Form 10-KSB
                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

(Mark One)
[X] Annual report under section 13 or 15(d) of the Securities Exchange Act
    of 1934 For the fiscal year ended December 31, 2001.

[ ] Transition report pursuant section 13 or 15(d) of the Securities Exchange
    Act of 1934 For the transition period from ____________ to _____________

Commission file number: 0-23687

                       Stockgroup Information Systems Inc.
        (Exact name of small business issuer as specified in its charter)

           Colorado                                             84-1379282
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

    SUITE 500 - 750 W PENDER STREET
VANCOUVER BRITISH COLUMBIA CANADA V6C 2T7                            A2
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number, (604) 331-0995

                   Former name: Stockgroup.com Holdings, Inc.
             (Former name or address, if changed since last report)

Check whether the issuer
(1) filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes: [X]  No: [_]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year: $2,857,151

The aggregate market value of common equity held by non-affiliates of the
registrant as of March 27, 2002 was $3,862,815

The number of shares outstanding of the registrant's common equity, as of March
27, 2002 was 13,795,768.

Documents incorporated by reference: none

Transitional Small Business Disclosure Format (check one):Yes.[]; No [x]

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


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                       STOCKGROUP INFORMATION SYSTEMS INC.

                                   FORM 10-KSB

                   For The Fiscal Year Ended December 31, 2001

                                      INDEX



PART I.........................................................................3
Item 1.  Business..............................................................3
Item 2.  Description of Property...............................................7
Item 3.  Legal Proceedings.....................................................8
Item 4.  Submission of Matters to a Vote of Security Holders..................9
PART II.......................................................................9
Item 5.  Market for Registrant's Common Stock and Related Stockholder
         Matters..............................................................9
Item 6.  Management's Discussion and Analysis of Results of Operations
         and Financial Condition..............................................10
Item 7.  Financial Statements and Supplementary Data..........................19
Part III......................................................................48
Item 9.  Directors, executive officers, promoters and control persons;
         compliance with section 16(a) of the exchange act....................48
Item 10. Executive Compensation...............................................50
Item 11. Security Ownership of Certain Beneficial Owners and Management.......52
Item 12. Certain Relationships and Related Transactions.......................53
Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....53
Signatures....................................................................55


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PART I

Item 1. Business

GENERAL

Stockgroup Information Systems Inc. ("Stockgroup" or the "Company") is a
financial media and technology company. Its revenue streams for 2001 can be
categorized into three broad areas:

-    Financial Software (Tools) and Content Systems,

-    Public Company Solutions, and

-    E-Business Solutions.

See PRODUCTS AND SERVICES below for a full description of these three revenue
streams. The clients for Financial Software and Content Systems are primarily
enterprise companies from many different markets, such as media, banks and
credit unions, stock brokerages, insurance, and others. Public Company Solutions
are awareness and disclosure products that are purchased, as the name implies,
by public companies in all industries. Stockgroup's E-Business Solutions revenue
stream is from developing larger internet financial applications on a custom
basis such as a financial community or portal. It was concluded in early 2001
that the Financial Software and Content Systems and Public Company Solutions
have greater potential for profitability, so E-Business Solutions has been
phased out of the revenue mix during 2001.

CORPORATE BACKGROUND

Stockgroup is a United States publicly traded company. From its head office in
Vancouver, Stockgroup operates branch offices in San Francisco and Toronto.

Stockgroup operated from 1995 to 1997 as a profitable financial Internet
technology and media company that offered proprietary financial news and tools
to investors and companies.

The Company used its experience and the funds from a public offering in spring
1999 to provide the foundation for the development and initial marketing of its
products. In October 1999 it launched Smallcapcenter.com. At that time it was
widely believed that a subscription/advertising model centering around
Smallcapcenter was viable. While parts of this business model did not prove to
be profitable, the exercise of building Smallcapcenter and its related
investment tools gave Stockgroup a strong foundation of skills and a suite of
products to sell commercially. Smallcapcenter is still a high-traffic and
well-maintained portal for the investment community, and its drawing power is a
key driver to many of Stockgroup's investor awareness products. It also serves
as an excellent development and testing ground for new financial software tools
being developed by the Company on a day-to-day basis.

From late 1999 to early 2001 Stockgroup was hired to create several large
enterprise web sites for different clients on a contract basis. These were large
contracts, and added a significant amount of revenue to the Company, but they
also added instability in the Company's cost structure. In early 2001 it was
decided that this E-Business Solutions division would be de-emphasized in favour
of other areas with more profit potential, namely Financial Software and Content
Systems and Public Company Solutions (as described in the PRODUCTS AND SERVICES
section below).

From 2000 to 2001, Stockgroup expanded its awareness and disclosure product line
to include Sector Supplements, and automated investor relations web page tools
such as the IntegratIR. The Company already had a large public company customer
base, so the transition into this area was a natural extension of the Company's
core competencies.

Stockgroup entered the Financial Software and Content Systems market late in
2000 by licensing its proprietary financial software tools, content and
applications to customers


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that need to offer financial information to their customers or improve their
content offering. The Company had access to a wide array of customers through
its internal sales team as well as its reseller channels. Stockgroup's software
content model is attractive to customers because it is a comprehensive and cost
effective alternative to in-house development.

Early in 2001, as the market for Stockgroup's products and services evolved, it
became apparent to Stockgroup's management where the most profitable and
sustainable areas of the business were. They were Financial Software and Content
Systems and Public Company Solutions (including IntegratIR and other awareness
and disclosure products). Once these were identified, a more streamlined and
stable cost structure was introduced and the profitability and cash flow began
to improve. In the last two quarters of 2001 Stockgroup has reported income from
operations as a result of this stabilized structure.

PRODUCTS AND SERVICES

Stockgroup's understanding of internet based financial technology and media has
enabled it to leverage its products and services to enter new markets and secure
new clients. Using a common integrated technology platform, Stockgroup has
developed three main revenue sources: Financial Software and Content Systems,
Public Company Solutions, and E-Business Solutions.

                     FINANCIAL SOFTWARE AND CONTENT SYSTEMS

Stockgroup has developed proprietary financial applications and tools it
licenses to clients. The clients for Financial Software and Content Systems are
from many different markets, such as news media, banks and credit unions, stock
brokerages, leasing, insurance, and others.

Stockgroup provides these on a private-labeled basis, and they are typically
sold on long term (twelve month or more) contracts, generating recurring revenue
streams. Many of the tools are data-feed driven. Stockgroup either feeds data
from its own aggregated databases or from third parties. The advantage of using
the Stockgroup tools is that the customer is able to receive data and
information from a variety of different feeds all from point of contact, at a
fraction of the cost of purchasing all feeds individually. Also, in most cases
Stockgroup adds value by customizing, filtering, and sorting data in the
configuration the customer wants. Stockgroup is able to use its economies of
scale and automation to give a product that is efficiently delivered and
customized, and at a substantial costs savings to having the customer build and
manage it internally.

Examples of some of the providers of third-party data feeds include Marketguide,
Comtex, Multex, and North American Quotations.

Stockgroup distributes financial tools through content and application
syndicates, such as Yellowbrix, through channel resellers such as The Canadian
Press, Comtex News Network, Clarinet Communications, and through its own sales
team. These financial tools, applications and content systems cover the entire
North American market including mutual funds, commodities, and equities.

Stockgroup brings in market feeds through satellite, File Transfer Protocol
(FTP), Extensible Markup Language (XML), and other delivery formats. Stockgroup
has built and maintains its proprietary middleware solution that aggregates the
multiple feeds, translates and builds a common database infrastructure.
Stockgroup's system then cleans, filters, and maintains the data in a common
database structure. A sophisticated server cluster and security system backs
this content/data management system. The data is then streamed to Stockgroup's
proprietary software applications.

Here are just a few of the over 25 Financial Software and Content Systems
products:

1.   Real-time stock quotes on major U.S. exchanges

2.   North American 20-minute delayed stock quotes and indices

3.   Portfolio management, live portfolio updates and wireless portfolio updates


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4.   Most active stock updates

5.   Stock watch lists

6.   Company fundamentals, SEC/SEDAR filings

7.   Daily stock market winners/losers, most actives

8.   Company profiles, stock screening (investment data) and technical stock
     analysis

9.   Employee stock option calculations

The Software Applications and Content System is delivered to customers in four
different formats:

     A)   On an Application Service Provider (ASP) basis where the content and
          software is hosted by Stockgroup and private labeled to the customers
          Internet or Intranet site

     B)   Through Stockgroup's proprietary software objects residing on the
          customers servers which use a proprietary Application Protocol
          Interface (API) to retrieve data from Stockgroup's servers

     C)   Through secured Extensible Markup Language (XML) channel

     D)   Through different wireless devices and modes including: handheld
          devices, Short Message Service (SMS) paging, and Wireless Application
          Protocol (WAP) portals which have been built and maintained by
          Stockgroup

                            PUBLIC COMPANY SOLUTIONS

Stockgroup has developed and owns a large array of Public Company Solutions
products. These products are used by clients to either a) manage their investor
relations and shareholder communications through their web site, b) generate
awareness for their company and their stock, or c) improve their public
disclosure compliance.

Products and services offered by this revenue stream include the IntegratIR
software system, Investor Marketplace, E-Mail Blasts, Sector Supplements,
Smallcap Express sponsorship, Banner and Button Advertising, Monthly Investor
Marketing, Custom Web Site Development, and other online investor marketing
products.

Public companies are increasingly outsourcing these activities because they lack
the internal skills and resources or because it is more effective and cost
efficient than in-house development and maintenance. Stockgroup offers a
`one-stop shopping' package for corporate clients and provides everything from
news release tracking and postings to quarterly streaming conference calls.
Stockgroup's understanding of this market segment and focus has resulted in a
highly specialized bundle of products including: private label quotes, charts
and database tools for building relationships with shareholders and traffic
reports to track investor usage of Web sites and inquiries.

In the third quarter of 2001 Stockgroup launched version 2.01of the IntegratIR
an automated financial application that is licensed to public companies. The
IntegratIR updates the clients' regulated investor relations information
automatically by private labeling this software application into the clients
corporate web site. The SEC has mandated fair disclosure policies that make
Stockgroup's IntegratIR especially attractive as it updates news releases,
webcasts and SEC filings direct from the wire services as they happen and
automatically sends the information to the client's shareholders. The IntegratIR
helps to prevent mistakes and increase timeliness compared to having internal
staff manually update these activities.

Stockgroup's IntegratIR system represents a whole new way to manage shareholder
communications and reach new investors. The IntegratIR is an investor relations
web page and email management system that functions as a software application -
giving the Investor Relations Officer (IRO) and Chief Financial Officer (CFO)
desktop control over the investor relations portion of their web site. In
addition to standard features, such as dynamic quotes and charts, the IntegratIR
provides powerful new tools that automate the client's online disclosure
activities including publishing their press releases, publishing of regulatory
filings and distributing information requested by shareholders, all on a
real-time, automated basis.


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<PAGE>

Other awareness products for public companies include the following:

Investor Marketplace (IMP), a web page which is actively marketed through
advertising to draw readers, where companies can be featured online to
prospective investors. Being featured on the IMP enables customers to get their
name, profile, and internet link in front of a large investor audience that they
may not otherwise be able to attain.

Targeted e-mail marketing, or E-Mail Blasts, which are used to disseminate news
releases to an exclusive list of opt-in investors.

Sector Supplements, which are a spotlight feature on a certain industry sector,
such as Energy, Mining, Biotech, or Technology, are an effective exposure tool
for companies. In a Sector Supplement, investors are drawn to a web site which
features up to twelve companies and contains industry-specific news and
information. Investors who visit this web site can view each of the featured
companies' profiles, request information, or link directly to the client's own
web site.

Sponsorship of the Smallcap Express daily market recap mailing that goes to a
large audience of e-mail readers who have signed up to receive it through
Smallcapcenter.com. A client who sponsors Smallcap Express gets an advertising
banner at the top of each flight. This can be an effective way for the client to
get their name in front of a large number of investors.

Banner Advertising and Button Advertising, which is shown at the top of
Smallcapcenter.com's front page on a prescribed rotation, is another way for
clients to get the attention of a targeted investor audience. Potential
investors who see the banner or button ad can 'click through' the ad to get to a
jump page which can include the client's own description of their company.

The products developed by Stockgroup over the past five years enable the Company
to offer Shareholder disclosure and communications products for Public Companies
to a rapidly growing customer base while maintaining a high sales margin. The
revenues derived from this source are typically contractual over a specified
term. The Internet communities developed by Stockgroup host the critical mass to
ensure a high level of exposure to the Company's communication products for
public companies.

                              E-BUSINESS SOLUTIONS

E-Business Solutions, while having significant revenues for the first quarter of
2001, has been phased out during the year. These were large contracts, and added
a significant amount of revenue to the Company, but they also added instability
in the Company's cost structure. In early 2001 it was decided that this
E-Business Solutions division would be de-emphasized in favour of other areas
with more profit potential, namely Financial Software and Content Systems and
Public Company Solutions.

E-Business Solutions involved the creation of large enterprise web sites for
clients in various different industries. After building Smallcapcenter.com in
1999, Stockgroup had gained the skills and tools which enabled it to create
other internet portals. The underlying programming and design aspects of a
Smallcapcenter were easily translated into other widely varying financial
enterprise sites. E-Business Solutions contracts were relatively large, and
involve all aspects of concept, design, programming and implementation.

EMPLOYEES

As of December 31, 2001 Stockgroup employed 29 people on a full-time basis and 2
people on a part-time basis. After seeing wide fluctuations in the number of
employees between 1999 and 2001, the number of employees has remained relatively
stable for the nine months ended March 2002. This stability has been an
important part of Stockgroup's improved cost structure.


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<PAGE>

None of the Company's employees are subject to collective bargaining agreements.
The Company believes relations with employees are good.

REGULATORY ISSUES

The Company is not subject to governmental regulation in its Internet publishing
efforts other than local state and municipal sales tax licenses.

A number of legislative and regulatory proposals under consideration by federal,
state, provincial, local and foreign governmental organizations may lead to laws
or regulations concerning various aspects of the Internet, including, but not
limited to, online content, user privacy, taxation, access charges, liability
for third-party activities and jurisdiction. Additionally, it is uncertain how
existing laws will be applied by the judiciary to the Internet. The adoption of
new laws or the application of existing laws may decrease the growth in the use
of the Internet, which could in turn decrease the demand for Stockgroup's
services, increase the cost of doing business or otherwise have a material
adverse effect on the Company's business, results of operations and financial
condition.

SUBSIDIARIES

Stockgroup owns 100% of the issued and outstanding voting common shares of
579818 B.C. Ltd., which wholly owns Stockgroup Media Inc., a British Columbia
corporation, and owns 50% of Stockscores Analytics Corp., a British Columbia
corporation. In addition, Stockgroup wholly owns Stockgroup Systems Ltd., a
Nevada Corporation.

RESEARCH AND DEVELOPMENT

During 2000 and 2001 the Company invested approximately $849,335 and $241,392
respectively on research and development related to new products and services.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These forward-looking statements can be identified
by the use of predictive, future-tense or forward-looking terminology, such as
"believes," "anticipates," "expects," "estimates," "plans," "may," "intends,"
"will," or similar terms. These statements appear in a number of places in this
report and include statements regarding the intent, belief or current
expectations of the Company, its directors or its officers with respect to,
among other things: (i) trends affecting the Company's financial condition or
results of operations, (ii) the Company's business and growth strategies, (iii)
the Internet and Internet commerce and (iv) the Company's financing plans.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve significant risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors set
forth under "Risk Factors" and elsewhere in this report. The preceding
discussion of the financial condition and results of operations of the Company
should be read in conjunction with the financial statements and notes related
thereto included elsewhere in this report.

