SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

(Mark One)

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

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

COMMISSION FILE NUMBER: 0-17508

TELESCAN, INC.
(Exact name of Registrant as specified in its charter)

DELAWARE 72-1121748
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

5959 CORPORATE DRIVE, SUITE 2000
HOUSTON, TEXAS 77036
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:
(281) 588-9700

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK, $.01 PAR VALUE PER SHARE
(Title of Class)

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

Yes [X] No [ ]

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

The aggregate market value of the voting stock held by non-affiliates of the
Registrant on March 16, 2001, based upon the average bid and asked price of the
common stock on Nasdaq National Market for such date, was approximately $15
million. The number of outstanding shares of the Registrant's common stock on
March 16, 2001 was 16,296,026.

TELESCAN, INC.
FORM 10-K REPORT INDEX

PART I......................................................................................3

ITEM 1. BUSINESS.......................................................................3
ITEM 2. PROPERTIES.....................................................................6
ITEM 3. LEGAL PROCEEDINGS..............................................................7
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................7

PART II.....................................................................................8

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..........8
ITEM 6. SELECTED FINANCIAL DATA........................................................9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS...............................................................10
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....................18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...................................18
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE..........................................................18

PART III...................................................................................20

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............................20
ITEM 11. EXECUTIVE COMPENSATION........................................................23
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................26
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................27

PART IV....................................................................................29

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K........................29

PART I

ITEM 1. BUSINESS

GENERAL

o The Consumer Division delivers investment advice and education
to individual investors online through two Web properties,
INVESTools.com and WallStreetCity.com. INVESTools.com
publishes actionable investment advice and education, and
WallStreetCity.com is well known for its investment search
tool, ProSearch. The Division also offers private-label
subscription marketing and e-mail list management services.

o The Business-to-Business Division offers an array of online
financial solutions, including quotes, charts, news, portfolio
reports and stock and mutual fund screening tools, to
businesses seeking to expand their offerings online and gain
greater cost efficiency through outsourcing.

CORPORATE BACKGROUND

Telescan, Inc. is a Texas corporation formed in 1983 to manufacture
software and an online database containing analytical tools for
financial analysis. In 1986, D.B. Technology, Inc., a Texas corporation
("DB"), was formed for the purpose of acquiring Telescan, Inc. Telescan,
Inc. merged into D.B., which filed a d.b.a. to use the name Telescan,
Inc. In 1988, Max Ret, Inc., a Delaware corporation, was formed for the
purpose of acquiring the outstanding common stock of D.B. In 1989, Max
Ret, Inc. issued 75% of its then outstanding stock to acquire all of the
outstanding common stock of D.B. Max Ret, Inc. then changed its name to
Telescan, Inc.

On May 28, 1999, the Company completed the acquisition of INVESTools,
Inc. pursuant to which the sellers exchanged all of their shares of
INVESTools, Inc. for shares of the Company's common stock in a business
combination that was accounted for as a pooling-of-interests.

The Company created the Web properties, WallStreetCity.com and
INVESTools.com.

SERVICES

CONSUMER DIVISION

The Consumer Division publishes investment advice, education, tools
and analytics for individual investors online through two Web
properties, INVESTools.com and WallStreetCity.com. In addition, the
Consumer Division operates a subscription marketing service and an
e-mail list management service. The division manages more than
40,000 paying subscribers.

INVESTools.com features continually updated portfolio advice from
independent money managers. The site receives 300,000 unique
visitors per month and provides more than 200,000 investors with a
free weekly e-mail digest of recommendations. Customers pay a
monthly fee to access content delivered by 34 investment advisors.
The content is enhanced by interactive online tools such as e-mail
hotlines, discussion threads and portfolio alerts. INVESTools.com
differentiates itself from standard investment newsletter Web sites
by developing and supporting online interfaces that encourage
interactive relationships between advisors and their subscribers,
and among the subscribers themselves.

WallStreetCity.com provides investors with a historical market
database, free real-time quotes, streaming real-time data feeds,
in-depth industry group analysis and powerful investment search and
portfolio tools. WallStreetCity.com's ProSearch stock screening
tools allows investors to search for stocks that match their unique
investment goals. By selecting up to 40 different criteria in a
single search, investors can screen thousands of stocks through
customized searches or select pre-built searches that are
complemented with commentary and education. While a wealth of
information is

available on the site at no charge, Telescan's search technology and
streaming real-time data are available only to paid subscribers.

The Subscription Marketing Service helps online financial
information companies acquire new subscribers through the use of
e-mail lists in which the subscriber has elected to receive
financial-related advertisements.

The E-mail Marketing Service helps online financial information
companies manage their subscriber e-mail lists, send value-added
e-mail content and track advertising results. Although e-mail
addresses are made available to third parties as part of a list
rental, subscriber information is not transferred to third party and
INVESTools.com retains the right to such information.

BUSINESS-TO-BUSINESS DIVISION

As an Application Service Provider (ASP), the Company's
Business-to-Business Division offers businesses of varying sizes an
array of online financial solutions to create or enhance an existing
Website, along with site development and hosting services. Financial
online solutions include quotes, charts, news, portfolio reports,
equity and mutual fund screening tools, Telescan commentary and
third-party products. Solutions can be developed and operational in
a fraction of the time and cost it would take an organization to do
it independently, without major investments in hardware, networking
or technical support.

BUSINESS STRATEGY

In late 1999, the Company began to pursue an aggressive three to
five-year growth target to penetrate global markets and to expand
organically and through acquisitions. As the Company witnessed the
weakness in the Internet financial marketplace during 2000, particularly
related to technology companies, the Company reevaluated its business
strategy and made adjustments designed to ensure the Company would
emerge as a key player in the industry. As part of this reevaluation,
the Company began refocusing its attention on its core domestic
operations and made organizational and governance changes designed to
enhance growth. The Company's resulting strategy seeks to expand the
Company's revenue base and scale the Company's cost structure in line
with revenues. Management will execute this strategy through: 1) new
services and technology; 2) new market penetration; and 3) mergers with
or acquisitions of complementary businesses.

NEW SERVICES

The Company reviewed its internet services and determined that
additional services would need to be added. To enhance existing
offerings, the Company added new services through relationships with
third parties and redesigned its WallStreetCity.com Web site.

The Consumer Division introduced several new investment advisory
publications during 2000. The publications are available to
investors by subscription through INVESTools.com and include:

o "Schaeffer's Internet Stock Alert" and "10 Days to
Successful Options Trading" by Bernie Schaeffer

o "The Pure Fundamentalist" by Alvin Toral

o "The Technology Digest" by Nancy Zambell

o "The MoneyPaper" by Vita Nelson

o "The Buyback Premium Portfolio" by David Fried

o "FXC's Top 10 Stock Picks for 2001 Report" by Frank Curzio

o "The 2001 Investor Survival Guide"

Investment advisors are independent contractors operating under
non-exclusive distribution agreements in which INVESTools.com pays
the advisory royalty fees. Advisors are selected based on their
successful long-term track record, the ability to clearly
communicate with subscribers on a regular basis and the ability to
stick to an understandable, actionable investing style that serves
to immediately benefit users. Although this approach limits the
number of advisors the Company will work with, it reinforces
INVESTools.com's position as a trusted distributor of investment
advice in the marketplace.

During 2000, the Consumer Division also relaunched
WallStreetCity.com with a new interface allowing investors to easily
navigate the site's suite of analytical tools. The redesigned site
features a new floating stock ticker and redesigned portfolios.

With the addition of third-party products from FinanceCenter.com,
Money.net, Prophet Financial and TeamVest LLC, the Company continues
to offer its business clients a unique set of solutions to meet
their changing needs.

NEW TECHNOLOGY

In addition to new products, Telescan modified its technology during
the year to build a stable, scalable platform for the future and to
support the Company's product development culture. Changes made to
the Company's technological platform created a more flexible and
modularized architecture. In addition, implementation of caching
technology increased the speed and performance of the Company's
hosting services.

The Company also expanded its offerings to wireless platforms,
including Wireless Application Protocol (WAP) enabled cellular
phones and the Palm(TM) VII and modem equipped Palm V series of
handheld computers.

MARKET PENETRATION

The Company redirected its focus to the domestic market and will
continue to concentrate its efforts on penetrating the previously
untapped middle market of small and mid-sized companies. The Company
began to market its application services to smaller companies more
aggressively during the second half of 2000, following completion of
changes to the Company's technology platform.

As a result of changes in the Internet and the high technology
industries during 2000, Telescan began redirecting its focus from
aggressive global expansion to keeping pace with the changing market
and meeting clients' needs. With the addition of multiple foreign
exchanges to the Company's products and services throughout the
year, the Company believes current market data feeds are sufficient
to meet anticipated demands at this time. Telescan will continue to
explore opportunities to penetrate global markets, particularly in
Europe, Asia and Latin America.

MERGERS & ACQUISITIONS

During the year, Telescan evaluated a number of opportunities to add
key technologies, enhance market presence and complement existing
services through merger and acquisition activities. Aggressive
consolidation within the technology and financial services
industries continues to encourage the Company to explore merger and
acquisition opportunities to add products and/or technologies,
increase market share, add to critical mass and improve liquidity.

MARKETING

The Company's marketing objectives are focused on increasing the number
of new customers, selling additional products and services to existing
customers and lowering customer acquisition costs. The Company utilizes
public relations campaigns, e-mail and print advertising, banner ads,
joint marketing agreements and trade show participation as marketing
tools to achieve these objectives.

Customer retention is also an integral component in the Company's
marketing strategy. Maintaining and developing the existing customer
base is accomplished by providing comprehensive and high quality data,
ongoing content and product updates, offering customer training and
conducting reactivation campaigns to encourage inactive customers to
return.

CUSTOMERS

The Company has an agreement with BPI Communications, Inc. ("BPI") to
provide BPI hosting and development services for multiple BPI Web sites.
Revenue for these services represented 12% and 10% of total revenue for
2000 and 1999, respectively. This agreement was amended on December 31,
2000 to a fixed fee arrangement for the first three months of 2001 and
then the agreement and the fees are renewed month-to-month thereafter.

The Company has a license agreement with NBC, whereby NBC uses
Telescan's proprietary Internet technology for use on CNBC.com, a
comprehensive Web site for personal finance. Under the agreement,
Telescan developed the financial content portion of the CNBC.com Web
site and currently provides hosting services for such content. Revenue
from these services accounted for 10% and 13% of total revenue in 2000
and 1999, respectively. The Company generates revenue under the
agreement from cost reimbursement, fixed monthly license fees and a
percentage of advertising revenue generated from the site.

There were no other customers that generated greater than 10% revenue in
2000, 1999, or 1998.

PROPRIETARY RIGHTS

The Company attempts to protect its trade secrets and other proprietary
information with product development partners, employees and consultants
through nondisclosure agreements, contract provisions and copyright,
patent, trademark and trade secret laws. With respect to technologies
that the Company has licensed to third parties for use in specific
applications or platforms, the Company has entered into technology
licensing agreements, which are intended to protect the proprietary
rights of the Company related to the source code of the Company's
products as a trade secret and as an unpublished copyright work. The
Company believes that its products, trademarks and other proprietary
rights do not infringe on the proprietary rights of third parties, and
the Company is not aware of any current infringement claims against the
Company.

COMPETITION

The Company competes with companies that operate proprietary platforms
and/or Internet financial Web sites, many of which have significantly
greater financial, technical and marketing resources than the Company.
Despite recent market volatility, new competitors continue to enter the
marketplace as a result of perceived future opportunities. The Company
believes the principal competitive factors in the Internet financial
services market include system performance, product differentiation,
quality of content, user friendliness, price, customer support,
effective marketing techniques and the ability to earn a profit. With a
redirected focus towards profitability, the Company believes that it
competes effectively in these areas. However, continued competitive
pressures could result in price reductions, increased spending on
product development and reduced market share, which could adversely
affect the Company's financial condition and operating results. The
Company believes that its revenue expansion strategy to: 1) add new
products and technology; 2) penetrate new markets; and 3) merge with or
acquire complementary businesses, will serve to lessen the impact of
future competitive pressures on the Company.

EMPLOYEES

As of December 31, 2000, the Company had 167 full-time employees.
Although the Company experienced a series of layoffs in 2000 to align
staffing and expenses with forecasted revenues, Telescan believes that
its relationship with its employees is good. In an effort to motivate
and retain the Company's remaining core talent pool in the existing
tight employment market, the Company accelerated the annual distribution
of fiscal year 2001 stock option awards to the staff and management to
October 2000. Additionally, the Company vested all outstanding stock
options, most of which had an exercise price that was significantly
higher than the Company's current stock price.

None of the Company's employees is represented by a labor union and the
Company has never experienced a work stoppage.

GOVERNMENTAL REGULATION

The Company is not subject to direct regulation other than regulation
generally applicable to businesses. However, changes in the regulatory
environment relating to the Internet industry could have an effect on
the Company's business, financial condition and operating results. The
Company is unable at this time to predict the impact, if any, future
regulation may have on its business.

While not currently regulated, there is a possibility that the Company
may become subject to laws governing investment advisors or other
securities professionals. Regulations in this area are complex and
ensuring compliance could cause a financial burden and become a time
consuming process. There is no assurance the Company could make the
necessary adjustments to achieve compliance.

The Company files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange
Commission ("SEC"). Any document the Company files with the SEC may be
read or copied at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. The Company's SEC
filings are also available to the public at the SEC's Web site located
at http://www.sec.gov.

ITEM 2. PROPERTIES

The Company's principal executive offices, as well as its principal
marketing, computer operations and product development activities, are
located in leased facilities in Houston, Texas, consisting of a total of
77,116 square

feet. The Company also leases office space for marketing and
administrative personnel in New York, New York and Menlo Park,
California. The monthly costs of these leases are: Houston, Texas:
$82,126; New York, New York: $9,936; and Menlo Park, California:
$29,036.

In an effort to further reduce costs, the Company is exploring options
to sub-lease excess office space, primarily located at the Company's
Houston facility, while maintaining adequate reserves for future needs.

ITEM 3. LEGAL PROCEEDINGS

From time to time the Company is involved in certain legal actions
arising in the ordinary course of business. It is the opinion of
management that such litigation will be resolved without a material
effect on the Company's financial position or results of operations.

In August 2000, a lawsuit (Avner Hacohen v. Telescan, Inc., No.
00CIV.5937) was filed against the Company in the United States District
Court for the Southern District of New York by a former employee, Avner
Hacohen, alleging that the Company failed to grant him certain stock
options to which he was entitled. The plaintiff seeks monetary
compensation for damages alleged to exceed $1 million, plus interest and
attorney fees. The Company has responded to the complaint and the case
is proceeding before the court. Although no assurances can be given, the
Company believes that the ultimate resolution of the litigation will not
have a material adverse impact on the Company's financial position or
results of operations. The Company believes that (i) Mr. Hacohen's claim
is without merit since he has no signed formal grant of stock options
and (ii) almost ten years has elapsed since the termination of his
employment and the statute of limitations has expired on Mr. Hacohen's
claim.

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

During the fourth quarter of 2000, there were no matters submitted to a
vote of the security holders through solicitation of proxies or
otherwise.

PART II

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

MARKET INFORMATION

The Company's common stock is traded on the Nasdaq National Market under
the symbol "TSCN." The following table sets forth, for the periods
indicated, the high and low closing prices for the common stock as
reported by the Nasdaq National Market. The bid prices reflect
inter-dealer quotations, do not include retail markups, markdowns or
commissions and do not necessarily represent actual transactions.

COMMON STOCK PRICES
----------------------------------
HIGH LOW
------------- -------------

2000
Quarter ended March 31 $ 27.50 $ 17.72
Quarter ended June 30 23.88 7.06
Quarter ended September 30 8.25 1.81
Quarter ended December 31 2.81 0.97

1999
Quarter ended March 31* $ 22.94 $ 7.50
Quarter ended June 30* 26.38 16.50
Quarter ended September 30 24.31 13.25
Quarter ended December 31 32.88 14.06

*The Company's stock was traded on the Nasdaq
Small-Cap Market prior to July 1, 1999.

