VIALINK CO, SB-2, 2000-03-22

VIALINK CO
SB-2, 2000-03-22
COMPUTER PROGRAMMING SERVICES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 22, 2000

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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THE VIALINK COMPANY
(Name of Small Business Issuer in Its Charter)

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DELAWARE 7371 73-1247666
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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13800 BENSON ROAD
EDMOND, OKLAHOMA 73013-6417
TELEPHONE: (405) 936-2500
FACSIMILE: (405) 936-2599
(Address and telephone number of principal executive offices)

13155 NOEL ROAD, SUITE 800
DALLAS, TEXAS 75240
(Address of principal place of business or intended place of business)

J. ANDREW KERNER
CHIEF FINANCIAL OFFICER
THE VIALINK COMPANY
13155 NOEL ROAD, SUITE 800
DALLAS, TEXAS 75240
TELEPHONE: (972) 934-5500
FACSIMILE: (972) 934-5555
(Name, address and telephone number of agent for service)
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Copies to:

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<S> <C>
J. MATTHEW LYONS P.C. STEPHEN P. FARRELL
KAREN C. WEHNER SHARON L. FERKO
AKASH D. SETHI RICHARD MCKILLIGAN
BROBECK, PHLEGER & HARRISON LLP MORGAN, LEWIS & BOCKIUS LLP
301 CONGRESS AVE., SUITE 1200 101 PARK AVENUE
AUSTIN, TEXAS 78701 NEW YORK, NEW YORK 10178
TELEPHONE: (512) 477-5495 TELEPHONE: (212) 309-6000
FACSIMILE: (512) 477-5430 FACSIMILE: (212) 309-6273
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the 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, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

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

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

If delivery of the Registration Statement is expected to be made pursuant
to Rule 434, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE

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TITLE OF EACH CLASS OF PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1) REGISTRATION FEE
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Common Stock, $0.001 par value.............. $120,000,000 $31,680
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(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(o).
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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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not
permitted.

SUBJECT TO COMPLETION, DATED MARCH 22, 2000

[VIALINK LOGO]

COMMON STOCK

The viaLink Company is selling shares of common stock in this
offering. Our common stock is quoted on the Nasdaq SmallCap Market under the
symbol "IQIQ." We have applied to have our common stock listed for quotation on
the Nasdaq National Market under the symbol "VLNK." The last reported sale price
of our common stock on the Nasdaq SmallCap Market on March 20, 2000 was $37.13
per share.

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AN INVESTMENT IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISK.
THESE RISKS ARE DESCRIBED UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 7.
---------------------

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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS
PUBLIC COMMISSIONS TO VIALINK
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<S> <C> <C> <C>
Per Share............................................ $ $ $
Total................................................ $ $ $
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The underwriters may also purchase from certain stockholders up to an
additional shares of common stock at the public offering price, less
the underwriting discounts and commissions, to cover over-allotments.

Delivery of the shares of common stock will be made on or about
, 2000 against payment in immediately available funds.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

WIT SOUNDVIEW
ING BARINGS
A.G. EDWARDS & SONS, INC.
STEPHENS INC.

, 2000
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Description of inside front cover.

Our logo appears at the top right corner of the inside front cover of the
prospectus. Toward the top of the inside front cover page is a caption that
reads, "Are you ready?" The following text follows this:

o Synchronize critical product, price and promotion information through a
single connection

o Collaborate with every member of your trading community

o Improve decision-making

o Increase supply chain efficiency

The bottom half of the page contains two diagrams. The diagram on the left
contains several circles representing participants in the consumer packaged
goods and grocery industries' supply chain. The circles are linked through a web
of multiple connections. The text "That was then..." appears below this diagram.

The diagram on the right is a wheel and spoke diagram. Each of the circles
representing supply chain participants has one connection to a central circle
labeled "syncLink." The text "This is now." appears below the diagram.

Description of inside back cover.

Our logo appears in the upper right hand corner.

The inside cover page includes language as follows:

"The cornerstone of e-business"

Below this language is a bar graph with three vertical bars labeled chain
pricing, item movement and scan based trading. The chain pricing bar contains a
picture of a computer. The item movement bar contains a picture of boxes on a
hand cart. The scan based trading bar contains a picture of a shopping cart. The
three vertical bars are above a horizontal bar labeled syncLink.

Below the bar graph appears the following text:

o syncLink - synchronizes product, price and promotion information.

o Chain Pricing - allows authorized suppliers to share price and promotion
information.

o Item Movement - provides trading partners with timely retail sales and
warehouse item information.

o Scan Based Trading - provides information to allow trading partners to
transact business based on actual retail sales.

At the bottom of the inside front cover is the caption, "Are you viaLink
ready?" To the right of this caption is the logo of our viaLink ready Program.

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TABLE OF CONTENTS

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PAGE
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Prospectus Summary.......................................... 3
Risk Factors................................................ 7
Note Regarding Forward-Looking Statements................... 16
Use of Proceeds............................................. 16
Price Range of Common Stock................................. 17
Capitalization.............................................. 18
Dividend Policy............................................. 18
Selected Financial Data..................................... 19
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 20
Business.................................................... 26
Management.................................................. 38
Certain Transactions........................................ 48
Principal Stockholders...................................... 50
Description of Securities................................... 51
Shares Eligible for Future Sale............................. 55
Underwriting................................................ 57
Legal Matters............................................... 59
Experts..................................................... 59
Where You Can Find Additional Information................... 59
Index to Financial Statements............................... F-1
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. WE
ARE OFFERING TO SELL AND SEEKING OFFERS TO BUY SHARES OF COMMON STOCK ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK.

ASSUMPTIONS THAT APPLY TO THIS PROSPECTUS

This offering is for shares. The underwriters have a 30-day
option to purchase up to additional shares from certain stockholders
to cover over-allotments. Some of the disclosures in this prospectus would be
different if the underwriters exercise their over-allotment option. Unless we
state otherwise, the information in this prospectus assumes that the
underwriters will not exercise their over-allotment option.

Except where we state otherwise, the information we present in this
prospectus reflects a 2-for-1 split of our common stock effective as of December
21, 1999 and the proposed 2-for-1 split of our common stock to be effected as of
March 28, 2000 in the form of a stock dividend paid to the stockholders of
record on March 17, 2000.
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All references in this prospectus to "viaLink," "we," "us" and "our" are
intended to refer to The viaLink Company, a Delaware corporation, and its
predecessors Applied Intelligence Group, Inc., an Oklahoma corporation, and The
viaLink Company, an Oklahoma corporation.

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PROSPECTUS SUMMARY

This summary highlights only selected information contained elsewhere in
this prospectus. This summary is not complete and does not contain all of the
information that you should consider before investing in our common stock.
Before making an investment decision, you should read the entire prospectus,
especially the risks of investing in our common stock discussed under the
caption "Risk Factors," and the attached financial statements and related notes.

THE VIALINK COMPANY

We are a leading provider of subscription-based, business-to-business
electronic commerce services that enable consumer packaged goods (CPG) and
grocery industry participants to efficiently manage their highly complex supply
chain information. Our services allow manufacturers, wholesalers, distributors
and retailers to communicate and synchronize item, price and promotion
information in a more cost-effective and accessible way than has been possible
using traditional electronic and paper-based methods. We believe our solution
allows retailers and suppliers to increase sales and reduce costs. We market our
services through our direct sales force and indirectly through our alliances,
particularly those we have with Ernst & Young and i2 Technologies. Our 620
customers include small suppliers and retailers as well as large national and
regional customers, such as Coors Brewing Company, Kraft Foods, Spartan Stores
and Unified Western Grocers.

The large and highly fragmented U.S. CPG and grocery industries represented
$851 billion in retail sales in 1997. These industries manufacture and
distribute a wide variety of prepackaged items primarily sold in supermarkets,
convenience stores, small grocery stores, mass merchandisers, warehouse clubs
and chain drugstores. The movement of merchandise from manufacturer to retailer
is characterized by various multi-tiered distribution methods, such as
direct-to-store deliveries and intermediate deliveries through wholesalers,
distributors and retailer warehouses. This distribution structure is commonly
referred to as the "supply chain." Communicating information throughout the
supply chain is complex due to the large number of items managed at each
retailer, frequent changes in item, price and promotion information, and
variations of product assortment, pricing and promotion by geography, store size
or demographic factors.

Traditionally, retailers and suppliers have used a manual, paper-based
system to manage their supply chain information, often resulting in operational
inefficiencies and administrative errors. Although electronic data interchange
has been an available alternative for several years, many retailers and
suppliers find this approach too costly and technologically difficult to
implement. As a result, only a small percentage of the industries' suppliers and
retailers have access to electronic supply chain applications. Currently, there
is no established universal, low-cost electronic method for manufacturers,
wholesalers, distributors and retailers to share item, price and promotion
information easily and efficiently. Our solution connects authorized trading
partners across technology platforms with varied degrees of sophistication.

We believe our services provide the only Internet-based electronic commerce
solution currently available to the CPG and grocery industries for synchronizing
item, price and promotion information. Our syncLink service replaces the
multiple connections among manufacturers, wholesalers, distributors and
retailers with a single electronic connection to a synchronized, secure, shared
database. As the item, price and promotion information-of-record for
participating trading partners, syncLink forms the foundation for our other
electronic commerce services: Chain Pricing, Item Movement and Scan Based
Trading.

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Our solution enables subscribers to:

- Improve the visibility and sharing of item, price and promotion
information throughout the supply chain;

- Reduce supply chain information inefficiencies;

- Manage data complexity;

- Collaborate on product and promotion decisions; and

- Improve overall service levels to their customers.

Using our direct sales force and alliance relationships, we intend to
create a network effect by targeting leading national and regional retailers and
suppliers and providing the services necessary to create efficiencies for all
key supply chain participants. We believe the value of our services to our
subscribers will increase with the addition of new trading partners, thereby
increasing the overall value of our solution. We intend to become the
industry-accepted electronic commerce utility for synchronizing item, price and
promotion information in the CPG and grocery industries. As part of our strategy
to achieve this objective, we also intend to:

- Build on our first mover advantage and increase brand awareness;

- Leverage our strategic alliances and relationships;

- Expand our service offerings; and

- Enter into new industries and geographic markets.

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We were incorporated in the State of Oklahoma in 1985. We changed our name
to The viaLink Company in 1998 and reincorporated in the State of Delaware in
1999. Our principal executive offices are located at 13800 Benson Road, Edmond,
Oklahoma 73013-6417, and our telephone number is (405) 936-2500. Our Web site is
located at http://www.vialink.com. Information contained in, or linked to, our
Web site does not constitute part of this prospectus.

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viaLink(R) and Chainlink(R) are our registered trademarks. viaLink
ready(SM) and syncLink(SM) are our service marks. All other trademarks and
service marks appearing in this prospectus are the trademarks or service marks
of the respective companies that use them.

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THE OFFERING

Common stock we are
offering................... shares

Common stock to be
outstanding after this
offering................. shares

Use of Proceeds............ We intend to use the net proceeds for:

- Investing in and developing our services and
technology;

- Expanding our sales and marketing activities;

- Expanding into new markets;

- Moving our corporate headquarters to Dallas,
Texas; and

- Working capital and other general corporate
purposes.

We may also use a portion of the proceeds for
acquisitions, strategic alliances or joint
ventures. See "Use of Proceeds."

Nasdaq SmallCap Market
Symbol................... IQIQ

Proposed Nasdaq National
Market Symbol............ VLNK
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The number of shares of common stock to be outstanding after this offering
is based on the number of shares outstanding as of March 3, 2000. This number
excludes:

- 15,000,000 shares of common stock reserved for issuance pursuant to our
1999 Stock Option/Stock Issuance Plan, of which an aggregate of
10,653,056 shares of common stock are issuable upon the exercise of stock
options outstanding as of March 3, 2000 with a weighted average exercise
price of $5.01 per share;

- 45,000 shares of common stock issuable upon the exercise of warrants
outstanding as of March 3, 2000 with a weighted average exercise price of
$1.50 per share;

- 3,848,783 shares of common stock issuable upon the conversion of
outstanding convertible debt with a conversion price of $1.75 per share;

- 66,801 shares of common stock issued to each of i2 Technologies, Inc.,
Hewlett-Packard Company and Millennium Partners, L.P. in connection with
a private placement;

- 10,021 shares of common stock issuable upon the exercise of warrants at
an exercise price of $41.92 per share issued to each of i2 Technologies,
Hewlett-Packard and Millennium Partners in connection with a private
placement; and

- 785,000 shares of common stock reserved for issuance pursuant to our
employee stock purchase plan.

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SUMMARY FINANCIAL DATA

This information was derived from our audited financial statements. You
should read the following summary financial data together with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our financial statements and related notes included elsewhere in this
prospectus.

Prior to 1999, we derived substantially all of our revenues from providing
management consulting services and systems integration services. We sold the
assets underlying our management consulting services and system integration
services during 1998. Accordingly, the summary financial data as of and for the
year ended December 31, 1999 is not comparable to periods ending prior to 1999.

The "Pro Forma" column reflects the sale of an aggregate of 200,403 shares
of our common stock and warrants to purchase an additional 30,063 shares of our
common stock at an exercise price of $41.92 per share to i2 Technologies,
Hewlett-Packard and Millennium Partners in March 2000. The "Pro Forma As
Adjusted" column reflects our sale of shares of common stock at an offering
price of $ per share, after deducting underwriting discounts and commissions
and our offering expenses.

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AS OF DECEMBER 31, 1999
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PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
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BALANCE SHEET DATA:
Cash, cash equivalents and short term investments..... $15,095,748 $20,925,748 $
Working capital....................................... 13,850,135 19,680,135
Total assets.......................................... 23,238,589 29,068,589
Long-term debt........................................ 4,230,720 4,230,720
Total stockholders' equity............................ 16,771,348 22,601,351
</TABLE>

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RISK FACTORS

You should carefully consider the risks described below before making an
investment decision. You should also refer to the other information in this
prospectus, including our financial statements and the related notes. The risks
and uncertainties described below are those that we currently believe may
materially affect us. Additional risks and uncertainties that we are unaware of
or that we currently deem immaterial also may become important factors that
affect us.

DUE TO THE RECENT SALE OF OUR CONSULTING AND SYSTEMS INTEGRATION ASSETS AND THE
SALE OF OUR SUBSIDIARY, IJOB, INC., WE NEED TO REPLACE MOST OF OUR HISTORICAL
REVENUES WITH REVENUES FROM OUR VIALINK SERVICES.

We have historically derived substantially all of our revenues from
providing management consulting services and computer systems integration
services to the retail and wholesale distribution industries. In order to permit
us to focus our resources solely on developing and marketing our viaLink
services, we sold the assets underlying our management consulting services and
computer systems integration services, and we sold our wholly-owned subsidiary,
ijob, Inc. We had previously generated over 90% of our total revenues from these
operations.

As a result of these sales, we are now substantially dependent on revenues
generated from our viaLink services. Our viaLink services have achieved limited
market acceptance and, to date, have accounted for an insignificant amount of
our historical revenues. Consequently, we resemble a development stage company
and will face many of the inherent risks and uncertainties that development
stage companies face. These risks include, but are not limited to, our:

- Need for our services to achieve market acceptance and produce a
sustainable revenue stream;

- Need to expand sales, support and product development capabilities;

- Need to manage rapidly changing operations;

- Dependence upon key personnel;

- Reliance on strategic alliances and relationships;

- Ability to obtain financing on acceptable terms; and

- Ability to offer greater value than our competitors.

Our business strategy may not successfully address these risks. If we fail
to recognize significant revenues to replace the revenues lost in these sales,
our business, financial condition and operating results would be materially
adversely affected.

WE ARE SUBSTANTIALLY DEPENDENT ON OUR VIALINK SERVICES. IF OUR VIALINK SERVICES
FAIL TO BECOME ACCEPTED BY THE CONSUMER PACKAGED GOODS AND GROCERY INDUSTRIES,
OUR BUSINESS WILL BE MATERIALLY ADVERSELY AFFECTED.

Virtually all of our revenues for the foreseeable future will be derived
from implementation fees and subscription revenues from our viaLink services,
which may not achieve market acceptance. To date we have received an
insignificant amount of revenues from these services. The acceptance of our
syncLink service as an industry-wide shared database will depend upon
subscriptions from a large number of industry manufacturers, suppliers and
retailers. We cannot predict when a significant number of manufacturers,
suppliers and retailers will subscribe to our services, if ever. If our services
do not achieve market acceptance, or if market acceptance develops more slowly
than expected, our business, operating results and financial condition will be
seriously damaged.

A number of factors will determine whether our services achieve market
acceptance, including:

- Performance and functionality of our services;

- Ease of adoption;
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- Satisfaction of our initial subscribers;

- Success of our marketing efforts;

- Success of our strategic relationships and alliances;

- Successful completion and favorable reporting of our synchronization and
Scan Based Trading pilot expected in June 2000; and

- Continued acceptance of the Internet for business use.

The market for business-to-business electronic commerce services is
evolving rapidly. As the market evolves, customers, including our current
customers, may not choose our services.

WIDESPREAD INDUSTRY ADOPTION OF OUR SERVICES IS DEPENDENT UPON A CRITICAL MASS
OF LARGE NATIONAL RETAILERS AND SUPPLIERS SUBSCRIBING TO OUR SERVICES.

Our success depends on a significant number of large retailers using our
services and linking with manufacturers, wholesalers and distributors over the
Internet through syncLink. To encourage purchasers to use our services, syncLink
must offer a broad range of product, price and promotion information from a
large number of suppliers. However, to attract suppliers to subscribe to
syncLink, we must increase the number of retailers who use our services. If we
are unable to quickly build a critical mass of retailers and suppliers, we will
not be able to benefit from a network effect where the value of our services to
each subscriber significantly increases with the addition of each new
subscriber. Our inability to achieve this network effect would reduce the
overall value of our services to retailers and suppliers and, consequently,
would harm our business.

WE DEPEND ON SUPPLIERS FOR THE SUCCESS AND ACCURACY OF OUR SERVICES.

We depend on suppliers to subscribe to our services in sufficient and
increasing numbers to make our services attractive to retailers and,
consequently, other suppliers. In order to provide retailers accurate data, we
rely on suppliers to update their item, price and promotion information stored
in our database. We cannot guarantee that the item, price and promotion
information available from our services will always be accurate, complete and
current, or that it will comply with governmental regulations. Incorrect
information could expose us to liability if it harms users of our services or
could result in decreased adoption and use of our services.

WE HAVE A HISTORY OF OPERATING LOSSES AND EXPECT FUTURE OPERATING LOSSES.

We have a history of operating losses, and we expect to incur net losses
for the foreseeable future. We incurred net operating losses of approximately
$2.9 million in 1997, $1.5 million in 1998 and $13.8 million in 1999. As of
December 31, 1999, we had an accumulated deficit of approximately $13.6 million
representing the sum of our historical net losses. We expect to expend
significant resources to aggressively develop and market our services into an
unproven market. Therefore, we expect to have negative cash flow and net losses
from operations for the foreseeable future. We may never generate sufficient
revenues to achieve or sustain profitability or generate positive cash flow.

THE UNPREDICTABILITY OF OUR QUARTER-TO-QUARTER RESULTS COULD CAUSE OUR STOCK
PRICE TO BE VOLATILE OR DECLINE.

Our future operating results may vary significantly from quarter to quarter
due to a variety of factors, many of which are outside our control. Our expense
levels are based primarily on our estimates of future revenues and are largely
fixed in the short term. Due in large part to our uncertainty regarding the
success of our services, we cannot predict with certainty our quarterly revenues
and operating results. We may be unable to adjust spending rapidly enough to
compensate for any unexpected revenue shortfall caused by factors such as
delayed or lack of market acceptance of our services. Further, we believe that
period-to-period comparisons of our operating results are not necessarily a
meaningful indication of future
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performance, especially in light of the significant changes in our business that
we have undertaken. It is possible that in one or more future quarters, our
results may fall below the expectations of securities analysts or investors. If
this occurs, the trading price of our common stock would likely be volatile or
decline.

OUR STOCK PRICE MAY BE VOLATILE.

The market price of our common stock has been volatile in the past and may
be volatile in the future. The market price of our common stock may be
significantly affected by various factors, including but not limited to:

- Fluctuations in our operating results;

- Changes in financial estimates by securities analysts or our failure to
perform in line with these estimates;

- Timing of large national retailers and suppliers subscribing to our
services;

- Changes in market valuations of other technology companies;

- Announcements by us or our potential competitors relating to significant
technical innovations, acquisitions, strategic alliances and
relationships, joint ventures or investments;

- Departures of key personnel; and

- Downturns in the general economy.

IF OUR STRATEGIC ALLIANCES AND RELATIONSHIPS DO NOT PRODUCE THE ANTICIPATED
BENEFITS OR IF WE ARE UNABLE TO ENTER INTO ADDITIONAL FUTURE ALLIANCES AND
RELATIONSHIPS, OUR SERVICES MAY NOT ACHIEVE MARKET ACCEPTANCE.

Our business depends substantially on developing and maintaining strategic
alliances and relationships to develop, market and sell our services. We believe
our current and future strategic alliances and relationships will help us to
validate our technology, facilitate broad market acceptance of our services and
enhance our sales and marketing. Our current strategic alliances and
relationships may not provide the benefits we expect or the access to new
customers we anticipate, and they may not be sustained on favorable terms, if at
all. Further, we may not be able to enter into successful new strategic
alliances and relationships in the future. If we are unable to develop key
alliances and relationships or maintain and enhance existing alliances and
relationships, our business, operating results and financial condition would be
harmed.

A PROMISSORY NOTE WE ISSUED TO HEWLETT-PACKARD HAS LEVERAGED US CONSIDERABLY,
CAUSING FINANCIAL AND OPERATING RISK, AND MAY RESULT IN SIGNIFICANT DILUTION TO
OUR STOCKHOLDERS.

As a result of our issuing a $6.0 million subordinated secured convertible
promissory note to Hewlett-Packard, our debt service requirements will increase
substantially when we are required to repay the note in February 2004. The
degree to which we are leveraged could materially adversely affect our ability
to obtain future financing and could make us more vulnerable to industry
downturns, general economic downturns and competitive pressures. Our ability to
meet our debt obligations will be dependent upon our future performance, which
will be subject to financial, business and other factors affecting our
operations. Additionally, beginning in August 2000, all principal and interest
due under the note may be converted into shares of our common stock at $1.75 per
share, a substantial discount from our current stock price, which would result
in substantial dilution to our stockholders.

WE ARE DEPENDENT UPON THE OPERATION OF HEWLETT-PACKARD'S DATA CENTER FOR THE
TIMELY AND SECURE DELIVERY OF OUR SERVICES.

We use Hewlett-Packard's data center as the host for our services. We are
dependent on our continued relationship with Hewlett-Packard and on their data
center for the timely and secure delivery of

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our services. If Hewlett-Packard's data center fails to meet our expectations in
terms of reliability and security, our ability to deliver our services will be
seriously harmed, resulting in the potential loss of customers and subscription
revenue. Furthermore, if our relationship with Hewlett-Packard were terminated,
we would be forced to find another service provider to host our services. The
transition to another service provider could result in interruptions of our
services and could increase the cost of providing our services.

OUR SINGLE-SITE INFRASTRUCTURE AND SYSTEMS MAY BE VULNERABLE TO NATURAL
DISASTERS AND OTHER UNEXPECTED EVENTS, AND LOSSES WE INCUR AS A RESULT OF THESE
EVENTS COULD EXCEED THE AMOUNT OF INSURANCE WE CARRY.

The performance of our server and networking hardware and software
infrastructure is critical to our business, reputation and ability to provide
high quality services and attract and retain users of our services. We depend on
our single-site infrastructure and systems which are located at a secure,
underground Hewlett-Packard facility in Atlanta, Georgia. Any disruption to this
infrastructure resulting from a natural disaster or other event could result in
an interruption in our services. These interruptions, if sustained or repeated,
could impair our reputation, the quality of our services and our ability to
attract and retain users of our services.

Our systems and operations may be vulnerable to damage or interruption from
human error, natural disasters, power loss, telecommunications failures,
break-ins, sabotage, computer viruses, intentional acts of vandalism and similar
events. We do not have a formal disaster recovery plan or alternative provider
of hosting services. In addition, our business interruption insurance may not be
sufficient to compensate us for losses that could occur. Any system failure that
causes an interruption in services could result in fewer transactions and, if
sustained or repeated, could impair our reputation and the attractiveness of our
services or prevent us from providing our services entirely.

THE ROYALTIES WE MUST PAY TO ERNST & YOUNG AND I2 TECHNOLOGIES COULD ADVERSELY
AFFECT OUR ABILITY TO BECOME PROFITABLE.

Pursuant to an alliance agreement, we must pay Ernst & Young a royalty of
7% of our total revenues, excluding any revenues derived from Ernst & Young
audit clients, until May 2001. Upon meeting specified milestones relating to
significant Ernst & Young clients becoming our customers, these royalty payments
to Ernst & Young will continue in perpetuity.

Pursuant to a separate alliance agreement, we must pay i2 Technologies a
royalty of 5% of syncLink and Chain Pricing subscription services revenues over
the term of the agreement through December 31, 2003. The royalty payments we are
obligated to pay could inhibit our ability to become profitable and could have
an adverse effect on our operating results and financial condition.

WE EXPECT TO FACE INCREASED COMPETITION. IF WE ARE UNABLE TO COMPETE
SUCCESSFULLY, OUR BUSINESS WILL BE HARMED.

Currently, we do not know of any direct competition for our electronic
commerce services. However, we believe direct competition for our services will
develop and increase in the future. If we face increased competition, we may not
be able to sell our viaLink services on terms favorable to us. Furthermore,
increased competition could reduce our market share or require us to reduce the
price of our services.

To achieve market acceptance and thereafter to increase our market share,
we will need to continually develop additional services and introduce new
features and enhancements. Our potential competitors may have significant
advantages over us, including:

- Significantly greater financial, technical and marketing resources;

- Greater name recognition;

- Broader range of products and services; and

- Larger customer bases.
10
<PAGE> 13

Consequently, they may be able to respond more quickly to new or emerging
technologies and changes in customer requirements.

WE MUST ADAPT TO TECHNOLOGY TRENDS AND EVOLVING INDUSTRY STANDARDS TO REMAIN
COMPETITIVE.

The Web-based electronic commerce market is characterized by rapid changes
due to technological innovation, evolving industry standards and changes in
subscriber needs. Our future success will depend on our ability to continue to
develop and introduce a variety of new services and enhancements that are
responsive to technological change, evolving industry standards and customer
requirements on a timely basis. We cannot be certain that technological
developments and products and services our competitors introduce will not cause
our existing services, and new technologies in which we invest, to become
obsolete.

OUR OPERATING RESULTS MAY BE HARMED IF BUSINESS-TO-BUSINESS ELECTRONIC COMMERCE
OVER THE INTERNET DOES NOT CONTINUE TO GAIN ACCEPTANCE, PARTICULARLY IN THE
CONSUMER PACKAGED GOODS AND GROCERY INDUSTRIES.

Our ability to achieve market acceptance depends upon the consumer packaged
goods and grocery industries' widespread acceptance of the Internet as a vehicle
for business-to-business electronic commerce. There are a number of critical
issues concerning commercial use of the Internet, including security,
reliability, cost, quality of service and ease of use and access. Organizations
that have already invested substantial resources in other means of exchanging
information may be reluctant to implement Internet-based business strategies. We
cannot assure you that Internet-based information management utilizing viaLink,
or any other product, will become widespread. If the Internet fails to become
widely accepted by the consumer packaged goods and grocery industries, our
subscribers may be forced to use private communications networks which would
materially adversely affect our operating results.

UNDETECTED SOFTWARE ERRORS OR FAILURES FOUND IN OUR PRODUCTS MAY RESULT IN LOSS
OF OR DELAY IN MARKET ACCEPTANCE OF OUR PRODUCTS WHICH COULD MATERIALLY
ADVERSELY AFFECT OUR OPERATING RESULTS.

Errors or defects in our products may result in loss of revenues or delay
in market acceptance and could materially adversely affect our business,
operating results and financial condition. Applications such as ours may contain
errors or defects, sometimes called "bugs," particularly when first introduced
or when new versions or enhancements are released. Despite our testing, current
versions, new versions or enhancements of our products may still have defects
and errors after commencement of commercial operation. As a result of "bugs" in
our software, customers may experience data loss, data corruption or other
business disruption, which could subject us to potential liability.

PERFORMANCE PROBLEMS WITH OUR DATABASE OR SOFTWARE COULD SUBJECT US TO PRODUCT
LIABILITY CLAIMS WHICH, WHETHER OR NOT SUCCESSFUL, COULD MATERIALLY ADVERSELY
AFFECT OUR BUSINESS.

Our subscribers depend on our database to provide, access, manage and share
item, pricing and promotion information in an efficient and cost-effective
manner. Any errors, defects or other performance problems with our database,
software or services could result in financial or other damages to our
subscribers. A product liability claim, whether or not successful, could damage
our reputation and our business, operating results and financial condition. Our
service agreements with our subscribers typically contain provisions designed to
limit our exposure to potential liability claims. However, these contract
provisions may not preclude all potential claims. Product liability claims in
excess of insurance limits could require us to spend significant time and money
in litigation or to pay significant damages.

