NAVIDEC INC, S-3, 1999-08-12

NAVIDEC INC
S-3, 1999-08-12
COMPUTER INTEGRATED SYSTEMS DESIGN

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 12, 1999

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

FORM S-3
REGISTRATION STATEMENT
UNDER

THE SECURITIES ACT OF 1933
---------------------

NAVIDEC, INC.
(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C>
COLORADO 33-0502730
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.)
Organization)
</TABLE>

14 INVERNESS DRIVE
SUITE F-116
ENGLEWOOD, COLORADO 80112
(303) 790-7565
(Address, Including Zip Code, and Telephone Number Including Area Code, of
Registrant's Principal Executive Offices)

PATRICK R. MAWHINNEY, CHIEF FINANCIAL OFFICER
14 INVERNESS DRIVE
SUITE F-116
ENGLEWOOD, COLORADO 80112
(303) 790-7565
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)

COPIES TO:

<TABLE>
<S> <C>
MICHAEL WAGER, ESQ. JAMES H. CARROLL, ESQ.
BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP COOLEY GODWARD LLP
2300 BP TOWER 2595 CANYON BOULEVARD
200 PUBLIC SQUARE SUITE 250
CLEVELAND, OHIO 44114-2378 BOULDER, COLORADO 80302-6737
(216) 363-4500 (303) 546-4000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:

As soon as practicable after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered
pursuant to a dividend or interest reinvestment plan, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [ ]

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

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

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

CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, no par value................. 2,875,000 $8.9688 $25,785,300 $7,169
</TABLE>

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(1) Includes 375,000 shares of common stock which may be purchased by the
Underwriters to cover over-allotments.

(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(c) under the Securities Act, the registration fee
applicable to the common stock is calculated on the basis of the average of
the high and low prices of the common stock as reported by the Nasdaq
SmallCap Market on August 5, 1999.

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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. 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 AUGUST 12, 1999

2,500,000 SHARES

NAVIDEC, INC.
[LOGO]

COMMON STOCK

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

We are offering 2,500,000 shares of our common stock. Our common stock is
traded on the Nasdaq SmallCap Market under the symbol "NVDC." On August 10,
1999, the last reported sale price of the common stock on the Nasdaq SmallCap
Market was $8.8125 per share. We intend to apply to have our common stock
approved for listing on the Nasdaq National Market after this offering under the
same symbol, "NVDC."

INVESTING IN OUR SHARES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 7.

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- --------
<S> <C> <C>
Public offering price....................................... $ $
Underwriting discount....................................... $ $
Proceeds, before expenses, to us............................ $ $
</TABLE>

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.

The underwriters have an option to purchase an additional 375,000 shares
from us and certain selling shareholders to cover over-allotments.

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

First Security Van Kasper expects to deliver the shares in San Francisco,
California on or about , 1999.

FIRST SECURITY VAN KASPER ADVEST, INC.
, 1999
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................................. 2
Risk Factors........................................ 7
About this Prospectus............................... 21
Use of Proceeds..................................... 21
Price Range of Our Common Stock..................... 22
Dividend Policy..................................... 23
Capitalization...................................... 23
Dilution............................................ 24
Selected Consolidated Historical
Financial Data.................................... 25
Management's Discussion and Analysis
of Financial Condition and Results
of Operations..................................... 27
Quantitative and Qualitative Disclosures
About Market Risk................................. 34
Recent Developments................................. 34
Navidec's Business.................................. 36
Where You Can Find More
Information....................................... 50
Incorporation of Certain Documents
by Reference...................................... 50
Management.......................................... 51
Principal and Selling Shareholders.................. 54
Underwriting........................................ 55
Legal Matters....................................... 57
Experts............................................. 57
Index to Financial Statements....................... F-1
</TABLE>
<PAGE> 4

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
For a more comprehensive understanding of this offering, you should read the
more detailed information contained in this prospectus and the documents we have
referred to, including, but not limited to, the risk factors beginning on page
7.

OUR BUSINESS

We are a provider and an incubator of innovative Internet business
solutions and services. Our combination of creative, technical and consulting
expertise allows us to design, build and manage comprehensive Internet solutions
for a diverse group of customers, which range from Internet start-ups to Fortune
1000 companies. Our focused approach enables customers to rapidly integrate the
Internet into their operations and quickly move from a basic web presence to
comprehensive intranet, extranet or electronic commerce functionality. We
leverage our expertise to provide our customers with proven solutions and, in
some instances, to help them launch new Internet based businesses.

We employ our NPact methodology in all of our projects. The NPact process
helps our customers identify how the Internet can be optimally used to their
competitive advantage. NPact also enables customers to accurately determine the
necessary costs and timelines for implementing an integrated Internet business
solution, which we also refer to as an e-business solution. Once the optimal
solution has been determined, NPact separates the assignment into multiple
fixed-priced 90 to 120-day projects, each providing incremental functionality.
Our services include, among others:

- e-business consulting;

- commercial e-business site development;

- legacy systems integration;

- e-mail messaging systems architecture and integration;

- design and implementation of intranet and extranet applications and
tools; and

- application management and hosting.

We incorporate our reusable software modules and packaged Internet
applications to ensure that our solutions are rapidly deployable, highly
reliable, scaleable and cost effective. Our solutions are constructed primarily
using the Java programming language to accommodate easy integration over
multiple technology platforms. We also develop solutions using HTML, XML, Perl
and other proven technologies. Since our inception we have implemented solutions
for over 200 organizations including customers such as Verio Corporation,
Richmond American Homes, a division of M.D.C. Holdings, Inc., Pentax Corporation
and Columbine JDS Systems, Inc.

In the course of providing Internet solutions to our customers, our ability
to leverage expertise within vertical markets continues to grow. In addition to
providing accelerated time-to-market solutions to our customers, we will, on
occasion, incubate selected businesses either through internal development,
partnerships with our customers or acquisitions.

Our subsidiary, DriveOff.com, Inc., was incubated out of our online
automotive solutions division. DriveOff.com currently offers automotive
information, interactive decision tools and
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buying and leasing information to consumers. In the third quarter of 1999,
DriveOff.com intends to launch an innovative, consumer-friendly web site that
will allow consumers to research, finance and purchase or lease an automobile
online without negotiating with a car salesman. We believe the DriveOff.com web
site will provide an automobile purchasing solution that both consumers and
dealers will find superior to the services currently available. DriveOff.com
differs from its competitors, such as Autobytel.com, Autoweb.com and Microsoft
CarPoint, by delivering sales to participating dealers rather than just selling
leads to dealers. DriveOff.com believes this new business model will be more
profitable than the existing lead generation models.

Historically, we have also derived revenues from our product distribution
division. We do not expect our product distribution division to significantly
contribute to our revenues in the future.

OUR OPPORTUNITY

We believe that the growth of e-commerce represents a significant
opportunity for businesses and the Internet solutions providers that will help
those businesses succeed. Internet solutions require both technical and creative
expertise, and only a limited number of Internet solutions providers are able to
bring together the multidisciplined skill sets and technology necessary to
rapidly develop and implement these solutions.

We believe that the need for Internet solutions providers who can deliver
strategic consulting advice as well as identifiable results and measurable
e-business solutions will continue to increase. International Data Corporation
projects that the worldwide market for Internet services will grow from $7.8
billion in 1998 to $78.0 billion in 2003. We believe that, as a result of our
combined technical and creative skills and our significant e-commerce consulting
experience, we are well positioned to become a leading provider of Internet
solutions.

OUR STRATEGY

Our goal is to become the leading provider and incubator of innovative
Internet business solutions and services. To achieve our objective we will:

- expand geographically;

- increase Internet consulting;

- expand our presence as an application service provider;

- expand the depth of client relationships;

- continue to develop technical capabilities;

- continue to attract and retain experienced professionals; and

- continue to incubate new businesses.
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RECENT DEVELOPMENTS

On July 23, 1999, WFC Holdings Corporation, a subsidiary of Wells Fargo &
Company, committed to make a strategic investment of $25.0 million in us and our
subsidiary, DriveOff.com. Closing of the transactions is subject to the
execution of a co-marketing agreement and long-term consulting agreement under
which Wells Fargo will engage us to perform Internet services totaling between
$2.5 million and $10.0 million over the next 24 months and will become an
affinity partner with DriveOff.com. The parties expect to close both
transactions in August 1999.

For its $10.0 million investment in us, Wells Fargo will receive 380,000
shares of common stock and a $6.2 million promissory note convertible into
620,000 shares of our voting and non-voting common stock. For its $15.0 million
investment in DriveOff.com, Wells Fargo will receive a note convertible into
3,200,000 shares of voting and non-voting preferred stock of DriveOff.com,
representing 20% of DriveOff.com's capital stock outstanding as of the expected
closing of the transaction. Wells Fargo will also receive a warrant for an
additional 160,000 shares of DriveOff.com common stock.
------------------------

Our executive offices are located at 14 Inverness Drive, Suite F-116,
Englewood, Colorado 80112, and our telephone number is (303) 790-7565. Our web
site address is www.navidec.com. The information contained on our web site does
not constitute part of this prospectus.

THE OFFERING

Unless otherwise indicated, information in this prospectus assumes the
underwriters' over-allotment option is not exercised.

Common stock offered...................... 2,500,000 shares

Common stock to be outstanding after this
offering.................................. 9,893,614 shares

Use of proceeds........................... We plan to use the proceeds to
increase marketing activities and
product development, expand our
sales and marketing offices and
our information technology
infrastructure, relocate our
offices and meet our working
capital and other general
corporate needs, which may
include strategic acquisitions.
See "Use of Proceeds."

Nasdaq SmallCap Market symbol............. NVDC

The number of shares of common stock to be outstanding after the offering
does not include:

- 1,224,070 shares that can be issued upon the exercise of options outstanding
as of June 30, 1999 at a weighted average exercise price of $4.44 per share;

- 588,935 additional shares that could be issued under our stock option plans;
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- 508,490 shares that could be issued upon the exercise of outstanding
warrants as of June 30, 1999 at a weighted average exercise price of $5.71
per share;

- 380,000 shares to be issued upon completion of the Wells Fargo transaction;

- 620,000 shares issuable in connection with Wells Fargo's $6.2 million note;
and

- 125,000 shares that could be issued upon the exercise of a warrant that will
be issued to First Security Van Kasper upon completion of the Wells Fargo
transaction at an exercise price of $9.438 per share.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is American
Securities Transfer & Trust, Inc.
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SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

CONSOLIDATED STATEMENT OF OPERATIONS:

The following statement of operations data is presented:

- on an actual basis;

- on a pro forma basis to reflect the $25.0 million investment made by Wells
Fargo, less transaction costs of $1.2 million (see "Recent Developments"),
as if the transaction closed at the beginning of the period presented.

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED ENDED JUNE 30,
DECEMBER 31, -----------------
--------------- (UNAUDITED)
1997 1998 1998 1999
------ ------ ------- -------
<S> <C> <C> <C> <C>
Revenue..................................... $6,008 $8,555 $ 3,539 $ 8,233
Gross profit................................ 1,789 2,685 1,200 3,217
Loss from operations........................ (3,883) (3,549) (1,030) (2,475)
Net loss.................................... (4,107) (3,933) (1,039) (2,362)
Net loss per share, basic and diluted....... (1.47) (1.10) (0.30) (0.37)
Weighted average common shares
outstanding............................... 2,800 3,578 3,410 6,353
Pro forma net loss.......................... (2,840)
Pro forma net loss per share, basic and
diluted................................... (0.42)
Pro forma weighted average common shares
outstanding............................... 6,733
</TABLE>

CONSOLIDATED BALANCE SHEETS:

The following balance sheet data is presented:

- on an actual basis;

- on a pro forma basis to reflect the $25.0 million investment made by Wells
Fargo (see "Recent Developments"), less transaction costs of $1.2 million;
and

- on a pro forma as further adjusted basis to reflect our receipt of the
estimated net proceeds from the sale of 2,500,000 shares of common stock
offered in the offering at an assumed public offering price of $ per
share, after deducting underwriting discounts and commissions and estimated
offering expenses.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
--------------------------------
(UNAUDITED)
AS OF
DECEMBER 31, PRO FORMA
--------------- AS FURTHER
1997 1998 ACTUAL PRO FORMA ADJUSTED
------ ------ ------- --------- ----------
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents...... $ 369 $ 711 $12,785 $36,585 $
Working capital................ 678 286 14,457 38,257
Total assets................... 3,099 5,265 18,070 43,070
Long-term liabilities, net of
current portion.............. 310 94 305 20,675
Shareholders' equity........... 1,550 1,799 16,377 20,708
</TABLE>

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RISK FACTORS

This offering involves a high degree of risk. You should carefully consider
the risks and uncertainties described below and the other information in this
prospectus before deciding whether to invest in shares of our common stock. If
any of the following risks actually occur, our business, operating results and
financial condition could be materially adversely affected. This could cause the
trading price of our common stock to decline, and you may lose part or all of
your investment.

This prospectus also contains forward-looking statements that involve risks
and uncertainties. These statements relate to our future plans, objectives,
expectations and intentions. These statements may be identified by the use of
words like "believes," "expects," "may," "will," "should," "seeks," "pro forma,"
"pro forma as further adjusted," or "anticipates," and similar expressions. Our
actual results could differ materially from those discussed in these statements.
Factors that could contribute to these differences include those discussed below
and elsewhere in this prospectus.

RISKS ASSOCIATED WITH OUR BUSINESS GENERALLY

IT IS DIFFICULT TO EVALUATE OUR BUSINESS AND PROSPECTS BECAUSE WE HAVE LIMITED
OPERATING HISTORY.

As a company in the early stage of development, we take risks and there are
uncertainties relating to our ability to successfully implement our business
plan. Our business and prospects must be considered in light of the risks,
expenses and difficulties encountered by companies in their early stages of
development, particularly companies in new and rapidly evolving markets such as
Internet solutions. The risks and uncertainties include the following:

- we may not be able to develop awareness and brand loyalty for our products
and services;

- we may not be able to anticipate and adapt to the changing market for
Internet services and e-commerce;

- we may not be able to expand our sales and marketing efforts;

- we may not be able to continue to upgrade and enhance our technologies to
accommodate expanded service offerings;

- we may not successfully respond to competitive developments; and

- we may not be able to develop and renew strategic relationships.

We may not be successful in accomplishing any or all of these objectives,
which could materially harm our business. In this case, the value of your
investment may decline.

WE HAVE INCURRED OPERATING LOSSES, EXPECT CONTINUED LOSSES AND MAY NOT ACHIEVE
PROFITABILITY. IF WE CONTINUE TO LOSE MONEY, WE MAY HAVE TO CURTAIL OUR
OPERATIONS.

We have not been profitable and we may continue to lose money for the
foreseeable future. Although there has been growth in annual revenue, we
incurred losses and experienced negative cash flow during the years ended
December 31, 1997 and 1998 and the six months ended June 30, 1999. We may
continue to incur losses and may never achieve or

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sustain profitability. An extended period of losses and negative cash flow may
prevent us from operating and expanding our business and continuing our
incubation strategy.

WE PLAN TO EXPAND RAPIDLY WHICH WILL PLACE A STRAIN ON OUR RESOURCES AND IF WE
FAIL TO MANAGE OUR GROWTH EFFECTIVELY, IT COULD HARM OUR BUSINESS.

Our rapid growth and plans for further growth have placed, and are expected
to continue to place, a significant strain on our administrative, operational
and financial resources. The failure to grow these resources, as well as our
technology base, along with the rest of our business may have a negative impact
on our financial performance.

OUR INCUBATION STRATEGY INVOLVES RISK.

Part of our strategy is to incubate new business ventures that we develop
in addition to our Internet solutions business. We are currently in the process
of incubating our first business, DriveOff.com, Inc. We anticipate that the
DriveOff.com web site will be launched and fully operational in select states
during the third quarter of 1999. Incubating new businesses will require us to
make significant investments. The formation of DriveOff.com included, and we
expect that any incubation of other e-businesses in the future will include the
provision of intellectual property, the hiring of employees, the contribution of
capital and the devotion of significant time and resources. After forming any
new e-business, we may not generate enough revenue from the new business to
cover the amounts we spend to create and launch the business. If we do not
generate substantial revenues from any business we incubate, that business may
never become profitable, and our business, financial condition and operating
results will be negatively affected.

We have limited experience in incubating new businesses. Our incubation
strategy has the following additional risks:

- we may not be able to identify suitable business ventures to incubate;

- forming new e-businesses may cause a disruption in our Internet solutions
business and distract our management and other personnel;

- the businesses we incubate may be unproven, may involve substantial risk and
may never be profitable; and

- the costs associated with incubating a new e-business may have a negative
impact on our profitability.

We expect to incubate businesses in which we obtain experience through our
Internet solutions business. Therefore, these new businesses may be competitive
with our existing customers, which may result in the loss of customers from our
Internet solutions business.

WE MAY ENGAGE IN FUTURE ACQUISITIONS THAT DILUTE OUR SHAREHOLDERS, CAUSE US TO
INCUR DEBT AND ASSUME CONTINGENT OR UNKNOWN LIABILITIES. IN ADDITION,
ACQUISITIONS POSE MANY ADDITIONAL RISKS.

We expect to make strategic acquisitions. In that event, we could:

- issue equity securities which would dilute our shareholders;

- incur significant acquisition-related expenses, including amortization or
write-off of goodwill or other intangible assets;

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- incur substantial debt; or

- assume unknown or contingent liabilities.

Acquisitions could also entail numerous additional risks, including:

- difficulties in integrating acquired personnel, operations, technologies or
services;

- unanticipated costs associated with the acquisitions that may harm our
operating results;

- diversion of management's attention from other business concerns; and

- risks of entering markets in which we have no or limited prior experience.

Any of these risks could have a negative impact on our business, operating
results and financial condition.

WE MAY NOT BE ABLE TO SUCCESSFULLY OPERATE OUR BUSINESS IF WE ARE UNABLE TO
ATTRACT, TRAIN AND RETAIN ADDITIONAL HIGHLY QUALIFIED SALES AND MARKETING,
MANAGERIAL AND TECHNICAL PERSONNEL, OR IF WE LOSE KEY PERSONNEL.

Our future success depends on our ability to identify, hire, train and
retain highly qualified sales and marketing, managerial and technical personnel.
Competition for personnel is intense, and we may not be able to attract,
assimilate or retain qualified personnel in the future. The inability to attract
and retain the necessary managerial, technical and sales and marketing personnel
could have a material adverse effect on our business.

Our business and operations are substantially dependent on the performance
of our executive officers and key employees. We maintain "key person" life
insurance on the life of Ralph Armijo, our Chairman, President and Chief
Executive Officer. The loss of the services of Ralph Armijo, Michael Kranitz,
the President of DriveOff.com, Patrick Mawhinney, our Chief Financial Officer or
Kenneth Bero, our Chief Operating Officer could have a material adverse effect
on our business. We have employment contracts with Mr. Armijo, Mr. Mawhinney and
Mr. Bero.

OUR SUCCESS IS DEPENDENT ON OUR KEEPING PACE WITH ADVANCES IN TECHNOLOGY. IF WE
ARE UNABLE TO KEEP PACE WITH ADVANCES IN TECHNOLOGY, CONSUMERS MAY STOP USING
OUR SERVICES AND OUR REVENUE WILL DECREASE.

The Internet and e-business markets are characterized by rapid
technological change, changes in consumer preferences and new product and
service offerings that could render our existing web sites and technology
obsolete. Our performance will depend, in part, on our ability to:

- continue to enhance our existing services;

- develop new technology that addresses the increasingly sophisticated and
varied needs of our prospective customers; and

- license leading technologies and respond to technological advances and
emerging industry standards and practices on a timely and cost-effective
basis.

We may not be successful in using new technologies effectively or adapting
our web sites or other technology to customer requirements or to emerging
industry standards. If we are unable to adapt to changing technologies, our
business, results of operations and financial condition could be negatively
impacted.

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INTERNET COMMERCE HAS YET TO ATTRACT SIGNIFICANT REGULATION. GOVERNMENT
REGULATION MAY RESULT IN FINES, PENALTIES, TAXES OR OTHER COSTS THAT MAY REDUCE
OUR FUTURE EARNINGS.

We currently are not directly regulated by any governmental agency, other
than having to comply with regulations applicable to businesses generally.
However, due to the increasing popularity and use of the Internet, it is
possible that a number of laws and regulations may be adopted with respect to
the Internet, covering the following issues:

- taxation of consumer transactions;

- advertising;

- user privacy;

- unsolicited marketing;

- pricing;

- quality of products and services;

- intellectual property;

- information security; and

- anti-competitive practices.

The adoption of any of these laws or regulations may decrease the growth of
Internet commerce. These laws could decrease the demand for our products and
services, increase our cost of doing business, or otherwise have an adverse
effect on our business, operating results or financial condition.

Moreover, the applicability to the Internet of existing laws governing
issues including real and intellectual property ownership, libel and personal
privacy is uncertain. If these existing laws were to be applied to the Internet,
our business may be harmed.

Taxing authorities in a number of states are currently reviewing the
appropriate tax treatment of companies engaged in Internet commerce. New state
tax regulations may subject us to additional state sales, use and income taxes.
The adoption of any of these laws or regulations may decrease the growth of
Internet usage or the acceptance of Internet commerce which could, in turn,
decrease the demand for our products and services, increase costs and otherwise
have a material adverse effect on our business, results of operations and
financial condition. To date, we have not spent significant resources on
lobbying or related government affairs issues but we may need to do so in the
future.

WE MAY UNINTENTIONALLY INFRINGE ON THE PROPRIETARY RIGHTS OF OTHERS WHICH MAY
RESULT IN COSTLY LITIGATION AND LOSS OF THE RIGHT TO USE SUCH PROPRIETARY
RIGHTS.

We may be subject to claims alleging that we have infringed upon third
party proprietary rights which may result in significant damages. Even if any of
these claims may ultimately prove to be without merit, the time management
spends addressing those claims and the legal costs associated with those claims
could harm our business.

We license technology and content from third parties and it is possible
that we could become a party to infringement actions based upon the licenses
from those third parties. We generally obtain representations as to the origin
and ownership of all licensed technology and content; however, this may not
adequately protect us. Any of those claims, with or without merit, could subject
us to costly litigation and the diversion of our technical and management
personnel.

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MISAPPROPRIATION OF OUR INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS COULD
IMPAIR OUR COMPETITIVE POSITION.

Our ability to compete depends upon our systems and technology. Despite
efforts to protect our proprietary rights through the use of trademarks, trade
secrets and copyright law, confidentiality agreements and technical measures,
unauthorized parties may attempt to copy aspects of our services or obtain and
use information that we regard as proprietary. Policing unauthorized use of our
proprietary rights is difficult. Effective trademark, service mark, copyright
and trade secret protection may not be available in every country in which our
services are made available online.

In addition, litigation may be necessary in the future to enforce or
protect our intellectual property rights or to defend against claims of
infringement or invalidity. As part of our confidentiality procedures, we
generally enter into agreements with our employees and consultants and limit
access to our trade secrets and technology. We cannot assure that the steps
taken by us will prevent misappropriation of technology or that the agreements
entered into for that purpose will be enforceable. Misappropriation of our
intellectual property or potential litigation could have a negative impact on
our business.

WE MAY BE HURT BY SYSTEM INTERRUPTIONS BECAUSE OUR PRIMARY SERVERS ARE LOCATED
AT A SINGLE PRINCIPAL LOCATION. IF COMMUNICATIONS TO THAT LOCATION WERE
INTERRUPTED, OUR OPERATIONS COULD BE NEGATIVELY IMPACTED.

We primarily host our web sites at our corporate headquarters in Englewood,
Colorado. Although we maintain offsite backup servers, all of our primary
servers are located at our corporate headquarters and are vulnerable to
interruption by damage from fire, flood, power loss, telecommunications failure,
break-ins and other events beyond our control. We have, from time to time,
experienced periodic systems interruptions and anticipate that these
interruptions will occur in the future. If we experience significant system
disruptions, our business, results of operations and financial condition would
be materially adversely affected. We maintain business interruption insurance
for the actual loss of business income sustained due to the suspension of
operations as a result of direct physical loss of or damage to property in our
offices. Our property and business interruption insurance may not be adequate to
compensate us for all losses that may occur due to failure of our systems.

