WHITE PINE SOFTWARE INC, SB-2/A, 1996-10-07

WHITE PINE SOFTWARE INC
SB-2/A, 1996-10-07
PREPACKAGED SOFTWARE

Previous: ITT HARTFORD MUTUAL FUNDS INC, 497, 1996-10-07

Next: TRAVELERS AETNA PROPERTY CASUALTY CORP, 424B2, 1996-10-07

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 7, 1996

REGISTRATION NO. 333-9525
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

WHITE PINE SOFTWARE, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

DELAWARE 7372 04-3151064
(STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
ORGANIZATION)
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)

542 AMHERST STREET
NASHUA, NEW HAMPSHIRE 03063
(603) 886-9050
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL
PLACE OF BUSINESS)

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

HOWARD R. BERKE
WHITE PINE SOFTWARE, INC.
542 AMHERST STREET
NASHUA, NEW HAMPSHIRE 03063
(603) 886-9050
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

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

COPIES TO:

PETER M. ROSENBLUM, ESQ. MARK L. LOUIS A. GOODMAN, ESQ. PATRICK J.
JOHNSON, ESQ. FOLEY, HOAG & ELIOT LLP FOYE, ESQ. SKADDEN, ARPS, SLATE,
ONE POST OFFICE SQUARE BOSTON, MEAGHER & FLOM ONE BEACON STREET
MASSACHUSETTS 02109 BOSTON, MASSACHUSETTS 02108

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] 333-

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] 333-

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

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

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

Dated October 7, 1996

3,000,000 SHARES

COMMON STOCK

-----------

All of the shares of Common Stock offered hereby are being sold by White Pine
Software, Inc. ("White Pine" or the "Company"). Prior to this offering, there
has been no public market for the Common Stock of the Company. It is currently
estimated that the initial public offering price will be between $8.00 and
$10.00 per share. See "Underwriting" for information relating to the
determination of the initial public offering price. Application has been made
to have the Common Stock approved for quotation on the Nasdaq National Market
under the symbol "WPNE."

-----------

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 6 HEREOF.

-----------

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 Proceeds to
Public Discount(1) Company(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................. $ $ $
Total(3).................................. $ $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses, estimated to be $950,000, payable by the
Company.
(3) The Company has granted the Underwriters an option, exercisable within 30
days of the date hereof, to purchase an aggregate of up to 450,000 shares
at the Price to Public less the Underwriting Discount to cover over-
allotments, if any. If all such shares are purchased, the total Price to
Public, Underwriting Discount and Proceeds to Company will be $ , $
and $ , respectively. See "Underwriting."

-----------

The Common Stock is offered by the several Underwriters named herein when, as
and if received and accepted by them, subject to their right to reject orders
in whole or in part and subject to certain other conditions. It is expected
that delivery of certificates for the Common Stock will be made at the offices
of Cowen & Company, New York, New York, on or about , 1996.

COWEN & COMPANY

OPPENHEIMER & CO., INC.

VOLPE, WELTY & COMPANY

, 1996
<PAGE>

Accessing Information and Connecting People Around the World

[Graphic: White Pine Software, Inc. pine tree logo]
White Pine
Keeping You Connected

Leveraging the power of the global Internet and corporate intranets, White
Pine's award-winning Enhanced CU-SeeMe brings people and information together.

[Graphic: Enhanced CU-SeeMe logo]

[Graphic: Computer monitor displaying Enhanced CU-SeeMe windows, including:
(i) three pictures of videoconferencing participants; (ii) the
WhitePineBoard, displaying the typewritten words "CU-SeeMe
WhitePineBoard"; (iii) the Participants window; and (iv) a control
panel.]

[Graphic: New Media Magazine's 1996 Hyper Award Byte Magazine's "Best of PC
Expo '96 Winner" The Boston Computer Society's 1995 "Best of Show
MacWorld Exposition" PC Computing four-star logo]

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

The Company intends to furnish its stockholders with annual reports
containing financial statements audited by its independent accountants and to
make available quarterly reports containing unaudited financial information
for the first three quarters of each year.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus.

THE COMPANY

White Pine develops, markets and supports multiplatform desktop connectivity
software that facilitates worldwide video and audio communication and data
collaboration across the Internet, intranets and other networks that use the
Internet Protocol ("IP"). The Company's desktop videoconferencing software
products, Enhanced CU-SeeMe and the White Pine Reflector, create a client-
server solution that allows users to participate in real-time, multipoint
videoconferences over the Internet and intranets. White Pine also offers its
eXodus line of desktop X Windows software, which enables seamless
interoperability between local and remote environments, and its 5PM line of
terminal emulation software, which provides desktop access to data and
applications residing on enterprise legacy systems.

Until the 1990s, videoconferencing generally required expensive hardware-
based systems that communicated through proprietary protocols. Even today, most
videoconferencing systems are proprietary hardware-based products priced
between $1,000 and $40,000. The relatively high price and limited
interoperability of these systems have impeded the widespread adoption of
videoconferencing as a means of communication. In 1992, researchers at Cornell
University developed CU-SeeMe, real-time desktop videoconferencing software
that enables users to communicate over the Internet with hardware as basic as
28.8 kbps modems and standard videocapture boards and video cameras. CU-SeeMe
is distributed as freeware over the Internet. As a result of recent
improvements in interoperability, bandwidth and other videoconferencing
technology, as well as the emergence of the Internet as a mass communication
medium, industry analysts have estimated that shipments of desktop
videoconferencing systems will grow from approximately 100,000 units in 1995 to
an estimated 20 million units in 2000.

In June 1995, the Company secured from Cornell Research Foundation, Inc. the
exclusive worldwide rights to license CU-SeeMe and its related software-only
multipoint conferencing server. In March 1996, the Company introduced Enhanced
CU-SeeMe, which provides real-time, one-way or two-way audio and video
communication and data collaboration over the Internet at a suggested retail
price of $99. Enhanced CU-SeeMe offers significant improvements in features and
functionality over freeware CU-SeeMe, including color video and data
collaboration through a white board, while maintaining operability over
bandwidths as low as 28.8 kbps. Enhanced CU-SeeMe is available on multiple
platforms and can be installed on most multimedia PCs without proprietary
hardware. In May 1996, the Company began shipping the White Pine Reflector, the
software-only server component of the Company's videoconferencing solution. The
White Pine Reflector enables real-time, multipoint desktop videoconferencing,
offers the ability to "cybercast" events to large audiences, and solves the
complex problem of enabling videoconferencing over the Internet between users
operating at different connection speeds. The White Pine Reflector is offered
at suggested retail prices beginning at $395. Enhanced CU-SeeMe and the White
Pine Reflector may be downloaded for evaluation, without any purchase
obligation, from the Company's World Wide Web ("Web") site. Enhanced CU-SeeMe
has been downloaded for evaluation approximately 450,000 times since March
1996, and the White Pine Reflector has been downloaded for evaluation more than
60,000 times since May 1996.

White Pine's objective is to be a supplier of leading-edge network
connectivity software solutions. The Company seeks to develop innovative,
lower-priced, software alternatives to hardware connectivity products and to
enhance its software solutions through additional functionality and features.
To achieve this objective, the Company intends to extend its position as a
leader in Internet-based videoconferencing by continuing to invest in research
and development, leveraging the name recognition and installed base of freeware
CU-SeeMe, and supporting emerging industry standards. The Company also intends
to establish and extend strategic and OEM relationships with multinational
firms that offer unique marketing or distribution opportunities or
technological

3
<PAGE>

capabilities for Enhanced CU-SeeMe and the White Pine Reflector. In order to
take advantage of industry trends, the Company intends to develop low-cost Web-
enabled versions of its X Windows and terminal emulation products.

The Company markets and sells its products through a combination of
distributors, OEMs and strategic partners, through its direct sales
organization and over the Internet. The Company's principal distributors
include, among others, Ingram Micro, Inc. and Tech Data Corporation in the
United States, Macnica, Inc. and dit Co., Ltd. in Japan, Hyundai Information
Technology Company Ltd. in Korea, E92 Plus Ltd. in the United Kingdom and TCI
in France. The Company's customers include businesses, government
organizations, educational institutions and individual consumers.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered hereby........ 3,000,000 shares
Common Stock to be outstanding af-
ter the offering.................. 9,027,870 shares(1)
Use of proceeds.................... For repayment of indebtedness, working
capital and other general corporate
purposes, including potential acquisitions
Proposed Nasdaq National Market
symbol............................ WPNE
</TABLE>
- --------

(1) Excludes, as of October 3, 1996, (i) 1,006,585 shares of Common Stock
issuable upon the exercise of options at a weighted average exercise price
of $1.80 per share, (ii) 471,750 shares of Common Stock reserved for future
option grants under the Company's stock option plan and (iii) 100,000
shares of Common Stock reserved for issuance under the Company's employee
stock purchase plan. See "Management--Benefit Plans" and Note 8 of Notes to
the Company's Consolidated Financial Statements.

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

Unless otherwise indicated, all information in this Prospectus (i) except in
the financial statements and notes thereto, reflects the conversion of all
outstanding shares of the Company's common stock, $5.83 par value ("$5.83
Stock"), into 394,511 shares of the Company's common stock, $.01 par value
("Common Stock"), and the issuance of 20,000 shares of Common Stock upon
exercise of a warrant held by Cornell Research Foundation, Inc. (the "Cornell
Warrant"), all upon the closing of this offering, (ii) gives effect to the
issuance of 209,050 shares of Common Stock issuable on or before December 15,
1996 upon the expiration of certain indemnification provisions entered into in
connection with the Company's acquisition of About Software Corporation S.A.,
(iii) gives effect to the filing of an Amended and Restated Certificate of
Incorporation (the "Restated Charter") and the adoption of Amended and Restated
By-Laws (the "Restated By-Laws") upon the closing of this offering and (iv)
assumes no exercise of the Underwriters' over-allotment option. See "Certain
Transactions," "Description of Capital Stock" and "Underwriting."

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

EXODUS, EXODUS EXPRESS, EXODUS NFS, TGRAF, WHITE PINE, 5PM TERM OFFICE, 5PM
PRO and 5PM TERM are trademarks of the Company. CU-SEEME is a registered
trademark of Cornell Research Foundation, Inc. All other trademarks or trade
names referred to in this Prospectus are the property of their respective
owners.

4
<PAGE>

SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

White Pine acquired all of the stock of About Software Corporation S.A.
("ASC") effective as of November 1, 1995. The following table sets forth
summary statement of operations data for (i) White Pine Software, Inc. (not
including ASC, "WPS") and ASC for the fiscal year ended December 31, 1995 on a
pro forma consolidated basis, adjusted to give effect to WPS's acquisition of
ASC as if such acquisition had occurred on January 1, 1995, (ii) WPS for the
six months ended June 30, 1995 and (iii) the Company (which includes the
consolidated operations of WPS and ASC) for the six months ended June 30, 1996.
The table also presents summary balance sheet data for the Company as of June
30, 1996 on an actual basis and as adjusted. These financial data have been
derived from unaudited financial statements and notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA
CONSOLIDATED
WPS & ASC WPS COMPANY
------------- ------------- -------------
FISCAL YEAR SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
DEC. 31, 1995 JUNE 30, 1995 JUNE 30, 1996
------------- ------------- -------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenue....................... $ 9,227 $3,425 $ 4,860
Income (loss) from operations....... (1,396) 166 (1,855)
Net income (loss)................... (1,171) 226 (1,888)
Net income (loss) per common and
common equivalent share............ $ .04 $ (.32)
Weighted average number of common
and common equivalent shares
outstanding........................ 6,118 5,901
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1996
---------------------
ACTUAL AS ADJUSTED(1)
------ --------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $2,031 $25,983
Working capital........................................... 1,125 25,205
Total assets.............................................. 7,010 30,962
Long-term debt, less current portion...................... 312 171
Total stockholders' equity................................ 3,168 27,388
</TABLE>
- --------
(1) Reflects the sale of the shares of Common Stock offered hereby at an
assumed initial public offering price of $9.00 per share, after deducting
the estimated underwriting discount and offering expenses, the application
of the net proceeds thereof and the exercise of the Cornell Warrant. See
"Use of Proceeds" and "Capitalization."

5
<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, prospective
investors should carefully consider the following risk factors in evaluating
an investment in the Company and its business before purchasing any shares of
Common Stock offered hereby.

RECENT OPERATING LOSSES

The Company incurred losses from operations of $3,646,000 in the fiscal year
ended December 31, 1995 (including a non-recurring write-off of purchased
research and development costs of $3,200,000) and $1,855,000 in the six months
ended June 30, 1996. At June 30, 1996, the Company had an accumulated deficit
of approximately $11,863,000. In the fiscal year ended December 31, 1995 and
the six months ended June 30, 1996, the Company made significant expenditures
for product development and sales and marketing in support of the product
launch of Enhanced CU-SeeMe, which became commercially available in March
1996. The Company expects that it will be required to continue to invest
heavily in product development and sales and marketing programs in order to be
competitive and capture market share, particularly in the videoconferencing
market. In addition, the Company has hired a significant number of employees
since January 1995 and expects to continue hiring additional sales, customer
service, management, software development and technical support employees
during the remainder of 1996 as the Company continues to develop and expand
its operations. This significant increase in its workforce may negatively
impact the Company's results of operations in the future, particularly if
sales of new products fall below expectations.

Sales to Ingram Micro, Inc. represented 21% and 16% of the Company's total
revenue in the fiscal years ended December 31, 1994 and 1995, respectively.
The loss of, or a significant curtailment of purchases by, Ingram Micro, Inc.,
including a loss or curtailment due to factors outside of the Company's
control, would have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Customers" and
Note 1 of Notes to the Company's Consolidated Financial Statements.

As a result of the foregoing factors, the Company may incur further losses
in the future. There can be no assurance that the Company will achieve
profitable operations in any future period. In addition, as a result of the
Company's acquisition of ASC on a purchase accounting basis in the fourth
quarter of fiscal 1995 and the Company's decision to shift its focus to the
development, marketing and support of videoconferencing software, the Company
believes that period-to-period comparisons of its financial results are not
necessarily meaningful and should not be relied upon as an indication of
future performance. See "--Transition of Product Focus; Dependence on New
Products," "The Company," "Selected Financial Data" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

DEVELOPING MARKET; UNPROVEN ACCEPTANCE OF THE COMPANY'S NEW PRODUCTS

The market for audio and video services and related software products for
the Internet and intranets, such as Enhanced CU-SeeMe and the White Pine
Reflector, has only recently begun to develop, is evolving rapidly and is
expected to be characterized by an increasing number of market entrants. The
Company's future success will depend in large part on the continued expansion
of the videoconferencing market in general and the adoption of the Internet as
a principal medium for commercial and consumer videoconferencing in
particular. As is typical in a new and rapidly evolving industry, demand for
and market acceptance of recently introduced products, such as Enhanced CU-
SeeMe and the White Pine Reflector, are subject to a high level of
uncertainty. Certain factors, including the present inability of subscribers
of certain widely used on-line Internet access providers to use Enhanced CU-
SeeMe over these providers' networks, the present inability to videoconference
with users of other vendors' videoconferencing systems, difficulties in
locating people on the Internet and uncertainty regarding vendors' willingness
to adopt industry standards, may limit demand for and market acceptance of
Enhanced CU-SeeMe and the White Pine Reflector. The continuation of such
uncertainty or of such limitations may have a material adverse effect on sales
of Enhanced CU-SeeMe and the White Pine Reflector and on the Company's
business, financial condition and results of operations. Also, enterprises
that have already invested substantial resources in other means of
communicating information may be reluctant or slow to adopt videoconferencing

6
<PAGE>

generally and Internet videoconferencing in particular. As a result of
networking latencies, data packet loss and significant variations in Internet
infrastructure and users' set-ups and configurations, the quality of audio
communications over the Internet is inferior to the quality of conventional
telephone conversations and the quality of video communications over the
Internet may vary from connection to connection and in certain instances may
be inferior to the quality of hardware-based videoconferencing systems. As a
result, there can be no assurance that videoconferencing communications over
the Internet and intranets will become widespread or that Enhanced CU-SeeMe or
the White Pine Reflector will become widely installed.

Moreover, the market for Internet services and software has developed only
recently. Commercial use of the Internet has been constrained by customer
demands for increased accessibility, reliability, speed, security and support,
and there can be no assurance that the infrastructure or complementary
products necessary for the Internet to become a viable medium of business
communications and activity in general, and as a medium of videoconferencing
communications in particular, will develop. In particular, there can be no
assurance that access to the Internet will continue to be available on a
widespread basis, that the Internet will not experience dramatic and
unforeseen technological difficulties, that the Internet will not be plagued
by computer viruses or other destructive technologies, that the introduction
of complementary products and technologies such as high speed modems and
security procedures for commercial transactions will not be delayed, that the
development and adoption of new standards and communications protocols will
not be delayed, that the current pricing structure for access to the Internet
will continue, or that growth in the number of users or the level of usage of
the Internet will not exceed the capacity of the Internet infrastructure to
serve all potential users. Moreover, critical issues concerning the commercial
use of, distribution of information on, and governmental regulation of the
Internet (including access, security, quality of services, price, ease of use,
property ownership, and liability and other legal issues) remain unresolved
and may affect both the growth of the Internet and the Company's business. As
the Internet and the related infrastructure continue to evolve, there can be
no assurance that the Internet will not develop in unforeseen directions that
will have a material adverse effect on the Company's business, financial
condition and results of operations. For example, because the performance of
the Company's products depends on, among other things, the availability of
adequate bandwidth on network connections, any significant reduction in the
rate of improvement of the available speed of network data transmission could
have a material adverse effect on the Company's business, financial condition
and results of operations.

If for any reason the market for Internet videoconferencing services fails
to grow, grows more slowly than anticipated or becomes saturated with
competitors' products, the Company's business, financial condition and results
of operations will be materially and adversely affected.

COMPETITION

7
<PAGE>

Corporation and Intel Corporation each recently announced plans to license
products competitive with Enhanced CU-SeeMe to manufacturers of personal
computers and modems for inclusion in prepackaged multimedia and other
systems. In July 1996, Intel Corporation also announced a cross-licensing
agreement with Microsoft Corporation to share implementations of certain
industry standards and application frameworks, which the Company expects will
enhance the competitiveness of the products offered by both companies. In
addition, because the barriers to entry in the software market are relatively
low and the potential market is large, the Company anticipates continued
growth in the industry and the entrance of new competitors in the future.
Enhanced CU-SeeMe and the White Pine Reflector also compete with
videoconferencing software that is available on the Internet and can be
downloaded by users for either no charge or extended evaluation. Cornell
Research Foundation, Inc. (the "Cornell Foundation") makes CU-SeeMe ("Freeware
CU-SeeMe") and a related server freely available over the Internet. See
"Business--Proprietary Rights."

In the market for X Windows products, the Company faces significant direct
competition from a number of PC X server software vendors, including
Hummingbird Communications Ltd., NetManage, Inc., Network Computing Devices,
Inc. and Walker Richer and Quinn Inc., as well as indirect competition from
manufacturers of dedicated X terminals. The Company's principal competitor in
this market is Hummingbird Communications Ltd., the largest supplier of X
server software products for the PC platform. To the extent that these and
other companies introduce new or enhanced PC X server software products, the
Company will face increased competition.

In the terminal emulation market, the Company currently competes with the
following categories of companies: (i) vendors of International Business
Machines Corporation host connectivity products, including Attachmate Corp.
and Wall Data Incorporated; (ii) vendors of TCP/IP terminal emulation
products, including FTP Software, Inc. and NetManage, Inc.; and (iii) vendors
of Digital Equipment Corporation and Hewlett-Packard Company host connectivity
products, including Walker Richer and Quinn Inc.

Many of the Company's current and potential competitors, including
Hummingbird Communications Ltd., Intel Corporation, Microsoft Corporation,
Netscape Communications Corporation and PictureTel Corporation, have
significantly longer operating histories and/or significantly greater
managerial, financial, marketing, technical and other competitive resources,
as well as greater name recognition, than the Company. As a result, the
Company's competitors may be able to adapt more quickly to new or emerging
technologies and changes in customer requirements and may be able to devote
greater resources to the promotion and sale of their products and services.
There can be no assurance that the Company will be able to compete
successfully with existing or new competitors. In addition, competition could
increase if new companies enter the market or if existing competitors expand
their service offerings. An increase in competition could result in material
price reductions or loss of market share by the Company and could have a
material adverse effect on the Company's business, financial condition and
results of operations.

To remain competitive, the Company will need to continue to invest in
research and development and sales and marketing. There can be no assurance
that the Company will have sufficient resources to make such investments or
that the Company will be able to make the technological advances necessary to
remain competitive. In addition, current and potential competitors have
established or may in the future establish collaborative relationships among
themselves or with third parties, including third parties with whom the
Company may have relationships, to increase the visibility and utility of
their products and services. Accordingly, it is possible that new competitors
or alliances may emerge and rapidly acquire significant market shares. Such an
eventuality could have a material adverse effect on the Company's business,
financial condition and results of operations.

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS

The Company has experienced fluctuations in its quarterly results of
operations and anticipates that such fluctuations will continue and could
increase. The Company's quarterly results of operations may vary significantly
depending on a number of factors, some of which are outside of the Company's
control. These factors include the timing of the introduction or acceptance of
new products offered by the Company or its

8
<PAGE>

competitors, changes in demand for Internet services, changes in the mix of
products provided by the Company, changes in pricing strategies by the Company
and its competitors, changes in the markets served by the Company, changes in
regulations affecting the industry, changes in the Company's operating
expenses, capital expenditures and other costs relating to the expansion of
operations, changes in its personnel and general economic conditions. In
addition, fluctuations in exchange rates may render the Company's products
less competitive relative to local product offerings or result in foreign
exchange losses. To date, the Company has not engaged in exchange rate hedging
activities to minimize the risks of such fluctuations. Although the Company
may seek to implement hedging techniques in the future with respect to its
foreign currency transactions, there can be no assurance that such hedging
techniques will be successful. Historically, the Company's revenue in the
third quarter of each calendar year has been adversely affected by seasonal
reductions in business activity in Europe and certain other parts of the world
during the summer months. There can be no assurance that the Company will be
able to achieve or maintain profitability in the future or that its levels of
profitability will not vary significantly among quarterly periods.
Fluctuations in results of operations may result in volatility in the price of
the Common Stock.

A significant portion of the Company's expenses are fixed and difficult to
reduce in the event that revenue does not meet the Company's expectations,
thus magnifying the adverse effect of any revenue shortfall. Furthermore,
announcements by the Company or its competitors of new products, services or
technologies could cause customers to defer or cancel purchases of the
Company's products. Any such deferral or cancellation could have a material
adverse effect on the Company's business, financial condition and results of
operations. Accordingly, revenue shortfalls can cause significant variations
in results of operations from quarter to quarter and could have a material
adverse effect on the Company's business, financial condition and results of
operations.

As a result of the foregoing factors, it is possible that in some future
quarter the Company's results of operations will be below prior results or the
expectations of public market analysts and investors. In such event, the price
of the Common Stock would likely be materially and adversely affected. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

ABILITY TO MANAGE CHANGE

The Company has recently experienced significant growth in the number of its
employees, the demands on its operating and financial systems, and the
geographic area of its operations. In particular, the Company acquired ASC, a
French corporation, and its California-based subsidiary in the fourth quarter
of 1995. This growth has resulted in new and increased responsibilities for
the Company's administrative, operational, development and financial
personnel. Additional expansion by the Company may further strain the
Company's management, financial and other resources. Certain executive
officers of the Company have joined the Company only recently, including Brian
L. Lichorowic, its Vice President of Marketing, who joined the Company in
August 1996; Richard M. Darer, its Chief Financial Officer and Vice President
of Administration, who joined the Company in May 1996; Killko A. Caballero,
its Senior Vice President of Research and Development and Chief Technology
Officer, who joined the Company in November 1995; and Jack A. Dutzy, its Vice
President of Sales, Americas, who joined the Company in October 1995. There
can be no assurance that the Company will be successful in hiring the
personnel necessary to manage its changing business. The Company's success
depends to a significant extent on the ability of its new executive officers
to operate effectively, both independently and as a group, and this ability
may be impeded by past and future geographic expansion of the Company
internationally and domestically. In addition, the Company relocated its
corporate headquarters to larger facilities in Nashua, New Hampshire in late
August 1996 to accommodate its expanded operations, and this relocation may
result in delays and interruptions as the Company seeks to build its marketing
infrastructure and relationships, to develop significant new versions of its
products and to consummate the offering made hereby. The Company also recently
moved the remainder of its servers offsite to a third party's facilities in
order to decrease the likelihood of system failures. There can be no assurance
that the Company's systems, procedures, controls and space will be adequate to
support expansion of the Company's operations. The Company's future results of
operations will depend on the ability of its officers and key employees to
manage changing business conditions and to continue to improve its operational
and financial control and reporting systems. Any failure of the Company's
management to manage change effectively could have a material adverse effect
on the Company's business, financial condition and results of operations. See
"Business--Employees," "--Facilities" and "Management."

9
<PAGE>

TRANSITION OF PRODUCT FOCUS; DEPENDENCE ON NEW PRODUCTS

Since its inception, the Company has derived a substantial majority of its
revenue from licenses of terminal emulation and X Windows software products.
These products are expected to continue to generate a significant but
declining portion of the Company's revenue for the foreseeable future. As a
result, any factor adversely affecting sales of these products, such as
shifting of management focus and Company resources, increased price
competition, the introduction of technologically superior products by
competitors or the release of competing products by companies with
significantly greater resources and name recognition, could have a material
adverse effect on the Company's business, financial condition and results of
operations.

In June 1995, the Company and the Cornell Foundation entered into an
Exclusive Software License Agreement (the "License Agreement") that granted to
the Company the exclusive worldwide right to develop, modify, market,
distribute and sublicense commercial versions of Freeware CU-SeeMe and its
related server. Since that time, the Company has significantly redirected its
efforts, and particularly its product development and marketing efforts, to
focus on its videoconferencing products. As of September 30, 1996, 31 of the
Company's 43 research and development employees were devoted to developing
Internet videoconferencing technologies. The Company began shipping Enhanced
CU-SeeMe and the White Pine Reflector in March 1996 and May 1996,
respectively, and therefore has not had the opportunity to determine the
extent to which these products will succeed in the marketplace. A number of
companies have introduced, or have announced plans to introduce,
videoconferencing software that will compete with Enhanced CU-SeeMe and the
White Pine Reflector, including software for use over the Internet. The
Company's future success will depend in significant part on its ability to
develop and introduce new products and to continue to improve the performance,
features and reliability of its products, including Enhanced CU-SeeMe and the
White Pine Reflector, in response to both competing product offerings and
evolving marketplace demands. There can be no assurance that the Company will
be successful in developing new products or that any new products will be
accepted in the marketplace. The Company's future success will also depend on
its ability to comply with developing industry standards for videoconferencing
over the Internet. The introduction of competing products that incorporate new
technology or the emergence of new industry standards may render the Company's
existing products obsolete and unmarketable. Any failure or inability of
Enhanced CU-SeeMe, the White Pine Reflector or other new products to perform
substantially as anticipated or to achieve market acceptance would have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Products" and "--Competition."

DEPENDENCE UPON LICENSE AGREEMENT; LIMITED PROPRIETARY PROTECTION

The Company's success is heavily dependent upon its proprietary technology.
The Company's videoconferencing products, Enhanced CU-SeeMe and the White Pine
Reflector, are commercial versions of Freeware CU-SeeMe and its related
server. The Company's ability to develop, modify, market, distribute and
sublicense Enhanced CU-SeeMe and the White Pine Reflector, as well as the
right to use the trademark "CU-SeeMe," derives entirely from the License
Agreement with the Cornell Foundation. In order to maintain the exclusivity
provisions of the License Agreement, the Company must meet certain staffing,
product introduction and sublicensing obligations. There can be no assurance
that the Company will meet these obligations. Any failure to meet such
obligations will permit the Cornell Foundation to grant licenses to other
companies, including competitors of the Company, to develop, sell and
sublicense commercial versions of Freeware CU-SeeMe and its related server. In
addition, the Company's right to issue sublicenses is contingent upon the
Company's continued marketing of commercial versions of Freeware CU-SeeMe and
its related server. Even if the Company fulfills such obligations, the License
Agreement has a fixed term ending December 1, 1998. Although the License
Agreement contains certain provisions for automatic annual renewal, the
License Agreement may be terminated by the Cornell Foundation for "cause."
Under the License Agreement, "cause" includes failure by the Company to pay
any amount due under the License Agreement, if not cured within 30 days of
written notice of such failure to pay, or any "material breach" of the License
Agreement by the Company, if not cured within 90 days of written notice of
such breach. "Material breach" includes failure to exercise due diligence to
develop, manufacture and market commercial versions of Freeware CU-SeeMe and
its related server, failure to grant sublicenses as required by the License
Agreement, failure to maintain quality control over the Company's commercial
versions of Freeware CU-SeeMe and its related server, and failure to

10
<PAGE>

develop and exploit the market to the extent necessary to meet the Company's
minimum royalty obligations under the License Agreement. Any termination of
the License Agreement would have a material adverse effect on the Company's
business, financial condition and results of operations. The License Agreement
requires that the Company pay royalties based on the Company's net revenue
from its commercial versions of Freeware CU-SeeMe and its related server
(subject to certain minimum per-copy royalties) and share sublicensing income
with the Cornell Foundation. The License Agreement also requires that the
Company make certain annual minimum royalty payments, including minimum
payments based on royalties from sublicensing. As of the date of this
Prospectus, the Company has not paid the minimum amount payable with respect
to sublicensing royalties for the period from June 1, 1995 through November
30, 1996; the failure to pay this minimum amount by November 30, 1996 would
constitute "cause" for termination of the License Agreement, as described
above. Moreover, Freeware CU-SeeMe and its related server are freely available
on the Internet. Such availability may adversely affect sales of licenses for
Enhanced CU-SeeMe and the White Pine Reflector. The Company also depends upon
the Cornell Foundation, as the owner of the trademark "CU-SeeMe," to protect
and enforce rights in the trademark. Any failure of the Cornell Foundation to
protect or enforce such rights could substantially impair the value of such
trademark and the Company's rights to use such trademark.

The Company currently has no patents and relies primarily on copyright,
trademark and trade secrets law, as well as employee and third-party non-
disclosure agreements, to protect its intellectual property. There can be no
assurance that the steps taken by the Company to protect its proprietary
rights will be adequate to prevent misappropriation of its technology or
independent development by others of similar technology. Certain of the
Company's products, including Enhanced CU-SeeMe and the White Pine Reflector,
are licensed to customers under "shrink wrap" licenses included as part of the
product packaging. Although in certain sales the Company's shrink wrap
licenses are accompanied by specifically negotiated agreements signed by the
licensee, in most cases its shrink wrap licenses are not negotiated with or
signed by individual licensees. Certain provisions of the Company's shrink
wrap licenses, including provisions limiting the Company's liability and
protecting against unauthorized use, copying, transfer and disclosure of the
licensed program, may be unenforceable under the laws of certain
jurisdictions. Also, the Company has delivered certain technical data and
information relating to Enhanced CU-SeeMe and the White Pine Reflector to the
United States government and, as a result, the United States government may
have unlimited rights to use such technical data and information or to
authorize others to use such technical data and information. There can be no
assurance that the United States government will not authorize others to use
such technical data and information for purposes competitive with those of the
Company. In addition, the laws of some foreign countries do not protect the
Company's proprietary rights to the same extent as do laws in the United
States. There can be no assurance that the protections afforded by the laws of
such countries will be adequate to protect the Company's proprietary rights,
the unenforceability of any of which could have a material adverse effect on
the Company's business, financial condition and results of operations.
Litigation may be necessary to enforce the Company's intellectual property
rights or to protect the Company's trade secrets. Any such litigation could
result in substantial costs and diversion of resources and could have a
material adverse effect on the Company's business, financial condition and
results of operations.

