<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the quarterly period ended September 30, 2001 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 0-27168

                              VIEWPOINT CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                     95-4102687
 (State of incorporation)                (I.R.S. Employer Identification Number)

                498 Seventh Ave., Suite 1810, New York, NY 10018
                    (Address of principal executive offices)

                                 (212) 201-0800
              (Registrant's telephone number, including area code)

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 reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

As of November 12, 2001, there were outstanding 39,249,850 shares of the
registrant's Common Stock, $0.001 par value per share, which is the only
outstanding class of common or voting stock of the registrant.

                                       1
<PAGE>




                              VIEWPOINT CORPORATION

                                    FORM 10-Q

                                Table of Contents
<TABLE>
<CAPTION>

                                                                                         PAGE
                                                                                         ----
<S>                   <C>                                                               <C>
PART I                 FINANCIAL INFORMATION

Item 1                 Financial Statements .........................................      3

                       Consolidated  Balance Sheets - September 30, 2001 and
                        December 31, 2000 (unaudited)
                       Consolidated Statements of Operations -
                        Three and nine months ended September 30, 2001 and 2000
                        (unaudited)
                       Consolidated Statements of Cash Flows - Nine months ended
                        September 30, 2001 and 2000 (unaudited)
                       Notes to Consolidated Financial Statements (unaudited)

Item 2                 Management's Discussion and Analysis of Financial Condition ..     10
                        and Results of Operations

Item 3                 Quantitative and Qualitative Disclosures About Market Risk ...     17

PART II                OTHER INFORMATION

Item 1  through Item 6 ..............................................................     18

SIGNATURES             ..............................................................     19
</TABLE>


                                       2


<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                              VIEWPOINT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                               SEPTEMBER 30,    DECEMBER 31,
                                                                   2001              2000
                                                                ------------     -----------
 <S>                                                              <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents ...................................   $  14,765       $  13,320
  Marketable securities .......................................       3,905          15,713
  Accounts receivable, net ....................................       3,911           2,101
  Notes receivable, net .......................................         750             750
  Notes receivable from related parties, net ..................          --             870
  Due from related parties, net ...............................          --             312
  Prepaid expenses and other current assets ...................         758           1,595
  Current assets related to discontinued operations ...........         427           5,662
                                                                  ---------       ---------
       Total current assets ...................................      24,516          40,323

Property and equipment, net ...................................       5,100           5,622
Goodwill and other intangibles ................................      47,741          56,111
Loans to officers .............................................         575              --
Other assets ..................................................          70             179
Non-current assets related to discontinued operations .........          --             114
                                                                  ---------       ---------
       Total assets ...........................................   $  78,002       $ 102,349
                                                                  =========       =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable ...........................................   $   1,960       $   3,352
   Accrued expenses ...........................................       1,196             861
   Due to related parties, net ................................       4,624              --
   Deferred revenues ..........................................       1,794             636
   Accrued incentive compensation .............................         545             546
   Current liabilities related to discontinued operations .....         514             615
                                                                  ---------       ---------
       Total current liabilities ..............................      10,633           6,010

Stockholders' equity:
  Preferred stock,  $.001 par value, 5,000 shares authorized -
    no shares issued and outstanding at September 30, 2001
    and December 31, 2000......................................          --              --
  Common stock,  $.001 par value;  75,000 shares  authorized -
    39,228 and 37,964 shares issued and  outstanding at
    September 30, 2001 and December 31, 2000, respectively.....          39              38
  Paid-in capital..............................................     262,776         264,698
  Deferred compensation .......................................     (13,240)        (22,595)
  Treasury stock at cost; 160 shares at September 30, 2001 ....      (1,015)             --
  Accumulated other comprehensive income.......................          13              12
  Accumulated deficit..........................................    (181,204)       (145,814)
                                                                  ---------       ---------
       Total stockholders' equity .............................      67,369          96,339
                                                                  ---------       ---------
       Total liabilities and stockholders' equity..............   $  78,002       $ 102,349
                                                                  =========       =========
</TABLE>

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

                                       3
<PAGE>
                              VIEWPOINT CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                        THREE MONTHS ENDED      NINE MONTHS ENDED
                                                                                          SEPTEMBER 30,           SEPTEMBER 30,
                                                                                       --------------------    --------------------
                                                                                         2001        2000        2001        2000
                                                                                       --------    --------    --------    --------
<S>                                                                                    <C>         <C>         <C>         <C>
Revenues:
  Licenses ........................................................................    $  2,421    $    372    $  6,109    $    422
  Services ........................................................................       1,546         767       3,400       1,034
                                                                                       --------    --------    --------    --------
Total revenues ....................................................................       3,967       1,139       9,509       1,456
Cost of revenues ..................................................................         969         442       2,510         442
                                                                                       --------    --------    --------    --------
Gross profit ......................................................................       2,998         697       6,999       1,014
                                                                                       --------    --------    --------    --------

Operating expenses:
  Sales and marketing (including non-cash stock-based compensation charges
    totaling $654 and $969 for three months ended September 30, 2001 and 2000,
    respectively, and $1,931 and $4,532 for nine months ended September 30, 2001
    and 2000, respectively) .......................................................       4,013       3,984      14,544      11,312
  Research and development (including non-cash
    stock-based compensation charges totaling $715 and $1,876 for three months
    ended September 30, 2001 and 2000, respectively, and $2,200 and $3,449 for
    nine months ended September 30, 2001 and 2000, respectively) ..................       2,806       3,081       7,400       6,433
  General and administrative  (including non-cash stock-based compensation
    charges totaling $428 and $1,443 for three months ended September 30, 2001
    and 2000, respectively, and $1,223 and $3,310 for nine months ended
    September 30, 2001 and 2000, respectively) ....................................       2,974       2,648       7,873       7,154
  Amortization of goodwill and other intangibles ..................................       4,504         521      12,924         597
  Depreciation ....................................................................         466         216       1,321         432
  Non-cash sales and marketing charges ............................................          --      14,249          --      19,998
  Acquired in-process research and development costs ..............................          --         963          --         963
                                                                                       --------    --------    --------    --------
Total operating expenses ..........................................................      14,763      25,662      44,062      46,889
                                                                                       --------    --------    --------    --------
Loss from operations ..............................................................     (11,765)    (24,965)    (37,063)    (45,875)
Other income ......................................................................         226         607         943       1,594
                                                                                       --------    --------    --------    --------

