AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 2000

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------

FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------------------

STOCKPOINT, INC.

(Exact Name of Registrant as Specified in Its Charter)

DELAWARE 7375 36-3775977
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization) Number)

2600 CROSSPARK ROAD
CORALVILLE, IOWA 52241
(319) 626-5000

(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

-----------------------

WILLIAM MCNALLY
GENERAL COUNSEL
STOCKPOINT, INC.
2600 CROSSPARK ROAD
CORALVILLE, IOWA 52241
(319) 626-5000

(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------

COPIES TO:

THOMAS MARTIN, ESQ. JEFFREY C. ROBBINS, ESQ.
KIRK COZINE, ESQ. ANNA C. LINDER, ESQ.
DORSEY & WHITNEY LLP MESSERLI & KRAMER P.A.
PILLSBURY CENTER SOUTH 1800 FIFTH STREET TOWERS
220 SOUTH SIXTH STREET 150 SOUTH FIFTH STREET
MINNEAPOLIS, MINNESOTA 55402 MINNEAPOLIS, MN 55402
(612) 340-2600 (612) 672-3600
FAX: (612) 340-8738 FAX: (612) 672-3777

-----------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
-----------------------

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

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

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

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

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

CALCULATION OF REGISTRATION FEE

Title of Each Class of Proposed Maximum Aggregate Amount of
Securities to be Registered Offering Price (1) Registration Fee
Common Stock, $.01 par value........ $45,000,000 $11,880

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
-----------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

- --------------------------------------------------------------------------------

The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS Subject to Completion dated March 31, 2000

[LOGO] STOCKPOINT

COMMON STOCK

---------------

We are an Internet services company that provides global online market
analysis tools and financial information. This is the initial public offering of
our common stock and no public market currently exists for our common stock.

We are offering _____ shares of our common stock. We currently expect the
initial public offering price will be between _____ and _____ per share. We have
applied for our common stock to be quoted on the Nasdaq National Market under
the symbol "STKP."

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 5.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE REGULATOR HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Per Share Total
- -------------------------------------------------------------------------------

Public offering price $ $
- -------------------------------------------------------------------------------
Underwriting discount $ $
- -------------------------------------------------------------------------------
Proceeds, before expenses, to Stockpoint $ $
- -------------------------------------------------------------------------------

The underwriters may purchase up to ________ additional shares of common
stock from us at the public offering price, less the underwriting discount,
within 30 days from the date of this prospectus to cover over- allotments.

The underwriters expect to deliver the shares of common stock to purchasers
in Newport Beach, California on or about _______________, 2000.

[GRAPHIC] ROTH CAPITAL PARTNERS, INC.

The date of this prospectus is ________, 2000

INSIDE COVER PAGE-- DESCRIPTION OF ARTWORK

Text at top of page reads: "Stockpoint seamlessly integrates customizable
financial content and applications into client web sites." To the right of the
text is the Stockpoint logo. Below the text are 11 client web site pages.

In the upper left-hand corner is the web site page of WR HAMBRECHT + CO,
depicting quote information for Microsoft Corp. Below the web page there is text
that reads: "WR Hambrecht + Co" and "wrhambrecht.com." Overlaying a portion of
this web page is the web page of Italia-iNvest.com depicting quote information
for Fiat in the Italian language. Below the web page is text that reads
"GlobalNetFinancial.com, Inc." and "italia-invest.com."

In the upper middle of the page is the web site page of LookSmart Ltd.,
depicting performance information for five individual stocks. The performance
information includes Market Price, Today's Change, Shares, Current Value, $
Gain/Loss and % Gain/Loss. Above the web page, there is text that reads:
"LookSmart Ltd".and "money.looksmart.com"

In the upper-right corner are the web site pages of National Discount Brokers
and SURETRADE, Inc. National Discount Brokers' web site page depicts
"stockfinder pro" and several optional sample screens a viewer can select. The
sample screens include: a Blue Chip stocks screen, Growth & Value Screen, Strong
Growth Screen and High Dividend Yield Screen. The web site page of
SURETRADE.COM. overlays a portion of National Discount Brokers' web page,
depicting "Fund Finder Pro" with twenty two Fund objectives that a viewer can
select. Below the web site page of SURETRADE.COM is text that reads: "SURETRADE,
INC." and " suretrade.com."

In the lower right-hand corner are the web site pages of Worldly Information
Network and Barclays Global Investors. The web page of Worldly Information
Network includes a graph of the Dow Jones Industrial Average and "global
indexes" for the Americas, Asia and Europe. The Americas indexes include Brazil
Bovespa Index, DJ Industrials, Dow Jones 20 Bond Average and Mexican Bolsa.
Below the web site is text that reads: "Worldly Information Network, Inc" and
"Worldlyinvestor.com". The Asia indexes include Australian All Ordinaries and
Hong Kong Seng.

Barclays Global Investors web site page overlays a portion of the
worldlyinvestors.com's web page. The background screen of Barclays Global
Investors' web site page is black, and the screen shows "Currency Calculator"
and a list of currencies a viewer can choose from. Below the web site page of
Barclays Global Investors, there is text that reads: "Barclays Global Investors
"and" barclaysglobal.com.".

In the lower middle of the page are the web site pages of A.B. Watley, Inc. and
MyWay.com. The MyWay.com web site depicts AT&T Corporation and its Analyst
Rating Summary, which includes Analyst Opinions and Average Recommendation.
Below the web site page of MyWay.com there is text that reads "MyWay.com" and
"myway.com." The web page of A.B. Watley, Inc. depicts three graphs: Equity
Indices, Interest Rates and Currency tables. Right below the three tables, there
is text that reads: "A.B. Watley Inc. is a wholly owned subsidiary of A.B.
Watley Group Inc." Below A.B. Watley's web site page there is text that reads:
"A.B. Watley Group Inc." and "abwatley.com."

In the lower left-hand corner are the web site pages of Robertson Stephens and
Quick & Reilly. The Robertson Stephens screen shows a graph named "The Kebdex"
and a viewer can click either "Weekly" or "interactive" to view different
charts. Above the web site page there is text that reads: "Robertson Stephens
"and" internetstocks.com". Quick & Reilly's web site page shows a graph of
"Bristol Myers Squibb Co." dated November 16, 1999. The lower half of the web
site page shows "Indicators and Display" a viewer can select. Below the web site
page reads "Quick & Reilly" and "quickandreilly.com."

TABLE OF CONTENTS

Prospectus Summary......................................................... 4
Risk Factors............................................................... 7
Forward-Looking Statements................................................. 14
Use of Proceeds............................................................ 15
Dividend Policy............................................................ 15
Dilution................................................................... 16
Capitalization............................................................. 17
Selected Consolidated Financial Information................................ 18
Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................................... 20
Business.................................................................. 27
Management................................................................. 38
Certain Transactions....................................................... 43
Principal Stockholders..................................................... 45
Description of Capital Stock............................................... 46
Shares Eligible for Future Sale............................................ 48
Underwriting............................................................... 50
Legal Matters.............................................................. 51
Experts.................................................................... 52
Where You Can Find More Information........................................ 52
Index to Financial Statements.............................................. F-1

------------------------

In making a decision to buy our common stock, you should only rely on the
information contained in this prospectus. We have not authorized anyone to
provide you with other information. We are offering to sell these shares only
where it is legal to sell them. The information in this prospectus is complete
and accurate as to the date on the front cover, but the information may have
changed since that date.

PROSPECTUS SUMMARY

Because this is only a summary, it does not contain all of the information
that may be important to you. For a more complete understanding of this
offering, we encourage you to read the entire prospectus, including the detailed
information and consolidated financial statements that it contains, before
making an investment decision.

STOCKPOINT

Stockpoint is a leading business-to-business provider of global online
market analysis tools and financial information. We integrate sophisticated
financial applications to provide our clients customized financial web pages
that we host using our proprietary architecture. This enables our clients to
outsource their financial web page production and maintenance, and provide
robust financial content to their users. Our clients include traditional and
online brokerage firms, commercial banks, asset managers, web portals, media
companies, electronic communication networks, 401(k) sponsors and insurance
companies. As of February 29, 2000, we had over 200 clients, including companies
such as Barclays Global Investors, LookSmart Ltd., Quick & Reilly Group Inc.
and U.S. Bancorp Piper Jaffray Inc.

We offer comprehensive solutions for businesses seeking to add financial
content to their web sites. With the solutions we provide and host, our clients
are able to offer their users real-time stock quotes, charting capabilities,
portfolio management and analysis tools, currency utilities, company research
and business news. Our services create an online environment that allows our
clients' users to easily analyze and manage their holdings using detailed
financial information and advanced Internet technologies.

In recent years, there has been a dramatic increase in the use of online
financial information services and trading. Investors are increasingly
looking to the Internet for information about their financial assets.
According to Forrester Research Inc., in 1999 there were 5.7 million
households using the Internet to execute financial transactions and obtain
financial information. Forrester Research predicts that this number will
increase to 21 million households by 2003, a number that would represent nearly
53% of U.S. households. In addition, both retail and institutional investors
increasingly demand up-to-the-minute information on security prices and business
trends, and the market analysis tools necessary to assimilate this information.
Many investors are using this information to manage their financial assets more
actively. Moreover, instead of resorting to a broker or other financial
intermediary, individual investors now have access to online trading services
that allow them to rapidly execute their own transactions at a lower cost than
that previously charged. Forrester Research has projected that online investment
accounts in the U.S. will grow from $374 billion of assets in 5.4 million online
accounts in 1999 to $3.1 trillion of assets in 20.4 million online accounts by
2003.

As a result of these developments, many companies that have an Internet
presence, including web portals and media companies, have developed or are
developing financial market content for their web sites in an effort to enhance
their attractiveness to Internet users and to assist in user retention. In
particular, many financial services companies such as commercial and investment
banks, mutual fund companies and 401(K) plan sponsors are concluding that the
availability of stock quotes, analysis and business information on their web
sites is a prerequisite to the generation of significant web traffic and
e-commerce transactions. The quality and breadth of financial information
offered is rapidly becoming a differentiator among financial services providers.

Our objective is to be the leading business-to-business provider of global
online market analysis tools and financial information. Key elements of our
strategy include:

o PENETRATING VERTICAL MARKETS. We intend to rapidly expand our sales
force to target businesses in industries that require robust online
market analysis tools and financial information on their web sites.
Our broad client experience enables us to intelligently recommend and
sell new products, content and services to improve web site
functionality.

O CREATING A WORLDWIDE PRESENCE. We intend to expand our product
offerings and international presence to serve the global online
financial information needs of our clients and their users. To further
our international objectives, we expect to open an office in London,
England in the next few months and intend to open an office in Asia
during 2000.

O USING TECHNOLOGY TO LEVERAGE OUR GROWTH. We intend to develop and
market innovative products and services to attract and retain clients.
We also intend to establish new facilities to maintain the scalability
and availability of our high quality web hosting services.

4
7

Our corporate headquarters are located at 2600 Crosspark Road, Coralville, Iowa
52241 and our phone number is (319) 626-5000. Our Internet address is
www.stockpoint.com. Information on our web site is not part of this prospectus.

THE OFFERING

Common stock offered...................... shares.

Common stock to be outstanding
after the offering..................... shares.

Use of proceeds........................... We intend to use the net proceeds to
repay most of our outstanding
indebtedness, to add sales and
marketing personnel, to continue
Internet product development, to
finance additional hosting
facilities and capacity and for
working capital and other general
corporate purposes.

Risk factors.............................. Investing in our common stock
involves risks.

Proposed Nasdaq National Market symbol.... "STKP."

----------------------

"Stockpoint" is our federally registered trademark. This prospectus also
contains names, trademarks, service marks and registered trademarks and service
marks of other companies.

----------------------

Except as otherwise noted, all information in this prospectus:

o reflects the automatic conversion of all our outstanding shares of
convertible preferred stock into an aggregate of 1,838,813 shares of
common stock upon completion of this offering;

o assumes no exercise of the underwriters' over-allotment option; and

o reflects our disposition on May 29, 1999 of technology and operational
assets related to the steel-making industry.

The number of shares of our common stock to be outstanding immediately
after this offering excludes 1,652,300 shares of common stock that we may issue
on the exercise of options outstanding as of December 31, 1999 and 1,810,639
shares of common stock that we may issue on the exercise of warrants outstanding
as of December 31, 1999.

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

YEAR ENDED DECEMBER 31,
------------------------------------------------------
1997 1998 1999
------------ ------------ ------------

STATEMENT OF OPERATIONS DATA:
Revenues ..................................... $ 1,427,908 $ 2,177,946 $ 6,829,869
Cost of revenues ............................. 308,608 764,965 2,289,881
------------ ------------ ------------
Gross profit ................................. 1,119,300 1,412,981 4,539,988
Operating expenses ........................... 4,366,476 6,856,777 7,429,328
------------ ------------ ------------
Operating loss from continuing operations .... (3,247,176) (5,443,796) (2,889,340)
Other expense primarily interest ............. (688,525) (784,546) (1,058,545)
Income (loss) from discontinued operations ... (405,722) (356,946) 347,675
Gain on disposition of discontinued operations -- -- 433,133
------------ ------------ ------------
Net loss ..................................... $ (4,341,423) $ (6,585,288) $ (3,167,077)
============ ============ ============

Basic and diluted loss per common share:
Historical loss from continuing operations . $ (1.90) $ (3.15) $ (2.03)
Historical net loss ........................ $ (2.10) $ (3.32) $ (1.67)
Pro forma loss from continuing operations .. $ (0.73)
Pro forma net loss ......................... $ (0.53)
Weighted average common shares outstanding ... 2,089,701 2,106,906 2,141,404

OTHER OPERATING DATA:
Contracted revenue backlog at period end (1) . $ 140,078 $ 1,458,447 $ 10,703,000

DECEMBER 31, 1999
----------------------------------------
ACTUAL AS ADJUSTED(2)
--------------- ---------------

BALANCE SHEET DATA:
Cash and cash equivalents.................................. $2,203,623
Working capital (deficit).................................. (2,668,644)
Total assets............................................... 6,089,138
Total debt................................................. 12,292,502
Stockholders' equity (deficiency)......................... $(11,426,863)

- -----------

(1) Represents contracted revenues at period end less amounts recognized
as revenue in the statement of operations. The balance of contracted
revenue backlog at period end represents amounts to be recognized in
the statement of operations in future periods over the duration of our
contracts.

(2) As adjusted to reflect the sale of shares of common stock in this
offering at an assumed offering price of $ per share, after
deducting the underwriting discount and estimated offering expenses
payable by us, and the application of a portion of the estimated net
proceeds from this offering to repay most of our outstanding
indebtedness, as described in "Use of Proceeds."

RISK FACTORS

Before investing in our common stock, you should be aware that there are
various risks, including those described below. As a Stockpoint stockholder, you
will be subject to the risks inherent in our business. The value of your
investment may decline, and could result in a loss of your entire investment.
You should carefully consider the following factors as well as the other
information contained in this prospectus before deciding to buy our common
stock.

RISKS RELATED TO OUR OPERATIONS

WE HAVE A HISTORY OF LOSSES AND EXPECT TO CONTINUE TO GENERATE LOSSES IN
THE FUTURE.

As of December 31, 1999, we had an accumulated deficit of $23.1 million, of
which $19.0 million is attributable to our continuing operations. We have not
achieved profitability and expect to continue to incur net losses into 2001. We
expect to continue to incur significant operating expenses and, as a result,
will need to generate significant revenues to achieve profitability, which may
not occur. Even if we do achieve profitability, we may be unable to sustain or
increase profitability on a quarterly or annual basis in the future.

WE HAVE A LIMITED HISTORY IN OPERATING OUR INTERNET-BASED LICENSING BUSINESS.

Our business model depends largely on our ability to license our Internet
products and hosting services to third parties. We began to emphasize this model
only in mid-1998. For us, this means that we have only limited experience in
operating an Internet-based licensing business from which to evaluate our
business prospects and analyze the risks and uncertainties that we face. We will
be adversely affected if we are unsuccessful in anticipating potential business
issues or in addressing unexpected issues as they arise. For you, this means
that you have limited historical information from which to evaluate our
prospects.

WE MAY NEED MORE CASH AFTER THIS OFFERING AND WE MAY NOT BE ABLE TO OBTAIN IT.

If we do not achieve or maintain significant revenues or profitability or
have not accurately predicted our cash needs, or if we decide to change our
business plans, we may need to raise additional funds in the future. Any
required funding may not be available to us on favorable terms, if at all. If we
raise additional funds by issuing equity securities, you may experience dilution
in your ownership interest. If we raise additional funds by issuing debt
securities, we may incur significant interest expense and become subject to
covenants that could limit our ability to operate and fund our business. If
additional funds are not available when required, we may be unable to
effectively realize our current plans.

IF WE ARE UNABLE TO ATTRACT OR RETAIN QUALIFIED DEVELOPMENT STAFF, OUR
BUSINESS COULD BE HARMED.

Our future success depends substantially upon the continued efforts of our
software applications and web programming staff to provide the integration
services necessary to timely create, implement and host web site financial
content for our clients, and to update and expand our web site offerings. None
of our software engineers and web programmers are bound by employment
agreements. Competition for software engineers is intense, particularly in San
Francisco and surrounding communities where we maintain offices, and we may not
be able to retain existing or attract additional highly qualified programmers in
the future. If we lose the services of a significant number of our applications
staff and web programming staff or are unable to continue to attract additional
applications and web programming staff with appropriate qualifications, the
quality of our product offerings and our ability to retain and expand our client
base could suffer.

WE DEPEND ON THE CONTINUED SERVICE OF OUR KEY OFFICERS.

Our future success depends to a significant extent on the continued service
and coordination of our management team. The departure of any of our officers or
key employees could materially adversely affect our ability to implement our
business plan.

OUR BUSINESS DEPENDS ON OUR ABILITY TO ENTER INTO AND MAINTAIN RELATIONSHIPS
WITH CONTENT PROVIDERS.

Our business depends on financial data and information, such as stock
pricing information and financial news and research information, obtained from
third-party providers through non-exclusive contractual relationships. Many of
our providers compete with each other and, to some extent, with us for clients.
Given the nature of our contracts with providers, we will be required to
renegotiate contracts, including the contract with our key supplier, S & P
Comstock, when they expire (usually one to two years). We may not be able to
renew these contracts on favorable terms or at all. There is intense competition
for relationships with these firms. We may have to pay significant fees to
establish additional content syndication relationships, particularly if we
expand, as expected, in international markets, or maintain existing
relationships in the future. We may be unable to enter into relationships with
these firms or sites on favorable terms or at all. Many of the financial content
providers that we have contracts with or have approached also provide financial
news and information to our competitors and clients. These companies may be
reluctant to enter into or maintain strategic relationships with us. In
addition, while we are not solely reliant on any one content provider, the loss
of a key vendor could render all or a portion of our services unavailable for a
period of time, which could have a negative impact on our client relationships
and cause harm to our reputation.

The terms of our agreements with content suppliers vary widely. The
services that we provide and the methods that we utilize to do so change
rapidly. Also, the law and legal practice for content supplier contracts are
unsettled and constantly developing. As a result, we must periodically modify
and renegotiate our vendor agreements. We attempt to operate our web site
customization and hosting services in accordance with our agreements and to
renegotiate them as necessary. However, we cannot assure you that our vendors
will not claim that we owe additional sums or must limit our activities.

IF OUR CLIENTS DO NOT BELIEVE OUR PRODUCT OFFERINGS PROVIDE THEM WITH A
COMPETITIVE BENEFIT, OUR ABILITY TO ATTRACT AND RETAIN CLIENTS COULD BE
ADVERSELY AFFECTED.

Most of our clients generate revenue through their web sites from
advertising revenue or transaction volume. To the extent that our clients
believe that they do not gain a competitive benefit, whether through increased
advertising revenue, transaction volume or otherwise, from the incorporation of
our financial content into their web sites, our ability to attract and retain
clients could be adversely affected.

WE HAVE LIMITED EXPERIENCE IN RENEWING OUR LICENSE CONTRACTS AND MAY NOT BE
ABLE TO RENEW A SIGNIFICANT PORTION OF THEM.

Only a relatively few of our license contracts, which typically have terms
that vary from one to two years, have come up for renewal. We have limited
experience with the renewal process. If we are unable to renew a significant
portion of our contracts with existing clients, our business and financial
performance could be materially adversely affected. In particular,
GlobalNetFinancial.com, Inc. represented 14% of our 1999 revenues.
GlobalNetFinancial.com has recently announced an agreement with Telescan Inc.,
one of our competitors, under which Telescan will increase an existing ownership
interest to give Telescan approximately 15% of GlobalNetFinancial.com's stock.
If GlobalNetFinancial.com or any other large client does not renew its license
contract with us, it could have a material adverse effect on our business and
financial performance.

OUR BUSINESS MAY SUFFER IF WE FAIL TO EFFECTIVELY MANAGE OUR GROWTH.

We have experienced rapid growth in our operations. This rapid growth has
placed, and our anticipated future growth will continue to place, a significant
strain on our managerial, operational and financial resources. Our current
management does not have extensive experience in managing a large corporation.
To manage our growth, we must continue to implement and improve our managerial
controls and procedures and operational and financial systems on a timely basis.
If we are unable to manage our growth effectively, our business could be
materially adversely affected.

OUR INTERNATIONAL OPERATIONS ARE NEW AND MAY NOT BE SUCCESSFUL.

We have only recently commenced operations in a number of international
markets and a key component of our strategy is to continue to expand our
international operations. We have limited experience in developing and obtaining
financial information relating to foreign markets and in marketing, selling and
distributing our products and

services internationally. We cannot assure you that we will be able to
successfully develop relationships with international content providers, or
successfully market, sell and distribute our products and services
internationally.

There are risks in doing business in international markets which could
adversely affect our business, including:

o difficulties in obtaining international quote and exchange data;

o regulatory requirements;

o export restrictions and controls, tariffs and other trade barriers;

o difficulties in staffing and managing international operations;

o fluctuations in currency exchange rates;

o reduced protection for intellectual property rights;

o seasonal reductions in business activity;

o potentially adverse tax consequences; and

o political and economic instability.

The growth of the Internet as a means of conducting international business
has raised many legal issues, including the circumstances under which countries
or other jurisdictions have the right to regulate Internet services available
from service providers located elsewhere. In many cases, there are no laws,
regulations, judicial decisions or governmental interpretations that clearly
resolve these issues. Our costs could increase and the growth of our
international operations could be harmed by any new laws or regulations, or the
application or interpretation of existing laws and regulations to the Internet.

INTENSE COMPETITION COULD REDUCE OUR MARKET SHARE AND HARM OUR FINANCIAL
PERFORMANCE.

We compete with an increasing number of companies that offer charting,
stock quotation and business information web applications, development and
hosting services. We also compete with the in-house development staffs of many
of our clients. We expect both of these forms of competition to continue to
intensify. Some of our existing competitors, as well as a number of potential
new competitors, have longer operating histories, greater name recognition,
larger client bases and significantly greater financial, technical and marketing
resources than we do. These factors may provide them with significant advantages
over us. Competitive pressures could result in reduced market share, price
reductions, reduced margins and increased spending on marketing and product
development, any of which could adversely affect our business.

FAILURE TO MAINTAIN OUR REPUTATION FOR RELIABILITY AND QUALITY MAY REDUCE THE
NUMBER OF OUR CLIENTS, WHICH COULD HARM OUR BUSINESS.

It is very important that we maintain our reputation as a reliable
developer and host of financial content for web sites. Many events beyond our
control, including slower response times than usual, systems or operations
failures, errors in the transmission of quotation data or the misreporting of
financial news or analysis by one or more of our content contributors, could
harm our reputation. These events could result in a significant reduction in the
number of our clients, which could materially adversely affect our business.

UNEXPECTED INCREASES IN TRAFFIC MAY STRAIN OUR SYSTEMS.

In the past, we have experienced significant spikes in traffic on the web
sites that we host when there have been important financial news events. Our
client base has increased over time and we are seeking to increase it further.
Our web site hosting systems must accommodate a high volume of traffic, often at
unexpected times. Our hosted web

sites may experience slower response times than usual, temporary
interruption of service or other problems for these and other reasons. These
occurrences could cause our clients to perceive our services as not being
adequate and, therefore, terminate or not renew their contracts with us. This
could adversely affect our business.

SYSTEM FAILURES, TO WHICH WE ARE PARTICULARLY VULNERABLE BECAUSE WE
CURRENTLY OPERATE ONLY ONE COMPUTER DATA CENTER, COULD ADVERSELY AFFECT OUR
BUSINESS.

Our systems and operations are vulnerable to damage or interruption from a
variety of factors, including human error, natural disasters, power loss,
telecommunication failures, break-ins, sabotage (physical or electronic),
computer viruses, vandalism and similar unexpected adverse events. We currently
operate only one computer data center. We do not expect to begin operating an
additional facility until at least the second half of 2000. This increases our
vulnerability, since localized problems at our Iowa facility, such as storm
damage or localized telephone failure, could make us unable to provide our
services. Unanticipated problems have caused interruptions in delivery of our
services in the past and similar problems could occur in the future. Any system
failure, including network, software or hardware failure, that causes an
interruption in our services or a decrease in responsiveness of our hosted web
sites could result in canceled client contracts, reduced revenue and harm to our
reputation, brand and our relations with our providers and adversely affect our
business.

POTENTIAL FLUCTUATIONS IN OUR QUARTERLY FINANCIAL RESULTS MAKE FINANCIAL
FORECASTING DIFFICULT.

Our quarterly operating results may fluctuate significantly in the future
as a result of a variety of factors, many of which are outside our control.
These factors include:

o the number, size and timing of new license contracts sold;

o the number, size and timing of license renewals and terminations;

o the character of any development services required by our clients;

o our ability to develop, market and introduce new and enhanced services
on a timely basis;

o actions taken by our competitors, including new product introduction
and enhancements; and

o adverse changes in the financial markets.

We believe that quarter-to-quarter comparisons of our operating results may
not be a good indication of our future performance. Investors should not rely on
our operating results for any particular quarter as an indication of our future
operating results.

DIFFICULTIES ASSOCIATED WITH OUR BRAND DEVELOPMENT MAY HARM OUR ABILITY TO
ATTRACT CLIENTS.

We believe that maintaining and increasing awareness of the Stockpoint
brand is an important aspect of our efforts to continue to attract clients. The
importance of brand recognition will increase in the future because of the
growing number of web sites providing financial content and information.
However, our efforts to build brand awareness may not be successful.

EVENTS RELATED TO OUR FORMER CHIEF EXECUTIVE OFFICER COULD AFFECT OUR
REPUTATION AND HARM OUR BUSINESS.

Robert Staib, our former Chief Executive Officer and a former director, was
arrested in December 1998 and indicted in April 1999 for bank fraud in
connection with the pledge of stock certificates he held in UAL, Inc. to secure
loans to an unrelated company. Robert Staib pleaded guilty to certain
allegations in March 2000 as part of an agreement settling the indictment. His
sentencing is currently set for June 2000. Robert Staib has not been an officer
or director of Stockpoint since his arrest in December 1998. Nevertheless,
publicity related to his sentencing or other events could include references to
us or to William Staib, our Chief Executive Officer and the son of Robert Staib.
Publicity of this type could cause harm to our reputation and business, and our
ability to obtain financing.

COURT ACTION RELATING TO A SETTLEMENT AGREEMENT WITH ROBERT STAIB COULD
CHANGE THE NUMBER OF WARRANTS OUTSTANDING.

We settled a dispute in December 1999 regarding the number of warrants to
which Robert Staib was entitled by agreeing that some of his warrants were valid
in consideration of the surrender of warrants to purchase 912,500 shares that he
held. A creditor of Robert Staib is seeking to invalidate this settlement
agreement. If the creditor were successful, we might have to reissue these
warrants.

