<PAGE>

================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                ----------------
                                    FORM 10-K
                                ----------------

(MARK ONE)

 [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       OR

 [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
        EXCHANGE ACT OF 1934

              FOR THE TRANSITION PERIOD FROM ________ TO ________.


                         COMMISSION FILE NUMBER 00024865

                           NEWGEN RESULTS CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

                DELAWARE                                     33-0604378
    (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
     INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)

   12680 HIGH BLUFF DRIVE, SUITE 300
         SAN DIEGO, CALIFORNIA                                  92130
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)


       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (858) 481-7545

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                  COMMON STOCK
                                (TITLE OF CLASS)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
================================================================================

<PAGE>


    The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 15, 2000 was $57,828,113.*

    The number of shares outstanding of the registrant's Common Stock was
10,144,304 as of March 15, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

    Portions of registrant's Definitive Proxy Statement to be filed with the
Commission pursuant to Regulation 14A in connection with the registrant's 2000
Annual Meeting are incorporated herein by reference into Part III of this
Report. Such proxy statement will be filed with the Securities and Exchange
Commission no later than 120 days after the registrant's fiscal year ended
December 31, 1999.

    Certain Exhibits filed with the registrant's (i) Registration Statement on
Form S-1 (Registration No. 333-62703), as amended; (ii) Quarterly Report on Form
10-Q for the quarter ended June 30, 1999; (iii) Current Report on Form 8-K dated
November 1, 1999; (iv) Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999; and (v) Current Report on Form 8-K dated December 16, 1999,
as amended on February 14, 2000, are incorporated by reference into Part IV of
this Report.








    * Excludes the Common Stock held by executive officers, directors and
stockholders whose ownership exceeds 5% of the Common Stock outstanding at March
15, 2000. Exclusion of such shares should not be construed to indicate that any
such person possesses the power, direct or indirect, to direct or cause the
direction of the management or policies of the registrant or that such person is
controlled by or under common control with the registrant.


<PAGE>

                           NEWGEN RESULTS CORPORATION

                                    FORM 10-K
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                        PAGE
                                                                                                        ----
<S>             <C>                                                                                     <C>
                                                       PART I
Item 1.         Business..............................................................................     1
                Introduction..........................................................................     1
                Industry Background...................................................................     1
                The Newgen Solution...................................................................     3
                Growth Strategy.......................................................................     4
                Services..............................................................................     6
                Sales and Marketing...................................................................     9
                Operations............................................................................    10
                Technology............................................................................    11
                Competition...........................................................................    12
                Telemarketing Regulations.............................................................    13
                Employees.............................................................................    13
                Executive Officers....................................................................    13
                Risk Factors Related to Our Business..................................................    15
Item 2.         Properties............................................................................    26
Item 3.         Legal Proceedings.....................................................................    26
Item 4.         Submission of Matters to a Vote of Security Holders...................................    26

                                                       PART II
Item 5.         Market for Registrant's Common Stock and Related Stockholder Matters..................    27
Item 6.         Selected Financial Data...............................................................    27
Item 7.         Management's Discussion and Analysis of Financial Condition and Results of
                Operations............................................................................    28
Item 7A.        Quantitative and Qualitative Disclosure about Market Risk.............................    33
Item 8.         Financial Statements..................................................................    33
Item 9.         Changes In and Disagreements With Accountants on Accounting and Financial
                Disclosure............................................................................    33
                                                      PART III
Item 10.        Directors and Executive Officers of the Registrant....................................    34
Item 11.        Executive Compensation................................................................    34
Item 12.        Security Ownership of Certain Beneficial Owners and Management........................    34
Item 13.        Certain Relationships and Related Transactions........................................    34
                                                       PART IV
Item 14.        Exhibits, Financial Statement Schedules and Reports on Form 8-K.......................    35
                Signatures............................................................................    38
</TABLE>


                                   TRADEMARKS

      Newgen-Registered Trademark-, Newgen Results-Registered Trademark-,
ROAD-TM-, Ultimate Service-TM- and Carabunga.com-TM- are our trademarks. All
other trademarks, servicemarks and/or tradenames appearing in this document
are the property of their respective holders.

<PAGE>

                                     PART I

ITEM 1.  BUSINESS

      YOU SHOULD READ THE FOLLOWING TOGETHER WITH THE MORE DETAILED
INFORMATION REGARDING OUR COMPANY, OUR COMMON STOCK AND OUR FINANCIAL
STATEMENTS AND NOTES TO THOSE STATEMENTS APPEARING ELSWHERE IN THIS DOCUMENT
OR INCORPORATED HERE BY REFERENCE. EXCEPT FOR THE HISTORICAL INFORMATION
CONTAINED HEREIN, THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR FUTURE RESULTS COULD
DIFFER MATERIALLY FROM THOSE DISCUSSED HERE. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT SPECIFICALLY LIMITED TO
THOSE DESCRIBED BELOW IN "RISK FACTORS RELATED TO OUR BUSINESS" AND ELSEWHERE
IN THIS FORM 10-K. WE ASSUME NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING
STATEMENTS.

      We were incorporated in California in February 1994 and we reincorporated
in Delaware in December 1998.

INTRODUCTION

      Newgen provides customized, outsourced database management, direct
marketing and related services for automobile dealerships' service departments
and automobile manufacturers. We believe that the combination of our breadth of
services, our customer base and our technological innovations make us among the
leaders in the industry. We combine our expertise in database marketing and
customer retention services, our focus on customer service and our in-depth
knowledge of automobile service department operations to provide highly targeted
and customized solutions. Our RESULTS Program employs efficient and
cost-effective technology to enable dealerships to increase their number of
service department customers as well as revenues per customer. In addition, we
believe our services improve the operations and processes of a dealership's
service department thereby differentiating the dealership from its competition
and creating enhanced customer satisfaction and loyalty. We have grown our
customer base from 177 dealerships at December 31, 1995 to 5,175 dealerships at
December 31, 1999, notwithstanding competition from a number of competitors,
including two companies with significantly greater resources.

INDUSTRY BACKGROUND

      Increasing competition is driving businesses to enhance their market
position by strengthening relationships with existing customers and targeting
new markets and customers. While technological advances, such as the Internet,
are making information more accessible and less expensive, the marketing costs
to reach and retain customers is increasing. As a result, businesses are trying
to use their marketing resources more efficiently and effectively to drive
customer retention and loyalty through the use of specialized information
products and data management services. Many businesses, however, lack the
technology infrastructure or expertise to implement these new marketing methods.
Businesses are increasingly electing to outsource key processes to service
providers that are able to apply advanced database systems to capture, process
and store customer and market information, and use this experience to provide
targeted and effective services.

      The automobile industry is relatively mature. According to the National
Automobile Dealers Association ("NADA"), the number of automobiles sold annually
by dealerships has not grown significantly between 1987 and 1998. A number of
industry and market trends, however, are affecting the future structure of the
industry. Over the next five years, the number of automobile dealerships in the
United States is expected to decrease, reflecting the consolidation of the
industry into fewer and larger dealerships. In addition, margins on sales of new
vehicles are decreasing because of the emergence of megadealers and
Internet-based comparison shopping. According to the NADA, the average
dealership realized pre-tax income margins of only 1.74% in 1998. We believe
that the emergence of megadealers resulting from the industry's consolidation,
together with emerging sales and marketing channels such as the Internet, will
lead to greater professionalization of management at dealerships, and
correspondingly, more sophisticated approaches to increasing dealership revenues
and margins.

      Automobile dealerships historically have focused on sales of automobiles,
viewing customer retention for service-related revenue as being secondary.
Customer dissatisfaction with dealership service combined with increased
competition from other service outlets, such as Sears Auto Center or Jiffy Lube,
have caused


                                       1.
<PAGE>

consumers to avoid returning to dealerships for vehicle service or
maintenance. Based on our experience, we believe that dealerships perform
only a small portion of required maintenance on the automobiles they sell.
The balance of maintenance is performed elsewhere. Moreover, those that do
return for service historically do not always receive satisfactory customer
service. Dealerships provide only a small portion of service on all
automobiles in the United States. For example, we believe that U.S. consumers
spend approximately $250 billion annually to service and repair their
vehicles, but according to the NADA, in 1998 dealerships provided only $64
billion, or approximately 25%, of those services. Not only are dealerships
performing a small portion of all service on automobiles, but their revenue
from warranty-related service is declining. The reduction in revenues from
warranty-related service is due to increased scrutiny of warranty claims and
higher quality manufacturing of automobiles. As a result, dealerships are
being forced to rely more on customer pay labor and parts sales in order to
replace lost warranty-related service revenues.

      Dealerships are realizing that their parts and service departments
represent an opportunity for increased revenues and profits. More importantly,
despite declining market share of service related spending by consumers at
dealerships, the percentage of dealership profits generated from the service and
parts department has increased from approximately 16% in 1985 to approximately
47% in 1998. Based on these trends, we believe that dealerships will increase
the portion of their marketing budgets dedicated to automobile service
department customer retention and loyalty programs.

      Typically, automobile dealerships have used general mass media
advertisements, bulk mail coupons or generic reminder notices to promote their
services. However, the effectiveness of these solicitation techniques is limited
for several reasons. First, because these forms of marketing often involve
untargeted mailings, many solicitations are sent to individuals who no longer
own their vehicle. In addition, these general marketing solicitations lack the
impact associated with a more focused marketing program. Furthermore, these
solicitation techniques have limited data gathering and storing capabilities and
do not allow dealerships to receive customer feedback, or monitor customer
response. Because of the deficiencies of these traditional marketing methods,
such methods also tend to be expensive when compared to the amount of revenue
they generate for dealerships. Some manufacturers have attempted to support
their dealerships through manufacturer sponsored marketing. However, many
manufacturers do not have specific information about dealership customers nor do
they track maintenance activity at the dealerships. Consequently, many
manufacturers are unable to develop effective nationwide programs to encourage
customers to return to dealerships for service.

      The proper implementation of a targeted marketing campaign promoting
automobile service is highly complex. Maintenance schedules vary immensely from
vehicle to vehicle. At a typical Ford dealership, for example, there may be as
many as 2,500 different maintenance schedule combinations based on a vehicle's
model, year, engine and other characteristics. Matching the correct maintenance
schedule to each vehicle, while taking into account other factors such as the
owner's driving habits, service history of the car, seasonal and regional
variations, and any special maintenance programs offered by the dealership,
requires complex algorithms and advanced data management systems. Adding to this
complexity, dealerships need to manage and update their databases of service
customers in order to eliminate customers who should not be solicited and to
focus on customers who are most likely to return for service. Ensuring that the
right maintenance reminder gets to the right person at the right time requires
sophisticated database marketing techniques and the use of a system that
continuously updates customer data and monitors the results of the marketing
campaign.

      While advances in technology and information processing now permit
dealerships to engage in highly targeted marketing initiatives, these
initiatives are generally dependent upon complex and costly data management
processes. For example, dealerships require sophisticated systems that enable
the purification of databases that contain old or inaccurate data to effectively
market to customers. Dealerships are increasingly focusing on their core
competency of selling automobiles and outsourcing to experts the development and
implementation of complex processes that support and enhance their business
objectives. Thus, automobile dealerships need outsourced services that employ
efficient and cost-effective technology to increase the number of service
department customers per dealership and dealership revenues per customer. These
services will also improve the operations and processes of the dealership
thereby differentiating the dealership from its competition and creating
increased customer satisfaction and loyalty.


                                       2.
<PAGE>

THE NEWGEN SOLUTION

      Newgen provides customized, outsourced database management, direct
marketing and related services for automobile dealerships' service departments
and automobile manufacturers. Our expertise in both database marketing and
customer retention services, as well as our in-depth knowledge of automobile
service department operations enables us to provide comprehensive and highly
targeted marketing and service solutions.

      Our RESULTS Program promotes automobile service business from a
dealership's customer base by using direct marketing campaigns involving direct
mail and outbound teleservice follow-up. We implement our RESULTS Program for
automobile dealerships using a dealership's own customer and transaction data
that we process and purify to ensure the data is current and relevant. After
downloading a dealership's database into our system, we combine the data with
maintenance schedule databases and our proprietary databases and algorithms to
develop customized solicitations targeting service visits. Our system tracks
every dealership customer in order to update the database appropriately
throughout the solicitation process and to provide feedback to the dealership.
Our services are designed to:

      -  attract more service customers to dealerships from the dealerships'
         customer base;

      -  attract more sales customers to dealerships from the dealerships'
         customer base;

      -  increase dealership revenues per customer;

      -  promote customer loyalty;

      -  increase customer satisfaction;

      -  differentiate the dealership from its competition through improved
         operations and processes; and

      -  provide dealership customers with the benefits of a safer vehicle with
         increased resale value.

      Our studies indicate that over the course of a year, customers we solicit
for a dealership will visit that dealership more than three times as often, and
spend more than two and one-half times as much on service, compared to customers
with similar demographic characteristics not solicited by us. Furthermore,
customers solicited by us are more than three times more likely to purchase a
new vehicle from the dealership compared to unsolicited customers.

      Our RESULTS Program significantly reduces untargeted solicitations and
unnecessary expenses. This, in turn, increases a dealership's return on
investment compared with untargeted customer retention programs. As a result, we
estimate that approximately 25% to 30% of dealership customers solicited by us
return to the dealership for vehicle service. This compares very favorably with
response rates for direct mail marketing campaigns, which typically range
between 1% and 3%. Through our teleservice department, we are able to forward
dealership customer concerns to the dealership before those customers defect to
alternative service providers. Dealerships can address these concerns and
significantly increase the satisfaction of their customers. In addition, we
provide dealerships with comprehensive monthly management reports that track
response rates and spending habits of solicited customers. Dealerships can
therefore measure the quantifiable financial and customer retention benefits
attributable to our services. We have an extensive customer support
infrastructure to provide assistance to dealership management in understanding
the benefits of our services. We also advise dealerships on methods of
customized solicitation, such as promotions, coupons and special targeted
programs, and work closely with our customers to accommodate their individual
requests and needs. In providing all of these services, we regularly contact
most of our customers either by telephone or at their facility.

      We have recently introduced a number of new services that utilize our
expertise in automobile service department operations and complement the RESULTS
Program. Our Reservations Service provides dealerships with a solution for the
challenges of scheduling service appointments with dealership customers and,
subsequently, loading the service department for maximum efficiency. Our
Connections Service provides a survey tool, so that dealerships may receive
feedback from their customers. These services, together with others


                                       3.
<PAGE>

in development, evidence our ability to leverage our existing database marketing
and customer retention expertise to provide a range of additional outsourced
services to dealerships.

      We have also recently incorporated two wholly-owned subsidiaries to
provide additional services to automobile dealerships and manufacturers. The
first, Newgen Management Services, Inc. ("Newgen Management Services"),
provides outsourced management for dealership service departments, under the
Ultimate Service brand. Many dealerships view the operation of the service
department as a difficult process, and want a third party to assist them in
managing their fixed operation. Newgen Management Services provides two
individuals to dealerships to direct the operations of the dealership parts
and service operation. These employees implement a number of processes and
procedures at the dealership, including the utilization of the RESULTS
Program and Reservations Service. Newgen Management Services recently
received an endorsement from the Dealer Development division of Ford Motor
Company, whereby Newgen Management will provide Ultimate Service to twenty
dealerships.

      Our second new subsidiary, Carabunga.com, Inc., utilizes the Internet as a
marketing tool for dealerships. It is intended to be the first automotive
dealership Internet portal that offers one-to-one marketing programs in the
industry. The Internet site will include three value-added products for
dealerships and manufacturers. These products are discussed further below in
"Services - Carabunga.com."

      We maintain a close working and strategic relationship with Ford. We
strongly believe that our work with Ford supports our own marketing and product
development efforts as well as our credibility with dealerships. Ford also has
acted as a key reference account in our effort to develop relationships with
other manufacturers. The key elements of our relationship with Ford include:

      -  marketing programs developed jointly by us and Ford for deployment to
         Ford dealerships nationwide;

      -  private labeling by Ford of our database marketing services as the
         Quality Care Maintenance Reminder System; and o a consulting engagement
         which puts us in contact with Ford dealerships.

      Our Consulting Division leverages its expertise in automobile service
department operations to develop and implement new techniques and programs
that enable dealerships to grow their business, streamline inefficient
processes and more effectively market their services. We believe that our
consulting services enhance our overall understanding of dealership needs and
processes, and also reinforce our business relationship with such
dealerships. In addition, the Consulting Division is a key generator of new
service ideas that can be deployed throughout our dealership base. For
example, our Pricing Center Program was developed by our Consulting Division
and is now implemented throughout our Ford dealership base. We expect to
transition all of our consultants to Newgen Management Services through
fiscal year 2000.

GROWTH STRATEGY

      Newgen's objective is to be the leading provider of customized, outsourced
database management, direct marketing and related services for automobile
dealerships and manufacturers. Using our sophisticated database management
capabilities, personalized customer service and in-depth knowledge of automobile
service department operations, we have quickly and effectively penetrated the
automobile dealership and manufacturer industry. Our growth strategy consists of
the following key elements:

      PROVIDE SERVICES TO MORE AUTOMOBILE DEALERSHIPS. We have experienced
significant growth in the number of dealerships we service. Our customer base
has grown from 177 dealerships at December 31, 1995 to 5,175 dealerships at
December 31, 1999. Our strategy to increase our share of the automobile
dealership market consists of the following elements:

      -  increasing the size of our direct field sales force;

      -  more actively marketing our services to dealerships;


                                       4.
<PAGE>

      -  continuing to expand our field force of customer satisfaction
         representatives to service and sell to our dealership base;

      -  seeking to establish additional manufacturer relationships using the
         Ford relationship as a model;

      -  lengthening the term of our dealership contracts; and

      -  acquiring complimentary businesses or technologies.

      INCREASE THE NUMBER OF ACTIVE NAMES PER AUTOMOBILE DEALERSHIP. Our
revenues for the RESULTS Program are based on a monthly fee per active name in
our database. As a result, dealerships generally control the number of active
names in our database in order to control their expenses. Currently, we solicit
approximately 15% of our total database, and we believe that this is only 40% of
our potential customers. We seek to increase the number of active names per
dealership by demonstrating a tangible return on investment to dealerships
resulting from our programs. As we further demonstrate the economic value of our
services to our customer base, we believe dealerships are likely to increase the
number of active names that we solicit. We are focused on developing tools and
sales techniques designed to emphasize the tangible financial benefits of our
services.

      OFFER A BROAD RANGE OF CUSTOMIZED DIRECT MARKETING SERVICES TO AUTOMOBILE
DEALERSHIPS. We intend to cross-sell new services to satisfied dealerships, as
well as to sell broader lines of services to new customers. For example, we
recently introduced two new targeted direct marketing programs:

      -  Reservations - designed to improve the efficiency of service department
         appointment scheduling and shop loading; and

      -  Connections - a survey tool that enables customers to provide feedback
         to dealerships through a variety of methods.

In addition, we are currently developing several other innovative services and
programs. For example, as detailed in other sections herein, our Carabunga.com
subsidiary is developing a web-based marketing portal for dealerships.

      UTILIZE THE INTERNET AS A DELIVERY PLATFORM FOR OUR SERVICES. We
believe that the Internet may provide a compelling platform to deliver our
database management and direct marketing services for automobile dealerships
and manufacturers. We have begun to develop a number of on-line services that
complement and extend the capabilities of our current services. We believe
that e-mail may serve as an effective mechanism for delivering service
reminder notices. We have been collecting e-mail addresses through our
dealership customer contacts and are delivering our RESULTS Program using
e-mail for those customers who have expressed a preference for e-mail. Our
Connections Service will allow dealers to survey their customers via e-mail.
We recently introduced our Reservations Service, which we intend to make
accessible over the Internet such that dealership customers will be able to
schedule service appointments on-line. We have recently developed ROAD, a
service that is designed to allow dealerships to access, manipulate and query
our database and receive our management reports over the Internet. We intend
to continue to actively develop services that leverage the Internet's
advantages as an information and content delivery platform.

                                       5.
<PAGE>

      ACQUIRE COMPLIMENTARY BUSINESSES AND/OR TECHNOLOGIES. We may seek to
expand our operations and use our technology and process expertise by
investing in or acquiring businesses or technologies complementary to our
existing operations. For example, on November 30, 1999, we acquired Computer
Care (a New York general partnership and division of the Dealer Services
Group of Automatic Data Processing, Inc. ("ADP")). Computer Care has over
2,000 customers and manufacturer relationships with Volkswagen, Audi, Jaguar,
Volvo, Hyundai and Kia. The average Computer Care dealership spends
approximately $450 per month, compared to approximately $1,500 per month for
the average Newgen dealership. Over time, we hope to change the spending
habits of the former Computer Care customers to more closely mirror Newgen
customers. We also hope to sell these customers our additional products and
services. We cannot assure you that any future acquisitions will be completed
or that, if completed, any such acquisitions will be effectively integrated
with our operations. For a discussion of risks associated with our recent
acquisition and future acquisitions, see "Risk Factors Related to Our
Business- We May Engage in Future Acquisitions that Dilute Our Stockholders,
Cause Us to Incur Debt and Assume Contingent Liabilities."

SERVICES

      Newgen's services include (1) the RESULTS Program, (2) Reservations
Service, (3) Connections Service, (4) Ultimate Service, and (5) Carabunga.com.
All of our services utilize our expertise in both database marketing and
customer retention services, as well as our knowledge of automobile service
department operations.

      RESULTS PROGRAM

      The RESULTS Program promotes automobile service business from a
dealership's own customer base by using direct marketing campaigns involving
direct mailing and outbound teleservice follow-up. We implement our RESULTS
Program on behalf of dealerships using dealership customer and transaction data
that we process and purify to ensure that the data is current and relevant. We
enhance the dealership's database by combining it with maintenance schedule
databases and our own proprietary databases and algorithms to develop customized
solicitations targeting service visits. Our closed-loop customer retention
system tracks the status of each dealership customer to enable targeted and
personalized interaction and follow-up with the customer at every phase of the
solicitation process. We monitor results daily and provide dealerships with
comprehensive monthly management reports that track maintenance, response rates
and spending habits of solicited customers.