Although the Company believes that its products and technology do not
infringe the proprietary rights of others, there can be no assurance that
third parties will not assert infringement and other claims against the
Company or that such claims will not be successful. From time to time, the
Company has received and may receive in the future notice of claims of
infringement of other parties' proprietary rights. Many participants in the
software industry have an increasing number of patents and have frequently
demonstrated a readiness to commence litigation based on allegations of patent
or other intellectual property infringement. Third parties may assert
exclusive patent, trademark, copyright and other intellectual property rights
to technologies that are important to the Company. There can be no assurance
that infringement or invalidity claims (or claims for indemnification
resulting from infringement claims) will not be asserted or prosecuted against
the Company or that any such assertion or prosecution will not have a material
adverse effect on the Company's business, financial condition or results of
operations. Regardless of the validity or the successful assertion of any such
claims, the Company could incur significant costs and diversion of resources
in defending such claims, which could have a material adverse effect on the
Company's business, financial condition and results of operations.

11
<PAGE>

Furthermore, any party making such claims could secure a judgment awarding
substantial damages, as well as injunctive or other equitable relief, which
could effectively block the Company's ability to make, use, sell, distribute
or market its products and services in the United States or abroad. Any such
judgment could have a material adverse effect on the Company's business,
financial condition and results of operations. In circumstances where claims
relating to proprietary technology or information are asserted against the
Company, the Company may seek licenses to such intellectual property. There
can be no assurance, however, that such licenses would be available or, if
available, that such licenses could be obtained on terms that are commercially
reasonable and acceptable to the Company. The failure to obtain the necessary
licenses or other rights could preclude the sale, manufacture or distribution
of the Company's products and, therefore, could have a material adverse effect
on the Company's business, financial condition and results of operations. See
"Business--Proprietary Rights."

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

Revenue from international sales represented 11%, 20% and 30% of the
Company's total revenue in the fiscal years ended December 31, 1994 and 1995
and the six months ended June 30, 1996, respectively. The increased level of
international revenue in the six months ended June 30, 1996 reflected the
acquisition of ASC on a purchase accounting basis effective as of November 1,
1995. ASC generates a majority of its revenue from outside the United States.
As part of its business strategy, the Company intends to seek opportunities to
expand its product and service offerings into additional international
markets. The Company believes that expansion into new international markets is
critical to the Company's ability to continue to grow and to market its
products and services. In marketing its products and services internationally,
the Company will likely face new competitors. There can be no assurance that
the Company will be successful in developing localized versions of its
products for new international markets or in marketing or distributing
products and services in these markets or that its international revenue will
be adequate to offset the expense of establishing and maintaining
international operations. The Company's international business may be
adversely affected by changing economic conditions in foreign countries. The
majority of the Company's sales are currently denominated in U.S. dollars, but
there can be no assurance that a significantly higher level of future sales
will not be denominated in foreign currencies. To the extent the Company makes
sales denominated in currencies other than U.S. dollars, gains and losses on
the conversion of those sales to U.S. dollars may contribute to fluctuations
in the Company's business, financial condition and results of operations. In
addition, fluctuations in exchange rates could affect demand for the Company's
products and services. Conducting an international business inherently
involves a number of other difficulties and risks, such as export
restrictions, export controls relating to technology, compliance with existing
and changing regulatory requirements, tariffs and other trade barriers,
difficulties in staffing and managing international operations, longer payment
cycles, problems in collecting accounts receivable, software piracy, political
instability, seasonal reductions in business activity in Europe and certain
other parts of the world during the summer months, and potentially adverse tax
consequences. There can be no assurance that one or more of these factors will
not have a material adverse effect on any international operations established
by the Company and, consequently, on the Company's business, financial
condition and results of operations. See "Business--Strategy."

DEPENDENCE ON KEY PERSONNEL

The Company's success to date has depended to a significant extent on Howard
R. Berke, its Chairman, President and Chief Executive Officer, David O. Bundy,
its Vice President of Engineering, Killko A. Caballero, its Senior Vice
President of Research and Development and Chief Technology Officer, and a
number of other key management, engineering, research and development, sales
and operational personnel. The loss of the services of Mr. Berke, Mr. Bundy or
Mr. Caballero or any of the Company's other key personnel could have a
material adverse effect on the Company's business, financial condition and
results of operations. The Company believes that its future success will
depend in large part on its ability to attract and retain highly qualified
management, engineering, research and development, sales and operational
personnel. In particular, the Company will need to hire and train additional
software developers in order to support and increase its recent software
licensing activities. Competition for all of these personnel is intense and
there can be no assurance that the Company will be successful in attracting
and retaining key personnel. The failure of the Company to hire, train and
retain qualified personnel could have a material adverse effect upon the
Company's business, financial

12
<PAGE>

condition and results of operations. The Company does not maintain key person
life insurance policies on its key personnel, except for a policy with respect
to Mr. Berke in the amount of $1.0 million. See "Business--Employees" and
"Management."

RISKS ASSOCIATED WITH CREATING AND ACCESSING NEW DISTRIBUTION CHANNELS

The Company's primary strategy for marketing Enhanced CU-SeeMe and the White
Pine Reflector is to form channel relationships in key markets with major
distributors. The Company also intends to license Enhanced CU-SeeMe and the
White Pine Reflector to original equipment manufacturers ("OEMs"), value-added
resellers ("VARs") and additional distributors for bundling with their
products and services. The Company expects that its future success will depend
in large part upon these OEMs, VARs and distributors. The performance of these
OEMs, VARs and distributors will be outside the control of the Company, and
the Company is unable to predict the extent to which these organizations will
be successful in marketing and selling Enhanced CU-SeeMe or the White Pine
Reflector or products incorporating Enhanced CU-SeeMe or the White Pine
Reflector. The Company's failure to establish relationships with OEMs, VARs
and distributors could have a material adverse effect on the Company's
business, financial condition and results of operations. In addition, the
Company is currently seeking to establish distribution relationships with
retail channels, including store chains, superstores and catalog sales, for
Enhanced CU-SeeMe. The Company has no prior experience in selling software
through retail channels, and no assurance can be given that it will succeed in
establishing a retail network for Enhanced CU-SeeMe or that, if established,
such a network will not result in unexpected expenses for inventory, returned
software, distribution or otherwise. The Company's distributors typically
carry the products of competitors of the Company, many of whom have
substantially greater financial resources than the Company. The distributors
have limited capital to invest in inventory, and their decisions to purchase
the Company's products and, in the case of retail stores, to give them
critical shelf space, are partly a function of pricing, terms and special
promotions offered by the Company and its competitors, over which the Company
has no control and which it cannot predict. See "Business--Marketing and
Distribution."

The Company also distributes certain of its products electronically through
the Internet. By distributing its products through the Internet, the Company
may decrease demand for its products and increase the likelihood of
unauthorized copying and use of its software. The Company has allowed and
intends to continue to allow customers to download certain of its products for
a free evaluation period.

RISK OF PRODUCT DEFECTS

Software developed and incorporated by the Company may contain significant
undetected errors when first released or as new versions are released.
Although the Company tests its software before commercial release, there can
be no assurance that errors in the software will not be found after customers
begin to use the software. Enhanced CU-SeeMe 2.1 for Windows, the release of
which was announced on September 30, 1996, corrects a number of such errors in
Enhanced CU-SeeMe 2.0. The Company intends to ship Enhanced CU-SeeMe 3.0,
which the Company expects will support relevant Internet and International
Telecommunications Union standards and incorporate a number of new features,
in the first quarter of 1997. Any error in Enhanced CU-SeeMe 3.0, the White
Pine Reflector or the Company's other products may result in decreased revenue
or increased expenses because of adverse publicity, reduced orders, product
returns, uncollectible accounts receivable, delays in collecting accounts
receivable, and additional and unexpected costs of further product development
to correct the errors. Any of these results could have a material adverse
effect on the Company's business, financial condition and results of
operations.

The Company is a defendant in 13 lawsuits pending in New York federal and
state courts in which the plaintiffs claim to suffer from carpal tunnel
syndrome, or "repetitive stress injuries," as a result of having used computer
keyboards that are alleged to have been defectively designed by a predecessor
of the Company. None of these suits has reached trial and additional
information detrimental to the Company could be developed in the course of
discovery. Although the Company has established a reserve for these suits that
the Company believes is adequate, there can be no assurance that the Company's
liabilities under these suits will not substantially exceed that reserve. See
"Business--Legal Proceedings."

13
<PAGE>

DEPENDENCE ON THIRD-PARTY SOFTWARE

In addition to Freeware CU-SeeMe and its related server, the Company depends
upon certain other software that it licenses from third parties, including
voice compression technology from Voxware, Inc., global Internet conferencing
"white pages" software from Four11 Corporation, video
compression/decompression software ("codec") from Crystal Net Corporation and
whiteboard software from Group Technologies, Inc. d/b/a Group Logic, Inc. and
DataBeam Corporation. Certain of these licenses are for limited terms, have
certain minimum royalty obligations or may be terminated if the Company
breaches the terms of the license. There can be no assurance that these
suppliers will continue to license this software to the Company on
commercially reasonable terms. Most of the Company's third-party licenses are
non-exclusive and there can be no assurance that the Company's competitors
will not obtain licenses to and utilize such software in competition with the
Company. There can be no assurance that vendors of software utilized in the
Company's products will continue to provide, enhance or support such software
in the form utilized by the Company, nor can there be any assurance that the
Company will be able to modify its own software to adapt to any changes in
such software. In addition, there can be no assurance that financial or other
difficulties that may be experienced by such third-party suppliers will not
have a material adverse effect on the availability, quality or support of
software incorporated in the Company's products, or that, if such software
become unavailable, the Company would be able to find suitable alternatives on
a timely basis and on commercially reasonable terms. The loss of or inability
to maintain any of these licenses could result in the discontinuation of, or
delays or reductions in, product shipments unless and until equivalent
technology is identified, licensed and integrated with the Company's software,
and could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business--Proprietary Rights."

RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS

The Company may use a portion of the net proceeds of this offering to
acquire or invest in companies, technologies or products that complement the
Company's business or its product offerings. Any future acquisitions may
result in a potentially dilutive issuance of equity securities, the incurrence
of additional debt, the write-off of software development costs or the
amortization of expenses related to goodwill and other intangible assets, any
of which could have a material adverse effect on the Company's business,
financial condition and results of operations. Future acquisitions would
involve numerous additional risks, including difficulties in the assimilation
of the operations, services, products and personnel of any acquired company,
the diversion of management's attention from other business concerns, the
disruption of the Company's business, the entry into markets in which the
Company has little or no direct prior experience and the potential loss of key
employees of any acquired company. There can be no assurance that the Company
would be successful in overcoming these risks or any other problems
encountered in connection with any such acquisition. The Company is not
currently involved in negotiations with respect to, and has no agreement or
understanding regarding, any such acquisition or investment.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

At present, there are few laws or regulations that specifically address
access to or commerce on the Internet. The increasing popularity and use of
the Internet, however, enhance the risk that the governments of the United
States and other countries in which the Company sells or expects to sell its
products will seek to regulate videoconferencing and the Internet with respect
to, among other things, user privacy, pricing, and the characteristics and
quality of products and services. Any such regulation could have a material
adverse effect on the Company's business, financial condition and results of
operations. In addition, because the Internet has only recently come into
widespread use, it is not yet clear how existing laws governing issues such as
libel, privacy and the ownership of intellectual property will apply to
communications over the Internet. The Company is unable to predict the impact,
if any, that existing or future legislation, legal decisions or regulations
may have on its business, financial condition or results of operations. The
Telecommunications Act of 1996, which was enacted in February 1996, purports
to impose criminal liability on (i) any person that sends or displays in a
manner available to minors indecent or patently offensive material on an
interactive computer service such as the Internet and (ii) any entity that
knowingly permits facilities under its control to be used for such activities.
In

14
<PAGE>

June 1996, a special three-judge panel in federal district court found these
provisions unconstitutional and issued a preliminary injunction against their
enforcement. The U.S. Department of Justice has appealed this decision to the
U.S. Supreme Court. If these provisions are upheld or if similar provisions
are enacted in the future, they may inhibit the growth or use of the Internet
and chill the development of Internet content, thereby decreasing the demand
for the Company's Internet videoconferencing products or otherwise having a
material adverse effect on the Company's business, financial condition and
results of operations. In March 1996, the America's Carriers Telecommunication
Association ("ACTA"), a group of telecommunications common carriers, filed a
petition (the "ACTA Petition") with the Federal Communications Commission (the
"FCC"), arguing that providers (such as the Company) of computer software
products that enable voice transmission over the Internet (Internet
"telephone" services) are operating as common carriers without complying with
various regulatory requirements and without paying certain charges required by
law. The ACTA Petition argues that the FCC has the authority to regulate both
the Internet and the providers of Internet "telephone" services and requests
that the FCC declare its authority over interstate and international
telecommunications services using the Internet, initiate rulemaking
proceedings to consider rules governing the use of the Internet for the
provision of telecommunications services, and order providers of Internet
"telephone" software to immediately cease the sale of such software pending
such rulemaking. Certain parties have filed comments with the FCC regarding
the ACTA Petition. The Company is unable to predict the outcome of this
proceeding. Any action by the FCC to grant the relief sought by ACTA or
otherwise to regulate use of the Internet as a medium of communication,
including any action to permit local exchange carriers to impose additional
charges for connections used for Internet access, could have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Business--Government Regulation."

FUTURE CAPITAL REQUIREMENTS

Expansion of the Company's business will require significant additional
expenditures for research and development, sales and marketing, capital
equipment and working capital. The Company expects that the net proceeds of
this offering and its current cash balances will be sufficient to fund its
operations for at least the next twelve months. The Company's capital
requirements will depend on many factors, including the progress of its
research and development efforts, the receipt of software license fees and
other product revenue, and the demand for the Company's products. The
Company's existing bank line of credit will expire on January 1, 1997. There
can be no assurance that the Company will not need to raise additional funds
through public or private financings or that, if needed, such funds will be
available on acceptable terms. The inability of the Company to raise needed
funds 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--Liquidity and
Capital Resources."

ABSENCE OF PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that an active trading market will
develop or be sustained after the offering. The initial public offering price
of the Common Stock will be determined through negotiations between the
Company and the Representatives of the Underwriters and may not be indicative
of the market price of the Common Stock after the offering. For a description
of the factors to be considered in determining the initial public offering
price, see "Underwriting." Factors such as quarterly variations in the
Company's results of operations, announcements of technological innovations or
new products by the Company, its competitors and others, market conditions in
the industry and changes in financial estimates by public market analysts may
cause the market price of the Common Stock to fluctuate significantly. In
addition, the stock market in general has recently experienced substantial
price and volume fluctuations, which have affected the market prices of many
high technology companies, particularly Internet-related companies, and which
have often been unrelated to the operating performance of such companies.
These broad market fluctuations may materially and adversely affect the market
price of the Common Stock. Following periods of volatility in the market price
of a company's securities, securities class action litigation has often been
instituted against such a company. Any such litigation against the Company
could result

15
<PAGE>

in substantial costs and diversion of management's attention and other
resources, which could have a material adverse effect on the Company's
business, financial condition and results of operations.

SUBSTANTIAL INFLUENCE OF EXISTING STOCKHOLDERS

After the sale of the shares of Common Stock offered hereby, the Company's
executive officers, directors and five percent stockholders will beneficially
own an aggregate of approximately 48% of the outstanding shares of Common
Stock (approximately 46% if the Underwriters' over-allotment option is
exercised in full). As a result, these stockholders, if acting together, would
effectively be able to control most matters requiring the approval of
stockholders of the Company, including the election of directors or the
approval of significant corporate matters. This concentration of ownership by
existing stockholders may also have the effect of delaying or preventing a
change in control of the Company. See "Principal Stockholders."

SHARES ELIGIBLE FOR FUTURE SALE; POSSIBLE ADVERSE EFFECT ON MARKET PRICE

Sales of substantial numbers of shares of Common Stock in the public market
following this offering could adversely affect the market price of the Common
Stock and could impair the Company's ability to raise capital through sales of
its equity securities. Upon completion of this offering, there will be
9,027,870 shares of Common Stock outstanding (assuming no exercise of options
outstanding after October 1, 1996), of which the 3,000,000 shares of Common
Stock sold in this offering (plus an additional 450,000 shares which will be
outstanding if the Underwriters' over-allotment option is exercised in full)
will be freely tradeable in the United States without restriction under the
Securities Act of 1933, as amended (the "Securities Act"), by persons other
than "affiliates" of the Company, as defined under the Securities Act. The
remaining 6,027,870 shares of Common Stock outstanding are "restricted
securities" as defined in Rule 144 under the Securities Act (the "Restricted
Shares"). Of the Restricted Shares, 5,946,321 shares are subject to lock-up
agreements, pursuant to which the holders of such shares have severally agreed
that, without the prior written consent of Cowen & Company, they will not
offer, sell, assign, transfer, encumber, contract to sell, grant an option,
right or warrant to purchase or otherwise dispose of any shares of Common
Stock or any securities convertible into, derivative of or exercisable or
exchangeable for Common Stock for 180 days commencing on the date of this
Prospectus, except for shares of Common Stock purchased in this offering or in
the public market pursuant to brokers' transactions. Cowen & Company may, in
its sole discretion and at any time without notice, release all or a portion
of the shares from the restrictions imposed by such agreements. Of the
Restricted Shares not subject to such lock-up agreements, 40,824 shares will
be eligible for immediate sale in the public market on the effective date of
the registration statement of which this Prospectus forms a part (the
"Effective Date") pursuant to Rule 144(k) under the Securities Act and an
additional 417 shares will first become eligible for sale in the public market
90 days after the Effective Date pursuant to Rule 144, subject in certain
cases to the volume limitations and other conditions imposed by Rule 144. Upon
the expiration of the lock-up agreements 180 days after the date of this
Prospectus, an additional 3,543,100 Restricted Shares will be eligible for
sale in the public market pursuant to Rule 144. The Securities and Exchange
Commission (the "Commission") has proposed certain amendments to Rule 144 that
would reduce by one year the holding periods required for shares to become
eligible for sale in the public market pursuant to Rule 144. Based on
securities outstanding as of October 1, 1996, it is expected that after the
closing of this offering the holders of 5,844,974 shares of Common Stock (plus
294,044 shares of Common Stock issuable upon exercise of outstanding options)
will have the right to cause the Company to register the sale of such shares
under the Securities Act. See "Description of Capital Stock--Registration
Rights." In addition, the Company intends to file one or more registration
statements on Form S-8 with respect to 1,615,207 shares of Common Stock issued
or issuable under its stock option plans, its employee stock purchase plan or
other outstanding options. Shares covered by any such registration statement
will be eligible for sale in the public market upon the effectiveness of such
registration statement. See "Management--Benefit Plans" and "Shares Eligible
for Future Sale."

MANAGEMENT'S DISCRETION AS TO USE OF UNALLOCATED NET PROCEEDS

The principal purposes of this offering are to increase the Company's equity
capital, to create a public market for the Common Stock and to facilitate
future access by the Company to public equity markets. As of the

16
<PAGE>

date of this Prospectus, the Company has no specific plans for the use of a
substantial portion of the net proceeds of this offering. The Company expects
to use such proceeds to repay approximately $274,000 of indebtedness and to
use the remaining approximately $23,886,000 of such proceeds (assuming an
initial public offering price of $9.00 per share) for general corporate
purposes, including working capital. Consequently, the Board of Directors and
management of the Company will have significant flexibility in applying the
net proceeds of this offering. See "Use of Proceeds."

ANTI-TAKEOVER EFFECT OF CHARTER PROVISIONS, BY-LAWS AND DELAWARE LAW

The Restated Charter and the Restated By-Laws contain provisions that could
discourage takeover attempts or make more difficult the acquisition of a
substantial block of the Common Stock. The Restated Charter provides that
stockholders may act only at meetings of stockholders and not by written
consent in lieu of a stockholders' meeting. The Restated By-Laws provide that
special meetings of the Company's stockholders may be called by the President
and must be called by the President or the Secretary at the written request of
a majority of the directors. The Restated By-Laws provide that nominations for
directors may not be made by a stockholder at any annual or special meeting
thereof unless the stockholder intending to make a nomination notifies the
Company of its intentions a specified number of days in advance of the meeting
and furnishes to the Company certain information regarding itself and the
intended nominee. The Restated By-Laws also require a stockholder to provide
to the Secretary of the Company advance notice of business to be brought by
such stockholder before any annual or special meeting of stockholders as well
as certain information regarding such stockholder and others known to support
such proposal and any material interest they may have in the proposed
business. These provisions could delay any stockholder actions that are
favored by the holders of a majority of the outstanding stock of the Company
until the next stockholders' meeting. These provisions may also discourage
another person or entity from making a tender offer for the Common Stock,
because such person or entity, even if it acquired a majority of the
outstanding stock of the Company, could only take action at a duly called
stockholders' meeting and not by written consent. In addition, the Board of
Directors is authorized to issue shares of Common Stock and Preferred Stock
which, if issued, could dilute and adversely affect various rights of the
holders of Common Stock and, in addition, could be used to discourage an
unsolicited attempt to acquire control of the Company.

Following this offering, the Company will become subject to the anti-
takeover provisions of Section 203 of the Delaware General Corporation Law,
which will 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 becomes an interested stockholder, unless the
business combination is approved in a prescribed manner. The application of
Section 203 may limit the ability of stockholders to approve a transaction
that they may deem to be in their best interests. The foregoing and other
provisions of the Restated Charter and the Restated By-Laws and the
application of Section 203 of the Delaware General Corporation Law could deter
certain takeovers or tender offers or could delay or prevent certain changes
in control or management of the Company, including transactions in which
stockholders might otherwise receive a premium for their shares over then
current market prices. See "Description of Capital Stock."

ABSENCE OF DIVIDENDS

The Company has never declared or paid any cash dividends on its capital
stock and does not currently expect to pay any cash dividends in the
foreseeable future. In addition, the terms of the Company's existing bank line
of credit and term loan prohibit the Company from declaring or paying cash
dividends on the Common Stock. See "Dividend Policy."

IMMEDIATE AND SUBSTANTIAL DILUTION

Purchasers in the offering will experience immediate and substantial
dilution in the pro forma net tangible book value per share of the Common
Stock from the initial public offering price, in the amount of $6.81 per share
(assuming an initial public offering price of $10.00 per share, which
represents the highest price in the range of initial public offering prices
set forth on the front cover of this Prospectus). Additional dilution will
occur upon the exercise of outstanding stock options. See "Dilution" and
"Management--Benefit Plans."

17
<PAGE>

THE COMPANY

The Company was incorporated under the laws of Delaware in April 1992 under
the name Visual International, Inc. Visual International, Inc. served as a
holding company and held substantially all of the stock of Visual T.I., Inc.,
which developed, manufactured and marketed video terminals, including early X
Windows terminals, and related hardware and software.

In August 1993, Visual T.I., Inc. was merged into Visual International, Inc.
and, immediately thereafter, Visual International, Inc. acquired all of the
outstanding stock of White Pine Software, Inc., a New Hampshire corporation.
At the time of the acquisition, White Pine Software, Inc. developed,
manufactured and marketed X Windows and terminal emulation software products
for the Macintosh platform. In December 1993, White Pine Software, Inc. was
merged into Visual International, Inc. Visual International, Inc., as the
surviving corporation, changed its name to White Pine Software, Inc. as a part
of its plan to focus on software connectivity.

In April 1994, the Company extended its product lines by merging Grafpoint,
a California corporation, into the Company. Through this transaction, the
Company acquired Grafpoint's X Windows and terminal emulation software for
PCs. The Grafpoint transaction also provided the Company with an operating
office in California. Howard R. Berke, the Company's Chairman, President and
Chief Executive Officer, and Carl A. Koppel, the Vice President of Sales,
International, served as officers of Grafpoint prior to joining the Company.

Effective as of November 1, 1995, the Company acquired all of the
outstanding stock of ASC, a French corporation, and its wholly owned
subsidiary, About Software Corporation, a California corporation. ASC
developed the Company's 5PM line of terminal emulators, which are text-based
host connectivity software products that complement the graphical windowing
capabilities of the Company's other legacy connectivity products. This
acquisition also provided the Company with an office in LaGaude, France that
currently serves as the Company's European headquarters for sales, research
and development, and technical support. Killko A. Caballero, the Company's
Senior Vice President of Research and Development and Chief Technology
Officer, served as an officer of ASC prior to joining the Company.

In June 1995, the Company and the Cornell Foundation entered into the
License Agreement, which granted the Company the exclusive worldwide right to
develop, modify, market, distribute and sublicense a commercial version of
Freeware CU-SeeMe and its related software-only multipoint conferencing
server. The License Agreement provides for royalty payments, including annual
minimum payments, by the Company to the Cornell Foundation based on the
Company's net revenue from Enhanced CU-SeeMe and the White Pine Reflector. The
Company began shipping Enhanced CU-SeeMe and the White Pine Reflector in March
1996 and May 1996, respectively.

References in this Prospectus to the "Company" and "White Pine" refer to
White Pine Software, Inc. and its subsidiaries. The Company's principal
executive offices are located at 542 Amherst Street, Nashua, New Hampshire
03063, its telephone number is (603) 886-9050 and its e-mail address is
[email protected].

18
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company of the sale of the shares of Common Stock
offered hereby at an assumed initial public offering price of $9.00 per share
are estimated to be $24,160,000 ($27,926,500 if the Underwriters' over-
allotment option is exercised in full), after deducting the estimated
underwriting discount and offering expenses. The Company also expects to
receive $60,000 on or before the closing of this offering from the exercise of
the Cornell Warrant, which will expire upon the closing of this offering. See
"Business--Proprietary Rights." The principal purposes of this offering are to
increase the Company's equity capital, to create a public market for the
Common Stock and to facilitate future access by the Company to the public
equity markets.

The Company intends to use a portion of the net proceeds of this offering to
repay all of the indebtedness outstanding at the time this offering is
completed under certain French franc-denominated loans from Credit Agricole
Mutual, Alpes-Maritimes Regional Division. At June 30, 1996, FF340,486,
FF71,974 and FF972,309 (approximately $67,423, $14,252 and $192,536, based
upon foreign currency exchange rates as of August 28, 1996) were outstanding
under loans bearing interest at different variable rates (11.55%, 8.75% and
7.25%, respectively, at August 28, 1996). The loans mature on different dates
between March 1998 and October 1998.

The Company intends to use the remainder of the net proceeds of this
offering for working capital and other general corporate purposes. The Company
may use a portion of these net proceeds to acquire or invest in companies,
technologies or products that complement the Company's business or its product
offerings. While the Company from time to time may evaluate potential
acquisitions or investments, the Company is not currently involved in
negotiations with respect to, and has no agreement or understanding regarding,
any such acquisition or investment. Pending such uses, the Company intends to
invest the net proceeds in short-term, investment-grade, interest-bearing
securities. See "Risk Factors--Management's Discretion as to Use of
Unallocated Net Proceeds."

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its capital
stock. The Company currently anticipates that it will retain future earnings,
if any, to fund the development and growth of its business and therefore does
not expect to pay any cash dividends in the foreseeable future. Payment of
future dividends, if any, will be at the discretion of the Company's Board of
Directors after taking into account various factors, including the Company's
financial condition, results of operations, current and anticipated cash
needs, and plans for expansion. The terms of the Company's existing bank line
of credit and term loan prohibit the Company from declaring or paying cash
dividends on Common Stock. See "Management's Discussion and Analysis of
Financial Condition and Results of Operation--Liquidity and Capital
Resources."

19
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of June
30, 1996 (i) on an actual basis and (ii) as adjusted to reflect the issuance
and sale of the shares of Common Stock offered hereby (at an assumed initial
public offering price of $9.00 per share, after deducting the estimated
underwriting discount and offering expenses), the application of the net
proceeds thereof, the conversion of all outstanding shares of $5.83 Stock, the
exercise of the Cornell Warrant to acquire 20,000 shares of Common Stock and
the filing of the Restated Charter. The following table should be read in
conjunction with the financial statements and notes thereto included elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1996
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt, less current portion..................... $ 312 $ 171
-------- --------
Stockholders' equity:
Preferred stock, $.01 par value; no shares authorized,
issued or outstanding, actual; 5,000,000 shares
authorized, no shares issued or outstanding, as
adjusted.............................................. -- --
Common stock, $.01 par value; 7,500,000 shares
authorized and 5,591,810 shares issued and
outstanding, actual; 30,000,000 shares authorized and
9,006,321 shares issued and outstanding, as
adjusted(1)........................................... 56 90
Common stock (redeemable), $5.83 par value; 500,000
shares authorized and 394,511 shares issued and
outstanding, actual; no shares authorized, issued or
outstanding, as adjusted.............................. 2,300 --
Additional paid-in capital............................. 12,577 39,063
Accumulated deficit.................................... (11,863) (11,863)
Currency translation adjustments....................... 98 98
-------- --------
Total stockholders' equity........................... 3,168 27,388
-------- --------
Total capitalization............................... $ 3,480 $ 27,559
======== ========
</TABLE>
- --------

(1) Excludes, as of June 30, 1996, 949,884 shares of Common Stock issuable
upon the exercise of options at a weighted average exercise price of
$1.36. Between June 30, 1996 and October 3, 1996, the Company
(i) rescinded the authority to grant additional options under the stock
option plans in effect before July 18, 1996, (ii) adopted a successor
incentive stock option plan to replace such stock option plans, (iii)
reserved 550,000 shares of Common Stock for issuance pursuant to the newly
adopted plan, (iv) granted options to purchase 78,250 shares of Common
Stock, (v) issued 21,549 shares of Common Stock upon the exercise of
options and (vi) adopted an employee stock purchase plan and reserved
100,000 shares of Common Stock for issuance pursuant to such plan. See
"Management--Benefit Plans."

20
<PAGE>

DILUTION

The pro forma net tangible book value of the Company as of June 30, 1996 was
$1,772,868, or $.30 per share of Common Stock. Pro forma net tangible book
value per share represents the amount of the Company's tangible assets less
total liabilities, divided by the number of shares of Common Stock
outstanding, after giving effect to the conversion of the outstanding shares
of $5.83 Stock and the exercise of the Cornell Warrant upon the closing of
this offering. After giving effect to the sale of the shares of Common Stock
offered hereby at an assumed initial public offering price of $10.00 per share
(which represents the highest price in the range of initial public offering
prices set forth on the front cover of this Prospectus), after deducting the
estimated underwriting discount and offering expenses, and the application of
the net proceeds thereof, the Company's pro forma net tangible book value as
of June 30, 1996 would have been $28,722,868 or $3.19 per share. This
represents an immediate increase in pro forma net tangible book value of $2.89
per share to existing stockholders and an immediate dilution of $6.81 per
share to investors purchasing shares of Common Stock in this offering. The
following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.................. $10.00
Pro forma net tangible book value per share at June 30, 1996... $ .30
Increase per share attributable to new investors............... 2.89
-----
Pro forma net tangible book value per share after offering....... 3.19
------
Pro forma net tangible book value dilution per share to new
investors....................................................... $ 6.81
======
</TABLE>

The following table summarizes, on a pro forma basis as of June 30, 1996,
the number of shares of Common Stock purchased from the Company (after giving
effect to the conversion of the outstanding shares of $5.83 Stock and the
exercise of the Cornell Warrant upon the closing of this offering), the total
consideration paid, and the average price per share paid by existing
stockholders and to be paid by the new investors, at an assumed initial public
offering price of $10.00 per share, before deducting the estimated
underwriting discount and offering expenses:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------- ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders....... 6,006,321 66.7% $14,992,589 33.3% $ 2.50
New investors............... 3,000,000 33.3 30,000,000 66.7 $10.00
--------- ----- ----------- -----
Total..................... 9,006,321 100.0% $44,992,589 100.0%
========= ===== =========== =====
</TABLE>

The foregoing table assumes no exercise of options outstanding after June
30, 1996. To the extent that such options were exercised after such date or
are exercised in the future, there has been or will be further dilution to new
investors. See "Risk Factors--Immediate and Substantial Dilution" and
"Management--Benefit Plans."

