<PAGE>
================================================================================

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


                                    FORM 10-Q


(Mark One)
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

                                       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: 0-27741


                                   VIADOR INC.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                  94-3234636
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                 Identification Number)


                               977 BENECIA AVENUE,
                           SUNNYVALE, CALIFORNIA 94085
               (Address of principal executive offices) (Zip Code)

                         TELEPHONE NUMBER (408) 735-5956
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                          Yes   [X]           No   [ ]



As of July 31, 2002, there were 33,647,727 shares of the Registrant's Common
Stock outstanding, par value $0.001 per share.


================================================================================

<PAGE>

                                   VIADOR INC.

                                    FORM 10-Q
                                      INDEX
                  FOR THREE AND SIX MONTHS ENDED JUNE 30, 2002


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

  ITEM 1.      Condensed Consolidated Financial Statements:

               Condensed Consolidated Balance Sheets -- June 30, 2002 (unaudited) and
                  December 31, 2001....................................................     3

               Condensed Consolidated Statements Of Operations -- Three and Six Months
                  Ended June 30, 2002 and 2001 (unaudited).............................     4

               Condensed Consolidated Statements of Cash Flows -- Six Months Ended
                  June 30, 2002 and 2001 (unaudited)...................................     5

               Notes to Condensed Consolidated Financial Statements (unaudited)........     6

  ITEM 2.      Management's Discussion and Analysis of Financial Condition and Results
                  of Operations........................................................    16

  ITEM 3.      Quantitative and Qualitative Disclosures about Market Risk..............    39


                                     PART II -- OTHER INFORMATION

  ITEM 1.      Legal Proceedings.......................................................    40

  ITEM 2.      Changes in Securities and Use of Proceeds...............................    41

  ITEM 3.      Defaults Upon Senior Securities.........................................    41

  ITEM 4.      Submission of Matters to a Vote of Security Holders.....................    41

  ITEM 5.      Other Information.......................................................    41

  ITEM 6.      Exhibits and Reports on Form 8-K........................................    41

  Signatures.........................................................................      42
</TABLE>



                                       2
<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                   VIADOR INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (IN THOUSANDS, EXCEPT SHARE DATA; UNAUDITED)


<TABLE>
<CAPTION>
                                                                        JUNE 30,     DECEMBER 31,
                                                                          2002           2001
                                                                        --------     ------------
<S>                                                                     <C>          <C>
ASSETS
Current assets:
  Cash and cash equivalents ......................................      $  1,449       $    518
  Restricted cash ................................................            --            525
  Accounts receivable, net of allowance of $150 at June 30,
    2002, and $380 at December 31, 2001 ..........................           780          1,195
  Other current assets ...........................................           173            182
                                                                        --------       --------
    Total current assets .........................................         2,402          2,420
Property and equipment, net ......................................           444            726
Other assets .....................................................           145            160
                                                                        --------       --------
    Total assets .................................................      $  2,991       $  3,306
                                                                        ========       ========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable ...............................................      $    292       $  2,273
  Accrued liabilities ............................................           332            582
  Accrued vacation and bonus .....................................           206            242
  Accrued restructuring expense ..................................            --             23
  Deferred revenue ...............................................         2,467          2,605
                                                                        --------       --------
    Total current liabilities ....................................         3,297          5,725
                                                                        --------       --------

Convertible note payable, net of unamortized discount of
    $854 at June 30, 2002 ........................................           146             --

Stockholders' deficit:
  Common stock, $0.001 par value: 100,000,000 shares
    authorized as of June 30, 2002 and December 31, 2001;
    issued and outstanding: 33,674,727 shares and 33,147,212
    shares as of June 30, 2002 and December 31, 2001,
    respectively .................................................            34             34
  Additional paid-in capital .....................................        75,926         74,809
  Deferred stock-based compensation ..............................          (371)          (452)
  Treasury stock .................................................           (34)           (34)
  Accumulated deficit ............................................       (76,023)       (76,776)
  Accumulated other comprehensive income .........................            16             --
                                                                        --------       --------
    Total stockholders' deficit ..................................          (452)        (2,419)
                                                                        --------       --------
    Total liabilities and stockholders' deficit ..................      $  2,991       $  3,306
                                                                        ========       ========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>

                                   VIADOR INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (IN THOUSANDS, EXCEPT PER SHARE DATA; UNAUDITED)


<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                 JUNE 30,                     JUNE 30,
                                                         -----------------------       -----------------------
                                                           2002           2001           2002           2001
                                                         --------       --------       --------       --------
<S>                                                      <C>            <C>            <C>            <C>
Revenue:
  License .........................................      $    273       $  1,330       $    973       $  3,584
  Service .........................................           865          1,347          1,564          2,708
                                                         --------       --------       --------       --------
    Total revenue .................................         1,138          2,677          2,537          6,292
                                                         --------       --------       --------       --------
Cost of revenue:
  Amortization of capitalized software ............            --          3,031             --          3,454
  License and service cost of revenue .............           434            727            681          2,518
                                                         --------       --------       --------       --------
    Total cost of revenue .........................           434          3,758            681          5,972
                                                         --------       --------       --------       --------
      Gross profit (loss) .........................           704         (1,081)         1,856            320
                                                         --------       --------       --------       --------
Operating expenses:
  Sales and marketing .............................           255          4,605            543          9,191
  Research and development ........................           496          1,754          1,024          3,703
  General and administrative ......................           252          1,488            677          2,975
  Amortization of stock-based compensation(1) .....            79           (375)            83           (171)
  Amortization of goodwill ........................            --            213             --            320
  Impairment loss -- goodwill .....................            --          1,430             --          1,430
  Restructuring expense ...........................            (9)           217             (9)           217
  Loss on lease termination .......................            --          2,824             --          2,824
  Impairment loss -- equipment held for sale ......            --            550             --            550
                                                         --------       --------       --------       --------
    Total operating expenses ......................         1,073         12,706          2,318         21,039
                                                         --------       --------       --------       --------
Operating loss ....................................          (369)       (13,787)          (462)       (20,719)
Interest expense ..................................          (125)            --           (146)            --
Other income and expense, net .....................             5             13             --             99
                                                         --------       --------       --------       --------
Net loss before income taxes and
    extraordinary item ............................          (489)       (13,774)          (608)       (20,620)
Extraordinary gain on extinguishment of debt ......            50             --          1,361             --
Benefit (provision) for income taxes ..............             7            (28)            --            (28)
                                                         --------       --------       --------       --------
    Net income (loss) .............................      $   (432)      $(13,802)      $    753       $(20,648)
                                                         ========       ========       ========       ========

Basic net loss per share:
  Net loss before extraordinary gain on
    extinguishment of debt ........................      $  (0.01)      $  (0.76)      $  (0.02)      $  (0.38)
  Extraordinary item -- gain on
    extinguishment of debt, net of taxes ..........            --             --           0.04             --
                                                         --------       --------       --------       --------
  Net income (loss) ...............................      $  (0.01)      $  (0.76)      $   0.02       $  (1.13)
                                                         ========       ========       ========       ========

Weighted average shares used to compute net
    income (loss) per share:
  Basic and diluted ...............................        33,111         18,258         33,109         18,205
</TABLE>

-----------------
(1) - The allocation of the amortization of stock-based compensation relates to
    the expense categories as set forth below (in thousands, unaudited):

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                 JUNE 30,                      JUNE 30,
                                                         -----------------------       -----------------------
                                                           2002           2001           2002           2001
                                                         --------       --------       --------       --------
<S>                                                      <C>            <C>            <C>            <C>
Cost of revenue ...................................      $     --       $     (1)      $      1       $      1
Sales and marketing ...............................             1           (208)             2           (157)
Research and development ..........................             1             (9)             3             44
General and administrative ........................            77           (157)            77            (59)
                                                         --------       --------       --------       --------
                                                         $     79       $   (375)      $     83       $   (171)
                                                         ========       ========       ========       ========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.



                                       4
<PAGE>

                                   VIADOR INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (IN THOUSANDS, UNAUDITED)

<TABLE>
<CAPTION>
                                                                           SIX MONTHS ENDED
                                                                                JUNE 30,
                                                                        -----------------------
                                                                          2002           2001
                                                                        --------       --------
<S>                                                                     <C>            <C>
Cash flows from operating activities:
Net income (loss) ................................................      $    753       $(20,648)
Adjustments to reconcile net loss to net cash used in
   operating activities:
  Depreciation and amortization ..................................           273            958
  Amortization of capitalized software ...........................            --          3,454
  Amortization of goodwill .......................................            --            320
  Amortization of deferred stock-based compensation ..............            83           (171)
  Amortization of deferred stock-based charges ...................            75            123
  Extraordinary gain on extinguishment of debt ...................        (1,361)            --
  Non-cash interest expense ......................................           146             --
  Loss on lease termination ......................................            --          2,824
  Impairment loss -- goodwill ....................................            --          1,430
  Impairment loss -- equipment held for sale .....................            --            550
  Allowance for uncollectible notes receivable from
    stockholder ..................................................            --            123
  Changes in operating assets and liabilities:
    Accounts receivable ..........................................           415          3,683
    Other current assets and other assets ........................            57          1,576
    Accounts payable, accrued liabilities and accrued
      vacation and bonus .........................................          (322)        (2,574)
    Accrued restructuring expenses ...............................           (23)          (548)
    Deferred revenue .............................................          (138)          (901)
                                                                        --------       --------
      Net cash used in operating activities ......................           (42)        (9,801)
                                                                        --------       --------

Cash flows from investing activities:
  Capital expenditures ...........................................            --            (13)
  Proceeds from sale of equipment ................................            17             --
  Capitalization of software development costs ...................            --           (198)
                                                                        --------       --------
      Net cash provided by (used in) investing activities ........            17           (211)
                                                                        --------       --------

Cash flows from financing activities:
  Repayment of bank line of credit ...............................            --         (5,000)
  Repayment of note payable from business acquisition ............            --         (1,000)
  Proceeds from issuance of convertible note payable and
    warrants, net of issuance costs ..............................           940             --
  Proceeds from issuance of common stock .........................            --              5
                                                                        --------       --------
      Net cash provided by (used in) financing activities ........           940         (5,995)
                                                                        --------       --------

Effect of exchange rate on cash and cash equivalents .............            16             99
                                                                        --------       --------
Net increase (decrease) in cash and cash equivalents .............           931        (15,908)
Cash and cash equivalents, beginning of period ...................           518         15,955
                                                                        --------       --------
Cash and cash equivalents, end of period .........................      $  1,449       $     47
                                                                        ========       ========

Supplemental disclosure of cash flow information:
  Cash paid for interest .........................................      $     --       $    135
                                                                        ========       ========
  Cash paid for income taxes .....................................      $     14       $     31
                                                                        ========       ========

Supplemental disclosure of non-cash financing activities:
  Value of beneficial conversion feature on convertible note
    payable ......................................................      $    628       $     --
                                                                        ========       ========
  Value of warrants issued with convertible note payable .........      $    372       $     --
                                                                        ========       ========
  Issuance of stock in conjunction with settlement ...............      $    100       $     --
                                                                        ========       ========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.



                                       5
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


NOTE 1.  BASIS OF PRESENTATION

    The accompanying unaudited condensed consolidated financial statements
include the accounts of Viador Inc. and its subsidiary (referred to hereafter as
"Viador," "we," "us" or "our"), after elimination of all intercompany accounts
and transactions, and have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. The results of operations for the interim
periods presented are not necessarily indicative of the results expected for any
subsequent quarter or for the entire year ending December 31, 2002. These
condensed consolidated financial statements and the notes included herein should
be read in conjunction with Viador's audited financial statements and notes for
the year ended December 31, 2001 included in our Annual Report on Form 10-K/A
for the fiscal year ended December 31, 2001.

    The condensed consolidated financial statements have been prepared on a
going concern basis, which contemplates, among other things, the realization of
assets and the satisfaction of liabilities in the normal course of business. Our
recurring net losses, including $24.5 million for the year ended December 31,
2001, raise substantial doubt regarding our ability to continue as a going
concern. In 2001, our revenue was not sufficient to support our operations, and
revenue will not be sufficient to support operations until such time, if any,
that Viador's enterprise information portal software gains substantial market
acceptance. Viador expects to continue to use cash in operations and incur
operating losses in the foreseeable future, and may need to obtain additional
funding to sustain our operations in 2002. We obtained debt/equity financing of
$1.0 million in the first quarter of 2002, as well as a commitment for
additional debt financing of up to $2.0 million, subject to our meeting certain
financial and business conditions (see Note 3). We believe that these actions
will allow Viador to continue as a going concern for the next twelve months.
However, the consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
the amount and classification of liabilities or any other adjustments that might
be necessary should Viador be unable to continue as a going concern.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  (a) Use of Estimates

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of expenses during the
reporting period. Actual results could differ from those estimates.

  (b) Revenue Recognition

    Viador licenses its software products to end user customers, original
equipment manufacturers, or OEMs, and value added resellers, or VARs. Software
license revenue from sales to end users is generally recognized upon receipt of
a signed contract or purchase order and delivery of the software, provided the
related fee is fixed and determinable, collectibility of the fee is probable and
vendor-specific objective evidence of fair value for all undelivered elements
has been established. Vendor-specific objective evidence of fair value for
consulting services is based on the price charged when those services are sold
separately. We establish sufficient vendor-specific objective evidence of the
fair value of post-contract customer support based on the contractually
specified annual renewal rates for such services. License revenue is recorded
under the residual method described in SOP 98-9 "Modification of SOP 97-2,
Software Revenue Recognition, With Respect to Certain Transactions" for
arrangements in which licenses are sold with consulting services, post-contract
customer support or both. However, the entire fee related to arrangements that
require us to deliver specified additional features or upgrades is deferred
until delivery of the feature and/or upgrade has occurred, unless we have
sufficient vendor-specific objective evidence of fair value to allocate revenue
to the various elements in these arrangements. Fees related to arrangements that
require Viador to deliver unspecified additional products are deferred and
recognized ratably over the term of the arrangement beginning with the delivery
of the first product. All of the contract software revenue related to



                                       6
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


arrangements involving consulting services that are essential to the
functionality of the software at the customer site is deferred and recognized as
the services are performed.

    Software revenue related to arrangements to maintain the compatibility of
our software products with the software products or platforms of the customer or
other vendor is recognized ratably over the term of the arrangement. License
revenue from OEM arrangements in which Viador earns a royalty based on a
specified percentage of OEM sales to end users incorporating our software is
recognized upon delivery by the OEM to the end user provided collection is
probable.

    Service revenue consists of fees from professional services including
integration of software, application development, training and software
installation. Viador bills professional services fees on a time and materials
basis. We recognize professional services fees as the services are performed.

    Customers typically purchase post-contract customer support agreements
annually, which are priced based on a fixed percentage of the product license
fee. Viador recognizes revenue allocated to post-contract customer support
agreements ratably over the term of the arrangement, which are typically one
year.

    Cost of license revenue includes royalties due to third parties for
integrated technology, the cost of manuals and product documentation, production
media used to deliver our products and shipping costs, including the costs
associated with the electronic transmission of software to new customers,
amortization of capitalized software development costs, and an allocation of our
facilities, communications and depreciation expenses.

    Cost of service revenue includes salaries and related expenses for providing
consulting services, customer support, implementation and training services
organizations, and costs of contracting with third parties that provide services
to customers.

  (c) Financial Instruments and Concentration of Credit Risk

    The carrying value of our financial instruments, including cash equivalents,
accounts receivable and payable and notes payable approximates fair market
value. Financial instruments that potentially subject Viador to concentrations
of credit risk consist primarily of cash equivalents, trade accounts receivable
and convertible notes payable (see Note 3).

    Viador sells its products and services to customers in diversified
industries. Credit risk is concentrated in North America, Europe and Asia. We
perform ongoing credit evaluations of our customers' financial condition and,
generally, require no collateral from our customers. We maintain reserves to
provide for estimated credit losses. Actual credit losses could differ from such
estimates.

