SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                     -------
                                   FORM 10-KSB

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
         EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003        Commission File Number 025449

                          PCS RESEARCH TECHNOLOGY, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 Delaware                                 33-0856651
     ---------------------------------               -------------------
       (State or other jurisdiction                   (I.R.S. employer
     of incorporation or organization)               identification no.)

  3655 Nobel Drive, Suite 540, San Diego, California                92122
  --------------------------------------------------             ----------
       (Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code:           (858) 623-1600
Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:
         Common Stock, par value $.0001 per share

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

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

         The aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 23, 2004 was approximately $2,304,027.

         The number of outstanding shares of the registrant's common stock as of
March 23, 2004 was 23,075,336 shares.

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                                TABLE OF CONTENTS
                                -----------------

PART I   .....................................................................2

BUSINESS .....................................................................2

PROPERTIES...................................................................27

LEGAL PROCEEDINGS............................................................27

SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS...........................27

PART II .....................................................................28

MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.............................................................28

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS...............................................29

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..................................41

CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE................................................41

CONTROLS AND PROCEDURES  ....................................................42

PART III ....................................................................43

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT OF THE
         REGISTRANT..........................................................43

EXECUTIVE COMPENSATION.......................................................43

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
         OWNERS AND MANAGEMENT...............................................43

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............................43

EXHIBITS AND REPORTS ON FORM 8-K.............................................43

PRINCIPAL ACCOUNTANT FEES AND SERVICES.......................................45

This Annual Report on Form 10-KSB contains forward-looking statements concerning
future events and performance of our company. You should not rely excessively on
these forward-looking statements, because they are only predictions based on our
current expectations and assumptions. Forward-looking statements often contain
words like "estimate," "anticipate," "believe," "plan," or "expect." Many known
and unknown risks and uncertainties may cause our actual results to differ
materially from those indicated in these forward-looking statements. You should
review carefully the risks and uncertainties identified in this report. We have
no obligation to update or announce revisions to any forward-looking statements
to reflect actual events or developments.

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<PAGE>

                                     PART I
                                     ------

Item 1.  BUSINESS.

The Company
-----------

         PCS Research Technology, Inc. ("PCSRT" or "Parent" or "Company"), based
in San Diego, California and incorporated in Delaware in 1999, is a publisher of
independent investment research. We operate our business activities through
PCSRT and through our wholly owned subsidiary, DP Securities, Inc. ("DPS"), a
broker-dealer incorporated in the State of California. We develop, produce and
sell proprietary research products to mutual funds, hedge funds and investment
banks. Our business strategy is to leverage our development technology and
marketing expertise to be a leading provider of independent research to the
financial services and institutional investment communities.

         We believe there is a growing demand in the institutional investment
community for unbiased independent research, and that the market for such
research is currently underserved. Efficient production and widespread
distribution of most independent research products is currently limited by a
number of factors, including the lack of interactivity and real-time
distribution. In addition, the independent research universe is largely made up
of small, under-capitalized research providers that lack the technological and
marketing expertise to maximize sales.

         We believe our competitive advantage is our ability to both develop
unique research services for the institutional markets and to effectively market
those research services to mutual funds, hedge funds, and investment banks. Our
new product strategy is centered on leveraging technology platforms we have
developed for the distribution of our financial research, data, and analytics.
We provide applications that transform traditional printed research, static
data, and fixed assumptions into a technology-empowered, interactive format. By
manipulating assumptions and conclusions, users receive real-time feedback,
resulting in an improved experience and enhanced productivity. Our marketing
strategy is based on a proprietary multi-step direct sales approach to introduce
and sell our products to potential clients. Our sales team maintains strong
relationships with many of the major mutual funds, hedge funds, and investment
banks and is constantly building new relationships with smaller tier and newer
firms.

Recent Developments

Name Change

         In January 2004, the Company announced that it is changing its name to
Sagient Research Systems. The Company has begun doing business under the new
name, and expects that the formal name change will occur following its annual
shareholder meeting, which will be held during the second quarter of 2004, where
the name change will be submitted for shareholder approval.

                                       2
<PAGE>

Restructuring

         During 2002 and though the first quarter of 2003, the Company also
operated through its wholly owned subsidiary PCS Securities, Inc. ("PCS"), a
broker-dealer incorporated in the State of Washington. In January 2003, the
Company announced plans to close PCS Securities, Inc. during 2003 as part of a
restructuring of its operations. The decision to close PCS Securities was
reached after the automatic termination of the marketing agreement between the
Company and Institutional Research Services, Inc., a company owned by Raymond A.
Hill III, then a director and consultant to the Company. The marketing agreement
terminated automatically because the Company was unable to satisfy a condition
of the agreement that required the Company to remove Mr. Hill and Susanne
Pruitt, the President of the Company's subsidiary, PCS Securities, Inc., as
personal guarantors of the Company's credit facility by December 21, 2002. Also
contributing to the decision to close the PCS Securities subsidiary was the
Company's inability to finalize terms with its lender for an increase in the
Company's credit facility borrowing limits.

         In 2002, approximately 50% of the PCS Securities' business was
attributable to the marketing agreement and its relationship with Institutional
Research Services. The termination of the marketing agreement would have
resulted in a significant loss of revenues in 2003 without a corresponding
reduction in expenses. In reaching the decision to close the PCS Securities,
management also evaluated the losses attributed to the Company during 2002 and
determined that reaching sustained profitability at PCS Securities at any time
in the near future was unlikely, even had the marketing agreement not been
terminated.

         In order to effect a timely and orderly wind down of PCS Securities,
the Company entered into an agreement with Mr. Hill and Ms. Pruitt. Under the
terms of the agreement, dated as of January 31, 2003, the Company sold the PCS
Securities, Inc. trademark to them in exchange for, among other things, the
surrender and cancellation of a total of 10.3 million shares of the Company's
common stock owned by them and the termination of the employment agreement with
Ms. Pruitt and the consulting agreement with Mr. Hill.

         As of April 30, 2003 the wind down of the PCS Securities business was
completed, and the PCS subsidiary was closed.

         In conjunction with the decision by the Board of Directors to close the
PCS Securities business unit, the Company and its management recommitted to
pursuing its long-term objective of becoming the leading provider of independent
research to the institutional community. In association with this commitment,
the Company has significantly increased its research sales staff, has
re-directed all of the remaining Company assets towards the production,
distribution, and marketing of independent institutional research, and has made
certain operating expense reductions to redundant and unnecessary overhead. The
Company and its management firmly believe that the independent institutional
research market is a viable area in which the Company can compete and succeed.

                                       3
<PAGE>

Board of Directors

Effective March 7, 2003, three independent directors resigned from the Company's
Board of Directors and audit committee for personal reasons.

Business Components
-------------------

Research Production and Distribution

         Our competitive advantages include our ability to produce, deliver, and
integrate independent research products onto our established technology
platforms and to effectively market our research services to the institutional
investment community. We maintain a highly trained staff of technology and
research professionals who are responsible for the production and distribution
of proprietary research products, the creation of new technology and
applications, and the evaluation of prospective independent research products
that could be delivered on our platforms. In addition, we maintain a highly
focused research marketing team that is fully specialized in marketing our
various research services to mutual fund complexes, private equity groups, hedge
funds, and investment banks.

Research Subscription Sales

         The sale of institutional research is typically done on an annual
subscription basis. Subscriptions are paid for by cash payments either directly
from our customers, or through a third-party broker dealer that pays on behalf
of our customers. We maintain an internal sales staff for the marketing of our
proprietary research products.

         Our current portfolio of independent research products includes:

PlacementTracker

         PlacementTracker is a dynamic, customizable research product that
provides customers with market data, research, and analysis on the PIPE (Private
Investment in Public Entity) market. Launched in 1999, PlacementTracker has
become nationally recognized for its coverage of the PIPE market. Featured
extensively in media, academic, and government publications, PlacementTracker's
subscription service is used by numerous sell-side firms and a growing number of
buy-side firms looking for up-to-date, comprehensive, and interactive research
on the PIPE market. PlacementTracker was developed by and is continually updated
and owned exclusively by the Company.

BioMedTracker

         BioMedTracker provides clients easy customizable display and search
capabilities to develop investment decisions regarding companies that develop
pharmaceutical products. The service includes analysis of events that influence
the development of a drug, including clinical and pre-clinical trial data,
partnership agreements, marketing and distribution agreements, related drug
information, and regulatory events. This qualitative analysis is coupled with a

                                       4
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proprietary model that uses historical results to estimate the probability that
the FDA will approve developmental drugs. The model, along with projections of
approval date, market size, market penetration, and other factors, is used to
calculate the value of a company's clinical pipeline. BioMedTracker was
developed by and is continually updated and owned exclusively by the Company.

Earnings Quality Analytics

         Earnings Quality Analytics provides forensic accounting analysis of
large-, mid-, and small capitalization U.S. equity securities. Launched to
counter the loss of confidence in traditional earnings analysis, Earnings
Quality Analytics applies a combination of quantitative and qualitative analysis
to uncover forward-looking indicators of deteriorating earnings quality. The
team of Earnings Quality analysts, world renowned academicians, forensic
accounting experts, and financial engineers identifies those companies with both
the strongest and weakest earnings quality outlooks and produces detailed
research reports identifying specific points of concern, including
sustainability of earnings, customer concentration, inventory turnover,
off-balance sheet obligations, option expensing, corporate governance, and
pending legal matters. The Company maintains an exclusive marketing agreement to
market, sell, and distribute Earnings Quality Analytics to investment firms,
hedge funds, and mutual funds.

ChangeWave Insight

         ChangeWave Insight provides forward-looking sentiment of business
activity in four broad industry segments: Information Technology, Telecom,
Biomedical, and Consumer Electronics & Entertainment. Using a series of
sophisticated polling and survey techniques, ChangeWave Insight measures
sentiment of front-line industry professionals and decision-makers. By filtering
and analyzing its survey data, ChangeWave Insight identifies and evaluates
emerging business trends and formulates specific investment recommendations. The
Company maintains an exclusive marketing agreement to market, sell, and
distribute ChangeWave Insight to investment firms, hedge funds, and mutual
funds.

La Jolla Economics

         La Jolla Economics employs a top down, macro economic approach to
analyze and identify changing trends in the world's economies. Its service
provides professional investors with insights and interpretations necessary to
understand how the geopolitical events of today will impact their portfolios
tomorrow. Focusing on the impact of fiscal and monetary policy changes on the
economics and financial variables such as real GDP growth rates, inflation, the
P/E ratio and the rates of returns on various asset classes, La Jolla Economics'
work determines the impact on stock prices in the aggregate. In addition, it
combines a macro view of political and economic research with a dynamic view of
industry research to serve the full range of institutional clients' needs. The
Company maintains a non-exclusive marketing agreement to market, sell, and
distribute La Jolla Economics to investment firms, hedge funds, and mutual funds
and maintains La Jolla Economics' website.

                                       5
<PAGE>

"Soft-Dollar" Revenue

         Soft-dollar revenue represents commissions received by brokerage firms
as payment for research products or other brokerage services provided to
institutional investors. During 2002, commissions generated from soft-dollar
arrangements through our wholly-owned subsidiary, PCS Securities, Inc. which we
acquired in December 2001, totaled $16,399,594. In exchange for soft-dollar
trading commissions, PCS contracted with independent research providers to pay
them a fixed dollar amount for their research production and, marketed the
research to institutional investors. Effective April 30, 2003, the Company's PCS
subsidiary was closed as part of a major restructuring of operations. See
"Business-Recent Developments". Through April 30, 2003, revenue recognized from
soft-dollar commissions during 2003 totaled $1,115,462. As discussed in Note D
to the financial statements, all revenue and expenses related to PCS Securities,
including soft-dollar commission revenue, are included in income (loss) from
discontinued operations for both 2002 and 2003.

         Although certain of our customers arrange for the payment of their
subscriptions to our research products using soft-dollar arrangements with
third-party brokers, revenues recognized by the Company related to these
subscriptions are classified as research services revenues. In these
circumstances, we are paid in cash by our customers' third-party broker, and we
have no involvement in the soft-dollar arrangement between them. Accordingly, no
soft-dollar revenues are included in our results from continuing operations in
2003 or 2002.

Joint Venture

         During 2002, the Company entered into a Joint Venture agreement with
Btech Investor, Inc. Pursuant to this agreement, both the Company and Btech
Investor formed DPBT, LLC through which it jointly developed a web-based
independent healthcare research service, BiotechTracker. This product was
introduced in October 2002 and, during 2002 and 2003, was marketed exclusively
by the Company. The joint development effort combined the Company's expertise
and proprietary web-based technology platform with Btech's expertise in
providing analysis of scientific, clinical and medical data to produce a state
of the art interactive research and analytical product focused on biotechnology
and pharmaceutical drug development.

         Effective October 31, 2003 the Company and Btech Investor agreed to
dissolve the Joint Venture and to phase out the BiotechTracker research service.
Subsequent to the dissolution agreement, the Company utilized the intellectual
property it had developed under the Joint Venture to launch BioMedTracker in
January 2004 as a replacement for BiotechTracker.

Strategic Development and Marketing Agreements
----------------------------------------------

         During 2002, the Company further increased its research product
portfolio through a series of strategic development and marketing agreements
with independent research providers. Under these agreements, the Company gains
access to additional proprietary research products that it markets to its
institutional clients, and provides web development, web distribution and
support services using its proprietary technology platform. Agreements of this

                                       6
<PAGE>

nature were finalized in 2002 related to the ChangeWave Insight, Earnings
Quality Analytics and La Jolla Economics products currently being marketed by
the Company. During 2003, we have focused our product development efforts more
towards improving our existing products and developing new products. We believe
higher profit margins are attained through the sale and marketing of research
products developed in-house. Therefore, in 2003 we did not enter into any new
marketing arrangements for the sale of research products developed by third
parties.

Broker-Dealer
-------------

Our DP Securities, Inc. ("DPS") subsidiary is a broker-dealer registered with
the National Association of Securities Dealers ("NASD"). DPS is in good standing
with the NASD, but was inactive during 2003. In March 2004, DPS entered into a
correspondent contract with Knight Equity Markets L.P. to enable the Company's
clients to begin trading with Knight for the benefit of DPS. The Company expects
commission revenue associated with this agreement to begin in the second quarter
of 2004. In addition, in March 2004, DPS began doing business as Sagient
Securities.

Competition
-----------

         The independent research and financial services industries are
characterized by intense competition. We face competition in all aspects of our
business and compete directly with, among others, traditional Wall Street
research providers, independent research providers, brokerage firms of all
sizes, and larger financial data providers. Specifically, we estimate there are
as many as 500 independent research providers who compete with us to provide
information, data, and investment recommendations to institutional investors.
Many of these competitors, such as CFRA, Argus Research, Sidoti & Co. and Vista
Research have longer operating histories, have significantly greater financial,
personnel, marketing, research and other resources, have greater operating
efficiencies, and have established reputations relating to product offerings and
customer service. In addition, many of our competitors offer a wider range of
services and financial products than we do. Over the past several years, the
securities industry has become increasingly competitive. Numerous securities
firms have either ceased operations or have been acquired by other firms and
certain corporations with substantial financial resources, expertise and access
to capital markets have entered the securities industry by acquiring leading
securities firms.

Financial Data and Research
---------------------------

         The market for independently produced financial data and research is
highly competitive. Recent downturns in the general marketplace and current
general distrust of research produced by large investment banks has led to the
creation of numerous small independent financial data and research providers
that report on any number of niche industries or market spaces.

         Our ability to maintain our competitive advantage in the financial data
and research markets is centered on:

                  (i)      our ability to create and/or acquire innovative
                           financial data and research products that are readily
                           marketable to our target client base;

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                  (ii)     our focus on a defined, yet very extensive, market
                           niche; and our ability to continue to effectively
                           market these services to our target client base.

         Each financial data and research product that the Company creates or
acquires will be subject to its own unique set of competitive hurdles. For
example the Company's flagship product, PlacementTracker, which focuses
exclusively on the growing market for Private Investment in Public Equities, has
two competing online PIPE information providers - CapitalIQ and
PrivateRaise.com. Likewise, the Company's BioMedTracker has a number of
competitors for independent biotech research, including Leerink Swan and Gerson
Lehrman. The Company believes that its services provides subscription members
with a great number of value-added services that are not available through
either of the competitive products. The Company continually strives to maintain
that competitive advantage through new service offerings and developments.
Nevertheless, current and potential competitors have established or may
establish cooperative relationships among themselves or with third parties or
may consolidate to enhance their services and products. We expect that new
competitors or alliances among competitors will emerge and may acquire
significant market share. We can provide no assurance that we will be able to
compete effectively with current or future competitors for our current or future
financial data and research products or that the competitive pressures we face
will not harm our business.

Research Products
-----------------

         We market and distribute research and analytical products on a wide
range of investment alternatives, including quantitative research, economic and
sector analysis, contrarian and short selling research. Our products are either
developed internally or obtained through marketing agreements with third party
independent research providers. Those agreements provide for a fixed payment
amount to the research provider for each research product sold and collected by
the Company. The amounts charged vary by research product, but are generally
dictated by the overall market rates of similar products. The Company has
exclusive marketing rights to research products developed internally. For
third-party research products we market, the Company may be in competition with
the provider's internal marketing staff.

Sales and Marketing
-------------------

         We use our internal sales staff, currently comprised of four (4)
employees, and marketing resources for our research products. Our internal
marketing resources include directed marketing of our research product portfolio
through our proprietary web-based technology platform.

          Research products marketed by the Company are generally sold on a
subscription basis, with subscription periods ranging from three months to one
year, and some contain automatic renewal provisions. Our relationship with our
subscription customers is good. We have no one-subscription client that
represents more than five percent of our subscription revenue and we maintain a
low cancellation rate for the product. As we continue to grow, the ability to
manage the marketing process in-house through highly skilled and educated
institutional salespeople will continue to play a large role in the success of
our Company.