Item 2. Description of Property

INTELLECTUAL PROPERTY, PROPRIETARY RIGHTS AND DOMAIN NAMES

The Company protects its intellectual property through a combination of
trademark and copyright law, trade secret protection and confidentiality
agreements with its employees, customers, independent contractors and strategic
partners. The Company pursues the registration of its domain names, trademarks
and service marks in the United States and


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<PAGE>

internationally. Effective trademark, service mark, copyright and trade secret
protection may not be available in every country in which the Company's services
and products are made available on-line. The Company creates a majority of its
content and obtains rights to use the balance of its content from third parties.
It is possible that the Company could become subject to infringement actions
based upon the content obtained from these third parties. In addition, others
may use this content and the Company may be subject to claims from its
licensors. The Company currently has no patents or patents pending and does not
anticipate that patents will become significant part of its intellectual
property in the future. The Company enters into confidentiality agreements with
its employees and independent consultants and has instituted procedures to
control access to and distribution of its technology, documentation and other
proprietary information and the proprietary information of others from whom it
licenses content. The steps the Company takes to protect its proprietary rights
may not be adequate and third parties may infringe or misappropriate the
Company's copyrights, trademarks, service marks and similar proprietary rights.
In addition, other parties may assert claims of infringement of intellectual
property or alter proprietary rights against the Company. The legal status of
intellectual property on the Internet is currently subject to various
uncertainties as legal precedents have not been set and are still to be
determined in many areas of internet law.

LEASEHOLD

The Company's corporate offices are composed of one floor of leased space
located in the center of Vancouver's business community. The Company also leases
sites in New York and Toronto. The Company's facilities are fully used for
current operations, with the exception of the New York facility, which is
currently being subleased to a tenant.

      City                 Monthly Payment       Lease         Expiry Date
--------------------------------------------------------------------------------
Vancouver                      CDN $23,647      7 years      June -- 2006
New York                            $8,449      7 years      August -- 2006
New York sublease                  -$8,449      3 years      April -- 2004
Toronto                         CDN $4,533      3 years      July -- 2002

EQUIPMENT

The Company has made a significant investment in servers and computer equipment
required for its web site and has dedicated staff assigned to maintenance and
support of these operations.

Item 3. Legal Proceedings

The Company filed a statement of claim in the Supreme Court of British Columbia
on January 3, 2001, against Pacific Capital Markets Inc., James King, Rick
Jeffs, and Heidi Hirst. Stockgroup is suing Pacific Capital Markets Inc. for
$351,800 due to it under a sales contract Stockgroup signed with them on
September 20, 2000. Stockgroup is suing the individuals named above, who are
managers of Pacific Capital Markets Inc., for general damages for
misrepresentation. The Company is seeking payment of the $351,800 owing, plus
interest, damages, costs and such further and other relief as deemed suitable by
the court.

On January 12, 2001, Pacific Capital Markets Inc., James King, Rick Jeffs, and
Heidi Hirst filed a Statement of Defense and Counterclaim. At the time of this
filing, no settlement conferences have been held and no court date has been set.

As of December 31, 2001, no further action had been taken by either side. While
the Company believes it has a strong case, it has not elected to pursue this
litigation at this time, pending further information on the collectibility of
the debt.


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Item 4. Submission of Matters to a Vote of Security Holders

The Company held its Annual General Meeting on September 20, 2001. At this
meeting, the Board of Directors was re-elected with no changes, comprising
Marcus New, Chairman, Leslie Landes, Craig Faulkner, Lee de Boer, and David
Caddey. Ernst & Young LLP were re-appointed as the Company's auditors for the
2001 fiscal year, and approval was granted for the 2001 Stock Option Plan,
whereby the Company was authorized to grant up to 1,000,000 Stock Options under
terms substantially the same as its 2000 Stock Option Plan. Authorizations was
also received to increase the authorized share capital from 50,000,000 to
75,000,000 common shares of the Company and to change the name of the Company
from Stockgroup.com Holdings, Inc. to Stockgroup Information Systems Inc.

A summary of the votes cast and results of voting is as follows:

Issue to be voted upon                   Votes For  Votes Against    Abstentions
--------------------------------------------------------------------------------
Election of Marcus New to Board          6,471,942           0          18,895
Election of Craig Faulkner to Board      6,474,142           0          16,695
Election of Leslie Landes to Board       6,474,142           0          16,695
Election of Lee de Boer to Board         6,480,142           0          10,695
Election of David Caddey to Board        6,479,942           0          10,895
Appoint Ernst & Young as Auditors        6,482,137       8,400             300
Approve 2001 Stock Option Plan           3,990,461      55,975             900
Increase in authorized share capital     6,430,707      54,730           5,400
Approval of name change                  6,481,137       9,400             300
Authority to vote on other issues        6,445,812      30,930          14,095
--------------------------------------------------------------------------------
Total votes cast                         6,490,837 of 10,108,058
================================================================================

PART II

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters

Stockgroup's common stock has been quoted for trading on the OTC BB since March
17, 1999. Accordingly, there has been a limited public market for the Company's
common stock. The following table sets forth high and low bid prices for the
common stock for the quarterly periods ending March 31, 1999 through to December
31, 2001 and the partial quarter from January 1, 2002 to March 6, 2002. These
prices represent quotations between dealers without adjustment for retail
markup, markdown or commission and may or may not represent actual transactions.

Quarter Ending:                High                Low               Volume
----------------------------------------------------------------------------
March 31, 1999               $ 10.250            $ 6.000           3,339,000
June 30, 1999                $  9.000            $ 3.125           4,859,200
September 30, 1999           $  5.000            $ 2.125           3,297,500
December 31, 1999            $  3.625            $ 1.312           1,927,700
March 31, 2000               $  5.031            $ 1.562           2,623,600
June 30, 2000                $  3.500            $ 0.760           1,732,700
September 30, 2000           $  2.813            $ 0.875           4,983,800
December 31, 2000            $  1.938            $ 0.563           1,120,500
March 31, 2001               $  1.000            $ 0.375           1,005,700
June 30, 2001                $  0.650            $ 0.280           2,840,800
September 30, 2001           $  0.390            $ 0.090           1,105,300
December 31, 2001            $  0.200            $ 0.115           1,977,800
Jan 1-Mar 21, 2002 (partial) $  0.400            $ 0.140           5,350,000

On December 31, 2001, the Company had 40 registered shareholders owning
10,131,260 shares.


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Stockgroup has not declared, and does not foresee declaring, any dividends now
or into the foreseeable future.

The Company has authorized and reserved, as of March 25, 2002, an aggregate of
2,819,018 shares of common stock for issuance upon the exercise of warrants and
non-qualified stock options.

Item 6. Management's Discussion and Analysis of Results of Operations and
Financial Condition

RESULTS OF OPERATIONS - FOR THE YEARS ENDED DECEMBER 31, 2001 AND DECEMBER 31,
2000

Year 2001 ended with the Company's first two quarters with profitable income
from operations since going public in 1999. This improvement was largely due to
a combination of cost reduction efforts and a greater leverage of the existing
infrastructure which was built up during 1999 and 2000.
After Q1 2001, the Company began focusing on sales of Financial Software and
Content Systems over E-Business Solutions consulting. The Company found that the
recurring nature of Financial Software and Content Systems had greater profit
and growth potential than large non-recurring E-Business projects. Financial
Software and Content Systems sales grew, as did margins, and costs actually
decreased over the year as a result of this new focus.

                                                       Revenue and Gross Profits
--------------------------------------------------------------------------------
Total revenues for 2001 were $2.857 million compared to $4.037 million in 2000,
a decrease of $1.180 million, or 29%. The company's business of Public Company
Solutions decreased compared to last year, from $2.531 million in 2000 to $1.643
million in 2001, a decrease of $0.888 million or 35%. Much of this decrease is
attributed to the decrease in public company corporate communications spending
caused by the slowdown in financial markets and the effect of the events of
September 11, 2001. E-Business Solutions revenue declined by $0.766 million, or
55%, for the year compared to 2000. This was because the company refocused its
strategy from short term E-Business Solutions project consulting to one of
longer term licensing of Financial Software and Content Systems, while
continuing to emphasize its Public Company Solutions as well. Offsetting the
reductions in the E-Business Solutions and Public Company Solutions revenue, was
the company's newest source of revenue Financial Software and Content Systems.
2001 was the first full year for this revenue stream, so Financial Software and
Content Systems increased from $0.087 million in 2000 to $0.580 million in 2001,
an increase of $0.493 million or 567%.

Gross profits in 2001 were $1.8 million compared to $2.2 million in 2000, a
decrease of $0.4 million, or 18%. Gross profit dollars decreased year over year,
but gross margin percentage increased from 55% to 63%. This increase in margin
percentage is due to reductions in direct payroll costs as a result of the
phasing out of E-Business Solutions consulting and substantially reduced
operating costs associated with maintaining Smallcapcenter.com.

Stockgroup has expanded its offering in the Public Company Solutions markets
through the development of Sector Supplements and the IntegratIR. Sector
Supplements, which are a spotlight feature on a certain industry sector, such as
Energy, Mining, Biotech, or Technology, are an effective exposure tool for
companies. In a Sector Supplement, investors are drawn to a site which features
up to twelve companies and contains industry-specific news and information.
Investors who visit this web site can view each of the featured companies'
profiles, request information, or link directly to the client's own web site.
The IntegratIR is an automated Internet disclosure software application
initially launched in beta format in April 2001 and with the full version in
September 2001. The IntegratIR assists public companies to comply with
continuous disclosure requirements on their Internet site. For a fixed monthly
fee, public companies can ensure their message is effectively and accurately
communicated to investors with minimal effort on their part. The IntegratIR
automates the updating of news releases, SEC filings, quotes and charts to the
customer's web site on a private labeled basis. The


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IntegratIR also gives the investor relations officer desktop control over
changing and updating the other content areas of IR. Stockgroup will continue to
complement the growing popularity of its Public Company Solutions products by
entering profitable new strategic areas.

The revenue from Financial Software and Content represents 20% of sales in 2001,
an increase over the 2% of sales it represented in 2000. This is a growing
source of revenue that is expected to continue increasing. Stockgroup started
providing financial software tools and applications to other companies' web
sites and intranets on a private labeled basis late in November 2000. Each
customer the Company secures typically signs a twelve-month contract, with
automatic renewal option that provides a monthly recurring revenue stream. The
Company's Financial Software and Content and its Public Company Solutions are
derived from a common technology base and both benefit from continuous recurring
revenues.

E-Business Solutions revenue for the first half of 2001 was mainly derived from
work on a financial leasing exchange for the company's client, OnMark. The
OnMark contract was secured late in 2000 and was completed in April 2001. No
significant new E-Business Solutions contracts have been undertaken in the
second, third, or fourth quarters of 2001.

                                                              Operating Expenses
--------------------------------------------------------------------------------
Total operating expenses for 2001 were $2.485 million compared to $7.789 million
in 2000, a decrease of $5.304 million or 68%. Stockgroup was able to make
significant reductions in all areas of expenditures without reducing its ability
to earn income. This was possible because the expensive part of the
infrastructure was built in 1999 and 2000, and this infrastructure allows the
Company to handle additional business without adding extra costs.

Sales and Marketing expenses were $0.467 million in 2001 compared to $2.719
million in 2000, a decrease of $2.252 million or 83%. These reductions are a
result of the Company's decision late in the third quarter of 2000 to change the
company's main strategy to licensing software and content, and to place a lesser
emphasis on building a financial community with proprietary small cap news. This
allowed the company to reduce its advertising expenses associated with
Smallcapcenter significantly.

Product Development expenses in 2001 were $0.241 million compared to $0.849
million in 2000, a decrease of $0.608 million or 75%. The decreases in this area
were a result of cost reduction efforts as described in the previous paragraphs.

General and Administrative expenses in 2001 were $1.777 million compared to
$4.220 million in 2000, a decrease of $2.443 million, or 55%. These reductions
are a result of the Company's decision late in the third quarter of 2000 to
change the company's main strategy to licensing software and content, and to
place a lesser emphasis on building a financial community with proprietary small
cap news. This allowed the company to reduce its travel, staffing and other
expenses associated with Smallcapcenter significantly. Stockgroup expects these
ongoing reductions to have a continuing beneficial effect on costs in this area.

                                         Other Income (Expense) and Income Taxes
--------------------------------------------------------------------------------
Interest income in 2001 was $4,020 compared to $85,138 in 2000, a reduction of
$81,118 or 95%. Interest is earned on short term investments of available cash,
so the reduction is in line with lower cash levels in 2001 compared to 2000.

Interest expense in 2001 was $0.596 million compared to $3.910 million in 2000,
a decrease of $3.314 million, or 85%. Reductions in this area were due to large
non-cash interest amounts generated in 2000 relating to the convertible notes
issued in the second quarter of 2000 that were not repeated in 2001. Of the
$0.596 million amount for 2001, only $24,170 was actually paid in cash; a
further $170,834 is the actual amount that has accrued and will either be
converted into common stock, or cancelled in 2002. See the


                                       11
<PAGE>

subsequent event disclosure Note 15(a) in the financial statements and the
corporate developments section below for more information. The remaining
$401,093 in interest expense is deemed interest recorded as a result of
accretion of the warrant discount and beneficial conversion feature described in
Notes 8 and 9 in the financial statements.

Due to its net loss position, the Company did not incur tax in 2001. As at the
most recent year end, Stockgroup had tax loss carry forwards of $5,751,000 in
Canada which expire in 2006 to 2008, and tax loss carry forwards of $2,916,000
in the U.S. which expire in 2019 to 2021.

The Gain on Warrants Liability of $242,000 results from the change in fair value
measurement of the 300,000 callable and 800,000 other warrants between the June
30, 2001 change in accounting principle and December 31, 2001. See the
disclosure Note 10 in the financial statements for a more detailed explanation
of this amount.

The Extraordinary Gain on convertible note redemptions of $58,701 is the result
of the $181,000 redemption on September 30, 2001.

Cumulative effect of change in accounting principle of $413,546 is the
difference between the previous carrying value of the 300,000 callable and
800,000 other warrants of $765,546 and their fair value at June 30, 2001 of
$352,000. A more detailed explanation of this amount can be found in Note 10 of
the financial statements.

Other income in 2001 was $9,509, which consists of net gains on market value of
short term marketable securities.

                                                                      Net Income
--------------------------------------------------------------------------------
The net loss for 2001 was $0.542 million compared to a loss of $8.333 million in
2000, a decrease in losses of $7.791 million or 94%. This reduction in net loss
was a product of various factors described above, including staff expense
reduction, reduction in interest expense on certain convertible notes, and
reduced advertising expenses.

LIQUIDITY AND CAPITAL RESOURCES

--------------------------------------------------------------------------------
Stockgroup ended 2001 with cash, cash equivalents, and marketable securities of
$148,432, compared to $338,448 for 2000. Cash increased during Q4 2001 by
$19,062 and during Q3 by $14,698, and decreased during Q2 by $84,183 and during
Q1 by $139,594. For Q3 and Q4 the Company has reached its goal of achieving
positive cash flow. Although the Company expects to maintain positive cash flow
from operations, it may pursue financing to improve its working capital position
and to grow the business to the greatest possible extent.