ACQUISITIONS OF COMPANIES OR TECHNOLOGIES MAY RESULT IN DISRUPTIONS TO OUR
BUSINESS AND MANAGEMENT.

We may acquire products, technologies or businesses that we believe would
help expand our product and service offerings. Any future acquisitions would
present risks, including the difficulty of combining the technology, operations
or workforce of the acquired business with our own, disruption of our ongoing
operations and difficulty in realizing the anticipated financial or strategic
benefits of the transaction. Acquisitions may also divert management's attention
from day-to-day operations. These factors and our limited experience in
negotiating, consummating and integrating acquisitions could adversely affect
our business, earnings, financial condition and, ultimately, our stock price.
Acquisitions that use stock as payment also could result in dilution of our per
share earnings and of your voting rights.

FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD HARM OUR
BRAND-BUILDING EFFORTS AND ABILITY TO COMPETE EFFECTIVELY.

We rely on a combination of trademark and copyright law, trade secret
protection, confidentiality agreements and other contractual arrangements to
protect our intellectual property rights. We do not rely on patented processes
or technologies. The protective steps we have taken may be inadequate to deter
misappropriation of our proprietary information. We may be unable to detect the
unauthorized use of, or take appropriate steps to enforce, our intellectual
property rights. We have registered our trademarks in the United States and we
have pending U.S. applications for other trademarks. Effective trademark,
copyright and trade secret protection may not be available in every country in
which we offer or intend to offer our services. Failure to adequately protect
our intellectual property could harm our brand, devalue our proprietary content
and affect our ability to compete effectively. Defending our intellectual
property rights could also result in the expenditure of significant financial
and managerial resources, which could materially adversely affect our business.

WE MAY HAVE TO DEFEND AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS,
WHICH COULD CAUSE SIGNIFICANT EXPENDITURES.

Although we believe that our business activities do not infringe the
intellectual property rights of others, other parties may assert infringement
claims against us or claim that we have violated a patent or infringed a
copyright, trademark or other proprietary right belonging to them. The services
we provide make extensive use of licensed third- party content and some use of
licensed third-party technology. In the license agreements with respect to these
items, the licensors have generally agreed to defend, indemnify and hold us
harmless with respect to any claim by a third party that any licensed content or
software infringes any intellectual property right. These provisions may not be
adequate to protect us from infringement claims. In particular, increasing
attempts to patent software techniques and concepts may lead to an increase in
claims of infringement, particularly with respect to companies involved in the
Internet. We have received a claim that our use of some algorithms may require a
license. Infringement claims, even if not meritorious, could result in the
expenditure of significant financial and managerial resources, which could
materially adversely affect our business.

DIFFICULTIES IN DEVELOPING NEW AND ENHANCED SERVICES AND FEATURES COULD HARM
OUR BUSINESS.

We intend to introduce additional and enhanced products and services to
retain our current clients, expand the products and services our clients use and
attract new clients. If our services are not favorably received or a competitor
introduces a service that we are unable to provide, potential clients may choose
a competitor's products or services and current clients may decline to renew
their contracts with us. We may experience difficulties that could delay or
prevent our introduction of new services. These difficulties may include the
inability to obtain or maintain third-party technology license agreements. New
services could contain errors that are discovered after introduction. If so, we
may need to significantly modify the design or implementation of these services
to correct any errors. If we

experience difficulties in introducing new services or if these new services
do not attract significant licensing interest, our business could be materially
adversely affected.

WE MAY NOT BE ABLE TO ADAPT AS INTERNET TECHNOLOGIES AND CLIENT DEMANDS EVOLVE.

To be successful, we must adapt to our rapidly changing market by
continually enhancing the technologies used in our products and services, and
introducing new technology to address the changing needs of our business and
consumers. If we are unable, for technical, legal, financial or other reasons,
to adapt in a timely manner to changing market conditions or business and client
requirements, our business could be materially adversely affected.

RISKS RELATED TO OUR INDUSTRY

IF THE MARKET FOR PRODUCTS AND SERVICES RELATED TO INTERNET-BASED FINANCIAL
INFORMATION DOES NOT DEVELOP AS WE ANTICIPATE, WE MIGHT NOT ACHIEVE OUR BUSINESS
OBJECTIVES.

The market for Internet-based financial information has only recently begun
to develop. Because the market for our services is new, it is difficult to
accurately predict the growth rate and ultimate size of this market. In
addition, the market is rapidly evolving and is characterized by an increasing
number of potential competitors. The market for our services may not continue to
develop, or may develop more slowly than we expect, and our product offerings
may never achieve significant market acceptance. A downturn in the financial
markets could result in a decline in interest in individual investing, which
could adversely affect the market for our services. In addition, U.S. financial
institutions are continuing to consolidate, which may increase our clients'
leverage to negotiate prices and decrease the overall potential market for some
of our services. These factors, as well as other changes occurring in the
financial services industry, could have a material adverse effect on our
business.

CONCERNS ABOUT THE SECURITY AND OPERATION OF OUR WEB SITE HOSTING SERVICES
COULD INCREASE OUR EXPENDITURES OR DECREASE OUR CLIENT BASE.

There have been several recent widely-publicized instances of "hackers"
compromising the integrity, security and operation of web sites. We may have to
incur significant costs to protect our web site or those of our clients or to
alleviate problems caused by "hacking" if there is any:

o perceived increase in "hacking" activity;

o perception that our web site or the web sites that we host are
particularly vulnerable to this kind of activity; or

o instance in which our web site or one of the web sites we host is
affected by this kind of activity.

In addition to increased costs, any of these occurrences may decrease our
ability to retain existing clients or attract new ones.

OUR ABILITY TO MAINTAIN AND INCREASE OUR CLIENT BASE DEPENDS ON THE
CONTINUED GROWTH IN USE AND EFFICIENT OPERATION OF THE INTERNET.

Our business would be materially adversely affected if Internet usage does
not continue to grow or grows slowly. Internet usage may be inhibited for a
number of reasons, such as:

o inadequate Internet infrastructure to support the demands placed on it
as usage grows;

o continued security and authentication concerns with respect to
transmission over the Internet of confidential information;

o privacy concerns, including those related to the placement by web
sites of information on a user's hard drive without the user's
knowledge or consent;

o any well-publicized compromise of web site or Internet transmission
security;

o inconsistent quality of Internet products and services;

o limited availability of cost-effective, high-speed access to the
Internet; and

o significant future Internet service provider delays or outages.

POTENTIAL LIABILITY FOR INFORMATION DISPLAYED ON OUR WEB SITE OR THE WEB
SITES OF OUR CLIENTS MAY REQUIRE US TO DEFEND AGAINST LEGAL CLAIMS, WHICH MAY
RESULT IN SIGNIFICANT EXPENSE.

If any information that we publish proves to be erroneous, we might face
lawsuits based on claims of losses resulting from actions taken on the basis of
that information. We may also be subject to claims for defamation, libel,
copyright or trademark infringement or claims based on other theories relating
to the information we publish on our web site and the web sites of our clients.
These types of claims have been brought, sometimes successfully, against online
services as well as other print publications in the past. We could also be
subject to claims based upon the content that is accessible from our web site or
our clients' web sites through links to other web sites. Our insurance and
contractual indemnification provisions may not adequately protect us against
many of these claims. Defending against any claims like this could result in the
expenditure of significant financial and managerial resources, whether our
insurance covers us or not.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES RELATING TO THE INTERNET
COULD INCREASE OUR COSTS OF TRANSMITTING DATA AND LEGAL AND REGULATORY
EXPENDITURES AND DECREASE OUR CLIENT BASE.

Existing domestic and international laws or regulations specifically
regulate communications or commerce on the Internet. Laws and regulations that
address issues such as user privacy, pricing, online content regulation,
taxation and the characteristics and quality of online products and services are
under consideration by federal, state, local and foreign governments and
agencies. Several telecommunications companies have petitioned the Federal
Communications Commission to regulate Internet service providers and online
services providers in a manner similar to the regulation of long distance
telephone carriers and to impose access fees on such companies. This regulation,
if imposed, could increase the cost of transmitting data over the Internet. It
may take years to determine the extent to which existing laws relating to issues
such as intellectual property ownership and infringement, libel, obscenity and
personal privacy are applicable to the Internet. The Federal Trade Commission
and government agencies in some states have been investigating Internet
companies regarding their use of personal information. We could incur additional
expenses if any new regulations regarding the use of personal information are
introduced or if these agencies chose to investigate our privacy practices.
Further, due to the global nature of the Internet, it is possible that some
states, the United States or foreign countries might attempt to levy taxes on
our activities. Any new laws or regulations relating to the Internet, or adverse
application or interpretation of existing laws, could decrease the rate of
growth in the use of the Internet and the demand for our products and services.

RISKS RELATED TO THE OFFERING

THERE HAS BEEN NO PRIOR PUBLIC MARKET FOR OUR COMMON STOCK AND THE PRICE IN
THIS OFFERING MAY NOT BE INDICATIVE OF THE PRICE AFTER THE OFFERING, WHICH MAY
DECLINE BELOW THE INITIAL PUBLIC OFFERING PRICE.

Prior to this offering, there has been no public market for our common
stock. The initial public offering price will be determined by negotiations
between us and the representatives of the underwriters with reference to the
general status of the securities market and other relevant factors. The offering
price for the common stock should not be considered an indication of the actual
value of the common stock and was not based on our net worth or prior earnings,
of which there are none. The offering price may not be indicative of the price
that will prevail in the public market after the offering. In particular, the
market price of our common stock may decline below the initial public offering
price. After this offering, an active trading market may not develop or be
sustained.

OUR STOCK PRICE MAY FLUCTUATE WIDELY.

The prices at which our common stock will trade could be subject to wide
fluctuations in response to changes in earnings estimates by analysts or other
events or factors, many of which are beyond our control. The stock market has
from time to time experienced extreme price and volume fluctuations which have
often been unrelated to the

operating performance of the companies affected. These fluctuations have
particularly affected securities of Internet- related companies. Investors may
experience a material decline in the market price of our common stock,
regardless of our operating performance. In the past, following periods of
volatility in the market price of a particular company's securities, securities
class action litigation has often been brought against that company. We may
become involved in this type of litigation in the future. Litigation of this
type is often expensive and diverts management's attention and resources.

SUBSTANTIAL SALES OF OUR COMMON STOCK, OR THE PERCEPTION THAT SUBSTANTIAL
SALES MAY OCCUR, COULD CAUSE OUR STOCK PRICE TO FALL AND MAKE IT DIFFICULT FOR
US TO SELL ADDITIONAL SECURITIES.

If our stockholders sell substantial amounts of our common stock, in the
public market following this offering, the market price of our common stock
could fall. These sales might also make it more difficult for us to sell equity
securities in the future at a time and price that we deem appropriate. After
this offering, we will have _____ outstanding shares of common stock, assuming
no exercise of the underwriters' over-allotment options and no exercise of
outstanding options or warrants. Of these shares, the ______ shares sold in this
offering will be freely tradeable, except for any shares purchased by our
"affiliates," as defined in Rule 144 under the Securities Act. Other than ______
shares subject to a 180-day lock-up period, 4,010,181 of the shares of common
stock outstanding prior to this offering will be freely tradeable immediately
after completion of this offering except for any shares held by our affiliates.
The remaining 4,750 shares will become eligible for resale 90 days after the
effective date of this offering. In addition, the holders of 897,063 shares of
common stock and the holders of warrants to purchase 1,598,639 shares of our
common stock will be entitled to have the resale of their shares registered
under the Securities Act, or to participate in subsequent registrations, or
both. After the date of this prospectus, we intend to register up to _______
shares issuable upon the exercise of outstanding stock options and reserved for
issuance under our stock option plans. Once we register these shares, they can
be sold in the public market immediately following issuance.

OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY DISCOURAGE A TAKEOVER OF
STOCKPOINT.

Provisions of our certificate of incorporation, bylaws and Delaware law
could make it more difficult for a third party to acquire us, even if doing so
would be beneficial to our stockholders.

MANAGEMENT COULD SPEND OR INVEST THE PROCEEDS OF THIS OFFERING IN WAYS WITH
WHICH YOU MAY NOT AGREE.

Our management will have significant discretion in applying the net
proceeds of this offering, and may spend or invest the proceeds from this
offering ineffectively or in ways with which you may not agree.

YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION.

If you purchase shares of our common stock, you will incur immediate and
substantial dilution in net tangible book value per share. If the holders of
outstanding options or warrants exercise those options or warrants, you will
experience further dilution.

WE DO NOT INTEND TO PAY DIVIDENDS.

We currently intend to retain any earnings for use in the operation and
expansion of our business and therefore do not anticipate paying any cash
dividends in the foreseeable future.

FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements. We have based these
statements on our current expectations and projections about future events.
These forward-looking statements include statements about:

o our strategies;

o the future growth of the Internet;

o worldwide growth in use of Internet as a source of information for
personal financial planning and transactions;

o buying patterns of our clients;

o trends based on our perceptions of past activity; and

o other statements that are not historical facts.

When used in this prospectus, the words "anticipate," "believe," "expect,"
"estimate" and similar expressions are generally intended to identify
forward-looking statements. Our actual results may vary materially from those
anticipated or implied by these forward-looking statements as a result of a
number of risks and uncertainties, including the risks described in "risk
factors" or elsewhere in this prospectus.

USE OF PROCEEDS

We estimate our net proceeds from the sale of the shares of our common
stock offered in this offering to be approximately $ million, or
approximately $ million if the underwriters' over-allotment option is
exercised in full, based on an assumed initial public offering price of $
per share and after deducting the underwriting discount and estimated offering
expenses.

We intend to use $11,370,000 of the net proceeds from this offering to
repay most of our outstanding indebtedness. All repayments will include the
amount of interest accrued through the date of repayment. The remaining proceeds
will be used primarily to add sales and marketing personnel for our Internet
business, to continue development of our Internet products, to finance
additional hosting facilities and capacity and for working capital and other
general corporate purposes. The amounts we actually expend for such purposes
may vary and will depend on a number of factors, including the amount of our
future revenues. We expect that the proceeds from this offering will
be sufficient to meet our needs at least through 2001.

We intend to repay the following debt outstanding as of February 29, 2000:

o $4,145,000 of notes payable with two banks which bear interest at the
prime rate;

o $5,900,000 principal amount of debentures which bear interest at 8.75%
and mature September 30, 2002; and

o $1,325,000 outstanding under a line of credit with a commercial bank
which bears interest at the prime rate and is secured by substantially
all our assets.

In addition, we may acquire businesses, products and technologies that are
complementary to ours, and a portion of the net proceeds may be used for these
acquisitions. We have no agreements with respect to any material acquisitions as
of the date of this prospectus.

Pending these uses, we intend to invest the net proceeds from this offering
in short-term, investment-grade, interest-bearing securities.

DIVIDEND POLICY

We currently intend to retain any earnings for use in the operation and
expansion of our business and therefore do not anticipate paying any other cash
dividends in the foreseeable future.

DILUTION

If you invest in our common stock, your interest will be diluted to the
extent of the difference between the public offering price per share of our
common stock and the pro forma net tangible book value per share of our common
stock after this offering. Pro forma net tangible book value dilution per share
represents the difference between the amount per share paid by purchasers of
shares of common stock in this offering and the pro forma net tangible book
value per share of common stock immediately after completion of this offering.

Our pro forma net tangible book value as of December 31, 1999 was
$(11,858,203), or $(2.95) per share of common stock. Pro forma net tangible book
value per share is equal to our total tangible assets less total liabilities,
divided by the number of outstanding shares of common stock after giving effect
to the conversion of our outstanding preferred stock into common stock in
connection with this offering. After giving effect to our sale of the shares of
common stock offered by this prospectus at an assumed initial offering price of
$ per share and after deducting the underwriting discount and estimated
offering expenses payable by us, our as adjusted pro forma net tangible book
value as of December 31, 1999 would have been approximately $ , or $ per
share. This represents an immediate increase in pro forma net tangible book
value of $ per share to existing stockholders and an immediate dilution of
$ per share to new investors purchasing shares in this offering. If the
initial public offering price is higher or lower, the dilution will be greater
or less, respectively. The following table illustrates this per share dilution
to new investors:

Assumed initial public offering price per share.............................. $
Pro forma net tangible book value per share as of December 31, 1999.......... (2.95)
Increase in pro forma net tangible book value per share attributable to
this offering.............................................................
-----------
Pro forma net tangible book value per share after the offering..............
-----------
Dilution per share to new investors......................................... $
===========

The following table summarizes, on the pro forma basis described above, as
of December 31, 1999, the differences between the number of shares of common
stock purchased from us, the total cash consideration paid to us and the average
price per share paid by existing stockholders and new investors:

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

Existing Stockholders 4,014,931 % $10,325,133 % $ 2.57
New Investors
------------ ----------- --------------- -----------
Total 100% 100%
============ =========== =============== ===========

The above discussion and tables exclude all options and warrants that will
remain outstanding upon completion of this offering. At December 31, 1999, there
were 1,652,300 shares of common stock reserved for issuance upon exercise of
outstanding options with a weighted average exercise price of $4.20 per share,
and 1,810,639 shares of common stock issuable upon exercise of outstanding
warrants with a weighted average exercise price of $5.86 per share. To the
extent that any of these options or warrants are exercised, there will be
further dilution to new investors.

CAPITALIZATION

The following table sets forth our capitalization as of December 31, 1999
as follows:

o on an actual basis;

o on a pro forma basis to give effect to the conversion of all
outstanding shares of our preferred stock into 1,838,813 shares of
common stock; and

o on a pro forma, as adjusted basis to reflect both the conversion of
all outstanding shares of our preferred stock into common stock as
described above and the application of the estimated net proceeds from
this offering to repay most of our outstanding indebtedness, as
described in "Use of Proceeds."

December 31, 1999
-------------------------------------------------
Actual Pro forma As Adjusted
------------ ------------ -----------

Long term debt, less current portion ...................................... $ 10,536,681 $ 10,536,681 $ --
------------ ------------ ----------
Stockholders' equity (deficiency):
Preferred Stock, no par value per share; 5,000,000 shares authorized:
Convertible Series A Voting Preferred Stock, 320,000 shares issued and
outstanding (convertible into 500,000 shares of common stock),
no shares outstanding pro forma and as adjusted .............. 1,965,991 -- --
Convertible Series B Voting Preferred Stock, 282,720 shares issued and
outstanding (convertible into 441,750 shares of common stock),
no shares outstanding pro forma and as adjusted .............. 1,733,639 -- --
Convertible Series C Voting Preferred Stock, 773,254 shares issued and
outstanding (convertible into 897,063 shares of common stock),
no shares outstanding pro forma and as adjusted .............. 5,455,319 -- --
Common stock, $.01 par value per share; 20,000,000 shares authorized;
2,176,118 shares issued and outstanding, 4,014,931 shares outstanding pro
forma, ____ shares outstanding as adjusted .............................. 21,761 40,149
Common stock warrants ................................................... 819,868 819,868
Additional paid-in capital .............................................. 3,875,620 13,012,181
Deferred stock-based compensation ....................................... (2,194,978) (2,194,978)
Accumulated deficit ..................................................... (23,104,083) (23,104,083)
------------ ------------
Total stockholders' equity (deficiency) ............................... (11,426,863) (11,426,863)
------------ ------------ ----------
Total capitalization ......................................... $ (890,182) $ (890,182) $
============ ============ ==========

SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following selected consolidated financial data should be read in
conjunction with the consolidated financial statements and related notes and
with the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this prospectus. The consolidated
statement of operations data for 1995 through 1999 and the balance sheet data at
December 31 for each of 1995 through 1999 are derived from our audited
financial statements. We reclassified our audited financial statements to give
effect to sale of our process optimization software segment in May 1999.
Historical results are not necessarily indicative of future results.

YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
1995 1996 1997 1998 1999
------------ ------------ ------------ ------------ ------------

Statement of Operations Data (1):
Revenues .......................................... $ 363,454 $ 862,488 $ 1,427,908 $ 2,177,946 $ 6,829,869
Cost of revenues .................................. 334,745 273,003 308,608 764,965 2,289,881
------------ ------------ ------------ ------------ ------------
Gross profit ...................................... 28,709 589,485 1,119,300 1,412,981 4,539,988

Research and development .......................... 285,483 579,548 1,057,071 1,101,471 1,637,150
Sales and marketing ............................... 297,654 254,273 752,675 1,566,030 1,590,899
General and administrative ........................ 1,499,340 1,845,637 2,556,730 3,523,006 3,588,977
Deferred compensation ............................. -- -- -- 666,270 612,302
------------ ------------ ------------ ------------ ------------
Total operating expenses ........................ 2,082,477 2,679,458 4,366,476 6,856,777 7,429,328
------------ ------------ ------------ ------------ ------------

Operating loss from continuing operations ......... (2,053,768) (2,089,973) (3,247,176) (5,443,796) (2,889,340)

Other expense, primarily interest ................. (206,570) (394,505) (688,525) (784,546) (1,058,545)
------------ ------------ ------------ ------------ ------------

Loss from continuing operations ................... (2,260,338) (2,484,478) (3,935,701) (6,228,342) (3,947,885)

Discontinued operations:
Income (loss) from discontinued operations ...... 726,808 (177,877) (405,722) (356,946) 347,675
Gain on disposition of discontinued operations .. -- -- -- -- 433,133
------------ ------------ ------------ ------------ ------------
Net loss .......................................... (1,533,530) (2,662,355) (4,341,423) (6,585,288) (3,167,077)
Cumulative dividends on preferred stock ........... -- -- (40,266) (409,418) (412,918)
------------ ------------ ------------ ------------ ------------
Net loss applicable to common stockholders ........ $ (1,533,530) $ (2,662,355) $ (4,381,689) $ (6,994,706) $ (3,579,995)
============ ============ ============ ============ ============
Basic and diluted income (loss) per common share (2):
Loss from continuing operations ................. $ (1.10) $ (1.21) $ (1.90) $ (3.15) $ (2.03)
Income (loss) from discontinued operation ....... $ 0.35 $ (0.08) $ (0.20) $ (0.17) $ 0.36
Net loss ........................................ $ (0.75) $ (1.29) $ (2.10) $ (3.32) $ (1.67)
Weighted average common shares outstanding ........ 2,056,087 2,056,087 2,089,701 2,106,906 2,141,404

Pro forma basic and diluted income (loss)
per common share (3):
Loss from continuing operations ................. $ (0.73)
Income (loss) from discontinued operations ...... $ 0.20
Net loss ........................................ $ (0.53)
Weighted average pro forma common shares
outstanding ....................................... 3,947,781

Other Operating Data:
Contracted revenue backlog at period end (4) ...... -- $ 84,265 $ 140,078 $ 1,458,447 $ 10,703,000

DECEMBER 31,
-----------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 AS ADJUSTED(5)
------------ ------------ ------------ ------------ ------------ --------------

BALANCE SHEET DATA:

Cash and cash equivalents ....... $ 612,242 $ 596,073 $ 242,609 $ 221,098 $ 2,203,623
Working capital (deficit) ....... 300,606 (186,491) (498,987) (5,350,171) (2,668,624)
Total assets .................... 2,589,959 2,343,636 2,588,254 3,794,347 6,089,138
Short term debt ................. -- 10,000 -- 4,395,000 1,755,821
Long term debt .................. 3,750,000 5,750,000 5,550,000 5,900,000 10,536,681
Stockholders' equity (deficiency) (2,464,310) (5,071,034) (4,627,141) (9,745,756) (11,426,863)

(1) We have reclassified our statement of operations data for 1995 through
1999 to give effect to the sale in May 1999 of our process optimization
software segment for $750,000, plus potential royalties.

(2) We computed net loss per share information applicable to common
stockholders by including cumulative dividends on our preferred stock.
For additional information, see Note 1 to our consolidated financial
statements.

(3) We prepared the pro forma income (loss) per common share information
for 1999 by assuming that our preferred stock was converted into common
stock as of January 1, 1999, or as of the issuance date for shares of
Series C preferred stock issued during 1999 in lieu of dividends. These
conversions will occur automatically upon completion of this offering.
We also excluded interest expense for 1999 on the debt we expect to
repay with a portion of the proceeds from this offering.

(4) Represents contracted revenues at period end less amounts recognized as
revenue in our statement of operations.

(5) As adjusted to reflect the sale of ______shares of common stock in this
offering at an assumed offering price of $______ per share, after
deducting the underwriting discount and estimated offering expenses
payable by us, and the application of a portion of the estimated net
proceeds from this offering to repay most of our outstanding
indebtedness, as described in "Use of Proceeds."

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis together with the
"Selected Consolidated Financial Data" and our consolidated financial statements
and the related notes included elsewhere in this prospectus. The following
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ substantially from those discussed
below as the result of many factors, including those discussed below and
elsewhere in this prospectus, particularly in "Risk Factors."

OVERVIEW

We were incorporated in 1987 as Milltech HOH, Inc., an Illinois
corporation, and reincorporated in 1993 as Neural Applications Corporation, a
Delaware corporation. We originally developed, marketed and supported software
based solutions for industrial, financial and other data intensive markets. We
derived virtually all of our revenue through 1995, and a majority of our revenue
from 1996 through 1998, from sales of our process optimization software
solutions in the metals industry. We sold our process optimization software
business in May 1999 for $750,000 plus future royalties, resulting in a gain of
$450,000. We have classified our process optimization software business
operating results as "discontinued operations" in our consolidated statements of
operations and the related assets and liabilities as "net assets of discontinued
operations" in our balance sheets. The discussion below of our results of
operations relates solely to our continuing operations.

During 1997, we began to shift our primary focus to the development and
sale of online market analysis tools and financial information for the
Internet. In March 1997, we acquired Ethos Corporation, a California company
formed in July 1995 that had developed a web site featuring stock quotation
capability (then "www.investorsedge.com"). This web site is the predecessor of
our current Stockpoint.com web site. We accounted for the acquisition of Ethos
as a pooling of interests and restated our financial statements for periods
prior to the acquisition to include the combined financial information of both
companies for all periods presented.

Since 1997, we have placed increasing emphasis on the enhancement of our
Internet business. In July 1999, to better reflect our position as an Internet
applications and financial information services provider, we changed our name to
Stockpoint, Inc.

RESULTS OF OPERATIONS

Our revenues include license fees for hosting and custom software
application services for financial web sites and advertising revenues from
banner ads placed on our web site and those of our clients. In addition, we have
historically generated revenues from assorted data mining and financial services
consulting projects for our clients. We anticipate that licensing revenues will
represent the vast majority of our revenues in future periods.

Our Internet business model has evolved from an initial dependence on
advertising revenues from our web site to our current model, which emphasizes
licensing of web site products and services to business clients. During 1997,
our revenues began to shift from advertising revenues to licensing revenues.
Licensing of web site products and services to business clients comprised 48%
of our 1997 revenues. By 1998, 57% of our revenues were licensing revenues. In
1999, licensing revenues represented 84% of our revenues. Our license
agreements typically provide for a flat fee for the agreement's term. We base
this fee principally on the client's selection of site features. We also
generally charge a per-view fee if page views exceed the amount stated in
the contract.

Our average contract size has increased from $3,500 in 1997 to $60,000 in
1999. This increase has been primarily the result of the introduction of more
comprehensive product offerings and the expansion of our client base to include
companies interested in licensing more sophisticated product options. In
addition, beginning in 1999, we have been emphasizing two-year contracts, which
increases the average licensing revenues per contract.

Although we generally bill our clients up-front for a portion of our
services, we recognize revenues ratably over the period of the contract. We
reflect the obligation to provide the contracted services as "deferred revenue"
on our balance sheet. This means that we record a liability to balance our
accounts receivable or cash, depending on whether we have collected our
billings. We amortize deferred revenue as we provide the services. Our licensing

contracts typically have lengths of one or two years. We recognize revenues
for extensive custom development and for projects as we perform the services.

