<PAGE>   1

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                                 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 JUNE 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: 0-26811

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

<Table>
<S>                                            <C>
                   DELAWARE                                      77-0465496
         (STATE OR OTHER JURISDICTION                         (I.R.S. EMPLOYER
      OF INCORPORATION OR ORGANIZATION)                    IDENTIFICATION NUMBER)
</Table>

                              1500 PLYMOUTH STREET
                        MOUNTAIN VIEW, CALIFORNIA, 94043
                                 (650) 567-8900
                  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
             NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
                               EXECUTIVE OFFICES)

     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 [ ]

     On June 30, 2001, 46,183,577 shares of the registrant's common stock,
$.0002 par value per share, were issued and outstanding.

--------------------------------------------------------------------------------
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<PAGE>   2

                               VENTRO CORPORATION

                                   FORM 10-Q
                      FOR THE QUARTER ENDED JUNE 30, 2001

                                     INDEX

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

Item 1.  Unaudited Condensed Consolidated Financial Statements:
         Balance Sheets as of June 30, 2001 and December 31, 2000....    1
         Statements of Operations for the Three and Six Months Ended
         June 30, 2001 and 2000......................................    2
         Statements of Cash Flows for the Six Months Ended June 30,
         2001 and 2000...............................................    3
         Notes to Condensed Consolidated Financial Statements........    4
Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations...................................   10
Item 3.  Qualitative and Quantitative Disclosure about Market Risk...   20

                        PART II  OTHER INFORMATION

Item 1.  Legal Proceedings...........................................   20
Item 2.  Changes in Securities and Use of Proceeds...................   20
Item 3.  Defaults Upon Senior Securities.............................   20
Item 4.  Submission of Matters to a Vote of Securities Holders.......   21
Item 5.  Other Information...........................................   21
Item 6.  Exhibits and Reports on Form 8-K............................   21
SIGNATURE............................................................   23
</Table>

                                        i
<PAGE>   3

                               VENTRO CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

                                     ASSETS

<Table>
<Caption>
                                                               JUNE 30,      DECEMBER 31,
                                                                 2001            2000
                                                              -----------    ------------
                                                              (UNAUDITED)        (1)
<S>                                                           <C>            <C>
Current assets:
  Cash and cash equivalents.................................   $  39,472      $  91,348
  Short-term investments....................................      14,776         94,987
  Due from marketplace companies, net.......................       3,280          4,269
  Other current assets......................................       2,386          6,303
  Current assets relating to discontinued operations........       1,350         15,620
                                                               ---------      ---------
          Total current assets..............................      61,264        212,527
Restricted cash.............................................       8,687          5,687
Property and equipment, net.................................       7,270         21,797
Ownership interest in marketplace companies.................       6,462          6,103
Other long-term assets, net.................................       2,668          9,333
Long-term assets relating to discontinued operations........          --          1,861
                                                               ---------      ---------
          Total assets......................................   $  86,351      $ 257,308
                                                               =========      =========

                     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Accounts payable..........................................   $   2,377      $   2,931
  Accrued compensation......................................       1,487          3,699
  Accrued expenses..........................................      11,878         14,423
  Customer advance..........................................       5,000          5,000
  Other current liabilities.................................         291            419
  Accrued liabilities relating to discontinued operations...       1,390         27,703
                                                               ---------      ---------
          Total current liabilities.........................      22,423         54,175
Notes payable, less current portion.........................       8,803        250,000
Other long-term liabilities.................................          19            206
Commitments and contingencies...............................          --             --
Stockholders' equity:
  Common stock, $.0002 par value; 175,000,000 shares
     authorized; 46,184 and 45,952 shares issued and
     outstanding............................................           9              9
  Additional paid-in capital................................     629,264        630,140
  Deferred compensation.....................................          --         (1,051)
  Accumulated deficit.......................................    (574,293)      (675,562)
  Accumulated other comprehensive income (loss).............         126           (609)
                                                               ---------      ---------
          Total stockholders' equity (deficit)..............      55,106        (47,073)
                                                               ---------      ---------
          Total liabilities and stockholders' equity
            (deficit).......................................   $  86,351      $ 257,308
                                                               =========      =========
</Table>

---------------
(1) Derived from audited financial statements

     See accompanying notes to condensed consolidated financial statements.
                                        1
<PAGE>   4

                               VENTRO CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<Table>
<Caption>
                                                  THREE MONTHS ENDED        SIX MONTHS ENDED
                                                       JUNE 30,                 JUNE 30,
                                                 ---------------------    --------------------
                                                   2001        2000         2001        2000
                                                 --------    ---------    --------    --------
<S>                                              <C>         <C>          <C>         <C>
Net revenues...................................  $     --    $      --    $     --    $     --
Cost of revenues...............................        --           --          --          --
  Gross profit.................................        --           --          --          --
                                                 --------    ---------    --------    --------
Operating Expenses:
  Research and development.....................     5,391        5,721      18,792      10,036
  Sales and marketing..........................     2,330        5,296       7,314      11,651
  General and administrative...................     3,166          608       9,220       1,522
  Restructuring and settlement charges.........    14,650           --      14,650          --
  Amortization of deferred stock-based
     compensation..............................        44          133         177         266
                                                 --------    ---------    --------    --------
  Total operating expenses.....................    25,581       11,758      50,153      23,475
                                                 --------    ---------    --------    --------
Operating loss.................................   (25,581)     (11,758)    (50,153)    (23,475)
Interest expenses..............................    (1,209)      (4,307)     (5,231)     (4,354)
Interest income and other, net.................     1,226        4,660       3,717       6,343
Gain (loss) on investment......................      (585)     (45,292)       (585)     29,240
Equity loss....................................    (2,905)      (6,603)     (5,641)     (8,305)
                                                 --------    ---------    --------    --------
Loss from continuing operations................   (29,054)     (63,300)    (57,893)       (551)
Discontinued operations:
  Loss from discontinued operations, net of
     income tax................................        --      (56,322)         --     (89,658)
Extraordinary item -- gain from retirement of
  bonds, net...................................    33,322           --     159,162          --
                                                 --------    ---------    --------    --------
          Net income (loss)....................  $  4,268    $(119,622)   $101,269    $(90,209)
                                                 ========    =========    ========    ========
Basic and diluted loss per share from
  continuing operations........................  $  (0.63)   $   (1.42)   $  (1.26)   $  (0.01)
                                                 ========    =========    ========    ========
Basic and diluted loss per share from
  discontinued operations......................  $     --    $   (1.27)   $     --    $  (2.17)
                                                 ========    =========    ========    ========
Basic and diluted income per share from
  extraordinary item...........................  $   0.72    $      --    $   3.45    $     --
                                                 ========    =========    ========    ========
Basic and diluted net income (loss) per
  share........................................  $   0.09    $   (2.69)   $   2.20    $  (2.18)
                                                 ========    =========    ========    ========
Weighted average common shares outstanding used
  in computing basic and diluted net income per
  share........................................    46,163       44,499      46,124      41,329
                                                 ========    =========    ========    ========
</Table>

     See accompanying notes to condensed consolidated financial statements.
                                        2
<PAGE>   5

