`================================================================================

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

                                    FORM 10-Q

(Mark one)

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

           For the quarterly period ended March 31, 2002

                                       OR

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

           For the transition period from ________to________

                           Commission File No. 0-21324

                                   NYFIX, INC.
             (Exact name of registrant as specified in its charter)

           NEW YORK                                         06-1344888
    (State of incorporation)             (I.R.S. Employer identification number)

                 333 LUDLOW STREET, STAMFORD, CONNECTICUT  06902
                (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (203) 425-8000

                           --------------------------

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


30,697,171  shares of Common Stock were issued and  outstanding  as of April 30,
2002.





NYFIX, INC.

FORM 10-Q
   For the quarterly period ended March 31, 2002


CONTENTS                                                                  PAGE

PART I.     FINANCIAL INFORMATION

   Item 1.     Financial Statements

               Consolidated Balance Sheets as of March 31, 2002 (unaudited)
               and December 31, 2001                                           3

               Consolidated Statements of Income (unaudited) for the three
               month periods ended March 31, 2002 and 2001                     4

               Condensed Consolidated Statements of Cash Flows (unaudited)
               for the three month periods ended March 31, 2002 and 2001       5

               Notes to Consolidated Financial Statements (unaudited)          6

   Item 2.     Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                     15

   Item 3.     Quantitative and Qualitative Disclosures About Market Risk    20

PART II. OTHER INFORMATION

   Item 2.     Changes in Securities and Use of Proceeds                     21

   Item 4.     Submission of Matters to a Vote of Security Holders           21

   Item 6.     Exhibits and Reports on Form 8-K                              21


SIGNATURE                                                                    23

                                       2






                          NYFIX, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                                                                     March 31,       December 31,
                                                                                      2002               2001
                                                                                      ----               ----
ASSETS                                                                             (Unaudited)
CURRENT ASSETS:
    Cash and cash equivalents                                                     $  14,916,916    $   4,967,537
    Short-term investments in marketable securities                                  12,550,000       28,973,685
    Accounts receivable - less allowance of $534,000 and $511,000                    18,814,474       12,949,485
    Inventory, net                                                                    1,519,179        1,599,592
    Prepaid expenses and other current assets                                         3,050,509        2,138,912
    Due from NYFIX Millennium                                                              --          5,221,736
    Deferred income taxes                                                               419,000          443,000
                                                                                  -------------    -------------
                      Total Current Assets                                           51,270,078       56,293,947
PROPERTY AND EQUIPMENT, net                                                          19,293,853       14,366,097
INVESTMENT IN NYFIX MILLENNIUM                                                             --         27,500,000
NOTE RECEIVABLE FROM NYFIX MILLENNIUM                                                      --          6,043,151
GOODWILL AND OTHER ACQUIRED INTANGIBLES                                              82,110,566           34,000
INVESTMENT IN EUROLINK NETWORK                                                        3,968,000             --
DEFERRED INCOME TAXES                                                                   360,800          348,000
OTHER ASSETS                                                                          4,480,427        3,986,453
                                                                                  -------------    -------------
                      TOTAL ASSETS                                                $ 161,483,724    $ 108,571,648
                                                                                  =============    =============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable                                                              $   4,291,038    $   3,847,546
    Accrued expenses                                                                  3,161,235        3,530,427
    Current portion of capital lease obligations                                        903,132          952,176
    Advance billings                                                                  3,116,381          451,195
                                                                                  -------------    -------------
                      Total Current Liabilities                                      11,471,786        8,781,344
LONG-TERM PORTION OF CAPITAL LEASE OBLIGATIONS                                          535,046          548,608
OTHER LONG-TERM LIABILITIES                                                             855,986             --
                                                                                  -------------    -------------
                      Total Liabilities                                              12,862,818        9,329,952


SHAREHOLDERS' EQUITY:
    Preferred stock - par value $1.00; 5,000,000 shares authorized; none issued            --               --
    Common stock - par value $.001; 60,000,000 authorized, 31,984,971 and
          28,869,800 shares issued                                                       31,985           28,870
    Additional paid-in capital                                                      159,740,353      110,497,679
    Retained earnings                                                                 8,540,152        8,442,406
    Due from officers and directors                                                    (591,732)        (591,732)
    Accumulated other comprehensive loss                                                   --            (35,675)
    Treasury stock, at cost (1,301,300 shares)                                      (19,099,852)     (19,099,852)
                                                                                  -------------    -------------
                      Total Shareholders' Equity                                    148,620,906       99,241,696
                                                                                  -------------    -------------
                      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                  $ 161,483,724    $ 108,571,648
                                                                                  =============    =============
The accompanying notes to the consolidated  financial statements are an integral
part of these statements.

                                       3




                          NYFIX, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)


                                                       Three Month Period Ended
                                                     March 31, 2002   March 31, 2001
                                                     --------------   --------------
REVENUES:
Subscription                                         $  7,177,275    $  5,788,398
Sale                                                    1,308,822       1,705,223
Service contract                                        1,215,970         928,530
Transaction                                               368,466            --
                                                     ------------    ------------
      Total Revenues                                   10,070,533       8,422,151
                                                     ------------    ------------
COST OF REVENUES:

Cost of subscription                                    2,076,862       1,521,031

Cost of sale                                              222,250         167,508

Cost of service contract                                  193,308         251,877

Cost of transaction                                       249,897            --
                                                     ------------    ------------
      Total Cost of Revenues                            2,742,317       1,940,416
                                                     ------------    ------------
GROSS PROFIT                                            7,328,216       6,481,735
                                                     ------------    ------------
OPERATING EXPENSES:
Selling, general and administrative                     6,436,187       3,382,121
Research and development                                  178,793          78,318
Depreciation and amortization                           1,016,985         516,757
                                                     ------------    ------------
      Total Operating Expenses                          7,631,965       3,977,196
                                                     ------------    ------------
(LOSS) EARNINGS FROM OPERATIONS                          (303,749)      2,504,539

Interest expense                                          (87,045)       (111,095)

Investment income                                          81,951          48,246

Other expense                                             (32,063)         (9,323)
                                                     ------------    ------------
(LOSS) EARNINGS BEFORE (BENEFIT) PROVISION FOR
   INCOME TAXES AND MINORITY INTEREST                    (340,906)      2,432,367

(BENEFIT) PROVISION FOR INCOME TAXES                     (132,771)        968,825
                                                     ------------    ------------
(LOSS) EARNINGS BEFORE MINORITY INTEREST                 (208,135)      1,463,542

MINORITY INTEREST IN NYFIX MILLENNIUM - NET OF TAX        305,881            --
                                                     ------------    ------------
NET EARNINGS                                         $     97,746    $  1,463,542
                                                     ============    ============
BASIC EARNINGS PER COMMON SHARE                      $       0.00    $       0.06
                                                     ============    ============
BASIC WEIGHTED AVERAGE COMMON SHARES OUTSTANDING       27,900,932      25,195,953
                                                     ============    ============
DILUTED EARNINGS PER COMMON SHARE                    $       0.00    $       0.05
                                                     ============    ============
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING     29,209,552      26,920,089
                                                     ============    ============