THE SECURITY OF OUR DATABASE COULD BE BREACHED, WHICH COULD DAMAGE OUR
REPUTATION AND DETER CUSTOMERS FROM USING OUR SERVICES.

We must protect our computer systems and networks from break-ins, security
breaches and other disruptive problems associated with the unauthorized use of
the Internet. Our database and services may be vulnerable to break-ins and
similar security breaches that jeopardize the security of the information

11
<PAGE> 14

stored in our database and transmitted through our computer systems and networks
and those of our subscribers. In addition, we could, in the future, be subjected
to denial of service, vandalism and other attacks on our systems by Internet
hackers. Due to the highly proprietary information that we retain in our
database, any security breach could adversely affect our ability to attract and
retain subscribers, damage our reputation and subject us to litigation.
Moreover, the security and privacy concerns of potential subscribers, as well as
concerns related to computer viruses, may inhibit the marketability of our
services.

Our services contain security protocols. We have also contracted with
third-party providers to provide security protocols for the transmission of data
over the Internet. Although we intend to continue our current security efforts
and to implement security technology and operational procedures to prevent
break-ins, damage and failures, these security efforts may fail. Our insurance
coverage may be insufficient in certain circumstances to cover claims that may
result from these events.

WE EXPECT OUR PLANNED AGGRESSIVE GROWTH TO STRAIN OUR RESOURCES.

We intend to expand our operations rapidly in the foreseeable future to
pursue existing and potential market opportunities. If this rapid growth occurs,
it will place significant demands on our management and operational resources.
We will need to hire additional sales and marketing, research and development
and technical personnel to increase and support our sales. We will also need to
hire additional support and administrative personnel, expand our customer
service capabilities, contract for third-party implementation resources and
expand our information management systems. From time to time, we have
experienced, and we expect to continue to experience, difficulty in hiring and
retaining talented and qualified employees. Our failure to attract and retain
the highly trained technical personnel that are essential to our product
development, marketing, service and support teams may limit the rate at which we
can generate revenue and develop new products or product enhancements. In order
to manage our growth effectively, we must implement and improve our operational
systems, procedures and controls on a timely basis. If we fail to implement and
improve these systems, our business, operating results and financial condition
may be materially adversely affected.

WE PLAN TO EXPAND INTO INTERNATIONAL MARKETS, WHICH WILL CAUSE OUR BUSINESS TO
BECOME SUSCEPTIBLE TO ADDITIONAL RISKS.

As part of our strategy, we plan to expand our presence and the sales of
our services outside the United States. Conducting international operations
would subject us to risks we do not face in the United States including:

- Currency exchange rate fluctuations;

- Unexpected changes in regulatory requirements;

- Longer accounts receivable payment cycles and difficulties in collecting
accounts receivables;

- Difficulties in managing and staffing international operations;

- Potentially adverse tax consequences, including restrictions on the
repatriation of earnings;

- The burdens of complying with a wide variety of foreign laws and
regulatory requirements;

- Reduced protection for intellectual property rights in some countries;

- Political and economic instability; and

- Language barriers.

Each country may have unique operational characteristics in each of their
CPG and grocery industries that may require significant modifications to our
existing services. In addition, we have limited experience in marketing, selling
and supporting our services in foreign countries. Development of these skills
may be more difficult or take longer than we anticipate due to the fact that the
Internet may not be used as widely in other countries or that the adoption of
electronic commerce may evolve slowly or may not evolve at all.
12
<PAGE> 15

As a result, we may not be successful in marketing our services to retailers and
suppliers in markets outside the United States.

WE PLAN TO MOVE OUR CORPORATE HEADQUARTERS TO DALLAS, TEXAS. THIS MOVE MAY
ADVERSELY AFFECT OUR OPERATIONS AND CAUSE US TO LOSE KEY PERSONNEL.

We intend to move our corporate headquarters from Edmond, Oklahoma to
Dallas, Texas within the next 12 months. We believe the move to Dallas will give
us greater access to technology and development personnel and resources. We
expect this move will place a significant strain on our operations and may cause
us to lose some of our employees, particularly our development staff. While we
anticipate that many of our employees will accept positions with us in Dallas,
we cannot assure you that all of our employees will be willing to relocate. If
we were to lose a significant number of employees, our management would have to
devote a significant amount of their time to recruiting and training efforts and
our business, financial condition and operating results may be materially
adversely affected. In addition, the lease on our facilities in Oklahoma extends
until 2005. If we are unable to sublease or assign these premises on acceptable
terms or if our landlord refuses to release us from our obligations under the
lease, we will remain liable for all or a portion of the remaining rental
payments, which would negatively affect our operating results.

OUR SUCCESS IS SUBSTANTIALLY DEPENDENT ON OUR ABILITY TO RETAIN AND ATTRACT KEY
PERSONNEL.

Our future performance depends on the continued service of our key senior
management team, Smalltalk programmers and sales personnel. The loss of the
services of one or more of our key personnel, in particular Lewis B. Kilbourne,
our Chief Executive Officer, could seriously harm our business. On October 1,
1998, we entered into an employment agreement with Dr. Kilbourne. This agreement
has a three-year term, with year-to-year renewals. We do not maintain a key man
life insurance policy for Dr. Kilbourne. Our future success also depends on our
continuing ability to attract, hire, train and retain a substantial number of
highly skilled managerial, technical, sales, marketing and customer support
personnel. Competition for qualified personnel is intense, and we may fail to
retain our key employees or to attract or retain other highly qualified
personnel.

IF WE MAKE FUTURE ACQUISITIONS OR ENTER INTO JOINT VENTURES OR ADDITIONAL
ALLIANCE ARRANGEMENTS, OUR MANAGEMENT'S ATTENTION MAY BE DIVERTED FROM OUR
OPERATIONS, WE MAY INCUR ADDITIONAL LIABILITIES AND WE MAY NOT SUCCESSFULLY
INTEGRATE ACQUIRED OPERATIONS.

In the future we may acquire additional businesses, products and
technologies, or enter into joint ventures or alliance arrangements that could
complement or expand our business. Management's negotiations of potential
acquisitions or joint ventures and alliance agreements and management's
integration of acquired businesses, products or technologies could divert their
time and resources. Any future acquisitions could require us to issue dilutive
equity securities, incur debt or contingent liabilities, amortize goodwill and
other intangibles or write-off in-process research and development and other
acquisition-related expenses. Further, we may not be able to successfully
integrate any acquired business, product or technology into our existing
operations or retain the key employees of the acquired business. If we are
unable to fully integrate an acquired business, product or technology, we may
not receive the intended benefits of that acquisition.

IF WE FAIL TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS OR FACE A
CLAIM OF INTELLECTUAL PROPERTY INFRINGEMENT BY A THIRD PARTY, WE COULD LOSE OUR
INTELLECTUAL PROPERTY RIGHTS OR BE LIABLE FOR SIGNIFICANT DAMAGES.

Our success is in part dependent upon our proprietary software technology.
Companies in the software industry have experienced substantial litigation
regarding intellectual property. Our subscription agreements contain provisions
prohibiting the unauthorized use, copying and transfer of our proprietary
information. We own no patents; rather, we rely on a combination of trade
secret, copyright and trademark laws as well as non-disclosure and
confidentiality agreements to protect our proprietary technology. However, these
13
<PAGE> 16

measures provide only limited protection, and we may not be able to detect
unauthorized use and take appropriate steps to enforce our intellectual property
rights.

Any litigation to enforce our intellectual property rights may divert
management resources and may not be adequate to protect our business. We also
could be subject to claims that we have infringed the intellectual property
rights of others. In addition, we may be required to indemnify our subscribers
for similar claims made against them. Any claims against us or any claims we may
seek to bring against others could require us to spend significant time and
money in litigation, pay damages, develop new intellectual property or acquire
licenses to intellectual property that is the subject of the infringement
claims. These licenses, if required, may not be available on acceptable terms.
Intellectual property claims against us could have a material adverse effect on
our business, operating results and financial condition.

WE DEPEND ON THIRD-PARTY TECHNOLOGY FOR USE IN OUR PRODUCTS. IF WE ARE UNABLE TO
CONTINUE TO USE THESE SOFTWARE LICENSES, OUR BUSINESS MAY BE MATERIALLY
ADVERSELY AFFECTED.

We currently, and in the future we expect to continue to, license or
otherwise obtain access to intellectual property of third parties. We rely upon
software that we license from third parties, including software that is
integrated with our internally developed software and used in our products to
perform key functions. These third-party software licenses may not continue to
be available to us on commercially reasonable terms. The loss of, or inability
to maintain or obtain, any of these software licenses, could result in delays in
our ability to provide our services or in reductions in the services we provide
until we integrate equivalent software that we develop internally or that we
identify and license from a third-party. Any delay in product development or in
providing our services could damage our business, operating results and
financial condition.

OUR CUSTOMER BASE IS CONCENTRATED AND OUR SUCCESS DEPENDS IN PART ON OUR ABILITY
TO RETAIN EXISTING CUSTOMERS AND SUBSCRIBERS.

If one or more of our major customers were to substantially reduce or
terminate their use of our services, our business, operating results and
financial condition would be harmed. In 1999, we derived 70% of our total
revenues from our five largest customers. Our largest customer in 1999 accounted
for approximately 27% of our total revenues. The amount of our revenues
attributable to specific customers is likely to vary from year to year. We do
not have long-term contractual commitments with any of our current subscribers,
and our subscribers may terminate their contracts with little or no advance
notice and without significant penalty. As a result, we cannot be certain that
any of our current subscribers will be subscribers in future periods. A
subscriber termination would not only result in lost revenue, but also the loss
of subscriber references that are necessary for securing future subscribers.

THE PRICE OF OUR COMMON STOCK MAY DECLINE DUE TO SHARES ELIGIBLE FOR FUTURE
SALE.

Sales of a substantial number of shares of common stock could adversely
affect the market price of the common stock and could impair our ability to
raise capital through the sale of equity securities. As of March 3, 2000, we had
outstanding 19,735,416 shares of common stock. Of these shares:

- 16,047,780 shares are freely tradable without restriction or further
registration under the Securities Act unless purchased by our
"affiliates;" and

- 3,687,636 shares of common stock are "restricted securities" as defined
in Rule 144 of the Securities Act.

An additional 1,541,052 shares of common stock are issuable upon the
exercise of currently exercisable options. Substantially all shares issued
following the exercise of these options will be freely tradable following the
termination of a lock-up arrangement for 120-days following the effective date
of this registration statement.

14
<PAGE> 17

An additional 45,000 shares of common stock are issuable upon the exercise
of currently exercisable warrants. All of the shares issued upon the exercise of
these warrants will be freely tradable.

Pursuant to the $6.0 million subordinated secured convertible promissory
note we issued to Hewlett-Packard, Hewlett-Packard may convert the note into
shares of our common stock at a conversion price of $1.75 per share beginning in
August 2000. Hewlett-Packard is also entitled to request the registration of
66,801 shares of our common stock purchased by them and 10,021 shares of our
common stock issuable to them upon the exercise of a warrant we issued to them
in connection with a private placement. All of our shares of common stock held
by Hewlett-Packard are subject to a lock-up arrangement for 120 days following
the effective date of this registration statement.

Pursuant to our agreement with Ernst & Young, Ernst & Young is entitled to
request the registration of 750,000 shares of our common stock which were
purchased by them upon the exercise of a warrant. All of our shares of common
stock held by Ernst and Young are subject to a lock-up arrangement for 120 days
following the effective date of this registration statement.

Pursuant to certain agreements with i2 Technologies, i2 Technologies is
entitled to request the registration of 962,337 shares of our common stock which
were purchased by them and 756,289 shares of common stock issuable to them upon
exercise of the warrants. All of our shares of common stock held by i2
Technologies are subject to a lock-up arrangement for 120 days following the
effective date of this registration statement.

In addition, we are required to register 66,801 shares of our common stock
which were purchased by Millennium Partners and 10,021 shares of our common
stock issuable to them upon the exercise of a warrant issued to them in
connection with a private placement, upon the later to occur of 120 days
following the close of the private placement or 30 days following the effective
date of this registration statement.

OUR MANAGEMENT HAS BROAD DISCRETION REGARDING THE USE OF THE NET PROCEEDS OF
THIS OFFERING.

Our management will have broad discretion over how we use the net proceeds
of this offering and could spend proceeds in ways with which you may not agree.
Pending deployment of the funds, the proceeds may be invested in ways that do
not yield favorable returns. Please see the "Use of Proceeds" section of this
prospectus for more information about how we plan to use the proceeds of this
offering.

PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD PREVENT, DELAY OR
IMPEDE A CHANGE IN CONTROL OF US AND MAY REDUCE THE MARKET PRICE OF OUR COMMON
STOCK.

Provisions of our certificate of incorporation and bylaws, including those
relating to our classified board and our ability to offer "blank check"
preferred stock, could have the effect of discouraging, delaying or preventing a
merger or acquisition that a stockholder may consider favorable. We are also
subject to the anti-takeover laws of Delaware which may discourage, delay or
prevent someone from acquiring or merging with us, which may adversely affect
the market price of our common stock. Please see "Description of
Securities -- Anti-Takeover Effects" for more information concerning
anti-takeover provisions.

YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION IN THE NET TANGIBLE BOOK
VALUE OF YOUR SHARES.

The public offering price is expected to be substantially higher than the
net tangible book value per share of our outstanding common stock immediately
after this offering. Accordingly, assuming a public offering price of $ per
share, if you purchase common stock in this offering, you will incur immediate
dilution of approximately $ in the net tangible book value per share of our
common stock from the price you pay for our common stock. In the past, we issued
options and warrants to acquire, and a note convertible into, our common stock
at prices significantly below the offering price. If these options, warrants or
conversion features are exercised, you will incur additional dilution.
---------------------

15
<PAGE> 18

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve
substantial risks and uncertainties. You can identify these statements by
forward-looking words such as "may," "will," "expect," "intend," "anticipate,"
"believe," "estimate," "continue" and other similar words. You should read
statements that contain these words carefully because they discuss our future
expectations, make projections of our future results of operations or of our
financial condition or state other "forward-looking" information. We believe
that it is important to communicate our future expectations to our investors.
However, there may be events in the future that we are not able to accurately
predict or control. The factors listed in the sections captioned "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations," as well as any cautionary language in this prospectus, provide
examples of risks, uncertainties and events that may cause our actual results to
differ materially from the expectations we describe in our forward-looking
statements. Before you invest in our common stock, you should be aware that the
occurrence of the events described in the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
sections and elsewhere in this prospectus could have a material adverse effect
on our business, operating results and financial condition.

USE OF PROCEEDS

At the offering price of $ per share, we will receive approximately
$ million from the sale of shares of our common stock, net of estimated
offering expenses and underwriting discounts and commissions payable by us. We
will not receive any of the net proceeds received by certain selling
stockholders if the underwriters exercise their over-allotment option.

We are undertaking this offering and currently intend to use the net
proceeds of this offering to fund further investment in and development of our
services and technology, expansion of our sales and marketing activities,
expansion into other industries and geographic markets, relocation of our
corporate headquarters, and working capital and other general corporate
purposes. Although we have no current commitments with respect to any material
transactions, we evaluate acquisition opportunities from time to time and may
use a portion of the proceeds of this offering for acquisitions, strategic
alliances or joint ventures. Our management will have significant flexibility in
applying the net proceeds of this offering. Pending use of the net proceeds of
this offering, we will invest the net proceeds of this offering in short-term,
investment grade or similar interest-bearing instruments.

16
<PAGE> 19

PRICE RANGE OF COMMON STOCK

Our common stock has been quoted on the Nasdaq SmallCap Market under the
symbol "IQIQ" since November 1996. We have applied to have our common stock
listed for quotation on the Nasdaq National Market under the symbol "VLNK." The
following table sets forth, for the periods indicated, the high and low closing
prices of our common stock as reported by the Nasdaq SmallCap Market.

<TABLE>
<CAPTION>
COMMON STOCK
PRICE
---------------
HIGH LOW
------ ------
<S> <C> <C>
1997:
First Quarter............................................... $ 1.34 $ 0.92
Second Quarter.............................................. 1.06 0.75
Third Quarter............................................... 1.38 0.77
Fourth Quarter.............................................. 1.13 0.75
1998:
First Quarter............................................... 1.03 0.75
Second Quarter.............................................. 1.23 0.66
Third Quarter............................................... 0.88 0.59
Fourth Quarter.............................................. 2.81 0.61
1999:
First Quarter............................................... 7.75 2.92
Second Quarter.............................................. 5.75 3.31
Third Quarter............................................... 4.61 3.31
Fourth Quarter.............................................. 18.19 4.53
2000
First Quarter (through March 20, 2000)...................... $40.88 $14.44
</TABLE>

As of March 3, 2000, there were approximately 81 record holders of our
common stock. On March 20, 2000, the closing sales price of our common stock as
reported on the Nasdaq SmallCap Market was $37.13.

17
<PAGE> 20

CAPITALIZATION

The following table summarizes our capitalization as of December 31, 1999:

- on an actual basis;

- on a pro forma basis to reflect the sale of an aggregate of 200,403
shares of our common stock and warrants to purchase an additional 30,063
shares of common stock at an exercise price of $41.92 per share to i2
Technologies, Hewlett-Packard and Millennium Partners in March 2000; and

- on a pro forma as adjusted basis to reflect the net proceeds from this
public offering.

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
----------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------------ ----------- -----------
<S> <C> <C> <C>
Cash and cash equivalents............................. $ 8,616,305 $14,446,305 $
Short-term investments................................ 6,479,443 6,479,443
------------ ----------- --------
Total................................................. $ 15,095,748 $20,925,748 $
============ =========== ========

Long-term debt........................................ $ 4,230,720 $ 4,230,720 $
Stockholders' equity:
Common stock, $.001 par value; 50,000,000 shares
authorized; 19,569,644, 19,770,047 and
shares issued and outstanding, respectively...... 19,570 19,770
Additional paid-in capital.......................... 31,740,964 37,570,764
Unearned stock compensation......................... (1,389,079) (1,389,079)
Accumulated deficit................................. (13,600,107) (13,600,107)
------------ ----------- --------
Total stockholders' equity.................. 16,771,348 22,601,351
------------ ----------- --------
Total capitalization........................ $ 21,002,068 $26,832,071 $
============ =========== ========
</TABLE>

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock and we
do not intend to pay cash dividends on our capital stock in the foreseeable
future. We currently expect to retain any future earnings to fund the operation
and expansion of our business. Any future determination as to the payment of
dividends will be at the discretion of our board of directors. In addition, the
terms of the subordinated secured convertible promissory note we issued to
Hewlett-Packard prohibit us from paying any dividends while any amounts remain
outstanding under this note.

18
<PAGE> 21

SELECTED FINANCIAL DATA

The following selected financial data is qualified by reference to, and
should be read in conjunction with, our financial statements and related notes
contained elsewhere in this prospectus and with "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The selected
financial data presented below is not necessarily indicative of our future
results of operations or financial performance. The selected financial
information as of December 31, 1998 and 1999 and for the years ended December
31, 1997, 1998 and 1999 is derived from our audited financial statements
appearing elsewhere in this prospectus. The selected financial data as of
December 31, 1997 is derived from our audited financial statements not included
in this prospectus. Prior to 1999, we derived substantially all of our revenue
from providing management consulting services and system integration services.
We sold the assets underlying our management consulting services and computer
integration services during 1998. Accordingly, the selected financial data as of
and for the year ended December 31, 1999 is not comparable to periods ending
prior to 1999.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................................. $ 9,022,842 $ 8,230,628 $ 615,519
Operating expenses:
Direct cost of sales............................... 2,211,956 1,563,757 --
Customer operations................................ 4,526,968 3,759,626 2,655,113
Development........................................ 1,131,093 1,205,743 2,803,247
Selling and marketing.............................. 708,652 435,978 2,919,857
General and administrative......................... 2,840,978 2,285,955 5,430,466
Depreciation and amortization...................... 502,559 458,259 594,373
----------- ----------- ------------
Total operating expenses................... 11,922,206 9,709,318 14,403,056
Loss from operations................................. (2,899,364) (1,478,690) (13,787,537)
Interest expense, net................................ (73,581) (161,355) (3,983,785)
Gain on sale of assets............................... -- 3,339,123 1,262,921
Realized gain on sale of marketable securities....... -- -- 3,872,438
----------- ----------- ------------
Income (loss) before income taxes.................... (2,972,945) 1,699,078 (12,635,963)
Provision (benefit) for income taxes................. (1,112,127) 1,049,440 --
----------- ----------- ------------
Net income (loss).................................... (1,860,818) 649,638 (12,635,963)
Other comprehensive income (loss):
Unrealized income(loss) on marketable securities,
net of tax......................................... -- (315,673) 315,673
----------- ----------- ------------
Comprehensive income (loss).......................... $(1,860,818) $ 333,965 $(12,320,290)
=========== =========== ============
Net income (loss) per common share:
Basic.............................................. $ (0.17) $ 0.06 $ (0.96)
Diluted............................................ $ (0.17) $ 0.05 $ (0.96)
Weighted average common shares outstanding:
Basic.............................................. 10,909,752 10,964,164 13,114,028
Diluted............................................ 10,909,752 12,409,772 13,114,028
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------------------
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments.... $ 80,769 $ 715,446 $ 15,095,748
Working capital (deficit)............................ (331,366) 1,049,917 13,850,135
Total assets......................................... 5,804,153 4,597,046 23,238,589
Long-term debt and other long-term obligations....... 1,017,024 -- 4,230,720
Total stockholders' equity........................... 2,887,936 3,486,579 16,771,348
</TABLE>

19
<PAGE> 22

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

The following discussion should be read in conjunction with the financial
statements and related notes which appear elsewhere in this prospectus. The
following discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including
those discussed below and elsewhere in this prospectus, particularly under the
heading "Risk Factors."

OVERVIEW

We were originally formed in 1985 as Applied Intelligence Group, Inc. From
inception, our operations consisted primarily of consulting services related to
the planning, designing, building and installation of computerized information
management systems and computerized checkout or point-of-sale systems in the
retail and distribution industry. We also provided a Web-based human resource
recruiting application.

In 1993, we began the design and development of viaLink, an Internet-based
subscription service to complement our existing consulting business. We
introduced the syncLink service, formerly marketed and sold as Item Catalog, in
January 1997. In 1998, we made the strategic decision to focus exclusively on
our viaLink services. As a result, we sold our management consulting and systems
integration assets to The NetPlex Group, Inc. in September 1998 and changed our
name to The viaLink Company in October 1998. In December 1998, we sold ijob, our
wholly-owned subsidiary which operated our Web-based human resources recruiting
application, to DCM Company.

Prior to 1999, we derived substantially all of our revenues from our
consulting and systems integration assets. As a result of the sales of our
management consulting and systems integration assets and ijob, we resemble a
development stage company because our planned principal operations have not yet
generated significant revenues. This fundamental change in our business is
extremely risky, and we cannot be certain that our strategic decision to shift
our focus from our historical businesses to our viaLink services ultimately will
be successful.

We expect to generate our future revenues primarily from monthly
subscriptions to our services. For use of our syncLink service, retailers pay us
based on the number of suppliers from whom they receive data and suppliers pay
us based on the number of retailers that subscribe to their data. Our basic
syncLink subscription service fee is a monthly flat fee per trading partner per
store for direct-store-delivery customers. We have a similar pricing model for
warehouse-delivered products. Our other services, Chain Pricing, Item Movement
and Scan Based Trading, are available for additional fees. Previously, we priced
our services based on a flat monthly subscription rate with no variable
component for the number of stores or warehouse connections.

We also charge an implementation fee ranging from $1,200 for an on-line
implementation to over $100,000 for more complex supplier and retailer
installations. Our implementation fees are separately priced based on time and
materials. Implementation costs consist primarily of labor by technical support
personnel to configure customer data and establish a connection to our services.
Our typical implementation fee is approximately $20,000. Additionally, we
receive revenues from the performance of certain Web-hosting services, but we
expect to reduce our focus and reliance on providing these services in the
future.

We recognize revenues for our subscription and Web-hosting services as they
are provided. Revenues collected in advance are deferred and recognized as
earned. Revenues for implementations are recognized

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as the implementations are completed. We have agreed to pay a royalty of up to
7% of our total revenues to Ernst & Young and 5% of our syncLink and Chain
Pricing subscription revenues to i2 Technologies.

We reported a substantial loss from operations for the fiscal year ended
December 31, 1999 and we expect to report substantial losses for the foreseeable
future. The extent of these losses will depend primarily on the amount of
revenues generated from implementations of and subscriptions to our viaLink
services, which have not yet achieved market acceptance or significant market
penetration. In order to achieve market penetration, we expect to continue our
high level of expenditures for sales and marketing and development of our
viaLink services. These expenses substantially exceed our revenues, which to
date have been minimal. As a result, we expect to incur losses in future periods
until such time as the recurring revenues from these services are sufficient to
cover expenses.

RESULTS OF OPERATIONS

The sale of our consulting and systems integration assets was effective
September 1, 1998, and the sale of ijob was effective December 31, 1998. As a
result of the sale of our consulting and systems integration assets, we are no
longer a reseller of hardware and software. Consequently, our results of
operations for the year ended December 31, 1999 do not include the results of
operations related to the consulting and systems integration assets or the
operations of ijob. Our results of operations for the years ended December 31,
1997 and 1998 include the sales, expenses and results of operations related to
the consulting and systems integration assets through August 31, 1998 and the
operations of ijob for the entire period. Therefore, the results of operations
for the year ended December 31, 1999 are not comparable to the year ended
December 31, 1998 and the results of operations for the year ended December 31,
1998 are not comparable to the year ended December 31, 1997

Comparison of 1999 to 1998

Revenues. Our total revenues decreased 93%, from $8.2 million for the
fiscal year ended December 31, 1998, to $616,000 for the fiscal year ended
December 31, 1999. The decrease in revenues was the result of the sales of our
management consulting and systems integration assets and ijob.

Direct Cost of Sales. Direct cost of sales consists of purchased hardware
and certain software for resale, and costs associated with viaLink's proprietary
software products. Direct cost of sales were eliminated in 1999 as the result of
the sale of our consulting and systems integration assets in 1998.

Customer Operations. Customer operations expense consists of personnel
costs associated with implementation, consulting and other services and costs of
operating, maintaining and accessing our technical operations and hosting
facilities. Customer operations expense also includes the cost of providing
support and maintenance to customers. Our customer operations expense decreased
29%, from $3.8 million for the fiscal year ended December 31, 1998, to $2.7
million for the fiscal year ended December 31, 1999. This decrease was largely
due to a decrease in the personnel costs which resulted from the sale of the
consulting and systems integration assets during 1998.

Development. Development expense includes personnel and contract labor
costs and professional fees incurred for product development, enhancements,
upgrades, quality assurance and testing. Our development expenses increased
132%, from $1.2 million for the fiscal year ended December 31, 1998, to $2.8
million for the fiscal year ended December 31, 1999. This increase was due
primarily to an increase in development staff from 15 persons at January 1, 1999
to 27 persons at December 31, 1999. Additionally, $487,000 of non-cash service
costs is included in development expense in 1999 for the amortization of a
portion of the fair value of the warrants issued to Ernst & Young and i2
Technologies, reflecting the development efforts provided by these alliance
partners. We are utilizing and will increase our reliance on our alliance
partners and other vendors to advance our development efforts. We are currently
undertaking various projects that we expect will result in continued increases
in these types of expenses for the foreseeable future.

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Selling and Marketing. Selling and marketing expense consists primarily of
personnel costs, commissions, travel, promotional events, including trade shows,
seminars and technical conferences, advertising and public relations programs.
Selling and marketing expense increased 570%, from $436,000 for the fiscal year
ended December 31, 1998, to $2.9 million for the fiscal year ended December 31,
1999. This increase in selling and marketing expense was primarily due to (a)
the expansion of our sales, business development and marketing team from four
persons at January 1, 1999 to 15 persons at December 31, 1999, resulting in
$900,000 in increased personnel costs, (b) our new marketing and promotional
program to promote our viaLink services, resulting in approximately a $1.1
million increase in advertising, travel and other fees and (c) $487,000 of
non-cash service costs for the amortization of a portion of the fair value of
the warrants issued to Ernst & Young and i2 Technologies reflecting the selling
and marketing efforts provided by these alliance partners. We expect these types
of expenses will continue to increase in the foreseeable future.

General and Administrative (G&A). G&A expense consists primarily of the
personnel and other costs of the finance, human resources, administrative and
executive departments and the fees and expenses associated with legal,
accounting and other services. G&A expense increased 138%, from $2.3 million for
the fiscal year ended December 31, 1998, to $5.4 million for the fiscal year
ended December 31, 1999. This increase in G&A expense is primarily attributable
to the recruiting, staffing and relocation of key executive and management staff
and the related increase in personnel expenses for the administrative
infrastructure built to support future operations. In addition, G&A expense also
increased due to an increase in legal, consulting and other professional fees.
As a result of our significant efforts to develop internal processes and
infrastructure to support the expected increase in operational activity and
scale, we anticipate that our G&A expense will continue to increase in absolute
dollars for the foreseeable future.