Loss before minority interest in loss of subsidiary ...............................     (11,539)    (24,358)    (36,120)    (44,281)
Minority interest in loss of subsidiary ...........................................          --         873          --       4,200
                                                                                       --------    --------    --------    --------
Net loss from continuing operations ...............................................     (11,539)    (23,485)    (36,120)    (40,081)
Adjustment to net loss on disposal of discontinued operations .....................          --        (593)        730         672
                                                                                       --------    --------    --------    --------
Net loss ..........................................................................     (11,539)    (24,078)    (35,390)    (39,409)
Accretion of mandatorily redeemable preferred stock of subsidiary .................          --        (275)         --        (275)
                                                                                       --------    --------    --------    --------

Net loss applicable to common stockholders ........................................    $(11,539)   $(24,353)   $(35,390)   $(39,684)
                                                                                       ========    ========    ========    ========
Basic and diluted net loss per common share:
  Net loss per common share from continuing operations ............................    $  (0.29)   $  (0.84)   $  (0.93)   $  (1.47)
  Net income (loss) per common share from discontinued operations .................          --       (0.02)       0.02        0.03
                                                                                       --------    --------    --------    --------
Net loss per common share .........................................................    $  (0.29)   $  (0.86)   $  (0.91)   $  (1.44)
                                                                                       ========    ========    ========    ========
Weighted average number of shares outstanding - basic and diluted .................      39,801      28,170      38,755      27,536
                                                                                       ========    ========    ========    ========
</TABLE>

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


                                       4

<PAGE>



                              VIEWPOINT CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   NINE MONTHS ENDED
                                                                                     SEPTEMBER 30,
                                                                             ------------------------------
                                                                                2001               2000
                                                                             -----------        -----------
<S>                                                                           <C>               <C>

Cash flows from operating activities:

   Net loss .............................................................     $(35,390)          $(39,409)
   Adjustments  to  reconcile  net loss to net cash  used in operating
     activities:
       Net income of discontinued operations ............................         (730)              (672)
       Non-cash stock-based compensation charges ........................        5,354             11,291
       Depreciation and amortization ....................................       14,245              1,992
       Provision for losses on receivables ..............................          573                 --
       Minority interest in loss of subsidiary ..........................           --             (4,200)
       Non-cash sales and marketing charges .............................           --             19,998
       Reserve of notes receivable ......................................         (665)                --
       Changes in operating assets and liabilities:
         Accounts receivable ............................................       (2,180)              (916)
         Prepaid expenses and other assets ..............................          946             (1,851)
         Accounts payable ...............................................       (1,392)             1,368
         Accrued expenses ...............................................          335                494
         Due to/from related parties ....................................          279               (288)
         Deferred revenues ..............................................        1,312                 --
         Net  cash provided by (used in) discontinued operations ........        5,978            (11,120)
                                                                              --------           --------
           Net cash used in operating activities ........................      (11,335)           (23,313)

Cash flows from investing activities:
   Purchases of marketable securities ...................................      (19,060)           (37,754)
   Proceeds from  sales and maturities of marketable securities .........       30,885             54,505
   Repayment of notes receivable from related parties ...................          520              1,000
   Purchases of property and equipment ..................................         (800)            (4,405)
   Purchases of patents and trademarks ..................................          (99)                --
   Net cash used for discontinued operations ............................           --                (84)
   Acquisition of Viewpoint Digital, net of cash acquired ...............           --            (10,207)
                                                                              --------           --------
           Net cash provided by investing activities ....................       11,446              3,055

Cash flows from financing activities:
   Issuance of loans to officers ........................................         (575)            (1,500)
   Issuance  of  preferred  stock  in  subsidiary, net  of
     issuance costs of $161 .............................................           --             19,839
   Collection of subscription  receivable  related to common
     stock of subsidiary ................................................           --              1,000
   Proceeds from exercise of stock options ..............................        1,925             12,221
                                                                              --------           --------
           Net cash provided by financing activities ....................        1,350             31,560

Effect of exchange rate changes on cash .................................          (16)                 8
                                                                              --------           --------

Net increase in cash and cash equivalents ...............................        1,445             11,310
Cash and cash equivalents at beginning of period ........................       13,320              4,480
                                                                              --------           --------
Cash and cash equivalents at end of period ..............................     $ 14,765           $ 15,790
                                                                              ========           ========
</TABLE>

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

                                       5


<PAGE>
                              VIEWPOINT CORPORATION

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.  ACCOUNTING POLICIES

BASIS OF PRESENTATION

    The unaudited consolidated financial statements at September 30, 2001 and
December 31, 2000 and for the three and nine months ended September 30, 2001 and
2000 have been prepared in accordance with accounting principles generally
accepted in the United States of America. The interim financial information is
unaudited, but reflects all adjustments (consisting only of normal recurring
accruals) that are, in the opinion of management, necessary for a fair
presentation of Viewpoint Corporation's ("Viewpoint" or the "Company") financial
position and operating results for the interim periods.

    These unaudited consolidated financial statements have been prepared in
accordance with the instructions for Form 10-Q and, therefore, do not include
all information and notes normally provided in annual financial statements. As a
result, these unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto,
together with management's discussion and analysis of financial condition and
results of operations, contained in Viewpoint's annual report on Form 10-K for
the fiscal year ended December 31, 2000. The results of operations for the three
and nine months ended September 30, 2001 are not necessarily indicative of the
results to be expected for the fiscal year ending December 31, 2001 or any other
future periods.

    Certain reclassifications have been made to the 2000 consolidated financial
statements to conform to the 2001 presentation.

REVENUE RECOGNITION

    The Company recognizes revenue in accordance with Statement of Position
97-2, "Software Revenue Recognition," as amended. Accordingly, revenue from
software arrangements involving multiple elements (e.g., software products,
upgrades/enhancements, post contract customer support, etc.) is allocated to
each element based on the relative fair value of the elements. The determination
of fair value is based on objective evidence, which is specific to the Company.

    License revenue includes sales of perpetual and term based licenses for
broadcasting Viewpoint 3D content, and limited licenses for its digital content
library. License revenue is recognized over the term of the license in a
term-based broadcast license model and up-front in a perpetual broadcast license
model, providing that no significant vendor obligations remain and the resulting
receivable is deemed collectible by management.

    Service revenue, which consists of fee-based professional services, is
recognized as the services are performed or, if no pattern of performance is
discernible, on a straight-line basis over the period during which the services
are performed.

    The Company periodically enters into nonmonetary arrangements whereby the
Company's licenses or services are exchanged for services of its customer.
Nonmonetary revenue is recognized at the fair market value of the services
received. Generally, nonmonetary revenues equal nonmonetary expenses; however,
due to timing, nonmonetary accounts receivable and accounts payable may result.

    In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements," which gives additional guidance in applying generally accepted
accounting principles to revenue recognition in the financial statements. The
Company is in compliance with the provisions of SAB No. 101.

