As filed with the Securities and Exchange Commission on February 24, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-1
REGISTRATION STATEMENT
Under the Securities Act of 1933

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COMPS.COM, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware 7375 33-0645337

(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)

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9888 Carroll Centre Road, Suite 100
San Diego, California 92126-4581
(619) 578-3000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)

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Mr. Christopher A. Crane
President and Chief Executive Officer
COMPS.COM, INC.
9888 Carroll Centre Road, Suite 100
San Diego, California 92126-4581
(619) 578-3000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

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Copies to:

Craig S. Andrews, Esq. Lawrence D. Levin, Esq.
Faye H. Russell, Esq. Katten Muchin & Zavis
Brobeck, Phleger & Harrison LLP 525 West Monroe Street, Suite 1600
550 West C Street, Suite 1300 Chicago, Illinois 60661
San Diego, California 92101 (312) 902-5200
(619) 234-1966

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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

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

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

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

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

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CALCULATION OF REGISTRATION FEE

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Title of Each Class of Proposed Maximum Amount of
Securities to be Registered Aggregate Offering Price(1) Registration Fee(1)
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Common Stock, par value $0.01 per share.... $50,000,000 $13,900

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(1) Estimated pursuant to Rule 457(o) solely for the purpose of calculating the
amount of the registration fee.

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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may +
+change. We and the selling stockholders may not sell these securities until +
+the registration statement filed with the SEC is effective. This preliminary +
+prospectus is not an offer to sell these securities, and it is not soliciting +
+an offer to buy these securities in any state where the offer or sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 24, 1999

[LOGO]

Common Stock

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COMPS.COM, INC. is offering shares of its common stock. This is our initial
public offering and no public market currently exists for our shares. We
anticipate that the initial public offering price will be between $ and
$ per share.

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We intend to list our common stock on the Nasdaq National Market under the
symbol "CDOT."

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Please see "Risk Factors" beginning on page 7 to read about certain risks
that you should consider before buying shares of our common stock.

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PRICE $ PER SHARE

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Per Share Total
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Public offering price.................................... $ $
Underwriting discounts and commissions................... $ $
Proceeds, before expenses, to COMPS.COM.................. $ $

The Securities and Exchange Commission and state securities commissions have
not approved or disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The underwriters have an option to purchase additional shares from us
and the selling stockholders to cover over-allotments of shares. We will not
receive any of the proceeds from the sale of shares by the selling
stockholders.

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Volpe Brown Whelan & Company

EVEREN Securities, Inc.

Needham & Company, Inc

, 1999

Front Cover:

[The front cover will have a dark background and the text will be printed in
white. A picture of database wheel resembling a radar screen will appear on the
background of the front cover.]

[LOGO]

Inside Front Cover:

COMPREHENSIVE CONTENT

[The following text are placed in varying fonts and font sizes throughout the
recurring database wheel: buyers & sellers, phone number, square footage,
contact name, capitalization rate, building characteristics and condition,
confirmed sales price, financing information, income and expense, unit mix,
color photos, lenders, financing. Four screen shots of four different pages
from our Web site showing some of our products are placed on parts of the
database wheel.]

Inside Spread:

DYNAMIC DELIVERY

[A two page spread of a screen depicting a picture of a page on our Web site.
Our market segments are listed in a bar down the left side of the screen. Each
market segment is underlined. In the main frame of the screen is (1) a picture
of a hand with a mouse, (2) the database wheel laid on top of a group of
commercial real estate buildings, (3) an arrow pointing at the center of the
database wheel and (4) a screen shot of a page from our Web site.]

Table of Contents

Page
----

Prospectus Summary....................................................... 4
Risk Factors............................................................. 7
Use of Proceeds.......................................................... 17
Dividend Policy.......................................................... 17
Capitalization........................................................... 18
Dilution................................................................. 19
Selected Financial Data.................................................. 20
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 21
Business................................................................. 29

Page
----

Management................................................................. 40
Certain Relationships and Related Transactions............................. 51
Principal and Selling Stockholders......................................... 53
Description of Securities.................................................. 54
Shares Eligible For Future Sale............................................ 58
Underwriting............................................................... 59
Legal Matters.............................................................. 61
Experts.................................................................... 61
Where You Can Find More Information........................................ 61
Index to Financial Statements.............................................. F-1

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Notes to Readers of this Prospectus

. Comps Incorporated was incorporated in California in January 1982. It was
purchased by Business Real Estate Information Corp. in 1992 and
reincorporated in Delaware in 1994 as COMPS InfoSystems, Inc. In January
1999, we changed our name to COMPS.COM, INC. Our principal executive offices
are located at 9888 Carroll Centre Road, Suite 100, San Diego, California
92126. Our telephone number at that location is (619) 578-3000. Our Web site
address is www.comps.com. Information contained on our Web site does not
constitute part of this prospectus.

. This offering is for shares; however, the underwriters have a 30-day
option to purchase up to additional shares from us and the selling
stockholders to cover over-allotments. Some of the disclosures in this
prospectus would be different if the underwriters exercise the option.
Unless we tell you otherwise, the information in this prospectus assumes
that the underwriters will not exercise the option.

. Unless we tell you otherwise, all information in this prospectus relating to
our outstanding common stock: (1) reflects the automatic conversion of each
share of our Class B common stock into one share of our Class A common stock
and the renaming of such stock as "common stock" upon the closing of this
offering, (2) reflects the automatic conversion of each share of our
preferred stock into one share of our common stock upon the closing of this
offering; (3) reflects the exercise of warrants outstanding to purchase
723,295 shares at a weighted average exercise price of $0.01 per share and
(4) reflects a for stock split of our common stock to be
effected prior to the closing of this offering.

. COMPS, COMPSLink, CallCOMPS, WinCOMPS, COMPS NET, REALBID and our logo are
our registered trademarks. Each other trademark, trade name or service mark
appearing in this prospectus belongs to its holder.

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Special Note Regarding Forward-Looking Statements

This prospectus may contain forward-looking statements based on our current
expectations, assumptions, estimates and projections about us and our industry.
These forward-looking statements involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, as more fully described in the "Risk
Factors" section and elsewhere in this prospectus. We are not obligated to
update or revise these forward-looking statements to reflect new events or
circumstances.

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You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.

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Until , 1999, all dealers selling shares of our common stock,
whether or not participating in this offering, may be required to deliver a
prospectus. This delivery requirement is in addition to the obligation of
dealers to deliver a prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.

Prospectus Summary

This summary highlights some of the information in this prospectus. It may
not contain all of the information that is important to you. To understand this
offering fully, you should read the entire prospectus carefully, including the
risk factors and financial statements.

About COMPS

Our Business

We are a leading national provider of confirmed commercial real estate sales
information both offline and on the Internet. We have also recently begun
leveraging our extensive database to facilitate commercial real estate
transactions on the Internet. Over the last 17 years, we have developed a
highly evolved data collection and confirmation system to provide information
on commercial real estate properties. We believe we have established the
foundation to be the trusted online resource linking commercial real estate
brokers, lenders, appraisers, insurers and other professionals by efficiently
distributing market information on the Internet.

Our Market

The Internet has rapidly become a significant global medium for
communications, information and commerce. It has emerged as a primary business
channel alongside the telephone, paper-based communication and face-to-face
interaction. The Internet allows online providers to efficiently distribute
information with the potential for less infrastructure and overhead and greater
economies of scale. It also offers customers diverse options and unparalleled
convenience.

The commercial real estate market is large and fragmented. Prior to the
availability of confirmed sales information from a centralized source,
commercial real estate professionals either maintained their own research
departments to catalog comparable sales, market statistics and other property-
specific information, or aggregated such information, to the limited extent
available, from multiple third parties. These methods resulted in high internal
costs and nonstandard data with varying degrees of comprehensiveness and
accuracy. In addition, there are currently no comprehensive, standardized
transaction support services that efficiently identify properties and bring
together brokers, buyers, lenders and insurers in commercial real estate
transactions.

Our Solution

. developed a comprehensive and standardized proprietary database of
approximately 400,000 commercial real estate transactions;
. migrated our database to the Internet, allowing our customers to receive
updated commercial real estate transaction information more frequently and
analyze the data more quickly and easily;
. established an Internet-based listing-broker/buyer matching service,
allowing us to identify and refer potential buyers of listed properties to
brokers and actively market these properties for brokers using our Internet-
based new listing notification system; and
. introduced an Internet-based commercial real estate listing service,
enabling brokers to market their properties over the Internet and increase a
property's exposure to prospective buyers and their brokers.

Our Business Strategy

Our objective is to be the trusted online resource linking commercial real
estate professionals by efficiently distributing market information on the
Internet. Our business strategy to achieve this objective includes the
following key elements:

. continue to enhance our comprehensive historical database of commercial real
estate transactions;
. expand our online listing-broker/buyer matching service;
. create a comprehensive online national listing service for commercial real
estate;
. enhance our services and products to facilitate the online exchange of
commercial real estate market information;
. expand into new geographic markets; and
. continue to build our brand name.

The Offering

Common stock offered by us.............. shares

Common stock outstanding after this
offering............................... shares

Use of proceeds......................... For working capital and other general
corporate purposes, including
expansion of our proprietary
database, enhancement and development
of existing and new information
services and transaction support
products, geographic expansion, and
repayment of debt. We may also use a
portion of the proceeds for strategic
alliances and acquisitions. Please
see "Use of Proceeds."
Proposed Nasdaq National Market symbol.. CDOT

The information above is as of December 31, 1998. In addition to the
shares of common stock to be outstanding after this offering, we may issue the
following securities, which share numbers do not reflect a stock split of to
, which is subject to stockholder approval:

. 2,385,449 shares upon the exercise of options outstanding at a weighted
average exercise price of $0.86 per share;

. 213,068 shares upon the exercise of warrants outstanding at a weighted
average exercise price of $1.76 per share; and

. 512,909 shares upon exercise of options available for issuance under our
stock plans. For a description of our stock option plans, please see
"Management--Benefit Plans."

Summary Financial And Operating Data
(dollars in thousands, except per share and other operating data)

The following table summarizes the financial data for our business. The pro
forma statement of operations data gives effect to our acquisition of REALBID,
LLC as if it had occurred on January 1, 1998.

Year Ended December 31,
-----------------------------------------------------------
Pro Forma
1994 1995 1996 1997 1998 1998
-------- -------- -------- -------- -------- ---------

Statement of Operations
Data:
Net revenues............ $ 6,030 $ 6,716 $ 8,141 $ 10,450 $ 12,806 $13,029
Cost of revenues........ 2,674 3,488 4,357 5,054 5,746 5,791
-------- -------- -------- -------- -------- -------
Gross profit............ 3,356 3,228 3,784 5,396 7,060 7,238
Operating expenses:
Selling and marketing.. 2,306 2,072 2,813 3,408 4,182 4,182
Product development and
engineering........... -- -- 376 768 1,230 1,230
General and
administrative........ 1,743 2,527 2,835 2,525 2,936 3,638
-------- -------- -------- -------- -------- -------
Total operating
expenses............ 4,049 4,599 6,024 6,701 8,348 9,050
-------- -------- -------- -------- -------- -------
Loss from operations.... (693) (1,371) (2,240) (1,305) (1,288) (1,812)
Other income (expense),
net.................... (9) 12 (67) (252) (260) (260)
-------- -------- -------- -------- -------- -------
Net loss................ (702) (1,359) (2,307) (1,557) (1,548) (2,072)
Dividend accretion on
preferred stock........ 63 299 299 299 363 363
-------- -------- -------- -------- -------- -------
Net loss attributable to
common stockholders.... $ (765) $ (1,658) $ (2,606) $ (1,856) $ (1,911) $(2,435)
======== ======== ======== ======== ======== =======
Net loss per share
attributable to common
stockholders, basic and
diluted................ $ (0.12) $ (0.35) $ (0.55) $ (0.39) $ (0.40) $ (0.51)
======== ======== ======== ======== ======== =======
Shares used in computing
net loss per share
attributable to common
stockholders, basic and
diluted................ 6,408 4,774 4,774 4,774 4,795 4,795
======== ======== ======== ======== ======== =======
Pro forma net loss per
share, basic and
diluted................ $ (0.16) $ (0.22)
======== =======
Shares used in computing
pro forma net loss per
share, basic and
diluted................ 9,635 9,635
======== =======
Other Operating Data:
Markets covered by
database.............. 16 24 24 25 34
Transactions in
database.............. 245,951 270,945 302,684 341,670 387,427
Value of transactions
in database (dollars
in millions).......... $ 191 $ 222 $ 272 $ 355 $ 460
Value of transactions
supported by REALBID
(dollars in
millions)............. -- -- -- $ 300 $ 3,800

At December 31, 1998
-----------------------
Actual As Adjusted
--------- ------------

Balance Sheet Data:
Cash and cash equivalents............................... $ 378 $
Working capital (deficit)............................... (4,354)
Total assets............................................ 7,397
Deferred subscription revenue........................... 5,503
Long-term debt, less current portion.................... 1,123
Redeemable convertible preferred stock.................. 7,316
Total stockholders' deficit (9,195)

- --------
Please see Note 1 to our financial statements for an explanation of the
determination of the number of shares used in computing pro forma net loss per
share.

The as adjusted balance sheet data listed above reflects the sale of
shares of common stock offered at an assumed initial public offering price of
$ per share after deducting the estimated underwriting discount and
estimated offering expenses payable by us. Please see "Use of Proceeds" and
"Capitalization" for a discussion about how we intend to use the proceeds from
this offering and about our capitalization.

Risk Factors

Any investment in our common stock involves a high degree of risk. You should
consider carefully the following information about these risks, together with
the other information contained in this prospectus, before you decide to buy
our common stock. If any of the following risks actually occur, our business
would likely suffer. In such case, the trading price of our common stock could
decline, and you may lose all or part of the money you paid to buy our common
stock.

Risks Related to Our Business

We may not achieve future profitability due to continued operating losses and
negative cash flows.

We have incurred significant net losses since our inception. As of December
31, 1998, we had an accumulated deficit of $11.4 million. We have incurred
substantial costs to expand into new markets, develop new products and create,
introduce and enhance our Web site. We expect operating losses and negative
cash flows to continue for the foreseeable future as we continue to incur
significant expenses. As a result, we will need to generate significant
revenues to achieve profitability. Even if we do become profitable, we cannot
assure you that we can sustain or increase profitability on a quarterly or
annual basis. If revenues grow more slowly than we anticipate, or if operating
expenses exceed our expectations or cannot be adjusted in response to slower
revenue growth, our business will be materially adversely affected. Please see
"Selected Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our financial statements for
detailed information related to our uncertain profitability.

We have only been operating on the Internet since 1998 and cannot assure you
that our Internet products will achieve market acceptance.

We only recently began offering our services on the Internet. During 1998,
over 90% of our revenue was a result of our information services products
delivered on CD-ROM and other non-Internet media. Less than 10% of our revenues
in 1998 were a result of our services and products delivered on the Internet.
We intend to continue to increase our reliance on the Internet for delivery of
our services and products. As a result, our future profitability will
increasingly rely upon the use of our information services and transaction
support products on the Internet. Our ability to obtain market acceptance for
our Internet products will depend on the following factors:

. our ability to transition our customers from the use of our services and
products on CD-ROM to the use of these services and products on the
Internet in a timely and efficient manner;

. our customers' acceptance of, and their ability to adapt to the use of,
our existing and future services and products on the Internet; and

. our ability to anticipate and adapt to the changing Internet market.

If our Internet-based information services or transaction support products
are not received favorably by our current customers, it may negatively affect
their use of our other products or cause new customers to choose a competitive
service over ours.

If we do not successfully develop new and enhanced services and products, our
revenues could decrease.

We will not be financially successful if we are unable to meet the
increasingly sophisticated needs of our customers through timely developments
and new and enhanced versions of our services and products. Our planned
development and enhancement efforts have inherent risks. We may experience
financial or technical difficulties that could prevent us from introducing new
or enhanced information services or transaction support products. Furthermore,
these new or enhanced services and products may contain problems that are
discovered after the products are introduced. We may need to significantly
modify the design of these products on the Internet to correct these problems.
Our business could be materially adversely affected if we experience
difficulties in introducing new or enhanced services and products or if these
services or products are not

received favorably by our customers. Finally, development and enhancement of
our services and products will require significant additional expenses and
could strain our management, financial and operational resources. The lack of
market acceptance of our services or products or our inability to generate
satisfactory revenues from such development or enhancements to offset their
costs could have a material adverse effect on our business.

Our quarterly results of operations fluctuate which could cause our stock
price to fluctuate.

Our quarterly operating results have fluctuated significantly and are
expected to continue to fluctuate in the future due to a variety of factors,
many of which are outside of our control. It is possible that in some future
periods our results of operations may be below the expectations of public
market analysts and investors. In this event, the price of our common stock is
likely to fall. Factors contributing to these fluctuations include:

. the demand for and acceptance of information services and transaction
support products on the Internet in general or on our Web site;

. the loss of clients or revenue due to consolidation in the real estate
brokerage, lending, appraisal, insurance and investment industries;

. changes in rates paid for information services or transaction support
products in the commercial real estate industry or related industries
resulting from competition or other factors;

. changes in customer budgets;

. technical difficulties or system downtime affecting the Internet or the
operation of our Web site and our ability to upgrade and develop our
systems and infrastructure to minimize such difficulties in a timely and
effective manner;

. the amount and timing of our costs related to our product development,
marketing efforts and other initiatives;

. fees we may pay for distribution or content or other costs we may incur
as we expand our operations or geographic coverage;

. our costs related to acquisitions of businesses, technologies, services
and products;

. economic conditions or other factors specific to the real estate market
or the Internet as well as general economic and market conditions;

. changes in the privacy laws that may hinder our ability to gather
information necessary for our information services or transaction
support products; or

. the seasonality of our revenues.

Due to all of these factors and the other risks discussed in this section,
you should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of our future performance.

Since we expect to be substantially dependent on revenues from our
information services and transaction support products offered on the Internet,
our quarterly revenues are likely to be particularly affected by the number of
visitors to our Web site. In addition, our operating expenses are based on our
expectations of our future revenues and are relatively fixed in the short-term.
We may be unable to adjust spending quickly enough to offset any unexpected
revenue shortfall. If we have a shortfall in revenues in relation to our
expenses, or if our expenses increase before our revenues do, then our business
for a particular quarter would be materially adversely affected. This could
affect the market price of our common stock. Please see "Management's
Discussion and Analysis of Financial Condition and Results of Operations" for
detailed information on our quarterly operating results.

We may need additional capital by the end of 2000.

the future in order (1) to fund more rapid expansion, (2) to develop new or
enhanced services or products, (3) to respond to competitive pressures, (4) to
acquire complementary businesses, technologies or services or (5) to conduct
more aggressive brand promotions. Additional financing may not be available on
terms favorable to us, if at all. If adequate funds are not available or not
available on acceptable terms, we may be unable to fund our expansion, take
advantage of acquisition opportunities, develop or enhance our services or
products, respond to competitive pressures or successfully promote our brand
name. Any such inability could have a material adverse effect on our business.

If we do not expand our geographic coverage our services and products could
become less desirable.

We believe our success is highly dependent on our ability to increase the
geographic coverage of our database. Currently our proprietary database
contains confirmed sales comparable records in 35 of the 74 largest markets in
the U.S. If we are not able to expand the geographic coverage of our database
into other markets, our business could be materially adversely affected. We
also plan to expand into selected international markets. We expect this
geographic expansion effort to impose additional burdens on our research, sales
and administrative resources. Please see "Business--Our Business Strategy" for
a discussion of our geographic expansion strategy.

If we cannot maintain the integrity and reliability of our proprietary
database, we may not be successful.

We cannot assure you that the information in our database will be
comprehensive, accurate or timely, particularly as we grow. Our success is
highly dependent on our customers' confidence in the comprehensiveness,
accuracy and timeliness of our proprietary database of confirmed commercial
real estate transactions and the software used to access our database. We
expect the task of establishing and maintaining such comprehensiveness,
accuracy and timeliness during the growth of our business to require
substantial effort and expense. Please see "Business--Our Proprietary Database"
for a discussion of how we maintain our proprietary database.

Cyclical economic swings in the real estate market could decrease demand for
our services and products.

The real estate industry traditionally has been subject to cyclical economic
swings which could materially adversely affect our business. Our business is
dependent on the real estate industry and related industries that supply goods
or services to, or invest in, the real estate industry. Changes in the real
estate market may affect demand for our services and products. These cyclical
economic swings may be caused by various factors, such as, changes in interest
rates and changes in economic conditions.

When interest rates are high or general economic conditions are weak, there
may be less sales activity in commercial real estate and on the part of
mortgage brokers and lenders. These cyclical economic swings could materially
adversely affect our business.

Consolidation of the real estate industry could negatively impact our
business.

The real estate industry is undergoing a period of consolidation, motivated
in part by a desire to reduce expenses. Such consolidation poses a number of
risks and could materially adversely affect our business. These risks include:

. a decrease in our client base;

. reduction in the size of our target market;

. creation of competitors with sufficiently greater bargaining power which
could cause price erosion;

. creation of competitors with access or rights to, or ownership of,
sources that provide the data we need for our proprietary database; and

. reduction in the number of sources from whom we obtain data for our
proprietary database.

We may not be able to successfully develop our "COMPS.COM" brand name.

To be successful, we must strengthen awareness of our brand name. In order to
build our brand name, we must succeed in our marketing efforts, provide high-
quality services and products and increase the number of visitors to our Web
site. If our marketing efforts are not successful or if we cannot increase
awareness of our brand name, our business would be materially adversely
affected.

If we are unable to continue to develop our direct sales force, it could
materially adversely affect our business.

In order to support our growth, we need to substantially increase the size of
our direct sales force. Our ability to increase our direct sales force involves
a number of risks, including:

. the competition we face from other companies in hiring and retaining
sales personnel;

. our ability to integrate and motivate additional sales and sales support
personnel;

. our ability to manage a multi-location sales organization; and

. the length of time it takes new sales personnel to become productive.

There would be a material adverse effect on our business if we do not
continue to develop and maintain an effective direct sales force.

Intense competition may render our services and products uncompetitive or
obsolete.

The market for our Internet-related and non-Internet-related information
services and transaction support products is competitive. Our principal
competitive factors are:

. quality and depth of the underlying databases;

. the proprietary nature of methodologies, databases and technical
resources;

. the usefulness of the data and reports generated by our software;

. effectiveness of marketing and sales efforts;

. customer service and support;

. compatibility with the customer's existing information systems;

. vendor reputation;

. price;

. timeliness; and

. brand loyalty.

We compete directly and indirectly for customers and content providers with
the following categories of companies:

. publishers and distributors of traditional off-line information
services;

. online services or Web sites targeted to commercial real estate brokers,
appraisers, mortgage brokers, lenders, buyers and sellers of commercial
real estate properties and insurance companies; and

. public record providers.

We cannot assure you that our competitors will not develop services or
products that are equal or superior to ours or that achieve greater market
acceptance. We anticipate that the number of direct and indirect competitors
will increase in the future and could result in price reductions, reduced
margins, greater operating losses or loss of market share, any of which would
materially adversely affect our business. For further information about our
competition, please see "Business--Competition."

If we fail to be year 2000 compliant, it could harm our business.

We have not fully completed tests to assure that our information technology
systems will function properly in the year 2000. Our computer systems and
software programs may need to be upgraded in order to

comply with year 2000 requirements, or we risk system failure or
miscalculations causing disruptions of normal business activities.

We estimate expenses to achieve year 2000 readiness will be $300,000,
$150,000 of which was expended prior to December 31, 1998. Until our testing is
complete and such vendors and providers are contacted, we will not be able to
completely evaluate whether our information technology systems or non-
information technology systems will need to be revised or replaced. If our
efforts to address year 2000 risks are not successful, or if suppliers or other
third parties with whom we conduct business do not successfully address such
risks, it could have a material adverse effect on our business. Please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Impact of the year 2000" for detailed information on our state of
readiness, potential risks and contingency plans regarding the year 2000 issue.

If we do not effectively manage our growth, it could have a material adverse
effect on our business.

We have experienced growth in our business which we expect to continue. Such
growth has placed, and will continue to place, a significant strain on our
management systems and resources. We will need to continue to improve our
operational and financial systems and managerial controls and procedures. We
will need to continue to expand, train and manage our workforce. We expect that
our workforce will continue to increase for the foreseeable future. We will
have to maintain close coordination among our technical, accounting, finance,
marketing, sales and research departments. If we fail to effectively manage our
growth and address the above concerns it could have a material adverse effect
on our business.

If we do not successfully integrate acquired businesses with our business, it
could have a material adverse effect on our business.

Since October 1993, we have acquired six businesses and three product lines.
We may not be able to integrate our recent or any future acquisitions
successfully with our existing operations without substantial costs, delays or
other problems. As we integrate acquired businesses or product lines, we could
have difficulty in assimilating personnel and operations. In addition, the key
personnel of acquired companies may decide not to work for us. We could also
have difficulty in assimilating the acquired products, services or technologies
into our operations. These difficulties could disrupt our ongoing business,
distract our management and employees, increase our expenses and materially
adversely affect our results of operations due to accounting requirements such
as amortization of goodwill or other purchased intangibles. Furthermore, we may
incur debt or issue equity securities to pay for any future acquisitions. The
issuance of equity securities could be dilutive to our existing stockholders.

If we are unable to retain key personnel or attract new personnel, it could
have a material adverse effect on our business.

The loss of the services of any of our key personnel or our inability to
successfully attract and retain qualified personnel in the future would have a
material adverse effect on our business. Our future success depends on the
continued service of our key personnel, including Christopher A. Crane, our
President and Chief Executive Officer, Emmett R. DeMoss, our Vice President and
the Chairman of our REALBID division, Karen Goodrum, our Vice President of
Finance and Administration, Chief Financial Officer and Secretary, Walter W.
Papciak, our Executive Vice President of Sales, Marketing and Product
Development, and Michael Arabe, our Senior Vice President of Sales. Mr. Crane
is the only key person for whom we maintain life insurance (face amount of
$2,000,000). Our future success also depends on our ability to attract, retain,
integrate and motivate highly skilled researchers and other employees.
Competition for researchers and other employees in our industry is intense,
particularly in the San Diego area, where our headquarters are located. Please
see "Management" for detailed information on our key personnel.

Increased users straining our systems and other systems malfunctions could
materially adversely affect our business.

The performance of our Web site is critical to our reputation, our ability to
attract customers and market acceptance of our Web site. All of our
communications and network infrastructure is hosted at our headquarters in San
Diego. We have in the past experienced system failures, including network,
software or hardware failures, that have interrupted or increased the response
time of our online services. In the future, the capacity of our software and
hardware could be strained by an increase in the use of our products on the
Internet as we migrate our customers to the Internet. Our ability to provide
uninterrupted, secure online services depends on our ability to protect our
facilities and equipment against damage from fire, earthquakes, power loss,
water damage, telecommunications failures, vandalism, computer viruses, hacker
attacks and other malicious acts, and similar unexpected material adverse
events. Customers may become dissatisfied if a system failure interrupts our
ability to provide access to our Web site. Since our insurance policies have
low coverage limits, our insurance may not adequately compensate us for any
losses that may occur due to any system failures or interruptions.

Our customers also depend on Internet service providers, online service
providers and other Web site operators for access to our Web site. Each of them
has experienced significant outages in the past, and could experience outages,
delays and other difficulties due to system failures unrelated to our systems.
Moreover, the Internet infrastructure may not be able to support continued
growth in its use. Any of these problems could materially adversely affect our
business.

We may not be able to adequately protect our proprietary rights.

It may be difficult to protect our proprietary rights. We regard our database
of confirmed commercial real estate transactions and the software used to
operate our Web site, as well as our various trademarks and copyrights, as
proprietary. We will continue to attempt to protect them under a combination of
copyright, trade secret and trademark laws, as well as by contractual
restrictions on employees and third parties. Despite these precautions, it may
be possible for unauthorized parties to copy our services or otherwise obtain
and use information that we regard as proprietary. Existing trade secrets and
copyright laws provide only limited protection. Certain provisions of other
license and distribution agreements that we intend to use, including provisions
protecting against unauthorized use, copying, transfer and disclosure, may be
unenforceable under the laws of certain jurisdictions. Furthermore, we may be
required to negotiate limits on these provisions from time to time. In
addition, the laws of some foreign countries do not protect our proprietary
rights to the same extent as do the laws of the U.S. The steps we take may not
be adequate to deter misappropriation of proprietary information. We also may
not be able to detect unauthorized use and take appropriate steps to enforce
our intellectual property rights. Significant and protracted litigation may be
necessary to protect our intellectual property rights, to determine the scope
of the proprietary rights of others or to defend against claims for
infringement. Third parties may assert claims against us alleging infringement,
misappropriations or other violation of proprietary rights, whether or not such
claims have merit. Such claims can be time consuming and expensive to defend
and could require us to cease the use and sale of allegedly infringing services
and products, to incur significant litigation costs and expenses, to develop or
acquire non-infringing technology and to obtain licenses to the alleged
infringing technology. We may not be able to develop or acquire alternative
technologies or obtain such licenses on commercially acceptable terms.