Stockgroup's income from operations in Q3 and Q4 2001 have contributed to its
improved cash flow over fiscal 2000. Added to that, in 2002, subsequent to year
end, three events took place which should further solidify Stockgroup's cash
position going forward. They are the restructuring of certain convertible notes,
the conversion of certain convertible debentures, and the raising of $400,000 in
a private placement. The restructuring of $1,924,000 in convertible notes
removed a discount to market conversion factor which, in the Company's opinion,
were inhibiting further investment in Stockgroup. The restructuring, which can
be referenced in Stockgroup's 8-K filing on February 15, 2002, removed a great
deal of the uncertainty as to the timing of cash payments relating to this debt,
and eliminated the accrued interest and prepayment penalties which had built up.
The second event, the conversion of $200,000 in convertible notes on March 15,
2002 into common stock at $0.50 per share improved the Company's balance sheet.
The third event, the raising of $400,000 in a private placement, added working
capital which will be used to grow the business. This $400,000 financing also
included warrants with an exercise value of $500,000 if they are exercised,
although there can be no assurance that this will happen within their 12 month
life.


                                       12
<PAGE>

Despite these significant improvements, the Company will continue to pursue
further financing opportunities during 2002, as it believes more working capital
would give it more leverage to maximize its capacity for growth.

Readers should be cautioned that there can be no assurance that revenue will
increase or that margins and profitability will remain stable. In addition, the
company has cash payments due to certain of the noteholders on June 30, 2002,
July 31, 2002, September 30, 2002, December 31, 2002, and at the end of each of
the next 8 quarters after that. To the extent that either of these possibilities
seriously depletes cash levels, the Company may need to seek additional capital.
If it does, there can be no assurance that it will be successful in raising a
sufficient amount of additional capital or in internally generating a sufficient
amount of capital to meet long-term requirements. If the Company is unable to
generate the required amount of additional capital, its long term performance
may be adversely affected.

CORPORATE DEVELOPMENTS DURING THE YEAR

--------------------------------------------------------------------------------
A synopsis of corporate highlights for 2001 is as follows:

1.   On January 19, 2001, Stockgroup closed a $0.5 million financing from a
     group of unaffiliated investors pursuant to a Securities Purchase
     Agreement. The full details of this financing, including all relevant
     documents, were filed in a Form 8K on January 30, 2001 and can be viewed
     therein.

2.   During the first quarter of 2001, Stockgroup integrated a variety of
     financial software and content solutions for new customers including the US
     Navy, Unisys, Prime Vest and Conseco's Internet/Intranet sites. Stockgroup
     provides these sites with its proprietary financial tools, including
     delayed and real-time quotes, interactive charting and customizable
     portfolios. These products are licensed to clients and delivered in a
     private-labeled format to the specifications of the customer.

3.   On April 30, 2001, Stockgroup announced the initial Beta launch of its
     innovative web-based investor relations software application, the
     IntegratIR. The IntegratIR allows companies to more effectively communicate
     with shareholders and potential investors so they can better achieve their
     disclosure requirements. The IntegratIR is a communications tool that
     seamlessly integrates into a public company's existing web site and
     reflects the company's branding, look and feel. The IntegratIR automates
     the updating of the public company's critical time sensitive disclosure
     information on their Internet site. News releases, financial reports, SEC
     filings, quotes, interactive charting, and other disclosure information is
     updated with Stockgroup's IntegratIR software. The IntegratIR also
     interacts with a sophisticated email database response system that
     automates the delivery of news and messages for the public company to their
     shareholder database and their other mailing lists.

     In addition, with the IntegratIR enables Investor Relations Officers to
     directly change and administer their investor relation's site without
     having specialized technical skill or training. Changes can be made to
     their investor relation's site with a few mouse clicks. The IntegratIR
     communications tool is accessible to the client company 24 hours a day, 7
     days a week, and can be administered from any location. The IntegratIR is
     available for both US and Canadian companies.

     The full version of the IntegratIR was launched in Q3, 2001.

4.   On June 5, 2001, Stockgroup announced that Profit Magazine had recognized
     the Company's Canadian subsidiary as one of Canada's fastest growing
     companies. Stockgroup Media Inc. ranked 35th on the Profit Magazine Top 100
     Fastest Growing Companies list, which can be found in the June 2001 issue
     of Profit Magazine. The 2001 Profit 100 list awards companies based on
     their 5-year revenue growth. Stockgroup revenues grew 2,426% from Year 1 to
     Year 5 of its operations. This is the first year Stockgroup has been
     eligible for consideration on the Profit 100.


                                       13
<PAGE>

5.   On June 7, 2001, Stockgroup announced that vFinance, Inc., a financial
     services company that provides investment banking and brokerage services,
     had selected Stockgroup's Financial Software and Content Systems for its
     full service brokerage division, vFinance Investments, Inc.

6.   On June 21, 2001, Stockgroup announced an agreement with TELUS Mobility to
     deliver Web-based financial software, content and tools to their more than
     2 million clients across Canada. TELUS Mobility Pocket Web clients can
     access Stockgroup financial information using their web ready wireless
     phones. Tools delivered include proprietary quote look-up and portfolio
     manager tools drawn from a database of 21,000 public companies. TELUS
     Mobility's Pocket Web wireless Internet service is available on all of its
     web ready digital phones.

7.   On October 2, Stockgroup announced they have signed an agreement with
     Comtex News Network, Inc. to make available Stockgroup's Financial Software
     and Content Systems to Comtex's clients reaching over 1000 distribution
     points. Stockgroup's leading edge financial tools will be integrated into
     Comtex's hosted product line - News Solutions. This agreement allows COMTEX
     to provide its customers with additional financial tools in addition to
     offering end-users the critical content they need to stay informed about
     financial market events. The combined Stockgroup and COMTEX solution
     provides a one-stop financial content solution for COMTEX and Stockgroup
     clients.

8.   On October 8, 2001, Stockgroup announced an agreement with ClariNet
     Communications Corporation, an aggregator and re-distributor of news and
     publisher of ClariNews, under which each party will represent the products
     of the other. Under the terms of the agreement, ClariNet will offer its
     corporate, institutional and ISP news clients Stockgroup's proprietary,
     cutting-edge ASP software tools and content system along with the ClariNet
     news products. The ClariNet additions include a new ClariNet product that
     allows users to add company news relating to any of the public companies
     contained within the Stockgroup software products.

9.   On October 11, 2001, Stockgroup announced it had changed its name from
     Stockgroup.com Holdings, Inc. to Stockgroup Information Systems Inc. to
     better reflect its emphasis on providing Financial Software and Content
     Systems to customers.

10.  On October 23, 2001, Stockgroup announced they have signed an agreement
     with North American Quotations (NAQ) in which NAQ will re-sell Stockgroup's
     Financial Softwared and Content System.

11.  On November 16, 2001, Stockgroup appointed David Gillard as it's new CFO,
     replacing Lindsay Moyle.

DEVELOPMENTS SINCE YEAR END

1.   On February 11, 2002, Stockgroup announced they have signed an agreement
     with Freedom Communications, a large private media company with
     publications and web sites throughout the U.S., to provide Stockgroup's
     financial content and software system to its web sites.

2.   On February 19, 2002, Stockgroup announced they have restructured the
     convertible notes with Deephaven Private Placement Trading Ltd. and Amro
     International, S.A. Under the restructuring, the interest rate and
     prepayment penalties are reduced to zero, accrued interest has been waived,
     the conversion price is fixed at $0.50, and a total of up to $300,000 cash
     is required to be paid to the noteholders over 10 quarterly installments
     starting June 30, 2002. The new notes have a two-year term


                                       14
<PAGE>

     with renewal provisions for another two years. The company filed a form 8-K
     on February 15, 2002 which fully describes the restructured notes.

3.   On February 21, 2002, Stockgroup announced they have signed an agreement
     with The Canadian Press (CP) in which CP will re-sell Stockgroup's
     financial content and software system. This agreement will give CP
     exclusive distribution rights for Canada.

4.   On March 15, 2002, Stockgroup and the remaining noteholders from the
     January 19, 2001 convertible debenture reached an agreement whereby they
     would immediately convert the $0.2M balance of the debt into common shares
     at $0.50 per share. The exercise price of the Series A warrants has been
     reduced from $1.00 to $0.25. The exercise price of the Series B warrants
     has been reduced from $2.00 to $0.50. The expiry date for both the Series A
     and B warrants has been extended to July 31, 2005.

5.   On March 19, 2002, Stockgroup announced they have signed an agreement with
     Credential Group in which Credential Group would license Stockgroup's
     Financial Software and Content Systems, and offer Stockgroup's products to
     its more than 450 credit union partners across Canada.

6.   On March 25, 2002, the Company completed a private placement for 2,000,000
     units at $0.20 per unit for cash proceeds of $400,000. Each unit consists
     of one common share and one share purchase warrant. The warrants are
     exercisable at any time for one year from the date of issuance at $0.25 per
     share. The full details of this financing, including all relevant
     documents, were filed in a Form 8-K on March 26, 2002 and can be viewed
     therein.

RISK FACTORS

The following factors should be considered carefully in evaluating the Company
and its business.

Stockgroup's limited operating history makes it difficult for you to judge its
prospects.

Stockgroup has a limited operating history upon which an evaluation of the
Company, its current business and its prospects can be based. You should
consider any purchase of the Company's shares in light of the risks, expenses
and problems frequently encountered by all companies in the early stages of its
corporate development.

Liquidity and capital resources are uncertain.

For the year ended December 31, 2001 the Company had an operating loss of
$673,231. At December 31, 2001, the Company had a working capital deficiency of
$3,003,364. The Company experienced a significant reduction in cash used in
operations from $3,524,385 in 2000 to $778,086 in 2001 as a result of
restructuring activities initiated in 2001. Stockgroup expects that increasing
revenues resulting from current operations will reduce use of cash going
forward. Although the company has generated positive cash flow in its last two
quarters, there can be no assurance that revenue will increase or that costs
will be lower going forward or that positive cash flow will continue. Management
has undertaken a number of key initiatives to strengthen its capital structure
and to achieve profitable operations subsequent to December 31, 2001. The
Company has restructured the terms of its 8% convertible notes due March 31,
2002 such that the prepayment penalty of $288,600 and accrued interest of
$296,636 will be waived and $1,524,000 of the outstanding principal is not due
until February 6, 2004. The Company has negotiated the conversion into common
shares of the remaining $200,000 principal and accrued interest on its 3%
convertible debentures. The Company has also raised an additional $400,000 in a
private placement to finance ongoing operations. These initiatives are described
in more detail in Note 15 to the financial statements. The company has cash
payments due to certain of the noteholders on June 30, 2002, July 31, 2002, and
at the end of each of the next 10 quarters. To the extent that the Company does
not maintain its recent operating profitability and positive cash flow, or the
cash payments due to certain noteholders seriously depletes cash levels, the
Company may need to seek additional capital. If it


                                       15
<PAGE>

does, there can be no assurance that it will be successful in raising a
sufficient amount of additional capital or in internally generating a sufficient
amount of capital to meet long-term requirements. To the extent that the Company
is unable to maintain or generate the required amount of capital, its ability to
meet obligations and to continue as a going concern is uncertain.

Computer equipment problems and failures could adversely affect business.

Problems or failures in Internet-related equipment, including file servers,
computers and software, could result in interruptions or slower response times
of the Company's products, which could reduce the attractiveness of the Web
site, financial tools, or software products to advertisers and users. Equipment
problems and failures could result from a number of causes, including an
increase in the number of users of the Web site, computer viruses, outside
programmers penetrating and disrupting software systems, human error, fires,
floods, power and telecommunications failures, and internal breakdowns. In
addition, any disruption in Internet access provided by third parties could have
a material and adverse effect.

Stockgroup may not be able to compete successfully against current and future
competitors.

Stockgroup currently competes with several other companies offering similar
services. Many of these have significantly greater financial resources, name
recognition, and technical and marketing resources, and virtually all of them
are seeking to improve their technology, products and services. Stockgroup can
not assure the reader that it will have the financial resources or the
technological expertise to successfully meet this competition.

Stockgroup is controlled by its officers, directors and entities affiliated with
them.

In the aggregate, ownership of Stockgroup shares by management represents
approximately 38% of issued and outstanding shares of common stock. These
shareholders, if acting together, will be able to significantly influence all
matters requiring approval by shareholders, including the election of directors
and the approval of mergers or other business combinations transactions.

Stockgroup's future performance is dependent on the ability to retain key
personnel.

Stockgroup's performance is substantially dependent on the performance of senior
management and key technical personnel. In particular, the Company's success
depends on the continued efforts of its senior management team. The loss of the
services of any of its executive officers or other key employees could have a
material adverse effect on the Company's business, results of operations and
financial condition.

Future success also depends on the continuing ability to retain and attract
highly qualified technical, editorial and managerial personnel. The Company
anticipates that the number of employees will increase in the next 12 months.
The inability to attract and retain the technical and managerial personnel
necessary to support the growth of its business could have a material adverse
effect upon the Company's business, results of operations and financial
condition.

Stockgroup may not be unable to protect the intellectual property rights upon
which its business relies.

The Company regards substantial elements of its Web site and underlying
technology as proprietary and attempts to protect them by relying on
intellectual property laws, including trademark, service mark, copyright and
trade secret laws and restrictions on disclosure and transferring title and
other methods. The Company also generally enters into confidentiality agreements
with employees and consultants and in connection with license agreements with
third parties, and seeks to control access to proprietary information. Despite
these precautions, it may be possible for a third party to copy or otherwise
obtain or use the Company's proprietary information without authorization or to
develop similar technology independently. Moreover, effective trademark, service
mark,


                                       16
<PAGE>

copyright and trade secret protection may not be available in every country in
which the Company's services are distributed or made available through the
Internet, and policing unauthorized use of proprietary information is difficult.
There can also be no assurance that the Company's business activities will not
infringe upon the proprietary rights of others, or that other parties will not
assert infringement claims against the Company, including claims that by
directly or indirectly providing hyperlink text links to Web sites operated by
third parties, Stockgroup has infringed upon the proprietary rights of other
third parties.

It is unclear how any existing and future laws enacted will be applied to the
internet industry and what effect such laws will have on Stockgroup.

A number of legislative and regulatory proposals under consideration by federal,
state, provincial, local and foreign governmental organizations may lead to laws
or regulations concerning various aspects of the Internet, including, but not
limited to, online content, user privacy, taxation, access charges, liability
for third-party activities and jurisdiction. Additionally, it is uncertain how
existing laws will be applied by the judiciary to the Internet. The adoption of
new laws or the application of existing laws may decrease the growth in the use
of the Internet, which could in turn decrease the demand for Stockgroup's
services, increase the cost of doing business or otherwise have a material
adverse effect on the Company's business, results of operations and financial
condition.

Stockgroup may be held liable for online information or products provided by the
Company or third parties.

Because materials may be downloaded by the public on Internet services offered
by Stockgroup or the Internet access providers with which the Company has
relationships, and because third party information may be posted by third
parties on its Web site through discussion forums and otherwise there is the
potential that claims will be made against the Company for defamation,
negligence, copyright or trademark infringement, or other theories. Such claims
have been brought against providers of online services in the past. The
imposition of liability based on such claims could materially and adversely
affect Stockgroup.

Even to the extent such claims do not result in liability, the Company could
incur significant costs in investigating and defending against such claims. The
imposition on the Company of potential liability for information or products
carried on or disseminated through its Web site could require implementation of
measures to reduce exposure to such liability, which may require the expenditure
of substantial resources and limit the attractiveness of services to members and
users.

Stockgroup's general liability insurance may not cover all potential claims to
which it is exposed or may not be adequate to indemnify it for all liability
that may be imposed. Any imposition of liability that is not covered by
insurance or is in excess of insurance coverage could have a material adverse
effect on the Company's business, results of operations and financial condition.

The value and transferability of Stockgroup's shares may be adversely impacted
by the limited trading market for its shares and the penny stock rules.

