contract software
revenue related to arrangements involving consulting services that are
essential to the functionality of the software at the customer site is deferred
until the consulting services have been completed and customer acceptance has
been obtained. License revenue from OEM and VAR arrangements in which the
Company earns a royalty based on a specified percentage of OEM and VAR sales to
end users incorporating the Company's software is recognized upon delivery to
the end user. Nonrefundable prepaid royalty fees received by the Company from
OEM and VAR customers are deferred and recognized as the end user sales are
reported to the Company by the OEM or VAR, unless the Company has an
arrangement to maintain the compatability of its software products with the
software products or platforms of the OEM or VAR. In that case, due to the
Company's software compatibility obligation, the prepaid royalty fees are
recognized as the end user sales are reported to the Company by the OEM or VAR
but limited to no more than the fee that would be recognizable on a cumulative
basis if the entire fee was being recognized ratably over the term of the
arrangement.

   Service revenue includes fees derived from maintenance and support,
training, installation, and consulting services. Revenue from training,
installation, and time and material consulting services are recognized when the

                                      F-7
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

related services are performed. Consulting revenue related to fixed price
arrangements are recognized upon completion and acceptance by the customer. The
Company recognizes maintenance revenue ratably over the term of the related
contract, generally 12 months. The Company typically invoices and collects
maintenance revenue on an annual basis at the anniversary date of the software
license. Billings in excess of recognized license and service revenue are
included in deferred revenue.

   Cost of service revenue includes salaries and related expenses for
consulting services, customer support, implementation and training services
organizations, costs of contracting with third parties contracted to provide
consulting services to customers. Cost of license revenue includes royalties
due to third parties for integrated technology, the cost of manuals and product
documentation, production media used to deliver our products and shipping
costs, including the costs associated with the electronic transmission of
software to new customers and an allocation of our facilities, communications
and depreciation expenses. Costs of license revenues have not been significant
to date.

 (c) Initial Public Offering and Unaudited Pro Forma Balance Sheet

   In May 1999, the Board of Directors authorized the filing of a registration
statement with the Securities and Exchange Commission ("SEC") that would permit
the Company to sell shares of the Company's common stock in connection with a
proposed initial public offering ("IPO"). Following the closing of the
Company's IPO, the number of authorized shares of convertible preferred stock
and common stock will be     and    , respectively. If the offering is
consummated under the terms presently anticipated, all the then outstanding
shares of the Company's convertible preferred stock will automatically convert
into 0.417 shares of common stock upon the closing of the proposed IPO. The
conversion of all of the convertible preferred stock has been reflected in the
accompanying unaudited pro forma consolidated balance sheet as if it had
occurred on June 30, 1999.

 (d) Cash and Cash Equivalents

   Cash and cash equivalents consists of cash and highly liquid investments
such as money market funds purchased with remaining maturities of three months
or less. The Company is exposed to credit risk in the event of default by the
financial institutions or the issuers of these investments to the extent of the
amounts recorded on the balance sheet.

 (e) Financial Instruments and Concentration of Credit Risk

   The carrying value of the Company's financial instruments, including cash
and cash equivalents and accounts receivable approximates fair market value.
Financial instruments that subject the Company to concentrations of credit risk
consist primarily of cash and cash equivalents and trade accounts receivable.

   The Company sells its products and services primarily to established
customers. Credit risk is concentrated in North America and Asia. The Company
performs ongoing credit evaluations of its customer's financial condition and,
generally, requires no collateral from its customers.

 (f) Property and Equipment

   Property and equipment are recorded at cost less accumulated depreciation
and amortization. Depreciation is calculated using the straight-line method
over the estimated useful lives of the respective assets generally three to
five years. Leasehold improvements are amortized on a straight line basis over
the shorter of the estimated useful lives of the assets or the lease term.

                                      F-8
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

 (g) Software Development Costs

   Development costs incurred in the research and development of software
products are expensed as incurred until technological feasibility in the form
of a working model has been established. As of June 30, 1999, technological
feasibility was established concurrent with the general release of the software
and therefore, no costs have been capitalized.

 (h) Impairment of Long-Lived Assets

   The Company evaluates its long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used is measured by
a comparison of the carrying amount of an asset to future undiscounted net cash
flows expected to be generated by the asset. If such assets are considered to
be impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets. Assets
to be disposed of are reported at the lower of the carrying amount of the
assets or fair value less costs to sell.

 (i) Income Taxes

   The Company utilizes the asset and liability method of accounting for income
taxes. Deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amounts
expected to be recovered.

 (j) Defined Contribution Plan

   The Company has a defined contribution retirement plan under Section 401(k)
of the Internal Revenue Code which covers substantially all employees. Eligible
employees may contribute amounts to the plan, via payroll withholding, subject
to certain limitations. Under the 401(k) plan, employees may elect to reduce
their current compensation by up to the statutorily prescribed annual limit and
to have the amount of such reduction contributed to the 401(k) plan. The 401(k)
plan permits, but does not require, additional matching contributions to the
401(k) plan by the Company on behalf of all participants in the 401(k) plan. To
date, the Company has not made any matching contributions to the 401(k) plan.

 (k) Stock-Based Compensation

   The Company uses the intrinsic-value method to account for all of its
employee stock-based compensation plans. Expense associated with stock-based
compensation is being amortized on an accelerated basis over the vesting period
of the individual award consistent with the method described in Financial
Accounting Standards Board (FASB) Interpretation No. 28.