If we are not able to meet our customers' needs, it could result in liability
for us.

If our services or products either fail to satisfy a customer's needs or have
a material adverse impact on a customer, the customer might bring a claim for
damages against us, even if we are not responsible for such failure. The
limitations of liability set forth in customer contracts may not be enforceable
and may not otherwise protect us from liability for damages. The successful
assertion of one or more large claims against us that exceed available
insurance coverages, or changes in our insurance policies, such as premium
increases or the imposition of large deductibles or co-insurance requirements
could materially adversely affect our business.

Risks Related To Our Industry

If Internet usage does not continue to grow, it could materially adversely
affect our business.

The Internet is relatively new and is rapidly evolving. Our business would be
materially adversely affected if Internet usage does not continue to grow.
Internet usage may be inhibited for a number of reasons, such as:

. the Internet infrastructure may not be able to support the demands
placed on it;

. security and authentication concerns with respect to attempts by
unauthorized computer users to penetrate network security and
transmission over the Internet of confidential information, such as
credit card numbers, may remain; and

. privacy concerns, particularly because, for a variety of information
gathering purposes, Web sites typically place certain information on a
user's hard drive without the user's knowledge or consent.

We may not be able to adapt to the rapid technological changes to the Internet
and Internet Products.

To be successful, we must adapt to the rapid technological changes to the
Internet and Internet products by continually enhancing our Web site and
introducing and integrating new services and products to capitalize on the
technological advances in the Internet. This process is costly and we cannot
assure you that we will be able to successfully integrate our services and
products to the technological advances in the Internet. The collection,
storage, management and dissemination of commercial real estate information
from a centralized database on the Internet is a recent and evolving
development. Our market is characterized by rapidly changing technologies,
evolving industry standards, increasingly sophisticated customer needs and
frequent new product introductions. These factors are exacerbated by the rapid
technological change experienced by the computer and software industries. We
could incur substantial costs if we need to modify our services or
infrastructure in order to adapt to these changes. If we incurred significant
costs without adequate results or we were unable to adapt to rapid
technological changes, it could have a material adverse effect on our business.

Adoption of new laws and government regulations relating to the Internet could
harm our business.

Our business could be materially adversely affected by the adoption or
modification of laws or regulations in the U.S. or abroad relating to the
Internet. Laws and regulations directly applicable to Internet communications
and commerce are becoming more prevalent. Such legislation could dampen the
growth in use of the Internet generally and decrease the acceptance of the
Internet as a communications and commercial medium. The governments of states
or foreign countries might attempt to regulate our transmissions or levy sales
or other taxes relating to our activities. The laws governing the Internet,
however, remain largely unsettled, even in areas where there has been some
legislative action. It may take years to determine whether and how existing
laws such as those governing intellectual property, privacy, libel and taxation
apply to the Internet and Internet commerce. In addition, the growth and
development of the market for Internet commerce may prompt calls for more
stringent consumer protection laws, both in the U.S. and abroad, that may
impose additional burdens on companies conducting business over the Internet.
The growth and development of the market for Internet commerce may also prompt
calls for widening access on the Internet to public records, including records
concerning the commercial real estate industry.

Internet security concerns could hinder Internet commerce and materially
adversely affect our business.

We may be required to expend significant capital and other resources to
protect against security breaches on our Web site or to alleviate problems
caused by such breaches. If any compromise of our security were to occur, it
could damage our reputation and expose us to a risk of loss, litigation and
possible liability. A significant barrier to online commerce and communications
is the need for secure transmission of confidential information over public
networks. Concerns over the security of transactions conducted on the Internet
and other online services, as well as user's desires for privacy, may also
inhibit the growth of the Internet and other online services especially as a
means of conducting commercial transactions. Our services involve the storage
and transmission of proprietary information, such as credit card numbers and
other confidential information.

We cannot assure you that our security measures will prevent security breaches
or that our failure to prevent such security breaches will not have a material
adverse effect on our business. Although credit card companies and others are
in the process of developing anti-theft and anti-fraud protections, and while
we are continually monitoring this problem, at the present time the risk from
such activities could have a material adverse effect on us. We cannot assure
you that advances in computer capabilities, new discoveries in the field of
cryptography or other events or developments will not result in a compromise or
breach of the algorithms used by us to protect customer transaction data. A
party who is able to circumvent our security measures could misappropriate
confidential information or cause interruptions in our operations.

We may be subject to legal liability for displaying or distributing
information over the Internet.

Because content on our Web site is distributed to others, we may be subjected
to claims for defamation, negligence or copyright or trademark infringement or
claims based on other theories. These types of claims have been brought,
sometimes successfully, against Internet services in the past. We could also be
subjected to claims based upon the content that is accessible from our Web site
through links to other web sites or information on our Web site supplied by
third parties. Our insurance may not adequately protect us against these types
of claims. Even to the extent such claims do not result in liability to us, we
could incur significant costs in investigating and defending against such
claims. Our potential liability for information carried on or disseminated
through our Web site could require us to implement measures to reduce our
exposure to such liability, which may require the expenditure of substantial
resources and limit the attractiveness of our service to users.

We also enter into agreements with customers under which we are entitled to
receive a flat fee related to the support of purchase of commercial properties
through our Web site using REALBID or other transaction support products that
we offer. Such arrangements may expose us to additional legal risks and
uncertainties, including regulation by local, state, federal and foreign
authorities and potential liabilities to property buyers, even if we are not
selling such properties. The indemnification provided to us in our agreements
with these parties, if available, may not be adequate.

Risks Related To This Offering

The number of shares eligible for public sale after this offering could cause
our stock price to decline.

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 after this offering or
the perception that such sales could occur. Such sales also might make it more
difficult for us to sell equity securities in the future at a price that we
deem appropriate. After this offering, we will have outstanding shares
of common stock. Of these shares, the shares being offered hereby are
freely tradable.

All of our directors and officers, stockholders, optionholders and
warrantholders, who, as of December 31, 1998, held a total of 13,047,298 shares
of our outstanding or issuable common stock, on a pre-split basis, have entered
into lock-up agreements. Under these lock-up agreements, they have agreed that
for a period of 180 days from the date of this prospectus, they will not,
without the prior written consent of Volpe Brown Whelan & Company, LLC
(1) offer, sell, contract to sell, make any short sale, pledge or otherwise
dispose of, directly or indirectly, any shares of common stock, or options to
acquire shares of common stock or securities convertible into or exchangeable
for, or any other rights to purchase or acquire, common stock or (2) enter into
swap or other agreements that transfer, in whole or in part, any of the
economic consequences or ownership of common stock.

As of December 31, 1998, options to purchase a total of 2,385,449 shares of
common stock, on a pre-split basis, were outstanding, of which options to
purchase 679,623 shares were exercisable. Of the options to purchase 1,705,826
shares of common stock that were not exercisable, options to purchase 152,000
shares of common stock, on a pre-split basis, shall immediately vest and become
exercisable upon the closing of this offering. Upon the closing of this
offering, we intend to file a registration statement to register for resale the
2,800,000 shares of common stock, on a pre-split basis reserved for issuance
under our stock option plans. We

expect such registration statement to become effective immediately upon filing.
Shares issued upon the exercise of stock options granted under our stock option
plans will be eligible for resale in the public market from time to time
subject to vesting and, in the case of certain options, the expiration of the
lock-up agreements referred to below.

As of December 31, 1998, certain stockholders and warrantholders, holding
approximately 5,844,489 shares of outstanding or issuable common stock, on a
pre-split basis, have the right, subject to certain conditions and limitations,
to include their shares in certain registration statements relating to our
securities. By exercising their registration rights and causing a large number
of shares to be registered and sold in the public market, these holders may
cause the price of the common stock to fall. In addition, any demand to include
such shares in our registration statements could have a material adverse effect
on our ability to raise needed capital. Please see "Management--Benefit Plans,"
"Principal and Selling Stockholders," "Description of Securities--Registration
Rights," "Shares Eligible for Future Sale" and "Underwriting."

The liquidity of our stock is uncertain, since it has never been publicly
traded.

Prior to this offering, there has been no public market for our common stock.
We cannot predict if an active trading market in our common stock will develop
or how liquid that market might become. The market price of the common stock
may decline below the initial public offering price. The initial public
offering price for the shares will be determined by negotiations between us and
the representatives of the underwriters and may not be indicative of prices
that will prevail in the trading market. Please see "Underwriting" for more
information regarding how the initial public offering price was determined.

The market price of our stock may be materially adversely affected by market
volatility.

The stock market has experienced extreme price and volume fluctuations. The
market prices of the securities of Internet-related companies have been
especially volatile. The trading price of our common stock could be subject to
wide fluctuations in response to a number of factors, including:

. our quarterly results of operations;

. changes in earnings estimates by analysts and whether our earnings meet
or exceed such estimates;

. announcements of technological innovations by us or our competitors;

. additions or departures of key personnel;

. other matters discussed elsewhere in this prospectus; and

. other events or factors, which may be beyond our control.

In the past, companies that have experienced volatility in the market price
of their stock have been the object of securities class action litigation. If
we were the object of securities class action litigation, it could result in
substantial costs and a diversion of our management's attention and resources.

We have broad discretion regarding the use of the proceeds from this offering.

We have not identified specific uses for most of the proceeds from this
offering. Our management can spend most of the proceeds from this offering in
ways with which the stockholders may not agree. Please see "Use of Proceeds"
for detailed information on our intended use of the proceeds of this offering.

The interests of our controlling stockholders may conflict with your
interests.

We anticipate that the executive officers, directors and entities affiliated
with them will, in the aggregate, beneficially own approximately % of our
outstanding common stock following the completion of this offering. These
stockholders will be able to exercise control over all matters requiring
approval by our stockholders, including the election of directors and approval
of significant corporate transactions. This

concentration of ownership may also have the effect of delaying or preventing a
change in control of us. Please see "Management" and "Principal and Selling
Stockholders" for detailed information on the beneficial ownership of our
executive officers, directors and affiliates.

Anti-takeover provisions in our charter documents and Delaware law could make
a third-party acquisition of us difficult.

Certain provisions of our restated certificate of incorporation, our restated
bylaws and Delaware law could make it more difficult for a third party to
acquire us, even if doing so might be beneficial to our stockholders. Please
see "Description of Securities" for detailed information on these provisions.

You will suffer dilution in the value of your shares.

Investors purchasing shares in this offering will incur immediate and
substantial dilution in net tangible book value per share. To the extent
outstanding options to purchase common stock are exercised, there will be
further dilution. Please see "Dilution" for detailed information on dilution
resulting from this offering.

Use of Proceeds

We estimate that the net proceeds from the sale of the shares offered
by us will be approximately $ million, assuming an initial public
offering price of $ per share and after deducting the estimated
underwriting discounts and commissions and estimated offering expenses payable
by us. If our portion of the underwriters' over-allotment is exercised in full,
we estimate that such net proceeds will be approximately $ million.

We intend to use the net proceeds of this offering for working capital and
other general corporate purposes (approximately $ million), including
expansion of our proprietary database, enhancement and development of existing
and new information services and transaction support products and geographic
expansion. We may also use a portion of the proceeds for strategic alliances
and acquisitions. However, we currently have no strategic alliances or material
acquisitions planned.

We intend to use a portion of the net proceeds of this offering for repayment
of $2.1 million of debt with various maturity dates between April 1999 and
January 2002. Approximately $1.5 million of this debt bears interest at an
annual rate of 8.75% during the term of the loan and a one-time 15% interest
balloon payment is due upon completion of the term. The loan proceeds from
$300,000 of this $1.5 million in debt loaned to us in October 1998 were used to
acquire REALBID, LLC. Of the remaining approximately $600,000 of debt, $350,000
bears no interest and $250,000 will bear interest at 8% beginning December 1,
1999.

We have not yet determined the amount of net proceeds to be used specifically
for each of the foregoing purposes other than the repayment of debt.
Accordingly, management will have significant flexibility in applying the net
proceeds of this offering. Pending any such use, as described above, we intend
to invest the net proceeds in interest-bearing instruments. We will not receive
any proceeds from the sale of shares by the selling stockholders. Please see
"Principal and Selling Stockholders" for a description of shares to be sold by
selling stockholders.

Dividend Policy

We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain future earnings to support operations and to finance
the expansion of our business. Any future determination to pay cash dividends
will be at the discretion of our board of directors and will be dependent on
financial condition, operating results, capital requirements and other factors
that our board deems relevant.

Capitalization

The following table sets forth on a pre-split basis our capitalization as of
December 31, 1998 on an actual basis and as adjusted to give effect to the
receipt by us of the estimated net proceeds from the sale of shares
offered hereby at an assumed initial public offering price of $ per
share. This information should be read in conjunction with our financial
statements and the notes relating to such statements appearing elsewhere in
this prospectus. This information is based on the number of shares of common
stock outstanding on December 31, 1998. It excludes the following shares that
we may issue: (1) 2,385,449 shares upon the exercise of options outstanding at
a weighted average exercise price of $0.86 per share and (2) 213,068 shares
upon the exercise of warrants outstanding at a weighted average exercise price
of $1.76 per share. Please see "Management--Benefit Plans," "Description of
Securities" and the more detailed financial statements and notes appearing
elsewhere in this prospectus.

December 31, 1998
---------------------
Actual As Adjusted
------- ------------
(dollars in
thousands)

Long-term debt, less current portion..................... $ 1,123
Redeemable convertible preferred stock:..................
Preferred stock, $0.01 par value, 5,000,000 shares
authorized on an actual basis; shares authorized on an
as adjusted basis; 4,908,126 shares issued and
outstanding on an actual basis; and no shares issued
and outstanding on an as adjusted basis............... 7,316
Stockholders' equity (deficit):
Common stock, $0.01 par value, 22,500,000 shares of
Class A common stock and 2,500,000 shares of Class B
common stock authorized on an actual basis; 4,773,860
shares of Class A common stock and 43,500 shares of
Class B common stock issued and outstanding on an
actual basis; shares issued and outstanding on
an as adjusted basis.................................. 30
Additional paid-in capital............................. 4,760
Deferred compensation.................................. (2,539)
Accumulated deficit.................................... (11,446)
------- ------------
Total stockholders' equity (deficit)..................... (9,195)
------- ------------
Total capitalization................................. $ (756)
======= ============

Dilution

Our pro forma net tangible book value as of December 31, 1998, after giving
effect to (1) the automatic conversion of each share of Class B common stock
into one share Class A common stock and the renaming of such stock as "common
stock," (2) the automatic conversion of each share of our preferred stock into
one share of our common stock, (3) the exercise of warrants outstanding to
purchase 723,295 shares at a weighted average exercise price of $0.01 per share
and (4) a -for- stock split, was $ , or $ per
share of common stock. Pro forma net tangible book value per share is equal to
the amount of our total tangible assets less total liabilities, divided by the
number of shares of common stock outstanding as of December 31, 1998. Assuming
the sale by us of the shares offered hereby at an assumed initial
public offering price of $ per share and after deducting underwriting
discounts and estimated offering expenses, and the application of the estimated
net proceeds therefrom, our pro forma net tangible book value as of December
31, 1998 would have been $ , or $ per share of common stock. This
represents an immediate increase in pro forma net tangible book value of
$ per share to existing stockholders and an immediate dilution in pro
forma net tangible book value of $ per share to new investors. The
following table illustrates this per share dilution:

Assumed initial public offering price per share.............. $
Pro forma net tangible book value per share as of December
31, 1998.................................................. $
Increase attributable to new investors.....................
--------
Pro forma net tangible book value per share after this
offering....................................................
--------
Pro forma dilution per share to new investors................ $
========

The following table summarizes, on a pro forma basis as of December 31, 1998,
after giving effect to the automatic conversion of all outstanding shares of
preferred stock into common stock, the total number of shares of common stock
purchased from us, the total consideration paid to us and the average price per
share paid by existing stockholders and by new investors:

Total
Shares Purchased Consideration
----------------- ------------------ Average Price
Number Percent Amount Percent Per Share
--------- ------- ---------- ------- -------------

Existing stockholders........ % $ % $
New investors................
--------- ----- ---------- -----
Total..................... 100.0% 100.0%
========= ===== ========== =====

The tables and calculations above assume no exercise of outstanding options
or warrants, other than those warrants exercisable for $0.01 per share. At
December 31, 1998, on a pre-split basis there were (1) 2,385,449 shares
issuable upon the exercise of options outstanding at a weighted average
exercise price of $0.86 per share, (2) 213,068 shares issuable upon the
exercise of warrants outstanding at a weighted average exercise price of $1.76
per share and (3) 512,909 shares available for issuance under our stock option
plans. To the extent that these options or warrants are exercised, there will
be further dilution to new investors. Please see "Management--Benefit Plans."

Selected Financial Data

The following selected financial data should be read in conjunction with the
financial statements and the notes to such statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this prospectus. The statement of operations data for the
three years ended December 31, 1998, and the consolidated balance sheet data at
December 31, 1997 and 1998, are derived from our financial statements which
have been audited by Ernst & Young LLP, independent auditors, and are included
elsewhere in this prospectus. The statement of operations data for the two
years ended December 31, 1995, and the consolidated balance sheet data at
December 31, 1994, 1995 and 1996 are derived from audited financial statements
not included in this prospectus. Historical results are not necessarily
indicative of the results to be expected in the future. The pro forma statement
of operations data gives effect to our acquisition of REALBID, LLC as if it had
occurred on January 1, 1998.

Year Ended December 31,
-----------------------------------------------------
Pro Forma
1994 1995 1996 1997 1998 1998
------ ------- ------- ------- ------- ---------
(in thousands, except per share data)

Statement of Operations
Data:
Net revenues............. $6,030 $ 6,716 $ 8,141 $10,450 $12,806 $13,029
Cost of revenues......... 2,674 3,488 4,357 5,054 5,746 5,791
------ ------- ------- ------- ------- -------
Gross profit............. 3,356 3,228 3,784 5,396 7,060 7,238
Operating expenses:
Selling and marketing.. 2,306 2,072 2,813 3,408 4,182 4,182
Product development and
engineering........... -- -- 376 768 1,230 1,230
General and
administrative........ 1,743 2,527 2,835 2,525 2,936 3,638
------ ------- ------- ------- ------- -------
Total operating
expenses............ 4,049 4,599 6,024 6,701 8,348 9,050
------ ------- ------- ------- ------- -------
Loss from operations..... (693) (1,371) (2,240) (1,305) (1,288) (1,812)
Other income (expense),
net..................... (9) 12 (67) (252) (260) (260)
------ ------- ------- ------- ------- -------
Net loss................. (702) (1,359) (2,307) (1,557) (1,548) (2,072)
Dividend accretion on
preferred stock 63 299 299 299 363 363
------ ------- ------- ------- ------- -------
Net loss attributable to
common stockholders..... $ (765) $(1,658) $(2,606) $(1,856) $(1,911) $(2,435)
====== ======= ======= ======= ======= =======
Net loss per share
attributable to common
stockholders, basic and
diluted................. $(0.12) $ (0.35) $(0.55) $ (0.39) $ (0.40) $ (0.51)
====== ======= ======= ======= ======= =======
Shares used in computing
net loss per share
attributable to common
stockholders, basic and
diluted................. 6,408 4,774 4,774 4,774 4,795 4,795
====== ======= ======= ======= ======= =======
Pro forma net loss per
share, basic and
diluted................. $ (0.16) $ (0.22)
======= =======
Shares used in computing
pro forma net loss per
share, basic and
diluted................. 9,635 9,635
======= =======

At December 31,
--------------------------------------
1994 1995 1996 1997 1998
------ ------ ------ ------ ------
(in thousands, except per share
data)

Balance Sheet Data:
Cash and cash equivalents............. $2,866 $ 260 $ 578 $ 352 $ 378
Working capital (deficit)............. 1,225 (1,119) (2,056) (3,053) (4,354)
Total assets.......................... 4,687 4,714 4,224 4,091 7,397
Deferred subscription revenue......... 2,152 2,670 3,197 4,023 5,503
Long-term debt, less current portion.. 230 777 1,533 1,822 1,123
Redeemable convertible preferred
stock................................ 4,919 5,218 5,517 5,816 7,316
Total stockholders' deficit........... (3,414) (5,072) (7,678) (9,505) (9,195)

Please see Note 1 to the financial statements appearing elsewhere in this
prospectus for the determination of number of shares used in computing basic
and diluted loss per share.

Management's Discussion and Analysis of
Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations
should be read in conjunction with the financial statements and the notes to
those statements included elsewhere in this prospectus. This discussion may
contain forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these forward-
looking statements as a result of certain factors, such as those set forth
under "Risk Factors" and elsewhere in this prospectus.

Overview

We are a leading national provider of confirmed commercial real estate sales
information both offline and on the Internet. We have also recently begun
leveraging our extensive database to facilitate commercial real estate
transactions on the Internet. Over the last 17 years, we have developed a
highly evolved data collection and confirmation system for providing
information on commercial real estate properties. We believe we have
established the foundation to be the trusted online resource linking commercial
real estate brokers, lenders, appraisers, insurers and other professionals by
efficiently distributing market information on the Internet.

In January 1982, we first began providing confirmed sales information on
commercial properties in San Diego County. From 1982 through 1985, we expanded
our coverage throughout Southern California to Orange, Riverside, San
Bernardino and Los Angeles counties and to Phoenix and Tucson, Arizona. We
continued our geographic expansion from 1987 through 1992 with coverage of
Northern California, Las Vegas and Seattle. During the period from June 1994
through December 1998, we further broadened our geographic reach to cover
additional key markets including Washington D.C., New York, Chicago, Boston,
Atlanta, Denver, Baltimore, Dallas/Fort Worth and Miami. This expansion was
driven by both internal growth and acquisitions.

We originally offered paper-based commercial real estate transaction
information. In 1986, we introduced our CallCOMPS service, which permitted
customers to call in and obtain sales transaction information, and, in 1990, we
introduced a DOS-based subscription product. Through 1996, the majority of our
revenues continued to come from print subscriptions. In October 1996, we began
to offer our services on CD-ROM, allowing for the computerized manipulation of
data to provide more customized reports. Most recently, in January 1998, we
began to offer our information services on the Internet. This has allowed our
customers to receive updated commercial real estate transaction information
more frequently and analyze the data more quickly and easily. Delivery of our
information on the Internet and other electronic media has provided additional
value to customers, resulting in increased revenues from subscriptions and one-
time, fee-based transactions. Less than 10% of our 1998 revenues were derived
from delivery of our services and products on the Internet. We expect this
percentage to increase as more of our customers transition to using our
services and products on the Internet.

In November 1998, we acquired the assets of REALBID, LLC, a real estate
marketing services company which supports commercial real estate transactions
on the Internet. As a result of this acquisition, our 1998 pro forma net
revenues were $13.0 million and our pro forma operating expenses were $9.0
million, compared to our 1998 actual net revenues of $12.8 million and our
actual operating expenses of $8.3 million. The purchase price of the
acquisition totaled $2.3 million, which consisted of $163,000 in cash, stock
options granted to the principals valued at approximately $2.1 million and
acquisition costs of $54,000. Intangible assets of $2.2 million were recorded
as a result of this acquisition. These intangible assets will be amortized over
their estimated useful lives, ranging from three to five years, and will be
primarily allocated to general and administrative expenses. In 1998, we
amortized $82,000 relating to the intangible assets of REALBID, LLC. We
currently expect to amortize the following amounts relating to the intangible
assets of REALBID, LLC in the future: 1999--$489,000; 2000--$489,000; 2001--
$475,000; 2002--$396,000; and 2003--$313,000.

Substantially all of our revenues have been derived from licensing our
confirmed sales comparable information, either on a subscription or a per use
basis, both offline and, to a lesser extent, on the Internet.

In 1998, approximately 75% of our information licensing revenue was derived
from subscription contracts and approximately 25% was derived from fees paid on
a per use basis. The subscription licenses range from one to three years and
generally renew automatically for successive one-year terms. Many of the
license rates increase at the time of renewal. Subscribers pay contract license
fees on an annual, semi-annual, quarterly or monthly basis in advance of their
license term. We recognize this revenue on a straight line basis over the life
of the contract. Accordingly, contract license fees which are invoiced from a
new contract or upon contract renewal result in deferred revenue.

Since our November 1998 acquisition of REALBID, LLC, we have also begun to
derive revenues from our transaction support services. For the period of
November 6, 1998 through December 31, 1998, these revenues totaled
approximately $17,000. The 1998 pro forma transaction support services revenues
totaled approximately $240,000. We derive all of our transaction support
product revenues from the delivery of products on the Internet. We recognize
these revenues as services are provided.

In order to expand our operations, we anticipate incurring additional
expenses to: (1) implement new Internet-related products; (2) continue the
integration of our REALBID services with our database; (3) further automate the
data collection process; and (4) integrate acquired databases into our
standardized format. We also intend to hire additional programmers and research
employees as needed to implement our product development efforts and to
continue to expand our database of commercial real estate. In addition, we
intend to further expand our sales force and marketing team to further develop
new and existing strategic relationships and strengthen our brand name as we
enter new markets. Lastly, we anticipate incurring additional costs related to
being a public company, including director's and officer's liability insurance,
investor relation programs and professional service fees. As a result of these
expenditures and other related factors, we expect to continue to incur losses
for the forseeable future.

We have incurred significant net losses since our inception. As of December
31, 1998, we had an accumulated deficit of $11.4 million. Also, in connection
with the grant of certain stock options to employees during 1998, we recorded
deferred compensation of approximately $2.7 million for the year ended
December 31, 1998, representing the difference between the fair value of our
common stock for accounting purposes and the exercise price of such options at
the date of grant. Such amount is presented as a reduction of stockholders'
equity and amortized over the vesting period of the applicable options,
generally five years. In 1998, we recorded $118,000 in compensation expense and
expect to record the following amounts in the future: 1999--$606,000; 2000--
$606,000; 2001--$606,000; 2002--$544,000; and 2003--$176,000.

Results of Operations

The following table sets forth certain statement of operations data expressed
as a percentage of net revenues for the periods indicated:

Year Ended December 31,
-----------------------------
1996 1997 1998
------- ------- -------

Statement of Operations Data:
Net revenues................................... 100 % 100 % 100 %
Cost of revenues............................... 54 48 45
------- ------- -------
Gross profit................................... 46 52 55
Operating expenses:
Selling and marketing........................ 34 33 32
Product development and engineering.......... 5 7 10
General and administrative................... 35 24 23
------- ------- -------
Total operating expenses................... 74 64 65
------- ------- -------
Loss from operations........................... (28) (12) (10)
Other expense, net............................. (0) (3) (2)
------- ------- -------
Net loss....................................... (28)% (15)% (12)%

Comparison of Years Ended December 31, 1998, 1997 and 1996

Net Revenues

Our net revenues for 1998 were $12.8 million, an increase of $2.4 million or
22.5% from 1997. Our net revenues for 1997 were $10.4 million, an increase of
$2.3 million or 28.4% from $8.1 million in 1996. In both years the increase was
primarily due to an increase in subscriptions as a result of geographic
expansion and further penetration of our existing markets. We had no customer
that accounted for more than 5% of our net revenues in 1998, 1997 or 1996.

Cost of Revenues

Cost of revenues consists primarily of compensation and benefits for research
personnel. Our cost of revenues for 1998 was $5.7 million, an increase of
$700,000 or 13.7% from 1997. Cost of revenues for 1997 was $5.1 million, an
increase of $700,000 or 16.0% from $4.4 million in 1996. In both years, the
increase in dollar amount was primarily due to an increase in sales transaction
volume, and geographic expansion and the hiring of additional research
employees. In addition, cost of revenues increased in 1997 due to the
conversion of print subscriptions to CD-ROM format, as well as the full
amortization of an asset relating to a 1995 purchase agreement which was
amended in November 1997. Cost of revenues as a percentage of net revenues
decreased to 45% for the year ended December 31, 1998 from 48% for the year
ended December 31, 1997 and from 54% for the year ended December 31, 1996. In
each year, the percentage decrease was primarily due to increased revenues
during periods when certain costs remained relatively fixed.

Selling and Marketing Expenses

Selling and marketing expenses consist primarily of compensation and benefits
for sales and marketing personnel, as well as sales commissions to our direct
sales force. Our selling and marketing expenses for 1998 were $4.2 million, an
increase of $800,000 or 22.7% from 1997. Our selling and marketing expenses for
1997 were $3.4 million, an increase of $600,000 or 21.2% from $2.8 million in
1996. In both years, the increases in dollar amount were primarily due to
increases in commission expense, increases in telesales and marketing
employees, and increases in direct marketing and technical support pertaining
to the promotion of our COMPSLink/Windows product. As a percentage of net
revenues, such expenses decreased to 32% for the year ended December 31, 1998
from 33% for the year ended December 31, 1997 and 34% for the year ended
December 31, 1996. The percentage decreases were primarily due to increased
revenues during periods when certain costs remained relatively fixed.