                               VENTRO CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<Table>
<Caption>
                                                                 SIX MONTHS ENDED
                                                                     JUNE 30,
                                                              ----------------------
                                                                2001         2000
                                                              ---------    ---------
<S>                                                           <C>          <C>
OPERATING ACTIVITIES
Net income from continuing operations.......................  $ (57,893)   $    (551)
Net loss from discontinued operations.......................         --      (89,658)
Extraordinary item..........................................    159,162           --
Adjustments to reconcile net income (loss) to net cash used
  in operating activities:
  Depreciation and amortization.............................      4,146        6,194
  Amortization of deferred stock-based compensation.........        177        1,093
  Amortization of intangible assets.........................         --       55,498
  Equity loss...............................................      5,641        8,305
  Non-cash restructuring and settlement charges.............      6,844           --
  Gain on investment........................................         --      (29,240)
  Write-down of investment..................................        585           --
  Gain from retirement of bonds.............................   (159,162)          --
  Non-cash charges related to stock-option grants...........         42          120
Changes in operating assets and liabilities:
  Accounts receivable.......................................         --        1,119
  Due from marketplace companies............................         --       (4,690)
  Other current assets......................................      1,890       (9,755)
  Assets relating to discontinued operations................     16,130           --
  Other long term assets....................................       (241)      (7,161)
  Accounts payable..........................................       (554)     (11,273)
  Accrued compensation......................................     (2,212)       1,433
  Accrued expenses..........................................    (10,321)       8,608
  Accrued liabilities relating to discontinued operations...    (26,313)          --
                                                              ---------    ---------
         Net cash used in operating activities..............    (62,079)     (69,958)
                                                              ---------    ---------
INVESTING ACTIVITIES
Purchase of property and equipment..........................       (693)     (14,207)
Purchases of short-term investments.........................   (240,217)    (269,439)
Sale and maturities of short-term investments...............    321,163      339,127
Increase in restricted cash.................................     (3,000)          --
Investment in marketplace companies.........................     (6,000)      (8,388)
Purchase of Promedix, net of cash...........................         --          222
Purchase of SpecialtyMD, net of cash........................         --           67
                                                              ---------    ---------
         Net cash provided by investing activities..........     71,253       47,382
                                                              ---------    ---------
FINANCING ACTIVITIES
Principal payments on and repurchases of notes payable......    (60,931)        (103)
Net proceeds from issuance of convertible subordinated
  notes.....................................................         --      242,500
Principal payments on capital lease obligations and notes
  payable...................................................        (75)         (87)
Issuance of warrants........................................         --          375
Issuance of common stock under ESPP.........................        128        1,216
Proceeds from exercise of options...........................        132        1,114
Repurchase of common stock..................................       (304)          --
Payments of stockholders' notes receivable..................         --          985
                                                              ---------    ---------
         Net cash provided by (used-in) financing
         activities.........................................    (61,050)     246,000
                                                              ---------    ---------
Net increase in cash and cash equivalents...................    (51,876)     223,424
Cash and cash equivalents at beginning of period............     91,348       21,934
                                                              ---------    ---------
Cash and cash equivalents at end of period..................     39,472      245,358
                                                              =========    =========
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Note received upon sale of marketplace interest.............  $  11,000    $      --
Note transferred upon retirement of convertible debt........  $ (11,000)   $      --
Issuance of shares in connection with the acquisition of
  Promedix..................................................  $      --    $ 314,770
Issuance of shares in connection with the acquisition of
  SpecialtyMD...............................................  $      --    $ 103,708
Issuance of shares in connection with the investment in
  Amphire...................................................  $      --    $  31,614
Unrealized accounting loss on available-for-sale
  securities................................................  $    (735)   $     464
Other non-cash equity transactions..........................  $      --    $     608
</Table>

     See accompanying notes to condensed consolidated financial statements.
                                        3
<PAGE>   6

                               VENTRO CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   UNAUDITED

NOTE 1.   DESCRIPTION OF BUSINESS

     Ventro Corporation (the "Company" or "Ventro" or "We"), formerly known as
Chemdex Corporation, is a provider of technology and services for
business-to-business electronic commerce.

NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Basis of Presentation

     The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. Intercompany accounts and transactions have
been eliminated. While the quarterly financial information is unaudited, the
financial statements included in this Form 10Q reflect all adjustments
(consisting of normal recurring adjustments) that the Company considers
necessary for a fair presentation of the results of operations for the interim
periods covered and of the financial condition of the Company at the date of the
interim balance sheet. The results for the interim periods are not necessarily
indicative of the results for the entire year. The condensed consolidated
balance sheet as of December 31, 2000 has been derived from the audited
consolidated balance sheet as of that date. The information included in this
report should be read in conjunction with the Company's Annual Report on Form
10-K for fiscal 2000.

  Net Income (Loss) Per Share

     Net income (loss) per share is presented in accordance with the
requirements of Statement of Financial Accounting Standards No. 128 "Earnings
Per Share" (FAS 128) which requires dual presentation of basic earnings per
share ("EPS") and diluted EPS.

     Basic net income (loss) per share is computed using the weighted average
number of common shares outstanding during the period. Diluted net income per
share is computed using the weighted average number of common shares and
potentially dilutive shares outstanding during the period. The same number of
common shares has been used to calculate per share amounts from continuing
operations, discontinued operations and extraordinary items in 2001 in
accordance with FAS 128 guidance.

  Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

NOTE 3. COMPREHENSIVE INCOME (LOSS)

     Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income (SFAS 130), establishes standards of reporting and display
of comprehensive income and its components of net income (loss) and "Other
Comprehensive Income." Other Comprehensive Income refers to revenues, expenses,
gains and losses that are not included in net income (loss) but rather are
recorded directly in stockholders' equity. The components of comprehensive
income (loss) were as follows (in thousands):

<Table>
<Caption>
                                                         THREE MONTHS ENDED    SIX MONTHS ENDED
                                                              JUNE 30,             JUNE 30,
                                                         ------------------   -------------------
                                                          2001      2000        2001       2000
                                                         ------   ---------   --------   --------
<S>                                                      <C>      <C>         <C>        <C>
Net Income (Loss)......................................  $4,268   $(119,622)  $101,269   $(90,209)
Unrealized gains (losses) on available for sale
  securities...........................................     (25)     31,223        735       (464)
                                                         ------   ---------   --------   --------
Comprehensive Income (Loss)............................  $4,243   $ (88,399)  $102,004   $(90,673)
                                                         ======   =========   ========   ========
</Table>

                                        4
<PAGE>   7
                               VENTRO CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   UNAUDITED

NOTE 4. BALANCE SHEET DETAILS

  Other Long-term Assets

     Other long-term assets are comprised of the following (in thousands):

<Table>
<Caption>
                                                              JUNE 30,    DECEMBER 31,
                                                                2001          2000
                                                              --------    ------------
<S>                                                           <C>         <C>
Deposits and other..........................................   $1,029        $  395
Deferred debt offering costs, net of accumulated
  amortization of $1,382 at June 30, 2001 and $991 at
  December 31, 2000.........................................      224         6,938
Long-term investments.......................................    1,415         2,000
                                                               ------        ------
          Total other long-term assets......................   $2,668        $9,333
                                                               ======        ======
</Table>

NOTE 5. AFFILIATED MARKETPLACE COMPANIES

     On January 24, 2000, Ventro, DuPont, IBM and @ Ventures, the venture
capital division of CMGI, Inc., announced the formation of Industria, a
business-to-business e-commerce company in the worldwide fluid processing
market. For a cash investment of $5.0 million, as well as the contribution of
technology, Ventro received an ownership interest in Industria of approximately
49%. The investment was accounted for using the equity method. As of December
31, 2000, the equity investment in Industria had been reduced to $0.

     In the quarter ended June 30, 2001, Ventro acquired certain Industria
assets and hired certain former Industria employees. The Company also entered
into a mutual and general release in which Ventro and Industria terminated their
technology and service agreement. Receivable balances as of June 30, 2001 have
been collected or written down to $0 as a result of the agreement.

     On April 11, 2000, Ventro and Entangible.com announced the formation of
Amphire, a business-to-business e-commerce company in the food service market.
Ventro acquired a minority interest in Amphire for cash and equity totaling $35
million. Ventro's ownership interest in Amphire was approximately 35.6% at June
30, 2001. In January, 2001, Ventro contributed $2.0 million to Amphire's Series
B Preferred Stock Financing. In connection with the financing, the Company
terminated its technology and service agreements with Amphire. The investment is
accounted for using the equity method.

     On August 3, 2000, Ventro and American Express Company announced the
formation of MarketMile, a new business-to-business e-commerce company in the
business products and services market. For cash investments of $13.0 million,
$4.0 of which was made in January, 2001, Ventro holds an ownership interest in
MarketMile of approximately 30%. The investment is accounted for using the
equity method.

     In April 2001, MarketMile decided not to use Ventro's technology and
asserted that Ventro had breached its contract with MarketMile. Ventro believes
that it has not breached any of its contractual obligations to MarketMile. The
parties are currently discussing a settlement that would avoid litigation,
although there can be no assurance that the parties will reach agreement, nor
that reserves and accruals will be adequate to encompass Ventro's financial
exposure on this matter.

     At March 31, 2001, Ventro had approximately an 19% interest in Broadlane, a
business-to-business e-commerce company in the healthcare industry that Ventro
formed with Tenet Healthcare in January 2000. The investment was accounted for
using the cost method.