OUR COMPUTER INFRASTRUCTURE MAY SUFFER SECURITY BREACHES. ANY SUCH PROBLEMS
COULD JEOPARDIZE CONFIDENTIAL INFORMATION TRANSMITTED OVER THE INTERNET, CAUSE
INTERRUPTIONS IN OUR OPERATIONS OR CAUSE US TO HAVE LIABILITY TO THIRD PARTIES.

We rely on technology that is designed to facilitate the secure
transmission of confidential information. Our computer infrastructure is
potentially vulnerable to physical or electronic computer break-ins, viruses and
similar disruptive problems. A party who is able to circumvent our security
measures could misappropriate proprietary information, jeopardize the
confidential nature of information transmitted over the Internet or cause
interruptions in our operations. Concerns over the security of Internet
transactions and the privacy of users could also inhibit the growth of the
Internet in general, particularly as a means of conducting commercial
transactions. To the extent that our activities involve the storage and
transmission of proprietary information, including personal financial
information, security breaches could expose us to a risk of financial loss,
litigation and other liabilities. Our insurance does not currently protect us
against these losses. Any security breach would have a material adverse effect
on our business, results of operations and financial condition.

11
<PAGE> 14

IF THE INTERNET DOES NOT CONTINUE TO TECHNOLOGICALLY IMPROVE, THE VOLUME OF
INTERNET COMMERCE MAY NOT INCREASE. WITHOUT THE INCREASED CAPACITY OF THE
INTERNET AND OUR SYSTEMS, OUR REVENUE MAY NOT INCREASE AND OUR OPERATIONS MAY BE
HARMED.

Our success will depend, in large part, upon the communications industry
and its infrastructure for providing Internet access and carrying Internet
traffic. The Internet may not prove to be a viable commercial medium because of
inadequate development of the necessary infrastructure or complementary products
as well as delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity.

If the Internet continues to experience significant growth in the number of
users and the level of use, then the Internet infrastructure may not be able to
continue to support the demands placed on it by this potential growth. An
unexpectedly large increase in the volume or pace of traffic on our web sites or
the number of orders placed by customers may require us to expand and further
upgrade our technology, transaction-processing systems and network
infrastructure. We may not be able to accurately project the rate or timing of
increases, if any, in the use of our web sites or expand and upgrade our systems
and infrastructure to accommodate these increases.

WE MAY NOT BE ABLE TO ACQUIRE OR MAINTAIN EFFECTIVE WEB ADDRESSES, WHICH MAY
ALLOW COMPETITORS TO GAIN AN ADVANTAGE.

We currently hold various web addresses relating to our brand names. We may
not be able to prevent third parties, including direct competitors, from
acquiring web addresses that are similar to our addresses, which could
materially adversely affect our business. The acquisition and maintenance of web
addresses is generally regulated by governmental agencies and their designees.
However, the regulation of web addresses in the United States and in foreign
countries may change. As a result, we may not be able to acquire or maintain
relevant web addresses where we conduct business. Furthermore, the relationship
between regulations governing web addresses and laws protecting trademarks in
unclear.

WE MAY BE REQUIRED TO SEEK ADDITIONAL FINANCING. IF ADDITIONAL FINANCING IS NOT
AVAILABLE TO US, WE MAY HAVE TO CURTAIL OUR OPERATIONS.

Our capital requirements have been and will continue to be significant. We
anticipate that our cash reserves, including the proceeds from the Wells Fargo
transactions, together with proceeds from this offering and the projected cash
flow from our operations, will be sufficient to fund our operations for at least
the next 12 months. If our capital requirements or cash flow vary materially
from our current projections or if unforeseen circumstances occur, we may
require additional financing sooner than we anticipate.

We may be required to obtain additional financing to achieve our business
objectives. Failure to raise these funds may:

- restrict our growth and limit expansion of our business;

- limit our development of new products and services;

- limit our ability to take advantage of strategic opportunities, including
incubating new businesses; and

- hinder our ability to compete.

12
<PAGE> 15

Additional financing may not be available to us when needed or, if
available, may not be obtained on commercially reasonable terms. In addition,
any equity financing may involve substantial dilution to our then-existing
shareholders.

YEAR 2000 ISSUES MAY ADVERSELY AFFECT OUR BUSINESS.

Because many computer applications have been written using two digits
rather than four to define the applicable year, date-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
"Year 2000 issue" could result in system failures or miscalculations causing
disruptions of operations, including disruptions of our web sites or normal
business activities. We cannot predict the extent to which the Year 2000 issue
will affect our vendors, consumers or DriveOff.com's affiliated automotive
dealers, or the extent to which we would be affected if these parties fail to
resolve any Year 2000 issues on a timely basis. The failure of these parties to
address the Year 2000 issue, to convert their systems on a timely basis or
effect a conversion that is compatible with our systems could have a material
adverse effect on us. In addition, to the extent our customers are unable to
access our web sites or automotive dealers are unable to access the system,
these failures would have a material adverse effect on our business, operating
results and financial condition.

WE HAVE SUBSTANTIAL DISCRETION AS TO THE USE OF PROCEEDS OF THE OFFERING.

Our management can spend the proceeds from this offering in ways which
differ from the specific proposed uses described in this prospectus. We have
also allocated a large portion of the proceeds from this offering to
discretionary uses. The shareholders may not agree with our spending decisions.
See "Use of Proceeds."

13
<PAGE> 16

RISKS ASSOCIATED WITH OUR INTERNET SOLUTIONS BUSINESS

OUR FUTURE REVENUE IS UNPREDICTABLE AND OUR QUARTERLY OPERATING RESULTS MAY
FLUCTUATE.

Our limited operating history and the emerging nature of the Internet
solutions market makes it very difficult for us to accurately forecast our
revenue. A number of factors are likely to cause fluctuations in our operating
results, including but not limited to:

- Internet growth;

- demand for our services;

- our ability to test, introduce and develop new services and enhance our
clients' Internet solutions;

- our ability to expand the breadth of services offered;

- the amount and timing of operating costs and capital expenditures relating
to expansion of our business;

- the announcement or introduction of new or enhanced services by our
competitors;

- our ability to expand our market presence through relationships with third
parties; and

- our ability to acquire new or complementary businesses, products or
technologies.

Period-to-period comparisons of our operating results are not a good
indication of our future performance. It is likely that our operating results in
some quarters will be below market expectations. In this event, the price of our
common stock is likely to decline.

THE SUCCESS OF OUR BUSINESS IS DEPENDENT ON MARKET ACCEPTANCE OF OUR SERVICES.

Our success will depend substantially upon the adoption of the Internet as
an attractive platform for conducting business. If market acceptance is not
forthcoming, our revenue may not grow and our prospects for earnings may suffer.
In particular, enterprises that have already invested substantial resources in
other means of conducting commerce and exchanging information may be reluctant
to adopt a new strategy that could make their existing products and
infrastructure obsolete. The Internet solutions business is dependent on
companies realizing the benefits of supplementing or replacing traditional
business models with a business transformation to e-business. It is difficult to
predict the future growth rate, if any, and the size of the market for our
services because the market for our services is new and evolving.

WE FACE SIGNIFICANT COMPETITION IN OUR MARKETS FROM A WIDE VARIETY OF
COMPETITORS.

Competition in the e-business services industry is intense. We may not be
able to successfully compete against our current or future competitors. An
increasing number of competitors continue to enter the market in which we
operate. There is a risk that our

14
<PAGE> 17

competitors may outperform us in many areas affecting our Internet solutions
business. These areas include:

- technology;

- breadth of services offered;

- creative and artistic ability;

- marketing and distribution resources;

- customer service and support; and

- price for services.

If any of our competitors outperform us in any of these areas, our revenue
may decrease and our business may be negatively impacted. Many of our
competitors have greater brand recognition, longer operating histories, a larger
customer base and greater financial, marketing and other resources than we have.
These factors may place us at a disadvantage when we respond to our customers'
pricing strategies, technological advances and other initiatives.

The market in which we operate is characterized by low financial barriers
to entry and frequent introductions of new services and products. We expect
competition in our business to increase significantly in the future. The intense
level of competition in the Internet solutions business could harm our operating
results and financial condition.

WE GENERALLY DO NOT HAVE LONG-TERM CONTRACTS AND NEED TO ESTABLISH RELATIONSHIPS
WITH NEW CUSTOMERS.

Our customers generally retain us on a project-by-project basis, rather
than under long-term contracts. As a result, a customer may or may not engage us
for further services after one or more segments of the NPact process is
complete. For example, after the consultation phase of NPact is complete and we
have determined what solution would be optimal, the customer may have another
company build and manage the solution. The absence of long-term contracts and
the need for new customers create an uncertain revenue stream, which could
negatively affect our financial performance.

OUR FIXED PRICE CONTRACTS INVOLVE FINANCIAL RISK.

Most of our contracts are currently on a fixed-price basis, rather than a
"time and material" basis. We assume greater financial risk on fixed-price
contracts than on "time and material" engagements. We have a limited history in
estimating our costs for our fixed-price engagements. If we fail to estimate
costs accurately or encounter unexpected problems, our business could be
materially harmed.

RISKS ASSOCIATED WITH DRIVEOFF.COM

THE DRIVEOFF.COM BUSINESS MODEL IS NEW AND UNPROVED.

DriveOff.com, our subsidiary, has a new business model that is unproved and
its success will primarily depend on the willingness of consumers to purchase
and lease cars completely online. Through operation of the CarWizard and
LeaseSource web sites, DriveOff.com currently generates revenue through each
referral that is made to participating dealers. In the third quarter of 1999 we
intend to launch DriveOff.com's new web site, which will be based

15
<PAGE> 18

on a consumer-friendly model of automobile purchasing and leasing, in which
revenue is almost exclusively generated from the completion of a sale or lease
of a vehicle. We intend to launch the DriveOff.com web site initially in a
limited number of states and to eventually expand to a nationwide presence. The
existing model and its lead-based revenue stream will be largely discontinued as
DriveOff.com expands its presence. Accordingly, the failure to generate
sufficient revenues using the new consumer-centric model will negatively impact
its business.

DRIVEOFF.COM HAS NO OPERATING HISTORY USING ITS NEW BUSINESS MODEL UPON WHICH TO
BASE AN EVALUATION OF ITS BUSINESS AND PROSPECTS.

DriveOff.com's potential for future profitability must be considered in
light of the risks associated with a company that has not operated using its new
business model. DriveOff.com faces uncertainties, expenses and difficulties
frequently encountered by companies in the early stages of development,
particularly companies in new and rapidly evolving markets like the market for
Internet commerce. Furthermore, while many Internet commerce companies have
grown in terms of revenue, few are profitable.

TO SUCCEED, DRIVEOFF.COM MUST ESTABLISH AND MAINTAIN A LARGE NETWORK OF
PARTICIPATING AUTOMOBILE DEALERS.

DriveOff.com will offer and arrange for the delivery of automobiles through
local automobile dealers who have agreed to participate in IADMA LLC, a
marketing association affiliated with DriveOff.com. DriveOff.com will only be
able to offer its service in those geographic areas in which it has signed up a
dealer for each automobile nameplate. To date, DriveOff.com has only signed up a
limited number of dealers concentrated in five Western states. Even if
DriveOff.com can initially sign up sufficient dealers, it will have to retain
such participating dealers or add new dealers to reduce the effects of any
turnover. DriveOff.com's revenues will be harmed if sufficient dealers cannot be
attracted and retained. Factors which may affect our ability to attract and
retain participating dealers include competition from other Internet automobile
buying services, volume of sales and revenue derived through DriveOff.com,
dealers' acceptance of the Internet as an attractive means for selling
automobiles, and the ease of participating in the DriveOff.com service.

THE SUCCESS OF DRIVEOFF.COM IS DEPENDENT ON CONSUMERS AND AUTOMOTIVE DEALERS
ACCEPTING THE INTERNET AS A METHOD OF PURCHASING AND LEASING AUTOMOBILES.

The Internet represents a medium for automobile purchases, sales and leases
which has only recently begun to develop. As is typical for a new and rapidly
evolving industry, demand and market acceptance for recently introduced services
and products over the Internet are affected by a high level of uncertainty and
there are few proven services.

While DriveOff.com believes that its services offer significant advantages
to consumers and automotive dealers, widespread acceptance of Internet commerce,
in general, or of DriveOff.com's services, in particular, may not occur.
Consumers have established habits for purchasing and leasing automobiles and may
be reluctant to try a new and unproven buying method. The success of
DriveOff.com assumes that consumers and automotive dealers will accept the
Internet as a viable method of purchasing or selling and leasing automobiles.

16
<PAGE> 19

THE ONLINE AUTOMOTIVE SOLUTIONS BUSINESS DEPENDS ON STRATEGIC RELATIONSHIPS
WHICH DRIVEOFF.COM MAY NOT BE ABLE TO MAINTAIN IN THE FUTURE.

DriveOff.com depends on strategic relationships to direct traffic to its
automotive solutions web sites. These include online affinity partners, such as
CBS Worldwide Inc. and X-Surf.com, and Internet portals, including WebCrawler.
DriveOff.com cannot be certain that these parties will maintain their agreements
with DriveOff.com. In addition, DriveOff.com must periodically renegotiate
existing agreements and these negotiations could result in increased costs in
future periods. DriveOff.com has received approximately 10% of its purchase
requests through an Internet relationship with Excite Inc. The agreement with
Excite extends to September 30, 1999 and pertains to automotive links published
on WebCrawler. DriveOff.com may not be able to maintain its relationship with
Excite or find alternative, comparable marketing partners capable of originating
significant numbers of purchase requests on terms satisfactory to it.

As a part of DriveOff.com's strategy, it develops new services by entering
into alliances with other companies engaged in complementary businesses,
including vehicle financing and leasing, and insurance. Some of these
relationships may prohibit or limit DriveOff.com from referring consumers to
other potential sources of financing. Therefore, DriveOff.com may be dependent
on those companies with which it has developed strategic relationships.
DriveOff.com cannot assure that any strategic relationships will continue or
that it will be able to develop new strategic relationships.

DRIVEOFF.COM IS SUBJECT TO REGULATORY UNCERTAINTIES AND POTENTIAL GOVERNMENT
REGULATION.

DriveOff.com may be subject, both directly and indirectly, to various laws
and regulations. Government authorities may also decide that federal and/or
state automobile brokerage laws, insurance licensing laws, motor vehicle
dealership laws or related consumer protection or product liability laws apply
to aspects of DriveOff.com's business as well as DriveOff.com's relationship
with IADMA. If any state's regulatory requirements impose additional
requirements on DriveOff.com or include DriveOff.com, DriveOff.com may be
required to modify its marketing programs in these states in a manner which may
undermine the program's attractiveness to consumers.

DriveOff.com may be required to obtain some licenses which may be an
expensive and time-consuming process that could divert the efforts of management
from day-to-day operations. In the alternative, if DriveOff.com determines that
the licensing and related requirements are overly burdensome, it may elect to
terminate operations in that state. In each case, DriveOff.com's business and
financial condition could be adversely affected.

DriveOff.com may decide to market insurance online, which may require it to
be licensed under state insurance laws. The use of the Internet in the marketing
of insurance products, however, is a relatively new practice. It is not clear
whether or to what extent state insurance licensing laws apply to activities
similar to DriveOff.com's business. If DriveOff.com is required to comply with
these licensing laws, compliance could be costly or, potentially, impossible to
achieve.

DRIVEOFF.COM MAY NOT BE ABLE TO CREATE NECESSARY LEVELS OF BRAND RECOGNITION OR
EFFECTIVELY COMPETE AGAINST ITS COMPETITORS.

DriveOff.com competes against a variety of Internet and traditional vehicle
purchasing services and automotive brokers, many of which have substantially
more capital, existing

17
<PAGE> 20

brand recognition, resources and access to additional financing. The market for
Internet-based commercial services is new, and competition among commercial web
sites is expected to increase significantly in the future. To compete
successfully as an Internet-based commercial entity, DriveOff.com must
significantly increase awareness of its services and brand name.

DriveOff.com competes with other entities which maintain similar commercial
web sites including Autobytel.com, AutoNation, AutoWeb.com, CarsDirect, Cendant
AutoVantage and Microsoft CarPoint. Sites for electronic classified ads, as well
as vehicle-related products and services, are also proliferating. DriveOff.com
competes indirectly against vehicle brokerage firms and affinity programs
offered by several companies. In addition, all major vehicle manufacturers have
their own web sites and many have recently launched or announced plans to launch
online buying services, including General Motors Corporation's BuyPower.
DriveOff.com also competes with traditional automobile dealerships.

DriveOff.com also competes with vehicle insurers, lenders and lessors as
well as other dealers that are not part of the IADMA network. These companies
may already maintain or may introduce web sites that will compete with our web
sites.

The importance of brand recognition will increase as more companies engage
in commerce over the Internet. Development and awareness of DriveOff.com's
brands will depend largely on its ability to obtain a leadership position in
Internet automobile commerce.

DRIVEOFF.COM'S QUARTERLY FINANCIAL RESULTS ARE SUBJECT TO SIGNIFICANT
FLUCTUATIONS.

DriveOff.com's quarterly operating results may fluctuate due to many
factors affecting its online automotive solutions business. If revenue does not
increase faster than expenses, DriveOff.com's financial condition will be
materially harmed. Other factors that may adversely affect its quarterly
operating results include:

- the ability of IADMA to retain existing dealers and attract new dealers;

- the ability to maintain dealer and customer satisfaction;

- the announcement or introduction of new or enhanced sites, services and
products by DriveOff.com's competitors;

- general economic conditions and economic conditions specific to the
Internet, online commerce or the automobile industry;

- the usage levels of online services and consumer acceptance of the Internet
and commercial online services for the purchase of consumer products and
services like those offered by DriveOff.com;

- the ability to upgrade and develop systems and infrastructure and to attract
new personnel in a timely and effective manner;

- the level of traffic to DriveOff.com's web sites and other sites that refer
traffic to those web sites;

- technical difficulties, system downtime or Internet brownouts;

- the amount and timing of operating costs and capital expenditures relating
to expansion of the business, operations and infrastructure; and

- governmental regulation.

18
<PAGE> 21

To date, the quarter-to-quarter growth in revenues from our automotive
solutions business, which has been consolidated into DriveOff.com, has offset
any effects due to seasonality. However, seasonality in the automotive industry,
Internet and commercial online service usage, and advertising expenditures are
likely to cause fluctuations in DriveOff.com's operating results and could harm
the business. DriveOff.com anticipates that purchase requests will typically
increase during the first and third fiscal quarters when new vehicle models are
introduced and will typically decline during the second and fourth quarters.
Internet and commercial online service usage and the growth rate of that usage
typically declines during the summer.

DRIVEOFF.COM'S SUCCESS WILL LARGELY BE A FUNCTION OF THE OVERALL STRENGTH OF THE
AUTOMOBILE INDUSTRY.

The overall strength of the automotive industry will significantly impact
the revenues DriveOff.com derives from its automotive related vendors and
consumer traffic to our web sites. The automotive industry is cyclical, with
sales of vehicles changing due to changes in national and global economic
forces. Sales of vehicles in the United States have been at historically high
levels during recent years. There is no assurance that the sales of vehicles
will stay at their current levels. A decrease in the current level of vehicle
sales could negatively impact DriveOff.com's financial condition. In addition,
labor problems in the automobile industry, such as strikes, will have a negative
impact on the ability of IADMA member dealers to deliver automobiles, which, as
a result, may have a negative impact on DriveOff.com's financial condition.

RISKS ASSOCIATED WITH NAVIDEC'S COMMON STOCK

FUTURE SALES OF COMMON STOCK BY OUR EXISTING SHAREHOLDERS COULD ADVERSELY AFFECT
OUR STOCK PRICE.

The market price of our common stock could decline as a result of sales of
a substantial number of shares of our common stock in the market after this
offering, or the perception that such sales could occur. These sales might make
it more difficult for us to sell equity securities in the future at a time and
at a price that we deem appropriate. After this offering, we will have 9,893,614
outstanding shares of common stock. Of these shares, the 2,500,000 shares of
common stock being offered by this prospectus, as well as up to an additional
375,000 shares that may be issued to cover any underwriters' over-allotments,
will be freely tradeable.

As of June 30, 1999, options to purchase a total of 1,224,070 shares of
common stock were outstanding, 577,070 of which are currently exercisable.
Shares issued upon the exercise of stock options will be eligible for resale in
the public market from time to time.

As of June 30, 1999, warrants to purchase 508,490 shares of common stock
were outstanding, all of which are currently exercisable.

Our directors and officers who have beneficial ownership of 1,726,446
shares in the aggregate, have entered into lock-up agreements in which they have
agreed that they will not sell, directly or indirectly, any shares of common
stock without the prior written consent of our underwriters for a period of 180
days from the date of this prospectus.

19
<PAGE> 22

We expect to issue 380,000 shares of common stock to Wells Fargo during
August 1999. In addition, pursuant to the $6.2 million promissory note we issued
to Wells Fargo, Wells Fargo may, at its option, elect to convert the note into
620,000 shares of our common stock. Wells Fargo has demand and "piggy back"
registration rights with respect to these shares.

In connection with the Wells Fargo transaction, First Security Van Kasper
will receive a warrant to purchase 125,000 shares of common stock at an exercise
price of $9.438 per share. First Security Van Kasper will receive "piggyback"
registration rights with respect to these shares.

THE PRICE OF OUR COMMON STOCK IS VOLATILE AND MAY BE AFFECTED BY NUMEROUS MARKET
CONDITIONS BEYOND OUR CONTROL.

Our stock price has been highly volatile since our initial public offering
in February 1997. We expect this volatility to continue in the future due to a
variety of factors, including:

- quarterly variations in actual or anticipated results of our operations;

- analysts' earnings estimates;

- announcements of technological innovations or new products or services by us
or our competitors;

- general conditions in the Internet or other high computer technology
industries; and

- general economic conditions.

In addition, the securities markets frequently experience extreme price and
volume fluctuation which affect market prices for securities of companies
generally, and technology companies in particular. These fluctuations are often
unrelated to the operating performance of the affected companies. Broad market
fluctuations may adversely affect the market price of our common stock.

The trading prices of many technology and Internet-related companies'
stocks have reached historical highs within the last 52 weeks and have reflected
relative valuations substantially above historical levels. During the same
period, those companies' stocks have also been highly volatile and have recorded
lows well below those historical highs. We cannot assure you that our stock will
trade at the same levels of other Internet stocks or that Internet stocks in
general will sustain their current market prices.

In the past, following periods of high volatility in a particular company's
securities, securities class action litigation has been brought against the
company. We may become involved in this type of litigation in the future.
Litigation is often expensive and diverts management's attention and resources,
which could have a material adverse effect on our business.

INVESTORS WILL EXPERIENCE IMMEDIATE DILUTION.

Based on a closing price per share for our common stock as of
, 1999, the price per share in this offering will exceed the pro
forma net tangible book value per share. Accordingly, investors purchasing
shares in this offering will incur immediate and substantial dilution of
approximately $ in the pro forma net tangible book value per share of
the common stock from the $ price per share paid for the common stock.
To the extent outstanding options and warrants to purchase common stock are
exercised, there will be further dilution. See "Dilution."

20
<PAGE> 23

ABOUT THIS PROSPECTUS

You should only rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of our common stock only in jurisdictions where offers and sales are
permitted.

This preliminary prospectus must be completed before this offering is
completed. Except as otherwise provided, in this prospectus, "Navidec," "we,"
"us," and "our" refer to Navidec, Inc., a Colorado corporation.

USE OF PROCEEDS

We are offering a total of 2,500,000 shares in this offering. Using an
assumed public offering price of $ per share, we estimate the net
proceeds from the offering to be approximately $ million, or
$ million if the underwriter exercises its over-allotment option in
full, assuming an offering price of $ per share and after deducting
estimated underwriting discounts and commissions and expenses of the offering.
We will not receive any proceeds from the sale of common stock by some of our
shareholders, who may sell up to 175,000 shares of common stock if the
underwriters exercise their over-allotment option.

We plan to use the net proceeds from the offering in the manner and
approximate amount indicated below.

<TABLE>
<S> <C>
Marketing expenses.......................................... $ 7,000,000
Product development expenses................................ 6,000,000
Regional expansion of sales and marketing offices........... 2,500,000
Expand information technology infrastructure................ 2,000,000
Relocation of our business to a larger facility............. 1,000,000
Working capital and other general corporate needs, including
possible strategic acquisitions........................... [ ]
-----------
Total net proceeds..................................... $ [ ]
===========
</TABLE>

We intend to invest the net proceeds in short-term, interest-bearing,
investment-grade securities pending our planned uses for the proceeds.
Management will have broad discretion in the application of the proceeds
allocated to working capital and other corporate needs.