Product Development and Engineering Expenses

Product development and engineering expenses consist primarily of
compensation and benefits for software engineers and quality assurance
personnel and expenses for contract programmers and developers. Our product
development and engineering expenses for 1998 were $1.2 million, an increase of
$500,000 or 60.2% from 1997. Our product development and engineering expenses
for 1997 were $800,000, an increase of $400,000 or 104% from $400,000 in 1996.
As a percentage of net revenues, product development and engineering expenses
increased to 10% for the year ended December 31, 1998 from 7% for the year
ended December 31, 1997 and 5% for the year ended December 31, 1996. The dollar
and percentage increases were primarily due to the hiring of additional
software engineers and quality assurance personnel for development of new
Internet-related products.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation and
benefits for finance and administrative personnel, professional fees,
amortization expense, insurance expenses and charges relating to merchant
credit card fees and bad debts. Our general and administrative expenses for
1998 were $2.9 million, an increase of $400,000 or 16.3% from 1997. This dollar
increase in general and administrative expenses was

primarily due to efforts in connection with our acquisition strategy, increases
in professional fees, increased expenses incurred in connection with increase
in our work force and related payroll expenses. Our general and administrative
expenses for 1997 were $2.5 million, a decrease of $300,000 or 10.9% from $2.8
million in 1996. As a percentage of net revenues, such expenses decreased to
23% for the year ended December 31, 1998 from 24% for the year ended December
31, 1997 and 35% for the year ended December 31, 1996. The dollar decrease in
1997 and the decreases in such expenses as a percentage of net revenues in both
years were primarily due to decreases in payroll expense and professional fees.

Other Expense, Net

Other expense, net consists primarily of interest expense on our debt less
the amount of interest we earn on our cash and short-term investments. Total
other expense, net for 1998 was $260,000, an increase of $8,000 or 3.2% from
1997. Total other expense, net for 1997 was $252,000, an increase of $185,000
or 276% from $67,000 in 1996. In both years, the increase in other expense was
primarily due to interest expense under a loan agreement.

Quarterly Results Of Operations

The following table sets forth certain unaudited quarterly statement of
operations data for each of the eight quarters in the two year period ended
December 31, 1998. In the opinion of management, this information has been
prepared substantially on the same basis as the audited financial statements
appearing elsewhere in this prospectus, and all necessary adjustments,
consisting only of normal recurring adjustments, have been included in the
amounts stated below to present fairly the unaudited quarterly results of
operations data.

Three Months Ended
------------------------------------------------------------------------
March 31, June 30, Sept 30, Dec 31, March 31, June 30, Sept 30, Dec 31
1997 1997 1997 1997 1998 1998 1998 1998
--------- -------- -------- ------- --------- -------- -------- -------
(dollars in thousands)

Statement of Operations
Data:
Net revenues............ $2,181 $2,562 $2,632 $3,075 $2,947 $3,226 $3,316 $ 3,317
Cost of revenues........ 1,163 1,191 1,264 1,436 1,287 1,306 1,468 1,685
------ ------ ------ ------ ------ ------ ------ -------
Gross profit............ 1,018 1,371 1,368 1,639 1,660 1,920 1,848 1,632
Operating expenses:
Selling and
marketing............. 775 848 866 919 909 917 979 1,377
Product development
and engineering....... 156 179 190 243 212 318 395 305
General and
administrative........ 502 560 569 894 672 665 679 920
------ ------ ------ ------ ------ ------ ------ -------
Total operating
expenses............ 1,433 1,587 1,625 2,056 1,793 1,900 2,053 2,602
------ ------ ------ ------ ------ ------ ------ -------
Loss from operations... (415) (216) (257) (417) (133) 20 (205) (970)
Other expense, net..... (83) (85) (57) (27) (82) (73) (38) (67)
------ ------ ------ ------ ------ ------ ------ -------
Net loss................ $ (498) $ (301) $ (314) $ (444) $ (215) $ (53) $ (243) $(1,037)
====== ====== ====== ====== ====== ====== ====== =======

The following table sets forth, for the periods indicated, the percentage of
net revenues represented by each item in our statement of operations.

Three Months Ended
-----------------------------------------------------------------------
March 31, June 30, Sept 30, Dec 31, March 31, June 30, Sept 30, Dec 31
1997 1997 1997 1997 1998 1998 1998 1998
--------- -------- -------- ------- --------- -------- -------- ------

Statement of Operations
Data:

Net Revenues............ 100% 100% 100% 100% 100% 100% 100% 100%
Cost of revenues........ 53 46 48 47 44 40 44 51
---- ---- ---- ---- ---- ---- ---- ----
Gross profit............ 47 54 52 53 56 60 56 49
Operating expenses:
Selling and
marketing............. 36 33 33 30 31 28 30 41
Product development
and engineering....... 7 7 7 8 7 10 12 9
General and
administrative........ 23 22 22 29 23 21 20 28
---- ---- ---- ---- ---- ---- ---- ----
Total operating
expenses............ 66 62 62 67 61 59 62 78
---- ---- ---- ---- ---- ---- ---- ----
Loss from operations... (19) (8) (10) (14) (5) 0 (6) (29)
Other expense, net..... (4) (4) (2) (0) (2) (2) (1) (2)
---- ---- ---- ---- ---- ---- ---- ----
Net loss................ (23)% (12)% (12)% (14)% (7)% (2)% (7)% (31)%
==== ==== ==== ==== ==== ==== ==== ====

In the fourth quarter of 1998, gross profit declined due to increased
expenses incurred in connection with our geographic expansion. In addition,
during the fourth quarter of 1998, sales and marketing and general and
administrative expenses increased as a result of our acquisition of REALBID,
LLC and the amortization of intangibles and deferred compensation. The
quarterly data should be read in conjunction with the financial statements and
the notes to such statements appearing elsewhere in this prospectus. The
operating results for any quarter are not necessarily indicative of the
operating results for any future period and are subject to significant
fluctuation. For further information regarding factors which may impact this
fluctuation, please see "Risk Factors--Our quarterly results of operations
fluctuate which could cause our stock price to fluctuate."

Liquidity And Capital Resources

Since our inception, we have financed our operations primarily through the
private placement of equity securities, borrowing arrangements and through cash
flow from operations. As of December 31, 1998, we had approximately $378,000 in
cash and cash equivalents.

Our capital requirements depend on numerous factors, including our geographic
and product expansions, investments in our Web site and other factors. We have
experienced a substantial increase in our capital expenditures and operating
expenses since our inception consistent with our growth in operations and
staffing, and anticipate that this trend will continue for the foreseeable
future. Additionally, we will continue to evaluate possible strategic
acquisitions, products and technologies, and we plan to expand our sales and
marketing programs and conduct aggressive brand promotions.

In September 1996, we entered into a $3.0 million loan agreement with Venture
Lending & Leasing, Inc. This agreement provides $1.5 million for fixed asset
acquisition and $1.5 million for working capital. Borrowings for fixed asset
acquisition are due 48 months from the date of disbursement. Borrowings for
working capital are due 36 months from the date of disbursement. This loan
agreement requires payment of 8.75% interest during the term and a one-time 15%
interest balloon payment is due upon completion of the term. The notes issued
under this loan agreement are secured by either all of our fixed assets or all
of our business assets. In connection with this loan agreement, we issued to
Venture Lending & Leasing, Inc. a warrant to purchase 213,068 shares of our
common stock on a pre-split basis at an exercise price of $1.76 per share,
subject to antidilutive adjustments. The warrant may be exercised in whole or
in part at any time. The warrant expires on September 24, 2003. At December 31,
1998, $541,750 was available for working capital

and none is available for fixed asset acquisition. The loan agreement
originally was set to expire on June 30, 1998, but was extended during 1998 to
June 30, 1999.

In February 1999, we entered into an additional $1.8 million loan agreement
with Venture Lending & Leasing, Inc. This agreement permits the use of funds
for either fixed asset acquisition or working capital. Under this loan
agreement, borrowings for fixed assets acquisition are due 48 months from the
date of disbursement and borrowings for working capital are due 36 months from
the date of disbursement. This loan agreement requires payment of 8.75%
interest during the term and a one-time 15% interest balloon payment upon
completion of the term. The notes issued under this loan agreement are secured
by either all of our fixed assets or all of our business assets. In connection
with this loan agreement, we issued a warrant to Venture Lending & Leasing,
Inc. This warrant is exercisable for a number of shares determined by a formula
based on whether or not we close a new equity financing prior to August 2000.
The number of warrant shares will be equal to $225,000 divided by the exercise
price, which will be the average of $1.8031 and the per share price of the new
equity financing. If no equity financing occurs by August 2000, the warrant
will be exercisable for 83,338 shares, on a pre-split basis, at $2.70 per
share. The warrant may be exercised in whole or in part at any time. The
warrant expires on February 14, 2008. At February 22, 1999, $1.8 million was
available under this loan agreement. This loan agreement expires on March 31,
2000.

We currently anticipate that the net proceeds of this offering, together with
available funds, will be sufficient to meet our anticipated needs until at
least the end of 2000. We may need to raise additional funds in the future in
order to fund more aggressive brand name promotions or more rapid expansion, to
develop new or enhanced services and products, to respond to competitive
pressures or to acquire complementary businesses, technologies or services.
Additional financing may not be available on terms favorable to us, if at all.
If adequate funds are not available or not available on acceptable terms, we
may be unable to fund our expansion, successfully promote our brand name, take
advantage of unanticipated acquisition opportunities, develop or enhance
services and products or respond to competitive pressures. Any such inability
could have a material adverse effect on our business. Please see "Risk
Factors--We may need additional capital by the end of 2000."

Impact of the Year 2000

We have not fully completed tests to assure that our information technology
systems will function properly in the year 2000. The computer systems and
software programs of many companies and governmental agencies are currently
coded to accept or recognize only two digit entries in the date code field.
These systems may recognize a date using "00" as the year 1900 rather than the
year 2000. As a result, these computer systems and/or software programs may
need to be upgraded to comply with such year 2000 requirements or risk system
failure or miscalculations causing disruptions of normal business activities.

State of Readiness. We have made an assessment of the year 2000 readiness of
our information technology systems, including the hardware and software that
operate our Web site and our non-information technology systems. We are in the
process of a year 2000 simulation to test our information technology systems'
readiness which we expect to complete by the end of June 1999. Based on the
results of our year 2000 simulation test, we intend to revise our proprietary
software as necessary to improve our year 2000 compliance. We believe that
substantially all of our applications, databases and infrastructure are year
2000 compliant. We have been informed by many of our vendors of material
hardware and software components of our information technology systems that
substantially all of the products we use are currently year 2000 compliant. We
will request vendors of the material hardware and software components of our
information technology systems to provide assurances of their year 2000
compliance. We plan to complete this process during the first half of 1999. We
are currently assessing our material non-information technology systems and
will seek assurances of year 2000 compliance from providers of these systems.
Until such testing is complete and such vendors and providers are contacted, we
will not be able to completely evaluate whether our information technology
systems or non-information technology systems will need to be revised or
replaced. If our efforts to address year 2000 risks are not successful, or if
suppliers or other third parties with whom we conduct business do not
successfully address such risks, it could have a material adverse effect on our
business.

Costs. We have identified approximately $300,000 in capital equipment and
software that required upgrading or replacement for year 2000 compliance. We
expended $150,000 prior to December 31, 1998 and still have an outstanding
balance of $150,000 in capital equipment and software to replace. These costs
have been included in our operating capital budget.

Risks. We are not currently aware of any year 2000 compliance problems
relating to our proprietary software or our information technology or non-
information technology systems that would have a material adverse effect on our
business. We cannot assure that we will not discover year 2000 compliance
problems in our proprietary software that will require substantial revisions.
In addition, we cannot assure you that third-party software, hardware or
services incorporated into our material information technology and non-
information technology systems will not need to be revised or replaced, all of
which could be time consuming and expensive. Our failure to fix our proprietary
software or to fix or replace third-party software, hardware or services on a
timely basis could result in lost revenues, increased operating costs, the loss
of customers and other business interruptions, any of which could have a
material adverse effect on our business. Moreover, the failure to adequately
address year 2000 compliance issues in our proprietary software and our
information technology and non-information technology systems could result in
claims of mismanagement, misrepresentation or breach of contract and related
litigation, which could be costly and time-consuming to defend.

In addition, we cannot assure you that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside our control will be year 2000 compliant. The failure by such entities
to be year 2000 compliant could result in a systemic failure beyond our
control, such as a prolonged Internet, telecommunications or electrical
failure, which could prevent us from delivering our Web site, could decrease
the use of the Internet or prevent users from accessing our Web site, which
could have a material adverse effect on our business.

Contingency Plan. In the event that year 2000-related problems materialize,
we have the ability to revert to a set of manual methods previously utilized in
the collection and distribution of data if necessary. We also maintain
relationships with several suppliers of services and products to mitigate the
risks associated with suppliers who are not year 2000 compliant.

Effects of Inflation

Due to relatively low levels of inflation in 1996, 1997 and 1998, inflation
has not had a significant effect on our results of operations since our
inception.

Impact of Recently Issued Accounting Standards

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS
130). SFAS 130 requires that all components of comprehensive income, including
net income, be reported in financial statements in the period in which they are
recognized. SFAS 130 is effective for fiscal years beginning after December 15,
1997. There was no difference between our net loss and our total comprehensive
loss for the years ended December 31, 1996, 1997 and 1998.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures About Segments of an
Enterprise and Related Information (SFAS 131). SFAS 131 replaces SFAS 14,
Financial Reporting for Segments of a Business Enterprise and changes the way
the public companies report segment information. SFAS 131 is effective for
fiscal years beginning after December 15, 1997 and has been adopted by us for
the year ending December 31, 1998.

application development stage and amortize them over the software's estimated
useful life. SOP 98-1 is effective for fiscal years beginning after December
15, 1998. We are currently evaluating the impact of SOP 98-1 on our financial
statements and related disclosures.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5 Reporting for the Costs of Start-Up Activities (SOP
98-5). This standard requires companies to expense the cost of start-up
activities and organization costs as incurred. In general, SOP 98-5 is
effective for fiscal years beginning after December 15, 1998. We believe the
adoption of SOP 98-5 will not have a material impact on our results of
operations.

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including derivative
instruments embedded in other contracts, and for hedging activities. SFAS No.
133 is effective for all fiscal quarters of fiscal years beginning after June
15, 1999. The statement is not expected to affect us because we currently do
not hold any derivative instruments or conduct any hedging activities.

Business

This Prospectus may contain forward-looking statements that involve risks and
uncertainties. Our actual results may differ significantly from the results
discussed in any forward-looking statements. Factors that may cause such a
difference include, but are not limited to, those discussed in "Risk Factors."

Overview

We are a leading national provider of confirmed commercial real estate sales
information both offline and on the Internet. We have also recently begun
leveraging our extensive database to facilitate commercial real estate
transactions on the Internet. Over the last 17 years, we have developed a
highly evolved data collection and confirmation system to provide information
on commercial real estate properties. We believe that we are well-positioned to
leverage our extensive database of information to support brokers, lenders and
insurers in their sales, finance and insurance transactions involving
commercial real estate on the Internet.

Industry Background

Growth of the Internet

The Internet has rapidly become a significant global medium for
communications, information and commerce. The Internet enables millions of
people worldwide to share information, communicate and conduct business
electronically. International Data Corporation estimates that the number of
Internet users worldwide exceeded 95 million by the end of 1998, will exceed
170 million by the end of 2000 and will grow to over 319 million by the end of
2002. Growth in Internet usage has been fueled by a number of factors,
including:

. a large and growing base of personal computers in the workplace and
home;

. advances in the performance of personal computers and modems;

. improvements in network systems and infrastructure;

. more readily available and lower cost access to the Internet;

. increased awareness of the Internet among businesses and consumers;

. increased volume of information and services offered on the Internet;
and

. reduced security risks involved in conducting transactions on the
Internet.

Growth in Internet usage is expected to continue as new technologies, such as
multimedia capabilities, are developed and adopted, as Internet access and
bandwidth increases, and as Internet content improves and becomes more dynamic.

The Internet as a New Medium for Business-to-Business Commerce

As the Internet has become more accessible and widely used, it has emerged as
a primary business channel alongside the telephone, paper-based communication
and face-to-face interaction. Forrester Research estimates that businesses
bought and sold $43 billion in goods over the Internet last year, as opposed to
$8 billion bought by consumers. In addition, they predict that by the year
2003, more than 90% of the projected $1.4 trillion of Internet commerce will be
business-to-business related. The Internet allows online providers to
efficiently distribute information with the potential for less infrastructure
and overhead and greater economies of scale. It also offers customers diverse
options and unparalleled convenience.

The Commercial Real Estate Industry

The commercial real estate industry is large and fragmented. The Federal
Reserve has estimated the value of commercial real estate property in the
United States to be approximately $3.3 trillion. We estimate that property
valued at approximately $285 billion changed ownership in 1998. However, we
estimate that no commercial real estate brokerage firm was involved in more
than 5% of the value of these transactions. In addition, approximately $200
billion of loans covering commercial real estate properties were written in
1998, approximately half of which were refinancing transactions.

Comprehensive and reliable information is a critical component of virtually
all commercial real estate transactions. Prior to the availability of confirmed
commercial real estate sales information from a centralized source, industry
professionals either maintained their own research departments to catalog
comparable sales, market statistics and other property-specific information or
aggregated such information, to the limited extent available, from multiple
third parties. These firms have also traditionally spent significant resources
adapting or developing software to analyze such information. These methods have
resulted in high internal costs and nonstandard data with varying degrees of
comprehensiveness and accuracy.

In addition, there are currently no comprehensive, standardized transaction
support services that efficiently identify properties and bring together
brokers, lenders and insurers in commercial real estate transactions. The lack
of such services results in higher internal costs and lost opportunities for
brokers, buyers, lenders and insurers.

The COMPS.COM Solution

The vast information sharing and communications power of the Internet creates
an opportunity to improve upon the inefficiencies in conducting commercial real
estate transactions. We provide comprehensive and reliable information
services, and transaction support products that save industry professionals
both time and money. We believe we have established the foundation to be the
trusted online resource linking commercial real estate brokers, lenders,
appraisers, insurers and other professionals. To date, we have:

. Developed a comprehensive and standardized proprietary database. Over the
last 17 years, we have developed a highly evolved data collection and
confirmation system to provide information on commercial real estate
properties. This system is based on a unique combination of our highly trained
research staff of over 155 researchers, management practices, proprietary
software systems, and computer and communications hardware. To build each of
our transaction records, our researchers conduct from 25 to 30 collection and
confirmation procedures. We generally confirm property sales over $250,000
within the markets that we cover. Since our inception, we have created a
historical database of approximately 400,000 commercial real estate
transactions. As a result, we believe that the cost, time and effort involved
in replicating our commercial real estate property database should deter
competitors from entering into this market and create a significant barrier to
entry.

. Migrated our database to the Internet. We started out as a paper-based
confirmed commercial real estate transaction information service in January
1982. In October 1996, we began to offer our customers the service on CD-ROM,
allowing for the computerized manipulation of data to provide more customized
reports. In January 1998, we began to offer this service on the Internet. This
allows our customers to receive updated commercial real estate transaction
information more frequently and analyze the data more quickly and easily. On
the date of this prospectus, approximately 27% of our customers use the
Internet along with traditional methods when obtaining our services, and
approximately 11% use our Internet services exclusively.

. Established an Internet-based listing-broker/buyer matching service. We
acquired REALBID, LLC in November 1998 in order to offer a listing-broker/buyer
matching service to commercial listing-brokers for properties with values
exceeding $5 million. As part of the REALBID service, we develop a specific Web
site for each listed property using the listing-brokers' summary description.
This summary generally includes property information, maps, site plans,
pictures, summary financials and broker contact information and also includes a
confidentiality agreement. Our comprehensive database allows us to identify and
refer potential buyers of listed properties to brokers on REALBID and actively
market these properties for brokers using our Internet-based new listing
notification system. Our database includes the specific investment criteria of
pension fund managers, real estate investment trusts, opportunistic funds,
private investors, insurance companies and other potential buyers. In 1998,
REALBID was used to support approximately $3.8 billion in commercial real
estate transactions.

. Introduced a commercial real estate listing service. In January 1999, we
introduced our proprietary commercial real estate property listing service,
DealPoint, for San Diego County. DealPoint is our

Internet-based, commercial listing service enabling brokers to market their
properties on the Internet. This form of marketing provides the commercial
property broker with an opportunity to increase a property's exposure to
prospective buyers and their brokers. Posting may be accomplished by the
broker's remote entry or by sending the property information to us for manual
entry. During January 1999, more than 500 for-sale commercial properties were
posted on the system by brokers in San Diego.

Our Business Strategy

Our objective is to be the trusted online resource linking commercial real
estate brokers, lenders, appraisers, insurers and other professionals by
efficiently distributing market information on the Internet. As a resource of
commercial real estate market information, we expect to have brokers, lenders,
insurers, appraisers and others come to our Web site to transact their business
because we can save them time and money. Our business strategy includes the
following key elements:

. Continue to enhance our comprehensive historical database of commercial
real estate transactions. We intend to maintain our position as a leading
provider of comprehensive, reliable commercial real estate transaction
information. We expect to do this by: (1) expanding our information gathering
processes across multiple services and products; (2) using technology to
further automate the data collection process; (3) integrating acquired
databases into our standardized format; and (4) continually improving our data
collection and error detection methods. We believe that these efforts will
permit us to build upon our current comprehensive historical database of
commercial real estate transactions and maintain the competitive advantages it
affords us in our industry.

. Expand our online listing-broker/buyer matching network. We intend to
expand and enhance the listing-broker/buyer matching services of REALBID by
further integrating our REALBID service into our proprietary database. In
addition, we plan to increase the number of commercial properties serviced
through the REALBID database by including commercial properties with sale
prices as low as $1 million. Our comprehensive investor database will allow
brokers to more easily identify prospective buyers and our Internet-based new
listing notification system allows brokers to more efficiently market
commercial properties to such buyers.

. Create a comprehensive online national listing service for commercial real
estate. We intend to expand the geographic coverage of our online listing
service, DealPoint, by soliciting commercial real estate listings throughout
the United States. We expect these efforts to result in a comprehensive online
national listing service for commercial real estate which will enhance our role
in the commercial real estate transaction process.

. Enhance our services and products to facilitate online exchange of key
commercial real estate market information. We believe that our Web site has the
potential to be an online forum for commercial real estate transactions. We
believe that commercial real estate industry professionals will be drawn to our
Web site because we provide the information necessary to complete transactions.
We initially plan to expand our existing services to match lenders, mortgage
bankers and brokers with borrowers, followed by matching insurers and agents
with property owners and lenders. Combined with our REALBID service, these
expanded services will allow buyers and, where applicable, existing property
owners, to find the appropriate broker-listed property and arrange financing
and insurance coverage for that property from a single source.

. Expand into new geographic markets. Since 1995, we have expanded our
geographic coverage by establishing commercial real estate information services
in 19 new markets through internal expansion and three additional markets
through acquisitions. We will continue to establish footholds in new geographic
markets by incorporating the commercial real estate sales information obtained
through internal development or acquisitions into our database. We plan to
expand into new geographic markets using our existing relationships with
national customers to gain market acceptance. This strategy will allow us to
add new customers and to more effectively service our existing customers,
particularly those with national or regional focus.

. Continue to build our brand name. We believe that commercial real estate
professionals in the markets we serve associate the COMPS brand name with
comprehensive, accurate and standardized commercial real estate sales
information. We intend to continue building and strengthening our brand name
by: (1) maintaining a strong commitment to quality, accuracy and timeliness;
(2) increasing our marketing and advertising activities; and (3) continuing to
expand our presence on the Internet. We expect these efforts to maintain and
build upon the COMPS brand name for quality commercial real estate sales
information.

Our Proprietary Database

Our proprietary database of confirmed commercial real estate sales
transactions is the result of 17 years of research. We believe it to be the
largest and most sophisticated confirmed sales database covering all categories
of commercial real estate properties available today. In 1998, we researched
nearly 46,000 transactions totaling approximately $105 billion.

Our database is an online information system offering full-color building
photographs as well as more than 200 inter-related data fields of information.
These data fields include the following current information and key value
indicators:

. buyers . income and expense information
. sellers . building characteristics and
. brokerage companies condition
. agents . prices per square foot
. lenders and mortgages . prices per unit
. sales prices . capitalization rates
. seller financing . gross income multipliers
. property uses or property
descriptions

Our database covers approximately 400,000 transactions totaling over $466
billion, including 1.8 million acres of land transactions, over 780,000 buyer
and seller records and over 300,000 brokerage and agent records.

We have developed a highly evolved data collection and confirmation system.
This system is based on a unique combination of our highly trained research
staff of over 155 researchers supported by management, computer and
communications hardware and software systems. Many of our researchers have
prior experience in the commercial real estate industry. Our research process
includes from 25 to 30 collection and confirmation procedures on every
property. We currently cover nine property types: office, industrial, retail,
specialty, multi-family, mobile home, residential land, commercial land and
industrial land. These property types are further categorized by nearly 150
specific use codes. We also research properties to see if they have one of over
45 detrimental conditions, such as asbestos or earthquake damage. Our
proprietary software utilizes over 38 search categories to allow users to
search the database efficiently and quickly. This software enables us to
provide commercial real estate professionals with specific detailed and
comprehensive coverage of virtually every commercial property sale in excess of
$250,000 in most of our covered markets.

We research real property transfers throughout the country to identify recent
commercial property transactions. Typically, we review multiple sources of
commercial real estate property information to identify transactions. Once a
potential transaction is identified, in order to increase accuracy, our
researchers inspect county courthouse records and extract pertinent information
directly from the recorded deed into our database. Our researchers match the
legal description of the deed with a tax or plat map and then proceed to
perform a site inspection on the commercial properties, including land. Our
site inspections consist of photographing the building, measuring the building
(if necessary), counting parking spaces, assessing property condition and
construction and gathering tenant information. Our researchers then continue to
ensure the accuracy of our sales data by interviewing buyers, sellers and
brokers to confirm that the information we have collected is accurate and to
gather additional data pertinent to the property and transaction. Through the
telephone confirmation process, we are able to obtain additional property
specific details including conditions of the sale, income and expense data and
other information not readily available through public records or other
traditional data sources.

Our Services and Products

We have developed advanced information services and products utilizing our
proprietary database. In addition, we have acquired and further developed
Internet transaction support products. These products use sophisticated
Windows-based programs with Internet connectivity to access our database and
present information in a variety of formats. Our services are used by brokers,
lenders, appraisers, property owners, international accounting firms, tax
appeal professionals, public sector agencies, investment banks and many others
interested in the valuation of commercial real estate.

Internet-Related

Information Services

Our information services use real-time Internet connectivity for accessing,
viewing and reporting information from our proprietary database of confirmed
commercial real estate sales transactions. The database contains over 400,000
confirmed sales comparable records in 35 of the top 74 markets in the U.S.

. E-COMPS. E-COMPS, introduced in January 1998, provides a comprehensive
search engine to access and search our proprietary database. Typically,
commercial real estate professionals require the review of between four
and seven sales comparable transactions to support a valuation decision.
E-COMPS allows the customer to enter multiple search parameters,
including location, property type, square footage, price range and
number of units. Customers receive a summary report of all relevant
properties in our database, including photographs. Customers may also
choose to receive more detailed reports.

. Pipeline. Pipeline, introduced in September 1998, allows registered
customers to search, retrieve, view and print reports of properties in
our work-in-process research database which includes unconfirmed and
non-arms-length market sales transactions. Customers interested in
knowing what the total market consists of, in addition to the confirmed
data, use this product.

. Spectrum. Spectrum, introduced in August 1998, allows our customers to
integrate their data with our proprietary database information,
including our sales comparables and for-sale listings. The customer may
use the system as an extranet with all of their user locations linked
through the Internet to our databases and their internal data housed at
our facilities. Spectrum includes easy-to-use query and report writing
functions including trend reporting and export features. Spectrum also
provides its subscribers access to PRO/FILES property reports. These
customized property reports can include confirmed sales and lease
comparables, property inspection, demographics and photographs.

Transaction Support Products

Our Internet-based transaction support products enhance the productivity of
industry professionals by deploying information and tools necessary to support
the sale, financing and insuring of commercial real estate.

. REALBID. REALBID, introduced in 1997 and acquired by us in November
1998, allows our customers to view properties using a listing-broker's
summary description. We then identify investors and match them with the
property using REALBID's buyer profile database. Commercial listing-
brokers can use REALBID as a marketing tool to quickly identify,
contact, inform and capture potential investors by notifying them of new
listings by e-mail or facsimile. These brokers can also use REALBID to
help organize competitive, efficient and orderly sales by leveraging the
real-time nature of the Internet. We offer REALBID posting and
broadcasting at a fixed fee per property. In 1998, REALBID supported
approximately $3.0 billion in commercial real estate transactions.

. DealPoint. DealPoint, introduced in January 1999, is our free commercial
listing service whereby brokers can effectively market properties on the
Internet. This service is currently only available in San Diego County,
and we expect to roll it out nationally by the end of 1999 with
extensive in-depth listings by the end of 2000. Brokers and prospective
buyers use DealPoint to identify the properties for sale that meet their
investment needs by selecting relevant search criteria and then viewing
selected property information.