Our direct cost of revenues primarily includes fees for data feeds and
licenses, custom applications and development charges and maintenance of
infrastructure, programming and quality assurance. We show these costs in our
statement of operations as "cost of revenues." We expect that an increasing
percentage of cost of revenues will be variable cost components that will
increase as our volume rises. We also include the direct development and
related costs associated with our data mining applications and consulting
services for projects in the Internet and financial services markets in our
cost of revenues.

Operating expense includes research and development, sales and marketing,
general and administrative and deferred compensation expense. These costs
primarily include compensation and related benefits for personnel along with
professional fees, travel, employee recruiting expense and occupancy costs.
Deferred compensation expense results from the difference between the exercise
price of vested options and the fair value of our stock at the date of grant. We
expect deferred compensation costs to continue through the end of 2004 as the
result of vesting of employee options granted in 1998 and 1999 at an exercise
price less than the estimated fair value of our stock at that time.

The following table sets forth, for the periods indicated, selected
financial data expressed as a percentage of total revenues:

YEAR ENDED DECEMBER 31,
-----------------------------------------
1997 1998 1999
------- ------- -------

Revenues ................................ 100.0% 100.0% 100.0%

Cost of revenues ........................ 21.6 35.1 33.5
------- ------- -------
Gross profit ............................ 78.4 64.9 66.5

Operating expenses:
Research and development ............ 74.0 50.6 24.0
Sales and marketing ................. 52.7 71.9 23.3
General and administrative .......... 179.1 161.8 52.5
Deferred compensation ............... -- 30.6 9.0
------- ------- -------
Total operating expenses ........... 305.8 314.9 108.8
------- ------- -------

Operating loss from continuing operations (227.4) (250.0) (42.3)

Other expense, primarily interest ....... 48.2 36.0 15.5
------- ------- -------

Loss from continuing operations ......... (275.6)% (286.0)% (57.8)%
======= ======= =======

COMPARISON OF YEARS ENDED DECEMBER 31, 1999 AND 1998

REVENUES

Revenues increased 214% from $2,200,000 for 1998 to $6,800,000 for 1999.
The rapid increase in revenues was due principally to the increase in the
number of corporate licensing agreements for our financial services and the
increased average revenues per licensing agreement. Revenues from licenses
increased 364% from $1,200,000 for 1998 to $5,800,000 for 1999. One client,
GlobalNetFinancial.com, Inc., represented 10% and 14% of our total revenues for
1998 and 1999, respectively.

Advertising revenues decreased 53% from $750,000 for 1998 to $300,000 for
1999. This decrease somewhat offset our higher licensing revenues. We expect
that advertising revenues will account for a decreasing percentage of our future
revenues.

Although less significant, revenues from our data mining and financial
services consulting business increased 226% from $250,000 for 1998 to $700,000
for 1999. The increase was due to $500,000 in revenues recognized for work
performed on a consulting contract received in the first quarter of 1999. This
contract had a duration of one year and is now completed. We do not anticipate
substantial consulting revenues during 2000.

COST OF REVENUES

Cost of revenues increased 199% from $800,000 for 1998 to $2,300,000 for
1999. The increase was due primarily to an increase in costs associated with
higher licensing revenues, including fees and charges for data feeds from
various exchanges and Internet service providers along with costs incurred for
infrastructure, programming and quality assurance.

As a percentage of revenues, cost of revenues declined 5% from 35.1% for
1998 to 33.5% for 1999. This decrease resulted primarily from the relatively
fixed nature of some of our data costs and other fees while the number of
clients we host increased.

GROSS PROFIT

Gross profit as a percentage of revenues increased from 64.9% for 1998 to
66.5% for 1999. Our gross profit percentage did not significantly increase
because our cost of data and other fees associated with the additional license
revenues remained relatively fixed as a percentage of revenues. We expect our
content costs to increase as a percentage of revenues and reduce our gross
profit percentage in the future. On an absolute dollar basis, gross profit
increased 221% from $1,400,000 for 1998 to $4,500,000 for 1999 due primarily
to higher revenues.

OPERATING EXPENSES

Research and Development. Research and development expense consists
primarily of compensation and benefits for software programmers and developers.
Research and development costs increased 49% from $1,100,000 during 1998 to
$1,600,000 for 1999. The increase in these costs was due to greater client
volume and the increased level of personnel necessary to support this volume.
Higher wages for the computer programmers and developers necessary to expand our
product offerings also contributed to the increase. Research and development
costs decreased as a percentage of revenues from 50.6% for 1998 to 24.0% for
1999. We expect our research and development costs on an absolute dollar basis
to continue to increase in the future as we expand our infrastructure and
develop additional product offerings.

Sales and Marketing. Sales and marketing expense includes compensation and
benefits, commissions for our direct sales force and marketing staff,
advertising, travel expenses and fees paid to a public relations firm. Sales and
marketing expense remained relatively constant at $1,600,000 for 1998 and 1999.
Sales and marketing costs decreased as a percentage of revenues from 71.9% for
1998 to 23.3% for 1999. On an absolute dollar basis, we expect our sales and
marketing costs to rise in the future to accommodate our continued efforts to
increase contracted revenues.

General and Administrative. General and administrative expense consists of
compensation and benefits for finance and administrative personnel, occupancy
costs, professional and consulting fees, employee recruiting and relocation
and travel expenses. General and administrative expense increased 2% from
$3,500,000 for 1998 to $3,600,000 for 1999. This increase was due to a $600,000
increase in professional and consulting fees and a $300,000 increase in bad
debt expense, partially offset by a $300,000 reduction in travel expense and a
$500,000 reduction in compensation and benefit expenses. General and
administrative expense decreased as a percentage of revenues from 161.8% for
1998 to 52.5% for 1999. On an absolute dollar basis, we expect our general and
administrative costs to continue to increase in the future to support our
planned business growth.

Deferred Compensation. The deferred compensation charges we incurred in
1998 and 1999 resulted from the vesting of employee stock options granted at an
exercise price below the estimated fair value of the underlying common stock on
the date of grant. Deferred compensation expense decreased from $700,000 in 1998
to $600,000 for 1999 due to an accelerated vesting schedule of options in 1998.
Deferred compensation decreased as a percentage of revenues from 30.6% for 1998
to 9.0% for 1999. We expect to continue to incur deferred compensation expense
as these options vest in the future.

OTHER EXPENSE

Other expense consists primarily of interest on debt. Interest expense
increased 35% from $800,000 for 1998 to $1,100,000 for 1999 due to higher
borrowing on our bank lines of credit and, to a lesser extent, interest incurred
on the $5,900,000 of debentures we issued in 1998. These debentures were
outstanding for only a portion of 1998.

LOSS FROM CONTINUING OPERATIONS

Loss from continuing operations decreased 37% from $6,200,000 for 1998 to
$3,900,000 for 1999. Our total 1999 operating expense and other expense rose
11%, or $800,000 on a combined basis, over 1998. However, our $3,100,000
improvement in gross profit, primarily due to increased revenues, more than
offset these increased expenses. We expect our 2000 loss from continuing
operations to exceed the 1999 level due to increases in each component of our
operating expenses, especially sales and marketing expenses.

CONTRACTED REVENUE BACKLOG

Our contracted revenue backlog, which represents total revenues contracted
less revenues recognized, increased 634% from $1,500,000 at the end of 1998 to
$10,700,000 at the end of 1999. We attribute this increase to our larger number
of licenses under contract. Of the $10,700,000 in backlog at the end of 1999,
we estimate based on the duration of our contracts that we will recognize
$7,400,000 as revenue during 2000 and $2,500,000 in 2001. We expect to
recognize the balance of this backlog in 2002 and 2003.

COMPARISON OF YEARS ENDED DECEMBER 31, 1997 AND 1998

REVENUES

Revenues increased 53% from $1,400,000 for 1997 to $2,200,000 for 1998. The
increase in revenues was due primarily to an increase in license revenues as the
result of a larger number of corporate licensing agreements and also to an
increase in the average revenues per licensing agreement. Revenues from license
agreements increased 79% or $500,000 from $700,000 for 1997 to $1,200,000 for
1998.

Advertising revenues increased 25% from $600,000 for 1997 to $750,000 for
1998. In addition, revenues from projects related to our data mining and
financial services consulting was $100,000 in 1997 and $250,000 in 1998. During
1997, we began using our new licensing strategy and de-emphasizing online
advertisements and consulting services.

COST OF REVENUES

Our cost of revenues increased 148% from $300,000 for 1997 to $800,000 for
1998. Our cost of revenues increased as a percentage of revenues from 21.6% in
1997 to 35.1% in 1998. These increases resulted primarily from the fact that, as
the number of our corporate licensing agreements increased, our data feed and
Internet service provider charges increased as a percentage of revenues.

GROSS PROFIT

Gross profit as a percentage of revenues decreased from 78.4% in 1997 to
64.9% in 1998. This decline was due principally to an increase in data feed and
Internet service provider charges. On an absolute dollar basis, gross profit
increased 26% from $1,100,000 for 1997 to $1,400,000 for 1998. This increase
resulted from the increase in our revenues.

OPERATING EXPENSES

Research and Development. Research and development costs increased $50,000
or 4% from 1997 to 1998. The increase was due to the hiring of additional staff
to develop and enhance our services. Although research and development costs
increased in absolute dollars in 1998, they decreased as a percentage of
revenues from 74.0% in 1997 to 50.6% in 1998. This decrease as a percentage of
revenues was due to the substantial increase in our revenues.

Sales and Marketing. Sales and marketing expense increased 108% from
$800,000 in 1997 to $1,600,000 in 1998. We began increasing our sales and
marketing efforts in late 1997 and continued to do so through 1998. In
particular, we added to our direct sales force, expanded our public relations
programs and increased our attendance at trade shows.

General and Administrative. General and administrative expense increased
38% from $2,600,000 in 1997 to $3,500,000 in 1998. This increase was due to a
$500,000 increase in compensation and benefit expenses, a $300,000 increase in
travel expense and a $100,000 increase in recruiting expenses.

Deferred Compensation. The $700,000 deferred compensation expense we
incurred in 1998 resulted from the vesting of employee stock options granted in
July 1998 at an exercise price below the estimated fair value of our common
stock.

OTHER EXPENSE

Other expense consists primarily of interest on debt. Interest expense
increased 14% from $700,000 in 1997 to $800,000 in 1998. This increase resulted
from higher borrowing on our bank lines of credit and, to a lesser extent,
interest incurred on the $5,900,000 of debentures we issued in 1998. These
debentures were outstanding for only a portion of 1998.

LOSS FROM CONTINUING OPERATIONS

Loss from continuing operations increased 58% from $3,900,000 in 1997 to
$6,200,000 in 1998. Although our revenues and gross profit increased during
1998, our investment in operations and increase in interest payments on debt
resulted in increased losses from continuing operations.

CONTRACTED REVENUE BACKLOG

Contracted revenue backlog increased by 941% from $150,000 at the end of
1997 to $1,500,000 by the end of 1998. This increase was the result of growth in
the number of licenses we had under contract.

QUARTERLY OPERATING RESULTS FROM CONTINUING OPERATIONS

The following table sets forth, for the periods presented, quarterly
financial data from our statements of operations. We believe that the quarterly
information has been prepared on substantially the same basis as our audited
financial statements and includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
information for the periods presented. You should read this information in

conjunction with the audited financial statements and notes to those
statements included elsewhere in this prospectus. Our operating results in any
quarter are not necessarily indicative of our future operating results.

QUARTER ENDED
-------------------------------------------------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31,
1998 1998 1998 1998 1999 1999 1999 1999
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Revenues ...... $ 379,089 $ 477,227 $ 462,992 $ 858,638 $ 933,118 $ 1,505,491 $ 1,992,900 $ 2,398,360

Cost of revenues 80,493 86,170 253,640 344,662 401,897 511,985 593,283 782,716
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Gross profit .. 298,596 391,057 209,352 513,976 531,221 993,506 1,399,617 1,615,644

Total operating
expenses....... 1,219,925 1,387,946 2,216,778 2,032,128 1,724,191 1,518,891 1,865,800 2,320,446

Other expense . (152,030) (184,061) (215,354) (233,101) (229,585) (209,238) (323,397) (296,325)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------

Loss from
continuing
operations..... $(1,073,359) $(1,180,950) $(2,222,780) $(1,751,253) $(1,422,555) $ (734,623) $ (789,580) $(1,001,127)
=========== =========== =========== =========== =========== =========== =========== ===========

Revenues have consistently increased from quarter to quarter due almost
entirely to increases in licensing revenues. As our revenues have increased, the
costs associated with revenue generation have risen to accommodate our growth.
Gross profit on an absolute dollar basis has consistently risen due to continued
higher revenues and the relatively fixed percentage for data feed and other
direct costs of revenues. Although we expect this trend to continue, we expect
that our costs for data and content will increase as a percentage of revenues.

Gross profit as a percentage of revenues declined during the third quarter
of 1998 to 45% from the second quarter 1998 gross profit percentage of 82%. This
decline was due to an increase in cost of revenues associated with the
development and growth of our business generated from corporate licensing
agreements. The shift in our business model to corporate licensing agreements
resulted in a decline in our gross profit percentage from our prior quarterly
levels.

Operating expenses increased in the third quarter of 1998 due principally
to our repricing of employee stock options. This resulted in a deferred
compensation charge of $600,000. Operating expenses declined in the fourth
quarter of 1998 and succeeding first two quarters of 1999 due to a cost
containment program. Expenses increased in the third and fourth quarters of 1999
to accommodate our increased licensing level. Interest expense in the third
quarter of 1999 was higher due to a 200 basis point increase in the rate under
our credit line retroactive to the first quarter. Interest expense in the fourth
quarter of 1999 remained relatively high compared to prior quarters due to
borrowing costs associated with additional debt.

LIQUIDITY AND CAPITAL RESOURCES

We have generated losses in every year of our operations and have financed
those losses, as well as the growth of our business, through a series of private
placements and bank borrowing. During 1999, the $1,300,000 of cash consumed by
our continuing operating activities and $600,000 of cash consumed by our
continuing investing activities was offset by $2,300,000 of cash generated,
primarily from bank borrowing. We supplemented our cash flows with $1,600,000
of cash generated by our discontinued operations, including $750,000 of cash
on sale of the process optimization segment.

We used $1,300,000, $3,800,000 and $3,650,000 of cash in continuing
operating activities during 1999, 1998 and 1997, respectively. We used this cash
primarily to fund losses of $3,200,000,$6,600,000 and $4,300,000 in 1999, 1998
and 1997, respectively. We were unable to borrow under our credit agreements
during 1999 until the end of the fourth quarter, when we established an
additional $2,500,000 line of credit. For the first three quarters of 1999,
we managed cash primarily by a net increase in accounts payable and deferred
revenue.

We used cash in continuing investing activities of $600,000 (excluding
$750,000 generated from the sale of discontinued operations),$800,000 and
$500,000 for 1999, 1998 and 1997, respectively. We applied cash primarily to
finance the costs for computer hardware and software.

Financing activities, consisting primarily of the sale of securities and
increased borrowing under credit arrangements, generated $2,300,000, $5,300,000
and $4,200,000 in 1999, 1998 and 1997, respectively. Our primary source of
financing in 1999 was a $2,500,000 line of credit with a commercial bank
completed in December 1999. Our principal sources in 1998 were $1,100,000 in net
proceeds from the sale of Series C Preferred Stock and debentures and $4,150,000
net borrowing on our bank lines of credit. Our main source in 1997 was
$9,800,000 of net proceeds from the sale of Series C Preferred Stock and
debentures offset by $5,500,000 in repayments on our bank lines of credit.

Our $2,500,000 line of credit is secured by substantially all of our
assets. In addition, eight investors guaranteed this line of credit and secured
it with letters of credit or the pledge of deposit accounts. For doing this, we
issued 500,000 warrants to these investors. Our agreement with the investors
requires us to repay the line on the earlier of completion of this offering or
June 30, 2001. If we default, the investors may assume the bank's position. We
are currently amortizing over the credit line term a $540,000 debt discount that
represents the value of the warrants. We will incur an extraordinary charge for
the remaining unamortized balance of this debt discount when we repay the line.
We intend to repay these debentures in full with proceeds from this offering.

In December 1999, we also renegotiated the terms of our existing credit
agreements with two commercial banks. We had $4,145,000 plus $300,000 of accrued
interest outstanding under these agreements, $1,145,000 of which had matured in
September 1999. We negotiated an extension of these agreements to June 30, 2001
and obtained waivers of various covenant defaults. One of these commercial banks
issued a standby letter of credit supporting the $5,900,000 of subordinated
debentures we issued in 1997 and 1998. The renegotiated agreement requires us to
repay all sums outstanding under the credit agreements, and either repay the
full amount of the debentures or obtain a replacement letter of credit,
contemporaneously with the closing of this offering. We intend to use a portion
of the proceeds from this offering to repay these debentures. We will incur an
extraordinary charge for the remaining unamortized portion of the financing
costs related to our debentures when we repay them.

In March 2000, we entered into an additional $500,000 line of credit
secured by substantially all our assets. Three investors guaranteed this line
of credit and secured it with letters of credit or the pledge of deposit
accounts. For doing this, we issued 100,000 warrants to these investors. We are
required to repay this line of credit by June 30, 2001.

We intend to use the net proceeds of this offering to repay most of our
outstanding indebtedness, to add sales and marketing personnel for our Internet
business, to continue development of our Internet products, to finance
additional hosting facilities and capacity and for working capital and other
general corporate purposes. In addition, we will consider strategic alliances
and acquisitions that we deem appropriate to enhance our business and
operations. We estimate that, as a result of this public offering, we will have
sufficient capital to meet our needs through at least the year 2001.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENT

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No.133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as "derivatives"), and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure these
instruments at fair value. Recognition of gains or losses resulting from changes
in the value of derivatives is based on the use of each derivative instrument
and whether it qualifies for hedge accounting. SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. We have not yet
determined the effect of SFAS No. 133 on our consolidated financial statements.

DISCLOSURES ABOUT MARKET RISK

Our primary market risk exposure relates to interest rates on our variable
rate debt. Our debt that bears this risk are our notes payable and line
of credit in the amount of $6,620,000 outstanding at December 31, 1999. This
debt bears interest at the prime rate. We expect to repay this debt with a
portion of the proceeds of this offering.

BUSINESS

GENERAL

Stockpoint is a leading business-to-business provider of global online
market analysis tools and financial information. We integrate sophisticated
financial applications to provide our clients customized financial web pages
that we host using our proprietary architecture. This enables our clients to
outsource their financial web page production and maintenance, and provide
robust financial content to their users. Our clients include traditional and
online brokerage firms, commercial banks, asset managers, web portals, media
companies, 401(k) sponsors, electronic communication networks and insurance
companies. As of February 29, 2000, we had over 200 clients, including companies
such as Barclays Global Investors, Looksmart Ltd., Quick & Reilly Group Inc. and
U.S. Bancorp Piper Jaffray Inc.

We generate revenue from technology licensing, development, content and
hosting fees. A substantial majority of our revenue is derived from agreements
under which we provide information directly from our computer data center over
the Internet to our clients' users. Most of our contracts have one or two year
minimum terms with automatic renewals. We also charge for development when
extensive custom development is required.

INDUSTRY OVERVIEW

TRENDS

In recent years, the proliferation of personal computers, the widespread
adoption of the Internet, and the advent of increasingly powerful and easy to
use Internet navigation tools has resulted in explosive growth in the use of the
Internet as a global communications tool, a source of fast and easy access to
unprecedented breadth of information and an international means of commerce. Nua
Ltd. estimates that the number of Internet users worldwide will grow from 304
million in 2000 to 500 million in 2003.

Coincident with this revolution in the use of information technology has
been a rapid trend toward individual money management. During the past ten
years, high returns generated by the longest sustained positive U.S. stock
market in post-war history, together with an increase in retirement assets and
the number of investment options available, have caused substantial growth in
the ownership of financial assets worldwide. According to the Board of
Governors of the Federal Reserve System, total financial assets of U.S.
households and nonprofit organizations was $21.8 trillion at the end of 1995.
By the end of 1999, that number increased to $34.9 trillion. Furthermore, the
Investment Company Institute estimates that in early 1999, 48.2% of all U.S.
households owned equity securities directly in the form of individual stocks
or indirectly through mutual funds.

Taken together, these two trends have resulted in a dramatic increase in
the use of online financial information services and trading. Investors are
increasingly looking to the Internet for information about their financial
assets. According to Forrester Research Inc., in 1999 there were 5.7 million
households using the Internet to execute financial transactions and obtain
financial information. Forrester Research predicts that this number will
increase to 21 million households by 2003, a number that would represent nearly
53% of U.S. households. In addition, both retail and institutional investors
increasingly demand up-to-the-minute information on security prices and business
trends, and the market analysis tools necessary to assimilate this information.
Many investors are using this information to manage their financial assets more
actively. Moreover, instead of resorting to a broker or other financial
intermediary, individual investors now have access to online trading services
that allow them to rapidly execute their own transactions at a lower cost than
that previously charged. Forrester Research has projected that online investing
accounts in the U.S. will grow from $374 billion of assets in 5.4 million
online accounts in 1999 to $3.1 trillion of assets in 20.4 million online
accounts by 2003. The growth in electronic and online financial services has
not been limited to equity trading. Commercial banks have increasingly
broadened both the breadth of financial services they provide and the means of
accessing those services electronically. Many banking clients now not only have
online access to

account information, but also have the ability to transfer those assets
between insured accounts, fixed income investments and equity investments
online.

ISSUES

As a result of these developments, many companies that have an Internet
presence, including web portals and media companies, have developed or are
developing financial market content for their web sites in an effort to enhance
their attractiveness to Internet users and to assist in user retention. In
particular, many financial services companies such as commercial and investment
banks, mutual fund companies and 401(k) plan sponsors are concluding that the
availability of stock quotes, analysis and business information on their web
sites is a prerequisite to the generation of significant web traffic and
e-commerce transactions. The quality and breadth of financial information
offered is rapidly becoming a differentiator among financial services providers.

Unlike many other web page development projects, the financial information
components of an Internet site require multiple skills not commonly available
through a single provider. Companies must contract for not only the web graphics
and display development services offered by many web site developers, but must
also purchase specialized applications software to provide graphing and
analysis, specialized database software to manage quote and financial
information, and hardware and communications infrastructure to handle the
storage and transmission of this information. Many of the available applications
are inflexible, cannot be customized to the company's existing web site, or
require extensive programming and customization to integrate with the other
applications that will be used on the site. Even if the developer is capable of
creating these applications and infrastructure, the company must purchase
financial content from various suppliers to display through the system. This
requires not only the integration of disparate content data, but the negotiation
of individual provider contracts.

Even after this cost and delay, a company must constantly monitor and
revise the software and hardware tools that manage actively updated information
in order for the financial information components of a web site to be
competitive. As a result, any company that is considering internally adding and
maintaining financial information and analysis capabilities on its web site
faces a considerable and on-going expenditure of time, effort and expense.

THE STOCKPOINT SOLUTION

To address the demand for Internet-based financial information and
analysis, we offer our clients a menu of financial applications and content. We
seamlessly integrate these applications and content into our clients' sites to
provide a comprehensive solution for the financial component of their Internet
strategy. We host these sites on behalf of our clients, relieving them of the
cost and expense of monitoring actively updated web content. Our web
applications have been specifically developed to allow customization to the
"look and feel" of a client's web site. In addition, we provide custom services
to integrate the proprietary data maintained by our clients. All of these
features can be purchased as a complete package or as individual functions and
rapidly integrated into the existing features of a client's web site.

We enable our clients to provide a broad range of financial information and
analysis to their users. We offer delayed and real-time U.S. stock exchange
quotation capabilities, as well as information on trading in international
markets. We provide industry-leading charting capabilities in both traditional
static image formats, and interactive Java format. We provide portfolio tracking
tools that enable our clients to offer their consumers the means of actively
monitoring their own portfolios. We offer international currency translation
utilities that provide currency translation on a real-time basis. Through
reseller relationships, we also offer company profiles, analyst and research
information, live market commentary, mutual fund data and other financial news.

We have specifically designed our products for ease of customization. Our
software permits us to add a client's graphics and to alter the color and
display layout to duplicate the look and feel used by our clients while
retaining our robust product functions. Our products are modular in design to
permit a client to add additional features as they need more functionality. We
have also designed the products to facilitate custom extensions that can be
built to make use of proprietary data or content provided by a client.

As part of our comprehensive solution, we also offer web site hosting, data
center and content services. We maintain sophisticated communications,
processing and storage capacity and infrastructure for web pages at our

facilities. By establishing content contracts for the financial information
that we host on our clients' behalf, we provide rapid access to a broad spectrum
of financial data that can be displayed and manipulated by our proprietary
software tools. As a result, we are able to reduce our clients' day-to-day
management requirements while at the same time providing them with the actively
updated financial content that they require.

We believe that our comprehensive capabilities in financial information
solutions for the Internet allow us to provide high quality financial
information and analysis web functionality. We believe that we have developed a
reputation for comprehensive, reliable and high quality financial web pages.

GROWTH STRATEGY

Our objective is to be the leading business-to-business provider of global
online market analysis tools and financial information. Key elements of our
strategy include:

o PENETRATING VERTICAL MARKETS. We intend to rapidly expand our sales
force to target businesses in industries that require robust online
market analysis tools and financial information on their web sites.
At February 29, 2000, we had contracts with over 200 companies in a
number of different industries. This broad client experience enables
us to intelligently recommend new products, content and services to
our clients to improve their web site functionality. For example,
our clients include seven of Gomez Advisors' ten top rated online
brokerage firms. We plan to focus our marketing efforts on
traditional and online brokerage firms, commercial banks, asset
managers, web portals, media companies, electronic communication
networks, 401(k) sponsors and insurance companies.

O CREATING A WORLDWIDE PRESENCE. We intend to expand our product
offerings and international presence to serve the global online
financial information needs of our clients and their users. For
example, Commonwealth Securities Limited, Australia's largest online
brokerage firm, recently engaged us to provide U.S. securities data
for their web site. We also supply select clients with online
financial market data from Belgium, Canada, Denmark, France, Italy,
the Netherlands and the United Kingdom. To further our international
objectives, we expect to open an office in London, England in the
next few months and intend to open an office in Asia during 2000.

O USING TECHNOLOGY TO LEVERAGE OUR GROWTH. We intend to develop and
market innovative products and services to attract and retain clients.
We design these new products and services to enhance the user
experience for our clients. For example, we recently introduced a
wireless technology that enables users to view financial charts on
their cell phones and some other portable devices. We also intend to
establish new facilities to maintain the scalability and availability
of our high quality web hosting services.

o PURSUING STRATEGIC ALLIANCES OR ACQUISITIONS. We intend to accelerate
our global sales and marketing efforts and technology development, and
gain access to compelling content, applications and functionality,
through strategic alliances and acquisitions. For example, our
strategic relationships with content providers allow us to cost
effectively deliver robust financial applications and content to our
clients' web sites. We intend to seek acquisitions of businesses to
complement our products or services or to give us access to new
markets.

STOCKPOINT TARGET MARKETS

We focus our sales and marketing efforts in eight key online financial
services markets. Depending on the scope of their current Internet financial
offering, clients will either license a full finance channel or license
individual tools or applications.

WEB PORTAL AND MEDIA COMPANIES

Internet "portal" and media web sites either create proprietary
content or aggregate content from various sources to attract and retain
visitors. Most of these sites include financial content as one of the key
content elements included for this purpose. Financial content is
fundamentally different from other types of content because of the
technological challenge of distributing an increasingly complex analysis
of financial information. This complexity is attributed to an increasing
rate of transactions, the number of world markets and the number of users.