In connection with the Wells Fargo transaction, we will receive $10.0
million and DriveOff.com will receive $15.0 million. We intend to use the
proceeds of these transactions for working capital and other general corporate
needs.

21
<PAGE> 24

PRICE RANGE OF OUR COMMON STOCK

Our common stock commenced trading on the Nasdaq SmallCap Market under the
symbol "NVDC" on February 11, 1997. We intend to apply to have our common stock
approved for listing on the Nasdaq National Market after this offering under the
same symbol, "NVDC." The following table shows the high and low bid prices of
our common stock for the periods presented. The quotations shown below reflect
bid prices on the Nasdaq SmallCap Market.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Year Ended December 31, 1997:
First Quarter............................................. $ 5 3/4 $5
Second Quarter............................................ 6 1/8 3 1/8
Third Quarter............................................. 6 1/2 5
Fourth Quarter............................................ 7 3/8 4 1/16
Year Ended December 31, 1998:
First Quarter............................................. $ 6 7/8 $2 5/8
Second Quarter............................................ 6 7/8 5 3/4
Third Quarter............................................. 7 3/16 2
Fourth Quarter............................................ 6 3/8 2
Year Ending December 31, 1999:
First Quarter............................................. $19 1/16 $5 1/16
Second Quarter............................................ 15 8
</TABLE>

The closing price of our common stock on August 10, 1999 was $8.8125.

22
<PAGE> 25

DIVIDEND POLICY

We have not declared any cash dividends on our common stock. We do not
anticipate paying any cash dividends in the foreseeable future. We currently
intend to retain future earnings, if any, to finance operations and expand our
business. Any future determination to pay cash dividends will be at the
discretion of our board of directors and will be dependent upon our financial
condition, operating results, capital requirements and other factors that our
board of directors deems relevant.

CAPITALIZATION

The following table shows our capitalization as of June 30, 1999. Our
capitalization is presented on an actual basis, on a pro forma basis to reflect
the $25.0 million investment made by Wells Fargo, less transactions costs of
$1.2 million (see "Recent Developments"), and on a pro forma as further adjusted
basis to reflect our receipt of the estimated net proceeds from the sale of
2,500,000 shares of common stock offered in the offering at an assumed public
offering price of $ per share, after deducting underwriting discounts and
commissions and estimated offering expenses.

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
-----------------------------------
(UNAUDITED)
PRO FORMA
AS FURTHER
ACTUAL PRO FORMA ADJUSTED
-------- --------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Short-term borrowings, including current
portion of long-term indebtedness.......... $ 236 $ 236 $
======== ======== ========
Capital lease obligations.................... 305 305
Convertible debt............................. -- 20,370
Shareholders' equity:
Common stock, no par value, 20,000,000
shares authorized; 7,393,614
outstanding, actual; 7,773,614
outstanding, pro forma; and 10,273,614
outstanding, pro forma as further
adjusted................................ 27,526 30,957
Warrants for common stock.................. 364 1,264
Accumulated deficit........................ (11,513) (11,513)
-------- -------- --------
Total shareholders' equity.............. 16,377 20,708
-------- -------- --------
Total capitalization............... $ 16,918 $ 41,619 $
======== ======== ========
</TABLE>

Please read this capitalization table together with the sections of this
prospectus entitled "Selected Consolidated Historical Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements included in this
prospectus.

23
<PAGE> 26

DILUTION

Our pro forma net tangible book value as of June 30, 1999 was $ ,
or approximately $ per share. Pro forma net tangible book value represents
the amount of tangible assets less total liabilities, divided by the number of
shares of common stock outstanding, assuming closing of the $25.0 million Wells
Fargo investment in us and the immediate conversion of both the $15.0 million
and $6.2 million promissory notes issued relating to this transaction. Without
taking into account any other changes in the net tangible book value after June
30, 1999, other than the sale of the shares offered hereby at an assumed
offering price of $ per share, our pro forma as further adjusted net
tangible book value as of June 30, 1999 would have been $ , or $
per share. The pro forma as further adjusted net tangible book value assumes
that the proceeds of this offering to us, net of offering expenses and
underwriting discount, will be approximately $ . This represents an
immediate increase in net tangible book value to existing shareholders
attributable to new investors of $ per share and the immediate dilution of
$ per share to new investors. The following table illustrates this per share
dilution:

<TABLE>
<S> <C> <C>
Assumed public offering price per share..................... $
Pro forma net tangible book value per share before this
offering............................................... $
Increase per share attributable to new investors..........
-----
Pro forma as further adjusted net tangible book value per
share after this offering.................................
------
Dilution per share to new investors......................... $
======
</TABLE>

The foregoing discussion and table assumes no exercise of the underwriters'
over-allotment option or of any outstanding stock options or warrants after June
30, 1999.

As of June 30, 1999, there were options outstanding to purchase 1,224,070
shares of common stock at a weighted average exercise of $4.44 per share,
warrants outstanding to purchase 508,490 shares of common stock at a weighted
average exercise price of $5.71 per share, and 588,935 additional shares
reserved for future grants under our stock option plans. To the extent that any
of these options are exercised, there will be further dilution to new investors.

24
<PAGE> 27

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

We derived the selected consolidated historical financial data presented
below from our consolidated historical financial statements and related notes
included in another part of this prospectus. You should read the selected
financial data together with our consolidated historical financial statements
and the section of the prospectus entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

Our financial statements for the years ended December 31, 1997 and December
31, 1998 appearing in this prospectus have been audited by Hein + Associates,
LLP and Arthur Andersen LLP, respectively, to the extent and for the periods
indicated in their reports. Our financial statements for the six months ended
June 30, 1998 and June 30, 1999 are unaudited, and in our opinion include all
adjustments, consisting of normal adjustments, necessary for a fair presentation
of the results for the unaudited period. You should not rely on interim results
as being indicative of results we may expect for the full year.

CONSOLIDATED STATEMENT OF OPERATIONS:

The following statement of operations data is presented:

- on an actual basis;

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED ENDED
DECEMBER 31, JUNE 30,
----------------- -----------------
1997 1998 1998 1999
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUE:
Internet solutions......................................... $ 2,359 $ 5,443 $ 1,839 $ 5,601
Online automotive solutions................................ 223 939 504 1,582
Product distribution....................................... 3,426 2,173 1,196 1,050
------- ------- ------- -------
Total revenue.......................................... 6,008 8,555 3,539 8,233
Cost of revenue............................................ 4,219 5,870 2,339 5,016
------- ------- ------- -------
Gross profit............................................... 1,789 2,685 1,200 3,217

OPERATING EXPENSES:
Product development........................................ 1,662 1,834 642 1,520
General and administrative................................. 2,468 3,479 1,341 2,156
Selling and marketing...................................... 237 921 247 2,016
Impairment of goodwill..................................... 1,305 -- -- --
------- ------- ------- -------
Total operating expenses............................... 5,672 6,234 2,230 5,692
Loss from operations....................................... (3,883) (3,549) (1,030) (2,475)
Other (expense) income..................................... (224) (384) (9) 113
------- ------- ------- -------
Net loss................................................... $(4,107) $(3,933) $(1,039) $(2,362)
======= ======= ======= =======
Net loss per share, basic and diluted...................... $ (1.47) $ (1.10) $ (0.30) $ (0.37)
======= ======= ======= =======
Weighted average shares outstanding........................ 2,800 3,578 3,410 6,353

Pro forma net loss......................................... $(2,840)
=======
Pro forma net loss per share, basic and diluted............ $ (0.42)
=======
Pro forma weighted average shares outstanding.............. 6,733
</TABLE>

25
<PAGE> 28

CONSOLIDATED BALANCE SHEETS:

The following balance sheet data is presented:

- on an actual basis;

- on a pro forma basis to reflect the $25.0 million investment made by Wells
Fargo, less transaction costs of $1.2 million (see "Recent Developments");
and

<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
----------------------------------
(UNAUDITED)
AS OF DECEMBER 31, PRO FORMA
------------------ AS FURTHER
1997 1998 ACTUAL PRO FORMA ADJUSTED
------- ------- ------- --------- ----------
<S> <C> <C> <C> <C> <C>
Cash and cash
equivalents............. $ 369 $ 711 $12,785 $36,585
Working capital........... 678 286 14,457 38,257
Total assets.............. 3,099 5,265 18,070 43,070
Long-term liabilities, net
of current portion...... 310 94 305 20,675
Shareholders' equity...... 1,550 1,799 16,377 20,708
</TABLE>

26
<PAGE> 29

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

The following discussion and analysis should be read in conjunction with
"Selected Consolidated Historical Financial Data" and our consolidated financial
statements and notes included elsewhere in this prospectus. Our actual results
could differ materially from those anticipated or implied by the forward-looking
statements discussed here. Factors that could cause or contribute to differences
include those discussed in "Risk Factors" as well as those discussed elsewhere
in this prospectus. We urge prospective investors to exercise caution and not to
place undue reliance on any such forward-looking statements. Forward-looking
statements contained in this prospectus speak only as of the date made, and we
do not intend to update these statements after the offering.

OVERVIEW

We are a provider and incubator of innovative e-businesses solutions and
services. We provide e-business services to a wide range of customers, from
start-up enterprises to Fortune 1000 businesses. Our services enable our
customers to transform their Internet operations from a basic web presence into
an integrated e-business.

We were organized in July 1993 as ACI Systems, Inc. as a value added
reseller of computer products. In July 1996, we merged with Interactive Planet,
Inc., a designer and developer of Internet web sites and subsequently changed
our name to Navidec, Inc. In July 1997, we acquired TouchSource, Inc., a
designer and developer of interactive kiosks. Through the merger and the
acquisition, we significantly enhanced our business model by combining expertise
in traditional marketing and distribution and Internet/Intranet technology. In
December 1998, we acquired CarWizard.com and LeaseSource.com, two prominent
online automotive sites, in order to expand our online automotive presence.

Currently, we derive revenue from three divisions: Internet solutions,
online automotive solutions and product distribution. The majority of our
Internet solutions revenue is generated from fixed-price, fixed-time contracts.
We consider many factors in developing the fixed-price and fixed-time of a
contract, including the technical complexity of the engagement, the resources
required to complete the engagement and the extent to which we will be able to
deploy internally developed software tools to deliver the solution. Since most
of our solutions are delivered within a 90 to 120-day time frame, revenue is
recognized using percentage-of-completion accounting based on the ratio of labor
hours incurred as compared to the estimated total labor hours needed to complete
the engagement. We plan to expand our Internet solutions services offerings to
incorporate applications management and hosting services, which will generate
recurring revenues.

Our online automotive solutions' revenue is primarily derived from the sale
of leads generated by our CarWizard.com, LeaseSource.com and USWheels.com web
sites. During the second quarter of 1999, we contributed substantially all of
the assets associated with our online automotive solutions division to a new
subsidiary, DriveOff.com, Inc. Currently, we are selling sales leads to dealers;
however, once DriveOff.com's web site is launched in the third quarter of 1999,
we will change our revenue model. DriveOff.com expects to enter into an
exclusive contract with the IADMA. Under the terms of the proposed contract, all
vehicle transactions generated by DriveOff.com will be delivered to IADMA member
dealers in return for a monthly marketing fee. In addition, DriveOff.com will
earn a fee for each lease or loan associated with an IADMA supplied automobile.
DriveOff.com will also earn various

27
<PAGE> 30

fees from the sale of after-market products such as credit life insurance, gap
insurance and warranties.

Our product distribution business generates revenue through the resale of
third party software and hardware components, graphical printers and supplies.
Since product distribution is not related to our core strategy, we expect that
revenue from this business will become a smaller percentage of total revenue as
our Internet and online automotive solutions businesses continue to grow.

Our operating expenses consist of product development costs, general and
administrative expense and selling and marketing expenses. Product development
costs include salaries and out-of-pocket expenses incurred in developing new
technologies for our own use and for future customer applications generally, as
opposed to customer-specific development expenses. General and administrative
expense consists primarily of salary and benefit expenses for our 100 employees.
It also includes lease expenses associated with our office facility and various
equipment. Selling and marketing expenses includes advertising costs, costs
associated with participation in trade shows and related travel expenses.

RESULTS OF OPERATIONS AS A PERCENTAGE OF REVENUES

<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED ENDED
DECEMBER 31, JUNE 30,
------------- -------------
1997 1998 1998 1999
----- ----- ----- -----
<S> <C> <C> <C> <C>
REVENUE:
Internet solutions.......................................... 39.3% 63.6% 52.0% 68.0%
Online automotive solutions................................. 3.7 11.0 14.2 19.2
Product distribution........................................ 57.0 25.4 33.8 12.8
----- ----- ----- -----
Total revenue........................................... 100.0 100.0 100.0 100.0
Cost of revenue............................................. 70.2 68.6 66.1 60.9
----- ----- ----- -----
Gross margin................................................ 29.8 31.4 33.9 39.1

OPERATING EXPENSES:
Product development......................................... 27.7 21.4 18.1 18.5
General and administrative.................................. 41.1 40.7 37.9 26.2
Selling and marketing....................................... 3.9 10.8 7.0 24.5
Impairment of goodwill...................................... 21.7 -- -- --
----- ----- ----- -----
Total operating expenses................................ 94.4 72.9 63.0 69.1
Loss from operations...................................... (64.6%) (41.5%) (29.1%) (30.1%)
</TABLE>

SIX MONTHS ENDED JUNE 30, 1999 AND JUNE 30, 1998

Revenue for the six months ended June 30, 1999 increased 132.6% over the
same period in 1998, from $3.5 million to $8.2 million. The increase was due to
increased revenue from our Internet solutions and online automotive solutions
businesses.

Internet solutions revenue for the six months ended June 30, 1999 increased
204.6% over the same period in 1998, from $1.8 million to $5.6 million. The
increase in Internet solutions revenue was primarily due to increased project
size as we continued to perform more complex and comprehensive solutions for our
clients.

28
<PAGE> 31

Online automotive solutions revenue for the six months ended June 30, 1999
increased 213.9% over the same period in 1998, from $504,000 to $1.6 million.
The increase in online automotive solutions revenue was a result of increased
traffic to our web sites and a corresponding increase in purchase requests and
advertising revenues. In addition, our automotive solutions division's online
presence increased from four sites as of June 30, 1998 to 14 as of June 30,
1999. This increase resulted in 64,000 automotive purchase requests for the six
months ended June 30, 1999 versus 3,000 purchase requests for the same period of
1998. Page views for the six months ended June 30, 1999 were 56.4 million versus
865,000 for the same period of 1998. For the six months ended June 30, 1999, our
online automotive solutions division's web sites attracted 3.6 million unique
visitors, versus 96,000 for the same period of 1998.

Revenue from our product distribution division for the six months ended
June 30, 1999 decreased by 12.2% over the same period of 1998, from $1.2 million
to $1.0 million. The decrease in sales was due to our decision to focus less on
product distribution and devote more resources to Internet solutions and online
automotive solutions.

Gross profit increased $2.0 million or 168.1% from $1.2 million for the six
months ended June 30, 1998 to $3.2 million for the same period in 1999. As a
percent of revenue, gross margin increased from 33.9% to 39.1% as a result of a
changing mix of sales. Gross margin for our online automotive solutions division
increased from 77.4% for the six months ended June 30, 1998 to 79.4% for the
same period in 1999. Gross margin for our Internet solutions division increased
from 27.7% for the six months ended June 30, 1998 to 30.0% for the same period
in 1999. The increase was primarily a result of our ability to reuse previously
developed system components in new projects, which resulted in higher gross
margins for the subsequent projects.

Product development costs increased $878,000, or 136.8%, from $642,000 for
the six months ended June 30, 1998 to $1.5 million for the same period in 1999.
As a percentage of revenue, product development costs increased from 18.1% to
18.5%. Product development costs are projected to increase during the remainder
of 1999 as we expand our inventory of reusable products.

General and administrative expenses increased $815,000, or 60.8%, from $1.3
million for the six months ended June 30, 1998 to $2.2 million for the same
period in 1999. General and administrative expenses decreased as a percentage of
revenue from 37.9% for the six months ended June 30, 1998 to 26.2% for the same
period in 1999, due to the fixed nature of a large percentage of these expenses.
General and administrative expenses are projected to increase over 1998 expense
levels but are projected to decrease as a percentage of sales for the year.

Selling and marketing expenses increased $1.8 million from $247,000, or
7.0% of revenue, for the six months ended June 30, 1998 to $2.0 million, or
24.5% of revenue, for the same period in 1999. The increase in sales and
marketing expenses is the result of our attempt to expand brand recognition and
is projected to increase in 1999 as we expand our marketing for our Internet
solutions services and DriveOff.com.

Other income was $113,000 for the six months ended June 30, 1999 an
increase from other expense of $9,000 for the same period of 1998. The increase
was a result of decreased borrowings and increased interest income from larger
cash balances.

29
<PAGE> 32

YEARS ENDED DECEMBER 31, 1998 AND 1997

Revenue for 1998 increased 42.4% over 1997 revenues, from $6.0 million to
$8.6 million. The increase was primarily a result of increased sales by our
Internet solutions and online automotive solutions divisions. Internet solutions
revenue increased 130.7% over 1997 revenue, from $2.4 million to $5.4 million.
Online automotive solutions revenue increased 321.1% over 1997 revenue, from
$223,000 to $939,000. The increase in those two areas was primarily due to
increased customer demand and marketing activities. Our online automotive
solutions division's online presence increased from one site at the end of 1997
to 14 sites at the end of 1998. This increase resulted in automotive purchase
requests increasing from 351 during 1997 to more than 18,000 during 1998.

Product distribution revenue decreased $1.3 million or 36.6%, from $3.4
million in 1997 to $2.2 million in 1998. The decrease in revenues was due to our
decision to discontinue distribution of certain less profitable products.

Gross profit increased $896,000, or 50.1%, from $1.8 million in 1997 to
$2.7 million in 1998. As a percentage of revenue, gross profit increased from
29.8% to 31.4%. The increase in our gross margin was a result of increased
revenue in online automotive solutions. Online automotive solutions had a gross
margin of 74.1% in 1998, while our Internet solutions division had a gross
margin of 26.3% and our products distribution division had gross margin of 25.5%
for the same period.

Product development expense increased $172,000, or 10.3%, from $1.7 million
in 1997 to $1.8 million in 1998. As a percentage of revenue, product development
expenses decreased from 27.7% to 21.4% in 1998.

General and administrative expense increased $1.0 million, or 41.0%, from
$2.5 million in 1997 to $3.5 million in 1998. As a percentage of revenue,
general and administrative expense decreased slightly from 41.1 % in 1997 to
40.7% in 1998. The increase in expense was primarily due to increased personnel
expenses and increased legal expenses related to merger negotiations which were
discontinued in 1998.

Selling and marketing expense increased $684,000 from $237,000, or 3.9% of
revenue, in 1997 to $921,000, or 10.8% of revenue in 1998. This increase was
primarily due to increased marketing activities.

During 1997 we recorded a one-time $1.3 million expense for the impairment
of goodwill. The goodwill was the result of our merger with Interactive Planet,
Inc. in 1996 and the acquisition of TouchSource, Inc. in 1997.

Net interest expense for 1998 increased 75.4% over 1997 net interest
expense, from $236,000 to $414,000. The increase was a result of increased
borrowings to fund our growth.

QUARTERLY OPERATING RESULTS

The following table presents certain unaudited financial data for our eight
most recent quarters. This information has been derived from unaudited
consolidated historical financial statements and has been prepared on the same
basis as the audited consolidated financial statements contained in this
prospectus. In our opinion, these figures include all adjustments, consisting
only of normal recurring adjustments, necessary to present fairly the
information for the period presented. The data should be read in conjunction
with our consolidated

30
<PAGE> 33

historical financial statements and notes included in this prospectus. Our
operating results for any period are not necessarily indicative of results to be
expected for any subsequent period.

<TABLE>
<CAPTION>
QUARTERS ENDED
---------------------------------------------------------------------------------------
SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1997 1997 1998 1998 1998 1998 1999 1999
--------- -------- -------- -------- --------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue............................ $1,926 $ 1,130 $1,702 $1,837 $2,139 $ 2,877 $4,457 $ 3,776
Gross profit....................... 618 145 647 553 745 740 1,689 1,529
Loss from operations............... (350) (2,568) (465) (565) (521) (1,998) (767) (1,707)
Net loss........................... (359) (2,538) (481) (558) (617) (2,277) (762) (1,600)
Loss per share..................... (0.12) (0.87) (0.15) (0.16) (0.17) (0.63) (0.14) (0.22)
</TABLE>

Revenue decreased for the quarter ended December 1997 from the previous
quarter due to a concerted effort to develop the automotive business combined
with limited resources to continue to build the Internet solutions business.
Revenue decreased in the quarter ending June 1999 from the previous quarter due
to an unusually large contract from Verio for $1.2 million recognized in March
1999. In addition, we experienced significant one-time operating expenses in the
fourth quarter of 1997, due to the write off of goodwill. In the fourth quarter
of 1998, we experienced a significant increase in operating expenses due to new
marketing programs.

LIQUIDITY AND CAPITAL RESOURCES

From our inception through June 30, 1999, we funded our operations
primarily from the following sources:

- equity investments through our initial public offering and subsequent
private placements of our securities;

- revenues generated from operations;

- loans from principal shareholders and employees;

- lines of credit; and

- accounts receivable factoring arrangements made available by banks.

As of June 30, 1999, we had cash and cash equivalents of $12.8 million and
net working capital of $14.5 million. This compares with cash and cash
equivalents of $711,000 and net working capital of $286,000 as of December 31,
1998 and cash and cash equivalents of $369,000 and a working capital $678,000 as
of December 31, 1997. In March 1999, we completed a warrant call that resulted
in net cash to us of approximately $13.8 million. During the remainder of 1999
we expect to have capital expenditures of approximately $1.2 million for
DriveOff.com and $800,000 for Internet solutions. These capital expenditures
will further implement the DriveOff.com business model and increased network
activities for our Internet solutions business.

Cash used in our operating activities totaled $3.3 million for the six
months ended June 30, 1999, compared with $3.0 million for fiscal 1998 and $3.7
million for fiscal 1997. Cash used in our investing activities totaled $581,000
for the six months ended June 30, 1999, compared with $470,000 for fiscal 1998
and $500,000 for fiscal 1997. Cash used in our investing activities during those
periods consisted primarily of expenditures for property and equipment.

31
<PAGE> 34

Cash provided by our financing activities was $16.0 million during the six
months ended June 30, 1999. That amount was raised primarily through the
issuance of our common stock as a result of warrants and options being
exercised, which generated $16.9 million. Cash used in financing activities for
the quarter June 30, 1999 consisted of advances from factoring arrangements of
$257,000, less repayments of $460,000, and the repayment of notes payable of
$748,000. Cash provided by our financing activities was $3.9 million in fiscal
1998. This compares to cash provided by our financing activities in fiscal 1997
of $4.3 million. In connection with the Wells Fargo transaction, in August 1999
we expect to receive approximately $23.8 million. We plan to fund our operations
during 1999 with funds from this offering, funds from the Wells Fargo
transaction, funds from continuing operations and funds from the recent call of
our warrants.

We believe that our available cash resources, combined with the net
proceeds of this offering and the Wells Fargo transaction, will be sufficient to
meet our anticipated working capital and capital expenditure requirements for at
least the next 12 months. If, however, our capital requirements or cash flow
vary materially from our current projections or if unforeseen circumstances
occur, we may require additional financing sooner than we anticipate. Failure to
raise necessary capital could restrict our growth, limit our development of new
products and services or hinder our ability to compete. See "Risk Factors -- We
may be required to seek additional financing. If additional financing is not
available to us, we may have to curtail our operations."

Through June 30, 1999, we had a net operating loss of $9.5 million. Our
ability to utilize these net operating loss carryforwards to offset future
taxable income will be limited, possibly significantly, by certain provisions of
the Internal Revenue Code of 1986, and, in particular, Section 382 of the Code
relating to certain ownership changes of corporations which have losses. We
believe that it is more likely than not that a significant portion of the
benefits of these net operating loss carryforwards (i.e., deferred tax assets)
will not be realized. Accordingly, a valuation allowance has been recorded
against the entire deferred tax asset as of December 31, 1998 in our financial
statements for the period then ended.