 (l) Advertising Expense

   The cost of advertising is generally expensed as incurred. Such costs are
included in selling and marketing expense and totalled approximately $10,000,
$114,000, $273,000, $132,000, and $400,000, for the years ended December 31,
1996, 1997 and 1998, and for the six months ended June 30, 1998 and 1999,
respectively.

                                      F-9
VIADOR INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
  (Information for the six months ended June 30, 1998 and 1999 is unaudited)

 (m) Comprehensive Income

   The Company has no material components of other comprehensive income (loss)
for all periods presented.

 (n) Unaudited Interim Financial Statements

   The accompanying unaudited interim financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. In the opinion of management, the accompanying
unaudited financial statements have been prepared on the same basis as the
audited financial statements and include all adjustments, consisting only of
normal recurring adjustments, for the fair statement of the Company's
financial condition as of June 30, 1999 and its results of operations and cash
flows for the six months ended June 30, 1998 and 1999.

 (o) Net Loss Per Share

   Basic net loss per share is computed using the weighted-average number of
outstanding shares of common stock excluding shares of restricted stock
subject to repurchase summarized below. Diluted net loss per share is computed
using the weighted-average number of shares of common stock outstanding
excluding shares of restricted stock subject to repurchase and, when dilutive,
potential common shares from restricted stock options and warrants to purchase
common stock using the treasury stock method and from convertible securities
using the "as if converted" basis. The following potential common shares have
been excluded from the computation of diluted net loss per share for all
periods presented because the effect would have been antidilutive (in
thousands):
Six Months
                                                   Year Ended      Ended June
                                                  December 31,        30,
                                               ------------------ ------------
                                               1996  1997   1998  1998   1999
                                               ----- ----- ------ ----- ------
Shares issuable under stock options........... 2,365 2,823  3,045 3,315  3,287
Shares of restricted stock subject to
 repurchase................................... 2,560 1,636    765 1,209    348
Shares issuable pursuant to warrants to
 purchase common and convertible preferred
 stock........................................    --    --     90    63    102
Shares of convertible preferred stock on an
 "as if converted" basis......................    -- 3,704 10,336 3,704 16,327
The weighted-average exercise price of stock options was $0.05, $0.05 and
$0.12 for the years ended December 31, 1996, 1997, and 1998 and $0.10 and
$0.74 for the six months ended June 30, 1998 and 1999, respectively. The
weighted-average purchase price of restricted stock was $0.02 for all periods
presented. The weighted-average exercise price of the warrants was $0.70,
$0.72, and $0.89 for the year ended December 31, 1998 and for the six months
ended June 30, 1998 and 1999.

 (q) Recent Accounting Pronouncements

   In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS
No. 133 establishes accounting and reporting standards for derivative
financial instruments and hedging activities related to those instruments, as
well as other hedging activities. Because the Company does not currently hold
any derivative instruments and does not engage in hedging activities, the
Company expects that the adoption of SFAS No. 133 will not have a material
impact on its financial position, results of operations, or cash flows. The
Company will be required to adopt SFAS No. 133 in fiscal 2001.

                                     F-10
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

(3) Property and Equipment

   A summary of property and equipment consisted of the following (in
thousands):
December 31,
                                                         ------------- June 30,
                                                          1997   1998    1999
                                                         ------ ------ --------
Computers and software............................... $  387 $  608  $1,046
   Furniture and fixtures...............................     61    120     260
   Leasehold improvements...............................     --    204     214
                                                         ------ ------  ------
                                                            448    932   1,520
   Less accumulated depreciation and amortization.......    107    355     603
                                                         ------ ------  ------
                                                         $  341 $  577  $  959
                                                         ====== ======  ======
(4) Stockholders' Equity

 (a) Convertible Preferred Stock

   Convertible preferred stock outstanding as of June 30, 1999 is as follows
(in thousands):
Shares   Issued and
                                                          Designated Outstanding
                                                          ---------- -----------
Series A............................................    3,704      3,704
     Series B............................................    8,000      6,633
     Series C............................................    6,000      5,990
                                                            ------     ------
                                                            17,704     16,327
                                                            ======     ======
The rights, preferences, privileges, and restrictions of Series A and B
convertible preferred stock are as follows:

  .  Each share of Series A and B convertible preferred stock is convertible
     at the option of the holder, at any time after the date of issuance,
     into 0.417 shares of common stock, subject to adjustment for certain
     dilutive events. Each share has voting rights equal to the common stock
     on an "as-if-converted" basis.

  .  Conversion into common stock is automatic upon the closing of a public
     offering of the Company's common stock at a purchase price of not less
     than $7.42 and $12.00 per share and at an aggregate offering price of
     not less than $7,500,000 and $15,000,000 for Series A and B convertible
     preferred stock, respectively.

  .  Series A and B convertible preferred stockholders are entitled to
     noncumulative dividends of $0.10 and $0.13 per share per annum,
     respectively, when and if declared by the Company's Board of Directors.
     As of June 30, 1999, no dividends have been declared.

  .  Each share of Series A and B convertible preferred stock has a
     liquidation preference of $1.031 and $1.30 per share, respectively, plus
     any declared but unpaid dividends over holders of common stock.

     In the event of liquidation of the Company, after payment has been made
     to the holders of Series A and B convertible preferred stock of the full
     preferential amounts, any remaining assets would be distributed ratably
     amongst the common and convertible preferred stockholders in proportion
     to their common ownership on an "as if converted" basis up to a maximum
     of three times the initial preferred investment. Thereafter common
     shareholders equally divide the remaining assets.