21
<PAGE>

SELECTED FINANCIAL DATA

The following financial data of White Pine Software, Inc. (not including
About Software Corporation S.A., "WPS") for the fiscal year (nine months)
ended December 31, 1994 and the fiscal year ended December 31, 1995, and as of
December 31, 1995, and of About Software Corporation S.A. ("ASC") for the nine
months ended December 31, 1994 and the ten months ended October 31, 1995 have
been derived from their respective audited financial statements included
elsewhere in this Prospectus, which have been audited by Ernst & Young,
independent auditors. The following table also sets forth the unaudited pro
forma consolidated statement of operations data reflecting WPS's acquisition
of ASC effective as of November 1, 1995, as if such acquisition had occurred
on January 1, 1995. The following financial data for the six months ended June
30, 1995 and 1996, and as of June 30, 1996, have been derived from unaudited
financial statements included elsewhere herein. In the opinion of management,
the unaudited interim financial data presented reflect all adjustments,
consisting only of normal, recurring adjustments, necessary for a fair
presentation of the financial data for each such period. Results of operations
for the six months ended June 30, 1996 are not necessarily indicative of the
results that may be expected for any other interim period or for the fiscal
year ending December 31, 1996. These financial data should be read in
conjunction with the financial statements and notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL CONSOLIDATED HISTORICAL
---------------------------------------------------------------- ---------------- ---------------------------
WPS ASC WPS & ASC WPS COMPANY
------------------------------ --------------------------------- ---------------- ------------- -------------
FISCAL YEAR
(NINE MONTHS) FISCAL YEAR NINE MONTHS TEN MONTHS FISCAL YEAR SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, 1994(1) DEC. 31, 1995 DEC. 31, 1994(1) OCT. 31, 1995(2) DEC. 31, 1995(3) JUNE 30, 1995 JUNE 30, 1996
---------------- ------------- ---------------- ---------------- ---------------- ------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Software license
fees........... $4,365 $ 6,018 $2,914 $ 4,304
Services and
other.......... 600 1,166 511 556
------ ------- ------ -------
Total revenue... 4,965 7,184 $1,331 $2,043 $ 9,227 3,425 4,860
Cost of revenue.. 655 1,247 150 226 1,473 415 921
------ ------- ------ ------ ------- ------ -------
Gross profit..... 4,310 5,937 1,181 1,817 7,754 3,010 3,939
------ ------- ------ ------ ------- ------ -------
Operating
expenses:
Sales and
marketing...... 1,637 2,517 592 688 3,204 1,173 2,810
Research and
development.... 1,301 1,866 684 780 2,726 920 1,701
General and
administrative
............... 1,106 2,000 552 1,020 3,220 751 1,283
Write-off of
purchased
research
and development
costs.......... -- 3,200 -- -- -- -- --
------ ------- ------ ------ ------- ------ -------
Total operating
expenses....... 4,044 9,583 1,828 2,488 9,150 2,844 5,794
------ ------- ------ ------ ------- ------ -------
Income (loss)
from
operations...... 266 (3,646) (647) (671) (1,396) 166 (1,855)
------ ------- ------ ------ ------- ------ -------
Other income
(expense):
Interest
income......... 66 82 (49) (52) 30 45 43
Other, net...... 80 68 71 157 225 27 (20)
------ ------- ------ ------ ------- ------ -------
146 150 22 105 255 72 23
------ ------- ------ ------ ------- ------ -------
Income (loss)
before provision
for income
taxes........... 412 (3,496) (625) (566) (1,141) 238 (1,832)
Provision for
income taxes.... 18 30 -- -- 30 12 56
------ ------- ------ ------ ------- ------ -------
Net income
(loss).......... $ 394 $(3,526) $ (625) $ (566) $(1,171) $ 226 $ 1,888
====== ======= ====== ====== ======= ====== =======
Net income (loss)
per common and
common
equivalent
share........... $ .06 $ (.65) $ .04 $ (.32)
====== ======= ====== =======
Weighted average
number of common
and common
equivalent
shares
outstanding..... 6,085 5,451 6,118 5,901
====== ======= ====== =======
</TABLE>

<TABLE>
<CAPTION>
COMPANY
---------------------------
DEC. 31, 1995 JUNE 30, 1996
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........................... $1,774 $2,031
Working capital..................................... 782 1,125
Total assets........................................ 6,437 7,010
Long-term debt, less current portion................ 385 312
Total stockholders' equity(4)....................... 2,780 3,168
</TABLE>
- -------
(1) Effective as of April 1, 1994, WPS changed its fiscal year end from March
31 to December 31. Financial data for ASC are presented on a comparable
basis.
(2) ASC was acquired by WPS effective as of November 1, 1995.
(3) See Unaudited Pro Forma Consolidated Statement of Operations and Notes
thereto.
(4) The Company has never declared or paid cash dividends on its capital
stock.

22
<PAGE>

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

OVERVIEW

In April 1994, the Company extended its product lines by merging Grafpoint,
a California corporation, into the Company. Through this transaction, the
Company acquired Grafpoint's X Windows and terminal emulation software for
PCs. The Grafpoint transaction also provided the Company with an operating
office on the west coast of the United States. In addition, Howard R. Berke,
the Company's Chairman, President and Chief Executive Officer, and Carl A.
Koppel, the Company's Vice President of Sales, International, served as
officers of Grafpoint prior to joining the Company.

The Company acquired ASC as a subsidiary effective as of November 1, 1995.
ASC developed the Company's 5PM line of terminal emulators, which are text-
based connectivity products that complement the graphical windowing
capabilities of the Company's other products. This acquisition also provided
the Company with a European headquarters in LaGaude, France for sales,
research and development, and technical support. In addition, Killko A.
Caballero, the Company's Senior Vice President of Research and Development and
Chief Technology Officer, served as an officer of ASC prior to joining the
Company.

In June 1995, as a part of its continuing plan to focus on software
connectivity products, the Company entered into the License Agreement with the
Cornell Foundation, which granted to the Company the exclusive worldwide right
to develop, modify, market, distribute and sublicense commercial versions of
Freeware CU-SeeMe and its related software-only multipoint conferencing
server. The Company commenced shipments of the initial commercial versions of
Enhanced CU-SeeMe and the White Pine Reflector in March 1996 and May 1996,
respectively. The Company anticipates that its revenue growth, if any, will
depend on increased sales of Enhanced CU-SeeMe and the White Pine Reflector
and on sales of new software connectivity products for the Internet and
intranets. Accordingly, the Company intends to devote a substantial portion of
its research and development and sales and marketing resources to technologies
related to the Internet and intranets.

The Company's revenue is derived from software license fees and fees for
services related to its software products, primarily software maintenance
fees. The Company recognizes revenue in accordance with the American Institute
of Certified Public Accountants Statement of Position No. 91-1, "Software
Revenue Recognition." Software license revenue is recognized upon execution of
a contract or purchase order and shipment of the software, net of allowances
for estimated future returns, provided that no significant obligations on the
part of the Company remain outstanding and collection of the related
receivable is deemed probable by management. An allowance for product returns
is recorded by the Company at the time of sale and is measured periodically to
adjust to changing circumstances, including increases in retail sales.
Software maintenance fees, which are generally payable in advance and are non-
refundable, are recognized ratably over the period of the maintenance
contract, typically twelve months. Revenue from training and consulting
services is recognized as services are provided. Software license fees,
consulting fees and training fees that have been prepaid or invoiced but that
do not yet qualify for recognition as revenue under the Company's policy, and
prepaid maintenance fees not yet recognized as revenue, are reflected as
deferred revenue.

Research and development expenses are charged to income as incurred. In
accordance with Statement of Financial Accounting Standards ("SFAS") No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
Marketed," the Company capitalizes software development costs once the
technological feasibility of a product has been established, which the Company
considers to occur when a commercially viable working model of a product has
been produced and tested. As of December 31, 1995, the Company had capitalized
$250,000 of software development costs in accordance with SFAS No. 86, which
is principally

23
<PAGE>

attributable to the Company's acquisition of ASC. The total amount of
capitalized software development costs is included in other assets.

Effective April 1, 1994, the Company changed its fiscal year end from March
31 to December 31.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, line items from
the Company's statement of operations as a percentage of total revenue.

<TABLE>
<CAPTION>
FISCAL YEAR SIX MONTHS
(NINE MONTHS) FISCAL YEAR ENDED JUNE 30,
ENDED ENDED -----------------
DEC. 31, 1994 DEC. 31, 1995 1995 1996
------------- ------------- ------- -------
<S> <C> <C> <C> <C>
Revenue:
Software license fees......... 87.9 % 83.8 % 85.1 % 88.6 %
Services and other............ 12.1 16.2 14.9 11.4
----- ----- ------- -------
Total revenue................ 100.0 100.0 100.0 100.0
Cost of revenue................ 13.2 17.4 12.1 19.0
----- ----- ------- -------
Gross profit................... 86.8 82.6 87.9 81.0
----- ----- ------- -------
Operating expenses:
Sales and marketing........... 32.9 35.0 34.2 57.8
Research and development...... 26.2 26.0 26.9 35.0
General and administrative.... 22.3 27.8 21.9 26.4
Write-off of purchased
research and development
costs........................ -- 44.5 -- --
----- ----- ------- -------
Total operating expenses..... 81.4 133.3 83.0 119.2
----- ----- ------- -------
Income (loss) from operations.. 5.4 (50.7) 4.9 (38.2)
Interest income and other,
net........................... 2.9 2.0 2.1 0.5
Provision for income taxes..... (0.4) (0.4) (0.4) 1.1
----- ----- ------- -------
Net income (loss).............. 7.9 % (49.1)% 6.6 % (38.8)%
===== ===== ======= =======
</TABLE>

SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995

The Company acquired ASC effective as of November 1, 1995 and accounted for
the acquisition as a purchase transaction. As a result, comparisons of the
Company's results of operations for the six months ended June 30, 1995 and
1996 are not necessarily meaningful.

Revenue

Total revenue increased by 42% to $4,860,000 in the six months ended June
30, 1996 from $3,425,000 in the six months ended June 30, 1995. This increase
resulted primarily from the acquisition of ASC effective as of November 1,
1995 and to a lesser extent from the introduction of Enhanced CU-SeeMe in
March 1996. The increase was offset in part by a decrease in revenue from the
Company's eXodus products.

Revenue from sales outside the United States comprised 30% and 18% of total
revenue for the six months ended June 30, 1996 and 1995, respectively. This
increase was directly related to the acquisition of ASC, which generates a
majority of its revenue from sales in Europe.

Cost of Revenue

Cost of revenue consists principally of costs of product media, manuals,
packaging materials, product localization for international markets,
duplication and shipping, as well as royalties and associated amortization of
paid license fees relating to third-party software included in the Company's
products. In addition, cost of revenue includes a warranty reserve, measured
on a periodic basis, for the costs of upgrades and services. Cost of revenue
as a percentage of total revenue increased to 19% for the six months ended
June 30, 1996 as compared

24
<PAGE>

to 12% for the six months ended June 30, 1995. This percentage increase
resulted primarily from the higher cost of revenue attributable to the new
Enhanced CU-SeeMe product line as compared to the Company's other products.
Certain third-party software incorporated in Enhanced CU-SeeMe bears higher
royalty rates than the software incorporated in the Company's other product
lines and also requires payment of upfront fees that are amortized over the
respective periods of the software licenses. The Company intends to continue
its strategy of improving the features and functionality of its products,
particularly Enhanced CU-SeeMe, through the incorporation of third-party
software and, as a result, the cost of revenue as a percentage of total
revenue may continue to fluctuate.

Sales and Marketing

Sales and marketing expense consists primarily of costs associated with
sales and marketing personnel, sales commissions, trade shows, advertising and
promotional materials. Sales and marketing expense increased by 140% to
$2,810,000 in the six months ended June 30, 1996 from $1,173,000 in the six
months ended June 30, 1995, and increased as a percentage of total revenue to
58% from 34%. The increase was attributable approximately equally to (i) the
additional sales force employed as part of the acquisition of ASC, effective
as of November 1, 1995, (ii) the strengthening of the Company's sales and
marketing organization through the hiring of additional personnel in channel
development, marketing, communication, technical support and sales and (iii)
the launch of Enhanced CU-SeeMe, which included increased advertising, trade
show participation and other marketing-related programs. The Company intends
to continue to increase sales and marketing efforts in connection with the
first year of its marketing and sales of Enhanced CU-SeeMe and to hire sales
and marketing personnel, but at a slower rate of increase than during the six
months ended June 30, 1996.

Research and Development

Research and development expense consists primarily of costs of personnel
and equipment. Research and development expense increased by 85% to $1,701,000
in the six months ended June 30, 1996 from $920,000 in the six months ended
June 30, 1995. Research and development expense represented 35% and 27% of
total revenue for the six months ended June 30, 1996 and 1995, respectively.
The increase was attributable primarily to the employment of additional
engineers as a result of the acquisition of ASC and to a lesser extent to the
hiring of additional personnel for the product development team for Enhanced
CU-SeeMe. The Company expects that research and development expense will
increase in dollar amount in future periods as the Company continues to
enhance its products, particularly Enhanced CU-SeeMe, and to introduce new
products, such as Web-enabled versions of its eXodus and 5PM products.

General and Administrative

General and administrative expense consists of expenses relating to the
Company's administrative, financial and general management activities,
including legal, accounting and other professional fees. General and
administrative expense increased by 71% to $1,283,000 in the six months ended
June 30, 1996 from $751,000 in the six months ended June 30, 1995 and
increased as a percentage of total revenue to 26% from 22%. The dollar and
percentage increases were attributable primarily to the administrative support
of the Company's new office in LaGaude, France as a result of the acquisition
of ASC and to a lesser extent to increased personnel and systems costs related
to the improved communications infrastructure for the Company's Internet and
intranet access.

FISCAL YEAR ENDED DECEMBER 31, 1995 COMPARED TO FISCAL YEAR (NINE MONTHS)
ENDED DECEMBER 31, 1994

Effective April 1, 1994, the Company changed its fiscal year end from March
31 to December 31. As a result, comparisons of the Company's results of
operations for the fiscal years ended December 31, 1994 and 1995 are not
necessarily meaningful.

Revenue

Total revenue, consisting of revenues from eXodus and 5PM software
connectivity products and related services, increased by 45% to $7,184,000 in
the fiscal year ended December 31, 1995 from $4,965,000 in the fiscal year
ended December 31, 1994. Of this increase, approximately $1,400,000 was due to
the inclusion of an

25
<PAGE>

additional three months of operations in the fiscal year ended December 31,
1995 and approximately $500,000 was due to the inclusion of two months of
operations of ASC in that fiscal year. To a lesser extent, the increase in
total revenue also reflected an increase in revenue from services and other
fees attributable to a contract for one customer; the Company does not expect
to continue to generate revenue from this customer at the same level in the
future, as the contract for services expired pursuant to its terms.

Revenue from sales outside the United States comprised 20% and 11% of total
revenue for the fiscal years ended December 31, 1995 and 1994, respectively.
During the fiscal years ended December 31, 1995 and 1994, Ingram Micro, Inc.
accounted for approximately 16% and 21%, respectively, of the Company's total
revenue.

Cost of Revenue

Cost of revenue as a percentage of total revenue increased to 17% for the
fiscal year ended December 31, 1995 as compared to 13% for the fiscal year
ended December 31, 1994. This percentage increase resulted primarily from the
amortization of royalties and other fees under the License Agreement for the
Enhanced CU-SeeMe product line incurred after the execution of the License
Agreement in June 1995, but prior to the commercial introduction of Enhanced
CU-SeeMe.

Sales and Marketing

Sales and marketing expense increased by 54% to $2,517,000 in the fiscal
year ended December 31, 1995 as compared to $1,637,000 in fiscal year ended
December 31, 1994 and increased as a percentage of total revenue to 35% from
33%. The percentage increase primarily reflected increased trade show
participation. The percentage increase also resulted from the inclusion of
European sales and marketing expense after the acquisition of ASC, and to a
lesser extent from the addition of sales and marketing personnel, including
staffing for channel development, technical publications, technical support,
marketing communication and sales, in anticipation of the introduction of
Enhanced CU-SeeMe.

Research and Development

Research and development expense increased by 43% to $1,866,000 in the
fiscal year ended December 31, 1995 as compared to $1,301,000 for the fiscal
year ended December 31, 1994 and represented 26% of total revenue in both
periods. The dollar increase was primarily attributable to additions to the
product development team for Enhanced CU-SeeMe.

General and Administrative

General and administrative expense increased by 81% to $2,001,000 in the
fiscal year ended December 31, 1995 as compared to $1,106,000 in the fiscal
year ended December 31, 1994 and increased as a percentage of total revenue to
28% from 22%. The dollar and percentage increases were attributable
approximately equally to the administrative support of the Company's new
office in LaGaude, France as a result of the acquisition of ASC, increased
personnel and other costs related to the communications infrastructure for the
Company's Internet and intranet access, and higher professional fees.

Write-off of Purchased Research and Development Costs

The Company acquired ASC effective as of November 1, 1995 and accounted for
the acquisition as a purchase transaction. The assets acquired from ASC
included "in-process technology" with a fair value of approximately
$3,200,000. These costs were charged to operations upon consummation of the
acquisition, due to a determination that there was no future value to the
Company.

Provision for Income Taxes

The Company's provision for income taxes in the fiscal years ended December
31, 1995 and 1994 consisted of federal alternative minimum taxes and state and
foreign income taxes. The Company expects that its effective tax rate for the
foreseeable future will be lower than the combined federal and state statutory
rate primarily as a result of the realization of net operating loss
carryforwards. See Note 5 of Notes to the Company's Consolidated Financial
Statements.

26
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company financed its operations from April 1, 1994 to December 31, 1995
primarily through internally generated funds from operating activities. During
the six months ended June 30, 1996, the Company financed its operations
primarily through the use of cash and other liquid assets and through a
private placement of equity securities.

The Company's operating activities generated $642,000 in the fiscal year
ended December 31, 1995 and used $133,000 in the fiscal year ended December
31, 1994. The Company's operating activities used cash of $1,577,000 in the
six months ended June 30, 1996, primarily as a result of increased sales and
marketing and research and development activities related to the release of
Enhanced CU-SeeMe in March 1996.

Cash used in investing activities has been primarily for the purchase of
third-party software licenses and for capital expenditures. In addition, the
Company incurred approximately $175,000 of acquisition costs for the purchase
of ASC effective as of November 1, 1995.

Cash provided by or used in financing activities was not material for either
of the fiscal years ended December 31, 1995 and 1994. The Company received
gross proceeds of $2,300,000 from a private placement of equity securities in
the six months ended June 30, 1996.

Capital expenditures totalled $303,000, $330,000 and $185,000 for the six
months ended June 30, 1996 and the fiscal years ended December 31, 1995 and
1994, respectively. These expenditures consisted principally of purchases of
computer systems and office equipment.

On December 30, 1994, the Company entered into a commercial loan agreement
with Fleet Bank--NH (the "Bank") providing for a $1,000,000 revolving line of
credit. The commercial loan agreement was amended on August 29, 1995 to
include a term loan in the initial principal amount of $53,000. The revolving
line of credit expires on January 1, 1997, and the Company and the Bank have
entered into negotiations for a successor credit line of $3,000,000 to be
effective after January 1, 1997. The term loan is payable in monthly
installments from September 1995 through August 2000. Borrowings under the
line of credit and the term loan are secured by substantially all of the
Company's assets, including a $515,000 certificate of deposit and all of the
Company's computer software products (including all source code, object code,
copyrights, trademarks and patents (if any) relating thereto). Amounts
outstanding under the line of credit and the term loan bear interest at the
Bank's prime rate plus 0.5% (8.75% at June 30, 1996). The commercial loan
agreement requires that the Company provide the Bank with certain periodic
financial reports and comply with certain financial and other ratios,
including maintenance of a minimum net worth, a maximum ratio of total
liabilities to tangible net worth, a minimum ratio of current assets to
current liabilities and profitability determined on a rolling three-month
basis. On July 31, 1996, the Company obtained a waiver from the Bank with
respect to the Company's failure to satisfy the minimum ratio of current
assets to current liabilities as of December 31, 1995 and the profitability
covenant during the quarters ended December 31, 1995 and March 31, 1996; the
waiver also extends to any and all further violations of these covenants
occurring on or prior to September 30, 1996. At December 31, 1995 and June 30,
1996, no borrowings were outstanding under the revolving line of credit and
$49,467 and $44,167 were outstanding under the term loan, respectively.

At June 30, 1996, the Company had cash and cash equivalents of $2,031,000
and working capital of $1,125,000. The Company believes that the net proceeds
of this offering, together with current cash, cash equivalents and marketable
securities and funds, if any, generated from operations will be sufficient to
fund the Company's operations and capital expenditures for at least the next
twelve months.

In the normal course of business, the Company evaluates acquisitions or
investments in companies, technologies or products that complement the
Company's business or product offerings. The Company is not currently involved
in negotiations with respect to, and has no agreement or understanding
regarding, any such acquisition or investment.

27
<PAGE>

INFLATION

Although certain of the Company's expenses increase with general inflation
in the economy, inflation has not had a material impact on the Company's
financial condition or results of operations to date.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 1995, the Financial Accounting Standards Board issued SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of." SFAS No. 121 addresses the accounting for the impairment
of long-lived assets, certain identifiable intangible assets and goodwill when
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. The Company's adoption of SFAS No. 121 in 1996
is not expected to have a material impact on its results of operations or
financial condition.

In November 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation." SFAS No. 123 addresses the
financial accounting and reporting standards for stock-based employee
compensation plans. SFAS No. 123 permits an entity either to record the
effects of stock-based employee compensation plans in its financial statements
or to present pro forma disclosures in the notes to its financial statements.
In connection with its adoption of SFAS No. 123 during 1996, the Company
intends to elect to provide the appropriate disclosures in the notes to its
financial statements.

28
<PAGE>

BUSINESS

White Pine develops, markets and supports multiplatform desktop connectivity
software that facilitates worldwide video, audio and data communication across
the Internet, intranets and other networks that use the Internet Protocol. The
Company's desktop videoconferencing software products, Enhanced CU-SeeMe and
the White Pine Reflector, create a client-server solution that allows users to
participate in real-time, multipoint videoconferences and data collaboration
over the Internet and intranets. White Pine also offers its eXodus line of
desktop X Windows software, which enables seamless interoperability between
local and remote environments, and its 5PM line of terminal emulation
software, which provides desktop access to data and applications residing on
enterprise legacy systems.

INDUSTRY BACKGROUND

As computer usage and functionality have grown over the last two decades,
businesses and other organizations have realized that they can greatly enhance
the value of their computing resources by increasing interconnectivity between
legacy host systems and networks of desktop personal computers ("PCs").
Terminal and X Windows emulation can be used within an enterprise to enable
desktop PCs to access data and applications residing in legacy systems. In the
1970s, connectivity across enterprise boundaries was further enhanced through
the development of the Internet Protocol ("IP"), a communications protocol
standard. In the 1990s, IP's networking potential has been more fully realized
with the emergence of the Internet as a mass communications medium capable of
transmitting text and graphics and, more recently, audio and video.
Organizations have also begun to use IP to establish intranets, which use the
Internet to connect information systems within an enterprise as well as
provide access to information systems of other enterprises.

Legacy System Connectivity

Terminal emulators were developed in the early 1980s to mimic "dumb"
terminals that linked users to mainframe computers through a variety of
proprietary communication protocols. As businesses' reliance on desktop PCs
grew during the 1980s, vendors developed cost-effective, software-only
products that enabled PCs to emulate text terminals for a variety of mainframe
platforms and to provide additional functionality in the form of desktop
applications. Later, vendors capitalized on the expanded graphical
capabilities of PCs by developing high-end, graphical software emulators,
often with improved feature sets. Software terminal emulation, which can now
be performed over the Internet through IP, continues to provide easier and
wider access to mission- critical data and applications residing on enterprise
legacy systems.

In 1984, software engineers at the Massachusetts Institute of Technology
broadly expanded enterprise connectivity by developing the X Window System ("X
Windows") for workstations and PCs. X Windows was designed as a standard
independent of platforms, networks and operating systems, and it became the
key underlying technology for the next generation of distributed computing. X
Windows, which is based on a client-server computing model, permits a user to
run multiple graphical applications simultaneously on a variety of platforms
from a single X Windows terminal. Since 1990, virtually all X Windows
applications have used IP networks to establish connectivity. As with terminal
emulation products, vendors soon developed software-only X servers for desktop
PCs, enabling large numbers of PCs to access data and applications across the
enterprise, regardless of the platform, network or operating system used by
the system on which the data or applications resided. An industry analyst has
estimated that worldwide sales of PC X servers will grow from $109 million in
1995 to $216 million in 1998.

Communication on the Internet and Intranets

Use of the Internet has exploded in the 1990s as a result of the growing
installed base of PCs and the emergence of the user-friendly World Wide Web
(the "Web"). The Internet, an interconnected network of numerous public and
private networks that links over 130 countries, is estimated by an industry
analyst to have been used by more than 38 million people in 1995. At its heart
lies IP, which allows for uniform, seamless

29
<PAGE>

communications in a multi-vendor, multi-provider public network. Recognizing
that similar benefits can be realized by applying IP within an enterprise,
businesses and other organizations have begun to establish private intranets
that enable them to better distribute information to employees, connect
disparate equipment and protect their investment in computer resources, as
well as to share information with customers, vendors, partners and others.

The rapid growth of the Internet has been largely attributable to its use as
a communications medium. Initially, the Internet facilitated text-based
communication applications such as e-mail, special interest bulletin boards
and "chat." As multimedia PCs become commonplace, Internet usage is expanding
to take advantage of new multimedia capabilities for real-time communications
using one-way, on-demand "streamed" audio and video, Internet telephony and,
ultimately, videoconferencing.

Videoconferencing consists of real-time, one-way or two-way audio and video
communication. It enables users at remote locations to enjoy many of the
benefits of face-to-face meetings without the time and expense of travel. Like
the mainframe solutions that dominated the early years of the computer
industry, videoconferencing generally required expensive hardware-based
systems that communicated through proprietary protocols. Today, most
videoconferencing systems remain hardware-based and fit into three principal
classes: room-based systems priced at or above $40,000, "roll-about" systems
priced at less than $20,000, and hardware-based desktop systems priced as low
as $1,000. Although each of these systems requires certain proprietary
hardware, in recent years many vendors have been designing systems that comply
with emerging international industry standards intended to facilitate
interoperability among different vendors' videoconferencing systems. In the
early 1990s, the International Telecommunications Union (the "ITU") began to
establish standards for interactive audio, video and data communication over
digital networks. By 1992, a number of vendors had introduced, and
demonstrated interoperability among, videoconferencing systems that complied
with early ITU standards. While the implementation of emerging industry
standards and other technological improvements have helped to increase sales
of hardware-based videoconferencing systems in recent years, the relatively
high price and limited interoperability of these systems have impeded the
widespread adoption of videoconferencing as a mass communication medium.

In an effort to expand the availability of videoconferencing as a
communications tool, a number of developers commenced efforts to develop
software-based videoconferencing technology that did not require expensive
proprietary hardware. In 1992, Cornell Information Technologies, a research
institute at Cornell University, introduced freeware known as CU-SeeMe
("Freeware CU-SeeMe"). This real-time desktop videoconferencing software
enables users to communicate over the Internet, independent of computer
hardware and operating system. With Freeware CU-SeeMe, computer users around
the world could engage in real-time video and audio communication using low-
cost, easily available hardware, such as 28.8 kbps modems and standard
videocapture boards and video cameras.

Although Freeware CU-SeeMe lacks the reliability, functionality and features
that are necessary to succeed in today's commercial marketplace, its
popularity has demonstrated the potential market for a software-based
videoconferencing solution that is able to connect users through the Internet.
As industry standards for Internet-based videoconferencing emerge, a more
developed IP-based solution could transform the multimedia PCs already
installed in homes and offices into videoconferencing terminals at a fraction
of the price of today's hardware-based systems. Industry analysts have
estimated that shipments of desktop videoconferencing systems will grow from
approximately 100,000 units in 1995 to an estimated 20 million units in 2000.
A software solution for videoconferencing over the Internet and other IP-based
networks could not only provide videoconferencing capabilities at a lower
price but could also permit the addition of new features and the
implementation of emerging standards through easily installable software
upgrades.

30
<PAGE>

THE WHITE PINE SOLUTION

White Pine develops, markets and supports a variety of cross-platform
connectivity software products, many of which the Company designed by applying
its substantial IP connectivity experience. The Company seeks to develop
innovative, lower-priced, software alternatives to hardware connectivity
products and to enhance its software solutions through additional
functionality and features. White Pine has been a leader in developing
standards-based connectivity products that allow customers to access
information within and across enterprises through local area networks
("LANs"), wide area networks ("WANs"), the Internet and intranets.

The Company's videoconferencing products, Enhanced CU-SeeMe and the White
Pine Reflector, create a software-only client-server solution for real-time,
multipoint audio and video communication and data collaboration over the
Internet. By developing videoconferencing products that require no proprietary
hardware, White Pine is able to offer videoconferencing at a substantially
lower price than vendors of traditional hardware-based systems and thereby
encourage businesses and others to adopt it as a mass communication medium.
The Company's exclusive license agreement with Cornell Research Foundation,
Inc. (the "Cornell Foundation"), the technology licensing organization
associated with Cornell University, provided the Company with the underlying
technology for Enhanced CU-SeeMe and the White Pine Reflector and afforded the
Company brand name recognition, an installed base and a time-to-market
advantage over other vendors seeking to develop software videoconferencing
solutions.

Enhanced CU-SeeMe is available on multiple platforms and can be installed on
most multimedia PCs without any proprietary hardware. By operating over the
Internet, Enhanced CU-SeeMe substantially broadens the base of businesses,
organizations and individuals able to engage in videoconferencing. The White
Pine Reflector, the software-only server component of the Company's
videoconferencing solution, allows users of Enhanced CU-SeeMe to participate
in multipoint videoconferences with a nearly unlimited number of users. The
White Pine Reflector also solves the complex problem of enabling real-time
multipoint communication over the Internet between users operating at
different connection speeds without degrading the quality of the entire
conference to that of the slowest connection speed. Together, Enhanced CU-
SeeMe and the White Pine Reflector, with their low prices, cross-platform
capabilities and ease of use, enable corporations, government organizations,
educational institutions and individuals worldwide to interact in real time
without the time and expense of travel.

White Pine's eXodus and 5PM products allow users throughout an enterprise to
access mission-critical data and applications residing on legacy systems.
These software products are competitively priced and easy to use, and they
include a comprehensive set of features allowing for seamless integration with
existing enterprise systems and newer intranet applications.

STRATEGY

White Pine's principal business objective is to be a supplier of leading-
edge network connectivity solutions. The Company plans to build upon its
position as a leader in Internet-based videoconferencing and to offer
customers complete intranet solutions by continuing to expand its connectivity
product offerings. The key components of White Pine's strategy are as follows:

Maintain Technological and Time-to-Market Leadership. The Company's Enhanced
CU-SeeMe, introduced in March 1996, was the first commercially available
Internet-based videoconferencing product. The Company believes that Enhanced
CU-SeeMe's Internet-based videoconferencing technology, cross-platform
capabilities, software-only and hardware-independent architecture, and
scalability over a broad range of bandwidths provide significant competitive
advantages. Enhanced CU-SeeMe has been featured in a number of industry
publications and has won New Media Magazine's "1996 Hyper Award," Byte
Magazine's "Best of PC Expo '96 Winner," PC Computing's four-star rating in
its August 1996 issue and MacWorld's "Best of MacWorld" in December 1995. The
Company intends to extend its leadership position in Internet-based
videoconferencing by continuing to invest in research and development,
establishing relationships with leading providers of complementary
technologies and integrating Enhanced CU-SeeMe with products offered by third
parties. The Company believes that its extensive experience in developing
software connectivity products that give customers seamless access to
information located on complex, heterogeneous networks will assist it in
maintaining its technological leadership.

31
<PAGE>

Leverage Name Recognition and Installed Base of Freeware CU-SeeMe. The
Company plans to leverage the brand name recognition of its videoconferencing
product, Enhanced CU-SeeMe, and its predecessor, Freeware CU-SeeMe. The
Company believes that this installed base of Freeware CU-SeeMe represents a
significant competitive advantage for the Company in marketing Enhanced CU-
SeeMe and intends to promote Enhanced CU-SeeMe in part through continued
distribution and support of Freeware CU-SeeMe.