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

                                       4




                          NYFIX, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                                               Three Month Period Ended
                                                                            March 31, 2002    March 31, 2001
                                                                            --------------    --------------


NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                          $ (1,066,534)   $  1,022,827
                                                                             ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of marketable securities                                         (2,345,542)           --
    Proceeds from sales of marketable securities                               22,543,034            --
    Capital expenditures                                                         (765,912)     (1,086,040)
    Proceeds from sale of equipment                                               372,824            --
    Payments for acquisition of Javelin Technologies, net of cash acquired     (9,435,611)           --
    Investment in EuroLink Network                                             (4,000,000)           --
    Cash acquired from NYFIX Millennium                                         3,205,831            --
    Repayment of advances to NYFIX Millennium prior to acquisition              2,139,605         792,909
    Payments for product enhancement costs and other assets                      (562,083)       (858,215)
                                                                             ------------    ------------
                      Net cash provided by (used in) investing activities      11,152,146      (1,151,346)
                                                                             ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments under capital lease obligations                           (228,522)       (196,154)
    Repayment of borrowings                                                          --          (250,000)
    Net proceeds from issuance of common stock                                     92,289         432,463
                                                                             ------------    ------------
                     Net cash used in financing activities                       (136,233)        (13,691)
                                                                             ------------    ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                9,949,379        (142,210)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                  4,967,537       4,866,629
                                                                             ------------    ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                     $ 14,916,916    $  4,724,419
                                                                             ============    ============

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

                                       5





NYFIX, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



1.          ORGANIZATION

            NYFIX,  Inc. is listed on the Nasdaq  Stock  Market under the symbol
            NYFX.

            References  herein to "we",  "our" and the "Company" refer to NYFIX,
            Inc. and consolidated  subsidiaries unless the context  specifically
            requires otherwise.


2.          BASIS OF PRESENTATION

            The  accompanying   unaudited   condensed   consolidated   financial
            statements   have  been  prepared  in  accordance   with  accounting
            principles  generally  accepted in the United  States of America for
            interim  financial  information  and with the  instructions  to Form
            10-Q. In the opinion of management, all adjustments,  which comprise
            normal  and  recurring  accruals  considered  necessary  for a  fair
            presentation,  have been  included.  The  preparation  of  financial
            statements  in  conformity  with  accounting   principles  generally
            accepted in the United States of America requires management to make
            estimates and assumptions that affect the reported amounts of assets
            and liabilities and disclosure of contingent  assets and liabilities
            at the date of the financial statements, and the reported amounts of
            revenues and expenses  during the reporting  period.  Actual results
            could differ from those estimates.  Operating  results for the three
            month period ended March 31, 2002 are not necessarily  indicative of
            the results  that may be expected  for the year ending  December 31,
            2002. For further information,  refer to the consolidated  financial
            statements and footnotes  thereto  included in the Company's  annual
            report on Form 10-K for the year ended December 31, 2001.


3.          INVENTORY

            Inventory consists of parts,  finished goods and minor materials and
            is stated at the lower of cost, determined on an average cost basis,
            or market.

                                                 March 31,  December 31,
                                                  2002         2001
                                                  ----         ----
                                               (unaudited)
            Parts and materials                $  708,436   $1,120,329
            Work in process                       151,702      151,702
            Finished goods                        741,042      409,561
                                               ----------   ----------
                                                1,601,180    1,681,592
            Less: Allowance for obsolescence       82,001       82,000
                                               ----------   ----------
                                 Total         $1,519,179   $1,599,592
                                               ==========   ==========


                                       6





4.          PROPERTY AND EQUIPMENT, NET

            Property and equipment consists of the following:

                                                  March 31,    December 31,
                                                    2002           2001
                                                    ----           ----
                                                (unaudited)

Computer software                                $3,469,163    $1,124,341
Leasehold improvements                            1,909,365     1,312,417
Furniture and equipment                           5,509,007     3,252,658
Subscription and service bureau equipment        16,993,078    15,880,883
Service bureau equipment under capital leases     2,546,842     2,546,842
                                                -----------   -----------
                                                 30,427,455    24,117,141
Less: Accumulated depreciation                   11,133,602     9,751,044
                                                -----------   -----------
                      Total                     $19,293,853   $14,366,097
                                                ===========   ===========


5.          GOODWILL AND OTHER ACQUIRED INTANGIBLES

            Goodwill and other  acquired  intangibles at March 31, 2002 consists
of the following:

                                                    March 31,
                                                      2002
                                                      ----

                                                   (unaudited)

               NYFIX Millennium                    $30,005,963
               Javelin Technologies                 52,070,603
               Broker/Dealer (NYFIX Transaction
                 Services, pending NASD approval)       34,000
                                                   -----------
                                     Total         $82,110,566
                                                   ===========

            NYFIX Millennium:

            NYFIX Millennium,  L.L.C. ("NYFIX Millennium"), a broker-dealer,  is
            an Alternative Trading System which provides a real-time,  anonymous
            automated  matching  system for  equity  trading.  NYFIX  Millennium
            leverages the NYFIX  network's order routing share volume to provide
            a more efficient liquidity source for the financial community.

            In September  1999,  NYFIX  Millennium was formed by NYFIX and seven
            international  investment banks and brokerage  firms,  consisting of
            Deutsche Bank, ABN Amro  Securities  (formerly ING Barings),  Lehman
            Brothers,  Morgan Stanley,  Alliance  Capital  (formerly  Sanford C.
            Bernstein & Co.),  Societe  Generale (SG Cowen) and UBS Warburg (the
            "Initial Partners").  Each partner,  including the Company, invested
            $2.0  million  in NYFIX  Millennium.  Each of the  Initial  Partners
            received 25,000 units of NYFIX Millennium, collectively owning a 50%
            membership interest in NYFIX Millennium, with the Company owning the
            remaining 50%. In addition,  the Company  purchased an option to buy
            from the Initial  Partners an additional 30% membership  interest in
            NYFIX Millennium (the "Option"),  for which the Company paid each of

                                       7





            the Initial  Partners 281,250 shares of its common stock. The Option
            allowed  the Company to increase  its  membership  interest in NYFIX
            Millennium up to 80% of the total  membership  interest  through the
            exchange  of one  share of its  common  stock for each unit of NYFIX
            Millennium purchased, subject to certain adjustments.

            In March 2001, NYFIX Millennium added four more partners, consisting
            of  Bank of  America,  Wachovia  Securities  (formerly  First  Union
            Securities)  and LabMorgan  Corporation  (formerly J.P. Morgan & Co.
            and Chase H&Q) (the "New  Partners").  Pursuant  to the terms of the
            operating  agreement of NYFIX Millennium,  each New Partner invested
            $2.0 million in NYFIX  Millennium and received 25,000 units of NYFIX
            Millennium.  The Company  maintained its 50% membership  interest in
            NYFIX  Millennium in exchange for reducing  certain of its rights to
            share in future  dividend  distributions  of NYFIX  Millennium.  The
            Company issued 94,000 shares of its common stock to each New Partner
            in  return  for  the  same  Option  noted  above,   with   LabMorgan
            Corporation  (as the  successor to two partners)  receiving  188,000
            shares.