YEAR 2000 COMPLIANCE

Many existing computer programs use only two digits to identify a year in
the date field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, such
computer applications could fail or create erroneous results by or at the Year
2000. We are currently identifying which of our information technology and
non-information technology systems will be affected by Year 2000 issues.

Our Year 2000 compliance program consists of three phases: identification
and assessment, remediation and testing. For any given system, the phases occur
in sequential order, from identification and assessment of Year 2000 problems,
to remediation and, finally, to testing our solutions. However, as we acquire
additional businesses, each information technology and non-information
technology system of the acquired business must be independently identified and
assessed. As a result, all three phases of our Year 2000 compliance program may
occur simultaneously as they relate to different systems. Each phase may have a
varying timetable to completion, depending upon the system and the date when a
particular business was acquired by us.

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<PAGE> 35

We have completed the identification and assessment of most of our
information technology systems, and those systems address or have been modified
to address Year 2000 problems. We will continue to assess the information
technology systems of businesses that we may acquire in the future. We are in
the identification and assessment phase with respect to non-information
technology systems of currently-owned businesses. We have received assurances
from our vendors and suppliers that their products and businesses are Year 2000
compliant. However, we have no direct control over these third parties and
cannot assure you that any third-party software and hardware systems will be
timely converted. The failure of certain individual vendors or suppliers, or a
combination of vendors or suppliers, to make their systems Year 2000 compliant
could have a material adverse effect on our financial results.

We anticipate completing all phases of our Year 2000 compliance program by
September 30, 1999, with the possible exception of the remediation and testing
phases for certain of our non-information technology systems.

In addition, we rely on third party network infrastructure providers to
gain access to the Internet. If such providers experience business interruptions
as a result of their failure to achieve Year 2000 compliance, our ability to
provide our services could be impaired, which could harm our business, financial
condition and operating results.

Our costs to date for our Year 2000 compliance program have not been
material. Although we have not completed our assessment of non-information
technology systems, we do not currently believe that the future costs associated
with our Year 2000 compliance program will be material.

We are currently unable to determine our most reasonably likely worst case
Year 2000 scenario, because we have not identified and assessed all of our
non-information technology systems. Because most of our information technology
systems address or have been modified to address Year 2000 problems and because
we do not have significant non-information technology systems, we do not
anticipate that the Year 2000 will have a significant impact on our operations.
However, a failure to address all of our Year 2000 issues successfully could
have a material adverse effect on our business, results of operations and
financial condition.

OTHER RECENT ACCOUNTING PRONOUNCEMENTS

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use," which provides guidance on
accounting for the cost of such software. SOP No. 98-1 is effective for
financial statements for fiscal years beginning after December 15, 1998. The
adoption of SOP No. 98-1 in fiscal 1999 did not have a material impact on the
financial statements.

In April 1998, the AICPA issued SOP No. 98-5, "Reporting on the Costs of
Start-Up Activities." In general, SOP No. 98-5 requires costs of start-up
activities and organization costs to be expensed as incurred and specifies that
initial application of SOP No. 98-5 should be reported as the cumulative effect
of a change in accounting principle. The provisions of SOP No. 98-5 are
effective for fiscal years beginning after December 15, 1998. The adoption of
SOP No. 98-5 in fiscal 1999 did not have a material impact on the financial
statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." We are required to adopt SFAS No. 133, as
amended by SFAS

33
<PAGE> 36

No. 137 in June 1999, in the year ended December 31, 2001. SFAS No. 133
establishes methods of accounting for derivative financial instruments and
hedging activities related to those instruments as well as other hedging
activities. We do not believe adoption of SFAS No. 133 will have a material
impact upon its financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

INTEREST RATE

Our exposure to market risk for changes in interest rates relates primarily
to our investment portfolio and long-term debt obligations. We do not use
derivative financial instruments in our investment portfolio. We place our
investments with high credit quality issuers to minimize principal loss, default
risk, market risk and reinvestment risk. As of June 30, 1999, our investments
consisted of short-term money market funds and commercial paper.

Our interest expense is sensitive to changes in the general level of U.S.
interest rates. Our debt is fixed rate in nature and mitigates the impact of
fluctuations in interest rates. The fair value of our debt approximates the
carrying amount at June 30, 1999. We believe the potential effects of near-term
changes in interest rates on our fixed rate debt is not material.

INFLATION

We do not believe that inflation will have a material impact on our future
operations.

RECENT DEVELOPMENTS

On July 23, 1999, we entered into an agreement with WFC Holdings
Corporation, a subsidiary of Wells Fargo & Company, which provides for the
issuance of 380,000 shares of our common stock to Wells Fargo, at a price of
$10.00 per share, and a $6.2 million promissory note which is convertible into
620,000 shares of voting and non-voting common stock. The note is convertible at
any time, at the option of Wells Fargo, and automatically converts into
non-voting common stock upon the amendment of our Articles of Incorporation to
create a class of non-voting common stock, which is convertible at the option of
Wells Fargo, into voting common stock.

The note bears interest at an annual rate of three percent and, unless
converted, is payable in full on December 31, 2004. In the event that the note
is converted, all accrued interest will be forgiven. In addition to customary
default provisions, the note allows Wells Fargo to demand repayment of the
principal and accrued interest if our Articles of Incorporation have not been
amended to authorize non-voting common stock by December 31, 2000.
Alternatively, if our Articles of Incorporation have not been amended by
December 31, 2000, Wells Fargo may require us to redeem the note at a price
based on the average closing price of our common stock in the ten days preceding
the notice of redemption.

The closing of the transaction, which we expect to occur in August 1999, is
conditioned upon, among other things, a simultaneous investment by Wells Fargo
in DriveOff.com and the completion of a long term consulting agreement between
us and Wells Fargo and a marketing agreement between DriveOff.com and Wells
Fargo. Under the consulting

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<PAGE> 37

agreement, we will perform between $2.5 million and $10.0 million of Internet
solutions services for Wells Fargo over the next 24 months. Under the marketing
agreement, DriveOff.com will develop an affinity web site for Wells Fargo that
will utilize the DriveOff.com automobile purchasing solution and provide Wells
Fargo with exclusive rights to underwrite all related financing. The issuance of
our common stock and the convertible note to Wells Fargo will take place outside
of this offering in a private transaction. We have granted Wells Fargo demand
and "piggy back" registration rights with respect to our shares it receives in
this transaction. The impact of the Wells Fargo transaction is reflected in the
pro forma financial information contained in this prospectus.

The investment by Wells Fargo in DriveOff.com provides for the issuance of
a $15.0 million convertible promissory note by DriveOff.com to Wells Fargo. The
note bears interest at an annual rate of three percent and, unless earlier
converted, is payable in full on January 1, 2005. The note is convertible, at
any time, at the option of Wells Fargo, into 3,200,000 shares of voting and
non-voting preferred stock of DriveOff.com, representing 20% of the outstanding
capital stock of DriveOff.com. The note will automatically convert into
preferred stock upon the closing of an underwritten public offering of
DriveOff.com in which the gross proceeds are at least $15.0 million on or prior
to December 31, 2004. In the event that the note is converted, all accrued
interest will be forgiven. We have guaranteed the obligations of DriveOff.com
under this note.

The preferred stock issuable upon conversion of the note is convertible, at
Wells Fargo's option into shares of voting and non-voting common stock of
DriveOff.com. In the event of an initial public offering of DriveOff.com that
results in gross proceeds of at least $15.0 million, the preferred stock will
automatically convert into common stock. If DriveOff.com does not complete an
initial public offering prior to October 31, 2001, Wells Fargo may require
repayment of the principal and accrued interest of the note. The note will be
subordinate to up to $15.0 million of senior indebtedness. In addition, the note
will contain customary affirmative and negative loan covenants.

In connection with its investment in DriveOff.com, Wells Fargo will receive
a five year warrant exercisable one year after the closing for an additional
160,000 shares of voting and non-voting common stock of DriveOff.com at an
exercise price of $6.5625 per share. The common stock into which the note is
convertible, and for which the warrants can be exercised, will be sold in a
private transaction. DriveOff.com has granted Wells Fargo demand and "piggy
back" registration rights with respect to the DriveOff.com shares it receives in
this transaction.

For so long as Wells Fargo is subject to the Bank Holding Company Act of
1956, it has agreed not to exchange any of its non-voting stock for, or convert
any of its convertible securities into, voting stock of Navidec or DriveOff.com,
as applicable, if after giving effect to the exchange or conversion, it would
hold more than 5% of any class of voting securities of Navidec or DriveOff.com,
as applicable.

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<PAGE> 38

NAVIDEC'S BUSINESS

OVERVIEW

We are a provider and incubator of innovative Internet solutions and
services. Our combination of creative, technical and consulting expertise allows
us to design, build and manage comprehensive Internet solutions for a diverse
range of customers, which range from Internet start-ups to Fortune 1000
companies. Our focused approach enables our customers to rapidly move their
Internet operations from a basic web presence toward an integrated e-business.
We leverage our expertise to provide our customers with proven solutions and, in
some instances, to help them launch new Internet based businesses.

We employ our NPact methodology in all of our projects. The NPact process
helps our customers identify how the Internet can be optimally used to their
competitive advantage. NPact also enables customers to accurately determine the
necessary costs and time lines for implementing an integrated Internet solution.
Once the ultimate solution has been determined, NPact separates the assignment
into multiple fixed-price 90 to 120-day projects, each providing incremental
functionality. We incorporate our reusable software modules and packaged
Internet applications to ensure that our solutions are rapidly deployable,
highly reliable, scalable and cost effective.

By consulting, building and managing e-business solutions and services, we
are in a position to leverage our expertise to incubate vertical market Internet
businesses. Our subsidiary, DriveOff.com was incubated out of our online
automotive solutions division and our e-commerce business model expertise.
DriveOff.com currently operates USWheels.com, CarWizard.com, LeaseSource.com and
a network of affinity web sites, including CBS.CarWizard.com, which offer
automotive information, interactive decision tools and buying and leasing to
consumers. In the third quarter of 1999, DriveOff.com intends to launch an
innovative consumer-friendly web site that will allow consumers to research,
finance and purchase or lease an automobile online without negotiating with a
car salesperson. We believe the DriveOff.com web site will provide an automobile
purchasing solution that consumers and dealers will find to be superior to the
products currently available. DriveOff.com differs from its competitors, such as
Autobytel.com, Autoweb.com and Microsoft CarPoint, by delivering sales to
participating dealers rather than just selling leads. DriveOff.com believes that
this new business model will be more profitable than the existing lead
generation models.

INDUSTRY BACKGROUND

GROWTH OF THE INTERNET

The Internet has rapidly become a significant tool for global
communications and commerce, enabling millions of people to transact business
electronically. Improvements in network infrastructure, increasingly faster and
cheaper access to the Internet and the growing installed base of advanced
personal computers has fueled the growth of the Internet.

GROWTH OF E-BUSINESS SOLUTIONS

The Internet represents a revolutionary and powerful new opportunity for
business. Many Internet start-up companies are rapidly entering already
established markets. These companies

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<PAGE> 39

have an advantage over their traditional competitors as their business models do
not conflict with conventional "brick and mortar" models and their rapid
deployment is not hindered by the conversion or integration of existing
information technology systems.

As a result of these new entrants, many companies that do not currently
utilize the Internet are being forced to reevaluate their business models and to
adopt or supplement existing Internet-based solutions. Companies such as
Amazon.com, Inc. and eToys Inc. have challenged traditional competitors in their
industries and have transformed their respective marketplaces, forcing an
increasing number of traditional businesses to consider adopting Internet
solutions in order to take advantage of Internet efficiencies and compete
effectively.

As the use of the Internet as a new channel of distribution has grown, the
need to move rapidly from having a basic web presence to adopting a complete
model has grown. This progression can be illustrated through what we refer to as
the e-business transformation curve.

GRAPHIC WILL APPEAR HERE AND SHOW A GRAPH WITH "COMPLEXITY OF SOLUTION" ON THE
Y-AXIS AND "TIME" ON THE X-AXIS AND A CURVE OF THE STAGES OF INTERNET BUSINESS
DEVELOPMENT, FROM "BASIC PRESENCE" TO "PROSPECTING" TO "BUSINESS INTEGRATION" TO
"BUSINESS TRANSFORMATION"

CHALLENGES ASSOCIATED WITH CREATING AN E-BUSINESS SOLUTION

Companies seeking to successfully develop an e-business solution face many
challenges. Solutions can be highly complex and require high degrees of
architectural consulting, software development, creative design, system
infrastructure and project management expertise, as well as ongoing maintenance
and support.

Most internal information technology departments of traditional businesses
lack the personnel, technical capabilities and resources necessary to
cost-effectively develop and maintain complete Internet or e-business solutions.
Traditional businesses are facing competition from small, emerging
Internet-based competitors who are not hindered by the need to convert or
integrate existing information technology systems. However, many of these
smaller competitors do not posses the technology, e-business experience or
resources necessary to implement their strategies. The lack of internal Internet
resources along with time to market pressures, has led many large businesses and
Internet start-ups to retain Internet solution providers to assist with this
critical need to move their own business model further up the e-business
transformation curve. International Data Corporation projects that the worldwide
market for Internet services will grow from $7.8 billion in 1998 to $78.0
billion in 2003.

The growth of the Internet as a new channel of distribution has resulted in
several significant issues and opportunities for all types of businesses, as
well as e-business solutions providers. In addition to the technical components,
successful e-business solutions require business models that address brand and
imaging strategies and partnerships, as well as site content. Few Internet
solutions providers or in-house information technology departments are able to
provide the combined multidisciplined expertise necessary to rapidly develop and
implement complex Internet sites, which require highly technical and creative,
as well as project management skills. We believe the ability to offer a full
range of Internet services and solutions will increasingly become a competitive
factor as e-business operations continue to evolve and gain in complexity.

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NAVIDEC'S SOLUTION

Our development methodology, industry partnerships and e-business
experience enable us to design, build and manage highly complex Internet
solutions for both established and emerging companies. Our multidisciplined
expertise and experience enables our customers to move rapidly through the
e-business transformation process.

One of the key differentiating factors of our service is our ability to
deliver incremental functionality within 90 to 120-day periods on a fixed-price
basis, enabling our customers to rapidly deploy and scale their Internet
operations. Our use of reusable software modules and packaged applications
further accelerate our customers time to market and ensure our solutions are
highly reliable, secure and cost effective.

We provide fixed-price, fixed-time solutions and services using our NPact
methodology. The goal of NPact is to identify a customer's position on the
e-business transformation curve, rapidly architect, develop and deploy
appropriate solutions and services, and manage, as necessary, the application
development and operating environment. Specifically, NPact is comprised of four
stages:

- NSIGHT -- during which we consult with our customers in order to identify
their strategies, define project goals, project success criteria, timing and
budgetary issues.

- NVOLVE -- during which our technical staff works with the customer
collaboratively to assess, analyze and understand the existing business
environment and processes. Upon completion of the business process analysis,
we complete an architectural overview, which includes a detailed time line,
project milestones, design characteristics and fixed fees.

- NTRUST -- during which we build and test the infrastructure for the
solution, including hardware, software and any necessary support services.

- NABLE -- during which we provide end-user training, marketing and acceptance
testing, and necessary on-going support for successful project
implementation.

Each NPact team consists of a multi-disciplined group of e-business
architects, software developers, system engineers and creative designers. The
team is led and managed by a project manager who is responsible for delivering
the project solution within the specified time frame and budget constraints. By
assembling these multidisciplined teams of professionals, we are able to deliver
solutions to meet the specific needs of our customers through an understanding
of both their business objectives and the technology that is available to
achieve those objectives.

NAVIDEC'S STRATEGY

We believe that the rapidly increasing demand for comprehensive Internet
solutions, combined with the inability of most internal information technology
departments to develop, implement and manage their Internet environments, has
created a significant opportunity for Internet solutions providers.
Specifically, we believe there is demand for Internet solutions providers who
have the expertise and experience to effectively operate in a dynamic market
that is technically complex and has significant time to market constraints.

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<PAGE> 41

Our goal is to become the leading provider and incubator of innovative
e-business solutions and services. To achieve our objective, we are pursuing the
following strategies:

EXPAND GEOGRAPHICALLY. In order to broaden our customer base, we intend to
expand our geographic presence by establishing additional sales and
marketing offices in new regions and making selected, strategic
acquisitions.

INCREASE INTERNET CONSULTING. Although Internet consulting directly
generates only a small percentage of our revenues, we believe that Internet
consulting is an important service offering that is increasingly being
demanded by customers. We believe that we can leverage our Internet
solutions consulting expertise into engagements to build and manage
Internet and e-commerce solutions for customers.

EXPAND OUR PRESENCE AS AN APPLICATION SERVICE PROVIDER. An increasing
number of our clients are realizing the need to outsource both Internet
application development and actual management of the Internet application
environments once the solutions have been deployed. Our expertise as an
Internet solutions provider positions us to leverage these opportunities.
We plan to partner with key Internet service providers to offer additional
hardware, service and support capabilities.

EXPAND THE DEPTH OF CLIENT RELATIONSHIPS. We have solid relationships with
a large customer base. We plan to leverage our strong reputation, industry
expertise and technical skills to expand the scope of our current customer
relationships and, in the process, become our customers' primary Internet
solutions consultant. This will enable us to move our customers more
rapidly through the e-business transformation process, which will produce
higher margin services and generate projects with recurring revenue
streams.

CONTINUE TO DEVELOP TECHNICAL CAPABILITIES. We have significant Internet
solutions capabilities which we use to deliver comprehensive e-business
solutions and services. We intend to continue to expand our technical
capabilities and strategic partnerships to enable us to deliver
time-critical and mission-critical solutions and to meet the changing needs
of our customers. We will continue to develop software applications that
can be reused in order to deliver solutions rapidly, reliably and
cost-effectively.

CONTINUE TO ATTRACT AND RETAIN EXPERIENCED PROFESSIONALS. Our success to
date is due in large part to our ability to attract and retain experienced
professionals. We will continue to recruit professionals from major
consulting firms, creative design firms and information technology services
firms, as well as from other Internet solutions providers. We will continue
to maintain a team-driven and results-oriented culture that is attractive
to energetic, talented professionals and that fosters innovation and
creativity.

CONTINUE TO INCUBATE NEW BUSINESSES. We intend to continue to leverage our
technical expertise with acquired knowledge of certain business sectors to
grow and launch new business ventures. We believe successful e-businesses
require capital, industry knowledge, personnel and technology. We intend to
partner with companies with complementary expertise to cooperatively
incubate and launch new businesses. We will carefully select these
opportunities, which may be pursued through equity investments,
acquisitions, or strategic alliances.

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<PAGE> 42

NAVIDEC'S SERVICES

We provide integrated consulting, development, infrastructure and
application environment management services to support our customers' time
sensitive and mission-critical Internet business objectives.

Our consulting services include expertise and experience regarding Internet
business model development and implementation, infrastructure support, effective
project definition and scheduling, site branding, image, design and
functionality. In addition, our services address environment outsourcing,
management strategies and cost benefit analysis.

Our solutions typically include many of the following components:

- graphic design;

- integrated marketing;

- integrating legacy systems;

- messaging infrastructure;

- private intranets;

- project management;

- web distribution strategies; and

- web site specifications.

Our development services include expertise and experience in rapid design,
build and deployment of Java-based, open system e-business solutions such as web
sites, intranets and extranets. We also provide marketing and media services
such as digital image capture, post-processing services for scanned images and
graphic arts production. We build reusable software modules and products as well
as integrate packaged Internet solutions. We build and deploy complete projects
and project modules typically in 90 to 120-day time frames to show discernible
movement up the e-business transformation curve for our clients. In addition to
building comprehensive e-business solutions, our services include extensive
expertise and experience in designing, implementing and integrating open system
mail messaging infrastructure support and solutions. Finally, our development
services provide design, integration and deployment of hardware systems to
maximize the operation of our application solutions. The hardware component of
the business enables us to provide a complete solution which ensures quality
service, time effective implementation and accountability.

Our Internet environment management services include providing application
services for a number of our customers. Our environment management services
include the following:

- electronic messaging implementation;

- database management;

- hosting of web sites on our Internet server;

- network implementation;

- product support;

- technical support; and

- web site maintenance and evolution.

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<PAGE> 43

We build and manage cost effective outsourcing solutions for our clients
enabling them to focus their efforts on their core competencies. In addition, we
offer training modules for clients seeking to build enterprise, Java-based,
Internet development environments.

NAVIDEC'S INTERNET SOLUTIONS CUSTOMERS

Since our inception we have implemented solutions for over 200 customers.
The following customers are examples of the types of engagements that we have
successfully completed and which represent various stages on the e-business
transformation curve.

BASIC E-COMMERCE INTERNET PROSPECTING -- We developed a site for Pentax
Corporation that enabled its customers to research product features for its
cameras, binoculars, lenses and accessories. We created a web-based update tool
that allowed Pentax to instantaneously update the site with changes to product
features and pricing. The site was recently named one of Lycos' "Top 5%," a
selective directory of top-shelf web sites.

BASIC E-COMMERCE INTERNET PROSPECTING -- Richmond American Homes, a
division of M.D.C. Holdings, Inc., one of the nation's largest home builders,
started as a customer seeking a basic Internet presence. Richmond needed to
develop a site which would enable them to target new customer audiences and
provide a new information source for potential home buyers and investors. By
working with Richmond, we developed a web site which used Java applets to create
crisp visuals and simple site navigation. The site was also designed to interact
with a Sybase relational database which enabled Richmond to automate its
inventory updates through its internal system. Richmond is in the process of
implementing our system in eight states nationwide. To date, the site has
contributed to over $20 million in new home sales.

BUSINESS INTEGRATION -- Verio Corporation is the world's largest domain
based web host and one of the largest Internet service providers in the United
States. Through a number of acquisitions, Verio inherited a highly dysfunctional
internal e-mail architecture. Navidec, in conjunction with Netscape, converted
42 disparate e-mail systems into a unified Netscape solution. As part of this
process, we have rebuilt Verio's infrastructure to enhance its ability to store,
backup and more effectively manage its customer's e-mail and large file
attachments. The cost savings for Verio are projected to be substantial.

BUSINESS INTEGRATION -- Columbine JDS Systems, Inc. is a national leader in
distributing invoices between broadcast outlets and advertising agencies. We
have worked with Columbine JDS to transform their operations to a complete
e-business model. Our solution, which required extensive integration into legacy
application systems, along with security for online transactions, enabled
Columbine JDS to make its entire billing system completely paperless and secure.
In addition to generating substantial cost savings, Columbine JDS expects that
this new system will enable it to attract new customers.

BUSINESS TRANSFORMATION -- DriveOff.com is an example of how we have
incubated an Internet business by applying our technical capabilities with our
industry expertise. In this case, as a result of the automotive industry
expertise that we developed through our USWheel.com, CarWizard.com and
LeaseSource.com web sites, we launched a vertically integrated business that
combines advanced interactive technology with research, financial and
administrative services, and a nationwide automobile dealership network to
provide a consumer-friendly automobile purchasing solution. See
"DriveOff.com -- Incubating Our First Vertical Market Business."

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STRATEGIC BUSINESS PARTNERSHIPS AND TECHNOLOGY

We are one of only 14 Authorized Java Development Centers in the United
States. Combining our Java expertise with our application server, database and
mail messaging expertise, we build reusable software modules and integrate
packaged Internet Solutions. We also develop solutions using HTML, XML, Perl and
other proven technologies. We apply these solutions to our own products, to our
corporate customer base and to other e-businesses that have ideas and concepts
requiring technological expertise.

We have developed and maintain industry partnerships with Internet
companies such as Sun Microsystems, Inc., Netscape Communications Corporation,
BEA Weblogic, Inc., Oracle Corporation, Vignette, Inc., Netegrity, Inc. and
Object Design, Inc. Our focus on a limited set of partners enables us to keep
high visibility with our critical vendors and provides us the opportunity to
commit extensive training resources to maintain and grow product competency and
expertise.

