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

--------------------------------------------------------------------------------
                                   FORM 10-QSB
--------------------------------------------------------------------------------

(Mark One)
[X] Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange
    Act of 1934

                 For the quarterly period ended October 31, 1999

                                       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:    333-75119

                           onlinetradinginc.com corp.
        (Exact name of small business issuer as specified in its charter)

               Florida                                   65-0607814
     (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                 Identification No.)

                      2700 North Military Trail, Suite 200
                            Boca Raton, Florida 33431
                    (Address of principal executive offices)

                                 (561) 995-1010
              (Registrant's telephone number, including area code)

         Indicate by check mark  whether the  registrant:  (1) 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 ____

         On December 15, 1999 the registrant had 11,476,388  outstanding  shares
of common stock, $0.01 par value.

         Transitional Small Business Disclosure Format (check one):
Yes ____ No __X__
<PAGE>
                           onlinetradinginc.com corp.


                                      INDEX

                                                                            Page
PART I - FINANCIAL INFORMATION

    Item 1.  Financial Statements

         Statements of Operations (unaudited) for the Three and Nine
         Months Ended October 31, 1999 and 1998                                1

         Statements of Financial Condition as of October 31, 1999 (unaudited)
         and January 31, 1999                                                  2

         Statement of Stockholders' Equity (unaudited) for the Nine
         Months Ended October 31, 1999                                         3

         Statements of Cash Flows (unaudited) for the Nine Months Ended
         October 31, 1999 and 1998                                             4

         Notes to the Financial Statements                                   5-8

    Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                      9-13


PART II - OTHER INFORMATION

    Item 2.   Changes in Securities and Use of Proceeds                       14

    Item 4.   Submission of Matters to a Vote of Security Holders             14

    Item 5.   Other Information                                               15

    Item 6.   Exhibits and Reports on Form 8-K                                15

    Signatures                                                                15
<PAGE>
                           onlinetradinginc.com corp.
                            Statements of Operations
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                  Three Months Ended                       Nine Months Ended
                                                                      October 31,                             October 31,
                                                           --------------------------------        ---------------------------------
                                                               1999                1998                1999                1998
                                                           ------------        ------------        ------------        -------------
<S>                                                        <C>                 <C>                 <C>                 <C>
Revenues:
  Commissions ......................................       $  2,092,667        $  1,250,421        $  6,272,161        $  3,707,378
  Investment gains (losses) ........................            331,479              79,485             869,727             (10,288)
  Other revenues ...................................               --                  --               175,000                --
  Interest - revenue sharing .......................            108,909              14,405             246,119              61,808
  Interest and dividends ...........................            234,814               9,905             336,890              29,572
                                                           ------------        ------------        ------------        ------------

          Total Revenues ...........................          2,767,869           1,354,216           7,899,897           3,788,470
                                                           ------------        ------------        ------------        ------------

Expenses:
  Employee compensation and benefits ...............          1,276,917             731,097           3,715,779           2,147,402
  Clearing and other transaction costs .............            554,699             529,758           1,865,029           1,447,099
  Occupancy and administrative .....................            261,005              97,420             594,008             286,424
  Interest expense .................................              5,356               9,441              19,605              27,439
  Depreciation .....................................             14,890               7,368              36,245              22,112
                                                           ------------        ------------        ------------        ------------

          Total Expenses ...........................          2,112,867           1,375,084           6,230,666           3,930,476
                                                           ------------        ------------        ------------        ------------

          Income (loss) before income taxes ........            655,002             (20,868)          1,669,231            (142,006)

Income tax (provision) benefit .....................           (240,120)              8,000            (629,064)             53,530
                                                           ------------        ------------        ------------        ------------

          Net income (loss) ........................       $    414,882        $    (12,868)       $  1,040,167        $    (88,476)
                                                           ============        ============        ============        ============

Earnings Per Share:
  Basic ............................................       $       0.04        $      (0.00)       $       0.11        $      (0.01)
                                                           ============        ============        ============        ============

  Diluted ..........................................       $       0.04        $      (0.00)       $       0.11        $      (0.01)
                                                           ============        ============        ============        ============

  Weighted average common shares
    outstanding - basic ............................         11,476,388           8,888,888           9,877,039           8,745,205
                                                           ============        ============        ============        ============

  Weighted average common shares
   outstanding - diluted ...........................         11,482,334           8,888,888           9,886,304           8,745,205
                                                           ============        ============        ============        ============
</TABLE>













                             See accompanying notes.
                                        1

<PAGE>

                           onlinetradinginc.com corp.
                        Statements of Financial Condition




<TABLE>
<CAPTION>

                                                                                                     As of               As of
                                                                                                ----------------    ----------------
                                                                                                October 31, 1999    January 31, 1999
                                                                                                ----------------    ----------------
                                                                                                   (UNAUDITED)
<S>                                                                                             <C>                 <C>
            ASSETS