            In a letter dated January 23, 2002, the Company notified the Initial
            Partners  and New  Partners  that the  Company  was  exercising  the
            Option,  effective  February 1, 2002.  In exchange for the increased
            membership  interest  in  NYFIX  Millennium,  the  Company  paid the
            Initial  Partners and New Partners an aggregate of 296,250 shares of
            its common stock with a fair value of $4,506,000,  with each Initial
            Partner receiving 33,750 shares of common stock and each New Partner
            receiving  15,000 shares of common stock.  As a result,  the Company
            now  has  an  80%  membership  interest  in  NYFIX  Millennium.  The
            acquisition  was  accounted  for  as  a  purchase.  The  results  of
            operations   of  NYFIX   Millennium   have  been   included  in  the
            consolidated  results of operations  since the date of  acquisition.
            The Company has not completed  the final  allocation of the purchase
            price to the tangible  and  intangible  assets of NYFIX  Millennium.
            Asset valuations will be performed by an independent third-party and
            are on-going as of the date of this filing.  Upon  completion of the
            valuations,  assets other than goodwill will be amortized over their
            respective useful lives.

            The Company's total investment in NYFIX Millennium of $27,500,000 at
            December 31, 2001, consists of $25,500,000 (1,968,750 shares in 1999
            of Company stock x $8.89 and 376,000  shares in March and April 2001
            of  company  stock x $21.28)  and a  capital  cash  contribution  of
            $2,000,000.  The Company had  temporarily  funded certain  operating
            costs and capital  expenditures on behalf of NYFIX Millennium.  Such
            advances  were  reflected  as  Due  from  NYFIX  Millennium  on  the
            Company's  consolidated  balance  sheet as of December 31, 2001.  In
            addition the Company has loaned  $6,000,000,  plus accrued interest,
            to NYFIX  Millennium.  Such  advances  and loan  are  eliminated  in
            consolidation as of March 31, 2002.

            Pursuant to the NYFIX Millennium  Operating  Agreement,  as amended,
            the first  $22,000,000  in losses since  inception were allocated to
            the Initial  Partners and New Partners,  which equaled the extent of
            their  capital  investment  in  NYFIX  Millennium.  Pursuant  to the
            Operating Agreement, the Company recognized $1,762,000 in losses for
            the period ended March 31, 2002, and will  recognize  future losses,
            if any, up to the Company's  cash  investment  of $2,000,000  before
            such  losses  will be  allocated  80% to the  Company and 20% to the
            Initial Partners and New Partners.

            Javelin Technologies:

            Javelin  Technologies,  Inc.  ("Javelin")  is a leading  supplier of
            electronic trade communication  technology and a leading provider of
            Financial  Information Exchange (FIX) technology.  Javelin solutions
            provide  universal   connectivity,   streamlining  of  workflow  and
            elimination  of  the  high  costs  and  risks  associated  with  the
            development    of    proprietary    network   links   and   protocol
            implementations.

            On March  31,  2002,  the  company  acquired  the  capital  stock of
            Javelin.  The Company financed the transaction with a combination of
            (i)  $10,300,000 of cash,  (ii) 2,784,896  shares of common stock of

                                       8




            the Company  having a fair value of  $41,189,000  and (iii)  493,636
            shares  of  common  stock  of the  Company  having  a fair  value of
            $3,459,000  reserved for  issuance  upon  exercise of Javelin  stock
            options assumed by the Company.  In addition,  the Company agreed to
            potentially pay additional consideration to the Javelin stockholders
            based on Javelin's  revenues for the year ending  December 31, 2002.
            The acquisition was accounted for as a purchase. The Company has not
            completed the final allocation of the purchase price to the tangible
            and intangible assets of Javelin. Asset valuations will be performed
            by an  independent  third-party  and are  on-going as of the date of
            this filing.  Upon completion of the  valuations,  assets other than
            goodwill will be amortized over their respective useful lives.


            NYFIX Transaction Services:

            In December 2001, the Company acquired an inactive broker-dealer for
            $34,000  and has a  pending  application  filed  with  the  National
            Association of Securities Dealers (NASD).  Pending the approval, the
            Company   plans  to  change  the   broker-dealer's   name  to  NYFIX
            Transaction  Services,  Inc. ("NYFIX Transaction  Services").  NYFIX
            Transaction  Services will be a wholly owned  subsidiary which plans
            to provide execution and smart order routing solutions  primarily to
            domestic and international  broker-dealers  and specialized  trading
            firms for a single per share fee. The  acquisition was accounted for
            as a purchase and the cost of the  acquisition has been allocated to
            goodwill.

6.          INVESTMENT IN EUROLINK NETWORK

            On March 6, 2002, the Company  acquired a 40% ownership  interest in
            EuroLink Network, Inc. ("Eurolink"),  a privately held company based
            in Madrid,  Spain, which offers direct electronic access to the U.S.
            equity  markets  from Europe.  The Company  acquired its interest in
            return  for  granting   licensing   and   distribution   rights  and
            $4,000,000.  Under the terms of the  agreement,  EuroLink will offer
            the Company's  equity  terminals,  market access and services to the
            European  marketplace,  primarily on a  transaction  fee basis.  The
            terms of the  agreement  give the Company the option to increase its
            ownership  interest  in  EuroLink  to  80%  at  a  later  date.  The
            investment  in  EuroLink  is being  accounted  for under the  equity
            method. During the period ended March 31, 2002, the Company recorded
            a loss of  $32,000 on the  investment,  which is  included  in other
            expense on the consolidated statement of earnings.

7.          OTHER ASSETS

            Included in other assets are deferred product  enhancement  costs of
            $3,489,000  as of March 31, 2002 and  $3,411,000  as of December 31,
            2001, net of accumulated  amortization of $5,513,000 as of March 31,
            2002 and  $5,038,000  as of December 31,  2001.  Included in cost of
            revenues is  amortization  expense of deferred  product  enhancement
            costs of $474,000  and $358,000 for the three months ended March 31,
            2002 and 2001, respectively.

                                       9





ACCRUED EXPENSES

            Accrued expenses consists of the following:

                                                March 31,   December 31,
                                                  2002        2001
                                                  ----        ----
                                              (unaudited)

             Income taxes payable             $    5,859   $  535,562
             Taxes, other than income taxes    1,792,657    1,728,856
             Commissions payable                 476,245      560,474
             Payroll-related accruals            191,876      334,323
             Other current liabilities           694,598      371,212
                                              ----------   ----------
                                   Total      $3,161,235   $3,530,427
                                              ==========   ==========

9.          CAPITAL STOCK

            In connection with the acquisitions mentioned in Note 5, the Company
            issued  296,250  shares  of  common  stock to the  NYFIX  Millennium
            Initial  Partners and New Partners on February 1, 2002,  with a fair
            value of $4,506,000, and 2,784,896 shares of common stock to Javelin
            stockholders on March 31, 2002, with a fair value of $41,189,000.

