UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549




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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

                                    000-30527
                            (Commission file number)

                             OPTIMARK HOLDINGS, INC.
             (Exact Name of Registrant as Specified in Its Charter)


                    DELAWARE                                   22-3730995
(State or Other Jurisdiction of Incorporation or            (I.R.S. Employer
                 Organization)                             Identification No.)

10 Exchange Place, 24th Floor, Jersey City, NJ                    07302
   (Address of Principal Executive Offices)                     (Zip Code)



                                 (201) 536-7088
              (Registrant's telephone Number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or Section 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 / / No /X/

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date:

At July 31, 2002, the number of shares  outstanding of the  registrant's  common
stock was 33,369,913.



<PAGE>




                                      INDEX


                                                                        Page No.
                                                                        --------

PART I       FINANCIAL INFORMATION

Item 1.      Condensed Consolidated Financial Statements

             Consolidated Balance Sheets as of March 31, 2002
             (Unaudited) and December 31, 2001                              4

             Consolidated Statements of Operations and Comprehensive
             Loss for the Three Months Ended March 31, 2002 and
             March 31, 2001 (Unaudited)                                     5

             Consolidated Statements of Cash Flows for the Three
             Months Ended March 31, 2002 and March 31, 2001
             (Unaudited)                                                    6

             Notes to Unaudited Condensed Consolidated Financial
             Statements                                                     7

Item 2.      Management's Discussion and Analysis of Financial
             Condition and Results of Operations                           16

Item 3.      Quantitative and Qualitative Disclosures About
             Market Risk                                                   20

PART II      OTHER INFORMATION                                             21

Item 1.      Legal Proceedings                                             21

Item 2.      Changes in Securities and Use of Proceeds                     22

Item 6.      Exhibits and Reports on Form 8-K                              23




                                       2
<PAGE>


FORWARD LOOKING STATEMENTS

         This Quarterly Report on Form 10-Q includes forward-looking  statements
within the meaning of Section 21E of the  Securities  Exchange  Act of 1934,  as
amended (the  "Exchange  Act").  These  statements  are based on our beliefs and
assumptions  and on  information  currently  available  to  us.  Forward-looking
statements  include the  information  concerning  our possible or assumed future
results of operations set forth in Part I, Item 2 - "Management's Discussion and
Analysis of  Financial  Condition  and Results of  Operations."  Forward-looking
statements   also   include   statements   in  which  such  words  as  "expect,"
"anticipate," "contemplate," "intend," "plan," "believe," "estimate," "consider"
or similar expressions are used.

         Forward-looking  statements are not  guarantees of future  performance.
They involve risks, uncertainties and assumptions, including the risks discussed
in  Part  II,  Item 7 -  "Management's  Discussion  and  Analysis  of  Financial
Condition  and Results of  Operations"  in the  Company's  amended and  restated
Annual Report on Form 10-K/A for the year ended  December 31, 2001 as filed with
the Securities and Exchange  Commission and elsewhere in this Quarterly  Report.
Our future  results  and  stockholder  values may differ  materially  from those
expressed  in or  indicated  by these  forward-looking  statements.  Many of the
factors that will  determine  these results and values are beyond our ability to
control or predict.  Investors are  cautioned  not to put undue  reliance on any
forward-looking  statements.  In  addition,  we do not  have  any  intention  or
obligation  to  update  forward-looking  statements  after  the  filing  of this
Quarterly Report, even if new information,  future events or other circumstances
have made them  incorrect  or  misleading.  For these  statements,  we claim the
protection  of the safe  harbor  for  forward-looking  statements  contained  in
Section 21E of the Exchange Act.




                                       3
<PAGE>


<TABLE>
OPTIMARK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS


<CAPTION>
                                                                            March 31, 2002
                                                                              (Unaudited)    December 31, 2001
                                                                              -----------    -----------------

<S>                                                                         <C>                <C>
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents ...........................................     $     212,406      $   1,624,017
  Accounts receivable, less allowance for doubtful accounts of $73,002
     at December 31, 2001 .............................................              --              774,180
  Other current assets ................................................           264,115            446,911
                                                                            -------------      -------------
          Total current assets ........................................           476,521          2,845,108

PROPERTY AND EQUIPMENT - NET ..........................................         1,041,126          1,381,435

SOFTWARE LICENSES - NET ...............................................         2,973,767             59,347
OTHER ASSETS ..........................................................           610,015            837,072
                                                                            -------------      -------------

TOTAL ASSETS ..........................................................     $   5,101,429      $   5,122,962
                                                                            =============      =============


LIABILITIES AND STOCKHOLDERS' DEFICIENCY

LIABILITIES:
  CURRENT LIABILITIES:
    Accounts payable and accrued liabilities ..........................     $     756,339      $     678,901
    Accrued compensation ..............................................           542,367          1,141,246
    Loan payable ......................................................           501,528               --
    Net liabilities of discontinued operations (Note 4) ...............        13,403,266         13,816,260
    Other current liabilities .........................................           946,523            879,842
                                                                            -------------      -------------
          Total current liabilities ...................................        16,150,023         16,516,249
                                                                            -------------      -------------

  OTHER LIABILITIES:
    Long term portion of license fee obligation .......................         2,650,000               --
    Minority Interest .................................................           147,362               --
                                                                            -------------      -------------
          Total other liabilities .....................................         2,797,362               --
                                                                            -------------      -------------

COMMITMENTS AND CONTINGENCIES

MANDATORILY REDEEMABLE STOCK
  Series E  preferred stock, convertible, $0.01 par value;
    1,000,000  shares authorized; 983,333 and 926,665 issued and
    outstanding at March 31, 2002 and, December 31, 2001, respectively         14,437,426         13,630,854
  Series F preferred stock, $0.01 par value; 7,400,000 shares
    authorized and no shares issued and outstanding at
    March 31, 2002 and December 31, 2001 respectively .................              --                 --
  Series G preferred stock, $0.01 par value; 300,000 shares
    authorized, issued and outstanding at
    March 31, 2002 and December 31, 2001 respectively .................             3,000              3,000
                                                                            -------------      -------------

TOTAL MANDATORILY REDEEMABLE STOCK ....................................        14,440,426         13,633,854
                                                                            -------------      -------------

STOCKHOLDERS' DEFICIENCY:
  Preferred stock, authorized and unissued 8,577,932
    at March 31, 2002 and December 31, 2001
  Series A preferred stock, convertible and participating,
    $0.01 par value; 3,222,068 shares authorized; 925,683 shares
    issued and outstanding at March 31, 2002 and December 31, 2001 ....             9,257              9,257
  Series B preferred stock, convertible, $0.01 par value;
    11,000,000 shares authorized; 10,820,000 shares issued and
    outstanding at March 31, 2002 and December 31, 2001 ...............           108,200            108,200
  Series C preferred stock, convertible, $0.01 par value;
    8,250,000 shares authorized, issued and outstanding
    at March 31, 2002 and December 31, 2001 ...........................            82,500             82,500
  Series D preferred stock, convertible, $0.01 par value;
    250,000 shares authorized, issued and outstanding
    at March 31, 2002 and December 31, 2001 ...........................             2,500              2,500
  Common stock, $0.01 par value; 150,000,000 shares
    authorized; issued  36,612,557  shares at March 31, 2002
    and  December 31, 2001, respectively, of which 3,242,644 shares are
    held as treasury stock at  March 31, 2002 and December 31, 2001,
    respectively ......................................................           366,126            366,126
  Warrants, common stock ..............................................        35,686,523         35,686,523
  Additional paid-in capital ..........................................       301,687,065        301,687,065
  Accumulated deficit .................................................      (366,165,836)      (362,906,807)
  Accumulated other comprehensive loss ................................           (62,716)           (62,504)
  Treasury stock ......................................................                (1)                (1)
                                                                            -------------      -------------
          TOTAL STOCKHOLDERS' DEFICIENCY ..............................       (28,286,382)       (25,027,141)
                                                                            -------------      -------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY ........................     $   5,101,429      $   5,122,962
                                                                            =============      =============
</TABLE>