Cash and cash equivalents .................................................................     $     17,585,967    $      1,005,944
Receivable from clearing organization .....................................................              361,259             572,433
Other receivables .........................................................................              124,672               6,163
Securities owned, at market value .........................................................              776,943             381,084
Prepaid expenses ..........................................................................               29,404               9,420
Clearing deposit ..........................................................................              100,366                --
Office furniture & equipment, net .........................................................              239,294             136,146
Other Assets ..............................................................................               87,109              43,398
                                                                                                ----------------    ----------------

          TOTAL ASSETS ....................................................................     $     19,305,014    $      2,154,588
                                                                                                ================    ================



                     LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable ..........................................................................     $        175,190    $        163,074
Accrued payroll ...........................................................................              553,540             644,148
Income taxes payable ......................................................................              601,434              38,230
Securities sold but not yet purchased, at market value ....................................              322,913                --
Other current liabilities .................................................................              220,210             141,200
Deferred Income Taxes .....................................................................               17,900              15,400
Subordinated Loans ........................................................................              400,000             525,000
                                                                                                ----------------    ----------------

          TOTAL LIABILITIES ...............................................................            2,291,187           1,527,052
                                                                                                ----------------    ----------------

Stockholders' Equity:
  Preferred  stock, $0.01 par value; 1,000,000 shares authorized; none
    outstanding at October 31, 1999; 300 shares of Series A issued and
    outstanding, January 31, 1999, stated value $1,000, voting,
    stated value $1,000, voting, redeemable at 110% of stated value .......................                 --               300,000
  Common stock, $0.01 par value; 100,000,000 shares authorized;
    issued and outstanding, 11,476,388 shares at October 31, 1999 and
    8,888,888 shares at January 31, 1999 ..................................................              114,763              88,888
  Additional-Paid-In-Capital ..............................................................           15,753,312             103,063
  Retained earnings .......................................................................            1,145,752             135,585
                                                                                                ----------------    ----------------

  Total Stockholders' Equity ..............................................................           17,013,827             627,536
                                                                                                ----------------    ----------------

                  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..............................     $     19,305,014    $      2,154,588
                                                                                                ================    ================
</TABLE>





                             See accompanying notes.
                                        2

<PAGE>
                           onlinetradinginc.com corp.
                  Statement of Changes in Stockholders' Equity
                   For the Nine Months Ended October 31, 1999
                                   (UNAUDITED)









<TABLE>
<CAPTION>
                                           Series A
                                        Preferred Stock                 Common Stock
                                  ----------------------------  ----------------------------
                                                  Amount at                                   Additional
                                     Shares        Stated         Shares       Amount at       Paid-In       Retained
                                     Issued         Value         Issued       Par Value       Capital       Earnings      Totals
                                  ------------    ---------     ----------    ------------    -----------   ----------   -----------
<S>                               <C>             <C>           <C>           <C>             <C>           <C>          <C>

BALANCES, January 31, 1999 ......          300    $ 300,000      8,888,888    $     88,888    $   103,063   $  135,585   $   627,536

Issuance of common stock for cash         --          --         2,587,500          25,875     15,595,149        --       15,621,024

Redemption of preferred stock ...         (300)    (300,000)        --              --             --          (30,000)    (330,000)

Other ...........................         --           --           --              --             55,100        --           55,100

Net income for the nine months
  ended October 31, 1999 ........         --           --           --              --             --        1,040,167     1,040,167
                                    ----------    ---------     -----------    -----------    -----------   ----------   -----------

BALANCES, October 31, 1999 ......         --      $    --       11,476,388    $    114,763    $15,753,312   $1,145,752   $17,013,827
                                    ==========    =========     ==========    ============    ===========   ==========   ===========
</TABLE>

























                             See accompanying notes
                                        3

<PAGE>
                           onlinetradinginc.com corp.
                            Statements of Cash Flows
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                        Nine Months Ended
                                                                                                            October 31,
                                                                                                ------------------------------------
                                                                                                    1999                   1998
                                                                                                ------------           -------------
<S>                                                                                             <C>                    <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) ....................................................................          $  1,040,167           $    (88,476)
Adjustments to reconcile net income (loss) to net cash provided by
  operating activities:
    Depreciation .....................................................................                36,245                 22,112
    Common stock issued for services .................................................                  --                   26,000
    Deferred income taxes ............................................................                 2,500                (54,300)
    Changes in certain assets and liabilities:
      Receivable from clearing organization ..........................................               211,174               (111,006)
      Other receivables ..............................................................              (118,509)                  (441)
      Securities owned at market value ...............................................              (395,859)               353,572
      Prepaid expenses ...............................................................               (19,984)                (8,989)
      Clearing deposit ...............................................................              (100,366)                  --
      Other assets ...................................................................                11,289                   (183)
      Accounts payable ...............................................................                12,116                (15,570)
      Accrued payroll ................................................................               (90,607)               288,904
      Income taxes payable ...........................................................               563,204                   --
      Other current liabilities ......................................................                79,010                149,132
      Securities sold, but not yet purchased, at market value ........................               322,913                198,656
                                                                                                ------------           ------------

