<PAGE>

      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 15, 1998
 
                                                     REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
                          GIGA INFORMATION GROUP, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                         <C>                                         <C>
                 DELAWARE                                      8732                                     06-1422860
     (STATE OR OTHER JURISDICTION OF               (PRIMARY STANDARD INDUSTRIAL                      (I.R.S. EMPLOYER
      INCORPORATED OR ORGANIZATION)                CLASSIFICATION CODE NUMBER)                    IDENTIFICATION NUMBER)
</TABLE>
 
                            ------------------------
 
       ONE LONGWATER CIRCLE, NORWELL, MASSACHUSETTS 02061 (781) 982-9500
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------
 
                               GIDEON I. GARTNER
          CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
                          GIGA INFORMATION GROUP, INC.
                              ONE LONGWATER CIRCLE
                  NORWELL, MASSACHUSETTS 02061 (781) 982-9500
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)
                            ------------------------
 
                                   Copies to:
 
<TABLE>
<S>                                                                <C>
                     GERALD S. BACKMAN, P.C.                                           ALEXANDER D. LYNCH, ESQ.
                   WEIL, GOTSHAL & MANGES LLP                                          LUCI STALLER ALTMAN, ESQ.
                        767 FIFTH AVENUE                                            BROBECK, PHLEGER & HARRISON LLP
                  NEW YORK, NEW YORK 10153-0119                                        1633 BROADWAY, 47TH FLOOR
                         (212) 310-8000                                                NEW YORK, NEW YORK 10019
                                                                                            (212) 581-1600
</TABLE>

 
                            ------------------------
 
     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
 
     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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 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 number of the earlier effective registration statement for the same
offering. / /
 
     If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
                                                                                            PROPOSED MAXIMUM
                                  TITLE OF EACH CLASS                                      AGGREGATE OFFERING        AMOUNT OF
                             OF SECURITIES TO BE REGISTERED                                     PRICE(1)         REGISTRATION FEE
<S>                                                                                        <C>                   <C>
Common Stock, par value $.001 per share.................................................       $46,000,000            $13,570
</TABLE>
 
(1) Estimated solely for the purpose of calculating the amount of the
    registration fee pursuant to Rule 457(c) under the Securities Act of 1933.
                            ------------------------
 
     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>


Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.


                   SUBJECT TO COMPLETION, DATED MAY 15, 1998
                                             SHARES
 
                                     [LOGO]
 
                                  COMMON STOCK
                            ------------------------
 
     All of the            shares of Common Stock, par value $0.001 per share
(the 'Common Stock'), offered hereby are being sold by Giga Information Group,
Inc., a Delaware corporation (together with its subsidiaries, 'Giga' or the
'Company'). Prior to this offering (the 'Offering'), there has been no public
market for the Common Stock. It is currently anticipated that the initial public
offering price will be between $           and $           per share. See
'Underwriting' for a discussion of the factors to be considered in determining
the initial public offering price.
 
     The Company has applied for inclusion of the Common Stock on the Nasdaq
National Market under the symbol 'GIGX.'
                            ------------------------
 
     SEE 'RISK FACTORS' ON PAGES 7 THROUGH 14 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS.
                            ------------------------
 
   THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
        AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
           HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
          SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
            OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
                            IS A CRIMINAL OFFENSE.
 
<TABLE>
<CAPTION>
                                          PRICE TO           UNDERWRITING DISCOUNTS         PROCEEDS TO
                                           PUBLIC              AND COMMISSIONS(1)            COMPANY(2)
<S>                               <C>                       <C>                       <C>
Per Share.......................           $                         $                         $
Total(3)........................       $                         $                         $
</TABLE>
 

(1) See 'Underwriting' for information relating to indemnification of the
    Underwriters.
 
(2) Before deducting expenses payable by the Company estimated at $           .
 
(3) The Company has granted the Underwriters an option exercisable within 30
    days of the date hereof, to purchase up to an aggregate of        additional
    shares of Common Stock, solely to cover over-allotments, if any. If the
    Underwriters exercise such option in full, the total Price to Public,
    Underwriting Discounts and Commissions and Proceeds to Company will be
    $       , $       and $       , respectively. See 'Underwriting.'
                            ------------------------
 
     The shares of Common Stock are offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by them, and subject to
the right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made against
payment therefor at the offices of Friedman, Billings, Ramsey & Co., Inc.,
Arlington, Virginia, or in book entry form through the book entry facilities of
the Depositary Trust Company, on or about             , 1998.
 
                     FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
 
              The date of this Prospectus is                , 1998

<PAGE>




             [PHOTO DEPICTING THE COMPANY'S GIGAWEB USER INTERFACE]
 


     CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT COVERING
TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
'UNDERWRITING.'
 
                                       2

<PAGE>

                               PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the Company's
Consolidated Financial Statements (the 'Consolidated Financial Statements') and
notes thereto appearing elsewhere in this Prospectus. Unless the context
otherwise requires, references in this Prospectus to 'Giga' or the 'Company' are
to Giga Information Group, Inc., a Delaware corporation, and its direct and
indirect subsidiaries. Unless otherwise indicated, the information contained in
this Prospectus (i) assumes no exercise of the Underwriters' over-allotment
option, (ii) reflects the automatic conversion of all outstanding shares of the
Company's Series A, Series B, Series C and Series D Preferred Stock (the
'Convertible Preferred Stock') into an aggregate of 4,686,784 shares of Common
Stock upon the closing of the Offering (the 'Preferred Conversion'), (iii)
reflects the repayment (the 'Bridge Repayment') of convertible promissory notes
in the aggregate principal amount of $10.0 million (the 'Bridge Notes') issued
in April 1998, (iv) reflects the filing by the Company, prior to the closing of
the Offering, of an amended and restated certificate of incorporation (the
'Restated Certificate'), (v) reflects a one-for-three reverse stock split of the
Common Stock (the 'Reverse Stock Split') to be effected prior to the closing of
this Offering and (vi) has been adjusted to reflect a four-for-one stock split
of the Common Stock effected as a stock dividend in November 1995 (the 'Stock
Split').
 
                                  THE COMPANY
 
     The Company provides objective analyses and advice relating to developments
and trends in the computing, telecommunications and related industries
(collectively, the 'Information Technology' or 'IT' industries) to assist its
customers in making technology-related decisions. IT is critical to the
competitiveness and long-term viability of a wide range of organizations. The
Company believes information overload, confusion and anxiety exists among IT
decision-makers. As a result, an increasing number of organizations are turning
to Continuous Information Service ('CIS') providers to monitor and analyze IT
developments and to identify trends to support such organization's IT
decision-making needs.
 
     Giga was founded by Gideon I. Gartner, who in 1979 founded Gartner Group,
Inc., a CIS provider. Building on his extensive experience and success in the
CIS industry, Mr. Gartner formed Giga with the objective of creating a new
approach toward addressing the CIS needs of users and vendors of IT products and
services. Giga has developed a range of innovative Continuous Information
Services, as well as an effective, electronic information delivery mechanism,
designed to provide integrated IT analyses and advice.
 
     Foremost among these innovations is the Company's unified advisory service
('Advisory Service'), through which IT research and analysis is offered to
customers as a single service intended to encompass the variety of IT coverage
offered by other CIS providers through multiple and fragmented services. This
original research and advice is provided by a staff of experienced industry
analysts. To complement Giga's analysts, the Company provides its Advisory
Service customers with access to an extensive network of external IT

practitioners ('ExperNet'). These practitioners have current experience in
diversified segments of the IT industry, which the Company believes cannot be
efficiently covered by the traditional CIS approach.
 
     The Company also provides 'Continuous Advisory Consulting' services, a
valuable complement to Giga's Advisory Service inquiry process, which enable
customers to request more in-depth analysis targeted at the application of
technology to their specific situation. Continuous Advisory Consulting services,
which are provided on an on-going basis, may include assessments of strategic
technology planning, implementation issues surrounding a major technology
migration, or a vendor's marketing plan.
 
     The Company has also introduced its 'IT Practice Services,' which integrate
the results of documented surveys of the successful operating practices and
techniques of IT professionals ('best practices') with strategic consulting, to
allow customers to leverage the proven practices of their peers. Each IT
Practice Service is designed to address issues faced by an executive in a
specific job function within an organization. For example, the Company's 'Year
2000 Practices' is designed for the executive in charge of an organization's
year 2000 activities.
 
     The Company organizes and sponsors a range of events on significant IT
industry issues and trends, and produces publications based on conference topics
or current IT issues (collectively, 'Events and Publications'). For example, the
Company hosts its flagship annual conference, GigaWorld IT Forum, at which
Giga's analysts present and update their most important research findings and
recommendations and meet one-on-one in advisory sessions with clients.
 
                                       3
<PAGE>


     Giga has designed its innovative Advisory Service model to capitalize on
the capabilities of the Internet. Advisory Service research is accessed and
customized through the Company's intelligent, Internet-based information
delivery interface ('GigaWeb'). GigaWeb is designed to make it easy and
efficient for a customer to navigate through the full spectrum of Giga's
original research and third party content, together with access to human
expertise. In addition, the Company maintains an authoring environment and
advanced client interface designed for electronic delivery and encourages
collaboration among analysts and clients, which is facilitated through the
Internet.
 
     Giga's objective is to become the leading third generation CIS provider,
offering a significant price/performance advantage over its competitors. Key
elements of the Company's strategy are to (i) utilize and enhance its
price/performance advantage to increase the range of companies which can afford
CIS products, (ii) leverage its existing customer base by providing non-advisory
additional services such as IT Practice Services and Continuous Advisory
Consulting, (iii) increase the number of Advisory Service subscribers within an
organization and (iv) expand its worldwide distribution both domestically and
internationally.
 
     The Company's executive offices are located at One Longwater Circle,

Norwell, Massachusetts 02061 and its telephone number is (781) 982-9500.
 
                                  THE OFFERING
 
<TABLE>
<S>                                                  <C>
Common Stock offered hereby........................  shares
Common Stock to be outstanding after the
  Offering.........................................  shares(1)
Use of Proceeds....................................  To repay indebtedness, and for capital expenditures,
                                                     working capital and other general corporate purposes. See
                                                     'Use of Proceeds.'
Proposed Nasdaq National Market symbol.............  GIGX
</TABLE>
 
------------------
(1) Based on shares outstanding as of March 31, 1998. Excludes (i) 1,316,197 
    shares of Common Stock issuable upon exercise of options outstanding as of
    March 31, 1998, with a weighted average exercise price of $2.43 per share;
    (ii) 873,273 shares of Common Stock reserved for issuance, as of March 31,
    1998, under the Company's stock plans; (iii) 166,666, 35,959, and 654,432
    shares of Common Stock issuable upon exercise of warrants outstanding as of
    March 31, 1998, with exercise prices of $3.00, $13.875 and $13.50 per
    share, respectively; and (iv) excludes 35,330 shares of Common Stock issued
    by the Company to employees after March 31, 1998. See 'Management--Executive
    Compensation' and 'Description of Capital Stock.'
                             ------------------------
 
     GigaTel(Registered) is a registered trademark of the Company. The Company
has several trademarks including, the GiGa Giga Information Group (and
design)(Trademark), Giga Advisory Service(Trademark), GigaWeb(Trademark),
Gigabots(Trademark), GigaNotes(Trademark), GigaWorld IT Forum(Trademark),
IntraGiga(Trademark), IdeaBytes(Trademark) and ExperNet(Trademark). All other
trademarks or trade names referred to in this Prospectus are the property of
their respective owners.
 
     This Prospectus contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the Company.
Words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,'
'estimates' and variations of such words and similar expressions are intended to
identify such forward-looking statements. These forward-looking statements are
based on current expectations, estimates and projections about the Company's
business, and beliefs and assumptions made by management, all of which involve
risks and uncertainties. Prospective investors are cautioned that such
statements are only predictions and that actual events or results may differ
materially. In evaluating such statements, prospective investors should
specifically consider the various factors identified in this Prospectus,
including the matters set forth under the caption 'Risk Factors,' which could
cause actual results to differ materially from those indicated by such
forward-looking statements.
 
                                       4

<PAGE>

                      SUMMARY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
                                PREDECESSOR COMPANIES(1)                                    COMPANY
                                -------------------------   -----------------------------------------------------------------------
                                    YEAR        JANUARY 1     MARCH 17             YEAR ENDED               THREE MONTHS ENDED
                                   ENDED           TO            TO               DECEMBER 31,                   MARCH 31,
                                DECEMBER 31,    APRIL 5,    DECEMBER 31,   --------------------------   ---------------------------
                                    1994          1995          1995           1996          1997          1997           1998
                                ------------    ---------   ------------   ------------   -----------   ----------   --------------
                                                          (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
<S>                             <C>             <C>         <C>            <C>            <C>           <C>          <C>
Revenues:
  Continuous information
    services..................    $     --       $    --      $     --       $  3,149     $    14,600   $    2,570     $    6,804
  Other services..............       7,366         1,833         5,517          6,043           4,715        1,276          1,693
  Publications................         800           283         1,442            946             344          180             55
                                ------------    ---------   ------------   ------------   -----------   ----------   --------------
    Total revenues............       8,166         2,116         6,959         10,138          19,659        4,026          8,552
Costs and expenses:
  Cost of services............       5,143         1,182         4,707         12,336          12,477        3,202          4,391
  Cost of publications........         446           240           346            790             174           75             71
  Sales and marketing.........       1,438           167         1,016          6,706          19,617        4,158          5,781
  Research and development....          --            --           348          1,789           1,975          659            339
  General and
    administrative............       4,027         1,047         5,760          9,739           6,419        1,061          1,339
  Depreciation and
    amortization..............       2,943           215         1,387          2,391           2,810          634            385
                                ------------    ---------   ------------   ------------   -----------   ----------   --------------
    Total costs and expenses..      13,997         2,851        13,564         33,751          43,472        9,789         12,306
                                ------------    ---------   ------------   ------------   -----------   ----------   --------------

Loss from continuing
  operations, net of taxes....      (4,663)         (503)       (5,366)       (22,702)        (23,130)      (5,689)        (3,807)
Income (loss) from
  discontinued operations, net
  of taxes....................      (1,870)          651         1,644         (2,688)          1,313           --             --
Net income (loss).............      (6,533)          148        (3,722)       (25,390)        (21,817)      (5,689)        (3,807)
Historical results per common
  share-basic and diluted:
  Loss from continuing
    operations................                                                                 (11.16)                      (1.80)
  Income from discontinued
    operations................                                                                     --                          --
  Income from disposal of
    discontinued operations...                                                                   0.63                          --
  Net loss....................                                                                 (10.53)                      (1.80)
Historical weighted average
  number of common shares
  outstanding:................                                                              2,072,837                   2,115,837
Pro forma results per common
  share-basic and diluted:
  Loss from continuing
    operations................                                                                  (3.42)                      (0.56)
  Income from discontinued
    operations................                                                                     --                          --
  Income from disposal of
    discontinued operations...                                                                   0.19                          --
  Net loss....................                                                                  (3.23)                      (0.56)
Pro forma weighted average
  number of common shares
  outstanding:................                                                              6,759,621                   6,802,621
 

<CAPTION>
                                                                                                       MARCH 31, 1998
                                                                                          -----------------------------------------
                                                                                                           PRO        PRO FORMA AS
                                                                                            ACTUAL       FORMA(2)    ADJUSTED(2)(3)
                                                                                          -----------   ----------   --------------
<S>                                                                                       <C>           <C>          <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash
    equivalents.......................................................................    $     1,753   $    3,753     $
Working capital (deficit)..............................................................       (13,821)     (11,821)
Total assets...........................................................................        15,673       17,673
Deferred revenues......................................................................        19,458       19,458         19,458
Long-term debt, less current portion...................................................           848          848            848
Total stockholders' equity.............................................................       (12,750)     (10,750)
</TABLE>
 
------------------
(1) Financial data included herein contains results of certain predecessor
    companies acquired by the Company in 1995. For a description of the
    predecessor companies and an explanation of the comparative periods
 
                                              (Footnotes continued on next page)
 
                                       5
<PAGE>


(Footnotes continued from previous page)

    presented herein, see 'Management's Discussion and Analysis of Financial
    Condition and Results of Operations--Organization of the Company and
    Financial Statement Presentation.'
(2) Presented on a pro forma basis to give effect to the Series D Financing (as
    defined herein) and the Preferred Conversion. See 'Certain Transactions'
    and Note 20 to the Consolidated Financial Statements.
(3) Adjusted to give effect to the sale by the Company of      shares of Common
    Stock offered hereby at an assumed initial public offering price of
    $          per share and the application of the estimated net proceeds
    therefrom. See 'Use of Proceeds' and 'Capitalization.'
 
                                       6

<PAGE>

                                  RISK FACTORS
 
     The following risk factors should be considered carefully in addition to
the other information contained in this Prospectus before purchasing the Common
Stock offered hereby. This Prospectus contains certain statements of a
forward-looking nature all of which involve risks and uncertainties and actual
events or results may differ materially from the results discussed in such
forward-looking statements.
 
LIMITED OPERATING HISTORY; PRIOR LOSSES AND ANTICIPATION OF FUTURE LOSSES
 
     The Company was incorporated on March 17, 1995, and in April 1996
introduced the Advisory Service, its principal service offering and its first
Continuous Information Service, and GigaWeb, the Company's Internet-based system
for delivering information, analyses and advice to its customers. The Company
has been marketing its Continuous Information Services for only a limited period
of time, and the Company's future success will depend, in large part, on its
ability to successfully market and enhance these services.
 
     Since its inception, the Company has incurred substantial costs to develop
its Continuous Information Services, establish its GigaWeb system, build a
management team and recruit, employ and train research analysts, sales personnel
and support staff for its business. As a consequence, the Company has incurred
substantial operating losses since its inception and, at March 31, 1998, had an
accumulated deficit of $54.7 million. The Company expects to incur significant
losses through at least fiscal 1998 as the Company expands and develops its
services and products. The magnitude and duration of the Company's losses will
depend on a number of factors both within and outside of the Company's control,
including the Company's ability to successfully market its Continuous
Information Services, customer acceptance of the Company's single-service model,
the Company's ability to attract and retain qualified research analysts, sales
personnel and management personnel on a timely basis and the related costs of
such efforts, the response of competitors to the Company's services and
products, the ability of the Company to develop and market new services and
products, and the continued acceptance by customers of subscription agreements
providing for advance payments rather than equal monthly installments or some
other payment model. In addition, the Company has significantly increased its
operating expenses and expects to continue such increases in the future
primarily to expand its staff of research analysts and sales and support
personnel and to further develop and enhance its services and its GigaWeb
system. As a result, the Company may not be readily able to reduce or adjust
expenses in the event that it does not generate planned revenues or if its
revenues decrease. There can be no assurance when or if the Company will begin
to generate revenue that is sufficient to achieve profitability, to maintain
profitability on a quarterly or annual basis or to sustain or increase its
revenue growth in future periods. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations.'
 
NEED TO ATTRACT AND RETAIN QUALIFIED PERSONNEL
 
     The Company's success will depend, in part, upon its ability to hire,
train, motivate and retain a significant number of highly-skilled and

experienced employees, particularly management, research analysts and sales
personnel. The Company has experienced in the past, and may experience in the
future, high levels of turnover of its personnel, particularly sales and
marketing personnel. The Company has also experienced, and expects to continue
to experience, intense competition for professional personnel with, among
others, producers of IT services and products, management consulting firms and
systems integrators. Many of these firms have substantially greater financial
resources than the Company to attract and compensate qualified personnel. In
addition, some of the Company's competitors require that their employees enter
into non-competition agreements, the terms of which could prohibit such
individuals for a period of time from working for the Company. There can be no
assurance that the Company will be successful in attracting a sufficient number
of highly-skilled employees in the future, or that it will be successful in
training, motivating and retaining the employees it is able to hire, and any
inability to do so would have a material adverse effect on the Company's
business, financial condition and results of operations.
 
                                       7
<PAGE>

DEPENDENCE ON SALES AND RENEWALS OF SUBSCRIPTION-BASED SERVICES; NEED TO
ANTICIPATE CHANGING MARKET NEEDS
 
     The Company offers its Continuous Information Services on a subscription
basis from which the Company derived 74% and 79% of total revenues for the year
ended December 31, 1997 and the three months ended March 31, 1998, respectively.
Accordingly, the Company's prospects will depend on its ability to enter into a
significant number of contracts for subscriptions to its services and to achieve
and sustain high renewal rates, and no assurance can be given that it will be
successful in doing so. The Company's ability to secure subscriptions and
subscription renewals is dependent upon, among other things, its ability to
deliver, through its Continuous Information Services, consistently high quality
and timely analysis and advice with respect to issues, developments and trends
in the IT industry that clients view as important. To deliver valuable analysis
and advice on a sustained basis, the Company must, among other things, recruit
and retain a large and growing number of highly talented professionals in a very
competitive job market, understand and anticipate market trends so as to keep
its analysis focused on the changing needs of its customers, and deliver
services and products of sufficiently high quality on a timely basis to
withstand competition. There can be no assurance that the Company will be able
to achieve and sustain high subscription renewal rates or that the Company's
employees will be able to achieve desired sales productivity levels. Any
material decline in subscriptions and subscription renewal rates or the
inability of the Company's employees to achieve desired sales productivity
levels would have a material adverse effect on the Company's business, financial
condition and results of operations. See 'Management's Discussion and Analysis
of Financial Condition and Results of Operations.'
 
ABILITY TO MANAGE GROWTH
 
     The Company's planned expansion is expected to place a significant strain
on the Company's financial, operational and managerial resources. To manage its
expansion, the Company must continue to implement and improve its operations and
financial systems and increase, train and manage its personnel. There can be no

assurance that the Company's systems, procedures or controls currently in place
will be adequate to support the Company's operations or that the Company will be
able to implement additional systems successfully and in a timely manner if
required. If the Company continues to grow, it will be required to expand its
research staff, expand its sales and marketing force, recruit additional key
management personnel, improve its operational and financial systems and train,
motivate and manage additional employees. There can be no assurance that the
Company will be able to manage these changes successfully. Any inability of the
Company to manage its growth successfully could have a material adverse effect
on the Company's business, financial condition and results of operations.
 
SUBSTANTIAL FUTURE CAPITAL NEEDS; RISKS OF WORKING CAPITAL DEFICIENCY
 
     The Company's business has significant fixed costs, primarily attributable
to the costs associated with producing research to implement its single-service
strategy, which provides for coverage of many of the IT sectors and contemplates
broad direct distribution worldwide. The Company has spent substantial amounts
to date and expects capital and operating expenditures to increase due to
numerous factors, including the Company's ability to successfully market its
Continuous Information Services, the Company's ability to enter into contracts
for the sale of its services and to achieve and sustain acceptable renewal
rates, its ability to attract and retain qualified employees, including research
and sales personnel, on a timely basis and the related costs of such efforts,
the response of competitors to the Company's services, the Company's ability to
develop and market new services and products, the further advancement of the
GigaWeb system, the Company's expansion of its international operations, and the
continued acceptance by customers of annual membership agreements providing for
advance payments rather than equal monthly installments or some other payment
model. The Company anticipates funding its ongoing working capital needs
principally through the net proceeds to the Company from the Offering. However,
in the event that the Company encounters difficulties in collecting accounts
receivable, experiences low or reduced subscription renewal rates or otherwise
has revenues that are lower than planned, the Company might require additional
working capital and there can be no assurance that such capital would be
available to the Company on terms that are acceptable, if at all. If adequate
funds are not available, the Company may be required to reduce its fixed costs
and delay, scale back or eliminate certain of its services or products, any of
which could have a material adverse effect on the Company's business, financial
 
                                       8
<PAGE>

condition and results of operations. See 'Management's Discussion and Analysis
of Financial Condition and Results of Operations.'
 
DEPENDENCE ON KEY PERSONNEL
 
     The extent of the Company's success will depend in large part upon the
continued services of its executive officers and key employees, including its
founder, Chairman of the Board of Directors and Chief Executive Officer, Gideon
I. Gartner. Mr. Gartner, in particular, is well known in the IT community and
his reputation in the Continuous Information Services industry and his network
of contacts have been instrumental in establishing and building the Company's
business and in obtaining financing for the Company. The loss of the services of

either Mr. Gartner or one or more of the Company's other key personnel would
have a material adverse effect on the Company. There are no employment contracts
currently in force with key employees.
 
SIGNIFICANT COMPETITION
 
     The Company competes in the market for IT services and products directly
with other independent providers of Continuous Information Services, including
Gartner Group, Inc., META Group, Inc. and Forrester Research Inc., and the
internal planning, research and marketing staffs of corporations and IT vendors.
The Company also competes with other information providers, including market
research firms, 'Big Six' accounting firms, consulting firms and systems
integrators. Many of the Company's direct and indirect competitors have
substantially greater financial, information gathering and marketing resources
than the Company. Some of the Company's direct and indirect competitors also
have established research organizations with greater market recognition and
experience in the IT industry. There can be no assurance that the Company will
be successful in establishing a competitive research organization. Delays,
difficulty in developing and achieving market acceptance of Giga's Continuous
Information Services, or customer dissatisfaction would have a material adverse
effect on the Company's business, financial condition and results of operations.
In addition, new competitors could seek to compete in one or more market
segments addressed by the Company's services and products. There can be no
assurance that the Company's current or potential competitors will not develop
services and products comparable or superior to those developed by the Company
or respond more quickly to new or emerging industry trends or changing customer
requirements. There can be no assurance that the Company will be able to
continue to compete successfully against existing or new competitors. In
addition, any pricing pressures, reduced margins or loss of market share
resulting from increased competition could have a material adverse effect on the
Company's business, financial condition and results of operations. See
'Business--Competition.'
 
RISKS ASSOCIATED WITH THE DEVELOPMENT OF NEW SERVICES AND PRODUCTS
 
     The Company's future success will depend in part on its ability to
anticipate emerging market trends and to develop or acquire new services,
features and products that address the changing information, analysis, and
advice needs of IT users, vendors and investors. The process of internally
researching, developing, launching and gaining client acceptance of a new
service or product, or assimilating and marketing an acquired service or
product, is inherently risky and costly. Delays or failures during development
or implementation, or lack of market acceptance of these services and products,
could have a material adverse effect on the Company's business, financial
condition and results of operations. The future success of the Company's
Continuous Information Services will depend in part on the Company's ability to
expand the breadth and depth of its services through the addition of internal
analysts and consultants, content from third party sources and external
practitioners. The Company's continued ability to differentiate itself through
its Internet-based GigaWeb system will depend on its ability to continue to add
features and functionality to GigaWeb. In addition, the Company has limited
internal resources dedicated to its Web site development and relies on third
parties, including consultants and software developers, for the design,
development and testing of its GigaWeb system and other delivery mechanisms. Any

technical or other related problems or deficiencies in GigaWeb in the areas of
reliability, performance and salability could have a material adverse effect on
the Company's business, financial condition and results of operations. The
Company has had limited experience introducing new services and products and
there can be no assurance that its efforts to introduce new, or to assimilate
acquired, services or products, will be successful. If the Company is unable,
for technical or other reasons, to develop and introduce new services or
products or to make enhancements to existing services and products in a timely
manner in response to changing market conditions or customer requirements, or if
its Continuous Information Services or other service offerings
 
                                       9
<PAGE>

do not achieve market acceptance, the Company's business, financial condition
and results of operations would be materially adversely affected. See
'Business--Products and Services.'
 
POTENTIAL FOR SIGNIFICANT FLUCTUATIONS IN QUARTERLY OPERATING RESULTS;
SEASONALITY
 
     The Company's operating results may fluctuate significantly in the future
due to various factors, including the level and timing of new subscriptions and
renewals of subscriptions to Continuous Information Services, the timing and
amount of new business generated by the Company, the mix of domestic versus
international business, the timing of the development, introduction and
marketing of new services and products, the timing of the hiring of research
analysts and sales people, changes in the spending patterns of the Company's
target clients, the Company's accounts receivable collection experience, changes
in market demand for IT research and analysis, foreign currency exchange rate
fluctuations, competitive conditions in the industry and general economic
conditions. A high percentage of the Company's operating expenses is based
primarily on sales forecasts and the Company may be unable to adjust spending in
a timely manner to compensate for any unexpected shortfalls in revenues. Any
significant shortfall in revenues in relation to the Company's expectations
would have a material adverse effect on the Company's business, financial
condition and results of operations. Moreover, a significant portion of the
Company's renewals and subscriptions are placed during the fourth quarter,
particularly the last month of such quarter, due primarily to customers'
purchasing patterns and the timing of certain sales performance quota cutoffs.
Due to the Company's limited operating history, and as a result of its revenue
growth, seasonal trends in the Company's results of operations have not clearly
emerged. However, the Company believes that its future operating results may
follow a pattern of seasonal fluctuation. Accordingly, the Company believes that
period to period comparisons of results of operations are not necessarily
meaningful and should not be relied upon as an indication of future results of
operations. Due to the foregoing factors, it is likely that in future quarters
the Company's operating results will be below the expectations of public market
analysts and investors. Such an event would have a material adverse effect on
the price of the Company's Common Stock. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations.'
 
UNCERTAINTIES RELATING TO PROPRIETARY RIGHTS
 

     The Company's success and its ability to compete effectively is dependent
in part upon its proprietary rights. The Company relies on a combination of
copyright, trademark and trade secret laws, employee and third-party
nondisclosure agreements and contractual provisions and other methods to protect
its proprietary rights. There can be no assurance that the measures taken by the
Company to protect its proprietary rights will be adequate to enforce its
proprietary rights, prevent misappropriation or that others will not obtain
similar or superior proprietary rights. 
 
     The Company believes that its trademarks are important to its success and
its competitive position. The Company has certain common law trademarks, a U.S.
federal trademark registration and several U.S. federal trademark applications
pending, some of which involve a derivation of the first two letters of the name
Gideon Gartner (e.g. GiGa). The word 'Giga' is commonly used in the IT field to
denote 109 power or a very large amount, and the Company may be unable to obtain
registrations for its trademarks in the U.S. or in other countries for that or
other reasons, and its rights to its trademarks may be narrow in scope.
Registrations for trademarks in the U.S. provide no protection for such
trademarks in other countries. The Company has received initial Office Actions
from the United States Patent and Trademark Office (the 'PTO') indicating that
certain of its applications for U.S. federal trademark registrations for the
GiGa Giga Information Group (and design)(Trademark) trademark have been refused
based on the PTO's citation of other Giga-formative trademarks covered by
pending Federal applications and a registration held by third parties. The
Company plans to respond to this initial refusal, but there can be no assurance
that it will obtain a favorable decision from the PTO Examiner or that one of
these third parties will not successfully oppose registration or use. The
Company is aware of a Benelux trademark registration for the trademark GIGA
MEDIA, the application for which was filed in the Benelux in advance of the
Company's application to register the GiGa Giga Information Group (and
design)(Trademark) trademark with the PTO and the equivalent office in the
Benelux. The Company is also aware that the owner of the Benelux trademark has
filed a lawsuit in the Netherlands against the Company alleging tradename
infringement, and requesting a court order requiring the Company to use an
alternative tradename to Giga Information Group. There can be no assurance that
the tradename infringement lawsuit pending against the Company will result in a
decision that is 
 
                                       10
<PAGE>

favorable to the Company. In addition, there can be no assurance that other
parties (i) do not have superior rights to certain of the Company's trademarks,
(ii) will not oppose the Company's applications for registrations, (iii) will
not seek and obtain cancellation of any of the Company's trademark registrations
and (iv) will not allege that the Company's use of its trademarks infringes such
third parties trademarks. Failure by the Company to establish its rights to use
its trademarks, to overcome the PTO or other country's trademark office's
refusal of certain of its applications, or any loss of its rights to use its
trademarks, could result in damages payable to third parties, the loss of its
rights to prohibit others from using confusingly similar trademarks, the need to
invest substantial resources in building brand identity for a new trademark, and
the loss of market awareness and revenues to the Company.


DEPENDENCE ON THE INTERNET INFRASTRUCTURE
 
     The Company's success will depend, in large part, upon the continued
operation of the Internet infrastructure, such as a reliable network backbone
with the necessary speed, data capacity and security, for providing reliable
GigaWeb access. To the extent that the Internet continues to experience
increased numbers of users, frequency of use or increased bandwidth requirements
of users, there can be no assurance that the Internet infrastructure will
continue to be able to support the demands placed on it or that the performance
or reliability of the Internet will not be adversely affected. Furthermore, the
Internet has experienced a variety of outages and other delays as a result of
damage to portions of its infrastructure, and such outages and delays could
adversely affect the customer's ability to access GigaWeb. Moreover, critical
issues concerning the commercial use and government regulation of the Internet
(including security, taxation cost, ease of use and access, intellectual
property ownership, data privacy and other legal liability issues) remain
unresolved and could materially and adversely impact both the growth of the
Internet and the Company's business, financial condition and results of
operations.
 
RISK OF SYSTEM FAILURE
 
     The Company's Internet-based, information delivery interface, GigaWeb,
resides on a computer system located at the Company's headquarters. The
continuing and uninterrupted performance of GigaWeb is critical to the success
of the Company's business. Any system failure or capacity constraint that causes
interruptions in the Company's ability to service its customers could reduce
customer satisfaction and, if sustained or repeated, would reduce the
attractiveness of the Company's products and could have a material adverse
effect on the Company's business, results of operations and financial condition.
 
RISKS RELATED TO CONTENT
 
     As a publisher and distributor of original analyses and licensed
third-party content, the Company faces potential liability for defamation,
negligence, copyright and trademark infringement. Third party content includes
information created or provided by information service organizations, ExperNet
practitioners, and consultants retained by the Company and may be delivered in
writing, via the Internet or in print, or verbally to clients. There can be no
assurance that the Company will not be involved in litigation, which can be
expensive and time consuming, as a result of the creation and/or dissemination
of such content. Any such litigation, whether or not resulting in a judgment
requiring the payment of monetary damages, could have a material adverse affect
on the Company's business, financial condition, and results of operations.
 
IMPACT OF THE YEAR 2000 ISSUE
 
     The Company has commenced efforts to ensure that the computer systems and
applications upon which it relies for internal operations and external
communications with clients and others will function properly beyond 1999. The
Company presently believes that the computer systems and programs upon which it
relies for its internal operations and external communications, and which the
Company presently expects to use following December 31, 1999, are, or will be,

Year 2000 compliant. There can be no assurance, however, that further assessment
of the Company's internal systems and applications will not reveal that
additional efforts to assure Year 2000 compliance are necessary, and such
efforts may be costly and may divert the Company's resources from product
development or infrastructure improvement programs. Further, there can be no
assurance that the systems operated by other companies upon which the Company
relies will be Year 2000 compliant on a timely basis. The Company's business,
financial condition or results of operations could be materially adversely
affected by the failure of the Company's internal systems and applications to
properly operate or manage data beyond 1999.
 
                                       11
<PAGE>

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
 
     Certain of the Company's operations are located outside of the United
States and the Company plans to expand its international operations. The Company
believes there are certain risks inherent in international operation, including
changes in demand resulting from fluctuations in interest and exchange rates,
changes in trade policies, regulatory requirements, difficulties in staffing and
managing foreign sales operations and higher levels of taxation on foreign
income than domestic income. Expansion into new geographic territories requires
considerable management and financial resources and may negatively impact the
Company's near-term results of operations. Most of the Company's international
revenues are expected to be denominated in foreign currencies. Consequently, a
decrease in the value of a relevant foreign currency in relation to the United
States dollar, or an adverse development in any one of the foregoing factors,
could have a material adverse effect on the Company's business, financial
condition or results of operations. The Company does not currently hedge its
exposure to foreign currency fluctuations. The Company had revenues from
international operations of $3.2 million in 1996, $2.4 million in 1997 and
$700,000 in the period ended March 31, 1998.
 
CONTROL BY MANAGEMENT
 
     Upon the closing of the Offering, Mr. Gartner will beneficially own
approximately    % of the outstanding Common Stock (   % assuming the exercise
of the Underwriters' over-allotment option) and Mr. Gartner, together with the
Company's other executive officers and directors, including entities affiliated
with them, will beneficially own approximately    % of the outstanding Common
Stock (   % assuming the exercise of the Underwriters' over-allotment option).
As a result, these stockholders will be able to exercise control over matters
requiring stockholder approval, including the election of directors and the
approval of significant corporate matters such as transactions which may lead to
a change of control of the Company. The effects of such control could be to
delay or prevent a change of control of the Company unless the terms are
approved by such stockholders, which could adversely affect the market price of
the Company's Common Stock. See 'Management' and 'Principal Stockholders.'
 
ABSENCE OF PUBLIC MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE
 
     Prior to the Offering, there has been no public market for the Company's
Common Stock. There can be no assurance that, following the Offering, an active

trading market for the Common Stock will develop or be sustained or that the
market price of the Common Stock will not decline below the initial public
offering price. The initial public offering price will be determined through
negotiations between the Company and the Representatives of the Underwriters and
will not necessarily reflect the market price of the Common Stock after the
Offering. See 'Underwriting' for a discussion of the factors to be considered in
determining the initial public offering price. The stock market in recent years
has experienced extreme price and volume fluctuations that have particularly
affected market prices of many growth-oriented companies in industries similar
or related to that of the Company and that have often been unrelated or
disproportionate to the operating performance of such companies. The market
price of the Common Stock could also be subject to significant fluctuations in
response to, and may be adversely affected by, variations in quarterly results,
changes in earnings estimates or other actions by analysts and earnings or other
announcements of the Company's customers or competitors as well as other
factors.
 
IMMEDIATE AND SUBSTANTIAL DILUTION
 
     Purchasers of shares of Common Stock offered hereby will experience
immediate and substantial dilution in the net tangible book value of the Common
Stock. Additional dilution will occur upon exercise or conversion of outstanding
stock options or warrants. See 'Dilution' and 'Shares Eligible for Future Sale.'
 
SHARES ELIGIBLE FOR FUTURE SALE
 
     The                shares offered hereby will be eligible for sale in the
public market immediately following the effective date of the Registration
Statement;            shares will become eligible for sale in the public market
90 days after the effective date of the Registration Statement; and the
remaining outstanding shares will become eligible for sale in the public market
at various dates beginning 180 days after the effective date of the Registration
Statement, approximately         of which will be deemed 'restricted securities'
under the Securities Act of 1933, as amended (the 'Securities Act'), and, as
such, will be subject to restrictions on the timing, manner and volume of sales
of such shares. Holders of                      shares (including shares
 
                                       12
<PAGE>

issuable upon exercise of warrants) have contractual rights to request to have
their shares registered with the Securities and Exchange Commission (the
'Commission') for resale to the public beginning June 30, 1998. In addition,
within 180 days after the effective date of the Registration Statement, the
Company intends to file a registration statement covering the shares of Common
Stock issued or reserved for issuance under the Company's 1995 Stock
Option/Stock Issuance Plan, as amended (the '1995 Stock Plan'), 1996 Stock
Option Plan (the '1996 Option Plan') and 1997 Director Option Plan (the
'Director Plan'), and upon such filing any shares subsequently issued under such
plans will be eligible for sale in the public market, subject to Rule 144
compliance in the case of affiliates of the Company. See 'Shares Eligible for
Future Sale' and 'Description of Capital Stock.'
 
     The Company and its executive officers, directors and stockholders have

agreed that, subject to certain limited exceptions, for a period ending 180 days
after the consummation of the Offering, without the prior written consent of
Friedman, Billings, Ramsey & Co., Inc., they will not, directly or indirectly,
offer, pledge, sell, offer to sell, contract to sell, grant any option to
purchase or otherwise sell, dispose of, make any short sale of, loan or grant
any rights with respect to any shares of Common Stock or any options or warrants
to purchase any shares of Common Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock. The stockholders who
have agreed to these restrictions will hold in the aggregate            shares
of Common Stock, representing approximately       % of the shares of Common
Stock outstanding immediately after the consummation of the Offering. See
'Underwriting' and 'Shares Eligible for Future Sale.'
 
     The sale of a substantial number of shares held by existing stockholders,
whether pursuant to a subsequent public offering or otherwise, or the perception
that such sales could occur, could adversely affect the market price of the
Common Stock and could materially impair the Company's future ability to raise
capital through an offering of equity securities. See 'Shares Eligible for
Future Sale' and 'Underwriting.'
 
EFFECT OF ANTI-TAKEOVER PROVISIONS
 
     The Restated Certificate will be filed upon the closing of the Offering,
pursuant to which the Company's Board of Directors (the 'Board of Directors')
will have the authority to issue up to 5,000,000 shares of Preferred Stock and
to determine the price, rights, conversion ratios, preferences and privileges of
those shares without any further vote or action by the Company's stockholders.
The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of such Preferred Stock. Any
such issuance, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company and could negatively impact the voting power or other
rights of the holders of Common Stock. In addition, such Preferred Stock may
have other rights, including economic rights senior to the Common Stock, and, as
a result, the issuance thereof could have a material adverse effect on the
market value of the Common Stock. The Restated Certificate will provide for a
classified Board of Directors and will permit a member of the Board of Directors
to be removed for cause only upon the affirmative vote of holders of a majority,
or without cause only upon the affirmative vote of at least two-thirds, of the
shares of capital stock of the Company entitled to vote. Furthermore, the
Company is subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law that prohibit the Company from engaging in a
'business combination' with an 'interested stockholder' for a period of three
years after the date of the transaction in which the person first becomes an
'interested stockholder,' unless the business combination is approved in a
prescribed manner. The application of Section 203 could also have the effect of
delaying or preventing a change of control of the Company. Certain other
provisions of the Restated Certificate may have the effect of delaying or
preventing changes of control or management of the Company, which could
adversely affect the market price of the Company's Common Stock. See
'Description of Capital Stock--Delaware Law and Certain Charter and By-Law
Provisions.'
 

                                       13
<PAGE>

                                USE OF PROCEEDS
 
     The net proceeds to Giga from the sale of the             shares of Common
Stock offered hereby are estimated to be $           ($           if the
Underwriters' over-allotment option is exercised in full) after deducting the
underwriting discounts and commissions and estimated offering expenses payable
by the Company and assuming an initial public offering price of $           per
share.
 
     A portion of the net proceeds of the Offering will be used to repay in full
(the 'Bridge Repayment') the Bridge Notes in the aggregate principal amount of
$10 millon issued in April 1998, which notes accrue interest at the rate of 12%
per annum. The proceeds of the issuance of the Bridge Notes were used for
general corporate purposes, including the repayment in full of the remaining
$1.2 million aggregate principal amount of convertible notes, of which a note in
the principal amount of $200,000 was held by a director and former officer. See
'Underwriting' and Notes 11 and 20 to the Consolidated Financial Statements. The
balance of the proceeds will be used for general corporate purposes, including
capital expenditures and working capital. Pending such use, the net proceeds
will be invested in short-term, investment-grade, interest-bearing obligations.
 
                                DIVIDEND POLICY
 
     The Company has never declared or paid any cash dividends on its capital
stock. The Company currently intends to retain earnings, if any, to support its
growth strategy and does not anticipate paying cash dividends in the foreseeable
future. Payment of future dividends, if any, will be at the discretion of the
Board of Directors after taking into account various factors including the
Company's financial condition, operating results, current and anticipated cash
needs and plans for expansion.
 
                                       14
<PAGE>

                                 CAPITALIZATION
 
     The following table sets forth as of March 31, 1998 (i) the actual
capitalization of the Company, (ii) the pro forma capitalization of the Company
to give effect to the Series D Financing and the Preferred Conversion and (iii)
the pro forma capitalization of the Company as adjusted to give effect to (A)
the sale of             shares of Common Stock offered by the Company hereby at
an assumed initial public offering price of $           per share after
deducting the underwriting discount and estimated offering expenses payable by
the Company and (B) the Bridge Repayment. This information should be read in
conjunction with the Company's Consolidated Financial Statements and Notes
thereto appearing elsewhere in this Prospectus.
 

<TABLE>
<CAPTION>
                                                                                         MARCH 31, 1998
                                                                           ------------------------------------------
                                                                                                        PRO FORMA AS
                                                                            ACTUAL     PRO FORMA(1)     ADJUSTED(1)
                                                                           --------    ------------    --------------
                                                                                (IN THOUSANDS, EXCEPT SHARE AND
                                                                                        PER SHARE DATA)
<S>                                                                        <C>         <C>             <C>
Long term debt, less current portion....................................   $    848      $    848         $    848
                                                                           --------    ------------    --------------
Stockholders' Equity:
  Convertible Preferred Stock...........................................         12            --               --
  Preferred Stock, $.001 par value; 5,000,000 shares authorized; none
     issued or outstanding on an actual, pro forma or pro forma as
     adjusted basis.....................................................         --            --               --
  Common Stock, $.001 par value, 50,000,000 shares authorized (actual);
     60,000,000 shares authorized (pro forma and pro forma as adjusted); 
     2,124,142 shares issued and outstanding (actual);
     6,810,926 shares issued and outstanding (pro forma);
                shares issued and outstanding (pro forma as
     adjusted)(2).......................................................          6            18
  Additional paid-in capital............................................     42,584        44,584
  Deferred Compensation.................................................     (1,229)       (1,229)          (1,229)
  Accumulated deficit...................................................    (54,736)      (54,736)         (54,736)
  Cumulative translation adjustments....................................        613           613              613
                                                                           --------    ------------    --------------
     Total stockholders' equity.........................................    (12,750)      (10,750)
                                                                           --------    ------------    --------------
     Total capitalization...............................................   $(11,902)     $ (9,902)        $
                                                                           --------    ------------    --------------
                                                                           --------    ------------    --------------
</TABLE>
 
------------------
(1) Based on shares outstanding as of March 31, 1998. Excludes (i) 1,316,197
    shares of Common Stock issuable upon exercise of options outstanding as of
    March 31, 1998, with a weighted average exercise price of $2.43 per share;
    (ii) 873,273 shares of Common Stock reserved for issuance, as of March 31,
    1998 under the Company's stock plans; (iii) 166,666, 35,959 and 654,432  
    shares of Common Stock issuable upon exercise of warrants outstanding as of
    March 31, 1998, with exercise prices of $3.00, $13.875 and $13.50 per share,
    respectively; and (iv) 35,330 shares of Common Stock issued by the Company
    to employees after March 31, 1998. See 'Management--Executive Compensation'
    and 'Description of Capital Stock.'
 
                                       15

<PAGE>

                                    DILUTION
 
     The pro forma deficit in net tangible book value of the Company at March
31, 1998, was $(           ) million or $(           ) per share. Pro forma net
tangible book value per share represents the amount of total assets, excluding
intangibles, less total liabilities as of March 31, 1998, divided by the number
of shares of Common Stock outstanding on a pro forma basis after giving effect
to the Series D Financing and the Preferred Conversion. After giving effect to
the receipt of the net proceeds from the sale of the            shares of Common
Stock offered by the Company hereby and after deducting the estimated
underwriting discount and offering expenses to be paid by the Company, the pro
forma net tangible book value of the Company at March 31, 1998 would have been
$           million or $           per share. This represents an immediate
increase in net tangible book value of $           per share of Common Stock to
existing stockholders and an immediate dilution of approximately $           per
share to new investors purchasing shares in the Offering. The following table
illustrates the per share dilution:
 
<TABLE>
<S>                                                                        <C>        <C>
Proposed initial public offering price per share........................              $
  Pro forma net tangible book deficit per share before the Offering.....   $(     )
  Increase per share attributable to new investors......................
                                                                           -------
Pro forma net tangible book value per share after the Offering..........
                                                                                      ----------
Dilution per share to new investors.....................................              $
                                                                                      ----------
                                                                                      ----------
</TABLE>
 
     The following table sets forth on a pro forma basis as of March 31, 1998,
the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company and the average price paid per share by the
existing stockholders and by the investors purchasing shares of Common Stock
offered hereby (at an assumed initial public offering price of $           per
share):
 
<TABLE>
<CAPTION>
                                                            SHARES PURCHASED      TOTAL CONSIDERATION
                                                          --------------------    -------------------    AVERAGE PRICE
                                                           NUMBER      PERCENT     AMOUNT     PERCENT      PER SHARE
                                                          ---------    -------    --------    -------    -------------
<S>                                                       <C>          <C>        <C>         <C>        <C>
Existing stockholders..................................                      %    $                 %     $
New investors..........................................                      %    $                 %     $
                                                          ---------    -------    --------    -------
     Total.............................................                 100.0%    $            100.0%
                                                          ---------    -------    --------    -------
                                                          ---------    -------    --------    -------
</TABLE>

 
     The foregoing assumes no exercise of any outstanding stock options or
warrants to purchase shares of Common Stock. As of March 31, 1998, there were
outstanding (i) 1,316,197 shares of Common Stock issuable upon exercise of
options at a weighted average exercise price of $2.43 per share, (ii) 166,666,
35,959, and 654,432 shares of Common Stock issuable upon exercise of warrants
with exercise prices of $3.00, $13.875 and $13.50 per share, respectively. After
March 31, 1998, 35,330 shares of Common Stock were issued by the Company to
employees. In addition, as of March 31, 1998, 873,273 shares of Common Stock
were reserved for future issuance pursuant to the Company's stock plans. To the
extent that the outstanding options and warrants are exercised at prices lower
than the initial public offering price, there will be further dilution to new
investors. See 'Management--Executive Compensation,' 'Certain Transactions' and
'Description of Capital Stock.'
 
                                       16

<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA
 
     The following selected consolidated financial data are derived from the
Consolidated Financial Statements of the Company and the combined financial
statements of BIS Strategic Decisions, Inc. and its five foreign affiliates
(collectively, 'BIS' or the 'Predecessor Companies'). For the period January 1
to December 15, 1993, the operations comprising BIS were those of wholly-owned
subsidiaries of NYNEX Corporation ('NYNEX'). For the period December 16 to
December 31, 1993, the year ended December 31, 1994 and the period January 1 to
April 5, 1995, the operations of BIS were those of wholly-owned subsidiaries of
Friday Holdings, L.P. ('Friday Holdings'). Because of the impact to the
statements of operations of the revaluation of the assets and liabilities in
connection with the acquisitions and the application of different accounting
methods, the results of operations of BIS for the periods under NYNEX and Friday
Holdings ownership are not comparable with each other or with those reported by
the Company.
 
     The Consolidated Financial Statements of the Company as of December 31,
1996 and 1997 and for the period from March 17, 1995 to December 31, 1995 and
the years ended December 31, 1996 and 1997 included elsewhere in this Prospectus
have been audited by Coopers & Lybrand L.L.P., independent accountants. The
consolidated financial statements of the Company as of March 31, 1998 and for
the three months ended March 31, 1997 and 1998 included elsewhere in this
Prospectus are unaudited, however, in the opinion of management, such unaudited
data include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the information included therein. The
results of operations for the period March 17, 1995 to December 31, 1995 and the
three months ended March 31, 1997 and 1998 are not necessarily indicative of the
results for an entire fiscal year or any other interim period. The combined
financial statements of the Predecessor Companies for the period January 1, 1995
to April 5, 1995 included elsewhere in this Prospectus have been audited by
Coopers & Lybrand L.L.P. The combined financial statements of BIS as of December
31, 1993 and 1994 and for the periods January 1, 1993 to December 15, 1993 and
December 16, 1993 to December 31, 1993 and for the year ended December 31, 1994
are derived from unaudited combined financial statements not included in this
Prospectus, however, in the opinion of management, such unaudited data include
all adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of the information included therein. The selected historical
financial data should be read in conjunction with 'Management's Discussion and
Analysis of Financial Condition and Results of Operations,' and the Consolidated
Financial Statements and notes thereto appearing elsewhere in this Prospectus.
 
                                       17

<PAGE>

<TABLE>
<CAPTION>
                                                                                                            COMPANY
                                                                                                     ----------------------
                                                PREDECESSOR COMPANIES                                                YEAR
                                 ----------------------------------------------------   PRO FORMA                   ENDED
                                  JANUARY 1    DECEMBER 16       YEAR      JANUARY 1       YEAR        MARCH 17    DECEMBER
                                      TO            TO          ENDED          TO         ENDED           TO         31,
                                 DECEMBER 15,  DECEMBER 31,  DECEMBER 31,   APRIL 5,   DECEMBER 31,  DECEMBER 31,  --------
                                     1993          1993          1994         1995       1995(1)         1995        1996
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
                                                      (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                              <C>           <C>           <C>           <C>         <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Continuous information
    services....................   $     --      $     --      $     --      $   --      $     --      $     --    $  3,149
  Other services................      5,815            91         7,366       1,833         8,543         5,517       6,043
  Publications..................      1,311            51           800         283         1,725         1,442         946
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
    Total revenues..............      7,126           142         8,166       2,116        10,268         6,959      10,138
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
Costs and expenses:
  Cost of services..............      4,268           267         5,143       1,182         7,172         4,707      12,336
  Cost of publications..........        726            64           446         240           586           346         790
  Sales and marketing...........      1,448            92         1,438         167           972         1,016       6,706
  Research and development......         --            --            --          --           348           348       1,789
  General and administrative....      3,431           140         4,027       1,047         6,934         5,760       9,739
  Depreciation and
    amortization................        613            32         2,943         215         1,964         1,387       2,391
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
    Total costs and expenses....     10,486           595        13,997       2,851        17,976        13,564      33,751
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Operating loss................     (3,360)         (453)       (5,831)       (735)       (7,708)       (6,605)    (23,613)
Interest income.................        100             7            96          23           274           246         515
Interest expense................        (38)           (4)          (26)         (4)         (134)         (100)        (95)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Loss from continuing
    operations before income
    taxes (benefit).............     (3,298)         (450)       (5,761)       (716)       (7,568)       (6,459)    (23,193)
Income tax benefit (charge).....     (1,035)           --        (1,098)       (213)       (1,311)       (1,093)       (491)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Loss from continuing
    operations..................     (2,263)         (450)       (4,663)       (503)       (6,257)       (5,366)    (22,702)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
Discontinued operations:
  Income (loss) from the
    discontinued BIS market
    research business (net of
    tax effect).................      2,972            44        (1,469)        597         2,097         1,490         (79)

  Income (loss) from the
    discontinued Shrapnel
    business (net of tax
    effect).....................         70           (12)         (401)         54           154           154        (134)
  Income (loss) on disposal of
    discontinued BIS market
    research business (net of
    tax effect).................         --            --            --          --            --            --      (2,315)
  Income (loss) on disposal of
    discontinued Shrapnel
    business (net of tax
    effect).....................         --            --            --          --            --            --        (160)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Income (loss) from
    discontinued operations.....      3,042            32        (1,870)        651         2,251         1,644      (2,688)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Net income (loss).............   $    779      $   (418)     $ (6,533)     $  148      $ (4,006)     $ (3,722)   $(25,390)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
Historical results per common
  and common equivalent share:
    Loss from continuing
      operations................
    Income (loss) from
      discontinued operations...
    Income (loss) from disposal
      of discontinued
      operations................
    Net income (loss)...........
Historical weighted average
  common and common equivalent
  shares outstanding............
Pro forma results per common and
  common equivalent share:
    Loss from continuing
      operations................
    Income (loss) from
      discontinued operations...
    Income (loss) from disposal
      of discontinued
      operations................
    Net income (loss)...........
Pro forma weighted average
  common and common equivalent
  shares outstanding............
 

<CAPTION>
                                                 COMPANY
                                  -----------------------------------
                                    Year      
                                    Ended     
                                   December      THREE MONTHS ENDED
                                     31,             MARCH 31,
                                  ----------  ------------------------
                                     1997        1997          1998
                                  ----------  ----------    ----------
 
<S>                              <C>          <C>           <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Continuous information
    services....................  $   14,600  $    2,570    $    6,804
  Other services................       4,715       1,276         1,693
  Publications..................         344         180            55
                                  ----------  ----------    ----------
    Total revenues..............      19,659       4,026         8,552
                                  ----------  ----------    ----------
Costs and expenses:
  Cost of services..............      12,477       3,202         4,391
  Cost of publications..........         174          75            71
  Sales and marketing...........      19,617       4,158         5,781
  Research and development......       1,975         659           339
  General and administrative....       6,419       1,061         1,339
  Depreciation and
    amortization................       2,810         634           385
                                  ----------  ----------    ----------
    Total costs and expenses....      43,472       9,789        12,306
                                  ----------  ----------    ----------
  Operating loss................     (23,813)     (5,763)       (3,754)
Interest income.................         277          98            37
Interest expense................        (235)        (17)          (86)
                                  ----------  ----------    ----------
  Loss from continuing
    operations before income
    taxes (benefit).............     (23,771)     (5,682)       (3,803)
Income tax benefit (charge).....        (641)          7             4
                                  ----------  ----------    ----------
  Loss from continuing
    operations..................     (23,130)     (5,689)       (3,807)
                                  ----------  ----------    ----------
Discontinued operations:
  Income (loss) from the
    discontinued BIS market
    research business (net of
    tax effect).................          --          --            --
  Income (loss) from the
    discontinued Shrapnel
    business (net of tax
    effect).....................          --          --            --

  Income (loss) on disposal of
    discontinued BIS market
    research business (net of
    tax effect).................       1,101          --            --
  Income (loss) on disposal of
    discontinued Shrapnel
    business (net of tax
    effect).....................         212          --
                                  ----------  ----------    ----------
  Income (loss) from
    discontinued operations.....       1,313          --            --
                                  ----------  ----------    ----------
  Net income (loss).............  $  (21,817) $   (5,689)   $   (3,807)
                                  ----------  ----------    ----------
                                  ----------  ----------    ----------
Historical results per common
  and common equivalent share:
    Loss from continuing
      operations................      (11.16)                    (1.80)
    Income (loss) from
      discontinued operations...          --                        --
    Income (loss) from disposal
      of discontinued
      operations................        0.63                        --
    Net income (loss)...........      (10.53)                    (1.80)
Historical weighted average
  common and common equivalent
  shares outstanding............   2,072,837                 2,115,837
Pro forma results per common and
  common equivalent share:
    Loss from continuing
      operations................       (3.42)                    (0.56)
    Income (loss) from
      discontinued operations...          --                        --
    Income (loss) from disposal
      of discontinued
      operations................        0.19                        --
    Net income (loss)...........       (3.23)                    (0.56)
Pro forma weighted average
  common and common equivalent
  shares outstanding............   6,759,621                 6,802,621
</TABLE>
 
                                       18

<PAGE>

<TABLE>
<CAPTION>
                                                        PREDECESSOR COMPANIES                    COMPANY
                                                      --------------------------  ---------------------------------------
                                                             DECEMBER 31,                      DECEMBER 31,
                                                      --------------------------  ---------------------------------------
                                                          1993          1994          1995         1996          1997    
                                                      ------------  ------------  ------------  ----------   ------------
                                                                         (IN THOUSANDS)                                  
<S>                                                   <C>           <C>           <C>           <C>         <C>          
BALANCE SHEET DATA:                                                                                                      
Cash and cash equivalents............................   $  2,639      $  1,693      $ 16,876      $8,286       $  3,539  
Working capital (deficit)............................      1,905        (1,503)       11,549         113        (10,196) 
Total assets.........................................     10,181         7,509        24,833      19,679         23,023  
Deferred revenues....................................        762         1,232         2,201       6,832         20,604  
Long term debt, less current portion.................         --            --         1,437       1,511            937  
Total stockholders' equity...........................      6,942         2,017        14,972       1,659         (9,090) 
                                                                                                                           
<CAPTION>
                                                                            COMPANY
                                                                          ----------- 
                                                                           MARCH 31,
                                                                              1998
                                                                          ------------
                                                                        
<S>                                                                       <C>
BALANCE SHEET DATA:                                                     
Cash and cash equivalents..............................................     $  1,753
Working capital (deficit)..............................................      (13,821)
Total assets...........................................................       15,673
Deferred revenues......................................................       19,458
Long term debt, less current portion...................................          848
Total stockholders' equity.............................................      (12,750)
</TABLE>
 
------------------
(1) The pro forma results reflect the results of operations as if the
    acquisitions of BIS and ExperNet had occurred on January 1, 1995. See Note 3
    to the Consolidated Financial Statements.
 
                                       19


<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
ORGANIZATION OF THE COMPANY AND FINANCIAL STATEMENT PRESENTATION
 
     The Company was organized on March 17, 1995. In April 1995, the Company
acquired BIS as part of its strategic plan to accelerate the development of its
Continuous Information Services business and to obtain the marketing, sales and
other corporate infrastructures and certain personnel of BIS. In July 1995, the
Company acquired a majority equity interest in ExperNet Corporation ('ExperNet
Corporation'), which was owned by Gideon I. Gartner and David L. Gilmour, each
at the time, a director and officer of the Company, and, in December 1995,
acquired the remaining equity interest.
 
     This Prospectus includes the financial statements of BIS, as the
predecessor to the Company, through the period ended April 5, 1995, the date of
acquisition by the Company. The period January 1 to December 15, 1993 is shown
separately for the Predecessor Companies because of a prior acquisition by an
unrelated entity on December 16, 1993. The periods covered by the financial
statements of the Company commence on March 17, 1995, the date of its
incorporation, and include the results of operations of BIS from April 5, 1995
and the results of operations of ExperNet Corporation from July 6, 1995, their
respective dates of acquisition. Results of operations of ExperNet Corporation
are not included in results of Predecessor Companies, which are solely the
results of BIS. The acquisition of BIS was accounted for under the purchase
method; accordingly, acquired assets were recorded at their estimated fair
values and related goodwill of approximately $3.1 million was also recorded and
was amortized over two years. The acquisition of ExperNet Corporation was also
accounted for as a purchase with the related goodwill of approximately $1.4
million amortized over five years. During 1997, the unamortized portion of the
goodwill relating to the ExperNet acquisition was written off, resulting in a
charge to amortization expense of $1,025,000.
 
     In June 1996, the Company discontinued the BIS market research business.
Results of operations from the discontinued BIS market research business are
reflected as discontinued operations in the Company's financial statements. The
Company continues to generate revenues from the events businesses acquired as
part of the acquisition of BIS, which are reflected in the statements of
operations as Other Services. As a result of the discontinuance of the BIS
market research business, Giga recorded a charge, net of taxes, of approximately
$2.3 million in the year ended December 31, 1996. The Company entered into
agreements with two unrelated parties which have assumed responsibility for
fulfillment of the Company's obligations to former BIS customers in exchange for
a share of the deferred revenues recorded by Giga with respect to such
customers. In 1997, the Company recorded a gain of approximately $1.1 million
comprised mainly of a reversal of the provision for future lease commitments and
related expenses for two facilities in England and the provision which was
established for refunds to potentially dissatisfied customers. The Company does
not consider the historical results of BIS operations which have been
discontinued to be meaningful or indicative of the Company's future results of
operations.
 

     In December 1996, the Company discontinued its econometric forecasting
business based in Australia in anticipation of selling the business to local
management. The Company recorded a provision of $160,000 in 1996 for anticipated
operating losses prior to the completion of the sale by the Company. In August
1997, the operations were sold to local management for approximately $293,000
and a gain of approximately $202,000, net of taxes was recorded and is reflected
in disposal of discontinued operations. Results of operations from the
discontinued econometric forecasting business are included among Discontinued
Operations in the Company's financial statements.
 
OVERVIEW
 
     Giga provides objective analyses and advice relating to developments and
trends in the IT industries to assist its customers in making technology-related
decisions. The Company's four principal products and services are (i) Advisory
Service, (ii) IT Practice Services, (iii) Continuous Advisory Consulting and
(iv) Events and Publications. The Company provides its services primarily
through GigaWeb, its intelligent Internet-based information delivery interface.
 
     The Company introduced its Advisory Service and GigaWeb in April 1996. In
July 1996, the Company introduced its IT Practice Services. Advisory Consulting
was introduced in September 1997. The Company's
 
                                       20
<PAGE>

Events and Publications product line was acquired with the acquisition of BIS in
April 1995. The Company expects that revenues from its Continuous Information
Services will continue to increase as a percentage of its total revenues.
 
     For financial reporting purposes, revenues from (i) Advisory Service, IT
Practice Services and Continuous Advisory Consulting are aggregated into
Continuous Information Services, (ii) Events and other services, principally
consulting, are aggregated into Other Services and (iii) Publications are listed
separately.
 
     The Company's Continuous Information Services are typically sold through
annual contracts that generally provide for payment at the commencement of the
contract period. Amounts received in advance of services provided are reflected
in the Company's financial statements as deferred revenues and are recognized
monthly on a pro rata basis over the term of the contract. Revenues from Other
Services are recognized as follows: events as they occur and consulting as such
services are performed. Revenues from Publications are recognized when
publications are delivered.
 
     The Company believes that a leading measure of the volume of its CIS
business is the annualized value ('Annualized Value') of its Continuous
Information Services agreements in effect at a given point in time. The Company
calculates Annualized Value each month as the cumulative annualized subscription
value payable under the agreements without regard to commencement date, duration
or risk of cancellation. The Company also measures its performance on the basis
of Net Annualized Value Increase ('NAVI') which is calculated on the basis of
new agreements plus upgrades, net of downgrades and cancellations. The sum of
all past NAVI equals Annualized Value. Historically, a substantial portion of

NAVI for a given year is generated by the Company in the last two calendar
quarters, and particularly in the last month of the last quarter. The following
table sets forth the Annualized Value and NAVI for the years ended December 31,
1996 and 1997 and the three months ended March 31, 1997 and 1998.
 
<TABLE>
<CAPTION>
                                                                                         UNAUDITED
                                                                          ---------------------------------------
                                                                             YEARS ENDED       THREE MONTHS ENDED
                                                                            DECEMBER 31,           MARCH 31,
                                                                          -----------------    ------------------
                                                                           1996      1997       1997       1998
                                                                          ------    -------    -------    -------
                                                                                      (IN THOUSANDS)
<S>                                                                       <C>       <C>        <C>        <C>
Beginning Annualized Value.............................................   $   --    $ 9,339    $ 9,339    $26,619
Net Annualized Value Increase..........................................    9,339     17,280      2,384      2,878
                                                                          ------    -------    -------    -------
Ending Annualized Value................................................   $9,339    $26,619    $11,723    $29,497
                                                                          ------    -------    -------    -------
                                                                          ------    -------    -------    -------
</TABLE>
 
     A majority of the Company's annual contracts renew automatically unless the
customer cancels the subscription. The Company's experience is that a
substantial portion of customers renew expiring contracts for an equal or
greater level of total CIS fees each year. As of March 31, 1998, approximately
66% of Giga's customers had renewed one or more contracts for Giga's services in
the past twelve months. The Company believes that a direct comparison of its
renewal rates and the renewal rates of its major competitors may not be
meaningful due in part to the Company's limited operating history and its
Advisory Service model (the focus of which is a unified, integrated approach
with fewer contracts/services per customer), in contrast to the multiple-service
model of the Company's major competitors.
 
     The Company anticipates that Annualized Value, at a point in time, will be
a reliable indicator of the minimum next twelve months' CIS revenues. However,
the Company's current renewal rate is not necessarily indicative of the rate of
retention of the Company's revenue base, and Annualized Value at any given time
may not be indicative of future revenues or cash flows, especially if the rate
of renewal of existing agreements or the timing of new agreements were to
significantly change during the following 12 months compared to historical
experience. There can be no assurance that the Company will be able to sustain
or increase its current renewal rate or that Annualized Value will continue to
grow.
 
     The Company's operating expenses consist of cost of services, cost of
publications, selling and marketing, research and development, general and
administrative, and depreciation and amortization. Cost of services consists
primarily of the direct costs associated with the delivery of the Company's
Continuous Information Services and other services including personnel expenses
for analysts and other personnel, direct expenses for events and conferences,
and royalties to third party information providers. Cost of publications

consists of expenses to create, print and distribute publications. Sales and
marketing expenses include personnel expenses,
 
                                       21
<PAGE>

promotional expenses, and sales commissions. Sales commissions are typically
deferred when paid and expensed as the related revenue is recognized. Research
and development expenses consist of personnel, consulting and other expenses to
develop, enhance and operate GigaWeb. General and administrative expenses are
primarily personnel costs and fees for professional services supporting the
administrative functions of the Company.
 
     Since its inception, the Company has incurred substantial costs to develop
its Continuous Information Services, establish its GigaWeb system, build a
management team and recruit, employ and train research analysts, sales personnel
and support staff for its business. The Company expects to incur significant
losses through at least fiscal 1998 as the Company expands and develops its
services and products.
 
     The Company has incurred substantial tax loss carryforwards since
inception, and acquired tax loss carryforwards with its acquisition of BIS, all
of which aggregate to approximately $51.8 million at March 31, 1998. Due to the
magnitude of these existing tax loss carryforwards, the continuing anticipated
losses through at least 1998 and the substantial uncertainties associated with
its business, the Company is unable to conclude that it is more likely than not
that the deferred tax associated with these tax loss carryforwards will be
realized. Accordingly, this deferred tax asset has been fully reserved. This
valuation allowance will be reduced and the deferred tax asset will be
recognized when and if it becomes more likely than not that the deferred tax
asset will be realized.
 
RESULTS OF OPERATIONS
 
     The following table sets forth certain financial data as a percentage of
total revenues for the periods indicated.
 