In addition to our e-business development capabilities, we have significant
Internet infrastructure support expertise including light directory application
protocol, digital certificates and messaging. Our certifications and
qualifications include Sun Elite status, Sun Level 2000 Competency, Authorized
Netscape Premier Partner, Authorized Netscape Professional Services
Subcontractor, Authorized BEA Weblogic Service Partner, Authorized Oracle
Alliance Partner and Professional Services Subcontractor, Object Design
Developer and Reseller, as well as Macromedia experts.

Because of our strategic relationships, and the large number of additional
third-party technologies that are available to us, we are not dependent upon any
single technology to provide our services. We are in a position to choose from
multiple suppliers to incorporate the most appropriate technologies and products
for each NPact process. Because third-party providers typically license their
software directly to our customers, we are not at risk of losing individual
licenses that are necessary for our services.

SALES AND MARKETING

Our sales efforts target clients in market segments seeking to leverage the
Internet's potential and move rapidly up the e-business evolution curve. Our
direct sales force is primarily responsible for identifying prospects, engaging
potential users of our solutions and services and maintaining and growing the
client relationship. Over the next 12 months, as we increase our development
capacity and expand our consulting and application service provider services, we
expect to significantly grow our regionally focused, 18 person sales force to a
national presence.

The role of our marketing program is to create and sustain brand
identification, preference and loyalty. Our marketing department has
responsibility for communications, advertising, public relations and our
website. As we expand our business model to a national presence, we will grow
our corporate marketing organization to facilitate the expansion of our
branding, preference and loyalty strategy. We will grow our corporate marketing
organization to help the sales force identify and engage new clients and sustain
and grow relationships with our current customer base.

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NAVIDEC'S INCUBATION PROCESS

In the course of providing Internet solutions to our customers, our ability
to utilize reusable software modules and leverage expertise within vertical
markets continues to grow. In addition to providing accelerated time-to-market,
proven solutions for our clients, we will opportunistically seek to incubate
selected businesses, either through partnerships with our customers,
acquisitions of businesses in particular sectors or the development of our own
businesses. Our incubation process combines our technology and Internet
solutions with the personnel and capital to create a successful new business
venture.

GRAPHIC WILL APPEAR HERE AND SHOW "TECHNOLOGY," "PERSONNEL," "$$$" AND "INDUSTRY
EXPERIENCE" WITH ARROWS LEADING TO ".COM."

DRIVEOFF.COM -- INCUBATING OUR FIRST VERTICAL MARKET BUSINESS

THE INCEPTION. DriveOff.com is the culmination of four years' experience
developing Internet automotive solutions. In 1995, we were hired by the Burt
Automotive Group, based in Denver, Colorado, to design a web site for the
group's dealerships. The Burt site began producing sales for Burt on the order
of 50 to 75 units per month at a time when, we believe, the average dealer web
site was yielding five to ten sales per month. In light of its success with the
Burt site, we created a vertical product named USWheels.com. The "Wheels"
solution offered dealers leads from regional Wheels web sites that harvested and
posted new and used dealer inventory every 24 hours. At the end of 1998, we
merged with LeaseSource Online, Inc. and CarWizard, Inc., and acquired valuable
auto buying and leasing content to supplement our inventory-based automotive
solution.

MARKET UNDERSTANDING: THE NEED FOR A COMPLETE SOLUTION. Like many of our
business clients, the automotive division was still in the early stages of
Internet development at the end of 1998. Our automobile web sites were initially
harvesting customer leads and selling them to affiliated dealers, as most of our
competitors continue to do. Our market research revealed significant
dissatisfaction among consumers who used the Internet to research a vehicle,
only to be cast back into the traditional sales process by having their name
sold to a participating dealer. From the dealers' perspective, as Internet auto
companies have captured an increasing number of customers, there has been
increasing pressure on dealers to purchase customer names in order to maintain a
competitive market position.

BUSINESS TRANSFORMATION. Leveraging our industry and technological
expertise, we created DriveOff.com to significantly alter and improve the way in
which consumers purchase (or lease) automobiles. The DriveOff.com web site will
provide a complete automotive solution that enables consumers to research,
price, finance and purchase or lease a new automobile, completing substantially
all of the transaction from the DriveOff.com web site, with no dealer
interaction until delivery of the vehicle. Through an exclusive association with
IADMA, DriveOff.com will provide dealers an opportunity to meaningfully
participate in the Internet automotive arena without having to pay lead or
referral fees. DriveOff.com will provide IADMA member dealers with closed sales,
not leads. DriveOff.com will generate revenue by delivering vehicle sales to
dealers, as compared to the revenue model of our competitors which consists of
selling leads. DriveOff.com believes this revenue model will be more profitable
than the existing lead generation models.

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GRAPHIC WILL APPEAR HERE AND SHOW THE STEPS ON THE DRIVEOFF.COM WEB SITE WITH
THE WORDS "LOG ON," "CONFIGURE IT," "PRICE IT," "REQUEST IT," "TRACK IT," "GET
IT" AND "DRIVE OFF" STACKED ON TOP OF EACH OTHER.

HOW DRIVEOFF.COM WORKS. Upon entering the DriveOff.com web site, or any of
its affiliated web sites, customers will navigate through five easy steps to
receive their vehicle.

STEP 1: RESEARCH THE VEHICLE USING THE AUTO LIBRARY. The Auto Library will
provide users with professional-grade automobile research to make
an informed purchase decision. Available information will include:

- pricing, technical, safety, warranty, incentive and optioning
information, which is customarily used by dealers, fleet
administrators and leasing companies to price and option
vehicles, as well as professional driving reviews;

- standard auto leasing residual values and average money factors
which enable consumers to conduct impartial comparisons of
DriveOff.com lease deals;

- proprietary data and guidance with respect to the auto leasing
process; and

- search functionality, which allows consumers to compare or
search for vehicles and available options.

STEP 2: PRICE THE VEHICLE WITH REAL QUOTE. Real Quote will allow users to
configure the vehicle of their choice using a professional-grade
pricing and optioning tool. Users will then receive definitive
price, loan and lease payment information. By providing no more
than a zip code, customers will be able to obtain binding monthly
payment quotes, subject only to credit approval. Real Quote will
filter shoppers who are not ready to buy, saving the time and
expense typically incurred when filtering "price quote shoppers."
We believe this tool will provide significant value while
unobtrusively and effectively drawing buyers into the purchase
process.

STEP 3: REQUEST THE VEHICLE. After receiving a quote, a user will be able
to review a full transaction disclosure page, submit a DriveOff
Deal Request and provide a deposit either electronically or via
telephone. Users may select a convenient time for a deal
administrator to contact the user by telephone. If users elect to
apply for either a lease or loan, they will complete an online
credit application in order to qualify for the payment quoted
online.

STEP 4: TRACK THE VEHICLE USING THE PERSONAL AUTO CENTER. Unique to
DriveOff.com, the Personal Auto Center will provide a user with the
ability to monitor the status of the user's purchase (or lease).
The password-protected Personal Auto Center will track the key
elements of the user's deal, such as vehicle specification changes,
credit approval and delivery status and will serve as the primary
means for the user to initiate communication directly with
DriveOff.com's customer service center.

STEP 5: DRIVE OFF WITH THE VEHICLE: THE "DEAL KIT." Once a user's credit
application is accepted and the user approves the vehicle,
DriveOff.com will deliver the user a Deal Kit via overnight mail.
The Deal Kit will contain all of the legal documents necessary for
the user to take delivery of the specific vehicle approved online.
Having the Deal Kit ahead of time will allow users to

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<PAGE> 47

review the entire transaction conveniently before taking delivery
of the vehicle. In order to complete the purchase, the user will
simply bring the Deal Kit to the participating dealer, execute the
documents and drive off.

FROM THE CONSUMER'S PERSPECTIVE. As compared to other auto buying services
on the Internet, DriveOff.com distinguishes itself with a package of
consumer-oriented features that make the automobile buying experience easier and
allow the consumer to maintain control over the buying process.

<TABLE>
<CAPTION>
DRIVEOFF.COM AUTOBYTEL AUTONATION AUTOWEB AUTOVANTAGE CARSDIRECT CARPOINT
<S> <C> <C> <C> <C> <C> <C> <C>
All Makes & Models - - - - - - -
Accurate Options
Configuration Tool - - -
Binding Online Payment
Quotes -
Full Online Deal
Disclosure -
Live Deal Tracking -
Integrated Financing - -
Original Closing
Documents -
No Dealer Negotiations - - -
Professional Auto Leasing
Data & Advice* -
Research & Reviews - - - - - - -
Nationwide Coverage (as
of August 1999) - - - - -
</TABLE>

- -------------------------
* Information and advice that is recommended or used by professionals in the
automotive or finance industries.

FROM THE DEALER'S PERSPECTIVE. Since 1995, dealers have lost many of their
customers to Internet automotive sites such as Microsoft CarPoint, Autobytel.com
and AutoWeb.com. Customers are primarily visiting national automotive portals
rather than local dealership sites to obtain information when shopping for a new
automobile. Without a unified national presence, there is little that any
individual dealer or dealer group can do to effectively compete against large
Internet services. As a result, these dealers have been purchasing leads from
these large Internet services. By joining IADMA, dealers secure the services of
a national automotive portal on a long-term, exclusive basis, giving them the
ability to compete on the Internet.

STRATEGIC RELATIONSHIPS. In the second quarter of 1999, DriveOff.com
facilitated the formation of IADMA, 85% of which is owned by its member dealers
and 15% of which is owned by DriveOff.com. DriveOff.com expects to enter into a
ten-year marketing and services agreement with IADMA that will require all
vehicle purchases generated from the DriveOff.com web site to be delivered to
IADMA member dealers. IADMA will provide its members a national Internet
presence through DriveOff.com. Rather than paying a service for unfiltered and
often unqualified leads, dealers who participate in IADMA will receive
incremental sales from DriveOff.com, with no accompanying lead fees, monthly
fees or subscription fees.

DriveOff.com has established a long-term relationship with Westar Financial
Services Corporation, Inc. through which Westar will provide complete financial
administration as well as lease and loan origination services. Westar will
function as a financial clearinghouse for

45
<PAGE> 48

DriveOff.com, assuming responsibility for all financial aspects of the
transactions originating from DriveOff.com.

In addition, DriveOff.com and Westar have entered into an agreement with
First Union National Bank under which First Union has agreed to purchase up to
$1.0 billion per year in auto loans originating from DriveOff.com.
DriveOff.com's relationships with Westar and First Union will allow it to
integrate complete financing capabilities into the automobile acquisition,
providing a one-stop source for vehicle selection and financing.

DRIVEOFF.COM'S AFFINITY PROGRAM. DriveOff.com intends to draw customers
and extend its reach through conventional media, Internet media and a
content-rich affinity program. Although DriveOff.com will devote substantial
resources to establishing brand awareness through conventional and Internet
advertising and public relations efforts, affinity relationships represent the
cornerstone of its marketing strategy. DriveOff.com has the right to license for
publication its entire Auto Library. Accordingly, DriveOff.com can provide
privately branded or co-branded auto buying services on the web sites of
Internet portals, large corporations, such as Wells Fargo, professional
associations and credit unions. Rather than paying for ads or links from these
affinity sites, DriveOff.com's affinity program generates low-cost, but
widespread, distribution through the placement of content on the web sites of
its affinity partners. Depending on the web site, DriveOff.com's Auto Library
generates 12 to 16 page views per visitor. As a result, DriveOff.com offers its
affinity partners the ability to generate significant advertising revenue by
having the Auto Library content on their sites. At the same time, it allows the
affinity partner to offer valuable content and service to its user base.

DriveOff.com's affinity program is particularly attractive to credit
unions. Like any other indirect auto lender, credit unions have little control
over their customers once they visit the dealership's finance and insurance
department. Often, the finance and insurance manager will "flip" customers from
their credit union financing source to another source, typically one that has a
more favorable commission for the manager. DriveOff.com's central financing
model allows it to guarantee affiliated credit unions that every sale or lease
originating from their co-branded site will be financed through them.
DriveOff.com also features a simple affinity partnership, which permits smaller
sites to link to DriveOff.com and receive a fee for each completed deal request
referred by the partner site. DriveOff.com enrolls simple affinity partners
through an automated web-based process.

Financial relationships with affinity partners can generate advertising
revenue, monthly content license fees and leads for DriveOff.com. Most
relationships will also provide for lead fees to the affinity partner.

In addition to affinity sites, DriveOff.com will draw leads directly from
its USWheels.com, CarWizard.com, CBS.CarWizard.com and LeaseSource.com sites.
With little advertising, these sites delivered more than 60 million page views
and 55,000 purchase requests during the first six months of 1999.

WELLS FARGO & COMPANY. In connection with Wells Fargo's investment in
DriveOff.com, a marketing agreement is being negotiated with respect to Wells
Fargo's affinity site.

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<PAGE> 49

COMPETITION

INTERNET SOLUTIONS. The Internet solutions business is in an increasingly
competitive environment populated by a large number of regional firms and
national operations providing similar services to Navidec. We believe our
competition approaches the business of Internet solutions from a variety of
disciplines ranging from the technical expertise of the consulting divisions of
the Big Five accounting firms to the image and creative expertise of major
advertising agencies. Additionally, there are a variety of direct competitors
including interactive agencies, such as Razorfish, Inc. and Agency.com, that use
digital technologies to enhance communications and interactions between
individuals and businesses and "e-builders," such as Scient Corporation, Sapient
Systems, Inc., USWeb Corporation and iXL Enterprises, Inc., that provide
Internet strategy consulting and Internet-based solutions to businesses. Other
potential competitors to our business include browser software vendors, personal
computer and Unix software vendors and online service providers. Additional
competition results from numerous client/server companies, database companies,
multimedia companies, document management companies, networking software
companies, network management companies and educational software companies. Many
of our competitors have longer operating histories, greater name recognition,
larger customer bases and significantly greater financial, technical and
marketing resources than we do. Competitive factors in the Internet solutions
business include core technology, breadth of services offered, creative and
artistic ability, marketing and distribution resources, customer service and
support and price.

DRIVEOFF.COM. The market for vehicles and vehicle-related products and
services is highly competitive, and DriveOff.com expects competition to increase
significantly, particularly on the Internet. Competitors include AutoWeb.com,
Cendant's AutoVantage, Autobytel.com, AutoNation, CarsDirect and Microsoft's
CarPoint. In addition, all the major vehicle manufacturers own and operate web
sites and many have recently launched or announced plans to launch online buying
services, including General Motors' BuyPower. Sites for electronic classified
ads, as well as vehicle-related products and services, are also proliferating.
While DriveOff.com expects to benefit from its relationship with IADMA and its
strategic partners, it could face substantial competition in the future from
large dealer groups which may choose to compete in e-commerce. In addition to
direct competitors, DriveOff.com competes indirectly with vehicle brokerage
firms, discount warehouse clubs and automobile clubs. Also, several auction
Internet sites have recently announced their intention to auction vehicles on
the Internet.

PRODUCT DISTRIBUTION

We serve both as a national manufacturer's representative for the products
of certain international manufacturers and as a reseller of selected computer
products in the Rocky Mountain region. We focus our distribution efforts towards
selling specialized, higher margin products.

Distribution activities usually involve our receipt of orders for equipment
from prospective purchasers and our delivery and/or installation of the
equipment. We purchase the equipment directly from the manufacturer or vendor
and resell it to the purchaser at a price which includes the cost and a profit
margin. With the exception of graphics supplies and certain imported components,
we do not generally maintain an inventory of products we distribute. We
specialize in distributing electronic components, printers and printer supplies.

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<PAGE> 50

Because product distribution is not related to our core strategy, we do not
intend to commit any significant resources to this line of business.

REGULATORY UNCERTAINTIES AND GOVERNMENT REGULATION.

There are currently few laws or regulations which apply directly to the
Internet. Due to the increasing popularity of the Internet, however, it is
likely that a number of laws and regulations may be adopted at the local, state,
national or international levels with respect to commerce over the Internet,
potentially covering issues such as the pricing of services and products,
advertising, user privacy, intellectual property, information security, or anti-
competitive practices. In addition, tax authorities in a number of states are
currently reviewing the appropriate tax treatment of companies engaged in
Internet commerce. New state tax regulations may subject us to additional state
sales, use and income taxes. Because our business is dependent on the Internet,
the adoption of any such laws or regulations may decrease the growth of Internet
usage or the acceptance of Internet commerce which could, in turn, decrease the
demand for our services and increase costs or otherwise have a material adverse
effect on its business, results of operations and financial condition. To date,
we have not spent significant resources on lobbying or related government
affairs issues but we may need to do so in the future.

DriveOff.com's operations may be subject, both directly and indirectly, to
various laws and regulations. Government authorities may also take the position
that federal and/or state automobile brokerage laws, insurance licensing laws,
motor vehicle dealership laws or related consumer protection or product
liability laws apply to aspects of DriveOff.com's business. As DriveOff.com
introduces new services and expands its operations to other countries, it will
need to comply with additional licensing and regulatory requirements. Due to the
increasing popularity and use of the Internet, it is possible that a number of
new laws and regulations may be adopted with respect to this rapidly developing
environment for conducting business. DriveOff.com believes that its relationship
with dealers is not subject to the coverage of state motor vehicle dealer
licensing laws. DriveOff.com also believes that its dealer marketing service
does not qualify as an automobile brokerage activity and therefore state broker
licensing requirements do not apply to it. In the event that any state's
regulatory requirements impose additional requirements on DriveOff.com or
include DriveOff.com within an industry-specific regulatory scheme, DriveOff.com
may be required to modify its marketing programs in such states in a manner
which may undermine the program's attractiveness to consumers or dealers. In the
alternative, if DriveOff.com determines that the licensing and related
requirements are overly burdensome, it may elect to terminate operations in such
state.

DriveOff.com may need to apply for financial broker licenses and it may be
an expensive and time-consuming process that could divert the efforts of
management from day-to-day operations. In the event states require DriveOff.com
to be licensed and DriveOff.com is unable to do so, or are otherwise unable to
comply with regulations required by changes in current operations or the
introduction of new services, its business, results of operations and financial
condition could be materially and adversely affected. DriveOff.com may market
insurance on-line, which may require it to be licensed under state insurance
laws. The use of the Internet in the marketing of insurance products, however,
is a relatively new practice. It is not clear whether or to what extent state
insurance licensing laws apply to activities similar to DriveOff.com's. If
DriveOff.com was required to comply with such licensing laws, compliance could
be costly or not possible. This could have a material adverse effect on its
business, results of operations or financial condition.

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<PAGE> 51

EMPLOYEES AND CULTURE

As of July 31, 1999, we had a total of 100 employees, of which 63 were
exclusively or primarily devoted to the Internet solutions business, 35 were
devoted exclusively or primarily to the DriveOff.com business and 2 were
exclusively devoted to the product distribution business. None of our employees
are represented by a labor union and we believe that our employee relations are
excellent. We recognize that our employees are the key to our continued success.
Our goal is to provide every employee with an environment for professional
growth and development. We believe that intelligent and motivated individuals
achieve their fullest potential by collaborating with high-caliber professionals
in a work environment charged with creativity and innovation. We also believe
that individual learning is accelerated when the firm's collective knowledge and
experience is shared in a team environment that is stimulating, challenging and
fun.

RECRUITING. We dedicate significant resources to our recruiting efforts. A
majority of our new hires come from referrals by current employees. We believe
that our existing employees are an excellent recruiting resource and we reward
employees that bring new people into the organization. We believe that the
success of our employee referral program is a direct reflection of employee
satisfaction. In addition to seeking qualified referrals, we actively recruit
from many of the country's leading graduate and undergraduate programs and
through professional search firms.

TRAINING AND DEVELOPMENT. Our training and professional development
programs advance the skills of employees and enable us to deliver high-quality
services to our clients. Our goal is to ensure that each professional in our
organization has the opportunity to develop the skills necessary to grow
professionally and to serve our customers' needs.

COMPENSATION. Our compensation program has been structured to attract and
retain highly skilled professionals by offering competitive base salaries with
performance based incentives. In addition, key employees may receive stock
options upon commencement of employment and may receive additional options based
upon performance.

FACILITIES

Our operations are principally located at 14 Inverness Drive, Suite F-116,
Englewood, Colorado in a 13,000 square foot facility, which includes
approximately 1,500 square feet of warehouse space. The facility is leased for
an additional two years. Navidec expects to lease additional office space as
needed in connection with the growth of its core business and of DriveOff.com.

LEGAL MATTERS

We are currently not involved in any material legal proceedings.

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<PAGE> 52

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission. Certain information in the
registration statement has been omitted from this prospectus under the rules of
the SEC. Accordingly, you should refer to the registration statement and its
exhibits for further information about us and this offering.

We are a reporting company and file annual reports, quarterly reports and
current reports, proxy statements and other information with the SEC. Our file
number is 0-29098.

You may read and copy materials that we have filed with the SEC, including
the registration statement, at the following SEC public reference rooms:

<TABLE>
<S> <C> <C>
450 Fifth Street, N.W. Northwest Atrium Center 7 World Trade Center
Room 1024 500 West Madison Street Suite 1300
Washington, D.C. 20549 Suite 1400 New York, New York 10048
Chicago, Illinois 60661
</TABLE>

You can call the SEC at 1-800-732-0330 for further information about the
public reference rooms.

We are required to file electronic versions of these documents with the
SEC. Those documents may be accessed through the SEC's Internet site at
http://www.sec.gov. Our common stock is quoted on the Nasdaq SmallCap Market.
Reports, proxy and information statements and other information concerning us
may also be inspected at the Nasdaq Stock Market at 1735 K Street, NW,
Washington, D.C. 20006.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to incorporate by reference the information we file with
them, which means we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to
be part of this prospectus, and information that we file later with the SEC will
automatically update and supersede the information in this prospectus.
According, the following documents are incorporated by reference.

1. Our annual report on Form 10-KSB for the year ended December 31, 1998.

2. Our quarterly reports on Form 10-QSB for the quarters ended March 31,
1999 and June 30, 1999.

3. Our current reports on Form 8-K reporting events dated each of January
7, 1999, March 1, 1999, March 10, 1999 and July 29, 1999.

4. The description of our no par value common stock which is contained in
our registration statement on Form 8-A filed with the SEC on January 28,
1997.

All documents subsequently filed by us with the SEC pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 before the
termination of the offering shall be deemed to be incorporated by reference into
this prospectus.

We will provide, without charge, to each person to whom a copy of this
prospectus is delivered, on the written or oral request of the person, a copy of
any or all of the documents incorporated into this prospectus by reference,
other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the documents that this prospectus incorporates.
Written or telephone requests for those copies should be directed to our office:
Navidec, Inc. 14 Inverness Drive, Suite F-116, Englewood, Colorado 80112, (303)
790-7565. Persons requesting copies of exhibits that were not specifically
incorporated by reference in such documents will be charged the cost of
reproduction.

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<PAGE> 53

MANAGEMENT

The following table shows the name, age and position of each officer and
director of Navidec.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
J. Ralph Armijo....... 45 President, Chief Executive Officer, and Director
Patrick R. 35 Chief Financial Officer, Treasurer, Secretary and
Mawhinney........... Director
Kenneth P. Bero....... 45 Chief Operating Officer
Brad E. Nixon......... 39 Vice President -- Technology
Greg Hanchin.......... 39 Vice President -- Sales
Michael S. Kranitz.... 38 Director
Andrew S. Davis....... 46 Director
Lloyd G. Chavez, 48 Director
Jr..................
Gerald A. Marroney.... 46 Director
James E. Hosch........ 45 Director
</TABLE>

Our officers are elected by the board of directors at the first meeting
after each annual meeting of our shareholders and hold office until their
successors are duly elected and qualified under our bylaws.

J. RALPH ARMIJO has served as our President, Chief Executive Officer and as
one of our directors since our inception in 1993. Since June 1999, Mr. Armijo
has served as the Chairman of the Board of DriveOff.com. From 1981 to 1993, Mr.
Armijo was employed by Tektronix, Inc., a company which produces testing and
measuring equipment. From 1976 to 1981, Mr. Armijo was employed by IBM
Corporation, where he sold computerized accounting and financial applications to
small and medium-sized businesses. Mr. Armijo received his B.A. from Colorado
College and his M.B.A. from the University of California, Los Angeles.

PATRICK R. MAWHINNEY has served as our Chief Financial Officer, Treasurer
and as a director since July 1996. Mr. Mawhinney has served as our Secretary
since August 1999. Prior to that he served as the President of Interactive
Planet, Inc. from its inception in May 1995 until its merger with us in July
1996. From May 1995 until May 1996, Mr. Mawhinney also served as a
financial/accounting consultant for MIS\Sunguard, a provider of accounting and
investment software. Mr. Mawhinney was employed as an Assistant Vice President
of The Bank of Cherry Creek from November 1993 to May 1995. He received his B.S.
from Colorado State University.