      DATABASE UPDATING, MAINTENANCE AND INTEGRATION. Our RESULTS Program is
based on sophisticated data management. The first phase of the RESULTS Program
is a download of a dealership's database of customer transaction data onto our
database management system. This initial data download is comprehensive, but
often inaccurate. To ensure our database is current, we also download customer
transaction data each time a dealership customer comes into the dealership. We
use this data to update the information and history relating to a particular
customer or vehicle. This data is compiled to develop a maintenance schedule for
each vehicle in the database. In order to maximize response rates, we purify
each dealership's initial database by eliminating:


      -  dealership employees;

      -  fleet customers performing their own maintenance;

      -  dealership trades;

      -  database records with incomplete names, addresses, or missing or
         incomplete vehicle identification numbers; and

      -  other vehicles that are inappropriate for dealership servicing (such as
         a Dodge purchased at a Toyota dealership).

      CUSTOM DATA MANAGEMENT. We use the purified, enhanced database and our
industry knowledge and expertise to design and execute a customized direct
marketing campaign for the dealership. After the data is


                                       6.
<PAGE>

analyzed, it is then overlaid on other relevant databases such as maintenance
schedules or zip code exclusion tables. We consult with dealerships on a
customized program that takes into account maintenance schedules, geography,
demographics and the dealership's service operations. Once our database includes
all of the necessary data, we are able to execute the RESULTS Program and begin
to provide direct marketing services.

      TARGETED DIRECT MAIL SOLICITATION. We send to each dealership customer a
personalized letter on that dealership's letterhead. The personalized letter is
tailored to each customer's car make, mileage and maintenance schedule,
indicating that the vehicle is due for service. The letter also describes the
suggested service required, as well as dealership contact information and hours
of operation. We can then monitor the response rate of our direct mail
solicitations through regular transaction downloads from dealerships, as well as
use the most current information to update and enhance our database for each
dealership. We also utilize e-mail reminder notices instead of letters for those
customers who have expressed a preference for e-mail.

      TELESERVICE FOLLOW-UP. If the regular transaction downloads show that the
vehicle owner did not visit the dealership within a specified time after the
personalized letter or e-mail is sent, a telephone solicitation from Newgen is
made on behalf of the dealership, encouraging the dealership customer to bring
the vehicle to the dealership for service. Ideally, the Newgen teleservice
representative speaks directly to the dealership customer and is able to:

      -  confirm the vehicle's mileage;

      -  explain the type of service that is due;

      -  set an appointment for service of the vehicle; and

      -  obtain customer feedback for dealerships.

      If an answering machine is reached, a message is left for the dealership
customer. Our research indicates that the response rate from solicitations by
telephone messages is approximately the same as solicitations by direct
telephone contact. If an appointment is scheduled, the dealership customer's
name returns to the database for future solicitation. If the dealership customer
is no longer appropriate for solicitation (for example, because the customer
sold the vehicle or moved away), the name is made inactive in the database and
no longer solicited. If Newgen's teleservice representatives receive a complaint
from a dealership customer, a "customer opportunity" form is created identifying
the reason for the dissatisfaction (for example, the customer experienced a rude
service advisor or the vehicle was not ready when promised). Each "customer
opportunity" form is immediately sent to the dealership via facsimile. These
forms provide an opportunity for dealerships to salvage fragile customer
relationships and improve customer retention. We believe that our teleservice
calls are effective because they are not made as sales calls. Rather, they are
simply reminder calls provided as a service to the vehicle owner.

      CLOSED-LOOP SYSTEM. The RESULTS Program is a closed-loop system that
allows Newgen to know whether a dealership customer has responded to our direct
marketing services. By updating our database throughout the solicitation
process, our closed-loop system is designed to ensure that all dealership
customers experience appropriate and personalized interaction and follow-up. The
RESULTS Program is effective because we are able to maintain the most current
record possible for each dealership customer and vehicle. As a result, we
minimize inappropriate and ineffective solicitations.

      COMPREHENSIVE MANAGEMENT REPORTS. Each month, we produce comprehensive
management reports for each of our dealerships. These reports are sent to
dealerships shortly after the end of the month and contain specific,
quantifiable information about the results of their customized program. The
information in these reports includes data on customer spending habits, return
on the dealership's investment and database purification. These reports also
contain information on service advisor performance and other relevant feedback
enabling the dealership to improve its operations and processes. We are also
able to provide manufacturers with consolidated management reports, which
enables them to track the progress of their dealerships.

      RESERVATIONS SERVICE

                                       7.
<PAGE>

      One of the most challenging processes for the service department of an
automobile dealership is the reservations process. The service department is
difficult for the dealership to staff appropriately, such that service advisors
often spend inadequate time with customers on the phone to address service or
maintenance concerns, especially at peak times such as Monday mornings.
Furthermore, service advisors may not check the dealership customer's service
history report to determine whether or not the customer is due for additional
maintenance that could result in additional revenue to the dealership. Finally,
service advisors generally are not trained in proper service shop loading
techniques, resulting in an inefficient system for completing service orders.

      Newgen's Reservations Service is designed to overcome these challenges.
When a dealership customer calls the dealership to set an appointment for
service, the call is transferred to Newgen's teleservice facility. Through
our database, the dealership customer's service history is accessed along
with the dealership's service calendar. Newgen service representatives are
trained to ascertain the nature of the problem with the vehicle. At the same
time, the teleservice representative can recommend other needed maintenance.
We then transmit the reservation information to the dealership's computer
system. Through Newgen's proprietary scheduling algorithm, the repair work is
scheduled for a mutually convenient time that is designed to load the service
department for maximum efficiency. Newgen currently has ten dealerships in
pilot, and expects to launch this service on a larger scale during the third
quarter of 2000. The Reservations Service is only available to dealerships
who use our RESULTS Program.

      In addition, Newgen will offer dealership customers the ability to make
service reservations with the dealership via the Internet. When a dealership
customer receives an e-mail reminder, he will be able to click on a link that
will allow him to make a service reservation on-line.

      CONNECTIONS SERVICE

      Many dealerships call their customers after a service visit to inquire
about the quality of their experience. We are well positioned to provide this
service through our Connections Service on an outsourced basis because we
already acquired the necessary data as part of our RESULTS Program. Our
Connections Service is a survey system that enables our dealerships to track
their customer satisfaction. This program allows us to leverage our existing
teleservice expertise and operational infrastructure.

      We gather customer responses through three methods. First, we place a
kiosk at the service cashier's desk, at which a customer can input, on a touch
screen, responses to various questions regarding the service experience. The
survey can be supplemented by a telephone call or an e-mail a few days after the
service, to ensure that the vehicle is working properly. Feedback from these
surveys is sent to the dealership on a regular basis, with immediate
notification to the dealership of any responses that would warrant special
handling.

      ULTIMATE SERVICE

      Our subsidiary, Newgen Management Services provides outsourced
management for dealership service departments, under the Ultimate Service
brand. Many dealerships view the operation of the service department as a
difficult process, and want a third party to assist them in managing their
fixed operation. Newgen Management Services provides two employees to the
dealership, who have line authority to direct the operations of the parts and
service operation. These employees implement a number of processes and
procedures at the dealership, including the utilization of the RESULTS
Program and Reservation Service. Newgen Management Services recently
received an endorsement from the Dealer Development division of Ford Motor
Company, whereby Newgen Management will provide Ultimate Service to twenty
dealerships.

      Newgen also leverages its industry expertise in the parts and service
departments' operations of automobile dealerships through its Consulting
Division. We currently have a separate consulting purchase order to help Ford
dealerships increase sales of tires and brakes. This program is called Around
The Wheel and is expected to conclude in September 2000. We expect to
redeploy our consultants into Newgen Management Services at the
conclusion of the existing contract.

                                       8.
<PAGE>

      CARABUNGA.COM

      Our other subsidiary, Carabunga.com, Inc., utilizes the Internet as a
marketing tool for dealerships. It is intended to be the first dealership portal
for one-to-one marketing programs for the automotive industry. The Internet site
will showcase the following three value-added products for dealers and
manufacturers:


      -  E-PROMOTIONS will identify service customers who are ready to purchase
         another vehicle and create an on-line program of specialty letters and
         telephone follow-up calls.

      -  E-COUPONS will provide an electronic format for the delivery of coupons
         that offer discounted services.

      -  ROAD will provide an electronic format that will enable dealerships and
         manufacturers to analyze and purify their customer database for
         consumer trends, perform data visualization and mapping techniques, and
         consequently generate lists of customers who are ready to buy another
         vehicle.

      For a discussion of risks associated with the introduction of new
services, see "Risk Factors Related to Our Business-We Will Need to Introduce
New Services to Expand Our Business."

SALES AND MARKETING

      SALES

      At December 31, 1999, we employed 45 sales professionals located in major
markets throughout the United States. Although our sales representatives and
their supervisors do receive a small monthly expense allowance, the sales force
is otherwise compensated exclusively by commission. The commission is based on a
salesperson's implementation of the RESULTS Program and other programs at the
dealerships. In addition, at December 31, 1999, we had 18 customer satisfaction
representatives located throughout the United States. We believe their regular
visits to our customers increase both dealership awareness of our services and
an appreciation of the benefits and value of our services. Our experience has
been that educated and satisfied customers are more likely to provide us with
referrals to other dealerships. In addition, our attention to our customers has
helped us increase the number of active names in our database and the number of
services that we provide to our individual dealerships, and reduce
cancellations.

      The continued consolidation of automobile dealerships has enabled us to
target our sales efforts more effectively. Because the larger dealerships are
able to derive the greatest benefit from our services and represent our greatest
potential source of revenue, our sales professionals focus primarily on these
dealerships.

      Newgen uses two different strategies for selling services to automobile
dealerships. When a manufacturer or dealership group recommends our services,
our salesperson is able to more effectively contact the dealership principal.
Our salesperson also is able to make a sales presentation that is tailored to
the manufacturer or dealership group program. Manufacturers influence the
decisions made by dealerships through both financial and non-financial
incentives and support our sales efforts. For example, Ford's recommendation of
our services has been instrumental in securing appointments with Ford-affiliated
dealership principals. In turn, sales of our services to Ford dealerships have
increased. In addition, through Ford-sponsored dealership seminars, we have
enrolled several hundred dealerships in our Around the Wheel Program. Other
benefits of a manufacturer's recommendation include co-branded marketing
materials and administrative support with our management of receivables and the
fee collection process.

      When a dealership is not affiliated with a manufacturer that recommends
our services, our sales representatives directly solicit the dealership. We
employ an active prospecting and sales management process intended to increase
direct sales by facilitating appointments with key decision makers at
dealerships. Regional market-support personnel address administrative
responsibilities for teams of salespeople. Word-of-mouth, cold-call prospecting
by market-support personnel, special mailings to dealerships and booths at local
and regional dealership exhibits create sales leads that are then responded to
by sales representatives. In addition, we


                                       9.
<PAGE>

have an internal database system that electronically tracks our customer
prospects throughout our solicitation of new business.

      We believe that our credibility among automobile dealerships is based on
our ethical sales practices, demonstrated industry expertise, manufacturer
recommendations, leading edge technology and efficient back office operations.

      MARKETING

      Our marketing department is responsible for the development and
maintenance of manufacturer accounts through its business development managers.
In addition, our marketing efforts focus on enhancing Newgen's brand name
recognition. The marketing department is also responsible for our participation
in the annual National Automobile Dealers Association trade show, dealership
association presentations, as well as other smaller regional trade shows across
the United States that increase awareness of Newgen's services.

OPERATIONS

      We have developed broad expertise in the operational aspects of database
management, direct marketing and teleservice. Our core competencies include:

      -  developing and installing databases with dealership-specific
         information;

      -  downloading dealership data through our highly automated computer
         system;

      -  purifying and enhancing data;

      -  maintaining automobile maintenance schedules; and

      -  providing systems for personalized customer solicitation through direct
         mail and teleservice.

      In December 1997, we completed the certification process for ISO 9001. To
become ISO 9001 certified, an independent certifying agency audited our internal
processes and certified that they met a set of specific international quality
standards established by the International Standards Organization. In February
2000, we passed an ISO 9001 audit, enabling us to retain our ISO 9001
certification. We believe that ISO 9001 certification will allow Newgen to
achieve special vendor status with major manufacturers by signifying our
attention to quality and operational excellence. We believe that our operations
expertise provides us with a competitive advantage and is a key reason for the
growth of our customer base.

      INSTALLATIONS. The installation department has the initial interaction
with a dealership in implementing the RESULTS Program. This department's
activities consist primarily of programming scripts to obtain dealership data
via modem, ensuring that all appropriate maintenance schedules and dealership
information are input to our database system and creating customized digital
letterhead for sending to dealership customers. In addition, the installation
department works with dealerships to develop customized dealership-specific
information for our database or other special dealership offerings, such as
"winterization" packages in Michigan or "desert protection" plans in Texas. The
installation department also creates letter templates for the direct marketing
component of our business. Finally, our installation department is utilized to
help install Computer Care dealerships on the RESULTS Program.

      COMPUTER OPERATIONS. The computer operations department downloads the
initial data from the dealership and is responsible for downloading data from
the dealership on a daily basis. For most dealerships, data is automatically
downloaded nightly containing a detailed list of dealership customers who have
come in for service or have purchased a vehicle, although we recently signed an
agreement with ADP to download this information to us. This highly automated
system allows us to know whether a contacted dealership customer has come in for
service or made an appointment. If the dealership customer has had his or her
vehicle serviced, the record is returned to the file for future solicitation. If
the dealership customer does not come in for service within a time frame
specified by the dealership, the name is transferred to a phone list. The
computer operations department is


                                      10.
<PAGE>

also responsible for maintaining our HP9000 and Sun computers. In addition, the
computer operations department facilitates the analysis of data for sale to
manufacturers as part of our data warehousing and mining services.

      DATABASE OPERATIONS. Newgen is focused on maintaining a comprehensive
transaction database by concentrating on continuous database purification. The
database operations department prepares new records for processing by ensuring
that each dealership customer name has a proper salutation, proper address
(utilizing the National Change of Address Registry) and that each address is in
compliance with postal regulations. The database operations department also
processes the files that are used to generate letters and downloads these files
to our print vendors. Newgen's print vendors then utilize innovative
print-on-demand technology to generate customized letters on dealership
letterhead.

      Dealerships are able to change the number of active customers in their
database at any time. New names are added to the database whenever an existing
active name is made inactive as part of the ongoing database purification
activities or when a new vehicle is sold. This process helps us maintain the
number of active names requested by the dealership. The database operations
department also develops the general and dealership-specific information for our
database. This database includes current information on virtually every make and
model of vehicle produced for sale in North America and their recommended
maintenance schedules. These standard maintenance schedules include a
combination of time parameters (for example, every six months) and mileage
parameters (for example, every 3,000 miles). Our proprietary software
individualizes these schedules by making adjustments for the driving habits of
each vehicle owner in our database.

      TELESERVICE. The teleservice department contacts dealership customers that
do not respond to solicitation letters. At December 31, 1999, the teleservice
department had 83 full-time and 82 part-time employees. The teleservice
department currently contacts almost 1 million customers per month. When a
personal contact cannot be made, a message is left for the dealership's
customer. Our research indicates that the response rate from solicitations by
telephone messages is approximately the same as solicitations by direct
telephone contact. When a contact is made, the teleservice department either
makes an appointment for the dealership, or "closes the loop" by establishing
reasons for non-response. Teleservice representatives may also identify
dealership customers who are dissatisfied with the dealership and do not wish to
return for service. We believe that our teleservice calls are effective because
they are not made as sales calls. Rather, they are simply reminder calls
provided as a service to the vehicle owner.

      CUSTOMER SERVICE. The customer service center ensures that the needs of
dealerships are addressed. This department answers questions from dealerships
and our own employees about all of our services. The customer service center
also implements changes to a dealership's program, such as letter changes and
maintenance schedule changes. We use the information we gather through our
customer service center to constantly improve our processes. This department
employed 41 people at December 31, 1999 and is available to answer questions 24
hours a day, seven days a week. In addition, we employed 15 customer service
representatives in our Computer Care division.

      CUSTOMER SATISFACTION. The mission of our customer satisfaction department
is to improve dealership satisfaction and retention. At December 31, 1999, the
department consisted of 18 field representatives. Our field representatives
regularly visit our customers. During the field visits, our representatives
proactively deal with any issues that may have arisen at the dealership, such as
management or operational changes. In addition, the field representatives review
management reports with dealership representatives and explore new avenues for
revenue enhancement with the dealership. The field representatives are able to
introduce new services to dealerships during their visits, thereby supplementing
the efforts of the sales department.

TECHNOLOGY

      We are a leader in applying advanced technology to database management and
direct marketing. Our current software and database systems have been developed
over several years, and while we have increased their


                                      11.
<PAGE>

functionality as we have grown, our system requires further enhancement. We
have, where necessary, license agreements for the software we use from third
parties.

      In order to take advantage of the most current advanced technology, we
will migrate our current system to a new system. We expect to complete this
migration by the second quarter of 2001. We expect to greatly enhance our core
computing and database management services through the implementation of the
migration. We believe that the improvements in our operating processes as a
result of the migration will produce a significant return on our investment
through cost savings. In particular, we believe the migration will:

      -  provide us with increased scalability as our customer base grows;

      -  result in a more flexible database that will enhance our ability to
         provide new services and customized extract reports;

      -  enable us to introduce new products and services more quickly;

      -  increase our data processing efficiency;

      -  enhance our ability to utilize the Internet as part of future service
         offerings;

      -  improve our customer service by providing more effective user
         interfaces and information; and

      -  strengthen our ability to more effectively purify data, which will
         greatly reduce labor and postage expense.

      The new system will utilize Oracle database software and a CRM system such
as Seibel or Vantive. It will also utilize a rules based system, as well as a
core system that is internally developed. Previously, we engaged a third-party
vendor to perform a rewrite of our operating systems. We have not implemented
this prior rewrite and do not expect to do so. See "Risk Factors Related to
Our Business - Our Computer Software Utilizes Outdated Technology."

      In early 1999, we installed new telephony equipment for our teleservice
operations, which has resulted in significant improvements in our teleservice
operations. In particular, we believe the telephony equipment has increased the
efficiency, consistency and quality of our services, as well as provide
increased feedback that will enable us to better understand our business.

COMPETITION

      We operate in a highly competitive business environment. We compete with a
variety of companies, including large national or multi-national companies which
have greater financial and marketing resources than we do, and smaller regional
or local companies that are involved to varying degrees in the same business as
us. Our two significant national competitors are Reynolds & Reynolds, Co.
("R&R"), and Moore Corporation Limited ("Moore"). In addition, R.L. Polk has
offered services that are similar to ours on a limited basis. R&R's Service
Systems Division offers automobile dealerships database management and customer
retention services that compete directly with our services. Moore also delivers
integrated business communications, personalized direct marketing and other
related services. Moreover, R&R and Moore have significantly greater financial
and marketing resources and actively compete against us for dealership business.
For example, R&R has in the past offered a discount on customer retention
systems to dealerships that purchase certain hardware and software. We also
compete to a limited degree with other small customer retention service
providers and in-house customer retention systems. As the trend towards
dealership consolidation continues, dealerships will be able to create internal
economies of scale, and could choose to satisfy their database management and
directed marketing needs internally rather than outsourcing. Our potential
customers may decide to internally develop database management and direct
marketing services. Our ability to compete effectively will depend on a number
of factors, including:

      -  our knowledge of dealership service department operations;

      -  the value of the services we offer;


                                      12.
<PAGE>

      -  the state of our relationships with automobile manufacturers;

      -  the quality and breadth of our service;

      -  our ability to identify, develop and offer innovative services;

      -  our ability to overcome difficulties associated with replacing
         incumbent service providers; and

      -  pricing and reputation among dealerships.

      R&R and Moore price their services on a per letter basis, although certain
customers of Moore may elect to be billed on the number of active names in the
customer base. Therefore, meaningful price comparisons between our services and
our competitors' are difficult. Dealerships may perceive that our services are
priced higher than those of our competitors. In addition, our competitors may
increase their emphasis on programs similar to those programs we offer and new
competitors may enter the market. Furthermore, dealerships or automobile
manufacturers themselves may introduce competing programs. If any of these were
to occur, we may be unable to compete effectively against them.

TELEMARKETING REGULATIONS

      We are subject to varying degrees of federal, state and local
telemarketing regulation. The jurisdiction of the Federal Trade Commission
("FTC") and the Federal Communications Commission ("FCC") extends to the
telemarketing industry, including some of the services we provide to our
customers. The FTC has issued regulations which prohibit certain types of
deceptive or abusive telemarketing acts or practices. Regulations issued by
the FCC place limits on the use of certain types of equipment used in
telephone solicitation, require telemarketing companies to provide certain
identifying information, and require the maintenance of a list of persons who
do not wish to be called. We do not currently engage in, and have no plans to
engage in, any of the activities prohibited by the FTC and FCC regulations.
The FCC and FTC regulations have, therefore, not materially restricted our
operations. If future regulations are adopted by the FCC and FTC or other
regulatory bodies, our business may be materially adversely effected. In
addition, violations may occur in the future as a result of human error,
equipment failure or other causes. Our failure to comply with, applicable
domestic and international regulations could have a material adverse effect
on our business, financial condition and results of operations. The media
often publicizes perceived non-compliance with consumer protection
regulations and violations of notions of fair dealing with consumers. Any
such publicity is potentially damaging to our reputation, client
relationships and consumer acceptance and loyalty.

EMPLOYEES

      As of December 31, 1999, we had 523 employees. From time to time, we
also employ independent contractors within our information technology
department and Consulting Division. Our employees are not represented by any
collective bargaining organization and we have never experienced a work
stoppage. We believe that our relations with our employees are good.