<TABLE>
<CAPTION>
                                                                    PRO FORMA                        THREE MONTHS
                                                                   ------------      YEAR ENDED       ENDED MARCH
                                                                    YEAR ENDED      DECEMBER 31,          31,
                                                                   DECEMBER 31,    --------------    -------------
                                                                       1995        1996     1997     1997     1998
                                                                   ------------    -----    -----    -----    ----
<S>                                                                <C>             <C>      <C>      <C>      <C>
Revenues:
  Continuous information services ..............................         --           31%      74%      64%     79%
  Other services................................................         83%          60       24       32      20
  Publications..................................................         17            9        2        4       1
                                                                     ------        -----    -----    -----    ----
    Total revenues..............................................        100          100      100      100     100
                                                                     ------        -----    -----    -----    ----

Costs and expenses:
  Cost of services..............................................         70          122       63       80      51
  Cost of publications..........................................          6            8        1        2       1
  Sales and marketing...........................................          9           66      100      103      68
  Research and development......................................          3           18       10       16       4
  General and administrative....................................         68           96       33       26      16
  Depreciation and amortization.................................         19           24       14       16       5
                                                                     ------        -----    -----    -----    ----
    Total costs and expenses....................................        175          333      221      243     144
                                                                     ------        -----    -----    -----    ----
  Loss from operations..........................................        (75)        (233)    (121)    (143)    (44)
Interest income (expense), net..................................          1            4        0        2      (1)
                                                                     ------        -----    -----    -----    ----
  Loss from continuing operations before income taxes...........        (74)        (229)    (121)    (141)    (45)
Income tax (benefit) charge.....................................        (13)          (5)      (3)       0       0
                                                                     ------        -----    -----    -----    ----
  Loss from continuing operations...............................        (61)        (224)    (118)    (141)    (45)
  Income (loss) from discontinued operations....................         22          (27)       7       --      --
                                                                     ------        -----    -----    -----    ----
  Net loss......................................................        (39)%       (250)%   (111)%   (141)%   (45)%
                                                                     ------        -----    -----    -----    ----
                                                                     ------        -----    -----    -----    ----
</TABLE>
 
     In general, the decreases in the various operating expenses as a percentage
of total revenues are primarily due to leveraging those expenses over increased
revenues derived from a growing customer base.
 
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
 
     Revenues. Total revenues increased 112% to $8.6 million for the three
months ended March 31,1998 from $4.0 million for the same period in 1997. The
increase in total revenues was primarily due to the increase in revenues from
Continuous Information Services.
 
     Revenues from Continuous Information Services increased 165% to $6.8
million for the three months ended March 31, 1998 from $2.6 million for the same
period in 1997. This increase in revenues was primarily due to growing market
acceptance of Giga's services and continued expansion of the Company's sales
force.
 
                                       22
<PAGE>

     Revenues from Other Services increased 33% to $1.7 million for the three
months ended March 31, 1998 from $1.3 million for the same period in 1997. The
increase was primarily due to higher revenues from the planned expansion of the
Company's events and conferences activities net of a decrease in consulting
revenues associated with the phase-out of certain consulting activities.
 
     Revenues from Publications decreased 69% to $55,000 for the three months
ended March 31, 1998 from $180,000 for the same period in 1997. The decrease was
due to a de-emphasis on this business activity.
 

     Cost of services. Cost of services increased 37% to $4.4 million for the
three months ended March 31, 1998 from $3.2 million for the same period in 1997.
The increase in costs was primarily due to the expansion of the analyst staff
and other expenses associated with providing Continuous Information Services.
 
     Cost of publications. Cost of publications decreased 5% to $71,000 for the
three months ended March 31, 1998 from $75,000 for the same period in 1997. The
decrease was primarily attributable to a continued reduction in the number of
publications produced.
 
     Sales and marketing. Sales and marketing expenses increased 39% to $5.8
million for the three months ended March 31, 1998 from $4.2 million for the same
period in 1997. The increase was principally due to the continued expansion of
the Company's direct sales organization and higher sales commission expense from
increased revenues.
 
     Research and development. Research and development expenses decreased 49%
to $339,000 for the three months ended March 31, 1998 from $659,000 for the same
three-month period in 1997. The decrease was primarily due to the completion of
the development of the basic functionality of GigaWeb in 1997.
 
     General and administrative. General and administrative expenses increased
26% to $1.3 million for the three months ended March 31, 1998 from $1.1 million
for the same period in 1997. The increase in expense was primarily due to
enhancements to infrastructure such as internal systems, additional personnel
and other items to support the Company's growth.
 
     Depreciation and amortization. Depreciation and amortization expense
decreased 39% to $385,000 for the three months ended March 31, 1998 from
$634,000 for the same period in 1997. The decrease was primarily due to the
Company's practice in 1997 to rent, instead of purchase, computer equipment.
 
     Interest income and expense. Interest income decreased to $37,000 for the
three months ended March 31, 1998 from $98,000 for the same period in 1997 due
to lower cash balances available for investment. Interest expense increased to
$86,000 from $17,000 for the same period in 1997 due to a long-term equipment
financing loan agreement entered into by the Company in June 1997.
 
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 AND 1995 (PRO FORMA)
 
     For purposes of the following discussion, the results for the year ended
December 31, 1995 are presented on a pro forma basis to reflect (i) the
operations of the Predecessor Companies from January 1, 1995 to April 5, 1995,
(ii) the operations of the Company from March 17, 1995 to December 31, 1995 and
(iii) the operations of ExperNet and the amortization of goodwill incurred in
connection with the acquisition of the Predecessor Companies as though such
acquisitions occurred on January 1, 1995. The results of the BIS market research
business and the Australian econometric forecasting operation have been shown as
discontinued operations. The Company's activities from March 17, 1995 to April
5, 1995 were principally devoted to the acquisition of the Predecessor
Companies.
 
     Revenues. Total revenues increased 94% to $19.7 million in 1997 from $10.1
million in 1996 and were essentially unchanged in 1996 from $10.3 million in

1995. These changes in total revenues were primarily due to increased revenues
from Continuous Information Services, offset by decreased revenues from Other
Services.
 
     Revenues from Continuous Information Services increased 364% to $14.6
million in 1997 from $3.2 million in 1996. The Company began marketing its
Continuous Information Services in April 1996. The increase in revenues was
primarily due to growing market acceptance of Giga's services and continued
expansion of the Company's sales force.
 
     Revenues from Other Services decreased 22% to $4.7 million in 1997 from
$6.0 million in 1996 and 29% in 1996 from $8.5 million in 1995. The decrease in
such revenues in 1997 was principally due to a planned phase-
 
                                       23
<PAGE>

out of BIS's consulting business offset by increased revenues from the Company's
events and conferences. The decrease in revenues in 1996 compared to 1995 was
primarily due to the decrease in certain consulting activities.
 
     Revenues from Publications decreased 64% to $344,000 in 1997 from $946,000
in 1996 and 45% in 1996 from $1.7 million in 1995. The decreases were primarily
due to a de-emphasis on this business activity.
 
     Cost of services. Cost of services decreased 1% to $12.5 million in 1997
from $12.3 million in 1996 and increased 72% in 1996 from $7.2 million in 1995.
The cost decrease in 1997 was primarily due to decreased expenses for the legacy
BIS consulting business being phased-out, offset by increased expenses to
provide Continuous Information Services to the Company's growing customer base.
The cost increase in 1996 was due to the Company's substantial investment to
build its research organization and retain consultants for the Company's
Continuous Information Services.
 
     Cost of publications. Cost of publications decreased 78% to $174,000 from
$790,000 in 1996 and increased 35% in 1996 from $586,000 in 1995. The decrease
in 1997 was principally due to a planned decrease in the number of publications.
The increase in 1996 was primarily due to a change in the mix of publications
sold.
 
     Sales and marketing. Sales and marketing expenses increased 193% to $19.6
million in 1997 from $6.7 million in 1996 and 590% in 1996 from $972,000 in
1995. The increase in 1997 was primarily due to the expansion of the Company's
sales organization to sell its Continuous Information Services and higher sales
commission expense from increased revenues. The increase in 1996 was principally
attributable to the increased investment in marketing programs and expansion of
the Company's sales force in connection with the introduction of its Continuous
Information Services in April 1996.
 
     Research and development. Research and development increased 10% to $2.0
million in 1997 from $1.8 million in 1996 and 414% in 1996 from $348,000 in
1995. The increase in 1997 was primarily due to the continued enhancement of
GigaWeb to meet evolving market needs. The increase in 1996 was due to the
investment required for the development of GigaWeb and ExperNet.

 
     General and administrative. General and administrative expenses decreased
34% to $6.4 million in 1997 from $9.7 million in 1996 and increased 40% in 1996
from $7.0 million in 1995. The decrease in 1997 from 1996, and the increase in
1996 over 1995, was primarily due to one-time expenses in 1996 for internal
systems, facilities, personnel, and other items to build the infrastructure to
support the expansion of the Company's operations.
 
     Depreciation and amortization. Depreciation and amortization expenses
increased 18% to $2.8 million in 1997 from $2.4 million in 1996 and 22% in 1996
from 2.0 million in 1995. The increase in 1997 was due primarily to the
write-off of the remaining amount of unamortized goodwill associated with the
ExperNet acquisition offset by the Company's practice in 1997 to rent rather
than purchase computer equipment.
 
     Interest income and expense. Interest income was earned on cash balances,
in excess of then current operating needs, from the Company's equity financing
during 1996 and 1997. Interest expense is primarily from long-term debt for
equipment financing and acquisitions and varies with the outstanding balance.
 
     Discontinued operations. In June 1996, the Company discontinued its BIS
market research business and, as a result, recorded a charge of approximately
$2.3 million, net of taxes, in the year ended December 31, 1996. In 1997, the
Company recorded income, net of taxes, of $1.1 million from the settlement of a
liability relating to a long-term, foreign lease and the renewal of a provision
established for refunds to potentially dissatisfied customers that had been part
of the aforementioned charge.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Since its inception, the Company has funded its operations primarily
through the private placement of equity securities and borrowings under
promissory notes. The Company has received aggregate net proceeds of $43.4
million from the private placement of equity securities and recently borrowed
$10.0 million under the Bridge Notes. At March 31, 1998, the Company had cash
and cash equivalents of $1.8 million. See Notes 11, 13 and 20 to the
Consolidated Financial Statements.
 
     During 1997 and the three months ended March 31, 1998, the Company's
capital expenditures totaled approximately $559,000 and $261,000, respectively,
primarily for computer equipment. The Company expects
 
                                       24
<PAGE>

that additional purchases of computer equipment will be made as the Company's
employee base and customer base grow. As of March 31, 1998, the Company had no
material commitments for capital expenditures.
 
     Net cash used by continuing operations was approximately $17.7 million and
$14.5 million for the years ended December 31, 1996 and 1997, respectively, and
approximately $1.3 million for the three months ended March 31, 1998. Net cash
used by investing activities of approximately $206,000 for the year ended
December 31, 1997 and approximately $251,000 for the three months ended March

31, 1998 were primarily due to purchases of computer equipment. Cash provided
from financing activities of approximately $17.7 million for the period March
17, 1995 to December 31, 1995 and approximately $11.6 million and $11.7 million
for the years ended December 31, 1996 and 1997, respectively, were primarily
generated by the issuance of the Common Stock and Preferred Stock as previously
described. Cash used by financing activities for the three months ended March
31, 1998 of $231,000 was principally used to repay long-term debt.
 
     In April 1998, the Company issued the Bridge Notes in the aggregate
principal amount of $10.0 million and warrants to purchase an aggregate of
166,666 shares of Common Stock at an exercise price of $3.00 per share. The
outstanding principal amount of, and any unpaid accrued interest on, the Bridge
Notes is due and payable upon completion of the Offering. In April 1998 and May
1998, the Company issued an aggregate of $2.0 million of Series D Preferred
Stock. See 'Certain Transactions' and Note 20 to the Consolidated Financial
Statements for additional information concerning these transactions. The Company
believes that the net proceeds from the Offering, together with its existing
cash and cash equivalents and cash generated from operations, will be sufficient
to fund the Company's cash needs for at least the next twelve months.
 
     The Company has spent substantial amounts to date and expects capital and
operating expenditures to increase due to numerous factors, including the
Company's plans to increase marketing efforts for its Continuous Information
Services, the expected costs to attract and retain qualified employees,
including research and sales personnel, on a timely basis and the related costs
of such efforts, the response of competitors to the Company's services, the
Company's plans to develop and market new services and products, the further
enhancement of the GigaWeb system and the Company's expansion of its
international operations, and the continued acceptance by customers of annual
membership agreements providing for advance payments rather than equal monthly
installments or some other payment model. The Company anticipates funding its
ongoing working capital needs principally through the net proceeds to the
Company from the Offering. However, in the event that the Company encounters
difficulties in collecting accounts receivable, experiences low or reduced
subscription renewal rates or otherwise has revenues that are lower than
planned, the Company might require additional working capital and there can be
no assurance that such capital would be available to the Company on terms that
are acceptable, if at all. If adequate funds are not available, the Company may
be required to reduce its fixed costs and delay, scale back or eliminate certain
of its services, any of which could have a material adverse effect in the
Company's business, financial condition and results of operations. See 'Risk
Factors--Substantial Future Capital Needs; Risks of Working Capital Deficiency.'
 
OTHER FACTORS THAT MAY AFFECT FUTURE PERFORMANCE
 
     Many currently installed computer systems and software products are coded
to accept only two digit entries in the date code field. Beginning in the year
2000, these date code fields will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. The Company has
commenced efforts to ensure that the computer systems and applications upon
which it relies for internal operations and external communications, and
presently expects to use following December 31, 1999, are or will be year 2000
compliant. While uncertainty exists concerning the potential effects associated
with such compliance, the Company does not believe that year 2000 compliance

will result in a material adverse effect on its business, financial condition
and results of operations.
 
                                       25
<PAGE>

                                    BUSINESS
 
GENERAL
 
     The Company provides objective analyses and advice relating to developments
and trends in the computing, telecommunications, and related industries
(collectively, the 'Information Technology' or 'IT' industries) to assist its
customers in making technology-related decisions. IT is critical to the
competitiveness and long-term viability of a wide range of organizations. The
Company believes information overload, confusion, and anxiety exists among IT
decision-makers. As a result, an increasing number of organizations are turning
to Continuous Information Service ('CIS') providers to monitor and analyze IT
developments and to identify trends to support such organizations' IT
decision-making needs. The Company's Continuous Information Services are
available to customers for an annual subcription fee billed and payable in
advance, which entitles members to (i) access all the Company's advisory service
information and analyses, (ii) inquiry privileges and (iii) participate in
briefings, a conference and teleconferences.
 
CIS MARKET
 
     The CIS industry emerged in the 1960's in response to the complexity and
growth in the IT market. In the early stages of the CIS industry's development,
CIS providers primarily produced quantitative analyses of IT industry trends to
assist vendors with product planning and formulation of marketing and business
strategies. The IT industry continued to rapidly evolve and increasingly became
characterized by short product life cycles, highly complex, distributed
computing and telecommunications architectures and IT systems made up of
hardware and software from a wide variety of vendors. As a result,
decision-making by users of IT products and services became increasingly
complicated, straining the analytic resources within organizations. In response
to this opportunity, a second generation of CIS providers emerged by the 1980's,
offering analytical and decision-support information to users, in addition to
the quantitative information offered to vendors. These second generation
providers continued to be characterized by multiple information service
offerings, each of which focused on a specific aspect of the IT industry, such
as mainframes, personal computers, operating systems, application development
tools or relational databases. Over time, as IT became more complex, the number
of such services proliferated.
 
     In the 1990's, the continuous expansion of technological choices has made
IT operations even more complex and diverse, particularly with the migration
from legacy mainframe systems to distributed client-server and other
architectures and the emergence of the Internet, together with advanced
telecommunications offerings. As a result, organizations are increasingly
turning to outside consultants for support. In addition to users and vendors, an
emerging segment of the CIS market includes business managers, who require
increased awareness of IT issues to heighten sensitivity to systems

opportunities, and small businesses, which are becoming more reliant on
technology.
 
     The Company believes that the multiple-service model is not well positioned
to effectively address the critical and evolving IT needs of modern
organizations. Due to the complexity and interrelationships among the various
aspects of IT, the Company believes organizations require integrated advice that
is not limited to the boundaries of the second generation model. In addition,
since IT solutions also often require practical, hands-on experience, CIS
providers must complement the strategy-oriented consultative skills of many of
today's industry analysts with pragmatic real-world advice. Due to increasing
time and budget pressures, customers must also be able to quickly and
efficiently search through the voluminous resources and published content of CIS
providers to locate the particular analyses and expertise they require.
 
THE GIGA SOLUTION
 
     Giga was founded by Gideon I. Gartner, who in 1979 founded Gartner Group,
Inc. Building on his extensive experience and success in the CIS industry, Mr.
Gartner formed Giga with the objective of creating a new approach toward
addressing the CIS needs of IT users and vendors. Giga has developed a range of
innovative Continuous Information Services, as well as an effective, electronic
information delivery mechanism, designed to provide integrated IT analyses and
advice.
 
                                       26
<PAGE>

     Foremost among these innovations is the Company's unified Advisory Service,
in which IT research and analysis is offered to customers as a single service
intended to encompass the variety of IT coverage offered by other CIS providers
through multiple and fragmented services. The Company believes that its Advisory
Service (i) delivers the comprehensive viewpoint required by customers, (ii)
offers a price/performance advantage over the second generation model since the
payment of one subscription fee provides access to all advisory research and
(iii) becomes increasingly cost effective over time as new advisory research is
added without increased subscription fees.
 
     Giga's service approach was developed in response to the needs of the CIS
market. The Company's unified Advisory Service produces internal benefits which
the Company believes allows it to better service its customers, including (i)
flexibility of resource allocation, (ii) an orientation toward internal
collaboration and (iii) the development of experienced generalists, who are able
to diagnose broad client challenges and communicate effectively with clients.
The process is also designed to be objective, by virtue of several features
built into Giga's methodologies, such as a requirement that analysts articulate
balanced opinions. In addition, research is available to clients on a timely
basis, through GigaWeb's sophisticated authoring technology. The customization
features permitted by GigaWeb also make Giga's research more relevant to
specific client environments.
 
     As part of its Continuous Advisory Consulting services, the Company also
enters into on-going retainer-based consulting arrangements with its customers
to assess various IT issues, including an organization's strategic technology

plan, a vendor's marketing plan, or the implementation issues surrounding a
major technology migration. Advisory Consulting is a valuable extension of the
Company's client inquiry process, enabling customers to request more in-depth
analysis targeted at the application of technology to their specific situation.
 
     The Company also offers customers its innovative IT Practice Services to
complement its Advisory Service. Giga employs former IT operating executives to
survey leading IT organizations, document the techniques and methods ('best
practices') used by IT managers within these organizations, and deliver the
results to customers, which can be combined with consulting servies. Each of
these services focuses on a distinct job function within an IT organization,
permitting customers to benchmark their IT practices against those of peers and
to obtain new ideas.
 
     GigaWeb, the Company's Internet-based information delivery interface allows
customers to easily and efficiently navigate through the full spectrum of
original research and third-party content available through the Advisory
Service. Through the use of intelligent software agents, the Company is able to
provide customized information to each customer and to allow customers to search
for and select the information that is most relevant to their particular needs.
GigaWeb also enables collaboration with Giga's clients and maintains rich
features which improve the usability of Giga research. In addition, to
complement the Company's research and inquiry access, Advisory Service customers
are provided access to ExperNet, the Company's network of external IT
practitioners who have practical experience in solving real-world IT problems.
 
GIGA STRATEGY
 
     Giga's objective is to become the leading third generation CIS provider,
offering a significant price/performance advantage over its competitors. The key
elements of Giga's strategy include:
 
     o     Utilizing and Enhancing its Price/Performance Advantage.  The Company
           intends to use its price/performance advantage to increase the range
           of companies which can afford CIS products and services and to allow
           customers to offer Giga's content for a wider group of employees than
           has been affordable with competitors' products. 
 
     o     Leveraging Existing Customer Base.  The Company's services are used
           by over 800 customers worldwide. Giga intends to expand its customer
           relationships by providing additional non-advisory services, such as
           IT Practice Services and Continuous Advisory Consulting. In addition,
           the Company is focused on increasing the number of Advisory Service
           subscribers within each customer's organization.


                                       27

<PAGE>

     o     Expanding and Capitalizing on Worldwide Distribution.  Giga has
           expanded its worldwide sales force from 49 on December 31, 1996 to
           103 on April 30, 1998. The Company plans to continue to expand its
           sales and marketing organization both domestically and

           internationally. The Company has entered into agreements with
           distributors located in Spain, Israel and Korea and intends to
           develop additional international distribution arrangements.
 
PRODUCTS AND SERVICES
 
     The Company's four principal product and service lines are (i) Advisory
Service, which includes ExperNet, (ii) IT Practice Services, (iii) Advisory
Consulting and (iv) Events and Publications. The Company's services are designed
to be accessed through GigaWeb, as well as through published reports and
consultation with the Company's analysts and consultants. Set forth below is a
schematic of Giga's principal product and service lines:
 
<TABLE>
<S>                                           <C>
                                              ------------------------------------
                                              |      Giga Information Group      |
                                              ------------------------------------
                                                            |
                                                            |
<S>                             <C>                              <C>                              <C>
                 ___________________________________________|____________________________________________________
                 |                             |                                 |                              |
                 |                             |                                 |                              |
----------------------------------------------------------------------------------------------------------------------------------
|       IT Practice Services   ||        Advisory Service        ||       Continuous Advisory     ||  Events and Publications     | 
|                              ||                                ||           Consulting          ||                              |
| Integration of best practice ||   Continuous subscription-     ||                               || Conferences on IT industry   |
|   surveys with consulting    || based decision-support service || In-depth analysis and advice  ||issues and trends, stand-alone|
|                              ||       ExpertNet network        || provided on an on-going basis ||   reports and newsletters    |
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                                              <C>
----------------------------------------------------------------------------------------------------------------------------------
|                                                    GigaWeb                                                                     |
|                                  Internet-based information delivery interface                                                 |
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>  

Advisory Service
 
     Advisory Service, the principal CIS offering of the Company, is available
to customers for an annual subscription fee billed and payable in advance, which
entitles members to (i) access all of the Company's advisory service information
and analyses, (ii) inquiry privileges and (iii) participate in briefings, a
conference and teleconferences.
 
     Research
 
     Giga employs a structured and consistent research methodology. The goal of
Giga research is to form original judgments and recommendations to support
client decision-making. Research topics are determined in part by examination of
customers' needs, which are identified by analysts through direct discussions
with clients. The Company's methodology enables it to rapidly analyze IT
markets, technologies, vendors, products and user issues. Analysts conduct
informal research by surveying the Company's client base and interviewing
vendors, consultants and other sources. These activities are supplemented with
searches of numerous trade, financial and other third-party source materials
compiled by the Company's research center. The Company believes its analysts
form original judgments and recommendations by applying their professional
experiences to their review of these combined materials. To ensure research
quality and consistency, all research is reviewed on an ongoing basis by the
Company's research management team, in conjunction with several senior analysts
who are designated research leaders.
 
                                       28
<PAGE>

     The Company seeks to convey relevant and actionable information and
analyses, as well as practical advice, to its customers through a spectrum of
delivery mechanisms, including:
 
     o     IdeaBytes.  IdeaBytes are one-page, published analyses that are
           intended to provide customers with quick, up-to-date findings and
           opinions on current issues that are authored by the Company's
           analysts.
 
     o     Planning Assumptions.  Planning Assumptions are multi-page and highly
           formatted reports that provide customers with in-depth analyses of IT
           topics and recommendations for action. Planning Assumptions are
           designed to be responsive to the current needs of the market.
 
     o     Inquiry Support.  The Company maintains a 'Knowledge Center,' which
           consists of experienced research support associates who track
           customer inquiries and direct customers to the appropriate analyst or
           source of information. Customers also have direct access to the
           Company's analysts or ExperNet practitioners on-line through GigaWeb.
 
     o     GigaTels.  GigaTels are audio teleconferences run by the Company's
           analysts on selected topics and provide an open forum for questions,
           exchanges and debate. There were 3,000 participants in the 91
           hour-long GigaTels held in 1997.
 

     o     Third-Party Content.  The Company provides customers with access
           through GigaWeb to publications from information partners such as Dow
           Jones and Information Access Corporation.
 
     Examples of Giga research topics include 'Network-Centric Enterprise
Architectures,' 'Platforms for Enterprise Computing: The Emerging Role of NT in
the Enterprise' and 'Participating in Electronic Commerce.' Since these topics
are typically interdisciplinary, they are supported by research from multiple
analysts that cover different areas of IT. For example, the topic covering
enterprise platforms requires research contributions from analysts who cover the
mainframe, client-server, wide-area networks, database management systems and
operating systems areas, necessitating the active participation of five or more
analysts. The Company's research culture is designed to encourage collaboration
among analysts.
 
     The Company currently employs over 50 research professionals and plans to
hire additional research professionals, as needed. The Company's principal
research offices are located in Cambridge, MA, Westport, CT and Santa Clara, CA.
Giga's analysts average 10 years of experience with backgrounds ranging from
consulting to vendor and user professional positions.
 
     ExperNet.
 
     To complement the Company's research and inquiry access, customers have
access through GigaWeb to ExperNet, a network of over 1,000 external IT
practitioners. These practitioners have current experience in diversified
segments of the IT industry, which the Company believes cannot be efficiently
covered by the traditional CIS approach, and are available to assist clients in
solving real-world IT problems. Each practitioner responds to customer inquiries
at no additional charge in return for access to Giga information.
 
GigaWeb and Other Delivery Mechanisms
 
     Advisory Service research is customized in a personalized manner through
GigaWeb, the Company's proprietary, Internet-based information delivery
interface which provides on-line access to the Company's research reports,
third-party content, analysts and ExperNet. GigaWeb makes it possible for
members to obtain both a unified and complete view across all of Giga's advisory
content while matching customers' specific needs as determined by
self-administered profiles and prior inquiries. GigaWeb is designed to make it
easy and efficient for a customer to navigate through the full spectrum of
Giga's original research and third-party content, together with access to human
expertise. Subscribers to Advisory Service are provided with a personalized home
page (the 'Virtual Office') which is accessed through Giga's password-protected
Internet site using a Web browser.
 
     GigaWeb enables customers to search for relevant information using word
searches. Based on the individualized customer profile, GigaWeb automatically
selects the particular subset of Giga research and third-party content most
relevant to the customer and delivers it to the customer's Virtual Office or via
e-mail. In addition, customers who have shared objectives or interests can
interact with each other, as well as with Giga analysts and ExperNet
practitioners, through on-line discussion groups. Advisory Service clients may
provide GigaWeb access to large numbers of their IT professionals via

content-only seats and various site license practices.
 
                                       29
<PAGE>

     The Company also has installed its content as an additional deliverable on
several corporate intranets, and expects the volume of such installations to
increase substantially. This service is called IntraGiga. For those companies
utilizing Lotus Notes, Giga offers access to its research via GigaNotes.
Customers can also request that Giga's research be provided via hard copy.
 
Continuous Advisory Consulting
 
     The Company's Continuous Advisory Consulting services provide Giga
customers with support such as assessments of an organization's strategic
technology plan, the implementation issues surrounding a major technology
migration or a vendor's marketing plan. Advisory Consulting is a valuable
extension of the Company's client inquiry process, enabling customers to request
more in-depth analysis targeted at the application of technology to their
specific situation. When a customer inquiry requires on-going or periodic
assessments and updates, Giga analysts may construct a scheduled advisory
program.
 
IT Practice Services
 
     The Company believes that its IT Practice Services enable Giga customers to
be more effective in solving IT problems by leveraging the best practices of
their peers. Senior Giga advisors with strong IT and management expertise
document the successful operating practices and techniques of IT managers in a
concise reference book. The insights gained from these best practices are
interpreted by the advisors and tailored to fit in the context of the customer's
organization. IT Practice Services are designed for specific job functions found
within the IT organization and address the issues that such individuals must
solve. Currently, the Company offers IT Practice Services in three areas: CIO
Practices, Year 2000 Practices and Security Practices. Each IT Practice Service
is available for an annual subscription fee. Each customer receives (i) three
in-depth studies documenting best practices, (ii) on-site consultations to guide
the client in applying the best practices that are most pertinent to the
customer and (iii) inquiry access to IT Practice Service advisors.
 
Events and Publications
 
     The Company organizes and sponsors a range of events on significant IT
industry issues and trends. At GigaWorld IT Forum, the Company's flagship annual
conference, Giga analysts present and update their most important research
findings and recommendations and meet one-on-one in advisory sessions with
clients. Other conferences include the 'Business OnLine Symposia' and the
'Business and Process Workflow' conference series, both held in the United
States and Europe annually. In 1997, the Company organized and hosted 11 three-
day conferences, sponsored an additional 9 conferences (hosted by partner
organizations). All events are promoted via direct mail and telesale channels
with over 1.2 million pieces of mail bearing the Company's logo circulated in
1997.
 

     The Company produces a series of off-the-shelf publications based on
conference topics or current IT issues which are identified through the Advisory
Service and marketed to IT professionals. The Company produced six publications
and one newsletter in 1997.
 
SALES AND MARKETING
 
     Since inception, the Company has made substantial investments in sales and
marketing to sell its services, address additional markets and support its
growing customer base. The Company sells its services through a direct sales
force located in the United States, Canada, United Kingdom, France, Germany, the
Netherlands and Denmark. As of April 30, 1998, the Company's North American
direct sales force consisted of 88 field sales personnel, an increase from 42
personnel at December 31, 1996. The Company also had 15 international direct
sales personnel serving Europe, an increase from 7 personnel at December 31,
1996. The Company also sells its services through independent third-party
distributors in Spain, Israel and Korea. The Company's internal marketing
organization, primarily located in the Company's Norwell, Massachusetts
facility, provides public relations, lead generation, direct mail support and
other related services.
 
     All Giga sales representatives participate in the Company's annual sales
compensation plan. Commissions are paid monthly based upon NAVI attainment
versus established quotas. Additional bonuses and other incentives are paid for
meeting and/or exceeding certain established targets and for special promotions.
 
                                       30
<PAGE>

     The Company has over 800 customers. No single customer accounted for over
3% of the Company's revenues for the year ended December 31, 1997. The Company
serves customers across a broad array of industries, which include:
 
<TABLE>
<S>                                                   <C>
Allstate Corp.                                        Hewlett-Packard Co.
AT&T Wireless Services                                International Business Machines Corporation
BASF                                                  Intel Corp.
Blue Cross Blue Shield of Nebraska                    Microsoft
British Aerospace PLC                                 Motorola Inc.
Citibank N.A.                                         Netscape
Federal Express Corp.                                 Pirelli SPA
Ford Motor Company                                    State of Texas
General Electric Co.                                  Texaco Inc.
The Gillette Co.                                      United Nations International Computing Centre
</TABLE>
 
COMPETITION
 
     The Company competes in the IT market directly with other independent
providers of Continuous Information Services, including Gartner Group, META
Group, Inc. and Forrester Research Inc., and the internal planning, research and
marketing staffs of corporations and IT vendors. The Company also competes with
other information providers, including market research firms, 'Big Six'

accounting firms, consulting firms and systems integrators. Many of the
Company's direct and indirect competitors have substantially greater financial,
information gathering and marketing resources than the Company. Some of the
Company's direct and indirect competitors also have established research
organizations with greater market recognition and experience in the IT industry.
See 'Risk Factors--Significant Competition.'
 
EMPLOYEES
 
     As of March 31, 1998, the Company employed 307 persons, including 63 in
research and research support, 26 events and publications, 165 in sales and
marketing, 10 in research and development and 43 in administration. Of such
employees, 100 are located in the Company's Norwell facility, 69 are located in
the Company's other domestic facilities, 49 are located internationally and 90
work from their homes. None of the Company's employees are represented by a
collective bargaining arrangement and the Company believes its relationship with
its employees is good.
 
FACILITIES
 
     The Company's headquarters are located in Norwell, Massachusetts and
consist of approximately 27,000 square feet. This facility and the Company's
approximately 8,000 square feet in its Cambridge, Massachusetts facility
together accommodate corporate administration, research and analysis, marketing
and sales and customer support. The lease on the Cambridge facility expires in
November 2000 and the lease on the Norwell facility is currently on a
month-to-month basis. The Company is actively negotiating a five-year lease on
the Norwell facility which would commence in June 1998. The Company also leases
office space for its research, and sales and marketing efforts in three other
U.S. and three primary international locations. The Company believes that
additional facilities will be available in the future on commercially reasonable
terms to meet future needs. See Note 7 to the Consolidated Financial Statements
for information regarding the Company's annual rental costs.
 
LEGAL PROCEEDINGS
 
     The Company, from time to time, is a party to legal proceedings. See 'Risk
Factors--Uncertainties Relating to Proprietary Rights.'
 
                                       31

<PAGE>

                                   MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
     The directors and executive officers of the Company, and their ages as of
March 31, 1998, are as follows:
 
<TABLE>
<CAPTION>
NAME                                               AGE   POSITION
------------------------------------------------   ---   ------------------------------------------------
<S>                                                <C>   <C>
Gideon I. Gartner...............................   63    Chairman, President and Chief Executive Officer
James C. R. Graham..............................   47    Executive Vice President
Daniel M. Clarke................................   51    Senior Vice President, Chief Financial Officer,
                                                         Treasurer and Secretary
Keith R. Belton.................................   37    Senior Vice President, Research
Michael R. Mooradian............................   40    Senior Vice President, Worldwide Sales
Neill H. Brownstein (1)(2)......................   54    Director
David L. Gilmour................................   40    Director
Richard L. Crandall (2).........................   54    Director
Bernard Goldstein (2)...........................   67    Director
Irwin Lieber (1)................................   58    Director
Josh S. Weston (3)..............................   69    Director Nominee
</TABLE>
 
------------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) To be appointed a director upon closing of the Offering
 
     Mr. Gartner has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company since its inception in March 1995. In October
1997, he was also elected President. From 1993 to 1994, he was a private
investor. From 1991 to 1992, he served as Chairman, and from 1979 to 1991 he
served as President, Chairman and Chief Executive Officer of Gartner Group,
Inc., an information technology company which he founded. From 1972 to 1979, he
served as a technology analyst and subsequently as a partner at Oppenheimer &
Co., an entity engaged in the financial services business. Mr. Gartner received
his B.S. in engineering from Massachusetts Institute of Technology ('MIT') and
received an M.S. in management from MIT's Sloan School of Management.
 
     Mr. Graham has served as Executive Vice President of the Company since
October 1997. Prior to joining Giga, he was Vice President, Information Systems
of United States Fidelity & Guaranty Corporation, an insurance company, from
1994 to October 1997. From 1990 to 1994, he was Vice President, Marketing and
Product Management at Seer Technologies, a software company. From 1987 to 1990,
Mr. Graham was Vice President, Software Engineering Strategies at Gartner Group,
Inc. From 1982 to 1986, he was Executive Vice President of VenturCom, a software
company that he founded. Prior to that he was an Economic Advisor at The
Business Roundtable from 1977 to 1980. From 1976 to 1977, Mr. Graham was the
Special Assistant to the U.S. Secretary of Commerce and, from 1974 to 1976, he

was the Vice President and Executive Secretary of Industrial Energy Users Forum.
Mr. Graham received a B.A. in logic from Georgetown University and an M.S. in
finance and economics from MIT's Sloan School of Management.
 
     Mr. Clarke has served as Senior Vice President, Chief Financial Officer,
Treasurer and Secretary since September 1997. From July 1996 to August 1997, Mr.
Clarke served as Vice President, Finance and Administration and Chief Financial
Officer for Dataware Technologies, Inc., a provider of software for professional
electronic publishing and knowledge management. From 1990 to December 1995, Mr.
Clarke was an executive officer of Xyvision, Inc., a software and services
company that develops and markets advanced software for document management,
publishing and prepress. He served as Vice President, Chief Financial Officer
and Secretary of Xyvision until January 1994, and as President and Chief
Operating Officer from
 
                                       32
<PAGE>

February 1994. From 1981 to 1989, Mr. Clarke served in a variety of senior
management positions with BBN Corporation, a diversified high technology
company. Mr. Clarke holds a B.S. Degree from Rensselaer Polytechnic Institute
and an M.B.A. from Harvard Business School.
 
     Mr. Belton joined the Company in October 1997 as Vice President, Research
and was named Senior Vice President, Research in December 1997. From October
1996 to September 1997, Mr. Belton was Vice President, Marketing for Datamedic
Corp., a software company. From July 1994 to September 1996, he was a partner at
Benchmark Partners, a consulting company. From 1990 to 1994, he held various
positions with Kurzweil Applied Intelligence Inc., a software company, including
Director of Product Marketing from 1993 to 1994. From 1985 to 1989, he was the
Director, Manufacturing Automation Planning Service for the Yankee Group, a
consulting company. Mr. Belton holds a B.A. in Economics from Haverford College.
 
     Mr. Mooradian has served as Senior Vice President, Worldwide Sales of the
Company since August 1997. From August 1996 to August 1997, Mr. Mooradian served
as Regional Vice President of Giga's central region. From January 1996 to July
1996, he served as Vice President of Sales, North America for Timeline, Inc., a
developer of client/server, financial management and reporting systems. From
1991 to January 1996, he held several management positions at Comshare, a
decision support software company. From 1989 to 1991, he served as a sales
representative for Ross Systems, Inc., a financial systems integrator. From 1987
to 1989, he served as a sales representative for Corporate Class Software, Inc.,
a software company. From 1985 to 1986, he served as a sales representative for
Information Resources, Inc., a software company, and, from 1984 to 1985, as a
sales representative for Hewlett-Packard. Mr. Mooradian received a B.S. in
Business Administration from DePaul University.
 
     Mr. Brownstein has served as a director of the Company since July 1995.
Since January 1995, he has been a private investor. From 1970 to January 1995,
Mr. Brownstein was associated with Bessemer Securities Corporation and was a
founder and General Partner of three affiliated venture capital funds: Bessemer
Venture Partners L.P., Bessemer Venture Partners III L.P. and Bessemer Venture
Partners II L.P., for which he currently serves as a Special General Partner.
Since 1970, he has been president of Neill H. Brownstein Corporation, an

investment management counseling enterprise. He serves as a director of DSP
Communications, Inc. Mr. Brownstein received a B.A. from Columbia College and an
M.B.A. from the Kellogg School of Management at Northwestern University. Between
1979 and 1988, Mr. Brownstein also served as a director of Gartner Group, Inc.
 
     Mr. Gilmour is a co-founder of the Company with Mr. Gartner. He served as
Senior Vice President and Chief Research Officer of the Company from April 1996
to February 1998 and has served as a director of the Company since July 1995.
Mr. Gilmour continues to be a special advisor to Giga on Research and Technology
and devotes approximately 25% of his time to the Company. From July 1995 to
April 1996, he served as Senior Vice President of Technology of the Company.
From July 1993 to July 1995, he served as Chief Executive Officer and a director
of ExperNet Corporation, an information technology company which he founded with
Mr. Gartner. From October 1992 to April 1993, Mr. Gilmour served as acting
President and Chief Executive Officer, and from April 1991 to October 1992 and
from April 1993 to July 1993, he served as Executive Vice President, Marketing,
of Versant Object Technology Corporation, a computer software company. From 1989
to 1991, he served as Vice President--Database Systems Division, from 1986 to
1989, he served as General Manager--Advanced Products Division, and from 1984 to
1986, he served as Director Product Planning at Lotus Development Corporation, a
software company. Mr. Gilmour received a B.A. in Applied Physics, an M.S. in
engineering, both from Harvard University, and an M.B.A., with distinction, from
Harvard Business School.
 
     Mr. Crandall has served as a director of and consultant to the Company
since August 1995. He was founder of Comshare, Inc., a decision support software
company, serving as its Chief Executive Officer from 1970 until 1994 and
Chairman until April 1997. Mr. Crandall chairs the Enterprise Software
Roundtable, consisting of the CEO's and COO's of the twenty-five largest
enterprise software companies. He currently serves on the Board of Directors of
Comshare, Computer Task Group and Diebold and several privately held technology
companies. He serves on the National Advisory Board to the College of
Engineering of the University of Michigan. Mr. Crandall received a B.S. in
electrical engineering, a B.S. in mathematics and an M.S.E. in industrial
engineering from the University of Michigan.
 
                                       33
<PAGE>

     Mr. Goldstein has served as a director of the Company since April 1997. He
is a Director of Broadview Associates, LLC, which he joined in 1979. He is a
past President of the Information Technology Association of America, the
industry trade association of the computer service industry, and past Chairman
of the Information Technology Foundation. Mr. Goldstein was a director of Apple
Computer Inc. until August 1997, and is currently a Director of Franklin
Electronic Publishers, Inc., Sungard Data Systems, Inc., SPSS, Inc. and several
privately held companies. Mr. Goldstein received a B.S. from the Wharton School
of the University of Pennsylvania and an M.B.A. from Columbia University.
 
     Mr. Lieber has served as a director of the Company since November 1995.
Since 1979, he has served as Chairman and Chief Executive Officer of Geo Capital
Corporation, an investment advisory firm which he founded. Additionally, Mr.
Lieber has served as a corporate officer of InfoMedia Associates Ltd., a general
partner of 21st Century Communications Partners, L.P., an investment fund. In

addition, he is a general partner of Applewood L.P. and Wheatley L.P. LLC.,
investment funds. From 1970 to 1979, Mr. Lieber was a General Partner of First
Manhattan Co., an investment management, brokerage and investment banking firm.
Mr. Lieber is a director of LeaRonal Inc. He received a B.S. degree in
electrical engineering from City College of New York and an M.S. degree in
electrical engineering from Syracuse University.
 
     Mr. Weston is Honorary Chairman of the Board of Automatic Data Processing,
Inc. ('ADP') and served as chairman from 1986 to April 1998. He was Chief
Executive Officer of ADP from 1982 to 1996. Mr. Weston is a director of J. Crew
Group Inc, Olsten Corporation, Public Service Enterprise Group Company, Shared
Medical Systems, Inc. and Vanstar Corporation. Mr. Weston received a B.S. from
City College of New York and an M.S. from the University of New Zealand where he
was a Fulbright Scholar.
 
     Certain of the current directors of the Company were nominated and elected
in accordance with a stockholders voting agreement which will terminate upon the
consummation of the Offering. Each officer serves at the discretion of the Board
of Directors. There are no family relationships among or between any of the
directors and executive officers of the Company.
 
BOARD COMPENSATION
 
     Each Non-Employee Director of the Company is reimbursed for expenses
incurred in connection with attendance at the meetings of the Board of Directors
and committees thereof and is entitled to receive stock options under the
Company's 1997 Director Option Plan. Directors who are employees of the Company
currently receive no compensation for serving as directors.
 
     1997 Director Option Plan.  The Director Plan, adopted in June 1997,
provides for the grant of stock options to directors of the Company who are not
full-time employees of the Company or any subsidiary ('Non-Employee Directors').
Only non-statutory options may be granted under the Director Plan. The maximum
number of shares of Common Stock as to which options may be granted under the
Plan is 50,000. Options are automatically granted to Non-Employee Directors as
follows: (i) on July 1st of each year, commencing July 1, 1997, options to
purchase 2,000 shares of Common Stock and (ii) unless such director was elected
pursuant to a certain stockholder voting agreement (which agreement terminates
upon consummation of the Offering), additional options to purchase 2,000 shares
of Common Stock upon such directors' initial election as a director after
adoption of the Plan.
 
     The Director Plan is administered by the Board of Directors. The option
exercise price for each option granted under the Director Plan is the fair
market value of the Common Stock as of the date of grant. Options vest in four
equal annual installments beginning on the first anniversary of the date of
grant (subject to acceleration upon a 'change in control' as defined in the
Director Plan), provided the optionee continues to serve as a director. Payment
of the option exercise price is to be made in cash for the full exercise price
of the options. Options are not assignable or transferrable except by will or
the laws of descent and distribution and terminate on the earlier of ten years
after the date of grant or sixty days after the optionee ceases to serve as a
director, except in the event of death or disability.
 

     For a discussion of transactions between the Company and certain directors
of the Company, see 'Certain Transactions.'
 
                                       34
<PAGE>

EXECUTIVE COMPENSATION
 
     The following table sets forth the compensation for the fiscal year ended
December 31, 1997 of the Company's Chief Executive Officer and the Company's
three other most highly compensated executive officers whose annual salary and
bonus compensation exceeded $100,000 (the Chief Executive Officer and such other
executive officers are hereinafter referred to as the 'Named Executive
Officers'):
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                               ANNUAL COMPENSATION                                LONG-TERM
                                             ------------------------        ALL OTHER          COMPENSATION
NAME AND PRINCIPAL POSITION                  SALARY($)(1)    BONUS($)    COMPENSATION($)(2)    AWARDS OPTIONS
------------------------------------------   ------------    --------    ------------------    ---------------
 
<S>                                          <C>             <C>         <C>                   <C>
Gideon Gartner;
  Chairman, CEO and President.............      160,000       30,000                --                     --
 
David Gilmour;
  Senior Vice President, Research;
  Director(3).............................      160,000       24,000(4)             --                     --
 
Henry Givray;
  President and COO(5)....................      144,730(6)    30,000(7)        125,097(8)       33,333 shares
 
Jacques Bouvard;
  Senior Vice President, Technology(9)....      104,167       30,000(10)        47,668(1)       20,000 shares
</TABLE>
 
------------------
 
 (1) Includes amounts payable in 1997 and/or 1998 for services rendered by the
     Named Executive Officers in 1997.
 
 (2) Other compensation in the form of perquisites and other personal benefits
     have been omitted because it constitutes the lesser of $50,000 or ten
     percent of the total annual salary and bonus of each of the Named Executive
     Officers in 1997.
 
 (3) Mr. Gilmour became a non-employee consultant effective February 1, 1998
     pursuant to a consulting agreement. See 'Employment and Related
     Agreements.'
 
 (4) The amount shown does not include $24,000 paid in 1997 for 1996

     compensation.
 
 (5) Mr. Givray's position with the Company was terminated on November 5, 1997
     pursuant to the Separation Agreement dated January 7, 1998 (the 'Givray
     Separation Agreement'). See 'Employment and Related Agreements.'
 
 (6) The amount shown reflects salary and $9,205 for unused vacation but does
     not reflect $77,808 of salary continuation paid for the period of November
     6, 1997 to April 30, 1998.
 
 (7) The amount shown does not reflect $30,000 paid in 1997 for 1996 bonus
     compensation. The amount reflects $30,000 paid in 1998 for bonus pursuant
     to the Givray Separation Agreement.
 
 (8) This amount reflects $77,808 for salary continuation for the period of
     November 6, 1997 to April 30, 1998, $5,000 for an additional bonus awarded
     for signing the Givray Separation Agreement, $30,000 paid in 1997 for
     relocation allowance and $12,289 reflecting certain travel and computer
     expenses. See 'Employment and Related Agreements.'
 
 (9) Mr. Bouvard's employment with the Company was terminated on October 16,
     1997 pursuant to the Bouvard Agreement (as defined herein). See 'Employment
     and Related Agreements.'
 
(10) The amount reflects $30,000 for bonus paid in 1998 pursuant to the Bouvard
     Separation Agreement.
 
(11) This amount reflects $47,668 for salary continuation for the period of
     October 16, 1997 to March 15, 1998.
 
                                       35
<PAGE>

     The following table sets forth certain information regarding options
granted by the Company to each of the Named Executive Officers during the fiscal
year ended December 31, 1997:
 

                       OPTION GRANTS IN LAST FISCAL YEAR
 
<TABLE>
<CAPTION>
                                                                                                POTENTIAL     
                                                                                             REALIZABLE VALUE 
                                                    INDIVIDUAL GRANTS                       AT ASSUMED ANNUAL  
                                ----------------------------------------------------------    RATES OF STOCK  
                                NUMBER OF                                                   PRICE APPRECIATION  
                                SECURITIES   PERCENT OF TOTAL                                      FOR        
                                UNDERLYING    OPTIONS GRANTED      EXERCISE                 OPTION TERM($)(2)        
                                 OPTIONS      TO EMPLOYEES IN     PRICE PER     EXPIRATION  ------------------
                                 GRANTED     FISCAL YEAR(%)(1)     SHARE($)        DATE        5%        10%  
                                ----------   -----------------   ------------   ----------  ---------  -------
<S>                             <C>          <C>                 <C>            <C>           <C>      <C>    
Gideon I. Gartner.............         --             --               --           --         --        --   
                                                                                              
David L. Gilmour..............         --             --               --           --         --        --   
                                                                                              
Henry Givray..................     33,333           6.45             3.00        2/11/2007    62,999   159,332
 
Jacques Bouvard...............     20,000           3.87             3.00        2/11/2007    37,800    95,600
</TABLE>

------------------
(1) Based on an aggregate of 528,708 options granted to employees in fiscal
    1997, including options granted to the Named Executive Officers.
 
(2) The amounts shown on this table represent hypothetical gains that could be
    achieved for the respective options if exercised at the end of the option
    term. These gains are based on assumed rates of stock appreciation of 5% and
    10%, computed annually from the date the respective options were granted to
    their expiration date. The gains shown are net of the option exercise price,
    but do not include deductions for taxes or other expenses associated with
    the exercise. Actual gains, if any, on stock option exercises will depend on
    the future performance of the Common Stock, the optionholders' continued
    employment through the option period and the date on which the options are
    exercised.
 
     The following table sets forth certain information concerning stock options
held as of December 31, 1997 by each of the Named Executive Officers:
 

                      AGGREGATED OPTION EXERCISES IN LAST
                        FISCAL YEAR AND FISCAL YEAR-END
                                 OPTION VALUES
<TABLE>
<CAPTION>
                                                                 NUMBER OF SHARES
                                                                    UNDERLYING
                                                               UNEXERCISED OPTIONS
                              NUMBER OF                         AT FISCAL YEAR-END
                           SHARES ACQUIRED      VALUE      ----------------------------
          NAME               ON EXERCISE     REALIZED($)   EXERCISABLE/   UNEXERCISABLE
-------------------------  ---------------   -----------   ------------   -------------
 
<S>                        <C>               <C>           <C>            <C>
Gideon I. Gartner........           --             --         220,000             --
 
David L. Gilmour.........           --             --          24,167         15,833
 
Henry Givray.............        6,250          1,875              --         47,083
 
Jacques Bouvard..........           --             --           6,667         13,333
 
<CAPTION>
                            VALUE OF UNEXERCISED
                            IN-THE-MONEY OPTIONS
                            AT FISCAL YEAR END(1)
                         ---------------------------
          NAME           EXERCISABLE/  UNEXERCISABLE
-------------------------------------  -------------
<S>                        <C>         <C>
Gideon I. Gartner........$                $
David L. Gilmour.........
Henry Givray.............
Jacques Bouvard..........
</TABLE>
 
------------------
(1) Represents the total gain which would be realized if all in-the-money
    options held at December 31, 1997 were exercised, determined by multiplying
    the number of shares underlying the options by the difference between the
    assumed initial public offering price of $     per share and the per share
    option exercise price. An option is in-the-money if the fair market value of
    the underlying shares exceeds the exercise price of the option.
 
                                       36
<PAGE>

  Employment and Related Agreements
 
     Gideon I. Gartner.  The Company has entered into a non-competition
agreement with Mr. Gartner, dated November 13, 1995, pursuant to which Mr.
Gartner has agreed not to compete with the Company, solicit any employee or take
away any customer of the Company either during his employment with the Company
or for so long thereafter as the Company continues to pay Mr. Gartner annual

compensation of at least $120,000 (whether as an employee, consultant or in the
form of severance or post-employment benefits).
 
     Henry Givray.  The Company entered into a Separation Agreement with Mr.
Givray, dated January 7, 1998 (the 'Givray Agreement'), under the terms of which
Mr. Givray ceased working for the Company on November 5, 1997 and received
continuation of base salary (at an annualized rate of $160,000) and certain
other benefits through April 30, 1998. Mr. Givray also received $30,000 for 1997
bonus, a $5,000 bonus for signing the Givray Agreement and reimbursement of
certain other items. The Company agreed to allow Mr. Givray to retain all
options shares which were vested as of November 5, 1997. In addition, the Givray
Agreement contains confidentiality and non-competition provisions which
terminate October 31, 1998.
 
     Jacques Bouvard.  The Company entered into a Separation Agreement with Mr.
Bouvard, dated October 2, 1997 (the 'Bouvard Agreement'), under the terms of
which Mr. Bouvard ceased working for the Company on October 15, 1997 and
received (i) continuation of base salary (at an annualized rate of $125,000) and
certain other benefits through March 15, 1998 and (ii) an annualized bonus of
$30,000. The Company agreed not to exercise its right to repurchase any shares
of Common Stock acquired by Mr. Bouvard under the 1996 Option Plan. As of March
15, 1998, Mr. Bouvard had 6,666 vested options under the 1996 Plan at an
exercise price of $3.00. In addition, the Bouvard Agreement contains
confidentiality and non-competition provisions which terminate February 15,
1999.
 
     For a discussion of certain current and past consulting arrangements
between the Company and Messrs. Crandall, Brownstein and Gilmour, see 'Certain
Transactions--Consulting Agreements.'
 
  Stock Plans
 
     1995 Stock Option/Stock Issuance Plan.  The Company's 1995 Stock Plan was
adopted by the Board of Directors in September 1995 and was approved by the
stockholders in February 1996. Under the terms of the 1995 Stock Plan, the
Company is authorized to make awards of restricted stock and to grant incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the 'Code') ('incentive stock options'), and stock options not
intended to qualify as incentive stock options ('non-statutory stock options'),
to employees, officers and directors of, and consultants and advisors to, the
Company and its subsidiaries. As of March 31, 1998, options to purchase a total
of 401,499 shares of Common Stock at a weighted average exercise price of $2.10
per share were outstanding under the 1995 Stock Plan (of which options to
purchase 193,483 shares were then exercisable). As of March 31, 1998, 478,228
shares of Common Stock were available for future grant under the 1995 Stock
Plan.
 
     The Board of Directors is authorized to select the option recipients and to
determine the kind and terms of each option, including (i) the number of shares
of Common Stock subject to each option, (ii) the option exercise price, (iii)
the vesting schedule of the option, and (iv) the duration of the option. Options
are generally not assignable or transferable except by will or the laws of
descent and distribution.
 

     Restricted stock awards under the 1995 Stock Plan entitle the recipient to
purchase Common Stock from the Company under terms which provide for vesting
over a period of time and a right of repurchase of unvested stock by the Company
when the recipient's relationship with the Company terminates. The Board of
Directors is authorized to select the recipients of restricted stock awards and
to determine the terms of each award, including (i) the dates on which
restricted stock awards are made, (ii) the number of shares of Common Stock
subject to the award, (iii) the purchase price (which can be less than the fair
market value of the Common Stock) of the award, and (iv) the vesting schedule of
the award. The recipients may not sell, transfer or otherwise dispose of shares
subject to a restricted stock award until such shares are vested. Upon
termination of the recipient's relationship with the Company will be entitled to
repurchase those shares which are not vested on the termination date at a price
equal to their original purchase price.
 
                                       37
<PAGE>

     1996 Stock Option Plan.  The Company's 1996 Option Plan was adopted by the
Board of Directors in August 1996 and was approved by the stockholders in
September 1996. The 1996 Option Plan provides for the grant of stock options to
employees, officers and directors of, and consultants or advisors to, the
Company and its subsidiaries. Under the 1996 Option Plan, the Company may grant
incentive stock options or non-statutory stock options. Incentive stock options
may only be granted to employees of the Company. The maximum number of shares
with respect to which options may be granted to any employee under the 1996
Option Plan shall not exceed 33,333 shares of Common Stock during any calendar
year. As of March 31, 1998, options to purchase a total of 642,698 shares of
Common Stock at a weighted average exercise price of $3.00 per share were
outstanding under the 1996 Option Plan (of which options to purchase 49,663
shares were then exercisable). As of March 31, 1998, 357,045 shares of Common
Stock were available for future grant under the 1995 Stock Plan.
 
     The 1996 Option Plan is administered by the Compensation Committee of the
Board of Directors. Subject to the provisions of the 1996 Option Plan, the
Compensation Committee has the authority to select option recipients and to
determine the kind and terms of each option, including (i) the number of shares
of Common Stock subject to the option, (ii) the option exercise price, which, in
the case of incentive stock options, must be at least 100% (110% in the case of
incentive stock options granted to a stockholder owning in excess of 10% of the
Company's Common Stock) of the fair market value of the Common Stock as of the
date of grant, (iii) the vesting schedule of the option, and (iv) the duration
of the option (which, in the case of incentive stock options, may not exceed ten
years).
 
     Payment of the option exercise price may be made in cash, shares of Common
Stock, a combination of cash and Common Stock or by any other method (including
delivery of a promissory note payable on terms specified by the Compensation
Committee) approved by the Compensation Committee consistent with Section 422 of
the Code and Rule 16b-3 under the Securities Exchange Act of 1934, as amended.
Options are not assignable or transferable except by will or the laws of descent
and distribution and, in the case of non-statutory options, pursuant to a
'qualified domestic relations order' (as defined in the Code).
 

     401(k) Profit Sharing Plan.  The Company maintains a 401(k) Profit Sharing
Plan (the '401(k) Plan'), a tax-qualified plan covering all of its employees who
are at least 21 years of age. Each employee may elect to reduce his or her
current compensation by up to 15% (on a pre-tax basis). All employee and Company
contributions to the 401(k) Plan are fully vested at all times. Upon termination
of employment, an employee may elect a lump sum distribution of all amounts
contributed by him or her under the 401(k) Plan. Early withdrawals from amounts
contributed under the 401(k) Plan are allowed under certain circumstances, such
as disability. In addition, subject to certain restrictions, employees may take
a loan drawn on contributions made by the employee under the 401(k) plan.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The members of the Compensation Committee are Neill H. Brownstein and Irwin
Lieber, neither of whom is or has been an officer or employee of the Company.
For information concerning certain transactions between the Company and certain
directors and concerning the former consulting relationship between the Company
and certain directors, including Mr. Brownstein, see 'Certain Transactions.'
 
                                       38

<PAGE>

                              CERTAIN TRANSACTIONS
 
EARLY STAGES
 
     In 1995, Mr. Gartner contributed approximately $1.0 million to the capital
of the Company. In consideration for such capital contribution, the Company
issued to Mr. Gartner (i) in March 1995, 1,400,000 shares of Common Stock at a
purchase price of $0.07125 per share, (ii) in July 1995, 60,000 shares of Series
A Preferred Stock (80,000 shares of Common Stock on an as-converted basis) at a
purchase price of $5.00 per share (or $3.75 per share of Common Stock), and
(iii) in October 1995, 400,000 shares of Common Stock at a purchase price of
$1.50 per share. In addition, Mr. Gartner has made loans totalling $221,000 to
ExperNet (a subsidiary of the Company) and $186,000 to the Company, which loans
were repaid, together with interest thereon, in December 1995 and August 1995,
respectively.
 
EXPERNET ACQUISITION
 
     In July 1995, Giga acquired (the 'ExperNet Acquisition') all of the
ExperNet Corporation shares owned by Mr. Gartner and a majority of the ExperNet
Corporation shares owned by Mr. Gilmour, aggregating 77.8% of ExperNet
Corporation's outstanding common stock, in exchange for (i) 160,000 shares of
Series A Preferred Stock (213,333 shares of Common Stock on an as-converted
basis) of the Company, 80,000 shares (106,667 shares on an as-converted basis)
of which were issued to Mr. Gartner and 80,000 shares (106,667 shares on an as-
converted basis) of which were issued to Mr. Gilmour, and (ii) the issuance to
Mr. Gartner of a fully-vested option to purchase 53,333 shares of Common Stock
at an exercise price of $1.50 per share. In December 1995, the Company acquired
Mr. Gilmour's remaining 22.2% interest in ExperNet Corporation in exchange for a
$400,000 6% Convertible Note due December 31, 2005 (the 'Gilmour Note'). The
Gilmour Note was repaid in full, together with interest thereon, by the Company
one-half in February 1998 and the remainder in April 1998. See '--Consulting
Agreement--Gilmour Agreement.' In addition, Mr. Gilmour made loans totalling
$101,000 to ExperNet Corporation, which loans were repaid in full, together with
interest thereon, by ExperNet Corporation in December 1995.
 
FINANCINGS
 
  Series A Preferred Stock Financing
 
     In July 1995 and October 1995, the Company issued and sold (the 'Series A
Financing') an aggregate of 570,000 shares of Series A Preferred Stock (760,001
shares of Common Stock on an as-converted basis) at a purchase price of $5.00
per share (or $3.75 per share of Common Stock) to a limited number of investors,
including 60,000 shares (80,000 shares on an as-converted basis) to Mr.
Brownstein, 15,000 shares (20,000 shares on an as-converted basis) to Mr.
Crandall and 10,000 shares (13,333 shares on an as-converted basis) to James D.
Robinson III, a former director of the Company.
 
  Series B Preferred Stock Financing
 
     In August 1995, the Company entered into a Convertible Promissory Note and

Warrant Purchase Agreement with RRE Giga Investors, L.P. ('RRE Giga'), pursuant
to which the Company borrowed $2.0 million from RRE Giga and issued RRE Giga a
convertible promissory note (the 'RRE Note') in the principal amount of $2.0
million and a warrant (the 'RRE Warrant') to purchase 285,714 shares of Series B
Preferred Stock (95,238 shares of Common Stock on an as-converted basis) at an
exercise price of $2.345 per share (or $7.035 per share of Common Stock). In
November 1995, the RRE Note was converted into 571,428 shares of Series B
Preferred Stock (190,476 shares on an as-converted basis). In September 1996,
RRE Giga made a cashless exercise of the RRE Warrant and received 218,714 shares
of Series B Preferred Stock (72,905 shares on an as-converted basis). Mr.
Robinson is Chairman and Chief Executive Officer of RRE Investors, L.L.C., the
General Partner of RRE Giga.
 
     In November 1995, February 1996 and December 1996, the Company issued and
sold (the 'Series B Financing') an aggregate of 8,144,642 shares of Series B
Preferred Stock (2,714,878 shares of Common Stock on an as-converted basis), at
a purchase price of $3.50 per share (or $10.50 per share of Common Stock), to a

                                       39
<PAGE>

limited number of investors, including 40,000 shares of Series B Preferred Stock
to Mr. Brownstein and certain members of his family for aggregate consideration
of $140,000. The following entities which also purchased stock are affiliates of
directors and/or principal stockholders of the Company also purchased stock:
 
<TABLE>
<CAPTION>
ENTITIES AFFILIATED WITH:                                            NO. OF SHARES      AGGREGATE CONSIDERATION PAID
------------------------------------------------------------------   -------------      ----------------------------
<S>                                                                  <C>                <C>
21st Century Communications Partners, L.P.........................     1,714,286               $6,000,000
S2 Technology Corporation.........................................     1,116,398                3,907,393
RRE Giga Investors, L.P...........................................       859,999                3,009,997
Montgomery Small Cap Partners, L.P................................     1,029,714                3,604,000
Wanger Asset Management, L.P......................................       885,714                3,100,000
</TABLE>
 
     Mr. Lieber, a director of the Company, is a corporate officer of InfoMedia
Associates, Ltd., which is a General Partner of 21st Century Communications
Partners, L.P. ('21-CCP'), 21st Century Communications T-E Partners, L.P.
('21-CCTEP') and 21st Century Communications Foreign Partners, L.P. ('21-CCFP').
Mr. Robinson, a former director of the Company, is Chairman and Chief Executive
Officer of RRE Investors, L.L.C., the General Partner of RRE Giga and RRE Giga
Investors II, L.P. ('RRE Giga II').
 
  Series C Preferred Stock Financing
 
     In May and December 1997, the Company issued and sold (the 'Series C
Financing') an aggregate of 2,609,491 shares of Series C Preferred Stock
(1,021,429 shares of Common Stock on an as-converted basis) at a purchase price
of $4.11 per share (or $10.50 per share of Common Stock). The Series C Preferred
Stock entitled investors to receive warrants to purchase up to 54% additional
shares of Series C Preferred Stock based upon the Company's NAVI for fiscal

1997. In January 1998, the Company issued warrants to purchase an aggregate of
an additional 1,409,127 shares of Series C Preferred Stock (551,574 shares on an
as-converted basis) at an exercise price of $5.28 per share (or $13.50 per
share of Common Stock). The following persons and entities who are executive
officers, directors, affiliates of directors and/or principal stockholders of
the Company invested in Series C Preferred Stock:
 
<TABLE>
<CAPTION>
                                                                  SHARES OF                   AGGREGATE
                                                                  SERIES C     SERIES C     CONSIDERATION
NAME                                                                STOCK      WARRANTS         PAID
---------------------------------------------------------------   ---------    ---------    -------------
<S>                                                               <C>          <C>          <C>
Entities affiliated with Dawson-Samberg Capital Management,
  Inc..........................................................   1,946,473    1,051,095     $ 8,000,000
Gideon I. Gartner..............................................      60,827       32,847         250,000
Richard Crandall Trust.........................................      30,414       16,424         125,000
Bernard Goldstein..............................................      24,331       13,139         100,000
Neill H. Brownstein............................................      60,827       32,827         250,000
</TABLE>
 
  Series D Preferred Stock Financing
 
     In April and May 1998, the Company issued and sold (the 'Series D
Financing') an aggregate of 285,714 shares of Series D Preferred Stock (190,476
shares of Common Stock on an as-converted basis), at a purchase price of $7.00
per share (or $10.50 per share of Common Stock), and warrants to purchase an
additional 154,286 shares of Series D Preferred Stock (102,858 shares on an
as-converted basis), at an exercise price of $9.00 per share (or $13.50 per
share of Common Stock). Acorn Fund, a series of Acorn Investment Trust, which is
managed by Wanger Asset Management, L.P. purchased 71,429 shares of Series D
Preferred Stock and received warrants to purchase an additional 38,572 shares of
Series D Preferred Stock for an aggregate consideration of $500,003.
 
CONSULTING AGREEMENTS
 
  Crandall Consulting Agreement
 
     In August 1995, the Company entered into a consulting arrangement with Mr.
Crandall. The arrangement provided for payment to Mr. Crandall of $50,000 per
annum in 1995 and $60,000 per annum in 1996. In lieu of certain payments due to
Mr. Crandall, the Company issued to Mr. Crandall 40,000 shares of Common Stock
at a purchase price of $1.50 per share. The shares are subject to vesting and
certain restrictions on transfer. In July 1996, as compensation for the
consulting services to be rendered by Mr. Crandall to the Company for the
twelve-
 
                                       40
<PAGE>

month period ended June 30, 1997, the Company granted to Mr. Crandall an option
to purchase 6,667 shares of Common Stock at an exercise price of $1.80 per
share. Twenty-five percent of the shares subject to the option vested one year

from the date of grant and one forty-eighth of the shares have vested monthly
thereafter. In February 1997, as compensation for the extension of Mr.
Crandall's consulting services through June 1998, and the devotion of one-third
of his time to such matters, the Company granted to Mr. Crandall, effective
January 1, 1997, 16,667 shares of Common Stock and an option to purchase 8,333
shares of Common Stock at an exercise price of $3.00 per share. One sixth of
such shares of Common Stock have vested quarterly since the effective date of
grant. Twenty-five percent of the shares subject to the option vested one year
from the effective date of grant and one thirty-sixth have vested monthly
thereafter. 

 
  Brownstein Financing and Consulting Agreement
 
     In October 1995, the Company sold to Mr. Brownstein 26,667 shares of Common
Stock at a purchase price of $1.50 per share. The shares are subject to vesting
and certain restrictions on transfer.
 
     In January 1996, the Company entered into a one-year consulting agreement
with the Neill H. Brownstein Corporation (the 'Brownstein Corporation'), of
which the sole shareholder is Neill H. Brownstein, a director of the Company.
Pursuant to the consulting agreement, the Brownstein Corporation received a
consulting fee of $60,000, plus reasonable expenses, payable quarterly. The
Brownstein Corporation agreed that during the term of the agreement and for a
period of one year thereafter, the Brownstein Corporation would not use any of
the Company's proprietary or confidential information or disclose such
proprietary and confidential information to any third party.
 
  Gilmour Agreement
 
     In February 1998, the Company entered into an agreement (the 'Gilmour
Agreement') with Mr. Gilmour, a director and co-founder of the Company, relating
to Mr. Gilmour's continuing relationship with the Company in light of Mr.
Gilmour's desire to establish Tacit Knowledge Systems ('Tacit'), a company to be
engaged in the development and commercialization of various forms of software
related to the automatic capture of knowledge through messaging systems (the
'Software'). The Gilmour Agreement superseded Mr. Gilmour's employment
agreement, dated July 6, 1995, pursuant to which Mr. Gilmour served as Senior
Vice President, Research, was elected a director and received a salary at the
rate of $160,000 per annum commencing September 1, 1995. The Gilmour Agreement
provides that Mr. Gilmour will remain a director of the Company and, for at
least six months, will serve as a consultant to the Company, acting as chief
research officer and devoting approximately 25% of his time to such duties. Mr.
Gilmour will be compensated at the rate of $50,000 per annum for such services.
 
     The Gilmour Agreement also provides that the Company will receive a 7.5%
equity interest in Tacit upon its formation, will be entitled to participate in
future Tacit financings and will be granted an irrevocable, royalty-free,
worldwide license to use any and all software, products and technologies that
Tacit develops through January 2001. The Company has the option of extending the
license for two additional one-year periods for a fee of $50,000 per annum. The
Company also agreed that the Software shall not constitute 'Development' or
'Proprietary Information' as such terms are defined in the Invention and
Non-Disclosure Agreement, dated July 6, 1995, between the Company and Mr.