Many portal and media sites do not have the required technical
resources or expertise to build their own investment site. They prefer to
outsource this development and functionality to others, such as
Stockpoint. In our experience, a typical portal or media client will tend
to license a full-featured financial site as opposed to buying a la
carte. Examples of these clients served by us include LookSmart Ltd. and
MyWay.com, for both of whom we host a full financial channel.

ONLINE BROKERAGE FIRMS

We currently have contracts with seven of the online brokerages that
Gomez Advisors ranks as its top ten. Online brokerages must have an
established web-based investing presence and continue to offer innovative
products and applications to differentiate their offerings from those of
others. For example, they may license charts or stock screening
functionality to augment an existing site. Over time, we believe these
clients will retain outside contractors to provide additional functionality
to either reduce the number of their vendor relationships or buy new
products outside of their principal expertise. Examples of online brokerage
clients served by us include National Discount Brokers Group Inc. and Quick
& Reilly Group Inc.

TRADITIONAL BROKERAGE FIRMS

Traditional brokerage firms are also adding Internet functionality to
their service offerings. Many traditional brokerage firms have experienced
an erosion of their share of the online brokerage marketplace and perceive
a potential competitive threat from growing online brokerage firms. In our
experience, while online brokerage firms may license specific tools and
applications, traditional brokerage firms seek more of a full scope
solution which can be brought to market rapidly. Examples of online
investment banks served by us include Commonwealth Securities Ltd.,
Robertson Stephens and U.S. Bancorp Piper Jaffray Inc.

COMMERCIAL BANKS

Many commercial banks are beginning to offer full scope financial
portals and brokerage services. We believe that many of these banks intend
to develop a more comprehensive financial solution for their consumers and
will expand their offerings to include investment financial information and
analytical tools. Examples of commercial banks served by us include M&T
Bank Corp. and Union Bank of California N.A.

MUTUAL FUNDS/ASSET MANAGEMENT

These companies typically have an established web presence and license
specific applications and functionality. The business objective of these
clients is to differentiate themselves with a more compelling user
experience or by offering a more cost effective data solution for its
advisors. An example of one of these clients is Barclays Global Investors.

STOCK EXCHANGES AND ELECTRONIC COMMUNICATION NETWORKS (ECNs)

Although their primary focus is to facilitate trade execution, stock
exchanges and ECNs are also building web sites for users to track their
investments. Exchanges and ECNs have a diverse set of needs ranging from a
la carte applications to full web site offerings. An example of an ECN that
is our customer is MarketXT, Inc.

CORPORATIONS

We provide quote information for corporate investor relations sites,
including the sites of several Fortune 500 companies. Typically, these
pages include the company's specific stock quote, fundamental data and
access to SEC reports. An example of a corporation we serve is Coca Cola
Co.

401(k) PLAN SPONSORS

We provide 401(k) online tracking tools to employers. This online
capability allows the employees to track the performance of their 401(k)
investments in real-time. An example of a client utilizing this
functionality is PricewaterhouseCoopers LLP.

STOCKPOINT PRODUCT OFFERINGS

Our broad menu of financial product offerings includes the following:

QUOTATION FEATURES

We license real-time and/or delayed stock and mutual fund quotes for
securities of the following countries: Canada, Denmark, France, Italy, the
Netherlands, the United Kingdom and the United States. For most of these
countries, our applications provide current price, open, change, high, low,
52-week high and low, earnings per share, volume, shares outstanding,
market capitalization, dividend, ex-dividend, and price/earnings ratio.
Stock quotes are available either on web sites that we host or over
wireless web-capable telephones.

CHARTING

Classic Quick Charts. We believe that our Classic Quick Charts provide
easy-to-read information that distinguishes them from many competitive
offerings. These fast, cleanly designed charts show price performance and
volume for securities in our database. The Classic Quick Charts allow users
to select time increments including, one minute, ten minutes, hourly and
daily. Classic Quick Charts also include interactive features such as
moving average, and the ability to plot against other stocks and indexes.
Technical indicators can be added for comparison, which include Bollinger
bands, moving averages convergence/divergence, on balance volume, price
rate of change, relative strength, standard deviation and stochastics.

Interactive Charts. This feature expands on Classic Quick Charts to
provide minute-by-minute updates of charted information. We offer intraday
price performance and volume on securities in our database. The intraday
interactive charts allow users to select time increments including
tick-by-tick, one minute, ten minutes, hourly and daily. Users have the
ability to zoom in on date and time ranges by clicking and dragging on the
chart, and technical indicators can be added for comparison without
refreshing the chart or web page.

We also provide charts containing interday information for United
States and international markets over wireless web-capable telephones and
other devices.

PORTFOLIO TRACKING AND MANAGEMENT

Our personal portfolio manager allows users to track the performance
of their portfolios from their PCs. Our web-based personal portfolio
manager lets users easily edit multiple portfolios and calculate current
profit and loss for individual and combined portfolios. The personal
portfolio manager includes a login screen, portfolio setup screen,
portfolio menu screen and a data export feature. Easily customized to
complement a client's web site, our personal portfolio manager serves as a
tool to generate return visits by users.

We also offer the following products in this category: stock and
mutual fund screening applications, automatic portfolio alerting via email,
an interactive Java portfolio manager and a scrolling, personalized desktop
stock ticker.

INDEXES AND CURRENCY DATA

We provide the major market indexes for the United States as well as
for most international markets. We also permit the client to display prices
of international currencies in real time and display this information in a
currency table featuring cross-reference functionality. All of this data is
stored by our proprietary databases in both intraday and historical
formats, and can be plotted with our charting applications.

NEWS AND ANALYST INFORMATION

Through reseller relationships with numerous content sources, we
provide an extensive offering of news and analyst information.

Company Profiles. We offer company profiles from Market Guide, which
feature comprehensive fundamental information on U.S. and foreign companies
trading on the NYSE, NASDAQ and AMEX. Companies are continually added and
updated.

Analyst and Research Information. We offer this feature from Zacks
Investment Research, an industry leader for analyst information. Zacks
provides analyst summaries, analyst opinions, average recommendations,
earnings per share, surprise percentage, consensus estimates and industry
rank. Income statements and balance sheets are also available.

News Wire Services. Through a relationship with Comtex Scientific
Corporation, we offer full-text news stories from wire services such as
Business Wire, PR Newswire, AP Online and UPI. For international news, we
have a relationship with AFX News Limited. Our news service tracks news
stories by category and keyword, and can automatically display charts and
quotes for companies referenced in each story.

SEC Filings. In October 1999, we launched a test site for our IPO
Center. The IPO Center enables the user to track initial public offering
filings and new issue pricings, evaluate after-market performance and
review the filing history of specific investment banks. Through a service
provided by Edgar Online, users can read the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" excerpt from SEC
filings for publicly-traded companies. We have also contracted with TRW
Inc. to provide real time SEC filings, although this capability is not yet
available to our clients.

Live Market Commentary. This feature is offered through Briefing.com,
a top provider of live market commentary and analysis on the Internet,
focusing on important news affecting markets and providing insight on
possible trading implications. Briefing.com covers upgrades and downgrades,
earnings reports, economic releases, technical trading points, market
sectors and technology stocks.

Mutual Fund Data. We offer mutual fund data from Value Line. The Value
Line mutual fund offering contains comprehensive performance data on over
8,300 U.S. retail funds. Listing includes sector distribution, top 10
holdings, administration information, Value Line Rankings, performance
(one, three, five and ten years), fund distribution and management
overview.

STRATEGIC RELATIONSHIPS

We provide substantive content through our financial product offerings
in two broad categories: quote information and market/company information. All
content utilized on both Stockpoint.com and client web sites is obtained from
third-party content providers. We do not currently generate any original content
but instead rely on strategic contractual relationships with major vendors of
electronically available financial information for our content feeds.

For pricing information, news and information, mutual fund data,
analyst information and other feeds, we maintain contractual arrangements with
S&P Comstock, Comtex Scientific Corporation, Briefing.com, MarketGuide, Zacks,
CDA/Wiesenberger, Commodity Systems, Inc., TRW and AFX News Limited. These
relationships vary in term from one month to several years, and include both
variable and fixed price payment provisions. We believe that we are not solely
reliant on any one content provider and that there are alternative sources for
any single type of content. However, the replacement of any key vendors could
render all or a portion of our services unavailable for a period of time,
resulting in a significant negative impact on our client relationships and harm
to our reputation.

SALES AND MARKETING

We currently have a sales staff of 15 employees. Our sales offices are
located in San Francisco and New York City. Our sales team is assigned to one
of three major domestic regions. We currently focus our sales efforts directly
on target-market clients. All sales people currently receive commissions on
license sales, upsells and renewals to existing clients. We expect to expand
our direct sales staff and number of domestic and foreign offices over the
next 12 months, including opening a London office within the next few months.

During the production phase, our client services representative manages
and addresses client concerns and verifies the progress of the client's project.

Our two-person marketing staff currently focuses on public-relations
programs. These programs have expanded our brand recognition. We have done only
a limited amount of web-based or other advertising. Substantially all of our
client web sites have the "Powered by Stockpoint" logo, which we believe has
enhanced our brand awareness as our client base has grown. We also derive
substantial name recognition and receive initial client contacts through our web
site, Stockpoint.com.

CUSTOMIZATION ACTIVITIES

We believe that our ability to customize our applications
differentiates us from our competitors. Our clients expect that their web sites
will be unique and will not look the same as sites we host for our other
clients. Our clients also require that the web applications we develop and host
mirror the appearance of their other web pages and integrate seamlessly into
their web sites.

We designed our proprietary server and application software to enable
us to create customized web sites without expending the enormous effort
typically associated with custom development. For example, we designed our
charting technology with approximately 80 configurable parameters that permit
our web designers to configure chart sizes, fonts, colors, time increments and
settings for moving averages, technical indicators and comparison stocks or
indexes. This design enables us to customize at a reduced cost and with a faster
turnaround time than would be possible by modifying the underlying program code.

In some instances, our clients require that we develop customized
extensions of our applications to assimilate and manipulate data that is
provided by the client. For example, we provide a charting solution to clients
of MarketXT Inc. that incorporates their ECN's quote and trade data. Also, we
have integrated proprietary industry group data from US Bancorp Piper Jaffray
Inc. to enable their clients to chart that data versus other securities.

In other cases, our customization activities have led to the creation
of new products. For example, through a contract with GlobalNetFinancial.com, we
have created product offerings for quotes, charts and portfolios that utilize
stock market data from Denmark, Italy, the Netherlands and the United Kingdom.

To customize the appearance of our hosted web pages to meet our
clients' needs, we maintain a staff of eight web site developers. These
developers perform the web site development for clients and also establish the
communications links and data transfers required to integrate clients' web sites
with the pages we host on their behalf. We also maintain a staff of applications
programmers who develop custom extensions of our applications to assimilate
client data or provide specialized functionality.

PRODUCT DEVELOPMENT

We have a three-pronged approach to product development:

o CLIENT DRIVEN DEVELOPMENT. By maintaining close relationships with our
clients through our client services and sales groups, we stay attuned
to our clients' needs . This input, plus client directed development,
largely drives the priorities of our development group. Examples of
products created by customer driven development include our
international index data, currency conversion functionality and
expansion of our product offerings to include Great Britain and
Italian equity securities.

o DEVELOPMENT BASED UPON ANTICIPATED MARKET NEEDS. Since 1997, we have
retained Forrester Research to assist us in predicting market trends
for the Internet financial marketplace. We leverage our relationship
with Forrester Research and our internal research and development and
marketing groups to anticipate market needs. We then either develop or
acquire products to meet these needs. Examples of products created by
this type of development are our Classic Quick Charts, our Java- based
scrolling stock ticker and enhancements to our personal portfolio
manager application.

o INNOVATIVE TECHNOLOGY DEVELOPMENT. We formed our internal research and
development group to pursue innovative technology applications. We
have several products under development which we believe are future
upsell opportunities. These potential new products include Portfolio
2.0, E-Mail Alerts and our IPO Center.

We are developing a transaction-based portfolio product, known as
Portfolio 2.0. The current version of our portfolio product does not
allow online investors to track transaction activity. Portfolio 2.0
will feature the ability to track transaction details of an online
investor. By capturing the transaction details, it allows for (1)
charting of portfolio performance versus various indexes; (2) asset
allocation analysis and (3) tax lot accounting. In the future, we
intend to link our transaction based portfolio product to various
brokerage firms. This will enable these firms to provide electronic
portfolio updates from their data centers.

We are developing an alert engine for notifying users of stock
activity. The E-Mail alerts will notify users of changes, based on
present threshholds, in stock prices, volume and news.

We have been beta testing an IPO Center on our web site,
www.stockpoint.com. The IPO Center features the ability to monitor
current IPO filings. The IPO center lists current filings and
pricings, and enables an investor to access a summary of a company's
offering by clicking on a linked ticker symbol.

Within our product development and research and development groups, we
have a staff of engineers that focuses on new product development. We recently
transferred into this group from our consulting services division a group of
engineers with expertise in artificial intelligence.

STOCKPOINT.COM

In addition to our licensing business, we operate Stockpoint.com, a
free financial web site that serves both as a technology showcase to support our
licensing business and as a proving ground for new product offerings.
Stockpoint.com offers investors an online environment in which they can analyze
and manage their holdings using comprehensive financial information and advanced
web technologies.

Stockpoint.com currently averages approximately 7,000,000 page views
per month. We believe that this is enough traffic to enable the Stockpoint.com
user base to provide feedback from our new products to ensure that our products
meet end-user expectations and are field-tested prior to being licensed to our
clients.

We do not intend to invest a significant amount of resources in
promoting Stockpoint.com as a consumer site. Instead, we intend to focus on the
business-to-business marketplace and to use Stockpoint.com as a complement to,
rather than a competitor with, the offerings of our business clients.

Although we receive some advertising-based revenues from
Stockpoint.com, it is not a significant portion of our total business. We do not
have any subscription-based revenues from Stockpoint.com end-users.

COMPETITION

We compete with a number of companies that offer charting, stock
quotation and business information web applications, development and hosting
services. The number of these competitors continues to grow as new entities
enter various Internet-related markets as a result of the recent growth in
Internet traffic and the Internet's perceived future opportunities. It is
possible that new competitors may rapidly acquire a significant market share.
Further, there are an increasing number of quotation, financial news and
information sources that compete for the attention of consumers and advertisers
that are sought by our clients. We expect both of these forms of competition to
continue to increase. We compete for web site clients with a number of other
providers of web-based quotation, charting and financial news applications, such
as MarketWatch.com, Inc., Telescan Inc., Reuters Group PLC, Thompson Financial
Services and S&P Personal Wealth. We also compete with client web site
development companies and the in-house development staff of large corporations.

Competitive pressures could result in reduced market share, price
reductions, reduced margins and increased spending on marketing and product
development, any of which could adversely affect our business, financial
condition and operating results.

Our ability to compete effectively depends on many factors, including
the originality, timeliness, comprehensiveness and trustworthiness of our
applications and hosting, the ease in use of services developed by us and the
effectiveness of our sales and marketing efforts. We believe the principal
competitive factors in the online services market include system performance,
product differentiation, quality and quantity of content, user friendliness,
price, client support, effectiveness of marketing techniques and consistency and
quality of services. We believe that we compete effectively in these areas. We
also believe that our strategy of focusing on business-to-business licensing of
products combined with ongoing services and continued expansion of the range of
our services offerings may serve to lessen the impact of future competitive
pressures. There is, however, no assurance that these marketing strategies will
be successful. Finally, we believe that once our online financial products are
embedded in a client's web site, that client will find the difficulties inherent
in replacing our products with those provided by another vendor to be a
disincentive to changing providers.

Many of our existing competitors, as well as a number of potential new
competitors, have longer operating histories, greater name recognition, larger
client bases and significantly greater financial, technical and marketing
resources than us. This may allow them to devote greater resources than we can
to the development and promotion of their services. These competitors may also
engage in more extensive research and development, undertake more far- reaching
marketing campaigns, adopt more aggressive pricing policies and make more
attractive offers to existing and potential employees, outside contributors,
strategic partners and advertisers. Our competitors may develop relationships
with providers and develop or acquire content that is equal or superior to ours
or that achieves greater market acceptance than ours.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

We rely on a combination of copyright, trademark and trade secret laws
and confidentiality procedures to protect our proprietary intellectual property
rights. We generally enter into agreements that govern the assignment of
inventions and the ownership and protection of proprietary information with
employees and agreements that govern nondisclosure of proprietary information
with clients. We also work to limit access to and distribution of our software,
documentation and other proprietary information. We seek to use copyright law to
protect our documentation and other written materials. We do not, however, rely
on patents or patented technology to protect our proprietary information.

"Stockpoint" is our federally registered trademark.

We license virtually all of the financial data that is used to provide
the content at our web sites pursuant to agreements with content suppliers, the
terms of which vary widely. The services that we provide and the methods that
we utilize to do so change rapidly. Also, the law and legal practice for
content supplier contracts are unsettled and constantly developing. As a result,
we must periodically modify and renegotiate our vendor agreements. We attempt to
operate our web site customization and hosting services in accordance with our
agreements and to renegotiate them as necessary. However, although we do not
believe we are in violation of our agreements, we cannot assure you that our
vendors will not claim that we owe additional sums or must limit our activities.

Some of our applications incorporate technology widely available on the
Internet and from other sources. During the past two years, there has been a
renewed effort to obtain protection of techniques used in software products
through patent and other protections. As the number of software products and
delivery techniques proliferates on the Internet, we believe that we may become
subject to infringement claims. We have been notified by a patent holder that it
believes our use of GIF compression algorithms incorporated into our web hosting
applications may require a license. Although we do not believe that we derive
substantial revenue from the use of these algorithms and can obtain a license,
if one is required, without materially affecting our operations, we cannot be
certain that other parties will not allege that the our technology and services
violate their rights.

COMPUTER AND NETWORK OPERATIONS

We maintain a data center in Coralville, Iowa at which we host
virtually all of the financial content for our clients' web sites. We operate
multiple servers, mass storage devices and sophisticated routers and switching
systems to accommodate high capacity web traffic. We use Intel-based servers
with the Microsoft NT operating system that access high capacity database
storage devices using SQL Server as well as our own proprietary database
applications.

Our data center has separate air conditioning units. The power system
includes power conditioning and battery back-up. We also have a full "zero
downtime" emergency generator system capable of providing emergency power to our
entire Coralville facility. Data is regularly backed up and stored off-site and
certain data is duplicated on separate storage devices within the data center.
The building in which the data center is located is secured by 24- hour card key
access.

End-users access our data center through the Internet. We have two
connections to the Internet. Our principal connection is a DS3 (45 Mbit) through
NetINS with access through UUNET, Sprintlink and Cable & Wireless. We have
contracted with UUNET for an additional DS3 connection. We use a load balancing
solution for distributing client requests over our base of servers.

We have designed our data center with a high degree of redundancy and
interoperability. We have implemented a detailed, automated monitoring system
over the data center. The system pages and alerts data center technicians
immediately upon any system failures, even as traffic is switched automatically
to redundant systems. Except for scheduled maintenance, our data center is
available 24 hours a day, 365 days a year.

We believe that our computer and communications hardware systems are
adequate for existing operations. We purchase additional or upgraded hardware as
required to meet any significant increases in actual or anticipated traffic. We
are currently reviewing strategies for improving our disaster recovery
capabilities and the responsiveness of our services to users. We plan to use a
portion of the net proceeds from this offering to establish one or more
additional data centers or co-location arrangements.

EMPLOYEES

As of February 29, 2000, we had a total of 95 employees, consisting of
30 in production, 29 in research and development, 19 in general or
administrative roles and 17 in sales and marketing. All of these employees are
located in the United States. None of our employees is subject to a collective
bargaining agreement or represented by a labor union. We have experienced no
work stoppages and believe that our relationships with our employees are good.

We maintain key man life insurance on William Staib in the amount of
$4,000,000, payable to us.

FACILITIES

Our principal administrative, support and research and development
facility, and our data center, is located in approximately 25,600 square feet of
leased office space in Coralville, Iowa. We pay an annual rent of approximately
$280,000 for this facility. Our lease on this facility runs through August 2004,
with an option to extend for an additional five-year period. We believe that our
current Iowa facilities are adequate to meet our needs for the foreseeable
future.

We also lease approximately 8,900 square feet of office space in San
Francisco for sales and marketing and web site development personnel at an
annual rent of approximately $365,000. Our lease in San Francisco runs through
April 1, 2001 with an option to extend for an additional eighteen month period.
In addition, we lease approximately 600 square feet of office space in New York
City. The lease expires on July 31, 2000.

We also plan to use a part of the proceeds from this offering to
establish sales offices internationally. We are currently seeking space for an
office we expect to open in London, England, in the next few months, and intend
to establish additional offices in Europe and Asia during the next 12 months.

LITIGATION

We are not currently party to any legal proceedings.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of Stockpoint are as follows:

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

William E. Staib................ 30 Chief Executive Officer and Director

Timothy S. Yamauchi............. 38 Chief Operating Officer

Scott D. Porter................. 52 Chief Financial Officer

Luan A. Cox..................... 29 Executive Vice President, Sales

L. Christopher Dominguez........ 32 Executive Vice President

Carolyn S. Mattimore............ 41 Vice President, Marketing

Santosh K. Ananthraman.......... 34 Vice President, Research

Naftaly J. Stramer.............. 44 Vice President, Development

Harry O. Hefter................. 69 Chairman of the Board of Directors

David G. Sengpiel............... 46 Director

William E. Staib has served as a director since May 1992 and as Chief
Executive Officer since December 1998. Mr. Staib has served as Stockpoint's
Chief Technology Officer since June 1998 and as its Vice President of Technology
from 1992 to 1998. In 1998, Mr. Staib was named as the "State of Iowa's Young
Entrepreneur of the Year" by the U.S. Small Business Administration. In 1996,
Mr. Staib led the team which developed Stockpoint's core technology for
distributing and displaying historical chart and quote data on the Internet. In
1992, he was recognized for creating "One of the Six Most Outstanding
Engineering Achievements in the United States" by the National Society of
Professional Engineers. Mr. Staib is the inventor of one international and two
U.S. patents and holds B.S. and M.S. degrees in electrical engineering from
Stanford University. Mr. Staib is the son of Robert Staib, our former Chief
Executive Officer.

Timothy S. Yamauchi has served as Stockpoint's Chief Operating Officer
since July 1998. From September 1995 to July 1998, he served as Chief Financial
Officer, Secretary and Treasurer of HealthDesk Corporation, an Internet
information provider in the healthcare industry. From May 1994 to June 1995, Mr.
Yamauchi was Chief Financial Officer of Innofusion Corporation, a private home
healthcare company. From May 1991 to May 1994, Mr. Yamauchi was Treasurer and
Director of Planning for Total Pharmaceutical Care, Inc., a public home
healthcare company. Mr. Yamauchi a has B.S. in business from California State
University of Los Angeles and an M.B.A. from Harvard Business School. He is
also a Certified Public Accountant.

Scott D. Porter has served as Stockpoint's Chief Financial Officer
since July 1999. From August 1998 to February 1999, Mr. Porter was the Chief
Financial Officer of RSPnet.com, a provider of Internet services that was
acquired by VirtualFund.com, Inc. during 1999. From April 1991 to July 1998, Mr.
Porter was the President (and previously Chief Financial Officer) of Parsons
Technology, which was acquired by Intuit Inc. in 1994 and by The Learning
Company in 1998. Mr. Porter has a B.S. in accounting and an M.B.A. degree from
the University of Colorado and is also a Certified Public Accountant.

Luan A. Cox has served as Executive Vice President, Sales since
November 1999. Ms. Cox joined Stockpoint in April 1998 as Director of
Technology Sales and served as its Senior Vice President of Sales from July
1999 to October 1999. From April 1997 to April 1998, Ms. Cox was the Director
of Business Development at Quote.com, an Internet financial services company.
From April 1996 to April 1997, Ms. Cox served as Internet Director
for 1-800-MUTUALS, Inc. a mutual fund company. From February 1995 to April
1996, she was an account manager for Independent Advantage Financial, an
investment planning and insurance company. Prior to that time, she was a
senior sales associate with Jefferson-Pilot Insurance Company. Ms. Cox
graduated from the University of North Texas in 1992 with a B.B.A. in
finance and has held Series 6, 7, 63 and 65 Security Licenses with
the National Association of Securities Dealers.

L. Christopher Dominguez has served as an Executive Vice President
of Stockpoint since July 1999. From April 1995 to July 1999, he served as Vice
President of Sales of Ethos Corporation, which Stockpoint acquired in 1997. From
September 1993 to September 1994, he served as Advertising Director of BuySide
Magazine. Mr. Dominguez received a B.A. from Denison University.

Carolyn Mattimore joined Stockpoint in August 1999 and serves as its
Vice President, Marketing. From July 1996 to January 1999, Ms. Mattimore was a
strategic marketing consultant for venture-backed start-up companies in the
Boston, Massachusetts area. From August 1991 to July 1995, she was Vice
President of Marketing for First Call, a subsidiary of Thomson Financial. She
has also held a Series 7 Security License with the National Association of
Securities Dealers. Ms. Mattimore has an M.P.A. from Harvard University, John F.
Kennedy School of Government and a B.B.A. from St. Mary's College, Notre Dame.

Santosh K. Ananthraman, has been Vice President of Research at
Stockpoint since 1993. Mr. Ananthraman specializes in the areas of data mining
and personalization. He has successfully directed numerous consulting projects
with companies such as Nasdaq, Engineering Animation, Harley Davidson, John
Deere and Daimler-Chrysler. After he received his Ph.D. from Duke University in
1993, he also served as an Adjunct Assistant Professor of Electrical and
Computer Engineering at the University of Iowa from 1993 to 1998, where he
taught graduate classes and co- supervised M.S. and Ph.D. students.
Mr. Ananthraman served on grant review panels for the National Science
Foundation and has reviewed articles for numerous research publications. He
has also has published extensively in his area of expertise. He received his
B.S. in electrical engineering from Regional Engineering College in India.

Naftaly J. Stramer has been Vice President of Development of Stockpoint
since October 1999. Between 1994 and 1999, Mr. Stramer served as Software
Assurance Manager and as Manager of Development Services for Stockpoint. Prior
to joining Stockpoint, Mr. Stramer served as a senior SQA engineer at Intergraph
Corporation for five years. Prior to Intergraph, he was a Computer Engineer and
Group Leader for Rafael, the Armament Development Authority based in Israel. Mr.
Stramer holds a B.SC. in Computer Engineering from the Israel Institute of
Technology.

Harry O. Hefter has served as a director of Stockpoint since 1987, has
served as Chairman since December 1998 and from 1987 to February 1997, and was
Vice Chairman from February 1997 to December 1998. Mr. Hefter has for more than
the last thirty years also served as President of the HOH group of companies in
Chicago, Illinois, which provide specialized services relating to the
engineering, integration and optimization of process control systems,
architecture and construction management for industry and government. Mr. Hefter
is a Civil Engineer with over 40 years of experience in the engineering field.

David G. Sengpiel has served as a director of Stockpoint since January
1997. Since March 1999, Mr. Sengpiel has been the Chief Operating Officer of
Quester I.T., Inc., a software company that provides consulting, research and
training in the application of language analysis, addressing, marketing and
communications issues. From August 1997 to March 1999, Mr. Sengpiel was Chief
Operating Officer of CareMedic, Inc., which automates Medicare reimbursement
processes. From 1995 until August 1997, Mr. Sengpiel was a Vice President with
Equity Dynamics, Inc., a consulting firm, and with Pappajohn Capital Resources,
a venture capital firm. From 1993 to 1995, Mr. Sengpiel was Alternative
Investments Manager for Farm Bureau Life Insurance Company.