Leverage Strength of White Pine Reflector Technology. The Company believes
its success in the Internet-based videoconferencing market derives in part
from the capabilities of the White Pine Reflector, the Company's software-only
server technology for group videoconferencing. The Company intends to build
upon the core White Pine Reflector technology through on-going product
enhancements that will simplify Internet and intranet videoconferencing
through Enhanced CU-SeeMe. The Company expects that the next major version of
Enhanced CU-SeeMe, scheduled for release in the first quarter of 1997, will
include enhancements such as conference scheduling, video directory services,
video mail, video call forwarding, billing and improved conference security.
As industry standards develop, the Company intends to release standards-
compliant versions of the White Pine Reflector to permit end-users to take
advantage of its capabilities, regardless of whether they are using Enhanced
CU-SeeMe or a videoconferencing client system from another vendor.

Establish and Extend Strategic Relationships. The Company intends to
establish new strategic and original equipment manufacturer ("OEM")
relationships and extend existing relationships with multinational firms that
provide unique marketing or distribution opportunities or technological
capabilities for Enhanced CU-SeeMe. The Company has already established
marketing, distribution and technology relationships with companies such as
Ingram Micro, Inc., Tech Data Corporation, BBN Planet Corporation, Videolabs,
Inc. and Winnov, Inc. The Company also intends to use technology relationships
to accelerate the delivery of enhanced product features and services to the
Enhanced CU-SeeMe market. The Company has already established technology
relationships with Voxware, Inc. for voice compression technology, Four11
Corporation for global Internet conferencing "white pages," and Utopia Inc.
for Web and intranet integration services.

Lead Standards Implementation for Interoperability. The Company believes
that the continued adoption and implementation of industry standards for
interoperability are crucial to the growth of the videoconferencing market.
The Company is committed to implementing standards-based functionality into
upcoming releases of Enhanced CU-SeeMe and the White Pine Reflector. The
Company actively participates in key standards bodies, such as the
International Multimedia Teleconferencing Consortium, the Internet Engineering
Task Force and the X Consortium, and follows the development of standards by
the ITU. The Company also participates in industry efforts to develop
application frameworks, such as Netscape Communications Corporation's
LiveMedia framework and Microsoft Corporation's ActiveX framework, to create
interoperability among videoconferencing systems.

Increase Market Penetration Outside North America. The Company intends to
increase its international marketing activities for both the Company's
videoconferencing products and its legacy connectivity products by identifying
and engaging a recognized distributor in each major international market. The
Company believes that this strategy will enable it to leverage each
distributor's presence and experience in its local market. To that end, the
Company has already established distribution relationships in Australia,
France, Germany, Hong Kong, Japan, Korea and the United Kingdom. The Company
maintains a salesforce and a multilingual support team in France. The Company
also plans to introduce the first localized Internet-based videoconferencing
product in each major international market. The Company's distributors have
already introduced localized versions of Enhanced CU-SeeMe in Japan and Korea
and the Company is developing localized versions for France and Germany. The
Company believes that Asia will be the largest market for Internet-based
desktop videoconferencing outside North America and in the near term intends
to devote a significant portion of its international marketing resources to
Asian countries.

Extend Multiplatform Product Line to Web Browsers. Based upon the rapid
growth of the Internet and the Web, the Company believes that users will
increasingly rely less on computer operating systems, such as Microsoft
Windows and Macintosh OS, and more on Web browsers, such as Microsoft Internet
Explorer and Netscape Navigator, to access information and applications. As
businesses and other organizations increase their

32
<PAGE>

use of the Internet and intranets, the Company intends to develop low-cost
Web-enabled versions of its legacy connectivity products for each major Web
browser. The Company also intends to continue to develop and introduce
versions of each of its products for each principal operating platform. The
Company currently ships versions of Enhanced CU-SeeMe, eXodus and 5PM for both
Windows and Macintosh platforms.

PRODUCTS

White Pine develops, markets and sells a variety of cross-platform software
connectivity products for use over the Internet, intranets and other IP-based
networks. The Company seeks to develop innovative, lower-priced software
alternatives to hardware solutions and to enhance its software solutions
through additional functionality and features. White Pine has been a leader in
developing standards-based connectivity products that allow customers to
access information within and across enterprises through LANs, WANs, the
Internet and intranets.

Videoconferencing

White Pine develops, markets and sells Enhanced CU-SeeMe and the White Pine
Reflector, which together create a software client-server videoconferencing
solution for businesses, educational institutions, government organizations
and individuals. These products enable a user to participate in live one-way,
two-way or multipoint audio and video communication and data collaboration
over the Internet and other IP networks at a significantly lower price than
traditional hardware-based videoconferencing solutions.

The following table sets forth the Company's videoconferencing products and
their respective platforms, dates of initial shipment, descriptions and
suggested retail prices.

<TABLE>
<CAPTION>
INITIAL
OPERATING SYSTEM SHIPMENT SUGGESTED
PRODUCT PLATFORMS DATE DESCRIPTION RETAIL PRICE
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Enhanced Windows 95 March 1996 Desktop client software for $99
CU-SeeMe Windows NT videoconferencing over IP
Windows for networks
Workgroups
Windows 3.1
- ------------------------------------------------------------------------------------
Enhanced Macintosh PowerPC June 1996 Desktop client software for $99
CU-SeeMe Mac 68000 videoconferencing over IP
networks
- ------------------------------------------------------------------------------------
White Windows NT May 1996 Server software for $395 and up
Pine Re- Windows 95 multipoint videoconferencing
flector set-up and control
- ------------------------------------------------------------------------------------
White UNIX April 1996 Server software for $395 and up
Pine Re- multipoint videoconferencing
flector set-up and control
</TABLE>

The Company also licenses Enhanced CU-SeeMe and the White Pine Reflector as
a bundled package and offers site licenses and volume discounts for larger
purchases.

Enhanced CU-SeeMe

Installed on a multimedia PC equipped with low-cost, easily available
hardware, such as a 28.8 kbps modem, a standard videocapture board and a
standard video camera, Enhanced CU-SeeMe enables real-time audio and video
communication and data collaboration over the Internet and other IP networks.
Enhanced CU-SeeMe has the following capabilities and features:

33
<PAGE>

. simultaneous viewing of up to eight videoconferencing participants;
. data collaboration through the WhitePineBoard, a form of "whiteboard"
software;
. participation in live "cybercast" events;
. intuitive, dynamic windowing of videoconferencing participants through
the Participants List, which indicates presence by video, voice or chat;
. automatic call initiation for frequently called addresses stored in the
Phone Book;
. software functions equivalent to call-waiting and caller-ID;
. browser support for direct launch of Enhanced CU-SeeMe from any Web page;
. support for a wide range of graphics modes, from 4-bit grayscale to 24-
bit true color; and
. ""chat'' function.

Enhanced CU-SeeMe actively monitors the size and quality of each user's
connection and adjusts transmission accordingly. Enhanced CU-SeeMe allows users
to videoconference over bandwidths as low as 28.8 kbps and to improve video
resolution and frame rate by taking advantage of the wider bandwidths provided
by ISDN, LANs, cable modems and other technologies.

[Graphic: Two depictions of persons facing PCs equipped with video cameras,
together with a double-headed arrow between and pointing to the two
persons. The words "Internet or Intranet Connection" appear above the
arrow, and the words "28.8 kbps up to 10Mbps" appear below the arrow.]

Enhanced CU-SeeMe incorporates a variety of audio and video
compression/decompression software ("codec") for use with different bandwidths
and allows a user to select the appropriate audio and video codecs for the
user's particular bandwidth. Its modular software architecture permits simple
upgrades for newly developed audio and video codecs. Enhanced CU-SeeMe is
easily installed as a result of its interoperability with most standard, non-
proprietary hardware configurations.

White Pine commenced shipments of Enhanced CU-SeeMe 2.0 for Windows 3.1,
Windows for Workgroups and Windows 95 in March 1996, and Enhanced CU-SeeMe 2.0
for the Macintosh PowerPC and Macintosh 68000 platforms in June 1996. The
Company announced the release of Enhanced CU-SeeMe 2.1 for Windows, which
provides additional multicasting capability, improved audio performance and
integrated directory services, on September 30, 1996; the Company expects to
ship Enhanced CU-SeeMe 2.1 for Macintosh in the fourth quarter of 1996. The
Company intends to release Enhanced CU-SeeMe 3.0 for Windows and Macintosh in
the first quarter of 1997. Version 3.0 is expected to incorporate new features
such as enhanced directory services, firewall support and echo cancellation, as
well as whiteboard technology from DataBeam Corporation and general
modifications to improve performance and ease of use. The Company expects that
Enhanced CU-SeeMe 3.0 will support relevant Internet and ITU standards that
enable interoperability among videoconferencing systems of different vendors
and will be compatible with ActiveX, LiveMedia, QuickTime Conferencing and
other application frameworks. The Company has also announced its plans to
provide interoperability between Enhanced CU-SeeMe and Microsoft Corporation's
NetMeeting communications and collaboration software.

Enhanced CU-SeeMe has been featured in a number of industry publications and
has won New Media Magazine's "1996 Hyper Award," Byte Magazine's "Best of PC
Expo '96 Winner," PC Computing's four-star rating in its August 1996 issue and
MacWorld's "Best of MacWorld" in December 1995.

34
<PAGE>

White Pine Reflector

The White Pine Reflector is software-only technology that allows users of
Enhanced CU-SeeMe to participate in multipoint videoconferences over the
Internet with a nearly unlimited number of users without proprietary hardware.
The White Pine Reflector solves the complex problem of enabling real-time
multipoint communication over the Internet between users operating at
different connection speeds without degrading the quality of the entire
conference to that of the slowest connection speed. The White Pine Reflector
has the following capabilities and features:

. capacity to accommodate up to an aggregate of 100 participants in one or
more simultaneous videoconferences on a single White Pine Reflector,
depending on the processing power of the computer on which the White Pine
Reflector is installed and the participants' connection speeds;

. videoconferencing with a nearly unlimited number of conference
participants through linkages to other White Pine Reflectors;

. ability to "cybercast" live events to large audiences through linkages to
other White Pine Reflectors;

. bandwidth management;

. ability to utilize multicast-capable networks;

. conference security through conference identification, password and IP
address verification;

. compatibility with multiple platforms, including Windows 95, Windows NT
and eleven versions of UNIX, including those offered by Sun Microsystems,
Inc., Digital Equipment Corporation, International Business Machines
Corporation, Hewlett-Packard Company and Santa Cruz Operations, as well
as Linux; and

. secure access through manual firewall configuration.

The following diagrams illustrate the use of Enhanced CU-SeeMe and the White
Pine Reflector in a simple group conference, an intranet group conference and
a cybercast.

[Graphic: A depiction of a computer monitor containing the word "Reflector" (a
"Reflector Symbol") connected by four lines of various widths to four
depictions of persons facing PCs. Above each of the four lines, in
order of decreasing width, are the terms "LAN," "WAN" "ISDN" and
"28.8."]

The White Pine Reflector allows videoconfrencing among users with different
connection speeds without having to use the lowest common bandwidth.

35
<PAGE>

[Graphic: Two Reflector Symbols connected by a thick line. The words "Intranet
or Corporate WAN" appear above the line. The Reflector Symbol on the
left is connected by two lines of different widths to three depictions
of persons facing PCs. The word "ISDN" appears above the thinner line,
and the word "LAN" appears above the thicker line. The words "Home
Office" appear below the Reflector Symbol on the left. The Reflector
Symbol on the right is connected by a line to three depictions of
persons facing PCs. The word "LAN" appears above the line. The words
"Remote Office" appear below the Reflector Symbol on the right.]

Multiple White Pine Reflectors can work together to maximize conference
quality and minimize bandwidth use.

Cybercast Mode

[Graphic: A depiction of a person facing a PC connected by a line to a Reflector
Symbol, which in turn is connected by lines to three other Reflector Symbols,
two of which are connected by lines to two depictions of persons facing PCs and
one of which is connected by lines to three depictions of persons facing PCs.]

White Pine Reflectors can be linked to reach a nearly unlimited number of
recipients.

The White Pine Reflector deploys software-only technology to allow users
with different connection speeds to conference with each other without
degrading the quality of the entire conference to that of the slowest
connection speed. For example, participants on a LAN can view dial-in users at
lower frame rates while viewing each other or ISDN-based participants at
higher frame rates. The White Pine Reflector manages streams and utilizes
multicasting, if available, to minimize bandwidth use. The White Pine
Reflector allows network providers to minimize the impact of videoconferencing
on LANs by limiting the number of simultaneous participants in a
videoconference or the speeds of participant connections.

36
<PAGE>

The Company commenced shipments of White Pine Reflector 2.0 for UNIX in
April 1996 and White Pine Reflector 2.0 for Windows 95 and Windows NT in May
1996. The Company expects that White Pine Reflector 3.0 for Windows 95,
Windows NT and UNIX, scheduled for release in the first quarter of 1997, will
incorporate new conference management features for intranet and Internet
service provider ("ISP") customers, including conference scheduling, enhanced
data logging, user tracking and billing, call forwarding and transfer, and
directory services. The Company expects that White Pine Reflector 3.0 will
support relevant Internet and ITU standards, enabling multi-vendor
interoperability and thereby increasing the number of systems through which
users can videoconference.

The Company believes that, to date, most users of Enhanced CU-SeeMe take
advantage of publicly available White Pine Reflectors and freeware multipoint
conferencing servers for group conferencing and cybercasts, such as the White
Pine Reflectors maintained by the National Aeronautics and Space
Administration,
the National Science Foundation and the Global Schoolhouse Project. The
Company expects that an increasing number of White Pine Reflectors will be
maintained by businesses and other enterprises to permit private
videoconferencing and cybercasting over LANs, WANs and intranets. Certain
ISPs, such as BBN Planet Corporation and Utopia Inc., also maintain White Pine
Reflectors for use by their respective subscribers.

Legacy Connectivity Products

The Company offers two lines of legacy connectivity products that allow
businesses and other organizations to access data and applications residing on
host workstations, mini-computers and mainframe computers from most widely-
used desktop operating systems. Because the Company believes that users will
increasingly rely less on computer operating systems and more on Web browsers
to access information and applications, the Company intends to develop Web-
enabled versions of its legacy connectivity products for major Web browsers.

Graphical Windowing

White Pine's eXodus products provide a comprehensive line of multiplatform X
Windows solutions that permit seamless interoperability between local and
remote environments. The Company's predecessor introduced the first eXodus
product in 1989, and the Company most recently introduced eXodus 6.0 for
Macintosh in April 1996. Each eXodus product incorporates an X server that
connects users of most widely used desktop operating systems to UNIX, Windows
NT, VMS and other multi-user computer platforms. These products permit users
to establish connections over high-speed LANs as well as over standard
telephone lines. Based on an industry analyst's report, the Company believes
that eXodus for Macintosh, which won MacWeek's "Editors' Choice Award" in May
1996, is the market leader in providing X Windows solutions for Macintosh
systems. At suggested retail prices of $195 to $295, these products sell for
substantially less than competitive X Windows products. The Company intends to
develop versions of eXodus to operate with major Web browsers and expects to
ship the first of these products in the fourth quarter of 1996.

The Company's eXodus eXpress products, introduced in the second quarter of
1995, provide access to X-compliant applications through serial links, such as
ordinary telephone lines, for a suggested retail price of $195. These products
require a host-side component, eXodus eXpress/Host, which the Company offers
for a variety of host platforms at a suggested retail price of $195.

eXodusNFS, introduced in July 1996, provides the functionality of an NFS
client and UNIX-compatible network file access and remote printing for the
Windows 3.1 and Windows 95 platforms. The NFS client is integrated into the
Windows interface, permitting easier navigation around UNIX environments.
eXodusNFS permits users to access and use network drives from a Windows
desktop.

Graphical Host Connectivity

The Company offers ReGIS and Tektronix terminal emulation solutions for the
Windows, Macintosh and UNIX platforms. The Company's Mac320 and Mac340
products, first introduced by a predecessor of the Company in 1986, provide
complete emulation of the VT320 (text only) and VT340 (text and color
graphics)

37
<PAGE>

hardware terminals from Digital Equipment Corporation. Most recently, the
Company introduced Mac320 2.0.1 and Mac340 2.0.1 in September 1995. The
Company offers these products at suggested retail prices of $99 to $349. The
Company's TGRAF products, first introduced by a predecessor of the Company in
1984, provide Tektronix terminal emulation for Windows, DOS, Macintosh, UNIX
and VMS platforms. The Company believes that TGRAF provides superior
functionality to the more expensive and cumbersome proprietary terminals
offered by the Company's competitors. The Company offers TGRAF, the most
recent version of which was introduced in November 1995, at suggested retail
prices of $295 to $595.

Text-based Host Connectivity

White Pine's 5PM products provide terminal emulation solutions to access
data and applications residing on a variety of platforms, including those
offered by Digital Equipment Corporation, International Business
Machines Corporation and Hewlett-Packard Company, as well as those offered by
Siemens AG and Unisys Corporation, whose host systems are widely used in
Europe. The Company offers 5PM Term, which provides full terminal emulation,
scripting, hot keys, network and serial connection software, file transfer
utilities, keyboard pallets and other features. The Company also offers 5PM
Pro, which allows organizations to customize the various 5PM Term emulations
for their particular applications. 5PM Pro permits users to create custom
graphical user interfaces that both simplify access to legacy applications and
provide more meaningful displays of data output. All 5PM products have an
identical interface regardless of platform, allowing customers with large
installed bases to purchase terminal emulation solutions from a single vendor
and thereby minimize support and training costs.

The Company introduced its first 5PM product in 1991 and most recently
introduced 5PM Term 3.1.4 in July 1996. The Company offers 5PM Term products
for each primary desktop operating system, including Windows 3.1, Windows 95,
Windows NT and Windows for Workgroups as well as Mac and Power Mac, at
suggested retail prices of $249 to $299 per terminal. The Company also bundles
5PM Term with a number of terminal tools and markets the package under the
name 5PM Term Office at a suggested retail price of $399. Version 3.1.3 of 5PM
Pro was introduced in February 1996 and is offered at a suggested retail price
of $799. The Company intends to develop versions of its 5PM products to
operate with major Web browsers and expects to ship the first of these
products in the fourth quarter of 1996.

RESEARCH AND DEVELOPMENT

The Company believes that its success to date has resulted from its
technological innovation in the X Windows and terminal emulation markets.
Since its inception, the Company has specialized in IP-based connectivity
solutions for corporate customers and now provides what it believes to be the
broadest line of multiplatform, software connectivity solutions in the market.
Over the past two years, the Company has successfully introduced new X server
and terminal emulation products for Windows and now offers competitive cross-
platform solutions. In June 1995, the Company secured from the Cornell
Foundation the exclusive worldwide rights to license the Freeware CU-SeeMe
videoconferencing software and has since focused its development efforts on
producing commercial versions of this software.

The Company's research and development expenditures totalled $1,301,000,
$1,866,000 and $1,701,000 in the fiscal years ended December 31, 1994 and 1995
and the six months ended June 30, 1996, respectively. The Company intends to
continue to devote substantial resources to research and development. As of
September 30, 1996, the Company employed 43 persons in engineering and
research and development, of which 31 were devoted to research and development
for Internet-based videoconferencing technologies. The Company intends to hire
additional research and development personnel in the near future to further
the Company's product development efforts. In addition, White Pine has
established an ongoing technical relationship with the Cornell Foundation
whereby the Cornell Foundation is contractually obligated to devote certain
minimum personnel resources to the continued development of the Freeware CU-
SeeMe technology and to supply all of the resulting improvements to the
Company.

Based upon the rapid growth of the Internet and the Web, the Company
believes that users will increasingly rely less on computer operating systems
and more on Web browsers to access information and applications. As a

38
<PAGE>

result, the Company has redirected its X server and terminal emulation
development efforts towards Web-enabled and plug-in products that will
integrate with Web browsers such as Netscape Navigator and Microsoft Internet
Explorer. The Company expects to begin shipping these Web-enabled products
during the fourth quarter of 1996.

MARKETING AND DISTRIBUTION

The Company markets and sells its products through a combination of
distributors, OEMs and strategic partners, its direct sales organization and
over the Internet. The Company conducts marketing programs, including direct
mail, advertising, public relations, distribution of product literature and
other programs to support each of the channels, in order to position and
promote its products and services. The Company maintains a Web site where
prospective customers can obtain information about the Company's products and
services and download certain software for evaluation. Marketing personnel
provide price lists and product descriptions and assist the direct sales force
through lead generation and sales training. The Company's primary strategy for
marketing and distributing its videoconferencing products is to establish new
strategic and OEM relationships and extend existing relationships with
multinational firms that provide unique marketing or distribution
opportunities or technological capabilities for Enhanced CU-SeeMe. The Company
has already established distribution relationships in Australia, France,
Germany, Hong Kong, Japan, Korea and the United Kingdom. The Company has also
formed OEM or bundling relationships in order to provide customers with
turnkey solutions and to facilitate product sales through distribution
channels. The Company has established such relationships with VideoLabs, Inc.,
a manufacturer of digital cameras, and Digital Visions Inc. and Winnov, Inc.,
manufacturers of video boards. In the first quarter of 1996, the Company began
to employ distributors to deliver Enhanced CU-SeeMe to consumers through
retail channels. Enhanced CU-SeeMe is available in store chains and
superstores, such as Egghead Software and RCS, and through catalogs, such as
PC Compleat and Creative Computers PC Mall.

The Company also sells Enhanced CU-SeeMe and the White Pine Reflector
directly from its Web site. The Company believes that, since the commercial
release of Enhanced CU-SeeMe 2.0 in March 1996, Enhanced CU-SeeMe has been
downloaded for evaluation, without any purchase obligation, from the Company's
Web site approximately 450,000 times and that, since the commercial release of
the White Pine Reflector in May 1996, the White Pine Reflector has been
downloaded for evaluation more than 60,000 times. There can be no assurance
that downloads for evaluation will lead to sales of the Company's
videoconferencing products.

The Company also promotes its videoconferencing products by actively
participating in major videoconferencing and other tradeshows such as the
National Association of Broadcasters, Networld+Interop, PC Expo, Comdex,
Internet World, Internet Expo and MacWorld. The Company periodically sponsors
special events, such as cybercasts of the Microsoft World Wide Live and
Developers Conference, a CompuServe Jimmy Buffett Concert, the Little League
50th Anniversary World Series and the 1996 Republican National Convention, in
an effort to enhance the visibility of the Company and its products.

The Company markets and sells its legacy connectivity products in the United
States through its direct sales force and distributors and in other countries
primarily through distributor relationships. The Company intends to continue
this method of marketing and distributing its legacy connectivity products for
the foreseeable future.

International sales represented 11% and 20% of total revenue in the fiscal
years ended December 31, 1994 and 1995, respectively, and 18% and 30% of total
revenue in the six months ended June 30, 1995 and 1996, respectively.

As of September 30, 1996, the Company had 41 employees in sales and
marketing. The Company's sales force is located in Nashua, New Hampshire, San
Jose, California and LaGaude, France.

39
<PAGE>

CUSTOMERS

The Company's customers include businesses, government organizations,
educational institutions and individual consumers. The Company sells its
software to end users and to OEMs that bundle the Company's software with
other products. The following table sets forth certain customers of the
Company from which the Company has derived, or expects to derive in the
foreseeable future, a significant portion of its revenue in the indicated
category:

<TABLE>
<CAPTION>
OEMS, ISPS, DISTRIBUTORS
END USERS AND STRATEGIC PARTNERS
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
East Carolina Navistar BBN Planet Corporation
University International
General Electric Transportion Corp. Hyundai Information Technology
Capital Company Ltd.
Services, Inc. The Ohio State Ingram Micro, Inc.
University
VIDEOCONFERENCING MCI Communications Southwestern Bell Macnica, Inc.
Corp.
Merrill Lynch Technology Tech Data Corporation
Telecom
Finance U.S. Department of Utopia Inc.
Defense
National University of Utah VideoLabs, Inc.
Aeronautics and
Space Winnov Inc.
Administration
- ---------------------------------------------------------------------------------------------
Amgen Inc. J.P. Morgan & Co. Attachmate Corp.
Apple Computer, Incorporated CompuServe Incorporated
Inc.
AT&T Corp. Kredietbank N.V. Digital Equipment Corporation
Corning Motorola, Inc. Diversified Computer Systems,
Incorporated Inc.
The Dow Chemical SNCF E92 Plus Ltd.
LEGACY CONNECTIVITY Company TRW Inc. EA Systems Inc.
E.I. DuPont Universite de Ingram Micro, Inc.
Lausanne
de Nemours & U.S. West Inc. Insignia Solutions Inc.
Company
Deere & Company Merisel Inc.
TCI
</TABLE>

Sales to Ingram Micro, Inc. represented 21% and 16% of the Company's total
revenue in the fiscal years ended December 31, 1994 and 1995, respectively.
See Note 1 of Notes to the Company's Consolidated Financial Statements. The
loss of this customer could have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that any of the customers listed above will license software or
purchase services from the Company in the future.

CUSTOMER SERVICE AND SUPPORT

White Pine is committed to maintaining customer satisfaction and loyalty. As
of September 30, 1996, White Pine employed 17 technical customer
representatives located in New Hampshire, California and France to support and
service its customer base. In the future, the Company intends to hire
additional technical customer representatives to support the increasing
installed base of Enhanced CU-SeeMe. In the event demand for customer service
outpaces the Company's expectations, the Company may employ a third-party
help-desk organization to provide additional support. The Company believes
that certain of its distributors and OEM customers maintain separate customer
support organizations for their respective customers. The Company provides
back-up support to such organizations.

<PAGE>

The Company maintains a technical support hotline to answer customer
inquiries and provides an on-line database of technical product information.
The Company's support staff also responds to e-mail inquiries and monitors
several e-mail mailing lists. Customer support specialists diagnose and solve
technical problems related not only to the Company's products but also to
other hardware and software with which the Company's products may interact.
The Company tracks all support requests, including current status reports and
historical customer interaction logs, using a series of customer databases.
The Company uses customer feedback as a source of ideas for product
improvements and enhancements.

The Company intends to provide maintenance for Enhanced CU-SeeMe through a
program of periodic technical upgrades. The price of the White Pine Reflector
includes one year of maintenance services. For a fee, the Company will provide
extended maintenance services to its White Pine Reflector customers and to
certain volume purchasers of Enhanced CU-SeeMe. Customers who purchase site
licenses for the White Pine Reflector are required to enter into a customer
support and maintenance agreement. The Company's X Windows and terminal
emulation customers can obtain service and support through the Company's
eXtend Support Program, which for a fee entitles customers to priority service
through a toll-free number and to free, automatic shipments of all
enhancements and upgrades for legacy connectivity products licensed from the
Company.

COMPETITION

The market for videoconferencing products and services is extremely
competitive, and the Company expects that competition will intensify in the
future. The Company believes that the principal competitive factors in the
videoconferencing industry are price, video and audio quality,
interoperability, functionality, reliability, service and support, hardware
platforms supported, and vendor and product reputation. The Company believes
that its ability to compete successfully will depend on a number of factors
both within and outside its control, including the adoption and evolution of
industry standards, the pricing policies of its competitors and suppliers, the
timing of the introduction of new software products and services by the
Company and others, the Company's ability to hire and retain employees, and
industry and general economic trends. The Company anticipates that in the near
future the videoconferencing market will experience intense competition in the
form of product bundling or significant price reductions. The Company
currently competes, or expects to compete, directly or indirectly with the
following categories of companies: (i) traditional hardware-based
videoconferencing companies, such as PictureTel Corporation, VTEL Corporation
and Compression Labs, Incorporated; (ii) emerging videoconferencing technology
companies, such as Cinecom Corporation, Connectix Corporation, Creative Labs,
Inc. and VDONet Corp.; (iii) vendors of operating systems and browsers such as
Microsoft Corporation, which recently introduced NetMeeting, a product that
enables point-to-point audio and data communication over the Internet, and
Netscape Communications Corporation, which recently acquired Insoft, Inc. and
its audio and videoconferencing technology; (iv) videoconferencing support
companies, such as VideoServer, Inc., Lucent Technologies, Inc. and Accord
Ltd.; and (v) other companies developing videoconferencing systems. PictureTel
Corporation and Intel Corporation each recently announced plans to license
products competitive with Enhanced CU-SeeMe to manufacturers of personal
computers and modems for inclusion in prepackaged multimedia and other
systems. In July 1996, Intel Corporation also announced a cross-licensing
agreement with Microsoft Corporation to share implementations of certain
industry standards and application frameworks, which the Company expects will
enhance the competitiveness of the products offered by both companies. In
addition, because the barriers to entry in the software market are relatively
low and the potential market is large, the Company anticipates continued
growth in the industry and the entrance of new competitors in the future.
Enhanced CU-SeeMe also competes with videoconferencing software that is
available on the Internet and can be downloaded by users for either no charge
or for extended evaluation. Freeware CU-SeeMe and its related server are
freely available over the Internet. See "Business--Proprietary Rights."

41
<PAGE>

Ltd., the largest supplier of X server software products for the PC platform.
To the extent that these and other companies introduce new or enhanced PC X
server software products, the Company will face increased competition.

Many of the Company's current and potential competitors, including
Hummingbird Communications Ltd., Intel Corporation, Microsoft Corporation,
Netscape Communications Corporation and PictureTel Corporation, have
significantly longer operating histories and/or significantly greater
managerial, financial, marketing, technical and other competitive resources,
as well as greater name recognition, than the Company. As a result, the
Company's competitors may be able to adapt more quickly to new or emerging
technologies and changes in customer requirements or may be able to devote
greater resources to the promotion and sale of their products and services.
There can be no assurance that the Company will be able to compete
successfully with existing or new competitors. In addition, competition could
increase if new companies enter the market or if existing competitors expand
their service offerings. An increase in competition could result in material
price reductions or loss of market share by the Company and could have a
material adverse effect on the Company's business, financial condition and
results of operations.

To remain competitive, the Company will need to continue to invest in
research and development and sales and marketing. There can be no assurance
that the Company will have sufficient resources to make such investments or
that the Company will be able to make the technological advances necessary to
remain competitive. In addition, current and potential competitors have
established or may in the future establish collaborative relationships among
themselves or with third parties, including third parties with whom the
Company has a relationship, to increase the visibility and utility of their
products and services. Accordingly, it is possible that new competitors or
alliances may emerge and rapidly acquire a significant market share. Such an
eventuality could have a material adverse effect on the Company's business,
financial condition and results of operations.

GOVERNMENT REGULATION

The Telecommunications Act of 1996, which was enacted in February 1996,
purports to impose criminal liability on (i) any person that sends or displays
in a manner available to minors indecent or patently offensive material on an
interactive computer service such as the Internet and (ii) any entity that
knowingly permits facilities under its control to be used for such activities.
In June 1996, a special three-judge panel in federal district court found
these provisions unconstitutional and issued a preliminary injunction against
their enforcement. The U.S. Department of Justice has appealed this decision
to the U.S. Supreme Court. If these provisions are upheld or if similar
provisions are enacted in the future, they may inhibit the growth or use of
the

42
<PAGE>

Internet and chill the development of Internet content, thereby decreasing the
demand for the Company's Internet videoconferencing products or otherwise
having a material adverse effect on the Company's business, financial
condition and results of operations.

In March 1996, the America's Carriers Telecommunication Association
("ACTA"), a group of telecommunications common carriers, filed a petition (the
"ACTA Petition") with the Federal Communications Commission (the "FCC"),
arguing that providers (such as the Company) of computer software products
that enable voice transmission over the Internet (Internet "telephone"
services) are operating as common carriers without complying with various
regulatory requirements and without paying certain charges required by law.
The ACTA Petition argues that the FCC has the authority to regulate both the
Internet and the providers of Internet "telephone" services and requests that
the FCC declare its authority over interstate and international
telecommunications services using the Internet, initiate rulemaking
proceedings to consider rules governing the use of the Internet for the
provision of telecommunications services, and order providers of Internet
"telephone" software to immediately cease the sale of such software pending
such rulemaking. Certain parties have filed comments with the FCC regarding
the ACTA Petition. The Company is unable to predict the outcome of this
proceeding. Any action by the FCC to grant the relief sought by ACTA or
otherwise to regulate use of the Internet as a medium of communication,
including any action to permit local exchange carriers to impose additional
charges for connections used for Internet access, could have a material
adverse effect on the Company's business, financial condition and results of
operations.