There is only a limited trading market for Stockgroup's shares. The Company's
common stock is traded in the over-the-counter market and "bid" and "asked"
quotations regularly appear on the O-T-C Bulletin Board under the symbol "SWEB".
There can be no assurance that the Company's common stock will trade at prices
at or about its present level, and an inactive or illiquid trading market may
have an adverse impact on the market price. In addition, holders of Stockgroup's
common stock may experience substantial difficulty in selling their securities
as a result of the "penny stock rules," which restrict the ability of brokers to
sell certain securities of companies whose assets or revenues fall below the
thresholds established by those rules.

Future sales of shares may adversely impact the value of Stockgroup's stock.


                                       17
<PAGE>

In addition to shares being offered by outstanding registrations, Stockgroup has
authorized and reserved, as of March 25, 2002, 1,297,258 shares of common stock
for issuance upon the exercise of non-qualified stock options. The total amount
of shares covered by outstanding registrations, plus the shares reserved for
such options, would represent 20% of the number of Stockgroup's outstanding
shares on the date of this filing. If required, Stockgroup will seek to raise
additional capital through the sale of common stock. Under the terms of
outstanding convertible notes and debentures, the number of shares that may be
issued under such instruments may be increased in the event of certain changes
in the Company's capital structure. Future sales of shares by Stockgroup or its
stockholders could cause the market price of its common stock to decline.



                                       18
<PAGE>

Item 7. Financial Statements and Supplementary Data

                                AUDITORS' REPORT


To the Shareholders of
Stockgroup Information Systems Inc.
(formerly Stockgroup.com Holdings, Inc.)

We have audited the accompanying consolidated balance sheet of Stockgroup
Information Systems Inc. as of December 31, 2001 and 2000 and the related
consolidated statements of operations, shareholders' equity (deficiency), and
cash flows for the years then ended. 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Stockgroup
Information Systems Inc. at December 31, 2001 and 2000 and the consolidated
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that
Stockgroup Information Systems Inc. will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company has incurred
recurring operating losses and has a working capital deficiency. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

As discussed in Note 10 to the financial statements, in 2001, the Company
changed its method of accounting for callable warrants.

Vancouver, Canada,
February 25, 2002 [except for Notes 15[b] /s/ Ernst & Young LLP
and [c] which are as of March 25, 2002]. Chartered Accountants

<PAGE>

Stockgroup Information Systems Inc.


                           CONSOLIDATED BALANCE SHEETS
           [See Note 1 - Nature of Business and Basis of Presentation]

As at December 31                                      (expressed in US dollars)

<TABLE>
<CAPTION>
                                                                         2001               2000
                                                                           $                  $
-------------------------------------------------------------------------------------------------
<S>                                                                  <C>                <C>
ASSETS [notes 5 and 7]
Current
Cash and cash equivalents                                              126,618            321,363
Marketable securities                                                   21,814             17,085
Accounts receivable [net of allowances for doubtful
   accounts of $92,331; 2000 - $471,430] [note 3]                      173,105            218,810
Prepaid expenses                                                        60,465            116,127
-------------------------------------------------------------------------------------------------
Total current assets                                                   382,002            673,385
-------------------------------------------------------------------------------------------------
Property and equipment, net [note 4]                                   341,688            529,855
-------------------------------------------------------------------------------------------------
                                                                       723,690          1,203,240
=================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current
Bank indebtedness [note 5]                                               6,081             14,303
Accounts payable                                                       373,674            796,637
Accrued payroll liabilities                                            144,920            194,241
Deferred revenue                                                       124,944            181,987
Current portion of capital lease obligation [note 6]                     7,674                 --
Notes payable [note 7]                                                 108,837                 --
Convertible notes [note 8]                                           2,509,236          2,662,000
Warrants liability [note 10]                                           110,000                 --
-------------------------------------------------------------------------------------------------
Total current liabilities                                            3,385,366          3,849,168
-------------------------------------------------------------------------------------------------
Capital lease obligation [note 6]                                       11,231                 --
Convertible debentures [note 9]                                         70,695                 --
-------------------------------------------------------------------------------------------------
Total liabilities                                                    3,467,292          3,849,168
-------------------------------------------------------------------------------------------------
Commitments and contingencies [note 14]

Shareholders' equity (deficiency)
Common stock, no par value [note 11]
   Authorized shares -75,000,000 [2000 - 50,000,000]
   Issued and outstanding shares - 10,131,260 in 2001
     and 8,467,676 in 2000                                           7,969,090          7,344,483
Additional paid-in capital                                           2,422,014          2,602,743
Accumulated deficit                                                (13,134,706)       (12,593,154)
-------------------------------------------------------------------------------------------------
Total shareholders' equity (deficiency)                             (2,743,602)        (2,645,928)
-------------------------------------------------------------------------------------------------
                                                                       723,690          1,203,240
=================================================================================================
</TABLE>

See accompanying notes


                                       19
<PAGE>

Stockgroup Information Systems Inc.


                      CONSOLIDATED STATEMENTS OF OPERATIONS
           [See Note 1 - Nature of Business and Basis of Presentation]

Year ended December 31                                 (expressed in US dollars)

<TABLE>
<CAPTION>
                                                                         2001               2000
                                                                           $                  $
-------------------------------------------------------------------------------------------------
<S>                                                                 <C>                <C>
REVENUE
Revenues [note 12]                                                   2,857,151          4,037,608
Cost of revenues                                                     1,045,326          1,800,810
-------------------------------------------------------------------------------------------------
Gross profit                                                         1,811,825          2,236,798
-------------------------------------------------------------------------------------------------

EXPENSES
Sales and marketing                                                    466,954          2,718,992
Product development                                                    241,392            849,335
General and administrative                                           1,776,710          4,220,455
-------------------------------------------------------------------------------------------------
                                                                     2,485,056          7,788,782
-------------------------------------------------------------------------------------------------
Loss from operations                                                  (673,231)        (5,551,984)
Interest income                                                          4,020             85,138
Interest expense [notes 7, 8 and 9]                                   (596,097)        (3,910,517)
Gain on warrants liability [note 10]                                   242,000                 --
Other income (expense)                                                   9,509             (4,453)
-------------------------------------------------------------------------------------------------
Loss before extraordinary items and cumulative change
   in accounting principle                                          (1,013,799)        (9,381,816)
Extraordinary gain on convertible note redemptions [note 8]             58,701          1,048,373
Cumulative effect of change in accounting principle [note 10]          413,546                 --
-------------------------------------------------------------------------------------------------
Net loss                                                              (541,552)        (8,333,443)
-------------------------------------------------------------------------------------------------

Basic and diluted earnings (loss) per share
Loss before extraordinary items and cumulative change
   in accounting principle                                               (0.11)             (1.13)
Extraordinary gain on convertible note redemptions                        0.01               0.12
Cumulative effect of change in accounting principle                       0.04                 --
-------------------------------------------------------------------------------------------------
Net loss                                                                 (0.06)             (1.01)
-------------------------------------------------------------------------------------------------

Weighted average number of common shares outstanding                 9,305,391          8,284,867
-------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes


                                       20
<PAGE>

Stockgroup Information Systems Inc.


          CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)
          [See Note 1 - Nature of Business and Basis of Presentation]

Year ended December 31                                 (expressed in US dollars)

<TABLE>
<CAPTION>


                                                                                                                   Additional
                                                                                  Common stock    Common stock   paid-in capital
[note 11]                                                                          # of shares          $              $
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>            <C>            <C>
Balance at December 31, 1999                                                         8,195,000      6,761,483        261,277
Issuance of common stock pursuant to private placement                                 116,935        435,000             --
Issuance of common stock and warrants pursuant to
   a consulting agreement                                                              100,000        162,500         81,000
Fair value of detachable warrants pursuant to convertible
   note private placement, net of financing costs                                           --             --        455,546
Intrinsic value of beneficial conversion feature pursuant to convertible
   note private placement                                                                   --             --      2,751,061
Repurchase of beneficial conversion feature on partial redemption
   of outstanding convertible notes                                                         --             --     (1,089,166)
Issuance of common stock on partial conversion of
   outstanding convertible notes                                                        67,741         57,500             --
Cancellation of common stock                                                           (12,000)       (72,000)            --
Stock based compensation                                                                    --             --        143,025
Net loss                                                                                    --             --             --
--------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000                                                         8,467,676      7,344,483      2,602,743
Fair value of detachable warrants pursuant to convertible debenture
   private placement, net of financing costs                                                --             --        298,778
Intrinsic value of beneficial conversion feature pursuant to convertible
   debenture private placement                                                              --             --        190,000
Issuance of common stock on partial conversion of outstanding convertible
   notes and debentures                                                                960,640        413,664             --
Repurchase of beneficial conversion feature on partial redemption of
   outstanding convertible notes                                                            --             --        (31,551)
Intrinsic value of beneficial conversion feature pursuant to convertible
   notes private placement                                                                  --             --         32,182
Cumulative effect of change in accounting principle                                         --             --       (765,546)
Issuance of common stock for shares granted under the employee stock option plan        92,944         27,260             --
Issuance of common stock pursuant to exercise of employee stock options                600,000        173,993             --
Issuance of common stock pursuant to a consulting agreement                             10,000          9,690             --
Stock based compensation                                                                    --             --         95,408
Net loss                                                                                    --             --             --
--------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2001                                                          10,131,260      7,969,090      2,422,014
================================================================================================================================

<CAPTION>
                                                                                     Retained       Total
                                                                                     earnings    shareholders'
                                                                                   (accumulated     equity
                                                                                     deficit)    (deficiency)
[note 11]                                                                               $              $
------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>
Balance at December 31, 1999                                                       (4,259,711)     2,763,049
Issuance of common stock pursuant to private placement                                     --        435,000
Issuance of common stock and warrants pursuant to
   a consulting agreement                                                                  --        243,500
Fair value of detachable warrants pursuant to convertible
   note private placement, net of financing costs                                          --        455,546
Intrinsic value of beneficial conversion feature pursuant to convertible
   note private placement                                                                  --      2,751,061
Repurchase of beneficial conversion feature on partial redemption
   of outstanding convertible notes                                                        --     (1,089,166)
Issuance of common stock on partial conversion of
   outstanding convertible notes                                                           --         57,500
Cancellation of common stock                                                               --        (72,000)
Stock based compensation                                                                   --        143,025
Net loss                                                                           (8,333,443)    (8,333,443)
------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000                                                      (12,593,154)    (2,645,928)
Fair value of detachable warrants pursuant to convertible debenture
   private placement, net of financing costs                                               --        298,778
Intrinsic value of beneficial conversion feature pursuant to convertible
   debenture private placement                                                             --        190,000
Issuance of common stock on partial conversion of outstanding convertible
   notes and debentures                                                                    --        413,664
Repurchase of beneficial conversion feature on partial redemption of
   outstanding convertible notes                                                           --        (31,551)
Intrinsic value of beneficial conversion feature pursuant to convertible
   notes private placement                                                                 --         32,182
Cumulative effect of change in accounting principle                                        --       (765,546)
Issuance of common stock for shares granted under the employee stock option plan           --         27,260
Issuance of common stock pursuant to exercise of employee stock options                    --        173,993
Issuance of common stock pursuant to a consulting agreement                                --          9,690
Stock based compensation                                                                   --         95,408
Net loss                                                                             (541,552)      (541,552)
------------------------------------------------------------------------------------------------------------
Balance, December 31, 2001                                                        (13,134,706)    (2,743,602)
============================================================================================================
</TABLE>

See accompanying notes


                                       21
<PAGE>

Stockgroup Information Systems Inc.


                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           [See Note 1 - Nature of Business and Basis of Presentation]

<TABLE>
<CAPTION>
Year ended December 31                                                              (expressed in US dollars)

                                                                                     2001                2000
                                                                                       $                   $
----------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                <C>
OPERATING ACTIVITIES
Net loss                                                                           (541,552)          (8,333,443)
Add (deduct) non-cash items
   Amortization                                                                     191,632              203,961
   Amortization of deferred financing costs                                           8,818              244,763
   Bad debt expense                                                                 (27,299)             730,643
   Loss on disposition of property and equipment                                      8,759                   --
   Effective interest on convertible notes and debentures                           401,093            3,633,062
   Extraordinary gain on redemption of convertible notes and debentures             (58,701)          (1,048,373)
   Cumulative effect of change in accounting principle                             (413,546)                  --
   Gain on warrants liability                                                      (242,000)                  --
   Common stock issued for services                                                   9,690              243,500
   Stock based compensation                                                         122,668              143,025
----------------------------------------------------------------------------------------------------------------
                                                                                   (540,438)          (4,182,862)
Net changes in non-cash working capital
   Marketable securities                                                             (4,729)             (17,085)
   Accounts receivable                                                               73,004             (166,284)
   Prepaid expenses                                                                  55,662              771,096
   Accounts payable                                                                (437,160)              51,633
   Accrued payroll liabilities                                                      (46,706)              67,675
   Accrued interest on notes payable                                                  8,490                   --
   Interest on convertible notes and debentures                                     170,834                   --
   Deferred revenue                                                                 (57,043)             (48,558)
----------------------------------------------------------------------------------------------------------------
Cash used in operating activities                                                  (778,086)          (3,524,385)
----------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Net proceeds from issuance of common stock                                          173,993              435,000
Net proceeds from issuance of convertible notes and debentures                      479,960            2,870,000
Net proceeds from issuance of notes payable                                         100,347                   --
Repayments of convertible notes and debentures                                     (181,000)            (862,500)
Repayment of capital lease obligation                                                (5,741)                  --
Repayments of bank indebtedness, net                                                 (8,222)              (6,701)
(Repayments to) advances from shareholders                                               --               31,973
----------------------------------------------------------------------------------------------------------------
Cash provided by financing activities                                               559,337            2,467,772
----------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
Purchase of property and equipment                                                   (7,103)            (280,846)
Proceeds on disposition of property and equipment                                    31,107                   --
----------------------------------------------------------------------------------------------------------------
Cash provided by (used in) investing activities                                      24,004             (280,846)
----------------------------------------------------------------------------------------------------------------

Decrease in cash and cash equivalents                                              (194,745)          (1,337,459)
Cash and cash equivalents, beginning of year                                        321,363            1,658,822
----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year                                              126,618              321,363
================================================================================================================

Supplemental disclosure of cash flow information
Interest paid                                                                        24,170               33,000
Income taxes paid                                                                        --                   --
================================================================================================================
</TABLE>

See accompanying notes


                                       22
<PAGE>


1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Stockgroup Information Systems Inc. (the "Company") is a financial media and
technology company that provides various financial software solutions, tools,
content and services to media, corporate, and financial services companies. The
Company employs proprietary technologies that enable its clients to provide
financial data streams and news combined with fundamental, technical,
productivity, and disclosure tools to their customers, shareholders, and
employees in a cost effective manner. The Company also provides Internet
communications products for publicly traded companies and an online research
center for the investment community through its www.smallcapcenter.com financial
web site.

The Company was incorporated under the laws of Colorado on December 6, 1994. The
Company previously operated under the name Stockgroup.com Holdings, Inc. until
its name was changed in accordance with the relevant provisions of the Colorado
Business Corporations Act and pursuant to shareholder approval received at the
Company's annual general meeting held September 20, 2001.

The financial statements have been prepared by management in accordance with
accounting principles generally accepted in the United States on a going concern
basis, which contemplates the realization of assets and the discharge of
liabilities in the normal course of business for the foreseeable future.