Stockpoint maintains an audit committee and a compensation committee.
Currently, Mr. Hefter and Mr. Sengpiel are the sole members of both committees.
We also maintain a management committee consisting of Mr. Staib, Ms. Cox and Mr.
Dominguez that meets regularly to coordinate operations between the Company's
two principal offices and to discuss and determine strategic matters.

All executive officers are chosen by the Board of Directors and serve
at the Board's discretion. Directors are divided into three classes, each of
which consists, as nearly as possible, of one-third of the board. In 1997, the
stockholders elected two Class I directors (Messrs. Staib and Sengpiel) to serve
for one-year terms, one Class II director (Mr. Hefter) to serve for a two-year
term and one Class III director (currently vacant) to serve for a three-year
term. At each succeeding annual meeting of stockholders thereafter, successors
to the class of directors whose terms expired at that annual meeting will be
elected for a three-year term and will hold office for three years.

EXECUTIVE COMPENSATION

Summary Compensation. The following table sets forth the compensation
earned by our Chief Executive Officer and by our other most highly compensated
executive officers during the year ended December 31, 1999. This prospectus
refers to these executives as the Named Executive Officers.

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------- ----------------
SECURITIES
NAME AND PRINCIPAL POSITION UNDERLYING ALL OTHER
YEAR SALARY BONUS(1) OPTIONS (#) COMPENSATION (2)
- ------------------------------- --------- ----------- ---------- ---------------- ------------------

William E. Staib (3) ....... 1999 $130,000 -- 200,000 $ 2,600
Director & Chief
Executive Officer

Timothy S. Yamauchi ........ 1999 116,458 $ 38,739 95,000 2,337
Chief Operating Officer

Luan A. Cox ................ 1999 78,125 275,532 168,000 3,200
Executive Vice President,
Sales

L. Christopher Dominguez (4) 1999 82,916 126,660 85,000 --
Executive Vice President

(1) For Ms. Cox and Mr. Dominguez, the amounts represent sales commissions.

(2) Represents 401(k) plan matching contributions by Stockpoint.

(3) Mr. Staib was appointed acting Chief Executive Officer in December 1998
and elected Chief Executive Officer in June 1999. Prior to that time, he
was Chief Technology Officer.

(4) Mr. Dominguez was appointed Executive Vice President in July 1999.

Options Granted. The following table sets forth information with
respect to stock option granted during the fiscal year ended December 31, 1999
to each of the Named Executive Officers.

POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERMS(1)
--------------------------------------------------- ------------------------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES
OPTIONS IN FISCAL EXERCISE EXPIRATION
NAME GRANTED YEAR PRICE PER DATE
SHARE 0% (2) 5% 10%
- ---------------------------- ------------ ------------- --------- ----------- ---------- ---------- ----------

William E. Staib ....... 200,000 16.3% $ 7.20 9/15/09 $ -- $ 906,000 $2,294,000
Timothy S. Yamauchi .... 60,000 4.9 7.20 9/15/09 -- 271,800 688,200
35,000 2.9 1.50 1/1/09 157,500 289,450 492,100

Luan A. Cox ............ 130,000 10.6 7.20 9/15/09 -- 588,900 1,491,100
38,000 3.1 1.50 1/1/09 171,000 314,260 534,280

L. Christopher Dominguez 40,000 3.3 7.20 9/15/09 -- 181,200 458,800
45,000 3.7 1.50 1/1/09 202,500 372,150 632,700

(1) The potential realizable value amounts represent hypothetical gains
that could be achieved for the respective options if exercised at the
end of the option term. The assumed 0%, 5% and 10% annual rates of
stock appreciation from the date of grant to the end of the option term
are provided in accordance with rules of the SEC and do not represent
our estimate or projection of the future common stock price. Actual
gains, if any, on stock option exercises are dependent on the future
performance of our common stock, overall market conditions and the
option holder's continued employment through the vesting period.

(2) Represents value at date of grant of options granted with exercise
prices that were below estimated fair value.

Option Values. The following table summarizes the value of options held
at December 31, 1999 by the Named Executive Officers. No options were exercised
by the Named Executive Officers during 1999.

AGGREGATED OPTION VALUES AT DECEMBER 31, 1999
-------------------------------------------------------------------
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1999 AT DECEMBER 31, 1999 (1)
-------------------------------- --------------------------------
Name EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------- ------------- ---------------- ------------- ----------------

William E. Staib........................... 64,750 163,250 $ $
Timothy S. Yamauchi........................ 21,067 98,933
Luan Cox................................... 31,867 138,133
L. Christopher Dominguez................... 17,850 82,150

(1) Value is based on the difference between the per share exercise price of
such options and the initial public offering price per share.

EMPLOYMENT AGREEMENTS

We have employment agreements with Mr. Staib, Mr. Yamauchi, Mr. Porter,
Ms. Cox and Mr. Dominguez our Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, Executive Vice President, Sales and Executive Vice
President, respectively, which provide for annual base salaries of $130,000,
$150,000, $105,000, $150,000 and $150,000, respectively, and additional annual
incentive compensation. The agreements also provide that, upon completion of
this offering, Mr. Staib, Mr. Yamauchi, Mr. Porter, Ms. Cox and Mr. Dominguez
will receive cash bonus payments of $60,000, $45,000, $35,000, $30,000 and
$30,000, respectively, and that Mr. Staib's and Mr. Porter's salaries will be
increased to $180,000 and $122,500, respectively. The agreements with Mr. Staib,
Mr. Yamauchi, Ms. Cox and Mr. Dominguez expire in December 2000, subject to
automatic annual renewals absent a 90-day notice of nonrenewal by either party.
The agreement with Mr. Porter expires in March 2001, subject to automatic annual
renewal absent a 90- day notice of nonrenewal by either party. In the event the
employment of Messrs. Staib, Yamauchi or Dominguez is terminated "without cause"
or as a result of a "constructive termination," the officer will continue to
receive annual salary and health benefits for a period of nine months after
termination and 40% of those options granted in September 1999 which remain
unvested will vest. In the event the employment of Mr. Porter is terminated
without cause or as a result of a constructive termination, Mr. Porter will
continue to receive annual salary and health benefits for a period of nine
months after termination. In the event of the termination of Ms. Cox's
employment without cause or as a result of constructive termination, she
receives $450,000 plus nine months of benefits. In addition, if termination
occurs within 12 months following a change in control, the annual salary and
health benefits of each of Messrs. Staib, Yamauchi and Dominguez will continue
for a period of 18 months. The employment agreements with Mr. Staib,
Mr. Yamauchi, Ms. Cox and Mr. Dominguez also provide that all unvested stock
options held by these individuals will immediately vest upon a change in
control.

STOCK OPTION PLANS

In December 1995, the Board of Directors approved the 1995 Long-Term
Incentive and Stock Option Plan (as amended, the "1995 Plan") and the 1995
Nonemployee Director Stock Option Plan (the "Directors' Plan"). The 1995 Plan
authorizes the issuance of up to 2,000,000 shares of common stock, subject to an
annual increase equal to 1 1/2 % of the outstanding shares of common stock as of
the December 31 of the immediately preceding year. As of December 31, 1999, the
Directors' Plan authorizes the issuance of up to 75,000 shares of common stock.

Under the 1995 Plan, options that are intended to qualify as incentive
stock options, options that are not intended to so qualify, stock appreciation
rights, restricted stock or performance awards may be granted to full or part-
time employees, officers, consultants, directors (other than nonemployee
directors) or independent contractors. Under the Director's Plan, in which only
nonemployee directors are eligible to participate, non-qualified stock options
to purchase 5,000 shares of common stock, vesting in three equal annual
installments, are automatically granted to each director eligible to participate
on the date such person first becomes a director and an additional 5,000 shares,
vesting one year following the date of grant, is automatically granted on the
date of each annual meeting of stockholders. All options under the Directors
Plan have terms of ten years and a per share exercise price equal to the fair
market value of a share of common stock on the date of the grant.

In July 1998, the Board of Directors exchanged all outstanding options
for non-qualified options under the 1995 Plan in an identical number, at an
exercise price of $1.50 per share, and on a vesting schedule identical to that
of the exchanged options.

At December 31, 1999, non-qualified options to purchase an aggregate of
1,612,300 shares of common stock were outstanding under the 1995 Plan with a
weighted average exercise price of $4.19 per share. At December 31, 1999,
options to purchase 15,000 shares of common stock were outstanding under the
Directors' Plan with a weighted average exercise price of $5.33 per share.

COMPENSATION OF DIRECTORS

Directors are not currently paid fees for attending meetings. Harry O.
Hefter receives a $20,000 consulting fee annually for management services he
performs.

INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY

As permitted by Section 145 of the Delaware General Corporation Law,
our Amended and Restated Bylaws provide that we shall indemnify such persons for
such liabilities in such manner under such circumstances and to such extent as
permitted by Section 145. Our Board of Directors may authorize the purchase and
maintenance of insurance and the execution of individual agreements for the
purpose of such indemnification. We are required to advance all reasonable costs
and expenses (including attorneys' fees) incurred in defending any action, suit
or proceeding to all persons entitled to indemnification under the Bylaws, all
in the manner, under the circumstances and to the extent permitted by Section
145.

At present, there is no pending litigation or proceeding involving a
director, officer or employee of Stockpoint for which indemnification has been
sought. We are not aware of any threatened litigation that may result in claims
for indemnification.

As permitted by the Delaware General Corporation Law, our Amended and
Restated Certificate of Incorporation includes a provision that eliminates the
personal liability of directors for monetary damages for breach of fiduciary
duty as a director except liability for (a) any breach of the director's duty of
loyalty to the corporation or its stockholders, (b) acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law,
(c) under Section 174 of the Delaware General Corporation Law or (d) any
transaction from which the director derived an improper personal benefit.

We maintain Directors and Officers Insurance which covers all directors
and officers. The total amount of coverage is $3,000,000, including the costs of
defense.

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

CERTAIN TRANSACTIONS

CONSULTING AGREEMENT

In August 1999, Stockpoint and Equity Dynamics entered into a
Consulting Agreement. John Pappajohn, a principal of Equity Dynamics, is one of
our significant stockholders. Under the agreement, Equity Dynamics agreed to
provide a minimum of 20 days per year of management, financial and other
advisory services in exchange for which it is to be paid $50,000 per year and
receive warrants to purchase an aggregate of 125,000 shares of common stock at
an exercise price of $6.00 per share. The warrants are to expire five years from
the date of the Consulting Agreement.

BANK GUARANTEES

We have, in large part, financed our operations through bank lines of
credit and other debt facilities guaranteed by John Pappajohn and Robert Staib,
our former Chief Executive Officer. We issued to Mr. Pappajohn warrants to
purchase an aggregate of 537,500 shares of common stock at $4.00 per share in
consideration of his guarantee of three lines of credit from April 1993 through
June 1996.

Robert Staib, our former Chief Executive Officer, also guaranteed a
series of our credit agreements in seven transactions or renewals from November
1994 through June 1996. He also purported to pledge marketable securities as
collateral for these guarantees. For these guarantees, we issued warrants to
Robert Staib to purchase an aggregate of 806,250 shares of common stock at $4.00
per share, expiring at various times from January 1998 through January 2004, as
well as guarantee fees aggregating $25,000. Included among these guarantees was
the guarantee of two unsecured lines of credit aggregating $4,145,000 which
remain outstanding and on which Robert Staib remains a guarantor.

Robert Staib also guaranteed a commercial bank's obligations under
several irrevocable standby letters of credit that secure $5,900,000 of our
outstanding debentures and agreed to pledge marketable securities as collateral.
We paid Robert Staib $50,000 in November 1997 for the guarantee and pledge,
issued to Robert Staib warrants to purchase 500,000 shares of common stock at
$8.00 per share and agreed to issue to Robert Staib warrants for an additional
100,000 shares during each year Robert Staib's guarantee of our line of credit
remained outstanding. At the same time, we and Robert Staib entered into an
Indemnification and Hold Harmless Agreement and a Reimbursement and
Subordination Agreement pursuant to which we agreed to indemnify Robert Staib
for losses he incurred because of his guarantees.

In connection with loans he had guaranteed for an unrelated company,
Robert Staib was arrested in December 1998, indicted in April 1999 for bank
fraud and pled guilty to certain allegations in March 2000 as part of an
agreement settling the indictment. At our request, Robert Staib ceased any
involvement in our business in December 1998. Robert Staib formally resigned as
our Chairman and CEO in April 1999. At the time of his arrest in December 1999,
we were informed by our principal commercial lenders that they believed the
collateral pledged by Robert Staib to secure our outstanding credit lines, as
well as the letter of credit on the debentures, was not authentic. The lenders
ceased making any further advances under our credit arrangements. We eventually
restructured these credit arrangements in December 1999 under agreements that
require, among other things, that they be repaid upon completion of this
offering. A description of the restructured agreements is contained above under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources." The banks have
reserved any rights to proceed against Robert Staib under his guarantees.

In September 1999, warrants to purchase 93,750 shares held by Robert
Staib expired unexercised. In December 1999, we entered into an agreement with
Robert Staib to settle any claims related to his employment and disputes
relating to the validity of his guarantees and the warrants he had received. We
agreed not to pursue any action to invalidate Robert Staib's warrants to
purchase 500,000 shares of common stock at $4.00 per share in exchange for his
cancellation and return of all 700,000 warrants previously issued at $8.00 per
share and the remaining 212,500 warrants issued at $4.00 warrant per share. We
also agreed to pay Robert Staib $60,000 upon completion of this offering in
settlement of all other claims, including claims for reimbursement of expenses
incurred during his employment.

Under an order in connection with involuntary bankruptcy proceedings
instituted against him, Robert Staib was required to notify the federal
bankruptcy court for the District of Iowa of the settlement agreement. Robert
Staib's

counsel formally requested that the bankruptcy court approve the settlement
agreement in mid-December. One of Robert Staib's creditors, however, has filed
two motions to set aside the settlement. There currently is a hearing scheduled
before the bankruptcy court to be held on or about May 1, 2000 regarding these
motions and the validity of the agreement. If the bankruptcy court determined
that the settlement was invalid, and although we would continue to contest the
validity of all the warrants, it is possible that the 912,500 warrants that
Robert Staib has surrendered for cancellation will have to be reissued.

BRIDGE LOAN FINANCING

We entered into a $2,500,000 line of credit with a commercial bank in
December 1999. This line of credit is secured by substantially all of our
assets, as well as guaranteed, and secured by letters of credit or deposit
accounts pledged by, eight investors, including John Pappajohn. In consideration
of the guarantees and pledges, we issued to the investors warrants to purchase
20 shares of common stock for each $100 of the credit line that the investors
guaranteed (or warrants to purchase a total of 500,000 shares of common stock).
The warrants expire in December 2004 and may be exercised at any time prior to
then at a price of $7.50 per share. The exercise price, however, is subject to
adjustment to the price, if lower, (1) at which we issue shares of our common
stock in a private transaction (excluding shares issued under employee options,
outstanding warrants and certain other instruments), (2) equal to 50% of the
price at which we conduct a bona fide public offering or (3) equal to 50% of the
consideration received per share in any business combination in which we engage
while the warrants are outstanding. If the exercise price is adjusted the number
of shares covered by each warrant will also be adjusted to the number obtained
by multiplying the number of shares initially issuable by the initial exercise
price and dividing the result by the adjusted exercise price. If we complete a
public offering of our common stock pursuant to a firm commitment underwriting
at a price less than $15 per share, then the exercise price will be adjusted
to 50% of the public offering price and the number of shares which can be
purchased will be equal to $3,750,000 divided by the new exercise price. The
Agreement pursuant to which the investor guarantees were received requires
that the line be repaid by June 30, 2001 and provides that the investors may
purchase, and may assume the bank's position under, the credit agreement in
the event of certain defaults. Mr. Pappajohn received warrants to purchase
250,000 shares in consideration of the guarantee of $1,250,000 of the line
of credit.

We entered into a $500,000 line of credit with a commercial bank on
March 30, 2000. This line of credit is secured by substantially all of our
assets, as well as guaranteed, and secured by letters of credit or deposit
accounts pledged by, three investors. In consideration of the guarantees and
pledges, we issued to the investors warrants to purchase 20 shares of common
stock for each $100 of the credit line that the investors guaranteed (or
warrants to purchase a total of 100,000 shares of common stock). The warrants
expire in March 2005 and may be exercised at any time prior to that date at a
price of $10.00 per share. The exercise price, however, is subject to
adjustment to the price, if lower, (1) at which we issue shares of our common
stock in a private transaction (excluding shares issued under employee
options, outstanding warrants and certain other instruments), (2) equal to
50% of the price at which we conduct a bona fide public offering or (3) equal
to 50% of the consideration received per share in any business combination
(excluding a pooling of interest transaction) in which we engage while the
warrants are outstanding. If the exercise price is adjusted the number of
shares covered by each warrant will also be adjusted to the number obtained
by multiplying the number of shares initially issuable by the initial exercise
price and dividing the result by the adjusted exercise price. If we complete a
public offering of our common stock pursuant to a firm commitment underwriting
at a price less than $20 per share, then the exercise price will be adjusted
to 50% of the public offering price and the number of shares which can be
purchased will be equal to $1,000,000 divided by the new exercise price. The
Agreement pursuant to which the investor guarantees were received requires
that the line be repaid by June 30, 2001 and provides that the investors may
purchase, and may assume the bank's position under, the credit agreement in
the event of certain defaults.

47
PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of our common stock as of March 2, 2000 by (a) each person known
by us to beneficially own more than 5% of our outstanding common stock, (b) each
director, (c) each Named Executive Officer and (d) all directors and executive
officers as a group. Except as otherwise noted, each stockholder has sole voting
and investment power with respect to the shares set forth opposite that
stockholder's name.

This table lists applicable percentage ownership based on 4,014,931
shares of common stock outstanding as of March 2, 2000, after giving effect
to the conversion of all outstanding shares of preferred stock, and also lists
applicable percentage ownership based on _______ shares outstanding immediately
following the completion of this offering.

PERCENT OF OUTSTANDING SHARES
NUMBER -----------------------------------
NAME OF BENEFICIAL OWNER OF SHARES ACTUAL AFTER OFFERING
- ------------------------------------------ ----------------- -------------- -----------------

Harry O. Hefter........................... 1,000,000 24.9%
180 North Wabash Avenue
Chicago, Illinois 60601

John Pappajohn (1)........................ 874,967 19.0%
2116 Financial Center
Des Moines, Iowa 50309

U.S. Bank National Association as
trustee (2)............................ 748,500 16.6%
601 Second Avenue South
Minneapolis, MN 55402

William E. Staib (3)...................... 377,084 9.2%

Edgewater Private Equity Fund............. 250,000 6.2%
900 Michigan Avenue, 14th Floor
Chicago, Illinois 60601

L. Christopher Dominguez (4).............. 62,555 1.5%

Luan A. Cox (5)........................... 49,066 1.2%

Timothy S. Yamauchi (6)................... 35,683 *

David Sengpiel (7)........................ 31,000 *
512 58th Street
West Des Moines, Iowa 50266

All directors and officers as a group
(10 persons)(8)........................ 1,584,705 36.9%

- ------------
* Less than 1%.

(1) Includes 592,500 shares of common stock issuable on exercise of outstanding
warrants; 37,500 shares of common stock and 13,700 shares of Series A
Preferred Stock owned by Halkis Ltd., an entity of which Mr. Pappajohn is
the sole proprietor; 37,500 shares of common stock and 13,700 shares of
Series A Preferred Stock owned by Thebes Ltd., an entity of which Mr.
Pappajohn's wife is the sole proprietor; and 37,500 shares of common stock
and 13,700 shares of Series A Preferred Stock owned by Mr. Pappajohn's
wife. Mr. Pappajohn disclaims any beneficial ownership in any shares owned
by Thebes and his wife.

(2) Includes 248,500 shares held by U.S. Bank National Association, trustee of
the Robert B. Staib Voting Trust dated December 3, 1999, established for
the benefit of Robert Staib. Also includes 500,000 shares of common stock
issuable upon the exercise of outstanding warrants held by Robert Staib.
Upon exercise of these warrants, the shares will be automatically deposited
into the Trust. In December 1999, under the terms of an agreement between
Robert Staib and us, Robert Staib agreed to cancel and return 912,500
shares of common stock issuable upon the exercise of warrants. A creditor
of Robert Staib is seeking to invalidate the settlement agreement that
underlies these arrangements in a bankruptcy court. If the court did so, we
might have to reissue these warrants. See "Certain Transactions."

(3) Includes 77,084 shares of common stock subject to stock options exercisable
within 60 days of March 2, 2000.

(4) Includes 32,983 shares of common stock subject to stock options exercisable
within 60 days of March 2, 2000 and 16,421 shares issuable upon the
exercise of warrants.

(5) Includes 49,066 shares of common stock subject to stock options exercisable
within 60 days of March 2, 2000.

(6) Includes 35,683 shares of common stock subject to stock options exercisable
within 60 days of March 2, 2000.

(7) Includes 21,000 shares of common stock subject to stock options exercisable
within 60 days of March 2, 2000 and 10,000 shares of common stock
issuable upon the exercise of outstanding warrants.

(8) Includes 193,466 shares of common stock subject to stock options
exercisable within 60 days of March 2, 2000 and 26,421 shares of common
stock issuable upon the exercise of outstanding warrants.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 25,000,000 shares of capital
stock, of which 20,000,000 shares are common stock, $.01 par value per share,
and 5,000,000 shares are shares of preferred stock, no par value, undesignated
as to rights and preferences. As of February 29, 2000, 2,176,118 shares of
common stock were issued and outstanding and held by approximately 189
stockholders of record, and 1,375,974 shares of preferred stock were issued and
outstanding and held by approximately 164 stockholders. Upon the closing of this
offering, all outstanding shares of preferred stock will convert into an
aggregate of 1,838,813 shares of common stock.

COMMON STOCK

The holders of our common stock are entitled to one vote per share on
all matters to be voted upon by our stockholders. If Stockpoint is liquidated or
dissolved, the holders of common stock are entitled to share ratably in all
assets remaining after payment of liabilities, subject to any prior distribution
rights of any preferred stock then outstanding. The common stock has no
preemptive or conversion rights or other subscription rights. There are no
redemption or sinking fund provisions applicable to the common stock. All
outstanding shares of common stock are fully paid and nonassessable. Subject to
the prior rights and preferences of any outstanding preferred stock, the holders
of the common stock are entitled to receive ratably any dividends by the Board
of Directors out of funds legally available for dividends. See "Dividend
Policy."

PREFERRED STOCK

The Board of Directors is authorized, without further stockholder
approval, to issue the undesignated shares of preferred stock and to determine
the price, rights, preferences, privileges and restrictions, including voting
rights, of those shares. The Board of Directors has authority to issue preferred
stock in one or more series and to fix voting power (full or limited, or no
voting power), and the designations, preferences and relative, participating,
optional or other special rights and qualifications or restrictions of the
undesignated preferred stock as the Board of Directors shall determine, without
further vote or action by the stockholders. These rights include the dividend
rights, conversion rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or the designation
of such series. Issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of Stockpoint without further action
by the stockholders and may adversely affect voting and other rights of holders
of our common stock.

WARRANTS

At February 29, 2000, we had outstanding warrants to purchase
1,810,639 shares of common stock with an average weighted exercise price of
$5.86 per share. These warrants expire between March 2000 and December 2004.

REGISTRATION RIGHTS

After this offering, the holders of 897,063 shares of common stock
will be entitled to rights with respect to the registration of those shares
under the Securities Act as follows:

o Demand Registration Rights: At any time one year or more after the
effective date of an initial public offering of our common stock,
the holders of at least 51% of the eligible securities then
outstanding may, on one occasion only, demand in writing that we,
at our expense and subject to certain limitations, file a
registration statement covering the sale of those securities. At
the request of the holders of a majority of the securities to be
registered, the method of disposition of the securities will be an
underwritten public offering. We will select the managing
underwriter of any public offering.

o Piggyback Registration Rights: From and after the date on which
one year has elapsed from the date we first consummate a public
offering of our common stock, each time we determine to proceed
with the actual preparation and filing of a registration statement
other than certain limited purpose registration statements, we
will give written notice of our determination to all record
holders of eligible securities, who will have the right to include
those securities in the registration statement, subject to certain
conditions and restrictions.

o S-3 Registration Rights: At any time one year or more after the
effective date of an initial public offering, and provided that we
qualify for use of the relevant form, holders of a majority of the
outstanding eligible securities may request, on one occasion only,
that we file at our expense subject to certain limitations, a
registration statement on Form S-3 covering the sale of the
eligible securities.

The holders of warrants to purchase a total of 1,598,639 shares of
our common stock have rights to require us to include those shares in any
registration statement, other than a registration statement filed in connection
with an initial public offering, that we file prior to the expiration date of
the relevant warrant. These rights include the right to require us to use our
best efforts to qualify the warrant shares for sale in the states any
warrantholder designates. We will bear the entire cost and expense of any
registration like this other than the fees of counsel for the warrantholders and
any registration fees, transfer taxes or underwriting discounts or commissions
applicable to the warrant shares.

DELAWARE LAW PROVISIONS WITH POTENTIAL ANTI-TAKEOVER EFFECTS

As a Delaware corporation, we are subject to the provisions of Section
203 of the Delaware General Corporation Law. Section 203, subject to certain
exemptions, prohibits a Delaware corporation from engaging in any of a broad
range of "business combinations" and "control share acquisitions" involving an
"interested" stockholder, or any affiliate or associate of such interested
stockholder, for a period of three years following the date that such
stockholder became an interested stockholder, unless:

o prior to such date, the Board of Directors of the corporation
approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder;

o upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced
excluding, for purposes of determining the number of shares
outstanding, those shares owned (i) by persons who are directors
and also officers and (ii) by employee stock plans in which
employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or

o on or subsequent to such date, the business combination is
approved by the Board of Directors and authorized at an annual or
special meeting of stockholders, and not by written consent, by
the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder.

A "business combination" includes a merger, asset sale or other
transaction resulting in a financial benefit to the stockholder. For purposes of
Section 203, an "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years prior, did own) 15% or
more of the corporation's voting stock. These provisions may have the effect of
discouraging, delaying, deferring or preventing a change in control of
Stockpoint.

LISTING

We have applied for quotation of our common stock on the Nasdaq
National Market under the symbol "STKP."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock will be Norwest
Bank Minnesota, National Association.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common
stock. We cannot make any predictions regarding the effect, if any, that future
sales of substantial amounts of our common stock, or the perception that those
sales might occur, could have on the market price for our common stock.
Nevertheless, sales of substantial amounts of our common stock in the public
market could adversely affect the prevailing market price. These factors could
also make it more difficult for us to raise additional equity capital in the
future.

Upon completion of this offering, we will have outstanding a total of
shares of our common stock, assuming no exercise of the underwriters'
option to purchase additional shares and no exercise of outstanding options. All
of the shares sold in this offering will be freely tradable without restriction
or further registration under the Securities Act unless the shares are purchased
by "affiliates" as that term is defined in Rule 144 under the Securities Act.
The remaining 4,014,931 shares of common stock held by existing stockholders are
"restricted securities" as that term is defined in Rule 144. Restricted
securities may be sold in the public market only if registered or if they
qualify for an exemption from registration under Rule 144 or Rule 701 under the
Securities Act, rules that are summarized below. 4,010,181 of the shares held by
existing stockholders were acquired more than two years ago. All of those
shares, except shares held by persons who are "affliates" of Stockpoint under
SEC rules and the ______ shares subject to lockup agreements with the
underwriters, will be eligible for immediate sale in the public markets under
Rule 144(k). The remaining 4,750 shares will become eligible for resale 90 days
after the effective date of this offering under Rule 701.