                                       8
<PAGE>

Government Regulation
---------------------

Regulation of the Securities Industry and Broker-Dealers
--------------------------------------------------------

         Our broker-dealer subsidiary, DP Securities, is subject to extensive
regulation applicable to the securities industry in the United States and
elsewhere. As a matter of public policy, regulatory bodies in the United States
and rest of the world are charged with safeguarding the integrity of the
securities and other financial markets and with protecting the interests of
customers participating in those markets. In the U.S., the Securities and
Exchange Commission ("SEC") is the federal agency responsible for the
administration of the federal securities laws. In general, broker-dealers are
required to register with the SEC under the Securities Exchange Act of 1934, as
amended ("Exchange Act"). Under the Exchange Act, every registered broker-dealer
that does business with the public is required to be a member of and is subject
to the rules of the National Association of Security Dealers ("NASD"). The NASD
administers qualification testing for all securities principals and registered
representatives for its own account and on behalf of the state securities
authorities. DP Securities is registered with the SEC and is a member of the
NASD.

         The SEC, self-regulatory organizations such as the NASD, and state
securities commissions may conduct administrative proceedings which can result
in censure, fine, the issuance of cease-and-desist orders, or the suspension or
expulsion of a broker-dealer, its officers, or its employees. The SEC and
self-regulatory organization rules cover many aspects of a broker-dealer's
business, including capital structure and withdrawals, sales methods, trade
practices among broker-dealers, use, and safekeeping of customers' funds and
securities, record-keeping, the financing of customers' purchases, broker-dealer
and employee registration, and the conduct of directors, officers, and
employees. Additional legislation, changes in rules promulgated by the
Commission and self-regulatory organizations, or changes in the interpretation
or enforcement of existing laws and rules, may directly affect the mode of
operation and profitability of broker-dealers.

Effect of Net Capital Requirements
----------------------------------

         As a registered broker-dealer and member of the NASD, DP Securities is
subject to the Uniform Net Capital Rule under the Exchange Act. The Uniform Net
Capital Rule, which specifies minimum net capital requirements for registered
brokers-dealers, is designed to measure the general financial integrity and
liquidity of a broker-dealer and requires that at least a minimum part of its
assets be kept in relatively liquid form. In general, net capital is defined as
net worth (assets minus liabilities), plus qualifying subordinated borrowings
and certain discretionary liabilities, and less certain mandatory deductions
that result from excluding assets that are not readily convertible into cash and
from valuing conservatively certain other assets. Among these deductions are
adjustments (called haircuts), which reflect the possibility of a decline in the
market value of an asset prior to disposition.

         Failure to maintain the required net capital may subject a firm to
suspension or revocation of registration by the SEC and suspension or expulsion
by the NASD and other regulatory bodies and ultimately could require the firm's
liquidation. The Uniform Net Capital Rule prohibits payments of dividends,

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<PAGE>

redemption of stock, the prepayment of subordinated indebtedness and the making
of any unsecured advance or loan to a shareholder, employee or affiliate, if the
payment would reduce the firm's net capital below a certain level. If a
broker-dealer engages in underwriting, their net capital requirements will
significantly increase. The SEC and the NASD impose rules that require
notification when net capital falls below certain predefined criteria, dictate
the ratio of debt to equity in the regulatory capital composition of a
broker-dealer, and constrain the ability of a broker-dealer to expand its
business under certain circumstances.

         The Uniform Net Capital Rule and NASD rules require prior notice to the
SEC and the NASD for certain withdrawals of capital and also provide that the
SEC may restrict for up to 20 business days any withdrawal of equity capital, or
unsecured loans or advances to shareholders, employees or affiliates if the
capital withdrawal, together with all other net capital withdrawals during a
30-day period, exceeds 30% of excess net capital and the SEC concludes that the
capital withdrawal may be detrimental to the financial integrity of the
broker-dealer.

         In addition, the Uniform Net Capital Rule provides that the total
outstanding principal amount of a broker-dealer's indebtedness under certain
subordination agreements, the proceeds of which are included in its net capital,
may not exceed 70% of the sum of the outstanding principal amount of all
subordinated indebtedness included in net capital, par or stated value of
capital stock, paid in capital in excess of par, retained earnings and other
capital accounts for a period in excess of 90 days. A change in the Uniform Net
Capital Rule, the imposition of new rules or any unusually large charge against
net capital could limit those parts of our operations that require the intensive
use of capital and also could restrict our ability to pay dividends, repay debt
and repurchase shares of our outstanding stock. As of December 31, 2003, the
minimum amount of net capital required to be maintained by DP Securities, Inc.
was $5,000.

Application of Laws and Rules to Internet Business and Other Online Services
----------------------------------------------------------------------------

         Due to the increasing popularity and use of the Internet and other
online services, various regulatory authorities are considering laws and/or
regulations with respect to the Internet or other online services covering
issues such as user privacy, pricing, content copyrights, and quality of
services. In addition, the growth and development of the market for online
commerce may prompt more stringent consumer protection laws that may impose
additional burdens on those companies conducting business online. When the
Securities Act of 1933, as amended ("Securities Act"), which governs the offer
and sale of securities, and the Securities Exchange Act of 1934, which governs,
among other things, the operation of the securities markets and broker-dealers,
were enacted, such acts did not contemplate the conduct of a securities business
through the Internet and other online services. The recent increase in the
number of complaints by online traders could lead to more stringent regulations
of online trading firms and their practices by the SEC, NASD and other
regulatory agencies. Although the SEC, in releases and no-action letters, has
provided guidance on various issues related to the offer and sale of securities
and the conduct of a securities business through the Internet, the application
of the laws to the conduct of a securities business through the Internet
continues to evolve. Furthermore, the applicability to the Internet and other
online services of existing laws in various jurisdictions governing issues such
as property ownership, sales and other taxes and personal privacy is uncertain
and may take years to resolve. Uncertainty regarding these issues may adversely

                                       10
<PAGE>

affect the viability and profitability of our business. As our research services
are available over the Internet in multiple jurisdictions, and as we have
numerous clients residing in these jurisdictions, these jurisdictions may claim
that the Company is required to qualify to do business as a foreign corporation
in each such jurisdiction. Failure to qualify as an out-of-state or foreign
corporation in a jurisdiction where it is required to do so could subject us to
taxes and penalties for the failure to qualify.

Intellectual Property
---------------------

         We use a combination of trademark, copyright and trade secret laws to
protect our proprietary intellectual property.

         In January 2004, we filed trademark applications with the United States
Patent and trademark Office ("USPTO") under International Classes 35, 36 and 42
for SAGIENT RESEARCH (TM).

         PCS Securities claims common law ownership of each of the following
trademarks: PCS; PCS Securities, Inc., and PCS block design. In January 2003, we
entered into a Trademark Assignment and License Back Agreement with Raymond Hill
and Susanne Pruitt, pursuant to which we assigned the rights to the PCS
trademark to Mr. Hill and Ms. Pruitt (or their nominee) and also received a
license to use the PCS trademark until January 31, 2004. As of January 20, 2004,
the Company ceased utilizing the PCS trademark, and began doing business as
Sagient Research Systems.

         There can be no assurance, however, that the Company will be able to
effectively obtain rights to the trademarks or inventions covered by its
trademark and patent applications. Moreover, no assurance can be given that
others will not assert rights in, or ownership of, in the intellectual property
rights of the Company or that the Company will be able to successfully resolve
such conflicts. The failure of the Company to protect such rights from unlawful
and improper appropriation may have a material adverse effect on the Company's
business and financial condition.


Business Combinations and Other Transactions
--------------------------------------------

The PPI Capital Merger
----------------------

         As of May 15, 2001, PPI Capital Group, Inc., a Utah corporation
("PPI"), DirectPlacement.com, Inc., a Delaware corporation ("DPI"), and DP
Merger Corp., a Delaware corporation ("MergerSub"), entered into an Agreement
and Plan of Merger (the "Merger Agreement"), pursuant to which on June 11, 2001
(the "Effective Date") MergerSub was merged with and into DPI (the "Merger") and
DPI became a wholly owned subsidiary of PPI. On the Effective Date, the holders
of common stock of DPI received 1.25 shares of PPI's common stock, par value
$.001 per share ("Common Stock"), for each outstanding share of common stock of
DPI held thereby (the "Exchange Ratio"), and the holders of options and warrants
issued by DPI exchanged such securities for options and warrants of PPI based
upon the Exchange Ratio. In addition, Mark Scharmann, PPI's President and Chief

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Executive Officer, resigned as an officer and director of PPI. The other former
members of management of PPI also resigned as officers of PPI. Upon consummation
of the Merger, Brian M. Overstreet and Robert F. Kyle joined the two remaining
members on PPI's Board of Directors. As of the Effective Date, Mr. Overstreet
and Mr. Kyle became the President and Chief Executive Officer and Vice
President, Secretary and General Counsel, respectively, of PPI. The transaction
has been reflected as a reverse merger where PPI was the surviving legal entity
after the merger, but DPI remained as the accounting acquirer. Accordingly, the
Merger has been accounted for as a recapitalization of DPI.

PCH Securities, Inc.
--------------------

         As of October 2, 2001, the Company, PCH Securities, Inc., a California
corporation ("PCH"), DP Securities, Inc., a California corporation ("DP
Securities"), and F. Timothy Hurley ("Hurley") entered into an Asset Purchase
Agreement (the "Purchase Agreement"), pursuant to which on October 26, 2001, DP
Securities acquired certain assets of PCH. Pursuant to the Purchase Agreement,
DP Securities purchased substantially all of the assets owned, used or held by
PCH to conduct its financial services business, including among other things,
the equipment and customer list of PCH. As payment for the assets, the Company
issued an aggregate of 417,866 shares of common stock of the Company having a
fair market value of approximately $1,000,000 at date of acquisition. In
addition, DP Securities entered into a three (3) year employment agreement with
Mr. Hurley, pursuant to which Mr. Hurley will serve as the Head of Trading of
Capital Markets Unit.

         In August 2002, the Company elected to close the trading desk
operations of DP Securities. This decision was based in part on the termination
of Mr. Hurley that occurred in August 2002, and on the failure of the business
unit to meet performance expectations. In October, 2002, the Company entered
into a separation agreement with Mr. Hurley pursuant to which the employment
agreement between the Company and Mr. Hurley was terminated, and 417,866 shares
of the Company's common stock previously issued to Mr. Hurley were returned and
cancelled.

PCS Securities, Inc.
--------------------

         As of December 14, 2001, the Company, PCS Merger Corp., a Washington
corporation and wholly owned subsidiary of the Company ("MergerSub"), PCS
Securities, Inc., a Washington corporation ("PCS"), Susanne S. Pruitt ("Pruitt")
and Raymond A. Hill, III ("Hill") entered into an Agreement and Plan of Merger
(the "Merger Agreement"), pursuant to which on December 21, 2001, MergerSub
merged with and into PCS (the "Merger"). On December 21, 2001, the holders of
common stock of PCS received an aggregate of 10.5 million shares of the
Company's common stock in exchange for all of the issued and outstanding shares
of capital stock of PCS. Immediately prior to the Merger, Pruitt and Hill owned
51% and 49% of the total number of shares of common stock of PCS outstanding,
respectively. By virtue of the Merger, Pruitt received 5,355,000 shares of the
Company's common stock and Hill received 5,145,000 shares of the Company's
common stock. The Company also agreed to pay as part of the purchase price a
cash adjustment based upon the Net Tangible Book Value (as defined) of PCS as of
December 31, 2001. The Company accrued $700,000 for the additional purchase

                                       12
<PAGE>

price consideration based on information provided by the former owners of PCS
Securities, Inc., $500,000 of which became due and payable on March 29, 2002.
The Company obtained an extension of this payment due date, and in July 2002,
paid an aggregate amount of $565,926 to Ms. Pruitt and Mr. Hill based on the
final determination by the parties.

         In December 2001, the Company entered into (i) a five (5) year
employment agreement with Pruitt, pursuant to which Pruitt agreed to serve as
the Company's Director of its Capital Markets Unit, and (ii) a five (5) year
consulting agreement with Hill, pursuant to which Hill agreed to provide the
Company with advice regarding existing client and new client services. In
addition, in connection with the Merger Agreement, PCS entered into a five (5)
year research services agreement (the "Research Services Agreement") with
Institutional Research Services, Inc., ("IRS"), an institutional research
marketing company owned by Mr. Hill, pursuant to which IRS agreed to direct a
minimum amount of its annual research sales to PCS for "soft dollar" collection.
Further, Pruitt and Hill were each appointed to the board of directors of the
Company and Brian M. Overstreet, Robert F. Kyle, and Pruitt were elected to the
board of directors of PCS. In addition, in December 2001 the Company, Mr.
Overstreet, Midori USA Corporation, a company controlled by Mr. Overstreet, Ms.
Pruitt and Mr. Hill entered into a voting agreement ("Voting Agreement"),
pursuant to which Mr. Overstreet, Midori, Ms. Pruitt and Mr. Hill each agreed to
vote, or cause to be voted, the shares of common stock of the Company that they
beneficially own or any other shares legally or beneficially acquired or
controlled after the date of the Voting Agreement, in person or by proxy, in
favor of the election of each of Ms. Pruitt, Mr. Hill and Mr. Overstreet at each
annual or special meeting of the Issuer's stockholders where the election of
directors of the Issuer is considered, and in any written consent of the
stockholders executed in lieu of any such meeting(s). Additionally, pursuant to
the Voting Agreement, Mr. Overstreet was granted the right to vote 765,000
shares of the Common Stock owned or controlled by Ms. Pruitt and 735,000 shares
of the Common Stock owned or controlled by Mr. Hill (the "Shares") on each
matter submitted to vote of the stockholders of the Company at any annual or
special meeting of the Company's stockholders, or in any written consent
stockholders executed in lieu of any such meetings. The Voting Agreement was
scheduled to terminate on December 31, 2006.

         In December 2002, the Research Services Agreement was automatically
terminated due to the Company's inability to satisfy a condition of the
agreement that required the Company remove Mr. Hill and Ms. Pruitt as personal
guarantors of the Company's credit facility by December 21, 2002. In 2002,
approximately 50% of the PCS' business was attributable to its relationship with
Institutional Research Services and the Research Services Agreement. The
termination of the Agreement would have resulted in a significant loss of
revenues in 2003 without a corresponding reduction in expenses. As a result, the
Company determined that it was unlikely PCS would reach sustained profitability
in the near future, and in January 2003, announced that it had decided to wind
down the activities of PCS, and ultimately to close PCS Securities.

         In connection with the decision to close the PCS subsidiary, in January
2003 the Company entered into an agreement with Ms. Pruitt and Mr. Hill pursuant
to which the Company agreed to transfer ownership of the name "PCS" and
trademarks related to such name (the "Trademarks") as well as a list of PCS
customers to Ms. Pruitt and Mr. Hill (or their designee) in exchange for the

                                       13
<PAGE>

surrender by them of an aggregate of 10.3 million shares of the Company's common
stock for cancellation. In addition: (i) each of Ms. Pruitt and Mr. Hill agreed
to resign as directors of the Company and Ms. Pruitt has resigned as an
executive officer of the Company and the President of PCS; (ii) each of the
parties have terminated their rights under the employment agreement between Ms.
Pruitt and the Company and the consulting agreement between Mr. Hill and the
Company, and other certain agreements among them and executed general releases
in connection therewith; (iii) the Company and Ms. Pruitt and Mr. Hill entered
into a Trademark Assignment and License-Back Agreement, pursuant to which the
Trademarks were assigned to Ms. Pruitt and Mr. Hill and the Company has been
granted the right to use the PCS trademark until January 31, 2004; (iv) Ms.
Pruitt and Mr. Hill agreed to pay to the Company an aggregate of $250,000 over a
period of two years assuming that certain conditions are satisfied; (v) PCS
agreed to repay its outstanding line of credit (the "Line of Credit") and the
Company and PCS agreed not to increase the amount outstanding under the Line of
Credit; (vi) Pruitt and Hill jointly and severally agreed to repay the Line of
Credit by June 30, 2003 in the event that there is an outstanding balance as of
such date and assuming that the amount owed under the Line of Credit has not
been increased; (vii) until the earlier of June 30, 2003, or the date on which
the Line of Credit is repaid in full, Ms. Pruitt and Mr. Hill shall have full
management control of PCS; (viii) Ms. Pruitt and Mr. Hill agreed to repay all
customer credit balances existing as of June 30, 2003; (ix) the Company granted
a non-exclusive two year license to use the Company's InterLeads software to Ms.
Pruitt and Mr. Hill, or their designee; and (x) the Company agreed to use a
designee of Ms. Pruitt and Mr. Hill as the Company's preferred brokerage firm
for soft dollar transactions.

         As of April 30, 2003 the wind down of the PCS Securities business was
completed, and the PCS Securities subsidiary was closed.

Credit Facilities
-----------------

         The Company obtained a $3,000,000 revolving credit facility from Bear
Stearns, a U.S. brokerage firm (the "Lender"), in connection with the merger
with PCS Securities in December 2001. At December 31, 2002, borrowings
outstanding under this revolving credit facility totaled $2,891,975. At that
date, the credit facility was secured by $500,000 in restricted cash of the
Company and personal guarantees by the Company's President and Chief Executive
Officer and the two former owners of PCS Securities.

         In connection with the Company's decision to close its PCS Securities
subsidiary during 2003 and the agreement reached with the former owners of PCS
Securities pursuant to which the Company agreed not to draw any additional funds
from the credit facility subsequent to January 1, 2003, the parties agreed that
the Company would transfer the remaining $500,000 restricted cash deposit
balance to pay down the outstanding credit facility balance, and that all
commissions generated by PCS Securities subsequent to January 1, 2003 that clear
through the Lender would be applied against the outstanding balance of the
credit facility.

