VIEWLOCITY INC, S-1/A, 2000-11-03

VIEWLOCITY INC
S-1/A, 2000-11-03
BUSINESS SERVICES, NEC

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 3, 2000

REGISTRATION NO. 333-43568
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------

AMENDMENT NO. 3
TO

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------

VIEWLOCITY, INC.

(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 7372 58-2494122
(State or other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

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

3475 PIEDMONT ROAD
SUITE 1700
ATLANTA, GEORGIA 30305
(404) 267-6400
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
------------------------------

MR. GREGORY CRONIN
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
VIEWLOCITY, INC.
3475 PIEDMONT ROAD, SUITE 1700
ATLANTA, GEORGIA 30305
(404) 267-6400
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
------------------------------

COPIES TO:

<TABLE>
<S> <C>
DAVID M. CALHOUN, ESQ. JOHN J. KELLEY III, ESQ.
BROOKS W. BINDER, ESQ. KING & SPALDING
BRANDY A. BAYER, ESQ. 191 PEACHTREE STREET
MORRIS, MANNING & MARTIN, L.L.P. ATLANTA, GEORGIA 30303
1600 ATLANTA FINANCIAL CENTER (404) 572-4600
3343 PEACHTREE ROAD, NE
ATLANTA, GEORGIA 30326-1044
(404) 233-7000
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement is declared effective.

If any of the securities being registered on this form are offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") please 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, 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(d)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING PRICE AGGREGATE AMOUNT OF REGISTRATION
SECURITIES TO BE REGISTERED AMOUNT TO BE REGISTERED PER SHARE OFFERING PRICE (1) FEE
<S> <C> <C> <C> <C>
Common stock, par value
$.01 per share......... 6,325,000 $14.00 $88,550,000 $23,378 (2)
</TABLE>

(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.

(2) Previously paid.
--------------------------

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

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission becomes effective. This prospectus is not an
offer to sell these securities and it is not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not permitted.
<PAGE>

SUBJECT TO COMPLETION, DATED NOVEMBER 3, 2000

PROSPECTUS

5,500,000 Shares

[LOGO]

Common Stock

This is an initial public offering of common stock by Viewlocity, Inc. We
are selling 5,500,000 shares of common stock. We anticipate that the initial
public offering price will be between $12.00 and $14.00 per share.

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

Prior to this offering, there has been no public market for our common
stock. We have applied to have the shares of our common stock listed for
quotation on the Nasdaq National Market under the symbol VIEW.

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

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

A selling stockholder has granted the underwriters an option for a period of
30 days to purchase up to 825,000 additional shares of common stock. We will not
receive any of the proceeds from the sale of shares by the selling stockholder.

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

Investing in our common stock involves a high degree of risk.
See "Risk Factors" beginning on page 7.

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

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

CHASE H&Q BEAR, STEARNS & CO. INC.
WIT SOUNDVIEW

, 2000
<PAGE>
[Artwork Depicted in Prospectus]

1. Inside front page portrays the following:

The title bar at the top of the page states: "A Comprehensive View Across
Trading Partners."

In the center of the page is a screen shot from Viewlocity's TradeSync-TM-
Inventory Visibility product, overlapped with a screen shot from Viewlocity's
TradeSync-TM- Shipment Visibility product.

In the bottom left of the page is a picture of a man using a notebook
computer. Radiating outward below this picture are five pictures. The first
picture in the left corner is a picture of a factory, above which is the text
"Enterprise Resource Planning." Next, is a picture of a train, above which is
the text "Rail Tracking." Next is a picture of a warehouse with trucks at
loading docks, above which is the text "Warehouse Systems." Next is a picture of
a truck, above which is the text "Transportation Systems." The last picture is a
picture of a man arranging products on shelves, above which is the text
"Customer Systems." There are five arrows running from left to right underneath
the five pictures. Below the pictures is the text "A New Internet-based Approach
to Connecting Disparate Systems Among Trading Partners."

In the bottom right corner of the page is the stylized Viewlocity logo.

2. Inside front gate-fold portrays the following:

The title bar at the top right of the page states "Viewlocity provides
Supply Web Solutions."

On the left side of the page are four connected hub-and-spoke diagrams, each
consisting of a hub of two concentric circles with spokes radiating outward and
circles attached to the spokes. In the center of the top hub-and-spoke diagram
is a picture of a power plant. Above the diagram is the text "Manufacturer." In
the center of the left hub-and-spoke diagram is a picture of a warehouse.
Underneath the diagram is the text "Procurement Marketplace." In the center of
the right hub-and-spoke diagram is a picture of a person at a computer holding a
credit card. Underneath the diagram is the text "Internet Retailer." In the
center of the bottom hub-and-spoke diagram is the picture of a truck. Underneath
the diagram is the text "Logistics Service Provider."

On the right side of the page are five bullets of text. The first bullet
states "Integrate diverse software applications." The second bullet states
"Simplify information technology connections with trading partners." The third
bullet states "Monitor logistics within the supply web." The fourth bullet
states "Correct supply web problems proactively." The fifth bullet states
"Manage trading partner transactions."

In the bottom right corner of the page is the stylized Viewlocity logo.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Prospectus Summary.......................................... 3

Risk Factors................................................ 7

Forward-Looking Statements.................................. 18

Use of Proceeds............................................. 18

Dividend Policy............................................. 18

Capitalization.............................................. 19

Dilution.................................................... 20

Selected Consolidated Financial Data........................ 21

Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 22

Business.................................................... 39

Management.................................................. 55

Related Party Transactions.................................. 63

Principal and Selling Stockholders.......................... 67

Description of Capital Stock................................ 69

Shares Eligible for Future Sale............................. 72

Underwriting................................................ 74

Legal Matters............................................... 76

Experts..................................................... 76

Where You Can Find More Information......................... 77

Index to Consolidated Financial Statements.................. F-1
</TABLE>

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

In this prospectus, "Viewlocity," "us," we" and "our" refer to
Viewlocity, Inc. and its subsidiaries, unless the context otherwise requires.

AMTRIX-REGISTERED TRADEMARK-, TRADESYNC-TM- AND VIEWLOCITY-TM- ARE OUR
TRADEMARKS. THIS PROSPECTUS ALSO INCLUDES TRADEMARKS, SERVICE MARKS AND TRADE
NAMES OF OTHER COMPANIES.

2
<PAGE>
PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. THIS SUMMARY MAY NOT CONTAIN ALL THE INFORMATION YOU SHOULD CONSIDER
BEFORE INVESTING IN OUR COMMON STOCK. YOU SHOULD READ THE ENTIRE PROSPECTUS
CAREFULLY, INCLUDING "RISK FACTORS" AND THE CONSOLIDATED FINANCIAL STATEMENTS
AND RELATED NOTES THERETO, BEFORE MAKING AN INVESTMENT DECISION.

VIEWLOCITY, INC.

WHO WE ARE

We are a leading global provider of e-business software and services that
enable integration and synchronization of web-enabled trading communities.
Web-enabled trading communities, also referred to as trading communities,
consist of a variety of trading partners that have a collective business
interest and a general method established to conduct business-to-business, or
B2B, e-commerce. Our software and related services synchronize and automate
business processes and information flows across Internet-based networks of
suppliers, manufacturers, distributors, customers and other trading partners,
known as supply webs, and allow trading communities and their members to conduct
B2B e-commerce in real-time. Our TradeSync family of products includes B2B
integration products -- AMTrix, TradeSync Integration Connectors, TradeSync
Connector Development Platform and TradeSync Process Manager -- and supply web
synchronization products -- TradeSync Inventory Visibility and TradeSync
Shipment Visibility. By employing our TradeSync family of products, trading
partners can connect to a common network, monitor shared supply web activities,
synchronize and manage interactive business processes and react quickly to
dynamic events, while retaining their existing information technology, or IT,
systems.

Our B2B integration software and services provide integration both within a
single trading partner's enterprise and across multiple trading partners by
connecting disparate software, a variety of databases and multiple communication
protocols. Our supply web synchronization software provides applications for
managing the flow of goods and services throughout supply webs. Our software and
services provide our customers the ability to interact with their trading
partners during all phases of the supply process, from manufacturing to order to
fulfillment. Our software can be implemented quickly and can create measured
benefits to our customers by accelerating their time to market, increasing their
market share and revenue opportunities, reducing their costs and improving
customer satisfaction.

We provide e-business software and services that offer business value by
combining integration software with supply web domain expertise and software
designed specifically for the Internet. We have implemented software that
automates, extends and synchronizes the supply web operations of multi-national
consumer products companies, leading logistics service providers and online
trading communities. We generate revenue principally through the licensing of
our TradeSync family of products and from related support and professional
services. During the periods prior to June 30, 2000, we derived all our revenue
from the licensing of AMTrix and related TradeSync Integration Connector and
Connector Development Platform products and from professional services
supporting these products. We introduced our TradeSync Process Manager and
TradeSync supply web synchronization products in the second quarter of fiscal
2000 and made them generally available in the third quarter of fiscal 2000. For
the nine months ended September 30, 2000, we derived 96.6% of our license
revenue from AMTrix and related TradeSync Integration Connector and Connector
Development Platform products. As of September 30, 2000, we had over 1,000
customers worldwide with over 3,200 product implementations.

OUR MARKET

As new business models emerge during the rapid evolution of Internet-based
collaboration among businesses and the related formation of trading communities,
integration and synchronization become essential to this new environment. We
believe that to remain competitive, trading communities must fully synchronize
the logistics operations of their trading partners. This increases the pressure
placed upon all

3
<PAGE>
members of the extended supply web to integrate, automate and improve the
efficiency of all supply web transactions. We believe that other providers do
not offer a comprehensive product suite that combines both B2B integration
software and supply web synchronization software. As a result, our competitors
often must partner with other providers to provide a comprehensive product
suite. A significant opportunity exists to provide companies with the ability to
accelerate their time to market globally and to synchronize their supply webs,
leveraging the full potential of trading communities.

OUR STRATEGY

Our strategy is to strengthen our position as a leading global provider of
comprehensive software and services that integrate trading communities and
synchronize supply webs. We intend to increase our supply web domain expertise
through research and development and additional personnel. Our sales strategy is
to focus on selected high-growth, global markets, including third-party
logistics, technology, consumer packaged goods, e-commerce and traditional
retail and apparel. We intend to support and leverage our existing customers and
to increase our visibility to prospective customers within their existing
trading communities. We also will continue to pursue acquisitions and
investments in complementary businesses that provide us with the opportunity to
enhance our software and service offerings and add new distribution channels.

COMPANY INFORMATION

We were incorporated in Delaware in February 1999. Prior to our
incorporation, our business was a division of Frontec AB, a Swedish corporation
publicly traded on the OM Stock Exchange (formerly the Stockholm Stock
Exchange). Frontec AB marketed our AMTrix product through subsidiaries that we
now wholly own. Our company was formed with the existing assets and operations
of Frontec AB's AMTrix software division. Subsequent to our separation from
Frontec AB, we have financed our operations primarily through private sales of
convertible preferred stock to third-party investors. Frontec AB remains a
significant stockholder of our company, and upon the completion of this offering
Frontec AB will own approximately 34.9% of our common stock, or 32.7% if the
underwriters exercise their overallotment option. Frontec AB has one
representative on our board of directors. We continue to maintain a commercial
relationship with Frontec AB, which includes the grant to Frontec AB of a
non-exclusive, world-wide right to market, sublicense and service our AMTrix
product line.

We operate 20 offices located in 11 countries. As of September 30, 2000, we
had a total of 453 employees, of which 176 employees were located in our U.S.
offices and 277 employees were located in our international offices. For the
nine months ended September 30, 2000, we derived 65.5% of our revenue from
international sources. As of September 30, 2000, we had an accumulated deficit
of approximately $100.5 million. We expect to continue to devote substantial
financial and other resources to developing enhancements to our existing
products, introducing new products and expanding our professional services,
sales and marketing activities. As a result we anticipate incurring operating
and net losses for the foreseeable future.

Our headquarters are located at 3475 Piedmont Road, Suite 1700, Atlanta,
Georgia 30305, our telephone number is (404) 267-6400 and our web site address
is WWW.VIEWLOCITY.COM. Information contained on our web site does not constitute
part of this prospectus, and you should rely only on the information contained
in this prospectus in deciding whether to invest in our common stock.

4
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Common stock offered by Viewlocity................. 5,500,000 shares

Common stock to be outstanding after this 38,414,297 shares
offering.........................................

Use of proceeds.................................... For repayment of debt, expansion of our business
and general corporate purposes, including
working capital, sales and marketing, product
development and potential acquisitions. See "Use
of Proceeds."

Proposed Nasdaq National Market symbol............. VIEW
</TABLE>

The number of shares to be outstanding after this offering is based on the
number of shares outstanding as of September 30, 2000, and does not include the
following:

- 3,961,660 common shares subject to options outstanding as of
September 30, 2000, at a weighted average exercise price of $5.34 per
share;

- 316,092 common shares subject to warrants outstanding as of September 30,
2000, at a weighted average exercise price of $2.54 per share; and

- 865,838 additional common shares reserved for issuance under our stock
incentive plans and 2,500,000 common shares reserved for issuance under
our employee stock purchase plan as of September 30, 2000.

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

EXCEPT AS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS:

- REFLECTS THE ISSUANCE OF AN ASSUMED AGGREGATE OF 5,043,956 SHARES OF OUR
SERIES B CONVERTIBLE PREFERRED STOCK UPON THE CASHLESS EXERCISE OF
OUTSTANDING WARRANTS, THE CONVERSION OF ALL OUTSTANDING SHARES OF OUR
SERIES A, B, D AND E CONVERTIBLE PREFERRED STOCK INTO AN AGGREGATE OF
14,757,844 SHARES OF OUR COMMON STOCK, AND THE CONVERSION OF ALL
OUTSTANDING SHARES OF OUR SERIES C CONVERTIBLE PREFERRED STOCK INTO AN
ASSUMED 1,576,923 SHARES OF OUR COMMON STOCK, EACH OF WHICH WILL OCCUR
IMMEDIATELY UPON THE COMPLETION OF THIS OFFERING;

- REFLECTS A ONE-FOR-TWO REVERSE STOCK SPLIT OF OUR COMMON STOCK EFFECTIVE
ON SEPTEMBER 21, 2000, WHEREBY EVERY TWO SHARES OF OUR COMMON STOCK WERE
CONVERTED AND RECLASSIFIED INTO ONE SHARE OF COMMON STOCK, THEREBY
REDUCING THE NUMBER OF ISSUED AND OUTSTANDING SHARES OF COMMON STOCK AND
THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF OUR
CONVERTIBLE PREFERRED STOCK OR UPON EXERCISE OF OUTSTANDING OPTIONS AND
WARRANTS TO PURCHASE COMMON STOCK;

- REFLECTS THE AMENDMENT AND RESTATEMENT OF OUR CERTIFICATE OF INCORPORATION
AND BYLAWS, WHICH ARE EFFECTIVE UPON THE COMPLETION OF THIS OFFERING; AND

- ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION.

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA

The following is a summary of the consolidated financial data for our
company. You should read this information together with the consolidated
financial statements and the related notes appearing at the end of this
prospectus and the information under "Management's Discussion and Analysis of
Financial Condition and Results of Operations." The pro forma consolidated
balance sheet data below gives effect to the issuance of an assumed aggregate of
5,043,956 shares of our Series B convertible preferred stock upon the cashless
exercise of outstanding warrants, the conversion of all outstanding shares of
our Series A, B, D and E convertible preferred stock into an aggregate of
14,757,844 shares of our common stock, and the conversion of all outstanding
shares of our Series C convertible preferred stock into an assumed 1,576,923
shares of our common stock, each of which will occur immediately upon the
completion of this offering, as if the exercise and conversion occurred on
September 30, 2000. We calculated the number of weighted average shares used in
computing the pro forma basic and diluted net loss per share assuming the
conversion of all shares of convertible preferred stock outstanding as of
September 30, 2000, into common stock as if the shares of preferred stock had
converted into common stock immediately upon issuance. Accordingly, accretion to
redemption value is not included in the calculation of pro forma basic and
diluted net loss per share. The pro forma as adjusted consolidated balance sheet
data summarized below also reflects the sale of the common stock in this
offering after deducting underwriting discounts and estimated offering expenses
payable by us.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------ -------------------
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenue..................................................... $11,694 $13,664 $ 19,448 $ 15,368 $ 26,038
Gross profit................................................ 7,430 7,325 8,264 7,412 13,104
Operating loss.............................................. (9,643) (9,469) (20,340) (11,116) (43,362)
Net loss.................................................... (9,661) (9,630) (20,413) (11,188) (43,172)
Net loss attributable to common stockholders................ (9,661) (9,630) (23,646) (11,188) (61,533)
Net loss per share:
Basic and diluted......................................... $ (0.57) $ (0.57) $ (1.39) $ (0.66) $ (3.82)
======= ======= ======== ======== ========
Weighted average shares used in computation............... 17,031 17,031 17,031 17,031 16,098
======= ======= ======== ======== ========
Pro forma net loss per share (unaudited):
Basic and diluted......................................... $ (0.92) $ (1.50)
======== ========
Weighted average shares used in computation............... 22,168 28,835
======== ========
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
----------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 6,647 $ 6,647 $ 69,502
Working capital............................................. (6,157) (6,157) 59,188
Total assets................................................ 42,991 42,991 105,846
Capital lease obligation, less current portion.............. 1,482 1,482 1,482
Redeemable, convertible preferred stock..................... 83,986 -- --
Total stockholders' equity (deficit)........................ (69,951) 14,035 79,380
</TABLE>

This table does not include:

- 3,961,660 common shares subject to outstanding options as of
September 30, 2000, at a weighted average exercise price of $5.34 per
share;

- 316,092 common shares subject to outstanding warrants as of September 30,
2000, at a weighted average exercise price of $2.54 per share; and

6
<PAGE>
RISK FACTORS

YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS AND ALL OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE PURCHASING OUR COMMON STOCK.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. ANY OF THE
FOLLOWING MATERIAL RISKS MAY HARM OUR BUSINESS AND OPERATING RESULTS AND MAY
RESULT IN A LOSS OF ALL OR PART OF YOUR INVESTMENT.

RISKS RELATED TO OUR BUSINESS

BECAUSE WE RETAINED A NEW MANAGEMENT TEAM IN 1999 AND IMPLEMENTED A NEW BUSINESS
STRATEGY, IT MAY BE DIFFICULT TO EVALUATE OUR BUSINESS AND PROSPECTS.

Prior to March 1999, our business was focused on traditional enterprise
application integration, or EAI, software and services. In March 1999, we
retained a new management team and developed a new business strategy focusing on
the expansion of e-business software and services for trading communities. These
changes have required that we implement this e-business strategy, develop
additional software and hire additional employees. We will continue to devote
substantial resources to implement our expanded strategy and products for
trading communities. As a result, our future profitability will be dependent
upon the market acceptance of this strategy.

WE HAVE NOT ACHIEVED PROFITABILITY TO DATE, WE EXPECT LOSSES IN THE FUTURE, AND
WE MAY NEVER ACHIEVE OR MAINTAIN PROFITABILITY.

We incurred operating losses of approximately $43.4 million in the nine
months ended September 30, 2000, and approximately $20.3 million, $9.5 million
and $9.6 million in the years ended 1999, 1998 and 1997, respectively. As of
September 30, 2000, we had an accumulated deficit of approximately
$100.5 million. Since our formation as an independent company in February 1999,
we have invested significantly in building our management team and attracting
product designers, software architects and supply chain and logistics experts.
As of September 30, 2000, we had a total of 453 employees compared to 240
employees as of December 31, 1999. We also have invested significantly in the
development of our software, incurring research and development expenses of
$11.4 million in the nine months ended September 30, 2000, and $4.0 million in
the year ended December 31, 1999. We expect to continue to devote substantial
financial and other resources to developing enhancements to our existing
products, introducing new products and expanding our professional services,
sales and marketing activities. As a result, we need to generate significant
revenue to achieve and maintain profitability. If we fail to achieve
profitability within the time frame expected by investors, it may adversely
affect the market price of our common stock. We cannot assure you that we will
be able to achieve profitability.

WE HAVE NOT BEEN ABLE TO FUND OUR OPERATIONS FROM CASH GENERATED BY OUR
BUSINESS, AND WE MAY NOT BE ABLE TO DO SO IN THE FUTURE, AND AS A RESULT, WE
WILL LIKELY NEED TO RAISE ADDITIONAL FUNDS IN THE FUTURE.

We have financed our operations to date principally through the private
placement of shares of our convertible preferred stock. We believe that
available cash and cash equivalents, including the net proceeds from our recent
private placements of our convertible preferred stock, and the net proceeds from
this offering, will be sufficient to meet our working capital and capital
expenditure needs under our current business plan for at least the next
12 months. After that, we will likely need to raise additional funds in order to
implement our current business plan. We cannot be certain that we will be able
to obtain additional financing on favorable terms, if at all. If we do not
complete this offering and are not able to obtain additional financing, we will
be required to modify our current business plan in order to reduce our costs and
expenditures and our plans for growth. We believe that we will be able to
successfully reduce the scope of our operations, if necessary. Our inability to
grow as planned may reduce our chances of achieving profitability, which, in
turn, may have an adverse effect on the market price of our common stock.

7
<PAGE>
OUR FUTURE REVENUE IS UNPREDICTABLE, AND WE EXPECT OUR QUARTERLY OPERATING
RESULTS TO FLUCTUATE, WHICH MAY CAUSE OUR COMMON STOCK PRICE TO DECLINE.

Our operating results have fluctuated in the past and may fluctuate
significantly in the future due to a variety of factors, many of which are
outside of our control, and fluctuations in our operating results may cause the
market price for our common stock to decline. In particular, we derive a
significant portion of our revenue in each quarter from a limited number of
customers that have relatively large orders and from a limited number of
companies that resell our products. The delay or failure to complete sales in a
particular quarter could reduce our revenue in that quarter and subsequent
quarters over which revenue from these sales likely would be recognized. In
addition, because our revenue from implementation, maintenance and training
services correlates with our license revenue, a decline in license revenue may
cause a decline in our services revenue in the same quarter or in subsequent
quarters. Because our operating results are volatile and difficult to predict,
we believe that comparisons of our quarterly operating results are not a good
indication of our future performance. Factors that may make our revenue
unpredictable or cause our operating results to fluctuate include the following:

- the market acceptance of, and demand for, our products and professional
services, including new products and enhancements of current products;

- any flexible pricing structure that we may adopt, including equity
investments in our customers and recurring revenue models, in lieu of our
typical license fees;

- the timing, amount and recognition of payments from customers;

- the revenue mix of our products and professional services;

- the amount and timing of our operating costs and capital expenditures;

- seasonality in the sales of our products and professional services, which
may differ by market; and

- the number, timing and significance of product enhancements and new
product introductions by competitors.

Any change in one or more of these factors, as well as others, may cause our
annual or quarterly operating results to fluctuate, which, in turn, may cause
the market price of our common stock to decline.

WE DEPEND ON OUR AMTRIX PRODUCT AND RELATED TRADESYNC INTEGRATION CONNECTOR AND
CONNECTOR DEVELOPMENT PLATFORM PRODUCTS FOR SUBSTANTIALLY ALL OF OUR REVENUE.

We currently derive substantially all of our revenue from the licensing of
our AMTrix product and related TradeSync Integration Connector and Connector
Development Platform products and related professional services. We expect
revenue from this product to continue to account for a significant portion of
our revenue for the foreseeable future. As a result, factors adversely affecting
the pricing of or demand for these products, such as competition and
technological change, may harm our business and operating results, including our
operating margins and revenue and may result in loss of market share.

THE MARKET ACCEPTANCE OF OUR PRODUCTS AND THE CONTINUED GROWTH OF OUR COMPANY
WILL DEPEND ON OUR ABILITY TO ENHANCE OUR EXISTING PRODUCTS, TO DEVELOP NEW
PRODUCTS AND TO PROMOTE OUR PROFESSIONAL SERVICES.

To be competitive, we must successfully introduce product enhancements,
develop new products and promote our professional services. Although we are able
to leverage our traditional integration products, our e-business integration and
supply web synchronization software are in their early stages and continue to
evolve. Any delays or failure to develop and introduce new products and
enhancements to existing products and promote our professional services may have
an adverse effect on our business and operating results, including an adverse
effect on our revenue growth, loss of market share, injury to our reputation or

8
<PAGE>
damage to our efforts to build brand awareness. The emerging nature of the
market for e-business integration and supply web synchronization software and
evolving customer needs requires that we continually improve the performance,
features and reliability of our products, as well as introduce new products.

A SIGNIFICANT DECREASE IN THE PRICE OF OUR COMMON STOCK FOLLOWING THIS OFFERING
MAY ADVERSELY IMPACT OUR LIQUIDITY AND CAPITAL RESOURCES AND MAKE IT MORE
DIFFICULT TO ATTRACT AND RETAIN EMPLOYEES AND TO FUND FUTURE ACQUISITIONS.

In the future, we will likely need to raise additional funds in order to
implement our current business plan. We anticipate that the principal means of
raising additional funds will be through the sale of equity securities,
including shares of our common stock or securities convertible into shares of
our common stock. A significant decrease in the price of our common stock
following this offering may limit our ability to raise capital through the sale
of equity securities to fund our operations.

Additionally, we anticipate that the use of equity-based compensation, such
as the grant of options and restricted stock, will be important to our ability
to attract and retain qualified employees. A significant decrease in the price
of our common stock following this offering may make our equity-based
compensation less attractive to our current and prospective employees. As a
result, a significant decrease in the price of our common stock may have an
adverse effect on our ability to attract and retain these employees. Further, we
may use shares of our common stock to fund a significant portion of the
consideration to be paid in future acquisitions. If our common stock does not
maintain a sufficient market value, or if potential acquisition candidates are
unwilling to accept our common stock as part of the consideration for the sale
of their businesses, we will be required to use our cash, if available, to make
these acquisitions. If we do not have sufficient cash resources, our growth
could be limited unless we are able to obtain additional capital through debt or
equity financings or other means.

WE FACE SIGNIFICANT COMPETITION FROM OTHER COMPANIES THAT HAVE GREATER RESOURCES
THAN WE DO.

The market for B2B integration products is highly competitive, and we expect
competition to increase in the future. Increased competition may result in
pricing pressures, reduced margins or the failure of our products to achieve or
maintain market acceptance, any of which may adversely affect our business and
operating results. Many of our current and potential competitors have
substantially greater financial, technical, marketing, distribution and other
resources than we do. As a result, they may be able to respond more quickly to
new or changing opportunities, technologies, industry standards or customer
requirements. In addition, many of our competitors have a greater presence in
the U.S. market than we do.

We currently compete with enterprise application integration, or EAI,
software vendors, including Extricity Inc., Mercator Software, Inc., New Era of
Networks, Inc., TIBCO Software Inc., Vitria Technology, Inc. and webMethods,
Inc. We also compete with software companies that develop and license electronic
data interchange, or EDI, formats and communications applications, including
General Electric Information Services, Inc., Peregrine Systems Inc. and Computer
Associates International, Inc. EAI companies provide software that allows many
different software applications to communicate and work with one another, while
EDI companies provide software and services which create and transport
electronic business information between different companies. We also compete
with traditional supply chain software companies, which provide software that
assists in the planning, purchase and transportation of materials used in a
company's business, enterprise resource planning, or ERP, companies, which
provide software that supports an integrated approach to managing a company's
financial and manufacturing operations, and transportation management system
software vendors, including Descartes Systems Group Inc. and i2 Technologies,
Inc. In addition, IT departments may adopt a proprietary standard that is
inoperable with our software or makes our software obsolete. We expect that
additional competitors will enter the market with competing products as the size
and visibility of the market opportunity increases.

9
<PAGE>
New technologies will likely increase the competitive pressures that we
face. The development of competing technologies by market participants or the
emergence of new industry standards may adversely affect our competitive
position. As a result of these and other factors, we may not be able to compete
effectively with current or future competitors.

WE RELY ON STRATEGIC RELATIONSHIPS TO IMPLEMENT AND MARKET OUR SOFTWARE
PRODUCTS, AND IF THESE RELATIONSHIPS END, OUR BUSINESS MAY BE HARMED.

We have entered into relationships with third-party systems integrators,
component assembly companies, hardware platform and software developers, service
providers and value-added resellers. These parties resell our products, market
our products and provide customer referrals. Our future growth will be limited
if we fail to work effectively with or increase the number of these entities. We
have derived, and anticipate that we will continue to derive, a significant
portion of our revenue from customers that license our products or purchase our
services through entities with which we have strategic relationships. During the
nine months ended September 30, 2000, revenue generated through these strategic
relationships accounted for 24.5% of our total revenue. However, we do not
believe that our relationship with any single one of these entities is material
to our business or operations. In most cases, these entities refer customers to
us, and we enter into license agreements directly with the customers.

Entities with which we have strategic relationships are not required to
market or promote our products and generally are not restricted from working
with competing software companies. Accordingly, our ability to maintain and
increase our revenue from this marketing channel will depend on the willingness
and ability of these third parties to devote sufficient resources and efforts to
marketing our line of products rather than the products of others. If these
relationships end, we will have to devote substantially more resources to the
distribution, sales and marketing, implementation and support of our products
than we would otherwise, and our efforts may not be as effective as those of
these third parties. We may in the future choose to enter into strategic
relationships that contain non-competition provisions, which may adversely
affect our ability to conduct our business in certain geographic areas.

WE DEPEND ON TECHNOLOGY LICENSED FROM THIRD PARTIES FOR USE IN OUR PRODUCTS, AND
IF WE LOSE ACCESS TO THESE TECHNOLOGIES, OUR BUSINESS MAY BE HARMED.

We license from third parties certain technologies that are incorporated
into our products. For example, we license the datamapper technology used in our
AMTrix product from TIE Commerce, Inc., pursuant to a license which we have
renewed through November 2002. Although other companies market datamapper
products, TIE Commerce is currently the sole supplier of the datamapper
technology used in our AMTrix product. The datamapper is a material component to
the operation of our AMTrix product and may not be available on commercially
reasonable terms, if at all, from another supplier. Because our products
incorporate software developed and maintained by third parties, we depend on
these third parties to deliver and support reliable products, enhance their
current products, develop new products on a timely and cost-effective basis and
respond to emerging industry standards and other technological changes. If we
lose access to these technologies, whether through the termination of licenses
or otherwise, or the third parties discontinue the support of their products, we
may experience delays in the implementation and delivery of our products, the
development and the introduction of new products and enhancements to our
existing products. Any of these delays may have an adverse effect on our
business and operating results, including a material adverse effect on our
revenue, loss of market share, failure to achieve market acceptance, increased
product development costs and diversion of development resources. In light of
the rapidly evolving nature of our industry, we believe that we will need to
continue to rely on technology from third-party vendors. There is no assurance
that technology from these vendors will continue to be available to us on
commercially reasonable terms, if at all.

10
<PAGE>
IF OUR PRODUCTS CONTAIN ERRORS, WE MAY LOSE CUSTOMERS AND REVENUE AND MAY EXPOSE
OURSELVES TO PRODUCT LIABILITY CLAIMS.

Our software products are complex and may contain undetected errors, or
bugs, that result in product failures. The occurrence of errors may result in a
loss of or delay in revenue, loss of market share, failure to achieve market
acceptance, increased product development costs, diversion of development
resources, injury to our reputation or damage to our efforts to build brand
awareness.

We also may be subject to product liability claims relating to our
customers' critical business operations. Much of our supply web software is
critical to the operations of our customers' businesses. Any failure in a
customer's supply web network may result in a claim for substantial damages
against us, regardless of our responsibility for the failure. Although we
maintain general liability insurance, we cannot assure you that this coverage
will continue to be available on reasonable terms or will be adequate to
indemnify us for all liability that may be imposed on us.

OUR INTERNATIONAL OPERATIONS PRODUCE A MAJORITY OF OUR REVENUES AND ARE SUBJECT
TO SPECIAL RISKS AND UNCERTAINTIES, WHICH MAY NEGATIVELY AFFECT OUR BUSINESS.

We have in the past and will in the future derive a significant portion of
our revenue from international operations. We generated approximately 65.5% of
our revenue from international operations during the nine months ended
September 30, 2000. Although we have significant experience with international
operations and the localization of our products for foreign markets, our
international operations require significant management attention and financial
resources and are subject to a number of risks and uncertainties, including:

- the costs and complexity of staffing and managing widely dispersed foreign
operations, including the ability to identify, attract and retain
qualified managers and sales personnel in each geographic location;

- the costs and complexity of localizing products for foreign markets, such
as the development of multilingual capabilities in our products;

- changes in regulatory requirements, including export and import
restrictions, or political and economic instability in foreign countries
in which we do business;

- reduced protection of intellectual property in some countries that may
adversely affect our ability to protect our proprietary technology;

- increased difficulty in collecting delinquent or unpaid accounts owed by
customers located in foreign countries;

- fluctuations in the value of the U.S. dollar relative to the currencies of
other countries in which we derive revenue; and

- potentially adverse tax consequences resulting from the tax laws of other
countries or the U.S. tax treatment of revenue derived in other countries.

Any of these factors, as well as others, may impair our ability to expand
our international operations in these markets or to generate significant
revenues from those markets in which we operate.

OUR SALES CYCLE IS LENGTHY, WHICH MAKES IT DIFFICULT TO PLAN OUR REVENUE AND
EXPENSES, AND MAY CAUSE OUR OPERATING RESULTS TO FLUCTUATE.

Our products are complex and often involve significant investment decisions
by prospective customers. Accordingly, the license of our products requires us
to engage in a lengthy sales cycle and to provide a significant level of
education to prospective customers regarding the use and benefits of our
products. A lengthy sales cycle may result in fluctuations in our revenue and
expenses and may make it

11
<PAGE>
difficult to accurately predict the quarter in which a particular sale will
occur. This could aversely affect the timing of our revenue and corresponding
expenditures, which could harm our ability to meet our financial forecasts and
market expectations for a particular quarter.

The purchase of our products by our customers for deployment within their
organizations typically involves a significant commitment of customers' capital
and resources, and is therefore subject to delays that are beyond our control,
such as our customers' internal procedures to approve large capital
expenditures, budgetary constraints and the testing and acceptance of new
technologies that affect key operations, among other factors. The
decision-making process also can be impacted by the sales practices of, and
product introductions by, our competitors. We cannot assure you that we will be
able to shorten our sales cycle or prevent our sales cycle from lengthening.

WE HAVE EXPERIENCED SIGNIFICANT GROWTH IN OUR BUSINESS IN RECENT PERIODS, AND WE
MAY NOT BE ABLE TO MANAGE EFFECTIVELY OUR FUTURE GROWTH.

Our ability to effectively offer market-accepted software and professional
services and implement our strategy in a rapidly evolving market requires
effective planning and management. We have increased, and plan to continue
increasing, the scope of our operations at a rapid rate. If we do not manage our
growth properly, it may harm our business and operating results, including
increases in costs and expenses and diversion of management resources. The
number of people we employ has grown and will continue to grow substantially. As
of September 30, 2000, we had a total of 453 employees compared to 240 employees
as of December 31, 1999. Future expansion efforts may be expensive and may
strain our managerial and other resources. To manage future growth effectively,
we must maintain and enhance our financial and accounting systems and controls,
integrate new personnel and manage expanded operations.

WE MAY HAVE DIFFICULTY IDENTIFYING ACQUISITIONS AND INTEGRATING THEM INTO OUR
BUSINESS, WHICH MAY HARM OUR BUSINESS AND ADVERSELY AFFECT OUR ABILITY TO GROW
AS PLANNED.

We have engaged, and may from time to time in the future engage, in
acquisitions of companies with complementary products and professional services
or for other purposes. Any past or future acquisitions may expose us to
increased risks, including those associated with the assimilation of new
operations, technologies and personnel and the diversion of financial and
management resources from existing operations. We believe that we have been able
to integrate and assimilate our prior acquisitions of Nexstep, Inc., Electronic
Data Transfer, SA, and SC21 without significant or unanticipated diversion of
financial or managerial resources. However, we cannot assure you that we will be
able to generate sufficient revenue from these or any future acquisitions to
offset associated acquisition costs, or that we will be able to maintain uniform
standards of quality, service and controls, which may result in the impairment
of relationships with customers, employees and new personnel. Future
acquisitions also may result in additional stock issuances that may adversely
affect the price of our common stock.

IF WE LOSE THE SERVICES OF OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER, IT MAY
HAVE AN ADVERSE EFFECT ON OUR BUSINESS.

We are dependent on the continued services and performance of our senior
management and other key personnel. The loss of Gregory Cronin, our president
and chief executive officer, may have an adverse effect on our business and
operating results.

IF WE ARE UNABLE TO ATTRACT, ASSIMILATE AND RETAIN HIGHLY QUALIFIED PERSONNEL,
WE MAY NOT BE ABLE TO EFFECTIVELY MANAGE AND EXPAND OUR BUSINESS.

Our ability to manage and expand our business will depend on our ability to
identify, hire, train, retain and motivate additional highly skilled technical,
managerial, marketing, professional services and customer service personnel. Any
failure to do so may have an adverse effect on the quality of our software

12
<PAGE>
and services and our ability to retain customers and key personnel. We are
investing significant resources to substantially increase the size of our sales
force and business development teams, as well as adding personnel in other
areas. Competition for these personnel, particularly in the technology industry,
is intense, and we cannot assure you that we will be able to attract, assimilate
or retain sufficiently qualified personnel in the future. As our sales increase,
we must be able to hire and train more systems implementation professionals to
implement the software sold. Training and education is costly and can drain
management resources. To meet our needs for professional services personnel, we
will continue to use third-party consultants, which are generally more costly.
We cannot assure you that we will be able to manage our personnel needs
successfully or to engage, train and retain qualified third-party implementation
providers.

RISKS RELATED TO OUR INDUSTRY

OUR OPERATING RESULTS DEPEND ON THE CONTINUED USE OF THE INTERNET AND THE
DEVELOPING MARKET FOR B2B INTEGRATION SOFTWARE AND SERVICES, INCLUDING
INTERNET-BASED SUPPLY WEB SOFTWARE.

We depend on the increased acceptance and use of the Internet as a medium
for B2B e-commerce and for the development of trading communities and the
adoption by businesses of B2B integration and supply web synchronization
software and services. If the market for B2B integration software and services,
including Internet-based supply web software, fails to grow at the rate that we
anticipate, our business and operating results may be harmed, including through
the loss or delay of revenue, loss of market share, decreased demand for our
products, failure to achieve and maintain market acceptance and the inability to
meet the financial expectations of analysts and investors. Rapid growth in the
use of the Internet is a recent occurrence. As a result, acceptance and use may
not continue to develop at historical rates, and a sufficiently broad base of
business customers may not adopt or continue to use the Internet as a medium of
commerce. Businesses are just beginning to seek solutions for integrating and
synchronizing with their trading partners, and concerns about the security,
reliability and quality of services delivered over the Internet may inhibit the
growth of our market. Our future operating results depend on the development and
growth of the market for B2B integration software and services, including
Internet-based supply web software. We have spent, and intend to continue to
spend, considerable resources educating potential customers and those entities
with whom we have strategic relationships about our products. However, we cannot
assure you that these expenditures will enable our products to achieve or
maintain any significant degree of market acceptance.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY, WHICH COULD
HARM THE VALUE OF OUR PROPRIETARY TECHNOLOGY.

We depend in large part on our proprietary technology. We rely on a
combination of trademarks, copyrights, service marks, trade dress, trade
secrets, non-disclosure agreements and similar intellectual property measures to
protect our proprietary technology. If our efforts to protect our intellectual
property are not adequate, or if any third party misappropriates or infringes on
our intellectual property, the value of our proprietary technology will be
harmed, which could have a material adverse effect on our business, including
the loss of revenue, reduced margins and the failure of our products to achieve
and maintain market acceptance. We license rather than sell our products and
require our customers to enter into license agreements that impose restrictions
on their ability to use our software. We currently have patent rights pending in
many countries throughout the world. We have licensed in the past, and expect
that we may license in the future, certain of our proprietary rights, such as
our software and other confidential information, trademarks and copyrighted
material, to third parties. Additionally, certain customers that licensed our
AMTrix product from Frontec AB, acting as a reseller, may be using it under a
service agreement with Frontec AB rather than a license agreement. While we try
to ensure that the quality of our brand is maintained by all of our licensees,
we cannot assure you that these licensees will not take actions that adversely
affect the value of our proprietary rights or reputation.

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<PAGE>
We have registered certain trademarks and have other trademark registrations
pending in the U.S. and foreign jurisdictions. The trademarks that we currently
use have not been registered in all the countries in which we do business and
may never be registered in all of these countries. We cannot assure you that we
will be able to adequately protect our trademarks or that our use of these
trademarks will not result in liability for trademark infringement, trademark
dilution or unfair competition.

We cannot assure you that all of the steps taken by us to protect our
proprietary rights in the U.S. or abroad will be adequate. In addition, the laws
of some foreign countries do not protect proprietary rights to the same extent
as the laws of the U.S. We also cannot assure you that competing companies will
not independently develop technology similar or superior to our proprietary
technology. Further, through acquisitions of third parties, we have acquired and
may in the future acquire technology that is subject to the same risks as
technology we develop.

INTELLECTUAL PROPERTY CLAIMS AGAINST US MAY BE COSTLY AND IMPAIR OUR BUSINESS.

There has been a substantial amount of litigation in the software industry
regarding intellectual property rights. We cannot predict whether third parties
will assert claims of infringement against us, or whether any future assertions
will harm our business. If we are forced to defend against these types of
claims, whether they are with or without merit or are determined in our favor,
we may face costly litigation, diversion of technical and management personnel
or product shipment delays, any of which could adversely impact our business and
operating results. As a result of such a dispute, we may have to develop
non-infringing technology or enter into royalty or licensing agreements which
may be unavailable on terms acceptable to us, if at all. If there is a
successful claim of product infringement against us and we are unable to develop
non-infringing technology or to license the infringed or similar technology on a
timely basis, our business and operating results may be adversely affected.

In addition, although we are generally indemnified if a third-party vendor's
technology infringes the proprietary rights of others, indemnification is not
always available for all types of intellectual property rights. In some cases,
the scope of our indemnification is limited and the third parties providing
indemnification are not always capitalized sufficiently to fully indemnify us.
We cannot assure you that infringement claims arising from using third-party
technology, and claims for indemnification from our customers resulting from
these claims, will not be asserted or prosecuted against us. These types of
claims, even if not meritorious, may cause us to spend significant financial and
managerial resources and incur product redevelopment costs and delays, all of
which may adversely affect our business and operating results.

INCREASED SECURITY RISKS RELATED TO THE SECURE TRANSMISSION OF AND ACCESS TO
CONFIDENTIAL INFORMATION IN PUBLIC AND PRIVATE COMPUTER NETWORKS MAY DETER
FUTURE USE OF OUR SOFTWARE AND SERVICES.

A fundamental requirement of conducting B2B e-commerce is the secure
transmission of and access to confidential information in public and private
computer networks. Failure of our customers to prevent security breaches, or
well publicized security breaches affecting the Internet in general, may harm
our business and operating results, including through costly litigation,
diversion of technical and management personnel, damage to our reputation, loss
of market share, failure to achieve market acceptance, and increased product
development costs. Advances in computer capabilities, new discoveries in the
field of cryptography or other developments may result in a compromise or breach
of the security features used by our customers and their business partners to
protect content and transactions on Internet e-commerce marketplaces or
proprietary information in our customers' and their business partners'
databases. Anyone who is able to circumvent security measures may misappropriate
confidential information or cause interruptions in our customers' and their
business partners' operations. Our customers and their business partners may be
required to incur significant costs to protect against security breaches or to
alleviate problems caused by breaches, reducing their demand for our software.
Further, a well publicized

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<PAGE>
compromise of security may deter businesses from using the Internet to conduct
transactions that involve transmitting confidential information.

ADOPTION OF NEW INTERNET-RELATED LAWS COULD RESULT IN INCREASED EXPENSES AND
ADMINISTRATIVE BURDENS TO COMPANIES CONDUCTING BUSINESS ON THE INTERNET, WHICH
MAY LIMIT THE MARKET FOR OUR SOFTWARE.

Regulation of the Internet is largely unsettled and in the early stages. The
adoption of laws or regulations that increase the costs or administrative
burdens of doing business on the Internet may cause companies to seek an
alternative means of transacting business. If the adoption of new Internet laws
or regulations causes companies to seek alternative methods for conducting
business, the demand for our products may decrease and our business and
operating results may be adversely affected.

RISKS RELATED TO THIS OFFERING

THE MARKET PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY FOLLOWING THIS
OFFERING, AND AS A RESULT, YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.

Prior to the offering, there has been no public market for our common stock.
We have applied to have our common stock listed for quotation on the Nasdaq
National Market. We do not know how our common stock will trade in the future,
and the prevailing market price of our common stock after this offering may be
lower than the price you pay. The initial public offering price will be
determined through negotiations between us and representatives of the
underwriters, and that price may not be indicative of prices that will prevail
in the trading market. The price of our common stock will be affected by
numerous factors, including our future revenue and operating results, our
ability to meet the financial expectations of analysts and investors, and the
business, operating results and stock price performance of our competitors.