CASH AND CASH EQUIVALENTS

    The Company considers all highly liquid investments purchased with an
original maturity of three months or less at date of acquisition to be cash
equivalents. Included in cash and cash equivalents is restricted cash amounting
to $289,000, which was pledged as collateral to secure a letter of credit used
for a security deposit on the Company's New York facility.

                                       6
<PAGE>
                              VIEWPOINT CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

    In July 2001 the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141 "Business
Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets." SFAS No.
141 requires business combinations initiated after June 30, 2001 to be accounted
for using the purchase method of accounting, and broadens the criteria for
recording intangible assets separate from goodwill. Recorded goodwill and other
intangibles will be evaluated against this new criteria and may result in
certain intangibles being subsumed into goodwill, or alternatively, amounts
initially recorded as goodwill may be separately identified and recognized apart
from goodwill. SFAS No. 142 requires the use of a nonamortization approach to
account for purchased goodwill and certain intangibles. Under a nonamortization
approach, goodwill and certain intangibles will not be amortized into results of
operations, but instead would be reviewed for impairment and written down and
charged to results of operations only in the periods in which the recorded value
of goodwill and certain intangibles is more than its fair value. The provisions
of each statement, which apply to goodwill and intangible assets acquired prior
to July 1, 2001, will be adopted by the Company on January 1, 2002. The
financial statement impact of adopting these statements has not yet been
determined.

    In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". The statement requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. The statement is effective for fiscal years beginning after June 15,
2002. The adoption of SFAS No. 143 is not expected to have a material impact on
the Company's financial statements.

    In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," that is applicable to financial
statements issued for fiscal years beginning after December 15, 2001. The FASB's
new rules on asset impairment supersede SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
and portions of Accounting Principals Board ("APB") Opinion No. 30, "Reporting
the Results of Operations." This statement provides a single accounting model
for long-lived assets to be disposed of and significantly changes the criteria
that would have to be met to classify an asset as held-for-sale. Classification
as held-for-sale is an important distinction since such assets are not
depreciated and are stated at the lower of fair value and carrying amount. This
statement also requires expected future operating losses from discontinued
operations to be displayed in the period(s) in which the losses are incurred,
rather than as of the measurement date as presently required. The provisions of
this statement are not expected to have a material impact on the Company's
financial statements.

2.  NET LOSS PER COMMON SHARE

    Basic net loss per common share is computed using the weighted average
number of shares of common stock and diluted net loss per common share is
computed using the weighted average number of shares of common stock and common
equivalent shares outstanding. Common equivalent shares related to stock options
totaling 8,462,000 are excluded from the computation of diluted net loss per
common share because their effect was antidilutive.

    Basic and diluted net loss per common share for the three and nine months
ended September 30, 2001, include the effect of the 744,740 shares to be issued
to Computer Associates International, Inc. ("Computer Associates") (see note 4),
as if the shares were issued and outstanding on June 8, 2001.

3.  DISCONTINUED OPERATIONS

    In December 1999, the Board of Directors of the Company approved a plan to
focus exclusively on its digital marketing technologies and services and to
correspondingly divest itself of its prepackaged graphics software business.
Accordingly, these operations are reflected as discontinued operations for all
periods presented in the accompanying consolidated statements of operations.

     The Company recorded adjustments to net loss on disposal of discontinued
operations during the nine months ended September 30, 2001, and the three and
nine months ended September 30, 2000, as a result of changes in estimates
related to assets and liabilities of the discontinued business. Changes in
estimates will be accounted for prospectively and included in adjustment to net
loss on disposal of discontinued operations.

                                       7
<PAGE>
                              VIEWPOINT CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.   AGREEMENTS WITH COMPUTER ASSOCIATES AND ACQUISITION OF VIEWPOINT DIGITAL

     On April 19, 2001, the Company entered into an agreement with Computer
Associates regarding, among other things, the waiver of transfer restrictions
applicable to shares received by Computer Associates under the Exchange
Agreement, dated as of August 10, 2000, between the Company and Computer
Associates (the "Exchange Agreement") to enable Computer Associates to sell
1,000,000 shares of Viewpoint common stock to a third party in a private
transaction. The Company agreed to register the 1,000,000 shares under the
Securities Act of 1933. Under the agreement entered into on April 19, 2001,
Computer Associates agreed to accept newly-issued shares of Viewpoint common
stock having a value of $4,000,000, in partial repayment of a promissory note
due June 8, 2001 and issued by the Company in connection with its acquisition of
all of the outstanding capital stock of Viewpoint Digital, Inc. ("Viewpoint
Digital").

     On May 9, 2001, the Company and Computer Associates entered into a
subsequent agreement under which, among other things:

     o   The Company agreed to waive transfer restrictions applicable to an
         additional 2,400,000 unregistered shares (the "Shares") of the
         Company's common stock received by Computer Associates in accordance
         with the Exchange Agreement to enable Computer Associates to transfer
         the Shares to third parties in private transactions;

     o   The Company agreed to register the Shares under the Securities Act of
         1933; and

     o   Computer Associates agreed to accept, at the Company's election, either
         cash or newly-issued, unregistered shares of Viewpoint common stock at
         an issue price of $4.00 per share in repayment of (a) any additional
         amounts due under the promissory note due June 8, 2001, (b) $100,000
         due under the agreement entered into on April 19, 2001, and (c) the
         first $8,943,000 of a $15,000,000 contingent promissory note due April
         30, 2002, which amount will be determined by the achievement of certain
         levels of future operating results and employee retention.

    Pursuant to the April 19, 2001 and May 9, 2001 agreements, the Company
registered 3,400,000 shares of the Company's common stock under the Securities
Act of 1933.

    The amount due Computer Associates under the promissory note due June 8,
2001, and the agreement dated April 19, 2001, is approximately $4,657,000. For
repayment of the first $4,000,000, the number of common shares to be issued was
calculated on the basis of the closing price of Viewpoint common stock on June
8, 2001. The number of shares to be issued to Computer Associates is 744,740.
For repayment of the remaining $657,000, the Company has the option of paying
cash or issuing unregistered shares of Viewpoint common stock valued at $4.00
per share. In connection with this promissory note, the Company recorded
additional goodwill and due to related parties in its consolidated balance
sheet.