PROPRIETARY RIGHTS

The Company's videoconferencing products, Enhanced CU-SeeMe and the White
Pine Reflector, are commercial versions of Freeware CU-SeeMe and its related
server. Freeware CU-SeeMe and its related server were developed by Cornell
Information Technologies, a research institute at Cornell University, and are
freely available on the Web. In June 1995, the Company and the Cornell
Foundation entered into an Exclusive Software License Agreement (the "License
Agreement") that granted to the Company the exclusive worldwide right to
develop, modify, market, distribute and sublicense commercial versions of
Freeware CU-SeeMe and its related server, as well as the rights to appoint
licensee distributors and to use the trademark "CU-SeeMe." The License
Agreement requires that the Company pay royalties based on the Company's net
revenue from its commercial versions of Freeware CU-SeeMe and its related
server (subject to certain minimum per-copy royalties) and share sublicensing
income with the Cornell Foundation. The License Agreement also requires that
the Company make certain annual minimum royalty payments, including minimum
payments based on royalties from sublicenses. As of the date of this
Prospectus, the Company has not paid the minimum amount payable with respect
to sublicensing royalties for the period from June 1, 1995 through November
30, 1996. There can be no assurance that the Company will meet its royalty
obligations for the current license period or any subsequent license year.
Under the License Agreement, the Company issued to the Cornell Foundation the
Cornell Warrant, which is exercisable to purchase 20,000 shares of Common
Stock at an exercise price of $3.00 per share. The License Agreement has an
initial term expiring December 1, 1998 and renews automatically for periods of
one year unless and until terminated by either party for "cause" or by the
Company for convenience. For purposes of the License Agreement, "cause" means
failure by the Company to pay any amount due under the License Agreement
(including the failure by the Company to pay the minimum amount payable with
respect to sublicensing royalties for the period from June 1, 1995 through
November 30, 1996), if not cured within 30 days of written notice of such
failure to pay, or any material breach of the License Agreement by either
party, if not cured within 90 days of written notice of such breach. "Material
breach" includes failure to exercise due diligence to develop, manufacture and
market commercial versions of Freeware CU-SeeMe and its related server,
failure to grant sublicenses as required by the License Agreement, failure to
maintain quality control over the Company's commercial versions of Freeware
CU-SeeMe and its related server, and failure to develop and exploit the market
to the extent necessary to meet the Company's minimum royalty obligations
under the License Agreement. The failure of the Company to meet certain
staffing, product introduction and sublicensing obligations will permit the
Cornell Foundation to terminate the exclusivity provisions of the License
Agreement.

As part of the License Agreement, the Cornell Foundation, acting through
Cornell Information Technologies, and the Company agreed to provide technical
support to each other to maintain the compatibility

43
<PAGE>

and interoperability of Freeware CU-SeeMe and Enhanced CU-SeeMe and their
respective servers. The Cornell Foundation and Cornell University are entitled
to use any portion of the source code of the Company's commercial versions of
Freeware CU-SeeMe and its related server that may be necessary to maintain
basic compatibility and interoperability with Freeware CU-SeeMe and such
server. The Company must provide to the Cornell Foundation and Cornell
University, at no cost, all information required to maintain such
compatibility and interoperability.

Under the terms of the License Agreement, the Company also agreed to offer
sublicenses to the source code of Freeware CU-SeeMe and its related server for
a nominal fee, provided that any sublicensee agrees (i) to distribute only
executable versions of Freeware CU-SeeMe and its related server, (ii) to
realize no profit or gain, either directly or indirectly, from the use or
distribution of Freeware CU-SeeMe or its related server, (iii) to grant each
of the Company and the Cornell Foundation, at no cost, a royalty-free,
perpetual, irrevocable, unrestricted license to use modifications and
enhancements to Freeware CU-SeeMe and its related server developed and
distributed by the sublicensee, as well as related documentation, and (iv) to
freely distribute on the Internet the executable code for Freeware CU-SeeMe
and its related server as modified by the sublicensee. Moreover, the Company
agreed to permit third parties to use unmodified source code of Freeware CU-
SeeMe and its related server for the development, manufacture and marketing of
commercial products in executable code form that incorporate unmodified or re-
engineered versions of Freeware CU-SeeMe or its related server, subject to
reasonable licensing terms.

Under the terms of the License Agreement, the Cornell Foundation retained
the right on behalf of Cornell University to issue licenses and maintenance
and other releases of Freeware CU-SeeMe and its related server to third
parties as not-for-profit freeware. The Cornell Foundation and Cornell
University may also use any portion of Freeware CU-SeeMe and its related
server to develop commercial products and services to be licensed to others,
provided that those products and services do not compete directly with the
Company's commercial versions of Freeware CU-SeeMe and its related server. See
"Risk Factors--Dependence Upon License Agreement; Limited Proprietary
Protection" and "--Dependence Upon Third-Party Software."

EMPLOYEES

At September 30, 1996, the Company had 124 employees, including 43 in
research and development, 41 in sales and marketing, 17 in technical support,
19 in general and administrative and 4 in software manufacturing. Twenty-three
of these employees were located in France and, in accordance with applicable
law, were represented by a labor union. The Company's remaining employees were
located in the United States and were not represented by any labor
organization. The Company has experienced no work stoppages and believes that
its relations with its employees are good.

FACILITIES

The Company's principal offices are located in Nashua, New Hampshire. In May
1996, the Company entered into a five-year lease, effective August 1, 1996,
for facilities in Nashua, New Hampshire with approximately 27,000 square feet
of office space. The Company also leases office space in San Jose, California
and LaGaude, France. The Company believes that its facilities are adequate for
its needs and that suitable additional or substitute space will be available
as needed. The Company also believes that its properties are adequately
covered by insurance.

LEGAL PROCEEDINGS

The Company is a defendant in 13 lawsuits pending in New York federal and
state courts (the "RSI Suits") in which the plaintiffs claim to suffer from
carpal tunnel syndrome, or "repetitive stress injuries," as a result of having
used computer keyboards (the "Keyboards") that are alleged to have been
defectively designed. The Keyboards were supplied, and possibly designed and
manufactured, by Ontel Corporation. The assets of Ontel Corporation were
purchased in 1982 by Visual Technology, Inc. ("Visual"), a predecessor of
Visual T.I., Inc. ("VTI"), which in turn is a predecessor of the Company. See
"The Company." The RSI Suits, which seek money damages, were brought from
February 1992 to June 1996 by employees of New York Telephone, which purchased
the Keyboards from Lockheed Electronics Corporation. One or more of Visual,
Ontel Corporation, Lockheed Electronics Corporation and Key Tronics
Corporation, a subcontractor for certain of the Keyboards, are named as co-
defendants in certain

44
<PAGE>

of the RSI Suits. New York Telephone employees have also commenced 38 suits
that name as defendants only Visual and/or Ontel Corporation. The Company
could be named as a defendant in these cases. None of the RSI Suits has
reached trial and additional information detrimental to the Company could be
developed in the course of discovery.

In May 1993, VTI's product liability coverage terminated. Certain of the RSI
Suits appear to be based on claims that allegedly arose after May 1993, and
therefore may be uninsured. The insurers for VTI, the Company and others (the
"Insurers") are defending the RSI Suits under a reservation of rights. To
date, the Company's proportionate share of the defense costs of the RSI Suits
has not been material. There can be no assurance, however, that the Company
will not incur material legal expenses defending the RSI Suits. The Company
has established a reserve of approximately $300,000 in connection with the RSI
Suits, based upon the Company's belief that (i) certain of the RSI Suits are
covered by product liability insurance, (ii) the Company is contractually
indemnified by Lockheed Electronics Corporation and/or Key Tronics Corporation
against all or a portion of the damages to which the Company may be subject
and (iii) the Company has defenses to substantially all of the claims under
the RSI Suits. Although the Company believes that its reserve for the RSI
Suits is adequate, there can be no assurance that the Company's liabilities
under the RSI Suits will not substantially exceed that reserve. New York
Telephone and others may continue to use certain of the Keyboards and,
accordingly, there can be no assurance that additional product liability
claims will not be asserted against the Company in the future.

From time to time, the Company has received and may receive in the future
notice of claims of infringement of other parties' proprietary rights.
Although the Company believes that its products and technology do not infringe
the proprietary rights of others, there can be no assurance that additional
third parties will not assert infringement and other claims against the
Company or that any infringement claims will not be successful. See "Risk
Factors--Dependence Upon License Agreement; Limited Proprietary Protection."

From time to time, the Company may be exposed to litigation arising out of
its products, services and operations. As of the date of this Prospectus, the
Company is not engaged in any legal proceedings of a material nature, other
than the RSI Suits.

45
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company and their ages as of
October 3, 1996 are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Howard R. Berke......... 41 Chairman, President, Chief Executive Officer and
Director
Richard M. Darer........ 43 Chief Financial Officer and Vice President of
Administration
Killko A. Caballero..... 37 Senior Vice President of Research and Development,
Chief Technology Officer and Director
David O. Bundy.......... 38 Vice President of Engineering
Jack A. Dutzy........... 52 Vice President of Sales, Americas
Carl A. Koppel.......... 46 Vice President of Sales, International
Brian L. Lichorowic..... 35 Vice President of Marketing
Arthur H. Bruno(1)(2)... 62 Director
Jonathan G. Morgan(1)... 42 Director
Pierre-Gabriel 54 Director
Vallee(2)..............
</TABLE>
- --------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee

HOWARD R. BERKE has been the President and Chief Executive Officer of the
Company since January 1994 and has also served as the Chairman and a director
of the Company since February 1994. Mr. Berke served as the President and
Chief Executive Officer of Grafpoint, a software company, from April 1992 to
December 1993. Mr. Berke was a founder of Rehabilitation Technologies, Inc., a
medical products company, and served as its Executive Vice President from June
1988 to April 1992. Mr. Berke received an M.B.A. from the University of
Chicago and a B.A. from Yale University.

RICHARD M. DARER joined the Company in May 1996 as Chief Financial Officer
and Vice President of Administration. Mr. Darer served as Vice President,
Treasurer and Controller of Sequoia Systems, Inc., a computer systems company,
from January 1996 to May 1996, and Corporate Controller from July 1994 to
December 1995. From 1982 to 1994, Mr. Darer held several positions in
financial management at Computervision Corporation, a CAD/CAM software and
services company, the most recent of which was the Controller of the
Computervision Group. Mr. Darer received an M.B.A. from the Harvard Graduate
School of Business Administration, an M.S. from Northeastern University and a
B.S. from the Polytechnic Institute of Brooklyn.

KILLKO A. CABALLERO has been a director of the Company and has served as the
Company's Senior Vice President of Research and Development and Chief
Technology Officer since November 1995. Mr. Caballero was a co-founder of ASC
and served as its President, Chief Executive Officer and Chairman of the Board
from July 1991 until he joined the Company. Mr. Caballero received a B.A. in
computer science from the University of Geneva and a degree in mechanical
engineering from the Engineering School of Geneva, Switzerland.

DAVID O. BUNDY has served as the Company's Vice President of Engineering
since January 1994. Mr. Bundy was the Vice President and Principal Engineer of
the Company (then known as Visual International, Inc.) from August 1993 to
December 1993, of Visual T.I., Inc. from September 1991 until it merged into
Visual International, Inc. in August 1993, and of Visual Technology, Inc. from
September 1988 until it merged with Visual T.I., Inc. in September 1991.

JACK A. DUTZY joined the Company in October 1995 as Vice President of
Marketing and Strategic Sales and was elected Vice President of Sales,
Americas in July 1996. Mr. Dutzy served as Director of Sales-- Americas of
Proteon, Inc., a networking company, from January 1987 to July 1992 and as its
Director of Sales and Marketing--Americas from April 1994 to April 1995. From
July 1992 to December 1992, Mr. Dutzy served as Vice President of Sales and
Marketing of Microtouch Systems, Inc., a touch screen company. Mr. Dutzy
received a B.S. in Physics from Michigan State University.

<PAGE>

CARL A. KOPPEL has served as the Company's Vice President of Sales,
International since July 1996. Mr. Koppel served as the Company's Vice
President of Sales from November 1995 to July 1996 and as Director of
International Sales from April 1994 to October 1995. Mr. Koppel served as Vice
President of International Sales and Marketing for Grafpoint from September
1992 until he joined the Company. Mr. Koppel served as President of U.S.
operations of JSB Corporation, a computer software company headquartered in
the United Kingdom, from July 1991 to September 1992. Mr. Koppel received a
B.Sc. in Electrical Engineering from the Strathclyde University in Scotland.

BRIAN L. LICHOROWIC joined the Company in August 1996 as Vice President of
Marketing. From January 1996 to August 1996, Mr. Lichorowic served as
Executive Director Strategic Alliance for CyberCash Inc., a company
specializing in secure Internet transactions. Mr. Lichorowic was a co-founder
of InterCon Systems Corporation, a wholly owned subsidiary of PSINet Inc. that
specializes in software and Internet services, and served as its Vice
President of Marketing from January 1991 to December 1995. Mr. Lichorowic
received a B.A. in Business Administration from Boston University and an
M.B.A. from Lynn University.

ARTHUR H. BRUNO has served as a director of the Company since February 1994.
Mr. Bruno is the Chairman, President and Chief Executive Officer of Castelle,
a networking and telecommunications company, positions that he has held since
October 1993. Since July 1991, Mr. Bruno has served as a Vice President of and
consultant to Hambrecht & Quist LLC, a venture capital company. From 1991 to
1993, Mr. Bruno served as the Company's Chairman and Chief Executive Officer.

JONATHAN G. MORGAN has served as a director of the Company since May 1996.
Since June 1993, Mr. Morgan has been Managing Director/Group Head of
Investment Banking-Technology of Prudential Securities Incorporated, an
investment banking firm. From June 1992 to June 1993, Mr. Morgan was Managing
Director/Group Head of Corporate Finance of the San Francisco office of Sutro
& Co., Inc., an investment banking firm. From January 1992 to June 1992, he
acted as an independent financial consultant and from May 1985 to January 1992
he served as the Managing Director/Head of Mergers and Acquisitions of
Montgomery Securities, an investment banking firm.

PIERRE-GABRIEL VALLEE has served as a director of the Company since May
1994. Since December 1994, Mr. Vallee has been acting as Managing Director of
Innolion SA, a subsidiary of the French bank Credit Lyonnais. From 1991 to
1993, Mr. Vallee was Chairman of Opindus/Speic, a group of companies in the
mechanical engineering field. Mr. Vallee holds degrees from L'Ecole Nationale
Superieure des Arts et Metiers, L'Institute d'Etudes Politiques Paris and
L'Institut de Haute Finance.

Executive officers of the Company are appointed by and serve at the
discretion of the Board of Directors. Directors of the Company are elected to
serve until the next annual meeting of stockholders (or special meeting in
lieu thereof) and until their successors are duly elected and qualified.

The Board of Directors has a Compensation Committee, which provides
recommendations concerning salaries and incentive compensation for directors,
officers and employees of and consultants to the Company, and an Audit
Committee, which reviews the results and scope of the audit and other services
provided by the Company's independent auditors.

The Company does not pay fees to members of the Board of Directors and
presently has no plans to pay directors' fees. On July 18, 1996, the Company
granted Mr. Morgan a nonqualified option to purchase 5,000 shares of Common
Stock at an exercise price of $6.00 per share.

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning the
compensation earned by the Company's Chief Executive Officer and the other two
executive officers whose compensation for services rendered in all capacities
to the Company was in excess of $100,000 for the fiscal year ended December
31, 1995 (collectively, the "Named Executive Officers").

47
<PAGE>

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------
NAME AND PRINCIPAL POSITION(S) SALARY($) BONUS($)
- ------------------------------ ---------- ---------
<S> <C> <C>
Howard R. Berke....................................... $ 148,433 $ 50,000
President and Chief Executive Officer
David O. Bundy........................................ 109,661 20,000
Vice President of Engineering
Carl A. Koppel........................................ 104,616(1) 5,000
Vice President of Sales, International
</TABLE>
- --------
(1)Includes $46,843 earned as commissions.

BENEFIT PLANS

Option Grants

During the fiscal year ended December 31, 1995, the Company did not grant
any stock options to Named Executive Officers. In each of February 1996 and
May 1996, the Company granted Mr. Bundy options to purchase 5,000 shares of
Common Stock at exercise prices of $2.50 and $5.00 per share, respectively.

Option Exercises and Year-End Value Table

The following table sets forth certain information with respect to the
exercise of stock options by the Named Executive Officers during 1995 and the
number and value of unexercised options held by the Named Executive Officers
on December 31, 1995. No options were exercised by any of the Named Executive
Officers during the fiscal year ended December 31, 1995.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1995(#) DECEMBER 31, 1995($)(1)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
<S> <C> <C>
Howard R. Berke............. 139,378/ 69,689 $1,115,024/$557,512
David O. Bundy.............. 27,917/ 7,083 $ 233,336/$ 56,664
Carl A. Koppel.............. 23,432/ 7,955 $ 187,456/$ 63,640
</TABLE>
- --------
(1) There was no public trading market for the Common Stock on December 31,
1995. Accordingly, solely for purposes of this table, the values in these
columns have been calculated on the basis of an assumed initial public
offering price of $9.00 per share (rather than a determination of the fair
market value of the Common Stock on December 31, 1995), less the aggregate
exercise price of the options.

Stock Option Plans

In each of 1992, 1993, 1994, 1995 and 1996, the Board of Directors of the
Company adopted a Stock Option Plan (collectively, the "Prior Option Plans"),
each of which was approved by the stockholders of the Company. Options may no
longer be granted under the Prior Option Plans. In addition, in July 1996 the
Company's Board of Directors adopted, and its stockholders subsequently
approved, the White Pine Software, Inc. 1996 Incentive and Nonqualified Stock
Option Plan (the "1996 Option Plan"), under which a total of 550,000 shares of
Common Stock were reserved for issuance, provided that prior to the closing of
this offering the Board of

48
<PAGE>

Directors may not grant options to purchase more than 200,000 shares of Common
Stock under the 1996 Option Plan. As of October 3, 1996, options to purchase
an aggregate of 1,006,585 shares of Common Stock having a weighted average
exercise price of $1.80 per share were outstanding under the Prior Option
Plans, the 1996 Option Plan or otherwise, and options to purchase 36,873
shares of Common Stock had been exercised under the Prior Option Plans.

The 1996 Option Plan is administered by the Compensation Committee. Under
the 1996 Option Plan, the Compensation Committee selects the individuals to
whom options will be granted and determines the option exercise price and
other terms of each option, subject to the provisions of the 1996 Option Plan.

The 1996 Option Plan authorizes the grant of options to purchase Common
Stock intended to qualify as incentive stock options ("Incentive Options"), as
defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the grant of options that do not so qualify ("Nonqualified
Options"). Under the 1996 Option Plan, Incentive Options may be granted only
to officers and other employees of the Company or a subsidiary, including
members of the Board of Directors who are also employees of the Company or a
subsidiary. Nonqualified Options may be granted to officers or other employees
of the Company or a subsidiary, to members of the Board of Directors or the
board of directors of a subsidiary, whether or not employees of the Company or
a subsidiary, and to consultants and other individuals providing services to
the Company or a subsidiary.

Payment of the exercise price for shares purchased upon exercise of options
under the 1996 Option Plan may be made (i) in cash or by check, bank draft or
money order payable to the Company, (ii) in certain circumstances, through the
delivery of shares of Common Stock (which, in the case of shares acquired from
the Company upon exercise of an option, have been outstanding for at least six
months) having a fair market value equal to the purchase price, (iii) by
delivery of an unconditional and irrevocable undertaking by a broker to
deliver promptly to the Company sufficient funds to pay the purchase price,
(iv) in certain circumstances, through the delivery of a promissory note or
(v) by any combination of these permissible forms of payment. In the event
that payment of the exercise price is made under (ii) above, the 1996 Option
Plan permits the Compensation Committee to grant an automatic reload option to
purchase the number of shares surrendered at an exercise price equal to the
fair market value of the Common Stock on the date of such surrender.

The 1996 Option Plan provides that, upon a reorganization, merger,
consolidation, liquidation or sale of substantially all of the assets of the
Company (each, a "Transaction"), the Compensation Committee may accelerate the
time for exercise of all unexercised and unexpired options to and after a date
prior to the effective date of the Transaction. Alternatively, the
Compensation Committee may cancel any outstanding options as of the effective
date of the Transaction, provided that the Compensation Committee shall have
accelerated the time for exercise of all unexercised and unexpired options
that it proposes to cancel and shall have given each optionholder notice of
and a right to exercise such options in full. If the Compensation Committee
does not take either of the foregoing actions, then after the effective date
of the Transaction unexercised options shall remain outstanding and shall be
exercisable for shares of Common Stock or, if applicable, shares of such stock
or other securities, cash or property as the holders of shares of Common Stock
shall have received in the Transaction.

The Prior Plans provide that the Board may provide for immediate vesting of
options in the event of a proposed sale of all or substantially all of the
assets of the Company, or a merger or consolidation of the Company with or
into another corporation, a liquidation, or a change in control. If the Board
of Directors determines that immediate vesting is not appropriate, then, if
the event is a merger or consolidation, the options must be assumed or an
equivalent option must be substituted by such successor corporation as a
condition to the completion of the transaction. In addition, if within 12
months after the completion of the transaction the optionee is terminated as a
result of actual or constructive discharge for any reason other than cause, as
defined in the Prior Plans, by the Company or its successor, such optionee's
option shall vest immediately and be fully exercisable (subject to certain
limitations for incentive stock options) for the shorter of (i) two years
(five years under the 1992 Stock Option Plan), in the case of a nonqualified
option, and 90 days, in the case of an incentive option, from the date of
termination or (ii) the remaining term of the option.

49
<PAGE>

Stock Purchase Plan

In July 1996, the Board of Directors adopted, and the Company's stockholders
approved, the Company's 1996 Employee Stock Purchase Plan (the "Stock Purchase
Plan"), under which up to 100,000 shares of Common Stock may be purchased by
employees of the Company. The Stock Purchase Plan will become effective upon
the closing of this offering.

During each six-month offering period under the Stock Purchase Plan,
participating employees are entitled to purchase shares through payroll
deductions. The maximum number of shares that may be purchased will be
determined on the first day of the offering period pursuant to a formula under
which a specific percentage of the employee's projected base pay for the
offering period is divided by 85% of the market value of one share of Common
Stock on the first day of the offering period, multiplied by two. During each
offering period, the price at which the employee will be able to purchase
shares of Common Stock will be 85% of the last trading price of the Common
Stock on the Nasdaq National Market on the date that the offering period
commences or the date the offering period concludes, whichever is lower.

The Stock Purchase Plan is administered by the Compensation Committee. All
employees who meet certain minimum criteria based on hours worked per week and
length of tenure with the Company are eligible to participate in the Stock
Purchase Plan. No employee may be granted an option under the Stock Purchase
Plan (i) if the employee is an officer who is a "highly compensated employee"
under the Code, (ii) if the option would permit the employee's rights to
purchase stock under the Stock Purchase Plan (and any similar plan of the
Company or a subsidiary) to exceed $25,000 of the fair market value of the
stock for each calendar year in which such option is outstanding or (iii) if,
immediately after the grant, the employee would own stock possessing three
percent or more of the total combined voting power or value of all classes of
stock of the Company or any subsidiary.

EMPLOYMENT AGREEMENTS

On January 3, 1994, the Company entered into an agreement with Howard R.
Berke, whereby Mr. Berke agreed to serve as the President and Chief Executive
Officer of the Company. The initial term of the agreement ended on January 3,
1996, but the agreement automatically renews for successive two-year periods
unless it is terminated by either party with at least 30 days' prior written
notice. Pursuant to the agreement, Mr. Berke receives a base salary of
$165,000, which is reviewed annually, and is entitled to receive an incentive
bonus of up to 50% of his base compensation, based upon goals established by
the Board of Directors and other performance measures determined in the
discretion of the Board of Directors. Pursuant to the agreement, Mr. Berke was
granted a stock option to purchase 209,067 shares of Common Stock at an
exercise price of $1.00 per share. If Mr. Berke's employment is terminated
without cause, Mr. Berke will be entitled to a pro rata portion of (i) his
incentive bonus earned though the termination date and (ii) his salary for six
months or until he becomes employed elsewhere, whichever occurs first; if his
new salary is lower than his base salary at the Company, however, the Company
will pay the difference for the balance of this six-month period. If his
employment is terminated with cause, he is entitled to receive 15 days'
salary. Pursuant to an amendment to the agreement, the Company reimbursed Mr.
Berke for $79,812 in moving and temporary accommodation expenses in December
1994. Mr. Berke is entitled to participate in all employee benefits, including
health, vision, dental and retirement plans, that the Company provides to its
employees generally. The agreement provides that Mr. Berke will not directly
or indirectly compete with the Company or solicit its employees, customers or
prospective customers on behalf of himself or any entity that engages in any
business involving the sale, distribution, development or research concerning
computer software in breach of the agreement during the term of the agreement
and for a period of one year following the date of the termination of his
employment.

The Company entered into a Nondisclosure and Noncompetition Agreement with
David O. Bundy dated February 15, 1996. Pursuant to the agreement, Mr. Bundy
agreed that while employed by the Company and for a period of 18 months
following the termination of his employment with the Company for any reason,
he will not, directly or indirectly, compete with the Company or solicit any
of the Company's employees, contractors,

50
<PAGE>

suppliers, existing customers or prospective customers on behalf of himself or
any other entity that engages in the sale, distribution or development of or
research concerning computer software and technology in breach of the
agreement. Either party may terminate the agreement by giving the other party
30 days' prior written notice. If Mr. Bundy's employment is terminated without
cause during the term of the agreement, he will be entitled to his base salary
for six months or until he becomes employed elsewhere, whichever occurs first;
provided, however, that if his new salary is lower than his base salary at the
Company, the Company will pay the difference for the balance of this six-month
period. Pursuant to the agreement, Mr. Bundy was granted a stock option to
purchase 5,000 shares of Common Stock at an exercise price of $2.50 per share.

On October 10, 1995, the Company entered into a two-year employment
agreement with Killko A. Caballero, whereby Mr. Caballero agreed to serve as
Senior Vice President of Product Development and Chief Technical Officer of
the Company. Pursuant to the agreement, Mr. Caballero receives a base salary
of $100,000, which is reviewed annually, and is eligible to receive an annual
fiscal year incentive bonus with a maximum annual amount of $20,000. During
the first year of the agreement, Mr. Caballero is guaranteed to receive one-
half of the incentive bonus. He is entitled to participate in all employee
benefits, including health, vision, dental and retirement plans, that the
Company provides to its employees generally. If Mr. Caballero's employment is
terminated without cause during the first two years of the term of the
agreement, Mr. Caballero will be entitled to (i) a pro rata portion of his
incentive bonus earned through the termination date and (ii) his salary for
six months or until he becomes employed elsewhere, whichever occurs first;
provided, however, that if his new salary is lower than his base salary at the
Company, the Company will pay the difference for the balance of this six-month
period. During the second year of the agreement, if Mr. Caballero's employment
is terminated without cause and (i) he is entitled to some payment of base
salary and incentive bonus and (ii) he is unable to secure employment in the
United States within ninety days and this results in his deportation, the
Company shall pay him $10,000 in relocation fees. The agreement provides that
Mr. Caballero will not directly or indirectly compete with the Company or
solicit its employees, customers or prospective customers on behalf of himself
or any entity that engages in any business involving the sale, distribution,
development or research concerning computer software in breach of the
agreement during the term of the agreement and for a period of one year
following the date of his termination.

51
<PAGE>

CERTAIN TRANSACTIONS

In December 1995, in connection with the Company's purchase of all of the
outstanding shares of ASC, the Company agreed to issue 403,325 shares of its
Common Stock to Killko A. Caballero, a director and the Senior Vice President
of Research and Development and Chief Technology Officer of the Company, in
exchange for 7,904 shares of ASC. In the same transaction, the Company agreed
to issue an aggregate of 766,286 shares of Common Stock to Sofinnova S.A.,
Sofinnova Capital FCPR, and CV Sofinnova Ventures Partners II (together, the
"Sofinnova Entities"), which own beneficially more than 5% of the outstanding
shares of Common Stock of the Company, in exchange for an aggregate of 15,017
shares of ASC. Approximately 10% of the shares issuable to each of Mr.
Caballero and the Sofinnova Entities have not been issued but are issuable on
or before December 15, 1996 upon the expiration of certain indemnification
arrangements under the Acquisition Agreement dated October 10, 1995.

Pursuant to a stock purchase agreement dated March 19, 1996, the Company
sold 343,053 shares of $5.83 Stock at a purchase price of $5.83 per share to
six entities associated with Advent International Corporation (the "Advent
Group"), which own beneficially more than 5% of the outstanding shares of
Common Stock of the Company, for an aggregate purchase price of approximately
$2.0 million. Pursuant to the Company's amended and restated certificate of
incorporation, each share of $5.83 Stock will automatically convert into one
share of Common Stock upon the closing of this offering.

In March 1996, all of the Company's stockholders who currently own
beneficially more than five percent of the outstanding shares of Common Stock,
Arthur H. Bruno, a director of the Company, and all of the current executive
officers of the Company other than Richard M. Darer entered into an agreement
with the Company and certain other stockholders of the Company (the
"Shareholders' Agreement") pursuant to which the parties to the agreement were
granted a right of participation in and a right of first refusal with respect
to certain sales of shares by certain management stockholders. The parties to
the Shareholders' Agreement were also granted a preemptive right to purchase
all or part of their pro rata shares of New Securities (as defined in the
Shareholders' Agreement) issued by the Company. In addition, the Advent Group
was given the right to have a representative attend all meetings of the
Company's Board of Directors in a non-voting capacity, provided that the
Advent Group continues to own at least 50% of the original number of shares of
the Company held by it as of the date of the agreement. The Shareholders'
Agreement was amended in July 1996 to provide that it shall terminate
immediately prior to the consummation of an underwritten public offering by
the Company in which the aggregate net proceeds to the Company equal at least
$12 million and in which the public offering price per share of Common Stock
equals or exceeds $6.00 (a "Qualified Public Offering").

Pursuant to the Shareholders' Agreement, the parties to the Shareholders'
Agreement entered into a Designation and Election of Directors agreement
whereby the parties agreed to vote all the shares of the Company's stock held
by them so as to fix the number of the directors of the Company at five and to
elect to the Board of Directors of the Company the following individuals: (i)
one member designated by certain affiliates of Hambrecht & Quist; (ii) the
President of the Company; (iii) one member designated by Innolion S.A. and
Land Free Investment; (iv) one member collectively elected by the former
stockholders of White Pine Software, Inc., a New Hampshire corporation, the
former Grafpoint stockholder and the former ASC stockholders pursuant to the
terms of a certain Election Procedures to Stockholders' Voting Agreement among
such stockholders dated October 10, 1995; and (v) one outside Board member
designated by the majority vote of the other four designated directors and the
Sofinnova Entities. The directors initially designated pursuant to this
agreement are Arthur H. Bruno, Howard R. Berke, Pierre-Gabriel Vallee and
Killko A. Caballero. A representative of the Sofinnova Entities served as the
fifth director until Jonathan G. Morgan, an outside director, was elected in
May 1996. In addition, the Sofinnova Entities were granted the right to have a
representative attend all meetings of the Company's Board of Directors in a
non-voting capacity as long as they hold at least 50% of the shares owned by
them as of December 15, 1995. This agreement terminates upon termination of
the Shareholders' Agreement.

On January 31, 1996, the Company entered into a Software License Agreement
with Voxware, Inc. ("Voxware"), whereby the Company licenses Voxware's voice
compression technology. The Advent Group, which owns beneficially more than 5%
of the outstanding Common Stock of the Company, owns beneficially
approximately 10% of the outstanding stock of Voxware.