EXECUTIVE OFFICERS

      The following table provides certain information with respect to the
executive officers of Newgen as of December 31, 1999:

<TABLE>
<CAPTION>
NAME                                 AGE   POSITION
----                                 ---   --------
<S>                                  <C>   <C>
Gerald L. Benowitz................    55   Chairman, President and Chief Executive Officer

Samuel Simkin.....................    44   Senior Vice President,  Chief  Financial  Officer and
                                           Secretary

Leslie J. Silver..................    49   Executive  Vice   President  and  President,   Newgen
                                           Management Services, Inc.

James K. Roche....................    40   President, Carabunga.com, Inc.


                                      13.
<PAGE>

Mario Sanchez.....................    44   Vice President and Chief Information Officer

Frederick Wallace.................    53   Vice President, Marketing
</TABLE>

      GERALD L. BENOWITZ has served as Chairman, President and Chief Executive
Officer of Newgen since our inception. From October 1984 to June 1991, Mr.
Benowitz served as Project Manager for Otay International Center, a 400-acre
multi-use industrial park. From May 1980 to August 1984, he served as President
and Chief Operating Officer of Harco Medical Electronic Devices, a medical
device company. Mr. Benowitz holds a B.S. from the University of Tennessee.

      SAMUEL SIMKIN was named Senior Vice President of Newgen in August 1998.
Mr. Simkin has served as Vice President and Chief Financial Officer of Newgen
since our inception. From November 1986 to June 1991, Mr. Simkin served as
President of Morite Investments, Inc., a private investment company. From June
1978 to November 1986, Mr. Simkin served as Vice President and Secretary of
Rudacel Investment Company Limited where he was responsible for investing in and
managing various companies. Mr. Simkin holds both a B.A. and an L.L.B. from the
University of Manitoba, and an M.B.A. from the University of Western Ontario. He
is a member of the Manitoba and California Bar Associations, and is also a
Certified General Accountant.

      LESLIE J. SILVER was named Executive Vice President of Newgen in August
1998. Mr. Silver has served as President of Newgen Consulting Services since
Newgen's inception and President of Newgen Management Services, Inc. since
October 1999. From May 1982 until February 1994, Mr. Silver served in various
senior management capacities at Newgen Service Systems, Inc., and its
successor corporations, which developed and sold database management and
customer retention software to automobile dealerships, primarily in Canada.
From May 1976 to April 1982, Mr. Silver served as Vice President of the
Western Canadian division of SHL Systemhouse, Inc., an international software
development and systems integration company. Mr. Silver holds both a B.S. and
an M.S. from the University of Manitoba.

      JAMES K. ROCHE was named President of Carabunga.com, Inc. in February
2000. Prior to then, Mr. Roche served as our Senior Vice President,
Operations of Newgen, since August 1998, and our Vice President, Operations
of Newgen since our inception. Since 1983, Mr. Roche has held management
positions with several companies that were providing consulting and hardware
and software systems to the service departments of automobile dealerships.
From May 1991 to September 1993, Mr. Roche served as the General Manager of
United States Support Services of Newgen Services, L.P. From September 1990
to April 1991, he served as Director of International Operations of Newgen
Services Systems International. From September 1987 to August 1990, Mr. Roche
served as Director of United States Operations of Newgen Service Systems,
Inc. Mr. Roche holds a B.S. from St. Louis University.

      MARIO SANCHEZ joined Newgen in May 1998 as Vice President and Chief
Information Officer. Mr. Sanchez is responsible for initiating, developing and
directing our information technology projects. From April 1997 to May 1998, Mr.
Sanchez served as Divisional Vice President, Information Technology for American
International Underwriters, a worldwide marketer of property-casualty products.
From 1996 to 1997, Mr. Sanchez served as Director of Information Technology for
Precision Response Corporation, a telephone-based marketing and customer service
company. From 1994 to 1996, Mr. Sanchez served as Director of Communications of
the High Performance Database Research Center at Florida International
University. Mr. Sanchez holds both a B.A. and an M.S. from Florida International
University.

      FRED WALLACE joined Newgen in June 1998 as Vice President, Marketing. From
1997 to June 1998, Mr. Wallace served as Vice President, Vehicle Acquisition and
Remarketing of AutoNation USA, a division of Republic Industries, Inc., an
automobile consolidator. From 1996 to 1997, Mr. Wallace served as Director,
Sales and Marketing of Fleetwood Enterprises, Inc., a motorhome manufacturer.
From 1990 to 1996, Mr. Wallace directed marketing and promotional activities for
Mazda Motor of America. From 1981 to 1990, Mr. Wallace developed and directed
marketing plans for Volkswagen of America. From 1968 to 1981, Mr. Wallace
developed and coordinated the initial marketing launch for Ford Motor Company's
Extended Service Plan. Mr. Wallace holds a B.S. from the University of Florida,
Gainesville.


                                      14.
<PAGE>

                      RISK FACTORS RELATED TO OUR BUSINESS

      EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE, THIS ANNUAL REPORT ON FORM 10-K AND THE INFORMATION INCORPORATED
BY REFERENCE CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE DISCUSSED
HERE. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO DIFFERENCES IN OUR ACTUAL
RESULTS INCLUDE THOSE DISCUSSED IN THE FOLLOWING SECTION, AS WELL AS THOSE
DISCUSSED IN PART II, ITEM 7 ENTITLED "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND ELSEWHERE THROUGHOUT
THIS ANNUAL REPORT AND IN ANY OTHER DOCUMENTS INCORPORATED BY REFERENCE INTO
THIS ANNUAL REPORT. WE ASSUME NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING
STATEMENTS.

      YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, TOGETHER WITH
ALL OF THE OTHER INFORMATION INCLUDED IN THIS ANNUAL REPORT ON FORM 10-K.
EACH OF THESE RISK FACTORS COULD ADVERSELY AFFECT OUR BUSINESS, OPERATING
RESULTS AND FINANCIAL CONDITION, AS WELL AS ADVERSELY AFFECT THE VALUE OF AN
INVESTMENT IN OUR COMMON STOCK.

WE HAVE A HISTORY OF LOSSES AND MAY EXPERIENCE FUTURE LOSSES

      We incurred net losses of $4.7 million in 1996, $2.2 million in 1997
and $3.2 million in 1998. As of December 31, 1999, we had an accumulated
retained deficit of $8.8 million. We achieved profitability on an annual
basis for the first time in 1999, but we may incur net losses in the future.
We anticipate significant sales and marketing, service development,
technology, and general and administrative expenses as we continue to develop
and introduce new services, increase our customer base, and extend our
technology capabilities. As a result, we will need to generate significantly
higher revenues to sustain profitability. Although our revenues have grown in
recent quarters, we cannot be certain that we will continue to achieve
revenue growth or generate sufficient revenues to achieve profitability. Our
financial results would be harmed if our revenue does not grow or grows more
slowly than we anticipate, or if our operating or capital expenditures exceed
our expectations and cannot be adjusted accordingly.

OUR LIMITED OPERATING HISTORY PROVIDES LITTLE INFORMATION WITH WHICH TO
EVALUATE OUR BUSINESS AND PROSPECTS

      We were incorporated in February 1994 and have a limited operating
history. Investors must consider our business and prospects in light of the
risks typically encountered by companies in their early stages of development.
Some of these risks, in addition to those risks discussed elsewhere in this
section, include:

      -  our evolving business model;

      -  the intensely competitive market for outsourced database management and
         direct marketing services to automobile dealerships and manufacturers;

      -  the risks relating to the timely introduction of new services;

      -  the risks associated with the expansion of our operational and
         technology infrastructure;

      -  the challenges encountered in expanding our sales and customer support
         organization; and

      -  our reliance on the cyclical auto industry.

We may not be successful in implementing any of our business strategies or in
addressing these risks or others. Even if we are successful, we still may not be
profitable in the future.

THERE ARE MANY FACTORS, INCLUDING SOME BEYOND OUR CONTROL, THAT MAY CAUSE
FLUCTUATIONS IN OUR QUARTERLY RESULTS

      Our quarterly and annual revenues, gross margins and operating results
have fluctuated in the past and are likely to fluctuate in the future. The
various services we offer have different gross margins and, as a result, our
revenue mix will affect our total gross margin. In addition, some of our
operating expenses are relatively fixed and cannot be reduced in the short term
to compensate for unanticipated variations in revenue. Thus, our total gross
margin will be materially adversely affected in the event of any unexpected
revenue shortfall.


                                      15.
<PAGE>

      Future fluctuations in our results of operations may be caused by various
factors, many of which are outside of our control. Some of these factors
include:

      -  our ability to attract new dealerships as customers;

      -  the cancellation of contracts;

      -  our ability to maintain an ongoing relationship with our manufacturer
         and megadealer customers;

      -  changes in our average revenues per customer;

      -  our ability to introduce new services, including those offered by
         Newgen Management Services and Carabunga.com;

      -  our ability to integrate businesses or technologies that we have
         acquired or may acquire in the future;

      -  the introduction of alternative services by competitors;

      -  our ability to retain existing personnel and attract new personnel in a
         timely and effective manner;

      -  changes in our pricing policies or those of our competitors resulting
         from competitive pressures and other factors;

      -  the amount and timing of operating costs and capital expenditures
         relating to expansion of our business, operations and infrastructure,
         including the rewrite of our database management and customer retention
         software and upgrades to our computer and telephony technology;

      -  our ability to effectively manage growth;

      -  increases in costs of services and supplies provided to us by third
         parties, including the price of paper, toner and postage; and

      -  the cost of labor.

      Historically, our quarterly fluctuations in revenue have been due
primarily to fluctuations in consulting revenues, which have consisted of a
small number of significant contracts. For example, in the fourth quarter of
1997, total revenues increased by $2.1 million to $9.0 million, primarily as
a result of an increase in consulting revenues. Consulting revenues as a
percentage of our total revenues for the eight quarterly periods ended
December 31, 1999 ranged from 7% to 26%. In addition, our consulting business
currently depends entirely on Ford. Ford has engaged our Consulting Division
to perform discrete consulting projects. Our current consulting purchase
order with Ford is expected to be completed in September 2000. Ford is under
no obligation to continue to engage us for future projects. We expect that
after the completion of the current project, that we will redeploy our
consultants into the Ultimate Service program offered by our subsidiary,
Newgen Management Services.

      We may need to invest a significant amount of resources and capital in
order to implement our Internet strategy successfully. Further, we are in the
process of re-writing our computer systems, which may require additional
significant investment. Either of these extraordinary expenses could affect
our quarter-to-quarter results.

      Due to these and other factors, quarterly revenues, expenses and results
of operations could vary significantly in the future, and period-to-period
comparisons should not be relied upon as indications of future performance. We
may not be able to increase our revenues in future periods or be able to sustain
our existing level of revenues or our rate of revenue growth on a quarterly or
annual basis. In addition, our annual or quarterly operating results may not
meet the expectations of securities analysts and investors. If this happens, the
trading price of our common stock could significantly decline.

WE ARE HIGHLY DEPENDENT ON OUR RELATIONSHIP WITH FORD MOTOR COMPANY

      We derive a substantial portion of our revenues from Ford and Ford
dealerships. In 1999, sales of our RESULTS Program to Ford dealerships
represented 53% of our total revenues while consulting services provided to Ford
represented 10% of our total revenues. We collect accounts receivable from a
majority of Ford dealerships directly from Ford. We expect that sales to Ford
and Ford dealerships will continue to comprise a significant percentage of our
revenues and accounts receivable for the foreseeable future.


                                      16.
<PAGE>

      Due to a change in Ford's accounting system in late 1998, we were
temporarily unable to collect accounts receivable from Ford in a timely manner.
If in the future we are unable to collect accounts receivable from Ford in a
timely manner for any reason, this could reduce the amount of cash available to
us to operate our business. As a result, we could be required to use cash
reserves or increase our outstanding indebtedness in order to continue our
normal business operations. Also, there is no assurance that Ford will continue
to allow us to collect Ford dealership receivables directly from Ford. In that
case, we would have to collect these receivables directly from individual
dealerships, which could increase the time to collect receivables from those
dealerships.

      Ford also has acted as a key reference in our solicitation of Ford
dealerships and other manufacturers as new customers. We expect that we will
need to continue to develop relationships with existing and future Ford
management in order to maintain strong ties with Ford and to continue to
receive Ford's endorsement of our services to Ford dealerships. Our
relationship with Ford could be damaged if Leslie J. Silver, our Executive
Vice President and President of our Newgen Management Services subsidiary,
who has developed a relationship with certain key Ford personnel, terminates
his employment with us. We contract individually with Ford dealerships which
are under no obligation to use our services. Any change in our relationship
with Ford or any change in Ford's recommendation of our services could result
in a significant reduction in the number of customers we service and hinder
our ability to contract with new customers which could harm our business,
financial condition and results of operations.

WE ARE HIGHLY DEPENDENT ON OUR RELATIONSHIP WITH CERTAIN MANUFACTURERS AND
DEALERSHIP GROUPS

      We derive a substantial portion of our revenues from other manufacturers,
such as Volkswagon, Audi, Mitsubishi, Hyundai, Kia, Volvo, and Jaguar, as well
as the AutoNation and Carmax superstore chains.

      These manufacturers and dealership groups have acted as a key reference in
our solicitation of dealerships and other manufacturers as new customers. We
expect that we will need to continue to develop relationships with existing and
future management of these manufacturers and dealership groups in order to
maintain strong ties with them. Although we contract individually with other
dealerships that have relationships with these manufacturers and dealership
groups, they are under no obligation to use our services. Hence, any change in
our relationship with these manufacturers and dealership groups could result in
a significant reduction in the number of customers we service and hinder our
ability to contract with new customers which could harm our business, financial
condition and results of operations.

OUR COMPUTER SOFTWARE UTILIZES OUTDATED TECHNOLOGY

      Our computer system utilizes technology that was developed in the 1980's.
Accordingly, it does not contain many of the features and tools that could make
us more efficient. In 1999, we expected to receive new enterprise-wide software
that we had commissioned from third-party vendor. However, the software that was
delivered to us was not acceptable because it failed to operate reliably. As a
result, we continue to utilize outdated software.

      We are currently planning a strategy that will enable us to update our
existing systems. By utilizing certain existing software and combining it with
programs that we will write, we believe that we can migrate our existing
platform to a new and improved platform. We expect this migration to occur
during the first half of 2001. Migrations of this kind are inherently subject to
uncertainty regarding completion date, and we may not be able to achieve the
migration in the anticipated time-frame. We are incurring expenses of between
$25,000 and $50,000 per month of additional operating costs and for revisions to
our existing software until the completion of the migration. Further delays or
failure in the completion of the migration may result in additional costs.

      By performing the migration internally, some of our technology resources
are being diverted away from servicing our existing customers, or developing new
services. Any such diversion of resources may reduce our customers' level of
satisfaction with Newgen's existing services or in delays in the development or
introduction of new services. Our new enterprise-wide database management
software will be complex and may initially impair our ability to provide
satisfactory customer service. It may result in the distribution of incorrect
data. In


                                      17.
<PAGE>

addition, our current hardware may be insufficient to support the software
rewrite. Our introduction of new services is dependent in part upon the
development and implementation of the new software. Other risks related to the
migration include:

      -  the integration of the new software with our existing systems;

      -  the training of technical personnel to use and enhance the new system;

      -  cost overruns associated with development and implementation of the
         system;

      -  lost productivity associated with testing and debugging the software,
         unexpected defects or failures;

      -  credits to customers that may be required in connection with such
         defects or failures and additional costs associated with converting to
         and supporting the software rewrite; and

      -  the inability to scale our existing software to support a substantial
         increase in the number of customer dealerships without modifying our
         existing software.

      Any delay or failure to successfully complete or implement the software
could harm our business, financial condition and results of operations.

WE WILL NEED TO INTRODUCE NEW SERVICES TO EXPAND OUR BUSINESS

      Our future growth will depend, in part, on our ability to enhance our
existing services with new features and to develop new services that address the
expanding needs of our customers. In addition, our future growth will also
depend on our ability to respond to technological advances and emerging industry
practices in a timely and cost-effective manner. Acceptance of our new services
depends on several factors, including dealerships' needs for these services,
demonstration of tangible benefits of the services, pricing and dealership
industry conditions and trends. We recently introduced our Reservations and
Connections Services. Our customers may not accept or contract with us for any
of our new services. In addition, certain of our new services may benefit
competitors of our current customers, which may cause certain of our current
customers to cease using our services. Also, several of our competitors have
substantially greater resources than we do. This may allow them to introduce new
services or features before we do or develop services or features superior to
our services. In the future, we may experience product development, marketing
and other difficulties that could delay or prevent our development, introduction
or marketing of new or enhanced services. A substantial portion of the $4.3
million in technology and product development expenses we incurred in 1999
consisted of expenses related to the development of new services. In the future,
we will also have to incur substantial marketing expenses to encourage the
acceptance of our new services by our customers and any potential new customers.
If we are unable to develop and introduce new or enhanced services in a timely
or cost-effective manner, our business could be harmed.

      We have recently incorporated a new subsidiary, Newgen Management
Services, Inc., that intends to provide outsourced management of
the service departments of dealerships. In order to be effective, Newgen
Management Services must develop and implement a series of processes and
procedures that will help the dealerships to whom it provides services. We
cannot assure you that Newgen Management will be able to develop appropriate
processes and procedures in a timely or cost effective manner, or that its
customers will benefit from these services.

      Our other subsidiary, Carabunga.com, Inc., utilizes the Internet as a
marketing tool for dealerships. It is intended to be the first dealership
portal for one-to-one marketing programs for the automotive industry. The
Internet site will showcase the following three value-added products for
dealers and manufacturers:

      - e-Promotions will identify service customers who are ready to
        purchase another vehicle and create an on-line program of specialty
        letters and telephone follow-up calls.

      - e-Coupons will provide an electronic format for the delivery of
        coupons that offer discounted services.

      - ROAD will provide an electronic format that will enable dealerships
        and manufacturers to analyze and purify their customer database for
        consumer trends, perform data visualization and mapping techniques,
        and consequently generate lists of customers who are ready to buy
        another vehicle.

        We may seek outside financing and strategic alliances for our
Carabunga.com subsidiary.

OUR ABILITY TO SECURE NEW CONTRACTS WILL AFFECT OUR FUTURE GROWTH

      If we are unable to expand our customer base or successfully market and
sell our services to dealerships, we may not be able to increase our revenues,
or our revenues may decline. In general, our ability to secure new contracts
depends upon several factors, including:

      -  the effectiveness of our sales and marketing personnel;

      -  the establishment of more automobile manufacturer relationships;


                                      18.
<PAGE>

      -  the ability of our sales personnel to gain access to decision makers at
         dealerships;

      -  the perceived value of our services; and

      -  our reputation among dealerships.

      Newgen's growth has been driven largely by increasing our dealership base.
Our customer base grew from 177 dealerships at December 31, 1995 to 5,175
dealerships at December 31, 1999. We may not be able to secure new contracts in
the future or successfully retain our existing contracts. We are also seeking to
develop relationships with automobile manufacturers as a means of securing
service contracts with dealerships. In the event we are unable to develop such
relationships, our ability to secure or retain service contracts with
dealerships may be hindered. We may not be successful in developing such
relationships and our competitors may use their greater financial and other
resources to preclude or hinder our efforts to develop such relationships. Our
failure to increase the number of dealerships we service would restrict our
future growth and would harm our business.

      Our growth strategy is based, in part, on increasing our revenues per
dealership, both by activating more names on the RESULTS Program and by selling
more services to dealerships, particularly with respect to those dealership
contracts that we acquired in the recently completed purchase of Computer Care
from ADP. Our failure to increase the revenue per dealership would restrict our
future growth and harm our business.

DEALERSHIP TURNOVER MAY HARM OUR BUSINESS

      Our contracts with dealerships are of various durations, typically ranging
from six months to two years. All of our contracts may be terminated upon the
expiration of the contract term. In addition, during the contract term, some
dealerships may choose to reduce the number of active names serviced by us,
which may result in reduced revenues to Newgen. Our ability to renew customer
contracts is dependent upon various factors including:

      -  the perceived value of our services;

      -  the ability of customer satisfaction representatives to deal
         proactively with issues as they arise;

      -  the quality of our services;

      -  our ability to develop new services;

      -  the pricing of our services; and

      -  our ability to retain manufacturer and megadealer endorsements.

      Our inability to meet the expectations of our customers with respect to
any of these factors may result in cancellation of our services by such
customers. Although we have taken measures to reduce turnover, dealership
turnover rates may increase in the future. In 1999, 401 customers cancelled
their contracts after the expiration of their contract term. Because our
contracts are subject to risk of cancellation, the number of dealerships
contracting for our services at any given time may not be a reliable measure of
our future revenues. Any termination, significant reduction or modification of
our business relationships with a significant number of dealerships may harm our
business.

WE MAY NOT BE ABLE TO INTEGRATE THE ACQUISITION OF COMPUTER CARE AS QUICKLY
AS EXPECTED

      On November 30, 1999, we acquired Computer Care from the Dealer Services
Division of ADP. We believe that this acquisition will be positive for Newgen
only if we are able to close the Computer Care facility in Amityville, New York,
and transfer the provision of services to dealerships to our production
facilities in San Diego. If we are not able to transfer the provision of
services to San Diego on a timely basis, we will incur substantial expenses, as
the Amityville facility is less efficient than the production methodologies we
use in our San Diego operations.

      Many of our contracts with Computer Care customers are cancellable with
sixty days notice. Accordingly, our business could be harmed if we are unable
to retain these customers.

                                      19.
<PAGE>

      Furthermore, we acquired certain contracts between Computer Care and
various manufacturers, including Volkswagen, Audi, Volvo, Jaguar, and Kia. If we
are not able to satisfy these manufacturers, and they choose to withdraw their
endorsements, our revenues may be reduced and it could harm our reputation.