                                      F-11
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

   In April 1998, the Company issued $2,000,000 in convertible bridge notes,
bearing 9% interest, payable to certain preferred stockholders. The full amount
of the notes plus accrued interest payable of $63,000 was converted into
2,350,559 shares of Series B preferred stock in August 1998. In conjunction
with the issuance of the convertible notes, the Company issued warrants to
purchase 62,500 common stock at an exercise price of $0.30 per share. The
$130,000 fair value assigned to the warrants and related discount on the notes
was determined using the Black-Scholes option pricing model using the following
assumptions: no dividends; contractual life of 5 years; risk-free interest rate
of 6.9%; and expected volatility of 65%. The discount on the notes payable was
amortized to interest expense over the period the notes were outstanding. The
warrants expire in April 2003 or upon the closing of an IPO, whichever occurs
first.

   On May 14, 1999, the Company issued 5,990,385 shares of Series C convertible
preferred stock for $2.434 per share resulting in gross proceeds to the Company
of approximately $14,581,000. The rights, preferences, and privileges of the
holders of Series C preferred stock are the same as the holders of Series A and
B convertible preferred stock discussed above, except that the dividend rate is
$0.15 per share, and the liquidation preference is $2.434 per share.

 (b) Stock Plan

   The Company has reserved 4,047,326 shares of common stock for issuance under
its 1997 stock option plan (the Plan). The Plan provides for the issuance of
stock purchase rights, incentive stock options, or nonstatutory stock options.

   The stock purchase rights are subject to a restricted stock purchase
agreement whereby the Company has the right to repurchase the stock upon the
voluntary or involuntary termination of the purchaser's employment with the
Company at the original issuance cost. The Company's repurchase right lapses
generally over a three year period. Through June 30, 1999, the Company has
issued 2,560,417 shares under restricted stock purchase agreements of which
347,695 are subject to repurchase at a weighted average price of $0.05 per
share. These restricted shares were issued to officers of the Company for full
recourse promissory notes with an interest rate of 9% and a term of three
years.

   The incentive stock options under the Plan can be exercised at a price of at
least 85% of the stock's fair market value on the date of grant for employees
owning less than 10% of the voting power of all classes of stock, and at least
110% of the fair market value on the date of grant for employees owning more
than 10% of the voting power of all classes of stock.

   Under the Plan, options generally expire in 10 years. However, the term of
the options may be limited to 5 years if the optionee owns stock representing
more than 10% of the voting power of all classes of stock. Vesting periods are
determined by the Company's Board of Directors and generally provide for shares
to vest ratably over a 3 to 4 year period.

   In August 1998, the Company repurchased 26,920 shares of common stock at
prices ranging from $.113 to $1.44 per share in settlement of $35,000 notes
receivable from two stockholders and forgave notes receivable from five other
stockholders totaling $103,000 for the return of 181,414 unvested stock
options. The Company recorded a $103,000 compensation charge for the
forgiveness of the notes.

   The Company issued options to purchase 94,783 shares of common stock at
exercise prices ranging from $0.05 to $0.24 to non-employees for services
performed. The fair value of the options at the vesting date was

                                      F-12
VIADOR INC.

                  NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
  (Information for the six months ended June 30, 1998 and 1999 is unaudited)

determined to be $188,000 using the Black-Scholes option pricing model using
the following assumptions: no dividends; contractual life of 10 years; risk-
free interest rate of 6.9%; and expected volatility of 65%. The fair value of
the options was charged to expense in 1998 as the related services were
performed.

   In the first six months of 1999, the Company issued options to purchase
9,358 shares of common stock at exercise prices ranging from $0.62 to $5.28 to
non-employees for services performed. The fair value of the options at the
vesting date was determined to be $35,000 using the Black-Scholes option
pricing model using the following assumptions: no dividends; contractual life
of 10 years; risk-free interest rate of 5.6%; and expected volatility of 65%.
The fair value of the options was charged to expense in 1999 as the related
services were performed.

   As of December 31, 1998, there were 396,481 additional stock options
available for grant under the Plan.

 (c) Warrants

   In 1998, the Company issued warrants to purchase 12,500 shares of common
stock at an exercise price of $0.72 per share in exchange for services. These
warrants expire upon the earlier of August 2003, or upon an IPO of the
Company's common stock. The $39,000 fair value of the warrants was determined
using the Black-Scholes option pricing model, using the following assumptions:
no dividends; contractual life of 5 years; risk-free interest rate of 6.5%;
and expected volatility of 65%. The fair value of the warrants was charged to
expense in 1998 as the related services were performed.

   In 1998, the Company issued warrants to purchase 14,760 shares of common
stock at prices ranging from $0.24 to $0.26 per share in exchange for
services. These warrants expire upon the earlier of five years from the grant
date, or upon an IPO of the Company's common stock. The $49,000 fair value of
the warrants was determined using the Black-Scholes option pricing model using
the following assumptions: no dividends; contractual life of 5 years; risk-
free interest rate of 6.5%; and expected volatility of 65%. The fair value of
the warrants was charged to expense in 1998 as the related services were
performed.