The Company incurred an operating loss of $673,231 for the year ended December
31, 2001 [2000 - $5,551,984], and had a working capital deficiency of $3,003,364
as at December 31, 2001. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company experienced a
significant reduction in cash used in operations from $3,524,385 in 2000 to
$778,086 in 2001 as a result of restructuring activities initiated in 2001.
Management has undertaken a number of key initiatives to strengthen its capital
structure and to achieve profitable operations subsequent to December 31, 2001
(Note 15). The Company has restructured the terms of its 8% convertible notes
due March 31, 2002 such that the prepayment penalty of $288,600 and accrued
interest of $296,636 will be waived and $1,524,000 of the outstanding principal
is not due until February 6, 2004. The Company has negotiated the conversion
into common shares of the remaining $200,000 principal and accrued interest on
its 3% convertible debentures. The Company has also raised an additional
$400,000 in a private placement to finance ongoing operations. Although the
Company has taken steps to achieve profitable operations in 2002, there are no
assurances that the Company will be successful in achieving its goals.


                                       23
<PAGE>


1. NATURE OF BUSINESS AND BASIS OF PRESENTATION (cont'd.)

In view of these conditions, the ability of the Company to continue as a going
concern is uncertain and dependent upon achieving a profitable level of
operations and, if necessary, on the ability of the Company to obtain necessary
financing to fund ongoing operations. Management believes that its current and
future plans provide an opportunity to continue as a going concern. These
financial statements do not give effect to any adjustments which would be
necessary should the Company be unable to continue as a going concern and
therefore be required to realize its assets and discharge its liabilities in
other than the normal course of business and at amounts different from those
reflected in the accompanying financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries, Stockgroup Media Inc. (British Columbia, Canada),
Stockgroup Systems Ltd. (Nevada, United States) and 579818 B.C. Ltd. (British
Columbia, Canada). All significant intercompany accounts and transactions have
been eliminated.

Use of estimates

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

Revenue recognition

The Company generates its revenues from three primary sources: Public Company
Solutions, Financial Software and Content Systems, and E-Business Solutions.

Public Company Solutions consist of small-scale web site development and
maintenance, IntegratIR investor relations tools, monthly investor marketing
programs, and online advertising. Revenue from small-scale web site development
and periodic web site maintenance is recognized upon completion of the services
provided no significant obligations remain and collection of the resulting
receivable is probable. Revenues from IntegratIR, monthly investor marketing
programs, and online advertising are recognized ratably over the contract life
as the service is provided. Most of these services require an advance payment
which is recorded as deferred revenue until the services have been provided.


                                       24
<PAGE>


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd.)

Financial Software and Content Systems consists of real time, time delayed and
wireless quotes and charts, company profiles, investment data and technical
analysis. Revenue from set up fees, periodic maintenance fees and contractual
monthly licensing fees for ongoing use of financial tools and content is
recognized ratably over the contract term, which is typically twelve months.

E-Business Solutions consists of large scale, longer-term technology
development, data aggregation, system design and development and project
management services. Revenue from fixed price long term contracts is recognized
on the percentage of completion method of contract accounting based on the ratio
of actual costs incurred to total estimated contract costs. Provisions for
estimated losses on uncompleted contracts are made in the period in which such
losses are determined.

Foreign exchange

The reporting currency and the functional currency of the Company is the U.S.
dollar. The accounts of the Company's Canadian subsidiary are translated into
U.S. dollars such that monetary assets and liabilities are translated at
exchange rates in effect at the balance sheet date and non-monetary items are
translated at exchange rates prevailing at the transaction date. Operating
revenues and expenses are translated at average exchange rates prevailing during
the year. Any corresponding foreign exchange gains and losses are included in
income.

Foreign currency transactions are translated into U.S. dollars at the rate of
exchange in effect at the date of the transaction. Foreign currency balances of
monetary assets and liabilities are translated using the rate of exchange in
effect at the balance sheet date. Foreign exchange gains and losses on
transactions during the year and on the year end translation of the accounts are
included in income.

Fair value of financial instruments

The Company's financial instruments consist of cash and cash equivalents,
marketable securities, accounts receivable, bank indebtedness, accounts payable,
notes payable, convertible notes, convertible debentures and capital lease
obligation. Unless otherwise stated the fair value of the financial instruments
approximates their carrying value.


                                       25
<PAGE>


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd.)

Cash and cash equivalents

Cash and cash equivalents consist of cash and short-term deposits with original
maturities of ninety days or less and are recorded at amortized cost.

Marketable securities

Marketable securities consist of equity instruments held for trading and are
recorded at fair value based on quoted market prices. Both realized and
unrealized gains and losses are included in the statement of operations.

Deferred finance costs

Finance costs associated with the issuance of convertible notes and debentures
are deferred and amortized over the term to earliest conversion. All finance
costs have been amortized and included as interest expense in the statement of
operations.

Property and equipment

Property and equipment are carried at cost. Amortization is provided using the
straight line method over the assets estimated useful lives as follows:

     Computer equipment                            5 years
     Computer software                             2 years
     Office furniture and equipment                5 years
     Leasehold improvements                        Term of the lease

The Company changed its amortization policy in 2000 from the declining balance
method to the straight line method. The cumulative effect of this change in
accounting policy was not significant to the financial statements.


                                       26
<PAGE>


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd.)

Product development costs

Product development costs other than those incurred during the application
development stage are expensed as incurred. Costs incurred during the
application development stage are required to be capitalized and amortized over
the estimated useful life of the software. Substantially all of the Company's
product development costs are for ongoing operating and maintenance and have
been expensed in the period incurred.

Advertising costs

Advertising costs are expensed in the period incurred and are included as a
component of sales and marketing expenses. Advertising expense for the year
ended December 31, 2001 was $nil [2000 - $1,112,000].

Income taxes

The Company utilizes the liability method of accounting for income taxes. Under
this method, deferred taxes are determined based on the differences between the
financial statement and tax bases of assets and liabilities using enacted tax
rates. A valuation allowance is provided against deferred tax assets for which
it is more likely than not that the asset will not be realized.

Stock-based compensation

The Company accounts for fixed stock-based awards to employees in accordance
with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations and has adopted the disclosure-only
alternative of FASB Statement No. 123, Accounting for Stock-Based Compensation.
Accordingly, compensation expense for stock options issued to employees is
measured as the excess, if any, of the quoted market price of the Company's
stock at the date of the grant over the amount an employee must pay to acquire
the stock.


                                       27
<PAGE>


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd.)

Earnings per share

Basic earnings (loss) per share is computed based on the weighted average number
of common shares outstanding during each year. Diluted earnings (loss) per share
reflects the dilutive potential of outstanding securities using the treasury
stock method.

For the years ended December 31, 2001 and 2000, all of the Company's common
shares issuable upon the exercise of stock options, warrants and other
convertible securities were excluded from the determination of diluted loss per
share as their effect would be anti-dilutive.

Comprehensive income

Comprehensive income includes all changes in equity except those resulting from
investments by owners and distributions by owners. Comprehensive income
comprises only net income for all years presented.

Recent pronouncements

In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144 ("SFAS 144"), "Accounting for the
Impairment or Disposal of Long-Lived Assets", which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
supersedes SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of", and the accounting and reporting
provisions of Accounting Principles Board Opinion No. 30, "Reporting the Results
of Operations" for a disposal of a segment of a business. SFAS 144 is effective
for fiscal years beginning after December 15, 2001. The Company does not expect
that the adoption of the Statement will have a significant impact on its
financial position and results of operations.

Comparative figures

Certain amounts in the 2000 consolidated financial statements have been
reclassified to conform to the 2001 presentation.


                                       28
<PAGE>


3. CONCENTRATION OF CREDIT RISK

Financial instruments, which potentially subject the Company to concentrations
of credit risk, consist principally of cash and cash equivalents and trade
receivables.

The Company performs ongoing credit evaluations of its customers and maintains
allowances for potential credit losses. Amounts owing from two customers
represented 12% and 12% respectively of the total accounts receivable balance in
2001. Amounts owing from two customers represented 31% and 11% respectively of
the total accounts receivable balance in 2000. No other customers represented
greater than 10% of the total balance in any other year.

4. PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
                                                             Accumulated         Net book
                                              Cost          amortization           value
                                                $                 $                  $
-----------------------------------------------------------------------------------------
<S>                                          <C>               <C>                <C>
2001
Computer equipment                           531,682           299,841            231,841
Computer software                            110,698           110,698                 --
Office furniture and equipment               146,187            76,621             69,566
Leasehold improvements                        42,197            20,465             21,732
Assets under capital lease                    24,646             6,097             18,549
-----------------------------------------------------------------------------------------
                                             855,410           513,722            341,688
-----------------------------------------------------------------------------------------

2000
Computer equipment                           524,636           189,970            334,666
Computer software                            107,138            65,700             41,438
Office furniture and equipment               182,181            58,680            123,501
Leasehold improvements                        42,310            12,060             30,250
-----------------------------------------------------------------------------------------
                                             856,265           326,410            529,855
-----------------------------------------------------------------------------------------
</TABLE>


                                       29
<PAGE>


5. BANK INDEBTEDNESS

Bank indebtedness consists of a demand loan which bears interest at prime plus
1%, is repayable in blended monthly principal and interest payments of $591, and
is due December 31, 2002. Interest expense for the year ended December 31, 2001
was $800 [2000 - $1,300]

The Company also has an approved demand operating line of credit of $100,000
bearing interest at prime plus 1/4%. Interest expense for the year ended
December 31, 2001 was $10,700 [2000 - $8,600].

The demand loan and the operating line of credit are collateralized by a general
security agreement on all assets of the Company. The weighted average effective
prime rate for 2001 was 5.81% [2000 - 7.23%].

6. CAPITAL LEASE OBLIGATION

On May 3, 2001, the Company entered into a three year lease agreement for
computer equipment requiring monthly payments of $790 (Cdn$1,260). The
obligation at December 31 is as follows:

                                                           2001          2000
                                                             $             $
--------------------------------------------------------------------------------

Total future lease payments                               20,787            --
Less interest (effective rate during 2001 - 8%)           (1,882)           --
--------------------------------------------------------------------------------
                                                          18,905            --

Less current portion                                      (7,674)           --
--------------------------------------------------------------------------------
                                                          11,231            --
================================================================================

The following capital lease payments are required over the next three years:

                                                                           $
--------------------------------------------------------------------------------

2002                                                                     7,674
2003                                                                     8,311
2004                                                                     2,920
--------------------------------------------------------------------------------
                                                                        18,905
================================================================================


                                       30
<PAGE>


7. NOTES PAYABLE

The following table summarizes the activity under various agreements:

                                                      2001               2000
                                                        $                  $
--------------------------------------------------------------------------------

16% Notes payable, maturing July 31, 2002
   Principal                                        100,347                 --
   Accrued interest                                   8,490                 --
--------------------------------------------------------------------------------
Total notes payable                                 108,837                 --
================================================================================

On May 8, 2001 the Company entered into a Securities Purchase Agreement with an
individual related to a Director and Officer of the Company to issue $32,375
(Cdn$50,000) of secured unregistered 16% debentures. The debentures mature on
July 31, 2002. Interest accrues on the debentures at the rate of 16% per annum,
and is payable at the end of each calendar quarter and at maturity. Investors
may also choose to receive all accrued interest on the maturity date in lieu of
the quarterly payments of interest. The investor has been granted a second
floating charge over all of the Company's property, assets, and rights as
security for the amount borrowed by the Company.

On May 10, 2001, the Company entered into a Securities Purchase Agreement with a
related party investor to issue a further $35,000 of secured unregistered 16%
debentures under the same terms as those issued May 8.

On July 16, 2001, the Company entered into a Securities Purchase Agreement with
a Director and Officer of the Company to issue a further $32,972 (Cdn$50,000) of
secured unregistered 16% debentures under the same terms as those issued May 8.


                                       31
<PAGE>


8. CONVERTIBLE NOTES

                                                          2001            2000
                                                            $               $
--------------------------------------------------------------------------------

8% Convertible notes, maturing March 31, 2002
   Principal                                          1,924,000       2,200,000
   Prepayment premium                                   288,600         330,000
   Accrued interest                                     296,636         132,000
--------------------------------------------------------------------------------
                                                      2,509,236       2,662,000
================================================================================

On April 3, 2000, the Company entered into a Convertible Note Purchase Agreement
with two unaffiliated investors to issue unsecured 8% Convertible Notes
("notes") and 5-year Callable Warrants ("warrants") for gross proceeds of $3
million.

The notes mature on March 31, 2002 and became convertible into common shares
after July 31, 2000. The notes may only be converted if the Company does not
make payment on a lender's prepayment request, or if the Company seeks to prepay
the notes. The initial conversion price for the notes was $3.72. Prepayments on
the notes were subject to a tiered prepayment schedule such that all prepayments
after July 31, 2000 are payable at 115% of the principal. Interest accrues on
the notes at the rate of 8% per annum, and is payable on each conversion date
and at maturity. Interest may be paid in the form of cash or shares at the
Company's option. The lenders had the right to put back to the Company up to 25%
of the unconverted amount of the notes during any 30-day period after July 31,
2000. By November 30, 2000, the lenders had the right to put back to the Company
100% of the unconverted amount of the notes. Upon the lenders' exercise of such
right, the Company has the option of prepaying the portion of the notes sought
to be converted, such prepayment to be in accordance with the tiered prepayment
schedule set forth above. If the Company does not make such a prepayment within
10 days after its receipt of a put notice, the conversion rate of the notes and
any accrued interest changes to the lesser of (a) the initial conversion price
of $3.72, and (b) 88% of the average of the 5 lowest closing prices of the
Company's common shares during the 30 trading days prior to the date of
conversion.

In the event the notes are not prepaid or converted prior to March 21, 2002,
they will automatically convert on maturity to common shares at the lesser of
(a) the initial conversion price of $3.72, and (b) 88% of the average of the 5
lowest closing prices of the Company's common shares during the 30 trading days
prior to the date of maturity.


                                       32
<PAGE>


8. CONVERTIBLE NOTES (cont'd.)

The warrants permit the holders to acquire up to 181,818 common shares at an
exercise price of $3.30 at any time up to March 31, 2005. The warrants may be
called by the Company, at a purchase price of $.01 per underlying share, if the
stock price of the Company's common shares exceeds $6.51 for any 20 consecutive
trading days after the effective date of the registration statement, provided
that the holders have the right to exercise the warrants within 30 days after
their receipt of such a call.

The exercise price of the warrants is adjusted upon the occurrence of certain
events, including the issuance of equity or convertible instruments exchangeable
into common shares at a price below the market value of the common shares at the
time of issuance and the exercise price of the warrants. In certain
circumstances, the holders of the warrants could elect on exercise to satisfy
their obligation to pay the cash exercise price to the Company by accepting a
lesser number of common shares.

The gross proceeds of $3 million was allocated to the convertible notes and
warrants based on the relative fair value of each security at the time of
issuance. Accordingly, in 2000, $2.7 million was allocated to the notes and
$300,000 was allocated to the 181,818 lender warrants. The fair value of the
warrants was estimated using the Black-Scholes option pricing model. The
$300,000 discount for the warrants and the 15% prepayment premium of $450,000
was accrued and recorded as interest expense over the original eight month term
to earliest conversion.

The terms of the convertible notes provide the lenders with an `in-the-money'
variable conversion rate. A beneficial conversion feature on the convertible
notes was calculated at issuance based on the difference between the effective
conversion price of the allocated proceeds and the market price of the common
stock. The original amount of the beneficial conversion feature was $281,588 at
inception, however, because of the variability of the conversion ratio, it is
remeasured each reporting period until conversion, extinguishment or maturity.
As at December 31, 2000, the accumulated beneficial conversion feature on the
outstanding principal and accrued interest amounted to $2,751,061. This amount
was recorded as interest expense in 2000. The remeasurement of the beneficial
conversion feature in 2001 has not resulted in any change to the amount
previously calculated in 2000.