Products in Development

We are currently developing a product that will facilitate the financing of
commercial properties by efficiently matching prospective borrowers' loan
requirements with lenders' loan products. Prospective borrowers will be able to
complete and submit comprehensive applications online to those lenders of
choice. We plan to develop products that will facilitate other aspects of
commercial real estate transactions, for example the matching of insurers with
property owners and lenders.

Non-Internet Related

We also offer services that do not rely on the Internet as a means of
delivery. While these services accounted for more than 90% of our revenue in
1998, we expect the percentage of our revenues represented by these products to
diminish as more of our customers transition to using our services and products
on the Internet.

. COMPS Reports. COMPS Reports, introduced in 1982, is a paper-based
service allowing customers to receive confirmed sales comparable
reports.

. CallCOMPS. CallCOMPS, introduced in 1986, is our phone service allowing
customers to license confirmed sales comparable reports on a per use
basis.

. COMPSLink Windows. COMPSLink Windows, introduced in 1996, is a desktop
product which provides access to our proprietary database through data
diskette or CD-ROM. COMPSLink Windows allowed us to migrate the customer
base from paper to electronic media during 1997 and 1998.

Our Customers

As of the end of 1998, we had over 4,000 customers, none of which accounted
for more than 5% of our revenue. In 1998, our customers included:

Arthur Andersen, LLP Grubb & Ellis
Bank of America KPMG Peat Marwick, LLP
Bankers Trust Co. Los Angeles County Assessor
CB Richard Ellis Marcus & Millichap
Cushman & Wakefield PricewaterhouseCoopers
Deloitte & Touche, LLP Trammell Crow Co.
Fannie Mae Union Pacific Corporation
Federal Deposit Insurance Corporation Washington Mutual
First Nationwide Bank Wells Fargo Bank
GMAC World Savings and Loan

Our Sales and Marketing Efforts

Sales

Our sales efforts have been designed to address the specific market needs of
our customers and prospective customers. We use a variety of tools and
techniques including:

. face-to-face sales calls;

. telesales;

. direct mail;

. seminar marketing; and

. contact management software to build a centralized database which is
regularly synchronized.

Our sales force focuses on subscription services for all products. There are
three teams involved in our sales efforts:

. Major Account Team. Our major account team is responsible for managing our
relationships with a select number of customers and prospects meeting certain
pre-defined criteria. Major account representatives are strategically located
in key cities across the country in order to serve the needs of our largest and
most strategic accounts. Account assignments for this group include many of the
country's key brokers, lenders, fee appraisers, tax appeal professionals and
governmental entities.

. Field Sales Team. We deploy our field sales team in strategic locations
across the country in order to meet the specific needs of a local market. Field
sales representatives are responsible for managing accounts and prospects in a
specific geographic area.

. Telesales Team. Our telesales team is located in San Diego and assumes the
field sales role in our established western markets. In this capacity, they are
also responsible for building and maintaining relationships with a wide variety
of subscription customers within a specific geographic area. Additionally, this
team provides telephone prospecting and sales support for all markets
nationally.

When we enter a new market we build a database of key prospects and then
execute a market opening campaign. Expansion into new markets is coordinated
among all sales teams. Prospects are notified via direct mail and fax followed
by a telesales blitz designed to qualify and invite prospects to a seminar
launching sales in the market. The seminar is followed by face-to-face sales
calls. This local activity is leveraged by agreements with national customers
which have been put in place by the major accounts team. The process of opening
new markets has been refined as we have expanded and is designed to achieve the
fastest possible sales growth.

Marketing

We use a multi-faceted marketing strategy, leveraging our own research to
effectively target both individual professionals and organizations. We employ a
combination of personal selling, telesales, online and off-line advertising,
direct mail, fax and e-mail programs, public relations and industry trade shows
to promote product sales.

Off-line advertising is focused on print media specifically concerned with
commercial real estate. Print advertising is used to build corporate image,
promote new products and announce new geographic coverage. Some vehicles
include Commercial Property News, National Real Estate Investor and Real Estate
Forum. We use regional real estate and business journals to introduce products
and new markets.

We also use direct mail, fax and e-mail programs to support new products and
market expansion. Through our prospect and customer database, we deliver a
highly tailored message directly to those most likely to buy. Mail is used when
the message is detailed and color can be used to effectively illustrate the
marketing message. E-mail and fax are used when communication needs to be swift
and when the message will not suffer because of the lack of resolution or
graphics. We augment our database by licensing or purchasing lists and other
sources to achieve the most comprehensive database of all users of commercial
real estate information and services. In all direct marketing efforts, the Web
site is utilized as a marketing tool, to help explain our services.

In order to market our Web site, www.comps.com, we:

. market to industry associations;

. establish relationships with commercial real estate Web sites;

. use online advertising to drive traffic to our Web site; and

. provide discounts and limited free information to entice potential
customers to our Web site.

Public relations efforts are both national and regional. We use traditional
releases to communicate news regarding our company and to maintain brand
awareness. We also use public relations as a tool to educate editors on the
type of data we offer and are regarded as an information source by editors.
Speaking engagements are also used to communicate the expertise of our staff
and quality of our data.

Attendance at industry tradeshows and seminars reinforces relationships with
our core user groups. We also host our own seminars to promote good use of our
products and provide valuable customer service. These venues allow for the in-
depth demonstration of our products to highly motivated, captive audiences.

Our Markets

Our database currently covers the following 35 markets, which represent 102
counties and 48 of the 100 largest U.S. cities:

Atlanta Jacksonville Orange County, CA San Francisco
Austin Las Vegas Orlando San Jose
Baltimore Los Angeles Palm Beach County Seattle
Boston Marin-North SF Philadelphia Stockton/Modesto,
Chicago Bay Area Phoenix CA
Colorado Miami Portland Tampa/Saint
Springs New York City- Riverside/San Petersburg
Dallas/Fort Manhattan Bernardino, CA Tucson
Worth Newark Sacramento Ventura, CA
Denver Oakland San Diego Washington,
Fort Lauderdale D.C./
(Broward No. Virginia
County)
Fresno

Infrastructure, Operations and Technology

Our Web site is hosted by servers located at our facilities in San Diego,
California, and is also hosted by UUNET and RealPage. All data and applications
are stored and executed from the facilities in San Diego, California. We
maintain multiple Internet servers, which run Microsoft Windows NT operating
systems and use Microsoft Internet Information Server. We maintain Internet
access through UUNET and VERIO. We maintain multiple redundant high-speed
connections with each Internet service provider. Compaq multi-processor servers
are used to host our Web site.

We configure our servers to minimize downtime associated with hardware
failures. Additionally, all Internet and database servers have active matching
hardware configurations for redundancy. Backups of all servers are run daily
and sent weekly to an off-site data storage facility. All servers maintained in
our San Diego, California offices are kept in a secured facility with central
air conditioning and a centralized UPS system. All Internet traffic is logged
and filtered by high performance dedicated firewall servers. An anti-virus
scanning solution is used on all computer systems and servers to protect
against computer viruses and monitor inbound and outbound e-mail. Nonetheless,
our operations are dependent on our ability to protect our facilities and
equipment against damage from fire, earthquakes, power loss, water damage,
telecommunications failures, vandalism, computer viruses, hacker attacks and
other malicious acts, and similar unexpected material adverse events. For
further information regarding these issues, please see "Risk Factors--Increased
users straining our systems and other systems malfunctions could materially
adversely affect our business."

We have developed a proprietary custom client/server database application
used to capture the revenue generated by our transaction and subscription-based
business. The system maintains our list of customers and products and includes
an installment-billing module to provide the billing flexibility required by
our customers. The resulting revenue transaction details are summarized and fed
into our accounting system.

Rapidly changing technology, evolving standards, frequent new and upgraded
products, and rapid expansion characterize our business. To be successful, we
must adapt to our market by continually improving the performance, features,
and reliability of our services.

Management Systems

As we enter new markets, we must integrate new and existing data into our
databases. Additionally, we must integrate automated and non-automated controls
to manage our data collection process to ensure data integrity. Automated data
validation controls are used in both the initial research worksheet application
and the final data collection application. These data validation controls
ensure data integrity by checking against a valid range of values as soon as
data is entered into input screens. These controls eliminate erroneous data in
critical fields, such as recorded date, sale price and appraisal values. The
controls also ensure the use of industry standard terminology. A final edit
check feature ensures the information entered is logically related.

Computer and Communications Hardware

We maintain 24 Novell and/or Windows NT servers to support our corporate
databases, internal applications and Internet services. We also maintain a
national high speed internal frame relay network of high speed access to allow
remote researchers real-time access to our databases, internal applications and
Internet services. All servers are protected by secured firewalls. We also
maintain backup drive arrays and inventories of spare parts to minimize
potential system downtime. Finally, we store full data backups of servers off-
site.

We currently keep our main property inventory related databases on Compaq
enterprise servers running Microsoft Windows NT. The database management
software is Microsoft Server. Databases are replicated on to additional Compaq
enterprise servers that are located outside the network firewall. This
configuration allows users of our applications to access relevant data without
gaining access to internal network systems. We monitor application load
balancing across servers and maintain up-to-date copies of primary databases
for backup.

Software Systems

Our software systems have kept pace with the evolution of technology. These
systems currently use client server architecture to optimize management of our
internal data collection. The custom client server applications facilitate the
data collection process. The custom client server applications span the entire
data collection process, from initial research to identification of potential
records through the collection of verified and value-added information. Our
software enables us to continuously enhance the process through: productivity,
attaining superior data quality and maintaining data integrity. Additionally,
these custom applications allow publication of finalized transactions meeting
quality and editing controls.

Competition

The market for information systems and services is generally competitive and
rapidly changing. The market for Internet services and providers is relatively
new, intensely competitive and rapidly changing. In the commercial real estate
industry, the principal competitive factors are:

. quality and depth of the underlying databases;

. the proprietary nature of methodologies, databases and technical
resources;

. the usefulness of the data and reports generated by the software;

. effectiveness of marketing and sales efforts;

. customer service and support;

. compatibility with the customer's existing information systems;

. vendor reputation;

. price;

. timeliness; and

. brand loyalty among customers and individual users.

We compete directly and indirectly for customers and content providers with
the following categories of companies:

. publishers and distributors of traditional off-line information services,
such as national provider, Realty Information Group, regional providers such as
Realty Information Tracking Services, Inc., Databank, Dressco, Inc., Revac,
Baca Landata and several smaller local providers, many of which have or may
establish Web sites;

. online services or Web sites targeted to commercial real estate brokers,
buyers and sellers of commercial real estate properties, insurance companies,
mortgage brokers and lenders, such as LoopNet, Inc., Commrex, Commercial
Search, American Real Estate Exchange, Association of Industrial Realtors,
Property Line, CLOAN, Datamerge, A Big Deal.com, Property First, First Realty
Advisors, and numerous small regional and local sites; and

. public record providers such as Experian, Acxiom DataQuick and
TransAmerica, though many of our customers view these public record providers
as complementary to our services and often subscribe to one of these services
as well as our service.

We believe our proprietary database and content compete favorably with our
competitors. However, many of our existing competitors, as well as a number of
potential new competitors, have longer operating histories in the Internet
market, greater name recognition, larger customer bases, greater user traffic
and significantly greater financial, technical and marketing resources. Such
competitors may be able to undertake more extensive marketing campaigns, adopt
more aggressive pricing policies, make more attractive offers to potential
employees, subscribers, distribution partners and content providers and may be
able to respond more quickly to new or emerging technologies and changes in
Internet user requirements. For further information regarding potential
competition, please see "Risk Factors--Intense competition may render our
services and products uncompetitive or obsolete."

Intellectual Property

We rely primarily on a combination of copyrights, trademarks, trade secret
laws, our subscriber agreements and restrictions on disclosure to protect our
intellectual property, such as our proprietary database, software, trademarks,
trade names and trade secrets. We enter into agreements with our customers that
grant our customers revocable, non-transferable, non-exclusive licenses to use
the information and the software on our Web site. These agreements also contain
confidentiality provisions and other provisions prohibiting our customers from
reproducing the information or software they access on our Web site. We also
enter into confidentiality agreements with our employees and consultants, and
seek to control access to and distribution of our other proprietary
information. Despite these precautions, it may be possible for a third party to
copy or otherwise obtain and use the content of our Web site or our other
intellectual property without authorization. There can be no assurance that
these precautions will prevent misappropriation, infringement or other
violations of our intellectual property. A failure to protect our intellectual
property in a meaningful manner could have a material adverse effect on our
business. In addition, we may need to engage in litigation in order to enforce
our intellectual property rights in the future or to determine the validity and
scope of the proprietary rights of others. Such litigation could result in
substantial costs and diversion of management and other resources, either of
which could have a material adverse effect on our business.

We also license certain data and content from certain public record providers
such as Experian, Acxiom DataQuick and TransAmerica. Experian has agreed to
publish a subset of our data as a stand-alone product and to make such data
available through its online services. Acxiom DataQuick has granted us a non-
exclusive, non-transferable license to their real property ownership data
conveyed on magnetic tape or by electronic transmission through any online
system. TransAmerica granted us a limited non-exclusive, non-transferable
license to use its Metroscan CD-Rom database for certain localities, together
with its Metroscan software.

We believe that factors such as technical and creative skills of our
personnel and ongoing reliable product maintenance and support are critical
factors in establishing and maintaining our leadership position in the
commercial real estate industry due to the rapid pace of innovation within the
software and Internet industries.

Employees

As of January 31, 1999, we had approximately 246 full-time employees and
approximately 50 part-time employees. We have never had a work stoppage and, as
of the date of this prospectus, no personnel are represented under collective
bargaining agreements. We consider our employee relations to be good. However,
for further information regarding employees, please see "Risk Factors--If we
are unable to retain key personnel or attract new personnel, it could have a
material adverse effect on our business."

Facilities

Our principal administrative, sales, marketing, research and product
development facilities are located in approximately 33,217 square feet of
office space in San Diego, California. We lease our facility from a limited
partnership whose general partner is a company owned by Mr. Crane, our
President, Chief Executive Officer and Chairman of the Board. In addition, Mr.
Beasley, one of our directors, is a limited partner of the limited partnership
from which we lease our facilities. Our lease is for a five-year term
commencing in February 1999 with five two-year extension options. For further
information regarding this transaction, please see "Certain Relationships and
Related Transactions." We also rent office space in Burlingame, California,
Phoenix, Arizona, and Vienna, Virginia. We believe our current facilities will
be adequate to meet our needs for the foreseeable future. However, please see
"Risk Factors--Increased users straining our systems and other systems
malfunctions could materially adversely affect our business," for further
information regarding our facilities.

Legal Proceedings

As of the date of this prospectus, we are not a party to any material legal
proceedings.

Management

Executive Officers and Directors

Set forth below is the name, age, position and a brief account of the
business experience of each of our executive officers and directors.

Name Age Position
---------------------------- --- --------------------------------------------

Christopher A. Crane........ 47 Chairman of the Board, Chief Executive
Officer and President
Emmett R. DeMoss, Jr. ...... 62 Vice President and Chairman of REALBID
Division
Walter W. Papciak........... 60 Executive Vice President of Sales, Marketing
and Product Development
Michael Arabe............... 52 Senior Vice President of Sales
Craig S. Farrington......... 40 Vice President of Product Marketing and
Development
Karen Goodrum............... 41 Vice President of Finance and Administration
and Chief Financial Officer and Secretary
Joseph A. Mannina........... 34 Vice President of Operations
Robert C. Beasley (2)....... 61 Director
Gregory M. Avis (1)(2)...... 40 Director
Kenneth F. Potashner 41 Director
(1)(2).....................

- --------
(1) Member of the compensation committee.
(2) Member of the audit committee.

Christopher A. Crane has served as our President, Chief Executive Officer and
Chairman of the Board since August 1992. Prior to joining us, Mr. Crane served
as Group President and a director of Nitches, Inc., an apparel company, and as
Vice President of Corporate Development for Oster Communications, Inc., an
international financial database publishing company. Mr. Crane received his
B.S. in finance summa cum laude from Boston College and his M.B.A. from Harvard
University.

Emmett R. DeMoss, Jr. has served as our Vice President and Chairman of our
REALBID division since November 1998. In October 1994, Mr. DeMoss co-founded
REALBID, LLC, an Internet marketing services company specializing in
transactional support of high-end commercial property sales, and from June 1997
until November 1998, Mr. DeMoss served as a Manager of REALBID, LLC. From
October 1993 until September 1994, Mr. DeMoss served as President of Ironstone
Company, a real estate tax appeal service. Mr. DeMoss previously served for
over 10 years in a number of senior executive positions with Grubb & Ellis, a
real estate brokerage and property management firm, including Executive Vice
President, Chief Operating Officer, Senior Vice President, Chief Financial
Officer and as a director. Mr. DeMoss received his B.S. in engineering from
Princeton University and his M.B.A. from Stanford Business School.

Walter W. Papciak has served as our Executive Vice President of Sales,
Marketing and Product Development since August 1995. From October 1994 until
July 1995 Mr. Papciak served as Executive Vice President of QED, Inc., an
education database company. From May 1994 until September 1994, Mr. Papciak
worked as a consultant on various internet and database projects. From January
1985 until April 1994, Mr. Papciak was Senior Vice President of Computer
Intelligence, the computer and communications industry research and market
information division of Ziff-Davis. Mr. Papciak received his B.S. in physics
and his M.B.A. in information systems from Wayne State University.

Michael Arabe has been one of our senior executives since 1989 and has served
as our Senior Vice President of Sales since January 1996. Prior to joining us,
Mr. Arabe was a sales executive with Celluland, Inc. Mr. Arabe received his
B.S. in economics from Louisiana State University.

Craig S. Farrington has served as our Vice President of Product Marketing and
Development since September 1996 . Mr. Farrington previously served as Vice
President of our CallCOMPS division from January 1993 until August 1996 and has
held various other positions with us since 1983. Mr. Farrington received his
B.A. in business and economics from Westmont College.

Karen Goodrum has served as our Vice President of Finance and Administration
since September 1993 and our Chief Financial Officer since January 1997 and our
Secretary since February 1999. Ms. Goodrum previously served as our Vice
President and Controller from October 1988 until August 1993. Ms. Goodrum
received her B.A. in education from the University of Maryland and her M.B.A.
from San Diego State University.

Joseph A. Mannina has served as our Vice President of Operations since August
1998. Mr. Mannina previously served as our Director of East Coast Operations
from January 1994 until July 1998 and has served in various other positions at
COMPS since 1988. Mr. Mannina received his B.S. in economics from the
University of California, Berkeley.

Robert C. Beasley is our founder and has served as as one of our directors
since August 1992. Mr. Beasley previously served as our Secretary from October
1984 until February 1989. Mr. Beasley founded COMPS, Inc., our predecessor, in
December 1981 and served as its President from December 1981 until March 1992.
Mr. Beasley has over 34 years of experience in commercial real estate as a
broker, researcher, lender and developer. Mr. Beasley received his B.A. in
Business Administration from Claremont McKenna College. He also graduated from
Westminster Theological Seminary.

Gregory M. Avis has served as one of our directors since October 1994. Mr.
Avis is currently a Managing General Partner of Summit Partners, a private
venture capital firm, and has held various positions at Summit Partners since
1984. Mr. Avis received his B.A. in political economics cum laude from Williams
College and his M.B.A. with distinction from Harvard Business School.

Kenneth F. Potashner has served as one of our directors since February 1999.
Since November 1998, Mr. Potashner has served as the Chief Executive Officer of
S3 Incorporated, a manufacturer of embedded graphics accelerator chips. Since
April 1996, Mr. Potashner has served as the Chairman of the Board of Directors
of Maxwell Technologies, Inc., a developer of pulse power technologies. From
April 1996 until November 1998, Mr. Potashner served as the President, Chief
Executive Officer and Chief Operating Officer of Maxwell Technologies. From
November 1994 to April 1996, Mr. Potashner served as Executive Vice President
of Operations of Conner Peripherals, a designer and manufacturer of information
storage solution products for computer applications. From March 1991 to October
1994, Mr. Potashner was Vice President of Product Engineering for Quantum
Corporation, a designer and manufacturer of hard drives for computer systems.
Mr. Potashner received his B.S.E.E. from Lafayette College and his M.S.E.E.
from Southern Methodist University.

Other Key Employees

Set forth below is the name, age, position and a brief account of the
business experience of certain of our other key employees.

Name Age Position
--------------------------------- --- ---------------------------------------

Christopher T. Fenton............ 43 Vice President of Corporate Development
Vice President of Commercial Listing
Herbert D. Steele................ 55 Services
Lori Reisinger................... 37 Regional Vice President
Vicki Ridley..................... 35 Regional Vice President
Assistant Vice President of Product
Robert Evatt..................... 42 Development
Assistant Vice President of Information
Donald Ward...................... 37 Technology
Robert A. Potter, Jr. ........... 44 President of REALBID Division

Christopher T. Fenton has served as our Vice President of Corporate
Development since August 1998. Mr. Fenton also served as our Vice President of
Operations from June 1990 until July 1998 and held various other positions with
us since 1985. Mr. Fenton received his B.S. in finance magna cum laude from San
Diego State University.

Herbert D. Steele has served as our Vice President of Commercial Listing
Services since June 1998. From April 1996 until May 1998, Mr. Steele was
Executive Vice President of REAL USA, LLC, an online, subscription-based
national listing service for commercial real estate. From November 1991 until
March 1996, Mr. Steele served as Executive Vice President of The Carlson
Company, an asset and property management company. Prior to that Mr. Steele
founded The Cornerstone Corporation, a commercial mortgage brokerage company,
and served as its President. Mr. Steele received his B.A. in english literature
from Duke University and his M.B.A. from the University of Connecticut.

Lori Reisinger has served as our Regional Vice President in Burlingame,
California since July 1994. Ms. Reisinger has held various positions with us
since 1986. Ms. Reisinger received her B.A. in political science from Southern
Oregon State College.

Vicki Ridley has served as our Regional Vice President in Phoenix, Arizona
since April 1997. Ms. Ridley has held various positions with us since 1987. Ms.
Ridley received her B.A. in finance from Arizona State University.

Robert Evatt has served as our Assistant Vice President of Product
Development since May 1996. From August 1986 until May 1996, Mr. Evatt was
Assistant Vice President of Product Development for Equifax National Decision
Systems, an information company. Mr. Evatt received his B.A. in geography from
the University of Arizona and his M.S. in urban planning from the University of
Washington.

Donald Ward has served as our Assistant Vice President of Information
Technology since March 1997. From October 1993 until March 1997, Mr. Ward was
the director of Technical Services for Equifax National Decision Systems, an
information company. Mr. Ward attended New Mexico State University and the
University of Texas.

Robert A. Potter, Jr. has served as President of our REALBID Division since
we acquired REALBID in November 1998. In June 1992, Mr. Potter co-founded
REALBID, LLC and from June 1992 until November 1998, Mr. Potter served as a
Manager of REALBID, LLC. From January 1990 until December 1996, Mr. Potter
served as Vice President, Pacific Rim Country Manager and Western Regional
Manager for MBIA, a credit enhancement company. Mr. Potter received his B.A. in
history from Santa Clara University and his M.B.A. from the University of
California, Berkeley.

Classes of the Board

Our board currently has four members. Under our bylaws, beginning at our next
annual meeting of stockholders, our board will be divided into two classes of
directors serving staggered two-year terms, with one class of directors to be
elected at each annual meeting of stockholders.

Board Committees

The audit committee of the board of directors was established in November
1997 and reviews, acts on and reports to the board of directors with respect to
various auditing and accounting matters, including the recommendation of our
auditors, the scope of the annual audits, fees to be paid to the auditors, the
performance of our independent auditors and our accounting practices. The
members of the audit committee are Messrs. Avis, Beasley and Potashner.

The compensation committee of the board of directors was established in
November 1994 and recommends, reviews and oversees the salaries, benefits and
stock option plans for our employees, consultants, directors and other
individuals compensated by us. The compensation committee also administers our
compensation plans. The members of the compensation committee are Messrs. Avis
and Potashner.

Director Compensation

We reimburse our directors for the reasonable expenses of attending the
meetings of the board of directors or committees. Under our 1999 stock
incentive plan, each individual who first becomes a non-employee member of the
board of directors at any time after the completion of this offering will
receive an option to purchase 12,000 shares of common stock on a pre-split
basis on the date such individual joins the board of directors, provided such
individual has not previously been employed by us or any parent or subsidiary
corporation. In addition, on the date of each annual stockholders' meeting,
beginning in 2000, each non-employee member of the board of directors will
automatically be granted an option to purchase 2,000 shares of common stock on
a pre-split basis, provided such individual has served as a non-employee member
of the board of directors for at least six months. Please see "--Benefit
Plans."

Upon Mr. Potashner's election to the board in February 1999, our board
granted Mr. Potashner options to purchase 32,500 shares of our common stock, on
a pre-split basis, at an exercise price of $8.20 per share. The options vest on
a yearly basis in equal installments over a four-year period and are
exercisable for a 10 year term following the grant date.

Compensation Committee Interlocks and Insider Participation

Our compensation committee currently consists of Messrs. Avis and Potashner.
Neither member of the compensation committee has been an officer or employee of
us at any time. None of our executive officers serves as a member of the board
of directors or compensation committee of any other company that has one or
more executive officers serving as a member of our board of directors or
compensation committee. Prior to the formation of the compensation committee in
November 1994, the board of directors as a whole made decisions relating to
compensation of our executive officers. Mr. Crane participated in all such
discussions and decisions, except those regarding his own compensation.

Employment and Severance Arrangements

Most of our current employees have entered into agreements with us which
contain certain restrictions and covenants. These provisions include covenants
relating to the protection of our confidential information, the assignment of
inventions, and restrictions on competition and soliciting our clients,
employees, or independent contractors.

In November 1994, we entered into employment agreements with each of Messrs.
Arabe and Farrington, and in August 1995, we entered into an employment
agreement with Mr. Papciak. Under these agreements, each of these employee's
base salary may be increased or decreased from time-to-time, in the sole
discretion of our management. Each such employee is also eligible to receive an
incentive bonus determined by our compensation committee. If any of these
employees is terminated for reasons other than good cause, he will be entitled
to receive six months' salary and a pro-rata portion of his incentive bonus.

In October 1994, we entered into an employment agreement with Mr. Crane.
Under this agreement, Mr. Crane's base salary may be increased or decreased
from time-to-time, in the sole discretion of our compensation committee. Mr.
Crane is also eligible to receive an incentive bonus determined by our
compensation committee. If Mr. Crane's employment is terminated for reasons
other than good cause, he will be entitled to receive eight months' salary and
a pro-rata portion of his incentive bonus.

In November 1994, we entered into an employment with Ms. Goodrum. Under this
agreement, Ms. Goodrum's base salary may be increased or decreased from time-
to-time, at our sole discretion. Ms. Goodrum is also eligible to receive an
incentive bonus. If Ms. Goodrum is terminated for reasons other than good
cause, then she will be entitled to receive six months' salary and a pro-rata
portion of her incentive bonus. We may terminate any of these employees at any
time.

For specific salary information in connection with our employment
arrangements with the above individuals, please see "Management--Executive
Compensation."

In addition, the compensation committee as plan administrator of our 1999
stock incentive plan will have the authority to grant options and to structure
repurchase rights under that plan so that the shares subject to those options
or repurchase rights will immediately vest in connection with a change in
control of us (whether by merger, asset sale, successful tender offer for more
than 50% of the outstanding voting stock or by a change in the majority of the
board by reason of one or more contested elections for board membership), with
such vesting to occur either at the time of such change in control or upon the
subsequent involuntary termination of the individual's service within a
designated period (not to exceed 18 months) following such change in control.

Executive Compensation

The following table sets forth all compensation received during the year
ended December 31, 1998 by our Chief Executive Officer and our other four
executive officers whose salary and bonus exceeded $100,000 in 1998 for
services rendered in all capacities to us during 1998. "All other compensation"
represents matching payments under our 401(k) plan. All share numbers below are
calculated prior to a stock split of to , which is subject to stockholder
approval.

Summary Compensation Table

Long-Term
Annual Compensation
Compensation Awards
---------------- ------------
Shares
Underlying All Other
Name and Principal Position Salary Bonus Options/SARs Compensation
- --------------------------- -------- ------- ------------ ------------

Christopher A. Crane................ $150,000 $65,000 -- $1,500
Chairman of the Board, Chief
Executive Officer
and President
Walter W. Papciak................... 150,000 22,653 9,000 --
Executive Vice President of Sales,
Marketing and
Product Development
Michael Arabe....................... 129,887 5,764 18,000 974
Senior Vice President of Sales
Craig S. Farrington................. 102,240 9,790 -- 850
Vice President of Product Marketing
and Development
Karen Goodrum....................... 81,167 21,500 -- 615
Vice President of Finance and
Administration and
Chief Financial Officer

Option Grants in Last Fiscal Year

The following table sets forth certain information regarding options granted
to our executive officers listed in the Summary Compensation Table during the
fiscal year ended December 31, 1998. We have not granted any stock appreciation
rights.