   In May 1999, the Company issued warrants to purchase 9,615 shares of Series
C preferred stock at a price of $2.434 per share in exchange for services.
These warrants expire upon the earlier of May 2003, or upon an IPO of the
Company's common stock. The $15,000 fair value of the warrants was determined
using the Black-Scholes option pricing model using the following assumptions:
no dividends; contractual life of 5 years; risk-free interest rate of 5.6%;
and expected volatility of 65%. The fair value of the warrants was charged to
expense in 1999 as the related services were performed.

   In the first six months of fiscal 1999, the Company issued 3,479 warrants
to purchase common stock at a price of $0.62 per share in exchange for
services. These warrants expire upon the earlier of five years from the grant
date, or upon an IPO of the Company's common stock. The $22,000 fair value of
the warrants was determined using the Black-Scholes option pricing model using
the following assumptions: no dividends; contractual life of 5 years; risk-
free interest rate of 5.6%; and expected volatility of 65%. The fair value of
the warrants was charged to expense in 1999 as the related services were
performed.

 (d) Stock-Based Compensation

   The Company uses the intrinsic-value method in accounting for its employee
stock-based compensation plans. Accordingly, no compensation cost has been
recognized for any of its stock options granted or restricted

                                     F-13
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

stock sold because the exercise price of each option or purchase price of each
share of restricted stock equaled or exceeded the fair value of the underlying
common stock as of the grant date for each stock option or purchase date of
each restricted stock share, except for stock options granted and restricted
stock sold from September 1998 through June 1999. With respect to the stock
options granted and restricted stock sold from September 1998 to June 1999, the
Company recorded deferred stock compensation of $3,003,000 for the difference
at the grant or issuance date between the exercise price of each stock option
granted or purchase price of each restricted share sold and the fair value of
the underlying common stock. This amount is being amortized on an accelerated
basis over the vesting period, generally 48 months. Had compensation costs been
determined in accordance with SFAS No. 123 for all of the Company's stock-based
compensation plans, net loss and basic and diluted net loss per share would
have been as follows (in thousands, except per share amounts):
Years Ended December 31,
                                                   ---------------------------
                                                    1996      1997      1998
                                                   -------- --------  --------
Net loss:
     As reported.................................. $  (154) $ (3,348) $ (6,211)
     Pro forma....................................    (154)   (3,366)   (6,389)
   Basic and diluted net loss per share:
     As reported.................................. $ (0.08) $  (1.34) $  (1.82)
     Pro forma....................................   (0.08)    (1.35)    (1.87)
The fair value of each option was estimated on the date of grant using the
minimum value method with the following weighted-average assumptions: no
dividends, risk-free interest rate of 6.6%, 6.5%, and 5.6% for fiscal 1996,
1997, and 1998, respectively, and expected life of 4.3, 4.6 and 4.1 years for
1996, 1997 and 1998, respectively.

                                      F-14
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

   A summary of the status of the Company's options under the Plan is as
follows:
Years Ended December 31,
                             -------------------------------------------------------------
                                    1996                1997                 1998
                             ------------------- -------------------- --------------------
                                       Weighted-            Weighted-            Weighted-
                                        average              average              average
                                       exercise             exercise             exercise
                              Shares     price    Shares      price    Shares      price
                             --------- --------- ---------  --------- ---------  ---------
Outstanding at beginning
    of period..............         --   $  --   2,364,583    $0.05   2,822,481    $0.05
   Granted.................  2,364,583    0.05     570,580     0.10     723,736     0.26
   Exercised...............         --      --     (20,833)    0.05     (78,990)    0.10
   Canceled................         --      --     (91,849)    0.05    (421,865)    0.05
                             ---------           ---------            ---------
   Outstanding at end of
    period.................  2,364,583    0.05   2,822,481     0.05   3,045,362     0.12
                             =========           =========            =========
   Options vested and
    exercisable at end of
    period.................         --      --     854,941     0.05   1,781,060     0.07
                             =========           =========            =========
   Weighted-average fair
    value of options
    granted during the
    period with exercise
    prices equal to fair
    value at date of
    grant..................              $0.02                $0.02                $  --
   Weighted-average fair
    value of options
    granted during the
    period with exercise
    prices less than fair
    value at date of
    grant..................              $  --                $  --                $1.73
As of December 31, 1998, the range of exercise prices and weighted-average
remaining contractual life of outstanding options were as follows:
Options outstanding          Options exercisable
                       ---------------------------------- ---------------------
                                    Weighted-
                                     average    Weighted-             Weighted-
                                    remaining    average               average
        Exercise         Number    contractual  exercise    Number    exercise
         prices        outstanding life (years)   price   exercisable   price
        --------       ----------- ------------ --------- ----------- ---------
$0.05..............  2,207,628      7.74       $0.05    1,559,203    0.05
    0.24..............    778,985      9.29        0.24      221,023    0.24
    0.62..............     58,750      9.88        0.62           --      --
                        ---------                          ---------
                        3,045,363      8.18        0.12    1,780,226    0.72
                        =========                          =========
F-15
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

(5) Income Taxes

   The differences between the income tax benefit computed at the federal
statutory rate and the Company's tax provision for all periods presented
primarily relate to net operating losses not benefited.