The stock market in general, and the market for technology-related stocks in
particular, has experienced dramatic price and volume fluctuations from time to
time. These fluctuations may or may not be based upon any business or operating
results. Our common stock may experience similar or even more dramatic price and
volume fluctuations that may continue indefinitely.

In addition, securities litigation has often been brought against a company
following a decline in the market price of its common stock. This risk is
especially acute for us because technology companies have experienced greater
than average stock price volatility in recent years and, as a result, have been
subject to, on average, a greater number of securities class action claims than
companies in other industries. We may in the future be the target of similar
litigation. Securities litigation may result in substantial costs, divert
management's attention and resources and harm our business and operating
results.

OUR EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS WILL RETAIN
SUBSTANTIAL CONTROL OVER US AFTER THIS OFFERING.

Upon the closing of this offering, our executive officers, directors and 5%
or more stockholders, and their affiliates, will, in the aggregate, own
approximately 70.5% of our outstanding common stock. As a result, these persons,
acting together, will have the ability to control matters submitted to our
stockholders for approval, including the election and removal of directors and
any merger, consolidation or sale of all or substantially all of our assets.
Accordingly, this concentration of ownership may have the effect of delaying or
preventing a transaction that would result in a change in control, even if the
transaction would be beneficial to our other stockholders.

FUTURE SALES OF OUR COMMON STOCK MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR
COMMON STOCK.

Following this offering, we will have a large number of shares of common
stock outstanding and available for resale beginning at various points in the
future. The market price for our common stock may decline as a result of sales
of large numbers of shares of our common stock in the market following this

15
<PAGE>
offering, or the perception that these sales may occur. These sales may make it
more difficult to sell securities in the future at a time and price we may deem
appropriate.

The number of shares of common stock available for sale in the public market
is limited by restrictions under federal securities law and under some
agreements that our stockholders have entered into with the underwriters. Those
agreements restrict our stockholders, other than Frontec AB, the selling
stockholder in this offering, from selling, pledging or otherwise disposing of
their shares for a period of 180 days after the date of this prospectus, without
the prior written consent of Chase Securities Inc. The agreement with Frontec AB
provides for similar restrictions, except that it will expire 270 days after the
date of this prospectus. However, Chase Securities Inc. may, in its sole
discretion, release all or any portion of the common stock from the restrictions
of these agreements. While there are no specific criteria for determining
whether to release shares from the lock-up arrangements, Chase Securities Inc.
will consider the stockholder's reasons for requesting the release, the number
of shares for which the release is being requested and market conditions at the
time, including the trading price of our common stock. Except as described
below, Chase Securities Inc. does not presently intend to waive any lock-up
arrangements.

Frontec AB has granted the underwriters an option for a period of 30 days to
purchase up to 825,000 shares of our common stock. Frontec AB also has advised
us that it may sell up to 5 million shares of our common stock to one or more
third parties prior to or after this offering in a privately negotiated
transaction. Chase Securities Inc. has agreed to waive the lock-up agreement
with respect to such a sale, provided that the purchasers agree to a lock-up
period of 180 days after the date of this prospectus. The following table
indicates approximately when the 32,914,297 shares of our common stock that are
not being sold in the offering but that will be outstanding when this offering
is complete will be eligible for sale into the public market:

<TABLE>
<CAPTION>
ELIGIBILITY OF RESTRICTED
SHARES FOR SALE IN
PUBLIC MARKET
-------------------------
<S> <C>
On the date of this prospectus.............................. --
180 days after the date of this prospectus.................. 12,934,560
Thereafter upon expiration of one year holding periods...... 6,728,541
270 days after the date of this prospectus.................. 13,251,196
</TABLE>

We have an agreement with the holders of an aggregate of 15,073,936 shares
of our common stock, including shares issuable upon conversion of outstanding
convertible securities and warrants, that gives them the right to require us to
register their shares of common stock for resale under the Securities Act of
1933. The exercise of these registration rights will cause the registered shares
to become eligible for sale, subject to the applicable lock-up agreements. The
sale of a large number of these shares, or the possibility that these sales may
occur, may adversely affect the market price of our common stock. For more
information, see "Shares Eligible for Future Sale."

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

If you purchase shares of common stock in this offering, you will experience
immediate and substantial dilution of $11.33 per share, based on an initial
public offering price of $13.00 per share. This dilution is in large part
because our earlier investors paid substantially less than the public offering
price when they purchased their shares of common stock or convertible preferred
stock. You will experience additional dilution upon the exercise of outstanding
stock options or warrants to purchase our common stock.

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<PAGE>
WE WILL RETAIN BROAD DISCRETION IN USING THE NET PROCEEDS FROM THIS OFFERING,
AND WE MAY SPEND A SUBSTANTIAL PORTION IN A WAY IN WHICH YOU DO NOT AGREE.

We will retain broad discretion over the application of the net proceeds
from this offering, as well as the timing of our expenditures. We may apply the
net proceeds from this offering in a way that may vary substantially from our
current intentions or in a manner with which you do not agree. For more
information, see "Use of Proceeds."

WE HAVE IMPLEMENTED ANTI-TAKEOVER PROVISIONS WHICH MAY DELAY OR PREVENT A
TAKEOVER, EVEN IF AN ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS.

Provisions of our certificate of incorporation and bylaws, as well as
provisions of Delaware law, may make it more difficult for a third party to
acquire us, even if doing so would be beneficial to our stockholders. These
provisions include:

- establishing a classified board of directors requiring that not all
members of the board may be elected at one time;

- authorizing the issuance of preferred stock that could be issued by our
board of directors to increase the number of outstanding shares and deter
a takeover attempt;

- limiting the ability of stockholders to call special meetings of
stockholders;

- prohibiting stockholder action by written consent, thereby requiring all
stockholder actions to be taken at a meeting of our stockholders; and

- establishing advance notice requirements for nominations for election to
the board of directors or for proposing matters that can be acted upon by
stockholders at stockholder meetings.

In addition, Section 203 of the Delaware General Corporation Law and the
terms of our stock option plans may delay or prevent a change in control of our
company. For more information, see "Description of Capital Stock."

17
<PAGE>
FORWARD-LOOKING STATEMENTS

Some of the statements under the captions "Prospectus Summary," "Risk
Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business," and elsewhere in this
prospectus constitute forward-looking statements. These forward-looking
statements include, but are not limited to, statements about our plans,
objectives, expectations and intentions, and other statements contained in the
prospectus that are not historical facts. When used in this prospectus, the
words "expect," "anticipate," "intend," "plan," "may," "will," "believe,"
"seek," "could," "would," "should," "might," "estimate" and similar expressions
are generally intended to identify forward-looking statements. These statements
are only predictions. Because these forward-looking statements involve risks and
uncertainties, there are important factors that may cause actual results to
differ materially from those expressed or implied by these forward-looking
statements, including our plans, objectives, expectations and intentions and
other factors discussed under "Risk Factors" and other factors identified by
cautionary language used elsewhere in this prospectus. We are under no duty to
update any of the forward-looking statements after the date of this prospectus.

USE OF PROCEEDS

We expect to receive net proceeds of approximately $65.3 million from the
sale of 5,500,000 shares of common stock, assuming a public offering price of
$13.00 per share and after deducting underwriting discounts and commissions of
$5.0 million and estimated expenses of approximately $1.2 million. We will not
receive any of the proceeds from the sale of shares by the selling stockholder
pursuant to the over-allotment option.

We plan to use the net proceeds from this offering as follows: approximately
$45.0 million for expanding our sales and marketing capabilities and funding
product development, approximately $4.0 million in connection with the continued
development of our infrastructure, network and support services, approximately
$3.5 million to satisfy deferred payments to former owners of acquired
businesses, approximately $2.5 million for the repayment of the outstanding
balance of a bank loan, and the remainder for working capital and general
corporate purposes. In addition, we may use a portion of the net proceeds for
acquisitions of products, technologies and businesses. The bank loan matures on
November 25, 2000 and bears interest at the bank's prime rate plus 1% per annum,
which interest was 10.5% as of September 30, 2000. We have not yet determined
the exact amount of net proceeds to be used for any of the foregoing purposes,
other than the repayment of the outstanding balance of the bank loan. The amount
of net proceeds that we actually expend for expansion of our business, for
working capital purposes and for general corporate purposes will vary
significantly depending on a number of factors, including the actual net
proceeds received in this offering, our future revenue growth, if any, the
amount of cash we generate from operations and the progress of our product
development efforts. We will have significant discretion in applying the net
proceeds of this offering. Pending the uses described above, we will invest the
net proceeds in investment-grade, interest-bearing securities.

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock and we do
not anticipate declaring or paying any cash dividends for the foreseeable
future. We currently expect to retain all earnings, if any, for investment in
our business. The terms of our existing bank loan agreement prohibit us from
paying dividends.

18
<PAGE>
CAPITALIZATION

The following table describes our capitalization as of September 30, 2000:

- on an actual basis;

- on a pro forma basis to reflect the issuance of an assumed aggregate of
5,043,956 shares of our Series B convertible preferred stock upon the
cashless exercise of outstanding warrants, the conversion of all
outstanding shares of our Series A, B, D and E convertible preferred stock
into an aggregate of 14,757,844 shares of our common stock and the
conversion of all outstanding shares of our Series C convertible preferred
stock into an assumed 1,576,923 shares of our common stock, each of which
will occur immediately upon the completion of this offering, as if the
exercise and conversion occurred on September 30, 2000; and

- on a pro forma as adjusted basis to further reflect the sale of the shares
of our common stock in this offering at an assumed price of $13.00 per
share and our receipt of the estimated net proceeds, after deducting the
underwriting discounts and commissions and the estimated offering expenses
that we expect to pay in connection with this offering.

You should read this table along with "Management's Discussion and Analysis
of Financial Condition and Results of Operations," our consolidated financial
statements and related notes and the other financial information in this
prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
--------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
---------- ---------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C>
Capital lease obligation, less current portion.............. $ 1,482 $ 1,482 $ 1,482
--------- --------- ---------
Redeemable, convertible preferred stock:
Series A convertible preferred stock: $.01 par value per
share; 10,000 shares authorized, issued and outstanding
(actual); no shares issued and outstanding (pro forma
and pro forma as adjusted).............................. 25,460 -- --
Series B convertible preferred stock: $.01 par value per
share; 7,005 shares authorized; no shares issued and
outstanding (actual, pro forma and pro forma as
adjusted)............................................... -- -- --
Series D convertible preferred stock: $.01 par value per
share; 10,464 shares authorized; 10,464 shares issued
and outstanding (actual); no shares issued and
outstanding (pro forma and pro forma as adjusted)....... 33,930 -- --
Series E convertible preferred stock: $.01 par value;
4,052 shares authorized; 4,008 shares issued and
outstanding (actual); no shares issued and outstanding
(pro forma and pro forma as adjusted)................... 24,596 -- --
--------- --------- ---------
83,986 -- --
--------- --------- ---------
Stockholders' equity (deficit):
Series C convertible preferred stock: $.01 par value per
share; 2 shares authorized, issued and outstanding
(actual); no shares issued and outstanding (pro forma
and pro forma as adjusted).............................. -- -- --
Common stock: $.01 par value per share; 100,000 shares
authorized; 18,407 shares issued and outstanding
(actual); 34,742 shares issued and outstanding (pro
forma); 40,242 shares issued and outstanding (pro forma
as adjusted)............................................ 184 347 402
Additional paid in capital................................ 36,118 119,941 185,231
Treasury stock: 1,827 shares held in treasury............. (37) (37) (37)
Notes receivable from stockholders........................ (6,612) (6,612) (6,612)
Deferred compensation..................................... (749) (749) (749)
Retained earnings (deficit)............................... (100,490) (100,490) (100,490)
Accumulated other comprehensive income.................... 1,635 1,635 1,635
--------- --------- ---------
Total stockholders' equity (deficit).................... (69,951) 14,035 79,380
--------- --------- ---------
Total capitalization.................................. $ 15,517 $ 15,517 $ 80,862
========= ========= =========
</TABLE>

This table does not include:

- 3,961,660 common shares subject to outstanding options as of
September 30, 2000, at a weighted average exercise price of $5.34 per
share;

- 316,092 common shares subject to outstanding warrants as of September 30,
2000, at a weighted average exercise price of $2.54 per share; and

19
<PAGE>
DILUTION

Our pro forma net tangible book value as of September 30, 2000, was
$(1.1) million, or $(0.03) per share of common stock. We have calculated this
amount by:

- subtracting our total liabilities from our pro forma total tangible
assets; and

- then dividing the difference by the total pro forma number of shares of
common stock outstanding, including the number of shares of common stock
that will be issued upon the conversion of our convertible preferred stock
upon completion of this offering.

If we give effect to our sale of 5,500,000 shares of common stock in this
offering at the assumed initial public offering price of $13.00 per share, our
adjusted pro forma net tangible book value as of September 30, 2000, would have
been $64.2 million, or $1.67 per share. This amount represents an immediate
increase in pro forma net tangible book value of $1.70 per share to existing
stockholders and an immediate dilution of $11.33 per share to new investors. The
following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $13.00
Pro forma net tangible book value as of September 30,
2000.................................................... $(0.03)
Pro forma increase in net tangible book value attributable
to this offering........................................ $ 1.70
------
Pro forma net tangible book value after this offering..... $ 1.67
------
Dilution to new investors................................... $11.33
======
</TABLE>

The following table summarizes, on the pro forma basis discussed above, as
of September 30, 2000, the total number of shares of common stock purchased, the
total consideration paid and the average price per share paid by existing
stockholders and to be paid by new investors in this offering before deducting
estimated underwriting discounts and offering expenses:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
--------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- -------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders................ 34,741,795 86.3% $120,288,139 62.7% $ 3.46
New investors........................ 5,500,000 13.7 71,500,000 37.3 13.00
---------- ------------
Total.............................. 40,241,795 100.0% $191,788,139 100.0%
========== ===== ============ =====
</TABLE>

If the underwriters exercise their over-allotment option in full, the number
of shares held by existing stockholders will decrease to 33,916,795, or 84.3% of
the total shares outstanding, and the number of shares held by new investors
will increase to 6,325,000, or 15.7% of the total shares outstanding.

The above computations do not include:

- 3,961,660 common shares subject to outstanding options as of
September 30, 2000, at a weighted average exercise price of $5.34 per
share;

- 316,092 common shares subject to outstanding warrants as of September 30,
2000, at a weighted average exercise price of $2.54 per share; and

From October 1, 2000, through October 31, 2000, options were exercised to
purchase an aggregate of 11,054 shares of common stock. If any additional
options and warrants are exercised, investors will experience further dilution.

20
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in
conjunction with our consolidated financial statements and related notes
appearing at the end of this prospectus and the information under "Management's
Discussion and Analysis of Financial Condition and Results of Operations." The
statement of operations data for the years ended December 31, 1997, 1998 and
1999 and the balance sheet data as of December 31, 1998 and 1999, are derived
from, and are qualified by reference to, the consolidated financial statements
included elsewhere in this prospectus, which have been audited by
PricewaterhouseCoopers LLP. The consolidated statements of operations data for
the years ended December 31, 1995 and 1996 and the nine months ended
September 30, 1999 and 2000, and the consolidated balance sheet at
September 30, 2000, are derived from unaudited, consolidated financial
statements. The unaudited consolidated statements of operations for the nine
months ended September 30, 1999 and 2000, and the unaudited balance sheet at
September 30, 2000, are included elsewhere in this prospectus. Historical
results are not necessarily indicative of results to be expected in the future.
Prior to February 1999, Frontec AB operated our business as a division of its
operations.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------------------------- -------------------
1995 1996 1997 1998 1999 1999 2000
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenue:
Licenses......................................... $ 2,347 $ 4,034 $ 6,522 $ 6,767 $ 8,849 $ 6,975 $ 13,913
Support.......................................... 232 1,360 1,609 2,024 2,991 2,197 3,375
Services......................................... 1,989 2,560 3,563 4,873 7,608 6,196 8,750
-------- -------- ------- ------- -------- -------- --------
Total revenue:................................. 4,568 7,954 11,694 13,664 19,448 15,368 26,038
Cost of revenue:
Licenses......................................... 64 130 162 362 1,024 884 1,052
Support and services............................. 2,871 3,219 4,102 5,977 10,160 7,072 11,882
-------- -------- ------- ------- -------- -------- --------
Total cost of revenue:......................... 2,935 3,349 4,264 6,339 11,184 7,956 12,934
Gross profit....................................... 1,633 4,605 7,430 7,325 8,264 7,412 13,104
Operating expenses:
Sales and marketing.............................. 2,560 6,998 8,199 8,208 14,580 9,848 25,245
Research and development......................... 3,031 3,578 3,132 2,784 4,045 2,638 11,394
General and administrative....................... 2,115 4,071 4,986 4,741 8,891 5,346 6,963
Purchased research and development............... -- -- -- -- -- -- 5,200
Stock based compensation......................... -- -- -- -- -- -- 4,586
Depreciation and amortization.................... 411 427 756 1,061 1,088 696 3,078
-------- -------- ------- ------- -------- -------- --------
Total operating expenses....................... 8,117 15,074 17,073 16,794 28,604 18,528 56,466
Operating loss..................................... (6,484) (10,469) (9,643) (9,469) (20,340) (11,116) (43,362)
Other income (expense), net........................ (237) (104) 226 (206) 21 29 391
-------- -------- ------- ------- -------- -------- --------
Loss before provision (benefit) for income taxes... (6,721) (10,573) (9,417) (9,675) (20,319) (11,087) (42,971)
Provision (benefit) for income taxes............... 4 6 244 (45) 94 101 201
-------- -------- ------- ------- -------- -------- --------
Net loss........................................... (6,725) (10,579) (9,661) (9,630) (20,413) (11,188) (43,172)
Accretion to preferred stock redemption value...... -- -- -- -- (3,233) -- (18,361)
Net loss attributable to common stockholders....... $ (6,725) $(10,579) $(9,661) $(9,630) $(23,646) $(11,188) $(61,533)
======== ======== ======= ======= ======== ======== ========
Net loss per share:
Basic and diluted................................ $ (0.39) $ (0.62) $ (0.57) $ (0.57) $ (1.39) $ (0.66) $ (3.82)
======== ======== ======= ======= ======== ======== ========
Weighted average shares used in computation...... 17,031 17,031 17,031 17,031 17,031 17,031 16,098
======== ======== ======= ======= ======== ======== ========
Pro forma net loss per share (unaudited):
Basic and diluted................................ $ (0.92) $ (1.50)
======== ========
Weighted average shares used in computation...... 22,168 28,835
======== ========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ SEPTEMBER 30,
1997 1998 1999 2000
-------- -------- -------- --------------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 1,422 $ 1,597 $ 9,316 $ 6,647
Working capital (deficit)................................... 2,167 (258) 144 (6,157)
Total assets................................................ 8,616 9,898 19,110 42,991
Long-term payables to associated companies.................. 15,750 14,527 -- --
Capital lease obligation, less current portion.............. -- -- 589 1,482
Redeemable, convertible preferred stock..................... -- -- 23,751 83,986
Total stockholders' deficit................................. (12,119) (12,922) (20,786) (69,951)
</TABLE>

21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH OUR CONSOLIDATED
FINANCIAL STATEMENTS AND RELATED NOTES APPEARING AT THE END OF THIS PROSPECTUS.

OVERVIEW

We are a leading global provider of e-business software and services that
enable integration and synchronization of web-enabled trading communities. Our
software and related services synchronize and automate business processes and
information flows across Internet-based supply webs and allow trading
communities and their members to conduct B2B e-commerce in real-time. By
employing our TradeSync family of products, trading partners can connect to a
common network, monitor shared supply web activities, synchronize and manage
interactive business processes and react quickly to dynamic events, while
retaining their existing IT systems.

We were incorporated in Delaware in February 1999. Prior to our
incorporation, Frontec AB operated our business as a division of its operations.
Frontec AB marketed our AMTrix product through subsidiaries that we now wholly
own. Our company was formed with the existing assets and operations of Frontec
AB's AMTrix software division. Subsequent to our separation from Frontec AB, we
have financed our operations primarily through private sales of convertible
preferred stock to third-party investors.

Subsequent to our organization as a separate entity, we moved the
headquarters of our global operations to Atlanta, Georgia and accelerated the
development of our sales and marketing organizations. In order to expand our
AMTrix product offering, we have invested heavily in the development of new
products to provide B2B and trading community integration and supply web
synchronization software.

We generate revenue by licensing our software systems and providing support
and professional services for these systems. License revenue was 53.4% and 45.5%
of our total revenue for the nine months ended September 30, 2000 and the year
ended December 31, 1999, respectively. Services revenue was 33.6% and 39.1% of
our total revenue, and support revenue was 13.0% and 15.4% of our total revenue,
respectively, during the same periods. We anticipate that we will continue to
increase our sales and marketing efforts, focusing primarily on licensing our
software products, and we expect that the relative percentage of our license
revenue to total revenue will continue to increase.

We generally license our software for a perpetual term by charging a license
fee that grants the customer the right to use the software system that is
currently available at the time the agreement is reached. We recognize license
revenue when there is persuasive evidence of an agreement, the software has been
shipped, collectibility is probable, payment is due within one year and we have
no further significant obligations. When license payment terms are in excess of
one year, we recognize the related revenue as the payments become due. When
licenses are sold through a reseller, we recognize revenue once the software is
shipped to the reseller's end-user customer and all other revenue recognition
criteria have been met. When uncertainties exist relating to any of these
criteria, we recognize the revenue upon resolution of the uncertainty or when
payment is received. During the six months ended June 30, 2000, and all prior
periods, we derived all of our license revenue from our AMTrix product and
related TradeSync Integration Connector and Connector Development Platform
products. During the third quarter of 2000, we released and began deriving
revenue from the sale of our TradeSync Inventory Visibility and TradeSync
Shipment Visibility products. For the nine months ended September 30, 2000, we
derived 96.6% of our license revenue from our AMTrix product and related
TradeSync Integration Connector and Connector Development Platform products,
while we derived the remaining 3.4% from our TradeSync Inventory Visibility and
Shipment Visibility products.

22
<PAGE>
our license fees. Generally, we sell these services on a time and materials
basis, and in some circumstances, under fixed price arrangements. We recognize
professional services revenue as the service is performed. Revenue from time and
materials arrangements is recognized as the services are performed and the
customer has a contractual obligation to pay, provided the fee is
non-refundable. Under fixed price arrangements, professional services revenue is
recognized on the basis of the estimated percentage of completion of the service
provided. Changes in estimates to complete and losses, if any, are recognized in
the period they are determined.

Additionally, we provide telephone support and maintenance for our software
systems under support agreements. These agreements provide unspecified software
upgrades and technical support over a specified term, which is typically
12 months and renewable on an annual basis. Support contracts typically are paid
in advance, and revenues from these contracts are deferred and recognized
ratably over the term of the contract.

For the nine months ended September 30, 2000, we derived 39.5% of our
revenue from Europe, 34.5% from the U.S., and 26.0% from Asia/Pacific. For the
year ended December 31, 1999, we derived 65.0% of our revenue from Europe, 17.2%
from the U.S. and 17.8% from Asia/Pacific. We anticipate that revenue derived
from the U.S. will become an increasing percentage of our total revenue in the
future.

We market and sell our products and professional services through our direct
sales force and through our indirect sales channel, which includes value-added
resellers, or VARs, systems integrators and technology vendors. During the nine
months ended September 30, 2000, we derived approximately 71.2% of our license
revenue through our direct sales force, while we derived 28.8% from our indirect
sales channel. We have derived, and expect to continue to derive, a significant
portion of our revenue from sales to or through our indirect sales channel. Our
indirect channel partners, including VARs, systems integrators and technology
vendors, typically buy our products at a discount from our standard list price
and either resell our product to their customers or incorporate our product into
their product offerings. Occasionally, a third party or one of our indirect
channel partners refers a customer to us. When this occurs, we typically pay a
commission to the referring entity. Generally, the arrangements with our
indirect channel partners do not impose any limitations on our ability to sell
our products directly. When limitations do exist, they are solely in the form of
limiting our ability to directly sell our products to certain named customers,
which typically are existing customers of the indirect channel partner. We do
not believe that these limitations are material.

As we expanded our global operations, we invested significantly in the areas
of research and development, sales, marketing, professional services,
recruitment and training. As a result, we have incurred significant operating
losses of approximately $43.4 million in the nine months ended September 30,
2000, and approximately $20.3 million, $9.5 million and $9.6 million in the
years ended 1999, 1998 and 1997, respectively. As of September 30, 2000, we had
an accumulated deficit of approximately $100.5 million. We plan to continue
investing in research and development, sales, marketing, professional services,
recruitment and training. We therefore expect to continue incurring significant
operating losses for the foreseeable future.

We plan to continue to significantly increase our presence in the U.S. and
expand internationally by increasing our sales and marketing personnel in the
U.S. and internationally, which may include establishing additional offices.
Currently, we anticipate that our international expansion will be primarily
through the expansion of the sales and marketing personnel in our current
offices. However, from time to time we review opportunities for opening offices
in different countries based on a number of factors, including the location of
customers and prospective customers, political, economic, regulatory and other
business conditions in the country, the availability of qualified personnel and
the costs associated with opening the office and hiring the personnel.
Currently, we are considering opening an office in Japan, although we have not
retained any employees in Japan nor have we leased or otherwise acquired any
office space. No assurance can be given that we will be able to open an office
in Japan or any other country.

23
<PAGE>

As of September 30, 2000, we had 453 employees and intend to hire a
significant number of employees in the future. Our continued global expansion
places significant demands on our management team and our operational resources.
To effectively manage our future growth, we must maintain and enhance our
operational systems, integrate new personnel and manage expanded operations.

RECENT ACQUISITIONS

On February 3, 2000, we completed the acquisition of Nexstep, Inc., a
software development enterprise based in Plano, Texas. At the date of
acquisition, Nexstep had 16 employees working out of offices in Plano, Texas and
Raleigh-Durham, North Carolina. The aggregate consideration of approximately
$10.1 million was paid by the issuance of 1,001,000 shares of our common stock
and cash of approximately $4.2 million. Our board of directors determined the
fair value of the common stock issued as part of the consideration to be $5.88
per share based on recent sales of our convertible preferred stock for cash to
third-party investors. The Nexstep acquisition has been accounted for as a
purchase, and accordingly, the purchase price has been allocated to the assets
acquired and the liabilities assumed based on their estimated fair values at the
date of acquisition. Nexstep's results of operations have been included with
ours beginning on January 1, 2000, the effective date of the acquisition for
accounting purposes. The excess consideration above the fair value of the net
tangible assets acquired was approximately $10.0 million. We have allocated the
intangible assets as follows (in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE
(YEARS)
-----------
<S> <C> <C>
In-process research and development..................... $ 5,200 n/a
Workforce............................................... 410 3
Goodwill................................................ 4,438 6
-------
$10,048
</TABLE>

When we acquired Nexstep, it was in the process of developing software
products for Internet retail organizations, primarily focused on its Enterprise
Application Architecture. The Enterprise Application Architecture is a code
framework for the operating environment upon which Nexstep intended to build a
number of application components for supply chain management. At the date of
acquisition, Nexstep's Enterprise Application Architecture and related
components were neither complete nor being marketed and had not achieved
technological feasibility. Nexstep currently serves as a research and
development center, and we are integrating the Enterprise Application
Architecture and certain of the application components with products that we
were developing prior to the acquisition.

On June 21, 2000, we completed the acquisition of Electronic Data Transfer,
SA, or EDT, a reseller of our AMTrix product based in Grenoble, France. We
acquired EDT and its 30 employees to enhance our sales, marketing, services and
support organization in Europe. We will continue to operate EDT as a separate
subsidiary. The purchase price for the acquisition of EDT was approximately
$2.3 million, including $1.0 million in cash, approximately $200,000 of
acquisition related expenses and a maximum of 91,370 shares of our common stock,
valued at $1.1 million at the date of acquisition. We paid $500,000 of the cash
consideration at closing and will pay the remaining $500,000 on December 31,
2000. We calculated a value of $1.1 million for the common stock based on the
maximum number of shares issuable multiplied by the fair value of our common
stock at the date of acquisition, which was determined to be $12.34 per share
based on recent sales of our convertible preferred stock for cash to third-party
investors. The ultimate number of shares of common stock issued on December 31,
2000 and December 31, 2001 will be determined by the value of our common stock
during December 2000 and December 2001. We have accounted for the $1.0 million
in cash and 91,370 shares of our common stock as purchase price consideration.

24
<PAGE>
In addition to the purchase price consideration, based upon the value of our
common stock during December 2000 and December 2001, we will issue a maximum of
415,113 additional shares of common stock to stockholders of EDT on
December 31, 2000 and December 31, 2001 as employee compensation. This issuance
is contingent upon the continued employment and services of these stockholders.
The maximum value of our common stock issuable as employee compensation under
this agreement is approximately $6.4 million. We will record this contingent
consideration as compensation expense over the employment and service period. We
have accounted for the EDT acquisition as a purchase, and accordingly, the
purchase price has been allocated to the assets acquired and liabilities assumed
based on their estimated fair values at the date of the acquisition. EDT's
results of operations have been included with ours beginning on June 1, 2000,
the effective date of acquisition for accounting purposes. The excess
consideration above the fair value of the net tangible assets acquired was
approximately $2.1 million. We have allocated the intangible assets as follows
(in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE
(YEARS)
-----------
<S> <C> <C>
Workforce................................................ $ 300 4
Goodwill................................................. 1,754 6
------
$2,054
</TABLE>

On July 31, 2000, we completed the acquisition of SC21 Pte. Ltd., a software
development enterprise based in Singapore. At the date of acquisition, SC21 had
10 employees. SC21's product, eSupplyWeb, is an application that allows
organizations to quickly deploy private and public B2B exchanges to link their
supply chain partners. The first version of eSupplyWeb was generally available
at the date of acquisition. SC21 currently serves as a research and development
center and continues to focus on the eSupplyWeb product, which we will market as
a new product. The purchase price for the acquisition of SC21 was approximately
$7.9 million, including $3.0 million in cash, related expenses of approximately
$300,000 and a maximum of 375,000 shares of our common stock, valued at
$4.6 million at the date of acquisition. We paid $1.0 million of the cash
consideration at closing and will pay the remaining $2.0 million on
December 31, 2000. We calculated a value of $4.6 million for the common stock
based on the maximum number of shares issuable multiplied by the fair value of
our common stock at the date of acquisition, which was determined to be $12.34
per share based on recent sales of our convertible preferred stock for cash to
third-party investors. We have accounted for the $3.0 million in cash and
375,000 shares of our common stock as purchase price consideration.

In addition to the purchase price consideration, we will pay $1.0 million in
cash and issue 112,500 shares of our common stock to Robert de Souza, Salem Bin
Mohamed Ibrahim and Teo Keng Leng, stockholders of SC21, on each of
December 31, 2000 and December 31, 2001. These payments and stock issuances are
contingent upon the continued employment and services of these stockholders. We
will record this contingent consideration as compensation expense over the
employment and service period. We have accounted for the SC21 acquisition as a
purchase, and accordingly, the purchase price has been allocated to the assets
acquired and liabilities assumed based on their estimated fair values at the
date of the acquisition. SC21's results of operations have been included with
ours beginning on July 1, 2000, the effective date of acquisition for accounting
purposes. The excess consideration above the fair value of the

25
<PAGE>
net tangible assets acquired was approximately $8.8 million. We have allocated
the intangible assets as follows (in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE
(YEARS)
-----------
<S> <C> <C>
Acquired software........................................ $5,000 3
Workforce................................................ 500 4
Goodwill................................................. 3,299 6
------
$8,799
</TABLE>

On October 24, 2000, we signed a non-binding letter of intent with Custom
Technology Corporation, a Japanese corporation, or CTC, which contemplates that
we will establish a Japanese subsidiary, and the Japanese subsidiary will then
employ certain of CTC's employees on a full-time basis to carry out its
business. The Japanese subsidiary will adapt our software products to the
Japanese domestic market, and then sell our "localized" software products to
Japanese customers. In addition, in connection with the letter of intent,
Softbank Investment Company has agreed, upon the occurrence of certain
conditions, to invest approximately $5 million into the Japanese subsidiary, and
in consideration of this cash investment Softbank Investment Company will
acquire approximately 22.5% of the Japanese subsidiary. The non-binding letter
of intent contemplates that the aggregate consideration to be paid to CTC in
exchange for its contributions to the Japanese subsidiary, as described above,
will be a maximum of 185,000 shares of our common stock. However, if this
offering is not completed within six months of the execution of a definitive
agreement with CTC, CTC may elect to have the aggregate consideration paid in
cash in the amount of $875,000. There can be no assurance that we will executive
a definitive agreement with CTC or Softbank Investment Company or that any such
transaction will ultimately be consummated.

PRESENTATION

The following discussion and analysis of our financial condition and results
of operations reviews the financial condition of the AMTrix businesses that
Frontec AB transferred to us as if we were a separate entity for all periods
presented. Certain costs and expenses presented in these financial statements
were allocated to us by Frontec AB. Approximately $1.6 million, $1.2 million and
$600,000 of allocated costs from Frontec AB for 1997, 1998 and 1999,
respectively, have been included in general and administrative expenses. These
represent costs that have been allocated for corporate administrative functions
including administrative, legal, accounting and other corporate overhead
expenses. These expenses were primarily allocated based on headcount or
management estimates depending on the nature of the expense. We believe that the
allocations are reasonable; however, the financial information included herein
may not necessarily reflect our financial position, results of operations and
cash flows in the future, or what they would have been had we been a separate
entity during each of the periods presented.

26
<PAGE>
RESULTS OF OPERATIONS

The following table sets forth certain operating data as a percentage of
total revenue for the periods indicated. Our historical operating results are
not necessarily indicative of the results for any future period.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------ ----------------------
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATION DATA:
Revenue:
Licenses....................................... 55.8% 49.5% 45.5% 45.4% 53.4%
Support........................................ 13.7 14.8 15.4 14.3 13.0
Services....................................... 30.5 35.7 39.1 40.3 33.6
----- ----- ------ ----- ------
Total revenue................................ 100.0 100.0 100.0 100.0 100.0
Cost of revenue:
Licenses....................................... 1.4 2.7 5.3 5.8 4.1
Support and services........................... 35.1 43.7 52.2 46.0 45.6
----- ----- ------ ----- ------
Total cost of revenue........................ 36.5 46.4 57.5 51.8 49.7
----- ----- ------ ----- ------
Gross profit..................................... 63.5 53.6 42.5 48.2 50.3
Operating expenses:
Sales and marketing............................ 70.1 60.1 75.0 64.1 97.0
Research and development....................... 26.8 20.4 20.8 17.2 43.7
General and administrative..................... 42.6 34.7 45.7 34.8 26.7
Purchased research and development............. -- -- -- -- 20.0
Stock based compensation....................... -- -- -- -- 17.6
Depreciation and amortization.................. 6.5 7.8 5.6 4.5 11.8
----- ----- ------ ----- ------
Total operating expenses..................... 146.0 123.0 147.1 120.6 216.8
----- ----- ------ ----- ------
Operating loss................................... (82.5) (69.4) (104.6) (72.4) (166.5)
Other income (expense), net...................... 2.0 (1.4) 0.1 0.3 1.5
----- ----- ------ ----- ------
Loss before provision (benefit) for income
taxes............................................ (80.5) (70.8) (104.5) (72.1) (165.0)
Provision (benefit) for income taxes............. 2.1 (0.3) 0.5 0.7 0.8
----- ----- ------ ----- ------
Net loss......................................... (82.6)% (70.5)% (105.0)% (72.8)% (165.8)%
===== ===== ====== ===== ======
</TABLE>

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

REVENUE

LICENSES. License revenue increased to $13.9 million for the nine months
ended September 30, 2000, from $7.0 million in the corresponding period in the
prior year, an increase of $6.9 million, or 99.5%. This increase primarily was
due to growth in the number of licenses sold to new customers for the nine
months ended September 30, 2000. During the nine months ended September 30,
2000, $13.5 million of our license revenue was derived from our AMTrix product
and related TradeSync Integration Connector and Connector Development Platform
products while the remaining $475,000 was derived from our TradeSync Inventory
Visibility and Shipment Visibility products, which were released during the
third quarter of 2000.

SUPPORT. Support revenue increased to $3.4 million for the nine months ended
September 30, 2000, from $2.2 million in the corresponding period in the prior
year, an increase of $1.2 million, or 53.6%. This

27
<PAGE>

increase was the result of an increase in the number of new support agreements,
as well as the renewal of support agreements entered into in earlier periods.

SERVICES. Services revenue increased to $8.8 million for the nine months
ended September 30, 2000, from $6.2 million in the corresponding period in the
prior year, an increase of $2.6 million, or 41.2%. This increase was due to
growth in new services engagements resulting from new and existing customers.

COST OF REVENUE

LICENSES. Cost of licenses consists of royalties paid to third parties for
certain technology incorporated into our products, commissions paid to
third-party systems integrators and technology vendors, the costs of duplicating
media and documentation and other direct costs of license revenue. Our cost of
licenses increased to $1.1 million for the nine months ended September 30, 2000,
compared to $884,000 in the corresponding period in the prior year, an increase
of $168,000, or 19.0%. Royalties to third parties for incorporated technology
increased to $341,000 for the nine months ended September 30, 2000, compared to
$294,000, an increase of $47,000. This increase was due to an increase in the
number of licenses during the nine months ended September 30, 2000, compared to
the same period in the prior year. Commissions paid to third parties for
referrals increased to $563,000 for the nine months ended September 30, 2000
from $410,000 for the corresponding period in the prior year, an increase of
$153,000. This increase resulted from more licenses being sold under these types
of arrangements during the nine months ended September 30, 2000, as compared to
the same period in the prior year. This cost can vary from period to period
based upon the number and value of agreements entered into with customers
referred to us by third parties. The cost of duplicating media and documentation
and other direct costs of licenses decreased slightly to $148,000 for the nine
months ended September 30, 2000 from $180,000 for the corresponding period in
the prior year. As a percentage of license revenue, cost of licenses decreased
to 7.6% for the nine months ended September 30, 2000 from 12.7% for the
corresponding period in the prior year, which decrease is due to our revenue
growth over the prior year.

SUPPORT AND SERVICES. Cost of support and services consists of salaries and
related costs for our support and service personnel, an allocation of our office
expenses, payments to third-party consultants and other direct costs incurred in
providing customer support, implementation and integration, consulting and
training. Our cost of support and services increased to $11.9 million for the
nine months ended September 30, 2000, from $7.1 million for the corresponding
period in the prior year, an increase of $4.8 million, or 68.0%. Salaries and
related costs increased to $7.9 million for the nine months ended September 30,
2000 from $4.1 million for the corresponding period in the prior year, an
increase of $3.8 million. Over the last 18 months, we hired additional support
personnel to build customer support centers in the U.S., Europe and Asia/Pacific
based on our anticipated growth. Additionally, we have been investing
significantly in new personnel for our professional services organization so
that we will have trained personnel available for our anticipated growth. From
time to time, we use third-party consultants to facilitate the delivery of
professional services to our customers. Expenses related to these consultants
increased to $1.4 million for the nine months ended September 30, 2000 from
$1.1 million for the corresponding period in the prior year, an increase of
$298,000. We plan to continue to recruit new personnel to perform professional
services so that we are less dependent on third-party consultants. The remainder
of the increase in the cost of support and services relates primarily to
increases in office and travel expenses due to our increased number of
personnel. We anticipate that our cost of support and services will increase as
we continue to expand our support and professional services organizations to
meet anticipated customer demand.

OPERATING EXPENSES

SALES AND MARKETING. Sales and marketing expenses consist of salaries,
commissions and related costs for our sales and marketing personnel, and an
allocation of our office expenses, travel, entertainment and promotional
expenses. Sales and marketing expenses increased to $25.2 million for the nine
months ended

28
<PAGE>

September 30, 2000, from $9.8 million for the corresponding period in the prior
year, an increase of $15.4 million, or 156.3%. Salaries, commissions and related
costs increased to $13.7 million for the nine months ended September 30, 2000
from $5.7 million for the corresponding period in the prior year, an increase of
$8.0 million. This increase resulted from an increased number of sales and
marketing personnel as we continue to build our direct sales and marketing
force. Promotional expenses increased to $5.6 million for the nine months ended
September 30, 2000 from $2.0 million for the corresponding period in the prior
year, an increase of $3.6 million. Travel and entertainment expenses increased
to $3.0 million for the nine months ended September 30, 2000 from $1.0 million
for the corresponding period in the prior year, an increase of $2.0 million.
This increase in travel and entertainment expenses resulted from our increase in
direct sales and marketing personnel. The remainder of the increase in sales and
marketing expenses relates primarily to increases in office and other related
expenses due to the increased number of personnel. We expect to continue
increasing our marketing and promotional activities and to hire additional sales
personnel. Accordingly, we anticipate that sales and marketing expenses will
continue to increase.

RESEARCH AND DEVELOPMENT. Research and development expenses include costs
associated with the development of new products, enhancements to existing
products and quality assurance activities. These expenses consist of salaries
and related costs for our development staff, an allocation of our office
expenses, payments to third-party consultants and other direct costs of research
and development. Research and development expenses increased to $11.4 million
for the nine months ended September 30, 2000, from $2.6 million for the
corresponding period in the prior year, an increase of $8.8 million, or 331.9%.
Salaries and related costs increased to $6.3 million for the nine months ended
September 30, 2000, from $2.0 million for the corresponding period in the prior
year, an increase of $4.3 million. Approximately $2.8 million of this increase
was due to our acquisition of Nexstep in January 2000 and SC21 in July 2000,
both of which became new research and development centers for us. The remaining
$1.5 million increase in salaries and related costs was due to an increased
number of development personnel within our existing research and development
centers, primarily in Sweden. Since our separation from Frontec AB, we have been
investing heavily in research and development focusing on expanding our
products. In this endeavor, we have outsourced certain development efforts to
third-parties and have engaged consultants to augment our internal development
personnel. During the nine months ended September 30, 2000, expenses related to
these activities increased to $3.2 million from $518,000 for the corresponding
period in the prior year, an increase of $2.7 million. The remainder of the
increase in research and development expenses relates primarily to increases in
office and travel expenses, which increases were due to the growth in the number
of personnel. Research and development expenditures as a percentage of revenue
increased to 43.7% for the nine months ended September 30, 2000, compared to
17.2% for the corresponding period in the prior year. We expect that our
research and development expenses will continue to increase as we add personnel
to our research and development team and expand our product offerings.

GENERAL AND ADMINISTRATIVE. General and administrative expenses consist of
salaries and related costs for our administrative, executive and finance
personnel, information systems costs, outside professional service fees and
other general costs and expenses. General and administrative expenses increased
to $7.0 million for the nine months ended September 30, 2000, from $5.3 million
for the corresponding period in the prior year, an increase of $1.6 million, or
30.2%. Salaries and related costs increased to $4.1 million for the nine months
ended September 30, 2000, from $1.8 million for the corresponding period in the
prior year, an increase of $2.3 million. Professional service fees and other
general and administrative costs decreased to $2.9 million for the nine months
ended September 30, 2000, from $3.5 million for the corresponding period in the
prior year, a decrease of $600,000. Prior to our separation from Frontec AB,
Frontec AB provided substantially all of our general and administrative
functions. We have been enhancing our finance, legal, human resources and
information systems department as we have grown, thus increasing our general and
administrative salaries and related costs. As we have hired internal personnel
in these functions, we have become less dependent on outside professional
service organizations and the fees paid to these organizations have declined. We
expect that general and administrative expenses

29
<PAGE>

will increase as we add personnel and incur additional costs related to the
anticipated growth of our business.

PURCHASED RESEARCH AND DEVELOPMENT. In connection with our purchase of
Nexstep, we recorded a one-time charge to expense of $5.2 million during the
first quarter of 2000 related to in-process research and development ("IPR&D").
When we acquired Nexstep, it was in the process of developing software products
for Internet retail organizations, primarily focused on its Enterprise
Application Architecture. The Enterprise Application Architecture is a code
framework for the operating environment upon which Nexstep intended to build a
number of application components for supply chain management. While analysis,
design, modeling and coding had been performed on many functions of the
framework, Nexstep had not produced an operational system nor tested the
prototypes in live network environments. The project was neither complete nor
being marketed and had not achieved technological feasibility at the date of
acquisition. Substantially all of the application components that Nexstep
intended to build were in the very early stages of research and analysis. As a
result, substantially all of the $5.2 million in IPR&D that we acquired was
related to the Enterprise Application Architecture.

We determined the value of the IPR&D based on the income approach valuation
method by estimating the present value of the projected net cash flows to be
generated by the in-process technology. In order to determine the projected net
cash flows, the revenue, expenses, and other cash flow items associated with the
commercialization of the in-process technology were estimated for the period
from 2000 though 2006. Strong revenue growth was projected through 2002;
thereafter, revenue was expected to increase moderately through 2005 and then
decline sharply in 2006 as other new products were expected to be introduced.
The projected net cash flows were then discounted to present value at 30%, a
rate of return that considers the relative risk of achieving the projected cash
flows and the time value of money. Finally, a 45% stage-of-completion factor was
applied to the discounted cash flows. Consistent with our policy for accounting
for costs to develop our software, these products are not capitalizable under
SFAS No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased
or Otherwise Marketed" and have no alternative future use other than in research
and development.