For a description of certain employment and other arrangements between the
Company and its executive officers, see "Management--Executive Compensation"
and "--Employment Agreements." For a description of certain registration
rights agreements between the Company and certain executive officers and
stockholders, see "Description of Capital Stock--Registration Rights."

52
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of Common Stock as of July 25, 1996, and as adjusted to
reflect the sale of the shares of Common Stock offered by this Prospectus, by
(i) each person (or group of affiliated persons) known by the Company to own
beneficially more than five percent of the outstanding shares of Common Stock,
(ii) each of the directors of the Company, (iii) each of the Named Executive
Officers and (iv) all directors and executive officers of the Company as a
group:

<TABLE>
<CAPTION>
SHARES PERCENT BENEFICIALLY OWNED(2)
BENEFICIALLY --------------------------------
NAME AND ADDRESS(1) OWNED PRIOR TO OFFERING AFTER OFFERING
- ------------------- ------------ ----------------- --------------
<S> <C> <C> <C>
Arthur H. Bruno(3).............. 1,540,358 25.2% 16.9%
Hambrecht & Quist Group(4)...... 1,405,234 23.3% 15.6%
One Bush Street
San Francisco, California 94104
Innolion/LandFree 920,330 15.3% 10.2%
Investment(5)..................
57 Rue Saint Roch
Paris, France 75001
Pierre-Gabriel Vallee(6)........ 920,330 15.3% 10.2%
Sofinnova Entities(7)........... 766,286 12.7% 8.5%
51 Rue Saint Georges
Paris, France 75009
Charles Lingel.................. 595,840 9.9% 6.6%
c/o Infoconix, Inc.
704 228th Avenue, N.E.
Suite 414
Redmond, WA 98053
Killko A. Caballero(8).......... 403,325 6.7% 4.5%
Advent Group(9)................. 343,053 5.7% 3.8%
101 Federal Street
Boston, Massachusetts 02110
Howard R. Berke(10)............. 191,644 3.1% 2.1%
David O. Bundy(11).............. 34,338 * *
Carl A. Koppel(12).............. 25,971 * *
Jonathan G. Morgan.............. -- * *
All directors and executive 3,126,938 49.2% 33.4%
officers as a group (10
persons)(13)...................
</TABLE>
- --------
* Represents less than 1% of the outstanding shares of Common Stock.
(1) The address of all persons who are executive officers or directors of the
Company is in care of the Company, 542 Amherst Street, Nashua, New
Hampshire 03063.
(2) Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to such shares, subject to
community property laws, where applicable. Shares not outstanding but
deemed beneficially owned by virtue of the right of a person or group to
acquire them within 60 days of July 25, 1996 are treated as outstanding
only for purposes of determining the amount and percentages beneficially
owned by such person or group. The number of shares of Common Stock
deemed outstanding prior to this offering consists of (i) 5,613,359
shares of Common Stock outstanding as of July 25, 1996, (ii) 394,511
shares of Common Stock issuable at the closing of this offering upon
conversion of 394,511 shares of $5.83 Stock outstanding as of July 25,
1996 and (iii) 20,000 shares of Common Stock expected to be issued upon
exercise of the Cornell Warrant on or before the closing of this
offering. Percentages beneficially owned after the offering assume no
exercise of the Underwriters' over-allotment option.
(footnotes continued on next page)

<PAGE>

(3) Includes 1,405,234 shares held by the Hambrecht & Quist Group as
described in Note 4 and 85,000 shares subject to stock options
exercisable within 60 days of July 25, 1996. Mr. Bruno is a Vice
President of and a consultant to Hambrecht & Quist LLC. Mr. Bruno
disclaims beneficial ownership of the shares held by the Hambrecht &
Quist Group.
(4) Consists of approximately 623,167 shares held by H & Q London Ventures,
6,271 shares held by Hambrecht & Quist Group, 206,917 shares held by
shares held by H & Q Ventures IV, 206,917 shares held by H & Q Ventures
International CV, 444 shares held by H & Q Venture Partners, 76,924
shares held by William Hambrecht, 1,000 shares held by Hambrecht & Quist,
208,844 shares held by the Hambrecht 1980 Revocable Trust, 16 shares held
by Hamquist and 74,734 shares held by Phoenix Venture (BVI), Ltd.
(5) Consists of 100,000 shares held by Innolion S.A. and 820,330 shares held
by Land Free Investment. Innolion S.A. and Land Free Investment are
affiliates of Credit Lyonnais and the Consortium de Realisation
(6) Consists of shares described in Note 5. Mr. Vallee is the Managing
Director of Innolion S.A.
(7) Consists of approximately 221,767 shares held by Sofinnova S.A., 337,499
shares held by Sofinnova Capital FCPR and 207,020 shares held by C.V.
Sofinnova Ventures Partners II, of which approximately 23,285, 35,437 and
21,737 shares, respectively, are being held in escrow until December 15,
1996 pursuant to an acquisition agreement dated October 10, 1995 between
the Company and the former ASC stockholders. See "Certain Transactions."
Sofinnova S.A., a management and direct investment company, manages the
funds of Sofinnova Capital FCPR, and its wholly-owned subsidiary manages
the funds of C.V. Sofinnova Venture Partners II.
(8) Includes 42,349 shares being held in escrow until December 15, 1996
pursuant to an acquisition agreement dated October 10, 1995 between the
Company and the former ASC stockholders. See "Certain Transactions."
(9) Consists of shares held by venture capital funds managed by Advent
International Corporation, as follows: 42,882 shares held by Adwest
Limited Partnership, 102,916 shares held by Adtel Limited Partnership,
17,153 shares held by ADVENTACT Limited Partnership, 144,082 shares held
by Golden Gate Development and Investment Limited Partnership, 857 shares
held by Advent International Investors II Limited Partnership and 35,163
shares held by Advent Partners Limited Partnership. Advent International
Limited Partnership is the general partner of Adwest Limited Partnership,
Adtel Limited Partnership, ADVENTACT Limited Partnership and Golden Gate
Development and Investment Limited Partnership.
(10) Includes 171,644 shares subject to stock options exercisable within 60
days of July 25, 1996.
(11) Includes 33,333 shares subject to stock options exercisable within 60
days of July 25, 1996.
(12) Represents 25,971 shares subject to stock options exercisable within 60
days of July 25, 1996.
(13) Includes 326,920 shares subject to stock options exercisable within 60
days of July 25, 1996.

54
<PAGE>

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 15,000,000 shares of
common stock, $.01 par value per share ("Common Stock") and 500,000 shares of
common stock, $5.83 par value per share ("$5.83 Stock"). As of October 1, 1996
there were outstanding 5,613,359 shares of Common Stock held by 147 holders of
record and 394,511 shares of $5.83 Stock, held by seven holders of record.
Effective upon the closing of this offering, each share of $5.83 Stock will
automatically convert into one share of Common Stock.

Based on securities outstanding as of October 3, 1996, it is expected that
immediately after the closing of this offering, 9,027,870 shares of Common
Stock will be outstanding, together with options to acquire 1,006,585
additional shares. In addition, the Company has the right to elect to pay
$100,000 in licensing fees payable to DataBeam Corporation by no later than
March 31, 1997 by delivering either cash or a number of shares of Common Stock
equal to $100,000 divided by the initial public offering price set forth on
the cover page of this Prospectus. See "Products--Videoconferencing--Enhanced
CU-SeeMe." The Restated Charter, which will eliminate references to the $5.83
Stock, will be filed immediately after the closing of this offering, and the
Restated By-Laws will become effective upon the closing of this offering. Upon
the effectiveness of the Restated Charter, the authorized capital stock of the
Company will consist of 30,000,000 shares of Common Stock and 5,000,000 shares
of preferred stock, $.01 par value per share ("Preferred Stock"). The
description set forth below gives effect to the filing of the Restated Charter
and the adoption of the Restated By-Laws.

COMMON STOCK

Holders of Common Stock are entitled to one vote per share for each share
held of record on all matters submitted to a vote of stockholders. Holders of
the Common Stock do not have cumulative voting rights, and therefore the
holders of a majority of the shares of Common Stock voting for the election of
directors may elect all of the Company's directors standing for election.
Subject to preferences that may be applicable to the holders of outstanding
shares of Preferred Stock, if any, the holders of Common Stock are entitled to
receive such lawful dividends as may be declared by the Board of Directors. In
the event of a liquidation, dissolution or winding up of the affairs of the
Company, whether voluntary or involuntary, and subject to the rights of the
holders of outstanding shares of Preferred Stock, if any, the holders of
shares of Common Stock shall be entitled to receive pro rata all of the
remaining assets of the Company available for distribution to its
stockholders. The Common Stock has no preemptive, redemption, conversion or
subscription rights. All outstanding shares of Common Stock are, and the
shares of Common Stock to be issued pursuant to this offering will be, fully
paid and non-assessable. The issuance of Common Stock or of rights to purchase
Common Stock could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from attempting to acquire,
a majority of the outstanding voting stock of the Company.

PREFERRED STOCK

The Board is authorized, subject to any limitations prescribed by Delaware
law, to provide for the issuance of Preferred Stock in one or more series, to
establish from time to time the number of shares to be included in each such
series, to fix the voting powers, designations, preferences and relative,
participating, optional or other special rights (and the qualifications,
limitations or restrictions thereof) of the shares of each such series and to
increase (but not above the total number of authorized shares of Preferred
Stock) or decrease (but not below the number of shares of such series then
outstanding) the number of shares of any such series without further vote or
action by the stockholders. The Board is authorized to issue Preferred Stock
with voting, conversion and other rights and preferences that could adversely
affect the voting power or other rights of the holders of Common Stock.
Although the Company has no current plans to issue such shares, the issuance
of Preferred Stock or of rights to purchase Preferred Stock could have the
effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, a majority of the
outstanding voting stock of the Company.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE RESTATED CHARTER AND BY-LAWS AND OF
DELAWARE LAW

Restated Charter and By-Laws

The Restated Charter and the Restated By-Laws contain certain provisions
that could discourage potential takeover attempts and make more difficult the
acquisition of a substantial block of the Common Stock. The

55
<PAGE>

Restated Charter authorizes the directors to issue, without stockholder
approval, shares of Preferred Stock in one or more series and to fix the
voting powers, designations, preferences and relative, participating, optional
or other special rights (and the qualifications, limitations or restrictions
of such preferences and rights) of the shares of each such series. The
Restated Charter provides that stockholders may act only at meetings of
stockholders and not by written consent in lieu of a stockholders' meeting.
The Restated By-Laws provide that special meetings of the Company's
stockholders may be called by the President and must be called by the
President or the Secretary at the written request of a majority of the
directors. The Restated By-Laws also provide that nominations for directors
may not be made by stockholders at any annual or special meeting thereof
unless the stockholder intending to make a nomination notifies the Company of
its intentions a specified number of days in advance of the meeting and
furnishes to the Company certain information regarding itself and the intended
nominee. The Restated By-Laws also require a stockholder to provide to the
Secretary of the Company advance notice of business to be brought by such
stockholder before any annual or special meeting of stockholders as well as
certain information regarding such stockholder and others known to support
such proposal and any material interest they may have in the proposed
business. These provisions could delay stockholder actions that are favored by
the holders of a majority of the outstanding stock of the Company until the
next stockholders' meeting. 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 stock of the Company, could only take action at a duly called
stockholders' meeting and not by written consent.

Delaware Anti-Takeover Statute

The Company is subject to Section 203 of the Delaware General Corporation
Law which, subject to certain exceptions, prohibits a Delaware corporation
from engaging in any business combination with any interested stockholder for
a period of three years following the date that such stockholder became an
interested stockholder, unless (i) prior to such date, the board of directors
of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder; (ii)
upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (x) by persons who are directors and
also officers and (y) by employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject
to the plan will be tendered in a tender or exchange offer; or (iii) on or
subsequent to such date, the business combination is approved by the board of
directors and authorized at an annual or special meeting of stockholders, and
not by written consent, by the affirmative vote of at least two-thirds of the
outstanding voting stock which is not owned by the interested stockholder. The
application of Section 203 may limit the ability of stockholders to approve a
transaction that they may deem to be in their best interests.

Section 203 defines "business combination" to include (i) any merger or
consolidation involving the corporation and the interested stockholder; (ii)
any sale, transfer, pledge or other disposition of 10% or more of the assets
of the corporation to or with the interested stockholder; (iii) subject to
certain exceptions, any transaction which results in the issuance or transfer
by the corporation of any stock of the corporation to the interested
stockholder; (iv) any transaction involving the corporation which has the
effect of increasing the proportionate share of the stock of any class or
series of the corporation beneficially owned by the interested stockholder; or
(v) the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation. In general, Section 203 defines an "interested
stockholder" as any entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation and any entity or person
associated with, affiliated with or controlling or controlled by such entity
or person.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Restated Charter provides that no director of the Company shall be
personally liable to the Company or to any stockholder for monetary damages
arising out of such director's breach of fiduciary duty, except to the

56
<PAGE>

extent that the elimination or limitation of liability is not permitted by the
Delaware General Corporation Law. The Delaware General Corporation Law, as
currently in effect, permits charter provisions eliminating the liability of
directors for breach of fiduciary duty, except that such provisions do not
eliminate or limit the liability of directors for (i) any breach of the
director's duty of loyalty to a corporation or its stockholders, (ii) any acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) any payment of a dividend or approval of a
stock purchase that is illegal under Section 174 of the Delaware General
Corporation Law or (iv) any transaction from which the director derived an
improper personal benefit. A principal effect of this provision of the
Restated Charter is to limit or eliminate the potential liability of the
Company's directors for monetary damages arising from any breach of their duty
of care, unless the breach involves one of the four exceptions described in
(i) through (iv) above.

The Restated Charter and the Restated By-Laws further provide for the
indemnification of the Company's directors and officers to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law, including
circumstances in which indemnification is otherwise discretionary. Insofar as
indemnification for liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"), may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.

REGISTRATION RIGHTS

In connection with prior issuances of shares of the Company's Common Stock
and $5.83 Stock, the Company granted certain rights with respect to the
registration under the Securities Act of the shares of outstanding Common
Stock and the shares of Common Stock issuable upon the conversion or exercise
of any other securities owned by certain stockholders of the Company on the
date of this Prospectus. Based on securities outstanding as of October 1,
1996, it is expected that immediately after the closing of this offering, such
stockholders will hold (i) an aggregate of 5,844,974 shares of Common Stock,
consisting of (A) 5,450,463 shares of outstanding Common Stock and (B) 394,511
shares of Common Stock (the "Registrable Converted Shares") issuable upon
conversion of outstanding shares of $5.83 Stock, and (ii) options to purchase
an aggregate of 294,044 shares of Common Stock (collectively, the "Registrable
Shares").

The holders of more than 50% of the then-outstanding Registrable Converted
Shares are entitled, at any time after 120 days following the date of this
Prospectus, to request that the Company file a registration statement under
the Securities Act covering the sale of some or all of the Registrable
Converted Shares then held by such holders, provided that (i) the Company is
not required to effect more than one such demand registration, (ii) the
effective date of such registration statement shall not occur prior to the one
hundred eighty-first day after the date of this Prospectus and (iii) the
aggregate market value of the Registrable Converted Shares registered pursuant
to such request shall not exceed $2,300,000. The holders of more than 50% of
the then-outstanding Registrable Shares are entitled, at any time after 180
days following the date of this Prospectus, to request that the Company file a
registration statement under the Securities Act covering the sale of some or
all of the Registrable Shares then held by such holders, provided that the
Company is not required to effect more than one such demand registration.
Within 75 days of receipt of any such request, the Company must file a
Registration Statement with respect to such Registrable Converted Shares or
Registrable Shares, as the case may be, and must use its best efforts to cause
the offering of such shares to be registered under the Securities Act. The
underwriters (if any) of any offering of such shares have the right, subject
to certain conditions, to limit the number of Registrable Shares included in
the registration. Moreover, the Company must use its best efforts to qualify
for registration on Form S-3 (or any comparable or successor form). Once the
Company has qualified to use Form S-3 to register securities under the
Securities Act, the holders of Registrable Converted Shares shall have the
right to request an unlimited number of registrations on Form S-3, provided
that the Company is not required to register Registrable Shares having an
aggregate market value less than $1,000,000. The Company is not required to
register any Registrable Shares if in the opinion of its counsel such shares
may be sold without registration under the Securities Act in the manner and in
the quantity in which such shares were proposed to be sold.

57
<PAGE>

Each holder of Registrable Shares has agreed that, upon the request of the
Company and the managing underwriter of an offering by the Company of Common
Stock or other securities of the Company pursuant to a registration statement,
such holder shall agree not to sell publicly or otherwise transfer or dispose
of any Registrable Shares or other securities of the Company for up to 180
days following the effective date of such registration statement, provided
that all holders of Registrable Shares holding not less than the number of
shares of Common Stock held by such holder (including shares of Common Stock
issuable upon exercise or conversion of other securities) and all officers and
directors of the Company shall enter into similar agreements.

In general, all fees, costs and expenses of such registrations (other than
underwriting discounts, selling commissions and certain fees and expenses of
counsel to the selling stockholders) will be borne by the Company. The Company
and the holders of Registrable Shares have agreed to indemnify each other from
certain liabilities relating to any registration in which any Registrable
Shares are included, including liabilities arising under the Securities Act.
The Company has also undertaken that, upon the request of the underwriter of
any offering of Registrable Shares, the Company shall agree to customary
contribution provisions on the part of the Company.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Boston EquiServe
L.P.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the closing of this offering, the Company will have 9,027,870 shares of
Common Stock outstanding (assuming no exercise of options outstanding after
October 1, 1996), of which the 3,000,000 shares of Common Stock sold in this
offering (plus an additional 450,000 shares which will be outstanding if the
Underwriters' over-allotment option is exercised in full) will be freely
tradeable in the United States without restriction under the Securities Act by
persons other than "affiliates" of the Company, as defined under the
Securities Act. The remaining 6,027,870 shares of Common Stock outstanding are
"restricted securities" as defined in Rule 144 under the Securities Act (the
"Restricted Shares"). Restricted securities generally may be sold in the
public market only if registered under the Securities Act or sold in
compliance with Rule 144. Based on securities outstanding as of October 1,
1996, it is expected that after the closing of this offering the holders of
5,844,974 shares of Common Stock (plus 294,044 shares of Common Stock issuable
upon exercise of outstanding options) will have the right to cause the Company
to register the sale of such shares under the Securities Act. See "Description
of Capital Stock--Registration Rights."

SALES OF RESTRICTED SHARES

Of the Restricted Shares, 5,946,321 shares are subject to the lock-up
agreements described below. Of the Restricted Shares not subject to such lock-
up agreements, 40,824 shares will be eligible for immediate sale in the public
market on the Effective Date pursuant to Rule 144(k) under the Securities Act
and an additional 417 shares will first become eligible for sale in the public
market 90 days after the Effective Date pursuant to Rule 144, subject in
certain cases to the volume limitations and other conditions imposed by Rule
144. Upon the expiration of the lock-up agreements, 180 days after the date of
this Prospectus, an additional 3,543,100 Restricted Shares will be eligible
for sale in the public market pursuant to Rule 144. The remaining 2,443,529
Restricted Shares will become eligible for sale subject to the restrictions of
Rule 144 at later dates.

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated), who has beneficially owned restricted securities
for at least two years is entitled to sell, within any three-month period, a
number of such securities that does not exceed the greater of 1% of the then-
outstanding shares of the Common Stock (approximately 90,279) shares, based on
the number of shares to be outstanding after this offering) or the average
weekly trading volume in the public market during the four calendar weeks
preceding the filing of the seller's Form 144, provided certain requirements
concerning availability of public information concerning the Company, manner
of sale and notice of sale are satisfied. A person who is not an affiliate,
has not been an affiliate

58
<PAGE>

within three months prior to the sale and has beneficially owned the
restricted securities for at least three years is entitled to sell such shares
under Rule 144(k) without regard to any of the other limitations described
above. Rule 144 also provides that affiliates who are selling shares that are
not restricted securities must nonetheless comply with the same restrictions
applicable to restricted securities with the exception of the holding period
requirement. The two- and three-year holding periods described above do not
begin to run until the full purchase price or other consideration is paid by
the person acquiring the restricted securities from the issuer or an affiliate
of the issuer and may include the holding period of a prior owner who is not
an affiliate of the issuer. The Commission has proposed certain amendments to
Rule 144 that would reduce by one year the holding periods required for shares
to become eligible for sale in the public market pursuant to Rule 144. This
proposal, if adopted, would increase the number of shares of Common Stock
eligible for sale in the public market.

Based on securities outstanding as of October 1, 1996, it is expected that
after the closing of this offering the holders of 5,898,384 Restricted Shares
(plus 294,044 shares of Common Stock issuable upon exercise of outstanding
options) will have the right to cause the Company to register the sale of such
shares under the Securities Act. If such holders exercise their registration
rights, they will be able to sell the registered shares in the public market
upon the effectiveness of the registration statement covering such shares. See
"Description of Capital Stock--Registration Rights."

The Company intends to file one or more registration statements on Form S-8
with respect to 1,515,207 shares of Common Stock issued or issuable under the
1996 Option Plan, the Prior Option Plans and otherwise and 100,000 shares of
Common Stock issued or issuable under the Stock Purchase Plan. See
"Management--Benefit Plans." The registration statements are expected to be
filed as soon as practicable after the date of this Prospectus and will become
effective immediately upon filing. Shares covered by any such registration
statement will be eligible for sale in the public market upon the
effectiveness of such registration statement, subject to the limitations of
Rule 144 that are applicable to affiliates and to the lock-up agreements
described below, if applicable.

Prior to this 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 or the availability for sale of such shares will have on the
market price of the Common Stock prevailing from time to time. Nevertheless,
sales of substantial numbers of shares of Common Stock in the public market
could adversely affect the market price of the Common Stock and could impair
the Company's ability to raise capital through sales of its equity securities.
See "Risk Factors--Absence of Public Market; Possible Volatility of Stock
Price."

LOCK-UP AGREEMENTS

The Company, the Company's executive officers and directors, and certain
other persons that, upon the closing of this offering, will beneficially own
an aggregate of 5,747,102 shares of Common Stock and options to purchase
605,624 shares of Common Stock, have entered into agreements pursuant to which
they have severally agreed that, without the prior written consent of Cowen &
Company, they will not offer, sell, assign, transfer, encumber, contract to
sell, grant an option, right or warrant to purchase or otherwise dispose of
any shares of Common Stock held by them (including any shares of Common Stock
that may be deemed to be beneficially owned by them in accordance with the
rules and regulations of the Commission) or any securities convertible into,
derivative of or exercisable or exchangeable for Common Stock for 180 days
commencing on the date of this Prospectus, except for shares of Common Stock
purchased in this offering or in the public market pursuant to brokers'
transactions. Cowen & Company may, in its sole discretion and at any time
without notice, release all or a portion of the shares from the restrictions
imposed by such agreements. Cowen & Company has advised the Company that it
has no present intention of releasing any of the Company's stockholders or
optionholders from such lock-up agreements until the expiration of such 180-
day period.

59
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each
of the Underwriters, for whom Cowen & Company, Oppenheimer & Co., Inc. and
Volpe, Welty & Company are acting as Representatives (the "Representatives"),
has severally agreed to purchase from the Company, the respective number of
shares of Common Stock set forth opposite the name of such Underwriter below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
UNDERWRITER COMMON STOCK
----------- ------------
<S> <C>
Cowen & Company.................................................
Oppenheimer & Co., Inc..........................................
Volpe, Welty & Company..........................................

---------
Total....................................................... 3,000,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters are
committed to purchase all of the shares of Common Stock offered hereby (other
than those covered by the over-allotment option described below), if any of
such shares are purchased.

The Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus and in part 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 brokers and dealers. After the shares of Common Stock are released for
sale to the public, the offering price and other selling terms may from time
to time be varied by the Representatives.

The Company has granted the Underwriters an option exercisable for up to 30
days after the date of this Prospectus to purchase up to an aggregate of
450,000 additional shares of Common Stock to cover over-allotments, if any. If
the Underwriters exercise their over-allotment option, the Underwriters have
severally agreed, subject to certain conditions, to purchase approximately the
same percentage thereof that the number of shares to be purchased by each of
them as shown in the foregoing table bears to the 3,000,000 shares of Common
Stock offered hereby. The Underwriters may exercise such option only to cover
over-allotments made in connection with the sale of the Common Stock offered
hereby.

The Company has agreed to indemnify the several 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, the Company's executive officers and directors, and certain
other stockholders and optionholders of the Company have entered into
agreements pursuant to which they have severally agreed that, without the
prior written consent of Cowen & Company, they will not offer, sell, assign,
transfer, encumber, contract to sell, grant an option, right or warrant to
purchase or otherwise dispose of any shares of Common Stock or any securities
convertible into, derivative of or exercisable or exchangeable for Common
Stock for 180 days commencing on the date of this Prospectus, except for
shares of Common Stock purchased in this offering or in the public market
pursuant to brokers' transactions. Cowen & Company may, in its sole discretion
and at

60
<PAGE>

any time without notice, release all or a portion of the shares from the
restrictions imposed by such agreements. Cowen & Company has advised the
Company that it has no present intention of releasing any of the Company's
stockholders or optionholders from such lock-up agreements until the
expiration of such 180-day period. See "Shares Eligible for Future Sale."

The Representatives have advised the Company that the Underwriters do not
intend to confirm sales in excess of five percent of the shares offered hereby
to any account over which they exercise discretionary authority.

Based on securities outstanding as of October 1, 1996, it is expected that
after the closing of this offering the holders of 5,844,974 Restricted Shares
(plus 294,044 shares of Common Stock issuable upon exercise of outstanding
options) will have the right to cause the Company to register the sale of such
shares under the Securities Act. If such holders exercise their registration
rights, they will be able to sell the registered shares in the public market
upon the effectiveness of the registration statement covering such shares. See
"Description of Capital Stock--Registration Rights."

Prior to this offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price of the Common Stock
will be determined by negotiation between the Company and the Representatives.
Among the factors to be considered in such negotiations are the prevailing
market conditions, the results of operations of the Company in recent periods,
the market capitalization and stage of development of other companies that the
Company and the Representatives believe to be comparable to the Company,
estimates of the business potential of the Company, the present state of the
Company's development and other factors deemed relevant. The estimated initial
public offering price range set forth on the cover hereof is subject to change
as a result of market conditions and other factors.

61
<PAGE>

LEGAL MATTERS

The validity of the shares offered hereby will be passed upon for the
Company by Foley, Hoag & Eliot llp, Boston, Massachusetts. Mark L. Johnson, a
partner at Foley, Hoag & Eliot llp, is the Secretary of the Company. Certain
legal matters will be passed upon for the Underwriters by Skadden, Arps,
Slate, Meagher & Flom, Boston, Massachusetts.

EXPERTS

The Consolidated Financial Statements of the Company as of December 31,
1995, and for the nine months ended December 31, 1994 and the year ended
December 31, 1995, appearing in this Prospectus and Registration Statement,
and the Consolidated Financial Statements of About Software Corporation S.A.
for the nine months ended December 31, 1994 and the ten months ended October
31, 1995, appearing in this Prospectus and Registration Statement, have been
audited by Ernst & Young, independent auditors, as set forth in their reports
thereon appearing elsewhere herein, and are included in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.

CHANGE IN INDEPENDENT AUDITORS

On March 28, 1996, ASC appointed Ernst & Young Audit as the independent
auditor of certain financial statements to be submitted to the Company for
group reporting purposes. Ernst & Young Audit serves simultaneously with ASC's
local statutory auditor, who serves until the expiration of his six-year
appointment. This co-appointment of independent auditors was recommended by
the board of directors of ASC. Ernst & Young Audit audited the financial
statements of ASC for the nine months ended December 31, 1994 and the ten
months ended October 31, 1995 and its report on such financial statements,
which were prepared in accordance with generally accepted accounting
principles in the United States, is included elsewhere in this Prospectus.

ASC's statutory auditor did not audit the financial statements of ASC
included elsewhere in this Prospectus and, accordingly, did not issue any
report on such statements. ASC's statutory auditor reported on the statutory
financial statements of ASC as of December 31, 1994 and 1995 and for the years
then ended, which were prepared in accordance with generally accepted
accounting practice in France (and not the United States). Neither ASC's
statutory financial statements nor the statutory auditor's reports thereon are
included herein. Such reports contained no adverse opinion or disclaimer of an
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles. Since January 1, 1994, there have been no disagreements
between ASC and its statutory auditor on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which, if not resolved to such auditor's satisfaction, would have caused him
to make reference to the subject matter of the disagreement in connection with
his reports.

Prior to retaining Ernst & Young Audit as independent auditors for group
reporting purposes, ASC had not consulted with Ernst & Young Audit regarding
accounting principles, the type of audit opinion that might have been rendered
on ASC's financial statements, or any matter that was the subject of
discussion with ASC's statutory auditor.

62
<PAGE>

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
SB-2 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Stock, reference is
made to such Registration Statement and the exhibits and schedules filed as a
part thereof. Statements contained in this Prospectus as to the contents of
any contract or any other document referred to are not necessarily complete,
and, in each instance, if such contract or document is filed as an exhibit,
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference to such exhibit. The Registration Statement,
including exhibits and schedules thereto, may be inspected and copied 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 at Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661 and 7 World Trade Center, Thirteenth Floor, New York,
New York 10048. Copies also may be obtained from the Public Reference Section
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549, at prescribed rates. The Commission maintains a Web
site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding issuers that file electronically
with the Commission.

63
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

INDEX TO FINANCIAL STATEMENTS

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY:

<TABLE>
<S> <C>
Report of Independent Auditors.......................................... F-2
Consolidated Balance Sheet as of December 31, 1995...................... F-3
Consolidated Statements of Operations for the nine months ended December
31, 1994 and the year ended December 31, 1995.......................... F-4
Consolidated Statements of Stockholders' Equity for the nine months
ended December 31, 1994 and the year ended December 31, 1995........... F-5
Consolidated Statements of Cash Flows for the nine months ended December
31, 1994 and the year ended December 31, 1995.......................... F-6
Notes to Consolidated Financial Statements.............................. F-7
WHITE PINE SOFTWARE, INC. AND SUBSIDIARY (UNAUDITED):
Unaudited Condensed Consolidated Balance Sheet as of June 30, 1996...... F-15
Unaudited Condensed Consolidated Statements of Operations for the six
months ended June 30, 1995 and 1996.................................... F-16
Unaudited Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 1995 and 1996.................................... F-17
Notes to Unaudited Condensed Consolidated Financial Statements.......... F-18
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS:
Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1995....................................... F-20
ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY:
Report of Independent Auditors.......................................... F-21
Consolidated Statements of Operations for the nine months ended December
31, 1994 and the ten months ended October 31, 1995..................... F-22
Consolidated Statements of Stockholders' Equity (Deficit) for the nine
months ended December 31, 1994 and the ten months ended October 31,
1995................................................................... F-23
Consolidated Statements of Cash Flows for the nine months ended December
31, 1994 and the ten months ended October 31, 1995..................... F-24
Notes to Consolidated Financial Statements.............................. F-25
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Board of Directors
White Pine Software, Inc.

We have audited the accompanying consolidated balance sheet of White Pine
Software, Inc. and subsidiary as of December 31, 1995, and the related
consolidated statements of operations, stockholders' equity, and cash flows
for the nine months ended December 31, 1994 and for the year ended December
31, 1995. 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 White Pine
Software, Inc. and subsidiary at December 31, 1995, and the consolidated
results of their operations and their cash flows for the nine months ended
December 31, 1994 and for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.

