##### Table of Contents

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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| | x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| | - | ---------------------------------------------------------------------------------------



| |  | For the quarterly period ended June 30, 2005.
| |  | ---------------------------------------------



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 No: 0-29337



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SUMMIT FINANCIAL SERVICES GROUP, INC.

(Exact name of registrant as specified in its charter)



|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|Florida                                                       |  | 05-0577932                         
|(State or other jurisdiction ofincorporation or organization) |  | (I.R.S. EmployerIdentification No.)



980 North Federal
Highway

Suite 310

Boca Raton, FL 33432

(561) 338-2800

(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices)



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



State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date:



|                                         |  |                                  
|---------------------------------------- |  | ---------------------------------
|Class                                    |  | Outstanding as of August 12, 2005
|Common Stock Par value $0.0001 per share |  | 28,210,075                       



Transitional Small
Business Disclosure Format ̈Yes x No



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##### Table of Contents

SUMMIT FINANCIAL SERVICES GROUP, INC.



INDEX



|                                                                                                            |  |     
|----------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                            |  | Page
|PART I - FINANCIAL INFORMATION                                                                              |  |     
|                                                                                                            | 
|Item 1. Financial Statements                                                                                |  |     
|                                                                                                            | 
|Condensed Consolidated Statement of Financial Condition at June 30, 2005 (unaudited)                        |  | 3   
|                                                                                                            | 
|Condensed Consolidated Statements of Loss for the Three Months ended June 30, 2005 and 2004 (unaudited)     |  | 4   
|                                                                                                            | 
|Condensed Consolidated Statements of Income for the Six Months ended June 30, 2005 and 2004 (unaudited)     |  | 5   
|                                                                                                            | 
|Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2005 and 2004 (unaudited) |  | 6   
|                                                                                                            | 
|Notes to Unaudited Condensed Consolidated Financial Statements                                              |  | 7   
|                                                                                                            | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations               |  | 9   
|                                                                                                            | 
|Item 3. Controls and Procedures                                                                             |  | 13  
|                                                                                                            | 
|PART IIOTHER INFORMATION                                                                                   |  |     
|                                                                                                            | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                         |  | 13  
|                                                                                                            | 
|Item 4. Submission of Matters to a Vote of Security Holders                                                 |  | 13  
|                                                                                                            | 
|Item 6. Exhibits                                                                                            |  | 14  
|                                                                                                            | 
|SIGNATURES                                                                                                  |  | 16  



FORWARD LOOKING
STATEMENTS



This Report contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended (the Securities Act). When used in this Report, the
words may, will, expect, anticipate, continue, estimate, project or intend and similar expressions identify forward-looking statements regarding events,
conditions and financial trends in connection with our future plan of operations, business strategy, operating results and financial position. Discussions containing such forward-looking statements may be found in Managements Discussion
and Analysis of Financial Condition and Results of Operations. Current shareholders and prospective investors are cautioned that any forward-looking statements are not guarantees of future performance. Such forward-looking statements by their
nature involve substantial risks and uncertainties, certain of which are beyond the Companys control, and actual results for future periods could differ materially from those discussed in this Report, depending on a variety of important
factors, among which are the success or failure of managements efforts to implement its business strategy; the level of acquisition opportunities available to the Company and the Companys ability to price and negotiate such transactions
on a favorable basis; the Companys ability to properly manage growth and successfully integrate acquired companies and operations; the Companys ability to compete with major established companies; the Companys ability to attract
and retain qualified personnel; economic and financial market conditions generally; and other risks and uncertainties which may be described from time to time in the Companys filings with the Securities and Exchange Commission (the
SEC), including the Companys annual report on Form 10-KSB for the fiscal year ended December 31, 2004 (file no. 0-29337).



2



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##### Table of Contents

PART I. FINANCIAL INFORMATION



Item 1.
Financial Statements



SUMMIT FINANCIAL SERVICES GROUP, INC. AND
SUBSIDIARIES

Condensed Consolidated Statement of Financial Condition

June 30, 2005 (Unaudited)



|                                                                                                                                                                                                        |  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------- | -
|ASSETS                                                                                                                                                                                                  |  |   |            |  
|Cash and cash equivalents                                                                                                                                                                               |  | $ | 3,171,054  |  
|Deposit held at clearing broker                                                                                                                                                                         |  |   | 25,493     |  
|Securities owned                                                                                                                                                                                        |  |   | 5,658      |  
|Commissions receivable                                                                                                                                                                                  |  |   | 522,949    |  
|Prepaid expenses                                                                                                                                                                                        |  |   | 177,474    |  
|Other receivables, net                                                                                                                                                                                  |  |   | 371,426    |  
|Goodwill & customer list, net                                                                                                                                                                           |  |   | 1,130,392  |  
|Property and equipment at cost, less accumulated depreciation of $28,209                                                                                                                                |  |   | 53,098     |  
|                                                                                                                                                                                                        |  |   |            |  
|TOTAL ASSETS                                                                                                                                                                                            |  | $ | 5,457,544  |  
|                                                                                                                                                                                                        |  |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                    |  |   |            |  
|LIABILITIES                                                                                                                                                                                             |  |   |            |  
|Accounts payable and accrued expenses                                                                                                                                                                   |  | $ | 566,694    |  
|Accrued commission expense                                                                                                                                                                              |  |   | 1,071,948  |  
|Note payable, net                                                                                                                                                                                       |  |   | 697,728    |  
|                                                                                                                                                                                                        |  |   |            |  
|TOTAL LIABILITIES                                                                                                                                                                                       |  |   | 2,336,370  |  
|                                                                                                                                                                                                        | 
|STOCKHOLDERS EQUITY                                                                                                                                                                                    |  |   |            |  
|Preferred stock, 150,000 authorized shares designated as Series A 12% cumulative convertible; par value $0.0001 per share; 125,000 Series A
issued and outstanding (liquidation preference of $125,000) |  |   | 13         |  
|Common stock, par value $0.0001 per share; authorized 60,000,000 shares; 28,224,987 issued and 28,210,075 outstanding                                                                                   |  |   | 2,821      |  
|Additional paid-in capital                                                                                                                                                                              |  |   | 8,842,554  |  
|Unearned stock compensation                                                                                                                                                                             |  |   | (356,078   | )
|Treasury stock (at cost)                                                                                                                                                                                |  |   | (10,884    | )
|Accumulated deficit                                                                                                                                                                                     |  |   | (5,357,252 | )
|                                                                                                                                                                                                        |  |   |            |  
|TOTAL STOCKHOLDERS EQUITY                                                                                                                                                                              |  |   | 3,121,174  |  
|                                                                                                                                                                                                        |  |   |            |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                              |  | $ | 5,457,544  |  
|                                                                                                                                                                                                        |  |   |            |  



See accompanying notes
to unaudited condensed consolidated financial statements.