WE MAY BE UNABLE TO COMPETE EFFECTIVELY IN THE MARKET FOR OUTSOURCED SERVICES
TO AUTOMOBILE DEALERSHIPS AND MANUFACTURERS

      We operate in a highly competitive business environment. We compete with a
variety of companies, including large national or multi-national companies which
have greater financial and marketing resources than us and smaller regional or
local companies that are involved to varying degrees in the same business as us.
Our two significant national competitors are Reynolds & Reynolds, Co. ("R&R")
and Moore Corporation Limited ("Moore"). R&R's Service Systems Division offers
automobile dealerships database management and customer retention services that
compete directly with our services. Moore also delivers integrated business
communications, personalized direct marketing and other related services to
automobile dealerships and manufacturers. Moreover, R&R and Moore have
significantly greater financial and marketing resources and both of them
actively compete against us for dealership business. For example, in the past
R&R has offered a discount on customer retention systems to dealerships that
purchase certain hardware and software. We also compete to a limited degree with
other smaller customer retention service providers and in-house customer
retention systems. Dealerships may decide to satisfy their database management
and direct marketing needs internally rather than outsourcing, especially as
dealerships grow larger due to industry consolidation.

      R&R and Moore price their services on a per letter basis, although certain
customers of Moore may elect to be billed on the number of active names in the
customer database. Therefore, meaningful price comparisons between our services
and our competitors' are difficult. Dealerships may perceive that our services
are priced higher than those of our competitors. In addition, our competitors
may increase their emphasis on programs similar to those programs we offer and
new competitors may enter the market. Furthermore, dealerships or automobile
manufacturers themselves may introduce competing programs. If any of these were
to occur, we may be unable to compete effectively against them.

OUR RELIANCE ON A SMALL NUMBER OF SUPPLIERS EXPOSES US TO BUSINESS INTERRUPTIONS

      We depend on a small number of suppliers to enable us to deliver our
services. For example, Anderson Print & Mail, Inc. ("Anderson") is currently
the only source for our printing and direct mail needs. In August 1998, we
agreed to purchase a significant portion of our printing requirements from
Anderson. To date, we have not experienced quality problems with Anderson.
However, Anderson may not continue to perform in a satisfactory manner or we
may experience quality or performance problems from Anderson in the future.
In addition, we depend on a small number of companies to provide us with
information that assists us in managing our database. A sudden unexpected
loss of services provided by key suppliers could interrupt our business and
prevent us from providing services to our customers, which, in turn could
adversely affect our results of operations and damage our relationships with
affected dealerships. Our reliance on these limited source vendors could
result in performance shortfalls and limits our control over quality and
costs. We may experience quality or performance problems with any of our
suppliers. Further, a significant increase in the price of one or more of
these services could harm our business by forcing us to raise our prices or
by decreasing our gross margins.

WE RELY ON CERTAIN THIRD PARTIES TO ACCESS DEALERSHIP DATA

      We depend on third parties for access to the data of a portion of our
dealership base. For example, Universal Computer Systems ("UCS") is our sole
source for data updates from dealerships that use UCS dealership-services
software and we do not have a fixed-term contract with UCS to obtain such
data. Approximately 18% of our dealership customers use UCS software. We
obtain data updates from most other dealerships by interfacing directly with
the dealership's computer system. A change in dealership computer hardware or
software may inhibit our access to dealership data and would inhibit our
ability to provide certain services to our customers. We recently entered
into an agreement with ADP to provide us with data from various dealerships.
Although we have not yet implemented this agreement, when we do begin
receiving these

                                      20.
<PAGE>

downloads, the failure of ADP to provide timely and accurate information
could result in lost revenues and harm our relationships with our customers.
Implementation of our Reservations and Connections Services at dealerships
that use UCS dealership service software may require an amendment to our
existing agreement with UCS. We may not be able to modify our agreement with
UCS on satisfactory terms, and therefore, we may not be able to offer
Reservations and Connections to our dealership customers using UCS systems,
which could reduce or limit our revenue growth and profitability.

WE ARE DEPENDENT ON THE PROFITABILITY OF THE AUTOMOBILE INDUSTRY AND ON GENERAL
ECONOMIC CONDITIONS

      Our business depends on both the profitability of automobile dealerships
and the volume of sales of new automobiles, as well as general economic
conditions that may affect the service and maintenance habits of automobile
owners. The automobile industry is highly cyclical and historically has
experienced periods of reduced demand for automobiles. When automobile sales
decline, dealerships have historically looked for ways to cut costs, including
reducing expenditures for certain marketing and outsourced functions. General
economic conditions directly impact the demand for new and used automobiles and
may affect the service and maintenance habits of automobile owners. During
periods of economic slowdown, automobile owners may have their vehicles serviced
less often. They may also be less inclined to have their vehicles serviced at
automobile dealerships, which generally have a reputation for being more
expensive than other automotive repair shops. We believe that a downturn in new
and used automobile sales or decreased dealership profitability could result in
contract cancellations, reduced revenues from our ongoing dealership
relationships and difficulty in attracting new dealership customers. In
addition, the automobile dealership industry has been undergoing consolidation.
This consolidation trend may result in decreased demand for our services if
large dealerships or dealership chains decide to implement their own data
management and marketing services rather than outsource those services to Newgen
and other third parties.

WE ARE SUBSTANTIALLY DEPENDENT ON OUR MANAGEMENT AND KEY PERSONNEL AND SUCH
INDIVIDUALS MAY NOT REMAIN WITH NEWGEN IN THE FUTURE

      Our continued success is largely dependent on the efforts and abilities of
our senior management and other key personnel, in particular our Chief Executive
Officer, Executive Vice President, Senior Vice President and Chief Financial
Officer, as well as the President of Carabunga.com, Inc. Our dependence on our
management is due to their individual and combined experience in the market for
outsourced services for automobile dealerships and manufacturers. This includes
their personal relationships, knowledge of Newgen's operations and technology,
and understanding of the competitive environment in which we operate. In
particular, our relationship with Ford could be damaged if our Executive Vice
President, who has developed a relationship with certain key Ford personnel,
terminates his employment with Newgen. We do not have employment agreements with
any of our key employees. Other than the Chief Executive Officer of Newgen, we
have not obtained key man life insurance on any of our officers. The loss of the
services of certain management and key personnel could harm our business.

WE MAY NOT BE ABLE TO RECRUIT AND RETAIN THE PERSONNEL WE NEED TO SUCCEED

      We have experienced growth in revenues and expansion of our operations
that have placed significant demands on our management and facilities.
Continued growth will also require us to hire more sales, operations,
technical and administrative personnel. We have at times experienced, and
continue to experience, difficulty in recruiting and retaining qualified
personnel, in particular technical and sales personnel, and service
department personnel for Newgen Management Services. For example,
we have experienced turnover in our sales personnel and we cannot assure you
that this turnover will decrease. Recruiting qualified personnel is an
intensely competitive and time-consuming process and we expect competition
for such personnel to remain intense. In addition, with our introduction of
new products and services, the pay scales for direct labor to support these
new products and services may change. The affected personnel may not find
these changes satisfactory. We may not be able to attract and retain the
necessary personnel to accomplish our growth strategies and we may experience
constraints that will adversely affect our ability to satisfy customer demand
in a timely fashion or to

                                      21.
<PAGE>

support satisfactorily our customers and operations. Our inability to attract
and retain key employees could harm our business.

INCREASES IN THE COST OF PAPER, TONER OR POSTAGE RATES MAY REDUCE OUR
PROFITABILITY

      Our services require significant quantities of paper and toner to generate
and mail letters. The price of paper increased significantly during 1995 and the
price of toner increased significantly in 1996. We generally have not been able
to change our prices to our dealerships to compensate for increases in paper and
toner prices. The price of paper or toner may increase in the future.
Furthermore, although we have the right under our dealership contracts to
increase the prices of our services in response to increases in postage rates,
we may choose to absorb postage rate increases rather than pass them on to
dealerships for competitive reasons. Although we adjusted our rates to reflect
the January 1999 postage rate increase, we may not be able to pass on future
postage rate increases in our pricing. Any significant increase in paper or
toner prices or postage rates that are not reflected in our pricing to
dealerships could materially adversely affect our business, financial condition
and results of operations.

FAILURE TO MANAGE THE GROWTH OF OUR OPERATIONS MAY HARM OUR BUSINESS

      Our rapid growth has placed significant demands on our managerial,
operational and financial resources. In order to address these demands, we
continue to hire new employees, invest in new equipment and make other capital
expenditures. In addition, if we increase the number of services offered to
automobile dealerships and the number of dealerships to which we provide
services, we will need to develop further financial and managerial controls and
reporting systems and procedures. We expect that we will need to expand into
additional facilities as we continue to grow. Our business may be harmed if we
fail to expand any of the foregoing areas in an efficient manner or if we
otherwise are unable to manage growth effectively.

WE MAY ENGAGE IN FUTURE ACQUISITIONS THAT DILUTE OUR STOCKHOLDERS, CAUSE US TO
INCUR DEBT AND ASSUME CONTINGENT LIABILITIES

      We may seek to expand our operations and leverage our technology,
database management and dealership processes expertise by investing in or
acquiring businesses or technologies complementary to our existing
operations. For example, in November 1999, we acquired the Computer Care
partnership from the Dealer Services Division of ADP.

      Our investment in or acquisition of businesses or technologies could
materially adversely affect our operating results and the price of our common
stock. Acquisitions also entail numerous risks, including:

      -  difficulties in the assimilation of acquired operations, technologies
         or products;

      -  unanticipated costs;

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

      -  adverse affects on existing business relationships with suppliers and
         customers;

      -  risks of entering markets where we have no or limited prior experience;
         and

      -  potential loss of key employees.

      We may not be able to successfully integrate any businesses, products,
technologies or personnel that we have acquired or will acquire in the future,
and our failure to do so could harm our business. In addition, future
acquisitions may require us to issue dilutive equity securities, incur
substantial debt, or assume contingent liabilities.

OUR FAILURE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS COULD HARM OUR BUSINESS


                                      22.
<PAGE>

      Our success and ability to compete is dependent in part upon our
proprietary technology. The most critical element of our operations is our
sophisticated database management system. We rely primarily on a combination of
copyright and trademark laws, trade secrets and nondisclosure agreements to
protect our proprietary rights. We currently have no patents. We typically enter
into confidentiality and proprietary information agreements with our employees
and limit access to and distribution of our software, documentation and other
proprietary information. Our protection of this system has served as a barrier
to our competitors who have not been able to duplicate such a database
management system. If competitors were able to duplicate our database management
system, we would lose our competitive advantage and face increased competition.
Our confidentiality agreements and confidentiality procedures may not be
adequate to deter misappropriation or independent third-party development of our
technology or to prevent an unauthorized third party from obtaining or using
information that we regard as proprietary. For example, attempts may be made to
copy aspects of our technology or to obtain and use information that we regard
as proprietary. Accordingly, we may not be able to protect our proprietary
rights against unauthorized third-party copying or use. Any infringement of our
proprietary rights could materially adversely affect our future operating
results. Furthermore, policing the unauthorized use of our products is difficult
and litigation may be necessary in the future to enforce our intellectual
property rights, to protect our trade secrets or to determine the validity and
scope of the proprietary rights of others. Such litigation could result in
substantial costs and diversion of resources and could materially adversely
affect our future operating results.

THIRD PARTIES MAY ASSERT INFRINGEMENT CLAIMS AGAINST US OR OUR CUSTOMERS

      Third parties may assert infringement claims against us or our customers.
We believe that our technological processes do not infringe upon the proprietary
rights of others, but we cannot assure you that third parties will not assert
claims that we violate their rights. In addition, we believe that we have the
right to use the data we collect for our database, but we cannot assure you that
third parties will not assert claims that we violate their trade secrets or
copyrights. Although there has not been any claim of this type in the past, any
claims or litigation, should they occur, could subject us to significant
liability for damages or could result in invalidation of our rights. In
addition, even if we prevail, litigation could be time consuming and expensive
to defend, and could result in diversion of our time and attention. Any claims
or litigation from third parties may also result in limitations on our ability
to use the trademarks and other intellectual property subject to these claims or
litigation. We may be required to enter into arrangements with the third parties
responsible for the claims or litigation, which may be unavailable on
commercially reasonable terms, if at all.

SYSTEM FAILURE, INTERRUPTIONS OR SECURITY BREAKS IN THE TELECOMMUNICATIONS
INFRASTRUCTURE OF OUR COMPUTER AND TELEPHONY SYSTEMS MAY HARM OUR BUSINESS

      Our operations are dependent on our ability to protect our computer and
telephony systems and databases against damage or system interruptions from
fire, earthquake, power loss, telecommunications failure, technical failure,
unauthorized entry or other events beyond our control. We receive data from
dealerships primarily via modem. In addition, a significant portion of our
business involves contacting dealership customers telephonically. Our mailings
to dealership customers are dependent upon the data generated using our computer
systems. A significant amount of our computer and telephony equipment is located
at a single site in San Diego, California. In the future, we intend to use the
Internet as a platform for delivery of our services. Any actual or perceived
degradation in the performance of the Internet as a whole could undermine the
benefits of our services. In addition, the Internet could lose its viability as
a commercial medium due to delays in the development or adoption of new
technology required to accommodate increased levels of Internet activity or due
to increased government regulation. Unanticipated problems with our computer,
telephony or other communications systems may result in a significant system
outage or data loss, which could result in interruptions in our operations.
Despite implementing security measures, our infrastructure may also be
vulnerable to break-ins, computer viruses or other disruptions caused by our
customers or other third parties. Our business will be materially adversely
affected if there is any damage to our databases, failure of communication
links, security breach or other loss that causes interruptions in our
operations.

WE MAY DEPEND ON THE INTERNET AS A DELIVERY PLATFORM FOR OUR PRODUCTS AND
SERVICES, WHICH WILL REQUIRE OUR INTEGRATION OF NUMEROUS INTERNAL AND
EXTERNAL RESOURCES


                                      23.
<PAGE>

      Our growth strategy depends in part on providing database management and
direct marketing services for automobile dealerships and manufacturers over the
Internet. This includes delivering RESULTS Program reminder notices via e-mail,
providing certain information contained in our databases on an outsourced basis
to Web sites, providing dealerships and their customers with an on-line
appointment reservations system, providing dealership customers with the ability
to provide on-line feedback to dealerships, providing dealerships access to our
database via the Internet, and allowing dealerships to fulfill promotions
on-line. Development and implementation of any of these and other services using
the Internet is subject to substantial risks and uncertainties.

      We have limited experience providing database management and direct
marketing services over the Internet. We may need to hire additional personnel
and expend significant resources to develop these services. The manner in which
we intend to provide and charge for these services is new and unproven and may
result in lower revenues or gross margins. We may need to enter into agreements
with third parties, such as Internet service providers, to implement these
services. Privacy concerns may cause consumers to resist providing the personal
data necessary to support these services in development. For example, consumers
may be unwilling to disclose their identity, vehicle identification information
or e-mail addresses. Moreover, our ability to disseminate data generated from
our databases may be limited by agreements with our customers. Various system
failures or delays may decrease our ability to effectively deliver information
contained in our databases to automobile dealerships, manufacturers, dealership
customers or Web sites. Our servers and network infrastructure may not be able
to handle the volume of data traffic generated as a result of the deployment of
these new services. Implementation of an Internet-based reservations system will
require us to interface with dealership service department appointment
calendars, which will be complex and may be prone to errors. Our future services
using the Internet may not be successfully developed and implemented, widely
accepted or result in future revenues.

      The widespread acceptance and adoption of the Internet by automobile
dealerships and manufacturers to conduct business and exchange information is
likely to occur only if greater efficiencies and improvements in service can be
demonstrated to these dealerships and manufacturers. The recent growth in
Internet traffic has caused frequent periods of decreased performance and
reliability. Our ability to provide services over the Internet will be
ultimately limited by and dependent upon the speed and reliability of the
Internet. Additionally, the tax treatment of the Internet and e-commerce is
currently unsettled. A number of proposals have been made at the federal, state
and local level and by certain foreign governments that could impose taxes on
the sale of goods and services and certain other Internet activities.
Furthermore, costs of communication over the Internet may increase substantially
if access fees are imposed on Internet service providers and on-line service
providers. If we are unable to adapt our business to meet changes in the
database management and direct marketing industry as a result of growth in the
Internet, our business may be harmed.

WE MAY EXPEND SUBSTANTIAL FUNDS AND MANAGEMENT EFFORT TO IMPLEMENT OUR
INTERNET STRATEGY WITH NO ASSURANCE OF SUCCESSFULLY SELLING OUR PRODUCTS OR
SERVICES THROUGH THIS MEDIUM

      We recently incorported a wholly owned subsidiary, Carabunga.com, Inc.,
which will utilize the Internet as a marketing tool for dealership
promotions.  The Internet site has not yet been completed, and we cannot
assure you that it will be dveloped in a timely or cost-effective manner.
Furthermore, once the site is developed, it is possible that dealerships will
not utilize the site to the extent of our expectations, which would lead to
lower than expected revenues form the Carabunga.com product line and harm our
financial results.

      Our ability to successfully provide our services over the Internet may
require us to enter into callaborative arrangements with other partners.  Our
ability to enter into these arrangements depends in part upon our ability to
convine potential collaborators that we will be successful in deploying our
technology and services over the Internet.  This will require our management
to expend substantial time and effort to educate potential collaborators on
the benefits that can be obtained by using our technology and services on the
Internet. In January 2000, we entered into a letter of intent with ADP in
which we agreed to explore the possibility of providing our services to
ADP's customers on ADP's myautogarage.com web site. This letter of intent has
since lapsed. We cannot assure you that the expenditure of substiantial fund
and management effort to pursue this or other collaborative efforts will
result in an arrangement yielding significant revenues to us.

WE COULD BE ADVERSELY AFFECTED BY GOVERNMENTAL REGULATIONS

      We are subject to varying degrees of federal, state and local
telemarketing regulation. The jurisdiction of the Federal Trade Commission
("FTC") and the Federal Communications Commission ("FCC") extends to the
telemarketing industry, including some of the services we provide to our
customers. The FTC has issued regulations which prohibit certain types of
deceptive or abusive telemarketing acts or practices. Regulations issued by
the FCC place limits on the use of certain types of equipment used in
telephone solicitation, require telemarketing companies to provide certain
identifying information, and require the maintenance of a list of persons who
do not wish to be called. We believe that we are not currently engaging in,
and we do not plan to engage in, any of the activities prohibited by the FTC
and FCC regulations. The FCC and FTC regulations have,

                                      24.
<PAGE>

therefore, not materially restricted our operations. If future regulations are
adopted by the FCC and FTC or other regulatory bodies, our business may be
harmed. In addition, violations may occur in the future as a result of human
error, equipment failure or other causes. Our failure to comply with applicable
domestic and international regulations could also harm our business.
Furthermore, the media often publicizes perceived non-compliance with consumer
protection regulations and violations of notions of fair dealing with consumers.
Any such publicity is potentially damaging to our reputation, client
relationships and consumer acceptance and loyalty.

WE MAY BE UNABLE TO RAISE CAPITAL IN THE FUTURE

      Various elements of our growth strategies will require additional capital.
We believe that our existing capital resources together with cash generated from
operations and amounts available under our line of credit will be sufficient to
meet our capital requirements for at least the next twelve months. However, our
capital requirements depend on several factors, including market acceptance of
our services, the ability to expand our customer base, the development of new
services, the expansion of our sales and marketing capabilities, potential
acquisitions and other factors. If capital requirements vary materially from
those currently planned, we may require additional financing sooner than
anticipated. Our credit facility with Silicon Valley Bank expires in May 2000.
If additional funds are raised through the issuance of equity securities, our
stockholders may experience additional dilution, or such equity securities may
have rights, preferences or privileges senior to those of the holders of our
common stock. Additional financing may not be available when needed on terms
favorable to us or at all. If adequate funds are not available, we may be unable
to develop or enhance our services, take advantage of future opportunities or
respond to competitive pressures.

WE MAY BE EXPOSED TO LIABILITY FROM OUR MANAGEMENT OF DEALERSHIP SERVICE
DEPARTMENTS

      Our wholly-owned subsidiary, Newgen Management Services
provides personnel to manage the service departments of automobile
dealerships. We could be liable for damages resulting from certain claims
against such service departments. Such claims could include, but are not
limited to, improper repairs of automobiles, employment law issues or
injuries related to the workplace. We can not assure that we will be
successful in our defense against any such claims, or that any resulting
adverse judgments will not harm our business.

WE MAY BE EXPOSED TO RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION

      Currently, we provide services to automobile dealerships in the United
States and Canada. We may expand our database management, customized direct
marketing services and teleservices to automobile dealerships in foreign markets
other than Canada. We have had limited experience providing services outside the
United States. Conducting business outside of the United States is subject to
certain risks, including:

      -  longer accounts receivable collection cycles;

      -  difficulties in managing operations across disparate geographic areas;

      -  difficulties associated with enforcing agreements and collecting
         receivables through foreign legal systems;

      -  changes in a specific country's or region's political or economic
         conditions;

      -  trade protection measures;

      -  import or export licensing requirements;

      -  fluctuations in currency exchange rates;

      -  potential adverse tax consequences;

      -  unexpected changes in regulatory requirements; and

      -  reduced or limited protection of our intellectual property rights in
         some countries.


                                      25.
<PAGE>

      In addition, we may be unable to successfully market, sell and deliver our
services in foreign markets and we cannot be certain that one or more of such
factors will not harm our future international operations.

WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS UNDER OUR CERTIFICATE OF
INCORPORATION, BYLAWS AND DELAWARE LAW THAT COULD DELAY OR PREVENT AN
ACQUISITION OF OUR COMPANY THAT MAY BE BENEFICIAL TO OUR STOCKHOLDERS

      Provisions of our certificate of incorporation, our bylaws and Delaware
law could make it more difficult for a third party to acquire us, even if doing
so would be beneficial to our stockholders. These provisions could discourage
potential take-over attempts and could adversely affect the market price of our
common stock. Because of these provisions, our stockholders may not be able to
receive a premium on their investment.