See notes to consolidated financial statements


                                       4
<PAGE>
OPTIMARK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
THREE MONTHS ENDED MARCH 31,


                                                       2002             2001
                                                    Unaudited        Unaudited
                                                    ---------        ---------

REVENUE:
  Revenue from affiliate ....................     $       --       $  1,317,965
  Revenue, other ............................             --          2,100,000
                                                  ------------     ------------
          Total revenue .....................             --          3,417,965

EXPENSES:
  Cost of sales .............................             --          2,250,851
  Sales and marketing .......................          313,848          446,203
  Research and development ..................        1,462,859        1,544,053
  General and administrative ................        1,124,042        3,115,602
  Depreciation and amortization .............          390,833        1,033,728
                                                  ------------     ------------
          Total operating expenses ..........        3,291,582        8,390,437

OTHER (INCOME) EXPENSE:
  Interest income ...........................           (4,139)         (19,803)
  Interest expense ..........................            4,397           62,498
                                                  ------------     ------------
          Total other expense ...............              258           42,695
                                                  ------------     ------------

LOSS FROM CONTINUING OPERATIONS .............       (3,291,840)      (5,015,167)

DISCONTINUED OPERATIONS:
  Loss from discontinued operations .........             --               --
  Loss on disposal of discontinued operations          (69,827)        (681,283)
                                                  ------------     ------------
  Loss from discontinued operations .........          (69,827)        (681,283)
                                                  ------------     ------------

Loss before minority interest ...............       (3,361,667)      (5,696,450)

Minority interest in loss of subsidiary .....          102,638             --

NET LOSS ....................................       (3,259,029)      (5,696,450)

OTHER COMPREHENSIVE LOSS:
  Foreign currency translation adjustments ..              212           94,550
                                                  ------------     ------------

COMPREHENSIVE LOSS ..........................     $ (3,258,817)    $ (5,601,900)
                                                  ============     ============

LOSS PER SHARE - BASIC AND DILUTED:
  Continuing operations .....................     $      (0.09)    $      (0.14)
                                                  ------------     ------------
  Discontinued operations ...................     $      (0.00)    $      (0.02)
                                                  ------------     ------------
  Total loss per share ......................     $      (0.09)    $      (0.16)
                                                  ------------     ------------

  Weighted average number of common
     shares outstanding - basic and diluted .       36,369,913       36,612,557
                                                  ============     ============


See notes to consolidated financial statements

                                       5
<PAGE>

<TABLE>
OPTIMARK HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31


<CAPTION>
                                                                           2002             2001
                                                                        (Unaudited)      (Unaudited)
                                                                        -----------      -----------
<S>                                                                     <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss ......................................................     $(3,259,029)     $(5,696,450)
    Deduct loss from discontinued operations ......................         (69,827)        (681,283)
                                                                        -----------      -----------
    Loss from continuing operations ...............................      (3,189,202)      (5,015,167)
                                                                        -----------      -----------
    Adjustments to reconcile net loss from continuing operations to
     net cash used in continuing operations:
      Depreciation and amortization ...............................         390,833        1,033,728
      Minority interest in income of subsidiary ...................        (102,638)            --
      (Gain) loss on disposal of assets ...........................        (333,924)            (379)
    Changes in operating assets and liabilities:
      Receivables .................................................         774,180        2,157,740
      Other assets ................................................         409,853          101,699
      Accounts payable and accrued liabilities ....................        (417,487)         458,106
      Other liabilities ...........................................        (135,957)         346,692
                                                                        -----------      -----------
    Net cash used in continuing operations ........................      (2,604,342)        (917,581)
                                                                        -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchases of property and equipment ...........................         (12,000)        (522,104)
    Proceeds from disposal of assets ..............................         380,980            2,279
      Net cash provided by/(used in) investing activities .........         368,980         (519,825)

CASH FLOWS FROM FINANCING ACTIVITIES
    Net proceeds from issuance of preferred stock .................         806,572             --
    Proceeds from shareholder loan ................................         500,000             --
    Payments on capital leases ....................................            --            (82,337)
                                                                        -----------      -----------
      Net cash provided by/(used in) financing activities .........       1,306,572          (82,337)
                                                                        -----------      -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS .........................     $  (928,790)      (1,519,743)

NET CASH USED IN DISCONTINUED OPERATIONS ..........................        (482,821)        (638,870)

CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD ................       1,624,017        2,919,548

                                                                        -----------      -----------
CASH AND CASH EQUIVALENTS, END OF THE PERIOD ......................     $   212,406      $   760,935
                                                                        -----------      -----------

Supplemental disclosure of cash flow information:
    Cash payments for interest - continuing operations ............     $     4,397      $    15,335
    Cash payments for interest - discontinued operations ..........            --               --

Non-cash transaction
    Purchase of software license ..................................     $ 3,000,000      $      --
</TABLE>


See notes to consolidated financial statements

                                       6
<PAGE>


OPTIMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2002 AND 2001

1.  GENERAL INFORMATION

         OptiMark Holdings,  Inc.  ("Holdings" or the "Company") was established
on May 19, 2000, and became the sole  stockholder of two operating  subsidiaries
on June 12, 2000 pursuant to the  reorganization  of the legal  structure of the
company  formerly  known as OptiMark  Technologies,  Inc.  ("OTI").  OTI was the
successor to a company that had been founded in 1996 to begin development of the
OptiMark matching engine technology for use in an electronic  trading system for
equity  securities and related  technologies.  The  reorganization  was effected
pursuant to which (i) OTI formed Holdings as a direct wholly-owned subsidiary of
OTI,  (ii)  Holdings  formed OTI  Acquisition  Corporation  ("OTIA") as a direct
wholly-owned  subsidiary  of  Holdings,  (iii) OTI merged with OTIA  pursuant to
Section  251(g) of the Delaware  General  Corporation  Law, with the name of the
surviving  company  becoming  OptiMark  US  Equities,  Inc.  ("UEI"),  and  with
stockholders  of UEI  being  deemed  to have  received  shares  of  Holdings  by
operation of law. As a result of such merger,  UEI became a direct  wholly-owned
subsidiary of Holdings. References herein to the "Company" refer to Holdings and
its subsidiaries,  with respect to periods following the reorganization,  and to
OTI and its subsidiaries, with respect to periods prior to the reorganization.

         Until September 19, 2000, the Company had operated in two segments, the
Exchange  Solutions  Services Business  (formerly  referred to as the Electronic
Markets Business) and the US Equities Business,  under two separate wholly owned
subsidiaries,  OptiMark,  Inc.  ("OptiMark"),  and OptiMark US  Equities,  Inc.,
respectively.  Effective  September  19,  2000,  the US  Equities  Business  was
discontinued.