  (d) Software Development Costs

    Viador accounts for its software development expenses in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for the
Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed." This
statement requires that, once technological feasibility of a new product
enhancement has been established, all subsequent costs incurred in developing
that product or enhancement to a commercially acceptable level be capitalized
and amortized. Viador uses a detailed program design approach in determining
technological feasibility. All software costs are amortized as a cost of revenue
either on a straight-line basis, or on the basis of each product's projected
revenue, whichever results in greater amortization, over the remaining estimated
economic life of product, which is generally estimated to be two years. In the
quarter ended June 30, 2001, the remaining balance of previously capitalized
software development costs was fully amortized as projection of any future
revenue from underlying product sales was deemed to be uncertain for purposes of
evaluating recoverability, resulting in amortization of software development
costs, classified as cost of sales, of approximately $3.0 million for the three
months ended June 30, 2001 and $3.5 million for the six months ended June 30,
2001. Consequently, net capitalized software development costs amounted to zero
as of June 30, 2002.



                                       7
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


  (e) Stock-Based Compensation

    Viador applies the intrinsic value-based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees," in accounting for its employee stock option plan. As such,
compensation expense would be recorded on the date of grant only if the market
price of the underlying stock on the date of grant exceeded the exercise price.
In April 2000, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 44 ("FIN No. 44"), "Accounting for Certain Transactions
Involving Stock Compensation: An Interpretation of APB No. 25." Viador has
adopted the provisions of FIN No. 44, and such adoption did not materially
impact our consolidated financial position or results of operations. SFAS No.
123, "Accounting for Stock-Based Compensation," established accounting and
disclosure requirements using a fair value-based method of accounting for
stock-based employee compensation plans. As allowed by SFAS No. 123, we have
elected to continue to apply the intrinsic value-based method of accounting
described above, and have adopted the disclosure requirements of SFAS No. 123.

  (f) Comprehensive Income (Loss)

    SFAS No. 130, "Reporting Comprehensive Income," establishes standards for
the reporting and display of comprehensive income and its components in the
financial statements. Items of comprehensive income (loss) that Viador currently
reports relate to foreign currency translation adjustments.

    The components of comprehensive loss, net of tax, for the three and six
months ended June 30, 2002 and 2001 were as follows (in thousands):

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED             SIX MONTHS ENDED
                                                               JUNE 30,                     JUNE 30,
                                                       -----------------------       ----------------------
                                                         2002           2001           2002          2001
                                                       --------       --------       --------      --------
<S>                                                    <C>            <C>            <C>           <C>
Net income (loss) ...............................      $   (432)      $(13,802)      $    753      $(20,648)
Other comprehensive income (loss):
  Foreign currency translation adjustments ......             8             71             16            99
                                                       --------       --------       --------      --------
    Total comprehensive income (loss) ...........      $   (424)      $(13,731)      $    769      $(20,549)
                                                       ========       ========       ========      ========
</TABLE>

  (g)  Goodwill and Other Intangible Assets

    In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which supersedes APB Opinion No. 17, "Intangible Assets." SFAS No. 142
requires that goodwill and other intangibles with an indefinite useful life not
be amortized, but be tested for impairment at least annually by applying a
fair-value-based test. Also, if the benefit of an intangible asset is obtained
through contractual or other legal rights, or if the intangible asset can be
sold, transferred, licensed, rented or exchanged, the intangible asset should be
separately recognized and amortized over its estimated useful life. Viador
adopted SFAS No. 142 in the quarter ended March 31, 2002. The adoption of SFAS
No. 142 did not have a material effect on our consolidated financial position or
results of operations. We had no goodwill and no significant other intangible
assets as of June 30, 2002 or December 31, 2001.

    On January 20, 2000, Viador acquired a distributor in Switzerland, the
purchase price allocation of which resulted in $2.1 million in goodwill. In the
three months ended June 30, 2001, the remaining unamortized portion of this
goodwill was deemed impaired as actual revenue for the acquired company was
below projected revenue, and key management personnel terminated employment with
the subsidiary located in Switzerland, resulting in the recognition of
approximately $1.4 million in impairment losses in the period ended June 30,
2001. Amortization expense related to goodwill was approximately $213,000 for
the three months ended June 30, 2001 and $320,000 for the six months ended June
30, 2001.



                                       8
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


    The following table presents the impact of SFAS No. 142 on net income (loss)
per share if the standard been in effect since the first quarter of 2001 (in
thousands, except per-share amounts):

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED             SIX MONTHS ENDED
                                                           JUNE 30,                     JUNE 30,
                                                   -----------------------       ----------------------
                                                     2002           2001           2002          2001
                                                   --------       --------       --------      --------
<S>                                                <C>            <C>            <C>           <C>
Reported net income (loss) ..................      $   (432)      $(13,802)      $    753      $(20,648)
Adjustments:
  Amortization of goodwill ..................            --            213             --           320
  Impairment loss -- goodwill ...............            --           (320)            --          (320)
                                                   --------       --------       --------      --------
Adjusted net income (loss) ..................      $   (432)      $(13,909)      $    753      $(20,648)
                                                   ========       ========       ========      ========

Reported net income (loss) per share --
    basic and diluted .......................      $  (0.01)      $  (0.76)      $   0.02      $  (1.13)
                                                   ========       ========       ========      ========

Adjusted net income (loss) per share --
    basic and diluted .......................      $  (0.01)      $  (0.76)      $   0.02      $  (1.13)
                                                   ========       ========       ========      ========
</TABLE>

  (h) Impairment of Long-Lived Assets

     In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 serves to clarify and
further define the provisions of SFAS No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of." SFAS No. 144
does not apply to goodwill and other intangible assets that are not amortized.
Viador adopted SFAS No. 144 effective January 1, 2002. The adoption of Statement
144 did not have a material effect on our consolidated financial position or
results of operations.

  (i) Recent Accounting Pronouncements

    In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 requires that the fair value of an asset
retirement obligation be recorded as a liability in the period in which it is
incurred. SFAS No. 143 is effective for fiscal years beginning after June 15,
2002. Viador expects to adopt SFAS No. 143 effective January 1, 2003. The
adoption of Statement 143 is not expected to have a material effect on our
consolidated financial position or results of operations.

    In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." SFAS No. 145 rescinds SFAS No. 4, which required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect. As a result, the
criteria in APB Opinion No. 30 will now be used to classify those gains and
losses. SFAS No. 64 amended SFAS No. 4, and is no longer necessary because SFAS
No. 4 has been rescinded. SFAS No. 44 was issued to establish accounting
requirements for the effects of transition to the provisions of the Motor
Carrier Act of 1980. Because the transition has been completed, SFAS No. 44 is
no longer necessary. SFAS No. 145 amends SFAS No. 13 to require that certain
lease modifications that have economic effects similar to sale-leaseback
transactions be accounted for in the same manner as sale-leaseback transactions.

    The provisions of this Statement related to the rescission of SFAS No. 4
will be applied in fiscal years beginning after May 15, 2002. Any gain or loss
on extinguishment of debt that was classified as an extraordinary item in prior
periods presented that does not meet the criteria in APB Opinion No. 30 for
classification as an extraordinary item will be reclassified. Early application
of the provisions of this Statement related to the rescission of SFAS No. 4 is
encouraged. Viador expects to adopt this provision of SFAS No. 145 effective
with its fiscal year beginning January 1, 2003, at which time it expects to
reclassify its gain associated with extinguishment of debt out of extraordinary
items into other income and expense.



                                       9
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


    Certain other provisions of this Statement related to SFAS No. 13 are
effective for transactions occurring after May 15, 2002. All other provisions of
this Statement are effective for financial statements issued on or after May 15,
2002. Viador does not anticipate the remaining provisions of this statement will
have a material effect on its consolidated financial position or results of
operations.

    In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which nullifies Emerging Issues Task Force
(EITF) Issue No. 94-3 Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred and states that an entity's commitment to an exit plan, by itself, does
not create a present obligation that meets the definition of a liability. SFAS
No. 146 also establishes that fair value is the objective for initial
measurement of the liability.

    The provisions of SFAS No. 146 are effective for exit or disposal activities
initiated after December 31, 2002. Viador does not expect the adoption of SFAS
No. 146 to have a material effect on its consolidated financial position or
results of operations.

  (j) Reclassifications

    Certain prior period balances have been reclassified to conform to the
current period presentations.

NOTE 3.  NOTE PAYABLE

    On March 18, 2002, Viador received $1.0 million in financing through a
private offering of debt securities and a conditional commitment to provide
additional debt financing of up to $2.0 million upon request from Mr. Heungyeung
Yeung, who currently holds certain of Viador's equity securities. Mr. Yeung's
conditional commitment to provide $2.0 million in additional debt financing is
conditioned upon none of the following events ("default events") having
occurred: 1) a material adverse event affecting Viador's business, operations,
properties, financial condition, or prospects which would materially impair
Viador's ability to perform its obligations under the agreement and any of the
notes and warrants issued in connection with this financing; 2) the closing of a
debt or equity financing or other financial arrangement by Viador involving
proceeds to it of $1.0 million or more from investors not related to Mr. Yeung
that would result in such investors holding twenty-five percent (25%) or more of
Viador's outstanding securities; 3) any material change in Viador's management
team, and 4) any transaction that would result in a change in voting control of
Viador. Mr. Yeung has discretion in determining whether Viador meets the
foregoing conditions and ultimately whether to provide any additional financing.
The $1.0 million obligation is secured by the accounts receivable of Viador. The
note is callable if any of the following conditions occur: 1) Viador fails to
makes any payment when due, 2) the breach of any condition of the note and
subsequent failure to cure within twenty (20) days following notice of such
default, 3) any transaction that would result in a change in voting control of
Viador, and 4) the filing of a petition by or against Viador under any provision
of applicable bankruptcy or similar law relating to insolvency, or appointment
of a receiver, trustee, custodian, or liquidator of or for all or any
substantial part of the assets or property of Viador, or the making of a general
assignment for the benefit of creditors by Viador.

    As consideration for the funds and the conditional commitment to provide
additional funds, Viador issued a convertible promissory note and two warrants
to Mr. Yeung. The note has a principal amount of $1.0 million and is convertible
into 16,711,230 shares of Viador's common stock. The note accrues interest at a
stated rate of 1% per year and matures on March 18, 2004.

    One of the warrants is exercisable in whole or in part, at any time or from
time to time, for 3,333,333 shares of Viador's common stock at an exercise price
of $0.06 per share. The second warrant is exercisable for an aggregate of
3,333,333 shares of Viador's common stock at an exercise price of $0.06 per
share, but is subject to vesting, such that 25% of the warrant becomes
exercisable every six months and is entirely exercisable on March 18, 2004, two
years after the issuance date. The second warrant ceases to vest in the event
Mr. Yeung fails to fulfill his commitment to provide additional funding.
However, if Mr. Yeung's failure to provide additional funding is due to



                                       10
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


Viador's failure to meet any of the conditions above, the second warrant becomes
fully exercisable. Both warrants expire on March 18, 2005.

    We calculated the fair value of the warrants using the Black-Scholes option
pricing model and the following assumptions: no dividends; contractual life of 3
years; risk-free interest rate of 3.1%; and expected volatility of 187%, which
resulted in a value of the warrants of approximately $372,000. Of the $1.0
million gross proceeds, we allocated $372,000 to the warrants and $628,000, the
remaining proceeds, to the beneficial conversion feature. Accordingly, we
recorded the beneficial conversion feature of the convertible note of $628,000
and the $372,000 of warrants to additional paid-in capital and initially
recorded the carrying value of the note at zero. The carrying value of the note
is being accreted to its face value of $1.0 million over the term of the note
(24 months) using the straight-line interest method, resulting in a non-cash
interest charge of $125,000 during the second quarter of 2002 and $146,000 for
the first six months of 2002. In connection with this financing, we incurred a
commission payable to Mr. Yeung in the amount of $60,000, which was recorded as
an offset to the proceeds from this arrangement. As of June 30, 2002 the
carrying amount of the note payable of $146,000 was net of the unamortized
discount of $854,000.

    Each time Viador receives additional funding from Mr. Yeung, we are
obligated to issue to Mr. Yeung a convertible promissory note with a principal
amount equal to the amount of such additional funding. Interest on any such note
will accrue at a rate equal to the sum of (a) the prime rate in effect on loans
made by Citibank, N.A. as of the date of such note, plus (b) three percent (3%).
Any such note will be convertible into either shares of common stock or any
equity securities Viador issues to a third party or third parties in one or more
bona fide, arms-length transactions for the purpose of raising capital during
the term of such note. If the note is converted into Viador's common stock, the
note will be convertible into a number of shares of common stock equal to the
total principal and interest amount outstanding on the note at the time of
conversion divided by $0.05984. If the note is converted into another class of
equity securities issued in an equity financing, the note will be convertible
into a number of shares of such equity securities equal to the total principal
and interest amount outstanding on the note at the time of conversion divided by
the price per share or unit at which such equity securities are sold to third
party investors.

    None of the notes or warrants issued or issuable to Mr. Yeung are
convertible or exercisable if the conversion or exercise of any such note or
warrant would result in Mr. Yeung or his affiliates holding more than 49.9% of
Viador's issued and outstanding voting stock.

NOTE 4.  NET INCOME (LOSS) PER SHARE

    Basic net income (loss) per share is computed using the weighted-average
number of outstanding shares of common stock excluding weighted-average shares
of restricted stock subject to repurchase. Diluted net income (loss) per share
is computed using the weighted-average number of shares of common stock
outstanding used in the basic earnings per share calculation including, when
dilutive, potential common shares from outstanding stock options and warrants to
purchase common stock computed using the treasury stock method, and convertible
securities using the "as if converted" method. The potential common shares
associated with shares issuable under stock options, warrants and convertible
notes (see Note 5) have been excluded from the computation of diluted net income
(loss) per share for all periods presented because the effect would have been
antidilutive. Potential common shares of approximately 3,889,000 for the three
months ended June 30, 2002 and 3,954,000 for the six months ended June 30, 2002
have been excluded from the diluted loss per share calculation due to their
antidilutive effect. Potential common shares of approximately 5,333,000 for both
the three and six months ended June 30, 2001 have been excluded from the diluted
loss per share calculation due to their antidilutive effect.



                                       11
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


    In accordance with SFAS No. 128, "Earnings per Share," the "control number"
in determining whether those potential common shares are dilutive or
antidilutive is income (loss) from continuing operations before extraordinary
items. The following is a reconciliation of shares used to compute earnings per
share (in thousands):


<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED             SIX MONTHS ENDED
                                                           JUNE 30,                     JUNE 30,
                                                   -----------------------       -----------------------
                                                     2002           2001           2002           2001
                                                   --------       --------       --------       --------
<S>                                                <C>            <C>            <C>            <C>
Weighted average shares outstanding .........        33,148         18,282         33,148         18,233
Weighted average restricted shares subject
   to repurchase ............................           (37)           (24)           (39)           (28)
                                                   --------       --------       --------       --------
Shares used to compute basic and diluted
   earnings per share .......................        33,111         18,258         33,109         18,205
                                                   ========       ========       ========       ========
</TABLE>

NOTE 5.  SHARES RESERVED FOR FUTURE ISSUANCE

    Shares of common stock reserved for future issuance is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                          JUNE 30,    DECEMBER 31,    JUNE 30,
                                                            2002          2001          2001
                                                          --------    ------------    --------
<S>                                                       <C>         <C>             <C>
Shares issuable under stock options ................         8,096         5,051         5,168
Shares available for future grant under stock
    option plans ...................................         2,787         4,174         5,717
Shares available for future issuance under the
    Employee Stock Purchase Plan ...................         1,378           715           729
Shares issuable pursuant to warrants to
    purchase common stock ..........................        10,885         4,268             5
Shares issuable pursuant to convertible note
    payable ........................................        16,711            --            --
                                                          --------      --------      --------
                                                            39,857        14,208        11,619
                                                          ========      ========      ========
</TABLE>

    In June 2002, Viador's stockholders approved an increase to the total number
of shares authorized for issuance under our 1999 Stock Incentive Plan by
10,000,000 shares to a total of 22,895,549 shares.