On March 16, 2001, the last closing price of the Company's common stock
as reported by the Nasdaq National Market was $.94. As of March 16,
2001, the Company had approximately 200 stockholders of record, and
believes it has approximately 3,000 beneficial holders.

DIVIDEND POLICY

The convertible preferred stock dividend rate was 5% through December
31, 2000. In January 2001, holders of the Company's preferred stock
exchanged all of their stock for a new class of preferred stock paying a
4% dividend rate. The dividend is paid quarterly.

The Company has never declared a cash dividend on its common stock. The
Board of Directors currently intends to retain all earnings for use in
the Company's business, and therefore, does not anticipate paying any
cash dividends on its common stock in the foreseeable future. The
declaration of dividends, if any, in the future would be subject to the
discretion of the Board of Directors, which may consider factors such as
the Company's results of operations, financial condition, capital needs
and acquisition strategy, among other things. See "Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's consolidated financial statements and the
notes thereto.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected historical consolidated
financial data for the periods indicated. The selected data should be
read in conjunction with "Item 7-Management's Discussion and Analysis of
Financial Condition and Results of Operations" and with the Company's
consolidated financial statements and notes thereto.

(in thousands, except per share amounts)
STATEMENT OF OPERATIONS YEARS ENDED DECEMBER 31,
----------------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------

Revenue $ 35,938 $ 26,438 $ 15,234 $ 16,467 $ 13,721
Cost of revenue 17,196 15,072 10,436 9,471 8,908
Marketing, general and administrative expenses 25,199 14,364 11,075 8,492 8,943
Write down of assets and other charges 11,742 -- 1,530 -- --
Cost of acquisition opportunities 5,009 3,287 -- -- --
Gain on marketable securities sales (19,432) -- -- -- --
Realized loss on marketable securities impairment 27,668 -- -- -- --
Interest and other (income) expense, net (800) (379) 555 68 (4)
Minority interest loss -- (56) (142) (409) (345)
-------- -------- -------- -------- --------
Loss from continuing operations (30,644) (5,850) (8,220) (1,155) (3,781)
Income (loss) from discontinued operations -- -- 19 (19) --
-------- -------- -------- -------- --------
Net loss (30,644) (5,850) (8,201) (1,174) (3,781)
Preferred dividends (including incremental yield) (150) (150) (138) -- --
-------- -------- -------- -------- --------
Loss attributable to common stockholders $(30,794) $ (6,000) $ (8,339) $ (1,174) $ (3,781)
======== ======== ======== ======== ========
NET LOSS PER COMMON SHARE
(A) - BASIC AND DILUTED $ (1.85) $ (0.39) $ (0.66) $ (0.10) $ (0.32)
======== ======== ======== ======== ========

BASIC AND DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 16,665 15,486 12,654 12,203 11,655
======== ======== ======== ======== ========

BALANCE SHEET DATA DECEMBER 31,
----------------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------

Working capital $ 4,156 $ 10,049 $ (641) $ 956 $ 436
Total assets 19,440 82,899 13,401 13,178 11,673
Total long-term obligations 46 11,500 2,366 507 784
Total stockholders' equity 9,427 57,770 4,771 9,160 7,750

(a) The earnings per share amount for discontinued operations is $0.00

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

The following discussion should be read in conjunction with the
Company's financial statements and related notes, and the preceding
"Item 6 - Selected Financial Data."

FORWARD-LOOKING INFORMATION

Certain matters discussed herein may contain forward-looking statements
that are subject to risks and uncertainties. Such risks and
uncertainties include, but are not limited to, the following: 1) the
volatile nature of the securities business, 2) the uncertainties
surrounding the rapidly evolving markets in which the Company competes,
3) the uncertainties surrounding technological change and the Company's
dependence on computer systems, 4) the Company's dependence on its
intellectual property rights, 5) the success of marketing efforts by
third parties in revenue sharing agreements, 6) the potential of
increased governmental regulation of the telecommunications industry and
the Internet, 7) the changing demands of customers, and 8) the
arrangements with present and future customers and third parties.

Should one or more of these risks or uncertainties materialize or should
any of the underlying assumptions prove incorrect, actual results of
current and future operations may vary materially from those
anticipated.

GENERAL

CORPORATE BACKGROUND

The Company created the Web properties, WallStreetCity.com and
INVESTools.com.

SERVICES

CONSUMER DIVISION

INVESTools.com features continually updated portfolio advice from
independent money managers. The site receives 300,000 unique
visitors per month and provides more than 200,000 investors with a

free weekly e-mail digest of recommendations. Customers pay a
monthly fee to access content delivered by 34 investment advisors.
The content is enhanced by interactive online tools such as e-mail
hotlines, discussion threads and portfolio alerts. INVESTools.com
differentiates itself from standard investment newsletter Web sites
by developing and supporting online interfaces that encourage
interactive relationships between advisors and their subscribers,
and among the subscribers themselves.

BUSINESS-TO-BUSINESS DIVISION

BUSINESS STRATEGY

NEW SERVICES

The Consumer Division introduced several new investment advisory
publications during 2000. The publications are available to
investors by subscription through INVESTools.com and include:

o "Schaeffer's Internet Stock Alert" and "10 Days to
Successful Options Trading" by Bernie Schaeffer

o "The Pure Fundamentalist" by Alvin Toral

o "The Technology Digest" by Nancy Zambell

o "The MoneyPaper" by Vita Nelson

o "The Buyback Premium Portfolio" by David Fried

o "FXC's Top 10 Stock Picks for 2001 Report" by Frank Curzio

o "The 2001 Investor Survival Guide"

NEW TECHNOLOGY

MARKET PENETRATION

MERGERS & ACQUISITIONS

2000 COMPARED TO 1999

RESULTS OF OPERATIONS

Revenue increased $9.8 million or 38% over 1999. In the Consumer
Division, revenue increased 32% or $3.9 million, primarily due to a
$4.1 million increase in online subscription sales and a $1.9
million increase in advertising revenue. These gains were offset by
approximately $2.1 million in declines in fees from dial up and
modem accessed subscriptions as the Company continued to migrate its
customers to Internet services.

Revenue from the Business-to-Business Division increased $5.7
million or 62% over 1999. Contracts with new customers added
approximately $1.6 million in development revenue over 1999.
Amortization of deferred license and hosting revenue was
approximately $2.5 million in 2000, an

increase of approximately $1.3 million over 1999. An additional $1.7
million of deferred revenue was recognized in 2000 due to the early
termination or modification of contracts with GlobalNet
Financial.com, Inc. ("GlobalNet"), GRO Corporation and InvestorIQ,
plc. Cancellation of these contracts, or elimination of certain
provisions, relieved the Company of future performance obligations
under these contracts and thus, the related deferred license and
hosting fees are recognized currently into revenue.

Cost of revenue increased $2.2 million or 15% over 1999, but
decreased as a percentage of revenue from 56% in 1999 to 47% in
2000. The increase in costs was primarily due to increased royalties
in the Consumer Division, which was offset by decreased software
amortization costs in the Business-to-Business Division

Selling and marketing expenses increased $1.9 million over 1999 or
41%, consistent with the growth in revenue. As a percentage of
revenue, selling and marketing expenses were 18% in 2000 and 1999.

General and administrative expenses increased $8.9 million or 92%
over the prior year. As a percentage of revenue, these expenses
increased to 52% from 37% in the prior year. Much of this increased
cost was due to fluctuations in the size of the Company's
organization during 2000. By May 2000, the Company had 287
employees, a 21% increase over December 1999 in anticipation of
market expansion. In addition, the Company had expanded the leased
space in its Houston operations by an additional 23,000 square feet,
or 43% over the prior year. This growth in personnel and space
increased expenses for salaries, recruitment, rent, equipment,
consultants, contract labor and other costs during the first half of
2000. As the Company reevaluated its strategy, it began to reduce
headcount and take aggressive steps to control costs. As a result of
these efforts, in the fourth quarter of 2000, headcount decreased to
167 and general and administrative expense decreased compared to the
third quarter of 2000.

OTHER ACTIVITY DURING THE YEAR

MERGERS & ACQUISITIONS

During the year, Telescan evaluated a number of opportunities to
add key technologies, enhance market presence and complement
existing products and services through merger and acquisition
activities.

In August 2000, the Company entered into a merger agreement with
GlobalNet in which each share of Telescan common stock would be
exchanged for 0.50 shares of GlobalNet common stock. During the
ensuing due diligence period, the companies determined that
their business strategies would be best served if they were
pursued separately. In September 2000, a termination agreement
was signed and costs totaling $4.5 million associated with this
acquisition opportunity were expensed. A summary of the material
terms of the termination agreement is as follows:

o The Company exchanged 272,500 shares of GlobalNet common
stock the Company owned for the 545,000 shares of the
Company's common stock that GlobalNet owned. The shares of
Company common stock were subsequently cancelled.

o GlobalNet purchased 276,495 shares of GlobalNet common stock
the Company owned for $6.00 per share.

o GlobalNet paid the Company $250,000 in cash as compensation
for expenses incurred in connection with the proposed
acquisition opportunity.

o The Company and GlobalNet terminated most of their
commercial contracts and agreements, and dismissed all
related outstanding receivables. The Company accelerated
recognition of deferred revenue of $1.0 million currently
into revenue on these contracts as the termination relieved
the Company of future performance obligations under these
contracts.

o The Company agreed it would not sell, transfer, or dispose
of its remaining 1.9 million shares of GlobalNet common
stock until July 2001, except for 50,000 shares per month
for six consecutive months beginning October 1, 2000. During
the fourth quarter of 2000, the Company sold 150,000 shares
of GlobalNet stock on the open market under the terms of
this agreement.

Additional merger and acquisition opportunities the Company
explored during 2000 resulted in an additional $545,000 in cost
of acquisition opportunities expensed.

Aggressive consolidation within the technology and financial
services industries encourages the Company to explore merger and
acquisition opportunities to add products and/or technologies,
increase market share, add to critical mass and improve
liquidity.

CAPITALIZED SOFTWARE WRITE OFF

During 2000, the Company modified its technology to build a
stable, scalable platform for the future and to support the
Company's product development culture. Changes made to the
Company's technological platform created a more flexible and
modularized architecture. In May 2000, the Company relaunched
its WallStreetCity.com Web site with a completely new interface
to make navigation easier, a new floating ticker, and redesigned
portfolios. As a result of these changes, the Company wrote off
approximately $3.4 million of unamortized capitalized costs that
were determined to be in excess of the net realizable value of
the older products.

SHEDDING NON-STRATEGIC ASSETS

As the Company witnessed weaknesses in the Internet financial
marketplace, particularly related to technology companies, the
Company reevaluated its business strategy and made adjustments
designed to ensure the Company would emerge as a key player in
the industry. As part of this reevaluation, the Company began
refocusing its attention on its core domestic operations and
made organizational and governance changes designed to enhance
growth. This reevaluation included shedding all operations that
were not related to the core business, were generating
insufficient returns, or were no longer considered strategic for
the Company's future. As a result, the Company wrote off $1.1
million in assets related to product lines that were no longer
considered strategic. The Company also recognized approximately
$900,000 in severance costs associated with these changes in
strategy.

INVESTMENTS IN MARKETABLE SECURITIES AND PRIVATE COMPANIES

The weaknesses in the Internet financial marketplace also took a
toll on investments the Company made during 1999 and the early
part of 2000. During 2000, the Company continuously monitored
the financial health and the market value of the companies in
which the Company had investments, both public and private. The
Company wrote down its investments in Tachyon Systems and
Telebuild when it became apparent from sale offers that the
Company would not recover its investment in the event of a sale.
The Company also wrote off investments in Trading Technologies
when Trading Technologies ceased operations in 2000 and in
InvestorIQ, plc when InvestorIQ, plc was forced into liquidation
in the United Kingdom in November 2000. These write downs and
write offs totaled $5.1 million for the year ended December 31,
2000.

The Company's investments in marketable securities suffered as
well and the Company determined that the market value would not
return to the level the Company had invested at any time in the
near future. Therefore, in accordance with SFAS 115, ACCOUNTING
FOR DEBT AND EQUITY SECURITIES, the Company established a new
cost basis at the market value on December 31, 2000 and
recognized a $27.7 million loss on the impairment into income.
The impact of this impairment was offset by $19.4 million in net
realized gains and losses on sales of GlobalNet securities
during 2000. During the fourth quarter, the Company began to
sell off its marketable securities portfolio in an effort to
shed non-strategic assets and redistribute the proceeds to core
business opportunities.

OTHER CHARGES

In May 2000, the Company terminated an agreement with
CyberAction Ltd. This agreement granted certain international
marketing rights to CyberAction, and the parties disagreed about
the contractual provisions and obligations. Therefore, as part
of its strategic reevaluation, the Company terminated the
contract and expensed $1.1 million of settlement costs.

At the beginning of 2000, the Consumer Division, headquartered
in Menlo Park, CA, sought to expand, and entered into a lease
agreement on a new facility. During the fourth quarter, as part
of

its cost containment strategy, the Company terminated the new
lease agreement and recognized $235,000 of associated expenses,
including a $100,000 write off of leasehold improvement costs.

1999 COMPARED TO 1998

RESULTS OF OPERATIONS

Revenues for the year ended December 31, 1999 increased $11.2
million, or 74%, compared to the same period in 1998 reflecting
dramatic growth in the Internet service business. In 1999, the
Company recognized approximately $4.9 million in revenue from new
private label and licensing agreements, of which approximately $3.5
million came from an agreement with NBC. The Company has licensed
its proprietary Internet and online financial services technology to
NBC for CNBC.com, a comprehensive Web site for personal finance.
Under the agreement, the Company is responsible Web site development
and hosting services. Telescan's revenue comes from fixed monthly
fees, cost reimbursement and a percentage of the revenue from the
site. Revenue from INVESTools increased $3.5 million over 1998 to
$5.0 million as demand for online newsletters increased. The
Company's WallStreetCity.com Web site added $690,000 to revenue in
1999 primarily due to advertising revenue. Other service revenues
increased $1.2 million, or 84%, primarily due to growing demand for
the various Internet publications while dial up modem revenue
declined $1.1 million, reflecting the Company shifting its growth to
more Internet services.

Cost of revenue increased $4.6 million, or 46%, over 1998 resulting
in a gross margin increase of 154%, or $6.8 million. Cost of revenue
associated with the NBC agreement represented approximately $1.9
million of the total cost of revenue increase. Cost of revenue for
INVESTools was $1.3 million higher for 1999 due to higher royalty
obligations associated with increased revenue.

Marketing expenses increased 15% over 1998, as the Company shifted
its marketing focus. General and administrative expenses increased
$2.7 million, or 38%, primarily due to increased staffing costs to
accommodate the development requirements associated with the growing
businesses.

OTHER ACTIVITY DURING THE YEAR

During 1999, the Company recorded a one-time charge of $3.3 million
for costs related to the acquisition of INVESTools. These costs
consisted of investment banking fees, legal and accounting fees, and
certain other expenses directly related to the acquisition.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2000, the Company had working capital of $4.2 million,
down from $10.0 million at December 31, 1999. The Company had cash and
cash equivalents of $1.5 million, accounts receivable of $3.4 million,
and marketable securities of $4.2 million. The $4.6 million in notes
receivable were converted in January 2001 to $1.5 million in cash and
$3.1 million in equity of TeamVest.

During 2000, the Company used $6.1 million in cash to fund operations,
up from $2.5 million in 1999. The net loss of $30.6 million included
non-cash charges of $27.7 million for the impairment of the marketable
securities portfolio, $11.0 million for write downs of assets and other
charges, and $5.3 million for acquisition opportunities. These charges
are in addition to a $2.9 million routine non-cash charge for
depreciation and amortization. These charges were offset by $19.4
million of non-cash net gains and losses on the sale of GlobalNet stock
and routine non-cash revenue of $4.5 million. Changes in working capital
accounts added $1.3 million, primarily due to increased collections of
accounts receivable and an increase in other liabilities offset by a
decrease in accounts payable activity.