3



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##### Table of Contents

SUMMIT FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of
Loss



|                                    |  |                                     |            |   |             |   |            |  
|----------------------------------- |  | ----------------------------------- | ---------- | - | ----------- | - | ---------- | -
|                                    |  | For The Three Months Ended June 30, |           
|                                    |  | 2005                                |            |   | 2004        |  
|                                    |  | (Unaudited)                         |            |   | (Unaudited) |  
|REVENUES                            |  |                                     |            |   |             |   |            |  
|Commissions                         |  | $                                   | 5,143,052  |   |             | $ | 3,833,107  |  
|Interest and dividends              |  |                                     | 187,300    |   |             |   | 144,648    |  
|Other                               |  |                                     | 51,355     |   |             |   | 59,239     |  
|                                    |  |                                     |            |   |             |   |            |  
|                                    |  |                                     | 5,381,707  |   |             |   | 4,036,994  |  
|                                    |  |                                     |            |   |             |   |            |  
|EXPENSES                            |  |                                     |            |   |             |   |            |  
|Commissions and clearing costs      |  |                                     | 4,140,519  |   |             |   | 2,999,013  |  
|Employee compensation and benefits  |  |                                     | 736,726    |   |             |   | 578,397    |  
|Occupancy and equipment             |  |                                     | 114,136    |   |             |   | 120,784    |  
|Communications                      |  |                                     | 81,431     |   |             |   | 105,579    |  
|Professional expenses               |  |                                     | 125,076    |   |             |   | 152,530    |  
|Depreciation and amortization       |  |                                     | 49,373     |   |             |   | 51,280     |  
|Other operating expenses            |  |                                     | 152,767    |   |             |   | 74,667     |  
|                                    |  |                                     |            |   |             |   |            |  
|                                    |  |                                     | 5,400,028  |   |             |   | 4,082,250  |  
|                                    |  |                                     |            |   |             |   |            |  
|NET LOSS BEFORE INCOME TAXES        |  |                                     | (18,321    | ) |             |   | (45,256    | )
|PROVISION FOR INCOME TAXES          |  |                                     |           |   |             |   |           |  
|                                    |  |                                     |            |   |             |   |            |  
|NET LOSS                            |  | $                                   | (18,321    | ) |             | $ | (45,256    | )
|                                    |  |                                     |            |   |             |   |            |  
|BASIC EARNINGS (LOSS) PER SHARE     |  | $                                   | (0.00      | ) |             | $ | (0.00      | )
|                                    |  |                                     |            |   |             |   |            |  
|DILUTED EARNINGS (LOSS) PER SHARE   |  | $                                   | (0.00      | ) |             | $ | (0.00      | )
|                                    |  |                                     |            |   |             |   |            |  
|WEIGHTED AVERAGE SHARES OUTSTANDING |  |                                     |            |   |             |   |            |  
|BASIC                               |  |                                     | 28,198,540 |   |             |   | 28,178,167 |  
|                                    |  |                                     |            |   |             |   |            |  
|DILUTED                             |  |                                     | 28,198,540 |   |             |   | 28,178,167 |  
|                                    |  |                                     |            |   |             |   |            |  



See accompanying notes
to unaudited condensed consolidated financial statements.



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SUMMIT FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of
Income



|                                    |  |                                   |            |             |   |           
|----------------------------------- |  | --------------------------------- | ---------- | ----------- | - | ----------
|                                    |  | For The Six Months Ended June 30,
|                                    |  | 2005                              |            | 2004       
|                                    |  | (Unaudited)                       |            | (Unaudited)
|REVENUES                            |  |                                   |            |             |   |           
|Commissions                         |  | $                                 | 9,575,594  |             | $ | 8,622,864 
|Interest and dividends              |  |                                   | 352,987    |             |   | 277,567   
|Other                               |  |                                   | 129,752    |             |   | 156,351   
|                                    |  |                                   |            |             |   |           
|                                    |  |                                   | 10,058,333 |             |   | 9,056,782 
|                                    |  |                                   |            |             |   |           
|EXPENSES                            |  |                                   |            |             |   |           
|Commissions and clearing costs      |  |                                   | 7,602,457  |             |   | 6,856,684 
|Employee compensation and benefits  |  |                                   | 1,392,731  |             |   | 1,182,525 
|Occupancy and equipment             |  |                                   | 228,724    |             |   | 232,274   
|Communications                      |  |                                   | 166,378    |             |   | 201,135   
|Professional expenses               |  |                                   | 246,128    |             |   | 266,923   
|Depreciation and amortization       |  |                                   | 98,595     |             |   | 103,632   
|Other operating expenses            |  |                                   | 249,780    |             |   | 193,368   
|                                    |  |                                   |            |             |   |           
|                                    |  |                                   | 9,984,793  |             |   | 9,036,541 
|                                    |  |                                   |            |             |   |           
|NET INCOME BEFORE INCOME TAXES      |  |                                   | 73,540     |             |   | 20,241    
|PROVISION FOR INCOME TAXES          |  |                                   |           |             |   |          
|                                    |  |                                   |            |             |   |           
|NET INCOME                          |  | $                                 | 73,540     |             | $ | 20,241    
|                                    |  |                                   |            |             |   |           
|BASIC EARNINGS PER SHARE            |  | $                                 | 0.00       |             | $ | 0.00      
|                                    |  |                                   |            |             |   |           
|DILUTED EARNINGS PER SHARE          |  | $                                 | 0.00       |             | $ | 0.00      
|                                    |  |                                   |            |             |   |           
|WEIGHTED AVERAGE SHARES OUTSTANDING |  |                                   |            |             |   |           
|BASIC                               |  |                                   | 28,196,820 |             |   | 28,158,591
|                                    |  |                                   |            |             |   |           
|DILUTED                             |  |                                   | 30,002,949 |             |   | 28,520,660
|                                    |  |                                   |            |             |   |           



See accompanying notes
to unaudited condensed consolidated financial statements.