NOTE 6.  RESTRUCTURING EXPENSE AND IMPAIRMENT

    In December 2000, the Board of Directors approved a restructuring program
designed to streamline Viador's business and to reduce costs, which resulted in
the accrual of a restructuring expense of $693,000. During 2001, the Board of
Directors approved restructuring programs designed to further streamline
Viador's business and to reduce costs, resulting in additional restructuring
expense of $251,000. The following table depicts the activity for the
restructuring accrual through June 30, 2002 (in thousands):

<TABLE>
<CAPTION>
                                                             SEVERANCE       RENT          TOTAL
                                                             ---------      -------       -------
<S>                                                          <C>            <C>           <C>
Restructuring accrual, December 31, 2000 ...............      $   234       $   459       $   693
Additions to restructuring accrual, April 2001 .........          144            --           144
Additions to restructuring accrual, June 2001 ..........           73            --            73
Additions to restructuring accrual, September 2001 .....           10            --            10
Additions to restructuring accrual, December 2001 ......           24            --            24
Cash payments (January 2001 through December 2001) .....         (462)         (459)         (921)
Cash payments (January 2002 through June 2002) .........          (14)           --           (14)
                                                              -------       -------       -------
Reverse restructuring accrual, June 2002 ...............           (9)           --            (9)
                                                              -------       -------       -------
    Total ..............................................      $    --       $    --       $    --
                                                              =======       =======       =======
</TABLE>



                                       12
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


      In June 2001, Viador terminated its corporate lease that was scheduled to
expire in 2005 in order to reduce future operating expenses. As consideration
for early termination, Viador surrendered its restricted lease deposit of $1.0
million and a significant amount of office furniture, leasehold improvements and
other assets associated with the corporate lease (with a net book value of
approximately $1.8 million) to the landlord. In June 2001, management decided to
sell certain equipment. In connection with this decision, Viador recognized a
loss on equipment held for sale of $550,000. In June 2002, Viador reversed the
remaining accrual balance of $9,000 because the restructuring plan was complete.

NOTE 7.  EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT

    In the first quarter of 2002, Viador consummated workout agreements with
certain of its creditors, representing approximately $1.8 million of its
outstanding accounts payable, pursuant to which these creditors agreed to
released Viador from any obligation to repay any such amounts in exchange for
payment of 25% of the total debt Viador owed them as of September 30, 2001.
Viador paid the creditors that were party to the workout agreements their
respective agreed upon amounts aggregating approximately $467,000, resulting in
the recognition of an extraordinary gain on extinguishment of approximately $1.3
million.

    In the second quarter of 2002, Viador recorded an extraordinary gain on
extinguishment of debt to reflect settlement of an outstanding debt of $63,000
with a payment of $16,000. In connection with this settlement, Viador also
reversed into general and administrative expense a previously recorded accrual
of $108,000 that was no longer deemed to be necessary. Separately, in April
2002, Viador settled with a vendor for 25% of an outstanding balance of $4,000
with a payment of $1,000, which also resulted in an extraordinary gain.

    As of December 31, 2001, Viador had set aside $525,000 in restricted cash
for the purpose of settling these liabilities. As of June 30, 2002, $484,000 had
been used to settle liabilities and $41,000 had been refunded to Viador.

NOTE 8.  GEOGRAPHIC, SEGMENT AND SIGNIFICANT CUSTOMER INFORMATION

    Viador has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." SFAS No. 131 establishes standards for the
manner in which public companies report information about operating segments in
annual and interim financial statements. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. The method for determining what information to report is based on the
way management organizes the operating segments within Viador for the purposes
of making operating decisions and assessing financial performance.

    Viador's chief operating decision-maker is considered to be the chief
executive officer, or CEO. The CEO reviews financial information presented on an
entity level basis accompanied by disaggregated information about revenue by
product type for purposes of making operating decisions and assessing financial
performance. The entity level financial information is identical to the
information presented in the accompanying statements of operations. Therefore,
Viador has determined that it operates in a single operating segment: Enterprise
information portal systems.

    Significant customer information is as follows:

<TABLE>
<CAPTION>
                              PERCENTAGE OF TOTAL REVENUE                   PERCENTAGE OF
                      ---------------------------------------------         TOTAL ACCOUNTS
                       THREE MONTHS ENDED         SIX MONTHS ENDED         RECEIVABLE AS OF
                            JUNE 30,                  JUNE 30,           ---------------------
                      -------------------       -------------------      JUNE 30,     DEC. 31,
                       2002         2001         2002         2001         2002         2001
                      ------       ------       ------       ------      --------     --------
<S>                   <C>          <C>          <C>          <C>         <C>          <C>
Customer A .....        14%          23%          21%          10%          10%          15%
</TABLE>



                                       13
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


    Viador markets products mainly from operations in North America.
International sales are primarily to customers in Europe and Asia Pacific.
Revenue derived from international sales as a percentage of total revenue was 9%
for both the three and six months ended June 30, 2002, and 40% for both the
three and six months ended June 30, 2001.

    Revenue aggregating 3% of total revenue for the six months ended June 30,
2002 was generated from a customer who is also a stockholder of Viador, and
whose ownership percentage was 1% as of June 30, 2002. Revenue aggregating 5% of
total revenue for the six months ended June 30, 2001 was generated from a
customer who is also a stockholder of Viador, and whose ownership percentage was
2% as of June 30, 2001.

NOTE 9.  LITIGATION

    Claims Settled

    On May 10, 2002, attorneys for one of Viador's customers, CMS, sent a letter
to Viador reporting that CMS had filed suit against Viador in the United States
District Court for the Eastern District of Virginia, Alexandria Division.
According to the letter, the complaint alleges breach of contract and seeks
monetary damages of approximately $281,000. On July 1, 2002 Viador settled this
dispute with CMS for the sum of $35,000 in exchange for which CMS dismissed all
claims against Viador. This settlement is included in accrued liabilities as of
June 30, 2002.

    On May 16, 2002 Viador settled a dispute with a former customer, Society for
Human Resources Management, Inc. "SHRM". SHRM alleged breach of contract and was
seeking approximately $791,000 in monetary damages. The terms of the settlement
included a cash payment to SHRM in the amount of $50,000 and 526,315 shares of
Common Stock with a market value of $100,000 on the date of issuance. We had
previously accrued $100,000 related to this dispute.

    In the three months ended June 30, 2002 Viador reversed a legal accrual of
$108,000 as a result of a settlement with a vendor. This credit has been
classified as an offset to general and administrative expense in the three
months ended June 30, 2002.

    Pending Class Action Law Suit

    On November 13, 2001, Viador and certain of its current and former officers
and directors (the "Individual Defendants"), together with the underwriters of
its October 25, 1999 Initial Public Offering ("IPO"), were named as defendants
in a class action complaint alleging violations of the federal securities laws
in the United States District Court, Southern District of New York. The Court
appointed a lead plaintiff on April 15, 2002, and plaintiffs filed an Amended
Class Action Complaint on April 19, 2002. The essence of the complaint is that
defendants issued and sold Viador's common stock pursuant to the IPO without
disclosing to investors that certain underwriters of the IPO had solicited and
received excessive and undisclosed commissions from certain investors. The
complaint also alleges that the Registration Statement for the IPO failed to
disclose that the underwriters allocated Viador shares to customers in exchange
for the customers' promises to purchase additional shares in the after-market at
pre-determined prices above the offering price, thereby maintaining, distorting
and/or inflating the market price for the shares in the after-market. The action
seeks damages in an unspecified amount.

    The lawsuit is part of the "IPO Allocation Securities Litigation" pending in
the United States District Court for the Southern District of New York.
Approximately 310 companies and over 40 underwriters have been sued in actions
alleging claims nearly identical to those alleged against Viador. The cases are
being coordinated for pre-trial purposes before the Hon. Schira Scheindlin. The
IPO Allocation Securities Litigation is in its early stages. A motion to dismiss
addressing issues common to the companies and individuals who have been sued in
these actions was filed on July 15, 2002. Discovery is stayed pending the
outcome of motions to dismiss. This proceeding is at a very early stage and
Viador is unable to predict its ultimate outcome.



                                       14
<PAGE>

VIADOR INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)


    Other Pending Litigation

    On January 11, 2002, William Grinder, an individual, filed a personal injury
complaint for unspecified monetary damages in San Francisco County Superior
Court alleging causes of action for negligence and negligent hiring against
Viador and certain other named defendants. Viador is currently investigating the
allegations and cannot evaluate plaintiff's claims at this time.

    Viador is involved in lawsuits, claims, investigations and proceedings from
time to time, including those identified above, consisting of matters which
arise in the ordinary course of business. Any possible adverse outcome arising
from these matters, either individually or in the aggregate, is not expected to
have a material adverse impact on the results of operations or financial
position of Viador. However, Viador's evaluation of the likely impact of these
pending disputes could change in the future.



                                       15
<PAGE>

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


    Except for the historical financial information contained herein, the
matters discussed in this quarterly report on Form 10-Q may be considered
"forward-looking" statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as
amended. Such statements include declarations regarding the intent, beliefs or
current expectations of Viador and our management. Such forward-looking
statements are not guarantees of future performance and involve a number of
risks and uncertainties. Actual results could differ materially from those
indicated by such forward-looking statements. We undertake no obligation to
publicly release the results of any revision to these forward-looking statements
that may be made to reflect events or circumstances after the dates hereof or to
reflect the occurrence of unanticipated events. Important factors that could
cause actual results to differ materially from those in the forward-looking
statements include, but are not limited to: Viador's short operating history,
which makes it difficult to predict its future results of operations; the
dependence of Viador's revenue upon its suite of products; Viador's history of
operating losses and expected future losses, which could impede its ability to
address the risks and difficulties encountered by companies in new and rapidly
evolving markets; Viador's future operating results could fluctuate, which may
cause volatility or a decline in the price of Viador's stock.

OVERVIEW

    We develop and market Internet software that enables businesses to create
enterprise information portals for both business-to-business, or B2B, and
business-to-employee, or B2E, use. An enterprise information portal gives users
a single browser-based interface with which to quickly and easily access
information from a variety of enterprise data sources. We believe the Viador
E-Portal offers a comprehensive and integrated enterprise information portal
that is specifically designed for the World Wide Web and works with a customer's
existing hardware and software systems, without the need for additional
technology expenditures. It provides our customers with the ability to manage
and share information on a secure and cost-effective basis that can accommodate
significant increases in the number of users and amount of information. As more
users contribute increasing amounts of information to the portal, we believe our
customers are able to increase business productivity and efficiency.

    We were incorporated as Infospace Inc. in California in December 1995. In
January 1999, we changed our name to Viador Inc., and we subsequently
reincorporated in the State of Delaware. In October 1999, we raised gross
proceeds of $41.4 million through an initial public offering. Since our
inception, we have developed web-based products designed to permit our customers
to search, analyze and deliver relevant information to users within and outside
the enterprise. We delivered our first product, Web-Charts, in September 1996.
In the first quarter of 1999, we first shipped a fully integrated web-based
product suite called the Viador E-Portal, which integrated our prior product
offerings. In the fourth quarter of 1999, we introduced the Business-to-Business
E-Portal, a product and services offering that is designed to allow personalized
communication and information exchange between businesses. In the second quarter
of 2000, we introduced Viador Portlets, a technology for easily extending the
Viador E-Portal by adding tightly integrated modules for accessing additional
data sources and applications. In the fourth quarter of 2000, we introduced
Viador E-Portal Express, a portal user interface that set new standards for
performance and scalability.

    We are currently attempting to raise additional financing to fund our
operations. There can be no assurance that we will be successful in our efforts
to reduce expenses or to obtain additional financing. Failure to reduce and
control expenses, generate sufficient revenue and/or to obtain additional
financing will result in a material adverse effect on our ability to meet our
business objectives and continue as a going concern. Based on our assumptions,
which we believe are reasonable, we believe we may have sufficient cash to reach
profitability provided that we meet the revenue and expense goals contained in
our business plan.

    We delivered significantly enhanced products in the fourth quarter of 2001
as follows: In October 2001, we announced general availability of our E-Portal
6.4, a major advance that allows enterprises to rapidly deploy custom user
interfaces based on open standards and point-and-click design tools. In November
2001, we announced E-Portal 6.4 which complies with the standards for accessible
compliance with the Web Accessibility Initiative, or WAI of the World Wide Web
Consortium, or W3C.

    Historically, we have focused our selling efforts in North America and
derived a majority of our revenue from North America. However, we believe it is
important to have an international presence and we intend to continue to



                                       16
<PAGE>

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


conduct business in markets outside the United States, primarily through
distributors. We conduct business internationally through a variety of
distribution and service partners in Europe, Greece, the United Kingdom and
Canada. In Asia, we use distributors in Japan, Korea, Indonesia, China, Hong
Kong and Thailand.

RECENT EVENTS

    Debt Financing

    On March 18, 2002, we received $1.0 million in financing through a private
offering of debt securities and a conditional commitment to provide additional
debt financing of up to $2.0 million upon request from Heungyeung Yeung, an
existing stockholder. The conditional commitment to provide $2.0 million in
additional debt financing is subject to our meeting certain financial and
business conditions and obligations under the notes and warrants issued in
connection with the $1.0 million debt financing. Mr. Yeung has discretion in
determining whether Viador meets the foregoing conditions and ultimately whether
to provide any additional financing. We cannot assure you that these funds will
be available to us. For more information regarding this debt financing, see Note
3 of the Notes to Condensed Consolidated Financial Statements.

    Renegotiation with Creditors

    In the first quarter of 2002, Viador consummated workout agreements with
certain of its creditors representing approximately $1.8 million of its
outstanding accounts payable. Under the workout agreement, these creditors
agreed to release us from any obligation to repay any such amounts in exchange
for payment of 25% of the total debt we owed them as of September 30, 2001,
which aggregated approximately $467,000, resulting in the recognition of an
extraordinary gain on extinguishment of debt of $1.3 million. In the second
quarter of 2002, Viador recorded an extraordinary gain on extinguishments of
debt to reflect settlement of an outstanding debt of $63,000 with a payment of
$16,000. For more information regarding the workout agreement, see Note 7 of the
Notes to Condensed Consolidated Financial Statements.

    Claims Settled

    On May 10, 2002, attorneys for one of Viador's customers, CMS, sent a letter
to Viador reporting that CMS had filed suit against Viador in the United States
District Court for the Eastern District of Virginia, Alexandria Division.
According to the letter, the complaint alleges breach of contract and seeks
monetary damages of approximately $281,000. On July 1, 2002 Viador settled this
dispute with CMS for the sum of $35,000 in exchange for which CMS dismissed all
claims against Viador. This settlement is included in the legal accrual as of
June 30, 2002.

    On May 16, 2002 Viador settled a dispute with a former customer, Society for
Human Resources Management, Inc. "SHRM". SHRM alleged breach of contract and was
seeking approximately $791,000 in monetary damages. The terms of the settlement
included a cash payment to SHRM in the amount of $50,000 and 526,315 shares of
Common Stock with a market value of $100,000 on the date of issuance. We had
previously accrued $100,000 related to this dispute.

    Class Action Law Suit

    On November 13, 2001, Viador and certain of its current and former officers
and directors (the "Individual Defendants"), together with the underwriters of
its October 25, 1999 Initial Public Offering ("IPO"), were named as defendants
in a class action complaint alleging violations of the federal securities laws
in the United States District Court, Southern District of New York. The Court
appointed a lead plaintiff on April 15, 2002, and plaintiffs filed an Amended
Class Action Complaint on April 19, 2002. The essence of the complaint is that
defendants issued and sold Viador's common stock pursuant to the IPO without
disclosing to investors that certain underwriters of the IPO had solicited and
received excessive and undisclosed commissions from certain investors. The
complaint also alleges that the Registration Statement for the IPO failed to
disclose that the underwriters allocated Viador shares to customers in exchange
for the customers' promises to purchase additional shares in the after-market at
pre-determined prices above the offering price, thereby maintaining, distorting
and/or inflating the market price for the shares in the after-market. The action
seeks damages in an unspecified amount.