Net cash used in investing activities decreased to $5.2 million from
$18.4 million in 1999 primarily due to decreased investments in equity
securities of other companies and decreased capital expenditures. It is
the Company's intention to limit future investments in equity securities
of other companies and to hold capital expenditures down over the next
twelve months. Net cash provided by financing activities fell to almost
zero for 2000 as the Company's stock price suffered from weaknesses in
the marketplace.

It is the Company's intention to control its operating expenses while
continuing to focus on its existing products. In addition, the Company
has implemented changes intended to reduce certain operating expenses.
The Company will continue to liquidate its marketable securities
portfolio during 2001 and is continuing its exploration of strategic
alternatives including exploring sources of additional financing. As
discussed below, the Company is in the process of consummating a merger
with ZiaSun Technologies, Inc. ("ZiaSun"). If this merger is consummated
prior to year-end, management believes that the combined entity will
have sufficient cash

flows to fund operations and capital requirements. No assurance can be
given as to when, or if, the Company will be able to complete the merger
with ZiaSun.

These conditions raise substantial doubt about the Company's ability to
continue as a going concern. The ability of the Company to continue as a
going concern is dependent on many factors including successful
completion of the merger with ZiaSun. The opinion of Arthur Andersen
LLP, the independent public accountants for the Company, includes an
explanatory fourth paragraph stating that there is substantial doubt
about the Company's ability to continue as a going concern.

RECENT DEVELOPMENTS

TEAMVEST

In January 2001, the Company received a $1.5 million payment on a
$4.2 million note receivable due from TeamVest that the Company
entered into in November 1999. The Company then exercised its option
to convert the remaining balance due on the note, plus accrued
interest of $407,000, into 1,893,066 shares of TeamVest common stock
valued at $3.1 million which represented approximately a 14%
interest.

CONVERTIBLE PREFERRED STOCK

In January 2001, the holders of the 120,000 shares of Class A 5%
Convertible Preferred Stock agreed to exchange all of their shares
for new Class B 4% Preferred Stock. This stock pays $1.00 per share
per annum in dividends and is convertible into 3,000,000 shares of
Common Stock, which the Company has reserved for such conversion.
The stock automatically converts on May 15, 2002.

KNOWLEDGE EXPRESS DATA SYSTEMS L. C. ("KEDS")

In February 2001, all interests in KEDS, including the Company's 56%
interest, were sold to a third party. The net assets of KEDS, a
consolidated subsidiary of the Company, were reclassified as net
liabilities held for sale and are included in other liabilities on
the balance sheet at December 31, 2000. In February 2001, the
Company recognized a $9,000 loss on the sale.

BPI COMMUNICATIONS, INC. ("BPI")

The Company had an agreement with BPI to provide hosting and
development services for multiple BPI Web sites. Revenue for these
services represented 12% and 10% of total revenue for 2000 and 1999,
respectively. This contract was amended on December 31, 2000 to a
fixed fee arrangement for the first three months of 2001 and then
the agreement and the fees are renewed month-to-month thereafter.

RECENTLY ISSUED ACCOUNTING STANDARDS

In December 1999, the SEC issued Staff Accounting Bulleting 101,
"Revenue Recognition in Financial Statements" (SAB 101), which provides
guidance related to revenue recognition based on interpretations and
practices following by the SEC. The adoption of SAB 101 in the first
quarter of 2000 did not have a material impact on the Company's
financial position or results of operations.

In March 2000, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 00-2, "ACCOUNTING FOR WEB SITE DEVELOPMENT COSTS"
that requires certain Web site development costs to be capitalized. The
adoption of EITF 00-2 did not have a material impact on the Company's
financial position or results of operation.

In June 1998, the Financial Accounting Standards Board issued Statement
No. 133 ("SFAS No. 133"), ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES. SFAS No. 133, as amended by Financial Accounting
Standards Board Statement No. 137 effective for years beginning after
June 15, 2000, requires derivatives to be recorded in the balance sheet
as an asset or liability measured at its fair value, with changes in the
derivative's fair value recognized currently in earnings unless specific
hedge accounting criteria are met. The Company does not invest in
derivative instruments and therefore does not believe that this
statement will have a material impact on the Company's financial
statements.

EVENTS SUBSEQUENT TO AUDITOR'S REPORT

SPECIAL AND OTHER CHARGES
The Company incurred $3.9 million in investment losses and severance
costs in the six months ended June 30, 2001.

MERGER WITH ZIASUN TECHNOLOGIES, INC.
In May 2001, the Company executed a merger agreement with ZiaSun to
form a new company, INVESTools Inc. ("INVESTools"). The new company
will provide investor education, financial publications and
analytical tools worldwide. The merger will be a stock for stock
exchange with shareholders of ZiaSun receiving 75% of the stock in
the new company and the Company stockholders receiving 25% of the
stock in the new company. Each share of ZiaSun common stock will be
exchanged for one share of INVESTools common stock and each share of
the Company's common stock will be exchanged for 0.55531 of a share
of INVESTools common stock. The Company expects to complete the
merger in November 2001.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk, which is the potential loss
arising from adverse changes in market prices and rates. The Company's
exposure to interest rate changes is not considered to be material to
the Company. The Company does not enter, or intend to enter, into
derivative financial instruments for trading or speculative purposes.

The Company is exposed to the impact of changes in the market values of
its investments. The Company invests in equity instruments of privately
held, information technology companies for business and strategic
purposes. These investments are included in long-term assets and are
accounted for under the cost method when ownership is less than 20% and
the Company does not significantly influence or control the operations.
For these non-quoted investments, the Company's policy is to regularly
review the assumptions underlying the operating performance and cash
flow forecasts in assessing the carrying values. During the year ended
December 31, 2000, the Company recorded $5.1 million of impairment to
investments. Management believes the Company's financial instruments to
be properly stated at fair value at December 31, 2000.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements are filed pursuant to Item 14(a)1.

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

(a) Previous Independent Accountants

i. On April 10, 2000, Telescan, Inc. (the "Registrant")
dismissed Hein + Associates LLP as the Registrant's
independent accountant.

ii. Neither of the reports of Hein + Associates LLP on the
financial statements for the past two years contained an
adverse opinion or disclaimer of opinion or were qualified
or modified as to uncertainty, audit scope or accounting
principles.

iii. The dismissal of Hein + Associates LLP was recommended and
approved by the Audit Committee of the Board of Directors of
the Registrant.

iv. During the Registrant's two most recent fiscal years and
through the period from December 31, 1999 to April 10, 2000,
there were no disagreements with Hein + Associates LLP on
any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Hein +
Associates LLP would have caused them to make reference
thereto in their reports on the consolidated financial
statements for such years.

v. During the Registrant's two most recent fiscal years and
through the period from December 31, 1999 to April 10, 2000,
there were no reportable events (as defined in Regulation
S-K Item 304 (a) (1) (v)).

vi. The Registrant provided Hein + Associates LLP with a copy of
the disclosure it made in response to Item 304 (a) of
Regulation S-K. The Registrant requested Hein + Associates
LLP to furnish, and Hein + Associates LLP furnished to the
Registrant, a letter addressed to the Commission stating
that it agreed with the statements made by the Registrant.

(b) Newly Engaged Independent Accountants

On April 10, 2000 the Registrant engaged Arthur Andersen LLP as its
new independent accountant. Through April 10, 2000, neither the
Registrant nor anyone on its behalf consulted Arthur Andersen LLP
regarding (i) the application of accounting principles to any
transaction, either completed or proposed, or (ii) the type of audit
opinion that might be rendered by Arthur Andersen LLP on the Company's
financial statements. In addition, through April 10, 2000, neither the
Registrant nor anyone on its behalf consulted Arthur Andersen LLP
regarding any matter that was the subject of a disagreement (as
defined in Regulation S-K Item 304 (a) (i) (iv)) or a reportable event
(as defined in Regulation S-K Item 304 (a) (1) (v)).

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

As of March 16, 2001, the Company's directors and executive officers are
as follows:

NAME AGE POSITION
------------------------------------------------------------------------

William D. Savoy 36 Director and Chairman
Lee K. Barba 50 Director and Chief Executive Officer
Roger C. Wadsworth 53 Senior Vice President and Corporate Secretary
Paul A. Helbling 47 Chief Financial Officer
Joseph F. Frantz, II 37 Vice President
Greg E. Gensemer 34 Vice President
Danny E. Hoover 53 Vice President
Jerrold B. Smith 48 Vice President
Alexander T. Wyche 53 Vice President
David L. Brown 60 Director
Elisabeth Y. Sami 32 Director
Stephen C. Wood 49 Director

Each director holds office until the next annual meeting of stockholders
or until his successor has been elected and qualified. The Compensation
Committee and Audit Committee of the Board of Directors are each
composed of Ms. Sami and Messrs. Savoy and Wood.

WILLIAM D. SAVOY

Mr. Savoy was appointed Chairman of the Board in August of 2000. He
currently serves as Vice President of Vulcan Ventures Incorporated, a
venture capital fund wholly-owned by Paul G. Allen, co-founder of
Microsoft Corporation. From 1987 until November 1990, Mr. Savoy was
employed by Layered, Inc., a company controlled by Mr. Allen, and became
its President in 1988. From November 1990 until the present, Mr. Savoy
has served as President for Vulcan Northwest Inc., a company which
manages the personal financial activities of Mr. Allen. Mr. Savoy serves
on the Advisory Board of Dream Works SKG of Los Angeles, California and
serves on the Board of Directors of CNET, Inc. of San Francisco,
California; Harbinger Corporation of Atlanta, Georgia; Metricom, Inc. of
Los Gatos, California; Ticketmaster Online-CitySearch, Inc., of Pasadena
California; USA Networks, Inc., of St. Petersburg, Florida; and U.S.
Satellite Broadcasting of Minneapolis, Minnesota. Mr. Savoy also
represents Mr. Allen in a wide variety of other personal financial
transactions. Mr. Savoy holds a B.S. in Computer Science, Accounting and
Finance from Atlantic Union College. Mr. Savoy has been a Director since
1993.

LEE K. BARBA

Mr. Barba was appointed to the position of Chief Executive Officer
February 29, 2000. Prior to joining the Company, he implemented the
European expansion of Open Link by forming strategic partnerships with
several Fortune 500 companies. Mr. Barba joined Open Link after 22 years
on Wall Street, where most recently, he was responsible for managing
global trading businesses for Bankers Trust Company. While based in
London he was responsible for managing their European offices, as well
as the Global Risk Management Advisory practice, which had offices in
Asia and Latin America. Upon returning to New York, Mr. Barba was the
senior executive of the bank responsible for managing and consolidating
the firm's technology and operations functions for the global capital
markets businesses, which included over 2,100 in staff operating
throughout Asia, Europe and North America. Earlier in his career Mr.
Barba served as a co-head of the Fixed Income Division at PaineWebber
and as a Vice President of Lehman Brothers Kuhn Loeb. He earned his
M.B.A. from Columbia University and his B.A. from the University of
North Carolina.

ROGER C. WADSWORTH

Mr. Wadsworth was appointed Corporate Secretary in August 2000, served
as Director from 1989 to 2000 and has served as Senior Vice President
since 1990. From 1988 to 1990, Mr. Wadsworth served as President of the
Company. From 1983 to 1988, Mr. Wadsworth was employed as Vice President
of Information Management Services, Inc., of Houston, Texas, where he
provided management services to investment vehicles such as limited
partnerships and joint ventures. From 1979 to 1983, he served as
co-owner of D. Russell Smith Associates, a restaurant and tenant finish
general contractor. Mr. Wadsworth is Corporate Secretary of IMS

Securities, Inc. a full service NASD broker/dealer owned by his wife.
Mr. Wadsworth holds a B.B.A. degree from the University of Houston.

PAUL A. HELBLING

Mr. Helbling joined the Company as Chief Financial Officer in 1999. From
1997 until joining Telescan, Mr. Helbling was Vice President of Finance
at PCC Flow Technologies, Inc., a subsidiary of Precision Castparts
Corporation and a $350 million manufacturer of pumps and valves in the
U.S. and Europe. From 1991 to 1997 Mr. Helbling served as Vice President
and Chief Financial Officer of HydroChem Industrial Services, a $150
million provider of industrial cleaning services to the petrochemical,
refining, and utility industries. Mr. Helbling became a Certified Public
Accountant in 1978, with experience in Big-5 public accounting, and in
the contract drilling and oil and gas exploration and production
industries. Mr. Helbling holds B.A. and M.A. degrees from Rice
University.

JOSEPH F. FRANTZ, II

Mr. Frantz, Vice President of the Company since May 1995, was appointed
to the additional position of Chief Information Officer in February
1999. Mr. Frantz previously held the positions of Computer Operations
Manager, End-User Software Product Manager and Senior Programmer after
joining the Company in 1987 as a Technical Support Representative. Mr.
Frantz holds a B.S. in Applied Mathematics from the University of
Houston and a M.S. in Management Computing and Systems from Houston
Baptist University. Mr. Frantz is a co-inventor of the technology for
which the Company was awarded two patents.

GREG E. GENSEMER

Mr. Gensemer has been Vice President since rejoining the Company in
April 1999. Prior to rejoining the Company, Mr. Gensemer was General
Manager for Paragon Software, a provider of streaming real-time quotes
to individual investors, money managers and brokers. When previously
employed by the Company, Mr. Gensemer held the positions of Director of
Business Development, Project Manager, Retail Sales Executive and
Technical Support Representative after originally joining the Company in
1990. Prior to joining the Company, Mr. Gensemer was the Area Manager
for Pilgrim Cleaners of Houston, Texas from 1986 to 1990. Mr. Gensemer
serves on the Board of Directors of GRO Corporation of Houston, Texas.

DANNY E. HOOVER

Mr. Hoover, Vice President since September 1996, previously held the
positions of Manager of Development, Manager of Windows Development and
Senior Windows Programmer. Before joining the Company in 1992, Mr.
Hoover was employed as operations manager for Praxis Incorporated, a
supervisory control automation company. Mr. Hoover holds a B.S. in
Electrical Engineering from Texas A&M University.

JERROLD B. SMITH

Mr. Smith, Vice President since March 1998, previously held the
positions of Business Development Manager for the Company's Consumer Web
property, WallStreetCity.com, and Technical Support Supervisor after
joining the Company in 1995. Prior to joining the Company, Mr. Smith
practiced financial planning and asset management in Houston, Texas.
From 1986 to 1988, Mr. Smith was national Sales Manager for USOne
Apparel of New York. From 1976 to 1986, Mr. Smith was a salesman and
ultimately regional Vice President of Donmoor, Inc., a wholesale apparel
manufacturer, also of New York. Mr. Smith holds a B.S. in Business
Administration from the University of Houston.

ALEXANDER T. WYCHE

Mr. Wyche, Vice President and Corporate Counsel, who joined the Company
in May 1999, previously served as an attorney for Koch Industries, Inc.,
a privately held international conglomerate with interests in the
natural gas industry, from 1997 to 1999. Prior to 1997, Mr. Wyche held
positions in the legal departments of Enron Corp. and Tenneco, Inc., and
served as a legal consultant to the natural gas industry. Mr. Wyche
holds a B.B.A. from Campbell University, a J.D. from North Carolina
Central University and is licensed to practice law in Texas and North
Carolina.

