<PAGE>

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

                                   FORM 10-K

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                      OR

[_]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ to _____

                       Commission File Number 000-31637

                             GENOMICA CORPORATION
            (Exact name of registrant as specified in its charter)


           Delaware                                      23-2821818
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

  1745 38th Street, Boulder, Colorado                    80301-2630
(Address of principal executive office)                  (Zip Code)

      Registrant's telephone number, including area code:  (720) 565-4500


       Securities registered pursuant to Section 12(b) of the Act:  None

      Securities registered pursuant to Section 12(g) of the Act:  Common
                       Stock, par value $.001 per share


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X]   No [_]

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

The aggregate market value of the registrant's voting common stock held as of
March 12, 2001 by non-affiliates of the registrant was approximately $48.0
million.

As of March 12, 2001, registrant had 22,730,234 shares of its $0.001 par value
common stock outstanding.

                               ________________

                      DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III (Items 10, 11, 12 and 13) is incorporated
by reference to portions of the registrant's definitive proxy statement for the
2001 Annual Meeting of Stockholders which will be filed with the Securities and
Exchange Commission within 120 days of December 31, 2000.

                               ________________


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                             GENOMICA CORPORATION
                          ANNUAL REPORT ON FORM 10-K
                               DECEMBER 31, 2000

                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I

Item 1.  Business...........................................................  1

Item 2.  Properties......................................................... 10

Item 3.  Legal Proceedings.................................................. 11

Item 4.  Submission of Matters to a Vote of Security Holders................ 11

PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder
         Matters............................................................ 20

Item 6.  Selected Financial Data............................................ 22

Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operation............................................... 23

Item 7A. Quantitative and Qualitative Disclosures about Market Risk......... 27

Item 8.  Financial Statements and Supplementary Data........................ 27

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosures.............................................. 27

PART III

Item 10. Directors and Executive Officers of the Registrant................. 27

Item 11. Executive Compensation............................................. 27

Item 12. Security Ownership of Certain Beneficial Owners and Management..... 27

Item 13. Certain Relationships and Related Transactions..................... 27

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K... 28

SIGNATURES.................................................................. 50





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                   SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This report on Form 10-K contains forward-looking statements of Genomica
Corporation within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that are subject to the "safe
harbor" created by those sections. The forward-looking statements include, but
are not limited to: statements related to the failure to successfully market and
sell our products; failure to develop new products; competition; technological
change; general economic conditions; variability of license and other revenue;
failure to satisfy performance obligations; failure to successfully transition
our Discovery Manager product to a new technology base; failure to enter into
collaborative agreements; and changes in industry practice.

Discussions containing such forward-looking statements may be found in
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations." These forward-looking statements involve certain risks
and uncertainties that could cause our actual results to differ materially from
those in such forward-looking statements. We disclaim any obligation to update
these forward-looking statements as a result of subsequent events. The business
risks discussed in "Factors That May Affect Our Results" on pages 11 through 19,
among other things, should be considered in evaluating our prospects and future
financial performance.

We use market data and industry forecasts throughout this report, which we have
obtained from internal surveys, market research, publicly available information
and industry publications.  Industry publications generally state that the
information they provide has been obtained from sources believed to be reliable,
but that the accuracy and completeness of such information is not guaranteed.
Similarly, we believe that the surveys and market research we or others have
performed are reliable, but we have not independently verified this information.

PART I

GENOMICA/TM/, Discovery Manager/TM/ and Linkmapper/TM/ are trademarks owned by
Genomica Corporation.

Item 1.  Business

This description contains certain forward-looking statements that involve risks
and uncertainties.  When used in this report, the words "intend," "anticipate,"
"believe," "estimate," "plan" and "expect" and similar expressions as they
relate to us are included to identify forward-looking statements.  Our actual
results could differ materially from the results discussed in the forward-
looking statements as a result of certain of the risks set forth herein and
elsewhere in this report on Form 10-K.  We assume no obligation to update any
forward-looking statements contained in this report.

Overview

We are a provider of innovative software products and services that are designed
to enable pharmaceutical and biotechnology researchers to accelerate the drug
discovery and development process.  Discovery Manager, our first product, is
used for genomics research, including genetic research, gene discovery and
pharmacogenomics.  This product allows researchers to turn the vast volumes of
gene, SNP, protein and patient data from diverse sources into information useful
for drug discovery.  We license Discovery Manager to leading genomics-based
research organizations, including AstraZeneca, GlaxoSmithKline, Pfizer, National
Institutes of Health, University of Oxford, and the National Cancer Institute.
We have a strategic alliance with Applied Biosystems, Inc. to develop software
products to be used with its industry-leading hardware and software systems for
drug discovery.  We also have signed a letter of intent with Celera Genomics to
enter into a strategic alliance to develop a special "Celera Edition" of
Discovery Manager for use with the Celera Discovery System's Genome Reference
Database.

Challenges of Using Genomic Data

Pharmaceutical and biotechnology researchers are increasingly turning to
genomics to improve the efficiency of the drug discovery process.  These
researchers need bioinformatics tools to effectively manage the large quantities
and complexities of data being generated by genomics research. Bioinformatics is
the application of computer technologies to collect, manage, analyze and link
biological data.  The key challenges of using genomic data in the drug discovery
and development process are:



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  .    Unprecedented volumes of data. Improvements in genetic research
       methodologies and related tools are producing unprecedented quantities of
       genetic data, creating massive data management problems for organizations
       conducting genomics research. These problems are accelerating as leading
       research organizations are utilizing the substantially complete
       sequencing of the human genome. Public sequence databases are growing
       exponentially. Some of these databases exceeded 11 billion bases of
       sequence data and more than 10 million records at the end of 2000.
       Experiments or analyses involving these data can rapidly expand the total
       data volume. The use of SNPs in drug research illustrates the effect of
       experiments on data volume. The SNP Consortium announced it has
       identified over 800,000 SNPs. Identifying all of these SNPs in a group of
       1,000 patients would generate over 800,000,000 individual SNP scores.
       Similarly, a single pharmacogenomics experiment could entail analysis of
       approximately 100,000 different sites in a patient's DNA, so that a 1,000
       patient study would generate approximately 100,000,000 data points.

  .    Diversity of data sources. Genomic research and data generation is being
       performed in thousands of different locations throughout the world.
       Genomic projects generally involve a diverse group of scientists, such as
       clinicians, geneticists and biologists, each working on their own type of
       data. Furthermore, these projects often involve multiple organizations
       working together. These groups often represent, classify and store their
       data in different ways.

  .    Lack of broad genomic-specific tools. Many organizations currently
       collect, store, and analyze their genomic data using a patchwork of
       public domain, free or low-fee software, off-the-shelf, non-scientific
       desktop applications such as spreadsheets and internally developed
       bioinformatics tools. This can result in researchers using a variety of
       non-standard, non-integrated, non-scientific and unsupported software
       tools. Many genomic researchers also rely on time-consuming and error-
       prone manual approaches to handle their bioinformatics needs.

  .    Short supply of bioinformaticists. Genomic-based research is heavily
       dependent on sophisticated computer applications that are typically
       created and maintained by bioinformaticists. The supply of individuals
       with training or experience in both genomics and the development of
       computer-based information technology is limited.

  .    Difficulty of data visualization/presentation. Researchers need to
       visualize the large quantities of complex genomic data and their
       relationships to perform analyses and derive meaningful results.
       Visualization of large quantities of highly interrelated data is a
       challenging software problem.

  .    Data security concerns. Research organizations are concerned about access
       to and the security of the data they produce and use. Security issues are
       compounded when multiple organizations are collaborating on a project. A
       security breach could compromise or even ruin an entire drug discovery
       effort, potentially resulting in the loss of substantial profits.
       Bioinformatics tools must provide security features that reliably ensure
       the desired type and level of security required by each research
       organization.

Our Solution

We offer proprietary bioinformatics solutions designed to address the challenges
of using genomic data in the drug discovery and development process.  Our
Discovery Manager product solution offers:

  .    Data standardization. We provide a standard representation of diverse
       types and formats of genomic information, including both publicly
       available and proprietary genomic data. Our process of standardization
       allows our customers to compare and cross-analyze information from varied
       sets of genomic data. This can result in significant savings in time and
       fewer user errors.

  .    Data integration. Our products bring together in one database information
       contained in many publicly available and proprietary genomic data sets.
       Our products also integrate different types of genomic data from research
       sources such as pharmacogenomic, high-throughput genotyping, SNP and
       sequence data.



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  .    High scalability. Our products have been designed to handle massive data
       sets and large numbers of users. We believe our products will be able to
       meet the needs of the largest pharmaceutical and biotechnology companies
       in the world.

  .    Broad suite of data analysis tools. Our products' proprietary software
       tools enable researchers such as clinicians, epidemiologists, geneticists
       and molecular biologists to easily sort and analyze genomic information.

  .    Practical visualization tools. Our products provide a practical way to
       show complex genomic information in simple-to-understand formats such as
       tables, graphs, charts and reports.

  .    Security. Our products include state-of-the-art redundancy, back-up and
       encryption systems to ensure minimal exposure to systems failure or
       unauthorized access. We employ rigorous electronic security measures to
       protect our customers' data and to restrict unauthorized access to such
       data from non-approved users both within and outside client
       organizations.

  .    Professional services. We support our products by offering our customers
       product integration, scientific consulting and technical consulting
       services.

Our Strategy

Our objective is to provide pharmaceutical and biotechnology researchers with
the most scientifically adept bioinformatics tools and services for drug
discovery and development.  The key elements of our strategy to achieve our
objective include:

  .    Expand our product offerings. We intend to significantly extend our
       product offerings to include modules in other areas of drug discovery and
       development such as gene and protein expression analysis and protein
       function prediction. We are currently developing the next generation of
       Discovery Manager to be Internet compatible. We believe that our new
       technology choices of Java for application and advanced user interface
       programming, Hypertext Markup Language (HTML) for programming web browser
       interfaces, eXtensible Markup Language (XML) for data exchange, and
       Oracle as the database for storing all of the genomic data, will meet
       customer requirements and provide a stable foundation for the foreseeable
       future. In addition to developing products internally and in
       collaboration with our strategic partners, we plan to selectively acquire
       complementary businesses and products.

  .    Establish significant industry collaborations. We intend to establish
       product development and distribution alliances with companies in the drug
       discovery and development market that have strong market positions and
       technologies complementary to ours, including companies that manufacture
       devices to generate genomic data, provide genomic data content or have
       developed other scientific software development tools. We believe that
       these collaborations will provide us with access to broader markets and
       accelerated market penetration. We plan to add, in collaboration with
       some of these companies, new modules or features to our products that
       work with their technology and hardware. As part of this strategy, we
       also intend to offer reduced functionality versions of most of our
       products. We expect that these entry-level products will sell for a lower
       price, but in greater quantities, than the enterprise-level versions of
       our products. These entry-level products should provide the opportunity
       for future upgrade sales to enterprise-level products.

  .    Implement application service provider strategy. We intend to offer our
       customers the option to access our products via the Internet without the
       need to install and maintain the software on their own equipment. This
       approach, commonly called being an application service provider, or ASP,
       should broaden and accelerate the adoption of our products by lowering
       initial capital investment, minimizing implementation time and effort,
       providing convenient scalability, offering affordable payment options and
       reducing the information technology burden for our customers.

  .    Continue scientific leadership. We believe our close interaction with
       commercial and academic scientific leaders has been a major factor in
       establishing Discovery Manager as one of the most comprehensive and
       scientifically advanced bioinformatics products available to the genomics
       industry. We intend to advance our scientific leadership by deepening and
       expanding our relationships with scientific leaders in the field of


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       genomics. We rely on these relationships to stay abreast of cutting edge
       developments in the field and to identify and address new customer needs.

  .    Increase sales and marketing capacity. We intend to expand our direct
       sales force to sell our enterprise-level product in the United States and
       major international markets. We also intend to pursue a multifaceted
       marketing strategy to increase Genomica brand awareness and to
       substantially increase our number of qualified customer leads. One of the
       key goals of our sales personnel is to increase the number of users of
       our product at existing customers.

Strategic Alliances

We have entered into a strategic alliance with Applied Biosystems to license
certain components of our software technology that will be designed to operate
with Applied Biosystems' genotyping instruments that are used in the gene
discovery and analysis process.  By integrating our software technology with
Applied Biosystems' instruments, we believe each company's customers will be
able to perform their gene research and data analysis more rapidly and
effectively.  In December 2000, we delivered certain components of our software
technology under our agreement with Applied Biosystems.  In October 2000, we
delivered our Linkmapper product under a separate agreement to develop
analytical software applications for Applied Biosystems.  Through December 31,
2000, we have not recognized any revenue from this relationship.  Applied
Biosystems began marketing the Linkmapper product to its customer base in 2001.

We also have signed a letter of intent with Celera Genomics to enter into a
strategic alliance to develop a special "Celera Edition" of Discovery Manager
for use with the Celera Discovery System's Genome Reference Database.  The
letter of intent contemplates our joint development of an edition of Discovery
Manager integrated with Celera's Discovery System.  We anticipate that this
integrated product would enable Celera's customers to seamlessly navigate
between the Celera Edition of Discovery Manager and Celera's Discovery System
Genome Reference Database.

Discovery Manager/TM/

Discovery Manager is our core bioinformatics product.  It is an integrated suite
of software tools and a database template for genomics research.  The database
can be filled with genomic data from the user's own research as well as publicly
available and other sources.  Our tools include sophisticated scientific
algorithms designed for easy use by genomic researchers without the assistance
of bioinformaticists.  Discovery Manager enables individual or collaborating
researchers to access, store, manipulate, analyze, annotate and integrate
genomic data from a variety of sources.  We believe that Discovery Manager is
the only commercially available product that integrates human sequence, genetic
map, genotype, phenotype and clinical information.

Supported disciplines.  We developed Discovery Manager to be used by researchers
in a broad range of disciplines including:

  .    Clinical genetics. Clinical geneticists identify patients and collect
       their medical data. Discovery Manager allows these researchers to store
       and view patient information in a simple graphical format, which can show
       the medical and genetic data of each patient as well as parent and
       sibling genetic relationships among family members, called pedigrees.

  .    Epidemiology. Epidemiologists study the genetic and environmental causes
       for disease. Discovery Manager helps these researchers analyze and
       determine how a genetic trait or environmental factor is distributed
       among people in a population.

  .    Statistical genetics. Statistical geneticists identify the regions of DNA
       that determine a particular trait. Discovery Manager helps these
       researchers group individuals together and test various hypotheses
       regarding the portion of DNA to which a trait is linked.

  .    Human genetics. Human geneticists identify the location of genes using a
       variety of sophisticated analytical approaches. Discovery Manager helps
       these researchers study the specific genes of each family member.


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  .    Molecular biology. Molecular biologists determine the function of genes.
       Discovery Manager helps these researchers organize and analyze genetic
       map and sequence data to isolate genes and determine their function.

  .    Pharmacogenomics. Pharmacogenomics researchers determine the genetic
       basis for why a drug works for some people but not others. Discovery
       Manager helps these researchers examine the genetic variations of a group
       of patients with similar drug responses.

Key tools.  Discovery Manager provides three key tool sets that are used by
different types of researchers to facilitate the interpretation of data relevant
to the drug discovery and development process:

  .    Sequence analysis tools. Sequence analysis is the examination of a
       specific DNA sequence to understand the structure and function of the
       sequence. Discovery Manager provides tools for finding genes in human DNA
       sequences and comparing two or more sequences for similarity.

  .    Genetic analysis tools. Genetic analysis is the isolation and analysis of
       DNA variations in families and unrelated populations. Discovery Manager
       provides tools to integrate, manipulate, edit and analyze genetic data.

  .    Map analysis tools. Map analysis is the construction and comparison of
       maps containing different representations of genetic information.
       Discovery Manager provides tools that support the graphical viewing,
       manipulation and comparison of maps that are created using well-known
       algorithms.

Discovery Manager database.  A key component of Discovery Manager is a central
repository of genomic data compiled from many sources:

  .    Legacy data. Data that researchers previously have accumulated on various
       systems and in various formats.

  .    New data.  Results from experiments performed using Discovery Manager.

  .    Reference Database. Our proprietary Reference Database, described below,
       is comprised of 13 publicly available genomic databases from major
       international genome research centers. Each of these public databases has
       completed the peer review quality control process of the National
       Institutes of Health. In addition, we standardize and quality check this
       data before including it in the Reference Database.

  .    Other public data. If a customer wishes to incorporate data from sources
       other than those in the Reference Database, the customer can convert it
       into a common format and import it into Discovery Manager. Customers can
       also access the National Center for Biotechnology Information and other
       websites of interest directly from Discovery Manager. Researchers use
       information from these websites to annotate their database.

Reference Database.  We offer our proprietary database, the Reference Database,
as an option to licensees of Discovery Manager.  Our Reference Database compiles
into one database and in one common format all of the information from 13
publicly available databases.  Researchers no longer need to access the
individual remote databases.  As a result, they are able to easily and uniformly
query these distinct databases, resulting in significant time savings and
reduced risk of user errors.

Common user interface.  Discovery Manager addresses many important aspects of
genomics research from a common user interface.  This interface permits
researchers to access, use and compare data from a single database.  With simple
point-and-click operations, researchers can map, compare, query and graphically
display data in formats commonly used in the industry.  Using annotation tools,
researchers may enrich data with additional information, such as experiment
details, literature references and direct links to websites of interest.  The
common user interface also enables many different types of researchers to use
the same data and system to do their part of the analysis.



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Security.  Because of the potential value of proprietary genomic information,
security is important to our customers.  Discovery Manager provides security and
access features that enable system administrators to assign user accounts and
passwords, provide users with access to authorized projects and allow management
to review the work progress within the genomic project while insuring the
privacy of sensitive project data.

We regularly upgrade Discovery Manager to keep pace with the latest advances in
algorithms, tools and technology.  Customer input plays a key role in the
definition of these upgrades.  We also regularly upgrade the contents of the
Reference Database to include newly available information.  We intend to expand
the Reference Database to include other public databases and additional
databases of non-human data.  We also intend to develop new products to expand
into other areas of drug discovery and development and new technologies.

Linkmapper/TM/

Linkmapper is our first product resulting from a development and distribution
alliance with Applied Biosystems.  We completed development and delivered the
Linkmapper product to Applied Biosystems in October 2000.  Applied Biosystems
began marketing this product along with its own hardware and software product
lines in 2001.  Linkmapper offers reduced functionality from our Discovery
Manager product and it was developed on our Java and Oracle technology platform.
Applied Biosystems will pay us a royalty payment for each unit licensed to its
customers.  We also will share in any revenues received by Applied Biosystems
from entering into customer software support and maintenance agreements related
to Linkmapper.