LOCK-UP AGREEMENTS

Our directors, executive officers, five percent stockholders and
certain other holders of our common stock have entered into "lock-up" agreements
providing that they will not sell, offer to sell, contract to sell, hypothecate,
pledge, grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of common stock or securities convertible into or
exerciseable or exchangeable for common stock for a period of 180 days after the
date of this prospectus without the prior written consent of Roth Capital
Partners, Inc., the lead managing underwriter. Although Roth Capital Partners,
Inc. may release the shares subject to the lock-up agreements in whole or in
part at any time it has no current plan to do so.

RULE 144

In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares of our common stock for at least one year would be
entitled to sell, within any three-month period beginning 90 days after the date
of this prospectus, a number of shares that does not exceed the greater of:

o 1% of the number of shares of common stock then outstanding, which
will equal approximately shares immediately after this offering;
or

o the average weekly trading volume of the common stock on the
Nasdaq National Market during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 are also subject to certain manner of sale
provisions and notice requirements and to the availability of current public
information about us.

RULE 144(k)

Under Rule 144(k), a person who has not been one of our affiliates at
any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, including the
holding period of any prior owner other than an affiliate, is entitled to sell
those shares without complying with the manner of sale, public information,
volume limitation or notice provisions of Rule 144.

RULE 701

In general, under Rule 701 as currently in effect, each of our
employees, consultants or advisors who purchases shares from us in connection
with a compensatory stock plan or other written agreement is eligible to resell

those shares 90 days after the effective date of this offering in reliance on
Rule 144, but without compliance with certain restrictions, including the
holding period, contained in Rule 144.

REGISTRATION RIGHTS

The holders of 897,063 shares of our common stock and holders of
warrants to purchase an aggregate of 1,598,639 shares of our common stock have
various rights with respect to the registration of their shares under the
Securities Act. Registration of these shares would result in their becoming
freely tradeable without restriction, except for shares purchased by
affiliates. See "Description of Capital Stock--Registration Rights."

STOCK OPTIONS

After the completion of this offering, we intend to file a
registration statement on Form S-8 under the Securities Act to register all
shares of common stock issuable under our stock option plans. See "Management --
Stock Option Plans." This Form S-8 registration statement is expected to be
become effective immediately upon filing and shares covered by that registration
statement will then be eligible for sale in the public markets, subject to Rule
144 limitations applicable to affiliates.

UNDERWRITING

Stockpoint has entered into an underwriting agreement with the
underwriters named below. Roth Capital Partners, Inc. is acting as the
representative of the underwriters.

The underwriting agreement provides for the purchase of a specific
number of shares of common stock by each of the underwriters. The underwriters'
obligations are several, which means that each underwriter is required to
purchase a specified number of shares, but is not responsible for the commitment
of any other underwriter to purchase shares. Subject to the terms and conditions
of the underwriting agreement, each underwriter has severally agreed to purchase
the number of shares of common stock set forth opposite its name below:

UNDERWRITER NUMBER OF SHARES
- ----------- ----------------

Roth Capital Partners, Inc. ...............................
-----------------

Total .................................................... =================

This is a firm commitment underwriting. This means that the
underwriters have agreed to purchase all of the shares offered by this
prospectus, other than those covered by the over-allotment option described
below, if any are purchased. Under the underwriting agreement, if an underwriter
defaults in its commitment to purchase shares, the commitments of non-defaulting
underwriters may be increased or the underwriting agreement may be terminated,
depending on the circumstances.

The representative has advised us that the underwriters propose to
offer the shares directly to the public at the public offering price that
appears on the cover of this prospectus. In addition, the representative may
offer some of the shares to securities dealers at that price less a concession
of $ per share. The underwriters may also allow to dealers, and those
dealers may reallow, a concession not in excess of $ per share to other
dealers. After the shares are released for sale to the public, the
representative may change the offering price and other selling terms at various
times. The underwriters have informed us that they do not intend to confirm
sales to accounts over which they exercise discretionary authority.

We have granted to the underwriters an over-allotment option. This
option, which is exercisable for up to 30 days after the date of this
prospectus, permits the underwriters to purchase a maximum of additional
shares of our common stock to cover over-allotments. If the underwriters
exercise all or part of this option, they will purchase the shares covered by
the option at the public offering price that appears on the cover page of this
prospectus, less the underwriting discount. If this option is exercised in full,
the total price to public will be $ million and the total proceeds to
Stockpoint will be approximately $ million. The underwriters have
severally agreed that, to the extent they exercise the over-allotment option,
each of the underwriters will purchase a number of shares proportionate to its
initial amount reflected in the table above.

The following table provides information regarding the amount of the
discount to be paid to the underwriters by us:

----------------------------------------------------
No Exercise of Full Exercise of
Over-Allotment Option Over-Allotment Option
----------------------- ------------------------

Per Share............
Total................

We estimate that the total expenses of the offering, excluding the
underwriting discount, will be approximately $______________.

We have agreed to indemnify the underwriters against specified
liabilities, including liabilities under the Securities Act of 1933.

We, each of our directors, executive officers, five percent
stockholders and certain other holders of our common stock have agreed pursuant
to "lock-up" agreements not to sell, offer to sell, contract to sell,
hypothecate, pledge, grant any option to sell or otherwise dispose of, directly
or indirectly, any shares of common stock or securities convertible into or
exerciseable or exchangeable for common stock for a period of 180 days after the
date of this prospectus without the prior written consent of Roth Capital
Partners, Inc. Although Roth Capital Partners, Inc. may release the shares
subject to the lock-up agreements in whole or in part at any time, it has no
current plan to do so.

Prior to this offering, there has been no public market for the common
stock. Consequently, the offering price for the common stock will be determined
by negotiations between us and the representative of the underwriters and is not
necessarily related to our asset value, net worth or other established criteria
of value. The factors to be considered in these negotiations, in addition to
prevailing market conditions, will include the history of and prospects for the
industry in which we compete, an assessment of our management, our prospects,
our capital structure and other factors as are deemed relevant.

Rules of the Securities and Exchange Commission may limit the ability
of the underwriters to bid for or purchase shares before the distribution of
shares is completed. However, the underwriters may engage in the following
activities in accordance with those rules:

o Stabilizing transactions - The representatives may make bids or
purchases for the purpose of pegging, fixing or maintaining the
price of the shares, so long as stabilizing bids do not exceed a
specified maximum.

o Over-allotments and syndicate covering transactions - The
underwriters may create a short position in the shares by selling
more shares than are set forth on the cover page of this
prospectus. If a short position is created in connection with this
offering, the representative may engage in syndicate covering
transactions by purchasing shares in the open market. The
representative may also elect to reduce any short position by
exercising all or part of the over-allotment option.

o Penalty bids - If the representative purchases shares in the open
market in a stabilizing transaction or syndicate covering
transaction, they may reclaim a selling concession from the
underwriters and selling group members who sold those shares as
part of this offering.

Stabilization and syndicate covering transactions may cause the price
of the shares to be higher than it would be in the absence of these
transactions. The imposition of a penalty bid might also have an effect on the
price of the shares if it discourages resales of the shares.

Neither we nor the underwriters make any representation or prediction
as to the effect that the transactions described above may have on the price of
the shares. These transactions may occur on the Nasdaq National Market or
otherwise. If transactions of this kind are commenced, they may be discontinued
without notice at any time.

LEGAL MATTERS

Dorsey & Whitney LLP, Minneapolis, Minnesota, will pass upon the
validity of the issuance of shares of common stock offered by this prospectus
for Stockpoint. Messerli & Kramer P.A. will pass upon certain legal matters in
connection with the offering for the underwriters.

EXPERTS

The consolidated financial statements of Stockpoint as of December 31,
1998 and 1999 and for the years ended December 31, 1997, 1998 and 1999 included
in this Prospectus have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 with
respect to the shares of common stock offered by this prospectus. This
prospectus, which constitutes a part of the registration statement, does not
contain all of the information contained in the registration statement and the
exhibits and schedules that are another part of the registration statement. In
particular, statements contained in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in each
case we refer you to the copy of that contract or other document to the extent
filed as an exhibit to the registration statement for a more complete
description. For further information on Stockpoint and our common stock, you
should review the registration statement, including exhibits and schedules.

You may read and copy all or any portion of the registration statement
or any reports, statements or other information we file at the SEC's public
reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, NW, Washington,
DC, 20549 and at the regional offices of the SEC located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. You can request copies of these documents upon
payment of a duplicating fee by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings, including the registration statement, are also available
on the SEC's web site at http://www.sec.gov.

Upon completion of this offering, we will be required to file periodic
reports, proxy statements and other information with the SEC. These documents
will be available for inspection and copying as described above. In addition,
upon approval of our application for quotation of our common on the Nasdaq
National Market, those reports, proxy statements and other information will also
be available for inspection at the offices of Nasdaq Operations, 1735 K Street,
NW, Washington, DC 20006.

We intend to furnish our stockholders with annual reports containing
financial statements audited by our independent auditors and to make available
to our stockholders quarterly reports containing unaudited financial data for
the first three quarters of each fiscal year.

STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE
----

Independent Auditors' Report................................ F-2
Consolidated Balance Sheets as of December 31, 1998 and
1999...................................................... F-3
Consolidated Statements of Operations for the Years Ended
December 31, 1997, 1998 and 1999.......................... F-5
Consolidated Statements of Stockholders' (Deficiency) for
the Years Ended December 31, 1997, 1998 and 1999.......... F-6
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1997, 1998 and 1999.......................... F-7
Notes to Consolidated Financial Statements.................. F-8

F-1
56

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Stockpoint, Inc.:

We have audited the accompanying consolidated balance sheets of Stockpoint,
Inc. (formerly Neural Applications Corporation) and subsidiary as of December
31, 1998 and 1999, and the related consolidated statements of operations,
stockholders' (deficiency), and cash flows for each of the three years in the
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 financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Stockpoint, Inc. and subsidiary
at December 31, 1998 and 1999, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1999 in
conformity with generally accepted accounting principles.

As discussed in Note 13 to the consolidated financial statements, the
Company discontinued the operations of its metals segment on May 28, 1999, when
it sold the technology and operational assets of the metals segment. The gain on
sale and results prior to the sale are included in discontinued operations in
the accompanying consolidated financial statements.

/s/ Deloitte & Touche LLP

Cedar Rapids, Iowa
February 8, 2000

F-2
57

STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1999

1998 1999
---------- ----------

ASSETS (NOTES 2 AND 9)
CURRENT ASSETS:
Cash and cash equivalents............................. $ 221,098 $2,203,623
Accounts receivable, less allowance for doubtful
accounts of $58,208 for 1998 and $150,000 for
1999............................................... 1,118,310 1,859,852
Prepaid expenses and other assets..................... 146,323 247,201
Net current assets of discontinued operations (Note
13)................................................ 804,201 --
---------- ----------
Total current assets............................... 2,289,932 4,310,676
---------- ----------
SOFTWARE, EQUIPMENT AND FURNITURE:
Purchased software.................................... 214,473 322,665
Equipment............................................. 1,388,863 1,886,301
Furniture and fixtures................................ 56,360 67,227
---------- ----------
Total.............................................. 1,659,696 2,276,193
Less accumulated depreciation......................... (571,133) (929,071)
---------- ----------
Software, equipment and furniture, net........... 1,088,563 1,347,122
---------- ----------
OTHER ASSETS:
Software development costs, less accumulated
amortization of $191,654 for 1998 and $204,519 for
1999 (Note 1)...................................... 28,645 15,780
Deferred financing costs, less accumulated
amortization of $108,865 for 1998 and $215,512 for
1999............................................... 387,207 415,560
---------- ----------
Total other assets................................. 415,852 431,340
---------- ----------
Total.............................................. $3,794,347 $6,089,138
========== ==========

See notes to consolidated financial statements.

F-3
58

PRO FORMA
(NOTE 14)
1998 1999 1999
------------ ------------ ------------
(UNAUDITED)

LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)
CURRENT LIABILITIES:
Lines of credit (Note 2)............. $ 4,145,000 $ 1,750,000
Forgivable loan (Note 2)............. 250,000 --
Accounts payable..................... 796,370 1,566,781
Deferred revenue..................... 1,498,181 2,808,181
Accrued installation and warranty
costs............................. 46,282 296,086
Other accrued liabilities............ 833,956 552,451
Customer deposits.................... 70,314 --
Current portion of capital lease
(Note 8).......................... -- 5,821
------------ ------------
Total current liabilities......... 7,640,103 6,979,320
------------ ------------
LONG-TERM LIABILITIES:
Long-term debt, net of debt discount
and less current portion (Note
2)................................ 5,900,000 10,508,421
Capital lease, less current portion
(Note 8).......................... -- 28,260
------------ ------------
Total long-term liabilities....... 5,900,000 10,536,681
------------ ------------
COMMITMENTS AND CONTINGENCIES
(Notes 2, 7, 8 and 9)
STOCKHOLDERS' (DEFICIENCY) (Note 11):
Preferred stock, no par value;
5,000,000 shares authorized:
Convertible Series A Preferred Stock,
320,000 shares issued at December
31, 1998 and 1999 ($2,000,000
liquidation value, convertible
into 500,000 shares of common
stock) (Note 4), no pro forma
shares outstanding................ 1,965,991 1,965,991 $ --
Convertible Series B Preferred Stock,
282,720 shares issued at December
31, 1998 and 1999 ($1,767,000
liquidation value, convertible
into 441,750 shares of common
stock) (Note 4), no pro forma
shares outstanding................ 1,733,639 1,733,639 --
Convertible Series C Preferred Stock,
773,254 shares issued at December
31, 1998 and 1999 ($6,762,602
liquidation value, convertible
into 897,063 shares of common
stock) (Note 4), no pro forma
shares outstanding................ 5,455,319 5,455,319 --
Common stock, $.01 par value per share;
20,000,000 shares authorized;
2,129,701 and 2,176,118 shares issued
at December 31, 1998 and 1999,
respectively (Note 5), 4,014,931 pro
forma shares outstanding............. 21,297 21,761 40,149
Common stock warrants (Note 7)......... -- 819,868 819,868
Additional paid-in capital............. 2,609,759 3,875,620 13,012,181
Deferred compensation (Note 6)......... (1,594,755) (2,194,978) (2,194,978)
Accumulated deficit.................... (19,937,006) (23,104,083) (23,104,083)
------------ ------------ ------------
Total stockholders'
(deficiency).................... (9,745,756) (11,426,863) $(11,426,863)
------------ ------------ ============
Total.................................. $ 3,794,347 $ 6,089,138
============ ============

See notes to consolidated financial statements.

F-4
59

STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

1997 1998 1999
----------- ----------- -----------

CONTINUING OPERATIONS:
REVENUES (Note 10)....................... $ 1,427,908 $ 2,177,946 $ 6,829,869
COST OF REVENUES (excluding deferred
compensation of $86,257 for 1998 and
$124,337 for 1999).................. 308,608 764,965 2,289,881
----------- ----------- -----------
GROSS PROFIT............................. 1,119,300 1,412,981 4,539,988
----------- ----------- -----------
OPERATING EXPENSES:
Research and development (excluding
deferred compensation of $61,176 for
1998 and $114,005 for 1999)......... 1,057,071 1,101,471 1,637,150
Sales and marketing (excluding deferred
compensation of $58,229 for 1998 and
$137,552 for 1999).................. 752,675 1,566,030 1,590,899
General and administrative (excluding
deferred compensation of $460,608
for 1998 and $236,408 for 1999)..... 2,556,730 3,523,006 3,588,977
Deferred compensation (Note 6)......... -- 666,270 612,302
----------- ----------- -----------
Total operating expenses............ 4,366,476 6,856,777 7,429,328
----------- ----------- -----------
OPERATING LOSS FROM CONTINUING
OPERATIONS............................. (3,247,176) (5,443,796) (2,889,340)
OTHER EXPENSE, PRIMARILY INTEREST........ (688,525) (784,546) (1,058,545)
----------- ----------- -----------
LOSS FROM CONTINUING OPERATIONS.......... (3,935,701) (6,228,342) (3,947,885)
DISCONTINUED OPERATIONS (Note 13):
Income (loss) from operations.......... (405,722) (356,946) 347,675
Gain on disposition.................... -- -- 433,133
----------- ----------- -----------
NET LOSS................................. (4,341,423) (6,585,288) (3,167,077)
CUMULATIVE DIVIDENDS ON PREFERRED
STOCK.................................. (40,266) (409,418) (412,918)
----------- ----------- -----------
NET LOSS APPLICABLE TO COMMON
STOCKHOLDERS........................... $(4,381,689) $(6,994,706) $(3,579,995)
=========== =========== ===========
BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE -- HISTORICAL:
Loss from continuing operations..... $ (1.90) $ (3.15) $ (2.03)
Income (loss) from discontinued
operations........................ (0.20) (0.17) 0.36
----------- ----------- -----------
Net loss............................ $ (2.10) $ (3.32) $ (1.67)
=========== =========== ===========
BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE -- PRO FORMA (UNAUDITED)
(Note 14):
Loss from continuing operations..... $ (.73)
Income from discontinued
operations........................ .20
-----------
Net loss............................ $ (.53)
===========

See notes to consolidated financial statements.

F-5
60

STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIENCY)
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

SUBSIDIARY CONVERTIBLE CONVERTIBLE CONVERTIBLE
SERIES A SERIES A SERIES B SERIES C COMMON ADDITIONAL
PREFERRED PREFERRED PREFERRED PREFERRED COMMON STOCK PAID-IN
STOCK STOCK STOCK STOCK STOCK WARRANTS CAPITAL
---------- ----------- ----------- ----------- ------- -------- ----------

BALANCE AT DECEMBER 31, 1996....... $ 100,000 $1,965,991 $1,733,639 $ -- $20,897 $ -- $ 118,734
Issuance of 694,618 shares of
Convertible Series C Preferred
Stock, net of issue costs of
$414,684......................... -- -- -- 4,885,316 -- -- --
Redemption of subsidiary Series A
Preferred Stock................ (100,000) -- -- -- -- -- --
Net loss......................... -- -- -- -- -- -- --
--------- ---------- ---------- ---------- ------- -------- ----------

BALANCE AT DECEMBER 31, 1997....... -- 1,965,991 1,733,639 4,885,316 20,897 -- 118,734
Issuance of 78,636 shares of
Convertible Series C Preferred
Stock, net of issue costs of
$29,997.......................... -- -- -- 570,003 -- -- --
Deferred compensation.............. -- -- -- -- -- -- 2,491,425
Amortization of deferred
compensation (including $230,400
allocated to discontinued
operations)...................... -- -- -- -- -- -- --
Cashless exercise of warrants for
40,000 shares of common stock.... -- -- -- -- 400 -- (400)
Net loss..................... -- -- -- -- -- -- --
--------- ---------- ---------- ---------- ------- -------- ----------

BALANCE AT DECEMBER 31, 1998....... -- 1,965,991 1,733,639 5,455,319 21,297 -- 2,609,759
Issuance of 4,750 shares of common
stock............................ -- -- -- -- 47 -- 4,703
Deferred compensation.............. -- -- -- -- -- -- 1,261,575
Amortization of deferred
compensation (including $49,050
allocated to discontinued
operations)...................... -- -- -- -- -- -- --
Issuance of common stock
warrants......................... -- -- -- -- -- 819,868 --
Cashless exercise of warrants for
41,667 shares of common stock.... -- -- -- -- 417 -- (417)
Net loss..................... -- -- -- -- -- -- --
--------- ---------- ---------- ---------- ------- -------- ----------

BALANCE AT DECEMBER 31, 1999....... $ -- $1,965,991 $1,733,639 $5,455,319 $21,761 $819,868 $3,875,620
========= ========== ========== ========== ======= ======== ==========

DEFERRED ACCUMULATED
COMPENSATION DEFICIT
------------ -----------

BALANCE AT DECEMBER 31, 1996....... $ -- $ (9,010,295)
Issuance of 694,618 shares of
Convertible Series C Preferred
Stock, net of issue costs of
$414,684......................... -- --
Redemption of subsidiary Series A
Preferred Stock................ -- --
Net loss......................... -- (4,341,423)
----------- ------------
BALANCE AT DECEMBER 31, 1997....... -- (13,351,718)
Issuance of 78,636 shares of
Convertible Series C Preferred
Stock, net of issue costs of
$29,997.......................... -- --
Deferred compensation.............. (2,491,425) --
Amortization of deferred
compensation (including $230,400
allocated to discontinued
operations)...................... 896,670 --
Cashless exercise of warrants for
40,000 shares of common stock.... -- --
Net loss..................... -- (6,585,288)
----------- ------------
BALANCE AT DECEMBER 31, 1998....... (1,594,755) (19,937,006)
Issuance of 4,750 shares of common
stock............................ -- --
Deferred compensation.............. (1,261,575) --
Amortization of deferred
compensation (including $49,050
allocated to discontinued
operations)...................... 661,352 --
Issuance of common stock
warrants......................... -- --
Cashless exercise of warrants for
41,667 shares of common stock.... -- --
Net loss..................... -- (3,167,077)
----------- ------------
BALANCE AT DECEMBER 31, 1999....... $(2,194,978) $(23,104,083)
=========== ============

See notes to consolidated financial statements.

F-6
61

STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

1997 1998 1999
----------- ----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................................... $(4,341,423) $(6,585,288) $(3,167,077)
Adjustments to reconcile net loss to net cash flows
from operating activities of continuing
operations:
(Income) loss from discontinued operations....... 405,722 356,946 (347,675)
Gain on disposition of discontinued operations... -- -- (433,133)
Depreciation and amortization.................... 243,187 361,495 521,015
Noncash expense related to stock options and
warrants....................................... -- 896,670 858,810
Net changes in assets and liabilities:
Accounts receivable.............................. (66,648) (508,159) (741,542)
Prepaid expenses and other assets................ (81,581) (6,477) 9,953
Accounts payable................................. 136,874 404,099 770,411
Deferred revenue................................. 133,137 900,954 1,310,000
Accrued liabilities and customer deposits........ (60,808) 388,846 (102,015)
----------- ----------- -----------
Net cash flows from operating activities of
continuing operations....................... (3,631,540) (3,790,914) (1,321,253)
Net cash flows from discontinued operations.... (407,746) (727,083) 835,009
----------- ----------- -----------
Net cash flows from operating activities....... (4,039,286) (4,517,997) (486,244)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for software, equipment and
furniture........................................ (477,919) (749,923) (623,487)
Expenditures for software development costs........ -- (38,597) --
Proceeds from sale of discontinued operations...... -- -- 750,000
----------- ----------- -----------
Net cash flows from investing activities....... (477,919) (788,520) 126,513
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under bank lines of
credit........................................... -- 5,055,000 2,475,000
Payments on borrowings under bank lines of
credit........................................... (5,510,000) (910,000) --
Payments on capital lease.......................... -- -- (2,494)
Payments for bank line of credit fees.............. -- -- (135,000)
Payments for issuance costs of debentures.......... (411,575) (29,997) --
Payments for issuance costs of preferred stock..... (414,684) (29,997) --
Proceeds from issuance of Convertible Series C
Preferred Stock.................................. 5,300,000 600,000 --
Proceeds from issuance of debentures............... 5,300,000 600,000 --
Proceeds from issuance of common stock............. -- -- 4,750
Redemption of subsidiary Series A Preferred
Stock............................................ (100,000) -- --
----------- ----------- -----------
Net cash flows from financing activities....... 4,163,741 5,285,006 2,342,256
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................................ $ (353,464) $ (21,511) $ 1,982,525
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR....... 596,073 242,609 221,098
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR............. $ 242,609 $ 221,098 $ 2,203,623
=========== =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid during the year for interest............. $ 699,021 $ 663,110 $ 936,018
=========== =========== ===========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Equipment purchased by capital lease............... $ -- $ -- $ 36,575
Issuance of common stock warrants for consulting
services......................................... -- -- 279,868
Issuance of common stock warrants in connection
with bank line of credit......................... -- -- 540,000

See notes to consolidated financial statements.

F-7
62

STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS -- In July 1999, Neural Applications Corporation amended its
certificate of incorporation to change its name to Stockpoint, Inc. (which
individually or collectively with its wholly-owned subsidiary discussed below is
referred to herein as the "Company"). The Company operates in a single business
segment. The Company is a provider of financial information and market analysis
components for Internet web sites. The Company integrates sophisticated
financial content and applications to provide its clients customized web sites
that the Company hosts using its proprietary data base architecture. In doing
so, the Company enables organizations such as brokerages, commercial and
investment banks, mutual funds, 401(k) plans, portals and media companies to
outsource essential web site functionality. The Company also engages in projects
to provide data mining applications and financial services consulting to
businesses related to their Internet web sites.

PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements
include the accounts of Stockpoint, Inc. and its wholly-owned subsidiary. Prior
to June 1999, such subsidiary was Ethos Corporation, which was acquired by the
Company on March 6, 1997 (see Note 11). In June 1999, Ethos Corporation was
merged into the Company. Simultaneously, certain assets were contributed to a
newly formed subsidiary named Neural, Inc. Intercompany accounts and
transactions have been eliminated.

BASIS OF PRESENTATION -- The accompanying consolidated financial statements
have been prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.
The Company has had recurring operating losses since inception, which has
resulted in an accumulated deficit of $23,104,083 at December 31, 1999.
Management is continuing its efforts to market the Company's existing products
and services and develop new products and services to enable the Company to
achieve a revenue base that can support its operations. Management believes that
existing capital resources and financing available under the Company's line of
credit will be adequate to satisfy minimum capital requirements for at least
twelve months.

USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change in
the near-term relate to the allowance for doubtful accounts and accrued
installation and warranty costs.

FAIR VALUE OF FINANCIAL INSTRUMENTS -- The fair value of accounts
receivable, accounts payable, customer deposits, and notes payable approximate
the carrying values of the instruments due to the short-term maturities of such
instruments or, for long-term notes payable, due to no significant change in
interest rates since their issuance.

CONCENTRATION OF CREDIT RISK -- The Company's financial instruments that
are subject to concentration of credit risk consist primarily of cash and cash
equivalents and trade

F-8
63
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

accounts receivable which are generally not collateralized. The Company's policy
is to place its cash and cash equivalents with high credit quality financial
institutions in order to limit the amount of credit exposure. The Company's
trade accounts receivable are primarily with customers in the financial services
industry. The Company maintains allowances for probable credit losses.

CONCENTRATION OF SOURCES OF CONTENT -- The Company obtains financial data
and information, such as stock pricing information, financial news, and research
information, from a limited number of content providers through nonexclusive
contractual relationships with terms that usually range from one to two years.
The Company may not be able to renew these contracts on favorable terms or a
change in content providers could cause significant service disruptions which
would adversely affect the business.

CASH AND CASH EQUIVALENTS -- Cash and cash equivalents include interest
earning deposits with original maturities of ninety days or less.

PURCHASED SOFTWARE, EQUIPMENT, AND FURNITURE -- Purchased software,
equipment, and furniture are recorded at cost. Depreciation is provided using
the straight-line method over the estimated useful lives (three to five years)
of the related assets. The Company reviews such assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.

SOFTWARE DEVELOPMENT COSTS -- Software development costs for products and
significant product enhancements incurred subsequent to the establishment of
their technological feasibility and prior to their general release to customers
are capitalized. The ultimate recovery of the costs is dependent on the
Company's ability to successfully complete the products or enhancements under
development and to achieve a level of market acceptance, which will generate
revenues and profits in amounts sufficient to permit such recovery. The Company
evaluates the recoverability of capitalized software development costs by
project on a periodic basis.

The Company begins amortizing software development costs when the products
and product enhancements are released to customers. Amortization expense was
$55,064, $29,948 and $12,865 for the years ended December 31, 1997, 1998 and
1999, respectively. Capitalized software development costs are amortized pro
rata based upon revenue earned over total anticipated revenue from the related
products or product enhancement or straight-line over three years, whichever
method results in the greatest amortization expense.