10.         PER SHARE INFORMATION

            The Company's  basic earnings per share ("EPS") is calculated  based
            on  net   earnings   available  to  common   shareholders   and  the
            weighted-average  number of shares  outstanding  during the reported
            period.  Diluted EPS includes  additional dilution from common stock
            equivalents,  such as stock  issuable  pursuant  to the  exercise of
            stock options and warrants.

                                               Three Month Period Ended
                                            March 31, 2002  March 31, 2001
                                            --------------  --------------

Net earnings                                  $    97,746   $ 1,463,542
                                              ===========   ===========

Basic weighted average shares outstanding      27,900,932    25,195,953
                                              ===========   ===========

Basic earnings per common share               $      0.00   $      0.06
                                              ===========   ===========

Basic weighted average shares outstanding      27,900,932    25,195,953
     Dilutive options                           1,308,620     1,691,423
     Dilutive warrants                               --          32,713
                                              -----------   -----------
Diluted weighted average shares outstanding    29,209,552    26,920,089
                                              ===========   ===========

Diluted earnings per common share             $      0.00   $      0.05
                                              ===========   ===========

                                       10




11.         IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

            In June 2001, the FASB issued two new  pronouncements:  SFAS No. 141
            ("SFAS  141"),  "Business  Combinations,"  and SFAS No.  142  ("SFAS
            142"),  "Goodwill and Other  Intangible  Assets." SFAS 141 prohibits
            the use of the pooling-of-interest  method for business combinations
            initiated  after June 30,  2001,  and also  applies to all  business
            combinations accounted for by the purchase method that are completed
            after June 30, 2001. There are also transition provisions that apply
            to business  combinations  completed  before July 1, 2001, that were
            accounted  for by the purchase  method.  SFAS 142 is  effective  for
            fiscal years  beginning after December 15, 2001, to all goodwill and
            other intangible  assets  recognized in an entity's balance sheet at
            that  date,   regardless  of  when  those  assets  were   originally
            recognized.  The  Company  has  adopted  SFAS 141 and SFAS 142.  The
            Company  has  goodwill   recorded  on  its  consolidated   financial
            statements as a result of  acquisitions  made primarily in the first
            quarter of 2002,  but has not completed the final  allocation of the
            purchase  price  to the  tangible  and  intangible  assets  of NYFIX
            Millennium  or  Javelin  Technologies.  Asset  valuations  for  both
            acquisitions will be performed by independent  third-parties and are
            on-going as of the date of this filing. Until those asset valuations
            are completed,  the impact of SFAS 142 on the Company's consolidated
            financial statements will not be known.

            In  October  2001,  the FASB  issued  SFAS  No.  144  ("SFAS  144"),
            "Accounting   for  the  Impairment  of  Long-Lived   Assets,"  which
            supercedes SFAS No. 121 ("SFAS 121"), "Accounting for the Impairment
            of Long-Lived  Assets and for Long-Lived  Assets to be Disposed of,"
            and  the  accounting  and  reporting   provisions  of  APB  No.  30,
            "Reporting  the  Results of  Operation  -  Reporting  the Effects of
            Disposal of a Segment of a Business, and Extraordinary,  Unusual and
            Infrequently Occurring Events and Transactions," for the disposal of
            a segment of a business.  SFAS 144 retains many of the provisions of
            SFAS 121, but addresses  certain  implementation  issues  associated
            with  that  Statement.  SFAS  144  is  effective  for  fiscal  years
            beginning  after  December  15, 2001.  The Company  adopted SFAS 144
            effective  January 1, 2002. The adoption of SFAS 144 did not have an
            impact on the financial  position,  results of  operations,  or cash
            flows of the Company.

12.         BUSINESS SEGMENT INFORMATION

            Prior to 2002, the Company  operated in a single industry segment as
            a provider of electronic trading  infrastructure and technologies to
            the  professional  trading  segment of the brokerage  community.  In
            2002,  the  Company  increased  its  ownership   interest  in  NYFIX
            Millennium from 50% to 80%, and filed a membership  application with
            the NASD (which is currently  pending) to operate as a broker/dealer
            through NYFIX Transaction Services.

            As a result of these  acquisitions,  the Company  now  operates as a
            financial  services  technology  company in two  industry  segments,
            Technology Services and Transaction Services.

            The Technology Services segment provides desktop solutions, wireless
            exchange   floor   systems,   electronic   automation   systems  and
            straight-through  processing to the professional  trading segment of
            the brokerage community.

            The  Transaction  Services  segment  provides  an  electronic  order
            routing and matching  environment.  This segment provides  anonymous
            order   matching  and  execution   services  to  both  our  existing
            technology customers and web based desktop users.

                                       11





Summarized financial information by business segment as follows (in 000's):

                                           Three Month Period Ended
                                      March 31, 2002    March 31, 2001
                                      --------------    --------------

          Revenues:
               Technology Services      $  9,702           $  8,422
               Transaction Services          369               --
                                        --------           --------
            Total revenues              $ 10,071           $  8,422
                                        ========           ========

            Gross profit:
               Technology Services      $  7,209           $  6,482
               Transaction Services          119               --
                                        --------           --------
            Total gross profit          $  7,328           $  6,482
                                        ========           ========

            Identifiable assets:
               Technology Services      $ 92,743
               Transaction Services       35,017
               Corporate                  33,724
                                        --------
            Total identifiable assets   $161,484
                                        ========

13.         COMPREHENSIVE INCOME

            The components of other  comprehensive  income,  net of tax, were as
            follows:

                                                      Three Month Period Ended
                                                  March 31, 2002      March 31, 2001
                                                  --------------      --------------

            Net earnings                            $   97,746          $1,463,542
            Change in net unrealized loss on
                available-for-sale securities           35,675                --
                                                    ----------          ----------
            Total comprehensive income              $  133,421          $1,463,542
                                                    ==========          ==========

            The components of accumulated other  comprehensive loss, net of tax,
            were as follows:

                                                     March 31,         December 31,
                                                      2002                2001
                                                      ----                ----

            Accumulated net unrealized loss on
               available-for-sale securities        $       -           $ (35,675)
                                                    ----------          -----------
            Total accumulated other comprehensive
               loss                                 $       -           $ (35,675)
                                                    ==========          ===========

                                       12





14.          CASH FLOW SUPPLEMENTAL INFORMATION

                                                                        Three Month Period Ended
                                                                            March 31,    March 31,
                                                                             2002          2001
                                                                             ----          ----

              Supplemental disclosures of cash flow information:
              Cash paid during the period for interest                   $   159,785   $    94,030
              Cash paid during the period for income taxes                   585,800        22,905