Depreciation and Amortization. Depreciation and amortization expense
increased 30%, from $458,000 for the fiscal year ended December 31, 1998, to
$594,000 for the fiscal year ended December 31, 1999. This increase reflects the
effect of $2.3 million in capital expenditures in 1999 for new computer hardware
and software to support the viaLink services. This effect is partially offset by
the sale of our consulting and systems integration assets on September 1, 1998,
and the sale of ijob on December 31, 1998.

Interest Expense, Net. Interest expense, net, increased from $161,000 for
the fiscal year ended December 31, 1998, to $4.0 million for the fiscal year
ended December 31, 1999. This increase is due to the promissory note we issued
to Hewlett-Packard for $6.0 million at 11.5% interest, plus the amortization of
the beneficial conversion feature of the note as more fully discussed in Note 5
to the financial statements. We will continue to record non-cash interest
charges of approximately $1.0 million per quarter until the conversion date of
August 5, 2000. Interest expense is offset by interest income on short-term
investments.

Gain on Sale of Assets. Gain on sale of assets decreased 62%, from $3.3
million for the fiscal year ended December 31, 1998, to $1.3 million for the
fiscal year ended December 31, 1999. On March 11, 1999, DCM Company paid the
note receivable of $800,000 plus accrued interest in full due to us in
connection with the sale of ijob, and we recognized the deferred gain of
$462,000 during the first quarter of 1999. We also recorded $801,000 of income
under the earn-out agreement with NetPlex during 1999. Due to the potential for
non-payment, no amounts have been recorded under the NetPlex earn-out agreement
subsequent to September 30, 1999. We will continue to record income under the
earn-out agreement as we receive payments.

Realized Gain on Sale of Marketable Securities. During the second quarter
of 1999, we converted 643,770 shares of NetPlex preferred stock we received as
consideration for the sale of the consulting assets into 643,770 shares of
freely-tradable common stock of NetPlex. In December 1999, we sold all of our
shares of NetPlex common stock for proceeds of $4.9 million. This sale resulted
in a realized gain of $3.9 million recorded for the fiscal year ended December
31, 1999.

Tax Provision. Deferred tax assets and deferred tax liabilities are
separately recognized and measured at currently enacted tax rates for the tax
effect of temporary differences between the financial reporting and tax
reporting bases of assets and liabilities, and net operating loss and tax credit
carryforwards for tax
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purposes. A valuation allowance must be established for deferred tax assets if
it is "more likely than not" that all or a portion will not be realized. Prior
to the third quarter of 1998, we had recorded a tax benefit of $1.0 million
related to the pre-tax losses incurred in prior years, and no valuation
allowance had been established prior to the third quarter of 1998. As a result
of the net gain on the sale of our consulting and systems integration assets,
the deferred tax asset of $1.0 million was realized and a valuation allowance of
$190,000 was established for the remaining net deferred tax asset as of
September 30, 1998. The deferred tax asset at December 31, 1998 and December 31,
1999, generated by losses recorded in the fourth quarter of 1998 and during
1999, is offset by a full valuation allowance. We will continue to provide a
full valuation allowance for future and current net deferred tax assets until
such time as we believe it is more likely than not that the asset will be
realized.

Other Comprehensive Income. Other comprehensive income for the fiscal year
ended December 31, 1998 includes an unrealized loss of $316,000, representing
the net decrease in market value of the 643,770 shares of NetPlex stock received
as consideration from the sale of our consulting and systems integration assets
from September 1, 1998 to December 31, 1998. During 1999, and through the date
of sale of the NetPlex shares, we continued to record other comprehensive income
for the fluctuations in market value. All such unrealized gains were realized as
gain on sale of securities in December 1999.

Comparison of 1998 to 1997

Revenues. Our total revenues decreased 9%, from $9.0 million for the fiscal
year ended December 31, 1997, to $8.2 million for the fiscal year ended December
31, 1998. This decrease in revenues was primarily attributable to the sale of
our consulting assets.

Direct Cost of Sales. Direct cost of sales decreased 29%, from $2.2 million
for the fiscal year ended December 31, 1997, to $1.6 million for the fiscal year
ended December 31, 1998. This decrease corresponded with the decrease in
hardware and product sales, offset by an increase in consulting and proprietary
solution sales for the fiscal year ended December 31, 1998.

Customer Operations. Customer operations expense decreased by 17%, from
$4.5 million for the fiscal year ended December 31, 1997, to $3.8 million for
the fiscal year ended December 31, 1998. This decrease was due to the sale of
our consulting and systems integration assets.

Development. Development expense increased 7%, from $1.1 million for the
fiscal year ended December 31, 1997 to $1.2 million for the fiscal year ended
December 31, 1998. This increase was due primarily to increased development
activity for our services. We incurred costs of approximately $1.9 million and
$1.8 million for product development in 1997 and 1998, respectively. For the
same periods we capitalized $752,000 and $617,000, respectively, in software
development costs.

Selling and Marketing. Selling and marketing expense decreased 38%, from
$709,000 for the fiscal year ended December 31, 1997, to $436,000 for the fiscal
year ended December 31, 1998. This decrease was primarily a result of management
initiatives to improve cash flow by reducing sales and marketing expense.

General and Administrative. G&A expense decreased 20%, from $2.8 million
for the fiscal year ended December 31, 1997, to $2.3 million for the fiscal year
ended December 31, 1998. This decrease was primarily as a result of management
initiatives to improve cash flow by reducing G&A expense.

Depreciation and Amortization. Depreciation and amortization expense
decreased 9%, from $503,000 for the fiscal year ended December 31, 1997, to
$458,000 for the fiscal year ended December 31, 1998. This decrease is due to
decreased depreciation and amortization related to the consulting assets sold in
1998.

Interest Expense, Net. Interest expense, net, increased from $74,000 for
the fiscal year ended December 31, 1997, to $161,000 for the fiscal year ended
December 31, 1998. This increase was due to increased borrowing under our line
of credit in 1998.

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Gain on Sale of Assets. As a result of the sale of our consulting and
systems integration assets, we recorded a one-time net gain of $3.0 million for
the fiscal year ended December 31, 1998. Additionally, we accrued $341,000 under
the earn-out agreement with NetPlex in 1998.

Tax Provision (Benefit). Prior to the third quarter of 1998, we recorded a
tax benefit of $1.0 million related to the pre-tax losses incurred in prior
years, and no valuation allowance was established prior to the third quarter of
1998. As a result of the net gain on the sale of our consulting and systems
integration assets in the third quarter of 1998, the deferred tax asset of $1.0
million was realized and a valuation allowance of $190,000 was established for
the remaining net deferred tax asset as of September 30, 1998. Losses were
incurred in the fourth quarter of 1998, for which no net deferred tax asset was
recorded. We will not record any further tax benefits and deferred tax assets
until such time as management believes it is more likely than not that the asset
may be realized.

Other Comprehensive Loss. Other comprehensive loss of $316,000 is the
result of the write-down to market value at December 31, 1998 of the NetPlex
preferred stock received in connection with the sale of our consulting and
systems integration assets to NetPlex.

LIQUIDITY AND CAPITAL RESOURCES

Due to the sale of our consulting and systems integration assets and the
sale of ijob, we are unable to rely on our historical revenues and expect cash
requirements in connection with sales and marketing and investment in our
viaLink services will be substantial. As a result of these sales, we now
resemble a development stage company because our planned principal operations
have not yet generated significant revenues. As of December 31, 1999, we had
cash, cash equivalents and short-term investments of $15.1 million.

During 1999, we used $8.5 million in operating activities, reflecting a net
loss of $12.6 million. Cash used in operating activities also reflects the
effects of the gain on sale of marketable securities of $3.9 million, $6.5
million for non-cash stock compensation and interest expense for the conversion
feature of the Hewlett-Packard note, $1.0 million of depreciation and
amortization and a $900,000 increase in cash provided by other working capital
changes.

During 1999, we used $3.8 million in investing activities. Cash used in
investment activities consisted primarily of increases in short-term
investments, capital expenditures and capitalized software development costs.
Also included in investing activities were proceeds of $4.9 million received by
us in connection with the sale of our NetPlex common stock. In March 1999, we
received proceeds of $812,444 for payment of the note receivable and accrued
interest due to us in connection with the sale of ijob. Additionally, we
invested $1.3 million in computer hardware, $768,000 in computer software and
$275,000 in various other fixed assets in 1999, compared to $42,000 in total
expenditures in 1998. We also invested $607,000 in software development costs
during 1999, compared to $617,000 in 1998.

During 1999, financing activities provided net cash of $20.2 million,
primarily the result of the investments made by certain of our alliance
partners. Additionally, we received $7.6 million in proceeds from the exercise
of our stock options and warrants, offset in part by approximately $400,000 of
registration costs. In February 1999, we completed a financing with
Hewlett-Packard, whereby Hewlett-Packard provided us with $6.0 million through a
subordinated secured promissory note. In connection with our agreement with
Ernst & Young, which was entered into in May 1999, we issued a warrant to
purchase up to 1,000,000 shares of our common stock at a price of $2.00 per
share. In August 1999, Ernst & Young exercised warrants to purchase 250,000
shares of our common stock resulting in gross proceeds to us of $500,000. In
November 1999, Ernst & Young exercised warrants to purchase the remaining
750,000 shares of our common stock from this agreement, resulting in gross
proceeds to us of $1.5 million. In October 1999, i2 Technologies invested $5.0
million in us in exchange for 895,536 shares of our common stock and a warrant
to purchase up to an additional 746,268 shares of our common stock at an
exercise price of $6.70 per share.

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In March 2000, we completed a private placement with i2 Technologies,
Hewlett-Packard and Millennium Partners for $6.0 million. In connection with the
private placement, we issued an aggregate of 200,403 shares of our common stock
and warrants to purchase an additional 30,063 shares of our common stock at an
exercise price of $41.92 per share to i2 Technologies, Hewlett-Packard and
Millennium Partners.

We currently do not have a credit facility available to borrow additional
funds. We have incurred operating losses and negative cash flow in the past and
expect to incur operating losses and negative cash flow for the foreseeable
future. We expect our spending to increase steadily for the foreseeable future
for further technology and product development, increased marketing expenditures
and other technology and database costs. We also expect to hire additional
management and support/service employees. To support this level of spending, we
must use our current cash, cash equivalents and collection of accounts
receivable to operate the business and/or eventually obtain additional
financing. We cannot be certain when operating revenues will exceed operating
costs, if ever.

We believe that our available cash resources, together with the net
proceeds of this offering will be sufficient to finance our presently
anticipated operating losses and working capital expenditure requirements for
the foreseeable future. Our future capital requirements will depend on our
revenue growth, profitability, working capital requirements, level of investment
in long term assets and other financing sources. Increases in these capital
requirements or a lack of revenue due to delayed or less than expected market
acceptance of our viaLink services would accelerate the use of our cash, cash
equivalents and short-term investments.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes standards for accounting
and reporting for derivative instruments. The effective date for SFAS No. 133,
as amended by SFAS No. 137, is effective for fiscal years beginning after June
15, 2001. We are currently not a party to any derivative instruments and do not
expect the adoption of SFAS No. 133 to have a significant impact on our
financial position or operating results.

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BUSINESS

We are a leading provider of subscription-based, business-to-business
electronic commerce services that enable CPG and grocery industry participants
to efficiently manage their highly complex supply chain information. Our
services allow manufacturers, wholesalers, distributors and retailers to
communicate and synchronize item, price and promotion information in a more
cost-effective and accessible way than has been possible using traditional
electronic and paper-based methods. Our syncLink service, introduced in 1997, is
a synchronized, secure, shared database of item codes, descriptions and
specifications, product authorizations and de-authorizations and product prices,
costs and promotions. syncLink provides the foundation for our Chain Pricing,
Item Movement and Scan Based Trading services.

INDUSTRY BACKGROUND

Growth of the Internet and Business-to-Business Electronic Commerce

The Internet has emerged as the fastest growing communications medium in
history, enabling millions of people to gather information, communicate and
conduct business electronically. According to GartnerGroup, the worldwide
business-to-business electronic commerce market is forecast to grow from $145
billion in 1999 to $7.3 trillion in 2004, representing 7% of forecast total
global sales. Due to the growing number of Web users and the increasing use of
the Internet for business-to-business communication, many businesses now
recognize the Internet as critical to their competitive position. Businesses are
capitalizing on the global reach of the Internet to expand into new markets and
are utilizing the Web as a powerful distribution channel to market and deliver
goods and services. Also, businesses are increasingly using the Internet to
interact with suppliers, distributors and other business partners to achieve
greater efficiencies.

The Consumer Packaged Goods and Grocery Industries

The CPG and grocery industries in the U.S. manufacture and distribute a
wide variety of prepackaged items primarily sold in supermarkets, convenience
stores, small grocery stores, mass merchandisers, warehouse clubs and chain
drugstores. Representative items include beverages, canned goods, dry goods,
snack foods and health and beauty products. The movement of merchandise from
manufacturer to retailer is characterized by various multi-tiered distribution
methods, such as direct-to-store deliveries and intermediate deliveries through
wholesalers, distributors and retailer warehouses. This distribution structure
is commonly referred to as the "supply chain." The CPG and grocery industries
are very large and highly fragmented. According to the U.S. Census Bureau, the
U.S. CPG and grocery industries represented $851 billion in retail sales in
1997. These sales were generated by 300,000 retail locations. These retail
locations represented over 4,200 retail chains and were supplied by over 20,000
manufacturers and over 50,000 wholesalers, distributors and brokers.

CPG and grocery industry participants must manage a large number of items,
each of which may be packaged, distributed and sold in different sizes and
configurations and potentially under different promotion terms. A typical
supermarket has an average of 40,000 unique items in its store inventory
supplied by up to 2,500 suppliers. A large format supermarket, or supercenter,
may have over 100,000 unique items in inventory supplied by up to 3,000
suppliers. A typical convenience store has an average of 2,800 items in
inventory supplied by up to 300 suppliers. The vast number of items are
delivered in many different packaging quantities, including bulk truckloads,
pallets, cases and individual units. Items, prices and promotions are often
unique to each trading partner, and individual stores within a retail chain can
be authorized to sell different products. Consequently, product assortment,
pricing and promotion can vary by geography, store size or demographic factors.
Moreover, item prices and promotions change frequently at every level of the
supply chain, sometimes more than once a week, and the terms of the promotion,
for example, the start date, end date, percentage or absolute dollar discounts,
links to other promotions and quantity discounts, can be very complex. Finally,
according to New Product News, approximately 16,000 new products were introduced
in the CPG and grocery industries in 1999.

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Challenges Faced By Industry Participants

To date, the CPG and grocery supply chain has been characterized by low
electronic commerce penetration, manually intensive business processes and high
purchase order and invoice error rates. According to the 1993 Joint Industry
Study on Efficient Consumer Response, improving efficiencies in critical supply
chain areas such as store assortment, replenishment, promotion and product
development, could reduce grocery supply chain costs by up to 10.8% of sales.
More specifically, the study indicated that costs related to promotion
administration, buying and selling processes, deductions and other clerical and
administrative areas could be reduced by over 3.4% of sales. We do not believe
the inefficiencies identified in the Joint Industry Study have been successfully
addressed since the time of its release. Supply chain information exchange
continues to remain largely paper-based and unsynchronized. The Joint Industry
Study also indicated that item, price and promotion information synchronization
is necessary to achieve the benefits of a paperless system.

One of the most significant challenges facing a retailer is the maintenance
of its "pricebook." The pricebook typically contains descriptions of each item
in a store's inventory, including supplier and retailer product codes, item
specifications (packaging and selling unit information), Universal Product Code
(UPC), purchase cost, retail sales price and any discounts to be received from
the supplier. The vast number of items, variability of pricing, lack of reliable
information exchanged between trading partners and the traditional practice of
manual updating all combine to make pricebook maintenance extremely difficult
and error prone and result in a lack of "synchronization" between trading
partners. A single retailer may have thousands of suppliers, each of which may
have different prices for the same item it supplies to different stores. Because
many retailers do not communicate electronically with their suppliers, retail
buyers manually key item and price information from a large number of suppliers'
reports, catalogs, e-mails, phone calls and faxes into their pricebook.

One of the most important pieces of information within a pricebook is the
product code used to track the item through the supply chain. Maintaining
product code information for each trading partner is difficult because the
commonly recognized UPC bar code printed on many item labels is typically not
used for tracking products throughout the entire supply chain. Rather, the UPC
bar code is most commonly used at the retail checkout register exclusively as a
standardized means to ensure selling price accuracy. In contrast, most
manufacturers, wholesalers, distributors and retailers use their own set of item
codes and naming protocols. As a result, a single product could be represented
by thousands of separate product codes. Therefore, retailers and suppliers spend
considerable time and resources translating and maintaining product code
information among their trading partners.

Due to the limited number of available alternatives, many suppliers and
retailers continue to employ paper-based communications to manage their supply
chain information, resulting in operational inefficiencies and administrative
errors. According to a 1999 Grocery Manufacturers of America study, 60% of all
invoices have errors, 60% of which are due to price and promotion issues. In
addition, 35% of all invoices result in the retailer taking deductions for
errors and discrepancies in invoices from suppliers. These deductions represent
approximately 8% of annual invoice sales from suppliers. Invoice errors and
discrepancies also cause significant administrative inefficiencies for both
suppliers and retailers attempting to research and reconcile the source of the
error. A 1998 Grocery Manufacturers of America study estimated that the
administrative cost of invoice errors averages $40 per error and can reach up to
$236 per error.

Limitations of Current Approaches

Currently, there is no established universal, low-cost electronic method
for manufacturers, wholesalers, distributors and retailers to share item, price
and promotion information easily and efficiently. In the traditional electronic
data interchange (EDI) model, a communication technology available for several
years, each participant creates, or "maps," a "connection" with each one of its
participating supply chain partners. Suppliers and retailers that would have to
create hundreds of point-to-point connections to implement an electronic based
supply chain have found EDI to be too costly and technologically difficult.

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Consequently, only a small percentage of the industries' suppliers and retailers
use EDI or have access to electronic supply chain applications. In addition,
without a shared database of record from which both trading partners can access
agreed upon item, price and promotion information, pricebook synchronization is
virtually impossible.

The unavailability of basic electronic commerce capabilities has impeded
the application of more advanced supply chain concepts, such as collaborative
planning, forecasting and replenishment, and scan based trading. For example,
many stores have automatic scanning capabilities at the check-out register;
however, only a small percentage of the information captured by the scanner is
shared with suppliers in a timely manner.

In order to improve the visibility and sharing of item, price and promotion
information throughout the supply chain, manage data complexity, collaborate on
product and promotion decisions, minimize supply chain information
inefficiencies, and improve overall service levels to their customers, trading
partners require a solution that enables them to:

- Synchronize item, price and promotion information between trading
partners in an easily accessible, cost-efficient and secure manner to use
as the foundation for electronic transactions;

- Seamlessly connect to all trading partners through multiple technology
platforms, including Extensible Markup Language (XML), an emerging
standard for the exchange of data over the Internet, and EDI, and across
significantly varied levels of technological sophistication; and

- Manage, map and maintain item, price and promotion information for tens
of thousands of unique items from up to thousands of trading partners.

We believe the inefficiencies and inadequacies of current approaches have
created a significant opportunity for a business-to-business electronic commerce
solution within the CPG and grocery industries.

THE VIALINK SOLUTION

We provide subscription-based, business-to-business electronic commerce
services that enable CPG and grocery industry participants to efficiently manage
their highly complex supply chain information. Our solution is designed to
operate across disparate technology platforms, applications and item coding
structures and can be implemented and deployed rapidly. Customers make only a
single connection to our services. They may do this using a variety of
technologies, such as a standard Internet browser, e-mail, highly sophisticated
proprietary network infrastructure, standard EDI formats or XML.

Our syncLink service replaces the multiple connections among manufacturers,
wholesalers, distributors and retailers with a single electronic connection to a
shared database. syncLink provides our customers with a cost-effective,
reliable, scalable and secure way to communicate and synchronize trading and
pricebook information. As the item, price and promotion information-of-record
for participating trading partners, the syncLink database forms the foundation
for viaLink's other electronic commerce services:

- Chain Pricing -- an advanced information reporting service that
facilitates the sharing of syncLink data among authorized members
throughout all stages of the supply chain;

- Item Movement -- a service that allows retailers to share actual retail
item sales and warehouse item movement information with manufacturers and
distributors on a daily or weekly basis; and

- Scan Based Trading -- a service that enables retailers and suppliers to
transact business electronically based on actual retail sales data.

We believe our solution provides suppliers and retailers with the following
benefits:

- Reduced manual data entry and pricebook maintenance, which can increase
overall administrative efficiency;

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- Reduced invoice discrepancies through synchronization of trading
information, which can reduce deduction write-offs, working capital
inefficiencies and administrative costs associated with reconciling the
discrepancies;

- Reduced time spent resolving errors and disputes, which can increase
salesforce productivity and actual time selling;

- Enhanced promotion effectiveness and ability to facilitate more efficient
new product introductions due to greater trading information visibility;
and

- Improved item delivery and receiving processes.

We believe that the benefits of the viaLink solution will attract leading
national and regional retailers and suppliers to our network of CPG and grocery
industry participants. We also believe that the addition of these retailers and
suppliers will create a network effect that increases the value of our solution
to subscribers.

STRATEGY

Our objective is to become the industry-accepted electronic commerce
utility for synchronizing item, price and promotion information for the CPG and
grocery industries. We plan to accomplish this by implementing the following
strategies:

Target Leading Retailers and Suppliers to Create a Network Effect

We intend to create a network effect by targeting leading national and
regional retailers and suppliers and providing the services necessary to create
efficiencies for these key participants. We believe the adoption of our services
by these companies will be an important endorsement for the rest of the CPG and
grocery industries. As a result of this network effect, we believe the value of
our services to our subscribers will increase with the addition of new trading
partners, thereby increasing the overall value of our solution. Over the last
several months, we have signed a number of customers including Coors Brewing
Company, Kraft Foods, Spartan Stores and Unified Western Grocers.

Build on First Mover Advantage and Increase Brand Awareness

We believe our position as the first company to offer a synchronized,
secure, shared database containing item, price and promotion information
provides us with a first mover advantage to attract a critical mass of retailers
and suppliers. To increase the number of retailers and suppliers that use our
services, we intend to rapidly build awareness of our services by developing a
compelling brand and value proposition. Our plans include:

- Expanding the size and capabilities of our internal sales force;

- Working with existing customers to connect new suppliers and retailers;

- Advertising extensively in industry and business media;

- Participating in industry trade shows and conferences; and

- Working with industry trade associations to provide broad industry
influence.

Leverage Strategic Alliances and Relationships

We believe that strategic alliances and relationships enhance our ability
to reach new customers. We have established strategic, business and technology
alliances with leading organizations such as i2 Technologies, Ernst & Young and
Hewlett-Packard. These alliances provide us with technology services, financial
resources and marketing and sales support and enhance our ability to develop and
deliver new services. We have also formed alliances and relationships with ICS
FoodOne, OMI International, Cyclone Commerce and UCCnet and we are a member of
the Oracle Partner Program. We believe these alliances
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<PAGE> 32

and relationships add to our credibility with potential new customers,
contribute to expanding awareness of our products and services and are critical
to achieving greater market penetration and acceptance of our services. As
opportunities arise, we intend to establish additional alliances and
relationships with key participants in a number of strategic markets or acquire
complementary services and technologies to further drive adoption of our
solution and enhance and expand our service offerings.

We recently announced an initiative to enable third-party technology
providers to connect to our services. This program, called the "viaLink ready
Program," allows technology providers to create and rapidly deploy solutions
that use our services and extend the capabilities of their own applications. We
expect to gain greater adoption and penetration of our solution by accessing the
customers of these third-party technology providers. The "viaLink ready Program"
is being facilitated by our implementation of XML. Currently, we have 13
companies participating in the "viaLink ready Program".

Expand Service Offerings

Given the significant complexities and inefficiencies prevalent in the CPG
and grocery supply chain, we expect suppliers and retailers will demand more
advanced supply chain services that assist them in tracking sales, forecasting
demand, replenishing inventory and managing transactions based on point-of-sale
data. syncLink, the foundation of our solution, allows us to develop and deploy
other value-added services. For example, we plan to deploy our Item Movement
service which, together with syncLink, allows trading partners to implement Scan
Based Trading. We will continue to invest resources to develop complementary
services that leverage the syncLink database and create efficiencies for our
subscribers.

Enter New Markets

We plan to expand internationally and to extend our solution to other
industries outside of the CPG and grocery industries. Over the next 12 months,
we plan to extend our solution to address the food service industry due to its
similarities to the CPG and grocery industries and the overlap of supply chain
participants. We also intend to establish and expand our global presence by
opening sales offices in Europe and in the Asia/Pacific region. We expect to
expand into industries other than food service and into international markets
through our sales efforts and by leveraging our strategic relationships and
alliances.

SERVICES

We offer the following value-added electronic commerce services for the CPG
and grocery industries:

syncLink

Our subscription-based service, syncLink, is a synchronized, shared
database containing item, price and promotion information, including product
authorizations and de-authorizations. syncLink is maintained in a secure
environment and its data is accessible only to authorized subscribers.

Chain Pricing

Chain Pricing, a reporting service using syncLink data, allows authorized
manufacturers, wholesalers, distributors and retailers to share item, price and
promotion information. Chain Pricing provides item and pricing information
visibility though each level of multi-tiered distribution channels. For example,
a manufacturer may not have information on the prices and promotions offered by
its independently-owned distributors. By implementing syncLink and Chain Pricing
services at each of its distributors, a manufacturer is able to view prices and
promotions offered on its products by its distributors to specific retailers.

Item Movement

Item Movement provides timely retail sales and warehouse item movement
information to manufacturers and suppliers using data within syncLink. For
example, a manufacturer can view

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information relating to items shipped from the warehouse to a customer and can
compare this movement information with information relating to product sales at
the retail store. This visibility of price and item movement is important for
manufacturers and suppliers and can help optimize promotion spending and supply
chain planning decisions.

Scan Based Trading

The traditional business-to-business trading environment in the CPG and
grocery industries is delivery-based, i.e., the point of transaction is the
supplier's point-of-delivery to the retailer. In traditional trading
relationships, the retailer purchases the inventory from the supplier. However,
a new operational environment, known as scan based trading, is emerging in which
the consumer point-of-sale becomes the new trading boundary between suppliers
and retailers. Our Scan Based Trading service allows trading partners to
transact business based upon items sold at the retail outlet scanner, similar to
consignment selling. Scan Based Trading requires reliable, synchronized exchange
of item, price and promotion information and a shared control system for
managing delivery information, retail sales data, inventories and shrink
reporting.

Scan Based Trading represents a significant change from current business
practices and has broad benefits for both retailers and suppliers, including
improved information visibility throughout the supply chain. Scan Based Trading
reduces a retailer's inventory investment, lowers administrative expenses and
allows the supplier to collect critical consumer pricing and promotion
information at the point of sale which can be used to make better production,
scheduling and promotion decisions. For the supplier, it also eliminates a
supply chain bottleneck because the supplier is no longer required to check-in
products upon arrival at each store. These and other efficiencies translate into
improved asset utilization, just-in-time product flows, improved assortment at
the store shelf and improved replenishment effectiveness.

The Direct Store Delivery Committee of the Grocery Manufacturers of America
selected us as their electronic commerce provider in a pilot program of item,
price and promotion synchronization and scan based trading. Schnuck Markets, in
St. Louis, Missouri, Andronico's, in Berkeley, California, and 23 suppliers are
piloting synchronization. Five of those suppliers are also piloting our Item
Movement and Scan Based Trading services.

Key Features

Our services have the following key features:

- Accessible. Our services can be accessed through a single connection from
a variety of technology platforms. Customers can access our services
using a standard Web browser, e-mail or a sophisticated private network
infrastructure.

- Subscription-Based. Through our partner Hewlett-Packard, we serve as the
database host and provide our services on a subscription basis, so that
each subscriber's technology and capital investments are minimized. Our
subscription fee is a cost-effective monthly charge, based on the number
of store and/or warehouse connections and the type of services (e.g.,
syncLink, Chain Pricing, Item Movement and/or Scan Based Trading) being
used. We also charge an implementation fee to cover the cost of mapping
the data and providing the interface connection.

- Secure. We protect customer information from unauthorized users with a
series of firewalls and passwords. Additionally, we provide access to
information in our database only to those authorized parties designated
by our customers.

- Neutral. We provide our customers with an independent, secure database of
record for item, price and promotion information. syncLink can be used to
provide a neutral source of data to resolve disputes about prices,
products and promotions between trading partners.