We anticipate that the IPR&D will be successfully developed and integrated
into the next version of our TradeSync supply web synchronization products. We
anticipate that these products will be generally available in the first quarter
of 2001. We estimate that we will spend approximately $3.0 to $3.3 million to
complete the development and integration of the Enterprise Application
Architecture. Thereafter, we anticipate that we will begin generating revenue
from sales of the next version of the TradeSync supply web synchronization
products. Through September 30, 2000, we have spent approximately $2.3 million
and we anticipate completion of the development and integration of the
Enterprise Application Architecture in the first quarter of 2001. The remaining
development includes testing and development issues related to deployment of the
products across a live network with the ability to address feasibility and
scalability. Remaining critical areas of risk include network bandwidth testing,
ensuring consistent performance over time and interaction with other network
traffic. Any delays or failure to complete development and introduction of these
new products may have an adverse effect on our business and operating results,
including an adverse effect on our revenue growth, loss of market share, injury
to our reputation or damage to our efforts to build brand awareness.

STOCK BASED COMPENSATION. During the nine months ended September 30, 2000,
we incurred $4.6 million in stock based compensation, $1.9 million of which
relates to our acquisition of EDT in June 2000, $1.6 million of which relates to
our acquisition of SC21 in July 2000 and the remaining $1.1 million relates to
compensation under option grants to employees. In connection with the
acquisitions of EDT and SC21, we will issue shares of our common stock on
December 31, 2000 and December 31, 2001. These issuances are contingent upon the
continued employment and services of the former owners of EDT and SC21. As such,
we are recording this contingent consideration as compensation expense over the
employment and service period through December 31, 2001. Additionally, we are
recording compensation expense associated with options that have been granted to
employees because the estimated fair value of

30
<PAGE>

the underlying common stock was greater than the exercise price on the date of
grant. Our board of directors determined the fair value of the underlying common
stock on the grant date based on recent sales of our preferred stock for cash to
third-party investors. The total amount of compensation associated with these
options is approximately $1.8 million and is being amortized over the respective
vesting periods of these options, ranging from two to four years.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization includes the
depreciation of property and equipment and the amortization of capitalized
software, goodwill and other intangible assets. Depreciation and amortization
increased to $3.1 million for the nine months ended September 30, 2000, from
$696,000 for the corresponding period in the prior year, an increase of
$2.4 million, or 342.2%. The amortization of goodwill and other intangible
assets increased to $1.0 million for the nine months ended September 30, 2000
from zero for the corresponding period in the prior year, which amortization
relates to our acquisitions of Nexstep, EDT and SC21 during 2000. The
amortization of capitalized software development increased to $726,000 for the
nine months ended September 30, 2000 from $161,000 for the corresponding period
in the prior year, an increase of $565,000. $150,000 of this increase resulted
from the amortization of internally developed software, while the remainder
relates to the software purchased as part of the SC21 acquisition. Depreciation
increased to $1.3 million for the nine months ended September 30, 2000 from
$536,000 in the corresponding period in the prior year, an increase of $812,000.
This increase was due to higher levels of depreciable fixed assets.

OTHER INCOME (EXPENSE), NET. Other net income (expense) increased to
$391,000 for the nine months ended September 30, 2000, from $29,000 for the
corresponding period in the prior year, an increase of $362,000. Interest, the
largest component of other income (expense), primarily consists of interest
earned on cash and cash equivalents, offset by interest expense related to
obligations under lines of credit, loans and capital leases. Net interest income
was $325,000 for the nine months ended September 30, 2000, compared to interest
expense of $31,000 for the corresponding period in the prior year. The increase
in net interest income was due to increased interest income earned on higher
cash and cash equivalent balances.

PROVISION (BENEFIT) FOR INCOME TAXES. As a result of our net losses, we have
generated operating loss carryforwards. As of September 30, 2000, we have net
operating loss carryforwards in the U.S. totaling approximately $43.1 million
and net operating loss carryforwards from foreign operations totaling
approximately $25.0 million. Realization of the resulting deferred tax assets is
dependent on future taxable income. We have recorded a full valuation allowance
against these deferred tax assets as of September 30, 2000, because we believe
that it is unlikely that such assets will be realized; however, ultimate
realization could be impacted by market conditions or other variables not known
or anticipated at this time.

NET LOSS. Net loss increased to $43.2 million for the nine months ended
September 30, 2000 from $11.2 million for the corresponding period in the prior
year, an increase of $32.0 million, or 285.9%. This increase in net loss was due
to the increase in our operating expenses to $56.5 million for the nine months
ended September 30, 2000 from $18.5 million for the corresponding period in the
prior year, an increase of $38.0 million, or 204.8%. Our operating expenses
increased significantly after our separation from Frontec AB due to the
expansion of our global operations, particularly in the areas of research and
development and sales and marketing.

COMPARISON OF YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

REVENUE

LICENSES. License revenue increased to $8.8 million in 1999 from
$6.8 million in 1998, an increase of $2.0 million, or 30.8%. This increase
primarily was due to growth in the number of licenses to new customers in 1999
as compared to 1998. Since our separation from Frontec AB, we have invested
significantly in our sales and marketing efforts, focusing on our software
products. Previously, our sales and marketing efforts primarily were focused on
our service offerings. License revenue increased to

31
<PAGE>
$6.8 million in 1998 from $6.5 million in 1997, an increase of $245,000, or
3.8%. During the years ended December 31, 1999, 1998 and 1997, we derived all of
our license revenue from our AMTrix product and related TradeSync Integration
Connector product.

SUPPORT. Support revenue increased to $3.0 million in 1999 from
$2.0 million in 1998, an increase of $1.0 million, or 47.8%. Support revenue
also increased to $2.0 million in 1998 from $1.6 million in 1997, an increase of
$415,000, or 25.8%. These increases were the result of an increase in the number
of new support agreements, as well as the renewal of support agreements entered
into in earlier periods.

SERVICES. Services revenue increased to $7.6 million in 1999 from
$4.9 million in 1998, an increase of $2.7 million, or 56.1%. Services revenue
increased to $4.9 million in 1998 from $3.6 million in 1997, an increase of
$1.3 million, or 36.8%. These increases generally were due to growth in new
services engagements resulting from new and existing customers during the
periods.

COST OF REVENUE

LICENSES. Our cost of licenses increased to $1.0 million in 1999 from
$362,000 in 1998, an increase of $662,000, or 182.9%. Royalties to third parties
for incorporated technology increased to $406,000 in 1999 from $175,000 in 1998,
an increase of $231,000. During 1998, we released the first version of AMTrix
that had a significant amount of incorporated technology from a third party.
Commissions paid to third parties for referrals increased to $324,000 in 1999
from $87,000 in 1998, an increase of $237,000. The increase in commissions paid
to third parties for referrals resulted from more licenses being completed under
these types of arrangements in 1999 compared to 1998. The remainder of the
increase in cost of licenses was primarily due to the cost of duplicating media
and documentation and other direct cost of licenses which increased by $194,000
to $294,000 in 1999 from $100,000 in 1998. As a percentage of license revenue,
cost of licenses increased to 11.6% in 1999 from 5.3% in 1998. Our cost of
licenses increased to $362,000 in 1998 from $162,000 in 1997, an increase of
$200,000, or 123.5%. This increase primarily was due to the cost of royalties
for third-party technology incorporated into our products which did not exist to
any significant extent until the second half of 1998. As a percentage of license
revenue, cost of licenses increased to 5.3% in 1998 from 2.5% in 1997. Our cost
of licenses can vary from period to period based on the mix of revenue generated
from our direct sales channel compared to our indirect sales channel.

SUPPORT AND SERVICES. Our cost of support and services increased to
$10.2 million in 1999 from $6.0 million in 1998, an increase of $4.2 million, or
70.0%. Salary and related expenses increased to $6.1 million in 1999 from
$3.3 million in 1998, an increase of $2.8 million. During 1999, we hired new
support personnel to build customer support centers in the U.S. and Asia/Pacific
based on our anticipated growth. Also during 1999, we began to invest
significantly in new personnel for our professional services organization in
order to be less dependent on third-party service providers and so that we would
have trained personnel on staff to support our anticipated growth. The remainder
of the increase in the cost of support and services resulted from increases in
office and travel expenses, which were due to the increased number of personnel.
Cost of support and services increased to $6.0 million in 1998 from
$4.1 million in 1997, an increase of $1.9 million, or 45.7%. Salary and related
expenses increased to $3.3 million in 1998 from $2.1 million in 1997, an
increase of $1.2 million. This increase was due to growth in the number of
professional services engagements in 1998 compared to 1997 and the personnel
required to perform those engagements. We anticipate that our cost of support
and services will increase as we continue to expand our support and professional
services organizations to meet anticipated customer demand.

OPERATING EXPENSES

SALES AND MARKETING. Sales and marketing expenses increased to
$14.6 million in 1999 from $8.2 million in 1998, an increase of $6.4 million, or
77.6%. Salaries, commissions and related costs increased to $8.1 million in 1999
from $4.4 million in 1998, an increase of $3.7 million. This increase was due to
an increased number of sales and marketing personnel, primarily in the U.S.
Promotional expenses

32
<PAGE>
increased to $3.0 million in 1999 from $1.2 million in 1998, an increase of
$1.8 million. This increase was due to our increased efforts to develop market
awareness of our software and services and re-branding our company as Viewlocity
after our separation from Frontec AB. The remainder of the increase resulted
from the increase in office and travel costs due to the increased number of
personnel. Sales and marketing expenses remained consistent from 1997 to 1998 at
$8.2 million. We expect to continue increasing our marketing and promotional
activities and to hire additional sales personnel. Accordingly, we anticipate
that sales and marketing expenses will continue to increase.

RESEARCH AND DEVELOPMENT. Research and development expenses increased to
$4.0 million in 1999 from $2.8 million in 1998, an increase of $1.2 million, or
45.3%. Salary and related expenses increased to $3.0 million in 1999 from
$1.8 million in 1998, an increase of $1.2 million. This increase was the result
of an increase in the number of research and development personnel in order to
support investment in and enhancement of our software and the development of new
products. Research and development expenditures as a percentage of revenue
remained relatively consistent from 1998 to 1999. Research and development
expenses decreased slightly to $2.8 million in 1998 from $3.1 million in 1997, a
decrease of $348,000, or 11.1%. This decrease was due to the consolidation of
our development organization in Sweden during 1998. We have capitalized certain
development expenses ranging from $400,000 to $500,000 in each of the three
years ended December 31, 1997, 1998 and 1999. We expect that our research and
development expenses will increase as we continue to add personnel to our
research and development team and expand our product offerings.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased to
$8.9 million in 1999 from $4.7 million in 1998, an increase of $4.2 million, or
87.5%. After our separation from Frontec AB, we hired a new management team and
enhanced our finance and information systems departments. Additionally, we
incurred increased costs related to outside professional service fees and travel
associated with our separation from Frontec AB and building our new management
team. Salaries and related expenses increased to $3.1 million in 1999 from
$2.0 million in 1998, an increase of $1.1 million. Office expenses, travel and
professional services increased to $5.0 million in 1999 from $2.8 million in
1998, an increase of $2.2 million. We also incurred approximately $800,000 in
costs associated with moving and consolidating certain of our offices during
1999. General and administrative costs decreased slightly to $4.7 million in
1998 from $5.0 million in 1997, a decrease of $245,000, or 4.9%. This decrease
was the result of consolidating and relocating certain of our U.S. operations in
early 1998. We expect that general and administrative expenses will increase as
we add personnel and incur additional costs related to the anticipated growth of
our business.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization remained
consistent in 1999 and 1998 at $1.1 million in each year. Depreciation and
amortization increased to $1.1 million in 1998 from $756,000 in 1997, an
increase of $305,000, or 40.3%. This increase was primarily due to increased
amortization of capitalized software and depreciation in 1998 compared to 1997.

OTHER INCOME (EXPENSE), NET. Other net income (expense) increased to an
income amount of $21,000 in 1999, from an expense of $206,000 in 1998. Net
interest income was $67,000 in 1999 compared to net interest expense of $191,000
in 1998. This increase in net interest income was due to increased interest
income earned on higher cash and cash equivalent balances during 1999. Net
interest expense increased to $191,000 in 1998 from $53,000 in 1997, an increase
of $138,000, or 260.4%. This increase was the result of $2.5 million in
borrowings during 1998 under a new loan agreement. Other income (expense)
consists of gains and losses from foreign currency transactions. In 1997, we
realized foreign currency gains in Sweden related to favorable exchange rate
fluctuations between U.S. and Swedish currencies.

PROVISION (BENEFIT) FOR INCOME TAXES. As a result of our net losses, we have
generated operating loss carryforwards. As of December 31, 1999, we had net
operating loss carryforwards in the U.S. totaling approximately $21.9 million
and net operating loss carryforwards from foreign operations totaling
approximately $9.6 million. Realization of the resulting deferred tax assets is
dependent on future taxable

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income. We have recorded a full valuation allowance against these deferred tax
assets as of December 31, 1999, 1998 and 1997, because we believe that it is
unlikely that such assets will be realized; however, ultimate realization could
be impacted by market conditions or other variables not known or anticipated at
this time.

NET LOSS. Net loss increased to $20.4 million in 1999 from $9.6 million in
1998, an increase of $10.8 million, or 112.0%. This increase in net loss was due
to the increase in our operating expenses to $28.6 million in 1999 from
$16.8 million in 1998, an increase of $11.8 million, or 70.3%. Our operating
expenses increased significantly after our separation from Frontec AB due to the
expansion of our global operations, particularly in the areas of research and
development and sales and marketing. Net loss was consistent at $9.6 million in
1998 compared to $9.7 million in 1997.

SELECTED QUARTERLY RESULTS OF OPERATIONS

The following tables present certain unaudited quarterly statements of
operations data for each of our last seven quarters, as well as the percentage
of our total revenues represented by each item. The information has been derived
from our unaudited financial statements, which have been prepared on
substantially the same basis as the audited financial statements contained in
this prospectus. Our unaudited financial statements contain all adjustments,
consisting only of normal recurring adjustments, that we consider to be
necessary to present fairly this information when read in conjunction with our
financial statements and related notes appearing elsewhere in this prospectus.
The results of operations for any quarter are not necessarily indicative of the
results to be expected for any future period.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30,
1999 1999 1999 1999 2000 2000 2000
-------- -------- --------- -------- -------- -------- ---------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenue:
Licenses................................... $ 2,246 $ 1,693 $ 3,036 $ 1,874 $ 3,439 $ 4,364 $ 6,110
Support.................................... 685 767 745 794 988 1,115 1,272
Services................................... 1,907 2,202 2,087 1,412 2,046 2,856 3,848
------- ------- ------- ------- -------- -------- --------
Total revenue............................ 4,838 4,662 5,868 4,080 6,473 8,335 11,230
Cost of revenue:
Licenses................................... 161 190 533 140 155 564 333
Support and services....................... 1,741 2,388 2,943 3,088 3,014 4,371 4,497
------- ------- ------- ------- -------- -------- --------
Total cost of revenue.................... 1,902 2,578 3,476 3,228 3,169 4,935 4,830
Gross profit................................. 2,936 2,084 2,392 852 3,304 3,400 6,400
Operating expenses:
Sales and marketing........................ 2,277 3,575 3,996 4,732 6,941 9,379 8,925
Research and development................... 634 931 1,073 1,407 3,238 3,904 4,252
General and administrative................. 1,111 2,047 2,188 3,545 2,205 2,299 2,459
Purchased research and development......... -- -- -- -- 5,200 -- --
Stock based compensation................... -- -- -- -- 914 585 3,087
Depreciation and amortization.............. 219 248 229 392 601 846 1,631
------- ------- ------- ------- -------- -------- --------
Total operating expenses................. 4,241 6,801 7,486 10,076 19,099 17,013 20,354
------- ------- ------- ------- -------- -------- --------
Operating loss............................... (1,305) (4,717) (5,094) (9,224) (15,795) (13,613) (13,954)
Other income (expense), net.................. (78) 178 (71) (8) 79 121 191
------- ------- ------- ------- -------- -------- --------
Loss before provision (benefit) for income
taxes........................................ (1,383) (4,539) (5,165) (9,232) (15,716) (13,492) (13,763)
Provision (benefit) for income taxes......... 18 35 48 (7) 30 106 65
------- ------- ------- ------- -------- -------- --------
Net loss..................................... $(1,401) $(4,574) $(5,213) $(9,225) $(15,746) $(13,598) $(13,828)
======= ======= ======= ======= ======== ======== ========
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30,
1999 1999 1999 1999 2000 2000 2000
-------- -------- --------- -------- -------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
AS A PERCENTAGE OF REVENUE:
Revenue:
Licenses................................... 46.4% 36.3% 51.7% 45.9% 53.1% 52.4% 54.4%
Support.................................... 14.2 16.5 12.7 19.5 15.3 13.4 11.3
Services................................... 39.4 47.2 35.6 34.6 31.6 34.2 34.3
------- ------- ------- ------- -------- -------- --------
Total revenue............................ 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Cost of revenue:
Licenses................................... 3.3 4.1 9.1 3.4 2.4 6.8 3.0
Support and services....................... 36.0 51.2 50.1 75.7 46.6 52.4 40.0
------- ------- ------- ------- -------- -------- --------
Total cost of revenue.................... 39.3 55.3 59.2 79.1 49.0 59.2 43.0
Gross profit................................. 60.7 44.7 40.8 20.9 51.0 40.8 57.0
Operating expenses:
Sales and marketing........................ 47.1 76.7 68.1 116.0 107.2 112.6 79.5
Research and development................... 13.1 20.0 18.3 34.5 50.0 46.8 37.9
General and administrative................. 23.0 43.9 37.3 86.9 34.1 27.6 21.9
Purchased research and development......... -- -- -- -- 80.3 -- --
Stock based compensation................... -- -- -- -- 14.1 7.0 27.5
Depreciation and amortization.............. 4.5 5.3 3.9 9.6 9.3 10.1 14.5
------- ------- ------- ------- -------- -------- --------
Total operating expenses................. 87.7 145.9 127.6 247.0 295.0 204.1 181.3
------- ------- ------- ------- -------- -------- --------
Operating loss............................... (27.0) (101.2) (86.8) (226.1) (244.0) (163.3) (124.3)
Other income (expense), net.................. (1.6) 3.8 (1.2) (0.2) 1.2 1.4 1.7
------- ------- ------- ------- -------- -------- --------
Loss before provision (benefit) for income
taxes........................................ (28.6) (97.4) (88.0) (226.3) (242.8) (161.9) (122.6)
Provision (benefit) for income taxes......... 0.4 0.7 0.8 (0.2) 0.5 1.2 0.5
------- ------- ------- ------- -------- -------- --------
Net loss..................................... (29.0)% (98.1)% (88.8)% (226.1)% (243.3)% (163.1)% (123.1)%
======= ======= ======= ======= ======== ======== ========
</TABLE>

Our license revenue has fluctuated over the last seven quarters primarily as
a result of two factors. First, since our separation from Frontec AB in
February 1999, we have been increasing our sales and marketing focus on our
software relative to our professional services offerings. Second, our license
revenue is affected by the timing of our customers' decisions to enter into
license agreements with us. Support revenue has increased as a result of new
support agreements and renewals of support agreements entered into in earlier
periods. Services revenue increased or remained relatively consistent in each
quarter with the exception of the quarter ended December 31, 1999, when many of
our customers were focusing on their internal year 2000 issues. As a result, we
entered into fewer new professional services engagements during the fourth
quarter of 1999. The increases in services revenue were due to increased
services engagements from new and existing customers.

Our cost of license revenue remained relatively consistent as a percentage
of revenue over the seven quarters presented with the exception of the quarters
ended September 30, 1999 and, June 30, 2000, when we incurred increased
commissions to third-party systems integrators, marketing agents and technology
vendors. Our cost of support and services has increased in each quarter due to
the expansion of our support and professional services organizations.

Sales and marketing expenses have increased in each quarter, with the
exception of the quarter ended September 30, 2000, due to increased staffing in
sales and marketing and increases in marketing programs and promotional
activities. During the quarter ended September 30, 2000, we spent less on
marketing and promotional activities than in the previous quarter. Research and
development expenses have increased each quarter as we have expanded our
internal research and development activities. These increases have resulted from
both increases in staffing as well as outsourced development activities. General
and administrative expenses have increased due to increases in staffing, travel,
legal, accounting and other professional services fees as we built up our own
infrastructure after our separation from Frontec AB.

LIQUIDITY AND CAPITAL RESOURCES

During 1997 and 1998, we financed our operations primarily through loans and
capital contributions from Frontec AB. Since our separation from Frontec AB in
February 1999, we have financed our

35
<PAGE>

operations primarily through private sales of convertible preferred stock, which
totaled $62.4 million in net proceeds through September 30, 2000. As of
September 30, 2000, we had $6.6 million of cash and cash equivalents.

Net cash used in operating activities was $35.0 million for the nine months
ended September 30, 2000, and $10.4 million, $10.0 million and $7.4 million for
the years ended December 31, 1999, 1998 and 1997, respectively. For all periods,
cash used in operating activities primarily was attributable to our net losses
during those periods. Our sales cycle is lengthy and unpredictable and may cause
our revenues and operating results to fluctuate from period to period. Any
lengthening of our sales cycle may adversely affect the amount of cash provided
by our operating activities.

During the nine months ended September 30, 2000, we expended $11.8 million
in cash for investing activities compared to $1.2 million for the corresponding
period in the prior year. During the nine months ending September 30, 2000, we
expended $5.9 million on acquisitions, including $4.2 million for Nexstep,
$538,000 for EDT and $1.2 million for SC21. We also spent $5.4 million for
capital expenditures during the nine months ended September 30, 2000. Net cash
used in investing activities was $2.4 million, $1.0 million and $1.2 million for
the years ended December 31, 1999, 1998 and 1997, respectively. For each of
these periods, cash used in investing activities primarily was attributable to
purchases of property and equipment and capitalized software development
expenditures. In 1999, we also expended $180,000 related to the acquisition of a
services company in Germany.

In order to fund our operations during 1999, we raised $20.5 million in
proceeds from the sale of convertible preferred stock to third parties. We
raised an additional $41.9 million in proceeds from the sale of convertible
preferred stock to third parties during the nine months ended September 30,
2000. Additional funding was derived from an equipment financing facility with
CommVest LLC, which provided borrowings of $1.2 million for equipment purchases
during the nine months ended September 30, 2000 and $693,000 in the second half
of 1999. Under this equipment financing facility, we can enter into draws
against this facility up to a total of $3.2 million. The interest rate under
this facility is fixed at 12.55%. Principal and interest is payable under each
draw in 48 monthly installments. For 1997 and 1998, cash provided by financing
activities was derived primarily from capital contributions by Frontec AB. In
1998, we also borrowed $2.4 million through a line of credit with Svenska
Handelsbanken which we refinanced through a loan from Imperial Bank during 1999.
Interest on this loan is payable at the bank's prime rate plus 1% and matures on
November 25, 2000. We intend to repay this loan with the proceeds from this
offering.

In February 1999, in connection with our separation from Frontec AB, we
issued 2,000 shares of Series C convertible preferred stock to Frontec AB in
exchange for the satisfaction and cancellation of substantially all debt owed to
Frontec AB or any of its other subsidiaries at that time, which debt was
approximately $15.4 million. The fair value of the 2,000 shares of Series C
convertible preferred stock was approximately $14.5 million at the date of the
exchange.

As of September 30, 2000, our principal commitments consisted of obligations
under acquisition agreements, operating leases and our equipment financing
facility. We are obligated to pay $500,000 and $2.0 million on December 31, 2000
related to the acquisitions of EDT and SC21, respectively. Additionally, if all
contingencies are met, we will be obligated to pay $1.0 million on each of
December 31, 2000 and December 31, 2001 related to the acquisition of SC21.
Although we have no material commitments for capital expenditures, we anticipate
that capital expenditures and lease commitments will increase, consistent with
our anticipated growth in operations, infrastructure and personnel.

We incurred operating losses of approximately $43.4 million during the nine
months ended September 30, 2000. As of September 30, 2000, we had an accumulated
deficit of approximately $100.5 million. We expect to continue to incur
operating losses and experience significant growth in our operating expenses for
the foreseeable future in order to execute our business strategy. As a result,
we anticipate that operating expenses and planned capital expenditures will
constitute a material use of our

36
<PAGE>

cash resources. In addition, we may use cash resources to fund acquisitions or
investments in other businesses, technologies or product lines. We believe that
available cash and cash equivalents, including the net proceeds from our recent
private placements of our convertible preferred stock, and the net proceeds from
this offering, will be sufficient to meet our working capital and capital
expenditure needs under our current business plan for at least the next
12 months. If we do not complete this offering, we anticipate that additional
financing will be necessary to fund our working capital and capital expenditure
needs for at least the next 12 months. We believe that the financing necessary
will be available through conventional bank financing or private debt or equity
financing. If we are unable to obtain additional financing when needed, we may
be required to reduce the scope of our planned product development and marketing
efforts, which may harm our business and operating results. We believe that we
will be able to successfully reduce the scope of our operations, if necessary.
We cannot assure you that additional financing will be available, or if
available, will be on reasonable terms and not dilutive to our stockholders.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as
amended by SFAS No. 137, is effective for all quarters of fiscal years beginning
after June 15, 2000. Currently, we do not utilize derivative financial
instruments. Therefore, the adoption of SFAS No. 133 is not expected to have a
material impact on our results of operations or financial position.

In December 1999, the Securities and Exchange Commission, or SEC, issued SAB
No. 101, "Revenue Recognition in Financial Statements." SAB No. 101 requires the
following four basic criteria to be met before companies can record revenue:
(a) persuasive evidence that an arrangement exists; (b) delivery has occurred or
services have been rendered; (c) the seller's price to the buyer is fixed or
determinable; and (d) collectibility is reasonably assured. Many of the examples
in SAB No. 101 address situations that give rise to the potential for recording
revenue prematurely. They include transactions subject to uncertainties
regarding customer acceptance, including rights to refunds and extended payment
terms, or require continuing involvement by the seller.

Subsequently, the SEC issued SAB No. 101A and SAB No. 101B, "Amendment:
Revenue Recognition in Financial Statements," that delays the implementation
date of certain provisions of SAB No. 101. The adoption of SAB No. 101 is not
expected to have a material impact on our results of operations or financial
position.

In March 2000, the Financial Accounting Standards Board issued
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation, an interpretation of APB Opinion No. 25." The Interpretation
answers questions dealing with APB No. 25 implementation practice issues.

Interpretation No. 44 will be applied prospectively to new awards,
modifications to outstanding awards, and changes in employee status on or after
July 1, 2000, except as follows: (i) requirements related to the definition of
an employee apply to new awards granted after December 15, 1998;
(ii) modifications that directly or indirectly reduce the exercise price of an
award apply to modifications made after December 15, 1998; and
(iii) modifications to add a reload feature to an award apply to modifications
made after January 12, 2000. Financial statements for periods prior to July 1,
2000 will not be affected. The adoption of Interpretation No. 44 is not expected
to have a material impact on our results of operations or financial position.

SEASONALITY AND INFLATION

Although our operations have not proven to be significantly seasonal,
quarterly revenues and earnings may vary at times. This primarily is
attributable to the timing of customers entering into license agreements with us
and fluctuations in the amount of professional services used by our customers,
especially during holiday seasons. We are not able to control the timing of
these decisions or fluctuations.

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<PAGE>
Although we cannot accurately determine the amounts attributable to
inflation, we have been affected by inflation through increased costs of
employee compensation and other operating expenses. To the extent permitted by
the marketplace for our software and services, we attempt to recover increases
in costs by periodically increasing prices. Additionally, most of our support
agreements provide for annual increases in pricing.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The following discusses our exposure to market risk related to changes in
foreign currency exchange rates and interest rates. This discussion contains
forward-looking statements that are subject to risks and uncertainties. Actual
results may vary materially as a result of a number or factors, including those
set forth in the "Risk Factors" and elsewhere in this prospectus.

FOREIGN CURRENCY EXCHANGE RATE RISK

We operate globally, deriving 82.8% and 65.5% of our total revenue for the
year ended December 31, 1999, and the nine months ended September 30, 2000,
respectively, from customers outside the U.S. A significant portion of our
business is conducted in currencies other than the U.S. dollar. Changes in the
value of major foreign currencies relative to the value of the U.S. dollar
adversely impacted revenues by approximately $925,000 and favorably impacted
expenses by approximately $1.7 million in the nine months ended September 30,
2000. We expect that our international operations will continue to provide a
significant portion of our revenue and expenses. Our international revenue will
be adversely affected if the U.S. dollar continues to strengthen against certain
major international currencies.

Non-U.S. monetary assets are maintained in currencies other than the U.S.
dollar, principally the pound sterling, Swedish krona, Singapore dollar,
Australian dollar and the Euro. Any appreciation of the U.S. dollar against the
currencies in which these items are denominated has the effect of reducing their
values in our consolidated financial statements. Changes in the value of these
currencies relative to the U.S. dollar are charged or credited to stockholders'
equity. In addition, to the extent that we engage in international sales
denominated in U.S. dollars, an increase in the value of the U.S. dollar
relative to foreign currencies may make our products less competitive in
international markets. Transaction and translation gains and losses have not
been significant in any of the periods presented.

To date, we have not used financial hedging techniques nor have we entered
into financial instruments for trading or speculative purposes. Although we will
continue to monitor our exposure to currency exchange rate fluctuations, and
when appropriate, may use financial hedging techniques in the future to minimize
the effect of these fluctuations, we cannot assure you that exchange rate
fluctuations will not adversely affect our financial results in the future.

INTEREST RATE RISK

As of September 30, 2000, we had cash and cash equivalents of $6.6 million,
which consist of cash and highly liquid short-term investments, and our exposure
to interest rate changes has therefore been immaterial.

As of September 30, 2000, we had total debt outstanding of $2.7 million,
which has interest rates that are tied to the lenders' prime rates. Therefore,
we are subject to exposure to interest rate risk for these borrowings based on
fluctuations in the prime rate. Based upon the outstanding indebtedness under
these arrangements, an increase in the prime rate of 0.5% would cause a
corresponding increase in our annual interest expense of approximately $13,500.
The interest rate on our capital leases is fixed, and as such, we are not
subject to risks associated with market rate increases.

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<PAGE>
BUSINESS

OVERVIEW

We are a leading global provider of e-business software and services that
enable integration and synchronization of web-enabled trading communities. Our
software and related services synchronize and automate business processes and
information flows across Internet-based supply webs and allow trading
communities and their members to conduct B2B e-commerce in real-time. By
employing our TradeSync family of products, trading partners can connect to a
common network, monitor shared supply web activities synchronize and manage
interactive business processes and react quickly to dynamic events, while
retaining their existing IT systems.

INDUSTRY BACKGROUND

THE EMERGENCE OF TRADING COMMUNITIES

The emergence of the Internet has resulted in significant changes in global
economic and business processes. Enterprises in this new economy are recognizing
the need to leverage the Internet to transform their traditional business
structures and relationships with trading partners into Internet-based trading
communities. Members of these new trading communities are able to outsource
supply web operations to their most efficient trading partners, resulting in
effective, streamlined operations and greater customer satisfaction. In
addition, members of trading communities are realizing incremental value through
improved asset utilization and reduction of inventory and logistics expenses.

The creation of a trading community requires the automation and integration
of business processes and information flows among trading partners. It also
requires a common method to manage the flow of goods and services throughout the
supply web to ensure execution and fulfillment of multiple events. Sharing
information across the supply web in real-time permits interactive collaboration
among trading partners. Trading partners are therefore able to address logistics
constraints faster, resulting in greater efficiencies, cost reduction and
improved customer service. We believe that the most successful businesses will
require trading partners to be tightly integrated and synchronized. However,
providing the required visibility into the supply web is a complex and
challenging task for most organizations.

The migration to Internet-based systems is underway. According to estimates
by Forrester Research, the total dollar value of business-to-business, or B2B,
transactions over the Internet is expected to grow to over $2.7 trillion by
2004, and B2B e-commerce will account for more than 90% of U.S. e-commerce
transactions by 2004. In addition, the Delphi Group forecasts that revenues from
B2B e-commerce software and services will grow from $5 billion in 1999 to
$40 billion in 2002.

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<PAGE>
THE EVOLUTION OF LEGACY SYSTEMS

Most large organizations have implemented some form of Enterprise Resource
Planning, or ERP, software to automate their internal business processes. ERP
software, including manufacturing, financial, supply chain management, sales
force automation, order entry systems, transportation management and warehouse
management, provides organizations with the ability to define, automate and
refine internal business processes and supports an integrated approach to
managing a company's financial and manufacturing operations. In addition, many
organizations have acquired complementary best of breed software, and some have
implemented Electronic Data Interchange, or EDI, software, which creates and
transports electronic business information between different companies, or other
secure communications protocols for limited trading partner integration.
Initially, this software provided significant competitive advantage to
organizations through higher efficiency and better quality at lower production
costs. However, in order to continue to create incremental value and greater
operational efficiencies, organizations are now attempting to integrate their
software across trading communities. Extending inventory visibility to suppliers
and customers can allow for significantly better coordination and optimization
of materials delivery, manufacturing and shipping plans. For example, a retail
trading partner is able to improve its inventory turnover by gaining visibility
into a supplier's inventory, securing available goods and communicating this
transaction to others.

While most large organizations have implemented multiple ERP software
applications, many have not yet integrated their different software applications
within their enterprise and most do not have the capability to integrate their
software applications with those of their trading partners across a trading
community. To integrate an organization's software applications internally or
among trading partners, disparate software applications must share the same set
of information with any other software applications in use, and as information
changes in one application, that information must be updated and translated in
real-time to other software applications. For example, companies typically need
to consolidate and integrate inventory data among multiple trading partners and
from different software applications, such as Supply Chain Management, or SCM,
software, and Supply Chain Execution, or SCE, software. Companies select and
configure this software to fulfill the internal requirements of their particular
businesses and to support traditional sequential supply chain relationships.
Although most software can be integrated among third parties, traditionally all
parties must implement the same software and configurations to achieve B2B
e-commerce benefits.

e-Business models require integration and interaction at the trading
community level in order to maximize benefits. We believe that to be competitive
in the new economy, companies must decrease cycle times, transaction costs and
working capital requirements, while also increasing available capacity, market
share and levels of customer service. They must also find ways to leverage their
existing, significant IT investments. Companies are beginning to address the
demands of B2B e-commerce through the real-time integration and automation of
software and systems, general business processes and the subsequent development
of trading communities. Companies are reducing their investment in physical
assets, such as inventory, transportation equipment and excess production
capability and are replacing their existing methods of order and fulfillment
logistics. Increasingly, companies are addressing these B2B integration demands
through outsourcing and increased reliance on trading partners.

LIMITATIONS OF EXISTING E-BUSINESS TRADING COMMUNITY SOLUTIONS

Achieving trading community integration and synchronization is difficult
because companies use a wide array of disparate IT systems and communication
protocols, including packaged software and custom business systems. We believe
that no single approach effectively delivers the full spectrum of internal and
external Internet-based integration and trading community management software
and services. In addition, few existing approaches effectively address the
integration of legacy systems, which are widely prevalent

40
<PAGE>
among Fortune 1000 companies. Current integration and supply web management
approaches can be grouped into the following categories:

INTERNAL INTEGRATION - the connection of business processes, software and
systems, data and communication methods essential to gain visibility within the
enterprise. Historically, companies bridged disparate software through custom
development. Companies have also solved internal integration with EAI software
that integrates most major packaged software. Generally, neither custom
integration nor EAI software is scalable to integrate a large number of trading
partners or capable of implementing real-time, event-driven messaging.

EXTENDED ENTERPRISE INTEGRATION - the communication among trading partners
that allows the transparent interaction of IT infrastructures through messaging
technologies without regard to business-specific processes, individual system
configurations or communication preferences. The two most widely used messaging
technologies are EDI formats and Extensible Markup Language, or XML. EDI
generally has been used by large organizations that rely on communication over
proprietary networks. XML tools allow software to exchange data over the
Internet using XML data definitions. Generally, EDI and XML are more intrusive
because they require that all trading partners either install compatible
software, in the case of EDI, or use the same dialect, in the case of XML.

BUSINESS PROCESS INTEGRATION - the collaboration among multiple businesses
to create public and private virtual exchanges and to build larger community
affiliations populated by market makers, trading partners, customers and
suppliers. Historically, business process integration between companies
restricted any modifications with respect to processes, configurations and data.
However, business process integration is evolving to facilitate flexible
business processes that allow data exchange and dynamic trading interactions
among trading partners.

SUPPLY WEB MANAGEMENT - the synchronization of information flows within an
entire trading community. The new economy demands that synchronization be
delivered through real-time communication and event execution across the trading
community. Because of its complexity, real-time trading community
synchronization approaches are not widespread.

THE OPPORTUNITY FOR B2B INTEGRATION AND TRADING COMMUNITY MANAGEMENT SOFTWARE

We believe there is a significant market opportunity to provide
best-of-breed B2B integration and trading community management software that
functions within an integrated IT environment. To be successful in the emerging
e-business market, companies need comprehensive software products that
accelerate time to market and provide quantifiable business value. Companies
must also find software that allows management to make proactive decisions to
resolve dynamic business problems.

THE VIEWLOCITY SOLUTION

Our TradeSync family of products includes software integration, B2B
integration and trading community and supply web synchronization and management
products. Our synchronization products provide for the automation of business
processes and information flows between customers, suppliers and trading
communities, and decision support applications for managing the flow of goods
and services throughout the supply web.

Our integration software gives customers the ability to develop the
technological foundation of a trading community and addresses the complexities
of integrating trading partners in diverse IT environments. Our integration
software provides remote connectivity of trading partners with their existing IT
environments, without imposing new standards or applications. As a result,
trading partners can communicate information and collaborate through shared
business processes in real-time. The Community Manager features of AMTrix
provide a framework for managing a dynamic trading community while quickly,
easily and remotely populating the community with new participants. Through our
TradeSync Process Manager product, we enable our customers to define and enhance
business processes and easily

41
<PAGE>
change the processes with minimal customization. Our customers can define
integration requirements through graphical workflow, business process models and
rules-based logic.

Building upon our integration products, our TradeSync Supply Web Components,
which include our TradeSync Inventory Visibility and TradeSync Shipment
Visibility products, enable our customers to leverage trading community
information from multiple sources and systems. These supply web synchronization
products provide:

- VISIBILITY of up-to-date information regarding the status of goods and
services across multiple enterprises and a common and comprehensive view
of the movement of the goods and services;

- MONITORING of business events within an enterprise and throughout supply
webs allowing for exception management and proactive problem resolution;

- EVENT IDENTIFICATION of potential difficulties within trading communities
before implementing business decisions and processes by simulating and
validating a customer's proposed model; and

- NOTIFICATION of events to individuals and systems driven by specific
business rules.

Each of our products is designed to work on an integrated basis with our
AMTrix product. Customers will achieve the most benefit and functionality from
our products by employing multiple products from our TradeSync family of
products. However, our TradeSync Process Manager and TradeSync Supply Web
Components are designed with an open architecture and may be used without AMTrix
and with third-party integration products.

We leverage strong relationships worldwide with leading software and systems
integration partners to provide value-added, scalable software. We provide
e-business software and services that create business value by combining
integration software with supply web domain expertise and software designed
specifically for the Internet. Our products provide the following benefits:

FIRST MOVER ADVANTAGE. We believe that our products provide companies the
potential to accelerate their time to market through rapid implementation,
retention of existing IT infrastructure and capacity for growth. We accomplish
this through the utilization of our many-to-many B2B integration products. The
benefits can be measured in terms of increased market share and revenue
opportunities for the trading community and increased speed to realize benefits
for the community members.

REAL-TIME INTERACTION. We believe we are a leading provider of B2B
integration software and services that allow real-time interaction among trading
partners across disparate technical hardware and software platforms. Our
event-driven software allows for optimization of supply web processes and the
ability to react to unexpected and exception events quickly. Early detection of
exception events provides a broader set of response alternatives. These
real-time decisions reduce the risk of uninformed decisions and often increase
sales and asset utilization, reduce expenses and improve customer satisfaction.
Our TradeSync Shipment Visibility and TradeSync Inventory Visibility products
provide customers access to real-time order fulfillment status information using
an Internet-based graphical dashboard.

INCREASED RETURN ON INVESTMENT. Our TradeSync family of products allows our
customers to maximize their return on investment by leveraging existing IT
systems, best-of-breed software and emerging technologies and by creating
greater visibility, monitoring and decision support capabilities. Our software
integrates these technologies with trading partners and trading communities
through all major communication protocols. Our software supports all business
systems, including ERP, SCM and EAI, as well as technologies, including Java and
XML, open Application Program Interface and all major international EDI formats.
Our TradeSync family of products helps drive increased return on assets, reduced
cycle times, lower inventories and higher inventory turnover.

REDUCED IMPLEMENTATION RISK. Because of our proven performance, our
TradeSync family of products reduces implementation and scalability risks for
our customers. We have designed, developed and implemented our products in over
3,200 installations for more than 1,000 customers in 51 countries.

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STRATEGY

Our strategy is to strengthen our global leadership position in providing
software and services that enable complex trading communities and synchronize
supply webs. Key elements of our strategy are:

EXPAND E-BUSINESS TECHNOLOGY AND SOFTWARE LEADERSHIP. We intend to expand
our leadership position in providing integration software and services,
including B2B integration software and innovative supply web synchronization
software, that further enable organizations to maximize the value of their
extended enterprise. We will continue to invest in our product offerings through
research and development, both internally and on location at client sites. As a
result of these efforts, we have introduced new supply web synchronization
software products that provide trading partners with real-time visibility into
their extended supply webs. In addition, we will continue to build our
e-business solutions group to provide support and consulting services to our
clients and further drive innovation and technical and thought leadership.

ENHANCE OUR E-BUSINESS SUPPLY WEB DOMAIN EXPERTISE. We believe that the
market for B2B integration software will experience significant changes over the
next few years. Traditional linear supply chains are already transforming into
dynamic supply webs through the use of real-time and Internet-based technology.
Our objective is to be at the forefront of these developments as the leading
provider of B2B integration software and supply web synchronization software.
Our management team has significant B2B integration and supply web domain
expertise, including ERP, advance planning, transportation management systems
and supply chain and logistics operations. We will continue to enhance our
e-business logistics expertise through research and development, acquisitions
and strategic alliances to provide software and services that offer significant
value to our customers.

TARGET HIGH-GROWTH, GLOBAL MARKETS. We focus our sales efforts on selected
high-growth, global markets in which we believe our TradeSync family of products
can provide significant business benefits and in which we can reduce our sales
and implementation cycles. We currently target companies that specialize in
third-party logistics, technology, consumer packaged goods, e-commerce and
traditional retail and apparel. These markets are characterized by high rates of
growth, dynamic business processes and rapid adoption of e-business software. We
seek to further penetrate these and other markets that we believe are rapidly
adopting e-business strategies.

LEVERAGE AND SUPPORT OUR GLOBAL CUSTOMERS. We believe our customer-centric
focus provides significant opportunity to proactively market to our existing
customer base and develop follow-on sales opportunities. We will continue to
leverage our existing customers who serve as reference accounts and increase
visibility to prospective customers within their trading communities. In
addition, our account management team focuses exclusively on maximizing customer
satisfaction. This team resolves outstanding issues, educates customers on our
latest software and services and establishes communications with our customers'
senior management to facilitate further business development.

CONTINUE OUR GLOBAL LEADERSHIP THROUGH STRATEGIC ALLIANCES. We plan to
continue to significantly increase our presence in the U.S. and expand our
global presence by increasing our sales and marketing personnel, which may
include establishing additional offices, and pursuing strategic alliances. We
have sales and services offices in Australia, China, France, Germany, the
Netherlands, Singapore, Sweden, the U.K. and the U.S. We also have a sales
office in Malaysia and Hong Kong. We plan to aggressively expand our sales
efforts utilizing our direct sales force and partnerships and alliances with
third-party systems integrators and value-added resellers. Our partnerships and
alliances provide additional global marketing and distribution channels that
enable us to reach a larger customer base. In addition, we intend to continue
pursuing acquisitions and investments in complementary businesses that provide
us with opportunities for enhanced product and services offerings, additional
technology and additional distribution channels.

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PRODUCTS AND TECHNOLOGY

Our TradeSync family of products includes B2B integration products --
AMTrix, TradeSync Integration Connectors, TradeSync Connector Development
Platform and TradeSync Process Manager -- and supply web synchronization
products -- TradeSync Inventory Visibility and TradeSync Shipment Visibility.

Although customers typically license a combination of our products,
customers can license one or more of the products in our TradeSync family of
products. During the periods prior to June 30, 2000, we derived all our revenue
from the licensing of AMTrix and related TradeSync Integration Connector and
Connector Development Platform products and from professional services
supporting these products. We introduced our TradeSync Process Manager and
TradeSync Supply Web Component products in the second quarter of fiscal 2000 and
made them generally available in the third quarter of fiscal 2000. For the nine
months ended September 30, 2000, we derived 96.6% of our license revenue from
AMTrix and related TradeSync Integration Connector and Connector Development
Platform products. We expect revenue from AMTrix and related TradeSync
Integration Connector and Connector Development Platform products and related
professional services to continue to account for a significant portion of our
revenue for the foreseeable future. However, we anticipate that our TradeSync
Process Manager and TradeSync Supply Web Component products will begin to
account for an increasing percentage of our revenue as we continue to focus our
business strategy on these products.

