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 March 31, 2002

                                       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: 001-11747

                        THE ASHTON TECHNOLOGY GROUP, INC.

               Delaware                                        22-6650372
      (State of incorporation)                                  (I.R.S. ID)

                          1835 MARKET STREET, SUITE 420
                        PHILADELPHIA, PENNSYLVANIA 19103

                                 (215) 789-3300

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

      Common Stock, $0.01 par value                       OTC Bulletin Board
      -----------------------------                       ------------------
Redeemable Common Stock Purchase Warrants            (Name of exchange on which
-----------------------------------------                    registered)
             (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities 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.

State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold,  or the average bid and asked  prices of such
stock,  as of a specified date within 60 days prior to the date of filing.  (See
definition of affiliate in Rule 405). The approximate  aggregate market value of
common  stock  of the  Registrant  was  $7,532,417  as of June 14,  2002,  which
excludes  the value of all shares  beneficially  owned (as defined in Rule 13d-3
under the  Securities  Exchange  Act of 1934) by officers  and  directors of the
Company  (however,  this does not constitute a representation  or acknowledgment
that any of such individuals is an affiliate of the registrant).

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. As of June 14, 2002, there were
690,999,817 shares of the registrant's common stock, $.01 par value outstanding.


<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K into which the document is incorporated:  (1) Any annual report
to  security  holders;  (2) any  proxy  or  information  statement;  and (3) any
prospectus  filed  pursuant  to Rule 424(b) or (e) under the  Securities  Act of
1933.  The listed  documents  should be  clearly  described  for  identification
purposes.

The information required by Part III of this report, to the extent not set forth
herein,  is incorporated  by reference from the  registrant's  definitive  proxy
statement  relating  to the 2002  annual  meeting of  stockholders,  to be filed
pursuant to  Regulation  14A not later than 120 days after the end of the fiscal
year to which this report relates.



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<PAGE>



                        THE ASHTON TECHNOLOGY GROUP, INC.

                                    FORM 10-K
                    For the Fiscal Year Ended March 31, 2002

                                      INDEX

                                                                            Page
PART 1
ITEM 1.     BUSINESS...........................................................4
ITEM 2.     PROPERTIES.........................................................9
ITEM 3.     LEGAL PROCEEDINGS.................................................10
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............10

PART II

ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..........11
ITEM 6.     SELECTED FINANCIAL DATA...........................................12
ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS.............................................13
ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.........26
ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.......................29
ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
               FINANCIAL DISCLOSURE...........................................62

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................62
ITEM 11.    EXECUTIVE COMPENSATION............................................62
ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....62
ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................62

PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
                ON FORM 8-K...................................................63

SIGNATURES....................................................................67





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<PAGE>


            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     Certain statements  included in this document  constitute  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the
Private  Securities   Litigation  Reform  Act  of  1995.  Such   forward-looking
statements  involve known and unknown risks,  uncertainties  and other important
factors that could cause our actual  results,  performance,  or  achievements to
differ materially from any future results, performance or achievements expressed
or implied by such  forward-looking  statements.  Such risks,  uncertainties and
other  important  factors  include,  among  others:   availability,   terms  and
deployment of capital;  our ability to successfully operate and obtain sustained
liquidity in our trading products in order to achieve profitability; our ability
to develop  markets for our  products;  our ability to develop  intended  future
products;   fluctuations  in  securities  trading  volumes,  prices  and  market
liquidity;  our dependence on arrangements with  self-regulatory  organizations;
our dependence on  proprietary  technology;  technological  changes and costs of
technology;  industry  trends;  competition;  changes in  business  strategy  or
development plans;  availability of qualified  personnel;  changes in government
regulation; general economic and business conditions; and other factors referred
to in this Form 10-K.

     In some cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "could," "would,"  "expects,"  "plans,"  "anticipates,"
"believes,"  "estimates,"  "projects,"  "predicts," "potential" or "continue" or
other forms of or the negative of those terms or other comparable terms.

     Although we believe that the expectations  reflected in the forward-looking
statements  are based on  reasonable  assumptions,  we cannot  guarantee  future
results, levels of activity,  performance or achievements.  Moreover, neither we
nor any other person assumes responsibility for the accuracy and completeness of
such  statements.  We do not have a duty to  update  any of the  forward-looking
statements after the date of this filing.

                                     PART 1
ITEM 1.      BUSINESS

     In this Form 10-K,  the terms  "Ashton,"  "we," "our" and "us" refer to The
Ashton Technology Group, Inc. and its subsidiaries,  unless the context suggests
otherwise.

     The Ashton Technology  Group, Inc. was formed as a Delaware  corporation in
1994.  We  provide  equity  trade  execution  services  to global  institutional
investors.  Our goal is to provide  liquidity in S&P 500, NASDAQ 100 and Russell
1000  securities  to global  institutional  investors at a low cost.  We offer a
guaranteed  fill program as a source of anonymous  block  liquidity with minimal
market impact.

     We conduct our business through the following operating affiliates:

     o    ATG Trading, LLC
     o    Universal   Trading   Technologies    Corporation   (UTTC)   and   its
          subsidiaries:
          -    Croix Securities, Inc.
          -    REB Securities, Inc.
     o    Ashton Technology Canada, Inc., and
     o    Kingsway-ATG Asia, Ltd. (KAA)

     Through Croix Securities,  Inc. (Croix) we provide order execution services
for block trades in an anonymous  manner with minimal  market  impact,  and take
orders from our clients to enter  volume-weighted  average  price (VWAP)  trades
into our crossing network vis-a-vis eVWAP.

     Our electronic volume-weighted average price trading system (eVWAP(R)) is a
fully  automated  system that  permits  market  participants  to trade  eligible
securities before the market opens at the volume-weighted  average price for the
day.  During  August  1999,  we  launched  eVWAP  for  selected  New York  Stock
Exchange-listed  U.S.  stocks as a facility of the  Philadelphia  Stock Exchange
(PHLX)  through  REB  Securities,  Inc.  (REB).  We  generate  revenues on a per
transaction  basis  for  each  share  traded  through  eVWAP.  We also  generate
commission revenue on a per transaction basis for orders executed through Croix.
During the year ended March 31, 2002, Croix commissions accounted for 88% of our
revenues, while eVWAP accounted for 12% of our revenues.



                                       4
<PAGE>


     Our  principal  executive  offices  are at 1835 Market  Street,  Suite 420,
Philadelphia,  Pennsylvania  19103. Our telephone number is (215) 789-3300.  Our
website  is  www.ashtontechgroup.com.   Information  on  our  website  does  not
constitute part of this document.

INVESTMENT BY OPTIMARK INNOVATIONS INC.

     On May 7, 2002,  Ashton and  OptiMark  Innovations  Inc.  (Innovations),  a
Delaware  corporation,  closed the  transactions  contemplated by the securities
purchase agreement by and between Ashton and Innovations dated as of February 4,
2002 (as  amended on March 6, 2002 and May 3, 2002).  Pursuant  to the  purchase
agreement,  Ashton issued 608,707,567 shares of its common stock to Innovations.
In consideration for the shares,  Innovations paid Ashton (i) $7,272,727 in cash
and  (ii)  intellectual   property  and  other  non-cash  assets.  In  addition,
Innovations loaned Ashton $2,727,273 in cash. The loan was evidenced by a senior
secured  convertible  note executed by Ashton in favor of Innovations.  The note
accrues  interest at a rate of 7.5% per annum and matures in May 2007.  The note
is  convertible  at any  time at a rate  of  $0.051583  per  share,  subject  to
customary   anti-dilution   adjustments,   and  is  currently  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.

     The  intellectual  property and non-cash  assets  transferred  to Ashton by
Innovations as partial  consideration  for the purchase of Ashton's common stock
consists of:

          o    U.S.  provisional  patent  application (No.  60/323,940  entitled
               "Volume  Weighted  Average  Price  System  and  Method"  filed on
               September 1, 2001) that relates to Volume Weighted Average Price,
               or "VWAP" trading.  The provisional patent application relates to
               processing  orders for trading equity  securities at the VWAP and
               guaranteeing the price and quantity of trades to users who submit
               orders.

          o    Trade secrets and know how relating to VWAP trading.

          o    An assignment to Ashton of a license for  technology for use in a
               system for VWAP trading.

          o    An assignment to Ashton of all rights,  duties,  and  obligations
               under a bilateral nondisclosure agreement between the licensor of
               the technology described above and Innovations.

          o    Software developed to implement  critical  components of the VWAP
               trading system,  including certain tools for testing,  de-bugging
               and building source code.

     The provisional patent application will not provide any exclusive rights to
Ashton unless and until a patent is issued.  There can be no assurance  that the
provisional patent application will result in a patent being issued.

     As of May 7, 2002,  Innovations owned  approximately 88% of the outstanding
shares  of  Ashton  common  stock.  Assuming  conversion  of the note  issued to
Innovations,  Innovations  would own  approximately  89% of Ashton common stock,
calculated  as of May 7, 2002.  As long as  Innovations  owns a majority  of our
outstanding common stock,  Innovations will be able to elect our entire board of
directors and control the outcome of any other matter submitted to a vote of our
stockholders.

ATG TRADING, LLC

     ATG  Trading is a  broker-dealer  engaged  in  proprietary  trading.  Since
January 7, 2002,  ATG  Trading  has been  inactive,  however,  we plan to obtain
approval from the  Philadelphia  Stock  Exchange to return ATG Trading to active
status  during the fiscal year ending  March 31,  2003.  On June 19,  2002,  ATG
Trading  also  applied  to  become  a  member  of the  National  Association  of
Securities Dealers,  Inc. (NASD). Once ATG Trading is active, it will operate as
our principal  trading entity executing orders to provide  liquidity at the VWAP
for  securities  in the S&P 500,  NASDAQ 100 and the  majority  of Russell  1000
stocks  to  various  broker-dealers.  We plan to use our  trading  algorithm  to
execute  orders for the purpose of achieving  the VWAP on behalf of our clients.
ATG Trading plans to offer its liquidity to Croix at competitive price levels.



                                       5
<PAGE>


UNIVERSAL TRADING TECHNOLOGIES CORPORATION

     UTTC was  incorporated  in February  1995 with the  business  objective  of
designing,  developing  and  utilizing the  Universal  Trading  System (UTS) and
future  products  appropriate for the securities  trading  market.  In September
1995,  UTTC entered  into an agreement  with the PHLX to employ the UTS. The UTS
was later renamed eVWAP, and is operated by REB under the regulatory supervision
of the PHLX.

     In  October  1995,  we  acquired  80% of the common  stock of UTTC,  and in
December 1998, our ownership of UTTC was increased to 93%.  UTTC's  wholly-owned
broker-dealer  subsidiaries  REB  Securities,  Inc. and Croix  Securities,  Inc.
operate our eVWAP and buy-side institutional businesses, respectively.

CROIX SECURITIES, INC.

     Croix was formed in February  1999 as a wholly  owned  subsidiary  of UTTC.
Croix is a  registered  broker-dealer  with the PHLX and NASD  that  focuses  on
providing block liquidity for various buy-side institutions.  Croix fills orders
by matching its customers'  orders with  liquidity from various  providers in an
anonymous  manner,  thereby  protecting  Croix's  client trade  information  and
minimizing  market  impact.  Croix has an average of over 200 million  shares of
liquidity  available  for its clients in the S&P 500,  NASDAQ 100 and 700 of the
Russell 1000 stocks.  On May 30,  2002,  Croix  launched the offering of its new
interval product.  The interval product provides for balance of day VWAP on half
hour  time  intervals  from  9:30  A.M  to  2:00P.M.  for  the  above  mentioned
securities.  Croix operates  strictly as an agency broker that matches  buy-side
institutions against contra-side buy-side and liquidity provider interest.

     On  March  30,  2001,  Croix  filed  regulatory  documents  with  the  NASD
requesting approval to operate CroixNet,  an alternative  trading system.  Croix
also filed its "Form ATS Initial  Operations  Report"  with the SEC on April 19,
2001. The SEC's filing was effective  upon proper notice.  On July 31, 2001, the
NASD approved Croix's request. As of March 31, 2002, CroixNet has not yet become
operational.

REB SECURITIES, INC.

     REB  is a  wholly  owned  subsidiary  of  UTTC  and  is a  PHLX  registered
broker-dealer.  REB operates as the facilities  manager for the eVWAP,  and does
not engage in any other  broker-dealer  activities.  eVWAP is a fully  automated
system that permits market  participants to trade eligible securities before the
market opens at the volume-weighted average price for the day. We launched eVWAP
for New York Stock Exchange-listed U.S. stocks during August 1999.

     eVWAP competes with other electronic  trading systems,  including  Instinet
Corporation's crossing network, Investment Technology Group Inc.'s POSIT system,
Bloomberg,  L.P.'s  Tradebook,  Liquidnet,  and  other  companies  that  develop
proprietary  electronic  trading  systems.  eVWAP  also  competes  with  leading
brokerage firms and various national, regional and foreign securities exchanges.
Established  systems such as Instinet and ITG's POSIT have taken years to obtain
their current levels of trading activity,  which are substantially  greater than
those of eVWAP.

     We are  currently  working with the PHLX to  determine  how to make eVWAP a
more robust and active system than it has been in the past;  however,  there are
no  assurances  that we will succeed in reaching a mutually  equitable  business
arrangement  and  therefore we, the PHLX or both parties may decide to terminate
our current relationship.

ASHTON TECHNOLOGY CANADA, INC.

     On December 20, 1999,  we entered into an agreement to create Ashton Canada
to develop, market and operate intelligent matching,  online transaction systems
and distribution systems for use by U.S. and Canadian financial  intermediaries.
On June 8, 2000,  Ashton Canada entered into an agreement with the Toronto Stock
Exchange to market,  deploy, and operate our proprietary eVWAP, as a facility of
the Toronto Stock  Exchange for Canadian  securities.  On January 12, 2001,  the
Ontario Securities Commission approved an amendment to the Rules



                                       6
<PAGE>


and Policies of the Toronto Stock Exchange, allowing the implementation of eVWAP
as  a  facility  of  the  Toronto  Stock  Exchange  and  allowing  Participating
Organizations and eligible  institutional  clients access to the eVWAP facility.
At this time,  the Toronto Stock Exchange has deferred  implementing  eVWAP as a
facility in 2002, and Ashton Canada has reduced expenses and staffing to address
the reduced prospects for near-term revenues from such a facility.

KINGSWAY-ATG ASIA, LTD.

     On December 16, 1999, we finalized a joint venture  agreement with Kingsway
International  to create KAA. Because we own less than 50% of the equity of KAA,
we account for our investment in KAA under the equity method of  accounting,  as
required by generally  accepted  accounting  principles in the United States. We
are  currently  working with  management  of KAA to determine the optimal way to
develop our business of offering liquidity at the VWAP in Far East Asia.

     On January 30,  2002,  Ashton and HK Weaver  Group,  Inc.  entered  into an
"Agreement  For Sale And Purchase Of Shares in respect of the shares in Kingsway
ATG Asia  Limited."  Pursuant to the  agreement,  Ashton has sold all of its KAA
shares to HK Weaver in exchange for a HK$23,400,000  zero-coupon  note issued to
Ashton by HK Weaver,  effective as of May 7, 2002. The note is convertible  into
HK Weaver common stock upon an IPO of HK Weaver and listing of such stock on the
Growth  Enterprise  Market  (GEM)  of the  Stock  Exchange  of Hong  Kong.  Upon
conversion of the note, Ashton shall receive HK Weaver shares equal to the total
principal  amount of the note  divided by the IPO  price.  Such  shares  will be
subject to a lockup  for 18 months  from their  issuance  date.  In the event of
certain  defaults  identified in the note  instrument or should HK Weaver shares
not be listed on GEM by January 30, 2003,  Ashton's  sole  recourse is to redeem
the note and receive the return of its KAA shares.

OTHER AFFILIATES

     We formed Electronic Market Center, Inc. (eMC) as a wholly owned subsidiary
in June 1998 to  develop,  operate and market a global  electronic  distribution
channel for financial  products and services.  In April 2000,  Ashton's board of
directors agreed to fund eMC's initial  development  efforts. On April 18, 2000,
eMC acquired  100% of the stock of  E-Trustco.com  Inc., a  business-to-business
electronic trust services  company.  E-Trustco's plan was to offer and outsource
objective  financial  advisory services through a state-chartered  trust company
using eMC's electronic distribution channel.

     After being unable to find other  funding  sources or  consummate a sale of
eMC to a third party,  eMC's board of directors voted on March 29, 2001 to begin
the orderly  winding down of its  operations,  including  terminating all of its
employees, selling its assets, and negotiating the settlement of its outstanding
liabilities.  eMC's  results are  reflected as  discontinued  operations  in the
consolidated financial statements for all periods presented.

     Gomez, Inc. was previously one of our majority-owned subsidiaries. Due to a
private  placement  by Gomez in  December  1999,  our equity  interest  in Gomez
decreased to less than 50%. We then began accounting for our investment in Gomez
under the equity method of accounting, rather than consolidating Gomez's results
of  operations  within our results.  Our revenue for the fiscal year ended March
31, 2000 was $3.9 million, substantially all of which was generated by Gomez. We
currently  recognize no revenue from Gomez,  and the carrying value of our Gomez
equity  investment  is zero.  Gomez is  unrelated  to our core  trading  systems
business.

REGULATION

GOVERNMENT REGULATION

     Our  broker-dealer  entities  and our  transaction  systems  are subject to
significant government regulation, under both federal and state laws, as well as
the  rules  of  several  self-regulatory  organizations,  or  SROs.  The  SEC is
primarily  responsible for the  administration  of the federal  securities laws,
while SROs are responsible for the day-to-day  regulation of their broker-dealer
members.  The SEC and SROs are also charged with protecting the interests of the
investing  public and the integrity of the  securities  markets.  eVWAP has been
developed  as a facility of the PHLX,  an SRO,  and its  operation is subject to
regulatory  oversight by the SEC. On March 24, 1999, the SEC granted approval to
the PHLX to operate  eVWAP,  and we launched the system on August 30,  1999.  In
1998,  the



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SEC adopted  Regulation ATS and amended Rule 19b-4 under the Exchange Act, which
will  impact how we may launch  new  trading  systems  and  products,  including
modifications to the eVWAP. Our  broker-dealer  affiliates,  Croix, REB, and ATG
Trading,  are subject to regulation by the SEC, the NASD,  and/or the PHLX, with
respect to all aspects of the securities  business,  including sales  practices,
record  keeping,  capital  structure,  and conduct of  directors,  officers  and
employees.  The SEC, SROs and state securities  commissions may conduct periodic
examinations of broker-dealers,  which can result in censures,  fines, orders to
cease and  desist,  or the  suspension  of  broker-dealers,  their  officers  or
employees.  The principal  purpose of these regulations is to protect clients of
broker-dealers and the securities markets,  rather than to protect the creditors
and stockholders of the broker-dealers.

NET CAPITAL REQUIREMENT AND CREDIT RISK

     As registered  broker-dealers,  Croix,  REB, and ATG Trading are subject to
the SEC's  uniform net capital  rule.  The purpose of the net capital rule is to
require  broker-dealers  to have at all times enough  liquid  assets to promptly
satisfy the claims of customers if the  broker-dealer  goes out of business.  If
our broker-dealer affiliates fail to maintain the required net capital, the SEC,
PHLX and/or NASD may impose regulatory sanctions which may include suspension or
revocation  of our  broker-dealer  licenses.  Also,  a change in the net capital
rules,  the imposition of new rules or any unusually large charge against any of
our   broker-dealer   affiliates'   net  capital  could  limit  our  operations,
particularly  ATG Trading that will trade on a proprietary  basis. A significant
operating loss or any unusually  large charge  against any of our  broker-dealer
affiliates'  net capital  could  adversely  affect our ability to expand or even
maintain  our present  levels of business,  which could have a material  adverse
effect on our business,  financial condition and operating results.  Also, these
net  capital   requirements  limit  our  ability  to  transfer  funds  from  our
broker-dealer affiliates to Ashton.

     Both Croix and REB are required to maintain  minimum net capital of $5,000.
As of March 31, 2002, Croix had net capital of $133,089,  which exceeded minimum
net capital requirements by $128,089. On May 31, 2002, Ashton's Board authorized
a loan of up to $1 million to UTTC for the  express  purpose of  increasing  the
capital of Croix, a wholly-owned  subsidiary of UTTC. Thereafter,  Ashton made a
$1 million loan to UTTC, and UTTC, in turn, made a subordinated loan to Croix of
$1  million.  The NASD  approved  the  form of the  Croix  loan for net  capital
purposes  on June 15,  2002.  Accordingly,  as of June 15,  2002,  Croix had net
capital of  $1,161,100,  which  exceeded  minimum  net capital  requirements  by
$1,156,100.  Croix does not act as a market-maker with respect to any securities
or otherwise as principal  in any  securities  transactions;  it acts only on an
agency  basis.  As of March 31,  2002,  REB had net  capital of  $16,362,  which
exceeded minimum net capital requirements by $11,362. Although REB is registered
as a broker-dealer,  it does not perform any traditional broker-dealer services;
it acts only as a facilities  manager for the eVWAP system.  The  relatively low
credit  risk of these  businesses  is  evidenced  by their  minimal  net capital
requirements.

     Since January 7, 2002, ATG Trading has been inactive,  however,  we plan to
obtain  approval from the  Philadelphia  Stock Exchange to return ATG Trading to
active status during the fiscal year ending March 31, 2003. We plan to engage in
principal trading activities  through ATG Trading.  These activities may include
the purchase, sale or short sale of securities and derivative securities.  These
activities are subject to a number of risks  including  price  fluctuations  and
rapid changes in the liquidity of markets,  all of which subjects the capital of
ATG Trading to  significant  risks.  As such,  ATG  Trading  will be required to
maintain minimum net capital of at least $100,000 upon its reactivation. On June
13, 2002,  Ashton's Board  authorized a  subordinated  loan of $1 million to ATG
Trading.  The PHLX  approved  the form of the ATG  Trading  loan for net capital
purposes to be effective July 1, 2002.

COMPETITION

     The SEC's regulations  governing  alternative  trading systems have lowered
the barriers to entering the securities  trading  markets.  We face  competition
from traditional  securities  exchanges,  which could establish  similar trading
systems  in an  attempt  to  retain  their  transaction  volumes.  We also  face
competition from other  alternative  trading systems and leading brokerage firms
offering similar trade execution services.

     Many of our competitors have  substantially  greater  financial,  research,
development,  sales,  marketing and other resources than we do and many of their
products have  substantial  operating  histories.  While we believe our products
offer certain competitive  advantages,  our ability to maintain these advantages
will require  continued  investment  in the  development  of our  products,  and
additional marketing and customer support activities. We may



                                       8
<PAGE>


not have  sufficient  resources to continue to make this  investment,  while our
competitors  may continue to devote  significantly  more  resources to competing
services.

     Our  products  compete with other  electronic  trading  systems,  including
Instinet  Corporation's  crossing  network,  Investment  Technology Group Inc.'s
POSIT system, Bloomberg,  L.P.'s Tradebook,  Liquidnet, and other companies that
develop proprietary  electronic trading systems.  Our electronic trade execution
services also compete with services offered by leading  brokerage firms offering
various forms of volume-weighted  average price trade execution. We also compete
with various  national,  regional  and foreign  securities  exchanges  for trade
execution services.

     We believe our services compete on the basis of quality of trade execution,
pricing, and reliability of trade processing and settlement operations. Although
we feel our services offer complete  anonymity not offered by any other service,
improved  trading  performance,  flexibility  and  other  benefits,  there is no
assurance  that our  products  and  services  will be  accepted  by an  extended
customer base. Nor can we be sure our products will  adequately  address all the
competitive criteria in a manner that results in a competitive advantage.

PROPRIETARY RIGHTS

     We regard our  products and the  research  and  development  that went into
developing  them as our  property.  Unauthorized  third  parties  could  copy or
reverse  engineer  certain portions of our products or obtain or use information
that we regard as proprietary. In addition, our trade secrets could become known
to or be independently developed by our competitors.

     We rely  primarily on a combination  of patent,  trademark and trade secret
protection,   employee  and  third  party   confidentiality  and  non-disclosure
agreements,  license  agreements,  and other  intellectual  property  protection
methods to protect these property rights.  While our competitive position may be
adversely  affected by the unauthorized use of our proprietary  information,  we
believe  the  ability  to  protect  fully  our  intellectual  property  is  less
significant  to our success than other factors,  such as the knowledge,  ability
and experience of our employees and our ongoing product development and customer
support activities.

     Although  we believe  our  services  and  products  do not  infringe on the
intellectual  property  rights of others,  there can be no assurance  that third
parties will not assert  infringement  claims against us in the future. Any such
assertions by third parties could result in costly  litigation,  in which we may
not  prevail.  Also,  in such event,  we may be unable to license any patents or
other intellectual property rights from third parties on commercially reasonable
terms, if at all.  Litigation,  regardless of its outcome,  could also result in
substantial   cost  and  diversion  of  our  already  limited   resources.   Any
infringement  claims or other litigation  against us could materially impact our
business, operating results, and consolidated financial condition.


     eVWAP is  licensed  to  customers  on a "right to use" basis  pursuant to a
non-transferable license that generally restricts the customer's use to internal
purposes.

EMPLOYEES

     As of March 31, 2002, we employed a total of 30 people.


ITEM 2.  PROPERTIES

     On December 23, 1999,  we entered into a ten-year  lease for  approximately
11,000  square  feet  of  office  space  at  1835  Market  Street,   Suite  420,
Philadelphia,  Pennsylvania  19103. Our principal  executive offices are at this
location.



                                       9
<PAGE>


     We also  lease  approximately  1,675  square  feet of office  space at 1900
Market  Street,  Suite 701,  Philadelphia,  Pennsylvania  19103,  pursuant  to a
sublease  expiring in May 2005. This is the principal  location for our computer
operations.

     Effective  June  20,  2002,  we  entered  into a  three-year  sublease  for
approximately  6,000 square feet of office space at 1114 Avenue of the Americas,
22nd  Floor,  New  York,  New York  10036.  This  location  will  serve  our New
York-based staff, which include marketing and technology employees.


ITEM 3.  LEGAL PROCEEDINGS

     On May 20, 2002,  Finova filed a motion to add Ashton as a defendant in the
case Finova Capital Corporation v. OptiMark  Technologies,  Inc., OptiMark,  Inc
and OptiMark Holdings,  Inc., Docket No.:  HUD-L-3884-01,  Superior Court of New
Jersey--Hudson  County.  Finova asserts claims arising out of an equipment lease
agreement pursuant to which Finova alleges that OptiMark Technologies,  Inc (now
known as OptiMark US Equities,  Inc.)  agreed to lease  certain  equipment  from
Finova. Finova has made claims in unspecified amounts exceeding $6 million (plus
interest, late charges,  litigation costs and expenses) for, among other things,
fraudulent  conveyance  of certain  assets  comprised,  at least in part, of the
intellectual  property and non-cash assets  acquired by Ashton from  Innovations
pursuant to the Purchase  Agreement.  We cannot  predict  whether Finova will be
successful  in its motion to add Ashton as a  defendant,  nor can we predict the
outcome of the litigation at this time. Pursuant to an indemnification agreement
OptiMark US Equities, Inc. will indemnify Ashton from any claims relating to the
alleged fraudulent conveyance. If Ashton becomes a defendant in this litigation,
is found liable for damages and OptiMark US Equities,  Inc. is unable to fulfill
its obligations under the indemnification  agreement, then such litigation could
have a  material  adverse  impact on our  financial  condition  and  results  of
operations.