              Supplemental schedule of noncash investing and financing
              information:
              NYFIX Millennium:
              Fair value of assets acquired, net of cash acquired        $39,144,071          --
              Fair value of liabilities assumed                           10,343,939          --
              Common stock issued for acquisition                          4,505,963     4,000,000

              Javelin:
              Fair value of assets acquired, net of cash acquired        $58,867,183          --
              Fair value of liabilities assumed                            4,784,035          --
              Common stock issued for acquisition                         41,188,612          --
              Stock options assumed                                        3,458,925          --

15.         PRO FORMA SUPPLEMENTAL INFORMATION

            The  effect  of  consolidating   the  operating   results  of  NYFIX
            Millennium (a development stage company) was as follows:

                                                         Three Month Period Ended
                                                              March 31, 2002
                                                         ------------------------
                                                                        NYFIX
                                                          NYFIX      Without NYFIX
                                                        As Reported    Millennium
                                                        ----------   --------------
Revenues                                                $10,070,533   $9,702,067
                                                        ===========   ==========

Gross profit                                            $ 7,328,216   $7,209,647
                                                        ===========   ==========

(Loss) earnings from operations                         $  (303,749)  $1,900,914
                                                        ===========   ==========

Earnings (loss) before provision for income taxes and
minority interest                                       $  (340,906)  $1,922,590
                                                        ===========   ==========

Earnings (Loss) before minority interest                $  (208,135)  $1,173,808
                                                        ===========   ==========

Net earnings                                            $    97,746   $1,173,808
                                                        ===========   ==========

Basic and diluted earnings per common share             $      0.00   $     0.04
                                                        ===========   ==========

                                       13



Following are the summarized  unaudited pro forma combined results of operations
for the three months ended March 31, 2002 and 2001,  assuming the acquisition of
NYFIX  Millennium  had  taken  place at the  beginning  of each of those  fiscal
periods,  and giving  effect to the  addition of the New Partners and the Option
exercise as of January 1, 2001.  The  unaudited  pro forma  combined  results of
operations for both periods were prepared based upon the consolidated statements
of earnings of NYFIX and the  statements of operations of NYFIX  Millennium  for
the respective periods.  The unaudited pro forma combined financial  information
presented  below does not reflect  future events that may occur after the Option
exercise.  As a result of these assumptions,  estimates and  uncertainties,  the
accompanying unaudited pro forma combined financial information does not purport
to describe the actual  financial  condition or results of operations that would
have  been  achieved  had the  Option  exercise  in fact  occurred  on the  date
indicated,  nor does it purport to predict NYFIX's future results of operations.
The pro forma combined results of operations including the results of operations
of Javelin will be included in the Company's  Current Report on Form 8-K/A to be
filed no later than June 14, 2002, and in subsequent quarterly filings.

                                       Three Month Period Ended
                                 ------------------------------------
                                   March 31, 2002  March 31, 2001
                                   --------------  --------------

Net revenues                        $10,147,539   $   8,422,151
                                    ===========   =============

Net earnings                        $    97,746   $   1,463,542
                                    ===========   =============

Basic earnings per common share     $      0.00   $        0.06
                                    ===========   =============

Diluted earnings per common share   $      0.00   $        0.05
                                    ===========   =============

                                       14





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

Critical Accounting Policies and Estimates

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities  and the disclosure of contingent  assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an on-going basis, management evaluates
its  estimates and  judgments,  including  those related to accounts  receivable
reserves,   investments,   long-lived  assets,   revenue  recognition,   product
enhancement  costs,  income  taxes  and  contingencies.   Management  bases  its
estimates and judgments on  historical  experience  and on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for  making  judgments  about the  carrying  values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

Effective  February 1, 2002,  NYFIX  Millennium is included in the  consolidated
financial statements of the Company.  Pursuant to the NYFIX Millennium Operating
Agreement,  the  first  $22,000,000  of losses  were  allocated  to the  Initial
Partners and New Partners of NYFIX  Millennium which equaled the extent of their
capital  investment  in NYFIX  Millennium.  The next  $2,000,000  of losses  are
allocated to the Company and any additional  losses will be allocated 80% to the
Company and 20% to the  Initial  Partners  and New  Partners.  Accordingly,  the
Company  recognized  $1,762,000  of losses  before taxes  attributable  to NYFIX
Millennium  in the three month period ended March 31, 2002. On a pro forma basis
without NYFIX Millennium, earnings before taxes and net earnings would have been
$1,923,000 and $1,174,000, respectively.

For a list of the critical accounting policies that Management  believes,  among
others,  affect  its  more  significant  judgments  and  estimates  used  in the
preparation of its  consolidated  financial  statements,  refer to  Management's
Discussion and Analysis in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001.

Overview

The  Company's  revenues  comprise  subscription,  sales,  service  contract and
transaction revenue.  Consistent with the Company's transition to a subscription
sales model,  subscription  fees  represent a majority and  increasing  share of
total  revenues.  Subscription  revenue  contracts are primarily  with brokerage
firms,  international  banks and global exchanges  trading in equities,  and are
generally  for an  initial  period of one to three  years with one to three year
renewal periods.  Subscription revenues are recognized ratably over the lives of
the  subscription  agreements  with  customers  and begin once  installation  is
complete.  Sales  revenue,  which is  comprised  of  software  sales and capital
equipment  sales,  is generated  primarily by sales to customers in the futures,
options and currencies  trading  market,  and is recognized upon shipment of the
product and acceptance by the customer. Service contract revenue is comprised of
maintenance contracts for capital sales equipment and subscription equipment and
is  recognized  ratably  over the period that the service is  provided.  Service
contract  revenue on  subscription  contracts is charged to customers as a fixed
percentage of such  contracts.  Transaction  revenue  consists of per-share fees
charged to  customers  who route orders  through the  Company's  order  matching
system.

Cost of revenues  principally  consists of communication  lines for subscription
and transaction services,  amortization of capitalized product enhancement costs
and depreciation of subscription-based equipment, labor, materials and overhead,
execution and clearing fees.

Selling,  general and  administrative  expenses  account for the majority of the
Company's  operating  expenses  and consist of salaries and  benefits,  rent and
office  expenses,  non-customer  specific  communication  fees,  provisions  for

                                       15




doubtful  accounts and marketing  expenses.  During the past several years,  the
Company has expanded its efforts to support an increasing number of services and
to increase the number of exchanges, brokerage firms and "buy-side" institutions
connecting  to  the  NYFIX  Network.  Management  believes  that  its  continued
investment  in  the   development   of  the  NYFIX  system  and  its  associated
applications  and  services  has  increased  order  flow,  which in turn  should
facilitate both revenue growth and further distribution of its products.

Research  and  development  expenses  relate  to  developing  new  products  and
technologies  to meet the current and future needs of the  Company's  customers.
These costs  consist  primarily of salaries and related  costs for technical and
programming personnel.

Depreciation and amortization  expense consists of depreciation and amortization
of equipment and software used to operate the Company's systems.