      NET CASH PROVIDED BY OPERATING ACTIVITIES ......................................             1,553,293                759,411
                                                                                                ------------           ------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment .................................................              (139,394)                (7,215)
                                                                                                ------------           ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of common stock .............................................            15,621,024                   --
  Proceeds from issuance of common stock warrants ....................................                   100                   --
  Repayment of subordinated loan .....................................................              (125,000)                25,000
  Redemption of preferred stock ......................................................              (330,000)                  --
                                                                                                ------------           ------------

      NET CASH PROVIDED BY FINANCING ACTIVITIES ......................................            15,166,124                 25,000
                                                                                                ------------           ------------

Net Increase in Cash and Cash Equivalents ............................................            16,580,023                777,196

Cash, Beginning of Period ............................................................             1,005,944                218,335
                                                                                                ------------           ------------

Cash, End of Period ..................................................................          $ 17,585,967           $    995,531
                                                                                                ============           ============

Supplemental Disclosure Of Cash Flow Information:
   Cash paid during the period for income taxes ......................................          $     64,140           $       --
                                                                                                ============           ============

   Cash paid during the period for interest ..........................................          $     23,012           $     24,942
                                                                                                ============           ============
</TABLE>

Supplemental Disclosure Of Non-Cash Investing and Financing Activities:
The  Company  acquired  the domain name  "onlinetrading.com"  for cash and stock
options. Accordingly, other assets and additional paid in capital were increased
by $55,000, the value of the stock options.

                             See accompanying notes.
                                        4
<PAGE>
                           onlinetradinginc.com corp.
                          Notes to Financial Statements
              Three and Nine Months Ended October 31, 1999 and 1998
                                   (UNAUDITED)


NOTE 1 - BASIS OF FINANCIAL STATEMENTS

         The accompanying  unaudited financial  statements have been prepared in
accordance with Item 310(b) of Regulation S-B, "Interim  Financial  Statements",
and  accordingly  do not include all  information  and footnotes  required under
generally  accepted  accounting  principles for complete  financial  statements.
Financial  information  as of  January  31 has been  derived  from  the  audited
financial  statements of the Company for the year ended January 31, 1999. In the
opinion of management  all  adjustments,  (consisting  only of normal  recurring
adjustments),  necessary to present fairly the financial  position as of October
31, 1999,  the results of operations for the three and nine months ended October
31, 1999 and 1998 and cash flows for the nine months ended  October 31, 1999 and
1998  have been  included  in the  accompanying  financial  statements.  Certain
reclassifications  have been made to the October 31, 1998 financial  information
to conform to the  presentation  in October 31, 1999.  The results of operations
and cash flows for the interim  periods,  is not  necessarily  indicative of the
results of  operations  or cash flows that may be  expected  for the  respective
year-end.  For  additional  information,  refer to the financial  statements and
footnotes for the year ended  January 31, 1999  included in the  Company's  Form
SB-2 Registration Statement.


NOTE 2 - NET CAPITAL REQUIREMENTS

         The  Company is  subject  to the  Securities  and  Exchange  Commission
uniform net capital rule,  which requires the maintenance of minimal net capital
as defined.  As of October 31, 1999, the Company had net capital of $16,759,442,
which was $16,656,084 in excess of the minimum required.


NOTE 3 - INCOME TAXES

         Income taxes for the interim  periods were computed using the effective
tax rate estimated to be applicable  for the full fiscal year,  which is subject
to an ongoing quarterly review by management.


NOTE 4 - CAPITAL TRANSACTIONS

         A stock  split of  11.1111  shares  for each 10 shares of common  stock
outstanding  was effected on April 3, 1999.  The number of shares issued and all
per share amounts have been adjusted to retroactively  reflect the effect of the
stock split.
         On May 8, 1999 the Company's  articles of incorporation were amended to
increase its authorized $0.01 par value common stock to 100,000,000 shares.
         In July 1999, the Company redeemed all of the currently outstanding
Preferred Stock Series A shares.