DAVID L. BROWN

Mr. Brown, Chairman of the Board from 1990 through 2000, has served as a
Director of the Company since 1989 and was the Company's Chief Executive
Officer from 1990 until February 29, 2000. Mr. Brown is co-author of
CYBER-INVESTING: CRACKING WALL STREET WITH YOUR PERSONAL COMPUTER, a
best seller on computerized investing, WALL STREET CITY, a guide to
investing on the Internet, and GETTING STARTED IN ONLINE INVESTING, the
latest release in the Getting Started series, all published by John
Wiley and Sons, Inc. From 1978 to 1986, Mr. Brown was President, and
from 1992 to 1993 a Director, of Time Energy Systems, Inc., a public
company now known as the ACR Group, Inc. He has served as Chairman of
the U.S. Science and Technology Commission for the Emerging Leaders
Summit Conference series with the USSR. For more than ten years, he has
served as a Director of the Alliance for Aging Research, based in
Washington, D.C. He has also served as Chairman of the New Millennium
Committee of the Planetary Society, a group based in Pasadena,
California, which supports space exploration. He has served as Chairman
of the Advisory Board of the Southwest Council of Public CEOs and on the
boards of several banks and financial institutions. Mr. Brown began his
career in the space program at NASA, where he headed the team of
engineers who designed the landing gear for the first lunar module. Mr.
Brown holds a B.S. degree in Mechanical Engineering from the University
of Pittsburgh and an M.B.A. from the University of Houston.

ELISABETH Y. SAMI

Ms. Sami is Vice President of Strategic Partnership and Business
Development in NBC's Digital Media group. Ms. Sami was appointed to the
Board on June 23, 2000 to fill the position created after Christopher
Glowacki's resignation. Ms. Sami has been with NBC since March 1997,
originally as Vice President for International Business Development and
Operations in New York, and later as Vice President of Business
Development for NBC West Coast in Burbank, California. Before joining
NBC, Ms. Sami served as Vice President of International Business
Development for Discovery Communications from March 1993 to February
1997. She started her career in international investment consulting. Ms.
Sami earned her B.A. from the University of Iowa, and received a
Graduate Diplome from the University of Stockholm.

STEPHEN C. WOOD

Mr. Wood is currently President and Chief Executive Officer of Wireless
Services Corporation based in Bellevue, Washington. Until May 1996, Mr.
Wood was President and CEO of Notable Technologies, L.L.C., which filed
for bankruptcy in 1996. From 1993 through 1994, Mr. Wood served as Vice
President of Information Broadcasting for McCaw Development Corporation
located in Kirkland, Washington. Until February 1993, he was President
of Starwave Corporation, a company he formed in 1991 with Microsoft
Corporation co-founder Paul G. Allen to develop and market data and
information products. From 1986 through 1991, Mr. Wood served in several
executive positions at Asymetrix Corporation, a software development and
marketing firm founded by Mr. Allen. From 1980 until 1985, Mr. Wood was
in charge of building a microcomputer software development organization
for Datapoint Corporation in Austin, Texas, after serving in research &
development and marketing positions. Mr. Wood began his career in 1976
when he became the sixth employee of Microsoft Corporation, where he was
general manager from 1977 to 1980. Mr. Wood holds a B.S. in Computer
Engineering from Case Western Reserve University and an M.S. in
Electrical Engineering from Stanford University. Mr. Wood has been a
Director since 1992.

ITEM 11. EXECUTIVE COMPENSATION

The following table reflects all forms of compensation for services to
the Company for the years ended December 31, 2000, 1999, and 1998, of
the individuals serving as the Company's Chief Executive Officer during
2000 and the Company's four most highly compensated executive officers
who were serving the Company at the end of 2000 and who earned more than
$100,000 that year.

SUMMARY COMPENSATION TABLE

LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------- ----------------------
SECURITIES UNDERLYING
NAME YEAR SALARY BONUS OPTIONS
------------------------------ ------- ------------ --------- ----------------------

Lee K. Barba 2000 $248,103(1) $45,866 833,321
CHIEF EXECUTIVE OFFICER
David L. Brown 2000 138,300 - 58,378
FORMER CHIEF EXECUTIVE OFFICER 1999 158,750 - 4,393
1998 140,000 - 28,800
David M. Berray 2000 160,240(1) 18,982 109,459
CHIEF OPERATING OFFICER
Roger C. Wadsworth 2000 118,750 25,299 41,478
SENIOR VICE PRESIDENT 1999 96,000 - 2,662
1998 84,000 - 13,200
Paul A. Helbling 2000 130,625 27,829 31,626
CHIEF FINANCIAL OFFICER 1999 42,096(2) - 12,729
Joseph F. Frantz, II 2000 116,375 33,480 22,801
VICE PRESIDENT, CHIEF 1999 93,460 3,727 932
INFORMATION OFFICER 1998 83,659 - 6,890

The following table reflects all forms of compensation for services to
the Company for the years ended December 31, 2000, 1999, and 1998, of
two executive officers who would have been included above had they been
employed by the Company at December 31, 2000 and who earned more than
$100,000 that year.

Ronald Warren 2000 $147,692 $30,359 24,137
FORMER PRESIDENT 1999 118,269 - 13,195
RESIGNED AUGUST 2000 1998 100,000 - 14,000

Edward C. Oliver 2000 117,500 27,829 6,000
FORMER VICE PRESIDENT 1999 60,429(2) - 17,929
RESIGNED MAY 2000

(1) Messrs. Barba and Berray joined the Company during 2000. Therefore, the
amounts reflected for 2000 are for a partial year.

(2) Messrs. Helbling and Oliver joined the Company during 1999. Therefore, the
amounts reflected for 1999 are for a partial year.

STOCK OPTIONS

The following tables set forth information relating to the named
executive officers with respect to (i) stock options granted in 2000,
and (ii) the total number of exercised options through 2000 and the
value of the unexercised in-the-money options at the end of 2000.

NUMBER OF POTENTIAL REALIZABLE VALUE AT
SECURITIES PERCENT OF TOTAL ASSUMED ANNUAL RATE OF
UNDERLYING OPTIONS GRANTED EXERCISE STOCK PRICE APPRECIATION FOR
OPTIONS TO EMPLOYEES IN PRICE PER EXPIRATION OPTION TERM
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
--------------------- --------------- ------------------- ------------- -------------- ----------------------------------

Lee K. Barba 400,000(1) 20.03% $ 19.00 02/27/10 $ 4,779,599 $ 12,112,443
12,401(2) 0.62% $ 5.00 08/10/10 $ 38,995 $ 98,820
420,920(3) 21.08% $ 2.00 10/29/10 $ 529,429 $ 1,341,676

David L. Brown 20,000(4) 1.00% $ 21.63 01/31/10 $ 272,060 $ 689,453
3,892(2) 0.19% $ 19.25 02/24/10 $ 47,117 $ 119,405
8,349(2) 0.42% $ 10.94 05/07/10 $ 57,442 $ 145,569
6,936(2) 0.35% $ 5.00 08/10/10 $ 21,810 $ 55,271
7,500(2) 0.38% $ 2.00 10/16/10 $ 9,433 $ 23,906
11,701(2) 0.59% $ 2.00 10/29/10 $ 14,717 $ 37,297

David M. Berray 100,000(5) 5.01% $ 22.50 03/13/10 $ 1,415,013 $ 3,585,921
9,459(2) 0.47% $ 5.00 08/10/10 $ 29,744 $ 75,376

Roger C. Wadsworth 10,000(4) 0.50% $ 21.63 01/31/10 $ 136,030 $ 344,726
2,359(2) 0.12% $ 19.25 02/24/10 $ 28,559 $ 72,373
5,255(2) 0.26% $ 5.00 08/10/10 $ 16,524 $ 41,876
15,000(6) 0.75% $ 2.00 10/16/10 $ 18,867 $ 47,812
8,864(2) 0.44% $ 2.00 10/29/10 $ 11,149 $ 28,254

Paul A. Helbling 6,000(4) 0.30% $ 21.63 01/31/10 $ 81,618 $ 206,836
2,595(2) 0.13% $ 19.25 02/24/10 $ 31,416 $ 79,613
5,780(2) 0.29% $ 5.00 08/10/10 $ 18,175 $ 46,059
7,500(6) 0.38% $ 2.00 10/16/10 $ 9,433 $ 23,906
9,751(2) 0.49% $ 2.00 10/29/10 $ 12,265 $ 31,081

Joseph F. Frantz, II 6,000(4) 0.30% $ 21.63 01/31/10 $ 81,618 $ 206,836
1,651(2) 0.08% $ 19.25 02/24/10 $ 19,987 $ 50,652
5,150(2) 0.26% $ 5.00 08/10/10 $ 16,194 $ 41,039
10,000(6) 0.50% $ 2.00 10/16/10 $ 12,578 $ 31,875

Ronald Warren 15,000(4) 0.75% $ 21.63 08/08/01(7) $ 204,045 $ 517,090
2,831(2) 0.14% $ 19.25 08/08/01(7) $ 34,273 $ 86,854
6,306(2) 0.32% $ 5.00 08/08/01(7) $ 19,829 $ 50,251

Edward C. Oliver 6,000(4) 0.30% $ 21.63 05/21/01(7) $ 81,618 $ 206,836

(1) Option vests in 3 components: (a) 100,000 shares vest six months from the
date of grant, (b) 100,000 vest annually in equal installments over five
years beginning one year after the date of grant subject to acceleration
of vesting over four years if performance targets are met, and (c) 200,000
shares vest five years from the date of grant subject to acceleration of
vesting to four years if performance targets are met.

(2) Options vest immediately upon grant.

(3) Option vests in 3 components: (a) 220,920 shares vest immediately, (b)
100,000 vest annually in equal installments over four years beginning one
year after the date of grant subject to acceleration of vesting over three
years if performance targets are met, and (c) 100,000 shares vest four
years from the date of grant subject to acceleration of vesting to three
years if performance targets are met.

(4) On October 17, 2000, the vesting of these options was accelerated to vest
100% on that date.

(5) Options vest in three components: (a) 25,000 shares vest six months from
date of grant, (b) 25,000 vest ratably over five years from date of grant
subject to acceleration to four years if certain performance targets are
met, and (c) 50,000 vest at the end of five years subject to acceleration
to four years if certain performance targets are met.

(6) Options vest 50% annually beginning 12 months after date of grant.

(7) Per their severance agreements, the expiration date of these options was
extended one year.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES

Number of
Securities
Underlying
Unexercised Value of Unexercised
Options at In-the-Money Options at
Fiscal Year End Fiscal Year End
Shares ------------------ -------------------------
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
--------------------- -------------- --------------- ------------------- -------------------------

Lee. K. Barba - - 333,321 / 500,000 - / -

David L. Brown - - 139,506 / - - / -

David M. Berray - - 34,459 / 75,000 - / -

Roger C. Wadsworth - - 63,536 / 15,000 - /-

Paul A. Helbling - - 36,855 / 7,500 - /-

Joseph F. Frantz, II 6,373 $34,622 20,623 / 10,000 - / -

Ronald Warren - - 72,748 / - - / -

Edward C. Oliver 2,595 $49,954 23,929 / - - / -

DIRECTOR COMPENSATION

The Company currently pays non-employee Directors cash fees of $1,500
per Board meeting attended and reimburses expenses incurred by Directors
to attend such meetings. Directors who are not officers of the Company
are typically granted stock options annually, at an exercise price
consistent with the market.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of March 16, 2001 unless
otherwise indicated, with respect to the number of shares of Common
Stock beneficially owned by (1) each director and/or named executive
officer individually, (2) all executive officers and directors of the
Company as a group and (3) each stockholder known by the Company to be
the beneficial owner of more than 5% of the Company's Common Stock. The
number of shares is exclusive of shares allocated to the person's
account through the Company's 401(k) plan. Except as noted below, each
stockholder has sole voting and investment power with respect to the
shares shown.

Number of Shares
Owners Beneficially Owned(1) % of Class
------ --------------------- ----------

William D. Savoy 67,508 *
Lee K. Barba 333,321 2.0%
Roger C. Wadsworth 147,104 *
Paul A. Helbling 42,855 *
Joseph F. Frantz, II 22,623 *
David L. Brown 893,462(2) 5.5%
Elisabeth Y. Sami 7,500 *
Stephen C. Wood 60,200 *
David M. Berray (RESIGNED JANUARY 2001) 8,000 *
Ronald Warren (RESIGNED AUGUST 2000) 124,950 *
Edward C. Oliver (RESIGNED MAY 2000) 24,129 *

National Broadcasting Company, Inc. and
GE Capital Equity Investment, Inc.
120 LONG RIDGE ROAD
STAMFORD, CONNECTICUT 06927 2,331,348 14.3%

Lacy J. Harber
LJH, Corp.
377 NEVA LANE
DENISON, TEXAS 75020 2,314,000 14.2%

Paul G. Allen
Vulcan Ventures Incorporated
110 110TH AVENUE N.E., SUITE 550
BELLEVUE, WASHINGTON 98004-5840 1,290,000(3) 7.9%

G. Robert Friedman
Friedman & Associates
FIVE POST OAK PARK, SUITE 1800
HOUSTON, TEXAS 77027 1,053,919 6.5%

All directors and executive officers as a group (12 persons) 1,672,716 10.3%

*Less than 1%.

(1) Each of the share amounts shown for the directors and officers includes
options to purchase additional shares, which are exercisable within the
next sixty days, as follows: Mr. Savoy - 34,535, Mr. Barba - 333,321, Mr.
Wadsworth - 63,536, Mr. Helbling - 36,855, Mr. Frantz - 20,623, Mr. Brown
- 139,506, Ms. Sami - 7,500, Mr. Wood - 20,250, Mr. Warren - 72,748, Mr.
Oliver - 23,929.

(2) Includes 636,318 shares owned by the Brown Family Partnership. David L.
Brown has shared voting and investment power in the Brown Family
Partnership along with other family members who are not officers and/or
directors of the Company. Includes 117,638 shares owned by David L. Brown
personally

(3) Vulcan is owned 100% by Paul G. Allen.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In the normal course of business some members of the Board of Directors
have proposed business alliances between the Company and companies with
which they are associated. In the opinion of management, each of these
transactions or arrangements was entered into on terms as favorable to
the Company as could have been obtained in transactions or arrangements
with unaffiliated third parties.

VULCAN VENTURES, INCORPORATED ("VULCAN")

Pursuant to the terms of a May 20, 1992 stock purchase agreement
between Vulcan and the Company, Vulcan has the right to designate
one nominee director to the Company's Board of Directors for as long
as Vulcan (or its affiliate) owns at least 540,000 shares of common
stock of the Company. In addition, the Company has agreed not to
take any corporate action to increase its number of directors to
more than seven without the unanimous written consent of all
directors for as long as Vulcan (or its affiliate) owns at least
540,000 shares of common stock of the Company.

KEDS

At December 31, 2000, the Company owned 55.58% of KEDS and a joint
venture controlled by GRF Interests, Inc. ("GRF") owned the
remaining interest. G. Robert Friedman, a significant stockholder
and a former director of the Company, controls GRF. The Company and
the joint venture sold their interests in KEDS to an unrelated third
party in February 2001. Through that date, the Company provided
computer hardware, programming, systems maintenance, data loading,
telecommunications and certain administrative services to KEDS. For
the year ended December 31, 2000, KEDS assets were reclassified as
net liabilities held for sale, totaling $15,000.

TELEBUILD, L.C. ("TELEBUILD")

Friedman Interests, Inc., a company controlled by G. Robert
Friedman, owns 45.42% of Telebuild. The Company and the Brown Family
Partnership own 15.83% and 25.44%, respectively, of Telebuild. The
Brown Family Partnership is owned by David L. Brown, a Director and
the former Chairman of the Company, and other members of the Brown
family. Through December 31, 2000, the Company performed services
under contract for Telebuild, which consisted primarily of the
development, maintenance and operation of the Telebuild database
system and the provision of office space, equipment and furniture.
The Company charged Telebuild for its personnel at a stipulated
rate, which reflected the full absorption of overhead costs to the
Company. Non-personnel expenditures under the agreement are billed
at actual cost. During 2000, the Company wrote off $384,000 of
intercompany receivables due from Telebuild when it became apparent
that they would never be recovered. At December 31, 2000, the
Company had no investment recorded for Telebuild and Telebuild owed
the Company an additional $19,000, which was subsequently paid. For
the year ended December 31, 2000, $55,000, or less than 1%, of the
Company's total revenue was derived from services provided to
Telebuild.