The Company paid $130,000 in cash for financing costs and issued additional
warrants to the placement agent to acquire up to 90,909 common shares on the
same terms as the warrants issued to the lenders. The financing costs were
allocated to the notes and lender warrants in the same relative fair value
manner. The fair value of the placement agent warrants amounted to $187,273 and
was estimated using the same Black-Scholes pricing assumptions as the lender
warrants.


                                       33
<PAGE>


8. CONVERTIBLE NOTES (cont'd.)

On August 10 and 17, 2000 respectively, the two note holders exercised their
rights to put 25% of the notes, or $750,000 back to the Company. The Company
extinguished the $750,000 principal, the $112,500 put premium and the $22,290 in
accrued interest for cash of $884,790. The cash redemption resulted in a
$1,048,373 extraordinary gain, which included the repurchase of the beneficial
conversion feature at the date of extinguishment in the amount of $1,089,166 net
of $40,793 in deferred financing costs.

On November 14, 2000, one of the note holders converted principal of $50,000
plus prepayment premium and accrued interest into 67,741 common shares.

On January 19, 2001, the exercise price and the number of callable warrants
outstanding were adjusted as a result of the 3% convertible debentures and
warrants described in note 9 being offered at a lower exercise price. The
exercise price was decreased from $3.30 to $3.00 and the number of callable
warrants were increased from 272,727 to 300,000 [Note 11[d]].

On February 6, 2001, one of the note holders converted principal of $25,000 plus
prepayment premium and accrued interest into 67,508 common shares.

On June 28, 2001, one of the note holders converted principal of $70,000 plus
prepayment premium and accrued interest into 284,305 common shares.

On September 30, 2001, the Company extinguished a total of $181,000 in principal
to one of the note holders. This extinguishment was made pursuant to an
agreement whereby the note holder would refer business to the Company and the
proceeds of such business would be used to repay the principal amount
outstanding. These cash redemptions resulted in a $58,701 extraordinary gain at
the date of extinguishment consisting of the repurchase of the beneficial
conversion feature of $31,551 and the elimination of the prepayment premium of
$27,150.

At December 31, 2001 holders of the convertible notes have the right to
immediately convert $855,000 of the notes, in whole or in part, into common
shares of the Company at any time. The holders also have the right to put the
remaining $1,069,000 to the Company at any time, in whole or in part, after
which they may convert the amount of the notes subject to each put notice into
common shares 10 days after each put notice.

On February 6, 2002 the Company and the two lenders reached an agreement to
restructure the terms and conditions of the 8% convertible notes [Note 15[a]].


                                       34
<PAGE>


9. CONVERTIBLE DEBENTURES

                                                              2001       2000
                                                                $          $
--------------------------------------------------------------------------------

3% Convertible debentures, maturing December 31, 2003
   Principal                                                200,000         --
   Unamortized warrants discount                            (84,013)        --
   Unamortized beneficial conversion feature                (51,490)        --
   Accrued interest                                           6,198         --
--------------------------------------------------------------------------------
                                                             70,695         --
================================================================================

On January 19, 2001, the Company entered into a Securities Purchase Agreement
with unaffiliated investors to issue $500,000 of unsecured 3% convertible
debentures ("debentures"), and 4-year warrants ("warrants").

The debentures mature on December 31, 2003 and are convertible into common
shares at any time. The maximum and minimum conversion prices for the debentures
are $1.00 and $0.50 respectively. The actual conversion price of the debentures
will be determined upon receipt of a conversion notice and will be lessor of (a)
the maximum conversion price, or (b) 80% of the 2 lowest closing prices of the
Company's common shares during the 10 trading days prior to the date of
conversion, but in no case less than the minimum conversion price. Interest
accrues on the debentures at the rate of 3% per annum, and is payable on each
conversion date, at the end of each calendar quarter and at maturity. Interest
may be paid in the form of cash or shares at the Company's option.

The warrants were issued on a pro-rata basis, with each debenture holder
receiving one Series A warrant for each dollar of debentures purchased and three
Series B warrants for each five dollars of debentures purchased. The exercise
price of the warrants is $1.00 per share for the Series A warrants and $2.00 per
share for the Series B warrants. The warrants permit the holders to acquire up
to an aggregate of 800,000 common shares at any time up to December 31, 2004.

The maximum and minimum conversion prices of the debentures and the exercise
price of the warrants are subject to adjustment upon the happening of certain
events, such as the payment of a stock dividend, a stock split, a corporate
merger or spin-off, or the issuance of securities at a price below the
conversion price.


                                       35
<PAGE>


9. CONVERTIBLE DEBENTURES (cont'd.)

The gross proceeds of $500,000 have been allocated to the convertible debenture
and the Series A and B warrants based on the relative fair value of each
security at the time of issuance. Accordingly, $190,000 was allocated to the
notes and $310,000 was allocated to the Series A and B warrants in aggregate.
The fair value of the warrants was estimated using the Black-Scholes
option-pricing model.

The terms of the convertible debenture provide the holders with an in-the-money
variable conversion rate. A beneficial conversion feature on the convertible
debenture of $190,000 has been recognized, and will be subject to remeasurement
each reporting period until conversion, extinguishment or maturity. As of
December 31, 2001, the remeasurement of the beneficial conversion feature has
not resulted in any change to the original amount calculated on the date of
issuance.

The beneficial conversion feature and the debt discount are subject to accretion
over the term to maturity of the debenture.

On July 17, 2001, one of the debenture holders converted principal of $300,000
plus accrued interest into 608,827 common shares. This conversion resulted in
the immediate recognition of $254,554 in interest expense related to the
previously unamortized debt discount and beneficial conversion feature.

On March 15, 2002, the Company and the 3% convertible debenture holders agreed
to an amendment to the original Securities Purchase Agreement [Note].


                                       36
<PAGE>


10. WARRANTS LIABILITY AND CUMULATIVE CHANGE IN ACCOUNTING PRINCIPLE

The Emerging Issues Task Force Abstract No. 00-19, Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
Stock ("EITF 00-19") became applicable to the Company's warrants on June 30,
2001. Since the number of shares issuable in the event of exercise of the
callable warrants is not currently subject to an explicit limit, the Company's
300,000 callable and 800,000 other warrants were presented as a liability at
their fair value as at June 30, 2001. The fair value of the warrants liability
was estimated using the Black-Scholes option pricing model. The $413,546
difference between the previous carrying value of the warrants in additional
paid in capital of $765,546 and their fair value at June 30, 2001 of $352,000
has been recorded as the cumulative effect of a change in accounting principle
on prior periods. This $413,546 change in accounting principle has decreased the
net loss per share for the year ended December 31, 2001 by $0.04.

The warrants liability will continue to be remeasured at fair value thereafter
until such time as the number of shares issuable in the event of exercise of the
callable warrants is fixed to an explicit limit. All future fair value
remeasurements since the June 30, 2001 change in accounting principle will be
recorded in the statement of operations. At December 31, 2001, the fair value of
the warrants liability has decreased to $110,000 and resulted in a gain of
$242,000.

11. SHARE CAPITAL

[a]  Authorized

The Company is authorized to issue up to 75,000,000 shares of common stock and
5,000,000 shares of preferred stock. The authorized capital of the Company was
increased from 50,000,000 shares of common stock to 75,000,000 shares of common
stock pursuant to a vote of the shareholders at the Company's annual general
meeting held September 20, 2001. No preferred stock are issued and outstanding
in the years presented.


                                       37
<PAGE>


11. SHARE CAPITAL (cont'd.)

[b]  Common stock

2001

The Company issued an aggregate of 960,640 common shares pursuant to conversions
of convertible notes and debentures [notes 8 and 9].

On January 19, 2001, the Company issued warrants to purchase 800,000 common
shares [note 9]. The fair value of the warrants issued, net of financing costs,
amounted to $298,778 and was recorded as an increase to additional paid-in
capital.

The Company issued an aggregate of 92,944 common shares directly to employees in
consideration for past services resulting in a compensation expense and an
increase in share capital of $27,260.

The Company issued an aggregate of 600,000 common shares to employees pursuant
to the exercise of stock options for total proceeds of $173,993.

The Company issued 10,000 common shares in exchange for consulting services. The
transaction was recorded at a fair value of $9,690 for the common shares based
on the closing stock price on the January 18, 2001 date of the agreement.

2000

On August 17, 2000, the Company completed a private placement to an investor for
the issuance of 116,935 common shares at $3.72 per share for net cash proceeds
of $435,000.

On August 24, 2000, the Company issued 100,000 common shares and 100,000
warrants in exchange for consulting services. The exercise price of the warrants
was $4.00. The transaction was recorded at a fair value of $162,500 for the
common shares based on the closing stock price on the date of the agreement and
$81,000 for the warrants which was estimated using the Black-Scholes option
pricing model. On June 30, 2001, the 100,000 warrants were cancelled for no
consideration [Note 11[d]].


                                       38
<PAGE>


11. SHARE CAPITAL (cont'd.)

[c]  Stock options

1999, 2000 and 2001 Incentive Stock Option Plans

The Company's 1999 Incentive Stock Option Plan became effective March 11, 1999,
and authorizes a total of 2,000,000 common shares for issuance.

The Company's 2000 Incentive Stock Option Plan became effective on November 10,
2000, and authorizes a total of 500,000 common shares for issuance.

The Company's 2001 Incentive Stock Option Plan became effective September 20,
2001, and authorizes a total of 1,000,000 common shares for issuance.

The 1999, 2000 and 2001 Incentive Stock Option Plans (collectively the "Plans")
entitles directors, employees and consultants to purchase common shares of the
Company.

Options issued generally begin vesting one year after the date of grant, at
which time vesting occurs in equal instalments of one-fifth of the grant total
per year for a period of five years. Options immediately become exercisable once
vested. Any options that do not vest as the result of a grantee leaving the
Company are forfeited and the common shares underlying them are returned to the
reserve. The Board has the authority to vary the vesting provisions of grants at
its discretion.


                                       39
<PAGE>


11. SHARE CAPITAL (cont'd.)

Activity under the Plans is set forth below:

<TABLE>
<CAPTION>
                                                                  Options Outstanding
                                                   ---------------------------------------------------
                                    Shares                                               Weighted
                                 available for        Number of         Price per         average
                                     grant             shares             share       exercise price
------------------------------------------------------------------------------------------------------
<S>                              <C>                 <C>              <C>                  <C>
Balance at December 31, 1999        216,700          1,783,300        $0.01 - 4.44         $1.80
Additional shares authorized        500,000                 --                  --            --
Options granted                    (586,500)           586,500        $0.59 - 4.36         $1.79
Options forfeited                   383,800           (383,800)       $0.94 - 4.34         $2.28
------------------------------------------------------------------------------------------------------
Balance at December 31, 2000        514,000          1,986,000        $0.01 - 4.44         $1.70
Additional shares authorized      1,000,000                 --                  --            --
Options granted                  (2,184,644)         2,184,644        $0.12 - 3.58         $0.29
Options forfeited                 1,061,800         (1,061,800)       $0.20 - 4.44         $1.49
Options exercised                        --           (692,944)       $0.14 - 3.58         $0.34
------------------------------------------------------------------------------------------------------
Balance at December 31, 2001        391,156          2,415,900        $0.01 - 2.75         $0.91
======================================================================================================
</TABLE>

The weighted average remaining contractual life and weighted average exercise
price of options outstanding and of options exercisable as of December 31, 2001
are as follows:

<TABLE>
<CAPTION>
                                    Options Outstanding                   Options Exercisable
                          -----------------------------------------     --------------------------
                                         Weighted
                                          average         Weighted                       Weighted
                          Number of      remaining         average                        average
Range of                   shares       contractual       exercise        Shares         exercise
exercise prices          outstanding   life (years)         price       exercisable        price
------------------------------------------------------------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>               <C>
$0.01 - 0.49            1,265,700           5.16            $0.20        227,500           $0.31
$0.50 - 0.99              583,200           2.80            $0.91        319,920           $0.94
$1.00 - 2.75              567,000           3.16            $2.50        255,000           $2.49
------------------------------------------------------------------------------------------------------
                        2,415,900           4.12            $0.91        802,420           $1.26
======================================================================================================
</TABLE>

For the year ended December 31, 2001 the Company recorded $122,668 [2000 -
$143,025] in stock based compensation expense. Of this total, $95,408 [2000 -
$128,925] is a result of options granted to an employee in 1999 with an exercise
price less than the market price of the common stock on the date of grant. The
remaining $27,260 [2000 - $14,100] is a result of common shares granted to
employees and options granted to consultants in exchange for services which have
been measured at fair value on the commitment date.


                                       40
<PAGE>


11. SHARE CAPITAL (cont'd.)

As at December 31, 2001, the Company has $82,127 [2000 - $177,535] in deferred
compensation to be expensed in future periods based on the vesting terms of the
underlying fixed plan options.

Pro forma disclosure of stock based compensation

Pro forma information regarding results of operations and earnings (loss) per
share is required by FASB Statement No. 123 ("SFAS 123") for stock-based awards
to employees as if the Company had accounted for such awards using a valuation
method permitted under SFAS 123.

The fair value of the Company's stock-based awards granted to employees in 2001
and 2000 was estimated using the Black-Scholes option pricing model. The option
pricing assumptions include a dividend yield of 0%, a weighted average expected
life of 4.5 years [2000 - 4.2 years], a risk free interest rate of 4.45% [2000 -
5.41%] and an expected volatility of 216% [2000 - 205%]. The weighted average
fair value of options granted during 2001 was $0.12 [2000 - $1.51]. For pro
forma purposes, the estimated value of the Company's stock-based awards to
employees is amortized over the vesting period of the underlying options. The
effect on the Company's net loss and loss per share of applying SFAS 123 to the
Company's stock-based awards to employees would approximate the following:

                                                     2001               2000
                                                       $                  $
--------------------------------------------------------------------------------

Net loss                                          (541,552)        (8,333,443)
Compensation expense                              (380,148)          (778,095)
--------------------------------------------------------------------------------
Pro forma net loss                                (921,700)        (9,111,538)
================================================================================

Basic and diluted loss per share
As reported                                         (0.06)             (1.01)
Pro forma                                           (0.10)             (1.10)
================================================================================


                                       41
<PAGE>


11. SHARE CAPITAL (cont'd.)

[d]  Warrants

As at December 31, 2001, common stock issuable pursuant to warrants outstanding
is as follows:

<TABLE>
<CAPTION>
                    Warrants                                            Warrants
                 Outstanding at   Warrants    Warrants    Warrants   Outstanding at  Exercise
                    January 1      Issued     Exercised   Cancelled    December 31     Price      Expiry
                        #             #           #           #             #            $         Date
-----------------------------------------------------------------------------------------------------------------------
<S>                      <C>      <C>              <C>         <C>      <C>            <C>      <C>
2000
Series 1 warrants        --       272,727          --          --       272,727        3.30     March 31, 2005
Series 2 warrants        --       100,000          --          --       100,000        4.00     August 24, 2002, or
                                                                                                August 24, 2001
                                                                                                if registered
-----------------------------------------------------------------------------------------------------------------------
                         --       372,727          --          --       372,727
=======================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                    Warrants                                            Warrants
                 Outstanding at   Warrants    Warrants    Warrants   Outstanding at  Exercise
                    January 1      Issued     Exercised   Cancelled    December 31     Price      Expiry
                        #             #           #           #             #            $         Date
-----------------------------------------------------------------------------------------------------------------------
<S>                 <C>           <C>              <C>    <C>         <C>              <C>      <C>
2001
Series 1 warrants   272,727        27,273          --          --       300,000        3.00     March 31, 2005
Series 2 warrants   100,000            --          --     100,000            --          --     Cancelled
Series 3A warrants       --       500,000          --          --       500,000        1.00     December 31, 2004
Series 3B warrants       --       300,000          --          --       300,000        2.00     December 31, 2004
-----------------------------------------------------------------------------------------------------------------------
                    372,727       827,273          --     100,000     1,100,000
=======================================================================================================================
</TABLE>


                                       42
<PAGE>


12. SEGMENTED INFORMATION

The Company operates in one industry segment and derives its revenue from the
following services:

                                                       2001             2000
                                                         $                $
--------------------------------------------------------------------------------

Public company solutions                           1,643,023        2,550,373
Financial software and content systems               580,409           87,728
E-business solutions                                 633,719        1,399,507
--------------------------------------------------------------------------------
                                                   2,857,151        4,037,608
================================================================================

Revenue from external customers, by country of origin, is as follows:

                                                       2001             2000
                                                         $                $
--------------------------------------------------------------------------------

Canada                                             2,655,477        3,556,753
United States                                        201,674          480,855
--------------------------------------------------------------------------------
                                                   2,857,151        4,037,608
================================================================================

During 2001, the Company had one customer whose revenue represented 20% of total
revenue. During 2000, the Company had three customers whose revenue represented
17%, 12% and 11% of total revenue, respectively.