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SUMMIT FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of
Cash Flows



|                                                                             |  |                                  |           |   |             |   |           |  
|---------------------------------------------------------------------------- |  | -------------------------------- | --------- | - | ----------- | - | --------- | -
|                                                                             |  | For The Six MonthsEnded June 30, |          
|                                                                             |  | 2005                             |           |   | 2004        |  
|                                                                             |  | (Unaudited)                      |           |   | (Unaudited) |  
|Cash flows from operating activities                                         |  |                                  |           |   |             |   |           |  
|Net income                                                                   |  | $                                | 73,540    |   |             | $ | 20,241    |  
|Adjustments to reconcile net income to net cash used by operating activities |  |                                  |           |   |             |   |           |  
|Depreciation                                                                 |  |                                  | 8,643     |   |             |   | 8,470     |  
|Stock based compensation / consultant expenses, net                          |  |                                  | 63,453    |   |             |   | 85,468    |  
|Amortization of customer list and imputed interest                           |  |                                  | 110,189   |   |             |   | 123,362   |  
|Changes in:                                                                  |  |                                  |           |   |             |   |           |  
|Deposit held at clearing broker                                              |  |                                  | 50,667    |   |             |   | (24       | )
|Commissions receivable                                                       |  |                                  | (243,959  | ) |             |   | (259,415  | )
|Other receivables                                                            |  |                                  | (207,778  | ) |             |   | 62,188    |  
|Prepaid expenses and other                                                   |  |                                  | 92,731    |   |             |   | (55,512   | )
|Securities owned                                                             |  |                                  | (2,598    | ) |             |   | 945       |  
|Accounts payable and accrued expenses                                        |  |                                  | (228,843  | ) |             |   | (28,488   | )
|Accrued commission expense                                                   |  |                                  | 147,715   |   |             |   | 62,512    |  
|                                                                             |  |                                  |           |   |             |   |           |  
|Net cash used by operating activities                                        |  |                                  | (136,240  | ) |             |   | (18,676   | )
|                                                                             |  |                                  |           |   |             |   |           |  
|Cash flows from investing activities                                         |  |                                  |           |   |             |   |           |  
|Purchase of property and equipment                                           |  |                                  | (6,808    | ) |             |   | (3,249    | )
|Proceeds from disposition of assets                                          |  |                                  |          |   |             |   | 3,442     |  
|                                                                             |  |                                  |           |   |             |   |           |  
|Net cash used/provided by investing activities                               |  |                                  | (6,808    | ) |             |   | 193       |  
|                                                                             |  |                                  |           |   |             |   |           |  
|Cash flows from financing activities                                         |  |                                  |           |   |             |   |           |  
|Payment of preferred stock dividend                                          |  |                                  | (9,000    | ) |             |   | (12,000   | )
|Payments on debt obligations                                                 |  |                                  | (169,257  | ) |             |   | (203,964  | )
|                                                                             |  |                                  |           |   |             |   |           |  
|Net cash used by financing activities                                        |  |                                  | (178,257  | ) |             |   | (215,964  | )
|                                                                             |  |                                  |           |   |             |   |           |  
|Net decrease in cash and cash equivalents                                    |  |                                  | (321,305  | ) |             |   | (197,095  | )
|Cash and cash equivalents at beginning of period                             |  |                                  | 3,492,359 |   |             |   | 3,111,117 |  
|                                                                             |  |                                  |           |   |             |   |           |  
|Cash and cash equivalents at end of period                                   |  | $                                | 3,171,054 |   |             | $ | 2,914,022 |  
|                                                                             |  |                                  |           |   |             |   |           |  



See accompanying notes
to unaudited condensed consolidated financial statements.





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SUMMIT FINANCIAL SERVICES GROUP, INC. AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS



June 30, 2005



NOTE 1GENERAL



The condensed consolidated financial statements for the six-month periods ended June 30, 2005 and June 30, 2004 reflect all adjustments
(consisting only of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods indicated. The consolidated financial statements herein
should be read in conjunction with the audited consolidated financial statements and notes thereto, together with managements discussion and analysis of financial condition and results of operations, contained in the Annual Report on Form
10-KSB for the fiscal year ended December 31, 2004 for Summit Financial Services Group, Inc. (the Company). The results of operations for the three- and six-month periods ended June 30, 2005 are not necessarily indicative of
the results for the entire fiscal year ending December 31, 2005.



In the event the Companys operations are negatively impacted by downturns in the economy, in general, or the financial markets, in particular, the Company may need to raise or borrow additional funds to support its operating
requirements. There can be no assurance that any such sources of financing would be available when needed, on commercially reasonable terms, or at all. Also, in the normal course of business, the Company evaluates acquisitions of businesses that
compliment its business. In connection with any acquisitions, the Company may issue additional securities, which could result in dilution for existing shareholders.



NOTE 2STOCKHOLDERS EQUITY



Basic earnings per share is computed by dividing the net income available to common shareholders for the relevant period by the weighted average number of
shares of common stock issued and outstanding during the period. For purposes of calculating diluted earnings per share, the denominator includes both the weighted average number of shares of common stock and the number of dilutive common stock
equivalents. The number of dilutive common stock equivalents includes the effect of stock options calculated using the treasury stock method and the number of issuable shares upon the conversion of preferred stock if the effect of such conversion is
dilutive.