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- Flexible. We believe our service adds value to the trading partners by
providing data translation capabilities to facilitate efficient trading
using common item information. Our service allows our customers to
maintain their existing item definitions and coding structures.

IMPLEMENTATION, MAINTENANCE AND CUSTOMER SUPPORT

syncLink implementation begins with the supplier. Manufacturers,
wholesalers and distributors send their data to us in an agreed-upon format, and
our services perform an automated check against existing viaLink master items in
the syncLink database. This automated check matches information such as product
descriptions, UPC bar codes, size, quantities and case configurations. Items not
automatically matched are processed by our data management team for manual
matching. A viaLink or third-party implementation professional is assigned to
the supplier to help the supplier's staff link their items to the master items.
Depending on the retailer, a similar process may occur to match retailer item
codes to the syncLink database. Our implementation team also works with
customers to help link their technology platforms and interfaces to our services
and to define the data transmission formats required by each customer.

Once the implementation process is complete, the relationship with our
customer is transitioned to our customer support staff. We offer two levels of
support to our customers. Level 1 support manages issues related to Internet
connectivity and browsers, questions about the basic functionality of our
services, and administrative issues, including customer security access. Level 2
support addresses more complex matters such as business rule issues (e.g., data
mapping), transmission error corrections, data file export issues related to
customer data and connection issues. Our customer support services are available
to all customers 24 hours a day, 365 days a year.

Each supplier performs ongoing maintenance of item, price and promotion
information. These changes are then loaded into syncLink, either on-line or
through batch interfaces with supplier systems, and the information is made
available to the retailer for acceptance or rejection.

STRATEGIC ALLIANCES AND RELATIONSHIPS

We have formed a number of strategic alliances and relationships that we
believe are integral to driving rapid adoption and penetration of our services.
The continued establishment of strategic alliances is a fundamental business
strategy as we expand our services and enter new markets. Our strategic
alliances and relationships include the following:

Ernst & Young

In May 1999, we entered into a strategic alliance with Ernst & Young. As
part of this alliance, Ernst & Young has agreed to provide us with marketing and
sales support. In addition, Ernst & Young will provide us with its consulting
services at discounted rates, including services related to general systems
integration, technology enhancements, implementation, project management and
training. In connection with this alliance, Ernst & Young purchased $2.0 million
of our common stock.

i2 Technologies

In October 1999, we entered into a strategic alliance with i2 Technologies,
a leading supply chain planning software and e-business solutions provider. The
primary focus of this alliance is to integrate the products and services of our
two companies, extend the integrated solutions across multiple industries, and
develop joint sales and marketing programs. i2 Technologies has agreed to pay us
a royalty based upon revenues it receives from providing the syncLink and Chain
Pricing services outside of the CPG, grocery and food service industries. In
connection with this alliance, i2 Technologies purchased $5.0 million of our
common stock and has a warrant to purchase an additional $5.0 million of our
common stock.

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Hewlett-Packard

In February 1999, we entered into a strategic alliance with
Hewlett-Packard. As a result of this alliance, Hewlett-Packard provides us with
the secure technology infrastructure and platform, including agreed-to
performance, back-up and reliability criteria, to host our syncLink and other
services. Hewlett-Packard may also provide us with co-marketing and consulting
support from time to time. Additionally, Hewlett-Packard invested $6.0 million
in us in the form of convertible debt. We, in turn, will use up to $3.0 million
to purchase Hewlett-Packard products and services.

Other Alliances and Relationships

We have established alliances and relationships with other companies and
organizations to help enhance our ability to reach new customers, develop joint
marketing programs, connect to services with complementary functionality and
gain technical knowledge. Currently, we have entered into alliances and
relationships with the following companies and organizations:

- Cyclone Commerce -- We have integrated Cyclone's Internet data exchange
security technology with our services. We also have a joint sales and
marketing program with Cyclone.

- ICS FoodOne -- We are working together to connect our services to ICS
FoodOne's complementary new product introduction and promotion
announcement services.

- OMI International -- We are working together, including developing joint
marketing programs, to connect our services to OMI's retail order
management systems.

- Food Marketing Institute -- Utilizing our services, we are working with
the Food Marketing Institute on an initiative to improve promotion
efficiency for the food industry.

- Oracle Partner Program -- We joined Oracle's global partner program to
gain access to their technology support, education resources and
marketing support.

- UCCnet -- We joined UCCnet's alliance as an architect partner to leverage
our services through UCCnet's emerging electronic marketplace for the CPG
and grocery industries.

Cyclone, ICS FoodOne and OMI, along with 10 other companies, are the
initial members of our "viaLink ready Program".

TECHNOLOGY

Architecture

We have deployed a reliable, secure and readily available technology
platform based on open architectures and industry standard technologies. The
platform utilizes Oracle relational database technology and applications built
with the Smalltalk object-oriented programming and development language.
Smalltalk is a portable development and operational environment, well-suited to
manage mission-critical business applications.

Access to our services is provided through the Internet, as well as other
methods of electronic communication. In order to maintain the security of our
database, users do not have direct access to the underlying data stored in the
Oracle databases. Users connect to application programs, which interpret the
requests for service, then connect to the Oracle databases for access to the
underlying data.

Data Integrity and Security

Our production operations are housed and hosted in Hewlett-Packard's secure
facility in Atlanta, Georgia. This facility is secured through a variety of
technical and physical protection mechanisms, including full-time professional
security staff. This facility provides redundant infrastructure such as backup
utilities and communication lines to support a high availability operation. The
Hewlett-Packard servers

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hosting our services include fail-over capability, with redundant data storage
and communications resources.

To minimize the security risks associated with a shared network on the
Internet, we have implemented extensive security measures in our services. We
use encryption technologies to protect the confidentiality of information
transmitted over the Internet. Customer access to our services is controlled
through specific user identification and password combinations. We also protect
our services through firewalls, which are intended to restrict unauthorized use
and prevent security breaches. Additionally, we contract with third-party
organizations to test the integrity of our security protocols.

CUSTOMERS

We have offered our viaLink services for two years, and we currently have
more than 620 customers, including 420 Coors distributors. Our existing customer
base is primarily small suppliers and retailers. Currently, we are targeting
large national and regional customers. Recently, we have signed several large
national customers such as Coors Brewing Company, Kraft Foods, Spartan Stores
and Unified Western Grocers.

In addition to our viaLink services, we also provide web hosting activities
for a limited number of our customers. In 1999, web hosting services accounted
for 48% of our revenues.

Three customers individually accounted for 20%, 13% and 10% of our total
revenues in 1997; 13%, 11% and 11% of our total revenues in 1998; and 27%, 14%
and 12% of our total revenues in 1999. Likewise, approximately 57%, 49% and 70%
of our total revenues were attributable to five clients in 1997, 1998 and 1999,
respectively. Due to the sale of our consulting and systems integration assets,
we lost more than 90% of our historical revenue. We will continue to be
dependent upon revenues from a limited number of customers until we achieve
market penetration. In 1999, no one customer accounted for more than 27% of
revenues.

SALES AND MARKETING

We market our services to the CPG and grocery industries directly through
our sales and marketing team and senior staff members and indirectly through our
alliances, particularly Ernst & Young and i2 Technologies. As of March 3, 2000,
our sales and marketing team consisted of 16 full-time employees. We intend to
continue to expand our sales and marketing team in 2000 and to further leverage
our relationships with Ernst & Young, i2 Technologies, and Hewlett-Packard.

Our sales and marketing team is responsible for generating sales leads,
following-up on customer referrals, signing contracts with new customers and
providing input into our services and product development efforts based on
customer feedback and market data. We generate sales and marketing leads through
trade advertising, customer referrals, public relations, trade shows and
strategic relationships. We also use a variety of other consulting and
contractor relationships to help develop and promote our services. We believe
forming indirect sales and co-marketing relationships, such as with i2
Technologies and Ernst & Young, will allow us to leverage the significant
resources of these larger organizations and more rapidly penetrate our target
market.

Our marketing strategy is focused on increasing the awareness of the
viaLink brand and services, educating our target market on the benefits of
business-to-business electronic commerce and positioning ourselves as the
cornerstone of the CPG and grocery industries' electronic commerce strategy and
activities. To increase the awareness of our brand and understanding of our
services, we recently launched a brand awareness campaign that included a new
logo, advertising campaign, customer newsletter, Web site and sales collateral
and presentation materials.

We intend to significantly expand our sales and marketing activities in
2000. We intend to continue to build our brand awareness and generate additional
sales leads by increasing our staff, marketing expenditures and advertising and
participating in trade shows.

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PRODUCT DEVELOPMENT AND ENHANCEMENT

We initially introduced syncLink in 1997 and intend to continue to make
significant investments in product development and enhancements to improve and
extend our services, including enhancements to our Scan Based Trading service.
Our plans also include a wide deployment of XML to enable third-party technology
providers, including our "viaLink ready Program" members, to accelerate the
adoption of our services by the industry.

Growth of our services will require that we continue to invest in our
hardware platform, including additional servers, enterprise storage systems and
additional backup and recovery capabilities. We also expect to deploy our
services across multiple data centers to accommodate expansion into
international markets.

In addition to internal product development and enhancement efforts, we
intend to seek acquisitions of complementary businesses, products and
technologies, or enter into joint venture or license agreements to broaden our
service offerings and provide more comprehensive solutions to the CPG and
grocery supply chain.

Currently, the dynamic nature of the information technology industry places
significant research and development demands on businesses that desire to remain
competitive. Our future success, particularly our ability to achieve widespread
market adoption, depends on the success of our product development and
enhancement efforts in a timely manner. There are a number of risks and
challenges involved in the development of new features and technologies which,
if not successfully addressed, would harm our business.

As of March 3, 2000, our product development, technical support and
operations staff consisted of 27 full-time employees. Our product development
expenses were $1.2 million in 1998 and $2.8 million in 1999. We believe that
significant investments in product development and enhancement will be required
to remain competitive.

PROPRIETARY RIGHTS

Our success and ability to compete are dependent upon our ability to
develop and maintain the proprietary aspects of our technology and operate
without infringing on the proprietary rights of others. We have no patents or
patent applications pending. Instead, we rely primarily on a combination of
copyright, trademark and trade secret laws, confidentiality procedures and
contractual provisions to protect our proprietary rights. Because the software
development industry is characterized by rapid technological change, we believe
that factors such as the technological and creative skills of our personnel, new
product developments, frequent product enhancements, name recognition and
reliable product maintenance are more important to establishing and maintaining
a technology leadership position than the various legal protections available
for our technology. viaLink(R) and Chainlink(R) are our registered trademarks.
viaLink ready(SM) and syncLink(SM) are our service marks.

We also require employee and third-party non-disclosure and confidentiality
agreements. We seek to protect our software, documentation and other written
materials under trade secret and copyright laws, which afford only limited
protection. We cannot be certain that others will not develop technologies that
are similar or superior to our technology or design around the copyrights and
trade secrets owned by us. We believe, however, that these measures afford only
limited protection. Despite these precautions, it may be possible for
unauthorized parties to copy portions of our software products, reverse
engineer, or obtain and use information that we regard as proprietary.

Although we are not aware of any claims that we are infringing any
proprietary rights of third parties, there can be no assurance that third
parties will not claim infringement by us in the future. We expect that software
product developers will increasingly be subject to infringement claims as the
number of products and competitors in our industry segment grows and the
functionality of products in different industry segments overlaps. Any
infringement claims against us, with or without merit, could be time consuming
to defend, result in costly litigation, divert management's attention and
resources, cause product
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shipment delays or require us to enter into royalty or licensing agreements. In
the event of a successful claim of product infringement against us, should we
fail or be unable to either license the infringed or similar technology or
develop alternative technology on a timely basis, our business, operating
results and financial condition could be materially adversely affected.

We rely upon software that we license from third parties, including
software that is integrated with our internally developed software and is used
in our products to perform key functions. There can be no assurance that these
third-party software licenses will continue to be available to us on
commercially reasonable terms. The loss of or inability to maintain any such
software licenses could result in shipment delays or reductions until equivalent
software could be developed, identified, licensed and integrated and could
materially adversely affect our business, operating results and financial
condition.

COMPETITION

The business-to-business electronic commerce environment in which we
operate is still evolving and subject to rapid change. Currently, we compete
principally on the basis of the specialized nature and uniqueness of our
services. We believe the in-depth industry knowledge embedded in the
functionality of our services, our cost-effective subscription pricing, and the
accessibility of our services to all potential customers in the industry are
competitive advantages for us. Additionally, we believe we have the only
Internet-based electronic commerce solution in production today for
synchronization of item, price and promotion information for the CPG and grocery
industries.

- Large, enterprise-wide software vendors, developers and integrators such
as EDS, i2 Technologies, IBM, Manugistics, Oracle and SAP;

- EDI providers such as GEIS and Sterling Commerce;

- Large business-to-business electronic commerce exchange vendors such as
Ariba, CommerceOne and VerticalNet;

- Other database vendors such as A.C. Nielsen, Information Resources and
QRS;

- Industry-led initiatives such as UCCnet;

- Big 5 consulting firms such as Andersen Consulting, Deloitte & Touche,
Ernst & Young, KPMG and PricewaterhouseCoopers; and

- Existing industry participants who may attempt to deploy their
proprietary systems as industry solutions.

These potential competitors, if successful, may provide functionality
similar to our services. Many of our potential competitors have substantially
greater resources than we do. Any failure by us to achieve rapid market
penetration or to successfully address the risks posed by expected competition
would have a material adverse effect on our business, financial condition and
operating results.

We recently joined UCCnet's alliance as an architect partner to leverage
our services through UCCnet's emerging electronic marketplace for the CPG and
grocery industries. UCCnet also recently announced it had awarded a multi-year
contract to AppNet, Inc. to develop, build and maintain UCCnet's electronic
marketplace. AppNet will design and develop user interfaces, perform supply
chain integration, provide implementation and consulting services and will be
responsible for hosting and operations. Although we do not believe AppNet is a
direct competitor to our syncLink service at this time, they could become a
competitor if they choose to build similar functionality rather than use our
services in the UCCnet marketplace.

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EMPLOYEES

As of March 3, 2000, we had 103 full-time employees and three part-time
employees. Of the full-time employees, 16 were employed in sales and marketing,
27 were employed in product research and development, technical support and
operations, 41 were employed in implementation, customer support and service and
19 were employed in human resources, administration, finance and accounting.
None of our employees are represented by a labor union. We have not experienced
any work stoppages and consider our relations with our employees to be good.

LEGAL PROCEEDINGS

On July 16, 1999, Investor Awareness filed suit against us in the District
Court for Cook County, Illinois alleging that we breached a contract between
Investor Awareness and us relating to investor relations services. Investor
Awareness has alleged that we agreed to issue options to it pursuant to the
terms of that contract. Investor Awareness is seeking a declaratory judgment for
the options it allegedly earned under that contract and for damages of
approximately $67,500 plus costs and attorneys fees. We have filed an answer
stating that we have not breached any of our duties under the contract. We will
vigorously defend the claims of this suit. However, we may not prevail in this
litigation.

There are no other material legal proceedings pending or, to our knowledge,
threatened against us.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

Set forth below is certain information with respect to each of our
executive officers and directors as of March 3, 2000.

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ---- --- -----------
<S> <C> <C>
Lewis B. Kilbourne, 53 Chairman of the Board and Chief Executive Officer
Ph.D................... (Class I)
Robert N. Baker.......... 48 President, Chief Operating Officer and Director (Class
II)
Robert I. Noe............ 48 Executive Vice President of Business Development
Patrick T. Fitzgerald.... 37 Senior Vice President of Sales
J. Andrew Kerner......... 40 Senior Vice President of Finance and Chief Financial
Officer
David M. Lloyd........... 48 Senior Vice President of Operations
Sue A. Hale.............. 55 Director (Class I)
Warren D. Jones.......... 57 Director (Class II)
Jimmy M. Wright.......... 46 Director (Class III)
</TABLE>

Lewis B. "Bucky" Kilbourne, Ph.D. has served as a director since December
1997 and was elected as our Chief Executive Officer in October 1998 and Chairman
of the Board in November 1999. Dr. Kilbourne has more than 20 years of financial
experience in the retail, foodservice and banking business. Prior to viaLink,
Dr. Kilbourne was formerly with Oklahoma City University where he was a
Professor of Finance and Economics. Dr. Kilbourne also served as President of
Kilbourne and Associates, a management consulting firm located in Oklahoma City.
From January 1994 to May 1997, Dr. Kilbourne served as Chief Financial Officer
of Sonic Corporation, a national restaurant chain based in Oklahoma City. He has
also held executive financial positions with Popeye's, Church's Fried Chicken,
Brock Hotels, Showbiz Pizza and National Convenience Stores. Dr. Kilbourne
received his B.A. in political science and economics from Louisiana State
University and an M.A. and Ph.D., both in economics, from the University of
Pennsylvania.

Robert N. Baker is one of our co-founders and has served as a director
since our formation in 1985 and was a Vice President until October 1998. Mr.
Baker has served as our President and Chief Operating Officer since October 1998
and is responsible for our technology development and services. Mr. Baker has
over 20 years of experience in management, technical support and systems
development within the retail industry. He received his B.S. in mathematics from
Oklahoma Christian University of Science and Arts.

Robert I. Noe serves as our Executive Vice President of Business
Development and is responsible for marketing, alliances and industry relations.
Mr. Noe joined us in April 1999. Prior to that time, Mr. Noe served as the Vice
President of Industry Solutions and in other management positions at Electronic
Data Systems, a publicly traded professional services company. Mr. Noe received
his B.S. and M.A. in business administration from Central Michigan University.

Patrick T. Fitzgerald serves as our Senior Vice President of Sales. Mr.
Fitzgerald joined us in January 2000. From November 1998 to January 2000, he
served as Vice President of Sales and Distribution for the Caribbean Region of
Citibank N.A. Mr. Fitzgerald held a variety of senior sales and marketing
management positions for Campbell Soup Company from 1986 to 1998. Mr. Fitzgerald
received his B.A. in business administration from Southwest Oklahoma State
University.

J. Andrew Kerner serves as our Senior Vice President of Finance and Chief
Financial Officer. Mr. Kerner joined us in April 1999. From April 1998 to April
1999, he served as Executive Vice President and Chief Financial Officer of
Cameron Ashley Building Products. Mr. Kerner also served in several senior
financial management positions with PepsiCo's Frito-Lay division in the United
States and Europe from November 1987 to April 1998. Mr. Kerner received his B.A.
in economics and an M.B.A. in finance from the University of Texas.

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David M. Lloyd has served as our Senior Vice President of Operations since
September 1999. Mr. Lloyd joined us in April 1999 as Vice President of Human
Resources. From April 1997 to April 1999, he served as Senior Vice President of
Human Resources and Administration for Fujitsu ICL Retail Systems, Inc. In that
capacity, he handled all human resource and administration responsibilities for
United States and Europe operations, including facilities management for all 44
ICL locations in the United States. Mr. Lloyd also served as Vice President of
Human Resources for Station Casinos from June 1994 to April 1997. Mr. Lloyd
received his B.S. in economics from Upsala College in New Jersey and his M.B.A.
from New York Institute of Technology.

Sue A. Hale has served as a director of viaLink and as the chairwoman of
the compensation committee and a member of the audit committee of the board of
directors since March 1999. Ms. Hale is currently the Executive Editor of The
Daily Oklahoman, the largest daily newspaper in Oklahoma. From January 1996 to
January 2000, Ms. Hale was the General Manager of Connect Oklahoma, a statewide
news and information Internet company. Ms. Hale received her B.A. in English and
music from Southwestern College.

Warren D. Jones has served as a director of viaLink and as the chairman of
the audit committee and a member of the compensation committee of the board of
directors since December 1999. Mr. Jones is currently retired. Prior to his
retirement, Mr. Jones spent 31 years at PricewaterhouseCoopers LLP where he
served as managing partner in New Orleans and Pittsburgh, and most recently was
responsible for risk management and compliance for the firm's Southwest region
technology, telecommunications and entertainment clients. Mr. Jones received his
B.S. in industrial and labor relations from Cornell University and his M.B.A.
from Syracuse University.

Jimmy M. Wright has served as a director of viaLink and as a member of the
compensation and audit committees of the board of directors since February 1998.
Mr. Wright is currently the Managing Partner with Diversified Retail Solutions,
L.L.C., a supply chain consulting business, where he has served since February
1998. From July 1998 to September 1999, Mr. Wright served as the Chief Logistics
Officer of Amazon.com, a publicly-traded Web-based retailer. In January 1998,
Mr. Wright retired as Vice President of Distribution for Wal-Mart Stores, Inc.
During his 13-year tenure at Wal-Mart, he was involved in all facets of
strategic planning, including supply chain management, personnel, site selection
and building design. Mr. Wright received his B.B.A. in management from the
University of Texas, Permian Basin.

CLASSIFIED BOARD OF DIRECTORS

Our board of directors consists of five directors divided into three
classes with each class serving for a term of three years:

- Class I, comprised of Dr. Kilbourne and Ms. Hale, whose terms will expire
in 2000;

- Class II, comprised of Messrs. Jones and Baker, whose terms will expire
in 2001; and

- Class III, comprised of Mr. Wright, whose term will expire in 2002.

At each annual meeting of stockholders, the holders of our common stock will
elect directors to succeed those directors whose terms are expiring. Dr.
Kilbourne served as one of our two non-employee directors until he was elected
Chief Executive Officer on October 1, 1998. Ms. Hale, Mr. Jones and Mr. Wright
are our non-employee directors.

COMMITTEES OF THE BOARD OF DIRECTORS

Our board of directors has established a compensation committee and an
audit committee.

Compensation Committee. The compensation committee reviews and makes
recommendations to the board concerning salaries and incentive compensation for
our officers and employees. The compensation committee also administers our
stock plans. The members of the compensation committee are Ms. Hale, Mr. Wright
and Mr. Jones.

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<PAGE> 42

Audit Committee. The audit committee makes recommendations to the board of
directors regarding the selection of independent auditors, reviews the results
and scope of audits and other accounting-related services and reviews and
evaluates our internal control functions. The members of the audit committee are
Mr. Jones, Ms. Hale and Mr. Wright.

DIRECTOR COMPENSATION

We currently pay our non-employee directors $10,000 annually for their
services as members of the board of directors. Under our 1999 Stock Option/Stock
Issuance Plan, non-employee directors automatically receive stock options to
purchase 48,000 shares of our common stock, provided the non-employee director
has served on the board for at least six months. Employee directors are eligible
to receive stock option grants at the discretion of the compensation committee
of the board of directors under our 1999 Stock Option/Stock Issuance Plan. For a
further description of the plan, see "-- Stock Plans -- 1999 Stock Option/Stock
Issuance Plan."

In 1999, we granted options to our non-employee directors as follows:

- Ms. Hale -- options to purchase 60,000 shares of our common stock at an
exercise price of $3.81 per share and 48,000 shares of our common stock
at an exercise price of $15.22 per share.

- Mr. Wright -- options to purchase 48,000 shares of our common stock at an
exercise price of $4.81 per share and 48,000 shares of our common stock
at an exercise price of $15.22 per share; and

- Mr. Jones -- options to purchase 50,000 shares of our common stock at an
exercise price of $15.22 per share.

In 1998, we granted options to purchase 60,000 shares of our common stock
at an exercise price of $2.25 to each of our non-employee directors, Mr. Wright
and Robert L. Barcum. We also granted options to purchase 800,000 shares of our
common stock to Dr. Kilbourne, 400,000 of which were granted pursuant to our
1998 Non-Qualified Stock Option Plan at an exercise price of $0.75 per share,
200,000 of which were granted pursuant to our 1995 Stock Option Plan at an
exercise price of $0.75 per share and 200,000 of which were granted pursuant to
our 1998 Non-Qualified Stock Option Plan at an exercise price of $0.78 per
share. We also granted options to purchase 600,000 shares of our common stock to
Mr. Baker, 400,000 of which were granted pursuant to our 1998 Non-Qualified
Stock Option Plan at an exercise price of $0.75 per share and 200,000 of which
were granted pursuant to our 1995 Stock Option Plan at an exercise price of
$0.83 per share. No option grants or awards were made to any director in 1997.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Dr. Kilbourne served as a member of the compensation committee of our board
of directors prior to October 1998 when he became an officer of viaLink.

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<PAGE> 43

EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth the compensation
earned by our Chief Executive Officer and our four most highly compensated
executive officers other than our Chief Executive Officer during 1999. During
1999, these executive officers received additional non-cash compensation,
perquisites and other personal benefits. However, the aggregate amount and value
thereof did not exceed the lesser of $50,000 or 10% of the total annual salary
and bonus paid to and accrued for the individual during the year.

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION(1) OPTIONS
- --------------------------- ---- -------- --------------- ------------
<S> <C> <C> <C> <C>
Lewis B. Kilbourne, Ph.D....................... 1999 $161,731 $84,375 340,000
Chief Executive Officer 1998 20,769(2) 40,000(3) 800,000
Robert N. Baker................................ 1999 $180,963 $57,703 --
President and Chief Operating Officer 1998 120,713 -- 600,000
1997 169,940 -- --
Robert I. Noe.................................. 1999 $168,269(4) $56,177 700,000
Executive Vice President of Business
Development
J. Andrew Kerner............................... 1999 $164,423(4) $68,872 600,000
Senior Vice President of Finance and Chief
Financial Officer
David M. Lloyd................................. 1999 $137,077(4) $48,198 500,000
Senior Vice President of Operations
</TABLE>

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

(1) Unless otherwise noted, other annual compensation consists of annual bonus
and car allowance.

(2) Dr. Kilbourne was hired in October 1998 and was compensated at an annual
rate of $150,000 for 1999.

(3) Mr. Kilbourne received $30,000 for his services in connection with the sale
of our consulting and systems integration assets to NetPlex and $10,000 for
his service as a non-employee member of the board of directors. Both of
these amounts were earned prior to his employment with viaLink.

(4) Messrs. Noe, Kerner and Lloyd were hired in April 1999 and were compensated
at annual rates of $250,000, $225,000 and $190,000, respectively for 1999.

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<PAGE> 44

Option Grants in 1999. The following table sets forth information
concerning stock options granted to each of our executive officers listed in the
Summary Compensation Table during the year ended December 31, 1999. Except for
the limited stock appreciation rights summarized in "Management -- Stock Plans,"
we have not granted any stock appreciation rights.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
---------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(3)
OPTIONS EMPLOYEES PRICE PER -----------------------------
NAME GRANTED IN 1999(2) SHARE EXPIRATION DATE 0% 5% 10%
- ---- ---------- ---------- --------- --------------- --- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Lewis B. Kilbourne.............. 200,000 3.3% $ 3.81 Sept. 3, 2009 -- $ 480,000 $1,215,000
140,000 2.3% $15.22 Dec. 20, 2009 -- $1,340,000 $3,396,000
Robert N. Baker................. -- -- -- -- -- -- --
Robert I. Noe................... 600,000 9.8% $ 3.61 May 21, 2009 -- $1,363,000 $3,454,000
100,000 1.6% $15.22 Dec. 20, 2009 -- $ 957,000 $2,425,000
J. Andrew Kerner................ 500,000 8.2% $ 3.61 May 21, 2009 -- $1,136,000 $2,879,000
100,000 1.6% $15.22 Dec. 20, 2009 -- $ 957,000 $2,425,000
David M. Lloyd.................. 400,000 6.5% $ 3.61 May 21, 2009 -- $ 909,000 $2,303,000
100,000 1.6% $15.22 Dec. 20, 2009 -- $ 957,000 $2,425,000
</TABLE>

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

(1) Each option represents the right to purchase one share of common stock and
generally vests at a rate of 33% per annum over three years. See "-- 1999
Stock Incentive Plan."

(2) The total number of options granted to employees during 1999 was 6,120,000
options.

(3) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 0%, 5%
and 10% assumed annual rates of compounded stock price appreciation are
mandated by rules of the Securities and Exchange Commission and do not
represent our estimate or projection of our future common stock prices.
These amounts represent assumed rates of appreciation in the value of our
common stock from the deemed fair market value for accounting purposes on
the date of grant. Actual gains, if any, on stock option exercises are
dependent on the future performance of the common stock and overall stock
market conditions. The amounts reflected in the table may not necessarily be
achieved.

FISCAL YEAR-END OPTION VALUES

The following table sets forth information concerning the number and value
of unexercised options held by each of our executive officers listed in the
Summary Compensation Table as of December 31, 1999.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 1999 AT DECEMBER 31, 1999(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Lewis B. Kilbourne.......................... 260,004 799,996 $4,532,075 $11,310,330
Robert N. Baker............................. 200,004 399,996 $3,482,670 $ 6,965,130
Robert I. Noe............................... -- 700,000 -- $ 9,042,225
J. Andrew Kerner............................ -- 600,000 -- $ 7,584,765
David M. Lloyd.............................. -- 500,000 -- $ 6,127,125
</TABLE>

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

(1) The last reported sale price of the common stock of viaLink as of December
31, 1999 was $18.188 per share.