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

     There were no matters  submitted to a vote of security  holders  during the
quarter ended March 31, 2002.



                                       10
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The initial  public  offering of our stock was in May 1996,  for  2,472,500
shares at an  offering  price of $4.50 per share.  2,472,500  redeemable  common
stock purchase  warrants were also offered at a price of $0.25 per warrant.  The
warrants  expired on May 2, 2002 in accordance  with their original  terms.  The
common stock and the warrants  were traded on the NASDAQ  National  Market under
the symbols,  "ASTN" and "ASTNW," respectively.  On November 6, 2001, the NASDAQ
Listing  Qualifications  Panel  notified us of its  determination  to delist our
common stock from the NASDAQ  National  Market.  On November 7, 2001, our common
stock began  trading on the OTC Bulletin  Board.  The following  sets forth,  by
calendar  quarter,  the range of high and low  closing  prices per share for the
common stock as reported on the NASDAQ National Market through  November 6, 2001
and on the OTC Bulletin  Board  thereafter:

                                                     High              Low
                                                     ----              ---
       2002
            First  Quarter                           $0.40             $0.14

       2001
            Fourth Quarter                           $0.32             $0.09
            Third Quarter                            $0.96             $0.31
            Second Quarter                           $1.38             $0.84
            First Quarter                            $2.62             $0.94

       2000
            Fourth Quarter                           $2.88             $0.75
            Third Quarter                            $4.88             $2.63
            Second Quarter                           $8.50             $2.50
            First Quarter                            $11.56            $6.50

The following sets forth, by calendar quarter, the range of high and low closing
prices for the warrants as reported on the NASDAQ National Market through
November 6, 2001 and on the OTC Bulletin Board thereafter:

                                                     High               Low
                                                     ----               ---
       2002
            First Quarter                            $0.07             $0.003

       2001
            Fourth Quarter                           $0.14             $0.01
            Third Quarter                            $0.42             $0.10
            Second Quarter                           $0.72             $0.38
            First Quarter                            $1.31             $0.28

       2000
            Fourth Quarter                           $1.53             $0.28
            Third Quarter                            $2.81             $1.38
            Second Quarter                           $5.86             $1.63
            First Quarter                            $6.88             $4.63

     On June 14, 2002,  the closing  price of the common stock was $0.14.  As of
March 31, 2002, there were approximately 372 holders of record of common stock.

     Since our inception in 1994, we issued six classes of convertible preferred
stock  (See  "Notes  to  Consolidated   Financial   Statements  -  Stockholders'
(Deficiency) Equity").

     We have never  declared or paid any dividends on our common stock,  and the
board of directors  has no current  plans to declare or pay any dividends on our
common stock in the foreseeable future.



                                       11
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

     The following  selected  consolidated  financial  data are derived from our
consolidated financial statements.  Goldstein Golub Kessler LLP, our independent
auditors,  have audited the financial  statements.  You should read this data in
conjunction  with the  consolidated  financial  statements  and  related  notes,
contained  in Item 8.,  as well as  "Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations," contained in Item 7.

<TABLE>
<CAPTION>
                                                           (In thousands, except per share amounts)

                                                                     Year Ended March 31,
                                           -------------------------------------------------------------------------
                                                2002           2001           2000          1999          1998
                                                ----           ----           ----          ----          ----
<S>                                        <C>            <C>             <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
  Total revenues                           $      2,489   $        225    $      3,869  $      1,434  $       314
  Total expenses                                 13,611         14,881          19,062        16,032         7,556
  Loss from continuing operations              (12,421)        (15,196)         (6,232)      (14,276)       (8,345)
  Income  (loss) from discontinued
  operations                                         (1)        (2,596)             --            --            68
  Gain (loss) on disposal of
       discontinued operations                      667         (3,146)             --            --          (386)
  Net loss                                      (11,755)       (20,938)         (6,232)      (14,276)       (8,675)
  Net loss per common share                    $  (0.29)        $(0.79)         $(0.32)       $(1.80)       $(1.46)
  Weighted average shares outstanding            45,988         29,395          24,930        10,954         7,520

BALANCE SHEET DATA:
  Cash and cash equivalents                $        635   $      6,029    $     15,365  $      2,667  $       816
  Securities available for sale                       -          1,483           9,906            --           --
  Investments in affiliates                         225            141           1,091            --           --
  Total assets                                    2,787         13,066          31,024         5,654        2,998
  Total stockholders' (deficiency) equity
                                           $    (4,284)   $      2,898    $     17,163  $      4,445  $     1,237
</TABLE>


                                       12
<PAGE>


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

     You should read the following  discussion of our results of operations  and
liquidity and capital  resources in conjunction with the consolidated  financial
statements and related notes for the years ended March 31, 2002, 2001, and 2000,
contained in Item 8 of this Form 10-K.

OVERVIEW

     The Ashton Technology  Group, Inc. was formed as a Delaware  corporation in
1994.  We  provide  equity  trade  execution  services  to global  institutional
investors.  Our goal is to provide  liquidity in S&P 500, NASDAQ 100 and Russell
1000  securities to global  institutional  investors at a low cost.  Through our
guaranteed  fill program,  we offer a source of anonymous  block  liquidity with
minimal market impact.

         We conduct our business through the following operating affiliates:

          o    ATG Trading, LLC
          o    Universal  Trading  Technologies   Corporation  (UTTC),  and  its
               subsidiaries:
               -   Croix Securities, Inc.,
               -   REB Securities, Inc.
          o    Ashton Technology Canada, Inc.,
          o    Kingsway-ATG Asia, Ltd. (KAA)

     On  March  29,  2001,  after  being  unable  to find  external  funding  or
consummate a sale of our  majority-owned  subsidiary  Electronic  Market  Center
(eMC) to a third  party,  eMC's  board of  directors  voted to begin the orderly
winding down of its  operations,  including  terminating  all of its  employees,
selling  its  assets,   and   negotiating  the  settlement  of  its  outstanding
liabilities.  eMC's  results are  reflected as  discontinued  operations  in our
consolidated financial statements.

     Since our  inception  we have not  realized  an  operating  profit and have
reported  significant  losses.  Our business is subject to significant risks, as
discussed  further in the  section  entitled  "Factors  That May  Affect  Future
Results.

RESULTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2002 COMPARED TO THE YEAR
ENDED MARCH 31, 2001

     We incurred a net loss from continuing  operations  totaling $12.4 million,
or $0.30 per  share,  for the year  ended  March  31,  2002,  compared  to $15.2
million,  or $0.59 per share, last year. The decrease in net loss is primarily a
result of a $2,264,402 increase in revenues,  and a $1,269,988 decrease in total
costs  and  expenses.  Non-operating  expenses  increased  by  an  aggregate  of
$759,023.

     Revenues totaled $2,489,470 for the year ended March 31, 2002, and $225,068
for the year ended March 31, 2001.  The  revenues in each period were  generated
entirely by the operation of eVWAP and securities commissions on trades executed
through  Croix.  The  increase in  revenues  is a result of the  increase in the
aggregate number of shares executed to 263.8 million during the year ended March
31, 2002 from 35.2  million  shares  last year.  During the year ended March 31,
2002, Croix accounted for 136.7 million and ATG Trading accounted for 20 million
of the total  220.8  million  shares  executed in the eVWAP  system.  Croix also
executed an additional 43 million shares away from eVWAP at the  volume-weighted
average price. . Salaries and employee benefits  decreased 11% to $5,139,312 for
the year ended March 31, 2002 from $5,784,936 for the year ended March 31, 2001.
During the years ended March 31, 2002 and 2001, we employed an average of 44 and
51  employees,  respectively.  As of  March  31,  2002,  we  had a  total  of 30
employees.

     Professional  fees decreased 53% to $1,529,175 from  $3,265,768  during the
years ended March 31, 2002 and 2001, respectively.  The decrease was primarily a
result  of a  decrease  in  consulting  and  outsourced  labor  used to



                                       13
<PAGE>


develop  technology.   We  paid  $901,485  and  $2,483,217  for  consulting  and
outsourced labor during the years ended March 31, 2002 and 2001, respectively.

     Brokerage,  clearing and exchange fees increased to $2,701,243 for the year
ended  March 31, 2002 from  $680,960  for the year ended  March 31,  2001.  This
increase is a result of the costs  associated  with  increased  trades  executed
through  Croix  and ATG  Trading,  including  clearing  costs  and fees  paid to
liquidity providers.

     Depreciation and amortization expense consists primarily of depreciation of
property and equipment. Depreciation for the year ended March 31, 2002 increased
31% to $914,728 from $700,484 in the year ended March 31, 2001. The increase was
caused by a full year of  depreciation  recorded during the year ended March 31,
2002 on capital  expenditures  made throughout the year ended March 31, 2001 for
furniture and fixtures and computer equipment  purchased for the development and
operation of our trading systems. Capital expenditures decreased to $111,078 for
the year ended March 31, 2002 compared to $2,043,315 last year.

     We  recorded  a non-cash  compensation  charge of $40,108 in the year ended
March 31, 2001 for the issuance of stock options to non-employee consultants and
professional advisors. No such charges were incurred in the year ended March 31,
2002.

     We recorded  losses on  proprietary  trading  activities  of  $375,480  and
$335,137  during the years  ended  March 31,  2002 and 2001,  respectively.  The
trading account was used by ATG Trading to provide  liquidity to participants in
eVWAP  and  to  provide  our   management   with   real-time   experience   with
volume-weighted average price trading and risk management techniques.  Beginning
in July 2001, we substantially decreased the use of the trading account upon the
introduction  of the guaranteed  fill program and the use of external  liquidity
providers.  In January 2002, ATG Trading became  inactive,  however,  we plan to
reactivate  it to be a  liquidity  provider to  sell-side  firms only during the
fiscal year ending March 31, 2003.

         Selling, general and administrative expenses decreased to $2,951,314
from $4,066,386 during the years ended March 31, 2002 and 2001, respectively.
The 27% decrease is primarily a result of lower marketing and travel expenses,
partially offset by higher information processing and communications expenses.
Marketing expenses decreased approximately $537,173 due to marketing activities
during the year ended March 31, 2001 which did not recur in the current year.
Travel expenses were down approximately $318,624 or 53% due to fewer employees
and an effort to reduce such costs in the current year.

     Interest income decreased to $105,514 in the year ended March 31, 2002 from
$1,135,078  in the year ended March 31, 2001,  as a result of the lower  average
cash and cash  equivalents  balances.  Interest expense of $626,790 for the year
ended  March  31,  2002  was  comprised  of  $304,209  related  to  the  secured
convertible  note that we  executed  with RGC  International  Investors,  LDC in
exchange for the outstanding  shares of series F convertible  preferred stock on
July 13, 2001, and $322,581 on the short-term note with HK Weaver (see "Notes to
Consolidated Financial Statements").

     Other  expense  for the year  ended  March 31,  2002  includes  a charge of
$316,000  related to the final  settlement of the arbitration  award in favor of
the former  president of eMC. The award was granted by the American  Arbitration
Association on January 14, 2002 related to the arbitration  proceedings  between
Ashton and eMC's former president regarding his employment contract. The expense
includes  $200,000 in cash payments and a charge of $116,000 for 400,000  shares
of Ashton common stock we agreed to issue pursuant to the settlement  agreement.
Other  expense for the year ended March 31, 2002 also includes a loss of $36,215
on the  note  receivable  from  CSI,  a  $91,900  loss on the sale of one of our
memberships  on the  Philadelphia  Stock  Exchange,  and a $500,000  loss on the
exchange of our investment in JAGfn for the outstanding shares of UTTC series TK
convertible  preferred stock, 200,000 series T warrants,  309,500 of the 500,000
outstanding  series K warrants,  and an additional  39,000 shares of the class B
common stock of Ashton Canada.

     Other  income  for the year  ended  March  31,  2001  includes  a charge of
$106,875 for 30,000  shares of Ashton  common stock we issued to acquire  Hudson
Knights  Securities  LLC (renamed  ATG Trading LLC) in July 2000,  and income of
$413,980 for the  reimbursement  of legal costs by Fredric W.  Rittereiser,  our
former chairman and chief executive  officer,  and the Dover Group, of which Mr.
Rittereiser is the sole stockholder,  director and officer. In November 2000, we
accepted  216,805  shares of Gomez common stock owned by Dover equal in value to


                                       14
<PAGE>

the amounts  owed to us under a loan and an  agreement  to pay legal  costs,  or
$884,564,  as full and complete  satisfaction of those debts.  Both the loan and
the agreement to pay legal costs were made in connection  with a lawsuit that we
settled in 1998, filed by David Rosensaft, a founder of UTTC. Although we valued
the Gomez stock at $884,564,  since we account for our investment in Gomez using
the equity method of accounting,  we recorded a corresponding loss in affiliates
for the entire amount. We recorded the loss to reduce the carrying amount of the
investment  in Gomez by our share of  Gomez's  net  losses to the  extent of our
investment balance, as required under the equity method of accounting.  The loss
in affiliates offsets the $413,980 of other income and the $470,584 reduction of
the note receivable and related accrued interest.

     Equity in income (loss) of affiliates for the year ended March 31, 2002 and
2001 totaled $172,373 and ($1,963,976),  respectively.  For the year ended March
31, 2002,  this amount  includes our share of the income from our joint venture,
KAA. For the year ended March 31, 2001, this amount includes ($1,079,412), which
is our share of the losses from KAA, and the  ($884,564)  loss on our investment
in  Gomez,  described  above.  The  results  of KAA are  primarily  a result  of
unrealized gains and losses on its trading portfolio.

RESULTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2001 COMPARED TO THE YEAR
ENDED MARCH 31, 2000

     We incurred a net loss from continuing  operations  totaling $15.2 million,
or $0.59 per share, for the year ended March 31, 2001, compared to $6.2 million,
or $0.32 per share, for the year ended March 31, 2000. The increase is primarily
a result of a $5,568,475  gain  recorded in the year ended March 31, 2000 due to
the change in accounting for our Gomez  investment to the equity  method,  and a
$2,550,000 gain on the redemption of part of our Gomez series A preferred stock.

     The loss from  operations  for the year ended March 31, 2001 decreased 3.5%
to $14.7 million from $15.2 million for the year ended March 31, 2000.  The loss
from  operations  for the year ended March 31, 2000 is comprised of $9.8 million
from the trading  systems  business and $5.4  million  from  Gomez's  results of
operations;  the loss from  operations  in the year  ended  March  31,  2001 was
generated  entirely  by  the  trading  systems  business.   Gomez's  results  of
operations are included in our  consolidated  financial  statements only through
December 31, 1999, when we began  accounting for our Gomez  investment using the
equity method. Excluding Gomez, our loss from operations increased approximately
$5.1 million,  or 50% from last year, due primarily to increases in salaries and
benefits, brokerage, clearing and exchange fees, losses from trading activities,
and depreciation.

     Revenues  totaled  $225,068  for the year ended  March 31,  2001,  and $3.9
million for the year ended March 31, 2000.  The revenues in the year ended March
31, 2001 were generated  entirely by our trading  systems  business  through the
operation of eVWAP and securities  commissions on trades executed through Croix.
In the year ended March 31, 2000, we earned $32,135 from the operation of eVWAP,
and Gomez generated the balance of the revenues.  The increase in trading system
revenues was a result of the increase in the number of shares traded.

     The costs of revenues for the year ended March 31, 2000 represent  salaries
associated with the delivery of Gomez's  consulting and advisory  services,  and
amounts paid in connection with Gomez's transaction-based revenues.

     Excluding Gomez, our salaries and benefits totaled approximately $5,784,936
for the year ended  March 31,  2001,  compared to  $3,735,926  in the year ended
March 31, 2000, as staff  increased from 43 to 56 employees with the hiring of a
full-service sales and coverage team to support our products.

     Professional  fees,  excluding Gomez,  increased to $3,265,768 for the year
ended  March 31,  2001  from  $2,549,543  for the year  ended  March  31,  2000,
primarily  as a  result  of an  increase  in  outsourced  labor  working  on the
development  of our trading  systems.  We paid $1.6 million and $0.3 million for
outsourced labor in the years ended March 31, 2001 and 2000, respectively

     Brokerage,  clearing and exchange  fees  increased to $680,960 for the year
ended  March 31,  2001 from  $18,192  for the year ended  March 31,  2000.  This
increase is a result of the costs  associated  with  increased  trades  executed
through Croix, including clearing costs and fees paid to liquidity providers.



                                       15
<PAGE>
>

     During  the years  ended  March  31,  2001 and 2000,  we  amortized  system
development  costs totaling $7,461 and $95,354,  respectively.  The amortization
expense in the year ended March 31, 2000 was related to system development costs
for eVWAP, which we capitalized  through the second quarter of fiscal 1999, when
the technological  feasibility of the eVWAP was obtained. The capitalized system
development  costs  related  to eVWAP were fully  amortized  by March 31,  2000.
During  the year  ended  March 31,  2001,  we  capitalized  $19,897 in costs for
financial  software  developed  for internal  use,  which we amortized  over two
years.

     Depreciation and amortization expense is primarily depreciation of property
and equipment.  Depreciation  and amortization for the year ended March 31, 2001
decreased  2% to  $700,484  from  $715,956  in the year  ended  March 31,  2000.
Included  in the  results  for the year  ended  March 31,  2000 is  $334,171  of
depreciation  related to Gomez.  Excluding  Gomez,  our  depreciation  increased
approximately  83% in the year ended March 31, 2001 to $700,484  from  $381,785.
The increase is due to  $2,043,315 in purchases of furniture and fixtures and of
computer equipment for the development and operation of our trading systems.

     We  recorded  non-cash  compensation  charges of $40,108 and $66,161 in the
years  ended March 31, 2001 and 2000,  respectively,  for the  issuance of stock
options to non-employee consultants and professional advisors. In the year ended
March 31, 2000, we recorded  non-cash  compensation  charges of $285,208 for the
amortization of deferred consulting expenses.

     During the year ended March 31, 2001, we began proprietary  trading through
ATG Trading to provide  liquidity for  participants in eVWAP, and to provide our
management with real-time  experience with volume weighted average price trading
and risk  management  techniques.  We  recorded  a loss on  proprietary  trading
activities for the year ended March 31, 2001 of $335,137.

     Selling, general and administrative expenses decreased to $4,066,386 in the
year ended March 31,  2001 from  $7,324,862  in the year ended  March 31,  2000.
Excluding Gomez's $4,359,644 in selling,  general and administrative expenses in
the year ended March 31, 2000, our selling,  general and administrative expenses
increased  approximately  37% to $4,066,386 during the year ended March 31, 2001
from  $2,965,218  during the year ended March 31, 2000. The increase in selling,
general  and  administrative  expenses  in the year  ended  March  31,  2001 was
primarily a result of additional  occupancy costs related to the addition of new
facilities  for our  corporate  offices and the opening of sales  offices in New
York and London,  as well as  increased  communications  costs  related to those
facilities.  Further,  marketing and  advertising  expenses  increased  $561,889
during the year ended March 31,  2001  related to the  promotion  of our trading
systems.

     Interest  income  decreased  slightly to $1,135,078 in the year ended March
31, 2001 from $1,169,910 in the previous year. Excluding Gomez,  interest income
increased  $60,781 or  approximately  5% in the year ended  March 31,  2001 as a
result of higher  average  cash and cash  equivalents  and  securities  balances
during the year, in connection  with the $20 million series F preferred  private
placement in August 1999.

     Other  income for the year ended March 31, 2001  includes  $413,980 for the
reimbursement  of legal costs related to Ashton's  acceptance of shares of Gomez
stock from Mr. Rittereiser as described previously, and a charge of $106,875 for
30,000 shares of Ashton common stock issued in connection  with the  acquisition
of Hudson Knights Securities, LLC (renamed ATG Trading LLC) in July 2000.

     Other  expense for the year ended March 31, 2000 of $416,632  reflects  the
charge  for the  value of UTTC  common  stock  we  issued  to one of our  former
directors to satisfy the terms of a separation agreement we executed with him on
June 29, 1999.

     Equity in income (loss) of affiliates totaled  ($1,963,976) and $90,508 for
the years  ended March 31,  2001 and 2000,  respectively.  This loss in the year
ended March 31,  2001  included  ($1,079,412),  which is our share of the losses
from our joint venture, KAA, and the ($884,564) loss on our investment in Gomez,
described  above.  The losses  from KAA were  primarily  a result of  unrealized
losses on its  trading  portfolio.  The income for the year ended March 31, 2000
was related solely to KAA and was primarily a result of unrealized  gains on its
trading portfolio.



                                       16
<PAGE>


DISCONTINUED OPERATIONS

     We formed eMC as a wholly owned subsidiary in June 1998 to develop, operate
and market a global electronic  distribution  channel for financial products and
services.  On April 18, 2000,  eMC acquired  100% of the stock of  E-Trustco.com
Inc., a business-to-business  electronic trust services company. As part of that
transaction,   Ashton's  board  of  directors   agreed  to  fund  eMC's  initial
development  efforts.  E-Trustco's  plan was to offer  and  outsource  objective
financial advisory services in the form of multi-manager wrap accounts through a
state-chartered trust company using eMC's electronic distribution channel.

     During the year ended March 31, 2001,  eMC was  developing a private  label
and rebrandable  global electronic  network for financial  services and products
geared  primarily  to the needs of small and midsize  financial  intermediaries.
eMC's  approach was to select  distribution  partners with  existing  brands and
business models and to provide them a technology platform they could leverage to
expand their  existing  client  relationships  and attract new  clients.  In the
fourth quarter of fiscal year 2001, eMC completed its initial development phase.

     After being unable to find external funding sources or consummate a sale of
eMC to a third party,  eMC's board of directors voted on March 29, 2001 to begin
the orderly  winding down of its  operations,  including  terminating all of its
employees, selling its assets, and negotiating the settlement of its outstanding
liabilities.

     We  recorded  losses  from  discontinued  operations  totaling  $1,161  and
$2,596,006 for the year ended March 31, 2002 and 2001, respectively,  related to
eMC.  The loss for the year ended  March 31,  2001 was  primarily  comprised  of
salaries and benefits,  and consulting  fees for the people hired to develop the
technology platform. During the year ended March 31, 2001, we recorded a loss on
the  disposal  of  eMC,  amounting  to $3.1  million,  consisting  primarily  of
write-offs of eMC's assets. The write-offs include $2.0 million related to eMC's
investment in TeamVest,  approximately $0.8 million in system development costs,
and  approximately  $0.3  million  related  to  software,   computer  equipment,
prepayments and other assets.  During the year ended March 31, 2002, we recorded
a gain on the disposal of eMC of $667,137  related to the  settlement of certain
of its outstanding liabilities.

LIQUIDITY AND CAPITAL RESOURCES

     At March 31, 2002, our principal source of liquidity  consisted of cash and
cash  equivalents  of  $635,087,  compared  to  cash  and  cash  equivalents  of
$6,028,883  and  securities  available for sale of $1,483,350 at March 31, 2001.
The decrease in cash and cash  equivalents and securities  available for sale is
primarily  a  result  of the net  loss  for the year  ended  March  31,  2002 of
$11,755,074,  partially  offset by  $1,800,000  in proceeds from the sale of our
common  stock in  connection  with an equity  line  agreement,  and  $500,000 in
short-term  funding.  Included in the March 31,  2002 cash and cash  equivalents
balance  was  approximately  $10,000  required  to meet the  minimum net capital
requirements of Ashton's broker/dealer  subsidiaries,  and $450,000 set aside to
collateralize a letter of credit.  On January 16, 2002, the Company announced an
employee  furlough program,  which  temporarily  reduced employee work schedules
with concomitant payroll reductions.  The program continued until the closing of
the transactions with OptiMark Innovations on May 7, 2002.

Investment by OptiMark Innovations Inc.

     On  May  7,  2002,   Ashton  and  OptiMark   Innovations  Inc.  closed  the
transactions  contemplated by the securities  purchase  agreement by and between
Ashton and Innovations dated as of February 4, 2002 (as amended on March 6, 2002
and May 3, 2002).  Pursuant to the  purchase  agreement,  we issued  608,707,567
shares of Ashton common stock to Innovations.  In consideration  for the shares,
Innovations paid us $7,272,727 in cash and transferred intellectual property and
other non-cash  assets to us. In addition,  Innovations  loaned us $2,727,273 in
cash.  The loan was evidenced by a senior secured  convertible  note executed by
Ashton in favor of Innovations.  The note accrues interest at a rate of 7.5% per
annum and matures in May 2007.  The note is  convertible  at any time at rate of
$0.051583  per share,  subject to  customary  anti-dilution  adjustments  and is
currently 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.

     On April 30, 2002, OptiMark Innovations Inc. agreed to lend Ashton $300,000
to be credited  against the purchase  price of the Ashton  common stock that was
purchased  pursuant to the securities  purchase  agreement by



                                       17
<PAGE>


and between Ashton and Innovations dated as of February 4, 2002. Additionally on
April 30, 2002,  Ashton agreed to lend  OptiMark,  Inc.,  the parent  company of
Innovations,  $200,000  to be  credited  at  the  closing  against  reimbursable
expenses  owed by Ashton  pursuant to the  securities  purchase  agreement  with
Innovations.  Each of the  notes  accrued  interest  at a rate  of 10%,  and was
satisfied  on May 7, 2002 at the closing of the  securities  purchase  agreement
with Innovations.

     We believe that without  generating any revenues from our  operations,  the
$10,000,000  gross  proceeds  we  received  upon  closing  of  the  transactions
contemplated  by the purchase  agreement  with  OptiMark  Innovations  should be
sufficient  to fund our  operations  through  March  31,  2003.  There can be no
assurance, however, that we will not need additional financing during that time.
Additional financing could take the form of equity or debt offerings, spin-offs,
joint  ventures,  or other  collaborative  relationships  that may require us to
issue shares or share revenue. Any such financing strategies would likely impose
operating  restrictions on us or be dilutive to holders of our common stock, and
may not be available on  attractive  terms or at all.  Further,  any  additional
financing  entered  into by Ashton  would be subject to approval by  Innovations
pursuant to the rights agreement.

Short-term Notes

     On January 30, 2002, HK Weaver Group, Limited agreed to lend up to $500,000
to  Ashton  under a bridge  loan  agreement.  $250,000  of the loan  amount  was
repayable  through the mandatory  issuance of 5 million  shares of Ashton common
stock,  and the remaining  $250,000 was either  convertible into an additional 5
million  shares of Ashton common stock or repayable in cash, at the option of HK
Weaver.  The loan was  secured by 47 million  shares of the common  stock of KAA
owned by Ashton.  We drew down the entire  $500,000  on the bridge  loan with HK
Weaver during  February  2002.  On May 7, 2002,  we issued 10 million  shares of
common stock in full  satisfaction  of the note.  The bridge loan with HK Weaver
provided us sufficient working capital through March 31, 2002.