Each option represents the right to purchase one share of common stock. The
options shown in this table are all incentive stock options granted pursuant to
our stock option plans. The options become exercisable at a rate of 20% per
year. To the extent not already exercisable, certain of these options may also
accelerate and become exercisable in the event of a merger in which we are not
the surviving corporation or upon the sale of substantially all of our assets.
Please see "--Benefit Plans" for more details regarding these options. In the
year ended December 31, 1998, we granted options to purchase an aggregate of
1,559,199 shares of common stock. This share number and all share numbers below
are calculated prior to a stock split of to , which is subject to
stockholder approval.

Option Grants In Last Fiscal Year

Potential Realizable
Individual Grants Value at Assumed
--------------------------------------------- Annual Rates Of
Number of % of Total Stock Price
Securities Options/SARs Appreciation
Underlying Granted to For Option Term
Options/SARs Employees In Exercise Expiration ---------------------
Name Granted 1998 Price Date 5% 10%
- ---- ------------ ------------ -------- ---------- ---------- ----------

Christopher A. Crane.... -- -- -- -- -- --
Walter W. Papciak....... 9,000 * $0.45 02/11/08 $ 2,547 $ 6,455
Michael Arabe........... 18,000 1.15% 1.00 06/29/08 11,320 28,687
Craig S. Farrington..... -- -- -- -- -- --
Karen Goodrum........... -- -- -- -- -- --

- --------
* Less than 1% of total

The potential realizable value at assumed annual rates of stock price
appreciation for the option term represents hypothetical gains that could be
achieved for the respective options if exercised at the end of the option term.
The 5% and 10% assumed annual rates of compounded stock price appreciation are
mandated by rules of the Securities and Exchange Commission and do not
represent our estimate or projection of our future common stock prices. These
amounts represent certain assumed rates of appreciation in the value of our
common stock from the fair market value on the date of grant. Actual gains, if
any, on stock option exercises are dependent on the future performance of the
common stock and overall stock market conditions. The amounts reflected in the
table may not necessarily be achieved.

Aggregated Option Exercises in the Year Ended December 31, 1998 and Year-End
Option Values

The following table sets forth certain information concerning the number and
value of unexercised options held by each of the executive officers listed in
the Summary Compensation Table at December 31, 1998. These option share numbers
reflect the full acceleration of the vesting schedule of certain options upon
completion of this offering and do not reflect a for stock split.
None of these executive officers exercised options to purchase common stock
during the year ended December 31, 1998.

Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
December 31, 1998 at December 31, 1998
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------

Christopher A. Crane........ -- -- -- --
Walter W. Papciak........... 67,200 31,800 $ $
Michael Arabe............... 67,200 40,800
Craig S. Farrington......... 67,200 22,800
Karen Goodrum............... 67,200 22,800

There was no public trading market for the common stock as of December 31,
1998. Accordingly, the value of unexercised in-the-money options listed above
has been calculated on the basis of the assumed initial public offering price
of $ per share, less the applicable exercise price per share,
multiplied by the number of shares underlying such options.

Benefit Plans

1999 Stock Incentive Plan

Our 1999 stock incentive plan is intended to serve as the successor equity
incentive program to our amended and restated stock option plan, 1998
supplemental option plan, and 1998 equity participation plan. Our 1999 stock
incentive plan was adopted by the board and stockholders in February 1999. Our
1999 stock incentive plan will become effective on the date the underwriting
agreement is signed in connection with this offering of our common stock. All
outstanding options under the predecessor plans will be incorporated into our
1999 stock incentive plan on the date this plan is effective, and no further
option grants will be made under the predecessor plans after such date. The
incorporated options will continue to be governed by their existing terms,
unless the plan administrator elects to extend one or more features of our 1999
stock incentive plan to those options. Except as otherwise noted below, the
incorporated options will have substantially the same terms as in effect for
grants made under the discretionary option grant program of our 1999 stock
incentive plan. All share numbers below regarding our 1999 employee stock
purchase plan are calculated prior to a stock split of to , which is
subject to stockholder approval.

An initial reserve of 2,800,000 shares of common stock has been authorized
for issuance under our 1999 stock incentive plan. Such share reserve consists
of (1) approximately the number of shares which will remain available for
issuance under the predecessor plans on the date our 1999 stock incentive plan
becomes effective, including the shares subject to outstanding options
thereunder, plus (2) an additional increase of approximately 51,417 shares. The
number of shares of common stock reserved for issuance under our 1999 stock
incentive plan will automatically increase on the first trading day in January
each calendar year, beginning in calendar year 2000, by an amount equal to 2.5%
of the total number of shares of common stock outstanding on the last trading
day in December of the preceding calendar year, but in no event will any such
annual increase exceed 500,000 shares. In addition, no participant in our 1999
stock incentive plan may be granted stock options, separately exercisable stock
appreciation rights and direct stock issuances for more than 700,000 shares of
common stock in the aggregate per calendar year.

Our 1999 stock incentive plan is divided into five separate components: (1)
the discretionary option grant program under which eligible individuals in our
employ or service (including officers, non-employee board members and
consultants) may, at the discretion of the plan administrator, be granted
options to purchase shares of common stock at an exercise price not less than
100% of the fair market value of those shares on the

grant date, (2) the stock issuance program under which such individuals may, in
the plan administrator's discretion, be issued shares of common stock directly,
through the purchase of such shares at a price not less than 100% of their fair
market value at the time of issuance or as a bonus tied to the performance of
services, (3) the salary investment option grant program which may, at the plan
administrator's sole discretion, be activated for one or more calendar years
and, if so activated, will allow executive officers and other highly
compensated employees the opportunity to apply a portion of their base salary
to the acquisition of special below-market stock option grants, (4) the
automatic option grant program under which option grants will automatically be
made at periodic intervals to eligible non-employee board members to purchase
shares of common stock at an exercise price equal to 100% of the fair market
value of those shares on the grant date and (5) the director fee option grant
program which may, in the plan administrator's sole discretion, be activated
for one or more calendar years and, if so activated, will allow non-employee
board members the opportunity to apply a portion of the annual retainer fee
otherwise payable to them in cash each year to the acquisition of special
below-market option grants.

The discretionary option grant program and the stock issuance program will be
administered by the compensation committee. The compensation committee as plan
administrator will have complete discretion to determine which eligible
individuals are to receive option grants or stock issuances under those
programs, the time or times when such option grants or stock issuances are to
be made, the number of shares subject to each such grant or issuance, the
status of any granted option as either an incentive stock option or a non-
statutory stock option under the federal tax laws, the vesting schedule to be
in effect for the option grant or stock issuance and the maximum term for which
any granted option is to remain outstanding. However, the board acting by
disinterested majority will have the exclusive authority to make any
discretionary option grants or stock issuances to members of the compensation
committee. The compensation committee will also have the exclusive authority to
select the executive officers and other highly compensated employees who may
participate in the salary investment option grant program in the event that
program is activated for one or more calendar years. Neither the compensation
committee nor the board will exercise any administrative discretion with
respect to option grants under the salary investment option grant program or
under the automatic option grant or director fee option grant program for the
non-employee board members. All grants under those latter three programs will
be made in strict compliance with the express provisions of each such program.

The exercise price for the shares of common stock subject to option grants
made under our 1999 stock incentive plan may be paid in cash or in shares of
common stock valued at fair market value on the exercise date. The option may
also be exercised through a same-day sale program without any cash outlay by
the optionee. In addition, the plan administrator may provide financial
assistance to one or more optionees in the exercise of their outstanding
options or the purchase of their unvested shares by allowing such individuals
to deliver a full-recourse, interest-bearing promissory note in payment of the
exercise price and any associated withholding taxes incurred in connection with
such exercise or purchase.

The plan administrator will have the authority to effect the cancellation of
outstanding options under the discretionary option grant program, including
options incorporated from the predecessor plans, in return for the grant of new
options for the same or different number of option shares with an exercise
price per share based upon the fair market value of our common stock on the new
grant date. Stock appreciation rights are authorized for issuance under the
discretionary option grant program. Such rights will provide the holders with
the election to surrender their outstanding options for an appreciation
distribution from us equal to the excess of (1) the fair market value of the
vested shares of common stock subject to the surrendered option over (2) the
aggregate exercise price payable for those shares. Such appreciation
distribution may be made in cash or in shares of common stock. None of the
incorporated options from the predecessor plans contain any stock appreciation
rights.

In the event that we are acquired by merger or asset sale, each outstanding
option under the discretionary option grant program which is not to be assumed
by the successor corporation will automatically accelerate in full, and all
unvested shares under the discretionary option grant and stock issuance
programs will immediately vest, except to the extent our repurchase rights with
respect to those shares are to be assigned to the successor

corporation. The plan administrator will have complete discretion to grant one
or more options under the discretionary option grant program which will become
fully exercisable for all the option shares in the event those options are
assumed in the acquisition and the optionee's service with us or the acquiring
entity involuntarily terminates within a designated period not exceeding 18
months following such acquisition. The vesting of outstanding shares under the
stock issuance program may be accelerated upon similar terms and conditions.
The plan administrator will also have the authority to grant options which will
immediately vest upon an acquisition of us, whether or not those options are
assumed by the successor corporation.

The plan administrator is also authorized under the discretionary option
grant and stock issuance programs to grant options and to structure repurchase
rights so that the shares subject to those options or repurchase rights will
immediately vest in connection with a change in ownership or control of us,
whether this change in ownership or control is by a successful tender offer for
more than 50% of the outstanding voting stock or by a change in the majority of
the board by reason of one or more contested elections for board membership.
Such accelerated vesting may occur either at the time of such change or upon
the subsequent involuntary termination of the individual's service within a
designated period (not to exceed 18 months) following such change in control.

The options incorporated from the predecessor plans may, in the plan
administrator's discretion, immediately vest in the event of (1) our merger or
consolidation, or (2) the acquisition by another corporation or person of all
or substantially all of our assets or 80% or more of our then outstanding
voting stock, unless those options are assumed or substituted in the
acquisition of us. The plan administrator will have the discretion to extend
the acceleration provisions of our 1999 stock incentive plan to any or all of
the options outstanding under the predecessor plans.

In the event the plan administrator elects to activate the salary investment
option grant program for one or more calendar years, each of our executive
officers and other highly compensated employees selected for participation may
elect, prior to the start of the calendar year, to reduce his or her base
salary for that calendar year by a specified dollar amount not less than
$10,000 nor more than $50,000. Each selected individual who files such a timely
election will automatically be granted, on the first trading day in January of
the calendar year for which that salary reduction is to be in effect, a non-
statutory option to purchase that number of shares of common stock determined
by dividing the salary reduction amount by two-thirds of the fair market value
per share of common stock on the grant date. The option will be exercisable at
a price per share equal to one-third of the fair market value of the option
shares on the grant date. As a result, the total spread on the option shares at
the time of grant (the fair market value of the option shares on the grant date
less the aggregate exercise price payable for those shares) will be equal to
the amount of salary invested in that option. The option will vest and become
exercisable in a series of 12 equal monthly installments over the calendar year
for which the salary reduction is to be in effect and will be subject to full
and immediate vesting upon certain changes in the ownership or control of us.

Under the automatic option grant program, each individual who first becomes a
non-employee board member at any time after the completion of this offering
will automatically receive an option grant for 12,000 shares on the date such
individual joins the board, provided such individual has not been in our prior
employ. In addition, on the date of each annual stockholders meeting held after
the completion of this offering, each non-employee board member who is to
continue to serve as a non-employee board member will automatically be granted
an option to purchase 2,000 shares of common stock, provided such individual
has served on our board for at least six months.

Each automatic grant will have a term of 10 years, subject to earlier
termination following the optionee's cessation of board service. The option
will be immediately exercisable for all of the option shares; however, any
unvested shares purchased under the option will be subject to repurchase by us,
at the exercise price paid per share, should the optionee cease board service
prior to vesting in those shares. The shares subject to each 12,000-share
automatic option grant will vest in a series of eight successive equal semi-
annual installments upon the individual's completion of each six-month period
of board service over the four-year period measured from the option grant date.
Each 2,000-share automatic option grant will vest in two successive equal semi-

annual installments upon the individual's completion of each six month period
of board service over the one year period measured from the option grant date.
However, the shares subject to each automatic grant will immediately vest in
full upon certain changes in control or ownership of us or upon the optionee's
death or disability while a board member.

Should the director fee option grant program be activated in the future, each
non-employee board member will have the opportunity to apply all or a portion
of any annual retainer fee otherwise payable in cash to the acquisition of a
below-market option grant. The option grant will automatically be made on the
first trading day in January in the year for which the retainer fee would
otherwise be payable in cash. The option will have an exercise price per share
equal to one-third of the fair market value of the option shares on the grant
date, and the number of shares subject to the option will be determined by
dividing the amount of the retainer fee applied to the program by two-thirds of
the fair market value per share of common stock on the grant date. As a result,
the total spread on the option (the fair market value of the option shares on
the grant date less the aggregate exercise price payable for those shares) will
be equal to the portion of the retainer fee invested in that option. The option
will vest and become exercisable for the option shares in a series of 12 equal
monthly installments over the calendar year for which the election is to be in
effect. However, the option will become immediately exercisable and vested for
all the option shares upon (1) certain changes in the ownership or control of
us or (2) the death or disability of the optionee while serving as a board
member.

The shares subject to each option under the salary investment option grant,
automatic option grant and director fee option grant programs will immediately
vest upon (1) an acquisition of us by merger or asset sale or (2) the
successful completion of a tender offer for more than 50% of our outstanding
voting stock or a change in the majority of the board effected through one or
more contested elections for board membership.

Limited stock appreciation rights will automatically be included as part of
each grant made under the automatic option grant, salary investment option
grant and director fee option grant programs and may be granted to one or more
of our officers as part of their option grants under the discretionary option
grant program. Options with such a limited stock appreciation right may be
surrendered to us upon the successful completion of a hostile tender offer for
more than 50% of our outstanding voting stock. In return for the surrendered
option, the optionee will be entitled to a cash distribution from us in an
amount per surrendered option share equal to the excess of (1) the highest
price per share of common stock paid in connection with the tender offer over
(2) the exercise price payable for such share.

The board may amend or modify our 1999 stock incentive plan at any time,
subject to any required stockholder approval. Our 1999 stock incentive plan
will terminate on the earliest of (1) February 18, 2009, (2) the date on which
all shares available for issuance under our 1999 stock incentive plan have been
issued as fully-vested shares or (3) the termination of all outstanding options
in connection with certain changes in control or ownership of us.

1999 Employee Stock Purchase Plan

Our 1999 employee stock purchase plan was adopted by the board and
stockholders in February 1999 and will become effective immediately upon the
execution of the underwriting agreement for this offering. Our employee stock
purchase plan is designed to allow our eligible employees to purchase shares of
common stock, at semi-annual intervals, through their periodic payroll
deductions under our employee stock purchase plan. All share numbers below
regarding our 1999 employee stock purchase plan are calculated prior to a stock
split of to , which is subject to stockholder approval.

An initial reserve of 300,000 shares of common stock has been authorized for
issuance under our employee stock purchase plan. The number of shares of common
stock reserved for issuance under our employee stock purchase plan will
automatically increase on the first trading day in January each calendar year,
beginning in calendar year 2000, by an amount equal to 2% of the total number
of shares of common stock outstanding on the last trading day in December of
the preceding calendar year, but in no event will any such annual increase
exceed 300,000 shares. Our employee stock purchase plan will be implemented in
a series of

successive offering periods, each with a maximum duration for 24 months.
However, the initial offering period will begin on the execution date of the
underwriting agreement and will end on the last business day in July 2001. The
next offering period will commence on the first business day in August 2001,
and subsequent offering periods will commence as designated by the plan
administrator.

Individual employees who are scheduled to work more than 20 hours per week
for more than 5 calendar months per year on the start date of any offering
period may enter our employee stock purchase plan on that start date or on the
first business day of February or August after that start date. Individuals who
become eligible employees after the start date of the offering period may join
our employee stock purchase plan on any subsequent semi-annual entry date
within that offering period.

Payroll deductions may not exceed 10% of the participant's cash earnings, and
the accumulated payroll deductions of each participant will be applied to the
purchase of shares on his or her behalf on the last business day in January and
July each year at a purchase price per share equal to 85% of the lower of (1)
the fair market value of the common stock on the participant's entry date into
the offering period or (2) the fair market value on the semi-annual purchase
date. In no event, however, may any participant purchase more than 1,500 shares
on any semi-annual purchase date nor may all participants in the aggregate
purchase more than 75,000 shares on any such semi-annual purchase date.

Should the fair market value per share of common stock on any purchase date
be less than the fair market value per share on the start date of the two-year
offering period, then that offering period will automatically terminate, and a
new two-year offering period will begin on the next business day, with all
participants in the terminated offering to be automatically transferred to the
new offering period.

In the event we are acquired by merger or asset sale, all outstanding
purchase rights will automatically be exercised immediately prior to the
effective date of such acquisition. The purchase price will be equal to 85% of
the lower of (1) the fair market value per share of common stock on the
participant's entry date into the offering period in which such acquisition
occurs or (2) the fair market value per share of common stock immediately prior
to such acquisition.

Our employee stock purchase plan will terminate on the earlier of (1) the
last business day of July 2009 (2) the date on which all shares available for
issuance under our employee stock purchase plan shall have been sold pursuant
to purchase rights exercised thereunder or (3) the date on which all purchase
rights are exercised in connection with an acquisition of us by merger or asset
sale.

The board may at any time alter, suspend or discontinue our employee stock
purchase plan. However, certain amendments to our employee stock purchase plan
may require stockholder approval.

Certain Relationships and Related Transactions

Certain Sales of Securities

We have issued the following securities in private placement transactions:
4,270,336 shares of Series A preferred stock and Class B common stock warrants
exercisable for 379,869 shares for an aggregate price of $5,000,000 in October
1994; and 637,790 shares of Series B preferred stock, Class A common stock
warrants exercisable for 37,329 shares and Class B common stock warrants
exercisable for 306,097 shares for an aggregate price of $1,150,000 in February
1998. These numbers do not reflect the for stock split. The
purchasers of such securities include, among others, the following executive
officers, directors and holders of more than 5% of our outstanding stock and
their affiliates:

Preferred Stock Warrants
Executive Officer, Directors ------------------ --------------- Total
and 5% Stockholders Series A Series B Class A Class B Consideration
---------------------------- --------- -------- ------- ------- -------------

Christopher A. Crane......... -- 69,325 37,329 -- $ 125,000
Funds Affiliated with Summit
Partners(1)................. 4,270,336 554,600 -- 678,500 $6,000,000

- --------
(1) Includes Summit Ventures III, L.P. and Summit Investors II, L.P. Mr. Avis,
one of our directors, is a general partner of Stamps, Woodsum & Co. III, a
general partner of Summit Partners III, L.P. Summit Partners III, L.P. is
the general partner of Summit Ventures III, L.P. Mr. Avis is also a general
partner of Summit Investors II, L.P.

For additional information regarding the sale of securities to executive
officers, directors and stockholders of more than 5% of our outstanding common
stock, please see "Principal and Selling Stockholders."

Holders of outstanding preferred stock and common stock issuable upon
exercise of warrants are entitled to certain registration rights with respect
to the common stock issued or issuable upon conversion or exercise of such
preferred stock or warrants. Please see "Description of Securities--
Registration Rights."

Employment Agreements

We have entered into employment agreements with each of Messrs. Crane, Arabe,
Farrington and Papciak and Ms. Goodrum. Please see "Management--Employment and
Severance Arrangements" for more details regarding these agreements.

In November 1994, we entered into an employment agreement with Mr. Fenton.
Under this agreement, Mr. Fenton's base salary may be increased or decreased
from time-to-time, at our sole discretion. Mr. Fenton is also eligible to
receive an incentive bonus. If Mr. Fenton's employment is terminated for
reasons other than good cause, then he will be entitled to receive six months'
salary and a pro-rata portion of his incentive bonus. We may terminate Mr.
Fenton at any time. Mr. Fenton's current salary under the employment agreement
is $96,996 per year. In addition, Mr. Fenton's current potential quarterly
incentive bonuses, to be determined pursuant to the terms of the employment
agreement, are based upon 1.25% of Mr. Fenton's annual salary.

In November 1998, we entered into employment agreements with each of Messrs.
DeMoss and Potter. Under these agreements, each employee receives a base salary
of at least $225,000 per year and a bonus of up to $50,000 per year. In
addition, pursuant to the agreement, each employee was granted a fully vested
option to purchase 6,920.5 shares of our common stock, on a pre-split basis,
and an additional option to purchase 416,666.5 shares of our common stock, on a
pre-split basis, 20% of which vested immediately and 80% of which vest over
48 months commencing on January 1, 1999. The term of each agreement expires on
January 1, 2003. If either employee is terminated without cause prior to
November 5, 2000, then he shall be entitled to receive twelve months' salary in
exchange for consulting services. If either employee is terminated after
November 5, 2000, then he shall receive his base salary for a period equal to
the shorter of six months or the remaining term of his employment agreement in
exchange for consulting services. During any period in which the terminated
employee provides consulting services to us, his options will continue to vest.
In any event, at least 75% of such terminated employee's options will vest if
he is terminated without cause prior to January 1, 2003.

Corporate Headquarters Lease

We lease our corporate headquarters in San Diego, California from a limited
partnership whose general partner is a company owned by Mr. Crane, our
President, Chief Executive Officer and Chairman of the Board. In addition, Mr.
Beasley, one of our directors, is a limited partner of the limited partnership
from which we lease our facilities. Our lease is for a five-year term
commencing in February 1999 with five two-year extension options. We believe
that the terms of the lease are no less favorable to us than those that could
have been obtained from an independent third party lessor at the time the lease
was executed. For additional information regarding our facility leases, please
see "Business--Facilities."

Principal and Selling Stockholders

The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of February 19, 1999 on a pre-split
basis and assuming the exercise of all warrants, and as adjusted to reflect the
sale of the shares of common stock offered hereby, by (1) each person (or group
of affiliated persons) who we know owns beneficially 5% or more of our common
stock, (2) each of our directors, (3) our executive officers listed in the
Summary Compensation Table and (4) all of our directors and executive officers
as a group. Percentage of ownership is calculated as required by Commission
Rule 13d-3(d)(1). Except as indicated below, the persons named in the table
have sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them. The number of shares underlying
options includes shares which are exercisable within 60 days from the date of
this offering. The address for those individuals for which an address is not
otherwise indicated is: 9888 Carroll Centre Road, Suite 100, San Diego,
California 92126-4581. Certain selling stockholders may sell shares in
connection with the exercise of the over-allotment option. Mr. Crane may sell
up to shares, Mr. Beasley may sell up to shares and Summit
Partners may sell up to shares. Any shares that may be sold by selling
stockholders if the underwriters exercise their over-allotment option have not
been reflected in this table. For further information regarding the selling
stockholders' relationship with us during the last three years, please see,
"Management--Executive Officers and Directors" and "Certain Relationships and
Related Transactions."

Number of Percentage of Percentage of
Number of Shares Shares Beneficially Shares Beneficially
Shares Underlying Owned Prior Owned After
Beneficial Owner Outstanding Options to this Offering this Offering
- ---------------- ----------- ---------- ------------------- -------------------

Funds affiliated with
Summit Partners........ 5,503,436 -- 52.67%
499 Hamilton Avenue,
Suite 200
Palo Alto, CA 94301
Christopher A. Crane.... 3,985,974 -- 38.15%
Gregory M. Avis......... 5,503,436 -- 52.67%
Robert C. Beasley....... 894,540 -- 8.56%
Kenneth F. Potashner.... -- -- *
Walter W. Papciak....... -- 69,000 *
Michael Arabe........... -- 78,600 *
Craig S. Farrington..... -- 78,600 *
Karen Goodrum........... -- 78,600 *
All directors and
executive officers as a
group (8 persons)...... 10,383,950 304,800 100% 100%

- --------
* Less than 1% of total.

The 5,503,436 shares listed above as outstanding for Summit Partners and Mr.
Avis includes 4,728,437 shares beneficially owned by Summit Ventures III, L.P.
and 96,499 shares beneficially owned by Summit Investors II, L.P. This number
also includes 664,930 shares issuable upon exercise of warrants to purchase
common stock beneficially owned by Summit Ventures III, L.P. and 13,570 shares
issuable upon exercise of warrants to purchase common stock beneficially owned
by Summit Investors II, L.P. Mr. Avis is a general partner of Stamps, Woodsum &
Co. III, a general partner of Summit Partners III, L.P. Summit Partners III,
L.P. is the general partner of Summit Ventures III, L.P. Mr. Avis is also a
general partner of Summit Investors II, L.P. Mr. Avis disclaims beneficial
ownership of all shares of common stock issued or issuable to Summit
Ventures III, L.P. and Summit Investors II, L.P., except to the extent of his
pecuniary interest, but exercises shared voting and investment power with
respect to all such shares.

Description of Securities

The following information describes our common stock and preferred stock and
certain provisions of our certificate of incorporation and our bylaws as will
be in effect upon the closing of this offering. This description is only a
summary. You should also refer to the certificate and bylaws which have been
filed with the SEC as exhibits to our registration statement, of which this
prospectus forms a part. The descriptions of our common stock and preferred
stock reflect changes to our capital structure that will occur upon the
approval of our board of directors and stockholders and upon the closing of
this offering in accordance with the terms of the certificate. All share
numbers below are calculated prior to a stock split of to , which is
subject to stockholder approval.

Upon the completion of the offering our authorized capital stock will consist
of 70,000,000 shares of common stock, par value $0.01 per share, and 5,000,000
shares of preferred stock, par value $0.01 per share.

Common Stock

As of December 31, 1998, there were 4,817,360 shares of common stock
outstanding and held of record by three stockholders. Based upon the number of
shares outstanding and giving effect to (1) the automatic conversion of each
share of our Class B common stock into one share of our Class A common stock
and the renaming of such stock as "common stock" upon the closing of this
offering, (2) the automatic conversion of each share of our preferred stock
into one share of our common stock upon the closing of this offering, (3) a
for stock split of our common stock to be effected prior to the
closing of this offering and (4) the issuance of the shares of common
stock offered by us hereby, there will be shares of common stock
outstanding upon the closing of this offering.

Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive ratably
such dividends, if any, as may be declared by the board of directors out of
funds legally available therefor, subject to any preferential dividend rights
of any outstanding preferred stock. Holders of common stock have no preemptive,
subscription, redemption or conversion rights. The outstanding shares of common
stock are, and the shares offered by us in this offering will be, when issued
in consideration for payment thereof, fully paid and nonassessable. The rights,
preferences and privileges of holders of common stock are subject to, and may
be materially adversely affected by, the rights of the holders of shares of any
series of preferred stock which we may designate and issue in the future. Upon
the closing of this offering, there will be no shares of preferred stock
outstanding.

Preferred Stock

As of December 31, 1998, there were 4,908,126 shares of convertible preferred
stock outstanding. Each outstanding share of convertible preferred stock will
be converted into one share of common stock upon the closing of this offering
and such shares of convertible preferred stock will no longer be authorized,
issued or outstanding.

Upon the closing of this offering, the board of directors will be authorized,
without further stockholder approval, to issue from time to time up to an
aggregate of 5,000,000 shares of preferred stock in one or more series and to
fix or alter the designations, powers, preferences, rights and any
qualifications, limitations or restrictions of the shares of each such series
thereof, including the dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption (including sinking fund provisions),
redemption price or prices, liquidation preferences and the number of shares
constituting any series or designations of such series. We have no present
plans to issue any shares of preferred stock. Please see "--Anti-Takeover
Effects of Certain Provisions of Delaware Law and our Certificate of
Incorporation and Bylaws."

Options

As of December 31, 1998, options to purchase a total of 2,385,449 shares of
common stock were outstanding, all of which are subject to lock-up arrangements
under the terms of the option agreements. Upon completion of this offering,
options to purchase a total of 2,800,000 shares of common stock may be granted
under the 1999 stock incentive plan. Please see "Management--Benefit Plans" and
"Shares Eligible for Future Sale."

Common Stock Warrants

As of December 31, 1998, we have outstanding warrants to purchase a total of
723,295 shares of common stock, at an exercise price of $0.01 per share and
warrants to purchase a total of 213,068 shares of common stock, at a weighted
average exercise price of $1.76 per share. The warrants contain anti-dilution
provisions providing for adjustments of the exercise price and the number of
shares underlying the warrants upon the occurrence of certain events, including
any recapitalization, reclassification, stock dividend, stock split, stock
combination or similar transaction. The warrants grant their holders certain
registration rights with respect to the common stock issuable upon their
exercise, which are described below. All of these warrants will be exercisable
immediately prior to this offering. Warrants to purchase 213,068 shares expire
in September 2003, warrants to purchase 379,869 shares expire in October 2004,
and warrants to purchase 343,426 in February 2008.