Gilmour. In addition, the Gilmour Agreement contained non-competition and
no-raid provisions, which are to survive for one year following a voluntary
termination by Mr. Gilmour of his consulting relationship with the Company.
 
     The Gilmour Agreement also resolved the status of certain of the Company's
securities held by Mr. Gilmour. The Company agreed not to exercise its rights to
repurchase the Series A Preferred Stock that was issued to Mr. Gilmour in
connection with the ExperNet Acquisition. As of the date of the Gilmour
Agreement, of the options that had been granted to Mr. Gilmour to purchase
40,000 shares of Common Stock at an exercise price of $1.50 per share, options
to purchase 15,000 shares remained unvested. It was agreed that these unvested
options would vest at a revised rate of one ninety-sixth of such options per
month thereafter. Furthermore, the
 
                                       41
<PAGE>

Company agreed to redeem the Gilmour Note, including accrued interest thereon,
one-half in February 1998 and the remainder in April 1998.
 
CERTAIN STOCKHOLDER RIGHTS
 
     For a description of certain other registration rights of, and stock
transfer restrictions imposed on, certain executive officers, directors,
affiliates of directors and/or principal stockholders of the Company, see
'Description of Capital Stock--Registration Rights Agreement' and '--Co-Sale
Agreement.'
 
CERTAIN EMPLOYMENT AND RELATED ARRANGEMENTS
 
     In March 1998, the Company granted options to purchase 100,000, 8,000,
8,000, and 8,000 shares of Common Stock to Messrs. Gartner, Graham, Clarke and
Crandall, respectively. See Note 15 to the Consolidated Financial Statements.
 
     For a description of certain other employment and other arrangements
between the Company and certain executive officers and directors of the Company,
see 'Management--Executive Compensation' and 'Management--Employment and Related
Agreements.'

                            ------------------------
 
     The Company believes that the securities issued in the transactions
involving the Company described above were sold by the Company at their then
fair market value and that the terms of the transactions described above were no
less favorable than the Company could have obtained from unaffiliated third
parties. The Company has adopted a policy, effective following the consummation
of the Offering, that all material transactions between the Company and its
officers, directors and other affiliates must (i) be approved by a majority of
the members of the Company's Board of Directors and by a majority of the
disinterested members of the Company's Board of Directors and (ii) be on terms
no less favorable to the Company than could be obtained from unaffiliated third
parties. In addition, this policy will require that any loans by the Company to
its officers, directors or other affiliates be for bona fide business purposes
only.

 
                                       42
<PAGE>

                             PRINCIPAL STOCKHOLDERS
 
     The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of May 1, 1998 (assuming the
conversion of all outstanding shares of Convertible Preferred Stock into Common
Stock, after giving effect to the Reverse Stock Split), and as adjusted to
reflect the sale of the shares of Common Stock offered hereby, by (i) each
person or entity known to the Company to beneficially own more than 5% of the
Company's Common Stock, (ii) each of the Company's directors, (iii) each of the
Named Executive Officers and (iv) all directors and executive officers as a
group.
 
<TABLE>
<CAPTION>
                                                                                                 PERCENTAGE OF SHARES
                                                                                                BENEFICIALLY OWNED (2)
                                                                       NUMBER OF SHARES         -----------------------
                       NAME AND ADDRESS OF                            BENEFICIALLY OWNED         BEFORE         AFTER
                         BENEFICIAL OWNER                            PRIOR TO OFFERING(1)       OFFERING       OFFERING
------------------------------------------------------------------   --------------------       --------       --------
<S>                                                                  <C>                        <C>            <C>
21st Century Communications Partners, L.P.........................            571,429(3)           8.3
  767 Fifth Avenue, 45th floor
  New York, NY 10153
Entities affiliated with S2 Technology Corporation................            443,897(4)           6.5
  515 Madison Avenue, Suite 4200
  New York, NY 10022
RRE Giga Investors, L.P...........................................            359,571(5)           5.3
  126 East 56th Street, 22nd floor
  New York, NY 10022
Funds managed by Wanger Asset Management, L.P.....................            368,570(6)           5.4
  227 West Monroe Street, Suite 3000
  Chicago, IL 60606
Pequot Private Equity Fund, L.P...................................          1,173,337(7)          16.2
  354 Pequot Avenue
  Southport, CT 06490-0760
Gideon I. Gartner.................................................          2,256,113(8)          31.9
  c/o Giga Information Group, Inc.
  One Longwater Circle
  Norwell, MA 02061
Neill H. Brownstein...............................................            156,666(9)           2.3
Richard L. Crandall...............................................            102,888(10)          1.5
David L. Gilmour..................................................            132,448(11)          1.9
Bernard Goldstein.................................................             41,334(12)            *
Irwin Lieber......................................................            835,238(13)         12.2
Josh S. Weston....................................................                  0               --
Henry Givray......................................................              6,250                *
Jacques Bouvard...................................................                  0               --
All directors and executive officers as a group (11 persons)......          3,540,936(14)         49.8
</TABLE>

 
------------------
* Less than 1%
 
(1) Each stockholder possesses sole voting and investment power with respect to
    the shares listed, except as otherwise noted. Amounts shown include shares
    issuable within the 60-day period following May 1, 1998 pursuant to the
    exercise of options or warrants.
 
(2) On May 1, 1998, there were 6,846,256 shares of Common Stock outstanding,
    assuming the conversion of all outstanding shares of all series of Preferred
    Stock into Common Stock.
 
(3) Includes 387,443 shares of Common Stock held by 21-CCP, 131,853 shares of
    Common Stock held by 21-CCTEP and 52,133 shares of Common Stock held by
    21-CCFP.
 
                                              (Footnotes continued on next page)
 
                                       43
<PAGE>

(Footnotes continued from previous page)
(4) S2 Technology Corporation ('S Squared'), an investment manager, is the
    General Partner of (i) Sci-Tech Investment Partners L.P., which holds 32,686
    shares of Common Stock, (ii) S.G. Partners, L.P., which holds 53,165 shares
    of Common Stock, and (iii) Executive Technology, L.P., which holds 22,027
    shares of Common Stock. Seymour L. Goldblatt, the President of S Squared, is
    the Managing Director of both The Matrix Technology Group N.V., which holds
    13,249 shares of Common Stock, and Core Technology Fund, Inc., which holds
    87,650 shares of Common Stock. S Squared serves as an investment advisor to
    each of the foregoing funds and exercises by agreement investment and voting
    power on behalf of each fund. Mr. Goldblatt, as president of S Squared, also
    exercises by agreement investment and voting power for the following funds:
    (i) Yale University, which holds 174,860 shares of Common Stock, (ii) Yale
    University Retirement Plan for Staff Employees, which holds 8,584 shares of
    Common Stock, (iii) Montsol Investments N.V., which holds 8,820 shares of
    Common Stock, (iv) Alfred University, which holds 6,883 shares of Common
    Stock, (v) Foundation Partners, which holds 6,772 shares of Common Stock,
    (vi) Tampsco II Partnership, which holds 3,772 shares of Common Stock and
    (vii) Hare & Co., which holds 25,429 shares of Common Stock.
 
(5) Includes 263,381 shares held by RRE Giga Investors, L.P. ('RRE Giga') and
    96,190 shares of Common Stock held by RRE Giga Investors II, L.P. ('RRE Giga
    II'). James D. Robinson III is the record owner of 13,333 shares of Common
    Stock. Mr. Robinson is a General Partner of RRE Investors, L.L.C., the
    General Partner of RRE Giga and RRE Giga II. Mr. Robinson disclaims
    beneficial ownership of such shares, except to the extent of his pecuniary
    interest in such shares. Mr. Robinson shares dispositive and voting power of
    such shares with the General Parters of RRE Investors, L.L.C.
 
(6) Includes 199,998 shares of Common Stock held by Akkad and 168,572 shares of
    Common Stock held by Acorn Fund, a series of Acorn Investment Trust (25,715
    shares of which are subject to the exercise of warrants). Wanger Asset

    Management, L.P. serves as the investment manager to each of these entities
    and possesses investment and voting power with respect to each such entity
    but disclaims beneficial ownership.
 
(7) Includes 1,041,474 shares of Common Stock held by Pequot Private Equity
    Fund, L.P. (365,193 shares of which are subject to the exercise of warrants)
    and 131,863 shares of Common Stock held by Pequot Offshore Private Equity
    Fund, L.P. (46,238 shares of which are subject to the exercise of warrants).
    Dawson-Samberg Capital Management, Inc. serves as the investment manager to
    each of these entities and possesses investment and voting power with
    respect to each such entity but disclaims beneficial ownership.
 
(8) Includes options to purchase 220,000 shares of Common Stock and warrants to
    purchase 12,857 shares of Common Stock. Also includes 220,335 shares of
    Common Stock which are held of record by members of Mr. Gartner's family.
    Mr. Gartner disclaims beneficial ownership of shares held by members of his
    family.
 
(9) Includes 8,000 shares of Common Stock held by Mr. Brownstein's children and
    5,333 shares of Common Stock held by Mr. Brownstein and his spouse jointly.
    Mr. Brownstein disclaims beneficial ownership of the 6,000 shares of Common
    Stock held by his adult children, Adam J. and Todd D. Brownstein, and Will
    Gordon, the adult child of his spouse. Mr. Brownstein disclaims beneficial
    ownership of the 2,000 shares of Common Stock held by his minor child, Emily
    Hamilton; however, Mr. Brownstein claims investment and voting power with
    respect to these shares. Of the shares held by Mr. Brownstein directly,
              of such shares are subject to repurchase by the Company under
    certain circumstances.
 
(10) Includes 38,334 shares of Common Stock held by R. Crandall Trust, of which
     Mr. Crandall serves as trustee (6,429 shares of which are subject to the
     exercise of warrants). Also includes options to purchase 7,188 shares of
     Common Stock. Also includes           shares of Common Stock which are
     subject to repurchase by the Company under certain circumstances.
 
(11) Includes options to purchase 25,781 shares of Common Stock.
 
(12) Includes warrants to purchase 5,143 shares of Common Stock.
 
                                              (Footnotes continued on next page)
 
                                       44
<PAGE>

(Footnotes continued from previous page)
(13) Includes 387,443 shares of Common Stock held by 21-CCP, 131,853 shares of
     Common Stock held by 21-CCTEP, 52,133 shares of Common Stock held by
     21-CCFP, 246,646 shares of Common Stock held by Wheatley Partners, L.P.
     ('Wheatley') and 17,163 shares of Common Stock held by Wheatley Foreign
     Partners, L.P. ('Wheatley Foreign'). Mr. Lieber, a director of the Company,
     is a corporate officer of InfoMedia Associates Ltd., a General Partner of
     21-CCP, 21-CCTEP, 21-CCFP and a General Partner of Wheatley LLC, a General
     Partner of Wheatley and Wheatley Foreign. Mr. Lieber disclaims beneficial
     ownership of such shares, except to the extent of his pecuniary interest in

     such shares. Mr. Lieber shares dispositive and voting power of such shares
     with the General Partners of the General Partner of Wheatley and Wheatley
     Foreign and with the other officers of the General Partner of 21-CCP,
     21-CCTEP and 21-CCFP.
 
(14) Includes 264,015 shares of Common Stock issuable upon exercise of options
     and shares of Common Stock issuable upon exercise of warrants held by all
     directors and executive officers as a group. Also includes           shares
     of Common Stock held by all directors and executive officers as a group
     which may be repurchased by the Company under certain circumstances.
 
                                       45

<PAGE>

                          DESCRIPTION OF CAPITAL STOCK
 
     At May 1, 1998, there were outstanding an aggregate of 2,159,472 shares of
Common Stock, 570,000 shares of Series A Preferred Stock, 8,144,642 shares of
Series B Preferred Stock, 2,609,491 shares of Series C Preferred Stock and
285,715 shares of Series D Preferred Stock of the Company. Upon the closing of
the Offering, all of such shares of Convertible Preferred Stock will
automatically be converted into an aggregate of 4,687,784 shares of Common
Stock. All of the shares of Convertible Preferred Stock that have been converted
will cease to be outstanding and may not be reissued. See 'Capitalization.'
 
COMMON STOCK
 
     The Restated Certificate, which will become effective upon the closing of
the Offering, will authorize the issuance of up to 60,000,000 shares of Common
Stock, $.001 par value per share. Holders of Common Stock are entitled to one
vote for each share held on all matters submitted to a vote of stockholders and
do not have cumulative voting rights. Accordingly, holders of a majority of the
shares of Common Stock entitled to vote in any election of directors may elect
all of the directors standing for election. Holders of Common Stock are entitled
to receive ratably such dividends, if any, as may be declared by the Board of
Directors out of funds legally available therefor. Upon the liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to receive ratably the net assets of the Company available after the
payment of all debts and other liabilities. Holders of Common Stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of Common Stock are, and the shares offered by the Company in the
Offering will be, when issued and paid for, fully paid and nonassessable.
 
PREFERRED STOCK
 
     Upon the consummation of the Offering, the Restated Certificate will
authorize the issuance of up to 5,000,000 shares of Preferred Stock, $.001 par
value per share. Under the terms of the Restated Certificate, the Board of
Directors is authorized, subject to any limitations prescribed by law, without
stockholder approval, to issue such shares of Preferred Stock in one or more
series. Each such series of Preferred Stock shall have such rights, preferences,
privileges and restrictions, including voting rights, dividend rights,
conversion rights, redemption privileges and liquidation preferences, as shall
be determined by the Board of Directors.
 
     The purpose of authorizing the Board of Directors to issue Preferred Stock
and determine its rights and preferences is to eliminate delays associated with
a stockholder vote on specific issuances. The issuance of Preferred Stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire, or of discouraging a third party from acquiring, a
majority of the outstanding voting stock of the Company. The Company has no
present plans to issue any shares of Preferred Stock.
 
WARRANTS
 

     At May 1, 1998, there were outstanding warrants to purchase (i) 166,666
shares of Common Stock at an exercise price of $3.00 per share, (ii) 107,876
shares of Series B Preferred Stock at an exercise price of $4.625 per share, 
(iii) 1,654,724 shares of Series C Preferred Stock at an exercise price of $5.28
per share and (iv) 308,572 shares of Series D Preferred Stock at an exercise
price of $9.00 per share. Upon the closing of the Offering, all of such warrants
to purchase Convertible Preferred Stock will be converted to warrants to
purchase Common Stock and there will be outstanding warrants to purchase 166,666
shares of Common Stock at an exercise price of $3.00 per share, 654,432 shares
of Common Stock at an exercise price of $13.50 per share and 35,959 shares of
Common Stock at an exercise price of $13.875 per share. The holders of such
warrants have no rights as stockholders until the exercise thereof.

 
                                       46

<PAGE>


REGISTRATION RIGHTS AGREEMENT
 
     In connection with its preferred stock financings, the Company entered into
a Registration Rights Agreement, dated November 13, 1995, as amended (the
'Registration Rights Agreement'), with its preferred stockholders (the
'Investors') and Messrs. Gartner and Gilmour (the 'Management Persons'). The
Registration Rights Agreement provides that, following June 30, 1998, the
holders of at least 30% of the Registrable Securities (as defined therein) then
outstanding, excluding shares held by Management Persons, shall have two demand
registration requests (no more than one within a twelve-month period). At such
time as the Company becomes eligible to file a registration statement under the
Securities Act on Form S-3, the holders of at least 20% of the Registrable
Securities then outstanding may make six additional demand registration requests
(no more than one within a six-month period). The Registration Rights Agreement
also provides the holders of Registrable Securities with unlimited piggyback
registration rights in the event the Company proposes to register its Common
Stock under the Securities Act in connection with a public offering. The Company
has obtained a waiver from the holders of a majority of the Registrable
Securities of their piggyback registration rights in connection with the
Offering.
 
     Pursuant to the Registration Rights Agreement, the Company will pay all
expenses (other than underwriting discounts and commissions) incurred in
connection with demand registrations and piggyback registrations. In addition,
the Company has agreed to indemnify each holder of Registrable Securities and
any underwriter for such holder against certain liabilities, including
liabilities under federal or state securities laws. The Registration Rights
Agreement terminates with respect to each holder of Registrable Securities upon
the later of (i) three years following the consummation of a Qualified Public
Offering (as defined therein) or (ii) such time following an initial public
offering of the Company as such holder is entitled under Rule 144 to dispose of
all the Registrable Securities held by such holder during any 90-day period.
 
CO-SALE AGREEMENT
 

     In connection with its preferred stock financings, the Company also entered
into a Co-Sale and Stock Restriction Agreement, dated November 13, 1995, as
amended (the 'Co-Sale Agreement') with Mr. Gartner (the 'Founder') and the
Series B Preferred Stockholders (the 'Stockholders'). The Co-Sale Agreement
provides that, except for certain limited sales and sales to the Company, if the
Founder proposes to sell or transfer shares of Common Stock (including shares of
Common Stock issuable upon conversion or exercise of any warrants, options or
preferred stock held by the Founder) ('Stock') in one or more transactions, the
Founder shall promptly give written notice to the Company and the Stockholders
and each Stockholder shall have the right to participate pro-rata in such sale
on the same terms and conditions. In addition, the Co-Sale Agreement provides
that each Stockholder has the right of first offer to purchase such
Stockholder's pro-rata share of all (or any part) of any Stock that the Founder
may from time to time propose to sell. Notwithstanding the foregoing provisions,
the Co-Sale Agreement provides that the Founder may not sell or transfer more
than an aggregate of 266,667 shares of Stock during the three-year period ending
November 1, 1998, subject to limited exceptions, including sales to the Company.
The Co-Sale Agreement terminates upon the earlier of (i) two years following the
closing of a qualified public offering (as described therein) or (ii) the
closing of the Company's sale of all or substantially all of its assets or the
acquisition of the Company by another entity by means of merger or consolidation
resulting in the exchange of the outstanding shares of the Company's capital
stock for securities or consideration issued by the acquiring entity or its
subsidiary.
 
DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS
 
     The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. Section 203 prohibits a publicly-held Delaware
corporation from engaging in a 'business combination' with an 'interested
stockholder' for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. A 'business combination'
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. Subject to certain exceptions, an
'interested stockholder' is a person who, together with affiliates and
associates, owns, or within the past three years did own, 15% or more of a
corporation's voting stock.
 
                                       47
<PAGE>

     The Restated Certificate provides for the division of the Board of
Directors into three classes as nearly equal in size as possible with staggered
three-year terms. See 'Management.' In addition, the Restated Certificate
provides that directors may be removed only for cause by the affirmative vote of
the holders of two-thirds of the shares of capital stock of the Company entitled
to vote. Under the Restated Certificate, any vacancy on the Board of Directors,
however occurring, including a vacancy resulting from an enlargement of the
Board, may only be filled by vote of a majority of the directors then in office.
The classification of the Board of Directors and the limitations on the removal
of directors and filling of vacancies could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from

acquiring, control of the Company.
 
     The Restated Certificate also provides that, after the consummation of the
Offering, any action required or permitted to be taken by the stockholders of
the Company at an annual meeting or special meeting of stockholders may only be
taken if it is properly brought before such meeting and may not be undertaken by
written action in lieu of a meeting. The Restated Certificate further provides
that special meetings of the stockholders may only be called by the Chairman of
the Board of Directors, the Chief Executive Officer or, if none, the President
of the Company or by the Board of Directors. Under the Company's Amended and
Restated By-Laws (the 'By-Laws'), which will become effective upon the closing
of the Offering, in order for any matter to be considered 'properly brought'
before a meeting, a stockholder must comply with certain requirements regarding
advance notice to the Company. The foregoing provisions could have the effect of
delaying until the next stockholders' meeting stockholder actions which are
favored by the holders of a majority of the outstanding voting securities of the
Company. These provisions may also discourage another person or entity from
making a tender offer for the Company's Common Stock, because such person or
entity, even if it acquired a majority of the outstanding voting securities of
the Company, would be able to take action as a stockholder (such as electing new
directors or approving a merger) only at a duly called stockholders meeting, and
not by written consent.
 
     The General Corporation Law of Delaware provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's certificate of incorporation or by-laws,
unless a corporation's certificate of incorporation or by-laws, as the case may
be, requires a greater percentage. The Restated Certificate and the By-Laws
require the affirmative vote of the holders of at least two-thirds of the shares
of capital stock of the Company issued and outstanding and entitled to vote to
amend or repeal any of the provisions described in the prior two paragraphs.
 
     The Restated Certificate contains certain provisions permitted under the
General Corporation Law of Delaware relating to the liability of directors. The
provisions eliminate a director's liability for monetary damages for a breach of
fiduciary duty, except in certain circumstances involving wrongful acts, such as
the breach of a director's duty of loyalty or acts or omissions which involve
intentional misconduct or a knowing violation of law. Further, the Restated
Certificate contains provisions to indemnify the Company's directors and
officers to the fullest extent permitted by the General Corporation Law of
Delaware. The Company believes that these provisions will assist the Company in
attracting and retaining qualified individuals to serve as directors.
 
TRANSFER AGENT AND REGISTRAR
 
     The transfer agent and registrar for the Common Stock will be American
Stock Transfer & Trust Company.
 
                                       48
<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon consummation of the Offering, based on the number of shares

outstanding at                         , 1998, there will be            shares
of Common Stock outstanding. Of these shares, the            shares of Common
Stock sold in the Offering will be freely transferable without restriction under
the Securities Act, except that any shares purchased by 'affiliates' of the
Company, as that term is defined in Rule 144 under the Securities Act ('Rule
144'), generally must be sold in compliance with the limitations of Rule 144
described below. The remaining            shares of Common Stock outstanding
will be 'restricted securities' as that term is defined in Rule 144 (the
'Restricted Shares').
 
     Restricted Shares may be sold in the public market only if registered or if
they qualify for an exemption from registration under Rules 144, 144(k) or 701
promulgated under the Securities Act, which rules are summarized below. Subject
to the lock-up agreements described below and the provisions of Rules 144,
144(k) and 701, additional shares will be available for sale in the public
market (subject in the case of shares held by affiliates to compliance with
certain volume restrictions) as follows: (i) no shares will be available for
immediate sale in the public market on the date of the Prospectus, (ii)
           shares will be eligible for resale 90 days after the date of this
Prospectus, (iii)            shares will be eligible for resale upon expiration
of lock-up agreements 180 days after the date of this Prospectus, and thereafter
(iv) the remaining            shares will be eligible for sale upon expiration
of their respective one-year holding periods.
 
     In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned Restricted Shares for at
least one year, including persons who may be deemed affiliates of the Company,
would be entitled to sell within any three-month period, subject to meeting
certain manner of sale and notice requirements, a number of shares that does not
exceed the greater of (i) one percent of the number of shares of Common Stock
then issued and outstanding (           shares upon consummation of the
Offering) and (ii) the average weekly trading volume of the Common Stock during
the four calendar weeks preceding the filing of a Form 144 notice of sale with
the Securities and Exchange Commission. A person who is not deemed to have been
an affiliate of the Company at any time during the 90 days preceding a sale, and
who has beneficially owned the shares proposed to be sold for at least two
years, is entitled to sell such shares under Rule 144(k) without regard to the
volume limitations described above. Affiliates whose shares are not Restricted
Shares must nonetheless comply with the same Rule 144 restrictions applicable to
Restricted Shares with the exception of the one year holding period requirement.
 
     Rule 701 promulgated under the Securities Act provides that shares of
Common Stock acquired on the exercise of outstanding options may be resold by
persons, other than affiliates, beginning 90 days after the date of this
Prospectus, subject only to the manner of sale provisions of Rule 144, and by
affiliates, beginning 90 days after the date of this Prospectus, subject to all
provisions of Rule 144 except its two-year minimum holding period.
 
     The Company and its executive officers, directors and stockholders (who in
the aggregate will beneficially own approximately            Restricted Shares,
including            shares of Common Stock that may be acquired by them upon
the exercise of stock options exercisable with 60 days of                      ,
1998) have agreed that, subject to certain limited exceptions, for a period
ending 180 days after the consummation of the Offering, without the prior

written consent of Friedman, Billings, Ramsey & Co., Inc., they will not,
directly or indirectly, offer, pledge, sell, offer to sell, contract to sell,
grant any option to purchase or otherwise sell, dispose of, make any short sale
of, loan or grant any rights with respect to any shares of Common Stock, any
options or warrants to purchase any shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, shares of Common Stock.
See 'Underwriting.'
 
     The Company intends to file registration statements on Form S-8 under the
Securities Act to register all shares of Common Stock issuable under the 1995
Stock Plan and the 1996 Option Plan. These registration statements are expected
to be filed approximately 180 days after the effective date of the Registration
Statement of which this Prospectus is a part and will be effective upon filing.
Shares issued upon the exercise of stock options after the effective date of the
Form S-8 registration statements will be eligible for resale in the public
market without restriction, subject to Rule 144 limitations applicable to
affiliates and the lock-up agreements noted above.
 
                                       49
<PAGE>

     As of                      , 1998, the holders of            shares of
Common Stock and warrants to purchase            shares of Common Stock are
entitled to certain demand and/or piggyback registration rights with respect to
such shares (the 'Registrable Shares'). See 'Description of Capital
Stock--Registration Rights Agreement.'
 
     Prior to the Offering, there has been no public market for the Common Stock
of the Company, and no prediction can be made as to the effect, if any, that
market sales of shares of Common Stock or the availability of shares for sale
will have on the market price of the Common Stock prevailing from time to time.
Nevertheless, sales of significant numbers of shares of the Common Stock in the
public market could adversely affect the market price of the Common Stock and
could impair the Company's future ability to raise capital through an offering
of its equity securities.
 
                                       50
<PAGE>

                                  UNDERWRITING
 
     Subject to the terms and conditions of the underwriting agreement among the
Company and the Underwriters (the 'Underwriting Agreement'), the Underwriters
named below, through their Representative, Friedman, Billings, Ramsey & Co.,
Inc. ('FBR'), have severally agreed to purchase from the Company the following
respective numbers of shares of Common Stock:
 

<TABLE>
<CAPTION>
                                                                                    NUMBER OF
UNDERWRITERS                                                                         SHARES
------------                                                                    -   ---------
<S>                                                                                 <C>
Friedman, Billings, Ramsey & Co., Inc............................................
                                                                                    ---------
  Total..........................................................................
                                                                                    ---------
                                                                                    ---------
</TABLE>
 
     The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent, including the absence
of any material adverse change in the Company's business and the receipt of
certain certificates, opinions and letters from the Company and its counsel and
independent auditors. The nature of the Underwriters' obligation is such that
they are committed to purchase all shares of Common Stock offered hereby if any
of such shares are purchased. The offering of Common Stock is made for delivery
when, as and if accepted by the Underwriters and subject to prior sale and to
withdrawal, cancellation or modification of the Offering without notice. The
Underwriters reserve the right to reject an order for the purchase of shares in
whole or in part.
 
     The Underwriters propose to offer the shares of Common Stock directly to
the public at the initial public offering price set forth on the cover page of
this Prospectus and to certain dealers at such price less a concession not in
excess of $          per share. The Underwriters may allow and such dealers may
re-allow a concession not in excess of $          per share to certain other
dealers. The Underwriters have informed the Company that they do not intend to
confirm sales to any accounts over which they exercise discretionary authority.
After the initial public offering of Common Stock, the offering price and other
selling terms may be changed by the Representatives of the Underwriters.
 
     The Company has granted to the Underwriters the over-allotment option,
exercisable no later than 30 days after the date of this Prospectus, to purchase
up to              additional shares of Common Stock at the initial public
offering price, less the underwriting discount, set forth on the cover page of
this Prospectus. To the extent the Underwriters exercise such over-allotment
option, each of the Underwriters will have a firm commitment to purchase
approximately the same percentage thereof that the number of shares of Common
Stock to be purchased by it shown in the table above bears to the total number
of shares of Common Stock offered hereby. The Company will be obligated,
pursuant to the over-allotment option, to sell shares to the Underwriters to the
extent the over-allotment option is exercised. The Underwriters may exercise the
over-allotment option only to cover over-allotments made in connection with the
sale of Common Stock offered hereby.
 
     The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments the Underwriters may be required to make in respect thereof. The
Company will reimburse the Underwriters for their reasonable out-of-pocket
expenses, including legal fees and expenses.

 
     Prior to the Offering, there has been no public market for Common Stock.
The initial public offering price for Common Stock will be determined by
negotiation among the Company and the Representatives. Among the factors to be
considered in determining the initial public offering price are prevailing
market conditions, revenues and earnings of the Company, market valuations of
other companies engaged in activities similar to the Company, estimates of the
business potential and prospects of the Company, the present state of the
Company's business operations, the Company's management and other factors deemed
relevant. The estimated initial public offering price range set forth on the
cover of this Prospectus is subject to change as a result of market conditions
and other factors. There can, however, be no assurance that the price at which
the shares of Common Stock will sell in the public market after the Offering
will not be lower than the price at which they are sold by the Underwriters.
 
                                       51
<PAGE>

     Until the distribution of the Common Stock is completed, the rules of the
SEC may limit the ability of the Underwriters and certain selling group members
to bid for or purchase Common Stock. As an exception to these rules, the
Representatives are permitted to engage in certain transactions that stabilize
the price of shares of Common Stock. Such transactions may consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of shares
Common Stock.
 
     If the Underwriters create a short position in shares of Common Stock in
connection with the Offering, i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus, the Representatives may
reduce that short position by purchasing shares of Common Stock in the open
market. The Representatives may also elect to reduce any short position by
exercising all or part of the over-allotment option described above.
 
     The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Common Stock in the open market to reduce the Underwriters' short
position or to stabilize the price of shares of Common Stock, they may reclaim
the amount of the selling concession from the Underwriters and selling group
members who sold such shares of Common Stock as part of the Offering.
 
     In general, purchases of securities for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
 
     Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of shares of Common Stock. In addition,
neither the Company nor any of the Underwriters makes any representation that
the Representatives will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
 
     The Company, its directors, officers and certain securityholders have each

agreed that it or they will not, without the prior written consent of FBR,
directly or indirectly, offer, pledge, sell, offer to sell, contract to sell,
grant any option to purchase or otherwise sell, dispose of, make any short sale
of, loan or grant any rights with respect to any shares of Common Stock, any
options or warrants to purchase any shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, shares of Common Stock for
the period ending 180 days after the consummation of the Offering, except that
the Company may grant additional options under its stock option plans.
 
     Up to    % of the shares of Common Stock offered hereby may be reserved for
sale to certain employees and directors of the Company and their family members,
at a price equal to the initial public offering price per share less the
underwriting discount. The number of shares available for sale to the general
public will be reduced to the extent such persons purchase such reserved shares.
Any reserved shares not so purchased will be offered by the Underwriters to the
general public on the same terms as the other shares offered hereby.
 
     In April 1998, the Company engaged FBR to act as its financial advisor and
lead underwriter in connection with the Offering and to provide certain other
investment banking services to the Company for customary fees.
 
     In April 1998, the Company entered into a Loan and Warrant Purchase
Agreement (the 'Loan Agreement') with certain affiliates of FBR (the 'Lenders'),
pursuant to which the Company borrowed $10.0 million from the Lenders (the
'Bridge Financing') and issued the Lenders the Bridge Notes in the aggregate
principal amount of $10.0 million and warrants (the 'Bridge Warrants') to
purchase an aggregate of 166,666 shares of Common Stock at an exercise price of
$3.00 per share. The Bridge Notes accrue interest at the rate of 12% per annum
on the principal amount thereof outstanding during the period beginning on the
date of issuance and ending on the Maturity Date (as defined below). The
obligations under the Bridge Notes are secured by substantially all of the
assets of the Company. The outstanding principal amount of, and any unpaid
accrued interest on, the Bridge Notes is due and payable on the consummation of
the Offering (the 'Maturity Date') and may be prepaid in whole or in part at any
time without penalty.
 
                                       52
<PAGE>

                                 LEGAL MATTERS
 
     The validity of the shares of Common Stock offered by the Company hereby
will be passed upon for the Company by Weil, Gotshal & Manges LLP, New York, New
York. Certain legal matters in connection with this Offering will be passed upon
for the Underwriters by Brobeck, Phleger & Harrison LLP, New York, New York.
 
                                    EXPERTS
 
     The consolidated balance sheets of the Company as of December 31, 1997 and
1996 and the consolidated statements of operations, changes in stockholders'
equity and cash flows for the period March 17, 1995 (the date of inception) to
December 31, 1995 and each of the years ended December 31, 1996 and 1997 and the
combined statements of operations and cash flows of BIS Strategic Decisions for
the period January 1, 1995 to April 5, 1995 included in this Prospectus have

been included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
 
                             ADDITIONAL INFORMATION
 
     The Company has filed with the Securities and Exchange Commission (the
'Commission'), Washington, D.C. 20549, a Registration Statement (which term
shall include all amendments, exhibits and schedules thereto) on Form S-1 under
the Securities Act with respect to the shares of Common Stock offered hereby.
This Prospectus, which constitutes a part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission, to which Registration Statement reference is hereby made.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to are not necessarily complete. With respect to each
such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference. The Registration Statement and the
exhibits thereto may be inspected and copied at prescribed rates at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of
the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. In
addition, the Company is required to file electronic versions of these documents
with the Commission through the Commission's Electronic Data Gathering, Analysis
and Retrieval (EDGAR) system. The Commission maintains a World Wide Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
 
                                       53

<PAGE>

                         INDEX TO FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                                                          PAGE(S)
                                                                                                      ----------------
<S>                                                                                                   <C>
GIGA INFORMATION GROUP, INC.:
Report of Independent Accountants..................................................................                F-2
Consolidated Balance Sheets at December 31, 1996 and 1997 and March 31, 1998 (unaudited)...........                F-3
Consolidated Statements of Operations for the period March 17, 1995 (date of inception) to December
  31, 1995; the years ended December 31, 1996 and 1997 and the three months ended March 31, 1997
  and 1998 (unaudited).............................................................................                F-4
Consolidated Statements of Changes in Stockholders' Equity for the period March 17, 1995 (date of
  inception) to December 31, 1995; the years ended December 31, 1996 and 1997 and the three months
  ended March 31, 1997 and 1998 (unaudited)........................................................                F-5
Consolidated Statements of Cash Flows for the period March 17, 1995 (date of inception) to December
  31, 1995; the years ended December 31, 1996 and 1997 and the three months ended March 31, 1997
  and 1998 (unaudited).............................................................................                F-6
Notes to Consolidated Financial Statements.........................................................         F-7 - F-25
 
BIS STRATEGIC DECISIONS:
Report of Independent Accountants..................................................................               F-26
Combined Statement of Operations for the period January 1, 1995 to April 5, 1995...................               F-27
Combined Statement of Cash Flows for the period January 1, 1995 to April 5, 1995...................               F-28
Notes to Combined Financial Statements.............................................................        F-29 - F-32
</TABLE>
 
                                      F-1

<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders of
Giga Information Group, Inc.:
 
We have audited the accompanying consolidated balance sheets of Giga Information
Group, Inc. as of December 31, 1996 and 1997 and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
the period March 17, 1995 (date of inception) to December 31, 1995 and the years
ended December 31, 1996 and 1997. 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 consolidated financial position of Giga Information
Group, Inc. as of December 31, 1996 and 1997 and the results of its operations
and its cash flows for the period March 17, 1995 (date of inception) to December
31, 1995 and the years ended December 31, 1996 and 1997 in conformity with
generally accepted accounting principles.
 
Boston, Massachusetts
April 17, 1998, except for the information
in the final two paragraphs of Note 20, as to
which the date is May 11, 1998.
 
                                      F-2

<PAGE>
                          GIGA INFORMATION GROUP, INC.
                          CONSOLIDATED BALANCE SHEETS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                                    ------------------     MARCH 31,
                                                                                     1996       1997         1998
                                                                                    -------    -------    -----------
                                                                                                          (UNAUDITED)
<S>                                                                                 <C>        <C>        <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents......................................................   $ 8,286    $ 3,539      $ 1,753
  Trade accounts receivable, net of allowance for uncollectible accounts of $536,
    $483 and $405 at December 31, 1996 and 1997 and March 31, 1998,
    respectively.................................................................     3,391      8,961        5,684
  Unbilled accounts receivable...................................................     1,885      4,727        2,652
  Prepaid expenses and other current assets......................................     1,753      3,753        3,665
                                                                                    -------    -------    -----------
  Total current assets...........................................................    15,315     20,980       13,754
Property and equipment, net......................................................     2,397      1,695        1,678
Leasehold intangible (Note 3)....................................................       603        177           71
Goodwill, net of accumulated amortization of $1,507, $2,692 and $2,692 at
  December 31, 1996 and 1997 and March 31, 1998, respectively....................     1,186         --           --
Note receivable..................................................................       159         --           --
Other assets.....................................................................        19        171          170
                                                                                    -------    -------    -----------
    Total assets.................................................................   $19,679    $23,023      $15,673
                                                                                    -------    -------    -----------
                                                                                    -------    -------    -----------
 
                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Accounts payable...............................................................   $ 1,319    $ 2,213      $ 1,304
  Deferred revenues..............................................................     6,832     20,604       19,458
  Accrued expenses and other current liabilities.................................     5,557      6,385        5,033
  Debt--other, current portion...................................................        --      1,526        1,556
  Debt--related party, current portion...........................................        --        448          224
  Net liabilities of discontinued operations, current portion....................     1,494         --           --
                                                                                    -------    -------    -----------
  Total current liabilities......................................................    15,202     31,176       27,575
Long-term debt--related party....................................................       424         --           --
Long-term debt--other............................................................     1,087        937          848
Net liabilities of discontinued operations, less current portion.................     1,307         --           --
                                                                                    -------    -------    -----------
    Total liabilities............................................................    18,020     32,113       28,423

Commitments and other contingent liabilities (Note 12)

 
Stockholders' equity (deficit):
  Preferred Stock, $.001 par value; 12,000,000, 16,500,000 and 16,500,000 shares
    authorized at December 31, 1996 and 1997 and March 31, 1998, respectively:
    650,000 shares designated as Series A Convertible Preferred Stock, 570,000
      shares issued and outstanding (liquidation preference of $2,850,000).......         1          1            1
    9,000,000 shares designated as Series B Convertible Preferred Stock,
      8,144,642 shares issued and outstanding (liquidation preference of
      $28,506,000)...............................................................         8          8            8
    4,500,000 shares designated as Series C Convertible Preferred Stock, 0,
      2,609,491 and 2,609,491 shares issued and outstanding at December 31, 1996
      and 1997 and March 31, 1998, respectively (liquidation preference of
      $10,725,000)...............................................................        --          3            3
    Common Stock, $.001 par value; 50,000,000 shares authorized, 2,026,738,
      2,093,107 and 2,124,142 shares issued and outstanding at December 31, 1996
      and 1997 and March 31, 1998, respectively..................................         6          6            6
Additional paid-in capital.......................................................    30,638     41,282       42,584
Stock subscriptions receivable...................................................       (25)        --           --
Deferred Compensation............................................................        --         --       (1,229)
Accumulated deficit..............................................................   (29,112)   (50,929)     (54,736)
Cumulative translation adjustments...............................................       143        539          613
                                                                                    -------    -------    -----------
Total stockholders' equity (deficit).............................................     1,659     (9,090)     (12,750)
                                                                                    -------    -------    -----------
    Total liabilities and stockholders' equity (deficit).........................   $19,679    $23,023      $15,673
                                                                                    -------    -------    -----------
                                                                                    -------    -------    -----------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                      F-3

<PAGE>

                          GIGA INFORMATION GROUP, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER         THREE MONTHS ENDED
                                                       MARCH 17 TO                31,                     MARCH 31,
                                                       DECEMBER 31,      ----------------------      --------------------
                                                           1995            1996          1997         1997         1998
                                                       ------------      --------      --------      -------      -------
                                                                                                         (UNAUDITED)
<S>                                                    <C>               <C>           <C>           <C>          <C>
Revenues:
  Continuous information services...................                     $  3,149      $ 14,600      $ 2,570      $ 6,804
  Other services....................................     $  5,517           6,043         4,715        1,276        1,693
  Publications......................................        1,442             946           344          180           55
                                                       ------------      --------      --------      -------      -------
  Total revenues....................................        6,959          10,138        19,659        4,026        8,552
Costs and expenses:
  Cost of services..................................        4,707          12,336        12,477        3,202        4,391
  Cost of publications..............................          346             790           174           75           71
  Sales and marketing...............................        1,016           6,706        19,617        4,158        5,781
  Research and development..........................          348           1,789         1,975          659          339
  General and administrative........................        5,760           9,739         6,419        1,061        1,339
  Depreciation and amortization.....................        1,387           2,391         2,810          634          385
                                                       ------------      --------      --------      -------      -------
  Total costs and expenses..........................       13,564          33,751        43,472        9,789       12,306
                                                       ------------      --------      --------      -------      -------
Loss from operations................................       (6,605)        (23,613)      (23,813)      (5,763)      (3,754)
                                                       ------------      --------      --------      -------      -------
Interest income.....................................          246             515           277           98           37
Interest expense....................................         (100)            (95)         (235)         (17)         (86)
                                                       ------------      --------      --------      -------      -------
  Loss from continuing operations before income
    taxes...........................................       (6,459)        (23,193)      (23,771)      (5,682)      (3,803)
Income tax (benefit) charge.........................       (1,093)           (491)         (641)           7            4
                                                       ------------      --------      --------      -------      -------
  Loss from continuing operations...................       (5,366)        (22,702)      (23,130)      (5,689)      (3,807)
                                                       ------------      --------      --------      -------      -------
Discontinued operations:
  Income (loss) from the discontinued BIS market
    research business, less applicable income taxes
    of $1,497 and $114 for the period March 17 to
    December 31, 1995 and the year ended December
    31, 1996........................................        1,490             (79)           --           --           --
  Income (loss) from the discontinued Shrapnel
    business, less applicable income taxes of $0....          154            (134)           --           --           --
  Income (loss) on disposal of discontinued BIS
    market research business, less applicable income
    taxes of $158 and $568 for the years ended
    December 31, 1996 and 1997, respectively........           --          (2,315)        1,101           --           --

  Income (loss) on disposal of discontinued Shrapnel
    business, less applicable income taxes of $0 and
    $109 for the years ended December 31, 1996 and
    1997, respectively..............................           --            (160)          212           --           --
                                                       ------------      --------      --------      -------      -------
  Income (loss) from discontinued operations........        1,644          (2,688)        1,313           --           --
                                                       ------------      --------      --------      -------      -------
Net loss............................................     $ (3,722)       $(25,390)     $(21,817)     $(5,689)     $(3,807)
                                                       ------------      --------      --------      -------      -------
                                                       ------------      --------      --------      -------      -------
Results per common share (Note 2):
  Historical--basic and diluted:
    Loss from continuing operations.................                                   $ (11.16)                  $ (1.80)
                                                                                       --------                   -------
                                                                                       --------                   -------
    Net loss........................................                                   $ (10.53)                  $ (1.80)
                                                                                       --------                   -------
                                                                                       --------                   -------
    Weighted average number of shares...............                                   2,072,837                  2,115,837
                                                                                       --------                   -------
                                                                                       --------                   -------
  Pro forma--basic and diluted (unaudited):
    Loss from continuing operations.................                                   $  (3.42)                  $ (0.56)
                                                                                       --------                   -------
                                                                                       --------                   -------
    Net loss........................................                                   $  (3.23)                  $ (0.56)
                                                                                       --------                   -------
                                                                                       --------                   -------
    Weighted average number of shares ..............                                   6,759,621                  6,802,621
                                                                                       --------                   -------
                                                                                       --------                   -------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-4

<PAGE>

                          GIGA INFORMATION GROUP, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
  FOR THE PERIOD MARCH 17, 1995 (DATE OF INCEPTION) TO DECEMBER 31, 1995, THE
                                  YEARS ENDED
 DECEMBER 31, 1996 AND 1997 AND THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998
                                  (UNAUDITED)
                       (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                SERIES A       SERIES B       SERIES C
                                               CONVERTIBLE    CONVERTIBLE    CONVERTIBLE              ADDITIONAL       STOCK
                                                PREFERRED      PREFERRED      PREFERRED     COMMON     PAID-IN      SUBSCRIPTION
                                                  STOCK          STOCK          STOCK       STOCK      CAPITAL       RECEIVABLE
                                               -----------    -----------    -----------    ------    ----------    ------------
<S>                                            <C>            <C>            <C>            <C>       <C>           <C>
Issuance of 2,036,002 shares of Common
 Stock......................................                                                 $  6      $  1,054        $ (350)
Issuance of 160,000 shares of Series A
 Convertible Preferred Stock and convertible
 note for acquisition of ExperNet
 Corporation................................                                                                800
Issuance of 410,000 shares of Series A
 Convertible Preferred Stock, net of
 expenses...................................     $     1                                                  2,049           (25)
Issuance of 4,026,772 shares of Series B
 Convertible Preferred stock, net of
 expenses...................................                    $     4                                  13,212
Conversion of bridge financing to 571,428
 shares of Series B Convertible Preferred
 Stock......................................                                                              1,980
Net loss....................................
Translation adjustments.....................
                                               -----------    -----------    -----------    ------    ----------        -----
Balance at December 31, 1995................           1              4                         6        19,095          (375)
                                               -----------    -----------    -----------    ------    ----------        -----
Payment of stock subscription receivable....                                                                              300
Issuance of 3,327,728 shares of Series B
 Convertible Preferred Stock, net of
 expenses...................................                          4                                  11,546
Issuance of 36,458 shares of Common Stock...                                                                 70
Repurchase of 12,389 shares of Common
 Stock......................................                                                                (23)
Cancellation of 33,333 shares of Common
 Stock issued...............................                                                                (50)           50
Exercise of warrant for 218,714 shares of
 Series B Convertible Preferred Stock.......
Net loss....................................
Translation adjustments.....................
                                               -----------    -----------    -----------    ------    ----------        -----
Balance at December 31, 1996................           1              8                         6        30,638           (25)
                                               -----------    -----------    -----------    ------    ----------        -----

Issuance of 72,479 shares of Common Stock...                                                                148
Repurchase of 6,110 shares of Common
 Stock......................................                                                                (38)
Issuance of 2,609,491 shares of Series C
 Convertible Preferred Stock, net of
 expenses...................................                                   $     3                   10,534
Payment of stock subscription receivable....                                                                               25
Net loss....................................
Translation adjustments.....................
                                               -----------    -----------    -----------    ------    ----------        -----
Balance at December 31, 1997................           1              8              3          6        41,282            --
                                               -----------    -----------    -----------    ------    ----------        -----
Issuance of 31,035 shares of Common Stock...                                                                 73
Deferred Compensation.......................                                                              1,229
Net loss....................................
Translation adjustments.....................
                                               -----------    -----------    -----------    ------    ----------        -----
Balance at March 31, 1998 (unaudited).......     $     1        $     8        $     3       $  6      $ 42,584            --
                                               -----------    -----------    -----------    ------    ----------        -----
                                               -----------    -----------    -----------    ------    ----------        -----
 

<CAPTION>
 
                                                              CUMULATIVE                        TOTAL
                                                DEFERRED      TRANSLATION    ACCUMULATED    STOCKHOLDERS'
                                              COMPENSATION    ADJUSTMENTS      DEFICIT         EQUITY
                                              ------------    -----------    -----------    -------------
<S>                                            <C>            <C>            <C>            <C>
Issuance of 2,036,002 shares of Common
 Stock......................................                                                  $     710
Issuance of 160,000 shares of Series A
 Convertible Preferred Stock and convertible
 note for acquisition of ExperNet
 Corporation................................                                                        800
Issuance of 410,000 shares of Series A
 Convertible Preferred Stock, net of
 expenses...................................                                                      2,025
Issuance of 4,026,772 shares of Series B
 Convertible Preferred stock, net of
 expenses...................................                                                     13,216
Conversion of bridge financing to 571,428
 shares of Series B Convertible Preferred
 Stock......................................                                                      1,980
Net loss....................................                                  $  (3,722)         (3,722)
Translation adjustments.....................                     $ (37)                             (37)
                                                  ------           ---       -----------    -------------
Balance at December 31, 1995................                       (37)          (3,722)         14,972
                                                  ------           ---       -----------    -------------
Payment of stock subscription receivable....                                                        300
Issuance of 3,327,728 shares of Series B
 Convertible Preferred Stock, net of
 expenses...................................                                                     11,550
Issuance of 36,458 shares of Common Stock...                                                         70
Repurchase of 12,389 shares of Common
 Stock......................................                                                        (23)
Cancellation of 33,333 shares of Common
 Stock issued...............................                                                         --
Exercise of warrant for 218,714 shares of
 Series B Convertible Preferred Stock.......                                                         --
Net loss....................................                                    (25,390)        (25,390)
Translation adjustments.....................                       180                              180
                                                  ------           ---       -----------    -------------
Balance at December 31, 1996................                       143          (29,112)          1,659
                                                  ------           ---       -----------    -------------
Issuance of 72,479 shares of Common Stock...                                                        148
Repurchase of 6,110 shares of Common
 Stock......................................                                                        (38)
Issuance of 2,609,491 shares of Series C
 Convertible Preferred Stock, net of
 expenses...................................                                                     10,537
Payment of stock subscription receivable....                                                         25
Net loss....................................                                    (21,817)        (21,817)
Translation adjustments.....................                       396                              396
                                                  ------           ---       -----------    -------------

Balance at December 31, 1997................                       539          (50,929)         (9,090)
                                                  ------           ---       -----------    -------------
Issuance of 31,035 shares of Common Stock...                                                         73
Deferred Compensation.......................      (1,229)                                             0
Net loss....................................                                     (3,807)         (3,807)
Translation adjustments.....................                        74                               74
                                                  ------           ---       -----------    -------------
Balance at March 31, 1998 (unaudited).......    $ (1,229)        $ 613        $ (54,736)      $ (12,750)
                                                  ------           ---       -----------    -------------
                                                  ------           ---       -----------    -------------
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-5

<PAGE>

                          GIGA INFORMATION GROUP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                                      THREE MONTHS ENDED
                                                                                   YEAR ENDED
                                                              MARCH 17 TO         DECEMBER 31,            MARCH 31,
                                                              DECEMBER 31,    --------------------    ------------------
                                                                  1995          1996        1997       1997       1998
                                                              ------------    --------    --------    -------    -------
                                                                                                         (UNAUDITED)
<S>                                                           <C>             <C>         <C>         <C>        <C>
Cash flows from operating activities:
  Net loss.................................................     $ (3,722)     $(25,390)   $(21,817)   $(5,689)   $(3,807)
  Adjustments to reconcile net loss to net cash used in
    continuing operating activities:
    (Income) loss from discontinued operations.............       (1,644)          213          --         --         --
    (Income) loss on disposal of discontinued operations...           --         2,475      (1,313)        --         --
    Depreciation and amortization..........................        1,387         2,391       2,810        634        385
    Net loss on write-down of investments..................           --           200         179         --         --
    Provision for doubtful accounts........................           20           395          27         59        (79)
    Decrease in deferred taxes.............................           50            61          --         --         --
    Interest on long-term debt added to principal..........           37            74          74         18         13
    Interest on note receivable added to principal.........           --            (9)         (5)        (3)        --
    Gain on sale of fixed assets...........................           (3)          (11)         (2)        (7)        (9)
    Other non-cash items...................................           --            --          87          8          8
  Change in assets and liabilities net of effects of
    acquisitions:
    Decrease (increase) in accounts receivable.............        1,489        (4,092)     (8,405)       563      5,321
    Increase in prepaid expenses and other current
      assets...............................................       (1,509)         (536)     (1,755)      (853)       (53)
    Increase (decrease) in accounts payable and accrued
      liabilities..........................................        1,988         1,928       1,894       (458)    (2,045)
    Increase (decrease) in deferred revenues...............          551         4,582      13,696      2,137     (1,023)
                                                              ------------    --------    --------    -------    -------
Net cash provided by (used in) operating activities:
  Net cash used in continuing operations...................       (1,356)      (17,719)    (14,530)    (3,591)    (1,289)
  Net cash provided by (used in) discontinued operations...          335          (571)     (1,667)      (145)       (13)
                                                              ------------    --------    --------    -------    -------
    Net cash used in operating activities..................       (1,021)      (18,290)    (16,197)    (3,736)    (1,302)
                                                              ------------    --------    --------    -------    -------

Cash flows from investing activities:
  Acquisition of equipment and improvements................         (961)       (1,799)       (559)      (151)      (261)
  Net cash acquired in BIS acquisition.....................        1,013            --          --         --         --
  Net cash acquired in ExperNet acquisition................           61            --          --         --         --
  Issuance of note receivable..............................           --          (150)         --         --         --
  Proceeds from sale of Shrapnel...........................           --            --         293         --         --
  Other, net...............................................           76            40          60         24         10
                                                              ------------    --------    --------    -------    -------
    Cash provided by (used in) investing activities........          189        (1,909)       (206)      (127)      (251)
                                                              ------------    --------    --------    -------    -------
Cash flows from financing activities:
  Proceeds from issuance of Common Stock...................          710            70          61          8         65
  Repurchase of common stock...............................           --           (23)        (38)        --         --
  Proceeds from issuance of Series A Convertible Preferred
    Stock..................................................        2,025            --          --         --         --
  Proceeds from bridge financing, net of issuance costs
    of $20.................................................        1,980            --          --         --         --
  Proceeds from issuance of Series B Convertible
    Preferred Stock, net of issuance costs of $90 and
      $878.................................................       13,216        11,557          --         --         --
  Proceeds from issuance of Series C Convertible
    Preferred Stock, net of issuance costs of $188.........           --            --      10,537         --         --
  Repayments of principal to related parties...............         (321)           --          --         --       (224)
  Proceeds from stock subscriptions receivable.............           --           300          25         --         --
  Net increase (decrease) in short-term borrowings.........          234          (294)       (193)        56         --
  Proceeds from long-term debt.............................           --            --       1,465         --         --
  Principal payments on long-term debt.....................          (97)          (11)       (139)        --        (72)
                                                              ------------    --------    --------    -------    -------
    Cash provided by (used in) financing activities........       17,747        11,599      11,718         64       (231)
                                                              ------------    --------    --------    -------    -------
  Effect of exchange rates on cash.........................          (39)           10         (62)       (28)        (2)
  Net increase (decrease) in cash and cash equivalents.....       16,876        (8,590)     (4,747)    (3,827)    (1,786)
  Cash and cash equivalents, beginning of period...........           --        16,876       8,286      8,286      3,539
                                                              ------------    --------    --------    -------    -------
    Cash and cash equivalents, end of period...............     $ 16,876      $  8,286    $  3,539    $ 4,459    $ 1,753
                                                              ------------    --------    --------    -------    -------
                                                              ------------    --------    --------    -------    -------
  Supplementary cash flow information:
    Income taxes paid......................................     $     39      $     30    $     15    $     5    $     5
    Interest paid..........................................     $     58      $     22    $    121    $     0    $    55
</TABLE>
 
   The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-6

<PAGE>

                          GIGA INFORMATION GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
1. THE COMPANY:
 
     Giga Information Group, Inc. ('Giga' or the 'Company') was incorporated on
March 17, 1995 (date of inception) in the State of Delaware. The Company's
principal business activity is to provide information, analysis and advice
relating to developments and trends in the computing, telecommunications and
related industries (collectively, the information technology or 'IT' industry)
primarily through subscription-based products. The Company derives its revenues
primarily from three sources; Continuous Information Services, which include its
Giga Advisory Service and IT Practices; Other Services, which include events and
consulting; and Publications. Continuous Information Services consist of
monitoring, research and analysis of IT developments and trends to support
customers' IT decisions, distributed through a variety of electronic and print
media, as well as inquiry access to analysts and practitioners and participation
in briefings and conferences, packaged into an annually renewable
subscription-based product. On April 5, 1995, the Company acquired BIS Strategic
Decisions, Inc. and its five foreign affiliates (collectively, 'BIS'). On July
6, 1995 Giga acquired a 77.8% equity interest in ExperNet Corporation
('ExperNet') which was owned by Gideon I. Gartner, Chairman of the Board of
Directors and Chief Executive Officer of the Company, and David L. Gilmour, then
a director and officer of the Company, and, on December 29, 1995, acquired the
remaining 22.2% interest.
 
     The Company is subject to a number of risks similar to other companies in
its industry including a dependence on sales and renewals of subscription-based
services, uncertainty of market acceptance of its services, competition from
other companies including those with greater resources than the Company,
dependence on key individuals, the development of new services and products, the
need to obtain additional financing, protection of proprietary information and
technology and the risks associated with international operations.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
  Basis of Presentation and Principles of Consolidation
 
     The consolidated financial statements of the Company include the accounts
of the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated. Certain prior year amounts have
been reclassified to conform to the current year's presentation.
 
     Pursuant to the purchase method of accounting, acquired assets and
liabilities were revalued to their fair market value. The excess of the purchase
price over the fair market value of the net assets acquired was recorded as
goodwill.
 
  Interim Financial Information
 

     The consolidated financial statements of the Company at March 31, 1998 and
for the three months ended March 31, 1997 and 1998 are unaudited. All
adjustments (consisting only of normal recurring adjustments) have been made
which, in the opinion of management, are necessary for a fair presentation.
Results of operations for the three months ended March 31, 1998 are not
necessarily indicative of the results that may be expected for any future
period.
 
  Cash and Cash Equivalents
 
     Cash equivalents consist primarily of liquid investments, with original
maturities of 90 days or less, in money market funds which are convertible to a
known amount of cash and bear an insignificant risk of change in value.
 
                                      F-7
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
  Foreign Currency Translation
 
     The accounts of foreign subsidiaries are translated using exchange rates in
effect at period-end for assets and liabilities and at average exchange rates
during the period for results of operations. The local currency for all foreign
subsidiaries is the functional currency. The related translation adjustments are
reported as a separate component of stockholders' equity (deficit). Gains
(losses) resulting from foreign currency transactions are included in other
income (expense) and are immaterial for all periods presented.
 
  Concentration of Credit Risk
 
     Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of temporary cash investments in
money market funds and trade accounts receivable. The Company places its
temporary cash investments with high credit quality financial institutions in
accordance with its investment policy as approved by its board of directors.
Trade receivables result from contracts with various customers. Giga generally
does not require collateral or other security from these customers. The Company
performs ongoing credit evaluations of its customers and maintains reserves for
potential credit losses. Such losses have historically been within management's
expectations.
 
  Income Taxes
 
     The Company recognizes deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the Company's
consolidated financial statements. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities using currently enacted tax
rates for the year in which the differences are expected to reverse. The Company

records a valuation allowance against net deferred tax assets if, based upon the
available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.
 
  Revenue and Commission Expense Recognition
 
     Subscription revenues from Continuous Information Services are deferred and
recognized on a pro rata basis over the contract period, generally one year. The
Company's policy is to record a receivable and related deferred revenues for the
full amount of the contract on the date it is signed. Contracts are generally
billable upon signing. The Company also records the related commission
obligation upon the signing of these contracts and amortizes the corresponding
deferred commission expense over the contract period in which the related
Continuous Information Services revenues are earned. In the event the contract
is canceled by the customer, the commission is refundable with respect to the
portion related to the revenue which will not be recognized.
 
     Revenues from (i) Advisory Service, IT Practices and Advisory Consulting
are aggregated into Continuous Information Services, (ii) Events and other
services, principally consulting, are aggregated into Other Services and (iii)
Publications are listed separately. Revenues from Other Services are recognized
as follows: events as they occur and consulting as such services are performed.
Revenues from Publications are recognized when publications are delivered.
 
     Unbilled accounts receivable pertain to the portion of a customer's service
period not yet invoiced in accordance with contractual quarterly billing terms
offered in conjunction with the Continuous Information Services.
 
                                      F-8
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
  Property and Equipment
 
     Property and equipment are stated at cost for items acquired after the
initial acquisition of the respective entities and at estimated fair market
value for those assets in existence at date of acquisition. Expenditures for
maintenance and repairs are charged to expense; expenditures for additions,
renewals and betterments are capitalized.
 
     Depreciation is computed for financial reporting purposes principally by
use of the straight-line method over the following estimated useful lives:
 

<TABLE>
<S>                                                   <C>
Computers and related equipment.....................  3 years
Furniture and fixtures..............................  5 years
Motor vehicles......................................  4 years
Leaseholds and related improvements.................  Shorter of economic life or remaining lease term
</TABLE>
 
     Upon retirement or sale, the cost of assets disposed of and the related
accumulated depreciation are eliminated from the balance sheet and the resulting
gains or losses reflected in income.
 
  Long-Lived Assets
 
     The Company regularly reviews long-lived assets for impairment. Any
write-downs are treated as permanent reductions in the carrying amount of the
assets. Management's policy regarding long-lived assets is to evaluate the
recoverability of its assets when the facts and circumstances suggest that these
assets may be impaired. The test of such recoverability is a comparison of the
asset value to its expected undiscounted future cash flows over the remaining
life of the asset. This analysis relies on a number of factors including
operating results, business plans, budgets, economic projections and changes in
management's strategic direction or market emphasis.
 
  Goodwill
 
     Goodwill represents the excess of the purchase price of entities acquired
over the fair values of amounts assigned to the net tangible and intangible
assets acquired and liabilities assumed. Amortization is recorded using the
straight-line method over two years for the BIS acquisition and five years for
the ExperNet acquisition. The carrying value of goodwill is included in
management's evaluation of the recoverability of its long-lived assets. During
1996, approximately $666,000 of goodwill identifiable with the discontinuance of
the BIS market research business was written off to amortization expense in
connection with the disposition of this business. In 1997, the Company's
assessment of the recoverability of goodwill associated with the ExperNet
acquisition indicated a de-minimis level of future cash flows associated with
this business. As such, the Company wrote-off the remaining unamortized portion
of the goodwill resulting in a charge to amortization expense of $1,025,000.
Total amortization expense related to goodwill was approximately $578,000,
$929,000, $1,186,000, $231,000 and $0 for the period from March 17, 1995 to
December 31, 1995, the years ended December 31, 1996 and 1997 and the three
months ended March 31, 1997 and 1998, respectively.
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect (i) the reported amounts of assets and liabilities, (ii)
disclosure of contingent assets and liabilities at the dates of the financial
statements and (iii) the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
 
                                      F-9

<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
  Historical Net Loss per Common Share
 
     The Company computes basic and diluted earnings per share in accordance
with Statement of Financial Accounting Standard ('SFAS') No. 128, 'Earnings Per
Share.' Basic earnings per share is based upon the weighted average number of
common shares outstanding during the period. Common equivalent shares have been
excluded from the computation of diluted loss per share as their effect would be
anti-dilutive. Common equivalent shares result from the assumed exercise of
outstanding stock options and warrants, the proceeds of which are then assumed
to have been used to repurchase outstanding common stock using the treasury
stock method, and the conversion of convertible notes into Common Stock. As a
result, options and warrants to purchase 1,638,825 and 1,903,730 shares of
Common Stock and convertible notes convertible into 93,196 and 78,910 shares of
Common Stock outstanding during the year ended December 31, 1997 and the three
months ended March 31, 1998, respectively, were excluded from the calculation of
diluted net loss per common share.
 
  Pro Forma Net Loss Per Common Share (unaudited)
 
     The pro forma basic and diluted net loss per common share is computed based
upon the weighted average number of common shares outstanding in accordance with
SFAS No. 128. In addition, all outstanding shares of convertible preferred
stock, which convert to Common Stock upon the closing of an initial public
offering of Common Stock at a price of at least $15.75 per share and having
aggregate proceeds of at least $15,000,000, are treated as if converted to
Common Stock (see Note 13).
 
  Comprehensive Income (Loss)
 
     The Company has adopted SFAS No. 130, 'Reporting Comprehensive Income,'
which establishes standards for the reporting and display of comprehensive
income and its components in general purpose financial statements for the year
ended December 31, 1998 and interim periods. The table below sets forth
'Comprehensive income (loss)' as defined by SFAS No. 130 (in thousands):
 

<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER     THREE MONTHS
                                                                MARCH 17 TO            31,            ENDED MARCH 31,
                                                                DECEMBER 31,   -------------------   -----------------
                                                                    1995         1996       1997      1997      1998
                                                                ------------   --------   --------   -------   -------
<S>                                                             <C>            <C>        <C>        <C>       <C>
Net loss......................................................    $ (3,722)    $(25,390)  $(22,075)  $(5,689)  $(3,807)
  Other Comprehensive income (loss), net of tax:
     Foreign currency translation adjustment..................         (37)         180        396        99        74
                                                                ------------   --------   --------   -------   -------
Comprehensive loss............................................    $ (3,759)    $(25,210)  $(21,679)  $(5,590)  $(3,733)
                                                                ------------   --------   --------   -------   -------
                                                                ------------   --------   --------   -------   -------
</TABLE>
 
  New Accounting Pronouncements
 
     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
'Disclosures about Segments of an Enterprise and Related Information.' This
statement supersedes SFAS No. 14, 'Financial Reporting for Segments of a
Business Enterprise.' SFAS No. 131 includes requirements to report selected
segment information quarterly and entity-wide disclosures about products and
services, major customers, and the material countries in which the entity holds
assets and reports revenues. The statement will be effective for annual periods
beginning after December 15, 1997 and the Company will adopt its provisions in
the year ended December 31, 1998. Reclassification for earlier periods is
required, unless impracticable, for comparative purposes. The Company is
currently evaluating the impact this statement will have on its financial
statements; however, because the statement requires only additional disclosure,
the Company does not expect the statement to have a material impact on its
financial position or results of operations.
 
                                      F-10
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
3. ACQUISITIONS:
 
  BIS Strategic Decisions, Inc. and Affiliates
 
     On April 5, 1995, the Company acquired 100% of the stock of BIS for
$200,000 in cash and a $1,000,000 convertible promissory note (see Note 11). BIS
was engaged in compiling and providing data intensive market research to vendors
for use primarily in planning their product operating and marketing programs.
The acquisition was accounted for as a purchase and, accordingly, the cost
(including acquisition costs of $204,000) was assigned to the tangible and
identifiable intangible assets acquired, including a leasehold for one of the

facilities, and liabilities assumed based upon their estimated fair values at
the date of acquisition. As part of the transaction, an intangible asset
(leasehold) of approximately $1,300,000 was recorded representing the fair value
of payments being made through May 1998 by a former owner of BIS. In addition
the Company acquired current assets of approximately $8,700,000 and furniture
and equipment of approximately $2,000,000 offset by current liabilities assumed
of approximately $12,600,000 (of which approximately $9,100,000 were deferred
revenues), a note payable of $192,000 and a tax provision of approximately
$1,000,000. The excess of the purchase price over the net assets acquired of
approximately $3,059,000 was recorded as goodwill. The Company's statements of
operations include the results of operations of BIS from April 5, 1995.
 
  ExperNet
 
     On July 6, 1995, the Company acquired a majority interest in ExperNet in
exchange for (i) 160,000 shares of Series A Preferred Stock (213,333 shares of
Common Stock on an as-converted basis), 80,000 shares (106,667 shares of Common
Stock on an as-converted basis) of which were issued to Mr. Gartner and 80,000
shares (106,667 shares of Common Stock on an as-converted basis) of which were
issued to Mr. Gilmour and (ii) the issuance to Mr. Gartner of an option to
purchase 53,333 shares of Common Stock at an exercise price of $1.50 per share
which vested immediately. On December 29, 1995 the Company acquired Mr.
Gilmour's remaining interest in ExperNet in exchange for a $400,000, 6%
convertible note (the 'Note') due December 31, 2005 (see Note 11). ExperNet is
comprised of a network of external IT practitioners, and the related interactive
software, which respond to specific customer inquiries. In the transaction, the
Company acquired current assets of approximately $148,000 and furniture and
equipment of approximately $126,000, offset by current liabilities assumed of
approximately $96,000 and long-term debt of approximately $386,000. The
acquisition was accounted for as a purchase; accordingly, the excess of the
purchase price over the net assets acquired of approximately $1,408,000 has been
recorded as goodwill. The Company's statements of operations include the results
of operations of ExperNet from July 6, 1995.
 
4. RELATED PARTIES:
 
     During the period from March 17, 1995 to December 31, 1995, the Company
reimbursed Mr. Gartner $186,000 for disbursements made by him for items related
to the acquisition of BIS and for other operational expenses prior to the
incorporation of the Company.
 
     In addition, following the initial closing of the sale of Series B
Convertible Preferred Stock by the Company in November 1995, ExperNet repaid a
loan in the principal amount of approximately $221,000 plus accrued interest at
a rate of 10%, or a total of approximately $248,000, to Mr. Gartner and a loan
in the principal amount of approximately $101,000 plus accrued interest at a
rate of 10%, or a total of approximately $113,000, to Mr. Gilmour.
 
     During 1997, the Company awarded 17,778 shares of Common Stock at a fair 
value of $3.00 per share to Mr. Gartner in lieu of a payment of cash for
services rendered during 1996 as Chief Executive Officer. The Company recorded
as compensation expense in 1996 the fair value of the Common Stock awarded to
Mr. Gartner.
 