The following  discussion and analysis  should be read in  conjunction  with the
consolidated financial statements and notes thereto.  Historical results are not
necessarily indicative of the operating results for any future period.

Results of Operations

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001

Revenues
Subscription  revenue  increased 24% to $7,177,000 in 2002,  from  $5,788,000 in
2001, principally due to increased demand among existing customers, and also the
addition of new  customers  and new product  offerings  sold to existing and new
customers. As a percentage of total revenues,  subscription revenue increased to
71% in 2002 from 69% in 2001.

Sales revenue  decreased 23% to $1,309,000 in 2002, from $1,705,000 in 2001. The
decrease in sales revenue is  principally  due to delays in customer  demand for
the Company's Order Book Management System ("OBMS") derivatives trading software
products.  As a percentage of total revenue,  sales revenue  decreased to 13% in
2002,  from 20% in 2001,  with software  sales  comprising the majority of sales
revenue.

Service  contracts revenue increased 31% to $1,216,000 in 2002, from $929,000 in
2001,  principally due to an increase in  subscription  contract  revenue.  As a
percentage of total revenue,  service  contract  revenue  comprised 12% of total
revenue, as compared to 11% in 2001.

Transaction  revenue  represented  4% of total revenues and is  attributable  to
NYFIX  Millennium,  whose  results are  included in the  consolidated  financial
statements since February 1, 2002.

Cost of Revenues and Gross Profit
Gross profit as a percentage of total revenues decreased to 73% in 2002 from 77%
in 2001, as gross profit on a percentage  basis  improved for both  subscription
and sales revenues. The increase in gross profit percentage principally resulted
from an increase in the amount of higher  margin  software  installations.  On a
dollar basis, gross profit improved for all four revenue  categories,  which was
offset somewhat by increased communication charges relating to increased desktop
connections,  higher labor costs due to  increased  service  contract  revenues,
increased   depreciation  expense  for   subscription-based   equipment  due  to
additional  units being placed into service and higher  amortization  expense of
product enhancement costs. Included in cost of revenues was amortization expense
of  product  enhancement  costs of  $474,000  and  $358,000  for 2002 and  2001,
respectively.  Also  included in cost of revenues was  depreciation  expense for
subscription-based  equipment  of  $526,000  and  $453,000  for 2002  and  2001,
respectively.  The Company  obtains its materials and supplies from a variety of
vendors  in the U.S.  and  Asia and did not  experience  any  significant  price
increases in its component parts purchased during 2002.

                                       16




Selling, General and Administrative
Selling,  general and  administrative  expenses  increased  90% to $6,436,000 in
2002,  from  $3,382,000 in 2001, and increased as a percentage of total revenues
to 64% in 2002 from 40% in 2001. This increase includes $2,088,000  attributable
to NYFIX  Millennium  in 2002.  The dollar  increase  in excess of the  expenses
attributable to NYFIX Millennium  reflects  increased  salaries and commissions,
related  personnel  costs,  rent expense and various  office  expenses due to an
increase in personnel to support the  Company's  growth.  Also  increasing  were
non-recoverable  communication  fees,  and  software  and  computer  support and
maintenance  contract  fees due to the  continued  investment  in the  Company's
infrastructure.

Research and Development
Research and development expenses increased to $179,000 in 2002, from $78,000 in
2001,  primarily as a result of the Company's  efforts on developing new product
lines.

Depreciation and Amortization
Depreciation and amortization expenses increased 97% to $1,017,000 in 2002, from
$517,000 in 2001. Included in this increase is $235,000 of depreciation  expense
from NYFIX Millennium.  The increase,  exclusive of NYFIX  Millennium,  reflects
principally  the  continued  investment  in  the  Company's  infrastructure,  in
addition to  administrative  support  equipment  and leasehold  improvements  to
support the Company's growth.

Interest Expense
Interest  expense  decreased  22% to $87,000  in 2002,  from  $111,000  in 2001,
principally  as a result of decreased  interest on capital lease  obligations of
$21,000 and a $54,000  decrease in other  interest  expense due to the payoff of
the Company's line of credit during July 2001,  offset by other interest expense
of $51,000.

Investment Income
Investment  income  increased  71% to  $82,000  in 2002,  from  $48,000 in 2001,
principally  due to interest and  dividends  earned on a higher  balance of cash
equivalents  and  marketable  securities in 2002 as compared to 2001. The higher
balance of cash  equivalents  and  marketable  securities is due to the proceeds
received from the Company's follow-on public offering in June 2001.

(Benefit) Provision for Income Taxes
The Company recorded a tax benefit of $133,000 in 2002,  compared to a provision
for income  taxes of $969,000  in 2001.  The tax  benefit is  attributable  to a
pretax loss in 2002,  resulting  from the  consolidation  of NYFIX  Millennium's
results for the two months ended March 31, 2002.  The  Company's  effective  tax
benefit rate of 39% in the current period exceeds the Federal  statutory benefit
rate primarily due to state income taxes.

Liquidity and Capital Resources

In June 2001, the Company raised $57,284,000 from a follow-on public offering of
3,000,000  shares of its common  stock,  net of  expenses.  The  Company  used a
portion of the net  proceeds  for working  capital,  to  purchase  shares of its
common stock and for other general corporate purposes. The Company has also used
a portion of the net  proceeds  for  acquisitions  of  businesses,  products and
technologies or the  establishment  of joint ventures that are  complementary to
our business. At March 31, 2002, the cash and cash equivalents balance increased
to $14,917,000 from $4,968,000 at December 31, 2001 primarily as a result of the
sale of  marketable  securities,  cash acquired  from the  acquisition  of NYFIX
Millennium, repayment of advances to NYFIX Millennium and proceeds from the sale
of equipment,  offset by payments for the  acquisition  of Javelin  Technologies
(net of cash acquired),  investment in EuroLink Network, purchases of marketable
securities, capital expenditures, the acquisition of other assets to support the
Company's   infrastructure   and   repayments   under  loan  and  capital  lease
obligations.

On March 6, 2002,  the  Company  acquired a 40%  ownership  interest in EuroLink
Network,  Inc.  ("EuroLink"),  a privately held company based in Madrid,  Spain,
which offers direct  electronic  access to the U.S.  equity markets from Europe.

                                       17





The  Company  acquired  its  interest  in  return  for  granting  licensing  and
distribution rights and $4,000,000.  Under the terms of the agreement,  EuroLink
will offer the  Company's  equity  terminals,  market access and services to the
European  marketplace,  primarily on a transaction  fee basis.  The terms of the
agreement  give the  Company the option to increase  its  ownership  interest in
EuroLink to 80% at a later date.  This  investment  is  accounted  for under the
equity  method and the  Company  recorded  a loss of $32,000 on this  investment
during the three months ended March 31, 2002.