KENNETH P. BERO has served as our Chief Operating Officer since July 1999
and before that was our Vice President of Sales since December 1997. From July
1996 to December 1997, Mr. Bero was Director of Sales, SGI Business Group at
Access Graphics, a wholesale distributor of UNIX based hardware and software
products. From September 1989 to June 1996, Mr. Bero held various sales and
sales management positions at Tektronix, Inc. including Business Development
Manager, Major Account Group Manager and National Reseller Group Manager for the
Display Products Division. Mr. Bero received his B.A. from Bates College and his
M.B.A. from Northeastern University.

BRAD E. NIXON has served as our Vice President of Technology since July
1999. From January 1998 to July 1999, Mr. Nixon served as our Director of
Software Development. From January 1997 to January 1998, Mr. Nixon served as a
partner of Securalarm, Inc., a

51
<PAGE> 54

residential security business. From May 1993 to January 1997, Mr. Nixon was
Director of Technical Services for Promise Keepers. Mr. Nixon earned his B.S.
from Iowa State University.

GREG HANCHIN has served as our Vice President of Sales since July 1999.
From December 1997 to July 1999, Mr. Hanchin was Director of Sales for our
Internet solutions division. From May 1996 to December 1997, Mr. Hanchin served
as Regional Sales Manger for Netscape. From June 1989 to May 1996, Mr. Hanchin
held various sales and marketing positions at Access Graphics. Mr. Hanchin
received his B.S. from Minot State University.

MICHAEL S. KRANITZ has served as a director since December 1998. Since June
1999, Mr. Kranitz has served as President of DriveOff.com. From October 1997
until December 1998, Mr. Kranitz served as the Chief Executive Officer and
President of LeaseSource Online, Inc., an automotive leasing information
company. From January 1997 until October 1997, Mr. Kranitz worked with a
computer company primarily on the development of the intellectual property used
by LeaseSource, Inc. and in October 1997, Mr. Kranitz acquired from that company
those intellectual property rights. From 1994 until December 1996, Mr. Kranitz
was a partner with the law firm of Benesch, Friedlander, Coplan & Aronoff LLP.
Mr. Kranitz received a B.S. from the University of Florida and a J.D. from
Vanderbilt School of Law.

ANDREW S. DAVIS has served as a director since April 1997. Mr. Davis has
served as Director of Global & Strategic Sales for InFocus Systems, Inc., a
manufacturer of high resolution projection systems since November 1997. Mr.
Davis served as our Vice President of Sales and Marketing from May 1996 until
November 1997. From January 1994 to May 1996, Mr. Davis was manager of wholesale
distribution at InFocus Systems. From September 1982 to January 1994, Mr. Davis
held various sales and marketing positions at Tektronix, Inc., including
Director of Marketing for the Interactive Technologies Division. Mr. Davis
attended the University of Denver where he studied business management and
marketing.

LLOYD G. CHAVEZ, JR. has served as a director since April 1997. He has been
a director of the Burt Group of automobile dealerships in Denver, Colorado since
1988 and director of Automotive Markets of the Burt Group since 1994. From 1983
to 1994, Mr. Chavez was Vice President of Fort Dodge Laboratories, a subsidiary
of American Home Products, where he was responsible for business acquisitions,
new products and technologies, intellectual property acquisitions, strategic
planning and market research. From 1982 to 1983, Mr. Chavez held the position of
Vice President of General Genetics Corporation, where he was responsible for
management of biological and pharmaceutical research and development. Mr. Chavez
received his B.A. from the University of Colorado, his M.A. from Denver
Seminary, his Ph.D. from the University of Virginia, and was a post-doctoral
Fellow in Chemistry at Cornell University.

GERALD A. MARRONEY has served as a director since April 1997. He has served
as a State of Colorado District Court Judge in Pueblo County, Colorado since
1990. Before that time he was a practicing attorney in Pueblo, Colorado. Mr.
Marroney received his B.S. from Southern Colorado State College and his J.D.
from Oklahoma City University.

JAMES E. HOSCH has served as a director since June 1998. Since November
1998, Mr. Hosch has been an independent representative for Bathgate McColley
Capital Group LLC, a registered broker dealer licensed by the National
Association of Securities Dealers, Inc. From September 1995 until November 1998,
Mr. Hosch was a Senior Vice President of
52
<PAGE> 55

Joseph Charles & Associates, Inc., a registered broker dealer licensed by the
NASD. From January 1993 until September 1995, he was Executive Vice President of
Cohig & Associates, Inc., a registered broker dealer licensed by the NASD. From
1989 until January 1993, he was President of Kober Corporation, a publicly
traded real estate firm. Mr. Hosch received his B.B.A. from Texas A&M
University.

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<PAGE> 56

PRINCIPAL AND SELLING SHAREHOLDERS

"Beneficial ownership" includes those shares a shareholder has the power to
vote or transfer and common stock that could be issued upon the exercise of
outstanding stock options that are exercisable within 60 days of June 30, 1999.
On June 30, 1999, Navidec had outstanding 7,393,614 shares of common stock and
following this offering, there will be 9,893,614 shares of common stock
outstanding. As used in the following table, an asterisk in the Percentage of
Outstanding Stock column means less than one percent.

<TABLE>
<CAPTION>
PERCENTAGE OF
OPTIONS OUTSTANDING STOCK
EXERCISABLE TOTAL -------------------
SHARES WITHIN 60 BENEFICIAL PRIOR TO AFTER
BENEFICIAL OWNER OWNED DAYS OWNERSHIP OFFERING OFFERING
- ---------------- --------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
J. Ralph Armijo(1)............. 832,659 146,000 978,659 13.0% 9.7%
Patrick R. Mawhinney(2)........ 149,357 57,000 206,357 2.8 2.1
Harold Anderson II(3).......... 61,073 42,000 103,073 1.4 1.0
Kenneth P. Bero................ -- 50,000 50,000 * *
Michael S. Kranitz(4).......... 250,000 83,334 333,334 4.5 3.3
Andrew S. Davis................ 14,250 15,000 29,250 * *
Lloyd G. Chavez, Jr.(5)........ 4,250 15,000 19,250 * *
Gerald A. Marroney............. -- 15,000 15,000 * *
James E. Hosch................. 596 55,000 55,596 * *
All directors and executive
officers as a group (ten
persons)(6).................. 1,312,185 436,334 1,682,446 21.5% 16.3%
</TABLE>

- -------------------------
(1) Mr. Armijo's address is 14 Inverness Drive, Building F, Suite 116,
Englewood, Colorado 80112. If the underwriters' over-allotment option is
exercised, Mr. Armijo will sell shares of common stock at such
time. In such case, Mr. Armijo will own shares after this
offering, or %.

(2) If the underwriters' over-allotment option is exercised, Mr. Mawhinney will
sell shares of common stock at such time. In such case, Mr.
Mawhinney will own shares after this offering, or %.

(3) If the underwriters' over-allotment option is exercised, Mr. Anderson will
sell shares of common stock at such time. In such case, Mr.
Anderson will own shares after this offering, or %. Mr.
Anderson served as our Vice President -- Automotive from June 1996 to June
1999 and currently serves as the Vice President -- Technology of
DriveOff.com.

(4) The number of shares indicated includes 61,250 shares of common stock owned
by Mr. Kranitz's wife, Abby L. Kranitz. Mr. Kranitz is deemed to
beneficially own the shares held by Ms. Kranitz.

(5) Mr. Chavez is President of LGC Management and may be deemed the beneficial
owner of 4,250 shares of common stock owned by LGC Management.

(6) Excludes shares and options beneficially owned by Mr. Anderson since, as of
June 1999, he is no longer our Vice President-Automotive.

54
<PAGE> 57

UNDERWRITING

The underwriters named below, represented by First Security Van Kasper and
Advest, Inc., have severally agreed, subject to the terms and conditions in the
underwriting agreement, by and among us, certain selling shareholders and the
underwriters, to purchase from us the number of shares of common stock indicated
below opposite their respective names, at the public offering price less the
underwriting discount set forth on the cover page of this prospectus. The
underwriting agreement provides that the obligations of the underwriters are
subject to certain conditions precedent, including the following:

- effectiveness of the registration statement;

- absence of material changes to our business and finances;

- receipt of opinions from our counsel and counsel for the underwriters;

- receipt of a letter or letters from our auditors, confirming the validity of
certain facts and assumptions about us and this offering;

- receipt of certification from one of our officers regarding the accuracy of
the information, representations and warranties given to the underwriters;
and

- receipt of promises from certain of our existing shareholders not to sell
their stock for 180 days following the date of this offering.

The underwriters are committed to purchase all of the shares of common
stock, if they purchase any.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------ -----------
<S> <C>
First Security Van Kasper...................................
Advest, Inc.................................................
-----------
Total.................................................. 2,500,000
===========
</TABLE>

The underwriters have advised us that the underwriters propose initially to
offer the shares of common stock to the public on the terms set forth on the
cover page of this prospectus. The underwriters may allow selected dealers a
concession of not more than $ per share; and the underwriters may allow, and
such dealers may reallow, a concession of not more than $ per share to
certain other dealers. After the offering, this offering price and other selling
terms may be changed by the underwriters, but these terms will not be changed
prior to completion of the offering. The common stock is offered subject to
receipt and acceptance by the underwriters and to certain other conditions,
including the right to reject orders in whole or in part.

We and certain selling shareholders have granted the underwriters an
over-allotment option, exercisable 45 days from the date of this prospectus, to
purchase up to a maximum of 375,000 additional shares of common stock to cover
over-allotments, if any, at the same price per share as the initial shares to be
purchased by the underwriters. To the extent the underwriters exercise this
over-allotment option, each of the underwriters will be committed, subject to
conditions similar to those described above, to purchase additional shares in
approximately the same proportion as set forth in the above table. The
underwriters may exercise this over-allotment option only to cover
over-allotments made in connection with this offering.

55
<PAGE> 58

The following table summarizes the compensation to be paid by us and the
selling shareholders to the underwriters.

<TABLE>
<CAPTION>
TOTAL
-------------------------------
WITHOUT WITH
PER SHARE OVER-ALLOTMENT OVER-ALLOTMENT
--------- -------------- --------------
<S> <C> <C> <C>
Underwriting discounts and commissions to
be paid by us.......................... $ $ $
Underwriting discounts and commissions to
be paid by the selling shareholders.... $ $ -- $
</TABLE>

The underwriting agreement provides that we will indemnify the underwriters
against certain liabilities, including civil liabilities under the Securities
Act, or will contribute to payments the underwriters may be required to make in
respect thereof.

Our officers and directors prior to this offering have agreed that, for a
period of 180 days after the date of this prospectus, they will not, subject to
certain exceptions described below, offer, sell, contract to sell, solicit an
offer to buy, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or pledge,
assign, create a security interest in or lien upon, encumber or otherwise
transfer or dispose of, directly or indirectly, any common stock or securities
exchangeable or exercisable for or convertible into shares of common stock,
without the prior written consent of First Security Van Kasper. Our shareholders
need not obtain consent from the underwriters if they are making a bona fide
gift or are transferring shares of common stock to an immediate family member or
to a trust for the benefit of the shareholder, an immediate family member or
both. We have also agreed not to issue, offer, sell, grant options to purchase
or otherwise dispose of any of our equity securities for a period of 180 days
after the effective date of this offering without the prior written consent of
First Security Van Kasper except for securities that we issue in connection with
acquisitions and for grants and exercises of stock options, subject in each case
to any remaining portion of the 180-day period applying to shares issued or
transferred. In evaluating any request for a waiver of the 180-day lock-up
period, First Security Van Kasper will consider, in accordance with its
customary practice, all relevant facts and circumstances at the time of the
request, including, without limitation, the recent trading market for our common
stock, the size of the request and, with respect to any request that we may make
to issue additional equity securities, the purpose of an issuance.

In connection with this offering, certain underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of our common stock.
These transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M under the Securities and Exchange Act of 1934,
pursuant to which these persons may bid for or purchase our common stock for the
purpose of stabilizing its market price. The underwriters also may create a
short position for the account of the underwriters by selling more common stock
in connection with this offering than they are committed to purchase from us
and, in such case, may purchase common stock in the open market following
completion of this offering to cover all or a portion of a short position. The
underwriters also may cover all or a portion of a short position by exercising
the underwriters' over-allotment option referred to above. In addition, First
Security Van Kasper on behalf of the underwriters may impose "penalty bids"
under contractual arrangements with the underwriters, whereby it may reclaim
from an

56
<PAGE> 59

underwriter (or dealer participating in this offering) for the account of the
other underwriters, the selling concession with respect to common stock that is
distributed in this offering but subsequently purchased for the account of the
underwriters in the open market. Any of the transactions described in this
paragraph may result in the maintenance of the price of our common stock at a
level above that which might otherwise prevail in the open market. None of the
transactions described in this paragraph is required, and, if they are
undertaken, they may be discontinued at any time.

First Security Van Kasper has informed us that the underwriters do not
intend to confirm sales of common stock offered by this prospectus to accounts
over which they exercise discretionary authority in excess of 5% of the number
of shares of common stock offered hereby.

We estimate that the total expenses of the offering, excluding underwriting
discounts and commissions, will be approximately $1,000,000.

LEGAL MATTERS

The validity of the issuance of the common stock offered hereby will be
passed on for Navidec by Benesch, Friedlander, Coplan & Aronoff LLP, Cleveland,
Ohio. Partners of Benesch, Friedlander, Coplan & Aronoff LLP who participated in
the preparation of this prospectus beneficially own an aggregate of 141,000
shares of common stock. Cooley Godward LLP, Boulder, Colorado will pass upon
certain legal matters in connection with the offering for the underwriters.

EXPERTS

The financial statements and schedules included in this prospectus and
elsewhere in the registration statement, to the extent and for the periods
indicated in their reports, have been audited by Arthur Andersen LLP and Hein +
Associates LLP, independent public accountants, and are included herein in
reliance upon the authority of said firms as experts in giving said reports.

57
<PAGE> 60

NAVIDEC, INC.
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Index to Consolidated Financial Statements.................. F-1
Report of Independent Public Accountants.................... F-2
Independent Auditor's Report................................ F-3
Balance Sheet -- December 31, 1998.......................... F-4
Statements of Operations -- For the Years Ended December 31,
1998 and 1997............................................. F-5
Statement of Changes in Shareholders' Equity
(Deficit) -- For the Years Ended December 31, 1998 and
1997...................................................... F-6
Statements of Cash Flows -- For the Years Ended December 31,
1998 and 1997............................................. F-7
Notes to Financial Statements -- December 31, 1997 and
1998...................................................... F-8
Balance Sheets as of June 30, 1999.......................... F-25
Statements of Operations -- For the Six and Three Months
ended June 30, 1998 and 1999.............................. F-26
Statements of Cash Flows -- Six Months ended June 30, 1998
and 1999.................................................. F-27
Notes to Financial Statements -- June 30, 1998 and 1999..... F-28
</TABLE>

F-1
<PAGE> 61

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Navidec, Inc.:

We have audited the accompanying consolidated balance sheet of NAVIDEC,
INC., (a Colorado corporation) and subsidiaries as of December 31, 1998, and the
related consolidated statements of operations, shareholders' equity and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Navidec,
Inc. and subsidiaries, as of December 31, 1998, and the results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN, LLP

Denver, Colorado,
March 23, 1999
(except with respect to the matter
discussed in Note 13, as to
which the date is July 23, 1999).

F-2
<PAGE> 62

INDEPENDENT AUDITOR'S REPORT

Board of Directors
NAVIDEC, Inc.
Englewood, Colorado

We have audited the balance sheet of NAVIDEC, Inc., as of December 31, 1997
(not separately included herein) and the accompanying related statements of
operations, changes in shareholders' equity, and cash flows for the year ended
December 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of December
31, 1997, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

HEIN + ASSOCIATES LLP

Denver, Colorado
March 5, 1998.

F-3
<PAGE> 63

NAVIDEC, INC.

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31
1998
-----------
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................... $ 711,000
Accounts receivable, net of allowance for doubtful
accounts of $125,000................................... 2,167,000
Costs and estimated earnings in excess of billings........ 107,000
Inventories............................................... 341,000
Restricted cash........................................... 280,000
Prepaid expenses and other................................ 52,000
-----------
Total current assets................................... 3,658,000
-----------
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
$717,000.................................................. 981,000
-----------
OTHER ASSETS:
Goodwill and intangibles, net of accumulated amortization of
$100,000.................................................. 619,000
Other..................................................... 7,000
-----------
Total other assets..................................... 626,000
-----------
TOTAL ASSETS........................................... $ 5,265,000
===========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 1,851,000
Accrued liabilities....................................... 423,000
Payable to factor......................................... 203,000
Notes payable............................................. 821,000
Current capital lease obligations......................... 74,000
-----------
Total current liabilities.............................. 3,372,000
-----------
CAPITAL LEASE OBLIGATIONS, net of current portion........... 94,000
COMMITMENTS AND CONTINGENCIES (Notes 1, 3 and 7)
SHAREHOLDERS' EQUITY:
Common stock, no par value, 20,000,000 shares authorized,
4,709,000 shares issued and outstanding as of December
31, 1998............................................... 8,059,000
Warrants for common stock................................. 2,891,000
Accumulated deficit....................................... (9,151,000)
-----------
Total shareholders' equity............................. 1,799,000
-----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............. $ 5,265,000
===========
</TABLE>

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

F-4
<PAGE> 64

NAVIDEC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
--------------------------
DECEMBER 31
--------------------------
1997 1998
----------- -----------
<S> <C> <C>
REVENUE.................................................. $ 6,008,000 $ 8,555,000
COST OF REVENUE.......................................... 4,219,000 5,870,000
----------- -----------
GROSS PROFIT............................................. 1,789,000 2,685,000
----------- -----------
OPERATING EXPENSES:
Product development.................................... 1,662,000 1,834,000
General and administrative............................. 2,468,000 3,479,000
Selling and marketing.................................. 237,000 921,000
Impairment of goodwill................................. 1,305,000 --
----------- -----------
Total operating expenses............................ 5,672,000 6,234,000
----------- -----------
LOSS FROM OPERATIONS..................................... (3,883,000) (3,549,000)
----------- -----------
OTHER (EXPENSE) INCOME:
Interest expense....................................... (236,000) (414,000)
Other, net............................................. 12,000 30,000
----------- -----------
Total other expense, net............................ (224,000) (384,000)
----------- -----------
NET LOSS............................................ $(4,107,000) $(3,933,000)
=========== ===========
BASIC AND DILUTED NET LOSS PER SHARE..................... $ (1.47) $ (1.10)
=========== ===========
BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING............................................ 2,800,000 3,578,000
=========== ===========
</TABLE>

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

F-5
<PAGE> 65

NAVIDEC, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998
-----------------------------------------------------------------
WARRANTS
COMMON STOCK FOR
----------------------- COMMON ACCUMULATED
SHARES AMOUNT STOCK DEFICIT TOTAL
--------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCES, December 31, 1996.................. 1,701,000 $ 401,000 $ -- $(1,111,000) $ (710,000)
Conversion of unsecured promissory notes to
common stock............................. 349,000 1,133,000 305,000 -- 1,438,000
Issuance of common stock and warrants in a
public offering, net of $1,094,000 of
expenses................................. 755,000 2,473,000 963,000 -- 3,436,000
Issuance of common stock for the
acquisition of TouchSource............... 207,000 776,000 -- -- 776,000
Issuance of common stock and warrants in a
private placement, net of $132,000 of
expenses................................. 189,000 574,000 143,000 -- 717,000
Net loss................................... -- -- -- (4,107,000) (4,107,000)
--------- ----------- ----------- ----------- -----------
BALANCES, December 31, 1997.................. 3,201,000 5,357,000 1,411,000 (5,218,000) 1,550,000
Issuance of common stock and warrants in a
private placement, net of $350,000 of
expenses................................. 406,000 131,000 1,345,000 -- 1,476,000
Issuance of warrants in connection with
debt borrowing........................... -- -- 300,000 -- 300,000
Issuance of common stock in a private
placement, net of $70,000 of expenses.... 700,000 1,330,000 -- -- 1,330,000
Issuance of common stock for acquisition of
CarWizard and LeaseSource................ 250,000 500,000 -- -- 500,000
Exercise of employee stock options......... 69,000 284,000 -- -- 284,000
Exercise of warrants....................... 83,000 457,000 (165,000) -- 292,000
Net loss................................... -- -- -- (3,933,000) (3,933,000)
--------- ----------- ----------- ----------- -----------
BALANCES, December 31, 1998.................. 4,709,000 $ 8,059,000 $ 2,891,000 $(9,151,000) $ 1,799,000
========= =========== =========== =========== ===========
</TABLE>

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

F-6
<PAGE> 66

NAVIDEC, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31
-------------------------
1997 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(4,107,000) $(3,933,000)
Adjustments to reconcile net loss to net cash used in
operating activities--
Depreciation and amortization........................... 865,000 522,000
Discount on note payable................................ -- 300,000
Provision for bad debt.................................. 41,000 75,000
Impairment of goodwill.................................. 1,305,000 --
Changes in operating assets and liabilities--
Accounts receivable................................... (627,000) (1,377,000)
Costs and estimated earnings in excess of billings.... (106,000) (1,000)
Inventories........................................... (315,000) 208,000
Restricted cash....................................... (300,000) 20,000
Other assets.......................................... (52,000) 27,000
Accounts payable...................................... (92,000) 857,000
Accrued liabilities................................... (271,000) 252,000
----------- -----------
Net cash used in operating activities.............. (3,659,000) (3,050,000)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................... (475,000) (538,000)
Cash assumed in acquisitions.............................. 7,000 68,000
Acquisition costs incurred................................ (32,000) --
----------- -----------
Net cash used in investing activities.............. (500,000) (470,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from factoring of accounts receivable............ 634,000 3,515,000
Payments to factor........................................ (444,000) (3,502,000)
Proceeds from issuance of common stock and warrants....... 5,379,000 3,226,000
Payment for offering and deferred financing costs......... (1,236,000) (420,000)
Proceeds from exercise of employee stock options.......... -- 284,000
Proceeds from exercise of warrants........................ -- 292,000
Proceeds from notes payable............................... 333,000 885,000
Proceeds from related party note receivable............... -- 60,000
Payments on notes payable and capital leases.............. (369,000) (478,000)
----------- -----------
Net cash provided by financing activities.......... 4,297,000 3,862,000
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS................... 138,000 342,000
CASH AND CASH EQUIVALENTS, beginning of period.............. 231,000 369,000
----------- -----------
CASH AND CASH EQUIVALENTS, end of period.................... $ 369,000 $ 711,000
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.................................. $ 79,000 $ 109,000
=========== ===========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Equipment acquired with capital leases.................... $ -- $ 72,000
=========== ===========
Issuance of common stock in connection with
acquisitions............................................ $ 776,000 $ 500,000
=========== ===========
Conversion of unsecured promissory notes to common
stock................................................... $ 1,438,000 $ --
=========== ===========
Net liabilities assumed in acquisitions................... $ 83,000 $ 39,000
=========== ===========
</TABLE>

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

F-7
<PAGE> 67

NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1998

(1) ORGANIZATION AND NATURE OF BUSINESS

Navidec, Inc., a Colorado corporation, (the "Company") was incorporated in
1993. The Company's experienced team develops open systems, component-based
solutions, to enable customers to address their e-business initiatives. Out of
this competency, the Company has launched its first vertical market that
provides on-line solutions for the automotive industry. The Company also serves
as a distributor of various high technology and other products through
traditional and electronic channels.

The Company owns 100% of each of the following subsidiaries: Interactive
Planet, Inc. ("IPI"), TouchSource Inc., CarWizard.com Inc. ("CarWizard") and
LeaseSource Online Inc. ("LeaseSource"). IPI is a designer and developer of
Internet sites. TouchSource is a designer and developer of interactive kiosks.
CarWizard and LeaseSource are automotive information web site businesses.