         On December 28, 2001, OptiMark formed a then majority-owned subsidiary,
OptiMark Innovations Inc. (formerly known as OTSH, Inc. and referred to below as
"Innovations").  Innovations  was  capitalized on December 31, 2001, and at that
time OptiMark held a 67% voting interest and the remaining  interest was held by
SOFTBANK Capital Partners LP, SOFTBANK Capital LP and SOFTBANK Capital Advisors'
Fund LP (collectively,  "SOFTBANK"). Innovations has authorized capital stock of
7,000 shares of common stock, par value $.01 per share (the "Innovations  Common
Stock"),  and 3,000  shares of  preferred  stock,  par value $.01 per share (the
"Innovations  Preferred  Stock").  Innovations  has  designated  2,000 shares of
Innovations  Preferred Stock, as  "Non-Qualified  Preferred  Stock," which has a
cumulative  preferred dividend at an annual rate of $500 per share, payable when
and if  declared  by the Board of  Directors  of  Innovations.  The  liquidation
preference of the  Non-Qualified  Preferred  Stock is equal to $10,000 per share
plus the aggregate amount of accrued and unpaid dividends or distributions.  The
Non-Qualified  Preferred Stock is also subject to a mandatory  redemption,  at a
price  equal to the  liquidation  preference  amount,  in four  equal  quarterly
installments  on December 31, 2016,  March 31, 2017, June 30, 2017 and September
30, 2017.  Innovations designated 1,000 shares of Innovations Preferred Stock as
"Series B Preferred  Stock,"  which has a  cumulative  preferred  dividend at an
annual rate of $519.21


                                       7
<PAGE>


per  share,  payable  when  and  if  declared  by  the  Board  of  Directors  of
Innovations. The liquidation preference of the Series B Preferred Stock is equal
to  $10,389.61  per share  plus the  aggregate  amount  of  accrued  and  unpaid
dividends or distributions.  On December 31, 2001,  OptiMark received 200 shares
of Innovations Common Stock in exchange for a cash payment of $500,000 and 2,000
shares  of  Non-Qualified  Preferred  Stock  in  exchange  for the  transfer  to
Innovations  of certain  intangible  assets  consisting  of  software,  a patent
application and other assets relating to a securities  trading  technology which
is under  development  (the  "Assets").  The stated  value of the  Non-Qualified
Preferred  Stock was the result of the  evaluation  by the board of directors of
Innovations  of the  value  of the  Assets  based,  in  part,  upon  preliminary
discussions  with  independent  parties  regarding  an  approximate  $10,000,000
investment  for a  one-third  interest  in  Innovations  (see Note 7).  SOFTBANK
received  100 shares of  Innovations  Common Stock (the  "SOFTBANK  Shares") for
$250,000  cash.  Simultaneously,  SOFTBANK's  remaining  obligation  to purchase
shares of Series E Cumulative  Preferred Stock ("Series E Preferred Stock") from
Holdings  pursuant to that certain Series E Preferred Stock Purchase  Agreement,
dated as of June 29, 2001 (as amended on August 16, 2001 and November 16, 2001),
by and among  Holdings and SOFTBANK was reduced by $250,000.  Upon its formation
and initial  capitalization,  Innovations'  aggregate  assets  consisted  of the
Assets and $750,000 in cash.  The principal  business of  Innovations  is to (a)
consummate a purchase of a controlling  interest in The Ashton Technology Group,
a Delaware corporation  ("Ashton") through the purchase of Ashton's common stock
and (b) hold  Ashton's  common  stock for the  benefit  of the  shareholders  of
Holdings and Innovations.

         OptiMark  also  has an  approximately  15%  voting  interest  in  Japan
OptiMark Systems,  Inc. ("JOS"), a Japanese  corporation.  The investment in JOS
previously  accounted for on the equity method does not have any carrying  value
in financial  statements  of the Company as of March 31, 2002.  JOS has realized
continuing  losses  since  its  inception  in 1998.  Since the  Company  has not
provided any  guarantees  and is not committed to provide any future  funding to
JOS it has not  recorded  its equity  share of JOS'  losses,  as the  investment
cannot have a carrying value below $0 (see Note 7).

         Effective in January 2002, the development, sales and marketing efforts
of the Exchange Solutions Services Business were suspended. As of that date, the
primary  purpose of the Company was to hold the securities of Innovations and to
consummate financing and strategic transactions with other parties.

         As a result of the capitalization of Innovations, Holdings and SOFTBANK
have certain call and put rights described  below. The Independent  Committee of
the  Board has the  right  commencing  October  1,  2002 and  exercisable  until
September 30, 2003,  to recommend to the Board that  Holdings  purchase all, but
not less than all, of the SOFTBANK Shares for $125,000 in cash and 16,667 shares
of Series E Preferred Stock of Holdings.  If the Board of Directors accepts such
recommendation, SOFTBANK would be obligated to sell the SOFTBANK shares for that
consideration.

         Upon the occurrence of a Liquidity  Event (defined  below) on or before
September 30, 2003, the SOFTBANK Shares will be purchased by


                                       8
<PAGE>


Holdings for $125,000 in cash and 16,667  shares of Series E Preferred  Stock of
Holdings. A "Liquidity Event" means any of the following: (i) Innovations' sale,
conveyance or other disposition of all or substantially all of its assets,  (ii)
the  acquisition  of  Innovations  by  another  entity  by  means of  merger  or
consolidation resulting in the exchange of the outstanding shares of Innovations
for securities or other  consideration  issued,  or caused to be issued,  by the
acquiring  entity or its  subsidiary,  unless the  stockholders  of  Innovations
immediately  prior to the  consummation of such transaction hold at least 50% of
the voting power of the surviving  corporation as a result of such  transaction,
(iii) the  consummation  by  Innovations  of a transaction  or series of related
transactions,  including  the  issuance  or sale of  voting  securities,  if the
stockholders of Innovations  immediately  prior to such  transaction (or, in the
case of a series of transactions, the first of such transactions) hold less than
50% of the voting power of Innovations  immediately  after the  consummation  of
such transaction (or, in the case of a series of transactions,  the last of such
transactions),  or (iv) any initial  underwritten public offering of Innovations
Common Stock.  Notwithstanding  the  foregoing,  Holdings will not exercise this
call option in the event that the Independent Committee recommends that Holdings
not purchase the SOFTBANK Shares.

         In the event that: (i) the call rights of Holdings described above have
not been  exercised  on or  before  September  30,  2003,  (ii) the  Independent
Committee  no longer  exists  and (iii) no  independent  directors  serve on the
Holdings  Board of Directors  and,  after  reasonable  good faith efforts by the
remaining  members of the Holdings Board of Directors,  no  independent  persons
qualified  to serve on the Holdings  Board of  Directors  have been found or, if
found,  are not willing to serve on the Holdings  Board of  Directors,  then the
Holdings  Board of  Directors  will engage an  independent  investment  banking,
accounting or third party valuation firm to evaluate whether or not it is in the
best interests of Holdings that it purchase the SOFTBANK  Shares.  If such third
party  determines  it is in the best  interests  of  Holdings  to  purchase  the
SOFTBANK Shares, Holdings will be obligated to purchase such shares on or before
December 31, 2003 for  $125,000 in cash and 16,667  shares of Series E Preferred
Stock of Holdings.

         SOFTBANK has the right,  commencing  on October 1, 2002 and  continuing
until  September  30,  2003,  to put all, but not less than all, of the SOFTBANK
Shares to Holdings in exchange for 16,667 shares of Series E Preferred  Stock of
Holdings.

         In the event that no put of, or call on, the  SOFTBANK  Shares has been
exercised  by  October  31,  2003,  then  commencing  on  November  1,  2003 and
continuing  until November 30, 2003,  SOFTBANK has the right to require Holdings
to purchase all, but not less than all, of the SOFTBANK Shares for 16,667 shares
of Series E Preferred Stock of Holdings.