     In April, 2001, Ventro and Broadlane settled several disputes between the
two companies and severed relationships with each other. Under the terms of the
agreement, Broadlane repurchased all of its shares owned by Ventro and the
parties resolved all disputes relating to amounts owed to Ventro for an
aggregate

                                        5
<PAGE>   8
                               VENTRO CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   UNAUDITED

payment to Ventro of $11 million. The payment was made in the form of a two year
interest-bearing note from Broadlane which was guaranteed by Tenet Healthcare
Corporation. [See Note 6]

     The following table outlines the Company's equity investment activity with
its marketplace companies for the six months ended June 30, 2001 (in thousands):

<Table>
<Caption>
                                     CARRYING VALUE AT    ADDITIONAL    EQUITY LOSS OF    CARRYING VALUE AT
                                     DECEMBER 31, 2000    INVESTMENT       INVESTEE         JUNE 30, 2001
                                             $                $               $                   $
                                     -----------------    ----------    --------------    -----------------
<S>                                  <C>                  <C>           <C>               <C>
Industria..........................           --               --              --                  --
Amphire............................           --            2,000           1,208                 792
MarketMile.........................        6,103            4,000           4,433               5,670
Broadlane..........................           --               --             N/A                  --
</Table>

     For the three months and six months ended June 30, 2001, Ventro billed the
affiliated marketplace companies approximately $0.1 million and $3.7 million,
respectively, net of reserves. The billings were for charges incurred on behalf
of the marketplace companies, services Ventro provided and facility rent that
Ventro passed on.

NOTE 6. CONVERTIBLE SUBORDINATED NOTES

     In April 2000, Ventro incurred $250 million of indebtedness in connection
with the sale of convertible subordinated notes. The notes are due in 2007, bear
annual interest at 6%, and are convertible at the option of the holder into the
Company's common stock at a price of $90.78 per share. Original issuance costs
were approximately $9.3 million and are being amortized to interest expense over
the life of the notes.

     In March 2001, the Company repurchased $184.7 million of the convertible
subordinated notes for $270 in cash per $1,000 principal amount, plus accrued
and unpaid interest up to, but not including the date of payment. The
transaction resulted in an extraordinary gain of $125.8 million, consisting of a
gain of $135 million due to the discount, offset by the write-off of $6 million
in issue costs associated with the original issuance of the notes in April 2000
as well as $3.2 million of costs associated with the retirement of the notes.

     In June 2001, the Company repurchased in private transactions $56.5 million
in principal of its remaining outstanding convertible subordinated notes. Ventro
paid approximately $11 million in cash and assigned an $11 million promissory
note from Broadlane, Inc. as consideration for the Notes and the accrued
interest thereon. The transactions resulted in an extraordinary gain of $33
million, consisting of a gain of $35 million due to the discount, offset by the
write-off of $1.7 million in issue costs associated with the original issuance
of the notes in April 2000 as well as $300,000 of costs associated with the
retirement of the notes. At June 30, 2001, $8.8 million of convertible notes
remained outstanding and the remaining unamortized issue costs were
approximately $270,000.

NOTE 7. CONTINGENCIES

  Promedix and Chemdex

     Contracts with Promedix and Chemdex customers and suppliers provide, in
some cases, for cancellation notification periods longer than the Company
provided. In some cases, shorter notification periods have caused inconvenience
to customers and suppliers. However, as of June 30, 2001, no customer or
supplier of Promedix or Chemdex had filed a formal complaint against the
Company.

                                        6
<PAGE>   9
                               VENTRO CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   UNAUDITED

  Shareholder and Bondholder Litigation

     The Company has received notice that two shareholder class action lawsuits
have been filed. One alleges that the Company and certain individuals made false
and misleading statements concerning the Company's business model and earnings
for fiscal 2000, and the other alleges that certain investment banks, the
Company and individuals made false and misleading statements relating to the
Company's initial public offering. The Company also received notice in April
that a class action lawsuit was filed on behalf of debt instrument holders
alleging that the Company and certain individuals made false and misleading
statements concerning the Company's business model and earnings for fiscal 2000.
The Company believes it has meritorious defenses to the actions and intends to
defend the suits vigorously.

  Other

     The Company is a party to various claims in the ordinary course of
business. Although the results of litigation and claims cannot be predicted with
certainty, the Company believes the final outcome of such matters will not have
a material adverse effect on the Company's financial position, results of
operations or cash flows.

NOTE 8.   DEFERRED STOCK-BASED COMPENSATION

     The Company recorded deferred compensation for options granted in fiscal
years ended December 31, 1998 and 1999, for the difference at the option grant
date between the exercise price and the fair value of the common stock
underlying the options in accordance with FASB Interpretation No. 28. As of June
30, 2001, the Company had recorded aggregate deferred stock compensation of $8.7
million, $6.6 million of which was associated with discontinued operations. The
deferred stock compensation has been amortized over the vesting periods of the
stock options. Due to the workforce reduction in April 2001, the deferred
compensation balance associated with these option grants has been eliminated.

NOTE 9.   DISCONTINUED OPERATIONS

     In December 2000, the Company's Board of Directors adopted a formal plan
and announced the shut down of all business operations associated with the
Company's life sciences and specialty medical products marketplaces. The shut
down of Chemdex, Promedix and SpecialtyMD was completed in March 2001.

     In the first quarter of 2000, the Company had acquired the businesses
represented by Promedix and SpecialtyMD. These transactions were effected in
accordance with the purchase method of accounting. For Promedix, the purchase
consideration was 12.1 million shares of the Company's common stock valued at
$325.3 million. The entire Promedix purchase price was allocated to intangible
assets. For SpecialtyMD, the purchase consideration was 1.1 million shares of
the Company's common stock valued at $107.7 million. Of the SpecialtyMD purchase
price, $0.8 million was allocated to net tangible liabilities and the remainder
to intangible assets. The Company wrote off as part of the loss on disposal of
discontinued operations $326.7 million of intangible assets.

     No interest expense has been allocated to discontinued operations. In
addition, general corporate overhead has been allocated to continuing operations
for all periods presented.

     Revenues from discontinued operations were $0 and $24.2 million for the
three months and six months ended June 30, 2001, respectively. The Company paid
approximately $1.1 million and $6.7 million during the three months and six
months ended June 30, 2001, respectively, for severance, lease obligations and
other liabilities incurred to shut down Chemdex and Promedix. At June 30, 2001,
accrued liabilities relating to discontinued operations amounted to $1.4
million. The amount is comprised of $1.0 million of accounts payable to vendors
and $0.4 million of accruals for estimated costs to settle lease and other
contractual
                                        7
<PAGE>   10
                               VENTRO CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   UNAUDITED

obligations. Cash expenditures related to the liability balance of $1.4 million
are expected to extend through September 2001.

NOTE 10.   RESTRUCTURING AND SETTLEMENT CHARGES

     On April 26, 2001, the Company announced a restructuring plan in connection
with its efforts to improve efficiencies and to cut operating costs. The
restructuring included a workforce reduction, consolidation of excess
facilities, write-offs and accruals with respect to certain assets and
commitments, as well as termination of services with Broadlane, MarketMile and
Industria.

     As a result, the Company recorded a net charge of $14.7 million during the
three months ended June 30, 2001. This charge is reported as a component of net
loss from continuing operations.

     The restructuring and settlement charge for the three months ended June 30,
2001 is comprised of the following (in thousands):

<Table>
<S>                                                          <C>
Workforce reduction........................................  $ 3,649
Facility and equipment lease costs.........................  $ 7,476
Write-off of assets........................................  $ 9,539
Marketplace companies settlements..........................  $(6,014)
                                                             -------
Total:.....................................................  $14,650
                                                             =======
</Table>

     The workforce reduction charge of $3.6 million was primarily related to the
cost of severance and related benefits for the termination of approximately 170
employees, or two-thirds of the Company's workforce.

     The estimated facility and equipment lease costs of $7.5 million consisted
of $3.5 million of costs associated with closing the excess facilities in the
Mountain View, California location and $4 million of lease costs of excess
production equipment. The accrual of $7.5 million represents the difference
between the remaining lease payments and the cost recoveries anticipated to
result from subleases.

     The write-off of assets of $9.5 million is primarily related to property
and equipment that was disposed of or no longer used in operations. The assets
primarily consisted of computer equipment, production equipment and related
software, office equipment and furniture. The write-off of assets of $9.5
million represents the difference between the net book value of the assets and
the anticipated salvage values.

     During the three months ended June 30, 2001, cash payments relating to the
restructuring totaled approximately $4.4 million. The Company expects the
restructuring to be substantially complete by December 2001.