     On April 11, 2002, RGC International  Investors,  LDC agreed to lend Ashton
up to $250,000,  repayable upon the closing of the securities purchase agreement
with OptiMark  Innovations.  The loan accrued  interest at a rate of 15% and was
secured  by a blanket,  first  priority  lien on all  assets of  Ashton.  Ashton
borrowed the entire $250,000 in April 2002,  which it repaid on May 7, 2002. The
loan with RGC provided us sufficient working capital from March 31, 2002 through
the closing of the transactions with OptiMark Innovations on May 7, 2002.

Equity Line of Credit

     As further described in the notes to the consolidated  financial statements
in Item 8 herein,  on July 10,  2001,  we entered  into an amended  equity  line
arrangement  with  Jameson  Drive  LLC.  The  equity  line  is in the  form of a
securities  purchase agreement and provides for the purchase by Jameson of up to
$15 million  worth of shares of Ashton common stock over a 24-month  period.  We
may request a draw on the equity line by selling  common  stock to Jameson,  and
Jameson is obligated to buy the shares,  subject to the terms of the  agreement.
During the year  ended  March 31,  2002,  we drew down  gross  proceeds  of $1.8
million  on the  equity  line by selling  12,132,865  shares of common  stock to
Jameson.

     There are a number of  conditions  that we must satisfy  before  Jameson is
obligated to buy our shares under the equity line, including that a registration
statement  covering  the resale of the shares  purchased  by Jameson is declared
effective by the SEC and remains effective. We filed a registration statement on
Form S-2  covering  the resale of  7,500,000  shares of stock  issued  under the
equity line. That  registration  statement was declared  effective on August 20,
2001.  We have  already  issued  the  maximum  number of shares  covered by that
registration  statement.  Therefore,  we are unable to access the equity line by
issuing any additional shares until another registration  statement covering the
resale of such shares is filed by us and declared effective by the SEC. There is
no  guarantee  that in the  future  we will be able to meet  these or any  other
conditions under the securities  purchase  agreement or the registration  rights
agreement with Jameson,  or that we will be able to make any additional draws on
the equity line.  We are committed to drawing a minimum of $2.5 million over the
term of the agreement,  and are limited to drawing a maximum of $15 million.  In
order for us to fulfill  our  obligation  to sell a minimum  of $2.5  million to
Jameson, we would be required to draw an additional $700,000.  Based on the June
14,  2002  closing  price of our common  stock of $0.14 per  share,  we would be
required to issue an additional 5,555,555 shares of common stock to satisfy this
obligation.  We have informed  Jameson that our  preference is to terminate this
agreement   without  drawing  down



                                       18
<PAGE>


additional funds. We have not concluded discussions with Jameson and there is no
certainty that we will be successful in terminating this agreement.

ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

     Forward-looking  statements  in this  document  and those made from time to
time by members of our senior  management  are made  pursuant to the safe harbor
provisions   of  the  Private   Securities   Litigation   Reform  Act  of  1995.
Forward-looking  statements  concerning the expected future financial results or
concerning expected financing,  business plans, product development,  as well as
other  estimates are only  estimates,  and there can be no assurance that actual
results will not  materially  differ from our  expectations.  Factors that could
cause  actual  results  to  differ   materially  from  results   anticipated  in
forward-looking statements include, but are not limited to, the following:


RISKS RELATED TO OUR FINANCIAL CONDITION

IF DEMAND FOR OUR PRODUCTS AND SERVICES FAILS TO GROW, WE MAY NEVER ACHIEVE
PROFITABILITY

     We have never  realized an operating  profit and have reported  significant
losses. As of March 31, 2002, we have accumulated losses of approximately  $84.4
million.

     We were founded in 1994 as a development stage company. We currently derive
all of our revenues on a per transaction  basis for VWAP  securities  trades and
orders  executed  through our  subsidiary  Croix  Securities,  Inc. We expect to
generate  future  revenues from other trading  segment  products being developed
that will offer  pricing at a variety of VWAP  intervals  during the day. We can
give no assurance,  however,  that we will successfully  develop new products or
that any new  products we do develop  will be accepted by the  marketplace.  Our
future  success will depend on  continued  growth in demand for VWAP trading and
other  electronic  trade  execution  services,  and our  ability  to  respond to
regulatory and  technological  changes and customer  demands.  If demand for our
products and services  fails to grow at the rate we anticipate and we are unable
to increase  revenues,  then our  business,  financial  condition  and operating
results will be materially and adversely affected.

WE MAY NEED ADDITIONAL FINANCING TO FUND OUR OPERATIONS AND STRATEGIC
INITIATIVES

     We believe that without  generating any revenues from our  operations,  the
$10,000,000  gross  proceeds  we  received  upon  closing  of  the  transactions
contemplated  by the purchase  agreement  with  OptiMark  Innovations  should be
sufficient  to fund our  operations  through  March  31,  2003.  There can be no
assurance, however, that we will not need additional financing during that time.
Additional  financing may take the form of equity or debt offerings,  spin-offs,
joint  ventures,  or other  collaborative  relationships  that may require us to
issue shares or share revenue.  These financing  strategies  would likely impose
operating  restrictions on us or be dilutive to holders of our common stock, and
may not be available on  attractive  terms or at all.  Further,  any  additional
financing  entered  into by Ashton  would be subject to approval by  Innovations
pursuant to the Rights Agreement.

OUR BUSINESS IS HIGHLY VOLATILE AND OUR QUARTERLY RESULTS MAY FLUCTUATE
SIGNIFICANTLY

     We have  experienced  an increase in volatility of trading volume of trades
executed  through our trading  systems from  session to session  during the past
year. These fluctuations have a direct impact on our operating results and cause
significant fluctuations in our day-to-day  profitability.  We cannot be certain
that the volatility in our daily trading volume will not continue. Moreover, the
continued  volatility  in the  securities  markets  could result in  significant
proprietary trading losses. These losses could have a material adverse effect on
our  business,  financial  condition and  operating  results.  If demand for our
current services declines and/or never  materializes for our future products and
services,  and we are unable to adjust our cost structure on a timely basis,  it
could have a material  adverse effect on our business,  financial  condition and
operating results.

     Our revenues may fluctuate due to a decline in securities  trading volumes,
prices or liquidity.  Declines in the volume of securities  transactions  and in
market liquidity generally result in lower revenues from our trading



                                       19
<PAGE>


activities.  Lower price levels of securities also may result in reduced trading
activity and reduce our revenues from  electronic  brokerage  transactions.  Any
decline in securities trading volumes, price or market liquidity or other market
variables could have a material adverse effect on our operating results.

WE ARE SUBJECT TO NET CAPITAL REQUIREMENTS THAT COULD LIMIT OUR OPERATIONS

     A significant  operating loss or any unusually large charge against our net
capital  could  adversely  affect our ability to expand or maintain  our present
levels of business,  which could have a material adverse effect on our operating
results.  The SEC and the  NASD  have  strict  rules  that  require  each of our
broker-dealer  affiliates  to maintain  sufficient  net  capital.  If we fail to
maintain the required net capital, the SEC or the NASD may suspend or revoke our
broker-dealer licenses.  Also, a change in the net capital rules, the imposition
of new rules or any unusually  large charge  against our net capital could limit
our operations. These net capital requirements may limit our ability to transfer
funds  from our  broker-dealer  affiliates  to  ourselves  which may  affect our
ability to repay our debts or fund our operations.

RISKS RELATED TO YOUR INVESTMENT IN OUR COMMON STOCK

YOU WILL SUFFER DILUTION IN THE FUTURE UPON ISSUANCE OF OUR COMMON STOCK

     In connection with our closing under the purchase  agreement,  we issued to
OptiMark  Innovations a senior secured  convertible note in the principal amount
of  $2,727,273.  The  principal  amount of the senior  secured note is currently
convertible into 52,870,757 shares of Ashton common stock.

     We also have recently granted HK Weaver Group Limited an option to purchase
up to 2 million  shares of our common stock,  and warrants to purchase 9 million
shares of our  common  stock to RGC  International  Investors,  LDC.  The future
public sale of our common stock by Innovations and other  stockholders  that may
control large blocks of our common stock,  and the  conversion of our derivative
securities  and public  sale of the common  stock  underlying  these  derivative
securities,  could dilute our common stock and depress its market  value.  These
factors could also make it more  difficult for us to raise funds through  future
offerings of common stock.

THE RISK OF DILUTION MAY CAUSE THIRD PARTIES TO ENGAGE IN SHORT SALES OF OUR
COMMON STOCK

     By increasing  the number of shares offered for sale,  material  amounts of
short selling could further  contribute  to  progressive  price  declines in our
common stock.  The perceived risk of dilution may cause our stockholders to sell
their shares,  which would contribute to a downward  movement in the stock price
of our common stock.  Moreover, the perceived risk of dilution and the resulting
downward  pressure on our stock price could encourage third parties to engage in
short sales of our common stock. These factors could also make it more difficult
for us to raise funds at an  acceptable  or stable  stock price  through  future
offerings of common stock.

YOUR COMMON STOCK MAY BE ADVERSELY AFFECTED BY OUR DELISTING FROM THE NASDAQ
NATIONAL MARKET

     On November 7, 2001, our common stock was delisted from the NASDAQ National
Market and began  trading on the OTC Bulletin  Board which could have an adverse
effect on the  liquidity  of our common stock and upon your ability to obtain an
accurate quotation as to the price of our common stock. In addition, it could be
more difficult for us to raise funds through future offerings of common stock.

WE MAY BE SUBJECT TO CLAIMS THAT COULD SERIOUSLY HARM OUR OPERATING RESULTS AND
FINANCIAL CONDITION.

     We may be  subject  to  claims  as a result  of one or more of the  matters
described  below.  Any of these  matters could give rise to claims or litigation
that could  subject us to liability for damages.  We have limited  liquidity and
financial  resources  to  satisfy  any  such  claims.  Moreover,  any  lawsuits,
regardless  of  their  merits,  could  be  time-consuming,  require  us to incur
significant legal expenses and divert management time and attention.

          o    Following  the sale of  shares  of our  common  stock by  certain
               selling  stockholders  pursuant  to  an  effective   registration
               statement, we became aware that the financial statements included
               in the registration statement did not satisfy the requirements of
               Regulation S-X. Because the registration


                                       20
<PAGE>

               statement  incorporated  by reference  our Annual  Report on Form
               10-K for the year ended March 31, 2000,  rather than for the year
               ended  March  31,  2001,  as it  should  have,  the  registration
               statement  did not meet the  applicable  form  requirements  of a
               registration statement on Form S-3. Thus, claims may be made that
               the  prospectus  did not meet the  requirements  of, and that the
               sale of the shares was not properly  registered  pursuant to, the
               Securities Act of 1933. If such claims are upheld,  then the sale
               of the shares of common stock by these selling  stockholders  may
               have  constituted a violation of the  Securities  Act of 1933. In
               this case,  the  purchasers  of the common stock from the selling
               stockholders  could have the right, for a period of one year from
               the  dates of their  respective  purchases,  to  recover  (i) the
               purchase price paid for their shares, plus interest,  upon tender
               of  their  shares  to us or (ii)  their  losses  measured  by the
               difference  (plus  interest)  between their  respective  purchase
               prices and either the value of their  shares at the time they sue
               us or, if they have sold their  shares at a loss,  the sale price
               of their  shares.  Alternatively,  the  purchasers  of the common
               stock  could  have a  right  to seek  redress  from  the  selling
               stockholders,  in which case we may have third party liability to
               the  selling  stockholders.  We  believe  that  these  refunds or
               damages  could  total  up to  approximately  $2.1  million,  plus
               interest,  in the event the  purchasers  of the  shares  suffer a
               total  loss of  their  investment  during  this  period  and seek
               refunds or damages.

          o    On April 26, 2002, we received a draft complaint from counsel for
               two shareholders of UTTC, one of our subsidiaries,  that named as
               defendants  Ashton,  UTTC,  Innovations and specified present and
               former directors of UTTC. The draft complaint  purports to assert
               claims  arising,  among other things,  from purported  pledges by
               Ashton of UTTC's intellectual  property and the creation of joint
               ventures  that  are  claimed  to have  used  UTTC's  intellectual
               property,   allegedly   without   compensation  to  UTTC  or  its
               shareholders.  Among  other  claims,  the  draft  complaint  also
               purports to state claims for breach of fiduciary duty arising out
               of offers, which were not accepted, to acquire the shares of UTTC
               from these shareholders at a price that was allegedly too low. To
               our knowledge, the draft complaint has not yet been filed.

          o    Our publicly  traded Warrants  expired on May 2, 2002.  Under the
               Warrant  Agreement  dated as of May 7, 1996  between  Ashton  and
               North  American  Transfer  Co.,  as  Warrant  Agent,  Ashton  was
               required to notify the Warrant Agent and the  registered  holders
               of the Warrants of specified adjustments to the exercise price of
               the  Warrants  and  shares   deliverable  upon  exercise  of  the
               Warrants.   We  failed  to  provide  the  Warrant  Agent  or  the
               registered  holders  of the  Warrants  with  required  notices of
               adjustments  to the exercise  price that  resulted  from multiple
               issuances or deemed issuances of shares of common stock below the
               then current market price (as defined in the Warrant  Agreement).
               To date,  no claims  related to the Warrant  Agreement  have been
               asserted.

          o    On May  20,  2002,  Finova  filed a  motion  to add  Ashton  as a
               defendant  in the case Finova  Capital  Corporation  v.  OptiMark
               Technologies,  Inc., OptiMark,  Inc and OptiMark Holdings,  Inc.,
               Docket No.:  HUD-L-3884-01,  Superior Court of New Jersey--Hudson
               County.  Finova asserts claims arising out of an equipment  lease
               agreement   pursuant  to  which  Finova   alleges  that  OptiMark
               Technologies,  Inc (now  known as  OptiMark  US  Equities,  Inc.)
               agreed to lease certain  equipment  from Finova.  Finova has made
               claims  in  unspecified   amounts   exceeding  $6  million  (plus
               interest, late charges, litigation costs and expenses) for, among
               other things,  fraudulent conveyance of certain assets comprised,
               at least in  part,  of the  intellectual  property  and  non-cash
               assets  acquired  by  Ashton  from  Innovations  pursuant  to the
               Purchase  Agreement.  We cannot  predict  whether  Finova will be
               successful in its motion to add Ashton as a defendant, nor can we
               predict the outcome of the  litigation at this time.  Pursuant to
               an  indemnification  agreement  OptiMark US Equities,  Inc.  will
               indemnify   Ashton  from  any  claims  relating  to  the  alleged
               fraudulent  conveyance.  If Ashton  becomes a  defendant  in this
               litigation, is found liable for damages and OptiMark US Equities,
               Inc.   is   unable  to   fulfill   its   obligations   under  the
               indemnification  agreement,  then such  litigation  could  have a
               material adverse impact on our financial condition and results of
               operations.

WE DO NOT EXPECT TO PAY COMMON STOCK DIVIDENDS

     You will not receive payment of any dividends in the foreseeable future and
the return on your investment may be lower than anticipated.  We have never paid
or declared any cash dividends  upon our common stock,  nor do we intend to. Our
board of directors has  discretion to declare cash dividends on our common stock
and on our


                                       21
<PAGE>

Series B preferred  stock.  While there are no  contractual  limitations  on our
ability  to pay  cash  dividends  on our  common  stock,  based  on our  present
financial  status and  contemplated  future  financial  requirements,  we do not
anticipate  declaring  any cash  dividends on the common stock.  In  determining
whether  to pay  dividends,  our  board of  directors  considers  many  factors,
including our earnings, capital requirements and financial condition.

RISKS RELATED TO OUR MANAGEMENT

WE ARE UNDERGOING SIGNIFICANT BOARD AND MANAGEMENT CHANGES

     Our  future  success  depends  upon  the  experience,  skills  and  working
relationship  of our new  board  and  management  team.  We have  experienced  a
complete  change in the  members  of our  board of  directors,  except  for Fred
Weingard who continues as a director and executive  officer of Ashton. We have a
new  non-executive  Chairman  of our  board,  and new  interim  Chief  Executive
Officer, a new President and Chief Operating Officer,  and a new Chief Financial
Officer.  The  longer-term  success of our operations  will depend in large part
upon the hiring and retention of key personnel,  which may require,  among other
things, execution of acceptable employment agreements with these individuals.

SALES OR GRANTS OF STOCK TO OUR EMPLOYEES AND KEY INDIVIDUALS WILL REDUCE YOUR
OWNERSHIP PERCENTAGE

     We seek to attract and retain officers, directors,  employees and other key
individuals  in part by offering them stock options and other rights to purchase
shares of common stock.  The exercise of these options,  the grant of additional
options, and the exercise thereof,  could have a dilutive effect on our existing
stockholders  and may adversely affect the market price of our common stock. The
exercise  of  options  granted  under our stock  option  plans  will  reduce the
percentage  ownership  in  Ashton  of the  then-existing  stockholders.  We have
reserved  6,450,000  shares of common  stock for  issuance  pursuant to our 1998
Stock Option Plan, 2,550,000 shares of common stock for issuance pursuant to our
1999  Stock  Option  Plan and  3,000,000  shares  of common  stock for  issuance
pursuant to our 2000 Incentive Plan.

     We intend to create a new option plan for 2002 for the purpose of retaining
and compensating employees, officers and Board members.

OUR PRINCIPAL STOCKHOLDER EXERCISES CONTROL OVER ALL MATTERS SUBMITTED TO A VOTE
OF STOCKHOLDERS

     Our principal  stockholder,  OptiMark  Innovations  Inc., owns  608,707,567
shares of our common  stock and has rights to acquire an  additional  52,870,757
upon conversion of a note.  Innovations' holdings represent approximately 88% of
our outstanding  capital stock, and approximately 89% of our outstanding  common
stock assuming  conversion of the convertible  note. As a result of Innovations'
ownership interest in Ashton,  Innovations is able to elect all of our directors
and  otherwise  control  our  operations.   Furthermore,   the  disproportionate
percentage of the vote  controlled by Innovations  could also serve to impede or
prevent a change of control. As a result, potential acquirors may be discouraged
from seeking to acquire control through the purchase of our common stock,  which
could have a depressive  effect on the price of our  securities and will make it
less likely that stockholders  receive a premium for their shares as a result of
any such attempt.

RISKS RELATED TO OUR OPERATIONS

OUR GROWTH MAY PLACE STRAINS ON OUR MANAGERIAL, OPERATIONAL AND FINANCIAL
RESOURCES

     Our  business is  characterized  by rapid  technological  change,  changing
customer demands and evolving industry standards. Our future success depends, in
part,  on how we respond to these  demands.  These  demands  will  require us to
introduce new products and services,  enhance existing products and services and
adapt our technology in a timely fashion. There can be no assurance that we will
be capable of  introducing  new products and  services,  enhancing  products and
services or adapting our technology.


                                       22
<PAGE>

     Our current  trading,  communications  and  information  systems  have been
designed to perform within finite  capacity  parameters.  Although we believe we
can  accommodate  a  substantial  increase in  activity,  our growth may require
implementation  of new and  improved  trading,  communications  and  information
systems.  There can be no  assurance  that a  significant  increase  in  trading
volumes  or the  introduction  of new or  multiple  products  will not result in
systems failures or have a material adverse effect on our operating results.

OUR TRADING ACTIVITIES EXPOSE OUR CAPITAL TO POTENTIAL LOSSES

     We  plan  to  engage  in  trading  activities,  predominantly  through  our
subsidiary  ATG  Trading  acting as  principal.  These  activities  include  the
purchase, sale or short sale of securities and derivative securities for our own
account.  These  activities  are  subject to a number of risks  including  price
fluctuations  and  rapid  changes  in the  liquidity  of  markets,  all of which
subjects our capital to significant risks.

OUR COMPLIANCE AND RISK MANAGEMENT METHODS MIGHT NOT BE FULLY EFFECTIVE IN
REDUCING OUR EXPOSURE TO LOSSES

     There  can  be  no  assurance  that  our  risk  management  and  compliance
procedures will be adequate or effective to detect and deter compliance  systems
failures.  Nor can we  assure  you that we will be able to manage  our  systems,
technology and regulatory compliance growth successfully. Our inability to do so
could  have  a  material  adverse  effect  on our  business  and  our  financial
condition. The scope of procedures for assuring compliance with applicable rules
and  regulations  has changed as the size and  complexity  of our  business  has
increased.  We plan to continue to revise formal  compliance  procedures for the
new  proprietary  trading  system we will  operate  through our  subsidiary  ATG
Trading .

OUR BROKERAGE OPERATIONS EXPOSE US TO LIABILITY FOR ERRORS IN HANDLING CUSTOMER
ORDERS

     Errors in performing  clearing  services or execution  services,  including
clerical and other errors related to the handling  customer orders could lead to
civil  penalties  imposed  by  applicable  authorities  as  well as  losses  and
liability  in related  lawsuits  brought by  customers  and  others.  We provide
execution services to each of our trading system customers and execute orders on
behalf of each of our broker-dealer affiliates. In conjunction with our clearing
agent partners,  we provide clearing  services,  which include the confirmation,
receipt, settlement and delivery functions, involved in securities transactions.

OUR CLEARING AGENTS MAY FAIL TO PROVIDE US AND OUR CUSTOMERS ACCURATE
INFORMATION ABOUT SECURITIES TRANSACTIONS

     We rely on our  clearing  brokers to  discharge  their  obligations  to our
customers and us on a timely basis. If they fail to do so, or experience systems
failure,  interruptions or capacity constraints,  our operations may suffer. Our
trading  and  information   systems  are  coordinated   with  the  clearing  and
information systems of our clearing agents. They furnish us with the information
necessary to run our business,  including transaction summaries,  data feeds for
compliance and risk management, execution reports and trade confirmations.

FINANCIAL OR OTHER PROBLEMS EXPERIENCED BY THIRD PARTIES COULD HAVE AN ADVERSE
EFFECT ON OUR BUSINESS AND OUR OPERATING RESULTS

     We are  exposed  to  credit  risk  from  third  parties  that owe us money,
securities,  or other  obligations.  Any  failure  by  these  third  parties  to
discharge  adequately their obligations in a timely basis or any event adversely
affecting  these  third  parties  could  have a material  adverse  effect on our
financial  condition  and  results of  operations.  These  parties  include  our
customers,  trading  counter  parties,  clearing  agents,  exchanges  and  other
financial intermediaries.

CONDITIONS BEYOND OUR CONTROL COULD ADVERSELY AFFECT OUR BUSINESS AND OPERATING
RESULTS

     Our business and operating  results are very  dependent upon equity trading
volumes.  Many conditions  beyond our control can adversely  effect such trading
volumes,  including  national and international  economic,  political and market
conditions,  investor  sentiment,  the availability of funding and capital,  the
level and volatility of


                                       23
<PAGE>

interest rates, legislative and regulatory changes, inflation, and similar broad
trends.   With  reduced  trading  volumes,   we  may  expect  to  receive  fewer
transactions with  concomitantly  reduced  transaction fees and commissions from
eVWAP and our broker-dealer operations.

RISKS RELATED TO OUR TECHNOLOGY AND PRODUCTS

WE WILL BE  DEPENDENT  ON NEW AND  EXISTING  TRANSACTION  PRODUCTS  TO  GENERATE
REVENUES

     Our future  revenues  will  depend  primarily  on the volume of  securities
traded on our systems and  generated by our  transaction-related  products.  The
success of these systems and products is heavily dependent upon their acceptance
by  broker-dealers,  institutional  investors  and  other  market  participants.
Failure to obtain such  acceptance  could result in lower  volumes and a lack of
liquidity in these systems and products.  While we continue to solicit customers
to use our systems and products,  there can be no assurance that we will attract
a sufficient number of such customers.

     We may receive a substantial  portion of our order flow through  electronic
communications gateways, including a variety of computer-to-computer  interfaces
and the Internet. Our electronic brokerage services involve alternative forms of
order execution. Accordingly, substantial marketing, sales efforts and strategic
relationships  may be  necessary  to educate and acquire  prospective  customers
regarding  our  electronic  brokerage  services  and  products.  There can be no
assurance that our marketing,  sales efforts and strategic  initiatives  will be
successful in educating and attracting new customers.

IF ANY OF OUR COMPUTER AND COMMUNICATIONS SYSTEMS FAIL, OUR BUSINESS WILL BE
ADVERSELY AFFECTED

     Any  computer  or  communications  system  failure or  decrease in computer
systems  performance  that causes  interruptions  in our operations could have a
material  adverse  effect on our  business,  financial  condition  and operating
results.  We currently do not provide our customers with backup trading  systems
or complete disaster recovery systems.

     Our  trading  systems  and  proprietary  trading  activities  depend on the
integrity and performance of the computer and communications  systems supporting
them.  Extraordinary  trading  volumes or other  events could cause our computer
systems to operate at an  unacceptably  low speed or even fail. We cannot assure
you that our network  protections  will work.  Any  significant  degradation  or
failure of our  computer  systems or any other  systems in the  trading  process
could cause  customers  to suffer  delays in trading.  These  delays could cause
substantial  losses for customers and could subject us to claims from  customers
for losses.

SOFTWARE "BUGS," ERRORS AND MALFUNCTIONS MAY EXPOSE US TO LOSSES

     Complex software such as ours often contains undetected errors,  defects or
imperfections.  These  bugs  could  result  in  service  interruptions  or other
problems for us and our customers.  Despite rigorous testing,  the software used
in our products could still be subject to various risks  associated with systems
errors,  malfunctions  and employee  errors.  In addition,  because our products
often work with software  developed by others,  including vendors and customers,
bugs in others'  software could damage the  marketability  and reputation of our
products.  Given the  competitive  environment  for  electronic  equity  trading
execution, investors could elect to use our competitors' products on a temporary
or permanent  basis to complete their trades.  Prolonged  service  interruptions
resulting from natural  disasters could also result in decreased trading volumes
and the loss of customers. Problems regarding our VWAP trading algorithms, which
we will use to provide proprietary trading commitments, could result in material
tracking errors and in significant proprietary trading losses.

OUR NETWORKS MAY BE VULNERABLE TO SECURITY BREACHES

     Our networks may be vulnerable to unauthorized access, computer viruses and
other  security  problems.   Persons  who  circumvent  security  measures  could
wrongfully  use our  confidential  information  or our  customers'  confidential
information or cause interruptions or malfunctions in our operations. The secure
transmission  of  confidential  information  over public  networks is a critical
element of our operations.  We have not in the past


                                       24
<PAGE>

experienced network security problems.  We may be required to expend significant
additional  resources to protect  against the threat of security  breaches or to
alleviate  problems  caused  by any  breaches.  Although  our  current  security
measures have never been breached,  we can provide no assurance that our current
or future  security  measures  will protect  against all  security  risks in the
future.

WE MAY NOT RECEIVE ACCURATE AND TIMELY FINANCIAL DATA FROM OUR THIRD-PARTY
SUPPLIERS, WHICH MAY CAUSE US TO LOSE CUSTOMERS AND BE SUBJECT TO LITIGATION

     We depend upon third-party  information suppliers to accurately provide and
format  financial  data, in many cases on a real-time  basis. If these suppliers
fail to supply  accurate or timely  information,  our  customers  may develop an
adverse  perception of our trading  systems and cease doing business with us. We
may also be subject  to claims for  negligence  or other  theories  based on the
nature and  content of  information  we provide  our  customers.  Any  liability
arising from third party  supplied data could have a material  adverse effect on
our financial condition and operating results.