                                       17
<PAGE>

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


    The lawsuit is part of the "IPO Allocation Securities Litigation" pending in
the United States District Court for the Southern District of New York.
Approximately 310 companies and over 40 underwriters have been sued in actions
alleging claims nearly identical to those alleged against Viador. The cases are
being coordinated for pre-trial purposes before the Hon. Schira Scheindlin. The
IPO Allocation Securities Litigation is in its early stages. A motion to dismiss
addressing issues common to the companies and individuals who have been sued in
these actions was filed on July 15, 2002. Discovery is stayed pending the
outcome of motions to dismiss. This proceeding is at a very early stage and
Viador is unable to predict its ultimate outcome.

    Other Pending Litigation

    On January 11, 2002, William Grinder, an individual, filed a personal injury
complaint for unspecified monetary damages in San Francisco County Superior
Court alleging causes of action for negligence and negligent hiring against
Viador and certain other named defendants. Viador is currently investigating the
allegations and cannot evaluate plaintiff's claims at this time.

    Viador is involved in lawsuits, claims, investigations and proceedings from
time to time, including those identified above, consisting of matters which
arise in the ordinary course of business.

    NASDAQ Notice of Noncompliance and Delisting

    Effective on October 31, 2001 our securities were delisted from the National
Market tier of the Nasdaq Stock Market because of our failure to comply with the
minimum bid price, net tangible assets and stockholders' equity, market
capitalization, total assets, total revenue, and stockholder approval and audit
committee composition requirements. Our shares of common stock are now traded on
the Over-the-Counter Bulletin Board.

    We failed to file timely with the SEC this Form 10-Q due for the quarterly
period ended June 30, 2002 and, as a result, will have greater difficulty in
raising capital through public offerings of our stock.

    Effect of Economic Conditions

    In the first half of the year 2000, a significant portion of our customers
were newly funded internet-related companies that wanted to move quickly in
their buying decisions. Starting with the second half of the year 2000, our
customers have tended to be more conservative buyers and scaled down their
budgets for capital expenditures. The economic environment of 2001 exacerbated
this situation. In addition, potential customers have questioned our viability
as a company since our stock price and cash balances have decreased throughout
the years 2001 and 2000. The tragic events of September 11, 2001 had pervasive
negative effects across our markets and generally further slowed purchasing
activity. These changes lengthened the sales cycle and reduced the overall
demand for our product. We continued to be negatively impacted by these economic
conditions in the second quarter and first six months of 2002.

    Management Changes

    On July 6, 2002, Stan Wang was appointed as Principal Financial and
Accounting Officer and Secretary. Nate Cammack resigned as Chief Financial
Officer and Secretary on July 6, 2002.

    On August 7, 2002, Teddy Kiang resigned as director of Viador, and the Board
appointed Yifeng Yang to serve as a member of the Board of Directors and fill
the vacancy resulting from Mr. Kiang's resignation.

CRITICAL ACCOUNTING POLICIES

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and contingencies at the date of the financial statements
and reported amounts of revenue and expenses during the reporting period. For
this reason, actual results could differ from those estimates. Our critical
accounting policies are as follows:



                                       18
<PAGE>

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


        -  revenue recognition;

        -  estimating allowance for doubtful accounts;

        -  assessing outcome of litigation; and

        -  impairment of long-lived and intangible assets and goodwill.

    Revenue Recognition

    Viador follows the revenue recognition principles described in Statement of
Position (SOP) 97-2, "Software Revenue Recognition," as amended by SOP 98-9. We
license our software products to end user customers, OEMs and VARs. Software
license revenue from sales to end users is generally recognized upon receipt of
a signed contract or purchase order and delivery of the software, provided the
related fee is fixed and determinable, collectibility of the fee is probable and
vendor-specific objective evidence of fair value for all undelivered elements
has been established. Vendor-specific objective evidence of the fair value for
consulting services is based on the price charged when those services are sold
separately. We establish vendor-specific objective evidence of fair value of
post-contract customer support based on contractually stipulated annual renewal
rates for those services. Accordingly, license revenue is recorded under the
residual method described in SOP 98-9 for arrangements in which licenses are
sold with consulting services, post-contract customer support or both. However,
the entire fee related to arrangements that require us to deliver specified
additional features or upgrades is deferred until delivery of the feature and/or
upgrade has occurred, unless we have sufficient vendor-specific objective
evidence of fair value to allocate revenue to the various elements in these
arrangements. Fees related to arrangements that require us to deliver
unspecified additional products are deferred and recognized ratably over the
term of the arrangement beginning with delivery of the first product. All of the
contract software revenue related to arrangements involving consulting services
that are essential to the functionality of the software is deferred and
recognized as the services are performed.

    Software revenue related to arrangements to maintain the compatibility of
our software products with the software products or platforms of the customer or
other vendor is recognized ratably over the term of the arrangement. License
revenue from OEM arrangements in which Viador earns a royalty based on a
specified percentage of OEM sales to end users incorporating our software is
recognized upon delivery by the OEM to the end user provided collection is
probable.

    Service revenue consists of fees from professional services including
integration of software, application development, training and software
installation. Viador bills professional services fees on a time and materials
basis. We recognize professional services fees as the services are performed.

    Customers typically purchase post-contract customer support agreements
annually, which are priced based on a fixed percentage of the product license
fee. Viador recognizes revenue allocated to post-contract customer support
agreements ratably over the term of the agreements, which are typically one
year.

    Failure to recognize revenue correctly could lead to material misstatement
of our financial performance, thus exposing our credibility and market
valuation.

    Estimating Allowance for Doubtful Accounts

    We perform ongoing credit evaluations of our customers' financial condition
and generally do not require collateral. We maintain allowances for potential
credit losses, and these allowances are based on estimates by management. If the
estimates of credit risk are understated, we could be exposed to significant
amounts of bad debts in excess of our provisions.

    Assessing Outcome of Litigation

    Management's current estimated liability related to certain pending
litigation is based on claims for which our management believes it is probable a
liability has been incurred and can estimate the amount or range of loss. We
have recorded the minimum estimated liability related to those claims, where
there is a range of loss. Because of the uncertainties related to both the
amount and range of loss on the remaining pending litigation, management is
unable



                                       19
<PAGE>

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


to make a reasonable estimate of the liability that could result from an
unfavorable outcome and therefore, no liability has been accrued. As additional
information becomes available, we will assess the potential liability related to
our pending litigation and revise our estimates. Such revisions in our estimates
of the potential liability could materially impact our results of operation and
financial position.

    Impairment of Long-lived and Intangible Assets

    We evaluate our long-lived assets for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. Intangibles with an indefinite useful life are tested for
impairment at least annually by applying a fair-value-based test. Recoverability
of other assets to be held and used, including assets to be disposed of other
than by sale, is measured by a comparison of the carrying amount of an asset to
future undiscounted net cash flows expected to be generated by the asset. If the
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of by sale are reported at the
lower of the carrying amount of the assets or estimated fair value less costs to
sell. A number of factors can trigger an impairment review, such as significant
underperformance relative to historical or projected future operating results,
significant changes in the manner of use of the acquired assets or the strategy
for our overall business, or significant negative industry or economic trends.
The effect of such valuation adjustments can significantly effect our financial
performance and market valuation. If we fail to identify assets that have been
impaired, we may fail to record an impairment or we may fail to record and
impairment in the proper period. If we fail to accurately estimate fair value,
any impairment loss that we record may not be accurate.

RECENT ACCOUNTING PRONOUNCEMENTS

    Accounting for Asset Retirement Obligations

    In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 requires that the fair value of an asset
retirement obligation be recorded as a liability in the period in which it is
incurred. SFAS No. 143 is effective for fiscal years beginning after June 15,
2002. Viador expects to adopt SFAS No. 143 effective January 1, 2003. We do not
believe the adoption of Statement 143 will have a material effect on our
consolidated financial position or results of operations.

    Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections

    In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." SFAS No. 145 rescinds SFAS No. 4, which required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect. As a result, the
criteria in APB Opinion No. 30 will now be used to classify those gains and
losses. SFAS No. 64 amended SFAS No. 4, and is no longer necessary because SFAS
No. 4 has been rescinded. SFAS No. 44 was issued to establish accounting
requirements for the effects of transition to the provisions of the Motor
Carrier Act of 1980. Because the transition has been completed, SFAS No. 44 is
no longer necessary. SFAS No. 145 amends SFAS No. 13 to require that certain
lease modifications that have economic effects similar to sale-leaseback
transactions be accounted for in the same manner as sale-leaseback transactions.

    The provisions of this Statement related to the rescission of SFAS No. 4
will be applied in fiscal years beginning after May 15, 2002. Any gain or loss
on extinguishment of debt that was classified as an extraordinary item in prior
periods presented that does not meet the criteria in APB Opinion No. 30 for
classification as an extraordinary item are reclassified. Early application of
the provisions of this Statement related to the rescission of SFAS No. 4 is
encouraged. Viador expects to adopt this provision of SFAS No. 145 effective
with its fiscal year beginning January 1, 2003, at which time it expects to
reclassify its gain associated with extinguishment of debt out of extraordinary
items into other income and expense.

    Certain other provisions of this Statement related to SFAS No. 13 will be
effective for transactions occurring after May 15, 2002, with early application
encouraged. All other provisions of this Statement will be effective for
financial statements issued on or after May 15, 2002, with early application
encouraged. Viador does not anticipate



                                       20
<PAGE>

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


the remaining provisions of this statement will have a material effect on its
consolidated financial position or results of operations.

    In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which nullifies Emerging Issues Task Force
(EITF) Issue No. 94-3 Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred and states that an entity's commitment to an exit plan, by itself, does
not create a present obligation that meets the definition of a liability. SFAS
No. 146 also establishes that fair value is the objective for initial
measurement of the liability.

    The provisions of SFAS No. 146 are effective for exit or disposal activities
initiated after December 31, 2002. Viador does not expect the adoption of SFAS
No. 146 to have a material effect on its consolidated financial position or
results of operations.

FLUCTUATIONS IN OPERATING RESULTS

    We expect to experience significant fluctuations in our future results of
operations due to a variety of factors, many of which are outside of our
control, including:

    -   demand for and market acceptance of our products and services, both
        domestically and internationally;

    -   introductions of new products and services or enhancements by us and our
        competitors;

    -   competitive factors that affect our pricing;

    -   the size and timing of customer orders;

    -   hiring and retention of key personnel;

    -   the mix of products and services we sell;

    -   availability and terms of additional financing;

    -   the timing and magnitude of our capital expenditures; and

    -   conditions specific to the enterprise information portal market and
        other general economic factors.

    In addition, we completed several restructurings of our business during
2001, resulting in significant cost reductions from prior periods. Consequently,
we believe that period-to-period comparisons of our operating results are not
necessarily meaningful and that those comparisons cannot be relied upon as
indicators of future performance. For more information regarding restructurings,
see Note 6 of Notes to Condensed Consolidated Financial Statements.

    For the three months ended June 30, we had net loss of $432,000 in 2002 and
a net loss of $13.8 million in 2001. For the six months ended June 30, we had
net income of $753,000 million in 2002 and a net loss of $20.6 million in 2001.
For the years ended December 31, we had net losses of approximately $24.5
million in 2001, $29.3 million in 2000, and $13.3 million in 1999. As of June
30, 2002, our accumulated deficit is $76.0 million.



                                       21
<PAGE>

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


RESULTS OF OPERATIONS

    We manage and evaluate the performance of our business through a single
operating segment: Enterprise information portals. The following table sets
forth certain statement of operations data as a percentage of total revenue for
the periods indicated:

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED           SIX MONTHS ENDED
                                                               JUNE 30,                   JUNE 30,
                                                        --------------------        --------------------
                                                         2002          2001          2002          2001
                                                        ------        ------        ------        ------
<S>                                                     <C>           <C>           <C>           <C>
Revenue:
  License ........................................          24%           50%           38%           57%
  Service ........................................          76            50            62            43
                                                        ------        ------        ------        ------
    Total revenue ................................         100           100           100           100
                                                        ------        ------        ------        ------
Cost of revenue:
  Amortization of capitalized software ...........          --           113            --            55
  License and service cost of revenue ............          38            27            27            40
                                                        ------        ------        ------        ------
    Total cost of revenue ........................          38           140            27            95
                                                        ------        ------        ------        ------
      Gross profit (loss) ........................          62           (40)           73             5
                                                        ------        ------        ------        ------
Operating expenses:
  Sales and marketing ............................          22           172            22           146
  Research and development .......................          44            66            40            59
  General and administrative .....................          22            56            26            47
  Amortization of stock-based compensation .......           7           (14)            3            (3)
  Amortization of goodwill .......................          --             8            --             5
  Impairment loss -- goodwill ....................          --            53            --            23
  Restructuring expense ..........................          (1)            8            --             3
  Loss on lease termination ......................          --           105            --            45
  Impairment loss -- equipment held for sale .....          --            21            --             9
                                                        ------        ------        ------        ------
    Total operating expenses .....................          94           475            91           334
                                                        ------        ------        ------        ------
Operating loss ...................................         (32)         (515)          (18)         (329)
Non-cash interest expense ........................         (11)           --            (6)           --
Other income and expense, net ....................          --            --            --             2
                                                        ------        ------        ------        ------
Net loss before income taxes and
    extraordinary item ...........................         (43)         (515)          (24)         (327)
Extraordinary gain on extinguishment of debt .....           4            --            54            --
Provision for income taxes .......................          --            (1)           --            (1)
                                                        ------        ------        ------        ------
    Net income (loss) ............................         (39)%        (516)%          30%         (328)%
                                                        ======        ======        ======        ======
</TABLE>


THREE AND SIX MONTHS ENDED JUNE 30, 2002 AS COMPARED TO THREE AND SIX MONTHS
ENDED JUNE 30, 2001

REVENUE

    Viador follows the revenue recognition principles described in Statement of
Position (SOP) 97-2, "Software Revenue Recognition," as amended by SOP 98-9. For
more information on our revenue recognition policy, refer to "Critical
Accounting Policies -- Revenue Recognition."

    Total Revenue. Total revenue decreased by 57% to approximately $1.1 million
for the three months ended June 30, 2002 from approximately $2.7 million for the
three months ended June 30, 2001. Total revenue decreased by 60% to
approximately $2.5 million for the six months ended June 30, 2002 from
approximately $6.3 million for the six months ended June 30, 2001. For the three
and six months ended June 30, 2002, license revenue accounted for 24% and 38%,
respectively, of total revenue and service revenue accounted for 76% and 62%,
respectively, of total revenue. The decrease in total revenue in the three and
six months ended June 30, 2002 compared to the same periods of 2001 was
primarily due to reductions in license revenue resulting from decreased demand
for our products and also, a reduction in service revenue associated with
reduced demand for our consulting services. The percentage shift toward service
revenue is due to lower new customer license revenue caused both by the
generally



                                       22
<PAGE>

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


poor economic climate and our financial condition versus the continuing demand
from existing customers for customization of their licensed portal products.

    License Revenue. License revenue decreased by 79% to approximately $273,000
for the three months ended June 30, 2002 from approximately $1.3 million for the
three months ended June 30, 2001. License revenue decreased by 73% to
approximately $1.0 million for the six months ended June 30, 2002 from
approximately $3.6 million for the six months ended June 30, 2001. The decrease
in license revenue is due primarily to a reduction in software purchases
attributable to general adverse economic conditions and customer concerns
regarding our viability.