         As a result of the security deposit balance transfer in February 2003,
and commissions applied subsequent to January 1, 2003, the outstanding balance
of the credit facility was paid in full as of April 30, 2003, and the credit
facility and related promissory note were cancelled.

                                       14
<PAGE>

Convertible Debentures
----------------------

         On December 17, 2001, the Company issued convertible debentures in the
aggregate principal amount of $1,600,000. These debentures had a maturity date
of December 17, 2003, and bore interest at a rate of 10% per annum, which was
due and payable on the last day of each calendar quarter until they were paid in
full or converted into shares of the Company's common stock.

         At issuance, proceeds from the debentures were allocated to the
warrants based on the fair value of the warrants using a Black Scholes valuation
model totaling $259,182. In addition, a discount of $541,536 was applied to
account for the beneficial conversion feature at the closing date of December
17, 2001.

         In November 2002, the Company made a partial prepayment of principal in
the amount of $215,686.

         At December 31, 2002, debentures with an aggregate principal balance of
$1,384,314, were carried net of unamortized discounts of $417,189 related to the
intrinsic value of the beneficial conversion feature, which is inclusive of the
effect of conversion price resets, and the warrants.

         In February 2003, the Company and the debenture holders restructured
certain terms and provisions of the convertible debentures. In connection with
the debt restructuring, the Company was relieved of $137,844 in liquidated
damages previously accrued. The restructuring of the convertible debt has been
accounted for as a troubled debt restructuring and, accordingly, no gain was
recognized. At December 31, 2003, the restructured convertible debt principal
totaled $1,468,991 of which $564,747 is classified as the current portion.
Following is a summary of primary terms of the restructured agreements:

$1,250,000 Original Principal Amount Note

         The original debenture was amended pursuant to which the principal
balance was changed to $1,425,000. The amended principal balance includes the
original principal amount plus accrued and unpaid liquidated damages and
interest of $150,000 and $25,000, respectively. The remaining balance of accrued
interest at February 28, 2003, totaling $26,736, was paid by the Company and
$125,000 of accrued liquidated damages were waived by the debenture holder.

         The debenture matures on December 28, 2005 and bears interest at an
annual rate of 14%. The debenture requires fixed monthly payments of principal
and interest beginning on March 28, 2003 of $25,000 for the first five (5)
months, $50,000 thereafter through November 28, 2005 and a final payment due
December 28, 2005 in the amount of $271,100. The outstanding principal balance
can be converted into shares of the Company's common stock at the option of the
holder based on a fixed conversion price of $0.20, and the warrant exercise
price is fixed at $0.086 for the term of the warrants to purchase 160,000 shares
of the Company's common stock that were included in the original debenture. In
addition, the debenture holder agreed to waive all registration requirements
with respect to the convertible debenture, warrants and shares underlying the
warrants.

                                       15
<PAGE>

         In October 2003, the debenture holder agreed to defer scheduled
principal payments originally due on October 28, 2003, November 28, 2003 and
December 28, 2003, and to add the deferred principal payments to the amount due
with the final payment on December 28, 2005.

$350,000 Original Principal Amount Note

         The original debenture was amended pursuant to which the principal
balance was changed to $155,000. The amended principal balance includes the
original principal amount, less the partial principal payment in November 2002,
of $215,686 plus accrued and unpaid liquidated damages and interest of $16,656
and $4,030, respectively. The debenture holder waived accrued liquidated damages
in the amount of $12,844. The debenture matures on February 28, 2005 and bears
interest at an annual rate of 14%. Payment of interest is required quarterly,
beginning March 30, 2003 and the principal balance is payable upon the maturity
date.

         The outstanding principal balance can be converted into shares of the
Company's common stock at the option of the holder based on a fixed conversion
price of $0.20, and the warrant exercise price is fixed at $0.086 for the term
of the warrants to purchase 35,000 shares of the Company's common stock that
were included in the original debenture. In addition, the debenture holder
agreed to waive all registration requirements with respect to the convertible
debenture, warrants and shares underlying the warrants.

Employees
---------

         As of March 23, 2004 we currently employ 16 persons full-time, and 2
part-time. Of these employees, 4 are in corporate management and administration,
3 are in technology operations, 4 are in sales and marketing and 7 are research
analysts. Our staff includes 6 licensed brokers with the NASD. Our NASD
registered representatives are required to take examinations administered by the
NASD and state authorities to be qualified to transact business, and are
required to enter into agreements with us obligating them, among other things,
to adhere to industry rules and regulations, our supervisory procedures and not
to solicit customers in the event of termination of employment. None of our
employees are covered by collective bargaining agreements and we believe that
our relationship with our employees is good. Any future increase in the number
of employees will depend upon growth of our business.

Risk Factors
------------

         In addition to other information in this Annual Report on Form 10-KSB,
the following important factors should be carefully considered in evaluating the
Company and its business because such factors currently have a significant
impact on the Company's business, prospects, financial condition and results of
operations.

                                       16
<PAGE>

Our Financial Statements Include A Going Concern Opinion From Our Outside
Auditors.

         The Company received a going concern opinion on its financial
statements for fiscal years ended December 31, 2003, and 2002. Our auditors have
stated that due to our lack of profitability and our negative working capital,
there is "substantial doubt" about our ability to continue as a going concern.
The going concern opinion from our auditors may limit our ability to access
certain types of financing, or may prevent us from obtaining financing on
acceptable terms.

Our Revenues May be Insufficient to Fund Our Operations and We May Need
Additional Financing

         We believe that our anticipated cash flow from operations could be
adequate to fund our operations for the next fiscal year. There can be no
assurance, however, that we will not require additional financing prior to or
after such time. There can be no assurance that any additional financing will be
available to the Company on acceptable terms, or at all. If adequate funds are
not available, the Company may be required to delay, scale back or eliminate its
operational plans. Our inability to obtain additional financing could have a
material adverse effect on the Company's business, financial condition and
results of operations.

Our Restructuring May Not Be Effective.

         During 2003, we commenced a significant realignment for the purpose of
focusing our resources on the development and marketing of our independent
research business. There is no assurance that sufficient revenue will be
generated and/or that we have reduced our costs sufficiently or soon enough to
ensure our future success. If we do not increase revenues from our independent
research business and/or reduce our costs sufficiently or quickly enough, we may
not have sufficient cash available to operate our business until it can become
profitable.

The Market For Research Services Is Dependent on Stock Market Conditions and
Other Factors Outside of Our Control.

         The market for research services has fluctuated significantly over the
last several years, and in large part is tied to stock market performance and
overall economic conditions. Subscriptions for our products are generally paid
for out of research budgets of the mutual fund, hedge fund or other financial
services clients. These budgets can be negatively impacted by several factors
including stock market performance, performance of specfic funds under
management, economic conditions and uncertainties related to world events such
as military actions or terrorist threats/attacks. As a result, fund managers may
delay their purchasing of new independent research or cancel existing
subscriptions in which case our business, financial condition and results of
operations may be materially and adversely affected.

We Have Significant Fixed Operating Costs,  Which May Be Difficult To Adjust In
Response To Unanticipated  Fluctuations In Revenues.

         A high percentage of our operating expenses, particularly personnel,
rent and depreciation, are generally fixed. As a result, an unanticipated
decrease in subscriptions sales or an increase in subscription cancellations may
cause significant variations in operating results and could have a material
adverse effect on our business, financial condition and results of operations.

                                       17
<PAGE>

We Have A Very Limited Number Of Products And We May Not Be Able To Develop New
Products Or Enhance  Existing  Products On A Timely Basis.

         We market and distribute a small number of research products, many of
which were introduced during fiscal year 2002. We expect that revenues from
these products will continue to account for the majority of our total revenues.
To be competitive, we must develop and introduce on a timely basis new products
and product enhancements which meet the needs of our customers. Declines in
demand for these products, whether as a result of competition, technological
change or otherwise, or price reductions would have a material adverse effect on
the Company's operating results.

Our Business Could Be Adversely Affected If Our Products Fail To Perform
Properly.

         Our advanced technology platforms and our research products are complex
and may contain undetected errors, or bugs, which result in product failures, or
otherwise fail to perform in accordance with customer expectations. Our products
may be particularly susceptible to bugs or performance degradation because of
the emerging nature of our financial technology. Platform and/or product
performance problems could result in loss of or delay in revenue, failure to
achieve market acceptance, or injury to our reputation, any of which could have
a material adverse effect on our business, operating results and financial
condition.

We Have A Limited Operating History.  As A Result, You May Have Difficulty
Evaluating Our Business And Prospects.

         We have a limited operating history. We began our development
activities in March 1999, and only commenced our financial data services in
December 1999. Furthermore, since inception in 1999, our business model and
strategy has gone through a series of significant changes. Our business and
prospects must be considered in light of the risks, expenses, and difficulties
frequently encountered by companies in the early stages of development. These
risks are particularly severe among companies in new and rapidly evolving
markets such as online business development services and those in regulated
industries such as the securities industry. It may be difficult or impossible to
accurately forecast our operating results and evaluate our business and
prospects based on our historical results.

We Have Incurred Net Losses and Accumulated Deficit to Date.

         We were formed in 1999 for the purpose of developing a technology
oriented financial services firm that is focused on serving middle market public
companies and institutional investors. Since we commenced our business
operations in 2000, we have a very limited operating history. For the years
ended December 31, 2003 and 2002, the Company had net losses of $1,459,736 and
$25,238,062, respectively. As of December 31, 2003, our accumulated deficit
totaled $31,142,424. Like any relatively new business enterprise operating in a
specialized and intensely competitive market, we are subject to many business
risks. There can be no assurance that we will successfully implement our
business plan in a timely or effective manner. There can be no assurance that
the Company will not continue to incur net losses in the future or that it will
be able to operate profitably.

                                       18
<PAGE>

         To achieve and sustain profitability, we must accomplish numerous
objectives, including:
                  o        substantially increasing the number of paying
                           customers; and
                  o        improving operating margins.

         We cannot assure you that we will be able to achieve these objectives.

We May Need Additional Capital, and We Cannot Be Sure That Additional Financing
Will Be Available.

         Historically, we have funded our operating losses and capital
expenditures through proceeds from private equity and debt financings. Although
we currently anticipate that our available funds and cash flow from operations
will be sufficient to meet our cash needs for the foreseeable future, we may
require additional financing. Our ability to obtain financing will depend, among
other things, on our development efforts, business plans, operating performance
and condition of the capital markets at the time we seek financing. We cannot
assure you that additional financing will be available to us on favorable terms
when required, or at all. If we raise additional funds through the issuance of
equity, equity-linked or debt securities, those securities may have rights,
preferences or privileges senior to the rights of our common stock, and our
stockholders may experience dilution.

Our Business May Be Adversely Affected By Changes In Regulations Governing
Investment Research Products.

         Recently, federal and state regulators agreed to a settlement with
major Wall Street investment banks that required them to, among other things,
pay $1.4 billion in settlement costs and to restructure their research
departments to avoid conflicts of interest between research and investment
banking personnel. While there is no indication that any further action may be
taken by federal and/or state authorities, any regulatory changes in the method
that institutional investment research is prepared, formulated, marketed, or
delivered may adversely affect our business.

Our Business May Be Adversely Affected By Changes In Regulations Governing Soft
Dollar Payments For Research Products.

         Recent proposals by the SEC and certain industry trade groups have
proposed a change or outright ban to the use of "soft-dollars" by mutual funds
and hedge funds to pay for third party independent research. These funds use
"soft-dollars" by enabling their primary brokerage firms to pay research and
research-related invoices on their behalf in exchange for directing trading
commissions to those brokerage firms. While the extent of future regulatory
changes, if any, with respect to soft dollar arrangements is uncertain, should
the regulations governing the use of "soft dollars" be dramatically changed or
completely banned, the Company's ability to market and receive payment for its
research services may be adversely impacted. As a result, the Company business,
results of operations, and prospects could be materially and adversely affected.

                                       19
<PAGE>

If Our Efforts To Attract Customers Are Not Successful, Our Revenue Growth Will
Be Adversely Affected.

         We must continue to attract and retain customers. To succeed, we must
continue to attract a large number of customers who have traditionally used
alternative suppliers of research products and/or brokerage services. Our
ability to attract and retain customers will depend in part on our ability to
consistently provide our customers with unique and proprietary research
services. If customers do not perceive our services to be of high quality, or if
we introduce new services or products that are not favorably received by them,
we may not be able to attract or retain customers. If our efforts to satisfy our
existing customers are not successful, we may not be able to attract new
customers, and as a result, our revenue growth will be adversely affected.

Increases In The Cost Of Delivering Research Products Would Adversely Affect Our
Gross Margins And Marketing Expenses.

         We maintain marketing relationships with a number of independent
research providers. Those relationships provide for a fixed payment amount to
the research provider for each research product sold and collected by the
Company. The payment amounts vary by research product and provider, but are
generally dictated by the overall market rates of similar products. Increases in
our cost of acquiring and customizing research products will adversely affect
our gross margins if we are unable to raise the prices charged to our customers
to offset the increase.

If We Do Not Correctly Anticipate Our Short And Long-Term Needs For Research
Products, Our Customer Satisfaction And Results Of Operations May Be Affected
Adversely.

         We may not develop or acquire the type, manner and form of research
products to meet the demands of our customers. If we do not accurately forecast
customer demand for new research products, our customer satisfaction and
operating results will be harmed. If we underestimate the need for particular
research products, our customers may become dissatisfied and terminate their
subscriptions with us.

The Competition We Face From Both Established And Recently Formed Firms May
Adversely Affect Our Revenue And Profitability. We Also Face Competition From
Firms That Are Not Currently In Our Market But Could Quickly And Easily Enter
Our Market.

         We encounter intense competition in all aspects of our business, and we
expect this competition to increase. For example, we face competition from
financial service firms of all sizes. We have experienced intense price
competition in all areas of our business. We believe that we may experience
pricing pressures in these areas in the future as some of our competitors seek
to obtain market share by reducing prices. Established professional service and
financial firms could leverage their existing and future relationships with
startups, expertise, and established reputations to quickly enter our market,
thereby reducing the demand for, or the prices of, our services. If we are

                                       20
<PAGE>

unable to compete effectively, the quality of the companies applying to us for
assistance may be reduced. Many of our competitors have longer operating
histories and significantly greater financial, technical, and marketing
resources than us. In addition, many of these competitors offer a wider range of
services and financial products than we do. Many current and potential
competitors also have greater name recognition and more extensive customer bases
that could be used to accelerate their competitive activity. Moreover, current
and potential competitors have established and may establish future cooperative
relationships among themselves and with third parties to enhance their products
and services in this space. Consequently, new competitors or alliances may
emerge and rapidly acquire significant market share. We cannot assure you that
we will be able to compete effectively with current or future competitors or
that the competitive pressures faced by us will not harm our business.

Our Revenues are Highly Dependent on Services Provided to the Company by
Independent Research Providers.

         A number of research products distributed by the Company are produced
by independent research analysts and are subject to development and marketing
agreements with limited terms. If we are unable to negotiate future service
agreements or if the price of research products that we purchase increases, our
revenues and/or gross margin may be affected adversely.

Variations In Our Quarterly Operating Results Could Cause Our Stock Price To
Fluctuate.

         The timing of our revenue depends on a number of factors that are
outside of our control. To the extent that revenues are delayed, we may fail to
meet the quarterly expectations of stock market analysts or investors.

If We Become Subject To Liability For The Research Products That We Deliver, Our
Results Of Operations Would Be Affected Adversely.

         As a seller of research products, we face potential liability for
libel, negligence, securities fraud, copyright, patent or trademark infringement
or other claims based on the nature and content of materials that we publish or
distribute. If we become liable for claims, our business may suffer as a result
of costs associated with litigation to defend these claims and possible damage
awards. Costs associated with defending any such action, or any potential damage
awards related to such claims, will have an adverse affect on our financial
condition and results of operations.

Our Directors And Executive Officers Control Approximately 70% Of Our Common
Stock And May Have Interests Differing From Those Of Other Stockholders.

         As of March 12, 2004, our directors and executive officers own
approximately 70% of our outstanding common stock. These directors and executive
officers, if acting together, would be able to significantly influence all
matters requiring approval by our stockholders, including the election of
directors and approval of significant corporate transactions, including mergers,

                                       21
<PAGE>

consolidations and the sale of substantially all of our assets. This control
could have the effect of delaying or preventing a third party from acquiring or
merging with us, which could hinder your ability to receive a premium for your
shares.

If We Do Not Continue To Develop And Enhance Our Products And Services In A
Timely Manner, Our Business May Be Harmed.

         Our future success will depend on our ability to develop and enhance
our products and services. We operate in a very competitive industry in which
the ability to develop and deliver advanced services through the Internet and
other channels is a key competitive factor. There are significant risks in the
development of new or enhanced services, including the risks that we will be
unable to:

         o        effectively use new technologies;
         o        adapt our services to emerging industry or regulatory
                  standards; or
         o        market new or enhanced services.

         If we are unable to develop and introduce new or enhanced products and
services quickly enough to respond to market or customer requirements or to
comply with emerging industry standards, or if these services do not achieve
market acceptance, our business could be seriously harmed.

Internet And Internal Computer System Failures Or Compromises Of Our Systems Or
Security Could Damage Our Reputation And Harm Our Business.

         A significant portion of our business is conducted through the
Internet. We could experience future system failures and degradations. We cannot
assure you that we will be able to prevent an extended systems failure if any of
the following events occurs:

         o        human error;
         o        subsystem, component, or software failure;
         o        a power or telecommunications failure;
         o        an earthquake, fire, or other natural disaster;
         o        hacker attacks or other intentional acts of vandalism; or
         o        an act of God or war.