As of June 30, 2005, the Company had options
and warrants outstanding entitling the holders thereof to purchase a total of approximately 13.4 million shares of common stock. The Company also had outstanding shares of preferred stock convertible into approximately 140,000 shares of common
stock. For purposes of computing diluted earnings per share, the Company has assumed the exercise of options and warrants for approximately 7.6 million shares only, since the options and warrants for the remaining approximately 6.0 million
shares are either non- or anti-dilutive, as are the shares issuable upon conversion of the preferred stock.



Preferred stock dividends in arrears as of June 30, 2005 approximated $16,000.



Stock-Based Awards



In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 148,
Accounting for Stock-Based Compensation  Transition and Disclosure (SFAS No. 148). SFAS No. 148 provides companies alternative methods of transitioning to the fair value method of Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS No. 123) to account for stock-based employee compensation. SFAS No. 148 also requires certain disclosures in both annual and quarterly
financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS No. 148 does not mandate fair value accounting for stock-based employee compensation, but does
require all companies to meet the disclosure requirements. The Company has not adopted fair value accounting for its employee stock options. During the three-month period ended June 30, 2005, the Company issued, or committed to issue, options
entitling the holders thereof to purchase up to 165,000 shares of common stock at exercise prices ranging from $0.33 to $0.50 per share.



The Company currently accounts for stock-based employee compensation using the intrinsic value method under the provisions of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25). The Company accounts for stock-based compensation of non-employees using the fair market value method under the provisions of SFAS No. 123.
Most often, options are granted for the provision of future services, such as continued employment or, in the case of independent registered representatives, their affiliation with the Company.



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Consequently, the options typically provide for vesting over a period of years, with a certain percentage of the options vesting each year upon the
anniversary date of the grant if the grantee is then still affiliated with the Company. In certain instances, unearned stock compensation is recorded for options issued to either employees or non-employees for services to be rendered in the future.
Any unearned stock compensation is generally amortized over the period the underlying options are earned, which is typically the vesting period. SFAS No. 123 also requires that companies electing to continue to use the intrinsic value method
for options issued to employees make pro forma disclosure of net income and net income per share as if the fair value method of accounting had been applied. The Company uses the Black-Scholes option pricing model to estimate the fair value of these
options. The effects of applying SFAS No. 123 during the periods ended June 30, 2005 and 2004 are as follows:



|                                                                                                                                        |  |                |         |   |                |   |         |              |  |   |              |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | - | -------------- | - | ------- | ------------ |  | - | ------------ | - |  | - | ------- | -
|                                                                                                                                        |  | 3 Months Ended |         |   | 6 Months Ended |  
|                                                                                                                                        |  | June 30,2005   |         |   | June 30,2004   |   |         | June 30,2005 |  |   | June 30,2004 |  
|Net income (loss) as reported:                                                                                                          |  | $              | (18,321 | ) |                | $ | (45,256 | )            |  | $ | 73,540       |   |  | $ | 20,241  |  
|Deduct: Additional stock-based compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                | (74,541 | ) |                |   | (6,688  | )            |  |   | (136,913     | ) |  |   | (78,903 | )
|                                                                                                                                        |  |                |         |   |                |   |         |              |  |   |              |   |  |   |         |  
|Pro forma net loss                                                                                                                      |  | $              | (92,862 | ) |                | $ | (51,944 | )            |  | $ | (63,373      | ) |  | $ | (58,622 | )
|                                                                                                                                        |  |                |         |   |                |   |         |              |  |   |              |   |  |   |         |  
|Net income (loss) per share:                                                                                                            |  |                |         |   |                |   |         |              |  |   |              |   |  |   |         |  
|Basic and diluted  as reported                                                                                                         |  | $              | (0.00   | ) |                | $ | (0.00   | )            |  | $ | 0.00         |   |  | $ | 0.00    |  
|                                                                                                                                        |  |                |         |   |                |   |         |              |  |   |              |   |  |   |         |  
|Basic and diluted  pro forma                                                                                                           |  | $              | (0.00   | ) |                | $ | (0.00   | )            |  | $ | (0.00        | ) |  | $ | (0.00   | )
|                                                                                                                                        |  |                |         |   |                |   |         |              |  |   |              |   |  |   |         |  



The fair value of
each option grant is estimated at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Companys employee stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in managements opinion, the existing models (including Black-Scholes) do not necessarily provide a reliable single
measure of the fair value of the Companys employee stock options.



NOTE 3INCOME TAXES



The Companys
provision for income taxes reflects an estimated income tax accrual for the six months ended June 30, 2005 of approximately $23,000, fully offset by the use of an equal portion of the Companys net operating loss carryforward.



NOTE 4NET CAPITAL REQUIREMENT



Summit Brokerage Services, Inc., the Companys wholly-owned
broker-dealer subsidiary (Summit Brokerage), is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate
indebtedness to net capital, both as defined, shall not exceed 15 to 1. At June 30, 2005, Summit Brokerage had net capital of $1,075,609, which was $825,609 in excess of its SEC-required minimum net capital of $250,000. Under SEC Rule 15c3-1,
Summit Brokerages aggregate indebtedness to net capital ratio was 2.25 to 1 at June 30, 2005.



The Companys computation of Summit Brokerages net capital at June 30, 2005 reflects the determination of the SEC in January 2005 that the
unamortized amount of the note payable in connection with the Companys acquisition of the Boca Branch (the Boca Note) should not be added back to the net capital of Summit Brokerage for purposes of SEC Rule 15c3-1 computations. For
periods ended prior to December 31, 2004, the Companys practice had been to include the Boca Note as an addition to net capital, based upon the Companys belief that the Boca Note is in legal substance an obligation of a subsidiary
of Summit Brokerage containing no provision giving the holder of the Boca Note recourse against Summit Brokerage. The Company was not required to restate net capital for any prior period.



8



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NOTE 5CONTINGENCIES



The Company is a party to legal proceedings relating to various claims and lawsuits arising in the normal course of
business. Management has provided an accrual for estimated probable losses, which could result from these matters. Management believes that the range of potential net losses resulting from these proceedings in excess of the accrued amount, if any,
will not be material to the Companys financial position or results of operations.