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<PAGE> 45

STOCK PLANS

1999 Stock Option/Stock Issuance Plan

At our 1999 annual meeting our stockholders approved the adoption of The
viaLink Company 1999 Stock Option/Stock Issuance Plan to attract and retain the
services of individuals essential to our long-term growth and financial success.
The 1999 Plan is the successor equity incentive program to our 1995 Stock Option
Plan, 1998 Non-Qualified Stock Option Plan and 1998 Stock Grant Plan. The 1999
Plan incorporated the outstanding options under the predecessor plans, and we
will make no further option grants under those plans.

We have reserved 15,000,000 shares of our common stock for issuance over
the ten year term of the 1999 Plan, including shares initially reserved under
the predecessor plans. This share reserve will automatically be increased on the
first trading day of each calendar year, beginning with the 2000 calendar year,
by an amount equal to 1% of the shares of common stock outstanding on the last
trading day of the immediately preceding calendar year, but in no event will
this annual increase exceed 200,000 shares. No single participant in the 1999
Plan may receive option grants or direct stock issuances for more than 1,200,000
shares in the aggregate per calendar year. As of March 3, 2000, 10,653,056
options to purchase shares of common stock at a weighted average exercise price
of $5.01 were outstanding under the 1999 Plan and all prior plans. The 1999 Plan
has three separate programs

- Discretionary Option Grant Program. Under the discretionary option grant
program, we may grant options to purchase our common stock to eligible
individuals in our employ or service, including officers, non-employee
directors, consultants and advisors.

- Stock Issuance Program. Under the stock issuance program, we may issue
these eligible individuals shares of common stock directly through the
purchase of shares or as a bonus tied to performance.

- Automatic Option Grant Program. The automatic option grant program
provides for automatic option grants at periodic intervals to eligible
non-employee directors.

The compensation committee of our board of directors administers the
discretionary option grant and stock issuance programs and determines the
following with respect to individual option grants or stock issuances:

- Which eligible individuals are to receive option grants or stock
issuances;

- The time or times option grants or stock issuances are to be made;

- The number of shares subject to each grant or issuance;

- The status of any granted option as either an incentive stock option or a
non-statutory stock option under the federal tax laws;

- The vesting schedule for the option grant or stock issuance; and

- The maximum term for which any granted option is to remain outstanding.

Neither the compensation committee nor the board exercises any administrative
discretion with respect to option grants made under the automatic option grant
program for the non-employee directors.

The exercise price for the options may be paid in cash or in shares of our
common stock valued at fair market value on the exercise date. An individual
option recipient may also use a cashless exercise of the option through a
same-day sale program. In addition, the compensation committee may allow a
participant in the 1999 Plan to pay the option exercise price or direct issue
price, including any withholding taxes in connection with the acquisition of the
underlying shares, with a full-recourse, interest-bearing promissory note.

In the event we are acquired, whether by merger or asset sale or
board-approved sale by the stockholders of more than 50% of our voting stock,
each outstanding option which is not assumed by the

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<PAGE> 46

successor corporation or otherwise continued will automatically accelerate in
full. In addition, all unvested shares under the discretionary option grant and
stock issuance programs will immediately vest, except to the extent our
repurchase rights with respect to those shares are assigned to the successor
corporation or otherwise continued in effect. Further, the compensation
committee may grant options and issue shares under the discretionary option
grant and stock issuance programs which will accelerate (1) in an acquisition,
even if the options are assumed; (2) in connection with a hostile change of
control, whether through a successful tender offer for more than 50% of our
outstanding common stock or by proxy contest for the election of board members;
or (3) upon a termination of an individual's service following an acquisition or
hostile change of control.

We may issue stock appreciation rights under the discretionary option grant
program which provide the holders with the election to surrender their
outstanding options for a distribution from us. The distribution will be equal
to the fair market value of the vested shares subject to the surrendered option
less the aggregate exercise price payable for the shares. We may make this
distribution in cash or in shares of our common stock. There are currently no
outstanding stock appreciation rights under the predecessor plans.

The compensation committee has the authority to cancel outstanding options
under the discretionary option grant program, including options incorporated
from predecessor plans, in return for the grant of new options. These new
options may be for the same or a different number of option shares with an
exercise price based upon the fair market value of the common stock on the new
grant date.

Under the automatic option grant program, we will grant each person who
becomes a non-employee director an option to purchase 48,000 shares of our
common stock at the time the person is first elected or appointed to our board
of directors, as long as the person was not previously our employee. In
addition, on the date of each annual stockholders meeting, each person who has
served as a non-employee director for at least six months and continues to serve
as a non-employee director receives an option to purchase 48,000 shares of our
common stock. Each automatic option grant has an exercise price equal to the
fair market value per share of our common stock on the grant date and a maximum
term of 10 years. Each option is immediately exercisable, subject to our right
to repurchase any unvested shares at the original exercise price at the time the
individual ceases to be a board member. Each option grant vests upon the
individual's completion of one year of board service from the time of the grant.
However, each outstanding option automatically vests upon an acquisition or
change of control or the death or disability of the individual while serving as
a board member.

Limited stock appreciation rights are included as part of each automatic
option grant and may be granted to one or more officers as part of their
discretionary option grants. Options with these limited stock appreciation
rights may be surrendered to us upon the successful completion of a hostile
tender offer for more than 50% of our outstanding voting stock. In return for
the surrendered option, we pay the individual a cash distribution for each
surrendered share equal to the highest price per share paid in connection with
the tender offer less the exercise price for that share.

Our board of directors may amend or modify the 1999 Plan at any time,
subject to any required stockholder approval. The 1999 Plan will terminate no
later than May 29, 2009.

Employee Stock Purchase Plan

At our 1999 annual meeting, our stockholders approved the adoption of the
1999 Employee Stock Purchase Plan. This plan replaced our 1997 Employee Stock
Purchase Plan as of July 1, 1999. The 1999 Stock Purchase Plan provides eligible
employees of viaLink with the opportunity to acquire a proprietary interest in
viaLink through participation in a payroll-deduction based employee stock
purchase plan designed to operate in compliance with Section 423 of the Internal
Revenue Code. We have authorized and reserved 800,000 shares of common stock for
issuance under the Stock Purchase Plan. As of March 3, 2000, employees had
purchased 14,736 shares of common stock at a weighted average price of $3.51.

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<PAGE> 47

The Stock Purchase Plan is administered by the compensation committee of
the board of directors. The committee administers and interprets the Stock
Purchase Plan and has the authority to establish, adopt and revise rules and
regulations with respect to the Stock Purchase Plan.

Under the Stock Purchase Plan, shares will be issued through a series of
successive offering periods, each of a duration of twenty-four months. The first
offering period will run from July 1, 1999 to the last business day in July
2001. The next offering period is scheduled to commence on August 1, 2001.

Each offering period will be comprised of up to four six-month purchase
periods. Purchase periods will run from the first business day in February to
the last business day in July each year and from the first business day in
August each year to the last business day in January of the following year.
However, the first purchase period ran from July 1, 1999 to the last business
day in January 2000.

Any individual who customarily works for us for more than 20 hours per week
for more than five months per calendar year will be eligible to participate in
the stock purchase plan. However, if employees own or would own, assuming the
exercise of all stock options held by them, five percent or more of our total
combined voting power, they are not eligible to participate in the stock
purchase plan. A stock purchase plan participant may authorize payroll
deductions in any multiple of 1% of his or her cash earnings, up to a maximum of
10%. The option price is equal to 85% of the lower of (a) the fair market value
per share of common stock on the employee's entry date for the offering period
during which the purchase date occurs, or (b) the fair market value per share of
common stock on that purchase date. A participant is not permitted to purchase
more than 4,000 shares of common stock on any one purchase date. The
participants may not assign, encumber or otherwise transfer their stock options
except by will or under laws of inheritance.

Should viaLink be acquired by merger or asset sale during an offering
period, all outstanding purchase rights will be automatically exercised
immediately prior to the effective date of the acquisition.

Other Stock Options. In connection with a transaction with Vantage Capital
Resources, Inc., we issued John Simonelli and Larry E. Howell options to
purchase a total of 1,440,000 shares of common stock with an exercise price of
$1.25 per share. As of March 3, 2000, options to purchase 360,000 shares are
currently outstanding at a weighted average exercise price of $1.25 per share.

As of March 3, 2000, we had issued, through all of our incentive plans and
other stock option arrangements, options to purchase a total of 10,653,056
shares of common stock at a weighted average exercise price of $5.01. Of the
options issued, options to purchase 1,541,052 shares of common stock were
exercisable as of March 3, 2000, at a weighted average exercise price of $0.91
per share.

EMPLOYMENT ARRANGEMENTS

Dr. Kilbourne and Mr. Baker

On October 1, 1998, we entered into employment contracts with Lewis B.
Kilbourne and Robert N. Baker. Under the contracts, we will pay an annual base
salary of $150,000 to Dr. Kilbourne and $175,127 to Mr. Baker. Dr. Kilbourne and
Mr. Baker are each also eligible to receive an annual bonus equal to 50% of his
then current annual salary.

Under their contracts, we granted to each of Dr. Kilbourne and Mr. Baker
incentive stock options for the purchase of 200,000 shares of common stock under
the 1995 Plan and non-qualified stock options for the purchase of 400,000 shares
of common stock under the 1998 Non-Qualified Plan. Both the incentive stock
options and non-qualified stock options vest and become exercisable over a three
year period. The options granted to Dr. Kilbourne have an exercise price of
$0.75 per share. The incentive stock options granted to Mr. Baker are
exercisable for $0.83 per share and the non-qualified stock options are
exercisable for $0.75 per share. Dr. Kilbourne's incentive stock options expire
on February 28, 2005 and his non-qualified stock options expire on October 31,
2007. Mr. Baker's incentive stock options expire on September 29, 2007 and his
non-qualified stock options expire September 30, 2003. In the event the

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<PAGE> 48

contracts with Dr. Kilbourne or Mr. Baker are terminated or specific corporate
reorganization events occur, any non-exercisable options will become fully
exercisable.

Each employment contract has a term of three years and is subject to
automatic renewal on a year-to-year basis, unless either party provides
six-months prior written notice of termination. If we terminate the contracts
for any reason other than for "cause" (as defined in the agreement), or if Dr.
Kilbourne or Mr. Baker terminate their contract for any reason other than an
uncured breach, Dr. Kilbourne or Mr. Baker will be entitled to:

- The continuation of his then current salary and the benefits provided
pursuant to the agreement;

- A one time payment in the amount of the greater of:

(A) the bonus due; or

(B) 15% of the salary payable for the quarter in which the termination
occurred; and

- A lump sum payment of $400,000.

Messrs. Noe, Kerner and Lloyd

In April 1999, we entered into employment contracts with Robert I. Noe, J.
Andrew Kerner and David M. Lloyd. Under these contracts, we will pay an annual
base salary of $250,000 to Mr. Noe, $225,000 to Mr. Kerner and $190,000 to Mr.
Lloyd. Messrs. Noe and Kerner are each also eligible to receive an annual bonus
equal to 50% of his then current annual salary, and Mr. Lloyd is also eligible
to receive an annual bonus equal to 33% of his then current annual salary.

In connection with their employment contracts, we granted non-qualified
stock options to purchase 600,000, 500,000 and 400,000 shares of our common
stock under our 1995 Plan to Messrs. Noe, Kerner and Lloyd, respectively. The
options vest and become exercisable over a three year period and have a current
exercise price of $3.62. All of the options expire on May 21, 2009.

Each employment contract has a one year term with automatic renewal on a
year-to-year basis, unless either party provides 30 days prior written notice of
termination. If we terminate the contract for any reason other than for "cause"
(as defined under the applicable agreement), Messrs. Noe, Kerner and Lloyd will
be entitled are entitled to a lump sum payment equal to his then current annual
salary.

In March 2000, the compensation committee of our board of directors
approved an amendment to each of these employment contracts to extend the
initial term until May 25, 2001.

Mr. Fitzgerald

In July 1999, we entered into an employment agreement with Patrick
Fitzgerald. Under this agreement, we will pay Mr. Fitzgerald an annual base
salary of $190,000. Mr. Fitzgerald is also eligible to receive a potential
performance bonus up to $150,000 if he signs certain target accounts.

In connection with his employment agreement, we granted Mr. Fitzgerald
non-qualified options to purchase 200,000 shares of our common stock at an
exercise price of $17.50 under our 1999 Plan. Half of the options vest and
become exercisable over a two year period. The remaining options vest when
certain performance milestones are achieved.

Mr. Fitzgerald's employment arrangement is at will. However, if we
terminate Mr. Fitzgerald without cause at any time, Mr. Fitzgerald will be
entitled to severance compensation equal to six months of his then current
annual salary, payable over 12 months.

KEY MAN LIFE INSURANCE

We maintain a key man life insurance policy for Mr. Baker in the amount of
$1.25 million. We will receive any proceeds from this policy.

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<PAGE> 49

LIMITATION OF LIABILITY AND INDEMNIFICATION

Our certificate of incorporation limits the liability of our directors to
us or our stockholders for breaches of the directors' fiduciary duties to the
fullest extent permitted by Delaware law. In addition, our bylaws provide for
mandatory indemnification of directors and officers to the fullest extent
permitted by Delaware law. We also maintain directors' and officers' liability
insurance and enter into indemnification agreements with all of our directors
and executive officers.

INSIDER TRADING POLICY AND NON-PUBLIC INFORMATION DISCLOSURE

We have adopted policies relating to insider trading to prevent the misuse
of material and non-public information by our officers, directors and employees
as well as the disclosure of non-public information to any person outside of
viaLink. Under this policy, our officers, directors and employees are prohibited
from engaging in transactions in our securities when that person possesses
material information which has not previously been made public. Material
information is information that would affect an investor's decision to purchase
or sell our securities or those of another publicly-held corporation. In
addition, our officers, directors and employees are prohibited from disclosing
any non-public information to any person outside of viaLink if that information
has been obtained as a result of or in connection with that person's position as
an officer, director or employee of us. These policies also provide guidelines
regarding the maintenance of the confidentiality of non-public information so as
to avoid dissemination of that information prior to public disclosure.

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<PAGE> 50

CERTAIN TRANSACTIONS

ijob SALE

On December 31, 1998, we sold our wholly-owned subsidiary, ijob, to DCM
Company in exchange for an $800,000 promissory note. David C. Mitchell is the
sole stockholder of DCM Company and was the president of ijob. On March 11,
1999, we received $800,000 plus all accrued interest from DCM Company in full
payment of the promissory note.

NOTES PAYABLE TO STOCKHOLDERS AND OFFICERS

As of September 30, 1998, Robert L. Barcum, our former Chief Executive
Officer, Robert N. Baker and Russell L. Reinhardt, our former Vice President,
had loaned us, in the aggregate, $443,055. In return, we issued these
individuals promissory notes, bearing interest at rates of 8.5% to 11.5% per
annum, with maturity dates through 2001. We believe that the terms of these
loans were at least as favorable as we could have obtained from unaffiliated
third-party lenders.

On October 16, 1998, we repaid the promissory notes to Messrs. Barcum,
Baker and Reinhardt from proceeds of the consulting and systems integration
assets sale.

PAYMENTS AND OPTION GRANTS TO EXECUTIVE OFFICERS AND DIRECTORS

For a description of transactions with directors and executive officers,
see "Management -- Employment Arrangements" and "-- Director Compensation."

On October 16, 1998, we paid Dr. Kilbourne $30,000 for his services
associated with the consulting and systems integration assets sale.

TRANSACTIONS WITH HEWLETT-PACKARD

On February 4, 1999, we entered into a Note Purchase Agreement with
Hewlett-Packard pursuant to which Hewlett-Packard purchased from us a $6.0
million subordinated secured promissory note. Upon approval by our stockholders
in May 1999, the note was exchanged for a subordinated secured convertible
promissory note, convertible into our common stock at a price of $1.75 per
share. This note is secured by our current intellectual property and any
intellectual property we may acquire in the future. Hewlett-Packard may convert
the note to common stock beginning on August 5, 2000. The terms of our loan from
Hewlett-Packard contemplates that we will use up to 50% of the loan amount to
purchase Hewlett-Packard products and services. In addition, Hewlett-Packard has
a right to have an advisor present at our board meetings.

In addition, on March 22, 2000, as part of a private placement, we issued
66,801 shares of our common stock and a warrant to purchase an additional 10,021
shares of our common stock at an exercise price of $41.92 per share to
Hewlett-Packard in exchange for $2.0 million.

TRANSACTIONS WITH ERNST & YOUNG

On May 3, 1999, we entered into a strategic relationship with Ernst & Young
whereby Ernst & Young will provide us with its consulting services in connection
with our syncLink service and our other services. In connection with this
agreement, we agreed to pay Ernst & Young a royalty for a period of two years
beginning on the date of agreement. This royalty will be equal to 7% of our
revenues from our subscription services which we provide to suppliers and
retailers of food and consumer packaged goods. If at least ten of Ernst &
Young's "Tier 1" clients in the CPG and grocery industries subscribe to our
services during the initial two-year term, we will be required to continue the
royalty payment in perpetuity. Ernst & Young will not receive any royalties for
services we provide to clients subject to the reporting requirements of the
federal securities laws for which Ernst & Young serves as the principal
independent auditor, nor will the clients subject to the reporting requirements
of the federal securities laws for which

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<PAGE> 51

Ernst & Young serves as the principal independent auditor be counted as one of
Ernst &Young's "Tier 1" clients that it brings to us.

As a part of this agreement, we issued a warrant to Ernst & Young pursuant
to which it purchased 1,000,000 shares of our common stock at a price of $2.00
per share.

In addition to the above, Ernst & Young agreed to provide professional
services to us to further the implementation of our services. We may pay for
Ernst & Young's services either in cash or in shares of our common stock. If we
pay with our common stock, we will receive a substantial discount from the
standard rates Ernst & Young charges for such services. Our common stock will be
valued at 85% of the average closing bid prices for the five trading days prior
to the date the invoice for these services is rendered to us by Ernst & Young.
However, if Ernst & Young is the beneficial owner of more than 9.99% of the
voting power of our common stock on a fully-diluted basis, we will not have the
option to pay for such services with our common stock.

TRANSACTIONS WITH i2 TECHNOLOGIES

On October 12, 1999, we entered into a strategic relationship with i2
Technologies primarily to integrate the products and services of our two
companies, extend the solutions across multiple industries and develop joint
sales and marketing programs. As a part of our relationship, i2 Technologies
invested $5.0 million in us in exchange for 895,536 shares of our common stock
and a warrant to purchase an additional 746,268 shares of our common stock at an
exercise price of $6.70 per share. The initial term of the agreement will expire
on December 31, 2003 and will automatically renew on a year-to-year basis
thereafter unless terminated by either party. Additionally, we have agreed to
pay i2 Technologies a royalty of 5% of the syncLink and Chain Pricing
subscription revenues during the term of the agreement. We will also pay i2
Technologies additional royalties based upon subscription revenues received from
new customers with whom i2 Technologies had "significant involvement" in the
sales process. i2 Technologies has agreed to pay us a royalty based upon
revenues i2 Technologies receives from providing the syncLink and Chain Pricing
services outside of the CPG and grocery industries.

We believe that the transactions disclosed above were made on terms no less
favorable to us than would have been obtained from unaffiliated third parties.
We have adopted a policy that any future transactions between us and our
officers, directors and five percent or greater stockholders will be subject to
approval by a majority of our disinterested independent directors and will be on
terms no less favorable than we could obtain from unaffiliated parties.

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<PAGE> 52

PRINCIPAL STOCKHOLDERS

The following table presents information regarding the beneficial ownership
of our common stock as of March 3, 2000, as adjusted to reflect the sale of
common stock offered by us in this offering for:

- each person known by us to beneficially own more than 5% of our common
stock;

- each executive officer named in the Summary Compensation Table on page
41;

- each of our directors; and

- all of our executive officers and directors as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power with
respect to the securities. Except as indicated by footnote, and subject to
applicable community property laws, the persons named in the table have sole
voting and investment power with respect to all shares of common stock shown as
beneficially owned by them. Shares of common stock subject to options or
warrants that are currently exercisable or exercisable within 60 days of March
22, 2000 are treated as outstanding and beneficially owned with respect to the
person holding these options or warrants for the purpose of computing the
percentage ownership of that person. However, these shares are not treated as
outstanding for purposes of computing the percentage ownership of any other
person. The percentage of beneficial ownership before the offering is based on
19,735,416 shares outstanding as of March 3, 2000. The percentage of beneficial
ownership after the offering is based on shares, including the
shares to be sold by us in this offering.

The post-offering ownership percentages in the table below do not take into
account any exercise of the underwriters' over-allotment option.

<TABLE>
<CAPTION>
SHARES OWNED SHARES OWNED
PRIOR TO THE OFFERING AFTER THE OFFERING
--------------------- -------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
- ------------------------ ---------- -------- --------- -------
<S> <C> <C> <C> <C>
Executive Officers and Directors:
Lewis B. Kilbourne.................................. 264,084 1.3 264,084 *
Robert N. Baker..................................... 2,226,120 11.2 2,226,120 --
Robert I. Noe....................................... 200,000 1.0 200,000 *
Patrick T. Fitzgerald............................... -- -- -- --
J. Andrew Kerner.................................... 167,111 * 167,111 *
David M. Lloyd...................................... 133,333 * 133,333 *
Sue A. Hale......................................... 48,000 * 48,000 *
Warren D. Jones..................................... 82,000 * 82,000 *
Jimmy M. Wright..................................... 178,000 * 178,000 *
All Executive officers and directors as a group (9
persons)......................................... 3,298,648 15.7 3,298,648 --
Other 5% Stockholders:
Persons and entities deemed to be affiliated with
Ernst & Young U.S. LLP........................... 1,044,512 5.1 1,044,512 --
i2 Technologies..................................... 1,641,804 8.0 1,641,804 --
Robert L. Barcum.................................... 1,626,784 8.2 1,626,784 --
</TABLE>

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

* Indicates beneficial ownership of less than 1% of the total outstanding common
stock.

Executive Officers and Directors. Additional information regarding the
beneficial ownership of shares held by our executive officers and directors is
contained below. The address of each executive officer and director, other than
Messrs. Noe, Fitzgerald, Kerner and Lloyd is 13800 Benson Road, Edmond, Oklahoma
73013-6417.

- Lewis B. Kilbourne. Includes options to purchase 260,004 shares of common
stock that are exercisable within 60 days of March 22, 2000.

50
<PAGE> 53

- Robert N. Baker. Includes options to purchase 200,004 shares of common
stock that are exercisable within 60 days of March 22, 2000.

- Robert I. Noe. Includes options to purchase 200,000 shares of common
stock that are exercisable within 60 days of March 22, 2000. Mr. Noe's
address is 13155 Noel Road, Suite 800, Dallas, Texas 75240.

- Patrick T. Fitzgerald. Mr. Fitzgerald's address is 13155 Noel Road, Suite
800, Dallas, TX 75240.

- J. Andrew Kerner. Includes options to purchase 166,667 shares of common
stock that are exercisable within 60 days of March 22, 2000. Mr. Kerner's
address is 13155 Noel Road, Suite 800, Dallas, Texas 75240.

- David M. Lloyd. Includes options to purchase 133,333 shares of common
stock that are exercisable within 60 days of March 22, 2000. Mr. Lloyd's
address is 13155 Noel Road, Suite 800, Dallas, Texas 75240.

- Sue A. Hale. Includes options to purchase 48,000 shares of common stock
that are exercisable within 60 days of March 22, 2000.

- Warren D. Jones. Includes 16,000 shares of common stock beneficially
owned by Mr. Jones' spouse, Kathleen Jones, and options to purchase
50,000 shares of common stock that are exercisable within 60 days of
March 22, 2000.

- Jimmy M. Wright. Includes options to purchase 178,000 shares of common
stock that are exercisable within 60 days of March 22, 2000.

Other 5% Stockholders. Information regarding the beneficial owners of 5% or
more of our stock is set forth below.

- Ernst & Young U.S. LLP. The address is 787 Seventh Avenue, New York, New
York, 10019. According to a Schedule 13D filed with the Securities and
Exchange Commission on November 22, 1999, Ernst & Young U.S. LLP on its
behalf and on behalf of Philip A. Laskawy has reported that it has shared
voting power and shared dispositive power over all of the shares.

- i2 Technologies Inc. Includes warrants to purchase 746,268 shares of
common stock. The address is 11701 Luna Road, Dallas, Texas 75234.

- Robert L. Barcum. Includes 16,000 shares of common stock beneficially
owned by Mr. Barcum's spouse, Rhonda Jones, and 70,000 shares of common
stock beneficially owned by the Barcum Family Fund (Donor Advised Fund)
with the Assemblies of God Foundation. His address is 13800 Benson Road,
Edmond, Oklahoma 73013-6417.

DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 50,000,000 shares of common stock,
par value $0.001 per share, and 10,000,000 shares of preferred stock, par value
$0.001 per share. The rights and preferences of the authorized preferred stock
may be designated from time to time by our board of directors. The following
summary is qualified by reference to our certificate of incorporation and our
bylaws, both of which have been filed as exhibits to this registration
statement.

COMMON STOCK

Holders of our common stock are entitled to one vote per share on all
matters to be voted on by the stockholders. Holders of common stock are not
entitled to cumulated voting rights with respect to the election of directors,
and as a result, minority stockholders will not be able to elect directors on
the basis of their votes alone. Subject to limitations under Delaware law and
preferences that may apply to any outstanding shares of preferred stock, holders
of common stock are entitled to receive ratably such

51
<PAGE> 54

dividends or other distribution, if any, as may be declared by our board of
directors out of funds legally available therefore. In the event of our
liquidation, dissolution or winding up, holders of common stock are entitled to
share ratably in all assets remaining after payment of liabilities, subject to
the liquidation preference of any outstanding preferred stock. The common stock
has no preemptive, conversion or other rights to subscribe for additional
securities of viaLink. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are
validly issued, fully paid and nonassessable. The rights, preferences and
privileges of holders of common stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series of preferred
stock that we may designate and issue in the future.

PREFERRED STOCK

Our board of directors has the authority, without further action by the
stockholders, to issue up to 10,000,000 shares of preferred stock in one or more
series, to fix rights, preferences, privileges and restrictions of the
authorized preferred stock and to issue shares of each such series. The issuance
of preferred stock could have the effect of restricting dividends on the common
stock, diluting the voting power of the common stock, impairing the liquidation
rights of the common stock or delaying or preventing a change in control without
further action by the stockholders. At present, we have no plans to issue any
shares of preferred stock.

We have agreed with the securities regulators of certain states that we
will not offer preferred stock to persons considered to be promoters of viaLink
except on the same terms as offered to all other existing stockholders or new
stockholders, or unless the issuance of preferred stock is approved by the
majority of our disinterested, independent directors who have access, at our
expense, to legal counsel.

REGISTRATION RIGHTS

We have granted registration rights to holders of options to purchase
1,440,000 shares of our common stock. We originally issued these options to John
Simonelli and Larry E. Howell on October 15, 1996 in connection with our
acquisition of Vantage Capital Resources, Inc. If we propose to register any of
our securities under the Securities Act (other than by filing a registration
statement on Form S-8 or Form S-4) at any time, the option holders may request
to have the securities they hold included in such registration. Upon such
request, we shall use our best efforts, providing that it is permissible under
the Securities Act to register such securities on such registration statement,
to include the option holders' securities in the proposed registration
statement. However, we may determine for any reason, after consultation with the
option holders who have requested to have their securities included in the
registration statement, not to register or to delay the registration of the
option holders' securities. In August 1999, we registered for resale the
1,440,000 shares of common stock issuable upon the exercise of these options and
we were obligated to keep the registration statement registering these shares
for resale effective until February 2000 or until the shares have been sold
pursuant to such registration statement. As of March 3, 2000, 360,000 of these
options were still outstanding.

In connection with various agreements with Hewlett-Packard and the $6.0
million subordinated secured convertible promissory note we issued to them, we
have granted registration rights to Hewlett-Packard with respect to shares of
our common stock issuable upon conversion of the note and with respect to the
shares of our common stock purchased by them and shares of our common stock
issuable upon exercise of a warrant we issued to them in connection with a
private placement, Hewlett-Packard may request that these securities be
registered in up to four demand registrations, however only one of these demand
registrations may be pursuant to a registration statement on Form S-1, Form SB-2
or other similar forms of registration statements. We have also granted
Hewlett-Packard unlimited piggyback registration rights. Both the demand and
piggyback registration rights contain cut-back provisions under which we may not
have to register the shares requested by Hewlett-Packard if such registration,
in the opinion of the underwriters of such offering, would be imprudent.

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<PAGE> 55

In connection with an agreement with Ernst & Young, we have granted
registration rights to Ernst & Young with respect to 1,000,000 shares of our
common stock we issued to Ernst & Young upon the exercise of a warrant we issued
to them. Ernst & Young may request that these securities be registered in up to
five demand registrations, however only two of these demand registrations may be
pursuant to a registration statement on Form S-1, Form SB-2 or other similar
forms of registration statements. We have also granted Ernst & Young unlimited
piggyback registration rights. Both the demand and piggyback registration rights
contain cut-back provisions under which we may not have to register the shares
requested by Ernst & Young if such registration, in the opinion of the
underwriters of such offering, would be imprudent. In August 1999, we registered
for resale 250,000 shares of common stock we issued to Ernst & Young upon
exercise of the warrant and we are obligated to keep the registration statement
registering these shares for resale effective until the shares have been sold
pursuant to such registration statement.