     The Company recorded a gain of $6 million in the quarter ended June 30,
2001 for the settlements and write-downs associated with its marketplace
companies: Broadlane, Industria and MarketMile. The gain primarily consisted of
receipt of an $11 million two year interest-bearing promissory note from
Broadlance and cash and certain assets from Industria, offset by accruals and
write-downs of receivables from the marketplace companies.

NOTE 11.   RECENT ACCOUNTING PRONOUNCEMENTS

     The FASB has recently issued FAS 141, Business Combinations, and FAS 142,
Goodwill and Other Intangible Assets. The company will adopt the provisions of
the statements for its recently announced acquisition of NexPrise, Inc. However,
the Company has not yet evaluated the impact on this acquisition. Under the new
rules, goodwill, if any, which results from the acquisition will not subject to
amortization; rather, goodwill will be subject to annual impairment tests.
Intangible assets with determinable lives will be

                                        8
<PAGE>   11
                               VENTRO CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   UNAUDITED

amortized over those lives. The Company does not anticipate any retroactive
impact from the adoption of these new statements.

NOTE 12.   SUBSEQUENT EVENTS

  Merger and Restructuring

     Ventro announced on July 16, 2001 that it had entered into a definitive
agreement to purchase privately held NexPrise, Inc., a provider of collaborative
commerce solutions located in Santa Clara, California. On August 8, 2001, Ventro
announced the transaction was completed. Under the terms of the stock purchase
agreement, the expected cost of the transaction will be approximately $27
million, inclusive of liabilities assumed and transaction costs. As part of the
transaction, Ventro assumed NexPrise's obligations under existing employee
option plans, which will result in the issuance of up to 3.5 million Ventro
shares, the value of which is included in the $27 million cost. Operations have
been consolidated in Ventro's Mountain View headquarters. The consolidation has
resulted in a reduction in the Ventro workforce of approximately 20 people. The
Company anticipates this action and other associated write-offs and accruals
will result in an aggregate charge of between $4 million and $6 million during
the third quarter. As a combined company, Ventro expects to have approximately
140 employees and contractors.

                                        9
<PAGE>   12

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATIONS

     The following Management's Discussion and Analysis of Results of Operations
and Financial Condition contains forward-looking statements. In some cases,
readers can identify forward-looking statements by terminology such as "may,"
"will," "should," "could," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue." These statements involve
known and unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially different from
those stated herein. Although management of Ventro believes that the
expectations reflected in the forward-looking statements are reasonable, the
Company cannot guarantee future results, performance, or achievements. For
further information, refer to Management's Discussion and Analysis and the Risk
Factors section of Ventro's Registration Statement on Form 10-K (File Number
0-26811) and the section entitled "Investment Considerations" in this Form 10-Q.

PRESENTATION OF FINANCIAL INFORMATION

     In the quarter ended December 31, 2000, Ventro decided to restructure and
shut down its two wholly owned marketplaces, Chemdex and Promedix. Accordingly,
results of continuing operations for Ventro for the three and six month periods
ending June 30, 2000 and 2001 have excluded the results of operations of Chemdex
and Promedix. The results of operations for Chemdex and Promedix have been
accounted for as discontinued operations. Aggregate charges of approximately
$386.1 million were recorded for the year ended December 31, 2000 in connection
with restructuring and discontinued operations.

OVERVIEW

     Ventro Corporation (the "Company" or "Ventro" or "We"), formerly known as
Chemdex Corporation, is a provider of technology and services for
business-to-business electronic commerce. In the three months and six months
ended June 30, 2001, the technology and services provided to the two existing
minority owned marketplaces were generally provided at cost, and did not result
in revenues being recorded. Amounts related to billed costs of services provided
were recorded by Ventro as offsets to related operating expenses incurred.

     Ventro announced on July 16, 2001 that it had entered into a definitive
agreement to purchase privately held NexPrise, Inc., a provider of collaborative
commerce solutions located in Santa Clara, California. On August 8, 2001, Ventro
announced the transaction was completed. Under the terms of the stock purchase
agreement, the expected cost of the transaction will be approximately $27
million, inclusive of liabilities assumed and transaction costs. As part of the
transaction, Ventro assumed NexPrise's obligations under existing employee
option plans, which will result in the issuance of up to 3.5 million Ventro
shares, the value of which is included in the $27 million cost. Operations have
been consolidated in Ventro's Mountain View headquarters. The consolidation has
resulted in a reduction in the Ventro workforce of approximately 20 people. The
Company anticipates this action and other associated write-offs and accruals
will result in an aggregate charge of between $4 million and $6 million during
the third quarter. As a combined company, Ventro expects to have approximately
140 employees and contractors.

     Ventro expects to incur operating losses on a quarterly basis for at least
the next twelve months as we develop and enhance our technology and service
offerings.

RESULTS OF OPERATIONS

     Revenues. Ventro has generated no revenues from the Company's continuing
operations to date; revenues were derived primarily from product sales through
the Chemdex and Promedix marketplaces, and their operations have been
discontinued. Recognition of future revenues, if any, will rely heavily upon the
Company's ability to develop and sell a product based on NexPrise technology.

     Research and Development. Research and development expenses consist
primarily of personnel and other expenses associated with developing, updating,
and enhancing software in support of our marketplace customers. Research and
development expenses from continuing operations decreased from $5.7 million for
the three months ended June 30, 2000 to $5.4 million for the three months ended
June 30, 2001 and increased

                                        10
<PAGE>   13

from $10 million for the six months ended June 30, 2000 to $18.8 million for the
six months ended June 30, 2001. The increase for the six months ended June 30,
2001 was primarily due to increased staffing and associated costs related to the
design and development of our marketplace provider solution as well as lower
cost recoveries from marketplace customers. The decrease in the three months
ended June 30, 2001 was due to the reduction in workforce that occurred in April
2001.

     Other than the anticipated one-time charge of approximately 3 million for
the write-off of in-process research and development related to the acquisition
of NexPrise, the Company anticipates moderate reduction in future research and
development expenses. However, such expenses are likely to continue to represent
a significant portion of ongoing operating expenses.

     Sales and Marketing. Sales and marketing expenses consist primarily of
advertising and promotional expenses, as well as, payroll and related expenses
for personnel engaged in enterprise sales activities and enterprise account
management. Sales and marketing expenses from continuing operations decreased
from $5.3 million for the three months ended June 30, 2000 to $2.3 million for
the three months ended June 30, 2001 and decreased from $11.7 million for the
six month ended June 30, 2000 to $7.3 million for the six months ended June 30,
2001. The decreases were primary due to the reduction in workforce that occurred
in April 2001 and decreased marketing efforts.

     The acquisition of NexPrise will bring additional sales and pre-sales
resources that may cause sales and marketing expenses to increase in the future.

     General and Administrative. General and administrative expenses consist
primarily of salaries, incentive payments, fees for professional services and
lease expenses. General and administrative expenses from continuing operations
increased from $0.6 million for the three months ended June 30, 2000 to $3.2
million for the three months ended June 30, 2001 and increased from $1.5 million
for the six months ended June 30, 2000 to $9.2 million for the six months ended
June 30, 2001. The increases were primary due to increased incentive payments
and lower cost recoveries from subsidiaries and marketplace investments.

     As a result of its restructuring, the Company anticipates a reduction in
future cash related general and administrative expenses.

     Restructuring and Settlement Charges. On April 26, 2001, the Company
announced a restructuring plan in connection with its efforts to improve
efficiencies and to cut operating costs. The restructuring included a workforce
reduction, consolidation of excess facilities, write-offs and accruals with
respect to certain assets and commitments, as well as termination of services
with Broadlane, MarketMile and Industria.

     As a result, the Company recorded a net charge of $14.7 million during the
three months ended June 30, 2001. This charge is reported as a component of net
loss from continuing operations.

     The restructuring and settlement charge for the three months ended June 30,
2001 is comprised of the following (in thousands):

<Table>
<S>                                                          <C>
Workforce reduction........................................  $ 3,649
Facility and equipment lease costs.........................  $ 7,476
Write-off of assets........................................  $ 9,539
Marketplace companies settlements..........................  $(6,014)
                                                             -------
Total......................................................  $14,650
                                                             =======
</Table>

     The workforce reduction charge of $3.6 million was primarily related to the
cost of severance and related benefits for the termination of approximately 170
employees, or two-thirds of the Company's workforce.

     The estimated facility and equipment lease costs of $7.5 million consisted
of $3.5 million of costs associated with closing the excess facilities in the
Mountain View, California location and $4 million of lease costs of excess
production equipment. The accrual of $7.5 million represents the difference
between the remaining lease payments and the cost recoveries anticipated to
result from subleases.