Linkmapper provides researchers with a powerful set of software applications for
manipulating, organizing, and analyzing genetic data that is generated from
genotyping hardware systems manufactured and sold by Applied Biosystems.
Linkmapper enables researchers, who are customers of Applied Biosystems, to
perform allele-calling functionality, quality checking of data and genetic data
management and analysis in one integrated system.  This end-to-end connectivity
from the hardware instrumentation and software applications is expected to
significantly enhance downstream data analysis for creating genetic maps.

We believe that Linkmapper, as an entry-level product, will sell at a lower
price but in greater quantities, than our enterprise-level products such as
Discovery Manager.  We also believe that Applied Biosystems' broad and well-
established distribution channel will reduce our need to build a substantial
sales force to market and sell this product.  We anticipate that after a period
of usage, Linkmapper customers will upgrade from this product line to our
enterprise-level products, such as Discovery Manager.

Technology

We designed Discovery Manager to support the unique needs of drug discovery and
development researchers.  We selected technologies to handle very large and
complex data sets and provide users with simple-to-use data visualization
technology.  Because researchers most often work in teams, our products securely
operate in a network environment designed to allow collaboration among hundreds
of researchers.  We believe that Discovery Manager offers the broadest set of
software tools for genomics research of any commercially available product.

Our software uses "object-oriented" technology as a simple way of modeling
biological data and their relationships, such as patients and their associated
DNA sequences.  An object is a combination of related data, such as patient
name, age and height.  We invested 40 person-years to create a collection of
over 400 objects to represent the core biological entities that are part of drug
discovery and development.  A key benefit of our use of object-oriented
technology is that once the core biological objects have been defined, it
becomes easier to add new features to keep pace with advances in genomic
science.

Current architecture.  The current software structure, or architecture, of
Discovery Manager is divided into two key operating components, referred to as a
client and a server.  The client is the easy-to-use graphical interface that
operates on a standard desktop computer used by the researcher.  The server
consists of the scientific applications and databases that operate on a powerful
computer that provides processing services to all the clients.

The Discovery Manager client component was developed using a commercially
available programming language known as VisualWorks for Smalltalk.  The server
component was developed using a commercially available database management
system known as GemStone/S.



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Next-generation architecture.  We are currently developing the next generation
of Discovery Manager to be Internet compatible.  The new architecture will have
three key operating components, referred to as a client, an application server
and a database server.  We expect the new client component to continue to
provide a set of visualization tools to simplify organizing, querying and
analyzing complex genomic information.  The client will allow users to interact
with Discovery Manager through a standard Java-based web browser, such as
Netscape Navigator or Microsoft Explorer.  The application server component will
consist of scientific applications developed using Java technology.  The
database server component will consist of Oracle Corporation's Oracle 8i
relational database management system.

We are transitioning to this new technology architecture primarily because we
believe drug discovery and development companies have selected the Oracle
database technology as a standard operating environment for their genomic
research and because many customers have expressed an interest in moving to
Internet-compatible applications.  We believe that our new technology choices of
Java for application and advanced user interface programming, Hypertext Markup
Language (HTML) for programming web browser interfaces, extensible Markup
Language (XML) for data exchange, and Oracle as the database for storing all of
the genomic data, will meet customer requirements and provide a stable
foundation for the foreseeable future.  We delivered our first of several
products on the new architecture in 2000 and we are scheduled to complete the
development of this new technology architecture in 2001.  We will transition all
existing customers to the redeveloped product at no additional cost to them.

Research and Development

As of March 1, 2001, we had 85 employees working in research and development.
We intend to transfer all development resources to developing the redeveloped
product once all customers have transitioned to the new Discovery Manager
product.  Our research and development expenses were $2.3 million in 1998 and
$4.0 million in 1999, excluding non-cash charges totaling $846,000 associated
with deferred compensation.  For the year ended December 31, 2000, our research
and development expenses were $7.6 million, excluding non-cash charges totaling
$4.4 million associated with deferred compensation.  We expect that research and
development expenses will continue to increase.

Consulting and Scientific Services

We currently offer limited consulting services that are included in the price of
Discovery Manager.  We offer a full range of consulting services on a fee-for-
service basis in conjunction with Discovery Manager, including the following:

  .    Product integration. Helping customers integrate the Discovery Manager
       product suite into their bioinformatics departments and scientific
       workflow.

  .    Technical consulting. Providing custom programming, technical guidance
       and tools development for bioinformatics needs.

  .    Scientific consulting. Helping customers with their genomics research.
       Examples of this service include designing scientific experiments,
       formulas and algorithms.

We intend to expand our research and development and scientific service
personnel if demand for these services increase.

Customers

We license our products and provide services to pharmaceutical and biotechnology
companies and academic institutions in the United States and Western Europe.
The following is a partial list of our current customers:

AstraZeneca PLC
Aventis
Genome Therapeutics



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<PAGE>

GlaxoSmithKline, Inc.
National Cancer Institute
National Institutes of Health
Orchid Biosciences, Inc.
Oxagen Limited
Pfizer
University of Oxford Wellcome Trust Centre for Human Genetics
Xenon Genetics
Yale University

We licensed our first products in 1998 utilizing a small direct sales force of
two account managers, no field scientists and limited marketing expenses.  We
only began building our sales and marketing organization in the second half of
1999 and all of 2000 by hiring additional account managers and increasing our
marketing expenses.  As a result of our small direct sales force during 1999 and
2000, we were limited in our ability to identify potential customers and to
perform the necessary steps required to obtain new customers.  We intend to
significantly increase our sales and marketing personnel as we build our sales
and distribution capabilities.

We believe potential customers who decline to purchase our products may believe
that their own internal bioinformatics departments can develop software
applications to meet their needs, may prefer running software applications on a
relational database management system, or state that their research efforts have
not yet advanced to the stage of utilizing the scientific applications that our
Discovery Manager offers.

As pharmacogenomics expands, we believe our products will play a key role in
both genetic analysis and clinical trial data gathering and processing.  We also
expect to increase sales to contract research organizations and healthcare
providers.  We intend to target agricultural biotechnology companies involved in
genomic research.

For the year ended December 31, 2000, the customers listed above accounted for
nearly all of our revenue.  Of this amount, AstraZeneca accounted for 32% of our
revenue, GlaxoSmithKline accounted for 21% of our revenue, Oxagen accounted for
15% of our revenue and Pfizer accounted for 11% of our revenue.  We expect that
these four customers will continue to account for a high percentage of our total
revenue for the immediate future.

Sales and Marketing

Direct Sales

We sell our enterprise-level product and services in North America and Western
Europe through a direct sales force to pharmaceutical and biotechnology
companies and academic institutions.  Our direct sales force is divided into
three regions: U.S. East Coast, U.S. West Coast and Western Europe, based in the
United Kingdom.  We combine an account manager with a field scientist, who
together demonstrate the business and scientific value of our product to our
potential customers.  As of March 1, 2001, we had seven individuals in our sales
department, including two sales directors, three account managers, one
administrative assistant and our vice president of sales.  We are currently
recruiting additional sales people.

Indirect Sales

We intend to augment our direct sales effort with indirect sales channels
established through collaborations with third parties.  Indirect sales channels
are expected to give us access to sales forces that are much larger than our
own.  Through these sales forces, we believe we can increase and accelerate our
market penetration. We believe the following types of indirect sales channels
are viable for our products:

  .    Distributors outside core territories. In markets where there are
       insufficient sales opportunities to justify a direct presence, or
       barriers to entry in the markets are high, we may establish distributor
       relationships.

  .    Strategic industry collaborations. We have recently entered into a
       product development and reseller agreement with Applied Biosystems to aid
       our indirect sales efforts. We intend to establish product development
       and distribution alliances with other companies in the drug discovery and
       development market that have strong market positions and technologies
       complementary to ours. We also plan to add, in



                                       8
<PAGE>

       collaboration with some of these companies, new modules or features to
       our products that work with their technology and hardware.

  .    Consultants and systems integrators. We intend to establish a services
       partnership program with consultants and systems integrators who provide
       professional services to our targeted customer base. We believe
       consultants and systems integrators are in a strong position to recommend
       our solutions to their services customers.

Marketing

To support our sales force, our marketing team is focused on creating a
consistent, targeted message that increases awareness of our brand name and
solutions.  We intend to expand our use of marketing programs such as print and
online advertising, direct mail and conference exhibits.

As a part of our marketing efforts, we provide our product and other support to
some of the following leading genomics research institutions at no cost to them.
We believe these institutions set the trends of how genomics research will be
conducted in the future.  In addition, we believe that our relationship with
these institutions will result in graduates being trained users of Discovery
Manager and, therefore, potential customers.  The following is a partial list of
institutions currently using Discovery Manager:

  .    Johns Hopkins University
  .    Princeton University
  .    University of Colorado
  .    University of Oxford Wellcome Trust Centre for Human Genetics
  .    Yale University

Competition

We face competition from other bioinformatics companies and specialized drug
discovery software companies.  We believe that additional specialized software
companies will be formed to pursue this market opportunity.  Competition could
also result from non-commercial software developed by academic institutions and
software developed by companies who sell access to proprietary genomic data.
Some of our competitors, including academic institutions and large genomics or
pharmaceutical companies, have substantially greater financial, marketing, sales
and support resources than we do.  We also face competition from pharmaceutical
companies' own bioinformatics departments.

There are many companies describing bioinformatics as part of their strategy,
but a much smaller number who currently offer bioinformatics products or
databases commercially.  Most of our commercial competitors offer sequence
analysis software products, which represents only a portion of the functionality
of our product.  We believe that no other company has a bioinformatics product
for genomics that matches the functionality of Discovery Manager.

The market for software products and services to support the drug discovery
process is new and rapidly changing, and we believe it will become highly
competitive.  We believe that the principal competitive factors affecting the
markets for our software and services include:

  .    breadth of functionality

  .    technological and scientific excellence

  .    timeliness of product introductions

  .    responsiveness to customer requirements

  .    customer relationships

  .    ease of use



                                       9
<PAGE>

We believe we compete favorably with respect to each of these factors due to the
ability of a wide variety of researchers to use Discovery Manager, the input of
leading genomics researchers in the development of Discovery Manager and the
frequent upgrades of our product.

Intellectual Property

We are the exclusive, worldwide licensee of the Genome Topographer technology
owned by Cold Spring Harbor Laboratory.  Genome Topographer was co-developed by
our founder, President and Chief Scientist, Dr. Thomas G. Marr at Cold Spring
Harbor Laboratory under work supported, in part, by grants from the Department
of Energy and the National Institutes of Health.  Genome Topographer is a
general-purpose computer system useful for studying complex, genetic diseases
and serves as the intellectual property foundation of Discovery Manager.  The
Genome Topographer technology includes the patented Chang/Marr algorithm, which
incorporates, either in hardware or software form, an algorithm for analyzing
genetic data.  Our license with Cold Spring Harbor Laboratory grants us
exclusive, worldwide rights to the Chang/Marr Patent, as well as the exclusive
right to commercialize the complete set of Genome Topographer technology.  Our
Discovery Manager product incorporates this licensed technology.

Failure to maintain the license agreement with Cold Spring Harbor Laboratory
could preclude future sales of Discovery Manager or delay or prevent the
introduction of new products.  Even if we could identify and license or develop
non-infringing equivalent technology, which is far from certain, the cost and
delays of such a changeover in our base technology would likely cause material
harm to our business.

We cannot assure you that the Chang/Marr algorithm patent owned by Cold Spring
Harbor Laboratory will not be challenged, invalidated or circumvented or that
the rights created thereunder will provide a competitive advantage.  In
addition, our competitors may apply for and obtain patents covering technologies
that are more effective than our technologies.  This could render our
technologies or products obsolete or uncompetitive or prevent, limit or
interfere with our ability to make, use or sell our product either in the United
States or in international markets.

Our current product incorporates additional technologies that are the subject of
proprietary rights of others.  We have obtained licenses for certain of these
technologies and may be required to obtain licenses for others.  If needed, we
may not be able to obtain licenses for technology patented by others on
commercially reasonable terms, or at all.  We also may not be able to develop
alternative approaches if we are unable to obtain necessary licenses.  We cannot
assure you that our current and future licenses will be adequate for the
operation of our business.  The failure to obtain necessary licenses or identify
and implement alternative approaches could have a material adverse effect on our
business, financial condition and results of operations.

We believe the source code for our proprietary software is protected both as a
trade secret and copyright work in the United States.  However, effective
copyright and trade secret protection may not be available in every other
country in which our products are distributed.

Our policy is to enter into confidentiality agreements with our employees,
consultants and vendors, and we generally control access to and distribution of
our software, documentation and other proprietary information.  Despite these
precautions, a third party might be able to copy or otherwise obtain and use our
products or technology without authorization.  The steps taken by us to protect
our proprietary technology might be inadequate to prevent misappropriation of
our technology by third parties.  In addition, third parties might be able to
develop similar technology independently.  Either of these events could
significantly harm our business, operating results and financial condition.

Employees

As of March 1,  2001, we had 127 full-time employees, including 85 employees
primarily engaged in research and development, 25 in sales and marketing and 17
in general and administration.  None of our employees is currently represented
under collective bargaining agreements and we consider our relations with our
employees to be good.

Item 2.  Properties

Our principal executive offices are located at 1745 38th Street, Boulder,
Colorado under a lease that provides us 41,000 square feet for our operations.
This facility serves as our headquarters and as the base for our research and



                                       10
<PAGE>

development and marketing and product support operations. We also lease
approximately 900 square feet in Berkhamsted, England, that serves as our United
Kingdom sales office. In February 2001, we leased approximately 2,200 square
feet in Sacramento, California, that serves as a software engineering and
development office. We believe that our current facilities will be adequate to
support our operations through 2001. In the event that additional space is
needed, we believe that additional or substitute space will be available on
commercially reasonable terms.

Item 3.  Legal Proceedings

We are not currently involved in any legal proceedings.  From time to time, we
may become involved in or subject to various litigation and legal proceedings
incidental to the normal conduct of our business.

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

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

FACTORS THAT MAY AFFECT OUR RESULTS

In addition to the other information in this report, the following factors
should be considered carefully in evaluating our business and prospects:

We have a history of operating losses and an accumulated deficit, and we may not
succeed or become profitable.

We will need to generate significant revenue to achieve profitability and we may
be unable to do so.  Even if we do achieve profitability, we may not be able to
sustain or increase profitability in the future. If we do not achieve or sustain
profitability, then we may be unable to continue our operations.  We have
incurred operating losses every quarter since we began operations and we have
not generated enough revenue to cover the substantial amounts that we have spent
to develop and market our products and services.  We had an accumulated deficit
of $16.2 million at December 31, 1999, and $57.7 million at December 31, 2000.

We expect to invest substantial financial and other resources to develop and
introduce new products and services and expand our sales and marketing
departments, strategic relationships and operating infrastructure.  We expect
that our expenses will continue to exceed our revenues resulting in continued
operating losses and negative cash flow from operations for the foreseeable
future.

We will incur significant charges to earnings as a result of stock option
grants.  This will hamper our ability to become profitable.

As a result of option grants, we will incur significant non-cash charges to
earnings in future periods, which will hamper our ability to become profitable.
In 2000 these charges were $14.7 million and are expected to be approximately
$8.7 million for 2001, $4.9 million for 2002 and $3.7 million for future
periods.  Our lack of profitability in any particular period and the amount of
any net loss, which will be exacerbated by these charges, could cause the market
price for our common stock to drop, perhaps significantly.

Our limited operating history makes evaluating our business difficult.  This
also makes it difficult to forecast our future operating results.

We commenced operations in September 1995 and we did not begin generating
revenue from our product and services until June 1998. Also, we have only sold
our product to a limited number of customers to date. Our limited operating
history makes it difficult to evaluate our business and to forecast our future
operating results. As a result, you must consider the risks and uncertainties
inherent in the development of a new business enterprise.

The market for our products and services is evolving and uncertain, and if our
products and services do not achieve market acceptance, our business will be
harmed.  Our future results of operations depend on whether the market accepts
Discovery Manager and new products and services that we intend to develop.  As
is typical in new and



                                       11
<PAGE>

evolving markets, demand and market acceptance for our products and services are
subject to a high level of uncertainty. Only a few commercially available
software products designed specifically for genomics-based drug development and
discovery exist and these are unproven.

Our software is designed to incorporate features that respond to the needs of
pharmaceutical and biotechnology researchers.  To the extent we experience
delays or difficulties implementing features that these researchers request, our
ability to serve our customers may be adversely affected.

Market acceptance of our products and services will depend on a number of
factors, some of which are not in our control.  The amount and timing of our
revenues and profitability will be negatively impacted if the market for our
products fails to develop or develops more slowly than we expect.

If we are unable to obtain additional capital to fund our operations when
needed, our sales and marketing and product development efforts would be
adversely affected.  This could cause our operating results to be materially
harmed.

Future capital requirements will depend on the extent to which we acquire or
invest in businesses, products and technologies.  If we should require
additional financing due to unanticipated developments, additional financing may
not be available when needed or, if available, we may not be able to obtain this
financing on terms favorable to us or to our stockholders.  Insufficient funds
may require us to delay, scale back or eliminate some or all of our research and
development programs, or may adversely affect our ability to operate as a going
concern.  If additional funds are raised by issuing equity securities,
substantial dilution to existing stockholders may result.

If we fail to successfully redevelop our product to use a different computer
programming language and database, our customer base will likely decline.

To maintain and increase our customer base, we are currently redeveloping our
product with a different programming language and database platform.  We are not
sure if the redeveloped product will have the same performance level as our
current product.  If we do not successfully redevelop this product, our customer
base may decline.  Any delays in this redevelopment may result in postponement
of future sales and erosion of our competitive position.  In addition, until our
customers transition to our redeveloped product, we will be required to devote
resources to maintain and support both our current product and redeveloped
product, which could consume both our personnel and other resources.  If in the
future our customers demand a different programming language or database
platform than the ones we have chosen for the current redevelopment, we will
incur substantial additional costs in redeveloping our product and our operating
results will be harmed.

We expect to rely heavily on strategic relationships with larger companies to
help us achieve market acceptance for our products.  If we are unable to
successfully develop these relationships, or if these companies do not perform
as expected, our ability to achieve profitability would be materially harmed.

Part of our business strategy is to work with larger, more established companies
that are suppliers to the drug discovery and development industry to help create
market awareness and acceptance of our products.  We have limited experience in
developing strategic relationships of this type and have entered into only two
to date.  If we are unsuccessful in developing strategic relationships, or if
parties with which we develop relationships do not perform as expected, our
products may not achieve broad market acceptance and our ability to achieve
profitability will be significantly harmed.

If we do not increase our brand and name recognition, our ability to sell our
products will be reduced and our business and operating results will suffer.