On March 31, 2002, the Company acquired Javelin Technologies,  Inc. ("Javelin").
Javelin,  widely  known as one of the  pioneers  in FIX  (Financial  Information
exchange  Protocol)  technology,  has over 1,000  installations at more than 300
leading buy and sell-side  institutions,  exchanges and ECNs,  including over 50
clients in Europe and 20 in Asia. Javelin possesses the leading  market-share in
the  buy-side   institutional  market  for  electronic  order  routing  enabling
technology.   The  Company  financed  the  transaction  with  a  combination  of
$10,300,000  in cash and the  issuance  and reserve of common  stock with a fair
value of  approximately  $44,648,000.  The cash  portion  was  financed  through
available  funds. In addition,  the Company agreed to potentially pay additional
consideration to the Javelin  stockholders  based on Javelin's  revenues for the
year ending December 31, 2002.

Some of the Company's key considerations for the acquisition of Javelin include:
increased  connectivity  to  the  buy-side  institutional  market;  consolidated
product offering; cross-selling of core products and transaction services; and a
single  point of  electronic  exchange  access  across  all major  domestic  and
international  equity  and  derivatives  exchanges.  The plan is to embed  NYFIX
Millennium capabilities in Javelin products,  which should reduce implementation
time of the NYFIX Millennium ATS throughout the financial industry.

As a  result  of the  Company's  acquisition  of an  inactive  broker-dealer  in
December 2001, to be renamed NYFIX Transaction Services,  Inc. (pending approval
by the NASD) at a later date, and the agreement  with EuroLink noted above,  the
Company  expects  to  record  transactional  revenue  beginning  in 2002.  NYFIX
Transaction  Services is ready to move into full operational status pending NASD
approval of its membership application.

At March 31, 2002, the Company had invested  $12,550,000  in current  marketable
security  instruments,  having  interest  rates  ranging  from  1.28% to  2.09%,
$770,000 in a tax-free  money fund with an average yield of 0.80% and $7,477,000
in money market funds with a 30 day yield of 1.36%.

At March 31, 2002,  the Company had total debt of $1,438,000,  which  represents
amounts  outstanding  under capital lease  obligations.  At March 31, 2002,  the
Company  had no  material  commitments  for capital  expenditures  or  inventory
purchases.

The Company believes it has sufficient liquidity,  including cash generated from
operations and issuances of common stock, to support its cash needs for at least
the next twelve months.

The following  summarizes  the Company's  contractual  obligations  at March 31,
2002, and the effect such  obligations are expected to have on its liquidity and
cash flows in future periods (in 000's):

                       -------------------------------------------
                                                            After
                        2002     2003      2004    2005     2005
                       -------------------------------------------

Capital leases         $1,001   $1,015   $  405   $   76   $ --
 Non-cancelable
    operating leases    2,382    2,885    2,721    1,762    2,994
                       ------   ------   ------   ------   ------
Total obligations      $3,383   $3,900   $3,126   $1,838   $2,994
                       ======   ======   ======   ======   ======

                                       18





Working Capital
At March 31, 2002 and  December  31,  2001,  the Company had working  capital of
$39,798,000  and  $47,513,000,   respectively.  The  Company's  present  capital
resources include proceeds from internal operations and from issuances of common
stock.  The decrease in working  capital was  principally due to the decrease in
cash and investments  used for the acquisition of Javelin  Technologies  and for
the investment in EuroLink Network..

Cash Provided by Operating Activities
During the three months ended March 31, 2002,  net cash used in  operations  was
$1,067,000 as compared to net cash  provided by operations  for the three months
ended  March 31,  2001 of  $1,023,000.  The  decrease  is  primarily  due to the
decrease  in net  earnings  to  $98,000  in 2002 from  $1,464,000  in 2001.  The
decrease is also due to an increase in accounts receivable of $1,356,000 (net of
accounts receivable acquired from Javelin Technologies and NYFIX Millennium) and
a decrease in  accounts  payable and  accrued  expenses  of  $1,748,000  (net of
accounts  payable and accrued  expenses  acquired from Javelin  Technologies and
NYFIX Millennium).  The increase in accounts  receivable is primarily due to the
increase in the Company's revenues. The decrease in accounts payable and accrued
expenses is primarily  due to payments  made to vendors  during the three months
ended March 31, 2002.

Cash Used in Investing Activities
During the three  months ended March 31,  2002,  net cash  provided by investing
activities  was  $11,152,000  as  compared  to  $1,151,000  of net cash  used in
investing  activities for the three months ended March 31, 2001. The increase is
primarily due to proceeds from the sale of marketable  securities of $22,543,000
(principally  used  for the  acquisition  of  Javelin  Technologies  and for the
investment  in  EuroLink  Network),  cash  acquired  from  NYFIX  Millennium  of
$3,206,000,  repayments of advances to NYFIX  Millennium prior to acquisition of
$2,140,000  and  proceeds  from the sale of  equipment  of  $373,000,  offset by
payments for the acquisition of Javelin  Technologies  (net of cash acquired) of
$9,436,000,  payments  for the  investment  in EuroLink  Network of  $4,000,000,
purchases of  marketable  securities  of  $2,346,000,  capital  expenditures  of
$766,000 and payments for product enhancements and other assets of $562,000.

Cash Provided By Financing Activities
During  the  three  months  ended  March  31,  2002 and  2001,  net cash used in
financing  activities was $136,000 and $14,000,  respectively.  During the three
months ended March 31, 2002, principal repayment under capital lease obligations
of $229,000  were  partially  offset by proceeds of $92,000 from the exercise of
stock options.

Seasonality

The Company  believes  that its  operations  are not  significantly  effected by
seasonality.

Impact of Recently Issued Accounting Pronouncements

In June 2001, the FASB issued two new pronouncements: SFAS No. 141 ("SFAS 141"),
"Business  Combinations,"  and SFAS No. 142 ("SFAS  142"),  "Goodwill  and Other
Intangible Assets." SFAS 141 prohibits the use of the pooling-of-interest method
for business combinations initiated after June 30, 2001, and also applies to all
business  combinations  accounted for by the purchase  method that are completed
after June 30, 2001. There are also transition provisions that apply to business
combinations  completed  before  July 1, 2001,  that were  accounted  for by the
purchase method. SFAS 142 is effective for fiscal years beginning after December
15, 2001, to all goodwill and other intangible  assets recognized in an entity's
balance  sheet at that date,  regardless  of when those  assets were  originally
recognized.  The  Company  has  adopted  SFAS 141 and SFAS 142.  The Company has
goodwill  recorded  on its  consolidated  financial  statements  as a result  of
acquisitions  made primarily in the first quarter of 2002, but has not completed

                                       19





the final allocation of the purchase price to the tangible and intangible assets
of  NYFIX  Millennium  or  Javelin  Technologies.   Asset  valuations  for  both
acquisitions will be performed by independent  third-parties and are on-going as
of the date of this filing.  Until those asset  valuations  are  completed,  the
impact of SFAS 142 on the Company's  consolidated  financial statements will not
be known.