                                      F-11
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     In connection with the repayment of the note issued to Mr. Gilmour in
conjunction with the ExperNet acquisition (see Note 11), the Company received a
7.5% equity interest in a company newly formed by Mr. Gilmour and a
royalty-free, irrevocable license to use any software, products and technologies
the new company will develop during a three year period commencing on February
1, 1998.
 
     Certain of the Company's existing investors have represented that they
will, to the extent necessary, fund the Company through May 1999 on terms to be
mutually agreed upon.
 
5. PREPAID EXPENSES AND OTHER CURRENT ASSETS:
 
     Prepaid expenses and other current assets consist of the following (in
thousands):
 
<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                                            ----------------    MARCH 31,
                                                                             1996      1997       1998
                                                                            ------    ------    ---------
<S>                                                                         <C>       <C>       <C>
Prepaid compensation.....................................................   $1,126    $2,559     $ 2,422
Other....................................................................      627     1,194       1,243
                                                                            ------    ------    ---------
  Total..................................................................   $1,753    $3,753     $ 3,665
                                                                            ------    ------    ---------
                                                                            ------    ------    ---------
</TABLE>
 
6. PROPERTY AND EQUIPMENT
 
     Property and equipment at cost, less accumulated depreciation and
amortization, consist of the following (in thousands):
 

<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                                            ----------------    MARCH 31,
                                                                             1996      1997       1998
                                                                            ------    ------    ---------
<S>                                                                         <C>       <C>       <C>
Computer and related equipment...........................................   $2,849    $3,202     $ 3,463
Furniture and fixtures...................................................      781       827         771
Motor vehicles...........................................................      108        27           1
Leasehold improvements...................................................      119       119         119
                                                                            ------    ------    ---------
                                                                             3,857     4,175       4,354
Less accumulated depreciation and amortization...........................    1,460     2,480       2,676
                                                                            ------    ------    ---------
Property and equipment, net..............................................   $2,397    $1,695     $ 1,678
                                                                            ------    ------    ---------
                                                                            ------    ------    ---------
</TABLE>
 
     Depreciation and amortization expense was $525,000, $1,020,000, $1,190,000,
$319,000 and $278,000 for the period March 17, 1995 to December 31, 1995, the
years ended December 31, 1996 and 1997, and the three months ended March 31,
1997 and 1998, respectively.
 
                                      F-12
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
7. LEASE COMMITMENTS
 
     The Company leases certain office space and equipment under operating lease
agreements. Future minimum rental commitments under all operating leases with
remaining noncancelable terms of one year or more are as follows (in thousands):
 

<TABLE>
<CAPTION>
                                                                                      OPERATING
                                                                                       LEASES
                                                                                      ---------
<S>                                                                                   <C>
April 1 through December 31, 1998..................................................    $   685
1999...............................................................................        910
2000...............................................................................        590
2001...............................................................................        137
2002...............................................................................         80
Thereafter.........................................................................         39
                                                                                      ---------
  Total............................................................................    $ 2,441
                                                                                      ---------
                                                                                      ---------
</TABLE>
 
     Rent expense, net of sublease income of approximately $60,000, $78,000,
$54,000, $11,000 and $6,000 was $482,000, $701,000, $725,000, $232,000 and
$189,000 for the period March 17, 1995 to December 31, 1995, the years ended
December 31, 1996 and 1997, and the three months ended March 31, 1997 and 1998,
respectively.
 
     An agreement was entered into by and among the Company and two prior owners
of BIS providing for one of the prior owners, who had guaranteed all payments
under a lease, to pay an aggregate of $1,500,000 to the landlord for rent under
the lease, payable monthly in an amount of $36,722. The guaranteed payments end
at May 30, 1998.
 
8. INCOME TAXES:
 
     The Company has deferred tax assets of approximately $11,148,000,
$20,216,000 and $21,862,000 at December 31, 1996 and 1997 and March 31, 1998,
respectively. For financial reporting purposes, valuation allowances of
$11,148,000, $20,216,000 and $21,862,000, respectively, have been recognized to
offset these deferred tax assets until the Company can conclude that it is more
likely than not that these deferred tax assets will be realized. During the
years ended December 31, 1996 and 1997, and the three months ended March 31,
1998, the valuation allowance increased by approximately $8,529,000, $9,068,000
and $1,646,000, respectively.
 
     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the corresponding amounts used for income tax purposes. Significant
components of the Company's deferred tax assets and liabilities are as follows
(in thousands):
 

<TABLE>
<CAPTION>
                                                                            DECEMBER 31,
                                                                         ------------------    MARCH 31,
                                                                          1996       1997        1998
                                                                         -------    -------    ---------
<S>                                                                      <C>        <C>        <C>
Deferred tax assets:
  Deferred revenue....................................................   $   742
  Net operating loss carryforwards....................................     9,112    $19,119     $20,604
  Discontinued operations.............................................       474         24          --
  Other--net..........................................................       820      1,073       1,258
                                                                         -------    -------    ---------
     Total deferred tax assets........................................    11,148     20,216      21,862
Valuation allowance for deferred tax assets...........................    11,148     20,216      21,862
                                                                         -------    -------    ---------
Net deferred tax assets...............................................        --         --          --
                                                                         -------    -------    ---------
                                                                         -------    -------    ---------
</TABLE>
 
                                      F-13
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     For financial reporting purposes, income before income taxes includes the
following components (in thousands):
 
<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER     THREE MONTHS ENDED
                                               MARCH 17 TO             31,                 MARCH 31,
                                               DECEMBER 31,    --------------------    ------------------
                                                   1995          1996        1997       1997       1998
                                               ------------    --------    --------    -------    -------
<S>                                            <C>             <C>         <C>         <C>        <C>
Pretax loss for continuing operations:
  United States.............................     $ (5,068)     $(20,688)   $(21,006)   $(5,120)   $(3,005)
  Non-United States.........................       (1,391)       (2,505)     (2,765)      (562)      (798)
                                               ------------    --------    --------    -------    -------
Consolidated................................     $ (6,459)     $(23,193)   $(23,771)   $(5,682)   $(3,803)
                                               ------------    --------    --------    -------    -------
                                               ------------    --------    --------    -------    -------
</TABLE>
 
     The income tax expense(benefit) of the loss from continuing operations,
substantially all of which is deferred, consists of the following components (in
thousands):
 

<TABLE>
<CAPTION>
                                                                        YEAR ENDED         
                                                      MARCH 17 TO      DECEMBER 31,        THREE MONTHS ENDED MARCH 31,
                                                      DECEMBER 31,    --------------    ----------------------------------
                                                          1995        1996     1997          1997               1998
                                                      ------------    -----    -----    ---------------    ---------------
<S>                                                   <C>             <C>      <C>      <C>                <C>
U.S. Federal.......................................     $   (754)     $(239)   $(554)         $ 7                $ 4
Foreign............................................         (339)      (252)     (87)          --                 --
                                                                                               --                 --
                                                      ------------    -----    -----
                                                        $ (1,093)     $(491)   $(641)         $ 7                $ 4
                                                                                               --                 --
                                                                                               --                 --
                                                      ------------    -----    -----
                                                      ------------    -----    -----
</TABLE>
 
     The income tax benefit of the loss from continuing operations differs from
the amount of income tax benefit determined by applying the applicable U.S.
statutory income tax rate to pretax loss from continuing operations as a result
of the following differences:
 
<TABLE>
<CAPTION>
                                                                         YEAR ENDED           THREE MONTHS
                                                      MARCH 17 TO       DECEMBER 31,        ENDED MARCH 31,
                                                      DECEMBER 31,    ----------------      ----------------
                                                          1995        1996       1997       1997       1998
                                                      ------------    -----      -----      -----      -----
<S>                                                   <C>             <C>        <C>        <C>        <C>
Income tax at the statutory rate...................       (34.0)%     (34.0)%    (34.0)%    (34.0)%    (34.0)%
Foreign subsidiary losses with no benefit
  recognized.......................................         3.5         1.7        4.0        3.4        7.1
Foreign income taxed at different rates............        (1.4)        0.9        0.4       (0.2)      (0.4)
Nondeductible goodwill.............................         3.1         1.4        1.7         --         --
U.S. losses with no benefit recognized.............        12.3        27.8       24.9       30.5       26.9
Other items (net)..................................        (0.4)        0.1        0.3        0.4        0.5
                                                      ------------    -----      -----      -----      -----
                                                          (16.9)%      (2.1)%     (2.7)%      0.1%       0.1%
                                                      ------------    -----      -----      -----      -----
                                                      ------------    -----      -----      -----      -----
</TABLE>
 
     The Company has available net operating loss carryforwards of approximately
$47,988,000 and $51,791,000 at December 31, 1997 and March 31, 1998 which may be
used to reduce future taxable income. Of this amount, at December 31, 1997 U.S.
carryforwards of approximately $43,081,000 expire in various years through 2012,
certain non-U.S. carryforwards of approximately $2,367,000 expire in various
years through 2002 and the balance may be carried forward indefinitely. If
losses of acquired companies are used to reduce future taxable income,
associated tax benefits will first reduce acquired goodwill and other noncurrent
intangible assets before being recognized as a reduction of income tax expense

in the period the benefits are realized. Utilization of the net operating loss
carryforwards may be limited pursuant to the provisions of Section 382 of the
Internal Revenue Code of 1986, as amended.
 
                                      F-14
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
9. JOINT VENTURE AGREEMENT:
 
     In 1991, BIS entered into a joint venture agreement with a Japanese company
(the 'Joint Venture') to provide additional market penetration in Japan for the
Company's products and services. BIS's initial equity ownership was 40%.
Pursuant to the terms of the agreement, the Company was required to purchase an
additional 10% interest in the Joint Venture from its partner in March 1996 for
approximately $85,000. In April 1996, the Company and its partner each increased
their investment in the joint venture by approximately $24,000. In December
1996, the Company notified its partner, pursuant to the terms of the agreement,
of its desire to dissolve the Joint Venture. The Company does not expect any
proceeds from the dissolution and, as such, wrote off to expense its investment
of approximately $125,000. The net earnings of the joint venture to date have
been de minimis. At December 31, 1996 and 1997 and March 31, 1998 the Company
had accounts receivable due from the Joint Venture of $125,000, $0 and $0,
respectively.
 
10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES:
 
     Accrued expenses and other current liabilities consist of the following (in
thousands):
 
<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                                            ----------------    MARCH 31,
                                                                             1996      1997       1998
                                                                            ------    ------    ---------
<S>                                                                         <C>       <C>       <C>
Accrued compensation and benefits........................................   $1,675    $2,260     $ 1,101
Sales tax payable........................................................    1,110     1,198       1,026
Other....................................................................    2,772     2,927       2,906
                                                                            ------    ------    ---------
  Total..................................................................   $5,557    $6,385     $ 5,033
                                                                            ------    ------    ---------
                                                                            ------    ------    ---------
</TABLE>
 
11. BORROWINGS AND LONG-TERM DEBT:
 
     In connection with the Company's acquisition of BIS, the seller received a

$1,000,000, 5% convertible note due April 5, 1998. The note was convertible into
185,298 shares of Common Stock. The note plus accrued interest was fully repaid
on April 17, 1998.
 
     In connection with the Company's acquisition of ExperNet, the Company
issued a $400,000, 6% convertible note to Mr. Gilmour (see also Note 3). The
note plus accrued interest was repaid in two installments, the last of which was
in April 1998.
 
     In June 1997, the Company entered into a loan agreement with a lending
institution collateralized by certain equipment, machinery and fixtures. Under
this agreement the Company received a $1,465,000 loan due in June 2000 with an
effective interest rate of 17.133%. Principal payments required on this loan in
the years 1998 through 2000 are $389,000, $461,000 and $444,000.
 
     The weighted average interest rates of outstanding short-term borrowings
were 7.3%, 6.9%, 7.1%, 0% and 8.1% for the period March 17, 1995 to December 31,
1995, the years ended December 31, 1996 and 1997 and the three months ended
March 31, 1997 and 1998, respectively.
 
12. COMMITMENTS AND CONTINGENT LIABILITIES:
 
     In October 1997, the Company entered into an invoice factoring arrangement
with a commercial bank under which the Company could borrow up to $1,250,000.
Under the arrangement, the bank charges an administrative fee of 0.5% of each
factored invoice and a monthly factoring management fee of 1.25% of the gross
average monthly factored invoices. Borrowings under the arrangement are
collateralized by all the Company's assets. Upon the initial utilization of the
factoring arrangement, the bank will receive warrants equal to the value of
$125,000 for a class of stock to be determined and at a price to be determined.
As of March 31, 1998, no invoices have been factored under the arrangement.
 
                                      F-15
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
13. PREFERRED STOCK:
 
     The authorized capital stock of the Company includes 16,500,000 shares of
Preferred Stock. Of the Preferred Stock, 650,000, 9,000,000 and 4,500,000 shares
have been designated as Series A, Series B and Series C Convertible Preferred
Stock. The remaining 2,350,000 shares of Preferred Stock have not been
designated.
 
  Series A Convertible Preferred Stock ('Series A')
 
     During 1995, the Company issued 410,000 shares of Series A (546,667 shares
on an as-converted basis) for consideration of $2,050,000 which consisted of
$2,025,000 cash and a $25,000 non-recourse note from an employee in connection

with his acceptance of employment with the Company. In addition, 160,000 shares
of Series A (213,333 shares on an as-converted basis) were issued in connection
with the acquisition of ExperNet as described in Note 3.
 
  Series B Convertible Preferred Stock ('Series B')
 
     During 1995, the Company issued 4,026,772 shares of Series B for cash
consideration of $13,216,000, net of issuance costs of $878,000. In addition,
bridge financing in the principal amount of $2,000,000 was automatically
converted into 571,428 shares of Series B at the first closing of the Series B
Stock financing in November 1995. During 1996 the Company issued an additional
3,327,728 shares of Series B, in two separate financings, for cash consideration
of $11,550,000, net of issuance costs of $97,000. In addition, a warrant issued
to the lender in connection with the Series B bridge financing in August 1995
was exercised on a cashless basis for 218,714 shares in September 1996 (see Note
15).
 
  Series C Convertible Preferred Stock ('Series C')
 
     During 1997, the Company issued 2,609,491 shares of Series C, in two
separate financings, for cash consideration of $10,537,000, net of issuance
costs of $188,000.
 
     In connection with this issuance the Company issued warrants to purchase-up
to 1,409,129 shares of Series C at an exercise price of $4.50 per share (see
Note 15).
 
  Conversion
 
     Each share of Series A, Series B and Series C is convertible, at the
holder's option, into that number of shares of Common Stock as is determined by
dividing the initial purchase price of such shares by the conversion price in
effect at the time of conversion. The conversion price of each share of Series
A, Series B and Series C is subject to adjustment upon the occurrence of certain
events. At March 31, 1998 each share of Series A, Series B and Series C is
convertible into four-thirds (4/3), one-third (1/3) and 0.39143 shares of Common
Stock, respectively.
 
     The Series A, Series B and Series C Shares will automatically convert into
Common Stock at the then effective conversion price upon the closing of a firmly
underwritten public offering of Common Stock at a price of at least $15.75 per
share (as adjusted for splits, combinations and share dividends), and generating
gross proceeds of at least $15,000,000. In addition, the Series A, Series B and
Series C Shares will convert into Common Stock at the then effective conversion
price upon the consent of the holders of at least two-thirds (2/3) of the then
outstanding Series A, Series B and Series C Shares.
 
  Liquidation
 
     Upon (i) the liquidation, dissolution, or winding up of the Company (either
voluntary or involuntary) or (ii) the merger or consolidation of the Company
with another corporation or the sale or other transfer of all or substantially
all of the assets of the Company which is not agreed to by the holders of not
less than a majority of

 
                                      F-16
<PAGE>


                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
the Convertible Preferred Stock, voting together as a single class, and in which
the stockholders of the Company immediately prior to such transaction do not own
more than a 50% interest in the surviving entity, (i) holders of the Series A,
Series B and Series C Shares are entitled to receive out of the assets of the
Company available for distribution to its stockholders, an amount equal to
$5.00, $3.50 and $4.11 per share, respectively, plus any declared but unpaid
dividends, prior to any distribution to the holders of the Company's Common
Stock. Following distribution of such preferential amounts, holders of Series A,
Series B and Series C Shares shall not participate in any further distribution.
 
  Voting
 
     Except as provided by law or in the Company's Amended and Restated
Certificate of Incorporation, the holders of the Series A, Series B and Series C
Shares vote with holders of the Company's Common Stock on an as converted basis
and not as a separate class or series. In addition, so long as at least
1,000,000 shares of Series A, Series B and Series C Shares are outstanding, the
Company may not, without the approval of at least a majority of the outstanding
shares of the Series A, Series B and Series C Shares, take certain actions as
described in the Certificate of Incorporation.
 
14. COMMON STOCK:
 
     In November 1995, the Company amended its Certificate of Incorporation to
increase the authorized number of shares of Common Stock from 10,000,000 to
28,000,000. In December 1996, the Company amended its Certificate of
Incorporation to increase the authorized number of Common Stock from 28,000,000
to 50,000,000. 
 
     During March 1995, the Company sold to Mr. Gartner 1,400,000 shares of
Common Stock at a purchase price of $0.07125 per share. During the remainder of
1995, the Company sold 636,000 shares of Common Stock to employees, consultants
and directors at a purchase price of $1.50 per share.
 
15. STOCK OPTIONS AND WARRANTS:
 
  Stock Options
 
     In June 1995, the Company adopted the 1995 Stock Plan (the 'Prior Stock
Plan'). The Prior Stock Plan was superseded in October 1995 by the 1995 Stock
Option/Stock Issuance Plan (the '1995 Stock Plan'). On August 28, 1996 the Board
of Directors adopted the 1996 Stock Option Plan (the '1996 Stock Plan') to
effectively supersede the 1995 Stock Plan. The 1995 Stock Plan provided for the
granting of options to purchase and for direct purchases of up to 1,033,333

shares of Common Stock. The 1996 Stock Plan provides for the granting of options
to purchase up to 1,000,000 shares of Common Stock.
 
     Both the 1995 Stock Plan and the 1996 Stock Plan provide for the grants of
non-qualified and incentive options to purchase shares of the Company's Common
Stock to employees (including officers and directors who are employed by the
Company) of, and consultants to, the Company generally at the fair market value
determined by the Board on the date of the grant. The 1995 Stock Plan also
provided for direct purchases of Common Stock. The Board may determine the date
on which these shares vest and become exercisable. Shares purchased as the
result of the exercise of these options or direct purchases under the 1995 Stock
Plan are subject to the Company's right to repurchase such shares upon the
occurrence of certain events and at a price equal to the fair market value as
defined on the date of repurchase.
 
     Options granted under the 1995 and 1996 stock plans have variable vesting
periods. No options granted under these plans have a term in excess of 10 years
after the date of grant.
 
                                      F-17
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     In March, 1998 the Board voted to grant 1,007,500 options to certain
employees at exercise prices ranging from $3.00 to $3.30 per share. The
estimated fair market value of the Company's Common Stock at the date of grant
was determined to be $6.75 per share. Accordingly, such grants were deemed to be
compensatory options in accordance with Accounting Principles Board Opinion No.
25, "Accounting for Stock issued to employees" ('APB No. 25'). Total
option-related compensation expense for the three months ended March 31, 1998
was immaterial.
 
     In June 1997, the Company adopted the 1997 Director Stock Option Plan (the
'Director Plan') which provides for the granting of non-qualifying stock options
to purchase-up to 50,000 shares of common stock. Under the Director Plan,
non-employee directors are entitled to receive options to purchase 2,000 shares
of common stock on July 1 of each year commencing in 1997. In addition, each
eligible non-employee director would receive an option to purchase 2,000 shares
of common stock upon the initial election to the Board of Directors. The
exercise price of the options, which vest in four equal installments starting
from the date of the grant, will equal the fair market value on the date of the
grant. Each option shall expire 10 years after the date of the grant.
 

     A summary of stock option activity through March 31, 1998:
 
<TABLE>
<CAPTION>
                                                                                     WEIGHTED
                                                                                     AVERAGE
                                                                      SHARES      EXERCISE PRICE
                                                                    ----------    --------------
<S>                                                                 <C>           <C>
Outstanding at March 17, 1995
  Granted........................................................    1,023,718        $ 1.50
  Exercised......................................................      (53,332)         1.50
  Forfeited/canceled.............................................      (20,000)         1.50
                                                                    ----------        ------
Outstanding at December 31, 1995.................................      950,386          1.50
  Granted........................................................      444,554          2.07
  Exercised......................................................      (24,794)         1.50
  Forfeited/canceled.............................................     (449,301)         1.61
                                                                    ----------        ------
Outstanding at December 31, 1996.................................      920,845          1.72
  Granted........................................................      517,597          3.00
  Exercised......................................................      (38,035)         1.64
  Forfeited/canceled.............................................     (349,115)         2.29
                                                                    ----------        ------
Outstanding at December 31, 1997.................................    1,051,292          2.17
  Granted........................................................      402,377          3.07
  Exercised......................................................      (37,702)         1.71
  Forfeited/canceled.............................................      (99,770)         2.54
                                                                    ----------        ------
Outstanding at March 31, 1998....................................    1,316,197          2.43
                                                                    ----------        ------
                                                                    ----------        ------
</TABLE>
 
     Options vested and exercisable at December 31, 1996 and 1997 and March 31,
1998 were 151,571, 239,807, and 488,458, respectively.
 
     In July and October 1995 the Company granted options to purchase a total of
260,000 shares of Common Stock other than pursuant to the 1995 Stock Plan at an
exercise price of $1.50 per share.
 
     The Company has adopted the disclosure-only provisions of SFAS No. 123, but
applies APB No. 25 and related Interpretations in accounting for options.
Accordingly, no compensation expense has been recognized for the issuance of
options. Pursuant to the required pro forma disclosure under the fair value
method of estimating compensation cost, the Company has estimated the fair value
of its stock options by applying a present value approach which does not
consider expected volatility of the underlying stock ('minimum value method')
using
 
                                      F-18
<PAGE>

                          GIGA INFORMATION GROUP, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
risk free interest rates based on zero coupon Treasury instruments with
maturities similar to the estimated option term and assuming no dividends.
 
     Had compensation cost for the Company's stock option plans been determined
based on the fair value at the grant date for awards in 1995, 1996 and 1997
consistent with the provisions of SFAS No. 123, the Company's net loss to common
stockholders and net loss per share to common stockholders would have been
increased to the SFAS No. 123 pro forma amounts indicated below in thousands
except per share amounts:
 
<TABLE>
<CAPTION>
                                                                                            THREE MONTHS
                                                                                            ENDED MARCH
                                                                      1996        1997        31, 1998
                                                                    --------    --------    ------------
<S>                                                                 <C>         <C>         <C>
Net loss to common stockholders--as reported.....................   $(25,390)   $(21,817)     $ (3,807)
Net loss to common stockholders--SFAS No. 123
  pro forma......................................................    (25,427)    (21,941)       (3,852)
Net loss per share to common stockholders--as reported...........               $ (10.53)     $  (1.80)
Net loss per share to common stockholders--SFAS No. 123 pro
  forma..........................................................                 (10.59)        (1.82)
</TABLE>
 
     The effects of applying SFAS No. 123 in this pro forma disclosure are not
indicative of the effects on reported net income for future years. SFAS No. 123
does not apply to awards prior to 1996 and additional awards in future years are
anticipated.
 
     The weighted average fair value per share at date of grant for stock
options granted during the years December 31, 1996 and 1997 and the three months
ended March 31, 1998 was $0.22, $0.38 and $0.36, respectively. The fair value of
each option granted during the years ended December 31, 1996 and 1997 is
estimated on the date of grant using the Black-Scholes option pricing model with
a zero expected volatility, a dividend yield of 0%, weighted average expected
lives of 6.3 and 8.0 years, respectively, and weighted average risk free
interest rates of 6.0% and 6.2%, respectively.
 

     The following table summarizes the status of the Company's stock options
outstanding and exercisable at March 31, 1998:
 
<TABLE>
<CAPTION>
                                                                       STOCK OPTIONS
                            STOCK OPTIONS OUTSTANDING                   EXERCISABLE
                   -------------------------------------------     ----------------------
                                                      WEIGHTED                   WEIGHTED
                                 WEIGHTED AVERAGE     AVERAGE                    AVERAGE
   RANGE OF                         REMAINING         EXERCISE                   EXERCISE
EXERCISE PRICES     SHARES       CONTRACTUAL LIFE      PRICE        SHARES        PRICE
---------------    ---------     ----------------     --------     ---------     --------
<S>                <C>           <C>                  <C>          <C>           <C>
$1.50 to $1.80       531,709         5.2 years         $ 1.53        423,039      $ 1.54
$2.70 to $3.30       784,488         9.5 years         $ 2.98         65,419      $ 2.94
                   ---------                                       ---------
  Total            1,316,197                                         488,458
                   ---------                                       ---------
                   ---------                                       ---------
</TABLE>
 
  Warrants
 
     In connection with its engagement of a private placement agent for the sale
by the Company of the Series B Preferred Stock, the Company agreed in June 1995
to issue the placement agent a warrant to purchase 107,876 shares of Series B at
an exercise price of $4.625 per share. In connection with the Series B bridge
financing, the Company agreed in August 1995 to issue the lender a warrant to
purchase 285,714 shares of Series B at an exercise price of $2.345 per share,
which warrant was exercised on a cashless basis in September 1996 for 218,714
shares. Both of these warrants are for a term of five years, subject to earlier
expiration upon the occurrence of certain events. The Company believes the fair
market value of each warrant was nominal.
 
                                      F-19
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     In connection with the issuance of Series C, the Company issued warrants to
purchase up to 1,409,179 shares of Series C at an exercise price of $4.50 per
share. These warrants are for a term of five years, subject to earlier
expiration upon the occurrence of certain events.
 
16. STOCK PURCHASE PLANS/AGREEMENTS:
 
     In the period from inception to December 31, 1995, the Company sold 139,999
shares of Common Stock to certain employees of the Company at $1.50 per share
under the provisions of the 1995 Stock Plan or separate stock purchase

agreements. Employees vest in these shares over four years from their respective
dates of purchase, with 25% vesting on the first anniversary of the purchase and
pro rata thereafter over the remaining 36 months. If an employee who purchased
stock under either the 1995 Stock Plan or separate agreements ceases to be
employed by the Company, the Company at its option may elect to repurchase the
employee's unvested shares at the original cost paid by the employee for such
stock and vested shares at a price equal to the fair market value as determined
on the date of repurchase.
 
     In October 1995, the Company sold 40,000 shares of Common Stock to a
director who also serves as a consultant to the Company for $1.50 per share of
which $10,000 was paid in cash and $50,000 was paid in the form of a nonrecourse
interest bearing note due March 31, 1996. In June 1996, the Company canceled the
promissory note plus interest accrued thereunder (totaling approximately
$52,000), in lieu of payment to the director for services rendered to the
Company in 1995 (for which the director was entitled to receive $25,000) and the
first six months of 1996 (for which the director was entitled to receive
$30,000) plus interest. These shares are also subject to certain repurchase
rights by the Company in the event that the director ceases to be either a
director of, or consultant to, the Company.
 
     Pursuant to an agreement entered into in February 1997, the Company issued
to a director of the Company for services rendered 16,667 shares of Common Stock
which vest over six quarterly periods contingent upon services being provided
during the period. The Company recorded as compensation expense $50,000
representing the fair value of the Common Stock over the period during which the
services are rendered. Under the agreement, the Company also granted to the
director 8,333 non-qualified stock options with an exercise price at the fair
market value on the date of grant which vest over four years. In addition, the
Company reimbursed him $18,000 for operational expenses.
 
17. EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS:
 
     In the United States, the Company maintains a Savings and Retirement Plan
(the '401 (k) Plan') under Section 401 of the Internal Revenue Code. In 1997,
the Company amended its 401(k) Plan specifying that employees can enter the plan
on the date of hire or the first day of the month. Employees must have attained
the age of 21. In prior years, employees were eligible to participate in the
401(k) Plan who worked a minimum of one year and had attained the age of 21. The
Company matched by 25% that portion representing the first 3% of an employee's
base salary and by 50% that portion representing the next 3% of an employee's
base salary. Effective in 1997, the employer contributions are discretionary
after considering business results at the conclusion of each plan year. The
Company has made mandatory contributions to the 401(k) Plan of $47,000 and
$63,000 during the period March 17 to December 31, 1995 and the year ended
December 31, 1996, respectively, and made no discretionary contributions during
the year ended December 31, 1997 and the three months ended March 31, 1997 and
1998.
 
     In the United Kingdom, the Company maintains a defined contribution plan.
All permanent employees who have attained the age of 20, and are not
contributing to a personal pension plan, are eligible to participate. The
Company matches a percentage of employee contributions which are invested at
each participant's discretion in a choice of three funds. The employer matching

percentage is determined within defined age ranges. During the period March 17
to December 31, 1995, the years ended December 31, 1996 and 1997, and the three
months
 
                                      F-20
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
ended March 31, 1997 and 1998, the Company's match totaled $2,000, $2,000,
$2,000, $500 and $500, respectively.
 
18. DISCONTINUED OPERATIONS:
 
     On June 25, 1996, the Company announced the discontinuation of the BIS
market research business. In connection with the discontinuance of such
operations, the Company terminated the personnel employed in developing and
compiling the data-intensive BIS market research products, ceased operations at
two of its licensed facilities in England and entered into contracts with two
independent IT service providers engaged to fulfill the Company's obligations to
customers of BIS under certain existing subscription agreements, all of which
expired by June 1997. The contracts with the service providers required that
Giga pay a percentage of the remaining contract value in exchange for their
fulfillment of Giga's obligations. In 1996, a total of approximately $623,000
was paid to the service providers to fulfill the obligations remaining under the
discontinued operations. A provision of approximately $1,187,000 was established
for probable refunds in connection with dissatisfied clients. At December 31,
1996 a total of approximately $720,000 remained in the provision for refunds.
The contracts with the providers also require the service providers to pay
royalties to Giga upon the renewal of contracts by them. Through December 31,
1997, no royalties had been earned or received. The results of these operations
prior to June 25, 1996 have been classified as discontinued operations and prior
year financial statements have been restated to reflect the discontinuance. A
charge of approximately $2,315,000 (net of taxes of approximately $158,000) was
recorded in 1996 for the loss on disposition of the operations consisting
primarily of rent and compensation. Included within the charge was a provision
related to the operations at two facilities in England which, based on the
market for subleased properties at the time, approximates the present value of
the expected expenses of these facilities for two and one-half years plus fifty
percent of the expected expenses over the remaining life of the leases and a
provision for the severance benefits payable to the terminated employees.
 
     A gain of approximately $1,101,000 was recorded in 1997, mainly comprised
of a reversal of the provision for future lease commitments and related expenses
for two facilities in England and the provision which was established for
refunds to dissatisfied customers.
 
     The net liabilities of the discontinued operations of the BIS business have
been segregated in the consolidated balance sheets and as of December 31, 1996
consist primarily of accounts receivable ($404,000), amounts payable related to
rent and facilities expenses ($2,245,000), customer refunds ($720,000),

liability to providers ($206,000) and salaries and related severance costs
($56,000). The operating results of the BIS business are summarized as follows
(in thousands):
 
<TABLE>
<CAPTION>
                                                               MARCH 17, TO
                                                               DECEMBER 31,       YEAR ENDED
                                                                   1995        DECEMBER 31, 1996
                                                               ------------    -----------------
<S>                                                            <C>             <C>
Revenues....................................................     $ 11,329           $ 3,557
Pre-tax income..............................................        2,987                35
Provision for income taxes..................................        1,497               114
Net income (loss)...........................................        1,490               (79)
</TABLE>
 
     On December 20, 1996 the Company elected to discontinue its Australian
econometric forecasting business and commenced discussions with the management
team for the purchase of the entire business. A charge of approximately $160,000
was recorded at the time for the loss on disposition of the operations
consisting primarily of estimated losses to be incurred in the operation of the
business through the anticipated disposal date. The entire business was sold in
July 1997 to the management team for AU$407,500, or approximately $293,000 at
the time of sale. A gain of approximately $212,000 was recognized on the
disposition after giving effect to transaction costs.
 
                                      F-21
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     The net assets of the discontinued Australian business have been segregated
in the consolidated balance sheets and as of December 31, 1996 consist primarily
of accounts receivable ($438,000), prepaid expenses ($394,000), property, plant
and equipment, net ($404,000), deferred revenue ($496,000), reserve for loss on
disposal ($162,000) and provision for long-term service ($258,000).
 
     The results of the Australian operations prior to December 20, 1996 have
been classified as discontinued operations and prior year financial statements
have been restated to reflect the discontinuance. The operating results of the
Australian operations are summarized as follows (in thousands):

 
<TABLE>
<CAPTION>
                                                               MARCH 17, TO
                                                               DECEMBER 31,       YEAR ENDED
                                                                   1995        DECEMBER 31, 1996
                                                               ------------    -----------------
<S>                                                            <C>             <C>
Revenues....................................................     $  3,747           $ 4,437
Pre-tax income..............................................          154              (134)
Provision for income taxes..................................           --                --
Net income (loss)...........................................          154              (134)
</TABLE>
 
                                      F-22

<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
19. GEOGRAPHICAL MARKET INFORMATION:
 
     The Company operates in one continuing business segment and in the
geographical markets indicated in the table below. Sales for continuing
operations are reflected in the segment from which the sales are made. The Other
International segment includes France, Italy, Germany and Korea.
 
<TABLE>
<CAPTION>
                                                                     UNITED     UNITED         OTHER
                                                                     STATES     KINGDOM    INTERNATIONAL     TOTAL
                                                                    --------    -------    -------------    --------
                                                                                     (IN THOUSANDS)
<S>                                                                 <C>         <C>        <C>              <C>
March 17, 1995 to December 31, 1995:
  Revenues:
     Total revenues..............................................   $  3,755    $ 2,051        $ 1,270       $  7,076
     Transfers between areas.....................................         --        (55)           (62)          (117)
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $  3,755    $ 1,996        $ 1,208       $  6,959
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $ (5,183)   $  (857)       $  (565)      $ (6,605)
  Total assets...................................................     21,534      2,077          1,222         24,833
January 1, 1996 to December 31, 1996:
  Revenues:
     Total revenues..............................................   $  6,961    $ 2,314        $   948       $ 10,223
     Transfers between areas.....................................         --        (35)           (50)           (85)
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $  6,961    $ 2,279        $   898       $ 10,138
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $(21,073)   $(1,386)       $(1,154)      $(23,613)
  Total assets...................................................     17,928      1,019            732         19,679
January 1, 1997 to December 31, 1997:
  Revenues:
     Total revenues..............................................   $ 17,249    $ 2,014        $   396       $ 19,659
     Transfers between areas.....................................         --         --             --             --
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $ 17,249    $ 2,014        $   396       $ 19,659
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $(21,031)   $(1,064)       $(1,718)      $(23,813)
  Total assets...................................................     20,114      1,690          1,219         23,023

January 1, 1997 to March 31, 1997:
  Revenues:
     Total revenues..............................................   $  3,432    $   506        $    88       $  4,026
     Transfers between areas.....................................         --         --             --             --
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $  3,432    $   506        $    88       $  4,026
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $ (5,193)   $  (168)       $  (401)      $ (5,762)
  Total assets...................................................     13,485      1,189            964         15,638
January 1, 1998 to March 31, 1998:
  Revenues:
     Total revenues..............................................   $  7,852    $   514        $   186       $  8,552
     Transfers between areas.....................................         --         --             --             --
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $  7,852    $   514        $   186       $  8,552
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $ (2,948)   $  (404)       $  (402)      $ (3,754)
  Total assets...................................................     12,353      1,875          1,445         15,673
</TABLE>
 
                                      F-23
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
  Export Sales
 
     The information below summarizes export sales by geographic area for the
United States operations of Giga (in thousands):
 
<TABLE>
<CAPTION>
                                                                                           TOTAL
                                                                                           EXPORT
                                                            EUROPE    FAR EAST    OTHER    SALES
                                                            ------    --------    -----    ------
<S>                                                         <C>       <C>         <C>      <C>
March 17 to December 31, 1995............................    $191       $251      $105     $  547
1996.....................................................     124        101        11        236
1997.....................................................     924         87         8      1,019
January 1 to March 31, 1997..............................     153         41         2        196
January 1 to March 31, 1998..............................     443         11         1        455
</TABLE>
 
20. SUBSEQUENT EVENTS:
 
     In April 1998, the Company designated 2,000,000 shares of Preferred Stock
as Series D Convertible Preferred Stock ('Series D') and, for cash proceeds of

$1,500,000, issued 214,286 shares of Series D and warrants to purchase 115,714
shares of Series D at $9.00 per share. The warrants expire on April 5, 2003.
 
     Each share of Series D is convertible, at the holder's option, into that
number of shares of Common Stock as determined by dividing the original purchase
price by the conversion price in effect at the time of conversion. Each share of
Series D is currently convertible into two-thirds of a share of Common Stock.
 
     The Series D will automatically convert into Common Stock at the then
effective conversion price upon the earlier of (a) the approval by the holders
of at least two-thirds (2/3) of the then outstanding Series D shares, (b)
immediately prior to the closing of a firmly underwritten public offering of
Common Stock at a price of at least $15.75 per share (as adjusted for splits,
combinations and share dividends), and having aggregate cash proceeds of at
least $15,000,000 and (c) immediately prior to the closing of a firmly
underwritten public offering of Common Stock at a price of at least $12.00 per
share and having aggregate cash proceeds of at least $30,000,000 and which
closes on or prior to January 31, 1999.
 
     In the event of liquidation, dissolution or winding up of the Company
(either voluntary or involuntary) or the merger or consolidation of the Company
with another corporation or the sale or transfer of all or substantially all of
the assets of the Company which is not agreed to by the holders of not less than
a majority of the Preferred Stock, voting together as a single class, and in
which the stockholders of the Company immediately prior to the such transaction
do not own more than 50% interest in the surviving entity, holders of Series D
will be entitled to receive out of the assets of the Company, prior and in
preference to any distribution of any of the assets of the Company to the
holders of Common Stock, but after payment of any liquidation preference which
may be provided for any other series of Preferred Stock, the original purchase
price for each outstanding share of Series D held (as adjusted for splits and
combinations), plus all declared and unpaid dividends prior to any distribution
to the holders of the Company's Common Stock. Following distribution of such
preferential amounts, holders of Series D shall not participate in any further
distribution.
 
     Except as provided by law or in the Company's Amended and Restated
Certificate of Incorporation, the holders of Series D vote with the holders of
the Company's Common Stock on an as converted basis. In addition, as described
in the Certificate of Incorporation, the company may not take certain actions as
long as at least 1,000,000 shares of Series A, Series B, Series C and Series D
are outstanding, and without the approval of the holders of at least a majority
of the outstanding shares of Series A, Series B, Series C and Series D generally
voting together as a class.
 
     Also in April 1998, the Company entered into a Loan and Warrant Purchase
Agreement whereby the Company issued convertible promissory notes with a face
value of $10,000,000 and warrants to purchase up-to
 
                                      F-24
<PAGE>

                          GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
166,667 shares of Common Stock in exchange for cash proceeds of $10,000,000. The
notes bear interest at an annual interest rate of 12% payable in quarterly
installments and are convertible into 952,381 shares of Common Stock. The
warrants are exercisable at $3.00 per share for a period of ten years from the
date of the grant. The fair market value of the warrants was recorded as a
discount of $1,046,907 to the Notes and such Notes will be recorded at
$8,953,093. Accordingly, approximately $1,046,907 of accretion will be charged
to interest expense, in addition to the stated interest rates, over the term of
the notes.
 
     The outstanding principal amount of the notes and warrants will be
automatically converted on February 1, 1999 into 1,428,571 shares of Series D
with warrants to purchase up to a maximum of 514,285 shares of Common Stock at
an exercise price of $13.50 per share unless the Company completes prior to that
date a public offering of Common Stock generating proceeds of at least
$30,000,000 at an offering price of at least $12.00 per share.
 
     In May 1998, the Company issued an additional 71,429 shares of Series D and
warrants to purchase 30,572 shares of Series D for consideration of $500,000.
 
     In May 1998, pursuant to a vote of the board of directors, the Company
effected a 1 for 3 reverse stock split of the Common Stock. All share and per
share data presented herein have been restated to reflect the Common Stock
split.
 
                                      F-25

<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
of Giga Information Group, Inc.:
 
We have audited the accompanying combined statements of operations and cash
flows of BIS Strategic Decisions for the period from January 1, 1995 to April 5,
1995. These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
 
We conducted our audit 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 audit provides a reasonable basis for our opinion.
 
As discussed in Note 1 to the combined financial statements, BIS Strategic
Decisions was acquired by Giga Information Group, Inc. on April 5, 1995 and has
been operated by the management of Giga since that date. The transaction
involved the payment of $200,000 cash and a convertible note in the principal
amount of $1,000,000 for all the outstanding shares of BIS Strategic Decisions.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined results of BIS Strategic Decisions'
operations and its cash flows for the period from January 1, 1995 to April 5,
1995 in conformity with generally accepted accounting principles.
 
Boston, Massachusetts
April 17, 1998
 
                                      F-26

<PAGE>
                            BIS STRATEGIC DECISIONS
                       COMBINED STATEMENTS OF OPERATIONS
                 FOR THE PERIOD FROM JANUARY 1 TO APRIL 5, 1995
                                 (IN THOUSANDS)
<TABLE>
<S>                                                                                                        <C>
Information service revenues.............................................................................  $   2,116
 
Cost and expenses:
 
  Cost of services and product development...............................................................      1,422
 
  Sales and marketing....................................................................................        167
 
  General and administrative.............................................................................      1,047
 
  Depreciation and amortization..........................................................................        215
                                                                                                           ---------
 
          Total costs and expenses.......................................................................      2,851
                                                                                                           ---------
 
Operating loss...........................................................................................       (735)
 
Interest income, net.....................................................................................         19
                                                                                                           ---------
 
          Loss from continuing operations before income taxes............................................       (716)
                                                                                                           ---------
 
Income tax benefit.......................................................................................       (213)
                                                                                                           ---------
 
          Loss from continuing operations................................................................       (503)
                                                                                                           ---------
 
Discontinued operations:
 
  Income from the discontinued BIS market research business, net of tax effect...........................        597
 
  Income from the discontinued Shrapnel business, net of tax effect......................................         54
                                                                                                           ---------
 
          Income from discontinued operations............................................................        651
                                                                                                           ---------
 
          Net income.....................................................................................  $     148
                                                                                                           ---------
                                                                                                           ---------
</TABLE>
 
     The accompanying notes are an integral part of the combined financial
                                  statements.

 
                                      F-27
<PAGE>

                            BIS STRATEGIC DECISIONS
                       COMBINED STATEMENTS OF CASH FLOWS
                   FOR THE PERIOD JANUARY 1 TO APRIL 5, 1995
                                 (IN THOUSANDS)
 
<TABLE>
<S>                                                                                                        <C>
Cash flows from operating activities:
  Net income.............................................................................................  $     148
     Adjustments to reconcile net income to net cash used in continuing operating activities:
       Net income from discontinued operations...........................................................       (651)
       Depreciation......................................................................................        191
       Amortization and write-down of goodwill...........................................................         24
       Provision for deferred income taxes...............................................................         58
       Allowance for doubtful accounts...................................................................          7
     Changes in certain operating assets and liabilities:
       Increase in accounts receivable...................................................................       (383)
       Decrease in unbilled services.....................................................................        183
       Increase in prepaid expenses and other current assets.............................................       (310)
       Decrease in accounts payable and accrued expenses.................................................       (531)
       Increase in deferred revenue......................................................................        370
                                                                                                           ---------
 
Net cash provided by (used in) operating activities of:
  Continuing operations..................................................................................       (894)
  Discontinued operations................................................................................        681
                                                                                                           ---------
Net cash used in operating activities....................................................................       (213)
 
Cash flows from investing activities:
  Purchase of fixed assets...............................................................................        (83)
  Proceeds from sale of equipment........................................................................         32
                                                                                                           ---------
Net cash used in investing activities....................................................................        (51)
 
Cash flows from financing activities:
  Proceeds from borrowings...............................................................................         22
  Principal payments on borrowings.......................................................................       (157)
  Principal payments on capital lease obligations........................................................        (19)
                                                                                                           ---------
Net cash used in financing activities....................................................................       (154)
 

Effect of exchange rate changes on cash..................................................................        219
                                                                                                           ---------
Net decrease in cash and cash equivalents................................................................       (199)
Cash and cash equivalents at beginning of period.........................................................      1,809
                                                                                                           ---------
Cash and cash equivalents at end of period...............................................................  $   1,610
                                                                                                           ---------
                                                                                                           ---------
Supplemental cash flow information:
  Income taxes paid......................................................................................  $       7
  Interest paid..........................................................................................  $       2
</TABLE>
 
     The accompanying notes are an integral part of the combined financial
                                  statements.
 
                                      F-28

<PAGE>

                            BIS STRATEGIC DECISIONS
                     NOTES TO COMBINED FINANCIAL STATEMENTS
 
1. BACKGROUND:
 
     BIS Strategic Decision, Inc. and its five foreign affiliates (collectively
'BIS Strategic Decisions' or 'BIS') were wholly-owned subsidiaries of Friday
Holdings, L.P. ('FHLP'). On April 5, 1995, Giga Information Group, Inc. ('Giga')
acquired 100% of the common stock outstanding of each of the BIS companies from
FHLP for $200,000 in cash and a $1,000,000 convertible promissory note. The
acquisition of BIS by Giga was accounted for as a purchase. As part of the
transaction, a $1,300,000 intangible asset was recorded representing the fair
value of payments being made on a property lease through May 1998 by a former
owner of BIS.
 
     On June 25, 1996, Giga elected to discontinue the BIS market research
business. In connection with the discontinuance of such operations, Giga
terminated the personnel employed in developing and compiling the BIS market
research products, ceased operations at two of the licensed facilities in
England and entered into contracts with two independent IT service providers
engaged to fulfill Giga's obligations to customers of BIS under certain existing
subscription agreements, all of which expired on or before June 1997.
 
     On December 20, 1996, Giga elected to discontinue its economic forecasting
business in Australia, BIS Shrapnel PTY Ltd. ('BIS Shrapnel'). In connection
with the discontinuance of such business, in July 1997 Giga sold the stock of
BIS Shrapnel to the management team in exchange for AU$407,500, or approximately
$293,000 at the time of sale.
 
     The continuing operations reflected in the financial statements represent
revenues and expenses associated with BIS Information Service revenues which
include events, publications and consulting. The results of the BIS market
research business and BIS Shrapnel have been shown as discontinued operations.
 
2. SIGNIFICANT ACCOUNTING POLICIES:
 
  Basis of Presentation
 
     The combined financial statements of BIS Strategic Decision include the
accounts of BIS Strategic Decisions, Inc., BIS Strategic Decisions, Ltd., BIS
Shrapnel, BIS Strategic Decisions, GmbH, BIS Strategic Decisions, Srl and BIS
Strategic Decisions, Sarl. All intercompany accounts and transactions have been
eliminated in combination.
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates and
assumptions that effect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
 
  Foreign Currency Translation

 
     For international operations, the local currency is used as the functional
currency. Income statement items are translated at the average rates of exchange
for the year. Realized and unrealized exchange gains or losses arising from
transaction adjustments are reflected in operations and are not material.
 
                                      F-29
<PAGE>

                            BIS STRATEGIC DECISIONS
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
  Cash Equivalents
 
     Cash equivalents consist of highly liquid investments with maturities of
three months or less at date of purchase.
 
  Revenue Recognition
 
     Revenues from events, publications and consulting are recognized as
follows:
 
          Events--revenues and associated expenses are recognized during the
     month that the conference is held.
 
          Publications--revenues from general and research reports are
     recognized when the report is published. Newsletter revenues are recognized
     over the subscription period.
 
          Consulting Services--revenues are recognized based on the percentage
     of the service that has been performed.
 
  Income Taxes
 
     The Predecessor Companies recognize deferred tax assets and liabilities for
the expected future tax consequences of events that have been included in the
Predecessor Companies' consolidated financial statements. Under this method,
deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax bases of assets and liabilities using
currently enacted tax rates for the year in which the differences are expected
to reverse. The Predecessor Companies record a valuation allowance against net
deferred tax assets if, based upon the available evidence, it is more likely
than not that some or all of the deferred tax assets will not be realized.
 
     The BIS companies filed separate tax returns.
 
  Property and Equipment
 
     Property and equipment are depreciated over the estimated useful lives of
the related assets using the straight-line method. Computers and related
equipment are depreciated over three years, furniture and fixtures are
depreciated over five years and motor vehicles are depreciated over four years.
Leasehold improvements are amortized over the lesser of the noncancelable term
of the related lease or their estimated economic lives. Maintenance and repairs

are charged to expense as incurred.
 
3. PROPERTY AND EQUIPMENT:
 
     Depreciation expense and amortization of leasehold improvements was
$191,000 for the period from January 1, 1995 to April 5, 1995.
 
4. CREDIT ARRANGEMENTS:
 
One of the combined affiliates of the Company has a working capital line of
credit agreement with a bank under which it may borrow amounts up to $750,000.
The line of credit bears interest at the bank's base rate plus 1.5% and is
secured by all assets owned or leased by the affiliate. The agreement contains
operational covenants and expired on December 31, 1994; however, the bank has
allowed the affiliate to extend the line pending resolution of the sale of the
affiliate. As of April 5, 1995, no amounts were outstanding under the line.
 
     The weighted average interest rate of outstanding borrowings was 7.5% for
the period January 1, 1995 to April 5, 1995.
 
                                      F-30
<PAGE>

                            BIS STRATEGIC DECISIONS
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
5. INCOME TAXES:
 
     For financial reporting purposes, the income tax benefit from continuing
operations was based on the following components:
 
<TABLE>
<S>                                                                  <C>
Pretax loss from continuing operations:
  United States...................................................   $(497)
  Foreign.........................................................    (219)
                                                                     -----
          Total pretax loss from continuing operations............   $(716)
                                                                     -----
                                                                     -----
</TABLE>
 
     The results of continuing operations include a foreign tax benefit of
$3,000.
 
6. PENSION PLANS:
 
     BIS has established the CAP International Savings and Retirement Plan (the
401(k) Plan), a profit sharing plan under Section 401 of the Internal Revenue
Code. Employees are eligible to participate in the 401(k) Plan by meeting
certain requirements, including length of service and minimum age. BIS matches
the first 3% of an employee's contribution by 25% and the next 3% of an
employee's contribution by 50%. BIS may also make additional contributions to
the plan at the discretion of the Board of Directors. BIS has not made any

discretionary contributions to the profit sharing plan. For the period January 1
to April 5, 1995, BIS contributed $23,000 to the plan.
 
7. LEASE COMMITMENTS:
 
     BIS leases certain office space and equipment under operating lease
agreements. Rent expense was $232,000 for the period January 1 to April 5, 1995.
 
8. JOINT VENTURE AGREEMENT:
 
     On October 18, 1991, BIS entered into a joint venture agreement with a
Japanese company. The purpose of the joint venture was to provide additional
market penetration in Japan for its products and services. Under the terms of
the joint venture agreement, the Predecessor Companies may be required to pay
its Japanese partner approximately $75,000 if cumulative sales under the joint
venture do not meet certain agreed upon levels by December 31, 1995. In
addition, on or prior to April 1, 1996, the Predecessor Companies may be
required to increase its investment in the joint venture by approximately
$23,000.
 
9. GEOGRAPHIC MARKETS:
 
     BIS operates in one business segment and in the geographical markets
indicated in the table below. Revenues from continuing operations are reflected
in the market from which the sales are made. The Other International market
includes France, Italy and Germany.
 
JANUARY 1, 1995 TO APRIL 5, 1995 (IN THOUSANDS):
 
<TABLE>
<CAPTION>
                                                               NORTH     UNITED         OTHER
                                                              AMERICA    KINGDOM    INTERNATIONAL    TOTAL
                                                              -------    -------    -------------    ------
<S>                                                           <C>        <C>        <C>              <C>
Revenues:
  Total revenues...........................................   $1,113      $ 499         $ 586        $2,198
  Transfers between areas..................................       --        (19)          (63)          (82)
                                                              -------    -------       ------        ------
  Unaffiliated revenues....................................   $1,113      $ 480         $ 523        $2,116
                                                              -------    -------       ------        ------
                                                              -------    -------       ------        ------
Loss from continuing operations............................   $ (537)     $ (22)        $(176)       $ (735)
</TABLE>
 
                                      F-31
<PAGE>

                            BIS STRATEGIC DECISIONS
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
     Export sales by geographic area for the U.S. operations of BIS totaled
$163,000 for the period January 1 to April 5, 1995 and were comprised of $57,000
to Europe, $75,000 to the Far East and $31,000 to other areas.

 
10. DISCONTINUED OPERATIONS:
 
     On June 25, 1996, Giga decided to discontinue the BIS Market Research
business. The results of these operations have been classified as discontinued
operations and the financial statements have been restated to reflect the
discontinuance. The operating results of the business for the period from
January 1 to April 5, 1995 are summarized as follows (in thousands):
 
<TABLE>
<S>                                                                 <C>
Revenues.........................................................   $3,994
Pre-tax income...................................................      876
Provision for income taxes.......................................      279
Net income.......................................................      597
</TABLE>
 
     On December 20, 1996, Giga decided to discontinue its Australian
econometric forecasting business. The results of these operations have been
classified as discontinued operations and the financial statements have been
restated to reflect the discontinuance. The operating results of the business
for the period from January 1 to April 5, 1995 are summarized as follows (in
thousands):
 
<TABLE>
<S>                                                                 <C>
Revenues.........................................................   $1,121
Pre-tax income...................................................       54
Provision for income taxes.......................................       --
Net income.......................................................       54
</TABLE>
 
                                      F-32

<PAGE>
================================================================================

     NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY, TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
                            ------------------------
 
                               TABLE OF CONTENTS
                            ------------------------
 
<TABLE>
<CAPTION>
                                                  PAGE
                                                  ----
<S>                                               <C>
Prospectus Summary.............................     3
Risk Factors...................................     7
Use of Proceeds................................    14
Dividend Policy................................    14
Capitalization.................................    15
Dilution.......................................    16
Selected Financial Data........................    17
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations...................................    19
Business.......................................    25
Management.....................................    31
Certain Transactions...........................    38
Principal Stockholders.........................    42
Description of Capital Stock...................    45
Shares Eligible for Future Sale................    48
Underwriting...................................    50
Legal Matters..................................    52
Experts........................................    52
Additional Information.........................    52
Index to Consolidated Financial
  Statements...................................   F-1
</TABLE>
 
                            ------------------------
 
     UNTIL   , 1998 (25 DAYS AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF COMMON STOCK
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A

PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

================================================================================


================================================================================
 
                                           SHARES
 
                                     [GIGA]
 
                                  COMMON STOCK
 
                            ------------------------
                                   PROSPECTUS
                            ------------------------
                     FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
 
                                           , 1998

================================================================================

<PAGE>

                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
     The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission registration fee and the NASD filing
fee.
 
<TABLE>
<S>                                                                                            <C>
SEC Registration Fee........................................................................   $ 13,570
NASD Filing Fee.............................................................................      5,100
Nasdaq Listing Fee..........................................................................      *
Blue Sky Fees and Expenses..................................................................      *
Transfer Agent and Registrar Fees...........................................................      *
Accounting Fees and Expenses................................................................      *
Legal Fees and Expenses.....................................................................      *
Printing, Engraving and Mailing Expenses....................................................      *
Premium for directors and officers insurance................................................      *
Miscellaneous...............................................................................      *
                                                                                               --------
     Total..................................................................................   $  *
                                                                                               --------
</TABLE>
 
------------------
* To be completed by Amendment
 
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
     Article Seven of the Registrant's Amended and Restated Certificate of
Incorporation (the 'Restated Certificate') provides that no director of the
Registrant shall be personally liable for any monetary damages for any breach of
fiduciary duty as a director, except to the extent that the Delaware General
Corporation Law (the 'DGCL') prohibits the elimination or limitation of
liability of directors for breach of fiduciary duty.
 
     Article Eight of the Restated Certificate provides that a director or
officer of the Registrant (a) shall be indemnified by the Registrant against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement incurred in connection with any litigation or other legal proceeding
(other than an action by or in the right of the Registrant) brought against him
by virtue of his position as a director or officer of the Registrant if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Registrant, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful and (b) shall be indemnified by the Registrant against all expenses
(including attorneys' fees) and amounts paid in settlement incurred in
connection with any action by or in the right of the Registrant brought against

him by virtue of his position as a director or officer of the Registrant if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Registrant, except that no indemnification
shall be made with respect to any matter as to which such person shall have been
adjudged to be liable to the Registrant, unless a court determines that, despite
such adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice, he
is required to be indemnified by the Registrant against all expenses (including
attorneys' fees) incurred in connection therewith. Expenses shall be advanced to
a director or officer at his request, provided that he undertakes to repay the
amount advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
 
     Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or
 
                                      II-1
<PAGE>

officer must give the Registrant notice of the action for which indemnity is
sought and the Registrant has the right to participate in such action or assume
the defense thereof.
 
     Section 145 of the DGCL provides that a corporation has the power to
indemnify a director, officer, employee or agent of the corporation and certain
other persons serving at the request of the corporation in related capacities
against amounts paid and expenses incurred in connection with an action or
proceeding to which he is or is threatened to be made a party by reason of such
position, if such person shall have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, in any criminal proceeding, if such person had no reasonable
cause to believe his conduct was unlawful; provided that, in the case of actions
brought by or in the right of the corporation, no indemnification shall be made
with respect to any matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the adjudicating
court determines that such indemnification is proper under the circumstances.
 
     The Board of Directors on April 26, 1996 approved, in accordance with
Section 145 of the DGCL, a Directors and Officers Indemnification Agreement to
be entered into between the Registrant and each of Registrant's directors and
officers. Pursuant to the terms of the agreement, the Registrant agrees to hold
any director or officer harmless against any and all expenses, judgments, fines
and amounts paid in settlement actually and reasonably incurred by such director
or officer in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative

(including an action by or in the right of the Registrant), to which the
director or officer becomes a party at any time or is threatened to be made a
party, by reason of the fact that the director or officer is a director,
officer, employee or agent of the Registrant, or serves at the request of the
Registrant as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise;
and otherwise to the fullest extent as may be provided to the director or
officer by the Registrant under the non-exclusivity provisions of Article V of
the Bylaws of the Registrant and the Delaware General Corporation Law. The
agreement also obligates the Registrant under certain circumstances to advance
amounts and contribute to any amounts paid out by a director or officer as a
result of his or her role as a director or officer of the Registrant in cases
where indemnification by the Registrant is not available. This agreement is also
intended to indemnify special advisors of the Registrant.
 
     Under Section 8 of the Underwriting Agreement, the Underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the Registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed as
Exhibit 1 hereto.
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
 
     Set forth in chronological order below is information regarding the number
of shares of capital stock and other securities issued by the Registrant since
the Registrant's inception in March 1995. Further included is the consideration,
if any, received by the Registrant for such shares of capital stock and other
securities and information relating to the section of the Securities Act, or
rule of the Commission under which exemption from registration was claimed. All
awards of options did not involve any sale under the Securities Act and none of
these securities was registered under the Securities Act.
 
      1.  Since March 1995, the Registrant has issued options to purchase an
aggregate of 2,385,293 shares of Common Stock at a weighted average exercise
price of $2.20 per share. During this same time period, the Registrant has
issued a total of 2,211,305 shares of Common Stock pursuant to the exercise of
options previously granted.
 
      2.  In March 1995, the Registrant sold to its Chairman of the Board of
Directors and Chief Executive Officer 1,400,000 shares of Common Stock at a
purchase price of $0.07125 per share.
 
      3.  In April 1995, the Registrant issued to Friday Holdings, L.P. a 5%
$1.0 million principal amount convertible promissory note in connection with the
Registrant's acquisition of BIS Strategic Decisions, Inc. and its five foreign
affiliates.
 
      4.  In June 1995, the Registrant issued a warrant to purchase 107,876
shares of Series B Preferred Stock to Montgomery Securities in consideration for
certain placement agent services at an exercise price of $4.625 per share.
 
                                      II-2
<PAGE>


      5.  In July 1995 and October 1995, the Registrant issued and sold an
aggregate of 570,000 shares of Series A Preferred Stock, $.001 par value
('Series A Preferred Stock') to a group of investors, including certain
employees and directors, at a purchase price of $5.00 per share.
 
      6.  In July 1995, the Registrant issued 160,000 shares of Series A
Preferred Stock to its Chairman of the Board of Directors and Chief Executive
Officer and to its Senior Vice President, Research & Technology in connection
with the Registrant's acquisition of a majority of the shares of ExperNet
Corporation ('ExperNet') and in December 1995, the Registrant issued to its
Senior Vice President, Research & Technology, in connection with the
Registrant's acquisition of the remaining shares of ExperNet, a 6% $400,000
convertible promissory note.
 
      7.  In August 1995, the Company issued to Mr. Crandall 40,000 shares of
Common Stock at a purchase price of $1.50 per share.
 
      8.  In August 1995, the Registrant issued a warrant to purchase 285,714
shares of Series B Preferred Stock to an investor at an exercise price of $2.345
per share. In September 1996, the investor made a cashless exercise of the
warrant and received 218,714 shares of the Company's Series B Preferred Stock.
 
      9.  Throughout 1995, the Registrant issued 2,036,002 shares of Common
Stock to a group of employees, consultants and directors at a purchase price of
$1.50 per share.
 
      10.  In November 1995 and February 1996, the Registrant issued and sold an
aggregate of 8,144,642 shares of Series B Preferred Stock, $.001 par value
('Series B Preferred Stock') to a group of investors at a purchase price of
$3.50 per share.
 
     11.  In August 1996, the Registrant issued 8,333 shares of Common Stock to
an employee in connection with the acquisition of his business.
 
     12.  In May and December 1997, the Company issued and sold an aggregate of
2,609,491 shares of Series C Preferred Stock, $.001 par value ('Series C
Preferred Stock'), at a purchase price of $4.11 per share to a limited number of
investors (the 'Series C Investors').
 
     13.  In January 1998, the Company issued warrants to purchase an aggregate
of 1,409,127 shares of Series C Preferred Stock at an exercise price of $5.28
per share to the Series C Investors.
 
     14.  In April 1998, the Company issued convertible promissory notes in the
aggregate principal amount of $10.0 million and warrants to purchase an
aggregate of 166,666 shares of Common Stock at an exercise price of $3.00 per
share to certain affiliates of Friedman, Billings, Ramsey & Co., Inc. ('FBR').
 
     15.  In April and May 1998, the Company issued and sold an aggregate of
285,715 shares of Series D Preferred Stock, par value $.001 per share ('Series D
Preferred Stock'), at a purchase price of $7.00 per share and warrants to
purchase an additional 154,286 shares of Series D Preferred Stock at an exercise
price of $9.00 per share.
 

     Other than FBR, certain of whose affiliates purchased convertible notes
from the Company in April 1998, no underwriters were engaged in connection with
any of the foregoing sales of securities.
 
     The shares of capital stock and other securities issued in the above
transactions were offered and sold in reliance upon the exemption from
registration under Section 4(2) of the Securities Act or Regulation D or Rule
701 promulgated under the Securities Act, relative to sales by an issuer not
involving any public offering.
 
                                      II-3

<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
     (A) EXHIBITS
 
<TABLE>
<CAPTION>
 EXHIBIT
   NO.      DESCRIPTION
---------   ---------------------------------------------------------------------------------------------------------
<S>         <C>  <C>
   *    1    --   Form of Underwriting Agreement.
  3.1*       --   Fourth Amended and Restated Certificate of Incorporation of the Registrant.
  3.2        --   Certificate of Designations of Series D Preferred Stock of the Registrant.
  3.3*       --   Form of Amended and Restated Certificate of Incorporation of the Registrant (to be filed with the
                  State of Delaware prior to the closing of the Offering to which this Registration Statement
                  relates).
  3.4*       --   By-Laws of the Registrant.
  3.5*       --   Form of Amended and Restated Bylaws of the Registrant (to become effective upon the closing of the
                  Offering to which this Registration Statement relates).
  4.1*       --   Specimen Certificate for shares of Common Stock, $.001 par value, of the Registrant.
  5*         --   Opinion of Weil, Gotshal & Manges LLP with respect to the validity of the securities being offered.
 10.1        --   Series B Preferred Stock Purchase Agreement dated November 13, 1995, as amended, between the
                  Registrant and the Investors named on Exhibit A thereto.
 10.2*       --   Form of Series B Preferred Stock Purchase Warrant dated February 28, 1996 registered in the name of
                  Montgomery Securities.
 10.3        --   (a) Series C Preferred Stock and Warrant Purchase Agreement dated May 9, 1997, between the Registrant 
                      and the Investors named in Exhibit A thereto.
                 *(b) Amendment No. 1 to Series C Preferred Stock and Warrant Purchase Agreement.
                 *(c) Letter Agreement re: Purchase of Series C Stock, between the Company and the Investors named
                      on the signature page thereto.
 10.4        --   Form of Series C Preferred Stock Purchase Warrant dated January 2, 1998 and issued to the Investors
                  in the Series C Financing.
 10.5        --   Series D Preferred Stock and Warrant Purchase Agreement dated April 6, 1998 between the Registrant
                  and the Investors named in Exhibit A thereto.
 10.6        --   (a) Registration Rights Agreement dated November 13, 1995, among the Registrant, the Investors named 
                      on Exhibit A thereto, Gideon I. Gartner and David L. Gilmour.
                 *(b) Amendment No. 1 to Registration Rights Agreement.
                 *(c) Amendment No. 2 to Registration Rights Agreement.
                 *(d) Amendment No. 3 to Registration Rights Agreement.
                 *(e) Amendment No. 4  to Registration Rights Agreement.
 10.7        --   (a) Co-Sale and Stock Restriction Agreement dated November 13, 1995, among the Registrant, Gideon I. 
                      Gartner and the stockholders named on the signature pages thereto.
                 *(b) Amendment No. 1 to Co-Sale Agreement.
                 *(c) Amendment No. 2 to Co-Sale Agreement.
 10.8        --   Form of Series D Preferred Stock Purchase Warrant dated April 7, 1998 and issued to the Investors
                  in the Series D Financing.
 10.9        --   Loan and Warrant Purchase Agreement dated April 7, 1998 between the Registrant and the Lenders
                  named in Schedule A thereto.
 10.10       --   Form of Convertible Promissory Note dated April 7, 1998 issued to certain affiliates of Friedman,
                  Billings, Ramsey & Co., Inc.
 10.11       --   Form of Common Stock Purchase Warrant dated April 7, 1998 issued to certain affiliates of Friedman,
                  Billings, Ramsey & Co., Inc.

 10.12       --   Security Agreement dated as of April 7, 1998 between the Registrant and an affiliate of Friedman,
                  Billings, Ramsey & Co., Inc. as agent for the Lenders.
 10.13*      --   Consulting Agreement dated February 1, 1998 between the Registrant and David Gilmour.
 10.14*      --   Separation Agreement dated January 7, 1998 between the Registrant and Henry S. Givray.
 10.15*      --   Separation Agreement dated October 2, 1997 between the Registrant and Jacques Bouvard.
 10.16       --   Non-competition Agreement dated November 13, 1995 between the Registrant and Gideon I. Gartner.
 10.17       --   (a) Letter Agreement dated July 12, 1996 between the Registrant and Richard L. Crandall.
                 *(b) Letter Agreement dated February 11, 1997 between the Registrant and Richard L. Crandall.
 10.18       --   Lease dated October 31, 1995 between the Registrant and Cambridge 1400 Limited Partnership.
</TABLE>
 
                                      II-4
<PAGE>

<TABLE>
<CAPTION>
 EXHIBIT
   NO.      DESCRIPTION
---------   ---------------------------------------------------------------------------------------------------------
<S>         <C>   <C>
 10.19       --   Lease dated October 6, 1987, as amended, between BIS Strategic Decisions, Inc. and Charles A.
                  Pesko, Jr., as Trustee of Longwater Circle Trust.
 10.20*      --   Content Distribution Agreement dated May 21, 1996 between the Registrant and Dow Jones and Company,
                  Inc.
 10.21*      --   Content Distribution Agreement dated December 31, 1996 between the Registrant and Information
                  Access Corporation.
 10.22*      --   1995 Stock Option/Stock Issuance Plan
 10.23*      --   1996 Stock Option Plan
 10.24       --   1997 Director Option Plan
 21          --   Subsidiaries of the Registrant.
 23.1*       --   Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5).
 23.2        --   Consent of Coopers & Lybrand L.L.P.
 24          --   Powers of Attorney (included on page II-7).
 27          --   Financial Data Schedule.
</TABLE>
 
------------------
* To be filed by amendment.
 
     (B) FINANCIAL STATEMENT SCHEDULES
 
     All other schedules have been omitted because they are not required or
because the required information is given in the Consolidated Financial
Statements or Notes thereto.
 
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 contained in the Restated Certificate of
Incorporation and Amended and Restated By-Laws of the Registrant and the laws of
the State of Delaware, or otherwise, the Registrant has been advised that in the
opinion of the 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 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)(l) 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.
 
          (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-5

<PAGE>

                                   SIGNATURES
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CAMBRIDGE,
COMMONWEALTH OF MASSACHUSETTS, ON THIS 15th DAY OF MAY, 1998.
 