5.  RELATED PARTY TRANSACTIONS

    In connection with the acquisition of Real Time Geometry Corp. ("RTG") in
December 1996, the Company entered into a noncompetition agreement with one of
RTG's founders who was a former executive of the Company. In addition, the
Company loaned $2,000,000 to the former executive. The loan, which accrued
interest semi-annually at 5.67% and was payable on January 15, 2001, was
collateralized by shares of common stock of the Company owned by the former
executive. The former executive defaulted on the loan and the Company took
possession of the collateral on January 16, 2001. As a result, the Company
recorded treasury stock based on the closing price of the Company's common stock
on January 16, 2001. The former executive and the Company entered into a
consulting agreement under which, among other things, the former executive
agreed to pay the Company $520,000 in outstanding obligations under the loan. In
July 2001, the Company received the $520,000 from the former executive.

    On April 2, 2001, the Company loaned $375,000 to an officer of the Company.
The loan, which bears interest at 4.94% per annum, compounding annually, is
secured solely by the officer's stock options in the Company and is non-recourse
to the officer, unless the Company terminates the officer for cause or the
officer resigns without good reason, in which case the loan will become fully
recourse to the officer. The officers' employment agreement provides that if
there is a change of control of the Company, or the officer is terminated
without cause or resigns for good reason, the loan will be forgiven.

    On May 31, 2001, the Company loaned $200,000 to an officer of the Company.
The loan, which bears interest at 5.07% per annum, compounding annually, is
secured solely by the officer's stock options in the Company and is non-recourse
to the officer, unless the Company terminates the officer for cause.

    During the three and nine months ended September 30, 2001, the Company
recorded revenues totaling $1,110,000 and $1,466,000 related to agreements,
including reseller arrangements, with two stockholders who have representatives
on the Company's Board of Directors.

                                       8
<PAGE>

                              VIEWPOINT CORPORATION

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

During the three and nine months ended September 30, 2000, the Company recorded
revenues totaling $125,000 and $375,000 relating to transactions entered into
with these related parties. As of September 30, 2001, the Company has $1,002,000
in accounts receivable and $1,250,000 in deferred revenue relating to
transactions entered into with these related parties.

6.  CONCURRENT TRANSACTIONS

    During the three months ended September 30, 2001, the Company established a
strategic relationship with one of its customers whereby the customer purchased
licenses from the Company and the Company agreed to purchase publicly traded
equities of the customer's parent in November 2001. During the quarter, the
Company also entered into a license agreement with another customer in exchange
for the customer's mass distribution of the Viewpoint Media Player to an
important target audience.

    The above transactions effectively include nonmonetary sales of our software
for equity securities and services of our customers, and accordingly the Company
used the fair market value of the equities and services received and to be
received in determining the amount of revenues and expenses to record. During
the three months and nine months ended September 30, 2001 total revenues and
expenses were $414,000 and $264,000, respectively, related to these
transactions.

7.  COMPREHENSIVE LOSS

    Total comprehensive loss consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED                         NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                             SEPTEMBER 30,
                                                   ----------------------------------------  ---------------------------------------
                                                           2001                 2000                 2001                 2000
                                                   -------------------  -------------------  -------------------  ------------------


<S>                                                               <C>                <C>                <C>                <C>
Net Loss ..........................................          $(11,539)            $(24,353)            $(35,390)           $(39,684)

Foreign currency translation adjustment ...........                (9)                  --                   17                 137
Unrealized  loss on investments ...................               (10)                  --                  (16)                 --
                                                             --------             --------             --------            --------
Comprehensive Loss ................................          $(11,558)            $(24,353)            $(35,389)           $(39,547)
                                                             ========             ========             ========            ========
</TABLE>


                                       9
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the unaudited
consolidated financial statements and notes thereto.

The discussion and analysis below contains trend analysis and other
forward-looking statements made based on current management expectations
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "targets," "estimates," and variations of such words and
similar expressions are intended to identify such forward-looking statements.
These statements are not guarantees of future performance and are subject to
certain risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual results could differ materially from those expressed or
forecasted in any such forward-looking statements as a result of certain
factors, including those set forth in "Factors That May Affect Future Operating
Results," as well as those discussed elsewhere in the Company's SEC reports,
including without limitation, the Company's audited consolidated financial
statements and notes thereto for the year ended December 31, 2000, as filed on
Form 10-K.

OVERVIEW

    Viewpoint Corporation, ("Viewpoint" or the "Company") provides digital
marketing technologies and services for creating and deploying virtual products
for marketing and e-commerce on the web environment.

    Until December 1999, the Company was primarily engaged in the development,
marketing, and sales of prepackaged software graphics products. Its principal
products were computer graphics "painting" tools and photo imaging software
products. With its acquisition of Real Time Geometry Corporation in December
1996, the Company became involved, on a limited basis, in the development of
technologies designed to make practical the efficient display and deployment of
rich media on the Internet.

    In June 1999, the Company increased its commitment to the development of
rich media internet technologies and formed Metastream.com Corporation
("Metastream") to operate a business exploiting these technologies.

    The Company originally held an 80% equity interest in Metastream with
Computer Associates International, Inc. ("Computer Associates") holding the
remaining 20% equity interest. Computer Associates' interest was acquired by the
Company in November 2000.

    In December 1999, the Board of Directors of the Company approved a plan to
focus exclusively on the internet technologies of its majority-owned subsidiary
and to correspondingly divest the Company of all its prepackaged software
business. By April 2000, the Company had sold substantially all of its
prepackaged software product lines.

    In September 2000, the Company acquired Viewpoint Digital, Inc. ("Viewpoint
Digital"), a wholly-owned subsidiary of Computer Associates. Viewpoint Digital
publishes the world's largest library of 3D digital content and provides custom
3D content creation services to thousands of customers in the entertainment,
advertising, visual simulation, computer-based training and corporate
communications industries.

    The Company's primary initiatives include:

     o Licensing technology for specific marketing visualization solutions;

     o Providing a full range of fee-based professional services for
       implementing marketing visualization solutions;

     o Forging technological alliances with leading interactive agencies and web
       content providers; and

     o Maximizing market penetration.

    Viewpoint believes that its success will depend largely on its ability to
extend its technology and market leadership in rich media visualization.
Accordingly, Viewpoint intends to invest heavily in research and development and
sales and marketing. Revenues from continuing operations primarily have been
from the sale of technology licenses and fee-based professional services.

    In light of its recent change in strategic focus, Viewpoint has a limited
operating history upon which an evaluation of the Company and its prospects can
be based. Viewpoint prospects must be considered in light of the risks and
difficulties frequently encountered by early stage technology companies. There
can be no assurance that Viewpoint will achieve or sustain profitability.
Viewpoint has had significant quarterly and annual operating losses since its
inception, and as of September 30, 2001, had an accumulated deficit of
$181,204,000.


                                       10
<PAGE>


OPERATING RESULTS

The following table sets forth for the three and nine months ended September 30,
2001 and 2000, the Company's consolidated statements of operations expressed as
a percentage of total revenues.