     We receive consolidated New York Stock Exchange listed trading information,
including  real-time quotes,  last sale reporting,  volume and price information
and error reports from a number of third  parties,  including the New York Stock
Exchange,   the  Consolidated  Tape  Association  and  the  Securities  Industry
Automation  Corporation.  We then  calculate the volume  weighted  average price
information for the listed  securities  traded on our system and distribute this
information to our customers,  primarily  through our web site. We also use this
information for pricing matched orders executed on our system.

OUR COMPETITIVE POSITION MAY BE ADVERSELY AFFECTED BY OTHERS' UNAUTHORIZED USE
OF OUR INTELLECTUAL PROPERTY

     Although  we believe  our  services  and  products  do not  infringe on the
intellectual  property  rights of others,  there can be no assurance  that third
parties  will not  assert  infringement  claims  against us in the  future.  Our
competitive  position may also be adversely  affected by the unauthorized use of
our proprietary  information.  Any such assertions by third parties could result
in costly litigation,  in which we may not prevail.  Also, in such event, we may
be unable to license  any  patents or other  intellectual  property  rights from
third  parties  on  commercially   reasonable  terms,  if  at  all.  Litigation,
regardless of its outcome,  could also result in substantial  cost and diversion
of our already limited  resources.  Any infringement  claims or other litigation
against  us  could  materially   impact  our  operating  results  and  financial
condition.

     We regard our  products and the  research  and  development  that went into
developing  them as our  property.  Unauthorized  third  parties  could  copy or
reverse  engineer  certain portions of our products or obtain or use information
that we regard as proprietary. In addition, our trade secrets could become known
to or be  independently  developed by our  competitors.  We rely  primarily on a
combination of trademark and trade secret  protection,  employee and third party
confidentiality and non-disclosure  agreements,  license  agreements,  and other
intellectual  property  protection  methods to protect  these  property  rights.
However,  we have not received any patent awards,  nor have we filed for federal
copyright protection relating to current product lines.

RISKS RELATED TO OUR INDUSTRY

WE ARE SUBJECT TO RISKS ASSOCIATED WITH THE SECURITIES INDUSTRY GENERALLY

     The  securities  business is subject to various risks,  including  customer
default,  employees'  misconduct,  errors and  omissions  by  traders  and order
takers, and litigation.  These risks are often difficult to detect beforehand or
to deter.  Losses  associated  with these  risks  could have a material  adverse
effect on our business, financial condition and operating results.

     We derive most of our revenue from trading in existing  equity  securities,
which we are about to expand to include most of the  securities  included in the
S&P 500,  Russell  1000,  and NASDAQ 100  indices.  Any  reduction  in  revenues
resulting from a decline in the secondary market trading volume for these equity
securities  could  have a material  adverse  effect on our  business,  financial
condition and operating results.  Additionally, a decline in cash flows into the
U.S. equity markets or a slowdown in equity trading  activity by  broker-dealers
and other  institutional


                                       25
<PAGE>

investors may have an adverse  effect on the  securities  markets  generally and
could result in lower revenues from our trading system activities.

OUR BUSINESS COULD BE ADVERSELY AFFECTED BY EXTENSIVE GOVERNMENT REGULATION

     The regulatory environment in which we operate is subject to change. New or
revised  legislation or  regulations  imposed by the SEC, other United States or
foreign governmental  regulatory authorities,  self-regulatory  organizations or
the NASD could have a material  adverse  effect on our business.  Changes in the
interpretation  or enforcement of existing laws and rules by these  governmental
authorities,  self-regulatory  organizations  and the  NASD  could  also  have a
material  adverse  effect on our  business,  financial  condition  and operating
results.  The SEC,  the  NASD,  other  self-regulatory  organizations  and state
securities   commissions   require  strict   compliance  with  their  rules  and
regulations.

     Failure to comply with any of these laws, rules or regulations could result
in adverse  consequences.  An adverse  ruling against us and/or our officers and
other employees could result in us and/or our officers and other employees being
required to pay a substantial  fine or settlement and could result in suspension
or  expulsion.  This could have a material  adverse  effect on our  business and
results of operations.

     Additional  regulation,  changes in existing laws and rules,  or changes in
interpretations  or enforcement of existing laws and rules often directly affect
securities firms. We cannot predict what effect any such changes might have. Our
business,  financial  condition and operating results may be materially affected
by both  regulations  that are  directly  applicable  to us and  regulations  of
general  application.  Our levels of trading  system  activity  and  proprietary
trading can be affected not only by such  legislation  or regulations of general
applicability, but also by industry-specific legislation or regulations.

OUR INDUSTRY IS HIGHLY COMPETITIVE

     The SEC's regulations  governing  alternative  trading systems have lowered
the barriers to entering the securities  trading  markets.  We face  competition
from traditional  securities  exchanges,  which could establish  similar trading
systems  in an  attempt  to  retain  their  transaction  volumes.  We also  face
competition from other  alternative  trading systems and leading brokerage firms
offering similar trade execution services.

     Our  products  compete with other  electronic  trading  systems,  including
Instinet  Corporation's  crossing  network,  Investment  Technology Group Inc.'s
POSIT system, Bloomberg,  L.P.'s Tradebook,  Liquidnet, and other companies that
develop proprietary  electronic trading systems.  Our electronic trade execution
services also compete with services offered by leading  brokerage firms offering
various forms of volume-weighted  average price trade execution. We also compete
with various  national,  regional  and foreign  securities  exchanges  for trade
execution services.

     Many of our competitors have  substantially  greater  financial,  research,
development,  sales,  marketing and other resources than we do and many of their
products have  substantial  operating  histories.  While we believe our products
offer certain competitive  advantages,  our ability to maintain these advantages
will require  continued  investment  in the  development  of our  products,  and
additional marketing and customer support activities. We may not have sufficient
resources  to  continue  to make  this  investment,  while our  competitors  may
continue to devote  significantly more resources to competing services,  nor can
we be sure our products will adequately address all the competitive  criteria in
a manner that results in a competitive advantage.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

MARKET PRICE RISK

     Our cash  management  strategy  seeks to optimize  excess  liquid assets by
preserving  principal,  maintaining  liquidity  to satisfy  working  capital and
regulatory  requirements,  and  minimizing  risk while  maximizing  return.  For


                                       26
<PAGE>

working capital purposes, we invest primarily in money market instruments.  Cash
that is not  needed  for normal  operations  is  invested  in  instruments  with
appropriate  maturities  and levels of risk to correspond to expected  liquidity
needs.  We do  not  use  derivative  financial  instruments  in  our  investment
portfolio.  As of March  31,  2002,  the cash and cash  equivalents  balance  of
$635,087 was comprised of balances in our  interest-bearing  demand checking and
savings accounts and a certificate of deposit.

     Although Croix and REB are registered as broker-dealers, REB generally does
not perform any traditional  broker-dealer  services,  and Croix does not act as
market-maker  with  respect to any  securities  or otherwise as principal in any
securities  transactions;  it acts only on an agency basis.  The  relatively low
credit  risk of these  businesses  is  evidenced  by their  minimal  net capital
requirements.

     We have been  engaged in trading  activities  with ATG Trading  acting as a
principal,  including  the  purchase,  sale  or  short  sale of  securities  and
derivative  securities  for our own account.  These  activities are subject to a
number of risks,  including risks of price fluctuations and rapid changes in the
liquidity of markets, all of which may subject our capital to significant risks.
Although on January 7, 2002,  we  inactivated  ATG  Trading as a  broker-dealer,
thereby reducing its minimum net capital  requirement,  we plan to reactivate it
during the fiscal year ending March 31, 2003.

     We will from time to time, make investments that are considered  strategic.
These  investments  require  approval of executive  management  and the board of
directors.  This  component  of our  cash  management  strategy  is  reevaluated
periodically. As of March 31, 2002, there were no such investments.

INTEREST RATE RISK

     Our   exposure   to   interest   rate  risk   relates   primarily   to  the
interest-bearing  portion of our cash and cash equivalents balances. As of March
31, 2002,  the cash and cash  equivalents  balance of $635,087 was  comprised of
balances in our  interest-bearing  demand  checking  and savings  accounts and a
certificate  of deposit.  Due to the  conservative  nature of these accounts and
their  limited  balances,  a sudden  change in  interest  rates would not have a
material effect on our financial condition.

FOREIGN CURRENCY RISK

     Ashton has joint ventures in Canada and in Hong Kong,  which were formed to
develop,  market and  operate  our trading  systems  for  seamless  use by U.S.,
Canadian and Asian  financial  intermediaries.  Our  investments  in these joint
ventures expose us to currency exchange fluctuations between the U.S. Dollar and
the Canadian  Dollar,  and between the U.S. Dollar and the Hong Kong Dollar.  To
the extent our  international  activities  recorded  in their  local  currencies
increase in the future,  the exposure to fluctuations in currency exchange rates
will  correspondingly  increase.  We have not  engaged in any  foreign  currency
hedging activities because our foreign currency cash balances are generally kept
at levels necessary to meet current operating and capitalization  needs of these
foreign joint ventures.


                                       27
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditor's Report                                                  29
Consolidated Balance Sheets at March 31, 2002
     and 2001                                                                 30
Consolidated Statements of Operations for the
     years ended March 31, 2002, 2001, and 2000                               31
Consolidated Statements of Cash Flows for the years
    ended March 31, 2002, 2001, and 2000                                      32
Consolidated Statements of Stockholders' (Deficiency) Equity
    and Comprehensive Loss for the years ended March 31, 2002,
    2001, and 2000                                                            34
Notes to Consolidated Financial Statements                                    37


                                       28
<PAGE>

INDEPENDENT AUDITOR'S REPORT


To the Stockholders and Board of Directors
The Ashton Technology Group, Inc.


We have  audited  the  accompanying  consolidated  balance  sheets of The Ashton
Technology  Group,  Inc. and  Subsidiaries as of March 31, 2002 and 2001 and the
related consolidated statements of operations, stockholders' (deficiency) equity
and comprehensive loss, and cash flows for each of the three years in the period
ended  March  31,  2002.  These  consolidated   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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 consolidated  financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position  of  The  Ashton
Technology  Group,  Inc. and  Subsidiaries as of March 31, 2002 and 2001 and the
results of their  operations and their cash flows for each of the three years in
the  period  ended  March 31,  2002 in  conformity  with  accounting  principles
generally accepted in the United States of America.


/s/ Goldstein Golub Kessler LLP
-------------------------------

GOLDSTEIN GOLUB KESSLER LLP
New York, New York

June 6, 2002


                                       29
<PAGE>


               THE ASHTON TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                          March 31,

                                                                           2002                               2001
ASSETS
<S>                                                              <C>                               <C>
Cash and cash equivalents                                        $         635,087                 $        6,028,883
Securities available for sale                                                    -                          1,483,350
Accounts receivable                                                          4,798                             66,695
Current portion of notes receivable                                              -                            131,700
Prepaid expenses and other current assets                                  144,025                            787,640
                                                                 -----------------                 -------------------
   Total current assets                                                    783,910                          8,498,268
Notes receivable, net of current portion                                         -                             94,012
Property and equipment, net of accumulated depreciation                  1,515,430                          2,319,080
Exchange memberships                                                       159,752                            356,652
Investments in and advances to affiliates                                  224,757                            141,144
Other investments                                                                -                          1,500,000
Other assets                                                               102,782                            156,622
                                                                 -----------------                 -------------------

   Total assets                                                  $       2,786,631                 $       13,065,778
                                                                 =================                 ===================

LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY

Accounts payable and accrued expenses                            $       1,935,926                 $          979,504
Short-term note, net of discount                                           322,581                                  -
Net liabilities of discontinued operations                                  59,956                            806,030
                                                                 -----------------                 -------------------
           Total current liabilities                                     2,318,463                          1,785,534

Secured convertible note                                                 4,711,400                                  -
Other liabilities                                                           41,044                             18,438
                                                                 -----------------                 -------------------
   Total liabilities                                                     7,070,907                          1,803,972

Minority interest                                                                -                          4,000,000

Commitments and contingencies

Series F redeemable convertible preferred stock $.01 par                         -                          4,363,717
value -  shares authorized: 20,000; shares issued and
outstanding: none and 4,364

Preferred stock - shares authorized: 3,000,000                                   -                                  -
   250,000 shares designated as Series A; shares issued
   and outstanding: none
590,000 shares designated as Series B - (liquidation                       240,000                            442,000
   preference equals $240,000 and $442,000);
   shares issued and outstanding: 24,000 and 44,200
Common stock - par value: $.01; shares authorized:                         682,823                            332,288
   100,000,000 and 60,000,000; shares issued and outstanding:
   68,282,250 and 33,228,830
Additional paid-in capital                                              79,217,625                         73,358,849
Accumulated deficit                                                    (84,414,829)                       (71,186,197)
Accumulated other comprehensive loss                                        (9,895)                           (48,851)
                                                                 ------------------                 ------------------
     Total stockholders' (deficiency) equity                            (4,284,276)                         2,898,089
                                                                 ------------------                 ------------------
     Total liabilities and stockholders'(deficiency) equity      $       2,786,631                  $      13,065,778
                                                                 ==================                 ==================
</TABLE>

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


                                       30
<PAGE>


               THE ASHTON TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                               Year Ended March 31,
                                                                ----------------------------------------------------
                                                                   2002               2001                2000
                                                                --------------    --------------     ---------------
<S>                                                              <C>                 <C>              <C>
Revenues                                                         $  2,489,470        $  225,068       $ 3,869,084
                                                                 -------------    --------------      ------------
Expenses:
     Costs of revenues                                                      -                 -           644,510
     Salaries & benefits                                            5,139,312         5,784,936         7,198,144
     Professional fees                                              1,529,175         3,265,768         2,713,809
     Brokerage, clearing & exchange fees                            2,701,243           680,960            18,192
     Development costs                                                      -             7,461            95,354
     Depreciation and amortization                                    914,728           700,484           715,956
     Non-cash compensation charges                                          -            40,108           351,369
     Loss on trading activities                                       375,480           335,137                 -
     Selling, general and administrative                            2,951,314         4,066,386         7,324,862
                                                                 -------------    --------------      ------------
        Total costs and expenses                                   13,611,252        14,881,240        19,062,196
                                                                 -------------    --------------      ------------
     Loss from operations                                         (11,121,782)      (14,656,172)      (15,193,112)
                                                                 -------------    --------------      ------------

     Interest income                                                  105,514         1,135,078         1,169,910
     Interest expense                                                (626,790)          (12,156)             (797)
     Gain on deconsolidation of Gomez                                       -                 -         5,568,475
     Gain on redemption of Gomez preferred stock                            -                 -         2,550,000
     Other (expense) income                                          (950,365)          300,809          (416,632)
     Equity in income (loss) of affiliates                            172,373        (1,963,976)           90,508
                                                                 -------------    --------------      ------------

Net loss from continuing operations                               (12,421,050)      (15,196,417)       (6,231,648)
                                                                 -------------    --------------      ------------
Loss from discontinued operations of eMC                               (1,161)       (2,596,006)                -
Gain (loss) from disposal of discontinued operations of eMC           667,137        (3,145,926)                -
                                                                 -------------    --------------      ------------
Total discontinued operations of eMC                                   665,976       (5,741,932)                -
                                                                 -------------    --------------      ------------
Net loss                                                          (11,755,074)    $ (20,938,349)      $(6,231,648)
                                                                 =============    ==============      ============

Dividends attributed to preferred stock                            (1,329,200)       (1,868,705)       (1,259,757)
Dividends in arrears on preferred stock                              (144,358)         (397,857)         (456,075)
                                                                 -------------    --------------      ------------
Net loss applicable to common stock                              $(13,228,632)    $ (23,204,911)      $(7,947,480)
                                                                 =============    ==============      ============

Basic and diluted net loss per share from continuing
operations                                                       $      (0.30)    $       (0.59)      $     (0.32)
Basic and diluted net income (loss) per share from
   discontinued operations                                               0.01             (0.20)                -
                                                                 -------------    --------------      ------------
Basic and diluted net loss per common share                      $      (0.29)    $       (0.79)       $    (0.32)
                                                                 =============    ==============      ============

Weighted average number of common shares outstanding,
     basic and diluted                                             45,987,870        29,394,565        24,929,977
                                                                 =============    ==============      ============
</TABLE>


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



                                       31
<PAGE>


               THE ASHTON TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                          Year Ended March 31,
                                                                     ---------------------------------------------------------------
                                                                           2002                   2001                    2000
                                                                     -----------------     --------------------      ---------------
<S>                                                                 <C>                      <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES - CONTINUING OPERATIONS

Net loss from continuing operations                                 $(12,421,050)            $(15,196,417)            $ (6,231,648)
Adjustments to reconcile net loss from continuing
   operations to net cash used in continuing operations:
     Depreciation and amortization                                       914,728                  707,945                  811,310
     Non-cash compensation charge for common stock options                    --                   40,108                   66,161
     Amortization of discount on securities available for sale                --                  (20,229)                      --
     Common stock issued for consulting services                              --                       --                  285,208
     Non-cash reimbursement of legal expenses                                 --                 (413,980)                      --
     Common stock issued for Hudson Knights acquisition                       --                  106,875                       --
     Loss on sale of investments                                         628,116                       --                       --
     UTTC common stock issued in connection with seperation
          agreement                                                           --                       --                  416,632
     Non-cash interest expense                                           626,789
     Gain on deconsolidation of Gomez                                         --                       --               (5,568,475)
     Gain on redemption of Gomez preferred stock                              --                       --               (2,550,000)
     Equity in (income) loss of affiliates                              (172,373)               1,963,976                  (90,508)
Changes in operating assets and liabilities:
     Accounts receivable                                                  61,897                  (66,695)                      --
     Prepaid expenses and other current assets                           643,615                 (432,157)              (2,170,835)
     Due from broker-dealer                                                   --                2,000,000                       --
     Advances to affiliates                                               88,760                 (130,049)                      --
     Other assets                                                         53,840                  101,574                  165,436
     Accounts payable and accrued expenses                               921,007                  113,078                1,981,293
     Other liabilities                                                    22,606                   18,438                 (432,532)
                                                                      -----------             ------------             ------------
          Net cash used in operating activities                       (8,632,065)             (11,207,533)             (13,317,958)
                                                                      -----------             ------------             ------------

CASH FLOWS FROM INVESTING ACTIVITIES - CONTINUING OPERATION

Purchase of securities available for sale                                     --               (1,500,000)              (9,968,771)
Proceeds from maturities and sales of securities                       1,500,000               10,000,000                       --
available for sale
Purchase of property and equipment                                      (111,078)              (2,043,315)              (2,591,268)
Sale (purchase) of exchange membership                                   105,000                  (90,000)                 (69,752)
Increase in notes receivable                                                  --                       --               (2,000,000)
Cash received from notes receivable                                      189,496                  121,305                  102,766
Capitalized software development costs                                        --                  (19,897)                      --
Investment in affiliates                                                      --                       --               (1,000,000)
Purchase of other investments                                                 --               (1,500,000)                      --
Effect of deconsolidation of Gomez                                            --                       --                2,554,511
Proceeds from redemption of Gomez preferred stock                             --                       --                2,550,000
                                                                      -----------             ------------             ------------
          Net cash provided by (used in) investing activities          1,683,418                4,968,093              (10,422,514)
                                                                      -----------             ------------             ------------

</TABLE>


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



                                       32
<PAGE>


               THE ASHTON TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

<TABLE>
<CAPTION>

                                                                                         Year Ended March 31,
                                                                              ------------------------------------------------------
                                                                                 2002                  2001                2000
                                                                              ----------            ----------          ----------
<S>                                                                          <C>                  <C>                  <C>
CASH FLOWS FROM FINANCING ACTIVITIES - CONTINUING OPERATIONS

Proceeds from issuance of short term note                                    $    500,000         $         --         $         --
Line of credit borrowings                                                              --            4,109,360
Line of credit repayments                                                              --           (4,109,360)                  --
Preferred stock dividends paid in cash                                                 --              (53,753)            (535,829)
Issuance costs for common stock                                                  (687,357)            (155,884)            (575,000)
Proceeds from issuance of common stock                                          1,800,000            2,000,000            5,750,000
Proceeds from exercise of stock options and warrants to
purchase                                                                               --               65,624            2,855,027
   common stock
Net proceeds from issuance of stock by subsidiaries                                    --                   --            9,626,929
Issuance costs for preferred stock and notes payable                                   --                   --             (682,563)
Proceeds from issuance of preferred stock                                              --                   --           20,000,000
                                                                             -------------        -------------        -------------

           Net cash provided by financing activities                            1,612,643            1,855,987           36,438,564
                                                                             -------------        -------------        -------------
Foreign currency translation adjustment                                            22,306              (32,201)                  --

DISCONTINUED OPERATIONS

Net cash used in operating activities                                             (87,322)          (1,789,976)                  --
Net cash provided by (used in) investing activities                                 7,224           (3,145,926)                  --
Net cash provided by financing activities                                              --               15,000                   --
                                                                             -------------        -------------        -------------


           Net cash used in discontinued operations                               (80,098)          (4,920,902)                  --
                                                                             -------------        -------------        -------------
Net (decrease) increase in cash and cash equivalents                           (5,393,796)          (9,336,556)          12,698,092
Cash and cash equivalents, beginning of year                                    6,028,883           15,365,439            2,667,347
                                                                             -------------        -------------        -------------
Cash and cash equivalents, end of year                                       $    635,087         $  6,028,883         $ 15,365,439
                                                                             =============        =============        =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

   Cash paid during the year for interest                                    $         --         $     12,156         $        797
                                                                             =============        =============        =============
Supplemental schedule of non-cash investing and financing
activities:

   Issuance of common stock for purchase of UTTC preferred stock             $         --                    $         $         --
                                                                             =============        =============        =============
   Receipt of Gomez common stock for repayment of Dover note
     and reimbursement of legal costs                                        $         --         $    884,563         $         --
                                                                             =============        =============        =============
   Non-cash and accrued dividends on preferred stock                         $  1,473,558         $  2,212,809         $  1,177,285
                                                                             =============        =============        =============
   Conversion of preferred stock to common stock                             $    202,000         $  3,836,283         $ 16,785,188
                                                                             =============        =============        =============
   Exchange series F preferred stock for secured convertible note            $  5,111,526         $         --         $         --
                                                                             =============        =============        =============
   Exchange of UTTC series KW preferred stock for common stock               $  3,000,000         $         --         $         --
                                                                             =============        =============        =============
   Exchange of UTTC series TK preferred stock for common stock               $  1,500,000         $         --         $         --
                                                                             =============        =============        =============
   Conversion of secured convertible note principal and interest             $    704,334         $         --         $         --
                                                                             =============        =============        =============
   Issuance of warrants in connection with Series F preferred stock          $         --         $         --         $    645,000
                                                                             =============        =============        =============

</TABLE>

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



                                       33
<PAGE>


<TABLE>
<CAPTION>


                                         THE ASHTON TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIENCY) EQUITY AND COMPREHENSIVE LOSS

                                                                               Year ended March 31,
                                              --------------------------------------------------------------------------------------
                                                        2002                         2001                            2000
                                              -------------------------      -------------------------    --------------------------
                                                Shares          Amount        Shares          Amount        Shares         Amount
                                              -----------   -----------      -----------   -----------     -----------   -----------
COMMON STOCK
<S>                                           <C>          <C>              <C>           <C>             <C>          <C>
Balance at beginning of year                  33,228,830   $   332,288      28,118,594    $   281,186     20,569,172   $   205,692
Issue common stock in connection with puts    12,132,865       121,329              --             --        696,570         6,966
Issue common stock for cash                           --            --       1,333,333         13,333             --            --
Conversion of preferred stock to common
stock                                            121,200         1,212       2,877,358         28,774      5,563,148        55,631
Issue common stock for consulting services       (50,000)         (500)         50,000            500             --            --
Issue common stock in exchange for UTTC
   preferred stock                            18,489,274       184,893         733,945          7,339             --            --
Exercise of stock options and warrants                --            --          85,600            856      1,289,704         12,897
Conversion of secured convertible note to
   common stock                                4,360,081        43,601              --             --             --            --
                                              ----------   -----------      ----------    -----------     ----------   -----------
Issue common stock for asset acquisitions             --            --          30,000            300             --            --
                                              ----------   -----------      ----------    -----------     ----------   -----------
Balance at end of year                        68,282,250       682,823      33,228,830        332,288     28,118,594       281,186
                                              ----------   -----------      ----------    -----------     ----------   -----------

SERIES A PREFERRED STOCK
Balance at beginning of year                          --            --              --             --        125,219     1,252,188
Conversion of series A to common stock                --            --              --             --       (125,219)   (1,252,188)
                                              ----------   -----------      ----------    -----------     ----------   -----------

Balance at end of year                                --            --              --             --             --            --
                                              ----------   -----------      ----------    -----------     ----------   -----------

SERIES B PREFERRED STOCK
Balance at beginning of year                      44,200       442,000          64,200        642,000        417,500     4,175,000
Conversion of series B to common stock           (20,200)     (202,000)        (20,000)      (200,000)      (353,000)   (3,533,000)
                                              ----------   -----------      ----------    -----------     ----------   -----------
Balance at end of year                            24,000       240,000          44,200        442,000         64,200       642,000
                                              ----------   -----------      ----------    -----------     ----------   -----------

</TABLE>


                                                                 34
<PAGE>


<TABLE>
<CAPTION>

                                          THE ASHTON TECHNOLOGY GROUP INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIENCY) EQUITY AND COMPREHENSIVE LOSS (continued)


                                                                               Year ended March 31,
                                              --------------------------------------------------------------------------------------
                                                        2002                         2001                            2000
                                              -------------------------      -------------------------    --------------------------
                                                Shares          Amount        Shares          Amount        Shares         Amount
                                              -----------   -----------      -----------   -----------     -----------   -----------

<S>                                                   <C>           <C>                     <C>                         <C>
DEFERRED CONSULTING EXPENSE
Balance at beginning of year                          --            --                              --                    (285,208)
Amortization of deferred consulting expense           --            --                              --                     285,208
                                              ----------   -----------      ----------    ------------    ----------   -----------
Balance at end of year                                --            --                              --                          --
                                              ----------   -----------      ----------    ------------    ----------   -----------
ADDITIONAL PAID-IN CAPITAL
Balance at beginning of year                                73,358,849                      64,294,258                  39,133,830
Issue common stock in connection with puts                   1,678,671                              --                   5,743,034
Issue common stock for cash                                         --                       1,986,667
Issue common stock for consulting services                         500                            (500)                         --
Issue common stock in exchange for UTTC
   preferred stock                                           2,815,107                         992,661                          --
Issue common stock and stock options for
  acquisitions                                                      --                         106,575                          --
Issue common stock options                                          --                          40,108                      73,661
Issue costs in connection with common stock                   (687,357)                       (155,886)                   (575,000)
Conversion of preferred stock to common
stock                                                          200,788                       3,807,509                  16,729,557
Issue costs in connection with preferred stock                      --                              --                  (1,556,135)
Preferred stock dividends                                    1,438,143                       2,207,687                   1,493,448
Discount on short-term note                                    500,000                              --                          --
Conversion of secured convertible note to
 common stock                                                  660,733                              --                          --
Exchange series F preferred stock for
 secured convertible note                                     (747,809)                             --                          --
Exercise of stock options and warrants                              --                          64,770                   2,834,631
Common stock issued in connection with
  termination agreement                                             --                              --                     416,632
Issue common stock of subsidiaries to third
parties                                                             --                          15,000                         600
                                              ----------   -----------      ----------    ------------    ----------   -----------
Balance at end of year                                      79,217,625                      73,358,849                  64,294,258
                                              ----------   -----------      ----------    ------------    ----------   -----------

</TABLE>


                                                                 35
<PAGE>

<TABLE>
<CAPTION>

                                              THE ASHTON TECHNNOLOGY GROUP, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIENCY) EQUITY AND COMPREHENSIVE LOSS (continued)


                                              --------------------------------------------------------------------------------------
                                                        2002                         2001                            2000
                                              -------------------------      -------------------------    --------------------------
                                                Shares          Amount        Shares          Amount        Shares         Amount
                                              -----------   -----------      -----------   -----------     -----------   -----------

ACCUMULATED DEFICIT

<S>                                                        <C>                             <C>                          <C>
Balance at beginning of year                               (71,186,197)                    (47,981,286)                 (40,036,524)
Preferred stock dividends                                   (1,473,558)                     (2,266,562)                  (1,713,114)
Net loss                                                   (11,755,074)                    (20,938,349)                  (6,231,648)
                                              ----------   ------------     ----------    -------------   ----------   -------------
Balance at end of year                                     (84,414,829)                    (71,186,197)                 (47,981,286)
                                              ----------   ------------     ----------    -------------   ----------   -------------

ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance at beginning of year                                  (48,851)                         (73,551)                          --
                                                           ------------                   ------------                 -------------
Unrealized loss on securities available for                       950                           50,605                           --
sale
Reclassification adjustment                                    15,700                            6,296                      (73,551)
Foreign currency translation adjustment                        22,306                          (32,201)                          --
                                              ----------   ------------     ----------    -------------   ----------   -------------
Other comprehensive income (loss)                              38,956                           24,700                      (73,551)
                                              ----------   ------------     ----------    -------------   ----------   -------------
Balance at end of year                                         (9,895)                         (48,851)                     (73,551)
                                                           ------------                   -------------                -------------
Total stockholders' (deficiency) equity                   $(4,284,276)                    $  2,898,089                 $ 17,162,607
                                              ==========   ============     ==========    =============   ==========   =============

COMPREHENSIVE LOSS
Net loss                                                  (11,755,074)                    $(20,938,349)                $ (6,231,648)
Other comprehensive income (loss) per above                    38,956                           24,700                      (73,551)
                                              ----------   ------------     ----------    -------------   ----------   -------------
Total comprehensive loss                                  $(11,716,118)                   $(20,913,649)                $ (6,305,199)
                                              ==========   ============     ==========    =============   ==========   =============


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

</TABLE>


                                                                 36
<PAGE>

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF COMPANY

         The Ashton Technology Group, Inc. was formed as a Delaware  corporation
in  February  1994.  We  provide  equity  trade  execution  services  to  global
institutional investors. Our goal is to provide liquidity in S&P 500, NASDAQ 100
and Russell 1000  securities  to global  institutional  investors at a low cost.
Through  our  guaranteed  fill  program,  we offer a source of  anonymous  block
liquidity with minimal market impact.