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



The following discussion and analysis of the Companys financial condition and results of its operations for the three- and six-month periods ended
June 30, 2005 and 2004 should be read in conjunction with the Companys condensed consolidated financial statements included as Item 1 herein. When used in the following discussions, the words believes,
anticipates, intends, expects, and similar expressions are intended to identify forward-looking statements. As further explained in the section entitled Forward Looking Statements on page 2 herein,
such statements are subject to certain risks and uncertainties, which could cause results to differ materially from those projected.



Overview



The Company is a Florida-based financial services holding company that provides, through our Summit Brokerage Services, Inc. (Summit
Brokerage) operating subsidiary, a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance,
through its SBS Insurance Agency of Florida, Inc. (SBSIA) subsidiary and related entities. Through its registered investment advisor subsidiary, Summit Financial Group, Inc. (SFG), Summit Brokerage provides asset management
services.



Effective March 2, 2004, we reorganized into a
holding company structure (the Reorganization), whereby Summit Brokerage became the Companys wholly-owned subsidiary, and the Company became the parent of Summit Brokerage and the successor reporting company under the Exchange Act.
Prior to the Reorganization, the common stock of Summit Brokerage was registered under Section 12(b) of the Exchange Act. Upon the consummation of the Reorganization, the Companys common stock was automatically deemed registered under
Section 12(b) of the Exchange Act pursuant to Rule 12g-3(a) of the Exchange Act, and the Company succeeded to Summit Brokerage as the reporting company under the Exchange Act. The Companys common stock commenced trading on the
Over-the-Counter Bulletin Board under the symbol SFNS on March 2, 2004.



Summit Brokerage is a financial services firm that provides full service retail securities brokerage through its network of approximately 185 registered representatives serving retail and, to a much lesser extent,
institutional customer accounts. With the exception of our Boca Raton, Florida Branch (the Boca Branch), which we acquired from Wachovia Securities in January 2003, our approximately 80 other branch offices are owned and operated by
independent owners who maintain all appropriate licenses and are responsible for all office overhead and expenses. Because these independent operators, many of whom are financial planners, are required to pay their own expenses, we generally pay
them a much greater percentage of the commissions and fee income they generate, typically 80%90%.



Our registered representatives offer a broad range of investment products and services. These products and services allow us to generate both commissions
(from transactions in securities and other investment products) and fee income (for providing investment advisory services, namely managing a clients account). The investment products and services offered include mutual funds, annuities,
insurance, individual stocks and bonds, and managed money accounts.



Summit Brokerage is registered as a broker-dealer with the Securities and Exchange Commission, and is a member of NASD, the Securities Investor Protection Corporation and the Municipal Securities Rulemaking Board. Summit Brokerage is
licensed to conduct our brokerage activities in all 50 states, as well as the District of Columbia. Our registered investment advisor, SFG, is licensed to conduct business in 30 states.



Summit Brokerage is a fully-disclosed broker dealer, and therefore relies on its clearing firm to provide the back office
support and transaction processing services necessary to effect transactions on all principal national and international securities exchanges. Additionally, because the clearing firm provides us with access to many other financial products and
services that we would not otherwise be able to offer, we are able to provide our clients with products and services comparable to much larger brokerage firms. In exchange for providing these services, the clearing firm typically charges us a fee
every time they effect a transaction on behalf of the firm or its clients. We have a clearing arrangement with First Clearing, LLC (a subsidiary of Wachovia Corporation).



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In general, our financial results can be impacted by a number of factors, including our ability to
recruit and retain registered representatives as well as general market conditions and volatility, which are often expressions of investor confidence. In periods of waning investor confidence, our revenues may suffer as our clients make fewer
investments. Furthermore, our results during any particular period may be negatively impacted by the incurrence of costs necessary to support our actual and projected growth. As we continue to grow, we may continue to have increases in expenses such
as increased personnel and office costs.



Our business plan is
focused primarily on increasing our network of affiliated registered representatives, which may permit the Company to expand its base of revenue and its network for the retail distribution of securities without the capital expenditures that would be
required to open company-owned offices and the additional administrative and other costs of hiring registered representatives as in-house employees. As was the case with the Boca Branch, however, we will opportunistically evaluate acquisitions,
including those that would result in registered representatives in acquired branches becoming employees of Summit Brokerage.



By their nature, our business activities are highly competitive and are subject to, among other things, general market conditions, including the
volatility of the trading markets and the attractiveness of various forms of investment products. Consequently, our revenues and net income are subject to substantial positive and negative fluctuations due to a variety of factors that cannot be
predicted with great certainty and may result in revenues and net income (or losses) in any particular period that may not be representative of full-year results and may vary significantly from year to year and from quarter to quarter.



On August 18, 2003, we terminated for cause the employment of Richard
Parker, our then Vice Chairman, President and Chief Operating Officer. In connection with such termination, we filed an action against Mr. Parker for breach of contract, breach of fiduciary duty and injunctive relief. The litigation is
continuing. We believe that Summit Brokerage will prevail on the merits of its complaint, regardless of whether the matter is determined to be subject to arbitration, as Mr. Parker asserts, or judicial resolution, as the Company asserts.
Nevertheless, the ultimate outcome cannot be predicted.



Results of
Operations



The following discussion relates to the
results of operations for the three months and six months ended June 30, 2005 (the 2005 Quarter and the 2005 Period, respectively) and the comparable period in the prior year (the 2004 Quarter and the
2004 Period, respectively).





Comparison of Three Months Ended June 30, 2005 and June 30, 2004



Revenue:



Commission revenue of approximately $5.1 million for the 2005 Quarter represents an increase of approximately $1.3 million, or 34%, when compared to
commission revenue of approximately $3.8 million for the 2004 Quarter. This increase in revenue was due primarily to the net addition of several registered representatives during that latter part of 2004 through the first half of 2005.



In any quarter, our mix of business will be impacted by several factors,
including, among other things, investor confidence, as reflected by the movements of the equities markets, and the attractiveness of non-equity-related investment products, such as fixed income securities. Additionally, during any quarter, we may
add or lose a significant number of registered representatives who focus only on the sale of a particular type or types of investment product(s) (e.g., insurance, equities, fixed income, etc.).