    Service Revenue. Service revenue decreased by 36% to approximately $865,000
for the three months ended June 30, 2002 from approximately $1.3 million for the
three months ended June 30, 2001. Service revenue decreased by 42% to
approximately $1.6 million for the six months ended June 30, 2002 from
approximately $2.7 million for the six months ended June 30, 2001. The decrease
in service revenue is primarily due to a decrease in consulting services
provided, as well as a decrease in the number of maintenance contracts from the
same quarter in the prior year.

    Channel Mix. We distribute our products directly through a direct sales
force and indirectly through OEMs, VARs and systems integrators. Indirect
channel revenue decreased as a percent of total revenue to 24% in the second
quarter of 2002 and 36% in the first six months of 2002, from 46% in the second
quarter of 2001 and 52% in the first six months of 2001. Indirect channel
revenue decreased both as a percentage of total revenue and in absolute dollars
in the first half of 2002 compared to the same periods of the prior year because
of the adverse economic conditions. In general, the distribution of revenue
among channels will fluctuate in future periods depending on the timing of new
product releases, our ability to expand our use of OEM's and VAR's, the timing
of direct sales to large customer accounts and customer buying patterns.

    Customer Concentration. Customer orders during a particular quarter
typically vary considerably in size, from as low as several thousand dollars to
over $500,000. One customer accounted for approximately 14% of recognized
revenue for the quarter ended June 30, 2002, and 21% for the six months ended
June 30, 2002. Because of the large size of some individual customer orders
relative to total orders during a quarter, our revenue may fluctuate
significantly from one quarter to the next. If a customer who places a large
order cancels or reduces the order, or if we are unable to fulfill the order in
a timely fashion or are otherwise unable to recognize revenue for the order in
the quarter in which it is anticipated, it could result in increased volatility
in our revenue.

    Geographic Mix. International revenue (sales outside of the United States)
decreased as a percent of total revenue to 9% in both the second quarter and
first six months of 2002, from 40% in both the second quarter and first six
months of 2001. International revenue for the three and six months ended June
30, 2002 decreased in absolute dollars from the similar period in the prior year
because of dramatic reductions made to our European direct sales organization
during 2001. We plan to continue to pursue international markets by partnering
with OEMs, VARs and distributors throughout the world. International revenue may
fluctuate in future periods as a result of competition, the general demand for
Internet- and intranet-related products in international markets, and general
economic conditions of the regions. See "Risk Factors that May Affect Future
Results."

    Deferred Revenue. Deferred revenue primarily consists of the unrecognized
portion of license and service revenue received pursuant to support contracts,
consulting and prepaid license royalties. Deferred revenue was approximately
$2.5 million as of June 30, 2002 and $2.6 million as of December 31, 2001.

COST OF REVENUE

    Cost of license revenue includes royalties due to third parties for
integrated technology, the cost of manuals and product documentation, production
media used to deliver our products and shipping costs, including the costs
associated with the electronic transmission of software to new customers,
amortization of capitalized software development costs, and an allocation of our
facilities, communications and depreciation expenses. Cost of service revenue
includes salaries and related expenses for consulting services, customer
support, implementation and training services organizations, and costs of
contracting with third parties engaged to provide consulting services to
customers.



                                       23
<PAGE>

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


    Cost of revenue decreased by 88% to $434,000 for the three months ended June
30, 2002 from approximately $3.8 million for the three months ended June 30,
2001. Cost of revenue decreased to 38% of total revenue for the three months
ended June 30, 2002 from 140% for the three months ended June 30, 2001. Cost of
revenue decreased by 73% to $681,000 for the six months ended June 30, 2002 from
approximately $6.0 million for the six months ended June 30, 2001. Cost of
revenue decreased to 27% of total revenue for the six months ended June 30, 2002
from 95% for the six months ended June 30, 2001. The decrease in cost of revenue
resulted primarily from the elimination of capitalized software amortization and
the significant decline in service revenue. Amortization of capitalized software
costs was accelerated in the second quarter of 2001 as our projection of any
future revenue from underlying product sales was deemed to be uncertain for
purposes of evaluating recoverability.

    Gross profit for the three and six months ended June 30, 2002 was 62% and
73% of total revenue compared to (40%) and 5% of total revenue for the three and
six months ended June 30, 2001. This increase in gross profit is primarily due
to the elimination of capitalized software amortization costs and decreased
payroll and overhead expenses resulting from the restructurings undertaken by
management during 2001 in order to bring Viador's cost structure into alignment
with its revenue. We cannot predict if our restructuring and cost control
efforts will continue to be effective in the future because of our inability to
predict economic conditions and the competitive environment. See "Risk Factors
that May Affect Future Results."

OPERATING EXPENSES

    The majority of our operating expenses are classified into four general
categories: sales and marketing, research and development, general and
administrative, and amortization of stock-based compensation. We classify all
charges to these operating expense categories based on the nature of the
expenditures. Although each category includes expenses that are category
specific, each category also includes expenses that may be common to the other
categories, such as salaries, employee benefits, bonuses, travel and
entertainment costs, telephone expenses, rent, facilities costs and third-party
professional service fees. The sales and marketing category of operating
expenses includes sales commissions, public relations and advertising, trade
shows, marketing collateral materials and web seminars. We allocate the total
costs for overhead and facilities to each of the functional areas that use the
overhead and facilities services based on their estimated usage as measured
primarily by employee headcount. These allocated charges include facility rent
and utilities for the corporate office and depreciation expense for office
furniture and equipment.

    Viador's total operating expenses for the three months ended June 30, 2002
were approximately $1.1 million or 94% of total revenue, compared to
approximately $12.7 million or 475% of total revenue for the three months ended
June 30, 2001. Our total operating expenses for the six months ended June 30,
2002 were approximately $2.3 million or 91% of total revenue, compared to
approximately $21.0 million or 334% of total revenue for the three months ended
June 30, 2001. The decrease in operating expenses in absolute dollars for the
three and six months ended June 30, 2002 compared to the corresponding earlier
year resulted from our efforts to streamline our operations and reduce our
expenditure levels through restructuring. In connection with our restructurings
during 2001, we reduced our headcount significantly and aggressively cut other
costs, including costs associated with our office lease. While it is possible
that we will have further cost reductions in the future, no such reductions are
currently planned. See "Risk Factors that May Affect Future Results."

    Sales and Marketing

    Sales and marketing expenses consist of operating expenses associated with
Viador's sales, marketing, international and other business development efforts.
Sales and marketing expenses for the three months ended June 30, 2002 were
$255,000 or 22% of total revenue, compared to $4.6 million, or 172% of total
revenue, in the same period of the prior year. Sales and marketing expenses for
the six months ended June 30, 2002 were approximately $543,000 or 22% of total
revenue, compared to $9.2 million, or 146% of total revenue, in the same period
of the prior year. Sales and marketing expenses decreased in absolute dollars
for the three and six months ended June 30, 2002 as compared to the same periods
in 2001 primarily due to reduced salaries and related expenses resulting from
decreased staffing associated with restructurings in December 2000 and April,
June, September and December 2001. We believe that sales and marketing expenses
are likely to remain relatively constant or increase in absolute dollars in the
near term as we do not currently anticipate further cost containment measures.
However, these projections can



                                       24
<PAGE>

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


change should economic and market conditions require alternative actions. See
"Risk Factors that May Affect Future Results."

    Research and Development

    Research and development expenses consist of operating expenses associated
with software development. Research and development expense decreased by 72% to
$496,000 or 44% of total revenue in the second quarter of 2002 as compared to
$1.8 million or 66% of total revenue for the same period in 2001. Research and
development expense decreased by 72% to approximately $1.0 million or 40% of
total revenue in the first six months of 2002 as compared to $3.7 million or 59%
of total revenue for the same period in 2001. The decrease in research and
development expenses was principally due to our reduced use of outside
contractors and reduced salary-related expenses from our restructurings in
December 2000 and April, June, September and December 2001. We believe that
research and development expenses are likely to remain relatively constant or
increase slightly in absolute dollars in the near term as we do not currently
anticipate further cost containment measures. However, these projections can
change should economic and market conditions require alternative actions. See
"Risk Factors that May Affect Future Results."

    General and Administrative

    General and administrative expenses for all years presented consist
primarily of compensation and fees for professional services. General and
administrative expenses for the three months ended June 30, 2002 and 2001 were
$252,000 or 22% of total revenue in 2002, and $1.5 million or 56% of total
revenue in 2001. General and administrative expenses for the six months ended
June 30, 2002 and 2001 were approximately $677,000 or 26% of total revenue in
2002, and $3.0 million or 47% of total revenue in 2001. General and
administrative expense decreased primarily due to decreased staffing associated
with the announced restructurings in December 2000 and April, June, September
and December 2001. In addition, general and administrative expense decreased in
the second quarter of 2002 as compared to the first quarter of 2002 due to a
reversal of $108,000 in accrued litigation expense as a result of a settlement.
See Note 9 of Notes to Condensed Consolidated Financial Statements. We believe
that general and administrative expenses are likely to remain relatively
constant or increase slightly in absolute dollars in the near term as we do not
currently anticipate further cost containment measures. However, these
projections can change should economic and market conditions require alternative
actions. See "Risk Factors that May Affect Future Results."

    Amortization of Stock-based Compensation

    Amortization of stock-based compensation primarily consists of charges
incurred for employee stock options issued with exercise prices less than the
fair market value of our stock at the date of grant. Amortization of stock-based
compensation for the three months ended June 30, 2002 and 2001 was $79,000 and
($375,000), respectively. Amortization of stock-based compensation for the six
months ended June 30, 2002 and 2001 was $83,000 and ($171,000), respectively. In
the second quarter of 2001, a credit to the income statement was recorded as the
result of a reversal of accelerated compensation expense previously recognized
related to terminated employees. We amortize deferred compensation on an
accelerated method as allowed under FASB Interpretation No. 28. During the
second quarter of 2002, we incurred obligations to grant options to purchase
515,000 shares of our common stock to certain key advisors, resulting in a
$77,000 charge in our financial statements for the three months ended June 30,
2002. If our stock price increases the accounting for these stock-based awards
will impact our operating results in the periods over which these options vest.
See "Risk Factors that May Affect Future Results."

    Amortization of Goodwill and Impairment Loss - Goodwill

    Amortization of goodwill was attributable to the acquisition of a
distributor in Switzerland in January 2000 and is based on the straight-line
method over the expected period to be benefited, which was five years.
Amortization of goodwill for the three months ended June 30, 2001 was $213,000,
or 8%, of total revenue. Amortization of goodwill for the six months ended June
30, 2001 was $320,000, or 5%, of total revenue. At December 31, 2000, we
performed an impairment evaluation of goodwill. The evaluation was based on
current year activities and projected cash flows as compared to the carrying
value of goodwill. Our evaluation indicated that the December 31, 2000 balance
of $1.7 million was recoverable. At June 30, 2001, we performed a further
evaluation of goodwill to



                                       25
<PAGE>

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


determine whether it was recoverable. The evaluation was based on the current
year's activities and projected cash flows as compared to the carrying value of
goodwill. This evaluation indicated that the $1.4 million of goodwill remaining
unamortized was impaired as actual revenue for the acquired company was
significantly below projected revenue and key management personnel terminated
employment with the subsidiary located in Switzerland. Consequently, we recorded
an impairment charge for the entire remaining unamortized balance in the second
quarter of 2001.

    Restructuring Expense, Impairment Loss and Loss on Lease Termination

    In April and June 2001, we implemented Board-approved restructuring programs
to streamline our business and to reduce costs, which resulted in a
restructuring expense of approximately $217,000 for severance charges associated
with reductions in our United States workforce (55 positions in April and
approximately 10 positions later in the year). As of June 30, 2002, we reversed
the remaining accrual balance of $9,000 because the restructuring was complete
and no further expenditures are anticipated.

    In June 2001, we terminated our corporate lease with Alza Corporation, which
was scheduled to expire in 2005 in order to reduce future operating expenses. As
consideration for early termination, we surrendered our restricted lease deposit
of $1.0 million and a significant amount of our office furniture, leasehold
improvements and other assets associated with the corporate lease (with a net
book value of approximately $1.8 million) to the landlord.

    In June 2001, management decided to sell certain equipment. In connection
with this decision, we recognized a loss on equipment held for sale of
approximately $550,000 for the three and six months ended June 30, 2001.

INTEREST EXPENSE

    On March 18, 2002, Viador received $1.0 million in financing through a
private offering of debt and equity securities and a conditional commitment to
provide additional financing of up to $2.0 million upon request Mr. Yeung, a
current investor. Mr. Yeung's commitment to provide $2.0 million in additional
debt financing is subject to certain conditions relating to Viador's ability to
meet its obligations under the notes and warrants issued to Mr. Yeung and
certain business and financial conditions, including changes in equity
ownership, composition of Viador's management team and any change in control.
Mr. Yeung has discretion in determining whether Viador meets the foregoing
conditions and ultimately whether to provide any additional financing. For more
information regarding this debt financing, see Note 3 of the Notes to Condensed,
Consolidated Financial Statements.

    As consideration for the funds and the commitment to provide additional
funds, Viador issued a convertible promissory note and two warrants to Mr.
Yeung. The note has a principal amount of $1.0 million and is convertible into
16,711,230 shares of Viador's common stock. The note accrues interest at a
stated rate of 1% per year and matures on March 18, 2004.

    We calculated the fair value of the warrants using the Black-Scholes option
pricing model and the following assumptions: no dividends; contractual life of 3
years; risk-free interest rate of 3.1%; and expected volatility of 187%,
resulting in a value of the warrants of approximately $372,000. Of the $1.0
million gross proceeds, we allocated $372,000 to the warrants and $628,000, the
remaining proceeds, to the beneficial conversion feature. Accordingly, we
recorded the beneficial conversion feature of the convertible note of $628,000
and the $372,000 of warrants to additional paid-in capital and initially
recorded the carrying value of the note at zero. The carrying value of the note
is being accreted to its face value of $1.0 million over the term of the note
(24 months) using the straight-line interest method, resulting in a non-cash
interest charge of $125,000 during the second quarter of 2002 and $146,000 in
the first six months of 2002. In connection with this financing, we incurred a
commission payable to Mr. Yeung in the amount of $60,000, which was recorded as
an offset to the proceeds from this arrangement. As of June 30, 2002 the
carrying amount of the note payable of $146,000 was net of the unamortized
discount of $854,000.



                                       26
<PAGE>

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


OTHER INCOME AND EXPENSE, NET

    Other income and expense, net, decreased to an income of $4,000 for the
three months ended June 30, 2002 from income of approximately $13,000 for the
three months ended June 30, 2001. Other income and expense, net, decreased to
zero for the six months ended June 30, 2002 from income of approximately $99,000
for the six months ended June 30, 2001. This decrease was due to a reduction in
interest-bearing cash and investment balances.

EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT

    In the first quarter of 2002, we consummated workout agreements with certain
of our creditors, representing approximately $1.8 million of our outstanding
accounts payable. These creditors released us from any obligation to repay any
such amounts in exchange for payment of 25% of the total debt we owed them as of
September 30, 2001. We paid the creditors that were party to the workout
agreements their respective agreed upon amounts aggregating approximately
$467,000, resulting in the recognition of an extraordinary gain on
extinguishment of debt of $1.3 million.

    In the second quarter of 2002, Viador recorded an extraordinary gain on
extinguishments of debt to reflect settlement of an outstanding debt of $63,000
with a payment of $16,000. Separately, in April 2002, Viador settled with a
vendor for 25% of an outstanding balance of $4,000 with a payment of $1,000,
which also resulted in an extraordinary gain.

PROVISION FOR INCOME TAXES

    Provision for income taxes was $7,000 and zero for the three months and six
months ended June 30, 2002. We incurred a loss for the three and six month
periods ended June 30, 2001, and therefore, only a provision of $28,000 was
recorded during the three months ended June 30, 2001 for taxes on foreign
operations. The net deferred tax assets as of June 30, 2002 were zero, net of a
valuation allowance. Realization of Viador's net deferred tax assets depends on
Viador generating sufficient taxable income in future years in appropriate tax
jurisdictions to obtain benefit from the reversal of temporary differences and
from net operating loss and credit carryforwards.