         As of March 31, 2002,  our operating  subsidiaries  and joint  ventures
included:

         o  ATG Trading, LLC

         o  Universal  Trading   Technologies   Corporation   (UTTC),   and  its
            subsidiaries:
            -   Croix Securities, Inc.,
            -   REB Securities, Inc.
         o  Ashton Technology Canada, Inc.,
         o  Kingsway-ATG Asia, Ltd. (KAA)

         Electronic  Market  Center,  Inc.  (eMC)  is one of our  majority-owned
subsidiaries.  In March 2001,  eMC's board of directors voted to discontinue its
operations,  including terminating all of its employees, selling its assets, and
negotiating  the settlement of its  outstanding  liabilities.  During the fiscal
year ended March 31, 2002,  eMC incurred an operating  loss of $1,161 and a gain
on the disposal of its operations of $667,137.  The results of eMC are reflected
as discontinued operations in our consolidated financial statements.

         Gomez, Inc. was previously one of our majority-owned subsidiaries prior
to December  1999.  Due to a private  placement by Gomez in December  1999,  our
equity  interest  decreased to less than 50%. We then began  accounting  for our
investment  in  Gomez  under  the  equity  method  of  accounting,  rather  than
consolidating Gomez's results of operations within our results.  Gomez generated
substantially  all of our revenue for the fiscal year ended March 31,  2000.  We
currently  recognize no revenue from Gomez,  and the carrying value of our Gomez
equity investment is zero.

BASIS OF PRESENTATION

         The  accounts of each of our  majority-owned  subsidiaries,  UTTC,  ATG
Trading,  and  Ashton  Canada  are  consolidated  with  those of  Ashton  in our
consolidated  financial  statements.  We generally  account for  investments  in
businesses of which we own between 20% and 50% using the equity method. Ashton's
interests in KAA and Gomez are accounted for using the equity method. Under this
method,  the  investment  balance,  originally  recorded at cost, is adjusted to
recognize  our share of net  earnings or losses of the  affiliate as they occur,
limited to the extent of our  investment in and advances to the investee.  These
adjustments  are  included  in "equity in income  (loss) of  affiliates"  in our
consolidated  statements of operations.  Other investments in which our interest
is less than 20% and which are not classified as  available-for-sale  securities
are generally  carried at the lower of cost or net realizable  value.  We assess
the need to record  impairment losses on investments and record such losses when
the impairment is determined to be more than temporary in nature.

         The  results  of  operations  for each of our  subsidiaries  and equity
method  investees  are  accounted  for  from  their  dates  of  formation.   All
significant   intercompany   accounts  and   transactions   are   eliminated  in
consolidation.



                                       37
<PAGE>

DISCONTINUED OPERATIONS

Electronic Market Center

         We formed eMC as a wholly  owned  subsidiary  in June 1998 to  develop,
operate  and  market a global  electronic  distribution  channel  for  financial
products  and  services.  On April 18, 2000,  eMC acquired  100% of the stock of
E-Trustco.com Inc., a business-to-business electronic trust services company. As
part of that  transaction,  Ashton's  board of  directors  agreed to fund  eMC's
initial  development  efforts.  E-Trustco's  plan  was to  offer  and  outsource
objective financial advisory services in the form of multi-manager wrap accounts
through a  state-chartered  trust  company using eMC's  electronic  distribution
channel.

         During the year ended  March 31,  2001,  eMC was  developing  a private
label and  rebrandable  global  electronic  network for  financial  services and
products  geared  primarily  to  the  needs  of  small  and  midsize   financial
intermediaries. eMC's approach was to select distribution partners with existing
brands and business models and to provide them a technology  platform they could
leverage to expand their existing client relationships and attract new clients.

         On August 9,  2000,  eMC  agreed to lend  TeamVest,  Inc.,  a  Delaware
corporation based in Charlotte,  North Carolina,  $2,000,000 under a convertible
loan  agreement.  eMC,  E-Trustco  and  TeamVest  also entered into an operating
agreement on that date. Under the operating  agreement,  eMC gained the right to
access,  distribute  and rebrand  TeamVest's  electronic  investment  advice and
Internet-based 401(k) investment advice programs,  which eMC planned to offer as
part of its  global  electronic  distribution  channel.  The  TeamVest  loan and
accrued  interest  were  convertible  into shares of TeamVest  common stock at a
conversion  price of $2.553 at eMC's  option at any time prior to  December  31,
2000,  or  automatically,  thirty days after all proceeds of the loan were drawn
down and expended by TeamVest.  On October 31, 2000,  TeamVest  created TeamVest
Retirement Plan Services,  LLC, a North Carolina limited liability  company,  to
which it contributed its defined contribution services business. On November 30,
2000,  the TeamVest  loan,  plus accrued  interest,  was converted  into 796,352
shares of  TeamVest,  Inc.  common  stock.  In  addition,  eMC received a 7.376%
membership interest in TeamVest Retirement Plan Services, LLC.

         In March 2001,  eMC completed its initial  development  phase.  At that
time, we conducted a review of current market  conditions,  eMC's strategy,  and
the resources and funding  required to complete the  development  of eMC. Due to
the lack of available external funding,  and the overall market conditions which
we believed  would impact the demand for eMC's  products and services,  Ashton's
board of  directors  determined  not to provide any  additional  funding to eMC.
After being unable to find other funding  sources or consummate a sale of eMC to
a third  party,  eMC's board of  directors  voted on March 29, 2001 to begin the
orderly  winding  down  of  its  operations,  including  terminating  all of its
employees, selling its assets, and negotiating the settlement of its outstanding
liabilities.

         The  accompanying   consolidated  financial  statements  reflect  eMC's
operations as  discontinued  operations in accordance  with APB Opinion No. 30 -
Reporting the Effects of Disposal of a Segment,  and Extraordinary,  Unusual and
Infrequently Occurring Events and Transactions.  During the year ended March 31,
2001,  we  recorded a loss from  discontinued  operations  totaling  $2,596,006,
primarily for salaries,  benefits,  and consulting  fees for the people hired to
develop the technology platform.  We also recorded a loss on the disposal of eMC
during  the year  ended  March 31,  2001 of  $3,145,926,  including  $63,423  in
severance payments, and $3,082,503 in write-offs of eMC's assets. The write-offs
included  $2,033,088  related to eMC's  investments  in TeamVest,  approximately
$796,000 in system  development  costs,  and  approximately  $254,000 related to
software,  computer  equipment,  prepayments  and other assets.  During the year
ended March 31, 2002, we recorded a loss from discontinued  operations of $1,161
for  administrative  costs,  and a gain on the  disposal of eMC of $667,137 as a
result  of the  settlement  of some of its  obligations.  Also  included  in the
consolidated  balance sheets are eMC's  remaining net liabilities of $59,956 and
$806,030 as of March 31, 2002 and March 31, 2001, respectively.



                                       38
<PAGE>

Computer Science Innovations, Inc.

         On  November  4,  1997,  Ashton  sold  its  majority-owned  subsidiary,
Computer  Science  Innovations,  Inc.  ("CSI(R)").  CSI(R)  was  sold to a trust
created by the CSI(R)  leveraged  ESOP. In connection with the sale, we received
cash, the forgiveness of amounts due to CSI(R),  and a $594,125 five-year 8 1/4%
note. On October 3, 2001,  Ashton accepted  $125,000 in full satisfaction of the
note balance of $161,215, and recorded a loss of $36,215.

USE OF ESTIMATES

         The preparation of financial statements,  in conformity with accounting
principles  generally  accepted  in  the  United  States,  requires  us to  make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities,  the disclosure of contingent assets and liabilities at the date of
the  financial  statements,  and the  reported  amounts of revenues and expenses
during  the  reporting  period.  See  "Management's  Discussion  and  Analysis -
Additional  Factors  That Could Affect  Future  Results" in Item 7. of this Form
10-K for a discussion of some of the factors that could cause our actual results
to differ from those estimates.

RECLASSIFICATIONS

         Certain  reclassifications have been made in the consolidated financial
statements to prior year amounts to conform to the current year's presentation.

FAIR VALUE OF FINANCIAL INSTRUMENTS

         Substantially  all of our  financial  instruments  are  carried at fair
value or  amounts  approximating  fair  value.  The fair  values  of  investment
securities are based upon quoted market prices.  Notes receivable are carried at
a value that approximates fair value based upon the short period to maturity and
the rates of return  currently  available for investments with similar terms and
maturities.  Our  marketable  securities are classified as available for sale in
accordance with Statement of Financial  Accounting Standards No. 115. Securities
available for sale are recorded at fair value,  with unrealized gains and losses
reported  as  a  component  of  accumulated  other   comprehensive  loss.  Other
investments that are not classified as available-for-sale securities are carried
at the lower of cost or net realizable value.

REVENUE RECOGNITION

         During the years ended March 31, 2002 and March 31, 2001,  we generated
revenues on a per  transaction  basis for each share  traded  through  eVWAP and
commission  revenue  from our  customers on a per  transaction  basis for orders
executed through Croix.

         Transactions in securities,  including  commission revenues and related
expenses, are recorded on a trade-date basis. eVWAP revenues are recorded net of
amounts paid to the Philadelphia  Stock Exchange  pursuant to our September 1995
agreement.  Under this agreement,  the  Philadelphia  Stock Exchange employs the
eVWAP on its  equity-trading  floor in  exchange  for a portion of the  revenues
eVWAP generates.  The Philadelphia  Stock Exchange bills our customers for eVWAP
trades, and remits the net payments to us.

         Gomez  generated  substantially  all of the  revenues in the year ended
March 31, 2000.  Consulting  revenues were recognized by Gomez when the services
were completed and the client was billed for the services rendered. Subscription
revenue was  generated by Gomez from the sale of  subscriptions  to its website,
and  recorded   ratably  over  the  period  of  service.   Lead  generation  and
transaction-based  revenues  were  generated  by Gomez by  facilitating  contact
between Gomez members and online  businesses that  contracted with Gomez.  These
revenues were recognized by Gomez upon the members' completion of a transaction,
and only when there  were no further  conditions  or  obligations  to the online
business.



                                       39
<PAGE>

CASH AND CASH EQUIVALENTS

         We consider all cash and highly liquid  investments  with maturities of
three months or less to be cash  equivalents.  Cash  equivalents,  which consist
primarily  of money market  accounts,  are carried at cost,  which  approximates
market value.

ACCOUNTS RECEIVABLE AND CONCENTRATION OF CREDIT RISK

         Accounts   receivable   included   $4,798  and  $66,695  due  from  the
Philadelphia  Stock  Exchange for eVWAP  revenues as of March 31, 2002 and March
31, 2001, respectively

         In the normal  course of business,  we are involved in the execution of
various customer securities transactions. Securities transactions are subject to
the  credit  risk  of  counter  party  or  customer   nonperformance.   However,
transactions are collateralized by the underlying security, thereby reducing the
associated  risk to changes  in the market  value of the  security  through  the
settlement date. Therefore, the settlement of these transactions is not expected
to have a material  effect on our financial  position.  Additionally,  it is our
policy to review, as necessary,  the credit worthiness of each counter party and
customer.

CAPITALIZED SOFTWARE DEVELOPMENT COSTS

         In accordance  with AICPA Statement of Position No. 98-1 Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use, the costs
of software  developed for internal use incurred during the preliminary  project
stage are expensed as incurred.  Direct costs  incurred  during the  application
development    stage   are    capitalized.    Costs    incurred    during    the
post-implementation/  operation stage are expensed as incurred.  During the year
ended March 31 2001, we  capitalized  $19,897,  in costs for financial  software
developed for internal use, which we are amortizing  over two years.  We did not
capitalize any software development costs during the year ended March 31, 2002.

         We account for the costs of software to be marketed in compliance  with
SFAS No. 86 (FAS 86),  Accounting for the Costs of Computer Software to be Sold,
Leased  or  Otherwise  Marketed.  Software  development  costs are  expensed  as
incurred until technological feasibility of the product is obtained. Development
costs incurred  subsequent to  technological  feasibility  are  capitalized  and
amortized  on a  straight-line  basis over the  estimated  economic  life of the
product.  Capitalization  of computer  software costs is  discontinued  when the
computer software product is available to be sold, leased or otherwise marketed.
Amortization  begins when the product is available for release to customers.  We
amortized  software  costs related to the eVWAP using the  straight-line  method
over the estimated economic useful life of 18 months.  Amortization of the eVWAP
development costs totaled $95,354 for the year ended March 31, 2000. We have not
capitalized  software  development  costs in  accordance  with FAS 86 since  the
second  quarter of fiscal 1999 when the  technological  feasibility of the eVWAP
was obtained, and all such costs were expensed by December 31, 1999.

PROPERTY AND EQUIPMENT

         Property and equipment are recorded at cost and are  depreciated  using
the  straight-line  method  over  the  estimated  useful  lives  of  the  assets
(generally three to five years).  Leasehold  improvements are amortized over the
lesser of the term of the lease or the  estimated  useful life of the  leasehold
improvements.

INTANGIBLE ASSETS

         In March 1999, we purchased the rights to the domain name www.vwap.com,
which we  categorized  as an intangible  asset.  Amortization  of the intangible
asset was provided on a straight-line basis over its estimated useful life of 18
months.  Amortization  expense of $19,521 and $39,042 was recognized  during the
years ended March 31, 2001 and 2000, respectively.



                                       40
<PAGE>

NET LOSS PER SHARE

         Net loss  per  share is  computed  in  accordance  with  SFAS No.  128,
Earnings  per Share.  SFAS 128 requires  companies to present  basic and diluted
earnings per share.  Basic  earnings per share  excludes the dilutive  effect of
outstanding stock options, warrants and convertible securities,  whereas diluted
earnings per share  includes  the effect of such items.  The effect of potential
common stock is not  included in diluted  earnings per share for the years ended
March 31, 2002, 2001 and 2000,  because we have incurred net losses;  therefore,
the effect of the dilutive securities is anti-dilutive in those years.

ADVERTISING EXPENSES

         All advertising  costs are expensed as incurred.  Advertising  expenses
for the years  ended March 31,  2002,  2001 and 2000  amounted to  approximately
$145,465,  $672,332  and  $79,700,  respectively.  Advertising  is  included  in
selling,  general and administrative  expense on the consolidated  statements of
operations.

UTTC COMMON STOCK REVERSE SPLIT

         On  April  7,  2000,   the  Board  of  Directors  of  UTTC  approved  a
three-for-four  reverse stock split, effective April 10, 2000. All references in
the  consolidated  financial  statements  to UTTC common shares and common stock
options have been adjusted retroactively for the split.

2.       INVESTMENTS IN SUBSIDIARIES AND AFFILIATED COMPANIES

ATG TRADING LLC

         On March 31, 2000, we agreed to purchase the assets of a broker-dealer,
Hudson  Knights  Securities,  LLC, a proprietary  trading firm and member of the
Philadelphia  Stock  Exchange.  On July 25, 2000,  we completed  the purchase of
Hudson Knights  Securities,  LLC, and formed ATG Trading,  LLC. We issued 30,000
shares of our common  stock to effect the  acquisition  and recorded a charge of
$106,875 for the issuance of the shares during the year ended March 31, 2001.

         During the years ended March 31,  2002 and 2001,  ATG Trading  provided
liquidity to  participants  in eVWAP and provided our management  with real-time
experience  with  volume-weighted  average  price  trading  and risk  management
techniques. We recorded losses on proprietary trading activities of $375,480 and
$335,137  during the years  ended  March 31,  2002 and 2001,  respectively.  ATG
Trading has not conducted  proprietary  trading  activities since December 2001,
and  as a  result,  we  inactivated  ATG  Trading's  status  as a  broker-dealer
effective  January 7, 2002. We plan to  reactivate  it as our principal  trading
entity  during the  fiscal  year  ending  March 31,  2003 to provide  guaranteed
liquidity to broker-dealers.

ASHTON TECHNOLOGY CANADA, INC.

         In December  1999, we entered into an agreement to create Ashton Canada
to develop, market and operate intelligent matching,  online transaction systems
and distribution systems for use by U.S. and Canadian financial  intermediaries.
On June 8, 2000,  Ashton Canada entered into an agreement with the Toronto Stock
Exchange  to market,  deploy,  and operate  eVWAP,  as a facility of the Toronto
Stock Exchange for Canadian securities. At this time, the Toronto Stock Exchange
has deferred  implementing  eVWAP as a facility in 2002,  and Ashton  Canada has
reduced  expenses and staffing to address the reduced  prospects  for  near-term
revenues from such a facility.

         On December 20, 1999, we funded Ashton Canada with $333,400 in cash for
51% of the voting equity,  and have funded an additional  $1,277,472 as of March
31, 2002. In  connection  with the  agreement to form Ashton  Canada,  we issued
series K warrants to purchase  500,000 shares of our common stock at an exercise
price of $2.50 per share to TK Holdings,  Inc. The warrants were exercisable for
a period of two


                                       41
<PAGE>

years  beginning  on June 4,  2000.  The  series K  warrants  began  vesting  in
quarterly  installments of 125,000 shares on December 20, 2000, and became fully
vested on September 30, 2001.  During each of the years ended March 31, 2002 and
2001, we recorded a dividend of $1,024,900 upon vesting of 250,000 of the series
K warrants. Ashton received 309,500 of the series K warrants from TK Holdings in
an exchange on September  24, 2001 (see  "Stockholders'  (Deficiency)  Equity").
This  exchange  increased  our ownership in Ashton Canada from 51% of the voting
equity to 90%.

KINGSWAY-ATG ASIA, LTD.

         On December  16,  1999,  we finalized a joint  venture  agreement  with
Kingsway  International  to create KAA. On January 13,  2000,  Ashton  purchased
47,000,000 shares of KAA's voting common stock for $1,000,000 for a 47% interest
in KAA.  Because we own less than 50% of the equity of KAA,  we account  for our
investment in KAA under the equity  method.  Our  investment in KAA,  originally
recorded at cost,  has been adjusted to recognize our share of KAA's net losses.
The balance of our investment in KAA at March 31, 2002 and 2001 was $183,468 and
$11,095, respectively.

         On January 30, 2002,  Ashton and HK Weaver Group,  Inc. entered into an
"Agreement  For Sale And Purchase Of Shares in respect of the shares in Kingsway
ATG Asia  Limited."  Pursuant to the  agreement,  Ashton has sold all of its KAA
shares to HK Weaver in exchange for a HK$23,400,000  zero-coupon  note issued to
Ashton by HK Weaver,  effective as of May 7, 2002. The note is convertible  into
HK Weaver common stock upon an IPO of HK Weaver and listing of such stock on the
Growth  Enterprise  Market  (GEM)  of the  Stock  Exchange  of Hong  Kong.  Upon
conversion of the note, Ashton shall receive HK Weaver shares equal to the total
principal  amount of the note  divided by the IPO  price.  Such  shares  will be
subject to a lockup  for 18 months  from their  issuance  date.  In the event of
certain  defaults  identified in the note  instrument or should HK Weaver shares
not be listed on GEM by January 30, 2003,  Ashton's  sole  recourse is to redeem
the note and receive the return of its KAA shares.

GOMEZ, INC.

         Gomez,  which  was  one  of  our  majority-owned  subsidiaries  through
December 1999, was our primary source of revenues since Gomez's inception in May
1997. As a result of Gomez's sale of preferred  stock on December 30, 1999,  our
ownership percentage in Gomez was reduced to below 50%. As of December 31, 1999,
we began  accounting  for our  investment  in Gomez  under the equity  method of
accounting  due to the decrease in ownership and our reduced  representation  on
Gomez's board.  As a result,  we  consolidated  Gomez's  operating  results only
through  December 31, 1999.  Pursuant to the equity  method of  accounting,  the
carrying amount of our remaining  investment in Gomez was increased to zero. The
increase of  $5,568,475  was  reported as a gain during the year ended March 31,
2000. We also realized a gain of $2,550,000 during the year ended March 31, 2000
from the redemption of 500 shares of our Gomez series A preferred stock.

         In July 2001,  Gomez  raised  approximately  $1 million of capital from
certain existing  investors in the form of senior secured notes. We participated
in that round of funding  through the  purchase of a senior  secured note in the
amount of  $38,633.  The  balance of the note and  accrued  interest  thereon of
$41,289 are included in "Investments in and advances to affiliates" on our March
31, 2002  consolidated  balance sheet. On November 7, 2001,  Gomez completed the
sale and  transfer  of  substantially  all of its assets and  liabilities  to GZ
Advisors,  Inc. Gomez,  Inc. is being liquidated and GZ Advisors,  Inc. has been
renamed Gomez, Inc. Currently, our investment in the new Gomez, Inc. consists of
a $38,633 senior secured note that is convertible into approximately 1.4% of the
fully  diluted  common stock of the new Gomez,  Inc. In  addition,  our series A
preferred stock in Gomez was converted into common stock of the new Gomez, Inc.,
representing an additional 1.1% of the fully diluted ownership.

4.       RECENT ACCOUNTING PRONOUNCEMENTS

         In May 2002, the Financial  Accounting Standards Board issued Statement
of Financial  Accounting Standards No. 145, Rescission of FASB


                                       42
<PAGE>

Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections  (SFAS No. 145). SFAS No. 145 eliminates  Statement 4 (and Statement
64,  as  it  amends   Statement  4),  which   requires  gains  and  losses  from
extinguishments  of debt to be  aggregated  and, if material,  classified  as an
extraordinary  item,  net of the  related  income tax effect.  As a result,  the
criteria  in APB  Opinion  No. 30 will now be used to  classify  those gains and
losses.  SFAS No. 145 amends FASB Statement No. 13 to require that certain lease
modifications that have economic effects similar to sale-leaseback  transactions
are accounted for in the same manner as sale-leaseback  transactions.  We do not
expect the adoption of SFAS No. 145 will have a material impact on our financial
statements.

         In  August  2001,  the  Financial  Accounting  Standards  Board  issued
Statement  of  Financial  Accounting  Standards  No.  144,  Accounting  for  the
Impairment or Disposal of Long-Lived  Asset" (SFAS No. 144),  which is effective
January 1, 2002.  SFAS No.  144  supersedes  SFAS No.  121,  Accounting  for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, and
the accounting and reporting provisions relating to the disposal of a segment of
a business  described  in APB No. 30. We do not expect the  adoption of SFAS No.
144 will have a material impact on our financial statements.

         In  July  2001,  the  Financial   Accounting   Standards  Board  issued
Statements of Financial  Accounting Standards No. 143, Accounting for Retirement
Obligations  (SFAS No.  143) that  records the fair value of the  liability  for
closure and removal costs associated with the legal  obligations upon retirement
or removal of any tangible  long-lived  assets. We do not expect the adoption of
SFAS No. 143 will have a material impact on our financial statements.

         In July 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 141, Business  Combinations (SFAS No. 141)
and  Statement of Financial  Accounting  Standards  No. 142,  Goodwill and Other
Intangible  Assets (SFAS No. 142). SFAS No. 141 addresses  financial  accounting
and reporting for business  combinations.  This statement  requires the purchase
method of accounting to be used for all business combinations, and prohibits the
pooling-of-interests  method of accounting.  This statement is effective for all
business  combinations  initiated after June 30, 2001 and supercedes APB Opinion
No. 16, Business  Combinations as well as FASB Statement of Financial Accounting
Standards  No. 38,  Accounting  for  Preacquisition  Contingencies  of Purchased
Enterprises.  SFAS No. 142  addresses  how  intangible  assets that are acquired
individually  or  within a group of other  assets  should  be  accounted  for in
financial statements upon their acquisition. This statement requires goodwill to
be periodically reviewed for impairment rather than amortized,  for fiscal years
beginning  after December 15, 2001.  SFAS No. 142 supersedes APB Opinion No. 17,
Intangible  Assets.  We do not expect the adoption of these  standards to have a
material effect on our consolidated financial statements.