The Company is subject to various risks and uncertainties frequently
encountered by companies in the early stages of development, particularly
companies in the new and rapidly evolving market for Internet-based products and
services. Such risks and uncertainties include, but are not limited to, its
limited operating history, an evolving and unpredictable business model and the
management of rapid growth. To address these risks, the Company must, among
other things, maintain and increase its customer base, implement and
successfully execute its business and marketing strategy, continue to develop
and upgrade its technology, provide superior customer service and attract,
retain and motivate qualified personnel. There can be no guarantee that the
Company will be successful in addressing such risks.

To date, substantially all of the Company's revenue has been derived from
services related to internet/intranet solutions and the resale of computer
equipment, high technology peripherals and electronic components manufactured by
independent vendors. The Company's strategy is to increase revenue generated by
its two core competencies: 1) Internet/Intranet solutions, which are focused in
five major market areas, including computer and network infrastructure
architecture and equipment, software development and services, content
aggregation, electronic commerce and order fulfillment, and 2) automotive
solutions. There can be no guarantee that the Company will be successful in
marketing its current products or other new or enhanced products. In addition,
the market for the Company's services is characterized by rapid technological
developments, frequent new product introductions and evolving industry
standards. The changes require the Company to continually improve the
performance, features, and reliability of its products, particularly in response
to competition. There can be no assurance that the Company will be successful in
responding to these changes.

The Company expects that its growth may require significant external
financing within the next year. While the Company believes that it will be able
to obtain such external financing from third parties or from existing
shareholders, there can be no guarantee that it can do so at terms acceptable to
the Company. If the Company is unable to raise the necessary financing, the
Company's business, results of operations and financial condition

F-8
<PAGE> 68
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

could be materially affected. Subsequent to December 31, 1998, the Company
raised $13.8 million (Note 12).

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

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

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash and cash equivalents,
restricted cash and accounts receivable. The Company has no significant
off-balance sheet concentrations of credit risk, such as foreign exchange
contracts, option contracts or hedging arrangements. The Company maintains its
cash balances in the form of bank demand deposits and money market accounts with
financial institutions that management believes are creditworthy. Accounts
receivable are typically unsecured and are derived from transactions with and
from customers primarily located in the United States. The Company performs
ongoing credit evaluations of its customers and maintains reserves for potential
credit losses. The Company maintains an allowance for doubtful accounts based
upon the expected collectibility of accounts receivable.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash equivalents, short-term
trade receivables and payables, and notes payable. The carrying values of the
cash equivalents and short-term trade receivables and payables approximate their
fair values. Based on borrowing rates currently used by the Company for
financing, the carrying value of the note payable approximates its estimated
fair value.

CASH EQUIVALENTS

For cash flow purposes, the Company considers all highly liquid instruments
purchased with an original maturity of 90 days or less to be cash equivalents.

RESTRICTED CASH

Restricted cash represents amounts withheld from employees for their 401(k)
profit sharing plan of $231,000 and the minimum cash reserve for receivables
sold to a bank of $49,000. Included in accrued liabilities on the accompanying
balance sheet is the $231,000 obligation for the employees 401(k).

F-9
<PAGE> 69
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS

Costs and estimated earnings in excess of billings as of December 31, 1998
is comprised of the following:

<TABLE>
<S> <C>
Costs incurred on contracts in progress..................... $ 31,000
Estimated earnings.......................................... 76,000
--------
107,000
Less progress billings...................................... --
--------
$107,000
========
</TABLE>

INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out) or
market, and consist primarily of products held for resale.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost and depreciation is provided using
the straight-line method over estimated useful lives of three to seven years.
Computer equipment and purchased software is depreciated over three years and
furniture and office equipment is depreciated over five years. Maintenance and
repairs are expensed as incurred and major additions, replacements and
improvements are capitalized.

Leasehold improvements are amortized using the straight-line method over
the shorter of the useful life or the life of the lease.

The components of property and equipment as of December 31, 1998 are as
follows:

<TABLE>
<S> <C>
Computer equipment and purchased software................... $1,451,000
Furniture and office equipment.............................. 204,000
Leasehold improvements...................................... 43,000
----------
1,698,000
Less - accumulated depreciation............................. (717,000)
----------
$ 981,000
==========
</TABLE>

Depreciation expense was $257,000 in fiscal 1997 and $353,000 in fiscal
1998.

GOODWILL AND INTANGIBLES

Goodwill and intangibles are recorded at the date of acquisition at their
allocated cost. Amortization is provided over the estimated useful lives of five
years for both the goodwill and the intangible assets. At December 31, 1998,
goodwill and intangibles of $619,000 is entirely from the CarWizard and
LeaseSource acquisition, which closed on December 28, 1998. Amortization will be
provided for these assets over their useful lives of five years. During 1997,
the Company recorded an impairment expense of $1,305,000 on goodwill (see Note
3).

F-10
<PAGE> 70
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews its long-lived assets, including goodwill and
intangibles, for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The Company
evaluates the recoverability of its long-lived assets based on estimated
undiscounted future cash flows and provides for impairment if such undiscounted
cash flows are insufficient to recover the carrying amount of the long-lived
asset.

RECEIVABLES FACTORED WITH RECOURSE

In 1997, the Company entered into an agreement with a bank to factor, with
full recourse, existing and future accounts receivable to a maximum of $750,000.
The Company must maintain a cash reserve account with the bank of up to 20% of
the face amount of receivables sold to the bank. The Company's recourse
obligation is secured by all of the Company's assets and is guaranteed by two of
the Company's shareholders. As of December 31, 1998, the face amount of
receivables factored was $246,000 with a recourse obligation of $203,000. For
financial presentation purposes, the related receivable and outstanding recourse
liability have been included as an asset and liability, respectively, on the
accompanying balance sheet.

REVENUE RECOGNITION

The Company generally recognizes revenues upon delivery from its
Internet/Intranet and kiosk solutions and product distribution goods.
Internet/Intranet and kiosk solutions generally begin with short-term
arrangements, which are billed on a time and materials basis or percentage of
completion method on fixed bid projects. Frequently, customers elect to update
and expand their Web sites, and are billed monthly on a time and materials basis
for these services.

Additional sources of ongoing revenue include revenue from advertising sold
by the Company on clients' Web sites, revenue from sales of merchandise and
services over clients' Web sites and revenue from maintenance of client Web
sites. The Company receives and records a percentage of the gross revenue from
advertising and merchandise sales upon completion of these sales.

Revenues on short-term contracts are recorded upon substantial completion
of each contract. Revenues from time and material contracts are recognized
currently as the work is performed.

Revenues from long-term contracts are recognized on the percentage of
completion method for individual contracts, commencing when progress reaches a
point where experience is sufficient to estimate final results with reasonable
accuracy. Revenues are recognized in the ratio that costs incurred bear to total
estimated contract costs. Changes in job performance, estimated profitability
and final contract settlements may result in revisions to costs and income in
the period in which the revisions are determined. Provisions for any estimated
losses on uncompleted contracts are made in the period in which such losses are
determinable.

F-11
<PAGE> 71
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Contract costs include all labor costs and those direct costs related to
contract performance.

PRODUCT DEVELOPMENT

Costs incurred in the development of new products and enhancements to
existing products and services are charged to expense as incurred.

ADVERTISING COSTS

Advertising costs are expensed as incurred and are included in selling and
marketing expenses in the accompanying statements of operations. The Company
does not incur any direct-response advertising costs. Advertising expense
totaled $156,000 and $256,000 in 1997 and 1998, respectively.

INCOME TAXES

Deferred tax assets and liabilities are recorded for the estimated future
tax effects of temporary differences between the tax basis of assets and
liabilities and amounts reported in the accompanying balance sheets, and for
operating loss and tax credit carryforwards. The change in deferred tax assets
and liabilities for the period measures the deferred tax provision or benefit
for the period. Effects of changes in enacted tax laws on deferred tax assets
and liabilities are reflected as adjustments to the tax provision or benefit in
the period of enactment. The Company's deferred tax assets have been reduced by
a valuation allowance to the extent it is more likely than not, that some or all
of the deferred tax assets will not be realized.

STOCK-BASED COMPENSATION

The Company accounts for its employee stock option plans and other
stock-based compensation arrangements using the intrinsic value method under
which no compensation expense is recognized unless the fair value of the
underlying stock is more than the stock option exercise price on the date of
grant. The Company accounts for equity instruments issued to non-employees at
fair value on the date of grant.

NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss available to
common shareholders for the period by the weighted average number of common
shares outstanding for the period. Diluted net loss per share is computed by
dividing the net loss for the period by the weighted average number of common
and potential common shares outstanding during the period if the effect of the
potential common shares is dilutive. The Company has excluded the weighted
average effect (using the treasury stock method) of common stock issuable upon
conversion of all warrants and stock options from the computation of diluted
earnings per share as the effect of all such securities is anti-dilutive for all
periods presented. The shares excluded are approximately 26,000 and 294,000 for
fiscal 1997 and 1998, respectively.

F-12
<PAGE> 72
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

COMPREHENSIVE INCOME

Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130, "Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No. 130 establishes
standards for reporting comprehensive income and its components in financial
statements. Comprehensive income, as defined, includes all changes in equity
(net assets) during a period from non-owner sources. From its inception through
December 31, 1998, the comprehensive income (loss) has been the same as net
income (loss).

OTHER RECENT ACCOUNTING PRONOUNCEMENTS

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position ("SOP") No. 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use," which provides
guidance on accounting for the cost of such software. SOP No. 98-1 is effective
for financial statements for fiscal years beginning after December 15, 1998. The
Company has not yet determined the impact, if any, of adopting SOP No. 98-1 in
fiscal 1999.

In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of
Start-Up Activities. ("SOP 98-5"). In general, SOP 98-5 requires costs of
start-up activities and organization costs to be expensed as incurred and
specifies that initial application of SOP 98-5 should be reported as the
cumulative effect of a change in accounting principle. The provisions of SOP
98-5 are effective for fiscal years beginning after December 15, 1998 and will
be adopted by the Company during the year ended December 31, 1999. The Company
believes the adoption of SOP 98-5 will not have a material impact on the
financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). The Company is required to
adopt SFAS No. 133 in the year ended December 31, 2001. SFAS No. 133 establishes
methods of accounting for derivative financial instruments and hedging
activities related to those instruments as well as other hedging activities. The
Company does not believe adoption of SFAS No. 133 will have a material impact
upon its financial statements.

RECLASSIFICATIONS

Certain prior years' balances were reclassified to conform to current year
presentation.

(3) ACQUISITIONS

Effective December 28, 1998, the Company acquired 100% of the stock of both
CarWizard and LeaseSource for a total of 250,000 shares of common stock. The
combined purchased price was valued by issuing $500,000 of the Company's common
stock and the assumption of $39,000 of net liabilities, resulting in goodwill of
$539,000 being recorded. Included in the net liabilities assumed was $80,000 of
intangibles for acquired technology. The acquisition was accounted for under the
purchase method of accounting, and accordingly the operating results of
CarWizard and LeaseSource have been included in the accompanying consolidated
financial statements from the effective date of the acquisitions. The purchase

F-13
<PAGE> 73
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

agreement includes an earn-out provision for up to an additional $1,000,000 of
purchase price, which is based on the success of Web site leads provided in 1999
and 2000.

Effective July 31, 1997, the Company acquired 100% of the stock of
TouchSource by issuing 207,000 shares of the Company's common stock. The total
purchase price was valued by issuing $776,000 of the Company's common stock and
the assumption of $83,000 of net liabilities, resulting in goodwill of $859,000
being recorded. The acquisition was accounted for under the purchase method of
accounting, and accordingly the operating results of TouchSource have been
included in the accompanying consolidated financial statements from the
effective date of the acquisition. Subsequent to the acquisition, technologies
developed more rapidly than expected, which has reduced the expected future cash
flows associated with the TouchSource technology. Furthermore, the Company
intends to integrate the TouchSource technology with its other products and
market it primarily to the automotive industry, which was not a market focus of
TouchSource. As such, the Company reevaluated the related goodwill, and recorded
an impairment expense of $707,000 in fiscal 1997, resulting in a remaining net
balance of $80,000 as of December 31, 1997. This remaining goodwill was
amortized completely in 1998.

Effective July 1, 1996, the Company acquired 100% of the stock of IPI by
issuing 679,000 shares of the Company's common stock and a $75,000 note payable.
The total purchase price was valued by issuing $750,000 of the Company's common
stock and the assumption of $100,000 of net liabilities, resulting in goodwill
of $850,000 being recorded. The acquisition was accounted for under the purchase
method of accounting, and accordingly the operating results of IPI have been
included in the accompanying consolidated financial statements from the
effective date of the acquisition. Subsequent to the acquisition, projected
future cash flows associated with the technology previously developed by IPI
declined due to rapidly changing technologies and increased competition for
products developed with the IPI technology. In addition, during the fourth
quarter of 1997, after the introduction of new Internet solutions by the
Company, management decided to focus the Company on its automotive solution. As
such, the Company reevaluated the goodwill related to this acquisition and
recorded an impairment expense of $598,000 in fiscal 1997, resulting in a
remaining net balance of $20,000 as of December 31, 1997. This remaining
goodwill was amortized completely in 1998.

The following table sets forth the unaudited condensed pro forma operating
results of the Company for the CarWizard and LeaseSource, and the TouchSource
business

F-14
<PAGE> 74
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

combinations, as if each transaction occurred on January 1 of the preceding year
for each acquisition. Adjustments are reflected for additional amortization of
goodwill and intangibles:

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
--------------------------
1997 1998
----------- -----------
<S> <C> <C>
Revenues......................................... $ 6,407,000 $ 9,162,000
=========== ===========
Net loss......................................... $(4,501,000) $(4,142,000)
=========== ===========
Basic and diluted loss per share................. $ (1.42) $ (1.08)
=========== ===========
Basic and diluted weighted-average common shares
outstanding.................................... 3,170,000 3,828,000
=========== ===========
</TABLE>

The condensed pro forma results are not necessarily indicative of the
results of operations had the acquisitions been consummated on the earlier date,
and may not necessarily be indicative of future performance. The purchase price
allocation for the CarWizard and LeaseSource acquisition is preliminary and may
change in the near future based upon completed valuations of assets and
liabilities acquired by the Company.

(4) NOTES PAYABLE

Notes payable consist of the following as of December 31, 1998:

<TABLE>
<S> <C>
Notes payable to VSI Holdings; interest at 9%, due in part
in September 1998 and December 1998, secured by assets of
the Company............................................... $ 721,000
Note payable; interest at 9%, due on October 18, 1999,
secured by assets of LeaseSource.......................... 100,000
---------
821,000
Less-current portion........................................ (821,000)
---------
Long-term portion........................................... $ --
=========
</TABLE>

In September and December 1998, the Company granted a total of 531,525 of
detachable warrants to VSI Holdings in connection with the above borrowing. The
warrants were valued at $300,000, using the Black-Scholes option pricing model,
and accounted for as a discount on the note. The discount has been fully
amortized into interest expense as of December 31, 1998.

The above notes payable to VSI Holdings were in default as of yearend.
However, on January 13, 1999, these notes were converted into 160,267 shares of
unregistered common stock at a price of $4.50 per share. On March 22, 1999, the
Company entered into a settlement and release agreement with VSI Holdings where
the 160,267 shares will be cancelled and the Company will retire the notes and
accrued interest for cash of approximately $745,000 by April 5, 1999.

(5) CAPITAL LEASE OBLIGATIONS

The Company has entered into several capital leases for equipment. The
leases are for terms ranging from 24 to 60 months, expiring at various times
through 2001. Interest on the

F-15
<PAGE> 75
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company's capital lease obligations is at rates ranging from 9% to 21% at
December 31, 1998. The capital lease obligations are collateralized by the
related equipment.

Equipment purchased under capital leases is included in the cost of
property and equipment. The following is a summary of property and equipment
purchased under capital leases as of December 31, 1998:

<TABLE>
<S> <C>
Computer equipment.......................................... $247,000
Less-accumulated depreciation............................... (78,000)
--------
Net book value.............................................. $169,000
========
</TABLE>

As of December 31, 1998, future minimum lease payments under capitalized
lease obligations are as follows:

<TABLE>
<S> <C>
Year ended December 31 --
1999...................................................... $ 92,000
2000...................................................... 82,000
2001...................................................... 31,000
---------
205,000
Less-amounts representing interest.......................... (37,000)
---------
Total obligation............................................ 168,000
Less-current portion........................................ (74,000)
---------
Long-term capital lease obligation.......................... $ 94,000
=========
</TABLE>

Interest expense under such leases was $27,000 and $24,000 for the years
ended December 31, 1997 and 1998, respectively.

(6) INCOME TAXES

At December 31, 1998, for income tax purposes, the Company has
approximately $7.5 million of net operating loss carryforwards. Such net
operating losses expire between the years 2011 to 2018.

Management believes that it is more likely than not that the deferred tax
assets will not be realized. Accordingly, a valuation allowance was recorded
against the entire net deferred tax asset.

The Tax Reform Act of 1986 contains provisions which may limit the net
operating loss carryforwards available to be used in any given year if certain
events occur, including significant changes in ownership interests.

F-16
<PAGE> 76
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
1997 1998
---------- -----------
<S> <C> <C>
Current:......................................... $ -- $ --
Deferred:
Federal........................................ (866,000) (1,224,000)
State.......................................... (134,000) (189,000)
Valuation allowance............................ 1,000,000 1,413,000
---------- -----------
$ -- $ --
========== ===========
</TABLE>

The provision (benefit) for income taxes differs from the federal statutory
rate of 34% for the following reasons:

<TABLE>
<CAPTION>
1997 1998
----- -----
<S> <C> <C>
Expected rate............................................... (34.0)% (34.0)%
State taxes, net of federal deduction....................... (2.2) (3.2)
Nondeductible goodwill amortization and impairment.......... 12.8 0.9
Valuation allowance......................................... 24.3 35.9
Other....................................................... (0.9) 0.4
----- -----
0% 0%
===== =====
</TABLE>

The components of the net deferred income tax asset at December 31, 1998
are as follows:

<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $ 2,801,000
Bad debt reserve.......................................... 46,000
Vacation accrual.......................................... 17,000
Deferred tax liabilities:
Accumulated depreciation.................................. (77,000)
Prepaids.................................................. (7,000)
-----------
2,780,000
Less valuation allowance.................................... (2,780,000)
-----------
$ --
===========
</TABLE>

F-17
<PAGE> 77
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(7) COMMITMENTS AND CONTINGENCIES

OPERATING LEASE OBLIGATIONS

The Company leases certain facilities and equipment under operating leases
that expire at various times through 2001. Future minimum lease payments for
such operating leases are as follows as of December 31, 1998:

<TABLE>
<S> <C>
Year ended December 31 --
1999...................................................... $204,000
2000...................................................... 191,000
2001...................................................... 79,000
--------
$474,000
========
</TABLE>

Rental expense related to these leases was $97,000 and $125,000 for the
years ended December 31, 1997 and 1998, respectively.

LITIGATION

In the normal course of business, the Company is subject to, and may become
a party to, litigation. There are no matters currently in litigation which
management believes will have a material impact on the Company's financial
position or results of operations.

(8) RELATED PARTY TRANSACTIONS

In December 1998, the Company entered into employment agreements with a
shareholder. The agreements provide for payments totaling $150,000 per year
through 2000 and include covenants not to compete during the term of employment
and for one year thereafter.

The Company entered into a service agreement with a shareholder that
commenced on August 1, 1996, and was subsequently extended through February
1999. The agreement provides for payments of approximately $5,000 per month plus
options to purchase 212,500 shares of the Company's common stock at $4.12 per
share. The options are exercisable from April 1999 to October 2001. During
fiscal 1998, the shareholder exercised 69,000 of these options. The agreement
also contains a covenant not to compete during the term of the service agreement
and for one year thereafter. During 1997, the Company loaned $60,000 to this
shareholder at 5.5% interest and secured by the options discussed above. The
note was paid in full during 1998.

In April 1997, the Company entered into an additional service agreement
with this shareholder. This agreement provides for additional payments of $5,000
per month plus 2 1/2% of any capital raised as a result of the shareholder's
efforts in the form of warrants for the Company's stock. These warrants will be
priced at the closing price of the Company's stock on the date of closing of any
transaction, exercisable commencing six months after each grant and expire five
years from the date of each grant. As a result of this agreement, 14,862
warrants are outstanding at December 31, 1998.

F-18
<PAGE> 78
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In February 1998, the Company entered into an additional service agreement
with this shareholder to provide financial and banking services. For this
agreement, the shareholder received a consulting fee of 250,000 warrants to
purchase common stock at $3.50 per warrant. During fiscal 1998, the shareholder
exercised 83,000 of these warrants.

In July 1996, the Company entered into employment agreements with two
shareholders. The agreements provide for payments totaling $165,000 per year
through June 30, 1998 and include covenants not to compete during the term of
employment and for one year thereafter.

(9) SHAREHOLDERS' EQUITY

INITIAL PUBLIC OFFERING

In February 1997, the Company completed an initial public stock offering of
1,000,000 units (comprised of 1,000,000 shares of common stock and warrants for
the purchase of 1,000,000 shares of common stock). Included in the 1,000,000
units were 245,000 units offered by the holders of unsecured subordinated
convertible promissory notes. The offering of the 755,000 units provided
proceeds to the Company of $3,436,000, net of offering costs of $1,094,000. Each
warrant allows the holder to purchase one share of common stock at an exercise
price of $7.20 through February 2002. The warrants are redeemable by the Company
at $.05 per warrant upon 30 days notice if the market price of the common stock
for 20 consecutive trading days within the 30-day period preceding the date the
notice is given equals or exceeds $8.40 (see Note 12). The Company also sold to
the underwriter at the close of the public offering underwriter's warrants, at a
price of $0.001 per warrant, to purchase 100,000 shares of common stock. The
underwriter's warrants are exercisable for four years beginning in February 1998
at $7.38 per share.

PRIVATE PLACEMENT 1997

During 1997 and 1998, the Company raised $2,193,000 in a private placement,
net of offering costs of $482,000, by issuing 594,500 units (comprised of one
share of common stock and one warrant) at $4.50 per unit. Each warrant allows
the holder to purchase one share of common stock at an exercise price of $7.20
for a period extending through February 10, 2002. The warrants are redeemable by
the Company at $.05 per warrant upon 30 days notice if the market price of the
common stock for 20 consecutive trading days within the 30-day period preceding
the date the notice is given equals or exceeds $8.40 (see Note 12). Offering
costs associated with the private placement include underwriter commissions and
non-accountable expense allowances totaling 13% of proceeds, as well as
placement agent warrants to purchase 10% of the units sold for five years from
the date of closing at $4.50 per unit. In addition, the Company agreed to issue
any broker or registered agent who places four or more placement units
(consisting of 6,000 units or $27,000 each) one broker warrant for each $20 sold
at a price of $4.50. Accordingly, 118,849 of warrants were issued during 1998 to
brokers and registered agents. During 1997, the Company completed closings on
this private placement of $717,000 net of offering costs of $132,000. During
1998, the Company completed closings on this private placement of $1,476,000 net
of offering costs of $350,000. Additionally, during 1998, the Company issued
61,520 of warrants to brokers or registered representatives as part of the
offering cost.

F-19
<PAGE> 79
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PRIVATE PLACEMENT 1998

In November 1998, the Company completed a private placement resulting in
the issuance of 700,000 shares at $2.00 per share. This offering generated
$1,330,000 in proceeds net of offering costs of $70,000. No warrants were issued
in connection with this offering.

WARRANTS

In connection with the above equity transactions, the Company issued
warrant units to purchase one share of the Company's common stock. For
accounting purposes, all warrants were valued utilizing the Black-Scholes option
pricing model, assuming a volatility factor of 97%, risk free interest rate of
5.6% and expected lives outstanding of 1.5 to 2 years. The following table
summarizes the warrants outstanding as of December 31, 1998:

<TABLE>
<CAPTION>
EXERCISE REMAINING
WARRANTS UNITS PRICE VALUE CONTRACTUAL LIFE
- -------- --------- ------------- ---------- ----------------
<S> <C> <C> <C> <C>
A 2,043,626 $7.20 - $7.38 $1,723,000 Called 2/5/99
B 14,862 $4.50 57,000 4.25 years
C 166,500 $3.50 329,000 4.25 years
D 61,520 $4.50 164,000 4.25 years
E 118,849 $4.50 318,000 4.25 years
F 531,525 $4.50 - $6.50 300,000 One year or less
--------- ----------
2,936,882 $2,891,000
========= ==========
</TABLE>

STOCK OPTION PLAN

The Company adopted the Stock Option Plan (the "Plan") under which the
Company is authorized to grant incentive and non-qualified stock options to
acquire up to 1,000,000 shares of the Company's common stock to employees and
directors of the Company. On February 15, 1999, the authorized stock options
were increased to 2,000,000 as approved by the board of directors. Under the
Plan, the exercise price per share of a non-qualified stock option must be equal
to at least 50% of the fair market value of the common stock on the date of
grant, and the exercise price per share of an incentive stock option must equal
the fair market value of the common stock on the date of grant. Options granted
vest over various terms with a maximum vesting period of five years and expire
after a maximum of 10 years.