<TABLE>
<CAPTION>
                                                                 THREE MONTHS                              NINE MONTHS
                                                                     ENDED                                     ENDED
                                                       ----------------------------------        ----------------------------------
                                                       SEPTEMBER 30,        SEPTEMBER 30,        SEPTEMBER 30,        SEPTEMBER 30,
                                                           2001                 2000                 2001                 2000
                                                       -------------        -------------        -------------        -------------
<S>                                                    <C>                  <C>                 <C>                  <C>
Revenues:
  Licenses ......................................           61.0%               32.7%                64.2%                29.0%
  Services ......................................           39.0                67.3                 35.8                 71.0
                                                          -------             -------              -------             -------
Total revenues ..................................          100.0               100.0                100.0                100.0
Cost of revenues ................................           24.4                38.8                 26.4                 30.4
                                                          -------             -------              -------             -------
Gross profit ....................................           75.6                61.2                 73.6                 69.6
                                                          -------             -------              -------             -------

Operating expenses:
  Sales and marketing ...........................           101.2              349.8                153.0                776.9
  Research and development ......................            70.7              270.5                 77.8                441.8
  General and administrative ....................            75.0              232.5                 82.8                491.4
  Amortization of goodwill and other intangibles            113.5               45.7                135.9                 41.0
  Depreciation ..................................            11.7               19.0                 13.9                 29.7
  Non-cash sales and marketing charges ..........              --            1,251.0                   --              1,373.5
  Acquired in-process research and development
   costs.........................................              --               84.5                   --                 66.1
                                                          -------            --------              -------             -------
Total operating expenses ........................           372.1            2,253.0                463.4              3,220.4
                                                          -------            --------              -------             -------

Loss from operations ............................          (296.5)           (2,191.8)             (389.8)            (3,150.8)
Other income.....................................             5.7                53.3                 9.9                109.5
                                                          -------            --------              -------             -------

Loss before minority interest in loss of
  subsidiary.....................................         (290.8)            (2,138.5)             (379.9)            (3,041.3)
Minority interest in loss of subsidiary .........             --                 76.6                  --                288.5
                                                          -------            --------              -------             -------

Net loss from continuing operations .............          (290.8)           (2,061.9)             (379.9)            (2,752.8)
Adjustment to net loss on disposal of
  discontinued operations..........................            --               (52.1)                7.7                 46.2
                                                          -------            --------              -------             -------

Net loss ........................................          (290.8)           (2,114.0)              372.2)            (2,706.6)
Accretion of mandatorily redeemable preferred
  stock of subsidiary............................              --               (24.1)                 --                (18.9)
                                                           -------           --------              -------             -------
Net loss applicable to common stockholders ......          (290.8)%          (2,138.1)%            (372.2)%           (2,725.5)%
                                                           =======           ========              =======             =======
</TABLE>



REVENUES
<TABLE>
<CAPTION>

                                                                 SEPTEMBER 30,        SEPTEMBER 30,              %
                                                                     2001                 2000                CHANGE
                                                                 -------------        -------------          --------
Revenues:                                                              (DOLLARS IN THOUSANDS)

<S>                                                               <C>                 <C>                     <C>
Three months ended:
 Total revenues ......................................              $3,967                 $1,139              248%

Nine months ended:
 Total revenues ......................................              $9,509                 $1,456              553%
</TABLE>

     The increase in revenues for the three and nine months ended September 30,
2001, compared to the same periods last year is primarily attributable to an
increase in sales of licenses and fee-based professional services resulting from
increases to our direct sales force, expansion of our indirect channel
partnerships, and incremental sales from the acquisition of Viewpoint Digital.
The weakening of the U.S. economy continues to negatively impact our revenue
growth. In addition, the terrorist attacks of September 11, 2001, could cause
further weakening of the economy, which may adversely impact our revenues.

     During the three months ended September 30, 2001, the Company established a
strategic relationship with one of its customers whereby the customer purchased
licenses from the Company and the Company agreed to purchase publicly traded
equities of the customer's parent in November 2001. During the quarter, the
Company also entered into a license agreement with another customer in exchange
for the customer's mass distribution of the Viewpoint Media Player to an
important target audience.

     The above transactions effectively include nonmonetary sales of our
software for equity securities and services of our customers, and accordingly
the Company used the fair market value of the equities and services received and


                                       11



<PAGE>
to be received in determining the amount of revenues and expenses to record.
During the three and nine months ended September 30, 2001 revenues related to
these transactions were $414,000.

COST OF REVENUES
<TABLE>
<CAPTION>

                                                                           SEPTEMBER 30,       SEPTEMBER 30,          %
                                                                               2001                2000             CHANGE
                                                                       -------------------  -------------------  -------------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                                   <C>                   <C>                  <C>
Three months ended:
 Cost of revenues .......................................                  $   969              $   442              119%
 Percentage of total revenues............................                       24%                  39%

Nine months ended:
 Cost of revenues .......................................                  $ 2,510              $   442               468%
 Percentage of total revenues............................                       26%                  30%
</TABLE>

    Cost of revenues consists primarily of salaries and consulting fees for
those who provide fee-based professional services. The increase in cost of
revenues is directly related to an increase in fee-based professional services.

SALES AND MARKETING (INCLUDING NON-CASH STOCK-BASED COMPENSATION CHARGES
TOTALING $654 AND $969 FOR THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000,
RESPECTIVELY, AND $1,931 AND $4,532 FOR NINE MONTHS ENDED SEPTEMBER 30, 2001 AND
2000, RESPECTIVELY)

<TABLE>
<CAPTION>

                                                                           SEPTEMBER 30,       SEPTEMBER 30,          %
                                                                               2001                2000             CHANGE
                                                                       -------------------  -------------------  -------------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                                   <C>                   <C>                  <C>

Three months ended:
 Sales and marketing ....................................                  $ 4,013              $ 3,984                 1%
 Percentage of total revenues............................                      101%                 350%

Nine months ended:
 Sales and marketing ....................................                  $14,544              $11,312                29%
 Percentage of total revenues............................                      153%                 777%
</TABLE>

    Sales and marketing expenses increased for the three and nine months ended
September 30, 2001, compared to the same periods last year primarily due to an
increase in salaries, benefits, and travel expenses related to an increase in
personnel due to internal growth and the acquisition of Viewpoint Digital offset
by a decrease in non-cash stock-based compensation charges. Non-cash stock-based
compensation charges decreased because the Company no longer grants stock
options to employees at below fair market value at the date of grant and certain
employees who were granted stock options below fair market value have left the
Company. In addition, advertising and trade show costs increased during the nine
months ended September 30, 2001 compared to the same period last year as the
Company continued to market Viewpoint Experience Technology. Sales and marketing
includes nonmonetary expenses in the amount of $264,000 for the three and nine
months ended September 30, 2001 related to the mass distribution of the
Viewpoint Media Player by one of the Company's customers.

