CHEMATCH COM INC, S-1/A, 2000-05-17

CHEMATCH COM INC
S-1/A, 2000-05-17
BUSINESS SERVICES, NEC

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 16, 2000

REGISTRATION NO. 333-31380
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 3

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CHEMATCH.COM, INC.
(Exact name of registration as specified in its charter)
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<TABLE>
<S> <C> <C>
DELAWARE 7375 76-0622635
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

2900 NORTH LOOP WEST, SUITE 1120
HOUSTON, TEXAS 77092
(713) 681-6600
ATTENTION: GENERAL COUNSEL
(Address, including zip code, and telephone number, including
area code, of the Registrant's principal executive offices)
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Copies to:

<TABLE>
<S> <C>
JOHN S. WATSON ROBERT F. GRAY, JR.
KEVIN P. LEWIS MICHAEL D. HANSEN
D. ALAN BECK SETH D. WEXLER
Vinson & Elkins L.L.P. Fulbright & Jaworski L.L.P.
1001 Fannin, Suite 2300 1301 McKinney, Suite 5100
Houston, Texas 77002 Houston, Texas 77010
(713) 758-2222 (713) 651-5151
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]

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

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

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

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

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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
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<PAGE> 2

DESCRIPTION OF ARTWORK

(1) Inside front page:

The following text appears in the center of the page: "The chemicals,
plastics and fuel products market is changing . . ."

(2) Left page of the gatefold:

A computer screen appears on this page displaying the current posting
screen of the CheMatch.com trading exchange. The page is as it appears
using a Netscape browser.

At the top left corner of the web page is the CheMatch.com corporate
logo. Directly to the right of the corporate logo is a row with the
following columns representing different web pages accessible by
members: Category / Activity / Specs / Current / Create / Completed /
Inactive / Summary / History.

The web page selected is "Current" - and presents a member with an
overview of the current postings on the CheMatch trading exchange. In
the middle of the screen, a chart appears with the following column
headings, some of which are abbreviated: Select / Trade / Product /
Specifications / Freight / Location / Quantity / Price / Delivery /
Comments. Eight current postings are listed on this screen including
two benzene postings, one cumene posting, two methanol postings, one
mixed xylenes posting, one PTA posting and one styrene posting. For
each posting, information is provided that relates to the column
headings.

For example, the first posting relates to benzene. The row relating to
this posting is highlighted in red to indicate that a counteroffer has
been made with respect to this posting. The current posting is as offer
to purchase 40Mbbl of benzene FOB Houston, Texas to be delivered in
April 2000 for a specified price per gallon with a ASTM 2359 LTLD
specification. The offeror has indicated the following in the
"Comments" column - "zero bromine required."

Below the chart is a row of buttons a member can select to access
additional information with respect to the current postings, including:
Respond / Inactive / Refresh / Logoff / Time Remaining. A legend exists
at the end of this column to provide additional information to members
for current postings. Recent postings are highlighted in green text,
postings made by the member viewing the screen are highlighted in
purple text, counters made by the member viewing the screen are
highlighted in yellow text, and countered postings are highlighted in
red text.

Below this row, in the bottom half of the screen, are "DeWitt Daily
Analytics." On this screen, a graph depicts the "DeWitt Index - U.S.
Xylenes Contract & Spot/Blend Values." On the side of the graph is the
following text: "The DeWitt index is used to monitor movement relative
to historical averages. The index also yields information pertaining to
present directional trends. On a contract basis, the index fell as
blendvalues increased for the week. The xylenes contract-to-blendvalue
ratio is 1.10, which 7% under the 5-year average. On a spot basis the

<PAGE> 3

index fell as well, with spot xylenes increasing only 0.9% while
blendvalues increased 14.8% maintaining the index's downward position.
Theoretically, the two curves should converge with the start of a new
contract month. This week's index values for contract and spot are 0.93
and 0.98, respectively. These numbers express the current ratio value
as a percentage of the corresponding 5-year average. - Marcus Dotson
2/25/00."

(3) Right page of the gatefold:

At the top of this page the following text appears: "Introducing the
CheMatch.com Marketplace - A global Internet exchange and information
resource for buying and selling bulk commodity chemicals, plastics and
fuel products."

Below this, the following text appears under the heading "CheMatch.com
Exchange":

o Internet-based exchange
o Real-time and interactive
o Third-party neutral
o Pre-selected, qualified trading partners
o Anonymous trading
o Confirmed transactions
o Global marketplace
o Defined product specifications
o Market information and analytics
o Auctions, reverse auctions and tenders

Below this, the following text appears under the heading "Our
Information Resource Center":

o Real-time chemical industry news
o Chemical product information
o Search capabilities
o NYMEX price and volume feeds
o Analysis of industry trends
o Foreign currency exchange data
o Research reports
o Newsletters and commentaries

Finally, the CheMatch.com corporate logo appears in the bottom right
corner of the page.

<PAGE> 4

WE WILL AMEND AND COMPLETE THE INFORMATION IN THIS PROSPECTUS. ALTHOUGH
WE ARE PERMITTED BY US FEDERAL SECURITIES LAWS TO OFFER THESE SECURITIES
USING THIS PROSPECTUS, WE MAY NOT SELL THEM OR ACCEPT YOUR OFFER TO BUY
THEM UNTIL THE DOCUMENTATION FILED WITH THE SEC RELATING TO THESE
SECURITIES HAS BEEN DECLARED EFFECTIVE BY THE SEC. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES OR OUR SOLICITATION OF YOUR OFFER TO
BUY THESE SECURITIES IN ANY JURISDICTION WHERE THAT WOULD NOT BE
PERMITTED OR LEGAL.

SUBJECT TO COMPLETION -- MAY 16, 2000

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PROSPECTUS

, 2000

[CHEMATCH.COM LOGO]

5,000,000 SHARES OF COMMON STOCK

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CHEMATCH.COM, INC.:

- - We are a business-to-business Internet-based marketplace for purchasers and
sellers of commodity chemicals, plastics and fuel products.

PROPOSED SYMBOL & MARKET:

- - CHEM/Nasdaq National Market

THE OFFERING:

- - We are offering 5,000,000 shares of our common stock.

- - The underwriters have an option to purchase an additional 750,000 shares of
common stock to cover over-allotments.

- - This is our initial public offering, and no public market currently exists for
our shares.

- - We anticipate that the initial public offering price will be between $10.00
and $12.00 per share.

- - Closing: , 2000.

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<TABLE>
<CAPTION>
Per Share Total
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<S> <C> <C>
Public offering price: $ $
Underwriting fees:
Proceeds to CheMatch.com, Inc.:
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</TABLE>

THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 6.

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Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
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DONALDSON, LUFKIN & JENRETTE

DEUTSCHE BANC ALEX. BROWN

SALOMON SMITH BARNEY

PAINEWEBBER INCORPORATED

DLJDIRECT INC.
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TABLE OF CONTENTS

<TABLE>
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PAGE
<S> <C>
Prospectus Summary................. 1
Risk Factors....................... 6
Special Note Regarding Forward
Looking Statements............... 17
Use of Proceeds.................... 18
Dividend Policy.................... 18
Capitalization..................... 19
Dilution........................... 20
Unaudited Pro Forma Statements of
Operations....................... 21
Selected Financial Data............ 23
Management's Discussion and
Analysis of Financial Condition
and Results of Operations........ 24
</TABLE>

<TABLE>
<CAPTION>
PAGE
<S> <C>
Business........................... 33
Management......................... 51
Related Party Transactions......... 65
Principal Stockholders............. 68
Description of Capital Stock....... 70
Shares Eligible for Future Sale.... 73
Underwriting....................... 75
Legal Matters...................... 78
Experts............................ 78
Change in Independent
Accountants...................... 78
Where You Can Find More
Information...................... 78
Index to Financial Statements...... F-1
</TABLE>
<PAGE> 6

PROSPECTUS SUMMARY

The following summary highlights selected information from this prospectus
and may not contain all the information that is important to you. To learn more
about the offering and our business, you should read the entire prospectus
including our financial statements and related notes appearing elsewhere in this
prospectus.

CHEMATCH.COM, INC.

OUR BUSINESS

Our trading exchange, located at www.chematch.com, was the first and is one
of the largest online exchanges serving the chemical industry. Over $200 million
in transactions have been traded on our exchange since February 1998, and over
$74 million in transactions were traded on our exchange in the quarter ended
March 31, 2000. In the first quarter of 2000, we averaged more than 150,000
metric tons of daily product bids and offers and the average transaction value
of completed trades exceeded $500,000. Benzene accounted for approximately 69%
of the physical trading volume on our exchange in fiscal 1999 and approximately
54% in the quarter ended March 31, 2000. We generate revenues on our trading
exchange from commissions typically paid by each party to a completed
transaction. During 1999, we had pro forma revenues of $0.4 million and a pro
forma net loss of $9.6 million. During the first quarter of 2000, we had
revenues of $0.1 million and a net loss of $6.3 million.

We have entered into strategic alliances with Bayer AG, Computer Sciences
Corporation, E.I. duPont de Nemours and Company, General Electric Company and
Muehlstein Holding Corporation to build our membership, to increase the trading
volume on our exchange and to generally enhance our trading exchange. In
addition, we have strategic relationships with Stolt-Nielsen Transportation
Group Ltd. to facilitate logistics, with DeWitt & Company, Incorporated and a
subsidiary of Reed Elsevier plc to provide information services, and with
eCredit.com and TownsendTarnell, Inc. to provide credit and other services. Some
of these strategic allies have and others may in the future invest in our
competitors and may reduce or discontinue their use or support of our
marketplace.

We maintain an extensive information resource center, located at
www.petrochem.net, that provides over 5,000 users access to industry news,
forums, reference materials and more than 100 offerings from a number of highly
respected chemical industry sources. We generate revenues through our
information resource center from commissions for subscriptions and other fees
paid by subscribers. Users may subscribe to market updates featuring chemical
industry news, pricing information and related statistics, over 40
product-specific consulting reports containing summaries of marketing and
pricing trends, and over 20 newsletters that detail market trends in the
chemical industry. In addition, the CheMatch trading screen integrates relevant
news, trends, commentaries and analyses from our information resource center.

OUR MARKET OPPORTUNITY

The Internet has emerged as a global communications medium enabling
businesses worldwide to communicate, share information and transact business
electronically. Businesses are increasingly using the Internet to streamline
complex processes, lower costs and improve efficiency by reducing traditional

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business communication barriers of time, geography and number of participants.
Forrester Research predicts that business-to-business electronic commerce, or
e-commerce, in the United States will grow from $109 billion in 1999 to over
$2.8 trillion in 2003.

The global chemical industry, which is comprised of three principal
segments -- commodities, specialties and life sciences -- is a $1.6 trillion
annual market. The commodity chemicals -- including basic industrial chemicals,
petrochemicals and agrichemicals -- and plastics market is the largest segment
of the global chemical industry, representing in excess of $700 billion of
products purchased and sold worldwide each year. Fuel products, an additional
market segment served by our exchange, represents over $100 billion of products
purchased and sold worldwide annually. The petrochemical industry is projected
by Forrester Research to be the third largest segment of the Internet economy in
the United States by 2003, growing from $27 billion in 2000 to $184 billion in
2003.

The traditional marketplace for commodity chemicals, plastics and fuel
products is characterized by a high degree of fragmentation, a lack of real-time
market information, geographic insularity and relatively illiquid markets. The
process of initiating, negotiating and completing a transaction is time
consuming and subjects the parties to market risk related to price fluctuations.
Communications between industry parties occur primarily by telephone and
facsimile and require significant paper documentation. These market limitations
create the need for a more efficient, information-based, business-to-business
online solution.

THE CHEMATCH SOLUTION

Our Internet-based marketplace has the following key features:

- Auctions, Reverse Auctions and Tenders. Our members can conduct auctions
to sell products, reverse auctions to buy products, and tenders in which
the winning bid can be chosen based on factors including non-price
considerations.

- Market Intelligence. We provide our members with real-time pricing and
other relevant market information, including news, trends, commentaries
and analyses, which enables them to trade on a more fully-informed basis.

- Global Reach. Our trading exchange is designed to create a global
marketplace that transcends time zones and established personal networks,
providing our members with expanded market reach.

- Qualified Traders and Products. We screen our members before they are
cleared to join and participate on our trading exchange. Each product or
grade of product traded on our exchange is required to meet defined
specifications such as chemical composition and other attributes
including content, color and purity.

- Anonymity. After pre-selecting the parties with whom they will trade, our
members bid, offer and negotiate online on an anonymous basis with
respect to other exchange members. Only upon the matching of a trade is
the identity of each party revealed and then only to the other party to
the transaction.

- Increased Liquidity and Velocity. We believe the efficiencies associated
with our marketplace will improve liquidity and increase trading volume
within our target market, which will enable our members to better manage
their capacity utilization and inventory.

- Reduced Cost Structure. We believe our trading exchange will allow our
members to reduce the expense and streamline the processes of
procurement, sales and marketing and administration.
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<PAGE> 8

- Reliability and Confirmation. We believe our members' ability to
pre-select the parties with whom they will trade and our system's online
documentation and confirmation procedures bring greater certainty to the
trading process as compared to other Internet-based trading systems on
which parties may not be able to limit their negotiating partners to
creditworthy or otherwise acceptable parties.

THE CHEMATCH STRATEGY

Our objective is to expand upon our position as a leading Internet-based
solution for purchasers and sellers of commodity chemicals, plastics and fuel
products. We intend to achieve this objective by implementing the following
strategies:

- increase the adoption of our trading exchange through our focused sales
and marketing efforts to promote liquidity within the market for
commodity chemicals, plastics and fuel products;

- expand the number of products eligible for trading on our exchange and
about which we offer market information;

- enhance functionality by offering various personalized services,
integrating our exchange with our members' administrative and operational
software systems and providing improved interactive content;

- implement recent strategic relationships to facilitate logistics and
offer credit services, and enter into additional strategic relationships
to provide financial risk management products;

- leverage our management's chemical industry expertise to increase the
adoption of our marketplace;

- maintain the integrity of our marketplace through our third-party neutral
approach;

- expand our international operations; and

- leverage existing and new technologies.

CHEMATCH.COM

CheMatch.com, Inc. was incorporated in Delaware on June 21, 1999 as
PetroChemNet Holdings, Inc. We acquired PetroChemNet, Inc. and CheMatch, Inc.
through a series of corporate transactions shortly after we were incorporated.
On November 29, 1999, we changed our name to CheMatch.com, Inc. We refer to the
consolidated company in this prospectus as CheMatch.

Our principal executive offices are located at 2900 North Loop West, Suite
1120, Houston, Texas 77092 and our telephone number is (713) 681-6600. We also
maintain domestic offices in New York, New York, San Ramon, California and
Stamford, Connecticut, and international offices in Brussels, Belgium, Hong
Kong, Manchester, England, Singapore, Tokyo, Japan and Zurich, Switzerland. We
also have a local representative in Sao Paulo, Brazil. Our web sites are located
at www.chematch.com and www.petrochem.net. The information contained on our web
sites is not incorporated by reference into this prospectus.

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THE OFFERING

Common stock offered.................... 5,000,000 shares

Common stock to be outstanding after
this offering........................... 21,528,282 shares

Use of proceeds......................... For general corporate purposes,
working capital, and potential
acquisitions and investments, and
payments to current and former
employees.

Proposed Nasdaq National Market
symbol.................................. CHEM

Unless otherwise indicated, the information in this prospectus:

- is based upon 5,234,482 shares of common stock outstanding as of March
31, 2000;

- assumes the net exercise of all convertible preferred stock warrants
immediately prior to the consummation of this offering;

- assumes the conversion of all outstanding shares of convertible preferred
stock into shares of common stock immediately prior to the consummation
of this offering;

- assumes the net exercise of 482,571 common stock warrants that would
otherwise expire upon the consummation of this offering into 423,961
shares of common stock;

- does not assume the issuance of 397,440 shares of common stock upon
exercise of outstanding warrants at a weighted average exercise price of
$3.33 per share that will remain outstanding upon consummation of this
offering;

- does not assume the issuance of 4,577,661 shares of common stock upon
exercise of outstanding options under our stock option plans at a
weighted average exercise price of $6.76;

- does not assume the issuance of 395,593 options available for grant under
our stock option plans; and

- does not assume the exercise of the underwriters' over-allotment option
to purchase up to 750,000 additional shares.

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SUMMARY FINANCIAL DATA

The following table presents summary unaudited consolidated financial data
for our business. The pro forma statement of operations data for the year ended
December 31, 1999 combine the historical statements of operations of CheMatch,
PetroChemNet, Inc. and CheMatch, Inc. as if the acquisition of PetroChemNet,
Inc. and CheMatch, Inc., which occurred on June 21, 1999, had been completed on
January 1, 1999. You should read the following summary unaudited consolidated
financial data together with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our consolidated financial statements
and related notes included elsewhere in this prospectus.

<TABLE>
<CAPTION>
PRO FORMA
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, 1999 MARCH 31, 2000
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA)
<S> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues................................................... $ 373 $ 93
Operating loss............................................. (9,801) (6,813)
Net loss................................................... (9,579) (6,331)
Net loss available to common stockholders.................. $ (39,084) $ (30,504)
========== ===========
Net loss per share, basic and diluted...................... $ (12.91) $ (6.34)
Pro forma net loss per share adjusted for the assumed net
exercise of all convertible preferred stock warrants, the
conversion of all convertible preferred stock and the net
exercise of 482,571 common stock warrants into 423,961
shares of common stock, basic and diluted................ (1.19) (0.39)
Shares used to compute net loss per share, basic and
diluted.................................................. 3,026,581 4,808,951
Shares used to compute pro forma net loss per share
adjusted for the assumed net exercise of all convertible
preferred stock warrants, the conversion of all
convertible preferred stock and the net exercise of
482,571 common stock warrants into 423,961 shares of
common stock, basic and diluted.......................... 8,068,888 16,102,751
</TABLE>

The following table presents summary consolidated balance sheet data as of
March 31, 2000. The unaudited pro forma balance sheet assumes the net exercise
of all outstanding warrants for the purchase of convertible preferred stock and
the conversion of all convertible preferred stock into shares of common stock
and includes the effect of the net exercise of 482,571 common stock warrants
into 423,961 shares of common stock. The pro forma as adjusted information
reflects the sale of 5,000,000 shares at a price of $11.00 and our proposed use
of the estimated net proceeds.

<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
(UNAUDITED) (UNAUDITED) (UNAUDITED)(1)
(IN THOUSANDS)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents............................ $27,752 $27,752 $78,652
Working capital...................................... 24,249 24,249 75,149
Total assets......................................... 37,849 37,849 88,749
Total convertible preferred stock.................... 91,124 -- --
Total stockholders' equity (deficit)................. (57,704) 33,420 84,320
</TABLE>

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(1) Does not include payment of up to $15 million to current and former
employees following this offering pursuant to a management incentive
agreement. At an average stock price of $11.00 over the 90 days following
the offering and assuming our current capitalization remains constant
through the 90th day, this payment would be $5.4 million.

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RISK FACTORS

Before you invest in our common stock, you should understand the high
degree of risk involved. You should consider carefully the following risks and
other information in this prospectus, including our combined financial
statements and related notes, before you decide to purchase shares of our common
stock. If any of the following risks actually occur, our business, financial
condition and operating results could be adversely affected. As a result, the
trading price of our common stock could decline and you may lose part or all of
your investment.

RISKS RELATED TO OUR BUSINESS

OUR LIMITED OPERATING HISTORY MAKES AN EVALUATION OF OUR BUSINESS AND OUR
PROSPECTS DIFFICULT.

Our predecessor company has operated since January 1997. We were
incorporated in connection with a series of corporate transactions in June 1999
and have a limited operating history. Prior to investing in our common stock,
you should consider the risks and difficulties that we face as an early stage
company with an unproven business model in a new and rapidly evolving e-commerce
market. Some of these specific risks and difficulties include:

- we depend substantially on an Internet-based trading exchange that has
been present in the market for a limited time and may not be successful;

- we depend substantially on commissions generated from purchases and sales
of commodity chemicals, plastics and fuel products on our trading
exchange and we may be unable to significantly increase revenues from
these commissions or generate revenues from other sources;

- we may be unable to significantly increase and maintain industry adoption
and use of our Internet-based solution for purchasing and selling
commodity chemicals, plastics and fuel products;

- we may be unable to develop and enhance the CheMatch.com brand;

- we may be unable to maintain existing or establish new relationships with
purchasers and sellers of commodity chemicals, plastics and fuel
products;

- we may be unable to adapt to rapidly changing technologies and developing
markets;

- we may be unable to effectively manage our rapidly expanding operations
and the increasing use of our trading exchange and related services; and

- we may be unable to attract, retain and motivate qualified personnel,
particularly people who understand our trading exchange and the
industries and products represented on it.

We have generated only immaterial revenues to date. Due to our limited
operating history, we believe that period-to-period comparisons of our revenues
and results of operations are not meaningful. As a result, you should not rely
on our revenues or results of operations for any prior period as an indication
of our future performance or prospects.

WE HAVE A HISTORY OF LOSSES AND EXPECT FUTURE LOSSES.

We have had substantial losses since our inception. We currently expect our
losses to increase in the future, and we cannot assure you that we will ever
achieve or sustain profitability. From June 21, 1999 through December 31, 1999,
we incurred a net loss of $8.4 million. During the first quarter of 2000, we had
a net loss of $6.3 million. The extent of future losses will depend, in part, on
the amount of growth in our revenue, which will depend primarily upon
commissions generated from the increased adoption of our trading exchange by
companies in the chemical industry. The extent of these losses will also depend,
in part, on the amount of growth in our operating expenses, which we plan to
increase. Additionally, pursuant to a management incentive agreement, we will
incur costs of up to $15 million as a result of payments to current and former
employees following this offering. If our revenues grow more slowly than
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we anticipate, or our operating expenses increase without a corresponding
increase in our revenues, or we fail to keep operating expense levels down, the
imbalance between revenues and operating expenses will negatively affect our
business, revenues, results of operations and financial condition.

OUR BUSINESS MODEL IS UNPROVEN AND MAY NOT BE SUCCESSFUL.

Our business-to-business Internet-based model is based on the establishment
of our trading exchange as a viable alternative to the traditional methods of
transacting business for purchasers and sellers of commodity chemicals, plastics
and fuel products such as using phone brokers or contacting multiple parties to
find the best prices. This business model is new and not proven. We cannot be
certain that our business model will be successful or that we can achieve or
sustain revenue growth or generate any profits. We must develop and market our
trading exchange and achieve broad market acceptance by the chemical industry
for our business model to succeed. We cannot be certain that a market for
business-to-business commerce on the Internet generally, or our marketplace in
particular, will emerge, grow or be sustainable. For example, industry
participants may not adopt an Internet-based solution because of their comfort
with traditional purchasing and selling habits and long-term relationships, the
costs and resources required to switch trading methods, the need for products
not offered on our trading exchange, security and privacy concerns, or general
reticence about technology or the Internet.

WE MAY NOT BE ABLE TO ATTRACT A SUFFICIENT NUMBER OF PURCHASERS AND SELLERS TO
OUR EXCHANGE TO GENERATE LIQUIDITY IN THE PRODUCTS TRADED ON OUR EXCHANGE.

Our business model depends in part on our ability to attract a sufficient
number of purchasers and sellers of commodity chemicals, plastics and fuel
products to create adequate liquidity in the products traded on our exchange.
Our current and prospective members must perceive value in our marketplace
which, in large part, depends upon the breadth of the products available for
trading on our exchange and the services we provide. A key component of our
strategy is creating a network effect, where the value to purchasers and sellers
increases as the number of members to our marketplace increases. If we are
unable to increase the number of purchasers and sellers in our marketplace by
drawing new members, we will not be able to benefit from this network effect. As
a result, the overall value of our Internet-based solution would be harmed,
which would negatively affect our business, revenues, results of operations and
financial condition.

OUR SALES CYCLE IS LONG AND UNCERTAIN AND MAY NOT RESULT IN REVENUES.

A significant amount of time may elapse from the time we make initial
contact with a company we have targeted as a potential member of our marketplace
and the time that company executes a membership agreement enabling it to trade
on our exchange. Our membership agreement does not obligate our members to trade
on our exchange and its execution may not result in future revenues. Further, we
must educate our current and potential members on the use and benefits of our
online marketplace. We need to spend a significant amount of time with multiple
decision makers in a prospective member's organization to sell our marketplace.
If we are unable to attract new members willing to adopt our marketplace for
trading commodity chemicals, plastics and fuel products and purchase the
services we offer, then our business will be adversely affected.

IF THE TRANSACTION VOLUME ON OUR TRADING EXCHANGE DOES NOT GROW, IT IS UNLIKELY
THAT WE WILL EVER ACHIEVE OR MAINTAIN PROFITABILITY.

We depend heavily on commissions generated from purchases and sales of
commodity chemicals, plastics and fuel products on our trading exchange. From
February 1998 through May 12, 2000, 56 of our members completed a trade on our
trading exchange. These members have completed 287 transactions. Our business
model calls for a majority of our revenues in the future to be generated from
transactions completed on our trading exchange. Our inability to increase the
number of transactions completed on our trading exchange will negatively affect
our business, revenues, results of operations and financial condition.

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WE HAVE PROVIDED SOME OF OUR MEMBERS WITH INCENTIVES TO TRADE ON OUR EXCHANGE
THAT MAY HAVE THE EFFECT OF TEMPORARILY INCREASING THE LEVEL OF ACTIVITY ON OUR
TRADING EXCHANGE WITHOUT CORRESPONDING REVENUES.

We have provided some of our members with trading concessions and other
incentives to transact business on our trading exchange. In addition, some of
our strategic alliance agreements provide our strategic allies with trading
concessions in future periods to encourage their use of our exchange. In the
near term, these concessions and incentives may temporarily increase the level
of activity on our trading exchange without generating a corresponding increase
in revenue. Additionally, these companies may discontinue their support or use
of our trading exchange when these agreements expire or are terminated. Of the
56 members who have completed trades on our exchange through May 12, 2000,
eleven have received discounts or other incentives of varying levels to transact
business on our exchange.

A SIGNIFICANT PORTION OF OUR REVENUES ARE CURRENTLY GENERATED FROM A RELATIVELY
SMALL NUMBER OF MEMBERS.

In fiscal 1999, three of our members accounted for more than 38% of our
trading exchange revenues and, in the three months ended December 31, 1999, five
of our members accounted for more than 62% of our trading exchange revenues. We
may continue to derive a significant portion of our revenues from a relatively
small number of members. The loss of any of these members may adversely affect
our business, results of operations or financial condition.

DURING THE LAST FISCAL YEAR, MORE THAN TWO-THIRDS OF THE TRANSACTION VOLUME ON
OUR EXCHANGE INVOLVED BENZENE; IF WE ARE NOT ABLE TO INCREASE MARKET PENETRATION
IN OTHER PRODUCTS WE MAY FAIL.

In fiscal 1999, approximately 69% of the physical transaction volume of
trades on our exchange involved benzene. In the three months ended March 31,
2000, approximately 54% of the physical transaction volume of trades involved
benzene. We may continue to derive a significant portion of our revenues from
trades involving benzene. If a diversity of commodity chemicals, plastics and
fuel products are not traded on our exchange, our business may not be
successful.

WE MAY NOT BE ABLE TO COMPETE AGAINST OUR ONLINE COMPETITORS AND OTHER LARGE AND
EMERGING COMPANIES.

The market for Internet-based, business-to-business commerce solutions is
extremely competitive. Our online competitors include Autobase Information
Systems Inc. (efuel.com), ChemConnect, Inc., ChemCross.com, Inc., Commerce One,
Inc., Commerx, Inc. (PlasticsNet.com), e-Chemicals Inc., fob.com, FreeMarkets,
Inc., PurchasePro.com., Inc., VerticalNet, Inc. and their respective affiliates.
We may also face competition from large, established chemical companies. We
expect competition to intensify as our current online competitors expand their
product offerings. There are relatively low barriers to entry in our market. We
expect additional competition from emerging or established companies to develop,
and our members may adopt the solutions of these competitors as the cost of
switching is low. We cannot assure you that we will be able to compete
successfully against current or future competitors, or that competitive
pressures we face will not harm our business, operating results or financial
condition.

OUR COMPETITORS MAY DEVELOP SOLUTIONS THAT ACHIEVE GREATER MARKET ACCEPTANCE
THAN OUR MARKETPLACE.

Our competitors may be able to negotiate alliances with strategic partners
on more favorable terms than we are able to negotiate. Some of our strategic
allies and other members have and others may in the future invest in our
competitors and may reduce or discontinue their use or support of our
marketplace. Our competitors may develop superior solutions that achieve greater
market acceptance than our marketplace. Our members may adopt our competitors'
solutions as the cost of switching is low. Further, some of these competitors
have long operating histories in the chemical industry, greater name
recognition, an established network of potential users and significantly greater
financial, technical and marketing resources than we do. These companies would
be able to undertake more extensive marketing campaigns for their Internet-based
solution and adopt more aggressive pricing policies in attracting potential
users of their solution. For these reasons, our ability to compete effectively
against these enterprises is uncertain.

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THE SUCCESS OF OUR MARKETPLACE DEPENDS ON OUR ABILITY TO REMAIN NEUTRAL, AND IF
WE ARE PERCEIVED TO FAVOR ONE MEMBER OVER ANOTHER, OUR MARKETPLACE MAY NOT
ACHIEVE ACCEPTANCE.

We must provide a neutral, unbiased marketplace to attract members to
conduct business on our trading exchange. If members perceive that our
marketplace favors certain members over others, or that a particular member
could influence our marketplace, then our reputation could be damaged. This
perception of bias may cause current and potential members to lose confidence in
our marketplace and to conduct their business in other marketplaces. Upon
completion of this offering, E.I. duPont de Nemours and Company will own 9.1% of
our outstanding shares and such ownership may create the perception that we do
not provide a neutral and unbiased marketplace. Any actual or perceived bias
could negatively impact our ability to attract and maintain current and
potential members.

IF WE ARE UNABLE TO RESPOND TO RAPID TECHNOLOGICAL CHANGES ASSOCIATED WITH
INTERNET-BASED SOLUTIONS, WE MAY LOSE MEMBERS TO OUR COMPETITORS.

The market for our trading exchange is likely to be characterized by rapid
technological advances in the hardware and software markets and changes in our
members' and the market's requirements. As a result, our future success depends
upon our ability to enhance our marketplace through technological advances and
where necessary to adapt our trading exchange to our members' and the market's
specific needs. If we are not able to maintain a reliable, scalable technology
platform that can rapidly incorporate technological advances and that meets the
needs of our members and the market, we may lose members to our competitors who
are able to provide a technologically advanced solution that meets the needs of
purchasers and sellers of commodity chemicals, plastics and fuel products.

IF WE ARE NOT ABLE TO DETERMINE OR DESIGN THE FEATURES AND FUNCTIONALITY THAT
COMPANIES REQUIRE OR PREFER, WE MAY NOT BE ABLE TO ATTRACT MEMBERS AND MAY LOSE
CURRENT MEMBERS TO COMPETITORS.

Our success depends upon our ability to accurately determine the features
and functionality that our members require or prefer in a business-to-business
Internet-based marketplace. We may lack the ability to successfully design and
implement these features and functionality. We have designed our marketplace
based upon internal design efforts and feedback from a relatively limited number
of members. We cannot be certain, however, that the features and functionality
we offer through our marketplace, or those that we may offer in future, will
satisfy the requirements or preferences of our current or target members. If we
are unable to determine or design the features and functionality that members
require or prefer in a business-to-business Internet-based marketplace, we may
not be able to attract members and may lose current members to our competitors
who are able to provide those features and functionality.

OUR MEMBERS MAY ABANDON OUR MARKETPLACE IF WE EXPERIENCE HARDWARE OR SOFTWARE
FAILURES.

A significant disruption in our trading exchange could seriously undermine
our members' confidence in our business. Our members hold us to a high standard
of reliability and performance. We have experienced brief service interruptions
on our trading exchange. These interruptions undermine current and prospective
members' confidence in the reliability of our marketplace. Operating a
successful online marketplace requires the successful technical operation of an
entire chain of software, hardware and telecommunications equipment. A failure
of any element in this chain may partially or completely disrupt transactions on
our exchange and access to our information resource center. We may have members
operating outside North America who use older or inferior technologies, which
may not operate properly. In addition, our hardware and software systems are
vulnerable to interruption from power failures, telecommunications outages,
network service outages and disruptions, natural disasters, and vandalism and
other misconduct. If we experience hardware or software failures, our members
may abandon our marketplace.

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IF WE DO NOT ADEQUATELY MAINTAIN OUR MEMBERS' CONFIDENTIAL INFORMATION, OUR
REPUTATION COULD BE HARMED AND WE COULD INCUR LEGAL LIABILITY.

Any breach of security relating to our members' confidential information
could result in legal liability for us and a reduction in use of our trading
exchange by our members, which could materially harm our business. Our personnel
receive highly confidential information from our members that is stored in our
files and on our computer systems. For example, we receive sensitive pricing and
other information that could be valuable to our members' competitors if
misappropriated. We enter into standard non-disclosure agreements with all of
our members.

Our security procedures may fail to adequately protect information that we
are obligated to keep confidential. We may be unable to successfully adopt
effective systems for maintaining confidential information. The risk of
disclosing confidential information may grow as we add more members to our
trading exchange. If we fail to adequately maintain our members' confidential
information, some of our members could end their business relationships with us
and we could be subject to legal liability. This would adversely affect our
business, results of operations and financial condition.

OUR NEW MANAGEMENT TEAM MAY NOT OPERATE EFFECTIVELY OR SUCCESSFULLY IMPLEMENT
OUR BUSINESS PLAN.

We have only recently assembled our management team and instituted a
management control structure. Almost all of our executive officers have joined
our management team since June 1999. We cannot guarantee that our new management
team will be able to operate effectively or implement successfully our business
model. Our new management team's ability to manage our growth depends upon many
factors, including its ability to:

- maintain appropriate procedures, policies and systems to ensure that our
marketplace operates in accordance with our member's expectations;

- satisfy our need for additional financing on reasonable terms; and

- manage the costs associated with expanding our infrastructure, including
our marketplace, personnel and facilities.

If management cannot successfully execute our strategic initiatives, our
business may not be successful.

THE LOSS OF KEY PERSONNEL WOULD NEGATIVELY IMPACT OUR BUSINESS.

Our expansion and development will be largely dependent upon the continued
services of the following members of our new management team: Carl McCutcheon,
our Chairman, President and Chief Executive Officer, Lawrance McAfee, our
Executive Vice President and Chief Financial Officer, Fred Cook, our Senior Vice
President and General Manager - North America and our other senior executives.
The loss of the services of Mr. McCutcheon, who has significant commodities
trading experience, Mr. McAfee, who has significant experience in corporate
finance and mergers and acquisitions, or Mr. Cook, who has significant chemical
trading experience and is the founder of our exchange, could have a material
adverse effect on our business.

A PORTION OF THE PROCEEDS FROM THIS OFFERING WILL BE PAID TO CURRENT AND FORMER
MEMBERS OF OUR MANAGEMENT AND WILL THEREFORE NOT BE AVAILABLE TO FUND OUR
OPERATIONS.

Pursuant to a management incentive agreement, Mr. McCutcheon, Mr. McAfee
and other current and former members of our management may receive a large cash
payment shortly after this offering. The total payment, up to a maximum of $9
million to members of current management, and up to a maximum of $6 million to
former members of management, will be based upon the average daily closing price
of our common stock for the 90 day period immediately following the consummation
of this offering and the number of shares of common stock outstanding on a fully
diluted basis on the 90th day following the consummation of this offering. If we
are required to make the maximum payment under this agreement,
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<PAGE> 16

Mr. McCutcheon and Mr. McAfee will receive $3 million and $2.25 million,
respectively. The receipt of these amounts by Mr. McCutcheon, Mr. McAfee or
other current members of our management following this offering may hinder our
ability to retain them. Any amounts paid to these individuals will not be
available to fund our operations.

OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT, DEVELOP AND RETAIN
QUALIFIED PERSONNEL.

Our future success depends in large part on our ability to hire, train and
retain qualified employees. Any inability to hire, train and retain a sufficient
number of qualified employees could hinder the growth of our business. Skilled
personnel are in short supply, and this shortage is likely to continue for some
time. As a result, competition for these people is intense, and the industry
turnover rate for them is high. Consequently, we may have difficulty hiring our
desired numbers of qualified employees. Moreover, even if we are able to expand
our employee base, the resources required to attract and retain employees may
adversely affect our operating margins by increasing expenses associated with
our employees.

IF WE FAIL TO MANAGE OUR BUSINESS EFFECTIVELY, OUR REVENUES AND RESULTS OF
OPERATIONS MAY NOT MEET MEMBER AND INVESTOR EXPECTATIONS.

We have rapidly expanded our operations and expect to continue to do so.
This growth has placed, and is expected to continue to place, a significant
demand on our sales, marketing, managerial, operational, financial and other
resources. If we cannot manage our growth effectively, it is likely that our
revenues and results of operations will not meet investor expectations. From
June 21, 1999 through March 31, 2000, we grew from 13 to 64 employees. We expect
to hire a number of new employees to support our business. Our current
information systems, procedures and controls may not be adequate to support our
operations which would hinder our ability to exploit the market for trading
commodity chemicals, plastics and fuel products over the Internet.

WE MAY NOT BE ABLE TO INTEGRATE SUCCESSFULLY BUSINESSES OR TECHNOLOGIES THAT WE
MAY ACQUIRE IN THE FUTURE.

We may acquire businesses, technologies, services or products that we
believe are strategic to or complement our business-to-business Internet-based
business model. We do not currently have any understandings, commitments or
agreements with respect to any acquisition, nor are we currently pursuing any
acquisition. We may not be able to identify, negotiate or finance any future
acquisition successfully. Even if we do succeed in acquiring a business,
technology, service or product, we have no experience in integrating an
acquisition into our business. The process of integration may produce unforeseen
operating difficulties and expenditures and may absorb significant attention of
our management that would otherwise be available for the ongoing development of
our business. Moreover, we may not achieve any of the benefits that we might
anticipate from a future acquisition. If we make future acquisitions, we may
issue shares of stock that dilute other stockholders, incur debt, assume
contingent liabilities or create additional expenses related to amortizing
goodwill and other intangible assets, any of which might harm our financial
results and cause the price of our stock to decline. Any financing that we might
need for future acquisitions may only be available to us on terms that restrict
our business or that impose on us costs that reduce our net income.

OUR INTERNATIONAL OPERATIONS WILL BE EXPENSIVE AND MAY NOT SUCCEED.

We have limited experience in marketing, selling and supporting our
marketplace in foreign countries. The acquisition and development of those
skills may be more difficult or take longer than we anticipate, especially due
to language barriers and the fact that the Internet infrastructure in foreign
countries may be less developed than the Internet infrastructure in the United
States. To date, we have not generated significant revenues from international
members. We currently maintain international offices in Brussels, Belgium, Hong
Kong, Manchester, England, Singapore, Tokyo, Japan and Zurich, Switzerland. We
also have a local representative in Sao Paulo, Brazil. We intend to expand our
international operations by opening additional international offices and hiring
additional international management, sales, marketing and support personnel.

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We may be unable to successfully market, sell, and support our marketplace
internationally. If we are unable to expand our international operations
successfully and in a timely manner, our business could be seriously harmed. We
will need to devote significant management and financial resources to our
international expansion. In particular, we will have to attract and retain
management, sales, marketing and support personnel for our international
offices. Competition for personnel experienced in these areas is intense, and we
may be unable to attract and retain qualified staff.

OUR INTERNATIONAL OPERATIONS ARE SUBJECT TO A VARIETY OF RISKS THAT COULD HARM
OUR FINANCIAL CONDITION AND OPERATING RESULTS.

Our international operations are subject to a variety of additional risks
that could seriously harm our financial condition and operating results. These
risks include the following:

- the establishment of a market for Internet-based trading of commodity
chemicals and other products internationally;

- global economic events;

- fluctuations in foreign currencies;

- unexpected changes in regulatory requirements;

- longer payment cycles and problems collecting accounts receivable;

- reduced protection for intellectual property and proprietary rights in
some countries; and

- seasonal fluctuations in business activity in some international regions.

WE MAY NOT BE ABLE TO CONTINUE TO FACILITATE SWAP TRANSACTIONS ON OUR EXCHANGE,
AND WE COULD BE EXPOSED TO CLAIMS BY OUR MEMBERS OR REGULATORY-IMPOSED FINES OR
PENALTIES.