                                        5

<PAGE>

                           onlinetradinginc.com corp.
                          Notes to Financial Statements
              Three and Nine Months Ended October 31, 1999 and 1998
                                   (UNAUDITED)


NOTE 5 - PUBLIC OFFERING

         The  Company  completed  its  initial  public  offering  (the "IPO") by
issuing  2,587,500  shares of common stock  (including  337,500  shares to cover
over-allotments),  $0.01 par value (the "IPO Shares") on June 11, 1999.  The IPO
shares were issued in a registered offering pursuant to a Registration Statement
on Form SB-2  (Commission  File No.  333-75119;  effective  date June 11,  1999)
through a syndicate of underwriters, the principal representatives of which were
Werbel-Roth Securities,  Inc.,  onlinetradinginc.com corp., Seaboard Securities,
Inc.,  and The Agean  Group,  Inc.  The IPO shares were  offered and sold by the
underwriters at an initial public  offering price of $7.00 per share,  resulting
in aggregate  gross  offering  proceeds of  $18,112,500  and net proceeds to the
Company of $15,621,024.

         The Company incurred offering expenses in connection with this offering
as follows:

     Underwriting discounts and commissions                $1,539,563
     Expenses paid to/for underwriters                        486,461
     Other offering expenses                                  465,452
                                                           ----------

                                                           $2,491,476
                                                           ==========

         Except  for the  concessions  earned  by the  Company  as a  result  of
participating  in the  underwriters  syndicate,  none of the above expenses were
paid either directly or indirectly to directors,  officers,  general partners of
the Company or its  associates,  or to persons owning more than 10% of any class
of equity security of the Company or to affiliates of the Company.
         In conjunction with the IPO, the Company issued 225,000 warrants to the
underwriters.  The warrants have an exercise  price of $11.55 (165% of the $7.00
IPO price).


NOTE 6 - EARNINGS PER SHARE

         The Company  follows the  provisions  of SFAS No.  128,  "Earnings  Per
Share," which requires companies with complex capital structures or common stock
equivalents to present both basic and diluted  earnings per share ("EPS") on the
face of the income  statement.  Basic EPS is calculated  as income  available to
common  stockholders  divided by the weighted  average  number of common  shares
outstanding  during  the  period.  Diluted  EPS  is  calculated  using  the  "if
converted"  method for convertible  securities and the treasury stock method for
options and warrants as previously  prescribed by  Accounting  Principles  Board
Opinion No. 15, "Earnings Per Share."




                                        6

<PAGE>

                           onlinetradinginc.com corp.
                          Notes to Financial Statements
              Three and Nine Months Ended October 31, 1999 and 1998
                                   (UNAUDITED)


NOTE 6 - EARNINGS PER SHARE (continued)

         The  following  table sets forth the  computation  of basic and diluted
earnings per share:
<TABLE>
<CAPTION>

                                                      Three months ended          Nine months ended
                                                          October 31,                October 31,
                                                   -----------------------    -------------------------
                                                      1999          1998         1999          1998
                                                   -----------   ---------    -----------   -----------
<S>                                                 <C>          <C>          <C>          <C>

Numerator:
Net earnings (loss) available to common
  Shareholders .................................   $   414,882   $ (12,868)   $ 1,040,167   $   (88,476)
                                                   ===========   =========    ===========   ===========
Denominator:
  Denominator for earnings per share - weighted
     average shares outstanding ................    11,476,388   8,888,888      9,877,039     8,745,205
  Effect of dilutive securities - non-employee
     stock options .............................         5,946        --            9,265          --
                                                   -----------   ---------    -----------   -----------

  Denominator for earnings per share - assuming
     dilution - adjusted weighted average shares
     outstanding ...............................    11,482,334   8,888,888      9,886,304     8,745,205
                                                   ===========   =========    ===========   ===========
Basic earnings per share .......................   $      0.04   $   (0.00)   $      0.11   $     (0.01)
                                                   ===========   =========    ===========   ===========
Dilutive earnings per share ....................   $      0.04   $   (0.00)   $      0.11   $     (0.01)
                                                   ===========   =========    ===========   ===========
</TABLE>


NOTE 7 - STOCK OPTIONS

         In 1999,  the Company  adopted the 1999 Stock Option Plan.  Pursuant to
the terms of this  plan,  employees,  non-employee  directors,  consultants  and
independent  contractors  are  eligible to receive  options to  purchase  common
stock.  Up to  1,000,000  shares may be issued  under the plan and will be drawn
from either  authorized but previously  unissued shares or from treasury shares.
Options  granted  under this plan are  granted at the fair  market  value of the
common  stock at the date of grant.  In general,  the  employee  options  become
exercisable  over a five year period beginning June 11, 2000. All options expire
ten years after the date of grant.

         The Company has granted the following options:


                                                       Weighted average
                 Type                       Shares      exercise price
---------------------------------------- ------------- -----------------
Employee                                      295,500     $  7.13
Non-employee director                          40,000     $ 11.68
Non-employee consultants                       40,000     $ 13.50

No stock options have been exercised during the three or nine months ended
October 31, 1999.