Substantially all of the Company's property and equipment are located in Canada.


                                       43
<PAGE>


13. INCOME TAXES

The Company is subject to United States federal and state income taxes at an
approximate rate of 35%. The reconciliation of the provision (recovery) for
income taxes before the extraordinary gain, at the United States federal
statutory rate compared to the Company's income tax expense as reported is as
follows:

                                                         2001            2000
                                                           $               $
--------------------------------------------------------------------------------

Tax expense (recovery) at U.S. statutory rates        (190,000)     (3,753,000)
Lower (higher) effective income taxes of
   Canadian subsidiary                                 (26,000)       (467,000)
Change in valuation allowance                         (852,000)      2,348,000
Change in opening valuation allowance for the
   reduction in future enacted tax rates             1,004,000              --
Non-deductible expenses                                 64,000       1,872,000
--------------------------------------------------------------------------------
Income tax provision (recovery)                             --              --
================================================================================

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company has
recognized a valuation allowance for those deferred tax assets for which it is
more likely than not that realization will not occur.

Significant components of the Company's deferred tax assets as of December 31
are as follows:

                                                         2001            2000
                                                           $               $
--------------------------------------------------------------------------------

Net operating loss carryforwards                     3,091,000       3,987,000
Property and equipment                                 149,000         105,000
--------------------------------------------------------------------------------
Total deferred tax assets                            3,240,000       4,092,000
Valuation allowance                                 (3,240,000)     (4,092,000)
--------------------------------------------------------------------------------
Net deferred tax assets                                     --              --
================================================================================


                                       44
<PAGE>


13.  INCOME TAXES (cont'd.)

The net operating loss carryforwards expire as follows:

                                                                         $
--------------------------------------------------------------------------------

Canada
2006                                                               2,641,000
2007                                                               2,836,000
2008                                                                 274,000
--------------------------------------------------------------------------------
                                                                   5,751,000
U.S.
2019                                                               1,173,000
2020                                                               1,494,000
2021                                                                 249,000
--------------------------------------------------------------------------------
                                                                   2,916,000
--------------------------------------------------------------------------------

Total                                                              8,667,000
================================================================================


14.  COMMITMENTS AND CONTINGENCIES

[a]  The Company has operating lease commitments with respect to office premises
     with minimum annual payments as follows:

                                                                         $
--------------------------------------------------------------------------------

     2002                                                            192,000
     2003                                                            178,000
     2004                                                            246,000
     2005                                                            279,000
     2006                                                            157,000
--------------------------------------------------------------------------------
                                                                   1,052,000
================================================================================

Rental expense included in general and administrative expenses for the year
ended December 31, 2001 was $289,000 [2000 - $371,000].


                                       45
<PAGE>


14.  COMMITMENTS AND CONTINGENCIES (cont'd.)

[b]  The Company is currently involved in litigation with a customer to collect
     amounts owing pursuant to a contract entered into in September, 2000. The
     defendant provided a $100,000 deposit and contracted the Company to provide
     certain lead generation services. The Company delivered the requested
     services throughout October and November, 2000, however, the defendant
     defaulted on all additional payments. The Company is suing the defendant
     for the $351,800 balance owing, plus interest and costs. The defendant has
     filed a statement of defense and counterclaim to recover the $100,000
     deposit. As of December 31, 2001, no further action had been taken by
     either party and no court date has been set. Although management currently
     believes the outcome of the litigation will be in the Company's favour,
     they have not elected to aggressively pursue the litigation at this time.
     The Company has made no provision for the counterclaim in the financial
     statements and any settlement or final award will be reflected in the
     statement of operations as the litigation is resolved.

15.  SUBSEQUENT EVENTS

[a]  On February 6, 2002 the Company and the two lenders reached an agreement to
     restructure the terms and conditions of the 8% convertible notes. The
     lenders agreed to waive the 15% prepayment premium of $288,600 and the
     accrued interest to date of $296,636 and converted $100,000 of the
     principal balance due into 666,700 common shares of the Company at a
     conversion price of $0.15. The remaining principal balance due of
     $1,824,000 matures on February 6, 2004, is non-interest bearing and is
     convertible into common shares at any time at a fixed conversion rate of
     $0.50.

     If the lenders do not convert, $300,000 is to be repaid in cash. The first
     cash payment of $100,000 is due June 30, 2002 and the remaining $200,000
     will be repaid in ten quarterly payments of $20,000 beginning September 30,
     2002. In the event that the Company fails to make any of its scheduled cash
     payments, the conversion price will be immediately reduced to 88% of the
     average of the 5 lowest closing prices of the Company's common shares
     during the 30 trading days prior to the date of conversion.

     The maturity date of any outstanding balance not converted by February 6,
     2004 will be extended for two years and the conversion price will be
     reduced to 88% of the average of the 5 lowest closing prices of the
     Company's common shares during the 30 trading days prior to the date of
     conversion.


                                       46
<PAGE>


15.  SUBSEQUENT EVENTS (cont'd.)

[b]  On March 15, 2002, the Company and the 3% convertible debenture holders
     agreed to an amendment to the original Securities Purchase Agreement. The
     debenture holders agreed to immediately convert the outstanding principal
     of $200,000 and accrued interest into common shares of the Company at the
     minimum conversion price of $0.50 and the Company agreed to modify the
     existing terms of the Series A and B warrants. The exercise price of the
     Series A warrants has been reduced from $1.00 to $0.25. The exercise price
     of the Series B warrants has been reduced from $2.00 to $0.50. The expiry
     date for both the Series A and B warrants has been extended to July 31,
     2005.

[c]  On March 25, 2002, the Company completed a private placement for 2,000,000
     units at $0.20 per unit for cash proceeds of $400,000. Each unit consists
     of one common share and one share purchase warrant. The warrants are
     exercisable at any time for one year from the date of issuance at $0.25 per
     share.


                                       47
<PAGE>


Part III

Item 9. Directors, executive officers, promoters and control persons; compliance
with section 16(a) of the exchange act.

The following table sets forth, as of December 31, 2001, the name, age and
position of the Company's directors, executive officers and other significant
employees.

  Name                      Age  Position with the Company
  ----                      ---  -------------------------
  Marcus A. New............ 31   Chairman of the Board, Chief Executive Officer
  Leslie Landes............ 57   Director, President and Chief Operating Officer
  Craig Faulkner........... 31   Director
  David Caddey............. 52   Director
  Louis de Boer II......... 49   Director
  David Gillard............ 32   Chief Financial Officer

The backgrounds of the Company's Directors, Officers and significant employees
are as follows:

Marcus New, B.A., Founder, Chairman of the Board and CEO

Marcus New is the founder, and has been Chairman and Chief Executive Officer
since May 1995, of Stockgroup. Mr. New formed the vision for Stockgroup in 1995
and developed the company from an idea to the goal of becoming a leader in
information solutions for financial services companies and a leading provider of
investor relations products for public companies on the Internet. Over the last
five years he has grown the company by re-investing internally generated capital
and has successfully built a substantial corporate client roster. Similar to
other successful Internet pioneers, Mr. New created Stockgroup based on
identification of the ways in which the Internet could be used to provide
services that were not otherwise available. Prior to that, Mr. New was VP of
AmCan Public Relations Group and is currently a director of Iwave.com Inc., an
online information company. Mr. New earned a Bachelor of Arts degree majoring in
business from Trinity Western University.

Leslie A. Landes, Director, President and Chief Operating Officer

Leslie Landes has served as Stockgroup's President and Chief Operating Officer
since August 1998 and has been an advisor to Stockgroup since shortly after its
inception. Since January 1992, Mr. Landes has served as the President and as a
director of Landes Enterprises Limited, which he founded, and which is an
interim turnaround management consulting company that advised and counseled
clients in several industries, including telecommunications and technology on
issues ranging from mergers and acquisitions to international marketing
campaigns. Prior to forming Landes Enterprises in 1992 Mr. Landes spent 13 years
with the Jim Pattison Group, Canada's third largest privately held company with
sales in excess of CDN$3 Billion, with over 13,000 employees. He served as
President of The Jim Pattison Sign Group, Outdoor Group, and Communications
Group, which included radio and television stations and paid subscription print
publications. Ultimately he was appointed President of Jim Pattison Industries
Ltd. and Senior Vice President of the parent Jim Pattison Group, responsible for
the Group's acquisitions and divestitures, and with involvement in the
management of the Group's 50 diversified companies. He successfully initiated
and completed the acquisitions of other companies in a number of diverse
industries in which the Group was active. Under his direction the Sign Group was
built into the largest electric sign company in the world. Mr. Landes is also a
director of TIR Systems Ltd., a lighting technology company, which is a public
company.

Craig Faulkner, Director

Mr. Faulkner is one of the founding partners of Stockgroup. Mr. Faulkner's skill
and knowledge of database-to-web solutions brings a history of innovative and
dynamic solutions. Early in his career, Mr. Faulkner led Stockgroup to
co-develop one of the


                                       48
<PAGE>

first portfolio tracking tools, LivequoteSRG, fully based on the use of Java.
Mr. Faulkner managed the programming and information management team at
Stockgroup, initiated solutions with data and hardware vendors, while
maintaining a senior management role and board membership. Under Mr. Faulkner's
direction, Stockgroup implemented a sophisticated blend of both Sun Solaris
and Microsoft solutions. Mr. Faulkner is also part of the advisory boards for
Brand Fidelity an online service addressing the commercial naming and branding
business, and Serveyor, a leading Managed Service Provider (MSP) for Internet
Availability Monitoring, Performance Measurement and Quality testing. On March
28, 2002, Craig resigned as Chief Technology Officer of Stockgroup but will
remain on the Board of Directors.

David N. Caddey, B.Sc., M.Sc., Director

David Caddey has been a Director of Stockgroup since May 1995 and has over 26
years experience in the business and program management field. Since July 1998
he has served as an Executive Vice President of MacDonald Dettwiler and
Associates Ltd., a space technology and satellite services company that designs,
manufactures, operates and markets a broad range of space products and services.
During this period he has also served as the General Manager of that company's
Space Missions Group where he is responsible for managing the construction of
the Radarsat-2 spacecraft and associated ground infrastructure program, valued
at over $350 million, as well as the construction of the Space Station Mobile
Servicing System. From July 1994 to June 1998, Mr. Caddey worked as a Vice
President and General Manager of the Space and Defense Systems Business Area of
MacDonald Dettwiler and Associates Ltd.. In this capacity he was responsible for
marketing and sales, project management, technical management and post delivery
support. From 1990 to 1994 he served as Vice President and General Manager of
Geo-information Systems of MacDonald Dettwiler and Associates Ltd., where he
managed the development of Radarsat I Ground Segment Program.

Louis de Boer II, Director

Louis de Boer has served as a director of Stockgroup since October 1999. Since
May of 1998, he has served as President of MediaFutures, Inc., which provides
consulting services to clients in the Internet and cable broadcasting
industries, including such companies as Hearst New Media, Cox Enterprises,
Rainbow Programming as well as several emerging growth companies. From July 2000
through June 2001, he also served as CEO of Automatic Media Incorporated, and
Internet media and software firm based in New York City. From June 1996 to April
1998, he was Chief Executive Officer at New Century Network, an online company
formed by a consortium of the nine leading US newspaper organizations,
including, Advance Communications, Cox Communications, The Chicago Tribune,
Hearst, Gannett, Knight-Ridder, Inc., The New York Times, The Washington Post
and Times-Mirror. From 1977 to December 1994, Mr. de Boer was employed at HBO
culminating in the positions of Executive Vice President of HBO Inc. and
President of its International division, where he played an instrumental role in
helping negotiate and broker deals that significantly increased that company's
presence in its international markets. Mr. de Boer is also a director of Click
TV, a television production company in the UK and Priva Technologies, both of
which are private companies.

David Gillard, CGA, Chief Financial Officer

     Mr. Gillard has been Chief Financial Officer of Stockgroup since November
2001, and prior to that he had been with the Company in the capacity of
Controller since March 2000. Prior to joining Stockgroup, he had been in the
accounting field for 10 years, including most recently over 6 years in the
accounting department of Maynards Industries Ltd., one of the largest asset
conversion companies in North America. He is a graduate of the British Columbia
Institute of Technology, and has been a Certified General Accountant since 1996.


                                       49
<PAGE>


Item 10. Executive Compensation

The following summary compensation table reflects all compensation awarded to,
earned by, or paid to the Chief Executive Officer and the President for all
services rendered to the Company in all capacities during each of the years
ended December 31, 1999, 2000 and 2001. None of the other executive officers
received salary and bonus exceeding $100,000 during those years.

Summary Compensation Table
--------------------------------------------------------------------------------
                                                      Securities     All Other
Name and Principal Position     Year      Salary      Underlying    Compensation
                                             $        Options (#)         $
--------------------------------------------------------------------------------
Marcus New                      1999     $111,073       325,000         $   0
Chief Executive Officer,        2000     $147,460             0         $   0
Chairman and Director           2001     $ 97,194       100,000         $   0
--------------------------------------------------------------------------------
Leslie Landes                   1999     $122,654       745,800         $   0
President &                     2000     $145,668             0         $   0
Chief Operating Officer         2001     $ 97,194       533,200         $   0
================================================================================

Option Grants In the Last Fiscal Year To Named Executive Officers
--------------------------------------------------------------------------------
Name                       Securities   % Of Total      Exercise    Expiration
                           Underlying   Options         Price       Date
                           Options      Granted to      $
                           Granted      Employees
                           (1)(2)       In Year
--------------------------------------------------------------------------------
Marcus New                 100,000      4.6%            0.12        18-Sep-07
Leslie Landes              533,200      24.4%           0.22        10-Aug-07
--------------------------------------------------------------------------------
(1)  All of the above options are subject to the terms of our Stock Option Plan
     and are exercisable only as they vest. The options have a term of 6 years
     from date of grant.

(2)  All options were granted at an exercise price equal to the fair market
     value of our common stock on the date of grant.

No Bonuses were paid to named executive officers in any of the above years. No
Restricted Stock Awards (RSAs), Stock Appreciation Rights (SARs), or Long Term
Incentive Plans (LTIPs) were awarded to named executive officers in any of the
above years.