       Any such systems failure that interrupts our operations could seriously
harm our business. The Internet has experienced, and is expected to continue to
experience, significant growth in the number of users and amount of traffic. Our
future success will depend upon the development and maintenance of the
Internet's infrastructure to cope with this increased traffic. This will require
a reliable network backbone with the necessary speed, data capacity, and
security, and the timely development of complementary products, such as
high-speed modems, for providing reliable Internet access and services. The
secure transmission of confidential information over public networks is a
critical element of our operations. We rely on encryption and authentication
technology to provide the security and authentication necessary to effect secure

                                       22
<PAGE>

transmission of confidential information over the Internet. To the best of our
knowledge, to date, we have not experienced any security breaches in the
transmission of confidential information. Moreover, we continually evaluate
advanced encryption technology to ensure the continued integrity of our systems.
However, we cannot assure you that advances in computer capabilities, new
discoveries in the field of cryptography or other events or developments will
not result in a compromise of the technology or other algorithms used by us and
our vendors to protect client transactions and other data. Any compromise of our
systems or security could harm our business.

There Are Risks Associated With Our Stock Trading On The NASD OTC Bulletin Board
Rather Than A National Exchange.

         There are significant consequences associated with our stock trading on
the NASD OTC Bulletin Board rather than on a national exchange. The effects of
not being able to list our securities on a national exchange include:

         o        Limited release of the market prices of our securities;
         o        Limited news coverage of us;
         o        Limited interest by investors in our securities;
         o        Volatility of our stock price due to low trading volume;
         o        Increased difficulty in selling our securities in certain
                  states due to "blue sky" restrictions; and
         o        Limited ability to issue additional securities or to secure
                  additional financing.

We Depend On A Limited Number Of Key Personnel Who Would Be Difficult To
Replace.

         Our success depends significantly on the continued services of our
senior management, especially Brian M. Overstreet, our company's founder, Chief
Executive Officer and President. Losing Mr. Overstreet or any of our Company's
other key executives, including Robert Kyle, our company's Executive Vice
President, General Counsel and Secretary, Matthew Kliber, our Company's
Executive Vice President, Director of Research, or Henry Duong, our Company's
Chief Operating Officer could seriously harm our business. We cannot assure you
that we will be able to retain our key executives or that we would be able to
replace any of our key executives if we were to lose their services for any
reason. Competition for these executives is intense. We have employed many of
our key executives for a long period of time. If we had to replace any of these
key executives, we would not be able to replace the significant amount of
knowledge that these key executives have about our operations.

Our Growth Will Be Limited If We Are Unable To Attract And Retain Qualified
Personnel.

         Our future success depends in significant part on our ability to retain
our key technical staff, business development managers, and management and
marketing personnel. In addition, we must continue to attract and retain
qualified professionals to perform services for our existing and future clients.
Competition for highly qualified technical, business development, and management

                                       23
<PAGE>

and marketing personnel is intense. We have in the past experienced difficulty
attracting new personnel. We may not be able to hire the necessary personnel to
implement our business strategy, or we may need to pay higher compensation for
employees than we currently expect. We cannot assure you that we will succeed in
attracting and retaining the personnel we need to grow.

If We Cannot Adequately Protect Our Intellectual Property, Our Competitiveness
May Be Harmed.

     Our success and ability to compete depends to a significant degree on our
intellectual property. We rely on copyright and trademark law, as well as trade
secrets and confidentiality arrangements, to protect our intellectual property.
Our competitors or others may adopt product or service names similar to our
trademarks thereby impeding our ability to build brand identity and possibly
leading to client confusion. Our inability to adequately protect our
intellectual property could seriously harm our business. Policing unauthorized
use of our intellectual property is made especially difficult by the global
nature of the Internet and difficulty in controlling the ultimate destination or
security of software or other data transmitted on it. The laws of other
countries may afford us little or no effective protection for our intellectual
property. We cannot assure you that the steps we take will prevent
misappropriation of our intellectual property or that agreements entered into
for that purpose will be enforceable. In addition, litigation may be necessary
in the future to:

         o        enforce our intellectual property rights;
         o        determine the validity and scope of the proprietary rights of
                  others; or
         o        defend against claims of infringement or invalidity.

         Such litigation, whether successful or unsuccessful, could result in
substantial costs and diversions of resources, either of which could seriously
harm our business.

We, Through Our Broker-Dealer Subsidiary, Are Subject To Regulation By The SEC,
State Regulators, And The NASD.

         The securities industry in the United States is subject to regulation
under both federal and state laws. The SEC, the NASD, other self-regulatory
organizations and state securities commissions can censure, fine, issue
cease-and-desist orders, or suspend or expel a broker-dealer or any of its
officers or employees. If any of these events occur to our broker-dealer
subsidiary, our business and reputation could be seriously harmed.
Broker-dealers are subject to regulations covering many aspects of the
securities business, including:

         o        sales methods;
         o        trade practices among broker-dealers; - use and safekeeping of
                  customers' funds and securities;
         o        capital structure; - record keeping;
         o        conduct of directors, officers, and employees; and
         o        supervision of employees, particularly those in branch
                  offices.

                                       24
<PAGE>

         Our mode of operation and profitability may be directly affected by:

         o        additional legislation;
         o        net capital requirements;
         o        changes in rules promulgated by the SEC, state regulators, the
                  NASD, and other self-regulatory organizations; and
         o        changes in the interpretation or enforcement of existing laws
                  and rules.

         Our ability to comply with applicable laws and rules will depend on our
establishment and maintenance of an effective compliance system, as well as our
ability to attract and retain qualified compliance personnel. The principal
purpose of regulation and discipline of broker-dealers is the protection of
customers and the securities markets, rather than protection of creditors and
stockholders of broker-dealers. If we are unable to comply with applicable laws
and rules, our business could be seriously harmed.

We May Be Liable For Information Retrieved From Our Website.

         Users of our website may access content on our website and they may
download content and subsequently transmit this content to others over the
Internet or other means. This could result in claims against us based on a
variety of theories, including defamation, obscenity, negligence, copyright,
trademark infringement, or the wrongful actions of third parties. Other actions
may be brought based on the nature, publication, and distribution of our content
or based on errors or false or misleading information provided on our website.
Claims have been brought against online services in the past, sometimes
successfully, based on the content of material contained on their websites. We
are not aware of any such claims threatened against us. However, claims brought
by users of our website could be material. Even if these claims do not result in
liability, we could incur significant costs in investigating and defending
against these claims. The imposition of potential liability for information
carried on or disseminated through our systems could require us to implement
measures to reduce our exposure to liability. Those measures may require the
expenditure of substantial resources and limit the attractiveness of our
services. Additionally, we have limited insurance coverage, which may not cover
all such claims to which we are exposed.

Substantial Dilution May Occur From The Exercise of Outstanding Options and
Warrants or the Conversion of Convertible Debentures.

         As of December 31, 2003 the Company had outstanding (i) options to
purchase an aggregate of 3,040,000 shares of Common Stock at exercise prices
ranging from $0.08 to $2.60 and (ii) 663,906 warrants outstanding exercisable
for shares of Common Stock of exercise prices ranging from $0.086 to $2.30. In
addition, the Company has 675,000 performance warrants outstanding, each of
which is exercisable at $.001 per share, upon the satisfaction of certain
performance targets. Holders of such options and warrants are likely to exercise
them when, in all likelihood, the Company could obtain additional capital on
terms more favorable than those provided by the options and warrants. Further,
while its options and warrants are outstanding, they may adversely affect the
terms on which the Company could obtain additional capital. Moreover, the
Company borrowed $1.6 million in December 2001 from certain institutional

                                       25
<PAGE>

investors and issued convertible debentures and warrants in connection
therewith. Based on the restructuring of these debentures completed in February
2003, the outstanding principal balance of these debentures of $1,468,991 at
December 31, 2003 was convertible in to 7,344,955 shares of the Company's common
stock. See "Business - Convertible Debentures"

There is No Assurance That An Active Public Trading Market Will Develop.

         There has been an extremely limited public trading market for the
Company's Common Stock. There can be no assurances that a public trading market
for the Common Stock will develop or that a public trading market, if developed,
will be sustained. If for any reason a public trading market does not develop,
purchasers of the shares of Common Stock may have difficulty in selling their
securities should they desire to do so.

"Penny Stock" Regulations May Impose Certain Restrictions On The Marketability
of Our Securities.

         The Securities and Exchange Commission (the "Commission") has adopted
regulations which generally define "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share, subject to certain
exceptions. The Company's Common Stock is presently subject to these regulations
which impose additional sales practice requirements on broker-dealers who sell
such securities to persons other than established customers and accredited
investors (generally those with assets in excess of $1,000,000 or annual income
exceeding $200,000, or $300,000 together with their spouse). For transactions
covered by these rules, the broker-dealer must make a special suitability
determination for the purchase of such securities and have received the
purchaser's written consent to the transaction prior to the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
rules require the delivery, prior to the transaction, of a risk disclosure
document mandated by the Commission relating to the penny stock market. The
broker-dealer must also disclose the commission payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell the Company's securities and may
negatively affect the ability of purchasers of the Company's shares of Common
Stock to sell such securities.

We May Not Be Able To Comply In A Timely Manner With All Of The Recently Enacted
Or Proposed Corporate Governance Provisions.

         Beginning with the enactment of the Sarbanes-Oxley Act of 2002 in July
2002, a significant number of new corporate governance requirements have been
adopted or proposed. Each publicly traded company is required to disclose
whether a member of their Audit Committee satisfies certain criteria as a
"financial expert." We currently do not have an Audit Committee member that
satisfies this requirement and, we may not be able to satisfy this, or other,
corporate governance requirements at all times in the future, and our failure to

                                       26
<PAGE>

do so could cause the Securities and Exchange Commission or The Nasdaq stock
market to take disciplinary actions against us, including an action to delist
our stock from the OTC Bulletin Board or any other exchange or electronic
trading system where our shares of common stock trade. Should this occur, the
price of our shares of common stock could most likely decline and stockholders
may have difficulty selling shares of the Company's common stock.


Item 2.  PROPERTIES.

         Our corporate headquarters and only office is located at 3655 Nobel
Drive, Suite 540, San Diego, CA, 92122, where we lease approximately 4,400
square feet of office space at a rental of $133,437 per annum, under a lease
which expires in December 2007. We consider the facilities of our Company to be
reasonably insured and adequate for the foreseeable needs of our Company.


Item 3.  LEGAL PROCEEDINGS.

         There are no material legal proceedings pending or, to the Company's
knowledge, threatened against the Company.


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.

         No matters were submitted to a vote of the holders of the Company's
common stock during the last fiscal quarter of our fiscal year ended December
31, 2003.

                                       27
<PAGE>

                                     PART II
                                     -------

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The Company's shares of common stock trade on the OTC Bulletin Board.
The following table sets forth the range of high and low closing prices for the
Company's Common Stock for the two-year period ended December 31, 2003 as
reported by the OTC Bulletin Board. The quotes represent inter-dealer prices
without adjustment or mark-ups, mark-downs or commissions and may not
necessarily represent actual transactions. The trading volume of the Company's
securities fluctuates and may be limited during certain periods. As a result,
the liquidity of an investment in the Company's securities may be adversely
affected.

<TABLE>
<CAPTION>
                                  COMMON STOCK

                           High        Low                                  High        Low
                           -----      -----                                 -----      -----
<S>                        <C>        <C>          <C>                      <C>        <C>
2003                                               2002
----                                               ----
Quarter ended                                      Quarter ended
March 31, 2003             $0.11      $0.07        March 31, 2002           $2.40      $1.50

Quarter ended                                      Quarter ended
June 30, 2003              $0.08      $0.05        June 30, 2002            $2.00      $0.55

Quarter ended                                      Quarter ended
September 30, 2003         $0.16      $0.06        September 30, 2002       $0.65      $0.25

Quarter ended                                      Quarter ended
December 31, 2003          $0.19      $0.08        December 31, 2002        $0.40      $0.07
</TABLE>

         On March 23, 2004, the closing price as reported by the OTC Bulletin
Board was $0.30 for each share of common stock. As of March 23, 2004, there were
23,075,336 shares of Common Stock outstanding, held of record by 534 record
holders and approximately 644 beneficial owners.

Equity Compensation Plan Information

         Information regarding equity compensation plans, including stockholder
approved plans and non-stockholder approved plans is set forth in the Company's
proxy statement to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934.

Recent Sales of Unregistered Securities

         During the year ended December 31, 2003, the Company issued the
following equity securities that were not registered under the Securities Act of
1933, as amended (the "Act").

         In April 2003, an aggregate of 5,688,750 shares of common stock were
issued in connection with the exercise of 5,765,626 performance warrants by
officers of the Company.

         In September 2003 150,000 shares were issued in connection with the
exercise of 150,000 performance warrants.

         Each of the foregoing shares were issued pursuant to Section 4(2) of
the Act. See Note "L" to the Company's Financial Statements.

                                       28
<PAGE>

Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

         The following discussion should be read in conjunction with the
financial statements and notes thereto of the Company. Such financial statements
and information have been prepared to reflect the Company's financial position
as of December 31, 2003 and 2002.

         Historical results and trends should not be taken as indicative of
future operations, especially in light of the Company's recent restructuring.
Management's statements contained in this report that are not historical facts
are 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. Actual results may differ materially from those
included in the forward-looking statements. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of complying with
those safe harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe future plans, strategies and expectations of
the Company, are generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project," "prospects" or similar
expressions. The Company's ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Information concerning the
Company and its business, including the risk factors faced by us described in
the "Business" section starting on page 16 could materially affect the Company's
financial results.

GENERAL OVERVIEW

         PCS Research Technology, Inc., based in San Diego, California and
incorporated in Delaware in 1999, is a publisher of independent research for the
institutional investment community. We use proprietary technology platforms to
distribute financial data, research, and analytics to mutual funds, hedge funds,
and investment banks. We operate our business activities through the parent
entity, PCS Research Technology, Inc. ("PCS Research", "we", or the "Company")
and through our wholly owned subsidiary, DP Securities, Inc. ("DPS"), a
broker-dealer incorporated in the State of California.

         During 2002, our DPS subsidiary generated commission and placement fee
revenues through investment banking and institutional trading activities. As a
result of the closing of the trading desk in the third quarter of 2002, and the
change of our business focus in 2003 to stop all investment banking activities,
no revenues were generated by DPS from these activities during 2003.

         During 2002, and through April 30, 2003 we also operated through our
wholly owned subsidiary PCS Securities, Inc. ("PCS Securities" or "PCS"), a
broker-dealer incorporated in the State of Washington. PCS Securities was closed
in 2003, and accordingly, all activities related to PCS Securities have been
accounted for as discontinued operations.

                                       29
<PAGE>

Critical Accounting Policies

         Our discussion and analysis of our financial condition and results of
operations is based upon 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 consolidated financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent liabilities.

         On an on-going basis, we evaluate our estimates, including those
related to credit risk on receivables, recoverability of long lived assets,
identified intangibles, goodwill and the valuation of deferred income taxes. We
base our estimates on historical experience and on various other assumptions
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.

Revenue Recognition
-------------------

         Research services revenue represents revenue from providing individual
custom reports or reports on a monthly or annual subscription basis. Revenue
from custom reports is recognized when the report is provided, and revenue from
subscriptions is recognized ratably over the contractual period. Deferred
revenue on the consolidated balance sheets consists of subscription revenues
that will be recognized in future periods.

         Consulting services revenue represents fees from consulting services
performed by DPBT, LLC and computer programming services performed by the
Company. Consulting fees related to services performed by DPBT are based on
customer-determined points awarded at the end of each quarter, and are
recognized in the period in which the determination is made and communicated to
DPBT. Consulting fees related to computer programming services are recognized
during the period that such services are provided.

         Placement fees include gains, losses and fees, net of syndicate
expenses, arising from private equity and debt offerings in which the Company
participated as an underwriter or agent. The fees are recorded when the offering
was completed and the income was reasonably determinable. Referral fees related
to placement transactions are expensed when the revenue is recognized.

         Commissions from security transactions are recorded on a settlement
date basis, generally the third business day following the transaction date,
which is not materially different than on a trade date basis.

                                       30
<PAGE>

Identifiable Intangible Assets and Goodwill
-------------------------------------------

         Identifiable intangible assets and goodwill have been recorded and
accounted for in accordance with Statement of Financial Accounting Standards
("SFAS") No. 141, Business Combinations and SFAS No. 142, Goodwill and Other
Intangible Assets.

         In accordance with SFAS No. 142, we amortize identifiable intangible
assets over their estimated useful lives. At each balance sheet date, or earlier
if required, we evaluate the carrying amount of each intangible asset for
impairment. In accordance with SFAS No. 142, we do not amortize goodwill, but
instead perform an annual evaluation for impairment.

         As of December 31, 2002, the unamortized amount of certain identifiable
intangible assets, and the entire amount of goodwill previously capitalized in
connection with the PCH asset acquisition and the PCS merger in 2001, in the
aggregate amount of $17,996,958, was evaluated for impairment and written off.
The income (loss) from discontinued operations includes $17,073,874 of this
impairment loss.

         As of March 31, 2003 the remaining identifiable intangible asset
balance of $4,127,702, previously capitalized in connection with PCS Securities
merger, were relieved through discontinued operations in 2003.


RESULTS OF OPERATIONS

         Based on the closing of our PCS Securities subsidiary in 2003, the
consolidated statements of operations presented for 2003 and 2002 has been
segregated to reflect continuing and discontinued operations. As a result, all
revenue and expense activity related to PCS Securities' operations have been
excluded from the results of continuing operations presented herein.