                                        7

<PAGE>
                           onlinetradinginc.com corp.
                          Notes to Financial Statements
              Three and Nine Months Ended October 31, 1999 and 1998
                                   (UNAUDITED)


NOTE 8 - COMMITMENTS AND CONTINGENCIES

         Operating Lease
                  On  March 2,  1999,  the  Company  entered  into a three  year
operating  lease  to rent  office  furniture,  office  equipment,  and  computer
hardware.  The  monthly  rental  payment  under the  agreement  is  $6,862  plus
applicable taxes.
                  On June 29, 1999, an amendment to the Company's  current lease
agreement for its office space located in Boca Raton,  Florida became effective.
The  amendment  will add 5,009  square  feet of office  space to its Boca  Raton
location. The space is expected to be completed by January 1, 2000.


NOTE 9 - SUBSEQUENT EVENTS

         On  December 6, 1999,  the  Company  completed  an  acquisition  of the
principal   assets  of  Newport   Discount   Brokerage,   Inc.  for  total  cash
consideration  of $2,682,000 and up to 125,000 shares of common stock. The stock
issuance is contingent upon the acquired assets achieving  certain revenue goals
and the valuation of customer balances one year following  closing.  The Company
will be  filing a Form 8-K by  December  21,  1999 with the  complete  terms and
agreements related to the acquisition.























                                        8

<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATIONS

GENERAL

The following  discussion  and analysis  provides  information  that  management
believes  is  relevant  to an  assessment  and  understanding  of the  level  of
operation and financial condition of onlinetradinginc.com corp. (the "Company").
This discussion should be read with the financial  statements  appearing in Part
I. Item 1 of this  report.  The  results  of  operations  for the three and nine
months ended October 31, 1999 are not necessarily  indicative of the results for
the entire year fiscal year ending January 31, 2000.

The Company is a brokerage  firm  registered  with the  Securities  and Exchange
Commission,  the National  Association  of  Securities  Dealers,  the  Municipal
Securities  Rulemaking  Board, and all state securities  divisions except Hawaii
and Puerto Rico. We are a full-service firm targeting experienced high net worth
investors and small to mid-sized financial institutions including:  hedge funds,
money managers,  mutual funds, registered investment advisors and pension funds.
We specialize in offering equity  execution  systems and services to more active
market participants, and we plan to expand our business by using the Internet to
efficiently  market and  distribute  our  products  and  services to  additional
potential clients.

In June 1999, the Company  completed an initial  public  offering (the "IPO") of
2,587,500  common shares at a price of $7.00 per share which,  including the 15%
over-allotment.   The  Company  received  net  proceeds  from  the  offering  of
$15,621,024.  All of the unused net proceeds  have been  invested in  short-term
commercial paper and money market funds. We will use the proceeds of the initial
public  offering for sales & marketing,  website  enhancement  and  programming,
potential acquisitions,  increasing the Company's net capital, hiring additional
management and personnel,  branch office expansion,  expansion of client service
department, network expansion and upgrades, and Year 2000 readiness and testing.
Based on currently proposed plans and assumptions relating to the implementation
of our business plans,  we believe that the proceeds of this offering,  combined
with cash flow from  operations,  will enable us to fund our planned  operations
for at least the next twelve months.  However, we cannot be assured that we will
realize cash flow from  operations or that cash flow will be sufficient.  If our
plans  change,  our  assumptions  change  or  prove to be  inaccurate  or if the
proceeds of this offering  otherwise  prove to be  insufficient to implement our
business plans, we may find it necessary or desirable to reallocate a portion of
the proceeds,  use proceeds for other  purposes,  seek  additional  financing or
curtail operations.

IMPACT OF THE YEAR 2000

With the new  millenium  approaching,  many  institutions  around  the world are
reviewing and modifying their computer systems to ensure that they are Year 2000
complaint.  The issue, in general terms, is that many existing  computer systems
and micro  processors with data functions use only two digits to identify a year
in the date field with the assumption  that the first two digits of the year are
always "19." Consequently,  on January 1, 2000, computers that are not Year 2000
compliant  may read the year as 1900.  Systems that  calculate,  compare or sort
using the incorrect date may malfunction.


                                        9

<PAGE>
We  believe  we  have   materially   modified  and/or  replaced  our  previously
non-compliant  information  technology systems to properly recognize and utilize
dates beyond  December 31, 1999.  We presently  believe that with  modifications
previously  made  to  existing   software,   conversions  to  new  software  and
replacement  of some  hardware,  the  Year  2000  issue  will be  satisfactorily
resolved in our own  systems.  However,  even if these  changes are  successful,
failures of third party systems,  to which we are  financially or  operationally
linked,  to address  their own  system  problems  could have a material  adverse
impact on us. We have contacted  substantially  all of our third party financial
information  vendors,   telecommunications  supplies  and  our  clearing  broker
requesting  assurances of their compliance.  These third parties have advised us
that their review of their  operating  systems  indicate that they are Year 2000
compliant or will be Year 2000 compliant in a timely manner. Evaluation of these
issues is  continuing  and there is a risk that other  problems,  not  presently
known to the Company,  will be discovered which could present a material risk of
disruption  to  the  Company's   operations  and  result  in  material   adverse
consequences  to the Company.  Furthermore,  there can be no assurance  that the
Company will not  experience  unexpected  delays in  correction of any Year 2000
issues that may be discovered.  Any inability to correct such issues in a timely
manner could cause a material  disruption  of the Company's  business.  The Year
2000 issue could lower demand for the Company's  services  while  increasing the
Company's costs.  These combining  factors,  while not quantified,  could have a
material adverse impact on the Company's financial results.