ITEM 2.  PROPERTIES

      We lease a facility in San Diego, California having approximately 28,000
square feet of space. The current lease for this facility expires in September
2001. In addition, we lease a second facility in San Diego, California having
approximately 40,000 square feet of space. This facility houses our teleservice
operations. The lease for this facility expires in February 2001. We also lease
a facility in Amityville, New York, that has approximately 17,500 square feet of
space. The Amityville facility houses our Computer Care division, and we expect
to vacate the facility during the second quarter of 2000. We intend to lease a
new facility in San Diego, California, in the second quarter of 2001 in which we
will consolidate our current San Diego operations.

ITEM 3.  LEGAL PROCEEDINGS

      The Company is not currently involved in any pending legal proceedings
that individually, or in the aggregate, are material.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters were submitted to a vote of security holders during the quarter
ended December 31, 1999.


                                      26.
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

      (a) The Company's common stock began trading on The Nasdaq National
Market under the symbol "NWGN" on May 21, 1999. As of March 15, 2000, there
were approximately 1,359 holders of record of the Company's common stock. The
following table sets forth the quarterly high and low closing sale prices for
our common stock in 1999:

<TABLE>
<CAPTION>
QUARTER ENDED                                                  HIGH       LOW
-------------                                                  ----       ---
<S>                                                           <C>        <C>
March 31, 1999.............................................      N/A        N/A
June 30, 1999 (beginning May 21)...........................   $13.75     $10.19
September 20, 1999.........................................   $13.63     $ 9.00
December 31, 1999..........................................   $13.25     $ 9.25
</TABLE>

      We have never declared or paid any cash dividends on our common stock,
currently intend to retain any future earnings to finance the growth and
development of our business and do not anticipate paying any cash dividends
in the foreseeable future.

      (b) The effective date of our registration statement on Form S-1 (No.
333-62703) relating to our initial public offering was May 20, 1999. A total
of 2,724,370 shares of our common stock in the aggregate were sold at a price
of $13.00 per share to an underwriting syndicate led by Hambrecht & Quist
LLC, BancBoston Robertson Stephens Inc. and Dain Rauscher Wessels. The
offering commenced on May 21, 1999 and ended on May 25, 1999. The initial
public offering resulted in gross proceeds of approximately $35.4 million, of
which $2.5 million was applied toward the underwriting discount. Expenses
related to the offering totaled approximately $800,000. Net proceeds to the
Company were $32.1 million. From the time of receipt through December 31,
1999, the net proceeds were used in the acquisition of Computer Care ($11.6
million), for purchases of property and equipment related to operations ($1.7
million). The remaining $18.8 million was applied to net purchases of
short-term investments in corporate commercial paper and government
securities. We had expected to spend $2.0 million for an investment in a
joint venture with autobuytel.com. The letter of intent relating to this
investment has lapsed.

ITEM 6.  SELECTED FINANCIAL DATA

      The following table summarizes certain selected historical financial data
of the Company for the five most recently completed fiscal years. This
historical data should be read in conjunction with the Consolidated Financial
Statements of the Company and the related notes thereto in Item 8 and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Item 7.

<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                   ----------------------------------------------------------------
                                   1999           1998           1997           1996           1995
                                   ----           ----           ----           ----           ----
                                   (IN THOUSANDS, EXCEPT PER SHARE AND SUPPLEMENTAL OPERATING DATA)
<S>                                <C>            <C>            <C>            <C>            <C>
CONSOLIDATED  STATEMENTS OF
   OPERATIONS DATA:
      Revenues:
        Database marketing
           services.......         $49,457        $31,513        $20,974         $9,771        $ 1,824
        Consulting services          5,731          8,593          5,440          1,858          1,790
                                   -------        -------        -------         ------        -------
           Total revenues.          55,188         40,106         26,414         11,629          3,614
                                   -------        -------        -------         ------        -------
      Cost of revenues:
        Cost of database
           marketing
           services.......          27,620         21,157         14,232          6,796          1,673
        Cost of consulting
           services.......           4,888          6,695          4,233          1,699          1,798
        Installation costs           1,459          1,411          1,932          1,656            656
                                   -------        -------        -------         ------        -------
           Total cost of
              revenues....          33,967         29,263         20,397         10,151          4,127
                                   -------        -------        -------         ------        -------
           Gross profit
              (loss)......          21,221         10,843          6,017          1,478           (513)
                                   -------        -------        -------         ------        -------
      Operating costs:
        Selling, general
           and
           administrative
           expenses.......          12,585          8,876          6,234          5,396          2,178
        Technology and
           product
           development....           4,289          5,101          1,554            544            117
        Amortization of
           goodwill.......             107              -              -              -              -
                                   -------        -------        -------         ------        -------
           Total operating
              costs.......          16,981         13,977          7,788          5,940          2,295
                                   -------        -------        -------         ------        -------
        Income (loss) from
           operations.....           4,240         (3,134)        (1,771)        (4,462)        (2,808)
        Interest income
           (expense), net.             726            (69)          (418)          (229)            (3)
                                   -------        -------        -------         ------        -------
        Income (loss),
           before tax.....           4,966         (3,203)        (2,189)        (4,691)        (2,811)


                                      27.
<PAGE>

        Income Taxes......             131              -              -              -              -
                                   -------       --------       --------       --------       --------
        Net income (loss).         $ 4,835       $ (3,203)      $ (2,189)      $ (4,691)      $ (2,811)
                                   =======       ========       ========       ========       ========
      Basic net income
        (loss) per share..         $   .57       $  (1.21)      $  (0.62)      $  (1.25)      $  (0.75)
                                   =======       ========       ========       ========       ========

      Diluted net income
        (loss) per
        share.............         $   .50       $  (1.21)      $  (0.62)      $  (1.25)      $  (0.75)
                                   =======       ========       ========       ========       ========

      Shares used in
        basic per
        share
        calculation.......           7,638          3,767          3,767          3,767          3,767
                                   =======       ========       ========       ========       ========

      Shares used in
        diluted per
        share
        calculation.......           9,740          3,767          3,767          3,767          3,767
                                   =======       ========       ========       ========       ========

SUPPLEMENTAL OPERATING
   DATA (UNAUDITED)
      Number of dealerships          5,175          1,902          1,285            802            177
      Number of active
        names.............       7,112,921      4,128,865      2,905,484      1,970,738        396,213
</TABLE>

Number of dealerships at December 31, 1999 includes 2,609 dealers for
Computer Care

Number of active names at December 31, 1999, includes
1,565,400 estimated active names for Computer Care

<TABLE>
<CAPTION>
                                                                          DECEMBER 31,
                                                       --------------------------------------------------------
                                                       1999       1998          1997        1996           1995
                                                       ----       ----          ----        ----           ----
                                                                          (IN THOUSANDS)
<S>                                                    <C>           <C>         <C>           <C>              <C>
CONSOLIDATED BALANCE SHEET DATA:
      Cash, cash equivalents, and short-term
        investments..............................     $23,268       $817        $4,630        $128             $-
      Working capital............................      26,279      2,558         6,291         484           (15)
      Total assets...............................      51,095     12,772        12,302       5,492          1,190
      Long-term debt, less current maturities....       1,225        874           435       1,264             24
      Redeemable convertible preferred stock.....           -     16,050        14,679       5,422              -
      Total stockholders' equity (deficit).......      42,347   (11,133)       (6,815)     (4,494)          (477)
</TABLE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

      THE FOLLOWING DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF NEWGEN SHOULD BE READ IN CONJUNCTION WITH THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO INCLUDED
ELSEWHERE IN THIS FORM 10-K.

      CERTAIN STATEMENTS SET FORTH BELOW CONSTITUTE "FORWARD-LOOKING
STATEMENTS". SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISK,
UNCERTAINTIES AND OTHER FACTORS INCLUDING, BUT NOT LIMITED TO, THOSE DISCUSSED
HEREIN, THAT MAY CAUSE OUR ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS, OR THAT
OF OUR INDUSTRY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE,
OR ACHIEVEMENTS OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. GIVEN THESE
UNCERTAINTIES, INVESTORS AND PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY DISCLAIMS ANY
OBLIGATION TO UPDATE INFORMATION CONTAINED IN ANY FORWARD-LOOKING STATEMENT.


                                      28.
<PAGE>

OVERVIEW

      The Company provides customized, outsourced database management, direct
marketing and related services, including consulting, for service departments
of automobile dealerships and automobile manufacturers. The Company has
expertise both in database marketing and customer retention services, as well
as an in-depth knowledge of automobile service department operations.

      Newgen generates revenue from database marketing services and
consulting services. Our revenues from database marketing services are
derived primarily from our customer retention services, including the RESULTS
Program. Database marketing services comprised 90% and 79% of our total
revenues for the years ended December 31, 1999 and 1998, respectively. For
the years ended December 31, 1999 and 1998, our revenues from consulting
services were derived from consulting services provided to Ford Motor Company
and its dealerships. Consulting services comprised 10% and 21% of our total
revenues for the years ended December 31, 1999 and 1998, respectively. We
have increased our customer base from approximately 177 dealerships at
December 31, 1995 to 5,175 dealerships at December 31, 1999. Our revenues
grew at a rate of 38% to $55.2 million in 1999 from $40.1 million in 1998.

      Revenues for the RESULTS program are based on the number of active
names in a dealership's database, typically a fixed number determined by the
dealership. The Company generally invoices each dealer on a monthly basis in
advance. Revenues for the Company's consulting services are based principally
on a per diem rate for the services it provides. The Company is also
reimbursed for travel expenses and associated costs it incurs in providing
consulting services, which are included as revenues. The Company recognizes
all of its revenues in the month during which it performs the related
database marketing or consulting services.

      The Company derives a significant portion of its revenues from Ford and
Ford dealerships. Although each Ford dealership utilizing the Company's
database marketing services enters into a separate contract with the Company,
collection of receivables from Ford dealerships is centralized through Ford's
accounting department. The Company's current consulting engagement with Ford
relating to the implementation of the Around The Wheel program for certain
Ford dealers has been substantially completed. However, Ford has extended
certain maintenance aspects of the project through September 2000. Consulting
revenue is expected to decrease as a result of the completion of the
implementation portion of the Around The Wheel contract. The Company is not
currently seeking a commitment from Ford for new consulting engagements
beyond September 2000. A majority of the Company's database marketing
services are attributable to Ford dealerships. During the years ended
December 31, 1999 and 1998, sales of RESULTS Program to Ford dealerships
represented 53% and 54% of total revenues, respectively. The Company
continues to provide data mining services to Ford Motor Company. One hundred
percent of consulting services were provided to Ford during such periods.

      Cost of revenues consists of database marketing services costs, consulting
costs and installation costs. Costs of database marketing services include the
printing and mailing of letters, as well as the costs of the teleservice
contacts of dealership customers. The costs of database marketing services also
include all costs of managing and purifying the dealership databases, as well as
the costs of customer service and customer satisfaction departments. Costs of
consulting include the direct costs of consulting personnel, as well as the cost
of any independent consultants subcontracted by the Company. Costs of consulting
also include costs of travel and associated costs incurred by the Company's
Consulting Division. Installation costs include the direct costs (excluding
sales commissions) of implementing the Company's program at dealerships and the
costs of the initial download, setup and purification of the dealership's
customer database. These costs are expensed as incurred and represent a one-time
charge for each new dealership added to the Company's customer base. As a
result, these costs are expected to decrease as a percentage of total revenues
as database marketing services revenues increase, unless we install a greater
number of dealerships than in the past. Installation costs are presented as a
separate line item to illustrate investment in implementing new dealerships. For
the purposes of calculating the gross profit associated with database marketing
services in Management's Discussion and Analysis of Financial Condition and
Results of Operations, installation costs are added to cost of database
marketing services.


                                      29.
<PAGE>

      Operating expenses consist of fixed costs, such as selling, general and
administrative expenses, and technology and product development costs. The
Company anticipates that operating expenses will increase as it develops and
introduces new services and increases its customer base. Historically, the
Company has been able to leverage operating expenses over a growing revenue
base, and to the extent that the business continues to grow, the Company
expects that operating expenses as a percentage of total revenues will
continue to decline even though they are expected to increase in absolute
dollars. However, because the Company is generally unable to significantly
reduce expenses in the short term to compensate for any unexpected revenue
shortfall, any such shortfall would have an immediate adverse effect on the
business, results of operations and financial condition. Selling costs
include costs of internal sales department, as well as commissions earned by
sales representatives. General and administrative costs include accounting,
payroll and human resources functions. General and administrative costs also
include other non-allocated costs, such as professional fees and general
corporate services. Technology and product development costs include the cost
of programming personnel who enhance current services and develop new
services. Technology and product development cost also include expenses
related to the software rewrite to the core database management system. Due
to major deficiencies in the functionality of the software rewrite, the
Company elected in the fourth quarter of 1999, not to deploy the software
rewrite. The Company has expensed all costs associated with the software
rewrite and has informed the vendor that these deficiencies exist. Contract
termination negotiations are in progress.

      As of December 31, 1999, the Company had net operating loss carryforwards
for federal income purposes of approximately $2.5 million. These net operating
loss carryforwards expire in various years beginning in 2009. The net deferred
asset is fully reserved because of uncertainty regarding its realizability.
Utilization of the Company's net operating loss carryforwards may be limited as
a result of certain changes in the Company's ownership.

      On November 30, 1999, the Company acquired Computer Care, a division of
the Dealer Services Group of Automatic Data Processing, Inc. ("ADP"). Under
the terms of the agreement, the Company paid approximately $11.0 million in
cash at closing, excluding transaction costs, and may pay up to an additional
$9.0 million in cash dependent on certain earn-out criteria. The Company
acquired a business that services over 2,500 dealerships. These include
approximately 1,100 manufacturer accounts and 1,100 individual dealerships to
whom the Company will be providing database marketing services. The
acquisition has been acounted for using the purchase method of accounting.
The operations of Computer Care are included in Newgen's results of
operations and financial position subsequent to the date of acquisition.
Acquisition goodwill of $11.6 million is being amortized on a straight-line
basis over nine years.

COMPARISON OF YEARS ENDED DECEMBER 31, 1999 AND 1998

      REVENUES. Total revenues increased by $15.1 million, or 38%, to $55.2
million in 1999 from $40.1 million in 1998. Revenues from database marketing
services increased by $17.9 million, or 57%, to $49.5 million in 1999 from
$31.5 million in 1998. The increase in database marketing services revenues
was primarily due to a net increase of almost 700 RESULTS Program customers.
To a lesser extent, the increase was due to our acquisition of Computer Care,
as well as improved operations, which allowed us to eliminate certain
customer discounts and credits. Revenues from consulting services decreased
by $2.9 million, or 33%, to $5.7 million in 1999 from $8.6 million in 1998.
The decrease in consulting services revenues was primarily due to the fact
that the Company has completed its implementation of the Around The Wheel
consulting project in almost all the Company's target dealerships.

      GROSS PROFIT. Gross profit increased by $10.4 million, or 96%, to $21.2
million in 1999 from $10.8 million in 1998. As a percentage of total
revenues, gross profit increased to 38% in 1999 from 27% in 1998. Gross
profit from database marketing services increased by $11.4 million, or 128%,
to $20.4 million in 1999 from $8.9 million in 1998. This increase was
primarily due to leverage obtained by spreading new customer installation
costs over a larger revenue base and greater efficiency in operations,
derived principally from the deployment of our Aspect telephone system. Gross
profit from consulting services decreased by $1.1 million, or 56% to $843,000
in 1999 from $1.9 million in 1998. This decrease was primarily due to the
completion of the Around The Wheel consulting project and due to lower
utilization of consulting personnel.

                                      30.
<PAGE>

      SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses increased by $3.7 million, or 42%, to $12.6 million
in 1999 from $8.9 million in 1998. The dollar increase was due primarily to
the continued growth of the marketing department and the addition of sales
personnel and related infrastructure. As a percentage of revenues, selling,
general and administrative expenses increased to 22.8% in 1999 from 22.1% in
1998. This increase was due primarily to increased infrastructure associated
with being a public company.

      TECHNOLOGY AND PRODUCT DEVELOPMENT. Technology and product development
expenses decreased by $812,000, or 16%, to $4.3 million in 1999 from $5.1
million in 1998. As a percentage of revenues, technology and product
development expenses decreased to 8% in 1999 from 13% in 1998. In connection
with the Company's software rewrite, expenses were incurred of $168,000 and
$2.8 million for 1999 and 1998, respectively. If the software rewrite
expenses were excluded, technology and product development expenses would
have increased by $1.9 million, or 82% to $4.1 million in 1999 from $2.3
million in 1998. As a percentage of revenues, technology and product
development expenses would have increased to 8% in 1999 from 6% in 1998. The
dollar increase and the percentage increase were primarily due to the
Company's decision to invest heavily in the development of new services and
the increased costs associated with the difficulty of attracting qualified
full time employees. As a result, the Company was required to pay higher
salaries and utilize higher cost contractors. Due to major deficiencies in
the functionality of the software rewrite, the Company elected in the fourth
quarter of 1999 not to deploy the software rewrite. The Company has informed
the vendor that these deficiencies exist and contract termination
negotiations are in progress.

      OTHER INCOME (EXPENSE). Net interest and investment income increased to
$726,000 in 1999 from an expense of $69,000 in 1998. This increase was
primarily due to increases in interest and investment income related to
higher cash and short-term investments balances resulting from the initial
public offering in May of 1999.

COMPARISON OF YEARS ENDED DECEMBER 31, 1998 AND 1997

      REVENUES. Total revenues increased by $13.7 million, or 52%, to $40.1
million in 1998 from $26.4 million in 1997. Revenues from database marketing
services increased by $10.5 million, or 50%, to $31.5 million in 1998 from
$21.0 million in 1997. The increase in database marketing services revenues
was primarily due to a net increase of over 600 RESULTS Program customers. To
a lesser extent, the increase was due to our improved operations, which
allowed us to eliminate certain customer discounts and credits. Revenues from
consulting services increased by $3.2 million, or 58%, to $8.6 million in
1998 from $5.4 million in 1997. The increase in consulting services revenues
was primarily due to the continuation of the Around the Wheel Program for
Ford throughout 1998.

      GROSS PROFIT. Gross profit increased by $4.8 million, or 80%, to $10.8
million in 1998 from $6.0 million in 1997. As a percentage of total revenues,
gross profit increased to 27.0% in 1998 from 22.8% in 1997. Gross profit from
database marketing services increased by $4.1 million, or 86%, to $8.9 million
in 1998 from $4.8 million in 1997. This increase was primarily due to leverage
obtained by spreading new customer installation costs over a larger revenue base
and greater efficiency in operations. Gross profit from consulting services
increased by $691,000, or 57% to $1.9 million in 1998 from $1.2 million in 1997.
This increase was primarily due to our ability to fully utilize our consulting
personnel as a result of the Around the Wheel Program throughout 1998.

      SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses increased by $2.6 million, or 42%, to $8.9 million in 1998 from $6.2
million in 1997. The dollar increase was due primarily to the establishment of
the marketing department and the addition of sales personnel and related
infrastructure. To a lesser extent, the increase resulted from the write-off in
December 1998 of $600,000 in deferred expenses relating to our previously
delayed initial public offering and increased deferred compensation charges
related to stock options granted in 1997 and 1998. As a percentage of revenues,
selling, general and administrative expenses decreased to 22.1% in 1998 from
23.6% in 1997. This decrease was due primarily to our ability to leverage our
existing infrastructure across a larger revenue base.


                                      31.
<PAGE>

      TECHNOLOGY AND PRODUCT DEVELOPMENT. Technology and product development
expenses increased by $3.5 million, or 228%, to $5.1 million in 1998 from $1.5
million in 1997. As a percentage of revenues, technology and product development
expenses increased to 13% in 1998 from 5.9% in 1997. The dollar increase and the
percentage increase were primarily due to the development of new services and
the addition of technical personnel and related infrastructure in preparation
for the completion of the software rewrite. Software rewrite expenses included
in technology and development expense, for the years ended December 31, 1998 and
1997 were $2.8 million and $617,000, respectively.

      OTHER INCOME (EXPENSE). Net interest expense decreased to $69,000 in
1998 from $419,000 in 1997. This decrease was primarily due to decreases in
the amount of our indebtedness and increases in interest income related to
higher cash balances resulting from our Series B Preferred Stock financing.

LIQUIDITY AND CAPITAL RESOURCES

      Since the Company's inception, the Company has financed its operations
primarily through the sale of equity securities and through borrowings under
the credit facility with Silicon Valley Bank. Through 1998, the Company
raised approximately $14.5 million, net of fees and expenses, through the
sale of preferred stock. In May 1999, the Company completed its initial
public offering and raised net proceeds of approximately $32.1 million. The
acquisition of the Computer Care division of ADP and associated expenses
initially required approximately $11.6 million in cash, which was funded with
cash on hand. Subject to earn-out provisions, the acquisition may require up
to an additional $9.0 million in cash in January 2001.

      Cash provided by (used in) operating activities was $6.8 million and
$(2.4) million for the years ended December 31, 1999 and 1998, respectively.
The increase in cash provided by operating activities was primarily due to
the net income for the year ended December 31, 1999, compared to the net loss
in the same period in 1998.

      Cash used in investing activities was $32.2 million and $1.5 for the
years ended December 31, 1999 and 1998, respectively. The increase in cash
used in investing activities was primarily due to the purchases of short-term
investments, capital expenditures and the acquisition of Computer Care in
November of 1999.

      Cash provided by financing activities was $30.4 million and $58,000 for
the years ended December 31, 1999 and 1998, respectively. The increase in cash
provided by financing activities was primarily due to the proceeds from the
Company's initial public offering.

      The Company has a working capital line of credit with Silicon Valley Bank
that is secured by substantially all of its assets. The total available amount
of the line is $5.0 million, including a $3.3 million sub-limit for securing
letters of credit. Borrowings under this credit facility bear interest at
Silicon Valley Bank prime rate (8.50% at December 31, 1999), plus 1% with
maturity date of May 9, 2000. The Company also has a $2.0 million equipment line
of credit with Silicon Valley Bank that bears an interest rate of Silicon Valley
Bank prime rate plus .5% with the draw period up to March 31, 2000. The credit
facilities contain certain covenants and restrictions, including a limitation on
indebtedness requiring the Company, as of the last day of each quarter, to
maintain a ratio of quick assets to current liabilities of at least 2.50 to 1.0.
At December 31, 1999, no borrowings were outstanding.