We have generated revenue from product licenses only since 1998 and currently
have only 16 customers.  Most of our target customers are large pharmaceutical
and biotechnology companies and other research organizations.  We believe that
establishing and maintaining brand and name recognition is critical for
attracting and expanding this targeted customer base because we believe these
targeted customers generally prefer to do business with established brands and
companies.  We also believe that the importance to us of name recognition and
reputation will increase as competition in our market increases.  Promotion and
enhancement of our brand and name will depend on the effectiveness of our
marketing and advertising efforts and on our ability to continue providing high-
quality products



                                       12
<PAGE>

and services. We may not be successful in either regard. If we are not
successful, our ability to generate revenue will be limited.

Our revenue and profits may decrease if we lose any of our major customers.

Historically, a small number of customers have accounted for a significant
portion of our revenue in any particular period.  The loss of a major customer
could harm our business.  For the year ended December 31, 2000, four of our
customers, AstraZeneca, GlaxoSmithKline, Oxagen Limited and Pfizer, represent
79% of our total revenue.  We anticipate that sales of our products to a small
number of customers will continue to account for a significant portion of our
total revenue.  In addition, some of our license agreements are short-term and
may not be renewed by our customers.

Our customer contracts are cancelable with little notice and if we lose any of
these contracts, our revenues and marketing efforts with other customers will be
materially adversely affected.

The contracts with our customers are cancelable by them with little notice.  Our
customers do not have any obligation to continue to use our current product or
to purchase additional services from us.  Our strategy has been to focus on
potential customers who are considered market leaders in the drug discovery and
development industries.  Consequently, we depend on our customers not only for
generating revenue but also for enhancing our marketing efforts with other
potential customers.  The loss of any of these contracts would adversely impact
our revenue and operating results, and may affect our marketing efforts with
other customers.

We are developing new products that may be subject to different pricing
strategies from our current products potentially resulting in increased
volatility of our future revenues.

We have limited experience developing new products and in determining the
appropriate pricing strategy for those products.  These future products are
anticipated to be sold under perpetual license agreements with recurring annual
support and maintenance fees or in combination with time-based license
agreements.  As a result, this pricing strategy may make our future revenues
more volatile than they have been with our existing products that are sold on an
annual subscription fee basis.  In addition, we may be subject to uncertain
sales cycles and we may have difficulty estimating our future revenues.

If we are unable to expand our sales and marketing capabilities, we will be
unable to significantly increase our revenue.

We have limited experience in sales and marketing and a small sales and
marketing department.  If we are unable to increase our sales and marketing
personnel and efforts, both in the United States and in Western Europe, or
arrange with a third party to perform these services, we will be unable to
significantly increase our revenue.  We are currently attempting to hire and
train additional personnel, but we cannot assure you that our sales force will
be sufficiently large or knowledgeable to meaningfully increase our sales and
customer base.  Even if we are able to hire additional sales personnel in the
near future, their effectiveness will be limited until they gain sufficient
experience.

We are highly dependent on Dr. Thomas Marr, and the loss of his services could
affect our ability to be successful.

We are highly dependent on Dr. Thomas Marr, our founder, President and Chief
Scientist.  Dr. Marr is important to developing information, tools and services
required for implementation of our business plan.  Moreover, we believe Dr.
Marr's reputation and prominence in the genomics field provides us with a
competitive advantage.  A significant component of our marketing strategy is to
capitalize on the reputation and contacts of Dr. Marr.  If we lost Dr. Marr's
expertise, we would have difficulty replacing him and our product development
efforts and business opportunities could be adversely affected.  Although we
have an employment agreement with Dr. Marr, he could leave us at anytime.  In
addition, we do not have "key person" life insurance on Dr. Marr.



                                       13
<PAGE>

Our success depends on the continuing contribution of our other key personnel
who may leave us at any time and our ability to integrate new personnel,
including several key members of our management team.

Our future success depends to a significant extent on the continued service of
our key technical, sales and senior management personnel.  In particular, the
loss of the services of Teresa W. Ayers, our chief executive officer, Kenneth S.
Rubin, our executive vice president of commercial development, Daniel R.
Hudspeth, our chief financial officer, Michael W. Cohn, our vice president of
engineering, and Sean M. Ryan, our vice president of sales, could harm our sales
and operations.  Although we have an employment agreement with Ms. Ayers, she
and any other of our key personnel may leave us at any time.  In addition, we do
not have "key person" life insurance policies on any of our employees.

Several key members of our management team have joined us within the last year,
including Mr. Cohn and Mr. Ryan.  If we cannot effectively integrate these
employees into our business, or if they cannot work together as a management
team to implement our business strategy, successfully achieving our revenue
goals and profitability will be difficult.  If any of our management team left
or were seriously injured and unable to work, it could be costly and time
consuming to replace them.

If we cannot attract, retain, motivate and integrate additional skilled
personnel, our ability to compete will be impaired.

We are a small company and we believe many of our current and potential
competitors have more employees than we do.  Our success depends in large part
on our ability to attract, retain and motivate highly qualified management and
scientific personnel.  We face intense competition for qualified personnel and
the industry in which we compete has a high level of employee mobility.  If we
are unable to continue to employ our key personnel or to attract and retain
qualified personnel in the future, our ability to successfully execute our
business plan will be jeopardized and our growth will be inhibited.

Our failure to manage planned growth could adversely affect our ability to
increase revenue and become profitable.

If we do not effectively manage our planned growth, our ability to significantly
increase revenue and become profitable will be limited.  We need to rapidly and
significantly expand our operations.  Our growth has strained and will continue
to strain our management, financial controls, operations systems, personnel and
other resources.  If we do not manage our planned future growth effectively, our
efforts to increase our customer base and product and service offerings may not
be successful.  In addition, our planned rapid growth could adversely affect our
ability to provide services and technical support in a timely manner and in
accordance with customer expectations.  To manage growth of our operations, we
must:

  .    improve existing and implement new operational, financial and management
       information controls, reporting systems and procedures

  .    hire, train and manage additional qualified personnel

  .    effectively manage multiple relationships with our customers, suppliers
       and other third parties, including our collaborators

We may not be able to install management information and control systems in an
efficient and timely manner, and our current or planned personnel, systems,
procedures and controls may not be adequate to support our future operations.

Our business will suffer if our product contains defects or does not function as
intended, which would cause our revenues to decline.

Our business would suffer if our product malfunctions or our customers' access
to their information stored on our product is interrupted.  In addition, our
product is complex and sophisticated and holds vast amounts of data.  As a
result, our product and third-party software incorporated into our product could
contain erroneous data, design defects or software errors that could be
difficult to detect and correct.  Software defects could be found in current or



                                       14
<PAGE>

future products. If we fail to maintain the quality and integrity of our
product, we would fail to achieve market acceptance.

If we are unable to maintain a product with adequate security safeguards, our
product will not achieve market acceptance and our business would suffer.

Researchers use our product to analyze proprietary data, sometimes in disparate
locations.  Our product must have effective, reliable and secure operations.  If
we fail to maintain an effective, reliable and secure product, our customers'
data may be compromised and our customers would lose confidence in our product.
Our revenues and ability to maintain or increase market share would then suffer.

Our business depends on our topographer technology license from Cold Spring
Harbor Laboratory, the loss of which would jeopardize our business.

The Genome Topographer technology license from Cold Spring Harbor Laboratory
provides the intellectual property foundation for our Discovery Manager product.
A breach by us of any of the terms of, or other failure to maintain, this
license agreement could preclude future sales of Discovery Manager or delay or
prevent the introduction of new products.  Ways in which we could breach the
license agreement include (1) uncured monetary breaches, (2) our failure to
comply with United States export laws regarding software exports, (3) any breach
of the confidentiality and proprietary information provisions of the license
agreement, (4) our filing of bankruptcy or the imposition of receivership on our
business, or (5) any impermissible assignment of the license agreement by us.

If we were unable to continue using the Genome Topographer technology license
for any reason, we may not be able to continue our operations.  Our ability to
identify and license or develop other equivalent technology is highly uncertain
and, even if we were successful in doing so, the cost and delays of such a
changeover in our base technology would likely cause material harm to our
business.  Further, the Chang-Marr algorithm patent included in the Genome
Topographer technology may be challenged, invalidated or circumvented.  This
could limit or prevent our ability to make, use or sell this algorithm in our
product.

Our product currently depends on components licensed from other third parties,
and the failure to maintain these licenses could result in the loss of access to
these components and could delay or suspend our commercialization efforts.

Discovery Manager incorporates technologies which are the subject of proprietary
rights of others.  We have obtained licenses for some of these technologies and
may be required to obtain licenses for others.  We may not be able to obtain any
necessary licenses for the proprietary technology of other parties on
commercially reasonable terms, or at all.  In addition, one or more third
parties whose software or technologies are used in our product might cease to
make its software or other technologies available to us or to update such
software or technologies as appropriate.  We may not be able to develop
alternative approaches if we are unable to obtain necessary licenses, or if
third-party software or technologies become unavailable to us or obsolete.  We
cannot assure you that our current or future licenses will be adequate for the
operation of our business.  The failure to obtain necessary licenses or identify
and implement alternative approaches could have a material adverse effect on our
business, financial condition and results of operations.

Our intellectual property protection may be inadequate, allowing others to use
our technology or similar technologies, reducing our ability to compete.

The steps taken by us to protect our proprietary technology may be inadequate to
prevent misappropriation of our technology by third parties or third parties may
develop similar technology independently.  We rely on a combination of
trademark, copyright and trade secret laws, employee and third-party non-
disclosure agreements and other contracts to establish and protect our
technology and other intellectual property rights.  However, these agreements
may be breached or terminated, and we may not have adequate remedies for any
breach.  In addition, we currently have no patents or patent applications
pending, although we do have an exclusive license to one patent.  A third party
could copy or otherwise obtain and use our products or technology without
authorization.



                                       15
<PAGE>

Our products could infringe on the intellectual property of others, which may
cause us to engage in costly litigation and, if we are not successful, could
cause us to pay substantial damages and prohibit us from selling our products.

Third parties may assert infringement or other intellectual property claims
against us based on their patents or other intellectual property claims.  We may
have to pay substantial damages, possibly including treble damages, for past
infringement if it is ultimately determined that our products infringe a third-
party's patents.  We would have to obtain a license to sell our product if our
product infringed another person's intellectual property.  We might be
prohibited from selling our product before we obtain a license, which, if
available at all, may require us to pay substantial royalties.  Even if
infringement claims against us are without merit, defending a lawsuit takes
significant time, may be expensive and may divert management attention from
other business concerns.

Our employees may be bound by confidentiality and other nondisclosure agreements
regarding the trade secrets of their former employers.  As a result, our
employees or we could be subject to allegations of trade secret violations and
other similar violations if claims are made that they breached these agreements.

Our operating results may fluctuate, making it likely that, in some future
quarter or quarters, we will fail to meet analysts' estimates of operating
results or financial performance, causing our stock price to fall.

If revenue declines in a quarter, our earnings will decline because many of our
expenses are relatively fixed.  In particular, research and development, sales
and marketing and general and administrative expenses are not affected directly
by variations in revenue.  In some future quarter or quarters, our operating
results likely will be below the expectations of securities analysts or
investors.  In this event, the market price of our common stock may fall
abruptly and significantly.

We may fail to engage in strategic acquisitions, which could limit our future
growth.

One of our strategies for growth is to engage in selective strategic
acquisitions of key products, technologies or companies.  Our ability to conduct
such acquisitions is limited by our ability to identify potential acquisition
candidates, obtain necessary financing and consummate the acquisitions.  In the
event we are unable to identify and take advantage of these opportunities, we
may experience difficulties in growing our business.  In addition, pursuing
acquisition opportunities could divert our management's attention from our
ongoing business operations and result in decreased operating performance.

If we engage in acquisitions, we may experience significant costs and difficulty
assimilating the operations or personnel of the acquired companies, which could
threaten our future growth.

If we make any acquisitions, we could have difficulty assimilating the
operations, technologies and products acquired or integrating or retaining
personnel of acquired companies.  In addition, acquisitions may involve entering
markets in which we have no or limited direct prior experience.  The occurrence
of any one or more of these factors could disrupt our ongoing business, distract
our management and employees and increase our expenses.  In addition, pursuing
acquisition opportunities could divert our management's attention from our
ongoing business operations and result in decreased operating performance.
Moreover, our ability to become profitable may suffer because of acquisition-
related costs or amortization of acquired goodwill and other intangible assets.
Furthermore, we may have to incur debt or issue equity securities in any future
acquisitions.  The issuance of equity securities would dilute our existing
stockholders.

We face intense competition, including from internal bioinformatics departments,
and we may not have the resources required to successfully compete.

We face significant competition from the internal bioinformatics departments of
our customers and other companies that are potential customers.  Some of our
customers and potential customers have internally developed software to organize
and analyze genomic data.  These companies may believe that their software is
adequate for their needs and that our product is unnecessary.  In addition,
certain internal departments of a corporation may be resistant to outsourcing
software because it could reduce the departments' budgets.



                                       16
<PAGE>

We face competition from other organizations, as well, including:

  .    other bioinformatics companies

  .    specialized drug discovery software companies

  .    academic and scientific institutions

  .    public and private research organizations

Many of our customers and potential customers and other competitors have much
greater resources and name recognition than we do.  Some of our third-party
competitors may offer discounts as a competitive tactic.  Moreover, our
competitors may in the future offer broader product lines or technologies or
products that are more commercially attractive than our current or future
products or that may render our technologies or products obsolete.

If our customers and potential customers elect to continue to develop their own
bioinformatics software, or we are unable to compete successfully with our
third-party competitors, then we will be unable to meaningfully improve our
operating results and we may not be able to continue operating our business.

We experience rapid technological change in our markets.  If we do not modify
our products to incorporate new technologies, they may become obsolete and our
sales will suffer.

We compete in a market that is subject to rapid technological change, frequent
new product introductions and enhancements, changes in customer demands and
evolving industry standards.  To remain competitive, we must continue to expand
our databases, improve our software, and invest in new technologies in
anticipation of the needs of our customers.  Our products could become obsolete
due to the introduction of products containing new technologies, changing
customer requirements or changing industry standards.  This would have a
significant negative impact on our revenue generation.

The technological life cycles of our products are difficult to estimate.  Our
future success will depend upon our ability to continue to enhance our current
products and to continue to develop and introduce new products that keep pace
with competitive and technological developments and customer demands.  If we
fail to develop, market and deliver new products on a timely basis, we may lose
market share, perhaps significantly, and our ability to continue our business
could be seriously jeopardized.

Our current and potential customers primarily consist of biotechnology and
pharmaceutical organizations, which face risks that could affect our ability to
license our products.

We currently derive a substantial portion of our revenue from product licenses
to biotechnology and pharmaceutical organizations.  We expect that these
organizations will continue to be our primary source of revenue for the
foreseeable future.  If the drug discovery, development and related industries
experience a downturn, our business will be harmed.  Thus, our ability to
generate revenue is indirectly subject to risks and uncertainties that could
cause reductions and delays in research and development expenditures within the
drug discovery, development and related industries.  These reductions and delays
may result from factors such as:

  .    market-driven pressures on companies to consolidate and reduce costs

  .    reduced revenue or profitability of our current and potential customers

  .    the uncertainty of healthcare reform, including the continuing efforts of
       governmental and third-party payors to contain or reduce the cost of
       health care

  .    changes in regulations of the U.S. Food and Drug Administration or other
       regulatory agencies

These factors are not within our control.  In addition, consolidation in the
drug discovery and development industries will reduce the number of our
potential customers and, therefore, may adversely affect our future revenues.



                                       17
<PAGE>

We will not be able to sell our products if the use of genomic information to
develop drugs is not commercially successful.

The development of new drugs based on genomic information is unproven.  Few
therapeutic products based on genomic discoveries have been developed and
commercialized.  If our customers and potential customers are unable to develop
drugs based on genomic information in general and using our products or services
in particular, then demand for our products will diminish and our ability to
generate revenue and profitability would be significantly harmed.

If ethical and other concerns surrounding the use of genetic information become
widespread, the demand for our products could decrease.

Genetic testing and research has raised ethical issues regarding confidentiality
and the appropriate uses of the resulting information.  For these reasons,
governmental authorities may limit or regulate the use of genetic testing or
prohibit testing for genetic predisposition to certain conditions, particularly
for those that have no known cure.  Any such action by governmental authorities
could reduce the potential markets for our products, which could seriously harm
our ability to generate revenue.

Doing business outside of the United States involves numerous factors that could
negatively affect our financial results.

International operations involve numerous factors not typically present in
domestic operations.  If any one or more of these factors adversely affects us
and we cannot effectively manage them, our business, operating results and
financial condition could be significantly harmed.  These factors include:

  .    costs of operations in countries outside the United States

  .    licenses, tariffs and other trade barriers

  .    difficulties in staffing and managing remote operations

  .    potentially adverse tax consequences

  .    the burden of complying with multiple and complex laws, regulations and
       treaties

  .    currency fluctuations

  .    political and economic instability

Our stock price may be volatile and your investment in our stock could decline
in value.

The trading price of our common stock is likely to be highly volatile and could
be subject to wide fluctuations in price in response to various factors, many of
which are beyond our control, including:

  .    announcements of technological innovations or new commercial products by
       our competitors or us

  .    developments concerning proprietary rights by our competitors or us

  .    developments concerning any development or marketing collaborations

  .    publicity regarding actual or potential medical results relating to
       products under development by our competitors or us

  .    litigation

  .    economic and other external factors, including disasters or crises or

  .    period-to period fluctuations in financial results

In addition, the stock market and the market for technology companies in
particular have experienced extreme price and volume fluctuations that often
have been unrelated or disproportionate to the performance of those companies.
During the recent drops in value of the Nasdaq National Market, companies with
ongoing losses like us were among



                                       18
<PAGE>

the most vulnerable to sharp declines in value. You may not be able to sell your
common stock at a price at or above your purchase price.

If our stock price is volatile, we may become subject to securities litigation,
which is expensive and could divert our resources.

Many companies with a volatile stock price have been subject to class-action
litigation brought by security holders.  If the market value of our common stock
experiences adverse fluctuations, and we become involved in this type of
litigation, we could incur substantial legal costs and our management's
attention could be diverted, causing our business to suffer, regardless of the
outcome of the litigation.

The proceeds from our initial public offering have been invested in interest-
bearing, investment-grade securities that may be subject to market risk.

We have invested our IPO proceeds in interest-bearing, investment-grade
securities that may be subject to interest rate fluctuations and credit risk.
Our investment portfolio is used to preserve our capital until it is required to
fund our business.  If interest rate fluctuations and credit risk do occur, then
the principal amount of our investments will decline.



                                       19
<PAGE>

PART II

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

Common Stock Data.  Our common stock began trading publicly in the over-the-
counter market through the Nasdaq National Market under the symbol "GNOM" on
September 29, 2000.  Prior to that date, there was no public market for our
common stock.  The following table shows the high and low sales prices of our
common stock as reported by the Nasdaq National Market for the periods
indicated.