The Company  continues to evaluate  Year 2000 risks and  corrective  actions and
currently has a contingency  plan if any third parties with which we do business
have any material Year 2000 failures or interruptions in service.

We have budgeted  $100,000 for Year 2000 testing and  monitoring  and have spent
approximately  $25,000  consisting of compensation  for  information  technology
employees,  and acquisition of new computer hardware and software.  However,  no
assurances  can be given that this budgeted  amount will be sufficient as actual
results could differ materially from our plans.

RECENT DEVELOPMENTS

On December 6, 1999,  the Company  completed  an  acquisition  of the  principal
assets of Newport  Discount  Brokerage,  Inc.  for total cash  consideration  of
$2,682,000  and up to 125,000  shares of common  stock.  The stock  issuance  is
contingent  upon the acquired  assets  achieving  certain  revenue goals and the
valuation of customer balances one year following  closing.  The Company will be
filing a Form 8-K by December  21, 1999 with the complete  terms and  agreements
related to the acquisition.

RESULTS OF OPERATIONS

Nine Months Ended October 31, 1999 Compared with Nine Months Ended
 October 31, 1998

REVENUES

         Total Revenues.  The Company's total revenues for the nine months ended
October 31,  1999  increased  109% from  $3,788,470  for the nine  months  ended
October 31, 1998 to $7,899,897 for the nine months ended October 31, 1999.


                                       10

<PAGE>
         Commission  Revenue.  Commission revenue increased  $2,564,783,  or 69%
from $3,707,378 for the nine months ended October 31, 1998 to $6,272,161 for the
nine months  ended  October 31, 1999.  The  increase  was the primary  result of
hiring additional five registered  representatives,  the opening of three branch
offices and the  participation as an underwriter of the Company's initial public
offering.

         Investment Gains (Losses).  Our proprietary  trading profits  increased
$880,015 to $869,727 for the nine months ended October 31, 1999 as compared to a
net loss of $10,288 for the nine months ended October 31, 1998.  During the
quarter ended July 31, 1999, $4,604 representing an investment gain on
commercial paper was recorded as interest and dividends and has been reclassed
to investment gains (losses).

          Other  Revenues.  Other  revenues  increased  by $175,000  which
represents  an  arbitration  settlement received by the Company in July 1999.

         Interest - Revenue  Sharing.  Interest  revenue  sharing  represents  a
revenue  sharing  agreement with our clearing  firm.  Interest  revenue  sharing
increased by $184,311 to $246,119 for the nine months ended  October 31, 1999 as
compared to $61,808 for the nine months ended October 31, 1998. The increase was
due primarily to a change in the percentage of revenue the Company  receives and
the increase of our customer balances being maintained by the clearing firm. The
interest  revenue sharing during the quarter ended April 30, 1999 of $58,598 was
previously recorded in interest and dividends and has been reclassed to interest
revenue  sharing.  The interest revenue sharing during the six months ended July
31, 1998 of $47,403 was  previously  recorded in interest and  dividends and has
been reclassed to interest revenue sharing.

         Interest and Dividends. Interest and dividend income increased $307,318
primarily as a result of the Company's  increased  cash  position  available for
investment and the prevailing interest rates.

EXPENSES

         Total Operating  Expenses.  Total operating  expenses  increased by 59%
from $3,930,476 for the nine months ended October 31, 1998 to $6,230,666 for the
nine months ended October 31, 1999.

         Employee  Compensation and Benefits.  Employee compensation and related
benefits  increased by $1,568,377,  or 73%, from  $2,147,402 for the nine months
ended October 31, 1998 to $3,715,779 for the nine months ended October 31, 1999.
Included in this amount is commissions paid to the Company's brokers and traders
which  increased  $1,611,678 from $582,673 for the nine months ended October 31,
1998 to $2,194,351 for the nine months ended October 31, 1999 as a result of the
increased commission revenue. We anticipate this expense to continue to increase
as we expand our  business  and customer  base.  In  addition,  since the public
offering,  the Company has employed  various customer  support,  back office and
management staff including a general counsel, a chief financial officer, a chief
technical  officer,  and a director of internet  sales.  The  increase in broker
commissions and  compensation for new staff was offset somewhat by a significant
decline in  officer  compensation.  In  addition,  the  percentage  of  employee
compensation  and related  benefits to revenue  decreased  from 57% for the nine
months ended October 31, 1998 to 47% for the nine months ended October 31, 1999.