We facilitate trading in financial derivatives known as swap agreements, in
which the parties exchange cash payments with reference to changes in the price
of a commodity or another agreed benchmark. The Commodity Exchange Act requires
that trading in many instruments regulated by the U.S. Commodity Futures Trading
Commission (CFTC) must be confined to CFTC-regulated "contract markets."
However, swap agreements that meet the CFTC's exemption standards or its policy
statements regarding swaps may be offered and entered into without using a
designated contract market. While the exemption standards are not free from
ambiguity as they apply to online exchanges such as ours, we believe that our
swap program complies with these standards. In particular, we believe that the
participants on our exchange meet the criteria of "eligible swap participants"
as defined by the CFTC. Further, after matching offered terms on our exchange,
participants must enter into bilateral swap agreements offline in order to
create legally binding swap transactions. Moreover, we believe that our program
to facilitate swap transactions conforms with the CFTC's swaps policy statement.
While we have obtained the advice of counsel regarding these issues, we have not
obtained a written opinion of counsel nor have we sought one. Any written
opinion would not be binding on either the CFTC or any party to a swap
transaction and would have to reflect the ambiguity in current regulations as
applied to online exchanges such as ours. Accordingly, we believe a written
opinion of counsel would be of limited utility. If the CFTC or a member of our
exchange were to take the position that the swap agreements entered into by
members on our exchange are required to be entered into using a designated
contract market and if that position were sustained by a court having
jurisdiction over us or our members, we could not continue to offer a swap
program, and the swap agreements previously entered into could be unenforceable,
possibly resulting in claims against us and the counterparties to those
transactions. Furthermore, the CFTC might seek fines and penalties against us.
The mere threat of such a challenge by the CFTC might cause us to cease
facilitating the trading of swap agreements. Furthermore, if the CFTC were to
take other adverse actions, such as effecting a change in CFTC rules or policies
that would prohibit us from facilitating swap transactions, or if Congress were
to amend the Commodity Exchange Act in an adverse manner, our ability to offer a
swap program could be

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impaired or foreclosed. The occurrence of any of these events would adversely
affect our business, results of operations and financial condition.

WE COULD INCUR LIABILITY AS A RESULT OF OUR ARRANGING FOR THE TRANSPORTATION OF
PRODUCTS PURCHASED AND SOLD ON OUR TRADING EXCHANGE.

As an additional service for our members, we plan in the future to assist
in arranging for the transportation of the commodity chemicals, plastics and
other products purchased and sold on our trading exchange. While we will not
take title to these products, we intend to provide one or more hyperlinks from
our trading exchange web site to web sites operated by one or more transporters
of products purchased and sold on our trading exchange. We believe our
contractual arrangements with these transporters provide us with full
indemnification against any claims made against us. By arranging for
transportation of these products, however, we could become subject to claims for
environmental cleanup costs, property damages or personal injuries in connection
with a release or spill of these products while they are in transit. Any such
claim may result in considerable expense to us and divert our management's
attention from our business and, in the event that our contractual rights are
not upheld in court, may subject us to significant liability.

WE MAY BECOME SUBJECT TO LIABILITY FOR INFORMATION DISPLAYED ON OUR WEB SITES
THAT REQUIRES US TO DEFEND AGAINST LEGAL CLAIMS.

An array of information resources are available on our web sites to our
exchange members and users of our information resources. We may be subject to
claims for defamation, libel, copyright or trademark infringement or based on
other theories relating to the information we publish on our web sites. These
types of claims have been brought, sometimes successfully, against online
services as well as other print publications in the past. We could also be
subject to claims based upon the content that is accessible from our web sites
through links to other web sites. Our insurance may not adequately protect us
against these claims. Any costs incurred as a result of these claims could
negatively affect our business, revenues, results of operations and financial
condition.

WE MAY INCUR SIGNIFICANT COSTS TO DEFEND OR ESTABLISH OUR INTELLECTUAL PROPERTY
AND PROPRIETARY RIGHTS.

We cannot guarantee that the steps we have taken or will take to protect
our proprietary rights will be adequate to deter misappropriation of our
intellectual property. In addition, we may not be able to detect unauthorized
use of our intellectual property and take appropriate steps to enforce our
rights. If third parties infringe or misappropriate our trade secrets,
copyrights, trademarks or other proprietary information, our business could be
seriously harmed. In addition, although we believe that our proprietary rights
do not infringe the intellectual property rights of others, other parties may
assert infringement claims against us or claim that we have violated their
intellectual property rights. Infringement claims, even if not true, could
result in significant legal and other costs and may be a distraction to
management. In addition, protection of intellectual property in many foreign
countries is weaker and less reliable than in the United States, so if our
business expands into foreign countries, risks associated with protecting our
intellectual property will increase.

UNDETECTED YEAR 2000 COMPLIANCE ISSUES COULD STILL HARM OUR BUSINESS.

Our business may suffer as a result of defects relating to Year 2000
compliance issues that have not yet been detected. The hardware and software
systems that are central to our marketplace are vulnerable to interruption from
power failures, telecommunications outages, and network service outages. Our
trading exchange and information resource center could fail to function properly
in the event that third party service providers we rely upon encounter Year 2000
problems. If this happens, it could result in liability to us or adversely
affect our business, revenues, results of operations and financial condition.

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RISKS RELATED TO INTERNET-BASED BUSINESSES

OUR SUCCESS DEPENDS ON THE CONTINUED ADOPTION OF THE INTERNET AS A MEANS FOR
COMMERCE.

Our future success depends heavily on the continued adoption of the
Internet as a means for commerce. The widespread acceptance and adoption of the
Internet for conducting business is likely only in the event that the Internet
provides businesses with greater efficiencies and other advantages. If commerce
on the Internet does not continue to grow, or grows more slowly than expected,
our growth would decline and our business would be seriously harmed. Businesses
may reject the Internet as a viable commercial medium for a number of reasons,
including:

- potentially inadequate network infrastructure;

- delay in the development of Internet enabling technologies and
performance improvements;

- delay in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity;

- delay in the development of security and authentication technology
necessary to effect secure transmission of confidential information;

- change in, or insufficient availability of, telecommunications services
to support the Internet; and

- failure of companies to meet their customers' expectations in delivering
goods and services over the Internet.

INCREASING GOVERNMENT REGULATION COULD AFFECT OUR BUSINESS.

We are subject to laws and regulations directly applicable to general
business as well as e-commerce. State, federal and foreign governments may adopt
new and cumbersome laws and regulations relating to e-commerce. Any such
legislation or regulation could dampen the growth of the Internet and decrease
its acceptance as a communications and commercial medium. If such a decline
occurs, companies may decide in the future not to use our services as an
electronic business channel. This decrease in the demand for our services would
seriously harm our business and operating results.

Any new laws and regulations may govern or restrict any of the following
issues:

- user privacy;

- the pricing and taxation of goods and services offered over the Internet;

- the content of web sites;

- consumer protection; and

- the characteristics and quality of products and services offered over the
Internet.

SECURITY RISKS AND CONCERNS MAY DETER THE USE OF THE INTERNET FOR CONDUCTING
COMMERCE.

Concern about the security of the transmission of confidential information
over public networks is a significant barrier to e-commerce and communication.
Advances in computer capabilities, new discoveries in the field of cryptography
or other events or developments could result in compromises or breaches of
Internet security systems that protect proprietary information. If any
well-publicized compromises of security were to occur, they could substantially
reduce the use of the Internet for commerce and communications.

Anyone who circumvents our security measures could misappropriate
proprietary information or cause interruptions in our services or operations.
Our activities involve the storage and transmission of proprietary information,
such as confidential buyer and supplier information. The Internet is a public
network, and data is sent over this network from many sources. In the past,
computer viruses have been distributed and have rapidly spread over the
Internet. Computer viruses could be introduced into our systems or those of
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<PAGE> 20

our members, which could disrupt our trading exchange technology or make it
inaccessible to our members. We may be required to expend significant capital
and other resources to protect against the threat of, or to alleviate problems
caused by, security breaches and the introduction of computer viruses. Our
security measures may be inadequate to prevent security breaches or combat the
introduction of computer viruses, either of which may result in loss of data,
increased operating costs, litigation and possible liability.

RISKS RELATED TO THIS OFFERING AND THE SECURITIES MARKETS

OUR STOCK WILL LIKELY BE SUBJECT TO SUBSTANTIAL PRICE AND VOLUME FLUCTUATIONS
THAT MAY PREVENT YOU FROM RESELLING YOUR SHARES AT A PROFIT.

The securities markets have experienced significant price and volume
fluctuations, and the market prices of the securities of technology and Internet
companies have been especially volatile. This market volatility, as well as
general economic, market or political conditions, could reduce the market price
of our common stock in spite of our operating performance. The market price of
our common stock after this offering may vary significantly from the initial
offering price in response to any of the following factors, some of which are
beyond our control:

- changes in financial estimates or investment recommendations by
securities analysts relating to our stock;

- changes in market valuations of other e-commerce marketplaces, software
and service providers or other electronic businesses;

- announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;

- loss of significant members;

- additions or departures of key personnel; and

- fluctuations in the stock market price and volume of traded shares
generally, especially fluctuations in the traditionally volatile
technology and Internet sectors.

Investors may be unable to resell their shares of our common stock at or
above the offering price. In the past, companies that have experienced
volatility in the market price of their stock have been the object of securities
class action litigation. If we were the object of securities class action
litigation, it could result in substantial costs and a diversion of management's
attention and resources.

WE HAVE BROAD DISCRETION IN HOW WE USE THE PROCEEDS OF THIS OFFERING, AND WE MAY
NOT USE THE PROCEEDS EFFECTIVELY.

Our management could spend the proceeds from this offering in ways with
which our stockholders may not agree. Our primary purpose in conducting this
offering is to create a public market for our common stock. As of the date of
this prospectus, we plan to use the proceeds from this offering for working
capital and other corporate purposes as described under "Use of Proceeds"
elsewhere in this prospectus. We may also use the proceeds in future strategic
acquisitions but do not at present have any acquisitions planned. Until we need
to use the proceeds of this offering, we plan to invest the net proceeds in
short-term, investment grade, interest-bearing securities. We cannot predict
that the proceeds from this offering will be invested to yield a favorable
return.

OUR OFFICERS AND DIRECTORS AND AFFILIATED PERSONS INFLUENCE OUR BUSINESS AND
HOLD A SUBSTANTIAL PORTION OF OUR STOCK AND COULD REJECT MERGERS OR OTHER
BUSINESS COMBINATIONS THAT YOU MAY BELIEVE ARE DESIRABLE.

We anticipate that our executive officers, directors and individuals or
entities affiliated with our executive officers and directors will beneficially
own approximately 52% of our outstanding common stock
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<PAGE> 21

as a group following the consummation of this offering. Acting together, these
stockholders would be able to significantly influence matters that our
stockholders vote upon, including the election of directors and mergers or other
business combinations.

WE MAY NEED TO RAISE ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE.

We expect that the net proceeds from this offering and our existing cash
balances will be sufficient to meet our working capital and capital expenditure
needs excluding acquisitions for at least two years. After that, we may need to
raise additional funds, and we cannot be certain that we will be able to obtain
additional financing on favorable terms or at all. If we need additional capital
and cannot raise it on acceptable terms, we may not be able to:

- open new offices;

- create additional market-specific business units;

- enhance our infrastructure and leveragable assets;

- hire, train and retain employees;

- respond to competitive pressures or unanticipated requirements; or

- pursue acquisition opportunities.

Our failure to do any of these things could seriously harm our financial
condition. Further, any additional capital raised through the sale of equity may
dilute your ownership percentage in us.

WE HAVE VARIOUS MECHANISMS IN PLACE TO DISCOURAGE TAKEOVER ATTEMPTS, WHICH MAY
REDUCE OR ELIMINATE YOUR ABILITY TO SELL YOUR SHARES FOR A PREMIUM IN A CHANGE
OF CONTROL TRANSACTION.

Various provisions of our certificate of incorporation and bylaws may
discourage, delay or prevent a change in control of CheMatch that a stockholder
may consider favorable. These provisions include:

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

- prohibiting cumulative voting in the election of directors, which would
otherwise allow less than a majority of stockholders to elect director
candidates;

- requiring super-majority voting to effect certain amendments to our
certificate of incorporation and bylaws;

- limiting who may call special meetings of stockholders;

- prohibiting stockholder action by written consent, which requires all
actions to be taken at a meeting of the stockholders; and

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

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW MAY INHIBIT POTENTIAL
ACQUISITION BIDS.

Section 203 of the Delaware General Corporation Law may inhibit potential
acquisition bids for our company. Upon completion of this offering, we will be
subject to the antitakeover provisions of the Delaware General Corporation Law,
which regulate corporate acquisitions. Delaware law will prevent us from
engaging, under certain circumstances, in a "business combination" with any
"interested stockholder" for three years following the date that the interested
stockholder became an interested stockholder unless our board of directors or a
supermajority of our uninterested stockholders agree. For purposes of Delaware
law, a "business combination" includes a merger or consolidation involving us
and the interested stockholder and the sale of more than 10% of our assets. In
general, Delaware law defines an "interested

16
<PAGE> 22

stockholder" as any holder beneficially owning 15% or more of the outstanding
voting stock of a corporation and any entity or person affiliated with or
controlling or controlled by the holder. Under Delaware law, a corporation may
opt out of the foregoing antitakeover provisions. We do not intend to opt out of
the antitakeover provisions of Delaware Law.

PURCHASERS IN THIS OFFERING WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION.

The initial public offering price of our common stock will be substantially
higher than the book value per share of our outstanding common stock. As a
result, if we were liquidated for book value immediately following this
offering, each stockholder purchasing in this offering would receive less than
the price they paid for their common stock.

FUTURE SALES OF OUR COMMON STOCK COULD CAUSE OUR STOCK PRICE TO DECLINE.

After this offering is completed, 21,528,282 shares of our common stock
will be issued and outstanding, assuming no exercise of the underwriters'
over-allotment option and assuming no granting or exercise of warrants or
options after March 31, 2000. All of the shares of our common stock sold in this
offering will be freely tradable unless purchased by our "affiliates." In
connection with this offering, our officers, directors and stockholders not
purchasing in the offering who together own approximately 16,284,382 shares of
our common stock agreed to refrain from selling any shares of our common stock
for a period of 180 days after the date of this prospectus. However, these
restrictions may be waived in some circumstances. We cannot be sure what effect,
if any, future sales of our common stock or the availability of shares for
future sale will have on the market price of our common stock. The market price
of our common stock could drop due to sales of a large number of shares of our
common stock in the market after this offering or the perception that these
sales could occur. These factors could also make it more difficult to raise
funds through future offerings of our common stock. There will be 21,528,282
shares outstanding upon the completion of this offering, of which 12,963,719
shares will become available for sale to the public 180 days from the date of
this prospectus, subject in some cases to volume limitations. The preceding
sentences assume that the early release provisions of applicable lock-up
agreements do not apply.

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and elsewhere in this prospectus constitute
forward-looking statements. We have based these forward-looking statements on
our current expectations, which are subject to known and unknown risks,
uncertainties and assumptions. They include statements relating to:

- future revenues, expenses and profitability;

- the development and growth of the business-to-business commerce over the
Internet;

- the perceived benefits to purchasers and sellers of commodity chemicals,
plastics and fuel products associated with an online marketplace;

- the market liquidity and costs efficiencies associated with an online
trading solution for purchasers and sellers of commodity chemicals,
plastics and fuel products;

- our ability to successfully execute our business model and our business
strategy;

- our ability to identify trends within the chemical industry and to offer
products and services that meet the changing needs of our members and the
market; and

- trends in government regulation.

17
<PAGE> 23

You can identify forward-looking statements by terminology such as "may,"
"will," "should," "could," "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially from those suggested
by these forward-looking statements. In evaluating these statements, you should
carefully consider the risks outlined under "Risk Factors."

Except as required by law, we are under no duty to update any of the
forward-looking statements after the date of this prospectus to conform such
statements to actual results and do not intend to do so.

USE OF PROCEEDS

We estimate that the net proceeds from the sale of the 5,000,000 shares of
common stock offered by us will be approximately $50.9 million, at our assumed
initial public offering price of $11.00 per share, and after deducting the
underwriting discounts and commissions and estimated offering expenses. If the
underwriters' over-allotment option is exercised in full, we estimate that the
net proceeds will be approximately $58.6 million, after deducting the estimated
underwriting discounts and commissions and unreimbursed offering expenses.

We expect to use at least $35.9 million of the net proceeds from this
offering for general corporate purposes, working capital, and potential
acquisitions and investments in complementary businesses or technologies. We
presently have no commitments or agreements respecting any acquisitions or
investments. Pending these uses, the net proceeds of this offering will be
invested in short-term, investment grade, interest-bearing securities.

Pursuant to a management incentive agreement, up to $15 million of the net
proceeds from this offering will be paid to current and former employees. The
portion of the net proceeds payable to these individuals will be two percent of
the average daily closing price of our common stock for the 90 day period
immediately following the consummation of this offering, multiplied by the
number of shares of common stock outstanding on a fully diluted basis on the
90th day immediately following the consummation of this offering. At an average
stock price of $11.00 over the 90 days following the offering and assuming our
current capitalization remains constant through the 90th day, this payment would
be $5.4 million. An average stock price of approximately $28.00 per share or
higher over the 90 days following the offering, assuming our current
capitalization on that 90th day, would result in the maximum payment of $15
million.

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock since
our inception, and do not anticipate declaring or paying any cash dividends in
the foreseeable future. Instead, we currently expect to retain our earnings, if
any, to finance our business and to use for general corporate purposes. Our
board of directors has the authority to declare and pay dividends on the common
stock, in its discretion, as long as there are funds legally available to do so.

18
<PAGE> 24

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2000. The
pro forma information reflects the assumed net exercise of all outstanding
warrants for the purchase of convertible preferred stock and the conversion of
all shares of convertible preferred stock into 10,869,839 shares of common stock
and includes the effect of the net exercise of 482,571 common stock warrants
into 423,961 shares of common stock. The pro forma as adjusted information
reflects the receipt of $50.9 million of estimated net proceeds from the sale by
us of 5,000,000 shares of common stock in this offering at an assumed initial
public offering price of $11.00 per share, after deducting the estimated
underwriting discounts and commissions and estimated unreimbursed offering
expenses. This table should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the financial
statements and accompanying notes included elsewhere in this prospectus.

<TABLE>
<CAPTION>
AS OF MARCH 31, 2000
------------------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
(UNAUDITED) (UNAUDITED) (UNAUDITED)(1)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
Cash and cash equivalents........................... $ 27,752 $ 27,752 $ 78,652
======== ======== ========
Mandatorily redeemable convertible preferred
stock:
Series A convertible preferred stock, $.01 par
value, 3,742,200 shares authorized; 2,138,400
shares issued and outstanding, actual; no
shares issued and outstanding, pro forma..... $ 24,224 $ -- $ --
Series B convertible preferred stock, $.01 par
value, 3,556,350 shares authorized; 2,032,200
shares issued and outstanding, actual; no
shares issued and outstanding, pro forma..... 23,211 -- --
Series C convertible preferred stock, $.01 par
value, 6,130,547 shares authorized; 3,503,169
shares issued and outstanding, actual; no
shares issued and outstanding, pro forma..... 43,689 -- --

Stockholders' equity (deficit):
Common stock, $.01 par value, 25,000,000 shares
authorized; 5,234,482 shares issued and
outstanding, actual; 16,528,282 shares issued
and outstanding, pro forma; 21,528,282 shares
issued and outstanding, pro forma as
adjusted....................................... 52 165 215
Additional paid-in capital........................ 22,268 113,279 164,129
Notes receivable from stockholders and
employees...................................... (4,320) (4,320) (4,320)
Deferred stock compensation....................... (2,730) (2,730) (2,730)
Prepaid goods and services related to issuance of
common stock................................... (4,579) (4,579) (4,579)
Accumulated deficit............................... (68,395) (68,395) (68,395)
-------- -------- --------
Total stockholders' equity (deficit)........... (57,704) 33,420 84,320
-------- -------- --------
Total capitalization................................ $ 33,420 $ 33,420 $ 84,320
======== ======== ========
</TABLE>

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

19
<PAGE> 25

DILUTION

The pro forma net tangible book value of our common stock as of March 31,
2000, was $28.0 million or approximately $1.69 per share. Pro forma net tangible
book value per share represents the amount of our stockholders' equity less
intangible assets, divided by 16,528,282 shares of outstanding common stock,
after giving effect to the net exercise of all outstanding warrants for the
purchase of convertible preferred stock, the conversion of all shares of
convertible preferred stock into shares of common stock and the net exercise of
482,571 common stock warrants into 423,961 shares of common stock.

Pro forma net tangible book value dilution per share to new investors
represents the difference between the amount per share paid by purchasers of
common stock in this offering and the pro forma net tangible book value per
share of common stock immediately after completion of this offering. After
giving effect to the sale by us of 5,000,000 shares of common stock in this
offering at an assumed initial offering price of $11.00 per share and after
deducting the estimated underwriting discounts and commissions and estimated
offering expenses and the application of the estimated net proceeds from this
offering, our pro forma net tangible book value as of March 31, 2000 would have
been $78.9 million, or $3.67 per share. This represents an immediate increase in
net tangible book value of $1.98 per share to existing stockholders and an
immediate dilution in net tangible book value of $7.33 per share to purchasers
of common stock in this offering. The following table illustrates the per share
dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $11.00
Pro forma net tangible book value per share as of March
31, 2000............................................... $ 1.69
Increase per share attributable to new investors.......... 1.98
------
Pro forma net tangible book value per share after this
offering.................................................. 3.67
------
Dilution per share to new investors......................... $ 7.33
======
</TABLE>

The following table illustrates on a pro forma basis as of March 31, 2000,
the difference between the number of shares of common stock purchased from us,
the total consideration paid to us and the average price paid by existing
stockholders and by the new investors purchasing shares of common stock in this
offering, before deduction of estimated discounts and commission and estimated
offering expenses payable by us:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
-------------------- ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C>
Existing stockholders......... 16,528,282 77% $ 56,815,948 51% $ 3.44
New investors................. 5,000,000 23 55,000,000 49 11.00
---------- --- ------------ --- ------
Total............... 21,528,282 100% $111,815,948 100% $ 5.19
========== === ============ === ======
</TABLE>

The foregoing tables exclude 4,577,661 shares of common stock issuable upon
the exercise of options outstanding under our stock option plans as of March 31,
2000 at a weighted average price of $6.76 per share and 397,440 shares of common
stock which will be issuable upon exercise of common stock warrants at a
weighted average price of $3.33 per share.

20
<PAGE> 26

UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS

The unaudited pro forma combined statement of operations data for the year
ended December 31, 1999 and the three months ended March 31, 1999, combine the
historical statements of operations of CheMatch, PetroChemNet, Inc. and
CheMatch, Inc. as if the acquisition of PetroChemNet, Inc. and CheMatch, Inc.,
which occurred on June 21, 1999, had been completed on January 1, 1999. The
total cost of the acquisitions was approximately $5.2 million and has been
accounted for using the purchase method of accounting. The unaudited pro forma
statement of operations and the accompanying notes should be read in conjunction
with the historical financial statements and the related notes of CheMatch,
PetroChemNet, Inc. and CheMatch, Inc. and "Management's Discussion and Analysis
of Financial Condition and Results of Operations," appearing elsewhere in this
prospectus.

The pro forma adjustments reflecting the consummation of the acquisitions
are based on the purchase method of accounting, available financial information
and the estimated fair value of assets acquired and liabilities assumed.
Depreciation and amortization expense has been adjusted to reflect the
amortization of goodwill related to the excess of purchase price over the fair
value of assets acquired and liabilities assumed as if the acquisitions had
occurred on January 1, 1999.

The unaudited pro forma financial data for the year ended December 31, 1999
and the three months ended March 31, 1999 excludes the effect of the issuance of
an aggregate of 929,523 shares of common stock to certain strategic investors
during February 2000.

The unaudited pro forma financial data for the year ended December 31, 1999
and the three months ended March 31, 1999, does not purport to represent what
the actual results of the combined businesses would have been if the
acquisitions of PetroChemNet, Inc. and CheMatch, Inc. had occurred on January 1,
1999, nor does this information purport to project the results for any future
period.

<TABLE>
<CAPTION>
PETROCHEMNET, INC. CHEMATCH, INC. CHEMATCH.COM, INC.
JANUARY 1, 1999 JANUARY 1, 1999 JUNE 21, 1999 PRO FORMA
THROUGH THROUGH (INCEPTION) PRO FORMA YEAR ENDED
JUNE 20, 1999 JUNE 20, 1999 THROUGH ADJUSTMENTS DECEMBER 31, 1999
(UNAUDITED) DECEMBER 31, 1999 (UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues......................... $ 111 $ 80 $ 182 $ -- $ 373
------ ---- -------- ----- --------
Costs and expenses:
Technology costs............... 149 20 2,302 -- 2,471
Selling and marketing.......... 70 -- 2,381 -- 2,451
General and administrative..... 657 48 3,536 -- 4,241
Stock-based compensation....... 50 -- 133 -- 183
Depreciation and
amortization................. 82 23 452 271 828
------ ---- -------- ----- --------
Total costs and
expenses............... 1,008 91 8,804 271 10,174
------ ---- -------- ----- --------
Operating loss................... (897) (11) (8,622) (271) (9,801)
Interest income (expense)...... (6) (8) 236 -- 222
------ ---- -------- ----- --------
Net loss......................... (903) (19) (8,386) (271) (9,579)
Accretion of redeemable
convertible preferred stock to
redemption
value.......................... -- -- (29,505) -- (29,505)
------ ---- -------- ----- --------
Net loss available to common
stockholders................... $ (903) $(19) $(37,891) $(271) $(39,084)
====== ==== ======== ===== ========
Net loss per share, basic
and diluted.................... $ (12.91)
Pro forma net loss per share
adjusted for the assumed net
exercise of all convertible
preferred stock warrants, the
conversion of all convertible
preferred stock and the net
exercise of 482,571 common
stock warrants into 423,961
shares of common stock, basic
and diluted.................... (1.19)
Shares used to compute net loss
per common share:
Basic and diluted.............. 3,026,581
Shares used to compute pro forma
net loss per share adjusted for
the assumed net exercise of all
convertible preferred stock
warrants, the conversion of all
convertible preferred stock and
the net exercise of 482,571
common stock warrants into
423,961 shares of common stock,
basic and diluted.............. 8,068,888
</TABLE>

21
<PAGE> 27

<TABLE>
<CAPTION>
PRO FORMA
THREE MONTHS ENDED MARCH 31, 1999 THREE MONTHS
----------------------------------- PRO FORMA ENDED
PETROCHEMNET, INC. CHEMATCH, INC. ADJUSTMENTS MARCH 31, 1999
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................................... $ 64 $ 33 $ -- $ 97
----- ---- ----- -----------
Costs and expenses:
Technology costs................................. 72 2 -- 74
Selling and marketing............................ 19 -- -- 19
General and administrative....................... 101 45 -- 146
Depreciation and amortization.................... 32 11 143 186
----- ---- ----- -----------
Total costs and expenses....................... 224 58 143 425
----- ---- ----- -----------
Operating loss..................................... (160) (25) (143) (328)
Interest expense................................... (2) (4) -- (6)
----- ---- ----- -----------
Net loss........................................... $(162) $(29) $(143) $ (334)
===== ==== ===== ===========
Net loss per share, basic and diluted.............. $ (0.12)
Pro forma net loss per share adjusted for the
assumed net exercise of all convertible preferred
stock warrants, the conversion of all convertible
preferred stock and the net exercise of 482,571
common stock warrants into 423,961 shares of
common stock, basic and diluted.................. (0.05)
Shares used to compute net loss per common share:
Basic and diluted................................ 2,762,940
Shares used to compute pro forma net loss per share
adjusted for the assumed net exercise of all
convertible preferred stock warrants, the
conversion of all convertible preferred stock and
the net exercise of 482,571 common stock warrants
into 423,961 shares of common stock, basic and
diluted.......................................... 6,586,704
</TABLE>

22
<PAGE> 28

SELECTED FINANCIAL DATA

You should read the selected consolidated financial data set forth below
along with "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and with our consolidated financial statements and
related notes appearing elsewhere in this prospectus. The pro forma share
amounts reflect the assumed exercise of all outstanding warrants for the
purchase of convertible preferred stock, the conversion of all convertible
preferred stock into common stock and the net exercise of 482,571 warrants to
purchase common stock into 423,961 shares of common stock. The statement of
operations data for the years ended December 31, 1997 and 1998, and for the
period from January 1, 1999 through June 20, 1999, and the balance sheet data as
of December 31, 1997 and 1998 and June 20, 1999, have been derived from the
audited financial statements and notes appearing elsewhere in this prospectus
for our predecessor, PetroChemNet, Inc. The consolidated statement of operations
data for the period from June 21, 1999 (inception) through December 31, 1999,
and the consolidated balance sheet data as of December 31, 1999, have been
derived from our audited consolidated financial statements and notes appearing
elsewhere in this prospectus. The unaudited consolidated statement of operations
data for the three months ended March 31, 2000 and the balance sheet data as of
March 31, 2000 have been derived from our unaudited financial statements. The
selected unaudited pro forma financial data present data for CheMatch, adjusted
for the effects of the acquisitions of PetroChemNet, Inc. and CheMatch, Inc. as
if they had been completed on January 1, 1999. See the unaudited pro forma
statements of operations data included elsewhere in this prospectus. The
historical results are not necessarily indicative of the operating results to be
expected in the future.

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
----------------------------------- JUNE 21,
1999 PRO FORMA
YEAR ENDED (INCEPTION) PRO FORMA THREE MONTHS THREE MONTHS
DECEMBER 31, JANUARY 1, THROUGH YEAR ENDED ENDED ENDED
------------------- 1999, THROUGH DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1997 1998 JUNE 20, 1999 1999 1999 1999 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues........................ $ 841 $ 698 $ 111 $ 182 $ 373 $ 97 $ 93
-------- -------- -------- -------- -------- ---------- -----------
Costs and expenses:
Technology costs.............. 901 631 149 2,302 2,471 74 948
Selling and marketing......... 222 176 70 2,381 2,451 19 2,440
General and administrative.... 246 688 657 3,536 4,241 146 2,782
Stock-based compensation...... 239 1,577 50 133 183 -- 309
Depreciation and
amortization................ 144 161 82 452 828 186 427
-------- -------- -------- -------- -------- ---------- -----------
Total costs and
expenses.............. 1,752 3,233 1,008 8,804 10,174 425 6,906
Operating loss.................. (911) (2,535) (897) (8,622) (9,801) (328) (6,813)
Interest income (expense)....... (16) (14) (6) 236 222 (6) 482
-------- -------- -------- -------- -------- ---------- -----------
Net loss........................ (927) (2,549) (903) (8,386) (9,579) (334) (6,331)
Accretion of redeemable
convertible preferred stock to
redemption value.............. -- -- -- (29,505) (29,505) -- (24,173)
-------- -------- -------- -------- -------- ---------- -----------
Net loss available to common
stockholders.................. $ (927) $ (2,549) $ (903) $(37,891) $(39,084) $ (334) $ (30,504)
======== ======== ======== ======== ======== ========== ===========
Net loss per share, basic and
diluted....................... $(177.65) $(440.09) $(132.72) $ (11.63) $ (12.91) $ (0.12) $ (6.34)
Pro forma net loss per share
adjusted for the assumed
exercise of all convertible
preferred stock warrants, the
conversion of outstanding
convertible preferred stock
and the net exercise of
482,571 common stock warrants
into 423,961 shares of common
stock, basic and diluted...... (1.19) (0.05) (0.39)
Shares used to compute net loss
per share, basic and
diluted....................... 5,218 5,792 6,804 3,258,966 3,026,581 2,762,940 4,808,951
Shares used to compute pro forma
net loss per share adjusted
for the assumed exercise of
all convertible preferred
stock warrants, the conversion
of outstanding convertible
preferred stock and the net
exercise of 482,571 common
stock warrants into 423,961
shares of common stock, basic
and diluted................... 8,068,888 6,586,704 16,102,751
</TABLE>

<TABLE>
<CAPTION>
PREDECESSOR COMPANY
-----------------------------------
AS OF
DECEMBER 31, AS OF AS OF MARCH 31, 2000
------------------- JUNE 20, ---------------------------
1997 1998 1999 ACTUAL PRO FORMA
(UNAUDITED)
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 210 $ 2 $ 49 $ 27,752 $ 27,752
Working capital (deficit)................................... (262) (691) (1,087) 24,249 24,249
Total assets................................................ 818 377 498 37,849 37,849
Total convertible preferred stock........................... -- -- -- 91,124 --
Total stockholders' equity (deficit)........................ 138 (432) (695) (57,704) 33,420
</TABLE>

The foregoing table excludes 397,440 shares of common stock issuable upon
exercise of outstanding warrants, which will remain outstanding upon
consummation of this offering.

23
<PAGE> 29

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

The following discussion should be read in conjunction with "Selected
Financial Data," "Summary Financial Data" and our financial statements and notes
thereto appearing elsewhere in this prospectus. This discussion and analysis
contains forward-looking statements that involve risks, uncertainties and
assumptions. Our actual results may differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including, but
not limited to, those set forth under "Risk Factors" and elsewhere in this
prospectus.

OVERVIEW

CheMatch is a business-to-business Internet-based marketplace for
purchasers and sellers of commodity chemicals, plastics and fuel products. We
incorporated in Delaware on June 21, 1999 as PetroChemNet Holdings, Inc. On
November 29, 1999, we changed our name to CheMatch.com, Inc. As a result of a
series of corporate transactions that occurred on June 21, 1999, we acquired
PetroChemNet, Inc. and CheMatch, Inc. These transactions were accounted for
using the purchase method of accounting. The excess of purchase price over the
fair value of assets acquired and liabilities assumed of $5.8 million was
allocated to goodwill and will be amortized over a ten-year period.

CheMatch generates revenues from commissions typically paid by each party
to a transaction on our exchange. CheMatch also generates revenues from
subscription fees related to our Internet-based information resources.
Commissions are based on the volume of chemicals traded on the exchange and
recognized as revenue in the period the transaction is completed. Revenue from
subscription fees is recognized ratably over the term of the subscription, which
is normally one year. Commissions payable by members on our trading exchange are
currently calculated based on a formula of a fraction of cents per gallon or
pound or metric ton equivalent of product traded. Typically, the commission is
payable by both parties to a transaction and ranges from $0.30 per metric ton to
$2.20 per metric ton per party to a transaction. Additionally, as we continue to
expand the products offered on our system and add new members, we expect to have
the flexibility to charge commissions based on weight or volume on a
product-by-product basis or by member. Since our commission structure is
currently based on the weight or volume of products traded, the commissions we
receive are not directly affected by fluctuations in the market prices of
products traded over our exchange.

Our costs and expenses consist primarily of (i) salaries and wages for
sales and marketing, technology and administrative personnel (ii) marketing and
advertising costs to promote our interactive trading exchange and information
resource to the petrochemical industry and (iii) technology costs to maintain
and enhance our systems. We intend to continue to increase these costs to expand
our business.

We have entered into strategic relationships with several companies,
including Bayer AG, Computer Sciences Corporation, E.I. du Pont de Nemours and
Company, General Electric Company and Muehlstein Holding Corporation to build
our membership, to increase the trading volume on our exchange and to generally
enhance our trading exchange. In addition, we have strategic relationships with
Stolt-Nielsen Transportation Group Ltd. to facilitate logistics, with DeWitt &
Company, Incorporated and William Heinemann, Inc., a subsidiary of Reed Elsevier
plc to provide information services, and with eCredit.com and TownsendTarnell,
Inc. to provide credit and other services. We believe these strategic
relationships will help establish CheMatch as the leading Internet-based
exchange for the chemical industry.

We have provided several of our members with trading concessions and other
incentives to transact business on our trading exchange. In the near term, these
concessions and incentives may temporarily increase the level of activity on our
trading exchange without a corresponding increase in revenue. Revenues presented
in the historical financial statements from trades involving any trading
concessions or other incentives are accounted for net of any credits or
concessions granted. Incentives and trading concessions granted to date have not
had a material impact on our results of operations.

24
<PAGE> 30

CHEMATCH.COM, INC.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2000

REVENUES

Revenues for the three months ended March 31, 2000 were $0.1 million, which
consisted of $91,000 of revenues generated from commissions on trades completed
on our trading exchange and $2,000 of subscriptions sold on our information
resources web site. Trading commission revenue increased $58,000, or 176%, from
$33,000 for the three months ended March 31, 1999 to $91,000 for the three
months ended March 31, 2000. The increase was due to increased trading activity
on the exchange during the period. Subscription revenues decreased $62,000, or
97%, from $64,000 for the three months ended March 31, 1999 to $2,000 for the
three months ended March 31, 2000. The decrease in subscription revenue is due
to a decrease in subscriptions being renewed on our information services web
site as a result of reduced marketing efforts in 2000.

COSTS AND EXPENSES

Technology Costs. Technology costs totaled $0.9 million for the three
months ended March 31, 2000. These costs consisted of expenses to maintain our
web sites and have increased due to our efforts to maintain our current system
and technology.

Selling and Marketing. Selling and marketing costs totaled $2.4 million for
the three months ended March 31, 2000. These costs consisted of $0.9 million in
expenses for direct advertising with the remainder of the costs related to the
expansion of our sales and marketing department. These costs have increased as a
result of increased efforts to market our system and to add more members and
products on our trading exchange.

General and Administrative. General and administrative expenses totaled
$2.8 million for the three months ended March 31, 2000 and consisted primarily
of costs for executive and administrative staff, office rent, insurance,
benefits, consultants and a $0.6 million severance charge for former executives.

Stock-based Compensation. During the three months ended March 31, 2000, we
recorded stock-based compensation expense of $0.3 million related to
amortization of deferred stock compensation.

Depreciation and Amortization. Depreciation and amortization expense
totaled $0.4 million for the three months ended March 31, 2000 and consisted
primarily of $0.2 million goodwill amortization related to the merger with
PetroChemNet, Inc. and the acquisition of CheMatch, Inc. The remaining expenses
consisted of $0.1 million in depreciation and amortization of computer software,
equipment and furniture and fixtures and $0.1 million in amortization of prepaid
goods and services received in connection with the issuance of common stock.

INTEREST INCOME

Interest income for the three months ended March 31, 2000 totaled $0.5
million as a result of cash and cash equivalents being invested during the
period.

PERIOD JUNE 21, 1999 (INCEPTION) THROUGH DECEMBER 31, 1999

REVENUES

Revenues for the period June 21, 1999 (inception) through December 31, 1999
were $0.2 million, which consisted of $0.1 million of revenues generated from
commissions on trades completed on our trading exchange and $0.1 million of
subscriptions sold on our information resources web site.

COSTS AND EXPENSES

Technology Costs. Technology costs totaled $2.3 million for the period June
21, 1999 (inception) through December 31, 1999. These costs consisted of
expenses to maintain our web sites.

25
<PAGE> 31

Selling and Marketing. Selling and marketing costs totaled $2.4 million for
the period June 21, 1999 (inception) through December 31, 1999. These costs
consisted of $1.1 million in expenses for direct advertising with the remainder
of the costs related to the formation and expansion of our sales and marketing
department.

General and Administrative. General and administrative expenses totaled
$3.5 million for the period June 21, 1999 (inception) through December 31, 1999
and consisted primarily of costs for executive and administrative staff, office
rent, insurance, benefits and consultants.

Stock-based Compensation. During the period June 21, 1999 (inception)
through December 31, 1999, we recorded $3.2 million of deferred stock
compensation expense in connection with certain stock options granted to
employees. We are amortizing deferred stock compensation expense over the
vesting periods of the related options, which is typically four years. For the
period June 21, 1999 (inception) through December 31, 1999 we recorded
stock-based compensation expense of $0.1 million related to deferred stock
compensation. We estimate annual stock-based compensation expense will be
approximately $0.8 million related to previously granted stock options.

Depreciation and Amortization. Depreciation and amortization expense
totaled $0.5 million for the period June 21, 1999 (inception) through December
31, 1999 and consisted primarily of $0.3 million goodwill amortization related
to the merger with PetroChemNet, Inc. and the acquisition of CheMatch, Inc. The
remaining expenses consisted of depreciation and amortization of computer
software, equipment and furniture and fixtures.

INTEREST INCOME

Interest income for the period June 21, 1999 (inception) through December
31, 1999 totaled $0.2 million as a result of cash and cash equivalents being
invested during the period.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have financed operations primarily from the sale of
convertible preferred stock and the issuance of common stock. As of March 31,
2000, CheMatch had $27.8 million in cash and cash equivalents and $24.2 million
in working capital.

Since inception, we have incurred significant negative cash flow from
operations. For the three months ended March 31, 2000, cash used in operating
activities was $4.9 million. Cash used in operating activities was principally
for marketing and development of our trading exchange, growth of our sales force
and hiring of administrative and technology staff to support our growth. We
expect to continue to incur negative cash flows in the future.

Cash used in investing activities during the three months ended March 31,
2000 consisted of $2.1 million in capital expenditures related to the purchase
and development of software and equipment related to upgrading our system.

Cash provided by financing activities during the three months ended March
31, 2000 was $4.6 million. This amount consisted primarily of the proceeds from
the sale of common stock. A summary of these transactions is as follows:

- On February 5, 2000, we sold 204,291 shares of our common stock to
Muehlstein Holding Corporation for approximately $1 million and a
promissory note in aggregate principal amount of approximately $1
million. The promissory note, which bears interest at the rate of eight
percent per year, is payable in eight consecutive quarterly installments,
commencing April 1, 2000.

- On February 11, 2000, we sold 153,218 shares of our common stock to
William Heinemann, Inc., a subsidiary of Reed Elsevier plc, for
approximately $1.5 million.

- On February 14, 2000, we sold 306,435 shares of our common stock to
General Electric Company for $3,064 and a promissory note in aggregate
principal amount of approximately $2 million in conjunction with our
entering into a strategic alliance, pursuant to which General Electric
agreed to

26
<PAGE> 32

provide future services with a value estimated by the Company of
approximately $1 million. The promissory note, which bears interest at
the rate of eight percent per year, is payable on or before December 31,
2001.