Year Ended December 31, 2003 compared to the Year Ended December 31, 2002.
--------------------------------------------------------------------------

Loss From Continuing Operations                           2003              2002
                                                    ----------        ----------
Revenues
  Research services                                 $2,015,848        $1,023,255
  Consulting services                                  110,250                --
  Commissions and other fees                                --           645,391
  Placement fees                                            --           418,700
  Interest and other                                     1,253            36,918
                                                    ----------        ----------
                                                    $2,127,351        $2,124,234
                                                    ==========        ==========

Revenue

         Research services revenues for 2003 increased by 97% to $2,015,848
compared to $1,023,255 for 2002. The increase in research services revenues is
due to an increased number of research products being marketed, and increased
sales and marketing efforts.

                                       31
<PAGE>

         Revenues earned for consulting services in 2003 increased by $110,250
as a result of $99,000 in consulting fees generated by DPBT, LLC, and $11,250
for computer programming services generated by PCS Research for which there was
no comparable activity in the 2002.

         During 2002, commissions and placement fee revenues generated through
DPS were $645,391 and $418,700, respectively. In 2003 there were no commissions
or placement fees earned by the Company due to the closing of its trading desk
in the third quarter of 2002 and its change of strategic focus to the
development, marketing and distribution of independent research products and
services, and the de-emphasis on its investment banking activities in 2003.

                                                            2003         2002
                                                         ----------   ----------
Operating Expenses
   Compensation and benefits                             $1,369,965   $4,042,193
   General and administrative                               807,485    2,593,105
   Product research expenses                                545,065      141,852
   Depreciation and amortization                            279,038      301,855
   Minority interest expense                                115,976       32,356
   Impairment losses related to intangibles and goodwill         --      923,084
   Commissions and finders' fees                                 --      359,575
   Clearing and execution costs                                  --       24,197
                                                         ----------   ----------
                                                         $3,117,529   $8,418,217
                                                         ==========   ==========

Compensation and Benefits

         Compensation and benefits decreased by 66% in 2003 to $1,369,965
compared to $4,042,193 in 2002. This decrease is due primarily to the
discontinuation of compensation (salaries, bonuses, etc.) totaling $2,150,000 to
the former owners of PCS Securities. Such compensation was terminated in
connection with the discontinued operations and the agreement reached between
the Company and the former owners related to the sale of certain PCS Securities'
assets. Also contributing to the decrease in compensation and benefits were
reductions in staff personnel resulting in a net cost savings during 2003 of
$557,000, and a decrease in employer payroll taxes of $61,000 resulting from the
reduced compensation in 2003. Partially offsetting these decreases was an
increase in commission expense of $97,000 during 2003.

General and Administrative Expenses

         General and administrative expenses decreased by 69% to $807,485 in
2003 compared to $2,593,105 in 2002. This decrease is primarily due to the
cancellation of a consulting agreement with a former owner of PCS Securities
resulting in savings of $1,150,000.

         Also contributing to the decrease in general and administrative
expenses in 2003 were decreases in legal fees of $233,380, accounting fees of
$156,648, rent expenses related to office space, travel and entertainment
expenses of $53,709, and public/investor relations expenses of $53,030.

                                       32
<PAGE>

Product Research Expenses

         Product research expenses represent costs associated with generating
research services revenues. During 2003 such costs increased by 284% to $545,065
compared to $141,852 in 2002. This increase resulted from a combination of
higher research services revenues in 2003 and a higher percentage of research
products sold from third-party research providers in 2003, which have a higher
cost than research products produced in-house.

Depreciation and Amortization

         Depreciation and amortization expense decreased by 8% to $279,038 in
2003 from $301,855 in 2002. This decrease resulted primarily from the write off
of identifiable intangibles assets in the third quarter of 2002 related to the
PCH acquisition as discussed below in "Impairment Losses Related to Intangibles
and Goodwill." Amortization expense of $34,971 related to these assets was
recorded in 2002. Partially offsetting this decrease in amortization, were
increases in depreciation during 2003 associated with the Company's capitalized
computer equipment and software.

Minority Interest in Subsidiary Net Income

         Minority interest was $115,976 during 2003 compared to $32,356 during
2002, and represents the income attributable to minority member's interest in
DPBT, LLC, a joint venture formed in September 2002 between the Company and
Btech Investor, Inc. Through the joint venture, DPBT, LLC developed and
introduced BiotechTracker, a proprietary web-based research service, focused on
research, analysis and valuation of the drug development pipelines of
biotechnology and pharmaceutical companies. The increase in 2003 is due to
primarily to an increase in income generated by the joint venture in 2003.
Effective October 31, 2003 the Company and Btech Investor agreed to dissolve the
joint venture and to phase out the BiotechTracker research service. Subsequent
to the dissolution of the joint venture, the Company used the intellectual
property it had developed as part of the joint venture to launch the
BioMedTracker service in January 2004 as a replacement for BiotechTracker.

Impairment Losses Related to Intangibles and Goodwill

         During 2002, the Company recorded an impairment loss totaling $923,084
related to the amortization of identifiable intangible assets and goodwill
originally recorded as a result of the PCH acquisition in the fourth quarter of
2001. These assets were written off effective June 30, 2002 in connection with
the Company's decision, in August 2002, to close its in-house trading desk
operations. There were no similar charges in 2003.

Commissions and Finders' Fees

         During 2002, the Company recorded expenses related to commissions and
finders' fees totaling $359,575. These costs represent third-party referral fees
paid by the Company in connection with completed debt or equity placements
during the 2002 period. There were no similar charges in 2003.

                                       33
<PAGE>

Clearing and Execution Costs

         Clearing and execution costs incurred in 2002 were $24,197 and
represent fees charged by clearing brokers in connection with DPS institutional
trading activities. There were no similar expenses incurred in 2003 due to the
closing of the trading desk during the third quarter of 2002.

Other Expenses

Interest Expense

         Total interest expense for 2003 decreased by 73% to $643,676 compared
to $2,381,781 in 2002. The 2003 interest expense includes $417,189 of non-cash
interest charges related to the amortization of discounts recorded in connection
with the Company's convertible debt (issued together with warrants) entered into
during the fourth quarter of 2001, and $226,486 net of interest charges related
to notes payable, outstanding credit line balances and finance charges. Included
in the 2002 amount were non-cash interest charges of $1,638,414 related to the
amortization of discounts recorded in connection with the Company's convertible
debt entered into during the fourth quarter of 2001, $329,098 related to
liquidated damages accrued in connection with the Company's failure to comply
with registration requirement provisions contained in the convertible debt
agreements and net interest charges of $414,269 related to notes payable,
outstanding credit line balances and finance charges. The decrease in 2003
interest expense is primarily due to decreases of $1,228,886 from debt discount
amortization and $329,098 from liquidated damages, and a decrease of $159,191 in
interest from the Bear Stearns credit facility resulting primarily from lower
average balances outstanding during the 2003.

Loss From Continuing Operations
-------------------------------

         As a result of the revenue and expense items mentioned above, the
Company's net loss from continuing operations decreased 81% to $1,633,854 in
2003 from $8,675,764 in 2002.

Income (Loss) from Discontinued Operations
------------------------------------------

         Income from discontinued operations represents the net revenue and
expense activity from PCS Securities and includes the following:

<TABLE>
<CAPTION>
                                                                2003            2002
                                                            ------------    ------------
<S>                                                         <C>             <C>
Revenues
  Commission and other fees                                 $  1,115,463    $ 16,400,822

Expenses
  Compensation and benefits                                           --           7,100
  Independent research expense                                   775,817      10,775,329
  Execution and clearing costs                                   146,856       2,638,666
  Amortization of identifiable intangibles                            --       2,217,432
  General and administrative expense                                 420         250,719
  Impairment loss related to intangibles and goodwill                 --      17,073,874
                                                            ------------    ------------
    Total expenses                                               923,093      32,963,120
                                                            ------------    ------------

                                                                 192,370     (16,562,298)

    Loss on transfer of assets of discontinued operations        (18,253)             --
                                                            ------------    ------------

    Income (loss) from discontinued operations              $    174,117    $(16,562,298)
                                                            ============    ============
</TABLE>
                                       34
<PAGE>

Commission and Other Fees - Discontinued Operations
---------------------------------------------------

         Commission and other fees decreased by 93% to $1,115,463 in 2003
compared to $16,400,822 in 2002 as a result of the Company's decision to close
its PCS Securities subsidiary during January 2003. Based on this decision, PCS
Securities did not write any new business in 2003, and as such, revenues
recognized for the year ended December 31, 2003 were limited to the recognition
of deferred revenue associated with research subscriptions sold in 2002.

Independent Research Expense - Discontinued Operations
------------------------------------------------------

         Independent research expense decreased by 93% to $775,817 in 2003
compared to $10,775,329 in 2002. This was also due to the Company's decision to
close PCS Securities, and the resulting lower commission and other fee revenues,
and related independent research expense.

Execution and Clearing Costs - Discontinued Operations
------------------------------------------------------

         Execution and clearing costs decreased by 94% to $146,856 in 2003
compared to $2,638,666 in 2002. This decrease is due to reduced commission
levels resulting from the discontinued operations of the PCS Securities
business.

Amortization of Identifiable Intangibles - Discontinued Operations
------------------------------------------------------------------

         During 2002, $2,217,432 was charged as amortization expense in
connection with identifiable intangible assets recorded as part of the merger
with PCS Securities completed in the fourth quarter of 2001. During 2003 no
similar expenses were recorded since these assets were held for sale subject to
the asset transfer agreement and no longer amortized.

General and Administrative - Discontinued Operations
----------------------------------------------------

         General and administrative expenses decreased by 99.8% to $420 in 2003
from $250,719 in 2002 as a result of the discontinued operations of PCS
Securities.

Impairment Loss Related to Intangible and Goodwill - Discontinued Operations
----------------------------------------------------------------------------

         During 2002, the Company recorded non-cash expenses totaling
$17,073,874 related to the write off of all of the goodwill, and the majority of
the unamortized portion of identifiable intangible assets, that were originally

                                       35
<PAGE>

capitalized in connection with the PCS Securities acquisition in the fourth
quarter of 2001. These assets were written off in the fourth quarter of 2002 as
a result of the Company's decision to discontinue the operations of PCS
Securities during 2003. There were no similar charges in 2003 as the write off
of the remaining balance of identifiable intangible assets related to the PCS
Securities acquisition at December 31, 2003, $4,127,702 was included in the
calculation of loss on transfer of assets described below.

Loss on Transfer of Assets - Discontinued Operations
----------------------------------------------------

         In connection with the Company's agreement to transfer the PCS
trademark and customer list to the former owners of PCS, in exchange for cash,
the relief of liabilities and the surrendering of 10.3 million shares of the
Company's common stock held by these individuals, the Company recorded a loss of
$18,253 on the transfer of assets during 2003. The components of the loss are
summarized below:

Consideration received:
Cash                                                             $   250,000(a)
Credit line repayment                                              1,076,556(b)
Accrued liabilities relieved:
   Accrued compensation payable to related parties                 1,271,281(c)
   Accrued research services - net                                   398,723(d)
Surrender and cancellation of common stock                           721,000(e)
Other                                                                391,889(f)
                                                                 -----------
Total consideration                                                4,109,449

Carrying value of intangible assets transferred                   (4,127,702)(g)
                                                                 -----------

Loss on transfer of net assets                                   $   (18,253)
                                                                 ===========

         (a)      Represents a $250,000 receivable from the former owners of PCS
                  over 2 years pursuant to the asset transfer agreement ($35,833
                  of which has been received and $151,667 of which is classified
                  as current assets as of September 30, 2003), subject to
                  certain conditions as defined in the agreement.
         (b)      Represents funds paid directly to Bear Stearns from the soft
                  dollar brokerage firm that is controlled by the former owners.
         (c)      Accrued compensation payable as of December 31, 2002 pursuant
                  to respective employment and consulting agreements with the
                  former owners of PCS. Securities forgiven in connection with
                  the wind-down.
         (d)      Net customer credit balances of PCS subsidiary assumed by
                  former owners.
         (e)      10.3 million shares of the Company's common stock surrendered
                  by the former owners of PCS Securities at fair market value.
                  The fair market value of the Company's common stock at the
                  date of the transaction was $0.07.
         (f)      Additional net assets realized in connection with transaction.
         (g)      Carrying amount of PCS Securities trademark and customer list
                  intangibles at date of transaction.

                                       36
<PAGE>

Net Income - Discontinued Operations
------------------------------------

         As a result of the revenue and expense items mentioned above, the
Company's net income from discontinued operations was $174,117 for 2003,
compared to a net loss of $16,562,298 in 2002.


LIQUIDITY AND CAPITAL RESOURCES

Liquidity

         The Report of Independent Certified Public Accountants and Notes to
Consolidated Financial Statements for the Company's December 31, 2003 audited
financial statements include a "going concern" qualification that states there
is "substantial doubt" about our ability to continue as a going concern due to
the Company's lack of profitability, negative working capital and loss of
revenue associated with the closure, during 2003, of our PCS Securities
subsidiary.

         At December 31, 2003, our current liabilities exceeded our current
assets by $1,988,006, and we had $54,348 of cash and cash equivalents to meet
our immediate short-term liquidity requirements. Whereas management believes
based on expected increases in research services revenues and expected continued
improvement in operating results, our anticipated cash flow from operations
could be adequate to fund operations for the 2004 fiscal year. However, there
can be no assurance that the Company will not require additional financing
during 2004, or if additional financing is required, any such financing will be
available to the Company on acceptable terms, or at all. If adequate funds are
not available, the Company may be required to delay, scale back or eliminate its
operational plans, and it may not be able to stay in business.

Financing Activities

Credit Facilities

Credit Facility-Bank of America
-------------------------------

         On June 12, 2003 the Company entered into a promissory note agreement
with Bank of America, pursuant to which a $100,000 revolving credit line was
made available to the Company through June 10, 2006. During this period, the
Company is obligated to pay interest only on a monthly basis, based on the
outstanding principal balance. The interest rate on the note is variable and is
calculated based on the published Wall Street Journal prime rate listing plus
4.5%. As of December 31, 2003 the interest rate on the note was 8.75%.

         Following this initial period, the outstanding principal balance,
together with interest based on the applicable interest rate, shall be repaid
monthly, on a fully amortized basis, over the remaining term of the note that
runs through June 12, 2010.

         As of December 31, 2003 the outstanding principal balance under the
credit line was $100,000.

                                       37
<PAGE>

         The credit line is guaranteed by the United States Small Business
Administration, as well as by the Company's President and CEO.

Credit Facility-Bear Stearns
----------------------------

         In December 2001 the Company obtained a $3,000,000 working capital
credit facility from Bear Stearns in connection with the merger with PCS
Securities. The credit facility was originally secured by $1.5 million in
restricted cash of the Company and personal guarantees by the Company's
President and Chief Executive Officer and the two former owners of PCS
Securities. In July 2002 the Lender released $1,000,000 of the cash collateral
in connection with discussions between the parties to restructure the credit
facility. The primary focus on these discussions was to increase the maximum
amount available under the credit facility, and to release all, or a portion of
the security deposit and guarantees contained in the original agreements. These
discussions were terminated December 2002 when it became clear that acceptable
terms could not be reached. As of December 31, 2002 the outstanding balance owed
on the credit facility was $2,891,975.

         In connection with the Company's decision to close PCS Securities
during 2003 and the agreement reached with the former owners of PCS Securities,
the Company agreed not to draw any additional funds from the Bear Stearns credit
facility. Furthermore, the parties agreed the Company would transfer the
remaining $500,000 security deposit balance to pay down the outstanding credit
facility balance, and all commissions generated by PCS Securities subsequent to
January 1, 2003 that clear through Bear Stearns would be applied against the
outstanding balance of the credit facility.

         As a result of the security deposit balance transfer in February 2003
and commissions applied subsequent to January 1, 2003, the outstanding balance
of the credit facility was reduced to $386,194 by March 31, 2003 and paid in
full by April 30, 2003.

Convertible Debt

         On December 17, 2001, the Company issued convertible debentures in the
aggregate principal amount of $1,600,000. These debentures had a maturity date
of December 17, 2003, and bore interest at a rate of 10% per annum, which was
due and payable on the last day of each calendar quarter until they were paid in
full or converted into shares of the Company's common stock.

         At issuance, proceeds from the debentures were allocated to the
warrants based on the fair value of the warrants using a Black Scholes valuation
model totaling $259,182. In addition, a discount of $541,536 was applied to
account for the beneficial conversion feature at the closing date of December
17, 2001.

         In November 2002 the Company made a partial prepayment of principal in
the amount of $215,686.

                                       38
<PAGE>

         At December 31, 2002 debentures with an aggregate principal balance of
$1,384,314, were carried net of unamortized discounts of $417,189 related to the
intrinsic value of the beneficial conversion feature, which is inclusive of the
effect of conversion price resets, and the warrants.

         In February 2003 the Company and the debenture holders restructured
certain terms and provisions of the convertible debentures. In connection with
the debt restructuring, the Company was relieved of $137,844 in liquidated
damages previously accrued. The restructuring of the convertible debt has been
accounted for as a troubled debt restructuring and accordingly, no gain or loss
was recognized. At December 31, 2003 the restructured convertible debt principal
totaled $1,468,991 of which $564,747 is due within one year and is classified as
the current portion.

         Following is a summary of primary terms of the restructured agreements:

$1,250,000 Original Principal Amount Note
-----------------------------------------

         The original debenture was amended pursuant to which the principal
balance was changed to $1,425,000. The amended principal balance includes the
original principal amount plus accrued and unpaid liquidated damages and
interest of $150,000 and $25,000, respectively. The remaining balance of accrued
interest at February 28, 2003, totaling $26,736, was paid by the Company and
$125,000 of accrued liquidated damages were waived by the debenture holder. The
debenture matures on December 28, 2005 and bears interest at an annual rate of
14%. The debenture requires fixed monthly payments of principal and interest
beginning on March 28, 2003 of $25,000 for the first five (5) months, $50,000
per month thereafter through November 28, 2005 and a final payment due December
28, 2005 in the amount of $271,100.