     The write-off of assets of $9.5 million is primarily related to property
and equipment that was disposed of or no longer used in operations. The assets
primarily consisted of computer equipment, production equipment

                                        11
<PAGE>   14

and related software, office equipment and furniture. The write-off of assets of
$9.5 million represents the difference between the net book value of the assets
and the anticipated salvage values.

     During the three months ended June 30, 2001, cash payments relating to the
restructuring totaled approximately $4.4 million. The Company expects the
restructuring to be substantially complete by December 2001.

     The Company recorded a gain of $6 million in the quarter ended June 30,
2001 for the settlements and write-downs associated with its marketplace
companies: Broadlane, Industria and MarketMile. The gain of $6 million primarily
consisted of receipt of an $11 million two year interest-bearing promissory note
from Broadlance and cash and certain assets from Industria, offset by accruals
and write-downs of receivables from the marketplace companies.

     Amortization of Deferred Stock-Based Compensation. Deferred stock
compensation has been amortized over the vesting periods of the stock options.
The company recognized $44,000 and $133,000 in stock compensation expense for
the three months ended June 30, 2001 and 2000, respectively, and $177,000 and
$266,000 for the six months ended June 30, 2001 and 2000, respectively. Due to
the workforce reduction announced in April 2001, the deferred compensation
balance associated with these option grants has been eliminated. However, the
acquisition of NexPrise is expected to generate some deferred stock based
compensation amounts in the future.

     Interest Expense. Interest expense decreased to $1.2 million from $4.3
million for the three months ended June 30, 2001 and 2000, respectively and
increased from $4.3 million to $5.2 million for the six months ended June 30,
2000 and 2001, respectively. Interest expense consists primarily of interest
related to convertible subordinated notes which were issued in April 2000, and
to a lesser extent, financed equipment and other financing arrangements.
Interest on the subordinated notes remaining at June 30, 2001 of approximately
$265,000 is payable semi-annually in arrears on April 1 and October 1 of each
year, commencing on October 1, 2001. In addition, the deferred offering costs of
the notes are being amortized as interest expense ratably over the term of the
notes. Interest expense in future quarters is expected to be less than the $1.2
million recorded in the three months ended June 30, 2001 as the Company
repurchased in June 2001 approximately $56.5 million of the $65.3 million of
convertible notes that had been outstanding as of March 31, 2001.

     Interest Income and Other. Interest income and other, net, decreased to
$1.2 million from $4.6 million for the three months ended June 30, 2001 and
2000, respectively and decreased from $6.3 to $3.7 for the six months ended June
30, 2000 and 2001, respectively. Interest income and other, net has been derived
primarily from earnings on investments in cash equivalents and short-term
investments. Interest increased during the second half of 2000 due to increased
cash, cash equivalents and short-term investments resulting from the net
proceeds of the Company's offering of 6% convertible subordinated notes in April
2000. Interest income for the next quarter is expected to be less than that
recognized in the three months ended June 30, 2001 as a result of lower invested
balances as well as lower interest rates.

     Net Loss from Continuing Operations. As a result of the changes described
above, and the accounting loss of $45.3 million and gain of $29.2 million for
the three months and six months ended June 30, 2000, respectively that we
recorded on our investment in Ariba, Inc. (formerly Tradex), the net loss from
continuing operations was $29.1 million and $63.3 million for the three months
ended June 30, 2001 and 2000, respectively, and $57.9 and $0.6 million for the
six months ended June 30, 2001 and 2000, respectively. Upon the closing of the
acquisition of NexPrise, the allocation of the purchase price based on the fair
value of the assets acquired will create additional amortization expenses.

     Discontinued Operations. In December 2000, the Company's Board of Directors
adopted a formal plan and announced the shut down of all business operations
associated with the Company's life sciences and specialty medical products
marketplaces. The shut down of Chemdex, Promedix and SpecialtyMD was completed
in March 2001.

     In the first quarter of 2000, the Company had acquired the businesses
represented by Promedix and SpecialtyMD. These transactions were effected in
accordance with the purchase method of accounting. For
                                        12
<PAGE>   15

Promedix, the purchase consideration was 12.1 million shares of the Company's
common stock valued at $325.3 million. The entire Promedix purchase price was
allocated to intangible assets. For SpecialtyMD, the purchase consideration was
1.1 million shares of the Company's common stock valued at $107.7 million. Of
the SpecialtyMD purchase price, $0.8 million was allocated to net tangible
liabilities and the remainder to intangible assets. The Company wrote off as
part of the loss on disposal of discontinued operations $326.7 million of
intangible assets.

     No interest expense has been allocated to discontinued operations. In
addition, general corporate overhead has been allocated to continuing operations
for all periods presented.

     Revenue from discontinued operations were $0 and $24.2 million for the
three months and six months ended June 30, 2001, respectively. The Company paid
approximately $1.1 million and $6.7 million during the three months and six
months ended June 30, 2001, respectively, for severance, lease obligations and
other liabilities incurred to shut down Chemdex and Promedix. At June 30, 2001,
accrued liabilities relating to discontinued operations amounted to $1.4
million. The amount is comprised of $1.0 million of accounts payable to vendors
and $0.4 million of accruals for estimated costs to settle lease and other
contractual obligations. Cash expenditures related to the liability balance of
$1.4 million are expected to extend through September 2001.

     Extraordinary gain. For the six months ended June 30, 2001, the Company
repurchased approximately $241.2 million of Convertible Subordinated Notes,
which represented approximately 96.5% of the outstanding Notes at December 2000.
The total consideration provided by the Company for the tendered notes was
approximately $71.8 million, for the Notes and the accrued interest thereon. The
Company recognized a gain of approximately $159.1 million on the transaction. As
most of the Notes have been retired, future such gains, if any, will be smaller
than that which occurred in the first and second quarters of 2001.

LIQUIDITY AND CAPITAL RESOURCES

     In April 2000, Ventro completed an offering of 6% convertible subordinated
notes payable in 2007 and realized net proceeds of $242.5 million. As a result
of the repurchases in March and June 2001, $8.8 million of convertible notes
remained outstanding at June 30, 2001. Our principal source of liquidity is
approximately $63 million of cash, cash equivalents, short-term investments and
restricted cash.

     For the six months ended June 30, 2001, net cash used in operating
activities totaled $62.1 million, which includes approximately $10 million
related to discontinued operations. The net cash used in operating activities
during this period was primarily due to net losses, which were partially offset
by non-cash charges of depreciation and amortization of deferred compensation,
amortization and write-offs of intangible assets.

     Net cash provided by investing activities totaled $71.3 million for the six
months ended June 30, 2001. During this period, the Company invested $6 million
in affiliated marketplace companies and increased restricted cash balance by
$3.0 million that primarily consisted of collateral for the corporate
facilities. In addition, during the six months ended June 30, 2001, the Company
had net sales and maturities of $80.9 million of short-term investments.

     Net cash used in financing activities was $61 million for the six months
ended June 30, 2001. Net cash used in financing activities resulted primarily
from retiring $241.2 million of the outstanding $250 million of our 6%
convertible subordinated notes in March and June 2001.

     In December 2000, we announced a plan to restructure our business by
shutting down our wholly owned marketplaces, Chemdex and Promedix. In April
2001, Ventro announced a plan to further restructure the business, consisting of
a significant reduction in the workforce, expected write-downs of operating
assets, vacating certain leased facilities and canceling certain contracts.

     Ventro expects to reduce recurring quarterly operating cash expenses to
approximately $7 million per quarter, once our restructuring actions, and the
NexPrise acquisition, are completed.

     Ventro's restructuring plans and the shutdown of Chemdex and Promedix were
designed to lower operating expenses. While the shutdown of Chemdex and Promedix
and the restructuring programs will
                                        13
<PAGE>   16

reduce the Company's cash operating expenses, the Company's ability to
adequately reduce cash used in operations, and ultimately generate profitable
results from operations, is dependent upon successful execution of its new
business plan, including the integration of the NexPrise.

INVESTMENT CONSIDERATIONS

     Our actual results may differ materially from those expressed in any
forward-looking statement as a result of certain factors, including but not
limited to those set forth below and in other portions of this document.