[GRAPHIC OF TRADESYNC FAMILY OF PRODUCTS]

[At the top of the graphic is a title bar which states "TradeSync-TM- Family
of Products." The graphic is a three level graphic. The top level is a
rectangle; inside the rectangle is the text "Supply Web Components," underneath
which is the text "SYNCHRONIZE." In the bottom of the rectangle are two smaller
rectangles. The left rectangle contains the text "Monitor," and the right
rectangle contains the text "Execute." Below the top level rectangle are two
connected boxes which are also connected to the top level rectangle and bottom
level rectangle. The left box contains the text "AMTrix Community Manager,"
underneath which is the text "COMMUNICATE." The right box contains the text
"Process Manager," underneath which is the text "COLLABORATE." The bottom level
is another rectangle; in the center of the rectangle is the text "AMTrix
Integration Broker," underneath which is the text "CONNECT." The left side of
the rectangle contains the text "Integration Connectors." Underneath this text
are two columns listing data formats and protocols. The right side of the
rectangle contains the text "Connector Development Platform." Underneath this
text are three columns listing "Worldwide formats," "Communication standards"
and "Connectors to large enterprise applications."]

AMTRIX

AMTrix is a powerful integration product that has been developed, deployed
and enhanced over a nine year period, and as a result, has evolved into a highly
reliable and proven product. AMTrix enables real-time information integration
between diverse and remote systems by connecting multiple software applications
within a single enterprise or across multiple enterprises within trading
communities. AMTrix's distributed architecture and strong scalability is
tailored for B2B business environments that require expanding business
functionality and extensive reusability of business process models. By capturing
and processing business events in real-time, AMTrix supports dynamic business
processes, workflows and associated information flows.

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<PAGE>
Operating on UNIX, Windows NT and AS/400, AMTrix provides the full range of
functions needed to integrate diverse systems across operating platforms,
databases, communication protocols, technology infrastructures, e-commerce
standards and message and application formats. AMTrix's open, agnostic
architecture enables one AMTrix product installation to connect with multiple
diverse and remote systems involving different hardware, operating systems,
databases, communication protocols and message formats, including XML dialects,
EDI dialects, ERP systems, planning systems and legacy systems.

The Community Manager features of our AMTrix product provide a framework for
establishing and managing a dynamic trading community and quickly, easily and
remotely populating the community with new participants. We leverage the
capabilities of our B2B integration technology and process broker technology to
connect and communicate across multi-enterprise trading communities and to
support a diversity of trading relationships and transactions in an
Internet-based environment.

The Community Manager features automate trading relationships by:

- providing remote access by non-technical users to the system management,
setup and administration of the trading community;

- selecting and managing business processes through community business
rules;

- facilitating business analysis through access to logging and monitoring of
business events that allows for exception management, problem resolution
and informational alerts;

- establishing profiles for trading community members through secure
authentication and authorization that allows the members to define and
manage the level of access to information provided to specific members of
the trading community; and

- creating a community catalog that maintains shared definitions using both
XML and EDI.

TRADESYNC INTEGRATION CONNECTORS

Our TradeSync Integration Connector products automatically translate and map
data from one structure, application, protocol or event to another, both within
a single enterprise and across multiple enterprises, regardless of data formats.
We offer an extensive library of connectors that provide quick access to data
contained in disparate business applications. Our TradeSync Integration
Connector products are add-on modules to the AMTrix product.

<TABLE>
<CAPTION>
CONNECTORS BENEFIT EXAMPLES
----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
TECHNOLOGY CONNECTORS Enable data stored in one EDI, HTML, XML (multiple
format to be compatible with dialects), Oracle, Informix,
other formats Sybase, MS SQLServer, MS
BizTalk, DB2/400, DB2 (AIX),
ODBC

APPLICATION CONNECTORS Enable comprehensive SAP R/3, JDE OneWorld
integration of business
software applications

COMMUNICATION CONNECTORS Enable communication between HTTP, SAP ALE, IBM MQ series,
major protocols and E-mail, FTP, OFTP, X.420,
environments X.435, Sockets, ASYNC,
SNADS,TCP/IP, X.25

EVENT NOTIFICATION CONNECTORS Enable notification to E-mail, Fax, Pager, Microsoft
individuals and systems as Exchange, Lotus Notes
events occur
</TABLE>

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<PAGE>
TRADESYNC CONNECTOR DEVELOPMENT PLATFORM

Our TradeSync Connector Development Platform product, or CDP, provides a
simplified method for our partners and customers to rapidly develop and
implement additional application integration connectors. Our CDP includes the
requisite mechanisms for describing the nature, structure and meaning of data
and for accessing and converting data. It provides a standard, flexible process
to quickly implement seamless data and logical links between different software
applications and environments across disparate IT infrastructures. This reduces
the cost and time of developing and maintaining application integration
interfaces by allowing our partners and customers to rapidly develop and
implement customized integration connectors that join disparate data,
applications, protocols and events. Our CDP product is an add-on module to the
AMTrix product.

TRADESYNC PROCESS MANAGER

Our TradeSync Process Manager product supplies the foundation for managing
and synchronizing business events and provides business process technology for
business process integration and software application integration. Our TradeSync
Process Manager enables our customers to define and enhance business processes
and easily change the processes with minimal customization. This enables our
customers to define integration requirements through graphical workflow,
business process models and rules-based logic.

When business processes change, the workflow and process models are easily
adapted to reflect the desired interaction among trading partners. Our TradeSync
Process Manager provides the following benefits in business process modeling,
integration and synchronization:

- visualization of business processes for easier modeling;

- synchronization and timing of business events;

- integration of both manual and automated processes;

- identification of potential difficulties before implementation of the
business process model by simulating and validating a customer's proposed
model;

- availability of an enterprise-wide, real-time graphical dashboard of key
performance indicators; and

- ability to easily change enterprise processes and integration points.

TRADESYNC SUPPLY WEB COMPONENTS

Our TradeSync Supply Web components are Internet-based software for
monitoring and managing a multitude of events across extended supply webs. These
components aggregate information throughout the supply web so that the
information can be shared among trading partners. Designed to accommodate the
volume and velocity of the information in supply webs, our TradeSync Supply Web
components manage by exception and alert participants when scheduled events do
not occur. This alert notification works in conjunction with workflow rules to
generate appropriate operational responses.

We designed our TradeSync Supply Web components using a common architectural
framework. As a result, we can embed these components as modules in our other
software products or the software products developed by third parties, including
third party warehouse management systems, SCM and ERP applications. This common
architecture also allows third parties to develop additional components, either
as extensions or modifications of our base products, to resolve different
business problems.

Our TradeSync Inventory Visibility component provides aggregation and
monitoring of inventory levels and product activity data within an enterprise
and among the members of a trading community. Our TradeSync Inventory Visibility
component captures data from various sources and presents this information in a
single, up-to-date view of inventory status across multiple enterprises and in
the extended supply web. In addition, the TradeSync Inventory Visibility
component translates inventory descriptions into a single

46
<PAGE>
community language to enable comprehensive inventory visibility and effective
management. Using this product, all parties along the supply web are able to
track and monitor each other's inventory status, enabling greater efficiency and
quicker, more reliable supply web performance.

Our TradeSync Shipment Visibility component provides a multi-enterprise,
multi-leg view of shipments, orders and associated inventory throughout the
trading community. This component permits trading partners to query and retrieve
shipment information related to outstanding orders, which provides greater
visibility into shipments throughout the supply web. Our TradeSync Shipment
Visibility component also:

- provides current shipment details including scheduled departure and
arrival times, as well as origin, routing and destination information and
status;

- allows users to view events associated with a shipment life cycle so they
may intervene to assure that customer delivery dates are met; and

- generates exception event alerts to enable users to take corrective
actions.

SERVICES

PROFESSIONAL SERVICES. Our professional services organization consists of
over 95 consultants worldwide as of September 30, 2000, providing support to our
customers and third-party systems integrators with the implementation of our
e-business products. Incorporating our e-business valuation and assessment, or
e-VA, methodology, we assist customers and partners in rapidly developing
e-business solutions. Our e-VA methodology aligns inter- and intra-company
processes and technology and identifies the business objectives that will
provide identifiable gains for an organization. Once business objectives are
determined and prioritized, we develop an implementation plan to achieve our
objectives. Our e-VA methodology is designed to help companies achieve rapid
incremental returns while deploying our products. In addition, our professional
services team utilizes our proprietary e-business value execution, or e-VX, full
life cycle implementation methodology to ensure global consistency of approach
and quality. Our consultants are trained in this methodology by our global
training experts. This methodology enables us to service our large
multi-national customers and third-party systems integrators globally with local
resources in a seamless fashion. We emphasize this competitive advantage of our
"think global, act local" deployment capability.

CUSTOMER SUPPORT. Through our comprehensive customer service programs, the
relationships we establish with our customers extend beyond initial systems
implementations. We are a worldwide provider with an engineering group of 42
technical support consultants as of September 30, 2000. We offer our customers a
choice of several levels of customer support, all of which provide dependable
and timely resolution of technical inquiries. Customers covered by a support
agreement have support available seven days a week and 24 hours a day. Customers
can access our global support organization by using our toll-free telephone
service, e-mail or by submitting support requests over the Internet. Progress of
support requests can be monitored over the Internet. Our support web site
provides customers with access to our knowledge database, product bulletins,
product patches, product manuals, documentation updates, e-group discussion
forums and customer feedback. Customers also have unlimited access to trained
maintenance personnel.

Customer satisfaction is a high priority for us. We use a third-party
research company to evaluate our customers' satisfaction on a recurring basis.
We use the customer feedback we receive to help identify, analyze and improve
our customer service offerings. In addition, we maintain a job-rotation program
between our support and professional services organizations, which provides an
ongoing learning experience for our consultants and a greater knowledge base for
our customers.

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<PAGE>
TRAINING. We believe that effective training is a key component of
delivering comprehensive e-business software. Our global training offers a full
range of training courses, deliverable worldwide to a broad audience. Courses
include introductions to our products, integration methodology, product
extensions and workshops that tie multiple dimensions together. The curriculum
is partitioned into basic, intermediate and advanced offerings that target
audiences from business-oriented to highly technical. We offer certification in
these roles since each plays a key part in planning, implementing and
administering our products. We conduct training and certification in centers
located in Atlanta, Georgia; Beijing, China; London, U.K.; Singapore; Stockholm,
Sweden; and Sydney, Australia.

BUSINESS RELATIONSHIPS WITH THIRD PARTIES

We have formed business relationships with value-added resellers, global
systems integrators and component assembly companies, third-party software
companies and trading communities. These relationships increase our global
market presence and sales and implementation capabilities. Through these
relationships, we provide our customers with rapid implementations of our highly
scalable e-business software. During the nine months ended September 30, 2000,
revenue generated through these business relationships accounted for 24.5% of
our total revenue. However, we do not believe that our relationship with any
single one of these entities is material to our business or results of
operations.

VALUE-ADDED RESELLERS. We market and sell our e-business software through
value-added resellers, or VARs, including Origin Taiwan BV, and Logica UK Ltd.
Many of our VARs specialize in providing software within the vertical markets
and functional areas in which we focus. We intend to leverage our industry
expertise with VARs to deliver software that accelerates our penetration in key
vertical markets.

GLOBAL SYSTEMS INTEGRATORS AND COMPONENT ASSEMBLY RELATIONSHIPS. We have
informal relationships with many leading third-party systems integrators based
on jointly pursuing customers and implementing our software. These relationships
include Andersen Consulting, Cap Gemini, S.A., Ernst & Young, IBM Global
Services, Asea Brown Boveri Inc., Electronic Data Systems Corporation, Origin
International BV, BORN Information Systems, Inc. and iXL Enterprises, Inc. Many
of these entities and others with which we have worked have significant
e-business initiatives with Fortune 100 early adopter customers, which enables
us to quickly reach key decision makers. In addition to reducing our sales
cycle, these entities enable us to leverage our service organization and our
ability to service more customers.

SOFTWARE COMPANY RELATIONSHIPS. We have informal business relationships with
leading ERP, supply chain planning and supply chain execution software providers
such as Ariba, SAP AG, J.D. Edwards World Solutions Corporation,
Industri-Matematik International AB, IBM, Manhattan Associates, Inc., Microsoft
Corporation and VerticalNet, Inc.

TRADING COMMUNITIES. These communities are powerful relationships that give
us access to all community members, enhancing our ability to sell e-business
software to those members. We have informal relationships with trading
communities such as CarrierPoint, Inc., ECnet, Inc. (formerly Advanced
Manufacturing Online Ltd.), Industry Networks, Marconi Corporation plc,
Mainpath, Inc. and VLO Investments Pty Limited.

CUSTOMERS

As of September 30, 2000, we had over 1,000 customers worldwide with over
3,200 product implementations. Many of our customers are Global 2000
organizations. No single customer accounted for 10% or more of our revenue for
the year ended December 31, 1999 or the nine months ended September 30, 2000.

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<PAGE>
The following are representative direct and indirect customers that use our
software products. These customers represent key vertical markets which we
target as part of our business strategy: third-party logistics, technology,
consumer packaged goods, e-commerce and traditional retail and apparel.

<TABLE>
<CAPTION>
ENTERPRISES
<S> <C>
American Standard, Inc. Kraft Jacob Suchard Erzeugnisse GmbH & Co. KG
Carrefour SA Mars UK Limited
China Ocean Shipping (Group) Company Ryder Integrated Logistics, Inc.
DHL International, Ltd. Schenker AB
E.I. du Pont de Nemours and Company Siemens Corporation
France Telecomm Warner-Lambert
Wyle Systems, LLC

TRADING COMMUNITIES
3Plex.com Marconi Corporation plc
CarrierPoint, Inc. (Electronic Logistics Management Solutions)
China Communications Import and Export Sony Systems Design International Pte. Ltd.
ECnet, Inc. Swedish Pharmacy (apoteksbolaget)
IndustryNetworks.com, L.L.C. Telia Electronic Commerce
Mainpath, Inc. UK Utilities
Volvo AB
</TABLE>

SELECTED CUSTOMER CASE STUDIES

The following case studies illustrate how some of our customers are using
our TradeSync family of products:

CARREFOUR SA

Carrefour SA, based in Paris, France, is the second largest retail
organization in the world, operating more than 9,000 stores in 26 countries.
These stores offer a wide variety of merchandise ranging from food and clothing
to appliances and computers, as well as financial and optical services.

OPPORTUNITY: Carrefour's strategic initiative for deploying an Efficient
Customer Response application throughout its global operations called for a
software solution to link its internal applications and external suppliers.
Located in 26 countries, Carrefour needed a robust software with the breadth and
depth of functionality to support a global supply web.

SOLUTION: Carrefour has already implemented AMTrix in several countries to
quickly and seamlessly integrate its merchandising and logistics applications.
By using AMTrix, Carrefour avoided many classic point-to-point problems
associated with hard-coded integration because our software provided the
insulation between its internal applications and its external trading partners.
To date, AMTrix and its wide range of connectors have met more than 95% of
Carrefour's requirements.

CARRIERPOINT, INC.

CarrierPoint, Inc., based in Atlanta, Georgia, is a collaborative
transportation marketplace that provides value to both shippers and carriers by
delivering contract management and dynamic spot market pricing tools for
truckload and less-than-truckload shipments. CarrierPoint's Marketplace(SM)
allows each participant to use the web to set up and retain control over their
processes using their normal business rules.

OPPORTUNITY: CarrierPoint differs from a typical load posting site in
several important ways: dynamic matching based on weighted criteria on
performance metrics other than price; private exchanges; contract management
tools; automatic payment processing; data warehousing and a rating system for
both carriers and shippers. CarrierPoint sought a strategic initiative for
deploying their Dynamic Shipping

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<PAGE>
Marketplace-TM- (DSM). As part of their strategy, CarrierPoint needed a system
that provided an integration infrastructure between the company and the back-end
systems of large shippers and carriers. This would allow their larger customers
to create entries on their own ERP systems, without having to create duplicate
entries on the company's web site.

SOLUTION: CarrierPoint implemented our AMTrix product to link the disparate
systems and platforms within the exchange, and chose our supply web
synchronization applications to provide visibility over customer shipments.
AMTrix's robust, open, non-intrusive integration infrastructure reduced the
barrier of entry, and, in turn, allowed CarrierPoint to integrate rapidly the
back-end systems of their customers into DSM. CarrierPoint's new flexible
infrastructure provides B2B integration for a wide range of system
architectures, supports the multiple communication protocols and adapts to the
customers' business and technical models.

DHL INTERNATIONAL, LTD.

DHL International, Ltd., the world's largest international air express
carrier, operates in 228 countries with over 66,000 employees. DHL is organized
into three geographical regions with Europe/Africa as the largest division,
serving 118 countries.

OPPORTUNITY: Running a demanding global operation under competitive pressure
means that DHL must have a fully integrated system that supports the multiple
data types and non-standard formats of both its divisions and its customer base
in order to satisfy short delivery times and customer service requirements.

SOLUTION: DHL adopted AMTrix as a core operational technology to run a
decentralized operation in 11 countries. In combination with the implementation
of AMTrix, DHL's Internet-based tracking option provides the ability to track
any international shipment for a known airway bill number around the world. In
addition, this information is available to the customer on a continuous,
real-time basis. DHL benefits from improved data quality, lower costs, better
quality control and greater customer satisfaction.

ECNET, INC.

Established in 1995, ECnet, Inc. is a leading e-market for the technology
manufacturing industry. ECnet enables inter-company commerce among global
technology manufacturers. ECnet's solutions utilize our products to enable
collaborative efforts between manufacturers and their trading partners, tangibly
improving effectiveness and efficiency.

OPPORTUNITY: Unlike traditional software, ECnet was striving for a
non-proprietary, non-intrusive installation. To facilitate early market success,
ECnet desired a neutral, browser-based system to connect multiple trading
partners through the Internet. ECnet had to ensure that all community members
could interact despite their use of disparate internal business systems.

SOLUTION: ECnet operates a B2B trading exchange and implemented AMTrix as
part of its service because AMTrix's flexible architecture supports information
collaboration across multiple platforms via multiple communications protocols
and message formats, allowing all exchange participants to interface with one
another and exchange information in real-time. ECnet uses AMTrix to support
processes in supply chain management, including planning, procurement, order
management, logistics, distribution and payment. Additionally, ECnet uses other
AMTrix features including its FTP Communications Connector, E-mail Communication
Connector, R/3 Connector for SAP and datamapper for transaction mapping between
format standards. ECnet also licensed our Connector Development Platform, which
will enable ECnet to create an interface into ERP applications and other
technologies.

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RYDER INTEGRATED LOGISTICS, INC.

Ryder Integrated Logistics, Inc., a business unit of Ryder System, Inc.,
provides logistics, supply chain and transportation management solutions
worldwide that support clients' entire supply chains, from sourcing of inbound
raw materials through distribution and delivery of finished goods. Ryder
currently serves client needs throughout North America, Latin America, Europe
and Asia.

OPPORTUNITY: Ryder Integrated Logistics, Inc. developed an e-Channels
Solutions (ECS) offering to provide e-business logistics fulfillment solutions
to the growing B2B and business-to-consumer market. ECS required robust software
that could leverage current Ryder Integrated Logistics capabilities in
warehousing and transportation management and rapidly connect to the legacy
systems maintained by traditional brick and mortar trading partners and
customers.

SOLUTION: Ryder Integrated Logistics selected our B2B integration product
and supply web synchronization components because they provided flexibility, a
comprehensive view of supply chain operations and rapid integration of Ryder
Integrated Logistics' transportation management system, multiple warehouse
management systems and the myriad of legacy systems. By purchasing our supply
web synchronization components, Ryder Integrated Logistics has cross-domain
visibility of the inventory and shipments moving through its network.

SALES AND MARKETING

We sell our products and professional services primarily through our direct
sales organization, which is complemented by indirect sales through our
strategic partners. Our sales and marketing efforts are focused on selling
e-business software comprised of our integration software products and supply
web components. We sell to new customers as well as our installed base of more
than 1,000 customers. As of September 30, 2000, we had 141 employees in sales
and marketing geographically dispersed throughout major global marketplaces. We
have U.S. sales offices in Atlanta, Chicago, Dallas and Los Angeles and
international sales offices in Australia, China, France, Germany, Hong Kong,
Malaysia, the Netherlands, Singapore, Sweden and the U.K. We also have strategic
alliances with companies in all global markets who in most cases serve as both
VARs and implementers of our products. These VARs and systems implementers
typically buy our products at a discount from our standard list price and either
resell our products to their customers or incorporate our products into their
product offerings. Occasionally, a VAR or systems implementer will refer a
customer to us. When this occurs, we generally pay a commission to the referring
entity.

Our sales process incorporates a consultative-based selling approach that
leverages our supply chain domain expertise to position our products as a
solution to our customers' business problems. We primarily target five industry
vertical markets that we believe will derive significant supply web value from
our products and professional services. These markets include third-party
logistics, technology, consumer packaged goods, e-commerce and traditional
retail and apparel. We believe our e-business consultative sales approach has
allowed us to increase our average sales price and improve our successful close
rate relative to our competitors. Our sales team is comprised of direct sales
professionals, pre-sales technical engineers and industry focused supply web
experts. Our direct sales professionals, with our industry experts, target
specific accounts and develop supply web value-based propositions for
penetration into those accounts. These value propositions are used as a vehicle
for establishing a dialogue with our customers' senior management teams. Our
pre-sales technical engineers provide technical product knowledge to assist the
customer with their technical diligence requirements. Typically, our sales teams
help customers identify short interval deployment projects that allow customers
to realize value quickly upon purchasing our products.

We focus our marketing efforts on educating potential customers, generating
new sales opportunities and creating awareness of our products and their
applications. We conduct a variety of marketing programs to educate existing and
prospective customers in our target markets, including seminars, trade shows,

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direct mail campaigns, advertising, speaking engagements, white paper articles,
press relations, interviews and industry analyst programs.

COMPETITION

As a global provider of e-business software and services that enable
integration and synchronization of web-enabled trading communities, we believe
that other providers do not offer a comprehensive product suite that combines
both B2B integration software and supply web synchronization software. As a
result, our competitors often must partner with other providers to provide a
comprehensive product suite. We are aware of a number of companies that provide
a portion of the technologies we utilize and limited portions of our integration
software. These companies generally can be grouped into three categories:
(1) EAI software vendors that provide integration middleware and software
application connectors, including Extricity Inc., Mercator Software, Inc., New
Era of Networks, Inc., TIBCO Software Inc., Vitria Technology, Inc. and
webMethods, Inc.; (2) third-party software companies that develop and license
EDI formats and communication applications, including General Electric
Information Services, Inc., Peregrine Systems Inc. and Computer Associates
International, Inc.; and (3) traditional supply chain, ERP and transportation
management system software vendors that develop client server business systems
with integration and supply web synchronization components, including Descartes
Systems Group Inc. and i2 Technologies, Inc.

Our competitors and potential competitors may enhance their technologies or
expand their market focus and compete with us directly. Our customers and
strategic alliances also may become competitors in the future. In addition,
in-house IT departments may adopt a proprietary standard that is inoperable with
our software or makes our software obsolete. Upon the occurrence of any of these
events, we may face greater competition, and our business and operating results
may be harmed.

We believe that the key competitive factors affecting the market for trading
community integration software include:

- product functionality, flexibility, quality and performance;

- ability to interact seamlessly among disparate systems, technologies and
languages;

- capability to support a large number of trading partners;

- short implementation cycles and ease of deployment;

- quality of consultative and professional services;

- customer service and support; and

- global depth of customers and strategic alliances.

We believe that our TradeSync family of products competes favorably with
respect to these factors. However, our market is evolving rapidly and industry
standards are continuing to change. We may not be able to maintain our
competitive position compared to our existing or potential competitors,
especially those that have greater financial, technical, marketing and other
resources.

RESEARCH AND DEVELOPMENT

We have development offices in Atlanta, Georgia; Dallas, Texas;
Raleigh-Durham, North Carolina; Singapore; and Stockholm, Sweden. As of
September 30, 2000, our Global Product Division consisted of 105 employees,
divided into the following groups:

PRODUCT MANAGEMENT. Our product management group defines our product
strategies and manages the introduction of products to market. The product
introduction process includes:

- program management of development activities;

- management of product testing programs;

52
<PAGE>
- sales training;

- deployment staff training; and

- transition of new product releases to customer support.

APPLICATION PRODUCT DEVELOPMENT. Our application product development group
is responsible for development of our software components for dynamic trading
community management. Our software development teams include solutions
engineers, software engineers, quality analysts and development managers
responsible for a specific component release. We employ a single team strategy
with the goal of ensuring close communication and rapid development of releases
through continuity of team members and simplicity of reporting structure.

INFRASTRUCTURE PRODUCT DEVELOPMENT. Our infrastructure product development
group is responsible for the development of our core integration technology,
Connector Development Platform and process manager products.

QUALITY ASSURANCE AND PLATFORM SUPPORT. Our quality assurance and platform
support group designs and manages processes to identify and prevent software
defects throughout the development cycle.

We spent a total of $4.5 million, $3.2 million and $3.6 million in 1999,
1998 and 1997, respectively, on research and development activities. Of this
amount, we capitalized software development costs of $422,000, $436,000 and
$485,000 in 1999, 1998 and 1997, respectively. Amortization expense of $225,000
and $196,000 was charged in 1999 and 1998, respectively, and no amortization
expense was charged in 1997.

We spent a total of $11.9 million on research and development activities
during the nine months ended September 30, 2000. Of this amount, we capitalized
software development costs of approximately $476,000. Amortization expense for
the period was $311,000.

INTELLECTUAL PROPERTY

GENERAL. We rely on a combination of copyright, trade secret, trademark and
trade dress laws, confidentiality procedures and contractual provisions to
protect our proprietary rights in our products and technology. We generally
enter into confidentiality agreements with our employees, consultants, customers
and potential customers and limit access to, and distribution of, our
proprietary information. We maintain trademarks to identify the source of our
products, development tools and service offerings and rely upon trademark laws
to protect our proprietary rights in these marks. These measures may not be
sufficient to protect our proprietary rights, and we cannot be certain that
third parties will not misappropriate our technology and use it for their own
benefit. Further, we cannot assure you that our methods of protecting our
proprietary rights in the U.S. or abroad will be adequate. The laws of some
foreign countries do not protect proprietary rights to the same extent as the
laws of the U.S. Also, most of these protections do not preclude our competitors
from independently developing products with functionality or features
substantially equivalent or superior to our software. Any failure to protect our
intellectual property may have a material adverse effect on our business.

LICENSES. Our license agreements are designed to prohibit unauthorized use,
copying, transfer and disclosure of our software technology and contain
confidentiality terms customary to the industry in order to protect our
proprietary rights in our software. The provisions protecting our software
technologies may be unenforceable under the laws of specific jurisdictions and
foreign countries. Our license agreements generally warrant that our software
will materially comply with our written documentation. We also warrant that we
own or have the right to license the software we distribute and have not
violated the intellectual property rights of others. Some customers that
licensed our AMTrix product from Frontec AB prior to our formation may be using
it without a written license agreement. We license our products in a format that
does not permit the users to change the source code. In addition, because we
treat the source

53
<PAGE>
code for our products as a trade secret, all employees and third parties who
require access to the source code are required to sign nondisclosure agreements
or are otherwise under a duty of confidentiality.

PATENTS. We have patent rights pending before numerous countries throughout
the world in accordance with the Patent Cooperation Treaty. We are seeking or
plan to seek patent protection in Australia, Belgium, France, Germany, Israel,
Japan, the Netherlands, Sweden, the U.K. and the U.S. generally relating to
technology that defines systems, methods and articles for organizing automated
electronic interchange. This technology involves the definition of data
structures to be sent and received and organizes function blocks to control
processing of data. There is no guarantee that our pending applications will
result in issued patents or, if issued, will provide us with a competitive
advantage.

TRADEMARKS. We have trademark registrations on the AMTrix mark in Belgium,
Denmark, Finland, France, Germany, Italy, Norway, Portugal, Sweden, Switzerland,
the U.K. and the U.S.

We also have trademark registrations on the Viewlocity mark pending in
Australia, China, Japan, New Zealand, Singapore and the U.S. We have filed
applications for the SmartSync and TradeSync marks in the U.S. In addition, we
have a trademark registration on an Intel Messaging mark in Sweden. We cannot be
certain that the trademark applications for these marks will be issued. As a
result, we cannot assure you that our efforts to use and register these
trademarks will ultimately be successful or that our use will not result in
liability for trademark infringement, trademark dilution or unfair competition.
We are active in policing our marks, and have filed an opposition in Europe
against an applicant for the ACTRIX mark based on its similarity to our AMTrix
mark.

We also claim common law protections for the other marks we use in our
business. Competitors of ours and others may adopt marks similar to ours or try
to prevent us from using our marks, which may impede our ability to build brand
identity and possibly leading to customer confusion.

COPYRIGHTS. We do not currently have any of our software registered with the
U.S. Copyright Office or any other foreign copyright office. We rely primarily
on the U.S. Copyright Act and the laws of other countries to protect our
software.

THIRD-PARTY INTELLECTUAL PROPERTY. We license from third parties certain
technologies that are incorporated into our products. If we lose access to these
technologies, we may experience delays in developing and introducing new
products and enhancements to our existing products while attempting to develop
or access suitable replacement technology, which we may never be able to develop
or access.

FACILITIES

Our headquarters are located in Atlanta, Georgia. We currently lease
approximately 24,000 square feet of office space at our Atlanta headquarters.
The lease expires in October 2009. We also lease an additional 12,000 square
feet of office space in Atlanta, Georgia and 18,000 square feet of office space
in Dallas, Texas; these leases expire in September 2004 and November 2009,
respectively. We also occupy office suites in Raleigh-Durham, North Carolina on
a short-term basis.

In addition to our U.S. offices, we have offices in North Sydney and
Melbourne, Australia; Beijing and Shanghai, China; Paris and Grenoble, France;
Munich and Bremen, Germany; Hong Kong; Kuala Lumpur; Malaysia; Amsterdam, the
Netherlands; Solna and Gothenburg, Sweden; Singapore; and Bristol and London,
U.K. Each of these offices occupies from approximately 1,000 to 26,000 square
feet with lease terminations ranging from 2000 to 2003.

EMPLOYEES

As of September 30, 2000, we had a total of 453 employees, including 105 in
research and development, 141 in sales and marketing, 145 in professional
services and product support and 62 in finance and administration. None of our
employees is represented by a collective bargaining agreement, nor have we
experienced any work stoppages. We consider our relations with our employees to
be good.

LEGAL PROCEEDINGS

We are not a party to any material legal proceeding.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

Our executive officers, directors and key employees, the positions held by
them and their ages as of October 31, 2000, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- -------- -----------
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS
Gregory Cronin....................... 53 Chairman of the Board, President and Chief Executive
Officer
Maurice A. Trebuchon................. 36 Executive Vice President and Chief Operating Officer
Stan F. Stoudenmire.................. 48 Senior Vice President and Chief Financial Officer
Jeffrey B. Cashman................... 37 Senior Vice President of Global Business Development
and International Field Operations
Paul R. Leiske....................... 53 Senior Vice President of Global Customer Service
Leo Apotheker........................ 47 Director
Olof Englund......................... 44 Director
Mark E. Hastings..................... 32 Director
William M. Stuek..................... 58 Director
Scott R. Tobin....................... 30 Director

KEY EMPLOYEES
Michael Handley...................... 32 Senior Vice President and Chief Technology Officer
Michael Medin........................ 47 Senior Vice President of Global Product Development for
e-Business Infrastructure
Michael S. Shinya.................... 43 President of EMEA Operations
Robert de Souza...................... 41 Senior Vice President and Chief Knowledge Officer
Christer Wahlander................... 48 Senior Vice President and Chief Science Officer
</TABLE>

EXECUTIVE OFFICERS AND DIRECTORS

GREGORY CRONIN has served as our President and Chief Executive Officer and
as a director since March 1999. Mr. Cronin has served as our Chairman of the
Board since March 2000. From December 1997 to February 1999, Mr. Cronin served
as executive vice president of Manhattan Associates, Inc., a provider of supply
chain execution systems. From 1988 to November 1997, Mr. Cronin was employed by
McHugh Software International, a provider of logistics execution systems, last
serving as president and chief operating officer. From 1986 to 1988, he served
as director of consulting services for IMI Systems, Inc., a software provider of
warehouse management system software.

MAURICE A. TREBUCHON has served as our Executive Vice President and Chief
Operating Officer since November 1999. From 1988 to November 1999,
Mr. Trebuchon served in various positions with PricewaterhouseCoopers LLP, a
national accounting firm, most recently serving as a partner in the firm's
supply chain practice.

STAN F. STOUDENMIRE has served as our Senior Vice President and Chief
Financial Officer since May 1999. From May 1998 to April 1999, Mr. Stoudenmire
was a financial consultant in the software and services industry. From
July 1997 to May 1998, Mr. Stoudenmire served as chief financial officer and
vice president of finance and administration of Ross Systems, Inc., a supplier
of enterprise resource planning systems and services. From 1987 to July 1997,
Mr. Stoudenmire served in various positions with Mynd Corporation (formerly
Policy Management Systems Corporation), a provider of applications software for
the insurance industry, most recently serving as vice president and worldwide
corporate controller.

JEFFREY B. CASHMAN has served as our Senior Vice President of Global
Business Development and International Field Operations since August 2000 and
served as our Senior Vice President of Global

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Marketing and Business Development from April 1999 until August 2000. From
September 1997 to March 1999, Mr. Cashman served as senior vice president of
marketing and business development of McHugh Software International. From 1995
to September 1997, Mr. Cashman served as an associate partner with Andersen
Consulting, a national business consulting firm, in the firm's global supply
chain strategy practice.

PAUL R. LEISKE has served as our Senior Vice President of Global Customer
Service since April 1999. From March 1998 to April 1999, Mr. Leiske served as
vice president of customer service of Manhattan Associates, Inc. From 1993 to
February 1998, Mr. Leiske served as vice president of implementation services of
McHugh Software International.

LEO APOTHEKER has served in various executive positions with SAP AG, an
international enterprise software company, since July 1995, most recently
serving as president of the Europe/Middle East/Africa region of SAP.
Mr. Apotheker is a member of SAP's Global Operational Management Team and
Extended Executive Board. From 1994 to July 1995, he served as a managing
partner at ABP Partners, a strategic management consulting firm specializing in
global strategy definition and implementation for software companies.
Previously, he was founder, president and chief operating officer of Ecsoft
B.V., a software company based in Europe. He has been a director of Viewlocity
since September 1999.

OLOF ENGLUND has been an executive director of Frontec AB, an information
technology services company that is publicly traded on the OM Stock Exchange
(formerly the Stockholm Stock Exchange), since July 2000. From February 1999 to
June 2000, Mr. Englund was chief executive officer and president of Frontec AB.
Mr. Englund was a co-founder of Frontec AB in 1986. From August 1993 to January
1999, Mr. Englund was executive vice president, corporate affairs of Frontec AB.
Prior to that time, Mr. Englund was chief financial officer of Frontec AB.
Mr. Englund is a director of Trio AB, a Swedish company focusing on
computer-telephony integration software products. He has been a director of
Viewlocity since February 1999.

MARK E. HASTINGS has been a general partner at BCI Partners, a venture
capital firm, since August 1997. From April 1994 to August 1997, Mr. Hastings
was an associate at Edison Venture Fund, a venture capital fund. Mr. Hastings
has been a director of Viewlocity since December 1999.

WILLIAM M. STUEK has been a senior advisor to both Chase Capital Partners
and The Beacon Group III-Focus Value Fund, L.P. since July 2000. From September
1999 to July 2000, Mr. Stuek was a limited partner with The Beacon Group, a
merchant banking firm. From January 1998 to September 1999, Mr. Stuek was
chairman and chief executive officer of System Software Associates, Inc., a
provider of ERP software for industrial and manufacturing companies. From 1966
to December 1997, Mr. Stuek was an executive at IBM. Mr. Stuek has been a
director of Viewlocity since April 2000.

SCOTT R. TOBIN has been a general partner at Battery Ventures, a venture
capital firm, since May 2000. Mr. Tobin served in various positions with Battery
Ventures from August 1997 to May 2000, most recently serving as a principal.
From December 1996 to August 1997, Mr. Tobin was an associate in the technology
group of First Albany Corporation's corporate finance department. Prior to that
time, Mr. Tobin was the director of corporate development at Future Vision, a
software company. He has been a director of Viewlocity since February 1999.

KEY EMPLOYEES

MICHAEL HANDLEY has served as our Chief Technology Officer since August 2000
and served as our Senior Vice President of e-Business Application Development
from February 2000 until August 2000. Mr. Handley was chairman and chief
executive officer of Nexstep, Inc., a software development enterprise that
focuses on visibility fulfillment software for Internet retail organizations,
from January 1999 until our acquisition of Nexstep in February 2000. From
September 1998 to February 1999, Mr. Handley was a senior manager of EXE
Technologies, Inc., a provider of supply chain execution software. From

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<PAGE>
March 1998 to September 1998, Mr. Handley was a practice manager of Oracle
Corporation, a systems software and business applications software provider.
From 1993 to February 1998, Mr. Handley was vice president of development of
Metasys, Inc., a transportation management software provider.

MICHAEL MEDIN has served as our Senior Vice President of Global Product
Development for e-Business Infrastructure since October 1999. From January 1997
to September 1999, Mr. Medin was a vice president of EAI professional services
with subsidiaries of Frontec AB. From 1993 to December 1996, Mr. Medin served as
a regional and product manager with a subsidiary of Frontec AB. From 1978 to
1992, Mr. Medin served in various product development positions with Ericsson
and with Siemens, both multinational telecommunications companies.

MICHAEL S. SHINYA has served as our President of EMEA Operations since
September 2000. From September 1999 to August 2000, Mr. Shinya served as
executive vice president of the Baan Company, a software company specializing in
ERP software solutions. From April 1996 to September 1999, Mr. Shinya served as
vice president and U.K. sales director for Oracle Corporation. From 1983 to
1996, Mr. Shinya served in senior positions with SAS Institute Inc., a provider
of e-intelligence software and services, and with IBM.

ROBERT DE SOUZA has served as our Senior Vice President and Chief Knowledge
Officer since August 2000. From March 1991 to May 2000, Dr. de Souza was a
professor and served in various positions at Nanyang Technological University in
Singapore, including Director of the Masters program in Logistics, Deputy
Director of the Design Research Centre, Co-Chair and Director of Intelligent
Manufacturing Systems and Director of the Centre of Engineering and Technology
Management. Dr. de Souza co-founded SC21 Pte, Ltd., a Singapore-based supply
chain software firm, in November 1998 and served in various positions, most
recently as Director, Vice Chairman and Chief Executive Officer. We acquired
SC21 Pte, Ltd. in July 2000. Prior to 1991, Dr. de Souza served in various
positions at Loughborough University of Technology in the United Kingdom,
including senior researcher and consultant.

CHRISTER WAHLANDER has served as our Chief Science Officer since August 2000
and served as our Chief Technology Officer from April 1999 to August 2000. From
1981 to April 1999, Mr. Wahlander led the research and development of the AMTrix
and Process Manager technologies for Frontec AMT AB. At Frontec AMT AB,
Mr. Wahlander held several executive positions, including chief technology
officer from June 1997 to March 1999, senior vice president of development from
February 1996 to June 1997, and chief executive officer from 1987 to September
1996. During his tenure at Frontec AMT AB, he also served as president of a
joint venture with Unisys Corporation, a provider of e-business software.

Some of our directors were elected as directors pursuant to agreements that
will terminate upon completion of this offering. We do not intend to enter into
new agreements with respect to the election of directors.

The holders of common stock, of which Frontec AB currently owns a majority,
have the right under these agreements to nominate two directors, of which one
position is currently filled by Olof Englund, an affiliate of Frontec AB, and
the other position is vacant.

The holders of the Series A convertible preferred stock have the right under
our certificate of incorporation to elect two directors, of which one position
is currently filled by Scott R. Tobin, an affiliate of Battery Ventures IV, L.P.
and Battery Investment Partners IV, LLC, and the other position is currently
filled by William B. Stuek, an independent director not affiliated with holders
of the Series A convertible preferred stock. Mr. Stuek is affiliated with The
Beacon Group III-Focus Value Fund, L.P.

The holders of the Series D convertible preferred stock have the right under
our certificate of incorporation to elect one director, which position is
currently filled by Mark E. Hastings, an affiliate of BCI Growth V, L.P. and BCI
Investors, LLC.

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<PAGE>
TERMS OF DIRECTORS AND EXECUTIVE OFFICERS

Upon the completion of this offering, our board of directors will be divided
into three classes, each serving for staggered three-year terms. At each annual
meeting of stockholders, a class of directors will be elected for a three-year
term to succeed the directors of the same class whose terms are then expiring.
Messrs. Englund and Tobin will be in the class of directors whose term expires
at the 2001 annual meeting of stockholders. Messrs. Apotheker and Hastings will
be in the class of directors whose term expires at the 2002 annual meeting of
stockholders. Messrs. Cronin and Stuek will be in the class of directors whose
term expires at the 2003 annual meeting of stockholders. Our bylaws provide that
each class of directors will be elected by a plurality of all votes cast at the
meeting and that the authorized number of directors may be changed only by
resolution of the board of directors.

Executive officers are appointed by the board of directors and serve until
their successors have been elected and qualified or until their earlier
resignation or removal. There are no family relationships among any of our
directors or executive officers.

BOARD COMMITTEES

Our audit committee consists of Mr. Hastings, chairman, and
Messrs. Apotheker and Stuek. The audit committee reviews the results and scope
of the audits and other services provided by our independent auditors. In
addition, the audit committee reviews and evaluates our internal audit and
control functions and makes recommendations to our board of directors regarding
the selection of independent auditors.

Our compensation committee consists of Mr. Tobin, chairman, and
Messrs. Hastings and Englund. The compensation committee reviews the
compensation and benefits of all our officers, reviews general policies relating
to compensation and benefits of our employees and makes recommendations
concerning these matters to our board of directors. The compensation committee
also administers our stock incentive plan and employee stock purchase plan.
Prior to January 24, 2000, we did not have a compensation committee. As a
result, our board of directors performed the duties of the compensation
committee during 1999. The compensation of each of the executive officers for
fiscal 1999 was determined through arms-length negotiations between us and each
of the executive officers prior to the date they joined our company.

Our executive committee consists of Messrs. Cronin, Hastings and Tobin. The
executive committee has the authority to act on behalf of our board of directors
in the management and direction of our business and affairs, to the extent
authorized by resolution of a majority of the board of directors and subject to
any limitations imposed by Delaware law.

DIRECTOR COMPENSATION

Other than Mr. Apotheker, who receives $2,000 per meeting which he attends
in person, directors do not currently receive compensation for services
performed in their capacity as directors. We reimburse each director for
reasonable expenses incurred in attending board and committee meetings. In
addition, non-employee directors who are not associated with venture capital
firms with an ownership interest in our company are eligible to receive options
to purchase our common stock under our stock incentive plan. The board of
directors determines the vesting schedule and exercise price for options granted
to non-employee directors. In 1999, we granted to Mr. Apotheker options to
purchase 85,000 shares of common stock at an exercise price of $2.00 per share.
The options vest over four years.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of our executive officers serves as a member of the board of directors
or compensation committee of any entity that has one or more executive officers
serving as a member of our board of directors or compensation committee. Mr.
Cronin's compensation for fiscal 1999 was approved by the board of directors
prior to the date he became a director. Mr. Cronin became an executive officer
and a

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<PAGE>
director in March 1999. He participated as a director in the deliberations of
our board of directors concerning executive officer compensation during 1999.
Mr. Cronin was a member of the compensation committee from January 24, 2000, to
April 14, 2000. The compensation committee did not consider or act upon
Mr. Cronin's compensation during this period.

EXECUTIVE COMPENSATION

The following table sets forth the total compensation we paid during the
year ended December 31, 1999, to our Chief Executive Officer and our next three
most highly compensated executive officers whose salary and bonus for 1999
exceeded $100,000. These executive officers are referred to as the Named
Executive Officers elsewhere in this prospectus.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL
COMPENSATION(1)
------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
--------------------------- -------- -------- -------- ------------
<S> <C> <C> <C> <C>
Gregory Cronin...................................... 1999 $161,958 $75,000 $ --
Chairman of the Board,
President and Chief
Executive Officer
Stan F. Stoudenmire................................. 1999 102,295 35,000 --
Senior Vice President and
Chief Financial Officer
Jeffrey B. Cashman.................................. 1999 147,091 30,000 125,991(2)
Senior Vice President of
Global Marketing and
Business Development
Paul R. Leiske...................................... 1999 125,070 -- --
Senior Vice President of
Global Customer Service
</TABLE>

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

(1) For a description of compensation arrangements, see "--Employment
Agreements, Severance and Change of Control Arrangements."