Registration Rights

As of December 31, 1998, pursuant to the terms of an agreement with certain
of our stockholders, after the closing of this offering, the holders of
5,844,489 shares of outstanding or issuable common stock on a pre-split basis
will be entitled to certain demand registration rights with respect to the
registration of their shares under the Securities Act of 1933. The holders of
50% of such shares are entitled to demand that we register their shares under
the Securities Act of 1933, subject to certain limitations. We are not required
to effect more than two such registrations for such holders pursuant to such
demand registration rights. In addition, after the closing of this offering,
these holders will be entitled to certain piggyback registration rights with
respect to the registration of such shares of common stock under the Securities
Act of 1933. In the event that we propose to register any shares of common
stock under the Securities Act of 1933 either for our account or for the
account of our other security holders, the holders of shares having piggyback
rights are entitled to receive notice of such registration and are entitled to
include their shares in any such registration, subject to certain limitations.
Further, at any time after we become eligible to file a registration statement
on Form S-3, the holders of 584,449 shares of common stock on a pre-split basis
may require us to file registration statements under the Securities Act of 1933
on Form S-3 with respect to their shares of common stock. These registration
rights are subject to certain conditions and limitations, including the right
of the underwriters of an offering to limit the number of shares of common
stock held by securityholders with registration rights to be included in such
registration. We are generally required to bear all of the expenses of all such
registrations, including the reasonable fees of a single counsel acting on
behalf of all selling holders, except underwriting discounts and selling
commissions. Registration of any of the shares of common stock held by
securityholders with registration rights would result in such shares becoming
freely tradable without restriction under the Securities Act of 1933
immediately upon effectiveness of such registration.

Anti-Takeover Effects of Certain Provisions of Delaware Law and our Certificate
of Incorporation and Bylaws

We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Subject to certain exceptions, Section 203 prohibits a
publicly-held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless
the interested stockholder attained such status with the approval of the board
of directors or unless the business combination is approved in a prescribed
manner. A

"business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of
the corporation's voting stock. This statute could prohibit or delay the
accomplishment of mergers or other takeover or change in control attempts with
respect to us and, accordingly, may discourage attempts to acquire us.

In addition, certain provisions of our certificate and bylaws, which
provisions will be in effect upon the closing of this offering and are
summarized in the following paragraphs, may be deemed to have an anti-takeover
effect and may delay, defer or prevent a tender offer or takeover attempt that
a stockholder might consider in its best interest, including those attempts
that might result in a premium over the market price for the shares held by
stockholders.

Board of Directors Vacancies. Our bylaws authorize the board of directors to
fill vacant directorships or increase the size of the board of directors. This
may deter a stockholder from removing incumbent directors and simultaneously
gaining control of the board of directors by filling the vacancies created by
such removal with its own nominees.

Staggered Board. Our bylaws provide that our board will be classified into
two classes of directors beginning at the next annual meeting of stockholders.
Please see "Management--Classes of the Board" for more information regarding
the staggered board.

Stockholder Action; Special Meeting of Stockholders. Our certificate provides
that stockholders may not take action by written consent, but only at duly
called annual or special meetings of stockholders. Our bylaws further provide
that special meetings of our stockholders may be called only by the President,
Chief Executive Officer or Chairman of the board of directors or a majority of
the board of directors.

Advance Notice Requirements for Stockholder Proposals and Director
Nominations. Our bylaws provide that stockholders seeking to bring business
before our annual meeting of stockholders, or to nominate candidates for
election as directors at our annual meeting of stockholders, must provide
timely notice thereof in writing. To be timely, a stockholder's notice must be
delivered to, or mailed and received at, our principal executive offices not
less than 120 days prior to the first anniversary of the date of our notice of
annual meeting provided with respect to the previous year's annual meeting of
stockholders; provided, that if no annual meeting of stockholders was held in
the previous year or the date of the annual meeting of stockholders has been
changed to be more than 30 calendar days earlier than such anniversary, notice
by the stockholder, to be timely, must be so received a reasonable time before
the solicitation is made. Our bylaws also specify certain requirements as to
the form and content of a stockholder's notice. These provisions may preclude
stockholders from bringing matters before our annual meeting of stockholders or
from making nominations for directors at our annual meeting of stockholders.

Authorized But Unissued Shares. Our authorized but unissued shares of common
stock and preferred stock are available for future issuance without stockholder
approval, subject to certain limitations imposed by the Nasdaq National Market.
These additional shares may be utilized for a variety of corporate purposes,
including future public offerings to raise additional capital, corporate
acquisitions and employee benefit plans. The existence of authorized but
unissued and unreserved common stock and preferred stock could render more
difficult or discourage an attempt to obtain control of us by means of a proxy
contest, tender offer, merger or otherwise.

Delaware law provides generally that the affirmative vote of a majority of
the shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or bylaws, unless a corporation's certificate of
incorporation or bylaws, as the case may be, requires a greater percentage.

Limitation of Liability and Indemnification Matters

Our certificate provides that, except to the extent prohibited by Delaware
law, our directors shall not be personally liable to us or our stockholders for
monetary damages for any breach of their fiduciary duty as directors. Under
Delaware law, the directors have a fiduciary duty to us which is not eliminated
by this provision of our certificate and, in appropriate circumstances,
equitable remedies such as injunctive or other forms of nonmonetary relief will
remain available. In addition, each director will continue to be subject to
liability under Delaware law for breach of their duty of loyalty to us for acts
or omissions which are found by a court of competent jurisdiction to be not in
good faith or which involve intentional misconduct, or knowing violations of
law, for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
prohibited by Delaware law. This provision also does not affect the directors'
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.

Section 145 of the Delaware General Corporation Law allows a corporation to
indemnify its directors and officers and to purchase insurance with respect to
liability arising out of their capacity or status as directors and officers,
provided that the indemnification does not eliminate or limit the liability of
a director for the following:

. any breach of the director's duty of loyalty to us or our stockholders;

. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

. unlawful payments of dividends or unlawful stock purchases or
redemptions; and

. any transaction from which the director derived an improper personal
benefit.

Delaware law further provides that the permitted indemnification shall not be
deemed exclusive of any other rights to which the directors and officers may be
entitled under our bylaws, any agreement, a vote of stockholders or otherwise.
Our certificate eliminates the personal liability of directors to the fullest
extent permitted by Delaware law. In addition, our certificate provides that we
may fully indemnify any person who was or is a party, or is threatened to be
made a party to, any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative or investigative) by reason
of the fact that such person is or was one of our directors or officers or is
or was serving at our request as a director or officer of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding.

We have also entered into agreements to indemnify our directors and executive
officers, in addition to the indemnification provided for in our bylaws. We
believe that these provisions and agreements are necessary to attract and
retain qualified directors and executive officers. Our bylaws also permit us to
secure insurance on behalf of any officer, director, employee or other agent
for any liability arising out of his or her actions, regardless of whether
Delaware law would permit indemnification. We have applied for liability
insurance for our officers and directors.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the certificate. We are not aware of any threatened
litigation or proceeding that may result in a claim for such indemnification.

Transfer Agent and Registrar

The transfer agent and registrar for the common stock is American Stock
Transfer.

Shares Eligible For Future Sale

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 after this offering,
or the perception that such sales could occur. Such sales also might make it
more difficult for us to sell equity securities in the future at a time and
price that we deem appropriate. After this offering, we will have outstanding
shares of common stock. Of these shares, the shares being offered
hereby are freely tradable.

In general, under Rule 144, as currently in effect, a person (or persons
whose shares are required to be aggregated), including an affiliate, who has
beneficially owned shares for at least one year is entitled to sell, within any
three-month period commencing 90 days after the date of this prospectus, a
number of shares that does not exceed the greater of (1) 1% of the then
outstanding shares of common stock (approximately shares immediately
after this offering) or (2) the average weekly trading volume in the common
stock during the four calendar weeks preceding the date on which notice of such
sale is filed, subject to certain restrictions. In addition, a person who is
not deemed to have been our affiliate at any time during the 90 days preceding
a sale and who has beneficially owned the shares proposed to be sold for at
least two years would be entitled to sell such shares under Rule 144(k) without
regard to the requirements described above. To the extent that shares were
acquired from one of our affiliates, such person's holding period for the
purpose of effecting a sale under Rule 144 commences on the date of transfer
from the affiliate.

As of December 31, 1998, options to purchase a total of 2,385,449 shares of
common stock, on a pre-split basis, were outstanding, of which options to
purchase 679,623 shares, on a pre-split basis, were exercisable. Of the options
to purchase 1,705,826 shares of common stock, on a pre-split basis, that were
not exercisable, options to purchase 152,000 shares of common stock, on a pre-
split basis, shall immediately vest and become exercisable upon the closing of
this offering. Upon the closing of this offering, we intend to file a
registration statement to register for resale the 2,800,000 shares of common
stock, on a pre-split basis, reserved for issuance under our stock option
plans. We expect such registration statement to become effective immediately
upon filing. Shares issued upon the exercise of stock options granted under our
stock option plans will be eligible for resale in the public market from time
to time subject to vesting and, in the case of certain options, the expiration
of the lock-up agreements referred to below.

As of December 31, 1998 certain stockholders and warrantholders, holding
approximately 5,844,489 shares of outstanding or issuable common stock, on a
pre-split basis, had the right, subject to certain conditions and limitations,
to include their shares in certain registration statements relating to our
securities. By exercising their registration rights and causing a large number
of shares to be registered and sold in the public market, these holders may
cause the price of the common stock to fall. In addition, any demand to include
such shares in our registration statements could have a material adverse effect
on our ability to raise needed capital. Please see "Management--Benefit Plans,"
"Principal and Selling Stockholders," "Description of Securities--Registration
Rights," "Shares Eligible for Future Sale" and "Underwriting."

Underwriting

Under the terms and conditions contained in an underwriting agreement among
the underwriters and us, each of the underwriters, for whom Volpe Brown Whelan
& Company, LLC, EVEREN Securities, Inc. and Needham & Company, Inc., are acting
as representatives, have severally agreed to purchase from us the number of
shares of common stock set forth opposite its name below:

Number of
Underwriter Shares
- ----------- -------------

Volpe Brown Whelan & Company, LLC.................................
EVEREN Securities, Inc. ..........................................
Needham & Company, Inc. ..........................................
-------------
Total.........................................................
=============

The underwriting agreement provides that the obligations of the several
underwriters to purchase shares of common stock are subject to approval of
certain legal matters by their counsel and to certain other conditions. Under
the terms and conditions of the underwriting agreement, all of the underwriters
are obligated to take and pay for all such shares of common stock if any are
taken.

The underwriters propose initially to offer the shares of common stock
directly to the public at the public offering price set forth on the cover page
of this prospectus and to certain dealers at such price, less a concession not
in excess of $ per share. The underwriters may allow, and such dealers
may reallow, concessions not in excess of $ per share of the common
stock to certain other dealers. After the initial public offering of the common
stock, the offering price of the common stock and other selling terms may be
changed by the underwriters. The underwriters expect to deliver the shares
against payment in San Francisco, California on , 1999.

Pursuant to the underwriting agreement, the selling stockholders have granted
to the underwriters an option, exercisable for 30 days from the date of this
prospectus, to purchase up to additional shares of common stock on the
same terms and conditions as set forth on the cover page of this prospectus.
The underwriters may exercise this option solely to cover over-allotments. To
the extent such option is exercised, each underwriter will have a commitment
subject to certain conditions, to purchase a number of additional shares of
common stock proportionate to such underwriter's initial commitment pursuant to
the underwriting agreement.

From the date of this prospectus until 180 days after such date, we and all
of our stockholders, officers and directors have agreed not to (1) offer, sell,
contract to sell, make any short sale, pledge or otherwise dispose of, directly
or indirectly, any shares of common stock or any options to acquire shares of
common stock or securities convertible into or exchangeable for any other
rights to purchase or acquire common stock or (2) enter into any swap or other
agreements that transfers, in whole or in part, any of the economic
consequences or ownership of common stock, without the prior consent of Volpe
Brown Whelan & Company, LLC.

The underwriters have reserved for sale, at the initial public offering
price, shares of common stock for certain of our directors, officers,
employees, friends and family who have expressed an interest in purchasing
shares of common stock in this offering. Such persons are expected to purchase,
in the aggregate, not more than 5% of the common stock offered in this
offering. The number of shares available for sale to the general public in this
offering will be reduced to the extent such persons purchase such reserved
shares. Any reserved shares not purchased will be offered by the underwriters
on the same basis as other shares offered hereby.

We and the selling stockholders have agreed to indemnify the underwriters
against certain liabilities, losses and expenses, including liabilities under
the Securities Act of 1933, or to contribute to payments that the underwriters
may be required to make in respect thereof.

Prior to this offering, there has been no public market for our common stock.
The initial public offering price for the shares of common stock in this
offering was determined by agreement between us and the underwriters. Among the
factors considered in making such determination were the history of, and the
prospects for, the industry in which we compete, an assessment of our
management, our present operations, our historical results of operations and
the trend of our revenues and earnings, our prospects for future earnings, the
general condition of the securities markets at the time of this offering and
the price of similar securities of generally comparable companies. We cannot
assure you that an active trading market will develop for our common stock or
that our common stock will trade in the public markets at or above the initial
public offering price.

Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of our common stock
including over-allotment, stabilizing and short-covering transactions and the
impositions of penalty bids. Certain persons participating in this offering may
also engage in passive market making transactions in the common stock on the
Nasdaq National Market.

In order to facilitate this offering, certain persons participating in this
offering may engage in transactions that stabilize, maintain or otherwise
affect the price of the common stock during and after this offering.
Specifically, the underwriters may over-allot or otherwise create a short
position in the common stock for their own account by selling more shares of
common stock than have been sold to them by us. The underwriters may elect to
cover any such short position by purchasing shares of common stock in the open
market or by exercising the over-allotment option granted to the underwriters.
In addition, the underwriters may stabilize or maintain the price of the common
stock by bidding for or purchasing shares of common stock in the open market
and may impose penalty bids, under which selling concessions allowed to
syndicate members or other broker-dealers participating in this offering are
reclaimed if shares of common stock previously distributed in this offering are
repurchased in connection with stabilization transactions or otherwise. The
effect of these transactions may be to stabilize or maintain the market price
at a level above that which might otherwise prevail in the open market. The
imposition of a penalty bid may also affect the price of the common stock to
the extent that it discourages resales thereof. No representation is made as to
the magnitude or effect of any such stabilization or other transactions. Such
transactions may be effected on the Nasdaq National Market or otherwise and, if
commenced, may be discontinued at any time.

Legal Matters

The validity of the shares of common stock offered hereby will be passed upon
for us by Brobeck, Phleger & Harrison LLP, San Diego, California. Certain legal
matters in connection with this offering will be passed upon for the
underwriters by Katten Muchin & Zavis, Chicago, Illinois.

Experts

Ernst & Young LLP, independent auditors, have audited our financial
statements and schedule included in this prospectus as of December 31, 1997 and
1998 and for each of the three years in the period ended December 31, 1998, as
set forth in their report, which is included in this prospectus. In addition,
Ernst & Young LLP have audited the financial statements of REALBID, LLC
included in this prospectus as of December 31, 1997 and for the period from
June 19, 1997 (inception) to December 31, 1997, as set forth in their report,
which is also included in this prospectus. Our financial statements and the
financial statements of REALBID, LLC are included in this prospectus in
reliance on Ernst & Young LLP's reports, given on their authority as experts in
accounting and auditing.

Where You Can Find More Information

We have filed with the SEC a registration statement on Form S-1 (including
the exhibits, schedules and amendments to the registration statement) under the
Securities Act of 1933 with respect to the shares of common stock to be sold in
this offering. This prospectus does not contain all the information set forth
in the registration statement. For further information with respect to COMPS
and the shares of common stock to be sold in this offering, reference is made
to the registration statement. Statements contained in this prospectus as to
the contents of any contract, agreement or other document referred to are not
necessarily complete, and in each instance reference is made to the copy of
such contract, agreement or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by
such reference.

You may read and copy all or any portion of the registration statement or any
other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the SEC. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. Our SEC filings, including the registration statement,
are also available to you on the Commission's Web site (http://www.sec.gov).

As a result of this offering, we will become subject to the information and
reporting requirements of the Securities Exchange Act of 1934, and, in
accordance therewith, will file periodic reports, proxy statements and other
information with the SEC. Upon approval of the common stock for the quotation
on the Nasdaq National Market, such reports, proxy and information statements
and other information may also be inspected at the offices of Nasdaq
Operations, 1735 K Street, N.W., Washington, D.C. 20006.

We intend to furnish our stockholders with annual reports containing audited
financial statements and with quarterly reports for the first three quarters of
each year containing unaudited interim consolidated financial information.

Index to Financial Statements

Page
----

COMPS.COM, Inc.

Report of Ernst & Young LLP, Independent Auditors......................... F-2
Balance Sheets as of December 31, 1997 and 1998........................... F-3
Statements of Operations for the years ended December 31, 1996, 1997 and
1998..................................................................... F-4
Statements of Stockholders' Deficit for the years ended December 31, 1996,
1997 and 1998............................................................ F-5
Statements of Cash Flows for the years ended December 31, 1996, 1997 and
1998..................................................................... F-6
Notes to Financial Statements............................................. F-7

REALBID, LLC

Report of Ernst & Young LLP, Independent Auditors......................... F-21
Statements of Operations for the period from June 19, 1997 (inception) to
December 31, 1997 and the nine-month period ended September 30, 1998
(unaudited).............................................................. F-22
Statements of Members' Equity for the period from June 19, 1997
(inception) to December 31, 1997 and the nine-month period ended
September 30, 1998 (unaudited)........................................... F-23
Statements of Cash Flows for the period from June 19, 1997 (inception) to
December 31, 1997 and the nine-month period ended September 30, 1998
(unaudited).............................................................. F-24
Notes to Financial Statements............................................. F-25

Unaudited Pro Forma Condensed Statements of Operations

Unaudited Pro Forma Condensed Statement of Operations..................... F-27
Notes to Unaudited Pro Forma Condensed Statement of Operations............ F-28

F-1

Report of Ernst & Young LLP, Independent Auditors

The Board of Directors
COMPS.COM, Inc.

We have audited the accompanying balance sheets of COMPS.COM, Inc. as of
December 31, 1997 and 1998, and the related statements of operations,
stockholders' deficit and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of COMPS.COM, Inc. at December
31, 1997 and 1998, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1998 in conformity
with generally accepted accounting principles.

Ernst & Young LLP

San Diego, California
February 5, 1999,
except for Note 15, as to which the date is
February 22, 1999

F-2

COMPS.COM, Inc.

Balance Sheets

Pro Forma
December 31, Stockholders'
----------------------- Deficit at
1997 1998 December 31, 1998
---------- ----------- -----------------
(Unaudited)

Assets
Current assets:
Cash and cash equivalents.......... $ 351,621 $ 377,803
Accounts receivable, less allowance
for bad debts and cancellations of
$1,384,242 and $1,464,922 at
December 31, 1997 and 1998,
respectively...................... 2,298,167 3,165,817
Prepaid expenses................... 146,363 184,520
---------- -----------
Total current assets................ 2,796,151 3,728,140
Furniture and equipment, net........ 1,203,750 1,470,538
Intangible assets, net.............. 53,485 2,162,350
Deposits and other assets........... 37,450 36,249
---------- -----------
Total assets........................ $4,090,836 $ 7,397,277
========== ===========
Liabilities, redeemable preferred
stock and stockholders' deficit
Current liabilities:
Accounts payable................... $ 358,638 $ 530,860
Accrued liabilities................ 934,953 1,019,647
Current portion of long-term debt.. 467,203 979,208
Current portion of capital lease
obligations....................... 65,101 49,343
Deferred subscription revenue...... 4,023,228 5,502,869
---------- -----------
Total current liabilities........... 5,849,123 8,081,927
Long-term debt, less current
portion............................ 1,750,372 1,100,628
Capital lease obligations, less
current portion.................... 71,955 22,612
Deferred rent....................... 108,906 71,187
---------- -----------
Total liabilities................... 7,780,356 9,276,354
Commitments
Redeemable convertible preferred
stock, par value $.01 per share;
5,000,000 shares authorized:
Series A, 4,270,336 shares issued
and outstanding at December 31,
1997 and 1998..................... 5,815,806 6,114,730 $ --
Series B, 637,790 shares issued and
outstanding at December 31, 1998.. -- 1,201,462 --
Stockholders' deficit:
Class A common stock, par value
$.01 per share; 22,500,000 shares
authorized; 4,773,860 shares
issued and outstanding (at stated
value) at December 31, 1997 and
1998 (9,725,486 pro forma--
unaudited)........................ 29,219 29,219 78,735
Class B common stock, par value
$.01 per share; 2,500,000 shares
authorized; 43,500 shares issued
and outstanding at December 31,
1998 (0 pro forma--unaudited)..... -- 435 --
Additional paid-in capital........ -- 4,759,600 12,026,711
Deferred compensation............. -- (2,538,421) (2,538,421)
Accumulated deficit............... (9,534,545) (11,446,102) (11,446,102)
---------- ----------- -----------
Total stockholders' deficit......... (9,505,326) (9,195,269) $(1,879,077)
---------- ----------- ===========
Total liabilities, redeemable
preferred stock and stockholders'
deficit............................ $4,090,836 $ 7,397,277
========== ===========

See accompanying notes.

F-3

COMPS.COM, Inc.

Statements of Operations

Years ended December 31,
-------------------------------------
1996 1997 1998
----------- ----------- -----------

Net revenues............................ $ 8,140,693 $10,449,936 $12,805,761
Cost of revenues........................ 4,356,973 5,053,998 5,746,180
----------- ----------- -----------
Gross profit............................ 3,783,720 5,395,938 7,059,581
Operating expenses:
Selling and marketing................. 2,812,596 3,407,906 4,181,945
Product development and engineering... 376,331 768,051 1,230,349
General and administrative............ 2,835,271 2,525,526 2,936,052
----------- ----------- -----------
Total operating expenses................ 6,024,198 6,701,483 8,348,346
----------- ----------- -----------
Loss from operations.................... (2,240,478) (1,305,545) (1,288,765)
Other:
Gain from termination of covenant not-
to-compete........................... 58,396 -- --
Interest income....................... 34,616 16,650 42,595
Interest expense...................... (159,905) (268,290) (302,152)
----------- ----------- -----------
Net loss................................ (2,307,371) (1,557,185) (1,548,322)
Dividend accretion on preferred stock... 298,924 298,924 363,235
----------- ----------- -----------
Net loss attributable to common
stockholders........................... $(2,606,295) $(1,856,109) $(1,911,557)
=========== =========== ===========
Net loss per share attributable to
common stockholders, basic and
diluted................................ $ (0.55) $ (0.39) $ (0.40)
=========== =========== ===========
Shares used in computing net loss
attributable to common stockholders,
basic and diluted...................... 4,773,860 4,773,860 4,794,896
=========== =========== ===========
Pro forma net loss per share, basic and
diluted................................ $ (0.16)
===========
Shares used in computing pro forma net
loss per share, basic and diluted...... 9,634,874
===========

See accompanying notes.

F-4

COMPS.COM, Inc.

Statements of Stockholders' Deficit

Common Stock
------------------------------- Additional Total
Class A Class B Paid-In Deferred Accumulated Stockholders'
Shares Amount Shares Amount Capital Compensation Deficit Deficit
--------- ------- ------ ------ ---------- ------------ ------------ -------------

Balance at December 31,
1995................... 4,773,860 $29,219 -- $ -- $ -- $ -- $ (5,072,141) $(5,042,922)
Accretion of preferred
stock redemption
value................. -- -- -- -- -- -- (298,924) (298,924)
Net loss............... -- -- -- -- -- -- (2,307,371) (2,307,371)
--------- ------- ------ ----- ---------- ----------- ------------ -----------
Balance at December 31,
1996................... 4,773,860 29,219 -- -- -- -- (7,678,436) (7,649,217)
Accretion of preferred
stock redemption
value................. -- -- -- -- -- -- (298,924) (298,924)
Net loss............... -- -- -- -- -- -- (1,557,185) (1,557,185)
--------- ------- ------ ----- ---------- ----------- ------------ -----------
Balance at December 31,
1997................... 4,773,860 29,219 -- -- -- -- (9,534,545) (9,505,326)
Issuance of stock upon
exercise of options... -- -- 43,500 435 12,615 -- -- 13,050
Accretion of preferred
stock redemption
value................. -- -- -- -- -- -- (363,235) (363,235)
Grant of stock options
in connection with
REALBID acquisition... -- -- -- -- 2,091,000 -- -- 2,091,000
Deferred compensation
related to grant of
certain stock
options............... -- -- -- -- 2,655,985 (2,655,985) -- --
Amortization of
deferred
compensation.......... -- -- -- -- -- 117,564 -- 117,564
Net loss............... -- -- -- -- -- -- (1,548,322) (1,548,322)
--------- ------- ------ ----- ---------- ----------- ------------ -----------
Balance at December 31,
1998................... 4,773,860 $29,219 43,500 $ 435 $4,759,600 $(2,538,421) $(11,446,102) $(9,195,269)
========= ======= ====== ===== ========== =========== ============ ===========

See accompanying notes

F-5

COMPS.COM, Inc.

Statements of Cash Flows

Years ended December 31,
-------------------------------------
1996 1997 1998
----------- ----------- -----------

Operating activities
Net loss................................ $(2,307,371) $(1,557,185) $(1,548,322)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization......... 1,020,029 913,781 803,998
Deferred compensation................. -- -- 117,564
Provision for bad debts............... -- 39,491 167,858
Impairment loss on acquired
intangibles.......................... -- 183,233 --
Loss on disposal/write-off of assets.. -- 97,011 --
Interest imputed on note payable to
TRW REDI............................. -- 48,619 49,252
Gain from covenant not-to-compete..... (58,396) -- --
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Accounts receivable................. (293,785) (529,824) (978,508)
Prepaid expenses.................... 50,916 (41,820) (27,969)
Deposits and other assets........... 23,414 3,767 (674)
Accounts payable.................... 82,033 (56,032) 172,222
Accrued liabilities................. 334,016 326,864 84,694
Deferred rent....................... 24,534 (19,172) (37,719)
Deferred subscription revenue....... 527,010 667,801 1,479,641
----------- ----------- -----------
Net cash provided by (used in) operating
activities............................. (597,600) 76,534 282,037
Investing activities
Maturities of marketable securities,
available-for-sale..................... 459,645 243,645 --
Purchases of furniture and equipment.... (592,278) (725,835) (933,876)
Purchase of TRW REDI and LSR............ -- (80,000) --
Purchase of REALBID, net of cash
acquired............................... -- -- (209,900)
Loans to employees, net of repayments... 1,285 (6,715) (10,188)
----------- ----------- -----------
Net cash used in investing activities... (131,348) (568,905) (1,153,964)
Financing activities
Proceeds from notes payable............. 1,411,879 742,800 300,000
Payments on notes payable............... (264,851) (384,683) (486,991)
Payments on capital lease obligations... (100,286) (91,664) (65,101)
Proceeds from sale of preferred stock,
net of issuance costs.................. -- -- 1,137,151
Proceeds from issuance of common stock.. -- -- 13,050
----------- ----------- -----------
Net cash provided by financing
activities............................. 1,046,742 266,453 898,109
----------- ----------- -----------
Net increase (decrease) in cash......... 317,794 (225,918) 26,182
Cash at beginning of year............... 259,745 577,539 351,621
----------- ----------- -----------
Cash at end of year..................... $ 577,539 $ 351,621 $ 377,803
=========== =========== ===========
Supplemental disclosures of cash flow
information:
Interest paid......................... $ 143,024 $ 244,877 $ 251,527
=========== =========== ===========
Income taxes paid..................... $ 5,563 $ 3,941 $ 3,712
=========== =========== ===========
Supplemental schedule of noncash
investing and financing activities:
Equipment financed under capital
leases............................... $ -- $ 30,806 $ --
=========== =========== ===========

See accompanying notes.

F-6

COMPS.COM, Inc.

Notes to Financial Statements

December 31, 1998

1. Organization and Significant Accounting Policies

Organization and Business Activity

COMPS.COM, Inc., formerly known as COMPS InfoSystems, Inc. (the Company),
compiles and maintains a national database of confirmed commercial real estate
information. The Company provides its customers with reports on sales of
office, industrial, retail, apartments, residential land, commercial land,
hotels, motels and other special use properties. As of December 31, 1998,
national coverage includes over 45 major cities throughout the United States.

Basis of Presentation

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. This basis of accounting contemplates
the recovery of the Company's assets and the satisfaction of its liabilities in
the normal course of conducting business. The Company anticipates that it will
require additional funds to continue the Company's product development
activities; expand the Company's marketing and sales and customer services and
support capabilities; fund the Company's capital expenditures to accommodate
the anticipated increase in customers and geographic expansion; and expand
certain financial and administrative functions. Management believes that the
funds necessary to meet its capital requirements for the next twelve months
will be raised either from a public offering or by private equity or debt
financing. Without the additional funds, the Company will be required to reduce
the scope of its product development projects and significantly reduce its
expenditures on infrastructure and product and service upgrade programs.

Use of Estimates

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

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

Concentration of Credit Risk

The majority of sales and the related accounts receivable are from companies
dealing in the commercial real estate industry throughout the United States.
Credit is extended based upon an evaluation of the customer's financial
condition and generally collateral is not required. Reserves for doubtful
accounts are maintained by the Company. The Company has not experienced losses
in excess of its reserves.

Furniture and Equipment

Furniture and equipment are depreciated using the double declining balance
method over estimated useful lives of five and seven years, respectively.

F-7

COMPS.COM, Inc.