         DISCONTINUED OPERATIONS

         On  September  19,  2000,  the  Company   announced  its  intention  to
discontinue  its  US  Equities  Business.   The  Company  has  discontinued  all
operations  of the  equities  trading  system for the US Equities  Business  and
terminated  all  communications  networks  and other  related  systems that were
necessary to support that business. Accordingly, results of


                                       9
<PAGE>


this  operation  have  been  classified  as   discontinued   operations  in  the
consolidated  financial  statements and prior periods have been  reclassified to
conform to this classification.

         CONTINUATION AS A GOING CONCERN

         The Company's current cash and cash equivalents, plus the expected cash
flows for 2002, are not expected to be sufficient to meet its 2002 operating and
financial commitments. Accordingly, if the Company is unable to raise additional
cash either directly or through sale or borrowing against Innovations'  holdings
of shares of the Ashton  common  stock,  par value  $.01 per share (the  "Ashton
Common  Stock"),  or that certain senior secured  convertible  note of Ashton in
favor of  Innovations  (the  "Note")  (see Note 4) , the Company  would face the
imminent and likely  potential for bankruptcy or liquidation.  If the Company is
forced to declare bankruptcy or pursue  liquidation,  the value of the Company's
assets may not be sufficient to pay its creditors in full and, accordingly,  the
Company's common stock and preferred stock would have no value. The Company will
continue to seek  additional  funding both to support its operation as a holding
company as well as its very limited  efforts  related to  potential  new product
development.  While the Company hopes to be able to obtain additional  financing
for these limited product  development  activities,  continue to borrow money or
raise capital  through the sale or borrowing  against the shares of  Innovations
related to its holdings of shares of the Ashton  Common Stock and the Note,  the
Company  may not be able to raise this  capital  before it runs out of cash.  In
addition,  the Company  has pledged a portion of its shares of capital  stock in
Innovations to SOFTBANK as payment for loans that have already been provided. In
the event that the Company  does not have enough cash to pay the  principal  and
interest on these loans as they come due, the Company's  holdings in Innovations
would be reduced accordingly. This would reduce the Company's ability to utilize
these assets to raise additional  capital necessary to ensure  continuation as a
going concern. There is no assurance that the Company's holdings in Innovations,
as  represented by  Innovations'  holdings of shares of the Ashton Common Stock,
will have any value useable as  collateral  for a loan or sellable to raise cash
at any time or in a time frame that would let the  Company  continue  as a going
concern.

2.  PRESENTATION

Presentation - The accompanying  unaudited,  condensed,  consolidated  financial
statements  include the accounts of the Company.  In the opinion of  management,
all adjustments have been made which are of a normal recurring  nature, so as to
fairly state the results for the interim periods.  All significant  intercompany
transactions  and balances have been eliminated.  Certain  footnote  disclosures
normally included in financial statements prepared in accordance with accounting
principles  generally  accepted  in the United  States  have been  condensed  or
omitted  pursuant  to  Securities  and  Exchange  Commission   ("SEC")rules  and
regulations. The nature of the Company's business is such that the results of an
interim  period are not  necessarily  indicative of the results for a full year.
These  consolidated  statements should be read in conjunction with the financial
statements  and the notes thereto  included in the Company's  audited  financial
statements  as of  December  31,  2001  included  in the  Company's  amended and
restated Annual Report


                                       10
<PAGE>


on Form 10-K/A, as filed with the Securities and Exchange Commission on July 22,
2002.

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 that affect the reported amounts of
assets and liabilities at the date of the financial  statements and the reported
amounts of revenue and expense  during the reporting  periods.  It is reasonably
possible that actual results could differ significantly from those estimates and
significant changes to estimates could occur in the near term.

Recent  Accounting  Pronouncements  - In July 2001,  the FASB  issued  SFAS 142,
"Goodwill and Other  Intangible  Assets"  ("SFAS  142").  SFAS 142 requires that
goodwill  and  other  intangible  assets  with  indefinite  lives no  longer  be
amortized, but instead tested for impairment at least annually. In addition, the
standard  includes  provisions  for the  reclassification  of  certain  existing
intangibles  as  goodwill  and  reassessment  of the  useful  lives of  existing
recognized  intangibles.  SFAS 142 is effective for fiscal years beginning after
December 15, 2001. As of January 1, 2002, OptiMark had no goodwill or intangible
assets  recorded  on its  books.  Therefore,  management  does not  believe  the
adoption of SFAS 142 has a  significant  impact on its  financial  position  and
results of operations.

         In July 2001 the FASB issued SFAS 143, "Accounting for Asset Retirement
Obligations"  ("SFAS 143") which requires the  recognition of a liability for an
asset  retirement  obligation  in the period in which it is  incurred.  When the
liability is initially  recorded,  the carrying amount of the related long-lived
asset is correspondingly  increased. Over time, the liability is accreted to its
present value and the related  capitalized charge is depreciated over the useful
life of the asset.  SFAS 143 is effective for fiscal years  beginning after June
15,  2002.  The  Company is  currently  reviewing  the impact of SFAS 143 on the
Company.

         In  August  2001,  the  FASB  issued  SFAS  144,  "Accounting  for  the
Impairment or Disposal of Long-Lived  Assets"  ("SFAS 144").  SFAS 144 addresses
financial  accounting and reporting for the impairment or disposal of long-lived
assets.  SFAS 144 supersedes FASB Statement 121,  "Accounting for the Impairment
of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed  of",  and the
accounting and reporting provisions of APB Opinion 30, "Reporting the Results of
Operations - Reporting  the Effects of Disposal of a Segment of a Business,  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions", for
the  disposal of a segment of a  business.  This  Statement  also amends ARB 51,
"Consolidated Financial Statements", to eliminate the exception to consolidation
for a subsidiary for which control is likely to be temporary.  The provisions of
this Statement are required to be applied  starting with fiscal years  beginning
after  December 15, 2001. The Company  adopted the new  accounting  standard for
2002 and  determined it had no impact on its financial  statements for the first
quarter.

3.  DISCONTINUED OPERATIONS

         Changes in Net Liabilities of Discontinued Operations from December 31,
2001 to March 31, 2002 is as follows:


                                       11
<PAGE>


<TABLE>
<CAPTION>
                                               Paid or        Additional
                               Balance at      Charged       Accruals and    Balance at
                              December 31,     Against          Other         March 31,
                                  2001        Liability      Adjustments        2002
                                  ----        ---------      -----------        ----
<S>                           <C>              <C>             <C>          <C>
Net Liabilities of
Discontinued
Operations                    (13,816,260)     482,821         (69,827)     (13,403,266)
</TABLE>


4.  FINANCING ACTIVITIES

         On February 4, 2002,  Ashton and Innovations  entered into a securities
purchase agreement (as amended on March 6, 2002 and May 3, 2002, the "Securities
Purchase  Agreement").   Pursuant  to  the  terms  of  the  Securities  Purchase
Agreement,  Innovations  purchased  608,707,567 shares of Ashton common stock in
exchange for  $7,272,727 in cash and  intellectual  property and other  non-cash
assets of Innovations  valued by Ashton and  Innovations for the purposes of the
Securities  Purchase  Agreement  at  $20  million.  The  value  ascribed  to the
intellectual  property and other  non-cash  assets by OptiMark  Innovations  was
based  in  part  on  preliminary   discussions  with  a  potential  investor  in
Innovations.  Ashton or  Innovations  did not obtain an appraisal or other third
party valuation of the fair market value of the intellectual  property and other
non-cash  assets.  There can be no  assurance  that the fair market value of the
intellectual  property and other non-cash  assets is equal to the value ascribed
to these assets by Innovations in the Securities Purchase Agreement.

         On May 7, 2002 (the "Closing Date"),  Innovations and Ashton closed the
transactions contemplated by the Securities Purchase Agreement.