      The Company also has two lease lines of credit of $2.0 million each for
equipment acquisitions. These lines of credit expired in December of 1999. The
Company is currently in negotiations with new and existing lenders to acquire
additional equipment financing for fiscal 2000.

      As of December 31, 1999, the Company had approximately $23.3 million of
cash, cash equivalents, and short-term investments. The Company expects to
finance short-term obligations through lease financing, reduction of receivables
and use of cash on hand. The Company may utilize the credit facility with
Silicon Valley Bank to meet short-term needs. The Company believes that its
existing capital resources together with


                                      32.
<PAGE>

cash generated from operations and amounts available under the line of credit
will be sufficient to meet its operating and capital requirements for at
least the next twelve months and its potential earn-out obligation related to
its Computer Care acquisition.

YEAR 2000 COMPLIANCE

      In prior years, the Company discussed the nature and progress of its plans
to become Year 2000 ready. In late 1999, the Company completed its remediation
and testing of systems. As a result of those planning and implementation
efforts, the Company experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes those
systems successfully responded to the Year 2000 date change. The Company is not
aware of any material problems resulting from Year 2000 issues, either with its
products or services, its internal systems, or the products and services of
third parties. The Company will continue to monitor its mission critical
computer applications and those of its suppliers and vendors throughout the Year
2000 to ensure that any latent Year 2000 matters that may arise are addressed
promptly. We have no reason to believe that Year 2000 issues will have a
material impact on our business or financial condition.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

      The Company invests its excess cash in interest-bearing investment-grade
securities that are held for the duration of the term of the respective
instrument. The Company does not utilize derivative financial instruments,
derivative commodity instruments or other market risk sensitive instruments,
positions or transactions in any material fashion. Accordingly, management
believes that, while the investment-grade securities the Company holds are
subject to changes in the financial standing of the issuer of such securities,
it is not subject to any material risks arising from changes in interest rates,
foreign currency exchange rates, commodity prices, equity prices or other market
changes that affect market risk sensitive instruments.

ITEM 8.  FINANCIAL STATEMENTS

      The Company's consolidated financial statements at December 31, 1999
and 1998 and for each of the three years in the period ended December 31, 1999
and the Report of Arthur Andersen LLP, Independent Public Accountants, are
included in this report on Form 10-K on pages F-1 through F-20.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

      None.


                                      33.
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Information regarding Directors is incorporated by reference to the
section entitled "Election of Directors" in the Newgen Results Corporation
definitive Proxy Statement to be filed with the Securities and Exchange
Commission in connection with the Annual Meeting of Stockholders to be held on
June 8, 2000 (the "Proxy Statement"). Information regarding Executive Officers
is set forth in Item 1 of Part I of this Report under the caption "Executive
Officers."

ITEM 11.  EXECUTIVE COMPENSATION

      The information required by this item is incorporated by reference to the
Proxy Statement under the heading "Executive Compensation."

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The information required by this item is incorporated by reference to the
Proxy Statement under the heading "Security Ownership of Certain Beneficial
Owners and Management."

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The information required by this item is incorporated by reference to the
Proxy Statement under the heading "Related-Party Transactions."


                                      34.
<PAGE>

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)   Documents filed as part of the report:

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                          NUMBER
                                                                                          ------
     <S>                                                                                  <C>

     (1) Report of Independent Public Accountants.....................................     F-1
         Consolidated Balance Sheets at December 31, 1999 and 1998....................     F-2
         Consolidated Statements of Operations for Fiscal 1999, 1998 and 1997.........     F-3
         Consolidated Statements of Stockholders' Equity (Deficit) for Fiscal
           1999, 1998 and 1997..........................................................   F-4
         Consolidated Statements of Cash Flows for Fiscal 1999, 1998 and 1997.........     F-5
         Notes to Consolidated Financial Statements...................................     F-7
     (2) Schedule II-Valuation and Qualifying Accounts................................     S-1
</TABLE>

      Financial statement schedules other than those listed above have been
omitted because they are either not required, not applicable or the information
is otherwise included.+

<TABLE>
<CAPTION>
   EXHIBIT      EXHIBIT
  FOOTNOTE       NUMBER                  DESCRIPTION OF DOCUMENT
  --------      -------                  -----------------------
  <S>           <C>        <C>
     (5)          2.1*     Partnership Purchase Agreement, dated October 22,
                           1999, by and among the Registrant, NGR Acquisition
                           Corp., ADP, ADP Financial and Computer Care

     (5)          2.2*     Amendment No. 1 to Partnership Purchase Agreement,
                           dated November 30, 1999, by and among the Registrant,
                           NGR Acquisition Corp., ADP, ADP Financial and
                           Computer Care

     (1)          3.1      Certificate of Incorporation

     (1)          3.2      Amended and Restated Bylaws

     (1)          4.1      Reference is made to Exhibits 3.1 and 3.2

     (1)          4.2      Specimen Stock Certificate

     (1)         10.1+     1996 Equity Incentive Plan (the 1996 Plan)

     (1)         10.2+     Form of Stock Option Agreement of Registrant pursuant
                           to the 1996 Plan

     (1)         10.3+     1998 Equity Incentive Plan, as amended (the 1998
                           Plan)

     (1)         10.4+     Form of Stock Option Agreement of Registrant pursuant
                           to the 1998 Plan

     (1)         10.5+     1998 Non-Employee Directors Stock Option Plan

     (1)         10.6+     1998 Employee Stock Purchase Plan

     (1)         10.7      Restated Investor Rights Agreement by and among the
                           Company and certain stockholders of the Company,
                           dated as of November 26, 1997

     (1)         10.8      Restated Right of First Refusal and Co-Sale Agreement
                           between the Company and certain investors, dated as
                           of November 26, 1997

     (1)         10.9      Master Equipment Lease No. 0053 between the Company
                           and Phoenix Leasing Incorporated, dated as of
                           December 15, 1996

     (1)        10.10      License Agreement between the Company and Service
                           Systems Development Limited Partnership, dated as of
                           October 11, 1995

     (1)        10.11      Amended and Restated Security Agreement between the
                           Company and Silicon Valley Bank, dated March 10, 1998

                10.12      Data Distribution Agreement between the Company and
                           Universal Computer Services, dated as of May 15, 1996

     (1)        10.13      Office Lease between the Company and WCB II Limited
                           Partnership, dated as of July 31, 1996

     (1)        10.14      Office Lease between the Company and Plaza Holdings,
                           Inc., dated as of April 6, 1998

     (1)        10.15*     Purchase Agreement between the Company and Geomel
                           Enterprises, Inc., dated September 4, 1998

</TABLE>

                                      35.
<PAGE>


<TABLE>

<S>             <C>        <C>
     (1)        10.16      Form of Warrant between the Company and the following
                           directors and entities affiliated with directors:
                           Bernard C. Simkin, Murray Simkin Johari Investment
                           Company, Ltd. BankAmerica Ventures, BA Venture
                           Partners II and Capstone Ventures

     (1)        10.17      Promissory Note, as amended, between the Company as
                           borrower and Sam Simkin as lender

     (1)        10.18      Promissory Note, as amended, between the Company as
                           borrower and Jack Simkin, as Trustee for Simkin
                           Children Irrevocable Trust, as lender

     (1)        10.19      General Services Agreement between the Company and
                           Bolder Heuristics, Inc., dated December 25, 1996.

     (1)        10.20      Ford Purchase Order No. 2460 293627 for Consulting
                           Services

     (1)        10.21      Ford Purchase Order No. A50 P099 002382 for Data
                           Extraction Services

     (1)        10.22+     Form of Employment Agreement dated April 29, 1999
                           between the Company and the following officers:
                           Gerald L. Berowitz, Samuel Simkin, Leslie J. Silver
                           and James K. Roche

     (2)        10.23      Amendment to General Services Agreement, dated as of
                           July 15, 1999 between the Company and Information &
                           Graphics Systems, Inc.

     (3)        10.24      Industrial Lease Agreement dated October 22, 1999
                           between the Registrant and the Irvine Company

     (3)        10.25      Equipment Lease Extension dated September 30, 1999
                           between the Registrant and Phoenix Growth Capital

     (3)        10.26*     Service Agreement dated October 4, 1999 between the
                           Registrant and Mitsubishi Motor Sales of America,
                           Inc.

     (5)        10.27*     Data Service Agreement, dated November 30, 1999, by
                           and among the Registrant and ADP

                 21        Subsidiaries of the Registrant

                 23.1      Consent of Arthur Andersen LLP, Independent Public
                           Accountants

                 24.1      Power of Attorney. Reference is made to page 39

                 27.1      Financial Data Schedule
</TABLE>

-----------


+     This exhibit is a managment contract or compensatory plan or
      arrangement.

*     Confidential treatment has been requested with respect to certain
      portions of this exhibit. Omitted portions have been filed separately with
      the Securities and Exchange Commission.

(1)   Previously filed as exhibits of the same number with the Registrant's
      Registration Statement on Form S-1 (No. 333-62703) or amendments thereto,
      and incorporated herein by reference.

(2)   Previously filed as exhibits of the same number with the Registrant's
      Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, and
      incorporated herein by reference.

(3)   Previously filed as exhibits of the same number with the Registrant's
      Quarterly Report on Form 10-Q for the quarter ended September 30, 1999,
      and incorporated herein by reference.

(4)   Previously filed as exhibit of the same number with the Registrant's
      Current Report on Form 8-K dated November 1, 1999, and incorporated herein
      by reference.

(5)   Previously filed as exhibits of the same number with the Registrant's
      Current Report on Form 8-K dated December 16, 1999, and incorporated
      herein by reference.


                                      36.
<PAGE>


(b)   Form 8-K's

      During the quarter ended December 31, 1999, the Registrant filed two
current reports on Form 8-K. On November 1, 1999, the Registrant filed a Current
Report on Form 8-K regarding the Registrant's announcement of its agreement to
acquire Computer Care, a division of the Dealer Services Group of ADP. On
December 16, 1999, the Registrant filed a Current Report on Form 8-K to report
that the acquisition of Computer Care had been consummated. On February 14,
2000, the Registrant amended the Current Report on Form 8-K filed on December
16, 1999 to disclose the financial statements of the newly-combined entities.



                                      37.
<PAGE>


                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

March 30, 2000
                                        NEWGEN RESULTS CORPORATION

                                        By   /s/ GERALD L. BENOWITZ
                                             ----------------------------------
                                             Gerald L. Benowitz,
                                             PRESIDENT, CHIEF EXECUTIVE OFFICER
                                             AND CHAIRMAN

                                POWER OF ATTORNEY

    Know all persons by these presents, that each person whose signature appears
below constitutes and appoints Gerald L. Benowitz and Samuel Simkin, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place, and stead, in
any and all capacities, to sign any and all amendments to this Report, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming that all said attorneys-in-fact
and agents, or any of them or their or his substitute or substituted, may
lawfully do or cause to be done by virtue thereof.

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of Registrant in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>

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


              /s/ GERALD L. BENOWITZ                  President, Chief Executive Officer and       March 30, 2000
--------------------------------------------------                   Chairman
                Gerald L. Benowitz


                /s/ SAMUEL SIMKIN                            Chief Financial Officer,              March 30, 2000
--------------------------------------------------      Senior Vice President and Secretary
                  Samuel Simkin


                   /s/ BOB DORF                                      Director                      March 30, 2000
--------------------------------------------------
                     Bob Dorf


                /s/ EUGENE FISCHER                                   Director                      March 30, 2000
--------------------------------------------------
                  Eugene Fischer


                /s/ H. ROBERT GILL                                   Director                      March 30, 2000
--------------------------------------------------
                  H. Robert Gill


                 /s/ JESS MARZAK                                     Director                      March 30, 2000
--------------------------------------------------
                   Jess Marzak


                 /s/ JOHN MORAGNE                                    Director                      March 30, 2000
--------------------------------------------------
                   John Moragne


                /s/ ABRAHAM SIMKIN                                   Director                      March 30, 2000
--------------------------------------------------
                  Abraham Simkin


              /s/ BERNARD C. SIMKIN                                  Director                      March 30, 2000
--------------------------------------------------
                Bernard C. Simkin


                 /s/ GARY SIMKIN                                     Director                      March 30, 2000
--------------------------------------------------
                   Gary Simkin

</TABLE>



                                      38.
<PAGE>


<TABLE>

<S>                                                   <C>                                          <C>


               /s/ TODD A. SPRINGER                                  Director                      March 30, 2000
--------------------------------------------------
                 Todd A. Springer


               /s/ BERT WINEMILLER                                   Director                      March 30, 2000
--------------------------------------------------
                 Bert Winemiller


</TABLE>



                                      39.
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Newgen Results Corporation:

We have audited the accompanying consolidated balance sheets of NEWGEN
RESULTS CORPORATION (a Delaware corporation) and subsidiaries as of December
31, 1999 and 1998, and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for each of the three years in
the period ended December 31, 1999. These consolidated financial statements
and schedule referred to below are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements and schedule 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 Newgen Results Corporation and
subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index of
the consolidated financial statements is presented for purposes of complying
with the Securities and Exchange Commission's rules and is not part of the
basic consolidated financial statements. The schedule has been subjected to
the auditing procedures applied in the audits of the basic consolidated
financial statements and, in our opinion, fairly states, in all material
respects, the financial data required to be set forth therein in relation to
the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

San Diego, California
February 23, 2000


                                      F-1
<PAGE>


                   NEWGEN RESULTS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets - December  31, 1999 and 1998

<TABLE>
<CAPTION>

                                                                                       1999           1998
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                                      $  5,849,906    $    816,753
   Short-term investments, available-for-sale                                       17,417,971            --
   Accounts  receivable,  net of allowance for doubtful accounts of
    $347,000 and $299,000, respectively                                              9,471,175       8,211,773
   Prepaid expenses and other                                                          972,301         376,636
                                                                                  ------------    ------------
              Total current assets                                                  33,711,353       9,405,162

PROPERTY AND EQUIPMENT, net                                                          5,719,542       2,931,836
GOODWILL, net                                                                       11,444,279            --
OTHER ASSETS                                                                           219,337         435,337
                                                                                  ------------    ------------
              Total assets                                                        $ 51,094,511    $ 12,772,335
                                                                                  ============    ============


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
   Accounts payable                                                               $  4,395,736    $  2,787,802
   Accrued and other current liabilities                                             2,059,773       2,324,041
   Notes payable to related parties                                                       --           800,000
   Current portion of capital lease obligations                                        976,429         935,256
                                                                                  ------------    ------------
              Total current liabilities                                              7,431,938       6,847,099
                                                                                  ------------    ------------
LONG-TERM LIABILITIES:
   Long-term portion of capital lease obligations                                    1,225,032         874,147
   Deferred rent                                                                        90,930         134,481
                                                                                  ------------    ------------
                                                                                     1,315,962       1,008,628
                                                                                  ------------    ------------
COMMITMENTS AND CONTINGENCIES

REDEEMABLE PREFERRED STOCK, no par value, 2,000,000 and 3,500,000 shares
  authorized at December 31, 1999 and 1998, respectively:
   Series A convertible, 0 and 1,250,137 shares issued and outstanding at
    December 31, 1999 and 1998, respectively (aggregate liquidation preference
    of $9,386,229 at December 31, 1998), stated at                                        --         5,925,054
   Series  B convertible, 0 and 2,158,604 shares issued and
    outstanding at December 31, 1999 and 1998, respectively
    (aggregate  liquidation  preference of $15,876,412 at December 31,
    1998), stated at                                                                      --        10,124,726

STOCKHOLDERS' EQUITY (DEFICIT):
  Common stock, $.001 par value, 28,000,000 and 15,000,000 shares authorized,
   10,032,866 and 3,767,415 shares issued and
   outstanding at December 31, 1999 and 1998, respectively                              10,033           3,767
  Additional paid-in capital                                                        52,282,503       5,384,455
  Deferred compensation                                                             (1,104,228)     (1,393,968)
  Notes receivable from stockholders                                                   (56,250)           --
  Accumulated other comprehensive income                                                 3,885            --
  Retained deficit                                                                  (8,789,332)    (15,127,426)
                                                                                  ------------    ------------
              Total stockholders' equity (deficit)                                  42,346,611     (11,133,172)
                                                                                  ------------    ------------
              Total liabilities and stockholders'
               equity (deficit)                                                   $ 51,094,511    $ 12,772,335
                                                                                  ============    ============

</TABLE>

The accompanying notes should be read in conjunction with these consolidated
balance sheets.


                                      F-2
<PAGE>


                   NEWGEN RESULTS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations
For the Years Ended December  31, 1999, 1998 and 1997

<TABLE>
<CAPTION>

                                                          1999            1998            1997
                                                      ------------    ------------    ------------
<S>                                                   <C>             <C>             <C>
REVENUES:
     Database marketing services                      $ 49,456,670    $ 31,512,768    $ 20,974,032
     Consulting services                                 5,730,941       8,593,061       5,439,660
                                                      ------------    ------------    ------------
             Total revenues                             55,187,611      40,105,829      26,413,692
                                                      ------------    ------------    ------------
COST OF REVENUES:
     Cost of database marketing services                27,619,963      21,156,695      14,231,960
     Cost of consulting services                         4,887,907       6,694,764       4,232,822
     Installation costs                                  1,458,724       1,410,997       1,931,649
                                                      ------------    ------------    ------------
             Total cost of revenues                     33,966,594      29,262,456      20,396,431
                                                      ------------    ------------    ------------
             Gross profit                               21,221,017      10,843,373       6,017,261
                                                      ------------    ------------    ------------
OPERATING COSTS:
     Selling, general and administrative expenses       12,585,304       8,876,608       6,234,096
     Technology and product development                  4,289,034       5,100,975       1,553,845
     Amortization of goodwill                              106,956              --              --
                                                      ------------    ------------    ------------
             Total operating costs                      16,981,294      13,977,583       7,787,941
                                                      ------------    ------------    ------------
             Income (loss) from operations               4,239,723      (3,134,210)     (1,770,680)
                                                      ------------    ------------    ------------
OTHER INCOME (EXPENSE):
      Interest and investment income                     1,066,419         143,381          44,660
      Interest expense                                    (340,192)       (212,300)       (463,322)
                                                      ------------    ------------    ------------
             Other income (expense), net                   726,227         (68,919)       (418,662)
                                                      ------------    ------------    ------------
             Income (loss) before tax                    4,965,950      (3,203,129)     (2,189,342)

INCOME TAXES                                               131,000              --              --
                                                      ------------    ------------    ------------
             Net income (loss)                           4,834,950      (3,203,129)     (2,189,342)

ADJUSTMENT FOR ACCRETION OF REDEEMABLE CONVERTIBLE
      PREFERRED STOCK                                     (486,807)     (1,370,909)       (132,236)
                                                      ------------    ------------    ------------
             Net income (loss) applicable to
               common stockholders                    $  4,348,143    $ (4,574,038)   $ (2,321,578)
                                                      ============    ============    ============


Basic income (loss) per share                         $        .57    $      (1.21)   $      (0.62)
                                                      ============    ============    ============
Diluted income (loss) per share                       $        .50    $      (1.21)   $      (0.62)
                                                      ============    ============    ============

Shares used in basic per share calculation               7,638,170       3,767,415       3,766,915
                                                      ============    ============    ============

Shares used in diluted per share calculation             9,739,549       3,767,415       3,766,915
                                                      ============    ============    ============

</TABLE>

The accompanying notes should be read in conjunction with these consolidated
financial statements.