In connection with various agreements with i2 Technologies and the common
stock and warrants issued thereunder, we have granted registration rights to i2
Technologies with respect to shares of our common stock purchased by them and
shares of our common stock issuable upon the exercise of the warrants we issued
to them. i2 Technologies may request that these securities be registered on a
registration statement on Form S-1, Form SB-2 or other similar forms or
registration statements pursuant to a demand registration right which we have
granted them. We have also granted to i2 Technologies unlimited piggyback
registration rights. We may delay a request to register these securities
pursuant to the demand registration right for a period not to exceed 60 days in
certain limited circumstances which, in the opinion of our board of directors,
would make the registration of the securities at such time unadvisable. The
piggyback registration rights contain cut-back provisions under which we may not
have to register the shares requested by i2 Technologies if such registration,
in the opinion of the underwriters of such offering, would be imprudent.

In connection with an agreement with Millennium Partners, we are required
to register all of the shares of our common stock issued to Millennium Partners
and all of the shares of our common stock issuable upon exercise of a warrant we
issued to Millennium Partners upon the later to occur of 120 days following the
close of the private placement with Millennium Partners or 30 days after this
registration statement becomes effective.

ANTI-TAKEOVER EFFECTS

Our certificate of incorporation, our bylaws and certain provisions of
Delaware law could have the effect of delaying or preventing a third party from
acquiring us, even if the acquisition would benefit our stockholders. These
provisions are intended to enhance the likelihood of continuity and stability in
the composition of our board of directors and in the policies formulated by the
board of directors and to discourage certain types of transactions that may
involve an actual or threatened change of control of viaLink. These provisions
are designed to reduce our vulnerability to an unsolicited proposal for a
takeover that does not contemplate the acquisition of all of our outstanding
shares, or an unsolicited proposal for the restructuring or sale of all or part
of viaLink.

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<PAGE> 56

Delaware anti-takeover statute. We are subject to the provisions of Section
203 of the Delaware General Corporation Law, an anti-takeover law. Subject to
certain exceptions, the statute prohibits a publicly held Delaware corporation
from engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless:

- 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;

- 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 (1) by persons who are
directors and also officers and (2) 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 or exchanged; or

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

For purposes of Section 203, a "business combination" includes a merger,
asset sale or other transaction resulting in a financial benefit to the
interested stockholder, and an "interested stockholder" is a person who,
together with affiliates and associates, owns, or within three years prior to
the date of determination whether the person is an "interested stockholder," did
own, 15% or more of the corporation's voting stock.

In addition, provisions of our certificate of incorporation and bylaws may
also have an anti-takeover effect. These provisions may delay, defer or prevent
a tender offer or takeover attempt of our company that a stockholder might
consider in his or her best interest, including attempts that might result in a
premium over the market price for the shares held by our stockholders. The
following summarizes these provisions.

Classified board of directors. Our certificate of incorporation provides
that our board of directors is to be divided into three classes of directors, as
nearly equal in size as is practicable, serving staggered three-year terms. As a
result, approximately one-third of the board of directors are elected each year.
These provisions, when coupled with the provisions of our certificate of
incorporation and bylaws authorizing our board of directors to fill vacant
directorships or increase the size of our board, may deter a stockholder from
removing incumbent directors and simultaneously gaining control of the board of
directors. Our bylaws also provide that directors may only be removed by the
stockholders for cause by the affirmative vote of the holders of not less than a
majority of the total voting power of all outstanding securities of viaLink then
entitled to vote in the election of directors, voting together as a single
class.

Stockholder action; special meeting of stockholders. Our certificate of
incorporation eliminates the ability of stockholders to act by written consent.
Our bylaws provide that special meetings of our stockholders may be called only
by a majority of our board of directors.

Advance notice requirements for stockholder proposals and director
nominations. Our bylaws provide that stockholders seeking to bring business
before an annual meeting of stockholders, or to nominate candidates for election
as directors at an annual meeting of stockholders, must provide us with timely
written notice of their proposal. To be timely, a stockholder's notice must be
delivered to or mailed and received at our principal executive offices not less
than 120 days before the date we released the notice of annual meeting to
stockholders in connection with the previous year's annual meeting. If, however,
no meeting was held in the prior year or the date of the annual meeting has been
changed by more than 30 days from the date contemplated in the notice of annual
meeting, notice by the stockholder, in order to be timely, must be received a
reasonable time before we release the notice of annual meeting to

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<PAGE> 57

stockholders. Our bylaws also specify certain requirements as to the form and
content of a stockholder's notice. These provisions may preclude stockholders
from bringing matters before an annual meeting of stockholders or from making
nominations for directors at an annual meeting of stockholders.

Authorized but unissued shares. Our authorized but unissued shares of
common stock and preferred stock are available for our board to issue without
stockholder approval. We may use these additional shares for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions and employee benefit plans. The existence of our
authorized but unissued shares of common stock and preferred stock could render
it more difficult or discourage an attempt to obtain control of our company by
means of proxy contest, tender offer, merger or other transaction.

Supermajority vote provisions. Delaware law provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's certificate of incorporation or bylaws, unless
a corporation's certificate of incorporation or bylaws, as the case may be,
requires a greater percentage. Our certificate of incorporation imposes
supermajority vote requirements in connection with the amendment of certain
provisions of our certificate of incorporation, including the provisions
relating to the classified board of directors and action by written consent of
stockholders.

Indemnification. Our bylaws require us to indemnify our directors and
officers to the fullest extent permitted by Delaware law. In addition, our
certificate of incorporation and bylaws limit the personal liability of our
board members for breaches by the directors of their fiduciary duties to the
fullest extent permitted under Delaware law.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar of our common stock is UMB Bank, N.A. and
its address is 928 Grand Boulevard, P.O. Box 410064, Kansas City, Missouri
64141.

NASDAQ SMALLCAP MARKET LISTING

Our common stock is traded on the Nasdaq SmallCap Market under the trading
symbol "IQIQ." We have applied to have our common stock traded on the Nasdaq
National Market under the trading symbol "VLNK."

SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of common stock in the public market
could lower prevailing market prices. As described below, shares of our
common stock currently outstanding will be available for sale immediately after
this offering. Sales of substantial amounts of our common stock in the public
market after the applicable restrictions lapse could harm the prevailing market
price and impair our ability to raise equity capital in the future.

Upon completion of this offering, we will have outstanding an aggregate of
shares of our common stock, based upon the number of shares outstanding as
of March , 2000 and assuming no exercise of outstanding options. Of these
shares, all the shares sold in this offering will be freely tradable without
restriction or further registration under the Securities Act of 1933, as
amended, unless they are purchased by our affiliates, as that term is defined in
Rule 144 under the Securities Act.

The remaining shares of common stock outstanding are deemed
"restricted securities" within the meaning of Rule 144, all of which are
eligible for sale in the public market subject to the resale limitations of Rule
144.

Lock-up Agreements. We anticipate that all of our directors, officers,
employees and significant stockholders will sign lock-up agreements under which
they agree not to transfer or dispose of, directly or indirectly, any shares of
our common stock or any securities convertible into or exercisable or
exchangeable for shares of our common stock for 120 days following the effective
date of the Registration Statement. Transfers or dispositions can be made
sooner: (a) with the prior written consent of Wit
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<PAGE> 58

SoundView, in the case of certain transfers to affiliates who sign identical
lock-up agreements, (b) if the transfer is a bona fide gift to a charitable
foundation or organization and the donee signs an identical lock-up agreement,
(c) if the transfer is from a partnership to a retired partner or the estate of
a retired partner and the retired partner or its estate signs an identical
lock-up agreement or (d) if the transfer is from a corporation to its
stockholders and the stockholders sign identical lock-up agreements.

Rule 144. In general, under Rule 144 as currently in effect, after the
expiration of the lock-up period, a person who has beneficially owned shares of
our common stock for at least one year, including the holding period of certain
prior owners other than affiliates, is entitled to sell within any three-month
period a number of shares that does not exceed the greater of (a) 1% of the
number of shares of our common stock then outstanding, which will equal
shares immediately after the offering, or (b) the average weekly trading volume
of our common stock during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to that sale. Sales under Rule 144 are also
subject to certain manner-of-sale provisions, notice requirements and the
availability of current public information about us.

Rule 144(k). Under Rule 144(k), a person who, at the time of sale is not,
and is not deemed to have been one of our affiliates at any time during the
three months preceding a sale and who has beneficially owned shares for at least
two years, including the holding period of certain prior owners other than
affiliates, is entitled to sell those shares without complying with the manner
of sale, public information, volume limitation or notice provisions of Rule 144.
Therefore, unless otherwise restricted, Rule 144(k) shares may be sold
immediately upon the closing of this offering.

Rule 701. In general, under Rule 701 of the Securities Act as currently in
effect, each of our directors, officers, employees, consultants or advisors who
purchased shares from us before the date of this prospectus in connection with a
compensatory stock plan or other written compensatory agreement is eligible to
resell such shares in reliance on Rule 144, but without compliance with certain
restrictions, including the holding period, contained in Rule 144.

Registration Rights. After this offering, the holders of at least
shares of our common stock will be entitled to certain rights with respect to
the registration of those shares under the Securities Act. See "Description of
Securities-Registration Rights." After such registration, these shares of our
common stock become freely tradable without restriction under the Securities
Act. These sales could cause the market price of our common stock to decline.

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<PAGE> 59

UNDERWRITING

GENERAL

Upon the terms and subject to the conditions set forth in an underwriting
agreement, the underwriters named below, for whom SoundView Technology Group,
Inc., ING Barings LLC, A.G. Edwards & Sons, Inc. and Stephens Inc. are acting as
representative have severally agreed to purchase from us an aggregate of
shares of our common stock. The number of shares of common stock that each
underwriter has agreed to purchase is set forth opposite its name below:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
- ------------ ----------------
<S> <C>
SoundView Technology Group, Inc. ...........................
ING Barings LLC.............................................
A.G. Edwards & Sons, Inc. ..................................
Stephens Inc. ..............................................
------
Total.............................................
======
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase shares of common stock are subject to the approval of
certain legal matters by counsel and to certain other conditions. If any of the
shares of common stock are purchased by the underwriters pursuant to the
underwriting agreement, all such shares of common stock (other than the shares
of common stock covered by the over-allotment option described below) must be so
purchased.

We and the selling stockholders have agreed to indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act, and
to contribute to payments that the underwriters may be required to make in
respect thereof.

The underwriters propose to offer the shares of common stock directly to
the public at the public offering price set forth on the cover page of this
prospectus and to certain dealers (who may include the underwriters) at such
price less a concession not to exceed $ per share. The underwriters may
allow, and dealers may reallow, a concession not to exceed $ per share to
any other underwriter and certain other dealers. The underwriters do not intend
to confirm any shares to any accounts over which they exercise discretionary
control.

The underwriting discount is equal to the public offering price per share
of common stock minus the price per share of common stock paid by the
underwriters. The following table shows the per share and total public offering
price, the underwriting discounts and commissions to be paid by us to the
underwriters in connection with this offering and the proceeds, before expenses,
to us.

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----
<S> <C> <C>
Public offering price...........................
Underwriting discounts and commissions paid by
us............................................
Proceeds, before expenses, to us................
</TABLE>

Other expenses of this offering, including the registration fees, transfer
agent fees and the fees of financial printers, counsel and accountants, payable
by us are expected to be approximately $ .

OVER-ALLOTMENT OPTION

Three selling stockholders have granted to the underwriters an option,
exercisable for 30 days from the date of this prospectus, to purchase up to an
aggregate of additional shares of common stock at the public offering price
less underwriting discounts and commissions. This option may be exercised solely
for the purpose of covering over-allotments, if any, in connection with the
offering of the shares offered hereby. To the extent that the underwriters
exercise such option, each of the underwriters will be

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<PAGE> 60

committed, subject to certain conditions, to purchase a number of additional
shares proportionate to such underwriter's initial commitment as indicated in
the preceding table.

The offering of the shares offered hereby is made for delivery when, as and
if accepted by the underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offering without notice. The underwriters
reserve the right to reject an order for the purchase of shares in whole or in
part.

NO SALES OF COMMON STOCK OR SIMILAR SECURITIES

We have agreed, subject to exceptions involving stock issued to employees
in accordance with our stock incentive plans, not to offer or sell any shares of
common stock or any securities convertible into or exchangeable for common stock
for a period of 120 days after the date of this prospectus without the prior
written consent of Wit SoundView. In addition, during this period, we have also
agreed not to file any registration statement other than on Form S-8 with
respect to the registration of any shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock without the
prior written consent of Wit SoundView.

All of our directors and executive officers and some of our stockholders
that hold shares of our common stock or options to acquire shares of our common
stock have agreed that, for a period of 120 days after the date of this
prospectus, without the prior written consent of Wit SoundView, they will not,
directly or indirectly, offer, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, lend or otherwise dispose of or transfer any
shares of our common stock or any securities convertible into or exercisable or
exchangeable for or repayable with our common stock, whether now owned or later
acquired by the person executing the agreement or with respect to which the
person executing the agreement later acquires the power of disposition, or file
any registration statement under the Securities Act relating to any shares of
our common stock, or enter into any swap or other agreement or any other
agreement that transfers in any manner, all or a portion of the economic
consequences associated with the ownership of the common stock whether any such
swap or transaction is to be settled by delivery of our common stock or other
securities, other than the shares, if any, of common stock offered hereby by the
selling stockholders.

NASDAQ SMALLCAP MARKET LISTING

Our common stock is listed on the Nasdaq SmallCap Market under the symbol
"IQIQ." We have applied to have our common stock listed on the Nasdaq National
Market under the symbol "VLNK."

ELECTRONIC PROSPECTUS

A prospectus in electronic format is being made available on an Internet
Web site maintained by Wit SoundView's affiliate, Wit Capital Corporation. In
addition, other dealers purchasing shares from Wit SoundView in this offering
have agreed to make a prospectus in electronic format available on Web sites
maintained by each of these dealers. Other than the prospectus in electronic
format, the information on Wit Capital Corporation's Web site and any
information contained on any other Web site maintained by Wit Capital
Corporation is not part of the prospectus or the registration statement of which
this prospectus forms a part, has not been approved and/or endorsed by us or any
underwriter in its capacity as underwriter and should not be relied upon by
investors.

PRICE STABILIZATIONS AND SHORT POSITIONS

In connection with this offering, the underwriters and other persons
participating in this offering may engage in transactions that stabilize,
maintain or otherwise affect the price of the common stock. Specifically, the
underwriters may over-allot in connection with this offering, creating a short
position in common stock for their own account. To cover a short position or to
stabilize the price of the common stock, the underwriters may bid for, and
purchase, shares of common stock in the open market. The underwriters may also
impose a penalty bid whereby they may reclaim selling concessions allowed to an
58
<PAGE> 61

underwriter or a dealer for distributing common stock in this offering, if the
underwriters repurchase previously distributed common stock in transactions to
cover their short position, in stabilization transactions or otherwise. Finally,
the underwriters may bid for, and purchase, shares of common stock in market
making transactions. These activities may stabilize or maintain the market price
of the common stock above market levels that may otherwise prevail. The
underwriters are not required to engage in these activities and may stop any of
these activities at any time without notice.

In connection with this offering, certain underwriters and other selling
group members or their affiliates may engage in passive market making
transactions in the common stock on the Nasdaq National Market in accordance
with Rule 103 of Regulation M under the Securities Exchange Act of 1934, as
amended. Rule 103 permits passive market making during the period when
Regulation M would otherwise prohibit market making activity by the participants
in this offering. Passive market making consists of displaying bids on the
Nasdaq National Market limited by the bid prices of independent market makers
and making purchases limited by such prices and effected in response to order
flow. Rule 103 limits the net purchases by a passive market maker on each day to
a specified percentage of the passive market maker's average daily trading
volume in the common stock during a specified period. The passive market maker
must stop its passive market making transactions for the rest of that day when
this limit is reached.

A. G. Edwards & Sons, Inc. acted as our agent in connection with a private
placement completed in March 2000, and thereby received a warrant to purchase
2,672 shares of our common stock at an exercise price of $44.91 per share.

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us
by Brobeck, Phleger & Harrison LLP, Austin, Texas. Certain legal matters in
connection with this offering will be passed upon for the underwriters by
Morgan, Lewis & Bockius LLP, New York, New York.

EXPERTS

The balance sheet as of December 31, 1998 and the statements of operations
and comprehensive income (loss), stockholders' equity and cash flows for each of
the two years in the period ended December 31, 1998 included in this Prospectus
have been so included in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

The financial statements of The viaLink Company as of December 31, 1999 and
for the year then ended have been included herein and in the registration
statement in reliance upon the report of KPMG LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form SB-2, including exhibits and schedules, under the Securities
Act of 1933, with respect to the shares of common stock to be sold in this
offering. This prospectus is a part of the registration statement and does not
contain all the information included in the registration statement and the
exhibits thereto. For further information about us and the shares of our common
stock to be sold in this offering, please refer to this registration statement.
Complete exhibits have been filed with our registration statement on Form SB-2.

You may read and copy any contract, agreement or other document referred to
in this prospectus and any portion of our registration statement or any other
information from our filings at the Securities and Exchange Commission's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing
to the Securities and Exchange Commission. Please call the Securities and
Exchange Commission at 1-800-SEC-0330 for
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<PAGE> 62

further information about the public reference rooms. Our filings with the
Securities and Exchange Commission, including our registration statement, are
also available to you without charge at the Securities and Exchange Commission's
Web site, http://www.sec.gov.

We are subject to the information and reporting requirements of the
Securities Exchange Act of 1934 and file with the Securities and Exchange
Commission and furnish or make available to our stockholders annual reports
containing financial statements audited by our independent auditors, quarterly
reports containing unaudited financial data for the first three quarters of each
fiscal year, proxy statements and other information.

We have recently filed the following documents with the SEC under the
Exchange Act:

- our Annual Report on Form 10-KSB for the year ended December 31, 1999;

- our Current Report on Form 8-K dated March 1, 2000; and

- the description of our common stock contained in our Registration
Statement on Form 8-A/A (File No. 333-05038-D) filed under Section 12(g)
of the Exchange Act.

You may read and copy any reports, statements or other information on file
at the public reference rooms or at the Securities and Exchange Commission's Web
site referred to above. You can also request copies of these documents, for a
copying fee, by writing to the Commission.

Our Web site is www.vialink.com. THE INFORMATION CONTAINED ON OUR WEB SITE
IS NOT INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.

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<PAGE> 63

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
FINANCIAL STATEMENTS OF THE VIALINK COMPANY
Independent Auditors' Reports............................. F-2
The viaLink Company Balance Sheets as of December 31, 1998
and 1999............................................... F-4
The viaLink Company Statements of Operations and
Comprehensive Income (Loss)
for the Years Ended December 31, 1997, 1998 and 1999... F-5
The viaLink Company Statements of Stockholders' Equity for
the Years Ended December 31, 1997, 1998 and 1999....... F-6
The viaLink Company Statements of Cash Flows for the Years
Ended December 31, 1997, 1998 and 1999................. F-7
The viaLink Company Notes to Financial Statements......... F-8
</TABLE>

F-1
<PAGE> 64

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
The viaLink Company:

We have audited the accompanying balance sheet of The viaLink Company as of
December 31, 1999, and the related statements of operations and comprehensive
income (loss), stockholders' equity and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The viaLink Company as of
December 31, 1999, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

KPMG LLP

Dallas, Texas
February 3, 2000, except as
to Note 13, which is as of
March 1, 2000

F-2
<PAGE> 65

INDEPENDENT ACCOUNTANTS' REPORT

To the Board of Directors
The viaLink Company

In our opinion, the accompanying balance sheet and the related statements
of operations and comprehensive income (loss), of stockholders' equity and of
cash flows present fairly, in all material respects, the financial position of
The viaLink Company at December 31, 1998, and the results of its operations and
its cash flows for each of the two years in the period ended December 31, 1998,
in conformity with accounting principles generally accepted in the United
States. 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 of these statements in
accordance with auditing standards generally accepted in the United States,
which 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

Oklahoma City, Oklahoma
February 22, 1999, except as to the
stock splits described in Note 8 and
Note 13 relating to the 1997 and
1998 share and per share data,
which is as of March 14, 2000.

F-3
<PAGE> 66

THE VIALINK COMPANY

BALANCE SHEETS
DECEMBER 31, 1998 AND 1999

ASSETS

<TABLE>
<CAPTION>
1998 1999
---------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 715,446 $ 8,616,305
Short-term investments, held to maturity.................. -- 6,479,443
Accounts receivable -- trade, net of allowance for
doubtful accounts of $7,841 in 1998 and $41,416 in
1999................................................... 158,117 122,796
Other receivables......................................... 585,778 472,599
Prepaid expenses.......................................... 16,716 395,513
Marketable securities, available for sale................. 684,327 --
---------- ------------
Total current assets.............................. 2,160,384 16,086,656
Furniture, equipment and leasehold improvements, net........ 719,910 2,473,281
Software development costs, net............................. 1,340,230 1,523,588
Note receivable, net of deferred gain on sale............... 337,958 --
Deferred service fees....................................... -- 3,046,302
Other assets................................................ 38,564 108,762
---------- ------------
Total assets...................................... $4,597,046 $ 23,238,589
========== ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued liabilities.................. $1,066,273 $ 2,236,521
Current portion of capital lease obligations.............. 44,194 --
---------- ------------
Total current liabilities......................... 1,110,467 2,236,521
Long-term debt.............................................. -- 4,230,720
---------- ------------
Total liabilities................................. 1,110,467 6,467,241
Commitments and Contingencies (Notes 7 and 11)
Stockholders' equity:
Common stock, $.001 par value; 50,000,000 shares
authorized; 2,826,613 and 19,569,644 shares issued and
outstanding at December 31, 1998 and 1999,
respectively........................................... 2,827 19,570
Additional paid-in capital................................ 4,763,569 31,740,964
Unearned stock compensation............................... -- (1,389,079)
Accumulated deficit....................................... (964,144) (13,600,107)
Accumulated other comprehensive loss...................... (315,673) --
---------- ------------
Total stockholders' equity........................ 3,486,579 16,771,348
---------- ------------
Total liabilities and stockholders' equity........ $4,597,046 $ 23,238,589
========== ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE> 67

THE VIALINK COMPANY

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

<TABLE>
<CAPTION>
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
Revenues............................................. $ 9,022,842 $ 8,230,628 $ 615,519
Operating expenses:
Direct cost of sales............................... 2,211,956 1,563,757 --
Customer operations................................ 4,526,968 3,759,626 2,655,113
Development........................................ 1,131,093 1,205,743 2,803,247
Selling and marketing.............................. 708,652 435,978 2,919,857
General and administrative......................... 2,840,978 2,285,955 5,430,466
Depreciation and amortization...................... 502,559 458,259 594,373
----------- ----------- ------------
Total operating expenses................... 11,922,206 9,709,318 14,403,056
----------- ----------- ------------
Loss from operations................................. (2,899,364) (1,478,690) (13,787,537)
Interest expense, net................................ (73,581) (161,355) (3,983,785)
Gain on sale of assets............................... -- 3,339,123 1,262,921
Realized gain on sale of marketable securities....... -- -- 3,872,438
----------- ----------- ------------
Income (loss) before income taxes.................... (2,972,945) 1,699,078 (12,635,963)
Provision (benefit) for income taxes................. (1,112,127) 1,049,440 --
----------- ----------- ------------
Net income (loss).................................... (1,860,818) 649,638 (12,635,963)
Other comprehensive income (loss):
Unrealized income (loss) on marketable securities,
net of tax...................................... -- (315,673) 315,673
----------- ----------- ------------
Comprehensive income (loss).......................... $(1,860,818) $ 333,965 $(12,320,290)
=========== =========== ============
Net income (loss) per common share --
-- Basic........................................... $ (0.17) $ 0.06 $ (0.96)
=========== =========== ============
-- Diluted......................................... $ (0.17) $ 0.05 $ (0.96)
=========== =========== ============
Weighted average common shares outstanding --
-- Basic........................................... 10,909,752 10,964,164 13,114,028
=========== =========== ============
-- Diluted......................................... 10,909,752 12,409,772 13,114,028
=========== =========== ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE> 68

THE VIALINK COMPANY

STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL UNEARNED OTHER ACCUMULATED
-------------------- PAID-IN STOCK COMPREHENSIVE EARNINGS
SHARES AMOUNTS CAPITAL COMPENSATION INCOME (LOSS) (DEFICIT) TOTAL
---------- ------- ----------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996...... 2,726,500 $ 2,727 $ 4,491,226 $ -- $ -- $ 247,036 $ 4,740,989
Exercise of stock options..... 444 -- 279 279
Stock issued under employee
stock purchase plan......... 2,565 3 7,483 7,486
Net loss...................... (1,860,818) (1,860,818)
---------- ------- ----------- ----------- -------- ------------ ------------
Balance, December 31, 1997...... 2,729,509 2,730 4,498,988 -- -- (1,613,782) 2,887,936
Exercise of stock options..... 88,610 89 240,303 240,392
Stock issued under employee
stock purchase plan......... 3,461 3 8,555 8,558
Stock issued under employee
bonus plan.................. 5,033 5 15,723 15,728
Net income.................... 649,638 649,638
Unrealized loss on securities
available for sale.......... (315,673) (315,673)
---------- ------- ----------- ----------- -------- ------------ ------------
Balance, December 31, 1998...... 2,826,613 2,827 4,763,569 -- (315,673) (964,144) 3,486,579
Exercise of stock options..... 575,435 575 1,993,311 1,993,886
Stock issued under employee
stock purchase plan......... 172 -- 1,891 1,891
Proceeds from Hewlett-Packard
note........................ 6,000,000 6,000,000
Issuance of stock options to
employees................... 2,185,736 (2,185,736) --
Issuance of stock purchase
warrants.................... 4,006,468 4,006,468
Amortization of unearned stock
compensation................ 796,657 796,657
Proceeds from exercise of
common stock warrants....... 1,068,042 1,068 5,621,192 5,622,260
Exercise of common stock
warrants, Ernst & Young..... 250,000 250 1,999,750 2,000,000
Issuance of common stock for
services.................... 20,480 21 549,639 549,660
Proceeds from issuance of
common stock to i2
Technologies, Inc. ......... 223,884 224 4,999,776 5,000,000
Registration costs............ (365,763) (365,763)
Two-for-one stock split on
November 29, 1999........... 4,820,196 4,820 (4,820) --
Two-for-one stock split on
March 1, 2000 (note 13)..... 9,784,822 9,785 (9,785) --
Unrealized gain on securities,
net of reclassification
adjustment.................. 315,673 315,673
Net loss...................... (12,635,963) (12,635,963)
---------- ------- ----------- ----------- -------- ------------ ------------
Balance, December 31, 1999...... 19,569,644 $19,570 $31,740,964 $(1,389,079) -- $(13,600,107) $ 16,771,348
========== ======= =========== =========== ======== ============ ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE> 69

THE VIALINK COMPANY

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

<TABLE>
<CAPTION>
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................... $(1,860,818) $ 649,638 $(12,635,963)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization........................... 827,396 925,134 1,015,609
Deferred income tax provision (benefit)................. (1,112,127) 1,049,440 --
Gain on sale of assets.................................. -- (2,998,453) (462,042)
Gain on sale of marketable securities................... -- -- (3,872,438)
Amortization of unearned stock compensation............. -- -- 796,657
Amortization of deferred service fee.................... -- -- 960,166
Loss on disposal of fixed assets........................ -- 12,694 --
Non-cash interest expense on convertible debt........... -- -- 4,230,720
Professional fees paid with common shares............... -- -- 549,660
Increase (decrease) in cash for changes in:
Accounts receivable, net.............................. 672,515 1,054,162 35,321
Other receivables..................................... 269,981 (540,885) 113,179
Prepaid expenses and other assets..................... 127,830 32,407 (448,995)
Accounts payable and accrued liabilities.............. 428,512 (397,899) 1,170,248
Deferred revenue...................................... (96,315) (236,134) --
----------- ----------- ------------
Net cash used in operating activities.............. (743,026) (449,896) (8,547,878)
----------- ----------- ------------
Cash flows from investing activities:
Proceeds from sale of assets, net of costs................ -- 2,607,731 --
Proceeds from sale of marketable securities............... -- -- 4,872,438
Capital expenditures...................................... (332,987) (41,785) (2,345,157)
Collection on note receivable from sale of ijob........... -- -- 800,000
Purchase of short-term investments........................ -- -- (9,099,443)
Proceeds upon maturity of short-term investments.......... -- -- 2,620,000
Capitalized expenditures for software development......... (752,158) (617,180) (607,181)
----------- ----------- ------------
Net cash provided by (used in) investing
activities....................................... (1,085,145) 1,948,766 (3,759,343)
----------- ----------- ------------
Cash flows from financing activities:
Decrease in bank overdraft................................ (261,141) (23,619) --
Proceeds from convertible debt............................ -- -- 6,000,000
Proceeds from long-term debt.............................. 1,270,000 3,522,639 --
Proceeds from stockholder notes........................... 6,455 -- --
Proceeds from exercise of stock option and purchase
plans................................................... 7,765 264,678 1,995,777
Proceeds from exercise of common stock purchase warrants,
net of registration costs............................... -- -- 7,256,497
Proceeds from issuance of common stock to i2
Technologies, Inc. ..................................... -- -- 5,000,000
Payments of capital lease obligations..................... (135,153) (132,422) (44,194)
Payment of stockholder notes.............................. (20,000) (482,830) --
Payments of long-term debt................................ (780,000) (4,012,639) --
----------- ----------- ------------
Net cash provided by (used in) financing
activities....................................... 87,926 (864,193) 20,208,080
----------- ----------- ------------
Net increase (decrease) in cash and cash equivalents........ (1,740,245) 634,677 7,900,859
Cash and cash equivalents, beginning of period.............. 1,821,014 80,769 715,446
----------- ----------- ------------
Cash and cash equivalents, end of period.................... $ 80,769 $ 715,446 $ 8,616,305
=========== =========== ============
Supplemental disclosures of cash flow information:
Cash paid for interest.................................... $ 123,778 $ 220,553 $ --
=========== =========== ============
Cash paid for income taxes, net of refunds................ $ 114,852 $ 26,454 $ --
=========== =========== ============
Supplemental schedule of non-cash investment activities:
Issuance of stock purchase warrants for future services... $ -- $ -- $ 4,006,468
=========== =========== ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-7
<PAGE> 70

THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Description of Business -- The viaLink Company (the "Company")
provides subscription-based, business-to-business electronic commerce solutions
that enable the CPG and grocery industries to more efficiently manage their
highly complex supply chain information. Our services allow manufacturers,
wholesalers, distributors and retailers to communicate, exchange and synchronize
item, pricing and promotion information in a more cost-effective and accessible
way than has been possible using traditional methods.