         In  addition,   pursuant  to  the  terms  of  the  Securities  Purchase
Agreement,  Innovations  loaned  approximately $2.7 million in cash to Ashton in
exchange for the Note. The Note will mature in five years, may, at the option of
Innovations,  be  convertible  into shares of Ashton  Common  Stock at a rate of
$.0515838 per share (subject to customary  anti-dilution  adjustments  after the
closing) and will accrue  interest at a rate of 7.5% per annum.  Currently,  the
Note is convertible  into 52,870,757  shares of Ashton Common Stock. The Note is
secured by a pledge and security  agreement  pursuant to which  Innovations  has
received a blanket lien on Ashton's assets, including,  without limitation,  the
pledge of the equity  interests  of Ashton and  Universal  Trading  Technologies
Corporation,  a Delaware  corporation  and  majority-owned  subsidiary of Ashton
("UTTC"),  in  each of ATG  Trading  LLC,  wholly-owned  subsidiary  of  Ashton,
Electronic Market Center,  Inc., a majority-owned  subsidiary of Ashton,  Ashton
Technology  Canada,  Inc.,  a  majority-owned   subsidiary  of  Ashton  ,  Croix
Securities,  Inc., a wholly-owned  subsidiary of UTTC,  REB  Securities  Inc., a
wholly-owned  subsidiary  of  UTTC;  and  NextExchange,   Inc.,  a  wholly-owned
subsidiary of UTTC.

         As of the  Closing  Date,  Innovations  owns  approximately  80% of the
diluted  outstanding  shares of the Ashton Common Stock  calculated as of May 3,
2002.  Diluted shares include the outstanding  shares of the Ashton Common Stock
and (i) shares of any series of capital stock of Ashton or its subsidiaries that
vote together with the Ashton Common


                                       12
<PAGE>


Stock, (ii) any outstanding  options issued to employees and third parties,  and
(iii) shares of the Ashton Common Stock,  or any securities  described in clause
(i) above,  issuable  pursuant to or upon  conversion  or exercise of all rights
granted to any party.  Assuming  conversion of the Note,  Innovations  would own
approximately  an additional 7% of Ashton's  fully-diluted  shares of the Ashton
Common Stock, calculated as of May 3, 2002.

         On March 21,  2002,  the Company  entered  into a loan  agreement  with
certain  of its  shareholders.  Under the terms of the  agreement,  the  Company
borrowed $500,000 for a period of 180 days at an interest rate of 10% per annum.
The loan is secured by substantially  all of the assets of the Company.  In lieu
of repayment of principal in cash,  the lenders may require the Company to repay
the principal  amount of the loan by causing  OptiMark,  Inc. to transfer  eight
shares of common stock and  forty-eight  shares of the  Non-Qualified  Preferred
Stock of  Innovations  subject to adjustment  as provided in the loan  agreement
with accrued interest payable in cash at maturity.

         During the three months  ended March 31, 2002,  the Company sold 56,668
shares of Series E Preferred at $15 per share.  The  aggregate  amount  received
from this sale was  $850,000,  which was paid in cash.  The shares  were sold to
SOFTBANK  Capital  Partners LP, SOFTBANK  Capital LP, SOFTBANK  Capital Advisors
Fund LP, and Big Island LLC, each of whom is an "accredited investor" as defined
in Rule 501(a) under the Securities Act of 1933, as amended.

5.   RELATED PARTY TRANSACTIONS

         On  February  7, 2002,  a loan to an officer in the amount of  $150,000
plus accrued  interest was forgiven in accordance  with the terms and conditions
of the officer's employment agreement.


6.   COMMITMENTS AND CONTINGENCIES

         OptiMark  and  certain  of its  subsidiaries  are  subject to the legal
proceedings  described in the  Company's  amended and restated  Annual Report on
Form 10-K/A for the year ended  December 31, 2001, as filed with the  Securities
and Exchange Commission on July 22, 2002.

         Finova Capital Corporation (Plaintiff) v. OptiMark Technologies,  Inc.,
OptiMark, Inc. and OptiMark Holdings,  Inc. (Defendants),  Superior Court of New
Jersey - Hudson County.  Plaintiff filed this action on June 15, 2001, asserting
claims that  allegedly  arise out of an equipment  lease  agreement  pursuant to
which it is alleged that OptiMark  Technologies,  Inc. (now known as OptiMark US
Equities,  Inc.) agreed to lease  certain  equipment.  Plaintiff  contends  that
OptiMark Technologies, Inc. breached the equipment lease by, among other things,
failing  to pay the  amounts  due  under  the  equipment  lease.  Based on these
allegations,  Plaintiff  has  made  claims  for  breach  of  contract,  tortuous
interference, fraudulent conveyance of such equipment lease agreement and/or the
related  equipment  and/or  other  assets from  OptiMark  Technologies,  Inc. to
OptiMark, Inc. and/or OptiMark Holdings, Inc. and damages in unspecified amounts
exceeding  $6,000,000,   plus  interest,  late  charges,  litigation  costs  and
expenses,  and reasonable  counsel fees. In the fourth quarter of 2001, most, if
not all, of the


                                       13
<PAGE>


equipment that was the subject of the equipment lease was returned  consensually
to  Plaintiff.  The parties  currently  are engaged in  exchanging  responses to
written discovery requests. On February 14, 2002, Plaintiff made a motion to add
Innovations  as a defendant in the case. In the motion,  Plaintiff  alleges that
the transfer of certain assets from OptiMark to Innovations on December 31, 2001
constituted a fraudulent conveyance of such assets. On March 25, 2002, the court
granted  Finova  permission to amend its complaint to include  Innovations.  The
amended  complaint was served on Innovations  on April 22, 2002 and  Innovations
has until approximately  mid-August 2002 to file a response to the complaint. On
June 13, 2002,  Finova amended the complaint to include Ashton.  The Defendants,
Innovations  and Ashton intend to defend this action and the motion  vigorously.
The outcome of this litigation cannot be predicted at this time, although it may
have a material  affect on the  Company's  financial  condition  and  results of
operations.

         Comdisco, Inc. (Plaintiff) v. OptiMark Technologies, Inc. (now known as
OptiMark US Equities,  Inc.)  (Defendant)  and Avnet,  Inc. State of Connecticut
Superior Court, Judicial District of Fairfield at Bridgeport.  Plaintiff filed a
Complaint on December 18, 2000. The action seeks possession of leased equipment,
proceeds  from  the  sale of  leased  equipment,  a  deficiency  judgment  in an
unspecified  amount,  and fees and costs and  interest.  Since the complaint was
filed,  most,  if not  all,  of  the  equipment  was  returned  consensually  to
Plaintiff.  Based on the  complaint  filed in a  related  action  in New  Jersey
(described  below)  and on  other  information  received  from  Comdisco,  it is
believed that amount of damages claimed is  approximately  $6,500,000.  On March
30, 2001, the parties  agreed to consolidate a related case captioned  Comdisco,
Inc. v. OptiMark  Technologies,  Inc., Superior Court of New Jersey Law Division
Hudson County (filed on January 23, 2001) with the  Connecticut  proceeding.  To
effect  the  consolidation,  on or about  April 2,  2001,  the  parties  filed a
stipulation withdrawing Defendant's motion to dismiss Comdisco's Complaint filed
in  the  Superior  Court  of  New  Jersey.  That  motion  had  sought  dismissal
principally on grounds that an identical  action alleging breach of contract had
previously  been filed by Comdisco in Connecticut  State Court.  In exchange for
Defendant's  agreement to withdraw its motion,  Comdisco  agreed to withdraw its
New Jersey Complaint without prejudice. In June 2001, Comdisco made a motion for
summary judgment with respect to a claim against Avnet relating to a guaranty by
Avnet of  Defendant's  obligations  under a Master Lease  Agreement for computer
equipment leased from Comdisco.  Avnet responded to Comdisco's motion by denying
liability  under the guaranty and  asserting a variety of special  defenses.  In
addition,  Avnet filed a cross claim against Defendant.  The cross claim alleges
that if Avnet is found liable under the guaranty,  then Avnet becomes subrogated
to  Comdisco's  rights  under the Master  Lease  Agreement  to the extent of the
payments  Avnet makes to Comdisco  and that  OptiMark is liable to Avnet for any
such  payments.  Defendant  has  responded  to the  cross-claim  by denying  its
material allegations.  The Company intends to defend this action vigorously.  On
February  12, 2002,  Plaintiff  filed a motion for default for failure to plead,
alleging that OptiMark Technologies,  Inc. did not file a pleading responsive to
Plaintiff's second amended complaint. This default will be set aside if OptiMark
Technologies,  Inc.  files an answer  before a judgment  after  default has been
rendered. OptiMark Technologies, Inc. intends to file such a