(2) Consists of relocation expenses in connection with Mr. Cashman's employment
with Viewlocity.

We did not grant any shares of restricted stock, stock options or stock
appreciation rights as compensation to any of the Named Executive Officers
during 1999. We sold shares of restricted stock to our Named Executive Officers
during 1999 for a price per share determined at the time of the purchase to be
the fair market value of the restricted stock. Accordingly, the issuance and
sale of the restricted stock is not deemed to be compensation.

OPTION GRANTS IN LAST FISCAL YEAR

In the year ended December 31, 1999, we did not grant any options to
purchase shares of our common stock to any Named Executive Officer. In the year
ended December 31, 1999, we granted options to purchase up to an aggregate of
2,333,875 shares to employees and directors. These options were granted with an
exercise price equal to the fair market value of our common stock on the date of
grant as determined by our board of directors based on recent sales of our
convertible preferred stock for cash to third-party investors. All of the
options are non-qualified stock options. Typically, our options vest over
four years, with 25% of the shares vesting six months after the grant date and
the remaining shares vesting ratably each month thereafter. Our option grants
typically have a term of ten years. Options granted to our

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<PAGE>

employees in Sweden are generally exercisable immediately upon grant and expire
four years from the date of grant.

STOCK OPTION AND OTHER COMPENSATION PLANS

STOCK INCENTIVE PLANS

In June 1999, we established the Viewlocity, Inc. Stock Incentive Plan and
in September 2000, we established the Viewlocity, Inc. 2000 Stock Incentive
Plan. The plans are intended to promote our interests by providing employees and
key persons the opportunity to purchase shares of common stock and to receive
compensation based upon appreciation in the value of those shares. We have
reserved 6,356,755 shares of common stock for issuance under the Viewlocity,
Inc. Stock Incentive Plan and have reserved 2,000,000 shares of common stock for
issuance under the Viewlocity, Inc. 2000 Stock Incentive Plan. These plans
provide for the grant of four types of awards:

- incentive stock options that qualify for tax benefits;

- non-qualified stock options;

- restricted stock awards; and

- stock appreciation rights.

The compensation committee of our board of directors administers both plans.
The compensation committee has the authority to determine to whom awards are
granted, the terms of such awards, including the type of awards to be granted,
the exercise price, the number of shares subject to awards and the vesting and
exercisability of the awards. The terms of a stock option award granted under
the plans generally may not exceed 10 years.

As of September 30, 2000, we had outstanding options to purchase 3,961,660
shares of our common stock at a weighted average exercise price of $5.34 per
share. As of September 30, 2000, we had issued 191,595 shares of common stock
upon exercise of options granted under the Viewlocity, Inc. Stock Incentive
Plan.

EMPLOYEE STOCK PURCHASE PLAN

In August 2000, our board of directors approved an employee stock purchase
plan, and in September 2000, our stockholders approved the plan. The stock
purchase plan is intended to qualify under Section 423 of the Internal Revenue
Code. The stock purchase plan will be effective upon completion of this offering
and will allow employees to purchase common stock through payroll deductions.
Participation in the stock purchase plan is voluntary. Employees may become
participants in the stock purchase plan by authorizing payroll deductions up to
a certain percentage of their base pay. At the end of each purchase period, each
participant in the stock purchase plan will receive an amount of our common
stock equal to the sum of that participant's payroll deductions during the
period divided by 85% of the fair market value of our common stock at the
beginning of the period. No employee may participate in the stock purchase plan
if the employee owns or would own 5% or more of the voting power of our common
stock.

There are currently 2,500,000 shares of common stock reserved for issuance
under the stock purchase plan. No shares will be sold by us to participants in
the stock purchase plan until after the completion of this offering.

401(K) PLAN

We maintain a 401(k) plan qualified under Section 401(k) of the Internal
Revenue Code. Under the 401(k) plan, a participant may contribute a maximum of
17% of his or her pre-tax salary, commissions and bonuses through payroll
deductions, up to the statutorily prescribed annual limit of $10,500 in calendar
year 2000. The percentage elected by more highly compensated participants may be
required to be lower. In addition, at the discretion of the board of directors,
we may make discretionary profit-sharing

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contributions into the 401(k) plan for all eligible employees. During the year
ended December 31, 1999, we made no discretionary contributions.

EMPLOYMENT AGREEMENTS, SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS

Generally, we do not enter into employment agreements with our non-executive
employees. The employment relationship with each employee is "at will." However,
we generally require each employee to enter into an agreement prohibiting the
employee from disclosing or using any of our confidential or proprietary
information without our permission and providing that the employee agrees to
assign to us all inventions developed during the course of employment. In
addition, the employee agrees not to solicit any of our customers or employees
or, in some cases, to work for a competitor for a period of time after
termination of his or her employment.

In March 1999, we entered into an agreement with Gregory Cronin concerning
the terms of his employment as Chief Executive Officer. The agreement provides
for an annual salary of $200,000 and a bonus of up to $150,000. The bonus for
the first 12 months will be at least $75,000, will be paid in two installments
and will be based on performance objectives as determined by the board of
directors. If Mr. Cronin's employment is terminated without cause and if
Mr. Cronin executes a release, he is entitled to nine months severance pay. The
agreement contains provisions restricting Mr. Cronin from soliciting our
employees for a period of one year following any termination of his employment.
In connection with his employment, Mr. Cronin purchased 1,384,210 shares of
restricted stock at $2.00 per share that are subject to a time-based vesting
schedule over four years, provided that vesting may be partially accelerated if
Mr. Cronin's employment is terminated without cause or upon a change in control
of the company.

In March 1999, we entered into an agreement with Jeffrey B. Cashman
concerning the terms of his employment as Senior Vice President of Global
Marketing and Business Development. The agreement provides for an annual salary
of $200,000, a signing bonus of $25,000 and a bonus of up to $100,000. The bonus
for the first 12 months will be paid in two installments and will be based on
performance objectives as determined by the Chief Executive Officer and the
board of directors. If Mr. Cashman's employment is terminated without cause and
if Mr. Cashman executes a release, he is entitled to six months severance pay.
The agreement contains provisions restricting Mr. Cashman from soliciting our
employees for a period of one year following any termination of his employment.
In connection with his employment, Mr. Cashman purchased 415,262 shares of
restricted stock at $2.00 per share that are subject to a time-based vesting
schedule over four years, provided that vesting may be partially accelerated if
Mr. Cashman's employment is terminated without cause or upon a change in control
of the company.

In March 1999, we entered into an agreement with Paul R. Leiske concerning
the terms of his employment as Senior Vice President of Global Customer Service.
The agreement provides for an annual salary of $185,000 and a bonus of up to
$82,500. The bonus for the first 12 months will be based on performance
objectives as determined by the Chief Executive Officer and the board of
directors. If Mr. Leiske's employment is terminated without cause and if
Mr. Leiske executes a release, he is entitled to six months severance pay. The
agreement contains provisions restricting Mr. Leiske from soliciting our
employees for a period of one year following any termination of his employment.
In connection with his employment, Mr. Leiske purchased 205,593 shares of
restricted stock at $2.00 per share that are subject to a time-based vesting
schedule over four years, provided that vesting may be partially accelerated if
Mr. Leiske's employment is terminated without cause or upon a change in control
of the company.

In May 1999, we entered into an agreement with Stan F. Stoudenmire
concerning the terms of his employment as Senior Vice President and Chief
Financial Officer. The agreement provides for an annual salary of $150,000 and a
bonus of up to $35,000. The bonus will be based on performance objectives as
determined by the Chief Executive Officer and the board of directors. If
Mr. Stoudenmire's employment is terminated without cause and if Mr. Stoudenmire
executes a release, he is entitled to six months severance pay. The agreement
contains provisions restricting Mr. Stoudenmire from soliciting our employees
for a period of one year following any termination of his employment. In
connection with his employment,

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<PAGE>
Mr. Stoudenmire purchased 137,062 shares of restricted stock at $2.00 per share
that are subject to a time-based vesting schedule over four years, provided that
vesting may be partially accelerated if Mr. Stoudenmire's employment is
terminated without cause or upon a change in control of the company.

In October 1999, we entered into an agreement with Maurice A. Trebuchon
concerning the terms of his employment as Executive Vice President and Chief
Operating Officer. The agreement provides for an annual salary of $250,000, a
signing bonus of $50,000 and a bonus of up to $250,000 annually. The bonus will
be paid every six months and will be based on performance objectives as
determined by the Chief Executive Officer and Mr. Trebuchon. If Mr. Trebuchon's
employment is terminated without cause and if Mr. Trebuchon executes a release,
he is entitled to nine months severance pay. In connection with his employment,
Mr. Trebuchon purchased 446,250 shares of restricted stock at $2.00 per share
that are subject to a time-based vesting schedule over four years, provided that
vesting may be partially accelerated if Mr. Trebuchon's employment is terminated
without cause or upon a change in control of the company.

LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

Our amended and restated certificate of incorporation and bylaws provide
that the liability of directors for monetary damages shall be eliminated to the
fullest extent permissible under Delaware law and that we shall indemnify our
officers, employees and agents to the fullest extent permitted under Delaware
law.

Our amended and restated certificate of incorporation also provides that our
directors will not be personally liable to us or our stockholders for monetary
damages for breach of fiduciary duty as a director, except for:

- any breach of the director's duty of loyalty to us or our stockholders;

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

- unlawful payments of dividends or unlawful stock repurchases or
redemptions; or

- transactions from which the director derived an improper personal benefit.

Any amendment, modification or repeal of these provisions will not eliminate
or reduce the effect of these provisions for any act or failure to act, or any
cause of action, suit or claim that would accrue or arise before any amendment,
modification or repeal of these provisions. If Delaware law is amended to
provide for further limitations on the personal liability of directors of
corporations for breach of duty of care or other duty as a director, then the
personal liability of the directors will be so further limited to the greatest
extent permitted by Delaware law. This limitation of liability does not affect a
director's responsibilities under any other law, such as the federal securities
laws or state or federal environmental laws.

We intend to enter into agreements to indemnify our executive officers and
directors in addition to indemnification provided for in our amended and
restated certificate of incorporation. These agreements, among other things, may
require us to indemnify these individuals against liabilities that arise by
reason of their status or services as officers and directors, other than
liabilities arising from willful misconduct, and to advance expenses incurred as
a result of any proceedings against them for which they could be indemnified.

The Company intends to purchase a directors and officers liability insurance
policy with appropriate coverages prior to the completion of this offering.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors pursuant to the provisions of our charter
documents, Delaware law or the agreements described above, we have been advised
that in the opinion of the SEC, this indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.

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<PAGE>
RELATED PARTY TRANSACTIONS

RESTRUCTURING

Prior to our formation, the AMTrix software business was conducted by
Frontec AB and its wholly owned subsidiaries. Effective January 1, 1999, Frontec
AB consolidated the AMTrix business in certain of its subsidiaries through a
series of asset and stock contribution agreements. In connection with the
consolidation of the AMTrix business into regional subsidiaries, Frontec AB also
acquired a wholly owned subsidiary currently known as Viewlocity Integra AB.
Pursuant to a stock contribution agreement dated February 21, 1999, as amended,
Frontec AB capitalized Viewlocity Integra by contributing all of the capital
stock of each of the regional subsidiaries to Viewlocity Integra.

On February 22, 1999, Frontec AB formed Viewlocity, Inc., as a Delaware
corporation and on February 23, 1999, contributed to us all of the issued and
outstanding shares of Viewlocity Integra in exchange for 17,031,029 shares of
our common stock. As a result, Viewlocity Integra and the regional operating
subsidiaries became wholly owned subsidiaries of Viewlocity. In addition to the
acquisition of the Frontec AB subsidiaries, we also agreed to assume all of the
Frontec AB liabilities relating to the AMTrix business.

The holders of common stock, of which Frontec AB currently owns a majority,
were allocated two seats on our board of directors, of which one seat is
currently filled by Olof Englund and the other seat is vacant. This right to
representatives on our board expires upon completion of this offering.

SERIES A CONVERTIBLE PREFERRED STOCK AND SERIES B CONVERTIBLE PREFERRED STOCK
PURCHASE WARRANTS

In February 1999, we sold an aggregate of 10,000,000 shares of our Series A
convertible preferred stock at a price of $1.00 per share and warrants to
purchase an aggregate of 7,005,495 shares of Series B convertible preferred
stock at an exercise price of $1.82 per share. The purchasers of our Series A
convertible preferred stock and the warrants to purchase our Series B
convertible preferred stock were Battery Ventures IV, L.P., and Battery
Investment Partners IV, LLC. The holders of the Series A convertible preferred
stock were allocated two seats on our board of directors, of which one seat is
currently filled by Scott R. Tobin and the other seat is currently filled by
William M. Stuek, an independent director not affiliated with holders of the
Series A convertible preferred stock. Mr. Stuek is affiliated with The Beacon
Group III-Focus Value Fund, L.P. The right to representatives on our board
expires upon completion of this offering. Based upon an assumed offering price
of $13.00 per share in this offering, the shares of common stock to be issued
upon conversion of the Series A convertible preferred stock would have an
estimated value of $65.0 million.

The holders of the warrants to purchase our Series B convertible preferred
stock have irrevocably agreed to exercise the warrants on a cashless basis.
Pursuant to the warrant agreements, the holders of the warrants will receive a
number of shares of Series B convertible preferred stock equal to 7,005,495
multiplied by the difference between (a) the fair market value of a share of
Series B convertible preferred stock and (b) $1.82, divided by the fair market
value of a share of Series B convertible preferred stock. The fair market value
of a share of Series B convertible preferred stock is defined as the initial
public offering price per share of common stock in this offering multiplied by
the number of shares or fraction of a share of common stock issuable upon
conversion of the Series B convertible preferred stock. Each share of Series B
convertible preferred stock is currently convertible into one-half of a share of
common stock. The shares of Series A and Series B convertible preferred stock
will automatically convert into an assumed aggregate of 7,521,978 shares of
common stock upon completion of this offering. Based upon an assumed offering
price of $13.00 per share in the offering and the cashless exercise of the
warrants to purchase shares of Series B convertible preferred stock, the shares
of common stock to be issued upon conversion of the Series B convertible
preferred stock would have an estimated value of $32.8 million.

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<PAGE>
SERIES C CONVERTIBLE PREFERRED STOCK

In connection with the Series A and Series B convertible preferred stock
transactions, we issued 2,000 shares of our Series C convertible preferred stock
to Frontec AB in exchange for the cancellation of certain liabilities owed to
Frontec AB in the approximate amount of $15.4 million. These liabilities
consisted of intercompany payables owed to Frontec AB by our subsidiaries in
connection with the business of the AMTrix product line for periods prior to our
formation. The shares of Series C convertible preferred stock will automatically
convert into an assumed aggregate of 1,576,923 shares of our common stock upon
completion of this offering, pursuant to a formula in which the number of shares
of common stock into which the Series C convertible preferred stock converts is
determined by dividing $20.5 million by the initial public offering price. Based
upon an assumed offering price of $13.00 per share in the offering, the shares
of common stock to be issued upon conversion of the Series C convertible
preferred stock would have an estimated value of $20.5 million.

SERIES D CONVERTIBLE PREFERRED STOCK

On December 30, 1999, we sold an aggregate of 9,801,020 our shares of
Series D convertible preferred stock at a price of $2.94 per share. On
March 29, 2000, we sold an additional 662,653 shares of our Series D convertible
preferred Stock at $2.94 per share to certain of our officers and employees. The
holders of the Series D convertible preferred stock were allocated one seat on
our board of directors, which is currently being filled by Mark E. Hastings.
This right to a representative on our board expires upon completion of this
offering. The shares of Series D convertible preferred stock will automatically
convert into 5,231,835 shares of common stock upon completion of this offering.
Based upon an assumed offering price of $13.00 per share in this offering, the
shares of common stock to be issued upon conversion of the Series D convertible
preferred stock would have an estimated value of $68.0 million.

SERIES E CONVERTIBLE PREFERRED STOCK

On April 18, 2000 and June 22, 2000, we sold 2,520,261 shares and 1,487,805
shares of our Series E convertible preferred stock, respectively, at a price of
$6.17 per share. The shares of Series E convertible preferred stock will
automatically convert into an aggregate of 2,004,031 shares of common stock upon
completion of this offering.

In connection with the convertible preferred stock financings described
above, the following directors, executive officers and 5% stockholders purchased
shares of preferred stock:
<TABLE>
<CAPTION>
NO. OF NO. OF NO. OF NO. OF NO. OF
SHARES OF SERIES B SHARES OF SHARES OF SHARES OF
SERIES A PREFERRED SERIES C SERIES D SERIES E TOTAL AGGREGATE
PURCHASER PREFERRED WARRANTS PREFERRED PREFERRED PREFERRED SHARES CONSIDERATION
--------- ---------- --------- --------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Funds Affiliated with Battery
Ventures IV, L.P............. 10,000,000 7,005,495 -- 340,136 194,489 17,540,120 $12,200,000
Frontec AB..................... -- -- 2,000 -- -- 2,000 $15,363,000
Funds Affiliated with BCI
Growth V, L.P................ -- -- -- 3,401,361 194,490 3,595,851 $11,200,000
Gregory Cronin................. -- -- -- 102,041 -- 102,041 $ 300,000
Maurice A. Trebuchon........... -- -- -- 68,027 -- 68,027 $ 200,000
Stan F. Stoudenmire............ -- -- -- 23,810 -- 23,810 $ 70,000
Paul R. Leiske................. -- -- -- 58,163 -- 58,163 $ 171,000
Jeffrey B. Cashman............. -- -- -- 144,558 -- 144,558 $ 425,000

AGGREGATE
ESTIMATED
PURCHASER CURRENT VALUE (1)
--------- -----------------
<S> <C>
Funds Affiliated with Battery
Ventures IV, L.P............. $101,260,770(2)
Frontec AB..................... 20,500,000
Funds Affiliated with BCI
Growth V, L.P................ 23,373,025
Gregory Cronin................. 663,260
Maurice A. Trebuchon........... 442,169
Stan F. Stoudenmire............ 154,765
Paul R. Leiske................. 378,053
Jeffrey B. Cashman............. 939,627
</TABLE>

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

(1) The aggregate estimated current value is based upon an assumed price per
share of $13.00 in this offering multiplied by the number of shares of
common stock issuable upon conversion of the preferred stock.

(2) Includes the assumed issuance of Series B convertible preferred stock upon
the cashless exercise of the warrants to purchase shares of Series B
convertible preferred stock. This number is based upon an assumed offering
price of $13.00 per share in this offering.

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<PAGE>
In connection with the above transactions, we also entered into an agreement
with the investors in our Series A, B, D and E convertible preferred stock
providing for registration rights with respect to the shares of common stock
issuable upon conversion of the preferred stock. See "Description of Capital
Stock--Registration Rights."

OPTIONS FOR FRONTEC AB EXECUTIVES

In February 1999, we issued to certain executive officers and directors of
Frontec AB options to purchase a total of 250,000 shares of our common stock, at
an exercise price of $2.00 per share. We granted to each of Olof Englund, Bengt
Wallentin, Christer Wahlander, Goran Tuvsedt and Sune Fogelstrom an option to
purchase 50,000 shares of common stock. Christer Wahlander was an employee of
Viewlocity at the time of the grant. These option holders exercised all of their
options on or before April 4, 2000.

STOCK PURCHASE AND ESCROW AGREEMENT

On March 12, 1999, we entered into a stock purchase and escrow agreement
with Frontec AB, pursuant to which Frontec AB transferred to escrow 5,356,755
shares of our common stock then owned by Frontec AB. These escrowed shares were
made available for grants of stock options, restricted stock or other grants to
our employees, directors, consultants and other key persons provided that we
purchase from Frontec AB these shares for $.02 per share. As of December 31,
1999, 3,084,066 shares of restricted stock had been sold to certain of our
officers and employees out of the escrowed shares in exchange for promissory
notes, and we had paid Frontec AB $61,681 for the shares. On January 1, 2000, we
purchased the remaining 2,272,689 shares of common stock from Frontec AB for
$45,454 and terminated the escrow agreement.

RESTRICTED STOCK ISSUED TO EXECUTIVE OFFICERS

Effective September 2, 1999, certain of our executive officers purchased
escrowed shares of common stock pursuant to our stock incentive plan and
individualized restricted stock agreements at $2.00 per share. The executive
officers who acquired the shares were Gregory Cronin (1,384,210 shares), Stan F.
Stoudenmire (137,062 shares), Jeffrey B. Cashman (415,262 shares) and Paul R.
Leiske (205,593 shares). Effective November 15, 1999, Maurice A. Trebuchon
purchased 446,250 escrowed shares of common stock pursuant to our stock
incentive plan and an individual restricted stock agreement at $2.00 per share.
Each executive delivered to us a full recourse promissory note bearing a market
rate of interest for the aggregate purchase price of the stock and entered into
a restricted stock agreement that prohibits transfer of the shares prior to
vesting and provides for forfeiture of any unvested shares upon termination of
employment. The shares purchased generally vest over a four-year period
immediately following the executive's date of employment. Each purchasing
executive filed with the Internal Revenue Service an election to be taxed under
Section 83(b) of the Internal Revenue Code.

In addition, stock option grants to directors and executive officers are
described under the captions "Management--Director Compensation" and
"Management--Executive Compensation."

LICENSE AGREEMENT WITH FRONTEC AB

One of our wholly owned subsidiaries, Viewlocity AB, has an agreement with a
subsidiary of Frontec AB pursuant to which Viewlocity AB grants to the Frontec
AB subsidiary a world-wide non-exclusive right to market, sublicense and service
the AMTrix product line. The initial term of the agreement ends November 1,
2002, and is thereafter subject to automatic two year extensions unless either
party gives written notice of its intent to terminate the license. The agreement
entitles the Frontec AB subsidiary to receive a 50% discount off of the list
price for any AMTrix software it sublicenses, or a 70% discount for AMTrix
software it sublicenses for EDI messaging only within the Nordic countries,
which are Finland,

65
<PAGE>

Norway, Sweden and Denmark, or to Nordic-based customers. In addition, the
Frontec AB subsidiary receives 40% of the first year maintenance fee paid to a
Viewlocity subsidiary by a customer if the Frontec AB subsidiary assisted in the
sale of the maintenance contract. The Frontec AB subsidiary can also sell its
own maintenance contracts directly to its customers, in which case Frontec AB is
required to pay the Viewlocity subsidiary between 7% and 10.6% of the list price
of the software being supported, depending on the level of support sold by the
Frontec AB subsidiary. In fiscal 1999 and the nine months ended September 30,
2000, we received license revenue of $638,000 and $678,000, respectively, and
support revenue of $638,000 and $573,000, respectively, from Frontec AB in
connection with this license arrangement.

SERVICES PROVIDED BY FRONTEC AB

From time to time, we engage Frontec AB personnel on a contract basis to
provide temporary professional services to our customers and to aid in limited
software development projects. We pay Frontec AB fees for these contract
services based on Frontec AB's standard time and materials rates. In fiscal 1999
and the nine months ended September 30, 2000, Frontec AB billed us $34,000 and
$524,300, respectively, for professional services and $345,000 and $469,000,
respectively, for software development services. We believe that the fees
charged by Frontec AB are no less favorable to us than the fees that we would
have incurred had we engaged other third party service providers. We intend to
continue to use Frontec AB's professional services from time to time in the
future. We believe that these services also are available from other third party
providers.

FRONTEC AB GUARANTEE OF SINGAPORE LINE OF CREDIT

We maintain a line of credit with a bank in Singapore providing borrowings
of up to $200,000 for working capital purposes. Interest is payable at the
bank's prime rate plus 1%. The line of credit is secured by a corporate
guarantee by Frontec AB and has no significant covenants.

POLICY ON FUTURE TRANSACTIONS

Our board of directors has adopted a resolution whereby all future
transactions with related parties, including any loans from us to our officers,
directors and principal stockholders or their family members and affiliates must
be approved by a majority of the board of directors, including a majority of the
independent and disinterested members of the board of directors or a majority of
the disinterested stockholders, and must be on terms no less favorable to us
than could be obtained from unaffiliated third parties.

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<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

The following table presents information about the beneficial ownership of
our common stock as of September 30, 2000, and as adjusted to reflect the sale
of common stock offered by this prospectus, by:

- each person or entity who is known by us to be the beneficial owner of
more than 5% of our outstanding common stock;

- each of our directors;

- each Named Executive Officer; and

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

Frontec AB, one of our stockholders, has granted to the underwriters the
option to purchase up to 825,000 shares of common stock to cover
over-allotments. Footnote (1) to the Principal and Selling Stockholders table
below provides information concerning the stock holdings of Frontec AB after the
offering if the over-allotment option is exercised in full.

For purposes of calculating the percentage beneficially owned, the number of
shares of common stock deemed outstanding prior to the offering includes
16,579,530 common shares outstanding as of September 30, 2000, and 16,334,767
shares issuable upon the automatic conversion of our convertible preferred stock
upon completion of this offering. Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or investment
power with respect to the securities. The number of shares beneficially owned by
a person includes shares of common stock subject to options held by that person
that are currently exercisable or exercisable within 60 days of September 30,
2000. The shares issuable under these options are treated as if outstanding for
computing the percentage ownership of the person holding these options, but are
not treated as if outstanding for the purposes of computing the percentage
ownership of any other person.

Except as noted below, the business address of the named beneficial owner is
c/o Viewlocity, Inc., 3475 Piedmont Road, Suite 1700, Atlanta, Georgia 30305.

<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED PERCENT BENEFICIALLY
----------------------- OWNED AFTER
NAME OF BENEFICIAL OWNER SHARES PERCENTAGE OFFERING
------------------------ ---------- ---------- --------------------
<S> <C> <C> <C>
Frontec AB (1)...................................... 13,401,196 40.7% 34.9%
Entities affiliated with Battery Ventures IV, L.P.
(2)............................................... 7,789,290 23.7 20.3
Entities affiliated with BCI Growth V, L.P. (3)..... 1,797,925 5.5 4.7
Gregory Cronin (4).................................. 1,435,226 4.4 3.7
Maurice A. Trebuchon (5)............................ 480,263 1.5 1.3
Stan F. Stoudenmire (6)............................. 148,967 * *
Jeffrey B. Cashman (7).............................. 487,541 1.5 1.3
Paul R. Leiske (8).................................. 234,674 * *
Leo Apotheker (9)................................... 42,510 * *
Olof Englund (10)................................... 13,301,196 40.4 34.6
Mark E. Hastings (11)............................... 1,797,925 5.5 4.7
William M. Stuek (12)............................... 1,230,994 3.7 3.2
Scott R. Tobin (13)................................. 7,789,290 23.7 20.3
All directors and executive officers as a group (10
persons).......................................... 26,948,586 81.9 70.2
</TABLE>

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

* Represents beneficial ownership of less than 1% of the outstanding shares of
common stock.

(1) Includes 150,000 shares held by executive officers and directors of Frontec
AB. Frontec AB is located at Gardsvagen 7, S-169 70 Solna, Sweden. If the
underwriters exercise their over-allotment in full,

67
<PAGE>
Frontec AB will sell 825,000 shares of common stock in this offering and
would remain the beneficial owner of 12,726,196 shares of common stock. The
board of directors of Frontec AB currently consists of Olof Englund, Franco
Fateli, Sure Fogelstrom, Bo Lundh, Ann Nilsson, Leif Rylander, Magnus
Wahlback, Bengt Wallentin, and Jan Westlund. Olof Englund is a member of
our board of directors.

(2) Includes 7,672,452 shares held by Battery Ventures IV, L.P. and 116,838
shares held by Battery Investment Partners IV, LLC. Entities affiliated
with Battery Ventures IV, L.P. are located at 20 William Street, Wellesley,
MA 02181. Battery Investment Partners IV, LLC is the managing partner of
Battery Ventures IV, L.P. Thomas J. Crotty, Robert G. Barrett, Oliver D.
Curme, Todd A. Dagres, Richard D. Frisbie and Kenneth P. Lawler are the
general members and general partners of Battery Investment Partners IV, LLC
and Battery Ventures IV, L.P., respectively.

(3) Includes 1,769,086 shares held by BCI Growth V, L.P. and 28,839 shares held
by BCI Investors, LLC. Entities affiliated with BCI Growth V, L.P. are
located at Glenpointe Centre West, Teaneck, NJ 07666-6883. Glenpointe
Associates V, LLC is the General Partner of BCI Growth V, LLC. The managing
members of Glenpointe Associates V, LLC are Mark E. Hastings, Ted Horton,
Hoyt Goodrich, Bart Goodwin, Don Remey, Peter Wilde, Tom Cusick and Steve
Eley. The managing members of BCI Investors, LLC are Mark E. Hastings, Ted
Horton, Hoyt Goodrich, Bart Goodwin, Don Remey, Peter Wilde, Tom Cusick and
Steve Eley. Mark E. Hastings is a member of our board of directors.

(4) Includes 865,126 shares subject to repurchase by Viewlocity.

(5) Includes 310,782 shares subject to repurchase by Viewlocity.

(6) Includes 96,752 shares subject to repurchase by Viewlocity.

(7) Includes 259,530 shares subject to repurchase by Viewlocity.

(8) Includes 132,788 shares subject to repurchase by Viewlocity.

(9) Includes 42,510 shares subject to options which are exercisable within
60 days of September 30, 2000.

(10) Includes 13,251,196 shares held by Frontec AB. Mr. Englund is an executive
director of Frontec AB.

(11) Includes 1,769,086 shares held by BCI Growth V, L.P. and 28,839 shares
held by BCI Investors, LLC. Mr. Hastings is a general partner of BCI
Partners, L.P.

(12) Includes 1,145,960 shares held by The Beacon Group III--Focus Value Fund,
L.P. Mr. Stuek is a senior advisor of The Beacon Group III--Focus Value
Fund, L.P.

(13) Includes 7,672,452 shares held by Battery Ventures IV, L.P. and 116,838
shares held by Battery Investment Partners IV, LLC. Mr. Tobin is a general
partner of Battery Ventures.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

GENERAL

Our authorized capital stock consists of 100,000,000 shares of common stock,
$.01 par value per share, and 40,000,000 shares of preferred stock, $.01 par
value per share. The following description of our capital stock is a summary and
is qualified in its entirety by the provisions of our amended and restated
certificate of incorporation and bylaws that we intend to adopt prior to the
completion of this offering.

COMMON STOCK

As of September 30, 2000, there were 16,579,530 shares of common stock
outstanding. Upon the exercise of warrants to purchase shares of our Series B
convertible preferred stock and the conversion of all outstanding shares of our
convertible preferred stock, which will automatically occur upon closing of this
offering according to the terms of our amended and restated certificate of
incorporation, there will be an aggregate of 32,914,297 shares of common stock
outstanding.

The holders of common stock are entitled to one vote per share for the
election of directors and on all other matters to be submitted to a vote of our
stockholders. Subject to the rights of any holders of preferred stock that may
be issued in the future, the holders of common stock are entitled to receive
ratably such dividends, if any, as may be declared by the board of directors and
paid out of funds legally available for that purpose. In the event of our
dissolution, liquidation or winding up, holders of common stock are entitled to
share ratably in all assets remaining after payment of all liabilities, subject
to the prior distribution rights of preferred stock, if any, then outstanding.
The holders of common stock have no preemptive or conversion rights or other
subscription rights. The outstanding shares of common stock are, and the shares
of common stock to be issued by us in connection with this offering will be,
duly authorized, validly issued, fully paid and nonassessable.

PREFERRED STOCK

Under our amended and restated certificate of incorporation, our board of
directors is authorized, without further stockholder approval, to issue from
time to time up to an aggregate of 40,000,000 shares of preferred stock in one
or more series. The board also has the right to fix or alter the designations,
preferences, rights and any qualifications, limitations or restrictions of any
preferred stock issued, including dividend rights and rates, conversion rights,
voting rights, terms of redemption, including sinking fund provisions,
liquidation preferences and the number of shares constituting any series or
designations of a series. The issuance of preferred stock with greater rights,
privileges and preferences than those applicable to the common stock may
adversely affect the voting power, market price and other rights and privileges
of the common stock, and may delay or prevent a change of control of our
company.

As of September 30, 2000, there were 10,000,000 shares of Series A
convertible preferred stock outstanding, warrants to purchase 7,005,495 shares
of Series B convertible preferred stock outstanding, 2,000 shares of Series C
convertible preferred stock outstanding, 10,463,673 shares of Series D
convertible preferred stock outstanding and 4,008,066 shares of Series E
convertible preferred stock outstanding. Pursuant to their terms, each
outstanding share of Series A, B, D and E convertible preferred stock will
automatically convert into one-half of a share of common stock upon the
completion of this offering. All outstanding shares of Series C convertible
preferred stock will automatically convert into a number of shares of common
stock upon the completion of this offering determined by dividing $20.5 million
by the initial public offering price. Accordingly, no shares of preferred stock
will be outstanding upon the closing of this offering.

69
<PAGE>
REGISTRATION RIGHTS

On June 22, 2000, we entered into a third amended and restated registration
rights agreement with the holders of our Series A, B, D and E convertible
preferred stock and warrants, pursuant to which investors holding an aggregate
of 15,073,936 shares of common stock are entitled to certain rights with respect
to the registration of these shares under the Securities Act.

At any time, the holders of at least 20% of the shares of our common stock
covered by the agreement may request that we register their shares under the
Securities Act. If at any time we propose to register any of our common stock
under the Securities Act, either for our own account or for the account of our
stockholders, the holders of these shares are entitled to notice of registration
and to include their shares of common stock in the registration. In addition,
after we have been a reporting company under the securities laws for at least
one year, and we have been filing SEC reports in a timely manner, any holder of
shares covered by the registration rights agreement may request that we register
all or part of their shares under the Securities Act, subject to a minimum
anticipated aggregate price to the public of the shares covered by the requested
registration. These registration rights are subject to conditions and
limitations, among which is the right of the underwriters in an offering to
limit the number of shares to be included in the registration.

WARRANTS

On October 27, 1999, we entered into a convertible debenture financing with
William Street Associates II, LLC. In connection with that transaction, we
issued to William Street a warrant that expires on October 27, 2004, for the
purchase of 196,875 shares of our common stock at a price of $2.00 per share. On
November 12, 1999, we entered into an equipment lease financing agreement with
CommVest, LLC and issued to CommVest a warrant that expires on November 12,
2004, for the purchase of 75,000 shares of our common stock at a price of $2.00
per share. On November 26, 1999, we entered into a line of credit agreement with
Imperial Bancorp and issued to Imperial Bancorp a warrant that expires on
November 26, 2006, for the purchase of 44,217 shares of our common stock at a
price of $5.88 per share. Each of these warrants is subject to anti-dilution
adjustment if we issue additional shares of capital stock prior to this offering
at a price per share less than the applicable exercise price of the warrant.

As of September 30, 2000, there were warrants outstanding to purchase
7,005,495 shares of Series B convertible preferred stock. The holders of these
warrants have irrevocably agreed to exercise the warrants on a cashless basis
immediately prior to the completion of this offering. Pursuant to the warrant
agreements, the holders of the warrants will receive a number of shares of
Series B convertible preferred stock equal to 7,005,495 multiplied by the
difference between (a) the fair market value of a share of Series B convertible
preferred stock and (b) $1.82, divided by the fair market value of a share of
Series B convertible preferred stock. The fair market value of a share of
Series B convertible preferred stock is defined as the initial public offering
price per share of common stock in this offering multiplied by the number of
shares or fraction of a share of common stock issuable upon conversion of the
Series B convertible preferred stock. Each share of Series B convertible
preferred stock currently is convertible into one-half of a share of common
stock. Based on an assumed offering price of $13.00, the holders of the warrants
will receive 5,043,956 shares of Series B convertible preferred stock, which
will automatically convert into 2,521,978 shares of our common stock upon
completion of this offering.

ANTI-TAKEOVER EFFECTS OF OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION,
BYLAWS AND DELAWARE LAW

ANTI-TAKEOVER PROVISIONS

Our board of directors, without stockholder approval, has the authority
under our amended and restated certificate of incorporation to issue preferred
stock with rights superior to the rights of holders of common stock. As a
result, preferred stock may be issued quickly and may adversely affect the
rights of

70
<PAGE>
holders of common stock and may be issued with terms calculated to delay or
prevent a change of control of our company or make removal of management more
difficult.

Under Delaware law, all stockholder actions must be effected at a duly
called annual or special meeting or by written consent. Our amended and restated
certificate of incorporation provides that stockholder action may not be
effected by written consent. The amended and restated certificate of
incorporation also provides that the board is divided into three classes, with
each director assigned to a class with a term of three years.

Our amended and restated bylaws provide that, except as otherwise required
by law, special meetings of our stockholders can only be called by the board of
directors, the chairman of the board of directors, the chief executive officer
or the president. In addition, our amended and restated bylaws establish an
advance notice procedure for stockholder proposals to be brought before an
annual meeting of stockholders, including proposed nominations of persons for
election to the board of directors. These provisions of our amended and restated
bylaws are intended to enhance the likelihood of continuity and stability in the
composition of our board of directors and in the policies formulated by the
board of directors, and to discourage certain types of transactions that may
involve an actual or threatened change of control. These provisions are designed
to reduce vulnerability to an unsolicited acquisition proposal and, accordingly,
may discourage potential acquisition proposals and may delay or prevent a change
in control. These provisions may also have the effect of preventing changes in
our management.

EFFECT OF DELAWARE ANTI-TAKEOVER STATUTE

We are subject to Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, the statute prevents publicly held Delaware
corporations from engaging in a "business combination" with an "interested
stockholder" for three years following the date of the transaction in which the
person became an interested stockholder, unless the business combination is
approved in a prescribed manner. For purposes of the statute, a "business
combination" includes a merger, consolidation or sale of more than 10% of the
assets of our company, and an "interested stockholder" is any entity or person
beneficially owning 15% or more of the outstanding voting stock of our company
and any entity or person affiliated with or controlling or controlled by such an
entity or person.

LISTING

Our shares of common stock are proposed to be listed for quotation on the
Nasdaq National Market under the symbol VIEW.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is SunTrust Bank,
Atlanta, Georgia.

71
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of our common stock in the public market after
the offering may adversely affect the market price of our common stock and our
ability to raise equity capital in the future on terms favorable to us.

After this offering, 38,414,297 shares of our common stock will be
outstanding, assuming none of the outstanding stock options or warrants are
exercised. Of these shares, all of the 5,500,000 shares sold in this offering
will be freely tradable without restriction or further registration under the
Securities Act, unless these shares are purchased by "affiliates" as that term
is defined in Rule 144 under the Securities Act. The remaining shares of common
stock held by existing stockholders are "restricted securities" as that term is
defined in Rule 144 under the Securities Act. Restricted securities may be sold
in the public market only if registered or if they qualify for an exemption from
registration under Rules 144 or 701 under the Securities Act, which rules are
summarized below.

The following table indicates approximately when the 32,914,297 shares of
our common stock that are not being sold in this offering but which will be
outstanding when this offering is complete will be eligible for sale in the
public market. Frontec AB also has advised us that it may sell up to 5 million
shares of our common stock to one or more third parties prior to or after this
offering in a privately negotiated transaction. Chase Securities Inc. has agreed
to waive the lock-up agreement with respect to such a sale provided that the
purchasers agree to a lock-up period of 180 days after the date of this
prospectus.

<TABLE>
<CAPTION>
ELIGIBILITY OF RESTRICTED
SHARES FOR SALE IN THE
PUBLIC MARKET
-------------------------
<S> <C>
On the date of this prospectus........................ --
180 days after the date of this prospectus............ 12,934,560
Thereafter upon expiration of one year holding
periods............................................. 6,728,541
270 days after the date of this prospectus............ 13,251,196
</TABLE>

Most of the restricted shares that will become available for sale in the
public market starting 180 or 270 days after the date of this prospectus will be
subject to volume and other resale restrictions under Rule 144 because the
holders are our affiliates.

RULE 144

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person (or persons whose shares are aggregated)
who has beneficially owned shares of our common stock for at least one year is
entitled to sell, within any three-month period, a number of shares that is not
more than the greater of:

- 1% of the number of shares of common stock then outstanding, which will
equal approximately 384,143 shares immediately after this offering; or

- the average weekly trading volume of the common stock on the Nasdaq
National Market during the four calendar weeks before a notice of sale on
Form 144 is filed.

Sales under Rule 144 also are subject to manner of sale provisions and
notice requirements and to the availability of current public information about
us.

RULE 144(K)

Under Rule 144(k), a person (or persons whose shares are aggregated) who is
not deemed to have been one of our affiliates at any time during the 90 days
before a sale and who has beneficially owned restricted shares for at least two
years, is entitled to sell the shares without complying with the manner of sale,
public information, volume limitation or notice provisions of Rule 144.

72
<PAGE>
RULE 701

In general, under Rule 701 of the Securities Act as currently in effect, any
of our employees, consultants or advisors who purchase shares from us under a
stock option plan or other written agreement can resell those shares 90 days
after the effective date of this offering in reliance on Rule 144, but without
complying with certain restrictions, including the holding period, contained in
Rule 144.

LOCK-UP AGREEMENTS

Our directors, officers and all of our stockholders, warrantholders and
optionees holding shares and options to acquire shares of our common stock after
this offering are subject to lock-up agreements under which they have agreed not
to transfer or dispose of, directly or indirectly, any shares of common stock or
any securities convertible into or exercisable or exchangeable for shares of
common stock, for a period of 180 days after the date of this prospectus, or
270 days in the case of Frontec AB. Transfers or dispositions can be made sooner
with the prior written consent of Chase Securities Inc. While there is no
specific criteria for determining whether to release shares from the lock-up
arrangements, Chase Securities Inc. will consider the stockholder's reasons for
requesting the release, the number of shares for which the release is being
requested and market conditions at the time, including the trading price of our
common stock. Except as described above with regard to Frontec AB, Chase
Securities Inc. does not presently intend to waive any lock-up arrangements. We
have also entered into an agreement with Chase Securities Inc. that we will not,
subject to certain exceptions, offer, sell or otherwise dispose of common stock
for a period of 180 days from the date of this prospectus.

REGISTRATION RIGHTS AND STOCK PLANS

Some of our existing stockholders and warrantholders have the right to
require us to register under the Securities Act up to 15,073,936 shares of their
common stock at any time. All of these shares are subject to the lock-up
agreements described above. Once we register these shares, they can be freely
sold in the public market, subject to these lock-up agreements. See "Description
of Capital Stock--Registration Rights."

Immediately after this offering, we intend to file a registration statement
under the Securities Act covering 10,856,755 shares of common stock reserved for
issuance under our stock incentive plans and our employee stock purchase plan.
This registration statement is expected to be filed and become effective as soon
as practicable after the effective date of this offering. As the number of
shares reserved for issuance under these plans increases, we will file
amendments to this registration statement covering the additional shares. As of
September 30, 2000, options to purchase 3,961,660 shares of common stock were
issued and outstanding. When the lock-up agreements described above expire,
there will be vested options outstanding that will be exercisable to acquire
2,237,261 shares of common stock, based on options outstanding as of
September 30, 2000. Accordingly, shares registered under that registration
statement will, subject to vesting provisions and Rule 144 volume limitations
applicable to our affiliates, be available for sale in the open market
immediately after the 180 day lock-up agreements expire.

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<PAGE>
UNDERWRITING

Subject to the terms and conditions contained in an underwriting agreement
dated , the underwriters named below, through their representatives,
Chase Securities Inc., Bear, Stearns & Co. Inc. and Wit SoundView Corporation,
have severally agreed to purchase from us the respective numbers of shares of
common stock set forth opposite their names below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Chase Securities Inc........................................
Bear, Stearns & Co. Inc.....................................
Wit SoundView Corporation...................................

---------
Total................................................... 5,500,000
=========
</TABLE>

The underwriting agreement provides that the obligations of the underwriters
are subject to certain conditions precedent, including the absence of any
material adverse change in our business and the receipt of certain certificates,
opinions and letters from us, our counsel and the independent auditors. The
underwriters are obligated to purchase all shares of common stock offered by us
(other than those shares covered by the over-allotment option described below)
if they purchase any shares.

The following table shows the per share and total underwriting discounts and
commissions to be paid to the underwriters by us and the selling stockholder.
These amounts are shown assuming both no exercise and full exercise of the
underwriters' over-allotment option to purchase additional shares.

<TABLE>
<CAPTION>
PAID BY THE SELLING
PAID BY VIEWLOCITY STOCKHOLDER
--------------------------- ---------------------------
NO EXERCISE FULL EXERCISE NO EXERCISE FULL EXERCISE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Per Share................ $ $ $ -- $
Total.................... $ $ $ -- $
</TABLE>

We estimate that the total expenses of this offering, excluding underwriting
discounts and commissions, will be approximately $ . The underwriting
discounts and commissions have been determined through negotiations among
representatives of the underwriters and us and will equal approximately 7% of
the aggregate proceeds raised by us in the offering.

The underwriters propose to offer the shares of common stock directly to the
public at the initial public offering price set forth on the cover page of this
prospectus and to certain dealers at that price less a concession not in excess
of $ per share. The underwriters may allow and the dealers may reallow a
concession not in excess of $ per share to certain other dealers. After the
initial public offering of the shares, the offering price and other selling
terms may be changed by the underwriters. The representatives have informed us
that the underwriters do not intend to confirm discretionary sales of more than
5% of the shares of common stock offered in this offering.