Notes to Financial Statements (continued)

1. Organization and Significant Accounting Policies (continued)

Intangible Assets

Intangible assets arose primarily from the acquisition of REALBID, LLC (see
Note 2). The excess of cost over the fair value of the net assets purchased has
been allocated to goodwill, customer base, database and web site technology,
trademark and trade name and assembled work force. These intangible assets are
being amortized over estimated useful lives ranging from three to five years.

Asset Impairment

In accordance with Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long Lived Assets to
be Disposed Of (SFAS 121), the Company recognizes impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the estimated undiscounted cash flows to be generated by those
assets are less than the assets' carrying amount. SFAS 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. In 1997,
impairment losses of approximately $183,000 were recorded to write-down certain
acquired intangibles. In 1996 and 1998, no impairment losses were recorded.

Stock-Based Compensation

The Company has elected to follow Accounting Principles Board Opinion No. 25
Accounting for Stock Issued to Employees (APB 25) and related Interpretations
in accounting for its employee stock options.

Revenue Recognition

The Company recognizes product and related services revenue at the time of
shipment or performance of services. A substantial portion of the Company's
revenues come from subscription sales. Subscriptions are recorded as accounts
receivable and as deferred revenues at the time the customer is invoiced.
Subscription revenue, net of reserve for cancellations, is recognized over the
subscription term.

Significant Customers

During 1996, 1997 and 1998, no single customer accounted for more than 10% of
revenues.

Product Development and Engineering

Product development and engineering costs are expensed in the period
incurred.

Net Loss Per Share and Unaudited Pro Forma Stockholders' Deficit

Historical basic and diluted net loss per share are computed using the
weighted average number of common shares outstanding. Options, warrants and
preferred stock were not included in the computation of diluted net loss per
share because the effect would be antidilutive.

Pro forma net loss per share has been computed as described above and also
gives effect to common equivalent shares from preferred stock that will
automatically convert upon the closing of the Company's initial public offering
(using the as-if-converted method). If the offering contemplated is
consummated, all of the redeemable convertible preferred stock outstanding as
of the closing date will automatically be converted into an aggregate of
4,908,126 shares of common stock. Unaudited pro forma stockholders' deficit at
December 31, 1998, as adjusted for the conversion of redeemable convertible
preferred stock, is disclosed on the balance sheet.

F-8

COMPS.COM, Inc.

Notes to Financial Statements (continued)

1. Organization and Significant Accounting Policies (continued)

Net Loss Per Share and Unaudited Pro Forma Stockholders' Deficit (continued)

A reconciliation of shares used in the calculation of historical and pro
forma basic and diluted net loss per share attributable to common stockholders
follows:

Year ended December 31,
-------------------------------------
1996 1997 1998
----------- ----------- -----------

Historical net loss per share
attributable to common stockholders,
basic and diluted:
Net loss attributable to common
stockholders....................... $(2,606,295) $(1,856,109) $(1,911,557)
=========== =========== ===========
Shares used in computing net loss
attributable to common
stockholders, basic and diluted.... 4,773,860 4,773,860 4,794,896
=========== =========== ===========
Net loss per share attributable to
common stockholders, basic and
diluted............................ $ (0.55) $ (0.39) $ (0.40)
=========== =========== ===========
Antidilutive securities including
options, warrants, and preferred
stock not included in historical
net loss per share attributable to
common stockholders calculations... 5,508,682 5,748,023 8,229,938
=========== =========== ===========
Pro forma net loss per share:
Net loss attributable to common
stockholders....................... $(1,911,557)
Less: dividend accretion on
redeemable convertible preferred
stock.............................. 363,235
-----------
Pro forma net loss.................. $(1,548,322)
===========
Shares used in computing net loss
attributable to common
stockholders, basic and diluted.... 4,794,896
Adjustment to reflect the effect of
the assumed conversion of weighted
average shares of redeemable
convertible preferred stock........ 4,839,979
-----------
Shares used in computing pro forma
net loss per share, basic and
diluted............................ 9,634,874
===========
Pro forma net loss per share, basic
and diluted......................... $ (0.16)
===========

F-9

COMPS.COM, Inc.

Notes to Financial Statements (continued)

1. Organization and Significant Accounting Policies (continued)

Impact of Recently Issued Accounting Standards

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS
130). SFAS 130 requires that all components of comprehensive income, including
net income, be reported in the financial statements in the period in which they
are recognized. SFAS 130 is effective for fiscal years beginning after December
15, 1997. There was no difference between the Company's net loss and its total
comprehensive loss for the years ended December 31, 1996, 1997 and 1998.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards, No. 131, Disclosures About Segments of an
Enterprise and Related Information (SFAS 131). SFAS 131 replace SFAS 14,
"Financial Reporting for Segments of a Business Enterprise" and changes the way
the public companies report segment information. SFAS 131 is effective for
fiscal years beginning after December 15, 1997 and has been adopted by the
Company for the year ending December 31, 1998.

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1 Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use (SOP 98-1). This standard requires
companies to capitalize qualifying computer software costs which are incurred
during the application development stage and amortize them over the software's
estimated useful life. SOP 98-1 is effective for fiscal years beginning after
December 15, 1998. The Company is currently evaluating the impact of SOP 98-1
on its financial statements and related disclosures.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5 Reporting for the Costs of Start-Up Activities (SOP
98-5). This standard requires companies to expense the cost of start-up
activities and organization costs as incurred. In general, SOP 98-5 is
effective for fiscal years beginning after December 15, 1998. The Company
believes the adoption of SOP 98-5 will not have a material impact on its
results of operations.

Reclassification

Reclassifications have been made to certain prior period amounts to conform
to the 1998 presentation.

2. Acquisitions

Experian RES

On November 30, 1997, the Company acquired the Experian RES investment
property publishing business in Georgia and Florida for $80,000. The purchase
price has been allocated to the assets purchased and the liabilities assumed
based upon the fair values at the date of acquisition as follows:

Current assets.................................................... $114,244
Subscription contracts............................................ 124,198
Deferred revenues................................................. (158,442)
--------
$ 80,000
========

Deferred revenues represent liabilities assumed to fulfill subscription
contracts acquired from Experian. Deferred revenues will be recognized over the
subscription term as product is shipped. The subscription contracts represent
the estimated value of future revenue streams from renewals of subscription
contracts

F-10

COMPS.COM, Inc.

Notes to Financial Statements (continued)

2. Acquisitions (continued)

purchased. Experian RES is the successor-in-interest to TRW REDI and based on
the Company's 1995 acquisition of TRW REDI's investment property publishing
business, 50% of the subscription contracts were amortized in 1997 and the
remaining 50% were amortized in 1998.

REALBID

On November 6, 1998, the Company acquired the assets of REALBID, LLC
(REALBID) a real estate marketing services company which supports commercial
real estate transactions over the Internet. The transaction was accounted for
as a purchase. The purchase price consisted of cash payments of $163,000 and
the grant of stock options to the principals to acquire 544,612 shares of the
Company's common stock at $1.20 per share. The fair value of the options was
determined to be $3.84 per share as of the date of the acquisition. As a
result, the purchase price is calculated to be $2,308,400, which includes
acquisition costs of $54,400. In addition, employment and incentive
compensation agreements were entered into with the two principals of REALBID.
The purchase price has been allocated as follows:

Current assets.................................................... $ 64,500
Intangible assets................................................. 2,243,900
----------
Net purchase price................................................ $2,308,400
==========

The accompanying statements of operations reflect the operating results of
REALBID since the date of the acquisition. The pro forma unaudited results of
operations for the years ended December 31, 1997 and 1998, assuming the
purchase of REALBID has occurred on June 19, 1997, are as follows:

1997 1998
----------- -----------

Net revenues..................................... $10,465,436 $13,028,927
=========== ===========
Net loss attributable to common stockholders..... $(2,362,860) $(2,434,911)
=========== ===========
Net loss per share attributable to common
stockholders.................................... $ (0.49) $ (0.51)
=========== ===========

AOBR, Inc.

On December 4, 1998, the Company agreed to acquire certain assets of AOBR,
Inc., subject to certain conditions, including completion of due diligence and
approval by the Company's Board of Directors. The transaction closed on January
7, 1999. The purchase price consisted of cash payments of $120,000 plus
acquisition costs of $9,200. The transaction will be recorded as a purchase and
the purchase price will be allocated to the acquired database, non-competition
agreement and goodwill. These intangibles will be amortized over two to five
years.

3. Furniture and Equipment

Furniture and equipment are stated at cost and consist of the following at
December 31:

1997 1998
----------- -----------

Machinery and equipment............................ $ 2,394,486 $ 3,200,644
Office furniture and fixtures...................... 87,559 141,877
Leasehold improvements............................. 150,553 223,953
----------- -----------
2,632,598 3,566,474
Accumulated depreciation........................... (1,428,848) (2,095,936)
----------- -----------
$ 1,203,750 $ 1,470,538
=========== ===========

F-11

COMPS.COM, Inc.

Notes to Financial Statements (continued)

4. Intangibles Assets

Intangible assets consist of the following at December 31:

1997 1998
-------- ----------

Customer base.......................................... $ -- $1,791,100
Database and web site technology....................... -- 268,700
Assembled workforce.................................... -- 94,600
Trademark and trade name............................... -- 89,500
Subscription contracts................................. 141,426 --
-------- ----------
141,426 2,243,900
Less accumulated amortization.......................... (87,941) (81,550)
-------- ----------
$ 53,485 $2,162,350
======== ==========

During 1997, the Company determined that the subscription base relating to
the 1995 acquisitions of TRW REDI and The Land Sales Resource was impaired as a
result of lower than expected retention of the purchased subscription base.
Fair value of the assets was calculated based on estimated future cash flows to
be generated by the subscription base, discounted at a market rate of interest.
This resulted in a write-down of the acquired intangibles of $183,233, which is
reflected in general and administrative expense on the statement of operations.

5. Long-Term Debt

In September 1996, the Company entered into a $3.0 million loan agreement
with Venture Lending & Leasing, Inc. The terms of the agreement provide $1.5
million for fixed asset acquisition and $1.5 million as working capital.
Borrowings for fixed assets acquisition and working capital are due forty-eight
months and thirty-six months, respectively, from the date of disbursement. At
December 31, 1998, $541,750 is available for draw for general operations and
none is available for fixed asset acquisitions. The loan agreement originally
expired on June 30, 1998, but was extended during 1998 to June 30, 1999.

Notes payable to Venture Lending & Leasing, Inc. bear interest at 8.75% per
annum during the term and a one-time balloon interest payment of 15% of the
original principal amount is due upon completion of the term. The notes payable
are secured by all fixed assets of the Company with the exception of two notes
payable which are secured by all business assets of the Company.

Long-term debt consists of the following at December 31:

1997 1998
--------- ---------

Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $18,458 are due monthly through
August 1, 1999 with additional balloon interest of
$86,250 due October 1, 1999.............................. $ 378,636 $ 212,367

Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $21,006 are due monthly through
August 1, 2000 with additional balloon interest of
$125,532 due October 1, 2000............................. 630,194 463,489

Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $8,557 are due monthly through
February 1, 2001 with additional balloon interest of
$51,140 due April 1, 2001................................ 286,960 224,051

F-12

COMPS.COM, Inc.

Notes to Financial Statements (continued)

5. Long-Term Debt (continued)

1997 1998
---------- ----------

Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $2,555 are due monthly through
October 1, 2001 with additional balloon interest of
$15,268 due December 1, 2001............................ 96,356 79,851

Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $2,595 are due monthly through
October 1, 2001 with additional balloon interest of
$15,505 due January 1, 2002............................. 98,180 82,494

Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $2,931 are due monthly through
November 1, 2001 with additional balloon interest of
$17,514 due January 1, 2002............................. 110,301 93,431

Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $2,672 are due monthly through
November 1, 2000 with additional balloon interest of
$12,486 due December 1, 2001............................ 77,473 59,709

Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $9,630 are due monthly through
September 1, 2001 with additional balloon interest of
$45,000 due November 1, 2001............................ -- 275,717

Unsecured note payable to TRW REDI, due as follows:
$405,800 on December 1, 1999; $145,000 on December 1,
2000; and $135,000 on December 31, 2001. Interest is
imputed at 10% through December 1, 1999. Note bears
interest at 8% subsequent to December 1, 1999........... 539,475 588,727
---------- ----------
2,217,575 2,079,836
Less current portion..................................... 467,203 979,208
---------- ----------
Total long-term debt..................................... $1,750,372 $1,100,628
========== ==========

Future annual payments of long-term debt are as follows at December 31, 1998:

1999........................................................... $ 979,208
2000........................................................... 659,738
2001........................................................... 423,812
2002........................................................... 17,078
----------
Total.......................................................... $2,079,836
==========

F-13

COMPS.COM, Inc.

Notes to Financial Statements (continued)

6. Commitments

Leases

The Company leases its offices under operating leases which expire at various
dates through June 2002. Under these operating leases, the Company pays taxes,
insurance and maintenance expenses related to the premises. Certain of the
leases provide for increasing minimum annual rental amounts. Rent payable for
the Company's corporate headquarters office during the period from July 2000
through June 2002 will be determined based upon fair market rental value at
July 1, 2000. Rent expense is recorded evenly over the term of the lease.
Accordingly, deferred rent, as reflected on the accompanying balance sheets,
represents the difference between rent expense accrued and amounts paid under
the terms of the lease agreement. Rent expense for the years ended December 31,
1996, 1997 and 1998 totaled $410,705, $405,874 and $468,533, respectively.

The Company leases certain equipment under capital lease obligations. Cost
and accumulated depreciation of equipment under capital leases were $379,978
and $321,854, respectively, at December 31, 1998.

Future minimum lease payments under operating and capital leases at December
31, 1998 are as follows:

Operating Capital
Leases Leases
--------- -------

1999...................................................... $513,505 $54,463
2000...................................................... 256,144 15,714
2001...................................................... 92,603 8,890
2002...................................................... 81,294 --
-------- -------
Total minimum lease payments.............................. $943,546 79,067
========
Less amount representing interest......................... 7,112
-------
Present value of minimum lease payments................... 71,955
Less current portion...................................... 49,343
-------
Noncurrent portion........................................ $22,612
=======

Employment, Incentive Compensation, and Stock Agreements

The Company has employment and incentive compensation agreements with key
employees which grant these employees the right to receive bonuses and
incentive compensation upon certain events and circumstances as defined in the
agreements. The agreements provide for severance pay of three to eight months
in the event of termination of employment.

7. Information Sharing Agreement

The Company has agreements to license its database to other information
service providers for licensing through their computer networks. Under the
agreements, the Company receives a certain percentage of the related annual
gross receipts earned by these other service providers. In addition, neither
the Company nor the other service providers shall develop competing products
during the term of the agreement. The Company earned $307,381, $163,341 and
$41,185 under the agreements during the years ended December 31, 1996, 1997 and
1998, respectively.

F-14

COMPS.COM, Inc.

Notes to Financial Statements (continued)

8. Redeemable Convertible Preferred Stock

During 1994, the Company sold 4,270,336 shares of Series A convertible
redeemable preferred stock and warrants to purchase 379,869 shares of Class B
common stock at $.01 per share (Note 10), for $4,856,758, net of issuance costs
of $143,242. The holders of the Series A preferred stock are entitled to
receive cumulative dividends at an annual rate of $.07 per share, payable at
the time of: 1) repurchase of Series A preferred stock; 2) liquidation of the
Company; or 3) sale of the Company's securities pursuant to an underwritten
public offering. The right to such dividends will be forfeited in the event of
a repurchase of all of the outstanding shares of Series A preferred stock or a
liquidation if the holders of the Series A preferred stock are entitled to
receive in excess of $3.52 per share prior to the payment of dividends or upon
a public offering of not less than $10 million at a purchase price of not less
than $3.52 per share. Holders of Series A preferred stock have a liquidation
preference of $1.17 per share plus all accumulated but unpaid dividends.

In February 1998, the Company sold 637,790 shares of Series B redeemable
convertible preferred stock and warrants to purchase 306,097 shares of Class B
common stock and 37,329 shares of Class A common stock at $.01 per share (Note
10), for $1,137,151, net of issuance costs of $12,849. The holders of the
Series B preferred stock are entitled to receive cumulative dividends at an
annual rate of $0.11 per share, payable at the time of 1) repurchase of Series
A or Series B preferred stock; 2) liquidation of the Company; or 3) sale of the
Company's securities pursuant to an underwritten public offering. The right to
such dividends will be forfeited in the event of a repurchase of all of the
outstanding shares of Series B preferred stock or a liquidation if the holders
of the Series B preferred stock are entitled to receive in excess of $3.83 per
share prior to the payment of dividends or upon a public offering of not less
than $10 million at a purchase price of not less than $3.83 per share. Holders
of Series B preferred stock have a liquidation preference of $1.80 per share
plus all accumulated but unpaid dividends.

The Series A and Series B preferred stock is convertible at the option of the
holder into an equal number of shares of Class A common stock. The holders of
preferred and Class A common stock vote together as a class on all matters to
be voted on by the shareholders of the Company, with each holder of preferred
stock entitled to one vote for each share held.

A summary of the redeemable convertible preferred stock and the liquidation
and redemption values at December 31, 1998 are as follows:

Liquidation Redemption
Shares Preference Value
--------- ----------- ----------

Series A preferred stock................... 4,270,336 $5,000,000 $6,257,972
Series B preferred stock................... 637,790 1,150,000 1,214,311
--------- ---------- ----------
Total...................................... 4,908,126 $6,150,000 $7,472,283
========= ========== ==========

9. Repurchase Agreement

As part of the issuance of Series A and Series B redeemable convertible
preferred stock and Class B common stock warrants, (see Note 10), the Company
granted the purchasers a "put option" in which the Company is required to
repurchase the shares held by the purchasers; the repurchase is required to
take place in October 2001 or earlier if an event such as a liquidation or
merger or acquisition occurs and there is a 50% change in the holders of voting
securities. The repurchase price is the greater of the original purchase price
plus accrued dividends or fair market value of the shares held. This put option
is terminated if the Company has a public offering of its shares in which the
Company's gross proceeds are at least $10 million and the per share price is
not less the $3.52 for the Series A preferred stock and $3.83 for the Series B
preferred stock.

F-15

COMPS.COM, Inc.

Notes to Financial Statements (continued)

9. Repurchase Agreement (continued)

The purchasers have also been granted registration rights in certain
conditions and a right of first refusal in the event the Company intends to
sell shares in a private transaction.

10. Stockholders' Deficit

Common Stock

The Class A and Class B common stock shall have the same rights and
privileges except that the Class B common stock shall not have any right to
vote. Additionally, each share of Class B common stock shall automatically
convert into one share of Class A common stock upon the earlier of the time of
consent of the holders of at least 66 2/3% of the outstanding Class A common
stock to the conversion is obtained or upon the closing of a public offering.

Warrants

In connection with the issuance of the Series A redeemable preferred stock,
the Company issued warrants to purchase 379,869 shares of Class B common stock
at $.01 per share. The warrants may be exercised in whole or in part on the
earlier to occur of one day prior to the closing of a liquidity event, as
defined in the agreement, or October 14, 2001. The warrants expire on October
14, 2004.

In connection with the issuance of the Series B redeemable preferred stock,
the Company issued warrants to purchase 306,097 shares of Class B common stock
and 37,329 shares of Class A common stock at $0.01 per share. The warrants to
purchase Class B common stock are exercisable at the earlier of (i) one day
prior to the closing or effective time of a liquidity event, as defined in the
warrant agreement, or (ii) October 14, 2001. The warrant to purchase Class A
Common Stock is immediately exercisable. All warrants issued in connection with
the Series B Preferred Stock expire on February 6, 2008.

In connection with the loan agreement with Venture Lending & Leasing, Inc.
(see Note 5), the Company issued a warrant to purchase 213,068 shares of the
Company's Class B common stock at $1.76 per share, subject to antidilutive
adjustments. The warrant expires on September 24, 2003. As set forth in SFAS
123, the warrant must be accounted for based on its fair value. Accordingly,
the Company estimated the fair value of the warrant using the Black-Scholes
option pricing model, however, no value was allocated to the warrant as the
current estimated fair value was nominal.

Stock Options

In November 1998, the Company replaced its amended and restated stock option
plan (Old Plan), under which options to purchase 1,008,000 shares of Class B
common stock were outstanding, with the 1998 Equity Participation Plan and the
1998 Supplemental Option Plan (the 1998 Plans). Under the 1998 Plans, both
incentive stock options and non-qualified stock options to purchase Class B
common stock may be issued to key employees, board members and consultants of
the Company. The aggregate number of shares which the Company is authorized to
issue under the 1998 Plans, together with the aggregate number of shares which
may be issued under the Old Plan is 2,792,083. Options granted under the Plans
generally vest over five years, except for options issued to independent
directors under the 1998 Plans which vest over four years, and are exercisable
for a period of ten years from the date of grant. The board of directors may,
in its discretion, accelerate the period during which an option granted to an
employee or consultant vests. Generally, stock options are granted at a price
which approximates the fair value of the shares at the date of grant as
determined by the board of directors.

F-16

COMPS.COM, Inc.

Notes to Financial Statements (continued)

10. Stockholders' Deficit (continued)

Stock Options (continued)

The following table summarizes stock option activity:

Weighted
Average
Exercise
Shares Price
--------- --------

Outstanding at December 31, 1995......................... 709,909 $0.30
Granted................................................ 117,808 $0.30
Cancelled.............................................. (182,308) $0.30
--------- -----
Outstanding at December 31, 1996......................... 645,409 $0.30
Granted................................................ 333,841 $0.30
Cancelled.............................................. (94,500) $0.30
--------- -----
Outstanding at December 31, 1997......................... 884,750 $0.30
Granted................................................ 1,559,199 $1.15
Exercised.............................................. (43,500) $0.30
Cancelled.............................................. (15,000) $0.65
--------- -----
Outstanding at December 31, 1998......................... 2,385,449 $0.86
========= =====

Included above are options to purchase a total of 149,775 shares of common
stock which were issued outside of the Plans. In addition, 190,000 of the
options granted in 1997 will become fully vested upon the closing of an initial
public offering.

At December 31, 1998, options to purchase 679,623 shares (including 138,275
shares related to options granted outside the Plans) are exercisable and
512,909 shares are available for future grant.

Through December 31, 1998, the Company recorded deferred compensation expense
for the difference between the exercise price and the fair value for financial
statement presentation purposes of the Company's common stock, as determined in
part by an independent valuation, for options granted during 1998. This
deferred compensation aggregates to $2,655,985, which is being amortized over
the vesting period of the related options. Amortization during 1998 was
$117,564.

Following is a further breakdown of the options outstanding as of December
31, 1998:

Weighted average
Weighted average exercise price of
Range of Options remaining life Weighted average Options options
Exercise Prices Outstanding in years exercise price exercisable exercisable
- --------------- ----------- ---------------- ---------------- ----------- -----------------

$0.30-$0.45 905,250 7.70 $0.31 350,313 $0.30
$1.00-$1.20 1,480,199 9.65 $1.19 329,310 $1.20
- ----------- --------- ---- ----- ------- -----
$0.30-$1.20 2,385,449 8.93 $0.86 679,623 $0.74

Pro forma information regarding net loss is required by SFAS 123, and has
been determined as if the Company had accounted for its employee stock options
under the fair value method of that Statement. The fair value of the options
was estimated at the date of grant, using the "minimum value" method for option
pricing with the following weighted-average assumptions for options granted in
1996, 1997 and 1998: risk-free interest rate of 6%, 6% and 5.5%, respectively;
dividend yield of 0%; and a weighted-average expected life of options of five
years. The weighted-average fair value of options granted in 1996, 1997 and
1998 was $0.08. $0.08 and $0.28, respectively.

F-17

COMPS.COM, Inc.

Notes to Financial Statements (continued)

10. Stockholders' Deficit (continued)

Stock Options (continued)

For purpose of pro forma disclosure, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information is as follows:

Year ended December 31,
----------------------------------------
1996 1997 1998
------------ ------------ ------------

Pro forma net loss attributable to
common stockholders.............. $ (2,615,089) $ (1,867,929) $ (1,939,328)
Pro forma basic and diluted net
loss per share attributable to
common stockholders.............. $ (0.55) $ (0.39) $ (0.40)

Common Stock Reserved for Issuance

At December 31, 1998, the Company has reserved shares of common stock for
future issuance as follows:

Stock options...................................................... 2,898,358
Preferred stock.................................................... 4,908,126
Warrants........................................................... 936,363
---------
8,742,847
=========

11. Income Taxes

At December 31, 1998, the Company had federal and state tax net operating
loss carryforwards of approximately $4,942,000 and $2,494,000, respectively.
The difference between the federal and California tax loss carryforwards is
primarily attributable to the 50% limitation on California loss carryforwards.
The federal and California tax loss carryforwards begin expiring in 2009 and
1999, respectively, unless previously utilized.

Pursuant to Internal Revenue Code Section 382, use of the Company's net
operating loss carryforwards may be limited if a cumulative change in ownership
of more than 50% occurs within a three-year period.

Significant components of the Company's deferred tax assets at December 31,
1997 and 1998 are shown below. A valuation allowance of $1,652,000 has been
recognized to offset the deferred tax assets as realization of such assets is
uncertain.

1997 1998
---------- ----------

Deferred tax assets:
Net operating loss carryforwards................... $1,343,000 $1,826,000
Other.............................................. 338,000 361,000
Amortization....................................... 464,000 463,000
---------- ----------
Total deferred tax assets............................ 2,145,000 2,650,000
Deferred tax liabilities:
Intangibles........................................ -- (998,000)
---------- ----------
Net deferred tax assets.............................. 2,145,000 1,652,000
Valuation allowance for deferred tax assets.......... (2,145,000) (1,652,000)
---------- ----------
Net deferred tax assets.............................. $ -- $ --
========== ==========

F-18

COMPS.COM, Inc.

Notes to Financial Statements (continued)

12. Employee Benefit Plan

The Company has a 401(k) defined contribution employee benefit plan (the
"Plan") for the benefit of eligible employees, generally those who have
completed one year of service. The Company is not required to contribute to the
Plan. In 1996, the Company did not contribute to the Plan. Contributions
totaling $14,956 and $34,130 were charged to expense in 1997 and 1998,
respectively.

13. Related Party Transactions

The Company currently leases its corporate headquarters operating space from
a limited partnership whose general partner is a company owned by the President
and major stockholder of the Company. Another director and stockholder is a
limited partner of this limited partnership. Rent expense to this related party
of $253,684, $295,018 and $304,579 was incurred in 1996, 1997 and 1998,
respectively. The Company retains the consulting services of one of its board
of director members. Consulting expense to this related party of $57,000,
$11,580 and $25,780 was incurred in 1996, 1997 and 1998, respectively.

14. Reportable Segments

Description of the types of products and services from which each reportable
segment derives its revenues

The Company has two reportable segments: information services and
transactions support services. Revenues for the Company's information services
division are derived from licensing commercial real estate sales comparable
information on a subscription and ad-hoc basis. Revenues of $16,500 for
transaction support services were derived from REALBID, a marketing services
company acquired in November 1998 which supports commercial real estate
transactions over the Internet.

Measurement of segment profit or loss and segment assets

The Company evaluates performance and allocates resources based on profit or
loss from operations before income taxes. The accounting policies of the
reportable segments are the same as those described in the summary of
significant accounting policies.

Factors management used to identify the enterprise's reportable segments

The Company's reportable segments are business units that offer different
products and services. The Company did not have reportable segments in prior
years, and therefore only the information for the year ended December 31, 1998
is included below.

Year ended December 31, 1998
-----------------------------------
Transaction
Information Support
Services Services Totals
----------- ----------- ----------

Revenues from external customers...... 12,789,261 16,500 12,805,761
Intersegment revenues................. -- -- --
Interest expense...................... 302,152 -- 302,152
Depreciation and amortization
expense.............................. 721,648 82,350 803,998
Segment profit (loss) before income
taxes................................ (1,164,204) (384,118) (1,548,322)
Other significant non cash item:
Deferred compensation on stock
options............................ 967,231 1,571,190 2,538,421
Segment assets
Fixed assets, net................... 1,460,211 10,327 1,470,538
Intangible assets, net.............. -- 2,162,350 2,162,350
Expenditures of long-lived assets..... 922,749 11,127 933,876

F-19

COMPS.COM, Inc.

Notes to Financial Statements (continued)

15. Subsequent Events

In February 1999, the Company entered into a $1.8 million loan agreement with
Venture Lending & Leasing, Inc., under which the Company may purchase both
equipment and working capital. The borrowing base under the loan is limited to
$1.8 million or 80% of the Company's eligible accounts. The loan agreement
expires on March 31, 2000.

In connection with the loan agreement, the Company issued a warrant to
purchase a certain number of shares of Class B non-voting common stock with an
aggregate initial exercise price of $225,000. The exercise price per share will
be based on an amount equal to the median of i) $1.8031 and ii) the per share
price in the next round of equity financing. If there is no new equity
financing done within 18 months of the date of the loan agreement (February 12,
1999) the exercise price will be $2.70. The Company will account for this
warrant in accordance with SFAS 123.