                                       14
<PAGE>


responsive pleading.  The outcome of this litigation cannot be predicted at this
time,  although  it may  have a  material  affect  on  the  Company's  financial
condition and results of operations.

         Management  intends to vigorously  contest  these suits ; however,  the
likelihood  that these claims will result in loss or  impairment  of an asset is
probable.  Any loss or impairment  resulting  from any of these suits may have a
material impact on the Company's financial  position,  results of operations and
cash flows in future years. An accrual of $13,525,000 with respect to these loss
contingencies  has  been  recorded  by  the  Company  as  part  of its  loss  on
discontinued  operations,  which  represents  management's  best estimate of the
outcome of the negotiations.

         In August 2001,  the Company  entered  into a new  one-year  employment
agreement with an officer of the Company, which provides for annual compensation
of $250,000 and a guaranteed bonus of $200,000, to be paid ratably over the term
of the agreement.

         On February  21,  2002,  Innovations  entered  into a software  license
agreement in connection with the development of a Volume Weighted  Average Price
trading platform.  Under the terms of the agreement,  Innovations is required to
pay $25,000 per month for ten years for the  license  and related  support  (see
Note 7).

7.   SUBSEQUENT EVENTS

         On April 11, 2002,  the Company  entered  into a second loan  agreement
with certain of its shareholders.  Under this second loan agreement, the Company
borrowed $570,000 for a period of 180 days at an interest rate of 10% per annum.
The second loan is secured by substantially all of the assets of the Company. In
lieu of repayment  of principal in cash,  the lenders may require the Company to
repay the  principal  amount of the loan by causing  OptiMark,  Inc. to transfer
twelve  shares  of  common  stock and  fifty-four  shares  of the  Non-Qualified
Preferred  Stock of Innovations  subject to adjustment as provided in the second
loan agreement with accrued interest payable in cash at maturity.

         On April 30, 2002,  Draper Fisher  Jurvetson  ePlanet  Ventures,  L.P.,
Draper  Fisher  Jurvetson  ePlanet  Partners  Fund,  L.L.C.  and  Draper  Fisher
Jurvetson ePlanet Ventures GmbH & Co. KG (collectively,  "Draper") purchased 150
shares of  Innovations  Common Stock for an  aggregate  cash  purchase  price of
$375,000.  On May 7, 2002,  Draper purchased 963 shares of Innovations  Series B
Preferred Stock for an aggregate cash purchase price of $9,630,000.  As a result
of these transactions,  OptiMark's  ownership percent of Innovations was reduced
to less than 50%.  Therefore,  Innovations is no longer a subsidiary and will be
accounted for as an investment using the equity method of accounting.

         On May 3, 2002,  Innovations  transferred  its interest in the software
license and related obligation (see Note 6) to Ashton.

         On May 24, 2002, the Company's  agreement with Asset  International was
terminated. Under the terms of the agreement, the Company returned


                                       15
<PAGE>


the shares  representing its investment in Asset  International  and the Company
was relieved of any obligation to provide services to Asset International.

         On May 31, 2002,  the Company  entered into a third loan agreement with
certain of its  shareholders.  Under this loan agreement,  the Company  borrowed
$1,650,000  for a period of 180 days at an interest  rate of 10% per annum.  The
third loan is secured by substantially all of the assets of the Company. In lieu
of repayment of principal in cash,  the lenders may require the Company to repay
the  principal  amount  of the  loan  by  causing  OptiMark,  Inc.  to  transfer
twenty-eight  shares of common stock and one hundred  fifty-eight  shares of the
Non-Qualified  Preferred Stock of Innovations  subject to adjustment as provided
in the third loan agreement with accrued interest payable in cash at maturity.

         On May 31,  2002,  the  shareholders  of JOS  elected to  dissolve  the
company.


ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Discontinued Operations

         On  September  19,  2000,  the  Company   announced  its  intention  to
discontinue  its  US  Equities  Business.   The  Company  has  discontinued  all
operations  of the  equities  trading  system for the US Equities  Business  and
terminated  all  communications  networks  and other  related  systems that were
necessary to support that business. Accordingly,  results of this operation have
been  classified  as  discontinued  operations  in  the  consolidated  financial
statements  and  prior  periods  have  been  reclassified  to  conform  to  this
classification.  The discussion of results of operations in this section relates
only to the Company's continuing operations, its Exchange Solutions Business.

Continuation as a Going Concern

         The  accompanying  financial  statements  have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of  liabilities  in the normal course of business.  The Company has realized net
losses from operations each year since inception.

         The Company's current cash and cash equivalents, plus the expected cash
flows for 2002, are not expected to be sufficient to meet its 2002 operating and
financial commitments. Accordingly, if the Company is unable to raise additional
cash either directly or through sale or borrowing against Innovations'  holdings
of shares of the Ashton  Common  Stock or the Note,  the Company  would face the
imminent and likely  potential for bankruptcy or liquidation.  If the Company is
forced to declare bankruptcy or pursue  liquidation,  the value of the Company's
assets may not be sufficient to pay its creditors in full and, accordingly,  the
Company's common stock and preferred stock would have no value. The Company will
continue to seek  additional  funding both to support its operation as a holding
company as well as its very limited  efforts  related to  potential  new product
development.  While the Company hopes to be able to obtain additional  financing
for these


                                       16
<PAGE>


limited  product  development  activities,  continue  to  borrow  money or raise
capital through the sale or borrowing against the shares of Innovations  related
to its holdings of shares of the Ashton  Common Stock and the Note,  the Company
may not be able to raise this capital  before it runs out of cash.  In addition,
the Company has pledged a portion of its shares of Capital Stock in  Innovations
to SOFTBANK as payment for loans that have already been  provided.  In the event
that the Company does not have enough cash to pay the  principal and interest on
these loans as they come due, the  Company's  holdings in  Innovations  would be
reduced  accordingly.  This would reduce the Company's  ability to utilize these
assets to raise additional  capital necessary to ensure  continuation as a going
concern.  There is no assurance that the Company's  holdings in Innovations,  as
represented by Innovations'  holdings of shares of the Ashton Common Stock, will
have any value useable as collateral for a loan or sellable to raise cash at any
time or in a time frame that would let the Company continue as a going concern.

History of Losses

         OptiMark  has  experienced  losses each  quarter  since its  inception.
Although the business has been  restructured,  losses are likely to continue for
the foreseeable  future. As of March 31, 2002 the Company's  accumulated deficit
was approximately $366,166,000.