- On February 14, 2000, we sold 204,291 shares of our common stock to Bayer
AG for approximately $2 million.

- On February 16, 2000, we sold 61,288 shares of our common stock to
TownsendTarnell, Inc. for $613 and a promissory note in aggregate
principal amount of approximately $0.6 million. The promissory note,
which bears interest at the rate of eight percent per year, is payable in
twelve consecutive monthly installments, commencing February 1, 2000.

As of December 31, 1999, CheMatch had $30.2 million in cash and cash
equivalents and $27.2 million in working capital.

For the period June 21, 1999 (inception) through December 31, 1999, cash
used in operating activities was $5.5 million. Cash used in operating activities
was principally for marketing and development of our trading exchange,
development of a sales force and establishment of administrative and technology
staff to support our growth. We expect to continue to incur negative cash flows
in the future.

Cash used in investing activities during the period June 21, 1999
(inception) through December 31, 1999 was $2.6 million. Cash used in investing
activities consisted of $1.6 million in capital expenditures related to the
purchase and development of software and equipment related to upgrading our
system and opening of offices to support our growth and $1.0 million for the
acquisitions of CheMatch, Inc. and PetroChemNet.

Cash provided by financing activities during the period June 21, 1999
(inception) through December 31, 1999 was $38.3 million. This amount consisted
primarily of the proceeds from the sale of convertible preferred stock and
issuance of common stock. A summary of these transactions is as follows:

- On June 21, 1999, we sold 2,138,400 shares of Series A Convertible
Preferred Stock and warrants to purchase 1,603,800 shares of Series A
Convertible Preferred Stock for approximately $5 million.

- On September 27, 1999, we sold 2,032,200 shares of Series B Convertible
Preferred Stock and warrants to purchase 1,524,150 shares of Series B
Convertible Preferred Stock for approximately $5 million.

- On October 6, 1999, we sold 191,080 shares of common stock for
approximately $1 million to Computer Sciences Corporation in conjunction
with our entering into a strategic alliance.

- On November 24, 1999, we issued 636,943 shares of common stock for $6,369
to E.I. duPont de Nemours and Company in conjunction with our entering
into a strategic alliance, pursuant to which duPont agreed to provide
future goods and services with a value estimated by the Company of
approximately $4.1 million. Additionally, duPont purchased 891,716 shares
of Series C Convertible Preferred Stock and warrants to purchase 668,787
shares of Series C Convertible Preferred Stock for approximately $7
million.

Pursuant to a management incentive agreement, a portion of the proceeds
from this offering will be paid to current and former employees. The portion of
the net proceeds payable to these individuals will be two percent of the average
daily closing price of our common stock for the 90 day period immediately
following the consummation of this offering, multiplied by the number of shares
of common stock outstanding on a fully diluted basis on the 90th day immediately
following the consummation of this offering. The maximum amount payable under
the management incentive agreement is $15 million. This payment is expected to
have a material adverse effect on our results of operations for the period in
which this payment is made.

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<PAGE> 33

We have generated only immaterial revenues to date and our ability to
generate significant revenues is uncertain. We have incurred significant losses
since our inception on June 21, 1999. We currently expect our losses to increase
in the future and we cannot assure that we will ever achieve or sustain
profitability.

We expect to experience significant growth in our costs and expenses,
particularly technology development and sales and marketing expenses, for the
foreseeable future in order to execute our business plan. As a result, we
anticipate that such costs and expenses, as well as capital expenditures, will
constitute a material use of our cash resources. In addition, we may utilize
cash resources to fund acquisitions or investments in complementary businesses,
technologies or product lines. We believe that our current cash balance and the
net proceeds from the sale of the common stock in this offering will be
sufficient to meet our working capital and operating resource expenditure
requirements for at least the next two years. Thereafter, we may find it
necessary to obtain additional equity or debt financing. We may also be required
to raise additional financing before such time to finance acquisitions or
operations. In the event additional financing is required, we may not be able to
raise it on acceptable terms or at all. Our inability to raise capital when
needed could seriously harm our business and results of operations.

YEAR 2000

QUALITATIVE AND QUANTITATIVE MARKET RISK DISCLOSURES

Our revenues since inception have been primarily derived from U.S. members
and, as a result, we have had limited exposure to factors such as changes in
foreign currency exchange rates or weak economic conditions in foreign markets.
However, in future periods, we expect to generate revenues in foreign markets,
including Europe and Asia. As our revenues are invoiced in U.S. dollars, a
strengthening of the U.S. dollar could make our services less competitive in
foreign markets. Our interest income is sensitive to changes in the general
level of U.S. interest rates. At March 31, 2000, our cash and cash equivalents
consisted primarily of money market funds held by large financial institutions
and investment grade bonds with maturities of less than thirty days.

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<PAGE> 34

PETROCHEMNET, INC.

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997 AND 1998

The following table sets forth statement of operations data for each of the
comparative periods indicated:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
------------------
1997 1998
(IN THOUSANDS)
<S> <C> <C>
Revenues.................................................... $ 841 $ 698
------ -------
Costs and expenses:
Technology costs.......................................... 901 631
Selling and marketing..................................... 222 176
General and administrative................................ 246 688
Stock-based compensation.................................. 239 1,577
Depreciation and amortization............................. 144 161
------ -------
Total costs and expenses.......................... 1,752 3,233
------ -------
Operating loss.............................................. (911) (2,535)
Interest expense............................................ (16) (14)
------ -------
Net loss.................................................... $ (927) $(2,549)
====== =======
</TABLE>

REVENUES

Revenues decreased $0.1 million, or 17%, from $0.8 million in 1997 to $0.7
million in 1998. This decrease was due to a $0.2 million decrease in third-party
web site development service revenue partially offset by a $0.1 million increase
in subscription revenues. Subscription revenues increased from $0.1 million in
1997 to $0.2 million in 1998 due to increased activity on PetroChemNet's
information resource network. PetroChemNet previously provided web site
development service activities for third parties, which was suspended in 1998.
Web site development service revenue decreased accordingly by $0.3 million from
$0.8 million in 1997 to $0.5 million in 1998.

COSTS AND EXPENSES

Technology Costs. Technology costs decreased $0.3 million, or 30%, from
$0.9 million in 1997 to $0.6 million in 1998. The decrease was due to lower
costs related to web site development service activities for third parties,
which was suspended in 1998.

Selling and Marketing. Selling and marketing expenses decreased $46,000, or
21%, from $222,000 in 1997 to $176,000 in 1998. The decrease was due to lower
costs of $81,000 related to web site development service activities partially
offset by higher expenses of $35,000 related to increased subscription activity
in 1998 on our information resource network.

General and Administrative. General and administrative expenses increased
$0.5 million, or 180%, from $0.2 million in 1997 to $0.7 million in 1998. The
increase was primarily due to higher costs related to expanding PetroChemNet's
information resource network.

Stock-based Compensation. Stock-based compensation expenses increased $1.4
million from $0.2 million in 1997 to $1.6 million in 1998. The $1.4 million
increase in compensation expense was due to PetroChemNet granting a greater
amount of stock options to employees and consultants during 1998.

Depreciation and Amortization. Depreciation and amortization expense
increased $0.1 million, or 12%, from $0.1 million in 1997 to $0.2 million in
1998. The increase was due to higher depreciation expense on equipment and
software purchased in 1997 and 1998.

29
<PAGE> 35

PERIOD JANUARY 1, 1999 THROUGH JUNE 20, 1999

REVENUES

Revenues for the period January 1, 1999 through June 20, 1999 were $0.1
million, which consisted of $56,000 of revenues generated from web site
development services and $55,000 of subscription revenues. The decrease in
revenues versus prior periods was due to a decrease in web site development
services, which were suspended in 1999. In 1998, revenues from web site
development services totaled $0.5 million versus $56,000 for the period January
1, 1999 through June 20, 1999.

COSTS AND EXPENSES

Technology Costs. Technology costs totaled $0.1 million for the period
January 1, 1999 through June 20, 1999. These costs consisted of expenses to
maintain our web site.

Selling and Marketing. Selling and marketing costs totaled $0.1 million
for the period January 1, 1999 through June 20, 1999. These costs consisted of
expenses for selling and marketing related to subscription sales from our
information resource network.

General Administrative. General and administrative expenses totaled $0.7
million for the period January 1, 1999 through June 20, 1999 and consisted
primarily of costs for executive and administrative staff.

Stock-based Compensation. During the period January 1, 1999 through June
20, 1999, we recorded $50,000 of deferred stock compensation expense in
connection with certain stock options granted to employees.

Depreciation and Amortization. Depreciation and amortization expense
totaled $0.1 million for the period January 1, 1999 through June 20, 1999 and
consisted of depreciation and amortization of computer software, equipment and
furniture and fixtures.

LIQUIDITY AND CAPITAL RESOURCES

As of June 20, 1999, PetroChemNet had $49,000 in cash and $1.0 million
working capital deficit. During the period January 1, 1999 through June 20,
1999, we sold 1,130 shares of common stock in exchange for $410,000.

Net cash used in operating activities was $0.2 million and $0.5 million in
1997 and 1998, respectively. Net cash flows from operating activities in each
period reflect increasing net losses offset by non-cash compensation charges
related to stock options granted to employees.

Net cash used in investing activities was $0.4 million and $20,000 in 1997
and 1998, respectively. Cash used in investing activities primarily reflects
capital expenditures for the purchase of property and equipment. Additionally,
in 1997, capital expenditures included the acquisition of a customer list for
$0.3 million.

Net cash provided by financing activities was $0.8 million and $0.4 million
in 1997 and 1998, respectively. Cash provided by financing activities consisted
primarily of proceeds from issuance of common stock, capital contributions and
debt.

30
<PAGE> 36

CHEMATCH, INC.

RESULTS OF OPERATIONS

The following table sets forth statement of operations data for each of the
comparative periods indicated:

<TABLE>
<CAPTION>
MARCH 10, 1997 THREE MONTHS
(INCEPTION) ENDED
THROUGH YEAR ENDED MARCH 31,
DECEMBER 31, DECEMBER 31, -------------
1997 1998 1998 1999
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues............................................. $ -- $ 84 $ 13 $ 33
----- ----- ---- ----
Costs and expenses:
Technology costs................................ 1 30 7 2
General and administrative...................... 107 104 28 45
Depreciation and amortization................... 2 41 10 11
----- ----- ---- ----
Total costs and expenses................... 110 175 45 58
----- ----- ---- ----
Operating loss....................................... (110) (91) (32) (25)
Interest expense..................................... (5) (18) (4) (4)
----- ----- ---- ----
Loss before income taxes............................. (115) (109) (36) (29)
Benefit of income taxes.............................. 30 -- -- --
----- ----- ---- ----
Net loss............................................. $ (85) $(109) $(36) $(29)
===== ===== ==== ====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1999

REVENUES

Revenues increased $20,000, or 154%, from $13,000 for the three months
ended March 31, 1998, to $33,000 for the three months ended March 31, 1999. The
increase was due to increased trading activity during the 1999 period as a
result of trading on the exchange commencing in February 1998.

COSTS AND EXPENSES

General and Administrative. General and administrative costs increased
$17,000, or 61%, from $28,000 for the three months ended March 31, 1998, to
$45,000 for the three months ended March 31, 1999. The increase was primarily
due to higher costs associated with increased activity on the exchange.

MARCH 10, 1997 (INCEPTION) THROUGH DECEMBER 31, 1997 AND YEAR ENDED DECEMBER 31,
1998

REVENUES

Revenues increased $84,000 from $0 for the period March 10, 1997
(inception) through December 31, 1997, to $84,000 for 1998. The increase was due
to increased trading commissions in 1998 as a result of trading on the exchange,
which commenced in February 1998.

COSTS AND EXPENSES

Technology Costs. Technology costs increased $29,000 from $1,000 for the
period March 10, 1997 (inception) through December 31, 1997 to $30,000 for 1998.
The increase was due to higher costs in 1998 to operate the exchange, which
commenced operations in February 1998.

General and Administrative. General and administrative costs decreased
$3,000, or 3%, from $0.1 million for the period March 10, 1997 (inception)
through December 31, 1997, to $0.1 million for 1998. These costs in 1998
remained consistent with the period March 10, 1997 (inception) through December
31, 1997.

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<PAGE> 37

Depreciation and Amortization. Depreciation and amortization expense
increased $39,000 from $2,000 for the period March 10, 1997 (inception) through
December 31, 1997, to $41,000 for 1998 due to the full year impact of
depreciation of trading exchange development costs, which commenced operations
in February 1998.

INTEREST EXPENSE

Interest expense increased $13,000 from $5,000 for the period March 10,
1997 (inception) through December 31, 1997 to $18,000 in 1998 due to higher
outstanding balances on advances from DeWitt & Company, Inc.

LIQUIDITY AND CAPITAL RESOURCES

The net cash used in operating activities was $24,000 and $29,000 for 1998
and the three months ended March 31, 1999, respectively. Net cash used in
operations for each period reflects net losses offset by non-cash charges for
depreciation. Additionally, cash receipts of $49,000 related to deferred revenue
that will be recognized in future periods favorably impacted 1998. The three
months ended March 31, 1999 was negatively impacted by $21,000 of deferred
revenue that was recognized during the period with the corresponding payment
being received in a prior period.

Net cash used in investing activities was $15,000 and $0 for 1998 and the
three months ended March 31, 1999, respectively. Cash used in investing
activities reflects purchases of software and equipment to support the trading
system.

Net cash provided by financing activities was $58,000 and $9,000 for 1998
and the three months ended March 31, 1999. Cash provided by financing activities
reflects advances received from DeWitt, partially offset by payments made to
DeWitt.

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<PAGE> 38

BUSINESS

This prospectus contains forward-looking statements that involve risks and
uncertainties. Actual results may differ materially from those indicated in such
forward-looking statements including the risk factors beginning on page 6.

OVERVIEW

CheMatch.com is a business-to-business Internet-based marketplace for
purchasers and sellers of commodity chemicals, plastics and fuel products. Our
marketplace incorporates a real-time, interactive trading exchange, where our
members bid, offer and negotiate online for the purchase and sale of products 24
hours a day, seven days a week. Members of our secure, neutral exchange trade
products anonymously, utilizing real-time pricing and other market information
provided through our exchange. Members are pre-qualified by us and pre-selected
by each other before trading on our exchange. Our trading exchange, located at
www.chematch.com, was the first and is one of the largest online exchanges
serving the chemical industry. Over $200 million in transactions have been
traded on our exchange since February 1998, and over $74 million in transactions
were traded on our exchange in the quarter ended March 31, 2000. In the first
quarter of 2000, we averaged more than 150,000 metric tons of daily product bids
and offers and the average transaction value of completed trades exceeded
$500,000. We generate revenues on our trading exchange from commissions
typically paid by each party to a completed transaction.

Our members include more than 300 of the world's leading chemical companies
and other leading purchasers and sellers of commodity chemicals, plastics and
fuel products, including traders, distributors, brokers, manufacturers and other
end users. Our strategic investors include Bayer AG, Computer Sciences
Corporation, E.I. duPont de Nemours and Company, General Electric Company,
Millennium Holdings Inc., Muehlstein Holding Corporation, Stolt-Nielsen
Transportation Group Ltd., TownsendTarnell, Inc. and William Heinemann Inc., a
subsidiary of Reed Elsevier plc. We have entered into strategic alliances with
Bayer, CSC, duPont, General Electric and Muehlstein to build our membership, to
increase the trading volume on our exchange and to generally enhance our trading
exchange. In addition, we have strategic relationships with Stolt-Nielsen to
facilitate logistics, with DeWitt & Company, Incorporated and Reed Elsevier to
provide information services, and with eCredit.com and TownsendTarnell to
provide credit and other services.

We maintain an extensive information resource center, located at
www.petrochem.net, providing over 5,000 users access to industry news, forums,
reference materials and more than 100 offerings from a number of the chemical
industry's most respected sources. We generate revenues through our information
resource center from commissions for subscription and other fees paid by
subscribers. Users may subscribe to market updates featuring chemical industry
news, pricing information and related statistics, over 40 product specific
consulting reports containing summaries of marketing and pricing trends and over
20 newsletters that detail market trends in the chemical industry. In addition,
the CheMatch trading screen integrates relevant news, trends, commentaries and
analyses from our information resource center.

Our principal executive offices are located in Houston, Texas. We also
maintain domestic offices in New York, New York, San Ramon, California and
Stamford, Connecticut, and international offices in Brussels, Belgium, Hong
Kong, Manchester, England, Singapore, Tokyo, Japan and Zurich, Switzerland. We
also have a local representative in Sao Paulo, Brazil.

INDUSTRY BACKGROUND

GROWTH OF BUSINESS-TO-BUSINESS E-COMMERCE

The Internet has emerged as a global communications medium enabling
businesses worldwide to communicate, share information and transact business
electronically. As the use of the Internet has grown, businesses have
increasingly recognized the ability of the Internet to streamline complex
processes, lower costs and improve efficiency through the significant reduction
of the traditional business communication barriers of time, geography and number
of participants. Forrester Research predicts that business-to-business
e-commerce in the United States will grow from $109 billion in 1999 to over $2.8
trillion in 2003.

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<PAGE> 39

The acceptance of the Internet as a communications platform for transacting
business has led to the development of web sites designed to provide users
access to electronic marketplaces and aggregated information. The creation of an
information based, electronic marketplace within a highly fragmented industry
offers substantial potential benefits, including:

- a global interactive marketplace;

- improved market liquidity;

- real-time market information;

- access to aggregated data as well as interactive content; and

- a more efficient, less labor and paper intensive transaction model.

THE CHEMICAL INDUSTRY: AN OPPORTUNITY FOR AN INTERNET-BASED SOLUTION

The commodity, specialty and life sciences chemical industry is a $1.6
trillion annual global market. The commodity chemicals -- including basic
industrial chemicals, petrochemicals and agrichemicals -- and plastics market is
the largest segment of the global chemical industry, representing more than $700
billion of products purchased and sold worldwide annually. Fuel products, an
additional market segment served by the CheMatch exchange, represents
approximately $100 billion of products purchased and sold annually worldwide.
Forrester Research estimates that by 2003, the petrochemical industry is
projected to be the third largest segment of the Internet economy in the United
States, growing from $27 billion in 2000 to $184 billion in 2003.

The traditional marketplace for commodity chemicals, plastics and fuel
products is characterized by the following:

- Fragmented Market. The industry is highly fragmented, with a large number
of industry participants who traditionally trade with a select number of
parties with whom they have pre-existing relationships.

- Lack of Real-Time Market Information. Purchasers and sellers in the
traditional marketplace generally discover pricing and other market
trends through third party reports that are based on telephone surveys
and may contain outdated or inaccurate information.

- Geographic Insularity. Trading between companies within the chemical
industry's traditional marketplace generally occurs between businesses in
the same geographic region due to various constraints, including time
zone limitations and established personal networks.

- Price Volatility and Cyclicality. The industry is subject to significant
price fluctuations based on changes in oil and other feedstock costs,
changes in supply and demand for different products.

- Lack of Market Liquidity. A substantial majority of commodity chemicals,
plastics and fuel products are purchased and sold under contracts. These
contracts, which vary in duration but are often one year or longer,
enable companies to satisfy their volumetric requirements for a given
product over a specified period of time. The balance of trading occurs on
the spot market, where companies can purchase or sell products based on
current market prices. Traditionally, the spot market for these products
has been relatively illiquid, volatile and unreliable. As a result,
purchasers and sellers have been reluctant to rely on the spot market to
satisfy their requirements.

- Low Trading Velocity. Velocity reflects the number of times a product
changes hands from production, through the supply chain, to ultimate end
use. The velocity of trading in the chemical industry's traditional
marketplace as estimated by management is approximately 1.8 times. This
low velocity is attributable, at least in part, to the chemical
industry's traditional reliance on the contract market.

- Highly Networked. Unlike most industries, companies within the chemical
industry are highly networked, simultaneously being competitors,
customers, suppliers and product development
34
<PAGE> 40

partners. Multiple transactions with numerous industry participants on a
regular basis make increased standardization and integration of
enterprise resource planning systems an important objective to facilitate
reduced processing costs.

LIMITATIONS OF TRADITIONAL PURCHASING AND SELLING METHODS IN THE CHEMICAL
INDUSTRY

We believe the traditional way of purchasing and selling commodity
chemicals, plastics and fuel products is inefficient. The process of initiating,
negotiating and completing a transaction is time consuming and subjects the
parties to market risk related to price fluctuations. Within this traditional
marketplace, real-time market information is limited and purchasers and sellers
typically transact business locally or regionally. Communications between
industry parties occur primarily by telephone and facsimile and require
significant paper documentation. In order to complete a transaction in the
traditional marketplace for purchasing and selling commodity chemicals, plastics
and fuel products, purchasers and sellers generally have to:

- identify their purchase or sale requirements;

- contact five to ten traders, brokers, customers, producers or other
industry participants;

- negotiate with two or more parties;

- finalize a trade with one or more parties;

- confirm the transaction;

- submit and complete paperwork necessary to document the transaction;

- determine the method of shipping and surveying the product that is the
subject of the transaction; and

- monitor the shipping, certification and delivery process.

THE CHEMATCH SOLUTION

We offer a secure, neutral marketplace for purchasers and sellers of
commodity chemicals, plastics and fuel products which is designed to reduce the
inefficiencies associated with the traditional methods of purchasing and selling
these products. Our Internet-based marketplace has the following key features:

- Real-Time, Interactive Exchange. Our members bid, offer and negotiate
online for the purchase and sale of commodity chemicals, plastics and
fuel products in real-time 24 hours a day, seven days a week utilizing
current market information, reducing the timing and information
inefficiencies associated with the chemical industry's traditional
transaction process.

- Auctions, Reverse Auctions and Tenders. Our members can conduct auctions
to sell products and reverse auctions to purchase products. Members may
also conduct non-binding auctions and reverse auctions commonly called
tenders in which the winning bidder can be chosen based on factors
including non-price considerations such as payment terms, delivery terms
or delivery location.

- Market Intelligence. Through our trading exchange, we provide our members
with real-time pricing and other market information, including news,
trends, commentaries and analyses about the products eligible for trading
on our exchange. Additionally, we offer users of our information resource
center a wide variety of information related to the petroleum and
chemical industries. The content we provide enables our members to
transact on a more fully-informed basis.

- Global Reach. Unlike the geographical and temporal limitations presented
by the chemical industry's traditional marketplace, our trading exchange
is designed to create a global marketplace that transcends time zones and
established personal networks. This global network will provide
purchasers and sellers with expanded market reach.

- Qualified Traders and Products. We screen our members based on their
financial capabilities, market reputation and other criteria before they
are cleared to join and participate on our trading exchange. Each
product, or grade of product traded on our exchange is required to meet
defined specifications such as chemical composition and other attributes
including content, color and purity.

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<PAGE> 41

These industry recognized standard specifications, which are listed on our
exchange, come from organizations such as the American Society of Testing and
Materials (ASTM) or from industry participants whose specifications have become
recognized standards.

- Pre-Selection of Trading Partners. Prior to their participation on our
exchange, our members pre-select the other members from whom they will
purchase and to whom they will sell products and the credit terms on
which they will transact with those members. Our members may refuse to
purchase from, sell to or offer credit to other members for any reason
and may update their trading criteria at any time.

- Anonymity. After pre-selecting the parties with whom they will trade, our
members bid, offer and negotiate online for the purchase and sale of
commodity chemicals, plastics and fuel products on our trading exchange
on an anonymous basis with respect to other exchange members. Only upon
matching of a trade is the identity of each party revealed and then only
to the other party to the transaction. We believe this anonymity builds
market efficiency by enabling our members to purchase and sell large
quantities of products discreetly, thereby minimizing the potential
effect on the larger market. Under the traditional methods of selling
products by calling brokers or other industry participants, members would
have to expose to the market whether they are long or short on a product,
thereby risking that prices may rise or fall in response to their
position. We believe that members who hold long or short positions in a
product will prefer the anonymity of our exchange rather than having to
disclose their position to other industry participants in the traditional
marketplace.

- Increased Liquidity and Velocity. We believe the efficiencies associated
with our marketplace will improve liquidity within the market for
commodity chemicals, plastics and fuel products, and will enable our
members to improve their capacity utilization and inventory management.
If these efficiencies are achieved, we believe that the velocity of
trading within the chemical industry will increase, further enhancing
liquidity in the marketplace.

- Reduced Cost Structure. We believe the comprehensive solution presented
by our trading exchange will allow our members to reduce the time and
related expense and process steps associated with procurement, sales and
marketing, and administration for the products traded on our trading
exchange. Furthermore, we intend to enable our exchange to be integrated
with our members' enterprise resource planning systems.

- Reliability and Confirmation. We believe our members' ability to
pre-select the parties with whom they will trade and our system's online
documentation and confirmation procedures bring greater certainty to the
trading process, as compared to other Internet-based trading systems on
which parties may not be able to limit their trading partners to
creditworthy or otherwise acceptable parties, which we believe will lead
to the increased adoption of our exchange.

THE CHEMATCH STRATEGY

Our objective is to expand upon our position as a leading Internet-based
solution for purchasers and sellers of commodity chemicals, plastics and fuel
products. Our strategy to achieve this objective includes the following key
elements:

Increase Adoption of our Trading Exchange to Promote Liquidity. We have
targeted leading chemical companies worldwide and other leading purchasers and
sellers of commodity chemicals, plastics and fuel products, including traders,
brokers, distributors, manufacturers and other end users, as prospective members
of our trading exchange. As of May 12, 2000, we had over 300 members on our
exchange. Through our sales and marketing efforts, we intend to continue to
communicate to the remainder of our target companies the benefits of our
marketplace to encourage the industry's migration to and our members' use of our
Internet-based trading solution. We believe the adoption of our exchange will
improve liquidity within the market for commodity chemicals, plastics and fuel
products.

Expand Product Offerings. We intend to continue to expand the products
eligible for trading on our exchange and about which we provide information
based on evaluations of the market and input from our members. We will continue
to focus on high volume commodity chemicals, plastics and fuel products. As

36
<PAGE> 42

of March 31, 2000, we permitted bids and offers on 30 products on our trading
exchange and provided information on over 50 products on our information
resource center.

Enhance Functionality and Services. Many of the features and
functionalities of our exchange were added based on feedback generated from our
members. We intend to continue to enhance the content and functionality of our
marketplace by:

- integrating various interactive services, including broadcast and
personal messaging via e-mail, pagers and other portable devices,
specialized bulletin boards and other interactive features;

- offering our members a suite of integrated products to link commercial
transactions on our trading exchange with our members' back office
operations; and

- providing enhanced pricing analytics, information feeds and other
interactive content.

Expand our Marketplace through Strategic Relationships. Through strategic
relationships, including those we have entered into with Stolt-Nielsen, DeWitt,
Reed Elsevier, eCredit.com and TownsendTarnell, we intend to expand and enhance
our marketplace by:

- facilitating logistics for products offered and sold on our trading
exchange, including transportation with online tracking, inspection and
surveying, terminalling and storage and related services;

- expanding our information service offerings;

- offering our members a full complement of credit services; and

- providing financial risk management services, including a forward market
and unregulated financial derivatives.

Leverage Chemical Industry Expertise. In implementing our strategy, we
intend to leverage the collective knowledge and expertise of our management
team, which includes more than 30 employees with 10 or more years of experience
in the chemical industry. They provide strategic guidance, offer expertise in
commodities, finance, sales, marketing and information technology and have
significant industry contacts. In order to capitalize on this expertise, we have
located our headquarters in Houston, Texas, a hub for the chemical industry.

Maintain Integrity of Trading Exchange. We intend to maintain the
third-party neutral approach of our trading exchange to maximize the adoption of
our marketplace by all purchasers and sellers of commodity chemicals, plastics
and fuel products, including traders, distributors, brokers, manufacturers and
other end users. We believe that our neutral approach will ensure that these
market participants have access to an efficient and liquid marketplace with
unbiased product offerings and pricing and market information. As we enhance the
features and functionality of our exchange, we intend to continue to ensure this
third-party neutrality.

Expand Internationally. We believe that the international scope of the
Internet, the global presence of leading chemical companies and the worldwide
demand for commodity chemicals, plastics and fuel products present opportunities
to expand our international operations. We plan to leverage our technology
platform and our sales and marketing personnel to take advantage of this
international opportunity.

Leverage Existing and New Technologies. We plan to utilize proven,
leading-edge technologies to expand and enhance our technology platform to
improve the scalability, reliability and flexibility necessary to meet the
requirements of our members and the market.

CHEMATCH TRADING PROCESS

Initiation and Selection. Our trading exchange is a user-friendly,
comprehensive solution for industry participants. After executing a membership
agreement, new members to the exchange are provided with a unique user name and
password. Our members are required to input their user name and password each
time they access our trading exchange. Individual users have either active
(eligible to trade) or passive
37
<PAGE> 43

(view only) accounts. On their first visit to our trading exchange, new active
members are presented with a list of all other member companies. From this list,
they decide to which companies they are willing to offer credit. By refusing to
offer another member credit, the active member is either refusing to sell to
that specific company or requiring that the company provide a letter of credit
if and when a sale is made. Using this same list, new members also decide
whether or not they will purchase from each member and whether or not they will
provide a letter of credit if required. Each time members access the trading
exchange, they may review and revise their selected list of trading parties by
including previously excluded parties or new members or excluding previously
agreed upon trading parties.

Review of Bids and Offers. Once the new active member has completed this
pre-selection process, the member is eligible to enter the trading exchange
where the identity of all parties remains anonymous throughout the trading
process. Within the trading exchange, members can view and submit current bids
and offers as well as view current market information related to the product or
products they desire to trade. All bids and offers are categorized by product.
Each bid or offer contains sufficient information to enable a member to decide
whether to purchase or sell, including the type of transaction, the name of the
product and its specifications, applicable freight terms, quantity, price and
delivery terms.

Negotiation and Confirmation. After locating a bid or offer of interest, an
active member can point and click to select that posting and will be taken to a
secure negotiation screen where the member may accept the offer as posted or
enter into one-on-one private, confidential counter negotiations with the other
party. If the parties desire to negotiate specific terms, they can send each
other information online, outlining proposed changes to the posted terms.
Transactions on our trading exchange are not self-executing, even if the parties
reach agreement on all terms. An accepting party must point and click on a
confirmation button to confirm that the offered terms have been matched.

After the offered terms are matched, the identity of each party to the
transaction is revealed to the other party to the transaction but not to other
members of our trading exchange. At the same time, the terms of the matched
trade are instantaneously removed from the active screen of the trading exchange
and appear on a matched transaction screen for the market to view. Concurrent
with this transfer from the active screen to the matched transaction screen,
CheMatch sends to each party to the transaction a summary of the negotiations
and principal terms of the agreed upon transaction. At this point, the parties
to the transaction must confirm and complete the transaction offline, and may
arrange, if necessary, for financial settlement, logistics and other details
necessary to complete the trade. From here, members can return to the trading
exchange to view the market offerings.

OUR MEMBERS

Our target members are the world's leading chemical companies and other
leading purchasers and sellers of commodity chemicals, plastics and fuel
products. As of May 12, 2000, we had more than 300 members on our exchange. The
membership agreement is generally a standard form contract that sets forth the
terms and conditions upon which a member may access our trading exchange. The
standard membership agreement has an initial term of twelve months and is
automatically renewed for successive twelve month periods unless either party
provides written notice of termination thirty days prior to the expiration of
the applicable twelve month term. The agreement may be terminated by either
party for other specified reasons. The membership agreement is non-exclusive and
does not obligate our members to trade on our exchange.

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<PAGE> 44

The following is a list of entities that had executed membership agreements
as of May 12, 2000:

Aarti Ind. Ltd.
Aectra S.A.+
AllChem Industries, Inc.*
ALPAC Marketing+
Ameripol Synpol Corporation
Aristech

Arizona Chemical Company

Ashland Distribution Company
Ashland Specialty Chemical Co.+
Asia Chemicals*
Asichem Trading(s) PTE Ltd*

Azdel, Inc.

B F Goodrich Kalama, Inc.
BASF A.G.*
Bamberger Polymers, Inc.
Bayer A G+
Bayer Corporation (U.S.)+
Bayer de Mexico S.A. de C.V.
Bayer SA
Beaumont Methanol LP+

Borealis

Boubyan Petrochemical Company
BP Amoco Chemicals+
BP Chemicals Trading Ltd.*

BP Singapore PTE Limited

BPE (Bangkok Polyethylene)

Brenntag Chemipartner GMBH*

Brenntag SA
Bridon Cordage, LLC
Brunner Mond
Bud/Alan Plastics

Cal Thermoplastics, Inc.*

Celanese Ltd.+

Cementhai Chemicals Company*

Chemcentral
Chemical Trading, S. L.
Chevron Chemical -- Geneva
Chevron Chemical LLC (U.S.)+
Chevron Chemical -- Singapore

Chevron Products Company

China Hunan Chemicals Imp. & Exp. Corp.

Ciba Specialty Chemicals Ltd.

CJP International*

Clariant GMBH
Clark Refining & Marketing, Inc.
Coastal Catalyst & Chemical Company+
Conagra Grocery Products
Conchemco
Conoco Limited (UK)*
Conoco, Inc. (US)*
Copene Petroquimica S.A.*
Copequim
Copesul

Cromex Brancolor

Custom Plastics, Inc.

Daihan Paint & Ink Co.
Dainippon Ink and Chemicals, Inc.
Dasheng Chemical Products, Inc.
Deltech Corporation
Diamond Koch LP
Dow Europe S A
Dow Hydrocarbons & Resources
Dragon Crown Investment Ltd
DSM
Duravin Chemicals
E. I. duPont de Nemours and Company+
E. I. duPont de Nemours and Company - Belgium
Eastman Chemical Company
Eastpoint International Marketing
EC Erdoelchemie GMBH

Elf Atochem

Endot Industries, Inc.

Enichem
Enichem Benelux
Enron Petrochemicals (Europe) Company+
Enron Petrochemicals Company (U.S.)+
Epsilon Products Company*
Equistar Chemicals LP+
Ertisa Evercrest, Inc.

Esselen Associates Co.

Eternal Petrochemical Co., Ltd.
Evercrest, Inc.
ExxonMobil Chemical+
Fenoquimia S.A.
Fernz Specialty Chemicals
FMC Corporation

Fobchemicals.Com

Formosa Plastics Corp., USA

Fortrec Chemicals Ltd.*

Gadiv Petrochemical Industries, Ltd.*
Gantrade Corporation
Gary Plastic Packaging Corp.
GE Bayer Silicones
GE Toshiba Silicons Co., Ltd.
General Electric Plastics+
Georgia Gulf Corporation+
Great Lakes Chemical Singapore PTE
Gropo Dermet, S.A. de C.V.
Grupo Idesa
Gujarat Alkalies and Chemicals Ltd.
H. Heller & Co., Inc.

39
<PAGE> 45

H. Muehlstein & Co., Inc.*
Hang Cheung Merchandising Limited
Hanhwa Corporation Singapore Representative*
HCI Chemicals
HPI GMBH
Hanwra Int'l Corp.
Hedco Pakistan
Helm AG*
Helm Hong Kong
Helm U.S. Corporation
Hemisphere Polymer & Chemical
Herdillia Chemicals Limited
Huntsman ICI
Hunstman Petrochemical Corp.*
Hyosung Corporation
Hyundai Corporation
I.C.P. Chemicals Co., Ltd.
ICC Industries+
ICD America LLC

Idemitsu Chemicals Southeast Asia Pte Ltd.

Infineum USA LP
Integra*
Interchem 2000 Asia PTE Ltd+
InterChem 2000 Ltd (Europe)+
InterChem Americas, Inc.+
Intraco Trading PTE Ltd
Ipiranga Comercial Quimica S/A
Itochu International
Jebsen & Jessen
JLM Chemicals Asia PTE Ltd
JLM Europe B.V.*
JLM International (US)+
Kanematsu Corporation (Singapore Branch)+
Koch Chemical International (US)+
Koch Nitrogen Company
Koch Refining Intl. PTE Ltd (Europe)+
Koch Refining Intl. PTE Ltd (Singapore)*
Kolmar Petrochemicals Americas, Inc.+
Landmark Chemicals (Far East) Pte Ltd+
Landmark Chemicals S A+
Laudadio Polymers+

Lautrup Chemicals A/S

LG Chemicals, Ltd.
LG International (S'Pore) PTE., Ltd.
LG International Corp.
LG International Japan Ltd
Lion Polymers, Inc. (Div. of Laudadio Polymers)
Lonza S.P.A.
Louis Dreyfus Plastics International
Lyondell Chemical Company+
Lyondell-Citgo Refining LP+
M Holland Company+
Magnum Solvents*
Marathon Ashland Petroleum LLC
Marubeni America Corporation+
Mass Polymers

Matrix Polymers

May Enterprises Co., Ltd.
Methanex Europe S.A.
Methanex Methanol Company+
Midland Petrochemicals Ltd.*
Mikron
Millennium Inorganic Chemicals

Millennium Petrochemicals, Inc.+

Mirae International Corporation
Mitsubishi International Corporation*
Monachem International
Montell USA, Inc.
Multichem, Inc.*
Murex N.A. Ltd.

Nagase Singapore (PTE) Ltd.

National Pipe & Plastics, Inc.

Neste Oxo AB
Neste Resins
Nissho Iwai Australia Ltd

Nissho Iwai Corp (Japan)

Nissho Iwai International(s) Ltd.

Noble Americas Corp.+

Normandy Group*
NOVA Chemicals, Inc.*
Occidental Chemical Corporation
Oceana Petrochemicals AG+

OMT Oxygenated Marketing & Trading

Oracle Petroleum Company Limited
Orion International
Osterman & Company, Inc.*

Oxid L.P.*

P.T. Polysindo EKA Perkasa*

Pan American Chemical

Paragon Films, Inc.

Pasa S.A.

Peninsula Trading
Penpet Petrochemical Trading GMBH
Pequiven
Performance Polymers

Petro-Canada Chemicals, Inc.

Petrochem UK Ltd.
Petrocquimica Triunfo*

Petroflex

Petroleum Authority of Thailand

Petromont

Petroquimica Uniao SA
Petrotemex
Phenolchemie Asia Pte Ltd.
Phenolchemie GMBH & Co. KG+
Phenolchemie, Inc (US)
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<PAGE> 46

Phillips Chemical Co.+
Plassein Packaging Corp
Plaza Group*

Polialden Petroquimica

PPG Industries, Inc.
Pro Form Technologies
Proppet Reichhold Rhodia-ster S/A

Pushpa America Corporation*

PVC Container Corp.
Ranson PTE Ltd.
Rapid Industrial Plastics Co., Inc.*

Ravago Plastics NV

Rayong Olefins
RCL Industries(s) Private Ltd.*
Reichhold
Resin Technology Inc.
Resin Technology, LLC.
Rhodia Brasil Ltda*
Rhodia-Ster S/A*
Rohm and Haas Company
Roscom, Inc.
Ruetgers AG

Ruhr-Petrol GMBH

Sam Hyun Co., Ltd. Agent for Oceana
Sam Nam Petrochemical
Samsung America, Inc.+

Samsung Asia Ltd.+

Samsung Corporation (Korea)
Samsung General Chemicals
Sasol Chemicals Europe Ltd
Sasol Solvents+

Sawax

Scott Bader Company
Sentra Sintetikajaya Pt
Shell Chemical Company+
Shell Chemicals Ltd. (Europe)*
Shuman Plastics
Siam Chemicals Trading Co., Ltd.
Sierra1 International

Singapore Petroleum Co.

Sinochem Tianjim Imp & Exp Shezhen Corp.

Sisas Industries S.A.

SK Chemicals
SK Corporation (Korea)*
SK Global Americas, Inc.+
SK Global Co., Ltd. (Korea)*

S-Oil Corporation

Solvents and Chemicals, Inc.
Southern Chemical Corp
Southern Plastics*
Southwest Solvents & Chemicals Co.
Spectrum Polymers*
SPP Agaprint
Sterling Chemicals, Inc.+
Stylette
Sudamericana de Fibras SA

Sumitomo Corp (Spore) Pte, Ltd.

Sun Company, Inc.*

Synthesia Pardubice

Talichem S A*
Tauber Petrochemicals Co.+
Texas Petrochemicals Corporation*
The Scotts Company

Thirumalai Chemicals Ltd

Thornton and Company, Inc.*
Tomen America, Inc.
Tomen Corporation, Singapore Branch

TPI

Trademark Plastics Corporation*
Tradepaints
Trammochem (US)+
Trammochem AG+
Tricon Energy Ltd+

TR International

Trump Chemical Corp.

Tuntex Petrochemical*

U-Jin Chemical Co.
Ultramar Diamond Shamrock+

Union Carbide Corporation*

Union Petrochemical Corp.
Unipar
Valero Marketing & Supply+
Veba Oel A. G.*
Venro Chemical Corporation

Vinmar International Ltd+

Vinmar Overseas (Singapore) Pte Ltd.

Vitol SA, Inc.+

Voest Alpine (Singapore)*
Voest Alpine Intertrading A. G.+
Voest-Alpine Intertrading USA, Inc.+
Westlake Petrochemical Corp.+
Westway Terminal Company, Inc.
Wexford International
Wilsonart
Windsor Chemicals, Inc.
Winsway (Group) Enterprise Ltd.
Xiangfan Shuxiong Chemical & Pharm.
YPF S.A.*

- ---------------------
+ Indicates member has completed a trade on our exchange.
* Indicates member has made a bid, offer or counteroffer on our exchange but not
completed a trade.