                                       11

<PAGE>
         Clearing and Other  Transaction  Costs.  Clearing and other transaction
costs represents the cost to execute and clear customer  trades.  These expenses
increased  $417,930,  or 29%,  from  $1,447,099 to $1,865,029 as a result of the
increase in our volume of transactions.  However, these costs decreased from 39%
of  commission  revenue  for the nine  months  ended  October 31, 1998 to 30% of
commission  revenue  for the nine months  ended  October 31, 1999 as a result of
changes in the charges by the clearing firm.

         Occupancy and  Administrative.  Occupancy and  administrative  expenses
consist  primarily  of  advertising,  telephone  and  communication,  rent,  and
professional fees.  Occupancy and administrative  expenses increased $307,584 or
107%,  from  $286,424 for the nine months ended October 31, 1998 to $594,008 for
the nine months ended October 31, 1999.  This increase is the primary  result of
advertising  in  a  national  business  publication,   increased  telephone  and
communication  expenses  due to the  increased  customer  activity,  leasing  of
additional office equipment and furniture to facilitate our expansion, increased
professional   fees  for   auditing  and  legal   services,   and  licenses  and
registrations for the additional offices and registered representatives.

         Interest  Expense.  Interest expense  decreased $7,834 from $27,439 for
the nine months  ended  October  31,  1998 to $19,605 for the nine months  ended
October 31,  1999 as a result of the  repayment  of  $125,000  of the  Company's
subordinated  loans and a decrease in the interest  rate being charged on one of
the Company's subordinated loans.

         Depreciation  Expense.  Depreciation  expense  increased  $14,133  from
$22,112  for the nine  months  ended  October  31,  1998 to $36,245 for the nine
months ended October 31, 1999. The increase is the result of $181,198 additional
fixed assets being acquired since October 31, 1998.

         Income  Taxes.  The Company  recorded a provision  for income  taxes of
$629,064 for the nine months ended October 31, 1999 as compared to an income tax
benefit of $53,530 for the nine months ended  October 31,  1998.  The effective
tax rate was 38% for the nine months ended October 31, 1999 and 1998.

As a result of the above,  operating results improved from a net loss of $88,476
for the nine months ended October 31, 1998 to net income of  $1,040,167  for the
nine months ended October 31, 1999.

LIQUIDITY AND CAPITAL RESOURCES

As  of  October  31,  1999,  the  Company  had  cash  and  cash  equivalents  of
$17,585,967, consisting of money market funds and short term commercial paper as
compared to $995,531 as of October 31, 1998.

Cash provided by operating  activities  was $1,553,293 and $759,411 for the nine
months  ended  October  31,  1999 and 1998.  The  increase  in cash  provided by
operations  was  primarily the result of an increase in the Company's net income
for the nine months ended October 31, 1999.

Cash used in  investing  activities  was $139,394 and $7,215 for the nine months
ended October 31, 1999 and 1998, respectively. The primary purpose of the use of
cash was for the acquisition of office equipment and furniture.

                                       12

<PAGE>
Cash provided by financing  activities was $15,166,124 for the nine months ended
October 31, 1999,  primarily from the initial public offering of the Company, as
compared to $25,000 for the nine months ended October 31, 1998.  During the nine
months ended October 31, 1999, the Company repaid  $125,000 of its  subordinated
debt and retired $330,000, (110% of the stated value), of preferred stock.

As a result,  the Company had a net increase in cash and cash  equivalents of
$16,580,023 and $777,196 for the nine months ended October 31, 1999 and 1998,
respectively.

The Company is subject to the  Securities  and Exchange  Commission  uniform net
capital rule,  which requires the maintenance of minimal net capital as defined.
As of October 31, 1999,  the Company had net capital of  $16,759,442,  which was
$16,656,084  in excess of the  minimum  required.  In  addition,  the  Company's
aggregate  indebtedness  may not exceed 15 times its net capital  (i.e.  its net
capital  ratio).  As of October 31, 1999, the Company had a net capital ratio of
 .09 to 1. The Company remains well within the regulatory required minimums.

The Company currently  anticipates that its available cash resources,  including
the net proceeds from the IPO, and cash flows from operations will be sufficient
to meet its working capital and anticipated capital expenditure requirements for
at  least  the  next  twelve  months.  However,  the  Company  may need to raise
additional  funds in order to  support  more  rapid  expansion,  develop  new or
enhanced  services  and  products,  respond to  competitive  pressures,  acquire
complementary  businesses or  technologies  or take  advantage of  unanticipated
opportunities.