DEFERRED FINANCING COSTS -- Incremental costs directly attributable to the
Company's line of credit agreement and private placement offering of debentures
have been deferred and are being amortized as interest expense over the life of
the line of credit agreement and debentures, respectively.

PRODUCT SUPPORT AND WARRANTY COSTS -- Estimated costs anticipated to be
incurred during the product support and warranty period related to the Company's
discontinued metals segment (see Note 13) was accrued when revenue from the
system sale was

F-9
64
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

recognized. The Company remains liable for such costs for systems sold prior to
the sale of the metals segment.

REVENUE RECOGNITION AND DEFERRED REVENUE -- Revenues from Internet
advertising, license, and maintenance and support agreements are recognized
ratably over the periods of the agreements. Revenues from services for projects
and Internet development agreements are recognized as project or development
time is incurred. Deferred revenue represents amounts billed to customers as
permitted by the agreements which have not yet been recognized as revenue.

DEBT DISCOUNT -- Original issue debt discount associated with the value
assigned to detachable common stock warrants issued in connection with the
Company's line of credit is being amortized as interest expense over the life of
the line of credit agreement.

INCOME TAXES -- Deferred income taxes are provided to recognize the tax
effect of temporary differences between the basis of assets and liabilities for
tax and financial statement purposes. A valuation allowance is provided to
reduce deferred tax assets to the amount considered realizable.

STOCK-BASED COMPENSATION -- The Company measures stock-based compensation
cost with employees as the excess of the fair value of the Company's common
stock at date of grant over the amount the employee must pay for the stock. The
Company measures stock-based compensation with other than employees as the fair
value of the goods or services received or the fair value of the equity
instrument issued, whichever is more reliably measurable.

If compensation cost for stock option grants to employees had been
determined based on fair value at the grant dates consistent with the method
prescribed by Statement of Financial Accounting Standards No. 123, "Accounting
for Stock Based Compensation," the Company's net loss applicable to common
stockholders and net loss per share would have been the pro forma amounts
indicated below:

YEARS ENDED
DECEMBER 31,
-----------------------------------------
1997 1998 1999
----------- ----------- -----------

Net loss applicable to common
stockholders:
As reported............................ $(4,381,689) $(6,994,706) $(3,579,995)
Pro forma.............................. (4,442,009) (7,018,879) (3,651,326)
Net loss per common share:
As reported............................ $ (2.10) $ (3.32) $ (1.67)
Pro forma.............................. (2.13) (3.33) (1.71)

The Company's calculations were made using the Black-Scholes option pricing
model with the following weighted average assumptions: seven year expected life
of option; stock volatility of zero; risk-free interest rates of 6.25%, 5.5% and
6.0% in 1997, 1998 and 1999, respectively; and no dividends during the expected
term. The pro forma amounts for

F-10
65
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

compensation cost may not be indicative of the effects on net loss applicable to
common stockholders and net loss per common share for future years.

NET LOSS PER COMMON SHARE INFORMATION -- The Company's net loss per common
share is based upon the weighted average number of common shares outstanding
during the years presented. Equivalent shares in the form of convertible
preferred stock, stock options and warrants are excluded from the calculation
since they are antidilutive. The Company's net loss per common share is
calculated as follows:

YEARS ENDED
-----------------------------------------
1997 1998 1999
----------- ----------- -----------

Loss from continuing operations.......... $(3,935,701) $(6,228,342) $(3,947,885)
Cumulative dividends on preferred
stock.................................. (40,266) (409,418) (412,918)
----------- ----------- -----------
Loss from continuing operations
applicable to common stockholders...... (3,975,967) (6,637,760) (4,360,803)
Income (loss) from discontinued
operations............................. (405,722) (356,946) 780,808
----------- ----------- -----------
Net loss applicable to common
stockholders........................... $(4,381,689) $(6,994,706) $(3,579,995)
=========== =========== ===========
Basic and diluted loss per common share:
Loss from continuing operations........ $ (1.90) $ (3.15) $ (2.03)
Income (loss) from discontinued
operations.......................... (0.20) (0.17) 0.36
----------- ----------- -----------
Net loss............................... $ (2.10) $ (3.32) $ (1.67)
----------- ----------- -----------
Weighted average common shares
outstanding............................ 2,089,701 2,106,906 2,141,404
=========== =========== ===========
Potential common shares excluded from per
share computation because they were
antidilutive:
Convertible preferred stock......... 1,636,368 1,773,940 1,838,813
Options............................. 422,150 588,650 1,652,300
Warrants............................ 1,686,750 2,186,889 1,810,639
----------- ----------- -----------
Total............................... 3,745,268 4,549,479 5,301,752
=========== =========== ===========

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS -- In June 1998, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 establishes standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives), and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. The recognition of gains or losses resulting from changes in the
values of derivatives is based on the use of each derivative instrument and
whether it qualifies for hedge accounting. SFAS No. 137 deferred the effective
date of SFAS No. 133 to fiscal years beginning after

F-11
66
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

June 15, 2000. The Company has not yet determined the effect of SFAS No. 133 on
the consolidated financial statements.

SFAS No. 132, "Employers' Disclosures About Pensions and Other
Postretirement Benefits" is not applicable to the Company's operations.

RECLASSIFICATION -- Certain reclassifications have been made to prior years
amounts to conform with the current period presentation.

2. NOTES PAYABLE

Notes payable are summarized as follows:

DECEMBER 31,
--------------------------
1998 1999
----------- -----------

Debentures, 8.75%, due September 30, 2002,
collateralized by irrevocable letters of credit to
pay principal and accrued interest in an amount
equal to 107% of the principal amount of the
debentures, waiver of collateral violation with bank
providing the irrevocable letters of credit only
exists through June 30, 2001 as discussed below..... $ 5,900,000 $ 5,900,000
Prior lines of credit, 8.25%, restructured to notes
payable in December 1999............................ 4,145,000 --
Notes payable to banks, interest rate at prime (8.5%
at December 31, 1999), $1,145,000 due June 30, 2001
and $3,000,000 due November 2, 2002, waiver of
collateral violation with banks only exists through
June 30, 2001 as discussed below.................... -- 4,145,000
Line of credit, interest rate at prime (8.5% at
December 31, 1999), due June 30, 2001,
collateralized by substantially all of the Company's
assets.............................................. -- 2,475,000
Note payable to the Iowa Department of Economic
Development, forgivable loan, 6%, see repayment
terms below, collateralized by certain software,
equipment and furnishings, and accounts
receivable.......................................... 250,000 250,000
Unamortized debt discount............................. -- (511,579)
----------- -----------
Total notes payable, net of discount.................. 10,295,000 12,258,421
Less current portion.................................. 4,395,000 1,750,000
----------- -----------
Long-term debt, net of discount....................... $ 5,900,000 $10,508,421
=========== ===========

The Company's debentures are due earlier, at the Company's option, if the
Company completes a public offering of its common stock at a price of at least
$8.00 per share and generates net proceeds of at least $15,000,000. The
debentures also prohibit the Company from pledging any of its existing assets to
collateralize any indebtedness without the consent of a majority of the holders
of the debentures. During 1999, the Company

F-12
67
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

obtained a waiver from the debenture holders which allows the Company to pledge
up to $3,000,000 of Company assets.

The irrevocable letters of credit related to the debentures and the prior
lines of credit, which were restructured to notes payable as discussed below,
are collateralized by a pledge of marketable securities held by the Company's
former chairman of the Board of Directors and chief executive officer. The
lenders alleged that the marketable securities were counterfeit and in December
1998 informed the Company that the Company would not be able to borrow any
additional amounts available under the lines of credit. Due to the uncertainty
regarding the validity of the pledge, the Company classified the borrowings
under the lines of credit as current at December 31, 1998.

On December 3, 1999, the lines of credit were terminated and the balances
outstanding were restructured to notes payable. Under the terms of the
restructuring agreement, the lenders agreed to waive any events of default
existing on December 3, 1999 under the lines of credit and the irrevocable
letters of credit related to the debentures through June 30, 2001. Accordingly,
these amounts have been classified as long-term at December 31, 1999.

The notes payable require repayment and either (a) the debentures must be
repaid, (b) a replacement letter of credit must be obtained or (c) cash
collateral equal to 120% of the letters of credit must be provided if before
June 30, 2001 the Company completes a strategic transaction. A strategic
transaction is defined as an initial public offering of an equity security by
the Company, a sale of substantially all of the Company's assets, or any other
strategic transaction including a merger or joint venture involving a major
component of the Company's business.

Covenants under the notes payable require, among others, that the Company
will not incur any other debt or liens except for the new bank line of credit
discussed below; not declare or pay any dividends; not redeem any capital stock;
and limit annually its capital leases, capital expenditures, and salaries of
certain employees to specified levels. The Company was in compliance with these
covenants as of December 31, 1999.

In December 1999, the Company obtained from a bank a new $2,500,000 line of
credit, which expires on June 30, 2001. A group of guarantors entered into
credit support agreements with the bank as additional collateral for the line of
credit. The Company granted to the guarantors warrants for the purchase of
500,000 shares of the Company's common stock at an exercise price of $7.50 per
share as consideration for their credit support. The value assigned to the
warrants, shown as debt discount, has been based on the estimated rate of
interest that would have been required for the line of credit if the credit
support had not been obtained. The warrants expire in December 2004. The
warrants also provide for an adjustment to the exercise price, and the number of
common shares which can be purchased, if the Company completes a public offering
of its common stock pursuant to a firm commitment at a price less than $15 per
share. The exercise price in such event will be adjusted to 50% of the public
offering price and the number of shares of common stock which can be purchased
will be equal to $3,750,000 divided by the new

F-13
68
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

exercise price. The Company also granted to the guarantors the right to name one
representative to the Company's Board of Directors. Covenants under the line of
credit and guaranty agreements require, among others, that the Company will
prepay the obligation to the extent of the proceeds from any sale of the
Company's assets or any equity or debt issuance; prepay the obligation upon any
consolidation, merger, or transfer of substantially all assets of the Company;
obtain approval before entering into capital leases above annual specified
levels; and make draws under the line of credit only in accordance with the
Company's cash flow budget. The Company was in compliance with these covenants
as of December 31, 1999.

In January 2000, the Company repaid $1,750,000 of the balance outstanding
under the line of credit as required by the cash flow budget provision of the
agreement. Accordingly, this amount has been classified as a current liability
at December 31, 1999.

During February 2000, the Company obtained final approval of the terms for
repayment of its forgivable loan with the Iowa Department of Economic
Development ("Department"). Prior to such approval, the loan was due and payable
as of June 30, 1999. The Department agreed to forgive $170,000 of principal and
$63,600 of accrued interest on the loan. Such amounts will be recorded as other
income in the first quarter of the Company's 2000 calendar year. The remaining
principal balance will be repaid, with interest at 6%, in approximately equal
monthly installments during 2002 through 2004. The forgivable loan has been
reclassified to long-term at December 31, 1999.

3. INCOME TAXES

Due to the Company's history of operating losses, a valuation allowance was
provided for the Company's net deferred tax asset at December 31, 1998 and 1999
and no tax benefit was recognized for the years ended December 31, 1997, 1998
and 1999.

F-14
69
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

The tax effects of significant items comprising the Company's net deferred
tax asset and the related valuation allowance are as follows:

DECEMBER 31,
--------------------------
1998 1999
----------- -----------

Deferred tax assets:
Accounts receivable, net of allowance................. $ 23,200 $ 64,500
Inventories........................................... 568,100
Accrued vacation pay.................................. 41,100 64,000
Accrued warranties.................................... 12,000 107,000
Nonqualified stock options............................ 358,100 660,700
Stock warrants........................................ 69,500
Other accrued liabilities............................. 15,700
Accrual to cost method adjustment..................... 296,700
Net operating loss carryforward....................... 6,429,000 7,011,000
----------- -----------
Total deferred tax assets............................. 7,743,900 7,976,700
----------- -----------
Deferred tax liabilities:
Software development costs............................ (16,700) (7,300)
Fixed assets and other intangibles.................... (36,000) (111,200)
----------- -----------
Total deferred tax liabilities........................ (52,700) (118,500)
----------- -----------
Net deferred tax asset................................ 7,691,200 7,858,200
Valuation allowance................................... (7,691,200) (7,858,200)
----------- -----------
Net deferred tax asset recognized..................... $ -- $ --
=========== ===========

As of December 31, 1999, the Company has a net operating loss carryforward
for federal and state income tax purposes of approximately $20,623,000. The net
operating loss carryforward will expire from 2008 to 2014.

4. PREFERRED STOCK

The Board of Directors has the authority to issue preferred stock in one or
more series and to determine the price, voting powers, preferences, dividend
rights, conversion rights, and other rights or restrictions without further
stockholder approval.

The Company sold 320,000 shares of Series A preferred stock in April 1993
and 282,720 shares of Series B preferred stock in June 1994 at a price of $6.25
per share. The Series A and Series B preferred stockholders are entitled
to vote with the common stock stockholders as a single class with each share of
Series A and Series B preferred stock being entitled to the number of votes
equal to the number of shares of common stock into which it is convertible. Each
share of Series A and Series B preferred stock is convertible, at the holder's
option, into 1.5625 shares of common stock. Antidilution rights also exist for
the Series A and Series B preferred stockholders.

F-15
70
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

The Series A or Series B preferred stock will also automatically convert
into common stock (a) immediately upon the closing of an initial public offering
of common stock if the aggregate proceeds are greater than or equal to
$5,000,000 or (b) upon approval of the holders of two-thirds or more of the
outstanding Series A or Series B preferred stock. No dividends are payable on
the Series A and Series B preferred stock unless the Company, in its sole
discretion, declares a dividend with respect to its common stock, or on any
series of preferred stock ranking equal to or junior to the Series A and Series
B preferred stock. Upon liquidation, dissolution, or winding up, after the
payment of any amounts in respect of any series of preferred stock entitled to a
liquidation preference over the Series A and Series B preferred stock, the
holders of the Series A and Series B preferred stock are entitled to receive an
amount per share equal to $6.25 plus any declared but unpaid dividends on such
shares, prior to any payment to the holders of the common stock. If assets
available for distribution are insufficient to pay holders of Series A and B
stock, then such holders shall share ratably in any distribution of assets of
the Company in proportion to amounts that would have been payable with respect
to their shares if all amounts were paid.

The Company sold 694,618 and 78,636 shares of Series C preferred stock
during 1997 and 1998, respectively, at a price of $7.63 per share. The holders
of the Series C preferred stock are entitled to vote, on the basis of one vote
for each share of common stock issuable upon conversion, with the holders of the
common stock, Series A preferred stock, and Series B preferred stock, on all
matters upon which shareholders have the right to vote. In addition, the
approval of the holders of at least a majority of the Series C preferred stock
will be required (i) to authorize or issue any shares of any class or series of
the Company's capital stock (or securities convertible into shares of the
Company's capital stock) having a preference as to dividends or liquidation
senior to the Series C preferred stock, (ii) to merge or consolidate with any
corporation where the surviving corporation has any class of stock that would
rank prior to the Series C preferred stock, (iii) to amend, alter or repeal any
provisions of the certificate of designation governing the Series C preferred
stock, so as to adversely affect the rights or preferences of Series C preferred
stock, (iv) to declare or pay any dividend or make any other distribution on any
class of capital stock of the Company other than a dividend paid on the Series C
preferred stock and (v) to issue any convertible debt security that provides for
the payment of interest or other distributions.

In the event of the dissolution, liquidation or winding up of the Company,
holders of the Series C preferred stock will be entitled to receive $7.63 per
share plus all accumulated and unpaid dividends, before any distribution is made
to holders of the common stock or preferred stock ranking junior to the Series C
preferred stock. The Series C preferred stock will rank on a par with the Series
A preferred stock and Series B preferred stock in the event of liquidation,
however, the Series C preferred stock is senior to the Series A and B preferred
stock with respect to dividends.

The Series C preferred stock bears dividends, cumulative whether or not
earned, at the rate of $0.534 per share per annum. Such dividends will be
payable, if and when

F-16
71
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

declared out of funds legally available, on March 31 and September 30 of each
year. Dividends not paid on the date when due will not thereafter be payable in
cash, subject to optional redemption, as described below, but shall thereafter
only be convertible into shares of common stock, as described below. The
aggregate cumulative unpaid dividends at December 31, 1999 were $862,602.

The Series C preferred stock, with an initial conversion value of $7.63 per
share, and all accumulated but unpaid dividends on the Series C preferred stock,
will be convertible, at the option of the holder at any time after issuance,
into common stock at the rate of $7.63 per common share. The conversion rate for
the Series C preferred stock is subject to adjustment from time to time in the
event of certain stock dividends, stock divisions and combinations of the common
stock, and the issuance of any common stock at a price, or of any other
securities convertible into or exercisable to purchase common stock at a price,
less than the conversion price then in effect. If the Company issues securities
at a price less than the conversion price then in effect, the conversion price
adjusts based on a weighted average of the stock outstanding. In the case of a
consolidation or merger of the Company with or into any other corporation, or in
case of any sale or transfer of all or substantially all of the assets of the
Company, a holder of Series C preferred stock is entitled, thereafter, to
receive upon conversion the consideration which the holder would have received
had he or she converted immediately prior to the occurrence of the event. The
conversion price of the Series C preferred stock at December 31, 1999 is $7.54.

The Series C preferred stock, and any dividends accumulated thereon, will
be automatically converted into common stock at the then current conversion rate
in the event of (i) the closing of an underwritten public offering of the common
stock at a price of not less than $8.00 per share that generates net proceeds to
the Company of not less than $15,000,000, or (ii) the vote of holders of at
least two-thirds of the outstanding shares of Series C preferred stock.

On or after September 30, 2004, the Company may, at its option, redeem all
or any portion of the Series C preferred stock at a cash redemption price equal
to $7.63 per share plus all accumulated but unpaid dividends to the date fixed
for redemption. In case of the redemption of less than all of the then
outstanding shares of Series C preferred stock, the Company shall effect such
redemption pro rata. Any holder of Series C preferred stock may elect to convert
such shares into common stock up to the date fixed for redemption.

Each holder of the Series A, Series B and Series C preferred stock is also
a party to a Registration Rights Agreement granting to such holder the right to
require the Company to register the common stock issuable upon conversion of the
Series A, Series B and Series C preferred stock upon completion of an initial
public offering of the Company's common stock. All expenses of the registration,
other than underwriting discounts and commissions, incurred in connection with
such registration shall be borne by the Company.

F-17
72
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

5. COMMON STOCK

Holders of common stock are entitled to one vote per share on all matters
submitted to a vote by the stockholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive ratably any dividends, as may be declared from time to time
by the Board of Directors out of funds legally available therefor, and will be
entitled to receive pro rata all assets of the Company available for
distribution, after payment of liabilities and any prior distribution rights of
preferred stock, upon liquidation.

6. STOCK OPTIONS

During April 1993, the Board of Directors adopted the 1993 Stock Incentive
Plan (the "1993 Plan"). Under the 1993 Plan, options or other awards may be
granted to purchase up to an aggregate of 500,000 shares of the Company's common
stock. During December 1995, the Company's stockholders approved the 1995 Long
Term Incentive and Stock Option Plan (the "1995 Plan"). Under the 1995 Plan,
options or other awards may be granted to purchase up to 585,345 shares of the
Company's common stock. Awards granted under the 1993 and 1995 Plans may be
options that are intended to qualify as incentive stock options, options that
are not intended to so qualify, stock appreciation rights ("SARs"), restricted
stock or performance awards. Incentive stock options may only be granted to
full-time or part-time employees; other awards may be granted to full-time or
part-time employees, officers, consultants, directors (other than nonemployee
directors) or independent contractors. A committee appointed by the Board of
Directors determines the exercise price (subject to the restriction that the
exercise price of incentive stock options must be not less than 100% of fair
market value on the date of grant), term (provided that the term of options may
not exceed ten years) and other conditions of all awards under the 1993 and 1995
Plans.

On July 20, 1998, the 1993 Stock Incentive Plan was rescinded, upon the
exchange of all outstanding options granted under the 1993 Plan for options in
an identical number, at an exercise price of $1.50 per share, and on a vesting
schedule identical to that of the options previously granted under the 1993
Plan. At the same time, the Board of Directors amended the 1995 Plan to increase
the number of shares of common stock on which options or other awards may be
exercised from 585,345 to 1,000,000. Also, on July 20, 1998, the Company
cancelled all outstanding options granted under the 1995 Plan and issued options
in an identical number, and on a vesting schedule identical to that of the
options previously granted, at an exercise price of $1.50 per share.

In September 1999, the Board of Directors amended the 1995 Plan to change
the authorized number of shares of common stock on which options or other awards
may be exercised to 2,000,000 plus shares equal to one and one-half percent of
the number of shares of common stock outstanding as of the December 31
immediately preceding the year in which such options may be granted and to
change the vesting schedule for all outstanding options and future awards of
options with 20% of the total grant to vest on the

F-18
73
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

first anniversary of the award and 1.67% of the total grant to vest each month
thereafter until fully vested.

The fair value of the Company's common stock for 1997, as determined in
good faith by the Company's Board of Directors, was equal to or below the
exercise price of options granted in 1997 and, therefore, no compensation
expense was recognized related to stock options. The fair value of the Company's
common stock as of July 20, 1998 and as of the date of other options granted
during the remainder of 1998 and through August 31, 1999, as determined in good
faith by the Company's Board of Directors, was $6.00 per share. The fair value
of the Company's common stock as of September 15, 1999, as determined by an
independent appraisal, was $7.20 per share which the Company has used to value
stock options granted from September 1, 1999 through December 31, 1999. The
Company has recognized compensation expense of $896,670 and $661,352 during 1998
and 1999 (including amounts allocated to discontinued operations of $230,400 and
$49,050), respectively, based on the vesting period of the options and the
difference between the exercise price of the options and the fair value of the
Company's common stock.

Options outstanding and exercisable at December 31, 1999 were as follows:

OPTIONS OUTSTANDING
- ---------------------------------------------------------------------
WEIGHTED
AVERAGE
REMAINING OPTIONS EXERCISABLE
CONTRACTUAL -------------------
EXERCISE PRICE SHARES LIFE (IN YEARS) SHARES
-------------- --------- --------------- -------------------

$1.50................................ 826,300 8.18 272,892
$6.00................................ 113,500 9.59 --
$7.20................................ 672,500 9.71 103,200
--------- ---- -------
1,612,300 8.91 376,092
========= ==== =======

F-19
74
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

A summary of stock option activity under the 1993 and 1995 Plans is as
follows:

WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
FAIR OPTION OPTION
OPTIONS OPTION PRICE VALUE PRICE OPTIONS PRICE
OUTSTANDING PER SHARE PER SHARE PER SHARE EXERCISABLE PER SHARE
----------- ------------ ---------- --------- ----------- ---------

Balance at December
31, 1996........... 303,645 $ 4.00 $4.00 89,900 $ 4.00
Granted at
premium......... 165,000 8.00 $ 6.00 8.00
Cancelled.......... (76,495) 4.00-8.00 5.05
---------
Balance at December
31, 1997........... 392,150 4.00-8.00 5.48 114,200 4.63
Cancelled.......... (392,150) 4.00-8.00 5.48
Reissued at
discount........ 392,150 1.50 6.00 1.50
Granted at
discount........ 210,000 1.50 6.00 1.50
Cancelled.......... (48,500) 1.50 1.50
---------
Balance at December
31, 1998........... 553,650 1.50 1.50 199,260 1.50
Granted at
discount........ 440,050 1.50 6.00 1.50
Granted at
market.......... 98,500 6.00 6.00 6.00
Granted at
discount........ 15,000 6.00 7.20 6.00
Granted at
market.......... 672,500 7.20 7.20 7.20
Exercised.......... (4,750) 1.50 1.50
Cancelled.......... (162,650) 1.50 1.50
---------
Balance at December
31, 1999........... 1,612,300 1.50-7.20 4.19 376,092 3.07
=========

At December 31, 1999, an additional 419,646 are available for future grants
under the 1995 Plan.

F-20
75
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

The Board of Directors also granted to the members of the Company's former
Scientific Advisory Board options to purchase a total of 25,000 shares of the
Company's common stock at a purchase price of $4.00 per share which expire in
August 2000.

During December 1996, the Company's stockholders approved the Nonemployee
Director Stock Option Plan (the "Directors' Plan"). The Company has reserved
75,000 shares of common stock for issuance upon exercise of options granted
under the Directors' Plan. Only nonemployee directors of the Company are
eligible to participate in the Directors' Plan and only non-qualified stock
options may be granted. Each director eligible to participate in the Directors'
Plan is automatically granted an option to purchase 5,000 shares of common stock
on the date such person first becomes a director; this option vests in three
equal installments beginning on the first anniversary of grant. Each director
eligible to participate in the Directors' Plan who has served since the date of
the last annual meeting of stockholders and will continue to serve is
automatically granted an option to purchase 5,000 shares of common stock on the
date of each annual meeting of stockholders; this option vests in its entirety
on the date one year after the date of grant. All options granted under the
Directors' Plan have terms of ten years and a per share exercise price equal to
the fair market value of a share of common stock on the date of grant. At
December 31, 1999, options to purchase 15,000 shares of common stock have been
granted under the Directors' Plan at an exercise price of $4.00-$6.00, with
8,333 shares exercisable at December 31, 1999.

F-21
76
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

7. COMMON STOCK WARRANTS

A summary of common stock warrant activity is summarized as follows:

WEIGHTED
AVERAGE
WARRANT WARRANT
WARRANT PRICE PRICE
SHARES PER SHARE PER SHARE
------- --------- ---------

Balance at December 31, 1996................... 1,374,750 $ 4.00 $4.00
Warrants granted to six employees and
consultants in connection with the merger
with Ethos Corporation (see Note 11)...... 312,000 8.00 8.00
---------
Balance at December 31, 1997................... 1,686,750 4.00-8.00 4.74
Warrants granted to the Company's former
chief executive officer in consideration
of his pledge of marketable securities as
security for the irrevocable letter of
credit, which serves as collateral for the
debentures (Note 2)....................... 500,000 8.00 8.00
Warrants granted to the Company's former
chief executive officer in consideration
of his pledge of marketable securities as
collateral for prior bank lines of credit
(Note 2).................................. 100,000 8.00 8.00
Warrants granted to placement agent in
consideration of services provided related
to the debenture/preferred stock private
placement................................. 30,139 8.00 8.00
Warrants expired............................. (10,000) 4.00 4.00
Warrants exercised........................... (120,000) 4.00 4.00
---------
Balance at December 31, 1998................... 2,186,889 4.00-8.00 5.72
Warrants granted to the Company's former
chief executive officer in consideration
of his pledge of marketable securities as
collateral for prior bank lines of credit
(Note 2).................................. 100,000 8.00 8.00
Warrants granted to financial consultant for
services rendered......................... 30,000 4.00 4.00
Warrants granted to consultant for consulting
contract.................................. 125,000 6.00 6.00
Warrants granted for guarantee on new line of
credit (Note 2)........................... 500,000 7.50 7.50
Warrants expired............................. (93,750) 4.00 4.00
Warrants exercised........................... (125,000) 4.00 4.00
Warrants to the Company's former chief
executive officer cancelled............... (912,500) 4.00-8.00 7.07
---------
Balance at December 31, 1999................... 1,810,639 4.00-8.00 5.86
=========

F-22
77
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

At December 31, 1999, the weighted average remaining life of the warrants
is 3.9 years and 1,810,639 warrants were exercisable at a weighted average price
of $5.86 per share. The warrants also provide for registration rights similar to
those granted the preferred stockholders (see Note 4) and antidilution rights.
The Company has valued warrants issued to consultants during 1999 at
approximately $280,000 and has recognized expense over the term of the
consulting agreements of $197,458 for the year ended December 31, 1999 for the
difference between the exercise price of the warrants and the fair value of
warrants granted.