         The outstanding principal balance may be converted into shares of the
Company's common stock at the option of the holder based on a fixed conversion
price of $0.20, and the warrant to purchase 160,000 shares of the Company's
common stock that were included in the original debenture at a fixed exercise
price of $0.086 for the term of the warrants. In addition, the debenture holder
agreed to waive all registration requirements with respect to the convertible
debenture, warrants and shares underlying the warrants. As of December 31, 2003
the outstanding principal balance was $1,313,991, of which $564,747 was a
current liability and $749,244 was a long-term liability.

         In October 2003 the debenture holder agreed to defer scheduled
principal payments originally due on October 28, 2003, November 28, 2003 and
December 28, 2003, and to add the deferred principal payments to the amount due
with the final payment on December 28, 2005.

$350,000 Original Principal Amount Note
---------------------------------------

The original debenture was amended pursuant to which the principal balance was
changed to $155,000. The amended principal balance includes the original
principal amount, less the partial principal payment which was $215,686 in
November 2002, plus accrued and unpaid liquidated damages and interest of
$16,656 and $4,030, respectively. The debenture holder waived accrued liquidated
damages in the amount of $12,844 were waived by the debenture holder. The

                                       39
<PAGE>

debenture matures on February 28, 2005 and bears interest at an annual rate of
14%. Payment of interest is required quarterly, beginning March 30, 2003 and the
principal balance is payable upon the maturity date. The outstanding principal
balance may be converted in shares of the Company's common stock at the option
of the holder based on a fixed conversion price of $0.20, and the warrant to
purchase 35,000 shares of the Company's common stock that were included in the
original debenture at a fixed exercise price of $0.086 for the term of the
warrants. In addition, the debenture holder agreed to waive all registration
requirements with respect to the convertible debenture, warrants and shares
underlying the warrants. As of December 31, 2003 the outstanding principal
balance was $155,000, all of which was reflected as a long-term liability.

Promissory Notes
----------------

         On November 22, 2001 the Company borrowed $300,000 from an unrelated
party. In connection with the loan, the Company issued a note to the lender,
which is unsecured, bears interest at 15% per annum and was originally due in
July 2002. In addition, the Company issued 150,000 detachable warrants to the
lender for 150,000 shares of the Company's common stock at an exercise price of
$2.30 per share. The warrants are exercisable at the option of the holder and
expire in November 2006. In November 2002 the Company paid interest accrued
through October 31, 2002 totaling $42,875 and received and extension of the
maturity date on the note to May 15, 2003. In May 2003 the Company received an
extension of the maturity date on the note to July 16, 2003, and in July 2003,
the maturity date was extended to January 1, 2004. In December 2003 the maturity
date was extended again to July 1, 2004. During 2003 the Company recorded
interest expense in connection with this note totaling $45,000, and as of
December 31, 2003 total interest payable in connection with these loans was
$52,625.

         On May 14, 2001, October 31 2001 and January 13, 2002, the Company
borrowed an aggregate of $187,500 from an entity controlled by an
officer/stockholder of the Company. In connection with the loans, the Company
issued notes to lender that are unsecured, bear interest at 12% and matured on
May 14, 2003, October 31, 2003 and July 1, 2003, respectively. During 2003 the
maturity dates for all three notes were extended to July 1, 2004. During 2003
the Company recorded interest expense in connection with these notes totaling
$22,500, and as of December 31, 2003 total interest payable in connection with
these loans was $26,260.

Obligations to Former Owners of PCS Securities, Inc.

         In connection with the merger with PCS Securities, the Company agreed
to pay the former owners of PCS as part of the purchase price, a cash adjustment
equal to PCS's Tangible Net Book Value (as defined) at December 31, 2001. The
total estimated additional purchase price of $700,000 was accrued, and included
on the balance sheet at December 31, 2001 as Purchase Price Consideration Due to
Related Parties. In July 2002, the final purchase price consideration of
$565,926 was agreed upon and paid by the Company, resulting in a corresponding
reduction to goodwill in the amount of $134,074.

         During the year ended December 31, 2002 the Company recorded expenses
totaling $1,271,281 that were accrued, and included on the balance sheet at
December 31, 2002 as accounts payable and accrued liabilities related to the
respective employment and consulting agreements with the former owners of PCS.

                                       40
<PAGE>

In connection with the agreement entered into between the Company and the former
owners of PCS in February 2003 and the winding down of the PCS Securities
subsidiary, the parties agreed that these accrued amounts would not be paid by
the Company, and that the respective employment and consulting agreements would
be terminated.

Contractual Obligations, Commercial Commitments and Off-Balance Sheet
Arrangements

The following summarizes our contractual obligations, commercial commitments and
off-balance sheet arrangements at December 31, 2003, and the effect such
obligations could have on our liquidity and cash flow in future periods:

<TABLE>
<CAPTION>
                                    Amount of Commitment Expiring by Period
                       --------------------------------------------------------------
                       Less Than      1 - 3        3 - 5        Over 5
                         1 Year       Years        Years        Years        Total
                       ----------   ----------   ----------   ----------   ----------
<S>                    <C>          <C>          <C>          <C>          <C>
Notes payable          $  487,500   $       --   $       --   $       --   $  487,500
Convertible debt (a)      564,747      904,244           --           --    1,468,991
Lease commitments         135,455      427,366           --           --      562,821
                       ----------   ----------   ----------   ----------   ----------
Total                  $1,187,702   $1,331,610   $       --   $       --   $2,519,312
                       ==========   ==========   ==========   ==========   ==========
</TABLE>

(a) Based on restructuring of convertible debt effective February 28, 2003

Recent Accounting Pronouncements

         There are no recent accounting pronouncements that have had or are
likely to have a material effect on the Company's financial position or results
of operations. See accompanying notes to consolidated financial statements for a
description.



Item 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         See Financial Statements following Item 15 of this Annual Report on
Form 10-KSB.


Item 8.  CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

         On September 8, 2003, the Company dismissed the accounting firm of
Grant Thornton LLP ("Grant Thornton") as the independent accountant to audit the
Company's financial statements.

         The reports of Grant Thornton on the Company's financial statements for
the fiscal years ended December 31, 2002 and 2001 did not contain an adverse
opinion or disclaimer of opinion and were not qualified or modified as to audit
scope or accounting principles. The December 31, 2001 report did not contain any
uncertainties. However, the December 31, 2002 report was modified as to an
uncertainty relative to the Company's ability to continue as a going concern.

                                       41
<PAGE>

         The Company's Board of Directors approved the dismissal of Grant
Thornton.

         During the two most recent fiscal years and any subsequent interim
period preceding Grant Thornton's dismissal, there were no disagreement(s) with
Grant Thornton on any matter of accounting principles or practice, financial
statement disclosure or auditing scope or procedure, which disagreement(s), if
not resolved to the satisfaction of Grant Thornton, would have caused it to make
reference to the subject matter of the disagreement(s) in connection with its
report.

         No "reportable events" (as defined in Item 304 (a) (1) (v) of
Regulation S-K) occurred during the Company's two most recent fiscal years and
any subsequent interim period preceding the accounting firm of Grant Thornton's
dismissal.

         The Company has requested that Grant Thornton furnish it with a letter
addressed to the Securities and Exchange Commission stating whether or not Grant
Thornton agrees with the above statements. A copy of such letter is attached
hereto as Exhibit 16.1.

         The Company engaged Peterson & Co., LLP ("Peterson"), as its new
independent accountants as of September 12, 2003. Prior to such date, the
Company did not consult with Peterson regarding (i) the application of
accounting principles to a specified transaction, either completed or proposed,
(ii) the type of audit opinion that might be rendered by Peterson on the
Company's financial statements, or (iii) any other matter that was the subject
of a disagreement between the Company and its auditor (as defined in Item
304(a)(1)(iv) of Regulation S-K and its related instructions) or a reportable
event (as described in Item 304(a) (1)(v) of Regulation S-K).

ITEM 8A. Controls and Procedures

       An evaluation of the Company's disclosure controls and procedures (as
defined in Section 13(a)-14(c) of the Exchange Act) as of December 31, 2003 was
carried out under the supervision and with the participation of the Company's
Chief Executive Officer and Principal Accounting Officer and several other
members of the Company's senior management. The Company's Chief Executive
Officer and Principal Accounting Officer concluded that the Company's disclosure
controls and procedures as currently in effect are effective in ensuring that
the information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is (i) accumulated and communicated to the
Company's management (including the Chief Executive Officer and Principal
Accounting Officer) in a timely manner, and (ii) recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commission's rules and forms. There have been no changes in the Company's
internal control over financial reporting (as defined in Rule 13a-15(f) of the
Exchange Act) that occurred during the quarter ended December 31, 2003, that
have materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

       The Company intends to continually review and evaluate the design and
effectiveness of its disclosure controls and procedures and to improve its
controls and procedures over time and to correct any deficiencies that it may
discover in the future. The goal is to ensure that senior management has timely

                                       42
<PAGE>

access to all material financial and non-financial information concerning the
Company's business. While the Company believes the present design of its
disclosure controls and procedures is effective to achieve its goal, future
events affecting its business may cause the Company to modify its disclosure
controls and procedures.


                                    PART III
                                    --------

Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT OF THE REGISTRANT.

         Incorporated herein by reference to the Company's definitive proxy
statement to be filed pursuant to Regulation 14A under the Securities Exchange
Act of 1934.


Item 10. EXECUTIVE COMPENSATION

         Incorporated herein by reference to the Company's definitive proxy
statement to be filed pursuant to Regulation 14A under the Securities Exchange
Act of 1934.


Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         Incorporated herein by reference to the Company's definitive proxy
statement to be filed pursuant to Regulation 14A under the Securities Exchange
Act of 1934.


Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Incorporated herein by reference to the Company's definitive proxy
statement to be filed pursuant to Regulation 14A under the Securities Exchange
Act of 1934.


Item 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)    Exhibits.

    3.01*         Certificate of Incorporation of the Company.

    3.02*         By-Laws of the Company.

    4.01*         Specimen Certificate for shares of Common Stock.

   10.01*         Employment Agreement between the Company and Brian M.
                  Overstreet, as amended.

                                       43
<PAGE>

   10.02*         Employment Agreement between the Company and Robert Kyle.

   10.03*         Employment Agreement between the Company and Matthew Kliber.

   10.04*         Employment Agreement between the Company and Susanne Pruitt.

   10.05*         Consulting Agreement between the Company and Raymond A. Hill,
                  III.

   10.06*         Employment Agreement between the Company and Michael Lorber.

   10.07*         Agreement and Plan of Merger, dated as of December 14, 2001,
                  by and among DirectPlacement, Inc., PCS Merger Corp., PCS
                  Securities, Inc., Susanne S. Pruitt and Raymond A. Hill, III.

   10.8*          Voting Agreement, dated as of December 21, 2001, by and among
                  DirectPlacment, Inc., Brian M. Overstreet, Midori USA
                  Corporation, Susanne S. Pruitt and Raymond A. Hill, III.

   10.9*          Registration Rights Agreement, dated as of December 21, 2001,
                  by and among DirectPlacement, Inc. and Susanne S. Pruitt and
                  Raymond A. Hill, III.

   10.10*         Securities Purchase Agreement, dated as of December 17, 2001,
                  by and between the Company and Global Capital Funding Group,
                  L.P.

   10.11*         Registration Rights Agreement, dated as of December 17, 2001,
                  between the Company and Global Capital Funding Group, L.P.

   10.12*         Securities Purchase Agreement, dated as of December 17, 2001,
                  by and between the Company and GCA Strategic Investment Fund
                  Limited.

   10.13*         Registration Rights Agreement, dated as of December 17, 2001,
                  between the Company and GCA Strategic Investment Fund Limited.

   10.14*         Securities Purchase Agreement, dated as of March 6, 2002, by
                  and between the Company, and GCA Strategic Investment Fund
                  Limited.

   10.15*         Registration Rights Agreement, dated as of March 6, 2002, by
                  and between the Company and GCA Strategic Investment Fund
                  Limited.

   10.16*         Institutional Account Agreement, dated December 17, 2001, by
                  and between the Company and Bear Stearns & Co., Bear Stearns
                  Securities Corp. and their affiliates.

   10.17*         Promissory Note, dated December 17, 2001, issued to Bear
                  Stearns Securities Corp.

                                       44
<PAGE>

   10.18*         Guarantee, dated December 17, 2001, by and between Bear
                  Stearns Securities Corp. and Brian M. Overstreet.

   10.19*         Research Services Agreement, dated as of November 30, 2001,
                  between PCS Securities, Inc. and Institutional Research
                  Services, Inc.

   10.20*         2001 Stock Option Plan, as amended.

   10.21*         Agreement, dated as of January 31, 2003, by and among the
                  Company, PCS Securities, Inc., Susanne S. Pruitt, Raymond A.
                  Hill, III, Brian M. Overstreet, and Institutional Research
                  Services, Inc.

   10.22*         Amended convertible debenture agreement dated February 28,
                  2003 with GCA Strategic Investment Fund Limited

   10.23*         Amended warrant agreement dated February 28, 2003 with GCA
                  Strategic Investment Fund Limited

   10.24*         Amended convertible debenture agreement dated February 28,
                  2003 with Global Capital Funding Group, LP

   10.25*         Amended warrant agreement dated February 28, 2003 with Global
                  Capital Funding Group, LP

   10.26*         Security agreement dated February 28, 2003 with Global Capital
                  Funding Group, LP

  21.01*          Subsidiaries of Registrant.

    31            Certification pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002, as amended.

    32            Certification pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002, as amended.

* Previously filed with the Securities and Exchange Commission.

(b)    Reports on Form 8-K

              None

Item 14. Principal Accountant Fees and Services.

         Incorporated herein by reference to the Company's definitive proxy
statement to be filed pursuant to Regulation 14A under the Securities Exchange
Act of 1934.

                                       45
<PAGE>

         PCS RESEARCH TECHNOLOGY, INC. (Formerly DirectPlacement, Inc.)
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Certified Public Accountants...........................F-1

Report of Predecessor Auditors...............................................F-2

Consolidated Balance Sheets..................................................F-3

Consolidated Statements of Operations........................................F-4

Consolidated Statement of Stockholders' Equity (Deficit).....................F-5

Consolidated Statements of Cash Flows........................................F-6

Notes to Consolidated Financial Statements...................................F-7

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Stockholders

We have audited the balance sheet of PCS Research Technologies, Inc. (a Delaware
corporation) and subsidiaries as of December 31, 2003, and the related
statements of operations, stockholders' equity (deficit), and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of PCS
Research Technologies, Inc. and subsidiaries as of December 31, 2002, were
audited by other auditors whose report, dated February 14, 2003 (except for Note
S, as to which the date is February 28, 2003), on those statements included an
explanatory paragraph that raised doubt about the Company's ability to continue
as a going concern described in Note C to the financial statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the 2003 financial statements referred to above present fairly,
in all material respects, the financial position of PCS Research Technologies,
Inc. and subsidiaries as of December 31, 2003, and the results of its operations
and its cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note C to the
financial statements, the Company has suffered recurring losses from continuing
operations and has a net capital deficiency that raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note C. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.




                                              PETERSON & CO., LLP

March 26, 2004
San Diego, California

                                      F-1
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
PCS Research Technology, Inc.

We have audited the accompanying consolidated balance sheets of PCS Research
Technology, Inc. (a Delaware corporation) and subsidiaries as of December 31,
2002 and 2001, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of PCS Research
Technology, Inc. and subsidiaries as of December 31, 2002 and 2001, and the
results of their operations and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As more fully discussed in
Note C, the Company incurred a net loss of $25.2 million during the year ended
December 31, 2002, and, as of that date, the Company's current liabilities
exceeded its current assets by $5.0 million. Further, as discussed in Note S, on
January 31, 2003, the Board of Directors of the Company decided to wind down the
activities of its subsidiary, PCS Securities, Inc. and approved an agreement to
sell certain of the subsidiary assets, including the trademark and customer
list. The subsidiary generated over 88% of the Company's consolidated revenues
in 2002. The loss of revenue associated with the subsidiary, combined with the
Company's lack of profitability and negative working capital, among other
factors, as discussed in Note C, raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note C. The accompanying consolidated financial
statements do not include any adjustments that might result from the resolution
of these matters.