    During the quarter ended March 31, 2002, Viador recorded income from
cancellation of indebtedness of $1.3 million that was not allowable in pre-tax
income for tax purposes. This was because the income from the discharge of
indebtedness is not included in pre-tax income for tax purposes when a company's
liabilities exceed the fair value of its assets. Viador is instead required to
reduce its current year net operating income for tax purposes by this $1.3
million income from the discharge of indebtedness, resulting in a net operating
loss for income tax purposes.

NET INCOME OR LOSS

    For the three months ended June 30, 2002 net loss was $432,000 or 39% of
total revenue compared to a net loss of $13.8 million or 516% of total revenue
for the three months ended June 30, 2001. For the six months ended June 30, 2002
net income was $753,000 or 30% of total revenue compared to a net loss was $20.6
million or 328% of total revenue for the six months ended June 30, 2001.

LIQUIDITY AND CAPITAL RESOURCES

    From our inception, we have financed our operations primarily through an
initial public offering and private equity placements totaling approximately
$63.8 million. As of June 30, 2002, we had an accumulated deficit of
approximately $76.0 million and cash and cash equivalents of approximately $1.4
million. We had a net loss of approximately $432,000 for the three months ended
June 30, 2002 and net income of approximately $753,000 for the six months ended
June 30, 2002, and we had net losses of approximately $24.5 million for the year
ended 2001, $29.3 million for the year ended 2000 and $13.3 million for the year
ended 1999. The size of our accumulated deficit, our losses since inception and
our ongoing need for capital to continue our operations raises substantial doubt
as to our ability to continue as a going concern. We expect to continue to use
cash in operations and to incur operating losses in the foreseeable future. We
obtained $1.0 million in debt financing in the first quarter of 2002, as well as
a commitment for up to $2.0 million in additional debt financing subject to our
meeting certain financial and



                                       27
<PAGE>

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


business conditions. There can be no assurance that we will be successful in our
efforts to control expenses, generate sufficient revenue or obtain additional
financing. Failure to reduce and control expenses, generate sufficient revenue
and/or to obtain additional financing will result in a material adverse effect
on our ability to meet our business objectives and continue as a going concern.
Absent debt or equity financing beyond the $2.0 million currently committed to
us, and excluding significant expenditures required for our major projects, we
currently anticipate that the cash on hand and anticipated cash flow from
operations will only be adequate to fund our operations in the ordinary course
of business for the next twelve months. For additional information, see Notes 1
and 3 of the Notes to Condensed Consolidated Financial Statements.

    As of June 30, 2002, our principal source of liquidity was $1.4 million in
cash and cash equivalents, representing a $931,000 increase from the December
31, 2001 balance of $518,000. Net cash used by operating activities for the six
months ended June 30, 2002 was approximately $42,000, while net cash used for
the six months ended June 30, 2001 was approximately $9.8 million. For the six
months ended June 30, 2002, this use of cash resulted primarily from decreases
in accounts payable and deferred revenue, offset in part by our increase in
accounts receivable. Net cash provided by investing activities for the six
months ended June 30, 2002 was approximately $17,000. Net cash used in investing
activities for the six months ended June 30, 2001 was $211,000. Net cash
provided by financing activities for the six months ended June 30, 2002 was
approximately $940,000 and resulted from the net proceeds from the issuance of a
convertible note payable and warrants. Net cash used in financing activities for
the six months ended June 30, 2001 was approximately $6.0 million, resulting
from the repayment of a bank line of credit and a note payable assumed in an
acquisition.

    Viador's principal commitments as of June 30, 2002 consisted of obligations
under noncancelable operating leases for monthly rent. We have no present
commitments or arrangements assuring us of any future equity or debt financing
other than the $2.0 million conditional commitment from Mr. Yeung, a current
investor, discussed further in Note 3 to the Notes to Condensed Consolidated
Financial Statements. This conditional commitment to provide $2.0 million in
additional debt financing is subject to Viador's ability to meet its obligations
under the notes and warrants issued, and certain business and financial
conditions, including changes in our equity ownership, composition of our
management team and any change in control. Mr. Yeung has discretion in
determining whether Viador meets the foregoing conditions and ultimately whether
to provide any additional financing. We cannot assure you that these funds will
be available to us or that any further equity or debt financing will be
available to us on favorable terms, or at all.

    We are currently attempting to raise additional financing to fund our
operations. There can be no assurance that we will be successful in our efforts
to reduce expenses or to obtain additional financing. Failure to reduce and
control expenses, generate sufficient revenue and/or to obtain additional
financing will result in a material adverse effect on our ability to meet our
business objectives and continue as a going concern. Based on our assumptions,
which we believe are reasonable, we believe we may have sufficient cash to reach
profitability provided that we meet the revenue and expense goals contained in
our business plan.

    Our liquidity and capital requirements depend on numerous factors discussed
under the section entitled "Risk Factors That May Affect Future Results."
Factors such as the ability to expand our customer base, the level of investment
in our business, the level of expenditures for marketing and sales, the level of
investment in distribution, customer service and other capabilities would also
increase our liquidity requirements. The timing and amount of these capital
requirements cannot be accurately predicted.

    Our financial statements were prepared on the assumption that we will
continue as a going concern. The report of our independent accountants for the
year ended December 31, 2001 acknowledged that we have incurred losses in each
of the last three fiscal years. These conditions raise substantial doubt as to
our ability to continue as a going concern. Our financial statements included
herein do not include any adjustments that might result should we be unable to
continue as a going concern.



                                       28
<PAGE>

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


                   RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

                             RISKS RELATED TO VIADOR

WE MAY SEEK PROTECTION, OR BE THE SUBJECT OF INVOLUNTARY PROCEEDINGS, UNDER THE
FEDERAL BANKRUPTCY CODE.

    We may seek protection under Chapter 11 of the Federal Bankruptcy Code.
Additionally, we are subject to the risk that creditors may seek to commence
involuntary bankruptcy proceedings against us. If we file for Chapter 11
protection, or if involuntary proceedings are commenced against us by our
creditors, our creditors or other parties in interest may be permitted to
propose their own plan, and we could be unsuccessful in having a plan of
reorganization confirmed that is acceptable to the requisite number of creditors
and holders entitled to vote on such a plan. This could lead to our inability to
emerge from Chapter 11. Moreover, once bankruptcy proceedings are commenced,
either by the filing of a voluntary petition or if an involuntary petition is
filed against us, our creditors could seek our liquidation. If a plan were
consummated or if we were liquidated, it would almost certainly result in our
creditors receiving less than 100% of the face value of their claims, and in the
claims of our equity holders being cancelled in whole. In addition, during any
bankruptcy or similar proceeding, we would need court approval to take any
actions out of the ordinary course of business, which would result in our
inability to manage the normal operations of the company and which would cause
us to incur additional costs associated with the bankruptcy process. Any
bankruptcy or similar proceeding will cause us to be in default on our
convertible note payable. See Note 3 of Notes to Condensed Consolidated
Financial Statements for more information on this note.

THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A "GOING CONCERN."

    The Independent Auditor's Report issued in connection with Viador's audited
financial statements included in our Form 10-K/A for the year ended December 31,
2001, expresses substantial doubt about our ability to continue as a going
concern, due to the lack of sufficient sources of revenue and our dependence on
our ability to raise capital from stockholders or other sources to sustain
operations.

    Although we reported net income of $753,000 for the first six months of
2002, our recurring net losses, including $20.6 million for the six months ended
June 30, 2001 and $24.5 million for the year ended December 31, 2001, raise
substantial doubt regarding Viador's ability to continue as a going concern. In
2001, our revenue was not sufficient to support our operations, and revenue will
not be sufficient to support operations until such time, if any, that Viador's
enterprise information portal software gains substantial market acceptance. We
expect to continue to use cash in operations and to incur operating losses in
the foreseeable future.

AS A RESULT OF QUESTIONS CONCERNING OUR STATUS AS A GOING CONCERN, OUR CUSTOMERS
AND VENDORS MAY DECIDE NOT TO DO BUSINESS WITH US.

    Due to concerns regarding our ability to continue operations, customers and
vendors may decide not to conduct business with us, or may conduct business with
us on terms that are less favorable than those customarily extended by them.
Additionally, we are currently experiencing some resistance in the marketplace
and we believe that one of the several factors for this resistance is related to
concerns regarding our ability to continue our business as a going concern. In
any event, if customers and vendors decide not to conduct business with us, our
revenue would decrease further, and our business will suffer significantly.

WE CANNOT PREDICT WHETHER WE WILL BE SUCCESSFUL BECAUSE WE HAVE A SHORT
OPERATING AND SALES HISTORY.

    We were founded in 1995, and began offering software products in the third
quarter of 1996. Our primary product, the Viador E-Portal, was first shipped in
the first quarter of 1999. We introduced Viador Portlets in the second quarter
of 2000 and Viador E-Portal Express in the fourth quarter of 2000.

    We have made significant investments in our sales and marketing programs,
personnel recruitment, product development and infrastructure and have
experienced significant losses on a quarterly and annual basis in the past. You
must consider us and our prospects in light of the risks and difficulties
encountered by companies in the early stage of development, particularly
companies in new and rapidly evolving markets. The revenue and income potential
of our business and market is unproven, and our limited operating history makes
it difficult to evaluate us and our prospects.



                                       29
<PAGE>

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


    Our ability to address these risks depends on a number of factors, which
include our ability to:

    -   provide software that is reliable, cost-effective and able to
        accommodate significant increases in the number of users and amount of
        information;

    -   market the Viador E-Portal, our other products and the Viador brand name
        effectively;

    -   continue to grow our infrastructure to accommodate new developments in
        the enterprise information portal software market and increased sales;

    -   retain and motivate qualified personnel; and

    -   respond to competition.

    We may not be successful in meeting these challenges and addressing these
risks and uncertainties. If we are unable to do so, our business will not be
successful and your investment in our capital stock will decline in value.

FAILURE TO RAISE ADDITIONAL CAPITAL WILL HAVE A MATERIAL ADVERSE EFFECT ON OUR
ABILITY TO OPERATE AS A GOING CONCERN.

    We may have insufficient capital to fund our operations and business
objectives through the next 12 months. We are actively seeking financing for our
current capital needs through the sale of additional equity and/or the issuance
of debt. However, the significant contraction in the capital markets,
particularly in the technology sector, combined with our early stage of
commercial operations has made it difficult to raise additional capital. If we
do not obtain additional cash funding, the carrying amounts of certain assets,
including property, equipment and capitalized software development costs may not
be recovered.

    Additional future equity or debt financing may not be available to us on
favorable terms or at all. Future borrowing instruments such as credit
facilities and lease agreements are also likely to contain restrictive covenants
and will likely require us to pledge assets as security for borrowings under
those future arrangements. In addition, our failure to file timely with the SEC
the Form 10-Q due for the quarterly period ended June 30, 2002 will make it more
difficult for us to raise capital through public offerings of our stock. Failure
to raise sufficient additional capital would have a material adverse effect on
our ability to operate as a going concern or to achieve our business objectives.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

OUR COST-CUTTING EFFORTS MAY HARM OUR BUSINESS.

    Our management has implemented plans designed to reduce our cash
requirements through a combination of reductions in equipment purchases and
operating expenditures, including significant reductions in our workforce during
2001. However, there can be no assurance that these plans will be successful or
that the implementation of these plans will not have a material adverse effect
on our business, financial condition or results of operations.

OUR BUSINESS CURRENTLY DEPENDS ON REVENUE RELATED TO THE VIADOR E-PORTAL, AND IT
IS UNCERTAIN WHETHER THE MARKET WILL INCREASINGLY ACCEPT THIS PRODUCT.

    We generate most of our revenue from licenses and services related to the
products comprising the Viador E-Portal. We expect that these products, and
future upgraded versions of these products, will continue to account for a large
portion of our revenue for the foreseeable future. Our future financial
performance will depend on increasing acceptance of our current products and on
the successful development, introduction and customer acceptance of new and
enhanced versions of our products. Our business could be harmed if we fail to
deliver the enhancements to our products that customers want.

    The market for enterprise information portal software is still in its
infancy as an emerging technology and there can be no assurance that customers
will adopt our products. Accordingly, we cannot accurately estimate the
potential demand for our products and services. We believe that market
acceptance of our products and services depends principally on our ability to:



                                       30
<PAGE>

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


    -   effectively market the Viador E-Portal, our other products and our
        services;

    -   retain a sufficient number of qualified sales and marketing personnel;

    -   provide high-quality and reliable customer support for our products;

    -   distribute and price our products and services in a manner that is more
        appealing to customers than that of our competitors;

    -   develop a favorable reputation among our customers, potential customers
        and participants in the software industry; and

    -   withstand downturns in general economic conditions or conditions that
        would slow corporate spending on software products.

    Some of the foregoing factors are beyond our control. If our customer base
does not expand, we may never become profitable and our stock price will likely
decline.

    Our services consist of maintenance, support, consulting and training.
Service revenue represented 62% of total revenue for the six months ended June
30, 2002 and 43% for the six months ended June 30, 2001. For the year ended
December 31, 2001, service revenue represented 49% of total revenue. We
anticipate that service revenue will fluctuate as a percentage of total revenue
in the future. If service revenue is less than anticipated, our fixed costs of
providing services will exceed our service revenue and our operating results
could be materially adversely affected.

CONTINUING UNCERTAINTY OF THE U.S. ECONOMY, WHICH HAS SPREAD TO EUROPE AND ASIA,
MAY HAVE SERIOUS IMPLICATIONS FOR THE GROWTH AND STABILITY OF OUR BUSINESS AND
MAY NEGATIVELY AFFECT OUR STOCK PRICE.

    The revenue growth and profitability of our business depends significantly
on the overall demand for software products, particularly in the product
segments in which we compete. Softening demand for these products caused by
ongoing economic uncertainty may result in decreased revenue or earnings levels
or growth rates. The U.S. economy has weakened and market conditions continue to
be challenging. This weakening has resulted in individuals and companies
delaying or reducing expenditures. Further delays or reductions in spending
could have a material adverse effect on demand for our services, and
consequently on our business, operating results, financial condition, prospects
and stock price. In addition, the terrorist acts of September 11, 2001 and
subsequent terrorist activities have created an uncertain economic environment
and we cannot predict the impact of these events, or of any related military
action, on our customers or business. We believe that these events may cause
some businesses to further curtail or eliminate spending on technology related
to our products.

WE HAVE A HISTORY OF LOSSES AND MAY NOT BE ABLE TO ACHIEVE PROFITABILITY IN THE
FUTURE.

    Since our inception, we have experienced recurring operating losses,
negative cash flows from operations and net losses in each quarterly and annual
period with the exception of the most recent quarter, in which we achieved an
insignificant operating profit. As of June 30, 2002, we had an accumulated
deficit of approximately $76.0 million. Revenue from our software and related
services may not be sufficient to make, or keep us profitable in the future. If
we do achieve profitability, we cannot be certain that we can sustain or
increase profitability on a quarterly or annual basis, particularly to the
extent that we face a weak economic environment and significant competition.

WE WERE UNABLE TO MAINTAIN OUR LISTING ON THE NASDAQ NATIONAL MARKET TIER OF THE
NASDAQ STOCK MARKET AND THERE MAY BE NO ACTIVE TRADING MARKET FOR OUR COMMON
STOCK.