F-20
<PAGE> 80
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes the Plan at December 31, 1997 and 1998, and
activity during the years then ended:

<TABLE>
<CAPTION>
1997 1998
------------------- ---------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
------- -------- --------- --------
<S> <C> <C> <C> <C>
Outstanding, beginning of year... -- $ -- 297,000 $4.58
Granted.......................... 297,000 4.58 1,390,000 4.17
Forfeited or canceled............ -- -- (150,000) 4.43
Exercised........................ -- -- (69,000) 4.12
------- ----- --------- -----
Outstanding, end of year......... 297,000 $4.58 1,468,000 $4.23
======= ===== ========= =====
Exercisable, end of year......... -- $ -- 263,000 $4.45
======= ===== ========= =====
Weighted average fair value of
options granted during the
year........................... $3.42 $2.20
===== =====
</TABLE>

The status of stock options outstanding and exercisable under the Plan as
of December 31, 1998 is as follows:

<TABLE>
<CAPTION>
STOCK OPTIONS OUTSTANDING
---------------------------------------- STOCK OPTIONS EXERCISABLE
WEIGHTED --------------------------
AVERAGE WEIGHTED
RANGE OF REMAINING WEIGHTED AVERAGE
EXERCISE NUMBER OF CONTRACTUAL AVERAGE NUMBER OF EXERCISE
PRICES SHARES LIFE EXERCISE PRICE SHARES PRICE
- ------------- --------- ----------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
$2.34 - $3.00 452,000 4.9 $2.93 -- $ --
$3.56 - $5.06 496,000 4.8 4.08 183,000 3.88
$5.44 - $5.88 520,000 5.9 5.49 80,000 5.75
--------- --- ----- ------- -----
1,468,000 5.2 $4.23 263,000 $4.45
========= === ===== ======= =====
</TABLE>

PRO FORMA FAIR VALUE DISCLOSURES

The fair value of each option grant is calculated on the date of grant
using the Black-Scholes option pricing model with the following weighted average
assumptions:

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------
1997 1998
--------- ---------
<S> <C> <C>
Risk-free interest rate.............................. 5.5% 5.0%
Expected dividend yield.............................. 0% 0%
Expected lives outstanding........................... 4.4 years 4.0 years
Expected volatility.................................. 104% 76%
</TABLE>

Cumulative compensation costs recognized in pro forma net income or loss
with respect to options that are forfeited prior to vesting are adjusted as a
reduction of pro forma compensation expense in the period of forfeiture.

F-21
<PAGE> 81
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Had compensation cost for the Plan been determined based upon the fair
value on the date of grant, the Company's net loss would have been increased to
the following pro forma amounts for the years ended December 31, 1998 and 1997:

<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Net loss:
As reported.................................... $(4,107,000) $(3,933,000)
=========== ===========
Pro forma...................................... $(4,227,000) $(5,569,000)
=========== ===========
Basic and diluted net loss per share:
As reported.................................... $ (1.47) $ (1.10)
=========== ===========
Pro forma...................................... $ (1.51) $ (1.56)
=========== ===========
</TABLE>

(10) SEGMENT REPORTING

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131 requires
disclosure of operating segments, which as defined, are components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance.

The Company operates in three different segments: NetSolutions, Online
Automotive Solutions ("Automotive"), and Product Distribution. Management has
chosen to organize the Company around these segments based on differences in
products and services.

NetSolutions provides custom solutions, including the architecture, design,
development and integration of high tech solutions, utilizing Web technology.
Automotive provides total online automotive solutions through its Web sites, in
addition to providing custom solutions to companies in or with relationships in
the automotive industry. Product Distribution provides the resale and
configuration of third party software and hardware components, graphical
printers and supplies.

Segment operations are measured consistent with the accounting policies
used in these consolidated financial statements.

The following provides information on the Company's segments:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1998
-----------------------------------------------------------
NET- PRODUCT
SOLUTIONS AUTOMOTIVE DISTRIBUTION CORPORATE TOTAL
--------- ---------- ------------ --------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues from external
customers................. $ 5,443 $ 939 $2,173 $ -- $ 8,555
======= ======= ====== ====== =======
(Loss) income from
operations................ $(1,182) $(2,151) $ 137 $ (353)(1) $(3,549)
======= ======= ====== ====== =======
Identifiable assets......... $ 1,607 $ 987 $ 640 $2,031(2) $ 5,265
======= ======= ====== ====== =======
</TABLE>

F-22
<PAGE> 82
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1997
-----------------------------------------------------------
NET- PRODUCT
SOLUTIONS AUTOMOTIVE DISTRIBUTION CORPORATE TOTAL
--------- ---------- ------------ --------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues from external
customers................. $ 2,359 $ 223 $3,426 $ -- $ 6,008
======= ======= ====== ===== =======
(Loss) income from
operations................ $(2,493)(3) $(1,268) $ 135 $(257)(1) $(3,883)
======= ======= ====== ===== =======
</TABLE>

- -------------------------
(1) Corporate loss from operations represents depreciation expense.

(2) Corporate assets are those that are not directly identifiable to a
particular segment and includes cash, restricted cash, property and
equipment and prepaids and other assets.

(3) Included in NetSolutions loss from operations in fiscal 1997 is the
impairment of goodwill for $1,305,000.

(11) DEFINED CONTRIBUTION PLAN

The Company has a 401(k) profit sharing plan (the "Plan"). Eligible
employees may make voluntary contributions to the Plan. The amount of employee
contributions is limited as specified in the Plan. The Company may, at its
discretion, make additional contributions to the Plan. The Company made no
contributions in 1997 or 1998.

(12) SUBSEQUENT EVENT

On February 12, 1999, the Company issued notice of a call regarding
2,043,626 of redeemable warrants to purchase common stock. As discussed above in
Note 9, these warrants are redeemable by the Company at $0.05 per warrant upon
30 days notice if the market price of the common stock for 20 consecutive
trading days within the 30 day period preceding the date the notice is given
equals or exceeds $8.40. Each warrant could be exercised during the notice
period for one common share at a price of $7.20 per share. The exercise period
for the warrants expired on March 16, 1999 and as of the close of trading,
1,920,940 warrants were exercised for common stock generating approximately
$13,808,000 of net proceeds to the Company.

(13) WFC HOLDINGS CORPORATION INVESTMENTS

In May of 1999, the Company formed a newly wholly-owned subsidiary called
DriveOff.com Inc., which consists of all the net assets and operations of the
Company's Automotive segment.

On July 23, 1999, WFC Holdings Corporation ("WFC"), a subsidiary of Wells
Fargo & Company, committed to make a strategic investment of $25 million in the
Company and DriveOff.com. Closing of the transactions is subject to customary
closing conditions and, also, the execution of a co-marketing agreement and long
term consulting agreement under which the Company and DriveOff.com will provide
additional services to Wells Fargo. The parties expect to close both
transactions in August of 1999.

F-23
<PAGE> 83
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For its $10 million investment in the Company, WFC will receive 380,000
shares of common stock and a $6.2 million promissory note convertible into
620,000 shares of the Company's voting or non-voting stock. For its $15 million
investment in DriveOff.com, WFC will receive a note convertible into 3.2 million
shares or twenty percent of DriveOff.com's preferred stock outstanding as of the
closing of the transaction. WFC will also receive a five-year warrant for an
additional 160,000 shares of DriveOff.com, exercisable one year after the
transaction's closing at $6.5625 per share.

F-24
<PAGE> 84

NAVIDEC, INC.

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
JUNE 30,
1999
------------
(UNAUDITED)
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................... $ 12,785,000
Accounts receivable, net of allowance for doubtful
accounts of $185,000................................... 1,780,000
Costs and estimated earnings in excess of billings........ 118,000
Inventories............................................... 440,000
Restricted cash........................................... 491,000
Prepaid expenses and other................................ 231,000
------------
Total current assets.............................. 15,845,000
------------
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
$912,000.................................................. 1,667,000
------------
OTHER ASSETS:
Goodwill and intangibles, net of accumulated amortization
of $162,000............................................ 557,000
Other..................................................... 1,000
------------
Total other assets................................ 558,000
------------
Total Assets...................................... $ 18,070,000
============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 581,000
Accrued liabilities....................................... 571,000
Notes payable............................................. 100,000
Current capital lease obligations......................... 136,000
------------
Total current liabilities......................... 1,388,000
------------
CAPITAL LEASE OBLIGATIONS, net current portion.............. 305,000
SHAREHOLDERS' EQUITY:
Common stock, no par value, 20,000,000 shares authorized,
7,394,000 shares issued and outstanding................ 27,526,000
Warrants for common stock................................. 364,000
Accumulated deficit....................................... (11,513,000)
------------
Total shareholders' equity........................ 16,377,000
------------
Total liabilities and shareholders' equity........ $ 18,070,000
============
</TABLE>

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

F-25
<PAGE> 85

NAVIDEC, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
(UNAUDITED) (UNAUDITED)
------------------------ -------------------------
1998 1999 1998 1999
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE.......................... $1,837,000 $ 3,776,000 $ 3,539,000 $ 8,233,000
COST OF REVENUE.................. 1,284,000 2,247,000 2,339,000 5,016,000
---------- ----------- ----------- -----------
GROSS PROFIT..................... $ 553,000 $ 1,529,000 $ 1,200,000 $ 3,217,000
OPERATING EXPENSES
Product Development............ 315,000 779,000 642,000 1,520,000
General & Administrative....... 658,000 1,175,000 1,341,000 2,156,000
Selling & Marketing............ 145,000 1,282,000 247,000 2,016,000
---------- ----------- ----------- -----------
Total Operating
Expenses............. 1,118,000 3,236,000 2,230,000 5,692,000
---------- ----------- ----------- -----------
LOSS FROM OPERATIONS............. $ (565,000) $(1,707,000) $(1,030,000) $(2,475,000)
OTHER INCOME (EXPENSES) Interest,
net............................ $ 12,000 $ 120,000 $ (4,000) $ 112,000
Other....................... (5,000) (13,000) (5,000) 1,000
---------- ----------- ----------- -----------
Total other income
(expenses)........... $ 7,000 $ 107,000 $ (9,000) $ 113,000
---------- ----------- ----------- -----------
NET LOSS......................... $ (558,000) $(1,600,000) $(1,039,000) $(2,362,000)
========== =========== =========== ===========
NET LOSS PER SHARE BASIC AND
DILUTED........................ $ (.16) $ (.22) $ (.30) $ (.37)
BASIC AND DILUTED WEIGHTED-
AVERAGE COMMON SHARES
OUTSTANDING...................... 3,585,000 7,349,000 3,410,000 6,353,000
</TABLE>

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

F-26
<PAGE> 86

NAVIDEC, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED

<TABLE>
<CAPTION>
JUNE 30,
-------------------------
1998 1999
----------- -----------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................... $(1,039,000) $(2,362,000)
Adjustments to reconcile net loss to net cash used in
operating activities-
Depreciation and amortization..................... 307,000 257,000
Provision for bad debt............................ 24,000 60,000
Changes in operating assets and liabilities-
Accounts receivable............................ (318,000) 327,000
Costs and estimated earnings in excess of
billings..................................... (197,000) (11,000)
Inventories.................................... 197,000 (99,000)
Restricted cash................................ -- (211,000)
Other assets................................... (8,000) (173,000)
Accounts payable............................... 23,000 (1,270,000)
Accrued liabilities............................ 69,000 148,000
----------- -----------
Net cash used in operating activities.......... (942,000) (3,334,000)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.................... (430,000) (581,000)
----------- -----------
Net cash used in investing activities.......... (430,000) (581,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from factoring of accounts receivable......... 752,000 257,000
Payments to factor..................................... (846,000) (460,000)
Proceeds from issuance of common stock and warrants.... 1,551,000 16,940,000
Proceeds from related party note receivable............ 40,000 --
Payments on notes payable and capital leases........... (87,000) (748,000)
----------- -----------
Net cash provided by financing activities...... 1,410,000 15,989,000
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS................ 38,000 12,074,000
CASH AND CASH EQUIVALENTS, beginning of period........... 369,000 711,000
----------- -----------
CASH AND CASH EQUIVALENTS, end of period................. $ 407,000 $12,785,000
----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.............................. $ 18,000 $ 57,000
----------- -----------
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Equipment acquired with capital leases.............. $ -- $ 300,000
----------- -----------
</TABLE>

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

F-27
<PAGE> 87

NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1999
(UNAUDITED)

(1) BASIS OF PRESENTATION AND MANAGEMENT OPINION

The unaudited financial statements and related notes to the financial
statements presented herein have been prepared by the Company pursuant to the
rules and regulations of the Securities and Exchange Commission. Accordingly,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations. The accompanying
financial statements were prepared in accordance with the accounting policies
used in the preparation of the Company's audited financial statements included
in its Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998,
and should be read in conjunction with such financial statements and notes
thereto.

In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary for a fair presentation of operating
results for the interim period presented have been made.

(2) ACQUISITIONS

(3) SHAREHOLDERS' EQUITY

WARRANTS AND OPTIONS REDEEMED AND EXERCISED IN 1999

On February 12, 1999 the Company called all publicly traded warrants. These
warrants entitled the holder to purchase one share of Common Stock for each
warrant for $7.20. 1,918,000 warrants were exercised prior to the expiration
date of March 15, 1999. The warrants generated $13,809,000 net of offering costs
of approximately $100,000. In addition the Company issued 200,000 warrants to
representatives for solicitation for the exercise of the warrants.

During the first six months of 1999, VSI Holdings exercised a warrant on
177,175 shares of stock at $4.50 per share resulting in proceeds to the Company
of $797,000. In addition, during the first six months of 1999 the Company had
322,000 broker warrants exercised resulting in net proceeds of $1,295,000 and
268,000 employee options exercised resulting in $1,039,000.

F-28
<PAGE> 88
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(4) COMPREHENSIVE INCOME

In June, 1997 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
130"). SFAS 130 defines comprehensive income as all changes in shareholder
equity exclusive of transactions with owners, such as capital investments.
Comprehensive income includes net income or loss, changes in certain assets and
liabilities that are reported directly in equity such as translation adjustments
on investments in foreign subsidiaries, and certain changes in minimum pension
liabilities. The Company's comprehensive loss was equal to its net loss for the
six-month periods ended June 30, 1998 and 1999.

(5) NOTES PAYABLE

<TABLE>
<S> <C>
Notes payable consist of the following as of June 30, 1999:
Note payable; interest at 9%, due on October 18, 1999,
secured by assets of LeaseSource....................... $100,000
Less current portion................................... (100,000)
--------
Long-term portion................................. $ --
========
</TABLE>

(6) SEGMENT REPORTING

Segment operations are measured consistent with the accounting policies
used in these consolidated financial statements.

F-29
<PAGE> 89
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following provides information on the Company's segments:

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JUNE 30, 1999
(IN THOUSANDS)
--------------------------------------------------------------
NET- PRODUCT
SOLUTIONS AUTOMOTIVE DISTRIBUTION CORPORATE TOTAL
--------- ---------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues from external
customers.................. $2,510 $ 875 $ 391 $ -- $ 3,776
====== ======= ====== ========== =======
Loss from operations......... $ (450) $ (964) $ (131) $ (162)(1) $(1,707)
====== ======= ====== ========== =======
Identifiable assets.......... $1,565 $ 622 $ 708 $ 15,175(2) $18,070
====== ======= ====== ========== =======
</TABLE>

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JUNE 30, 1998
(IN THOUSANDS)
--------------------------------------------------------------
NET- PRODUCT
SOLUTIONS AUTOMOTIVE DISTRIBUTION CORPORATE TOTAL
--------- ---------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues from external
customers.................. $1,051 $ 139 $ 647 $ -- $ 1,837
====== ======= ====== ========== =======
(Loss) income from
operations................. $ (248) $ (345) $ 77 $ (49)(1) $ (565)
</TABLE>

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 1999
(IN THOUSANDS)
--------------------------------------------------------------
NET- PRODUCT
SOLUTIONS AUTOMOTIVE DISTRIBUTION CORPORATE TOTAL
--------- ---------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues from external
customers.................. $5,601 $ 1,582 $1,050 $ -- $ 8,233
====== ======= ====== ========== =======
Loss from operations......... $ (358) $(1,838) $ (22) $ (257)(1) $(2,475)
====== ======= ====== ========== =======
Identifiable assets.......... $1,565 $ 622 $ 708 $ 15,175(2) $18,070
====== ======= ====== ========== =======
</TABLE>

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 1998
(IN THOUSANDS)
-------------------------------------------------------------
NET- PRODUCT
SOLUTIONS AUTOMOTIVE DISTRIBUTION CORPORATE TOTAL
--------- ---------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Revenues from external
customers................... $1,839 $ 504 $1,196 $ -- $ 3,539
====== ===== ====== ======== =======
Loss from operations.......... $ (486) $(461) $ 135 $ (218)(1) $(1,030)
====== ===== ====== ======== =======
</TABLE>

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

(1) Corporate loss from operations represents depreciation expense.

(2) Corporate assets are those that are not directly identifiable to a
particular segment and includes cash, restricted cash, property and
equipment and prepaids and other assets.

(7) SUBSEQUENT EVENT

On July 23, 1999, WFC Holdings Corporation ("WFC"), a subsidiary of Wells
Fargo & Company, committed to make a strategic investment of $25 million in the
Company and DriveOff.com. Closing of the transactions are subject to customary
closing conditions and, also, the execution of a co-marketing agreement and long
term consulting agreement under which the Company and DriveOff.com will provide
additional services to Wells Fargo. The parties expect to close both
transactions in August of 1999.
F-30
<PAGE> 90
NAVIDEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

For its $10 million investment in the Company, WFC will receive 380,000
shares of common stock and a $6.2 million promissory note convertible into
620,000 shares of the Company's non-voting stock. For its $15 million investment
in DriveOff.com, WFC will receive a note convertible into twenty percent of
DriveOff.com's preferred stock outstanding as of the closing of the transaction.
WFC will also receive a five-year warrant for an additional 160,000 shares of
DriveOff.com, exercisable one year after the transaction's closing at $6.5625
per share.

F-31
<PAGE> 91

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

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH
WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................. 2
Risk Factors........................ 7
About this Prospectus............... 21
Use of Proceeds..................... 21
Price Range of Our Common Stock..... 22
Dividend Policy..................... 23
Capitalization...................... 23
Dilution............................ 24
Selected Consolidated Historical
Financial Data.................... 25
Management's Discussion and Analysis
of Financial Condition and Results
of Operations..................... 27
Quantitative and Qualitative
Disclosures About Market Risk..... 34
Recent Developments................. 34
Navidec's Business.................. 36
Where You Can Find More
Information....................... 50
Incorporation of Certain Documents
by Reference...................... 50
Management.......................... 51
Principal and Selling
Shareholders...................... 54
Underwriting........................ 55
Legal Matters....................... 57
Experts............................. 57
Index to Financial Statements....... F-1
</TABLE>

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

NAVIDEC, INC.

[LOGO]

2,500,000 SHARES

COMMON STOCK
----------------
PROSPECTUS
----------------
FIRST SECURITY VAN KASPER
ADVEST, INC.

, 1999
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 92

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $ 7,893
NASD filing fee............................................. 3,340
Nasdaq National Market filing fee........................... 75,625
Legal fees and expenses..................................... 240,000
Accounting fees and expenses................................ 25,000
Blue Sky fees and expenses.................................. 10,000
Printing fees and expenses.................................. 300,000
Transfer Agent and Registrar fees........................... 5,000
Miscellaneous expenses...................................... 333,142
----------
Total.................................................. $1,000,000
==========
</TABLE>

All expenses other than the Securities and Exchange Commission filing fee
are estimated. All expenses will be borne by the Company.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant's articles of incorporation eliminate the personal liability
of directors to the Registrant or its shareholders for monetary damages for
breach of fiduciary duty to the extent permitted by Colorado law. The
Registrant's articles of incorporation and bylaws provide that the Registrant
shall indemnify its officers and directors to the extent permitted by Colorado
law, which authorizes a corporation to indemnify directors, officers, employees
or agents of the corporation in non-derivative suits if such party acted in good
faith and in a manner such party reasonably believed to be in or not opposed to
the best interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The Colorado Business Corporation Act further provides that indemnification
shall be provided if the party in question is successful on the merits or
otherwise.

The underwriting agreement filed as Exhibit 1 to this registration
statement provides for indemnification by the underwriters of Navidec and our
officers and directors for certain liabilities arising under the Securities Act
or otherwise.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NO.
- -------
<S> <C>
1 Form of Underwriting Agreement*
5 Opinion of Benesch, Friedlander, Coplan & Aronoff LLP,
counsel for the Company*
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Hein + Associates LLP
23.3 Consent of Benesch, Friedlander, Coplan & Aronoff LLP
(included as part of Exhibit 5)*
24 Power of Attorney (included in Part II of this Registration
Statement)
</TABLE>

- -------------------------
* To be filed by amendment.

II-1
<PAGE> 93

(b) Financial Statement Schedules

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this registration statement as of the time it was declared
effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.

II-2
<PAGE> 94

SIGNATURES

Pursuant to 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 S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized on the 6th day of August, 1999.

NAVIDEC, INC.

By: /s/ J. RALPH ARMIJO
-----------------------------------
J. Ralph Armijo,
Chairman of the Board of
Directors,
President and Chief Executive
Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints J. Ralph Armijo and Patrick R. Mawhinney or any
of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent 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 attorney-in-fact, agent,
or his substitute may lawfully do or cause to be done by virtue hereof.

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.

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

/s/ J. RALPH ARMIJO Chairman of the Board of August 6, 1999
- ------------------------------- Directors, President, Chief
J. Ralph Armijo Executive Officer and Director

/s/ PATRICK R. MAWHINNEY Chief Financial Officer, August 6,1999
- ------------------------------- Treasurer, Secretary and
Patrick R. Mawhinney Director

/s/ MICHAEL KRANITZ Director August 6, 1999
- -------------------------------
Michael Kranitz

/s/ ANDREW DAVIS Director August 6, 1999
- -------------------------------
Andrew Davis

Director
- -------------------------------
Lloyd G. Chavez, Jr.

/s/ GERALD A. MARRONEY Director August 6, 1999
- -------------------------------
Gerald A. Marroney

/s/ JAMES HOSCH Director August 6, 1999
- -------------------------------
James Hosch
</TABLE>

II-3
<PAGE> 95

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C> <C>
1 Form of Underwriting Agreement*
5 Opinion of Benesch, Friedlander, Coplan & Aronoff LLP,
counsel for the Company*
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Hein + Associates LLP
23.3 Consent of Benesch, Friedlander, Coplan & Aronoff LLP
(included as part of Exhibit 5)*
24 Power of Attorney (included in Part II of this Registration
Statement)
</TABLE>

- -------------------------
* To be filed by amendment.

<PAGE> 1
EXHIBIT 23.1

[ARTHUR ANDERSEN LLP LETTERHEAD]

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
included in this registration statement and to the incorporation by reference
in this registration statement of our report dated March 23, 1999 included in
Navidec, Inc.'s Form 10-K for the year ended December 31, 1998 and to all
references to our Firm included in this registration statement.

ARTHUR ANDERSEN LLP

Denver, Colorado
August 6, 1999

<PAGE> 1

Exhibit 23.2

INDEPENDENT AUDITOR'S CONSENT

We consent to the use of our report and to the incorporation by reference of
our report dated March 5, 1998 accompanying the financial statements of
NAVIDEC, Inc. in the Form S-3 Registration Statement of NAVIDEC, Inc. and to
the use of our name and the statements with respect to us, as appearing under
the heading "Experts" in the Registration Statement.

HEIN & ASSOCIATES LLP

Denver, Colorado
August 6, 1999