                                                            High       Low
                                                           ------    ------

For the Fiscal Year Ended December 31, 2000:
 Third Quarter..........................................   $23.38    $18.88
 Fourth Quarter.........................................   $20.50    $ 4.81

The closing sales price of our common stock as reported on the Nasdaq National
Market on March 12, 2001 was $4.78 per share.  As of that date, there were 104
record holders of our common stock.  This does not include the number of persons
whose stock is in nominee or "street name" accounts through brokers.

The market price of our common stock has been and may continue to be subject to
wide fluctuations in response to a number of events and factors, such as
quarterly variations in our operating results, announcements of technological
innovations or new products by us or our competitors, changes in financial
estimates and recommendations by securities analysts, the operating and stock
performance of other companies that investors may deem comparable to Genomica,
and news reports relating to trends in our markets. In addition, the stock
market in recent years has experienced extreme price and volume fluctuations
that have particularly affected the market prices of many technology companies
that have often been unrelated or disproportionate to the operating performance
of companies. These fluctuations, as well as general economic and market
conditions, may adversely affect the market price for our common stock.

Common Stock Dividends.  We have never declared or paid a cash dividend on our
common stock.  We anticipate that we will retain any earnings to support
operations and to finance the growth and development of our business.
Therefore, we do not anticipate paying any cash dividends in the foreseeable
future.  Any future determination to pay cash dividends will be at the
discretion of our board of directors and will depend upon our financial
condition, operating results, capital requirements, covenants in our debt
instruments, and such other factors as our board of directors deems relevant.

Sales of Unregistered Securities during the Fiscal Year ended December 31, 2000.
Since January 1, 2000, we have sold and issued the following unregistered
securities:

From January 1, 2000 through September 30, 2000, we granted options to purchase
approximately 2.1 million shares of common stock at a weighted-average exercise
price of approximately $1.96 per share to employees, consultants and directors
under our 2000 Equity Incentive Plan and issued an aggregate of approximately
886,000 shares of our common stock at a weighted-average exercise price of
approximately $0.29 per share to employees, consultants and directors as a
result of exercises of options granted under the 2000 Equity Incentive Plan.
These sales were made in reliance on Rule 701.  These stock options generally
vest and become exercisable over a four-year term with 25% vesting on the
twelve-month anniversary of the grant date and 1/48th vesting on each monthly
anniversary thereafter.

On March 13, 2000, we sold 10,022,635 shares of our Series C preferred stock
(which converted into 3,340,877 shares of common stock upon the closing of our
initial public offering) to certain accredited investors for cash proceeds in
the amount of $15,033,952.  We relied on the exemption provided by Rule 506 of
Regulation D of the Securities Act.

On September 5, 2000, we sold 900,000 shares of our Series D preferred stock
(which converted into 300,000 shares of common stock upon the closing of our
initial public offering) to Applied Biosystems for cash proceeds in the amount
of $3,006,000.  This sale was made in reliance on Section 4(2) of the Securities
Act.



                                       20
<PAGE>

Use of Proceeds.  On October 4, 2000, in connection with our initial public
offering, a Registration Statement on Form S-1 (File No. 333-32472) was declared
effective by the Securities and Exchange Commission, pursuant to which 6,440,000
shares of our common stock were offered and sold for our account at a price of
$19 per share, generating net proceeds of approximately $112.5 million.  As of
December 31, 2000, we had used $333,000 to repay capital lease obligations.  The
remaining $112.2 million has been invested in money market funds as well as
other interest-bearing, investment-grade securities.



                                       21
<PAGE>

Item 6.  Selected Financial Data

This section presents our selected historical consolidated financial data.  The
following information is qualified by reference to, and should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and related
notes thereto.

We derived the statement of operations data for the years ended December 31,
2000, 1999 and 1998, and the balance sheet data as of December 31, 2000 and 1999
from the audited financial statements in this report.  Those financial
statements were audited by Arthur Andersen LLP, independent public accountants.
We derived the statement of operations data for the years ended December 31,
1997 and 1996 and the balance sheet data as of December 31, 1998, 1997 and 1996
from audited financial statements that are not included in this report.


<TABLE>
<CAPTION>

                                                                Year Ended December 31,
                                                  ------------------------------------------------------
                                                    2000      1999             1998     1997      1996
                                                  --------   -------         -------   -------   -------
                                                            (in thousands, except per share amounts)
<S>                                               <C>        <C>             <C>       <C>       <C>
Statement of Operations Data:
Revenue:
 Software license and
   services.....................................  $  1,615   $   622         $   197   $    --   $    --
 Research grants................................        27       159              --        --        --
                                                  --------   -------         -------   -------   -------
  Total revenue.................................     1,642       781             197        --        --
                                                  --------   -------         -------   -------   -------
Operating Expenses:
 Costs of revenue...............................       384       447             141        --        --
 Research and development.......................    12,047     4,869           2,328     1,682     1,533
 Selling and marketing..........................     7,197     1,722             634       495       383
 General and administrative.....................     8,964     1,723             884       579       183
                                                  --------   -------         -------   -------   -------
    Total operating expenses....................    28,592     8,761           3,987     2,756     2,099
                                                  --------   -------         -------   -------   -------
Operating loss..................................   (26,950)   (7,980)         (3,790)   (2,756)   (2,099)
Interest Income.................................     2,632       419              90        37        28
Interest Expense................................       (45)      (18)            (55)      (19)       (5)
                                                  --------   -------         -------   -------   -------
Net Loss........................................   (24,363)   (7,579)         (3,755)   (2,738)   (2,076)
Deemed Dividend Related
 to Beneficial Conversion
 Feature of Preferred
 Stock..........................................   (17,109)       --              --        --        --
                                                  --------   -------         -------   -------   -------
Net Loss Applicable to
 Common Stockholders............................  $(41,472)  $(7,579)        $(3,755)  $(2,738)  $(2,076)
                                                  ========   =======         =======   =======   =======
Net Loss Per Share,
 basic and diluted..............................  $  (6.49)  $ (7.13)        $ (3.81)  $ (2.80)  $ (2.67)
                                                  ========   =======         =======   =======   =======
Weighted Average
 Common Shares
 Outstanding, basic and
 diluted........................................     6,388     1,062             986       977       779
                                                  ========   =======         =======   =======   =======
Pro Forma Net Loss Per
 Share (Unaudited *):
    Net loss per share, basic and
     diluted....................................  $  (2.56)
                                                  ========
    Weighted average common
     shares outstanding, basic
     and diluted................................    16,223
                                                  ========

                                                                        December 31,
                                                  ------------------------------------------------------
                                                    2000      1999             1998     1997      1996
                                                  --------   -------         -------   -------   -------
                                                                       (in thousands)
Balance Sheet Data:
Cash, cash equivalents and short-term
 investments....................................  $ 98,938   $ 6,343         $ 5,223   $ 3,094   $   355
Working capital.................................    99,303     5,246           4,569     2,515      (264)
Long-term investments...........................    24,993        --              --        --        --
Total assets....................................   129,590     7,554           5,649     3,426       515
Notes payable and capital
 lease obligations, long-term
 portion........................................        --       268              71       184        --
Total stockholders' equity......................   127,086     5,681           4,872     2,623      (143)
-----
</TABLE>

*  Pro forma loss per share (unaudited) for the year ended December 31, 2000 is
computed using the net loss and weighted-average number of common shares
outstanding, including the pro forma effects of the assumed conversion of the
Company's Series A, B, C and D convertible preferred stock into shares of the
Company's common stock as if such conversion occurred on January 1, 2000, or at
date of original issuance, if later.



                                       22
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and notes thereto included elsewhere in this
report on Form 10-K.  This discussion contains certain forward-looking
statements that involve risks and uncertainties.  Our actual results and the
timing of certain events could differ materially from those discussed in these
forward-looking statements as a result of certain factors, including, but not
limited to, those set forth herein and elsewhere in this report.

Overview

We are a provider of innovative software products and services that are designed
to enable pharmaceutical and biotechnology researchers to accelerate the drug
discovery and development process.  We believe our first product, Discovery
Manager, offers the broadest set of software tools for genomics researchers of
any commercially available product.  Our current customers include leading
genomics-based research organizations such as AstraZeneca, GlaxoSmithKline,
Pfizer and the National Cancer Institute.  We have a strategic alliance with
Applied Biosystems to develop software products to be used with its industry-
leading systems for drug discovery.  We also have signed a letter of intent with
Celera Genomics to enter into a strategic alliance to develop a special "Celera
Edition" of Discovery Manager for use with the Celera Discovery System's Genome
Reference Database.

We have sold our products to customers directly since June 1998.  We derive
revenue primarily from granting licenses for our Discovery Manager product to
pharmaceutical and biotechnology research organizations.  Our software license
agreements are typically one to three years in length, and include support and
maintenance.  The price for each agreement depends upon the number of users
licensed by our customers, the duration of the agreement and which of our
product components and services the customer purchases.  The prices which our
customers have agreed to pay us for our Discovery Manager range from $15,000 to
$400,000 per year.  We typically invoice our customers on an annual basis at the
commencement of the software license agreement and on each anniversary date
thereafter.  We record deferred revenue at the time of our invoice and we
recognize the associated revenue ratably over the related license period.

We have incurred losses since our inception.  As of December 31, 2000, we had an
accumulated deficit of $57.7 million.  The deficit includes stock-based
compensation charges of $16.3 million, including $14.7 million recognized in
2000, and a $17.1 million non-cash deemed dividend for the difference between
the deemed fair value of our common stock and the price at which our Series C
preferred stock and Series D preferred stock was convertible.  The remainder of
the accumulated deficit, $24.3 million, resulted from the significant costs
incurred in the development of our technology platform and the establishment of
relationships with our customers.  We intend to invest heavily in research and
development, selling and marketing and our computer and administrative
infrastructure.  In addition, as a result of recent option grants below their
deemed fair market value for financial reporting purposes prior to our initial
public offering, we will incur approximately $16.9 million in additional charges
to earnings in future periods.

Results of Operations

Year Ended December 31, 2000 Compared to Year Ended December 31,1999

Total Revenue.  Total revenue increased to $1,642,000 in 2000 from $781,000 for
the same period of 1999.  The revenue growth is primarily due to licensing our
software to an increased number of pharmaceutical and biotechnology
organizations.  We recognized revenue from consulting services of $23,000 in
2000; no such revenue was recognized in 1999.  Grant revenue of $27,000 was
recognized in 2000 compared to $159,000 in 1999.  Grant revenue decreased for
the year 2000 due to the completion of the grant in February 2000.

Costs of Revenue.  Costs of revenue decreased to $384,000 in 2000 from $447,000
in 1999.  The decrease is primarily due to decreased costs of research grants in
2000.  Our research grants paid for our direct costs of performing specified
research projects and a portion of our other operating expenses.  We expect our
costs of revenue to increase in absolute dollars but decrease as a percent of
revenue as we spread customer service and support and maintenance costs over a
larger revenue base.  Because we recognize our revenue ratably over the life of
our license agreements, our revenue may grow more slowly than our costs for a
period of time, as we continue building infrastructure to support our customers.



                                       23
<PAGE>

Research and Development.  Research and development expenses increased to $12.0
million in 2000 from $4.9 million in 1999.  Nearly $4.4 million of the increase
is attributable to non-cash compensation expense from options for common stock
issued to employees, as discussed below.  There was $846,000 of non-cash
compensation expense in 1999.  The remainder of the increase is primarily due to
increased salaries, recruiting, and other personnel costs associated with our
engaging additional software developers.  We expect research and development
expenses will continue to increase because of our plans to hire additional
employees to meet our product development plans.

Selling and Marketing.  Selling and marketing expenses increased to $7.2 million
in 2000 from $1.7 million in 1999.  Approximately $4.0 million of the increase
is related to non-cash compensation expense from options for common stock issued
to employees, as discussed below.  There was $85,000 of non-cash compensation
expense in 1999.  The remaining increase is primarily attributable to additional
salaries, consulting, other personnel costs and travel associated with the
expansion of our selling and marketing team.  We expect selling and marketing
expenses will increase significantly as we implement our selling and marketing
strategy, including hiring additional employees and increased marketing and
advertising.

General and Administrative.  General and administrative expenses increased to
$9.0 million in 2000 from $1.7 million in 1999.  Approximately $6.3 million of
the increase is attributable to non-cash compensation expense from options for
common stock issued to employees, as discussed below.  There was only $738,000
of non-cash compensation expense in 1999.  The remaining increases for the
period are primarily related to salaries and other personnel costs associated
with additions to our management team and administrative staff.  We expect
general and administrative expenses will continue to increase because of costs
associated with operating a public company and an increase in our administrative
infrastructure required to support our operations.

Stock-Based Compensation.  Deferred compensation is included as a component of
stockholder's equity and is being amortized in accordance with FASB
Interpretation No. 28 over the vesting periods of the related options, which are
generally four or five years.  Deferred compensation for options granted is the
difference between the exercise price and the deemed fair value for financial
reporting purposes of our common stock on the date the options were granted.  In
connection with the grant of stock options to employees at exercise prices
between $0.75 and $10.02 per share, we recorded deferred stock compensation of
$25.6 million for the year ended December 31, 2000.  In addition, we recorded
approximately $200,000 of deferred compensation in connection with the issuance
of options for common stock to certain advisors of the company.  Amortization of
deferred stock compensation totaled $14.7 million for the year ended December
31, 2000.  We will recognize additional compensation expenses of $8.7 million in
2001, $4.9 million in 2002, $2.5 million in 2003, $795,000 in 2004, and $45,000
in 2005.

Interest Income.  Interest income increased to $2.6 million in 2000 from
$419,000 in 1999.  The increase is attributable to our higher cash and
investment balances in these periods resulting from the proceeds of sales of our
preferred stock and our initial public offering.  The proceeds from sales of our
preferred stock and our initial public offering have been invested in investment
grade securities to be used as needed.  We expect interest income will increase
in future periods due to the significantly higher cash and investment balances
resulting from the proceeds for our initial public offering.

Interest Expense.  Interest expense increased to $45,000 in 2000 compared to
$18,000 in 1999.  The increase is attributable to higher average outstanding
debt related to capital leases for equipment.  These capital leases were repaid
in the fourth quarter of 2000 with a portion of the proceeds from our initial
public offering.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Total Revenue.  Total revenue increased to $781,000 in 1999 from $197,000 in
1998.  This increase was due primarily to licensing our software to an increased
number of pharmaceutical and biotechnology organizations.  We also recognized
revenue from research grants of $159,000 in 1999; no such revenue was recognized
in 1998.

Costs of Revenue.  Costs of revenue increased to $447,000 in 1999 from $141,000
in 1998.  This increase was due to approximately $90,000 from additional
customer service and support costs, $57,000 from software royalty payments for
third-party software licenses and $159,000 from costs associated with research
grants.




                                       24
<PAGE>

Research and Development.  Research and development expenses increased to $4.9
million in 1999 from $2.3 million in 1998.  The increase was primarily related
to an increase in salaries and other personnel costs in 1999 related to engaging
additional software developers.  We also incurred non-cash compensation expense
of $846,000 in 1999 from options for common stock issued with exercise prices
below the deemed market value of the common stock for financial reporting
purposes, as discussed below.  We expect research and development expenses will
continue to increase for the foreseeable future as we expand our product
offerings.

Selling and Marketing.  Selling and marketing expenses increased to $1.7 million
in 1999 from $634,000 in 1998.  The increase was due primarily to increases in
personnel and travel costs from the expansion of our selling and marketing team.
We also increased our product marketing expenses to enhance the visibility of
our product.  We incurred non-cash compensation expense of $85,000 in 1999 for
options for common stock issued to employees, as discussed below.

General and Administrative.  General and administrative expenses increased to
$1.7 million in 1999 from $884,000 in 1998, an increase of $839,000.  The
increase was due primarily to additions to our management team.  We incurred
non-cash compensation expense of $738,000 in 1999 from options for common stock
issued to employees, as discussed below.

Stock-Based Compensation.  Deferred compensation for options granted is the
difference between the exercise price and the deemed fair value for financial
reporting purposes of our common stock on the date the options were granted.  In
connection with the grant of stock options to employees, we recorded deferred
stock compensation of $7.4 million during the year ended December 31, 1999, of
which $1.7 million was expensed in 1999.

Interest Income.  Interest income increased to $419,000 in 1999 from $90,000 in
1998, an increase of $329,000.  The increase was primarily due to our higher
average cash and investment balances during 1999 as a result of a private
placement of equity securities in February 1999 and December 1998.

Interest Expense.  Interest expense decreased to $18,000 in 1999 from $55,000 in
1998 due primarily to lower average debt outstanding during 1999 following the
conversion of a note payable to equity in 1998.

Liquidity and Capital Resources

On October 4, 2000, we closed our initial public offering of 6,440,000 shares of
common stock at $19 per share.  We received net proceeds of approximately $112.5
million in cash.  Prior to this offering, we financed our operations primarily
from the net proceeds of approximately $38.1 million generated from the issuance
of preferred stock.

During the year ended December 31, 2000, we used cash of approximately $10.6
million to fund our net losses of $24.4 million.

Our investing activities for the year ended December 31, 2000 used cash of $97.9
million, and consisted of $95.1 million in net purchases and maturities of
investments and $2.8 million in purchases of property and equipment used in our
business.  We expect to continue making additional investments in our computer
infrastructure and facilities to support our expanding operations.

Our financing activities for the year ended December 31, 2000 generated $130.5
million comprised primarily of $112.5 million in net proceeds from our initial
public offering and $18.0 million in net proceeds from sales of preferred stock.

As of December 31, 2000, we had cash, cash equivalents and short-term
investments of approximately $98.9 million, up from the $6.3 million at December
31, 1999.  Additionally, we held long-term investments in marketable securities
of $25.0 million at December 31, 2000; no such investments were held at December
31, 1999.  This increase reflects the $130.5 million in net proceeds from our
initial public offering and preferred stock financings, offset by cash used to
fund our operations for the year ended December 31, 2000.

We expect our cash requirements to continue to increase significantly for the
foreseeable future as we expand research and development efforts, implement our
sales and marketing strategy, and grow our administrative support



                                       25
<PAGE>

activities. The amount and timing of cash requirements will depend on market
acceptance of our products and the resources we devote to researching and
developing, marketing, selling and supporting our products. We may also acquire
complementary businesses or products, although we have no commitment to do so.
We believe that our cash, cash equivalents and short-term investments, including
the net proceeds of our initial public offering, are sufficient to fund our
working capital requirements for the foreseeable future.