The warrants exercised during 1998 and 1999 provided for a cashless
exercise under which the warrant holder received 40,000 and 41,667 shares of
common stock, respectively, based on the $6.00 per share fair value of the
Company's common stock.

In December 1999, the Company entered into a settlement and general release
agreement with its former chairman of the board and chief executive officer
("executive"). The agreement cancels warrants held by the executive to purchase
700,000 and 212,500 shares of the Company's stock at $8.00 and $4.00 per share,
respectively (the executive retained 500,000 warrants at $4.00 per share);
cancels the executive's right to receive 300,000 of additional warrants at an
exercise price of $8.00 per share (100,000 of which would have been granted on
January 1, 2000); requires the Company to pay the executive $60,000 at the
earliest of an initial public offering or June 30, 2001 in consideration of the
executive entering into the agreement; and provides both the Company and the
executive a general release from all claims between the parties. The executive
is also required to place all common stock and Series B preferred stock of the
Company owned by the executive, and any shares of stock in the Company acquired
by the executive upon exercise of warrants, into a voting trust controlled by an
independent third party. The agreement has been filed with the bankruptcy court
as the executive is in involuntary bankruptcy, however, a creditor of the
executive has filed a motion in the bankruptcy proceedings to set aside the
settlement agreement.

8. LEASES

The Company leases its offices and certain equipment under operating
leases. Rental expense incurred under operating leases was $390,534, $398,500
and $401,769 for the years ended December 31, 1997, 1998, and 1999,
respectively.

In October 1993, the Company entered into an operating lease with Liberty
Growth, L.C., ("Liberty") for the lease of a 25,600 square foot building (the
"Facility") which was completed in July 1994. Liberty erected the Facility in
accordance with plans and specifications agreed upon between Liberty and the
Company and provided furniture, fixtures, and equipment in the Facility as
specified in the lease. The lease was for an initial term of five years,
beginning September 1994, with options given to the Company to extend for two
additional terms of five years each. The Company exercised the first renewal
option in September 1998. The monthly rental upon renewal will be adjusted to
reflect Liberty's actual mortgage interest cost as discussed below. The lease
provides that the Company will pay for all taxes, insurance, utilities,
alterations and improvements, and

F-23
78
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

repair and maintenance on or with respect to the Facility, furniture, fixtures
and equipment. The monthly rental of $23,248 effective March 1999 ($23,840
previously) is the sum of the following:

a. payments of principal (based on a 20 year loan amortization period)
and interest on Liberty's mortgage loan on the Facility (the "Mortgage
Loan"); the interest rate under the mortgage loan is 8% for the first
five years and on the fifth and tenth anniversaries of the loan is
subject to adjustment by the bank based on comparable interest rates
with a 7% minimum and 12% maximum rate;

b. the amount of the annual land lease rental on the underlying real
estate; and

c. an amount equal to 14% times the difference between (i) the cost to
Liberty of all improvements constructed or purchased by Liberty and
the furniture, fixtures and equipment, and (ii) the original
principal amount of the Mortgage Loan.

Under the terms of the lease, the Company has an option, exercisable
effective January 1, 1998 and continuing through the termination or expiration
of the lease, to purchase the Facility and furniture, fixtures and equipment at
a purchase price to be determined by appraisal, but in no event less than
Liberty's cost as established for purposes of calculating the rent payable under
the lease.

In May 1999, the Company subleased part of the building rented from
Liberty. The sublease is for an eighteen month term, terminating October 31,
2000. Sublease receipts were $50,400 the year ended December 31, 1999.

The Company's capital lease, its estimated aggregate minimum annual
payments under all operating leases with initial noncancellable lease terms in
excess of one year and its noncancellable sublease receipts are as follows as of
December 31, 1999:

NONCANCELLABLE NONCANCELLABLE
CAPITAL OPERATING SUBLEASE
YEAR ENDED DECEMBER 31, LEASES LEASES RECEIPTS
----------------------- ------- -------------- --------------

2000....................................... $ 9,529 $ 687,003 $72,000
2001....................................... 9,529 390,639 --
2002....................................... 9,529 282,435 --
2003....................................... 9,529 278,976 --
2004....................................... 6,353 185,984 --
------- ---------- -------
Minimum lease payments..................... 44,469 $1,825,037 $72,000
========== =======
Less amounts representing interest......... 10,388
-------
Present value of minimum lease payments.... 34,081
Current portion of capital lease
obligations.............................. 5,821
-------
Capital lease obligations due after one
year..................................... $28,260
=======

F-24
79
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

9. CONTINGENT LIABILITIES

On June 10, 1994, the Company entered into an Agreement For Private
Development with the City of Coralville, Iowa (the "City"). The Company and
Liberty jointly received a $175,000 Economic Development Grant from the City
during 1994. According to the agreement, these proceeds were used by Liberty to
reduce the costs of the building (see Note 8). The Company pays property taxes
to the City based on the assessed value of the property and the City will use
such property taxes to pay debt service on the bonds which were issued by the
City for this grant. The Company has guaranteed that commencing January 1, 1998
to January 1, 2004, it will make every effort to maintain an employment level of
at least 100 full time jobs. The Company at December 31, 1999 maintained an
employment level of 79 full time jobs. If the Company is in default of any terms
of the agreement, the City may take action to recover the grant paid to the
Company. As of December 31, 1999, management believes that the Company was in
compliance with the terms of the agreement. The Company anticipates that its
property tax payments will be sufficient to pay the debt service costs on the
bonds.

On June 30, 1994, the Company entered into an Industrial New Jobs Training
Agreement with Kirkwood Community College ("Kirkwood"). The term of the
agreement is ten years. Based on an estimate of new jobs that the Company would
create ("New Employees"), Kirkwood issued bonds in the amount of $200,000 and
the proceeds were to be used to reimburse approximately $150,000 of the
Company's training costs incurred between June 30, 1994 and August 1, 1997 with
the remaining $50,000 to be used by Kirkwood to cover administrative costs of
the agreement. Any amounts received by the Company under this agreement are to
be repaid using a portion of the New Employees' state income taxes which have
been withheld by the Company ("New Jobs Withholding Credits"). The New Jobs
Withholding Credits are credits available under the New Jobs Training Act of the
State of Iowa and are not the result of any additional costs incurred by the
Company, but are a defined portion of the Company's current tax withholding
obligation. The Company will make repayments by paying New Jobs Withholding
Credits to Kirkwood for ten years and Kirkwood will use the New Jobs Withholding
Credits to pay the debt service on the bonds. As of December 31, 1999, the
Company has received $77,224 from Kirkwood. Kirkwood has incurred $47,353 of
administrative costs, and the Company has repaid $145,455 through New Jobs
Withholding Credits.

If the Company is in default of any terms of the agreement, Kirkwood may
take action to collect any payments due under the agreement. Kirkwood has a lien
on certain Company assets including accounts receivable, equipment, patents and
contract rights. The lien is subordinated to the security interests granted
under the notes payable to the Department.

F-25
80
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

10. MAJOR CUSTOMER SALES

Sales to major customers from continuing operations, comprising 10% or more
of total revenue for the year were as follows:

YEARS ENDED
DECEMBER 31,
--------------------------
1997 1998 1999
---- ---- ----

Customer A............................................... -- 10% 14%
Customer B............................................... -- 10 --
Customer C............................................... 25% 16 --

11. MERGER WITH ETHOS CORPORATION

On March 6, 1997 the Company negotiated an agreement and plan of merger
with Ethos Corporation ("Ethos"), a California corporation engaged in Internet
publication and interactive financial services, to acquire all of the
outstanding shares of common stock of Ethos in exchange for 289,701 shares of
the Company's common stock. Also, the holders of Ethos' redeemable preferred
stock were paid $100,000 for the redemption of such preferred stock. The Company
also entered into certain employment/consulting agreements and noncompetition
agreements with Ethos' employees and consultants which involved the issuance of
312,000 warrants to purchase the Company's common stock exercisable at $8.00 per
share, and the issuance of 65,000 options to purchase the Company's common stock
exercisable at $8.00 per share, all of which will vest over one to five year
periods depending on the agreement. The transaction was accounted for as a
pooling of interests. The financial statements for periods prior to the merger
have been restated to include the combined financial information of the
companies for all periods presented. The following data summarizes the separate
results of operations of the Company and Ethos for the period before the
combination was consummated.

REVENUES LOSS
FROM FROM
CONTINUING CONTINUING
OPERATIONS OPERATIONS
---------- ----------

Period from January 1, 1997 to March 6, 1997:
Stockpoint, Inc........................................ $28,620 $(544,717)
Ethos Corporation...................................... $74,442 $ (6,554)

12. 401(k) PLAN

The Company maintains a 401(k) retirement plan covering substantially all
of its employees. The Company will match an employee's contribution to the plan
up to 2% of the employee's salary. The Company contributed $49,156 and $47,428
to the plan under the matching program for the years ended December 31, 1998 and
1999, respectively. There were no Company contributions to the plan for the year
ended December 31, 1997.

F-26
81
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

13. DISCONTINUED OPERATIONS

On May 28, 1999, the Company sold the technology and operational assets
related to products sold to the steelmaking industry (metals segment) for
$750,000. The Company also entered into a royalty agreement with the buyer
whereby royalties, ranging from 6% to 10%, will be paid on sales or licenses of
the software only portions of certain products. Royalties will be paid for 10
years or until $3,000,000 is paid. The asset purchase agreement was retroactive
to April 2, 1999.

The accompanying statements of operations have been reclassified so that
the results for the metals segment's operations are classified as discontinued
operations for all periods presented. The assets and liabilities of the
discontinued operations have been reclassified in the balance sheet as "net
assets of discontinued operations." As the sale closed less than a year
subsequent to December 31, 1998, the net assets of the discontinued operations
have been classified as current assets as of December 31, 1998. The statements
of cash flows and related notes to the consolidated financial statements have
also been reclassified to conform to the discontinued operations presentation.

Summary operating results of the discontinued operations are as follows:

YEARS ENDED DECEMBER 31,
--------------------------------------
1997 1998 1999
---------- ---------- ----------

Revenues.................................... $1,708,427 $2,160,104 $1,747,809
Operating expenses.......................... 2,114,149 2,517,050 1,400,134
---------- ---------- ----------
Income (loss) from discontinued
operations................................ $ (405,722) $ (356,946) $ 347,675
========== ========== ==========

A summary of the net assets of the discontinued operations are as follows:

DECEMBER 31,
1998
------------

Current assets:
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................. $126,831
Inventories............................................... 395,908
Prepaid expenses.......................................... 1,000
--------
Net current assets..................................... 523,739
--------
Software and equipment, net................................. 198,895
Patents, net................................................ 68,400
Software development costs, net............................. 13,167
--------
Net noncurrent assets.................................. 280,462
--------
Net assets............................................. $804,201
========

F-27
82
STOCKPOINT, INC.
(FORMERLY NEURAL APPLICATIONS CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999

14. PRO FORMA INFORMATION (UNAUDITED)

The pro forma stockholders' deficiency information presented as of December
31, 1999 has been prepared assuming that the Company's preferred stock had been
converted into common stock as of December 31, 1999 which conversion will occur
automatically upon completion of the initial public offering contemplated in
this prospectus. The pro forma income (loss) per common share information
presented for the year ended December 31, 1999 has been prepared assuming that
1) the Company's preferred stock had been converted into common stock as of
January 1, 1999 or as of their issuance date for shares of Series C preferred
stock issued in lieu of dividends resulting in the elimination of dividends and
2) debt outstanding during 1999 that is expected to be repaid with a portion of
the proceeds from this offering had been repaid as of January 1, 1999 resulting
in reduced interest expense. The Company's pro forma net loss per share is
calculated as follows:

YEAR ENDED
1999
-----------

Pro forma net loss:
Historical loss from continuing operations................ $(3,947,885)
Exclude interest on debt to be repaid..................... 1,064,420
-----------
Loss from continuing operations........................... (2,883,465)
Income from discontinued operations....................... 780,808
-----------
Net loss.................................................. $(2,102,657)
===========
Pro forma basic and diluted income (loss) per common share:
Loss from continuing operations........................... $ (0.73)
Income from discontinued operations....................... 0.20
-----------
Net loss.................................................. $ (0.53)
===========
Weighted average common shares outstanding -- historical.... 2,141,404
Preferred stock converted into common shares -- pro forma... 1,806,377
-----------
Weighted average common shares outstanding -- pro forma..... 3,947,781
===========

15. SUBSEQUENT EVENT (UNAUDITED)

The Company entered into an additional $500,000 line of credit with a bank
on March 30, 2000. The line of credit is collateralized by substantially all of
the Company's assets. The line of credit bears interest at the prime rate and
expires on June 30, 2001. A group of guarantors entered into credit support
agreements with the bank as additional collateral for the line of credit. The
Company granted to the guarantors warrants to purchase 100,000 shares of the
Company's common stock at an exercise price of $10.00 per share as consideration
for their credit support.

* * * * *

F-28
83

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________ SHARES

[LOGO] STOCKPOINT

COMMON STOCK

----------------
PROSPECTUS
----------------

ROTH CAPITAL PARTNERS, INC.

__________________, 2000

UNTIL ________, 2000, THE 25TH DAY AFTER THE DATE OF THIS PROSPECTUS, ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

- --------------------------------------------------------------------------------

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses payable by
Stockpoint in connection with the registration of the common stock hereunder.
All amounts are estimated, except for the SEC registration fee and the NASD
filing fee.

SEC registration fee............................................. $ 11,880
NASD filing fee.................................................. 5,000
Nasdaq National Market listing fee............................... 70,000
Legal fees and expenses.......................................... 150,000
Accountants' fees and expenses................................... 70,000
Printing expenses................................................ 150,000
Blue sky fees and expenses....................................... 5,000
Transfer Agent and Registrar fees and expenses................... 5,000
Miscellaneous.................................................... 33,120
--------
Total...................................................... $500,000
========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors and any corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act. Our Amended and Restated Bylaws provide for indemnification of
such persons for such liabilities in such manner under such circumstances and to
such extent as permitted by the Delaware General Corporation Law. We have also
purchased directors and officers liability insurance, which covers matters
arising under the Securities Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since January 1997, we have issued and sold the following securities
that were not registered under the Securities Act:

(1) From January 1997 through March 2000, we granted options to
purchase an aggregate of 1,513,849 shares of common stock under
our stock option plans to executive officers, directors and
employees.

(2) In March 1997, in connection with the acquisition of Ethos
Corporation, we issued an aggregate of 289,701 shares of common
stock to 12 shareholders of Ethos and warrants to purchase an
aggregate of 312,000 shares of common stock to six employees and
consultants.

(3) Between November 1997 and January 1998, we sold to accredited
investors an aggregate of 773,255 shares of Series C convertible
preferred stock for an aggregate purchase price of $5,900,000 and
senior secured debentures in an aggregate principal amount of
$5,900,000. Upon the closing of this offering, all of the
outstanding shares of Series C convertible preferred stock will
convert into an aggregate of 897,063 shares of common stock.

(4) In April 1998, we issued warrants to purchase an aggregate of
30,139 shares of common stock at an exercise price of $8.00 per
share to Donald Muller and Securities Corporation of Iowa for
services provided in connection with the sale of the Series C
convertible preferred stock.

II-1

(5) In April 1998, we issued warrants to purchase an aggregate of
500,000 shares of common stock at an exercise price of $8.00 per
share to Robert Staib in consideration of his personal guarantee
of a letter of credit supporting our senior secured debentures and
pledge of marketable securities as collateral.

(6) We issued warrants to purchase an aggregate of 312,500 shares of
common stock to John Pappajohn in consideration of his personal
guarantee of our credit agreements from May 1995 through June
1996. In June and September 1998, we sold 40,000 shares of common
stock to John Pappajohn upon the cashless exercise of his
outstanding warrants.

(7) In November 1998 and November 1999, we issued to Robert Staib
warrants to purchase an aggregate of 200,000 shares of common
stock at an exercise price of $8.00 per share in consideration of
his guarantee and pledge relating to the letter of credit
supporting our outstanding debentures. The warrants were
subsequently canceled under the terms of a settlement agreement in
December 1999.

(8) In March 1999, we issued warrants to purchase an aggregate of
30,000 shares of common stock at an exercise price of $4.00 per
share to Dominion & Co. for consulting services provided.

(9) In August 1999, we issued warrants to purchase an aggregate of
125,000 shares of common stock at an exercise price of $6.00 per
share to Equity Dynamics, Inc. under the terms of a consulting
agreement. John Pappajohn is a principal of Equity Dynamics, Inc.

(10) In September 1999, we sold an aggregate of 41,667 shares of common
stock to John Pappajohn upon the cashless exercise of his
outstanding warrants.

(11) In connection with a bridge financing completed in December 1999,
we issued warrants to purchase an aggregate of 500,000 shares of
common stock at an exercise price of $7.50 per share, subject to
adjustment, to eight investors in consideration of their
guarantees and pledges.

(12) In connection with a bridge financing completed in March 2000, we
issued warrants to purchase an aggregate of 100,000 shares of
common stock at an exercise price of $10.00 per share, subject to
adjustment, to 3 investors in consideration of their guarantees
and pledges.

The sale and issuance of securities described above were deemed to be
exempt from registration under the Securities Act in reliance on Section 4(2) of
the Securities Act, Regulation D promulgated thereunder or Rule 701 promulgated
under Section 3(b) of the Securities Act, as transactions by an issuer not
involving a public offering or transactions pursuant to compensatory benefit
plans and contracts relating to compensation as provided under Rule 701. The
recipients of securities in each transaction represented their intentions to
acquire the securities for investment purposes only and not with a view to or
for sale in connection with any distribution thereof. All recipients either
received or had access to, through employment or other relationships with
Stockpoint, adequate information about us.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

NUMBER DESCRIPTION
------ -----------
1.1 Form of Underwriting Agreement.

2.1 Asset Purchase Agreement dated as of April 2, 1999 among
Systems Alternatives, Inc., Registrant and The David J. Joseph
Company.

2.2 Amendment dated as of May 25, 1999 to the Asset Purchase
Agreement dated as of April 2, 1999 among Systems
Alternatives, Inc., Registrant and The David J. Joseph
Company.

3.1 Amended and Restated Certificate of Incorporation of the
Registrant.

II-2

3.2 Certificate of Amendment of Certificate of Incorporation of
the Registrant.

3.3 Amended and Restated Bylaws of the Registrant.

4.1 Specimen of Common Stock Certificate.

4.2 Registration Rights Agreement dated as of August 15, 1997
among Registrant and the Purchasers named therein.

4.3 Trust Indenture dated as of August 1, 1997 between Registrant
and First Trust & Savings Bank.

4.4 Robert B. Staib Voting Trust dated December 3, 1999.

4.5 Master Agreement dated as of December 3, 1999 among Registrant
and John Pappajohn, Gerald M. Kirke, Iowa Farm Bureau
Federation, Derace Schaffer, Matthew P. Kinley, Dominion
Securities Inc., Michael J. Richards, Joseph Dunhan as the
Guarantors, and Equity Dynamics, Inc., as the Agent for the
Guarantors.

4.6 Form of Stock Purchase Warrant issued December 3, 1999.

4.7 Registration Rights Agreement dated as of December 3, 1999 by
and among the Registrant and the Purchasers listed therein.

4.8 Master Agreement dated as of March 30, 2000 among Registrant
and Zeke Investment Partners, Matthew P. Kinley, Joseph Dunham
as the Guarantors, and Equity Dynamics, Inc., as the Agent for
the Guarantors.

4.9 Form of Stock Purchase Warrant issued December 3, 1999.

4.10 Registration Rights Agreement dated as March 30, 2000 by and
among the Registrant and the Purchasers listed therein.

4.11 Form of Lock-up Agreement.

5.1* Opinion of Dorsey & Whitney LLP.

10.1 1995 Long-Term Incentive and Stock Option Plan.

10.2 1995 Nonemployee Director Stock Option Plan.

10.3 Employment Agreement, dated December 20, 1999, between
Registrant and William E. Staib.

10.4 Employment Agreement, dated December 20, 1999, between
Registrant and Timothy S. Yamauchi.

10.5 Employment Agreement, dated December 20, 1999, between
Registrant and Luan Cox.

10.6 Employment Agreement, dated December 20, 1999, between
Registrant and L. Christopher Dominguez.

10.7 Sublease dated May 24, 1999 between Registrant and Systems
Alternatives International LLC for office space located at
2600 Crosspark Road, Coralville, Iowa.

10.8 Lease dated September 30, 1999 between The Robert Dollar
Building Associates, Ltd. and Registrant for office space
located at 311 California Street, San Francisco, California.

10.9 Consulting Agreement dated August 24, 1999 between Registrant
and Equity Dynamics, Inc.

10.10 Master Note dated as of November 28, 1997 of Registrant in
favor of The Northern Trust Company.

10.11 Master Note dated as of September 14, 1998 of Registrant in
favor of The Northern Trust Company.

10.12 Reimbursement and Subordination Agreement dated as of August
1, 1997 between Robert B. Staib and Registrant.

II-3

10.13 Indemnification and Hold Harmless Agreement dated February 27,
1996 between Robert B. Staib and Registrant.

10.14 Amendment dated August 1, 1997 to Indemnification and Hold
Harmless Agreement dated February 27, 1996 between Robert B.
Staib and Registrant.

10.15 Restructuring Agreement dated as of December 3, 1999 among
Registrant, The Northern Trust Company and Iowa State Bank &
Trust.

10.16 S&P ComStock Information Distribution License Agreement dated
September 23, 1999 between S&P ComStock, Inc. and Registrant.

10.17 Employment Agreement dated March 1, 2000 between Registrant
and Scott D. Porter.

10.18 First Amendment to Restructuring Agreement dated as of March
29, 2000 among the Registrant, The Northern Trust Company and
Iowa State Bank & Trust.

10.19 Settlement Agreement and General Release dated December 3,
1999, by and between Robert B. Staib and the Registrant.

23.1 Consent of Deloitte & Touche LLP.

23.2* Consent of Dorsey & Whitney LLP (included in Exhibit 5.1).

24.1 Power of Attorney.

27.1 Financial Data Schedule.

- ---------------
* To be filed by amendment.

(b) Financial Statement Schedules

Not applicable.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement certificates
in those denominations and registered in those names as required by the
underwriters to permit prompt delivery to each purchaser.

The undersigned registrant hereby undertakes that:

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

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

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

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Coralville,
State of Iowa, on March 30, 2000.

Stockpoint, Inc.

By: /s/ William E. Staib
____________________________________
William E. Staib
Chief Executive Officer and Director

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on March 30, 2000 by the following
persons in the capacities indicated:

SIGNATURE TITLE
--------- -----

/s/ William E. Staib
_____________________________________ Chief Executive Officer and Director
William E. Staib (principal executive director)

/s/ Scott D. Porter
_____________________________________ Chief Financial Officer (principal
Scott D. Porter financial and accounting officer)

*
_____________________________________ Chairman of the Board of Directors
Harry O. Heffer

*
_____________________________________ Director
David G. Sengpiel

/s/ William E. Staib
*By ___________________________________
Attorney-in-Fact

II-5

EXHIBIT INDEX

NUMBER DESCRIPTION PAGE
- ------ ----------- ----

1.1 Form of Underwriting Agreement.

2.1 Asset Purchase Agreement dated as of April 2, 1999 among
Systems Alternatives, Inc., Registrant and The David J. Joseph
Company.

2.2 Amendment dated as of May 25, 1999 to the Asset Purchase
Agreement dated as of April 2, 1999 among Systems Alternatives,
Inc., Registrant and The David J. Joseph Company.

3.1 Amended and Restated Certificate of Incorporation of the
Registrant.

3.2 Certificate of Amendment of Certificate of Incorporation of the
Registrant.

3.3 Amended and Restated Bylaws of the Registrant.

4.1 Specimen of Common Stock Certificate.

4.2 Registration Rights Agreement dated as of August 15, 1997 among
Registrant and the Purchasers named therein.

4.3 Trust Indenture dated as of August 1, 1997 between Registrant
and First Trust & Savings Bank.

4.4 Robert B. Staib Voting Trust dated December 3, 1999.

4.5 Master Agreement dated as of December 3, 1999 among Registrant
and John Pappajohn, Gerald M. Kirke, Iowa Farm Bureau
Federation, Derace Schaffer, Matthew P. Kinley, Dominion
Securities Inc., Michael J. Richards, Joseph Dunham as the
Guarantors, and Equity Dynamics, Inc., as the Agent for the
Guarantors.

4.6 Form of Stock Purchase Warrant issued December 3, 1999.

4.7 Registration Rights Agreement dated as of December 3, 1999 by
and among the Registrant and the Purchasers listed therein.

4.8 Master Agreement dated as of March 30, 2000 among Registrant and
Zeke Investment Partners, Matthew P. Kinley, Joseph Dunham as the
Guarantors, and Equity Dynamics, Inc., as the Agent for the
Guarantors.

4.9 Form of Stock Purchase Warrant issued March 30, 2000.

4.10 Registration Rights Agreement dated as March 30, 2000 by end among
the Registrant and the Purchasers listed therein.

4.11 Form of Lock-up Agreement.

5.1* Opinion of Dorsey & Whitney LLP.

10.1 1995 Long-Term Incentive and Stock Option Plan.

10.2 1995 Nonemployee Director Stock Option Plan.

10.3 Employment Agreement, dated December 20, 1999, between
Registrant and William E. Staib.

10.4 Employment Agreement, dated December 20, 1999, between
Registrant and Timothy S. Yamauchi.

10.5 Employment Agreement, dated December 20, 1999, between
Registrant and Luan Cox.

10.6 Employment Agreement, dated December 20, 1999, between
Registrant and L. Christopher Dominguez.

II-6

10.7 Sublease dated May 24, 1999 between Registrant and Systems
Alternatives International LLC for office space located at 2600
Crosspark Road, Coralville, Iowa.

10.8 Lease dated September 30, 1999 between The Robert Dollar
Building Associates, Ltd. and Registrant for office space
located at 311 California Street, San Francisco, California.

10.9 Consulting Agreement dated August 24, 1999 between Registrant
and Equity Dynamics, Inc.

10.10 Master Note dated as of November 28, 1997 of Registrant in
favor of The Northern Trust Company.

10.11 Master Note dated as of September 14, 1998 of Registrant in
favor of The Northern Trust Company.

10.12 Reimbursement and Subordination Agreement dated as of August 1,
1997 between Robert B. Staib and Registrant.

10.13 Indemnification and Hold Harmless Agreement dated February 27,
1996 between Robert B. Staib and Registrant.

10.14 Amendment dated August 1, 1997 to Indemnification and Hold
Harmless Agreement dated February 27, 1996 between Robert B.
Staib and Registrant.

10.15 Restructuring Agreement dated as of December 3, 1999 among
Registrant, The Northern Trust Company and Iowa State Bank &
Trust.

10.16 S&P ComStock Information Distribution License Agreement dated
September 23, 1999 between S&P ComStock, Inc. and Registrant.

10.17 Employment Agreement dated March 1, 2000 between Registrant and
Scott D. Porter.

10.18 First Amendment to Restructuring Agreement dated as of March
29, 2000 among the Registrant, The Northern Trust Company and
Iowa State Bank & Trust.

10.19 Settlement Agreement and General Release dated December 3,
1999, by and between Robert B. Staib and the Registrant.

23.1 Consent of Deloitte & Touche LLP.

23.2* Consent of Dorsey & Whitney LLP (included in Exhibit 5.1).

24.1 Power of Attorney.

27.1 Financial Data Schedule.

- ------------------
* To be filed by amendment.

II-7