NATIONAL BROADCASTING COMPANY, INC. ("NBC")

In a letter agreement dated February 22, 1999 between the NBC and
the Company, NBC was granted the right to have an individual
designated by NBC (the "NBC Designee") included as a nominee for the
Board of Directors of the Company. NBC shall have this right until
GE Capital Equity Investments, Inc. ("GE Equity") owns less than 5%
of the outstanding common stock of the Company or the license
agreement with NBC terminates or expires, whichever event occurs
earlier. Pursuant to this agreement, NBC has designated, and the
Board of Directors has approved, Ms. Elisabeth Y. Sami.

In addition, GE Equity has the right to designate an individual to
be present at all Board of Directors meetings. Such individual will
not be a participating or voting member of the Board of Directors
and may remain as a designee as long as GE Equity owns at least 5%
of the Company's outstanding common stock.

GRO CORPORATION

Mr. Greg E. Gensemer, an officer of Telescan, serves on the Board of
Directors for GRO Corporation. The Company has entered into
licensing and servicing agreements with this company. In December
2000, the licensing agreement was amended to terminate development
of a new product for GRO. As a result of this modification, $153,000
of deferred license fees for GRO were accelerated and recognized
into revenue in December. At December 31, 2000, the Company still
had approximately $358,000 of deferred license fees from GRO to be
recognized into revenue through 2003. The Company recognized
$190,000 in revenue during 2000 from this licensing agreement,
excluding the accelerated revenue. The Company owned 603 shares of
GRO Corporation representing an ownership interest of 5.1% at
December 31, 2000.

PART IV

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

The following documents are filed as part of this Form 10-K:

PAGE

1. CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Public Accountants 32
Consolidated Balance Sheets as of December 31, 2000 and 1999 34
Consolidated Statements of Operations for the Years Ended December 31, 2000, 1999 and 1998 35
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2000, 1999 and 1998 36
Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998 38
Notes to Consolidated Financial Statements 39

2. FINANCIAL STATEMENTS SCHEDULES

Report of Independent Public Accountants 56
Schedule I - Valuation and Qualifying Accounts 58

All other schedules have been omitted since the required information is
not present or is not present in amounts sufficient to require
submission of the schedule, or because the information required is
included in the financial statements or notes thereto.

3. EXHIBITS

EXHIBIT NO.

3.1** Restated Certificate of Incorporation of Registrant.
(Incorporated by reference to the Company's Form S-1 dated
September 14, 1993 (Registration No. 33-52182).)

3.2** Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant. (Incorporated by reference
to the Company's Form S-1 dated September 14, 1993
(Registration No. 33-52182).)

3.3** Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant. Filed with the Delaware
Secretary of State on May 31, 1999. (Incorporated by
reference to the Company's Form 10-K for the annual period
ended December 31, 1999.)

3.4** By-Laws of the Registrant. (Incorporated by reference to
the Company's Form S-1 dated September 14, 1993
(Registration No. 33-52182).)

4.1** See Exhibits 3.1 through 3.3 for Provisions of the
Certificate of Incorporation and By-Laws of the Registrant
defining rights of holders of common stock of the
Registrant. (Incorporated by reference to the Company's
Form S-1 dated September 14, 1993 (Registration No.
33-52182).)

4.2** Asset Purchase Agreement dated June 30, 1990, between TIC
Software, Inc. and the Registrant which sets forth certain
registration rights of TIC Software, Inc. (Incorporated by
reference to the Company's Form S-1 dated September 14,
1993 (Registration No. 33-52182).)

4.3** Exhibits to Asset Purchase Agreement dated June 30, 1990,
between TIC Software, Inc. and the Registrant which set
forth certain registration rights of TIC Software, Inc.
(Incorporated by reference of the Company's Form S-1 dated
September 14, 1993 (Registration No. 33-52182).)

4.4** Assignment of agreement between Jacob Sobotka, Marvin
Deuell, Raymond C. Wicker and the Registrant which sets
forth certain registration rights of those parties,
effective as of January 1, 1992. (Incorporated by reference
to the Company's Form S-1 dated September 14, 1993
(Registration No. 33-52182).)

4.5** Assignment of General Partnership Interest between New
World Technologies, a Texas General Partnership, and the
Registrant, which sets forth certain registration rights
effective as of January 1, 1992. (Incorporated by reference
to the Company's Form S-1 dated September 14, 1993
(Registration No. 33-52182).)

4.6** Certificate of Designation of Preferred Stock.
(Incorporated by reference to the Company's Form S-1 dated
June 15, 1998.)

4.7** Certificate of Designation of Class B Preferred Stock.
(Incorporated by reference to Exhibit 4.7 of the Company's
Form 10-K for the annual period ended December 31, 2000.)

10.1** Amended Stock Option Plan. (Incorporated by reference to
Exhibit 4.1 to the Company's Post-Effective Amendment No. 1
to Form S-8 (File No. 33-63172) as filed with the
Commission on February 2, 1994.)

10.2** 1995 Stock Option Plan. (Incorporated by reference to
Exhibit 99.1 to the Company's Registration Statement on
Form S-8 (File No. 33-94514).)

10.3** Regulations of Telescan (TRC), L.C. effective January 1,
1992 by and between the Registrant and the Radnor-Houston
Joint Venture. (Incorporated by reference to the Company's
Form S-1 dated September 14, 1993 (Registration No.
33-52182).)

10.4** First Amendment to Regulations of Knowledge Express, L.C.
(formerly known as Telescan (TRC), L.C.) entered into
effective July 23, 1992, by and between the Registrant and
the Radnor-Houston Joint Venture. (Incorporated by
reference to Amendment No. 1 to the Company's Form S-1
dated January 8, 1993.)

10.5** Regulations of Telebuild, L.C. entered into effective July
31, 1992, by and among the Registrant, JST Technology
Center, Inc. and Friedman Interests, Inc. (Incorporated by
reference to Amendment No. 2 to the Company's Form S-1
dated February 1, 1993.)

10.6** Employment Agreement by and between the Company and David
L. Brown dated March 10, 1994. (Incorporated by reference
to Post-Effective Amendment No. 1 to the Company's Form S-1
dated August 11, 1994.) (1)

10.7** Office Lease Agreement between the Registrant and Chevron
U.S.A., Inc. dated November 8, 1995. (Incorporated by
reference to the Company's Form 10-K for the annual period
ended December 31, 1995.)

10.8** Stock Purchase Agreement by and between the Company and GE
Capital Equity Investment Inc. (Incorporated by reference
to the Company's Form 8-K dated January 14, 1999.)

10.9** Stock Purchase Agreement by and between the Company and GE
Capital Equity Investment Inc. (Incorporated by reference
to the Company's Form 8-K dated July 30, 1999.)

10.10** Employment Agreement by and between the Company and Lee K.
Barba dated February 28, 2000. (Incorporated by reference
to Exhibit 10.10 of the Company's Form 10-K for the annual
period ended December 31, 1999.) (1)

10.11** Employment Agreement by and between the Company and David
M. Berray dated March 14, 2000. (Incorporated by reference
to Exhibit 10.1 to the Company's Form 10-Q dated June 30,
2000.) (1)

10.12** Employment Agreement by and between the Company and Dennis
L. Santiago dated May 4, 2000. (Incorporated by reference
to Exhibit 10.2 to the Company's Form 10-Q dated June 30,
2000.) (1)

10.13** June 2000 Amendment to the 1995 Stock Option Plan.
(Incorporated by reference to Exhibit 99.1 to the Company's
Registration Statement on Form S-8 (File No. 33-50380) as
filed with the Commission on November 21, 2000.)

10.14** 2000 Stock Option Plan. (Incorporated by reference to
Exhibit 99.2 to the Company's Registration Statement on
Form S-8 (File No. 33-50380) as filed with the Commission
on November 21, 2000.)

10.15** Agreement and Plan of Merger by and between GlobalNet
Financial.Com, Inc., Telescan Acquisition Corp. And
Telescan, Inc. (Incorporated by reference to Exhibit 10.15
of the Company's Form 10-K for the annual period ended
December 31, 2000.)

10.16** Termination Agreement between GlobalNet Financial.Com, Inc.
and Telescan, Inc. (Incorporated by reference to the
Company's Form 8-K dated September 28, 2000.)

10.17** Preferred Stock Exchange Agreement by and between the
Company and Q Funding, L.P. (Incorporated by reference to
Exhibit 10.17 of the Company's Form 10-K for the annual
period ended December 31, 2000.)

10.18** Preferred Stock Exchange Agreement by and between the
Company And R2 Funding, Ltd. (Incorporated by reference to
Exhibit 10.18 of the Company's Form 10-K for the annual
period ended December 31, 2000.)

21** Subsidiaries of the Registrant. (Incorporated by reference
to Exhibit 21 of the Company's Form 10-K for the annual
period ended December 31, 2000.)

23.1* Consent of Independent Public Accountants.

23.2* Consent of Independent Certified Public Accountants.

--------------------------------------------------------------------------
* Indicates documents filed herewith.
** Indicates documents incorporated by reference from the prior
filing indicated.
(1) Management contracts or compensation plans or arrangements.

REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the last quarter of 2000.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of
Houston, State of Texas, on October 8, 2001.

Telescan, Inc.

By: /s/ LEE K. BARBA
------------------------------
Lee K. Barba, Chief Executive
Officer and Director

Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons in the capacities and on
the date indicated

Signature Title Date

PRINCIPAL EXECUTIVE
OFFICER:

PRINCIPAL EXECUTIVE OFFICER:

/s/ LEE K. BARBA Chief Executive Officer and Director October 8, 2001
--------------------------------
Lee K. Barba

PRINCIPAL FINANCIAL /
ACCOUNTING OFFICER:

/s/ PAUL A. HELBLING Chief Financial Officer October 8, 2001
--------------------------------
Paul A. Helbling

DIRECTORS:

/s/ WILLIAM D. SAVOY Chairman of the Board October 8, 2001
--------------------------------
William D. Savoy

/s/ DAVID L. BROWN Director October 8, 2001
--------------------------------
David L. Brown

/s/ Elisabeth Y. Sami Director October 8, 2001
--------------------------------
Elisabeth Y. Sami

/s/ STEPHEN C. WOOD Director October 8, 2001
--------------------------------
Stephen C. Wood

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF TELESCAN, INC.:

We have audited the accompanying consolidated balance sheet of Telescan, Inc. (a
Delaware corporation) and subsidiaries as of December 31, 2000, and the related
consolidated statement of operations, comprehensive income, stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated 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 consolidated financial position of Telescan, Inc. and
subsidiaries as of December 31, 2000, and the results of their operations and
their cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed further in Note 16,
subsequent to February 21, 2001, the date of our original report, the Company
has incurred losses and is not achieving its fiscal year 2001 projected revenues
or cash flows from operations. These factors, among others, as described in Note
16, create a substantial doubt about the Company's ability to continue as a
going concern. The accompanying consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

ARTHUR ANDERSEN LLP

Houston, Texas
February 21, 2001 (except with respect to the
matters discussed in Note 16, as to which the
date is September 25, 2001)

INDEPENDENT AUDITOR'S REPORT

BOARD OF DIRECTORS AND STOCKHOLDERS
TELESCAN, INC.
HOUSTON, TEXAS

We have audited the accompanying consolidated balance sheet of Telescan, Inc.
and subsidiaries as of December 31, 1999, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the two-year period ended December 31, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated 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 audits to obtain
reasonable assurance about whether the consolidated 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 consolidated financial position of Telescan, Inc. and
subsidiaries as of December 31, 1999, and the results of their operations and
their cash flows for each of the years in the two-year period ended December 31,
1999, in conformity with generally accepted accounting principles.

HEIN + ASSOCIATES LLP
Houston, Texas
February 25, 2000

TELESCAN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

DECEMBER 31,
------------------------
2000 1999
-------- --------

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,494 $ 12,625
Accounts receivable, net (allowance: $262; $299) 3,411 5,033
Notes receivable 4,594 5,468
Marketable securities 4,178 --
Other current assets 446 552
-------- --------
TOTAL CURRENT ASSETS 14,123 23,678
Property and equipment, net 3,431 3,644
Investments 968 3,919
Software development costs, net 838 4,506
Marketable securities -- 46,761
Other assets 80 391
-------- --------
TOTAL ASSETS $ 19,440 $ 82,899
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Deferred revenue $ 4,008 $ 8,817
Accounts payable 3,799 3,550
Other current liabilities 2,160 1,262
-------- --------
TOTAL CURRENT LIABILITIES 9,967 13,629
Capital lease obligations, net of current portion 46 271
Deferred taxes -- 11,229
STOCKHOLDERS' EQUITY:
Class A convertible preferred stock (liquidation preference $25 per share)
(120,000 shares issued and outstanding at December 31, 2000 and 1999, respectively.) 1 1
Common stock,
(16,296,026, 16,548,859 shares issued and outstanding at December 31, 2000
and 1999, respectively.) 162 165
Additional paid-in capital 67,650 66,875
Accumulated comprehensive income -- 18,321
Accumulated deficit (58,386) (27,592)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 9,427 57,770
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 19,440 $ 82,899
======== ========

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

TELESCAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

YEARS ENDED DECEMBER 31,
----------------------------------------
2000 1999 1998
-------- -------- --------

REVENUE $ 35,938 $ 26,438 $ 15,234
COSTS AND EXPENSES:
Cost of revenue 17,196 15,072 10,436
Selling and marketing expenses 6,632 4,703 4,082
General and administrative expenses 18,567 9,661 6,993
Write down of assets and other charges 11,742 -- 1,530
Cost of acquisition opportunities 5,009 3,287 --
-------- -------- --------
Total costs and expenses 59,146 32,723 23,041
-------- -------- --------
Loss from operations (23,208) (6,285) (7,807)
OTHER INCOME (EXPENSE):
Gain on marketable securities sales 19,432 -- --
Realized loss on marketable securities impairment (27,668) -- --
Interest, net 704 455 (597)
Other, net 96 (76) 42
-------- -------- --------
Total other income (expense) (7,436) 379 (555)
-------- -------- --------
LOSS BEFORE MINORITY INTEREST IN LOSS OF SUBSIDIARY (30,644) (5,906) (8,362)
Minority interest loss -- 56 142
-------- -------- --------
LOSS FROM CONTINUING OPERATIONS (30,644) (5,850) (8,220)
Income from discontinued operations -- -- 19
-------- -------- --------
NET LOSS (30,644) (5,850) (8,201)

Preferred stock dividend (150) (150) (94)
Incremental yield dividend -- -- (44)
-------- -------- --------
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $(30,794) $ (6,000) $ (8,339)
======== ======== ========

NET LOSS PER COMMON SHARE - BASIC AND DILUTED(A) $ (1.85) $ (0.39) $ (0.66)
======== ======== ========

BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 16,665 15,486 12,654
======== ======== ========

(a) The earnings per share amount for discontinued operations is $0.00.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
2000 1999 1998
-------- -------- --------
Net loss $(30,644) $ (5,850) $ (8,201)
Change in net unrealized gains (loss) on marketable securities (29,550) 29,550 --
Deferred taxes on net unrealized gain (losses) on marketable securities 11,229 (11,229) --
-------- -------- --------
COMPREHENSIVE INCOME (LOSS) $(48,965) $ 12,471 $ (8,201)
======== ======== ========

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

TELESCAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)

PREFERRED STOCK COMMON STOCK ADDITIONAL
----------------------- ------------------------ PAID-IN
SHARES AMOUNT SHARES AMOUNT CAPITAL
-------- -------- -------- -------- --------