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<PAGE> 47

Some of our members are affiliated with each other. These affiliated
entities are precluded from trading with each other on our exchange. As of May
12, 2000, 56 of our members had completed one or more transactions on our
exchange, and an additional 52 members had made a bid, offer or counteroffer but
not completed a trade. During the quarter ended March 31, 2000, three of our
members accounted for 18%, 17%, and 11% of the transactions on our exchange as
measured by metric tons traded. During fiscal 1999 and the three months ended
March 31, 2000, 53 and 133 companies, respectively, joined our exchange as
members.

PRODUCTS OFFERED

The following commodity chemicals, plastics and fuel products are presently
eligible to be traded on our exchange. We have indicated the approximate market
size and typical end uses associated with these products.

<TABLE>
<CAPTION>
ACTUAL NOTIONAL VALUE
TRADED ON OUR EXCHANGE
ESTIMATED SINCE INCEPTION
PRODUCTS MARKET SIZE THROUGH MARCH 31, 2000 TYPICAL END USES
(IN BILLIONS) (IN MILLIONS)
<S> <C> <C> <C>
COMMODITY CHEMICALS
Acetone............ $1.4 $ -- pharmaceuticals, resins, solvents
Benzene............ 8.3 116.0 fibers, paints, plastics
Butadiene.......... 4.0 -- elastomers, nylon, plastics
Caustic Soda....... 5.7 -- alumina, paper, pulp,
Cumene............. 3.5 -- resins, solvents
Cyclohexane........ 2.0 -- nylon fiber
Ethylbenzene....... 11.5 -- plastics, synthetic rubber
Ethylene Glycols... 6.6 -- anti-freeze, film, polyester fibers, resins
Mixed xylenes...... 5.1 14.3 fibers, plasticizers, solvents
Orthoxylene........ 1.1 -- plasticizers
Paraxylene......... 7.2 13.1 polyester fibers
Phenol............. 4.5 0.6 fibers, resins
Propylene.......... 20.0 -- acrylic acid, acrylonitrile, cumene
polypropylene
Styrene Monomer.... 14.4 20.4 fiberglass, plastics, resins, synthetic rubber
Toluene............ 3.3 2.4 gasoline blending, resins, solvents
FUELS
Methanol........... 6.0 3.5 antifreeze, MTBE
Methyl Tertiary -
Butyl Ether
(MTBE).......... 5.2 6.7 gasoline blending, oxygenate
Naphtha............ 28.1 -- fuel, lighter fluid, solvents
Purified
Terephthalic
Acid (PTA)...... 8.5 -- plastics, polyester fibers, resins
PLASTICS
Polyethylene....... 34.8 0.3 film, injection molding, rigid containers
Polypropylene...... 21.9 -- film, injection molding
Polystyrene........ 12.7 -- packaging and shipping materials
Polyvinyl Chloride
(PVC)........... 18.2 -- doors, packaging, pipes, window frames
FERTILIZERS
Ammonia............ 15.0 -- animal feed, fertilizers, fibers
Diammonium
Phosphate
(DAP)........... 3.7 -- fertilizer blending, soil application
Monoammonium
Phosphate
(MAP)........... 1.1 -- fertilizer blending, soil application
Potash............. 2.0 -- fertilizer, soap
Urea............... 8.0 -- fertilizers, livestock feed, melamine, resins
</TABLE>

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<PAGE> 48

We expect to add various organic and inorganic chemicals, plastics, vinyls
and fuel products to our trading exchange during 2000. Benzene accounted for
approximately 69% of the physical trading volume on our exchange in fiscal 1999
and approximately 54% in the quarter ended March 31, 2000. Benzene, which was
the first product available on our exchange, was one of eight products eligible
for trading for all of fiscal year 1999 and one of eleven products eligible for
trading for all of the quarter ending March 31, 2000.

INFORMATION RESOURCES

In addition to the relevant product and market information our members view
while trading products on our exchange, we offer users of our information
resource center access to an extensive collection of industry related
information. The providers and types of information we offer include:

PLATT'S MARKET REPORTS
Platt's Petrochemical Alert
Platt's Petrochemical Report
Platt's Petrochemical Specifications

MOTOR FUELS INFORMATION
State and Federal Resources
Motor Fuels Data
News Forums

TECNON CONSULTING
23 Market Newsletters
44 Product Specific Reports
Investment and Strategy Appraisals
Global Market Overviews

OPIS ENERGY GROUP
OPIS News Alerts
OPIS Gas Liquids
OPIS Jet Fuel
OPIS West Coast
OPIS Refinery Feedstocks
OPIS Rack Prices
OPIS Center

CPI CONSULTING ASSOCIATES, INC.
CIMBal(TM)
Approach & Methodology
Competitive Analysis
Chemical Industry Analysis
Financial Analysis
Litigation Support
Product Analysis

STRATEGIC RELATIONSHIPS

We have entered into a number of strategic relationships to, among other
things, build our membership, increase the trading volume on our exchange and
enhance our trading exchange generally. We have also contracted with third
parties to provide credit services and to facilitate logistics for our members.
We believe these strategic relationships will help establish CheMatch as the
leading Internet-based exchange for the chemical industry.

BAYER AG

Bayer AG is a subsidiary of Bayer Group, an international, research-based
company with major businesses in life sciences, polymers, and specialty
chemicals. Bayer has agreed to use our trading exchange as its preferred
platform for e-commerce trading of the products offered on our trading exchange
through December 31, 2001. In connection with Bayer's cash payment of
approximately $2 million for our common stock, we have credited Bayer's trading
account in the same amount against which any commissions generated by Bayer as a
result of any trades on our exchange will be debited. Accordingly, we will
record any commissions generated from Bayer net of the $2 million credit through
December 31, 2001 in our statement of operations.

COMPUTER SCIENCES CORPORATION

Computer Sciences Corporation is a leading international provider of
information technology services to commercial and government markets. CSC has
agreed to market our trading exchange and information resource center to
companies we have targeted as prospective members in exchange for commissions
related to these efforts. CSC has a right of first negotiation to provide
consulting services required by us, including strategic consulting, marketing,
new product development, system development management,

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<PAGE> 49

international pursuits, logistics, letters of credit and credit enhancement.
During the term of our strategic relationship, we have also agreed that CSC will
be our preferred information technology systems integrator so long as CSC's
rates are competitive and its technology and performance are reasonably
acceptable to us and we will be CSC's preferred exchange for trading commodity
products. CSC has also agreed not to compete with us during the term of our
strategic relationship and for a period of one year after termination of the
strategic relationship. The strategic relationship may be terminated by either
party upon 30 days' written notice.

DEWITT & COMPANY, INCORPORATED

DeWitt & Company, Incorporated is an international consulting and
information provider serving the petrochemical industry. We have agreed that
DeWitt will provide chemical industry trading analytics for our trading exchange
for which we pay $6,250 per month, and we have granted to DeWitt a right to a
preferred display on our trading screen for products and services offered by
DeWitt. We have also agreed to share promotional costs from time to time. We
have the right to terminate the Alliance Agreement at any time upon the payment
to DeWitt of $500,000. DeWitt may terminate the Agreement upon one year's prior
notice and the payment of $60,000.

E.I. DUPONT DE NEMOURS AND COMPANY

E.I. duPont de Nemours and Company is a global science company focused on
chemical and materials sciences and biological sciences. DuPont has agreed to
work with us to add an agreed upon list of parties to our trading exchange in
exchange for commissions related to these efforts. If these parties, prior to
December 31, 2000, complete five trades not involving duPont, or four trades
involving duPont, or two or more transactions with duPont with a product value
in the aggregate in excess of $3 million, duPont will earn commissions ranging
from $50,000 to $100,000 up to an aggregate maximum of $2 million. Such
commissions, however, must be used to purchase common stock of CheMatch at its
fair market value at the time of earning the commission. Dupont has agreed to
use our trading exchange exclusively through November 11, 2000 for trading bulk
chemicals and polymers and refined oil products over the Internet and use
reasonable efforts to trade an increasing amount of spot purchases on our
exchange for a four year period from January 1, 2001. DuPont has agreed through
November 11, 2000 to provide us at no cost with a full time employee with
relevant market knowledge to work on increasing the volume of trading on our
exchange. DuPont has also agreed for the same period not to invest in companies
that provide an on-line neutral marketplace with product offerings that
significantly overlap with those available on our trading exchange. DuPont has
also provided us with a $2 million credit towards the purchase of its products
and services. This credit will exist until December 1, 2002 and may be applied
to market development, advertising, safety, health, environmental, logistics and
other products and services that we mutually agree upon.

ECREDIT.COM

eCredit.com is a leader in the market for real-time credit, financing and
related services for e-businesses. We have contracted with eCredit.com to
provide online business verification services. eCredit.com's Global Financing
Network(TM) will enable us to offer real-time, online corporate verification of
potential business partners. The Global Financing Network provides web-enabled
access to Dun & Bradstreet and Experian information sources. Our trading
exchange is designed to provide our members the opportunity to transact with
other parties with whom they do not have pre-existing relationships. We are
working with eCredit.com to provide additional services from the Global
Financing Network that would enable our members to make credit and financing
decisions that can be processed in real time. These capabilities will allow our
members to transact with new business partners with greater confidence.

GENERAL ELECTRIC COMPANY

General Electric is a diversified services, technology and manufacturing
corporation whose products include plastics. General Electric has agreed to use
our trading exchange on a preferred, good faith basis
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<PAGE> 50

for its e-commerce purchasing, trading or auctioning of any bulk commodity
petrochemicals offered on our exchange through December 31, 2001. In addition,
General Electric has agreed to use reasonable business efforts to assist us in
developing viable e-commerce trading activity in specified contract-dominated
markets where General Electric is a significant buyer. General Electric has also
agreed to promote our trading exchange to a specified number of agreed upon
potential members of our trading exchange. We have agreed to negotiate in good
faith with General Electric regarding its ability to act as a supplier of credit
insurance to be used by us in the future and have provided General Electric the
right to match any third party offers relating to comparable services. Without
the other party's written consent, we and General Electric have agreed not to
solicit each other's employees through December 31, 2002.

MUEHLSTEIN HOLDING CORPORATION

Muehlstein Holding Corporation is the parent company of H. Muehlstein & Co.
Inc., an international marketer and reseller of plastic and rubber polymers.
Muehlstein has agreed to use good faith efforts to use our trading exchange on
an exclusive basis through December 31, 2001 for any chemicals and plastics that
it buys, sells, trades, auctions or otherwise transfers using e-commerce to the
extent those products are traded on our exchange. Nevertheless, Muehlstein may
in its sole discretion, but acting in good faith, use platforms other than ours
for selling and buying purposes or where suppliers require the use of other
platforms. We have agreed to credit Muehlstein's trading account on a
dollar-for-dollar basis in the amount of payments made under the promissory note
executed by Muehlstein in connection with its purchase of our common stock,
against which any commissions generated by Muehlstein through May 1, 2002 will
be debited. Accordingly, we will record any commissions generated from
Muehlstein net of the $1 million credit through May 1, 2002 in our statement of
operations.

STOLT-NIELSEN TRANSPORTATION GROUP LTD.

Stolt-Nielsen Transportation Group Ltd., a subsidiary of Stolt-Nielsen
S.A., is the world's leading provider of transportation services for bulk
chemicals, edible oils, acids and other specialty liquids. We have executed a
strategic alliance agreement with Stolt-Nielsen's affiliate, Optimum Logistics
Ltd., commonly known as ChemLink.com, an Internet-based logistics operating
system. We intend to integrate the ChemLink System into our trading exchange to
permit our members to procure transportation and other logistic services for
bulk chemicals from a variety of service providers, as well as manage and
monitor shipments through all phases of the supply chain. The services that we
expect to be offered through the ChemLink system include firm freight fixtures
and rate indications for liquid chemical products, shipping and customs
brokering, freight forwarding, cargo inspection and surveying, terminaling and
storage and inventory management and tracking services and related
documentation. The alliance has a term of three years, which may be extended if
agreed upon criteria are met. CheMatch and ChemLink have agreed to pay each
other fees equal to 20 percent of commission revenue earned by either CheMatch
or ChemLink from customers of the other company up to $5 million per year. The
parties have also agreed to assist each other in establishing commercial
relationships with certain target companies in exchange for 20 percent of the
gross revenues earned and received by the other party. ChemLink has agreed to
offer CheMatch the option to invest at least $1 million in a private offering of
securities of Optimum involving an aggregate amount of at least $5 million.

TOWNSENDTARNELL, INC.

TownsendTarnell, Inc. is a global consulting firm that specializes in
plastics and chemical market reports, end market analysis databases for the
automotive materials, pipe and construction industries, and benchmarking
studies. It provides industry-focused, confidential business information
reports, credit, marketing and sales lead generation services to qualifying
suppliers in the plastics and chemical industry. In connection with
TownsendTarnell's purchase of our common stock, we have entered into a
consulting agreement with TownsendTarnell. During the first six months of the
consulting agreement, TownsendTarnell's personnel are required to use their best
reasonable efforts to promote the use of our trading exchange by potential
buyers of thermoplastic resins in North America and Europe.

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TownsendTarnell's efforts will be directed towards approximately 800 entities
identified by us as potential users of our trading exchange and related
services. Additionally, TownsendTarnell will provide us with various credit
services. Under the consulting agreement, we have agreed to pay TownsendTarnell
$70,000 per month for nine consecutive months, commencing February 1, 2000. The
consulting agreement is cancelable by mutual consent or upon six months notice.

Additionally, TownsendTarnell has agreed to provide us with a business plan
relating to the creation and development of TownsendTarnell.com. Assuming the
business plan is acceptable to us, we have agreed to extend TownsendTarnell a
$500,000 line of credit. TownsendTarnell has offered us an option to invest $1
million in any private offering of securities relating to TownsendTarnell.com
involving an aggregate amount of at least $5 million.

WILLIAM HEINEMANN INC.

William Heinemann is a subsidiary of Reed Elsevier plc, an international
publisher and information provider with three primary business segments:
scientific, professional and business-to-business. Reed's publications include
Chemical News & Intelligence, Asian Chemical News, European Chemical News and
Chemical Insight. We have agreed to purchase information content, advertising
and other promotional material and services from William Heinemann or a designee
of William Heinemann in amounts totaling at least $500,000 between January 1,
2000 and January 1, 2002. The products and services we have agreed to purchase
will be priced from time to time as we mutually agree. We will integrate
information provided by Reed into our information resource center.

SALES, MARKETING AND SUPPORT

We market and sell our products and services through a direct sales force
that targets the world's leading chemical companies and other leading purchasers
and sellers of commodity chemicals, plastics and fuel products. Our sales
process leverages our management expertise and is made through a multi-tiered
approach of:

- solicitations made by our senior executives;

- direct sales by industry specialists;

- proactive customer support representatives; and

- traditional presentations and participation at industry conferences and
trade events.

Our senior executives and other industry specialists are an important part
of the sales process due to their significant experience in the chemical
industry and personal contacts within their given area of expertise. Our sales
process is highly personal and interactive, targeting executive officers and key
decision makers within a prospective organization. To encourage trading on our
exchange, we often notify individual traders within companies who are active
purchasers or sellers of products that are the subject of an outstanding offer
or bid on our exchange. Our industry specialists will also notify these
individuals when significant trades are completed on our exchange that involve
the products frequently traded by those individuals.

Our customer service representatives complement our direct sales force.
Each new member is assigned a customer service representative who is responsible
for ensuring that the new member has received proper training and is fully adept
at transacting business on our exchange. In addition, these representatives
serve as day-to-day contacts for general and administrative inquiries that our
members may make and are responsible for building and maintaining relationships
with our members. With the recent openings of our international offices in Hong
Kong, Manchester, England, Singapore, Tokyo, Japan and Zurich, Switzerland, we
have commenced the deployment and execution of direct sales and customer service
representatives internationally to accommodate the specific needs of
international markets. With the opening of these new locations, we had 41 sales
and marketing employees and consultants as of March 31, 2000, with 35
individuals based domestically and 6 based internationally.

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Our marketing efforts have focused exclusively on establishing our
marketplace as the preferred online site for trading commodity chemicals,
plastics and fuel products. To increase critical mass and name awareness, we
utilize industry publication advertising, public relations, direct mail
campaigns, and presentations at industry trade shows and conferences. We also
utilize electronic communications and information on our web sites to market our
trading exchange.

OUR TECHNOLOGY

We have developed our Internet-based solution utilizing proprietary
programs and, where appropriate, commercially available, licensed technologies.
The current platform underlying our trading exchange was developed using
Microsoft Windows NT architecture, utilizing Active Server Pages, a Microsoft
Internet Information Server and a Microsoft SQL Server database. We are
continually adding features and functionality to our existing platform to meet
the requirements of our members, the market and our expanding business model.

In 2000, we intend to transition a number of functions from our existing
platform to a new system architecture which is being designed by Computer
Sciences Corporation. Our new platform is a multi-tier, object oriented and
component-based architecture using tools such as Java, Enterprise Java Beans and
Oracle, and hardware from Sun, Compaq and Cisco. This new architecture should
allow us to quickly add functions and features to support our rapidly evolving
business goals and directives. We have planned enhancements to our technology
platform that will enable our members to, among other things:

- participate in new exchange functions, including auctions;

- personalize information available on our exchange and information
resource center based on their user profile; and

- receive broadcast and individual messages via e-mail, pagers or other
similar devices regarding trading activity on the exchange.

When implemented, we expect our new architecture to be characterized by the
following key features:

Scalability. Our architecture will be scalable, enabling us to accommodate
our expanding business model as well as adding new members. This scalability
should permit us to quickly add members, products and services to our exchange
and increase trading volume without incurring significant infrastructure costs.

Speed and Capacity. Our new system will be designed to support hundreds of
trades per day, with sub-second response times for critical transactions. We are
developing our new system architecture to support more than 7,000 registered
traders and to have enough initial capacity to support ten to fifteen
transactions per second. With the appropriate hardware upgrades the transaction
throughput can be scaled up to 50 times this level.

Reliability and Availability. Our new system architecture will be hosted by
Digital Island, Inc., a first tier web hosting provider, who will provide most
key infrastructure services, including Internet connectivity, hardware and
software support and performance monitoring. Our exchange is supported by a
fully redundant configuration which we believe will be able to sustain a partial
failure without affecting our customers. We have service level agreements in
place to provide support 24 hours a day, seven days a week and ensure the
operational availability our members require.

Security. Our new system architecture is designed to include many security
features, including member passwords, user profiling and system administration
logs. Multiple layers of security, including secure sockets layer technology,
protect our application and data. Our application supports up to 128-bit
standard encryption technology, along with monitored firewalls and other
restrictions and physical or electronic separations to prevent harm to the
application and data.

PROPRIETARY RIGHTS

We rely on a combination of trademark, copyright and patent law, trade
secret protection license and confidentiality and non-competition agreements
with our employees, members and business allies to protect our proprietary
rights in products, services, know-how and information. We have filed a U.S.
patent

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application for certain of our business methods and procedures used in our
exchange. We have received federal trademark registrations for CHEMATCH ONLINE
(with stylized design), CM (with stylized design) and PETROCHEM.NET (with
stylized design). Our means of protecting our proprietary rights in the United
States or abroad may not be adequate and competitors may independently develop
similar technology. We cannot be certain that our services will not infringe
patents or other intellectual property rights that may relate to our services
although we are not aware of any such infringement. Like other technology and
Internet-based businesses, we face the risk that we will be unable to protect
all of our intellectual property and other proprietary rights, and the risk that
we will be found to have infringed the proprietary rights of others.

COMPETITION

The market for business-to-business commerce on the Internet is new and
rapidly evolving, and competition exists and is expected to increase
significantly in the future. Barriers to entry are relatively insubstantial. We
believe that the success of companies seeking to create an Internet-based
solution for trading commodity chemicals and other products and providing
related services will depend on the following factors:

- the adoption of the solution by a significant number of users;

- the quality and reliability of the solution;

- the breadth and depth of product and service offerings; and

- the ease of use and convenience of the solution.

We presently face competition from a number of companies offering or
planning to offer Internet-based trading solutions to the chemical or related
industries. These competitors include AutoBase Information Systems Inc.
(efuel.com), ChemConnect, Inc., ChemCross.com, Inc., Commerce One, Inc.,
Commerx, Inc. (PlasticsNet.com), e-Chemicals Inc., fob.com, FreeMarkets, Inc.,
PurchasePro.com, Inc., VerticalNet, Inc. and their respective affiliates. We
face additional competition from large, established chemical companies and
others who offer Internet-based alternatives to the traditional methods of
purchasing and selling commodity chemicals and other products we currently offer
or intend to offer in the future. Some of these companies have longer operating
histories, greater name recognition, an established network of potential users
and significantly greater financial, technical and marketing resources than we
do. These potential competitors may be able to undertake more extensive
marketing campaigns for their Internet-based solution and adopt more aggressive
pricing policies in attracting potential users of their solution. For these
reasons, our ability to compete effectively against these enterprises is
uncertain. Any of these alternative solutions may gain greater market acceptance
than our marketplace.

GOVERNMENT REGULATION

As with many Internet-based businesses, we operate in an environment of
tremendous uncertainty as to potential government regulation. We believe that we
are not currently subject to direct regulation applicable to online commerce,
other than regulations applicable to businesses generally. However, the Internet
has rapidly emerged as a commerce medium, and governmental agencies have not yet
been able to adapt existing regulations to its use. Future laws, regulations and
court decisions may affect the Internet or other online services, covering
issues such as user pricing, user privacy, freedom of expression, access
charges, taxation, content and quality of products and services, advertising,
intellectual property rights and information security. In addition, because our
services are offered worldwide, and we facilitate sales of goods to clients
worldwide, foreign jurisdictions may claim that we are required to comply with
their laws. Any future regulation may have a negative impact on our business.

Because we are an Internet company, it is unclear in which jurisdictions we
are actually conducting business. Our failure to qualify to do business in a
jurisdiction that requires us to do so could subject us to fines and penalties
and could result in our inability to enforce agreements in that jurisdiction.

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Numerous states have laws and regulations regarding the conduct of auctions
and the liability of auctioneers. We do not believe that these laws and
regulations, which were enacted for consumer protection many years ago, will
apply to the online auction services that we expect to introduce. However, one
or more jurisdictions may attempt to impose these laws and regulations on these
operations in the future.

Several telecommunications carriers are seeking to have telecommunications
over the Internet regulated by the Federal Communications Commission in the same
manner as other telecommunications services. Additionally, local telephone
carriers have petitioned the Federal Communications Commission to regulate
Internet service providers and online service providers in a manner similar to
long distance telephone carriers and to impose access fees on such providers. If
either of these petitions are granted, the costs of communicating on the
Internet could increase substantially. This, in turn, could slow the growth of
use of the Internet. Any such legislation or regulation could materially
adversely affect our business.

COMMODITIES REGULATION

Through our exchange, we facilitate trading in forward contracts and
financial derivatives known as swap agreements. Forward contracts, which are
contracts in physical commodities for deferred shipment or delivery, are not
subject to the Commodity Exchange Act or to CFTC rules and regulations. Swap
transactions are conducted on our exchange in reliance on the CFTC's exemption
for certain swap agreements.

We limit participation in forward contracts on our exchange to companies
and persons that are commercially active in the petrochemicals industry and
market and that normally take physical delivery of the commodity through
customary commercial channels. Further, transactions are not completed on our
exchange since, after matching offered terms on our exchange, participants must
enter into bilateral purchase and sale agreements offline in order to create
legally binding transactions.

We also facilitate trading in swap agreements, in which the parties
exchange cash payments with reference to changes in the price of a commodity or
another agreed benchmark. The Commodity Exchange Act requires that trading in
many instruments regulated by the CFTC must be confined to designated contract
markets. However, swap agreements that meet the CFTC's exemption standards or
its policy statements regarding swaps may be offered and entered into without
using a designated contract market. While these exemption standards are not free
from ambiguity as they apply to online exchanges such as ours, we believe that
our swap program conforms with these standards. In particular, we believe that
the participants on our exchange meet the criteria of "eligible swap
participants" as defined by the CFTC. Further, after matching offered terms on
our exchange, participants must enter into bilateral swap agreements offline in
order to create legally binding swap transactions. Moreover, we believe that our
program to facilitate swap transactions conforms with the CFTC's swaps policy
statement. If the CFTC or a member of our exchange were to take the position
that the swap agreements entered into by members on our exchange are required to
be entered into using a designated contract market and if that position were
sustained by a court having jurisdiction over us or our members, we could not
continue to offer a swap program, and the swap agreements previously entered
into could be unenforceable, possibly resulting in claims against us and the
counterparties to those transactions. Furthermore, the CFTC might seek fines and
penalties against us. The mere threat of such a challenge by the CFTC might
cause us to cease facilitating the trading of swap agreements. Furthermore, if
the CFTC were to take other adverse actions, such as effecting a change in CFTC
rules or policies that would prohibit us from facilitating swap transactions, or
if Congress were to amend the Commodity Exchange Act in an adverse manner, our
ability to offer a swap program could be impaired or foreclosed. The occurrence
of any of these events would adversely affect our business, results of
operations and financial condition.

The Commodity Exchange Act and existing CFTC policies currently provide
that, with certain exceptions, transactions in futures contracts and options
thereon must be conducted only on or through a board of trade that has been
designated by the CFTC as a contract market. The qualifications required for
such designation include features that are not found in our exchange, and we are
not eligible for contract

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market designation. Therefore, we are unable to offer futures contracts or
options thereon directly through our exchange.

FACILITIES

Our principal executive offices are located at 2900 North Loop West, Suite
1120, Houston, Texas 77092. We also maintain domestic offices in New York, New
York, San Ramon, California and Stamford, Connecticut, and international offices
in Brussels, Belgium, Hong Kong, Manchester, England, Singapore, Tokyo, Japan
and Zurich, Switzerland. We lease office space in each of these cities.

EMPLOYEES

As of March 31, 2000, we had 64 employees. We are not subject to or bound
by any labor or collective bargaining agreements.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

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MANAGEMENT

OFFICERS AND DIRECTORS

The directors, executive officers and other officers of CheMatch, and their
respective ages and positions or responsibility as of March 31, 2000, are as
follows:

<TABLE>
<CAPTION>
NAME AGE POSITION -- RESPONSIBILITY
<S> <C> <C>
Carl McCutcheon............... 47 Chairman, President and Chief Executive Officer
Lawrance McAfee............... 45 Executive Vice President, Chief Financial Officer, Secretary
and Director
Fred Cook..................... 57 Senior Vice President and General Manager -- North America
John Sharum................... 53 Senior Vice President and General Manager -- International
Michael Appling............... 33 Vice President -- Corporate Development
Kevin Boyle................... 45 Vice President -- Analytics
Don Churchman................. 49 Vice President -- Polymers
Scott Creasman................ 35 Vice President -- Controller and Assistant Secretary
Clifton Currin................ 45 Vice President -- Olefins
Gerard Elias.................. 34 Vice President -- Communications and Investor Relations
Michael Ereli................. 38 Vice President -- Technology
Matthew Frye.................. 39 Vice President -- Sales and Marketing
Roberta Kowalishin............ 38 Vice President -- Technology Ventures
Roger Leedy................... 57 Vice President -- Aromatics
Joseph Mathew................. 31 Vice President -- Information and Analytics
Simon Palmer.................. 37 Vice President -- Aromatics and Chemical Intermediates
Paul Pryzant.................. 43 Vice President -- Co-General Counsel and Assistant Secretary
Jim Rahe...................... 59 Vice President -- Fuel Products and Inorganics
Scott Shelton................. 53 Vice President -- Co-General Counsel and Assistant Secretary
Barry Siler................... 55 Vice President -- Crude Oil and Refined Products
Kevin Wenta................... 36 Vice President -- Business Development and e-Strategy
Earl Armstrong................ 55 Director
Bob Gower..................... 62 Director
Janet Hickey.................. 55 Director
James Saviano................. 57 Director
David Tabors.................. 28 Director
</TABLE>

CARL MCCUTCHEON joined CheMatch in June 1999 as President and Chief
Executive Officer and was elected Chairman in January 2000. Prior to joining
CheMatch, Mr. McCutcheon served as senior vice president of term marketing for
Koch Industrial and Utility Services from June 1997 to December 1998. Mr.
McCutcheon was a vice president for Enron Capital and Trade Resources from
February 1995 to May 1997. From November 1992 to February 1995, Mr. McCutcheon
was a vice president for Agricultural Minerals and Chemicals and its successor
company, Terra Industries. He served as vice president and general manager for
Williams Power Company and in various officer and management positions for
various subsidiaries of Williams from December 1979 to October 1992. Prior to
his service with Williams, Mr. McCutcheon was an auditor with Ernst & Young. Mr.
McCutcheon received a B.S. B.A. from the University of Tulsa in 1973 and an
M.B.A from Harvard in 1976. He is a member of the AICPA. Mr. McCutcheon also
served as a commissioner on the State of Oklahoma Natural Gas Policy Commission
from 1994 to 1996.

LAWRANCE MCAFEE joined CheMatch in September 1999 as Chief Financial
Officer and Secretary and was appointed Executive Vice President and Director in
February 2000. Prior to joining CheMatch, Mr. McAfee served as executive vice
president and chief financial officer, and was a member of the board of
directors of ITEQ, Inc. from March 1993 to September 1999. He served as chief
financial officer and a member of the board of directors for Waste Processor
Industries, Inc. from May 1991 to March 1993.

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Mr. McAfee was senior vice president and chief financial officer of Stillbrooke
Corporation from April 1989 to February 1991 and served as chief financial
officer and held other financial management positions with US Home Corporation
from April 1982 to May 1989. Prior to joining US Home Corporation, Mr. McAfee
held financial management positions with Transco Companies and First National
Bank in Dallas. He received a B.B.A. from the University of Texas at Austin in
1977 and an M.B.A. from Southern Methodist University in 1978.

FRED COOK joined CheMatch, Inc. in April 1997. He was a founder of
CheMatch, Inc. and led the software design phase, market introduction, and
commercial launch of CheMatch, Inc. He is currently Senior Vice President and
General Manager of North America and is responsible for monitoring and expanding
our exchange. Prior to joining CheMatch, he was a special projects manager for
Enron focusing on new capital investments and joint ventures in the olefins
industry from October 1994 to March 1997. From February 1966 to May 1994, Mr.
Cook held a number of sales and marketing positions with the Dow Chemical
Company, including commercial director for the Hydrocarbons and Energy Group and
vice president in charge of monomers. He received a B.S. from Louisiana State
University in 1966.

JOHN SHARUM joined CheMatch in November 1999 as Vice
President -- International and was appointed Senior Vice President and General
Manager -- International in January 2000. Prior to joining CheMatch, Mr. Sharum
was a vice president in Chevron Chemical Corporation's international division
from February 1996 to September 1999. He received B.S. and B.S.E. degrees from
the University of Michigan in 1970 and a M.B.A. from Golden Gate University in
1984.

MICHAEL APPLING joined CheMatch in March 2000 as Vice
President -- Corporate Development. Prior to joining CheMatch he served as chief
financial officer and vice president of American Eco Corporation from June 1999
to March 2000. He served as vice president of finance and accounting and
director of corporate development for ITEQ, Inc., from September 1997 to May
1999. From 1991 to 1997, Mr. Appling worked for the audit practice of Arthur
Andersen LLP, most recently as manager where he served several public companies
extensively involved in mergers and acquisitions. He is currently a member of
the Board of Directors of American Eco Corporation and U.S. Industrial Services.
He received a B.B.A. from Tarleton State University in 1990.

KEVIN BOYLE joined CheMatch in July 1999 as Vice President -- Analytics. He
is responsible for building our information resource, developing new alliances
and bringing new product offerings to our exchange. Prior to joining CheMatch,
Mr. Boyle was employed by Koch Chemical Company from July 1997 through July 1999
where he built the analysis function to guide trading, financial derivatives and
commercial development. Prior to his service with Koch, he was responsible for
market research of polymers and petrochemicals at Occidental Chemical. Mr. Boyle
received a B.S. in Chemistry from the University of Wisconsin at Parkside in
1977 and an M.B.A. from State University of New York at Buffalo in 1987.

DON CHURCHMAN joined CheMatch in July 1999 as Vice
President -- Polymers. Prior to joining CheMatch, Mr. Churchman was a senior
vice president and a co-founder of Performance Polymers where he was employed
from May 1989 to July 1998. While at Performance Polymers, he managed raw
material supply relationships and a joint venture with Prochem International, a
plastics and chemical international trading enterprise with commercial
relationships in the Pacific Rim, South America, Europe, Africa, India and the
Middle East. From January 1987 to May 1989, Mr. Churchman was vice president of
sales and marketing with Plastic Distributing Corporation. He was also a
director of sales and marketing for Polycom Huntsman from June 1985 to January
1987 which acquired Georgia Pacific's Polymer Materials Division where he was
business manager of plastics resins from January 1984 to June 1985. He also
served as marketing manager of polypropylene and held various product and sales
management positions with Rexene Polyolefins Co. from April 1977 to January
1984.

SCOTT CREASMAN joined CheMatch in September 1999 as Vice
President -- Controller. Prior to joining CheMatch, he served as vice
president -- controller of Chemical Logistics Corporation from June 1998 through
April 1999. From November 1997 through June 1998, Mr. Creasman was employed by
U.S. Legal Support, Inc. as vice president and corporate controller. From
October 1996 through August
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1997, he served as controller of Brink's Home Security, Inc. From July 1990
through October 1996, Mr. Creasman was with Texas Eastern Products Pipeline
Company, the operator of a publicly held petroleum products pipeline company,
most recently serving as their controller. He received a B.B.A. from the
University of Texas at Austin in 1987 and is a registered Certified Public
Accountant in the state of Texas.

CLIFTON CURRIN joined CheMatch in February 2000 as Vice
President -- Olefins. Prior to joining CheMatch, Mr. Currin was a vice president
of materials management with Equistar Chemicals LP from May 1998 to November
1999. Previously he served as a vice president of Lyondell Chemical Company from
October 1994 to May 1998. Prior to his service with Lyondell, Mr. Currin was
with ARCO. He received a B.S. and Masters from Cornell University in 1976 and
1977, respectively, and an M.B.A. from the University of Houston in 1981.

GERARD ELIAS joined CheMatch in September 1999 as Vice
President -- Communications and Investor Relations. Prior to joining CheMatch,
Mr. Elias was a director for Burson-Marsteller from August 1995 to August 1999.
He received a C.A.M. from City University and the London School of Economics in
1986.

MICHAEL ERELI joined CheMatch in November 1999 and was appointed Vice
President -- Technology in January 2000. Prior to joining CheMatch, Mr. Ereli
was the Information Technology director for Koch Energy from February 1998 to
October 1999 where he helped transform Koch from an asset-focused enterprise to
a commodity trading organization. From September 1994 to January 1997, he worked
as a principal in the energy practice of CSC Consulting. Primarily in a business
development role, Mr. Ereli helped a number of energy companies develop
e-commerce strategies, implement gas and power trading systems and initiate
business process change. From August 1984 to August 1994, he worked for Andersen
Consulting, ultimately serving as a manager in their global energy practice. Mr.
Ereli received a B.A. from Harvard University in 1984.

MATTHEW FRYE joined CheMatch in July 1999 as Vice President -- Sales and
Marketing. Prior to joining CheMatch, Mr. Frye served as vice president of
electronic trading systems for Altra Energy Technologies from January 1996 to
March 1999. Prior to launching Altra Energy Technologies, he was employed by
Williams Energy Ventures from May 1993 to December 1995 where he served as a
business unit manager and was responsible for the development of the first
real-time, anonymous online commodity trading system. Mr. Frye also worked as a
senior marketing representative and business development representative for
Williams Energy Company from December 1988 to April 1993, and as a senior
financial analyst for Tenneco Oil Company from January 1988 to December 1988.
From June 1983 to December 1987, Mr. Frye was an accountant for Samson
Resources. He received a B.S. from Oklahoma State in 1983 and an M.B.A. from the
University of Tulsa in 1987.

ROBERTA KOWALISHIN joined CheMatch in February 2000 as Vice
President -- Technology Ventures. Prior to joining CheMatch, Ms. Kowalishin was
a partner and lead strategist with Computer Sciences Corporation's e-business
practice from April 1996 to February 2000. While at CSC, she led several
e-business strategy projects in financial services, chemicals, auctions and
industrial products markets. From July 1994 to February 1996, she was a vice
president at JP Morgan, leading emerging markets infrastructure technologies.
She also held the position of information technology manager at Agrium, Inc.,
North America's largest producer of nitrogen fertilizers and a major producer of
potash and phosphate fertilizer, from December 1987 to August 1992. Ms.
Kowalishin received an M.S. from the MIT Sloan School of Management in 1994 and
a B.C. from McGill University in 1984.

ROGER LEEDY joined CheMatch in July 1999 as Vice President -- Aromatics.
Prior to joining CheMatch, he was general manager of JLM International's Houston
office from May 1998 to June 1999, where he specialized in commodity aromatics
trading. From March 1989 to April 1998, he directed all domestic based
purchasing activities and new market development for SentraChem International.
Prior to his service with SentraChem International, Mr. Leedy was senior vice
president for plastics at CT Chemicals, Inc. from April 1988 to March 1989. Mr.
Leedy received a B.S. from Parsons College in 1964 and a M.S. in Business
Administration from Kansas State University in 1968.

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JOSEPH MATHEW joined CheMatch in September 1999 and was appointed Vice
President -- Information & Analytics in March 2000. Prior to joining CheMatch,
Mr. Mathew had primary commercial responsibility with privatizations,
concessions, and acquisitions as a director of the Mexico and Central America
Group at Azurix Corp. from September 1998 to September 1999. Prior to working at
Azurix, he worked at Enron Capital & Trade Services, Inc., from July 1996 to
September 1997, as a manager in Gas & Power Origination and Project Finance. Mr.
Mathew was an investment banking/fixed income derivatives Analyst with Merrill
Lynch & Co. from 1991 to 1993, and was a government finance/fixed income
derivatives Associate with Prudential Securities, Inc. from 1993 to 1994. He
received a B.B.A from Loyola University of Chicago in 1991 and a M.B.A from the
University of Chicago Graduate School of Business in 1996.

SIMON PALMER joined CheMatch in August 1999 as Vice President -- Aromatics
and Chemical Intermediates. Prior to joining CheMatch, Mr. Palmer served as vice
president for DeWitt & Company's benzene and derivatives business from December
1996 to August 1999 and was responsible for management of all consulting
services to a global client base that included Exxon, Shell, BASF, Amoco, GE,
ICI plc, Fina and Equistar. Prior to his service with DeWitt & Company, he
worked for ICI plc from February 1981 to December 1996 in a variety of
management positions including product, distribution, customer service and
marketing of films, chemicals and polymers. Mr. Palmer received an honours
degree in Business Studies from the University of London in 1984.

PAUL PRYZANT joined CheMatch in January 2000 as Vice
President -- Co-General Counsel. Prior to joining CheMatch, Mr. Pryzant was
senior vice president and general counsel of TransCom USA, a publicly traded
consolidator of the heavy duty truck parts industry, from April 1998 to January
2000. Prior to that, Mr. Pryzant had 17 years of experience with various law
firms, with a practice concentration in corporate/securities law and mergers and
acquisitions. Most recently, Mr. Pryzant was a shareholder with Snell & Smith,
P.C., Houston, Texas, from December 1994 to March 1998, and a partner with
Butler & Binion, Houston, Texas, from January 1990 to November 1994. He received
a B.S. from the University of Pennsylvania in 1978 and a J.D. from the
University of Texas School of Law in 1981.

JIM RAHE joined CheMatch in July 1999 as Vice President -- Fuel Products
and Inorganics. Prior to joining CheMatch, he was with the Jones Graduate School
of Management at Rice University from June 1994 to June 1999. He served as vice
president of petrochemical sales for Occidental Chemical Corporation from August
1990 to May 1994. Prior to his service with Occidental Chemical Corporation, he
held various sales and marketing positions at Cain Chemical Company, Imperial
Chemical Industries and Monsanto Company. He received a B.S. from Oklahoma State
University in 1963 and an M.B.A. in 1966.

SCOTT SHELTON joined CheMatch in September 1999 as Vice President and
General Counsel. Mr. Shelton held various officer level positions, including
vice president of Koch Gateway Pipeline Company within Koch Energy, Inc. from
September 1997 to April 1999. While with Koch, Mr. Shelton was involved in
marketing financial derivatives and in structuring natural gas gathering and
processing transactions. From April 1995 to August 1997, he served as vice
president of Energy for Terra Industries, Inc. and was responsible for purchase
and delivery of natural gas for fertilizer plants and natural gas financial
hedging operations. Previously, he held various management and officer level
positions with Williams, Fina, and Perry Gas and was engaged in the private
practice of law. He received a B.A. from Texas Christian University in 1969 and
a J.D. from the University of Texas School of Law in 1972. Mr. Shelton has
served as Chairman of the Oklahoma Industrial Energy Consumers and a member of
both the Oklahoma Natural Gas Policy Commission and the Oklahoma Joint
Legislative Committee for Electric Restructuring.