Expenses:



Commission and clearing costs increased to approximately $4.1 million during the 2005 Quarter, which represents an increase
of approximately $1.1 million, when compared with the approximately $3.0 million reported for the 2004 Quarter. In general, commissions and clearing costs are directly related to commission revenue, and will typically increase or decrease
proportionately as commission revenues rise and fall. Commissions and clearing costs, as a percentage of commission revenues, increased in the 2005 Quarter to 81% from 78% in the 2004 Quarter, which change was primarily attributable to an increase
in the percentage of revenue derived from our independent registered representatives. Because we pay our independent registered representatives at a higher rate than we pay the employee registered representatives in the Boca Branch, fluctuations in
the relative percentage of total commissions generated by the independent network will generally result in similar fluctuations in the ratio of commission expense and clearing costs to commission revenues.



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Employee compensation and benefits increased by approximately $160,000 to approximately $740,000 during
the 2005 Quarter, or an approximate increase of 27% when compared with the approximately $580,000 reported for the 2004 Quarter. This increase was due primarily to an increase in salary and other employee compensation-related expenses, including
from the addition of new employees, as well as an increase in benefit costs. Additionally, we include within employee compensation and benefits those net expenses related to the issuance of common stock and common stock equivalents, such as options,
to our employees. For the 2005 Quarter, a total of approximately $30,000 of such expenses related to the amortization of unearned stock compensation. For the 2004 Quarter, we expensed a total of approximately $35,000, of which approximately $30,000
related to the amortization of unearned stock compensation.



Occupancy and equipment costs decreased by approximately $7,000, or 6%, to approximately $114,000 in the 2005 Quarter from approximately $121,000 in the 2004 Quarter. This decrease was due principally to certain rent concessions obtained by
the Company in connection with the extension of certain leases, which amounts are being amortized over the life of the lease.



Communications costs decreased by approximately $24,000, or 23%, to approximately $81,000 in the 2005 Quarter from approximately $106,000 in the 2004
Quarter. The reduction in communications costs between the 2005 Quarter and the 2004 Quarter is due to an increase in the amount we receive as reimbursement for such costs, as well as the absence in the 2005 Quarter of certain costs associated with
the clearing firm agreement between Summit Brokerage and RBC Dain Correspondent Services (a division of RBC Dain Rauscher Incorporated), which was terminated on November 30, 2004.



Professional expenses decreased by approximately $27,000, or 18%, from approximately $152,000 during the 2004 Quarter to
approximately $125,000 during the 2005 Quarter. During the 2005 Quarter, the Company benefited from a significant reduction in legal and accounting fees, which reduction was offset by an increase in certain contractual recruiting costs. Professional
expenses for the 2005 Quarter also include approximately $1,000 attributable to the net amortization of unearned stock compensation related to the issuance of common stock equivalents to non-employees. This compares with amortization of unearned
stock compensation of $20,000 recorded for the 2004 Quarter.



Other operating expenses increased by approximately $78,000, or 105%, to approximately $153,000 during the 2005 Quarter versus approximately $75,000 for the 2004 Quarter. Other operating expenses typically include the general and
administrative costs incurred by the Company, to the extent such costs are not included elsewhere. Examples of other operating expenses include insurance expense, office supplies and printing, postage and related expenses, and interest expense. For
the 2005 Quarter, other operating expenses increased over amounts reported in the 2004 Quarter primarily as a result of, among other things, conference and meeting costs.



Net Income:



For the 2005 Quarter, we generated a net loss of approximately $18,000, or $0.00 per basic and diluted share, as compared to a net loss reported for the
2004 Quarter of approximately $45,000, or $0.00 per basic and diluted share. Although our commissions revenues increased during the 2005 Quarter when compared to the 2004 Quarter, our results were negatively impacted by an increase in operating
costs related primarily to employee compensation and benefit costs, as well as other operating expenses.





Comparison of Six Months Ended June 30, 2005 and June 30, 2004



Revenue:



Commission revenue of approximately $9.58 million for the 2005 Period represents an increase of approximately $960,000, or
11%, when compared to commission revenue of approximately $8.62 million for the 2004 Period. This increase in revenue was due primarily to the net addition of several registered representatives during that latter part of 2004 through the first half
of 2005.



In any Period, our mix of business will be impacted
by several factors, including, among other things, investor confidence, as reflected by the movements of the equities markets, and the attractiveness of non-equity-related investment products, such as fixed income securities. Additionally, during
any Period, we may add or lose a significant number of registered representatives who focus only on the sale of a particular type or types of investment product(s) (e.g., insurance, equities, fixed income, etc.).



11



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##### Table of Contents

Expenses:



Commissions and clearing costs increased to approximately $7.6 million during the 2005 Period, which represents an increase of approximately $700,000, or
11%, when compared with the approximately $6.9 million reported for the 2004 Period. In general, commissions and clearing costs are directly related to commission revenues, and will typically increase or decrease proportionately as commission
revenues rise and fall. Commissions and clearing costs, as a percentage of commission revenues, remained constant at approximately 79% during the 2005 Period and the 2004 Period.



Employee compensation and benefits increased by approximately $210,000 to approximately $1.39 million during the 2005
Period, or an approximate increase of 18% when compared with the approximately $1.18 million reported for the 2004 Period. This increase was due primarily to an increase in salary and other employee compensation-related expenses, including from the
addition of new employees, as well as an increase in benefit costs. Additionally, we include within employee compensation and benefits those net expenses related to the issuance of common stock and common stock equivalents, such as options, to our
employees. For the 2005 Period, a total of approximately $54,000 of such expenses related to the amortization of unearned stock compensation. For the 2004 Period, we expensed a total of approximately $42,000 related to the amortization of unearned
stock compensation.



Occupancy and equipment costs decreased by
approximately $3,000, or 2%, to approximately $229,000 in the 2005 Period from approximately $232,000 in the 2004 Period. This decrease was due principally to certain rent concessions obtained by the Company in connection with the extension of
certain leases, which amounts are being amortized over the life of the lease.