                                          GIGA INFORMATION GROUP, INC.

                                          By: /s/ Gideon I. Gartner
                                             ----------------------------------
                                                    Gideon I. Gartner
                                                  Chairman of the Board,
                                          President and Chief Executive Officer
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED. EACH PERSON WHOSE SIGNATURE APPEARS BELOW
HEREBY CONSTITUTES GIDEON I. GARTNER AND DANIEL M. CLARKE, AND EACH OF THEM
SINGLY, HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT, EACH WITH FULL POWER OF
SUBSTITUTION AND RESUBSTITUTION (UNTIL REVOKED IN WRITING) TO SIGN FOR SUCH
PERSON AND IN SUCH PERSON'S NAME AND CAPACITY INDICTAED BELOW, ANY AND ALL
AMENDMENTS TO THIS REGISTRATION STATEMENT AND ANY OTHER REGISTRATION STATEMENT
FILED IN CONNECTION WITH THE SAME OFFERING PURSUANT TO RULE 462(B) UNDER THE
SECURITIES ACT, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER
DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION,
HEREBY RATIFYING AND CONFIRMING SUCH PERSON'S SIGNATURE AS IT MAY BE SIGNED BY
SUCH ATTORNEYS TO ANY AND ALL SUCH AMENDMENTS AND ADDITIONAL REGISTRATION
STATEMENTS.
 

<TABLE>
<CAPTION>
                  SIGNATURE                                        TITLE                              DATE
---------------------------------------------  ----------------------------------------------     ------------
 
<C>                                            <S>                                                <C>

/s/ Gideon I. Gartner
---------------------------------------------  Chairman of the Board of Directors, President      May 15, 1998
              Gideon I. Gartner                and Chief Executive Officer (Principal
                                               Executive Officer)

/s/ Daniel M. Clarke 
---------------------------------------------  Senior Vice President and Chief Financial          May 15, 1998
              Daniel M. Clarke                 Officer, Treasurer and Secretary (Principal
                                               Financial and Accounting Officer)

 /s/ David L. Gilmour
---------------------------------------------  Director                                           May 15, 1998
              David L. Gilmour

 /s/ Neill H. Brownstein
---------------------------------------------  Director                                           May 15, 1998
             Neill H. Brownstein
 
/s/ Richard L. Crandall
---------------------------------------------  Director                                           May 15, 1998
             Richard L. Crandall
 

---------------------------------------------  Director                                           May 15, 1998
                Irwin Lieber
 
/s/ Bernard Goldstein
---------------------------------------------  Director                                           May 15, 1998
              Bernard Goldstein
</TABLE>
 
                                      II-6

<PAGE>

                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
 EXHIBIT
  NUMBER     DESCRIPTION                                                                                     PAGE NO.
----------   ---------------------------------------------------------------------------------------------   ---------
 
<S>          <C>   <C>                                                                                       <C>



</TABLE>
 
------------------
 
 * To be filed by amendment.
 
** [Confidential treatment requested as to certain portions, which portions are
   omitted and filed separately with the Commission.]
[{"type": "S-1", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 417630}]
{"company-data": {"conformed-name": "GIGA INFORMATION GROUP INC", "cik": "0000948263", "assigned-sic": "8700", "irs-number": "061422860", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-52899", "film-number": "98626711"}, "business-address": {"street1": "1 LONG WATER CIRCLE", "city": "NORWELL", "state": "MA", "zip": "02061", "phone": "7819829500"}, "mail-address": {"street1": "ONE LONGWATER CIRCLE", "city": "NORWELL", "state": "MA", "zip": "02061"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 15, 1998
 
                                                     REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
                          GIGA INFORMATION GROUP, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE                                      8732                                     06-1422860
     (STATE OR OTHER JURISDICTION OF               (PRIMARY STANDARD INDUSTRIAL                      (I.R.S. EMPLOYER
      INCORPORATED OR ORGANIZATION)                CLASSIFICATION CODE NUMBER)                    IDENTIFICATION NUMBER)
------------------------
 
       ONE LONGWATER CIRCLE, NORWELL, MASSACHUSETTS 02061 (781) 982-9500
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------
 
                               GIDEON I. GARTNER
          CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
                          GIGA INFORMATION GROUP, INC.
                              ONE LONGWATER CIRCLE
                  NORWELL, MASSACHUSETTS 02061 (781) 982-9500
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)
                            ------------------------
 
                                   Copies to:
GERALD S. BACKMAN, P.C.                                           ALEXANDER D. LYNCH, ESQ.
                   WEIL, GOTSHAL & MANGES LLP                                          LUCI STALLER ALTMAN, ESQ.
                        767 FIFTH AVENUE                                            BROBECK, PHLEGER & HARRISON LLP
                  NEW YORK, NEW YORK 10153-0119                                        1633 BROADWAY, 47TH FLOOR
                         (212) 310-8000                                                NEW YORK, NEW YORK 10019
                                                                                            (212) 581-1600
------------------------
 
     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
 
     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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 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 number of the earlier effective registration statement for the same
offering. / /
 
     If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM
                                  TITLE OF EACH CLASS                                      AGGREGATE OFFERING        AMOUNT OF
                             OF SECURITIES TO BE REGISTERED                                     PRICE(1)         REGISTRATION FEE
Common Stock, par value $.001 per share.................................................       $46,000,000            $13,570
(1) Estimated solely for the purpose of calculating the amount of the
    registration fee pursuant to Rule 457(c) under the Securities Act of 1933.
                            ------------------------
 
     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

                   SUBJECT TO COMPLETION, DATED MAY 15, 1998
                                             SHARES
 
                                     [LOGO]
 
                                  COMMON STOCK
                            ------------------------
 
     All of the            shares of Common Stock, par value $0.001 per share
(the 'Common Stock'), offered hereby are being sold by Giga Information Group,
Inc., a Delaware corporation (together with its subsidiaries, 'Giga' or the
'Company'). Prior to this offering (the 'Offering'), there has been no public
market for the Common Stock. It is currently anticipated that the initial public
offering price will be between $           and $           per share. See
'Underwriting' for a discussion of the factors to be considered in determining
the initial public offering price.
 
     The Company has applied for inclusion of the Common Stock on the Nasdaq
National Market under the symbol 'GIGX.'
                            ------------------------
 
     SEE 'RISK FACTORS' ON PAGES 7 THROUGH 14 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS.
                            ------------------------
 
   THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
        AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
           HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
          SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
            OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
                            IS A CRIMINAL OFFENSE.
PRICE TO           UNDERWRITING DISCOUNTS         PROCEEDS TO
                                           PUBLIC              AND COMMISSIONS(1)            COMPANY(2)
Per Share.......................           $                         $                         $
Total(3)........................       $                         $                         $
(1) See 'Underwriting' for information relating to indemnification of the
    Underwriters.
 
(2) Before deducting expenses payable by the Company estimated at $           .
 
(3) The Company has granted the Underwriters an option exercisable within 30
    days of the date hereof, to purchase up to an aggregate of        additional
    shares of Common Stock, solely to cover over-allotments, if any. If the
    Underwriters exercise such option in full, the total Price to Public,
    Underwriting Discounts and Commissions and Proceeds to Company will be
    $       , $       and $       , respectively. See 'Underwriting.'
                            ------------------------
 
     The shares of Common Stock are offered by the Underwriters, subject to
prior sale, when, as and if delivered to and accepted by them, and subject to
the right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made against
payment therefor at the offices of Friedman, Billings, Ramsey & Co., Inc.,
Arlington, Virginia, or in book entry form through the book entry facilities of
the Depositary Trust Company, on or about             , 1998.
 
                     FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
 
              The date of this Prospectus is                , 1998
[PHOTO DEPICTING THE COMPANY'S GIGAWEB USER INTERFACE]
 

     CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT COVERING
TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
'UNDERWRITING.'
 
                                       2
PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the Company's
Consolidated Financial Statements (the 'Consolidated Financial Statements') and
notes thereto appearing elsewhere in this Prospectus. Unless the context
otherwise requires, references in this Prospectus to 'Giga' or the 'Company' are
to Giga Information Group, Inc., a Delaware corporation, and its direct and
indirect subsidiaries. Unless otherwise indicated, the information contained in
this Prospectus (i) assumes no exercise of the Underwriters' over-allotment
option, (ii) reflects the automatic conversion of all outstanding shares of the
Company's Series A, Series B, Series C and Series D Preferred Stock (the
'Convertible Preferred Stock') into an aggregate of 4,686,784 shares of Common
Stock upon the closing of the Offering (the 'Preferred Conversion'), (iii)
reflects the repayment (the 'Bridge Repayment') of convertible promissory notes
in the aggregate principal amount of $10.0 million (the 'Bridge Notes') issued
in April 1998, (iv) reflects the filing by the Company, prior to the closing of
the Offering, of an amended and restated certificate of incorporation (the
'Restated Certificate'), (v) reflects a one-for-three reverse stock split of the
Common Stock (the 'Reverse Stock Split') to be effected prior to the closing of
this Offering and (vi) has been adjusted to reflect a four-for-one stock split
of the Common Stock effected as a stock dividend in November 1995 (the 'Stock
Split').
 
                                  THE COMPANY
 
     The Company provides objective analyses and advice relating to developments
and trends in the computing, telecommunications and related industries
(collectively, the 'Information Technology' or 'IT' industries) to assist its
customers in making technology-related decisions. IT is critical to the
competitiveness and long-term viability of a wide range of organizations. The
Company believes information overload, confusion and anxiety exists among IT
decision-makers. As a result, an increasing number of organizations are turning
to Continuous Information Service ('CIS') providers to monitor and analyze IT
developments and to identify trends to support such organization's IT
decision-making needs.
 
     Giga was founded by Gideon I. Gartner, who in 1979 founded Gartner Group,
Inc., a CIS provider. Building on his extensive experience and success in the
CIS industry, Mr. Gartner formed Giga with the objective of creating a new
approach toward addressing the CIS needs of users and vendors of IT products and
services. Giga has developed a range of innovative Continuous Information
Services, as well as an effective, electronic information delivery mechanism,
designed to provide integrated IT analyses and advice.
 
     Foremost among these innovations is the Company's unified advisory service
('Advisory Service'), through which IT research and analysis is offered to
customers as a single service intended to encompass the variety of IT coverage
offered by other CIS providers through multiple and fragmented services. This
original research and advice is provided by a staff of experienced industry
analysts. To complement Giga's analysts, the Company provides its Advisory
Service customers with access to an extensive network of external IT

practitioners ('ExperNet'). These practitioners have current experience in
diversified segments of the IT industry, which the Company believes cannot be
efficiently covered by the traditional CIS approach.
 
     The Company also provides 'Continuous Advisory Consulting' services, a
valuable complement to Giga's Advisory Service inquiry process, which enable
customers to request more in-depth analysis targeted at the application of
technology to their specific situation. Continuous Advisory Consulting services,
which are provided on an on-going basis, may include assessments of strategic
technology planning, implementation issues surrounding a major technology
migration, or a vendor's marketing plan.
 
     The Company has also introduced its 'IT Practice Services,' which integrate
the results of documented surveys of the successful operating practices and
techniques of IT professionals ('best practices') with strategic consulting, to
allow customers to leverage the proven practices of their peers. Each IT
Practice Service is designed to address issues faced by an executive in a
specific job function within an organization. For example, the Company's 'Year
2000 Practices' is designed for the executive in charge of an organization's
year 2000 activities.
 
     The Company organizes and sponsors a range of events on significant IT
industry issues and trends, and produces publications based on conference topics
or current IT issues (collectively, 'Events and Publications'). For example, the
Company hosts its flagship annual conference, GigaWorld IT Forum, at which
Giga's analysts present and update their most important research findings and
recommendations and meet one-on-one in advisory sessions with clients.
 
                                       3
Giga has designed its innovative Advisory Service model to capitalize on
the capabilities of the Internet. Advisory Service research is accessed and
customized through the Company's intelligent, Internet-based information
delivery interface ('GigaWeb'). GigaWeb is designed to make it easy and
efficient for a customer to navigate through the full spectrum of Giga's
original research and third party content, together with access to human
expertise. In addition, the Company maintains an authoring environment and
advanced client interface designed for electronic delivery and encourages
collaboration among analysts and clients, which is facilitated through the
Internet.
 
     Giga's objective is to become the leading third generation CIS provider,
offering a significant price/performance advantage over its competitors. Key
elements of the Company's strategy are to (i) utilize and enhance its
price/performance advantage to increase the range of companies which can afford
CIS products, (ii) leverage its existing customer base by providing non-advisory
additional services such as IT Practice Services and Continuous Advisory
Consulting, (iii) increase the number of Advisory Service subscribers within an
organization and (iv) expand its worldwide distribution both domestically and
internationally.
 
     The Company's executive offices are located at One Longwater Circle,

Norwell, Massachusetts 02061 and its telephone number is (781) 982-9500.
 
                                  THE OFFERING
Common Stock offered hereby........................  shares
Common Stock to be outstanding after the
  Offering.........................................  shares(1)
Use of Proceeds....................................  To repay indebtedness, and for capital expenditures,
                                                     working capital and other general corporate purposes. See
                                                     'Use of Proceeds.'
Proposed Nasdaq National Market symbol.............  GIGX
------------------
(1) Based on shares outstanding as of March 31, 1998. Excludes (i) 1,316,197 
    shares of Common Stock issuable upon exercise of options outstanding as of
    March 31, 1998, with a weighted average exercise price of $2.43 per share;
    (ii) 873,273 shares of Common Stock reserved for issuance, as of March 31,
    1998, under the Company's stock plans; (iii) 166,666, 35,959, and 654,432
    shares of Common Stock issuable upon exercise of warrants outstanding as of
    March 31, 1998, with exercise prices of $3.00, $13.875 and $13.50 per
    share, respectively; and (iv) excludes 35,330 shares of Common Stock issued
    by the Company to employees after March 31, 1998. See 'Management--Executive
    Compensation' and 'Description of Capital Stock.'
                             ------------------------
 
     GigaTel(Registered) is a registered trademark of the Company. The Company
has several trademarks including, the GiGa Giga Information Group (and
design)(Trademark), Giga Advisory Service(Trademark), GigaWeb(Trademark),
Gigabots(Trademark), GigaNotes(Trademark), GigaWorld IT Forum(Trademark),
IntraGiga(Trademark), IdeaBytes(Trademark) and ExperNet(Trademark). All other
trademarks or trade names referred to in this Prospectus are the property of
their respective owners.
 
     This Prospectus contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the Company.
Words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,'
'estimates' and variations of such words and similar expressions are intended to
identify such forward-looking statements. These forward-looking statements are
based on current expectations, estimates and projections about the Company's
business, and beliefs and assumptions made by management, all of which involve
risks and uncertainties. Prospective investors are cautioned that such
statements are only predictions and that actual events or results may differ
materially. In evaluating such statements, prospective investors should
specifically consider the various factors identified in this Prospectus,
including the matters set forth under the caption 'Risk Factors,' which could
cause actual results to differ materially from those indicated by such
forward-looking statements.
 
                                       4
SUMMARY CONSOLIDATED FINANCIAL DATA
PREDECESSOR COMPANIES(1)                                    COMPANY
                                -------------------------   -----------------------------------------------------------------------
                                    YEAR        JANUARY 1     MARCH 17             YEAR ENDED               THREE MONTHS ENDED
                                   ENDED           TO            TO               DECEMBER 31,                   MARCH 31,
                                DECEMBER 31,    APRIL 5,    DECEMBER 31,   --------------------------   ---------------------------
                                    1994          1995          1995           1996          1997          1997           1998
                                ------------    ---------   ------------   ------------   -----------   ----------   --------------
                                                          (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues:
  Continuous information
    services..................    $     --       $    --      $     --       $  3,149     $    14,600   $    2,570     $    6,804
  Other services..............       7,366         1,833         5,517          6,043           4,715        1,276          1,693
  Publications................         800           283         1,442            946             344          180             55
                                ------------    ---------   ------------   ------------   -----------   ----------   --------------
    Total revenues............       8,166         2,116         6,959         10,138          19,659        4,026          8,552
Costs and expenses:
  Cost of services............       5,143         1,182         4,707         12,336          12,477        3,202          4,391
  Cost of publications........         446           240           346            790             174           75             71
  Sales and marketing.........       1,438           167         1,016          6,706          19,617        4,158          5,781
  Research and development....          --            --           348          1,789           1,975          659            339
  General and
    administrative............       4,027         1,047         5,760          9,739           6,419        1,061          1,339
  Depreciation and
    amortization..............       2,943           215         1,387          2,391           2,810          634            385
                                ------------    ---------   ------------   ------------   -----------   ----------   --------------
    Total costs and expenses..      13,997         2,851        13,564         33,751          43,472        9,789         12,306
                                ------------    ---------   ------------   ------------   -----------   ----------   --------------

Loss from continuing
  operations, net of taxes....      (4,663)         (503)       (5,366)       (22,702)        (23,130)      (5,689)        (3,807)
Income (loss) from
  discontinued operations, net
  of taxes....................      (1,870)          651         1,644         (2,688)          1,313           --             --
Net income (loss).............      (6,533)          148        (3,722)       (25,390)        (21,817)      (5,689)        (3,807)
Historical results per common
  share-basic and diluted:
  Loss from continuing
    operations................                                                                 (11.16)                      (1.80)
  Income from discontinued
    operations................                                                                     --                          --
  Income from disposal of
    discontinued operations...                                                                   0.63                          --
  Net loss....................                                                                 (10.53)                      (1.80)
Historical weighted average
  number of common shares
  outstanding:................                                                              2,072,837                   2,115,837
Pro forma results per common
  share-basic and diluted:
  Loss from continuing
    operations................                                                                  (3.42)                      (0.56)
  Income from discontinued
    operations................                                                                     --                          --
  Income from disposal of
    discontinued operations...                                                                   0.19                          --
  Net loss....................                                                                  (3.23)                      (0.56)
Pro forma weighted average
  number of common shares
  outstanding:................                                                              6,759,621                   6,802,621
MARCH 31, 1998
                                                                                          -----------------------------------------
                                                                                                           PRO        PRO FORMA AS
                                                                                            ACTUAL       FORMA(2)    ADJUSTED(2)(3)
                                                                                          -----------   ----------   --------------
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash
    equivalents.......................................................................    $     1,753   $    3,753     $
Working capital (deficit)..............................................................       (13,821)     (11,821)
Total assets...........................................................................        15,673       17,673
Deferred revenues......................................................................        19,458       19,458         19,458
Long-term debt, less current portion...................................................           848          848            848
Total stockholders' equity.............................................................       (12,750)     (10,750)
------------------
(1) Financial data included herein contains results of certain predecessor
    companies acquired by the Company in 1995. For a description of the
    predecessor companies and an explanation of the comparative periods
 
                                              (Footnotes continued on next page)
 
                                       5
(Footnotes continued from previous page)

    presented herein, see 'Management's Discussion and Analysis of Financial
    Condition and Results of Operations--Organization of the Company and
    Financial Statement Presentation.'
(2) Presented on a pro forma basis to give effect to the Series D Financing (as
    defined herein) and the Preferred Conversion. See 'Certain Transactions'
    and Note 20 to the Consolidated Financial Statements.
(3) Adjusted to give effect to the sale by the Company of      shares of Common
    Stock offered hereby at an assumed initial public offering price of
    $          per share and the application of the estimated net proceeds
    therefrom. See 'Use of Proceeds' and 'Capitalization.'
 
                                       6
RISK FACTORS
 
     The following risk factors should be considered carefully in addition to
the other information contained in this Prospectus before purchasing the Common
Stock offered hereby. This Prospectus contains certain statements of a
forward-looking nature all of which involve risks and uncertainties and actual
events or results may differ materially from the results discussed in such
forward-looking statements.
 
LIMITED OPERATING HISTORY; PRIOR LOSSES AND ANTICIPATION OF FUTURE LOSSES
 
     The Company was incorporated on March 17, 1995, and in April 1996
introduced the Advisory Service, its principal service offering and its first
Continuous Information Service, and GigaWeb, the Company's Internet-based system
for delivering information, analyses and advice to its customers. The Company
has been marketing its Continuous Information Services for only a limited period
of time, and the Company's future success will depend, in large part, on its
ability to successfully market and enhance these services.
 
     Since its inception, the Company has incurred substantial costs to develop
its Continuous Information Services, establish its GigaWeb system, build a
management team and recruit, employ and train research analysts, sales personnel
and support staff for its business. As a consequence, the Company has incurred
substantial operating losses since its inception and, at March 31, 1998, had an
accumulated deficit of $54.7 million. The Company expects to incur significant
losses through at least fiscal 1998 as the Company expands and develops its
services and products. The magnitude and duration of the Company's losses will
depend on a number of factors both within and outside of the Company's control,
including the Company's ability to successfully market its Continuous
Information Services, customer acceptance of the Company's single-service model,
the Company's ability to attract and retain qualified research analysts, sales
personnel and management personnel on a timely basis and the related costs of
such efforts, the response of competitors to the Company's services and
products, the ability of the Company to develop and market new services and
products, and the continued acceptance by customers of subscription agreements
providing for advance payments rather than equal monthly installments or some
other payment model. In addition, the Company has significantly increased its
operating expenses and expects to continue such increases in the future
primarily to expand its staff of research analysts and sales and support
personnel and to further develop and enhance its services and its GigaWeb
system. As a result, the Company may not be readily able to reduce or adjust
expenses in the event that it does not generate planned revenues or if its
revenues decrease. There can be no assurance when or if the Company will begin
to generate revenue that is sufficient to achieve profitability, to maintain
profitability on a quarterly or annual basis or to sustain or increase its
revenue growth in future periods. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations.'
 
NEED TO ATTRACT AND RETAIN QUALIFIED PERSONNEL
 
     The Company's success will depend, in part, upon its ability to hire,
train, motivate and retain a significant number of highly-skilled and

experienced employees, particularly management, research analysts and sales
personnel. The Company has experienced in the past, and may experience in the
future, high levels of turnover of its personnel, particularly sales and
marketing personnel. The Company has also experienced, and expects to continue
to experience, intense competition for professional personnel with, among
others, producers of IT services and products, management consulting firms and
systems integrators. Many of these firms have substantially greater financial
resources than the Company to attract and compensate qualified personnel. In
addition, some of the Company's competitors require that their employees enter
into non-competition agreements, the terms of which could prohibit such
individuals for a period of time from working for the Company. There can be no
assurance that the Company will be successful in attracting a sufficient number
of highly-skilled employees in the future, or that it will be successful in
training, motivating and retaining the employees it is able to hire, and any
inability to do so would have a material adverse effect on the Company's
business, financial condition and results of operations.
 
                                       7
DEPENDENCE ON SALES AND RENEWALS OF SUBSCRIPTION-BASED SERVICES; NEED TO
ANTICIPATE CHANGING MARKET NEEDS
 
     The Company offers its Continuous Information Services on a subscription
basis from which the Company derived 74% and 79% of total revenues for the year
ended December 31, 1997 and the three months ended March 31, 1998, respectively.
Accordingly, the Company's prospects will depend on its ability to enter into a
significant number of contracts for subscriptions to its services and to achieve
and sustain high renewal rates, and no assurance can be given that it will be
successful in doing so. The Company's ability to secure subscriptions and
subscription renewals is dependent upon, among other things, its ability to
deliver, through its Continuous Information Services, consistently high quality
and timely analysis and advice with respect to issues, developments and trends
in the IT industry that clients view as important. To deliver valuable analysis
and advice on a sustained basis, the Company must, among other things, recruit
and retain a large and growing number of highly talented professionals in a very
competitive job market, understand and anticipate market trends so as to keep
its analysis focused on the changing needs of its customers, and deliver
services and products of sufficiently high quality on a timely basis to
withstand competition. There can be no assurance that the Company will be able
to achieve and sustain high subscription renewal rates or that the Company's
employees will be able to achieve desired sales productivity levels. Any
material decline in subscriptions and subscription renewal rates or the
inability of the Company's employees to achieve desired sales productivity
levels would have a material adverse effect on the Company's business, financial
condition and results of operations. See 'Management's Discussion and Analysis
of Financial Condition and Results of Operations.'
 
ABILITY TO MANAGE GROWTH
 
     The Company's planned expansion is expected to place a significant strain
on the Company's financial, operational and managerial resources. To manage its
expansion, the Company must continue to implement and improve its operations and
financial systems and increase, train and manage its personnel. There can be no

assurance that the Company's systems, procedures or controls currently in place
will be adequate to support the Company's operations or that the Company will be
able to implement additional systems successfully and in a timely manner if
required. If the Company continues to grow, it will be required to expand its
research staff, expand its sales and marketing force, recruit additional key
management personnel, improve its operational and financial systems and train,
motivate and manage additional employees. There can be no assurance that the
Company will be able to manage these changes successfully. Any inability of the
Company to manage its growth successfully could have a material adverse effect
on the Company's business, financial condition and results of operations.
 
SUBSTANTIAL FUTURE CAPITAL NEEDS; RISKS OF WORKING CAPITAL DEFICIENCY
 
     The Company's business has significant fixed costs, primarily attributable
to the costs associated with producing research to implement its single-service
strategy, which provides for coverage of many of the IT sectors and contemplates
broad direct distribution worldwide. The Company has spent substantial amounts
to date and expects capital and operating expenditures to increase due to
numerous factors, including the Company's ability to successfully market its
Continuous Information Services, the Company's ability to enter into contracts
for the sale of its services and to achieve and sustain acceptable renewal
rates, its ability to attract and retain qualified employees, including research
and sales personnel, on a timely basis and the related costs of such efforts,
the response of competitors to the Company's services, the Company's ability to
develop and market new services and products, the further advancement of the
GigaWeb system, the Company's expansion of its international operations, and the
continued acceptance by customers of annual membership agreements providing for
advance payments rather than equal monthly installments or some other payment
model. The Company anticipates funding its ongoing working capital needs
principally through the net proceeds to the Company from the Offering. However,
in the event that the Company encounters difficulties in collecting accounts
receivable, experiences low or reduced subscription renewal rates or otherwise
has revenues that are lower than planned, the Company might require additional
working capital and there can be no assurance that such capital would be
available to the Company on terms that are acceptable, if at all. If adequate
funds are not available, the Company may be required to reduce its fixed costs
and delay, scale back or eliminate certain of its services or products, any of
which could have a material adverse effect on the Company's business, financial
 
                                       8
condition and results of operations. See 'Management's Discussion and Analysis
of Financial Condition and Results of Operations.'
 
DEPENDENCE ON KEY PERSONNEL
 
     The extent of the Company's success will depend in large part upon the
continued services of its executive officers and key employees, including its
founder, Chairman of the Board of Directors and Chief Executive Officer, Gideon
I. Gartner. Mr. Gartner, in particular, is well known in the IT community and
his reputation in the Continuous Information Services industry and his network
of contacts have been instrumental in establishing and building the Company's
business and in obtaining financing for the Company. The loss of the services of

either Mr. Gartner or one or more of the Company's other key personnel would
have a material adverse effect on the Company. There are no employment contracts
currently in force with key employees.
 
SIGNIFICANT COMPETITION
 
     The Company competes in the market for IT services and products directly
with other independent providers of Continuous Information Services, including
Gartner Group, Inc., META Group, Inc. and Forrester Research Inc., and the
internal planning, research and marketing staffs of corporations and IT vendors.
The Company also competes with other information providers, including market
research firms, 'Big Six' accounting firms, consulting firms and systems
integrators. Many of the Company's direct and indirect competitors have
substantially greater financial, information gathering and marketing resources
than the Company. Some of the Company's direct and indirect competitors also
have established research organizations with greater market recognition and
experience in the IT industry. There can be no assurance that the Company will
be successful in establishing a competitive research organization. Delays,
difficulty in developing and achieving market acceptance of Giga's Continuous
Information Services, or customer dissatisfaction would have a material adverse
effect on the Company's business, financial condition and results of operations.
In addition, new competitors could seek to compete in one or more market
segments addressed by the Company's services and products. There can be no
assurance that the Company's current or potential competitors will not develop
services and products comparable or superior to those developed by the Company
or respond more quickly to new or emerging industry trends or changing customer
requirements. There can be no assurance that the Company will be able to
continue to compete successfully against existing or new competitors. In
addition, any pricing pressures, reduced margins or loss of market share
resulting from increased competition could have a material adverse effect on the
Company's business, financial condition and results of operations. See
'Business--Competition.'
 
RISKS ASSOCIATED WITH THE DEVELOPMENT OF NEW SERVICES AND PRODUCTS
 
     The Company's future success will depend in part on its ability to
anticipate emerging market trends and to develop or acquire new services,
features and products that address the changing information, analysis, and
advice needs of IT users, vendors and investors. The process of internally
researching, developing, launching and gaining client acceptance of a new
service or product, or assimilating and marketing an acquired service or
product, is inherently risky and costly. Delays or failures during development
or implementation, or lack of market acceptance of these services and products,
could have a material adverse effect on the Company's business, financial
condition and results of operations. The future success of the Company's
Continuous Information Services will depend in part on the Company's ability to
expand the breadth and depth of its services through the addition of internal
analysts and consultants, content from third party sources and external
practitioners. The Company's continued ability to differentiate itself through
its Internet-based GigaWeb system will depend on its ability to continue to add
features and functionality to GigaWeb. In addition, the Company has limited
internal resources dedicated to its Web site development and relies on third
parties, including consultants and software developers, for the design,
development and testing of its GigaWeb system and other delivery mechanisms. Any

technical or other related problems or deficiencies in GigaWeb in the areas of
reliability, performance and salability could have a material adverse effect on
the Company's business, financial condition and results of operations. The
Company has had limited experience introducing new services and products and
there can be no assurance that its efforts to introduce new, or to assimilate
acquired, services or products, will be successful. If the Company is unable,
for technical or other reasons, to develop and introduce new services or
products or to make enhancements to existing services and products in a timely
manner in response to changing market conditions or customer requirements, or if
its Continuous Information Services or other service offerings
 
                                       9
do not achieve market acceptance, the Company's business, financial condition
and results of operations would be materially adversely affected. See
'Business--Products and Services.'
 
POTENTIAL FOR SIGNIFICANT FLUCTUATIONS IN QUARTERLY OPERATING RESULTS;
SEASONALITY
 
     The Company's operating results may fluctuate significantly in the future
due to various factors, including the level and timing of new subscriptions and
renewals of subscriptions to Continuous Information Services, the timing and
amount of new business generated by the Company, the mix of domestic versus
international business, the timing of the development, introduction and
marketing of new services and products, the timing of the hiring of research
analysts and sales people, changes in the spending patterns of the Company's
target clients, the Company's accounts receivable collection experience, changes
in market demand for IT research and analysis, foreign currency exchange rate
fluctuations, competitive conditions in the industry and general economic
conditions. A high percentage of the Company's operating expenses is based
primarily on sales forecasts and the Company may be unable to adjust spending in
a timely manner to compensate for any unexpected shortfalls in revenues. Any
significant shortfall in revenues in relation to the Company's expectations
would have a material adverse effect on the Company's business, financial
condition and results of operations. Moreover, a significant portion of the
Company's renewals and subscriptions are placed during the fourth quarter,
particularly the last month of such quarter, due primarily to customers'
purchasing patterns and the timing of certain sales performance quota cutoffs.
Due to the Company's limited operating history, and as a result of its revenue
growth, seasonal trends in the Company's results of operations have not clearly
emerged. However, the Company believes that its future operating results may
follow a pattern of seasonal fluctuation. Accordingly, the Company believes that
period to period comparisons of results of operations are not necessarily
meaningful and should not be relied upon as an indication of future results of
operations. Due to the foregoing factors, it is likely that in future quarters
the Company's operating results will be below the expectations of public market
analysts and investors. Such an event would have a material adverse effect on
the price of the Company's Common Stock. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations.'
 
UNCERTAINTIES RELATING TO PROPRIETARY RIGHTS
 

     The Company's success and its ability to compete effectively is dependent
in part upon its proprietary rights. The Company relies on a combination of
copyright, trademark and trade secret laws, employee and third-party
nondisclosure agreements and contractual provisions and other methods to protect
its proprietary rights. There can be no assurance that the measures taken by the
Company to protect its proprietary rights will be adequate to enforce its
proprietary rights, prevent misappropriation or that others will not obtain
similar or superior proprietary rights. 
 
     The Company believes that its trademarks are important to its success and
its competitive position. The Company has certain common law trademarks, a U.S.
federal trademark registration and several U.S. federal trademark applications
pending, some of which involve a derivation of the first two letters of the name
Gideon Gartner (e.g. GiGa). The word 'Giga' is commonly used in the IT field to
denote 109 power or a very large amount, and the Company may be unable to obtain
registrations for its trademarks in the U.S. or in other countries for that or
other reasons, and its rights to its trademarks may be narrow in scope.
Registrations for trademarks in the U.S. provide no protection for such
trademarks in other countries. The Company has received initial Office Actions
from the United States Patent and Trademark Office (the 'PTO') indicating that
certain of its applications for U.S. federal trademark registrations for the
GiGa Giga Information Group (and design)(Trademark) trademark have been refused
based on the PTO's citation of other Giga-formative trademarks covered by
pending Federal applications and a registration held by third parties. The
Company plans to respond to this initial refusal, but there can be no assurance
that it will obtain a favorable decision from the PTO Examiner or that one of
these third parties will not successfully oppose registration or use. The
Company is aware of a Benelux trademark registration for the trademark GIGA
MEDIA, the application for which was filed in the Benelux in advance of the
Company's application to register the GiGa Giga Information Group (and
design)(Trademark) trademark with the PTO and the equivalent office in the
Benelux. The Company is also aware that the owner of the Benelux trademark has
filed a lawsuit in the Netherlands against the Company alleging tradename
infringement, and requesting a court order requiring the Company to use an
alternative tradename to Giga Information Group. There can be no assurance that
the tradename infringement lawsuit pending against the Company will result in a
decision that is 
 
                                       10
favorable to the Company. In addition, there can be no assurance that other
parties (i) do not have superior rights to certain of the Company's trademarks,
(ii) will not oppose the Company's applications for registrations, (iii) will
not seek and obtain cancellation of any of the Company's trademark registrations
and (iv) will not allege that the Company's use of its trademarks infringes such
third parties trademarks. Failure by the Company to establish its rights to use
its trademarks, to overcome the PTO or other country's trademark office's
refusal of certain of its applications, or any loss of its rights to use its
trademarks, could result in damages payable to third parties, the loss of its
rights to prohibit others from using confusingly similar trademarks, the need to
invest substantial resources in building brand identity for a new trademark, and
the loss of market awareness and revenues to the Company.

DEPENDENCE ON THE INTERNET INFRASTRUCTURE
 
     The Company's success will depend, in large part, upon the continued
operation of the Internet infrastructure, such as a reliable network backbone
with the necessary speed, data capacity and security, for providing reliable
GigaWeb access. To the extent that the Internet continues to experience
increased numbers of users, frequency of use or increased bandwidth requirements
of users, there can be no assurance that the Internet infrastructure will
continue to be able to support the demands placed on it or that the performance
or reliability of the Internet will not be adversely affected. Furthermore, the
Internet has experienced a variety of outages and other delays as a result of
damage to portions of its infrastructure, and such outages and delays could
adversely affect the customer's ability to access GigaWeb. Moreover, critical
issues concerning the commercial use and government regulation of the Internet
(including security, taxation cost, ease of use and access, intellectual
property ownership, data privacy and other legal liability issues) remain
unresolved and could materially and adversely impact both the growth of the
Internet and the Company's business, financial condition and results of
operations.
 
RISK OF SYSTEM FAILURE
 
     The Company's Internet-based, information delivery interface, GigaWeb,
resides on a computer system located at the Company's headquarters. The
continuing and uninterrupted performance of GigaWeb is critical to the success
of the Company's business. Any system failure or capacity constraint that causes
interruptions in the Company's ability to service its customers could reduce
customer satisfaction and, if sustained or repeated, would reduce the
attractiveness of the Company's products and could have a material adverse
effect on the Company's business, results of operations and financial condition.
 
RISKS RELATED TO CONTENT
 
     As a publisher and distributor of original analyses and licensed
third-party content, the Company faces potential liability for defamation,
negligence, copyright and trademark infringement. Third party content includes
information created or provided by information service organizations, ExperNet
practitioners, and consultants retained by the Company and may be delivered in
writing, via the Internet or in print, or verbally to clients. There can be no
assurance that the Company will not be involved in litigation, which can be
expensive and time consuming, as a result of the creation and/or dissemination
of such content. Any such litigation, whether or not resulting in a judgment
requiring the payment of monetary damages, could have a material adverse affect
on the Company's business, financial condition, and results of operations.
 
IMPACT OF THE YEAR 2000 ISSUE
 
     The Company has commenced efforts to ensure that the computer systems and
applications upon which it relies for internal operations and external
communications with clients and others will function properly beyond 1999. The
Company presently believes that the computer systems and programs upon which it
relies for its internal operations and external communications, and which the
Company presently expects to use following December 31, 1999, are, or will be,

Year 2000 compliant. There can be no assurance, however, that further assessment
of the Company's internal systems and applications will not reveal that
additional efforts to assure Year 2000 compliance are necessary, and such
efforts may be costly and may divert the Company's resources from product
development or infrastructure improvement programs. Further, there can be no
assurance that the systems operated by other companies upon which the Company
relies will be Year 2000 compliant on a timely basis. The Company's business,
financial condition or results of operations could be materially adversely
affected by the failure of the Company's internal systems and applications to
properly operate or manage data beyond 1999.
 
                                       11
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS
 
     Certain of the Company's operations are located outside of the United
States and the Company plans to expand its international operations. The Company
believes there are certain risks inherent in international operation, including
changes in demand resulting from fluctuations in interest and exchange rates,
changes in trade policies, regulatory requirements, difficulties in staffing and
managing foreign sales operations and higher levels of taxation on foreign
income than domestic income. Expansion into new geographic territories requires
considerable management and financial resources and may negatively impact the
Company's near-term results of operations. Most of the Company's international
revenues are expected to be denominated in foreign currencies. Consequently, a
decrease in the value of a relevant foreign currency in relation to the United
States dollar, or an adverse development in any one of the foregoing factors,
could have a material adverse effect on the Company's business, financial
condition or results of operations. The Company does not currently hedge its
exposure to foreign currency fluctuations. The Company had revenues from
international operations of $3.2 million in 1996, $2.4 million in 1997 and
$700,000 in the period ended March 31, 1998.
 
CONTROL BY MANAGEMENT
 
     Upon the closing of the Offering, Mr. Gartner will beneficially own
approximately    % of the outstanding Common Stock (   % assuming the exercise
of the Underwriters' over-allotment option) and Mr. Gartner, together with the
Company's other executive officers and directors, including entities affiliated
with them, will beneficially own approximately    % of the outstanding Common
Stock (   % assuming the exercise of the Underwriters' over-allotment option).
As a result, these stockholders will be able to exercise control over matters
requiring stockholder approval, including the election of directors and the
approval of significant corporate matters such as transactions which may lead to
a change of control of the Company. The effects of such control could be to
delay or prevent a change of control of the Company unless the terms are
approved by such stockholders, which could adversely affect the market price of
the Company's Common Stock. See 'Management' and 'Principal Stockholders.'
 
ABSENCE OF PUBLIC MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE
 
     Prior to the Offering, there has been no public market for the Company's
Common Stock. There can be no assurance that, following the Offering, an active

trading market for the Common Stock will develop or be sustained or that the
market price of the Common Stock will not decline below the initial public
offering price. The initial public offering price will be determined through
negotiations between the Company and the Representatives of the Underwriters and
will not necessarily reflect the market price of the Common Stock after the
Offering. See 'Underwriting' for a discussion of the factors to be considered in
determining the initial public offering price. The stock market in recent years
has experienced extreme price and volume fluctuations that have particularly
affected market prices of many growth-oriented companies in industries similar
or related to that of the Company and that have often been unrelated or
disproportionate to the operating performance of such companies. The market
price of the Common Stock could also be subject to significant fluctuations in
response to, and may be adversely affected by, variations in quarterly results,
changes in earnings estimates or other actions by analysts and earnings or other
announcements of the Company's customers or competitors as well as other
factors.
 
IMMEDIATE AND SUBSTANTIAL DILUTION
 
     Purchasers of shares of Common Stock offered hereby will experience
immediate and substantial dilution in the net tangible book value of the Common
Stock. Additional dilution will occur upon exercise or conversion of outstanding
stock options or warrants. See 'Dilution' and 'Shares Eligible for Future Sale.'
 
SHARES ELIGIBLE FOR FUTURE SALE
 
     The                shares offered hereby will be eligible for sale in the
public market immediately following the effective date of the Registration
Statement;            shares will become eligible for sale in the public market
90 days after the effective date of the Registration Statement; and the
remaining outstanding shares will become eligible for sale in the public market
at various dates beginning 180 days after the effective date of the Registration
Statement, approximately         of which will be deemed 'restricted securities'
under the Securities Act of 1933, as amended (the 'Securities Act'), and, as
such, will be subject to restrictions on the timing, manner and volume of sales
of such shares. Holders of                      shares (including shares
 
                                       12
issuable upon exercise of warrants) have contractual rights to request to have
their shares registered with the Securities and Exchange Commission (the
'Commission') for resale to the public beginning June 30, 1998. In addition,
within 180 days after the effective date of the Registration Statement, the
Company intends to file a registration statement covering the shares of Common
Stock issued or reserved for issuance under the Company's 1995 Stock
Option/Stock Issuance Plan, as amended (the '1995 Stock Plan'), 1996 Stock
Option Plan (the '1996 Option Plan') and 1997 Director Option Plan (the
'Director Plan'), and upon such filing any shares subsequently issued under such
plans will be eligible for sale in the public market, subject to Rule 144
compliance in the case of affiliates of the Company. See 'Shares Eligible for
Future Sale' and 'Description of Capital Stock.'
 
     The Company and its executive officers, directors and stockholders have

agreed that, subject to certain limited exceptions, for a period ending 180 days
after the consummation of the Offering, without the prior written consent of
Friedman, Billings, Ramsey & Co., Inc., they will not, directly or indirectly,
offer, pledge, sell, offer to sell, contract to sell, grant any option to
purchase or otherwise sell, dispose of, make any short sale of, loan or grant
any rights with respect to any shares of Common Stock or any options or warrants
to purchase any shares of Common Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock. The stockholders who
have agreed to these restrictions will hold in the aggregate            shares
of Common Stock, representing approximately       % of the shares of Common
Stock outstanding immediately after the consummation of the Offering. See
'Underwriting' and 'Shares Eligible for Future Sale.'
 
     The sale of a substantial number of shares held by existing stockholders,
whether pursuant to a subsequent public offering or otherwise, or the perception
that such sales could occur, could adversely affect the market price of the
Common Stock and could materially impair the Company's future ability to raise
capital through an offering of equity securities. See 'Shares Eligible for
Future Sale' and 'Underwriting.'
 
EFFECT OF ANTI-TAKEOVER PROVISIONS
 
     The Restated Certificate will be filed upon the closing of the Offering,
pursuant to which the Company's Board of Directors (the 'Board of Directors')
will have the authority to issue up to 5,000,000 shares of Preferred Stock and
to determine the price, rights, conversion ratios, preferences and privileges of
those shares without any further vote or action by the Company's stockholders.
The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of such Preferred Stock. Any
such issuance, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company and could negatively impact the voting power or other
rights of the holders of Common Stock. In addition, such Preferred Stock may
have other rights, including economic rights senior to the Common Stock, and, as
a result, the issuance thereof could have a material adverse effect on the
market value of the Common Stock. The Restated Certificate will provide for a
classified Board of Directors and will permit a member of the Board of Directors
to be removed for cause only upon the affirmative vote of holders of a majority,
or without cause only upon the affirmative vote of at least two-thirds, of the
shares of capital stock of the Company entitled to vote. Furthermore, the
Company is subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law that prohibit the Company from engaging in a
'business combination' with an 'interested stockholder' for a period of three
years after the date of the transaction in which the person first becomes an
'interested stockholder,' unless the business combination is approved in a
prescribed manner. The application of Section 203 could also have the effect of
delaying or preventing a change of control of the Company. Certain other
provisions of the Restated Certificate may have the effect of delaying or
preventing changes of control or management of the Company, which could
adversely affect the market price of the Company's Common Stock. See
'Description of Capital Stock--Delaware Law and Certain Charter and By-Law
Provisions.'
 

                                       13
USE OF PROCEEDS
 
     The net proceeds to Giga from the sale of the             shares of Common
Stock offered hereby are estimated to be $           ($           if the
Underwriters' over-allotment option is exercised in full) after deducting the
underwriting discounts and commissions and estimated offering expenses payable
by the Company and assuming an initial public offering price of $           per
share.
 
     A portion of the net proceeds of the Offering will be used to repay in full
(the 'Bridge Repayment') the Bridge Notes in the aggregate principal amount of
$10 millon issued in April 1998, which notes accrue interest at the rate of 12%
per annum. The proceeds of the issuance of the Bridge Notes were used for
general corporate purposes, including the repayment in full of the remaining
$1.2 million aggregate principal amount of convertible notes, of which a note in
the principal amount of $200,000 was held by a director and former officer. See
'Underwriting' and Notes 11 and 20 to the Consolidated Financial Statements. The
balance of the proceeds will be used for general corporate purposes, including
capital expenditures and working capital. Pending such use, the net proceeds
will be invested in short-term, investment-grade, interest-bearing obligations.
 
                                DIVIDEND POLICY
 
     The Company has never declared or paid any cash dividends on its capital
stock. The Company currently intends to retain earnings, if any, to support its
growth strategy and does not anticipate paying cash dividends in the foreseeable
future. Payment of future dividends, if any, will be at the discretion of the
Board of Directors after taking into account various factors including the
Company's financial condition, operating results, current and anticipated cash
needs and plans for expansion.
 
                                       14
CAPITALIZATION
 
     The following table sets forth as of March 31, 1998 (i) the actual
capitalization of the Company, (ii) the pro forma capitalization of the Company
to give effect to the Series D Financing and the Preferred Conversion and (iii)
the pro forma capitalization of the Company as adjusted to give effect to (A)
the sale of             shares of Common Stock offered by the Company hereby at
an assumed initial public offering price of $           per share after
deducting the underwriting discount and estimated offering expenses payable by
the Company and (B) the Bridge Repayment. This information should be read in
conjunction with the Company's Consolidated Financial Statements and Notes
thereto appearing elsewhere in this Prospectus.
MARCH 31, 1998
                                                                           ------------------------------------------
                                                                                                        PRO FORMA AS
                                                                            ACTUAL     PRO FORMA(1)     ADJUSTED(1)
                                                                           --------    ------------    --------------
                                                                                (IN THOUSANDS, EXCEPT SHARE AND
                                                                                        PER SHARE DATA)
Long term debt, less current portion....................................   $    848      $    848         $    848
                                                                           --------    ------------    --------------
Stockholders' Equity:
  Convertible Preferred Stock...........................................         12            --               --
  Preferred Stock, $.001 par value; 5,000,000 shares authorized; none
     issued or outstanding on an actual, pro forma or pro forma as
     adjusted basis.....................................................         --            --               --
  Common Stock, $.001 par value, 50,000,000 shares authorized (actual);
     60,000,000 shares authorized (pro forma and pro forma as adjusted); 
     2,124,142 shares issued and outstanding (actual);
     6,810,926 shares issued and outstanding (pro forma);
                shares issued and outstanding (pro forma as
     adjusted)(2).......................................................          6            18
  Additional paid-in capital............................................     42,584        44,584
  Deferred Compensation.................................................     (1,229)       (1,229)          (1,229)
  Accumulated deficit...................................................    (54,736)      (54,736)         (54,736)
  Cumulative translation adjustments....................................        613           613              613
                                                                           --------    ------------    --------------
     Total stockholders' equity.........................................    (12,750)      (10,750)
                                                                           --------    ------------    --------------
     Total capitalization...............................................   $(11,902)     $ (9,902)        $
                                                                           --------    ------------    --------------
                                                                           --------    ------------    --------------
------------------
(1) Based on shares outstanding as of March 31, 1998. Excludes (i) 1,316,197
    shares of Common Stock issuable upon exercise of options outstanding as of
    March 31, 1998, with a weighted average exercise price of $2.43 per share;
    (ii) 873,273 shares of Common Stock reserved for issuance, as of March 31,
    1998 under the Company's stock plans; (iii) 166,666, 35,959 and 654,432  
    shares of Common Stock issuable upon exercise of warrants outstanding as of
    March 31, 1998, with exercise prices of $3.00, $13.875 and $13.50 per share,
    respectively; and (iv) 35,330 shares of Common Stock issued by the Company
    to employees after March 31, 1998. See 'Management--Executive Compensation'
    and 'Description of Capital Stock.'
 
                                       15
DILUTION
 
     The pro forma deficit in net tangible book value of the Company at March
31, 1998, was $(           ) million or $(           ) per share. Pro forma net
tangible book value per share represents the amount of total assets, excluding
intangibles, less total liabilities as of March 31, 1998, divided by the number
of shares of Common Stock outstanding on a pro forma basis after giving effect
to the Series D Financing and the Preferred Conversion. After giving effect to
the receipt of the net proceeds from the sale of the            shares of Common
Stock offered by the Company hereby and after deducting the estimated
underwriting discount and offering expenses to be paid by the Company, the pro
forma net tangible book value of the Company at March 31, 1998 would have been
$           million or $           per share. This represents an immediate
increase in net tangible book value of $           per share of Common Stock to
existing stockholders and an immediate dilution of approximately $           per
share to new investors purchasing shares in the Offering. The following table
illustrates the per share dilution:
Proposed initial public offering price per share........................              $
  Pro forma net tangible book deficit per share before the Offering.....   $(     )
  Increase per share attributable to new investors......................
                                                                           -------
Pro forma net tangible book value per share after the Offering..........
                                                                                      ----------
Dilution per share to new investors.....................................              $
                                                                                      ----------
                                                                                      ----------
The following table sets forth on a pro forma basis as of March 31, 1998,
the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company and the average price paid per share by the
existing stockholders and by the investors purchasing shares of Common Stock
offered hereby (at an assumed initial public offering price of $           per
share):
SHARES PURCHASED      TOTAL CONSIDERATION
                                                          --------------------    -------------------    AVERAGE PRICE
                                                           NUMBER      PERCENT     AMOUNT     PERCENT      PER SHARE
                                                          ---------    -------    --------    -------    -------------
Existing stockholders..................................                      %    $                 %     $
New investors..........................................                      %    $                 %     $
                                                          ---------    -------    --------    -------
     Total.............................................                 100.0%    $            100.0%
                                                          ---------    -------    --------    -------
                                                          ---------    -------    --------    -------
The foregoing assumes no exercise of any outstanding stock options or
warrants to purchase shares of Common Stock. As of March 31, 1998, there were
outstanding (i) 1,316,197 shares of Common Stock issuable upon exercise of
options at a weighted average exercise price of $2.43 per share, (ii) 166,666,
35,959, and 654,432 shares of Common Stock issuable upon exercise of warrants
with exercise prices of $3.00, $13.875 and $13.50 per share, respectively. After
March 31, 1998, 35,330 shares of Common Stock were issued by the Company to
employees. In addition, as of March 31, 1998, 873,273 shares of Common Stock
were reserved for future issuance pursuant to the Company's stock plans. To the
extent that the outstanding options and warrants are exercised at prices lower
than the initial public offering price, there will be further dilution to new
investors. See 'Management--Executive Compensation,' 'Certain Transactions' and
'Description of Capital Stock.'
 
                                       16
SELECTED CONSOLIDATED FINANCIAL DATA
 
     The following selected consolidated financial data are derived from the
Consolidated Financial Statements of the Company and the combined financial
statements of BIS Strategic Decisions, Inc. and its five foreign affiliates
(collectively, 'BIS' or the 'Predecessor Companies'). For the period January 1
to December 15, 1993, the operations comprising BIS were those of wholly-owned
subsidiaries of NYNEX Corporation ('NYNEX'). For the period December 16 to
December 31, 1993, the year ended December 31, 1994 and the period January 1 to
April 5, 1995, the operations of BIS were those of wholly-owned subsidiaries of
Friday Holdings, L.P. ('Friday Holdings'). Because of the impact to the
statements of operations of the revaluation of the assets and liabilities in
connection with the acquisitions and the application of different accounting
methods, the results of operations of BIS for the periods under NYNEX and Friday
Holdings ownership are not comparable with each other or with those reported by
the Company.
 
     The Consolidated Financial Statements of the Company as of December 31,
1996 and 1997 and for the period from March 17, 1995 to December 31, 1995 and
the years ended December 31, 1996 and 1997 included elsewhere in this Prospectus
have been audited by Coopers & Lybrand L.L.P., independent accountants. The
consolidated financial statements of the Company as of March 31, 1998 and for
the three months ended March 31, 1997 and 1998 included elsewhere in this
Prospectus are unaudited, however, in the opinion of management, such unaudited
data include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the information included therein. The
results of operations for the period March 17, 1995 to December 31, 1995 and the
three months ended March 31, 1997 and 1998 are not necessarily indicative of the
results for an entire fiscal year or any other interim period. The combined
financial statements of the Predecessor Companies for the period January 1, 1995
to April 5, 1995 included elsewhere in this Prospectus have been audited by
Coopers & Lybrand L.L.P. The combined financial statements of BIS as of December
31, 1993 and 1994 and for the periods January 1, 1993 to December 15, 1993 and
December 16, 1993 to December 31, 1993 and for the year ended December 31, 1994
are derived from unaudited combined financial statements not included in this
Prospectus, however, in the opinion of management, such unaudited data include
all adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of the information included therein. The selected historical
financial data should be read in conjunction with 'Management's Discussion and
Analysis of Financial Condition and Results of Operations,' and the Consolidated
Financial Statements and notes thereto appearing elsewhere in this Prospectus.
 
                                       17
COMPANY
                                                                                                     ----------------------
                                                PREDECESSOR COMPANIES                                                YEAR
                                 ----------------------------------------------------   PRO FORMA                   ENDED
                                  JANUARY 1    DECEMBER 16       YEAR      JANUARY 1       YEAR        MARCH 17    DECEMBER
                                      TO            TO          ENDED          TO         ENDED           TO         31,
                                 DECEMBER 15,  DECEMBER 31,  DECEMBER 31,   APRIL 5,   DECEMBER 31,  DECEMBER 31,  --------
                                     1993          1993          1994         1995       1995(1)         1995        1996
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
                                                      (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Revenues:
  Continuous information
    services....................   $     --      $     --      $     --      $   --      $     --      $     --    $  3,149
  Other services................      5,815            91         7,366       1,833         8,543         5,517       6,043
  Publications..................      1,311            51           800         283         1,725         1,442         946
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
    Total revenues..............      7,126           142         8,166       2,116        10,268         6,959      10,138
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
Costs and expenses:
  Cost of services..............      4,268           267         5,143       1,182         7,172         4,707      12,336
  Cost of publications..........        726            64           446         240           586           346         790
  Sales and marketing...........      1,448            92         1,438         167           972         1,016       6,706
  Research and development......         --            --            --          --           348           348       1,789
  General and administrative....      3,431           140         4,027       1,047         6,934         5,760       9,739
  Depreciation and
    amortization................        613            32         2,943         215         1,964         1,387       2,391
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
    Total costs and expenses....     10,486           595        13,997       2,851        17,976        13,564      33,751
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Operating loss................     (3,360)         (453)       (5,831)       (735)       (7,708)       (6,605)    (23,613)
Interest income.................        100             7            96          23           274           246         515
Interest expense................        (38)           (4)          (26)         (4)         (134)         (100)        (95)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Loss from continuing
    operations before income
    taxes (benefit).............     (3,298)         (450)       (5,761)       (716)       (7,568)       (6,459)    (23,193)
Income tax benefit (charge).....     (1,035)           --        (1,098)       (213)       (1,311)       (1,093)       (491)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Loss from continuing
    operations..................     (2,263)         (450)       (4,663)       (503)       (6,257)       (5,366)    (22,702)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
Discontinued operations:
  Income (loss) from the
    discontinued BIS market
    research business (net of
    tax effect).................      2,972            44        (1,469)        597         2,097         1,490         (79)

  Income (loss) from the
    discontinued Shrapnel
    business (net of tax
    effect).....................         70           (12)         (401)         54           154           154        (134)
  Income (loss) on disposal of
    discontinued BIS market
    research business (net of
    tax effect).................         --            --            --          --            --            --      (2,315)
  Income (loss) on disposal of
    discontinued Shrapnel
    business (net of tax
    effect).....................         --            --            --          --            --            --        (160)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Income (loss) from
    discontinued operations.....      3,042            32        (1,870)        651         2,251         1,644      (2,688)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
  Net income (loss).............   $    779      $   (418)     $ (6,533)     $  148      $ (4,006)     $ (3,722)   $(25,390)
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
                                 ------------  ------------  ------------  ----------  ------------  ------------  --------
Historical results per common
  and common equivalent share:
    Loss from continuing
      operations................
    Income (loss) from
      discontinued operations...
    Income (loss) from disposal
      of discontinued
      operations................
    Net income (loss)...........
Historical weighted average
  common and common equivalent
  shares outstanding............
Pro forma results per common and
  common equivalent share:
    Loss from continuing
      operations................
    Income (loss) from
      discontinued operations...
    Income (loss) from disposal
      of discontinued
      operations................
    Net income (loss)...........
Pro forma weighted average
  common and common equivalent
  shares outstanding............
COMPANY
                                  -----------------------------------
                                    Year      
                                    Ended     
                                   December      THREE MONTHS ENDED
                                     31,             MARCH 31,
                                  ----------  ------------------------
                                     1997        1997          1998
                                  ----------  ----------    ----------
STATEMENT OF OPERATIONS DATA:
Revenues:
  Continuous information
    services....................  $   14,600  $    2,570    $    6,804
  Other services................       4,715       1,276         1,693
  Publications..................         344         180            55
                                  ----------  ----------    ----------
    Total revenues..............      19,659       4,026         8,552
                                  ----------  ----------    ----------
Costs and expenses:
  Cost of services..............      12,477       3,202         4,391
  Cost of publications..........         174          75            71
  Sales and marketing...........      19,617       4,158         5,781
  Research and development......       1,975         659           339
  General and administrative....       6,419       1,061         1,339
  Depreciation and
    amortization................       2,810         634           385
                                  ----------  ----------    ----------
    Total costs and expenses....      43,472       9,789        12,306
                                  ----------  ----------    ----------
  Operating loss................     (23,813)     (5,763)       (3,754)
Interest income.................         277          98            37
Interest expense................        (235)        (17)          (86)
                                  ----------  ----------    ----------
  Loss from continuing
    operations before income
    taxes (benefit).............     (23,771)     (5,682)       (3,803)
Income tax benefit (charge).....        (641)          7             4
                                  ----------  ----------    ----------
  Loss from continuing
    operations..................     (23,130)     (5,689)       (3,807)
                                  ----------  ----------    ----------
Discontinued operations:
  Income (loss) from the
    discontinued BIS market
    research business (net of
    tax effect).................          --          --            --
  Income (loss) from the
    discontinued Shrapnel
    business (net of tax
    effect).....................          --          --            --

  Income (loss) on disposal of
    discontinued BIS market
    research business (net of
    tax effect).................       1,101          --            --
  Income (loss) on disposal of
    discontinued Shrapnel
    business (net of tax
    effect).....................         212          --
                                  ----------  ----------    ----------
  Income (loss) from
    discontinued operations.....       1,313          --            --
                                  ----------  ----------    ----------
  Net income (loss).............  $  (21,817) $   (5,689)   $   (3,807)
                                  ----------  ----------    ----------
                                  ----------  ----------    ----------
Historical results per common
  and common equivalent share:
    Loss from continuing
      operations................      (11.16)                    (1.80)
    Income (loss) from
      discontinued operations...          --                        --
    Income (loss) from disposal
      of discontinued
      operations................        0.63                        --
    Net income (loss)...........      (10.53)                    (1.80)
Historical weighted average
  common and common equivalent
  shares outstanding............   2,072,837                 2,115,837
Pro forma results per common and
  common equivalent share:
    Loss from continuing
      operations................       (3.42)                    (0.56)
    Income (loss) from
      discontinued operations...          --                        --
    Income (loss) from disposal
      of discontinued
      operations................        0.19                        --
    Net income (loss)...........       (3.23)                    (0.56)
Pro forma weighted average
  common and common equivalent
  shares outstanding............   6,759,621                 6,802,621
18
PREDECESSOR COMPANIES                    COMPANY
                                                      --------------------------  ---------------------------------------
                                                             DECEMBER 31,                      DECEMBER 31,
                                                      --------------------------  ---------------------------------------
                                                          1993          1994          1995         1996          1997    
                                                      ------------  ------------  ------------  ----------   ------------
                                                                         (IN THOUSANDS)
BALANCE SHEET DATA:                                                                                                      
Cash and cash equivalents............................   $  2,639      $  1,693      $ 16,876      $8,286       $  3,539  
Working capital (deficit)............................      1,905        (1,503)       11,549         113        (10,196) 
Total assets.........................................     10,181         7,509        24,833      19,679         23,023  
Deferred revenues....................................        762         1,232         2,201       6,832         20,604  
Long term debt, less current portion.................         --            --         1,437       1,511            937  
Total stockholders' equity...........................      6,942         2,017        14,972       1,659         (9,090)
COMPANY
                                                                          ----------- 
                                                                           MARCH 31,
                                                                              1998
                                                                          ------------
BALANCE SHEET DATA:                                                     
Cash and cash equivalents..............................................     $  1,753
Working capital (deficit)..............................................      (13,821)
Total assets...........................................................       15,673
Deferred revenues......................................................       19,458
Long term debt, less current portion...................................          848
Total stockholders' equity.............................................      (12,750)
------------------
(1) The pro forma results reflect the results of operations as if the
    acquisitions of BIS and ExperNet had occurred on January 1, 1995. See Note 3
    to the Consolidated Financial Statements.
 
                                       19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
ORGANIZATION OF THE COMPANY AND FINANCIAL STATEMENT PRESENTATION
 
     The Company was organized on March 17, 1995. In April 1995, the Company
acquired BIS as part of its strategic plan to accelerate the development of its
Continuous Information Services business and to obtain the marketing, sales and
other corporate infrastructures and certain personnel of BIS. In July 1995, the
Company acquired a majority equity interest in ExperNet Corporation ('ExperNet
Corporation'), which was owned by Gideon I. Gartner and David L. Gilmour, each
at the time, a director and officer of the Company, and, in December 1995,
acquired the remaining equity interest.
 
     This Prospectus includes the financial statements of BIS, as the
predecessor to the Company, through the period ended April 5, 1995, the date of
acquisition by the Company. The period January 1 to December 15, 1993 is shown
separately for the Predecessor Companies because of a prior acquisition by an
unrelated entity on December 16, 1993. The periods covered by the financial
statements of the Company commence on March 17, 1995, the date of its
incorporation, and include the results of operations of BIS from April 5, 1995
and the results of operations of ExperNet Corporation from July 6, 1995, their
respective dates of acquisition. Results of operations of ExperNet Corporation
are not included in results of Predecessor Companies, which are solely the
results of BIS. The acquisition of BIS was accounted for under the purchase
method; accordingly, acquired assets were recorded at their estimated fair
values and related goodwill of approximately $3.1 million was also recorded and
was amortized over two years. The acquisition of ExperNet Corporation was also
accounted for as a purchase with the related goodwill of approximately $1.4
million amortized over five years. During 1997, the unamortized portion of the
goodwill relating to the ExperNet acquisition was written off, resulting in a
charge to amortization expense of $1,025,000.
 
     In June 1996, the Company discontinued the BIS market research business.
Results of operations from the discontinued BIS market research business are
reflected as discontinued operations in the Company's financial statements. The
Company continues to generate revenues from the events businesses acquired as
part of the acquisition of BIS, which are reflected in the statements of
operations as Other Services. As a result of the discontinuance of the BIS
market research business, Giga recorded a charge, net of taxes, of approximately
$2.3 million in the year ended December 31, 1996. The Company entered into
agreements with two unrelated parties which have assumed responsibility for
fulfillment of the Company's obligations to former BIS customers in exchange for
a share of the deferred revenues recorded by Giga with respect to such
customers. In 1997, the Company recorded a gain of approximately $1.1 million
comprised mainly of a reversal of the provision for future lease commitments and
related expenses for two facilities in England and the provision which was
established for refunds to potentially dissatisfied customers. The Company does
not consider the historical results of BIS operations which have been
discontinued to be meaningful or indicative of the Company's future results of
operations.
 

     In December 1996, the Company discontinued its econometric forecasting
business based in Australia in anticipation of selling the business to local
management. The Company recorded a provision of $160,000 in 1996 for anticipated
operating losses prior to the completion of the sale by the Company. In August
1997, the operations were sold to local management for approximately $293,000
and a gain of approximately $202,000, net of taxes was recorded and is reflected
in disposal of discontinued operations. Results of operations from the
discontinued econometric forecasting business are included among Discontinued
Operations in the Company's financial statements.
 
OVERVIEW
 
     Giga provides objective analyses and advice relating to developments and
trends in the IT industries to assist its customers in making technology-related
decisions. The Company's four principal products and services are (i) Advisory
Service, (ii) IT Practice Services, (iii) Continuous Advisory Consulting and
(iv) Events and Publications. The Company provides its services primarily
through GigaWeb, its intelligent Internet-based information delivery interface.
 
     The Company introduced its Advisory Service and GigaWeb in April 1996. In
July 1996, the Company introduced its IT Practice Services. Advisory Consulting
was introduced in September 1997. The Company's
 
                                       20
Events and Publications product line was acquired with the acquisition of BIS in
April 1995. The Company expects that revenues from its Continuous Information
Services will continue to increase as a percentage of its total revenues.
 
     For financial reporting purposes, revenues from (i) Advisory Service, IT
Practice Services and Continuous Advisory Consulting are aggregated into
Continuous Information Services, (ii) Events and other services, principally
consulting, are aggregated into Other Services and (iii) Publications are listed
separately.
 
     The Company's Continuous Information Services are typically sold through
annual contracts that generally provide for payment at the commencement of the
contract period. Amounts received in advance of services provided are reflected
in the Company's financial statements as deferred revenues and are recognized
monthly on a pro rata basis over the term of the contract. Revenues from Other
Services are recognized as follows: events as they occur and consulting as such
services are performed. Revenues from Publications are recognized when
publications are delivered.
 
     The Company believes that a leading measure of the volume of its CIS
business is the annualized value ('Annualized Value') of its Continuous
Information Services agreements in effect at a given point in time. The Company
calculates Annualized Value each month as the cumulative annualized subscription
value payable under the agreements without regard to commencement date, duration
or risk of cancellation. The Company also measures its performance on the basis
of Net Annualized Value Increase ('NAVI') which is calculated on the basis of
new agreements plus upgrades, net of downgrades and cancellations. The sum of
all past NAVI equals Annualized Value. Historically, a substantial portion of

NAVI for a given year is generated by the Company in the last two calendar
quarters, and particularly in the last month of the last quarter. The following
table sets forth the Annualized Value and NAVI for the years ended December 31,
1996 and 1997 and the three months ended March 31, 1997 and 1998.
UNAUDITED
                                                                          ---------------------------------------
                                                                             YEARS ENDED       THREE MONTHS ENDED
                                                                            DECEMBER 31,           MARCH 31,
                                                                          -----------------    ------------------
                                                                           1996      1997       1997       1998
                                                                          ------    -------    -------    -------
                                                                                      (IN THOUSANDS)
Beginning Annualized Value.............................................   $   --    $ 9,339    $ 9,339    $26,619
Net Annualized Value Increase..........................................    9,339     17,280      2,384      2,878
                                                                          ------    -------    -------    -------
Ending Annualized Value................................................   $9,339    $26,619    $11,723    $29,497
                                                                          ------    -------    -------    -------
                                                                          ------    -------    -------    -------
A majority of the Company's annual contracts renew automatically unless the
customer cancels the subscription. The Company's experience is that a
substantial portion of customers renew expiring contracts for an equal or
greater level of total CIS fees each year. As of March 31, 1998, approximately
66% of Giga's customers had renewed one or more contracts for Giga's services in
the past twelve months. The Company believes that a direct comparison of its
renewal rates and the renewal rates of its major competitors may not be
meaningful due in part to the Company's limited operating history and its
Advisory Service model (the focus of which is a unified, integrated approach
with fewer contracts/services per customer), in contrast to the multiple-service
model of the Company's major competitors.
 
     The Company anticipates that Annualized Value, at a point in time, will be
a reliable indicator of the minimum next twelve months' CIS revenues. However,
the Company's current renewal rate is not necessarily indicative of the rate of
retention of the Company's revenue base, and Annualized Value at any given time
may not be indicative of future revenues or cash flows, especially if the rate
of renewal of existing agreements or the timing of new agreements were to
significantly change during the following 12 months compared to historical
experience. There can be no assurance that the Company will be able to sustain
or increase its current renewal rate or that Annualized Value will continue to
grow.
 