BARRY SILER joined CheMatch in March 2000 as Vice President -- Crude Oil
and Refined Products. Prior to joining CheMatch, Mr. Siler was the chief
executive officer of Kodiak Fuels, a consulting company managing price risk for
the crude oil, refinery and airline industries from 1994 to March 2000. From
1993 to 1996, Mr. Siler was vice president of risk management for World Fuel
Services. Prior to then, he held various trading, marketing and risk management
positions with Mieco, Inc., Challenger

54
<PAGE> 60

Petroleum (USA), Inc., Ferrell Petroleum and Hill Petroleum. Mr. Siler also held
various positions in the crude oil, jet fuel and petrochemicals at The Dow
Chemical Company from 1970 to 1982. Mr. Siler received a B.A. from Albion
College in 1967.

KEVIN WENTA joined CheMatch in July 1999 as Vice President--Business
Development and e-Strategy. Prior to joining CheMatch, Mr. Wenta specialized in
e-commerce, business strategy formulation and channel strategy for the Global
Chemicals Practice of Andersen Consulting from March 1996 to July 1999. Prior to
his service with Andersen Consulting, Mr. Wenta was a general management
consultant at Towers Perrin from April 1994 to March 1996, a business planning
analyst for ARCO from August 1991 to March 1994 and a sales representative for
Shell Chemical from February 1987 to May 1991. Mr. Wenta received a B.S. from
the University of Texas at Austin in 1986 and an M.B.A. from the University of
Chicago in 1991.

EARL ARMSTRONG has served as a director of CheMatch since June 1999. He
currently serves as a principal and managing director at DeWitt & Company, Inc.,
an international petrochemical business-consulting group, where he has been
employed since March 1989. Prior to joining DeWitt, Mr. Armstrong held various
positions at Exxon Chemical from 1968 to 1987. He received a B.S. from the
University of Virginia in 1968.

BOB GOWER has served as a director of CheMatch since February 2000. He
currently is a private investor. He served as the Chairman of Specified Fuels &
Chemicals, LLC from July 1997 to March 2000. Mr. Gower served as chief executive
officer of Lyondell Petrochemical Company from April 1985 to December 1996, when
he retired. Prior to becoming chief executive officer, he held various positions
with Sinclair Oil Company and Atlantic Richfield before and after the merger of
these two companies. He is currently a director of Kirby Corporation and OmNova
Solutions, Inc. Mr. Gower received a B.A. and M.A. from Southern Illinois in
1958 and 1960, respectively, and a Ph.D. in organic chemistry from the
University of Minnesota in 1963.

JAMES SAVIANO has served as a director of CheMatch since February 2000.
From July 1986 until his retirement in February 2000, Mr. Saviano held a variety
of positions with Computer Sciences Corporation, most recently as president and
chief executive officer of its consulting group and as global vice president of
e-business strategy. Mr. Saviano continues at CSC in a part-time role advising
management on e-business strategy as necessary. Prior to his service with CSC,
he was a co-founder of Computer Partners, a management consulting and systems
integration company, and served as a systems analyst for Keane Associates. He
received a B.S. from the University of Massachusetts in 1964 and has pursued
graduate studies in computer science at Worcester Polytechnic Institute.

JANET HICKEY has served as a director of CheMatch since December 1999. She
has served as a general partner of the Sprout Group, a division of DLJ Capital
Corporation, and a divisional senior vice president of DLJ Capital Corporation
since 1985. Ms. Hickey serves on the board of directors of Edison Schools, Inc.
and several private companies. The Sprout Group and DLJ Capital Corporation are
affiliated with Donaldson, Lufkin & Jenrette Securities Corporation, an
underwriter of this offering.

DAVID TABORS has served as a director of CheMatch since June 1999. He
currently serves as a principal of Battery Ventures where he has been employed
since October 1995. Prior to joining Battery Ventures, he was an associate with
Cambridge Associates from August 1993 to October 1995. Mr. Tabors received a
B.S. from Dartmouth College in 1993.

BOARD OF DIRECTORS

Our board of directors currently consists of seven members. Currently, each
director is elected for a period of one year at our annual meeting of
stockholders and serves until the next annual meeting or until his or her
successor is duly elected and qualified. There are no family relationships among
the directors and officers of CheMatch.

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<PAGE> 61

BOARD COMMITTEES

Our board of directors has an audit committee and a compensation committee.
The audit committee consists of Mr. Gower, Ms. Hickey and Mr. Saviano. The audit
committee will make recommendations to the board of directors regarding the
selection of independent accountants, will review the results and scope of audit
and other services provided by our independent accountants and will review and
evaluate our audit and control functions. The compensation committee consists of
Ms. Hickey and Mr. Tabors. The compensation committee will administer our stock
plans and make decisions concerning salaries and incentive compensation for our
executive officers.

DIRECTOR COMPENSATION

Our employee directors do not receive any cash compensation from us for
their services as members of our board of directors. We reimburse our
non-employee directors for travel and lodging expenses in connection with their
attendance at board and committee meetings. Additionally, our non-employee
directors will be paid $2,500 for each board meeting they attend and $500 for
each committee meeting they attend. In February 2000, we granted two of our
non-employee directors, Mr. Gower and Mr. Saviano, 25,000 options, 50% of which
vested on the date of their grant and 50% of which vest ratably on a monthly
basis over a two year period. The exercise price for all of these options is
$9.79 per share.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of our compensation committee is currently or has been
at any time since the formation of CheMatch, an officer or employee of CheMatch.
No member of our compensation committee 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.

INDEMNIFICATION

Prior to the closing of this offering, we intend to enter into
indemnification agreements with each of our directors and executive officers.
The form of indemnity agreement provides that we will indemnify our directors or
executive officers to the fullest extent permitted by Delaware law.

CheMatch's certificate of incorporation and bylaws contain provisions
relating to the limitation of liability and indemnification of our directors and
officers. The certificate of incorporation provides that directors shall not be
personally liable to CheMatch or its stockholders for monetary damages for any
breach of fiduciary duty as a director, except for liability for:

- any breach of a director's duty of loyalty to CheMatch or its
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 as provided in Section 174 of the Delaware General
Corporation Law; or

- any transaction from which the director derives any improper personal
benefit.

Our certificate of incorporation also provides that if the Delaware General
Corporation Law is amended to authorize corporate action further eliminating or
limiting the personal liability of directors after our stockholders approve the
certificate of incorporation, then the liability of our directors shall be
eliminated or limited to the fullest extent permitted by the amended Delaware
General Corporation Law. The foregoing provisions of our certificate of
incorporation are not intended to limit the liability of directors or officers
for any violation of applicable federal securities laws. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, our
certificate of incorporation provides that:

- we are required to indemnify our directors and officers to the fullest
extent permitted by the Delaware General Corporation Law;
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<PAGE> 62

- we are required to advance all expenses incurred by our directors and
officers in connection with legal proceedings relating to their service
as an officer or director to the fullest extent permitted by the Delaware
General Corporation Law, subject to limited exceptions;

- the rights conferred in the certificate of incorporation are not
exclusive; and

- we may not retroactively amend the provisions in our certificate of
incorporation relating to indemnity in a way that would adversely affect
the rights of our directors or officers.

EXECUTIVE COMPENSATION

The following table sets forth information with respect to compensation for
the year ended December 31, 1999 earned by our Chairman and Chief Executive
Officer and our four other most highly compensated executive officers at the end
of fiscal 1999, collectively referred to in this prospectus as the "named
executive officers."

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS--
ANNUAL COMPENSATION NUMBER OF
---------------------- SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS UNDERLYING OPTIONS COMPENSATION(5)
<S> <C> <C> <C> <C>
Carl McCutcheon(1).................. $130,769 $120,000 918,208 $3,923
Chairman, President and Chief
Executive Officer
Lawrance McAfee(2).................. 53,846 60,000 175,789 576
Executive Vice President, Chief
Financial Officer and Director
Fred Cook........................... 80,231 45,000 70,018 2,407
Senior Vice President and General
Manager-North America
John Bohn(3)........................ 114,423 58,500 385,716 1,010
Former Chairman
Karen Morgan(4)..................... 114,423 58,500 299,316 3,000
Former Executive Officer
</TABLE>

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

(1) Mr. McCutcheon joined CheMatch as President and Chief Executive Officer in
June 1999 and was appointed Chairman in January 2000.

(2) Mr. McAfee joined CheMatch as Senior Vice President and Chief Financial
Officer in September 1999 and was appointed Executive Vice President and
elected to our board of directors in February 2000.

(3) Mr. Bohn resigned his position as Chairman effective January 26, 2000. For a
discussion of Mr. Bohn's severance, please read "Severance Agreements"
below.

(4) Ms. Morgan resigned her position as an executive officer effective January
26, 2000. For a discussion of Ms. Morgan's severance, please read "Severance
Agreements" below.

(5) Represents matching contributions to the CheMatch.com Employee Savings Plan
on behalf of the named executive officers for 1999.

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<PAGE> 63

STOCK OPTION GRANTS

The following table sets forth the stock options we granted during the
fiscal year ended December 31, 1999, to each of the named executive officers,
including the potential realizable value over the ten-year term of the options,
based on assumed rates of stock appreciation of 5% and 10%, compounded annually.
These assumed rates of appreciation comply with the rules of the Securities and
Exchange Commission and do not represent our estimate of future stock price.
Actual gains, if any, on stock option exercises will be dependent on the future
performance of our common stock. In addition, the deemed value for the date of
grant was determined after the date of grant solely for financial accounting
purposes. We have assumed the fair value of shares of common stock issuable upon
exercise of options was $11.00 per share, the assumed initial public offering
price, solely for purposes of this calculation.

<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
-------------------------------------------------------
INDIVIDUAL GRANTS
------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF TOTAL VALUE AT ASSUMED
OPTIONS GRANTED ANNUAL RATES
NUMBER OF TO EMPLOYEES OF STOCK
SECURITIES DURING THE FISCAL PRICE APPRECIATION
UNDERLYING YEAR ENDED EXERCISE FOR OPTION TERM
OPTIONS DECEMBER 31, PRICE EXPIRATION -------------------------
NAME GRANTED 1999 ($/SHARE) DATE 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Carl McCutcheon(1)......... 639,159 19.8% $1.34 6/21/09 $10,595,876 $17,379,479
265,849 8.2 1.47 11/5/09 4,372,642 7,194,184
13,200 0.4 0.83 4/30/09 225,559 365,655
Lawrance McAfee............ 159,789 4.9 1.34 9/20/09 2,648,957 4,344,849
16,000 0.5 1.47 11/5/09 263,165 432,979
Fred Cook.................. 57,018 1.8 1.34 6/21/09 945,235 1,550,386
13,000 0.4 1.47 11/5/09 213,822 351,795
John Bohn.................. 266,316 8.2 1.34 6/21/09 4,414,944 7,241,443
19,800 0.6 1.47 11/5/09 325,667 535,811
86,400 2.7 0.83 3/1/09 1,476,389 2,393,381
13,200 0.4 0.83 4/30/09 225,559 365,655
Karen Morgan............... 266,316 8.2 1.34 6/21/09 4,414,944 7,241,443
6,600 0.2 1.47 11/5/09 108,556 178,604
6,600 0.2 0.83 1/31/09 112,780 182,828
6,600 0.2 0.83 2/28/09 112,780 182,828
6,600 0.2 0.83 3/31/09 112,780 182,828
6,600 0.2 0.83 4/30/09 112,780 182,828
</TABLE>

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

(1) Includes 523,778 stock options held for the benefit of Mr. McCutcheon and
his family in the name of ADCAP Investments, L.P., a family limited
partnership.

AGGREGATED STOCK OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

The following table sets forth for each of the named executive officers
options exercised during the fiscal year ended December 31, 1999, and the number
and value of securities underlying unexercised options that were held by the
named executive officers at December 31, 1999. The numbers in the column
entitled "Value Realized" are equal to the fair market value of the purchased
shares on the option exercise date, less the exercise price paid for those
shares. The numbers in the column entitled "Value of Unexercised In-the-Money
Options at December 31, 1999" are based on the fair market value of our common
stock on the date of this offering, $11.00, less the exercise price payable for
such shares.

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<PAGE> 64

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
NUMBER OF UNEXERCISED OPTIONS OPTIONS AT
SHARES AT DECEMBER 31, 1999 DECEMBER 31, 1999
ACQUIRED ON VALUE --------------------- ----------------------
NAME EXERCISE REALIZED VESTED UNVESTED VESTED UNVESTED
<S> <C> <C> <C> <C> <C> <C>
Carl McCutcheon(1)............ 319,580 $42,824 598,628 -- $5,754,918 $--
Lawrance McAfee............... -- -- 175,789 -- 1,696,042 --
Fred Cook..................... -- -- 70,018 -- 674,684 --
John Bohn(2).................. 133,158 17,843 341,808 -- 3,299,980 --
Karen Morgan(3)............... 133,158 17,843 321,258 -- 3,007,559 --
</TABLE>

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

(1) Mr. McCutcheon exercised 319,580 stock options in September 1999 that are
subject to repurchase rights by the Company. The repurchase rights expire
with respect to 25% of the option shares in equal quarterly installments
during the one year period following the date of grant. With respect to 75%
of the option shares, the repurchase rights expire in equal monthly
installments over the thirty-six month period following the first
anniversary of the date of grant.

(2) Mr. Bohn exercised 133,158 stock options in October 1999 that are subject to
repurchase rights by the Company. The repurchase rights expire with respect
to 25% of the option shares in equal quarterly installments during the one
year period following the date of grant. With respect to 75% of the option
shares, the repurchase rights expire in equal monthly installments over the
thirty-six month period following the first anniversary of the date of
grant. Mr. Bohn resigned his position as Chairman effective January 26,
2000. For a discussion of Mr. Bohn's severance, please read "Severance
Agreements" below.

(3) Ms. Morgan exercised 133,158 stock options in September 1999 that are
subject to repurchase rights by the Company. The repurchase rights expire
with respect to 25% of the option shares in equal quarterly installments
during the one year period following the date of grant. With respect to 75%
of the option shares, the repurchase rights expire in equal monthly
installments over the thirty-six month period following the first
anniversary of the date of grant. Ms. Morgan resigned her position as an
executive officer effective January 26, 2000. For a discussion of Ms.
Morgan's severance, please read "Severance Agreements" below.

EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL ARRANGEMENTS

EMPLOYMENT AGREEMENTS

CheMatch has entered into the following employment agreements with its
named executive officers:

<TABLE>
<CAPTION>
OFFICER TERM BASE SALARY POSITION
<S> <C> <C> <C>
Carl McCutcheon............ May 1999-April 2001 $200,000 Chairman, President and Chief
Executive Officer
Lawrance McAfee............ Not specified 200,000 Executive Vice President, Chief
Financial Officer and Director
Fred Cook.................. June 1999-May 2001 140,000 Senior Vice President and General
Manager -- North America
</TABLE>

The employment agreements for each of these named executive officers
provide for a discretionary, cash bonus to be determined by the compensation
committee of the board of directors. In connection with their execution of these
employment agreements, Mr. McCutcheon was granted 639,159 stock options on June
21, 1999, Mr. McAfee was granted 159,789 stock options on September 20, 1999,
and Mr. Cook was granted 57,018 stock options on June 21, 1999. The option
shares granted to each of the named executive officers have a ten-year term and
are exercisable immediately but are subject to a repurchase right over a four
year period. CheMatch has the right to repurchase the option shares at the
exercise price. This repurchase right expires in installments over the four-year
period as follows:

- with respect to 25% of the option shares, the repurchase right is
released in equal quarterly installments during the one-year period
commencing on the date of grant and expiring on the first anniversary of
the date of grant; and

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<PAGE> 65

- with respect to the remaining 75% of the option shares, the repurchase
right is released in equal monthly installments over the thirty-six month
period commencing on the first anniversary of the date of grant.

The employment agreements for Mr. McCutcheon and Mr. Cook each provide that
CheMatch may terminate their employment relationship for cause. In this event,
CheMatch will be required to pay accrued but unpaid salary and vacation as of
the date of termination. No unvested option shares held by these officers will
become vested and all unexercised vested option shares will terminate 30 days
following the date of termination. If the employment relationship of these
officers is terminated by CheMatch without cause prior to a change of control,
CheMatch will be obligated to, among other things:

- pay to the named executive officer a sum equal to the greater of (i) the
named executive officer's base salary through the end of the officer's
current employment term, or (ii) the annual base salary in effect
immediately prior to termination of the officer's employment;

- pay accrued but unpaid salary, bonus, vacation and other benefits; and

- cause 50% of all unvested option shares held by the officer on the date
of termination to become vested option shares.

If the employment relationship of Mr. McCutcheon or Mr. Cook is terminated
by CheMatch without cause or is constructively terminated by CheMatch without
cause, in either case following a change of control, CheMatch will be obligated
to make the payments described in the first two bullet points above.
Additionally, all of the unvested option shares held by the officer will become
vested option shares.

If the employment relationship Mr. McCutcheon or Mr. Cook is terminated by
reason of the resignation, death or disability of any of these officers, all
accrued but unpaid salary and other benefits owing to the officer as of the date
of the resignation, death or disability will be paid by CheMatch.

The employment agreements for Mr. McCutcheon and Mr. Cook automatically
renew for a term of one year, unless CheMatch or the employee provide written
notice at least 90 days prior to the expiration of the prior term.

Mr. McAfee is an "at will" employee. In the event that CheMatch terminates
Mr. McAfee without cause within the first two years of his employment, Mr.
McAfee will be entitled to a severance payment equal to six months of base
salary.

The named executive officers' employment agreements contain confidentiality
obligations that survive following the termination of their employment
relationship (for two years in the case of Mr. McCutcheon and Mr. Cook) and
non-competition and non-solicitation obligations that survive for one year
following the termination of their employment relationship (or six months in the
case of Mr. McAfee). Additionally, the employment agreements of Mr. McCutcheon
and Mr. Cook obligate CheMatch to indemnify them in specified circumstances.

MANAGEMENT INCENTIVE AGREEMENT

We have executed an amended and restated management incentive agreement
which obligates us to make an incentive payment to current and former members of
CheMatch's management team and current employees in the event of a fundamental
change. For purposes of the letter agreement, a "fundamental change" means:
(i) the sale or transfer in one or more related transactions, of equity
securities representing in excess of 50% of the voting power of CheMatch's
capital stock, or all or substantially all of the assets of the Company, and in
both cases based on a valuation of CheMatch of at least $200 million; or (ii) a
public offering of CheMatch's securities in which the aggregate net proceeds
from such offering to CheMatch are at least $25 million and the price per share
paid by the public is at least $9.87.

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<PAGE> 66

This offering will constitute a fundamental change under the management
incentive agreement, under which we will be obligated to pay current and former
members of our management team and current employees a specified portion of the
proceeds attributable to the fundamental change. The portion of the net proceeds
of this offering payable to these individuals will be two percent of the average
daily closing price of our common stock for the ninety day period immediately
following the consummation of this offering, multiplied by the number of shares
of common stock outstanding on a fully diluted basis on the 90th day immediately
following the consummation of this offering. The maximum amount payable under
the management incentive agreement is $15 million. Sixty percent of the total
amount payable, or a maximum of $9 million, will be paid to current officers and
employees. Carl McCutcheon, our Chairman, President and Chief Executive Officer,
will receive 20% of the total payment up to a maximum of $3 million, Lawrance
McAfee, our Executive Vice President, Chief Financial Officer and Director, will
receive 15% of the total payment up to a maximum of $2.25 million, and the
remaining 25% up to a maximum of $3.75 million will be paid to other current
employees in management's discretion. John Bohn, our former Chairman, and Karen
Morgan, a former executive and the founder of PetroChemNet, will each receive
20% of the total payment up to a maximum of $3 million each. At an average stock
price of $11.00 over the 90 days following the offering and assuming our current
capitalization remains constant through the 90th day, this payment would be $5.4
million. An average stock price of approximately $28.00 per share or higher over
the 90 days following the offering, assuming our current capitalization remains
constant through the 90th day, would result in the maximum payment of $15
million.

Additionally, in connection with the amendment of the management incentive
agreement, options for the purchase of common stock of the Company were granted
on February 8, 2000, as set forth below:

<TABLE>
<CAPTION>
NUMBER OF
NAME OPTIONS EXERCISE PRICE
<S> <C> <C>
Carl McCutcheon............................................. 168,000 $27.28
John Bohn................................................... 168,000 27.28
Karen Morgan................................................ 168,000 27.28
Lawrance McAfee............................................. 126,000 27.28
Other Employees............................................. 96,600 27.28
-------
Total............................................. 726,600
=======
</TABLE>

These options are vested, and will expire on February 8, 2005. One-half of these
options will become exercisable on February 8, 2001, and the remaining options
will become exercisable on February 8, 2002. In all other respects, the options
will be issued under the terms and conditions of the Company's 1999 Stock Plan
with the exception that the options will not terminate if the above person's
employment or other relationship with the Company terminates.

SEVERANCE AGREEMENTS

John Bohn resigned as Chairman of our board of directors effective January
26, 2000. In connection with his resignation, Mr. Bohn and CheMatch entered into
a Consultant and Release Agreement which entitles him to receive a total of
$218,750 in equal installments over a fifteen month period beginning in February
2000 for services to be rendered by him as our consultant. There is no minimum
number of hours of service required of Mr. Bohn under the agreement. Mr. Bohn is
also entitled to a bonus of $87,500 for the fiscal year ending December 31, 2000
and a bonus of $29,167 for the fiscal year ending December 31, 2001. As a result
of the agreement, all of Mr. Bohn's unvested options under our 1997 Stock Plan
became vested and all of Mr. Bohn's options under our 1999 Stock Plan were
released from repurchase rights held by CheMatch. Mr. Bohn was awarded a total
of 188,850 options under our 1997 Stock Plan and 286,116 options under our 1999
Stock Plan. Mr. Bohn has executed a general release in favor of CheMatch.

Prior to April 30, 2001, Mr. Bohn has agreed not to engage in any business,
investment or activity that is contrary to the interests of CheMatch or its
affiliates. Additionally, through April 30, 2002,

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<PAGE> 67

Mr. Bohn is prohibited from competing with CheMatch or soliciting any person
engaged by CheMatch. He is also required to maintain CheMatch's confidential
information until April 30, 2003.

Mr. Bohn had served as our Chairman from July 1997 until his resignation.
Prior to joining CheMatch, Mr. Bohn served as the president of Moody's Investors
Service from 1989 to 1996. Mr. Bohn served a three-year term as president and
chairman of the Export Import Bank of the United States from 1986 to 1989. Prior
to his service with the Export Import Bank, as chairman, he served two years as
vice chairman. Mr. Bohn was special assistant to the Secretary of the Treasury
from 1981 to 1984, and served concurrently as U.S. Ambassador and executive
director at the Asian Development Bank in Manila from Sept. 1981 to 1984. Prior
to joining the government he spent 13 years in international banking in Asia.

Karen Morgan resigned as Executive Vice President effective January 26,
2000. In connection with her resignation, Ms. Morgan and CheMatch entered into a
Consultant and Release Agreement which entitles her to receive a total of
$218,750 in equal installments over a fifteen month period beginning in February
2000 for services to be rendered by her as our consultant. There is no minimum
number of hours of service required of Ms. Morgan under the agreement. Ms.
Morgan is also entitled to a bonus of $87,500 for the fiscal year ending
December 31, 2000 and a bonus of $29,167 for the fiscal year ending December 31,
2001. As a result of the agreement, all of Ms. Morgan's unvested options under
our 1997 Stock Plan became vested and all of Ms. Morgan's options under our 1999
Stock Plan were released from repurchase rights held by CheMatch. Ms. Morgan was
awarded a total of 181,500 options under our 1997 Stock Plan and 272,916 options
under our 1999 Stock Plan. Ms. Morgan has executed a general release in favor of
CheMatch.

Ms. Morgan has agreed not to engage in any business, investment or activity
prior to April 30, 2001 that is contrary to the interests of CheMatch or its
affiliates. Additionally, through April 30, 2002, Ms. Morgan is prohibited from
competing with CheMatch or soliciting any person engaged by CheMatch. She is
also required to maintain CheMatch's confidential information until April 30,
2003.

Ms. Morgan founded T3 Technologies, a web technology company, which later
became PetroChemNet Inc. in 1997. She served as President and Chief Executive
Officer of PetroChemNet until 1998, developing strategic relationships,
technology and infrastructure applications. In 1999, she facilitated the merger
of CheMatch Inc. into CheMatch.

EMPLOYEE STOCK PLANS

1997 STOCK PLAN

Our 1997 Employee, Director and Consultant Stock Option Plan provides for
the granting of stock options to eligible employees, officers, directors,
including non-employee directors, and consultants of CheMatch. Stock options
granted under the 1997 Stock Plan may be either "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or
nonstatutory stock options, which are options not intended to qualify as
incentive stock options. Incentive stock options may be granted only to
employees of CheMatch and nonstatutory stock options may be granted to
employees, officers, directors and consultants.

As of March 31, 2000, 1,086,150 shares of common stock were issuable upon
the exercise of outstanding options granted under the 1997 Stock Plan at a
weighted average exercise price of $1.81, and with remaining terms ranging from
seven to nine years. The 1997 Stock Plan, which was adopted by PetroChemNet,
Inc. and its stockholders in November 1997, was assumed by us and immediately
terminated in connection with our acquisition of PetroChemNet in June 1999 and
no additional options may be issued thereunder. The 1997 Stock Plan is
administered by the Compensation Committee of our board of directors.

In the event of a merger or consolidation of CheMatch with or into another
corporation or upon the sale of all or substantially all of CheMatch's assets,
the successor corporation must make appropriate provision for the outstanding
options by substituting for the shares then subject to the options either
securities of the successor entity or the consideration payable with respect to
the outstanding shares of

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common stock in connection with the acquisition. Upon written notice to the
optionees, the successor may require that optionees exercise their options
within a specified number of days at the end of which, the options shall
terminate. The successor may also elect to terminate the outstanding options in
exchange for a cash payment equal to the excess of the fair market value of the
shares subject to the options over their exercise price. In the event of a
proposed dissolution or liquidation of CheMatch, each outstanding option or
stock purchase right granted under the 1997 Stock Plan will terminate.

1999 STOCK PLAN

Our 1999 Stock Plan provides for the granting of stock options, stock
awards and stock purchase rights to eligible employees, officers, directors,
including non-employee directors, and consultants of CheMatch. Stock options
granted under the 1999 Stock Plan may be either "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or
nonstatutory stock options, which are options not intended to qualify as
incentive stock options. Stock purchase rights granted under the 1999 Stock Plan
allow a recipient to purchase shares of common stock directly from CheMatch.
Incentive stock options may be granted only to employees of CheMatch and
nonstatutory stock options, stock awards and stock purchase rights may be
granted to employees, officers, directors and consultants.

A maximum of 4,500,000 shares are authorized for issuance under the 1999
Stock Plan. As of March 31, 2000, 3,491,511 shares of common stock were issuable
upon the exercise of outstanding options granted under the 1999 Stock Plan at a
weighted average exercise price of $8.29. 612,896 shares of common stock have
been issued under this plan, leaving 395,593 authorized shares not subject to
outstanding options. The 1999 Stock Plan was adopted by our Board of Directors
in June 1999 and was approved by our stockholders in June 1999. Unless
terminated earlier by our Board of Directors, the 1999 Stock Plan will terminate
in June 2009.

The 1999 Stock Plan may be administered by the Board of Directors or a
committee appointed by the Board of Directors to administer the 1999 Stock Plan.
The administrator has the authority to grant options, stock awards and stock
purchase rights and to determine the terms of these awards, provided these
grants are not inconsistent with the terms of the 1999 Stock Plan. In no event,
however, may an individual receive option grants for more than 1,000,000 shares
under the 1999 Stock Plan in any fiscal year.

Stock options granted under the 1999 Stock Plan may not have a term of more
than ten years and generally remain exercisable for a period of three months
following termination of the optionee's employment or consulting relationship
with CheMatch, with longer periods applying in the event this termination occurs
as a result of death or disability. The exercise price of all incentive stock
options must be at least equal to the fair market value of the common stock at
the time of grant, except in the case of incentive stock options granted to
persons owning stock that represents more than 10% of the total combined voting
power of all classes of the outstanding capital stock of CheMatch, in which case
the exercise price must equal at least 110% of the fair market value of the
common stock at the time of grant. The exercise price of nonstatutory stock
options may be less than the fair market value of the common stock at the time
of grant, however, the exercise price must be at least 100% of the fair market
value if the option is intended to qualify as performance-based compensation
under tax rules. Options granted under the 1999 Stock Option Plan are either
fully exercisable on the date of grant or will become exercisable in such
installments as the administrator may specify. Only $100,000 in incentive stock
options (determined at the time the incentive stock options were granted) may
become exercisable by an employee for the first time in any one calendar year.
Incentive stock options granted under the 1999 Stock Plan are generally not
transferable, although the administrator has the discretion to allow
transferability of nonstatutory stock options.

In the event of a merger or consolidation of CheMatch with or into another
corporation where the successor corporation issues its securities to CheMatch
stockholders and holders of our common stock before the event hold, as a group,
less than a majority of the voting securities of the survivor or upon the sale
of all or substantially all of CheMatch's assets, each outstanding option or
stock purchase right must

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be assumed or an equivalent option or stock purchase right shall be substituted
by the successor corporation. Upon written notice to the optionees, the
successor may require that optionees exercise their options within a specified
number of days at the end of which, the options shall terminate. The successor
may also elect to terminate the outstanding options in exchange for a cash
payment equal to the excess of the fair market value of the shares subject to
the options over their exercise price. In the event of a proposed dissolution or
liquidation of CheMatch, each outstanding option or stock purchase right granted
under the 1999 Stock Plan shall terminate. The administrator has the authority
to amend or terminate the 1999 Stock Plan provided that no action that impairs
the rights of any holder of an outstanding option may be taken without the
holders' consent. In addition, stockholder approval will be obtained for any
amendment to the extent required by applicable law.

In addition to stock options, the administrator may issue stock awards and
stock purchase rights under the 1999 Stock Plan to employees, directors and
consultants. The administrator determines the number of shares, price, term and
condition and restrictions related to a grant of stock awards and stock purchase
rights.

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RELATED PARTY TRANSACTIONS

The following is a discussion of transactions between us and our executive
officers, directors and stockholders owning more than five percent of any class
of our voting securities.

INVESTMENTS IN CHEMATCH

Since our inception, our executive officers, directors and 5% stockholders
have invested cash and other property in CheMatch in exchange for shares of our
convertible preferred stock and our common stock. The following table summarizes
the shares of our convertible preferred stock and our common stock acquired from
us by our executive officers, directors and 5% stockholders since our inception.
See "Principal Stockholders" for a summary of the affiliations of each of the
persons and entities described below.

<TABLE>
<CAPTION>
CONVERTIBLE
COMMON CONVERTIBLE PREFERRED
COMMON STOCK PREFERRED STOCK
STOCK WARRANTS STOCK WARRANTS
<S> <C> <C> <C> <C>
5% STOCKHOLDERS:
Entities Affiliated with Donaldson, Lufkin & Jenrette,
Inc.(1).............................................. -- -- 1,518,463 1,146,490
Battery Ventures Entities(2)............................ -- -- 4,807,540 3,605,655
E.I. duPont de Nemours and Company(3)................... 636,943 -- 891,716 668,787
DIRECTORS AND EXECUTIVE OFFICERS:
Earl Armstrong(4)....................................... 154,440 115,830 -- --
Fred Cook(5)............................................ 115,830 86,873 -- --
Lawrance McAfee(6)...................................... -- -- 8,785 6,589
Carl McCutcheon(7)...................................... 107,100 -- 8,785 6,589
John Sharum(6).......................................... -- -- 8,785 6,589
FORMER DIRECTORS AND EXECUTIVE OFFICERS:
John Bohn(8)............................................ 272,400 4,500 -- --
Karen Morgan(9)......................................... 196,200 3,000 -- --
</TABLE>

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

(1) Represents shares of Series C convertible preferred stock and warrants to
purchase additional shares of Series C convertible preferred stock at an
exercise price of $7.85 per share purchased by the Entities Affiliated with
Donaldson, Lufkin & Jenrette, Inc. on November 24, 1999. One of our
directors, Janet Hickey, is affiliated with Donaldson, Lufkin & Jenrette,
Inc. Please see "Principal Stockholders" for a description of Ms. Hickey's
affiliation with Donaldson, Lufkin & Jenrette, Inc.

(2) Represents 2,138,400 shares of Series A convertible preferred stock and
warrants to purchase 1,603,800 additional shares of Series A convertible
preferred stock at an exercise price of $2.3484 per share purchased by the
Battery Ventures Entities on June 21, 1999 for approximately $5 million;
2,032,200 shares of Series B convertible preferred stock and warrants to
purchase 1,524,150 additional shares of Series B convertible preferred stock
at an exercise price of $2.4673 per share purchased by the Battery Ventures
Entities on September 27, 1999 for approximately $5 million; and 636,940
shares of Series C convertible preferred stock and warrants to purchase
477,705 additional shares of Series C convertible preferred stock at an
exercise price of $7.85 per share purchased by the Battery Ventures Entities
on November 24, 1999 for a total consideration of approximately $5 million.
One of our directors, R. David Tabors, is affiliated with the Battery
Ventures Entities. Please see "Principal Stockholders" for a description of
Mr. Tabor's affiliation with the Battery Ventures Entities.

(3) Represents shares of common stock purchased by duPont on November 24, 1999
for $6,369 and shares of Series C convertible preferred stock and warrants
to purchase additional shares of Series C convertible preferred stock at an
exercise price of $7.85 per share purchased on the same date for
approximately $7 million.

(4) Represents shares of common stock and warrants to purchase shares of common
stock at an exercise price of $1.336 per share, in each case received by Mr.
Armstrong, together with $237,800 in return for his interests in CheMatch,
Inc. in connection with our acquisition of CheMatch, Inc. shortly after our
incorporation.

(5) Represents shares of common stock and warrants to purchase shares of common
stock at an exercise price of $1.336 per share, in each case received by Mr.
Cook, together with $202,000, in return for his interests in CheMatch, Inc.
in connection with our acquisition of CheMatch, Inc. shortly after our
incorporation.

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(6) Represents shares of Series C convertible preferred stock and warrants to
purchase additional shares of Series C convertible preferred stock at an
exercise price of $7.85 per share purchased on November 24, 1999.

(7) Represents shares of common stock received by Mr. McCutcheon in return for
his interest in PetroChemNet, Inc. in connection with our acquisition of
PetroChemNet, Inc. shortly after our incorporation; shares of Series C
convertible preferred stock and warrants to purchase additional shares of
Series C convertible preferred stock at an exercise price of $7.85 per share
purchased on November 24, 1999; and does not include shares obtained upon
the exercise of options granted to Mr. McCutcheon pursuant to the 1999 Stock
Option Plan. 53,700 shares of the common stock and all of the shares of
Series C convertible preferred stock are held in the name of ADCAP
Investments, L.P., a family limited partnership for the benefit of Mr.
McCutcheon and his family. Additionally, 12,740 shares of the common stock
are held in trusts in the name of Mr. McCutcheon's minor children.

(8) Represents shares of common stock and warrants to purchase shares of common
stock at an exercise price of $3.33 per share, in each case received by Mr.
Bohn in return for his interest in PetroChemNet, Inc. in connection with our
acquisition of PetroChemNet, Inc. shortly after our incorporation.

(9) Represents shares of common stock and warrants to purchase shares of common
stock at an exercise price of $3.33 per share, in each case received by Ms.
Morgan in return for her interest in PetroChemNet, Inc. in connection with
our acquisition of PetroChemNet, Inc. shortly after our incorporation.

Each share of our convertible preferred stock is convertible into one share
of common stock. Each of the persons named in the table above will convert all
of their warrants to purchase additional shares of convertible preferred stock
into shares of convertible preferred stock and convert all of their shares of
convertible preferred stock into shares of common stock prior to the
consummation of this offering.

DIRECTOR AND OFFICER LOANS

The following table illustrates the amount of debt of our current and
former executive officers and directors owed to us and outstanding and the rate
of interest charged on the debt owed.

<TABLE>
<CAPTION>
DEBT OUTSTANDING RATE OF INTEREST
<S> <C> <C>
Carl McCutcheon............................................. $426,959 5.42%
Chairman, President and Chief Executive Officer
John Bohn................................................... 177,899 5.54
Former Chairman
Karen Morgan................................................ 177,899 5.42
Former Executive Officer
</TABLE>

In each case, the debt of these individuals was incurred in connection with
their exercise of stock options. Each of these individuals has executed one or
more promissory notes in September or October 1999 in respect of their
indebtedness secured by the common stock underlying the exercised stock options.
The interest rate on the promissory notes represents the lowest applicable
Federal rate, as defined in Section 1274(d) of the Internal Revenue Code of
1986, as amended. The amount of debt outstanding for each of them represents the
entire principal amount of these secured promissory notes and the largest
aggregate amount of debt outstanding for each of these individuals since our
inception. The principal of Mr. McCutcheon's note is payable upon the earlier of
three years from the issuance date, the date Mr. McCutcheon ceases employment
with CheMatch, or upon the sale or transfer of the shares of common stock
securing the note, with interest payable on June 30 of each year and at
maturity. The principal of the notes of Mr. Bohn and Ms. Morgan is payable upon
the earlier of January 26, 2001 or the sale or transfer of the shares securing
the notes, with interest payable on June 30 of each year and at maturity.

ALLIANCE WITH DEWITT & COMPANY, INCORPORATED

We executed an Alliance Agreement on June 21, 1999 with DeWitt & Company,
Incorporated ("DeWitt"), which is 50% owned by Earl H. Armstrong and of which he
is the Managing Director. Under the Alliance Agreement, we have agreed that
DeWitt will provide chemical industry trading analytics for our trading exchange
for which we pay $6,250 per month, and we have granted to DeWitt a right to a
preferred display on our trading screen for products and services offered by
DeWitt. We have also agreed

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<PAGE> 72

to share promotional costs from time to time. We have the right to terminate the
Alliance Agreement at any time upon the payment to DeWitt of $500,000. DeWitt
may terminate the Agreement upon one year's prior notice and the payment of
$60,000. During the year ended December 31, 1999, we paid DeWitt approximately
$70,836 for services rendered and for reimbursement of various expenses. In
addition, we reimbursed $146,400 to DeWitt for legal fees and expenses incurred
in June 1999 in connection with DeWitt's sale of CheMatch, Inc. to us.

REGISTRATION RIGHTS AGREEMENT

We have entered into a registration rights agreement with the Entities
Affiliated with Donaldson, Lufkin & Jenrette, Inc., the Battery Ventures
Entities, E.I. duPont de Nemours and Company, Earl Armstrong, Fred Cook,
Lawrance McAfee, Carl McCutcheon, John Sharum and other holders of our common
and convertible preferred stock. This registration rights agreement is described
under "Description of Capital Stock -- Registration Rights Agreement."

INDEMNIFICATION AGREEMENTS

We expect to enter into indemnification agreements with our directors and
executive officers containing provisions requiring us to, among other things,
indemnify them against liabilities that may arise by reason of their status or
service, other than liabilities arising from willful misconduct of a culpable
nature, and to advance expenses they incur as a result of any proceeding against
them as to which they could be indemnified.

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<PAGE> 73

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of March 31, 2000, information with
respect to shares beneficially owned by:

- each person who we know to be the beneficial owner of more than five
percent of our outstanding shares of common stock;

- each of the named executive officers;

- each of our directors; and

- all current directors and executive officers as a group.

We have determined beneficial ownership in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934. Applicable percentage ownership in the
following table is based on 19,146,150 shares of common stock outstanding as of
March 31, 2000, as adjusted to reflect the conversion of all outstanding shares
of convertible preferred stock and all warrants to purchase shares of common
stock and convertible preferred stock that would otherwise expire upon
consummation of this offering.

Unless otherwise indicated, the address for each listed stockholder is: c/o
CheMatch.com, Inc., 2900 North Loop West, Suite 1120, Houston, Texas 77092. To
our knowledge, except as indicated in the footnotes to this table or pursuant to
applicable community property laws, the persons named in the table have sole
voting and investment power with respect to the shares of common stock
indicated.

<TABLE>
<CAPTION>
PERCENT BENEFICIALLY OWNED
SHARES --------------------------
5% STOCKHOLDERS, NAMED OFFICERS, DIRECTORS, BENEFICIALLY BEFORE AFTER
AND DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP OWNED OFFERING OFFERING
<S> <C> <C> <C>
Battery Ventures Entities(1).............................. 8,413,195 43.9% 34.8%
20 Williams Street
Wellesley, MA 02481
Entities Affiliated with Donaldson, Lufkin & Jenrette,
Inc.(2)................................................. 2,664,953 13.9% 11.0%
c/o The Sprout Group
277 Park Avenue
New York, NY 10172
E.I. duPont de Nemours and Company(3)..................... 2,197,446 11.5% 9.1%
1007 Market Street, D-9000
Wilmington, DE 19898
Earl Armstrong(4)......................................... 270,270 1.4% 1.1%
John Bohn(5).............................................. 751,866 3.9% 3.1%
Fred Cook(6).............................................. 292,703 1.5% 1.2%
Bob Gower(7).............................................. 13,040 * *
Janet Hickey(8)........................................... 2,664,953 13.9% 11.0%
Lawrance McAfee........................................... 191,163 * *
Carl McCutcheon(9)........................................ 1,031,002 5.2% 4.2%
Karen Morgan(10).......................................... 689,029 3.5% 2.8%
James Saviano(7).......................................... 13,040 * *
David Tabors(11).......................................... 8,413,195 43.9% 34.8%
Directors and Executive Officers as a group a total of
12(12).................................................. 13,161,950 64.9% 52.0%
</TABLE>

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

* Less than one percent

(1) The entities listed above as Battery Ventures Entities include Battery
Ventures V, L.P., Battery Investment Partners V L.L.C. and Battery Ventures
Convergence Fund, L.P.