In October 2001, the FASB issued SFAS No. 144 ("SFAS 144"),  "Accounting for the
Impairment of Long-Lived  Assets," which  supercedes  SFAS No. 121 ("SFAS 121"),
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed  of," and the  accounting  and  reporting  provisions of APB No. 30,
"Reporting  the Results of  Operation  - Reporting  the Effects of Disposal of a
Segment of a Business,  and  Extraordinary,  Unusual and Infrequently  Occurring
Events and Transactions," for the disposal of a segment of a business.  SFAS 144
retains many of the provisions of SFAS 121, but addresses certain implementation
issues  associated with that  Statement.  SFAS 144 is effective for fiscal years
beginning  after  December 15,  2001.  The Company  adopted  SFAS 144  effective
January  1,  2002.  The  adoption  of SFAS  144 did not  have an  impact  on the
financial position, results of operations, or cash flows of the Company.

Risk Factors: Forward Looking Statements

This document contains certain forward-looking  statements within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the  safe  harbors   created   thereby.   Investors  are   cautioned   that  all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the  ability of the  Company to market and  develop  its  products.
Although   the   Company   believes   that  the   assumptions   underlying   the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements  included  in this  document  will  prove to be
accurate.   In  light  of  the   significant   uncertainties   inherent  in  the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and plans of the Company will be achieved.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk generally represents the risk of loss that may be expected to result
from the  potential  change in value of a  financial  instrument  as a result of
fluctuations in credit ratings of the issuer,  equity prices,  interest rates or
foreign  currency  exchange  rates.  The  Company  is  exposed  to  market  risk
principally  through  changes in  interest  rates,  equity  prices  and  foreign
currency  exchange rates.  Interest rate exposure is principally  limited to the
$12.6  million of current  marketable  securities  and $14.9 million of cash and
cash  equivalents  invested at March 31, 2002. Risk is limited on the marketable
securities  portfolio  due to the fact that it is invested in insured  municipal
bonds and no more than 5% of the Company's  portfolio can be invested in any one
security issue.

The  fair  value of the  Company's  investment  portfolio  at  March  31,  2002,
approximated  carrying  value  due to its  short-term  duration.  The  potential
decrease  in fair value  resulting  from a  hypothetical  10% change in interest
rates for the cash funds would not be material to  earnings,  cash flows or fair
value.  Current marketable  securities at March 31, 2002, are recorded at a fair
value of $12.6 million.  The potential  decrease in fair value  resulting from a
hypothetical  10%  decrease  in  interest  rates for the  marketable  securities
contained in the investment  portfolio and the tax-free money funds would not be
material to earnings, cash flows or fair value.

As discussed in Note 2 to the consolidated financial statements in the Company's
Form 10-K for the year ended December 31, 2001, the financial  statements of the
Company's  London sales office are remeasured  into U.S.  dollars using the U.S.
dollar as the  functional  currency.  The market risk  associated  with  foreign
currency   exchange   rates  is  not  material  in  relation  to  the  Company's
consolidated  financial  position,  results of  operations  or cash  flows.  The
Company does not use derivative financial instruments for any purpose.

                                       20





PART II

OTHER INFORMATION

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS.

On February 1, 2002,  the Company  issued  296,250 shares of its common stock to
the minority partners of NYFIX Millennium,  L.L.C. The consideration received by
the  Company  for such  issuances  was that the  minority  partners  sold to the
Company 30% of their respective  membership  interests in NYFIX  Millennium,  so
that the Company now owns an 80% membership interest.

On March 31, 2002, the Company issued  2,784,896  shares of its common stock and
paid  $10,300,000 to the stockholders of Javelin  Technologies,  Inc. to acquire
all of the capital stock of Javelin.

In  connection  with  the  issuance  of its  shares  to the  above  entities  or
investors,  the Company  relied on the exemption from  registration  provided by
Section 4(2) of the Securities Act of 1933.

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

      (a)         A special meeting of shareholders was held on March 14, 2002.

      (b)         Not applicable

      (c)         Matter voted on at the meeting and the number of votes cast:

                  Proposal 1 - To authorize the transfer of substantially all of
                  the Company's assets to a newly-created,  direct, wholly-owned
                  subsidiary of the Company.

                  For                         18,918,934
                  Against                        301,606
                  Abstain                        124,354


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

           (a)    EXHIBITS

                  None

(b)         REPORTS ON FORM 8-K

As reported in a Form 8-K dated February 1, 2002 (filed February 14, 2002) under
Item 2,  Acquisition  or  Disposition  of Assets,  in a letter dated January 23,
2002,  the Company  notified  the Initial  Partners  and New  Partners  that the
Company  was  exercising  its  option to  acquire an  additional  30%  ownership
interest in NYFIX  Millennium,  effective  February 1, 2002. In exchange for the
increased membership interest in NYFIX Millennium,  the Company paid the Initial
Partners and New Partners an aggregate of 296,250 shares of the Company's common
stock,  with each Initial  Partner  receiving  33,750 shares of common stock and
each New Partner receiving 15,000 shares of common stock.

                                       21





Also  reported in the same Form 8-K under Item 5, Other  Events,  on October 30,
2001, the Company entered into a Subordinated  Loan Agreement for Equity Capital
(the "Loan  Agreement")  with NYFIX  Millennium,  effective  November  30, 2001,
pursuant to which the Company loaned $6 million to NYFIX Millennium. The loan is
due on  November  30, 2004 and earns  interest at a rate of 7.5% per annum.  The
Loan Agreement was found by the National Association of Securities Dealers, Inc.
(the  "NASD")  to  be  acceptable  as a  satisfactory  subordination  agreement,
effective as of November 30, 2001.

Also  reported in the same Form 8-K,  under Item 7,  Financial  Statements,  Pro
Forma Financial  Information and Exhibits,  the Company  announced it would file
the required  financial  statements  as required by Item 7(a) and Item 7(b),  no
later than April 17, 2002. The Form 8-K/A  containing  the required  information
under Item 7 was filed on April 17, 2002.

As reported in a Form 8-K dated March 12, 2002 (filed March 25, 2002) under Item
5, Other Events,  and under Item 7, Financial  Statements,  Pro Forma  Financial
Information and Exhibits,  on March 12, 2002, the Company issued a press release
announcing   that  it  signed  a  definitive   agreement   to  acquire   Javelin
Technologies, Inc. The Company announced it would finance the transaction with a
combination  of  approximately  $11,000,000  cash and NYFIX  common stock with a
value of approximately  $44,000,000.  In addition, the Company has negotiated an
earn-out  based on Javelin's  2002 revenues.  The  transaction  was scheduled to
close on March 31, 2002.

Omitted  from  this Part II are items  which  are  inapplicable  or to which the
answer is negative for the period presented.

                                       22





                                    SIGNATURE

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




                                   NYFIX, INC.
                                  (Registrant)



                                    By: /s/ Richard A. Castillo
                                        -------------------------
                                        Richard A. Castillo
                                        Chief Financial Officer and Secretary
                                        (Principal Financial and Accounting
                                        Officer)


Dated: May 15, 2002`