RECENTLY, WE HAVE MADE SUBSTANTIAL CHANGES IN OUR BUSINESS MODEL AND SHUT DOWN
THE BUSINESSES THAT HAD PROVIDED ALL OF OUR REVENUES SINCE INCEPTION

     In December 2000, we shut down our Chemdex and Promedix marketplaces, laid
off 235 employees and restructured certain Ventro operations. On April 26, 2001,
we implemented another restructuring in which we terminated 170 employees,
representing two-thirds of our workforce, accrued future lease costs associated
with excess production equipment and facilities, and wrote off assets as well as
the value of certain investments. During the first six months of 2001, we ceased
to provide technology and services to our remaining marketplaces. In July 2001,
we announced the acquisition for cash of NexPrise, Inc., a provider of
collaborative commerce solutions and, as part of a consolidation of the
companies' operations, Ventro terminated an additional 19 employees. Prior to
the merger, NexPrise terminated 27 employees. As a result of these actions,
there has been a fundamental change in Ventro's business. To date, we have not
announced product road map. There can be no assurance that we will be successful
in developing viable technology or a complete service offerings.

OUR RESTRUCTURINGS MAY NOT SUFFICIENTLY REDUCE OPERATING EXPENSES

     Our restructurings were designed to lower our current level of operating
expenses by reducing our marketing efforts, terminating or restructuring
existing hosting, professional services and marketing arrangements and
significantly reducing our current employee and contractor staffing levels.
While the restructurings will reduce cash operating expenses, our ability to
adequately reduce cash used in operations, and ultimately generate profitable
results from operations, is dependent upon successful execution of our business
plan, and obtaining new customers. As of June 30, 2001, we had working capital
of $38.8 million and had an accumulated deficit of $574.3 million. During the
six months ended June 30, 2001, we used cash in operating activities of $62.1
million. We can provide no assurance that we will be successful in implementing
our new business plan or sufficiently reducing our operating expenses in the
future. Our inability to reduce costs or to integrate our recent acquisition and
develop a successful product and services offering could have a material adverse
effect upon our ability to successfully transition to our new business plan and
to remain in business.

WE HAVE A LIMITED OPERATING HISTORY AND AN EVOLVING TECHNOLOGY AND SERVICE
OFFERING, WHICH MAKES IT DIFFICULT TO EVALUATE OUR FUTURE PROSPECTS

     The success of Ventro is based on integrating and developing a viable
technology and services offering and securing new customers. Our business model
is not fully developed, not proven and depends upon our ability, among other
things, to:

     - develop and market technology and services solutions that achieve broad
       market acceptance by our customers;

     - acquire and deploy a sufficient number of customers to achieve
       profitability;

     - extend our technology to support a wide range of hardware and software to
       meet the needs of a large range of customers with a variety of needs;

     - acquire or license third party technologies that we require to deliver
       our technology and services;

     - overcome publicity related to our public announcements of restructurings,
       shareholder litigation and the shutdown of our Chemdex and Promedix
       marketplaces;

                                        14
<PAGE>   17

     - acquire customers operating in industries we have not served to date and
       provide them quality technology and services.

     We may not successfully address these risks. If we do successfully address
these risks, additional risks related to factors that are outside our control
may prevent us from realizing sufficient revenues or profit margins to reach or
sustain profitability. For example, electronic commerce solutions may experience
problems with users as a result of security and privacy concerns, general
reticence about technology or the Internet or the failure of the market to
develop the necessary infrastructure for Internet-based communications, such as
wide-spread Internet access, high-speed modems, high-speed communication lines
and computer availability.

VENTRO AND NEXPRISE MAY NOT ACHIEVE THE BENEFITS THEY EXPECT FROM THE MERGER AND
THIS MAY HAVE A MATERIAL ADVERSE EFFECT ON THE COMBINED COMPANY'S BUSINESS,
FINANCIAL CONDITION AND OPERATING RESULTS

     The combined company will need to overcome significant issues in order to
realize any benefits or synergies from the merger, including the timely,
efficient and successful execution of a number of post-merger events. Key events
include:

     - integrating the operations of the two companies

     - retaining and assimilating the key personnel of each company

     - developing a product that will be attractive to existing and potential
       customers

     - retaining existing customers and strategic partners of each company

     - creating uniform standards, controls, procedures, policies and
       information systems.

     The successful execution of these post-merger events will involve
considerable risk and may not be successful. These risks include:

     - The potential disruption of the combined company's ongoing business and
       distraction of its management

     - The difficulty of incorporating acquired technology and rights into the
       combined company's products and services

     - Unanticipated expenses related to technology integration

     - The impairment of relationships with employees and customers as a result
       of any integration of new management personnel

     - Potential unknown liabilities associated with the merger

     The combined company may not succeed in addressing these risks or other
problems encountered in connection with the merger

WE ARE DEPENDENT ON A SMALL NUMBER OF CUSTOMERS IN A LIMITED NUMBER OF
INDUSTRIES

     To date, NexPrise has derived a significant portion of its revenues from a
small number of customers in a two industries. Many of our customers do not have
contracts that extend beyond one year. A critical component of the business plan
of the combined company will be the acquisition of new customers in other
industries, increasing the number of users in our current customers and renewing
current contracts. There can be no assurance that we will be successful in
developing profitable relationships with new customers in new industries or that
we will retain NexPrise's existing customers.

                                        15
<PAGE>   18

OUR OPERATING RESULTS WILL BE HIGHLY DEPENDENT ON LICENSE AND SERVICE REVENUES
FROM ONE SOFTWARE SUITE, AND OUR BUSINESS COULD BE MATERIALLY HARMED BY FACTORS
THAT ADVERSELY AFFECT THE PRICING AND DEMAND FOR THIS SOFTWARE SUITE

     Substantially all of NexPrise's license revenues have been, and the license
and services revenues of the combined company are expected to continue to be,
derived from the license of the ipTeam(TM) solution. Accordingly, our future
operating results will depend on the demand for ipTeam by future customers,
including new and enhanced releases that are subsequently introduced. ipTeam was
commercially launched in 1998. If our competitors release new products that are
superior to ipTeam in performance or price, or if we fail to enhance ipTeam and
introduce new products in a timely manner, demand for our products may decline,
and we may have to reduce the pricing of our products. A decline in demand or
pricing for ipTeam as a result of these or other factors would significantly
reduce the revenues we can expect in the future.

     In the past, many software companies have experienced delays in the
commencement of commercial release of their products. To date, such delays have
not had a material impact on NexPrise's revenues. In the future, we may fail to
introduce or deliver new products on a timely basis. If new releases or products
are delayed or do not achieve market acceptance, we could experience customer
dissatisfaction or a delay or loss of revenues. In addition, customers may delay
purchases of our products in anticipation of future releases. If customers defer
material orders in anticipation of new releases or new product introductions,
our revenues may decline.

     Moreover, as we release enhanced versions of our products, we may not be
successful in upgrading our customers who purchased previous versions of the
product to the current version. We also may not be successful in selling add-on
modules for our products to existing customers. Any failure to continue to
upgrade existing customers' products or sell new modules, if and when they are
introduced, could negatively impact customer satisfaction and our revenues.

VENTRO HAS A HISTORY OF LOSSES, NO SIGNIFICANT REVENUES AND EXPECTS TO CONTINUE
TO INCUR SIGNIFICANT OPERATING LOSSES AND NEGATIVE CASH FLOW; VENTRO MAY NEVER
BE PROFITABLE

     Ventro has derived revenues solely from product sales through its Chemdex
and Promedix marketplaces, and their operations have been discontinued. In
addition, it is unlikely that we will recognize any revenue in the future
related to our affiliated marketplaces. Since its inception, NexPrise has
recorded revenues from a small number of customers, not all of which are
committed to purchase long-term licenses. There can be no assurance that the
combined company will be successful in identifying new customers or negotiating
commercially acceptable contractual provisions that will allow recording of
revenues. Accordingly, we have little basis upon which to anticipate any
revenues. Ventro has spent significant funds to lease third-party data center
space, procure hardware, software and networking products and develop our
operations, research and development and sales and marketing organizations and
to acquire NexPrise. We have incurred significant operating and net losses and
negative cash flow and have not achieved profitability. There can be no
assurance that we will ever be profitable.

ONE OF OUR MARKETPLACES IS DISSATISFIED WITH OUR PRODUCT AND MAY COMMENCE
LITIGATION

     We entered into a technology and services agreement with MarketMile in
2000. The contract set forth a timetable for providing functionality and
establishing a marketplace to provide e-commerce solutions for the business
products and services market. MarketMile has informed the Company they are
dissatisfied with the Company's e-commerce solution. MarketMile has expressed to
Ventro that MarketMile does not expect to utilize the Ventro solution and has
asserted that Ventro has breached its contractual responsibilities. Ventro
disputes this assertion. While the parties are in discussion to resolve the
dispute, it could potentially result in litigation. There can be no assurance
that reserves and accruals will be adequate to encompass Ventro's financial
exposure in this matter.