Communications costs decreased by approximately $35,000, or 17%, to approximately $166,000 in the 2005 Period from approximately $201,000 in the 2004 Period. The reduction in communications costs between the 2005
Period and the 2004 Period is due to an increase in the amount we receive as reimbursement for such costs, as well as the absence in the 2005 Period of certain costs associated with the clearing firm agreement between Summit Brokerage and RBC Dain
Correspondent Services (a division of RBC Dain Rauscher Incorporated), which was terminated on November 30, 2004.



Professional expenses decreased by approximately $21,000, or 8%, from approximately $267,000 during the 2004 Period to approximately $246,000 during the
2005 Period. During the 2005 Period, the Company benefited from a significant reduction in legal fees, which reduction was offset by an increase in certain contractual recruiting costs. Professional expenses for the 2005 Period also include
approximately $9,000 attributable to the net amortization of unearned stock compensation related to the issuance of common stock equivalents to non-employees. This compares with net amortization of unearned stock compensation of approximately
$38,000 recorded for the 2004 Period.



Other operating expenses
increased by approximately $56,000, or 29%, to approximately $250,000 during the 2005 Period versus approximately $193,000 for the 2004 Period. Other operating expenses typically include the general and administrative costs incurred by the Company,
to the extent such costs are not included elsewhere. Examples of other operating expenses include insurance expense, office supplies and printing, postage and related expenses, and interest expense. For the 2005 Period, other operating expenses
increased over amounts reported in the 2004 Period primarily as a result of, among other things, conference and meeting costs, as well as an increase in training and education costs.



Net Income:



For the 2005 Period, we generated net income of approximately $74,000, or $0.00 per basic and diluted share, as compared to net income reported for the 2004 Period of
approximately $20,000, or $0.00 per basic and diluted share. Although our commissions revenues increased during the 2005 Period when compared to the 2004 Period, our results were negatively impacted by an increase in operating costs related
primarily to employee compensation and benefit costs, as well as other operating expenses.



Liquidity and Capital Resources



Net cash used by operating activities totaled approximately $136,000 during the 2005 Period, compared to net cash used of approximately $19,000 for the 2004 Period. The increase in cash used by operating activities in
the 2005 Period, compared to the 2004 Period, was due largely to an increase of approximately $270,000 in other receivables, as well as a decrease of approximately $200,000 in accounts payable. The uses of cash were partially offset, however, by
increases in cash resulting from, among other things, a decrease in prepaid expenses of approximately $148,000, an increase in accrued commission expense of approximately $85,000, and the receipt by the Company of an approximately $50,000 deposit
held by its prior clearing firm.



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During the 2005 Period, we purchased approximately $7,000 of property and equipment, which amount was
approximately $4,000 more than the approximately $3,000 purchased during the 2004 Period. The Company does not project material capital expenditures over the next twelve months.



Financing activities used cash of approximately $178,000 during the 2005 Period, all but $9,000 of which related to payments
on the note to Wachovia Securities.



Cash and cash equivalents
decreased during the 2005 Period by approximately $320,000 to approximately $3,170,000. This decrease was due principally to the decrease in cash resulting from operating activities (as previously described), as well as payments made on debt
obligations.



Inflation. Inflation has not been a major
factor in the Companys business since inception. There can be no assurances that this will continue.



Item 3. Controls and Procedures



The Companys Chief Executive Officer and the Companys Chief Financial Officer evaluated the Companys disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, the
Companys Chief Executive Officer and the Companys Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective in ensuring that material information required to be disclosed is included in
the reports that it files with the Securities and Exchange Commission.



During the quarterly period covered by this report, there were no changes in our internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.





PART II. OTHER INFORMATION



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



During the Quarter ended June 30, 2005, the Company issued, in the aggregate, 19,995 shares of common stock. The recipients of these shares were an
employee and a provider of legal services to the Company. These shares were collectively valued at approximately $6,400 for which the Company claimed an exemption under Section 4(2) of the Securities Act of 1933. The securities are not subject to
resale except pursuant to registration under the Securities Act or pursuant to an available exemption from registration under the Securities Act and the certificates representing the securities bear a restrictive legend accordingly. The recipients
had an opportunity to ask management questions about the Company and were provided information, or had adequate access to information, about the Company. The transactions did not involve the use of an underwriter and no commissions were paid in
connection with the issuance of the securities.



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



On June 22, 2005, at an Annual Meeting of Shareholders, the following was approved:

| | i. | The election of directors; and
| | -- | ------------------------------

| | ii. | Increase in the number of shares of common stock reserved for issuance under the Companys 2000 Incentive Compensation Plan (as amended) from 7,000,000 to 12,000,000
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



The total number of shares entitled to vote at
this meeting was 28,204,992, of which 23,814,709 were voted. The tabulation of votes was as follows:



Approval of Directors



|                  |  |                    |  |           
|----------------- |  | ------------------ |  | ----------
|Director          |  | Withhold Authority |  | For       
|Paul DeStefanis   |  | 104,700            |  | 23,710,009
|William L. Harvey |  | 104,700            |  | 23,710,009
|Marshall T. Leeds |  | 104,700            |  | 23,710,009
|Sanford B. Cohen  |  | 104,700            |  | 23,710,009
|Steven C. Jacobs  |  | 105,450            |  | 23,709,259



Increase in shares
reserved for 2000 Incentive Compensation Plan



|        |  |            |  |        
|------- |  | ---------- |  | -------
|Abstain |  | For        |  | Against
|114,027 |  | 18,437,526 |  | 109,004