BALANCE JANUARY 1, 1998 -- $ -- 12,493 $ 125 $ 20,970
Net loss -- -- -- -- --
Issuance of stock under stock option plan -- -- 166 2 458
Issuance of convertible preferred stock 120 1 -- -- 3,000
Incremental yield on preferred stock -- -- -- -- 44
5% convertible preferred stock dividends -- -- -- -- --
Equity transactions of pooled company -- -- 187 2 424
Other -- -- -- -- 19
-------- -------- -------- -------- --------
BALANCE DECEMBER 31, 1998 120 1 12,846 129 24,915
Net loss -- -- -- -- --
Change in net unrealized gains -- -- -- -- --
Deferred taxes -- -- -- -- --
Issuance of stock under stock option plan -- -- 458 5 1,731
Issuance of common stock -- -- 2,876 27 39,103
5% convertible preferred stock dividends -- -- -- -- --
Equity transactions of pooled company -- -- 252 3 530
Change in fiscal year of pooled company -- -- 117 1 596
-------- -------- -------- -------- --------
BALANCE DECEMBER 31, 1999 120 1 16,549 165 66,875
Net loss -- -- -- -- --
Change in net unrealized losses -- -- -- -- --
Deferred taxes -- -- -- -- --
Issuance of stock under stock option plan -- -- 184 2 683
Issuance of common stock -- -- 108 1 1,334
Cancellation of common stock -- -- (545) (6) (1,731)
Stock based compensation -- -- -- -- 417
Issuance of warrants -- -- -- -- 72
5% convertible preferred stock dividends -- -- -- -- --
-------- -------- -------- -------- --------
BALANCE DECEMBER 31, 2000 120 $ 1 16,296 $ 162 $ 67,650
======== ======== ======== ======== ========

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

TELESCAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
(Continued)

ACCUMULATED
ACCUMULATED COMPREHENSIVE
DEFICIT INCOME TOTAL
-------------- ---------------- ------------

BALANCE JANUARY 1, 1998 $(11,935) $ -- $ 9,160
Net loss (8,201) -- (8,201)
Issuance of stock under stock option plan -- -- 460
Issuance of convertible preferred stock -- -- 3,001
Incremental yield on preferred stock (44) -- --
5% convertible preferred stock dividends (94) -- (94)
Equity transactions of pooled company -- -- 426
Other -- -- 19
-------- -------- --------
BALANCE DECEMBER 31, 1998 (20,274) -- 4,771
Net loss (5,850) -- (5,850)
Change in net unrealized gains -- 29,550 29,550
Deferred taxes -- (11,229) (11,229)
Issuance of stock under stock option plan -- -- 1,736
Issuance of common stock -- -- 39,130
5% convertible preferred stock dividends (150) -- (150)
Equity transactions of pooled company -- -- 533
Change in fiscal year of pooled company (1,318) -- (721)
-------- -------- --------
BALANCE DECEMBER 31, 1999 (27,592) 18,321 57,770
Net loss (30,644) -- (30,644)
Change in net unrealized losses -- (29,550) (29,550)
Deferred taxes -- 11,229 11,229
Issuance of stock under stock option plan -- -- 685
Issuance of common stock -- -- 1,335
Cancellation of common stock -- -- (1,737)
Stock based compensation -- -- 417
Issuance of warrants -- -- 72
5% convertible preferred stock dividends (150) -- (150)
-------- -------- --------
BALANCE DECEMBER 31, 2000 $(58,386) $ -- $ 9,427
======== ======== ========

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

TELESCAN, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

YEARS ENDED DECEMBER 31,
------------------------------------------
2000 1999 1998
-------- -------- --------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(30,644) $ (5,850) $ (8,201)
Reconciling adjustments:
Gain on sale of GlobalNet stock (19,432) -- --
Realized loss on marketable securities impairment 27,668 -- --
Cost of acquisition opportunities 5,258 -- --
Stock option compensation / warrants provided for services 371 -- --
Recognition of non-cash revenue (4,449) (1,398) --
Depreciation and amortization 2,907 3,563 3,031
Write down of assets and other charges 11,026 -- 1,530
Change in current assets and liabilities:
(Increase)/decrease in accounts receivable 919 (3,713) (1,613)
Increase/(decrease) in accounts payable (287) 1,408 186
(Increase)/decrease in other current assets (60) 2,974 2,365
Increase in other liabilities 658 550 587
-------- -------- --------
Net cash used in operating activities (6,065) (2,466) (2,115)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (1,812) (3,002) (249)
Additions to software development costs (742) (1,273) (2,519)
Additions to investments (3,639) (8,935) --
Additions to notes receivable -- (5,643) --
Proceeds from sale of marketable securities 468 -- --
Other 525 433 --
-------- -------- --------
Net cash used in investing activities (5,200) (18,420) (2,768)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock -- 32,625 --
Proceeds from issuance of convertible preferred stock -- -- 3,000
Proceeds from exercise of stock options 685 1,736 460
Preferred dividends paid (150) (150) (94)
Proceeds from notes payable -- -- 2,000
Increase in capital lease obligations 60 488 105
Payments on notes payable and capital lease obligations (461) (2,890) (568)
Equity transactions of pooled company, net of cash -- 194 1
Other -- (31) (9)
-------- -------- --------
Net cash provided by financing activities 134 31,972 4,895
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,131) 11,086 12
CASH AND CASH EQUIVALENTS:
Beginning of year 12,625 1,539 1,527
-------- -------- --------
End of year $ 1,494 $ 12,625 $ 1,539
======== ======== ========
OTHER NON-CASH INVESTING AND FINANCING ACTIVITIES WERE AS FOLLOWS:
Net unrealized gain (loss) $ -- $ 18,321 $ --
Exercise of GlobalNet option through sale of GlobalNet stock 33,227 -- --
Conversion of note receivable into equity investment -- 664 --
Acquisition of assets for stock 350 -- --
Company common stock in exchange for investment in GlobalNet 64 6,335 --
Stock received for services and licenses -- 3,298 --

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

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES AND RELATED INFORMATION

THE COMPANY

Telescan, Inc. ("Telescan" or the "Company") is committed to helping
investors improve their investment results through advice and the
educated use of proprietary investment search tools. The Company
provides financial services marketed through two divisions. The
Company's Consumer Division manages two Web properties, INVESTools.com
and WallStreetCity.com, with the common goal of simplifying and
enriching the investing consumer's financial life. The Company's
Business-to-Business Division offers businesses an array of online
financial solutions including quotes, charts, news, portfolio reports
and stock and mutual fund screening tools to businesses seeking to
expand their offerings online to gain greater cost efficiency through
outsourcing.

Telescan, Inc., a Texas corporation, was formed in 1983 to manufacture
software and an online database containing analytical tools for
financial analysis. In 1986, D. B. Technology, Inc. ("DB"), a Texas
corporation, was formed for the purpose of acquiring Telescan, Inc. and
was merged with Telescan, Inc., and filed a d.b.a. to use the name
Telescan, Inc. In 1988, Max Ret, Inc., a Delaware corporation, was
formed for the purpose of acquiring the outstanding common stock of DB.
In 1989, Max Ret, Inc. issued 75% of its then outstanding stock to
acquire all of the outstanding common stock of DB. Max Ret, Inc. then
changed its name to Telescan, Inc.

On May 28, 1999, the Company completed the acquisition of INVESTools,
Inc. ("INVESTools") upon which the INVESTools stockholders exchanged all
of their shares for shares of the Company's common stock in a business
combination that was accounted for as a pooling-of-interests. The
consolidated financial statements for the two years ended December 31,
1999 and the accompanying related notes reflect the Company's financial
position and the results of operations as if INVESTools had been a
wholly-owned subsidiary of the Company since inception. Prior to the
acquisition, INVESTools had a fiscal year-end of June 30. The adjustment
for the change in the year-end is reflected in the statement of
stockholders' equity for the year ended December 31, 1999.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Telescan,
Inc. and its majority-owned subsidiaries for which the Company controls
the operations. All significant intercompany transactions have been
eliminated.

USE OF ESTIMATES

The preparation of financial statements requires management to make
estimates and assumptions that affect amounts reported in the financial
statements and disclosures of contingent assets and liabilities.
Ultimate results could differ from these estimates.

RECLASSIFICATIONS

Certain prior years' balances have been reclassified to conform to the
current year's presentation. These reclassifications had no impact on
operating results.

CONCENTRATION OF CREDIT RISK

The Company markets its products and services to a diverse customer
base. Accounts receivable are generally unsecured and are derived
primarily from revenues earned from customers located in the United
States. The Company performs ongoing credit evaluations of its customers
and maintains reserves for potential credit losses; historically, such
losses have been within management's expectations.

The Company maintains deposits in banks, which may exceed the amount of
federal deposit insurance available. Management believes the potential
risk of loss on these accounts to be minimal.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT REPORTING

The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 131, DISCLOSURE ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
Information, in 1997. The Company's business activities are represented
by a single reportable segment, the distribution of content and
analytical tools to investors via the computer. The Company provides
services that have similar economic characteristics, technology,
development processes, customers, distribution strategies and shared
infrastructures. Although revenue information is available by revenue
source, financial information for related costs and expense is not
available by revenue source because the costs and expenses related to
these services are common for all services. Accordingly, discrete
financial information regarding results of operations by revenue source
is unavailable. Further, operating results by revenue source are not
produced or reviewed by Telescan's chief operating decision maker to
make decisions about resources to be allocated or to assess performance.
Management personnel are not held accountable for the performance of a
particular revenue source.

The Consumer Divisions and Business-to-Business Divisions are a means of
marketing services to the investor and are not reportable segments.

SIGNIFICANT CUSTOMERS

The Company has an agreement with BPI Communications, Inc. ("BPI") to
provide hosting and development services for multiple BPI Web sites.
Revenue for these services represented 12% and 10% of total revenue for
2000 and 1999, respectively. This contract was amended on December 31,
2000 to a fixed fee arrangement for the first three months of 2001 and
then the agreement and the fees are renewed month-to-month thereafter.

There were no other customers that generated greater than 10% of revenue
in 2000, 1999, or 1998.

CASH AND CASH EQUIVALENTS

The Company considers all cash and cash investments with an original
maturity of three months or less to be cash equivalents. The Company has
invested excess cash in commercial paper and money market accounts and
amounts included in the consolidated financial statements approximate
fair value at the balance sheet date.

MARKETABLE SECURITIES

The Company's marketable securities are classified as available-for-sale
securities. Available-for-sale securities are carried at fair value with
the unrealized gains and losses, net of tax, reported as a separate
component within stockholders' equity entitled "accumulated
comprehensive income." Realized gains and losses and permanent declines
in value on available-for-sale securities are reported in other income
or expense, as incurred. Realized investment gains (losses) are
recognized using the specific identification method.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost less accumulated depreciation.
Depreciation is calculated on a straight-line method over the estimated
useful lives of the assets, which range from three to seven years.
Equipment under capital lease is amortized over the lesser of the
remaining useful lives of the equipment or the lease term.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Depreciation expense was approximately $1.8 million, $1.2 million and
$1.1 million for the years ended December 31, 2000, 1999 and 1998,
respectively.

INVESTMENTS

The Company invests in equity instruments of privately-held information
technology companies for business and strategic purposes. These
investments are included in long-term assets and are accounted for under
the cost method when ownership is less than 20% and the Company does not
significantly influence or control the entity's operations. For these
non-marketable investments, the Company regularly reviews the
assumptions underlying the operating performance and cash flow forecasts
in assessing the appropriate carrying value of the investments.

SOFTWARE DEVELOPMENT COSTS

Costs for the development of software, including the costs of coding,
software configuration, upgrades and enhancements are capitalized and
amortized over the expected useful life, generally three to five years.
Unamortized capitalized costs determined to be in excess of the net
realizable value of the product are expensed at the date of such
determination. The accumulated amortization and related software
development costs are removed from the respective accounts effective in
the year following full amortization.

Amortization expense was $1.0 million, $2.1 million, and $2.6 million,
for the years ended December 31, 2000, 1999 and 1998, respectively.
Accumulated amortization totaled $204,000 and $5.0 million at December
31, 2000 and 1999, respectively.

LONG-LIVED ASSETS

The Company reviews all long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. If indicators suggest that impairment is
probable, the Company will prepare an estimate of undiscounted future
cash flows expected to result from the use of the asset. If impairment
is indicated, an adjustment will be made to reduce the carrying amount
of the asset to its fair value. The Company did not recognize any such
impairment in 1999. In 2000 and 1998, the Company adjusted the carrying
value of certain long-lived assets, primarily capitalized software
development costs, capital data costs and related goodwill, to their
estimated fair value, resulting in a non-cash impairment loss of $4.2
million and $1.5 million, respectively, which is included in write down
of assets and other charges in the consolidated statement of operations.

INCOME TAXES

Deferred tax assets and liabilities are recognized for temporary
differences between the financial reporting basis and the tax basis of
assets and liabilities, at the enacted tax rates expected to be in
effect when the temporary differences reverse.

A valuation allowance for deferred tax assets is provided if it is more
likely than not that some portion of the deferred tax asset will not be
realized. An increase or decrease in a valuation allowance that results
from a change in circumstances that causes a change in judgment about
the reliability of the related deferred tax asset is included in income.
A change related to fluctuations in fair value of available-for-sale
securities is included in accumulated comprehensive income in
stockholders' equity.

MINORITY INTEREST

The minority interest relates to the Company's investment in Knowledge
Express Data Systems, L.C., ("KEDS") which was sold subsequent to year
end. Refer to Note 14 for additional discussion of this subsequent
event. The minority investment was reduced to zero as of December 31,
1999.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REVENUE RECOGNITION

The Company primarily derives revenue from the following sources: (1)
licensing of analytical tools, (2) development and hosting of third
party Web sites, (3) subscriptions to WallStreetCity.com and to
newsletters through INVESTools.com, (4) Web site and e-mail advertising,
(5) e-mail list management for third parties, and (6) e-mail list
rental. License fees and hosting revenue are recognized ratably over the
term of the hosting arrangements, which range from two to five years.
Development revenue is recognized when Web site development is complete,
the Web site has been launched and hosting has begun. Revenue for all
other services is recognized in the period in which the services are
provided. Deferred revenue is recorded for cash received for which
services have not been provided.

DEFERRED REVENUE

Deferred revenue is primarily comprised of billings in excess of
recognized revenue relating to license and service fees.

STOCK-BASED COMPENSATION

SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, allows companies
to adopt either of two methods for accounting for stock options. The
Company accounts for its stock based compensation plans under APB
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. In accordance
with SFAS No. 123, certain pro forma disclosures are provided in
Note 10. The Company's long-term incentive plans provide for the award
of stock options to employees and directors.

ADVERTISING COSTS

Advertising costs are expensed when the initial advertisement is run and
are included in selling and marketing expenses. Advertising costs for
the years ended December 31, 2000, 1999 and 1998 were $296,000,
$433,000, and $808,000, respectively.

COSTS OF ACQUISITION OPPORTUNITIES

Internalcosts associated with a business combination are expensed as
incurred. Direct and incremental costs related to successful
negotiations where the Company is the acquiring company are capitalized
as part of the cost of the acquisition. Costs associated with
unsuccessful negotiations are expensed when it is probable that the
acquisition will not occur.

NET LOSS PER SHARE

Net loss per share is computed by using the weighted average number of
shares of common stock outstanding. At December 31, 2000 there were
approximately 4.2 million shares of common stock potentially issuable
with respect to stock options, warrants, and convertible preferred
stock, which were excluded from the net loss per share calculation
because they are antidilutive.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS
No. 133, as amended by SFAS No. 137 effective for years beginning after
June 15, 2000, requires derivatives to be recorded in the balance sheet
as an asset or

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

liability measured at its fair value, with changes in the derivative's
fair value recognized currently in earnings unless specific hedge
accounting criteria are met. The Company does not invest in derivative
instruments and therefore does not believe that this statement will have
a material impact on the Company's financial statements.