   The types of temporary differences that give rise to significant portions of
the Company's deferred tax assets and liabilities as of December 31, 1996,
1997, and 1998 are as follows (in thousands):
1996   1997     1998
                                 ----  -------  -------
Deferred tax assets:
     Reserves and accruals.....  $ 54      116      523
     Net operating loss and tax
      credit carryforwards.....    32    1,366    3,266
                                 ----  -------  -------
     Gross deferred tax
      assets...................    86    1,482    3,789
     Less valuation allowance..   (83)  (1,474)  (3,788)
                                 ----  -------  -------
       Total deferred tax
        assets.................     3        8        1
     Deferred tax liabilities--
      property and equipment...    (3)      (8)      (1)
                                 ----  -------  -------
       Net deferred tax
        assets.................  $ --  $    --  $    --
                                 ====  =======  =======
In light of the Company's recent history of operating losses, the Company
has provided a valuation allowance for its net deferred tax assets as it is
presently unable to conclude that it is more likely than not that the deferred
tax assets will be realized. The net change in the total valuation allowance
for the year ended December 31, 1998, was $2,314,000.

   As of December 31, 1998, the Company has net operating loss carryforwards
for federal and state income tax purposes of approximately $6,700,000 available
to reduce future income subject to income taxes. The federal net operating loss
carryforwards expire between 2012 and 2019. The state net operating loss
carryforwards expire beginning in 2004.

   As of December 31, 1998, the Company also has research credit carryforwards
for federal and state income tax purposes of approximately $210,000 and
$169,000, respectively, available to reduce future income taxes. The federal
research credit carryfoward expire beginning in 2011 through 2019. The research
credit carryforwards for state purposes carry forward indefinitely until
utilized. The Company has a foreign tax credit carryforward for federal tax
purposes in the amount of $20,000. The foreign tax credit carryforward expires
in 2002.

   Federal and state tax laws impose substantial restrictions on the
utilization of net operating loss carryforwards in the event of an "ownership
change" as defined in Section 382 of the Internal Revenue Code. If the Company
has an ownership change, utilization of the above mentioned carryforwards could
be reduced significantly.

                                      F-16
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

(6) Geographic, Segment and Significant Customer Information

   In 1998, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 131, Disclosures about Segments of an Enterprise and Related
Information. SFAS No. 131 establishes standards for the manner in which public
companies report information about operating segments in annual and interim
financial statements. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. The method
for determining what information to report is based on the way management
organizes the operating segments within the Company for making operating
decisions and assessing financial performance.

   The Company's chief operating decision-maker is considered to be the chief
executive officer (CEO). The CEO reviews financial information presented on an
entity level basis accompanied by disaggregated information about revenues by
product type and certain information about geographic regions for purposes of
making operating decisions and assessing financial performance. The entity
level financial information is identical to the information presented in the
accompanying statements of operations. Therefore, the Company has determined
that it operates in a single operating segment: Enterprise information portal
systems. The disaggregated information reviewed on a product basis by the CEO
is as follows (in thousands):
Six Months
                                                      Years Ended    Ended June
                                                      December 31,       30,
                                                    ---------------- -----------
                                                    1996 1997  1998  1998  1999
                                                    ---- ----- ----- ----- -----
Revenue
     License.......................................  56    839 2,283 1,142 2,131
     Services
      Consulting................................... 940    638 1,112   518   823
      Maintenance..................................   1    105   430    94   336
                                                    ---  ----- ----- ----- -----
                                                    997  1,582 3,825 1,754 3,290
                                                    ===  ===== ===== ===== =====
Significant customer information is as follows:
% of Total Accounts
                                    % of Total Revenue                         Receivable
                            -------------------------------------------   ---------------------
                                                          Six Months
                                                             Ended
                            Year Ended December 31,        June 30,
                            ---------------------------   -------------   December 31, June 30,
                             1996      1997      1998     1998    1999        1998       1999
                            -------   -------   -------   -----   -----   ------------ --------
Customer A..............      23%       --        --      --      --        --         --
   Customer B..............       1%       10%       11%      6%      4%       14%         6%
   Customer C..............      --        --        --      --      12%       17%         1%
   Customer D..............      43%       --        --      --      --        --         --
   Customer E..............      --         2%        5%     12%     --         1%        --
   Customer F..............      --         5%       15%     17%      3%        6%        --
   Customer G..............      18%        8%       --      --      --        --         --
   Customer H..............      --        --         6%     10%      1%        4%         1%
Revenues aggregating 4% and 6% of total revenues for the year ended December
31, 1998 and for the six months ended June 30, 1998, respectively, were
generated from customers who are also stockholders of the Company, and whose
ownership percentages ranged from 5% to 10% as of June 30, 1999.

                                      F-17
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1998 and 1999 is unaudited)

   The Company markets its products from its operations in North America.
International sales are primarily to customers in Europe and Asia Pacific.
Revenues derived from International sales were 14% and 12% for the years ended
December 31, 1997 and 1998 and 8% and 14% for the six months ended June 30,
1998 and 1999. Sales did not exceed 4% for any one country outside of North
America in any period presented.

(7) Bank Borrowing, Commitments and Contingencies

   In 1998 the Company had a $1.5 million line of credit. The contractual rate
of interest under this line of credit was 9.5%. The Company had no balances
outstanding under this line of credit at December 31, 1998.

   On March 17, 1999, the Company entered into a $2,000,000 bank line of
credit. Borrowings under the agreement bear interest of prime plus 1%. On March
17, 1999 the Company also entered into a revolving equipment loan in the amount
of $500,000. This loan bears interest at prime plus 1.5%. As of June 30, 1999,
the Company had no balances outstanding under the line of credit or the
equipment loan. The loans are based on a percentage of qualified outstanding
accounts receivable and is secured by a security interest in certain of the
Company's intellectual property.