5.       PROPERTY AND EQUIPMENT

         Property and equipment,  at cost,  consist of the following as of March
31, 2002 and 2001:

<TABLE>
<CAPTION>

                                                                                       Estimated
                                                           March 31,                  Useful Life
                                             -------------------------------------- -----------------
                                                  2002                 2001
                                             ----------------    ------------------
         <S>                                   <C>                 <C>                   <C>
         Office equipment......................$     215,040       $     255,954         3 - 5 years
         Computer equipment.....................   1,655,613           2,514,047             3 years
         Computer software......................     223,218             233,310             3 years
         Furniture and fixtures.................     625,133             708,208             5 years
         Leasehold improvements.................     312,995             381,648       Term of lease
                                             ----------------    ---------------
                                                   3,031,999           4,093,167
         Less accumulated depreciation............(1,516,569)         (1,774,087)
                                             ----------------    ---------------
              Property and equipment, net.... $   1,515,430       $   2,319,080
                                             ================    ===============
</TABLE>

         Depreciation and amortization expense related to property and equipment
for the years ended March 31, 2002,  2001 and 2000 was  approximately  $915,000,
$688,000 and $677,000, respectively.



                                       43
<PAGE>

6.       SECURITIES AVAILABLE FOR SALE AND OTHER INVESTMENTS

         The balance of  securities  available for sale as of March 31, 2002 and
2001 consist of the following:

<TABLE>
<CAPTION>

                                                   2002                                  2001
                                   ---------------------------------------------------------------------------
                                         Cost               Market               Cost             Market
                                                            Value                                  Value
                                   ---------------------------------------------------------------------------
<S>                                <C>                <C>                 <C>                 <C>
US government & government
agency obligations                 $               -  $                -  $       1,500,000   $   1,483,350
                                   ===========================================================================
</TABLE>

         As of March 31, 2001, our securities  available for sale had maturities
ranging  from  three to eight  years.  Gross  unrealized  losses  on  securities
available  for sale  amounting  to $16,650 at March 31, 2001 have been  excluded
from earnings and included in accumulated other  comprehensive  loss, which is a
component of  stockholders'  (deficiency)  equity.  The specific  identification
method is utilized  in  determining  the cost of a security  that has been sold.
Realized  gains and losses of $6,250 and  $6,296 for the years  ended  March 31,
2002 and 2001,  respectively,  are  included in other  income  (expense)  on the
consolidated statements of operations.

         On February 6, 2001,  we made a $1,500,000  equity  investment in JAGfn
Broadband,  LLC. This  investment  was recorded at its cost on the  consolidated
balance sheet as of March 31, 2001.

         On September 24, 2001, we entered into an exchange  agreement  with the
UTTC series TK preferred stock  investors.  We exchanged our investment in JAGfn
for 72,850 shares of series TK preferred stock,  all of the outstanding  200,000
series T warrants,  309,500 of the 500,000 outstanding series K warrants, and an
additional  39,000  shares of the class B common  stock of Ashton  Canada.  As a
result of this exchange,  we recorded a reduction in other assets of $1,500,000,
a reduction in minority interest of $1,000,000 and a loss of $500,000 during the
year ended March 31, 2002.

7.       EXCHANGE MEMBERSHIPS

         We own two Philadelphia Stock Exchange  memberships through ATG Trading
and Croix. In July 2000, ATG Trading,  LLC purchased an exchange membership with
options trading privileges for $90,000 in cash. In January 2000, Croix purchased
a regular  exchange  membership for $69,752 in cash.  Exchange  memberships  are
recorded at cost and are evaluated  periodically  for impairment in value. If an
other than temporary  impairment is considered to have occurred,  the membership
will be recorded at a value that reflects our estimate of the impairment.

         On January 23, 2002, REB sold its membership seat which it purchased in
March 1999 at a cost of $196,900. REB received proceeds of $105,000 and recorded
a loss of $91,900,  which is included in other income (expense) on the March 31,
2002 statement of operations.

8.       SHORT-TERM NOTE

         On January  30,  2002,  HK Weaver  Group,  Limited,  formerly  known as
Kingsway Electronic Services,  Limited,  agreed to lend up to $500,000 to Ashton
under a bridge loan agreement. $250,000 of the loan amount was repayable through
the  mandatory  issuance of 5 million  shares of Ashton  common  stock,  and the
remaining $250,000 was either convertible into an additional 5 million shares of
Ashton  common stock or repayable  in cash,  at the option of HK Weaver.  The HK
Weaver loan was secured by 47 million shares of the common stock of KAA owned by
Ashton.  HK Weaver is our joint venture partner in KAA, and is a holding company
and a subsidiary of Kingsway International Holdings Limited (KIHL).

         We drew a total of $500,000 on the bridge  loan during  February  2002.
Since the note was  convertible  into shares of Ashton common stock at a rate of
$0.05 per share,  and the market  price of Ashton



                                       44
<PAGE>

common stock was $0.25 on the date of the bridge loan agreement, Ashton recorded
the  beneficial  conversion  feature  of the note in  accordance  with EITF 98-5
Accounting for Convertible  Securities with  Beneficial  Conversion  Features or
Contingency  Adjustable Conversion Ratios. We recorded the beneficial conversion
feature as a discount of $500,000 on the note,  and have  amortized  $322,581 as
interest  expense  through March 31, 2002. The $500,000 note is reflected on the
March 31,  2002  consolidated  balance  sheet net of the  remaining  unamortized
discount of $177,419.  Because of the short-term  nature of the note instrument,
its estimated fair value approximates the carrying amount.

         Also in  connection  with the  bridge  loan,  we  granted  HK  Weaver a
three-year  option to purchase two million  shares of Ashton  common stock at an
exercise price equal to the price per share to be paid, by OptiMark  Innovations
upon closing of the securities  purchase  agreement  between Ashton and OptiMark
Innovations  (see  "Subsequent  Events").  The  options  will vest in  quarterly
installments of 500,000 each, beginning on August 7, 2002.

         On May 7, 2002, HK weaver  converted  the entire  $500,000 note into 10
million shares of Ashton common stock.


9.       EXCHANGE OF SERIES F REDEEMABLE CONVERTIBLE PREFERRED STOCK FOR SECURED
         CONVERTIBLE NOTE

SECURED CONVERTIBLE NOTE

         On July 13, 2001, Ashton entered into a securities  exchange  agreement
with RGC International  Investors,  LDC to exchange all of the outstanding 4,364
shares  of  series F  preferred  stock,  plus  accrued  premium,  for a  secured
convertible note with a principal  amount of $5,111,526,  maturing on August 18,
2003. The principal  amount of the note represents the par value of the series F
preferred  stock of $4,363,717  plus accrued premium at the date of the exchange
of $747,809.  Interest on the note was 9% per year, the same rate as the premium
on the series F preferred  stock.  The note was  convertible  into shares of our
common  stock at the lower of the five lowest  closing bid prices  during the 22
trading  days  preceding   conversion  and  $1.00  per  share.  Certain  of  our
intellectual property, including our eVWAP trading system, secured the note.

         During the year ended March 31, 2002, we recorded  interest  expense of
$304,209,  which represents  interest on the secured  convertible note from July
13, 2001, the exchange date,  through March 31, 2002. Also during the year ended
March 31, 2002, we issued  4,360,081  shares of common stock upon  conversion of
$685,000 in principal and $19,334 in interest on the secured convertible note.

         On May 7, 2002,  Ashton  entered into a securities  exchange  agreement
with RGC  International  Investors,  LDC, pursuant to which RGC exchanged the 9%
secured  convertible  note for a  four-year,  7.5%  non-convertible  zero-coupon
senior  secured  note in the  principal  amount of  $4,751,876  and a  five-year
warrant to purchase 9 million shares of Ashton common stock at an exercise price
of $0.04305 per share.  The exchange note is secured by a blanket first priority
lien on all assets of Ashton (see "Subsequent Events").

         The estimated fair value of the note  approximates  the carrying amount
because the interest rate  approximates  those  presently  available for similar
debt.

SERIES F CONVERTIBLE PREFERRED STOCK

         The  series F  preferred  stock was  issued in a private  placement  on
August 18, 1999, whereby we sold 20,000 shares of series F convertible preferred
stock,  par value of $.01 and stated value of $1,000 per share,  and warrants to
purchase an aggregate of 200,000 shares of our common stock,  for gross proceeds
of $20,000,000.  The warrants are  immediately  exercisable for a period of five
years, ending August 18, 2004, at an exercise price of approximately  $12.26 per
share.



                                       45
<PAGE>

         Each share of the series F preferred was  convertible  into a number of
shares of our common stock based on a formula.  The formula was the stated value
of  the  series  F  preferred  plus a  premium  of 9% per  annum,  divided  by a
conversion  price.  The conversion price was the lesser of $10.79 or the average
of the five lowest  closing bid prices of our common stock during the 22 trading
days preceding  conversion.  After February 18, 2000, the series F preferred was
not subject to a minimum  conversion  price, but was redeemable at our option in
lieu of  conversion,  if the market price of our common stock was below $7.35 on
any conversion date. Since the series F preferred was also subject to redemption
by the investor upon the  occurrence of certain events which were outside of our
control,  it is  classified  in our March 31, 2001 balance  sheet as  redeemable
preferred stock instead of a component of stockholders' equity.

         In January 2001, the aggregate  number of shares of common stock issued
upon prior  conversions  of the series F preferred  equaled 19.99% of the common
stock  outstanding on the issue date of the series F preferred,  and represented
the maximum number of shares issuable to the series F investor without obtaining
stockholder  approval under NASDAQ rules. As a result of this "triggering event"
as defined in the certificate of  designations,  preferences,  and rights of the
series F preferred,  the series F investor was entitled to redeem the  remaining
4,364 shares of series F preferred for cash. In lieu of such redemption, on July
13, 2001, the series F preferred was exchanged for the secured  convertible note
maturing on August 18, 2003.

         During  the year ended  March 31,  2001,  3,636  shares of the series F
preferred were converted  into 2,757,358  shares of our common stock,  including
290,304  shares for the 9% premium,  which we recorded as dividends.  During the
year  ended  March 31,  2000,  12,000  shares  of the  series F  preferred  were
converted into  2,192,412  shares of our common stock,  including  70,884 shares
recorded  as  dividends.  We also  accrued  dividends  in arrears  of  $108,943,
$638,866,  and  $448,767  to reflect  the 9% premium on the  remaining  series F
preferred  from  the  issue  date  through  March  31,  2002,   2001  and  2000,
respectively.

         The warrants are  immediately  exercisable  for a period of five years,
ending August 18, 2004, at an exercise price of $12.26 per share. The fair value
of the warrants,  or $645,000,  was recorded as a dividend in August 1999 at the
time of issuance.

10.      STOCKHOLDERS' EQUITY

INCREASE IN AUTHORIZED COMMON STOCK

         On  September  21,  2000,  our  stockholders   voted  to  increase  the
authorized  shares of our common stock from 60,000,000 to 100,000,000.  On April
18, 2002, our stockholders  voted to further  increase the authorized  shares of
our common stock from 100,000,000 to 1,000,000,000. (See "Subsequent Events".)

NASDAQ DELISTING

         On November 6, 2001, the NASDAQ Listing  Qualifications  Panel notified
us that it would  delist our  common  stock  from the  NASDAQ  National  Market,
effective  with the open of business on  November  7, 2001.  In its notice,  the
Panel noted that we failed to present a  definitive  plan to achieve and sustain
compliance with the minimum net tangible assets/shareholder's equity requirement
for  continued  listing  on the NASDAQ  National  Market as  required  by NASDAQ
marketplace  Rule 4450 (a)(3),  and that we did not satisfy the requirements for
continued listing on the NASDAQ SmallCap Market. On November 7, 2001, our common
stock began trading on the OTC Bulletin Board.

EQUITY LINE OF CREDIT AGREEMENT

         On July 10, 2001 we entered  into an amended  equity  line  arrangement
with Jameson Drive LLC. The equity line is in the form of a securities  purchase
agreement and provides for the purchase by Jameson of up to $15 million worth of
shares of Ashton  common stock over a 24-month  period.  Jameson also received a
five-year  warrant to purchase  1,506,024  shares of common stock at an exercise
price of $1.02.  Ashton is  committed  to drawing a minimum of $2.5 million over
the term of the  agreement,  and is limited


                                       46
<PAGE>

to drawing a maximum of $15 million. We may request a draw on the equity line by
selling  common stock to Jameson  based on a 10% discount to the market price of
Ashton common stock at the time of the sale. At any one time,  Ashton can draw a
minimum of $100,000 and a maximum of $1 million. During the year ended March 31,
2002, we drew down gross  proceeds of $1.8 million on the equity line by selling
12,132,865 shares of common stock to Jameson.

         There are a number of  conditions  that we must  satisfy  before we may
issue shares under the equity line, including the following:

         o  A registration statement covering the resale of the shares purchased
            by  Jameson  must  be  declared  effective  by the  SEC  and  remain
            effective.  We filed a  registration  statement on Form S-2 covering
            the  resale of  7,500,000  shares of stock  issued  under the equity
            line. The  registration  statement was declared  effective on August
            20,  2001.  We have  already  issued  the  maximum  number of shares
            covered by that  registration  statement.  We have an  obligation to
            register  the  resale of an  additional  4,632,865  shares  which we
            issued  to  Jameson  and  were  not  covered  by  the   registration
            statement.  We are unable to access the equity  line by issuing  any
            additional shares until another registration  statement covering the
            resale of such shares is filed by us and  declared  effective by the
            SEC;

         o  We may not issue  shares to  Jameson  if  following  such  purchase,
            Jameson and its affiliates would beneficially own more than 9.99% of
            our common stock then outstanding;

         o  Our  representation and warranties given to Jameson must be true and
            correct,  and we must comply with the  provisions  of the  agreement
            with Jameson; and

         o  Our  common  stock must  remain  traded on NASDAQ  National  Market,
            NASDAQ Small Cap Market,  American  Stock  Exchange,  New York Stock
            Exchange or OTC Bulletin Board.

         There is no guarantee  that in the future we will be able to meet these
or  any  other  conditions  under  the  securities  purchase  agreement  or  the
registration  rights agreement with Jameson, or that we will be able to make any
additional  draws  on the  equity  line.  We  have  informed  Jameson  that  our
preference is to terminate this agreement without drawing down additional funds.
We have not concluded discussions with Jameson and there is no certainty that we
will be successful in terminating this agreement

UTTC SERIES KW CONVERTIBLE PREFERRED STOCK

         On December  12,  2001,  all 123,240  shares of the series KW preferred
were  converted  into  18,489,274  shares of Ashton common stock.  The series KW
preferred  stock was issued by UTTC in a private  placement  on January 12, 2000
for gross proceeds of $3,000,000.  In accordance with the terms of the series KW
preferred,  since UTTC had not completed an initial public  offering by December
31, 2001,  41,080 shares of the series KW preferred was  convertible  into 3.477
shares each of Ashton common stock, and 82,160 shares of the series KW preferred
was convertible at the liquidation value divided by the average closing price of
Ashton common stock for the twenty trading days preceding conversion.

         The UTTC series KW preferred stock is presented as a minority  interest
on the March 31, 2002 and 2001  consolidated  balance sheets at its  liquidation
preference of $0 and $3,000,000, respectively.

CALP II LIMITED PARTNERSHIP COMMON STOCK ISSUE

         On February 5, 2001,  we sold  1,333,333  shares of our common stock to
CALP II Limited  Partnership,  for $1.50 per share,  for an  aggregate  purchase
price  of  $2,000,000  in a  private  placement.  The  proceeds  of the  private
placement were used to fund our investment in JAGfn,  and for general  corporate
purposes at Ashton Canada.



                                       47
<PAGE>


UTTC SERIES TK CONVERTIBLE PREFERRED STOCK AND SERIES T WARRANTS

         The series TK preferred  stock was issued by UTTC on June 4, 1999, in a
private placement with TK Holdings, Inc. and one of its principals.  UTTC issued
145,700 shares of series TK convertible preferred stock and series T warrants to
purchase  200,000  shares of Ashton  common  stock at $10.00 per share for gross
proceeds of $2,000,000.

         On September 24, 2001, we entered into an exchange  agreement  with the
UTTC series TK preferred stock investors. We received 72,850 shares of series TK
preferred  stock, all of the outstanding  200,000 series T warrants,  309,500 of
the 500,000  outstanding  series K warrants,  and an additional 39,000 shares of
the class B common stock of Ashton Canada,  in exchange for Ashton's  investment
in JAGfn.  Our 5% equity  investment in JAGfn was  purchased  for  $1,500,000 on
February 6, 2001. As a result of this exchange, we recorded a reduction in other
assets of $1,500,000,  a reduction in minority interest of $1,000,000 and a loss
of $500,000 during the year ended March 31, 2002.

         We also  exchanged  72,850 shares of UTTC series TK preferred  stock on
March 9, 2001 for 733,945 shares of our common stock with a value of $1,000,000.
The UTTC series TK preferred  stock was presented as a minority  interest on the
consolidated  balance sheet at its  liquidation  preference of  $1,000,000as  of
March 31, 2001.

         The series T warrants  vested in  quarterly  installments  beginning in
June 2000.  The fair value of the warrants was being  recorded as dividends over
the vesting period.  During the years ended March 31, 2002 and 2001, we recorded
dividends  of $304,300  and  $608,600  upon vesting of 50,000 and 100,000 of the
series T warrants, respectively.

SERIES K WARRANTS

         In  connection  with our  agreement  to form Ashton  Canada in December
1999,  we issued series K warrants to purchase  500,000  shares of Ashton common
stock at an exercise price of $2.50 per share to TK Holdings,  Inc. The warrants
are exercisable for a period of two years beginning on June 4, 2000. On December
20,  2000,  the series K warrants  began  vesting in quarterly  installments  of
125,000  shares,  and became fully vested on September 30, 2001.  During each of
the years ended March 31, 2002 and 2001,  we recorded  dividends  of  $1,024,900
upon vesting of 250,000 of the series K warrants. Ashton received 309,500 of the
series K warrants  from TK Holdings in an exchange on September  24, 2001.  (See
"UTTC Series TK Convertible Preferred Stock and Series T Warrants").

PRIVATE EQUITY AGREEMENT, SERIES D AND E PREFERRED STOCK

         On April 3,  1998 we  entered  into a  private  equity  line of  credit
agreement with a group of accredited  investors.  Subject to the satisfaction of
certain  conditions,  we were entitled to "put" to the private equity  investors
shares of our common stock for an aggregate price of $13,000,000.  The put price
per share was  equal to 85% of the  average  of the  lowest  bid  prices of such
common  stock over the seven day period  beginning  three days before and ending
three days after we gave notice of a put.  During the year ended March 31, 2000,
we exercised four puts in the aggregate amount of $5,750,000, and issued 696,570
shares of common stock.

         Also on April 3, 1998, the private equity investors  received  warrants
to purchase up to an aggregate of 250,000 shares of common stock and on July 15,
1998,  received  additional  warrants to purchase up to an  aggregate of 100,000
shares of common stock.  The warrants,  which were  exercisable  for a period of
five years, were exercised in May 1999. As a result of the exercise, we received
gross proceeds of $1,601,450 and issued 350,000 shares of common stock.

         In connection with the private equity line of credit agreement, we paid
the  placement  agent a fee of  $150,000  in cash,  0.15  shares of our series D
preferred,  a warrant,  on the same terms as the warrants  issued to the private
equity investors,  to purchase up to 190,000 shares of our common stock,  20,000
shares of our common stock and attorneys' fees of $30,000.  On July 15, 1998, we
paid the placement agent $100,000 and 0.1 share of our series E preferred, and a
warrant to purchase up to 60,000  shares of common  stock.  In addition,  on the
completion of each put, we paid the placement agent


                                       48
<PAGE>

an amount  equal to 5% of the  proceeds.  Payments of $287,500  were made in the
years ended March 31, 2000 in connection with the agreement. Of the total 250,00
warrants  issued to the placement  agent in  connection  with the series D and E
preferred, 30,000 were exercised in August 1999 for total proceeds of $137,400.

SERIES A AND B PREFERRED STOCK

         On September  18, 1997,  we offered to certain  investors (i) shares of
our series A convertible PIK preferred  stock (with a liquidation  preference of
$10.00 per share); (ii) shares of our series B convertible preferred stock (with
a liquidation  preference  of $10.00 per share);  and (iii) the  opportunity  to
exchange up to $3,000,000 of convertible and  non-convertible  notes  previously
issued by UTTC for up to  300,000  shares of series B  preferred.  The  series A
preferred paid cumulative dividends semi-annually at an annual rate of $0.50 per
share and was payable in cash or additional  shares of series A preferred  until
February 15, 2000.  Each holder of shares of series A preferred had the right to
convert each share into:  (i) ten shares of Ashton  common  stock;  and (ii) one
warrant to purchase 2.25 shares of UTTC common stock,  with an exercise price of
$1.00 per share,  subject to adjustment.  The series B preferred pays cumulative
dividends  semi-annually  at an annual  rate of $0.90 per share.  Each holder of
series B preferred  has the right to convert each share into:  (i) six shares of
Ashton common stock;  and (ii) one warrant to purchase 1.5 shares of UTTC common
stock, at an exercise price of $1.00 per share, subject to adjustment.

         We sold  250,000  shares of our series A preferred at $10.00 per share,
and  realized  gross  proceeds of  $2,500,000.  The Series A preferred  offering
closed on January 15,  1998.  We closed the  exchange  offer  transaction  after
receiving  the  tender  of  $2,975,000  of the UTTC  notes,  for which we issued
297,500 shares of series B preferred  stock.  We also sold 290,000 shares of our
series B preferred  stock at $10 per share during the years ended March 31, 1999
and 1998, realizing total gross proceeds of $2,900,000.

         We paid cash dividends of $83,223 on the series A preferred  during the
year ended March 31,  2000.  There were no cash  dividends  paid on the series A
preferred  subsequent to March 31, 2000.  We paid cash  dividends of $58,877 and
$452,606  on the series B  preferred  during the years  ended March 31, 2001 and
2000, respectively. As of March 31, 2002 and 2001, dividends in arrears included
$35,415 and $5,122, respectively, for the series B preferred.

         During the year ended  March 31,  2000  125,219  shares of the series A
preferred were  converted into a total of 2,518,440  shares of our common stock.
By August 1999,  all shares of the series A preferred  stock had been  converted
into common  stock.  In the years ended March 31, 2002,  2001 and 2000,  20,200,
20,000  and  353,300  shares,  respectively,  of the  series  B  preferred  were
converted into a total of 2,361,000 shares of common stock.

DEFERRED CONSULTING EXPENSE

         In  February  1998,  we  entered  into  a  consulting   agreement  with
Continental  Capital & Equity  Corporation.  We issued  300,000 shares of common
stock,  with a fair value of  $475,125,  for  promotional  services  provided by
Continental through February 1999. During August 1998, the agreement was amended
to reduce  future  payments  and extend the original  term of the February  1998
agreement.  As a result of the amendment, we issued 250,000 additional shares of
common  stock,  with a fair  market  value of  $416,657.  We recorded a deferred
consulting expense of $416,657 as a reduction to stockholders' equity during the
year ended March 31, 1999.  The  consulting  cost was amortized over the revised
one-year term of the agreement.  During the year ended March 31, 2000,  non-cash
compensation  charges  of  $285,208  were  recorded  to  amortize  the  deferred
consulting expenses.

UNDERWRITERS' WARRANTS

         Warrants  that were issued to the  underwriters  in our initial  public
offering in May 1996 were exercised on a cashless basis during June 1999, and we
issued 100,555 shares of common stock.



                                       49
<PAGE>

REDEEMABLE COMMON STOCK PURCHASE WARRANTS

         In May 1996,  we issued an  aggregate of  3,232,500  publicly  tradable
warrants.  The warrants were exercisable at any time during the five-year period
ending  May  2,  2002,  provided  that  a  current  prospectus  relating  to the
underlying  common stock was in effect and the shares were qualified for sale or
exempt from  qualification  under applicable  securities  laws.  During the year
ended March 31, 2000,  5,200 of the public  warrants were exercised for proceeds
to us of $30,420. The outstanding warrants expired on May 2, 2002.

11.      RELATED PARTY TRANSACTIONS

THE DOVER GROUP, INC.

         We have utilized the Dover Group, Inc. for consulting  services related
to our financing and product development  efforts.  Fredric W. Rittereiser,  the
Company's former Chairman and Chief Executive Officer,  is the sole shareholder,
director and officer of Dover.  For the years ended March 31, 2001 and 2000, the
Company  paid  consulting  fees to Dover  amounting  to  $75,000  and  $180,000.
Effective  September  1,  2000,  Ashton  and  Mr.  Rittereiser  entered  into an
employment  agreement,  pursuant to which Mr.  Rittereiser  was  compensated  by
Ashton  and  UTTC  directly,  and the  consulting  arrangement  with  Dover  was
terminated.  On April 15,  2002,  Mr.  Rittereiser  and  Ashton  entered  into a
separation  agreement that became  effective as of May 7, 2002 (see  "Subsequent
Events").

         On January 14, 1998,  we entered  into an agreement  with Dover and Mr.
Rittereiser,  whereby  they agreed to  reimburse  us for $413,980 in legal costs
associated with a lawsuit brought by David N. Rosensaft against Ashton and UTTC,
to the extent  such  costs were not  covered  by our  directors'  and  officers'
liability insurance carrier. Dover and Mr. Rittereiser pledged 250,001 shares of
UTTC common stock as collateral  in support of their  agreement to pay the legal
costs.  On March 4, 1998, the U.S.  District Court for the Southern  District of
New York entered an order awarding damages against Dover and Mr.  Rittereiser in
the  Rosensaft  lawsuit  in the  amount  of $1.2  million.  We  were  previously
dismissed as a party to the Rosensaft  lawsuit,  however Ashton's board resolved
to fund  one-third of the $1.2 million  settlement  amount,  and, UTTC agreed to
fund one-third of the Rosensaft settlement. On April 8, 1998, we loaned $380,000
to Dover and Mr.  Rittereiser at an annual interest rate of 9% for thirty months
to satisfy their one-third portion of the Rosensaft settlement.  In exchange for
the loan, Dover initially pledged 300,000 shares of Ashton common stock which it
owned.

         On April 3, 2000, our board of directors  determined  that it would not
receive any payments from its insurance  carrier in connection with the claim it
filed for the Rosensaft lawsuit. At that time, the board resolved to accept from
Dover and Mr. Rittereiser shares of Gomez common stock owned by Dover equivalent
in value to the amounts due under the loan agreement and for the legal costs, or
approximately  $884,564,  as full and  complete  satisfaction  of the debts.  On
November 23, 2000, we agreed to accept 216,805 shares of Gomez common stock. The
price of the Gomez stock was determined by our board based upon the price of the
Gomez series D preferred  stock  issued in October  2000,  discounted  by 20% to
reflect the liquidation  preference and dividends applicable to the Gomez series
D preferred.