The selling stockholder has granted to the underwriters an option,
exercisable no later than 30 days after the date of this prospectus, to purchase
up to 825,000 additional shares of common stock at the initial public offering
price, less the underwriting discount, set forth on the cover page of this
prospectus. To the extent that the underwriters exercise this option, each of
the underwriters will have a firm commitment to purchase approximately the same
percentage thereof that the number of shares of common stock to be purchased by
it shown in the above table bears to the total number of shares of common stock
offered hereby. The selling stockholder will be obligated, pursuant to the
option, to sell shares to the underwriters

74
<PAGE>
to the extent the option is exercised. The underwriters may exercise this option
solely to cover over-allotments, if any, made in connection with the sale of
shares of common stock offered hereby.

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

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

All of our stockholders, including officers, directors, principal
stockholders, warrantholders and optionees who will own in the aggregate
35,740,854 shares of common stock after the offering, have agreed not to,
without the prior written consent of Chase Securities Inc., sell, offer,
contract to sell, transfer the economic risk of ownership in, make any short
sale, pledge or otherwise dispose of any shares of common stock or any
securities convertible into or exchangeable or exercisable for shares of common
stock for a period of 180 days from the date of this prospectus, or 270 days in
the case of Frontec AB. While there are no specific criteria for determining
whether to release shares from the lock-up arrangements, Chase Securities Inc.
will consider the reasons for requesting the release, the number of shares for
which the release is being requested and market conditions at the time,
including the trading price of our common stock. Except with regard to
Frontec AB, Chase Securities Inc. does not presently intend to waive any lock-up
arrangements. We have agreed that we will not, without the prior written consent
of Chase Securities Inc., sell, offer, contract to sell, transfer the economic
risk of ownership in, make any short sale, pledge or otherwise dispose of any
shares of common stock or any securities convertible into or exchangeable or
exercisable for shares of common stock for a period of 180 days following the
date of this prospectus, except that we may issue shares upon the exercise of
options granted prior to the date hereof and may grant additional options under
our stock option plans. Without the prior written consent of Chase
Securities Inc., none of these additional options shall be exercisable during
the 180 day period.

At our request, the underwriters have reserved not more than 5% of the
5,500,000 shares of common stock offered hereby for sale at the initial public
offering price to our non-employee directors, business associates and related
persons. The number of shares of common stock available for sale to the general
public will be reduced by the number of reserved shares these persons purchase.
Any reserved shares which are not so purchased will be offered by the
underwriters to the general public on the same basis as the other shares offered
by this prospectus. Persons who purchase reserved shares will be required to
agree that they will not, without the prior written consent of Chase
Securities Inc., sell, offer, contract to sell, transfer the economic risk of
ownership in, make any short sale, pledge or otherwise dispose of any shares of
common stock or any securities convertible into or exchangeable or exercisable
for shares of common stock for a period of 180 days from the date of this
prospectus.

Prior to this offering, there has been no public market for the common
stock. The initial public offering price for the common stock will be determined
by negotiation among us and the representatives of the underwriters. Among the
factors considered in determining the initial public offering price will be
prevailing market and economic conditions, our revenue and earnings, market
valuations of other companies engaged in activities similar to ours, estimates
of our business potential and our prospects, the present state of our business
operations, our management and other factors deemed relevant.

We have applied for quotation of the common stock on the Nasdaq National
Market under the symbol VIEW.

Persons participating in this offering may over-allot or effect transactions
that stabilize, maintain or otherwise affect the market price of the common
stock at levels above those that might otherwise prevail in the open market,
including by entering stabilizing bids, effecting syndicate covering
transactions or imposing penalty bids. A stabilizing bid means the placing of
any bid or the effecting of any purchase for

75
<PAGE>
the purpose of pegging, fixing or maintaining the price of the common stock. A
syndicate covering transaction means the placing of any bid on behalf of the
underwriting syndicate or the effecting of any purchase to reduce a short
position created in connection with the offering. A penalty bid means an
arrangement that permits the underwriters to reclaim a selling concession from a
syndicate member in connection with the offering when shares of common stock
sold by the syndicate member are purchased in syndicate covering transactions.
These transactions may be effected on the Nasdaq National Market, in the
over-the-counter market or otherwise. This stabilizing, if commenced, may be
discontinued at any time.

A prospectus in electronic format is being made available on an Internet
website maintained by Wit SoundView Corporation's strategic partner, E*Trade
Securities, Inc., and may be made available on websites maintained by other
underwriters or selected dealers. The representatives of the underwriters may
agree to allocate a number of shares to Wit Capital Corporation and other
underwriters for sale to their online brokerage account holders. Persons who
have opened online brokerage accounts with these underwriters may review a copy
of this prospectus online and may elect to purchase shares in this offering
through their online brokerage accounts. Internet distributions will be
allocated by the representatives of the underwriters on the same basis as other
allocations.

LEGAL MATTERS

The validity of the common stock offered by this prospectus will be passed
upon for us by Morris, Manning & Martin, L.L.P., Atlanta, Georgia. As of the
date of this prospectus, attorneys with Morris, Manning and Martin, L.L.P. own
approximately 10,535 shares of our common stock. King & Spalding has served as
counsel for the underwriters in connection with this offering.

EXPERTS

The consolidated financial statements of Viewlocity, Inc., as of
December 31, 1998 and 1999 and for each of the three years in the period ended
December 31, 1999 included in this prospectus have been included in this
prospectus in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of the firm as experts in auditing and
accounting.

The financial statements of Nexstep, Inc., as of December 31, 1999 and for
the period from inception (January 26, 1999) through December 31, 1999 included
in this prospectus have been included in this prospectus in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of the firm as experts in auditing and accounting.

The financial statements of SC21 Pte. Ltd. as of December 31, 1998 and 1999,
for the year ended December 31, 1999, and the period from inception
(November 13, 1998) through December 31, 1998 included in this prospectus have
been included in this prospectus in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
the firm as experts in auditing and accounting.

76
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the
Securities Act with respect to the shares of common stock offered hereby. This
prospectus is only a part of the registration statement and does not contain all
of the information included in the registration statement. Further information
with respect to Viewlocity and the common stock offered hereby can be found in
the registration statement and the exhibits and schedules thereto. Statements
made in this prospectus as to the contents of any contract, agreement or other
document are summaries of all material information about the documents
summarized, but are not complete descriptions of all terms and in each instance
reference is made to the copy of that contract or other documents filed as an
exhibit to the registration statement. The registration statement and the
exhibits and schedules thereto may be inspected without charge, and copied at
prescribed rates, at the Public Reference Room maintained by the SEC in Room
1024, 450 Fifth Street, N. W., Washington, D.C. 20549, and at the following
regional offices of the SEC: Seven World Trade Center, Room 1400, New York, New
York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, Viewlocity is
required to file electronic versions of these documents with the SEC through the
SEC's Electronic Data Gathering, Analysis and Retrieval, or EDGAR, system. The
SEC maintains an Internet site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC.

Viewlocity intends to furnish to its stockholders annual reports containing
consolidated financial statements audited by an independent public accounting
firm and quarterly reports for the first three quarters of each fiscal year
containing unaudited consolidated financial information.

77
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
VIEWLOCITY, INC. AND SUBSIDIARIES

Report of Independent Accountants........................... F-2

Consolidated Financial Statements:

Consolidated Balance Sheets............................... F-3

Consolidated Statements of Operations..................... F-4

Consolidated Statements of Changes in Stockholders' Equity
(Deficit) and Comprehensive Income...................... F-5

Consolidated Statements of Cash Flows..................... F-6

Notes to Consolidated Financial Statements................ F-7

VIEWLOCITY, INC. AND SUBSIDIARIES--UNAUDITED PRO FORMA
FINANCIAL INFORMATION..................................... F-30

Unaudited Pro Forma Consolidated Balance Sheet.............. F-31

Unaudited Pro Forma Consolidated Statements of Operations... F-32

Notes to the Unaudited Pro Forma Financial Information...... F-34

NEXSTEP, INC.

Report of Independent Accountants........................... F-35

Financial Statements:

Balance Sheet............................................. F-36

Statement of Operations................................... F-37

Statement of Changes in Stockholders' Deficit............. F-38

Statement of Cash Flows................................... F-39

Notes to Financial Statements............................. F-40

SC21 PTE. LTD.

Report of Independent Accountants........................... F-43

Financial Statements:

Balance Sheets............................................ F-44

Statements of Operations.................................. F-45

Statements of Changes in Stockholders' Deficit and
Comprehensive Income.................................... F-46

Statements of Cash Flows.................................. F-47

Notes to Financial Statements............................. F-48
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors of
Viewlocity, Inc. and Subsidiaries:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, changes in stockholders' equity (deficit)
and comprehensive income, and cash flows present fairly, in all material
respects, the financial position of Viewlocity, Inc. and its subsidiaries (the
"Company") at December 31, 1998 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP

PricewaterhouseCoopers LLP

Atlanta, Georgia
July 28, 2000, except for Note 15,
which is as of September 21, 2000

F-2
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
PRO FORMA
STOCKHOLDERS'
DECEMBER 31, EQUITY AS OF
----------------------------- SEPTEMBER 30, SEPTEMBER 30,
1998 1999 2000 2000
------------- ------------- -------------- --------------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $ 1,597 $ 9,316 $ 6,647
Accounts receivable, net........................... 5,323 4,827 11,163
Other receivables.................................. 465 514 931
Prepaid expenses and other current assets.......... 216 719 2,035
-------- -------- ---------
Total current assets........................... 7,601 15,376 20,776
Property and equipment, net.......................... 1,415 2,383 6,787
Capitalized software development, net................ 725 940 5,570
Goodwill and other intangibles, net.................. -- 104 9,588
Other non-current assets............................. 157 307 270
-------- -------- ---------
Total assets................................... $ 9,898 $ 19,110 $ 42,991
======== ======== =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable................................... $ 866 $ 4,650 $ 4,285
Short-term debt.................................... 2,650 2,708 2,654
Payables to associated companies................... -- 1,320 1,144
Capital lease obligations.......................... -- 104 426
Accrued expenses................................... 2,421 4,997 14,187
Deferred revenues.................................. 1,922 1,453 4,237
-------- -------- ---------
Total current liabilities...................... 7,859 15,232 26,933
Payables to associated companies..................... 14,527 -- --
Capital lease obligations, less current portion...... -- 589 1,482
Deferred income taxes................................ 351 324 339
Other................................................ 83 -- 202
-------- -------- ---------
Total liabilities.............................. 22,820 16,145 28,956
-------- -------- ---------
Commitments and contingencies

Redeemable, convertible preferred stock: issuable in
series, $.01 par value; 39,998 shares authorized;
19,801 shares issued and outstanding at
December 31, 1999; 24,472 shares issued and
outstanding at September 30, 2000.................. -- 23,751 83,986 $ --
-------- -------- --------- --------
Stockholders' equity (deficit):
Divisional equity (deficit)........................ (15,060) -- -- --
Convertible preferred stock: $.01 par value; 2
shares authorized; 2 shares issued and
outstanding at December 31, 1999 and
September 30, 2000............................... -- -- -- --
Common stock: $.01 par value; 100,000 shares
authorized; 17,031 shares issued and outstanding
at December 31, 1999; 18,407 shares issued and
outstanding at September 30, 2000; 34,742 shares
issued and outstanding (pro forma)............... -- 170 184 347
Additional paid in capital......................... -- 41,002 36,118 119,941
Treasury stock: 1,827 shares held in treasury at
September 30, 2000............................... -- -- (37) (37)
Notes receivable from stockholders................. -- (6,168) (6,612) (6,612)
Deferred compensation.............................. -- -- (749) (749)
Retained earnings (deficit)........................ -- (57,318) (100,490) (100,490)
Accumulated other comprehensive income............. 2,138 1,528 1,635 1,635
-------- -------- --------- --------
Total stockholders' equity (deficit)........... (12,922) (20,786) (69,951) $ 14,035
-------- -------- --------- ========
Total liabilities and stockholders' equity
(deficit).................................... $ 9,898 $ 19,110 $ 42,991
======== ======== =========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

F-3
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------ -------------------
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue:
Licenses..................................... $ 6,522 $ 6,767 $ 8,849 $ 6,975 $ 13,913
Support...................................... 1,609 2,024 2,991 2,197 3,375
Services..................................... 3,563 4,873 7,608 6,196 8,750
------- ------- -------- -------- --------
Total revenue.......................... 11,694 13,664 19,448 15,368 26,038
------- ------- -------- -------- --------
Cost of revenue:
Licenses..................................... 162 362 1,024 884 1,052
Support and services......................... 4,102 5,977 10,160 7,072 11,882
------- ------- -------- -------- --------
Total cost of revenue.................. 4,264 6,339 11,184 7,956 12,934
------- ------- -------- -------- --------
Gross profit................................... 7,430 7,325 8,264 7,412 13,104
------- ------- -------- -------- --------
Operating expenses:
Sales and marketing.......................... 8,199 8,208 14,580 9,848 25,245
Research and development..................... 3,132 2,784 4,045 2,638 11,394
General and administrative................... 4,986 4,741 8,891 5,346 6,963
Purchased research and development........... -- -- -- -- 5,200
Stock based compensation..................... -- -- -- -- 4,586
Depreciation and amortization................ 756 1,061 1,088 696 3,078
------- ------- -------- -------- --------
Total operating expenses............... 17,073 16,794 28,604 18,528 56,466
------- ------- -------- -------- --------
Operating loss................................. (9,643) (9,469) (20,340) (11,116) (43,362)
------- ------- -------- -------- --------
Other income (expense):
Other, net................................... 279 (15) (46) 60 66
Interest, net................................ (53) (191) 67 (31) 325
------- ------- -------- -------- --------
Other income (expense), net............ 226 (206) 21 29 391
------- ------- -------- -------- --------
Loss before provision (benefit) for income
taxes........................................ (9,417) (9,675) (20,319) (11,087) (42,971)
------- ------- -------- -------- --------
Provision (benefit) for income taxes........... 244 (45) 94 101 201
------- ------- -------- -------- --------
Net loss....................................... (9,661) (9,630) (20,413) (11,188) (43,172)
Accretion to preferred stock redemption
value........................................ -- -- (3,233) -- (18,361)
------- ------- -------- -------- --------
Net loss attributable to common stockholders... $(9,661) $(9,630) $(23,646) $(11,188) $(61,533)
======= ======= ======== ======== ========
Net loss per share:
Basic and diluted............................ $ (0.57) $ (0.57) $ (1.39) $ (0.66) $ (3.82)
======= ======= ======== ======== ========
Weighted average shares used in
computation................................ 17,031 17,031 17,031 17,031 16,098
======= ======= ======== ======== ========
Pro forma net loss per share (unaudited):
Basic and diluted............................ $ (0.92) $ (1.50)
======== ========
Weighted average shares used in
computation................................ 22,168 28,835
======== ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

F-4
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
AND COMPREHENSIVE INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK
------------------- ------------------- NOTES
DIVISIONAL NUMBER NUMBER ADDITIONAL RECEIVABLE
EQUITY OF OF PAID IN TREASURY FROM
(DEFICIT) SHARES AMOUNT SHARES AMOUNT CAPITAL STOCK STOCKHOLDERS
---------- -------- -------- -------- -------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1996...... $(12,318) -- $ -- -- $ -- $ -- $ -- $ --

Net loss..................... (9,661)
Contributions from parent.... 8,017
Change in translation
adjustment.................
-------- ------- ---- ----- ------ -------- ----- -------
BALANCE DECEMBER 31, 1997...... (13,962) -- -- -- -- -- -- --

Net loss..................... (9,630)
Contributions from parent.... 8,532
Change in translation
adjustment.................
-------- ------- ---- ----- ------ -------- ----- -------
BALANCE DECEMBER 31, 1998...... (15,060) -- -- -- -- -- -- --

Contributions from parent.... 963
Effect of separation......... 14,097 17,031 170 22,638
Issuance of preferred
stock--series C............ 2 -- 15,363
Repurchase of common stock... (62)
Issuance of common stock
under stock incentive
plan....................... 6,106 62 (6,168)
Issuance of warrants......... 128
Accretion of preferred
stock...................... (3,233)
Net loss.....................
Change in translation
adjustment.................
-------- ------- ---- ----- ------ -------- ----- -------
BALANCE DECEMBER 31, 1999...... -- 17,031 170 2 -- 41,002 -- (6,168)

Repurchase of common stock... (203) (47) 205
Issuance of common stock for
acquisition................ 1,376 14 10,500
Issuance of common stock
under stock incentive
plan....................... 1,418 10 (649)
Deferred compensation related
to grant of stock
options.................... 1,762
Amortization of deferred
compensation...............
Accretion of preferred
stock...................... (18,361)
Net loss.....................
Change in translation
adjustment.................
-------- ------- ---- ----- ------ -------- ----- -------
BALANCE SEPTEMBER 30, 2000
(UNAUDITED).................. $ -- 18,407 $184 2 $ -- $ 36,118 $ (37) $(6,612)
======== ======= ==== ===== ====== ======== ===== =======

ACCUMULATED TOTAL
OTHER STOCKHOLDERS'
DEFERRED RETAINED COMPREHENSIVE EQUITY
COMPENSATION EARNINGS INCOME (DEFICIT)
------------- --------- -------------- -------------
<S> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1996...... $ -- $ -- $ 66 $(12,252)
Net loss..................... (9,661)
Contributions from parent.... 8,017
Change in translation
adjustment................. 1,777 1,777
------- --------- ------- --------
BALANCE DECEMBER 31, 1997...... -- -- 1,843 (12,119)
Net loss..................... (9,630)
Contributions from parent.... 8,532
Change in translation
adjustment................. 295 295
------- --------- ------- --------
BALANCE DECEMBER 31, 1998...... -- -- 2,138 (12,922)
Contributions from parent.... 963
Effect of separation......... (36,905) --
Issuance of preferred
stock--series C............ 15,363
Repurchase of common stock... (62)
Issuance of common stock
under stock incentive
plan....................... --
Issuance of warrants......... 128
Accretion of preferred
stock...................... (3,233)
Net loss..................... (20,413) (20,413)
Change in translation
adjustment................. (610) (610)
------- --------- ------- --------
BALANCE DECEMBER 31, 1999...... -- (57,318) 1,528 (20,786)
Repurchase of common stock... (45)
Issuance of common stock for
acquisition................ 10,514
Issuance of common stock
under stock incentive
plan....................... 779
Deferred compensation related
to grant of stock
options.................... (1,762) --
Amortization of deferred
compensation............... 1,013 1,013
Accretion of preferred
stock...................... (18,361)
Net loss..................... (43,172) (43,172)
Change in translation
adjustment................. 107 107
------- --------- ------- --------
BALANCE SEPTEMBER 30, 2000
(UNAUDITED).................. $ (749) $(100,490) $ 1,635 $(69,951)
======= ========= ======= ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

F-5
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------ -------------------
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flow provided by (used in) operating activities:
Net loss.............................................. $(9,661) $(9,630) $(20,413) $(11,188) $(43,172)
Adjustments to reconcile net loss to cash flow
provided by (used in) operating activities:
Depreciation and amortization......................... 756 1,061 1,088 696 3,078
Purchased research and development.................... -- -- -- -- 5,200
Stock based compensation.............................. -- -- 33 -- 4,586
Allowance for doubtful accounts....................... (39) 117 67 201 647
Deferred income taxes................................. 79 (229) (27) (4) 15
Changes in assets and liabilities:
Accounts receivable................................. (463) (885) 429 (1,006) (6,100)
Other receivables................................... (142) (210) (49) 212 (417)
Prepaid expenses and other current assets........... 171 (97) (433) (540) (1,316)
Accounts payable.................................... (36) (142) 3,784 765 (858)
Accrued expenses.................................... (266) 129 2,577 1,728 1,285
Associated company payables, net.................... 1,948 (1,223) 3,119 2,051 (176)
Deferred revenue.................................... 311 1,269 (470) 235 1,971
Other............................................... (34) (198) (138) (69) 259
------- ------- -------- ------- --------
Net cash provided by (used in) operating
activities.................................... (7,376) (10,038) (10,433) (6,919) (34,998)
------- ------- -------- ------- --------
Cash flow used in investing activities:
Capital expenditures.................................. (735) (567) (1,825) (753) (5,418)
Capitalized software development costs................ (485) (436) (422) (315) (476)
Acquisition of business............................... -- -- (180) (110) (5,886)
------- ------- -------- ------- --------
Net cash used in investing activities........... (1,220) (1,003) (2,427) (1,178) (11,780)
------- ------- -------- ------- --------
Cash flow provided by financing activities:
Borrowing (repayment) of short-term debt, net......... (46) 2,419 58 227 (129)
Borrowing under capital leases, net................... -- -- 693 -- 1,215
Issuance of common stock.............................. -- -- -- 10 734
Repurchase of common stock............................ -- -- (62) -- --
Issuance of preferred stock, net...................... -- -- 20,518 9,950 41,874
Capital contributions by Frontec AB................... 8,017 8,532 -- -- --
------- ------- -------- ------- --------
Net cash provided by financing activities....... 7,971 10,951 21,207 10,187 43,694
------- ------- -------- ------- --------
Effect of exchange rate on cash flows................... 1,677 265 (628) (704) 415
Net increase in cash.................................... 1,052 175 7,719 1,386 (2,669)

Cash at beginning of period............................. 370 1,422 1,597 1,597 9,316
------- ------- -------- ------- --------
Cash at end of period................................... $ 1,422 $ 1,597 $ 9,316 $ 2,983 $ 6,647
======= ======= ======== ======= ========
Supplemental cash flow information:
Cash paid for interest................................ $ 59 $ 208 $ 180 $ 109 $ 383
======= ======= ======== ======= ========
Cash paid for taxes................................... $ 89 $ 177 $ 46 $ 38 $ 39
======= ======= ======== ======= ========
Noncash financing activities:
Conversion of associated company payables to Series C
convertible preferred stock......................... $ -- $ -- $ 15,363 $14,685 $ --
======= ======= ======== ======= ========
Noncash capital contributions by parent............... $ -- $ -- $ 963 $ 948 $ --
======= ======= ======== ======= ========
Deferred stock compensation........................... $ -- $ -- $ 128 $ -- $ --
======= ======= ======== ======= ========
Issuance of common stock for acquisition.............. $ -- $ -- $ -- $ -- $ 10,514
======= ======= ======== ======= ========
Common stock issued for notes receivable.............. $ -- $ -- $ 6,168 $ -- $ 444
======= ======= ======== ======= ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

F-6
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

1. ORGANIZATION

Viewlocity, Inc. (referred to hereafter as "we," "Viewlocity" or the
"Company"), a Delaware corporation, provides e-business software and services
that enable integration and synchronization of web-enabled trading communities.
Viewlocity's software for trading communities provides application integration,
business-to-business integration and trading community management. Viewlocity
was incorporated on February 22, 1999 as a wholly owned subsidiary of Frontec
AB, a Swedish company publicly traded on the OM Stockholm Exchange (formerly the
Stockholm Stock Exchange). Viewlocity was formed to be the new parent of Frontec
AB's AMTrix software division.

On February 23, 1999, Frontec AB transferred, at historical cost, the AMTrix
business to Viewlocity through a series of asset contribution agreements. The
assets transferred consisted of all of the assets relating to the AMTrix
business, including customer relationships, license agreements with customers,
accounts receivable, intellectual property and employees. Viewlocity also
assumed all of the liabilities and obligations relating to the AMTrix business,
including intercompany payables owed to Frontec AB and its other subsidiaries
(the "Frontec AB Liabilities"). Shortly after the transfer, substantially all of
the Frontec AB Liabilities were converted into equity of Viewlocity.

Since our separation from Frontec AB, we have been further capitalized by
the issuance of several series of convertible preferred stock to third party
investors. These transactions are described further in Note 14 to the
consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

We have ten wholly owned subsidiaries that operate in seven foreign
countries. The consolidated financial statements include the accounts of
Viewlocity and all of its subsidiaries. All material intercompany balances and
transactions have been eliminated in consolidation.

BASIS OF PRESENTATION

The consolidated financial statements have been prepared using Frontec AB's
historical basis in the assets and liabilities and historical results of
operations and cash flows relating to the AMTrix business, since there was no
change in control at the date of separation. These financial statements
generally reflect our financial position, results of operations and cash flows
as if we were a separate entity for all periods presented.

Certain costs and expenses presented in these financial statements have been
allocated primarily based on headcount or management estimates, depending on the
nature of the expense. The primary expenses that were allocated related to
corporate administrative functions, including administrative, legal, accounting
and other corporate overheads. We believe that these allocations are reasonable,
however, the financial information included herein may not necessarily reflect
our financial position, results of operations and cash flows in the future, or
what they would have been had we been a separate entity during each of the
periods presented.

F-7
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Data and information as of September 30, 1999 and 2000 and for the nine
months ended September 30, 1999 and 2000 are unaudited. In the opinion of our
management, the unaudited interim consolidated financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the financial position and results of operations for those
periods. The nine month results are not necessarily indicative of the expected
results for the year ending December 31, 2000.

USE OF ESTIMATES AND SIGNIFICANT RISKS

The preparation of financial statements in conformity with generally
accepted accounting principles requires our management to make estimates and
assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting periods. The most significant
estimates used in these financial statements include the valuation of
capitalized software development costs, lives of intangible assets, taxes, the
allowance for doubtful accounts receivable and the allocation of certain costs
and expenses from Frontec AB. Changes in the facts or circumstances underlying
these estimates could result in material changes and actual results could differ
from these estimates.

We have a history of recurring losses and negative cash flows from
operations. Historically, we have funded our cash needs by capital contributions
from Frontec AB and private equity financings. We believe that continued private
financings or an initial public offering of common stock and the successful
commercialization and market acceptance of our software and services will
generate sources of liquidity and adequate capital to meet our annual cash
needs. If we are unable to obtain additional financing when needed, we may be
required to reduce the scope of our planned product development and marketing
efforts, which may harm our business and operating results.

Our operations are subject to certain risks and uncertainties, including,
among others, our limited operating history as an independent company, our
history of unprofitability, our inability to fund our operations with cash
generated from our business, operating results that are often volatile and
difficult to predict, our dependence on one of our product offerings, our
ability to develop new products and the market's acceptance of those new
products, the potential for a significant decline in our stock price, a highly
competitive marketplace, our reliance on strategic relationships to market our
products, our use of technology licensed from third parties, errors in our
products, risks associated with significant international operations, lengthy
sales cycles, the need to manage our growth, our acquisition strategy and the
integration of our acquisitions, and the need to retain key personnel. Any of
these factors could impair our ability to expand our operations or to generate
significant revenues from those markets in which we operate. As a result of the
above and other factors, our earnings and financial condition can vary
significantly from quarter-to-quarter and year-to-year.

F-8
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION

Our revenue is generated primarily by licensing our software systems and
providing support and professional services for those systems. We account for
our software and support revenues in accordance with Statements of Position
issued by the American Institute of Certified Public Accountants. In
October 1997, the American Institute of Certified Public Accountants issued
Statement of Position 97-2, "Software Revenue Recognition." SOP 97-2 provides
guidance on applying generally accepted accounting principles in recognizing
revenue on software transactions, and is effective for transactions entered into
in fiscal years beginning after December 31, 1997. We adopted SOP 97-2 on
January 1, 1998, and the adoption did not have a material impact on our
consolidated financial statements. Prior to January 1, 1998, we accounted for
software transactions under Statement of Position 91-1, the previous guidance on
revenue recognition for software transactions by the American Institute of
Certified Public Accountants.

Our software is generally licensed for a perpetual term by charging a
license fee that grants the customer the right to use the software system that
is currently available at the time the agreement is reached. License fees for
software are recognized as revenue when there is persuasive evidence of an
agreement, the software has been shipped, collectibility is probable, payment is
due within one year and we have no further significant obligations. When payment
terms are in excess of one year, we recognize the license fee as the payments
become due. When licenses are sold through a reseller, we recognize revenue once
the software system is shipped to the reseller's end-user customer and all other
revenue recognition criteria have been met. When uncertainties exist relating to
any of these criteria, the revenue is recognized when the uncertainty is
resolved or cash is received.

We provide telephone support and maintenance for our software systems under
support agreements that are contracted for separately from our license fees.
Generally, these agreements provide unspecified software upgrades and technical
support over a specified term, which is typically twelve months and renewable on
an annual basis. Support contracts are usually paid in advance, and revenues
from these contracts are recognized ratably over the term of the contract.

We also provide professional services, including systems implementation and
integration assistance, consulting and training, which are available under
services agreements and contracted for separately from our license fees. These
services are generally provided on a time and materials basis and, in some
circumstances, under fixed price arrangements. Revenue from time and materials
arrangements is recognized as the services are performed and the customer has a
contractual obligation to pay, provided the fee is non-refundable. Under fixed
price arrangements, revenue is recognized on the basis of the estimated
percentage of completion of the service provided. Changes in estimates to
complete and losses, if any, are recognized in the period they are determined.

GOODWILL AND OTHER INTANGIBLE ASSETS

Identifiable intangible assets and goodwill are recorded and amortized over
their estimated economic lives or periods of future benefit. The lives
established for these assets are based on many factors, and are subject to
change because of the nature of our operations. This is particularly true for
goodwill, which reflects value attributable to the going-concern nature of
acquired businesses, the stability of their operations, market presence and
reputation. Accordingly, we evaluate the continued appropriateness of

F-9
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
these estimated lives and recoverability of the carrying value of such assets
based upon the latest available economic factors and circumstances.

We amortize goodwill on a straight-line basis over an estimated life of up
to 15 years for goodwill related to service company acquisitions and up to ten
years for goodwill related to software company acquisitions. We believe these
lives appropriately reflect the current economic circumstances for such
businesses and the related period of future benefit. Other identifiable
intangible assets are amortized on a straight-line basis over their estimated
period of future benefit ranging from 2 to 15 years.

IMPAIRMENT OF LONG-LIVED ASSETS

We periodically evaluate the recoverability of our long-lived assets,
including intangible assets. This evaluation consists of a comparison of the
estimated future cash flows from the related operations with the then
corresponding carrying values of those assets. If the expected future cash flows
exceed the carrying value of those assets, no impairment is recognized. If there
is an impairment of value, it is recognized as an expense in the period it is
determined. A rate considered to be commensurate with the risk involved is used
to discount the cash flows for any recognized impairment.

SOFTWARE DEVELOPMENT COSTS

We capitalize certain costs incurred for the development of computer
software that we intend to license to customers. We expense all research and
development costs as they are incurred before a product becomes technologically
feasible and after a product is generally available. Between the time a product
is considered technologically feasible and when it is generally available, we
capitalize the costs associated with the development.

We begin amortizing capitalized software development costs once a product is
generally available. Amortization is provided at the greater of the amount
computed using (i) the ratio that current revenues for a product bear to the
total of the current and anticipated future revenues of that product or (ii) on
a straight-line basis over the estimated useful life of the related product,
generally two to five years. As of each balance sheet date, we perform a net
realizable value analysis and the amount by which unamortized software
development costs exceeds the net realizable value, if any, is recognized as
expense in the period it is determined.

CASH AND CASH EQUIVALENTS

We consider all highly liquid investments with original maturities of three
months or less to be cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost less accumulated depreciation.
Leased property or equipment meeting certain criteria is capitalized and the
related capital lease obligation is recorded as a liability. Depreciation is
provided on a straight-line basis over the estimated useful life of the related
asset, except for leasehold improvements, which are depreciated over the life of
the related lease. Gains and losses on dispositions of property and equipment
are determined based on the difference between the cash

F-10
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
plus the fair value of any assets received (in the case of a non-monetary
transaction) less the net book value of the asset disposed of at the date of
disposition.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

The functional currency for each of our foreign subsidiaries is generally
the local currency of the country in which they operate. The assets and
liabilities of these foreign operations were translated into U.S. dollars at the
exchange rate in effect at the balance sheet date. Income statement items were
translated into U.S. dollars at the average exchange rate that prevailed during
the reporting period. The net gains and losses that result from this translation
are reported as foreign currency translation adjustments as a component of
comprehensive income and are not included in the results of operations.
Transaction gains and losses are included in the results of operations in the
period that they occur and are not significant in any of the periods presented.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of our current assets and liabilities approximate fair
value because of the short maturity of these instruments. The carrying amount of
our short-term debt approximates fair value based on floating interest rates.
The carrying amount of our capital lease obligations approximate fair value
based on insignificant differences between the rates being charged and market
rates.

INCOME TAXES

Deferred tax assets and liabilities are recognized for the estimated future
tax consequences of temporary differences and income tax credits. Temporary
differences are primarily the result of differences between the tax bases of
assets and liabilities and their financial reporting amounts. Deferred tax
assets and liabilities are measured by applying enacted statutory tax rates
applicable to future years in which deferred tax assets or liabilities are
expected to be settled or realized. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.

DIVISIONAL EQUITY (DEFICIT)

Divisional equity (deficit) includes accumulated retained earnings (deficit)
and capital contributions by Frontec AB.

NET LOSS PER COMMON SHARE

Basic net loss per common share is computed by dividing net loss by the
weighted average number of common shares outstanding for the period. The
weighted average number of common shares outstanding assumes that the 17,031,029
shares issued upon our separation from Frontec AB were outstanding for the
periods prior to the separation. Diluted net loss per common share is computed
using the weighted average number of common shares outstanding and, when
dilutive, potential common shares from options and warrants using the treasury
stock method, and from convertible securities using the as-if converted method.
All potential common shares have been excluded from the computation of the
dilutive net loss per

F-11
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
common share for all periods presented because the effect would have been
antidilutive. Such potential common shares consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 2000
------------ --------------
(IN THOUSANDS)
<S> <C> <C>
Series A convertible preferred stock........... 5,000 5,000
Series B convertible preferred stock warrants
outstanding.................................. 3,502 3,502
Series D convertible preferred stock........... 4,900 5,232
Series E convertible preferred stock........... -- 2,004
Outstanding options............................ 2,391 3,944
Outstanding warrants........................... 316 316
------ ------
Total.......................................... 16,109 19,998
</TABLE>

Additionally, our 2,000 shares of Series C convertible preferred stock is
convertible into common shares only upon the consummation of a qualifying
initial public offering. Based on the assumed offering price of $13.00 per
share, the Series C convertible preferred stock would convert into 1,576,923
shares of our common stock.

PRO FORMA NET LOSS PER COMMON SHARE

The weighted average shares used in computing the pro forma basic and
diluted net loss per share has been calculated assuming the conversion of all
shares of convertible preferred stock outstanding as of September 30, 2000 into
common stock as if the shares had converted immediately upon issuance.
Accordingly, accretion to redemption value is not included in the calculation of
pro forma basic and diluted net loss per share. A reconciliation between the
weighted average shares used in the computation of basic and diluted net loss
per share and pro forma weighted average net loss per share is outlined below:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1999 SEPTEMBER 30, 2000
----------------- -------------------
<S> <C> <C>
Basic and diluted weighted average common
shares outstanding........................ 17,031 16,098
Adjustment to reflect the conversion of
preferred stock outstanding at
September 30, 2000:
Conversion of Series A preferred
stock................................. 3,849 5,000
Conversion of Series C preferred
stock................................. 1,275 1,577
Conversion of Series D preferred
stock................................. 13 5,123
Conversion of Series E preferred
stock................................. -- 1,037
------- -------
Pro forma basic and diluted weighted average
common shares outstanding................. 22,168 28,835
======= =======
</TABLE>

F-12
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PRO FORMA STOCKHOLDERS' EQUITY (UNAUDITED)

Stockholders' equity has been presented on a pro forma basis to reflect the
issuance of an assumed aggregate of 5,043,956 shares of our Series B convertible
preferred stock upon the cashless exercise of outstanding warrants, the
conversion of all the outstanding shares of our Series A, B, D and E convertible
preferred stock into an aggregate of 14,757,844 shares of our common stock, and
the conversion of all outstanding shares of our Series C convertible preferred
stock into an assumed 1,576,923 shares of our common stock, each of which will
occur immediately upon the completion of our initial public offering, as if the
exercise and conversion had occurred on September 30, 2000. All references to
pro forma information in the notes to the financial statements are unaudited.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as
amended by SFAS No. 137, is effective for all quarters of all fiscal years
beginning after June 15, 2000. Currently, we do no utilize derivative financial
instruments. Therefore, the adoption of SFAS No. 133 is not expected to have a
material impact on our results of operations or financial position.

In December 1999, the Securities and Exchange Commission ("SEC") issued SAB
No. 101, "Revenue Recognition in Financial Statements." SAB No. 101 requires the
following four basic criteria to be met before companies can record revenue:
(a) persuasive evidence that an arrangement exists; (b) delivery has occurred or
services have been rendered; (c) the seller's price to the buyer is fixed or
determinable; and (d) collectibility is reasonably assured. Many of the examples
in SAB No. 101 address situations that give rise to the potential for recording
revenue prematurely. They include transactions subject to uncertainties
regarding customer acceptance, including rights to refunds and extended payment
terms, or require continuing involvement by the seller.

F-13
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

3. ACCOUNTS RECEIVABLE

Accounts receivable consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- SEPTEMBER 30,
1998 1999 2000
-------- -------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Billed receivables............................ $5,442 $4,994 $10,893
Unbilled receivables.......................... 37 56 1,159
Less: allowance for doubtful accounts......... (156) (223) (889)
------ ------ -------
$5,323 $4,827 $11,163
====== ====== =======
</TABLE>

4. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31,
USEFUL LIFE ------------------- SEPTEMBER 30,
(YEARS) 1998 1999 2000
------------ -------- -------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Computer equipment and software... 2-5 $1,880 $ 3,010 $ 6,560
Furniture, fixtures and office
equipment....................... 4-7 1,310 668 1,956
Leasehold improvements and
other........................... 2-10 449 483 1,338
------ ------- -------
3,639 4,161 9,854
Less: accumulated depreciation.... (2,224) (1,778) (3,067)
------ ------- -------
$1,415 $ 2,383 $ 6,787
====== ======= =======
</TABLE>

Depreciation expense was $756,000, $866,000, $857,000 and $1.3 million in
1997, 1998, 1999 and the nine months ended September 30, 2000, respectively.

5. CAPITALIZED SOFTWARE DEVELOPMENT

Capitalized software development consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- SEPTEMBER 30,
1998 1999 2000
-------- -------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Internally developed software.................. $ 921 $1,343 $1,646
Purchased software............................. -- -- 4,987
Less: accumulated amortization................. (196) (403) (1,063)
----- ------ ------
$ 725 $ 940 $5,570
===== ====== ======
</TABLE>

We spent a total of $3.6 million, $3.2 million and $4.5 million in 1997,
1998 and 1999, respectively, on research and development activities. Of this
amount, we capitalized software development costs of

F-14
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

5. CAPITALIZED SOFTWARE DEVELOPMENT (CONTINUED)
$485,000, $436,000, and $422,000 in 1997, 1998 and 1999, respectively. No
amortization expense was charged in 1997, and $196,000 and $225,000 was charged
in 1998 and 1999, respectively.

6. SHORT-TERM DEBT

Short-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- SEPTEMBER 30,
1998 1999 2000
-------- -------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Note payable in Sweden........................ $2,468 $ -- $ --
Note payable in the U.S....................... -- 2,490 2,490
Line of credit in Singapore................... 182 180 86
Other......................................... -- 38 78
------ ------ ------
$2,650 $2,708 $2,654
====== ====== ======
</TABLE>

In 1999, we entered into a $2.5 million loan agreement with a bank in the
U.S., in order to repay the note payable in Sweden that became due in
November 1999. Interest is payable at the bank's prime rate plus 1%. The loan is
collateralized by substantially all of our assets. The agreement contains
restrictive covenants that require us to maintain, among other things, a ratio
of debt to tangible net worth of 1 to 1. We must also maintain a ratio of cash
to debt of 2 to 1. We expect to repay all outstanding balances under this
agreement within one year from the balance sheet date.

In connection with this loan agreement, we issued the bank a warrant to
purchase 44,217 shares of our common stock at $5.88 per share. The warrant may
be exercised in whole or in part at any time on or before November 26, 2006. The
fair value of the warrant, as determined using the Black-Scholes valuation
model, was $29,000, which was recorded as an expense in 1999.

We maintain an additional line of credit with a bank in Singapore providing
borrowings of up to $200,000 for working capital purposes. Interest is payable
at the bank's prime rate plus 1%. The line of credit is collateralized by a
corporate guarantee by Frontec AB and has no significant covenants. We expect to
repay all outstanding balances under this agreement on or before December 31,
2000.

7. COMMITMENTS AND CONTINGENCIES

We are subject to legal proceedings and claims that arise in the normal
course of business. While the outcome of these matters cannot be predicted with
certainty, our management does not believe the outcome of any of these legal
matters will have a material adverse effect on our results of operations or
financial position.

F-15
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

8. LEASE COMMITMENTS

In November 1999, we entered into an equipment lease facility with a leasing
company for the purchase of equipment and software. Under this agreement, we can
enter into draws against the facility up to a total of $3.2 million. The
interest rate under the lease is fixed at 12.55%. Principal and interest is
payable under each draw in 48 monthly installments. At lease expiration, we can
purchase the equipment at 5% of the original cost.

In connection with this lease facility, we issued the lessor a warrant to
purchase 75,000 shares of our common stock at $2.00 per share. The warrant may
be exercised in whole or in part at any time on or before November 12, 2004. The
fair value of the warrant, as determined using the Black-Scholes valuation
model, was $98,000, which will be amortized over the term of the lease facility.

We lease office space, automobiles and certain other items under operating
leases expiring through 2009. Rental expense for 1997, 1998 and 1999 was
$906,000, $800,000 and $875,000, respectively. As of December 31, 1999, future
minimum lease payments under our operating and capital leases are as follows:

<TABLE>
<CAPTION>
OPERATING CAPITAL
--------- --------
(IN THOUSANDS)
<S> <C> <C>
2000..................................................... $1,292 $ 184
2001..................................................... 1,254 217
2002..................................................... 968 221
2003..................................................... 722 302
2004..................................................... 742 10
Thereafter............................................... 3,906 --
------ -----
$8,884 934
Less: amounts representing interest...................... (241)
-----
693
Less: current portion.................................... (104)
-----
Capital lease obligation, net of current portion......... $ 589
=====
</TABLE>

9. ACQUISITIONS

ACQUISITION IN GERMANY

On May 18, 1999, we completed the acquisition of a services company in
Germany for approximately $180,000. The acquisition has been accounted for as a
purchase and accordingly, the purchase price has been allocated to the assets
acquired and the liabilities assumed based on their estimated fair values at the
date of acquisition. The results of operations have been included with ours
beginning on May 1, 1999, the effective date of the acquisition. The excess
consideration above the fair value of net assets acquired of approximately
$110,000 has been recorded as goodwill or other intangible assets. Supplemental
pro forma information is not presented since this acquisition was not material
to our consolidated results of operations.

F-16
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

9. ACQUISITIONS (CONTINUED)
ACQUISITION OF NEXSTEP

On February 3, 2000, we completed the acquisition of Nexstep, Inc., a
software development enterprise based in Plano, Texas, which focused on the
development of supply-chain visibility and logistics software products for
Internet retail organizations. Nexstep currently serves as a research and
development center and Nexstep's employees continue to be based in Plano, Texas.
The aggregate consideration of approximately $10.1 million was paid by the
issuance of 1,001,000 shares of our common stock and cash of approximately
$4.2 million. Our board of directors determined the fair value of the common
stock issued as part of the consideration to be $5.88 per share based on recent
sales of our convertible preferred stock for cash to third-party investors. The
Nexstep acquisition has been accounted for as a purchase, and accordingly, the
purchase price has been allocated to the assets acquired and the liabilities
assumed based on their estimated fair values at the date of acquisition.
Nexstep's results of operations have been included with ours beginning on
January 1, 2000, the effective date of the acquisition for accounting purposes.
The excess consideration above the fair value of the net tangible assets
acquired was approximately $10.0 million. We have allocated the intangible
assets as follows (in thousands):

Management is responsible for estimating the fair value of in-process
research and development, or IPR&D. We determined the value of the IPR&D based
on the income approach valuation method by estimating the present value of the
projected net cash flows to be generated by the in-process products. To
determine the projected net cash flows, revenue, expenses, and other cash flow
items associated with the commercialization of the in-process products were
estimated for the period from 2000 though 2006. Strong revenue growth was
projected through 2002; thereafter, revenue was expected to increase moderately
through 2005 and then decline sharply in 2006 as other new products are expected
to be introduced. The projected net cash flows were then discounted to present
value at 30%, a rate of return that considers the relative risk of achieving the
projected cash flows and the time value of money. Finally, a stage-of-
completion factor was applied to the discounted cash flows. Nexstep's historical
revenues were generated by providing professional services. At the date of
acquisition, Nexstep's products were neither complete nor being marketed.
Consistent with our policy for accounting for costs to develop our software,
these products are not capitalizable under SFAS No. 86, "Accounting for the
Costs of Computer Software to be Sold, Leased or Otherwise Marketed" and have no
alternative future use other than in research and development. We anticipate
that the IPR&D will be successfully developed. The Enterprise Application
Architecture and certain of the application components are currently being
integrated with products that we were developing prior to the acquisition. For
pro forma information related to this acquisition, see the unaudited pro forma
financial statements elsewhere in this prospectus.