Income Taxes

Income taxes consist of United States and foreign federal, state and local
taxes.  We expect significant net losses for the foreseeable future that should
generate net operating loss carryforwards.  However, utilization of such
prospective net operating loss carryforwards may be subject to certain
limitations.  Significant changes in ownership such as our recent public
offering may also limit our ability to utilize our net operating losses.  In
addition, income taxes may be payable during this time due to operating income
in certain tax jurisdictions.  If we achieve operating profits and the net
operating loss carryforwards have been exhausted, have expired or are limited
due to ownership changes or other factors, we may experience significant tax
expense.  We have recorded no provision or benefit for federal and state income
taxes because we incurred net operating losses from inception through December
31, 2000.  As of December 31, 2000 we had net operating loss carryforwards of
approximately $22.8 million for federal and state income tax reporting purposes,
which begin to expire in 2011.  We have established a valuation allowance
against the entire amount of our deferred tax asset because our management has
not been able to conclude that it is more likely than not that we will be able
to realize the deferred tax asset, due primarily to our history of operating
losses.

The Year 2000

Computer systems and software must accept four digit entries to distinguish 21st
century dates from 20th century dates.  As a result, many software and computer
systems that accepted only two digit entries needed to be upgraded in order to
accept dates beginning January 1, 2000.  We did not experience any date-related
problems with our software.  In addition, we have not been made aware of, nor
have we experienced, date-related problems with any third-party software.  We do
not believe that we will incur material costs in the future because of date-
related problems.

Recently Issued Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board, or FASB, issued
Statement of Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities," or SFAS No. 133.  SFAS No. 133 establishes
accounting and reporting standards for derivative financial instruments and
hedging activities related to those instruments as well as other hedging
activities.  In June 1999, the FASB issued Statement of Financial Accounting
Standards No. 137, "Accounting for Derivative Instruments and Hedging
Activities-Deferral of the Effective Date of FASB Statement No. 133--an
Amendment of FASB Statement No. 133," or SFAS No. 137.  SFAS No. 137 delays the
effective date of SFAS No. 133 to fiscal quarters and fiscal years beginning
after June 15, 2000.  The Company does not typically enter into arrangements
that would fall under the scope of SFAS No. 133 and thus, we believe that SFAS
No. 133 will not significantly affect our financial condition and results of
operations.

In December 1999, the Securities and Exchange Commission, or SEC, issued Staff
Accounting Bulletin No. 101, "Revenue Recognition," or SAB 101.  SAB 101
provides the SEC Staff's views in applying generally accepted accounting
principles to selected revenue recognition issues.  We have implemented the
guidance in SAB 101 for all periods presented.

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation," or FIN No. 44.  FIN No. 44 clarifies the application of APB No.
25 for certain issues related to equity-based instruments issued to employees.
FIN No. 44 became effective on July 1, 2000, except for certain transactions,
and has been applied on a prospective basis.  The implementation of FIN No. 44
did not have a significant impact on our results of operations and financial
position.



                                       26
<PAGE>

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

The primary objective of our investment activities is to preserve principal
while at the same time maximize the income we receive from our investments
without significantly increasing risk.  Some of the securities that we invest in
may have market risk.  This means that a change in prevailing interest rates or
a change in the credit of any companies represented by such securities may cause
the principal amount of the investment to fluctuate.  For example, if we hold a
security that was issued with a fixed interest rate at the then-prevailing rate
and the prevailing interest rate later rises, the market value of our investment
will probably decline. For investments held at December 31, 2000 a 1% change in
the interest rate would change the value of our investments by approximately $1
million. If we hold a security that was rated on the credit risk of certain
companies and any of these company's credit is downgraded, the market value of
our investment will probably decline. To minimize this risk in the future, we
intend to maintain our portfolio of cash equivalents and short-term investments
in a variety of securities, including commercial paper, money market funds,
government and non-government debt securities. Set forth below is quantitative,
tabular disclosure relating to our current investments:
<TABLE>
<CAPTION>

                                                   Maturity Dates
                                     ------------------------------------------
                                         2001             2002         Total      Fair Value
                                     -----------      -----------   -----------   -----------
<S>                                  <C>           <C>              <C>           <C>
      Marketable Debt Securities,
         Principal Values..........  $72,445,000      $24,954,000   $97,399,000   $98,146,344
      Average Interest Rate........         6.44%            6.67%          6.5%
</TABLE>

Item 8.  Financial Statements and Supplementary Data

Our consolidated financial statements and related notes thereto required by this
item are included in this report beginning on page F-1.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

PART III

Our Proxy Statement for our 2001 Annual Meeting of Stockholders, which, when
filed pursuant to Regulation 14A under the Securities Exchange Act of 1934, will
be incorporated by reference into this report on Form 10-K pursuant to General
Instruction G(3) of Form 10-K and will provide the information required under
Part III (Items 10, 11, 12 and 13).



                                       27
<PAGE>

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  The following documents are filed as part of this report:

     1.  CONSOLIDATED FINANCIAL STATEMENTS


                                                                            Page
                                                                            ----
         Report of Independent Public Accountants..........................  F-1
         Consolidated Balance Sheets as of December 31, 2000 and 1999......  F-2
         Consolidated Statements of Operations for the years ended
          December 31, 2000, 1999, and 1998................................  F-3
         Consolidated Statements of Stockholders' Deficit for the years
          ended December 31, 2000, 1999 and 1998...........................  F-4
         Consolidated Statements of Cash Flows for the years ended
          December 31, 2000, 1999 and 1998.................................  F-6
         Notes to Consolidated Financial Statements........................  F-7

     2.  FINANCIAL STATEMENT SCHEDULES

         Financial statement schedules are not applicable for the year ended
         December 31, 2000, and have therefore been omitted or the information
         is presented in the consolidated financial statements or related notes.

     3.  EXHIBITS - See Exhibit Index on page 50.

(b)  Reports on Form 8-K.

     None.



                                       28
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Genomica Corporation:

We have audited the accompanying consolidated balance sheets of Genomica
Corporation (a Delaware corporation) and subsidiary as of December 31, 2000 and
1999, and the related consolidated statements of operations and comprehensive
loss, stockholders' equity and cash flows for each of the three years in the
period ended December 31, 2000.  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 financial position of Genomica Corporation and
subsidiary as of December 31, 2000 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States.

                                         /s/ Arthur Andersen LLP

Denver, Colorado,
  February 2, 2001.



                                      F-1
<PAGE>

                              GENOMICA CORPORATION
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>


                                                       December 31,   December 31,
                                                           2000           1999
                                                       ------------   ------------
<S>                                                    <C>            <C>
                      ASSETS
                      ------
Current Assets:
  Cash and cash equivalents..........................  $ 25,784,803   $  3,518,570
  Short-term investments.............................    73,153,650      2,824,763
  Accounts receivable-trade..........................       353,448        360,000
  Interest receivable................................     2,162,810         51,599
  Prepaid expenses and other.........................       352,114         96,438
                                                       ------------   ------------
     Total current assets............................   101,806,825      6,851,370
                                                       ------------   ------------
Long-Term Investments................................    24,992,694             --
Property and Equipment, net..........................     2,723,507        673,479
Other Assets.........................................        66,750         28,786
                                                       ------------   ------------
     Total assets                                      $129,589,776   $  7,553,635
                                                       ============   ============

      LIABILITIES AND STOCKHOLDERS' EQUITY
      ------------------------------------
Current Liabilities:
  Accounts payable...................................  $    933,903   $    318,206
  Accrued compensation and employee benefits.........       431,357        289,538
  Current portion of capital lease obligations.......            --        130,142
  Deferred revenue...................................       814,626        829,601
  Other accrued expenses.............................       323,751         37,429
                                                       ------------   ------------
     Total current liabilities.......................     2,503,637      1,604,916
                                                       ------------   ------------
Long-Term Debt:
  Capital lease obligations, net of current portion..            --        268,157
                                                       ------------   ------------
     Total liabilities...............................     2,503,637      1,873,073
                                                       ------------   ------------
Commitments and Contingencies
Stockholders' Equity:
  Convertible preferred stock, $.001 par value,
     5,000,000 and 37,688,178 shares
     authorized, respectively:
       Series A, zero and 12,533,676 shares
        issued and outstanding, respectively.........            --      7,504,266
       Series B, zero and 18,826,959 shares
        issued and outstanding, respectively.........            --     12,369,208
  Common stock, $.001 par value, 50,000,000,
     and 44,000,000 shares authorized,
     22,839,559 and 1,140,073 shares issued and
     22,715,016 and 1,079,309 shares
     outstanding, respectively.......................        22,839          1,140
  Treasury stock, at cost............................       (19,715)          (182)
  Additional paid-in capital.........................   168,136,541         31,228
  Options and warrants...............................    33,307,529      7,764,767
  Deferred compensation..............................   (16,929,010)    (5,772,446)
  Accumulated other comprehensive income.............       256,984             --
  Accumulated deficit................................   (57,689,029)   (16,217,419)
                                                       ------------   ------------
     Total stockholders' equity......................   127,086,139      5,680,562
                                                       ------------   ------------
     Total liabilities and stockholders' equity        $129,589,776   $  7,553,635
                                                       ============   ============

</TABLE>



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



                                      F-2
<PAGE>

                             GENOMICA CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE LOSS
<TABLE>
<CAPTION>


                                        For the Years Ended December 31,
                                    ----------------------------------------
                                        2000          1999          1998
                                    ------------   -----------   -----------
<S>                                 <C>            <C>           <C>
Revenue:
  Software licenses and services..  $  1,615,064   $   622,230   $   196,892
  Research grants.................        26,733       159,100            --
                                    ------------   -----------   -----------
     Total revenue................     1,641,797       781,330       196,892
                                    ------------   -----------   -----------

Operating Expenses:
  Costs of revenue................       383,585       447,057       141,490
  Research and development........    12,046,615     4,868,577     2,327,569
  Selling and marketing...........     7,196,761     1,722,141       633,551
  General and administrative......     8,965,352     1,723,364       884,267
                                    ------------   -----------   -----------
     Total operating expenses.....    28,592,313     8,761,139     3,986,877
                                    ------------   -----------   -----------
       Operating loss.............   (26,950,516)   (7,979,809)   (3,789,985)
Interest Income...................     2,632,434       419,279        90,325
Interest Expense..................       (44,715)      (17,941)      (55,214)
                                    ------------   -----------   -----------
Net Loss..........................   (24,362,797)   (7,578,471)   (3,754,874)
Deemed Dividend Related to
  Beneficial Conversion Feature
  of Preferred Stock..............   (17,108,813)           --            --
                                    ------------   -----------   -----------
Net Loss Applicable to Common
  Stockholders....................  $(41,471,610)  $(7,578,471)  $(3,754,874)
                                    ============   ===========   ===========

Net Loss Per Share, basic and
  diluted.........................  $      (6.49)  $     (7.13)  $     (3.81)
                                    ============   ===========   ===========

Weighted Average Common
  Shares Outstanding, basic
  and diluted.....................     6,387,998     1,062,392       986,015
                                    ============   ===========   ===========

Comprehensive Loss:
  Net loss........................  $(24,362,797)  $(7,578,471)  $(3,754,874)
  Other comprehensive income:
     Net unrealized gain on
     investments..................       256,984            --            --
                                    ------------   -----------   -----------
  Comprehensive loss..............  $(24,105,813)  $(7,578,471)  $(3,754,874)
                                    ============   ===========   ===========

Pro Forma Net Loss Per Share
(Unaudited - Note 3):
  Net loss per share, basic
   and diluted....................  $      (2.56)
                                    ============

  Weighted-average common
   shares outstanding,
   basic and diluted..............    16,223,151
                                    ============

</TABLE>



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



                                      F-3
<PAGE>

                             GENOMICA CORPORATION

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                -----------------------------------------------
<TABLE>
<CAPTION>


                                  Preferred Stock         Common Stock      Treasury Stock    Additional   Options
                             -------------------------  -----------------  -----------------   Paid-In       and
                               Shares        Amount      Shares    Amount   Shares   Amount    Capital     Warrants
                             -----------  ------------  ---------  ------  --------  -------  ----------  ----------
<S>                          <C>          <C>           <C>        <C>     <C>       <C>      <C>         <C>

Balances, December 31, 1997   12,533,676  $ 7,504,266     976,532  $  977  (60,764)   $(182)     $ 1,953  $       --

Sale of Series B preferred
 stock for cash of $0.72 per
 share, net of offering
 costs of
 $332,264                      7,347,927    4,958,243          --      --       --       --           --          --
Issuance of warrants to
 purchase Series B
 preferred stock                      --           --          --      --       --       --           --      82,298
Conversion of notes payable
 to Series B preferred
 stock                         1,409,589      940,272          --      --       --       --           --          --
Issuance of common stock
 upon exercise of options             --           --     129,327     129       --       --       23,150          --
Net loss                              --           --          --      --       --       --           --          --
                             -----------  -----------   ---------  ------  -------   ------   ----------  ----------

Balances, December 31, 1998   21,291,192   13,402,781   1,105,859   1,106  (60,764)    (182)      25,103      82,298

Sale of Series B preferred
 stock for cash of $0.72 per
 share, net of offering
 costs of $538,180            10,069,443    6,711,819          --      --       --       --           --          --
Issuance of warrants to
 purchase common stock                --     (241,126)         --      --       --       --           --     241,126
Issuance of common stock
 upon exercise of options             --           --      34,214      34       --       --        6,125          --
Deferred compensation                 --           --          --      --       --       --           --   7,441,343
Amortization of deferred
 compensation                         --           --          --      --       --       --           --          --
Net loss                              --           --          --      --       --       --           --          --
                             -----------  -----------   ---------  ------  -------   ------   ----------  ----------

Balances, December 31, 1999   31,360,635  $19,873,474   1,140,073  $1,140  (60,764)   $(182)     $31,228  $7,764,767

<CAPTION>

                                                Accumulated
                                                  Other          Accumu-
                                 Deferred     Comprehensive      lated
                               Compensation      Income         Deficit        Total
                               -------------  -------------  -------------  -----------
<S>                            <C>            <C>            <C>            <C>

Balances, December 31, 1997     $        --   $          -- $  (4,884,074)  $ 2,622,940

Sale of Series B preferred
 stock for cash of $0.72 per
 share, net of offering
 costs of
 $332,264                                --              --            --     4,958,243
Issuance of warrants to
 purchase Series B
 preferred stock                         --              --            --        82,298
Conversion of notes payable
 to Series B preferred
 stock                                   --              --            --       940,272
Issuance of common stock
 upon exercise of options                --              --                      23,279
Net loss                                 --              --    (3,754,874)   (3,754,874)
                               ------------   -------------  ------------   -----------

Balances, December 31, 1998              --              --    (8,638,948)    4,872,158

Sale of Series B preferred
 stock for cash of $0.72 per
 share, net of offering
 costs of $538,180                       --              --            --     6,711,819
Issuance of warrants to
 purchase common stock                   --              --            --            --
Issuance of common stock
 upon exercise of options                --              --            --         6,159
Deferred compensation            (7,441,343)             --            --            --
Amortization of deferred
 compensation                     1,668,897              --            --     1,668,897
Net loss                                 --              --    (7,578,471)   (7,578,471)
                               ------------   -------------  ------------   -----------

Balances, December 31, 1999     $(5,772,446)  $          --  $(16,217,419)  $ 5,680,562

</TABLE>



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



                                      F-4
<PAGE>

                             GENOMICA CORPORATION

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                -----------------------------------------------
                                  (Continued)
                                  -----------
<TABLE>
<CAPTION>



                                    Preferred Stock           Common Stock         Treasury Stock     Additional      Options
                             ---------------------------  -------------------  --------------------     Paid-In         and
                                Shares        Amount        Shares    Amount    Shares     Amount       Capital       Warrants
                             ------------  -------------  ----------  -------  ---------  ---------  -------------  ------------
<S>                          <C>           <C>            <C>         <C>      <C>        <C>        <C>            <C>

Balances, December 31, 1999   31,360,635   $ 19,873,474    1,140,073  $ 1,140   (60,764)  $   (182)  $     31,228   $ 7,764,767

Sale of Series C preferred
 stock for cash of $1.50 per
 share, net of offering
 costs of $25,139             10,022,635     15,008,815           --       --        --         --             --            --
Sale of Series D preferred
 stock for cash of $3.34 per
 share, net of offering
 costs of $6,000                 900,000      3,000,000           --       --        --         --             --            --
Exercise of warrants to
 purchase Series A and B
 preferred stock                 204,637        161,265           --       --        --         --             --       (31,890)
Conversion of Series A, B,
 C, and D preferred stock
 to common stock             (42,487,907)   (38,043,554)  14,162,629   14,162        --         --     38,029,392            --
Issuance of 6,440,000
 shares of common stock
 at $19.00 per share                  --             --    6,440,000    6,440        --         --    122,353,560            --
Costs related to issuance
 of common stock                      --             --           --       --        --         --     (9,883,554)           --
Cash paid out for
 fractional shares due to
 reverse split of common
 stock                                --             --           --       --        --         --           (545)           --
Exercise of warrants to
 purchase common stock                --             --      194,495      195        --         --        240,931      (241,126)
Issuance of common stock
 upon exercise of options             --             --      902,362      902        --         --        256,716            --
Repurchase of unvested,
 restricted  common stock
 for treasury                         --             --           --       --   (63,779)   (19,533)            --            --
Deferred compensation                 --             --           --       --        --         --             --    25,815,778
Amortization of deferred
 compensation                         --             --           --       --        --         --             --            --
Net unrealized gain on
 investments                          --             --           --       --        --         --             --            --
Deemed dividend from
 beneficial conversion
 feature of preferred
 stock                                --             --           --       --        --         --     17,108,813            --
Net loss applicable to
 common stockholders                  --             --           --       --        --         --             --            --
                             -----------   ------------   ----------  -------  --------   --------   ------------   -----------

Balances, December 31, 2000           --   $         --   22,839,559  $22,839  (124,543)  $(19,715)  $168,136,541   $33,307,529
                             ===========   ============   ==========  =======  ========   ========   ============   ===========



                                               Accumulated
                                                  Other         Accumu-
                                  Deferred     Comprehensive     lated
                               Compensation      Income         Deficit         Total
                               -------------  -------------  -------------  -------------
<S>                            <C>            <C>            <C>            <C>

Balances, December 31, 1999    $ (5,772,446)  $          --  $(16,217,419)  $  5,680,562

Sale of Series C preferred
 stock for cash of $1.50 per
 share, net of offering
 costs of $25,139                        --              --            --     15,008,815
Sale of Series D preferred
 stock for cash of $3.34 per
 share, net of offering
 costs of $6,000                         --              --            --      3,000,000
Exercise of warrants to
 purchase Series A and B
 preferred stock                         --              --            --        129,375
Conversion of Series A, B,
 C, and D preferred stock
 to common stock                         --              --            --             --
Issuance of 6,440,000
 shares of common stock
 at $19.00 per share                     --              --            --    122,360,000
Costs related to issuance
 of common stock                         --              --            --     (9,883,554)
Cash paid out for
 fractional shares due to
 reverse split of common
 stock                                   --              --            --           (545)
Exercise of warrants to
 purchase common stock                   --              --            --             --
Issuance of common stock
 upon exercise of options                --              --            --        257,618
Repurchase of unvested,
 restricted  common stock
 for treasury                            --              --            --        (19,533)
Deferred compensation           (25,815,778)             --            --             --
 5,815,778)
Amortization of deferred
 compensation                    14,659,214              --            --     14,659,214
Net unrealized gain on
 investments                             --         256,984            --        256,984
Deemed dividend from
 beneficial conversion
 feature of preferred
 stock                                   --              --            --     17,108,813
Net loss applicable to
 common stockholders                     --              --   (41,471,610)   (41,471,610)
                               ------------   -------------  ------------   ------------