2. BALANCE SHEET COMPONENTS (IN THOUSANDS):

PROPERTY AND EQUIPMENT: 2000 1999
------- -------

Property, computer and other equipment $ 6,017 $ 5,487

Furniture and fixtures 584 655

Software 546 504
------- -------

Total property and equipment 7,147 6,646

Less: accumulated depreciation and amortization (3,716) (3,002)
------- -------

PROPERTY AND EQUIPMENT, NET $ 3,431 $ 3,644
======= =======

OTHER CURRENT LIABILITIES: 2000 1999
------- -------
Accrued payroll $ 941 $ 485

Accrued royalties 869 100

Current portion of long term obligations 261 425

Other accrued liabilities 89 252
------- -------

OTHER CURRENT LIABILITIES $ 2,160 $ 1,262
======= =======

3. ACQUISITIONS

2000 ACQUISITION OPPORTUNITIES

During 2000, Telescan evaluated a number of opportunities to add key
technologies, enhance market presence and complement existing products
and services through acquisitions.

In August 2000, the Company entered into a merger agreement with
GlobalNet Financial.com, Inc. ("GlobalNet") in which each share of
Telescan common stock would be exchanged for 0.50 shares of GlobalNet
common stock. During the ensuing due diligence period, the companies
determined that their business strategies would be best served if they
were pursued separately. In September 2000, a termination agreement was
signed and the costs associated with this acquisition opportunity
totaling $4.5 million were expensed. A summary of the material terms of
the termination agreement is as follows:

o The Company exchanged 272,500 shares of GlobalNet common stock
the Company owned with GlobalNet for the 545,000 shares of
Company common stock GlobalNet owned. These shares of Company
common stock were subsequently cancelled.

o GlobalNet purchased 276,495 shares of GlobalNet common stock
the Company owned for $6.00 per share.

o GlobalNet paid the Company $250,000 in cash for expenses
incurred in connection with the proposed acquisition
opportunity.

o The Company and GlobalNet terminated most of their contracts
and agreements, and dismissed all related outstanding
receivables. The Company accelerated recognition of deferred
revenue of $1.0 million currently into revenue on these
contracts as the termination relieved the Company of future
performance obligations under these contracts.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

o The Company agreed it would not sell, transfer, or dispose of
its shares of GlobalNet common stock until July 2001, except
for 50,000 shares per month for six consecutive months
beginning October 1, 2000. During the fourth quarter of 2000,
the Company sold 150,000 shares of GlobalNet stock on the open
market under the terms of this agreement.

Additional merger and acquisition opportunities the Company explored
during 2000 resulted in an additional $545,000 in costs of acquisition
opportunities expensed.

1999 ACQUISITION OPPORTUNITIES

On May 28, 1999, the Company completed the acquisition of INVESTools,
Inc., a privately held company. INVESTools operated an investment advice
Web site, featuring continually updated portfolio advice from recognized
money managers, as well as online investment advisory newsletters. Under
the terms of the acquisition agreement, which was accounted for as a
pooling-of-interests, Telescan issued 2,124,976 shares of common stock
in exchange for all of INVESTools' outstanding shares and assumed
220,955 options to purchase Telescan common stock. All outstanding
INVESTools, Inc. preferred stock and warrants were converted to common
stock immediately prior to the acquisition. During 1999, the Company
recorded a one-time charge of $3.3 million for acquisition-related
costs. These costs consisted of investment banking fees, legal and
accounting fees, and certain other expenses directly related to the
acquisition.

INVESTools had a June 30 fiscal year end and, accordingly, the
INVESTools statements of operations for the years ended June 30, 1998
and 1997 have been combined with the Company's statements of operations
for the calendar years ended December 31, 1998 and 1997, respectively.
In order to conform INVESTools' year-end to the Company's calendar year
end, the consolidated statement of stockholders' equity was adjusted for
the operating results of INVESTools for the period from July 1, 1998 to
December 31, 1998 which is not included in the consolidated results of
operations. The following is a summary of operating results for that
period (in thousands):

Revenue $ 1,058
Expenses 2,376
---------
Net loss $ (1,318)
=========

INVESTools' historical financial statements have been adjusted to
conform to the accounting policies and practices of the Company. These
adjustments primarily related to the classification of interest and
other income and the classification of restricted cash. These conforming
adjustments did not change the net loss INVESTools reported.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Separate revenues, net loss and related per share amounts of the merged
entities are presented in the following table (in thousands):

1998
--------
REVENUE:
Telescan, Inc. (restated) $ 13,778
INVESTools 1,456
--------
Revenue as reported $ 15,234
========
NET LOSS:
Telescan, Inc. $ (6,038)
INVESTools (2,163)
--------
Net loss, as reported $ (8,201)
========

LOSS PER SHARE:
Telescan, Inc. $ (0.48)
INVESTools (0.18)
--------
Loss per share as reported $ (0.66)
========

4. NOTES RECEIVABLE

In November 1999, the Company entered into a loan agreement with
TeamVest to loan $4.2 million for one year at a rate of LIBOR plus 2%,
payable at maturity. The note was secured by guarantees from certain key
principals of TeamVest and was convertible into equity interests in
TeamVest, subject to certain conditions in the agreement. In addition,
the agreement contained a warrant permitting the Company to purchase
additional equity interests in TeamVest at such time that the loan was
converted into an equity interest if certain conditions were met. At
December 31, 2000, the Company had accrued $394,000 in interest, which
is classified with the note receivable. The Company recognized license
fee and development revenue from TeamVest of $399,000 in 2000.

In January 2001, this note was settled. Refer to Note 14 for further
details of this subsequent event.

5. MARKETABLE SECURITIES

During 1999 and the first quarter of 2000, the Company acquired
marketable securities in companies as payment for services rendered or
as an investment to support a strategic alliance. At December 31, 2000,
these investments were as follows:

COST BASIS
AT
NAME ORIGINAL COST DECEMBER 31, 2000
---------------------------------- -------------- ------------------

GlobalNetFinancial.com, Inc. $22.4 million $2.8 million
Individual Investor Group, Inc. 4.1 million .5 million
FreeRealTime.com, Inc. 3.0 million .3 million
Stockwalk Group, Inc. 2.4 million .6 million

Consistent with the overall market for Internet stocks, the Company has
seen the market value of these investments decrease during 2000. In the
fourth quarter of 2000, the Company assessed these investments and
concluded that each of the marketable securities had experienced an
"other than temporary" decline in value and, in accordance with SFAS
115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES,
the cost basis of these investments, classified as available-for-sale,
was

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

written down to market value and a realized loss of $27.7 million was
recognized. As a result, cost basis equals fair market value as
indicated by the market and there are no unrealized gains or losses at
December 31, 2000.

The Company began selling these investments in the fourth quarter of
2000 and will continue to sell these investments in 2001 because they
are considered to be a non-strategic asset and provide working capital.
Therefore, these investments were reclassified as current assets in the
accompanying balance sheet at December 31, 2000. The majority of these
marketable securities are subject to restrictions under Rule 144 of the
Securities Act of 1933 which, among other things, limit the quantity
that can be sold through a broker for a period of time.

In March 2000, the Company exercised an option acquired in March 1999 to
acquire additional shares of GlobalNet stock. A gain of $20.7 million
was recorded in the first and second quarters related to sales of
GlobalNet securities, the proceeds of which were used to exercise this
option. Additional sales in the fourth quarter of 2000 reduced this gain
to $19.4 million for the year. There were no other sales of marketable
securities during 2000.

6. INVESTMENTS

During 1999 and 2000 the Company made strategic investments in other
companies, which had technologies that were compatible with or enhanced
the Company's technology or content. These investments are carried at
cost because the Company owns less than 20% of the total equity and has
no significant influence or control over the operations. Due to
weaknesses in the market related to Internet companies, the Company
continuously reviewed the market value of these investments for
indications that the value had declined below cost permanently or that
the Company would not be able to recover its investment. Based on these
assessments, these investments were written down $5.1 million during
2000. This charge is included in write down of assets and other charges
in the consolidated statement of operations.

7. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

CAPITAL LEASES

The Company has entered into capital lease commitments that expire
early in 2002. The future minimum lease payments under these
agreements are $267,000 and $46,000 for 2001 and 2002, respectively.
The present value of these minimum payments totals $307,000, with
$6,000 attributable to interest. The interest rates on these leases
range from 3% to 10%. Computer and telephone equipment under capital
lease totaled $1.4 million and $1.8 million at December 31, 2000 and
1999, respectively with related accumulated depreciation of $1.2
million per year.

INTEREST PAID

The Company paid $26,000, $264,000 and $115,000 for interest during
the years ended December 31, 2000, 1999 and 1998, respectively.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OPERATING LEASES

The Company has commitments to lease office space and equipment
under non-cancelable operating leases. Rent expense under operating
leases totaled $1.5 million, $1.3 million and $1.1 million for the
years ended December 31, 2000, 1999 and 1998, respectively. Future
minimum payments under non-cancelable leases are as follows (in
thousands):

YEARS ENDING DECEMBER 31,
------------------------------
2001* $ 1,723
2002 2,183
2003 1,474
2004 1,484
2005 1,142
Thereafter -
----------
Total $ 8,006
==========

*In 2001, the Company does not pay rent for the last six months of the year.

CONTINGENCIES

In August 2000, a lawsuit was filed against the Company in the United
States District Court for the Southern District of New York by a former
employee alleging that the Company failed to grant him certain stock
options to which he was entitled. The Company has responded to the
complaint and the case is proceeding before the court. Although no
assurances can be given, the Company believes that the ultimate
resolution of the litigation will not have a material adverse impact on
the Company's financial position or results of operations.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. INCOME TAXES

At December 31, 2000, the Company had net operating loss carryforwards
for income tax reporting purposes of approximately $28.9 million, which
expire in years 2009 to 2020. A portion of the $5.0 million in net
operating loss carryforwards acquired with the INVESTools, Inc.
acquisition are currently limited as to use.Deferred tax assets and
liabilities consisted of the following at December 31, 2000 and 1999 (in
thousands):

2000 1999
-------- --------

Deferred tax assets:
Acquisition costs capitalized for tax purposes $ 1,217 $ 1,217
Deferred revenue -- 2,196
Net operating loss carryforwards 9,838 5,155
Net unrealized gains (losses) on securities 6,703 --
Other 181 --
-------- --------
Total deferred tax asset 17,939 8,568

Less: Valuation allowance (16,862) (7,148)
-------- --------

Deferred tax asset, net 1,077 1,420
Deferred tax liability:
Accumulated depreciation (1,077) (1,420)
Net unrealized gains (losses) on securities -- (11,229)
-------- --------
Deferred tax liability, net $ -- $(11,229)
======== ========

The valuation allowance increased approximately $9.7 million during
2000. In as much as the Company's recognition of an impairment of the
marketable securities portfolio would suggest an anticipated capital
loss from the eventual disposition of the securities, and since capital
losses are allowed for tax purposes only to the extent of capital gains,
the net deferred tax effects related to the market value adjustments
have been reduced to zero.

The following is a reconciliation of expected to actual income tax
expense based upon the statutory rates:

YEARS ENDED DECEMBER 31,
------------------------------------------
2000 1999 1998
-------- -------- --------

Federal income tax benefit at statutory rates $(10,419) $ (2,040) $ (2,788)
Acquisition costs capitalized for tax purposes -- 1,217 --
Other, net 705 45 (295)
Change in valuation allowance 9,714 778 3,083
-------- -------- --------
Actual Provision $ -- $ -- $ --
======== ======== ========

9. STOCKHOLDERS' EQUITY

CLASSES OF CAPITAL STOCK

The Company has two classes of capital stock: convertible preferred
stock and common stock. During 1999, the Board of Directors approved an
amendment to the Restated Certificate of Incorporation to increase the
total number of authorized shares of all classes of capital stock to a
total of 40,000,000

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

shares. The Company is authorized to issue up to 30,000,000 shares of
common stock with a par value of $.01 and 10,000,000 shares of
convertible preferred stock with a par value of $.01.

CAPITAL STOCK ACTIVITY

In October 2000, as part of the termination agreement with GlobalNet
discussed in Note 3, the Company received the 545,000 shares of Company
stock issued to GlobalNet in 1999 in exchange for 272,500 shares of
GlobalNet stock the Company owned. These shares were subsequently
cancelled.

In May 2000, the Company settled conflicting contractual claims with
CyberAction, Ltd. for $1.1 million, which is included in write down of
assets and other charges in the consolidated statement of operations. As
part of the settlement, the Company issued 91,628 shares of common stock
and issued an option to purchase 25,000 shares of the Company's common
stock at an exercise price of $10.75 per share. The option expires May
5, 2002.

In March 2000, as consideration for the purchase of the assets of
Reality Sports, Inc., the Company issued 15,596 shares to Reality
Sports, Inc. and 1,071 shares to CCCC Enterprises, Ltd.

In January 1999, the Company sold 1,220,237 shares of its common stock
in a private placement to NBC in conjunction with its affiliate, GE
Capital Equity Investments, Inc. The Company received net proceeds of
$8,655,000 from the transaction. The resale of the stock is restricted
under Rule 144, subject to demand registration rights on one-half of the
shares.

In July 1999, the Company sold an additional 1,111,111 shares of its
common stock in a private placement to NBC and received net proceeds of
$23,970,000. The resale of the stock is also restricted under Rule 144
subject to demand registration rights on one-half of the shares. At
December 31, 1999, NBC held 14.2% of the Company's outstanding shares.

In March 1999, the Company entered into an agreement with GlobalNet to
exchange 520,000 shares of its common stock for 2,715,337 shares of
GlobalNet common stock, giving the Company a 9.9% ownership interest in
GlobalNet. In addition the Company issued 25,000 shares of its common
stock for a one-year option to purchase additional shares such that,
upon exercise of the option, the Company could own an aggregate of 19.9%
of GlobalNet's then outstanding common stock. The exercise price of the
option was set at $12.00 per share. This option was exercised in March
and April of 2000.

In May 1998, the Company issued 120,000 shares of 5% Class A Convertible
Preferred Stock for $3.0 million dollars. In connection with the
issuance of the preferred stock, there is an incremental yield that
arises from the conversion discount from fair value that is considered a
dividend to preferred stockholders. The amount is determined as the
fixed discount from market (5%) based on the closing price at May 15,
1998 and is calculated as follows:

Closing price at May 15, 1998 7 3/8
Fixed discount from market 5%
--------
$ 0.37
Shares issued 120,000
--------
Incremental yield $ 44,400
========

Preferred stockholders had the option to convert the preferred shares
into common stock at any time after May 15, 1998. The conversion price
of the preferred stock conversion into common stock was to be based on a
defined formula and capped at a maximum of $8.62 per share. In January
2001, the holders of

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the 120,000 shares of 5% Class A Convertible Preferred Stock exchanged
all of their shares for 120,000 shares of 4% Class B Convertible
Preferred Stock. Refer to Note 14 for details of this subsequent event.

10. STOCK OPTION PLANS

EMPLOYEE STOCK OPTION PLANS

DESCRIPTION OF PLANS

2000 STOCK OPTION PLAN

Approved by stockholders in August 2000, the Company has
reserved 1.0 million shares for grant under this Plan for
issuance to officers, directors, and employees. The Plan expires
August 2010. Under the Plan, incentive options may be granted at
the fair market value of the Company's common stock at the date
of the grant, as determined by the Board of Directors, but not
less than $1.50 per share. Non-statutory options may be granted
at prices equal to or greater than $1.50 per share, as
determined by the Board of Directors. Options generally expire
ten years from the date of grant.

AMENDED 1995 STOCK OPTION PLAN

This Plan was amended in June 2000 to increase the number of
shares available for grant to 1.2 million for issuance to
officers, directors, and employees. The Plan expires March 2005.
Under the Plan, incentive options may be granted at the fair
market value of the Company's common stock at the date of the
grant, as determined by the Board of Directors, but not at less
than $1.50 per share. Non-statutory options may be granted at
prices equal to or greater than $1.50 per share, as determined
by the Board of Directors. Options generally expire ten years
from the date of grant.