     The Company's operating expenses consist of cost of services, cost of
publications, selling and marketing, research and development, general and
administrative, and depreciation and amortization. Cost of services consists
primarily of the direct costs associated with the delivery of the Company's
Continuous Information Services and other services including personnel expenses
for analysts and other personnel, direct expenses for events and conferences,
and royalties to third party information providers. Cost of publications

consists of expenses to create, print and distribute publications. Sales and
marketing expenses include personnel expenses,
 
                                       21
promotional expenses, and sales commissions. Sales commissions are typically
deferred when paid and expensed as the related revenue is recognized. Research
and development expenses consist of personnel, consulting and other expenses to
develop, enhance and operate GigaWeb. General and administrative expenses are
primarily personnel costs and fees for professional services supporting the
administrative functions of the Company.
 
     Since its inception, the Company has incurred substantial costs to develop
its Continuous Information Services, establish its GigaWeb system, build a
management team and recruit, employ and train research analysts, sales personnel
and support staff for its business. The Company expects to incur significant
losses through at least fiscal 1998 as the Company expands and develops its
services and products.
 
     The Company has incurred substantial tax loss carryforwards since
inception, and acquired tax loss carryforwards with its acquisition of BIS, all
of which aggregate to approximately $51.8 million at March 31, 1998. Due to the
magnitude of these existing tax loss carryforwards, the continuing anticipated
losses through at least 1998 and the substantial uncertainties associated with
its business, the Company is unable to conclude that it is more likely than not
that the deferred tax associated with these tax loss carryforwards will be
realized. Accordingly, this deferred tax asset has been fully reserved. This
valuation allowance will be reduced and the deferred tax asset will be
recognized when and if it becomes more likely than not that the deferred tax
asset will be realized.
 
RESULTS OF OPERATIONS
 
     The following table sets forth certain financial data as a percentage of
total revenues for the periods indicated.
PRO FORMA                        THREE MONTHS
                                                                   ------------      YEAR ENDED       ENDED MARCH
                                                                    YEAR ENDED      DECEMBER 31,          31,
                                                                   DECEMBER 31,    --------------    -------------
                                                                       1995        1996     1997     1997     1998
                                                                   ------------    -----    -----    -----    ----
Revenues:
  Continuous information services ..............................         --           31%      74%      64%     79%
  Other services................................................         83%          60       24       32      20
  Publications..................................................         17            9        2        4       1
                                                                     ------        -----    -----    -----    ----
    Total revenues..............................................        100          100      100      100     100
                                                                     ------        -----    -----    -----    ----

Costs and expenses:
  Cost of services..............................................         70          122       63       80      51
  Cost of publications..........................................          6            8        1        2       1
  Sales and marketing...........................................          9           66      100      103      68
  Research and development......................................          3           18       10       16       4
  General and administrative....................................         68           96       33       26      16
  Depreciation and amortization.................................         19           24       14       16       5
                                                                     ------        -----    -----    -----    ----
    Total costs and expenses....................................        175          333      221      243     144
                                                                     ------        -----    -----    -----    ----
  Loss from operations..........................................        (75)        (233)    (121)    (143)    (44)
Interest income (expense), net..................................          1            4        0        2      (1)
                                                                     ------        -----    -----    -----    ----
  Loss from continuing operations before income taxes...........        (74)        (229)    (121)    (141)    (45)
Income tax (benefit) charge.....................................        (13)          (5)      (3)       0       0
                                                                     ------        -----    -----    -----    ----
  Loss from continuing operations...............................        (61)        (224)    (118)    (141)    (45)
  Income (loss) from discontinued operations....................         22          (27)       7       --      --
                                                                     ------        -----    -----    -----    ----
  Net loss......................................................        (39)%       (250)%   (111)%   (141)%   (45)%
                                                                     ------        -----    -----    -----    ----
                                                                     ------        -----    -----    -----    ----
In general, the decreases in the various operating expenses as a percentage
of total revenues are primarily due to leveraging those expenses over increased
revenues derived from a growing customer base.
 
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
 
     Revenues. Total revenues increased 112% to $8.6 million for the three
months ended March 31,1998 from $4.0 million for the same period in 1997. The
increase in total revenues was primarily due to the increase in revenues from
Continuous Information Services.
 
     Revenues from Continuous Information Services increased 165% to $6.8
million for the three months ended March 31, 1998 from $2.6 million for the same
period in 1997. This increase in revenues was primarily due to growing market
acceptance of Giga's services and continued expansion of the Company's sales
force.
 
                                       22
Revenues from Other Services increased 33% to $1.7 million for the three
months ended March 31, 1998 from $1.3 million for the same period in 1997. The
increase was primarily due to higher revenues from the planned expansion of the
Company's events and conferences activities net of a decrease in consulting
revenues associated with the phase-out of certain consulting activities.
 
     Revenues from Publications decreased 69% to $55,000 for the three months
ended March 31, 1998 from $180,000 for the same period in 1997. The decrease was
due to a de-emphasis on this business activity.
 

     Cost of services. Cost of services increased 37% to $4.4 million for the
three months ended March 31, 1998 from $3.2 million for the same period in 1997.
The increase in costs was primarily due to the expansion of the analyst staff
and other expenses associated with providing Continuous Information Services.
 
     Cost of publications. Cost of publications decreased 5% to $71,000 for the
three months ended March 31, 1998 from $75,000 for the same period in 1997. The
decrease was primarily attributable to a continued reduction in the number of
publications produced.
 
     Sales and marketing. Sales and marketing expenses increased 39% to $5.8
million for the three months ended March 31, 1998 from $4.2 million for the same
period in 1997. The increase was principally due to the continued expansion of
the Company's direct sales organization and higher sales commission expense from
increased revenues.
 
     Research and development. Research and development expenses decreased 49%
to $339,000 for the three months ended March 31, 1998 from $659,000 for the same
three-month period in 1997. The decrease was primarily due to the completion of
the development of the basic functionality of GigaWeb in 1997.
 
     General and administrative. General and administrative expenses increased
26% to $1.3 million for the three months ended March 31, 1998 from $1.1 million
for the same period in 1997. The increase in expense was primarily due to
enhancements to infrastructure such as internal systems, additional personnel
and other items to support the Company's growth.
 
     Depreciation and amortization. Depreciation and amortization expense
decreased 39% to $385,000 for the three months ended March 31, 1998 from
$634,000 for the same period in 1997. The decrease was primarily due to the
Company's practice in 1997 to rent, instead of purchase, computer equipment.
 
     Interest income and expense. Interest income decreased to $37,000 for the
three months ended March 31, 1998 from $98,000 for the same period in 1997 due
to lower cash balances available for investment. Interest expense increased to
$86,000 from $17,000 for the same period in 1997 due to a long-term equipment
financing loan agreement entered into by the Company in June 1997.
 
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 AND 1995 (PRO FORMA)
 
     For purposes of the following discussion, the results for the year ended
December 31, 1995 are presented on a pro forma basis to reflect (i) the
operations of the Predecessor Companies from January 1, 1995 to April 5, 1995,
(ii) the operations of the Company from March 17, 1995 to December 31, 1995 and
(iii) the operations of ExperNet and the amortization of goodwill incurred in
connection with the acquisition of the Predecessor Companies as though such
acquisitions occurred on January 1, 1995. The results of the BIS market research
business and the Australian econometric forecasting operation have been shown as
discontinued operations. The Company's activities from March 17, 1995 to April
5, 1995 were principally devoted to the acquisition of the Predecessor
Companies.
 
     Revenues. Total revenues increased 94% to $19.7 million in 1997 from $10.1
million in 1996 and were essentially unchanged in 1996 from $10.3 million in

1995. These changes in total revenues were primarily due to increased revenues
from Continuous Information Services, offset by decreased revenues from Other
Services.
 
     Revenues from Continuous Information Services increased 364% to $14.6
million in 1997 from $3.2 million in 1996. The Company began marketing its
Continuous Information Services in April 1996. The increase in revenues was
primarily due to growing market acceptance of Giga's services and continued
expansion of the Company's sales force.
 
     Revenues from Other Services decreased 22% to $4.7 million in 1997 from
$6.0 million in 1996 and 29% in 1996 from $8.5 million in 1995. The decrease in
such revenues in 1997 was principally due to a planned phase-
 
                                       23
out of BIS's consulting business offset by increased revenues from the Company's
events and conferences. The decrease in revenues in 1996 compared to 1995 was
primarily due to the decrease in certain consulting activities.
 
     Revenues from Publications decreased 64% to $344,000 in 1997 from $946,000
in 1996 and 45% in 1996 from $1.7 million in 1995. The decreases were primarily
due to a de-emphasis on this business activity.
 
     Cost of services. Cost of services decreased 1% to $12.5 million in 1997
from $12.3 million in 1996 and increased 72% in 1996 from $7.2 million in 1995.
The cost decrease in 1997 was primarily due to decreased expenses for the legacy
BIS consulting business being phased-out, offset by increased expenses to
provide Continuous Information Services to the Company's growing customer base.
The cost increase in 1996 was due to the Company's substantial investment to
build its research organization and retain consultants for the Company's
Continuous Information Services.
 
     Cost of publications. Cost of publications decreased 78% to $174,000 from
$790,000 in 1996 and increased 35% in 1996 from $586,000 in 1995. The decrease
in 1997 was principally due to a planned decrease in the number of publications.
The increase in 1996 was primarily due to a change in the mix of publications
sold.
 
     Sales and marketing. Sales and marketing expenses increased 193% to $19.6
million in 1997 from $6.7 million in 1996 and 590% in 1996 from $972,000 in
1995. The increase in 1997 was primarily due to the expansion of the Company's
sales organization to sell its Continuous Information Services and higher sales
commission expense from increased revenues. The increase in 1996 was principally
attributable to the increased investment in marketing programs and expansion of
the Company's sales force in connection with the introduction of its Continuous
Information Services in April 1996.
 
     Research and development. Research and development increased 10% to $2.0
million in 1997 from $1.8 million in 1996 and 414% in 1996 from $348,000 in
1995. The increase in 1997 was primarily due to the continued enhancement of
GigaWeb to meet evolving market needs. The increase in 1996 was due to the
investment required for the development of GigaWeb and ExperNet.

 
     General and administrative. General and administrative expenses decreased
34% to $6.4 million in 1997 from $9.7 million in 1996 and increased 40% in 1996
from $7.0 million in 1995. The decrease in 1997 from 1996, and the increase in
1996 over 1995, was primarily due to one-time expenses in 1996 for internal
systems, facilities, personnel, and other items to build the infrastructure to
support the expansion of the Company's operations.
 
     Depreciation and amortization. Depreciation and amortization expenses
increased 18% to $2.8 million in 1997 from $2.4 million in 1996 and 22% in 1996
from 2.0 million in 1995. The increase in 1997 was due primarily to the
write-off of the remaining amount of unamortized goodwill associated with the
ExperNet acquisition offset by the Company's practice in 1997 to rent rather
than purchase computer equipment.
 
     Interest income and expense. Interest income was earned on cash balances,
in excess of then current operating needs, from the Company's equity financing
during 1996 and 1997. Interest expense is primarily from long-term debt for
equipment financing and acquisitions and varies with the outstanding balance.
 
     Discontinued operations. In June 1996, the Company discontinued its BIS
market research business and, as a result, recorded a charge of approximately
$2.3 million, net of taxes, in the year ended December 31, 1996. In 1997, the
Company recorded income, net of taxes, of $1.1 million from the settlement of a
liability relating to a long-term, foreign lease and the renewal of a provision
established for refunds to potentially dissatisfied customers that had been part
of the aforementioned charge.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Since its inception, the Company has funded its operations primarily
through the private placement of equity securities and borrowings under
promissory notes. The Company has received aggregate net proceeds of $43.4
million from the private placement of equity securities and recently borrowed
$10.0 million under the Bridge Notes. At March 31, 1998, the Company had cash
and cash equivalents of $1.8 million. See Notes 11, 13 and 20 to the
Consolidated Financial Statements.
 
     During 1997 and the three months ended March 31, 1998, the Company's
capital expenditures totaled approximately $559,000 and $261,000, respectively,
primarily for computer equipment. The Company expects
 
                                       24
that additional purchases of computer equipment will be made as the Company's
employee base and customer base grow. As of March 31, 1998, the Company had no
material commitments for capital expenditures.
 
     Net cash used by continuing operations was approximately $17.7 million and
$14.5 million for the years ended December 31, 1996 and 1997, respectively, and
approximately $1.3 million for the three months ended March 31, 1998. Net cash
used by investing activities of approximately $206,000 for the year ended
December 31, 1997 and approximately $251,000 for the three months ended March

31, 1998 were primarily due to purchases of computer equipment. Cash provided
from financing activities of approximately $17.7 million for the period March
17, 1995 to December 31, 1995 and approximately $11.6 million and $11.7 million
for the years ended December 31, 1996 and 1997, respectively, were primarily
generated by the issuance of the Common Stock and Preferred Stock as previously
described. Cash used by financing activities for the three months ended March
31, 1998 of $231,000 was principally used to repay long-term debt.
 
     In April 1998, the Company issued the Bridge Notes in the aggregate
principal amount of $10.0 million and warrants to purchase an aggregate of
166,666 shares of Common Stock at an exercise price of $3.00 per share. The
outstanding principal amount of, and any unpaid accrued interest on, the Bridge
Notes is due and payable upon completion of the Offering. In April 1998 and May
1998, the Company issued an aggregate of $2.0 million of Series D Preferred
Stock. See 'Certain Transactions' and Note 20 to the Consolidated Financial
Statements for additional information concerning these transactions. The Company
believes that the net proceeds from the Offering, together with its existing
cash and cash equivalents and cash generated from operations, will be sufficient
to fund the Company's cash needs for at least the next twelve months.
 
     The Company has spent substantial amounts to date and expects capital and
operating expenditures to increase due to numerous factors, including the
Company's plans to increase marketing efforts for its Continuous Information
Services, the expected costs to attract and retain qualified employees,
including research and sales personnel, on a timely basis and the related costs
of such efforts, the response of competitors to the Company's services, the
Company's plans to develop and market new services and products, the further
enhancement of the GigaWeb system and the Company's expansion of its
international operations, and the continued acceptance by customers of annual
membership agreements providing for advance payments rather than equal monthly
installments or some other payment model. The Company anticipates funding its
ongoing working capital needs principally through the net proceeds to the
Company from the Offering. However, in the event that the Company encounters
difficulties in collecting accounts receivable, experiences low or reduced
subscription renewal rates or otherwise has revenues that are lower than
planned, the Company might require additional working capital and there can be
no assurance that such capital would be available to the Company on terms that
are acceptable, if at all. If adequate funds are not available, the Company may
be required to reduce its fixed costs and delay, scale back or eliminate certain
of its services, any of which could have a material adverse effect in the
Company's business, financial condition and results of operations. See 'Risk
Factors--Substantial Future Capital Needs; Risks of Working Capital Deficiency.'
 
OTHER FACTORS THAT MAY AFFECT FUTURE PERFORMANCE
 
     Many currently installed computer systems and software products are coded
to accept only two digit entries in the date code field. Beginning in the year
2000, these date code fields will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. The Company has
commenced efforts to ensure that the computer systems and applications upon
which it relies for internal operations and external communications, and
presently expects to use following December 31, 1999, are or will be year 2000
compliant. While uncertainty exists concerning the potential effects associated
with such compliance, the Company does not believe that year 2000 compliance

will result in a material adverse effect on its business, financial condition
and results of operations.
 
                                       25
BUSINESS
 
GENERAL
 
     The Company provides objective analyses and advice relating to developments
and trends in the computing, telecommunications, and related industries
(collectively, the 'Information Technology' or 'IT' industries) to assist its
customers in making technology-related decisions. IT is critical to the
competitiveness and long-term viability of a wide range of organizations. The
Company believes information overload, confusion, and anxiety exists among IT
decision-makers. As a result, an increasing number of organizations are turning
to Continuous Information Service ('CIS') providers to monitor and analyze IT
developments and to identify trends to support such organizations' IT
decision-making needs. The Company's Continuous Information Services are
available to customers for an annual subcription fee billed and payable in
advance, which entitles members to (i) access all the Company's advisory service
information and analyses, (ii) inquiry privileges and (iii) participate in
briefings, a conference and teleconferences.
 
CIS MARKET
 
     The CIS industry emerged in the 1960's in response to the complexity and
growth in the IT market. In the early stages of the CIS industry's development,
CIS providers primarily produced quantitative analyses of IT industry trends to
assist vendors with product planning and formulation of marketing and business
strategies. The IT industry continued to rapidly evolve and increasingly became
characterized by short product life cycles, highly complex, distributed
computing and telecommunications architectures and IT systems made up of
hardware and software from a wide variety of vendors. As a result,
decision-making by users of IT products and services became increasingly
complicated, straining the analytic resources within organizations. In response
to this opportunity, a second generation of CIS providers emerged by the 1980's,
offering analytical and decision-support information to users, in addition to
the quantitative information offered to vendors. These second generation
providers continued to be characterized by multiple information service
offerings, each of which focused on a specific aspect of the IT industry, such
as mainframes, personal computers, operating systems, application development
tools or relational databases. Over time, as IT became more complex, the number
of such services proliferated.
 
     In the 1990's, the continuous expansion of technological choices has made
IT operations even more complex and diverse, particularly with the migration
from legacy mainframe systems to distributed client-server and other
architectures and the emergence of the Internet, together with advanced
telecommunications offerings. As a result, organizations are increasingly
turning to outside consultants for support. In addition to users and vendors, an
emerging segment of the CIS market includes business managers, who require
increased awareness of IT issues to heighten sensitivity to systems

opportunities, and small businesses, which are becoming more reliant on
technology.
 
     The Company believes that the multiple-service model is not well positioned
to effectively address the critical and evolving IT needs of modern
organizations. Due to the complexity and interrelationships among the various
aspects of IT, the Company believes organizations require integrated advice that
is not limited to the boundaries of the second generation model. In addition,
since IT solutions also often require practical, hands-on experience, CIS
providers must complement the strategy-oriented consultative skills of many of
today's industry analysts with pragmatic real-world advice. Due to increasing
time and budget pressures, customers must also be able to quickly and
efficiently search through the voluminous resources and published content of CIS
providers to locate the particular analyses and expertise they require.
 
THE GIGA SOLUTION
 
     Giga was founded by Gideon I. Gartner, who in 1979 founded Gartner Group,
Inc. Building on his extensive experience and success in the CIS industry, Mr.
Gartner formed Giga with the objective of creating a new approach toward
addressing the CIS needs of IT users and vendors. Giga has developed a range of
innovative Continuous Information Services, as well as an effective, electronic
information delivery mechanism, designed to provide integrated IT analyses and
advice.
 
                                       26
Foremost among these innovations is the Company's unified Advisory Service,
in which IT research and analysis is offered to customers as a single service
intended to encompass the variety of IT coverage offered by other CIS providers
through multiple and fragmented services. The Company believes that its Advisory
Service (i) delivers the comprehensive viewpoint required by customers, (ii)
offers a price/performance advantage over the second generation model since the
payment of one subscription fee provides access to all advisory research and
(iii) becomes increasingly cost effective over time as new advisory research is
added without increased subscription fees.
 
     Giga's service approach was developed in response to the needs of the CIS
market. The Company's unified Advisory Service produces internal benefits which
the Company believes allows it to better service its customers, including (i)
flexibility of resource allocation, (ii) an orientation toward internal
collaboration and (iii) the development of experienced generalists, who are able
to diagnose broad client challenges and communicate effectively with clients.
The process is also designed to be objective, by virtue of several features
built into Giga's methodologies, such as a requirement that analysts articulate
balanced opinions. In addition, research is available to clients on a timely
basis, through GigaWeb's sophisticated authoring technology. The customization
features permitted by GigaWeb also make Giga's research more relevant to
specific client environments.
 
     As part of its Continuous Advisory Consulting services, the Company also
enters into on-going retainer-based consulting arrangements with its customers
to assess various IT issues, including an organization's strategic technology

plan, a vendor's marketing plan, or the implementation issues surrounding a
major technology migration. Advisory Consulting is a valuable extension of the
Company's client inquiry process, enabling customers to request more in-depth
analysis targeted at the application of technology to their specific situation.
 
     The Company also offers customers its innovative IT Practice Services to
complement its Advisory Service. Giga employs former IT operating executives to
survey leading IT organizations, document the techniques and methods ('best
practices') used by IT managers within these organizations, and deliver the
results to customers, which can be combined with consulting servies. Each of
these services focuses on a distinct job function within an IT organization,
permitting customers to benchmark their IT practices against those of peers and
to obtain new ideas.
 
     GigaWeb, the Company's Internet-based information delivery interface allows
customers to easily and efficiently navigate through the full spectrum of
original research and third-party content available through the Advisory
Service. Through the use of intelligent software agents, the Company is able to
provide customized information to each customer and to allow customers to search
for and select the information that is most relevant to their particular needs.
GigaWeb also enables collaboration with Giga's clients and maintains rich
features which improve the usability of Giga research. In addition, to
complement the Company's research and inquiry access, Advisory Service customers
are provided access to ExperNet, the Company's network of external IT
practitioners who have practical experience in solving real-world IT problems.
 
GIGA STRATEGY
 
     Giga's objective is to become the leading third generation CIS provider,
offering a significant price/performance advantage over its competitors. The key
elements of Giga's strategy include:
 
     o     Utilizing and Enhancing its Price/Performance Advantage.  The Company
           intends to use its price/performance advantage to increase the range
           of companies which can afford CIS products and services and to allow
           customers to offer Giga's content for a wider group of employees than
           has been affordable with competitors' products. 
 
     o     Leveraging Existing Customer Base.  The Company's services are used
           by over 800 customers worldwide. Giga intends to expand its customer
           relationships by providing additional non-advisory services, such as
           IT Practice Services and Continuous Advisory Consulting. In addition,
           the Company is focused on increasing the number of Advisory Service
           subscribers within each customer's organization.

                                       27
o     Expanding and Capitalizing on Worldwide Distribution.  Giga has
           expanded its worldwide sales force from 49 on December 31, 1996 to
           103 on April 30, 1998. The Company plans to continue to expand its
           sales and marketing organization both domestically and

           internationally. The Company has entered into agreements with
           distributors located in Spain, Israel and Korea and intends to
           develop additional international distribution arrangements.
 
PRODUCTS AND SERVICES
 
     The Company's four principal product and service lines are (i) Advisory
Service, which includes ExperNet, (ii) IT Practice Services, (iii) Advisory
Consulting and (iv) Events and Publications. The Company's services are designed
to be accessed through GigaWeb, as well as through published reports and
consultation with the Company's analysts and consultants. Set forth below is a
schematic of Giga's principal product and service lines:
------------------------------------
                                              |      Giga Information Group      |
                                              ------------------------------------
                                                            |
                                                            |
___________________________________________|____________________________________________________
                 |                             |                                 |                              |
                 |                             |                                 |                              |
----------------------------------------------------------------------------------------------------------------------------------
|       IT Practice Services   ||        Advisory Service        ||       Continuous Advisory     ||  Events and Publications     | 
|                              ||                                ||           Consulting          ||                              |
| Integration of best practice ||   Continuous subscription-     ||                               || Conferences on IT industry   |
|   surveys with consulting    || based decision-support service || In-depth analysis and advice  ||issues and trends, stand-alone|
|                              ||       ExpertNet network        || provided on an on-going basis ||   reports and newsletters    |
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
|                                                    GigaWeb                                                                     |
|                                  Internet-based information delivery interface                                                 |
---------------------------------------------------------------------------------------------------------------------------------
Advisory Service
 
     Advisory Service, the principal CIS offering of the Company, is available
to customers for an annual subscription fee billed and payable in advance, which
entitles members to (i) access all of the Company's advisory service information
and analyses, (ii) inquiry privileges and (iii) participate in briefings, a
conference and teleconferences.
 
     Research
 
     Giga employs a structured and consistent research methodology. The goal of
Giga research is to form original judgments and recommendations to support
client decision-making. Research topics are determined in part by examination of
customers' needs, which are identified by analysts through direct discussions
with clients. The Company's methodology enables it to rapidly analyze IT
markets, technologies, vendors, products and user issues. Analysts conduct
informal research by surveying the Company's client base and interviewing
vendors, consultants and other sources. These activities are supplemented with
searches of numerous trade, financial and other third-party source materials
compiled by the Company's research center. The Company believes its analysts
form original judgments and recommendations by applying their professional
experiences to their review of these combined materials. To ensure research
quality and consistency, all research is reviewed on an ongoing basis by the
Company's research management team, in conjunction with several senior analysts
who are designated research leaders.
 
                                       28
The Company seeks to convey relevant and actionable information and
analyses, as well as practical advice, to its customers through a spectrum of
delivery mechanisms, including:
 
     o     IdeaBytes.  IdeaBytes are one-page, published analyses that are
           intended to provide customers with quick, up-to-date findings and
           opinions on current issues that are authored by the Company's
           analysts.
 
     o     Planning Assumptions.  Planning Assumptions are multi-page and highly
           formatted reports that provide customers with in-depth analyses of IT
           topics and recommendations for action. Planning Assumptions are
           designed to be responsive to the current needs of the market.
 
     o     Inquiry Support.  The Company maintains a 'Knowledge Center,' which
           consists of experienced research support associates who track
           customer inquiries and direct customers to the appropriate analyst or
           source of information. Customers also have direct access to the
           Company's analysts or ExperNet practitioners on-line through GigaWeb.
 
     o     GigaTels.  GigaTels are audio teleconferences run by the Company's
           analysts on selected topics and provide an open forum for questions,
           exchanges and debate. There were 3,000 participants in the 91
           hour-long GigaTels held in 1997.
 

     o     Third-Party Content.  The Company provides customers with access
           through GigaWeb to publications from information partners such as Dow
           Jones and Information Access Corporation.
 
     Examples of Giga research topics include 'Network-Centric Enterprise
Architectures,' 'Platforms for Enterprise Computing: The Emerging Role of NT in
the Enterprise' and 'Participating in Electronic Commerce.' Since these topics
are typically interdisciplinary, they are supported by research from multiple
analysts that cover different areas of IT. For example, the topic covering
enterprise platforms requires research contributions from analysts who cover the
mainframe, client-server, wide-area networks, database management systems and
operating systems areas, necessitating the active participation of five or more
analysts. The Company's research culture is designed to encourage collaboration
among analysts.
 
     The Company currently employs over 50 research professionals and plans to
hire additional research professionals, as needed. The Company's principal
research offices are located in Cambridge, MA, Westport, CT and Santa Clara, CA.
Giga's analysts average 10 years of experience with backgrounds ranging from
consulting to vendor and user professional positions.
 
     ExperNet.
 
     To complement the Company's research and inquiry access, customers have
access through GigaWeb to ExperNet, a network of over 1,000 external IT
practitioners. These practitioners have current experience in diversified
segments of the IT industry, which the Company believes cannot be efficiently
covered by the traditional CIS approach, and are available to assist clients in
solving real-world IT problems. Each practitioner responds to customer inquiries
at no additional charge in return for access to Giga information.
 
GigaWeb and Other Delivery Mechanisms
 
     Advisory Service research is customized in a personalized manner through
GigaWeb, the Company's proprietary, Internet-based information delivery
interface which provides on-line access to the Company's research reports,
third-party content, analysts and ExperNet. GigaWeb makes it possible for
members to obtain both a unified and complete view across all of Giga's advisory
content while matching customers' specific needs as determined by
self-administered profiles and prior inquiries. GigaWeb is designed to make it
easy and efficient for a customer to navigate through the full spectrum of
Giga's original research and third-party content, together with access to human
expertise. Subscribers to Advisory Service are provided with a personalized home
page (the 'Virtual Office') which is accessed through Giga's password-protected
Internet site using a Web browser.
 
     GigaWeb enables customers to search for relevant information using word
searches. Based on the individualized customer profile, GigaWeb automatically
selects the particular subset of Giga research and third-party content most
relevant to the customer and delivers it to the customer's Virtual Office or via
e-mail. In addition, customers who have shared objectives or interests can
interact with each other, as well as with Giga analysts and ExperNet
practitioners, through on-line discussion groups. Advisory Service clients may
provide GigaWeb access to large numbers of their IT professionals via

content-only seats and various site license practices.
 
                                       29
The Company also has installed its content as an additional deliverable on
several corporate intranets, and expects the volume of such installations to
increase substantially. This service is called IntraGiga. For those companies
utilizing Lotus Notes, Giga offers access to its research via GigaNotes.
Customers can also request that Giga's research be provided via hard copy.
 
Continuous Advisory Consulting
 
     The Company's Continuous Advisory Consulting services provide Giga
customers with support such as assessments of an organization's strategic
technology plan, the implementation issues surrounding a major technology
migration or a vendor's marketing plan. Advisory Consulting is a valuable
extension of the Company's client inquiry process, enabling customers to request
more in-depth analysis targeted at the application of technology to their
specific situation. When a customer inquiry requires on-going or periodic
assessments and updates, Giga analysts may construct a scheduled advisory
program.
 
IT Practice Services
 
     The Company believes that its IT Practice Services enable Giga customers to
be more effective in solving IT problems by leveraging the best practices of
their peers. Senior Giga advisors with strong IT and management expertise
document the successful operating practices and techniques of IT managers in a
concise reference book. The insights gained from these best practices are
interpreted by the advisors and tailored to fit in the context of the customer's
organization. IT Practice Services are designed for specific job functions found
within the IT organization and address the issues that such individuals must
solve. Currently, the Company offers IT Practice Services in three areas: CIO
Practices, Year 2000 Practices and Security Practices. Each IT Practice Service
is available for an annual subscription fee. Each customer receives (i) three
in-depth studies documenting best practices, (ii) on-site consultations to guide
the client in applying the best practices that are most pertinent to the
customer and (iii) inquiry access to IT Practice Service advisors.
 
Events and Publications
 
     The Company organizes and sponsors a range of events on significant IT
industry issues and trends. At GigaWorld IT Forum, the Company's flagship annual
conference, Giga analysts present and update their most important research
findings and recommendations and meet one-on-one in advisory sessions with
clients. Other conferences include the 'Business OnLine Symposia' and the
'Business and Process Workflow' conference series, both held in the United
States and Europe annually. In 1997, the Company organized and hosted 11 three-
day conferences, sponsored an additional 9 conferences (hosted by partner
organizations). All events are promoted via direct mail and telesale channels
with over 1.2 million pieces of mail bearing the Company's logo circulated in
1997.
 

     The Company produces a series of off-the-shelf publications based on
conference topics or current IT issues which are identified through the Advisory
Service and marketed to IT professionals. The Company produced six publications
and one newsletter in 1997.
 
SALES AND MARKETING
 
     Since inception, the Company has made substantial investments in sales and
marketing to sell its services, address additional markets and support its
growing customer base. The Company sells its services through a direct sales
force located in the United States, Canada, United Kingdom, France, Germany, the
Netherlands and Denmark. As of April 30, 1998, the Company's North American
direct sales force consisted of 88 field sales personnel, an increase from 42
personnel at December 31, 1996. The Company also had 15 international direct
sales personnel serving Europe, an increase from 7 personnel at December 31,
1996. The Company also sells its services through independent third-party
distributors in Spain, Israel and Korea. The Company's internal marketing
organization, primarily located in the Company's Norwell, Massachusetts
facility, provides public relations, lead generation, direct mail support and
other related services.
 
     All Giga sales representatives participate in the Company's annual sales
compensation plan. Commissions are paid monthly based upon NAVI attainment
versus established quotas. Additional bonuses and other incentives are paid for
meeting and/or exceeding certain established targets and for special promotions.
 
                                       30
The Company has over 800 customers. No single customer accounted for over
3% of the Company's revenues for the year ended December 31, 1997. The Company
serves customers across a broad array of industries, which include:
Allstate Corp.                                        Hewlett-Packard Co.
AT&T Wireless Services                                International Business Machines Corporation
BASF                                                  Intel Corp.
Blue Cross Blue Shield of Nebraska                    Microsoft
British Aerospace PLC                                 Motorola Inc.
Citibank N.A.                                         Netscape
Federal Express Corp.                                 Pirelli SPA
Ford Motor Company                                    State of Texas
General Electric Co.                                  Texaco Inc.
The Gillette Co.                                      United Nations International Computing Centre
COMPETITION
 
     The Company competes in the IT market directly with other independent
providers of Continuous Information Services, including Gartner Group, META
Group, Inc. and Forrester Research Inc., and the internal planning, research and
marketing staffs of corporations and IT vendors. The Company also competes with
other information providers, including market research firms, 'Big Six'

accounting firms, consulting firms and systems integrators. Many of the
Company's direct and indirect competitors have substantially greater financial,
information gathering and marketing resources than the Company. Some of the
Company's direct and indirect competitors also have established research
organizations with greater market recognition and experience in the IT industry.
See 'Risk Factors--Significant Competition.'
 
EMPLOYEES
 
     As of March 31, 1998, the Company employed 307 persons, including 63 in
research and research support, 26 events and publications, 165 in sales and
marketing, 10 in research and development and 43 in administration. Of such
employees, 100 are located in the Company's Norwell facility, 69 are located in
the Company's other domestic facilities, 49 are located internationally and 90
work from their homes. None of the Company's employees are represented by a
collective bargaining arrangement and the Company believes its relationship with
its employees is good.
 
FACILITIES
 
     The Company's headquarters are located in Norwell, Massachusetts and
consist of approximately 27,000 square feet. This facility and the Company's
approximately 8,000 square feet in its Cambridge, Massachusetts facility
together accommodate corporate administration, research and analysis, marketing
and sales and customer support. The lease on the Cambridge facility expires in
November 2000 and the lease on the Norwell facility is currently on a
month-to-month basis. The Company is actively negotiating a five-year lease on
the Norwell facility which would commence in June 1998. The Company also leases
office space for its research, and sales and marketing efforts in three other
U.S. and three primary international locations. The Company believes that
additional facilities will be available in the future on commercially reasonable
terms to meet future needs. See Note 7 to the Consolidated Financial Statements
for information regarding the Company's annual rental costs.
 
LEGAL PROCEEDINGS
 
     The Company, from time to time, is a party to legal proceedings. See 'Risk
Factors--Uncertainties Relating to Proprietary Rights.'
 
                                       31
MANAGEMENT
 
DIRECTORS AND EXECUTIVE OFFICERS
 
     The directors and executive officers of the Company, and their ages as of
March 31, 1998, are as follows:
NAME                                               AGE   POSITION
------------------------------------------------   ---   ------------------------------------------------
Gideon I. Gartner...............................   63    Chairman, President and Chief Executive Officer
James C. R. Graham..............................   47    Executive Vice President
Daniel M. Clarke................................   51    Senior Vice President, Chief Financial Officer,
                                                         Treasurer and Secretary
Keith R. Belton.................................   37    Senior Vice President, Research
Michael R. Mooradian............................   40    Senior Vice President, Worldwide Sales
Neill H. Brownstein (1)(2)......................   54    Director
David L. Gilmour................................   40    Director
Richard L. Crandall (2).........................   54    Director
Bernard Goldstein (2)...........................   67    Director
Irwin Lieber (1)................................   58    Director
Josh S. Weston (3)..............................   69    Director Nominee
------------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) To be appointed a director upon closing of the Offering
 
     Mr. Gartner has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company since its inception in March 1995. In October
1997, he was also elected President. From 1993 to 1994, he was a private
investor. From 1991 to 1992, he served as Chairman, and from 1979 to 1991 he
served as President, Chairman and Chief Executive Officer of Gartner Group,
Inc., an information technology company which he founded. From 1972 to 1979, he
served as a technology analyst and subsequently as a partner at Oppenheimer &
Co., an entity engaged in the financial services business. Mr. Gartner received
his B.S. in engineering from Massachusetts Institute of Technology ('MIT') and
received an M.S. in management from MIT's Sloan School of Management.
 
     Mr. Graham has served as Executive Vice President of the Company since
October 1997. Prior to joining Giga, he was Vice President, Information Systems
of United States Fidelity & Guaranty Corporation, an insurance company, from
1994 to October 1997. From 1990 to 1994, he was Vice President, Marketing and
Product Management at Seer Technologies, a software company. From 1987 to 1990,
Mr. Graham was Vice President, Software Engineering Strategies at Gartner Group,
Inc. From 1982 to 1986, he was Executive Vice President of VenturCom, a software
company that he founded. Prior to that he was an Economic Advisor at The
Business Roundtable from 1977 to 1980. From 1976 to 1977, Mr. Graham was the
Special Assistant to the U.S. Secretary of Commerce and, from 1974 to 1976, he

was the Vice President and Executive Secretary of Industrial Energy Users Forum.
Mr. Graham received a B.A. in logic from Georgetown University and an M.S. in
finance and economics from MIT's Sloan School of Management.
 
     Mr. Clarke has served as Senior Vice President, Chief Financial Officer,
Treasurer and Secretary since September 1997. From July 1996 to August 1997, Mr.
Clarke served as Vice President, Finance and Administration and Chief Financial
Officer for Dataware Technologies, Inc., a provider of software for professional
electronic publishing and knowledge management. From 1990 to December 1995, Mr.
Clarke was an executive officer of Xyvision, Inc., a software and services
company that develops and markets advanced software for document management,
publishing and prepress. He served as Vice President, Chief Financial Officer
and Secretary of Xyvision until January 1994, and as President and Chief
Operating Officer from
 
                                       32
February 1994. From 1981 to 1989, Mr. Clarke served in a variety of senior
management positions with BBN Corporation, a diversified high technology
company. Mr. Clarke holds a B.S. Degree from Rensselaer Polytechnic Institute
and an M.B.A. from Harvard Business School.
 
     Mr. Belton joined the Company in October 1997 as Vice President, Research
and was named Senior Vice President, Research in December 1997. From October
1996 to September 1997, Mr. Belton was Vice President, Marketing for Datamedic
Corp., a software company. From July 1994 to September 1996, he was a partner at
Benchmark Partners, a consulting company. From 1990 to 1994, he held various
positions with Kurzweil Applied Intelligence Inc., a software company, including
Director of Product Marketing from 1993 to 1994. From 1985 to 1989, he was the
Director, Manufacturing Automation Planning Service for the Yankee Group, a
consulting company. Mr. Belton holds a B.A. in Economics from Haverford College.
 
     Mr. Mooradian has served as Senior Vice President, Worldwide Sales of the
Company since August 1997. From August 1996 to August 1997, Mr. Mooradian served
as Regional Vice President of Giga's central region. From January 1996 to July
1996, he served as Vice President of Sales, North America for Timeline, Inc., a
developer of client/server, financial management and reporting systems. From
1991 to January 1996, he held several management positions at Comshare, a
decision support software company. From 1989 to 1991, he served as a sales
representative for Ross Systems, Inc., a financial systems integrator. From 1987
to 1989, he served as a sales representative for Corporate Class Software, Inc.,
a software company. From 1985 to 1986, he served as a sales representative for
Information Resources, Inc., a software company, and, from 1984 to 1985, as a
sales representative for Hewlett-Packard. Mr. Mooradian received a B.S. in
Business Administration from DePaul University.
 
     Mr. Brownstein has served as a director of the Company since July 1995.
Since January 1995, he has been a private investor. From 1970 to January 1995,
Mr. Brownstein was associated with Bessemer Securities Corporation and was a
founder and General Partner of three affiliated venture capital funds: Bessemer
Venture Partners L.P., Bessemer Venture Partners III L.P. and Bessemer Venture
Partners II L.P., for which he currently serves as a Special General Partner.
Since 1970, he has been president of Neill H. Brownstein Corporation, an

investment management counseling enterprise. He serves as a director of DSP
Communications, Inc. Mr. Brownstein received a B.A. from Columbia College and an
M.B.A. from the Kellogg School of Management at Northwestern University. Between
1979 and 1988, Mr. Brownstein also served as a director of Gartner Group, Inc.
 
     Mr. Gilmour is a co-founder of the Company with Mr. Gartner. He served as
Senior Vice President and Chief Research Officer of the Company from April 1996
to February 1998 and has served as a director of the Company since July 1995.
Mr. Gilmour continues to be a special advisor to Giga on Research and Technology
and devotes approximately 25% of his time to the Company. From July 1995 to
April 1996, he served as Senior Vice President of Technology of the Company.
From July 1993 to July 1995, he served as Chief Executive Officer and a director
of ExperNet Corporation, an information technology company which he founded with
Mr. Gartner. From October 1992 to April 1993, Mr. Gilmour served as acting
President and Chief Executive Officer, and from April 1991 to October 1992 and
from April 1993 to July 1993, he served as Executive Vice President, Marketing,
of Versant Object Technology Corporation, a computer software company. From 1989
to 1991, he served as Vice President--Database Systems Division, from 1986 to
1989, he served as General Manager--Advanced Products Division, and from 1984 to
1986, he served as Director Product Planning at Lotus Development Corporation, a
software company. Mr. Gilmour received a B.A. in Applied Physics, an M.S. in
engineering, both from Harvard University, and an M.B.A., with distinction, from
Harvard Business School.
 
     Mr. Crandall has served as a director of and consultant to the Company
since August 1995. He was founder of Comshare, Inc., a decision support software
company, serving as its Chief Executive Officer from 1970 until 1994 and
Chairman until April 1997. Mr. Crandall chairs the Enterprise Software
Roundtable, consisting of the CEO's and COO's of the twenty-five largest
enterprise software companies. He currently serves on the Board of Directors of
Comshare, Computer Task Group and Diebold and several privately held technology
companies. He serves on the National Advisory Board to the College of
Engineering of the University of Michigan. Mr. Crandall received a B.S. in
electrical engineering, a B.S. in mathematics and an M.S.E. in industrial
engineering from the University of Michigan.
 
                                       33
Mr. Goldstein has served as a director of the Company since April 1997. He
is a Director of Broadview Associates, LLC, which he joined in 1979. He is a
past President of the Information Technology Association of America, the
industry trade association of the computer service industry, and past Chairman
of the Information Technology Foundation. Mr. Goldstein was a director of Apple
Computer Inc. until August 1997, and is currently a Director of Franklin
Electronic Publishers, Inc., Sungard Data Systems, Inc., SPSS, Inc. and several
privately held companies. Mr. Goldstein received a B.S. from the Wharton School
of the University of Pennsylvania and an M.B.A. from Columbia University.
 
     Mr. Lieber has served as a director of the Company since November 1995.
Since 1979, he has served as Chairman and Chief Executive Officer of Geo Capital
Corporation, an investment advisory firm which he founded. Additionally, Mr.
Lieber has served as a corporate officer of InfoMedia Associates Ltd., a general
partner of 21st Century Communications Partners, L.P., an investment fund. In

addition, he is a general partner of Applewood L.P. and Wheatley L.P. LLC.,
investment funds. From 1970 to 1979, Mr. Lieber was a General Partner of First
Manhattan Co., an investment management, brokerage and investment banking firm.
Mr. Lieber is a director of LeaRonal Inc. He received a B.S. degree in
electrical engineering from City College of New York and an M.S. degree in
electrical engineering from Syracuse University.
 
     Mr. Weston is Honorary Chairman of the Board of Automatic Data Processing,
Inc. ('ADP') and served as chairman from 1986 to April 1998. He was Chief
Executive Officer of ADP from 1982 to 1996. Mr. Weston is a director of J. Crew
Group Inc, Olsten Corporation, Public Service Enterprise Group Company, Shared
Medical Systems, Inc. and Vanstar Corporation. Mr. Weston received a B.S. from
City College of New York and an M.S. from the University of New Zealand where he
was a Fulbright Scholar.
 
     Certain of the current directors of the Company were nominated and elected
in accordance with a stockholders voting agreement which will terminate upon the
consummation of the Offering. Each officer serves at the discretion of the Board
of Directors. There are no family relationships among or between any of the
directors and executive officers of the Company.
 
BOARD COMPENSATION
 
     Each Non-Employee Director of the Company is reimbursed for expenses
incurred in connection with attendance at the meetings of the Board of Directors
and committees thereof and is entitled to receive stock options under the
Company's 1997 Director Option Plan. Directors who are employees of the Company
currently receive no compensation for serving as directors.
 
     1997 Director Option Plan.  The Director Plan, adopted in June 1997,
provides for the grant of stock options to directors of the Company who are not
full-time employees of the Company or any subsidiary ('Non-Employee Directors').
Only non-statutory options may be granted under the Director Plan. The maximum
number of shares of Common Stock as to which options may be granted under the
Plan is 50,000. Options are automatically granted to Non-Employee Directors as
follows: (i) on July 1st of each year, commencing July 1, 1997, options to
purchase 2,000 shares of Common Stock and (ii) unless such director was elected
pursuant to a certain stockholder voting agreement (which agreement terminates
upon consummation of the Offering), additional options to purchase 2,000 shares
of Common Stock upon such directors' initial election as a director after
adoption of the Plan.
 
     The Director Plan is administered by the Board of Directors. The option
exercise price for each option granted under the Director Plan is the fair
market value of the Common Stock as of the date of grant. Options vest in four
equal annual installments beginning on the first anniversary of the date of
grant (subject to acceleration upon a 'change in control' as defined in the
Director Plan), provided the optionee continues to serve as a director. Payment
of the option exercise price is to be made in cash for the full exercise price
of the options. Options are not assignable or transferrable except by will or
the laws of descent and distribution and terminate on the earlier of ten years
after the date of grant or sixty days after the optionee ceases to serve as a
director, except in the event of death or disability.
 

     For a discussion of transactions between the Company and certain directors
of the Company, see 'Certain Transactions.'
 
                                       34
EXECUTIVE COMPENSATION
 
     The following table sets forth the compensation for the fiscal year ended
December 31, 1997 of the Company's Chief Executive Officer and the Company's
three other most highly compensated executive officers whose annual salary and
bonus compensation exceeded $100,000 (the Chief Executive Officer and such other
executive officers are hereinafter referred to as the 'Named Executive
Officers'):
 
                           SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION                                LONG-TERM
                                             ------------------------        ALL OTHER          COMPENSATION
NAME AND PRINCIPAL POSITION                  SALARY($)(1)    BONUS($)    COMPENSATION($)(2)    AWARDS OPTIONS
------------------------------------------   ------------    --------    ------------------    ---------------
Gideon Gartner;
  Chairman, CEO and President.............      160,000       30,000                --                     --
 
David Gilmour;
  Senior Vice President, Research;
  Director(3).............................      160,000       24,000(4)             --                     --
 
Henry Givray;
  President and COO(5)....................      144,730(6)    30,000(7)        125,097(8)       33,333 shares
 
Jacques Bouvard;
  Senior Vice President, Technology(9)....      104,167       30,000(10)        47,668(1)       20,000 shares
------------------
 
 (1) Includes amounts payable in 1997 and/or 1998 for services rendered by the
     Named Executive Officers in 1997.
 
 (2) Other compensation in the form of perquisites and other personal benefits
     have been omitted because it constitutes the lesser of $50,000 or ten
     percent of the total annual salary and bonus of each of the Named Executive
     Officers in 1997.
 
 (3) Mr. Gilmour became a non-employee consultant effective February 1, 1998
     pursuant to a consulting agreement. See 'Employment and Related
     Agreements.'
 
 (4) The amount shown does not include $24,000 paid in 1997 for 1996

     compensation.
 
 (5) Mr. Givray's position with the Company was terminated on November 5, 1997
     pursuant to the Separation Agreement dated January 7, 1998 (the 'Givray
     Separation Agreement'). See 'Employment and Related Agreements.'
 
 (6) The amount shown reflects salary and $9,205 for unused vacation but does
     not reflect $77,808 of salary continuation paid for the period of November
     6, 1997 to April 30, 1998.
 
 (7) The amount shown does not reflect $30,000 paid in 1997 for 1996 bonus
     compensation. The amount reflects $30,000 paid in 1998 for bonus pursuant
     to the Givray Separation Agreement.
 
 (8) This amount reflects $77,808 for salary continuation for the period of
     November 6, 1997 to April 30, 1998, $5,000 for an additional bonus awarded
     for signing the Givray Separation Agreement, $30,000 paid in 1997 for
     relocation allowance and $12,289 reflecting certain travel and computer
     expenses. See 'Employment and Related Agreements.'
 
 (9) Mr. Bouvard's employment with the Company was terminated on October 16,
     1997 pursuant to the Bouvard Agreement (as defined herein). See 'Employment
     and Related Agreements.'
 
(10) The amount reflects $30,000 for bonus paid in 1998 pursuant to the Bouvard
     Separation Agreement.
 
(11) This amount reflects $47,668 for salary continuation for the period of
     October 16, 1997 to March 15, 1998.
 
                                       35
The following table sets forth certain information regarding options
granted by the Company to each of the Named Executive Officers during the fiscal
year ended December 31, 1997:
 

                       OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL     
                                                                                             REALIZABLE VALUE 
                                                    INDIVIDUAL GRANTS                       AT ASSUMED ANNUAL  
                                ----------------------------------------------------------    RATES OF STOCK  
                                NUMBER OF                                                   PRICE APPRECIATION  
                                SECURITIES   PERCENT OF TOTAL                                      FOR        
                                UNDERLYING    OPTIONS GRANTED      EXERCISE                 OPTION TERM($)(2)        
                                 OPTIONS      TO EMPLOYEES IN     PRICE PER     EXPIRATION  ------------------
                                 GRANTED     FISCAL YEAR(%)(1)     SHARE($)        DATE        5%        10%  
                                ----------   -----------------   ------------   ----------  ---------  -------
Gideon I. Gartner.............         --             --               --           --         --        --   
                                                                                              
David L. Gilmour..............         --             --               --           --         --        --   
                                                                                              
Henry Givray..................     33,333           6.45             3.00        2/11/2007    62,999   159,332
 
Jacques Bouvard...............     20,000           3.87             3.00        2/11/2007    37,800    95,600
------------------
(1) Based on an aggregate of 528,708 options granted to employees in fiscal
    1997, including options granted to the Named Executive Officers.
 
(2) The amounts shown on this table represent hypothetical gains that could be
    achieved for the respective options if exercised at the end of the option
    term. These gains are based on assumed rates of stock appreciation of 5% and
    10%, computed annually from the date the respective options were granted to
    their expiration date. The gains shown are net of the option exercise price,
    but do not include deductions for taxes or other expenses associated with
    the exercise. Actual gains, if any, on stock option exercises will depend on
    the future performance of the Common Stock, the optionholders' continued
    employment through the option period and the date on which the options are
    exercised.
 
     The following table sets forth certain information concerning stock options
held as of December 31, 1997 by each of the Named Executive Officers:
 

                      AGGREGATED OPTION EXERCISES IN LAST
                        FISCAL YEAR AND FISCAL YEAR-END
                                 OPTION VALUES
NUMBER OF SHARES
                                                                    UNDERLYING
                                                               UNEXERCISED OPTIONS
                              NUMBER OF                         AT FISCAL YEAR-END
                           SHARES ACQUIRED      VALUE      ----------------------------
          NAME               ON EXERCISE     REALIZED($)   EXERCISABLE/   UNEXERCISABLE
-------------------------  ---------------   -----------   ------------   -------------
Gideon I. Gartner........           --             --         220,000             --
 
David L. Gilmour.........           --             --          24,167         15,833
 
Henry Givray.............        6,250          1,875              --         47,083
 
Jacques Bouvard..........           --             --           6,667         13,333
VALUE OF UNEXERCISED
                            IN-THE-MONEY OPTIONS
                            AT FISCAL YEAR END(1)
                         ---------------------------
          NAME           EXERCISABLE/  UNEXERCISABLE
-------------------------------------  -------------
Gideon I. Gartner........$                $
David L. Gilmour.........
Henry Givray.............
Jacques Bouvard..........
------------------
(1) Represents the total gain which would be realized if all in-the-money
    options held at December 31, 1997 were exercised, determined by multiplying
    the number of shares underlying the options by the difference between the
    assumed initial public offering price of $     per share and the per share
    option exercise price. An option is in-the-money if the fair market value of
    the underlying shares exceeds the exercise price of the option.
 
                                       36
Employment and Related Agreements
 
     Gideon I. Gartner.  The Company has entered into a non-competition
agreement with Mr. Gartner, dated November 13, 1995, pursuant to which Mr.
Gartner has agreed not to compete with the Company, solicit any employee or take
away any customer of the Company either during his employment with the Company
or for so long thereafter as the Company continues to pay Mr. Gartner annual

compensation of at least $120,000 (whether as an employee, consultant or in the
form of severance or post-employment benefits).
 
     Henry Givray.  The Company entered into a Separation Agreement with Mr.
Givray, dated January 7, 1998 (the 'Givray Agreement'), under the terms of which
Mr. Givray ceased working for the Company on November 5, 1997 and received
continuation of base salary (at an annualized rate of $160,000) and certain
other benefits through April 30, 1998. Mr. Givray also received $30,000 for 1997
bonus, a $5,000 bonus for signing the Givray Agreement and reimbursement of
certain other items. The Company agreed to allow Mr. Givray to retain all
options shares which were vested as of November 5, 1997. In addition, the Givray
Agreement contains confidentiality and non-competition provisions which
terminate October 31, 1998.
 
     Jacques Bouvard.  The Company entered into a Separation Agreement with Mr.
Bouvard, dated October 2, 1997 (the 'Bouvard Agreement'), under the terms of
which Mr. Bouvard ceased working for the Company on October 15, 1997 and
received (i) continuation of base salary (at an annualized rate of $125,000) and
certain other benefits through March 15, 1998 and (ii) an annualized bonus of
$30,000. The Company agreed not to exercise its right to repurchase any shares
of Common Stock acquired by Mr. Bouvard under the 1996 Option Plan. As of March
15, 1998, Mr. Bouvard had 6,666 vested options under the 1996 Plan at an
exercise price of $3.00. In addition, the Bouvard Agreement contains
confidentiality and non-competition provisions which terminate February 15,
1999.
 
     For a discussion of certain current and past consulting arrangements
between the Company and Messrs. Crandall, Brownstein and Gilmour, see 'Certain
Transactions--Consulting Agreements.'
 
  Stock Plans
 
     1995 Stock Option/Stock Issuance Plan.  The Company's 1995 Stock Plan was
adopted by the Board of Directors in September 1995 and was approved by the
stockholders in February 1996. Under the terms of the 1995 Stock Plan, the
Company is authorized to make awards of restricted stock and to grant incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the 'Code') ('incentive stock options'), and stock options not
intended to qualify as incentive stock options ('non-statutory stock options'),
to employees, officers and directors of, and consultants and advisors to, the
Company and its subsidiaries. As of March 31, 1998, options to purchase a total
of 401,499 shares of Common Stock at a weighted average exercise price of $2.10
per share were outstanding under the 1995 Stock Plan (of which options to
purchase 193,483 shares were then exercisable). As of March 31, 1998, 478,228
shares of Common Stock were available for future grant under the 1995 Stock
Plan.
 
     The Board of Directors is authorized to select the option recipients and to
determine the kind and terms of each option, including (i) the number of shares
of Common Stock subject to each option, (ii) the option exercise price, (iii)
the vesting schedule of the option, and (iv) the duration of the option. Options
are generally not assignable or transferable except by will or the laws of
descent and distribution.
 

     Restricted stock awards under the 1995 Stock Plan entitle the recipient to
purchase Common Stock from the Company under terms which provide for vesting
over a period of time and a right of repurchase of unvested stock by the Company
when the recipient's relationship with the Company terminates. The Board of
Directors is authorized to select the recipients of restricted stock awards and
to determine the terms of each award, including (i) the dates on which
restricted stock awards are made, (ii) the number of shares of Common Stock
subject to the award, (iii) the purchase price (which can be less than the fair
market value of the Common Stock) of the award, and (iv) the vesting schedule of
the award. The recipients may not sell, transfer or otherwise dispose of shares
subject to a restricted stock award until such shares are vested. Upon
termination of the recipient's relationship with the Company will be entitled to
repurchase those shares which are not vested on the termination date at a price
equal to their original purchase price.
 
                                       37
1996 Stock Option Plan.  The Company's 1996 Option Plan was adopted by the
Board of Directors in August 1996 and was approved by the stockholders in
September 1996. The 1996 Option Plan provides for the grant of stock options to
employees, officers and directors of, and consultants or advisors to, the
Company and its subsidiaries. Under the 1996 Option Plan, the Company may grant
incentive stock options or non-statutory stock options. Incentive stock options
may only be granted to employees of the Company. The maximum number of shares
with respect to which options may be granted to any employee under the 1996
Option Plan shall not exceed 33,333 shares of Common Stock during any calendar
year. As of March 31, 1998, options to purchase a total of 642,698 shares of
Common Stock at a weighted average exercise price of $3.00 per share were
outstanding under the 1996 Option Plan (of which options to purchase 49,663
shares were then exercisable). As of March 31, 1998, 357,045 shares of Common
Stock were available for future grant under the 1995 Stock Plan.
 
     The 1996 Option Plan is administered by the Compensation Committee of the
Board of Directors. Subject to the provisions of the 1996 Option Plan, the
Compensation Committee has the authority to select option recipients and to
determine the kind and terms of each option, including (i) the number of shares
of Common Stock subject to the option, (ii) the option exercise price, which, in
the case of incentive stock options, must be at least 100% (110% in the case of
incentive stock options granted to a stockholder owning in excess of 10% of the
Company's Common Stock) of the fair market value of the Common Stock as of the
date of grant, (iii) the vesting schedule of the option, and (iv) the duration
of the option (which, in the case of incentive stock options, may not exceed ten
years).
 
     Payment of the option exercise price may be made in cash, shares of Common
Stock, a combination of cash and Common Stock or by any other method (including
delivery of a promissory note payable on terms specified by the Compensation
Committee) approved by the Compensation Committee consistent with Section 422 of
the Code and Rule 16b-3 under the Securities Exchange Act of 1934, as amended.
Options are not assignable or transferable except by will or the laws of descent
and distribution and, in the case of non-statutory options, pursuant to a
'qualified domestic relations order' (as defined in the Code).
 

     401(k) Profit Sharing Plan.  The Company maintains a 401(k) Profit Sharing
Plan (the '401(k) Plan'), a tax-qualified plan covering all of its employees who
are at least 21 years of age. Each employee may elect to reduce his or her
current compensation by up to 15% (on a pre-tax basis). All employee and Company
contributions to the 401(k) Plan are fully vested at all times. Upon termination
of employment, an employee may elect a lump sum distribution of all amounts
contributed by him or her under the 401(k) Plan. Early withdrawals from amounts
contributed under the 401(k) Plan are allowed under certain circumstances, such
as disability. In addition, subject to certain restrictions, employees may take
a loan drawn on contributions made by the employee under the 401(k) plan.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The members of the Compensation Committee are Neill H. Brownstein and Irwin
Lieber, neither of whom is or has been an officer or employee of the Company.
For information concerning certain transactions between the Company and certain
directors and concerning the former consulting relationship between the Company
and certain directors, including Mr. Brownstein, see 'Certain Transactions.'
 
                                       38
CERTAIN TRANSACTIONS
 
EARLY STAGES
 
     In 1995, Mr. Gartner contributed approximately $1.0 million to the capital
of the Company. In consideration for such capital contribution, the Company
issued to Mr. Gartner (i) in March 1995, 1,400,000 shares of Common Stock at a
purchase price of $0.07125 per share, (ii) in July 1995, 60,000 shares of Series
A Preferred Stock (80,000 shares of Common Stock on an as-converted basis) at a
purchase price of $5.00 per share (or $3.75 per share of Common Stock), and
(iii) in October 1995, 400,000 shares of Common Stock at a purchase price of
$1.50 per share. In addition, Mr. Gartner has made loans totalling $221,000 to
ExperNet (a subsidiary of the Company) and $186,000 to the Company, which loans
were repaid, together with interest thereon, in December 1995 and August 1995,
respectively.
 
EXPERNET ACQUISITION
 
     In July 1995, Giga acquired (the 'ExperNet Acquisition') all of the
ExperNet Corporation shares owned by Mr. Gartner and a majority of the ExperNet
Corporation shares owned by Mr. Gilmour, aggregating 77.8% of ExperNet
Corporation's outstanding common stock, in exchange for (i) 160,000 shares of
Series A Preferred Stock (213,333 shares of Common Stock on an as-converted
basis) of the Company, 80,000 shares (106,667 shares on an as-converted basis)
of which were issued to Mr. Gartner and 80,000 shares (106,667 shares on an as-
converted basis) of which were issued to Mr. Gilmour, and (ii) the issuance to
Mr. Gartner of a fully-vested option to purchase 53,333 shares of Common Stock
at an exercise price of $1.50 per share. In December 1995, the Company acquired
Mr. Gilmour's remaining 22.2% interest in ExperNet Corporation in exchange for a
$400,000 6% Convertible Note due December 31, 2005 (the 'Gilmour Note'). The
Gilmour Note was repaid in full, together with interest thereon, by the Company
one-half in February 1998 and the remainder in April 1998. See '--Consulting
Agreement--Gilmour Agreement.' In addition, Mr. Gilmour made loans totalling
$101,000 to ExperNet Corporation, which loans were repaid in full, together with
interest thereon, by ExperNet Corporation in December 1995.
 
FINANCINGS
 
  Series A Preferred Stock Financing
 
     In July 1995 and October 1995, the Company issued and sold (the 'Series A
Financing') an aggregate of 570,000 shares of Series A Preferred Stock (760,001
shares of Common Stock on an as-converted basis) at a purchase price of $5.00
per share (or $3.75 per share of Common Stock) to a limited number of investors,
including 60,000 shares (80,000 shares on an as-converted basis) to Mr.
Brownstein, 15,000 shares (20,000 shares on an as-converted basis) to Mr.
Crandall and 10,000 shares (13,333 shares on an as-converted basis) to James D.
Robinson III, a former director of the Company.
 
  Series B Preferred Stock Financing
 
     In August 1995, the Company entered into a Convertible Promissory Note and

Warrant Purchase Agreement with RRE Giga Investors, L.P. ('RRE Giga'), pursuant
to which the Company borrowed $2.0 million from RRE Giga and issued RRE Giga a
convertible promissory note (the 'RRE Note') in the principal amount of $2.0
million and a warrant (the 'RRE Warrant') to purchase 285,714 shares of Series B
Preferred Stock (95,238 shares of Common Stock on an as-converted basis) at an
exercise price of $2.345 per share (or $7.035 per share of Common Stock). In
November 1995, the RRE Note was converted into 571,428 shares of Series B
Preferred Stock (190,476 shares on an as-converted basis). In September 1996,
RRE Giga made a cashless exercise of the RRE Warrant and received 218,714 shares
of Series B Preferred Stock (72,905 shares on an as-converted basis). Mr.
Robinson is Chairman and Chief Executive Officer of RRE Investors, L.L.C., the
General Partner of RRE Giga.
 
     In November 1995, February 1996 and December 1996, the Company issued and
sold (the 'Series B Financing') an aggregate of 8,144,642 shares of Series B
Preferred Stock (2,714,878 shares of Common Stock on an as-converted basis), at
a purchase price of $3.50 per share (or $10.50 per share of Common Stock), to a

                                       39
limited number of investors, including 40,000 shares of Series B Preferred Stock
to Mr. Brownstein and certain members of his family for aggregate consideration
of $140,000. The following entities which also purchased stock are affiliates of
directors and/or principal stockholders of the Company also purchased stock:
ENTITIES AFFILIATED WITH:                                            NO. OF SHARES      AGGREGATE CONSIDERATION PAID
------------------------------------------------------------------   -------------      ----------------------------
21st Century Communications Partners, L.P.........................     1,714,286               $6,000,000
S2 Technology Corporation.........................................     1,116,398                3,907,393
RRE Giga Investors, L.P...........................................       859,999                3,009,997
Montgomery Small Cap Partners, L.P................................     1,029,714                3,604,000
Wanger Asset Management, L.P......................................       885,714                3,100,000
Mr. Lieber, a director of the Company, is a corporate officer of InfoMedia
Associates, Ltd., which is a General Partner of 21st Century Communications
Partners, L.P. ('21-CCP'), 21st Century Communications T-E Partners, L.P.
('21-CCTEP') and 21st Century Communications Foreign Partners, L.P. ('21-CCFP').
Mr. Robinson, a former director of the Company, is Chairman and Chief Executive
Officer of RRE Investors, L.L.C., the General Partner of RRE Giga and RRE Giga
Investors II, L.P. ('RRE Giga II').
 
  Series C Preferred Stock Financing
 
     In May and December 1997, the Company issued and sold (the 'Series C
Financing') an aggregate of 2,609,491 shares of Series C Preferred Stock
(1,021,429 shares of Common Stock on an as-converted basis) at a purchase price
of $4.11 per share (or $10.50 per share of Common Stock). The Series C Preferred
Stock entitled investors to receive warrants to purchase up to 54% additional
shares of Series C Preferred Stock based upon the Company's NAVI for fiscal

1997. In January 1998, the Company issued warrants to purchase an aggregate of
an additional 1,409,127 shares of Series C Preferred Stock (551,574 shares on an
as-converted basis) at an exercise price of $5.28 per share (or $13.50 per
share of Common Stock). The following persons and entities who are executive
officers, directors, affiliates of directors and/or principal stockholders of
the Company invested in Series C Preferred Stock:
SHARES OF                   AGGREGATE
                                                                  SERIES C     SERIES C     CONSIDERATION
NAME                                                                STOCK      WARRANTS         PAID
---------------------------------------------------------------   ---------    ---------    -------------
Entities affiliated with Dawson-Samberg Capital Management,
  Inc..........................................................   1,946,473    1,051,095     $ 8,000,000
Gideon I. Gartner..............................................      60,827       32,847         250,000
Richard Crandall Trust.........................................      30,414       16,424         125,000
Bernard Goldstein..............................................      24,331       13,139         100,000
Neill H. Brownstein............................................      60,827       32,827         250,000
Series D Preferred Stock Financing
 
     In April and May 1998, the Company issued and sold (the 'Series D
Financing') an aggregate of 285,714 shares of Series D Preferred Stock (190,476
shares of Common Stock on an as-converted basis), at a purchase price of $7.00
per share (or $10.50 per share of Common Stock), and warrants to purchase an
additional 154,286 shares of Series D Preferred Stock (102,858 shares on an
as-converted basis), at an exercise price of $9.00 per share (or $13.50 per
share of Common Stock). Acorn Fund, a series of Acorn Investment Trust, which is
managed by Wanger Asset Management, L.P. purchased 71,429 shares of Series D
Preferred Stock and received warrants to purchase an additional 38,572 shares of
Series D Preferred Stock for an aggregate consideration of $500,003.
 
CONSULTING AGREEMENTS
 
  Crandall Consulting Agreement
 
     In August 1995, the Company entered into a consulting arrangement with Mr.
Crandall. The arrangement provided for payment to Mr. Crandall of $50,000 per
annum in 1995 and $60,000 per annum in 1996. In lieu of certain payments due to
Mr. Crandall, the Company issued to Mr. Crandall 40,000 shares of Common Stock
at a purchase price of $1.50 per share. The shares are subject to vesting and
certain restrictions on transfer. In July 1996, as compensation for the
consulting services to be rendered by Mr. Crandall to the Company for the
twelve-
 
                                       40
month period ended June 30, 1997, the Company granted to Mr. Crandall an option
to purchase 6,667 shares of Common Stock at an exercise price of $1.80 per
share. Twenty-five percent of the shares subject to the option vested one year

from the date of grant and one forty-eighth of the shares have vested monthly
thereafter. In February 1997, as compensation for the extension of Mr.
Crandall's consulting services through June 1998, and the devotion of one-third
of his time to such matters, the Company granted to Mr. Crandall, effective
January 1, 1997, 16,667 shares of Common Stock and an option to purchase 8,333
shares of Common Stock at an exercise price of $3.00 per share. One sixth of
such shares of Common Stock have vested quarterly since the effective date of
grant. Twenty-five percent of the shares subject to the option vested one year
from the effective date of grant and one thirty-sixth have vested monthly
thereafter. 

 
  Brownstein Financing and Consulting Agreement
 
     In October 1995, the Company sold to Mr. Brownstein 26,667 shares of Common
Stock at a purchase price of $1.50 per share. The shares are subject to vesting
and certain restrictions on transfer.
 
     In January 1996, the Company entered into a one-year consulting agreement
with the Neill H. Brownstein Corporation (the 'Brownstein Corporation'), of
which the sole shareholder is Neill H. Brownstein, a director of the Company.
Pursuant to the consulting agreement, the Brownstein Corporation received a
consulting fee of $60,000, plus reasonable expenses, payable quarterly. The
Brownstein Corporation agreed that during the term of the agreement and for a
period of one year thereafter, the Brownstein Corporation would not use any of
the Company's proprietary or confidential information or disclose such
proprietary and confidential information to any third party.
 
  Gilmour Agreement
 
     In February 1998, the Company entered into an agreement (the 'Gilmour
Agreement') with Mr. Gilmour, a director and co-founder of the Company, relating
to Mr. Gilmour's continuing relationship with the Company in light of Mr.
Gilmour's desire to establish Tacit Knowledge Systems ('Tacit'), a company to be
engaged in the development and commercialization of various forms of software
related to the automatic capture of knowledge through messaging systems (the
'Software'). The Gilmour Agreement superseded Mr. Gilmour's employment
agreement, dated July 6, 1995, pursuant to which Mr. Gilmour served as Senior
Vice President, Research, was elected a director and received a salary at the
rate of $160,000 per annum commencing September 1, 1995. The Gilmour Agreement
provides that Mr. Gilmour will remain a director of the Company and, for at
least six months, will serve as a consultant to the Company, acting as chief
research officer and devoting approximately 25% of his time to such duties. Mr.
Gilmour will be compensated at the rate of $50,000 per annum for such services.
 