(2) The entities listed above as Entities Affiliated with Donaldson, Lufkin &
Jenrette, Inc., a subsidiary of The Equitable Life Assurance Society of the
United States (the "DLJ Entities"), include Sprout Capital VIII, L.P.,
Sprout Venture Capital, L.P., DLJ ESC II, L.P. and DLJ Capital Corporation.
DLJ ESC II, L.P. is an Employees' Securities Corporation as defined in the
Investment Company Act of 1940. The general partner of DLJ ESC II, L.P. is
DLJ LBO Plans Management Corporation and the limited partners of DLJ ESC
II, L.P.
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<PAGE> 74

are current or former employees of Donaldson, Lufkin & Jenrette, Inc. and
its affiliates. DLJ Capital Corporation is a wholly-owned subsidiary of
Donaldson, Lufkin & Jenrette, Inc. Sprout Capital VIII, L.P. is a Delaware
limited partnership of which DLJ Capital Corporation is the managing
general partner. Sprout Venture Capital, L.P. is a Delaware limited
partnership of which DLJ Capital Corporation is the managing general
partner. The DLJ Entities will place a sufficient number of their shares in
a voting trust so that upon the consummation of this offering, the DLJ
Entities will exercise voting control over less than five percent of the
outstanding shares of common stock. The shares subject to the voting trust
are held and voted by an independent third party, Norwest Bank Indiana,
N.A., as voting trustee. DLJ Capital Corporation has the power to dispose
of the shares subject to the voting trust that were formerly held by DLJ
Capital Corporation, Sprout Capital VIII, L.P. and Sprout Venture Capital,
L.P. DLJ LBO Plans Management Corporation has the power to dispose of the
shares subject to the voting trust that were formerly held by DLJ ESC II,
L.P. DLJ Capital Corporation has the power to vote and dispose of the
shares held by Sprout Capital VIII, L.P. that are not subject to the voting
trust.

(3) Pursuant to its strategic alliance with CheMatch, duPont can earn up to
$2.0 million in commissions through December 31, 2000 from trades by
customers it brings to our exchange and who meet specified trading
thresholds. These commissions are payable in shares of common stock valued
at their market price at the time of issuance.

(4) Includes 115,830 shares of common stock issuable upon the exercise of
warrants exercisable within 60 days.

(5) Includes 346,308 shares of common stock issuable upon the exercise of
warrants and options exercisable within 60 days.

(6) Includes 176,873 shares of common stock issuable upon the exercise of
warrants and options exercisable within 60 days.

(7) Represents shares issuable upon the exercise of director stock options. In
each case, 520 of such shares are exercisable within 60 days.

(8) Ms. Hickey, a director of CheMatch, is a general partner of the Sprout
Group, a division of DLJ Capital Corporation, and a divisional senior vice
president of DLJ Capital Corporation. She may be deemed to be a beneficial
owner of these shares, but she disclaims beneficial ownership of these
shares.

(9) Includes 8,785 shares of Series C convertible preferred stock, 6,589
warrants to purchase shares of Series C convertible preferred stock,
360,540 shares of common stock and 523,778 options to purchase shares of
common stock held in the name of ADCAP Investments, L.P., a family limited
partnership for the benefit of Mr. McCutcheon and his family. This total
does not include 12,740 shares of common stock held in trusts for the
benefit of Mr. McCutcheon's minor children, the trustee of which is Mr.
McCutcheon's brother, Richard McCutcheon. Mr. McCutcheon disclaims
beneficial ownership of the shares held in these trusts.

(10) Includes 324,258 shares of common stock issuable upon the exercise of
warrants and options exercisable within 60 days.

(11) Mr. Tabors, a director of CheMatch, is an employee of Battery Ventures V,
L.P. and Battery Ventures and a limited member of Battery Investment
Partners V, LLC. He may be deemed to be a beneficial owner of these shares,
but he disclaims beneficial ownership of these shares.

(12) This group consists of 12 persons. Includes 8,413,195 shares of common
stock beneficially owned by Battery Ventures Entities, see Note (2) above,
and 2,664,953 shares of common stock beneficially owned by the DLJ
Entities, see Note (4) above. Mr. Tabors and Ms. Hickey disclaim beneficial
ownership of the shares held by Battery Ventures Entities and the DLJ
Entities, respectively.

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DESCRIPTION OF CAPITAL STOCK

Immediately following the consummation of this offering, the authorized
capital stock of CheMatch will consist of 50,000,000 shares of common stock, par
value $.01 per share, and 5,000,000 shares of preferred stock, par value $.01
per share, the rights and preferences of which may be established from time to
time by our board of directors. Upon completion of this offering, there will be
21,528,282 outstanding shares of common stock, no outstanding shares of
preferred stock, options to purchase 4,577,661 shares of common stock and
outstanding warrants to purchase 397,440 shares of common stock.

The following discussion summarizes the material provisions of our capital
stock and the anti-takeover provisions that will be contained in our certificate
of incorporation and bylaws upon consummation of this offering. This summary is
qualified by our certificate of incorporation and bylaws, copies of which have
been filed as exhibits to the registration statement of which this prospectus is
a part and by Delaware law.

COMMON STOCK

As of March 31, 2000, there were 5,234,482 shares of common stock
outstanding that were held of record by more than 50 stockholders. Assuming no
exercise of the underwriters' over-allotment option and assuming no exercise of
outstanding options after March 31, 2000, there will be 21,528,282 shares of
common stock outstanding following the sale of shares of common stock to the
public contemplated by this offering and the conversion of our outstanding
preferred stock into common stock at a one-to-one ratio. Holders of common stock
are entitled to one vote per share on all matters to be voted upon by the
stockholders. Because holders of common stock do not have cumulative voting
rights, the holders of a majority of the shares of common stock can elect all of
the members of the board of directors standing for election. Subject to
preferences of any preferred stock that may be issued in the future, the holders
of common stock are entitled to receive such dividends as may be declared by the
board of directors. The common stock is entitled to receive pro rata all of the
assets of CheMatch available for distribution to its stockholders. There are no
redemption or sinking fund provisions applicable to the common stock.

PREFERRED STOCK

The board of directors has the authority to issue up to 5,000,000 shares of
preferred stock in one or more series and to fix the rights, preferences,
privileges and restrictions thereof, including dividend rights, dividend rates,
conversion rates, voting rights, terms of redemption, redemption prices,
liquidation preferences and the number of shares constituting any series or the
designation of that series, which may be superior to those of the common stock,
without further vote or action by the stockholders. There will be no shares of
preferred stock outstanding upon the closing of the offering and we have no
present plans to issue any preferred stock.

One of the effects of undesignated preferred stock may be to enable the
board of directors to render more difficult or to discourage an attempt to
obtain control of us by means of a tender offer, proxy contest, merger or
otherwise, and as a result to protect the continuity of our management. The
issuance of shares of the preferred stock by the board of directors as described
above may adversely affect the rights of the holders of common stock. For
example, preferred stock issued by us may rank prior to the common stock as to
dividend rights, liquidation preference or both, may have full or limited voting
rights and may be convertible into shares of common stock. Accordingly, the
issuance of shares of preferred stock may discourage bids for the common stock
or may otherwise adversely affect the market price of the common stock.

OPTIONS

As of March 31, 2000, options to purchase a total of 4,577,661 shares of
common stock were outstanding, and up to 395,593 shares of common stock may be
subject to options granted in the future under our existing stock option plans.

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WARRANTS

As of March 31, 2000, there were 397,440 warrants outstanding and
exercisable to purchase shares of our common stock at an exercise price of $3.33
per share, assuming the expiration or earlier exercise of all outstanding
warrants to purchase common or preferred stock that expire upon consummation of
this Offering. These warrants expire at various dates between 2002 and 2004.

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

WRITTEN CONSENT OF STOCKHOLDERS

Our certificate of incorporation provides that any action by our
stockholders must be taken at an annual or special meeting of stockholders.
Special meetings of the stockholders may be called only by the board of
directors. This provision, which requires a vote of at least 50% of the voting
power of the outstanding shares of common stock to be amended, could have the
effect of deterring hostile takeovers or delaying changes in control.

ADVANCE NOTICE PROCEDURE FOR STOCKHOLDER PROPOSALS

Our bylaws establish an advance notice procedure for the nomination of
candidates for election as directors as well as for stockholder proposals to be
considered at annual meetings of stockholders. In general, notice of intent to
nominate a director must be delivered to or mailed and received at our principal
executive offices as follows:

- With respect to an election to be held at the annual meeting of
stockholders, not later than 90 days nor earlier than 120 days prior to
the anniversary date of the immediately preceding annual meeting of
stockholders.

- With respect to an election to be held at a special meeting of
stockholders for the election of directors, not earlier than 120 days
prior to the special meeting nor later than 90 days prior to the special
meeting or 10 days after the first public announcement of the special
meeting.

Notice of stockholders' intent to raise business at an annual meeting
generally must be delivered to or mailed and received at our principal executive
offices not later than 90 days nor earlier than 120 days prior to the
anniversary date of the preceding annual meeting of stockholders. These
procedures may operate to limit the ability of stockholders to bring business
before a stockholders meeting, including with respect to the nomination of
directors of considering any transaction that could result in a change in
control.

LIMITATION OF LIABILITY OF OFFICERS AND DIRECTORS

Our certificate of incorporation provides that no director shall be
personally liable to CheMatch or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability as follows:

- for any breach of the director's duty of loyalty to CheMatch or its
stockholders

- for acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of laws

- for unlawful payment of a dividend or unlawful stock purchase or stock
redemption

- for any transaction from which the director derived an improper personal
benefit

The effect of these provisions is to eliminate the rights of CheMatch and its
stockholders, through stockholders' derivative suits on behalf of CheMatch, to
recover monetary damages against a director for breach of fiduciary duty as a
director, including breaches resulting from grossly negligent behavior, except
in the situations described above.

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DELAWARE TAKEOVER STATUTE

We are subject to Section 203 of the Delaware General Corporation law which
regulates corporate acquisitions. This law provides that specified persons who,
together with affiliates and associates, own, or within three years did own, 15%
or more of the outstanding voting stock of a corporation may not engage in
certain business combinations with the corporation for a period of three years
after the date on which the person became an interested stockholder. The law
does not include interested stockholders prior to the time our common stock is
authorized for quotation on the Nasdaq National Market. The law defines the term
"business combination" to encompass a wide variety of transactions with or
caused by an interested stockholder, including mergers, asset sales and other
transactions in which the interested stockholder receives or could receive a
benefit on other than a pro rata basis with other stockholders. This provision
has an anti-takeover effect with respect to transactions not approved in advance
by our Board of Directors, including discouraging takeover attempts that might
result in a premium over the market price for the shares of our common stock.
With approval of our stockholders, we could amend our certificate of
incorporation in the future to avoid the restrictions imposed by this
anti-takeover law.

REGISTRATION RIGHTS

The holders of 12,988,418 shares of our common stock that will be
outstanding after this offering are entitled to require us to register the sales
of their shares under the Securities Act, under the terms of an Amended and
Restated Registration Rights Agreement between us and the holders of these
securities. Subject to limitations specified in this agreement, these
registration rights include the following:

- two demand registration rights that holders of the requisite number of
shares may exercise no sooner than 180 days after our initial public
offering, which require us to register sales of a holder's shares,
subject to the discretion of the managing underwriter of the offering to
decrease the amount that holders may register;

- an unlimited number of piggyback registration rights that require us to
register sales of a holder's shares when we undertake a public offering,
subject to the discretion of the managing underwriter of the offering to
decrease the amount that holders may register; and

- an unlimited number of rights to require us to register sales of shares
on Form S-3, a short form of registration statement permitted to be used
by some companies, which holders may exercise if they request
registration of the sale of more than $1 million of common stock
following the time we first qualify for the use of this form of
registration with the Securities and Exchange Commission.

We will bear all registration expenses if these registration rights are
exercised, other than underwriting discounts and selling commissions. These
registration rights terminate four years after the completion of our initial
public offering.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the common stock is American Stock
Transfer & Trust Company, and its telephone number is (800) 937-5449.

72
<PAGE> 78

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common stock.
Future sales of substantial amounts of our common stock in the public market
could adversely affect prevailing market prices. Sales of substantial amounts of
our common stock in the public market after any restrictions on sale lapse could
adversely affect the prevailing market price of the common stock and impair our
ability to raise equity capital in the future.

Upon completion of the offering, we will have 21,528,282 outstanding shares
of common stock, outstanding options to purchase 4,577,661 shares of common
stock and outstanding warrants to purchase 397,440 shares of common stock,
assuming no exercise of the underwriters' over-allotment option and no
additional option or warrant grants or exercises after March 31, 2000. Of the
5,000,000 shares sold in the offering, 175,000 shares will be subject to the
lock-up agreements described below assuming that we sell all shares reserved
under our directed share program to the entities or persons for whom these
shares have been reserved. We expect that the remaining 4,825,000 shares, plus
any shares issued upon exercise of the underwriters' over-allotment option, will
be freely tradable without restriction under the Securities Act, unless
purchased by our "affiliates" as that term is defined in Rule 144 under the
Securities Act.

The remaining 16,284,382 shares outstanding and 4,824,006 shares subject to
outstanding options and warrants are "restricted securities" within the meaning
of Rule 144. Restricted securities may be sold in the public market only if the
sale is registered or if it qualifies for an exemption from registration, such
as under Rule 144, 144(k) or 701 promulgated under the Securities Act, which are
summarized below. Sales of restricted securities in the public market, or the
availability of such shares for sale, could adversely affect the market price of
the common stock.

LOCK-UP AGREEMENTS

Our directors, officers, employees and various other stockholders, who
together hold substantially all of our securities, have entered into lock-up
agreements in connection with this offering. These lock-up agreements generally
provide that these holders will not offer, pledge, sell, contract to sell or
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend or otherwise transfer
or dispose of, directly or indirectly, any shares of our common stock owned by
them for a period of 180 days after the date of this prospectus without the
prior written consent of the representatives of the underwriters of this
offering. The lock-up agreements executed by our employees and directors also
cover any shares they may acquire through our directed share program. However,
25% of the shares of common stock subject to the restrictions described above
(other than shares owned by directors or officers) will be released from these
restrictions if the reported last sale price of the common stock on the Nasdaq
National Market is at least twice the initial public offering price for 20 of
the 30 consecutive trading days ending on the last trading day of the 90 day
period after the date of this prospectus. These shares will be released on the
later to occur of the 90 day period after the date of this prospectus and the
second trading day after the first public release of our quarterly results. An
additional 25% of the shares subject to the restrictions described above will be
released from these restrictions if the reported last sale price of the common
stock on the Nasdaq National Market is at least twice the initial public
offering price for 20 of the 30 consecutive trading days ending on the last
trading day of the 135 day period after the date of this prospectus.

Notwithstanding possible earlier eligibility for sale under the provisions
of Rules 144, 144(k) and 701, shares subject to lock-up agreements may not be
sold until these agreements expire or are waived by the representatives of the
underwriters of this offering. Assuming that the early release provisions
described in the previous paragraph are not applicable and that the
representatives of the underwriters of this offering do not release any security
holders from the lock-up agreements, the following shares will be eligible for
sale in the public market at the following times:

- Beginning on the effective date of the registration statement of which
this prospectus forms a part, 75,000 of the 5,000,000 shares sold in this
offering, and 213,689 additional shares not subject to

73
<PAGE> 79

lock-up agreements and eligible for sale under Rule 144(k), will be
immediately available for sale in the public market.

- Beginning 90 days after the effective date, an additional 181,306 shares
not subject to lock-up agreements will be eligible for sale pursuant to
Rule 144 and Rule 701.

- Beginning 180 days after the effective date, an additional 12,963,719
shares will be eligible for sale pursuant to Rule 144, Rule 144(k) and
Rule 701.

RULE 144

In general, under Rule 144 as currently in effect, after the expiration of
the lock-up agreements, a person who has beneficially owned restricted
securities for at least one year would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of:

- one percent of the number of shares of common stock then outstanding; and

- the average weekly trading volume of our common stock during the four
calendar weeks preceding the sale.

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

RULE 144(k)

Under Rule 144(k), a person who is not deemed to have been our affiliate at
any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, may sell these
shares without complying with the manner of sale, public information, volume
limitation or notice requirements of Rule 144.

RULE 701

Rule 701, as currently in effect, permits our employees, officers,
directors or consultants who purchased shares pursuant to a written compensatory
plan or contract to resell such shares in reliance upon Rule 144, but without
compliance with certain restrictions. Rule 701 provides that affiliates may sell
their Rule 701 shares under Rule 144 ninety days after effectiveness without
complying with the holding period requirement and that non-affiliates may sell
such shares in reliance on Rule 144 ninety days after effectiveness without
complying with the holding period, public information, volume limitation or
notice requirements of Rule 144.

We intend to file one or more registration statements on Form S-8 under the
Securities Act to register all shares of common stock subject to outstanding
stock options and common stock issued or issuable under our stock plans. We
expect to file the registration statement covering shares offered pursuant to
the 1997 Stock Plan and 1999 Stock Plan within 180 days after the date of this
prospectus, thus permitting the resale of such shares by nonaffiliates in the
public market without restriction under the Securities Act.

In addition, after this offering, the holders of approximately 6,567,861
shares of common stock will be entitled to rights with respect to registration
of such shares under the Securities Act. Registration of such shares under the
Securities Act would result in such shares, except for shares purchased by
affiliates of CheMatch, becoming freely tradable without restriction under the
Securities Act immediately on the effectiveness of such registration.

74
<PAGE> 80

UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting
agreement dated , 2000, the underwriters named below, who are
represented by Donaldson, Lufkin & Jenrette Securities Corporation, Deutsche
Bank Securities Inc., Salomon Smith Barney Inc., PaineWebber Incorporated and
DLJdirect Inc., have severally agreed to purchase from us the number of shares
of common stock set forth opposite their names below:

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.........
Deutsche Bank Securities Inc................................
Salomon Smith Barney Inc....................................
PaineWebber Incorporated....................................
DLJdirect Inc. .............................................
---------
Total............................................. 5,000,000
=========
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase and accept delivery of the shares of common stock in
this offering are subject to approval of certain legal matters and certain other
conditions. The underwriters are obligated to purchase and accept delivery of
all the shares of common stock in this offering, other than those shares covered
by the over-allotment option described below, if any are purchased.

The underwriters initially propose to offer some of 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 some of the shares to dealers at the
initial public offering price less a concession not in excess of $ per
share. The underwriters may allow, and those dealers may re-allow, a concession
not in excess of $ per share on sales to other dealers. After the initial
offering of the shares of common stock to the public, the representatives may
change the public offering price and concessions at any time without notice. The
underwriters do not intend to confirm sales to any accounts over which they
exercise discretionary authority.

The following table shows the underwriting fees to be paid to the
underwriters by us in connection with this offering. This information is
presented assuming both no exercise and full exercise of the underwriters'
option to purchase additional shares of our common stock.

<TABLE>
<CAPTION>
NO EXERCISE FULL EXERCISE
<S> <C> <C>
Per share................................................... $ $
Total.......................................................
</TABLE>

We will pay the offering expenses, estimated to be approximately $
million. An underwriter has agreed to reimburse us for certain offering
expenses. We will pay to the underwriters underwriting discounts and commissions
in an amount equal to the initial public offering price per share of common
stock less the amount the underwriters pay to us for each share of common stock
sold by us.

DLJdirect Inc., an affiliate of Donaldson, Lufkin & Jenrette Securities
Corporation, is facilitating the distribution of the shares sold in this
offering over the Internet. An electronic prospectus will be available on the
web sites maintained by DLJdirect.

We have granted to the underwriters an option, exercisable for 30 days
after the date of this prospectus, to purchase up to an aggregate of 750,000
additional shares of common stock at the initial public offering price less the
underwriting discounts and commissions. The underwriters may exercise this
option solely to cover over-allotments, if any, made in connection with this
offering. To the extent the underwriters exercise this option, each underwriter
will be obligated, upon satisfaction of certain conditions, to purchase a number
of additional shares approximately proportionate to that underwriter's initial
purchase commitments.

75
<PAGE> 81

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments
that the underwriters may be required to make for these liabilities. We and our
executive officers, directors, employees and various other stockholders, who
together hold substantially all of our securities have agreed for a 180 day
lock-up period not to, without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation:

- offer, pledge, sell, contract to sell or sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of,
directly or indirectly, any shares of our common stock or any securities
convertible into or exercisable or exchangeable for our common stock; or

- enter into any swap or other arrangement that transfers all or a portion
of the economic consequences associated with the ownership of any common
stock, whether any such transaction described above is to be settled by
delivery of common stock or other securities, in cash, or otherwise.

However, we may:

- grant stock options pursuant to our 1999 Stock Plan; and

- issue shares of our common stock upon the exercise of our options,
warrants or rights or the conversion of currently outstanding securities
on the date of the underwriting agreement.

In addition, during the lock-up period, we have agreed not to file any
registration statement relating to, and each of our executive officers,
directors, employees and various other stockholders, who together hold
substantially all of our securities have agreed not to make any demand for, or
exercise any right relating to, the registration of any shares of common stock
or any securities convertible into or exercisable or exchangeable for common
stock without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation.

However, 25% of the shares of common stock subject to the restrictions
described above (other than shares owned by directors or officers) will be
released from these restrictions if the reported last sale price of the common
stock on the Nasdaq National Market is at least twice the initial public
offering price for 20 of the 30 consecutive trading days ending on the last
trading day of the 90 day period after the date of this prospectus. These shares
will be released on the later to occur of the 90 day period after the date of
this prospectus and the second trading day after the first public release of our
quarterly results.

An additional 25% of the shares subject to the restrictions described above
will be released from these restrictions if the reported last sale price of the
common stock on the Nasdaq National Market is at least twice the initial public
offering price for 20 of the 30 consecutive trading days ending on the last
trading day of the 135 day period after the date of this prospectus.

Prior to this offering, no public market has existed for our common stock.
We will negotiate the initial public offering price for our common stock offered
by this prospectus with the representatives of the underwriters, but the
negotiated price may not reflect the market price for our common stock after
this offering. The factors considered in determining the initial public offering
price include:

- the history of and prospects for the industry in which we compete;

- our past and present operations;

- our historical results of operations;

- our prospects for future earnings;

- the recent market prices of securities of generally comparable companies;
and

- the general conditions of the securities market at the time of this
offering.

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<PAGE> 82

We have applied for quotation of our common stock on the Nasdaq National
Market under the symbol "CHEM." Other than in the United States, no action has
been taken by us or the underwriters that would permit a public offering of the
shares of common stock included in this offering in any jurisdiction where
action for that purpose is required. The shares included in this offering may
not be offered or sold, directly or indirectly, nor may this prospectus or any
other offering material or advertisement in connection with the offer and sale
of these shares be distributed or published in any jurisdiction, except under
circumstances that will result in compliance with the applicable rules and
regulations of that jurisdiction. Persons who receive this prospectus are
advised to inform themselves about and to observe any restrictions relating to
this offering and the distribution of this prospectus. This prospectus is not an
offer to sell or a solicitation of an offer to buy any shares of our common
stock in any jurisdiction where that would not be permitted or legal.

In connection with this offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of our
common stock. Specifically, the underwriters may over-allot this offering,
creating a syndicate short position. The underwriters may bid for and purchase
shares of our common stock in the open market to cover syndicate short positions
or to stabilize the price of our common stock. In addition, the underwriting
syndicate may reclaim selling concessions from syndicate members and selected
dealers if they repurchase previously distributed common stock in syndicate
covering transactions, in stabilizing transactions or otherwise, or if
Donaldson, Lufkin & Jenrette Securities Corporation receives a report which
indicates that the clients of such syndicate members have "flipped" our common
stock. These activities may stabilize or maintain the market price of our common
stock above independent market levels. The underwriters are not required to
engage in these activities and may end any of these activities at any time.

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to ten percent of the shares of common stock offered
by this prospectus for sale to our officers, directors, employees and their
family members, strategic partners, current and prospective members of our
trading exchange and other business associates of CheMatch, including clients,
consultants and other friends. These persons must commit to purchase these
reserved shares after the registration statement has become effective but before
the open of business on the following business day. The number of shares
available for sale to the general public will be reduced to the extent these
persons purchase the reserved shares. Any reserved shares not purchased by those
persons will be offered to the general public on the same basis as the other
shares offered hereby.

DLJ Capital Corporation, DLJ ESC II, L.P., Sprout Capital VIII, L.P. and
Sprout Venture Capital, L.P., collectively referred to as the "DLJ Entities,"
are affiliates of Donaldson, Lufkin & Jenrette Securities Corporation, one of
the underwriters. As described under "Principal Stockholders," the DLJ Entities
beneficially own an aggregate of 2,664,953 shares of our common stock, which
represent more than 10% of our outstanding common stock. The DLJ Entities will
place a sufficient number of their shares in a voting trust so that upon the
closing of this offering, the DLJ Entities will exercise voting control over
less than five percent of our outstanding common stock. The shares subject to
the voting trust will be held and voted by an independent third party, Norwest
Bank Indiana, N.A., as voting trustee.

Because the DLJ Entities affiliated with Donaldson, Lufkin & Jenrette
Securities Corporation beneficially own more than 10% of our outstanding common
stock, this offering is being conducted in accordance with Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc., which
provides that the public offering price of an equity security be no higher than
that recommended by a "qualified independent underwriter" meeting certain
standards. In accordance with this requirement, Salomon Smith Barney will assume
the responsibilities of acting as qualified independent underwriter and will
recommend a price in compliance with the requirements of Rule 2720.

77
<PAGE> 83

LEGAL MATTERS

The validity of the issuance of the shares of common stock offered by this
prospectus will be passed on for us by Vinson & Elkins L.L.P., Houston, Texas.
Certain legal matters relating to the common stock offered by this prospectus
will be passed on for the underwriters by Fulbright & Jaworski L.L.P., Houston,
Texas.

EXPERTS

The financial statements included in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.

CHANGE IN INDEPENDENT ACCOUNTANTS

Effective October 26, 1999, Arthur Andersen LLP was engaged as our
independent auditors and replaced other auditors who were dismissed as our
independent accountants on the same date. The decision to change auditors was
approved by our Board of Directors on October 26, 1999. On December 9, 1999, our
former auditors issued a report on PetroChemNet, Inc. for the two years ended
December 31, 1998. The report of our former auditors did not contain an adverse
opinion or disclaimer of opinion nor was it qualified or modified as to any
uncertainty, audit scope or accounting principle. In connection with the audit
for two years ended December 31, 1998, there were no disagreements with our
former auditors on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of our former auditors, would have caused them to
make reference thereto in their report on the financial statements for such
period. Our former auditors have not audited or reported on any of the financial
statements or information included in this prospectus. Prior to October 26,
1999, we had not consulted with Arthur Andersen LLP on items that involved our
accounting principles or the form of audit opinion to be issued on our financial
statements. Our former auditors have furnished us with a letter dated February
25, 2000 and addressed to the SEC stating that they agree with the above
statements.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act relating to the common stock
being sold in this offering. This prospectus constitutes a part of that
registration statement. This prospectus does not contain all of the information
set forth in the registration statement and the exhibits and schedules to the
registration statement because some parts have been omitted in accordance with
the rules and regulations of the Commission. For further information about us
and the common stock being sold in this offering, you should refer to the
registration statement and the exhibits and schedules filed as a part of the
registration statement. Statements contained in this prospectus regarding the
contents of any agreement, contract or other document referred to are not
necessarily complete. Reference is made in each instance to the copy of the
contract or document filed as an exhibit to the registration statement. Each
statement is qualified by reference to the exhibit. The registration statement,
including related exhibits and schedules, may be inspected without charge at the
Commission's principal office in Washington, D.C. Copies of all or any part of
the registration statement may be obtained after payment of fees prescribed by
the Commission from:

- the Commission's Public Reference Room at the Commission's principal
office, 450 Fifth Street, N.W., Washington, D.C. 20549; or

78
<PAGE> 84

- the Commission's regional offices in:

- New York, located at 7 World Trade Center, Suite 1300, New York, New
York 10048; or

- Chicago, located at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.

You may obtain information regarding the operation of the Public Reference
Room by calling the Commission at 1-800-SEC-0330. The Commission maintains a web
site that contains reports, proxy and information statements and other
information regarding registrants, including us, that file electronically with
the Commission. The address of the web site is www.sec.gov.

We intend to furnish holders of our common stock with annual reports
containing audited financial statements certified by an independent public
accounting firm and quarterly reports containing unaudited condensed financial
information for the first three quarters of each fiscal year. We intend to
furnish other reports as we may determine or as may be required by law.

79
<PAGE> 85

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
CHEMATCH.COM, INC.
Report of Independent Public Accountants.................. F-2
Consolidated Balance Sheets............................... F-3
Consolidated Statement of Operations...................... F-4
Consolidated Statement of Preferred Stock and
Stockholders' Deficit.................................. F-5
Consolidated Statement of Cash Flows...................... F-6
Notes to Consolidated Financial Statements................ F-7

PETROCHEMNET, INC.
Report of Independent Public Accountants.................. F-19
Balance Sheets............................................ F-20
Statements of Operations.................................. F-21
Statements of Stockholders' Equity (Deficit).............. F-22
Statements of Cash Flows.................................. F-23
Notes to Financial Statements............................. F-24

CHEMATCH, INC. (A DEVELOPMENT STAGE COMPANY)
Report of Independent Public Accountants.................. F-30
Balance Sheets............................................ F-31
Statements of Operations.................................. F-32
Statements of Shareholders' Deficit....................... F-33
Statements of Cash Flows.................................. F-34
Notes to Financial Statements............................. F-35
</TABLE>

F-1
<PAGE> 86

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To CheMatch.com, Inc.:

We have audited the accompanying consolidated balance sheet of
CheMatch.com, Inc. (a Delaware corporation), as of December 31, 1999, and the
related consolidated statements of operations, preferred stock and stockholders'
deficit and cash flows for the period from June 21, 1999 (inception) through
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
CheMatch.com, Inc., as of December 31, 1999, and the results of its operations
and its cash flows for the period from June 21, 1999 (inception) through
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

ARTHUR ANDERSEN LLP

Houston, Texas
February 4, 2000

F-2
<PAGE> 87

CHEMATCH.COM, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
PRO FORMA
MARCH 31,
MARCH 31, 2000
DECEMBER 31, 2000 (UNAUDITED)
1999 (UNAUDITED) (NOTE 6)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.............................. $ 30,170 $ 27,752 $ 27,752
Accounts receivable, net of allowance of $20........... 73 118 118
Other current assets................................... 74 808 808
-------- -------- --------
Total current assets................................ 30,317 28,678 28,678
Property and equipment, net.............................. 1,692 3,694 3,694
Other assets............................................. 30 61 61
Goodwill, net of accumulated amortization of $272 and
$415 at December 31, 1999 and March 31, 2000,
respectively........................................... 5,559 5,416 5,416
-------- -------- --------
Total assets........................................ $ 37,598 $ 37,849 $ 37,849
======== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
Accounts payable and accrued liabilities............... $ 3,106 $ 4,399 $ 4,399
Deferred revenue....................................... 32 30 30
-------- -------- --------
Total current liabilities........................... 3,138 4,429 4,429
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK:
Series A convertible preferred stock, $.01 par value,
3,742,200 shares authorized; 2,138,400 shares issued
and outstanding, actual; no shares issued and
outstanding, pro forma.............................. 17,488 24,224 --
Series B convertible preferred stock, $.01 par value,
3,556,350 shares authorized; 2,032,200 shares issued
and outstanding, actual; no shares issued and
outstanding, pro forma.............................. 16,809 23,211 --
Series C convertible preferred stock, $.01 par value,
6,130,547 shares authorized; 3,503,169 shares issued
and outstanding, actual; no shares issued and
outstanding, pro forma.............................. 32,654 43,689 --
Commitments and contingencies
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.01 par value, 25,000,000 shares
authorized; 4,304,959 and 5,234,482 shares issued
and outstanding at December 31, 1999 and March 31,
2000, respectively, actual; 12,908,251 shares issued
and outstanding, pro forma.......................... 43 52 129
Additional paid-in capital............................. 13,177 22,268 113,315
Notes receivable from stockholders and employees....... (822) (4,320) (4,320)
Deferred stock compensation............................ (3,039) (2,730) (2,730)
Prepaid goods and services related to issuance of
common stock........................................ (3,959) (4,579) (4,579)
Accumulated deficit.................................... (37,891) (68,395) (68,395)
-------- -------- --------
Total stockholders' equity (deficit)................ (32,491) (57,704) 33,420
-------- -------- --------
Total liabilities and stockholders' equity
(deficit)......................................... $ 37,598 $ 37,849 $ 37,849
======== ======== ========
</TABLE>

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

F-3
<PAGE> 88

CHEMATCH.COM, INC.

CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
JUNE 21, 1999
(INCEPTION) THREE MONTHS
THROUGH ENDED
DECEMBER 31, 1999 MARCH 31, 2000
(UNAUDITED)
<S> <C> <C>
REVENUES:
Trading commissions..................................... $ 108 $ 91
Subscriptions........................................... 74 2
---------- ----------
Total revenues.................................. 182 93
COSTS AND EXPENSES:
Technology costs........................................ 2,302 948
Selling and marketing................................... 2,381 2,440
General and administrative.............................. 3,536 2,782
Stock-based compensation................................ 133 309
Depreciation and amortization........................... 452 427
---------- ----------
Total costs and expenses........................ 8,804 6,906
---------- ----------
Operating loss............................................ (8,622) (6,813)
Interest income........................................... 236 482
---------- ----------
Net loss.................................................. $ (8,386) $ (6,331)
========== ==========
Net loss attributable to common stockholders.............. $ (37,891) $ (30,504)
Net loss per common share, basic and diluted.............. $ (11.63) $ (6.34)
========== ==========
Pro forma net loss per common share, basic and diluted.... $ (1.20) $ (0.51)
========== ==========
Shares used to compute net loss per common share:
Basic and diluted....................................... 3,258,966 4,808,951
Pro forma basic and diluted............................. 6,980,833 12,482,720
</TABLE>

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

F-4
<PAGE> 89

CHEMATCH.COM, INC.

CONSOLIDATED STATEMENT OF PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
JUNE 21, 1999 (INCEPTION) THROUGH MARCH 31, 2000
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PREFERRED STOCK STOCKHOLDERS' DEFICIT
--------------------------------------------------------------- -------------------------------

SERIES A SERIES B SERIES C COMMON STOCK ADDITIONAL
------------------- ------------------- ------------------- ------------------ PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of Series A convertible
preferred stock and warrants
at inception, net of offering
costs......................... 2,138,400 $ 4,977 -- $ -- -- $ -- -- $-- $ --
Issuance of common stock in
connection with
acquisitions................ -- -- -- -- -- -- 2,762,940 28 4,052
Issuance of Series B
convertible preferred stock
and warrants, net of
offering costs.............. -- -- 2,032,200 4,990 -- -- -- -- --
Exercise of common stock
options..................... -- -- -- -- -- -- 713,996 7 898
Issuance of common stock...... -- -- -- -- -- -- 191,080 2 998
Issuance of Series C
convertible preferred stock
and warrants, net of
offering costs.............. -- -- -- -- 3,503,169 27,479 -- -- --
Issuance of common stock for
prepaid goods and
services.................... -- -- -- -- -- -- 636,943 6 4,057
Deferred compensation related
to common stock options..... -- -- -- -- -- -- -- -- 3,172
Amortization of prepaid goods
and services................ -- -- -- -- -- -- -- -- --
Compensation expense related
to stock options............ -- -- -- -- -- -- -- -- --
Accretion of redeemable stock
to redemption value......... -- 12,511 -- 11,819 -- 5,175 -- -- --
Net loss...................... -- -- -- -- -- -- -- -- --
--------- ------- --------- ------- --------- ------- --------- --- -------
Balance, December 31, 1999...... 2,138,400 17,488 2,032,200 16,809 3,503,169 32,654 4,304,959 43 13,177
Unaudited:
Issuance of common stock.... -- -- -- -- -- -- 929,523 9 9,091
Amortization of prepaid
goods and services........ -- -- -- -- -- -- -- -- --
Compensation expense related
to stock options.......... -- -- -- -- -- -- -- -- --
Payments received on notes
receivable................ -- -- -- -- -- -- -- -- --
Accretion of redeemable
stock to redemption
value..................... -- 6,736 -- 6,402 -- 11,035 -- -- --
Net loss.................... -- -- -- -- -- -- -- -- --
--------- ------- --------- ------- --------- ------- --------- --- -------
Balance, March 31, 2000
(Unaudited)................... 2,138,400 $24,224 2,032,200 $23,211 3,503,169 $43,689 5,234,482 $52 $22,268
========= ======= ========= ======= ========= ======= ========= === =======

<CAPTION>
STOCKHOLDERS' DEFICIT
--------------------------------------------------------------------
NOTES
RECEIVABLE PREPAID GOODS
FROM AND SERVICES
STOCKHOLDERS RELATED TO DEFERRED
AND ISSUANCE OF STOCK ACCUMULATED
EMPLOYEES COMMON STOCK COMPENSATION DEFICIT TOTAL
<S> <C> <C> <C> <C> <C>
Issuance of Series A convertible
preferred stock and warrants
at inception, net of offering
costs......................... $ -- $ -- $ -- $ -- $ --
Issuance of common stock in
connection with
acquisitions................ -- -- -- -- 4,080
Issuance of Series B
convertible preferred stock
and warrants, net of
offering costs.............. -- -- -- -- --
Exercise of common stock
options..................... (822) -- -- -- 83
Issuance of common stock...... -- -- -- -- 1,000
Issuance of Series C
convertible preferred stock
and warrants, net of
offering costs.............. -- -- -- -- --
Issuance of common stock for
prepaid goods and
services.................... -- (4,057) -- -- 6
Deferred compensation related
to common stock options..... -- -- (3,172) -- --
Amortization of prepaid goods
and services................ -- 98 -- -- 98
Compensation expense related
to stock options............ -- -- 133 -- 133
Accretion of redeemable stock
to redemption value......... -- -- -- (29,505) (29,505)
Net loss...................... -- -- -- (8,386) (8,386)
------- ------- ------- -------- --------
Balance, December 31, 1999...... (822) (3,959) (3,039) (37,891) (32,491)
Unaudited:
Issuance of common stock.... (3,598) (999) -- -- 4,503
Amortization of prepaid
goods and services........ -- 379 -- -- 379
Compensation expense related
to stock options.......... -- -- 309 -- 309
Payments received on notes
receivable................ 100 -- -- -- 100
Accretion of redeemable
stock to redemption
value..................... -- -- -- (24,173) (24,173)
Net loss.................... -- -- -- (6,331) (6,331)
------- ------- ------- -------- --------
Balance, March 31, 2000
(Unaudited)................... $(4,320) $(4,579) $(2,730) $(68,395) $(57,704)
======= ======= ======= ======== ========
</TABLE>

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

F-5
<PAGE> 90

CHEMATCH.COM, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
JUNE 21, 1999
(INCEPTION) THREE MONTHS
THROUGH ENDED
DECEMBER 31, 1999 MARCH 31, 2000
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(8,386) $(6,331)
Adjustments to reconcile net loss to net cash used in
operating activities --
Depreciation and amortization.......................... 452 427
Non-cash technology costs.............................. 55 167
Compensation expense related to stock options.......... 133 309
Changes in operating assets and liabilities --
Increase in accounts receivable, net................. (88) (45)
Decrease (increase) in other assets.................. 187 (765)
Increase in accounts payable and accrued
liabilities....................................... 2,168 1,323
Decrease in deferred revenue......................... (55) (2)
------- -------
Net cash used in operating activities............. (5,534) (4,917)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........................ (1,560) (2,074)
Acquisitions, net of cash acquired........................ (1,080) --
------- -------
Net cash used in investing activities............. (2,640) (2,074)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible preferred stock, net
of offering costs...................................... 37,446 --
Proceeds from issuance of common stock.................... 1,006 4,503
Payments received on notes receivable..................... -- 100
Exercise of common stock options.......................... 84 --
Payment of advances from shareholders..................... (125) (30)
Payment of line of credit................................. (67) --
------- -------
Net cash provided by financing activities......... 38,344 4,573
------- -------
Net increase (decrease) in cash and cash equivalents........ 30,170 (2,418)
Cash and cash equivalents at beginning of period............ -- 30,170
------- -------
Cash and cash equivalents at end of period.................. $30,170 $27,752
======= =======
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Non-cash consideration in acquisitions.................... $ 4,227 $ --
Notes receivable from stockholders and employees.......... 822 3,598
Prepaid goods and services received for the issuance of
common
stock.................................................. 4,057 999
</TABLE>

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

F-6
<PAGE> 91

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION:

CheMatch.com, Inc. (CheMatch), formerly known as PetroChemNet Holdings,
Inc., was incorporated as a Delaware corporation on June 21, 1999. CheMatch is a
business-to-business Internet-based marketplace for purchasers and sellers of
commodity chemicals, plastics and fuel products. CheMatch's marketplace
incorporates a real-time, interactive trading exchange, where members bid, offer
and negotiate online for the purchase and sale of products 24 hours a day, seven
days a week. Members of CheMatch's secure, neutral exchange trade products
anonymously, utilizing real-time pricing and other market information provided
through the exchange.