Our strategy is to continue our investment in marketing and sales
activities, development of our viaLink services and customer support services to
facilitate our plan to penetrate the market and build recurring revenues
generated from subscriptions to our viaLink services. In order to implement this
strategy, we believe that we will need significant additional capital resources
and we are seeking additional financing sources and other potential technology,
strategic and marketing partners. Consequently, we resemble a development stage
company and will face many of the inherent risks and uncertainties that
development stage companies face. There can be no assurance, however, that these
efforts will be successful or that we will be able to obtain additional
financing or agreements with other partners on commercially reasonable terms, if
at all. Our failure to successfully negotiate such arrangements would have a
material adverse effect on our business, financial condition and results of
operations, including our viability as an enterprise. As a result of the high
level of expenditures for investment in technology development, implementation,
customer support services, and selling and marketing expenses, we expect to
incur losses in the foreseeable future periods until such time, if ever, as the
recurring revenues from our viaLink services are sufficient to cover the
expenses.

Our clients and customers range from small, rapidly growing companies to
large corporations in the consumer packaged goods and grocery industries and are
geographically dispersed throughout the United States.

Basis of Presentation -- The financial statements include the accounts of
the Company and, prior to December 31, 1998, its wholly-owned subsidiary, ijob,
Inc., which was formed June 30, 1997. All material intercompany balances and
transactions have been eliminated. On December 31, 1998, ijob, Inc. was sold,
and therefore, is not included in the Company's financial statements subsequent
to that date.

Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires the use of management's
estimates and assumptions in determining the carrying values of certain assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts for certain revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Cash and Cash Equivalents and Short-term Investments -- For purposes of the
statement of cash flows, the Company considers all highly liquid investments
with a maturity of three months or less at the time of purchase to be cash
equivalents. Similar investments with a maturity, at purchase, of more than
three months are classified as short-term investments held to maturity and are
carried at amortized cost.

Marketable Securities -- The Company classifies its investment in
marketable securities as available-for-sale in accordance with SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." The
Company's securities are carried at fair market value, with the unrealized gains
and losses reported as other comprehensive income or loss until realized.

Risks from Concentrations -- Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of
temporary cash investments, notes receivable and accounts receivable. The
Company places its temporary cash investments with high credit quality financial
institutions. Concentrations of credit risk with respect to accounts receivable
are limited due to the large

F-8
<PAGE> 71
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

number of individual accounts and their dispersion across different regions. The
Company does not believe a material risk of loss exists with respect to its
financial position due to concentrations of credit risk.

The Company received, as consideration for the sale of its management
consulting and systems integration assets, 643,770 shares of preferred stock
which were converted into common shares of the NetPlex Group, Inc. Such shares
were classified as available-for-sale marketable securities and were subject to
fluctuations in value due to market conditions until the sale of such securities
in December 1999.

Prior to 1999, the Company's revenues were in part dependent on large
license fees and systems integration contracts from a limited number of
customers. In 1999, three customers individually accounted for 27, 14 and 12
percent of revenues. In 1997, 1998 and 1999, approximately 57, 49 and 70
percent, respectively, of the Company's total revenues were attributable to five
clients. During 1998, the Company sold its wholly owned subsidiary, ijob, Inc.,
and the assets underlying its management consulting and systems integration
services (see Note 2). Historically, over 90% of the Company's revenues were
generated from assets sold pursuant to these sales. As a result of the sales,
the Company resembles a development stage company since its planned principal
operations have not yet generated significant revenues. We will continue to be
dependent upon revenues from a limited number of customers until we achieve
market penetration.

Furniture, equipment and leasehold improvements -- Furniture, equipment and
leasehold improvements are stated at cost. Expenditures for repairs and
maintenance are charged to expense as incurred. Upon disposition, the cost and
related accumulated depreciation are removed from the accounts and the resulting
gain or loss is reflected in operations for the period. The Company depreciates
furniture and equipment using the straight-line method over their estimated
useful lives ranging from 3 to 10 years. Leasehold improvements are amortized
over the lease term using the straight-line method.

Revenue Recognition -- Prior to 1999, the Company's revenues were primarily
realized from providing management consulting services, systems integration
services and reselling hardware and software products. The Company recognized
revenue as the services were provided and products were delivered. Revenues from
fixed-price contracts were recognized using the percentage of completion method.
The Company's revenues in 1999 consist of recurring monthly subscription fees
for customer use of the viaLink services, implementation fees, and recurring
monthly fees for hosting customer websites. Contracts for customer use of the
viaLink services are generally for a one-year period, but are generally
cancelable with 30 days notice. The Company recognizes revenue for the use of
the viaLink services and for hosting customer websites as these services are
provided. Implementation fees for the viaLink services are nonrefundable and are
separately priced from the use of the viaLink services based on time and
materials, and are recognized when each implementation is complete.
Implementation costs consist primarily of labor by technical support personnel
to configure customer data and establish a connection to the viaLink database.
The Company has no obligation to perform any future services and no additional
implementation services are necessary upon renewal of the service by the
customer. Revenues collected in advance are deferred and recognized as earned.

Direct Cost of Sales -- Direct cost of sales represents the cost of
hardware and certain point-of-sale software acquired for resale, including
royalty payments required for sale of the Company's proprietary software
products.

Development -- The Company incurred costs and expenses of approximately
$1.9 million, $1.8 million and $3.4 million for product development in 1997,
1998 and 1999, respectively. The Company capitalizes certain of these costs,
including interest, that are directly related to the development of software to
be sold and software developed for internal use. Capitalization of costs for
internal use software begins after the preliminary project stage and ends when
the software is substantially complete and ready for its intended

F-9
<PAGE> 72
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

use. The Company also capitalizes certain of these costs, including interest,
for software to be sold beginning when technological feasibility has been
established and ending when the product is available for customers. Capitalized
software development costs are amortized using the straight-line method over the
estimated useful life of three to five years and are subject to impairment
evaluation in accordance with the provisions of SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."

Earnings Per Share -- Basic earnings per share is calculated by dividing
net income (loss) by the weighted-average number of common shares outstanding
during the period. Diluted earnings per share is calculated by dividing net
income (loss) by the weighted-average number of common shares and dilutive
potential common shares outstanding during the period. Diluted earnings per
share also includes the impact of convertible debt, if dilutive, using the
if-converted method.

Income Taxes -- The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"). SFAS 109 requires deferred tax liabilities or assets to be
recognized for the anticipated future tax effects of temporary differences that
arise as a result of the differences in the carrying amounts and tax bases of
assets and liabilities, and for loss carryforwards and tax credit carryforwards.
SFAS 109 requires that the Company record a valuation allowance when it is more
likely than not that some portion or all of the deferred tax assets will not be
realized.

Reclassifications -- Certain prior year amounts have been reclassified to
conform to the 1999 financial statement presentation.

2. DIVESTITURES

On December 31, 1998, the Company sold its wholly-owned subsidiary, ijob,
Inc. to DCM Company ("DCM"), a corporation wholly-owned by David C. Mitchell,
the President and a member of the board of directors of ijob at the time of the
sale. DCM purchased all of the outstanding stock of ijob for a collateralized,
ten-year $800,000 promissory note that accrued interest at 8% per annum. The
promissory note was collateralized by substantially all of ijob's fixed assets,
contract rights, accounts receivable and general intangibles. The net gain of
$462,042 on the sale was deferred and netted against the $800,000 promissory
note at December 31, 1998, as DCM was considered to be a highly leveraged
entity. On March 11, 1999, the promissory note and accrued interest were paid in
full. Accordingly, the deferred gain on the sale of $462,042 was recognized in
the 1999 statement of operations.

Effective September 1, 1998, the Company sold the assets related to its
management consulting and systems integration services (including the Company's
proprietary Retail Services Application ("RSA") software) to NetPlex Group, Inc.
("Consulting Assets Sale"). The Company received $3.0 million in cash and
643,770 shares of NetPlex preferred stock, with a market value of approximately
$1.0 million at the date of the sale. The Company used the cash proceeds from
the sale to repay (i) $551,062 of long-term debt, (ii) $565,094 of stockholder
loans including interest and (iii) expenses attributable to the Consulting
Assets Sale. The net gain from the Consulting Assets Sale was $2,998,453. At
December 31, 1998, the market value of the 643,770 shares of NetPlex preferred
stock was $684,327, yielding an unrealized loss of $315,673, which was included
in other comprehensive loss in 1998. In December 1999, the Company sold the
643,770 shares for $4.87 million resulting in a realized gain of $3.87 million
included in the 1999

F-10
<PAGE> 73
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

statement of operations. The following represents condensed unaudited results of
operations related to the management consulting and systems integration
services:

<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED ENDED
DECEMBER 31, AUGUST 31,
1997 1998
------------ ------------
<S> <C> <C>
Revenues.................................................... $7,544,678 $6,831,916
Expenses.................................................... 7,335,395 5,045,104
---------- ----------
Income before income taxes.................................. $ 209,283 $1,786,812
========== ==========
</TABLE>

In conjunction with the Consulting Assets Sale, the Company entered into an
earn-out agreement that provides for quarterly cash payments aggregating up to
$1.5 million based on revenues generated from the assets sold to NetPlex through
March 31, 2000. During 1999, the Company accrued payments in accordance with the
Consulting Assets Sale earn-out agreement in the amount of $801,000,
representing the estimated earn-out through September 30, 1999. NetPlex did not
make the contractually required payments in the time periods specified in the
earn-out agreement. Subsequent to December 31, 1999, however, the Company
received payment for the amounts recognized through September 30, 1999. Due to
this uncertainty, no amounts have been recorded under the earn-out agreement
subsequent to September 30, 1999. The earn-out agreement includes certain
acceleration provisions upon any breach by NetPlex, including increased cash
earn-out payments up to $1.5 million and issuance to the Company of an
additional 643,770 shares of NetPlex common stock. The Company has not
recognized any amounts which may become due under these acceleration provisions
and will recognize income under the earn-out agreement as payments are received.

The Company's balance sheets as of December 31, 1998 and 1999 and the
statement of operations for 1999, do not include the assets and operations of
the consulting and systems integration assets, nor do they include the assets
and operations of ijob, which are included in the comparable period of 1998.
Therefore, the years presented are not comparable.

3. SHORT-TERM INVESTMENTS

At December 31, 1999, all marketable debt securities were classified as
held-to-maturity and carried at amortized cost. Short-term investments consisted
of the following:

<TABLE>
<S> <C>
Certificates of deposit.................................. $ 100,000
Commercial paper......................................... 5,038,141
Bankers acceptances...................................... 744,480
U.S. government securities............................... 596,822
----------
Total short-term investments................... $6,479,443
==========
</TABLE>

At December 31, 1999, the estimated fair value of each investment
approximated its amortized cost, and therefore, there were no significant
unrealized gains or losses.

F-11
<PAGE> 74
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

4. FURNITURE, EQUIPMENT, LEASEHOLD IMPROVEMENTS AND SOFTWARE DEVELOPMENT COSTS

Furniture, equipment and leasehold improvements at December 31, 1998 and
1999 consisted of the following:

<TABLE>
<CAPTION>
1998 1999
----------- -----------
<S> <C> <C>
Furniture and fixtures..................................... $ 286,583 $ 388,918
Computer equipment......................................... 1,432,776 2,734,831
Computer software.......................................... 492,790 1,260,472
Leasehold improvements..................................... 49,669 222,755
----------- -----------
2,261,818 4,606,976
Less: accumulated depreciation and amortization............ (1,541,908) (2,133,695)
----------- -----------
Furniture, equipment and leasehold improvements, net....... $ 719,910 $ 2,473,281
=========== ===========
</TABLE>

Computer equipment in 1998 and 1999 included $321,840 of assets under
capital leases. Furniture and fixtures in 1998 and 1999 included $88,766 of
assets under capital leases. Accumulated depreciation for all assets under
capital leases at December 31, 1998 and 1999 was $262,537 and $344,658,
respectively.

The Company incurred total costs of approximately $1.9 million, $1.8
million and $3.4 million for development of software in 1997, 1998 and 1999,
respectively. We capitalized $752,158, $617,180 and $607,181 of these costs for
development of software in 1997, 1998 and 1999, respectively. Interest
capitalized during 1997, 1998 and 1999 was not material. Amortization of
developed software during 1997, 1998 and 1999 was $324,837, $466,375 and
$423,823, respectively. Accumulated amortization at December 31, 1998 and 1999
was $763,755 and $1,187,578, respectively.

5. LONG-TERM DEBT

On July 19, 1995, the Company entered into a revolving credit agreement
(the "Agreement") with a bank whereby the Company could borrow, under two
separate notes, up to the lesser of $3,000,000 or the borrowing base as defined
in the agreement. Pursuant to the terms of the revolving credit agreement, upon
successful completion of the Company's initial public offering, the working
capital note of $800,000 was paid in full on November 27, 1996, and in October
1997 and December 1997, the terms of the remaining note were renegotiated to a
credit line of $500,000. Interest on the note was prime plus 0.5% at December
31, 1997, which was 9%.

During the first quarter of 1998, the Company completed a new credit
facility with a commercial lender that replaced the revolving credit agreement
with the bank. Under the new credit facility the Company could borrow up to
$1,000,000; however, amounts borrowed were limited to 75% of the Company's
accounts receivable as defined by the new facility. The facility was
collateralized by accounts receivable and all tangible assets of the Company and
was guaranteed by three principal officers of the Company. The interest rate on
the new facility was prime plus 3%. The promissory note under this agreement was
paid in full on October 16, 1998. During the first quarter of 1998, the Company
obtained a credit facility including a large sale financing option with IBM
Credit Corp., whereby the Company could finance directly with IBM Credit Corp.
large sales of hardware or software. As of December 31,1998, there were no
amounts outstanding on this credit facility and in February of 1999, the Company
terminated its arrangement under this credit facility. We no longer have any
available working capital borrowings or credit facility available for
borrowings.

On February 4, 1999, the Company entered into a financing agreement and
note purchase agreement with Hewlett-Packard pursuant to which Hewlett-Packard
purchased a $6.0 million secured subordinated promissory note. This note bears
interest at 11.5% per annum, with interest payments deferrable to

F-12
<PAGE> 75
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

maturity in February 2004. The Company received stockholders' approval at our
1999 annual meeting to exchange the original note for a subordinated secured
convertible promissory note, convertible into common stock at the option of
Hewlett-Packard beginning August 2000 at a conversion price of $1.75 per share.
The Company may demand conversion at maturity. The closing of the purchase of
the note occurred as of February 5, 1999. At December 31, 1999, contractual
interest of $621,945 for 1999 is included in the note payable balance as the
amounts become convertible with the note balance.

The Emerging Issues Task Force ("EITF") Issue 98-5 requires that beneficial
conversion features present in convertible securities should be recognized and
measured by allocating a portion of the proceeds equal to the value of that
feature to additional paid-in capital. The value of the beneficial conversion
feature in the note with Hewlett-Packard was approximately $20.0 million at the
commitment date. However, the value allocated to additional paid-in capital is
limited to the $6.0 million proceeds based on the prescribed accounting.
Accordingly, we have allocated the full amount of proceeds to the beneficial
conversion feature and recorded $6.0 million as additional paid-in capital at
the time of closing. This amount is being accreted by charges to interest
expense and corresponding increases in long-term debt during the period from
issuance of the note to August 2000 when the note becomes convertible. Non-cash
interest charges of $3.6 million were recognized in 1999, and the Company will
recognize approximately $1.0 million in non-cash interest expense, per quarter,
through August 2000.

The financial instruments included in long-term debt at December 31, 1999
are convertible into common shares at $1.75 per share. The estimated market
value of the shares of common stock which would be issued upon conversion of the
outstanding debt and accrued interest using the last reported sales price on
December 31, 1999 of $18.188 per share is approximately $68.8 million.

6. NOTES PAYABLE TO STOCKHOLDERS

In October 1998, the Company repaid all stockholder notes in the principal
amount of $482,830, plus accrued interest of $82,264. Notes payable to
stockholders at December 31, 1997 totaled $482,830 and included interest at
rates ranging from 8.5% to 11.5%.

Interest expense for 1997 and 1998 related to the notes payable to
stockholders was $46,473 and $38,293, respectively.

7. ALLIANCE AGREEMENTS

On May 3, 1999, the Company entered into an agreement with Ernst & Young
LLP, pursuant to which Ernst & Young will provide us with consulting and
integration services and sales and marketing support, to assist in the
development and market penetration of our viaLink services. In connection with
this agreement, we issued Ernst & Young a warrant to purchase up to 1,000,000
shares of our common stock at a price of $2.00 per share contingent upon our
ability to register the common stock underlying the warrant agreement.
Additionally, we have agreed to pay a royalty of 7.0% of our service revenues to
Ernst & Young for a period of two years and, in the event that at least ten
"significant clients" of Ernst & Young become subscribers to our services during
this two year period, we will be obligated to continue this royalty payment in
perpetuity. Ernst & Young will not receive any royalties for services we provide
to clients subject to the reporting requirements of the federal securities laws
for which it serves as the principal independent auditor. As of the date of the
issuance of the warrant, the warrant conversion price was below the fair value
of our stock. The issuance of this warrant has been recorded as an asset and an
increase in additional paid in capital of $1.9 million, representing the fair
value of the warrant issued. The fair value of the warrant at the measurement
date was determined using a Black-Scholes option pricing model with the
following assumptions: interest rate (zero-coupon U.S. government issued with a
remaining life equal to the expected term of the warrant) of 6.0%; a dividend
yield of 0%; volatility factor of the expected market price of the Company's
common stock of 100.4%; and weighted-average expected life of
F-13
<PAGE> 76
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

the warrant of 1.5 years. The asset will be amortized over the service period
and will result in non-cash charges to our statement of operations. On August 9,
1999, Ernst & Young exercised warrants to purchase 250,000 shares of common
stock resulting in gross proceeds received by us of $500,000. On November 10,
1999, Ernst & Young exercised warrants to purchase the remaining 750,000 shares
of common stock resulting in gross proceeds received by us of $1.5 million.
During 1999, royalties under this agreement totaled $19,700, and are included in
selling and marketing expense.

On October 12, 1999, The Company entered into a strategic relationship with
i2 Technologies, Inc. ("i2"), the primary focus of which is to integrate the
products and services of our two companies and to extend the solutions across
multiple industries. i2 will use our syncLink services to provide product, price
and promotion information to facilitate business processes between trading
partners using an Internet-accessible shared database. Our two companies will
also develop joint sales and marketing programs, and develop enhancements to the
viaLink services. Additionally, i2 invested $5.0 million in the Company in
exchange for 895,536 shares of viaLink common stock and a warrant to purchase up
to an additional 746,268 shares of common stock at $6.70 per share, representing
a twenty percent (20%) premium over the market price of the stock at the time of
the agreement. The initial term of the agreement will expire on December 31,
2003 and will automatically renew on a year-to-year basis thereafter unless
terminated by either party. The issuance of this warrant has been recorded as an
asset and an increase in additional paid-in capital for the fair value of the
warrant issued to i2 and will result in non-cash charges to our statement of
operations during the term of the agreement. The fair value of the warrant at
the measurement date was determined using a Black-Scholes option pricing model
with the following assumptions: interest rate (zero-coupon U.S. government
issued with a remaining life equal to the expected term of the warrant) of
5.91%; a dividend yield of 0%; volatility factor of the expected market price of
the Company's common stock of 101.6%; and weighted-average expected life of the
warrant of 2.0 years. Additionally we have agreed to pay i2 a royalty of five
percent (5%) of the syncLink and Chain Pricing subscription revenues during the
term of the agreement. We will also pay a royalty, in addition to the five
percent, based upon subscription revenues received from new customers with whom
i2 had "significant involvement" in the sales process. i2 has agreed to pay us a
royalty based upon revenues i2 receives from providing syncLink and Chain
Pricing services outside of the consumer packaged goods industry. During 1999,
royalties under this agreement totaled $21,800, and are included in selling and
marketing expense.

8. COMMON STOCK

On November 29, 1999, the Company's board of directors approved a
two-for-one stock split in the form of a dividend. The par value remained $0.001
per share. The stock split was effective December 21, 1999 and is reflected in
the per share data in the accompanying financial statements and notes to the
financial statements.

F-14
<PAGE> 77
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

A reconciliation of the numerator and the denominator used in the
calculation of earnings (loss) per share is as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
Basic:
Net income (loss).......................... $(1,860,818) $ 649,638 $(12,635,963)
Weighted average common shares
outstanding............................. 10,909,752 10,964,164 13,114,028
----------- ----------- ------------
Earnings (loss) per share............... $ (0.17) $ 0.06 $ (0.96)
=========== =========== ============
Diluted:
Net income (loss).......................... $(1,860,818) $ 649,638 $(12,635,963)
Weighted average common shares
outstanding............................. 10,909,752 10,964,164 13,114,028
Add: Net effect of dilutive potential
shares.................................. -- 1,445,608 --
----------- ----------- ------------
10,909,752 12,409,772 13,114,028
Earnings (loss) per share............... $ (0.17) $ 0.05 $ (0.96)
=========== =========== ============
</TABLE>

For the year ended December 31, 1999, options to purchase 10,439,692 shares
at a weighted average exercise price of $4.35 and warrants to purchase 47,000
and 746,268 shares of common stock at $1.50 and $6.70, respectively, and
3,688,000 shares of common stock to be issued upon the conversion of the note
issued to Hewlett-Packard, were outstanding, but were not included in the
computation of diluted earnings per share because the effect of these
outstanding options, warrants and stock issuable upon conversion of debt would
be antidilutive.

During 1998, options to purchase 1,440,000 and 120,000 shares of common
stock at $1.25 and $2.25 per share, respectively, and warrants to purchase
3,680,000 and 720,000 shares of common stock at $1.25 and $1.50, respectively,
were outstanding, but were not included in the computation of diluted EPS
because the exercise price of the options and warrants was greater than the
average market price of the common shares.

During 1997, options to purchase 2,332,312 shares at a weighted average
exercise price of $1.05 and warrants to purchase 3,680,000 and 720,000 shares of
common stock at $1.25 and $1.50, respectively, were outstanding, but were not
included in the computation of diluted EPS because the exercise price of the
options and warrants was greater than the average market price of the common
shares.

On June 29, 1999, the Securities and Exchange Commission declared effective
a post-effective amendment to our registration statement on Form SB-2 thereby
permitting holders of viaLink's 3,680,000 redeemable common stock purchase
warrants to voluntarily exercise the warrants, subject to specific state
approvals. Each warrant allowed the holder to purchase one share of viaLink
common stock at a price of $1.25 per share, on or before November 20, 1999. On
October 4, 1999, we issued a Notice of Redemption to holders of our redeemable
common stock purchase warrants and as of December 31, 1999, all 3,680,000
redeemable stock purchase warrants had been exercised. Warrant exercises
resulted in gross proceeds of $4.6 million to the Company during 1999.

9. STOCK OPTION AND STOCK PURCHASE PLANS

Stock Purchase Plan -- The Company established The viaLink Company Employee
Stock Purchase Plan on April 1, 1997. At the Company's 1999 annual meeting our
stockholders approved the adoption of the 1999 Employee Stock Purchase Plan
which replaced the predecessor Employee Stock Purchase Plan as of July 1, 1999.
The 1999 Stock Purchase Plan provides eligible employees of viaLink with the
opportunity to acquire a proprietary interest in viaLink through participation
in a payroll deduction based

F-15
<PAGE> 78
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

employee stock purchase plan designed to operate in compliance with Section 423
of the Internal Revenue Code. The price will be 85 percent of the per share fair
market value on either the granting date or the exercise date, whichever market
value is lower. The number of shares of common stock authorized and reserved for
issuance under the Plan is 800,000 shares. For the years ended December 31,
1997, 1998 and 1999, 10,260, 13,844 and 12,244 shares, respectively, of common
stock have been purchased under the stock purchase plan.

Stock Option and Grant Plans -- The Company adopted The viaLink Company
1995 Stock Option Plan in March 1995 and amended the 1995 Plan on April 30, 1996
and September 1, 1998. The 1995 Plan was replaced by The viaLink Company 1999
Stock Option/Stock Issuance Plan in May 1999. While the Company may no longer
grant options pursuant to the 1995 Plan, options granted under the 1995 Plan
remain outstanding. The 1995 Plan provided for the issuance of incentive stock
options and non-incentive stock options to attract, retain and motivate
management, directors, professional employees, professional non-employee service
providers and other individuals who have benefited or could benefit the Company.

The viaLink Company 1998 Non-Qualified Stock Option Plan was adopted on
February 9, 1998, and amended effective September 1, 1998. The Non-Qualified
Plan was replaced by the 1999 Stock Option/ Stock Issuance Plan in May 1999.
Although the Company may no longer grant options pursuant to the Non-Qualified
Plan, options granted under the Non-Qualified Plan remain outstanding.

On February 10, 1998, the board of directors of the Company adopted the
1998 Stock Grant Plan (the "Stock Grant Plan" or "Plan") to attract, retain and
motivate consultants, independent contractors and key employees of the Company
and its subsidiaries by way of granting shares of stock in the Company. The
sale, transfer or other disposal of shares of common stock received pursuant to
the Stock Grant Plan is restricted for a period of one year. During 1998, 20,132
shares of common stock were issued pursuant to the Plan at an average price of
$0.78. No shares were granted under this plan in 1999. We may no longer grant
shares pursuant to the Stock Grant Plan.

At the Company's 1999 annual meeting, the Company's stockholders approved
the adoption of The viaLink Company 1999 Stock Option/Stock Issuance Plan to
attract and retain the services of individuals essential to the Company's
long-term growth and financial success. The Company's officers and other key
employees, non-employee board members and consultants and other advisors are
eligible to receive option grants under the 1999 Plan.

The Company has reserved 15,000,000 shares of our common stock for issuance
over the ten year term of the 1999 Plan, including shares initially reserved
under the predecessor plans. This share reserve will automatically be increased
on the first trading day of each calendar year, beginning with the 2000 calendar
year, by an amount equal to 1% of the shares of common stock outstanding on the
last trading day of the immediately preceding calendar year, but in no event
will such annual increase exceed 200,000 shares. Options may be granted under
the 1999 Plan at an exercise price per share not less than the fair market value
per share of common stock on the option grant date.

The Company applies APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations in accounting for its employee stock
options. APB No. 25 requires compensation expense be recorded for any excess of
the market value of the underlying stock over the option price on the
measurement date. During May 1999, the Company granted options for 2,540,000 and
360,000 shares at exercise prices per share of $3.61 and $3.13, respectively,
compared to the market price of $4.25 on the date of grant. The excess of the
market value over the exercise price is being amortized over the vesting period.
Stock compensation expense of $718,000 is included in the 1999 statement of
operations for these grants representing the portion of the service period in
1999. The exercise price equaled the market price at the date of grant for all
other option grants during 1997, 1998 and 1999 and no compensation expense has
been recognized for all other grants in 1997, 1998 and 1999.