Ernst & Young LLP

June 28, 1996, except for
Note 3 as to which
the date is July 31, 1996

F-2
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER
31, 1995
-----------
<S> <C>
ASSETS (NOTE 3)
Current assets:
Cash and cash equivalents......................................... $ 1,773,855
Accounts receivable, less allowance of $116,449................... 1,438,528
Inventories....................................................... 178,546
Prepaid expenses.................................................. 149,607
Other current assets.............................................. 19,210
-----------
Total current assets........................................... 3,559,746
Property and equipment:
Computer equipment................................................ 1,429,560
Furniture and fixtures............................................ 371,189
Software.......................................................... 330,972
Equipment......................................................... 105,204
Leasehold improvements............................................ 25,175
-----------
2,262,100
Accumulated depreciation and amortization......................... (1,648,839)
-----------
613,261
Other assets:
Third-party licenses, less accumulated amortization of $241,529... 765,983
Goodwill, less accumulated amortization of $39,750................ 1,152,768
Other assets...................................................... 345,650
-----------
2,264,401
-----------
Total assets....................................................... $ 6,437,408
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................. $ 465,924
Accrued expenses and other accrued liabilities (Note 4)........... 1,648,260
Deferred revenue.................................................. 445,786
Current portion of long-term debt (Note 3)........................ 217,986
-----------
Total current liabilities...................................... 2,777,956
Long-term debt, less current portion (Note 3)...................... 385,017
Long-term portion of accrued third-party licenses.................. 494,074
Commitments (Note 7)
Stockholders' equity (Notes 8 and 9):
Common stock, $.01 par value:
Authorized shares--7,500,000
Issued and outstanding shares--5,589,764......................... 55,898
Additional paid-in capital........................................ 12,637,430
Accumulated deficit............................................... (9,974,900)
Currency translation adjustments.................................. 61,933
-----------
Total stockholders' equity..................................... 2,780,361
-----------
Total liabilities and stockholders' equity......................... $ 6,437,408
===========
</TABLE>

See accompanying notes.

F-3
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1994 1995
----------------- ------------
<S> <C> <C>
Revenue:
Software license fees.......................... $4,364,458 $ 6,017,710
Services and other............................. 600,304 1,166,035
---------- -----------
Total revenue............................... 4,964,762 7,183,745
Cost of revenue................................. 654,996 1,247,094
---------- -----------
Gross profit.................................... 4,309,766 5,936,651
Operating expenses:
Sales and marketing............................ 1,636,786 2,516,604
Research and development....................... 1,301,259 1,865,830
General and administrative..................... 1,105,620 2,000,521
Write-off of purchased research and development
costs (Note 2)................................ -- 3,200,000
---------- -----------
Total operating expenses.................... 4,043,665 9,582,955
---------- -----------
Income (loss) from operations................... 266,101 (3,646,304)
Other income (expense):
Interest income................................ 65,785 82,212
Other, net..................................... 79,809 68,131
---------- -----------
145,594 150,343
---------- -----------
Income (loss) before provision for income tax-
es............................................. 411,695 (3,495,961)
Provision for income taxes (Note 5)............. 18,000 30,024
---------- -----------
Net income (loss)............................... $ 393,695 $(3,525,985)
========== ===========
Net income (loss) per common and common equiva-
lent share..................................... $ .06 $ (.65)
========== ===========
Weighted average number of common and common
equivalent
shares outstanding............................. 6,084,775 5,450,884
========== ===========
</TABLE>

See accompanying notes.

F-4
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL CURRENCY TOTAL
---------------------- PAID-IN ACCUMULATED TRANSLATION STOCKHOLDERS'
SHARES PAR VALUE CAPITAL DEFICIT ADJUSTMENT EQUITY
----------- --------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balances at April 1,
1994, as previously
reported............... 29,946,898 $29,947 $ 8,644,919 $(6,787,058) -- $1,887,808
Adjustment in
connection with a
business combination
accounted for as a
pooling-of-interests
(Note 2).............. 5,958,400 5,958 28,258 (55,552) (21,336)
----------- ------- ----------- ----------- ------- ----------
Balances at April 1,
1994, as restated...... 35,905,298 35,905 8,673,177 (6,842,610) -- 1,866,472
Net income............. 393,695 393,695
Common Stock issued
upon exercise of stock
options (Note 8)...... 4,167 4 414 418
Repurchase and
cancellation of 50,000
shares of Common
Stock................. (50,000) (50) (4,950) (5,000)
----------- ------- ----------- ----------- ------- ----------
Balances at December 31,
1994................... 35,859,465 35,859 8,668,641 (6,448,915) -- 2,255,585
Net loss............... (3,525,985) (3,525,985)
Adjustment for one-for-
ten reverse stock
split (Note 9)........ (32,273,518) -- --
Common stock issued in
connection with a
business combination
accounted for as a
purchase (Note 2)..... 1,990,956 19,910 3,962,002 3,981,912
Common stock issued
upon exercise of stock
options (Note 8)...... 12,861 129 6,787 6,913
Currency translation
adjustment............ $61,933 61,933
----------- ------- ----------- ----------- ------- ----------
Balances at December 31,
1995................... 5,589,764 $55,898 $12,637,430 $(9,974,900) $61,933 $2,780,361
=========== ======= =========== =========== ======= ==========
</TABLE>

See accompanying notes.

F-5
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1994 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss).................................... $ 393,695 $(3,525,985)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization...................... 181,700 550,731
Write-off of purchased research and development
costs............................................. -- 3,200,000
Other.............................................. (34,066) (48,316)
Changes in operating assets and liabilities:
Accounts receivable............................... (246,425) 64,435
Inventories....................................... (52,132) 9,730
Prepaid expenses.................................. (84,906) 45,161
Other assets...................................... 19,994 (35,623)
Accounts payable.................................. (44,321) 148,170
Accrued expenses and other accrued liabilities.... (312,815) 211,369
Deferred revenue.................................. 46,701 22,149
---------- -----------
Net cash provided by (used in) operating
activities..................................... (132,575) 641,821
INVESTING ACTIVITIES
Purchase of property and equipment, net.............. (184,696) (329,510)
Purchase of third party licenses, net................ -- (377,438)
Acquisition costs incurred in a business combination
accounted for as a purchase......................... -- (175,000)
Cash acquired in a business combination accounted for
as a purchase....................................... -- 117,532
Other................................................ (20,181) (73,095)
---------- -----------
Net cash used in investing activities........... (204,877) (837,511)
FINANCING ACTIVITIES
Proceeds from long-term debt......................... -- 53,000
Principal payments on long-term debt................. (55,118) (23,336)
Proceeds from exercise of stock options.............. 418 6,916
Repurchase of Common Stock........................... (5,000) --
---------- -----------
Net cash provided by (used in) financing
activities..................................... (59,700) 36,580
Currency translation effect on cash and cash
equivalents......................................... -- 61,933
---------- -----------
Net decrease in cash and cash equivalents............ (397,152) (97,177)
Cash and cash equivalents at beginning of period..... 2,268,184 1,871,032
---------- -----------
Cash and cash equivalents at end of period........... $1,871,032 $ 1,773,855
========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest............................... $ 299 $ 8,713
========== ===========
Cash paid for taxes.................................. $ 2,763 $ 18,596
========== ===========
</TABLE>

See accompanying notes.

F-6
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1995

1. ACCOUNTING POLICIES

Nature of Business

White Pine Software, Inc. (the Company) develops, markets and supports
multiplatform desktop connectivity software that facilitates worldwide video
and audio communication and data collaboration across the Internet, intranets
and other networks. The Company's desktop videoconferencing software products
allow users to participate in real-time, multipoint videoconferences over the
Internet and intranets. The Company also offers desktop X Windows and terminal
emulation software. The Company's customers include businesses, government
organizations, educational institutions and individual consumers. The Company
markets and sells its products in the United States, Europe and the Pacific
Rim through distributors, a combination of strategic partners and OEMs, and
its direct sales organization, as well as over the Internet. The Company,
formerly known as Visual International, Inc., was incorporated in April 1992.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned foreign subsidiary, About Software Corporation, S.A.
(ASC), and ASC's wholly-owned subsidiary. All significant intercompany
accounts and transactions have been eliminated in consolidation.

Use of Estimates

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

Fiscal Year

Effective April 1, 1994, the Company changed its fiscal year end from March
31 to December 31.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash, cash equivalents and
accounts receivable. Cash and cash equivalents include cash on deposit in
checking accounts, commercial paper, and certificates-of-deposit. These cash
and cash equivalents are maintained with high credit quality financial
institutions.

To date, accounts receivable have been primarily derived from revenue earned
from customers located in the United States. The Company performs ongoing
credit evaluations of its customers and generally requires no collateral. The
Company maintains reserves for potential credit losses; historically, such
losses have not been material and have been within management's expectations.
At December 31, 1995, one customer accounted for approximately 14% of accounts
receivable.

During the nine months ended December 31, 1994 and the year ended December
31, 1995, one customer accounted for approximately 21% and 16%, respectively,
of the Company's total revenue.

Included in the Company's balance sheet at December 31, 1995 are the assets
of the Company's foreign subsidiary, ASC, of which approximately $663,000 of
tangible assets are located in France.

The Company's sales by geographic locations are summarized in the table
below:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1994 1995
------------ ------------
<S> <C> <C>
United States.................................... $4,404,000 $5,713,000
Europe........................................... 312,000 976,000
Pacific Rim...................................... 249,000 495,000
---------- ----------
$4,965,000 $7,184,000
========== ==========
</TABLE>

F-7
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments

The carrying amount of the Company's financial instruments, including
accounts receivable and long-term debt, approximates fair value.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or
market.

Property and Equipment

Property and equipment are stated at cost and are being depreciated using
the straight-line and accelerated methods over the estimated useful lives of
two to seven years. Leasehold improvements are stated at cost and are being
amortized over the lesser of the term of the lease or the estimated useful
life of the asset.

Third-Party Licenses

The cost of agreements entered into with third parties for the right to use
the third parties' technology in the Company's products is amortized on a
straight-line basis over the lives of the agreements.

Income Taxes

Deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

Revenue Recognition

Software License Fees:

The Company recognizes software license fee revenue in accordance with the
provisions of AICPA Statement of Position No. 91-1, Software Revenue
Recognition. Software license fees represent revenue derived from the license
of the Company's proprietary software. License revenue is typically recognized
upon shipment, net of allowances for estimated future returns. However,
license revenue under certain license agreements is recognized upon
fulfillment of contractual obligations based upon achievement of specified
milestones, which may include delivery, installation, and final acceptance.

Services and Other:

Maintenance is recognized ratably over the term of the agreement.
Professional and technical service revenue is recognized as the services are
performed.

Research and Development

Statement of Financial Accounting Standards No. 86, Accounting for the Costs
of Computer Software to be Sold, Leased or Otherwise Marketed, requires
capitalization of certain software development costs subsequent to the
establishment of technological feasibility. Based upon the Company's product
development process, technological feasibility is established upon completion
of a commercially viable working model. Costs incurred by the Company between
completion of the commercially viable working model and the point at which the
product is ready for general release have been capitalized. Such amounts,
approximating $250,000, are included in other assets and are being amortized
over a three-year period; these amounts are principally attributable to the
Company's acquisition of ASC.

F-8
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. ACCOUNTING POLICIES (CONTINUED)

Foreign Currency Translation

The financial statements of the Company's foreign subsidiary have been
translated into U.S. dollars in accordance with Statement of Financial
Accounting Standards No. 52, Foreign Currency Translation. All balance sheet
amounts have been translated using the exchange rates in effect at the balance
sheet date. Statement of operations amounts have been translated using average
exchange rates. The gains and losses resulting from the changes in exchange
rates from the date of acquisition (see Note 2) to December 31, 1995 have been
reported separately as a component of stockholders' equity.

The aggregate transaction gains and losses were insignificant for all
periods presented.

Advertising Costs

All costs related to advertising the Company's products are expensed in the
period incurred. Amounts charged to expense were $314,000 and $518,000 during
the nine months ended December 31, 1994 and the year ended December 31, 1995,
respectively.

Net Income (Loss) Per Common and Common Equivalent Share

Net income (loss) per common and common equivalent share is computed using
the weighted average number of shares of common stock and dilutive common
equivalent shares outstanding during the period. All shares, options and
warrants issued within 12 months of the filing date are treated as if they
were outstanding for all periods presented using the treasury stock method
(assumed initial public offering price of $9.00 per share). Common equivalent
shares consist of the incremental common shares issuable upon the exercise of
stock options and warrants using the treasury stock method.

Stock Based Compensation

The Company grants stock options for a fixed number of shares to employees
with an exercise price equal to the fair value of the shares at the date of
grant. The Company accounts for stock option grants in accordance with
Accounting Principles Board Statement No. 25, Accounting for Stock Issued to
Employees, and, accordingly, recognizes no compensation expense for options
granted.

Recent Accounting Pronouncements

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed Of, which establishes
criteria for the recognition and measurement of impairment loss associated
with long-lived assets. The Company will be required to adopt this standard in
the first quarter of 1996. Based on the Company's initial evaluation, adoption
is not expected to have a material impact on the Company's financial position
or results of operations.

Reclassifications

Certain amounts for the nine months ended December 31, 1994 have been
reclassified to conform to the 1995 presentation.

F-9
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. BUSINESS COMBINATIONS

On November 1, 1995, the Company acquired all of the outstanding common
stock of ASC, a French developer of connectivity software, and its wholly-
owned subsidiary, About Software Corporation, a California corporation. The
acquisition was made with the issuance of 1,990,956 shares of the Company's
common stock, valued at $2.00 per share (exclusive of approximately $175,000
of acquisition costs). Approximately 10% of the shares issued are being held
in escrow pursuant to the terms of the Acquisition Agreement.

The acquisition has been accounted for using the purchase method of
accounting and, accordingly, the results of operations of ASC are included in
the financial statements since the date of acquisition. In connection with the
acquisition, the Company acquired assets with a fair market value of
approximately $4,234,000 and assumed liabilities of approximately $1,270,000.
Included in assets acquired is purchased research and development costs ("in-
process technology") with a fair value of approximately $3,200,000, which was
charged to income upon consummation of the acquisition, due to a determination
that there was no future value to the Company. The excess of the purchase
price over the fair market value of net assets acquired of approximately
$1,193,000 has been allocated to goodwill and is being amortized on a
straight-line basis over 5 years.

The following unaudited pro forma information presents a summary of
operating results of the Company and ASC as if the acquisition had been made
as of April 1, 1994:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1994 1995
------------ ------------
<S> <C> <C>
Pro forma revenue................................ $6,296,000 $ 9,227,000
Pro forma net loss............................... $ (566,000) $(1,171,000)
Pro forma net loss per common and common
equivalent share................................ $ (.09) $ (.21)
</TABLE>

These pro forma results are for illustrative purposes only and include
certain adjustments, such as additional amortization expense as a result of
goodwill and other intangible assets. They do not purport to be indicative of
the actual operating results which would have occurred had the transaction
been consummated as of those earlier dates, nor are they indicative of results
of operations which may occur in the future.

On April 1, 1994, the Company acquired all of the outstanding common stock
of Grafpoint, a developer of connectivity software, in exchange for 595,840
shares of the Company's common stock, in a business combination accounted for
as a pooling-of-interests.

3. INDEBTEDNESS

Line-of-Credit

The Company has a line-of-credit with a financial institution which provides
for maximum available borrowings of $1,000,000. Interest on the line is
payable monthly at the bank's prime rate plus .5% (9% at December 31, 1995).
Borrowings under the line are due on demand and are secured by substantially
all assets of the Company, including a $515,000 certificate-of-deposit. This
agreement expires on September 30, 1996. At December 31, 1995, there were no
amounts outstanding under the line-of-credit.

The line-of-credit agreement contains various restrictive covenants, the
most significant of which include the maintenance of a minimum net worth, a
maximum ratio of total liabilities to tangible net worth, a minimum ratio of
current assets to current liabilities, and profitability on a rolling three-
month basis. At December 31, 1995, the Company was not in compliance with the
minimum ratio of current assets to current liabilities and the profitability
covenant. On July 31, 1996, the Company obtained a waiver from the financial
institution for both of these covenants through September 30, 1996.

F-10
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. INDEBTEDNESS (CONTINUED)

Long-term Debt

<TABLE>
<S> <C>
Secured term bank loans, due in monthly installments of $615 to
$7,237, which includes interest ranging from 7.25% to 11.55%, with
final installments due from March 1998 to October 1998............ $344,155
Secured, non-interest bearing, term bank loan from a foreign
governmental agency, due in annual installments of $48,381, with
the final installment due in September 1999....................... 179,596
Note payable, due in monthly installments of $883 plus interest at
9.5%, with remaining balances due August 2000..................... 49,467
Other.............................................................. 29,785
--------
603,003
Less current portion............................................... 217,986
--------
$385,017
========
</TABLE>

Aggregate maturities on long-term debt for the next five years are as follows:

Total interest expense for the nine months ended December 31, 1994 and year
ended December 31, 1995 was approximately $0 and $7,000, respectively, and is
included in other expense.

4. ACCRUED EXPENSES AND OTHER ACCRUED LIABILITIES

Accrued expenses and other accrued liabilities consisted of the following at
December 31, 1995:

<TABLE>
<S> <C>
Accrued compensation expense and related benefits............. $ 684,328
Pending litigation............................................ 292,907
Third-party licenses.......................................... 136,000
Accrued acquisition costs..................................... 125,119
Other accruals................................................ 409,906
----------
$1,648,260
==========
</TABLE>

The Company is a co-defendant in various lawsuits filed in federal and state
courts in New York. The lawsuits seek damages for alleged injuries sustained
while using products which the plaintiffs assert were designed and
manufactured by a predecessor of the Company. Although the Company is
defending these claims, exposure is partially limited by insurance and
indemnification by the primary contractor. While management believes that
losses from these claims are not probable (as defined for purposes of
Statement of Financial Accounting Standards No. 5), it has established an
accrual of approximately $293,000 for legal fees and potential losses which
could arise from such claims. The actual amount of such losses may range from
$0 to $8,250,000, which represents the sum of the damages sought by the
plaintiffs in such lawsuits.

F-11
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
5. INCOME TAXES

Included in the accompanying balance sheet are the following deferred tax
balances as of December 31, 1995:

<TABLE>
<S> <C>
Deferred tax assets....................... $ 2,700,000
Valuation allowance for deferred tax as-
sets..................................... (2,700,000)
-----------
--
Deferred tax liabilities.................. --
-----------
Net deferred tax asset.................... $ --
===========
</TABLE>

5. INCOME TAXES (CONTINUED)

Deferred tax assets consist primarily of net operating and capital loss
carryforwards and accrued liabilities.

The Company recorded a valuation allowance of $2,700,000 against its deferred
tax assets since it is believed to be more likely than not that the net
operating loss carryforwards and other temporary differences will not provide a
future tax benefit.

At December 31, 1995, the Company has cumulative federal net operating loss
carryforwards of approximately $5,700,000 for income tax purposes. The
availability of the net operating loss carryforwards to offset future taxable
income is subject to significant annual limitations. The amount available for
fiscal 1996 to reduce future federal income taxes payable is limited to
approximately $480,000. The loss carryforwards will expire at various dates
beginning in 1996.

6. PROFIT SHARING PLAN

The Company has a Profit Sharing Plan (the "Plan") under Section 401(k) of
the Internal Revenue Code for all employees meeting age and service
requirements. Eligible employees may elect to contribute up to 16% of their
compensation, subject to limitations established by the Internal Revenue Code.
The Company may elect to contribute a discretionary amount to the Plan which
would be allocated to the employees based upon the employees' contributions to
the Plan. There have been no discretionary contributions to date.

7. LEASE COMMITMENTS

Operating Leases

The Company leases its office facilities under various operating leases
expiring at various times through fiscal 1998.

Future minimum annual rental commitments under the lease agreements for the
years ending December 31 are as follows:

Total rent expense for the nine months ended December 31, 1994 and the year
ended December 31, 1995 was approximately $200,000 and $292,000, respectively,
and is included in general and administrative expenses.

F-12
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
8. STOCKHOLDERS' EQUITY

Stock Option Plan

The Company has various stock option plans which provide for the issuance of
incentive and non-qualified stock options. The Board of Directors, which
administers the plans, has the authority to determine to whom options may be
granted, period of exercise, the option price at the date of grant, and what
other restrictions, if any, should apply. In connection with the acquisition of
ASC on November 1, 1995, the Board of Directors increased the number of
authorized shares reserved under the plans to 970,000 shares and granted
104,500 options to certain ASC employees. The options provide for vesting
schedules and allow for special vesting opportunities in the case of job loss
due to merger activities.

Information with respect to the plans is summarized as follows:

<TABLE>
<CAPTION>
NUMBER OF OPTION PRICE
SHARES PER SHARE
--------- ------------
<S> <C> <C>
Balance at April 1, 1994.............................. 383,342 $ .50--1.00
Granted............................................. 338,664 1.00--1.50
Exercised........................................... (417) 1.00
Cancelled........................................... --
-------
Balance at December 31, 1994.......................... 721,589 .50--1.50
Granted............................................. 207,548 1.50--2.00
Exercised........................................... (12,861) .50--1.50
Cancelled........................................... (33,527) .50--1.50
-------
Balance at December 31, 1995.......................... 882,749 .50--2.00
=======
</TABLE>

Options to purchase 630,964 shares were exercisable at December 31, 1995.

Warrants

In June 1995, in connection with the execution of an exclusive software
license, the Company became obligated to issue a warrant to purchase 20,000
shares of Common Stock at an exercise price of $3.00 per share. The warrant has
an expiration date which is the earlier of June 1, 1999, or the closing date of
the Company's initial public offering.

9. SUBSEQUENT EVENTS

Recapitalization

In September 1995, the Company's Board of Directors declared a one-for-ten
reverse stock split of the Company's Common Stock that became effective March
18, 1996. All per share amounts and number of shares in the accompanying
financial statements have been retroactively adjusted to reflect the reverse
stock split.

On February 29, 1996, the Board of Directors and the stockholders approved an
amendment to the Company's charter to authorize 500,000 shares of $5.83 par
value common stock and to decrease the number of authorized shares of $.01 par
value common stock to 7,500,000 shares. The $5.83 par value common stock
carries liquidation preferences, antidilutive protection and redeemable rights
over the Company's $.01 par value common stock. Each share of $5.83 par value
common stock will automatically convert into one share of common stock on the
closing date of the Company's initial public offering.

Stock Purchase Agreements

On March 19, 1996, the Company entered into a Stock Purchase Agreement with
certain investors whereby, for consideration of $2,000,000, the Company issued
343,053 shares of $5.83 par value common stock.

On April 17, 1996, the Company entered into a Stock Purchase Agreement with
an additional investor whereby, for consideration of $300,000, the Company
issued 51,458 shares of $5.83 par value common stock.

F-13
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. SUBSEQUENT EVENTS (CONTINUED)

Office Lease

On May 15, 1996, the Company entered into an operating lease for office
space to be utilized as its corporate headquarters. In connection with the
execution of this operating lease, the Company arranged for the termination of
its prior lease agreement (see Note 7) effective October 31, 1996. Future
minimum annual rental commitments under the new lease agreement for the years
ending December 31 are as follows:

F-14
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)

<TABLE>
<CAPTION>
JUNE 30, 1996
-------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents....................................... $ 2,031,321
Accounts receivable, less allowance of $242,233................. 1,636,076
Inventories..................................................... 142,743
Prepaid expenses................................................ 468,975
Other current assets............................................ 10,204
------------
Total current assets........................................... 4,289,319
Property and equipment:
Computer equipment.............................................. 1,692,728
Furniture and fixtures.......................................... 398,587
Software........................................................ 351,871
Equipment....................................................... 108,287
Leasehold improvements.......................................... 26,297
------------
2,577,770
Accumulated depreciation and amortization....................... (1,861,796)
------------
715,974
Other assets:
Third-party licenses, less accumulated amortization of
$496,498....................................................... 585,975
Goodwill, less accumulated amortization of $159,005............. 1,033,513
Other assets.................................................... 385,292
------------
2,004,780
------------
Total assets..................................................... $ 7,010,073
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................ $ 544,063
Accrued expenses and other accrued liabilities.................. 1,531,270
Deferred revenue................................................ 898,634
Current portion of long-term debt............................... 190,219
------------
Total current liabilities...................................... 3,164,186
Long-term debt, less current portion............................. 311,642
Long-term portion of accrued third-party licenses................ 366,358
Stockholders' equity:
Common stock, $.01 par value:
Authorized shares--7,500,000
Issued and outstanding shares--5,591,810....................... 55,918
Common stock, $5.83 par value:
Authorized shares--500,000
Issued and outstanding shares--394,511......................... 2,300,000
Additional paid-in capital...................................... 12,576,671
Accumulated deficit............................................. (11,863,066)
Currency translation adjustments................................ 98,364
------------
Total stockholders' equity..................................... 3,167,887
------------
Total liabilities and stockholders' equity....................... $ 7,010,073
============
</TABLE>

See accompanying notes.

F-15
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1995 1996
---------- -----------
<S> <C> <C>
Revenue:
Software license fees................................ $2,914,361 $ 4,304,595
Services and other................................... 510,810 555,607
---------- -----------
Total revenue....................................... 3,425,171 4,860,202
Cost of revenue....................................... 414,524 920,838
---------- -----------
Gross profit.......................................... 3,010,647 3,939,364
Operating expenses:
Sales and marketing.................................. 1,173,257 2,810,316
Research and development............................. 920,299 1,700,844
General and administrative........................... 750,755 1,283,428
---------- -----------
Total operating expenses............................ 2,844,311 5,794,588
---------- -----------
Loss from operations.................................. 166,336 (1,855,224)
Other income (expense):
Interest income...................................... 44,539 43,269
Other, net........................................... 27,515 (20,546)
---------- -----------
72,054 22,723
---------- -----------
Income (loss) before provision for income taxes....... 238,390 (1,832,501)
Provision for income taxes............................ 12,351 55,665
---------- -----------
Net income (loss)..................................... $ 226,039 $(1,888,166)
========== ===========
Net income (loss) per common and common equivalent
share................................................ $ .04 $ (.32)
========== ===========
Weighted average number of common and common
equivalent shares outstanding........................ 6,118,327 5,901,050
========== ===========
</TABLE>

See accompanying notes.

F-16
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1995 1996
---------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss).................................... $ 226,039 $(1,888,166)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization...................... 98,043 576,519
Changes in operating assets and liabilities:
Accounts receivable............................... (164,546) (243,139)
Inventories....................................... (32,183) 36,207
Prepaid expenses.................................. (6,817) (291,187)
Other assets...................................... -- (87,625)
Accounts payable.................................. (82,960) 70,550
Accrued expenses and other accrued liabilities.... (140,971) (207,992)
Deferred revenue.................................. 30,545 458,132
---------- -----------
Net cash provided by (used in) operating activi-
ties........................................... 93,070 (1,576,701)
INVESTING ACTIVITIES
Purchase of property and equipment, net.............. (328,016) (303,494)
Purchase of third-party licenses, net................ -- (29,961)
Other................................................ -- --
---------- -----------
Net cash used in investing activities........... (328,016) (333,455)
FINANCING ACTIVITIES
Proceeds from long-term debt......................... -- 22,722
Principal payments on long-term debt................. -- (95,973)
Proceeds from sale of common stock, net.............. 692 2,239,261
---------- -----------
Net cash provided by financing activities....... 692 2,166,010
Currency translation effect on cash and
cash/equivalents.................................... -- 1,612
---------- -----------
Net increase (decrease) in cash and cash equiva-
lents............................................... (234,254) 257,466
Cash and cash equivalents at beginning of period..... 1,871,032 1,773,855
---------- -----------
Cash and cash equivalents at end of period........... $1,636,778 $ 2,031,321
========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest............................... 1,451 $ 19,222
========== ===========
Cash paid for taxes.................................. $ 22,662 $ 34,912
========== ===========
</TABLE>

See accompanying notes.

F-17
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1996
(UNAUDITED)

1. BASIS OF PRESENTATION

The information contained in these unaudited condensed consolidated
financial statements is condensed from that which would appear in the
Company's annual consolidated financial statements. Accordingly, the unaudited
condensed consolidated financial statements included herein should be reviewed
in conjunction with the consolidated financial statements and related notes
included elsewhere in this Prospectus. The unaudited condensed consolidated
financial statements as of June 30, 1995 and 1996 and for the six-month
periods then ended include all adjustments (consisting of normal, recurring
adjustments) considered necessary for a fair presentation. The results of
operations for interim periods are not necessarily indicative of the results
which may be expected for the entire year. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.

2. NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE

F-18
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

The accompanying unaudited condensed consolidated pro forma statement of
operations of White Pine Software, Inc. and Subsidiary (the Company) for the
year ended December 31, 1995 is derived from the Company's historical
statement of operations for that year, and gives pro forma effect to the
acquisition of About Software Corporation S.A. and Subsidiary as if the
acquisition occurred on January 1, 1995.

The unaudited pro forma condensed consolidated statement of operations does
not necessarily represent actual results that would have been achieved had the
companies been together since January 1, 1995, nor may they be indicative of
future operations. This unaudited pro forma condensed consolidated statement
of operations should be read in conjunction with the companies' respective
historical financial statements and notes thereto.

F-19
<PAGE>

WHITE PINE SOFTWARE, INC. AND SUBSIDIARY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
WHITE PINE ABOUT SOFTWARE
SOFTWARE, INC. CORP. S.A. PRO FORMA
AND SUBSIDIARY AND SUBSIDIARY COMBINED ADJUSTMENTS PRO FORMA
-------------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue................. 7,183,745 2,043,413 9,227,158 -- 9,227,158
Cost of revenue......... 1,247,094 226,444 1,473,538 -- 1,473,538
----------- --------- ----------- ---------- -----------
Gross profit............ 5,936,651 1,816,969 7,753,620 -- 7,753,620
Operating expenses:
Sales and marketing.... 2,516,604 687,844 3,204,448 -- 3,204,448
Research and
development........... 1,865,830 779,928 2,645,758 $ 79,757 (1) 2,725,515
General and
administrative........ 2,000,521 1,020,756 3,021,277 198,754 (2) 3,220,031
Write-off of purchased
research and
development costs..... 3,200,000 -- 3,200,000 (3,200,000)(3) --
----------- --------- ----------- ---------- -----------
Total operating
expenses........... 9,582,955 2,488,528 12,071,483 (2,921,489) 9,149,994
----------- --------- ----------- ---------- -----------
Loss from operations.... (3,646,304) (671,559) (4,317,863) 2,921,489 (1,396,374)
Other income (expense):
Interest income........ 82,212 (51,732) 30,480 -- 30,480
Other, net............. 68,131 156,951 225,082 -- 225,082
----------- --------- ----------- ---------- -----------
150,343 105,219 255,562 -- 255,562
----------- --------- ----------- ---------- -----------
Loss before provision
for income taxes....... (3,495,961) (566,340) (4,062,301) 2,921,489 (1,140,812)
Provision for income
taxes.................. 30,024 -- 30,024 -- 30,024
----------- --------- ----------- ---------- -----------
Net loss................ $(3,525,985) $(566,340) $(4,092,325) $2,921,489 $(1,170,836)
=========== ========= =========== ========== ===========
</TABLE>

The following is a summary of adjustments reflected in the accompanying
unaudited pro forma condensed consolidated statement of operations for the year
ended December 31, 1995:

(1) Represents the adjustment to give effect to a full year of capitalized
software amortization.

(2) Represents the adjustment to give effect to a full year of goodwill
amortization.

(3) Represents the one-time adjustment to reflect the write-off of purchased
research and development costs.

F-20
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Board of Directors
About Software Corporation S.A. and Subsidiary
(formerly known as Advanced Software Concepts S.A.)

We have audited the accompanying consolidated statements of operations,
stockholders' equity (deficit), and cash flows of About Software Corporation
S.A. and subsidiary for the nine months ended December 31, 1994 and the ten
months ended October 31, 1995. 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 results of operations and cash flows
of About Software Corporation S.A. and subsidiary for the nine months ended
December 31, 1994 and for the ten months ended October 31, 1995 in conformity
with generally accepted accounting principles.