On June 21, 1999, PetroChemNet, Inc. and CheMatch, Inc. merged into
CheMatch. CheMatch has been identified as the accounting acquiror in accordance
with Securities and Exchange Commission Staff Accounting Bulletin No. 97, which
states that the combining company that receives the largest portion of voting
rights in the combined corporation is presumed to be the acquiror for accounting
purposes. These acquisitions were accounted for using the purchase method of
accounting. These financial statements and accompanying notes present CheMatch's
consolidated financial results from June 21, 1999 (inception), through December
31, 1999. PetrochemNet, Inc. has been determined to be the Predecessor Entity of
CheMatch.

CheMatch has a limited operating history, which includes substantial losses
since its inception. CheMatch's future success is dependent upon a number of
factors which include, among other things, a proven business model, critical
mass of purchasers and sellers, increased transaction volume, functionality and
reliability of the trading exchange, generation of sufficient revenue,
technological innovation, diversity of products traded on the exchange,
management of growth and attraction and retention of key personnel.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

The accompanying consolidated balance sheet as of March 31, 2000, the
consolidated statement of operations and cash flows for the three months ended
March 31, 2000, and the consolidated statement of preferred stock and
stockholders' deficit for the three months ended March 31, 2000, are unaudited.
In the opinion of management, these unaudited financial statements include all
adjustments of a normal and recurring nature and necessary for a fair
presentation of results for the interim period. Results for the three months
ended March 31, 2000, are not necessarily indicative of expected future results.

Principles of Consolidation

The accompanying consolidated financial statements include CheMatch and its
wholly owned subsidiaries; PetroChemNet, Inc. and CheMatch, Inc. All significant
intercompany account balances and transactions have been eliminated in
consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods. Estimates are used for, but not limited to, the allowance for doubtful
accounts, depreciation and amortization, deferred compensation, and
contingencies. Actual results could differ from those estimates.

F-7
<PAGE> 92

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Cash and Cash Equivalents

CheMatch considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents. At December 31,
1999, CheMatch's cash and cash equivalents consisted primarily of $10.2 million
in money market funds held by large financial institutions and $20.0 million in
investment grade bonds with maturities of less than thirty days.

Fair Value of Financial Instruments

CheMatch has the following financial instruments: cash and cash
equivalents, accounts receivable and accounts payable. Management believes that
the carrying values of these financial instruments approximate their respective
fair value due to their short-term nature.

Long-Lived Assets

Management reviews its long-lived assets and certain identifiable
intangibles to be held and used by CheMatch for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. If the sum of the expected future cash flows from the use of the
asset and its eventual disposition is less than the carrying amount of the
asset, an impairment loss is recognized based on the fair value of the asset. No
such losses have been recognized.

Revenue Recognition

CheMatch generates revenue from its Internet-based trading exchange.
Trading commission revenues consist of commissions typically paid by each party
to a completed transaction. Commissions are based on the volume of chemicals
traded on the exchange and are recognized upon confirmation of a trade. Revenues
from trading commissions involving any trading concessions or other incentives
are accounted for net of any credits or concessions granted. Incentives and
trading concessions granted to date have not had a material impact on our
results of operations.

CheMatch's subscription revenues are derived from subscription fees for
Internet-based information resources. Revenue from subscription fees is
recognized ratably over the term of the subscription, which is normally one
year. The unearned revenue from subscription fees is reflected as deferred
revenue in the accompanying balance sheets. CheMatch pays fees to third parties
who provide and maintain the Internet-based information resources. Certain of
the subscription revenues received are commissions from third parties who
provide and maintain the Internet-based information resources. The commissions
earned are recorded net in the accompanying statement of operations as CheMatch
does not bear the risk of loss.

Technology Costs

Technology costs include costs incurred by CheMatch to develop and maintain
CheMatch's Internet-based trading exchange and information resource web sites.
CheMatch has accounted for all costs related to web site development in
accordance with the American Institute of Certified Public Accountant's
Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." CheMatch has capitalized costs incurred
after preliminary planning, when management has determined its commitment to the
completion of the web sites, completion is probable, and when management
believes that the web sites will perform as intended. During 1999, CheMatch
capitalized $910,000 under SOP 98-1. Costs incurred to maintain the web sites,
and other costs not capitalized under SOP 98-1, are expensed as incurred and
included in technology costs in the accompanying statement of operations.

F-8
<PAGE> 93

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Advertising Costs

Advertising costs included in selling and marketing costs and expenses in
the accompanying consolidated statement of operations are charged to expense
when incurred. Advertising expenses for the period from June 21, 1999
(inception) to December 31, 1999 were $1.1 million.

Net Loss Per Common Share

Net loss per common share is computed by dividing net loss, adjusted for
periodic adjustments to the carrying amount of redeemable convertible preferred
stock, by the weighted average number of shares of CheMatch's common stock
outstanding. Shares associated with stock options, warrants and convertible
preferred stock are not included because they are antidilutive.

Pro Forma Net Loss Per Common Share (Unaudited)

Pro forma net loss per common share is computed using the weighted average
number of shares outstanding, including the pro forma effects of the automatic
conversion of outstanding convertible preferred stock into shares of common
stock upon the effectiveness of CheMatch's initial public offering as if such
conversion occurred on the dates of original issuance.

The following table sets forth the computation of the basic and diluted net
loss per common share for the period from June 21, 1999 (inception), through
December 31, 1999 (in thousands, except per share data):

<TABLE>
<S> <C>
Numerator:
Net loss.................................................. $ (8,386)
==========
Accretion of redeemable convertible preferred stock to
redemption value....................................... (29,505)
----------
Net loss attributable to common stockholders.............. $ (37,891)
==========
Denominator:
Weighted average common shares............................ 3,258,966
Weighted average effect of redeemable convertible
preferred stock........................................ 3,721,867
----------
Shares used to compute pro forma basic and diluted........ 6,980,833
==========
Net loss per common share:
Basic and diluted......................................... $ (11.63)
==========
Pro forma basic and diluted............................... $ (1.20)
==========
</TABLE>

Segment Information

CheMatch operates through one segment, an Internet-based trading exchange
and information resource for purchasers and sellers of commodity chemicals,
plastics and fuel products, across domestic and international markets.
International revenues represented approximately one percent of revenues for the
period from June 21, 1999 (inception) through December 31, 1999. All domestic
operating results and identifiable assets are in the United States.

Recent Accounting Pronouncement

In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin 101, "Revenue Recognition in Financial Statements" (SAB 101)
which provides guidance related to revenue recognition based on interpretations
and practices followed by the SEC. SAB 101 is effective the second fiscal
quarter of fiscal years beginning after December 15, 1999 and requires companies
to report any changes in revenue recognition as a cumulative change in
accounting principle at the time of implementation. CheMatch's management
believes that its revenue recognition policy is in accordance

F-9
<PAGE> 94

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

with SAB 101 and does not believe that adoption of this SAB will have a material
impact on CheMatch's financial position or results of operations.

3. ACQUISITIONS:

On June 21, 1999, PetroChemNet, Inc. and CheMatch, Inc. merged into
CheMatch in a transaction accounted for using the purchase method. The purchase
price of PetroChemNet, Inc. and CheMatch, Inc. has been allocated based on the
estimated fair value of assets acquired and liabilities assumed on the
acquisition date.

PetroChemNet, Inc.

The purchase price of PetroChemNet, Inc. of $3.2 million consisted of
2,119,440 shares of common stock, warrants and options to purchase 397,440 and
1,187,250 shares of common stock, respectively.

The purchase price was allocated as follows (in thousands):

<TABLE>
<S> <C>
Assets acquired........................................... $ 498
Liabilities assumed....................................... (1,193)
Goodwill.................................................. 3,870
-------
$ 3,175
=======
</TABLE>

CheMatch, Inc.

CheMatch, Inc. was acquired through a series of corporate transactions for
a net purchase price of $2 million, which consisted of $983,600 in cash, 643,500
shares of common stock and warrants to purchase 482,571 shares of common stock.

The purchase price was allocated as follows (in thousands):

<TABLE>
<S> <C>
Assets acquired............................................ $ 97
Liabilities assumed........................................ (24)
Goodwill................................................... 1,962
------
$2,035
======
</TABLE>

Goodwill is amortized using the straight-line method over a 10-year period.

The following unaudited pro forma financial information for the year ended
December 31, 1999 and the three months ended March 31, 1999, represents the
consolidated results of operations of CheMatch as if the acquisition of
PetroChemNet, Inc. and CheMatch, Inc. had occurred at the beginning of 1999 and
does not purport to be indicative of what would have occurred had the
acquisition been made as of that date or the results which may occur in the
future (in thousands):

<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1999 MARCH 31, 1999
<S> <C> <C>
Revenues.............................. $ 373 $ 97
Costs and expenses.................... 10,174 425
------- ------
Operating loss........................ (9,801) (328)
Interest income....................... 222 (6)
------- ------
Pro forma net loss.................... $(9,579) $ (334)
======= ======
Pro forma net loss per share, basic
and diluted......................... $(12.91) $(0.12)
======= ======
</TABLE>

F-10
<PAGE> 95

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY AND EQUIPMENT

Property and equipment are carried at cost, less accumulated depreciation.
Maintenance, repairs and minor replacements are charged to expense as incurred;
significant renewals and betterments are capitalized. CheMatch computes
depreciation over the estimated useful life of the assets using the
straight-line method. Leasehold improvements are amortized over the lesser of
five years or the lease term.

Property and equipment consist of the following as of December 31, 1999 (in
thousands):

<TABLE>
<CAPTION>
ESTIMATED
LIFE
<S> <C> <C>
Computer software and equipment................ 3-5 years $1,549
Furniture and fixtures......................... 7 years 209
Leasehold improvements......................... 5 years 23
------
1,781
Less -- Accumulated depreciation and
amortization................................. (89)
------
Property and equipment, net.......... $1,692
======
</TABLE>

5. DETAIL OF OTHER BALANCE SHEET ACCOUNTS:

Accounts payable and accrued liabilities consist of the following as of
December 31, 1999 (in thousands):

<TABLE>
<S> <C>
Accounts payable........................................... $ 366
Accrued payroll-related costs.............................. 951
Accrued technology costs................................... 1,457
Accrued other.............................................. 332
------
Accounts payable and accrued liabilities......... $3,106
======
</TABLE>

6. PREFERRED STOCK AND STOCKHOLDERS' DEFICIT:

Series A Convertible Preferred Stock

In connection with the inception of CheMatch in June 1999, CheMatch issued
2,138,400 Series A units, at a price of $2.3484 per unit, for net proceeds of
$4,977,000. Each Series A unit consists of one share of Series A convertible
preferred stock (Series A) and the right to purchase 0.75 shares of Series A.
Each purchaser of Series A units also received the right to purchase a Series B
unit at $2.4673 prior to September 15, 1999, which was mutually extended to and
exercised on September 27, 1999.

The Series A is convertible at the option of the holder into common stock
on a one-to-one basis, as adjusted for certain events. The Series A will
automatically convert into common stock upon the effectiveness of a public
offering with net proceeds in excess of $25 million for which the offering price
per share is at least two times the original purchase price of the Series C. The
holders of the Series A vote on an as-converted basis. The holders of Series A
are entitled to participate in dividends declared and paid to common
stockholders on an as-converted basis. No dividends have been declared to date.

After June 21, 2004, upon approval of 66 percent of the holders of the
Series A, these shares are redeemable in cash at the greater of the preferred
stock fair market value or the original purchase price per share plus any
dividends declared but unpaid (the Redemption Value) in three equal installments
beginning 120 days after notice, and annually thereafter. CheMatch has no right
to call or redeem the Series A shares.

F-11
<PAGE> 96

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In the event of the liquidation, dissolution or winding up of CheMatch,
whether voluntary or involuntary, the holders of Series A are entitled to
receive preference over any distribution to the holders of Common Stock, in the
amount of $2.3484 per share plus accrued and unpaid dividends (the Liquidation
Preference Payment).

Series B Convertible Preferred Stock

In September 1999, CheMatch issued 2,032,200 Series B units, at a price of
$2.4673 per unit, for net proceeds of $4,990,000. Each Series B unit consists of
one share of Series B convertible preferred stock (Series B) and the right to
purchase 0.75 shares of Series B.

Series C Convertible Preferred Stock

In November 1999, CheMatch issued 3,503,169 Series C units, at a price of
$7.85 per unit, for net proceeds of $27,479,000. Each Series C unit consists of
one share of Series C convertible preferred stock (Series C) and the right to
purchase 0.75 shares of Series C.

The rights, restrictions and preferences of the Series B and Series C are
consistent with those for the Series A, except that the per share price
associated with determining the respective Series B and Series C conversion
ratio and the Liquidation Preference Payment is $2.4673 and $7.85, respectively.

Generally accepted accounting principles require the periodic accretion of
redeemable preferred stock to its Redemption Value when redemption is outside of
the control of the issuer. Since the Redemption Value of the Series A, Series B
and Series C convertible preferred stock exceeds its carrying value as of
December 31, 1999, the carrying value has been accreted to its fair market value
as of December 31, 1999, in the accompanying consolidated statement of
redeemable stock and stockholders' deficit.

Pro Forma Information

As discussed above, CheMatch's convertible preferred stock will convert
into common stock upon the closing of a public offering (as defined). The
accompanying balance sheets include unaudited pro forma stockholders' equity as
of March 31, 2000 which assumes the conversion of outstanding preferred stock
into common stock.

Notes Receivable From Employees

At December 31, 1999, CheMatch held promissory notes receivable from
certain employees and former employees totaling $822,000, representing amounts
owed to CheMatch for the exercise of stock options plus accrued interest. These
notes bear interest at rates ranging from 5.42 to 5.57 percent annually and are
presented in stockholders' equity. They are secured by the common stock issued.
Accrued interest for each note is due and payable annually on June 30 of each
year until maturity. The terms of these notes provide that paid interest is
nonrefundable and accrued interest is a recourse obligation. Principal and any
final interest payments are due at the earlier of (a) three years from date of
execution, (b) the date the respective employee should cease employment with
CheMatch (or January 26, 2001 for the notes of two former employees), or (c)
upon the sale or transfer of any of the underlying shares of common stock
representing collateral.

Warrants

At December 31, 1999, CheMatch had warrants outstanding to purchase 482,571
shares of common stock at an exercise price of $1.336 per share. The warrants
expire on the earlier of June 21, 2004 or the date CheMatch consummates a public
offering for which the net proceeds exceed $25 million. Also at

F-12
<PAGE> 97

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

December 31, 1999, CheMatch had additional warrants outstanding to purchase
397,440 shares of common stock at an exercise price of $3.33 per share. These
warrants expire at various dates between 2002 and 2004. The fair value ascribed
to the common stock warrants was $212,000 in the accompanying consolidated
balance sheet. At December 31, 1999, CheMatch had warrants outstanding of
1,603,800, 1,524,150 and 2,627,378, to purchase Series A, Series B and Series C,
respectively, at exercise prices of $2.3484, $2.4673 and $7.85 per share,
respectively. These Series A, Series B and Series C warrants expire on the
earlier of June 21, 2004 or a public offering for which the net proceeds exceed
$25 million. The fair value ascribed to the Series A, Series B and Series C
warrants was $701,000, $856,000 and $5,154,000, respectively in the accompanying
consolidated balance sheets.

REGISTRATION RIGHTS

Some of CheMatch's shareholders are entitled to require registration for
the sale of their shares. CheMatch will bear all registration expenses if these
registration rights are exercised, other than underwriting discounts and selling
commissions.

7. STOCK OPTION PLANS:

In October 1997, PetroChemNet, Inc. adopted the 1997 Employee, Director and
Consultant Stock Option Plan (the 1997 Plan) which provides for the granting of
incentive and nonqualified stock options to employees, directors and
consultants. Stock options granted under the 1997 Stock Plan have a term of ten
years from the date of grant, with some vesting immediately, and others vesting
over periods ranging from two to three years. As of December 31, 1999, 1,086,150
options were outstanding under the 1997 Stock Plan. The 1997 Stock Plan, which
was adopted by PetroChemNet, Inc. and its stockholders in November 1997, was
assumed by CheMatch and immediately terminated in connection with the
acquisition of PetroChemNet, Inc. in June 1999 and no additional options may be
issued thereunder.

The 1999 Stock Plan, which was adopted by the board of directors in June
1999, provides for the granting of incentive and nonqualified stock options,
stock and stock purchase rights to employees, officers, directors and
consultants. A maximum of 4,500,000 shares are authorized for issuance under the
1999 Stock Plan.

Stock options granted under the 1999 Stock Plan have a term of ten years
from date of grant and are either fully exercisable, subject to repurchase
rights, or vest over four years, with 25 percent of the shares vesting 12 months
from date of grant and the remaining shares vesting ratably on a monthly basis
thereafter. In certain circumstances involving a change in control, as defined,
or termination of the employer without cause, the vesting of options is
accelerated. Certain of the options granted under the 1999 option plan are
subject to repurchase rights, at the exercise price, by CheMatch. The repurchase
rights expire over a four year period.

The following is a summary of CheMatch's option activity through December
31, 1999:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
OPTIONS EXERCISE PRICE
<S> <C> <C>
Outstanding, June 21, 1999 (inception)...................... 1,187,250 $ 1.84
Granted..................................................... 2,779,320 1.38
Exercised................................................... (713,996) 1.27
--------- -------
Outstanding, December 31, 1999.............................. 3,252,574 $ 1.57
=========
</TABLE>

CheMatch records deferred compensation for the difference between the grant
price and the deemed value for financial statement presentation purposes related
to options. The balance at December 31, 1999,

F-13
<PAGE> 98

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

was $3,172,000. In 1999, $133,000 in related expense was recorded. The balance
will be amortized to expense over the remaining vesting periods of the options.

The number and weighted average fair value of options granted in 1999 is as
follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
SHARES FAIR VALUE
<S> <C> <C>
Option price greater than fair market value................. 1,824,569 $0.29
Option price less than fair market value.................... 954,751 3.67
</TABLE>

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

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- -------------------------------------------------------- -----------------------------
WEIGHTED
AVERAGE
OUTSTANDING REMAINING EXERCISABLE
RANGE OF AS OF CONTRACTUAL WEIGHTED AS OF WEIGHTED
EXERCISE DECEMBER 31, LIFE AVERAGE DECEMBER 31, AVERAGE
PRICES 1999 (IN YEARS) EXERCISE PRICE 1999 EXERCISE PRICE
<S> <C> <C> <C> <C> <C>
$ 0.83 606,900 9.4 $0.83 606,900 $0.83
1.34-1.47 2,162,824 10.0 $1.38 1,944,057 $1.38
3.33 479,250 9.0 $3.33 119,850 $3.33
7.85 3,600 10.0 $7.85 -- $ --
--------- ---------
0.83-7.85 3,252,574 9.5 $1.57 2,670,807 $1.34
========= =========
</TABLE>

The fair values of each stock option grant are estimated using the minimum
value method with the following weighted average assumptions for 1999: expected
life of five years, no expected dividends and a risk-free interest rate of six
percent.

Had the compensation cost for the option plans been determined pursuant to
the alternative method under SFAS No. 123, CheMatch's net loss for the period
ended December 31, 1999, would have been increased to the following pro forma
amounts (in thousands except per share data):

<TABLE>
<S> <C>
Net loss:
As reported............................................. $ (8,386)
Pro forma............................................... (12,419)
Net loss per common share, basic and diluted:
As reported............................................. $ (11.63)
Pro forma............................................... (12.86)
</TABLE>

8. INCOME TAXES:

Deferred income taxes are recorded using the liability method of accounting
for income taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. Deferred
tax assets are evaluated for realization based on a more-likely-than-not
criteria in determining if a valuation allowance should be provided.

CheMatch has had net operating losses since June 21, 1999 (inception),
accordingly, there is no provision for income taxes for the period from
inception, through December 31, 1999.

At December 31, 1999, CheMatch has a net operating loss carryforward of
approximately $6.5 million which begins to expire in 2020. The net operating
loss for federal income tax purposes is subject to annual limitations under
Section 382 of the Internal Revenue Code. A valuation allowance has been
established to fully offset any net deferred tax asset after considering
deferred tax liabilities.

F-14
<PAGE> 99

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The components of CheMatch's deferred tax assets as of December 31, 1999,
are as follows (in thousands):

<TABLE>
<S> <C>
Federal net operating loss carryforwards................... $ 2,232
Depreciation and amortization.............................. 124
Accruals not currently deductible.......................... 1,033
-------
3,389
Less -- Valuation allowance................................ (3,389)
-------
Net deferred tax assets.......................... $ --
=======
</TABLE>

A reconciliation of the statutory federal income tax rate to CheMatch's
effective income tax rate for the period from June 21, 1999 (inception), through
December 31, 1999, is as follows (in thousands):

<TABLE>
<S> <C>
U.S. tax at statutory rate................................. $(2,851)
Other...................................................... 143
Adjustment to deferred tax valuation allowance............. 2,708
-------
$ --
=======
</TABLE>

9. EMPLOYEE RETIREMENT SAVINGS PLAN:

CheMatch has an employee retirement savings plan (the Plan) which qualifies
under Section 401(k) of the Internal Revenue Code. The Plan is designed to
provide eligible employees with an opportunity to make regular voluntary
contributions into a long-term investment and savings program. Employees are
eligible to participate in the Plan after three months of employment. Employer
matching contributions are made solely at CheMatch's discretion. CheMatch
contributed approximately $31,000 to the Plan during the period from June 21,
1999 (inception), to December 31, 1999. Three CheMatch officers are Plan
trustees.

10. ALLIANCES:

Pursuant to an Alliance Agreement dated as of June 21, 1999 between
CheMatch and DeWitt & Company, Incorporated (DeWitt), DeWitt provides chemical
industry trading analytics for the trading exchange, and CheMatch has granted to
DeWitt a right to a preferred display on our trading screen for products and
services offered by DeWitt. CheMatch has also agreed to share promotional costs
from time to time. While the agreement provides for the parties to share fees
for any DeWitt products sold on CheMatch's web sites, to date no DeWitt products
have been offered for sale on CheMatch's web sites. If any fee sharing
arrangements are made in the future, revenues will be reported on a net basis.
CheMatch has the right to terminate the Alliance Agreement at any time upon the
payment to DeWitt of $500,000. DeWitt may terminate the Alliance Agreement upon
one year's prior notice and the payment of $60,000. During the year ended
December 31, 1999, CheMatch paid DeWitt approximately $70,836 for services
rendered and for reimbursement of various expenses.

In September 1999, CheMatch entered into a strategic alliance and
subsequently issued 191,080 shares of common stock in exchange for $1.0 million
to Computer Sciences Corporation (CSC). CSC will be CheMatch's preferred
information technology systems integrator, and has agreed not to compete with
CheMatch for one year after termination of the strategic alliance. CSC will
market CheMatch's services to agreed upon customers in exchange for commissions
equal to 20 percent of the cash realized by CheMatch from sales of its services
to those customers. The related commission expense will be recognized by
CheMatch upon completion of the related trade.

F-15
<PAGE> 100

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In November 1999, CheMatch entered into a strategic alliance with E.I.
duPont de Nemours and Company (duPont). The strategic alliance included the sale
of $7.0 million of Series C convertible preferred stock, the sale of 636,943
shares of common stock in exchange for $6,369 in cash. DuPont also agreed to
provide goods and services valued by the Company at approximately $4.1 million.
The future goods and services include use of the CheMatch platform for trading,
reasonable efforts to trade an increasing amount of spot purchases on the
exchange, assistance in the design of the CheMatch platform, one full time
employee for one year and a $2 million credit towards the purchase of the
partner's products and services over a three year period. These future goods and
services have been recorded at the deemed value of the common stock in the
accompanying balance sheet as a component of stockholders' deficit.
Additionally, the alliance provides that for each agreed upon customer brought
to CheMatch by duPont, duPont can earn commissions through December 31, 2000 up
to an aggregate maximum of $2 million payable in shares of common stock valued
at the then fair market value. The related commission expense will be recognized
when earned by duPont. As of December 31, 1999, no commissions had been earned
under this agreement.

11. SIGNIFICANT CONCENTRATIONS:

For the period from June 21, 1999 (inception), through December 31, 1999,
one customer accounted for approximately 10 percent of CheMatch's revenue and
one product, benzene, accounted for approximately 65% of the products traded on
the exchange. Also, for the period June 21 (inception) through December 31,
1999, three of our customers accounted for 17%, 16% and 14% of trading
commissions, respectively.

12. COMMITMENTS AND CONTINGENCIES:

Lease Commitments

CheMatch has noncancelable operating leases expiring in 2000, 2002 and
2003. Minimum future lease payments as of December 31, 1999 on these leases are
as follows (in thousands):

<TABLE>
<S> <C>
Year ending December 31:
2000...................................................... $ 407
2001...................................................... 292
2002...................................................... 260
2003...................................................... 82
------
$1,041
======
</TABLE>

Rental expense was approximately $110,000 for the period ended December 31,
1999.

Litigation

At certain times, CheMatch is involved in legal actions arising in the
ordinary course of business. CheMatch currently is not engaged in any legal
proceedings that are expected to have a material adverse effect on CheMatch's
results of operations or financial position.

Management Incentive Agreement

CheMatch executed a letter agreement on June 21, 1999, as amended on
October 26, 1999, which obligates CheMatch to make an incentive payment to
CheMatch's management and former employees in the event of a fundamental change.
The agreement provides that in the case of a public offering, the portion of the
net proceeds payable to the management team and former employees will be two
percent of the average daily closing price of CheMatch for the 90 day period
immediately following the consummation of a public offering, multiplied by the
number of shares of common stock outstanding on a

F-16
<PAGE> 101

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

fully diluted basis on the 90th day immediately following the consummation of a
public offering. The maximum amount payable under the agreement is $15 million.
The incentive payment will be recorded as compensation expense upon the closing
of the initial public offering.

Consultant Agreements

In January 2000, the Company entered into agreements with two former
employees. The agreements changed the employees status to consultants,
accelerated vesting of their options and provided for approximately $671,000 to
be paid over 15 months commencing in February 2000. The compensation expense
associated with the accelerated vesting of the options and the cash payment was
recorded in January 2000.

13. EVENTS SUBSEQUENT TO THE DATE OF THE REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS (UNAUDITED):

Stock Options

In February 2000, CheMatch granted 726,600 options to certain employees and
former executives pursuant to the Management Incentive Agreement as amended on
February 8, 2000. The options, vest immediately, expire on February 8, 2005 and
have an exercise price of $27.28. One-half of these options will become
exercisable on February 8, 2001, and the remaining options will become
exercisable on February 8, 2002. The options were issued under the terms and
conditions of the 1999 Stock Plan with the exception that the options will not
terminate if the employment or other relationship with CheMatch terminates.

From January 1, 2000 through March 31, 2000, in addition to the options
granted above, CheMatch granted an additional (i) 552,482 options to employees,
and (ii) 50,000 options to two non-employee directors joining the Board. These
options were issued pursuant to the 1999 Stock Plan at exercise prices ranging
from $7.85 per share to the actual price to be received per share in an initial
public offering. The options granted vest over periods ranging from two to four
years.

Strategic Alliances

In February, 2000, CheMatch sold 204,291 shares of common stock to Bayer AG
for $2 million in cash. Bayer has agreed to use the trading exchange as its
preferred platform for e-commerce trading of the products offered on CheMatch's
trading exchange through December 31, 2001. In connection with this agreement,
CheMatch agreed to provide a $2 million credit to Bayer's trading account
against which any commissions generated by Bayer as a result of trades completed
on the exchange will be debited. Accordingly, CheMatch will record any
commissions generated from Bayer net of the $2 million credit through December
31, 2001 in the statement of operations.

In February 2000, CheMatch sold 306,435 shares of common stock to General
Electric Company for $3,064 in cash and a promissory note in aggregate principal
amount of approximately $2 million in conjunction with entering into a strategic
alliance, pursuant to which General Electric agreed to provide future services
with a value estimated by the Company of approximately $1 million. The future
services will be recorded at the fair value of the common stock. If the parties
agree that the value of the future services is in excess of $1 million, CheMatch
will either pay the excess, up to a maximum amount equal to the outstanding
amount of the promissory note, in cash to General Electric or forgive a
comparable amount of the promissory note. The promissory note, which bears
interest at the rate of eight percent per year, is payable in eight consecutive
quarterly installments, commencing April 1, 2000. General Electric has agreed to
use the trading exchange on a preferred, good faith basis for its e-commerce
purchasing, trading or auctioning of any bulk commodity petrochemicals offered
on the exchange through December 31, 2001. In addition, General Electric has
agreed to use reasonable business efforts to assist

F-17
<PAGE> 102

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CheMatch in developing viable e-commerce trading activity in specified
contract-dominated markets where General Electric is a significant buyer.
General Electric has also agreed to promote the trading exchange to a specified
number of agreed upon potential members of our trading exchange. CheMatch agreed
to negotiate in good faith with General Electric regarding its ability to act as
a supplier of credit insurance to be used by CheMatch in the future and have
provided General Electric the right to match any third party offers relating to
comparable services.

In February 2000, CheMatch sold 204,291 shares of our common stock to
Muehlstein Holding Corporation for approximately $1 million in cash and a
promissory note in aggregate principal amount of approximately $1 million. The
promissory note, which bears interest at the rate of eight percent per year, is
payable in eight consecutive quarterly installments, commencing April 1, 2000.
Muehlstein has agreed to use good faith efforts to use the trading exchange on
an exclusive basis through December 31, 2001 for any chemicals and plastics that
it buys, sells, trades, auctions or otherwise transfers using e-commerce to the
extent those products are traded on the exchange. In connection with the
agreement, CheMatch agreed to credit Muehlstein's trading account on a
dollar-for-dollar basis in the amount of payments made under the promissory note
executed by Muehlstein in connection with its purchase of common stock against
which any commissions generated by Muehlstein will be debited. Accordingly,
CheMatch will record any commissions generated from Muehlstein net of the $1
million credit through May 1, 2002 in the statement of operations.

In February 2000, CheMatch entered into an agreement with Stolt-Nielsen
Transportation Group Ltd. affiliate, Optimum Logistics Ltd., commonly known as
ChemLink.com, an Internet-based logistics operating system. CheMatch intends to
integrate the trading exchange with the ChemLink system to permit members to
procure transportation and other logistic services for bulk chemicals from a
variety of service providers, as well as manage and monitor shipments through
all phases of the supply chain. The services that CheMatch expects to be offered
through the ChemLink system include firm freight fixtures and rate indications
for liquid chemical products, shipping and customs brokering, freight
forwarding, cargo inspection and surveying, terminaling and storage and
inventory management and tracking services and related documentation. The
alliance has a term of three years, which may be extended if agreed upon
criteria are met. CheMatch and ChemLink have agreed to pay each other fees equal
to 20 percent of commission revenue earned by either CheMatch or ChemLink from
customers of the other company up to $5 million per year. The parties have also
agreed to assist each other in establishing commercial relationships with
certain target companies in exchange for 20 percent of the gross revenues earned
and received by the other party. ChemLink has agreed to offer CheMatch the
option to invest at least $1 million in a private offering of securities of
Optimum involving an aggregate amount of at least $5 million.

In February 2000, CheMatch sold 61,288 shares of our common stock to
TownsendTarnell, Inc. for $612 in cash and a promissory note in aggregate
principal amount of approximately $599,297. The promissory note, which bears
interest at the rate of eight percent per year, is payable in twelve consecutive
monthly installments, commencing February 1, 2000. CheMatch also entered into a
consulting agreement with TownsendTarnell. During the first six months of the
consulting agreement, TownsendTarnell's personnel are required to use their best
reasonable efforts to promote the use of the trading exchange by potential
buyers of thermoplastic resins in North America and Europe. Additionally,
TownsendTarnell will provide CheMatch with various credit services. Under the
consulting agreement, CheMatch agreed to pay TownsendTarnell $70,000 per month
for a nine consecutive months, commencing February 1, 2000. The consulting
agreement is cancelable by mutual consent or upon six months notice.

Additionally, TownsendTarnell has agreed to provide CheMatch with a
business plan relating to the creation and development of TownsendTarnell.com.
Assuming the business plan is acceptable CheMatch has agreed to extend
TownsendTarnell a $500,000 line of credit. TownsendTarnell has offered CheMatch

F-18
<PAGE> 103

CHEMATCH.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

an option to invest $1 million in any private offering of securities relating to
TownsendTarnell.com involving an aggregate amount of at least $5 million.

In February 2000, CheMatch sold 153,218 shares of common stock to William
Heinemann, Inc., for $1.5 million. CheMatch agreed to purchase information
content, advertising and other promotional material and services from William
Heinemann or a designee of William Heinemann in amounts totaling at least
$500,000 between January 1, 2000 and January 1, 2002.

F-19
<PAGE> 104

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To PetroChemNet, Inc.:

We have audited the accompanying balance sheets of PetroChemNet, Inc. (a
Delaware corporation), as of December 31, 1997 and 1998 and June 20, 1999, and
the related statements of operations, stockholders' equity (deficit) and cash
flows for the years ended December 31, 1997 and 1998, and for the period from
January 1, 1999 to June 20, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of PetroChemNet, Inc., as of
December 31, 1997 and 1998, and June 20, 1999, and the results of its operations
and its cash flows for the years ended December 31, 1997 and 1998, and for the
period from January 1, 1999, to June 20, 1999, in conformity with accounting
principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

Houston, Texas
February 4, 2000

F-20
<PAGE> 105

PETROCHEMNET, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- JUNE 20,
1997 1998 1999
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 210 $ 2 $ 49
Accounts receivable, net of allowance of $1, $5 and $20,
respectively........................................... 149 56 17
Prepaids and other current assets......................... 59 60 40
------- ------- -------
Total current assets................................... 418 118 106
Property and equipment, net................................. 194 153 138
Other assets................................................ 206 106 56
Deferred offering costs..................................... -- -- 198
------- ------- -------
Total assets........................................... $ 818 $ 377 $ 498
======= ======= =======

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
Line of credit............................................ $ 67 $ 67 $ 67
Accounts payable and accrued liabilities.................. 382 568 825
Deferred revenue.......................................... 104 89 80
Payable to shareholders and employee...................... 127 85 221
------- ------- -------
Total current liabilities.............................. 680 809 1,193
Commitments and contingencies
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, no par value, 20,000 shares authorized;
5,533, 5,935 and 7,065 shares issued and outstanding,
respectively........................................... 1,388 3,367 4,007
Accumulated deficit....................................... (1,250) (3,799) (4,702)
------- ------- -------
Total stockholders' equity (deficit)................... 138 (432) (695)
------- ------- -------
Total liabilities and stockholders' equity (deficit)... $ 818 $ 377 $ 498
======= ======= =======
</TABLE>

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

F-21
<PAGE> 106

PETROCHEMNET, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31 JANUARY 1, 1999
---------------- THROUGH
1997 1998 JUNE 20, 1999
<S> <C> <C> <C>
REVENUES:
Web site services....................................... $ 775 $ 542 $ 56
Subscriptions........................................... 66 156 55
------ ------- ------
Total revenues.................................. 841 698 111
COSTS AND EXPENSES:
Technology costs........................................ 901 631 149
Selling and marketing................................... 222 176 70
General and administrative.............................. 246 688 657
Stock-based compensation................................ 239 1,577 50
Depreciation and amortization........................... 144 161 82
------ ------- ------
Total costs and expenses........................ 1,752 3,233 1,008
------ ------- ------
Operating loss............................................ (911) (2,535) (897)
Interest expense.......................................... (16) (14) (6)
------ ------- ------
Net loss.................................................. $ (927) $(2,549) $ (903)
====== ======= ======
</TABLE>

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

F-22
<PAGE> 107

PETROCHEMNET, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK
----------------- ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
<S> <C> <C> <C> <C>
Balance, December 31, 1996......................... 5,000 $ 451 $ (323) $ 128
Capital contributions............................ -- 165 -- 165
Issuance of common stock......................... 533 533 -- 533
Compensation expense related to stock options.... -- 239 -- 239
Net loss......................................... -- -- (927) (927)
----- -------- ------- --------
Balance, December 31, 1997......................... 5,533 1,388 (1,250) 138
Issuance of common stock......................... 402 402 -- 402
Compensation expense related to stock options.... -- 1,577 -- 1,577
Net loss......................................... -- -- (2,549) (2,549)
----- -------- ------- --------
Balance, December 31, 1998......................... 5,935 3,367 (3,799) (432)
Issuance of common stock......................... 1,130 410 -- 410
Stock options exercised.......................... 180 -- 180
Compensation expense related to stock options.... -- 50 -- 50
Net loss......................................... -- -- (903) (903)
----- -------- ------- --------
Balance, June 20, 1999............................. 7,065 $ 4,007 $(4,702) $ (695)
===== ======== ======= ========
</TABLE>

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

F-23
<PAGE> 108

PETROCHEMNET, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31 JANUARY 1, 1999
----------------- THROUGH
1997 1998 JUNE 20, 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................. $(927) $(2,549) $(903)
Adjustments to reconcile net loss to net cash used in
operating activities --
Depreciation and amortization......................... 144 161 82
Stock-based compensation expense...................... 239 1,577 50
Non-cash consulting expense........................... -- -- 150
Changes in operating assets and liabilities --
Decrease in accounts receivable..................... 67 93 39
(Increase) decrease in prepaids and other........... (59) (1) 20
Increase in accounts payable and accrued
liabilities...................................... 240 186 59
Increase (decrease) in deferred revenue............. 104 (15) (9)
----- ------- -----
Net cash used in operating activities............ (192) (548) (512)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment....................... (139) (20) (18)
Purchase of customer list................................ (300) -- --
Security deposit paid.................................... (1) -- --
----- ------- -----
Net cash used in investing activities............ (440) (20) (18)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit............................. 67 -- --
Proceeds from shareholder loans.......................... 17 8 2
Payments of shareholder loans............................ -- (50) (15)
Proceeds from issuance of common stock................... 533 402 410
Exercise of common stock options......................... -- -- 180
Capital contributions from shareholders.................. 165 -- --
----- ------- -----
Net cash provided by financing activities........ 782 360 577
----- ------- -----
Net increase (decrease) in cash............................ 150 (208) 47
Cash at beginning of period................................ 60 210 2
----- ------- -----
Cash at end of period...................................... $ 210 $ 2 $ 49
===== ======= =====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest................................... $ 16 $ 7 $ 6
</TABLE>

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

F-24
<PAGE> 109

PETROCHEMNET, INC.

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION:

PetroChemNet, Inc. (PetroChemNet), was originally incorporated as a
Connecticut corporation in March 1996 and commenced operations in January 1997.
In June 1998, PetroChemNet became a Delaware corporation. PetroChemNet provides
Internet-based information resources in the chemical industry. In 1997,
PetroChemNet merged with T3 Technologies, Inc. (T3). PetroChemNet and T3 were
entities under common control. Accordingly, the merger has been recorded in a
manner similar to a pooling of interests accounting.

On June 21, 1999, PetroChemNet merged into CheMatch.com, Inc. (CheMatch) in
exchange for the issuance of 2,119,440 shares of CheMatch common stock. In
conjunction with this transaction, CheMatch, Inc. (a Texas corporation), was
also acquired by CheMatch.

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
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods. Estimates are used for, but not limited to, the allowance for doubtful
accounts, depreciation and amortization, deferred compensation and
contingencies. Actual results could differ from those estimates.

Fair Value of Financial Instruments

PetroChemNet has the following financial instruments: cash, accounts
receivable and accounts payable. Management believes that the carrying values of
these financial instruments approximate their respective fair value due to their
short-term nature.

Revenue Recognition

PetroChemNet's Web site services revenues are derived from projects in
which PetroChemNet designs, develops and implements Web site applications. In
addition, PetroChemNet provides ongoing Web site maintenance and administrative
services for its customers. Revenue from Web site services is recognized when
all of the following have occurred: a contract has been entered into with a
customer, services have been rendered, the fee amount has been determined and
collectibility is reasonably assured. PetroChemNet suspended its web site
service activities in 1998.

PetroChemNet's subscription revenues are derived from fees for access to
Internet-based information resources. Revenue from subscription fees is
recognized ratably over the term of the subscription, which is normally one
year. The unearned revenue from subscription fees is reflected as deferred
revenue in the accompanying balance sheets. PetroChemNet pays fees to third
parties who provide and maintain the Internet-based information resources.
Certain of the subscription revenues received are commissions from third parties
who provide and maintain the Internet-based information resources. The
commissions earned are recorded net in the accompanying statement of operations
as CheMatch does not bear the risk of loss.

Technology Cost

Technology costs include expenses incurred by PetroChemNet to maintain
PetroChemNet's Internet-based information resource web site.