                                        16
<PAGE>   19

WE PLAN TO OPERATE IN A NEW, HIGHLY COMPETITIVE MARKET, AND OUR INABILITY TO
COMPETE SUCCESSFULLY AGAINST NEW ENTRANTS AND ESTABLISHED COMPANIES WOULD LIMIT
OUR ABILITY TO GAIN SIGNIFICANT MARKET SHARE

     Our target market is rapidly evolving and highly competitive. It will
likely be characterized by an increasing number of market entrants, as there are
few barriers to entry.

     We have competition from a diverse group of companies. Competition may come
from companies such as MatrixOne and PTL. In addition, providers of various
software products such as Ariba, Commerce One, Oracle and SAP may expand their
product offerings to be competitive with us in the future.

     Our current and potential competitors may develop superior e-commerce
platforms that achieve greater market acceptance than our solution. Many of our
existing and potential competitors have longer operating histories, greater name
recognition, larger customer bases and significantly greater financial,
technical and marketing resources than we do. Such competitors can undertake
more extensive marketing campaigns for their brands, products and services,
adopt more aggressive pricing policies and make more attractive offers to
customers, potential employees, distribution partners, commerce companies and
third-party suppliers.

     In addition, substantially all of our prospective customers have
established and long-standing relationships with some of our competitors.
Accordingly, we cannot be certain that we will be able to expand NexPrise's
customer and user base, or retain its current customers. We may not be able to
compete successfully against our current or future competitors, which could have
a material adverse effect on our business, results of operations and financial
condition.

OUR FINANCIAL PERFORMANCE, WORKFORCE REDUCTION AND ACQUISITION OF NEXPRISE MAY
ADVERSELY AFFECT THE MORALE AND PERFORMANCE OF OUR PERSONNEL AND OUR ABILITY TO
HIRE NEW PERSONNEL

     In connection with the evolution of our business model and in order to
reduce our cash expenses, in both December 2000 and April 2001 we announced
significant workforce reductions. We announced the acquisition of NexPrise in
July 2001 and soon thereafter the company terminated 19 employees. In addition,
recent trading levels of our common stock have decreased the value of the stock
options granted to employees pursuant to our stock option plan. As a result of
these factors, our remaining personnel may seek employment with larger, more
established companies or companies they perceive to have better prospects.

IF OUR COMMON STOCK PRICE REMAINS UNDER $1.00, OR IF WE OTHERWISE FAIL TO COMPLY
WITH NASDAQ RULES, OUR COMMON STOCK IS LIKELY TO BE DELISTED FROM THE NASDAQ
NATIONAL MARKET, WHICH COULD ELIMINATE THE TRADING MARKET FOR OUR COMMON STOCK

     If the market price for our common stock remains below $1.00 per share
through September 4, 2001 or our market capitalization falls below $35 million,
our net tangible assets fall below $4 million, or we otherwise fail to meet the
criteria for continued listing on the Nasdaq National Market, our common stock
may be delisted from the Nasdaq National Market. If the stock is delisted, it
would significantly decrease the liquidity of an investment in Ventro common
stock. In addition, the stock may be deemed to be penny stock. If our common
stock is considered penny stock, it would be subject to rules that impose
additional sales practices in broker-dealers who sell our securities. For
example, broker-dealers must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale. Also, a disclosure schedule must be prepared prior to any
transaction involving a penny stock and disclosure is required about sales
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities. Monthly statements are also required
to be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stock. Because of these
additional obligations, some brokers may be unwilling to effect transactions in
penny stocks. This could have an adverse effect on the liquidity of our common
stock and the ability of investors to sell the common stock.

                                        17
<PAGE>   20

SEVERAL KEY MEMBERS OF OUR MANAGEMENT TEAM HAVE ONLY RECENTLY JOINED US AND IF
THEY ARE NOT SUCCESSFULLY INTEGRATED INTO OUR BUSINESS OR FAIL TO WORK TOGETHER
AS A MANAGEMENT TEAM, OUR BUSINESS WILL SUFFER

     Several key members of our management team have joined us recently,
including Ted Drysdale, our President, Varma Kuraparaju, our Vice President,
Engineering, John Lynch, our Senior Vice President of Sales and Services and
David Zechnich, our Chief Financial Officer. If we do not effectively integrate
these executives and key personnel into our business, or if they do not work
together with existing personnel as a management team to enable us to implement
our business strategy, our business will suffer.

OUR BUSINESS WILL INVOLVE A LENGTHY AND UNPREDICTABLE SALES CYCLE

     The sales cycle for the target customers of the technology and services we
anticipate providing tends to be lengthy; our sales cycle may be somewhat longer
than those of our more established competitors. The unpredictability of the
length of our sales cycle could make it difficult to forecast revenue and plan
expenditures. Additionally, any delays in deployment of our services related to
our inexperience with a type of business or the size or complexity of the
account would delay our ability to recognize revenue from that account. Such
delays could adversely affect our financial results.

OUR BUSINESS WILL SUFFER IF WE DO NOT ENHANCE OR INTRODUCE NEW SERVICES AND
UPGRADES TO MEET CHANGING CUSTOMER REQUIREMENTS

     The market for business-to-business e-commerce technology and services is
characterized by rapid technological change, frequent new hardware, software and
networking product introductions and Internet-related technology enhancements,
uncertain product life cycles, changes in customer demands and evolving industry
standards. If we do not develop technology that can respond to these changes the
probability of us obtaining new customers will be remote. In particular, we are
designing our technology to support a variety of hardware, software and
networking products that we believe to be proven and among the most widely used.
We can make no assurances, however, that future customers will continue to use
these products. Even if they do, new versions of these products are likely to be
released and we will need to adapt our technology to keep pace with changes made
to hardware and software configurations and network infrastructures.

     If we do not develop, license or acquire new technology, or deliver
enhancements to existing products on a timely and cost-effective basis, we may
be unable to meet the growing demands of potential customers. In addition, as we
introduce new services or technologies into existing customer architectures, we
may experience performance problems associated with incompatibility among
different versions of hardware, software and networking products. To the extent
that such problems occur, we may face adverse publicity, delay in market
acceptance of our services or customer claims against us, any of which could
harm our business.

WE ANTICIPATE OUR OPERATING RESULTS WILL FLUCTUATE SIGNIFICANTLY FROM QUARTER TO
QUARTER

     Important factors that could cause our quarterly results to fluctuate
materially include:

     - the timing of obtaining new customers (length of sales cycle);

     - the timing of deploying services for new customers;

     - the timing and magnitude of operating expenses and capital expenditures;

     - costs related to the various third-party technologies we incorporate into
       our products;

     - utilization of our leased third-party data center space and technology
       infrastructure;

     - changes in our pricing policies or those of our competitors; and

     - the amount of credits that we may be required to issue to our current
       customers if we fail to deliver our services pursuant to contractual
       arrangements.

                                        18
<PAGE>   21

     Due to these and other factors, quarter-to-quarter comparisons of our
operating results may not be meaningful. You should not rely on our results for
any one quarter as an indication of our future performance. In future quarters,
our operating results may fall below the expectations of public market analysts
or investors. If this occurs, the market price of our common stock would likely
decline.

     Our current and future levels of operating expenses and capital
expenditures are based largely on our operating plans and estimates of future
billings and revenues. These expenditure levels are, to a large extent, fixed in
the short term. We may not be able to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall, and any significant shortfall
in revenue relative to planned expenditures could negatively impact our business
and results of operations.

WE ARE DEPENDENT ON INTELLECTUAL PROPERTY AND ON PRODUCTS LICENSED OR PURCHASED
FROM THIRD PARTIES AND EXPOSED TO LEGAL LIABILITY FOR INFRINGEMENT

     Our success and ability to compete depends on our ability to develop and
maintain the proprietary aspects of our technology. Although we do not have any
registered trademarks, we rely on a combination of copyright, trademark and
trade secret laws and contractual restrictions to establish and product the
proprietary aspects of our technology. We seek to protect our source code for
our software, documentation and other written materials under trade secret
copyright laws. Finally, we seek to avoid disclosure of our intellectual
property by requiring employees and consultants with access to our proprietary
information to execute confidentiality agreements with us and by restricting
access to our source code. Although we have patent applications pending, no
patents have been issued to us, which may significantly limit our ability to
protect the proprietary aspects of some of our technology.

     Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy aspects of our products or to obtain and use information
that we regard as proprietary. Litigation may be necessary in the future to
enforce our intellectual property rights, to protect our trade secrets, and to
determine the validity and scope of the proprietary rights of others. Any
resulting litigation could result in substantial costs and diversion of
resources and could have a material adverse effect on our business operating
results.

     Our business has involved the licensing of our technology to our customers
and joint venture partners. Most licenses to our partners are exclusive within
such partner's industry or business, thus limiting to some extent our ability to
use and license our technology in the future. Pursuant to our existing licenses,
we have made certain representations and warranties and agreed to indemnify our
licensees against claims of infringement by third parties. Thus, we may be
exposed to a significant risk of liability for intellectual property
infringement claims by others. Our success and ability to compete also depend on
our ability to operate without infringing upon the proprietary rights of others.
In the event of a successful claim of infringement against us and our failure or
inability to license the infringed technology, our business and operating
results would be significantly harmed.

     As part of our normal operations, we purchase, license or lease software,
hardware and networking products from third party commercial vendors. We obtain
most of our components from third parties on a purchase order basis. These
products may not continue to be available on commercially reasonable terms, or
at all. The loss of these products could result in delays in the sale of our
services until equivalent technology, if available, is identified, procured and
integrated, and these delays could result in lost revenues. Some of the key
components of our services are available only from sole or limited sources. For
example, only hardware manufactured by two vendors is compatible with the
Solaris operating system, which is a key component of our infrastructure.
Further, to the extent that the vendors from whom we purchase these products
increase their prices, our gross margins could be negatively affected.

WE FACE RISKS ASSOCIATED WITH SHAREHOLDER AND BONDHOLDER LITIGATION

     Several class action lawsuits have been filed and served on Ventro alleging
that the Company and certain individuals made false and misleading statements
concerning our business model and earnings for fiscal 2000 and concerning the
Company's initial public offering. Although we believe that we have meritorious
defenses to the actions and intend to defend the suits vigorously, we cannot
predict with certainty the outcome of these
                                        19
<PAGE>   22

lawsuits. Our defense against such lawsuits will be costly and will require a
significant commitment of time and resources by our senior management.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

  Market Risk Disclosure

     The following discussion about the Company's market risk disclosures
involves forward-looking statements. Actual results could differ materially from
those projected in the forward-looking statements. We are exposed to market risk
related primarily to changes in interest rates. However, we do not hold
derivative financial instruments for speculative or trading purposes.

  Interest Rate Sensitivity

     We maintain a short-term investment portfolio consisting of mainly income
securities with maturities of less than one year. These available-for-sale
securities are subject to interest rate risk and will fall in value if market
interest rates increase. We place our investments in instruments that meet high
credit quality standards, as specified in our investment policy. We do not
expect any material loss with respect to our investment portfolio. Our notes
payable are at a fixed interest rate.

  Foreign Currency Risk

     Our sales from inception to date are included in discontinued operations.
The sales have been made to U.S. customers and, as a result, we have not had any
exposure to factors such as changes in foreign currency exchange rates or weak
economic conditions in foreign markets. However, in future periods, we expect to
sell in foreign markets. If our sales will be made in U.S. dollars, a
strengthening of the U.S. dollar could make our products less competitive in
foreign markets.

                          PART II.  OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

SHAREHOLDER AND BONDHOLDER LITIGATION

     In April 2001, the Company received notice that two types of shareholder
class action lawsuits had been filed. One alleges that the Company and certain
individuals made false and misleading statements concerning the Company's
business model and earnings for fiscal 2000, and the other alleges that certain
investment banks, the Company and individuals made false and misleading
statements relating to the Company's Initial Public Offering. The Company also
received notice in April that another type of class action lawsuit was filed on
behalf of debt instrument holders alleging that the Company and certain
individuals made false and misleading statements concerning the Company's
business model and earnings for fiscal 2000. While the outcomes can not be
predicted, the Company believes it has meritorious defenses to the actions and
intends to defend the suits vigorously.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     None

                                        20
<PAGE>   23

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

     a) The Company held its annual meeting of stockholders in Palo Alto,
        California on June 04, 2001. Of the 46,772,014 shares outstanding as of
        April 5, 2001, the record date, 31,333,220 shares were present or
        represented by proxy at the meeting. At the meeting the following
        actions were voted upon:

     b) To elect the following six (6) directors to serve until the next Annual
        Meeting of Shareholders and until their successors are duly elected and
        qualified:

<Table>
<Caption>
                                         AUTHORITY WITHHELD       FOR
                                         ------------------    ----------
<S>                                      <C>                   <C>
Brook H. Byers.........................       189,068          31,144,152
David P. Perry.........................       204,383          31,128,837
Jonathan D. Callaghan..................       189,235          31,143,985
Naomi O. Seligman......................       190,100          31,143,120
L. John Wilkerson......................       188,331          31,144,889
Jan Leschly............................       185,840          31,147,380
</Table>

     c) To approve the appointment of Ernst & Young LLP as the independent
        auditors of Ventro for fiscal year 2001:

<Table>
<Caption>
AGAINST    ABSTAIN    NO VOTES       FOR
-------    -------    --------    ----------
<S>        <C>        <C>         <C>
71,809...  21,150        0        31,240,261
</Table>

ITEM 5.   OTHER INFORMATION

     On August 8, 2001, the Company completed its previously announced
acquisition of all of the issued and outstanding shares of NexPrise, Inc. The
discussion of this transaction set forth in Item 2 "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Overview" is
incorporated by reference into this Item 5.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

     The following is a list of exhibits filed as part of this Report on Form
10-Q. Where indicated by footnote, exhibits that were previously filed are
incorporated by reference.

<Table>
<Caption>
EXHIBIT
NUMBER                            DESCRIPTION
-------                           -----------
<C>       <S>
  *2.9    Agreement and Plan of Merger and Reorganization, dated July
          13, 2001, by and among Registrant, NexPrise, Inc., a
          Delaware corporation, Neptune Merger Corp., a Delaware
          Corporation, Ram Sriram as Stockholder Representative, and
          U.S. Bank Trust, National Association as Escrow Agent.
   3.1    Amended and Restated Certificate of Incorporation of
          Ventro(1)
   3.2    Amended and Restated Bylaws of Ventro(2)
  10.1    Form of Indemnification Agreement between Ventro and each of
          its officers and directors(2)
**10.2    Form of Change of Control Agreement between Ventro, each of
          its officers and certain employees(1)
**10.4    1998 Stock Plan, as amended, and form of option agreement(3)
**10.6    1999 Directors' Stock Plan(1)
  10.22   NexPrise, Inc. 1997 Stock Plan (which is incorporated herein
          by reference to Exhibit 4.1 to the Registrant's S-8 filed
          with the Commission August 9, 2001).
  10.23   Form of NexPrise, Inc. Nonstatutory Stock Option Agreement
          (which is incorporated herein by reference to Exhibit 4.2 to
          the Registrant's S-8 filed with the Commission on August 9,
          2001).
 *21.1    Subsidiaries of Ventro.
</Table>

                                        21
<PAGE>   24

---------------
(1) Incorporated by reference to the corresponding Exhibit previously filed as
    an Exhibit to Registrant's Registration Statement on Form S-1 (File No.
    333-78505) filed with the Commission on May 14, 1999, as amended, which
    Registration Statement was declared effective July 26, 1999.

(2) Incorporated by reference to the corresponding Exhibit previously filed as
    an exhibit to Registrant's Form 10-K filed with the Commission on February
    26, 2001.

(3) Incorporated by reference to the corresponding Exhibit previously filed as
    an Exhibit to Registrant's Registration Statement on Form S-1 filed with the
    Commission on March 6, 2000. (file 333-31774)

 *  Filed herewith

**  Indicates management contract or compensatory plan or arrangement

     Reports on Form 8-K:

     (1) On July 30, 2001, Ventro filed a report on form 8-K announcing its
intent to acquire NexPrise.

                                        22
<PAGE>   25

                                   SIGNATURE

     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 on August 14, 2001.

                                          VENTRO CORPORATION

                                          By:     /s/ DAVID P. PERRY
                                          --------------------------------------
                                                      David P. Perry
                                                 Chief Executive Officer

                                        23