AMENDED 1990 STOCK OPTION PLAN

The Company reserved 1.5 million shares for grant under this
Plan for issuance to officers, directors, and employees. This
Plan expired in August 2000 and no new options are being granted
from this Plan. Options granted under this plan were granted at
fair market value at the date of grant and generally expire ten
years from the date of the grant.

INVESTOOLS' STOCK OPTION PLANS

The Company reserved 220,995 shares of its common stock for
issuance under three Stock Option Plans for employees and
consultants of INVESTools. No new options are being granted
under these plans. Options granted under these plans were
granted at fair market value at the grant date and generally
expire ten years from the date of the grant.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EMPLOYEE STOCK OPTION PLAN ACTIVITY

The following is a summary of option activity under these plans:

TOTAL SHARES UNDER WEIGHTED AVERAGE
OPTION EXERCISE PRICE
--------------------- -------------------

BALANCE - JANUARY 1, 1998 872,476 $ 4.26
Granted 447,117 6.37
Cancelled (47,925) 1.94
Exercised (169,250) 2.69
---------- ------
BALANCE - DECEMBER 31, 1998 1,102,418 5.50
Pooling Adjustment (9,184) 0.39
Granted 306,949 11.17
Cancelled (75,826) 6.12
Exercised (516,681) 4.00
---------- ------
BALANCE - DECEMBER 31, 1999 807,676 8.56
Granted 1,997,139 10.93
Cancelled (260,397) 15.29
Exercised (183,516) 3.73
---------- ------
BALANCE - DECEMBER 31, 2000 2,360,902 $10.19
========== ======

The following table summarizes information about options
outstanding at December 31, 2000:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------------------------------------------- --------------------------------------
WEIGHTED AVERAGE WEIGHTED WEIGHTED
RANGE OF NUMBER REMAINING YEARS OF AVERAGE NUMBER AVERAGE
EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE EXERCISE PRICES EXERCISABLE EXERCISE PRICE
--------------- ----------------- ----------------------- --------------------- -------------- ------------------

$ 0 - $4.99 1,005,520 9.25 $ 2.19 448,468 $ 2.41
5.00 - 9.99 397,064 5.46 7.29 394,789 7.28
10.00 - 14.99 71,016 6.59 12.41 71,016 12.41
15.00 - 19.99 458,092 9.01 18.93 158,092 18.81
20.00 - 24.99 423,710 8.15 21.91 341,510 21.78

25.00 - 30.00 5,500 9.07 25.14 5,500 25.14
------------ -------- ------- --------- -------

TOTAL 2,360,902 8.29 $ 10.19 1,419,375 $ 10.84
============ ======== ======= ========= =======

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCK OPTIONS GRANTED TO THIRD PARTIES

DESCRIPTION OF GRANTS

The Company issues options to certain outside vendors as payment for
services rendered. The options are valued based on the value of
services received, if available, or at fair market value of the
option at the date of grant.

STOCK OPTION ACTIVITY

The following is a summary of option activity:

TOTAL SHARES WEIGHTED AVERAGE
UNDER OPTION EXERCISE PRICE
--------------- -------------------

BALANCE JANUARY 1, 1998 60,000 $ 5.26
Granted 50,000 6.75
-------- ------
BALANCE DECEMBER 31, 1998 110,000 5.94
Granted 75,000 20.00
Exercised (60,000) 6.72
Cancelled (37,500) 5.00
-------- ------
BALANCE DECEMBER 31, 1999 87,500 17.86
Granted 25,000 10.75
-------- ------
BALANCE DECEMBER 31, 2000 112,500 $16.28
======== ======

The 60,000 options exercised during 1999 were cashless exercises.
The remaining options outstanding have a weighted average remaining
life of three years.

PRO FORMA DISCLOSURES

Had compensation expense arising from stock-based compensation been
determined consistent with the provisions of SFAS 123, net loss and
net loss per share would have been as follows (in thousands, except
per share amounts):

2000 1999
---------- ----------
Net loss:
As reported $(30,644) $ (5,850)
Pro forma (42,041) (6,974)
Net loss per common share:
As reported $ (1.85) $ (0.39)
Pro forma (2.53) (0.46)

The weighted average fair values of the options granted during 2000,
1999 and 1998 were $9.19, $10.79 and $3.79 respectively. The fair
value of each option grant was estimated at the date of grant using
the Black-Scholes option pricing model with the following
assumptions; risk free rates ranging from 5.74% to 6.88% for 2000
and 5.00% to 6.15% for 1999; volatility factors ranging from 75.9%
to 78.4% for 2000 and 78.67% and 86.14% for 1999; expected lives of
10 years for 2000 and 3 years for 1999; and no assumed dividend
yield in either period.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. EMPLOYEE BENEFITS

The Company sponsors a defined contribution 401(k) Profit Sharing Plan
for its employees. The plan provides participants a mechanism for making
contributions for retirement savings. Each participant may contribute
certain amounts of eligible compensation. The plan allows for Company
matching contributions, and effective January 1, 2000, the Company
invoked this privilege, matching 25% of participant contributions up to
1% of salary.

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

At December 31, 2000, the book value of the Company's financial
instruments equaled market.

At December 31, 1999, the book value of cash and cash equivalents, notes
receivable excluding the TeamVest note, marketable securities and
capital lease obligations equaled market value. The fair market value of
the TeamVest note receivable reported at cost was not determinable
because it was convertible into equity of a private company. The fair
value of investments reported at cost was not readily determinable since
they represent equity investments in private companies.

13. RELATED PARTIES

KEDS

At December 31, 2000 the Company owned 55.58% of KEDS and a joint
venture controlled by GRF Interests, Inc., owned the remainder. G.
Robert Friedman, a significant stockholder and former director of the
Company, controls GRF Interests, Inc. In February 2001, all owners sold
their interests to an unrelated third party. Refer to Note 14 for more
details of this subsequent event.

TELEBUILD, L.C. ("TELEBUILD")

At December 31, 2000, the Company owned 15.83% of Telebuild. Friedman
Interests, Inc, and the Brown Family Partnership own 45.42% and 25.44%,
respectively. G. Robert Friedman, a significant stockholder and former
director of the Company, controls Friedman Interests, Inc. David L.
Brown, Director and former Chairman of the Company and other members of
the Brown family own the Brown Family Partnership. The Company
recognized contract revenue from Telebuild of $55,000, $1,369,000, and
$1,152,000 in 2000, 1999, and 1998, respectively. The Company recognized
contract expense of $1,241,000, and 1,016,000 during the years ended
1999, and 1998, respectively. As of December 31, 2000 and 1999, $19,000
and $1,043,000 were due from Telebuild for contract services provided.
At December 31, 2000, the Company's investment in Telebuild was zero.

GRO CORPORATION ("GRO")

Mr. Greg E. Gensemer, an officer of Telescan, serves on the Board of
Directors for GRO. The Company has entered into licensing and servicing
agreements with this company. In December 2000, the licensing agreement
was amended to terminate development of a new product for GRO. As a
result of this modification, $153,000 of deferred license fees for GRO
were accelerated and recognized as revenue in 2000. At December 31,
2000, the Company still had approximately $358,000 of deferred license
fees from GRO to be recognized as revenue through 2003. The Company
recognized $190,000 in revenue during 2000 from this licensing
agreement. The Company owned 603 shares of GRO Corporation representing
an ownership interest of 5.1% at December 31, 2000.

NATIONAL BROADCASTING COMPANY, INC. ("NBC")

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

agreement with NBC terminates or expires, whichever event occurs
earlier. Pursuant to this agreement, NBC has designated and the Board of
Directors has approved Ms. Elisabeth Y. Sami.

In addition, GE Equity has the right to designate an individual to be
present at all Board of Director meetings. Such individual will not be a
participating or voting member of the Board of Directors and may remain
as a designee so long as GE Equity owns at least 5% of the Company's
outstanding common stock. Note 1 to the financial statements discusses
activity with NBC during 1999 under the caption "Concentration of Credit
Risk."

14. SUBSEQUENT EVENTS

TEAMVEST

In January 2001, the Company received a $1.5 million payment on the $4.2
million note receivable due from TeamVest that the Company entered into
in November 1999 (refer to Note 4 for details). The Company then
exercised its option to convert the remaining balance due on the note,
plus accrued interest of $407,000, into 1.9 million shares of TeamVest
common stock.

CONVERTIBLE PREFERRED STOCK

In January 2001, the holders of the 120,000 shares of Class A 5%
Convertible Preferred Stock agreed to exchange all of their shares for
new Class B 4% Convertible Preferred Stock. This stock pays $1.00 per
share per annum in dividends and is convertible into 3,000,000 shares of
Common Stock, which the Company has reserved for such conversion. The
stock automatically converts on May 15, 2002.

KEDS

In February 2001, all interests in KEDS, including the Company's 56%
interest, were sold to a third party. The net liabilities of KEDS, a
consolidated subsidiary of the Company, were reclassified as net
liabilities held for sale and are included in other liabilities on the
balance sheet at December 2000. In February 2001, the Company recognized
a $9,000 loss on the sale.

BPI

The Company had an agreement with BPI to provide hosting and development
services for multiple BPI Web sites. Revenue for these services
represented 12% and 10% of total revenue for 2000 and 1999,
respectively. This contract was amended on December 31, 2000 to a fixed
fee arrangement for the first three months of 2001 and then the
agreement and the fees are renewed month-to-month thereafter.

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. UNAUDITED SELECTED QUARTERLY RESULTS OF OPERATIONS

(in thousands, except per share data)
QUARTERS ENDED
--------------------------------------------------------
12/31/00 9/30/00 6/30/00 3/31/00
-------- -------- -------- --------

Revenue $ 8,003 $ 9,183 $ 8,925 $ 9,827
Cost and expenses from operations 11,650 17,462 18,186 11,848
-------- -------- -------- --------
Loss from operations (3,647) (8,279) (9,261) (2,021)
Other income (expense) (28,726) 180 8,865 12,245
Income tax (expense) benefit -- -- 2,041 (2,041)
-------- -------- -------- --------
Net income (loss) $(32,373) $ (8,099) $ 1,645 $ 8,183
======== ======== ======== ========
Net income (loss) attributable to common stockholders $(32,410) $ (8,137) $ 1,607 $ 8,146
======== ======== ======== ========

EARNINGS PER SHARE - BASIC
Net income (loss) $ (1.97) $ (0.48) $ 0.10 $ 0.49
======== ======== ======== ========
Weighted average shares 16,450 16,829 16,747 16,633
======== ======== ======== ========

EARNINGS PER SHARE - DILUTED
Net income (loss) $ (1.97) $ (0.48) $ 0.09 $ 0.47
======== ======== ======== ========
Weighted average shares 16,450 16,829 17,371 17,469
======== ======== ======== ========

QUARTERS ENDED
--------------------------------------------------------
12/31/99 9/30/99 6/30/99 3/31/99
-------- -------- -------- --------
Revenue $ 8,928 $ 6,735 $ 6,039 $ 4,736
Cost and expenses from operations 8,991 7,773 10,055 5,904
-------- -------- -------- --------
Loss from operations (63) (1,038) (4,016) (1,168)
Other income (expense) 268 166 34 (89)
Minority interest loss -- -- 24 32
-------- -------- -------- --------
Net income (loss) $ 205 $ (872) $ (3,958) $ (1,225)
======== ======== ======== ========
Net income (loss) attributable to common stockholders $ 168 $ (910) $ (3,995) $ (1,263)
======== ======== ======== ========

EARNINGS PER SHARE - BASIC
Net income (loss) $ 0.01 $ (0.06) $ (0.26) $ (0.09)
======== ======== ======== ========
Weighted average shares 16,511 16,174 15,131 14,068
======== ======== ======== ========

EARNINGS PER SHARE - DILUTED
Net income (loss) $ 0.01 $ (0.06) $ (0.26) $ (0.09)
======== ======== ======== ========
Weighted average shares 17,348 16,174 15,131 14,068
======== ======== ======== ========

16. LIQUIDITY

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. The Company
has an accumulated deficit of $58.4 million through December 31, 2000
and had negative cash flows from operations of $6.1 million, $2.5
million and $2.1 million for 2000, 1999, and 1998, respectively. It is
the Company's intention to control its operating expenses while
continuing to invest in its existing products. In addition, the Company
has implemented changes intended to reduce certain operating and general
and administrative expenses. The Company will

TELESCAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continue to liquidate its marketable securities portfolio during 2001
and is continuing its exploration of strategic alternatives. The Company
has incurred losses and is not achieving its fiscal year 2001 revised
projected revenues or cash flows from operations. Additionally, the fair
value of the Company's remaining marketable securities has continued to
decline. These matters raise substantial doubt about the Company's
ability to continue as a going concern. The Company is in the process of
consummating a merger with ZiaSun Technologies, Inc. ("ZiaSun"), as
discussed in Note 17. If this merger is consummated prior to year-end,
management believes the combined entity will have sufficient cash flows
to fund operations and capital requirements. Should the Company's
operating results not sufficiently improve or if the merger is not
consummated, it is probable that the Company will not be able to
sustain operations through December 31, 2001. There can be no assurance
that the Company will be able to successfully consummate the merger.
The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

17. EVENTS SUBSEQUENT TO AUDITOR'S REPORT (UNAUDITED)

SPECIAL AND OTHER CHARGES

The Company incurred $3.9 million in investment losses and severance
costs in the six months ended June 30, 2001.

MERGER WITH ZIASUN TECHNOLOGIES, INC.

In May 2001, the Company executed a merger agreement with ZiaSun to form
a new company, INVESTools Inc. ("INVESTools"). The new company will
provide investor education, financial publications and analytical tools
worldwide. The merger will be a stock for stock exchange with
shareholders of ZiaSun receiving 75% of the stock in the new company and
Telescan stockholders receiving 25% of the stock in the new company.
Each share of ZiaSun common stock will be exchanged for one share of
INVESTools common stock and each share of Telescan common stock will be
exchanged for 0.55531 of a share of INVESTools common stock. The Company
expects to complete the merger in November 2001.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF TELESCAN, INC.:

We have audited, in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements of Telescan, Inc. and
subsidiaries as of December 31, 2000 and for the year then ended included in
this Form 10-K/A and have issued our report thereon dated February 21, 2001
(except with respect to the matters discussed in Note 16, as to which the date
is September 25, 2001). Our audit was made for the purpose of forming an opinion
on the basic consolidated financial statements taken as a whole. The Schedule
listed in Item 14-2 is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. Information on this schedule for the year ended December 31, 2000
has been subjected to the auditing procedures applied in the audit of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Houston, Texas
February 21, 2001 (except with respect
to the matters discussed in Note 16, as to
which the date is September 25, 2001)

INDEPENDENT AUDITOR'S REPORT ON SCHEDULE

Board of Directors and Stockholders
Telescan, Inc.
Houston, Texas

We have audited the financial statements of Telescan, Inc. and subsidiaries as
of December 31, 1999 and 1998, and for each of the years in the two-year period
ended December 31, 1999. Our audits for such years also included the financial
statement schedule of Telescan, Inc. and subsidiaries, listed in Item 14-2, for
each of the years in the two-year period ended December 31, 1999. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to report on this schedule based on our audits. In our
opinion, such a financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth herein.

HEIN + ASSOCIATES LLP
Houston, Texas
February 25, 2000

TELESCAN, INC. AND SUBSIDIARIES
SCHEDULE I - VALUATION AND QUALIFYING ACCOUNTS
(in thousands)

DEDUCTIONS:
BALANCE AT ADDITIONS: ACCOUNTS WRITTEN
BEGINNING CHARGED TO COST OFF AGAINST BALANCE AT
DESCRIPTION OF THE YEAR AND EXPENSES ALLOWANCE END OF YEAR
--------------------------------- --------------- ------------------ ------------------ ------------------

December 31, 1998
Allowance for Doubtful Accounts $ 114 $ 399 $ (139) $ 374

December 31, 1999
Allowance for Doubtful Accounts $ 374 $ 184 $ (259) $ 299

December 31, 2000
Allowance for Doubtful Accounts $ 299 $ 530 $ (567) $ 262