RESEARCH AND DEVELOPMENT (INCLUDING NON-CASH STOCK-BASED COMPENSATION CHARGES
TOTALING $715 AND $1,876 FOR THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000,
RESPECTIVELY, AND $2,200 AND $3,449 FOR NINE MONTHS ENDED SEPTEMBER 30, 2001 AND
2000, RESPECTIVELY)


<TABLE>
<CAPTION>

                                                                           SEPTEMBER 30,       SEPTEMBER 30,          %
                                                                               2001                2000             CHANGE
                                                                       -------------------  -------------------  -------------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                                   <C>                   <C>                  <C>
Three months ended:
 Research and development ...............................                  $ 2,806              $ 3,081               (9)%
 Percentage of total revenues............................                       71%                 271%

Nine months ended:
 Research and development ...............................                  $ 7,400              $ 6,433                15%
 Percentage of total revenues............................                       78%                 442%
</TABLE>

    Research and development expenses decreased for the three months ended
September 30, 2001, compared to the same period last year primarily due to a
decrease in non-cash stock-based compensation charges offset by an increase in
salaries and benefits related to increased internal development personnel in
connection with the further development of Viewpoint Experience Technology.

    Research and development expenses increased for the nine months ended
September 30, 2001, compared to the same period last year primarily due to an
increase in salaries and benefits related to increased internal development
personnel in connection with the further development of Viewpoint Experience
Technology offset by a decrease in non-cash stock based compensation charges.

    Non-cash stock-based compensation charges decreased for the three and nine
months ended September 30, 2001 compared to the same periods last year because
the Company no longer grants stock options to employees at below fair market
value at the date of grant and certain employees who were granted stock options
below fair market value have left the Company.

                                       12
<PAGE>
GENERAL AND ADMINISTRATIVE (INCLUDING NON-CASH STOCK-BASED COMPENSATION CHARGES
TOTALING $428 AND $1,443 FOR THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000,
RESPECTIVELY, AND $1,223 AND $3,310 FOR NINE MONTHS ENDED SEPTEMBER 30, 2001 AND
2000, RESPECTIVELY)

<TABLE>
<CAPTION>

                                                                 SEPTEMBER 30,        SEPTEMBER 30,              %
                                                                     2001                 2000                CHANGE
                                                                 ------------         ------------            -------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                                  <C>                  <C>                 <C>
Three months ended:
     General and administrative................................... $ 2,974              $ 2,648                 12%
     Percentage of total revenues.................................      75%                 233%

Nine months ended:
     General and administrative................................... $ 7,873               $7,154                 10%
     Percentage of total revenues.................................      83%                 491%

</TABLE>

  General and administrative expenses increased for the three and nine months
ended September 30, 2001, compared to the same periods last year primarily due
to an increase in facilities costs and salaries and benefits related to an
increase in personnel, an increase in insurance, legal and accounting costs and
an increase in bad debt expense. The increases in the aforementioned expenses
are attributable to internal growth as well as the acquisition of Viewpoint
Digital.

    Non-cash stock-based compensation charges decreased for the three and nine
months ended September 30, 2001 compared to the same periods last year because
the Company no longer grants stock options to employees at below fair market
value at the date of grant and certain employees who were granted stock options
below fair market value have left the Company.

AMORTIZATION OF GOODWILL AND OTHER INTANGIBLES
<TABLE>
<CAPTION>

                                                                SEPTEMBER 30,        SEPTEMBER 30,              %
                                                                    2001                 2000                CHANGE
                                                                ------------         ------------            -------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                                 <C>                    <C>                  <C>
Three months ended:
     Amortization of goodwill and other intangibles............... $ 4,504              $   521                 764%
     Percentage of total revenues.................................     114%                  46%

Nine months ended:
     Amortization of goodwill and other intangibles............... $12,924              $   597               2,065%
     Percentage of total revenues.................................     136%                  41%
</TABLE>

     Amortization of goodwill and other intangibles increased for the three and
nine months ended September 30, 2001, compared to the same periods last year due
to the amortization of intangibles recorded as part of the acquisition of
Viewpoint Digital and the acquisition of Computer Associates' minority interest
in Metastream.

DEPRECIATION
<TABLE>
<CAPTION>

                                                                SEPTEMBER 30,        SEPTEMBER 30,              %
                                                                    2001                 2000                CHANGE
                                                                ------------         ------------            -------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                                  <C>                  <C>                  <C>
Three months ended:
     Depreciation................................................. $   466              $   216                 116%
     Percentage of total revenues.................................      12%                  19%

Nine months ended:
     Depreciation................................................. $ 1,321              $   432                 206%
     Percentage of total revenues.................................      14%                  30%
</TABLE>

     Depreciation increased for the three and nine months ended September 30,
2001 compared to the same periods last year as a result of property and
equipment additions during 2000 and 2001.

NON-CASH SALES AND MARKETING CHARGES
<TABLE>
<CAPTION>

                                                                SEPTEMBER 30,        SEPTEMBER 30,              %
                                                                    2001                 2000                CHANGE
                                                                ------------         ------------            -------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                                  <C>                   <C>                 <C>
Three months ended:
     Non-cash sales and marketing charges......................... $    --              $14,249                (100)%
     Percentage of total revenues.................................      --%               1,251%

Nine months ended:
     Non-cash sales and marketing charges......................... $    --              $19,998                (100)%
     Percentage of total revenues.................................      --%               1,374%
</TABLE>

                                       13
<PAGE>
     In connection with the issuance of mandatorily redeemable preferred stock
in Metastream to America Online, Inc. ("AOL") and Adobe Systems Incorporated
("Adobe") the Company recorded one-time non-cash sales and marketing charges of
$14,249,000 and $19,998,000 during the three and nine months ended September 30,
2000. These charges represented the difference between the fair value of the
Company's common shares into which AOL and Adobe could have converted the
Metastream shares on the date of issuance, and the $20,000,000 aggregate cash
consideration received from both AOL and Adobe. These charges were recorded as
sales and marketing, as the incremental value of the equity over the cash
consideration received was deemed to be the fair value of the license and
distribution agreements simultaneously entered into with AOL and Adobe.