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Item 6. Exhibits



|       |  |                                                                                                                                                                             
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Name                                                                                                                                                                        
|2.1    |  | Merger Agreement by and among the Registrant, Summit Brokerage Services, Inc. and Summit Transitory Sub, Inc. dated July 17, 2003
(1)                                       
|3.1    |  | Amended and Restated Articles of Incorporation (2)                                                                                                                          
|       | 
|3.2    |  | Bylaws (2)                                                                                                                                                                  
|       | 
|10.1   |  | 2000 Incentive Compensation Plan, as amended (8)                                                                                                                            
|       | 
|10.1.1 |  | 2000 Incentive Compensation Plan, as amended on June 22, 2005*                                                                                                              
|       | 
|10.2   |  | Stock Purchase Agreement by and among the Summit Brokerage Services, Inc., Richard Parker and Marshall T. Leeds, dated March 22, 2002
(3)                                   
|       | 
|10.3   |  | Stock Option Agreement between Summit Brokerage Services, Inc. and Marshall T. Leeds dated March 22, 2002 (3)                                                               
|       | 
|10.4   |  | Employment Agreement between the Registrant and Marshall T. Leeds effective July 19, 2004 (9)                                                                               
|       | 
|10.5   |  | Shareholders Voting Agreement and Irrevocable Proxy by and among Summit Brokerage Services, Inc., Marshall T. Leeds, Richard Parker and
Joan Parker, dated May 22, 2002.(4)
|       | 
|10.6.1 |  | Commercial Lease between Summit Brokerage Services, Inc. and First America Living Trust, dated May 22, 2002 (4)                                                             
|       | 
|10.6.2 |  | Employment Agreement between Summit Brokerage Services, Inc. and Richard Parker, dated May 22, 2004 (4)                                                                     
|       | 
|10.6.3 |  | Stock Option Agreement between Summit Brokerage Services, Inc. and Richard Parker, dated May 22, 2004 (3)                                                                   
|       | 
|10.6.4 |  | Stock Option Agreement between Summit Brokerage Services, Inc. and Richard Parker, dated May 22, 2004 (3)                                                                   
|       | 
|10.7   |  | Form of Registration Rights Agreement between Summit Brokerage Services, Inc. and certain investors (5)                                                                     
|       | 
|10.8   |  | Form of Warrants dated effective March 19, 2003 (6)                                                                                                                         
|       | 
|10.9   |  | Warrant Agreement between Summit Brokerage Services, Inc. and Steven C. Jacobs dated effective March 19, 2003 (8)                                                           
|       | 
|10.10  |  | Warrant Agreement between Summit Brokerage Services, Inc. and Steven C. Jacobs dated effective April 11, 2003 (8)                                                           
|       | 
|10.11  |  | Stock Purchase Agreement between Summit Brokerage Services, Inc. and Antares Capital Fund III Limited Partnership, dated April 11, 2003
(7)                                 
|       | 
|10.12  |  | Supplemental Letter between Summit Brokerage Services, Inc., Antares Capital Fund III Limited Partnership, and Marshall T. Leeds, dated April
11, 2003 (7)                  
|       | 
|10.13  |  | Registration Rights Agreement between Summit Brokerage Services, Inc. and Antares Capital Fund III Limited Partnership, dated April 11, 2003
(7)                            
|       | 
|10.14  |  | Co-Sale and Voting Rights Agreement between Marshall T. Leeds and Antares Capital Fund III Limited Partnership, dated April 11, 2003
(7)                                    
|       | 
|31.1   |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                        
|       | 
|31.2   |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*                                                                        
|       | 
|32.1   |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*                                                                         
|       | 
|32.2   |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*                                                                         

---

|* | Filed herewith
|- | --------------

|(1) | Incorporated by reference to the Registrants Registration Statement on Form S-4, filed on September 15, 2003, File No. 333-108818
|--- | ----------------------------------------------------------------------------------------------------------------------------------



|(2) | Incorporated by reference to the Registrants Registration Statement on Form S-4 (Amendment No. 2), filed on February 12, 2004, File No. 333-108818.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to the Form 10-QSB for the fiscal quarter ended September 30, 2002 of Summit Brokerage Services, Inc., filed May 24, 2002, file no. 0-29337.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to the Form 10-QSB for the fiscal quarter ended September 30, 2002 of Summit Brokerage Services, Inc., filed August 19, 2002, file no. 0-29337.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|(5) | Incorporated by reference to the Form 10-KSB for the fiscal year ended December 31, 2002, of Summit Brokerage Services, Inc., filed March 31, 2003, file no. 0-29337.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to the Form 10-QSB for the fiscal quarter ended September 30, 2003, of Summit Brokerage Services, Inc., filed November 14, 2003, file no.
0-29337.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Incorporated by reference to the Form 8-K filed on April. 21, 2003 by Summit Brokerage Services, Inc., file no. 0-29337.
|--- | ------------------------------------------------------------------------------------------------------------------------

|(8) | Incorporated by reference to the Registrants Form 10-KSB for the fiscal year ended December 31, 2003, filed March 30, 2004, file no. 0-29337.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Incorporated by reference to the Registrants Form 10-KSB for the fiscal year ended December 31, 2004, filed March 31, 2005, file no. 0-29337.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------



[Signature Page Follows]





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##### Table of Contents

SUMMIT FINANCIAL SERVICES GROUP, 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.



|                      |  |  |  |                                                                                                              
|--------------------- |  |  |  | -------------------------------------------------------------------------------------------------------------
|                      |  | 
|Date: August 15, 2005 |  |  |  | Summit Financial Services Group, Inc. (Registrant)  /s/ Marshall T.
Leeds                                    
|                      |  |  |  | Marshall T. Leeds, Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer)



|                      |  |  |  |                                                                                                      
|--------------------- |  |  |  | -----------------------------------------------------------------------------------------------------
|                      |  | 
|Date: August 15, 2005 |  |  |  | /s/ Steven C. Jacobs                                                                                 
|                      |  |  |  | Steven C. Jacobs, Executive Vice President and Chief Financial Officer (Principal Accounting Officer)



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EXHIBIT INDEX



|              |  |                                                                                                    
|------------- |  | ---------------------------------------------------------------------------------------------------
|EXHIBITNUMBER |  | DESCRIPTION                                                                                        
|              | 
|10.1.1        |  | 2000 Incentive Compensation Plan, as amended on June 22, 2005.                                     
|              | 
|31.1          |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|              | 
|31.2          |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|              | 
|32.1          |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|              | 
|32.2          |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 



17