F-17
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

9. ACQUISITIONS (CONTINUED)
ACQUISITION OF EDT

On June 21, 2000, we completed the acquisition of Electronic Data Transfer,
SA, or EDT, a reseller of our AMTrix product based in Grenoble, France. We
acquired EDT to enhance our sales, marketing, services and support organization
in Europe and will continue to operate EDT as a separate subsidiary. The
purchase price for the acquisition of EDT was approximately $2.3 million,
including $1.0 million in cash, approximately $200,000 of acquisition related
expenses and a maximum of 91,370 shares of our common stock, valued at $1.1
million at the date of acquisition. We paid $500,000 of the cash consideration
at closing and will pay the remaining $500,000 on December 31, 2000. We
calculated a value of $1.1 million for the common stock based on the maximum
number of shares issuable multiplied by the fair value of our common stock at
the date of acquisition, which was determined to be $12.34 per share based on
recent sales of our convertible preferred stock for cash to third-party
investors. The ultimate number of shares of common stock issued on December 31,
2000 and December 31, 2001 will be determined by the value of our common stock
during December 2000 and December 2001. We have accounted for the $1.0 million
in cash and 91,370 shares of our common stock as purchase price consideration.

In addition to the purchase price consideration, based upon the value of our
common stock during December 2000 and December 2001, we will issue a maximum of
415,113 additional shares of common stock to stockholders of EDT on December 31,
2000 and December 31, 2001 as employee compensation. This issuance is contingent
upon the continued employment and services of these stockholders. The maximum
value of our common stock issuable as employee compensation under this agreement
is approximately $6.4 million. We will record this contingent consideration as
compensation expense over the employment and service period. We have accounted
for the EDT acquisition as a purchase, and accordingly, the purchase price has
been allocated to the assets acquired and liabilities assumed based on their
estimated fair values at the date of the acquisition. EDT's results of
operations have been included with ours beginning on June 1, 2000, the effective
date of acquisition for accounting purposes. The excess consideration above the
fair value of the net tangible assets acquired was approximately $2.1 million.
We have allocated the intangible assets as follows (in thousands):

Supplemental pro forma information is not presented since this acquisition was
not material to our consolidated results of operations.

ACQUISITION OF SC21

F-18
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

9. ACQUISITIONS (CONTINUED)
companies. SC21 currently serves as a research and development center and SC21's
employees continue to be based in Singapore. The purchase price for the
acquisition of SC21 was approximately $7.9 million, including $3.0 million in
cash, related expenses of approximately $300,000 and a maximum of 375,000 shares
of our common stock, valued at $4.6 million at the date of acquisition. We paid
$1.0 million of the cash consideration at closing and will pay the remaining
$2.0 million on December 31, 2000. We calculated a value of $4.6 million for the
common stock based on the maximum number of shares issuable multiplied by the
fair value of our common stock at the date of acquisition, which was determined
to be $12.34 per share based on recent sales of our convertible preferred stock
for cash to third-party investors. We have accounted for the $3.0 million in
cash and 375,000 shares of our common stock as purchase price consideration.

In addition to the purchase price consideration, we will pay $1.0 million in
cash and issue 112,500 shares of our common stock to Robert de Souza, Salem Bin
Mohamed Ibrahim and Teo Keng Leng, stockholders of SC21, on each of December 31,
2000 and December 31, 2001. These payments and stock issuances are contingent
upon the continued employment and services of these stockholders. We will record
this contingent consideration as compensation expense over the employment and
service period. We have accounted for the SC21 acquisition as a purchase, and
accordingly, the purchase price has been allocated to the assets acquired and
liabilities assumed based on their estimated fair values at the date of the
acquisition. SC21's results of operations have been included with ours beginning
on July 1, 2000, the effective date of acquisition for accounting purposes. The
excess consideration above the fair value of the net tangible assets acquired
was approximately $8.8 million. We have allocated the intangible assets as
follows (in thousands):

For supplemental pro forma information related to this acquisition, see the
Unaudited Pro Forma Financial Statements elsewhere in this prospectus.

10. INCOME TAXES

Historically, certain of our operations have, in effect, been included in
the consolidated foreign income tax returns filed by Frontec AB. Companies in
Sweden are assessed income taxes individually and not on a consolidated or group
basis. However, Swedish income tax rules permit losses incurred by other
companies within a group to be distributed through the use of annual group
contributions. For tax purposes, these contributions are considered deductible
by the paying corporation and income to the receiving corporation. Effectively,
these contributions have transferred certain of our net operating loss
carryforwards at their full value to Frontec AB. These contributions have been
reflected in our financial statements as capital rather than income transactions
and have been included in divisional equity (deficit).

F-19
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

10. INCOME TAXES (CONTINUED)

We had no Federal or state income tax expense during any of the periods
presented. The significant components of foreign income tax expense (benefit)
are as follows:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
------------------------------------ ----------------------
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Current............................. $ 88 $ 176 $ 177 $ 101 $ 111
Deferred............................ 157 (221) (83) -- 90
---- ----- ----- ----- -----
Total............................... $245 $ (45) $ 94 $ 101 $ 201
==== ===== ===== ===== =====
</TABLE>

A reconciliation of the provision (benefit) for income taxes to the amount
computed by applying the statutory federal income tax rate to loss before income
taxes is as follows:

F-20
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

10. INCOME TAXES (CONTINUED)
Temporary differences between the financial statement carrying amounts and
tax bases of assets and liabilities that give rise to significant portions of
the net deferred tax liability relate to the following:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
------------------- --------------
1998 1999 2000
-------- -------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Deferred tax assets:
U.S. net operating loss carryforwards.... $ 3,034 $ 8,285 $ 16,353
Foreign net operating loss
carryforwards.......................... -- 3,015 7,829
Deferred tax asset valuation allowance... (3,034) (11,264) (24,182)
Other.................................... -- 38 21
-------- -------- --------
Total deferred tax assets.................. -- 74 21

Deferred tax liabilities:
Capitalized software..................... (203) (263) (295)
Other.................................... (148) (135) (65)
-------- -------- --------
Total deferred tax liabilities............. (351) (398) (360)

Net deferred tax liabilities............... $ (351) $ (324) $ (339)
======== ======== ========
</TABLE>

As of December 31, 1999, we had net operating loss carryforwards in the U.S.
that expire at various times from 2012 through 2019 totaling approximately
$21.9 million and net operating loss carryforwards from foreign operations
totaling approximately $9.6 million. As of September 30, 2000, we had net
operating loss carryforwards in the U.S. that expire at various times from 2012
through 2020 totaling approximately $43.1 million and net operating loss
carryforwards from foreign operations totaling approximately $25.0 million.
Realization of the resulting deferred tax assets is dependent on future taxable
income. We have recorded valuation allowances of $11.3 million as of
December 31, 1999 and $24.1 million as of September 30, 2000 related to these
deferred tax assets because we believe that it is unlikely that such assets will
be realized, however, ultimate realization could be impacted by market
conditions or other variables not known at this time. We will continue to assess
the valuation allowance and to the extent it is determined that such allowance
is no longer required, the tax benefit of the remaining net deferred tax assets
may be recognized in the future.

11. MAJOR CUSTOMERS AND SEGMENT INFORMATION

We sell our software and services to a variety of customers, and no
individual customer accounted for more than 10% of our revenues during 1997,
1998 or 1999.

Our primary form of internal reporting is aligned with the offering of our
software and services. Therefore, we believe that we operate in one segment. We
do, however, derive a substantial portion of our revenue from our foreign
operations. The following table presents revenue by geographic region based on

F-21
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

11. MAJOR CUSTOMERS AND SEGMENT INFORMATION (CONTINUED)
country of invoice origin and identifiable and long-lived assets by geographic
region based on the location of the assets.

<TABLE>
<CAPTION>
U.S. EUROPE ASIA/PACIFIC ELIMINATION TOTAL
-------- -------- ------------ ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1997
Revenue to external customers.......... $ 1,861 $ 8,214 $1,619 $ -- $11,694
Total assets........................... 4,553 23,584 2,296 (21,817) 8,616
Long-lived assets...................... 684 1,252 232 -- 2,168

Year ended December 31, 1998
Revenue to external customers.......... $ 3,745 $ 8,295 $1,624 $ -- $13,664
Total assets........................... 3,644 28,737 2,135 (24,618) 9,898
Long-lived assets...................... 437 1,510 193 -- 2,140

Year ended December 31, 1999
Revenue to external customers.......... $ 3,346 $12,647 $3,455 $ -- $19,448
Total assets........................... 39,152 28,391 3,758 (52,191) 19,110
Long-lived assets...................... 1,034 2,079 314 -- 3,427

Nine months ended September 30, 2000
Revenue to external customers.......... $ 8,989 $10,283 $6,766 $ -- $26,038
Total assets........................... 88,571 35,416 17,014 (98,010) 42,991
Long-lived assets...................... 8,399 4,707 8,839 -- 21,945
</TABLE>

12. EMPLOYEE BENEFIT PLANS

RETIREMENT SAVINGS PLANS

We maintain a defined contribution 401(k) profit-sharing plan and trust (the
"401(k) Plan") in the U.S. Most full-time U.S. employees are eligible to
participate in the 401(k) Plan. A participating employee, by electing to defer a
portion of his or her compensation, may make pre-tax contributions to the 401(k)
Plan of a percentage of his or her total compensation. Participant contributions
and earnings are 100% vested at all times. We do not currently contribute to the
401(k) Plan; however, the 401(k) Plan provides us with the opportunity to
contribute if we chose to in the future. We also maintain similar defined
contribution plans for certain of our employees outside the U.S. We pay all
expenses associated with the 401(k) Plan and similar plans, which have been
minimal to date.

EQUITY INCENTIVE PLANS

In connection with our initial capitalization, Frontec AB transferred
5,356,755 shares of its Viewlocity common stock into escrow (the "Escrowed
Shares"). We had the right to repurchase the Escrowed Shares from Frontec AB for
$.02 per share and issue the shares in the form of stock options, restricted
stock or

F-22
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

12. EMPLOYEE BENEFIT PLANS (CONTINUED)
otherwise to employees, directors, officers, consultants and other key persons
who make significant contributions to our welfare.

- incentive stock options that qualify for tax benefits;

- non-qualified stock options;

- restricted stock awards; and

- stock appreciation rights.

The compensation committee of our board of directors administers both plans.

Also on September 2, 1999, we exercised our right to purchase 3,084,066 of
the Escrowed Shares for an aggregate purchase price of $61,681. Certain of our
executive officers purchased Escrowed Shares pursuant to our stock incentive
plan and individualized restricted stock agreements. The purchase price for the
common stock was $2.00 per share, the fair market value at the date of purchase.
The board of directors determined the fair market value of the underlying common
stock on the purchase date based on recent sales of our convertible preferred
stock for cash to third-party investors. Each executive delivered to us a full
recourse promissory note bearing a market rate of interest of 7.1% for the
aggregate purchase price of the stock and entered into a restricted stock
agreement that prohibits transfer of these shares prior to vesting and provides
for forfeiture of any unvested shares upon termination of employment. The shares
purchased generally vest over a four-year period immediately following the
executive's date of hire. The promissory notes become due and payable on the
earlier of (i) December 31, 2001, (ii) twelve months after an initial public
offering of the Company's common stock or (iii) ninety days following the
effective date of termination of employment with the Company. On December 31,
1999, the aggregate amount of these promissory notes, excluding accrued
interest, was $6,168,133, which is reflected on our balance sheet as notes
receivable from stockholders. During the nine months ended September 30, 2000,
an additional $649,000 of full recourse promissory notes were accepted as
payment for issuances of stock under our stock incentive plan and we repurchased
102,652 shares in exchange for the forgiveness of $205,000 in notes receivable
upon the resignation of one of our employees.

On January 1, 2000, we purchased the remaining 2,272,689 Escrowed Shares for
an aggregate purchase price of $45,454. These shares, net of reissuances under
our stock incentive plans during the nine months ended September 30, 2000, are
held in treasury. Treasury stock is held at cost and presented as a reduction of
stockholders' equity. 1,827,498 shares were held in treasury at September 30,
2000.

Options granted under our stock incentive plans generally have exercise
prices equal to the fair value of the underlying common stock at the date of
grant. Options granted to our employees in Sweden are

F-23
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

12. EMPLOYEE BENEFIT PLANS (CONTINUED)
generally exercisable immediately upon grant and expire four years from the date
of grant. All other options generally vest over four years at the rate of 25%
after six months of employment with the remaining vesting at a rate of 1/42 per
month for the remaining 42 months and expire ten years from the date of grant
unless otherwise specified in the option agreement. Our board of directors
determined the fair values of the underlying common stock on the grant dates
based on recent sales of our convertible preferred stock for cash to third party
investors.

The following table summarizes information about stock option transactions
(in thousands, except per share data):

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1999 SEPTEMBER 30, 2000
---------------------- ----------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Shares under option at beginning of
period............................ -- -- 2,392 $2.02
Granted........................... 2,434 $2.02 2,206 $8.01
Exercised......................... -- -- (441) $2.05
Forfeited......................... (42) $2.00 (195) $2.22
----- -----
Shares under option at end of
period............................ 2,392 $2.02 3,962 $5.34
===== =====
Shares under option exercisable at
end of period..................... 1,290 $2.00 1,641 $2.69
===== =====
</TABLE>

Included in the table above are options to purchase an aggregate of 200,000
shares of our common stock granted to four non-employee shareholders and
directors of Frontec AB in connection with our separation. The aggregate fair
value of these options, as determined using the Black-Scholes valuation model,
was $124,000 and was included in the value of our common stock at the date of
the separation. All of these options have been exercised as of September 30,
2000. Also included in the table above are options to purchase 50,000 shares of
our common stock granted to a consultant. The fair value of these options as
determined using the Black-Scholes valuation model was $59,000 which will be
amortized over the term of the consulting agreement.

Certain options granted during the nine months ended September 30, 2000
resulted in deferred stock compensation, as the estimated fair value of the
underlying common stock was greater than the exercise price on the date of
grant. Our board of directors determined the fair value of the underlying common
stock on the grant date based on recent sales of our convertible preferred stock
for cash to third-party investors. The total deferred stock compensation
associated with these options was approximately $1.8 million. This amount is
being amortized over the respective vesting periods of these options, ranging
from two to four years. Approximately $1.0 million was amortized during the nine
months ended September 30, 2000.

F-24
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

12. EMPLOYEE BENEFIT PLANS (CONTINUED)

The following table summarizes information about stock options outstanding
at December 31, 1999 and September 30, 2000 (in thousands, except per share
data):

December 31, 1999

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
---------------------------------------------- ---------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED AVERAGE
RANGE OF EXERCISE PRICES SHARES REMAINING LIFE EXERCISE PRICE SHARES EXERCISE PRICE
------------------------ -------- ---------------- ---------------- -------- ----------------
<S> <C> <C> <C> <C> <C>
$2.00 to $4.00.......... 2,377 6.8 years $2.00 1,290 $2.00
$4.01 to $6.00.......... 15 10.0 years $5.88 --
----- -----
2,392 6.8 years $2.02 1,290 $2.00
===== =====
</TABLE>

September 30, 2000

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
---------------------------------------------- ---------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED AVERAGE
RANGE OF EXERCISE PRICES SHARES REMAINING LIFE EXERCISE PRICE SHARES EXERCISE PRICE
------------------------ -------- ---------------- ---------------- -------- ----------------
<S> <C> <C> <C> <C> <C>
$0.00 to $3.00.......... 2,174 7.2 years $ 1.93 1,371 $ 1.93
$3.01 to $6.00.......... 788 8.9 years $ 5.88 243 $ 5.88
$6.01 and over.......... 1,000 9.6 years $12.34 27 $12.34
----- -----
3,962 8.2 years $ 5.34 1,641 $ 2.69
===== =====
</TABLE>

Pro forma information regarding net loss has been determined as if we had
accounted for employee stock options under the fair value method. The fair value
for these options was estimated at the date of grant using the Black-Scholes
valuation model with the following weighted average assumptions for the year
ended December 31, 1999:

<TABLE>
<S> <C>
Risk free interest rate..................................... 5.7%
Expected dividend yield..................................... 0%
Expected lives (years)...................................... 6.8
Expected volatility......................................... 0%
Weighted average fair value of options granted at fair
market value during the year.............................. $0.82
</TABLE>

F-25
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

12. EMPLOYEE BENEFIT PLANS (CONTINUED)
The total value of the options granted, as calculated using the
Black-Scholes valuation model, is amortized over the vesting periods of the
options. Pro forma information required under SFAS No. 123 is as follows for the
year ended December 31, 1999 (in thousands except per share data):

<S> <C>
Net loss attributable to common stockholders:
As reported........................................... $(23,646)
Pro forma............................................. $(24,469)

Basic and diluted net loss per share:
As reported........................................... $(1.39)
Pro forma............................................. $(1.44)
</TABLE>

13. RELATED PARTY TRANSACTIONS

ALLOCATION OF COSTS

The consolidated financial statements have been prepared using Frontec AB's
historical basis in the assets and liabilities and historical results of
operations relating to the AMTrix product lines. These financial statements
generally reflect the financial position, results of operations and cash flows
of the AMTrix business as if it were a separate entity for all periods
presented. Approximately $1.6 million, $1.2 million and $600,000 of allocated
costs from Frontec AB for 1997, 1998 and 1999, respectively, have been included
in general and administrative expenses. These represent costs that have been
allocated for corporate administrative functions including administrative,
legal, accounting and other corporate overheads. These expenses were primarily
allocated based on headcount or management estimates depending on the nature of
the expense. We believe that the allocations are reasonable, however, the
financial information included herein may not necessarily reflect our financial
position, results of operations and cash flows in the future, or what they would
have been had we been a separate entity during each of the periods presented.

SALES TO RELATED PARTIES

We recognized license revenue totaling $815,000, $730,000 and $638,000 in
1997, 1998 and 1999, respectively, and support revenue totaling $311,000 and
$638,000 in 1998 and 1999, respectively, from Frontec AB as a reseller of our
software products. Frontec AB remains a reseller of our software products and
the terms of this reseller agreement are substantially the same as our other
third-party resellers.

14. EQUITY TRANSACTIONS

ISSUANCE OF COMMON STOCK

On February 23, 1999, Frontec AB contributed the AMTrix business to us in
exchange for 17,031,029 shares of our common stock, which represented all of the
issued and outstanding common stock at that time.

F-26
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

14. EQUITY TRANSACTIONS (CONTINUED)
In connection with our initial capitalization, Frontec AB transferred the
5,356,755 Escrowed Shares, which we had the right to repurchase from Frontec AB
for $.02 per share and issue in the form of stock options, restricted stock or
otherwise to employees, directors, officers, consultants and other key persons
who make significant contributions to our welfare.

Our common stock has voting rights entitling the holders to one vote per
share. The holders of our common stock are entitled to dividends when, as and if
such dividends are declared by our board of directors; however, a majority of
the Series A, Series B and Series D convertible preferred stockholders must
consent to the payment of such dividends.

ISSUANCE OF SERIES C CONVERTIBLE PREFERRED STOCK

In February 1999, our board of directors authorized the issuance of 2,000
shares of Series C convertible preferred stock to Frontec AB in exchange for the
satisfaction and cancellation of substantially all debt owed to Frontec AB or
any of its other subsidiaries at that time, which debt was approximately
$15.4 million. The value of the 2000 shares of Series C convertible preferred
stock was approximately $14.5 million at the date of the exchange.

Except as provided by law, the holder of our Series C convertible preferred
stock has no right to vote on any matter to be voted on by our stockholders. The
Series C convertible preferred stock is convertible into common shares only upon
the consummation of a qualifying initial public offering. Assuming the aggregate
fair market value of our company immediately prior to our initial public
offering is greater than $150 million, our Series C convertible preferred stock
is convertible into common shares based on the calculation of $20.5 million
divided by the initial public offering price per share. Based on an assumed
offering price of $13.00 per share, the Series C convertible preferred stock
would convert into 1,576,923 shares of our common stock. The holder of Series C
convertible preferred stock is entitled to dividends when and if such dividends
are declared by our board of directors; however, a majority of the Series A,
Series B and Series D convertible preferred stockholders must consent to the
payment of such dividends.

ISSUANCE OF MANDATORILY REDEEMABLE, CONVERTIBLE PREFERRED STOCK

In February 1999, our board of directors authorized the issuance of
10,000,000 shares of Series A convertible preferred stock at $1.00 per share.
These shares were issued in a series of two transactions that occurred on
March 12, 1999 and April 9, 1999 resulting in net proceeds of $10.0 million.

In connection with the issuance of the Series A convertible preferred stock,
we issued the purchasers warrants to purchase 7,005,495 shares of Series B
convertible preferred stock at $1.82 per share. These warrants may be exercised
in whole or in part at any time on or before the earlier of March 8, 2004 or the
date on which we consummate a qualifying initial public offering of our common
stock. As of the date of these financial statements, the holders of these
warrants have not exercised their right to purchase shares of Series B
convertible preferred stock.

On December 31, 1999, we completed a private placement of 9,801,020 shares
of Series D convertible preferred stock at $2.94 per share. The proceeds, net of
the placement fee and other expenses, were $25.9 million. Net proceeds of
$15.3 million were not received until January 2000. As such, this

F-27
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

14. EQUITY TRANSACTIONS (CONTINUED)
amount has been recorded as subscription receivables and netted against the
value of the Series D convertible preferred stock on our balance sheet.

In connection with the issuance of the Series D convertible preferred stock,
we issued one of the purchasers a warrant to purchase 196,875 shares of our
common stock at $2.00 per share. This warrant may be exercised in whole or in
part at any time on or before November 12, 2004. As of the date of these
financial statements, the holder of the warrant has not exercised its right to
purchase shares of our common stock.

On March 29, 2000, we completed a private placement of an additional 662,653
shares of Series D convertible preferred stock at $2.94 per share to certain of
our officers and key employes. The proceeds, net of expenses, were
$1.9 million.

On April 18, 2000 and June 22, 2000 we completed private placements of
2,520,261 shares and 1,487,805 shares, respectively, of Series E convertible
preferred stock at $6.17 per share. The proceeds, net of expenses, were
approximately $24.6 million.

The Series A, Series B, Series D and Series E convertible preferred stock
have voting rights entitling the holders to the number of votes per share equal
to the number of shares of common stock into which each share of preferred stock
is then convertible and to vote as a single class. Each share of Series A,
Series B, Series D and Series E convertible preferred stock is convertible into
one-half of a share of our common stock. The holders of Series A, Series B,
Series D and Series E convertible preferred stock are entitled to dividends when
and if such dividends are declared by our board of directors. The Series A,
Series B, Series D and Series E convertible preferred stock is convertible at
any time at the option of the holder, or automatically upon the consummation of
a qualifying initial public offering.

At any time after February 25, 2004, the holders of a majority of the
outstanding shares of Series A, Series B, Series D and Series E convertible
preferred stock, acting together, may request the redemption of all of their
preferred stock in two equal installments. The first installment must be within
120 days of providing notice to the Company with the second installment one year
later. The redemption price would be the greater of the then fair market value
per share or the respective purchase price per share plus accrued but unpaid
dividends, if any. As a result of the mandatory redemption feature on these
series of convertible preferred stock, they have been excluded from
stockholders' equity (deficit). We record periodic accretion under the interest
method for the excess of the redemption value over the carrying value.

F-28
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 2000 IS UNAUDITED)

14. EQUITY TRANSACTIONS (CONTINUED)

The following table summarizes our mandatorily redeemable, convertible
preferred stock transactions through September 30, 2000:

<TABLE>
<CAPTION>
SERIES A SERIES B SERIES D SERIES E
------------------- ------------------- ------------------- -------------------
NUMBER NUMBER NUMBER NUMBER
OF OF OF OF
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT TOTAL
-------- -------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31,
1998........................ -- $ -- -- $ -- -- $ -- -- $ -- $ --

Issuance of Series A
convertible preferred
stock..................... 10,000 9,950 9,950
Issuance of Series D
convertible preferred
stock..................... 9,801 25,904 25,904
Series D convertible
preferred stock
subscription receivable... (15,336) (15,336)
Accretion to redemption
price..................... 3,233 3,233
------ ------- ------ ------ ------ -------- ------ -------- --------
BALANCE AT DECEMBER 31,
1999........................ 10,000 13,183 -- -- 9,801 10,568 -- -- 23,751

Receipt of Series D
convertible preferred
stock subscription
receivable................ 15,336 15,336
Issuance of Series D
convertible preferred
stock..................... 663 1,942 1,942
Issuance of Series E
convertible preferred
stock..................... 4,008 24,596 24,596
Accretion to redemption
price..................... 12,277 6,084 18,361
------ ------- ------ ------ ------ -------- ------ -------- --------
BALANCE AT SEPTEMBER 30,
2000........................ 10,000 $25,460 -- $ -- 10,464 $ 33,930 4,008 $ 24,596 $ 83,986
====== ======= ====== ====== ====== ======== ====== ======== ========
</TABLE>

15. SUBSEQUENT EVENTS

On September 21, 2000, we effected a one-for-two reverse stock split of our
outstanding shares of common stock. All share and per share information included
in these financial statements has been retroactively adjusted to reflect this
reverse stock split.

F-29
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA FINANCIAL INFORMATION

On July 31, 2000, we completed the acquisition of SC21 Pte. Ltd., a software
development enterprise based in Singapore that provides supply web visibility
software and services to small and medium sized companies. The acquisition has
been accounted for as a purchase, and accordingly, the purchase price has been
allocated to the assets acquired and liabilities assumed based on their
estimated fair values at the date of acquisition. SC21's results of operations
have been included with ours beginning on July 1, 2000, the effective date of
the acquisition for accounting purposes.

The pro forma financial information is based on our historical consolidated
financial statements and the historical financial statements of Nexstep and
SC21. The unaudited pro forma statement of operations for the year ended
December 31, 1999 reflects the combination of our historical consolidated
statement of operations with the historical statements of operations of Nexstep
and SC21. The unaudited pro forma statement of operations for the nine months
ended September 30, 2000 reflects the combination of our historical consolidated
statement of operations with the historical statement of operations of SC21 for
the pre-acquisition period from January 1, 2000 through June 30, 2000. Because
Nexstep's effective date of acquisition was January 1, 2000, the unaudited pro
forma results of operations for the nine months ended September 30, 2000 do not
include separate Nexstep financial information as Nexstep is consolidated with
Viewlocity for the nine month period. The pro forma financial information is
based on available information and certain assumptions that management believes
are reasonable. In our opinion, all adjustments have been made that are
necessary to present fairly the pro forma data.

The pro forma financial information is provided for illustrative purposes
only and does not purport to represent what our results of operations or
financial condition would have been had this acquisition in fact occurred on
such date or to project our results of operations for any future period. The pro
forma financial information and accompanying notes should be read in conjunction
with our historical financial statements and the financial statements of Nexstep
and SC21.

F-30
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED
---------------------------------------
DECEMBER 31, 1999
--------------------------------------- PRO FORMA PRO FORMA
VIEWLOCITY NEXSTEP SC21 ADJUSTMENTS CONSOLIDATED
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Licenses................... $ 8,849 $ 8,849
Support.................... 2,991 2,991
Services................... 7,608 $1,242 $ 283 9,133
-------- ------ ----- --------
Total revenue............ 19,448 1,242 283 20,973
-------- ------ ----- --------
Cost of revenue:
Licenses................... 1,024 -- -- 1,024
Support and services....... 10,160 507 177 10,844
-------- ------ ----- --------
Total cost of revenue.... 11,184 507 177 11,868
-------- ------ ----- --------
Gross profit................. 8,264 735 106 9,105
-------- ------ ----- --------
Operating expenses:
Sales and marketing........ 14,580 -- -- 14,580
Research and development... 4,045 501 57 4,603
General and
administrative........... 8,891 282 475 9,648
Stock based compensation... -- -- -- $ 3,184 (1) 3,184
Depreciation and
amortization............. 1,088 -- 66 3,224 (2) 4,378
-------- ------ ----- ------- --------
Total operating
expenses............... 28,604 783 598 6,408 36,393
-------- ------ ----- ------- --------
Operating loss............... (20,340) (48) (492) (6,408) (27,288)
-------- ------ ----- ------- --------
Other income (expense):
Other, net................. (46) -- -- (46)
Interest, net.............. 67 (1) (2) 64
-------- ------ ----- --------
Other income (expense),
net.................... 21 (1) (2) 18
-------- ------ ----- ------- --------
Loss before provision
(benefit) for income
taxes...................... (20,319) (49) (494) (6,408) (27,270)
-------- ------ ----- ------- --------
Provision (benefit) for
income taxes............... 94 -- -- 94
-------- ------ ----- ------- --------
Net loss..................... (20,413) (49) (494) (6,408) (27,364)
Accretion to preferred stock
redemption value........... (3,233) -- -- -- (3,233)
-------- ------ ----- ------- --------
Net loss attributable to
common stockholders........ $(23,646) $ (49) $(494) $(6,408) $(30,597)
-------- ====== ===== ======= --------
Net loss per share:
Basic and diluted.......... $ (1.39) $ (1.66)
======== ========
Weighted average shares
used in computation...... 17,031 1,376 (3) 18,407
======== ======= ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS.

F-31
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------
SEPTEMBER 30, 2000
------------------------- PRO FORMA PRO FORMA
VIEWLOCITY SC21 ADJUSTMENTS CONSOLIDATED
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenue:
Licenses............................. $ 13,913 $ 98 $ 14,011
Support.............................. 3,375 -- 3,375
Services............................. 8,750 14 8,764
-------- ----- --------
Total revenue...................... 26,038 112 26,150
-------- ----- --------
Cost of revenue:
Licenses............................. 1,052 14 1,066
Support and services................. 11,882 4 11,886
-------- ----- --------
Total cost of revenue.............. 12,934 18 12,952
-------- ----- --------
Gross profit........................... 13,104 94 13,198
-------- ----- --------
Operating expenses:
Sales and marketing.................. 25,245 -- 25,245
Research and development............. 11,394 90 11,484
General and administrative........... 6,963 418 7,381
Purchased research and development... 5,200 -- 5,200
Stock based compensation............. 4,586 -- $ 1,592 (1) 6,178
Depreciation and amortization........ 3,078 35 1,171 (2) 4,284
-------- ----- ------- --------
Total operating expenses........... 56,466 543 2,763 59,772
-------- ----- ------- --------
Operating loss......................... (43,362) (449) (2,763) (46,574)
-------- ----- ------- --------
Other income (expense):
Other, net........................... 66 11 77
Interest, net........................ 325 (1) 324
-------- ----- --------
Other income (expense), net........ 391 10 401
-------- ----- ------- --------
Loss before provision (benefit) for
income taxes......................... (42,971) (439) (2,763) (46,173)
-------- ----- ------- --------
Provision (benefit) for income taxes... 201 -- 201
-------- ----- ------- --------
Net loss............................... (43,172) (439) (2,763) (46,374)
Accretion to preferred stock redemption
value................................ (18,361) -- -- (18,361)
-------- ----- ------- --------
Net loss attributable to common
stockholders......................... $(61,533) $(439) $(2,763) $(64,735)
======== ===== ======= ========
Net loss per share:
Basic and diluted.................... $ (3.82) $ (3.93)
======== ========
Weighted average shares used in
computation........................ 16,098 375 (3) 16,473
======== ======= ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS.

F-32
<PAGE>
VIEWLOCITY, INC. AND SUBSIDIAIRES

NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

1. PRO FORMA ADJUSTMENTS

(1) Pro forma adjustment to reflect contingent consideration due to SC21
stockholders. We will pay $1.0 million in cash and issue 112,500 shares of our
common stock to three stockholders of SC21 on each of December 31, 2000 and
December 31, 2001. These payments are contingent upon the continued employment
and services of these stockholders. We will record this contingent
consideration, totaling $4.8 million, over the employment and service period.
For pro forma adjustment purposes, we have assumed a ratable compensation charge
over an 18 month service period.

(2) Pro forma adjustment to amortize the intangible assets related to the
Nexstep and SC21 acquisitions. For the year ended December 31, 1999, we have
reflected amortization expense of $877,000 related to the Nexstep acquisition
and $2.3 million related to the SC21 acquisition. For the nine months ended
September 30, 2000, we have reflected amortization expense of $1.2 million for
SC21's pre-acquisition period. The intangible assets and related useful lives of
the Nexstep and SC21 intangible assets are disclosed in Note 9 of our
consolidated financial statements.

(3) Pro forma adjustment to reflect the issuance of common stock related to
the acquisitions of Nexstep (1,001,000 for the year ended December 31, 1999
only) and SC21 (375,000 for the year ended December 31, 1999 and the nine months
ended September 30, 2000).

F-33
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors
of Viewlocity, Inc. and Subsidiaries:

In our opinion, the accompanying balance sheet and the related statement of
operations, of changes in stockholders' deficit and of cash flows present
fairly, in all material respects, the financial position of Nexstep, Inc. (the
"Company") at December 31, 1999, and the results of its operations and its cash
flows for the period from inception (January 26, 1999) through December 31,
1999, in conformity with accounting principles generally accepted in the United
States. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP

PricewaterhouseCoopers LLP

Atlanta, Georgia
April 4, 2000

F-34
<PAGE>
NEXSTEP, INC.

BALANCE SHEET

DECEMBER 31, 1999

<TABLE>
<CAPTION>
1999
--------
<S> <C>
ASSETS
Cash and cash equivalents................................... $140,919
Accounts receivable, net of allowance for doubtful accounts
of $10,000................................................ 187,814
Prepaid expenses and other current assets................... 1,868
--------
Total current assets................................ 330,601
Property and equipment, net................................. 27,836
--------
Total assets........................................ $358,437
========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.......................................... $ 99,148
Accrued expenses.......................................... 143,996
Note payable to bank...................................... 11,429
Note payable to Viewlocity................................ 150,000
--------
Total current liabilities........................... 404,573
--------
Commitments and contingencies

Stockholders' deficit:
Common stock: no par value; 1,500 shares authorized;
1,500 shares issued and outstanding at December 31,
1999.................................................... 3,000
Accumulated deficit....................................... (49,136)
--------
Total stockholders' deficit......................... (46,136)
--------
Total liabilities and stockholders' deficit......... $358,437
========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-35
<PAGE>
NEXSTEP, INC.

STATEMENT OF OPERATIONS

PERIOD FROM INCEPTION (JANUARY 26, 1999) THROUGH DECEMBER 31, 1999

<TABLE>
<CAPTION>
1999
----------
<S> <C>
Consulting services revenue................................. $1,242,433
Cost of consulting services................................. (507,173)
----------

Gross profit................................................ 735,260

Operating expenses:
Research and development.................................. (501,332)
General and administrative................................ (281,932)
----------

Loss from operations.................................. (48,004)

Interest expense............................................ (1,132)
----------

Net loss.............................................. $ (49,136)
==========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-36
<PAGE>
NEXSTEP, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE PERIOD FROM INCEPTION (JANUARY 26, 1999) THROUGH DECEMBER 31, 1999

<TABLE>
<CAPTION>
COMMON STOCK
-------------------- ACCUMULATED
SHARES PAR VALUE DEFICIT TOTAL
-------- --------- ----------- --------
<S> <C> <C> <C> <C>
Issuance of common stock to founders............... 1,500 $3,000 $ 3,000
Net loss........................................... $(49,136) (49,136)
------ ------ -------- --------
Balance at December 31, 1999....................... 1,500 $3,000 $(49,136) $(46,136)
====== ====== ======== ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-37
<PAGE>
NEXSTEP, INC.

STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM INCEPTION (JANUARY 26, 1999) THROUGH DECEMBER 31, 1999

<TABLE>
<CAPTION>
1999
---------
<S> <C>
Cash flow provided by operating activities:
Net loss.................................................. $ (49,136)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization........................... 2,115
Allowance for doubtful accounts......................... 10,000
Changes in assets and liabilities
Increase in accounts receivable....................... (197,814)
Increase in prepaid expenses and other current
assets.............................................. (1,868)
Increase in accounts payable.......................... 99,148
Increase in accrued expenses.......................... 143,996
---------
Net cash provided by operating activities......... 6,441
---------

Cash flow used in investing activities:
Purchases of property and equipment....................... (29,951)
---------
Net cash used in investing activities............. (29,951)
---------

Cash flow provided by financing activities:
Proceeds from issuance of common stock.................... 3,000
Proceeds from line of credit.............................. 11,429
Proceeds from note payable from Viewlocity................ 150,000
---------
Net cash provided by financing activities......... 164,429
---------

Net increase in cash and cash equivalents................... 140,919
Cash and cash equivalents, beginning of period.............. --
---------
Cash and cash equivalents, end of period.................... $ 140,919
=========
Supplemental cash flow information:
Cash paid for interest.................................... $ 1,132
=========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-38
<PAGE>
NEXSTEP, INC.

NOTES TO FINANCIAL STATEMENTS

1. NATURE OF THE BUSINESS

Nexstep, Inc. (the "Company") was incorporated in 1998 and initially
capitalized during January 1999. The Company was formed to design and develop
supply-chain visibility and logistics software products for Internet retail
organizations. The Company's development effort was funded by consulting
services provided to customers.

Effective January 1, 2000, Viewlocity purchased all of the outstanding
shares of the Company.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
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.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with original maturities
of three months or less at the date of purchase to be cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of the Company's financial instruments, which include
cash equivalents, accounts receivable, accounts payable and other accrued
expenses approximate their fair values due to their short maturities. Based on
borrowing rates currently available to the Company for loans with similar terms,
the carrying value of notes payable approximate fair value.

CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

Financial instruments which potentially expose the Company to concentrations
of credit risk consist primarily of trade accounts receivable. To minimize risk,
ongoing credit evaluations of customers' financial condition are performed,
although collateral generally is not required. At December 31, 1999, two
customers accounted for 64% and 23% of gross accounts receivable. For the
cumulative period from January 26, 1999 (date of inception) to December 31,
1999, three customers accounted for 43%, 20% and 15% of total revenue,
respectively.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated over their
estimated useful lives using the straight-line method. Upon retirement or sale,
the cost of assets disposed of and the related accumulated depreciation are
removed from the accounts and any resulting gain or loss is credited or charged
to income. Repairs and maintenance costs are expensed as incurred.

RESEARCH AND DEVELOPMENT AND SOFTWARE DEVELOPMENT COSTS

F-39
<PAGE>
NEXSTEP, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
are expensed prior to establishment of technological feasibility and capitalized
thereafter until the product is available for general release to customers. No
software development costs were capitalized for the period from January 26, 1999
(date of inception) to December 31, 1999.

REVENUE RECOGNITION

The Company's revenue is primarily derived from consulting services provided
to customers. Revenue from these consulting services is recognized as the
related services are performed.

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIFE DECEMBER 31,
(YEARS) 1999
----------- ------------
<S> <C> <C>
Purchased software................................ 3 $11,655
Furniture and office equipment.................... 5 to 7 18,296
-------
29,951
Less: accumulated depreciation.................... (2,115)
-------
$27,836
=======
</TABLE>

Depreciation and amortization expense for the period from January 26, 1999
(date of inception) to December 31, 1999 was $2,115.

4. SHORT-TERM DEBT

LINE OF CREDIT

In February 1999, the Company entered into an agreement with a bank which
provides for a $15,000 revolving line of credit which accrues interest monthly
at the bank's prime rate plus 4.25%. At December 31, 1999, the Company had an
outstanding balance on the revolving line of credit of $11,429. The balance on
the line of credit was paid during January 2000.

In December 1999, the Company entered into an agreement with Viewlocity
which provides for a $150,000 term loan which accrues interest monthly at the
rate of 12% annually. The balance of the term loan was due at the earlier date
of an effective merger of the Company and Viewlocity or March 31, 2000.
Subsequent to the purchase of the Company by Viewlocity, the balance of the note
was accounted for as a component of the consideration paid by Viewlocity in the
subsequent purchase of the Company.

5. COMMON STOCK

Each share of common stock is entitled to one vote.

6. INCOME TAXES

The Company qualifies as an S Corporation in the U.S. for federal and state
income tax purposes. However, the State of Texas assesses franchise tax on
capital at the entity level. Accordingly, a provision

F-40
<PAGE>
NEXSTEP, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES (CONTINUED)
has been made for this tax. Individual stockholders report their share of the
U.S. taxable income or loss on their respective individual income tax returns.

7. COMMITMENTS AND CONTINGENCIES

The Company leases its office space and certain office and computer
equipment under noncancelable operating leases. Total rent expense under these
operating leases was approximately $33,471 for the period from January 26, 1999
(date of inception) to December 31, 1999.

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

<TABLE>
<CAPTION>
DECEMBER 31,
YEAR ENDING DECEMBER 31, 1999
------------------------ ------------
<S> <C>
2000........................................................ $27,134
2001........................................................ 14,184
2002........................................................ 5,412
-------
$46,730
=======
</TABLE>

F-41
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors
of Viewlocity, Inc. and Subsidiaries:

In our opinion, the accompanying balance sheets and the related statements
of operations, of changes in shareholders' deficit and comprehensive income and
of cash flows present fairly, in all material respects, the financial position
of SC21 Pte. Ltd. ("the Company") at December 31, 1999 and 1998, and the results
of its operations and its cash flows of the year ended December 31, 1999 and for
the period from inception (November 13, 1998) through December 31, 1998, in
conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

<TABLE>
<S> <C>
/s/ PRICEWATERHOUSECOOPERS LLP

PricewaterhouseCoopers LLP
</TABLE>

Atlanta, Georgia
September 27, 2000

F-42
<PAGE>
SC21 PTE. LTD.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1998 1999 2000
-------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 2,705 $ 79,937 $ 4,052
Accounts receivable, net of allowance for doubtful
accounts of $0, $82,500 and $117,594, respectively...... 642 207,711 178,301
Work in process........................................... -- 273,145 331,710
Prepaid expenses and other current assets................. 6,415 27,039 34,155
-------- --------- ----------
Total current assets.................................. 9,762 587,832 548,218
Property and equipment, net................................. 19,511 151,531 153,408
-------- --------- ----------
Total assets.......................................... $ 29,273 $ 739,363 $ 701,626
======== ========= ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.......................................... $ 10,300 $ 184,583 $ 138,357
Accrued expenses.......................................... 33,991 91,402 118,198
Deferred revenue.......................................... -- 788,198 812,776
Provision for loss contract............................... -- 30,000 30,000
Payable to Viewlocity..................................... -- -- 408,703
Payables to related parties............................... 30,304 69,000 26,051
Current portion of capital lease.......................... -- 23,347 23,827
-------- --------- ----------
Total current liabilities............................. 74,595 1,186,530 1,557,912
Long-term portion of capital lease.......................... -- 39,710 35,800
Deferred income taxes....................................... -- -- --
-------- --------- ----------
Total liabilities..................................... 74,595 1,226,240 1,593,712
-------- --------- ----------
Commitments and contingencies

Stockholders' deficit:
Common stock, $.60 par value; 100,000 shares authorized;
100,000 and 2 shares issued and outstanding at
December 31, 1999 and 1998, respectively................ 1 60,000 60,000
Accumulated other comprehensive income.................... -- (7,660) 25,807
Retained deficit.......................................... (45,323) (539,217) (977,893)
-------- --------- ----------
Total stockholders' deficit........................... (45,322) (486,877) (892,086)
-------- --------- ----------
Total liabilities and stockholders' deficit........... $ 29,273 $ 739,363 $ 701,626
======== ========= ==========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-43
<PAGE>
SC21 PTE. LTD.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION YEAR ENDED
(NOVEMBER 13, 1998) DECEMBER 31, SIX MONTHS ENDED JUNE 30,
THROUGH ------------ -----------------------------
DECEMBER 31, 1998 1999 1999 2000
-------------------- ------------ ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue..................... $ -- $ 283,101 $ 88,426 $ 111,716
Cost of revenue............. -- 177,569 33,379 18,270
-------- --------- --------- ---------
Gross profit................ -- 105,532 55,047 93,446
-------- --------- --------- ---------
Operating expenses:
Research and
development............. 4,337 56,655 14,640 90,074
General and
administrative.......... 40,429 474,445 282,259 418,067
Depreciation and
amortization............ 557 66,098 19,325 34,509
-------- --------- --------- ---------
Loss from operations.... (45,323) (491,666) (261,177) (449,204)
Interest income (expense),
net....................... -- (2,228) 5,856 10,528
-------- --------- --------- ---------
Net loss................ $(45,323) $(493,894) $(255,321) $(438,676)
======== ========= ========= =========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-44
<PAGE>
SC21 PTE. LTD.