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT COSTS
<TABLE>
<CAPTION>

                                                           SEPTEMBER 30,        SEPTEMBER 30,          %
                                                               2001                 2000            CHANGE
                                                       -------------------  -------------------  -------------
                                                                (DOLLARS IN THOUSANDS)
<S>                                                       <C>                  <C>               <C>
Three months ended:
 Acquired in-process research and development costs         $ --               $963              (100)%
 Percentage of total revenues .....................           --%                85%

Nine months ended:
 Acquired in-process research and development costs         $ --               $963              (100)%
 Percentage of total revenues .....................           --%                66%
</TABLE>

     Acquired in-process research and development costs represents the write-off
of research and development costs acquired as part of the Viewpoint Digital
acquisition.

OTHER INCOME
<TABLE>
<CAPTION>

                                                           SEPTEMBER 30,        SEPTEMBER 30,          %
                                                               2001                 2000            CHANGE
                                                       -------------------  -------------------  -------------
                                                                (DOLLARS IN THOUSANDS)
<S>                                                       <C>                  <C>               <C>

Three months ended:
 Other income ....................................     $  226                 $  607              (63)%
 Percentage of total revenues.....................          6%                    53%

Nine months ended:
 Other income ....................................     $  943                 $1,594              (41)%
 Percentage of total revenues.....................         10%                   110%
</TABLE>

     Other income, which decreased for the three and nine months ended September
30, 2001 compared to the same periods last year primarily consists of interest
and investment income on cash and marketable securities. As a result, other
income fluctuates with changes in the Company's cash and marketable securities
balances and market interest rates.

MINORITY INTEREST IN LOSS OF SUBSIDIARY
<TABLE>
<CAPTION>

                                                           SEPTEMBER 30,        SEPTEMBER 30,          %
                                                               2001                 2000            CHANGE
                                                       -------------------  -------------------  -------------
                                                                (DOLLARS IN THOUSANDS)
<S>                                                       <C>                  <C>               <C>
Three months ended:
 Minority interest in loss of subsidiary                 $ --                  $  873            (100)%
 Percentage of total revenues ....................         --%                     77%

Nine months ended:
 Minority interest in loss of subsidiary..........       $ --                  $4,200            (100)%
 Percentage of total revenues ....................         --%                    289%
</TABLE>

     Metastream, originally a joint initiative between the Company and Computer
Associates, was formed in June 1999. For financial reporting purposes, the
assets, liabilities and operations of Metastream were included in the Company's
consolidated financial statements. Computer Associates and another minority
shareholder's combined 20% interest in Metastream was recorded as minority
interest in the Company's consolidated balance sheets, and the losses attributed
to their combined 20% interest were reported as minority interest in the
Company's consolidated statements of operations. In November 2000, the Company
acquired the minority interest in Metastream by issuing approximately 5,578,000
shares of Company common stock in exchange for 4,850,000 shares of Metastream
common stock.

                                       14
<PAGE>
ADJUSTMENT TO NET LOSS ON DISPOSAL OF DISCONTINUED OPERATIONS

<TABLE>
<CAPTION>

                                             SEPTEMBER 30,        SEPTEMBER 30,         %
                                                 2001                 2000            CHANGE
                                             ------------         -------------       ------
                                                   (DOLLARS IN THOUSANDS)
<S>                                             <C>                 <C>                 <C>
Three months ended:
 Adjustment to net loss on disposal
  of discontinued operations ......             $--                   $(593)           100%
 Percentage of total revenues .....              --%                    (52)%

Nine months ended:
 Adjustment to net loss on disposal
  of discontinued operations ......           $ 730                   $ 672              9%
 Percentage of total revenues .....               8%                    46%
</TABLE>

    In December 1999, the Board of Directors of the Company approved a plan to
focus exclusively on its digital marketing technologies and services and to
correspondingly divest itself of its prepackaged graphics software business.
Accordingly, these operations are reflected as discontinued operations for all
periods presented in the accompanying consolidated statements of operations.

    The Company recorded adjustments to net loss on disposal of discontinued
operations of $730,000 and $672,000 during the nine months ended September 30,
2001 and 2000, respectively, as a result of changes in estimates related to
assets and liabilities of the discontinued business. Changes in estimates will
be accounted for prospectively and included in adjustment to net loss on
disposal of discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

Cash and marketable securities totaled $18,670,000 at September 30, 2001, down
from $29,033,000 at December 31, 2000. Included in cash and cash equivalents at
September 30, 2001 is $289,000 of restricted cash which was pledged as
collateral to secure a letter of credit used for a security deposit on the
Company's New York facility.

Net cash used in operating activities of the Company totaled $11,335,000 and
$23,313,000 for the nine months ended September 30, 2001 and 2000, respectively.
Net cash used in operating activities for the nine months ended September 30,
2001 primarily resulted from a $36,120,000 net loss from continuing operations,
offset by $5,978,000 in net cash provided by discontinued operations, $5,354,000
in non-cash stock-based compensation charges and $14,245,000 in depreciation and
amortization. Net cash used in operating activities for the nine months ended
September 30, 2000 primarily related to a $40,081,000 net loss from continuing
operations, $11,120,000 net cash used for discontinued operations (principally
severance and related expenses) and $4,200,000 minority interest in loss of
subsidiary, offset by $11,291,000 non-cash stock-based compensation charges,
$19,998,000 non-cash sales and marketing charges and $1,992,000 in depreciation
and amortization.

Net cash provided by investing activities totaled $11,446,000 and $3,055,000 for
the nine months ended September 30, 2001 and 2000, respectively. Net cash
provided by investing activities for the nine months ended September 30, 2001
primarily resulted from $11,825,000 of net proceeds from sales and maturities of
marketable securities offset by $800,000 used for purchases of property and
equipment. Net cash provided by investing activities for the nine months ended
September 30, 2000 primarily resulted from $16,751,000 of net proceeds from
sales and maturities of marketable securities and $1,000,000 of proceeds from
the repayment of a note receivable from an officer of the Company, offset by
$10,207,000 used for the purchase of Viewpoint Digital and $4,405,000 used for
purchases of property and equipment.

Net cash provided by financing activities totaled $1,350,000 and $31,560,000 for
the nine months ended September 30, 2001 and 2000, respectively. Net cash
provided by financing activities for the nine months ended September 30, 2001
resulted from $1,925,000 of proceeds received from the exercise of stock options
by the Company's employees, offset by $575,000 in loans to two officers of the
Company. Net cash provided by financing activities for the nine months ended
September 30, 2000 resulted from $12,221,000 of proceeds received from the
exercise of stock options by the Company's employees, $19,839,000 received from
AOL and Adobe relating to their investment in Metastream, and $1,000,000
received from Computer Associates relating to their investment in Metastream,
offset by $1,500,000 loan to an officer of the Company.