Balances, December 31, 2000    $(16,929,010)  $     256,984  $(57,689,029)  $127,086,139
                               ============   =============  ============   ============

</TABLE>


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



                                      F-5
<PAGE>

                             GENOMICA CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                            For the Years Ended December 31,
                                                                       -------------------------------------------
                                                                           2000           1999           1998
                                                                       -------------   ------------   -----------
<S>                                                                    <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................................  $ (24,362,797)  $ (7,578,471)  $(3,754,874)
Adjustments to reconcile net loss to net cash used in
    operating activities--
    Depreciation.....................................................        738,169        253,016       176,926
    Amortization of discount on convertible debt.....................             --             --         7,666
    Amortization of deferred compensation............................     14,659,214      1,668,897            --
    Accretion of discounts (premiums) on investments.................        (92,938)        38,053            --
    Preferred stock issued for accrued interest on convertible debt..             --             --        14,904
    Changes in operating assets and liabilities--
     Accounts receivable.............................................          6,552       (360,000)           --
     Interest receivable.............................................     (2,111,211)       (51,599)           --
     Prepaid expenses and other assets...............................       (255,676)       (43,287)      (13,953)
     Change in other assets..........................................        (37,964)        (4,477)       (4,174)
     Accounts payable................................................        615,697         88,591        83,848
     Accrued compensation and employee benefits......................        141,819        195,945        (8,841)
     Deferred revenue................................................        (14,975)       706,268       123,333
     Other accrued expenses..........................................        286,322        (11,617)     (109,652)
                                                                       -------------   ------------   -----------
      Net cash used in operating activities..........................    (10,427,788)    (5,098,681)   (3,484,817)
                                                                       -------------   ------------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption of investments............................................     22,791,499     16,480,000     2,462,412
Purchases of investments.............................................   (117,763,156)   (19,342,816)           --
Purchase of property and equipment...................................     (2,788,793)      (223,480)     (157,095)
Proceeds from sale of equipment......................................            596             --            --
                                                                       -------------   ------------   -----------
    Net cash used in investing activities............................    (97,759,854)    (3,086,296)    2,305,317
                                                                       -------------   ------------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock...............................    122,360,000             --            --
Proceeds from issuance of preferred stock............................     18,039,954      7,249,999     5,290,507
Proceeds from exercise of warrants for preferred stock...............        129,375             --            --
Proceeds from exercise of common stock options.......................        257,618          6,159        23,279
Proceeds from issuance of convertible debt and warrants..............             --             --     1,000,000
Costs related to issuance of common stock............................     (9,883,556)            --            --
Costs related to issuance of preferred stock.........................        (31,139)      (538,180)     (332,264)
Payments on capital lease obligations................................       (398,299)       (70,313)      (11,239)
Payments on loans....................................................             --       (166,667)     (200,000)
Purchase of common stock for treasury................................        (19,533)            --            --
Payment for fractional shares as a result of common stock
    reverse split....................................................           (545)            --            --
                                                                       -------------   ------------   -----------
     Net cash provided by financing activities.......................    130,453,875      6,480,998     5,770,283
                                                                       -------------   ------------   -----------
NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS....................................................     22,266,233     (1,703,979)    4,590,783
CASH AND CASH EQUIVALENTS AT BEGINNING
 OF PERIOD...........................................................      3,518,570      5,222,549       631,766
                                                                       -------------   ------------   -----------
CASH AND CASH EQUIVALENTS AT END OF
 PERIOD..............................................................  $  25,784,803   $  3,518,570   $ 5,222,549
                                                                       =============   ============   ===========

SUPPLEMENTAL DISCLOSURE OF CASH
 FLOW INFORMATION:
  Cash received for interest.........................................  $     521,323   $    367,680   $    90,325
                                                                       =============   ============   ===========
  Cash paid for interest.............................................  $      44,715   $     17,941   $    32,644
                                                                       =============   ============   ===========
SUPPLEMENTAL DISCLOSURE OF
 NON-CASH FINANCING ACTIVITIES:
  Capital lease obligations
   incurred to acquire equipment.....................................  $          --   $    353,621   $    97,197
                                                                       =============   ============   ===========
  Warrants issued for offering costs.................................  $          --   $    241,126   $        --
                                                                       =============   ============   ===========

</TABLE>



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



                                      F-6
<PAGE>

                             GENOMICA CORPORATION

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               December 31, 2000


1. Organization and Business

Genomica Corporation, a Delaware corporation, and its subsidiary (collectively
the "Company") is a provider of software products and services that enable
pharmaceutical and biotechnology researchers to accelerate the drug discovery
and development process.  The Company's portfolio of products, including
Discovery Manager, Vertebrate Reference Database, and Linkmapper, offers a broad
set of software tools for genomic researchers.

The Company was incorporated in September 1995 and began operations shortly
thereafter.  Since its inception, the Company has incurred significant losses.
Although the Company anticipates that funds or proceeds from product licenses
and working capital at December 31, 2000, primarily as a result of its October
2000 initial public offering (Note 2) will be sufficient to fund its operations
through at least December 31, 2001, additional financing may be needed after
that date by the Company to fund its operations, continue the commercial
development of its products and develop its sales and marketing infrastructure.
There is no guarantee that such financing will be available when needed upon
terms acceptable to the Company.  Operations of the Company are subject to
certain risks and uncertainties including, among others, uncertainty of product
development, conversion of the Company's product to a new technology platform,
inexperience in marketing or selling its product, technological uncertainty,
competition and dependence on key personnel.

2. Initial Public Offering

On October 4, 2000, the Company completed an initial public offering ("IPO") of
6,440,000 shares of its common stock at $19.00 per share.  The net proceeds,
after paying the underwriting discount and estimated expenses associated with
the offering were $112.5 million.  The Company has invested the net proceeds of
this offering in interest-bearing, investment-grade securities.  Further, as a
result of the IPO, all outstanding shares of preferred stock were converted into
shares of common stock in accordance with their terms.

3. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The accounts of the Company have been consolidated.  All intercompany accounts
and transactions have been eliminated.  The consolidated financial statements
are stated in U.S. dollars and are prepared in accordance with accounting
principles generally accepted in the United States.  Certain amounts in the
prior years' consolidated financial statements have been reclassified to conform
to the current year presentation.

Use of Estimates

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

Cash, Cash Equivalents and Investments in Marketable Securities

The Company's investment portfolio consists of investments classified as cash
equivalents, short-term investments, or long-term investments.  All highly
liquid investments with an original maturity of three months or less when
purchased are considered to be cash equivalents.  All cash equivalents are
carried at cost, which approximates fair value.  Short- and long-term
investments consist of U.S. government, state, municipal and corporate debt
securities with maturities of up to 24 months, as well as money market mutual
funds.  During 2000, the Company liquidated a portion of its portfolio of
marketable securities prior to their maturity dates to purchase a Certificate of
Deposit



                                      F-7
<PAGE>

needed to secure a letter of credit. As a result, the Company's held-to-maturity
investments were reclassified to available-for-sale investments as defined in
Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." Accordingly, at December 31,
2000, all investments were carried at fair value as determined by their quoted
market prices and included as appropriate in either short- or long-term
investments. All unrealized gains or losses are included in stockholders' equity
as a component of accumulated other comprehensive income. At December 31, 1999,
all investments were classified as held-to-maturity and accordingly were carried
at amortized cost.

The Company's cash, cash equivalents, short- and long-term investments had a
fair value at December 31, 2000, of $123.9 million and a gross unrealized gain
of $256,984.

The amortized cost basis, aggregate fair value, and unrealized gains or losses
for the Company's cash, cash equivalents, short- and long-term investment
portfolio as of December 31, 2000 is presented below:

<TABLE>
<CAPTION>

                                                                  Gross       Gross
                                       Amortized    Aggregate   Unrealized  Unrealized
                                      Cost Basis   Fair Value     Gains       Losses
                                      -----------  -----------  ----------  ----------
<S>                                   <C>          <C>          <C>         <C>
December 31, 2000
Cash, cash equivalents, and short-
 term investments:
Euro dollar bonds...................  $31,250,187  $31,305,645    $ 55,458      $   --
Corporate debt securities...........   32,356,716   32,538,987     182,271          --
Money  market funds.................   18,253,580   18,253,580          --          --
Asset-backed securities.............   13,190,896   13,202,270      11,374          --
Certificate of deposit..............      625,000      625,000          --          --
Cash................................    3,012,971    3,012,971          --          --
                                      -----------  -----------    --------  ----------
Total cash, cash equivalents, and
  short-term investments............  $98,689,350  $98,938,453    $249,103      $   --
                                      ===========  ===========    ========  ==========

Long-term investments:
Euro dollar bonds...................  $13,091,539  $13,102,214    $ 10,675      $   --
Corporate debt securities...........   10,899,216   10,894,550          --       4,666
Asset-backed securities.............      994,058      995,930       1,872          --
                                      -----------  -----------    --------  ----------
Total long-term investments.........  $24,984,813  $24,992,694    $ 12,547      $4,666
                                      ===========  ===========    ========  ==========
</TABLE>

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of
credit risk are primarily cash and cash equivalents, accounts receivable and
investments in high-grade corporate bonds and commercial paper.  The Company
maintains its cash balances in the form of bank demand deposits and money market
accounts with financial institutions that management believes are creditworthy.
Accounts receivable are typically unsecured and are concentrated in the
pharmaceutical industry.  Three customers (Note 9) accounted for the majority of
the Company's trade accounts receivable as of December 31, 2000.  The Company
has no significant financial instruments with off-balance sheet risk of
accounting loss, such as foreign exchange contracts, option contracts or other
foreign currency hedging arrangements.

Income Taxes

The current provision for income taxes, if any, represents actual or estimated
amounts payable on tax return filings each year.  Deferred tax assets and
liabilities are recorded for the estimated future tax effects of temporary
differences between the tax bases of assets and liabilities and amounts reported
in the accompanying balance sheets, and for operating loss and tax credit
carryforwards.  The change in deferred tax assets and liabilities for the period
measures the deferred tax provision or benefit for the period.  Effects of
changes in enacted tax laws on deferred tax assets and liabilities are reflected
as adjustments to the tax provision or benefit in the period of enactment.  The
Company's deferred tax assets have been completely reduced by a valuation
allowance as it is not more likely than not that some or all of the deferred tax
assets will be realized.



                                      F-8
<PAGE>

Revenue Recognition

The Company generates revenue from the license and related maintenance of its
proprietary software products.  The Company recognizes revenue when there is
persuasive evidence of an arrangement, delivery has occurred, collection is
probable, and the fee is fixed or determinable.  If an acceptance period exists,
license revenues are recognized upon the earlier of customer acceptance or the
expiration of the acceptance period.  The Company generally bundles its license
fees and subsequent maintenance, consisting of software updates, content updates
and support.  The Company has concluded that there is no basis to allocate the
total license and maintenance fees charged in its software arrangements to these
various elements of the arrangement as the Company currently does not offer the
license fee or maintenance for sale separately.  Accordingly, revenue is
generally deferred and recognized ratably over the term of the arrangement.
Certain software arrangements include other elements, such as services and
training.  If present, such elements are unbundled based on vendor-specific
objective evidence of their fair value and the related revenue is recognized
when those elements are delivered.

The Company believes its current revenue recognition policies and practices are
consistent with the provisions of Statement of Position 97-2, "Software Revenue
Recognition" ("SOP 97-2"), as amended by SOP 98-4 and SOP 98-9, which were
issued by the American Institute of Certified Public Accountants, as well as
certain Technical Practice Aids issued from time to time.  Implementation
guidelines for these standards, as well as potential new standards, could lead
to unanticipated changes in the Company's current revenue recognition policies.
Such changes could affect the timing of the Company's future revenue and results
of operations.

Research and Development and Software Development Costs

Research and development costs are charged to expense as incurred and consist of
salaries and other direct costs.  Statement of Financial Accounting Standards
No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased or
Otherwise Marketed," requires the capitalization of certain software development
costs subsequent to the establishment of technological feasibility.  The
Company's software is deemed to be technologically feasible at the point a
working model of the software product is developed.  Through December 31, 2000,
for products developed by the Company, the period from attainment of
technological feasibility to general release has been brief and qualifying costs
were not significant.  Accordingly, the Company has not capitalized any
qualifying software development costs in the accompanying consolidated financial
statements.  The costs of developing routine enhancements are expensed as
research and development costs as incurred because of the short time between the
determination of technological feasibility and the date of general release of
the related products.

Stock-Based Compensation

The Company accounts for its employee stock option plans in accordance with the
provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," ("APB No. 25"), and related interpretations.  The Company
adopted the disclosure-only requirements of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation," ("SFAS No. 123"),
which allows entities to continue to apply the provision of APB No. 25 for
transactions with employees and provide pro forma disclosures for employee stock
grants made as if the fair value-based method of accounting in SFAS No. 123 had
been applied to these transactions.  Any deferred stock compensation calculated
according to APB No. 25 is amortized over the vesting period of the individual
options, generally four or five years, in accordance with Financial Accounting
Standards Board ("FASB") Interpretation No. 28, "Accounting for Stock
Appreciation Rights and Other Variable Stock Option and Awards Plans."

The Company applies the provisions of SFAS No. 123 and related interpretations
to stock-based compensation to non-employees.

In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation" ("FIN No. 44").  FIN No. 44 clarifies the application of APB No.
25 for certain issues related to equity-based instruments issued to employees.
FIN No. 44 became effective on July 1, 2000, except for certain transactions for
which the effective date is earlier, and has been applied on a prospective
basis.  The implementation of FIN No. 44 did not have a significant impact on
the Company's consolidated results of operations or its financial position.



                                      F-9
<PAGE>

Reverse Stock Split

On October 2, 2000, in conjunction with its initial public offering, the Company
completed a one-for-three reverse stock split of all outstanding shares of its
common stock.  All shares of common stock and per share information in the
accompanying financial statements have been retroactively adjusted to reflect
the reverse stock split.

Net Earnings or Loss Per Share

The Company presents basic and diluted earnings or loss per share in accordance
with Statement of Financial Accounting Standards No. 128 "Earnings per Share"
("SFAS No. 128"), which establishes standards for computing and presenting basic
and diluted earnings per share.  Under this statement, basic earnings or loss
per share is computed by dividing the net earnings or loss by the weighted-
average number of shares of common stock outstanding.  Diluted earnings or loss
per share is determined by dividing the net earnings or loss by the sum of (1)
the weighted-average number of common shares outstanding, (2) if not anti-
dilutive, the number of shares of convertible preferred stock as if converted
upon issuance, and (3) if not anti-dilutive, the effect of outstanding stock
options and warrants determined utilizing the treasury stock method.

For all periods presented, the effects of the convertible preferred stock and
stock options and warrants were excluded from the calculation of diluted loss
per share since the result would have been anti-dilutive. The dilutive effect of
common stock options and warrants, without regard to the treasury stock method,
that are excluded from the calculation of diluted loss per share because their
effect is anti-dilutive totaled 1,899,054 in 2000, 1,414,111 in 1999, and
655,027 in 1998. The dilutive effect of convertible preferred stock that are
excluded from the calculation of diluted loss per share because their effect is
anti-dilutive totaled 13,223,975 in 2000, 10,058,124 in 1999 and 4,297,858 in
1998.

Pro forma net loss per share (unaudited) for the year ended December 31, 2000 is
computed using the net loss and weighted-average number of common shares
outstanding, including the pro forma effects of the assumed conversion of the
Company's Series A, B, C and D convertible Preferred Stock into shares of the
Company's common stock as if such conversion occurred on January 1, 2000, or at
date of original issuance, if later.  The resulting pro forma adjustment
includes an increase in the weighted-average shares used to compute basic and
diluted net loss per share of 9,835,153 for the year ended December 31, 2000.

Comprehensive Income

Comprehensive income includes all changes in equity during a period from non-
owner sources.  During the years ended December 31, 1998 and 1999, the Company
had no transactions that were required to be reported as adjustments to
determine comprehensive income (loss).

During 2000, the Company began accounting for its investments as available-for-
sale securities.  Such securities are marked to fair market value with
adjustments included as a component of other comprehensive income.  The excess
of the fair market value of the Company's investments over the amortized cost
was $256,984 at December 31, 2000, and is reflected as an unrealized gain in the
accompanying consolidated statements of operations and comprehensive loss and
consolidated statements of stockholders equity.

Reportable Segments

SFAS No. 131, "Disclosure About Segments of and Enterprise and Related
Information," establishes standards for the reporting of information about
operating segments.  Since its inception, the Company has conducted its
operations in one operating segment.

Recent Accounting Pronouncements

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.
133").  The Statement establishes accounting and reporting standards for
derivative financial instruments and hedging activities related to those
instruments as well as other hedging activities.  In June 1999, the FASB issued
Statement of Financial Accounting Standards No. 137, "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of SFAS
Statement No. 133--an Amendment of FASB Statement No. 133" ("SFAS No. 137").
SFAS No. 137 delays the effective date



                                      F-10
<PAGE>

of SFAS No. 133 to all fiscal quarters of fiscal years beginning after June 15,
2000. Since inception, the Company has not entered into arrangements that would
fall under the scope of SFAS No. 133 and related interpretations and amendments
and thus, the Company believes that SFAS No. 133 will not significantly affect
its financial condition and results of operations.

In December 1999, the Securities and Exchange Commission (the "SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition" ("SAB 101").  SAB 101
provides the SEC Staff's views in applying generally accepted accounting
principles to selected revenue recognition issues.  The Company has implemented
the guidance in SAB 101 for all periods presented.

4.   Property and Equipment

Property and equipment consists of the following at December 31:

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

     Computer and office equipment...  $ 2,222,718   $  953,361
     Furniture and fixtures..........      958,463      123,218
     Software........................      437,958       63,894
     Leasehold improvements..........      308,823       47,657
                                       -----------   ----------
                                         3,927,962    1,188,130
     Less--Accumulated depreciation..   (1,204,455)    (514,651)
                                       -----------   ----------
                                       $ 2,723,507   $  673,479
                                       ===========   ==========


Property and equipment are recorded at cost.  Depreciation is computed using the
straight-line method based on estimated useful lives ranging from three to five
years.  Maintenance and repairs are expensed as incurred.  Depreciation expense
was $738,169, $253,016 and $176,926 for the years ended December 31, 2000, 1999
and 1998, respectively.