F-16
<PAGE> 79
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Pro forma information regarding net income and earnings per share is
required by FAS No. 123 and has been determined as if the Company had accounted
for its stock options under the fair value method defined by SFAS No. 123. The
fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for fiscal year 1997, 1998 and 1999, respectively: interest rates
(zero-coupon U.S. government issued with a remaining life equal to the expected
term of the options) of 6.47%, 4.52% and 5.56%; dividend yields of 0.0%;
volatility factors of expected market price of the Company's common stock of 65%
for 1997 and 1998 and 101% for 1999; and weighted-average expected life of the
options of 5.9, 6.7 and 2.5 years.

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its stock options.

The Company's historical and pro forma information is as follows for the
years ended December 31:

<TABLE>
<CAPTION>
1997 1998 1999
----------- --------- ------------
<S> <C> <C> <C>
Net income (loss), as reported................ $(1,860,818) $ 649,638 $(12,635,963)
Pro forma-diluted............................. $(2,530,746) $(176,182) $(16,563,728)
Earnings (loss) per share-diluted, as
reported.................................... $ (0.17) $ 0.05 $ (0.96)
Pro forma-diluted............................. $ (0.23) $ (0.01) $ (1.26)
</TABLE>

A summary of the Company's stock option activity and related information
follows for the years ended December 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>
WEIGHTED
NUMBER OF AVERAGE
SHARES EXERCISE PRICE
---------- --------------
<S> <C> <C>
Outstanding at December 31, 1996............................ 1,739,352 $1.08
Granted................................................... 670,000 0.94
Exercised................................................. (1,776) 0.16
Canceled.................................................. (76,744) 0.83
----------
Outstanding at December 31, 1997............................ 2,330,832 1.05
Granted................................................... 4,838,972 0.80
Exercised................................................. (354,440) 0.68
Canceled.................................................. (177,812) 0.86
----------
Outstanding at December 31, 1998............................ 6,637,552 0.89
Granted................................................... 6,120,000 6.88
Exercised................................................. (1,956,440) 0.92
Canceled.................................................. (361,420) 2.21
----------
Outstanding at December 31, 1999............................ 10,439,692 $4.35
==========
</TABLE>

F-17
<PAGE> 80
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes information about stock options outstanding
at December 31, 1999:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------- ----------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE EXERCISABLE AVERAGE
RANGE OF OUTSTANDING EXERCISE REMAINING AT EXERCISE
EXERCISE PRICE AT 12/31/99 PRICE LIFE 12/31/99 PRICE
- -------------- ----------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
$0.15.......................... 4,836 $ 0.15 5.2 years 4,836 $0.15
$0.45.......................... 7,324 $ 0.45 6.2 years 7,324 $0.45
$0.75 to $0.83................. 3,876,620 $ 0.76 8.6 years 1,157,816 $0.76
$0.97.......................... 120,800 $ 0.97 5.9 years 115,600 $0.97
$1.25.......................... 360,000 $ 1.25 1.9 years 360,000 $1.25
$1.75.......................... 32,112 $ 1.75 9.0 years 32,112 $1.75
$2.25.......................... 60,000 $ 2.25 9.0 years 20,000 $2.25
$3.13.......................... 360,000 $ 3.13 9.4 years -- --
$3.60 to $3.82................. 3,316,000 $ 3.63 9.5 years -- --
$4.82.......................... 48,000 $ 4.82 9.4 years -- --
$6.00.......................... 650,000 $ 6.00 9.8 years -- --
$15.22......................... 1,604,000 $15.22 10.0 years -- --
---------- ---------
10,439,692 1,697,688 $0.91
========== ========= =====
</TABLE>

10. INCOME TAXES

The components of the provision (benefit) for income taxes for the years
ended December 31, 1997, 1998 and 1999 are as follows:

<TABLE>
<CAPTION>
1997 1998 1999
----------- ---------- --------
<S> <C> <C> <C>
Current.......................................... $ -- $ -- $ --
Deferred......................................... (1,112,127) 1,049,440 --
----------- ---------- --------
Provision (benefit) for income taxes............. $(1,112,127) $1,049,440 $ --
=========== ========== ========
</TABLE>

The differences in federal income taxes at the statutory rate and the
provision for income taxes for the years ended December 31, 1997, 1998, and 1999
are as follows:

<TABLE>
<CAPTION>
1997 1998 1999
----------- ---------- -----------
<S> <C> <C> <C>
Income tax expense (benefit) at federal
statutory
rate......................................... $(1,010,801) $ 577,687 $(4,296,227)
State income taxes............................. (118,918) 67,963 (505,439)
Reduction of valuation allowance credited to
additional paid-in capital................... -- -- 3,802,458
Benefit of net operating loss carryforwards not
recognized................................... -- 401,302 1,012,326
Other.......................................... 17,592 2,488 (13,118)
----------- ---------- -----------
Provision (benefit) for income taxes........... $(1,112,127) $1,049,440 $ --
=========== ========== ===========
</TABLE>

F-18
<PAGE> 81
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Deferred tax assets (liabilities) are comprised of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1998 1999
--------- -----------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts........................... $ 2,980 $ 15,738
Compensated absences...................................... 17,583 31,277
Tax credit carryforwards.................................. 24,985 26,990
Unrealized loss on marketable securities.................. 119,956 --
Net operating loss carryforwards.......................... 781,387 6,878,587
--------- -----------
946,891 6,952,592
Deferred tax liabilities:
Deferred service fees..................................... -- (1,157,595)
Discount on long-term debt................................ -- (908,666)
Software development costs................................ (508,763) (578,963)
Depreciation and amortization............................. (36,826) (159,815)
--------- -----------
Net deferred tax asset, before valuation allowance.......... 401,302 4,147,553
Valuation allowance......................................... (401,302) (4,147,553)
--------- -----------
Net deferred tax asset...................................... $ -- $ --
========= ===========
</TABLE>

The discount recognized in 1999 for the value of the beneficial conversion
feature in the note payable to Hewlett-Packard, and the assets recognized in
1999 for the value of the warrants issued to Ernst & Young LLP and i2
Technologies, Inc. were not recognized for income tax purposes. Accordingly, the
Company established deferred tax liabilities totaling approximately $3.8 million
for these temporary differences by reducing the amount recorded as additional
paid in capital for the value of the beneficial conversion feature and the
warrants. These deferred tax liabilities have been used to support the
recoverability of an equivalent amount of deferred tax assets, thereby reducing
the amount of valuation allowance. The benefit of this reduction in the
valuation allowances has been recognized as additional paid-in capital.

The Company's tax deduction for stock-based compensation in 1999 exceeds
the cumulative expense for those options and warrants recognized for financial
reporting purposes by approximately $7.2 million. This excess deduction is a
component of the net operating loss carryforwards for which a deferred tax asset
and corresponding valuation allowance of approximately $2.7 million have been
recognized at December 31, 1999. When the net operating loss carryforwards are
utilized for financial reporting purposes, this portion of the benefit will be
credited directly to additional paid in capital.

At December 31, 1999, the Company had net operating loss ("NOL")
carryforwards for federal and state purposes of approximately $18,100,000 and
$18,500,000, respectively, and other carryforwards of approximately $71,000. The
Federal and State NOL carryforwards begin to expire in 2011.

SFAS 109 requires that the Company record a valuation allowance when it is
more likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization of the deferred tax asset depends on
the Company's ability to generate sufficient taxable income in the future. The
Company has recognized a full valuation allowance for the amount of net deferred
tax asset at December 31, 1998 and 1999 since the Company resembles a
development stage company and has no history of profitability without the
consulting assets that were sold in 1998.

F-19
<PAGE> 82
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The ability of the Company to utilize the NOL carryforward to reduce future
taxable income taxes may be limited upon occurrence of certain capital stock
transactions during any three-year period resulting in an aggregate ownership
change of more than 50%.

11. COMMITMENTS AND CONTINGENCIES

The Company leases its office and storage space under operating leases. The
terms range from month-to-month up to ten years and include options to renew.
The Company also leases office equipment under various noncancelable lease
agreements. Total rental expense in 1997, 1998 and 1999 for all leases was
$455,369, $410,669 and $460,279, respectively.

Future minimum lease payments under noncancelable leases at December 31,
1999 follows:

<TABLE>
<CAPTION>
OPERATING
LEASES
----------
<S> <C>
2000..................................................... $ 958,000
2001..................................................... 781,000
2002..................................................... 371,000
2003..................................................... 353,000
2004..................................................... 348,000
Thereafter............................................... 345,000
----------
Future minimum lease payments............................ $3,156,000
==========
</TABLE>

Future minimum lease payments have not been reduced by future minimum
sub-lease rentals of approximately $1.2 million under operating leases, with
terms through 2005.

In December 1997, the Company entered into an agreement with Investor
Awareness to provide investor relations services. Subject to certain criteria in
the agreement, Investor Awareness would be granted an option to purchase 40,000
shares of the Company's common stock at $1.5625 per share. The Company believes
the criteria were not met and that Investor Awareness did not earn the option to
purchase the 40,000 shares. Investor Awareness has filed a lawsuit alleging the
Company failed to issue the option under the terms of the agreement. Although
the outcome of any legal proceeding cannot be predicted with certainty, the
Company believes the ultimate outcome of this proceeding will not have a
material adverse effect on the Company's financial position but could be
material to the results of operations in any one accounting period.

12. RETIREMENT PLAN

The Company has a profit sharing plan (the "Plan") for certain eligible
employees who have attained the age of 18 and completed one year of service.
Under the Plan, employer contributions are made at management's discretion.
Participants may contribute up to 6% of earnings as eligible contributions and
up to 15% of earnings in total for any Plan year. The Company's discretionary
matching percentage is up to 100% of each participant's total eligible
contributions for a year. The Company made no contributions in 1997, 1998, or
1999.

13. SUBSEQUENT EVENT -- STOCK SPLIT

On March 1, 2000, the Company's board of directors approved a two-for-one
split of the common stock. Par value of the common stock will remain $.001 per
share. The stock split will be effective March 28, 2000.

F-20
<PAGE> 83
THE VIALINK COMPANY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The effect of the stock split has been recognized retroactively in the
stockholders' equity accounts in the balance sheet as of December 31, 1999, and
in all share and per share data in the accompanying financial statements, notes
to financial statements and supplemental financial data. Stockholders' equity
accounts have been restated to reflect the reclassification of an amount equal
to the par value of the increase in issued shares from additional paid-in
capital to the common stock account.

F-21
<PAGE> 84

[VIALINK LOGO]
<PAGE> 85

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law (the "DGCL") provides,
in effect, that any person made a party to any action by reason of the fact that
he is or was our director, officer, employee or agent may, and in certain cases,
must, be indemnified by us against, in the case of a non-derivative action,
judgments, fines, amounts paid in settlement and reasonable expenses (including
attorneys' fees) incurred by him as a result of such action, and in the case of
a derivative action, against expenses (including attorneys' fees), if in either
type of action he acted in good faith and in a manner he reasonably believed to
be in or not opposed to our best interests. This indemnification does not apply,
in a derivative action, to matters as to which it is adjudged that the director,
officer, employee or agent is liable to us, unless upon court order it is
determined that, despite such adjudication of liability, but in view of all the
circumstances of the case, he is fairly and reasonably entitled to indemnity for
expenses, and, in a non-derivative action, to any criminal proceeding in which
such person had reasonable cause to believe his conduct was unlawful.

Article VII of our Certificate of Incorporation provides that no director
shall be liable to us or our stockholders for monetary damages for breach of
fiduciary duty as a director to the fullest extent permitted by the DGCL.

Reference is made to Section 7 of the underwriting agreement to be filed as
Exhibit 1.1 hereto, pursuant to which the underwriters have agreed to indemnify
our officers and directors against certain liabilities under the Securities Act
of 1933.

We have entered into Indemnification Agreements with each of our directors,
a form of which is filed as Exhibit 10.10 to this Registration Statement.
Pursuant to our agreements, we will be obligated, to the extent permitted by
applicable law, to indemnify our directors against all expenses, judgments,
fines and penalties incurred in connection with the defense or settlement of any
actions brought against them by reason of the fact that they were our directors
or assumed certain responsibilities at our direction. We also have purchased
directors and officers liability insurance in order to limit our exposure to
liability for indemnification of directors and officers.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than the
underwriting discount, payable by Registrant in connection with the sale of
common stock being registered hereby. All amounts are estimates except the SEC
registration fee and the NASD filing fee.

<TABLE>
<S> <C>
SEC registration fee........................................ $31,680
NASD fee.................................................... 12,500
Nasdaq National Market listing fee.......................... *
Printing and engraving expenses............................. *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Blue sky fees and expenses.................................. *
Transfer agent fees......................................... *
Miscellaneous............................................... *
-------
Total............................................. $ *
=======
</TABLE>

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

* To be filed by amendment

II-1
<PAGE> 86

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

Since February 1999, we have issued unregistered securities to a limited
number of entities as described below. These issuances were deemed exempt from
registration under the Securities Act in reliance on Section 4(2).

In February 1999, we issued a $6.0 million secured convertible promissory
note to Hewlett-Packard. Beginning in August 2000, this note becomes convertible
into shares of our common stock at a price of $1.75 per share.

In May 1999, we issued a warrant to Ernst & Young to purchase up to
1,000,000 shares of our common stock at an exercise price of $2.00 per share. In
August 1999, Ernst & Young exercised warrants to purchase 250,000 shares of
common stock, and in November 1999, Ernst and Young exercised warrants to
purchase the remaining 750,000 shares of our common stock.

In October 1999, we issued 895,536 shares of common stock and warrants to
purchase 746,268 shares of common stock at an exercise price of $6.70 per share
to i2 Technologies for $5.0 million.

In May 2000, we issued 66,801 shares of common stock and warrants to
purchase 10,021 shares of common stock at an exercise price of $41.92 per share
to Hewlett-Packard for $2.0 million.

In May 2000, we issued 66,801 shares of common stock and warrants to
purchase 10,021 shares of common stock at an exercise price of $41.92 per share
to i2 Technologies for $2.0 million.

In May 2000, we issued 66,801 shares of common stock and warrants to
purchase 10,021 shares of common stock at an exercise price of $41.92 per share
to Millennium Partners for $2.0 million.

ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

II-2
<PAGE> 87

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
4.6(7) Registration Rights Agreement dated May 3, 1999 by and
between Registrant and Ernst & Young LLP
4.7(8) Securities Purchase Agreement dated October 12, 1999, by and
between the Registrant and i2 Technologies, Inc.
4.8(8) Common Stock Purchase Warrant dated October 12, 1999, issued
by the Registrant to i2 Technologies, Inc.
4.9(8) Registration Rights Agreement dated October 12, 1999, by and
between the Registrant and i2 Technologies, Inc.
5.1* Opinion of Brobeck, Phleger & Harrison LLP, counsel to the
Registrant, regarding the legality of the securities covered
by this registration statement
10.1(5) Note Purchase Agreement dated as of February 4, 1999 by and
between the Registrant and Hewlett-Packard Company
10.2** Lease dated October 3, 1994 by and between the Registrant
and Oklahoma Christian Investment Corporation
10.3(3) Form of Subordinated Secured Convertible Promissory Note
dated as of February 4, 1999 issued by the Registrant in
favor of Hewlett-Packard Company
10.4(5) Security Agreement dated as of February 4, 1999 by and
between the Registrant and Hewlett-Packard Company
10.5** Exchange Agreement dated October 14, 1996 by and among the
Registrant, Robert L. Barcum, Robert N. Baker, Russell L.
Reinhardt, David B. North, John Simonelli, and Larry E.
Howell
10.6(2) Earn-out Agreement dated September 30, 1998 by and between
the Registrant and The NetPlex Group, Inc.
10.7(9) Administrative Services Agreement dated August 31, 1998 by
and between the Registrant and The NetPlex Group, Inc.
10.8(9) Sublease dated September 1, 1998 by and between Applied
Intelligence Group, Inc. and The NetPlex Group, Inc.
10.9(9) Software Remarketing and Reselling Agreement effective as of
September 1, 1998 by and between the Registrant and The
NetPlex Group, Inc.
10.10(3) Form of Indemnification Agreement dated February 9, 1998 by
and between the Registrant and the Registrant's executive
officers
10.11(3) Employment Agreement dated October 1, 1998 by and between
the Registrant and Lewis B. Kilbourne
10.12(3) Employment Agreement dated October 1, 1998 by and between
the Registrant and Robert N. Baker
10.13(10) The viaLink Company (f/k/a Applied Intelligence Group, Inc.)
1995 Stock Option Plan, as amended and restated effective
September 1, 1998
10.14(11) The viaLink Company (f/k/a Applied Intelligence Group, Inc.)
1998 Non-Qualified Stock Option Plan
10.15(12) The viaLink Company (f/k/a Applied Intelligence Group, Inc.)
1998 Stock Grant Plan
10.16(13) The viaLink Company (f/k/a Applied Intelligence Group, Inc.)
1997 Employee Stock Purchase Plan
10.17(4) The viaLink Company 1999 Stock Option/Stock Issuance Plan
10.18** 1999 Stock Option/Stock Issuance Plan Form of Stock Option
Agreement
</TABLE>

II-3
<PAGE> 88

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.19** 1999 Stock Option/Stock Issuance Plan Form of Stock Issuance
Agreement
10.20** 1999 Stock Option/Stock Issuance Plan Form of Automatic
Stock Option Agreement
10.21(4) The viaLink Company 1999 Employee Stock Purchase Plan
10.22(7) Amended and Restated Alliance Agreement dated as of May 3,
1999 by and between the Registrant and Ernst & Young LLP
10.23(7) Master Services Agreement dated May 3, 1999 by and between
the Registrant and Ernst & Young LLP
10.24(8) Alliance and Marketing Agreement dated October 12, 1999, by
and between the Registrant and i2 Technologies, Inc.
10.25(8) Software License dated October 12, 1999, by and between the
Registrant and i2 Technologies, Inc.
10.26(14) Office Building Sublease effective as of December 16, 1999,
between Kerr-McGee Corporation and the Registrant
10.27(14) Employment Agreement made as of April 1, 1999, by and
between the Registrant and J. Andrew Kerner
10.28(14) Employment Agreement made as of April 9, 1999, by and
between the Registrant and David M. Lloyd
10.29(14) Employment Agreement made as of April 8, 1999, by and
between the Registrant and Robert I. Noe
10.30(14) Employment Agreement effective January 4, 2000 by and
between the Registrant and Patrick Fitzgerald.
10.31(14) Form of Addendum to Employment Agreement between the
Registrant and J. Andrew Kerner
10.32(14) Form of Addendum to Employment Agreement between the
Registrant and David M. Lloyd
10.33(14) Form of Addendum to Employment Agreement between the
Registrant and Robert I. Noe
21.1(3) Subsidiaries of Registrant
23.1 Consent of KPMG LLP
23.2 Consent of PricewaterhouseCoopers LLP
23.3* Consent of Brobeck, Phleger & Harrison LLP (included in its
opinion filed as Exhibit 5.1)
</TABLE>

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

* To be filed by amendment.

** Incorporated herein by reference to the Registrant's Registration Statement
on Form SB-2 (Reg. No. 333-5038-D), as amended.

(1) Incorporated herein by reference to the Registrant's Annual Report on Form
10-KSB for the year ending December 31, 1997.

(2) Incorporated herein by reference to the Registrant's Definitive Information
Statement on Schedule 14-C filed October 15, 1998.

(3) Incorporated herein by reference to the Registrant's Definitive Proxy
Statement on Schedule 14A (File No. 000-21729) filed April 19, 1999.

(4) Incorporated herein by reference to the Registrant's Registration Statement
on Form 8-A/A (File No. 333-05038-D) filed under Section 12(g) of the
Exchange Act.

(5) Incorporated herein by reference to the Registrant's Current Report on Form
8-K dated February 4, 1999.

II-4
<PAGE> 89

(6) Incorporated herein by reference to the Registrant's Annual Report on Form
10-KSB for the year ending December 31, 1998.

(7) Incorporated herein by reference to the Registrant's Current Report on Form
8-K dated May 3, 1999.

(8) Incorporated herein by reference to the Registrant's Current Report on Form
8-K dated October 12, 1999.

(9) Incorporated herein by reference to the Registrant's Current Report on Form
8-K dated October 27, 1998.

(10) Incorporated herein by reference to the Registrant's Registration Statement
on Form S-8, as amended (Reg. No. 333-69203).

(11) Incorporated herein by reference to the Registrant's Registration Statement
on Form S-8, as amended (Reg. No. 333-69319).

(12) Incorporated herein by reference to the Registrant's Registration Statement
on Form S-8, as amended (Reg. No. 333-47547).

(13) Incorporated herein by reference to the Registrant's Registration Statement
on Form S-8, as amended (Reg. No. 333-30073).

(14) Incorporated herein by reference to the Registrant's Annual Report on Form
10-KSB for the year ending December 31, 1999.

ITEM 28. UNDERTAKINGS

The Registrant hereby undertakes:

(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the Registration Statement; and

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.

(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Registrant
pursuant to the foregoing provisions, or otherwise, Registrant has been advised
that in the opinion of the SEC 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 Registrant of expenses incurred or paid by a director, officer or
controlling person of Registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The Registrant hereby undertakes that:

(1) For determining any liability under the Securities Act, it will
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 Registrant under Rule 424(b)(1), or (4), or
497(h)

II-5
<PAGE> 90

under the Securities Act as part of this Registration Statement as of the
time the SEC declared it effective.

(2) For determining any liability under the Securities Act, it will
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-6
<PAGE> 91

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 registration
statement to be signed on its behalf by the undersigned in the City of Edmond,
State of Oklahoma, on March 22, 2000.

THE VIALINK COMPANY
(Registrant)

By: /s/ LEWIS B. KILBOURNE
----------------------------------
Lewis B. Kilbourne
Chief Executive Officer

POWER OF ATTORNEY

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

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

/s/ LEWIS B. KILBOURNE Chairman of the Board and Chief March 22, 2000
- ----------------------------------------------------- Executive Officer (principal
Lewis B. Kilbourne executive officer)

/s/ ROBERT N. BAKER President, Chief Operating March 22, 2000
- ----------------------------------------------------- Officer and Director
Robert N. Baker

/s/ J. ANDREW KERNER Senior Vice President of March 22, 2000
- ----------------------------------------------------- Finance and Chief Financial
J. Andrew Kerner Officer (principal financial
and accounting officer)

/s/ SUE A. HALE Director March 22, 2000
- -----------------------------------------------------
Sue A. Hale

/s/ JIMMY M. WRIGHT Director March 22, 2000
- -----------------------------------------------------
Jimmy M. Wright

/s/ WARREN D. JONES Director March 22, 2000
- -----------------------------------------------------
Warren D. Jones
</TABLE>

II-7
<PAGE> 92

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1* Form of Underwriting Agreement by and among the Registrant
and the Underwriters
2.1** Agreement and Plan of Merger dated May 8, 1996 by and among
the Registrant, Vantage Capital Resources, Inc., John
Simonelli, Larry E. Howell, Robert L. Barcum, Robert N.
Baker and David B. North
2.2(1) Asset Purchase Agreement dated June 12, 1997 by and among
ijob, Inc., Human Technologies, Inc., David C. Mitchell and
Ron Beasley
2.3(2) Asset Acquisition Agreement dated August 31, 1998 by and
between the Registrant and The NetPlex Group, Inc.
2.4(2) First Amendment to Asset Acquisition Agreement dated
September 9, 1998 by and between Registrant and The NetPlex
Group, Inc.
2.5(2) Stock Purchase Agreement dated December 31, 1998 by and
among Registrant, DCM Company, Inc., David C. Mitchell and
ijob, Inc.
3.1(3) Form of Certificate of Incorporation
3.2(3) Form of Bylaws
4.1(4) Form of Certificate of Common Stock
4.2 See Exhibits 3.1 and 3.2 for provisions of the Registrant's
Certificate of Incorporation and Bylaws defining rights of
holders of common stock of the Registrant
4.3** Form of Underwriter's Warrant Agreement by and between
Barron Chase Securities Inc. and the Registrant
4.4(5) Shareholder Agreement dated as of February 4, 1999 by and
between Registrant and Hewlett-Packard Company
4.5(6) Stock Option Agreement dated as of December 18, 1998 by and
between Registrant and Brian Herman
4.6(7) Registration Rights Agreement dated May 3, 1999 by and
between Registrant and Ernst & Young LLP
4.7(8) Securities Purchase Agreement dated October 12, 1999, by and
between the Registrant and i2 Technologies, Inc.
4.8(8) Common Stock Purchase Warrant dated October 12, 1999, issued
by the Registrant to i2 Technologies, Inc.
4.9(8) Registration Rights Agreement dated October 12, 1999, by and
between the Registrant and i2 Technologies, Inc.
5.1* Opinion of Brobeck, Phleger & Harrison LLP, counsel to the
Registrant, regarding the legality of the securities covered
by this registration statement
10.1(5) Note Purchase Agreement dated as of February 4, 1999 by and
between the Registrant and Hewlett-Packard Company
10.2** Lease dated October 3, 1994 by and between the Registrant
and Oklahoma Christian Investment Corporation
10.3(3) Form of Subordinated Secured Convertible Promissory Note
dated as of February 4, 1999 issued by the Registrant in
favor of Hewlett-Packard Company
10.4(5) Security Agreement dated as of February 4, 1999 by and
between the Registrant and Hewlett-Packard Company
10.5** Exchange Agreement dated October 14, 1996 by and among the
Registrant, Robert L. Barcum, Robert N. Baker, Russell L.
Reinhardt, David B. North, John Simonelli, and Larry E.
Howell
</TABLE>
<PAGE> 93

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.6(2) Earn-out Agreement dated September 30, 1998 by and between
the Registrant and The NetPlex Group, Inc.
10.7(9) Administrative Services Agreement dated August 31, 1998 by
and between the Registrant and The NetPlex Group, Inc.
10.8(9) Sublease dated September 1, 1998 by and between Applied
Intelligence Group, Inc. and The NetPlex Group, Inc.
10.9(9) Software Remarketing and Reselling Agreement effective as of
September 1, 1998 by and between the Registrant and The
NetPlex Group, Inc.
10.10(3) Form of Indemnification Agreement dated February 9, 1998 by
and between the Registrant and the Registrant's executive
officers
10.11(3) Employment Agreement dated October 1, 1998 by and between
the Registrant and Lewis B. Kilbourne
10.12(3) Employment Agreement dated October 1, 1998 by and between
the Registrant and Robert N. Baker
10.13(10) The viaLink Company (f/k/a Applied Intelligence Group, Inc.)
1995 Stock Option Plan, as amended and restated effective
September 1, 1998
10.14(11) The viaLink Company (f/k/a Applied Intelligence Group, Inc.)
1998 Non-Qualified Stock Option Plan
10.15(12) The viaLink Company (f/k/a Applied Intelligence Group, Inc.)
1998 Stock Grant Plan
10.16(13) The viaLink Company (f/k/a Applied Intelligence Group, Inc.)
1997 Employee Stock Purchase Plan
10.17(4) The viaLink Company 1999 Stock Option/Stock Issuance Plan
10.18** 1999 Stock Option/Stock Issuance Plan Form of Stock Option
Agreement
10.19** 1999 Stock Option/Stock Issuance Plan Form of Stock Issuance
Agreement
10.20** 1999 Stock Option/Stock Issuance Plan Form of Automatic
Stock Option Agreement
10.21(4) The viaLink Company 1999 Employee Stock Purchase Plan
10.22(7) Amended and Restated Alliance Agreement dated as of May 3,
1999 by and between the Registrant and Ernst & Young LLP
10.23(7) Master Services Agreement dated May 3, 1999 by and between
the Registrant and Ernst & Young LLP
10.24(8) Alliance and Marketing Agreement dated October 12, 1999, by
and between the Registrant and i2 Technologies, Inc.
10.25(8) Software License dated October 12, 1999, by and between the
Registrant and i2 Technologies, Inc.
10.26(14) Office Building Sublease effective as of December 16, 1999,
between Kerr-McGee Corporation and the Registrant
10.27(14) Employment Agreement made as of April 1, 1999, by and
between the Registrant and J. Andrew Kerner
10.28(14) Employment Agreement made as of April 9, 1999, by and
between the Registrant and David M. Lloyd
10.29(14) Employment Agreement made as of April 8, 1999, by and
between the Registrant and Robert I. Noe
10.30(14) Employment Agreement effective January 4, 2000 by and
between the Registrant and Patrick Fitzgerald.
</TABLE>
<PAGE> 94

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<C> <S>
10.31(14) Form of Addendum to Employment Agreement between the
Registrant and J. Andrew Kerner
10.32(14) Form of Addendum to Employment Agreement between the
Registrant and David M. Lloyd
10.33(14) Form of Addendum to Employment Agreement between the
Registrant and Robert I. Noe
21.1(3) Subsidiaries of Registrant
23.1 Consent of KPMG LLP
23.2 Consent of PricewaterhouseCoopers LLP
23.3* Consent of Brobeck, Phleger & Harrison LLP (included in its
opinion filed as Exhibit 5.1)
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