FORWARD LOOKING INFORMATION

Statements  contained in this report regarding the Company's future  operations,
growth strategy,  future  performance and results and the anticipated  liquidity
are forward looking and therefore are subject to certain risks and uncertainties
that could cause actual  results to differ  materially  from those  projected or
suggested in the forward looking  statements,  including those discussed on this
report and in the Company's other filings with the SEC. In addition, any forward
looking information  regarding the operations of the Company will be effected by
management's  ability to: (1) complete its  expansion in a timely  fashion,  (2)
manage and operate its facility as expanded,  (3)  increase  its  marketing  and
sales efforts, (4) maintain its existing customers, and (5) identify and correct
any Y2K problems.  There can be no assurance that the Company will be successful
in  completing  its  proposed  expansion,  or,  if  completed,  that  it will be
successful  in  efficiently  managing its growth in order to maximize  potential
transaction volume.












                                       13

<PAGE>
PART II: OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

On June 11, 1999, the U.S. Securities and Exchange Commission declared effective
the Company's  Registration  Statement on Form SB-2 (SEC File Number 333-75119).
The IPO was completed after the sale of 2,250,000 shares of the Company's common
stock for $7.00 per share.  The managing  underwriter,  Werbel-Roth  Securities,
Inc., also exercised the 15%  over-allotment  option on July 1, 1999 and sold an
additional 337,500 shares.

The Company  incurred  expenses of  $2,491,476  in  connection  with the IPO and
over-allotment.  These expenses  represented  direct  payments to others and not
direct or  indirect  payments  to  directors  or  officers  of the Company or to
persons  owning more than 10% of any class of  securities  of the  Company.  Net
proceeds from the IPO,  including the  over-allotment,  were $15,621,024 and are
being  used  for:  sales  &  marketing,  website  enhancement  and  programming,
potential acquisitions,  increasing the Company's net capital, hiring additional
management and personnel,  branch office expansion,  expansion of client service
department, network expansion and upgrades, and Year 2000 readiness and testing.

From the  effective  date of the IPO  through the date  hereof,  the Company has
utilized a portion of the proceedings as follows:

          Sales & Marketing                                $     50,000
          Website Enhancement & Programming                      70,000
          Increase Net Capital                                1,500,000
          Additional Management & Personnel                      60,000
          Expansion Client Services                              15,000
          Network Expansion & Upgrade                            10,000
          Year 2000 Readiness and Testing                        25,000
          Working Capital                                       120,000
                                                              ---------

          Total use of proceeds to date                      $1,850,000
                                                             ==========

The balance of the net proceeds has been invested in short-term commercial paper
and money  market  funds.  No  payments  from the use of  proceeds  were made to
officers,  directors, or persons owning more than 10% of any class of securities
of the Company.


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

On May 8, 1999, pursuant to Section 607.0704 and Section 607.0821 of the Florida
Business Corporation Act, the Shareholders approved an amendment to the articles
of  incorporation  to increase  its  authorized  $0.01 par value common stock to
100,000,000 shares. The vote in this matter was as follows:

                           For                                8,888,888
                           Against                                 0
                           Abstain                                 0
                           Broker non-votes                        0

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<PAGE>
ITEM 5. OTHER INFORMATION

As previously reported on the quarter ended July 31, 1999 Form 10-QSB,  Benedict
S. Gambino  submitted his letter of  resignation as a director of the Company on
August  5,  1999.   The  letter  stated  that  Mr.  Gambino  found  no  material
inadequacies with the Company, its financial reporting,  regulatory requirements
or management during his tenure on the Board.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.
         Exhibit 11 - Computation of Per Share Earnings (see footnote #6)

         Exhibit 27 - Financial Data Schedule

         Exhibit  99.1 -  Addendum  to Andrew A.  Allen's  Employment  Agreement
         (filed with the Securities  and Exchange  Commission as exhibit 99.1 to
         the  Company's  10-QSB  for  the  quarter  ended  April  30,  1999  and
         incorporated herein by reference)

         Exhibit  99.2 - Addendum to Farshid  Tafazzoli's  Employment  Agreement
         (filed with the Securities  and Exchange  Commission as exhibit 99.2 to
         the  Company's  10-QSB  for  the  quarter  ended  April  30,  1999  and
         incorporated herein by reference)


(b) Form 8-K
         The Company  filed a Form 8-K,  dated  August 6, 1999,  concerning  the
potential acquisition of Newport Discount Brokerage, Inc.


SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

onlinetradinginc.com corp.

December 15, 1999                    By: /s/ Andrew A. Allen
-----------------                    -------------------------------------------
Date                                 Andrew A. Allen, Chief Executive Officer


December 15, 1999                    By: /s/ E. Steven zum Tobel
-----------------                    -------------------------------------------
Date                                 E. Steven zum Tobel, President


December 15, 1999                    By: /s/ Anthony M. Palermo
-----------------                    -------------------------------------------
Date                                 Anthony M. Palermo, Chief Financial Officer

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