5.   Debt

Convertible Notes Payable

In October 1998, the Company issued $1,000,000 of debt securities with an
interest rate of 8% to various investors.  The notes included warrants to
purchase 208,331 shares of Series B Preferred Stock at $0.72 per share.  These
warrants were valued at $82,298 using the Black-Scholes option pricing model.
The Company attributed a portion of the proceeds from the debt offering to the
fair value of the warrants and recorded an initial discount to the carrying
value of the related debt in the amount of $82,298.  The discount was amortized
using the effective interest-rate method over the two-year term of the note.

In conjunction with the sale of the Series B Preferred Stock on December 16,
1998, the net amount of the notes of $925,368 and accrued interest of $14,904
were converted into 1,409,589 shares of Series B Preferred Stock.

Loan Agreement

On September 17, 1997, the Company entered into a Bridge Loan and Security
Agreement ("Loan Agreement") with a bank.  Under the terms of the Loan
Agreement, the outstanding advances of $400,000 were converted into a term loan
("Term Loan") on October 9, 1997.  The principal and interest on the Term Loan
was due in monthly installments through October 9, 1999.  Interest accrued at a
rate equal to the bank's prime rate plus 1.5% (9.25% at December 31, 1998), and
the Loan Agreement was collateralized by assets of the Company.  On October 9,
1999, the Term Loan and all interest was paid in full.



                                      F-11
<PAGE>

6.   Stockholders' Equity

Authorized Shares

At December 31, 2000, the Company is authorized to issue 50,000,000 shares of
common stock and 5,000,000 shares of preferred stock.  On October 4, 2000, the
Company decreased the number of authorized shares of common stock and preferred
stock from 65,000,000 and 47,938,179 shares, respectively.

Series A, B, C and D Convertible Preferred Stock
<TABLE>
<CAPTION>

                                     Series A                  Series B                   Series C                 Series D
                              ------------------------  ------------------------  ------------------------  -----------------------
                                Shares       Amount       Shares       Amount       Shares       Amount       Shares       Amount
                              -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------
<S>                           <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
Balances, December 31, 1997    12,533,676  $ 7,504,266           --  $        --           --  $        --           --  $       --
Sale of Series B preferred
 stock in December 1998 for
 cash of $0.72 per share,
 net of offering costs of
 $332,264....................          --           --    7,347,927    4,958,243           --           --           --          --
Conversion of notes payable
 in December 1998 to Series
 B preferred stock at $0.72
 per share...................          --           --    1,409,589      940,272           --           --           --          --
                              -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------
Balances, December 31, 1998..  12,533,676    7,504,266    8,757,516    5,898,515           --           --           --          --

Sale of Series B preferred
 stock in February 1999 for
 cash of $0.72 per share,
 net of offering costs of
 $538,180....................          --           --   10,069,443    6,711,819           --           --           --          --
Issuance of warrants to
 purchase common stock.......          --           --           --     (241,126)          --           --           --          --
                              -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------
Balances, December 31, 1999..  12,533,676    7,504,266   18,826,959   12,369,208           --           --           --          --

Sale of Series C preferred
 stock at $1.50 per share,
 net of stock issuance costs
 of $25,139..................          --           --           --           --   10,022,635   15,008,815           --          --
Sale of Series D preferred
 stock at $3.34 per share....          --           --           --           --           --           --      900,000   3,000,000
Issuance of 204,637 shares
 of preferred stock upon
 exercised of warrants.......     124,502       75,000       80,135       86,265           --           --           --          --
Conversion of 42,487,907
 shares of preferred stock
 to 14,162,628 shares of
 common stock................ (12,658,178)  (7,579,266) (18,907,094) (12,455,473) (10,022,635) (15,008,815)    (900,000) (3,000,000)
                              -----------  -----------  -----------  -----------  -----------  -----------  -----------  ----------
Balances, December 31, 2000..          --  $        --           --  $        --           --  $        --           --  $       --
                              ===========  ===========  ===========  ===========  ===========  ===========  ===========  ==========
</TABLE>

The Company is authorized to issue preferred stock in various series with rights
and privileges as determined by the Board of Directors.  From its inception
through September 2000, the Company issued a total of 42.5 million shares of
preferred stock.  The shares carried preferences in liquidation, generally equal
to the original issuance price plus all accrued or other declared but unpaid
dividends.  Preferred stockholders were entitled to receive dividends only when,
as and if declared by the Board of Directors, and at such amounts per share as
specified by the Board of Directors.  Each holder of shares of preferred stock
was entitled to a number of votes on an as-if-converted to common basis.
Additionally, all shares of outstanding preferred stock were convertible into
shares of common stock on a one-for-one basis, subject to certain adjustments,
either at the option of the holder or automatically upon certain events.  Upon
completion of the Company's initial public offering in October 2000, all
outstanding shares of preferred stock were automatically converted into
14,162,628 shares of common stock, after taking into account the impact of the
one-for-three reverse stock split.

In connection with the issuance of the Series C preferred stock in March 2000,
the Company recognized a $15.0 million beneficial conversion charge for the
difference between the price at which the Series C preferred stock was sold and
the deemed fair value of the common stock into which it was convertible.  In
connection with the issuance of the Series D preferred stock in September 2000,
the Company recognized a $2.1 million beneficial conversion charge for the
difference between the price at which the Series D preferred stock was sold and
the deemed fair value of the common stock into which it was convertible.  These
amounts are reflected as charges against income available to common stockholders
in the accompanying statement of operations.


                                      F-12
<PAGE>

Stock Option Plan

Our 2000 Equity Incentive Plan (the "Plan") was originally adopted as the 1996
Stock Option Plan and our Board of Directors adopted its restatement and
amendment in March 2000.  In August 2000, the Plan was approved by our
stockholders.  There is currently an aggregate of 5,000,000 shares of common
stock authorized for issuance under the Plan.  The Plan will terminate on March
12, 2010 unless sooner terminated by the Board of Directors or committee.  The
exercise price per share of each option granted will not be less than 110% of
the fair market value of the stock in the case of incentive stock options
granted to persons owning 10% or more of our voting power, as defined, and
otherwise shall not be less than 100% of the fair market value of the stock.
Options generally vest over a four or five-year term.  The exercise period is
not more than five years from the date of grant in the case of incentive stock
options granted to persons owning 10% or more of our voting power and otherwise
not more than ten years.  Awards issued under the Plan prior to its amendment
and restatement will be governed by the terms of the Plan and applicable option
agreements in effect prior to such amendment and restatement.  Prior to the
amendment and restatement, the plan provided only for grants of stock options
and not for other types of awards.

During the years ended December 31, 2000 and 1999, in connection with the grant
of certain stock options to employees, the Company recorded deferred stock-based
compensation of $25.6 million and $7.4 million, respectively, representing the
difference between the exercise price and the deemed fair value (for financial
reporting purposes) of the Company's common stock on the date these stock
options were granted.  In addition, in connection with the grant of stock
options to certain non-employee advisors in 2000 as discussed below, the Company
recorded deferred stock-based compensation of $212,400, representing the
estimated fair market value of the options on December 31, 2000.  Deferred
compensation from the non-employee options is subject to change until such time
that the options become vested.  Deferred compensation is included as a
component of stockholders' equity and is being amortized in accordance with FASB
Interpretation No. 28 over the vesting periods of the related options, which is
generally four or five years.  Stock compensation expense recognized for the
year ended December 31, 2000, and remaining compensation expense to be
recognized as, and to the extent that, the options vest is as follows:
<TABLE>
<CAPTION>

                         Deferred Stock Expense
                         Recognized During The                      Unamortized Deferred Stock Expense To Be Recognized
                              Year Ended                                   During the Periods Ending December 31,
                           December 31, 2000                       2001          2002          2003         2004        2005
                       --------------------------              ------------  ------------  ------------  ----------  ----------
<S>                    <C>                                     <C>           <C>           <C>           <C>         <C>
Research and
 development                    $       4,367,215
Selling and
 marketing                              3,983,129
General and
 administrative                         6,308,870
                                -----------------
                                       14,659,214              $  8,743,149  $  4,893,068  $  2,452,895  $  795,369  $   44,529
                                =================              ============  ============  ============  ==========  ==========
</TABLE>

In the event options for which deferred compensation has been recorded are
canceled prior to vesting, no compensation expense will be recognized.  The
associated deferred compensation will be eliminated as a reduction of Options
and Warrants in Stockholders' Equity.

Restricted Stock

In 1998 and 2000, the Company sold at fair value 112,067 shares and 621,048
shares, respectively, of restricted common stock under the Plan.  The holders of
such shares of restricted common stock, generally executives of the Company,
have entered into Restricted Stock Purchase Agreements under which the Company
has the right to repurchase unvested common shares at the original issuance
price upon termination of these individuals' business relationships with the
Company.  Restrictions on these common shares lapse over periods ranging from
nineteen months to five years, and such lapsing is subject to acceleration under
certain conditions.  At December 31, 1998, 1999 and 2000, restrictions had
lapsed with regard to 39,951, 105,707 and 243,912 of these shares, respectively.
In 2000, the Company repurchased 63,779 shares under the Plan.


                                      F-13
<PAGE>

Pro Forma Disclosures

SFAS No. 123 defines a fair value-based method of accounting for stock-based
compensation plans.  An entity may continue to measure compensation cost for
options granted to employees using the intrinsic value-based method prescribed
by APB No. 25, provided that pro forma disclosures are made of net income or
loss, assuming the fair value-based method of SFAS No. 123 has been applied.

The Company has elected to account for its stock-based employee compensation
plans under APB No. 25; accordingly, for purposes of the pro forma disclosures
presented below, the Company has computed the fair values of all options granted
during 2000, 1999, and 1998 using the Black-Scholes option pricing model and the
following weighted average assumptions:

                                   2000       1999        1998
                                ---------   ---------   ---------

     Risk-free interest rate..     5.12%       5.61%       5.23%
     Expected lives...........   4 years     5 years     5 years
     Expected volatility......     5%          0.001%      0.001%
     Expected dividend yield..     0%          0%          0%


Through the date of the IPO, the Company used the minimum value method for
determining the fair value of options issued to employees.  Subsequent to the
date of the IPO, the Company used a weighted-average volatility of 60%.
Cumulative compensation cost recognized in pro forma net income or loss with
respect to options that are forfeited prior to vesting is adjusted as a
reduction of pro forma compensation expense in the period of forfeiture.

The total fair value of options granted to employees was computed to be
$30,332,057, $7,541,587 and $15,885 for the years ended December 31, 2000, 1999
and 1998, respectively.  Pro forma stock-based compensation, net of the amounts
recorded for amortization of deferred compensation and the effect of
forfeitures, was $392,377, $26,068, and $12,192 for the years ended December 31,
2000, 1999, and 1998, respectively.

If the Company had accounted for its stock-based compensation plans in
accordance with SFAS No. 123, the Company's net loss would have been reported as
follows:
<TABLE>
<CAPTION>

                                                        Year Ended December 31,
                                                ----------------------------------------
                                                    2000          1999          1998
                                                ------------   -----------   -----------
<S>                                             <C>            <C>           <C>
     Net loss:
       As reported............................  $(41,471,610)  $(7,578,471)  $(3,754,874)
                                                ============   ===========   ===========
       Pro forma..............................  $(41,863,987)  $(7,604,539)  $(3,767,066)
                                                ============   ===========   ===========

     Net loss per share (basic and diluted):
       As reported............................  $      (6.49)  $     (7.13)  $     (3.81)
                                                ============   ===========   ===========
       Pro forma..............................  $      (6.55)  $     (7.16)  $     (3.82)
                                                ============   ===========   ===========
</TABLE>

                                      F-14
<PAGE>

A summary of all employee options activity under the Plan for the years ended
December 31, 1998, 1999 and 2000 is as follows:

                                                            Weighted
                                         Number of           Average
                                          Options         Exercise Price
                                         ----------       --------------
     Outstanding at December 31, 1997..     288,577            $0.18
       Granted.........................     283,099            $0.18
       Forfeited.......................     (13,248)           $0.18
       Exercised.......................    (112,400)           $0.18
                                         ----------            -----

     Outstanding at December 31, 1998..     446,028            $0.18
       Granted.........................     697,397            $0.18
       Forfeited.......................    (105,487)           $0.18
       Exercised.......................     (34,214)           $0.18
                                         ----------            -----

     Outstanding at December 31, 1999..   1,003,724            $0.18
       Granted.........................   2,225,917            $2.46
       Forfeited.......................    (270,004)           $2.17
       Exercised.......................    (876,531)           $0.29
                                         ----------            -----

     Outstanding at December 31, 2000..   2,083,106            $2.31
                                         ==========            =====


As of December 31, 2000, 1999 and 1998, 233,338, 261,991 and 106,465 of the
above options were exercisable, respectively, with weighted average exercise
prices of $0.61, $0.18 and $0.18, respectively.

The following table summarizes the weighted average exercise prices of options
granted during the years ended December 31, 2000, 1999 and 1998.

The table includes options for common stock whose exercise price was less than
the fair market value, for financial reporting purposes, of the underlying
common stock at the date of grant and equal to the fair market value at the date
of grant:

                                                  Years Ended December 31,
                                               ------------------------------
                                                  2000       1999      1998
                                               ----------  --------  --------

     EXERCISE PRICE:
     Less than deemed fair market value for
       financial reporting purposes-
     Number of options.......................  $2,099,000  $697,397  $     --
                                               ==========  ========  ========
     Weighted average exercise price.........  $     1.95  $   0.18  $     --
                                               ==========  ========  ========
     Weighted average fair value.............  $    14.05  $  10.81  $     --
                                               ==========  ========  ========
     Equal to deemed fair market value for
       financial reporting purposes-
     Number of options.......................  $  126,917  $     --  $283,099
                                               ==========  ========  ========
     Weighted average exercise price.........  $    10.92  $     --  $   0.18
                                               ==========  ========  ========
     Weighted average fair value.............  $     6.61  $     --  $   0.06
                                               ==========  ========  ========

                                      F-15
<PAGE>

The following table summarizes information about employee stock options
outstanding and exercisable under the Plan at December 31, 2000:
<TABLE>
<CAPTION>

                                    Options Outstanding                     Options Exercisable
                      ---------------------------------------------    ----------------------------
                        Number of          Weighted
                         Options           Average         Weighted        Number        Weighted
                      Outstanding at      Remaining         Average      Exercisable     Average
                       December 31,      Contractual       Exercise    at December 31,   Exercise
  Exercise Price          2000          Life in Years       Price           2000          Price
  --------------      --------------   ---------------  -------------  ---------------  -----------
<S>                 <C>             <C>                  <C>       <C>              <C>
  $0.18                    241,689          8.41            $ 0.18           88,787      $ 0.18
  $0.75                  1,256,666          9.07              0.75          143,222        0.75
  $4.50-$6.50              399,667          9.64              4.56               --          --
  $7.50-$9.50               43,500          9.92              8.44               --          --
  $10.02-$13.50            122,167          9.77             11.17               --          --
  $14.00-$19.44             19,417          9.78             14.70            1,329       15.00
                      ------------     ---------          --------    -------------    --------
                         2,083,106          9.17              2.31          233,338        0.61
                      ============     =========          ========    =============    ========
</TABLE>
Options Issued to Non-Employees

SFAS No. 123 and related interpretations require that all transactions with non-
employees in which goods or services are the consideration received for the
issuance of equity instruments be accounted for based on the fair value of the
consideration received or the equity instruments issued, whichever is more
reliably measurable.  No expense has been recognized related to options granted
in 1998 as their fair value was determined to be nominal.  No options were
issued to non-employees in 1999.  During 2000 the Company granted options for
60,000 shares of common stock to non-employees.  Such options vest over a period
of three years.  The Company has computed the fair value of all options granted
to non-employees during 1998 and 2000 using the Black-Scholes option pricing
model using the following weighted-average assumptions:


                                    2000        1998
                                 ----------  ----------

     Risk-free interest rate..      5.12%       5.23%
     Expected lives...........    10 years    10 years
     Expected volatility......      5.0%        0.001%
     Expected dividend yield..      0.0%        0.0%


The Company has accounted for the options issued in 2000 in accordance with ETIF
96-18, whereby the fair value of the options is recorded at the date of
issuance, and the fair value of all unvested options is subsequently re-measured
at each vesting and/or reporting date.  As a result, subsequent changes in the
fair market value of the underlying common stock could have a significant impact
on future compensation expense.  However, the number of options subject to
change will diminish over time as the options vest.  The fair value of the
options at December 31, 2000 was estimated to be $212,400.  The Company
recognized $24,000 of compensation expense during the year ended December 31,
2000 on these options.

                                      F-16
<PAGE>

A summary of all non-employee option activity for the years ended December 31,
1998, 1999 and 2000 is as follows:

                                                            Weighted
                                         Number of           Average
                                           Shares         Exercise Price
                                         ----------       --------------
     Outstanding at December 31, 1997..      73,333            $0.18
       Granted.........................      32,000            $0.18
       Forfeited.......................     (18,406)           $0.18
       Exercised.......................     (16,927)           $0.18
                                         ----------            -----

     Outstanding at December 31, 1998..      70,000            $0.18
       Granted.........................          --            $0.00
       Exercised.......................          --            $0.00
                                         ----------            -----

     Outstanding at December 31, 1999..      70,000            $0.18
       Granted.........................      60,000            $8.11
       Exercised.......................     (25,833)           $0.18
                                         ----------            -----

     Outstanding at December 31, 2000..     104,167            $4.75
                                         ==========            =====

The following table summarizes information about non-employee stock options
outstanding and exercisable under the Plan at December 31, 2000:
<TABLE>
<CAPTION>

                                       Options Outstanding                      Options Exercisable
                        ------------------------------------------------     --------------------------
                          Number of             Weighted
                           Options               Average        Weighted        Number         Weighted
                        Outstanding at          Remaining       Average       Exercisable      Average
                          December 31,         Contractual      Exercise     at December 31,   Exercise
  Exercise Price             2000             Life in Years      Price           2000            Price
------------------      --------------       ---------------   -----------   ---------------  ------------
<S>                     <C>                  <C>               <C>           <C>              <C>
  $0.18                       44,167               5.46           $0.18           44,167         $0.18
  $8.11                       60,000               9.92            8.11               --            --
                        ------------         ---------------   -----------   -----------      ------------
                             104,167               8.03            4.75           44,167         $0.18
                        ============         ===============   ===========   ===========      ============

</TABLE>
Stock Warrants

In November 1996, the Company  entered into a warrant agreement with a related
party to purchase 124,502 shares of the Company's Series A preferred stock for
an exercise price of $0.6024 per share.  The term of the warrant was through the
earlier of the closing of an initial public offering of the Company's common
stock or November 30, 2001.  No value was attributed to this warrant as its
value was determined to be nominal.  On October 4, 2000, the warrant was
exercised for $75,000 in cash and the Company issued 124,502 shares of Series A
preferred stock that subsequently converted to 41,500 shares of common stock.