     On July 3, 2001, we received a letter from Nasdaq indicating we failed to
comply with the minimum bid price required for continued listing as set forth in
marketplace rule 4450 (a) (5) and that our securities were, therefore, subject
to delisting from Nasdaq. We requested a hearing before a Nasdaq Listing
Qualifications Panel to review this determination. On August 15, 2001, Nasdaq
notified us of additional deficiencies including net tangible assets and
stockholders' equity, market capitalization, total assets, total revenue, and
audit committee composition requirements. Despite our attempts to remedy these
deficiencies, on October 30, 2001 Nasdaq notified us that our securities would
be delisted from the Nasdaq National Stock Market tier of the Nasdaq Stock
Market effective with the opening of business on October 31, 2001. The delisting
occurred on October 31, 2001 and our shares of common stock are now traded on
the Over-the-Counter Bulletin Board. Since we have been delisted from Nasdaq, we
cannot assure you that an active trading market for our common stock will
continue. If an active trading market for our



                                       31
<PAGE>

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


common stock is not sustained, you may not be able to sell your common stock
when you need to do so, or at a price acceptable to you, or even at all.

    The delisting of our stock has had a material negative impact on the trading
market and price of our stock and has subjected us to certain state regulatory
requirements. Low-priced stocks are subject to additional risks, including the
potential loss of effective trading markets.

THE TRADING PRICE FOR OUR COMMON STOCK HAS FALLEN SUBSTANTIALLY AND THIS COULD
AFFECT OUR ABILITY TO RAISE CAPITAL AND YOUR ABILITY TO RESELL YOUR SHARES AT OR
ABOVE THE PRICE YOU PAID TO PURCHASE SUCH SHARES.

    The stock market, in general, and the trading prices of shares in public
technology companies, have been extremely volatile and have experienced a
substantial drop in market price. Indeed, the trading price of our common stock
dropped significantly, thereby precipitating our delisting from Nasdaq. We
believe that this drop has resulted from many factors, some of which are beyond
our control, such as:

    -   investor perception of us and Internet-related businesses in general;

    -   general economic conditions both in the United States and in foreign
        countries;

    -   our results of operations;

    -   adverse business developments;

    -   changes in financial estimates by securities analysts; and

    -   announcements by our competitors of new products and services.

    As a result of these factors, and due to the risks related to the absence of
an active trading market for our common stock, we cannot assure you that the
trading price of our common stock will not continue to drop or stay at its
currently low price. The significant decreases in the trading price of our
common stock and the currently low trading price that we are experiencing is
likely to affect our visibility and credibility in our market and will likely
limit our ability to raise capital in the future. Additionally, as a result of
our low stock trading price and our delisting from Nasdaq, you may not be able
to resell your shares of common stock when you need to or at prices higher than
what you paid to purchase such shares.

CLASS ACTION LITIGATION DUE TO STOCK PRICE VOLATILITY COULD LEAD TO SUBSTANTIAL
COSTS AND DIVERT OUR MANAGEMENT'S ATTENTION AND RESOURCES.

    In the past, securities class action litigation often has been brought
against a company following periods of volatility in the market price of its
securities. Companies in the software industry, particularly those whose product
offerings are related to the Internet, are especially vulnerable to this kind of
litigation due to the high volatility of their stock prices. Accordingly, we
have been the target of securities litigation, such as the class action lawsuit
filed against us by The Plaintiffs' Executive Committee. Securities litigation
could result in substantial costs and could divert our management's attention
and resources from business operations. For further information regarding the
lawsuit, see Item 1, "Legal Proceedings" in Part II of this Form 10-Q.

FUTURE SALES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK PRICE.

    The market price of our common stock could decline as a result of sales of a
large number of shares of our common stock in the market, or the perception that
such sales could occur. These sales also might make it more difficult for us to
sell equity securities in the future at a time and at a price that we deem
appropriate.

OUR OPERATING RESULTS IN ONE OR MORE FUTURE PERIODS MAY FLUCTUATE SIGNIFICANTLY
AND MAY FAIL TO MEET OR EXCEED THE EXPECTATIONS OF SECURITIES ANALYSTS OR
INVESTORS, CAUSING OUR STOCK PRICE TO FALL.

    We may experience significant fluctuations in our future results of
operations due to a variety of factors, many of which are outside of our
control, including:

    -   demand for and market acceptance of our products and services, both
        domestically and internationally;

    -   introduction of products and services or enhancements by us and our
        competitors;



                                       32
<PAGE>

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


    -   competitive factors that affect our pricing;

    -   the mix of products and services we sell;

    -   the size and timing of customer orders, particularly large orders, some
        of which represent more than 10% of total revenue during a particular
        quarter;

    -   retention of key personnel;

    -   conditions specific to the enterprise information portal market and
        other general economic factors;

    -   changes in generally accepted accounting policies, especially those
        related to the recognition of software revenue; and

    -   new government legislation or regulation.

    We typically receive 50% to 70% of our orders in the last month of each
fiscal quarter because our customers often delay purchases of products until the
end of the quarter and our sales organization and our individual sales
representatives strive to meet quarterly sales targets. Because a substantial
portion of our costs are relatively fixed and based on anticipated revenue, a
failure to book an expected order in a given quarter will likely not be offset
by a corresponding reduction in costs and, therefore, could adversely affect our
operating results for that quarter. Due to these factors, we believe that
period-to-period comparisons of our operating results are not necessarily
meaningful and cannot be relied upon as indicators of future performance. In
future periods, our operating results may be below the expectations of public
market analysts and investors. In this event, the price of our common stock may
fall significantly.

BECAUSE OUR CUSTOMERS' ORDERS VARY SUBSTANTIALLY IN SIZE, OUR QUARTERLY
OPERATING RESULTS ARE DIFFICULT TO FORECAST AND MAY FLUCTUATE.

    Customer orders during a particular quarter typically vary considerably in
size, from as low as several thousand dollars to over one million dollars.
Because of the large size of some individual customer orders relative to total
orders during a quarter, our revenue may fluctuate significantly from one
quarter to the next. If a customer who places a large order cancels or reduces
the order, or if we are unable to fulfill the order in a timely fashion or are
otherwise unable to recognize revenue for the order in the quarter in which it
is anticipated, it could result in increased volatility in our revenue and stock
price.

SINCE OUR SALES CYCLE IS LONG, UNPREDICTABLE AND SUBJECT TO SEASONAL
FLUCTUATIONS, IT IS DIFFICULT TO ACCURATELY FORECAST OUR REVENUE; IF WE FAIL TO
ACHIEVE OUR FORECASTED REVENUE, OUR OPERATING RESULTS WILL SUFFER AND OUR STOCK
PRICE MAY DECLINE.

    The typical sales cycle of our products is long and unpredictable and
requires both a significant capital investment decision by our customers and the
education of potential customers regarding the use and benefits of our products.
Our sales cycle is generally between three and nine months long. A successful
sales cycle typically includes presentations to both business and technical
decision makers. The implementation of our products involves a significant
commitment of resources by prospective customers. Accordingly, a purchase
decision for a potential customer typically requires the approval of several
senior decision makers. Our sales cycle is also affected by the business
conditions of each prospective customer. Due to the relative importance of many
of our individual product sales, a lost or delayed sale could adversely affect
our quarterly operating results. Our sales cycle is also affected by seasonal
fluctuations as a result of our customers' fiscal year budgeting cycles and slow
summer purchasing patterns overseas. Also, we expect revenue to be higher in the
fourth quarter than in other quarters of the year since many customers strive to
spend unused budgeted dollars before the end of the year.

IF OUR SOFTWARE CONTAINS ERRORS, WE MAY LOSE CUSTOMERS OR EXPERIENCE REDUCED
MARKET ACCEPTANCE OF OUR PRODUCTS.

    Our software products are inherently complex and may contain defects and
errors that are detected only when the products are in use. In addition, some of
our customers may require enhanced customization of our software for their
specific needs, and these modifications may increase the likelihood of
undetected defects or errors. Further, we often render implementation,
consulting and other technical services, the performance of which typically
involves working with sophisticated software, computing and networking systems,
and we could fail to meet customer expectations as a result of any defects or
errors. As a result, we may lose customers, customers may fail to



                                       33
<PAGE>

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


implement our products more broadly within their organization and we may
experience reduced market acceptance of our products. Our products are designed
to facilitate the secure transmission of sensitive business information to
specified parties outside the business over the Internet. As a result, the
reputation of our software products for providing good security is vital to
their acceptance by customers. Our products may be vulnerable to break-ins,
theft or other improper activity that could jeopardize the security of
information for which we are responsible. Problems caused by product defects,
failure to meet project milestones for services or security breaches could
result in loss of or delay in revenue, loss of market share, failure to achieve
market acceptance, diversion of research and development resources, harm to our
reputation, increased insurance costs or increased service and warranty costs.
To address these problems, we may need to expend significant capital resources
that may not have been budgeted.

PRODUCT LIABILITY CLAIMS COULD HARM OUR BUSINESS.

    Our license agreements with customers typically contain provisions designed
to limit our exposure to potential product liability claims. All domestic and
international jurisdictions may not enforce these limitations. Although we have
not experienced any product liability claims to date, we may encounter this type
of claim in the future. Product liability claims brought against us, whether or
not successful, could divert the attention of our management and key personnel
and could be expensive to defend.

WE MAY BE UNABLE TO MAINTAIN OR GROW OUR INTERNATIONAL OPERATIONS, WHICH COULD
SLOW OR UNDERMINE OUR OVERALL GROWTH.

    Sales from outside the United States accounted for 9% of our total revenue
for the six months ended June 30, 2002 and 40% for the six months ended June 30,
2001. For the year ended December 31, 2001, we derived 19% of our total revenue
from sales outside the United States. We derive our international revenue
primarily from sales in Canada, Europe and Asia Pacific. We intend to continue
to pursue international markets by partnering with OEMs, VARs and distributors,
and anticipate that in the foreseeable future a significant portion of our
revenue may be derived from sources outside the United States. If we are unable
to maintain or grow our international operations, it could slow or undermine our
overall growth.

    We have not identified any material risk associated with doing business in
Canada, other than risk associated with foreign currency exchange rate
fluctuations. In Japan, we have an exclusive distribution relationship with
Mitsui. We also face country-specific risks in Europe and the Asia-Pacific
region, such as fluctuation in currency exchange rates, general economic
conditions in Europe and the Asia-Pacific region and regulatory uncertainties
associated with being a foreign company doing business in those geographic
areas.

    Our international operations are subject to a number of risks, including:

    -   costs of customizing our products for foreign countries;

    -   protectionist laws and business practices favoring local competition;

    -   dependence on the performance of local resellers and other strategic
        partners;

    -   adoption of general Internet technologies in each international market;

    -   compliance with multiple, conflicting and changing governmental laws and
        regulations;

    -   longer sales and payment cycles;

    -   import and export restrictions and tariffs;

    -   difficulties in staffing and managing international operations;

    -   greater difficulty or delay in accounts receivable collection;

    -   foreign currency exchange rate fluctuations;

    -   multiple and conflicting tax laws and regulations; and

    -   political and economic instability.

IF OUR PLAN TO SELL THE VIADOR E-PORTAL DIRECTLY TO CUSTOMERS IS NOT SUCCESSFUL,
WE MAY NOT BE ABLE TO GROW OUR REVENUE AND OUR STOCK PRICE MAY SUFFER.

    We sell our products primarily through our domestic direct sales
organization and we support our customers with our technical and customer
support staff in several field offices. Our ability to achieve revenue growth in
the



                                       34
<PAGE>

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


future will depend on our ability to recruit and train sufficient technical,
customer and direct sales personnel. We have in the past and may in the future
experience difficulty in recruiting qualified sales, technical and support
personnel. Our inability to rapidly and effectively expand our direct sales
force and our technical and support staff could reduce or eliminate our growth
and cause our stock price to fall.

WE DEPEND ON TECHNOLOGY LICENSED FROM THIRD PARTIES AND, IF WE DO NOT MAINTAIN
THOSE LICENSE ARRANGEMENTS, THIS COULD RESULT IN DELAYS IN SHIPPING OUR PRODUCTS
AND SERVICES, WHICH COULD HARM OUR BUSINESS.

    We license our search engine technology, which is integrated into the Viador
E-Portal, from Inktomi. This technology provides users of our products with the
ability to search and classify information. We also license JRUN, a Java servlet
engine from Macromedia, which is necessary for users to access the Viador
E-Portal. This software may not continue to be available on commercially
reasonable terms, or at all. Our loss of or inability to maintain either of
these technology licenses could result in delays in the sale of our products and
services until equivalent technology, if available, is identified, licensed and
integrated, which could harm our business.

IF WE DO NOT MANAGE THE RECENT REDUCTION IN OUR WORKFORCE, IT COULD HAVE A
MATERIAL ADVERSE EFFECT ON OUR BUSINESS.

    During the year ended December 31, 2001, we reduced our workforce by a total
of 173 people to reduce costs. At June 30, 2002, our workforce totaled 31
employees. It is possible that we will have further workforce and cost
reductions in the future.

    Any failure to manage the impact of the workforce reduction on our product
development schedules, our ability to retain remaining personnel, or our ability
to recruit new employees in the future could have a material adverse effect on
our business, operating results and financial condition.

IF WE ARE UNABLE TO MOTIVATE AND RETAIN OUR PERSONNEL, IT COULD HAVE A MATERIAL,
ADVERSE EFFECT ON OUR BUSINESS.

    Our success depends in large part on our ability to motivate and retain
highly skilled employees on a timely basis. Our workforce reductions and any
future workforce reduction could result in some disruption in our ongoing
operations and harm our efforts to motivate existing employees. Our failure to
retain highly skilled personnel may limit the rate at which we generate revenue
and develop new products or product enhancements. This could have a material
adverse effect on our business, operating results and financial condition.

LOSS OF OUR EXECUTIVE OFFICER COULD HARM OUR BUSINESS.

    Our future success depends to a significant degree on the skills, experience
and efforts of our senior management. In particular, we depend upon the
continued services of Stan X. Wang, our president and chief executive officer.
The loss of the services of Mr. Wang would harm our business and operations. In
addition, we have not obtained life insurance benefiting us on any of our
employees or entered into employment agreements with our key employees. If any
of our key employees left or was seriously injured and unable to work and we
were unable to find a qualified replacement, our business could be harmed.

IF WE DO NOT SUCCESSFULLY RECRUIT AND RETAIN SKILLED PERSONNEL FOR PERMANENT
MANAGEMENT POSITIONS, WE MAY NOT BE ABLE TO EFFECTIVELY IMPLEMENT OUR BUSINESS
OBJECTIVES.

    We have experienced significant personnel changes at the senior management
level. During 2001, Dick Warmington resigned as interim president and chief
executive officer and Alice Pilch resigned as chief financial officer. We
appointed Stan X. Wang president and chief executive officer in August 2001.
Nathan A. Cammack was appointed chief financial officer in October 2001 and
resigned in July 2002. On October 1, 2001, Don Cochrane resigned as vice
president of worldwide sales and marketing. We have not yet appointed a new vice
president of worldwide sales and marketing or chief financial officer. We cannot
predict how these changes in management will affect our business. However, if we
fail to recruit and retain qualified individuals to permanently serve in these
senior management positions, our business, financial condition and results of
operations will be seriously harmed.



                                       35
<PAGE>

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


WE MAY NOT BE ABLE TO RECRUIT AND RETAIN PERSONNEL, WHICH WOULD IMPAIR OUR
ABILITY TO SUSTAIN OPERATIONS.

    We are highly dependent on certain members of our management and engineering
staff, including, without limitation, our chief executive officer and our chief
financial officer. The loss of one or more of these officers could impede the
achievement of our business objectives. Furthermore, recruiting and retaining
qualified financial and technical personnel is critical to our success. If our
business grows, we will also need to recruit a significant number of management,
technical and other personnel for our business. Competition for employees in our
industry is intense. Our ability to attract and retain skilled and experienced
personnel may be adversely impacted by limitations on our ability to issue stock
options due to the delisting of our common stock from the Nasdaq National Market
System. For the remainder of fiscal 2002, we anticipate granting a significant
number of options to purchase our common stock to certain key employees and
advisors. We may not be able to continue to attract and retain skilled and
experienced personnel on acceptable terms, and the granting of stock options to
key advisors who are not employees will result in a charge to operating expense,
which will negatively impact our results of operations.