Grant Thornton LLP
Irvine, California
February 14, 2003 (except for Note S,
  as to which the date is February 28, 2003)

                                      F-2
<PAGE>

         PCS Research Technology, Inc. (formerly DirectPlacement, Inc.)
                           CONSOLIDATED BALANCE SHEETS
                                  December 31,

<TABLE>
<CAPTION>
                                     ASSETS                                    2003            2002
                                                                           ------------    ------------
<S>                                                                        <C>             <C>
CURRENT ASSETS
Cash and cash equivalents                                                  $     54,348    $    390,079
Restricted cash                                                                      --         500,000
Commissions and other receivables                                                20,206          44,636
Receivable from related parties                                                 125,000              --
Prepaid research                                                                242,885              --
Other current assets                                                             10,472          50,097
Assets of discontinued operations, current portion                                   --       2,095,044
                                                                           ------------    ------------
        Total current assets                                                    452,911       3,079,856

Property and equipment, net                                                     493,493         724,917
Assets of discontinued operations                                                    --       4,127,702
Receivable from related parties, net of current portion                          62,500              --
Other assets                                                                      2,835          48,302
                                                                           ------------    ------------
        Total assets                                                       $  1,011,739    $  7,980,777
                                                                           ============    ============

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable                                                           $    213,128    $    154,850
Accrued Interest Expense                                                        129,082         378,802
Accrued liabilities payable to related parties                                       --       1,271,281
Revolving credit facility                                                       100,000       2,891,975
Current portion of convertible debt, net                                        564,747         967,125
Notes payable                                                                   300,000         300,000
Note payable - related party                                                    187,500         187,500
Liabilities of discontinued operations                                               --       1,740,093
Deferred revenue                                                                752,797         194,892
Other current liabilities                                                       193,663              --
                                                                           ------------    ------------
        Total current liabilities                                             2,440,917       8,086,518

Convertible debt                                                                904,244              --
Minority interest in subsidiary                                                 (60,739)          2,356
                                                                           ------------    ------------
       Total liabilities                                                      3,284,422       8,088,874

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.0001 par value; 10,000,000 authorized
   shares; no shares outstanding                                                     --              --
Common stock; $.0001 par value, 80,000,000 authorized,
   34,557,052 issued and 22,790,336 outstanding at December 31, 2003
   and 28,718,302 issued and 28,300,436 outstanding at December 31, 2002          2,321           2,872
Additional paid-in capital                                                   28,925,921      29,630,220
Treasury stock, 417,866 common shares at cost                                   (58,501)        (58,501)
Accumulated deficit                                                         (31,142,424)    (29,682,688)
                                                                           ------------    ------------
        Total stockholders' deficit                                          (2,272,683)       (108,097)

        Total liabilities and stockholders' equity (deficit)               $  1,011,739    $  7,980,777
                                                                           ============    ============
</TABLE>
The accompanying notes are an integral part of these financial statements

                                      F-3
<PAGE>

         PCS Research Technology, Inc. (formerly DirectPlacement, Inc.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            Years Ended December 31,

<TABLE>
<CAPTION>
                                                                    2003            2002
                                                                ------------    ------------
<S>                                                             <C>             <C>
REVENUES
 Research services                                              $  2,015,848    $  1,023,225
 Consulting services                                                 110,250              --
 Placement fees                                                           --         418,700
 Commissions                                                              --         645,391
 Interest and other                                                    1,253          36,918
                                                                ------------    ------------
       Total revenue                                               2,127,351       2,124,234
                                                                ------------    ------------

EXPENSES
 Compensation and benefits                                         1,369,965       4,042,193
 General and administrative                                          807,485       2,593,105
  Product research expenses                                          545,065         141,852
 Clearing and execution costs                                             --          24,197
 Depreciation and amortization                                       279,038         301,855
 Commissions and finder's fees                                            --         359,575
 Impairment loss related to intangibles and goodwill                      --         923,084
 Minority interest expense                                           115,976          32,356
                                                                ------------    ------------
       Total expenses                                              3,117,529       8,418,217
                                                                ------------    ------------

Operating loss                                                      (990,178)     (6,293,983)

OTHER EXPENSE
 Interest                                                           (643,675)     (2,381,781)
                                                                ------------    ------------
Net loss from continuing operations                               (1,633,853)     (8,675,764)

 Discontinued operations
     Income (loss) from discontinued operations
     (including loss on transfer of assets of discontinued
     operations in the amount of $18,253 for the
     year ended December 31, 2003)                                   174,117     (16,562,298)
                                                                ------------    ------------

       Net loss                                                 $ (1,459,736)   $(25,238,062)
                                                                ============    ============

       Earnings (loss) per share - basic and diluted
          Loss per share - continuing operations                $      (0.07)   $      (0.35)
          Earnings (loss) per share - discontinued operations           0.01           (0.66)
                                                                ------------    ------------

           Total loss per share - basic and diluted             $      (0.06)   $      (1.01)
                                                                ============    ============

       Weighted average number of common shares                   23,229,494      25,032,607
                                                                ============    ============
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                      F-4
<PAGE>

         PCS Research Technology, Inc. (formerly DirectPlacement, Inc.)
            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                     Years Ended December 31, 2003 and 2002

<TABLE>
<CAPTION>
                                              Common Stock             Additional
                                      ----------------------------      Paid-in        Treasury       Accumulated
                                         Shares          Amount         capital          Stock           Deficit         Total
                                      ------------    ------------    ------------    ------------    ------------    ------------
<S>                                     <C>           <C>               <C>           <C>             <C>               <C>
Balance at December 31, 2001            22,758,856    $      2,276      28,406,397    $         --    $ (4,444,626)     23,964,047

Intrinsic value of beneficial
  conversion associated with
  convertible debentures                                                   813,544              --                         813,544
Issuance of common shares                5,959,446             596         410,279              --                         410,875
Common shares returned to
  Treasury                                (417,866)                                        (58,501)                        (58,501)
Net loss                                                                                               (25,238,062)    (25,238,062)
                                      ------------    ------------    ------------    ------------    ------------    ------------

Balance at December 31, 2002            28,300,436           2,872      29,630,220         (58,501)    (29,682,688)       (108,097)

Issuance of options for services                                            16,000                                          16,000
Cancellation of shares - PCS
  settlement agreement                 (10,300,000)         (1,030)       (719,970)                                       (721,000)
Cancellation of shares - litigation
  settlement agreements/judgments       (1,048,750)           (105)            105                                              --
Cancellation of shares - voluntary
  surrender                                   (100)             --              --                                              --
Issuance of common shares                5,838,750             584            (434)                                            150

 Net loss                                                                                               (1,459,736)     (1,459,736)
                                      ------------    ------------    ------------    ------------    ------------    ------------

Balance at December 31, 2003            22,790,336    $      2,321    $ 28,925,921    $    (58,501)   $(31,142,424)   $ (2,272,683)
                                      ============    ============    ============    ============    ============    ============
</TABLE>
The accompanying notes are an integral part of these financial statements

                                      F-5
<PAGE>

         PCS Research Technology, Inc. (formerly DirectPlacement, Inc.)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            Years Ended December 31,
<TABLE>
<CAPTION>
                                                                                      2003            2002
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
Cash flows from operating activities
      Net loss                                                                    $ (1,459,736)   $(25,238,062)
      Adjustments to reconcile net loss to net cash flows used in
         operating activities
         Depreciation and amortization                                                 279,038         301,855
         Amortization of discounts on indebtedness                                     417,189       1,638,414
         Impairment loss related to intangibles and goodwill                                --         923,084
         Stock and stock options issued for services rendered                           16,000          21,875
         Minority interest expense                                                     115,976          32,356
         Income (loss) from discontinued operations (including loss on
         transfer of assets of discontinued operations in the
         amount of $18,253 for the year ended December 31, 2003)                      (174,117)     16,562,298
      Net changes in assets and liabilities
         Increase in commissions and other receivables                                  24,430          18,753
         Increase in deferred research costs                                          (242,885)             --
         (Increase) decrease  in other current assets                                   39,625         (16,455)
         Decrease  in other assets                                                      45,467          47,899
         Decrease in cash - discontinued operations                                                    (58,481)
         Increase in accounts payable and accrued liabilities                          (22,214)        838,099
         Increase in deferred revenue                                                  582,340          57,035
                                                                                  ------------    ------------
      Net cash provided by (used in) continuing operations operating activities       (378,887)     (4,871,331)

Cash flows from investing  activities
      Additions to property and equipment                                              (47,614)       (321,502)
      Decrease in purchase price consideration due to related parties                       --        (565,926)
      Change in net assets of discontinued operations                                2,476,988       2,516,849
                                                                                  ------------    ------------
      Net cash flows (used in) provided by investing activities                      2,429,374       1,629,421

Cash flows from financing activities
      Borrowings from revolving credit facility                                     (2,791,975)      2,641,975
      Net proceeds (payments) under notes payable                                      195,686         517,500
      Release of restricted cash                                                       500,000       1,000,000
      Repayment of notes and convertible debt                                         (111,009)       (715,686)
      Proceeds from exercise of common stock warrants                                      150              --
      Purchase of treasury stock                                                            --         (58,501)
      Distributions to minority members                                               (179,070)        (30,000)
                                                                                  ------------    ------------
      Net cash flows provided by  financing activities                              (2,386,218)      3,355,288

      Net increase (decrease)  in cash and cash equivalents                           (335,731)        113,378

Cash and cash equivalents, beginning of period                                         390,079         276,701
                                                                                  ------------    ------------

Cash and cash equivalents, end of period                                          $     54,348    $    390,079
                                                                                  ============    ============

Supplemental disclosures  of cash flow information
      Interest paid                                                               $    155,444    $    291,213
                                                                                  ============    ============
      Taxes paid                                                                  $      2,400    $      3,200
                                                                                  ============    ============
</TABLE>
The accompanying notes are an integral part of these financial statements

                                      F-6

<PAGE>

         PCS RESEARCH TECHNOLOGY, INC. (formerly DirectPlacement, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

NOTE A - ORGANIZATION

PCS Research Technology, Inc. and subsidiaries (the "Company" or "PCSR"),
formerly known as DirectPlacement, Inc. ("DPI") was incorporated in the State of
Delaware in May 1999 and restated its certificate of incorporation in November
2001. PCSR is a publisher of independent research for the institutional
investment community that uses proprietary technology platforms to distribute
financial data, research, and analytics to mutual funds, hedge funds, and
investment banks. The Company's offices are located in San Diego, California. In
October 2002, the Company changed its name to PCS Research Technology, Inc.

NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
---------------------

The consolidated financial statements include the accounts of the Company, its
wholly owned broker-dealer subsidiaries, DP Securities, Inc. and PCS Securities,
Inc. and its majority-owned joint venture, DPBT, LLC. All material inter-company
accounts and transactions have been eliminated in consolidation.

As discussed more fully in Note D - Discontinued Operations, the Company
discontinued the operations of PCS Securities, a wholly owned subsidiary, in the
first quarter of 2003 and all revenue and expense activity and related balance
sheet accounts of PCS Securities for the periods presented have been
reclassified and presented as discontinued operations as of December 31, 2003
and 2002.

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the periods presented. Actual results could differ materially
from those estimates.

Cash and Cash Equivalents
-------------------------

The Company considers all money market funds and demand deposits with original
maturities of three months or less when purchased to be cash equivalents. The
cash equivalents are readily redeemable and their fair value approximates cost.

Property and Equipment
----------------------

Property and equipment is stated at cost and includes software costs, computer
equipment and furniture and equipment. Depreciation is computed using the
straight-line method over the estimated useful life of the asset or the life of
the lease, whichever is shorter, which ranges from three to five years.

                                      F-7
<PAGE>

NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In accordance with Statement of Position 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use, the Company
capitalizes third party and direct payroll costs incurred to acquire or develop
its internally used proprietary software. Upgrades and enhancements that add
additional functionalities and features on an ongoing basis are capitalized when
incurred.

Amortization is computed using the straight-line method over the estimated
useful life of five years. Cost associated with creating new or additional
content for databases are expensed as incurred and are classified as product
research expenses in the consolidated statements of operations.

Identifiable Intangible Assets
------------------------------

Identifiable intangible assets consisting of the trade-name, customer lists and
a guaranteed contract with a research provider were capitalized in 2001 in
connection with an asset acquisition from PCH Securities, Inc. ("PCH") the PCH
asset acquisition and the acquisition of PCS Securities, Inc. and were recorded
in accordance with Statement of Financial Accounting Standards ("SFAS") No. 141,
Business Combinations. Identifiable intangible assets are amortizable over their
estimated useful lives ranging from three to ten years.

At each balance sheet date, or earlier if required, the Company evaluates the
carrying amount of each intangible asset for impairment. With respect to
intangibles, events that would cause the Company to conduct an impairment
assessment include significant losses of customers, or diminished marketability
of acquired technology. Impairment losses are recorded when indicators of
impairment are present and the asset's carrying amount is greater than the sum
of the undiscounted cash flows estimated to be generated from the asset. As of
December 31, 2003, all identifiable intangible assets previously capitalized in
connection with the PCH asset acquisition and the acquisition of PCS Securities,
Inc. in 2001 were written off due to impairment. (See Note D - Discontinued
Operations and Note S - Acquisitions).

Goodwill
--------

The Company accounts for Goodwill in accordance with SFAS No. 142, Goodwill and
Other Intangible Assets. In accordance with SFAS No. 142, goodwill is no longer
amortized and instead, is evaluated annually for impairment. Impairment losses
are recorded when the implied value of goodwill, calculated based on estimated
undiscounted future cash flows to be generated by the reporting unit, is less
than its carrying amount. As of December 31, 2002, all goodwill previously
capitalized in connection with the PCH asset acquisition and the acquisition of
PCS Securities, Inc. in 2001 were written off due to impairment. (See Note D -
Discontinued Operations and Note S - Acquisitions).

Revenue Recognition
-------------------

Research services revenue represents revenue from providing individual custom
reports or reports on a monthly or annual subscription basis. Revenue from
custom reports is recognized when the report is provided, and revenue from
subscriptions is recognized ratably over the contractual period.

                                      F-8
<PAGE>

NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Deferred revenue on the consolidated balance sheets consists of subscription
revenues that have been received but not yet earned.

Consulting services revenue represents fees from consulting services performed
by DPBT, LLC, and computer programming services performed by PCS Research.
Consulting fees related to services performed by DPBT are based on
customer-determined points awarded at the end of each quarter, and are
recognized in the period in which the determination is made and communicated to
DPBT. Consulting fees related to computer programming services are recognized
during the period that such services are provided.

Placement fees include gains, losses and fees, net of syndicate expenses,
arising from private equity and debt offerings in which the Company participates
as an agent. The fees are recorded when the offering is completed and the income
is reasonably determinable. Referral fees related to placement transactions are
expensed when the revenue is recognized.

Commissions from security transactions are recorded on a settlement date basis,
generally the third business day following the transaction date, which is not
materially different than on a trade date basis.

Concentration of Credit Risk
----------------------------

The Company's customers are concentrated in the financial services industry and
include investment banks, institutional investors and private equity funds. The
Company derives most of its revenue from customers located within the United
States. No one customer accounts for more than 5% of consolidated total revenue.
The Company does not require collateral, and evaluates credit worthiness on a
customer-by-customer basis based on reputation of customer within the industry,
historical trends and other information. To date, losses related to bad debts
have been within management's expectations.

Risks and Uncertainties
-----------------------

The financial statements contain disclosures about significant estimates and
material concentrations known to management that are required to be disclosed in
accordance with the AICPA Statement of Position 94-6, Disclosure of Certain
Significant Risks and Uncertainties.

The Company has experienced losses from inception and has an accumulated
deficit. The ability of the Company to realize its assets is contingent upon
generating revenues exceeding continuing costs (see Note C - Going Concern and
Liquidity).

Derivatives and Hedging Activities
----------------------------------

The Company does not engage in derivatives or hedging transactions.

Financial Instruments
---------------------

The Company does not hold financial instruments for trading purposes as part of
its business operations.

                                      F-9
<PAGE>

NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Substantially all of the Company's financial instruments, which include cash and
cash equivalents, and indebtedness are carried at amounts which approximate
their fair value, except for the fair value of convertible debentures at
December 31, 2002 which had a carrying value of $967,125 and a fair value of
$1,580,000. At December 31, 2003 the carrying value of convertible debentures
approximate their fair value. (see Note I - Convertible Debt).

Net Capital and Reserve Requirements
------------------------------------

The Company's subsidiary, DP Securities, Inc., is subject to the Uniform Net
Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934. This rule
requires that they maintain minimum net capital (as defined) and requires that
the ratio of aggregate indebtedness (as defined) to net capital may not exceed
15 to 1. The Uniform Net Capital Rules also provides that equity capital may not
be withdrawn or cash dividends paid if the resulting ratio of aggregate
indebtedness to net capital would exceed 10 to 1. At December 31, 2003, DP
Securities had defined net capital exceeding the minimum required net capital of
$5,000.

Income Taxes
------------

Under SFAS No. 109, Accounting for Income Taxes, the liability method is used in
accounting for income taxes. Under this method, deferred income tax assets and
liabilities result from temporary differences between the income tax basis of
assets and liabilities and their reported amounts in the financial statements
that will result in taxable income and deductions in future years. A valuation
allowance is recognized against deferred tax assets when it is more likely than
not that the assets will not be realized.

Earnings (Loss) Per Share
-------------------------

The Company calculates earning per share in accordance with SFAS No. 128,
Earnings Per Share, and SEC Staff Accounting Bulletin No. 98. Accordingly, basic
loss per share is computed using the weighted average number of common shares
and diluted loss per share are computed based on the weighted average number of
common shares and all common equivalent shares outstanding during the period in
which they are dilutive. Common equivalent shares consist of shares issuable
upon the exercise of stock options (using the treasury stock method) or
warrants; common equivalent shares are excluded from the calculation if their
effect is anti-dilutive.

Stock-Based Compensation
------------------------

The Company measures compensation expense related to the grant of stock options
and stock-based awards to employees in accordance with the provisions of
Accounting Principles Board ("APB") Opinion No. 25, under which compensation
expense, if any, is generally based on the difference between the exercise price
of an option, or the amount paid for the award and the market price or fair
value of the underlying common stock at the date of the award. Stock-based
compensation arrangements involving non-employees are accounted for under SFAS
No. 123, "Accounting for Stock-Based Compensation," under which such
arrangements are accounted for based on the fair value of the option or award.

                                      F-10
<PAGE>

NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company adopted the disclosure requirements of SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure," an amendment of SFAS No.
123 as of January 1, 2003, which require certain disclosures about stock-based
employee compensation plans in an entity's accounting policy note.

Those disclosures include a tabular format of pro forma net income and, if
applicable, earnings per share under the fair value method if the intrinsic
value method is used in any period presented. Pro forma information in a tabular
format is also required in the notes to interim financial information if the
intrinsic value method is used in any period presented. The adoption of SFAS No.
148 did not have a material impact to these consolidated financial statements
and the disclosure requirements are included below.

As of May 15, 2001, the Board of Directors of the Company adopted the 2001 Stock
Plan ("2001 Plan"), which was approved by the Company's shareholders in November
2001. The 2001 Plan provides for accelerated vesting provisions in the event of
a change in control and other events, as defined.