                                      F-3
<PAGE>


                   NEWGEN RESULTS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity (Deficit)
For the Years Ended December  31, 1999, 1998 and 1997

<TABLE>
<CAPTION>

                                                                                        Notes        Accumulated
                                   Common Stock          Additional                   Receivable        other
                                 ------------------        Paid-In      Deferred         from       Comprehensive
                                 Shares      Amount        Capital    Compensation    Stockholders      Income
-----------------------------------------------------------------------------------------------------------------
<S>                            <C>        <C>          <C>            <C>                <C>           <C>
Balance, December 31, 1996     3,766,915  $3,738,184   $       -      $       -          $  -         $    -
    Accretion of redeemable
       preferred stock                 -           -           -              -             -              -
    Deferred compensation
       related to options
       granted                         -     900,900           -       (900,900)            -              -
    Net loss                           -           -           -              -             -              -
                              ----------   --------  -----------    -----------      --------         ------
Balance, December 31,
    1997                       3,766,915   4,639,084           -       (900,900)            -              -
    Accretion of
       redeemable preferred
       stock                           -           -           -              -             -              -
    Deferred compensation
       related to options
       granted                         -     748,825           -       (748,825)            -              -
    Amortization of
       deferred compensation           -           -           -        255,757             -              -
    Exercise of
       stock options                 500         313           -              -             -              -
    Reincorporation                    -  (5,384,455)  5,384,455              -             -              -
    Net loss                           -           -           -              -             -              -
                              ----------   --------  -----------    -----------      --------         ------
Balance, December 31,
  1998                         3,767,415       3,767   5,384,455     (1,393,968)            -              -
    Public offering,
       net                     2,724,370      2,724   32,098,458              -             -              -
    Accretion of
       redeemable preferred
       stock                           -          -            -              -             -              -
    Conversion of
       preferred stock         3,408,741      3,409   14,543,226              -             -              -
    Deferred compensation
       related to options
       granted                         -          -      112,311       (112,311)            -              -
    Amortization of
       deferred compensation           -          -            -        402,051             -              -
    Exercise of stock
       options                   103,240        103      138,401              -       (56,250)             -
    Exercise of warrants          29,100         30        5,652              -             -              -
    Unrealized gains from
       short-term investments          -          -            -              -             -         $3,211
    Cumulative foreign
       currency translation            -          -            -              -             -            674
    Net income                         -          -            -              -             -              -
                              ----------   --------  -----------    -----------      --------         ------
Balance, December 31,
  1999                        10,032,866   $ 10,033  $52,282,503    $(1,104,228)     $(56,250)        $3,885
                              ==========   ========  ===========    ===========      ========         ======

</TABLE>


<TABLE>
<CAPTION>

                                           Retained                         Comprehensive
                                            Deficit            TOTAL            Income
                                        -------------------------------------------------
<S>                                     <C>                    <C>         <C>
Balance, December 31, 1996              $ (8,231,810)    $ (4,493,626)
    Accretion of redeemable
       preferred stock                      (132,236)        (132,236)
    Deferred compensation
       related to options
       granted                                     -                -
    Net loss                              (2,189,342)      (2,189,342)
                                         -----------     ------------
Balance, December 31,
    1997                                 (10,553,388)      (6,815,204)
    Accretion of
       redeemable preferred
       stock                              (1,370,909)      (1,370,909)
    Deferred compensation
       related to options
       granted                                     -                -
    Amortization of
       deferred compensation                       -          255,757
    Exercise of
       stock options                               -              313
    Reincorporation                                -                -
    Net loss                              (3,203,129)      (3,203,129)
                                         -----------     ------------
Balance, December 31,
  1998                                   (15,127,426)     (11,133,172)
    Public offering,
       net                                         -       32,101,182
    Accretion of
       redeemable preferred
       stock                                (486,807)        (486,807)
    Conversion of
       preferred stock                     1,989,951       16,536,586
    Deferred compensation
       related to options
       granted                                     -                -
    Amortization of
       deferred compensation                       -          402,051
    Exercise of stock
       options                                     -           82,254
    Exercise of warrants                           -            5,682
    Unrealized gains from
       short-term investments                      -            3,211     $      3,211
    Cumulative foreign
       currency translation                        -              674              674
    Net income                             4,834,950        4,834,950        4,834,950
                                         -----------     ------------     ------------
Balance, December 31,
  1999                                   $(8,789,332)    $ 42,346,611     $  4,838,835
                                         ===========     ============     ============

</TABLE>


The accompanying notes should be read in conjunction with these consolidated
financial statements.


                                      F-4
<PAGE>


                   NEWGEN RESULTS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows
For the Years Ended December  31, 1999, 1998 and 1997

<TABLE>
<CAPTION>

                                                                                      1999            1998            1997
                                                                                  ------------    ------------    ------------
<S>                                                                               <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                              $  4,834,950    $ (3,203,129)   $ (2,189,342)
   Adjustments to reconcile net income (loss) to net cash provided by (used in)
     operating activities:
     Depreciation and amortization                                                   2,159,988       1,292,943         837,492
     Deferred rent                                                                     (43,551)         25,605          25,604
     Amortization of deferred compensation                                             402,051         255,757              --
     Changes in assets and liabilities:
       Accounts receivable                                                          (1,259,402)     (3,301,942)     (2,086,897)
       Prepaid expenses and other                                                     (595,665)        357,720        (460,833)
       Accounts payable                                                              1,607,934       1,059,642         335,690
       Accrued and other current liabilities                                          (264,268)      1,136,779         864,607
                                                                                  ------------    ------------    ------------
       Net cash provided by (used in) operating activities                           6,842,037      (2,376,625)     (2,673,679)
                                                                                  ------------    ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of short-term investments                                             (59,304,198)             --              --
   Proceeds from sales of short-term investments                                    41,889,438              --              --
   Purchases of property and equipment                                              (3,422,022)     (1,128,928)       (500,467)
   Aquisition of business                                                          (11,551,235)             --              --
   Other assets                                                                        216,674        (365,454)           (709)
                                                                                  ------------    ------------    ------------
       Net cash used in investing activities                                       (32,171,343)     (1,494,382)       (501,176)
                                                                                  ------------    ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from stock offerings                                                    32,101,182              --       9,125,096
   Proceeds from stock options and warrant exercises                                    87,936             313              --
   Repayments of related party loans                                                  (800,000)             --        (400,000)
   Proceeds from related party loans                                                        --         200,000              --
   Payments on capital lease obligations                                            (1,226,329)       (735,134)       (313,857)
   Increase in restricted cash                                                              --              --         566,105
   (Repayments) proceeds of/from lines of credit, net                                  199,670         592,434      (1,300,000)
                                                                                  ------------    ------------    ------------
       Net cash provided by financing activities                                    30,362,459          57,613       7,677,344
                                                                                  ------------    ------------    ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 5,033,153      (3,813,394)      4,502,489

CASH AND CASH EQUIVALENTS, beginning of period                                         816,753       4,630,147         127,658
                                                                                  ------------    ------------    ------------
CASH AND CASH EQUIVALENTS, end of period                                          $  5,849,906    $    816,753    $  4,630,147
                                                                                  ============    ============    ============

</TABLE>


                                      F-5
<PAGE>


<TABLE>


<S>                                                                               <C>             <C>             <C>
Supplemental disclosure of cash flow information:
   Cash paid for interest                                                         $    350,192    $    212,300    $    452,886
                                                                                  ============    ============    ============
Supplemental disclosure of non-cash investing and financing activities:
   Capital lease obligations entered into for equipment                           $  1,618,387    $  1,730,420    $    661,931
                                                                                  ============    ============    ============

   Accretion of redeemable preferred stock                                        $    486,807    $  1,370,909    $    132,236
                                                                                  ============    ============    ============

   Conversion of preferred stock                                                  $ 16,536,586    $         --    $         --
                                                                                  ============    ============    ============

</TABLE>

The accompanying notes should be read in conjunction with these consolidated
financial statements.


                                      F-6
<PAGE>


                   NEWGEN RESULTS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements
December  31, 1999, 1998 and 1997

1.    NATURE OF BUSINESS AND BASIS OF PRESENTATION

      Newgen Results Corporation ("Newgen") was incorporated in California on
February 16, 1994 and is a provider of customized, outsourced database
management, direct marketing and related services for automobile dealerships'
service departments and automobile manufacturers throughout the United States
and Canada. Newgen also provides consulting services to both automobile
manufacturers and individual dealerships. In December 1998, the Company
reincorporated in Delaware and established the par value of its preferred and
common stock at $0.001.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      PRINCIPLES OF CONSOLIDATION

      In 1998, Newgen formed Newgen Dealer Pricing Center, Inc. ("NDPC").
NDPC is a wholly-owned subsidiary of Newgen. In 1999, Newgen formed three
wholly-owned subsidiaries, Newgen Results Canada, Ltd. ("NRC"), Newgen
Management Services, Inc. ("NMS"), and NGR Acquisition Corp. ("NGR"). The
consolidated financial statements include the accounts of Newgen, NDPC, NRC,
NMS, and NGR and are collectively referred to as the "Company". All
significant intercompany accounts and transactions have been eliminated in
consolidation.

      In February 2000, Newgen incorporated a wholly-owned subsidiary called
Carabunga.com, Inc.

         USE OF ESTIMATES

      The preparation of the 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 period. Actual results could differ from those estimates.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

      The carrying amounts of cash and cash equivalents, accounts receivable,
other current assets, accounts payable, and accrued and other current
liabilities approximate fair value because of the short-term nature of those
instruments. Based on borrowing rates currently available to the Company for
credit arrangements with similar terms, the carrying amounts of balances
under capital lease obligations approximate fair value.

         REVENUE RECOGNITION

      With the exception of its Computer Care customers (see Note 3), the
Company has standard agreements with its database marketing services
customers. Although the terms of each individual agreement may vary, most
agreements call for the Company to provide customized letters and telephone
contacts for its dealership customers, in exchange for the payment of a
monthly fee per active name in the automobile dealership's customer list.
Most agreements have an initial minimum 6 to 24 month term, with 30-day
notice of cancellation without penalty thereafter. With respect to the
Company's Computer Care customers, the Company has standard agreements which
generally call for the Company to provide customized letters and telephone
contacts in exchange for a transaction fee based on the services provided.
Most of these agreements may be terminated with 30 to 60 days notice.

      The Company recognizes revenue from both its database marketing services
and consulting services in the month that services are provided. In certain
instances, the Company's customers may pay an amount in advance for services to
be


                                      F-7
<PAGE>


provided over a period of time. In other cases, customers may pay the Company a
fixed amount per month with the Company providing more services in certain
months than in others. Advance payments are reflected as deferred revenue.

         CONCENTRATION OF RISKS

      Certain of the database marketing services provided by the Company have
been recommended by its major customer, Ford Motor Company ("Ford"). However,
the Company contracts separately with each individual dealership and uses the
corporate recommendation to generate business. For all periods presented,
substantially all of the Company's consulting business is with Ford. During the
years ended December 31, 1999, 1998 and 1997, approximately 69%, 77%, and 75% of
the Company's revenues were with Ford and its dealerships, respectively.

      As of December 31, 1999 and 1998, 75% and 91% of the Company's accounts
receivable are due from Ford and its dealerships, respectively.

      The Company depends on a small number of suppliers for the delivery of
services. Specifically, the Company has one source for their printing and
direct mailing needs. Although the Company has not experienced any problems
in this regard, any such problems or a change in suppliers, however, could
cause a delay in service delivery and a possible loss of revenues, which would
affect operating results adversely.

         CASH AND CASH EQUIVALENTS

      The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. Cash equivalents at
December 31, 1999 and 1998 consisted primarily of money market accounts and
commercial paper.

         SHORT-TERM INVESTMENTS

      Investments are accounted for in accordance with Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" ("SFAS 115"), which requires that the Company determine
the appropriate classification of investments at the time of purchase and
reevaluate such designation as of each balance sheet date. The Company
invests its excess cash and has established guidelines relative to
diversification and maturities in an effort to maintain safety and liquidity.
These guidelines are periodically reviewed and modified to take advantage of
trends in yields and interest rates. At December 31, 1999, the Company
considered all investments as available for use in its current operations,
and therefore classified them short-term, available-for-sale investments.
Available-for-sale investments are stated at fair value, with unrealized
gains and losses, if any, net of tax, reported as a separate component of
stockholders' equity. The cost of securities sold is based on the specific
identification method. At December 31, 1999, cash, cash equivalents and
short-term investments available-for-sale consisted of the following:

<TABLE>
<CAPTION>

                                                                                  Unrealized        Estimated
                                                                        Cost         Gains         Fair Values
---------------------------------------------------------------------------------------------------------------
                  <S>                                              <C>            <C>              <C>
                  Cash                                             $   3,451,661    $       -      $  3,451,661
                  Cash equivalents                                     2,397,299          946         2,398,245
                                                                   -------------    ---------      ------------
                      Total cash and cash
                        equivalents                                    5,848,960          946         5,849,906
                                                                   -------------    ---------      ------------
                  Short-term investments:
                    Corporate securities                              14,922,643        2,228        14,924,871
                    Government securities                              2,493,063           37         2,493,100
                                                                   -------------    ---------      -------------
                      Total short-term investments                    17,415,706        2,265        17,417,971
                                                                   -------------    ---------      -------------
                      Total cash,  cash  equivalents
                        and short-term investments                 $  23,264,666    $   3,211      $  23,267,877
                                                                   =============    =========      =============

</TABLE>

      Investments in corporate and government securities as of December 31,
1999 in the amount of $17,417,971 are scheduled to mature within one year.
Proceeds from the sale of investments aggregated approximately $41,889,000
for the year ended December 31, 1999. The realized net gain on these sales
totaled approximately $468,000.                                       F-8

<PAGE>

         PROPERTY AND EQUIPMENT

      Property and equipment are stated at cost. The Company provides for
depreciation and amortization using the straight-line method by charges to
operations in amounts estimated to allocate the costs of the property or
equipment over the estimated useful lives. The estimated useful lives for
computer equipment, furniture and other is three years, and for leasehold
improvements is the shorter of the estimated useful life of the leaseholds or
the life of the lease. Periodically, the Company reviews for possible impairment
of its long-lived assets. Whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be fully recoverable, asset values
are adjusted accordingly.

      Property and equipment consist of the following at December 31,:

<TABLE>
<CAPTION>

                                                           1999            1998
                                                       ------------    ------------
<S>                                                    <C>             <C>
           Computer equipment, furniture and
             other                                     $  9,874,709    $  5,408,905
           Leasehold improvements                           682,620         324,322
                                                       ------------    ------------
                                                         10,557,329       5,733,227

           Accumulated depreciation and
             amortization                                (4,837,787)     (2,801,391)
                                                       ------------    ------------
           Property and equipment, net                 $  5,719,542    $  2,931,836
                                                       ============    ============

</TABLE>

      Maintenance and repairs are charged to operations as incurred. When assets
are sold, or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts and any gain or loss is included in
operations.

         GOODWILL

      Goodwill represents the excess of amounts paid and liabilities assumed
over the fair value of identifiable tangible and intangible assets acquired.
This amount is amortized using the straight-line method over a period of nine
years. The Company evaluates the carrying value of goodwill for potential
impairment on an ongoing basis.

         STOCK-BASED COMPENSATION

      The Company has adopted the disclosure only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"). Accordingly, the Company accounts for its
stock-based compensation plans under the provisions of Accounting Principles
Board No. 25 under which compensation cost is measured by the excess, if any, of
the fair market value of the Company's common stock at the date of grant over
the exercise price of the option.

         INCOME TAXES

      The Company accounts for income taxes utilizing the liability method in
accordance with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" ("SFAS 109"). Under this method, deferred income taxes are
recorded to reflect the tax consequences on future years of temporary
differences between the tax bases of assets and liabilities and their financial
reporting amounts at each year end. If it is more likely than not that some
portion or all of the net deferred tax asset will not be realized, a valuation
allowance is recognized.

         DEFERRED RENT

      Rent expense is recognized on a straight-line basis over the terms of
the leases. Accordingly, rent expense incurred in excess of rent paid is
reflected as deferred rent.

         COMPREHENSIVE INCOME

      The Company has implemented SFAS 130, "Reporting Comprehensive Income".
This statement requires that all items that are required to be recognized
under accounting standards as components of comprehensive income be reported
in a financial statement that is displayed with the same prominence as other
financial statements. Accordingly, in addition to reporting net income, the
Company has displayed the components of comprehensive income and has
displayed an amount representing total comprehensive income for 1999. The
Company has presented the required information in the Consolidated Statements
of Stockholders' Equity (Deficit). There were no components of comprehensive
income in 1998 or 1997.


                                      F-8
<PAGE>


         SOFTWARE DEVELOPMENT AND REWRITE COSTS

      Beginning in 1997, the Company commissioned a substantial rewrite of
its enterprise-wide database management software. Through December 31, 1998,
the Company expensed the costs of these rewrites as incurred, approximately
$2,842,000 and $617,000 in 1998 and 1997, respectively. In 1999, in
accordance with the adoption of the American Institute of Certified Public
Accountants' ("AICPA") Statement of Position 98-1, "Accounting for the Cost of
Computer Software Developed or Obtained for Internal Use", the Company
capitalized certain of its 1999 rewrite development costs. Due to major
deficiencies in the functionality of the software rewrite, the Company
elected in the fourth quarter of 1999 not to deploy the software rewrite and
wrote off approximately $168,000, the net remaining capitalized costs.

         COMPUTATION OF NET INCOME (LOSS) PER SHARE

      The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" ("SFAS 128"). SFAS 128
requires companies to compute basic and diluted per share data for all
periods for which a statement of operations is presented. Basic net income
(loss) per share is computed by dividing income (loss) available to common
stockholders by the weighted average number of common shares that were
outstanding during the period. Diluted income (loss) per share is computed
giving effect to all dilutive potential common shares that were outstanding
for the periods presented.

<TABLE>
<CAPTION>

                                                                                   Year Ended December 31,
                                                                     --------------------------------------------------
                                                                           1999              1998            1997
                                                                     ----------------  --------------------------------
                  <S>                                                <C>               <C>            <C>
                  Net income (loss)                                     $ 4,834,950       $(3,203,129)   $(2,189,342)
                  Accretion of redeemable convertible
                   preferred stock                                         (486,807)       (1,370,909)      (132,236)
                                                                        -----------       -----------    -----------
                  Income (loss) applicable to common
                   stockholders                                         $ 4,348,143       $(4,574,038)   $(2,321,578)
                                                                        ===========       ===========    ===========


                  Shares used in basic per share
                   calculation                                            7,638,170         3,767,415      3,766,915
                  Effect of dilutive securities:
                    Warrants                                                 92,210                 -              -
                    Employee stock options                                  701,707                 -              -
                    Conversion of preferred stock                         1,307,462                 -              -
                                                                        -----------       -----------    -----------
                  Shares used in diluted per share
                   calculation                                            9,739,549         3,767,415      3,766,915
                                                                        ===========       ===========    ===========

                  Basic net income (loss) per share                     $      0.57       $     (1.21)   $     (0.62)
                  Diluted net income (loss) per share                   $      0.50       $     (1.21)   $     (0.62)

</TABLE>


         RECENT ACCOUNTING PRONOUNCEMENTS

      In December 1999, the Securities and Exchange Commission (the "SEC")
issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in
Financial Statements". This SAB summarizes the SEC's view in applying
generally accepted accounting principles to revenue recognition in financial
statements. This SAB was amended by SAB 101A, which defers the effective date
for all registrants with fiscal years that begin between December 16, 1999
and March 15, 2000, to allow for the option of implementing during the second
quarter of fiscal 2000. Management is currently determining the impact of SAB
No. 101 on the company's financial statements, and does not believe that its
adoption will have a material impact on the Company's financial statements.

      In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities", which
establishes accounting and reporting standards for derivative instruments and
hedging activities. SFAS 133 requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial


                                 F-9
<PAGE>


position and measure those instruments at fair value. This Statement was
amended by SFAS No. 137 which defers the effective date to all fiscal
quarters of fiscal years beginning after June 15, 2000. The adoption of SFAS
133 is not expected to have a material effect on the Company's financial
position or results of operations.

         RECLASSIFICATIONS

     Certain prior year amounts have been reclassified to conform to the current
presentation.

3.    ACQUISITION OF BUSINESS

      On November 30, 1999, Newgen, together with its subsidiary NGR,
acquired the partnership interest, including certain net assets and
liabilities of Computer Care, a New York general partnership and wholly owned
operation of Automatic Data Processing, Inc. ("ADP"). Under the terms of the
partnership purchase agreement. Newgen acquired the 100 percent interest in
Computer Care for a purchase price of approximately $11,000,000 in cash,
excluding transaction costs, and up to an additional $9,000,000 earn-out
which may be paid based upon certain earn-out criteria. As of December 31,
1999, no additional earn-outs have been paid to ADP. The acquisition has been
accounted for using the purchase method of accounting. The operations of
Computer Care are included in Newgen's results of operations and financial
position subsequent to the date of the acquisition. Acquisition goodwill of
$11,551,000 is being amortized on a straight-line basis over nine years.

      Unaudited pro forma results of operations for the years ended December
31, 1999 and 1998 below assumes the purchase of Computer Care had been
consummated as of January 1, 1998. The pro forma results of operations
include adjustments to give effect to amortization of goodwill and certain
other adjustments and are not necessarily indicative of the results of
operations that would have occurred had the purchase been made at the
beginning of the periods presented or the future results of the combined
operations.

<TABLE>
<CAPTION>

                                                               1999               1998
                                                                     (Unaudited)
                                                           --------------------------------
            <S>                                            <C>                <C>
            Revenues                                       $ 70,700,000        $ 64,700,000
            Net income (loss)                              $   (300,000)       $ (6,700,000)
            Net income (loss) available to common
              shareholders                                 $   (800,000)       $ (8,000,000)

            Net income (loss) per share:
              Basic                                        $      (0.10)       $      (2.12)
              Diluted                                      $      (0.10)       $      (2.12)

</TABLE>

4.    LINES OF CREDIT

     The Company has a revolving line of credit with a bank that is secured by
substantially all assets. The total available amount of the revolving line is
$5,000,000, including a $3,300,000 sub-limit for securing letters of credit.


                                      F-10
<PAGE>


Borrowings under the line of credit bear interest at the prime rate plus
1.00% with a maturity date of May 9, 2000. The Company also has a $2,000,000
equipment line of credit that bears an interest rate of the prime rate plus
 .50% with the draw period up to March 31, 2000. The credit facilities contain
certain covenants and restrictions, including a limitation on indebtedness
requiring the Company, as of the last day of each quarter, to maintain a
ratio of quick assets to current liabilities of at least 2.50 to 1.0. At
December 31, 1999 and 1998, no borrowings were outstanding. In February 2000,
the bank issued a letter of credit in the amount of $266,442, which is due on
August 1, 2000.

     The Company also has two lease lines of credit of $2,000,000 each for
equipment acquisitions. These lines of credit expired on December 31, 1999. The
Company is currently in negotiations with new and existing lenders to acquire
additional equipment financing for fiscal 2000.

5.    INCOME TAXES

         The components of the provision for income taxes are as follows at
December 31:

<TABLE>
<CAPTION>

                                                   1999             1998           1997
                                                 -----------------------------------------
                  <S>                            <C>                <C>            <C>
                  Federal - current              $111,800           $  -           $  -
                  Federal - deferred                    -              -              -
                  State - current                  19,200              -              -
                  State - deferred                      -              -              -
                                                 --------           -------        -------
                  Total                          $131,000           $  -           $  -
                                                 ========           =======        =======

</TABLE>

         A reconciliation from the expected federal income tax provision at the
         statutory rate to the effective rate is as follows at December 31:

<TABLE>
<CAPTION>

                                                                                1999             1998             1997
------------------------------------------------------------------------------------------------------------------------------
                  <S>                                                       <C>              <C>                  <C>
                  Expected tax provision                                   $   1,689,000    $   (1,089,000)     $ (744,000)
                  State income taxes, net of
                   federal benefit                                               298,000          (192,000)       (131,000)
                  Other                                                         (270,000)          223,000          15,000
                  Change in valuation allowance                               (1,586,000)        1,058,000         860,000
                                                                           -------------    --------------      ----------
                           Actual tax provision                            $     131,000    $            -      $        -
                                                                           =============    ==============      ==========

</TABLE>

         The net deferred tax asset results from the following temporary
differences:

<TABLE>
<CAPTION>

                                                                                 1999             1998
------------------------------------------------------------------------------------------------------------
                  <S>                                                         <C>             <C>
                  Depreciation and amortization                               $  195,646      $     (5,856)
                  Accrued and other current
                   liabilities                                                   660,176           580,262
                  Net operating loss carryforwards                               980,944         2,473,182
                  Other                                                            7,019           382,599
                                                                              ----------      ------------
                           Total                                               1,843,785      $  3,430,187
                               Less valuation allowance                       (1,843,785)       (3,430,187)
                                                                              ----------      ------------
                  Total                                                       $        -      $          -
                                                                              ==========      ============

</TABLE>

     As of December 31, 1999 the Company had net operating loss carryforwards
of approximately $2.5 million for federal reporting purposes.