IF WE ARE UNABLE TO EFFECTIVELY PROTECT OUR PROPRIETARY RIGHTS, OUR COMPETITORS
MAY BE ABLE TO COPY IMPORTANT ASPECTS OF OUR PRODUCTS OR PRODUCT PRESENTATION,
WHICH WOULD UNDERMINE THE RELATIVE APPEAL OF OUR PRODUCTS TO CUSTOMERS AND
REDUCE OUR SALES.

    We believe that proprietary rights are important to our business. We
principally rely upon a combination of patent, copyright, trademark and trade
secret laws as well as contractual restrictions to protect our proprietary
technology. We have filed applications seeking U.S. patents on two inventions.
However, patents for these inventions may not be issued and it is possible that
these and any other patents issued to us may be circumvented by our competitors
or otherwise may not provide significant proprietary protection or commercial
advantage to us. Similarly, our trademark, service mark and copyright rights may
not provide significant proprietary protection or commercial advantage to us,
and the measures we take to maintain the confidentiality of our trade secrets
may be ineffective. If we are unable to effectively protect our proprietary
rights, our competitors may be able to copy important aspects of our products or
product message, which would undermine the relative appeal of our products to
customers and thus reduce our sales.

IF OUR PRODUCTS INFRINGE UPON THE PROPRIETARY RIGHTS OF OTHERS, WE MAY BE FORCED
TO PAY HIGH PRICES TO LICENSE NEW TECHNOLOGY OR STOP SELLING OUR PRODUCTS.

    Our commercial success will also depend in part on our not infringing the
proprietary rights of others and not breaching technology licenses that cover
technology used in our products. It is uncertain whether any third-party
proprietary rights will require us to develop alternative technology or to alter
our products or processes, obtain licenses or cease certain activities. If any
licenses of that type are required, we may not be able to obtain those licenses
on commercially favorable terms, if at all. Our failure to obtain a license to
any technology that we may require to commercialize our products and services
could cause our business and prospects to suffer. Litigation, which could result
in substantial cost to us, may also be necessary to enforce any patents issued
or licensed to us or to determine the scope and validity of third-party
proprietary rights.

                          RISKS RELATED TO OUR INDUSTRY

THE MARKETS IN WHICH WE COMPETE ARE HIGHLY COMPETITIVE, AND WE MAY NOT BE ABLE
TO COMPETE EFFECTIVELY.

    The market for our products is intensely competitive, subject to rapid
change and significantly affected by new product introductions and other market
activities of industry participants. Our primary source of direct competition
comes from independent software vendors of corporate portal software. We also
compete with business intelligence software vendors, large application software
vendors, and application server vendors providing a portal add-on. Business
intelligence software is installed on a personal computer and permits the
analysis of information in databases. We also face indirect competition from
potential customers' internal development efforts. We cannot assure that we will
be able to successfully compete against current and future competitors, or that
competitive pressures we face will not materially adversely affect our business,
prospects, operating results and financial condition.



                                       36
<PAGE>

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


IF WE FAIL TO MANAGE TECHNOLOGICAL CHANGE OR EFFECTIVELY RESPOND TO CHANGES IN
CUSTOMER NEEDS, DEMAND FOR OUR PRODUCTS AND SERVICES WILL DROP AND OUR BUSINESS
WILL SUFFER.

    The market for enterprise information portals is still in an early stage of
development and is characterized by rapidly changing technology, evolving
industry standards, frequent new service and product introductions and changes
in customer demands. Our future success will depend to a substantial degree on
our ability to offer products and services that incorporate leading technology
and respond to technological advances and emerging industry standards and
practices on a timely and cost-effective basis. You should be aware that:

    -   our technology or systems may become obsolete upon the introduction of
        alternative technologies;

    -   the technological life cycles of our products are difficult to estimate;

    -   we may not have sufficient resources to develop or acquire new
        technologies or to introduce new services capable of competing with
        future technologies or service offerings; and

    -   the price of the products and services we provide may decline as rapidly
        as, or more rapidly than, the cost of any competitive alternatives.

    We may not be able to effectively respond to the technological requirements
of the changing market for enterprise information portals. To the extent we
determine that new technologies and equipment are required to remain
competitive, the development, acquisition and implementation of those
technologies and equipment are likely to continue to require significant capital
investment by us. We may not have sufficient capital for this purpose in the
future, and even if it is available, investments in new technologies may not
result in commercially viable technological processes and there may not be
commercial applications for those technologies. If we do not develop and
introduce new products and services and achieve market acceptance in a timely
manner, demand for our products and services will drop and our business will
suffer.

OUR BUSINESS AND PROSPECTS WILL SUFFER IF WE ARE UNABLE TO ADEQUATELY RESPOND TO
CUSTOMER DEMANDS.

    We expect that our customers increasingly will demand additional information
and reports with respect to the services we provide. In addition, if we are
successful in implementing our marketing strategy, we also expect the demands on
our technical support resources to grow rapidly, and we may experience
difficulties in responding to customer demand for our services and providing
technical support in accordance with our customers' expectations. We expect that
these demands will require not only the addition of new management personnel,
but also the development of additional expertise by existing management
personnel and the establishment of long-term relationships with third-party
service vendors. We may not be able to keep pace with any growth, successfully
implement and maintain our operational and financial systems or successfully
obtain, integrate and utilize the employees, facilities, third-party vendors and
equipment, or management, operational and financial resources necessary to
manage a business in our evolving and increasingly competitive industry. If we
are unable to address these customer demands, our business and prospects will
suffer.

OUR FUTURE SUCCESS WILL DEPEND UPON THE ABILITY OF OUR PRODUCTS TO WORK WITH A
LARGE VARIETY OF HARDWARE, SOFTWARE, DATABASE AND NETWORKING SYSTEMS.

    We currently serve, and intend to continue to serve, a customer base with a
wide variety of hardware, software, database and networking systems. To gain
broad market acceptance, we believe that we may have to support an increased
number of systems in the future. We currently develop our products on Microsoft
Windows NT and Solaris. Therefore, we experience a delay when we adapt our
products to be installed on other major servers. A delay in any rollout of our
product onto a new system could adversely affect our revenue and operating
results. There can be no assurance that we will adequately expand our data
source and system coverage to service potential customers, or that the expansion
will be sufficiently rapid to meet or exceed the system and data source coverage
of our competitors. The success of our products will depend on various factors,
including the ability of our products to integrate and be compatible with
customer systems, particularly hardware systems, operating systems and data
sources, as well as or better than competitive offerings. The success of our
products will also depend on the ability of our existing products to work well
with one another, with new products we are developing and with new software
being developed by third parties. We cannot assure you that we will successfully
develop and market product enhancements or new products that respond to these
technological changes, shifting customer tastes or evolving industry standards,
or that we will not experience difficulties that could delay or prevent the
successful development,



                                       37
<PAGE>

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


introduction and marketing of these products. If we are unable to develop and
introduce new products or enhancements of existing products in a timely manner
or if we experience delays in the commencement of commercial shipments of new
products and enhancements, our business will suffer.

OUR OFFICERS, DIRECTORS AND AFFILIATES MAY BE ABLE TO CONTROL ALL MATTERS
SUBMITTED FOR STOCKHOLDER APPROVAL, AND YOU WILL BE SUBJECT TO THEIR DECISIONS.

    Some of our stockholders own a large enough stake in us to have a
significant influence on the matters presented to a vote of stockholders. As a
result, these stockholders may be able to control all matters requiring
stockholder approval, including the election and removal of directors, the
approval of significant corporate transactions, such as any merger,
consolidation or sale of all or substantially all of our assets, and the control
of our management and affairs. Accordingly, that concentration of ownership may
delay, defer or prevent a change in control of Viador, impede a merger,
consolidation, takeover or other business combination involving Viador or
discourage a potential acquirer from making a tender offer or otherwise
attempting to obtain control of Viador, any of which could have a material
adverse effect on the market price of our common stock.

WE HAVE CERTAIN ANTI-TAKEOVER DEFENSES THAT COULD PREVENT AN ACQUISITION OF OUR
BUSINESS THAT YOU MIGHT FAVOR.

    Provisions of our certificate of incorporation and bylaws and the provisions
of Delaware law could have the effect of delaying, deferring or preventing an
acquisition of our business. For example, our board of directors is divided into
three classes to serve staggered three-year terms, we may authorize the issuance
of up to 10,000,000 shares of "blank check" preferred stock, our stockholders
may not take actions by written consent and our stockholders are limited in
their ability to make proposals at stockholder meetings.

WE RELY ON A CONTINUOUS POWER SUPPLY.

    In the summer of 2001, California experienced an energy crisis that could
disrupt our operations and increase our expenses of our California facilities.
In the event of an acute power shortage, that is, when power reserves for the
State of California fall below certain critical levels, California has on some
occasions implemented, and may in the future continue to implement, rolling
blackouts throughout California. We currently do not have adequate backup
generators or alternate sources of power in the event of a blackout, and our
current insurance does not provide coverage for any damages we or our customers
may suffer as a result of any interruption in our power supply. If blackouts
interrupt our power supply, we would be temporarily unable to continue
operations at our California facilities. Any such interruption in our ability to
continue operations at our facilities could damage our reputation, harm our
ability to retain existing customers and to obtain new customers, and could
result in lost revenue, any of which could substantially harm our business and
results of operations.



                                       38
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Investment Portfolio

    Viador places its investments in instruments that meet high credit quality
standards, as specified in Viador's investment policy guidelines; the policy
also limits the amount of credit exposure to any one issue, issuer, or type of
instrument. Our interest income is sensitive to changes in the general level of
U.S. interest rates, particularly since the majority of our cash and cash
equivalent investments are in short-term instruments. Due to the short-term
nature of our investments, we believe that there is no material risk exposure.
At June 30, 2002 and December 31, 2001, we held no interest-bearing investments.

Impact of Foreign Currency Exchange Rate Change

    We develop products in the United States and market our products in North
America, Europe and the Asia-Pacific region. As a result, our financial results
could be affected by factors such as changes in foreign currency exchange rates
or weak economic conditions in foreign markets. No foreign currency derivatives
were purchased or written during the three or six months ended June 30, 2002.



                                       39
<PAGE>

--------------------------------------------------------------------------------
PART II - OTHER INFORMATION
--------------------------------------------------------------------------------

ITEM 1.  LEGAL PROCEEDINGS.

    Claims Settled

    On May 10, 2002, attorneys for one of Viador's customers, CMS, sent a letter
to Viador reporting that CMS had filed suit against Viador in the United States
District Court for the Eastern District of Virginia, Alexandria Division.
According to the letter, the complaint alleges breach of contract and seeks
monetary damages of approximately $281,000. On July 1, 2002 Viador settled this
dispute with CMS for the sum of $35,000 in exchange for which CMS dismissed all
claims against Viador. This settlement is included in the legal accrual as of
June 30, 2002.

    On May 16, 2002 Viador settled a dispute with a former customer, Society for
Human Resources Management, Inc. "SHRM". SHRM alleged breach of contract and was
seeking approximately $791,000 in monetary damages. The terms of the settlement
included a cash payment to SHRM in the amount of $50,000 and 526,315 shares of
Common Stock with a market value of $100,000 on the date of issuance. We had
previously accrued $100,000 related to this dispute.

    Class Action Law Suit

    On November 13, 2001, Viador and certain of its current and former officers
and directors (the "Individual Defendants"), together with the underwriters of
its October 25, 1999 Initial Public Offering ("IPO"), were named as defendants
in a class action complaint alleging violations of the federal securities laws
in the United States District Court, Southern District of New York. The Court
appointed a lead plaintiff on April 15, 2002, and plaintiffs filed an Amended
Class Action Complaint on April 19, 2002. The essence of the complaint is that
defendants issued and sold Viador's common stock pursuant to the IPO without
disclosing to investors that certain underwriters of the IPO had solicited and
received excessive and undisclosed commissions from certain investors. The
complaint also alleges that the Registration Statement for the IPO failed to
disclose that the underwriters allocated Viador shares to customers in exchange
for the customers' promises to purchase additional shares in the after-market at
pre-determined prices above the offering price, thereby maintaining, distorting
and/or inflating the market price for the shares in the after-market. The action
seeks damages in an unspecified amount.

    The lawsuit is part of the "IPO Allocation Securities Litigation" pending in
the United States District Court for the Southern District of New York.
Approximately 310 companies and over 40 underwriters have been sued in actions
alleging claims nearly identical to those alleged against Viador. The cases are
being coordinated for pre-trial purposes before the Hon. Schira Scheindlin. The
IPO Allocation Securities Litigation is in its early stages. A motion to dismiss
addressing issues common to the companies and individuals who have been sued in
these actions was filed on July 15, 2002. Discovery is stayed pending the
outcome of motions to dismiss. This proceeding is at a very early stage and
Viador is unable to predict its ultimate outcome.

    Other Pending Litigation

    On January 11, 2002, William Grinder, an individual, filed a personal injury
complaint for unspecified monetary damages in San Francisco County Superior
Court alleging causes of action for negligence and negligent hiring against
Viador and certain other named defendants. Viador is currently investigating the
allegations and cannot evaluate plaintiff's claims at this time.

    Viador is involved in lawsuits, claims, investigations and proceedings from
time to time, including those identified above, consisting of matters which
arise in the ordinary course of business.



                                       40
<PAGE>

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

    (a) MODIFICATION TO INSTRUMENTS DEFINING THE RIGHTS OF COMMON STOCKHOLDERS.

    None.

    (b) MATERIAL LIMITATIONS OR QUALIFICATIONS ON RIGHTS OF COMMON STOCKHOLDERS
        RESULTING FROM THE ISSUANCE OR MODIFICATION OF OTHER SECURITIES.

    None.

    (c) INFORMATION REQUIRED BY ITEM 701 OF REGULATION S-K.

    None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

    None.

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

    We held our annual meeting of stockholders on June 20, 2002. The following
is a brief description of each matter voted upon at the meeting and the number
of votes cast for, withheld, or against and the number of abstentions with
respect to each matter.

    The stockholders approved the amendment to our 1999 Stock Incentive Plan to
increase the total number of shares authorized for issuance there under by
10,000,000 shares to a total of 22,895,549 shares: shares voted for: 16,894,234;
shares voted against: 347,971; shares abstaining: 9,570; broker non-votes:
11,092,148.

    The stockholders approved the appointment of KPMG LLP as out independent
auditors for the year ended December 31, 2002: shares voted for: 28,344,316;
shares voted against: 17,580; shares abstaining: 9,045.

    The two directors proposed by Viador for re-election were elected to new,
three-year terms by the following vote:

<TABLE>
<CAPTION>
    DIRECTOR NAME            SHARES VOTED FOR          SHARES WITHHELD AUTHORITY
    ------------------       ----------------          -------------------------
    <S>                      <C>                       <C>
    Stan X. Wang                28,300,913                      70,028
    Teddy Kiang                 27,811,308                     559,633
</TABLE>

ITEM 5.  OTHER INFORMATION

    See "Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Recent Events" on page 17.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      (a)  EXHIBITS.

           None.

      (b)  REPORTS ON FORM 8-K.

           No reports on Form 8-K were filed during the three months ended June
           30, 2002.

           Viador filed a Current Report on Form 8-K with the Securities and
           Exchange Commission on August 20, 2002 under Item 5 regarding the
           late filing of this Form 10-Q, the resignation of Viador's Chief
           Financial Officer, and resignation and replacement of a member of
           Viador's Board of Directors.



                                       41
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                        VIADOR INC.
                                        -----------
                                        (Registrant)


Date: September 12, 2002                By:         /s/  STAN X. WANG
                                           -------------------------------------
                                                        Stan X. Wang
                                            Chief Executive Officer, Principal
                                             Financial and Accounting Financial
                                                 Officer and Secretary



                                       42