         During the year ended  March 31,  2001,  we  recorded  other  income of
$413,980 for the  reimbursement  of legal costs. We recorded the amount as other
income instead of a reduction to selling,  general and  administrative  expenses
because the legal costs that were  reimbursed  were originally paid by us during
1997. As a result of the  acceptance  of the Gomez common stock,  we recorded an
investment  in Gomez  equal to the value of the  stock  received,  or  $884,564.
However,  due to our  equity  method of  accounting  for  Gomez,  we  recorded a
corresponding  loss in affiliates for the entire amount. We recorded the loss to
reduce the carrying  amount of the  investment  in Gomez by our share of Gomez's
net losses to the extent of our investment balance, as required under the equity
method of  accounting.  The loss in  affiliates  offsets  the  $413,980 of other
income and the $470,584  reduction of the note  receivable  and related  accrued
interest.



                                       50
<PAGE>

ADIRONDACK CAPITAL, LLC

         In 1997,  we retained  Adirondack  Capital,  LLC to provide  investment
banking and financial advisory services.  K. Ivan F. Gothner, a former member of
our  board  of  directors,  is the  managing  director  of  Adirondack.  We paid
consulting  fees to  Adirondack  amounting  to $80,000,  $120,000,  and $120,000
during  the  years  ended  March  31,  2002,  2001 and  2000,  respectively.  We
terminated the consulting  agreement with Adirondack effective December 1, 2001.
We also paid  Adirondack a fee of $75,000 in  September  2000 to terminate a fee
agreement  for  advisory  services  provided  by  Adirondack  to  eMC.  We  paid
Adirondack  $287,500 in the year ended March 31,  2000,  pursuant to the private
equity line of credit agreement.  Additionally,  we paid Adirondack $300,000 (an
amount equal to 5% of the proceeds from the sale of the series C preferred,  the
series D preferred and the series E preferred) and an option to purchase 600,000
shares of common stock at $1.875 per share. Effective April 1, 1999, Mr. Gothner
also began receiving a monthly board retainer.

         In connection with the equity line of credit  agreement with Jameson we
executed in February  2001,  we issued  50,000  restricted  shares of our common
stock to Adirondack for its assistance in structuring the agreement. On June 27,
2001,  Adirondack agreed to return the shares,  and on July 10, 2001, we amended
the equity line  agreement.  Adirondack  will not receive  any  compensation  in
connection with either the original or the amended equity line agreement.

         Effective May 7, 2002,  Mr.  Gothner  resigned from the Ashton board of
directors.

WYNDHAM CAPITAL CORPORATION

         In 1997, we retained Wyndham Capital  Corporation to provide investment
banking and financial advisory services. Thomas G. Brown, a former member of our
board of  directors,  is the  President  and managing  director of Wyndham.  The
Company paid $25,000 in consulting  fees to Wyndham  during the year ended March
31, 2000. Effective September 1, 1999, Wyndham's consulting fees were terminated
and Mr. Brown began receiving a monthly board retainer.

         Effective  May 7, 2002,  Mr.  Brown  resigned  from the Ashton board of
directors.

KRONISH, LIEB, WEINER & HELLMAN LLP

         Kronish,  Lieb,  Weiner & Hellman  LLP,  the law firm of which  Herbert
Kronish, a former member of our board of directors,  is a senior partner,  acted
as counsel to us in various matters since 1998. We paid aggregate fees of $2,709
$65,071  and  $118,479  during the years ended  March 31,  2002,  2001 and 2000,
respectively,  to Kronish,  Lieb,  Weiner & Hellman LLP for legal services.  Mr.
Kronish also began  receiving a monthly board retainer in September  2000,  upon
his election to the board.

         Effective  September  25, 2001,  Mr.  Kronish  resigned from the Ashton
board of directors.

12.      STOCK OPTION PLANS

ASHTON STOCK OPTION PLANS

         In July 1998, our board of directors  adopted the 1998 Stock  Incentive
Plan. A total of 6,450,000 shares for which options may be granted were reserved
pursuant to the 1998 Plan. In November 1998, our board of directors  adopted the
1999 Stock Incentive Plan. A total of 2,550,000  shares for which options may be
granted  were  reserved  pursuant  to the 1999  Plan.  In  September  2000,  our
stockholders  approved the 2000 Incentive Plan. A total of 3,000,000  shares for
which options may be granted were reserved  pursuant to the 2000 Plan. Under the
1998 Plan,  the 1999 Plan and the 2000 Plan,  stock options have been granted to
officers,  directors,  employees and others who provided  services to us. In the
aggregate,  we have already  granted  options to purchase  9,630,000,  shares of
common stock under all three stock option plans, and options to purchase 291,250
shares under separate agreements. As of March 31, 2002, 640,500,


                                       51
<PAGE>

1,140,394,  and 2,861,500 shares remain available for grant under the 1998 Plan,
the 1999 Plan and the 2000 Plan, respectively.

         All Ashton stock  options  include  provisions  for:  forfeiture in the
event the employee  dies or ceases to be in the  employment  of Ashton or one of
its subsidiaries during the first year of employment.  In January 2000, we filed
Forms S-8 to register  774,009 and  266,027  shares  under the 1998 Plan and the
1999 Plan, respectively.

         A summary of the status of Ashton's  stock  options  outstanding  as of
March 31, 2002, 2001 and 2000 is as follows:

<TABLE>
<CAPTION>

                                       MARCH 31, 2002               MARCH 31, 2001             MARCH 31, 2000
                                  ----------------------------------------------------------------------------------
                                                  WEIGHTED                     WEIGHTED                  WEIGHTED
                                                  AVERAGE                      AVERAGE                   AVERAGE
                                     OPTIONS      EXERCISE        OPTIONS      EXERCISE     OPTIONS      EXERCISE
                                   OUTSTANDING     PRICE        OUTSTANDING     PRICE     OUTSTANDING     PRICE
                                  ----------------------------------------------------------------------------------
<S>                                <C>           <C>           <C>               <C>           <C>               <C>
Outstanding at beginning
of year .......................    8,440,377     $   3.53      7,903,166       $   3.15      7,682,500    $   2.19

Cancelled during the year......   (1,806,060)        3.73       (397,834)          5.25       (166,000)       3.93


Exercised during the year......           --           --       (147,955)          2.03       (761,584)       2.05

Granted during the year........        5,000         0.90      1,083,000           6.75      1,148,250        8.82
                                  ----------------------------------------------------------------------------------
Outstanding at end of year.....    6,639,317     $   3.48      8,440,377       $   3.53      7,903,166    $   3.15
====================================================================================================================
</TABLE>

         The following table summarizes information about Ashton's stock options
outstanding and exercisable at March 31, 2002:

<TABLE>
<CAPTION>

                                     OPTIONS OUTSTANDING                        OPTIONS EXERCISABLE
  -------------------------------------------------------------------------------------------------------
      RANGE OF                              WEIGHTED          WEIGHTED                       WEIGHTED
  EXERCISE PRICES       OPTIONS        AVERAGE REMAINING       AVERAGE        OPTIONS        AVERAGE
                      OUTSTANDING       CONTRACTUAL LIFE      EXERCISE      EXERCISABLE   EXERCISE PRICE
                                                                PRICE
 --------------------------------------------------------------------------------------------------------
<S>   <C>                  <C>             <C>                   <C>           <C>            <C>
      $0.01 - 1.42             6,000       4.0 Years             $   0.91            200      $     1.00

      $1.43 - 2.85         4,997,067       1.3 Years                 1.88      4,963,067            1.88

      $2.86 - 4.27           375,000       3.9 Years                 3.94        307,000            3.99

      $4.28 - 5.70           125,000       2.8 Years                 5.29         45,000            5.38

      $5.71 - 7.12            65,000       2.6 Years                 6.35         26,000            6.35

      $7.13 - 8.55           100,000       2.8 Years                 8.13         40,000            8.13

      $8.56 - 9.97           216,250       2.5 Years                 9.36        111,250            9.19

     $9.98 - 11.40           655,000       3.1 Years                10.49        637,000           10.49

    $11.41 - 14.25           100,000       4.2 Years                14.25        100,000           14.25
                    -------------------------------------------------------------------------------------
                           6,639,317       1.8 Years             $   3.48      6,229,517      $    3.28
                    =====================================================================================
</TABLE>


         Stock options granted to  non-employees  generally vest immediately and
have a maximum exercise term of five years. We recognize a non-cash compensation
charge for options  granted to  non-employees  in compliance  with SFAS No. 123,
Accounting for Stock-Based Compensation. No Ashton stock options were granted to
third  parties  during  the  years  ended  March  31,  2002 and  2001.  Non-cash
compensation


                                       52
<PAGE>

charges  were  recognized  during the year ended March 31,  2001  related to the
vesting of options that were issued  during the year ended March 31,  2000,  and
which vested over a period of fifteen  months.  During the years ended March 31,
2001 and 2000,  we  recognized  non-cash  compensation  expense of  $38,552  and
$324,252, respectively, for Ashton options granted to non-employees.

SFAS NO. 123 DISCLOSURES

         We have elected to apply APB Opinion No. 25 and related interpretations
in  accounting  for stock  options  issued to  employees.  If we had  elected to
recognize  compensation  cost based on the fair value of the options  granted to
directors  and  employees at the grant date as  prescribed  by SFAS No. 123, net
loss per share would have been  adjusted to the pro forma  amounts  indicated in
the table below:

<TABLE>
<CAPTION>

                                                      AS REPORTED
                               ----------------------------------------------------------
                                             FOR THE YEAR ENDED MARCH 31,
                                       2002                2001              2000
                               ----------------------------------------------------------
<S>                            <C>                   <C>                  <C>
Net loss                       $   (11,755,074)      $  (20,938,349)      $(6,231,648)

Loss per share                 $         (0.29)      $        (0.79)      $     (0.32)
                               ==========================================================

<CAPTION>

                                                       PRO FORMA
                               ----------------------------------------------------------
                                             FOR THE YEAR ENDED MARCH 31,
                                       2002                2001              2000
                               ----------------------------------------------------------
<S>                            <C>                     <C>               <C>
Net loss                       $   (12,878,518)        $  (22,143,274)   $(10,322,983)

Loss per share                 $         (0.28)        $        (0.83)   $      (0.48)
                               ==========================================================
</TABLE>

         The fair value of Ashton  options  granted during the years ended March
31, 2002, 2001 and 2000 was $1,219 and $382,583,  and $5,803,652,  respectively.
The  assumptions  we used to  calculate  the fair  values of  options  issued to
employees during the year ended March 31, 2002 include: (i) a risk-free interest
rate  of  4.7%,  (ii) an  expected  life of five  years,  (iii)  expected  stock
volatility of 10.4%, and (iv) expected stock dividends of zero.

UTTC STOCK OPTION PLAN

         In October 1999,  UTTC's board of directors adopted the 1999 UTTC Stock
Option Plan,  pursuant to which UTTC issued stock  options to its  employees and
third parties. A summary of the status of the UTTC stock options  outstanding as
of March 31, 2002, 2001 and 2000 is as follows:

<TABLE>
<CAPTION>

                                       MARCH 31, 2002               MARCH 31, 2001             MARCH 31, 2000
                                 -----------------------------------------------------------------------------------
                                                  WEIGHTED                     WEIGHTED                  WEIGHTED
                                     OPTIONS       AVERAGE        OPTIONS      AVERAGE       OPTIONS     AVERAGE
                                   OUTSTANDING    EXERCISE      OUTSTANDING    EXERCISE    OUTSTANDING   EXERCISE
                                                    PRICE                       PRICE                     PRICE
                                 -----------------------------------------------------------------------------------
<S>                                   <C>            <C>        <C>             <C>      <C>               <C>
  Outstanding at beginning
  of year.......................      6,709,751      $2.17      6,678,188       $2.14    1,676,250         $1.45

  Cancelled during the year.....     (1,734,563)      2.71       (758,250)         --           --            --

  Exercised during the year.....             --         --              --         --           --            --

  Granted during the year.......             --         --         789,813       2.95    5,001,938          2.37
                                 -----------------------------------------------------------------------------------
  Outstanding at end of year....      4,975,188      $1.99       6,709,751      $2.17    6,678,188         $2.14
                                 ===================================================================================
</TABLE>


                                       53
<PAGE>

         The following  table  summarizes  information  about UTTC stock options
outstanding and exercisable at March 31, 2002:

<TABLE>
<CAPTION>

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

<S>  <C>                   <C>             <C>                 <C>               <C>            <C>
     $1.33-1.50            1,192,500       1.2 years           $1.33             1,192,500      $    1.33

       $2.00               3,288,500       2.8 years            2.00             1,972,400           2.00

       $3.50                 494,188       3.0 years            3.49               290,638           3.48
                      -------------------------------------------------------------------------------------
                           4,975,188       2.5 years           %1.99             3,455,538      $   1.89
                      =====================================================================================
</TABLE>


         UTTC stock options granted to non-employees  generally vest immediately
and have a maximum  exercise  term of five  years.  UTTC  recognized  a non-cash
compensation charge for options granted to third parties in compliance with SFAS
No. 123. No UTTC stock  options were granted to  non-employees  during the years
ended March 31, 2002 and 2001.  Non-cash  compensation  charges were  recognized
during the year ended March 31, 2001 related to the vesting of options that were
issued  during the year ended March 31, 2000,  and which vested over a period of
fifteen months.  During the years ended March 31, 2001 and 2000, UTTC recognized
non-cash  compensation  expense of $1,556 and  $27,117,  respectively,  for UTTC
options granted to non-employees.

         If we had  elected  to  recognize  compensation  cost based on the fair
value of the UTTC options  granted to directors  and employees at the grant date
as prescribed by SFAS No. 123, there would be no effect on the net loss.

13.      BENEFIT PLANS

         We maintain a defined  contribution  plan under  Section  401(k) of the
Internal  Revenue Code covering all  qualified  employees.  Certain  officers of
Ashton serve as trustees of the plan. We may make  discretionary  contributions,
however,  we made no  contributions  during the years ended March 31, 2002, 2001
and 2000.

14.      INCOME TAXES

         We  have  net  operating  loss  carryforwards  at  March  31,  2002  of
approximately $62,178,000, which will expire between 2011 and 2022, available to
reduce future  federal  taxable  income.  Additionally,  the income tax basis of
intangibles and non-qualified  options exceeds the basis for financial reporting
purposes  by  approximately  $8,532,000.  The  carryforwards  and the  temporary
difference  result in a  deferred  tax asset of  approximately  $28,738,000  and
$23,938,000 at March 31, 2002 and 2001, respectively, for which we have provided
a full valuation  allowance due to the uncertainty about the future  realization
of this tax  benefit.  As more fully  disclosed  in Note 19 to the  consolidated
financial statements,  Ashton had a substantial change in ownership as of May 7,
2002.  As such,  we may now be  limited  to the  amount  of net  operating  loss
carryforwards that we use in a particular year to offset future taxable income.


                                       54
<PAGE>

<TABLE>
<CAPTION>

                                                      MARCH 31, 2002         MARCH 31, 2001

        <S>                                         <C>                     <C>
        Net operating loss carryforward.............$ 24,871,000            $  20,071,000

        Basis of intangible asset...................     540,000                  540,000

        Grant of non-qualified options..............   3,327,000                3,327,000

        Valuation allowance......................... (28,738,000)             (23,938,000)
                                                    --------------           -------------
           Deferred tax asset.......................   $      --             $         --
                                                    ==============           =============
        ----------------------------------------------------------------------------------
</TABLE>

         The difference  between the income tax benefit  computed at the federal
statutory  rate and the actual  provision  for income taxes is accounted  for as
follows:

<TABLE>
<CAPTION>

                                                                        YEAR ENDED MARCH 31,
                                                     ----------------------------------------------------
                                                           2002             2001              2000
                                                     ----------------------------------------------------
<S>                                                  <C>                 <C>              <C>
      Tax benefit computed at the federal
           statutory rate of 34%                     $   (4,000,000)     $ (7,119,000)    $ (2,119,000)
      State and local income taxes                         (800,000)
      Permanent difference:
           tax effect of Gomez                                   --                --       (3,586,000)
      Change in valuation allowance                        4,800,000        7,119,000        5,705,000
                                                     ----------------------------------------------------
                                                     $            --     $         --     $         --
                                                     ====================================================
</TABLE>

         Ashton,  UTTC,  REB and Croix filed a  consolidated  federal income tax
return for the years ended March 31, 2001 and 2000, and will file a consolidated
federal  income tax return for the year ended March 31, 2002 during fiscal 2003.
eMC  files  separate  federal  tax  returns.  In 1999,  Ashton  entered  into an
agreement with UTTC and its  subsidiaries  which provides that any member of the
group, which has taxable income, must compensate any other member for the use of
net operating losses and tax credits.

15.      COMMITMENTS, CONTINGENCIES AND SETTLEMENTS

LEASE COMMITMENTS

         On  December   23,  1999,   we  entered  into  a  ten-year   lease  for
approximately 11,000 square feet of office space in Philadelphia,  Pennsylvania.
This location is our corporate headquarters.

         We  lease   approximately   1,675   square  feet  of  office  space  in
Philadelphia, Pennsylvania pursuant to a lease expiring in May 2005. This is the
principal location for our computer  operations.  This lease was entered into on
March 18, 2002,  and replaces a lease for  approximately  10,000  square feet of
office space at the same location, which was terminated.

         The leases are subject to escalation for our share of increases in real
estate  taxes and other  operating  expenses.  Future  minimum  operating  lease
payments under the agreements are as follows:

         Year ending March 31,
                     2003                   $  290,718
                     2004                       288,789
                     2005                       282,268
                     2006                       268,022
                     2007                       270,188
                     Thereafter                 942,696
                                                -------
                  Total                     $ 2,342,681


                                       55
<PAGE>

         Rent expense for the years ended March 31, 2002,  2001 and 2000 totaled
approximately $634,017, $687,557 and $493,993, respectively.

UNASSERTED POTENTIAL CLAIMS

         On May 20, 2002,  Finova filed a motion to add Ashton as a defendant in
the case Finova Capital Corporation v. OptiMark  Technologies,  Inc.,  OptiMark,
Inc and OptiMark Holdings,  Inc., Docket No.:  HUD-L-3884-01,  Superior Court of
New  Jersey--Hudson  County.  Finova  asserts claims arising out of an equipment
lease agreement pursuant to which Finova alleges that OptiMark Technologies, Inc
(now known as OptiMark US Equities, Inc.) agreed to lease certain equipment from
Finova. Finova has made claims in unspecified amounts exceeding $6 million (plus
interest, late charges,  litigation costs and expenses) for, among other things,
fraudulent  conveyance  of certain  assets  comprised,  at least in part, of the
intellectual  property and non-cash assets  acquired by Ashton from  Innovations
pursuant to the Purchase  Agreement.  We cannot  predict  whether Finova will be
successful  in its motion to add Ashton as a  defendant,  nor can we predict the
outcome of the litigation at this time. Pursuant to an indemnification agreement
OptiMark US Equities, Inc. will indemnify Ashton from any claims relating to the
alleged fraudulent conveyance. If Ashton becomes a defendant in this litigation,
is found liable for damages and OptiMark US Equities,  Inc. is unable to fulfill
its obligations under the indemnification  agreement, then such litigation could
have a  material  adverse  impact on our  financial  condition  and  results  of
operations.

         Following  the sale of 2,067,278  shares of our common stock by certain
selling  stockholders  in  May  2001,  pursuant  to  an  effective  registration
statement,  we  became  aware  that the  financial  statements  included  in the
registration statement did not satisfy the requirements of Regulation S-X of the
Securities  and  Exchange   Commission.   Because  the  registration   statement
incorporated  by  reference  our  Annual  Report on Form 10-K for the year ended
March 31,  2000,  rather  than for the year ended March 31,  2001,  as it should
have, the registration  statement did not meet the applicable form  requirements
of a  registration  statement  on Form S-3.  Thus,  the  prospectus  used by the
selling  stockholders  did not meet  the  requirements  of,  and the sale of the
shares was not  properly  registered  pursuant  to the  Securities  Act of 1933.
Consequently,  the purchasers of the common stock from the selling  stockholders
could have the right, for a period of one year from the date of their respective
purchases of common  stock,  to recover from us (i) the purchase  price paid for
their  shares,  plus  interest,  upon tender of their shares to us or (ii) their
losses  measured by the  difference  (plus  interest)  between their  respective
purchase prices and either the value of their shares at the time they sue us or,
if they  have  sold  their  shares at a loss,  the sale  price of their  shares.
Alternatively,  the  purchasers  of the common  stock could have a right to seek
redress  from the  selling  stockholders,  in which case we may have third party
liability to the selling  stockholders.  These refunds or damages could total up
to approximately $2.1 million, plus interest, in the event that investors suffer
a total loss of their investment during this period and seek refunds or damages.

     On April 26,  2002,  we  received a draft  complaint  from  counsel for two
shareholders of UTTC, one of our subsidiaries,  that named as defendants Ashton,
UTTC,  Innovations and specified present and former directors of UTTC. The draft
complaint purports to assert claims arising,  among other things, from purported
pledges by Ashton of UTTC's  intellectual  property  and the  creation  of joint
ventures that are claimed to have used UTTC's intellectual  property,  allegedly
without compensation to UTTC or its shareholders.  Among other claims, the draft
complaint also purports to state claims for breach of fiduciary duty arising out
of offers,  which were not  accepted,  to acquire  the shares of UTTC from these
shareholders at a price that was allegedly too low. To our knowledge,  the draft
complaint has not yet been filed.

     Our  publicly  traded  Warrants  expired on May 2, 2002.  Under the Warrant
Agreement  dated as of May 7, 1996 between  Ashton and North  American  Transfer
Co., as Warrant  Agent,  Ashton was required to notify the Warrant Agent and the
registered  holders of the  Warrants of  specified  adjustments  to the exercise
price of the Warrants and shares  deliverable upon exercise of the Warrants.  We
failed to provide the Warrant  Agent or the  registered  holders of the Warrants
with required  notices of  adjustments  to the exercise price that resulted from
multiple  issuances or deemed issuances of shares of common stock below the then
current market price (as defined in the Warrant  Agreement).  To date, no claims
related to the Warrant Agreement have been asserted.


                                       56
<PAGE>

16.      NET CAPITAL REQUIREMENTS

         As registered broker-dealers, Croix, REB and ATG Trading are subject to
the SEC's uniform net capital rule.  The net capital rule is designed to measure
the general  integrity  and  liquidity of a  broker-dealer  and requires that at
least a minimum part of its assets be kept in a relatively liquid form.

         Both Croix and REB are  required  to  maintain  minimum  net capital of
$5,000. As of March 31, 2002, Croix had net capital of $133,089,  which exceeded
minimum net capital  requirements  by $128,089,  REB had net capital of $16,362,
which exceeded  minimum net capital  requirements by $11,362 and ATG Trading had
net capital of $41,248,  which  exceeded  minimum  net capital  requirements  by
$40,976.  On May 31, 2002,  Ashton's Board authorized a loan of up to $1 million
to UTTC for the express purpose of increasing the capital of Croix.  Thereafter,
Ashton made a $1 million loan to UTTC,  and UTTC, in turn,  made a  subordinated
loan to Croix of $1 million.  The NASD  approved  the form of the Croix loan for
net capital purposes on June 15, 2002.  Accordingly,  as of June 15, 2002, Croix
had net capital of $1,161,100,  which exceeded minimum net capital  requirements
by $1,156,100.

         ATG Trading has not  conducted  proprietary  trading  activities  since
December 2001, and as a result,  we  inactivated  its status as a  broker-dealer
effective January 7, 2002, thereby eliminating its need to maintain net capital.
We plan to  reactivate  ATG Trading and engage in principal  trading  activities
during  the year  ending  March 31,  2003,  at which  time ATG  Trading  will be
required to maintain at least a minimum of $100,000 in net capital.  On June 13,
2002,  Ashton's  Board  authorized  a  subordinated  loan of $1  million  to ATG
Trading.  The PHLX  approved  the form of the ATG  Trading  loan for net capital
purposes to be effective July 1, 2002.

17.      SUMMARIZED QUARTERLY DATA (UNAUDITED)

<TABLE>
<CAPTION>

                                                                     QUARTER ENDED
                                          -------------------------------------------------------------------
                                             MARCH31           DECEMBER 31    SEPTEMBER 30       JUNE 30
                                          -------------------------------------------------------------------
YEAR ENDED MARCH 31, 2002

<S>                                         <C>              <C>              <C>              <C>
Revenues ..............................     $   326,710      $   750,296      $1,206,726       $   205,738

Net loss from continuing operations ...      (1,875,586)      (3,031,012)     (3,539,915)       (3,974,537)

Net income (loss) from discontinued
    operations.........................           5,782           (4,977)         (1,077)             (889)

Gain on disposal of discontinued
    operations.........................          65,870               --         601,267                --

Net loss per share from continuing
    operationsper share from continuing
    operations.........................           (0.03)           (0.06)           (0.13)           (0.14)

Net gain per share from discontinued
    operations.........................              --               --             0.02               --

Net loss per common share .............           (0.03)           (0.06)           (0.11)           (0.14)

YEAR ENDED MARCH 31, 2001

Revenues ..............................     $    90,580      $    50,593      $    37,778      $    46,117

Net loss from continuing operations ...      (4,897,227)      (5,288,311)      (4,096,608)      (3,180,833)

Net loss from discontinued operations .        (954,494)        (837,020)        (517,792)        (286,700)

Loss on disposal of discontinued ......      (3,145,926)              --               --               --
    operations

Net loss per share from continuing                (0.16)           (0.18)           (0.14)           (0.11)
    operations.........................

Net loss per share from discontinued              (0.14)           (0.03)           (0.02)           (0.01)
    operations.........................

Net loss per common share .............           (0.30)           (0.21)           (0.16)           (0.12)
-----------------------------------------------------------------------------------------------------------


                                       57
<PAGE>

YEAR ENDED MARCH 31, 2000

Revenues ..............................     $       518      $ 2,012,693      $1,057,508       $   798,365

Net loss from continuing operations ...         123,603        1,115,292)     (4,695,074)       (2,775,474)

Net income (loss) from discontinued
    operations.........................            0.00             0.03           (0.23)            (0.13)
-----------------------------------------------------------------------------------------------------------
</TABLE>

18.      SEGMENT INFORMATION

         Ashton, UTTC and its subsidiaries,  ATG Trading,  Ashton Canada and KAA
each contributes to our trading systems business.

         eMC,  previously  a  separate  segment,  is  reflected   separately  as
discontinued operations in our consolidated financial statements.

         Gomez, Inc. was previously one of our majority-owned subsidiaries.  Due
to a private  placement by Gomez in December 1999, our equity  interest in Gomez
decreased to less than 50%. We then began accounting for our investment in Gomez
under the equity method of accounting, rather than consolidating Gomez's results
of operations within our results. The results of Gomez's operations are included
in our consolidated  financial  statements for the year ended March 31, 1999 and
the nine months  ended  December  31,  1999,  and are  classified  as a separate
segment.