                                      F-11
<PAGE>


The federal loss carryforwards will begin expiring in 2009, unless previously
utilized. The Company has approximately $70,000 of research and development
credits which will begin expiring in 2012. Utilization of the Company's net
operating loss carryforwards may be limited as a result of certain changes in
the Company's ownership. The realization of the deferred tax asset is
dependent upon the Company generating sufficient taxable income prior to
expiration of its operating loss and credit carryforwards. Due to the
uncertainty regarding realization of the deferred tax asset, management has
provided a full valuation allowance against the net deferred tax asset.
During fiscal 1999, the Company paid $131,000 in income taxes.

6.    REDEEMABLE CONVERTIBLE PREFERRED STOCK

     In May 1999, at the closing of the initial public offering, all
outstanding shares of preferred stock were converted into 3,408,741 shares of
common stock. At December 31, 1999, 2,000,000 shares of preferred stock were
authorized and none were outstanding.

     As of December 31, 1998, the Company has authorized 3,500,000 shares of
preferred stock for issuance. The Board of Directors designated 1,260,137 and
2,200,000 shares as Series A Preferred Stock and Series B Preferred Stock,
respectively. The remaining 39,863 shares of preferred stock are undesignated.
Both issuances of preferred stock carried the following rights and privileges:

              a)  VOTING: The holder of each preferred share has a right to the
                  number of votes equal to the number of shares issuable upon
                  conversion, as defined.

              b)  REDEMPTION: Beginning November 26, 2002, and in each year
                  thereafter, the Company is obligated to redeem, at the option
                  of the preferred stockholders, up to 25% of the aggregate
                  number of shares outstanding. The redemption value of each
                  share shall equal the original issuance price ($4.40 for
                  Series A and $4.52 for Series B), plus any declared and unpaid
                  dividends and a premium of 8% per annum, compounded annually.
                  In order to state the preferred stock at redemption value, as
                  of December 31, 1998, the Company has accreted approximately
                  $1,503,000, including amounts related to the 8% premium.

              c)  DIVIDENDS: The preferred stockholders are entitled to
                  non-cumulative dividends, when and if declared, at the same
                  rate the dividends are paid to the common stockholders.

              d)  LIQUIDATION: In the event of any merger, sale or
                  reorganization in which control transfers or in liquidation or
                  dissolution, the preferred stockholders have a liquidation
                  preference over common stockholders. The liquidation
                  preference is an amount equal to a multiple of 1.5 times the
                  original purchase price.

              e)  CONVERSION: Each share of the preferred stock is generally
                  convertible at the option of the holder into one share of
                  common stock and is subject to certain anti-dilution
                  provisions. The preferred stock automatically converts into a
                  certain number of common shares, as defined, upon the closing
                  of certain offerings, as defined, and upon the election of 75%
                  and 70% of the Series A Preferred Stock and the Series B
                  Preferred Stock, respectively.

         The Board of Directors has the authority, without further action by
the shareholders, to issue any authorized but undesignated shares of
preferred stock in one or more series and to fix all the terms, including
rights, preferences, restrictions and redemptions.

7.    STOCKHOLDERS' EQUITY (DEFICIT)


                                      F-12
<PAGE>


         STOCK OPTION PLANS

    In August 1996, the Company adopted the 1996 Equity Incentive Plan ("the
Plan"), under which incentive stock options, non-statutory options and rights
to purchase restricted stock may be granted to employees, directors,
consultants or advisors of the Company. Options issued under the Plan vest
over either four or five years. No options granted under the Plan have a term
in excess of ten years from the date of grant. The exercise price of an
incentive stock option may not be less than 100% of the fair market value of
the common stock on the date of grant. The exercise price of a non-statutory
option cannot be less than 85% of the fair market value of the common stock
on the date of grant. As of December 31, 1999 and 1998, 700,000 common shares
have been reserved for issuance under the Plan. As of December 31, 1999 and
1998, 410,260 and 512,300 options are outstanding under the 1996 Plan,
respectively.

    In August 1998, the Board of Directors adopted the 1998 Equity Incentive
Plan ("the 1998 Plan") and obtained stockholder approval in November 1998. The
1998 Plan permits the granting of incentive stock options, non-statutory
options, stock appreciation rights and rights to purchase restricted stock. An
aggregate of 1,000,000 shares of the Company's common stock have initially been
reserved for issuance pursuant to the exercise of stock awards granted to
employees, directors and consultants under the 1998 Plan. An additional 500,000
shares may be reserved for issuance under the 1998 Plan to the extent that
options outstanding on the effective date of the Company's initial public
offering under the Company's 1996 Plan are returned to the 1996 Plan. The
exercise price of an Incentive Stock Option cannot be less than 100% of the fair
market value of the common stock on the date of the grant. The exercise price of
a non-statutory stock option cannot be less than 85% of the fair market of the
common stock on the date of grant. Options granted under the 1998 Plan vest at
the rate specified in the option agreement. No options granted under the 1998
Plan have a term in excess of ten years from the grant date. As of December 31,
1999 and 1998, 847,523 and 332,370 options are outstanding under the 1998 Plan,
respectively.

         EMPLOYEE STOCK PURCHASE PLAN

    In August 1998 the Board of Directors adopted the Employee Stock Purchase
Plan ("Purchase Plan") and obtained stockholder approval in November 1998.
The Company has reserved 350,000 shares of common stock for issuance under
the Purchase Plan. The Purchase Plan will enable eligible employees to
purchase common stock at 85% of the lower of the fair market value of the
Company's common stock on the first day of each option purchase period, or
the relevant purchase date. As of December 31, 1999 and 1998, no shares have
been issued under the Purchase Plan. Included in accounts payable as of
December 31, 1999 and 1998 are employee stock purchase plan withholdings of
approximately $115,000 and $0, respectively. On January 31, 2000, 16,145
shares were issued under the Purchase Plan.

         NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

    In August 1998, the Board of Directors adopted and in November 1998 the
stockholders approved the Non-employee Director's Option Plan ("Director
Plan"). The Company has reserved 150,000 shares of common stock for issuance
under the Director Plan. The Director Plan provides an initial grant of
options to purchase 6,000 shares of common stock to each new eligible outside
director of the Company upon election to the Board. In addition, such
eligible outside directors will be granted an option to purchase 2,000 shares
of common stock at each annual meeting of the stockholders. The exercise
price per share of all options granted under the Director Plan will be equal
to 100% of the fair market value of the Company's common stock on the date of
grant. Options granted expire after ten years and generally vest monthly over
a one-year period. The initial grant options vest monthly over a three-year
period. As of December 31, 1999 and 1998, 56,000 and zero options have been
granted under the Director Plan, respectively.

    In 1998, certain officers were granted 80,000 options outside of the
Company's stock option plans.

                                      F-13
<PAGE>


    The following table summarizes stock option plan activity:

<TABLE>
<CAPTION>

                                                                                DECEMBER 31,
                                          ----------------------------------------------------------------------------------------
                                                     1999                           1998                            1997
                                          ---------------------------     ---------------------------      -------------------------
                                                     Weighted Average                Weighted Average              Weighted Average
                                                        Exercise                         Exercise                      Exercise
                                            Shares        Price           Shares          Price            Shares        Price
                                          ---------      -------          -------         -----            -------       -----
       <S>                                <C>           <C>               <C>          <C>                   <C>            <C>
       Outstanding, beginning of year       924,670     $  2.31           641,100         $1.06             38,250        $0.50
       Granted                              639,113       10.16           416,270          4.12            616,250         1.09
       Exercised                           (103,240)       1.34              (500)         0.63                  -            -
       Terminated                           (66,760)       5.02          (132,200)         1.97            (13,400)        0.73
                                          ---------                      --------                          -------

       Outstanding, end of year           1,393,783        5.85           924,670          2.31            641,100         1.06
                                          =========                      ========                          =======

       Exercisable, end of period           241,026        1.86           111,455          0.87              7,400         0.50

       Weighted average fair value of             -     $  6.02                 -         $5.91                  -        $2.32
          options granted

</TABLE>

    As required by SFAS 123, the Company has determined the pro forma
information as if the Company had accounted for stock options under the minimum
value method of SFAS 123. The following weighted average assumptions were used;
risk-free interest rate ranging between 5.3% and 6.8%; dividend yield of zero;
expected market price volatility factor of 47.7%; and a weighted average
expected life of the options of seven years. Had compensation cost for stock
options granted during the year ended December 31, 1997 been determined
consistent with SFAS 123, the Company's net loss and related per share amounts
on a pro forma basis would not materially differ from the amounts reported in
the accompanying consolidated statements of operations for that period. Had
compensation cost for stock options granted during the years ended December 31,
1999 and 1998 been determined consistent with SFAS 123, the Company's net income
(loss) and related per share amounts on a pro forma basis would be as follows:

<TABLE>
<CAPTION>

                                                              1999                           1998
                                                   -------------------------      --------------------------
                                                   As Reported     Pro Forma      As Reported      Pro Forma
                                                   -----------     ---------      -----------      ---------
        <S>                                       <C>             <C>           <C>              <C>
        Net income (loss) applicable to common    $4,348,143      $3,673,561    $(4,574,038)     $(4,753,424)
        stockholders

        Basic net income (loss) per share         $      .57      $      .48    $     (1.21)     $     (1.26)

        Diluted net income (loss) per share       $      .50      $      .43    $     (1.21)     $     (1.26)

</TABLE>

    The Company recorded $900,900 as deferred compensation related to 429,000
options granted in December 1997. The deferred compensation is being amortized
on a straight-line basis over the four or five-year vesting period of the
underlying options.

    In 1998, the Company issued 416,270 options at exercise prices ranging
between $2.50 and $4.50 per share. The Company recorded deferred compensation
charges of $748,825 related to the grant of certain of these options. The
deferred compensation is being amortized over the four or five-year vesting
period of the underlying options.

    In 1999, the Company issued 639,113 options at exercise prices ranging
between $5.25 and $13.00 per share. The Company recorded deferred
compensation charges of $112,311 related to the grant of certain of these
options. The deferred compensation is being amortized on a straight-line
basis over the four or five-year vesting period of the underlying options.
Total stock based deferred compensation expense charged to operations was
$402,051, $255,757, and $0 in 1999, 1998 and 1997, respectively.


                                      F-14
<PAGE>


         WARRANTS

    As of December 31, 1998, the Company had outstanding warrants to purchase
10,000 shares of its Series A preferred stock. The warrants have an exercise
price of $4.40 per share and expire in November 2001. Upon the closing of the
public offering in May 1999, this warrant became a warrant to purchase 10,000
shares of common stock. As of December 31, 1999, 10,000 of these warrants are
outstanding.

    In addition, as of December 31, 1999, and 1998, the Company has
outstanding warrants to purchase 75,606 and 106,024 shares of its common
stock at $0.75 per share, respectively. The warrants expire at various dates
in 2002.

8.    EMPLOYEE BENEFITS

    The Company has a 401(k) Plan ("the 401(k) Plan") covering substantially all
full-time employees. The 401(k) Plan is subject to the provisions of the
Employee's Retirement Income Security Act of 1974. The 401(k) Plan allows for
the Company to make matching contributions, up to a maximum of $750 per year per
employee. The contributions made by the Company were approximately $103,000,
$53,000, and $35,000 for the years ended December 31, 1999, 1998, and 1997,
respectively.

    The Company has a bonus plan for certain members of management. The
bonuses earned are based upon factors such as meeting certain operating
targets, including defined results of operations. During the years ended
December 31, 1999, 1998, and 1997, the Company granted discretionary bonuses
to its officers and employees in the amount of approximately $1,339,000,
$928,000, and $834,000, respectively.

9.    RELATED PARTY TRANSACTIONS

    The Company had notes payable to related parties in the amount of $0 and
$800,000 at December 31, 1999 and 1998, respectively. These notes were
secured and subordinated to the bank line of credit. These notes were repaid
in May 1999. Interest expense related to these notes totaled approximately
$30,000, $73,000, and $101,000 for the years ended December 31, 1999, 1998,
and 1997, respectively.

    The Company had entered into an administrative service agreement with
Newgen Services L.P., an affiliate, wherein the Company agreed to provide
administrative services for Newgen Services L.P., in exchange for a monthly
payment of up to $7,500, subject to adjustment. The agreement was for a
period of one year, with automatic renewals, unless terminated by the mutual
consent of both companies. This agreement was terminated as of January 1,
1999. Amounts earned under this agreement totaled $0, $43,000, and $90,000
for 1999, 1998, and 1997, respectively. The Company also performs consulting
services for customers of this affiliate and has earned approximately
$17,000, $59,000, and $131,000 for the years ended December 31, 1999, 1998,
and 1997, respectively.

10.    COMMITMENTS AND CONTINGENCIES

         LEASES

    The Company has both operating and capital lease commitments for facilities
and certain equipment, which expire through June 2003. Provisions of the
facility lease provide for abatement of rent during certain periods and
escalating rent payments during the lease term. The Company maintains a letter
of credit of $266,442 as collateral related to the facility lease. Collateral
requirements decline annually over the term of the lease.


                                      F-15
<PAGE>


    The future lease commitments as of December 31, 1999, are summarized as
follows:

<TABLE>
<CAPTION>

                   Year Ended December 31,             Operating Leases       Capital Leases
                   -----------------------             ----------------       --------------
                   <S>                                 <C>                    <C>
                             2000                         $1,083,308            $1,156,786
                             2001                            476,984               829,919
                             2002                                442               451,163
                             2003                                  -                65,602
                             2004                                  -                     -
           Thereafter                                              -                     -
                                                       ----------------       --------------
           Total minimum lease payments                   $1,560,734             2,503,470
                                                       ================
           Less amount representing interest                                      (302,009)
                                                                              --------------
           Present value of remaining minimum
              capital lease payments                                             2,201,461
           Less current portion                                                   (976,429)
                                                                              --------------
           Long-term portion of obligations under
              capital leases                                                    $1,225,032
                                                                               ==============

</TABLE>


    Rent expense for the years ended December 31, 1999, 1998, and 1997 was
approximately $1,204,000, $813,000, and $574,000, respectively. At December 31,
1999 and 1998, the net book value of assets subject to capital leases was
$2,219,000 and $1,597,000, respectively.

         CONTINGENCIES

    The Company is subject to various claims that arise out of the normal
course of business. In the opinion of management, based in part on the advice
of legal counsel, the ultimate disposition of these matters will not have a
material adverse effect on the financial position or results of operations of
the Company.

         PROCESSING AGREEMENTS

    The Company has an annual agreement with a third party, whereby the Company
was given the rights to purchase dealerships' customer names to whom it provides
services, for a fixed rate and a percentage of the Company's revenue from those
dealers. Although the Company is under no obligation to purchase any data from
this company at any time, the Company continues to exercise its rights under
this agreement and incurred costs of approximately $1,563,000, $1,498,000, and
$1,552,000 during the years ended December 31, 1999, 1998, and 1997,
respectively.

    The Company has agreements with third parties whereby it purchases postage
and services relating to the production of letters for the Company's customers.
Costs incurred related to these agreements during the years ended December 31,
1999, 1998, and 1997 were approximately $9,806,000, $6,666,000, and $4,304,000,
respectively.


                                      F-16
<PAGE>


11.   OTHER FINANCIAL STATEMENT DATA

    Accrued and other current liabilities consist of the following at December
31:

<TABLE>
<CAPTION>

                                                            1999                  1998
                                                         -----------          -----------
              <S>                                        <C>                  <C>
              Compensation and benefits                  $   819,339          $   699,162
              Deferred revenue                               756,835              694,128
              Other                                          483,599              930,751
                                                         -----------          -----------
                                                         $ 2,059,773          $ 2,324,041
                                                         ===========          ===========

</TABLE>

    In December 1998, the Company wrote off to general and administrative
expense approximately $600,000 of previously deferred costs related to its
delayed 1998 proposed initial public offering.

12.   SEGMENT INFORMATION

    The Company's revenues are substantially derived from two service
segments: database marketing and consulting operations.

    The database marketing segment provides outsourced database management,
direct marketing and related customer retention services for the service
department of automobile dealerships and manufacturers.

    The consulting segment develops and implements new techniques and programs
that enable automobile dealerships to grow their business, streamline
inefficient processes and more effectively market their services.


                                      F-17
<PAGE>


    The following table summarizes segment information for the years ended
December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>

                                              ---------------------------------------------------------
                                                                        1999
                                                 Database
                                                 Marketing          Consulting         Consolidated
                                              ----------------- -------------------- ------------------
             <S>                              <C>               <C>                  <C>
             Revenues:
               Segment revenues                $ 49,456,670         $ 5,730,941         $55,187,611
               Segment cost of revenues          29,078,687           4,887,907          33,966,594
                                               ------------         -----------         -----------
               Segment gross profit            $ 20,377,983         $   843,034         $21,221,017
                                               ============         ===========         ===========
             Depreciation:
               Segment depreciation and        $  2,098,525         $    61,463         $ 2,159,988
                  amortization

             Assets:
               Segment assets                  $ 49,781,813         $ 1,312,698         $51,094,511
               Capital expenditures            $  3,393,742         $    28,280         $ 3,422,022

</TABLE>

<TABLE>
<CAPTION>

                                              ---------------------------------------------------------
                                                                        1998
                                                 Database
                                                 Marketing          Consulting         Consolidated
                                              ----------------- -------------------- ------------------
             <S>                              <C>               <C>                  <C>
             Revenues:
               Segment revenues                 $ 31,512,768        $ 8,593,061         $40,105,829
               Segment cost of revenues           22,567,692          6,694,764          29,262,456
                                                ------------        -----------         -----------
               Segment gross profit             $  8,945,076        $ 1,898,297         $10,843,373
                                                ============        ===========         ===========
             Depreciation:
               Segment depreciation and         $  1,236,961        $    55,982         $ 1,292,943
                  amortization

             Assets:
               Segment assets                   $ 10,957,700        $ 1,814,635         $12,772,335
               Capital expenditures             $  1,058,469        $    70,459         $ 1,128,928

</TABLE>


                                      F-18
<PAGE>


<TABLE>
<CAPTION>

                                              ---------------------------------------------------------
                                                                        1997
                                                 Database
                                                 Marketing          Consulting         Consolidated
                                              ----------------- -------------------- ------------------
             <S>                              <C>               <C>                  <C>
             Revenues:
               Segment revenues                  $20,974,032        $ 5,439,660         $26,413,692
               Segment cost of revenues           16,163,609          4,232,822          20,396,431
                                                 -----------        -----------         -----------
               Segment gross profit              $ 4,810,423        $ 1,206,838         $ 6,017,261
                                                 ===========        ===========         ===========
             Depreciation:
               Segment depreciation and          $   781,377        $    56,115         $   837,492
                  amortization

             Assets:
               Segment assets                    $10,246,762        $ 2,055,320         $12,302,082
               Capital expenditures              $   285,954        $   214,513         $   500,467

</TABLE>



    The following table reconciles the Company's reportable segments' gross
profit to consolidated income (loss) before tax for the years ended December
31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>

                                                             1999            1998            1997
                                                         -----------      -----------    ------------
             <S>                                         <C>              <C>            <C>
             Gross profit from reportable segments       $21,221,017      $10,843,373    $  6,017,261
             Operating costs                              16,981,294       13,977,583       7,787,941
                                                         -----------      -----------    ------------
             Income (loss) from operations                 4,239,723       (3,134,210)     (1,770,680)

             Other income (expense), net                     726,227          (68,919)       (418,662)
                                                         -----------      -----------    ------------
             Income (loss) before tax                    $ 4,965,950      $(3,203,129)   $ (2,189,342)
                                                         ===========      ===========    ============

</TABLE>

      The Company's operations are primarily in the United States. The
Company's operations in its Canadian subsidiary as a result of the
acquisition discussed in Note 3 are not significant as of December 31, 1999.


                                       F-19
<PAGE>


                                              SCHEDULE II
                                        NEWGEN RESULTS CORPORATION
                                    VALUATION AND QUALIFYING ACCOUNTS
                           FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


<TABLE>
<CAPTION>
                                                             Additions                                    Balance
                                    Balance at Begining       Charged                                      at End
                                       of the Period         to Income       (Deductions)    Other (1)    of Period
--------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                      <C>             <C>             <C>          <C>
1997

Allowance for doubtful accounts           $ 124,000          $ 262,000        ($990,000)      $ 718,000   $ 114,000
                                          =========          =========         ========       =========   =========
--------------------------------------------------------------------------------------------------------------------
1998

Allowance for doubtfull accounts          $ 114,000          $ 140,000        ($467,000)      $ 512,000   $ 299,000
                                          =========          =========         ========       =========   =========
--------------------------------------------------------------------------------------------------------------------
1999

Allowance for doubtfull accounts          $ 299,000          $274,000       ($1,150,000)      $ 924,000   $ 347,000
                                          =========          ========        ==========       =========   =========
---------------------------------------------------------------------------------------------------------------------

</TABLE>

1) Represents collection on receivable accounts that were previously written off






                                      S-1