The Company believes that its current cash and marketable securities balances
and cash provided by future operations, if any, are sufficient to meet its
operating cash flow needs and anticipated capital expenditure requirements
through at least the next twelve months. In addition, the Company may pursue
additional debt or equity financing to augment their working capital position;
however, there can be no assurance that the Company can obtain financing at
terms acceptable to the Company.

                                       15
<PAGE>

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

    This Form 10-Q contains forward-looking statements made based on current
management expectations pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "targets", "estimates," and
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that
are difficult to predict. Therefore, actual results could differ materially from
those expressed or forecasted in any such forward-looking statements as a result
of certain factors, including those listed below.

    Shares of the Company's common stock are speculative in nature and involve a
high degree of risk. The risks set forth below are described in more detail in
the Company's Annual Report on Form 10-K for the year ended December 31, 2000
and should be considered carefully. The risks described below are not the only
ones facing the Company. Many factors could cause our results to be different,
including the following risk factors and other risks described in this document.
If any of the following risks occur, our business would likely be adversely
affected and the trading price of the Company's common stock could decline. This
could result in a loss of all or part of your investment.

    o   We Have a Limited Operating History that Makes an Evaluation of Our
        Business Difficult;

    o   We Have a History of Losses and Expect to Incur Losses in the Future;

    o   Our Future Revenues May be Unpredictable and May Cause Our Quarterly
        Results to Fluctuate;

    o   We May be Unable to Meet our Future Capital Requirements;

    o   Our Stock Price is Volatile and May Continue to Fluctuate in the Future;

    o   If the Internet Does Not Continue to Expand as a Widespread Commerce
        Medium, Demand for Our Products and Technologies May Decline
        Significantly;

    o   Our Market is Characterized by Rapidly Changing Technology, and if We Do
        Not Respond in a Timely Manner, Our Products and Technologies May Not
        Succeed in the Marketplace;

    o   Potential Delays in Product Releases Could Harm Our Business;

    o   Undetected Errors in Our Products and Technologies Could Result in
        Adverse Publicity, Reduced Market Acceptance or Lawsuits by Customers;

    o   In Order to Increase Market Awareness of Our Products and Generate
        Increased Revenue We Need to Expand our Sales and Marketing
        Capabilities;

    o   We May be Unable to Protect Our Intellectual Property Rights and We May
        be Liable For Infringing the Intellectual Property Rights of Others;

    o   Security Risks Could Limit the Growth of E-commerce and Expose Us to
        Litigation or Liability;

    o   Increasing Government Regulation Could Increase Our Cost of Doing
        Business or Increase Our Legal Exposure;

    o   We May Need to Enter Into Business Combinations and Strategic Alliances
        Which Could be Difficult to Integrate and May Disrupt Our Business;

    o   The Loss of Any of Our Key Personnel Would Harm Our Business;


                                       16
<PAGE>

    o   Our Revenues Could be Negatively Affected by the Loss of Strategic
        Partners;

    o   Our Future Success Depends on Our Ability to Identify, Hire, Train and
        Retain Highly Qualified Employees;

    o   Our Charter Documents Could Make it More Difficult for a Third Party to
        Acquire Us;

    o   Our Business is Subject to General Economic Conditions, as Well as Those
        Specific to the Internet and Related Industries, Which Have Become Less
        Certain Following the Terrorist Attacks of September 11, 2001.

RECENT ACCOUNTING PRONOUNCEMENTS

    In July 2001 the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141 "Business
Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets." SFAS No.
141 requires business combinations initiated after June 30, 2001 to be accounted
for using the purchase method of accounting, and broadens the criteria for
recording intangible assets separate from goodwill. Recorded goodwill and other
intangibles will be evaluated against this new criteria and may result in
certain intangibles being subsumed into goodwill, or alternatively, amounts
initially recorded as goodwill may be separately identified and recognized apart
from goodwill. SFAS No. 142 requires the use of a nonamortization approach to
account for purchased goodwill and certain intangibles. Under a nonamortization
approach, goodwill and certain intangibles will not be amortized into results of
operations, but instead would be reviewed for impairment and written down and
charged to results of operations only in the periods in which the recorded value
of goodwill and certain intangibles is more than its fair value. The provisions
of each statement, which apply to goodwill and intangible assets acquired prior
to July 1, 2001, will be adopted by the Company on January 1, 2002. The
financial statement impact of adopting these statements has not yet been
determined.

    In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". The statement requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. The statement is effective for fiscal years beginning after June 15,
2002. The adoption of SFAS No. 143 is not expected to have a material impact on
the Company's financial statements.

    In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," that is applicable to financial
statements issued for fiscal years beginning after December 15, 2001. The FASB's
new rules on asset impairment supersede SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
and portions of Accounting Principals Board ("APB") Opinion No. 30, "Reporting
the Results of Operations." This statement provides a single accounting model
for long-lived assets to be disposed of and significantly changes the criteria
that would have to be met to classify an asset as held-for-sale. Classification
as held-for-sale is an important distinction since such assets are not
depreciated and are stated at the lower of fair value and carrying amount. This
statement also requires expected future operating losses from discontinued
operations to be displayed in the period(s) in which the losses are incurred,
rather than as of the measurement date as presently required. The provisions of
this statement are not expected to have a material impact on the Company's
financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company is subject to concentration of credit risk and interest rate risk
related to cash equivalents and marketable securities. The Company does not have
any derivative financial instruments as of September 30, 2001. Credit risk is
managed by limiting the amount of securities placed with any one issuer,
investing in high-quality marketable securities and securities of the U.S.
government and limiting the average maturity of the overall portfolio. The
majority of the Company's portfolio, which is classified as available-for-sale,
is composed of fixed income securities that are subject to the risk of market
interest rate fluctuations, and all of the Company's securities are subject to
risks associated with the ability of the issuers to perform their obligations
under the instruments. The Company may suffer losses in principal if forced to
sell securities, which have declined in market value due to changes in interest
rates.


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<PAGE>

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

    None

Item 2. Changes in Securities

    None

Item 3. Defaults upon Senior Securities

    None

Item 4. Submission of Matters to a Vote of Security Holders

    None

Item 5. Other Information

    None

Item 6. Exhibits and Reports on Form 8-K

    None

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<PAGE>


                                   SIGNATURES

Pursuant to the requirements 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.

                                                 VIEWPOINT CORPORATION
                                                 (Registrant)


                                             By: /s/ ROBERT E. RICE
                                                 ------------------------------
                                                 Robert E. Rice
                                                 Director, President and
                                                 Chief Executive Officer

                                             By: /s/ ANTHONY L. PANE
                                                 -------------------------------
                                                 Anthony L. Pane
                                                 Senior Vice President and
                                                 Chief Financial Officer

Date:  November 14, 2001

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