On August 10, 2001, for services rendered to Stockgroup, Leslie Landes was
granted 533,200 options at an exercise price of $0.22 per share, which vest over
three years beginning February 10, 2002. On September 18, 2001, for services
rendered to Stockgroup, Marcus New was granted options to purchase 100,000
shares of common stock at an exercise price of $0.12 per share. These options
fully vest on March 18, 2002.

The following table summarizes the option holdings of the named executive
officers as at December 31, 2001:

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

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                 Number of Shares       Value of Unexercised
                                                 underlying             In-the-Money
                                                 Unexercised Options    Options at
                                                 At December 31, 2001   December 31, 2001
--------------------------------------------------------------------------------------------
Name                 Shares
                     acquired       Value        Exer-      Unexer-     Exer-      Unexer-
                     on Exercise    Realized     cisable    cisable     cisable    cisable
--------------------------------------------------------------------------------------------
<S>                  <C>            <C>          <C>        <C>         <C>        <C>
Marcus New           0              0            130,000    295,000     $    0     $       0
Leslie Landes        0              0            319,920    851,480     $    0     $  11,550
============================================================================================
</TABLE>


                                       50
<PAGE>

Directors' Compensation

Stockgroup compensates its outside Directors by issuing options to acquire
shares of common stock which fully vest after one year of service on the board
of directors. Mr. David Caddey and Mr. Lee de Boer were each granted 50,000 such
options on August 10, 2001 that have an exercise price of $.22 per share and
will fully vest on August 10, 2002.

Employment and Severance Agreement

Stockgroup has an employment agreement with the President Leslie Landes. This
agreement was signed on August 4, 1998 and has a term of 5 years. Under the
agreement Mr. Landes is scheduled to receive a minimum compensation of
CDN$150,000 per annum. The agreement may be terminated by Stockgroup or Mr.
Landes on 30 days notice, and if termination is initiated by Stockgroup, Mr.
Landes is to receive a severance payment equal to 12 months compensation.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth as of December 31, 2001 the beneficial ownership
of common stock of each person known to the Company who owns more than 5% of
issued and outstanding common stock.

--------------------------------------------------------------------------------
Name and address* of                Amount and Nature              Percent of
Beneficial Owner                    of Beneficial Ownership        Class
--------------------------------------------------------------------------------
Marcus New                          2,498,500                      24.66%
Yvonne New                          2,366,500                      23.36%
518464 B.C. Ltd.                    1,945,000                      19.20%
Craig Faulkner                        912,000                       9.00%
569358 B.C. Ltd.                      665,000                       6.56%
================================================================================

*Unless otherwise referenced, the address for each of the above mentioned
parties is c/o Stockgroup Information Systems Inc., Suite 500 - 750 West Pender
Street, Vancouver, B.C. Canada V6C 2T7.

On March 11, 1999, Stockgroup entered into a Share Exchange and Share Purchase
Agreement with 579818 B.C. Limited, a British Columbia corporation; Stock
Research Group, Inc., a British Columbia corporation; and all of the
shareholders of Stock Research Group. Under that Agreement the Company acquired
all of the issued and outstanding shares of Stock Research Group, in
consideration of which 579818 B.C. Limited issued to the Stock Research Group
shareholders 3,900,000 Class A Exchangeable Shares. Stockgroup also issued to
Stock Trans, Inc., its transfer agent, 3,900,000 shares of common stock, to hold
as trustee for the benefit of the Stock Research Group shareholders. The
exchangeable shares may be converted, at the option of the holder, into an equal
number of shares of common stock held by the trustee. Pending any such
conversion, each holder of the exchangeable shares may direct the trustee to
vote an equivalent number of shares of common stock. The trustee has no
discretion as to voting or disposition of common stock.

As a result of these transactions, each of the former Stock Research Group
shareholders has the right to vote, or to direct the trustee to vote on their
behalf, a number of shares of common stock equal to the number of exchangeable
shares held of record by them. In the aggregate, shares of common stock issued
to the trustee represent approximately 38% of issued and outstanding shares of
common stock.

The trust created by these transactions will continue until the earliest to
occur of the following events:


                                       51
<PAGE>


o    no outstanding exchangeable shares are held by any former Stock Research
     Group shareholder;

o    each of 579818 B.C. Limited and Stockgroup acts in writing to terminate the
     trust and such termination is approved by the holders of the exchangeable
     shares; and

o    December 31, 2098.

Of the amount shown for Marcus New, 52% (or 1,222,500 shares) of the
exchangeable shares are owned by Yvonne New, Mr. New's wife.

Mr. Marcus New owns directly 171,500 Exchangeable shares and his wife, Yvonne
New, owns directly 250,000 exchangeable shares. They both indirectly, through
518464 B.C. Ltd., a British Columbia company owned by Mr. New as to 50% and his
wife Yvonne New as to 50%, 1,945,000 exchangeable shares. Accordingly, Marcus
and Yvonne New beneficially own 2,366,500 exchangeable shares of common stock,
which represent approximately 23.36% of issued and outstanding common stock.

Mr. New also owns 2,000 shares of common stock which were purchased in the open
market. On March 11, 1999, Mr. New was granted options to purchase 325,000
shares of common stock at an exercise price of $2.50, of which 130,000 options
had vested by December 31, 2001. On September 18, 2001, Mr. New was also granted
options to purchase 100,000 shares of common stock at an exercise price of $0.12
per share. These options fully vest on March 18, 2002, and expire on September
17, 2007. In combination with Mr. New's 2,366,500 exchangeable shares, 130,000
vested options, and 2,000 shares of common stock, Mr. New holds a beneficial
ownership position in the company of 2,498,500 shares representing approximately
24.66% of issued and outstanding common stock as of December 31, 2001.

Of the amount shown for Craig Faulkner, Mr. Faulkner owns directly 169,000
exchangeable shares and indirectly, through 569358 B.C. Ltd., a British Columbia
company owned by Mr. Faulkner, 665,000 exchangeable shares. Mr. Faulkner has
been granted options to acquire 195,000 shares of common stock at an exercise
price of $2.50 per share, of which 78,000 options had vested at December 31,
2001. Mr. Faulkner has also been granted options to acquire 100,000 shares of
common stock at an exercise price of $0.12 per share. Mr. Faulkner was granted
these options on September 18, 2001. The options fully vest on March 18, 2002.
Mr. Faulkner, through his direct and indirect holdings, and 78,000 vested
options, beneficially owns 912,000 shares representing 9.00% of the issued and
outstanding common stock as of December 31, 2001.

Item 11.  Security Ownership of Management

The tables below and the paragraphs that follow present certain information
concerning directors, executive officers and significant employees. Mr. David
Caddey is Mr. Marcus New's wife's uncle. Other than this relationship, none of
the Company's directors, executive officers or significant employees has any
family relationship with any other director, executive officer or significant
employee.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Name                 Age      Position with Company           Executive   Shares          Percent
                                                              Officer /   Beneficially      of
                                                              Director    Owned            Class
                                                              Since       Dec 31 2001
---------------------------------------------------------------------------------------------------
<S>                  <C>      <C>                             <C>         <C>              <C>
Directors:

Marcus A. New        31       Chairman of the Board,
                              Chief Executive Officer,
                              Director                        05/04/95    2,498,500        24.66%

Craig D. Faulkner    31       Chief Technology Officer,
                              Director                        05/04/95      912,000         9.00%

Leslie Landes        57       President,
                              Chief Operating Officer,
                              Director                        08/04/98      319,920         3.16%

David Caddey         52       Director                        05/04/95       80,000         0.79%

Louis de Boer II     49       Director                        10/07/99       20,000         0.20%

David Gillard        32       Chief Financial Officer         11/16/01        7,500         0.07%
---------------------------------------------------------------------------------------------------
All Directors, Executive Officers and
Significant employees as a group                                          3,837,920        37.88%
===================================================================================================
</TABLE>


                                       52
<PAGE>

Of the amount shown for Mr. Caddey, 50% (or 30,000 shares) are owned by Ms.
Donna Caddey, Mr. Caddey's wife.

Mr. David Caddey and his wife, Donna Caddey, each own directly 20,000
exchangeable shares. In addition, 20,000 shares of common stock are owned
jointly by David and Donna Caddey. Accordingly, Mr. and Ms. Caddey beneficially
owns 60,000 shares of common stock which represents approximately 0.59% of
issued and outstanding common stock. Mr. Caddey has been granted options to
purchase 20,000 shares of common stock at an exercise price of $2.50 per share,
of which 100% were vested at December 31, 2001. Mr. Caddey has also been granted
options to purchase 50,000 shares of common stock at an exercise price of $0.22
per share. Mr. Caddey was granted these options on August 10, 2001. The options
have a six-year term and full vesting of the 50,000 options will take place on
August 10, 2002, and the beneficial ownership calculation here does not include
any shares of common stock underlying these options. In combination with his
direct and indirect holdings of 40,000 exchangeable shares and direct and
indirect holdings of 20,000 shares of common stock, and 20,000 vested options,
Mr. Caddey beneficially owns 80,000 shares representing approximately 0.79% of
issued and outstanding common stock.

On March 11, 1999 Mr. Leslie Landes had been granted options to purchase 745,800
shares of common stock at a price of $0.01 per share as to 105,000 shares and
$0.94 per shares as to the balance. As of December 31, 2001 107,600 of the $0.94
options had been forfeited. As at December 31, 2001, 319,920 of the options had
vested. On August 10, 2001 Mr. Landes was granted an additional 533,200 options
at an exercise price of $0.22, of which none had vested by the end of 2001. As
at December 31, 2001, Mr. Landes' options provide him with beneficial ownership
of 319,920 of issued and outstanding common stock.

Mr. Louis de Boer II, has been granted options to purchase 20,000 shares of
common stock at an exercise price of $2.75 per share. Mr. de Boer was granted
these options on October 7, 1999. The options have a six-year term and full
vesting of the 20,000 options occurred on October 7, 2000. On August 10, 2001,
Mr. de Boer was granted further options to purchase 50,000 shares of common
stock at an exercise price of $0.22 per share, with a six year term and full
vesting on August 10, 2002. As at December 31, 2001, Mr. de Boer's vested
options provide him with beneficial ownership of 20,000 shares of common stock,
representing 0.20% of issued and outstanding common stock.

Item 12. Certain Relationships and Related Transactions

During the last two years, there have been no transactions or proposed
transactions to which the Company was or is to be a party, in which any persons
as set out by item 404 of Regulation S-B had or is to have a direct or indirect
material interest.

Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

EXHIBIT NUMBER  DESCRIPTION OF EXHIBIT AND FILING REFERENCE
--------------  -------------------------------------------

      2.1       Share Exchange and Share Purchase Agreement dated March 11, 1999
                effecting a change in control of Registrant - incorporated by
                reference to Form 8K filed March 19, 1999, Form 8K/A filed March
                24, 1999 and Form 8K/A filed May 10, 1999

      3.1       Articles of Incorporation & Bylaws - incorporated by reference
                to Form 10SB12G filed January 29, 1998


                                         53
<PAGE>

      3.2       Articles of Amendment to the Articles of Incorporation - Name
                Change from Stockgroup.com Holdings Inc. to Stockgroup
                Information Systems Inc., incorporated by reference to Form 8-K
                filed October 11, 2001 and filed herewith

      4.1       1999 Incentive Stock Option Plan - incorporated by reference to
                Form S-8 filed November 16, 1999

      4.2       Convertible Notes and Warrants Agreement dated March 31, 2000 -
                incorporated by reference to Form SB 2 and SB-2/A filed May 26,
                2000 and August 1, 2000 respectively

      4.3       Securities Purchase Agreement dated January 19, 2001 -
                incorporated by reference to Form 8K filed January 30, 2001

      4.4       2000 Incentive Stock Option Plan - incorporated by reference to
                Form S-8 filed May 15, 2001

      9.1       Exchange and Voting Agreement incorporated by reference to Form
                8K filed March 19, 1999

      13.1      Forms 10QSB for the quarters ended March 31, 1999, June 30, 1999
                and September 30, 1999 - incorporated by reference to filings
                made on May 13, 1999, July 12, 1999, and November 12, 1999
                respectively

      13.2      Forms 10KSB and 10KSB/A for the year ended December 31, 1999 -
                incorporated by reference to filings made on March 30, 2000 and
                May 1, 2000 respectively.

      13.3      Forms 10QSB for the quarters ended March 31, 2000, June 30, 2000
                and September 30, 2000 - incorporated by reference to filings
                made on May 5, 2000, August 14, 2000, and November 14, 2000
                respectively

      13.4      Form 10KSB for the year ended December 31, 2000 - incorporated
                by reference to filing made on March 20, 2001

      13.5      Form 10QSB for the quarters ended March 31, 2001, June 30, 2001
                and September 30, 2001 - incorporated by reference to filings
                made on May 14, 2001, August 14, 2001, and November 7, 2001
                respectively

      16.1      Letter regarding change in certifying accountant - incorporated
                by reference to Form 8K filed July 9, 1999

      22.1      Published report regarding matters submitted to vote -
                incorporated by reference to Form DEF 14A filed September 10,
                1999

      22.2      Published report regarding matters submitted to vote -
                incorporated by reference to Form DEF 14A filed October 16, 2000

      22.3      Published report regarding matters submitted to vote -
                incorporated by reference to Form DEF 14A filed August 15, 2001

      23.1      Consent of Independent Auditors - filed herewith below as Item
                23.1

No reports on Form 8-K have been filed within the last quarter of the period
covered by this report.


                                       54
<PAGE>


Signatures

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

Stockgroup Information Systems, Inc.
    (Registrant)

Dated:  March 28, 2002
By:

/s/  Marcus A. New
------------------------------------------------
Marcus A. New, Chairman, Chief Executive Officer


/s/  David Caddey
------------------------------------------------
David Caddey, Director


/s/  Louis de Boer II
------------------------------------------------
Louis de Boer II, Director


/s/ Leslie Landes
------------------------------------------------
Leslie Landes, Director, President
& Chief Operating Officer


/s/ Craig Faulkner
------------------------------------------------
Craig Faulkner, Director, Chief Technology Officer


/s/ David Gillard
------------------------------------------------
David Gillard, Chief Financial Officer,
Secretary and Treasurer


                                       55
<PAGE>


EXHIBIT INDEX

Exhibit Number   Description                                                Page
--------------------------------------------------------------------------------
2.1              Share Exchange and Share Purchase Agreement                N/A
3.1              Articles of Incorporation & Bylaws                         N/A
3.2              Articles of Amendment to the Articles of Incorporation     57
4.1              1999 Incentive Stock Option Plan                           N/A
4.2              Convertible Notes and Warrants Agreement                   N/A
4.3              Securities Purchase Agreement                              N/A
4.4              2000 Incentive Stock Option Plan                           N/A
9.1              Exchange and Voting Agreement                              N/A
13.1             Forms 10QSB for the quarters ended March 31, 1999,
                 June 30, 1999 and September 30, 1999                       N/A
13.2             Forms 10KSB and 10KSB/A for the year ended
                 December 31, 1999                                          N/A
13.3             Forms 10QSB for the quarters ended March 31, 2000,
                 June 30, 2000 and September 30, 2000                       N/A
13.4             Form 10KSB for the year ended December 31, 2000            N/A
13.5             Form 10QSB for the quarters ended March 31, 2001,
                 June 30, 2001 and September 30, 2001                       N/A
16.1             Letter regarding change in certifying accountant           N/A
22.1             Published report regarding matters submitted to vote       N/A
22.2             Published report regarding matters submitted to vote       N/A
22.3             Published report regarding matters submitted to vote       N/A
23.1             Consent of Independent Auditors                            59


                                       56