   The Company leases its facilities and certain equipment under noncancelable
operating lease agreements expiring in the year 2000. Rent expense was
approximately $38,000, $103,000 and $312,000 for the years ended December 31,
1996, 1997 and 1998, respectively. Future minimum lease payments under
noncancelable operating leases are approximately $391,000 and $200,000 for
fiscal years 1999 and 2000, respectively.

   On April 1, 1999 the Company entered into a software marketing and
distribution agreement with a distributor located in Germany. The agreement
includes a buyout obligation that can be exercised by the distributor following
the third anniversary of the agreement if minimum sales quotas and certain
conditions have been met. As of June 30, 1999, no sales have been reported by
the distributor.

   In 1999, a third party advised the Company of objections to an advertising
campaign the Company undertook in connection with its name change. The third
party filed a complaint in California state court alleging that the Company
violated their right of publicity, the Lanham Act and unfair competition law
because of the advertising campaign. The complaint seeks an injunction against
further advertising that uses the third parties name or likeness, compensatory
damages, the Company's profits resulting from the advertising, punitive
damages, attorneys' fees and costs and interest. The Company estimates this
matter will result in a settlement of approximately $138,000 which has been
accrued as of June 30, 1999 and is reflected in the accompanying statements of
operations for the six months then ended.

(8) Subsequent Events

 (a) Employee Stock Purchase Plan

   The Company's Board of Directors adopted the Employee Stock Purchase Plan
(the Purchase Plan) on July 20, 1999 under which 300,000 shares have been
reserved for issuance. The Purchase Plan is pending approval by the
stockholders. The number of shares reserved under the Purchase Plan will
automatically increase beginning on January 1 of each year by the lesser of an
amount equal to 1% of the total number of outstanding shares, or 500,000
shares. Under the Purchase Plan, eligible employees may purchase common stock
in an amount not to exceed 15% of an employee's cash compensation. The purchase
price per share will be 85% of the common stock fair value at the lower of
certain plan defined dates.

                                      F-18
VIADOR INC.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

                       December 31, 1996, 1997, and 1998
   (Information for the six months ended June 30, 1999 and 1999 is unaudited)

 (b) 1999 Stock Incentive Plan

   The Company's Board of Directors adopted the 1999 Stock Incentive Plan (the
Incentive Plan) on July 20, 1999 under which 12,292,000 shares have been
reserved for issuance. The Directors Plan is pending approval by the
stockholders. The number of shares reserved under the Incentive Plan will
automatically increase beginning on January 1 of each year by the lessor of 4%
of the total number of shares outstanding or 3,000,000 shares. The Incentive
Plan has five separate programs which allows non-employee board members,
executive officers and other highly compensated employees to purchase shares
using a portion of their salary or retainer fee. The Incentive Plan allows
eligible employee to be issued shares of common stock directly, upon the
attainment of performance milestones or the completion of services. The
Incentive Plan also allows automatic option grants at periodic intervals to
eligible non-employee board members to purchase shares of common stock.

 (c) Reverse Stock Split and Reincorporation

   On July 28, 1999, the Board of Directors approved a 1 for 2.4 reverse stock
split of the Company's convertible preferred stock and common stock and a
reincorporation in the state of Delaware to be completed prior to the
effectiveness of the Company's IPO. The accompanying financial statements have
been retroactively restated to give effect to the reverse stock split and the
reincorporation in Delaware.

                                      F-19
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Prospective investors may rely only on the information contained in this pro-
spectus. Neither Viador Inc. nor any underwriter has authorized anyone to pro-
vide prospective investors with different or additional information. This pro-
spectus is not an offer to sell nor is it seeking an offer to buy these securi-
ties in any jurisdiction where the offer or sale is not permitted. The informa-
tion contained in this prospectus is correct only as of the date of this pro-
spectus, regardless of the time of the delivery of this prospectus or any sale
of these securities.

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

                               TABLE OF CONTENTS

                             --------------------
Page
                                                                          ----
Prospectus Summary.......................................................   1
The Offering.............................................................   3
Risk Factors.............................................................   5
Use of Proceeds..........................................................  18
Dividend Policy..........................................................  18
Capitalization...........................................................  19
Dilution.................................................................  20
Selected Financial Data..................................................  21
Management's Discussion and Analysis of Financial Condition and Results
 of Operations...........................................................  22
Business.................................................................  32
Management...............................................................  45
Certain Transactions.....................................................  55
Principal Stockholders...................................................  57
Description of Capital Stock.............................................  60
Shares Eligible for Future Sale..........................................  63
Underwriting.............................................................  64
Legal Matters............................................................  66
Experts..................................................................  66
Additional Information...................................................  66
---------------

Until      , 1999 (25 days after the date of this prospectus), all dealers that
effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.

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

                                         Shares

                                [LOGO OF VIADOR]

                                  Viador Inc.

                                  Common Stock

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

                             PRELIMINARY PROSPECTUS

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

                            Bear, Stearns & Co. Inc.