Critical Accounting Policies

         As a  result  of the  Company's  having  discontinued  its US  Equities
Business and suspended its Exchange  Solutions  Services  Business,  the Company
considers the two critical policies  described below to be most important to the
portrayal  of its  financial  condition  and that  require  the most  subjective
judgment  and, as a result  decrease  the  inherent  level of  precision  in our
financial statements.

         Reserve Related to Contract  Renegotiations  and  Terminations.  At the
time we  discontinued  the US Equities  Business,  this  reserve was recorded to
reflect the contingent liability to those companies from which we had previously
contracted for leased  equipment and related  services.  The reserve  balance is
substantially  less than the  gross  claims  made by the  former  suppliers  and
management  must  use  substantial  judgment  based  on,  among  other  factors,
disputing  the  size  of the  gross  claims  based  on  contractual  provisions,
asserting counterclaims and affirmative defenses,  mitigating the claims through
returns or sales of leased equipment and negotiating  substantial  reductions in
the net amounts claimed after mitigation.

         Impairment of Property and Equipment. As a result of the Company having
discontinued its US Equities Business in September 2000 and having suspended its
Exchange  Solutions  Services  Business in January  2002,  certain  property and
equipment  is no longer in use and must be  considered  impaired.  Some of these
assets may be directly identifiable to the discontinued business;  however, many
others are shared  and/or  non-specific  and  careful  judgment  is  required to
determine the appropriate impairment reserve.


                                       17
<PAGE>


Results of Operations

THREE MONTHS  ENDED MARCH 31, 2002  COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2001

         Revenue. Total revenue for the three months ended March 31, 2002 was $0
as compared to  approximately  $3,418,000  for the three  months ended March 31,
2001.  Of these  amounts,  approximately  $1,318,000  in 2001 was  derived  from
services provided to our affiliate,  Japan OptiMark Systems,  Inc. ("JOS").  The
balance in 2001 was  derived  from  services  to Nasdaq and the  recognition  of
revenue previously deferred.  The reduction in services to JOS resulted from the
suspension  of the JOS trading  system  which  operated on the Osaka  Securities
Exchange,  per OptiMark's  amended agreement with Japan OptiMark Systems,  Inc.,
dated May 23, 2001. Billings for enhancement and maintenance ceased as of August
31, 2001.

         Operating Expenses. Operating expenses for the three months ended March
31,  2002  totaled   approximately   $3,292,000  as  compared  to  approximately
$8,390,000  for the three  months  ended  March 31,  2001.  The  following  is a
discussion of the changes as it relates to each of the components:

         Cost of Sales.  Cost of sales  includes  all direct  costs and expenses
incurred in order to develop and implement  our products.  Cost of sales for the
three  months  ended  March 31, 2002  totaled $0 as  compared  to  approximately
$2,251,000 for the three months ended March 31, 2001. The decrease of $2,251,000
is due to the absence of revenue generating projects in 2002.

         Sales and Marketing.  Sales and marketing  expense for the three months
ended March 31, 2002 totaled $314,000 as compared to approximately  $446,000 for
the three months ended March 31,  2001.  The decrease of $132,000 was  primarily
due to a decrease  in  personnel  related  expenses,  communication  expense and
public relations  expenses in connection with the decrease in resources utilized
in  promoting  the  company's  products  and  headcount  reductions  within  the
marketing department.

         Research and  Development.  Research and  development  expense  totaled
approximately  $1,463,000  for the three months ended March 31, 2002 compared to
approximately $1,544,000 for the three months ended March 31, 2001. The decrease
of $81,000 is primarily  due to reduced  expenditures  to customize  and develop
OptiMark's  proprietary matching technology for use in future applications.  The
decrease  consists  primarily of personnel  related  expenses and  communication
expense.

         General and Administrative.  General and administrative expense totaled
approximately  $1,124,000  for the three months ended March 31, 2002 as compared
to  approximately  $3,116,000  for the three months  ended March 31,  2001.  The
decrease of  $1,992,000 is primarily due to a decrease in the cost of OptiMark's
bonus  program,  gain  realized on the sale of assets and decreases in personnel
related expenses, corporate insurance expense and other general office expenses.
The cost of the


                                       18
<PAGE>


bonus program was $0 for the three months ended March 31, 2002 and approximately
$1,000,000 for the three months ended March 31, 2001.

         Depreciation and  Amortization.  Depreciation and amortization  expense
totaled  approximately  $391,000  for the three  months  ended March 31, 2002 as
compared to approximately  $1,034,000 for the three months ended March 31, 2001.
The  decrease  of $643,000 is  primarily  due to the write off of assets  deemed
permanently impaired during the latter part of 2001.

         Other Income and Expense.  Other income and expense  includes  interest
income on cash and cash  equivalents  and  interest  expense on capital  leases.
Other expense,  net, was approximately $300 for the three months ended March 31,
2002 as compared to other expense,  net of  approximately  $43,000 for the three
months  ended March 31,  2001.  The decrease of $42,700 is due to a reduction in
interest incurred on capital lease obligations.

LIQUIDITY AND CAPITAL RESOURCES

         As of  March  31,  2002,  OptiMark's  principal  sources  of  liquidity
consisted of approximately  $212,000 of cash and cash equivalents as compared to
approximately $761,000 of cash and cash equivalents as of March 31, 2001.

         Net cash used in continuing  operating  activities for the three months
ended March 31, 2002 was approximately $2,604,000 and net cash used in operating
activities for the three months ended March 31, 2001 was approximately $918,000.
The change in net operating  cash flows was  attributable  to net losses in both
periods,  partially  reduced  by  non-cash  charges  such  as  depreciation  and
amortization.  The fluctuation  between periods was also affected by net changes
in working capital.

         Net cash provided by investing  activities was  approximately  $369,000
for the  three  months  ended  March  31,  2002 and net cash  used in  investing
activities was approximately $520,000 for the three months ended March 31, 2001.
The cash  provided by investing  activities in 2002  primarily  consisted of the
proceeds received from the sale of assets, chiefly computer equipment.  The uses
of cash in 2001 for investing  activities primarily consisted of the purchase of
a mainframe  computer as part of a  settlement  of all amounts owed to a company
from which Optimark had previously leased equipment.

         Net cash  provided by financing  activities  for the three months ended
March 31,  2002 was  approximately  $1,307,000  and net cash  used in  financing
activities for the three months ended March 31, 2001 was approximately  $82,000.
In 2002, cash was provided from the sale of Series E Cumulative  Preferred Stock
("Series E Preferred") and a shareholder loan.

         The  results  indicated  for  continuing  operations  in the  Condensed
Consolidated  Statements of Cash Flows for the three months ended March 31, 2002
are  not  necessarily  indicative  of the  spending  rates  for  the  continuing
operations.  The results from operations in future periods may differ materially
as we continue to focus our resources on the new business model.


                                       19
<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's only exposure to market risk at March 31, 2002 is related
to interest rates.

         Interest  Rate Risk.  As of March 31, 2002  OptiMark  had cash and cash
equivalents of  approximately  $212,000 that consisted of cash and highly liquid
overnight  investments.  These  investments may be subject to interest rate risk
however  because of the low level of cash  balances,  any such risk would not be
material.

         Foreign Currency  Exchange Rate Risk. As of March 31, 2002, the Company
is not subject to foreign currency exchange rate risk.

         Equity Price Risk. As of March 31, 2002,  the Company is not subject to
equity price risk.