F-25
<PAGE> 110
PETROCHEMNET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Recent Accounting Pronouncement

3. PROPERTY AND EQUIPMENT:

Property and equipment are carried at cost, less accumulated depreciation.
Maintenance, repairs and minor replacements are charged to expense as incurred;
significant renewals and betterments are capitalized. PetroChemNet computes
depreciation and amortization over the estimated useful life of the assets
utilizing a straight-line method. Leasehold improvements are amortized over the
lesser of five years or the lease term. Property and equipment consist of the
following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
ESTIMATED --------------------- JUNE 20,
LIFE 1997 1998 1999
<S> <C> <C> <C> <C>
Computer software and equipment........... 3-5 years $230 $ 238 $ 256
Furniture and fixtures.................... 7 years 18 20 20
Leasehold improvements.................... 5 years 15 20 20
---- ----- -----
263 278 296
Less -- Accumulated depreciation and
amortization............................ (69) (125) (158)
---- ----- -----
Property and equipment, net..... $194 $ 153 $ 138
==== ===== =====
</TABLE>

4. DETAIL OF OTHER BALANCE SHEET ACCOUNTS:

PetroChemNet purchased a customer list on January 6, 1997, at a cost of
$300,000, which is being amortized over three years (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- JUNE 20,
1997 1998 1999
<S> <C> <C> <C>
Customer list......................................... $ 300 $ 300 $ 300
Less -- Accumulated amortization...................... (100) (200) (250)
----- ----- -----
Intangible assets, net...................... $ 200 $ 100 $ 50
----- ----- -----
Other assets.......................................... 6 6 6
----- ----- -----
Other assets................................ $ 206 $ 106 $ 56
===== ===== =====
</TABLE>

Accounts payable and accrued liabilities consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- JUNE 20,
1997 1998 1999
<S> <C> <C> <C>
Accounts payable...................................... $ 364 $ 524 $ 766
Other accruals........................................ 18 44 59
----- ----- -----
Accounts payable and accrued liabilities.... $ 382 $ 568 $ 825
===== ===== =====
</TABLE>

F-26
<PAGE> 111
PETROCHEMNET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

5. LINE OF CREDIT:

PetroChemNet obtained a line of credit in May 1997 under which it could
borrow up to $100,000 at an interest rate of prime plus 2 percent. The line of
credit terminated in August 1997; however, the outstanding balance of $67,000
was not repaid. PetroChemNet was current on all interest payments. All assets of
PetroChemNet are collateral for the loan. In conjunction with the merger of
PetroChemNet into CheMatch, the line of credit was repaid in July 1999.

6. PAYABLE TO STOCKHOLDERS:

As of December 31, 1997 and 1998, and June 20, 1999, PetroChemNet had an
outstanding balance of $127,000, $85,000 and $72,000, respectively, due to the
chief executive officer and president who are also stockholders. The notes
accrue interest at 6 percent and are payable on demand. In conjunction with the
merger of PetroChemNet into CheMatch in June 1999, the notes payable were
repaid. Also, at June 20, 1999, PetroChemNet owed $149,000 to a shareholder
pursuant to a consulting agreement.

7. STOCKHOLDERS' EQUITY:

PetroChemNet sold 1,325 shares of common stock with detachable warrants to
various investors during 1997, 1998 and 1999. The warrants have an exercise
price of $1,000 and an exercise period ranging from four to five years. The
values of these warrants are included in common stock on the accompanying
balance sheets. Each warrant was converted into 300 warrants to purchase shares
of CheMatch common stock on June 21, 1999.

In connection with the purchase of T3, one of the stockholders of
PetroChemNet granted an option to purchase an aggregate of up to 250 shares of
his common stock of PetroChemNet to two T3 shareholders at a price equal to the
greater of (a) $2,000 per share or (b) 50 percent of the price per share of
common stock in a public offering. The option expires on March 13, 2007. This
option was converted into an option to purchase 75,000 shares of CheMatch common
stock on June 21, 1999.

8. STOCK OPTION PLAN:

On October 27, 1997, the board of directors approved the adoption of the
1997 Employee, Director and Consultant Stock Plan (the Stock Plan) which
provides for the granting of incentive or nonqualified stock options to
employees, directors and consultants to purchase up to 2,000 shares of common
stock. In November 1998, the number of shares issuable under the Plan was
increased to 6,000 by approval of the board of directors. Stock options granted
under the Plan have a term of ten years from date of grant, with some vesting
immediately, and other vesting over periods ranging from two to three years.
Each option was converted into 300 options to purchase shares of CheMatch common
stock on June 21, 1999.

F-27
<PAGE> 112
PETROCHEMNET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The following is a summary of PetroChemNet's option activity through June
20, 1999:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
EXERCISE
OPTIONS PRICE
<S> <C> <C>
Outstanding, December 31, 1996.............................. -- $ --
Granted..................................................... 748 694
------ ------
Outstanding, December 31, 1997.............................. 748 694
Granted..................................................... 3,226 511
Forfeited................................................... (220) 1,000
------ ------
Outstanding, December 31, 1998.............................. 3,754 577
Granted..................................................... 1,511 265
Forfeited................................................... (587) 263
Exercised................................................... (720) 250
------ ------
Outstanding, June 20, 1999.................................. 3,958 $ 553
======
</TABLE>

PetroChemNet records compensation expense for the difference between the
grant price and the deemed fair value for financial statement presentation
purposes related to options. During 1997, 1998 and 1999, PetroChemNet recorded
$239,000, $1,577,000, and $50,000, respectively, for compensation expense in the
accompanying statements of operations.

The fair values of each stock option grant were estimated using the minimum
value method with the following weighted average assumptions for 1997 and 1998:
expected life of four years, no expected dividends and a risk-free interest rate
of six percent. The following weighted average assumptions were used for 1999;
expected life of five years, no expected dividends and a risk-free interest rate
of 5.23 percent.

The number and weighted average fair value of options granted in 1997, 1998
and 1999 is as follows:

<TABLE>
<CAPTION>
1997 1998 1999
------------------- ------------------- -------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
SHARES FAIR VALUE SHARES FAIR VALUE SHARES FAIR VALUE
<S> <C> <C> <C> <C> <C> <C>
Option price equals fair market value....... 443 $213 1,123 $213 -- $ --
Option price greater than fair market
value..................................... -- -- -- -- 273 --
Option price less than fair market value.... 305 803 2103 803 1,238 139
</TABLE>

The following table summarizes information about stock options outstanding
at June 20, 1999:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ------------------------------------------------------- ----------------------------
WEIGHTED
AVERAGE
OUTSTANDING REMAINING EXERCISABLE
RANGE OF AS OF CONTRACTUAL WEIGHTED AS OF WEIGHTED
EXERCISE JUNE 20, LIFE AVERAGE JUNE 20 AVERAGE
PRICES 1999 (IN YEARS) EXERCISE PRICE 1999 EXERCISE PRICE
<S> <C> <C> <C> <C> <C>
$ 250 2,360 9.8 $ 250 2,360 $ 250
1,000 1,598 9.6 $1,000 517 $1,000
----- -----
250-1,000 3,958 9.8 $ 553 2,877 $ 281
===== =====
</TABLE>

F-28
<PAGE> 113
PETROCHEMNET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Had the compensation cost for this plan been determined consistent with
SFAS No. 123, "Accounting for Stock-Based Compensation" PetroChemNet's net loss
would have increased to the following pro forma amounts (in thousands, except
per share data):

<TABLE>
<CAPTION>
DECEMBER 31
--------------- JUNE 20,
1997 1998 1999
<S> <C> <C> <C>
Net loss:
As reported............................................. $(927) $(2,549) $ (903)
Pro forma............................................... (938) (2,600) (1,025)
</TABLE>

9. INCOME TAXES:

PetroChemNet records taxes under the liability method of accounting for
income taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.

At June 20, 1999, PetroChemNet had a net operating loss carryforward of
approximately $1,100,000 which begins expiring in 2013. The net operating loss
for federal income tax purposes is subject to annual limitations under Section
382 of the Internal Revenue Code. A valuation allowance has been recognized to
fully offset the deferred tax assets after considering deferred tax liabilities.

The components of PetroChemNet's deferred tax assets are as follows (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- JUNE 21,
1997 1998 1999
<S> <C> <C> <C>
Federal net operating loss carryforwards.............. $ 122 $ 373 $ 378
Accruals not currently deductible..................... -- -- 189
Depreciation and amortization......................... (6) (43) 52
----- ----- -----
116 330 619
Less -- Valuation allowance........................... (116) (330) (619)
----- ----- -----
Net deferred tax assets..................... $ -- $ -- $ --
===== ===== =====
</TABLE>

A reconciliation of the statutory federal income tax rate to PetroChemNet's
effective tax rate for the years ended December 31, 1997 and 1998, and the
period from January 1, 1999, to June 20, 1999, is as follows (in thousands):

<TABLE>
<CAPTION>
1997 1998 1999
<S> <C> <C> <C>
U.S. statutory rate...................................... $(315) $(867) $(307)
Nondeductible expense.................................... 81 536 18
Other.................................................... 118 117 --
Adjustment to deferred tax valuation allowance........... 116 214 289
----- ----- -----
$ -- $ -- $ --
===== ===== =====
</TABLE>

F-29
<PAGE> 114
PETROCHEMNET, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES:

Lease Agreement

PetroChemNet has a noncancelable operating lease, expiring in 2002. Minimum
future lease payments on this lease are as follows (in thousands):

<TABLE>
<S> <C>
Period ending December 31:
1999..................................................... $ 42
2000..................................................... 86
2001..................................................... 90
2002..................................................... 63
----
$281
====
</TABLE>

Rental expense was approximately $33,000, $78,000 and $40,000 for the years
ended December 31, 1997 and 1998, and the period from January 1, 1999, to June
20, 1999, respectively.

Litigation

At certain times, PetroChemNet is involved in legal actions arising in the
ordinary course of business. PetroChemNet currently is not engaged in any legal
proceedings that are expected to have a material adverse effect on
PetroChemNet's results of operations or financial position.

11. SIGNIFICANT CUSTOMERS

During 1997, 1998 and the period from January 1, 1999 through June 20, 1999
three, four and one customers in the aggregate represented 86 percent, 86
percent and 32 percent of PetroChemNet's total revenues, respectively.

F-30
<PAGE> 115

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To CheMatch, Inc.:

We have audited the accompanying balance sheets of CheMatch, Inc. (a Texas
corporation in the development stage), as of December 31, 1997 and 1998, and the
related statements of operations, shareholders' deficit and cash flows for the
period from March 10, 1997 (inception) through December 31, 1997, and for the
year ended December 31, 1998. 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.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of CheMatch, Inc., as of
December 31, 1997 and 1998, and the results of its operations and its cash flows
for the period from March 10, 1997 (inception), through December 31, 1997, and
for the year ended December 31, 1998, in conformity with accounting principles
generally accepted in the United States.

ARTHUR ANDERSEN LLP

Houston, Texas
February 4, 2000

F-31
<PAGE> 116

CHEMATCH, INC.
(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1997 1998 MARCH 31, 1999
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 1 $ 20 $ --
Accounts receivable....................................... -- 19 13
----- ----- -----
Total current assets................................... 1 39 13
Property and equipment, net................................. 131 105 94
----- ----- -----
Total assets........................................... $ 132 $ 144 $ 107
===== ===== =====

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
Advances from related party............................... $ 203 $ 261 $ 270
Accounts payable and accrued liabilities.................. 11 25 29
Deferred revenue.......................................... -- 49 28
----- ----- -----
Total current liabilities.............................. 214 335 327
Commitments and contingencies
SHAREHOLDERS' DEFICIT:
Common stock, $0.01 par, 10,000 shares authorized; 3,750
shares issued and outstanding.......................... -- -- --
Additional paid-in capital................................ 3 3 3
Deficit accumulated in development stage.................. (85) (194) (223)
----- ----- -----
Total shareholders' deficit............................ (82) (191) (220)
----- ----- -----
Total liabilities and shareholders' deficit............ $ 132 $ 144 $ 107
===== ===== =====
</TABLE>

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

F-32
<PAGE> 117

CHEMATCH, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
MARCH 10, 1997 THREE
(INCEPTION), MONTHS ENDED MARCH 10, 1997
THROUGH YEAR ENDED MARCH 31, (INCEPTION)
DECEMBER 31, DECEMBER 31, ------------ THROUGH
1997 1998 1998 1999 MARCH 31, 1999
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES:.................................. $ -- $ 84 $ 13 $ 33 $ 117
----- ----- ---- ---- -----
COSTS AND EXPENSES:
Technology costs......................... 1 30 7 2 33
General and administrative............... 107 104 28 45 256
Depreciation............................. 2 41 10 11 54
----- ----- ---- ---- -----
Total costs and expenses......... 110 175 45 58 343
----- ----- ---- ---- -----
Operating loss............................. (110) (91) (32) (25) (226)
Interest expense........................... (5) (18) (4) (4) (27)
----- ----- ---- ---- -----
Loss before income taxes................... (115) (109) (36) (29) (253)
Benefit of income taxes.................... 30 -- -- -- 30
----- ----- ---- ---- -----
Net loss................................... $ (85) $(109) $(36) $(29) $(223)
===== ===== ==== ==== =====
</TABLE>

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

F-33
<PAGE> 118

CHEMATCH, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF SHAREHOLDERS' DEFICIT
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DEFICIT
COMMON STOCK ADDITIONAL ACCUMULATED
--------------- PAID-IN IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
<S> <C> <C> <C> <C> <C>
Issuance of common stock at inception, March
1997 ($1.00 per share).................... 4,750 $ -- $ 4 $ -- $ 4
Repurchase of common stock, August 1997
($1.00 per share)...................... (1,000) -- (1) -- (1)
Net loss.................................. -- -- -- (85) (85)
------ ---- --- ----- -----
Balance, December 31, 1997.................. 3,750 -- 3 (85) (82)
Net loss.................................. -- -- -- (109) (109)
------ ---- --- ----- -----
Balance, December 31, 1998.................. 3,750 -- 3 (194) (191)
Net loss (unaudited)...................... -- -- -- (29) (29)
------ ---- --- ----- -----
Balance, March 31, 1999 (unaudited)......... 3,750 $ -- $ 3 $(223) $(220)
====== ==== === ===== =====
</TABLE>

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

F-34
<PAGE> 119

CHEMATCH, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
MARCH 10, 1997 THREE
(INCEPTION), MONTHS ENDED MARCH 10, 1997
THROUGH YEAR ENDED MARCH 31, (INCEPTION),
DECEMBER 31, DECEMBER 31, ------------- THROUGH
1997 1998 1998 1999 MARCH 31, 1999
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................... $ (85) $(109) $(36) $(29) $(223)
Adjustments to reconcile net loss to net
cash used in operating activities --
Depreciation............................. 2 41 10 11 54
Changes in operating assets and
liabilities --
(Increase) decrease in accounts
receivable.......................... -- (19) (13) 6 (13)
Increase (decrease) in accounts payable
and accrued liabilities............. 11 14 (2) 4 29
Increase (decrease) in deferred
revenue............................. -- 49 -- (21) 28
----- ----- ---- ---- -----
Net cash used in operating
activities........................ (72) (24) (41) (29) (125)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment........ (133) (15) (8) -- (148)
----- ----- ---- ---- -----
Net cash used in investing
activities........................ (133) (15) (8) -- (148)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from related party................ 203 111 50 23 337
Payments of advances from related party.... -- (53) -- (14) (67)
Issuance of common stock................... 4 -- -- -- 4
Repurchase of common stock................. (1) -- -- -- (1)
----- ----- ---- ---- -----
Net cash provided by financing
activities........................ 206 58 50 9 273
----- ----- ---- ---- -----
Net increase (decrease) in cash.............. 1 19 1 (20) --
Cash at beginning of period.................. -- 1 1 20 --
----- ----- ---- ---- -----
Cash at end of period........................ $ 1 $ 20 $ 2 $ -- $ --
===== ===== ==== ==== =====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest..................... $ -- $ 9 $ -- $ -- $ 9
</TABLE>

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

F-35
<PAGE> 120

CHEMATCH, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION:

CheMatch, Inc., was incorporated as a Texas corporation on March 10, 1997.
The accompanying financial statements and related notes reflect the historical
results of operations and financial position of CheMatch, Inc., until June 21,
1999, a subsidiary of DeWitt & Company, Inc. (DeWitt), a consulting firm serving
the petrochemical industry. CheMatch, Inc. operates an Internet-based trading
exchange for the purchase and sale of bulk commodity chemicals which became
operational in February 1998.

CheMatch, Inc. was a development stage company that devoted substantially
all of its efforts in developing an Internet-based trading exchange and building
a customer base and had not generated significant revenues from operations prior
to 1999.

CheMatch, Inc. has experienced negative cash flows from operations and has
incurred net losses since inception. CheMatch, Inc.'s operations have been
funded to date primarily through advances from DeWitt. In 1999, CheMatch, Inc.
completed the transition from a development stage company to an operating
company. On June 21, 1999, CheMatch, Inc., was acquired by CheMatch.com, Inc.
(CheMatch).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Statements

The accompanying balance sheet as of March 31, 1999, the statements of
operations and cash flows for the three months ended March 31, 1998 and 1999,
and the statements of shareholders' deficit for the three months ended March 31,
1999, are unaudited. In the opinion of management, these unaudited financial
statements include all adjustments of a normal and recurring nature and
necessary for a fair presentation of results for the interim periods. Results
for the three months ended March 31, 1999, are not necessarily indicative of
expected future results.

Use of Estimates

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

Fair Value of Financial Instruments

CheMatch, Inc. has the following financial instruments: cash, accounts
receivable and accounts payable. Management believes that the carrying values of
these financial instruments approximate their respective fair value due to their
short-term nature.

Revenue Recognition

CheMatch, Inc. generates revenue from its Internet-based trading exchange.
Trading commission revenues typically consist of commissions paid by each party
to a completed transaction. Commissions are based on the volume of chemicals
traded on the exchange and are recognized upon confirmation of a trade. Revenues
from trading commissions involving any trading concessions or other incentives
are accounted for net of any credits or concessions granted. Incentives and
trading concessions granted to date have not had a material impact on our
results of operations. Prior to 1999, CheMatch, Inc. charged sign-on fees for
new members. In 1999, CheMatch, Inc. suspended sign-on fees. Sign-on fees were
recognized ratably over the initial term of the contract.

F-36
<PAGE> 121
CHEMATCH, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

CheMatch, Inc. records deferred revenue when amounts are collected under
terms of the contract in advance of satisfying revenue recognition criteria. The
amounts deferred as of each balance sheet date are expected to be recognized as
revenue within 12 months of the respective balance sheet dates and, accordingly,
are classified as current liabilities.

Technology Costs

Technology costs include expenses incurred by CheMatch, Inc. to maintain
CheMatch, Inc.'s Internet-based trading exchange.

Recent Accounting Pronouncement

In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin 101, "Revenue Recognition in Financial Statements" (SAB 101)
which provides guidance related to revenue recognition based on interpretations
and practices followed by the SEC. SAB 101 is effective the second fiscal
quarter of fiscal years beginning after December 15, 1999 and requires companies
to report any changes in revenue recognition as a cumulative change in
accounting principle at the time of implementation. CheMatch, Inc.'s management
believes that its revenue recognition policy is in accordance with SAB 101 and
does not believe that adoption of this SAB will have a material impact on
CheMatch, Inc.'s financial position or results of operations.

3. PROPERTY AND EQUIPMENT:

Property and equipment are carried at cost, less accumulated depreciation.
Maintenance, repairs and minor replacements are charged to expense as incurred;
significant renewals and betterments are capitalized. CheMatch, Inc. computes
depreciation over the estimated useful life of the assets using the
straight-line method. Property and equipment consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
ESTIMATED ----------------
LIFE 1997 1998
<S> <C> <C> <C>
Computer software and equipment......................... 3-5 years $132 $147
Furniture and fixtures.................................. 7 years 1 1
---- ----
133 148
Less -- Accumulated depreciation........................ (2) (43)
---- ----
Property and equipment, net................... $131 $105
==== ====
</TABLE>

4. ADVANCES FROM RELATED PARTY:

During 1997 and 1998, CheMatch, Inc. received cash advances totaling
$203,000 and $111,000, respectively, from DeWitt primarily to fund operations of
CheMatch, Inc. The advances accrue interest at 7 percent per annum. In 1998,
CheMatch, Inc. made payments totaling $53,000 to DeWitt on the outstanding
balance of the advances. The advances were payable on demand and are classified
as current. At December 31, 1997 and 1998, accrued interest of $5,000 and
$22,000, respectively, is included in accrued liabilities.

5. SHAREHOLDERS' EQUITY:

In August 1997, CheMatch, Inc. entered into an agreement with a shareholder
(Shareholder Agreement) to repurchase and retire 1,000 shares of common stock
for $1,000 cash. The Shareholder Agreement also granted an option to the
shareholder to purchase 20 percent of CheMatch, Inc's common

F-37
<PAGE> 122
CHEMATCH, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

stock on or before December 31, 2002. If the option was not exercised or
terminated by the shareholder by December 31, 2002, then the shareholder was
entitled to receive the option payment amount determined as of December 31,
2002. In accordance with the Shareholder Agreement, the shareholder also was
entitled to cash payments based on the achievement by CheMatch, Inc. of certain
revenue targets each fiscal year for a four-year period ending November 30,
2002. In conjunction with the acquisition by CheMatch, the Shareholder Agreement
was terminated by issuance of 64,350 shares of CheMatch common stock, and a cash
payment of $70,000, all of which was included in the purchase price of CheMatch,
Inc.

6. INCOME TAXES:

During these periods, CheMatch, Inc. was a wholly owned subsidiary of
DeWitt, CheMatch Inc. files its tax return as a member of the DeWitt
consolidated group. CheMatch, Inc. has incurred net operating losses since
inception that were funded by DeWitt. Therefore, the tax benefits generated in
1997 were utilized by DeWitt.

Management has established a full valuation allowance against the net
deferred tax assets at December 31, 1997 and 1998, since realization of these
assets in the future periods is uncertain.

The components of CheMatch, Inc.'s deferred tax assets are as follows (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1997 1998
<S> <C> <C>
Federal net operating loss carryforwards.................... $ 8 $ 21
Accruals not currently deductible........................... 2 27
Depreciation and amortization............................... (1) (2)
---- ----
9 46
Less -- Valuation allowance................................. (9) (46)
---- ----
Net deferred tax assets........................... $ -- $ --
==== ====
</TABLE>

A reconciliation of the statutory federal income tax rate to CheMatch,
Inc.'s effective income tax rate for the period from March 10, 1997 (inception),
through December 31, 1997, and for the year ended December 31, 1998, is as
follows (in thousands):

<TABLE>
<CAPTION>
MARCH 10, 1997
(INCEPTION)
THROUGH
DECEMBER 31, DECEMBER 31,
1997 1998
<S> <C> <C>
U.S. statutory rate.................................... $(39) $(37)
Adjustment to deferred tax valuation allowance......... 9 37
---- ----
$(30) $ --
==== ====
</TABLE>

F-38
<PAGE> 123
CHEMATCH, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

7. COMMITMENTS AND CONTINGENCIES:

Litigation

At certain times CheMatch, Inc. is involved in legal actions arising in the
ordinary course of business. CheMatch, Inc. currently is not engaged in any
legal proceedings that are expected to have a material adverse effect on
CheMatch, Inc.'s results of operations or financial position.

8. SIGNIFICANT CUSTOMERS:

For the year ended December 31, 1998, CheMatch, Inc.'s three leading
customers accounted for 13 percent, 12 percent and 11 percent of CheMatch,
Inc.'s revenues, respectively.

F-39
<PAGE> 124

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

, 2000

CHEMATCH.COM, INC.

5,000,000 SHARES OF COMMON STOCK

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

PROSPECTUS

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

DONALDSON, LUFKIN & JENRETTE
DEUTSCHE BANC ALEX. BROWN
SALOMON SMITH BARNEY
PAINEWEBBER INCORPORATED
DLJDIRECT INC.

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

We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of
CheMatch.com, Inc. have not changed since the date hereof.

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

Until , 2000 (25 days after the date of this prospectus), all dealers
that effect transactions in these shares of common stock, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.

- --------------------------------------------------------------------------------
<PAGE> 125

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

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

<TABLE>
<S> <C>
SEC Registration fee........................................ $ 19,734
NASD fee.................................................... $ 7,400
Nasdaq National Market initial listing fee.................. $ 95,000
Printing and engraving...................................... $ 400,000
Legal fees and expenses of the Company...................... $ 450,000
Accounting fees and expenses................................ $ 450,000
Transfer agent fees......................................... $ 3,500
Miscellaneous expenses...................................... $ 74,366
----------
Total............................................. $1,500,000
==========
</TABLE>

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

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law ("DGCL") provides that
a corporation may 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 (other than
an action by or in the right of the corporation by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Section 145 further
provides that a corporation similarly may indemnify any such person serving in
any such capacity who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or such other
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all of the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.

CheMatch's certificate of incorporation provides that indemnification shall
be to the fullest extent permitted by the DGCL for all current or former
directors or officers of CheMatch.

As permitted by the DGCL, the certificate of incorporation provides that
directors of CheMatch shall have no personal liability to CheMatch or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except (1) for any breach of the director's duty of loyalty to CheMatch or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (3) under Section 174 of the
DGCL or (4) for any transaction from which a director derived an improper
personal benefit.

II-1
<PAGE> 126

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

CheMatch has not sold any securities, registered or otherwise, within the
past three years, except as set forth below.

- On June 21, 1999, we sold 2,138,400 shares of Series A Convertible
Preferred Stock and warrants to purchase 1,603,800 shares of Series A
Convertible Preferred Stock for approximately $5 million to the Battery
Ventures Entities.

- On October 6, 1999, we sold 191,080 shares of common stock for
approximately $1 million to Computer Sciences Corporation in conjunction
with our entering into a strategic alliance.

- On November 24, 1999, we sold 636,943 shares of common stock for $6,369
to E.I. duPont de Nemours and Company in conjunction with our entering
into a strategic alliance. Additionally, duPont purchased 891,716 shares
of Series C Convertible Preferred Stock and warrants to purchase 668,787
shares of Series C Convertible Preferred Stock for approximately $7
million.

- On November 24, 1999, we sold an additional 2,611,453 shares of Series C
Convertible Preferred Stock and warrants to purchase 1,958,591 shares of
Series C Convertible Preferred Stock for approximately $20.5 million to
the DLJ Entities, the Battery Ventures Entities, Marquette Venture
Partners III, L.P., Stolt-Nielsen Transportation Group Ltd., Millennium
Holdings Inc., Don Churchman, Chris Davis, Roger Leedy, Larry McAfee,
Carl McCutcheon, Jim Rahe, John Sherman and Gerry Elias.

- On February 11, 2000, we sold 153,218 shares of our common stock to
William Heinemann, Inc., a subsidiary of Reed Elsevier plc, for
approximately $1.5 million.

- On February 14, 2000, we sold 306,435 shares of our common stock to
General Electric Company for $3,064 and a promissory note in aggregate
principal amount of approximately $2 million. The promissory note, which
bears interest at the rate of eight percent per year, is payable on or
before December 31, 2001.

- On February 14, 2000, we sold 204,291 shares of our common stock to Bayer
AG for approximately $2 million.

- On February 16, 2000, we sold 61,288 shares of our common stock to
TownsendTarnell, Inc. for $613 and a promissory note in aggregate
principal amount of approximately $599,000. The promissory note, which
bears interest at the rate of eight percent per year, is payable in
twelve consecutive monthly installments, commencing February 1, 2000.

There were no underwriters involved in connection with any transaction set
forth above. The issuances of the securities described above were deemed to be
exempt from registration pursuant to Section 4(2) of the Securities Act and
Regulation D promulgated thereunder as a transaction by an issuer not involving
a public offering. In all of such transactions, the recipients of securities
represented their intention to acquire the securities for investment purposes
only and not with a view to or for sale in connection with any distribution
thereof, and appropriate legends were affixed to the securities issued.

II-2
<PAGE> 127

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<C> <S>
1.1*** -- Form of Underwriting Agreement
2.1* -- Agreement and Plan of Reorganization, dated June 21,
1999, by and among CheMatch, PetroChemNet, Inc., PCN
Merger Sub, Inc. and Earl Armstrong, Teresa Acosta,
William Barry and Fred Cook
3.1* -- Amended and Restated Certificate of Incorporation
3.2* -- Amended and Restated Bylaws
4.1** -- Form of Common Stock Certificate
5.1*** -- Opinion of Vinson & Elkins L.L.P.
10.1* -- 1997 Employee, Director and Consultant Stock Option Plan
10.2* -- 1999 Stock Plan
10.3* -- Amended and Restated Management Incentive Agreement,
dated as of February 8, 2000, by and among CheMatch and
Carl McCutcheon, Lawrance McAfee, John Bohn and Karen
Morgan.
10.4* -- Employment Agreement, dated June 21, 1999, by and between
CheMatch and Carl McCutcheon
10.5* -- Letter of Employment, dated September 7, 1999, by and
between CheMatch and Lawrance McAfee
10.6* -- Employment Agreement, dated June 1, 1999, by and between
CheMatch and Fred Cook
10.7* -- Employment Agreement, dated May 1, 1999, by and between
CheMatch and John Bohn
10.8* -- Consultant and Release Agreement, dated January 26, 2000,
by and between CheMatch and John Bohn
10.9* -- Employment Agreement, dated May 1, 1999, by and between
CheMatch and Karen Morgan
10.10* -- Consultant and Release Agreement, dated January 26, 2000,
by and between CheMatch and Karen Morgan
10.11* -- Form of Indemnification Agreement
10.12* -- Amended and Restated Registration Rights Agreement dated
as of November 24, 1999
10.13* -- Alliance Agreement, dated June 21, 1999 between the
CheMatch and DeWitt & Company, Incorporated
10.14* -- Letter Agreement relating to a strategic alliance, dated
September 30, 1999, by and between CheMatch and Computer
Sciences Corporation
10.15* -- Letter Agreement relating to a strategic alliance, dated
November 11, 1999, by and between CheMatch and E.I.
duPont de Nemours and Company
10.16* -- Letter Agreement relating to a strategic alliance, dated
January 19, 2000, by and between CheMatch and Bayer AG
10.17* -- Letter Agreement relating to a strategic alliance, dated
January 22, 2000, by and between CheMatch and Muehlstein
Holding Corporation
10.18* -- Master Outsourced Services Agreement, dated January 27,
2000, by and between CheMatch and eCredit.com, Inc.
10.19* -- Letter Agreement relating to a strategic alliance, dated
February 2, 2000, by and between CheMatch and William
Heinemann, Inc.
10.20* -- Strategic Alliance Agreement, dated February 7, 2000, by
and between CheMatch and Optimum Logistics Ltd.
</TABLE>

II-3
<PAGE> 128

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<C> <S>
10.21* -- Letter Agreement relating to a strategic alliance, dated
February 11, 2000, by and between CheMatch and General
Electric Company
10.22* -- Letter Agreement relating to a strategic alliance, dated
February 11, 2000, by and between CheMatch and
TownsendTarnell, Inc.
10.23** -- Amendment dated March 20, 2000 to letter agreement
between CheMatch and E.I. duPont de Nemours and Company
16.1* -- Letter regarding change in certifying accountant
21.1* -- Subsidiaries of the Company
23.1** -- Consent of Arthur Andersen LLP, independent public
accountants
23.2*** -- Consent of Vinson & Elkins L.L.P. (included in Exhibit
5.1).
24.1 -- Power of Attorney (included on the signature page of this
registration statement)
27* -- Financial Data Schedules
</TABLE>

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

* Previously filed.

** Filed herewith.

*** To be filed by amendment.

(B) FINANCIAL STATEMENT SCHEDULE

All schedules are omitted because they are not applicable or because the
required information is contained in the Financial Statements or Notes thereto.

ITEM 17. UNDERTAKINGS

The Registrant hereby undertakes:

(a) 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 described
in Item 14, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(b) To provide to the underwriter(s) at the closing specified in the
underwriting agreements, certificates in such denominations and registered
in such names as required by the underwriter(s) to permit prompt delivery
to each purchaser.

(c) For purpose 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
the 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.

(d) 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-4
<PAGE> 129

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on May 16, 2000.

CheMatch.com, Inc.

By: /s/ CARL D. MCCUTCHEON
----------------------------------
Carl D. McCutcheon
Chairman, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on May 16, 2000:

<TABLE>
<CAPTION>
SIGNATURE TITLE
<C> <S> <C>
* Chairman, President and Chief
- ----------------------------------------------------- Executive Officer
Carl D. McCutcheon (Principal Executive
Officer)

/s/ LAWRANCE W. MCAFEE Executive Vice President,
- ----------------------------------------------------- Chief Financial Officer,
Lawrance W. McAfee Secretary and Director
(Principal Financial
Officer)

* Vice President -- Controller
- ----------------------------------------------------- (Principal Accounting
Scott R. Creasman Officer)

* Director
- -----------------------------------------------------
Earl H. Armstrong

* Director
- -----------------------------------------------------
Bob G. Gower

* Director
- -----------------------------------------------------
Janet A. Hickey

* Director
- -----------------------------------------------------
James Saviano

* Director
- -----------------------------------------------------
R. David Tabors

*By: /s/ LAWRANCE W. MCAFEE
-----------------------------------------------
Lawrance W. McAfee
Attorney-in-fact
</TABLE>

II-5
<PAGE> 130

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<C> <S>
1.1*** -- Form of Underwriting Agreement
2.1* -- Agreement and Plan of Reorganization, dated June 21,
1999, by and among CheMatch, PetroChemNet, Inc., PCN
Merger Sub, Inc. and Earl Armstrong, Teresa Acosta,
William Barry and Fred Cook
3.1* -- Amended and Restated Certificate of Incorporation
3.2* -- Amended and Restated Bylaws
4.1** -- Form of Common Stock Certificate
5.1*** -- Opinion of Vinson & Elkins L.L.P.
10.1* -- 1997 Employee, Director and Consultant Stock Option Plan
10.2* -- 1999 Stock Plan
10.3* -- Amended and Restated Management Incentive Agreement,
dated as of February 8, 2000, by and among CheMatch and
Carl McCutcheon, Lawrance McAfee, John Bohn and Karen
Morgan.
10.4* -- Employment Agreement, dated June 21, 1999, by and between
CheMatch and Carl McCutcheon
10.5* -- Letter of Employment, dated September 7, 1999, by and
between CheMatch and Lawrance McAfee
10.6* -- Employment Agreement, dated June 1, 1999, by and between
CheMatch and Fred Cook
10.7* -- Employment Agreement, dated May 1, 1999, by and between
CheMatch and John Bohn
10.8* -- Consultant and Release Agreement, dated January 26, 2000,
by and between CheMatch and John Bohn
10.9* -- Employment Agreement, dated May 1, 1999, by and between
CheMatch and Karen Morgan
10.10* -- Consultant and Release Agreement dated January 26, 2000,
by and between CheMatch and Karen Morgan
10.11* -- Form of Indemnification Agreement
10.12* -- Amended and Restated Registration Rights Agreement dated
as of November 24, 1999
10.13* -- Alliance Agreement, dated June 21, 1999 between the
CheMatch and DeWitt & Company, Incorporated
10.14* -- Letter Agreement relating to a strategic alliance, dated
September 30, 1999, by and between CheMatch and Computer
Sciences Corporation
10.15* -- Letter Agreement relating to a strategic alliance, dated
November 11, 1999, by and between CheMatch and E.I.
duPont de Nemours and Company
10.16* -- Letter Agreement relating to a strategic alliance, dated
January 19, 2000, by and between CheMatch and Bayer AG
10.17* -- Letter Agreement relating to a strategic alliance, dated
January 22, 2000, by and between CheMatch and Muehlstein
Holding Corporation
10.18* -- Master Outsourced Services Agreement, dated January 27,
2000, by and between CheMatch and eCredit.com, Inc.
10.19* -- Letter Agreement relating to a strategic alliance, dated
February 2, 2000, by and between CheMatch and William
Heinemann, Inc.
10.20* -- Strategic Alliance Agreement, dated February 7, 2000, by
and between CheMatch and Optimum Logistics Ltd.
</TABLE>

<PAGE> 131

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

* Previously filed.

** Filed herewith.

*** To be filed by amendment.

<PAGE> 1
EXHIBIT 4.1

FORM OF COMMON STOCK CERTIFICATE
===============================================================================
NUMBER SHARES
CHEM
------- -----
[CHEMATCH.COM LOGO]

SEE REVERSE FOR STATEMENTS CUSIP 163571 10 2
RELATING TO RIGHTS, PREFERENCES, SEE REVERSE FOR CERTAIN DEFINITIONS
PRIVILEGES AND RESTRICTIONS, IF ANY

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
-------------------------------------------------------------------

THIS CERTIFIES THAT

is the record holder of

-------------------------------------------------------------------
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK,
$0.01 PAR VALUE PER SHARE, OF

=============== CHEMATCH.COM, INC. ===============

transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized Attorney upon surrender of this certificate properly
endorsed. This certificate is not valid until countersigned by the Transfer
Agent and Registrar.

WITNESS the facsimile signatures of its duly authorized officers.

Dated:
[SEAL]
/s/ LARRY W. McAFEE /s/ CARL D. McCUTCHEON
CHIEF FINANCIAL OFFICER AND SECRETARY CHAIRMAN AND CHIEF EXECUTIVE OFFICER

COUNTERSIGNED AND REGISTERED:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
(New York, New York)
Transfer Agent
and Registrar

By
Authorized Signature
================================================================================

<PAGE> 2
CHEMATCH.COM, INC.

The Corporation will furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof, and the qualifications, limitations and restrictions of such
preferences and/or rights. Such statement may be obtained by a request in
writing to the Secretary of the Corporation at its corporate headquarters.

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, OR DESTROYED,
THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE.

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

<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT- Custodian
TEN ENT - as tenants by the entities ------------ --------------
JT TEN - as joint tenants with right (Cust) (Minor)
of survivorship and not as
tenants in common under Uniform Gifts to Minors

Act
-----------------------------------
(State)

UNIF TRF MIN ACT- Custodian (until age ___)
------------
(Cust)

under Uniform Transfers
-------------
(Minor)

to Minors Act
-------------------------
(State)

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

For Value Received, _____________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------

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

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

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

- ------------------------------------------------------------------------------- Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________ Attorney,
to transfer the said stock on the books of the within named Corporation with full
power of substitution in the premises.

Dated
-------------------------------- ---------------------------------------
NOTICE: THE SIGNATURE(S) TO THIS
In presence of ASSIGNMENT MUST CORRESPOND WITH THE
NAME(S) AS WRITTEN UPON THE FACE OF THIS
CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE
WHATSOEVER.

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

Signature(s) Guaranteed

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

<PAGE> 1

EXHIBIT 10.23

AMENDMENT TO AGREEMENT

WHEREAS, CheMatch.com, Inc. (formerly known as PetroChemNet Holdings,
Inc.), hereinafter "PCN, CheMatch, or the Company" and E.I. duPont de Nemours
and Company, hereinafter "DuPont", entered into a certain Strategic Alliance
Agreement dated November 11, 1999; and

WHEREAS, CheMatch and DuPont have agreed to certain amendments and
clarifications to such Strategic Alliance Agreement;

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, CheMatch and DuPont agree as
follows:

1. Paragraph 2(b) of the Strategic Alliance Agreement is hereby deleted in
its entirety and the following substituted therefor:

(b) DuPont will work with CheMatch to add those potential
customers agreed by the parties to the customers using the
CheMatch platform of CheMatch for trading products. For each
such customer up to a maximum of 20 customers, that completes
at least five (5) transactions with parties other than DuPont
on the CheMatch platform prior to December 31, 2000 at the
standard rates charged for the use of the CheMatch platform,
DuPont shall earn a commission of $100,000. In lieu of a cash
payment , DuPont will use such commission to purchase a number
of shares of Common Stock of CheMatch equal to such $100,000,
divided by the Fair Market Value per share of Common Stock.
Additionally, for each such customer that completes at least
four (4) transactions or transacts notional value equal to or
greater than $3,000,000 in a minimum of two (2) transactions
(including auctions or reverse auctions) with DuPont prior to
December 31, 2000, at the standard rates charged for the use
of the CheMatch platform, DuPont will earn a commission of
$50,000. In lieu of a cash payment, DuPont will use such
commission to purchase a number of shares of Common Stock of
CheMatch equal to such $50,000, divided by the Fair Market
Value per share of Common Stock. For the purposes of this
paragraph 2(b), "Fair Market Value" shall mean (i) the price
per share paid for the Series C Preferred Stock until the date
120 days from 1 December 1999, or (ii) thereafter, the per
share price based on the most recent transaction value or
appraisal, if CheMatch has not completed its initial public
offering, or if CheMatch has completed its initial public
offering, the closing price of CheMatch's Common Stock on the
date of the fourth trade or the date of the transacted
notional value is equal to or greater than $3,000,000 in a
minimum of two transactions meeting the conditions set forth
above. Provided that, in no event shall the commissions earned
pursuant to this paragraph exceed in the aggregate $2,000,000,
nor the total of Common Stock of CheMatch owned by DuPont
exceed 10% of the "fully diluted" common stock as described in
paragraph 2(c) below.

<PAGE> 2

2. Except as amended hereby, the Strategic Alliance Agreement dated
November 11, 1999 by and between CheMatch and DuPont remain in full
force and effect.

ACCEPTED AND AGREED this 20th day of March, 2000.

CHEMATCH.COM, INC. E. I. DUPONT DENEMOURS AND CO.

By: /s/ Fred B. Cook By: /s/ S.A. Hamdan
-------------------------------- ---------------------------------
Name: Fred B. Cook Name: S.A. Hamdan
Title: Senior Vice President Title: Director

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.

ARTHUR ANDERSEN LLP

Houston, Texas
May 15, 2000