In February 1999, the Company entered into a new lease agreement for its
corporate headquarters. The new lease is with the same related party (see Note
13) and is effective February 1, 1999. The Company's prior lease, which was due
to expire in June 2002 and provided for monthly rent payments of $37,015 will
be canceled upon commencement of the new lease. The term of the new lease is 5
years, with the option to extend for five terms of two years each. The initial
monthly rent payment of $44,843 will be increased by 3 1/2% each year during
the original five year term. Upon commencement of each extension of the term,
monthly base rent will be adjusted to reflect the fair market rental value.

In February 1999, the Board of Directors adopted the 1999 Stock Incentive
Plan and the 1999 Employee Stock Purchase Plan. The plans are effective on the
date the underwriting agreement is signed in connection with the Company's
contemplated initial public offering. Shares reserved for issuance under the
1999 Stock Incentive Plan and the 1999 Employee Stock Purchase Plan total
2,800,000 and 300,000, respectively.

F-20

Report of Ernst & Young LLP, Independent Auditors

The Members
REALBID, LLC

We have audited the accompanying statements of operations, members' equity
(deficit) and cash flows of REALBID, LLC for the period from June 19, 1997
(inception) through December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of REALBID, LLC
for the period from June 19, 1997 (inception) through December 31, 1997, in
conformity with generally accepted accounting principles.

Ernst & Young LLP

San Diego, California
February 17, 1999

F-21

REALBID, LLC

Statements of Operations

For the
period from
June 19, 1997 For the nine-month
(inception) to period ended
December 31, 1997 September 30, 1998
----------------- ------------------
(unaudited)

Net revenues............................... $ 15,500 $ 196,666
Cost of revenues........................... 9,615 37,608
--------- ---------
Gross profit............................... 5,885 159,058
Operating expenses:
General and administrative............... 247,598 271,477
--------- ---------
Total operating expenses................... 247,598 271,477
--------- ---------
Net loss................................... $(241,713) $(112,419)
========= =========

See accompanying notes.

F-22

REALBID, LLC

Statements of Members' Equity (Deficit)

Total
Members' Shares Members'
--------------- Accumulated Equity
Shares Amount Deficit (Deficit)
------ ------ ----------- ---------

Issuance of members' shares.............. 8,000 $8,000 $ -- $ 8,000
Net loss for the period from June 19,
1997 (inception) to December 31, 1997... -- -- (241,713) (241,713)
----- ------ --------- ---------
Balance at December 31, 1997............. 8,000 8,000 (241,713) (233,713)
Net loss for nine-month period ended
September 30, 1998 (unaudited).......... -- -- (112,419) (112,419)
----- ------ --------- ---------
Balance at September 30, 1998
(unaudited)............................. 8,000 $8,000 $(354,132) $(346,132)
===== ====== ========= =========

See accompanying notes.

F-23

REALBID, LLC

Statements of Cash Flows

For the
period from
June 19, 1997 For the nine-month
(inception) to period ended
December 31, 1997 September 30, 1998
----------------- ------------------
(unaudited)

Operating activities
Net loss................................. $(241,713) $(112,419)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation........................... -- 699
Provision for bad debts................ -- 10,000
Changes in operating assets and
liabilities:
Accounts receivable.................. -- (79,000)
Prepaid assets....................... -- (2,000)
Accounts payable..................... 1,797 13,331
Accrued liabilities.................. 150,000 187,000
--------- ---------
Net cash provided by (used in) operating
activities.............................. (89,916) 17,611
Financing activities
Payments on lease obligation............. -- (1,748)
Proceeds from member advances............ 83,510 12,704
Proceeds from issuance of members'
shares.................................. 8,000 --
--------- ---------
Net cash provided by financing
activities.............................. 91,510 10,956
--------- ---------
Net increase in cash and cash
equivalents............................. 1,594 28,567
Cash and cash equivalents at beginning of
period.................................. -- 1,594
--------- ---------
Cash and cash equivalents at end of
period.................................. $ 1,594 $ 30,161
========= =========
Supplemental disclosure of cash flow
information:
Interest paid............................ $ -- $ 176
Supplemental schedule of non cash
investing and financing activities:
Equipment financed under capital leases.. $ -- $ 8,713

See accompanying notes.

F-24

REALBID, LLC

Notes to Financial Statements

December 31, 1997

(Information subsequent to December 31, 1997 and pertaining to the nine-month
period ended September 30, 1998 is unaudited)

1. Organization and Summary of Significant Accounting Policies

Organization and Business Activities

REALBID, LLC (the "Company") is a California company with limited liability
status which was formed on June 19, 1997 and shall continue until June 30, 2047
or until dissolution in accordance with the terms of the Operating Agreement.
Each member's liability is limited pursuant to the Beverly-Killea Limited
Liability Company Act. The Company is a real estate marketing services company
which facilitates commercial property transactions using both the internet and
traditional communication technologies.

The Company's primary purpose is to provide computer on-line real estate
services, including market data, specific property information, buyer profiles
and a trading platform for private and public format transactions.

Basis of Presentation

The Company has an accumulated deficit at December 31, 1997 and has not yet
generated income from operations and thus needs to continue to raise cash to
fund future operations. Refer to Note 5 for subsequent event.

Unaudited Interim Financial Information

The financial statements for the nine months ended September 30, 1998 are
unaudited. The unaudited financial statements have been prepared on the same
basis as the audited financial statements, and in the opinion of management,
include all adjustments, consisting only of normal recurring adjustments,
necessary to state fairly the financial information set forth therein, in
accordance with generally accepted accounting principles.

Use of Estimates

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

Cash and Cash Equivalents

The Company considers all highly liquid investments with a remaining maturity
of three months or less when acquired to be cash equivalents.

Equipment

Equipment is depreciated using the straight-line method over estimated useful
lives of three to five years.

Revenue Recognition

The Company recognizes revenue at the time of performance of services.

F-25

REALBID, LLC

Notes to Financial Statements (continued)

(Information subsequent to December 31, 1997 and pertaining to the nine-month
period ended September 30, 1998 is unaudited)

1. Organization and Summary of Significant Accounting Policies (continued)

Profits and Losses and Distributions

Profits and losses of the Company are allocated to the members and
distributions are made in accordance with the Operating Agreement.

2. Commitments

During the nine months ended September 30, 1998, the Company leased its
facilities under two operating leases expiring on November 30, 1998 and
January 5, 1999, each of which was renewed for an additional six month term.
Rent expense totaled $8,490 for the period from June 19, 1997 through December
31, 1997 and $24,914 for the nine-month period ended September 30, 1998.

The Company leases certain equipment under capital leases obligations. The
leases expire on March 27, 2000 and August 23, 2000.

3. Related Party Transactions

Since inception and through the nine month period ended September 30, 1998,
two of the Company's members have loaned the Company funds to be used for
expenditures incurred by the Company in order to conduct business. At December
31, 1997 and at September 30, 1998, loan amounts due to members totaled $83,510
and $96,214, respectively.

4. Income Taxes

Under federal and California law, income or loss of limited liability
companies are passed through to the separate tax returns of the members.
Accordingly, no provision (benefit) for taxes based on income or losses is
shown in the accompanying financial statements.

5. Sale of Assets

On November 6, 1998, COMPS.COM Inc. purchased substantially all of the assets
of the Company for $163,000 and stock options granted to the members.

6. Year 2000 Compliance (Unaudited)

Many currently installed computer systems and software products are coded to
accept only two-digit entries in the date code filed. Beginning in the year
2000, these date code fields will need to accept four-digit entries to
distinguish 21st century dates from 20th century dates. As a result, computer
systems and/or software used by many companies may need to be upgraded to
comply with such "Year 2000" requirements.

Significant uncertainty exists concerning the potential effects associated
with compliance. Although the Company believes that it is year 2000 compliant,
there can be no assurance that coding errors or other defects will not be
discovered in the future. Any year 2000 compliance problem of the Company, its
service providers, its customers or the Internet infrastructure could result in
a material adverse effect on the Company's business, operating results and
financial condition.

F-26

COMPS.COM, Inc.

Unaudited Pro Forma Condensed Statement of Operations

On November 6, 1998, the Company acquired REALBID, LLC (REALBID) for
approximately $3.1 million, including acquisition costs. The unaudited pro
forma condensed statement of operations for the year ended December 31, 1998
give effect to the acquisition of REALBID as if it had occurred on January 1,
1998. The pro forma condensed statement of operations is based on historical
results of operations of the Company for the year ended December 31, 1998 and
REALBID for the period from January 1, 1998 to November 5, 1998. The pro forma
condensed statement of operations should be read in conjunction with the
historical financial statements and notes thereto of the Company and REALBID.

The pro forma condensed statement of operations is presented for illustrative
purposes only and is not necessarily indicative of results of operations that
would have actually occurred had the acquisition of REALBID been effected on
January 1, 1998.

COMPS.COM, REALBID, LLC
Inc. Period from
Year ended January 1, 1998
December 31, to November 5, Pro Forma
1998 1998 Adjustments Pro Forma
------------ --------------- ----------- -----------

Net revenues............. $12,805,761 $ 223,166 -- $13,028,927
Cost of revenues......... 5,746,180 44,988 -- 5,791,168
----------- --------- --------- -----------
Gross profit............. 7,059,581 178,178 -- 7,237,759
Operating expenses:
Selling and marketing... 4,181,945 -- -- 4,181,945
Product development..... 1,230,349 -- -- 1,230,349
General and
administrative......... 2,936,052 293,782 407,750 3,637,584
----------- --------- --------- -----------
Total operating
expenses................ 8,348,346 293,782 407,750 9,049,878
----------- --------- --------- -----------
Loss from operations..... (1,288,765) (115,604) (407,750) (1,812,119)
Other income (expense)... (259,557) -- -- (259,557)
----------- --------- --------- -----------
Net loss................. (1,548,322) (115,604) (407,750) (2,071,676)
Dividend accretion on
preferred stock......... 363,235 -- -- 363,235
----------- --------- --------- -----------
Net loss attributable to
common stockholders..... $(1,911,557) $(115,604) $(407,750) $(2,434,911)
=========== ========= ========= ===========
Net loss per share
attributable to common
stockholders, basic and
diluted................. $ (0.40) (0.51)
=========== ===========
Shares used in computing
net loss attributable to
common stockholders,
basic and diluted....... 4,794,896 4,794,896
=========== ===========

See accompanying notes.

F-27

COMPS.COM, Inc.

Notes to Unaudited Pro Forma Condensed
Statement Of Operations

Note 1.

On November 6, 1998, COMPS.COM, Inc. (the Company) acquired all of the assets
of REALBID, LLC (REALBID) for cash of $163,000 and options to acquire 544,612
shares of the Company's common stock at $1.20 per share. The fair value of the
options was determined to be $3.84 per share as of the date of the acquisition.
As a result, the purchase price is calculated to be $2,308,400, which includes
acquisition costs of $54,400. The purchase price was allocated as follows,
based upon a valuation of the tangible and intangible assets by an independent
appraiser, as well as management's best estimates:

Current assets acquired....................................... $ 64,500
Customer base................................................. 1,791,100
Database and website technology............................... 268,700
Assembled workforce........................................... 94,600
Trademark and trade name...................................... 89,500
----------
$2,308,400

The intangible assets are being amortized over estimated useful lives ranging
from three to five years.

Note 2.

The accompanying unaudited pro forma condensed statement of operations for
the year ended December 31, 1998 gives effect to the acquisition of REALBID as
if it had occurred as of January 1, 1998. The pro forma adjustment reflects
twelve months of amortization expense.

F-28

Inside Back Cover:

NATIONAL COVERAGES

[A map of the U.S. is shown. Nine icons are lined up across the top of the map.
Below each icon is the name of one of the nine property types that we cover in
our database. Each icon will have a picture of the property type that it
represents. White dots are placed on the map in cities representing our current
market. Red dots are placed on the map in cities representing the markets in
our expansion plan. A legend is provided explaining the meaning of the dots.

[LOGO]

Outside back cover:

RELIABLE COMMERCIAL REAL ESTATE

[The back cover will consist of a dark background with white text. There will
be a picture of a database wheel resembling a radar screen with a picture of a
group of commercial real estate buildings inside the database wheel.]

[LOGO]

COMPS.COM, INC.

www.comps.com

PART II

Information Not Required in Prospectus

Item 13. Other Expenses of Issuance and Distribution

The expenses to be paid by the registrant are as follows. All amounts other
than the SEC registration fee, the NASD filing fees and the Nasdaq National
Market listing fee are estimates.

Amount
to
be Paid
--------

SEC registration fee............................................... $ 13,900
NASD filing fee.................................................... 5,500
Nasdaq National Market listing fee................................. 5,000
Legal fees and expenses............................................ 250,000
Accounting fees and expenses....................................... 200,000
Printing and engraving............................................. 120,000
Blue sky fees and expenses (including legal fees).................. 5,000
Transfer agent fees................................................ 10,000
Miscellaneous...................................................... 10,000
--------
Total.......................................................... $619,400
========

Item 14. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933.

As permitted by the Delaware General Corporation Law, the registrant's Second
Restated Certificate of Incorporation includes a provision that eliminates the
personal liability of its directors for monetary damages for breach of
fiduciary duty as a director, except for liability (1) for any breach of the
director's duty of loyalty to the registrant or its stockholders, (2) for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (3) under section 174 of the Delaware General
Corporation Law (regarding unlawful dividends and stock purchases) or (4) for
any transaction from which the director derived an improper personal benefit.

As permitted by the Delaware General Corporation Law, the bylaws of the
registrant provide that (1) the registrant is required to indemnify its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law, subject to certain very limited exceptions, (2) the registrant
may indemnify its other employees and agents as set forth in the Delaware
General Corporation Law, (3) the registrant is required to advance expenses, as
incurred, to its directors and executive officers in connection with a legal
proceeding to the fullest extent permitted by the Delaware General Corporation
Law, subject to certain very limited exceptions and (4) the rights conferred in
the bylaws are not exclusive.

The registrant has entered into indemnification agreements with each of its
directors and executive officers to give such directors and officers additional
contractual assurances regarding the scope of the indemnification set forth in
the registrant's Amended and Restated Certificate of Incorporation and to
provide additional procedural protections. At present, there is no pending
litigation or proceeding involving a director, officer or employee of the
registrant regarding which indemnification is sought, nor is the registrant
aware of any threatened litigation that may result in claims for
indemnification.

II-1

Reference is also made to Section of the Underwriting Agreement, which
provides for the indemnification of officers, directors and controlling persons
of the registrant against certain liabilities. The indemnification provision in
the registrant's Certificate of Incorporation, bylaws and the indemnification
agreements entered into between the registrant and each of its directors and
executive officers may be sufficiently broad to permit indemnification of the
registrant's directors and executive officers for liabilities arising under the
Securities Act of 1933.

The registrant has applied for liability insurance for its officers and
directors.

Reference is made to the following documents filed as exhibits to this
registration statement regarding relevant indemnification provisions described
above and elsewhere in this prospectus:

Exhibit
Document Number
-------- -------

Underwriting Agreement (draft dated , 1999).................. 1.1
Form of Second Restated Certificate of Incorporation of Registrant...... 3.2
Form of Restated Bylaws of Registrant................................... 3.4
Form of Indemnification Agreement....................................... 10.22
Form of Indemnification Agreement....................................... 10.23

Item 15. Recent Sales of Unregistered Securities

The registrant has sold and issued the following securities since January 1,
1996 (such share numbers do not reflect the -for- stock
split):

(1) The registrant from time to time has granted stock options to employees and
consultants in reliance upon exemption from registration pursuant to either
(1) Section 4(2) of the Securities Act of 1933 or (2) Rule 701 promulgated
under the Securities Act of 1933. The following table sets forth certain
information regarding such grants:

Number of Exercise
Shares Prices
--------- -----------

January 1, 1996 to December 31, 1996.................. 117,808 $0.30
January 1, 1997 to December 31, 1997.................. 333,841 $0.30
January 1, 1998 to December 31, 1998.................. 1,559,199 $0.45-$1.20

For additional information concerning these transactions, please see
"Management--Benefit Plans" in the Prospectus included in this registration
statement.

(2) On September 24, 1996, we issued a warrant to purchase 213,068 shares of
Class B common stock to Venture Lending & Leasing, Inc. in consideration
for entering into a certain loan agreement.

(3) On February 9, 1998, we issued 637,790 shares of Series B preferred stock,
warrants to purchase 37,329 shares of Class A common stock and warrants to
purchase 306,097 shares of Class B common stock to various venture
capitalists and insiders for an aggregate consideration of $1,150,000.

(4) On May 18, 1998, we issued 33,500 shares of Class B common stock to a
director upon exercise of options for a consideration of $10,050.

(5) On December 28, 1998, we issued 10,000 shares of Class B common stock to a
director upon exercise of options for a consideration of $3,000.

(6) On February 15, 1999, we issued a warrant to purchase no more than 124,309
shares of Class B common stock to Venture Lending & Leasing, Inc. in
consideration for entering into a certain loan agreement.

The above securities were offered and sold by the registrant in reliance upon
exemptions from registration pursuant to either (1) Section 4(2) of the
Securities Act of 1933 as transactions not involving any public offering, or
(2) Rule 701 promulgated under the Securities Act of 1933. No underwriters were
involved in connection with the sales of securities referred to in this Item
15.

II-2

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits.

Number Description
------ -----------------------------------------------------------------------

1.1* Form of Underwriting Agreement.
3.1 Restated Certificate of Incorporation, as amended.
3.2 Form of Second Restated Certificate of Incorporation to be in effect
upon the closing of this offering.
3.3 Bylaws.
3.4 Form of Restated Bylaws to be in effect upon the closing of this
offering.
4.1* Specimen common stock certificate.
5.1* Opinion of Brobeck, Phleger & Harrison LLP.
10.1 Amended and Restated Investor Rights Agreement among us and certain of
our stockholders, dated February 9, 1998.
10.2 Stock and Warrant Purchase Agreement among us and the purchasers
identified in Exhibit A to the Agreement, dated October 14, 1994.
10.3 Stock and Warrant Purchase Agreement among us and the purchasers
identified in Exhibit A to the Agreement, dated February 9, 1998.
10.4 Form of Class B Common Stock Warrant between us and the persons listed
on the attached schedule, dated October 14, 1994.
10.5 Class A Common Stock Warrant issued to Christopher A. Crane, dated
February 9, 1998.
10.6 Form of Class B Common Warrant between us and the persons listed on the
attached schedule, dated February 9, 1998.
10.7 Warrant to Purchase 213,068 Shares of Class B Common Stock between us
and Venture Lending & Leasing, Inc., dated September 24, 1996.
10.8 Loan Agreement between us and Venture Lending & Leasing, Inc., dated
September 24, 1996.
10.9 Security Agreement between us and Venture Lending & Leasing, Inc.,
dated September 24, 1996.
10.10 Trademark Collateral Assignment between us and Venture Lending &
Leasing, Inc., dated September 24, 1996.
10.11 Patent Collateral Assignment between us and Venture Lending & Leasing,
Inc., dated September 24, 1996.
10.12 Form of Promissory Note between us and Venture Lending & Leasing, in
such principal amounts as set forth on the attached schedule.
10.13 Form of Promissory Note between us and Venture Lending & Leasing, in
such principal amounts as set forth on the attached schedule.
10.14 Office Building Lease between us and Comps Plaza Associates, L.P.,
dated January 31, 1999.
10.15 Form of Employment and Incentive Compensation Agreement between us and
the employees listed on the attached schedule.
10.16 Executive Employment Agreement between us and Christopher A. Crane,
dated October 14, 1994.
10.17 Form of Employment Agreement between us and the employees listed on the
attached schedule, dated November 6, 1998.
10.18 Covenant Not to Compete between us and Robert C. Beasley, dated October
14, 1994.
10.19 Form of Non-Competition and Non-Disclosure Agreement between us and the
parties listed on the attached schedule, dated November 6, 1998.
10.20 Form of Non-Competition and Non-Disclosure Agreement between us and the
parties listed on the attached schedule, dated January 7, 1999.
10.21 Form of Employee Confidentiality and Inventions Agreement.
10.22 Form of Indemnification Agreement between us and each of our directors.
10.23 Form of Indemnification Agreement between us and each of our officers.
10.24 Software License Agreement between us and Qualitative Marketing
Software, Inc., dated February 27, 1997.
10.25 License and Subscription Agreement between us and Transamerica
Information Management Services, dated December 17, 1992.

II-3

Number Description
------ -----------------------------------------------------------------------

10.26 License Agreement between us and NCompass Labs Inc., dated December 2,
1998.
10.27 Amended and Restated Stock Option Plan.
10.28 Form of Amended and Restated Stock Option Plan Incentive Stock Option
Agreement.
10.29 Form of Amended and Restated Stock Option Plan Non-Qualified Stock
Option Agreement.
10.30 The 1998 Equity Participation Plan.
10.31 Form of 1998 Equity Participation Plan Incentive Stock Option
Agreement.
10.32 Form of 1998 Equity Participation Plan Non-Qualified Stock Option
Agreement.
10.33 The 1998 Supplemental Option Plan.
10.34 1998 Supplemental Option Plan Form of Notice of Grant of Stock Option.
10.35 1999 Stock Incentive Plan.
10.36* Form of 1999 Stock Incentive Plan Notice of Grant.
10.37* Form of 1999 Stock Incentive Plan Stock Option Agreement.
10.38 Employee Stock Purchase Plan.
10.39 Assignment and Assumption Agreement between us and REALBID LLC, dated
November 6, 1998.
10.40 Intellectual Property Assignment between us and REALBID LLC, dated
November 6, 1998.
10.41 Service Mark Assignment between us and REALBID LLC, dated November 6,
1998.
10.42 Asset Purchase Agreement between us, The Land Sales Resource and Kitty
Layne, dated July 17, 1995.
10.43+ Purchase Agreement between us and TRW Redi Property Data, dated August
31, 1995, as amended by the Addendum, dated November 20, 1997.
10.44+ Asset Purchase Agreement among us, REALBID LLC, Emmett DeMoss and
Robert Potter, dated November 6, 1998.
10.45+ Asset Purchase Agreement between us and AOBR, Inc., dated December 4,
1998.
10.46 Loan and Security Agreement between us and Venture Lending & Leasing
II, Inc., dated February 12, 1999.
10.47 Patent Collateral Assignment Agreement between us and Venture Lending &
Leasing II, Inc., dated February 12, 1999.
10.48 Trademark Collateral Assignment between us and Venture Lending &
Leasing II, Inc., dated February 12, 1999.
10.49 Warrant to Purchase an aggregate of $225,000 of Class B Shares of
Common Stock between us and Venture Lending & Leasing II, Inc., dated
February 12, 1999.
11.1* Statement re: Computation of Basic and Diluted Net Loss Per Share.
23.1 Consent of Ernst & Young LLP
23.2* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (See Signature Page on Page II-6).
27.1 Financial Data Schedule.

- --------
* To be filed by amendment.
+ We have sought confidential treatment pursuant to Rule 406 of portions of
the referenced exhibit.

(b) Financial Statement Schedules.

Schedule II--Valuation and Qualifying Accounts.

All other schedules are omitted because they are not required, are not
applicable or the information is included in our financial statements or notes
thereto.

Item 17. Undertakings

The undersigned Registrant hereby undertakes to provide to the Underwriter at
the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.

II-4

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933 the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424 (b)(1) or (4), or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933 each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-5

Signatures

Pursuant to the requirements of the Securities Act of 1933 the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in San Diego, California, on this 24th
day of February, 1999.

COMPS.COM, INC.

By: /s/ Christopher A. Crane
----------------------------------
Name: Christopher A. Crane
Title: President and Chief Executive
Officer

Power of Attorney

We, the undersigned directors and/or officers of COMPS.COM, INC. hereby
severally constitute and appoint Christopher A. Crane, President and Chief
Executive Officer, and Karen Goodrum, Vice President of Finance and
Administration and Chief Financial Officer, and each of them individually, with
full powers of substitution and resubstitution, our true and lawful attorneys,
with full powers to them and each of them to sign for us, in our names and in
the capacities indicated below, the Registration Statement on Form S-1 filed
with the SEC, and any and all amendments to said Registration Statement
(including post-effective amendments), and any registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933 in connection with the
registration under the Securities Act of 1933 of our equity securities, and to
file or cause to be filed the same, with all exhibits thereto and other
documents in connection therewith, with the SEC, granting unto said attorneys,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as each of them might or could do in person, and
hereby ratifying and confirming all that said attorneys, and each of them, or
their substitute or substitutes, shall do or cause to be done by virtue of this
Power of Attorney.

Pursuant to the requirements of the Securities Act of 1933 this Registration
Statement has been signed by the following persons in the capacities indicated
on February 24, 1999:

Signature Title(s) Date
--------- ------- ----

/s/ Christopher A. Crane Chairman of the Board, President and February 24, 1999
____________________________________ Chief Executive Officer (principal
Christopher A. Crane executive officer)

/s/ Karen Goodrum Vice President of Finance and February 24, 1999
____________________________________ Administration and Chief Financial
Karen Goodrum Officer (principal financial and
accounting officer) and Secretary

/s/ Gregory M. Avis Director February 24, 1999
____________________________________
Gregory M. Avis

/s/ Robert C. Beasley Director February 24, 1999
____________________________________
Robert C. Beasley

II-6

Consent of Ernst & Young LLP, Independent Auditors

We consent to the reference to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our report on the COMPS.COM,
Inc. financial statements dated February 5, 1999 (except for Note 15, as to
which the date is February 22, 1999) and our report on the REALBID, LLC
financial statements dated February 17, 1999, in the Registration Statement
(Form S-1) and related Prospectus of COMPS.COM, Inc. dated February 24, 1999.

Our audits also included the financial statement schedule of COMPS.COM, Inc.
for the three years ended December 31, 1998 listed in Item 16(b). This schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial statement
schedule referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

Ernst & Young LLP

San Diego, California
February 23, 1999

II-7

Schedule II

COMPS.COM, Inc.

Valuation And Qualifying Accounts

Additions
--------------------
Balance
at Charged to Balance
Allowance for Doubtful Beginning Costs and at End of
Accounts of Year Expenses Other (1) Deductions Year
- ---------------------- --------- ---------- --------- ---------- ---------

Year ended December 31,
1996..................... 362,913 -- 644,322 437,109 570,126
Year ended December 31,
1997..................... 570,126 39,491 1,238,593 463,968 1,384,242
Year ended December 31,
1998..................... 1,384,242 167,858 260,627 347,805 1,464,922

- --------
(1) These amounts have been offset against deferred subscription revenue.

II-8

Index to Exhibits

Number Description
------ -----------------------------------------------------------------------

10.26 License Agreement between us and NCompass Labs Inc., dated December 2,
1998.
10.27 Amended and Restated Stock Option Plan.
10.28 Form of Amended and Restated Stock Option Plan Incentive Stock Option
Agreement.
10.29 Form of Amended and Restated Stock Option Plan Non-Qualified Stock
Option Agreement.
10.30 The 1998 Equity Participation Plan.
10.31 Form of 1998 Equity Participation Plan Incentive Stock Option
Agreement.
10.32 Form of 1998 Equity Participation Plan Non-Qualified Stock Option
Agreement.
10.33 The 1998 Supplemental Option Plan.
10.34 1998 Supplemental Option Plan Form of Notice of Grant of Stock Option.
10.35 1999 Stock Incentive Plan.
10.36* Form of 1999 Stock Incentive Plan Notice of Grant.
10.37* Form of 1999 Stock Incentive Plan Stock Option Agreement.
10.38 Employee Stock Purchase Plan.
10.39 Assignment and Assumption Agreement between us and REALBID LLC, dated
November 6, 1998.
10.40 Intellectual Property Assignment between us and REALBID LLC, dated
November 6, 1998.
10.41 Service Mark Assignment between us and REALBID LLC, dated November 6,
1998.
10.42 Asset Purchase Agreement between us, The Land Sales Resource and Kitty
Layne, dated July 17, 1995.
10.43+ Purchase Agreement between us and TRW Redi Property Data, dated August
31, 1995, as amended by the Addendum, dated November 20, 1997.
10.44+ Asset Purchase Agreement between us, REALBID LLC, Emmett DeMoss and
Robert Potter, dated November 6, 1998.
10.45+ Asset Purchase Agreement among us and AOBR, Inc., dated December 4,
1998.
10.46 Loan and Security Agreement between us and Venture Lending & Leasing
II, Inc., dated February 12, 1999.
10.47 Patent Collateral Assignment Agreement between us and Venture Lending &
Leasing II, Inc., dated February 12, 1999.
10.48 Trademark Collateral Assignment between us and Venture Lending &
Leasing II, Inc., dated February 12, 1999.
10.49 Warrant to Purchase an aggregate of $225,000 of Class B Shares of
Common Stock between us and Venture Lending & Leasing II, Inc., dated
February 12, 1999.
11.1* Statement re: Computation of Basic and Diluted Net Loss Per Share.
23.1 Consent of Ernst & Young LLP
23.2* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (See Signature Page on Page II-6).
27.1 Financial Data Schedule.

- --------
* To be filed by amendment.
+ We have sought confidential treatment pursuant to Rule 406 of portions of
the referenced exhibit.