ERNST & YOUNG Audit

/s/ Jacques Fournier

Jacques Fournier
Nice, FRANCE, July 26, 1996

F-21
<PAGE>

ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS TEN MONTHS
ENDED ENDED
DECEMBER 31, OCTOBER 31,
1994 1995
------------ -----------
<S> <C> <C>
Revenue............................................... $1,331,114 $2,043,413
Cost of revenue....................................... 150,362 226,444
---------- ----------
Gross profit.......................................... 1,180,752 1,816,969
Operating expenses:
Sales and marketing.................................. 591,719 687,844
Research and development............................. 684,119 779,928
General and administrative........................... 551,890 1,020,756
---------- ----------
Total operating expenses.......................... 1,827,728 2,488,528
---------- ----------
Loss from operations.................................. (646,976) (671,559)
Other income (expense):
Interest expense..................................... (49,266) (51,732)
Other, net........................................... 70,747 156,951
---------- ----------
21,481 105,219
---------- ----------
Net loss.............................................. $ (625,495) $ (566,340)
========== ==========
</TABLE>

See accompanying notes.

F-22
<PAGE>

ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL CURRENCY TOTAL
---------------- PAID-IN ACCUMULATED TRANSLATION STOCKHOLDERS'
SHARES PAR VALUE CAPITAL DEFICIT ADJUSTMENT EQUITY (DEFICIT)
------ --------- ---------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Balances at April 1, 1994...... 3,288 $597,113 -- $ (526,547) $35,246 $ 105,812
Net loss...................... (625,495) (625,495)
Issuance of common stock...... 1,724 30,192 $144,925 175,117
Currency translation
adjustment................... 1,837 1,837
----- -------- -------- ----------- ------- ---------
Balances at December 31, 1994.. 5,012 627,305 144,925 (1,152,042) 37,083 (342,729)
Net loss...................... (566,340) (566,340)
Conversion of long-term notes
payable to common stock...... 4,413 87,594 473,009 560,603
Currency translation
adjustment................... (3,088) (3,088)
----- -------- -------- ----------- ------- ---------
Balances at October 31, 1995... 9,425 $714,899 $617,934 $(1,718,382) $33,995 $(351,554)
===== ======== ======== =========== ======= =========
</TABLE>

See accompanying notes.

F-23
<PAGE>

ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS TEN MONTHS
ENDED ENDED
DECEMBER 31, OCTOBER 31,
1994 1995
------------ -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss............................................. $(625,495) $(566,340)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization...................... 147,262 162,201
Other.............................................. 24,815 49,180
Accrued interest on stockholder loan converted to
equity............................................ -- 14,921
Changes in operating assets and liabilities:
Accounts receivable............................... (170,352) 150,503
Inventories....................................... (23,389) 20,692
Prepaid expenses.................................. 3,950 4,661
Other assets...................................... (25,123) 32,691
Accounts payable.................................. 42,056 73,777
Accrued expenses and other accrued liabilities.... 95,717 (3,453)
Deferred revenue.................................. 99,559 132,774
--------- ---------
Net cash provided by (used in) operating
activities..................................... (431,000) 71,607
INVESTING ACTIVITIES
Purchase of property and equipment, net.............. (68,387) (38,278)
Increase in capitalized software costs............... (92,092) (97,431)
Proceeds from sale of property and equipment......... 27,026 --
--------- ---------
Net cash used in investing activities........... (133,453) (135,709)
FINANCING ACTIVITIES
Proceeds from research and development loans......... 158,507 --
Proceeds from stockholder loans...................... 111,359 220,333
Proceeds from long-term debt......................... -- 107,308
Principal payments on long-term debt................. (51,694) (163,921)
Proceeds from sale of common stock................... 175,117 --
--------- ---------
Net cash provided by financing activities....... 393,289 163,720
Currency translation effect on cash and cash
equivalents......................................... 4,430 702
--------- ---------
Net increase (decrease) in cash and cash
equivalents......................................... (166,734) 100,320
Cash and cash equivalents at beginning of period..... 184,010 17,276
--------- ---------
Cash and cash equivalents at end of period........... $ 17,276 $ 117,596
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest............................... $ 40,231 $ 52,222
========= =========
Non-cash items affecting financing activities:
Conversion of long-term notes payable to common
stock............................................... $ 560,603 --
========= =========
</TABLE>

See accompanying notes.

F-24
<PAGE>

ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 1995

1. ACCOUNTING POLICIES

Nature of Business

About Software Corporation S.A. (the Company) develops and provides
connectivity tools for enterprise-wide systems. The Company was founded in
1988 as a Societe A Responsabilite Limitee (S.A.R.L.) under the name Advanced
Software Concepts S.A.R.L. and opened its U.S. headquarters in late 1993 in
California. In 1992, the status of the Company was changed from an S.A.R.L. to
a Societe Anonyme (S.A.). In June 1995, the Company changed its name to About
Software Corporation S.A.

Reporting Requirements

The Company is incorporated in France. Under financial reporting standards
applicable in France, the Company must maintain its financial statements in
French francs and is not required to prepare consolidated financial
statements.

The amounts in these financial statements have been derived from the French
franc financial statements, after allowing for the consolidation of its U.S.
subsidiary company.

Appropriate adjustments have been made, where necessary, to incorporate any
significant measurement and reporting differences between French reporting
requirements and generally accepted accounting principals in the United States
of America (U.S.).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, About Software Corporation. All significant
intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Fiscal Year

The Company's fiscal year end is December 31.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

Concentration of Credit Risk

Financial investments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash, cash equivalents and
accounts receivable. Cash and cash equivalents include cash on deposit in
checking accounts.

F-25
<PAGE>

ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. ACCOUNTING POLICIES (CONTINUED)

To date, accounts receivable have been primarily derived from revenue earned
from customers located in Europe and the U.S. The Company performs ongoing
credit evaluations of its customers and generally requires no collateral. The
Company maintains reserves for potential credit losses; historically, such
losses have not been material and have been within management's expectations.
At October 31, 1995, seven customers accounted for approximately 51.4% of
accounts receivable.

During the nine months ended December 31, 1994, two customers accounted for
approximately 30.1% of the Company's total revenue and for the ten months
ended October 31, 1995, one customer accounted for approximately 6.5% of the
Company's total revenue.

Fair Value of Financial Instruments

The carrying amount of the Company's financial instruments, including
accounts receivable and long-term debt, approximates fair value.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or
market.

Property and Equipment

Property and equipment are stated at cost and are being depreciated using
the straight-line and accelerated methods over the estimated useful lives of
one to ten years. Leasehold improvements are stated at cost and are being
amortized over the lesser of the term of the lease or estimated useful life of
the asset.

Income Taxes

Revenue Recognition

Software License Fees:

The Company recognizes revenue in accordance with the provisions of AICPA
Statement of Position No. 91-1, Software Revenue Recognition. Software license
fees represent revenue derived from the license of the Company's proprietary
software. License revenue is typically recognized upon shipment, net of
allowances for estimated future returns. However, license revenue under
certain license agreements is recognized upon fulfillment of contractual
obligations based upon achievement of specified milestones, which may include
delivery, installation, and final acceptance.

Services and Other:

Maintenance is recognized ratably over the term of the agreement.
Professional and technical service revenue is recognized as the services are
performed.

Research and Development

F-26
<PAGE>

ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. ACCOUNTING POLICIES (CONTINUED)

the establishment of technological feasibility. Based upon the Company's
product development process, technological feasibility is established upon
completion of a commercially viable working model. Costs incurred by the
Company between completion of the commercially viable working model and the
point at which the product is ready for general release have been capitalized.

Under French financial reporting standards, all development costs can be
capitalized up until the point at which a product is available for commercial
release, providing there is a reasonable chance of commercial success for the
product being developed. This reporting standard is less stringent with regard
to the capitalization of software development costs than that used in the U.S.

Management estimates that in order to satisfy generally accepted accounting
principles in the U.S., only 12.75% of such capitalizations made for French
reporting purposes should be capitalized for U.S. reporting purposes.
Accordingly, these financial statements reflect the appropriate adjustments to
record capitalized software development costs at 12.75% of those
capitalizations made for French financial reporting purposes.

Such amounts are being amortized over a period of one to eight years.

Foreign Currency Translation

The financial statements of the Company are denominated in French francs and
have been translated into U.S. dollars in accordance with Statement of
Financial Accounting Standards No. 52, Foreign Currency Translation. Statement
of operations amounts have been translated using average exchange rates. The
gains and losses resulting from the changes in exchange rates have been
reported separately as a component of stockholders' equity.

The aggregate transaction gains and losses were insignificant for all
periods presented.

Recent Accounting Pronouncements

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed Of, which establishes
criteria for the recognition and measurement of impairment loss associated
with long-lived assets. The Company will be required to adopt this standard in
the first quarter of 1996 for U.S. reporting purposes. Based on the Company's
initial evaluation, adoption is not expected to have a material impact on the
Company's financial position or results of operations.

2. INDEBTEDNESS

Line-of-Credit

The Company has a line-of-credit with a financial institution which provides
for maximum available borrowings of $20,000 (100,000FF). Interest on the line
is payable monthly at the bank's prime rate plus 4.6% (12.8% at October 31,
1995). Borrowings under the line are due on demand and are secured by all
assets of the Company. At October 31, 1995, there were no amounts outstanding
under the line-of-credit.

The Company also had a temporary line-of-credit with a financial institution
which provided for maximum available borrowings of $40,000 (200,000FF).
Interest on the line was payable monthly at the bank's prime rate plus 4.6%
(12.8% at October 31, 1995). Borrowings under the line were due on demand and
were secured by all assets of the Company. This agreement expired November 15,
1995. At October 31, 1995, there were no amounts outstanding under the line-
of-credit.

F-27
<PAGE>

ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. INDEBTEDNESS (CONTINUED)

Long-term Debt

<TABLE>
<S> <C>
Secured term bank loans, due in monthly installments of $615 to
$7,237, which includes interest ranging from 7.25% to 11.55%, with
final installments due from March 1998 to October 1998............ $363,919
Secured, non-interest bearing, term bank loan from a French
governmental agency, due in annual installments of $48,381, with
the final installment due in September 1999....................... 179,596
Other.............................................................. 29,785
--------
573,300
Less current portion............................................... 214,912
--------
$358,388
========
</TABLE>

Total interest expense for the nine months ended December 31, 1994 and for
the ten months ended October 31, 1995 was approximately $49,000 and $52,000,
respectively.

3. INCOME TAXES

Deferred income taxes reflect the tax effects of temporary differences
between the financial statement basis and tax basis of the Company's assets
and liabilities.

The Company has no significant temporary differences, other than the
accounting for capitalized software costs for French and U.S. reporting
purposes and operating loss carryforwards, under French or U.S. taxation law
which could give rise to deferred tax assets or liabilities.

At October 31, 1995, the Company has cumulative net operating loss
carryforwards of approximately $437,000 for French income tax purposes. The
availability of the net operating loss carryforwards to offset future taxable
income is subject to significant limitations. The loss carryforward will
expire at various dates beginning in 1999. The Company also has approximately
$150,000 of cumulative net operating losses for U.S. income tax purposes that
expire at various dates beginning in 2004.

No deferred tax asset has been recorded as it is believed to be more likely
than not that there will be no future tax benefits from temporary differences.

4. LEASE COMMITMENTS

The Company leases its office facilities under various operating leases
expiring at various times through fiscal 1998.

Future minimum annual rental commitments under the lease agreements for the
periods ending December 31 are as follows:

Total rent expense for the nine months ended December 31, 1994 and the ten
months ended October 31, 1995 was approximately $122,000 and $132,000,
respectively.

F-28
<PAGE>

ABOUT SOFTWARE CORPORATION S.A. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. SUBSEQUENT EVENT

On November 1, 1995, the Company was acquired by White Pine Software, Inc.,
a developer and distributor of desktop video conferencing software for the
Internet and intranets, as well as X Windows and terminal emulation software.
White Pine Software, Inc. is located in the U.S.

The acquisition was effected by the issuance of 1,990,956 shares of White
Pine Software, Inc.'s common stock to the shareholders of the Company.

F-29
<PAGE>

[Graphic: Picture of North America and surrounding area]

[Graphic: White Pine Software, Inc. pine tree logo] White Pine

[Graphic: Personal computer monitor displaying Enhanced CU-SeeMe windows,
together with digital camera]

[Graphic: Enhanced CU-SeeMe logo] Enhanced CU-SeeMe Desktop Videoconferencing

White Pine's Enhanced CU-SeeMe provides a software solution for desktop
videoconferencing over the Internet and intranets. Enhanced CU-SeeMe offers
full-color video, audio, chat window and whiteboard group collaboration to
businesses, educational institutions, government organizations and individuals
around the world.

[Graphic: Personal computer monitor displaying eXodus windows]

[Graphic: eXodus logo] eXodus X Server Software

White Pine's eXodus products provide a comprehensive line of desktop X
Windows solutions that permit seamless interoperability between local and
remote environments. eXodus incorporates an X server that enables Windows and
Macintosh users to access and share applications on any UNIX, VMS or Windows
NT host.

[Graphic: Personal computer monitor displaying 5PM screen]

[Graphic: 5PM logo] 5PM Terminal Emulation

White Pine's 5PM products provide desktop terminal emulation solutions for
enterprise legacy systems. 5PM enables Windows and Macintosh users to access
data and applications residing on IBM mainframe, AS/400, UNIX, VAX and HP
hosts.
<PAGE>

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS NOT CONTAINED
HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY
OF THE UNDERWRITERS OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER
THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY, TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO
MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON. 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............................................................. 6
The Company.............................................................. 18
Use of Proceeds.......................................................... 19
Dividend Policy.......................................................... 19
Capitalization........................................................... 20
Dilution................................................................. 21
Selected Financial Data.................................................. 22
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 23
Business................................................................. 29
Management............................................................... 46
Certain Transactions..................................................... 52
Principal Stockholders................................................... 53
Description of Capital Stock............................................. 55
Shares Eligible for Future Sale.......................................... 58
Underwriting............................................................. 60
Legal Matters............................................................ 62
Experts.................................................................. 62
Change in Independent Auditors........................................... 62
Additional Information................................................... 63
Index to Financial Statements............................................ F-1
</TABLE>

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

UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS EF-
FECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIRE-
MENT 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.

3,000,000 SHARES

COMMON STOCK

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

PROSPECTUS

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

COWEN & COMPANY

OPPENHEIMER & CO., INC.

VOLPE, WELTY & COMPANY

, 1996

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

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law affords a Delaware
corporation the power to indemnify its present and former directors and
officers under certain conditions. Article SEVENTH of the Restated Charter
provides that the Company shall indemnify each person who at any time is, or
shall have been, a director or officer of the Company, and is threatened to be
or is made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is, or was, a director or officer of the Company,
or is or was serving at the request of the Company as a director, officer,
employee, trustee, or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement incurred in connection
with any such action, suit or proceeding to the maximum extent permitted by
the Delaware General Corporation Law.

Section 102(b)(7) of the Delaware General Corporation Law gives a Delaware
corporation the power to adopt a charter provision eliminating or limiting the
personal liability of directors to the corporation or its stockholders for
breach of fiduciary duty as directors, provided that such provision may not
eliminate or limit the liability of directors for (i) any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) any
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) any payment of a dividend or approval of a
stock purchase that is illegal under Section 174 of the Delaware Corporation
Law or (iv) any transaction from which the director derived an improper
personal benefit. Article NINTH of the Restated Charter provides that to the
maximum extent permitted by the General Corporation Law of the State of
Delaware, no director of the Company shall be personally liable to the Company
or to any of its stockholders for monetary damages arising out of such
director's breach of fiduciary duty as a director of the Company. No amendment
to or repeal of the provisions of Article NINTH shall apply to or have any
effect of the liability or the alleged liability of any director of the
Corporation with respect to any act or failure to act of such director
occurring prior to such amendment or repeal. A principal effect of such
Article NINTH is to limit or eliminate the potential liability of the
Company's directors for monetary damages arising from breaches of their duty
of care, unless the breach involves one of the four exceptions described in
(i) through (iv) above.

Section 145 of the Delaware General Corporation Law also affords a Delaware
corporation the power to obtain insurance on behalf of its directors and
officers against liabilities incurred by them in those capacities. The Company
intends to procure a directors' and officers' liability and company
reimbursement liability insurance policy that will (a) insure directors and
officers of the Company against losses (above a deductible amount) arising
from certain claims made against them by reason of certain acts done or
attempted by such directors or officers and (b) insure the Company against
losses (above a deductible amount) arising from any such claims, but only if
the Company is required or permitted to indemnify such directors or officers
for such losses under statutory or common law or under provisions of the
Restated Charter or the Restated By-Laws.

Reference is also made to Section 6 of the Underwriting Agreement between
the Company and the Underwriters, filed as Exhibit 1.1 to this Registration
Statement, for a description of indemnification arrangements between the
Company and the Underwriters.

II-1
<PAGE>

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the various expenses to be paid by the
Company in connection with the issuance and distribution of the securities
being registered, other than the underwriting discount. All amounts shown are
estimates except for amounts of filing and listing fees.

<TABLE>
<S> <C>
Filing fee of Securities and Exchange Commission................... $ 11,897
Filing fee of National Association of Securities Dealers, Inc...... 3,950
Listing fee of Nasdaq Stock Market, Inc............................ 40,070
Premium for directors' and officers' insurance..................... 125,000
Accounting fees and expenses....................................... 275,000
Blue sky fees and expenses (including related legal fees).......... 20,000
Legal fees and expenses............................................ 350,000
Printing and engraving expenses.................................... 100,000
Transfer agent fees................................................ 5,000
Miscellaneous...................................................... 19,083
--------
Total.......................................................... $950,000
========
</TABLE>

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

The following information is furnished with regard to all securities sold by
the Company within the past three years which were not registered under the
Securities Act.

(a) On the dates set forth below the Company issued and sold the number of
shares of its Common Stock indicated upon exercise of stock options held by
certain of its employees.

<TABLE>
<CAPTION>
NUMBER OF EXERCISE PRICE
DATE OF SALE SHARES ISSUED PER SHARE
------------ ------------- --------------
<S> <C> <C>
October 28, 1994 167 $1.00
December 27, 1994 250 $1.00
May 26, 1995 694 $1.00
June 30, 1995 1,944 $0.50
July 12, 1995 56 $1.50
July 12, 1995 167 $1.00
July 13, 1995 10,000 $0.50
April 25, 1996 1,300 $1.00
April 25, 1996 330 $1.50
June 14, 1996 333 $1.50
June 14, 1996 83 $2.00
July 12, 1996 20,000 $1.00
July 16, 1996 1,549 $2.00
</TABLE>

(b) On August 31, 1993, the Company issued 403,847 shares of Common Stock to
5 stockholders of White Pine Software, Inc., a New Hampshire corporation, in
exchange for all of the outstanding capital stock of such corporation.

(c) On April 1, 1994, the Company issued 595,840 shares of Common Stock to
the stockholder of Grafpoint in connection with the merger of Grafpoint into
the Company.

(d) On December 15, 1995, the Company issued 1,781,906 shares of Common
Stock to 10 stockholders of About Software Corporation S.A. as partial
consideration for the outstanding stock of About Software Corporation S.A.

II-2
<PAGE>

(e) On March 19, 1996, the Company issued 343,053 shares of $5.83 Stock to
affiliates of Advent International Corporation for an aggregate purchase price
of $2,000,000.

(f) On April 17, 1996, the Company issued 51,458 shares of $5.83 Stock to a
stockholder of the Company for an aggregate purchase price of $300,000.

(g) On July 31, 1996, pursuant to an exclusive software license agreement
with Cornell Research Foundation, Inc., the Company issued to the Cornell
Research Foundation, Inc. a warrant to purchase 20,000 shares of Common Stock
at a price of $3.00 per share.

The issuances described in Item 26(a) were made in reliance upon the
exemptions from registration set forth in Rule 701 under the Securities Act
and Section 4(2) of the Securities Act relating to sales by an issuer not
involving any public offering. The issuances described in Items 15(b), (c),
(d), (e), (f) and (g) were made in reliance upon the exemption from
registration set forth in Section 4(2) of the Securities Act relating to sales
by an issuer not involving any public offering. None of the foregoing
transactions involved a distribution or public offering. No underwriters were
engaged in connection with the foregoing issuances of securities, and no
underwriting commissions or discounts were paid.

ITEM 27. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.1* Form of Underwriting Agreement
3.1* Amended and Restated Certificate of Incorporation of the Company
3.2* Proposed form of Amended and Restated Certificate of Incorporation
of the Company to become effective immediately following the
offering
3.3* By-Laws of the Company, as amended
3.4* Proposed form of Amended and Restated By-Laws of the Company to
become effective upon the closing of the offering
4.1 Specimen certificate for common stock, $.01 par value, of the
Company
5.1* Opinion of Foley, Hoag & Eliot llp
10.1* Visual International, Inc. Stock Option Plan (1992), as amended
10.2* White Pine Software, Inc. Stock Option Plan (1993), as amended
10.3* White Pine Software, Inc. Stock Option Plan (1994)
10.4* White Pine Software, Inc. Stock Option Plan (1995), as amended
10.5* White Pine Software, Inc. Stock Option Plan (1996)
10.6* White Pine Software, Inc. 1996 Incentive and Nonqualified Stock
Option Plan
10.7* White Pine Software, Inc. 1996 Employee Stock Purchase Plan
10.8* Employment Agreement dated January 3, 1994 with Howard R. Berke,
as amended
10.9* Employment Agreement dated October 10, 1995 with Killko A.
Caballero
10.10* Nondisclosure and Noncompetition Agreement dated February 15, 1996
with David O. Bundy
10.11+ Exclusive Software License Agreement dated June 1, 1996 between
Cornell Research Foundation, Inc. and the Company
10.12* Common Stock Purchase Warrant of the Company dated July 31, 1996,
issued to Cornell Research Foundation, Inc.
10.13* Commercial Loan Agreement dated December 30, 1994 between Fleet
Bank--NH and the Company, as amended
10.14* $1,000,000 Revolving Line of Credit Promissory Note of the Company
dated December 30, 1994, issued to Fleet Bank--NH, as amended
10.15* Security Agreement dated December 30, 1994 between Fleet Bank--NH
and the Company
10.16* Collateral Assignment and Security Agreement dated December 30,
1994 between Fleet Bank--NH and the Company, as amended
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.17* $53,000 Commercial Promissory Note of the Company dated August 25,
1995, issued to Fleet Bank--NH
10.18* Loan Contract from Credit Agricole, Alpes-Maritimes Regional
Division to About Software Corporation S.A. in the principal
amount of FF 800,000
10.19* Loan Contract from Credit Agricole, Alpes-Maritimes Regional
Division to About Software Corporation S.A. in the principal
amount of FF 1,800,000
10.20* Loan Contract from Credit Agricole, Alpes-Maritimes Regional
Division to About Software Corporation S.A. in the principal
amount of FF 180,000
10.21* Stock Purchase Agreement dated March 19, 1996 among certain
investors and the Company, as amended
10.22* Stock Purchase Agreement dated April 17, 1996 between J.F. Shea,
Co., Inc. and the Company, as amended
10.23* Amended and Restated Registration Rights Agreement dated March 19,
1996 among certain stockholders of the Company and the Company, as
amended
10.24* Acquisition Agreement dated October 10, 1995 among former
stockholders of About Software Corporation S.A. and the Company
10.25* Indenture of Lease dated May 15, 1996 by Nash-Tamposi Limited
Partnership, Five N
Associates, Ballinger Properties, L.L.C. and the Company
11.1* Statement re computation of per share earnings
21.1* List of subsidiaries of the Company
23.1 Consent of Ernst & Young LLP
23.2 Consent of Ernst & Young Audit
23.3* Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1)
24.1* Power of Attorney (contained on page II-6 of this Registration
Statement as filed on August 2, 1996)
27.1* Financial Data Schedules for fiscal year ended December 31, 1995
and six months ended June 30, 1996
</TABLE>
- --------
+ Previously filed under application for confidential treatment.
* Previously filed.

ITEM 28. UNDERTAKINGS.

The small business issuer will 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.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of the small
business issuer 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 small business issuer 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.

II-4

<PAGE>

If the small business issuer relies on Rule 430A under the Securities Act,
the small business issuer will:

(1) for determining any liability under the Securities Act, treat 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 small business issuer under Rule 424(b)(1), or
(4), or 497(h) under the Securities Act as part of this registration
statement as of the time the Commission declared it effective; and

(2) for determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.

II-5
<PAGE>

SIGNATURES

IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM SB-2 AND AUTHORIZED THIS AMENDMENT
NO. 2 TO REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
IN THE CITY OF NASHUA, NEW HAMPSHIRE ON OCTOBER 7, 1996.

White Pine Software, Inc.

/s/ Richard M. Darer
By: _________________________________
RICHARD M. DARER
CHIEF FINANCIAL OFFICER AND VICE
PRESIDENT OF ADMINISTRATION

IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
AMENDMENT NO. 2 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED ON OCTOBER 7, 1996.

SIGNATURE TITLE

* President, Chief Executive Officer and
- ------------------------------------- Director (Principal Executive
HOWARD R. BERKE Officer)

/s/ Richard M. Darer Chief Financial Officer and Vice
- ------------------------------------- President of Administration
RICHARD M. DARER (Principal Financial and Accounting
Officer)

* Director
- -------------------------------------
KILLKO A. CABALLERO

* Director
- -------------------------------------
ARTHUR H. BRUNO

* Director
- -------------------------------------
JONATHAN G. MORGAN

* Director
- -------------------------------------
PIERRE-GABRIEL VALLEE

*By: /s/ Richard M. Darer
_________________________________
RICHARD M. DARER
ATTORNEY-IN-FACT

II-6
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
<C> <S> <C>
1.1* Form of Underwriting Agreement
3.1* Amended and Restated Certificate of Incorporation of the
Company
3.2* Proposed form of Amended and Restated Certificate of
Incorporation of the Company to become effective
immediately following the offering
3.3* By-Laws of the Company, as amended
3.4* Proposed form of Amended and Restated By-Laws of the
Company to become effective upon the closing of the
offering
4.1 Specimen certificate for common stock, $.01 par value, of
the Company
5.1* Opinion of Foley, Hoag & Eliot llp
10.1* Visual International, Inc. Stock Option Plan (1992), as
amended
10.2* White Pine Software, Inc. Stock Option Plan (1993), as
amended
10.3* White Pine Software, Inc. Stock Option Plan (1994)
10.4* White Pine Software, Inc. Stock Option Plan (1995), as
amended
10.5* White Pine Software, Inc. Stock Option Plan (1996)
10.6* White Pine Software, Inc. 1996 Incentive and Nonqualified
Stock Option Plan
10.7* White Pine Software, Inc. 1996 Employee Stock Purchase Plan
10.8* Employment Agreement dated January 3, 1994 with Howard R.
Berke, as amended
10.9* Employment Agreement dated October 10, 1995 with Killko A.
Caballero
10.10* Nondisclosure and Noncompetition Agreement dated February
15, 1996 with David O. Bundy
10.11+ Exclusive Software License Agreement dated June 1, 1996
between Cornell Research Foundation, Inc. and the Company
10.12* Common Stock Purchase Warrant of the Company dated July 31,
1996, issued to Cornell Research Foundation, Inc.
10.13* Commercial Loan Agreement dated December 30, 1994 between
Fleet Bank--NH and the Company, as amended
10.14* $1,000,000 Revolving Line of Credit Promissory Note of the
Company dated December 30, 1994, issued to Fleet Bank--NH,
as amended
10.15* Security Agreement dated December 30, 1994 between Fleet
Bank--NH and the Company
10.16* Collateral Assignment and Security Agreement dated December
30, 1994 between Fleet Bank--NH and the Company, as amended
10.17* $53,000 Commercial Promissory Note of the Company dated
August 25, 1995, issued to Fleet Bank--NH
10.18* Loan Contract from Credit Agricole, Alpes-Maritimes
Regional Division to About Software Corporation S.A. in the
principal amount of FF 800,000
10.19* Loan Contract from Credit Agricole, Alpes-Maritimes
Regional Division to About Software Corporation S.A. in the
principal amount of FF 1,800,000
10.20* Loan Contract from Credit Agricole, Alpes-Maritimes
Regional Division to About Software Corporation S.A. in the
principal amount of FF 180,000
10.21* Stock Purchase Agreement dated March 19, 1996 among certain
investors and the Company, as amended
10.22* Stock Purchase Agreement dated April 17, 1996 between J.F.
Shea, Co., Inc. and the Company, as amended
10.23* Amended and Restated Registration Rights Agreement dated
March 19, 1996 among certain stockholders of the Company
and the Company, as amended
10.24* Acquisition Agreement dated October 10, 1995 among former
stockholders of About Software Corporation S.A. and the
Company
10.25* Indenture of Lease dated May 15, 1996 by Nash-Tamposi
Limited Partnership, Five N Associates, Ballinger
Properties, L.L.C. and the Company
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
<C> <S> <C>
11.1* Statement re computation of per share earnings
21.1* List of subsidiaries of the Company
23.1 Consent of Ernst & Young LLP
23.2 Consent of Ernst & Young Audit
23.3* Consent of Foley, Hoag & Eliot LLP (included in Exhibit
5.1)
24.1* Power of Attorney (contained on page II-6 of the
Registration Statement
as filed on August 2, 1996)
27.1* Financial Data Schedules for fiscal year ended December 31,
1995 and six months ended June 30, 1996
</TABLE>
- --------
+ Previously filed under application for confidential treatment.
* Previously filed.

<PAGE>

EXHIBIT 4.1

Engraved specimen stock certificate bearing the following text:

[Obverse of Certificate]

[Graphic: White Pine Software, Inc. pine tree logo]

WHITE PINE SOFTWARE, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MA
OR NEW YORK, NY

NUMBER SHARES
COMMON STOCK COMMON STOCK

CUSIP 964347 10 8

SEE REVERSE FOR CERTAIN DEFINITIONS

This Certifies that

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $.01 PER
SHARE, OF

White Pine Software, Inc. (the "Corporation") transferable on the books of the
Corporation in person or by duly authorized attorney upon surrender of this
Certificate properly endorsed or assigned. This Certificate and the shares
represented hereby are issued and held subject to the laws of the State of
Delaware and to the provisions of the Certificate of Incorporation and the By-
Laws of the Corporation, each as now in effect or hereafter amended. This
Certificate is not valid unless countersigned and registered by the Transfer
Agent and Registrar.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by the facsimile signatures of its duly authorized officers and sealed
with the facsimile seal of the Corporation.

Dated:

[Corporate seal bearing text:]
WHITE PINE SOFTWARE, INC. CORPORATE SEAL - 1992 - DELAWARE - *

/s/ Robert M. Putman /s/ Howard R. Berke
Treasurer and Assistant Secretary President

COUNTERSIGNED AND REGISTERED:

THE FIRST NATIONAL BANK OF BOSTON
TRANSFER AGENT AND REGISTRAR

By
Authorized signature
<PAGE>

[Reverse of Certificate]

WHITE PINE SOFTWARE, INC.

THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS AND SERIES OF STOCK.
THE CORPORATION WILL FURNISH TO THE HOLDER UPON WRITTEN REQUEST WITHOUT CHARGE A
STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR
RIGHTS.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
COM PROP - as community property

UNIF GIFT MIN ACT - _____________ Custodian ________________
(Cust) (Minor)
under Uniform Gifts to Minors
Act _____________
(State)

Additional abbreviations may also be used though not in the above list.

ASSIGNMENT

For value received, __________ hereby sell(s), assign(s), and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE [Box]

- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE,
OF ASSIGNEE)

______________ shares of the common stock represented by the within Certificate,
and do(es) hereby irrevocably constitute and appoint _________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated, ______ ________________________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.

SIGNATURE(S) GUARANTEED:

_________________________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our report dated June 28, 1996
(except Note 3, as to which the date is July 31, 1996) in Amendment No. 1 to
the Registration Statement of Form SB-2 and related Prospectus of White Pine
Software, Inc. for the registration of 3,000,000 shares of its common stock.

Ernst & Young LLP

Manchester, New Hampshire
October 3, 1996

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our report dated July 26,
1996, with respect to the consolidated financial statements of About Software
Corporation S.A. and Subsidiary included in Amendment No. 1 to the
Registration Statement on Form SB-2 and related Prospectus of White Pine
Software, Inc. for the registration of 3,000,000 shares of its common stock.

Ernst & Young Audit

/s/ Jacques Fournier

Jacques Fournier
Nice, France

October 3, 1996