<TABLE>
<CAPTION>

YEAR ENDED                             TRADING            DISCONTINUED
MARCH 31, 2002                         SYSTEMS             OPERATIONS           GOMEZ                 TOTAL
-------------------------------- --------------------    ----------------    --------------    --------------
<S>                                 <C>                   <C>                <C>              <C>
Revenues                            $   2,489,470         $          --      $    --          $ 2,489,470
Interest income                           105,514                    --           --              105,514
Depreciation and
     amortization                         914,728                    --           --              914,728
Non--cash compensation
     charges                                   --                    --           --                   --
Other income (expense)                   (950,365)                   --           --             (950,365)
Loss on trading activities               (375,480)                   --           --             (375,480)
Equity  in  income (loss)  of                                        --           --
    affiliates                            172,373                                                 172,373
Loss from continuing
     operations                       (12,421,050)                   --           --          (12,421,050)
Loss from discontinued
     operations of eMC                         --                (1,161)          --               (1,161)
Gain (loss) from disposal of
     discontinued operations                   --               667,137           --              667,137

Current assets                            783,910                    --           --              783,910
Total assets                            2,786,631                    --           --            2,786,631
Total stockholders'                                                  --           --
    (deficiency) equity                (4,284,276)                                             (4,284,276)




                                       58
<PAGE>


YEAR ENDED                             TRADING            DISCONTINUED
MARCH 31, 2001                         SYSTEMS             OPERATIONS            GOMEZ             TOTAL
-------------------------------- --------------------    ----------------    --------------    --------------

Revenues                            $     225,068         $          -       $       -        $    225,068
Interest income                         1,135,078                    -               -           1,135,078
Depreciation and
     amortization                         700,484                    -               -             700,484
Non-cash compensation
     charges                               40,108                    -               -              40,108
Other income/expense                      300,809                    -               -             300,809
Loss on trading activities               (903,541)                   -               -            (903,541)
Equity in loss of affiliates           (1,963,976)                   -               -          (1,963,976)
Loss from continuing

     operations                       (15,196,417)                   -               -         (15,196,417)
Loss from discontinued
     operations of eMC                          -           (2,596,006)              -          (2,596,006)
Loss from disposal of
     discontinued operations                    -           (3,145,916)              -          (3,145,916)

Current assets                          8,498,268                    -               -           8,498,268
Total assets                           13,065,778                    -               -          13,065,778
Total stockholders' equity              2,898,089                    -               -           2,898,089



YEAR ENDED                             TRADING            DISCONTINUED

MARCH 31, 2000                         SYSTEMS             OPERATIONS            GOMEZ             TOTAL
-------------------------------- --------------------    ----------------    --------------    --------------

Revenues                            $       32,135        $            -     $ 3,836,949      $   3,869,084
Interest income                          1,075,094                     -          94,816          1,169,910
Depreciation and
     amortization                          381,785                     -         334,171            715,956
Non-cash compensation
     charges                               351,369                     -               -            351,369
Other income/expense                     (416,632)                     -               -           (416,632)
Equity in loss of affiliates                90,508                     -               -             90,508
Loss from continuing

     operations                          (859,333)                     -      (5,372,315)        (6,231,648)

Current assets                          27,839,570                     -               -         27,839,570
Total assets                            31,023,911                     -               -         31,023,911
Total stockholders' equity              17,162,607                     -               -         17,162,607

</TABLE>

19.      SUBSEQUENT EVENTS

INVESTMENT BY OPTIMARK INNOVATIONS, INC.

         On May 7,  2002,  Ashton  and  OptiMark  Innovations,  Inc.  closed the
transactions  contemplated by the securities  purchase  agreement by and between
Ashton and Innovations dated as of February 4, 2002 (as amended on March 6, 2002
and May 3, 2002).  Pursuant to the  purchase  agreement,  we issued  608,707,567
shares of Ashton common stock to Innovations.  In consideration  for the shares,
Innovations paid us $7,272,727 in cash and transferred intellectual property and
other non-cash assets to us.



                                       59
<PAGE>

         In addition,  Innovations  loaned us $2,727,273  in cash.  The loan was
evidenced by a senior  secured  convertible  note executed by Ashton in favor of
Innovations.  The note accrues  interest at a rate of 7.5% per annum and matures
in May 2007. The note is convertible at any time at rate of $0.051583 per share,
subject to customary anti-dilution adjustments and is currently 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 in UTTC, ATG Trading, eMC, Ashton Canada, Croix, and REB.

         Also on May 7, 2002, Ashton and Innovations  entered into an investors'
rights agreement. Pursuant to the rights agreement, Innovations acquired certain
rights,  including  but not limited to: (i)  preemptive  rights to subscribe for
future sales by Ashton of Ashton  common  stock,  (ii)  registration  rights and
(iii)  the  right to  designate  a number  of  directors  to  Ashton's  board of
directors  proportionate  to  Innovations'  ownership of Ashton common stock. In
addition,  so long as Innovations  holds at least 20% of Ashton's  common stock,
Ashton has agreed that it will not take  certain  actions  without  Innovations'
prior approval,  including,  among other things,  (i) the issuance of additional
Ashton common stock (with certain exceptions), (ii) the repurchase or redemption
of its securities, (iii) a merger, consolidation or sale of substantially all of
its assets or (iv) engaging in any business other than the business it currently
engages  in.  So long as  Innovations  has the  right to  appoint  at least  one
director, certain actions by Ashton's board of directors cannot be taken without
the approval of at least one of the  directors  appointed by  Innovations.  Such
actions include,  among other things,  making capital  expenditures in excess of
certain  limits,  acquisitions  or sales of  assets  with a value in  excess  of
$50,000  within any fiscal  year,  incurring  debt in excess of  $100,000  (with
certain exceptions) and repurchasing or redeeming Ashton's securities.

         As  of  May  7,  2002,  Innovations  owned  approximately  88%  of  the
outstanding  shares of Ashton  common  stock.  Assuming  conversion  of the Note
issued to Innovations,  Innovations would own approximately 89% of Ashton common
stock,  calculated as of May 7, 2002. As long as Innovations  owns a majority of
our outstanding common stock, Innovations will be able to elect our entire board
of directors and control the outcome of any other matter  submitted to a vote of
our stockholders. Such matters could include:

     o   the  composition of our board of directors and,  through it,  decisions
         with respect to our business  direction  and  policies,  including  the
         appointment and removal of officers;

     o   any   determinations   with  respect  to  mergers  or  other   business
         combinations;

     o   acquisition  or  disposition  of assets;

     o   our capital structure;

     o   payment of dividends on our common  stock;  and

     o   other aspects of our business direction and policies.

         On April 30,  2002,  OptiMark  Innovations  Inc.  agreed to lend Ashton
$300,000 to be credited  against the purchase  price of the Ashton  common stock
that was purchased pursuant to the securities  purchase agreement by and between
Ashton and Innovations  dated as of February 4, 2002.  Additionally on April 30,
2002,  Ashton agreed to lend OptiMark,  Inc., the parent company of Innovations,
$200,000 to be credited at the closing  against  reimbursable  expenses  owed by
Ashton pursuant to the securities  purchase agreement with Innovations.  Each of
the notes accrued interest at a rate of 10%, and was satisfied on May 7, 2002 at
the closing of the securities purchase agreement with Innovations.

RGC BRIDGE LOAN AND EXCHANGE AGREEMENT

         On April 11,  2002,  RGC  International  Investors,  LDC agreed to lend
Ashton up to $250,000,  repayable  upon the closing of the  securities  purchase
agreement with OptiMark Innovations.  The loan


                                       60
<PAGE>

accrued  interest at a rate of 15% and was secured by a blanket,  first priority
lien on all assets of Ashton. Ashton borrowed the entire $250,000 in April 2002,
which it repaid on May 7, 2002.

         On May 7, 2002,  Ashton  entered into a securities  exchange  agreement
with RGC pursuant to which RGC exchanged its 9% secured  convertible  note for a
four-year, 7.5% non-convertible zero-coupon senior secured note in the principal
amount of  $4,751,876  million  and a  five-year  warrant to  purchase 9 million
shares of Ashton common stock at an exercise price of $0.0448 per share, subject
to  customary  anti-dilution  adjustments.  The  exchange  note is  secured by a
blanket,  first  priority  lien on all  assets  of  Ashton,  including,  without
limitation,  Ashton's and UTTC's equity  interests in each of ATG Trading,  eMC,
Ashton Canada, Croix, REB, and Next Exchange.

         Ashton may redeem the  exchange  note at any time,  in whole but not in
part,  for an amount  equal to: 30% of the  principal  amount  thereof  plus all
accrued and unpaid  interest in year one; 53.3% of the principal  amount thereof
plus all accrued and unpaid interest in year two; 76.6% of the principal  amount
thereof  plus all  accrued and unpaid  interest  in year three;  and 100% of the
principal amount thereof plus all accrued and unpaid interest thereafter.

         The warrant is immediately  exercisable as to 2,250,000 shares, becomes
exercisable as to an additional  2,250,000 shares on the 180th day and the 270th
day after the date of the warrant and becomes  exercisable  in full on the 360th
day after the date of the warrant.  In addition the warrant becomes  immediately
exercisable in full in the event of a change of control of Ashton,  as such term
is defined in the warrant agreement.  In no event,  however,  is RGC entitled to
exercise and purchase  shares of Ashton  common stock in excess of the number of
shares of common stock which would result in RGC's beneficially owning more than
4.9% of the outstanding shares of Ashton common stock.

INTERCREDITOR, SUBORDINATION AND STANDSTILL AGREEMENT

         On May 7, 2002 and in connection  with the closing of the  transactions
contemplated  by the purchase  agreement  with  Innovations  and the  securities
exchange agreement with RGC, Ashton,  UTTC, RGC and Innovations  entered into an
intercreditor,   subordination  and  standstill   agreement   memorializing  the
agreements  of the  parties as to the  priority  of payment  and  security  with
respect  to the  obligations  arising  under  the  note and the  exchange  note,
respectively, and the rights and remedies of Innovations and RGC with respect to
such obligations.

SEPARATION AGREEMENT WITH FREDERIC RITTEREISER

         On April 15, 2002, we entered into a separation agreement with Frederic
Rittereiser that became  effective as of May 7, 2002. As  consideration  for Mr.
Rittereiser's  resignation,  release  of claims and  on-going  non-solicitation,
non-competition and non-disclosure obligations,  Mr. Rittereiser received: (i) a
$100,000 cash payment,  (ii) expenses  incurred by Mr.  Rittereiser from January
18, 2002  through May 7, 2002  totaling  $6,000 and (iii) 4.0 million  shares of
Ashton common stock to be registered with the first registration statement filed
by Ashton after effective date. In addition,  Mr. Rittereiser will receive (i) a
$50,000  payment  within  one year of the  effective  date  and (ii)  healthcare
insurance  paid by  Ashton  for one  year  following  the  effective  date.  Mr.
Rittereiser  waived his right to an  extension  of the  exercise  period for his
vested non-qualified options to purchase Ashton common stock.

FINAL ARBITRATION AWARD

         On April 30, 2002,  Ashton  entered into a final  settlement  agreement
with  Matthew  Saltzman,  the former  President of eMC, in  connection  with the
arbitration  award in the  amount of  $510,750  granted to Mr.  Saltzman  by the
American   Arbitration   Association  on  January  14,  2002.  Pursuant  to  the
settlement, we agreed to pay an aggregate of $200,000 cash, issue 400,000 shares
of common stock, and grant certain rights related to eMC to satisfy the award in
its entirety. We paid an initial payment of $50,000 in February 2002. We made an
additional  payment of $100,000 and issued 400,000 shares of Ashton common stock
on May 7,  2002.  Pursuant  to the  final  settlement  agreement  we will pay an
additional payment of $50,000 together with interest accrued at a rate of 9% per
annum on or before May 7, 2002. For such consideration,


                                       61
<PAGE>

Mr.  Saltzman  executed a release and waiver of all claims against Ashton or any
of its  subsidiaries or affiliates,  including,  without  limitation,  claims in
connection with the arbitration.  We have accrued $266,000 related to the unpaid
portion of the settlement as of March 31, 2002.

PURCHASE OF KAA SHARES BY HK WEAVER GROUP, INC.

         On January 30, 2002,  Ashton and HK Weaver Group,  Inc. entered into an
"Agreement  For Sale And Purchase Of Shares in respect of the shares in Kingsway
ATG Asia  Limited."  Pursuant to the  agreement,  Ashton has sold all of its KAA
shares to HK Weaver in exchange for a HK$23,400,000  zero-coupon  note issued to
Ashton by HK Weaver,  effective as of May 7, 2002. The note is convertible  into
HK Weaver common stock upon an IPO of HK Weaver and listing of such stock on the
Growth  Enterprise  Market  (GEM)  of the  Stock  Exchange  of Hong  Kong.  Upon
conversion of the note, Ashton shall receive HK Weaver shares equal to the total
principal  amount of the note  divided by the IPO  price.  Such  shares  will be
subject to a lockup  for 18 months  from their  issuance  date.  In the event of
certain  defaults  identified in the note  instrument or should HK Weaver shares
not be listed on GEM by January 30, 2003,  Ashton's  sole  recourse is to redeem
the note and receive the return of its KAA shares.

SPECIAL MEETING OF STOCKHOLDERS

         At a  special  meeting  of  stockholders  held on April 18,  2002,  our
stockholders   approved  proposals  to  (i)  amend  the  Ashton  certificate  of
incorporation to increase our authorized common stock from 100 million shares to
one billion  shares and (ii) amend the Ashton  certificate of  incorporation  to
define our interest and expectancy in specified business opportunities.

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

         None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information  with  respect to this item will be  contained in the Proxy
Statement for the 2002 Annual  Meeting of  Stockholders,  which is  incorporated
herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

         Information  with  respect to this item will be  contained in the Proxy
Statement for the 2002 Annual  Meeting of  Stockholders,  which is  incorporated
herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information  with  respect to this item will be  contained in the Proxy
Statement for the 2002 Annual  Meeting of  Stockholders,  which is  incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information  with  respect to this item will be  contained in the Proxy
Statement for the 2002 Annual  Meeting of  Stockholders,  which is  incorporated
herein by reference.



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<PAGE>


PART IV

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

(A)      EXHIBITS

EXHIBIT #                           DESCRIPTION*

2        Agreement  and Plan of  Reorganization,  dated as of October 25,  1995,
         among Ashton, Universal Trading Technologies Corp. ("UTTC"),  Robert A.
         Eprile ("Eprile"),  David N. Rosensaft ("Rosensaft"),  The Dover Group,
         Inc. ("Dover") and Medford Financial Inc. (1)

3.1(a)   Certificate of Incorporation of Ashton filed February 16, 1994. (1)

3.1(b)   Certificate of Amendment of Ashton filed October 27, 1995. (1)

3.1(c)   Certificate of Amendment of Ashton filed December 7, 1995. (1)

3.1(d)   Certificate of Amendment of Ashton filed February 1996. (1)

3.1(e)   Certificate of Amendment of Ashton filed October 17, 2001. (10)

3.1(f)   Certificate of Amendment of Ashton filed April 18, 2002.

3.1(g)   Certificate of Designation  for Series B Convertible  Preferred  Stock.
         (2)

3.1(h)   Certificate  of Correction to Certificate of Designation of Preferences
         and Rights of the Series A Cumulative PIK Preferred Stock. (3)

3.1(i)   Certificate  of Correction to Certificate of Designation of Preferences
         and Rights of the Series B Cumulative Preferred Stock. (3)

3.1(j)   Certificate  of  Increase  to  Authorized  Number of Shares of Series B
         Cumulative Preferred Stock. (3)

3.1(k)   Certificate of Retirement of Series A Cumulative  PIK Preferred  Stock,
         Certificate  of  Retirement  of Series C  Cumulative  Preferred  Stock,
         Certificate of Retirement of Series D Cumulative  Preferred  Stock, and
         Certificate of Retirement of Series E Cumulative Preferred Stock. (3)

3.1(l)   Certificate of Designation for UTTC(TM)Series TK Convertible  Preferred
         Stock. (4)

3.1(m)   UTTC(TM)Certificate  of Designation for Series KW Convertible Preferred
         Stock. (9)

3.1(n)   Certificate  of Correction of the  Certificate  of  Designation  of the
         Series  A  Convertible  PIK  Preferred  Stock,   Series  C  Convertible
         Preferred  Stock,  Series D  Convertible  Preferred  Stock and Series E
         Convertible Preferred Stock

3.2      The Ashton  Technology Group, Inc. Bylaws, as Amended and Restated June
         20, 2000. (10)

4.0      Specimen of Common Stock. (1)

4.1      Form of  Representative's  Warrant  Agreement  (including  Specimen  of
         Redeemable Common Stock Purchase Warrant). (1)



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<PAGE>

EXHIBIT #                           DESCRIPTION*

4.2      Form of Warrant  Agreement  (including  Specimen of  Redeemable  Common
         Stock Purchase Warrant). (1)

4.3      Certificate  of  Designations,  Preferences,  and  Rights  of  Series F
         Convertible Preferred Stock. (5)

4.4      Series F Preferred Stock Purchase Warrant. (5)

4.5      Certificate of Retirement of Series F Convertible Preferred Stock

4.6      Securities  Purchase  Agreement,  dated as of February 4, 2002,  by and
         between The Ashton Technology Group, Inc. and OptiMark Innovations Inc.
         (13)

4.7      Amendment No. 1 to Securities Purchase Agreement,  dated as of March 6,
         2002,  by and between The Ashton  Technology  Group,  Inc. and OptiMark
         Innovations Inc.(14)

4.8      Amendment No. 2 to Securities  Purchase  Agreement,  dated as of May 3,
         2002,  by and between The Ashton  Technology  Group,  Inc. and OptiMark
         Innovations Inc.(14)

4.9      Investors'  Rights Agreement dated as of May 3, 2002 by and between The
         Ashton Technology Group, Inc. and OptiMark Innovations Inc. (14)

4.10     Senior Secured  Convertible Note of The Ashton  Technology  Group, Inc.
         issued in favor of OptiMark Innovations, Inc., dated as of May 3, 2002.
         (14)

4.11     Securities  Exchange  Agreement  dated as of May 3, 2002 by and between
         The Ashton Technology Group, Inc. and RGC International Investors, LDC.
         (14)

4.12     7.5% Senior Secured Note of The Ashton Technology Group, Inc. issued in
         favor of RGC  International  Investors,  LDC,  dated as of May 3, 2002.
         (14)

4.13     Intercreditor,  Subordination and Standstill Agreement, dated as of May
         3,  2002,  by and  among RGC  International  Investors,  LDC,  OptiMark
         Innovations  Inc.,  The Ashton  Technology  Group,  Inc. and  Universal
         Trading Technologies Corporation. (14)

4.14     Non-competition  Agreement,  dated as of May 3, 2002,  by and among The
         Ashton Technology Group,  Inc.,  OptiMark  Innovations Inc.,  OptiMark,
         Inc. and OptiMark Holdings, Inc.(14)

4.15     Stock Purchase Warrant of The Ashton  Technology  Group, Inc. issued in
         favor of RGC International Investors, LDC. (14)

4.16     Indemnification  Agreement, dated as of May 3, 2002, by and between The
         Ashton  Technology  Group,  Inc. and OptiMark US Equities,  Inc. (f/k/a
         OptiMark Technologies, Inc.). (14)

4.17     Secured  Convertible Note by The Ashton  Technology  Group, Inc. to RGC
         International Investors, LDC dated July 13, 2001. (11)

4.18     Registration Rights Agreement between The Ashton Technology Group, Inc.
         and RGC International Investors, LDC dated July 13, 2001. (11)

4.19     Securities Exchange Agreement between The Ashton Technology Group, Inc.
         and RGC International Investors, LDC dated July 13, 2001. (11)

4.20     Agreement  for Sale and  Purchase of Shares in Respect of the Shares of
         Kingsway ATG Asia Limited.



                                       64
<PAGE>


EXHIBIT #                           DESCRIPTION*

4.21     Letter Loan Agreement by and between RGC International Investors,  LDC,
         Ashton and UTTC

4.22     Short-term  Bridging  Loan--Principal  sum of US$  500,000  between The
         Ashton Technology Group, Inc. and HK Weaver Group Limited,dated January
         30, 2002. (13)

4.23     Share Mortgage between The Ashton  Technology Group, Inc. and HK Weaver
         Group Limited, dated January 30, 2002.

10.1     Joint  Venture  Agreement by and between The Ashton  Technology  Group,
         Inc. and Kingsway  Electronic  Services,  Ltd. dated as of December 16,
         1999. (4)

10.2     Unanimous  Shareholder  Agreement  between The Ashton Technology Group,
         Inc., 3690822 Canada,  Inc. and Ashton Technology Canada, Inc. dated as
         of December 20, 1999. (4)

10.3     Tax Allocation Agreement by and among The Ashton Technology Group, Inc.
         and UTTC(TM)dated as of October 27, 1999. (4)

10.4     Management Services Agreement between The Ashton Technology Group, Inc.
         and UTTC(TM)dated as of October 27, 1999. (4)

10.5     Form of Stock Purchase K Warrants. (4)

10.6     Lease Agreement  between The Ashton  Technology  Group, Inc. and Eleven
         Colonial Penn Plaza  Associates for 11 Penn Center,  Philadelphia,  PA.
         (9)

10.7     Toronto Stock Exchange Integration Agreement (9)

10.8     Employment Agreement, effective as of September 1, 2000, by and between
         The Ashton  Technology  Group,  Inc.,  Universal  Trading  Technologies
         Corporation and Frederic W. Rittereiser. (6)

10.9     Operating  Agreement  between and among ATG  Trading,  LLC,  The Ashton
         Technology Group, Inc. and Thomas L. Rittereiser dated as of August 21,
         2000. (7)

10.10    Convertible  Loan  Agreement  between  and  among  TeamVest,  Inc.  and
         Electronic Market Center, Inc. dated as of August 9, 2000. (7)

10.11    TeamVest,  Inc. Convertible Promissory Note dated as of August 9, 2000.
         (7)

10.12    Operating Agreement between and among TeamVest, Inc., Electronic Market
         Center, Inc. and E-Trustco.com, Inc. dated as of August 9, 2000. (7)

10.13    Lease  Agreement   between  The  Ashton   Technology  Group,  Inc.  and
         Electronic Data Systems dated as of August 1, 2000. (7)

10.14    Confirmatory  Agreement  between The Ashton  Technology Group, Inc. and
         Electronic Market Center, Inc., dated as of August 1, 2000. (7)

10.15    Common Stock Purchase Agreement,  dated as of February 5, 2001, between
         The Ashton Technology Group, Inc. and CALP II Limited Partnership. (8)

10.16    Sub-Sublease  Agreement  between  UTTC(TM)and  The  Philadelphia  Stock
         Exchange for 1900 Market St., Philadelphia, PA.



                                       65
<PAGE>


EXHIBIT #                           DESCRIPTION*

10.17    Sublease  Agreement  between  Ashton and The  Northwestern  Mutual Life
         Insurance Company for 1114 Avenue of the Americas, New York, NY

10.18    Amendment,  effective  September 1, 2001,  by and between  UTTC,  Dover
         Group,  Inc., The Ashton  Technology  Group,  Inc. and the Philadelphia
         Stock Exchange, Inc. (12)

10.19    Separation  Agreement  and  Release  dated as of April 15,  2002 by and
         between The Ashton  Technology  Group, Inc. and Fredric W. Rittereiser.
         (14)

10.20    First Amended and Restated  Securities  Purchase  Agreement between The
         Ashton  Technology  Group,  Inc. and Jameson Drive LLC,  dated July 10,
         2001 (15)

10.21    Form of Warrant issued by The Ashton  Technology Group, Inc. to Jameson
         Drive, LLC dated July 10, 2001 (15)

10.22    Agreement  between The Ashton  Technology Group, Inc. and Jameson Drive
         LLC, dated July 10, 2001. (15)

10.23    Promissory Note in favor of Optimark Innovations, Inc., dated April 30,
         2002

10.24    Promissory Note in favor of The Ashton  Technology  Group,  Inc., dated
         April 30, 2002.

10.25    Promissory Note in favor of The Ashton  Technology  Group,  Inc., dated
         April 30, 2002.

21       Subsidiaries

23       Independent Auditor's Consent


*        Incorporated by reference as indicated in the applicable footnote.

(1)      Incorporated  by  reference  to the  Company's  Form SB-2  Registration
         Statement No. 33-1182.
(2)      Incorporated  by reference  to Form 10-KSB,  for the period ended March
         31, 1998.
(3)      Incorporated  by reference to Form 10-Q, for the period ended September
         30, 1999.
(4)      Incorporated  by reference to Form 10-Q,  for the period ended December
         31, 1999.
(5)      Incorporated by reference to Form 8-K, dated August 24, 1999.
(6)      Incorporated  by reference to Form 10-Q,  for the period ended June 30,
         2000.
(7)      Incorporated  by reference to Form 10-Q, for the period ended September
         30, 2000.
(8)      Incorporated by reference to Form S-3, dated May 22, 2001.
(9)      Incorporated  by reference to Form 10-K, for the period ended March 31,
         2000
(10)     Incorporated  by reference to Form 10-K, for the period ended March 31,
         2001
(11)     Incorporated  by reference to Form 10-Q,  for the period ended June 30,
         2001
(12)     Incorporated  by reference to Form 10-Q, for the period ended September
         30, 2001
(13)     Incorporated by reference to Form 8-K, dated January 30, 2002
(14)     Incorporated by reference to Form 8-K, dated May 7, 2002
(15)     Incorporated by reference to Form S-2, dated July 19, 2001

(B)      REPORTS ON FORM 8-K

1.       Form 8-K dated January 30, 2002.
2.       Form 8-K/A dated March 15, 2002.



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<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 as of July 1, 2002.

                                               THE ASHTON TECHNOLOGY GROUP, INC.

                                               By: /s/ Robert J. Warshaw
                                                   -----------------------------
                                                   Robert J. Warshaw
                                                   Chief Executive Officer


                                               By: /s/ James S. Pak
                                                   -----------------------------
                                                   James S. Pak
                                                   Chief Financial Officer

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

<TABLE>
<CAPTION>

                      SIGNATURE                        TITLE                           DATE

<S>                                                <C>                              <C>
            /s/ Donald E. Nickelson                Director                         July 1, 2002
            -----------------------
             Donald E. Nickelson

            /s/ James R. Boris                     Director                         July 1, 2002
            -----------------------
             James R. Boris

                                                   Director                         July 1, 2002
            -----------------------
             Ronald D. Fisher


             /s/ Jonathan F. Foster                Director                         July 1, 2002
            -----------------------
             Jonathan F. Foster

                                                   Director                         July 1, 2002
            -----------------------
             Roy S. Neff


             /s/ Trevor B. Price                   Director and Chief Operating     July 1, 2002
            -----------------------                Officer
             Trevor B. Price

             /s/ Robert J. Warshaw                 Director and Chief Executive     July 1, 2002
            -----------------------                Officer) Principal Executive
             Robert J. Warshaw                     Officer)


                                       67
<PAGE>

             /s/ Fred S. Weingard                  Director and Chief Technology    July 1, 2002
            -----------------------                Officer
             Fred S. Weingard

             /s/ Jennifer L. Andrews               Principal Accounting Officer     July 1, 2002
            -----------------------
             Jennifer L. Andrews

</TABLE>