                               CIBC World Markets

                           U.S. Bancorp Piper Jaffray

                                       , 1999

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PART II

                    INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

   The following table sets forth the costs and expenses, other than
underwriting discounts, payable by the Registrant in connection with the offer
and sale of the common stock being registered. All amounts are estimates
except the registration fee, the NASD filing fee and the Nasdaq National
Market entry and application fee.
Registration fee.................................................... $12,788
   NASD filing fee.....................................................   5,100
   Blue Sky/NASD fees and expenses (including legal fees)..............       *
   Nasdaq National Market entry and application fee....................       *
   Accounting fees and expenses........................................       *
   Other legal fees and expenses.......................................       *
   Transfer agent and registrar fee....................................       *
   Printing and engraving..............................................       *
   Miscellaneous.......................................................       *
                                                                        -------
     Total............................................................. $     *
                                                                        =======
*  To be supplied by amendment.

Item 14. Indemnification of Directors and Officers

   Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
the 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. Article VII, Section
6, of the Registrant's Bylaws provides for mandatory indemnification of its
directors and officers and permissible indemnification of employees and other
agents to the maximum extent permitted by the Delaware General Corporation
Law. The Registrant's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") provides that, pursuant to Delaware law, its
directors shall not be liable for monetary damages for breach of the
directors' fiduciary duty as directors to the Company or its stockholders.
This provision in the Certificate of Incorporation does not eliminate the
directors' fiduciary duty, and in appropriate circumstances equitable remedies
such as injunctive or other forms of non-monetary relief will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Company for acts
or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Registrant has
entered into Indemnity Agreements with its officers and directors, a form of
which is attached as Exhibit 10.4 hereto and incorporated herein by reference.
The Indemnification Agreements provide the Registrant's officers and directors
with further indemnification to the maximum extent permitted by the Delaware
General Corporation Law. The Registrant maintains directors and officers
liabilities insurance. Reference is made to Section 8 of the Underwriting
Agreement contained in Exhibit 1.1 hereto, indemnifying officers and directors
of the Registrant against certain liabilities.

                                     II-1
Item 15. Recent Sales of Unregistered Securities

   Since July 1996, we have issued and sold the following securities:

     (a) We issued and sold 2,560,417 shares of our common stock to founders
  for an aggregate purchase price of $122,900 pursuant to direct stock
  issuances and we issued approximately 350,000 shares of common stock for
  consideration of approximately $39,000 upon the exercise of options under
  our Amended and Restated 1997 Stock Option/Stock Issuance Plan.

     (b) We issued options to purchase 3,287,155 shares of common stock with
  a weighted average exercise price of $0.744 per share.

     (c) In May 1998, we issued a warrant which currently permits the holder
  to purchase up to 46,875 shares of our common stock, at an exercise price
  of $0.72 per share (subject to adjustment), to Standard Foods Taiwan, Ltd.
  and two of its affiliated entities.

     (d) In August 1998, we issued a warrant which currently permits the
  holder to purchase up to 12,500 shares of our common stock, at an exercise
  price of $0.72 per share (subject to adjustment), to Brobeck, Phleger &
  Harrison LLP.

     (e) In November 1998, we issued a warrant which currently permits the
  holder to purchase up to 5,834 shares of our common stock, at an exercise
  price of $0.24 per share (subject to adjustment), to Outcast
  Communications, Inc.

     (f) In July 1998, we issued 46,000 shares of Series B preferred stock to
  Mr. Robert Santoni pursuant to settlement agreement entered into between
  Health Point Ltd., Mr. Santoni and us. We also issued an option to purchase
  18,334 shares of common stock, at an exercise price of $0.24 per share
  (subject to adjustment) to Mr. Santoni pursuant to such settlement
  agreement.

     (g) In July 1999, we issued a warrant to purchase 9,615 shares of Series
  C preferred stock, at an exercise price of $2.434 per share (subject to
  adjustment), to a commercial bank.

     (h) In May 1997, we issued and sold an aggregate of 3,703,764 shares of
  Series A preferred stock to several investors for an aggregate purchase
  price of $3,818,581.

     (i) In August 1998, we issued and sold an aggregate of 6,586,716 shares
  of Series B preferred stock to several investors for an aggregate purchase
  price of $8,561,743.

     (j) In May 1999, we issued and sold an aggregate of 5,990,385 shares of
  Series C preferred stock to several investors for an aggregate purchase
  price of $14,580,597.

   None of the foregoing transactions involved any underwriters, underwriting
discounts or commissions, or any public offering, and we believe that each
transaction was exempt from the registration requirements of the Securities
Act by virtue of Section 4(2) thereof, Regulation D promulgated thereunder or
Rule 701 pursuant to compensatory benefit plans and contracts relating to
compensation as provided under such Rule 701. The recipients in such
transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof, and appropriate legends were affixed to the share
certificates and instruments issued in such transactions. All recipients had
adequate access, through their relationships with us, to information about us.

                                     II-2
Item 16. Exhibits and Financial Statement Schedules

   (a) Exhibits
1.1* Form of Underwriting Agreement
  2.1  Form of Agreement and Plan of Merger of Viador Inc., a Delaware
       corporation, and Viador, Inc., a California Corporation
  3.1  Second Amended and Restated Certificate of Incorporation
  3.2  Amended and Restated Bylaws
  4.1  Reference is made to Exhibit 3.1
  4.2* Specimen Common Stock Certificate
  4.3  Amended and Restated Investors' Rights Agreement, among the registrant
       and the parties listed on Schedule A thereto dated May 21, 1999, as
       amended on July 23, 1999
  5.1* Opinion of Brobeck, Phleger & Harrison LLP
 10.1  Form of Amended and Restated 1997 Stock Option/Stock Issuance Plan
 10.2  Form of 1999 Stock Incentive Plan
 10.3  Form of 1999 Employee Stock Purchase Plan
 10.4  Form of Indemnification Agreement for Officers and Directors
 10.5  Assignment of Lease, by and between the Registrant and Valley of
       California, Inc., and Consent to Assignment, dated as of December 16,
       1997 and related office leases
 10.6  Collateral Assignment, Patent Mortgage and Security Agreement, by and
       between the Registrant and Comerica Bank--California, dated March 4,
       1997
 10.7  Revolving Credit Loan and Security Agreement, by and between the
       Registrant and Comerica Bank--California, dated March 17, 1999
 23.1  Consent of KPMG LLP, independent auditors
 23.2* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
 24.1  Power of Attorney (included on signature page)
 27.1  Financial Data Schedule
----------
*To be filed by amendment.