     The Gilmour Agreement also provides that the Company will receive a 7.5%
equity interest in Tacit upon its formation, will be entitled to participate in
future Tacit financings and will be granted an irrevocable, royalty-free,
worldwide license to use any and all software, products and technologies that
Tacit develops through January 2001. The Company has the option of extending the
license for two additional one-year periods for a fee of $50,000 per annum. The
Company also agreed that the Software shall not constitute 'Development' or
'Proprietary Information' as such terms are defined in the Invention and
Non-Disclosure Agreement, dated July 6, 1995, between the Company and Mr.

Gilmour. In addition, the Gilmour Agreement contained non-competition and
no-raid provisions, which are to survive for one year following a voluntary
termination by Mr. Gilmour of his consulting relationship with the Company.
 
     The Gilmour Agreement also resolved the status of certain of the Company's
securities held by Mr. Gilmour. The Company agreed not to exercise its rights to
repurchase the Series A Preferred Stock that was issued to Mr. Gilmour in
connection with the ExperNet Acquisition. As of the date of the Gilmour
Agreement, of the options that had been granted to Mr. Gilmour to purchase
40,000 shares of Common Stock at an exercise price of $1.50 per share, options
to purchase 15,000 shares remained unvested. It was agreed that these unvested
options would vest at a revised rate of one ninety-sixth of such options per
month thereafter. Furthermore, the
 
                                       41
Company agreed to redeem the Gilmour Note, including accrued interest thereon,
one-half in February 1998 and the remainder in April 1998.
 
CERTAIN STOCKHOLDER RIGHTS
 
     For a description of certain other registration rights of, and stock
transfer restrictions imposed on, certain executive officers, directors,
affiliates of directors and/or principal stockholders of the Company, see
'Description of Capital Stock--Registration Rights Agreement' and '--Co-Sale
Agreement.'
 
CERTAIN EMPLOYMENT AND RELATED ARRANGEMENTS
 
     In March 1998, the Company granted options to purchase 100,000, 8,000,
8,000, and 8,000 shares of Common Stock to Messrs. Gartner, Graham, Clarke and
Crandall, respectively. See Note 15 to the Consolidated Financial Statements.
 
     For a description of certain other employment and other arrangements
between the Company and certain executive officers and directors of the Company,
see 'Management--Executive Compensation' and 'Management--Employment and Related
Agreements.'

                            ------------------------
 
     The Company believes that the securities issued in the transactions
involving the Company described above were sold by the Company at their then
fair market value and that the terms of the transactions described above were no
less favorable than the Company could have obtained from unaffiliated third
parties. The Company has adopted a policy, effective following the consummation
of the Offering, that all material transactions between the Company and its
officers, directors and other affiliates must (i) be approved by a majority of
the members of the Company's Board of Directors and by a majority of the
disinterested members of the Company's Board of Directors and (ii) be on terms
no less favorable to the Company than could be obtained from unaffiliated third
parties. In addition, this policy will require that any loans by the Company to
its officers, directors or other affiliates be for bona fide business purposes
only.

 
                                       42
PRINCIPAL STOCKHOLDERS
 
     The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of May 1, 1998 (assuming the
conversion of all outstanding shares of Convertible Preferred Stock into Common
Stock, after giving effect to the Reverse Stock Split), and as adjusted to
reflect the sale of the shares of Common Stock offered hereby, by (i) each
person or entity known to the Company to beneficially own more than 5% of the
Company's Common Stock, (ii) each of the Company's directors, (iii) each of the
Named Executive Officers and (iv) all directors and executive officers as a
group.
PERCENTAGE OF SHARES
                                                                                                BENEFICIALLY OWNED (2)
                                                                       NUMBER OF SHARES         -----------------------
                       NAME AND ADDRESS OF                            BENEFICIALLY OWNED         BEFORE         AFTER
                         BENEFICIAL OWNER                            PRIOR TO OFFERING(1)       OFFERING       OFFERING
------------------------------------------------------------------   --------------------       --------       --------
21st Century Communications Partners, L.P.........................            571,429(3)           8.3
  767 Fifth Avenue, 45th floor
  New York, NY 10153
Entities affiliated with S2 Technology Corporation................            443,897(4)           6.5
  515 Madison Avenue, Suite 4200
  New York, NY 10022
RRE Giga Investors, L.P...........................................            359,571(5)           5.3
  126 East 56th Street, 22nd floor
  New York, NY 10022
Funds managed by Wanger Asset Management, L.P.....................            368,570(6)           5.4
  227 West Monroe Street, Suite 3000
  Chicago, IL 60606
Pequot Private Equity Fund, L.P...................................          1,173,337(7)          16.2
  354 Pequot Avenue
  Southport, CT 06490-0760
Gideon I. Gartner.................................................          2,256,113(8)          31.9
  c/o Giga Information Group, Inc.
  One Longwater Circle
  Norwell, MA 02061
Neill H. Brownstein...............................................            156,666(9)           2.3
Richard L. Crandall...............................................            102,888(10)          1.5
David L. Gilmour..................................................            132,448(11)          1.9
Bernard Goldstein.................................................             41,334(12)            *
Irwin Lieber......................................................            835,238(13)         12.2
Josh S. Weston....................................................                  0               --
Henry Givray......................................................              6,250                *
Jacques Bouvard...................................................                  0               --
All directors and executive officers as a group (11 persons)......          3,540,936(14)         49.8
------------------
* Less than 1%
 
(1) Each stockholder possesses sole voting and investment power with respect to
    the shares listed, except as otherwise noted. Amounts shown include shares
    issuable within the 60-day period following May 1, 1998 pursuant to the
    exercise of options or warrants.
 
(2) On May 1, 1998, there were 6,846,256 shares of Common Stock outstanding,
    assuming the conversion of all outstanding shares of all series of Preferred
    Stock into Common Stock.
 
(3) Includes 387,443 shares of Common Stock held by 21-CCP, 131,853 shares of
    Common Stock held by 21-CCTEP and 52,133 shares of Common Stock held by
    21-CCFP.
 
                                              (Footnotes continued on next page)
 
                                       43
(Footnotes continued from previous page)
(4) S2 Technology Corporation ('S Squared'), an investment manager, is the
    General Partner of (i) Sci-Tech Investment Partners L.P., which holds 32,686
    shares of Common Stock, (ii) S.G. Partners, L.P., which holds 53,165 shares
    of Common Stock, and (iii) Executive Technology, L.P., which holds 22,027
    shares of Common Stock. Seymour L. Goldblatt, the President of S Squared, is
    the Managing Director of both The Matrix Technology Group N.V., which holds
    13,249 shares of Common Stock, and Core Technology Fund, Inc., which holds
    87,650 shares of Common Stock. S Squared serves as an investment advisor to
    each of the foregoing funds and exercises by agreement investment and voting
    power on behalf of each fund. Mr. Goldblatt, as president of S Squared, also
    exercises by agreement investment and voting power for the following funds:
    (i) Yale University, which holds 174,860 shares of Common Stock, (ii) Yale
    University Retirement Plan for Staff Employees, which holds 8,584 shares of
    Common Stock, (iii) Montsol Investments N.V., which holds 8,820 shares of
    Common Stock, (iv) Alfred University, which holds 6,883 shares of Common
    Stock, (v) Foundation Partners, which holds 6,772 shares of Common Stock,
    (vi) Tampsco II Partnership, which holds 3,772 shares of Common Stock and
    (vii) Hare & Co., which holds 25,429 shares of Common Stock.
 
(5) Includes 263,381 shares held by RRE Giga Investors, L.P. ('RRE Giga') and
    96,190 shares of Common Stock held by RRE Giga Investors II, L.P. ('RRE Giga
    II'). James D. Robinson III is the record owner of 13,333 shares of Common
    Stock. Mr. Robinson is a General Partner of RRE Investors, L.L.C., the
    General Partner of RRE Giga and RRE Giga II. Mr. Robinson disclaims
    beneficial ownership of such shares, except to the extent of his pecuniary
    interest in such shares. Mr. Robinson shares dispositive and voting power of
    such shares with the General Parters of RRE Investors, L.L.C.
 
(6) Includes 199,998 shares of Common Stock held by Akkad and 168,572 shares of
    Common Stock held by Acorn Fund, a series of Acorn Investment Trust (25,715
    shares of which are subject to the exercise of warrants). Wanger Asset

    Management, L.P. serves as the investment manager to each of these entities
    and possesses investment and voting power with respect to each such entity
    but disclaims beneficial ownership.
 
(7) Includes 1,041,474 shares of Common Stock held by Pequot Private Equity
    Fund, L.P. (365,193 shares of which are subject to the exercise of warrants)
    and 131,863 shares of Common Stock held by Pequot Offshore Private Equity
    Fund, L.P. (46,238 shares of which are subject to the exercise of warrants).
    Dawson-Samberg Capital Management, Inc. serves as the investment manager to
    each of these entities and possesses investment and voting power with
    respect to each such entity but disclaims beneficial ownership.
 
(8) Includes options to purchase 220,000 shares of Common Stock and warrants to
    purchase 12,857 shares of Common Stock. Also includes 220,335 shares of
    Common Stock which are held of record by members of Mr. Gartner's family.
    Mr. Gartner disclaims beneficial ownership of shares held by members of his
    family.
 
(9) Includes 8,000 shares of Common Stock held by Mr. Brownstein's children and
    5,333 shares of Common Stock held by Mr. Brownstein and his spouse jointly.
    Mr. Brownstein disclaims beneficial ownership of the 6,000 shares of Common
    Stock held by his adult children, Adam J. and Todd D. Brownstein, and Will
    Gordon, the adult child of his spouse. Mr. Brownstein disclaims beneficial
    ownership of the 2,000 shares of Common Stock held by his minor child, Emily
    Hamilton; however, Mr. Brownstein claims investment and voting power with
    respect to these shares. Of the shares held by Mr. Brownstein directly,
              of such shares are subject to repurchase by the Company under
    certain circumstances.
 
(10) Includes 38,334 shares of Common Stock held by R. Crandall Trust, of which
     Mr. Crandall serves as trustee (6,429 shares of which are subject to the
     exercise of warrants). Also includes options to purchase 7,188 shares of
     Common Stock. Also includes           shares of Common Stock which are
     subject to repurchase by the Company under certain circumstances.
 
(11) Includes options to purchase 25,781 shares of Common Stock.
 
(12) Includes warrants to purchase 5,143 shares of Common Stock.
 
                                              (Footnotes continued on next page)
 
                                       44
(Footnotes continued from previous page)
(13) Includes 387,443 shares of Common Stock held by 21-CCP, 131,853 shares of
     Common Stock held by 21-CCTEP, 52,133 shares of Common Stock held by
     21-CCFP, 246,646 shares of Common Stock held by Wheatley Partners, L.P.
     ('Wheatley') and 17,163 shares of Common Stock held by Wheatley Foreign
     Partners, L.P. ('Wheatley Foreign'). Mr. Lieber, a director of the Company,
     is a corporate officer of InfoMedia Associates Ltd., a General Partner of
     21-CCP, 21-CCTEP, 21-CCFP and a General Partner of Wheatley LLC, a General
     Partner of Wheatley and Wheatley Foreign. Mr. Lieber disclaims beneficial
     ownership of such shares, except to the extent of his pecuniary interest in

     such shares. Mr. Lieber shares dispositive and voting power of such shares
     with the General Partners of the General Partner of Wheatley and Wheatley
     Foreign and with the other officers of the General Partner of 21-CCP,
     21-CCTEP and 21-CCFP.
 
(14) Includes 264,015 shares of Common Stock issuable upon exercise of options
     and shares of Common Stock issuable upon exercise of warrants held by all
     directors and executive officers as a group. Also includes           shares
     of Common Stock held by all directors and executive officers as a group
     which may be repurchased by the Company under certain circumstances.
 
                                       45
DESCRIPTION OF CAPITAL STOCK
 
     At May 1, 1998, there were outstanding an aggregate of 2,159,472 shares of
Common Stock, 570,000 shares of Series A Preferred Stock, 8,144,642 shares of
Series B Preferred Stock, 2,609,491 shares of Series C Preferred Stock and
285,715 shares of Series D Preferred Stock of the Company. Upon the closing of
the Offering, all of such shares of Convertible Preferred Stock will
automatically be converted into an aggregate of 4,687,784 shares of Common
Stock. All of the shares of Convertible Preferred Stock that have been converted
will cease to be outstanding and may not be reissued. See 'Capitalization.'
 
COMMON STOCK
 
     The Restated Certificate, which will become effective upon the closing of
the Offering, will authorize the issuance of up to 60,000,000 shares of Common
Stock, $.001 par value per share. Holders of Common Stock are entitled to one
vote for each share held on all matters submitted to a vote of stockholders and
do not have cumulative voting rights. Accordingly, holders of a majority of the
shares of Common Stock entitled to vote in any election of directors may elect
all of the directors standing for election. Holders of Common Stock are entitled
to receive ratably such dividends, if any, as may be declared by the Board of
Directors out of funds legally available therefor. Upon the liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to receive ratably the net assets of the Company available after the
payment of all debts and other liabilities. Holders of Common Stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of Common Stock are, and the shares offered by the Company in the
Offering will be, when issued and paid for, fully paid and nonassessable.
 
PREFERRED STOCK
 
     Upon the consummation of the Offering, the Restated Certificate will
authorize the issuance of up to 5,000,000 shares of Preferred Stock, $.001 par
value per share. Under the terms of the Restated Certificate, the Board of
Directors is authorized, subject to any limitations prescribed by law, without
stockholder approval, to issue such shares of Preferred Stock in one or more
series. Each such series of Preferred Stock shall have such rights, preferences,
privileges and restrictions, including voting rights, dividend rights,
conversion rights, redemption privileges and liquidation preferences, as shall
be determined by the Board of Directors.
 
     The purpose of authorizing the Board of Directors to issue Preferred Stock
and determine its rights and preferences is to eliminate delays associated with
a stockholder vote on specific issuances. The issuance of Preferred Stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire, or of discouraging a third party from acquiring, a
majority of the outstanding voting stock of the Company. The Company has no
present plans to issue any shares of Preferred Stock.
 
WARRANTS
 

     At May 1, 1998, there were outstanding warrants to purchase (i) 166,666
shares of Common Stock at an exercise price of $3.00 per share, (ii) 107,876
shares of Series B Preferred Stock at an exercise price of $4.625 per share, 
(iii) 1,654,724 shares of Series C Preferred Stock at an exercise price of $5.28
per share and (iv) 308,572 shares of Series D Preferred Stock at an exercise
price of $9.00 per share. Upon the closing of the Offering, all of such warrants
to purchase Convertible Preferred Stock will be converted to warrants to
purchase Common Stock and there will be outstanding warrants to purchase 166,666
shares of Common Stock at an exercise price of $3.00 per share, 654,432 shares
of Common Stock at an exercise price of $13.50 per share and 35,959 shares of
Common Stock at an exercise price of $13.875 per share. The holders of such
warrants have no rights as stockholders until the exercise thereof.

 
                                       46
REGISTRATION RIGHTS AGREEMENT
 
     In connection with its preferred stock financings, the Company entered into
a Registration Rights Agreement, dated November 13, 1995, as amended (the
'Registration Rights Agreement'), with its preferred stockholders (the
'Investors') and Messrs. Gartner and Gilmour (the 'Management Persons'). The
Registration Rights Agreement provides that, following June 30, 1998, the
holders of at least 30% of the Registrable Securities (as defined therein) then
outstanding, excluding shares held by Management Persons, shall have two demand
registration requests (no more than one within a twelve-month period). At such
time as the Company becomes eligible to file a registration statement under the
Securities Act on Form S-3, the holders of at least 20% of the Registrable
Securities then outstanding may make six additional demand registration requests
(no more than one within a six-month period). The Registration Rights Agreement
also provides the holders of Registrable Securities with unlimited piggyback
registration rights in the event the Company proposes to register its Common
Stock under the Securities Act in connection with a public offering. The Company
has obtained a waiver from the holders of a majority of the Registrable
Securities of their piggyback registration rights in connection with the
Offering.
 
     Pursuant to the Registration Rights Agreement, the Company will pay all
expenses (other than underwriting discounts and commissions) incurred in
connection with demand registrations and piggyback registrations. In addition,
the Company has agreed to indemnify each holder of Registrable Securities and
any underwriter for such holder against certain liabilities, including
liabilities under federal or state securities laws. The Registration Rights
Agreement terminates with respect to each holder of Registrable Securities upon
the later of (i) three years following the consummation of a Qualified Public
Offering (as defined therein) or (ii) such time following an initial public
offering of the Company as such holder is entitled under Rule 144 to dispose of
all the Registrable Securities held by such holder during any 90-day period.
 
CO-SALE AGREEMENT
 

     In connection with its preferred stock financings, the Company also entered
into a Co-Sale and Stock Restriction Agreement, dated November 13, 1995, as
amended (the 'Co-Sale Agreement') with Mr. Gartner (the 'Founder') and the
Series B Preferred Stockholders (the 'Stockholders'). The Co-Sale Agreement
provides that, except for certain limited sales and sales to the Company, if the
Founder proposes to sell or transfer shares of Common Stock (including shares of
Common Stock issuable upon conversion or exercise of any warrants, options or
preferred stock held by the Founder) ('Stock') in one or more transactions, the
Founder shall promptly give written notice to the Company and the Stockholders
and each Stockholder shall have the right to participate pro-rata in such sale
on the same terms and conditions. In addition, the Co-Sale Agreement provides
that each Stockholder has the right of first offer to purchase such
Stockholder's pro-rata share of all (or any part) of any Stock that the Founder
may from time to time propose to sell. Notwithstanding the foregoing provisions,
the Co-Sale Agreement provides that the Founder may not sell or transfer more
than an aggregate of 266,667 shares of Stock during the three-year period ending
November 1, 1998, subject to limited exceptions, including sales to the Company.
The Co-Sale Agreement terminates upon the earlier of (i) two years following the
closing of a qualified public offering (as described therein) or (ii) the
closing of the Company's sale of all or substantially all of its assets or the
acquisition of the Company by another entity by means of merger or consolidation
resulting in the exchange of the outstanding shares of the Company's capital
stock for securities or consideration issued by the acquiring entity or its
subsidiary.
 
DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS
 
     The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. Section 203 prohibits a publicly-held Delaware
corporation from engaging in a 'business combination' with an 'interested
stockholder' for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. A 'business combination'
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. Subject to certain exceptions, an
'interested stockholder' is a person who, together with affiliates and
associates, owns, or within the past three years did own, 15% or more of a
corporation's voting stock.
 
                                       47
The Restated Certificate provides for the division of the Board of
Directors into three classes as nearly equal in size as possible with staggered
three-year terms. See 'Management.' In addition, the Restated Certificate
provides that directors may be removed only for cause by the affirmative vote of
the holders of two-thirds of the shares of capital stock of the Company entitled
to vote. Under the Restated Certificate, any vacancy on the Board of Directors,
however occurring, including a vacancy resulting from an enlargement of the
Board, may only be filled by vote of a majority of the directors then in office.
The classification of the Board of Directors and the limitations on the removal
of directors and filling of vacancies could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from

acquiring, control of the Company.
 
     The Restated Certificate also provides that, after the consummation of the
Offering, any action required or permitted to be taken by the stockholders of
the Company at an annual meeting or special meeting of stockholders may only be
taken if it is properly brought before such meeting and may not be undertaken by
written action in lieu of a meeting. The Restated Certificate further provides
that special meetings of the stockholders may only be called by the Chairman of
the Board of Directors, the Chief Executive Officer or, if none, the President
of the Company or by the Board of Directors. Under the Company's Amended and
Restated By-Laws (the 'By-Laws'), which will become effective upon the closing
of the Offering, in order for any matter to be considered 'properly brought'
before a meeting, a stockholder must comply with certain requirements regarding
advance notice to the Company. The foregoing provisions could have the effect of
delaying until the next stockholders' meeting stockholder actions which are
favored by the holders of a majority of the outstanding voting securities of the
Company. These provisions may also discourage another person or entity from
making a tender offer for the Company's Common Stock, because such person or
entity, even if it acquired a majority of the outstanding voting securities of
the Company, would be able to take action as a stockholder (such as electing new
directors or approving a merger) only at a duly called stockholders meeting, and
not by written consent.
 
     The General Corporation Law of Delaware provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's certificate of incorporation or by-laws,
unless a corporation's certificate of incorporation or by-laws, as the case may
be, requires a greater percentage. The Restated Certificate and the By-Laws
require the affirmative vote of the holders of at least two-thirds of the shares
of capital stock of the Company issued and outstanding and entitled to vote to
amend or repeal any of the provisions described in the prior two paragraphs.
 
     The Restated Certificate contains certain provisions permitted under the
General Corporation Law of Delaware relating to the liability of directors. The
provisions eliminate a director's liability for monetary damages for a breach of
fiduciary duty, except in certain circumstances involving wrongful acts, such as
the breach of a director's duty of loyalty or acts or omissions which involve
intentional misconduct or a knowing violation of law. Further, the Restated
Certificate contains provisions to indemnify the Company's directors and
officers to the fullest extent permitted by the General Corporation Law of
Delaware. The Company believes that these provisions will assist the Company in
attracting and retaining qualified individuals to serve as directors.
 
TRANSFER AGENT AND REGISTRAR
 
     The transfer agent and registrar for the Common Stock will be American
Stock Transfer & Trust Company.
 
                                       48
SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon consummation of the Offering, based on the number of shares

outstanding at                         , 1998, there will be            shares
of Common Stock outstanding. Of these shares, the            shares of Common
Stock sold in the Offering will be freely transferable without restriction under
the Securities Act, except that any shares purchased by 'affiliates' of the
Company, as that term is defined in Rule 144 under the Securities Act ('Rule
144'), generally must be sold in compliance with the limitations of Rule 144
described below. The remaining            shares of Common Stock outstanding
will be 'restricted securities' as that term is defined in Rule 144 (the
'Restricted Shares').
 
     Restricted Shares may be sold in the public market only if registered or if
they qualify for an exemption from registration under Rules 144, 144(k) or 701
promulgated under the Securities Act, which rules are summarized below. Subject
to the lock-up agreements described below and the provisions of Rules 144,
144(k) and 701, additional shares will be available for sale in the public
market (subject in the case of shares held by affiliates to compliance with
certain volume restrictions) as follows: (i) no shares will be available for
immediate sale in the public market on the date of the Prospectus, (ii)
           shares will be eligible for resale 90 days after the date of this
Prospectus, (iii)            shares will be eligible for resale upon expiration
of lock-up agreements 180 days after the date of this Prospectus, and thereafter
(iv) the remaining            shares will be eligible for sale upon expiration
of their respective one-year holding periods.
 
     In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned Restricted Shares for at
least one year, including persons who may be deemed affiliates of the Company,
would be entitled to sell within any three-month period, subject to meeting
certain manner of sale and notice requirements, a number of shares that does not
exceed the greater of (i) one percent of the number of shares of Common Stock
then issued and outstanding (           shares upon consummation of the
Offering) and (ii) the average weekly trading volume of the Common Stock during
the four calendar weeks preceding the filing of a Form 144 notice of sale with
the Securities and Exchange Commission. A person who is not deemed to have been
an affiliate of the Company at any time during the 90 days preceding a sale, and
who has beneficially owned the shares proposed to be sold for at least two
years, is entitled to sell such shares under Rule 144(k) without regard to the
volume limitations described above. Affiliates whose shares are not Restricted
Shares must nonetheless comply with the same Rule 144 restrictions applicable to
Restricted Shares with the exception of the one year holding period requirement.
 
     Rule 701 promulgated under the Securities Act provides that shares of
Common Stock acquired on the exercise of outstanding options may be resold by
persons, other than affiliates, beginning 90 days after the date of this
Prospectus, subject only to the manner of sale provisions of Rule 144, and by
affiliates, beginning 90 days after the date of this Prospectus, subject to all
provisions of Rule 144 except its two-year minimum holding period.
 
     The Company and its executive officers, directors and stockholders (who in
the aggregate will beneficially own approximately            Restricted Shares,
including            shares of Common Stock that may be acquired by them upon
the exercise of stock options exercisable with 60 days of                      ,
1998) have agreed that, subject to certain limited exceptions, for a period
ending 180 days after the consummation of the Offering, without the prior

written consent of Friedman, Billings, Ramsey & Co., Inc., they will not,
directly or indirectly, offer, pledge, sell, offer to sell, contract to sell,
grant any option to purchase or otherwise sell, dispose of, make any short sale
of, loan or grant any rights with respect to any shares of Common Stock, any
options or warrants to purchase any shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, shares of Common Stock.
See 'Underwriting.'
 
     The Company intends to file registration statements on Form S-8 under the
Securities Act to register all shares of Common Stock issuable under the 1995
Stock Plan and the 1996 Option Plan. These registration statements are expected
to be filed approximately 180 days after the effective date of the Registration
Statement of which this Prospectus is a part and will be effective upon filing.
Shares issued upon the exercise of stock options after the effective date of the
Form S-8 registration statements will be eligible for resale in the public
market without restriction, subject to Rule 144 limitations applicable to
affiliates and the lock-up agreements noted above.
 
                                       49
As of                      , 1998, the holders of            shares of
Common Stock and warrants to purchase            shares of Common Stock are
entitled to certain demand and/or piggyback registration rights with respect to
such shares (the 'Registrable Shares'). See 'Description of Capital
Stock--Registration Rights Agreement.'
 
     Prior to the Offering, there has been no public market for the Common Stock
of the Company, and no prediction can be made as to the effect, if any, that
market sales of shares of Common Stock or the availability of shares for sale
will have on the market price of the Common Stock prevailing from time to time.
Nevertheless, sales of significant numbers of shares of the Common Stock in the
public market could adversely affect the market price of the Common Stock and
could impair the Company's future ability to raise capital through an offering
of its equity securities.
 
                                       50
UNDERWRITING
 
     Subject to the terms and conditions of the underwriting agreement among the
Company and the Underwriters (the 'Underwriting Agreement'), the Underwriters
named below, through their Representative, Friedman, Billings, Ramsey & Co.,
Inc. ('FBR'), have severally agreed to purchase from the Company the following
respective numbers of shares of Common Stock:
NUMBER OF
UNDERWRITERS                                                                         SHARES
------------                                                                    -   ---------
Friedman, Billings, Ramsey & Co., Inc............................................
                                                                                    ---------
  Total..........................................................................
                                                                                    ---------
                                                                                    ---------
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent, including the absence
of any material adverse change in the Company's business and the receipt of
certain certificates, opinions and letters from the Company and its counsel and
independent auditors. The nature of the Underwriters' obligation is such that
they are committed to purchase all shares of Common Stock offered hereby if any
of such shares are purchased. The offering of Common Stock is made for delivery
when, as and if accepted by the Underwriters and subject to prior sale and to
withdrawal, cancellation or modification of the Offering without notice. The
Underwriters reserve the right to reject an order for the purchase of shares in
whole or in part.
 
     The Underwriters propose to offer the shares of Common Stock directly to
the public at the initial public offering price set forth on the cover page of
this Prospectus and to certain dealers at such price less a concession not in
excess of $          per share. The Underwriters may allow and such dealers may
re-allow a concession not in excess of $          per share to certain other
dealers. The Underwriters have informed the Company that they do not intend to
confirm sales to any accounts over which they exercise discretionary authority.
After the initial public offering of Common Stock, the offering price and other
selling terms may be changed by the Representatives of the Underwriters.
 
     The Company has granted to the Underwriters the over-allotment option,
exercisable no later than 30 days after the date of this Prospectus, to purchase
up to              additional shares of Common Stock at the initial public
offering price, less the underwriting discount, set forth on the cover page of
this Prospectus. To the extent the Underwriters exercise such over-allotment
option, each of the Underwriters will have a firm commitment to purchase
approximately the same percentage thereof that the number of shares of Common
Stock to be purchased by it shown in the table above bears to the total number
of shares of Common Stock offered hereby. The Company will be obligated,
pursuant to the over-allotment option, to sell shares to the Underwriters to the
extent the over-allotment option is exercised. The Underwriters may exercise the
over-allotment option only to cover over-allotments made in connection with the
sale of Common Stock offered hereby.
 
     The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments the Underwriters may be required to make in respect thereof. The
Company will reimburse the Underwriters for their reasonable out-of-pocket
expenses, including legal fees and expenses.

 
     Prior to the Offering, there has been no public market for Common Stock.
The initial public offering price for Common Stock will be determined by
negotiation among the Company and the Representatives. Among the factors to be
considered in determining the initial public offering price are prevailing
market conditions, revenues and earnings of the Company, market valuations of
other companies engaged in activities similar to the Company, estimates of the
business potential and prospects of the Company, the present state of the
Company's business operations, the Company's management and other factors deemed
relevant. The estimated initial public offering price range set forth on the
cover of this Prospectus is subject to change as a result of market conditions
and other factors. There can, however, be no assurance that the price at which
the shares of Common Stock will sell in the public market after the Offering
will not be lower than the price at which they are sold by the Underwriters.
 
                                       51
Until the distribution of the Common Stock is completed, the rules of the
SEC may limit the ability of the Underwriters and certain selling group members
to bid for or purchase Common Stock. As an exception to these rules, the
Representatives are permitted to engage in certain transactions that stabilize
the price of shares of Common Stock. Such transactions may consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of shares
Common Stock.
 
     If the Underwriters create a short position in shares of Common Stock in
connection with the Offering, i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus, the Representatives may
reduce that short position by purchasing shares of Common Stock in the open
market. The Representatives may also elect to reduce any short position by
exercising all or part of the over-allotment option described above.
 
     The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Common Stock in the open market to reduce the Underwriters' short
position or to stabilize the price of shares of Common Stock, they may reclaim
the amount of the selling concession from the Underwriters and selling group
members who sold such shares of Common Stock as part of the Offering.
 
     In general, purchases of securities for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
 
     Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of shares of Common Stock. In addition,
neither the Company nor any of the Underwriters makes any representation that
the Representatives will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
 
     The Company, its directors, officers and certain securityholders have each

agreed that it or they will not, without the prior written consent of FBR,
directly or indirectly, offer, pledge, sell, offer to sell, contract to sell,
grant any option to purchase or otherwise sell, dispose of, make any short sale
of, loan or grant any rights with respect to any shares of Common Stock, any
options or warrants to purchase any shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, shares of Common Stock for
the period ending 180 days after the consummation of the Offering, except that
the Company may grant additional options under its stock option plans.
 
     Up to    % of the shares of Common Stock offered hereby may be reserved for
sale to certain employees and directors of the Company and their family members,
at a price equal to the initial public offering price per share less the
underwriting discount. The number of shares available for sale to the general
public will be reduced to the extent such persons purchase such reserved shares.
Any reserved shares not so purchased will be offered by the Underwriters to the
general public on the same terms as the other shares offered hereby.
 
     In April 1998, the Company engaged FBR to act as its financial advisor and
lead underwriter in connection with the Offering and to provide certain other
investment banking services to the Company for customary fees.
 
     In April 1998, the Company entered into a Loan and Warrant Purchase
Agreement (the 'Loan Agreement') with certain affiliates of FBR (the 'Lenders'),
pursuant to which the Company borrowed $10.0 million from the Lenders (the
'Bridge Financing') and issued the Lenders the Bridge Notes in the aggregate
principal amount of $10.0 million and warrants (the 'Bridge Warrants') to
purchase an aggregate of 166,666 shares of Common Stock at an exercise price of
$3.00 per share. The Bridge Notes accrue interest at the rate of 12% per annum
on the principal amount thereof outstanding during the period beginning on the
date of issuance and ending on the Maturity Date (as defined below). The
obligations under the Bridge Notes are secured by substantially all of the
assets of the Company. The outstanding principal amount of, and any unpaid
accrued interest on, the Bridge Notes is due and payable on the consummation of
the Offering (the 'Maturity Date') and may be prepaid in whole or in part at any
time without penalty.
 
                                       52
LEGAL MATTERS
 
     The validity of the shares of Common Stock offered by the Company hereby
will be passed upon for the Company by Weil, Gotshal & Manges LLP, New York, New
York. Certain legal matters in connection with this Offering will be passed upon
for the Underwriters by Brobeck, Phleger & Harrison LLP, New York, New York.
 
                                    EXPERTS
 
     The consolidated balance sheets of the Company as of December 31, 1997 and
1996 and the consolidated statements of operations, changes in stockholders'
equity and cash flows for the period March 17, 1995 (the date of inception) to
December 31, 1995 and each of the years ended December 31, 1996 and 1997 and the
combined statements of operations and cash flows of BIS Strategic Decisions for
the period January 1, 1995 to April 5, 1995 included in this Prospectus have

been included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
 
                             ADDITIONAL INFORMATION
 
     The Company has filed with the Securities and Exchange Commission (the
'Commission'), Washington, D.C. 20549, a Registration Statement (which term
shall include all amendments, exhibits and schedules thereto) on Form S-1 under
the Securities Act with respect to the shares of Common Stock offered hereby.
This Prospectus, which constitutes a part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission, to which Registration Statement reference is hereby made.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to are not necessarily complete. With respect to each
such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference. The Registration Statement and the
exhibits thereto may be inspected and copied at prescribed rates at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of
the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. In
addition, the Company is required to file electronic versions of these documents
with the Commission through the Commission's Electronic Data Gathering, Analysis
and Retrieval (EDGAR) system. The Commission maintains a World Wide Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
 
                                       53
INDEX TO FINANCIAL STATEMENTS
PAGE(S)
                                                                                                      ----------------
GIGA INFORMATION GROUP, INC.:
Report of Independent Accountants..................................................................                F-2
Consolidated Balance Sheets at December 31, 1996 and 1997 and March 31, 1998 (unaudited)...........                F-3
Consolidated Statements of Operations for the period March 17, 1995 (date of inception) to December
  31, 1995; the years ended December 31, 1996 and 1997 and the three months ended March 31, 1997
  and 1998 (unaudited).............................................................................                F-4
Consolidated Statements of Changes in Stockholders' Equity for the period March 17, 1995 (date of
  inception) to December 31, 1995; the years ended December 31, 1996 and 1997 and the three months
  ended March 31, 1997 and 1998 (unaudited)........................................................                F-5
Consolidated Statements of Cash Flows for the period March 17, 1995 (date of inception) to December
  31, 1995; the years ended December 31, 1996 and 1997 and the three months ended March 31, 1997
  and 1998 (unaudited).............................................................................                F-6
Notes to Consolidated Financial Statements.........................................................         F-7 - F-25
 
BIS STRATEGIC DECISIONS:
Report of Independent Accountants..................................................................               F-26
Combined Statement of Operations for the period January 1, 1995 to April 5, 1995...................               F-27
Combined Statement of Cash Flows for the period January 1, 1995 to April 5, 1995...................               F-28
Notes to Combined Financial Statements.............................................................        F-29 - F-32
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders of
Giga Information Group, Inc.:
 
We have audited the accompanying consolidated balance sheets of Giga Information
Group, Inc. as of December 31, 1996 and 1997 and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
the period March 17, 1995 (date of inception) to December 31, 1995 and the years
ended December 31, 1996 and 1997. 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 consolidated financial position of Giga Information
Group, Inc. as of December 31, 1996 and 1997 and the results of its operations
and its cash flows for the period March 17, 1995 (date of inception) to December
31, 1995 and the years ended December 31, 1996 and 1997 in conformity with
generally accepted accounting principles.
 
Boston, Massachusetts
April 17, 1998, except for the information
in the final two paragraphs of Note 20, as to
which the date is May 11, 1998.
 
                                      F-2
GIGA INFORMATION GROUP, INC.
                          CONSOLIDATED BALANCE SHEETS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
DECEMBER 31,
                                                                                    ------------------     MARCH 31,
                                                                                     1996       1997         1998
                                                                                    -------    -------    -----------
                                                                                                          (UNAUDITED)
ASSETS
Current assets:
  Cash and cash equivalents......................................................   $ 8,286    $ 3,539      $ 1,753
  Trade accounts receivable, net of allowance for uncollectible accounts of $536,
    $483 and $405 at December 31, 1996 and 1997 and March 31, 1998,
    respectively.................................................................     3,391      8,961        5,684
  Unbilled accounts receivable...................................................     1,885      4,727        2,652
  Prepaid expenses and other current assets......................................     1,753      3,753        3,665
                                                                                    -------    -------    -----------
  Total current assets...........................................................    15,315     20,980       13,754
Property and equipment, net......................................................     2,397      1,695        1,678
Leasehold intangible (Note 3)....................................................       603        177           71
Goodwill, net of accumulated amortization of $1,507, $2,692 and $2,692 at
  December 31, 1996 and 1997 and March 31, 1998, respectively....................     1,186         --           --
Note receivable..................................................................       159         --           --
Other assets.....................................................................        19        171          170
                                                                                    -------    -------    -----------
    Total assets.................................................................   $19,679    $23,023      $15,673
                                                                                    -------    -------    -----------
                                                                                    -------    -------    -----------
 
                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Accounts payable...............................................................   $ 1,319    $ 2,213      $ 1,304
  Deferred revenues..............................................................     6,832     20,604       19,458
  Accrued expenses and other current liabilities.................................     5,557      6,385        5,033
  Debt--other, current portion...................................................        --      1,526        1,556
  Debt--related party, current portion...........................................        --        448          224
  Net liabilities of discontinued operations, current portion....................     1,494         --           --
                                                                                    -------    -------    -----------
  Total current liabilities......................................................    15,202     31,176       27,575
Long-term debt--related party....................................................       424         --           --
Long-term debt--other............................................................     1,087        937          848
Net liabilities of discontinued operations, less current portion.................     1,307         --           --
                                                                                    -------    -------    -----------
    Total liabilities............................................................    18,020     32,113       28,423

Commitments and other contingent liabilities (Note 12)

 
Stockholders' equity (deficit):
  Preferred Stock, $.001 par value; 12,000,000, 16,500,000 and 16,500,000 shares
    authorized at December 31, 1996 and 1997 and March 31, 1998, respectively:
    650,000 shares designated as Series A Convertible Preferred Stock, 570,000
      shares issued and outstanding (liquidation preference of $2,850,000).......         1          1            1
    9,000,000 shares designated as Series B Convertible Preferred Stock,
      8,144,642 shares issued and outstanding (liquidation preference of
      $28,506,000)...............................................................         8          8            8
    4,500,000 shares designated as Series C Convertible Preferred Stock, 0,
      2,609,491 and 2,609,491 shares issued and outstanding at December 31, 1996
      and 1997 and March 31, 1998, respectively (liquidation preference of
      $10,725,000)...............................................................        --          3            3
    Common Stock, $.001 par value; 50,000,000 shares authorized, 2,026,738,
      2,093,107 and 2,124,142 shares issued and outstanding at December 31, 1996
      and 1997 and March 31, 1998, respectively..................................         6          6            6
Additional paid-in capital.......................................................    30,638     41,282       42,584
Stock subscriptions receivable...................................................       (25)        --           --
Deferred Compensation............................................................        --         --       (1,229)
Accumulated deficit..............................................................   (29,112)   (50,929)     (54,736)
Cumulative translation adjustments...............................................       143        539          613
                                                                                    -------    -------    -----------
Total stockholders' equity (deficit).............................................     1,659     (9,090)     (12,750)
                                                                                    -------    -------    -----------
    Total liabilities and stockholders' equity (deficit).........................   $19,679    $23,023      $15,673
                                                                                    -------    -------    -----------
                                                                                    -------    -------    -----------
The accompanying notes are an integral part of the consolidated financial
                                  statements.
                                      F-3
GIGA INFORMATION GROUP, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
YEAR ENDED DECEMBER         THREE MONTHS ENDED
                                                       MARCH 17 TO                31,                     MARCH 31,
                                                       DECEMBER 31,      ----------------------      --------------------
                                                           1995            1996          1997         1997         1998
                                                       ------------      --------      --------      -------      -------
                                                                                                         (UNAUDITED)
Revenues:
  Continuous information services...................                     $  3,149      $ 14,600      $ 2,570      $ 6,804
  Other services....................................     $  5,517           6,043         4,715        1,276        1,693
  Publications......................................        1,442             946           344          180           55
                                                       ------------      --------      --------      -------      -------
  Total revenues....................................        6,959          10,138        19,659        4,026        8,552
Costs and expenses:
  Cost of services..................................        4,707          12,336        12,477        3,202        4,391
  Cost of publications..............................          346             790           174           75           71
  Sales and marketing...............................        1,016           6,706        19,617        4,158        5,781
  Research and development..........................          348           1,789         1,975          659          339
  General and administrative........................        5,760           9,739         6,419        1,061        1,339
  Depreciation and amortization.....................        1,387           2,391         2,810          634          385
                                                       ------------      --------      --------      -------      -------
  Total costs and expenses..........................       13,564          33,751        43,472        9,789       12,306
                                                       ------------      --------      --------      -------      -------
Loss from operations................................       (6,605)        (23,613)      (23,813)      (5,763)      (3,754)
                                                       ------------      --------      --------      -------      -------
Interest income.....................................          246             515           277           98           37
Interest expense....................................         (100)            (95)         (235)         (17)         (86)
                                                       ------------      --------      --------      -------      -------
  Loss from continuing operations before income
    taxes...........................................       (6,459)        (23,193)      (23,771)      (5,682)      (3,803)
Income tax (benefit) charge.........................       (1,093)           (491)         (641)           7            4
                                                       ------------      --------      --------      -------      -------
  Loss from continuing operations...................       (5,366)        (22,702)      (23,130)      (5,689)      (3,807)
                                                       ------------      --------      --------      -------      -------
Discontinued operations:
  Income (loss) from the discontinued BIS market
    research business, less applicable income taxes
    of $1,497 and $114 for the period March 17 to
    December 31, 1995 and the year ended December
    31, 1996........................................        1,490             (79)           --           --           --
  Income (loss) from the discontinued Shrapnel
    business, less applicable income taxes of $0....          154            (134)           --           --           --
  Income (loss) on disposal of discontinued BIS
    market research business, less applicable income
    taxes of $158 and $568 for the years ended
    December 31, 1996 and 1997, respectively........           --          (2,315)        1,101           --           --

  Income (loss) on disposal of discontinued Shrapnel
    business, less applicable income taxes of $0 and
    $109 for the years ended December 31, 1996 and
    1997, respectively..............................           --            (160)          212           --           --
                                                       ------------      --------      --------      -------      -------
  Income (loss) from discontinued operations........        1,644          (2,688)        1,313           --           --
                                                       ------------      --------      --------      -------      -------
Net loss............................................     $ (3,722)       $(25,390)     $(21,817)     $(5,689)     $(3,807)
                                                       ------------      --------      --------      -------      -------
                                                       ------------      --------      --------      -------      -------
Results per common share (Note 2):
  Historical--basic and diluted:
    Loss from continuing operations.................                                   $ (11.16)                  $ (1.80)
                                                                                       --------                   -------
                                                                                       --------                   -------
    Net loss........................................                                   $ (10.53)                  $ (1.80)
                                                                                       --------                   -------
                                                                                       --------                   -------
    Weighted average number of shares...............                                   2,072,837                  2,115,837
                                                                                       --------                   -------
                                                                                       --------                   -------
  Pro forma--basic and diluted (unaudited):
    Loss from continuing operations.................                                   $  (3.42)                  $ (0.56)
                                                                                       --------                   -------
                                                                                       --------                   -------
    Net loss........................................                                   $  (3.23)                  $ (0.56)
                                                                                       --------                   -------
                                                                                       --------                   -------
    Weighted average number of shares ..............                                   6,759,621                  6,802,621
                                                                                       --------                   -------
                                                                                       --------                   -------
The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-4
GIGA INFORMATION GROUP, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
  FOR THE PERIOD MARCH 17, 1995 (DATE OF INCEPTION) TO DECEMBER 31, 1995, THE
                                  YEARS ENDED
 DECEMBER 31, 1996 AND 1997 AND THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998
                                  (UNAUDITED)
                       (IN THOUSANDS, EXCEPT SHARE DATA)
SERIES A       SERIES B       SERIES C
                                               CONVERTIBLE    CONVERTIBLE    CONVERTIBLE              ADDITIONAL       STOCK
                                                PREFERRED      PREFERRED      PREFERRED     COMMON     PAID-IN      SUBSCRIPTION
                                                  STOCK          STOCK          STOCK       STOCK      CAPITAL       RECEIVABLE
                                               -----------    -----------    -----------    ------    ----------    ------------
Issuance of 2,036,002 shares of Common
 Stock......................................                                                 $  6      $  1,054        $ (350)
Issuance of 160,000 shares of Series A
 Convertible Preferred Stock and convertible
 note for acquisition of ExperNet
 Corporation................................                                                                800
Issuance of 410,000 shares of Series A
 Convertible Preferred Stock, net of
 expenses...................................     $     1                                                  2,049           (25)
Issuance of 4,026,772 shares of Series B
 Convertible Preferred stock, net of
 expenses...................................                    $     4                                  13,212
Conversion of bridge financing to 571,428
 shares of Series B Convertible Preferred
 Stock......................................                                                              1,980
Net loss....................................
Translation adjustments.....................
                                               -----------    -----------    -----------    ------    ----------        -----
Balance at December 31, 1995................           1              4                         6        19,095          (375)
                                               -----------    -----------    -----------    ------    ----------        -----
Payment of stock subscription receivable....                                                                              300
Issuance of 3,327,728 shares of Series B
 Convertible Preferred Stock, net of
 expenses...................................                          4                                  11,546
Issuance of 36,458 shares of Common Stock...                                                                 70
Repurchase of 12,389 shares of Common
 Stock......................................                                                                (23)
Cancellation of 33,333 shares of Common
 Stock issued...............................                                                                (50)           50
Exercise of warrant for 218,714 shares of
 Series B Convertible Preferred Stock.......
Net loss....................................
Translation adjustments.....................
                                               -----------    -----------    -----------    ------    ----------        -----
Balance at December 31, 1996................           1              8                         6        30,638           (25)
                                               -----------    -----------    -----------    ------    ----------        -----

Issuance of 72,479 shares of Common Stock...                                                                148
Repurchase of 6,110 shares of Common
 Stock......................................                                                                (38)
Issuance of 2,609,491 shares of Series C
 Convertible Preferred Stock, net of
 expenses...................................                                   $     3                   10,534
Payment of stock subscription receivable....                                                                               25
Net loss....................................
Translation adjustments.....................
                                               -----------    -----------    -----------    ------    ----------        -----
Balance at December 31, 1997................           1              8              3          6        41,282            --
                                               -----------    -----------    -----------    ------    ----------        -----
Issuance of 31,035 shares of Common Stock...                                                                 73
Deferred Compensation.......................                                                              1,229
Net loss....................................
Translation adjustments.....................
                                               -----------    -----------    -----------    ------    ----------        -----
Balance at March 31, 1998 (unaudited).......     $     1        $     8        $     3       $  6      $ 42,584            --
                                               -----------    -----------    -----------    ------    ----------        -----
                                               -----------    -----------    -----------    ------    ----------        -----
CUMULATIVE                        TOTAL
                                                DEFERRED      TRANSLATION    ACCUMULATED    STOCKHOLDERS'
                                              COMPENSATION    ADJUSTMENTS      DEFICIT         EQUITY
                                              ------------    -----------    -----------    -------------
Issuance of 2,036,002 shares of Common
 Stock......................................                                                  $     710
Issuance of 160,000 shares of Series A
 Convertible Preferred Stock and convertible
 note for acquisition of ExperNet
 Corporation................................                                                        800
Issuance of 410,000 shares of Series A
 Convertible Preferred Stock, net of
 expenses...................................                                                      2,025
Issuance of 4,026,772 shares of Series B
 Convertible Preferred stock, net of
 expenses...................................                                                     13,216
Conversion of bridge financing to 571,428
 shares of Series B Convertible Preferred
 Stock......................................                                                      1,980
Net loss....................................                                  $  (3,722)         (3,722)
Translation adjustments.....................                     $ (37)                             (37)
                                                  ------           ---       -----------    -------------
Balance at December 31, 1995................                       (37)          (3,722)         14,972
                                                  ------           ---       -----------    -------------
Payment of stock subscription receivable....                                                        300
Issuance of 3,327,728 shares of Series B
 Convertible Preferred Stock, net of
 expenses...................................                                                     11,550
Issuance of 36,458 shares of Common Stock...                                                         70
Repurchase of 12,389 shares of Common
 Stock......................................                                                        (23)
Cancellation of 33,333 shares of Common
 Stock issued...............................                                                         --
Exercise of warrant for 218,714 shares of
 Series B Convertible Preferred Stock.......                                                         --
Net loss....................................                                    (25,390)        (25,390)
Translation adjustments.....................                       180                              180
                                                  ------           ---       -----------    -------------
Balance at December 31, 1996................                       143          (29,112)          1,659
                                                  ------           ---       -----------    -------------
Issuance of 72,479 shares of Common Stock...                                                        148
Repurchase of 6,110 shares of Common
 Stock......................................                                                        (38)
Issuance of 2,609,491 shares of Series C
 Convertible Preferred Stock, net of
 expenses...................................                                                     10,537
Payment of stock subscription receivable....                                                         25
Net loss....................................                                    (21,817)        (21,817)
Translation adjustments.....................                       396                              396
                                                  ------           ---       -----------    -------------

Balance at December 31, 1997................                       539          (50,929)         (9,090)
                                                  ------           ---       -----------    -------------
Issuance of 31,035 shares of Common Stock...                                                         73
Deferred Compensation.......................      (1,229)                                             0
Net loss....................................                                     (3,807)         (3,807)
Translation adjustments.....................                        74                               74
                                                  ------           ---       -----------    -------------
Balance at March 31, 1998 (unaudited).......    $ (1,229)        $ 613        $ (54,736)      $ (12,750)
                                                  ------           ---       -----------    -------------
                                                  ------           ---       -----------    -------------
The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-5
GIGA INFORMATION GROUP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
THREE MONTHS ENDED
                                                                                   YEAR ENDED
                                                              MARCH 17 TO         DECEMBER 31,            MARCH 31,
                                                              DECEMBER 31,    --------------------    ------------------
                                                                  1995          1996        1997       1997       1998
                                                              ------------    --------    --------    -------    -------
                                                                                                         (UNAUDITED)
Cash flows from operating activities:
  Net loss.................................................     $ (3,722)     $(25,390)   $(21,817)   $(5,689)   $(3,807)
  Adjustments to reconcile net loss to net cash used in
    continuing operating activities:
    (Income) loss from discontinued operations.............       (1,644)          213          --         --         --
    (Income) loss on disposal of discontinued operations...           --         2,475      (1,313)        --         --
    Depreciation and amortization..........................        1,387         2,391       2,810        634        385
    Net loss on write-down of investments..................           --           200         179         --         --
    Provision for doubtful accounts........................           20           395          27         59        (79)
    Decrease in deferred taxes.............................           50            61          --         --         --
    Interest on long-term debt added to principal..........           37            74          74         18         13
    Interest on note receivable added to principal.........           --            (9)         (5)        (3)        --
    Gain on sale of fixed assets...........................           (3)          (11)         (2)        (7)        (9)
    Other non-cash items...................................           --            --          87          8          8
  Change in assets and liabilities net of effects of
    acquisitions:
    Decrease (increase) in accounts receivable.............        1,489        (4,092)     (8,405)       563      5,321
    Increase in prepaid expenses and other current
      assets...............................................       (1,509)         (536)     (1,755)      (853)       (53)
    Increase (decrease) in accounts payable and accrued
      liabilities..........................................        1,988         1,928       1,894       (458)    (2,045)
    Increase (decrease) in deferred revenues...............          551         4,582      13,696      2,137     (1,023)
                                                              ------------    --------    --------    -------    -------
Net cash provided by (used in) operating activities:
  Net cash used in continuing operations...................       (1,356)      (17,719)    (14,530)    (3,591)    (1,289)
  Net cash provided by (used in) discontinued operations...          335          (571)     (1,667)      (145)       (13)
                                                              ------------    --------    --------    -------    -------
    Net cash used in operating activities..................       (1,021)      (18,290)    (16,197)    (3,736)    (1,302)
                                                              ------------    --------    --------    -------    -------

Cash flows from investing activities:
  Acquisition of equipment and improvements................         (961)       (1,799)       (559)      (151)      (261)
  Net cash acquired in BIS acquisition.....................        1,013            --          --         --         --
  Net cash acquired in ExperNet acquisition................           61            --          --         --         --
  Issuance of note receivable..............................           --          (150)         --         --         --
  Proceeds from sale of Shrapnel...........................           --            --         293         --         --
  Other, net...............................................           76            40          60         24         10
                                                              ------------    --------    --------    -------    -------
    Cash provided by (used in) investing activities........          189        (1,909)       (206)      (127)      (251)
                                                              ------------    --------    --------    -------    -------
Cash flows from financing activities:
  Proceeds from issuance of Common Stock...................          710            70          61          8         65
  Repurchase of common stock...............................           --           (23)        (38)        --         --
  Proceeds from issuance of Series A Convertible Preferred
    Stock..................................................        2,025            --          --         --         --
  Proceeds from bridge financing, net of issuance costs
    of $20.................................................        1,980            --          --         --         --
  Proceeds from issuance of Series B Convertible
    Preferred Stock, net of issuance costs of $90 and
      $878.................................................       13,216        11,557          --         --         --
  Proceeds from issuance of Series C Convertible
    Preferred Stock, net of issuance costs of $188.........           --            --      10,537         --         --
  Repayments of principal to related parties...............         (321)           --          --         --       (224)
  Proceeds from stock subscriptions receivable.............           --           300          25         --         --
  Net increase (decrease) in short-term borrowings.........          234          (294)       (193)        56         --
  Proceeds from long-term debt.............................           --            --       1,465         --         --
  Principal payments on long-term debt.....................          (97)          (11)       (139)        --        (72)
                                                              ------------    --------    --------    -------    -------
    Cash provided by (used in) financing activities........       17,747        11,599      11,718         64       (231)
                                                              ------------    --------    --------    -------    -------
  Effect of exchange rates on cash.........................          (39)           10         (62)       (28)        (2)
  Net increase (decrease) in cash and cash equivalents.....       16,876        (8,590)     (4,747)    (3,827)    (1,786)
  Cash and cash equivalents, beginning of period...........           --        16,876       8,286      8,286      3,539
                                                              ------------    --------    --------    -------    -------
    Cash and cash equivalents, end of period...............     $ 16,876      $  8,286    $  3,539    $ 4,459    $ 1,753
                                                              ------------    --------    --------    -------    -------
                                                              ------------    --------    --------    -------    -------
  Supplementary cash flow information:
    Income taxes paid......................................     $     39      $     30    $     15    $     5    $     5
    Interest paid..........................................     $     58      $     22    $    121    $     0    $    55
The accompanying notes are an integral part of the consolidated financial
                                  statements.
 
                                      F-6
GIGA INFORMATION GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
1. THE COMPANY:
 
     Giga Information Group, Inc. ('Giga' or the 'Company') was incorporated on
March 17, 1995 (date of inception) in the State of Delaware. The Company's
principal business activity is to provide information, analysis and advice
relating to developments and trends in the computing, telecommunications and
related industries (collectively, the information technology or 'IT' industry)
primarily through subscription-based products. The Company derives its revenues
primarily from three sources; Continuous Information Services, which include its
Giga Advisory Service and IT Practices; Other Services, which include events and
consulting; and Publications. Continuous Information Services consist of
monitoring, research and analysis of IT developments and trends to support
customers' IT decisions, distributed through a variety of electronic and print
media, as well as inquiry access to analysts and practitioners and participation
in briefings and conferences, packaged into an annually renewable
subscription-based product. On April 5, 1995, the Company acquired BIS Strategic
Decisions, Inc. and its five foreign affiliates (collectively, 'BIS'). On July
6, 1995 Giga acquired a 77.8% equity interest in ExperNet Corporation
('ExperNet') which was owned by Gideon I. Gartner, Chairman of the Board of
Directors and Chief Executive Officer of the Company, and David L. Gilmour, then
a director and officer of the Company, and, on December 29, 1995, acquired the
remaining 22.2% interest.
 
     The Company is subject to a number of risks similar to other companies in
its industry including a dependence on sales and renewals of subscription-based
services, uncertainty of market acceptance of its services, competition from
other companies including those with greater resources than the Company,
dependence on key individuals, the development of new services and products, the
need to obtain additional financing, protection of proprietary information and
technology and the risks associated with international operations.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
  Basis of Presentation and Principles of Consolidation
 
     The consolidated financial statements of the Company include the accounts
of the Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated. Certain prior year amounts have
been reclassified to conform to the current year's presentation.
 
     Pursuant to the purchase method of accounting, acquired assets and
liabilities were revalued to their fair market value. The excess of the purchase
price over the fair market value of the net assets acquired was recorded as
goodwill.
 
  Interim Financial Information
 

     The consolidated financial statements of the Company at March 31, 1998 and
for the three months ended March 31, 1997 and 1998 are unaudited. All
adjustments (consisting only of normal recurring adjustments) have been made
which, in the opinion of management, are necessary for a fair presentation.
Results of operations for the three months ended March 31, 1998 are not
necessarily indicative of the results that may be expected for any future
period.
 
  Cash and Cash Equivalents
 
     Cash equivalents consist primarily of liquid investments, with original
maturities of 90 days or less, in money market funds which are convertible to a
known amount of cash and bear an insignificant risk of change in value.
 
                                      F-7
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
  Foreign Currency Translation
 
     The accounts of foreign subsidiaries are translated using exchange rates in
effect at period-end for assets and liabilities and at average exchange rates
during the period for results of operations. The local currency for all foreign
subsidiaries is the functional currency. The related translation adjustments are
reported as a separate component of stockholders' equity (deficit). Gains
(losses) resulting from foreign currency transactions are included in other
income (expense) and are immaterial for all periods presented.
 
  Concentration of Credit Risk
 
     Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of temporary cash investments in
money market funds and trade accounts receivable. The Company places its
temporary cash investments with high credit quality financial institutions in
accordance with its investment policy as approved by its board of directors.
Trade receivables result from contracts with various customers. Giga generally
does not require collateral or other security from these customers. The Company
performs ongoing credit evaluations of its customers and maintains reserves for
potential credit losses. Such losses have historically been within management's
expectations.
 
  Income Taxes
 
     The Company recognizes deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the Company's
consolidated financial statements. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities using currently enacted tax
rates for the year in which the differences are expected to reverse. The Company

records a valuation allowance against net deferred tax assets if, based upon the
available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.
 
  Revenue and Commission Expense Recognition
 
     Subscription revenues from Continuous Information Services are deferred and
recognized on a pro rata basis over the contract period, generally one year. The
Company's policy is to record a receivable and related deferred revenues for the
full amount of the contract on the date it is signed. Contracts are generally
billable upon signing. The Company also records the related commission
obligation upon the signing of these contracts and amortizes the corresponding
deferred commission expense over the contract period in which the related
Continuous Information Services revenues are earned. In the event the contract
is canceled by the customer, the commission is refundable with respect to the
portion related to the revenue which will not be recognized.
 
     Revenues from (i) Advisory Service, IT Practices and Advisory Consulting
are aggregated into Continuous Information Services, (ii) Events and other
services, principally consulting, are aggregated into Other Services and (iii)
Publications are listed separately. Revenues from Other Services are recognized
as follows: events as they occur and consulting as such services are performed.
Revenues from Publications are recognized when publications are delivered.
 
     Unbilled accounts receivable pertain to the portion of a customer's service
period not yet invoiced in accordance with contractual quarterly billing terms
offered in conjunction with the Continuous Information Services.
 
                                      F-8
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
  Property and Equipment
 
     Property and equipment are stated at cost for items acquired after the
initial acquisition of the respective entities and at estimated fair market
value for those assets in existence at date of acquisition. Expenditures for
maintenance and repairs are charged to expense; expenditures for additions,
renewals and betterments are capitalized.
 
     Depreciation is computed for financial reporting purposes principally by
use of the straight-line method over the following estimated useful lives:
Computers and related equipment.....................  3 years
Furniture and fixtures..............................  5 years
Motor vehicles......................................  4 years
Leaseholds and related improvements.................  Shorter of economic life or remaining lease term
Upon retirement or sale, the cost of assets disposed of and the related
accumulated depreciation are eliminated from the balance sheet and the resulting
gains or losses reflected in income.
 
  Long-Lived Assets
 
     The Company regularly reviews long-lived assets for impairment. Any
write-downs are treated as permanent reductions in the carrying amount of the
assets. Management's policy regarding long-lived assets is to evaluate the
recoverability of its assets when the facts and circumstances suggest that these
assets may be impaired. The test of such recoverability is a comparison of the
asset value to its expected undiscounted future cash flows over the remaining
life of the asset. This analysis relies on a number of factors including
operating results, business plans, budgets, economic projections and changes in
management's strategic direction or market emphasis.
 
  Goodwill
 
     Goodwill represents the excess of the purchase price of entities acquired
over the fair values of amounts assigned to the net tangible and intangible
assets acquired and liabilities assumed. Amortization is recorded using the
straight-line method over two years for the BIS acquisition and five years for
the ExperNet acquisition. The carrying value of goodwill is included in
management's evaluation of the recoverability of its long-lived assets. During
1996, approximately $666,000 of goodwill identifiable with the discontinuance of
the BIS market research business was written off to amortization expense in
connection with the disposition of this business. In 1997, the Company's
assessment of the recoverability of goodwill associated with the ExperNet
acquisition indicated a de-minimis level of future cash flows associated with
this business. As such, the Company wrote-off the remaining unamortized portion
of the goodwill resulting in a charge to amortization expense of $1,025,000.
Total amortization expense related to goodwill was approximately $578,000,
$929,000, $1,186,000, $231,000 and $0 for the period from March 17, 1995 to
December 31, 1995, the years ended December 31, 1996 and 1997 and the three
months ended March 31, 1997 and 1998, respectively.
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect (i) the reported amounts of assets and liabilities, (ii)
disclosure of contingent assets and liabilities at the dates of the financial
statements and (iii) the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
 
                                      F-9
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
  Historical Net Loss per Common Share
 
     The Company computes basic and diluted earnings per share in accordance
with Statement of Financial Accounting Standard ('SFAS') No. 128, 'Earnings Per
Share.' Basic earnings per share is based upon the weighted average number of
common shares outstanding during the period. Common equivalent shares have been
excluded from the computation of diluted loss per share as their effect would be
anti-dilutive. Common equivalent shares result from the assumed exercise of
outstanding stock options and warrants, the proceeds of which are then assumed
to have been used to repurchase outstanding common stock using the treasury
stock method, and the conversion of convertible notes into Common Stock. As a
result, options and warrants to purchase 1,638,825 and 1,903,730 shares of
Common Stock and convertible notes convertible into 93,196 and 78,910 shares of
Common Stock outstanding during the year ended December 31, 1997 and the three
months ended March 31, 1998, respectively, were excluded from the calculation of
diluted net loss per common share.
 
  Pro Forma Net Loss Per Common Share (unaudited)
 
     The pro forma basic and diluted net loss per common share is computed based
upon the weighted average number of common shares outstanding in accordance with
SFAS No. 128. In addition, all outstanding shares of convertible preferred
stock, which convert to Common Stock upon the closing of an initial public
offering of Common Stock at a price of at least $15.75 per share and having
aggregate proceeds of at least $15,000,000, are treated as if converted to
Common Stock (see Note 13).
 
  Comprehensive Income (Loss)
 
     The Company has adopted SFAS No. 130, 'Reporting Comprehensive Income,'
which establishes standards for the reporting and display of comprehensive
income and its components in general purpose financial statements for the year
ended December 31, 1998 and interim periods. The table below sets forth
'Comprehensive income (loss)' as defined by SFAS No. 130 (in thousands):
YEAR ENDED DECEMBER     THREE MONTHS
                                                                MARCH 17 TO            31,            ENDED MARCH 31,
                                                                DECEMBER 31,   -------------------   -----------------
                                                                    1995         1996       1997      1997      1998
                                                                ------------   --------   --------   -------   -------
Net loss......................................................    $ (3,722)    $(25,390)  $(22,075)  $(5,689)  $(3,807)
  Other Comprehensive income (loss), net of tax:
     Foreign currency translation adjustment..................         (37)         180        396        99        74
                                                                ------------   --------   --------   -------   -------
Comprehensive loss............................................    $ (3,759)    $(25,210)  $(21,679)  $(5,590)  $(3,733)
                                                                ------------   --------   --------   -------   -------
                                                                ------------   --------   --------   -------   -------
New Accounting Pronouncements
 
     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
'Disclosures about Segments of an Enterprise and Related Information.' This
statement supersedes SFAS No. 14, 'Financial Reporting for Segments of a
Business Enterprise.' SFAS No. 131 includes requirements to report selected
segment information quarterly and entity-wide disclosures about products and
services, major customers, and the material countries in which the entity holds
assets and reports revenues. The statement will be effective for annual periods
beginning after December 15, 1997 and the Company will adopt its provisions in
the year ended December 31, 1998. Reclassification for earlier periods is
required, unless impracticable, for comparative purposes. The Company is
currently evaluating the impact this statement will have on its financial
statements; however, because the statement requires only additional disclosure,
the Company does not expect the statement to have a material impact on its
financial position or results of operations.
 
                                      F-10
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
3. ACQUISITIONS:
 
  BIS Strategic Decisions, Inc. and Affiliates
 
     On April 5, 1995, the Company acquired 100% of the stock of BIS for
$200,000 in cash and a $1,000,000 convertible promissory note (see Note 11). BIS
was engaged in compiling and providing data intensive market research to vendors
for use primarily in planning their product operating and marketing programs.
The acquisition was accounted for as a purchase and, accordingly, the cost
(including acquisition costs of $204,000) was assigned to the tangible and
identifiable intangible assets acquired, including a leasehold for one of the

facilities, and liabilities assumed based upon their estimated fair values at
the date of acquisition. As part of the transaction, an intangible asset
(leasehold) of approximately $1,300,000 was recorded representing the fair value
of payments being made through May 1998 by a former owner of BIS. In addition
the Company acquired current assets of approximately $8,700,000 and furniture
and equipment of approximately $2,000,000 offset by current liabilities assumed
of approximately $12,600,000 (of which approximately $9,100,000 were deferred
revenues), a note payable of $192,000 and a tax provision of approximately
$1,000,000. The excess of the purchase price over the net assets acquired of
approximately $3,059,000 was recorded as goodwill. The Company's statements of
operations include the results of operations of BIS from April 5, 1995.
 
  ExperNet
 
     On July 6, 1995, the Company acquired a majority interest in ExperNet in
exchange for (i) 160,000 shares of Series A Preferred Stock (213,333 shares of
Common Stock on an as-converted basis), 80,000 shares (106,667 shares of Common
Stock on an as-converted basis) of which were issued to Mr. Gartner and 80,000
shares (106,667 shares of Common Stock on an as-converted basis) of which were
issued to Mr. Gilmour and (ii) the issuance to Mr. Gartner of an option to
purchase 53,333 shares of Common Stock at an exercise price of $1.50 per share
which vested immediately. On December 29, 1995 the Company acquired Mr.
Gilmour's remaining interest in ExperNet in exchange for a $400,000, 6%
convertible note (the 'Note') due December 31, 2005 (see Note 11). ExperNet is
comprised of a network of external IT practitioners, and the related interactive
software, which respond to specific customer inquiries. In the transaction, the
Company acquired current assets of approximately $148,000 and furniture and
equipment of approximately $126,000, offset by current liabilities assumed of
approximately $96,000 and long-term debt of approximately $386,000. The
acquisition was accounted for as a purchase; accordingly, the excess of the
purchase price over the net assets acquired of approximately $1,408,000 has been
recorded as goodwill. The Company's statements of operations include the results
of operations of ExperNet from July 6, 1995.
 
4. RELATED PARTIES:
 
     During the period from March 17, 1995 to December 31, 1995, the Company
reimbursed Mr. Gartner $186,000 for disbursements made by him for items related
to the acquisition of BIS and for other operational expenses prior to the
incorporation of the Company.
 
     In addition, following the initial closing of the sale of Series B
Convertible Preferred Stock by the Company in November 1995, ExperNet repaid a
loan in the principal amount of approximately $221,000 plus accrued interest at
a rate of 10%, or a total of approximately $248,000, to Mr. Gartner and a loan
in the principal amount of approximately $101,000 plus accrued interest at a
rate of 10%, or a total of approximately $113,000, to Mr. Gilmour.
 
     During 1997, the Company awarded 17,778 shares of Common Stock at a fair 
value of $3.00 per share to Mr. Gartner in lieu of a payment of cash for
services rendered during 1996 as Chief Executive Officer. The Company recorded
as compensation expense in 1996 the fair value of the Common Stock awarded to
Mr. Gartner.
 

                                      F-11
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     In connection with the repayment of the note issued to Mr. Gilmour in
conjunction with the ExperNet acquisition (see Note 11), the Company received a
7.5% equity interest in a company newly formed by Mr. Gilmour and a
royalty-free, irrevocable license to use any software, products and technologies
the new company will develop during a three year period commencing on February
1, 1998.
 
     Certain of the Company's existing investors have represented that they
will, to the extent necessary, fund the Company through May 1999 on terms to be
mutually agreed upon.
 