On October 9, 1997, under the terms of a warrant agreement, the Company issued a
warrant to a bank to purchase 30,000 shares of the Company's Series A preferred
stock for an exercise price of $0.6024 per share.  The warrant expires on
September 9, 2004.  No value was assigned because the value was determined to be
nominal.

In October 1998, in connection with the issuance of convertible debt, the
Company entered into warrant agreements to purchase a total of 208,331 shares of
the Company's Series B preferred stock for an exercise price of $0.72 per share.
The warrants expire on December 16, 2003.  The Company  determined the fair
value of the warrants to be $82,298 using the Black-Scholes option pricing model
using the following assumptions:

     Exercise price................................................    $0.72
     Fair market value of Series B preferred stock on grant date...    $0.72
     Option life...................................................  5 years
     Volatility rate...............................................      60%
     Risk free rate of return......................................    4.18%
     Dividend rate.................................................       0%

The fair value of these warrants was included as a discount to the related debt.

                                      F-17
<PAGE>

On October 4, 2000, one warrant was exercised for $54,375 in cash and one
warrant was exercised on a net issue basis.  The Company issued 80,135 shares of
Series B preferred stock from these exercises that subsequently converted into
26,711 shares of common stock.

In December 1998, the Company entered into a warrant agreement with the Series B
placement agent to purchase 18,055 shares of the Company's common stock for an
exercise price of $2.16 per share.  The warrants expired on the earlier of the
closing of an initial public offering of the Company's common stock or December
16, 2003.  No deduction from the Series B proceeds was recorded related to these
warrants as their value was determined to be nominal.  On October 4, 2000, the
warrant was exercised on a net issue basis and the Company issued 16,002 shares
of common stock.

In February 1999, the Company entered into a warrant agreement with the Series B
placement agent to purchase 201,388 shares of the Company's common stock for an
exercise price of $2.16 per share.  The warrants expired on the earlier of the
closing of an initial public offering of the Company's common stock or February
11, 2004.  The Company determined the fair value of the warrants to be $241,126
using the Black-Scholes option pricing model using the following assumptions:

     Exercise price.................................................   $2.16
     Fair market value of Series B preferred stock on grant date....   $0.72
     Option life.................................................... 5 years
     Volatility rate................................................     60%
     Risk free rate of return.......................................   4.66%
     Dividend rate..................................................      0%

The fair value of these warrants was included as additional issuance costs of
the Series B preferred stock.

On October 4, 2000, the warrant was exercised on a net issue basis and the
Company issued 178,493 shares of common stock.

7.   Income Taxes

The provision for income taxes includes the following:


                                       2000         1999          1998
                                   -----------   -----------   -----------
     Current --
      Federal....................  $        --   $        --   $        --
      State......................           --            --            --
                                   -----------   -----------   -----------
       Total current provision...           --            --            --
                                   -----------   -----------   -----------

     Deferred -
      Federal....................   (3,365,000)   (2,025,000)   (1,313,000)
      State......................     (326,000)     (197,000)     (127,000)
      Valuation allowance........    3,691,000     2,222,000     1,440,000
                                   -----------   -----------   -----------
       Total deferred provision
        (benefit)................           --            --            --
                                   -----------   -----------   -----------
       Total provision...........  $        --   $        --   $        --
                                   ===========   ===========   ===========

The statutory federal income tax rate was 34% for the years ended December 31,
2000, 1999 and 1998.



                                      F-18
<PAGE>

Differences between the income tax expense reported in the statements of
operations and the amount computed by applying the statutory federal income tax
rate to earnings before income taxes are as follows:
<TABLE>
<CAPTION>


                                                                                            2000         1999          1998
                                                                                        -----------   -----------   -----------
<S>                                                                                     <C>           <C>           <C>
   Benefit at statutory rate..........................................................  $(8,283,000)  $(2,577,000)  $(1,276,000)
   Increase (decrease) due to -
     State income taxes...............................................................     (804,000)     (250,000)     (124,000)
     Nondeductible stock-based compensation...........................................    5,321,000       623,000            --
     Other............................................................................       75,000       (18,000)      (40,000)
     Valuation allowance..............................................................    3,691,000     2,222,000     1,440,000
                                                                                        -----------   -----------   -----------
   Income tax provision...............................................................  $        --   $        --   $        --
                                                                                        ===========   ===========   ===========

</TABLE>

Components of net deferred tax assets (liabilities) as of December 31, 2000 and
1999 are as follows:

<TABLE>
<CAPTION>

                                                                                              2000         1999
                                                                                          -----------   -----------
  <S>                                                                                     <C>           <C>
   Current -
    Accounts receivable.................................................................  $  (147,000)  $  (134,000)
    Interest receivable.................................................................     (807,000)      (19,000)
    Other current assets................................................................     (117,000)      (26,000)
    Accounts payable and accrued liabilities............................................      658,000       241,000
    Deferred revenue....................................................................      330,000       309,000
   Non-current -
    Depreciation........................................................................       19,000        30,000
    Capitalized research and development costs
     for tax purposes...................................................................      678,000       797,000
    Net operating losses................................................................    8,492,000     4,217,000
    Tax credits.........................................................................      130,000       130,000
                                                                                          -----------   -----------
   Total net deferred tax assets........................................................    9,236,000     5,545,000
   Valuation allowance..................................................................   (9,236,000)   (5,545,000)
                                                                                          -----------   -----------
    Net deferred tax assets.............................................................  $        --   $        --
                                                                                          ===========   ===========
</TABLE>

For income tax reporting purposes, the Company has approximately $22.8 million
of net operating loss carryforwards that expire at various dates through 2020.
The Tax Reform Act of 1986 contains provisions that may limit the net operating
loss carryforwards available to be used in any given year in the event of a
significant change in ownership interests, such as due to the Company's IPO in
2000.  The Company also has available income tax credits of approximately
$130,000, expiring at various dates through 2019.  Realization of net operating
loss and tax credit carryforwards is dependent on generating sufficient taxable
income prior to their expiration dates.

During 2000, 1999 and 1998, the Company increased its valuation allowance by
$3,691,000, $2,222,000, and $1,440,000, respectively, due mainly to uncertainty
relating to the realizability of the Company's net operating loss carryforwards
and income tax credits.  The amount of the deferred tax assets considered
realizable could be adjusted in the near term if future taxable income
materializes.



                                      F-19
<PAGE>

8.   Commitments and Contingencies

Operating Leases

The Company leases administrative offices, research facilities and certain
equipment under non-cancelable operating lease agreements.  Rent expense under
these leases was $517,532, $247,368 and $227,982 for the years ended December
31, 2000, 1999 and 1998, respectively.  The following is a schedule of future
minimum lease payments for the years ending December 31:

     2001........  $  661,775
     2002........     681,083
     2003........     700,977
     2004........     717,625
     2005........     417,459
     Thereafter..          --
                   ----------
                   $3,178,919
                   ==========

Cold Springs Harbor License Agreement

The Company is the exclusive licensee of a technology owned by Cold Springs
Harbor Laboratory with regard to a specific patent.  This license gives the
Company the exclusive right to commercialize the related technology.  This
technology is incorporated into the Company's Discovery Manager product.
Accordingly, the Company's business could be materially harmed if the Company
loses or is unable to maintain this license agreement.  Cold Springs Harbor
Laboratory is a related party through its ownership of shares of the Company's
common stock.

Licensing Agreement

In April 1996, the Company entered into a licensing and remarketing agreement
with a third-party software company ("Licensor").  The Company is fully licensed
to use the Licensor's software and documentation.  The Company can sublicense
the use of the Licensor's software to its worldwide customers.  Under the terms
of the two-year sublicense agreement, the Company is required to pay royalties
to the Licensor based on product sales.  During the years ended December 31,
2000, 1999 and 1998, the Company paid approximately $28,542, $57,130, and
$1,800, respectively, under the licensing agreement.

Litigation

The Company is exposed to asserted and unasserted legal claims encountered in
the normal course of business.  Management believes that the ultimate resolution
of any such matters will not have a material adverse effect on the operating
results or the financial position of the Company.

9.   Major Customers

The Company's revenue from customers in excess of 10% of net revenue for each of
the years ended December 31, 2000, 1999 and 1998 are as follows:


                    Year Ended December 31,
                    -----------------------
                    2000     1999      1998
                    ----     ----     -----
     Customer A...  21.0%    41.0%     55.0%
     Customer B...  15.3%    26.0%     45.0%
     Customer C...  32.0%     0.0%      0.0%
     Customer D...  10.8%     0.0%      0.0%
                    ----     ----     -----
                    79.1%    67.0%    100.0%
                    ====     ====     =====



                                     F-20
<PAGE>

The Company's net accounts receivable-trade as of December 31, 2000 and 1999 are
concentrated with certain major customers as follows:

                   2000    1999
                   ----   -----
     Customer B..  37.7%   11.0%
     Customer C..  22.6%   89.0%
     Customer E..  14.1%    0.0%
                   ----   -----
                   74.4%  100.0%
                   ====   =====

10.  Geographic Information

The majority of the Company's operations and assets are based in the United
States.  The Company sells its products to both domestic and foreign customers.
The Company's revenue by geographic area for the years ended December 31, 2000,
1999 and 1998 is as follows:

                          2000      1999      1998
                      ----------  --------  --------
     United States..  $  784,639  $530,310  $ 88,887
     Europe.........     857,158   251,020   108,005
                      ----------  --------  --------
                      $1,641,797  $781,330  $196,892
                      ==========  ========  ========

11.  Employee Benefit Plan

401(k) and Profit Sharing Plan

Effective January 1, 1998, the Company implemented a defined contribution plan
under Section 401(k) of the Internal Revenue Code ("IRC").  Under the plan,
eligible employees may contribute up to 15% of their compensation, subject to
limitations under the IRC.  The Company may make discretionary matching
contributions to the plan upon Board approval.  No contributions to the plan
have been made by the Company to date.

12.  Quarterly Results of Operations (Unaudited)

In view of the rapidly evolving nature of our business and our limited operating
history, we believe that our revenue and other operating results should not be
relied upon as indications of future performance.  The following summarizes
selected quarterly information with respect to the Company's operations for the
last eight fiscal quarters.  Amounts are in thousands, except per share data.

<TABLE>
<CAPTION>

                                              2000 Quarter Ended                     1999 Quarter Ended
                                   --------------------------------------   ------------------------------------
                                    Dec 31   Sept 30   June 30    Mar 31     Dec 31   Sept 30   June 30  Mar 31
                                   -------   -------   -------   --------   -------   -------   -------  -------
<S>                                <C>       <C>       <C>       <C>        <C>       <C>       <C>       <C>
Revenue:
 Software licenses and services..  $   466   $   409   $   396   $    344   $   239   $   198   $    95  $    90
 Research grants.................       --        --        --         27        96        35        28       --
                                   -------   -------   -------   --------   -------   -------   -------  -------
Total revenue....................      466       409       396        371       335       233       123       90

Operating expenses:
 Cost of revenue.................      102        86        93        103       185       108        92       62
 Research & development..........    3,118     2,891     3,244      2,793     2,002     1,104       947      816
 Selling & marketing.............    2,099     2,068     1,662      1,368       620       442       318      342
 General & administrative........    1,926     1,803     2,742      2,494     1,132       299       168      124
                                   -------   -------   -------   --------   -------   -------   -------  -------
Total operating expenses.........    7,245     6,848     7,741      6,758     3,939     1,953     1,525    1,344

Operating loss...................   (6,779)   (6,439)   (7,345)    (6,387)   (3,604)   (1,720)   (1,402)  (1,254)
 Interest income.................    2,016       241       261        114       125       110       117       67
 Interest expense................       (4)      (12)      (12)       (17)       (4)       (4)       (3)      (6)
                                   -------   -------   -------   --------   -------   -------   -------  -------
Net income (loss)................   (4,767)   (6,210)   (7,096)    (6,290)   (3,483)   (1,614)   (1,288)  (1,193)

Deemed dividend related to
 beneficial conversion
 feature of preferred
 stock...........................       --    (2,100)       --    (15,009)       --        --        --       --
                                   -------   -------   -------   --------   -------   -------   -------  -------
Net loss applicable to
 common stockholders.............  $(4,767)  $(8,310)  $(7,096)  $(21,299)  $(3,483)  $(1,614)  $(1,288) $(1,193)
                                   =======   =======   =======   ========   =======   =======   =======  =======
Net loss per share, basic and
 diluted.........................  $ (0.22)  $ (5.68)  $ (5.64)  $ (17.64)  $ (3.19)  $ (1.51)  $ (1.23) $ (1.15)
                                   =======   =======   =======   ========   =======   =======   =======  =======
</TABLE>



                                      F-21
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                         GENOMICA CORPORATION

                                         By:   /s/   TERESA W. AYERS
                                               ---------------------
                                               Teresa W. Ayers
                                               Chief Executive Officer


Date:  March 21, 2001
                               POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Teresa W. Ayers and Daniel R. Hudspeth, or any of them,
his or her attorney-in-fact, each with the power of substitution, for him or her
in any and all capacities, to sign any amendments to this report, and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that each of said attorneys-in-fact, or his or her substitute or substitutes,
may do or cause to be done by virtue hereof.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

                        Signature                        Title                                          Date
                        ---------                        -----                                          ----
<S>                                        <C>                                                      <C>
 /s/   JAMES L. RATHMANN                   Chairman of the Board of Directors                       March 21, 2001
------------------------------
 James L. Rathmann

 /s/   TERESA W. AYERS                     Chief Executive Officer and Director  (Principal         March 21, 2001
------------------------------             Executive Officer)
 Teresa W. Ayers

 /s/   THOMAS G. MARR                      President, Chief Scientist and Director                  March 21, 2001
------------------------------
 Thomas G. Marr

 /s/   DANIEL R. HUDSPETH                  Vice President of Finance, Chief Financial Officer,      March 21, 2001
------------------------------             Secretary and Treasurer (Principal Financial and
 Daniel R. Hudspeth                        Accounting Officer)

 /s/   MARVIN H. CARUTHERS                 Director                                                 March 21, 2001
------------------------------
 Marvin H. Caruthers

 /s/   RALPH E. CHRISTOFFERSEN             Director                                                 March 21, 2001
------------------------------
 Ralph E. Christoffersen

 /s/   ARNOLD J. LEVINE                    Director                                                 March 21, 2001
------------------------------
 Arnold J. Levine

 /s/   ROBERT T. NELSEN                    Director                                                 March 21, 2001
------------------------------
 Robert T. Nelsen

 /s/   WILLIAM E. RICH                     Director                                                 March 21, 2001
------------------------------
 William E. Rich
</TABLE>



                                       50
<PAGE>

                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Exhibit Number                                                             Description
--------------                                                             -----------
-------------------------------------------------------------------------------------------------------------
<C>                                                 <S>
3.1+                                                Restated Certificate of Incorporation of the Registrant.
-------------------------------------------------------------------------------------------------------------
3.2+                                                Amended and Restated Bylaws of the Registrant
-------------------------------------------------------------------------------------------------------------
4.1+                                                Reference is made to Exhibits 3.1 and 3.2.
-------------------------------------------------------------------------------------------------------------
4.2+                                                Specimen Stock Certificate.
-------------------------------------------------------------------------------------------------------------
10.1+                                               Note and Warrant Purchase Agreement, dated October 9,
                                                    1998
-------------------------------------------------------------------------------------------------------------
10.2+                                               Second Amended and Restated Investors' Rights Agreement
                                                    by and among the Company and certain stockholders of the
                                                    Company dated September 5, 2000.
-------------------------------------------------------------------------------------------------------------
10.3+                                               Warrant Agreement to purchase shares of Series A
                                                    Preferred Stock with Silicon Valley Bank, dated
                                                    September 10, 1997.
-------------------------------------------------------------------------------------------------------------
10.4+                                               Form of Warrant Agreement to purchase Series B Preferred
                                                    Stock.
-------------------------------------------------------------------------------------------------------------
10.5+                                               Form of Indemnity Agreement entered into between the
                                                    Company and its directors and executive officers.
-------------------------------------------------------------------------------------------------------------
10.6+                                               License Agreement by and between Cold Spring Harbor
                                                    Laboratory and Genomica Corporation, dated January 6,
                                                    1996.
-------------------------------------------------------------------------------------------------------------
10.7+                                               Gemstone Systems, Inc.  Domestic Software License
                                                    Agreement, dated March 28, 1996.
-------------------------------------------------------------------------------------------------------------
10.8+#                                              Amended and Restated 1996 Stock Option Plan.
-------------------------------------------------------------------------------------------------------------
10.9+#                                              2000 Equity Incentive Plan.
-------------------------------------------------------------------------------------------------------------
10.10+#                                             Form of Grant Notice and Stock Option Agreement under
                                                    the Amended and Restated 1996 Stock Option Plan.
-------------------------------------------------------------------------------------------------------------
10.11+#                                             Form of Grant Notice and Stock Option Agreement under
                                                    the 2000 Equity Incentive Plan.
-------------------------------------------------------------------------------------------------------------
10.12+                                              Lease by and between Boulder 38th LLC and Genomica
                                                    Corporation, dated December 30, 1999.
-------------------------------------------------------------------------------------------------------------
10.13+#                                             Employment Agreement between Genomica Corporation and
                                                    Teresa W. Ayers, dated March 15, 2000.
-------------------------------------------------------------------------------------------------------------
10.14+#                                             Employment Agreement between Genomica Corporation and
                                                    Thomas G. Marr, dated March 15, 2000.
-------------------------------------------------------------------------------------------------------------
10.15+*                                             Product Development and Reseller Agreement between
                                                    Genomica Corporation and PE Biosystems, dated April 7,
                                                    2000.
-------------------------------------------------------------------------------------------------------------
</TABLE>



                                       51
<PAGE>

<TABLE>
<CAPTION>
<C>                                                 <S>
-------------------------------------------------------------------------------------------------------------
10.16+*                                             Object Model Technology License Agreement between the
                                                    Company and Applied Biosystems, dated September 5, 2000.
-------------------------------------------------------------------------------------------------------------
21.1+                                               Subsidiary of the Company.
-------------------------------------------------------------------------------------------------------------
23.1                                                Consent of Arthur Andersen LLP.
-------------------------------------------------------------------------------------------------------------
24.1                                                Power of Attorney. Reference is made to page 50.
-------------------------------------------------------------------------------------------------------------
</TABLE>

_________________
+  Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (File No. 333-32472) filed in connection with the Company's initial
public offering.
*  Confidential treatment granted as to portions of this exhibit. The
information omitted pursuant to such confidential treatment order has been filed
separately with the Securities and Exchange Commission.
#  Indicates management contract or compensatory plan or arrangement.



                                       52