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
AND COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
ACCUMULATED
OTHER TOTAL
COMMON STOCK ACCUMULATED COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT DEFICIT INCOME DEFICIT
-------- -------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT INCEPTION
(NOVEMBER 13, 1998)........... -- $ -- $ -- $ -- $ --
Issuance of common stock...... 2 1 1
Net loss...................... (45,323) -- (45,323)
------- ------- --------- -------- ---------
BALANCE AT DECEMBER 31, 1998.... 2 1 (45,323) -- (45,322)
Issuance of common stock...... 99,998 59,999 59,999
Net loss...................... -- -- (493,894) -- (493,894)
Change in translation
adjustment.................. (7,660) (7,660)
------- ------- --------- -------- ---------
BALANCE AT DECEMBER 31, 1999.... 100,000 60,000 (539,217) (7,660) (486,877)
Net loss...................... -- -- (438,676) -- (438,676)
Change in translation
adjustment.................. 33,467 33,467
------- ------- --------- -------- ---------
BALANCE AT JUNE 30, 2000
(UNAUDITED)................... 100,000 $60,000 $(977,893) $ 25,807 $(892,086)
======= ======= ========= ======== =========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-45
<PAGE>
SC21 PTE. LTD.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION YEAR ENDED SIX MONTHS ENDED
(NOVEMBER 13, 1998) DECEMBER 31, JUNE 30,
THROUGH ------------- ---------------------
DECEMBER 31, 1998 1999 1999 2000
-------------------- ------------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows provided by (used in)
operating activities:
Net loss.............................. $(45,323) $(493,894) $(255,321) $(438,676)
Adjustments to reconcile net loss to
cash flow provided by (used in)
operating activities:
Depreciation and amortization....... 557 66,098 19,325 34,509
Allowance for doubtful accounts..... -- 82,500 -- 35,094
Changes in assets and liabilities:
Accounts receivable............... (642) (289,569) 642 25,681
Work in process................... -- (273,145) (14,688) (58,565)
Prepaid expenses and other current
assets.......................... (6,415) (20,624) (101,685) (7,116)
Accounts payable.................. 10,301 174,283 96,625 (46,226)
Accrued expenses.................. 33,991 99,106 34,159 26,796
Deferred revenue.................. -- 788,198 293,750 24,578
Provision for loss contract....... -- 30,000 -- --
-------- --------- --------- ---------
Net cash provided by (used in)
operating activities............ (7,531) 162,953 72,807 (403,925)
-------- --------- --------- ---------
Cash flows from investing activities:
Capital expenditures.................. (20,069) (114,754) (134,939) (36,386)
-------- --------- --------- ---------
Net cash used in investing
activities...................... (20,069) (114,754) (134,939) (36,386)
-------- --------- --------- ---------
Cash flows from financing activities:
Proceeds from issuance of common
stock............................... 1 59,999 59,999 --
Borrowing (repayment) of payables to
related parties..................... 30,304 (2,999) (30,304) (42,949)
Borrowing from Viewlocity............. -- -- -- 408,703
Borrowing (repayment) of capital
leases.............................. -- (21,260) 140,413 (3,430)
-------- --------- --------- ---------
Net cash provided by financing
activities...................... 30,305 35,740 170,108 362,324
-------- --------- --------- ---------
Effect of exchange rate on cash flows... -- (6,707) (818) 2,102
Net increase in cash and cash
equivalents........................... 2,705 77,232 107,158 (75,885)
Cash and cash equivalents, beginning of
period................................ -- 2,705 2,705 79,937
-------- --------- --------- ---------
Cash and cash equivalents, end of
period................................ $ 2,705 $ 79,937 $ 109,863 $ 4,052
======== ========= ========= =========
Supplemental disclosure of cash flow
information:
Cash paid for interest................ $ -- $ 2,228 $ -- $ 1,755
======== ========= ========= =========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-46
<PAGE>
SC21 PTE. LTD.

NOTES TO FINANCIAL STATEMENTS

(ALL INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED)

1. NATURE OF THE BUSINESS

SC21 Pte. Ltd. (the "Company") was incorporated in Singapore on
November 13, 1998. The Company was formed to design, develop, manufacture and
market e-commerce software that automates the procurement and management of
operating resources. The Company's solutions connect employees, management,
buyers, and other members of the supply chain through a web interface. The
Company also provides implementation, consulting services and ongoing customer
support services as an integral part of the complete procurement solution.

Effective July 31, 2000, Viewlocity, Inc. purchased all of the outstanding
shares of the Company.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with original maturities
of three months or less at the date of purchase to be cash equivalents.

UNAUDITED INTERIM RESULTS

Data and information as of June 30, 1999 and 2000 and for the six months
ended June 30, 1999 and 2000 are unaudited. In the opinion of our management,
the unaudited interim consolidated financial statements include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for those
periods. The six month results are not necessarily indicative of the expected
results for the year ending December 31, 2000.

FOREIGN CURRENCY TRANSLATION

The functional currency is the local currency of the country in which the
Company operates, which is the Singapore dollar. The assets and liabilities of
the Company's operations were translated into U.S. dollars at the exchange rate
in effect at the balance sheet date. Income statement items were translated into
U.S. dollars at the average exchange rate that prevailed during the reporting
period. The net gains and losses that result from this translation are reported
as foreign currency translation adjustments as a component of comprehensive
income and are not included in determining net income. Transaction gains and
losses are included in the results of operations in the period which they occur
and are not significant in any of the periods presented.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of the Company's financial instruments, which include
cash equivalents, accounts receivable, accounts payable and other accrued
expenses approximate their fair values due to

F-47
<PAGE>
SC21 PTE. LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
their short maturities. Based on borrowing rates currently available to the
Company for loans with similar terms, the carrying value of notes payable and
capital lease obligations approximates fair value.

CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

PROPERTY AND EQUIPMENT

RESEARCH AND DEVELOPMENT AND SOFTWARE DEVELOPMENT COSTS

Costs incurred in the research and development of the Company's products are
expensed as incurred, except for certain software development costs. Costs
associated with the development of computer software in accordance with the
Statement of Financial Accounting Standard No. 86, "Accounting for the Costs of
Computer Software to be Sold, Leased or Otherwise Marketed", are expensed prior
to establishment of technological feasibility and capitalized thereafter until
the product is available for general release to customers. No software
development costs were capitalized during the year ended December 31, 1999 or
the period from November 13, 1998 (date of inception) to December 31, 1998,
since costs incurred subsequent to establishment of technological feasibility
were not material.

REVENUE RECOGNITION

The Company's revenue is derived primarily from two sources: (i) software
license revenue, derived primarily from software licenses to end users, and
(ii) service revenue, derived primarily from providing support and maintenance,
education and training services to end users.

Revenue from software licenses is recognized when there is persuasive
evidence of an agreement, the software has been shipped, collectibility is
probable, payment is due within one year and there are no further significant
obligations. Revenue from subscription license arrangements, which include
software, rights to future software and maintenance, is deferred and recognized
ratably over the term of the subscription period. Service revenue from education
and consulting revenue is recognized as the services are performed or on the
percentage of completion method of accounting, using labor as the primary input
measure. To the extent that these arrangements include license fees, such fees
are recorded as license revenue based on the percentage of completion ratio.
When a lack of dependable estimates or inherent hazards cause forecasts to be
doubtful, the completed contract method is used. Under the completed contract
method, the revenues and costs associated to the contract are deferred until the
project is completed and accepted. If the total estimated costs to complete a
project exceed the total contract amount, indicating a loss, the entire
anticipated loss would be recognized currently. Revenue from support and
maintenance services are recognized ratably over the contractual period.

F-48
<PAGE>
SC21 PTE. LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

Deferred tax assets and liabilities are recognized for the estimated tax
consequences of temporary differences and income tax credits. Temporary
differences are primarily the result of differences between the tax bases of
assets and liabilities and their financial reporting amounts. Deferred tax
assets and liabilities are measured by applying enacted statutory tax rates
applicable to future years in which deferred tax assets or liabilities are
expected to be settled or realized. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.

3. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
ESIMATED SIX MONTHS
USEFUL LIFE DECEMBER 31, ENDED JUNE 30,
(YEARS) 1998 1999 2000
----------- -------- -------- --------------
<S> <C> <C> <C> <C>
Computer equipment and software... 3 $ 2,117 $117,493 $113,464
Furniture and fixtures............ 3 10,327 25,917 28,945
Leasehold improvements............ 3 7,624 10,548 15,630
Motor vehicles.................... 3 -- 64,980 63,679
------- -------- --------
20,068 218,938 221,718
Less: accumulated depreciation.... (557) (67,407) (68,310)
------- -------- --------
$19,511 $151,531 $153,408
======= ======== ========
</TABLE>

Depreciation expense for the year ended December 31, 1999 and for the period
ended December 31, 1998 was $66,098 and $557, respectively.

4. PAYABLES TO RELATED PARTIES

During 1999, the Company entered into a short-term non-interest-bearing note
with a related party for $18,000. The note payable is not collateralized, there
are no required principal payments and there are no significant covenants.

Also during 1999, the Company issued a $42,000 note payable to a director
for consulting services rendered. The note payable is not collateralized, there
are no required principal payments and there are no significant covenants.

During 1998, the Company entered into a short-term non-interest-bearing note
with a director for $30,304. During 1999, the Company repaid $21,304 of this
note, leaving a balance of $9,000 at December 31, 1999. The note payable is not
collateralized, there are no required principal payments and there are no
significant covenants.

5. COMMON STOCK

Each share of common stock is entitled to one vote. The holders of common
stock are also entitled to receive dividends whenever funds are legally
available and when declared by the Board of Directors, subject to the prior
rights of holders of all classes of stock outstanding.

F-49
<PAGE>
SC21 PTE. LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED)

6. INCOME TAXES

Deferred tax assets consist of the following:

The Company has provided a valuation allowance for the full amount of its
net deferred tax assets since realization of any future benefit from deductible
temporary differences and net operating loss and tax credit carryforwards cannot
be sufficiently assured as of December 31, 1998, 1999 and June 30, 2000.

At December 31, 1999, the Company has federal net operating loss
carryforwards approximately $189,000, available to reduce future taxable income.

Under the provisions of the Internal Revenue Code and local Singapore tax
regulations, certain substantial changes in the Company's ownership may result
in a limitation on the amount of net operating loss carryforwards and research
and development credit carryforwards which can be used in future years.

7. COMMITMENTS AND CONTINGENCIES

The Company leases its office space and certain office and computer
equipment under noncancelable operating leases. Total rent expense under these
operating leases was approximately $15,314 and $0 for the year ended
December 31, 1999 and for the ended December 31, 1998, respectively. The Company
also leases certain computer equipment and motor vehicles under capital leases.

As of December 31, 1999, future minimum lease payments under operating and
capital leases are as follows:

<TABLE>
<CAPTION>
OPERATING CAPITAL
YEAR ENDING DECEMBER 31, LEASES LEASES
------------------------ --------- --------
<S> <C> <C>
2000................................................... $14,861 $25,852
2001................................................... 14,861 21,801
2002................................................... 10,858
2003................................................... 10,858
2004................................................... 2,205
Thereafter............................................. --
------- -------
29,722 71,574
Less: amounts representing interest...................... 8,517
-------
63,057
Less: current portion.................................... 23,347
-------
Capital lease obligation, net of current portion......... $39,710
=======
</TABLE>

The Company is subject to legal proceedings and claims that arise in the
normal course of business. Management cannot predict the outcome of these
matters with any certainty.

8. SIGNIFICANT CUSTOMER

At December 31, 1999, one customer accounted for 28% of gross accounts
receivable and 58% of total recognized revenue. At June 30, 2000 this customer
accounted for 75% of gross accounts receivable and there was no revenue
recognized for the six months ended June 30, 2000. During the first six months
of 2000, this same customer raised concerns regarding the acceptance criteria
related to the implementation

F-50
<PAGE>
SC21 PTE. LTD.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(ALL INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED)

8. SIGNIFICANT CUSTOMER (CONTINUED)
of a third-party software product as part of our contract. The Company is
working with the third-party vendor to resolve these concerns and intends to
complete the implementation requirements of the project. Based on the
uncertainty associated with the timing of project completion and the customer's
acceptance, the contract is being accounted for under the completed contract
method in accordance with our accounting policy. As a result, progress billings
and costs incurred totaling $650,000 and $241,600 have been deferred as of
December 31, 1999. As of June 30, 2000, deferred revenue and costs amounted to
$742,500 and $331,710, respectively. A provision of $30,000 has also been
recorded at December 31, 1999 and June 30, 2000 based on the contract's current
anticipated loss.

F-51
<PAGE>
3. Inside back page portrays the following:

The title bar at the top of the page states "Manage Online Trading
Communities," underneath which is the text "speeding goods to market."

In the center of the page is a propeller diagram. In the center of the
propeller is an oval with the stylized Viewlocity logo inside. In the top-left
propeller is a photograph of a person putting together puzzle pieces. To the
left of the propeller is the text "Connect" underneath which is the text
"Integrate applications within an enterprise." In the top-right propeller is a
photograph of interlocking gears. To the right of the propeller is the text
"Synchronize" underneath which is the text "Speed the flow of products through
the supply web." In the bottom-right propeller is a photograph of two persons
shaking hands in front of a world map. Underneath the propeller is the text
"Collaborate" underneath which is the text "Make decisions with trading
partners." In the bottom-left propeller is a photograph of a person using the
telephone with another person sitting behind him. Underneath the propeller is
the text "Communicate" underneath which is the text "Integrate with trading
partners via the Internet."

In the bottom left of the page is the following text: "Viewlocity is a
leading global provider of e-business software and services that integrate
trading communities and synchronize supply webs."

In the bottom right corner of the page is the stylized Viewlocity logo.
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

5,500,000 Shares

[LOGO]

Common Stock

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

PROSPECTUS
-----------------

CHASE H&Q BEAR, STEARNS & CO. INC.
WIT SOUNDVIEW
-----------------

, 2000

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

You should rely only on information contained in this prospectus. We have
not authorized anyone to provide you information different from that contained
in this prospectus. We are offering to sell, and seeking offers to buy, shares
of common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of our common stock.

Until , 2000 (25 days after the date of this prospectus), all
dealers that effect transactions in these shares of common stock may be required
to deliver a prospectus. This is in addition to the dealer's obligations to
deliver a prospectus when acting as an underwriter and with respect to their
unsold allotments or subscriptions.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART II

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 23,378
National Association of Securities Dealers, Inc. fee........ $ 7,228
Nasdaq Stock Market listing fee............................. $ 95,000
Accountants' fees and expenses.............................. $ 300,000
Legal fees and expenses..................................... $ 400,000
Blue sky fees and expenses.................................. $ 5,000
Transfer agent's fees and expenses.......................... $ 5,000
Printing and engraving expenses............................. $ 300,000
Miscellaneous............................................... $ 14,394
----------
Total expenses.......................................... $1,150,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our amended and restated certificate of incorporation limits personal
liability for breach of the fiduciary duty of our directors to the fullest
extent provided by the Delaware General Corporation Law and provides that the
registrant shall fully indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that such person is or was our director or officer or is or
was serving at our request as a director or officer of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding. Such provisions provide that no director of
Viewlocity shall have personal liability to us or to our stockholders for
monetary damages for breach of fiduciary duty of care or other duty as a
director. However, such provisions shall not eliminate or limit the liability of
a director:

- for any breach of the director's duty of loyalty to us or to our
stockholders;

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

- for voting or assenting to unlawful distributions; or

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

The Delaware General Corporation Law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under our bylaws, any
agreement, a vote of our stockholders or otherwise.

We intend to enter into agreements to indemnify our officers and directors
in addition to indemnification provided for in our amended and restated
certificate of incorporation. These agreements may require us to indemnify these
individuals against liabilities that arise by reason of their status as officers
or directors, other than liabilities arising from willful misconduct, and to
advance expenses incurred as a result of any proceedings against them. In
addition, we intend to purchase a directors and officers liability insurance
policy with appropriate coverages.

II-1
<PAGE>
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under our amended and restated certificate of
incorporation. We are not aware of any threatened litigation or proceeding that
may result in a claim for such indemnification.

The Underwriting Agreement filed as Exhibit 1.1 hereto also contains
provisions pursuant to which certain officers, directors and controlling persons
of Viewlocity may be entitled to be indemnified by the underwriters named
therein.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

During the past three years, we have issued the securities set forth below
that were not registered under Section 5 of the Securities Act of 1933, as
amended (the "Securities Act"):

Prior to our formation, the AMTrix software business was conducted by
Frontec AB and its wholly owned subsidiaries. Effective January 1, 1999, Frontec
AB consolidated the AMTrix business in certain of its subsidiaries through a
series of asset and stock contribution agreements. In connection with the
consolidation of the AMTrix business into regional subsidiaries, Frontec AB also
acquired a wholly owned subsidiary currently known as Viewlocity Integra AB.
Pursuant to a stock contribution agreement dated February 21, 1999, as amended,
Frontec AB capitalized Viewlocity Integra AB, by contributing all of the capital
stock of each of the regional subsidiaries to Viewlocity Integra AB.

On February 22, 1999, Frontec AB formed Viewlocity, Inc. as a Delaware
corporation and on February 23, 1999, contributed to Viewlocity all of the
issued and outstanding shares of Viewlocity Integra AB in exchange for
17,031,029 shares of our common stock. As a result, Viewlocity Integra AB and
the regional operating subsidiaries became wholly owned subsidiaries of
Viewlocity. This issuance of securities was deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) thereof and on
Rule 506 of Regulation D promulgated thereunder.

In February 1999, we sold an aggregate of 10,000,000 shares of our Series A
convertible preferred stock and warrants to purchase an aggregate of 7,005,495
shares of our Series B convertible preferred stock to Battery Ventures IV, L.P.
and Battery Investment Partners IV, LLC (collectively, "Battery"). Battery paid
us an aggregate purchase price of $10.0 million for the Series A convertible
preferred stock and the warrants to purchase Series B convertible preferred
stock. The Series A convertible preferred stock may be converted into shares of
our common stock, on a one for one share basis, subject to adjustment upon
certain events. Battery may exercise the warrants to purchase the Series B
convertible preferred stock in whole or in part at any time on or before the
earlier of March 8, 2004, or the date on which we consummate this offering, at
an exercise price of $1.82 per share, subject to adjustment upon certain events.
The Series B convertible preferred stock may be converted into shares of our
common stock, on a one to one share basis, subject to adjustment upon certain
events. Additionally, the holders of the warrants to purchase our Series B
convertible preferred stock have irrevocably agreed to exercise the warrants on
a cashless basis. Pursuant to the warrant agreements, the holders of the
warrants will receive a number of shares of Series B convertible preferred stock
equal to 7,005,495 multiplied by the difference between (a) the fair market
value of a share of Series B convertible preferred stock and (b) $1.82, divided
by the fair market value of a share of Series B convertible preferred stock. The
fair market value of a share of Series B convertible preferred stock is defined
as the initial public offering price per share of common stock in this offering
multiplied by the number of shares or fraction of a share of common stock
issuable upon conversion of the Series B convertible preferred stock. Each share
of Series B convertible preferred stock is currently convertible into one-half
of a share of common stock. Additionally, all of the outstanding shares of
Series A convertible preferred stock and Series B convertible preferred stock
will be converted into an aggregate of 7,521,978 shares of our common stock upon
completion of this offering. This issuance of securities was deemed to be exempt
from registration under the Securities Act in reliance on Section 4(2) thereof
and on Rule 506 of Regulation D promulgated thereunder.

II-2
<PAGE>
In connection with the Series A and Series B convertible preferred stock
transaction, we issued 2,000 shares of our Series C convertible preferred stock
to Frontec AB in exchange for the satisfaction and cancellation of certain
liabilities owed to Frontec AB in the approximate amount of $15.4 million.
Pursuant to its terms, the Series C convertible preferred stock will convert
into 1,576,923 shares of our common stock upon completion of this offering. This
issuance of securities was deemed to be exempt from registration under the
Securities Act in reliance on Section 4(2) thereof and on Rule 506 of
Regulation D promulgated thereunder.

In February 1999, we issued to certain executive employees of Frontec AB
options to purchase a total of 250,000 shares of our common stock, at an
exercise price of $2.00 per share. Each of Olof Englund, Bengt Wallentin,
Christer Wahlander, Goran Tuvsedt and Sune Fogelstrom was granted an option to
purchase 50,000 shares of our common stock, and these option holders exercised
all of their options on or before April 4, 2000. This issuance of securities was
deemed to be exempt from registration under the Securities Act in reliance on
Section 4(2) thereof.

On March 12, 1999, we entered into a stock purchase and escrow agreement
with Frontec AB, pursuant to which Frontec AB transferred to escrow 5,356,755
shares of our common stock. These escrowed shares were made available for grants
to our employees, directors, consultants and other key persons provided that we
purchased from Frontec AB any such shares for $.02 per share. As of
December 31, 1999, 3,084,066 shares of restricted stock had been sold to certain
of our officers and employees out of the escrowed shares, and we had paid
Frontec AB of $61,681 for such shares. On January 1, 2000, we purchased the
remaining 2,272,689 shares of common stock for use in future option grants to
our employees from Frontec AB for $45,454 and terminated the escrow agreement.
This issuance of securities was deemed to be exempt from registration under the
Securities Act in reliance on Section 4(2) thereof and on Rule 506 of
Regulation D promulgated thereunder.

On October 27, 1999, we sold a convertible subordinated debenture to William
Street Associates II, LLC. William Street Associates II, LLC paid us
$2.25 million for this convertible subordinated debenture, which was manditorily
convertible on December 30, 1999 into 765,306 shares of our Series D convertible
preferred stock. The sale of our Series D convertible preferred stock is
described below. This issuance of securities was deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) thereof and on
Rule 506 of Regulation D promulgated thereunder.

On October 27, 1999, in connection with the sale of the convertible
subordinated debenture, we also issued to William Street Associates II, LLC a
contingent warrant for the purchase of 196,875 shares of our common stock at a
price of $2.00 per share. The terms of this contingent warrant were that it
would only be exercisable if the issuance of the Series D convertible preferred
stock did not occur on or before December 15, 1999, and the convertible
subordinated debenture was not converted pursuant to its terms as of such date.
We did not sell our Series D convertible preferred stock until December 30,
1999, and as a result, the contingent warrant became exercisable. This warrant
expires on October 27, 2004. This issuance of securities was deemed to be exempt
from registration under the Securities Act in reliance on Section 4(2) thereof
and on Rule 506 of Regulation D promulgated thereunder.

Effective September 2, 1999, certain of our officers and employees purchased
escrowed shares pursuant to our stock incentive plan and individualized
restricted stock agreements at a price of $2.00 per share. The officers and
employees and the number of shares purchased by each are as follows: Gregory
Cronin (1,384,210 shares); Stan F. Stoudenmire (137,062 shares); Jeffrey B.
Cashman (415,262 shares); Mikael Ahlund (94,062 shares); Jon R. Kirkegaard
(274,125 shares); and Paul R. Leiske (205,593 shares). Each officer and employee
delivered to us a full recourse promissory note bearing a market rate of
interest for the aggregate purchase price of the restricted stock and entered
into restricted stock agreements that prohibit transfer of the shares prior to
vesting and provides for forfeiture of any unvested shares upon termination of
employment. The shares purchased generally vest over a four-year period
immediately following the person's date of hire. Each purchasing officer and
employee filed with the Internal Revenue

II-3
<PAGE>
Service an election to be taxed under Section 83(b) of the Internal Revenue
Code. This issuance of securities was deemed to be exempt from registration
under the Securities Act in reliance on Section 4(2) thereof and on Rule 506 of
Regulation D promulgated thereunder.

On November 12, 1999, in connection with our entering into an equipment
lease financing agreement, we issued to CommVest, LLC a warrant for the purchase
of 75,000 shares of our common stock at a price of $2.00 per share. This warrant
expires on November 12, 2004. This issuance of securities was deemed to be
exempt from registration under the Securities Act in reliance on Section 4(2)
thereof and on Rule 506 of Regulation D promulgated thereunder.

Effective November 15, 1999, one of our officers and an employee purchased
escrowed shares pursuant to our stock incentive plan and individualized
restricted stock agreements at a price of $2.00 per share. Maurice A. Trebuchon,
an officer, purchased 446,250 shares and Joseph Nentwig, an employee, purchased
127,500 shares. Both purchasers delivered to us a full recourse promissory note
bearing a market rate of interest for the aggregate purchase price of the
restricted stock and entered into restricted stock agreements that prohibit
transfer of the shares prior to vesting and provides for forfeiture of any
unvested shares upon termination of employment. The shares purchased generally
vest over a four-year period immediately following the person's date of hire.
Both purchasers filed with the Internal Revenue Service an election to be taxed
under Section 83(b) of the Internal Revenue Code. This issuance of securities
was deemed to be exempt from registration under the Securities Act in reliance
on Section 4(2) thereof.

On November 26, 1999, in connection with our entering into a line of credit
agreement, we issued to Imperial Bancorp a warrant for the purchase of 44,217
shares of our common stock at a price of $5.88 per share. This warrant expires
on November 26, 2006. This issuance of securities was deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) thereof and on
Rule 506 of Regulation D promulgated thereunder.

On December 30, 1999, we sold an aggregate of 9,801,020 shares of Series D
convertible preferred stock at a price of $2.94 per share. BCI Growth V, L.P.
and its affiliate BCI Investors, LLC, purchased a total of 3,401,361 of the
shares of our Series D convertible preferred stock at an aggregate purchase
price of $10.0 million. The Beacon Group III--Focus Value Fund, L.P. purchased a
total of 2,380,952 shares of our Series D convertible preferred stock at an
aggregate purchase price of $7.0 million. BancBoston Capital, Inc. purchased a
total of 2,380,952 shares of our Series D convertible preferred stock at an
aggregate purchase price of $7.0 million. CommVest Partners I Company purchased
a total of 170,068 shares of Series D convertible preferred stock at an
aggregate purchase price of $500,000. William Street Associates II, LLC,
purchased a total of 935,374 shares of our Series D convertible preferred stock
by converting the convertible subordinated debenture described above and by
paying us an additional cash purchase price of $500,000. The total purchase
price paid by William Street Associates II, LLC was $2.75 million. Battery
Ventures IV, L.P. and its affiliate, Battery Investment Partners IV, LLC
purchased a total 340,136 shares of Series D convertible preferred stock at an
aggregate purchase price of $1.0 million. One of our underwriters in this
offering, Chase Securities Inc., also served as placement agent for the private
placement of our Series D convertible preferred stock and received compensation
in the amount of $1.66 million in cash and 192,177 shares of our Series D
convertible preferred stock. This issuance of securities was deemed to be exempt
from registration under the Securities Act in reliance on Section 4(2) thereof
and on Rule 506 of Regulation D promulgated thereunder.

On February 3, 2000, we completed the acquisition of Nexstep, Inc., a
software development enterprise based in Plano, Texas, which focuses on
visibility fulfillment software for Internet retail organizations. The aggregate
consideration of approximately $10.1 million was paid by the issuance of
1,001,000 shares of our common stock and cash of approximately $4.2 million. Our
board of directors determined the fair value of the common stock issued as part
of the consideration to be $5.88 per share; based on recent sales of our
convertible preferred stock for cash to third-party investors. This issuance of

II-4
<PAGE>
securities was deemed to be exempt from registration under the Securities Act in
reliance on Section 4(2) thereof and on Rule 506 of Regulation D promulgated
thereunder.

Effective March 23, 2000, Daniel Basmajian, an employee, purchased 106,250
escrowed shares pursuant to our stock incentive plan and a restricted stock
agreement at a price of $5.88 per share. Mr. Basmajian delivered to us a full
recourse promissory note bearing a market rate of interest for the aggregate
purchase price of the restricted stock and entered into a restricted stock
agreement that prohibits transfer of the shares prior to vesting and provides
for forfeiture of any unvested shares upon termination of employment. The shares
purchased generally vest over a four-year period immediately following the
person's date of hire. Mr. Basmajian has filed with the Internal Revenue Service
an election to be taxed under Section 83(b) of the Internal Revenue Code. This
issuance of securities was deemed to be exempt from registration under the
Securities Act in reliance on Section 4(2) thereof.

On March 29, 2000, we sold an additional 662,653 shares of our Series D
convertible preferred stock at $2.94 per share to certain of our executive
officers and key employees. Gregory Cronin, our Chairman, Chief Executive
Officer and President, paid a total purchase price of $300,000 and purchased
102,041 shares of our Series D convertible preferred stock. Maurice A.
Trebuchon, our Chief Operating Officer, paid a total purchase price of $200,000
and purchased 68,027 shares of our Series D convertible preferred stock. Stan F.
Stoudenmire, our Senior Vice President and Chief Financial Officer, paid a total
purchase price of $70,000 and purchased 23,810 shares of our Series D
convertible preferred stock. Michael Lantz, our former Managing Director of
EMEA, paid a total purchase price of $88,000 and purchased 30,000 shares of our
Series D convertible preferred stock. Anders Berglund, our Managing Director of
Asia/ Pacific, paid a total purchase price of $400,000 and purchased 136,054
shares of Series D convertible preferred stock. Christer Wahlander, our Chief
Technology Officer, paid a total purchase price of $294,000 and purchased
100,000 shares of our Series D convertible preferred stock. Paul R. Leiske, our
Senior Vice President of Global Customer Services, paid a total purchase price
of $170,000 and purchased 58,163 shares of our Series D convertible preferred
stock. Jeffrey B. Cashman, our Senior Vice President of Global Marketing and
Business Development, paid a total purchase price of $425,000 and purchased
144,558 shares of our Series D convertible preferred stock. This issuance of
securities was deemed to be exempt from registration under the Securities Act in
reliance on Section 4(2) thereof and on Rule 506 of Regulation D promulgated
thereunder.

On April 18, 2000, we sold an aggregate of 2,520,261 shares of our Series E
convertible preferred stock at a price of $6.17 per share. Deutsche Post
International B.V. purchased a total of 716,370 shares of our Series E
convertible preferred stock at an aggregate purchase price of $4.42 million. DHL
International Limited purchased a total of 810,373 shares of our Series E
convertible preferred stock at an aggregate purchase price of $5.0 million.
Marconi Capital Limited purchased a total of 486,224 shares of our Series E
convertible preferred stock at an aggregate purchase price of $3.0 million. Sing
Tel Ventures (Singapore) Pte Ltd. purchased a total of 486,224 shares of
Series E convertible preferred stock at an aggregate purchase price of
$3.0 million. B2B Capital II, LLC purchased a total of 21,070 shares of our
Series E convertible preferred stock at an aggregate purchase price of $130,000.
This issuance of securities was deemed to be exempt from registration under the
Securities Act in reliance on Section 4(2) thereof and on Rule 506 of
Regulation D promulgated thereunder.

On June 21, 2000 we completed the acquisition of Electronic Data Transfer,
SA, an EDI software provider for supply chains and a reseller of our AMTrix
product based in Grenoble, France. The consideration to be paid for the
acquisition of EDT consists of both cash and shares of our common stock. The
total cash consideration due the shareholders of EDT is $1.0 million, half of
which was paid at the closing, and the other half which is to be paid on
December 31, 2000. In addition to the cash consideration, the shareholder of EDT
will be issued shares of our common stock on December 31, 2000 and December 31,
2001. The aggregate number of shares of our common stock to be issued to EDT's
shareholders is determined by the value of our common stock during December 2000
and December 2001, and the maximum aggregate number of shares of our common
stock issuable to the shareholders of EDT is

II-5
<PAGE>
506,483. The issuance of the shares of our common stock on each of December 31,
2000 and December 31, 2001 is contingent upon the continued employment and
services of certain of EDT's shareholders. The EDT acquisition has been
accounted for as a purchase and accordingly, the purchase price has been
allocated to the assets acquired and the liabilities assumed based on their
estimated fair values at the date of the acquisition. This issuance of
securities was deemed to be exempt from registration under the Securities Act in
reliance on Regulation S promulgated thereunder.

On June 22, 2000, we sold an aggregate of 1,487,805 shares of our Series E
convertible preferred stock at a price of $6.17 per share. SK Global America,
Inc. purchased a total of 324,150 shares of our Series E convertible preferred
stock at an aggregate purchase price of $2.0 million. BCI Growth V, L.P. and its
affiliate BCI Investors, LLC, purchased a total of 194,490 of the shares of our
Series E convertible preferred stock at an aggregate purchase price of
$1.2 million. Battery Ventures IV, L.P. and its affiliate, Battery Investment
Partners IV, LLC purchased a total 194,489 shares of Series E convertible
preferred stock at an aggregate purchase price of $1.2 million. J&M Venture
Capital, LLC purchased a total 175,000 shares of our Series E convertible
preferred stock at an aggregate purchase price of $1.08 million. Beacon Group
III--Focus Value Fund, L.P. purchased a total of 81,037 shares of our Series E
convertible preferred stock at an aggregate purchase price of $500,000. Sands
Brothers Venture Capital, LLC and its affiliates, 280 Ventures LLC, SB Content
Associates LLC, and SB Synchronized Associates LLC purchased a total of 518,639
shares of our Series E convertible preferred stock at an aggregate purchase
price of $3.2 million. This issuance of securities was deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) thereof and on
Rule 506 of Regulation D promulgated thereunder.

On July 31, 2000 we completed the acquisition of SC21 Pte, Ltd., a software
development enterprise based in Singapore that provides supply web visibility
software for small to medium sized companies. The consideration to be paid for
the acquisition of SC21 consists of both cash and shares of our common stock. At
the closing, we issued 375,000 shares of our common stock to the shareholders of
SC21, and paid them $1.0 million in cash. If all contingencies are met during
the 17 month period following the closing, we will be obligated to issue to the
shareholders of SC21 up to 225,000 additional shares of our common stock, and
pay an additional $4.0 million in cash. The issuance of the additional shares of
our common stock and payment of $2.0 million of the additional cash
consideration is contingent upon the continued employment and services of
certain of the shareholders of SC21. In addition, Nanyang Technical University
(Singapore) had rights to certain of SC21's assets, and at the closing of the
acquisition of SC21 we paid Nanyang Technical University (Singapore) $182,672 in
satisfaction and extinguishment of those rights. The SC21 acquisition has been
accounted for as a purchase and accordingly, the purchase price has been
allocated to the assets acquired and the liabilities assumed based on their
estimated fair values at the date of the acquisition. This issuance of
securities was deemed to be exempt from registration under the Securities Act in
reliance on Regulation S promulgated thereunder.

The recipients of securities in each such transaction represented their
intentions to acquire the securities for investment only and not with a view to,
or for sale in connection with, any distribution thereof, and appropriate
legends were affixed to the share certificates issued in such transactions. We
believe that all recipients had adequate access to information about us.

We currently have 8,356,755 shares of our common stock reserved for issuance
upon exercise of stock options, and we have granted a total of 4,639,298 options
for the purchase of our common stock to employees and other key persons.

II-6
<PAGE>
ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------------------------------------------------------
<S> <C>
1.1* Form of Underwriting Agreement.

2.1+ Agreement and Plan of Merger between and among Viewlocity,
Inc., Nexstep Acquisition Corp., Nexstep, Inc., L. Michael
Handley and Mohamed Y. Amer dated January 21, 2000.**

2.2+ Acquisition of Shares Agreement, dated May 19, 2000, between
the Registrant, Salem Bin Mohamed Ibrahim, Teo Keng Leng,
Robert Ben Roque Trindade Menezes de Souza, SC21 Options
Pte. Ltd. and SC21 Pte. Ltd.**

2.3+ English Translation of Sale and Purchase Agreement and
Statements and Guaranty of Assets and Liabilities dated
June 21, 2000 by and between Viewlocity, Inc., Viewlocity
Holding France SARL, EDT, S.A., and the shareholders of EDT,
S.A.

3.1+ Amended and Restated Certificate of Incorporation of the
Registrant.

3.2+ Amended and Restated Bylaws of the Registrant.

4.1 See Exhibits 3.1 and 3.2 for provisions of the Amended and
Restated Certificate of Incorporation and Amended and
Restated Bylaws of the Registrant defining rights of the
holders of common stock of the Registrant.

4.2* Specimen Stock Certificate.

5.1* Opinion of Morris, Manning & Martin, L.L.P., Counsel to the
Registrant, as to the legality of the shares being
registered.

10.1+ Office Lease Agreement by and between EOP--Buckhead, L.L.C.
and the Registrant, dated November 5, 1999.

10.2+ First Amendment to Office Lease Agreement by and between
EOP--Buckhead, L.L.C., and the Registrant, dated November 5,
1999.

10.3+ English Translation of Lease Agreement by and between FAB
FISKETORGETgm MALAERTORNET AB and Frontec AMT AB, dated
October 1, 1999.

10.4+ Lease Agreement between CPL Alexandra Point Pte Ltd. and
Viewlocity Asia Pacific Pte Ltd., dated October 28, 1999.

10.5+ Assignment of Lease Agreement between Aspect
Telecommunications Limited and Frontec (UK) Limited, dated
December 18, 1998.

10.6+ Sublease Agreement dated as of May 8, 2000 between Zurn
Industries, Inc. and the Registrant.

10.7+ Viewlocity, Inc. Stock Incentive Plan, as amended.

10.8+ Employee Stock Purchase Plan of the Registrant.

10.9+ Employment Agreement between the Registrant and Gregory
Cronin, dated March 3, 1999.

10.10+ Employment Agreement between the Registrant and Stan F.
Stoudenmire, dated May 6, 1999.

10.11+ Employment Agreement between the Registrant and Jeffrey B.
Cashman, dated March 19, 1999.

10.12+ Employment Agreement between the Registrant and Paul R.
Leiske, dated March 25, 1999.

10.13+ Employment Agreement between the Registrant and Maurice A.
Trebuchon, dated October 27, 1999.
</TABLE>

II-7
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------------------------------------------------------
<S> <C>
10.14+ Form of Restricted Stock Award Agreement between the
Registrant and certain of its executive officers.

10.15+ Form of Promissory Note between the Registrant and certain
of its executive officers.

10.16+ Loan and Security Agreement, by and between Imperial Bank
and the Registrant, Frontec AMT, Inc. and Viewlocity AB,
dated November 26, 1999.

10.17+ Series B Convertible Preferred Stock Purchase Warrant, dated
March 12, 1999, between the Registrant and Battery Ventures
IV, L.P.

10.18+ Series B Convertible Preferred Stock Purchase Warrant, dated
March 12, 1999, between the Registrant and Battery
Investment Partners IV, LLC.

10.19+ Series B Convertible Preferred Stock Purchase Warrant, dated
April 9, 1999, between the Registrant and Battery Ventures
IV, L.P.

10.20+ Series B Convertible Preferred Stock Purchase Warrant, dated
April 9, 1999, between the Registrant and Battery Investment
Partners IV, LLC.

10.21+ First Amendment to Series B Convertible Preferred Stock
Purchase Warrant, dated May 24, 2000, between the
Registrant and Battery Ventures IV, L.P.

10.22+ First Amendment to Series B Convertible Preferred Stock
Purchase Warrant, dated May 24, 2000, between the
Registrant and Battery Investment Partners IV, LLC.

10.23+ First Amendment to Series B Convertible Preferred Stock
Purchase Warrant, dated May 24, 2000, between the
Registrant and Battery Ventures IV, L.P.

10.24+ First Amendment to Series B Convertible Preferred Stock
Purchase Warrant, dated May 24, 2000, between the
Registrant and Battery Investment Partners IV, LLC.

10.25+ Letter Agreement, dated May 24, 2000, between the Registrant
and Battery Ventures IV, L.P.

10.26+ Letter Agreement, dated May 24, 2000, between the Registrant
and Battery Investment Partners IV, LLC.

10.27+ Letter Agreement, dated May 24, 2000, between the Registrant
and Battery Ventures IV, L.P.

10.28+ Letter Agreement, dated May 24, 2000, between the Registrant
and Battery Investment Partners IV, LLC.

10.29+ Contingent Warrant for Purchase of Common Shares, dated
October 27, 1999, between the Registrant and William Street
Associates II, LLC.

10.30+ Warrant, dated November 12, 1999, between the Registrant and
CommVest, LLC.

10.31+ Warrant to Purchase Stock, dated November 26, 1999, between
the Registrant and Imperial Bancorp.

10.32+ Third Amended and Restated Registration Rights Agreement,
dated June 22, 2000, between the Registrant and the parties
named therein.

10.33+ Form of Indemnification Agreement to be entered into between
the Registrant and each of its executive officers and
directors.

10.34+ Stock Contribution Agreement dated February 23, 1999, by and
between Frontec AB and Arctic, Inc.

10.35+ Lease between CommVest, LLC and the Registrant, dated as of
November 12, 1999.

10.36+ Partner Agreement, dated as of November 1, 1999, between the
Registrant and Frontec AB.

10.37+ Viewlocity, Inc. 2000 Stock Incentive Plan.
</TABLE>

II-8
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------------------------------------------------------
<S> <C>
10.38+ OEM License Agreement, dated as of November 10, 1997,
between the Registrant and St. Paul Software, Inc. (n/k/a
TIE Commerce, Inc.).

10.39 First Amendment to OEM License Agreement, dated as of
October 25, 2000, between the Registrant and TIE Commerce,
Inc.

21.1+ List of Subsidiaries.

23.1 Consent of PricewaterhouseCoopers LLP, independent
accountants.

23.2 Consent of PricewaterhouseCoopers LLP, independent
accountants.

23.3 Consent of PricewaterhouseCoopers LLP, independent
accountants.

23.4 Consent of Morris, Manning & Martin, L.L.P. (included in
Exhibit 5.1).

24.1+ Powers of Attorney (included on signature page).

27.1+ Financial Data Schedule (for SEC use only).
</TABLE>

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

+ Previously filed.

* To be filed by amendment.

** The Registrant agrees to furnish supplementally a copy of any omitted
schedule or exhibit to the Securities and Exchange Commission upon request,
as provided in Item 601(b)(2) of Regulation S-K.

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement,
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

(b) 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 provisions of Item 14 of this Registration
Statement or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.

(i) 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.

(ii) 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-9
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 3rd day of November, 2000.

<TABLE>
<S> <C> <C>
VIEWLOCITY, INC.

BY: /S/ GREGORY CRONIN
-----------------------------------------
Gregory Cronin
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD
</TABLE>

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Chief Executive
/s/ GREGORY CRONIN Officer and Chairman of
------------------------------------------- the Board (Principal November 3, 2000
Gregory Cronin Executive Officer)

Senior Vice President and
/s/ STAN F. STOUDENMIRE Chief Financial Officer
------------------------------------------- (Principal Financial and November 3, 2000
Stan F. Stoudenmire Accounting Officer)

* Director
------------------------------------------- November 3, 2000
Leo Apotheker

* Director
------------------------------------------- November 3, 2000
William M. Stuek

* Director
------------------------------------------- November 3, 2000
Olof Englund

* Director
------------------------------------------- November 3, 2000
Mark E. Hastings

* Director
------------------------------------------- November 3, 2000
Scott R. Tobin
</TABLE>

<TABLE>
<S> <C> <C> <C>
*By: /s/ STAN F. STOUDENMIRE
--------------------------------------
Stan F. Stoudenmire
ATTORNEY-IN-FACT
</TABLE>
<PAGE>
INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------------------------------------------------------
<S> <C>
1.1* Form of Underwriting Agreement.

2.1+ Agreement and Plan of Merger between and among Viewlocity,
Inc., Nexstep Acquisition Corp., Nexstep, Inc., L. Michael
Handley and Mohamed Y. Amer dated January 21, 2000.**

3.1+ Amended and Restated Certificate of Incorporation of the
Registrant.

3.2+ Amended and Restated Bylaws of the Registrant.

4.2* Specimen Stock Certificate.

5.1* Opinion of Morris, Manning & Martin, L.L.P., Counsel to the
Registrant, as to the legality of the shares being
registered.

10.1+ Office Lease Agreement by and between EOP--Buckhead, L.L.C.
and the Registrant, dated November 5, 1999.

10.2+ First Amendment to Office Lease Agreement by and between
EOP--Buckhead, L.L.C., and the Registrant, dated November 5,
1999.

10.3+ English Translation of Lease Agreement by and between FAB
FISKETORGETgm MALAERTORNET AB and Frontec AMT AB, dated
October 1, 1999.

10.4+ Lease Agreement between CPL Alexandra Point Pte Ltd. and
Viewlocity Asia Pacific Pte Ltd., dated October 28, 1999.

10.5+ Assignment of Lease Agreement between Aspect
Telecommunications Limited and Frontec (UK) Limited, dated
December 18, 1998.

10.6+ Sublease Agreement dated as of May 8, 2000 between Zurn
Industries, Inc. and the Registrant.

10.7+ Viewlocity, Inc. Stock Incentive Plan, as amended.

10.8+ Employee Stock Purchase Plan of the Registrant.

10.9+ Employment Agreement between the Registrant and Gregory
Cronin, dated March 3, 1999.

10.10+ Employment Agreement between the Registrant and Stan F.
Stoudenmire, dated May 6, 1999.

10.11+ Employment Agreement between the Registrant and Jeffrey B.
Cashman, dated March 19, 1999.

10.12+ Employment Agreement between the Registrant and Paul R.
Leiske, dated March 25, 1999.

10.13+ Employment Agreement between the Registrant and Maurice A.
Trebuchon, dated October 27, 1999.

10.14+ Form of Restricted Stock Award Agreement between the
Registrant and certain of its executive officers.

10.15+ Form of Promissory Note between the Registrant and certain
of its executive officers.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------------------------------------------------------
<S> <C>
10.16+ Loan and Security Agreement, by and between Imperial Bank
and the Registrant, Frontec AMT, Inc. and Viewlocity AB,
dated November 26, 1999.