                                       20
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

         OptiMark  and  certain  of its  subsidiaries  are  subject to the legal
proceedings  described in the  Company's  amended and restated  Annual Report on
Form 10-K/A for the year ended  December 31, 2001, as filed with the  Securities
and Exchange Commission on July 22, 2002.

         Finova Capital Corporation (Plaintiff) v. OptiMark Technologies,  Inc.,
OptiMark, Inc. and OptiMark Holdings,  Inc. (Defendants),  Superior Court of New
Jersey - Hudson County.  Plaintiff filed this action on June 15, 2001, asserting
claims that  allegedly  arise out of an equipment  lease  agreement  pursuant to
which it is alleged that OptiMark  Technologies,  Inc. (now known as OptiMark US
Equities,  Inc.) agreed to lease  certain  equipment.  Plaintiff  contends  that
OptiMark Technologies, Inc. breached the equipment lease by, among other things,
failing  to pay the  amounts  due  under  the  equipment  lease.  Based on these
allegations,  Plaintiff  has  made  claims  for  breach  of  contract,  tortuous
interference, fraudulent conveyance of such equipment lease agreement and/or the
related  equipment  and/or  other  assets from  OptiMark  Technologies,  Inc. to
OptiMark, Inc. and/or OptiMark Holdings, Inc. and damages in unspecified amounts
exceeding  $6,000,000,   plus  interest,  late  charges,  litigation  costs  and
expenses,  and reasonable  counsel fees. In the fourth quarter of 2001, most, if
not all,  of the  equipment  that was the  subject  of the  equipment  lease was
returned  consensually  to  Plaintiff.  The  parties  currently  are  engaged in
exchanging  responses  to written  discovery  requests.  On February  14,  2002,
Plaintiff  made a motion to add  Innovations  as a defendant in the case. In the
motion,  Plaintiff  alleges that the transfer of certain assets from OptiMark to
Innovations  on December 31, 2001  constituted  a fraudulent  conveyance of such
assets.  On March 25, 2002,  the court  granted  Finova  permission to amend its
complaint  to  include   Innovations.   The  amended  complaint  was  served  on
Innovations on April 22, 2002 and Innovations has until approximately mid-August
2002 to file a response to the complaint.  On June 13, 2002,  Finova amended the
complaint to include Ashton.  The  Defendants,  Innovations and Ashton intend to
defend this  action and the motion  vigorously.  The outcome of this  litigation
cannot be predicted at this time,  although it may have a material affect on the
Company's financial condition and results of operations.

         Comdisco, Inc. (Plaintiff) v. OptiMark Technologies, Inc. (now known as
OptiMark US Equities,  Inc.)  (Defendant)  and Avnet,  Inc. State of Connecticut
Superior Court, Judicial District of Fairfield at Bridgeport.  Plaintiff filed a
Complaint on December 18, 2000. The action seeks possession of leased equipment,
proceeds  from  the  sale of  leased  equipment,  a  deficiency  judgment  in an
unspecified  amount,  and fees and costs and  interest.  Since the complaint was
filed,  most,  if not  all,  of  the  equipment  was  returned  consensually  to
Plaintiff.  Based on the  complaint  filed in a  related  action  in New  Jersey
(described  below)  and on  other  information  received  from  Comdisco,  it is
believed that amount of damages claimed is  approximately  $6,500,000.  On March
30, 2001, the parties  agreed to consolidate a related case captioned  Comdisco,
Inc. v. OptiMark  Technologies,  Inc., Superior Court of New Jersey Law Division
Hudson


                                       21
<PAGE>


         County (filed on January 23, 2001) with the Connecticut proceeding.  To
effect  the  consolidation,  on or about  April 2,  2001,  the  parties  filed a
stipulation withdrawing Defendant's motion to dismiss Comdisco's Complaint filed
in  the  Superior  Court  of  New  Jersey.  That  motion  had  sought  dismissal
principally on grounds that an identical  action alleging breach of contract had
previously  been filed by Comdisco in Connecticut  State Court.  In exchange for
Defendant's  agreement to withdraw its motion,  Comdisco  agreed to withdraw its
New Jersey Complaint without prejudice. In June 2001, Comdisco made a motion for
summary judgment with respect to a claim against Avnet relating to a guaranty by
Avnet of  Defendant's  obligations  under a Master Lease  Agreement for computer
equipment leased from Comdisco.  Avnet responded to Comdisco's motion by denying
liability  under the guaranty and  asserting a variety of special  defenses.  In
addition,  Avnet filed a cross claim against Defendant.  The cross claim alleges
that if Avnet is found liable under the guaranty,  then Avnet becomes subrogated
to  Comdisco's  rights  under the Master  Lease  Agreement  to the extent of the
payments  Avnet makes to Comdisco  and that  OptiMark is liable to Avnet for any
such  payments.  Defendant  has  responded  to the  cross-claim  by denying  its
material allegations.  The Company intends to defend this action vigorously.  On
February  12, 2002,  Plaintiff  filed a motion for default for failure to plead,
alleging that OptiMark Technologies,  Inc. did not file a pleading responsive to
Plaintiff's second amended complaint. This default will be set aside if OptiMark
Technologies,  Inc.  files an answer  before a judgment  after  default has been
rendered.  OptiMark  Technologies,  Inc.  intends  to  file  such  a  responsive
pleading.  The  outcome of this  litigation  cannot be  predicted  at this time,
although it may have a material affect on the Company's  financial condition and
results of operations.

         Management  intends to vigorously  contest  these suits ; however,  the
likelihood  that these claims will result in loss or  impairment  of an asset is
probable.  Any loss or impairment  resulting  from any of these suits may have a
material impact on the Company's financial  position,  results of operations and
cash flows in future years. An accrual of $13,525,000 with respect to these loss
contingencies  has  been  recorded  by  the  Company  as  part  of its  loss  on
discontinued  operations,  which  represents  management's  best estimate of the
outcome of the negotiations.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         During the three months  ended March 31, 2002,  the Company sold 56,668
shares of Series E Preferred at $15 per share.  The  aggregate  amount  received
from this sale was  $850,000,  which was paid in cash.  The shares  were sold to
SOFTBANK  Capital  Partners LP, SOFTBANK  Capital LP, SOFTBANK  Capital Advisors
Fund LP, and Big Island LLC, each of whom is an "accredited investor" as defined
in Rule 501(a) under the Securities Act of 1933, as amended. The issuance of the
Series E Preferred  constitutes  a private  placement  under Section 4(2) of the
Securities Act of 1933, as amended, and Rule 506 promulgated thereunder.


                                       22
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.       Exhibits


         10.1   Separation Agreement, dated  April  11,  2002,  by  and  between
                OptiMark Holdings, Inc. and Neil G. Cohen.

         99     Certification  pursuant to 18 U.S.C. Section  1350,  as  adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


B.       Reports on Form 8-K

                  Form 8-K, filed January 15, 2002, responding to Items 2 and 7.
The Report related to the capitalization of OptiMark  Innovations Inc. (formerly
known as "OTSH, Inc.").

                  Form 8-K, filed January 31, 2002, responding to Items 5 and 7.
The Report  related to the settlement  reached  between the Company and a former
vendor.

                  Form 8-K, filed February 8, 2002, responding to Items 7 and 9.
The Report related to the execution of the Securities Purchase Agreement between
the Ashton Technology Group, Inc. and OptiMark Innovations Inc.




                                       23
<PAGE>


                                   SIGNATURES

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


                                            OPTIMARK HOLDINGS, INC.

August 26, 2002
                                            By: /s/ Robert J. Warshaw
                                               --------------------------------
                                                Name:  Robert J. Warshaw
                                                Title: Chief Executive Officer
                                                and Principal Financial Officer