5. PREPAID EXPENSES AND OTHER CURRENT ASSETS:
 
     Prepaid expenses and other current assets consist of the following (in
thousands):
DECEMBER 31,
                                                                            ----------------    MARCH 31,
                                                                             1996      1997       1998
                                                                            ------    ------    ---------
Prepaid compensation.....................................................   $1,126    $2,559     $ 2,422
Other....................................................................      627     1,194       1,243
                                                                            ------    ------    ---------
  Total..................................................................   $1,753    $3,753     $ 3,665
                                                                            ------    ------    ---------
                                                                            ------    ------    ---------
6. PROPERTY AND EQUIPMENT
 
     Property and equipment at cost, less accumulated depreciation and
amortization, consist of the following (in thousands):
DECEMBER 31,
                                                                            ----------------    MARCH 31,
                                                                             1996      1997       1998
                                                                            ------    ------    ---------
Computer and related equipment...........................................   $2,849    $3,202     $ 3,463
Furniture and fixtures...................................................      781       827         771
Motor vehicles...........................................................      108        27           1
Leasehold improvements...................................................      119       119         119
                                                                            ------    ------    ---------
                                                                             3,857     4,175       4,354
Less accumulated depreciation and amortization...........................    1,460     2,480       2,676
                                                                            ------    ------    ---------
Property and equipment, net..............................................   $2,397    $1,695     $ 1,678
                                                                            ------    ------    ---------
                                                                            ------    ------    ---------
Depreciation and amortization expense was $525,000, $1,020,000, $1,190,000,
$319,000 and $278,000 for the period March 17, 1995 to December 31, 1995, the
years ended December 31, 1996 and 1997, and the three months ended March 31,
1997 and 1998, respectively.
 
                                      F-12
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
7. LEASE COMMITMENTS
 
     The Company leases certain office space and equipment under operating lease
agreements. Future minimum rental commitments under all operating leases with
remaining noncancelable terms of one year or more are as follows (in thousands):
OPERATING
                                                                                       LEASES
                                                                                      ---------
April 1 through December 31, 1998..................................................    $   685
1999...............................................................................        910
2000...............................................................................        590
2001...............................................................................        137
2002...............................................................................         80
Thereafter.........................................................................         39
                                                                                      ---------
  Total............................................................................    $ 2,441
                                                                                      ---------
                                                                                      ---------
Rent expense, net of sublease income of approximately $60,000, $78,000,
$54,000, $11,000 and $6,000 was $482,000, $701,000, $725,000, $232,000 and
$189,000 for the period March 17, 1995 to December 31, 1995, the years ended
December 31, 1996 and 1997, and the three months ended March 31, 1997 and 1998,
respectively.
 
     An agreement was entered into by and among the Company and two prior owners
of BIS providing for one of the prior owners, who had guaranteed all payments
under a lease, to pay an aggregate of $1,500,000 to the landlord for rent under
the lease, payable monthly in an amount of $36,722. The guaranteed payments end
at May 30, 1998.
 
8. INCOME TAXES:
 
     The Company has deferred tax assets of approximately $11,148,000,
$20,216,000 and $21,862,000 at December 31, 1996 and 1997 and March 31, 1998,
respectively. For financial reporting purposes, valuation allowances of
$11,148,000, $20,216,000 and $21,862,000, respectively, have been recognized to
offset these deferred tax assets until the Company can conclude that it is more
likely than not that these deferred tax assets will be realized. During the
years ended December 31, 1996 and 1997, and the three months ended March 31,
1998, the valuation allowance increased by approximately $8,529,000, $9,068,000
and $1,646,000, respectively.
 
     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the corresponding amounts used for income tax purposes. Significant
components of the Company's deferred tax assets and liabilities are as follows
(in thousands):
DECEMBER 31,
                                                                         ------------------    MARCH 31,
                                                                          1996       1997        1998
                                                                         -------    -------    ---------
Deferred tax assets:
  Deferred revenue....................................................   $   742
  Net operating loss carryforwards....................................     9,112    $19,119     $20,604
  Discontinued operations.............................................       474         24          --
  Other--net..........................................................       820      1,073       1,258
                                                                         -------    -------    ---------
     Total deferred tax assets........................................    11,148     20,216      21,862
Valuation allowance for deferred tax assets...........................    11,148     20,216      21,862
                                                                         -------    -------    ---------
Net deferred tax assets...............................................        --         --          --
                                                                         -------    -------    ---------
                                                                         -------    -------    ---------
F-13
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     For financial reporting purposes, income before income taxes includes the
following components (in thousands):
YEAR ENDED DECEMBER     THREE MONTHS ENDED
                                               MARCH 17 TO             31,                 MARCH 31,
                                               DECEMBER 31,    --------------------    ------------------
                                                   1995          1996        1997       1997       1998
                                               ------------    --------    --------    -------    -------
Pretax loss for continuing operations:
  United States.............................     $ (5,068)     $(20,688)   $(21,006)   $(5,120)   $(3,005)
  Non-United States.........................       (1,391)       (2,505)     (2,765)      (562)      (798)
                                               ------------    --------    --------    -------    -------
Consolidated................................     $ (6,459)     $(23,193)   $(23,771)   $(5,682)   $(3,803)
                                               ------------    --------    --------    -------    -------
                                               ------------    --------    --------    -------    -------
The income tax expense(benefit) of the loss from continuing operations,
substantially all of which is deferred, consists of the following components (in
thousands):
YEAR ENDED         
                                                      MARCH 17 TO      DECEMBER 31,        THREE MONTHS ENDED MARCH 31,
                                                      DECEMBER 31,    --------------    ----------------------------------
                                                          1995        1996     1997          1997               1998
                                                      ------------    -----    -----    ---------------    ---------------
U.S. Federal.......................................     $   (754)     $(239)   $(554)         $ 7                $ 4
Foreign............................................         (339)      (252)     (87)          --                 --
                                                                                               --                 --
                                                      ------------    -----    -----
                                                        $ (1,093)     $(491)   $(641)         $ 7                $ 4
                                                                                               --                 --
                                                                                               --                 --
                                                      ------------    -----    -----
                                                      ------------    -----    -----
The income tax benefit of the loss from continuing operations differs from
the amount of income tax benefit determined by applying the applicable U.S.
statutory income tax rate to pretax loss from continuing operations as a result
of the following differences:
YEAR ENDED           THREE MONTHS
                                                      MARCH 17 TO       DECEMBER 31,        ENDED MARCH 31,
                                                      DECEMBER 31,    ----------------      ----------------
                                                          1995        1996       1997       1997       1998
                                                      ------------    -----      -----      -----      -----
Income tax at the statutory rate...................       (34.0)%     (34.0)%    (34.0)%    (34.0)%    (34.0)%
Foreign subsidiary losses with no benefit
  recognized.......................................         3.5         1.7        4.0        3.4        7.1
Foreign income taxed at different rates............        (1.4)        0.9        0.4       (0.2)      (0.4)
Nondeductible goodwill.............................         3.1         1.4        1.7         --         --
U.S. losses with no benefit recognized.............        12.3        27.8       24.9       30.5       26.9
Other items (net)..................................        (0.4)        0.1        0.3        0.4        0.5
                                                      ------------    -----      -----      -----      -----
                                                          (16.9)%      (2.1)%     (2.7)%      0.1%       0.1%
                                                      ------------    -----      -----      -----      -----
                                                      ------------    -----      -----      -----      -----
The Company has available net operating loss carryforwards of approximately
$47,988,000 and $51,791,000 at December 31, 1997 and March 31, 1998 which may be
used to reduce future taxable income. Of this amount, at December 31, 1997 U.S.
carryforwards of approximately $43,081,000 expire in various years through 2012,
certain non-U.S. carryforwards of approximately $2,367,000 expire in various
years through 2002 and the balance may be carried forward indefinitely. If
losses of acquired companies are used to reduce future taxable income,
associated tax benefits will first reduce acquired goodwill and other noncurrent
intangible assets before being recognized as a reduction of income tax expense

in the period the benefits are realized. Utilization of the net operating loss
carryforwards may be limited pursuant to the provisions of Section 382 of the
Internal Revenue Code of 1986, as amended.
 
                                      F-14
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
9. JOINT VENTURE AGREEMENT:
 
     In 1991, BIS entered into a joint venture agreement with a Japanese company
(the 'Joint Venture') to provide additional market penetration in Japan for the
Company's products and services. BIS's initial equity ownership was 40%.
Pursuant to the terms of the agreement, the Company was required to purchase an
additional 10% interest in the Joint Venture from its partner in March 1996 for
approximately $85,000. In April 1996, the Company and its partner each increased
their investment in the joint venture by approximately $24,000. In December
1996, the Company notified its partner, pursuant to the terms of the agreement,
of its desire to dissolve the Joint Venture. The Company does not expect any
proceeds from the dissolution and, as such, wrote off to expense its investment
of approximately $125,000. The net earnings of the joint venture to date have
been de minimis. At December 31, 1996 and 1997 and March 31, 1998 the Company
had accounts receivable due from the Joint Venture of $125,000, $0 and $0,
respectively.
 
10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES:
 
     Accrued expenses and other current liabilities consist of the following (in
thousands):
DECEMBER 31,
                                                                            ----------------    MARCH 31,
                                                                             1996      1997       1998
                                                                            ------    ------    ---------
Accrued compensation and benefits........................................   $1,675    $2,260     $ 1,101
Sales tax payable........................................................    1,110     1,198       1,026
Other....................................................................    2,772     2,927       2,906
                                                                            ------    ------    ---------
  Total..................................................................   $5,557    $6,385     $ 5,033
                                                                            ------    ------    ---------
                                                                            ------    ------    ---------
11. BORROWINGS AND LONG-TERM DEBT:
 
     In connection with the Company's acquisition of BIS, the seller received a

$1,000,000, 5% convertible note due April 5, 1998. The note was convertible into
185,298 shares of Common Stock. The note plus accrued interest was fully repaid
on April 17, 1998.
 
     In connection with the Company's acquisition of ExperNet, the Company
issued a $400,000, 6% convertible note to Mr. Gilmour (see also Note 3). The
note plus accrued interest was repaid in two installments, the last of which was
in April 1998.
 
     In June 1997, the Company entered into a loan agreement with a lending
institution collateralized by certain equipment, machinery and fixtures. Under
this agreement the Company received a $1,465,000 loan due in June 2000 with an
effective interest rate of 17.133%. Principal payments required on this loan in
the years 1998 through 2000 are $389,000, $461,000 and $444,000.
 
     The weighted average interest rates of outstanding short-term borrowings
were 7.3%, 6.9%, 7.1%, 0% and 8.1% for the period March 17, 1995 to December 31,
1995, the years ended December 31, 1996 and 1997 and the three months ended
March 31, 1997 and 1998, respectively.
 
12. COMMITMENTS AND CONTINGENT LIABILITIES:
 
     In October 1997, the Company entered into an invoice factoring arrangement
with a commercial bank under which the Company could borrow up to $1,250,000.
Under the arrangement, the bank charges an administrative fee of 0.5% of each
factored invoice and a monthly factoring management fee of 1.25% of the gross
average monthly factored invoices. Borrowings under the arrangement are
collateralized by all the Company's assets. Upon the initial utilization of the
factoring arrangement, the bank will receive warrants equal to the value of
$125,000 for a class of stock to be determined and at a price to be determined.
As of March 31, 1998, no invoices have been factored under the arrangement.
 
                                      F-15
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
13. PREFERRED STOCK:
 
     The authorized capital stock of the Company includes 16,500,000 shares of
Preferred Stock. Of the Preferred Stock, 650,000, 9,000,000 and 4,500,000 shares
have been designated as Series A, Series B and Series C Convertible Preferred
Stock. The remaining 2,350,000 shares of Preferred Stock have not been
designated.
 
  Series A Convertible Preferred Stock ('Series A')
 
     During 1995, the Company issued 410,000 shares of Series A (546,667 shares
on an as-converted basis) for consideration of $2,050,000 which consisted of
$2,025,000 cash and a $25,000 non-recourse note from an employee in connection

with his acceptance of employment with the Company. In addition, 160,000 shares
of Series A (213,333 shares on an as-converted basis) were issued in connection
with the acquisition of ExperNet as described in Note 3.
 
  Series B Convertible Preferred Stock ('Series B')
 
     During 1995, the Company issued 4,026,772 shares of Series B for cash
consideration of $13,216,000, net of issuance costs of $878,000. In addition,
bridge financing in the principal amount of $2,000,000 was automatically
converted into 571,428 shares of Series B at the first closing of the Series B
Stock financing in November 1995. During 1996 the Company issued an additional
3,327,728 shares of Series B, in two separate financings, for cash consideration
of $11,550,000, net of issuance costs of $97,000. In addition, a warrant issued
to the lender in connection with the Series B bridge financing in August 1995
was exercised on a cashless basis for 218,714 shares in September 1996 (see Note
15).
 
  Series C Convertible Preferred Stock ('Series C')
 
     During 1997, the Company issued 2,609,491 shares of Series C, in two
separate financings, for cash consideration of $10,537,000, net of issuance
costs of $188,000.
 
     In connection with this issuance the Company issued warrants to purchase-up
to 1,409,129 shares of Series C at an exercise price of $4.50 per share (see
Note 15).
 
  Conversion
 
     Each share of Series A, Series B and Series C is convertible, at the
holder's option, into that number of shares of Common Stock as is determined by
dividing the initial purchase price of such shares by the conversion price in
effect at the time of conversion. The conversion price of each share of Series
A, Series B and Series C is subject to adjustment upon the occurrence of certain
events. At March 31, 1998 each share of Series A, Series B and Series C is
convertible into four-thirds (4/3), one-third (1/3) and 0.39143 shares of Common
Stock, respectively.
 
     The Series A, Series B and Series C Shares will automatically convert into
Common Stock at the then effective conversion price upon the closing of a firmly
underwritten public offering of Common Stock at a price of at least $15.75 per
share (as adjusted for splits, combinations and share dividends), and generating
gross proceeds of at least $15,000,000. In addition, the Series A, Series B and
Series C Shares will convert into Common Stock at the then effective conversion
price upon the consent of the holders of at least two-thirds (2/3) of the then
outstanding Series A, Series B and Series C Shares.
 
  Liquidation
 
     Upon (i) the liquidation, dissolution, or winding up of the Company (either
voluntary or involuntary) or (ii) the merger or consolidation of the Company
with another corporation or the sale or other transfer of all or substantially
all of the assets of the Company which is not agreed to by the holders of not
less than a majority of

 
                                      F-16
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
the Convertible Preferred Stock, voting together as a single class, and in which
the stockholders of the Company immediately prior to such transaction do not own
more than a 50% interest in the surviving entity, (i) holders of the Series A,
Series B and Series C Shares are entitled to receive out of the assets of the
Company available for distribution to its stockholders, an amount equal to
$5.00, $3.50 and $4.11 per share, respectively, plus any declared but unpaid
dividends, prior to any distribution to the holders of the Company's Common
Stock. Following distribution of such preferential amounts, holders of Series A,
Series B and Series C Shares shall not participate in any further distribution.
 
  Voting
 
     Except as provided by law or in the Company's Amended and Restated
Certificate of Incorporation, the holders of the Series A, Series B and Series C
Shares vote with holders of the Company's Common Stock on an as converted basis
and not as a separate class or series. In addition, so long as at least
1,000,000 shares of Series A, Series B and Series C Shares are outstanding, the
Company may not, without the approval of at least a majority of the outstanding
shares of the Series A, Series B and Series C Shares, take certain actions as
described in the Certificate of Incorporation.
 
14. COMMON STOCK:
 
     In November 1995, the Company amended its Certificate of Incorporation to
increase the authorized number of shares of Common Stock from 10,000,000 to
28,000,000. In December 1996, the Company amended its Certificate of
Incorporation to increase the authorized number of Common Stock from 28,000,000
to 50,000,000. 
 
     During March 1995, the Company sold to Mr. Gartner 1,400,000 shares of
Common Stock at a purchase price of $0.07125 per share. During the remainder of
1995, the Company sold 636,000 shares of Common Stock to employees, consultants
and directors at a purchase price of $1.50 per share.
 
15. STOCK OPTIONS AND WARRANTS:
 
  Stock Options
 
     In June 1995, the Company adopted the 1995 Stock Plan (the 'Prior Stock
Plan'). The Prior Stock Plan was superseded in October 1995 by the 1995 Stock
Option/Stock Issuance Plan (the '1995 Stock Plan'). On August 28, 1996 the Board
of Directors adopted the 1996 Stock Option Plan (the '1996 Stock Plan') to
effectively supersede the 1995 Stock Plan. The 1995 Stock Plan provided for the
granting of options to purchase and for direct purchases of up to 1,033,333

shares of Common Stock. The 1996 Stock Plan provides for the granting of options
to purchase up to 1,000,000 shares of Common Stock.
 
     Both the 1995 Stock Plan and the 1996 Stock Plan provide for the grants of
non-qualified and incentive options to purchase shares of the Company's Common
Stock to employees (including officers and directors who are employed by the
Company) of, and consultants to, the Company generally at the fair market value
determined by the Board on the date of the grant. The 1995 Stock Plan also
provided for direct purchases of Common Stock. The Board may determine the date
on which these shares vest and become exercisable. Shares purchased as the
result of the exercise of these options or direct purchases under the 1995 Stock
Plan are subject to the Company's right to repurchase such shares upon the
occurrence of certain events and at a price equal to the fair market value as
defined on the date of repurchase.
 
     Options granted under the 1995 and 1996 stock plans have variable vesting
periods. No options granted under these plans have a term in excess of 10 years
after the date of grant.
 
                                      F-17
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     In March, 1998 the Board voted to grant 1,007,500 options to certain
employees at exercise prices ranging from $3.00 to $3.30 per share. The
estimated fair market value of the Company's Common Stock at the date of grant
was determined to be $6.75 per share. Accordingly, such grants were deemed to be
compensatory options in accordance with Accounting Principles Board Opinion No.
25, "Accounting for Stock issued to employees" ('APB No. 25'). Total
option-related compensation expense for the three months ended March 31, 1998
was immaterial.
 
     In June 1997, the Company adopted the 1997 Director Stock Option Plan (the
'Director Plan') which provides for the granting of non-qualifying stock options
to purchase-up to 50,000 shares of common stock. Under the Director Plan,
non-employee directors are entitled to receive options to purchase 2,000 shares
of common stock on July 1 of each year commencing in 1997. In addition, each
eligible non-employee director would receive an option to purchase 2,000 shares
of common stock upon the initial election to the Board of Directors. The
exercise price of the options, which vest in four equal installments starting
from the date of the grant, will equal the fair market value on the date of the
grant. Each option shall expire 10 years after the date of the grant.
 

     A summary of stock option activity through March 31, 1998:
WEIGHTED
                                                                                     AVERAGE
                                                                      SHARES      EXERCISE PRICE
                                                                    ----------    --------------
Outstanding at March 17, 1995
  Granted........................................................    1,023,718        $ 1.50
  Exercised......................................................      (53,332)         1.50
  Forfeited/canceled.............................................      (20,000)         1.50
                                                                    ----------        ------
Outstanding at December 31, 1995.................................      950,386          1.50
  Granted........................................................      444,554          2.07
  Exercised......................................................      (24,794)         1.50
  Forfeited/canceled.............................................     (449,301)         1.61
                                                                    ----------        ------
Outstanding at December 31, 1996.................................      920,845          1.72
  Granted........................................................      517,597          3.00
  Exercised......................................................      (38,035)         1.64
  Forfeited/canceled.............................................     (349,115)         2.29
                                                                    ----------        ------
Outstanding at December 31, 1997.................................    1,051,292          2.17
  Granted........................................................      402,377          3.07
  Exercised......................................................      (37,702)         1.71
  Forfeited/canceled.............................................      (99,770)         2.54
                                                                    ----------        ------
Outstanding at March 31, 1998....................................    1,316,197          2.43
                                                                    ----------        ------
                                                                    ----------        ------
Options vested and exercisable at December 31, 1996 and 1997 and March 31,
1998 were 151,571, 239,807, and 488,458, respectively.
 
     In July and October 1995 the Company granted options to purchase a total of
260,000 shares of Common Stock other than pursuant to the 1995 Stock Plan at an
exercise price of $1.50 per share.
 
     The Company has adopted the disclosure-only provisions of SFAS No. 123, but
applies APB No. 25 and related Interpretations in accounting for options.
Accordingly, no compensation expense has been recognized for the issuance of
options. Pursuant to the required pro forma disclosure under the fair value
method of estimating compensation cost, the Company has estimated the fair value
of its stock options by applying a present value approach which does not
consider expected volatility of the underlying stock ('minimum value method')
using
 
                                      F-18
GIGA INFORMATION GROUP, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
risk free interest rates based on zero coupon Treasury instruments with
maturities similar to the estimated option term and assuming no dividends.
 
     Had compensation cost for the Company's stock option plans been determined
based on the fair value at the grant date for awards in 1995, 1996 and 1997
consistent with the provisions of SFAS No. 123, the Company's net loss to common
stockholders and net loss per share to common stockholders would have been
increased to the SFAS No. 123 pro forma amounts indicated below in thousands
except per share amounts:
THREE MONTHS
                                                                                            ENDED MARCH
                                                                      1996        1997        31, 1998
                                                                    --------    --------    ------------
Net loss to common stockholders--as reported.....................   $(25,390)   $(21,817)     $ (3,807)
Net loss to common stockholders--SFAS No. 123
  pro forma......................................................    (25,427)    (21,941)       (3,852)
Net loss per share to common stockholders--as reported...........               $ (10.53)     $  (1.80)
Net loss per share to common stockholders--SFAS No. 123 pro
  forma..........................................................                 (10.59)        (1.82)
The effects of applying SFAS No. 123 in this pro forma disclosure are not
indicative of the effects on reported net income for future years. SFAS No. 123
does not apply to awards prior to 1996 and additional awards in future years are
anticipated.
 
     The weighted average fair value per share at date of grant for stock
options granted during the years December 31, 1996 and 1997 and the three months
ended March 31, 1998 was $0.22, $0.38 and $0.36, respectively. The fair value of
each option granted during the years ended December 31, 1996 and 1997 is
estimated on the date of grant using the Black-Scholes option pricing model with
a zero expected volatility, a dividend yield of 0%, weighted average expected
lives of 6.3 and 8.0 years, respectively, and weighted average risk free
interest rates of 6.0% and 6.2%, respectively.
 

     The following table summarizes the status of the Company's stock options
outstanding and exercisable at March 31, 1998:
STOCK OPTIONS
                            STOCK OPTIONS OUTSTANDING                   EXERCISABLE
                   -------------------------------------------     ----------------------
                                                      WEIGHTED                   WEIGHTED
                                 WEIGHTED AVERAGE     AVERAGE                    AVERAGE
   RANGE OF                         REMAINING         EXERCISE                   EXERCISE
EXERCISE PRICES     SHARES       CONTRACTUAL LIFE      PRICE        SHARES        PRICE
---------------    ---------     ----------------     --------     ---------     --------
$1.50 to $1.80       531,709         5.2 years         $ 1.53        423,039      $ 1.54
$2.70 to $3.30       784,488         9.5 years         $ 2.98         65,419      $ 2.94
                   ---------                                       ---------
  Total            1,316,197                                         488,458
                   ---------                                       ---------
                   ---------                                       ---------
Warrants
 
     In connection with its engagement of a private placement agent for the sale
by the Company of the Series B Preferred Stock, the Company agreed in June 1995
to issue the placement agent a warrant to purchase 107,876 shares of Series B at
an exercise price of $4.625 per share. In connection with the Series B bridge
financing, the Company agreed in August 1995 to issue the lender a warrant to
purchase 285,714 shares of Series B at an exercise price of $2.345 per share,
which warrant was exercised on a cashless basis in September 1996 for 218,714
shares. Both of these warrants are for a term of five years, subject to earlier
expiration upon the occurrence of certain events. The Company believes the fair
market value of each warrant was nominal.
 
                                      F-19
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     In connection with the issuance of Series C, the Company issued warrants to
purchase up to 1,409,179 shares of Series C at an exercise price of $4.50 per
share. These warrants are for a term of five years, subject to earlier
expiration upon the occurrence of certain events.
 
16. STOCK PURCHASE PLANS/AGREEMENTS:
 
     In the period from inception to December 31, 1995, the Company sold 139,999
shares of Common Stock to certain employees of the Company at $1.50 per share
under the provisions of the 1995 Stock Plan or separate stock purchase

agreements. Employees vest in these shares over four years from their respective
dates of purchase, with 25% vesting on the first anniversary of the purchase and
pro rata thereafter over the remaining 36 months. If an employee who purchased
stock under either the 1995 Stock Plan or separate agreements ceases to be
employed by the Company, the Company at its option may elect to repurchase the
employee's unvested shares at the original cost paid by the employee for such
stock and vested shares at a price equal to the fair market value as determined
on the date of repurchase.
 
     In October 1995, the Company sold 40,000 shares of Common Stock to a
director who also serves as a consultant to the Company for $1.50 per share of
which $10,000 was paid in cash and $50,000 was paid in the form of a nonrecourse
interest bearing note due March 31, 1996. In June 1996, the Company canceled the
promissory note plus interest accrued thereunder (totaling approximately
$52,000), in lieu of payment to the director for services rendered to the
Company in 1995 (for which the director was entitled to receive $25,000) and the
first six months of 1996 (for which the director was entitled to receive
$30,000) plus interest. These shares are also subject to certain repurchase
rights by the Company in the event that the director ceases to be either a
director of, or consultant to, the Company.
 
     Pursuant to an agreement entered into in February 1997, the Company issued
to a director of the Company for services rendered 16,667 shares of Common Stock
which vest over six quarterly periods contingent upon services being provided
during the period. The Company recorded as compensation expense $50,000
representing the fair value of the Common Stock over the period during which the
services are rendered. Under the agreement, the Company also granted to the
director 8,333 non-qualified stock options with an exercise price at the fair
market value on the date of grant which vest over four years. In addition, the
Company reimbursed him $18,000 for operational expenses.
 
17. EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS:
 
     In the United States, the Company maintains a Savings and Retirement Plan
(the '401 (k) Plan') under Section 401 of the Internal Revenue Code. In 1997,
the Company amended its 401(k) Plan specifying that employees can enter the plan
on the date of hire or the first day of the month. Employees must have attained
the age of 21. In prior years, employees were eligible to participate in the
401(k) Plan who worked a minimum of one year and had attained the age of 21. The
Company matched by 25% that portion representing the first 3% of an employee's
base salary and by 50% that portion representing the next 3% of an employee's
base salary. Effective in 1997, the employer contributions are discretionary
after considering business results at the conclusion of each plan year. The
Company has made mandatory contributions to the 401(k) Plan of $47,000 and
$63,000 during the period March 17 to December 31, 1995 and the year ended
December 31, 1996, respectively, and made no discretionary contributions during
the year ended December 31, 1997 and the three months ended March 31, 1997 and
1998.
 
     In the United Kingdom, the Company maintains a defined contribution plan.
All permanent employees who have attained the age of 20, and are not
contributing to a personal pension plan, are eligible to participate. The
Company matches a percentage of employee contributions which are invested at
each participant's discretion in a choice of three funds. The employer matching

percentage is determined within defined age ranges. During the period March 17
to December 31, 1995, the years ended December 31, 1996 and 1997, and the three
months
 
                                      F-20
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
ended March 31, 1997 and 1998, the Company's match totaled $2,000, $2,000,
$2,000, $500 and $500, respectively.
 
18. DISCONTINUED OPERATIONS:
 
     On June 25, 1996, the Company announced the discontinuation of the BIS
market research business. In connection with the discontinuance of such
operations, the Company terminated the personnel employed in developing and
compiling the data-intensive BIS market research products, ceased operations at
two of its licensed facilities in England and entered into contracts with two
independent IT service providers engaged to fulfill the Company's obligations to
customers of BIS under certain existing subscription agreements, all of which
expired by June 1997. The contracts with the service providers required that
Giga pay a percentage of the remaining contract value in exchange for their
fulfillment of Giga's obligations. In 1996, a total of approximately $623,000
was paid to the service providers to fulfill the obligations remaining under the
discontinued operations. A provision of approximately $1,187,000 was established
for probable refunds in connection with dissatisfied clients. At December 31,
1996 a total of approximately $720,000 remained in the provision for refunds.
The contracts with the providers also require the service providers to pay
royalties to Giga upon the renewal of contracts by them. Through December 31,
1997, no royalties had been earned or received. The results of these operations
prior to June 25, 1996 have been classified as discontinued operations and prior
year financial statements have been restated to reflect the discontinuance. A
charge of approximately $2,315,000 (net of taxes of approximately $158,000) was
recorded in 1996 for the loss on disposition of the operations consisting
primarily of rent and compensation. Included within the charge was a provision
related to the operations at two facilities in England which, based on the
market for subleased properties at the time, approximates the present value of
the expected expenses of these facilities for two and one-half years plus fifty
percent of the expected expenses over the remaining life of the leases and a
provision for the severance benefits payable to the terminated employees.
 
     A gain of approximately $1,101,000 was recorded in 1997, mainly comprised
of a reversal of the provision for future lease commitments and related expenses
for two facilities in England and the provision which was established for
refunds to dissatisfied customers.
 
     The net liabilities of the discontinued operations of the BIS business have
been segregated in the consolidated balance sheets and as of December 31, 1996
consist primarily of accounts receivable ($404,000), amounts payable related to
rent and facilities expenses ($2,245,000), customer refunds ($720,000),

liability to providers ($206,000) and salaries and related severance costs
($56,000). The operating results of the BIS business are summarized as follows
(in thousands):
MARCH 17, TO
                                                               DECEMBER 31,       YEAR ENDED
                                                                   1995        DECEMBER 31, 1996
                                                               ------------    -----------------
Revenues....................................................     $ 11,329           $ 3,557
Pre-tax income..............................................        2,987                35
Provision for income taxes..................................        1,497               114
Net income (loss)...........................................        1,490               (79)
On December 20, 1996 the Company elected to discontinue its Australian
econometric forecasting business and commenced discussions with the management
team for the purchase of the entire business. A charge of approximately $160,000
was recorded at the time for the loss on disposition of the operations
consisting primarily of estimated losses to be incurred in the operation of the
business through the anticipated disposal date. The entire business was sold in
July 1997 to the management team for AU$407,500, or approximately $293,000 at
the time of sale. A gain of approximately $212,000 was recognized on the
disposition after giving effect to transaction costs.
 
                                      F-21
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
     The net assets of the discontinued Australian business have been segregated
in the consolidated balance sheets and as of December 31, 1996 consist primarily
of accounts receivable ($438,000), prepaid expenses ($394,000), property, plant
and equipment, net ($404,000), deferred revenue ($496,000), reserve for loss on
disposal ($162,000) and provision for long-term service ($258,000).
 
     The results of the Australian operations prior to December 20, 1996 have
been classified as discontinued operations and prior year financial statements
have been restated to reflect the discontinuance. The operating results of the
Australian operations are summarized as follows (in thousands):
MARCH 17, TO
                                                               DECEMBER 31,       YEAR ENDED
                                                                   1995        DECEMBER 31, 1996
                                                               ------------    -----------------
Revenues....................................................     $  3,747           $ 4,437
Pre-tax income..............................................          154              (134)
Provision for income taxes..................................           --                --
Net income (loss)...........................................          154              (134)
F-22
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
19. GEOGRAPHICAL MARKET INFORMATION:
 
     The Company operates in one continuing business segment and in the
geographical markets indicated in the table below. Sales for continuing
operations are reflected in the segment from which the sales are made. The Other
International segment includes France, Italy, Germany and Korea.
UNITED     UNITED         OTHER
                                                                     STATES     KINGDOM    INTERNATIONAL     TOTAL
                                                                    --------    -------    -------------    --------
                                                                                     (IN THOUSANDS)
March 17, 1995 to December 31, 1995:
  Revenues:
     Total revenues..............................................   $  3,755    $ 2,051        $ 1,270       $  7,076
     Transfers between areas.....................................         --        (55)           (62)          (117)
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $  3,755    $ 1,996        $ 1,208       $  6,959
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $ (5,183)   $  (857)       $  (565)      $ (6,605)
  Total assets...................................................     21,534      2,077          1,222         24,833
January 1, 1996 to December 31, 1996:
  Revenues:
     Total revenues..............................................   $  6,961    $ 2,314        $   948       $ 10,223
     Transfers between areas.....................................         --        (35)           (50)           (85)
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $  6,961    $ 2,279        $   898       $ 10,138
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $(21,073)   $(1,386)       $(1,154)      $(23,613)
  Total assets...................................................     17,928      1,019            732         19,679
January 1, 1997 to December 31, 1997:
  Revenues:
     Total revenues..............................................   $ 17,249    $ 2,014        $   396       $ 19,659
     Transfers between areas.....................................         --         --             --             --
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $ 17,249    $ 2,014        $   396       $ 19,659
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $(21,031)   $(1,064)       $(1,718)      $(23,813)
  Total assets...................................................     20,114      1,690          1,219         23,023

January 1, 1997 to March 31, 1997:
  Revenues:
     Total revenues..............................................   $  3,432    $   506        $    88       $  4,026
     Transfers between areas.....................................         --         --             --             --
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $  3,432    $   506        $    88       $  4,026
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $ (5,193)   $  (168)       $  (401)      $ (5,762)
  Total assets...................................................     13,485      1,189            964         15,638
January 1, 1998 to March 31, 1998:
  Revenues:
     Total revenues..............................................   $  7,852    $   514        $   186       $  8,552
     Transfers between areas.....................................         --         --             --             --
                                                                    --------    --------    -------------    --------
     Unaffiliated revenues.......................................   $  7,852    $   514        $   186       $  8,552
                                                                    --------    --------    -------------    --------
                                                                    --------    --------    -------------    --------
  Loss from operations...........................................   $ (2,948)   $  (404)       $  (402)      $ (3,754)
  Total assets...................................................     12,353      1,875          1,445         15,673
F-23
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
 
  Export Sales
 
     The information below summarizes export sales by geographic area for the
United States operations of Giga (in thousands):
TOTAL
                                                                                           EXPORT
                                                            EUROPE    FAR EAST    OTHER    SALES
                                                            ------    --------    -----    ------
March 17 to December 31, 1995............................    $191       $251      $105     $  547
1996.....................................................     124        101        11        236
1997.....................................................     924         87         8      1,019
January 1 to March 31, 1997..............................     153         41         2        196
January 1 to March 31, 1998..............................     443         11         1        455
20. SUBSEQUENT EVENTS:
 
     In April 1998, the Company designated 2,000,000 shares of Preferred Stock
as Series D Convertible Preferred Stock ('Series D') and, for cash proceeds of

$1,500,000, issued 214,286 shares of Series D and warrants to purchase 115,714
shares of Series D at $9.00 per share. The warrants expire on April 5, 2003.
 
     Each share of Series D is convertible, at the holder's option, into that
number of shares of Common Stock as determined by dividing the original purchase
price by the conversion price in effect at the time of conversion. Each share of
Series D is currently convertible into two-thirds of a share of Common Stock.
 
     The Series D will automatically convert into Common Stock at the then
effective conversion price upon the earlier of (a) the approval by the holders
of at least two-thirds (2/3) of the then outstanding Series D shares, (b)
immediately prior to the closing of a firmly underwritten public offering of
Common Stock at a price of at least $15.75 per share (as adjusted for splits,
combinations and share dividends), and having aggregate cash proceeds of at
least $15,000,000 and (c) immediately prior to the closing of a firmly
underwritten public offering of Common Stock at a price of at least $12.00 per
share and having aggregate cash proceeds of at least $30,000,000 and which
closes on or prior to January 31, 1999.
 
     In the event of liquidation, dissolution or winding up of the Company
(either voluntary or involuntary) or the merger or consolidation of the Company
with another corporation or the sale or transfer of all or substantially all of
the assets of the Company which is not agreed to by the holders of not less than
a majority of the Preferred Stock, voting together as a single class, and in
which the stockholders of the Company immediately prior to the such transaction
do not own more than 50% interest in the surviving entity, holders of Series D
will be entitled to receive out of the assets of the Company, prior and in
preference to any distribution of any of the assets of the Company to the
holders of Common Stock, but after payment of any liquidation preference which
may be provided for any other series of Preferred Stock, the original purchase
price for each outstanding share of Series D held (as adjusted for splits and
combinations), plus all declared and unpaid dividends prior to any distribution
to the holders of the Company's Common Stock. Following distribution of such
preferential amounts, holders of Series D shall not participate in any further
distribution.
 
     Except as provided by law or in the Company's Amended and Restated
Certificate of Incorporation, the holders of Series D vote with the holders of
the Company's Common Stock on an as converted basis. In addition, as described
in the Certificate of Incorporation, the company may not take certain actions as
long as at least 1,000,000 shares of Series A, Series B, Series C and Series D
are outstanding, and without the approval of the holders of at least a majority
of the outstanding shares of Series A, Series B, Series C and Series D generally
voting together as a class.
 
     Also in April 1998, the Company entered into a Loan and Warrant Purchase
Agreement whereby the Company issued convertible promissory notes with a face
value of $10,000,000 and warrants to purchase up-to
 
                                      F-24
GIGA INFORMATION GROUP, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

 
(INFORMATION AS TO MARCH 31, 1998 AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
                             AND 1998 IS UNAUDITED)
166,667 shares of Common Stock in exchange for cash proceeds of $10,000,000. The
notes bear interest at an annual interest rate of 12% payable in quarterly
installments and are convertible into 952,381 shares of Common Stock. The
warrants are exercisable at $3.00 per share for a period of ten years from the
date of the grant. The fair market value of the warrants was recorded as a
discount of $1,046,907 to the Notes and such Notes will be recorded at
$8,953,093. Accordingly, approximately $1,046,907 of accretion will be charged
to interest expense, in addition to the stated interest rates, over the term of
the notes.
 
     The outstanding principal amount of the notes and warrants will be
automatically converted on February 1, 1999 into 1,428,571 shares of Series D
with warrants to purchase up to a maximum of 514,285 shares of Common Stock at
an exercise price of $13.50 per share unless the Company completes prior to that
date a public offering of Common Stock generating proceeds of at least
$30,000,000 at an offering price of at least $12.00 per share.
 
     In May 1998, the Company issued an additional 71,429 shares of Series D and
warrants to purchase 30,572 shares of Series D for consideration of $500,000.
 
     In May 1998, pursuant to a vote of the board of directors, the Company
effected a 1 for 3 reverse stock split of the Common Stock. All share and per
share data presented herein have been restated to reflect the Common Stock
split.
 
                                      F-25
REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
of Giga Information Group, Inc.:
 
We have audited the accompanying combined statements of operations and cash
flows of BIS Strategic Decisions for the period from January 1, 1995 to April 5,
1995. These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
 
We conducted our audit 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 audit provides a reasonable basis for our opinion.
 
As discussed in Note 1 to the combined financial statements, BIS Strategic
Decisions was acquired by Giga Information Group, Inc. on April 5, 1995 and has
been operated by the management of Giga since that date. The transaction
involved the payment of $200,000 cash and a convertible note in the principal
amount of $1,000,000 for all the outstanding shares of BIS Strategic Decisions.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined results of BIS Strategic Decisions'
operations and its cash flows for the period from January 1, 1995 to April 5,
1995 in conformity with generally accepted accounting principles.
 
Boston, Massachusetts
April 17, 1998
 
                                      F-26
BIS STRATEGIC DECISIONS
                       COMBINED STATEMENTS OF OPERATIONS
                 FOR THE PERIOD FROM JANUARY 1 TO APRIL 5, 1995
                                 (IN THOUSANDS)
Information service revenues.............................................................................  $   2,116
 
Cost and expenses:
 
  Cost of services and product development...............................................................      1,422
 
  Sales and marketing....................................................................................        167
 
  General and administrative.............................................................................      1,047
 
  Depreciation and amortization..........................................................................        215
                                                                                                           ---------
 
          Total costs and expenses.......................................................................      2,851
                                                                                                           ---------
 
Operating loss...........................................................................................       (735)
 
Interest income, net.....................................................................................         19
                                                                                                           ---------
 
          Loss from continuing operations before income taxes............................................       (716)
                                                                                                           ---------
 
Income tax benefit.......................................................................................       (213)
                                                                                                           ---------
 
          Loss from continuing operations................................................................       (503)
                                                                                                           ---------
 
Discontinued operations:
 
  Income from the discontinued BIS market research business, net of tax effect...........................        597
 
  Income from the discontinued Shrapnel business, net of tax effect......................................         54
                                                                                                           ---------
 
          Income from discontinued operations............................................................        651
                                                                                                           ---------
 
          Net income.....................................................................................  $     148
                                                                                                           ---------
                                                                                                           ---------
The accompanying notes are an integral part of the combined financial
                                  statements.

 
                                      F-27
BIS STRATEGIC DECISIONS
                       COMBINED STATEMENTS OF CASH FLOWS
                   FOR THE PERIOD JANUARY 1 TO APRIL 5, 1995
                                 (IN THOUSANDS)
Cash flows from operating activities:
  Net income.............................................................................................  $     148
     Adjustments to reconcile net income to net cash used in continuing operating activities:
       Net income from discontinued operations...........................................................       (651)
       Depreciation......................................................................................        191
       Amortization and write-down of goodwill...........................................................         24
       Provision for deferred income taxes...............................................................         58
       Allowance for doubtful accounts...................................................................          7
     Changes in certain operating assets and liabilities:
       Increase in accounts receivable...................................................................       (383)
       Decrease in unbilled services.....................................................................        183
       Increase in prepaid expenses and other current assets.............................................       (310)
       Decrease in accounts payable and accrued expenses.................................................       (531)
       Increase in deferred revenue......................................................................        370
                                                                                                           ---------
 
Net cash provided by (used in) operating activities of:
  Continuing operations..................................................................................       (894)
  Discontinued operations................................................................................        681
                                                                                                           ---------
Net cash used in operating activities....................................................................       (213)
 
Cash flows from investing activities:
  Purchase of fixed assets...............................................................................        (83)
  Proceeds from sale of equipment........................................................................         32
                                                                                                           ---------
Net cash used in investing activities....................................................................        (51)
 
Cash flows from financing activities:
  Proceeds from borrowings...............................................................................         22
  Principal payments on borrowings.......................................................................       (157)
  Principal payments on capital lease obligations........................................................        (19)
                                                                                                           ---------
Net cash used in financing activities....................................................................       (154)
 

Effect of exchange rate changes on cash..................................................................        219
                                                                                                           ---------
Net decrease in cash and cash equivalents................................................................       (199)
Cash and cash equivalents at beginning of period.........................................................      1,809
                                                                                                           ---------
Cash and cash equivalents at end of period...............................................................  $   1,610
                                                                                                           ---------
                                                                                                           ---------
Supplemental cash flow information:
  Income taxes paid......................................................................................  $       7
  Interest paid..........................................................................................  $       2
The accompanying notes are an integral part of the combined financial
                                  statements.
 
                                      F-28
BIS STRATEGIC DECISIONS
                     NOTES TO COMBINED FINANCIAL STATEMENTS
 
1. BACKGROUND:
 
     BIS Strategic Decision, Inc. and its five foreign affiliates (collectively
'BIS Strategic Decisions' or 'BIS') were wholly-owned subsidiaries of Friday
Holdings, L.P. ('FHLP'). On April 5, 1995, Giga Information Group, Inc. ('Giga')
acquired 100% of the common stock outstanding of each of the BIS companies from
FHLP for $200,000 in cash and a $1,000,000 convertible promissory note. The
acquisition of BIS by Giga was accounted for as a purchase. As part of the
transaction, a $1,300,000 intangible asset was recorded representing the fair
value of payments being made on a property lease through May 1998 by a former
owner of BIS.
 
     On June 25, 1996, Giga elected to discontinue the BIS market research
business. In connection with the discontinuance of such operations, Giga
terminated the personnel employed in developing and compiling the BIS market
research products, ceased operations at two of the licensed facilities in
England and entered into contracts with two independent IT service providers
engaged to fulfill Giga's obligations to customers of BIS under certain existing
subscription agreements, all of which expired on or before June 1997.
 
     On December 20, 1996, Giga elected to discontinue its economic forecasting
business in Australia, BIS Shrapnel PTY Ltd. ('BIS Shrapnel'). In connection
with the discontinuance of such business, in July 1997 Giga sold the stock of
BIS Shrapnel to the management team in exchange for AU$407,500, or approximately
$293,000 at the time of sale.
 
     The continuing operations reflected in the financial statements represent
revenues and expenses associated with BIS Information Service revenues which
include events, publications and consulting. The results of the BIS market
research business and BIS Shrapnel have been shown as discontinued operations.
 
2. SIGNIFICANT ACCOUNTING POLICIES:
 
  Basis of Presentation
 
     The combined financial statements of BIS Strategic Decision include the
accounts of BIS Strategic Decisions, Inc., BIS Strategic Decisions, Ltd., BIS
Shrapnel, BIS Strategic Decisions, GmbH, BIS Strategic Decisions, Srl and BIS
Strategic Decisions, Sarl. All intercompany accounts and transactions have been
eliminated in combination.
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates and
assumptions that effect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
 
  Foreign Currency Translation

 
     For international operations, the local currency is used as the functional
currency. Income statement items are translated at the average rates of exchange
for the year. Realized and unrealized exchange gains or losses arising from
transaction adjustments are reflected in operations and are not material.
 
                                      F-29
BIS STRATEGIC DECISIONS
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
  Cash Equivalents
 
     Cash equivalents consist of highly liquid investments with maturities of
three months or less at date of purchase.
 
  Revenue Recognition
 
     Revenues from events, publications and consulting are recognized as
follows:
 
          Events--revenues and associated expenses are recognized during the
     month that the conference is held.
 
          Publications--revenues from general and research reports are
     recognized when the report is published. Newsletter revenues are recognized
     over the subscription period.
 
          Consulting Services--revenues are recognized based on the percentage
     of the service that has been performed.
 
  Income Taxes
 
     The Predecessor Companies recognize deferred tax assets and liabilities for
the expected future tax consequences of events that have been included in the
Predecessor Companies' consolidated financial statements. Under this method,
deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax bases of assets and liabilities using
currently enacted tax rates for the year in which the differences are expected
to reverse. The Predecessor Companies record a valuation allowance against net
deferred tax assets if, based upon the available evidence, it is more likely
than not that some or all of the deferred tax assets will not be realized.
 
     The BIS companies filed separate tax returns.
 
  Property and Equipment
 
     Property and equipment are depreciated over the estimated useful lives of
the related assets using the straight-line method. Computers and related
equipment are depreciated over three years, furniture and fixtures are
depreciated over five years and motor vehicles are depreciated over four years.
Leasehold improvements are amortized over the lesser of the noncancelable term
of the related lease or their estimated economic lives. Maintenance and repairs

are charged to expense as incurred.
 
3. PROPERTY AND EQUIPMENT:
 
     Depreciation expense and amortization of leasehold improvements was
$191,000 for the period from January 1, 1995 to April 5, 1995.
 
4. CREDIT ARRANGEMENTS:
 
One of the combined affiliates of the Company has a working capital line of
credit agreement with a bank under which it may borrow amounts up to $750,000.
The line of credit bears interest at the bank's base rate plus 1.5% and is
secured by all assets owned or leased by the affiliate. The agreement contains
operational covenants and expired on December 31, 1994; however, the bank has
allowed the affiliate to extend the line pending resolution of the sale of the
affiliate. As of April 5, 1995, no amounts were outstanding under the line.
 
     The weighted average interest rate of outstanding borrowings was 7.5% for
the period January 1, 1995 to April 5, 1995.
 
                                      F-30
BIS STRATEGIC DECISIONS
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
5. INCOME TAXES:
 
     For financial reporting purposes, the income tax benefit from continuing
operations was based on the following components:
Pretax loss from continuing operations:
  United States...................................................   $(497)
  Foreign.........................................................    (219)
                                                                     -----
          Total pretax loss from continuing operations............   $(716)
                                                                     -----
                                                                     -----
The results of continuing operations include a foreign tax benefit of
$3,000.
 
6. PENSION PLANS:
 
     BIS has established the CAP International Savings and Retirement Plan (the
401(k) Plan), a profit sharing plan under Section 401 of the Internal Revenue
Code. Employees are eligible to participate in the 401(k) Plan by meeting
certain requirements, including length of service and minimum age. BIS matches
the first 3% of an employee's contribution by 25% and the next 3% of an
employee's contribution by 50%. BIS may also make additional contributions to
the plan at the discretion of the Board of Directors. BIS has not made any

discretionary contributions to the profit sharing plan. For the period January 1
to April 5, 1995, BIS contributed $23,000 to the plan.
 
7. LEASE COMMITMENTS:
 
     BIS leases certain office space and equipment under operating lease
agreements. Rent expense was $232,000 for the period January 1 to April 5, 1995.
 
8. JOINT VENTURE AGREEMENT:
 
     On October 18, 1991, BIS entered into a joint venture agreement with a
Japanese company. The purpose of the joint venture was to provide additional
market penetration in Japan for its products and services. Under the terms of
the joint venture agreement, the Predecessor Companies may be required to pay
its Japanese partner approximately $75,000 if cumulative sales under the joint
venture do not meet certain agreed upon levels by December 31, 1995. In
addition, on or prior to April 1, 1996, the Predecessor Companies may be
required to increase its investment in the joint venture by approximately
$23,000.
 
9. GEOGRAPHIC MARKETS:
 
     BIS operates in one business segment and in the geographical markets
indicated in the table below. Revenues from continuing operations are reflected
in the market from which the sales are made. The Other International market
includes France, Italy and Germany.
 
JANUARY 1, 1995 TO APRIL 5, 1995 (IN THOUSANDS):
NORTH     UNITED         OTHER
                                                              AMERICA    KINGDOM    INTERNATIONAL    TOTAL
                                                              -------    -------    -------------    ------
Revenues:
  Total revenues...........................................   $1,113      $ 499         $ 586        $2,198
  Transfers between areas..................................       --        (19)          (63)          (82)
                                                              -------    -------       ------        ------
  Unaffiliated revenues....................................   $1,113      $ 480         $ 523        $2,116
                                                              -------    -------       ------        ------
                                                              -------    -------       ------        ------
Loss from continuing operations............................   $ (537)     $ (22)        $(176)       $ (735)
F-31
BIS STRATEGIC DECISIONS
              NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)
 
     Export sales by geographic area for the U.S. operations of BIS totaled
$163,000 for the period January 1 to April 5, 1995 and were comprised of $57,000
to Europe, $75,000 to the Far East and $31,000 to other areas.

 
10. DISCONTINUED OPERATIONS:
 
     On June 25, 1996, Giga decided to discontinue the BIS Market Research
business. The results of these operations have been classified as discontinued
operations and the financial statements have been restated to reflect the
discontinuance. The operating results of the business for the period from
January 1 to April 5, 1995 are summarized as follows (in thousands):
Revenues.........................................................   $3,994
Pre-tax income...................................................      876
Provision for income taxes.......................................      279
Net income.......................................................      597
On December 20, 1996, Giga decided to discontinue its Australian
econometric forecasting business. The results of these operations have been
classified as discontinued operations and the financial statements have been
restated to reflect the discontinuance. The operating results of the business
for the period from January 1 to April 5, 1995 are summarized as follows (in
thousands):
Revenues.........................................................   $1,121
Pre-tax income...................................................       54
Provision for income taxes.......................................       --
Net income.......................................................       54
F-32
================================================================================

     NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY, TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
                            ------------------------
 
                               TABLE OF CONTENTS
                            ------------------------
PAGE
                                                  ----
Prospectus Summary.............................     3
Risk Factors...................................     7
Use of Proceeds................................    14
Dividend Policy................................    14
Capitalization.................................    15
Dilution.......................................    16
Selected Financial Data........................    17
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations...................................    19
Business.......................................    25
Management.....................................    31
Certain Transactions...........................    38
Principal Stockholders.........................    42
Description of Capital Stock...................    45
Shares Eligible for Future Sale................    48
Underwriting...................................    50
Legal Matters..................................    52
Experts........................................    52
Additional Information.........................    52
Index to Consolidated Financial
  Statements...................................   F-1
------------------------
 
     UNTIL   , 1998 (25 DAYS AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF COMMON STOCK
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A

PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

================================================================================

================================================================================
 
                                           SHARES
 
                                     [GIGA]
 
                                  COMMON STOCK
 
                            ------------------------
                                   PROSPECTUS
                            ------------------------
                     FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
 
                                           , 1998

================================================================================
PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
     The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered, other than the
underwriting discounts and commissions. All amounts shown are estimates except
for the Securities and Exchange Commission registration fee and the NASD filing
fee.
SEC Registration Fee........................................................................   $ 13,570
NASD Filing Fee.............................................................................      5,100
Nasdaq Listing Fee..........................................................................      *
Blue Sky Fees and Expenses..................................................................      *
Transfer Agent and Registrar Fees...........................................................      *
Accounting Fees and Expenses................................................................      *
Legal Fees and Expenses.....................................................................      *
Printing, Engraving and Mailing Expenses....................................................      *
Premium for directors and officers insurance................................................      *
Miscellaneous...............................................................................      *
                                                                                               --------
     Total..................................................................................   $  *
                                                                                               --------
------------------
* To be completed by Amendment
 
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
     Article Seven of the Registrant's Amended and Restated Certificate of
Incorporation (the 'Restated Certificate') provides that no director of the
Registrant shall be personally liable for any monetary damages for any breach of
fiduciary duty as a director, except to the extent that the Delaware General
Corporation Law (the 'DGCL') prohibits the elimination or limitation of
liability of directors for breach of fiduciary duty.
 
     Article Eight of the Restated Certificate provides that a director or
officer of the Registrant (a) shall be indemnified by the Registrant against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement incurred in connection with any litigation or other legal proceeding
(other than an action by or in the right of the Registrant) brought against him
by virtue of his position as a director or officer of the Registrant if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Registrant, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful and (b) shall be indemnified by the Registrant against all expenses
(including attorneys' fees) and amounts paid in settlement incurred in
connection with any action by or in the right of the Registrant brought against

him by virtue of his position as a director or officer of the Registrant if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Registrant, except that no indemnification
shall be made with respect to any matter as to which such person shall have been
adjudged to be liable to the Registrant, unless a court determines that, despite
such adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice, he
is required to be indemnified by the Registrant against all expenses (including
attorneys' fees) incurred in connection therewith. Expenses shall be advanced to
a director or officer at his request, provided that he undertakes to repay the
amount advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
 
     Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or
 
                                      II-1
officer must give the Registrant notice of the action for which indemnity is
sought and the Registrant has the right to participate in such action or assume
the defense thereof.
 
     Section 145 of the DGCL provides that a corporation has the power to
indemnify a director, officer, employee or agent of the corporation and certain
other persons serving at the request of the corporation in related capacities
against amounts paid and expenses incurred in connection with an action or
proceeding to which he is or is threatened to be made a party by reason of such
position, if such person shall have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, in any criminal proceeding, if such person had no reasonable
cause to believe his conduct was unlawful; provided that, in the case of actions
brought by or in the right of the corporation, no indemnification shall be made
with respect to any matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the adjudicating
court determines that such indemnification is proper under the circumstances.
 
     The Board of Directors on April 26, 1996 approved, in accordance with
Section 145 of the DGCL, a Directors and Officers Indemnification Agreement to
be entered into between the Registrant and each of Registrant's directors and
officers. Pursuant to the terms of the agreement, the Registrant agrees to hold
any director or officer harmless against any and all expenses, judgments, fines
and amounts paid in settlement actually and reasonably incurred by such director
or officer in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative

(including an action by or in the right of the Registrant), to which the
director or officer becomes a party at any time or is threatened to be made a
party, by reason of the fact that the director or officer is a director,
officer, employee or agent of the Registrant, or serves at the request of the
Registrant as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise;
and otherwise to the fullest extent as may be provided to the director or
officer by the Registrant under the non-exclusivity provisions of Article V of
the Bylaws of the Registrant and the Delaware General Corporation Law. The
agreement also obligates the Registrant under certain circumstances to advance
amounts and contribute to any amounts paid out by a director or officer as a
result of his or her role as a director or officer of the Registrant in cases
where indemnification by the Registrant is not available. This agreement is also
intended to indemnify special advisors of the Registrant.
 
     Under Section 8 of the Underwriting Agreement, the Underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the Registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed as
Exhibit 1 hereto.
 
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
 
     Set forth in chronological order below is information regarding the number
of shares of capital stock and other securities issued by the Registrant since
the Registrant's inception in March 1995. Further included is the consideration,
if any, received by the Registrant for such shares of capital stock and other
securities and information relating to the section of the Securities Act, or
rule of the Commission under which exemption from registration was claimed. All
awards of options did not involve any sale under the Securities Act and none of
these securities was registered under the Securities Act.
 
      1.  Since March 1995, the Registrant has issued options to purchase an
aggregate of 2,385,293 shares of Common Stock at a weighted average exercise
price of $2.20 per share. During this same time period, the Registrant has
issued a total of 2,211,305 shares of Common Stock pursuant to the exercise of
options previously granted.
 
      2.  In March 1995, the Registrant sold to its Chairman of the Board of
Directors and Chief Executive Officer 1,400,000 shares of Common Stock at a
purchase price of $0.07125 per share.
 
      3.  In April 1995, the Registrant issued to Friday Holdings, L.P. a 5%
$1.0 million principal amount convertible promissory note in connection with the
Registrant's acquisition of BIS Strategic Decisions, Inc. and its five foreign
affiliates.
 
      4.  In June 1995, the Registrant issued a warrant to purchase 107,876
shares of Series B Preferred Stock to Montgomery Securities in consideration for
certain placement agent services at an exercise price of $4.625 per share.
 
                                      II-2
5.  In July 1995 and October 1995, the Registrant issued and sold an
aggregate of 570,000 shares of Series A Preferred Stock, $.001 par value
('Series A Preferred Stock') to a group of investors, including certain
employees and directors, at a purchase price of $5.00 per share.
 
      6.  In July 1995, the Registrant issued 160,000 shares of Series A
Preferred Stock to its Chairman of the Board of Directors and Chief Executive
Officer and to its Senior Vice President, Research & Technology in connection
with the Registrant's acquisition of a majority of the shares of ExperNet
Corporation ('ExperNet') and in December 1995, the Registrant issued to its
Senior Vice President, Research & Technology, in connection with the
Registrant's acquisition of the remaining shares of ExperNet, a 6% $400,000
convertible promissory note.
 
      7.  In August 1995, the Company issued to Mr. Crandall 40,000 shares of
Common Stock at a purchase price of $1.50 per share.
 
      8.  In August 1995, the Registrant issued a warrant to purchase 285,714
shares of Series B Preferred Stock to an investor at an exercise price of $2.345
per share. In September 1996, the investor made a cashless exercise of the
warrant and received 218,714 shares of the Company's Series B Preferred Stock.
 
      9.  Throughout 1995, the Registrant issued 2,036,002 shares of Common
Stock to a group of employees, consultants and directors at a purchase price of
$1.50 per share.
 
      10.  In November 1995 and February 1996, the Registrant issued and sold an
aggregate of 8,144,642 shares of Series B Preferred Stock, $.001 par value
('Series B Preferred Stock') to a group of investors at a purchase price of
$3.50 per share.
 
     11.  In August 1996, the Registrant issued 8,333 shares of Common Stock to
an employee in connection with the acquisition of his business.
 
     12.  In May and December 1997, the Company issued and sold an aggregate of
2,609,491 shares of Series C Preferred Stock, $.001 par value ('Series C
Preferred Stock'), at a purchase price of $4.11 per share to a limited number of
investors (the 'Series C Investors').
 
     13.  In January 1998, the Company issued warrants to purchase an aggregate
of 1,409,127 shares of Series C Preferred Stock at an exercise price of $5.28
per share to the Series C Investors.
 
     14.  In April 1998, the Company issued convertible promissory notes in the
aggregate principal amount of $10.0 million and warrants to purchase an
aggregate of 166,666 shares of Common Stock at an exercise price of $3.00 per
share to certain affiliates of Friedman, Billings, Ramsey & Co., Inc. ('FBR').
 
     15.  In April and May 1998, the Company issued and sold an aggregate of
285,715 shares of Series D Preferred Stock, par value $.001 per share ('Series D
Preferred Stock'), at a purchase price of $7.00 per share and warrants to
purchase an additional 154,286 shares of Series D Preferred Stock at an exercise
price of $9.00 per share.
 

     Other than FBR, certain of whose affiliates purchased convertible notes
from the Company in April 1998, no underwriters were engaged in connection with
any of the foregoing sales of securities.
 
     The shares of capital stock and other securities issued in the above
transactions were offered and sold in reliance upon the exemption from
registration under Section 4(2) of the Securities Act or Regulation D or Rule
701 promulgated under the Securities Act, relative to sales by an issuer not
involving any public offering.
 
                                      II-3
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
     (A) EXHIBITS
EXHIBIT
   NO.      DESCRIPTION
---------   ---------------------------------------------------------------------------------------------------------
*    1    --   Form of Underwriting Agreement.
  3.1*       --   Fourth Amended and Restated Certificate of Incorporation of the Registrant.
  3.2        --   Certificate of Designations of Series D Preferred Stock of the Registrant.
  3.3*       --   Form of Amended and Restated Certificate of Incorporation of the Registrant (to be filed with the
                  State of Delaware prior to the closing of the Offering to which this Registration Statement
                  relates).
  3.4*       --   By-Laws of the Registrant.
  3.5*       --   Form of Amended and Restated Bylaws of the Registrant (to become effective upon the closing of the
                  Offering to which this Registration Statement relates).
  4.1*       --   Specimen Certificate for shares of Common Stock, $.001 par value, of the Registrant.
  5*         --   Opinion of Weil, Gotshal & Manges LLP with respect to the validity of the securities being offered.
 10.1        --   Series B Preferred Stock Purchase Agreement dated November 13, 1995, as amended, between the
                  Registrant and the Investors named on Exhibit A thereto.
 10.2*       --   Form of Series B Preferred Stock Purchase Warrant dated February 28, 1996 registered in the name of
                  Montgomery Securities.
 10.3        --   (a) Series C Preferred Stock and Warrant Purchase Agreement dated May 9, 1997, between the Registrant 
                      and the Investors named in Exhibit A thereto.
                 *(b) Amendment No. 1 to Series C Preferred Stock and Warrant Purchase Agreement.
                 *(c) Letter Agreement re: Purchase of Series C Stock, between the Company and the Investors named
                      on the signature page thereto.
 10.4        --   Form of Series C Preferred Stock Purchase Warrant dated January 2, 1998 and issued to the Investors
                  in the Series C Financing.
 10.5        --   Series D Preferred Stock and Warrant Purchase Agreement dated April 6, 1998 between the Registrant
                  and the Investors named in Exhibit A thereto.
 10.6        --   (a) Registration Rights Agreement dated November 13, 1995, among the Registrant, the Investors named 
                      on Exhibit A thereto, Gideon I. Gartner and David L. Gilmour.
                 *(b) Amendment No. 1 to Registration Rights Agreement.
                 *(c) Amendment No. 2 to Registration Rights Agreement.
                 *(d) Amendment No. 3 to Registration Rights Agreement.
                 *(e) Amendment No. 4  to Registration Rights Agreement.
 10.7        --   (a) Co-Sale and Stock Restriction Agreement dated November 13, 1995, among the Registrant, Gideon I. 
                      Gartner and the stockholders named on the signature pages thereto.
                 *(b) Amendment No. 1 to Co-Sale Agreement.
                 *(c) Amendment No. 2 to Co-Sale Agreement.
 10.8        --   Form of Series D Preferred Stock Purchase Warrant dated April 7, 1998 and issued to the Investors
                  in the Series D Financing.
 10.9        --   Loan and Warrant Purchase Agreement dated April 7, 1998 between the Registrant and the Lenders
                  named in Schedule A thereto.
 10.10       --   Form of Convertible Promissory Note dated April 7, 1998 issued to certain affiliates of Friedman,
                  Billings, Ramsey & Co., Inc.
 10.11       --   Form of Common Stock Purchase Warrant dated April 7, 1998 issued to certain affiliates of Friedman,
                  Billings, Ramsey & Co., Inc.

 10.12       --   Security Agreement dated as of April 7, 1998 between the Registrant and an affiliate of Friedman,
                  Billings, Ramsey & Co., Inc. as agent for the Lenders.
 10.13*      --   Consulting Agreement dated February 1, 1998 between the Registrant and David Gilmour.
 10.14*      --   Separation Agreement dated January 7, 1998 between the Registrant and Henry S. Givray.
 10.15*      --   Separation Agreement dated October 2, 1997 between the Registrant and Jacques Bouvard.
 10.16       --   Non-competition Agreement dated November 13, 1995 between the Registrant and Gideon I. Gartner.
 10.17       --   (a) Letter Agreement dated July 12, 1996 between the Registrant and Richard L. Crandall.
                 *(b) Letter Agreement dated February 11, 1997 between the Registrant and Richard L. Crandall.
 10.18       --   Lease dated October 31, 1995 between the Registrant and Cambridge 1400 Limited Partnership.
II-4
EXHIBIT
   NO.      DESCRIPTION
---------   ---------------------------------------------------------------------------------------------------------
10.19       --   Lease dated October 6, 1987, as amended, between BIS Strategic Decisions, Inc. and Charles A.
                  Pesko, Jr., as Trustee of Longwater Circle Trust.
 10.20*      --   Content Distribution Agreement dated May 21, 1996 between the Registrant and Dow Jones and Company,
                  Inc.
 10.21*      --   Content Distribution Agreement dated December 31, 1996 between the Registrant and Information
                  Access Corporation.
 10.22*      --   1995 Stock Option/Stock Issuance Plan
 10.23*      --   1996 Stock Option Plan
 10.24       --   1997 Director Option Plan
 21          --   Subsidiaries of the Registrant.
 23.1*       --   Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5).
 23.2        --   Consent of Coopers & Lybrand L.L.P.
 24          --   Powers of Attorney (included on page II-7).
 27          --   Financial Data Schedule.
------------------
* To be filed by amendment.
 
     (B) FINANCIAL STATEMENT SCHEDULES
 
     All other schedules have been omitted because they are not required or
because the required information is given in the Consolidated Financial
Statements or Notes thereto.
 
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 contained in the Restated Certificate of
Incorporation and Amended and Restated By-Laws of the Registrant and the laws of
the State of Delaware, or otherwise, the Registrant has been advised that in the
opinion of the 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 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)(l) 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.
 
          (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-5
SIGNATURES
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CAMBRIDGE,
COMMONWEALTH OF MASSACHUSETTS, ON THIS 15th DAY OF MAY, 1998.
 
                                          GIGA INFORMATION GROUP, INC.

                                          By: /s/ Gideon I. Gartner
                                             ----------------------------------
                                                    Gideon I. Gartner
                                                  Chairman of the Board,
                                          President and Chief Executive Officer
 
     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED. EACH PERSON WHOSE SIGNATURE APPEARS BELOW
HEREBY CONSTITUTES GIDEON I. GARTNER AND DANIEL M. CLARKE, AND EACH OF THEM
SINGLY, HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT, EACH WITH FULL POWER OF
SUBSTITUTION AND RESUBSTITUTION (UNTIL REVOKED IN WRITING) TO SIGN FOR SUCH
PERSON AND IN SUCH PERSON'S NAME AND CAPACITY INDICTAED BELOW, ANY AND ALL
AMENDMENTS TO THIS REGISTRATION STATEMENT AND ANY OTHER REGISTRATION STATEMENT
FILED IN CONNECTION WITH THE SAME OFFERING PURSUANT TO RULE 462(B) UNDER THE
SECURITIES ACT, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER
DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION,
HEREBY RATIFYING AND CONFIRMING SUCH PERSON'S SIGNATURE AS IT MAY BE SIGNED BY
SUCH ATTORNEYS TO ANY AND ALL SUCH AMENDMENTS AND ADDITIONAL REGISTRATION
STATEMENTS.
SIGNATURE                                        TITLE                              DATE
---------------------------------------------  ----------------------------------------------     ------------
/s/ Gideon I. Gartner
---------------------------------------------  Chairman of the Board of Directors, President      May 15, 1998
              Gideon I. Gartner                and Chief Executive Officer (Principal
                                               Executive Officer)

/s/ Daniel M. Clarke 
---------------------------------------------  Senior Vice President and Chief Financial          May 15, 1998
              Daniel M. Clarke                 Officer, Treasurer and Secretary (Principal
                                               Financial and Accounting Officer)

 /s/ David L. Gilmour
---------------------------------------------  Director                                           May 15, 1998
              David L. Gilmour

 /s/ Neill H. Brownstein
---------------------------------------------  Director                                           May 15, 1998
             Neill H. Brownstein
 
/s/ Richard L. Crandall
---------------------------------------------  Director                                           May 15, 1998
             Richard L. Crandall
 

---------------------------------------------  Director                                           May 15, 1998
                Irwin Lieber
 
/s/ Bernard Goldstein
---------------------------------------------  Director                                           May 15, 1998
              Bernard Goldstein
II-6
EXHIBIT INDEX
EXHIBIT
  NUMBER     DESCRIPTION                                                                                     PAGE NO.
----------   ---------------------------------------------------------------------------------------------   ---------
------------------
 
 * To be filed by amendment.
 
** [Confidential treatment requested as to certain portions, which portions are
   omitted and filed separately with the Commission.]