   (b) Financial Statement Schedules not listed above have been omitted
because the information required to be set forth therein is not applicable or
is shown in the financial statements.

Item 17. Undertakings

   Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14, or otherwise, the
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
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the 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, the 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 of
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue. The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser. The undersigned
Registrant hereby undertakes that: (1) For purposes of determining any
liability under the Securities Act, the information omitted from the form of
Prospectus filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of Prospectus filed by the 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 Statement as of the time it was declared effective
and (2) 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 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.

                                     II-3
SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-1 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Palo Alto, State of California, on
this 29th day of July, 1999.

                                          VIADOR INC.

                                                      /s/ Stan X. Wang
                                          By: _________________________________
                                                        Stan X. Wang
                                               President and Chief Executive
                                                          Officer

                               POWER OF ATTORNEY

   KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, Stan X. Wang
and Raja H. Venkatesh, and each one of them, his true and lawful attorneys-in-
fact and agents, each with full power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to sign any registration statement for the same offering
covered by this Registration Statement that is to be effective upon filing
pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as
amended, and all post-effective amendments thereto, and to file the same, with
all exhibits thereto and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming that each of said attorneys-in-fact
and agents or any of them, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

   IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.

   Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the persons whose signatures
appear below, which persons have signed such Registration Statement in the
capacities and on the dates indicated:
Signature                              Title                       Date
              ---------                              -----                       ----
/s/ Stan X. Wang              Chief Executive Officer, President    July 29, 1999
______________________________________  and Director (Principal Executive
             Stan X. Wang               Officer)

      /s/ Raja H. Venkatesh            Chief Financial Officer (Principal    July 29, 1999
______________________________________  Financial Officer and Principal
          Raja H. Venkatesh             Accounting Officer)

         /s/ Teddy Kiang               Director                              July 29, 1999
______________________________________
             Teddy Kiang

        /s/ Dawn G. Lepore             Director                              July 29, 1999
______________________________________
            Dawn G. Lepore

        /s/ Chong Sup Park             Director                              July 29, 1999
______________________________________
            Chong Sup Park

     /s/ Virginia M. Turezyn           Director                              July 29, 1999
______________________________________
         Virginia M. Turezyn
II-4
VIADOR INC.

                       VALUATION AND QUALIFYING ACCOUNTS

              For the Years Ended December 31, 1998, 1997 and 1996
Balance at  Charged to                           Balance at
                         beginning of  cost and    Charged to                end of
                           the year    expenses  other accounts Deductions  the year
                         ------------ ---------- -------------- ---------- ----------
Year ended December 31,
 1998
Allowance for doubtful
 accounts...............   $50,000     $112,575       $--        $109,575   $53,000
Year ended December 31,
 1997
Allowance for doubtful
 accounts...............   $20,000     $ 43,000                  $ 13,000   $50,000
Year ended December 31,
 1996
Allowance for doubtful
 accounts...............   $   --      $ 20,000       $--        $    --    $20,000
S-1
EXHIBIT INDEX
Exhibit
   No.   Exhibit Name
 ------- ------------
1.1*   Form of Underwriting Agreement
  2.1    Form of Agreement and Plan of Merger of Viador Inc., a Delaware
         corporation, and Viador, Inc., a California Corporation
  3.1    Second Amended and Restated Certificate of Incorporation
  3.2    Amended and Restated Bylaws
  4.1    Reference is made to Exhibit 3.1
  4.2*   Specimen Common Stock Certificate
  4.3    Amended and Restated Investors' Rights Agreement, among the registrant
         and the parties listed on Schedule A thereto dated May 21, 1999, as
         amended on July 23, 1999
  5.1*   Opinion of Brobeck, Phleger & Harrison LLP
 10.1    Form of Amended and Restated 1997 Stock Option/Stock Issuance Plan
 10.2    Form of 1999 Stock Incentive Plan
 10.3    Form of 1999 Employee Stock Purchase Plan
 10.4    Form of Indemnification Agreement for Officers and Directors
 10.5    Assignment of Lease, by and between the Registrant and Valley of
         California, Inc., and Consent to Assignment, dated as of December 16,
         1997 and related office leases
 10.6    Collateral Assignment, Patent Mortgage and Security Agreement, by and
         between the Registrant and Comerica Bank--California, dated March 4,
         1997
 10.7    Revolving Credit Loan and Security Agreement, by and between the
         Registrant and Comerica Bank--California, dated March 17, 1999
 23.1    Consent of KPMG LLP, independent auditors
 23.2*   Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
 24.1    Power of Attorney (included on signature page)
 27.1    Financial Data Schedule
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*To be filed by amendment.