During 2003, the Company issued 200,000 stock options to purchase the Company's
common stock in exchange for services rendered. Fifty percent (50%) of the
options vested at the date of the grant and the remaining fifty percent (50%)
vest on the first anniversary of the date of grant. The Company has accounted
for these issuances in accordance with SFAS No. 123 and has recorded an expense
of $16,000 representing the fair value of the options using a Black-Scholes
option-pricing model. The options are exercisable at price of $0.08 per share
and have a term of 10 years

During 2003, the Company issued options to employees to purchase 1,230,000
shares of its common stock, at exercise prices ranging from $0.08 - $0.14, and
options to purchase 746,093 shares were forfeited and cancelled. All options
granted during the period have a term of ten years, vest over three years and
were issued at an exercise prices equal to the market value of the underlying
stock at the date of grant. As of December 31, 2003, 3,040,000 options to
purchase shares of the Company's common stock were outstanding pursuant to the
2001 Plan.

A summary of changes in common stock options during 2003 and 2002 follows:

                                      Number     Weighted Average  Exercisable
                                     of Shares    Exercise Price     Shares
                                   ------------    ------------   ------------
Outstanding at December 31, 2001      1,947,552    $       1.48        328,331

  Granted                             1,947,004    $       0.86
   Forfeited                         (1,538,463)   $       1.60
   Exercised                                 --
                                   ------------
Outstanding at December 31, 2002      2,356,093    $       1.06      1,596,094

  Granted                             1,430,000    $       0.09
   Forfeited                           (746,093)   $       0.64
   Exercised                                 --
                                   ------------
Outstanding at December 31, 2003      3,040,000    $       0.61      2,022,188

                                      F-11
<PAGE>

NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

SFAS No. 123 requires the Company to provide pro forma information regarding net
income (loss) and income (loss) per share as if compensation cost for the
Company's stock option issuances had been determined in accordance with the fair
value based method prescribed in SFAS No. 123. The Company estimates the fair
value of each stock option at the grant date by using the Black-Scholes
option-pricing model with the following assumptions used for grants in fiscal
2003: dividend yield of zero percent, risk-free interest rates ranging from
2.87% to 3.29%, expected life of five years, and expected volatility of 129%.
For grants in fiscal 2002, the following assumptions were used: dividend yield
of zero percent, risk-free interest rates ranging from 2.94% to 4.49%, expected
lives of five years, and expected volatility of 122%.

Under the accounting provisions of SFAS No. 123, as amended by SFAS No. 148, the
Company's pro forma net loss and loss per share for the years ended December 31,
2003 and 2002 would have been as follows:
                                                       2003                2002
                                               ------------        ------------
Net Loss
 As reported                                   $ (1,459,736)       $(25,238,062)
 SFAS No. 123 effect                               (592,000)           (548,000)
                                               ------------        ------------
 Pro forma net loss                            $ (2,051,736)       $(25,786,062)
                                               ------------        ------------
Loss per share
  As reported                                  $      (0.06)       $      (1.01)
  Pro forma                                    $      (0.09)       $      (1.03)
Basic and diluted weighted
 average shares outstanding                      23,229,494          25,032,607
                                               ============        ============

The following table summarizes information about stock options outstanding at
December 31, 2003:
<TABLE>
<CAPTION>
                                  Options Outstanding                          Options Exercisable
                      --------------------------------------------         ---------------------------
                                        Weighted          Weighted                           Weighted
                                         Average           Average                            Average
   Range of              Number          Remaining        Exercise           Number          Exercise
Exercise Prices       Outstanding     Life in Years         Price          Exercisable         Price
---------------       -----------     -------------       --------         -----------       --------
<S>                     <C>                    <C>           <C>               <C>              <C>
$0.08 - $0.14           1,350,000              9.77          $0.09             628,750          $0.09
$0.39 - $0.80             865,000              8.07          $0.51             849,376          $0.50
$0.99 - $1.90             720,000              7.72          $1.46             462,813          $1.39
$2.05 - $2.60             105,000              7.85          $2.49              81,250          $2.52
</TABLE>

Segment Information
-------------------

The Company complies with SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information that requires public business enterprises to
report information regarding reportable operating segments. SFAS No. 131
superseded SFAS No. 14, Financial Reporting for Segments of a Business
Enterprise.

                                      F-12
<PAGE>

NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

During 2002 the Company had two primary business units comprised of (1) the soft
dollar brokerage unit and (2) the data services unit. Both business units are
involved in the marketing and distribution of research products to institutional
investors. In addition, the soft dollar broker unit provides for collection of
amounts owed from customers through the receipt of commission revenues related
to customer's securities trading activity. As discussed in Note B - Discontinued
Operations, the Company's PCS Securities subsidiary that was conducting business
as a soft dollar broker has been closed effective April 30, 2003 and its
activities have been accounted for as discontinued operations in the
consolidated financial statements presented herein. Accordingly, the Company is
no longer operating the soft dollar brokerage unit, and separate segment
information is not being presented.

New Accounting Pronouncements
-----------------------------

In June 2002 the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities (SFAS 146), which addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) No. 94-3, Liability Recognition for Certain
Employee termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring) (EITF 94-3). SFAS 146 requires that
a liability for a cost associated with an exit or disposal activity be
recognized and measured initially at the fair value only when the liability is
incurred. Under EITF 94-3, a liability for an exit cost was recognized at the
date of an entity's commitment to an exit plan. SFAS 146 is effective for exit
and disposal activities that are initiated after December 31, 2002, with no
effect on charges recorded for exit activities begun prior to 2003. The adoption
of this statement did not have a material effect on the Company's financial
position or results of operations.

In January 2003 the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities, an interpretation of Accounting Research Bulletin No. 51 (the
Interpretation). The Interpretation requires the consolidation of variable
interest entities in which an enterprise is the primary beneficiary. The primary
beneficiary absorbs a majority of the entity's expected losses, receives a
majority of the entity's expected residual returns, or both, as a result of
ownership, contractual or other financial interest in the entity. Currently,
entities are generally consolidated by an enterprise that has a controlling
financial interest through ownership of a majority voting interest in the
entity. In December 2003, the FASB issued a revised Interpretation that, among
other things, deferred the implementation date of the Interpretation until
periods ending after March 15, 2004 for variable interest entities, other than
those entities commonly referred to as special purpose entities. The Company
does not currently maintain any relationships with variable interest entities
and, therefore, does not expect the adoption of FIN 46 to have a material effect
on the Company's financial position or results of operations.

In May 2003 the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity" ("SFAS 150").
SFAS 150 establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). SFAS 150 does not apply to
features embedded in a financial instrument that is not a derivative in its
entirety.

                                      F-13
<PAGE>

NOTE B- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

SFAS 150 is effective for financial instruments entered into or modified after
May 31, 2003 and otherwise was effective at the beginning of the first interim
period beginning after June 15, 2003. For existing financial instruments created
before the effective date, any impact upon the adoption of SFAS 150 shall be
reported as a cumulative effect of a change in an accounting principle. The
initial adoption of SFAS 150 did not have a material impact on the Company's
financial position, results of operations or cash flows.

Reclassifications
-----------------

Certain reclassifications have been made to prior years' balances to conform to
the 2003 presentation.

NOTE C - GOING CONCERN AND LIQUIDITY

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As more fully discussed
below, the Company incurred a net loss of $1,459,736 during the year ended
December 31, 2003, and, as of that date, the Company's current liabilities
exceeded its current assets by $1,988,006. Further, as discussed in Note D -
Discontinued Operations, on January 31, 2003 the Board of Directors of the
Company decided to wind down the activities of its subsidiary, PCS Securities,
Inc. and approved an agreement to sell certain of the subsidiary assets,
including the trademark and customer list, to the former owners of the
subsidiary. The subsidiary generated over 88% of the Company's consolidated
revenues in 2002. The loss of revenue associated with the subsidiary, combined
with the Company's lack of profitability and negative working capital, among
other factors, raise substantial doubt about the Company's ability to continue
as a going concern.

In conjunction with the decision by the Board of Directors to close the PCS
business unit, the Company and its management recommitted to pursuing its
long-term objective of becoming a leading single source of independent research
to the institutional community. In association with this commitment, the Company
has increased its research sales staff, has re-directed all of the remaining
Company assets towards the production, distribution, and marketing of
independent institutional research, and has made certain operating expense
reductions to redundant and unnecessary overhead. The Company and its management
firmly believe that the independent institutional research market is a viable
area in which the Company can compete. However, no assurances can be provided
that the Company will be successful.

Whereas management believes its anticipated cash flow from operations could be
adequate to fund operations for the next fiscal year, there can be no assurance,
however, that the Company will not require additional financing prior to or
after such time. Further, there can be no assurance that any additional
financing will be available to the Company on acceptable terms, or at all. If
adequate funds are not available, the Company may be required to delay, scale
back or eliminate its operational plans. Our inability to obtain additional
financing could have a material adverse effect on the Company's business,
financial condition and results of operations.

The accompanying consolidated financial statements do not include any
adjustments that might result from the resolution of these matters.

                                      F-14
<PAGE>

NOTE D - DISCONTINUED OPERATIONS

Shut down of PCS Securities Subsidiary and Asset Transfer
---------------------------------------------------------

In January 2003, the Board of Directors of the Company decided to wind down the
activities of PCS Securities, Inc. and to close this subsidiary during the first
quarter of 2003. Based on the subsequent activities of PCS Securities, the wind
down was completed, and PCS Securities was closed effective April 30, 2003.

The decision to close the PCS Securities subsidiary was reached after the
automatic termination in December 2002 of the research services agreement
between the Company and Institutional Research Services Inc., a research
provider company owned by a shareholder and consultant to the Company. The
research services agreement terminated automatically because the Company was
unable to satisfy a condition of the agreement that required the Company to
remove the shareholder and another former owner of the subsidiary as personal
guarantors of the Company's credit facility by December 21, 2002. Also
contributing to the decision to close the PCS Securities subsidiary was the
Company's inability to finalize terms with its lender for an increase in the
Company's credit facility borrowing limits.

In 2002, approximately 50% of the PCS Securities' business was attributable to
the research services agreement and its relationship with Institutional Research
Services. The termination of the agreement resulted in a significant loss of
future revenues without a corresponding reduction in expenses. In reaching the
decision to close the PCS Securities unit, management also evaluated the losses
attributed to the unit during 2002 and determined that reaching sustained
profitability in the unit at any time in the near future was unlikely, even had
the marketing agreement not been terminated.

In connection with the decision to close the PCS Securities subsidiary, the
Company entered into an agreement with the two former owners of PCS Securities
pursuant to which the Company agreed to transfer ownership of two intangible
assets, the name "PCS" and trademarks related to such name ("Trademarks") as
well as a list of PCS customers to the former owners of PCS Securities (or their
designee) in exchange for consideration including cash, the relief of certain
liabilities and the surrender by them of an aggregate of 10.3 million shares of
the Company's common stock for cancellation. Pursuant to the agreement, each of
the former owners of PCS Securities agreed to terminate their rights under
employment and/or consulting agreements between them and the Company.
Furthermore, the former owners of PCS Securities agreed to pay to the Company an
aggregate of $250,000 over a period of two years assuming that certain
conditions are satisfied, to repay the Company's revolving line of credit with
Bear Stearns by June 30, 2003 in the event that there is an outstanding balance
as of such date and to repay or assume all obligations to customers (i.e. credit
balances) existing as of June 30, 2003.

In connection with this agreement, the Company granted a non-exclusive two year
license to use the Company's customer relationship management software to the
former owners of PCS Securities and agreed to use a new soft dollar brokerage
firm to be formed by the former owners of PCS Securities as the Company's
preferred brokerage firm for soft dollar transactions.

                                      F-15
<PAGE>

NOTE D - DISCONTINUED OPERATIONS (Continued)

Furthermore, the parties agreed that the Company would transfer the remaining
$500,000 restricted cash balance to pay down the outstanding credit facility
balance, and that all commissions generated by the PCS Securities subsidiary
subsequent to January 1, 2003 that clear through Bear Stearns, would be
automatically applied against the outstanding balance of the credit facility.

As a result of the transfer of the restricted cash balance, commissions
collected by the Company during the first and second quarters and funds paid
directly to Bear Stearns by the former owners from commissions generated by a
new soft dollar brokerage firm controlled by these individuals, all of which was
applied against the credit line balance, the outstanding credit line balance was
fully paid as of April 30, 2003. As of March 31, 2003, PCS Securities was not in
compliance with minimum net capital requirements required by the National
Association of Securities Dealers ("NASD"). In connection with the closing of
the PCS Securities subsidiary, the Company filed with the NASD to withdraw the
PCS Securities broker-dealer license, effective April 30, 2003, and, effective
April 30, 2003, all business activities related to PCS were terminated.

Results of Discontinued Operations
----------------------------------

Based on the Board of Directors' decision to shut down the PCS Securities
subsidiary in January 2003 together with the execution of the asset transfer
agreement and the full repayment of the line of credit in connection with such
agreement, the Company has accounted for the activities of the subsidiary as
discontinued operations in all periods presented.

Revenues and expenses from PCS Securities for the years ended December 31, 2003
and 2002 are summarized below:
<TABLE>
<CAPTION>
                                                                2003            2002
                                                            ------------    ------------
<S>                                                         <C>             <C>
Revenues
  Commission and other fees                                 $  1,115,462    $ 16,400,822
Expenses
  Independent research expense                                   775,817      10,775,329
  Execution and clearing costs                                   146,855       2,638,666
  Amortization of identifiable intangibles                            --       2,217,432
  Impairment loss related to intangibles and goodwill                         17,073,874
  General and administrative expense                                 420         257,819
                                                            ------------    ------------
    Total expenses                                               923,092      32,963,120
                                                            ------------    ------------

                                                                 192,370      16,562,298
    Loss on transfer of assets of discontinued operations        (18,253)             --
                                                            ------------    ------------
    Income (loss) from discontinued operations              $    174,117    $(16,562,298)
                                                            ============    ============
</TABLE>

Loss on Transfer of Assets
--------------------------

In connection with the Company's agreement to transfer the PCS trademark and
customer list intangibles to the former owners of PCS Securities, in exchange
for cash, the relief of liabilities and the surrendering of 10.3 million shares
of the Company's common stock held by these individual, the Company recorded a
loss on the transfer, in the first quarter of 2003, totaling $18,253.

                                      F-16
<PAGE>

NOTE D - DISCONTINUED OPERATIONS (Continued)

The components of the loss are summarized below:

Consideration received:
    Cash                                                         $   250,000(a)
    Credit line repayments                                         1,076,556(b)
    Accrued liabilities relieved:
       Accrued compensation payable to related parties             1,271,281(c)
       Accrued research services - net                               398,723(d)
    Surrender and cancellation of common stock                       721,000(e)
    Other                                                            391,889(f)
                                                                 -----------
 Total consideration                                               4,109,449

Carrying amount of intangibles transferred                        (4,127,702)(g)
                                                                 -----------

Net loss on transfer                                             $   (18,253)
                                                                 ===========

         (a)      Represents a $250,000 receivable from the former owners of PCS
                  Securities over 2 years pursuant to the asset transfer
                  agreement ($35,833 of which has been received and $151,667 of
                  which is classified as current assets as of September 30,
                  2003), subject to certain conditions as defined in the
                  agreement. In October 2003, the Company received an additional
                  payment of $26,667 against the outstanding receivable balance
                  due.
         (b)      Represents funds paid directly to Bear Stearns from the soft
                  dollar brokerage firm that is controlled by the former owners.
         (c)      Accrued compensation payable as of December 31, 2002 pursuant
                  to respective employment and consulting agreements with the
                  former owners of PCS Securities forgiven in connection with
                  the wind-down.
         (d)      Net customer credit balances of the PCS Securities subsidiary
                  assumed by the former owners.
         (e)      10.3 million shares of the Company's common stock surrendered
                  by the former owners of PCS Securities at fair market value.
                  The fair market value of the Company's common stock at the
                  date of the transaction was $0.07.
         (f)      Additional net assets and collections realized in connection
                  with transaction.
         (g)      Carrying amount of PCS Securities trademark and customer list
                  intangibles at date of transaction.

                                      F-17
<PAGE>

NOTE D - DISCONTINUED OPERATIONS (Continued)

Net Assets and Liabilities of Discontinued Operations
-----------------------------------------------------

At December 31, 2003 and 2002, the net assets and liabilities of the
discontinued operations were as follows:
<TABLE>
<CAPTION>
                                                             2003           2002
                                                         ------------   ------------
<S>                                                      <C>            <C>
Assets of discontinued operations-current portion
   Cash                                                  $         --   $     58,480
   Commissions and other receivables                               --        305,362
   Deferred research/service costs                                 --      1,731,202
                                                         ------------   ------------
      Total current assets                               $         --   $  2,095,044
                                                         ============   ============

Assets of discontinued operations-noncurrent portion
   Identifiable intangibles                              $         --   $  4,127,702
                                                         ============   ============

Liabilities of discontinued operations-current portion
   Accounts payable                                      $         --   $     (6,647)
   Accrued research services                                       --     (1,733,446)
                                                         ------------   ------------

                                                         $         --   $ (1,740,093)
                                                         ============   ============
</TABLE>

Identifiable intangibles shown above at December 31, 2002 represent the balance
of intangible assets acquired as part of the merger with PCS Securities in the
fourth quarter of 2001, net of impairment write downs recorded in 2002. In
connection with the asset transfer transaction with the former owners of PCS
Securities a loss on transfer was recorded totaling $18,253 during the first
quarter of 2003..

Identified intangibles consist of the following at December 31:

                                                       2003             2002
                                                -----------      -----------
   Trademark                                    $        --      $   841,736
   Customer lists                                        --        3,763,809
                                                -----------      -----------
                                                         --        4,605,545
   Less accumulated amortization                         --         (477,843)
                                                -----------      -----------
                                                $        --      $ 4,127,702
                                                ===========      ===========

As of March 31, 2003 the remaining identifiable intangible asset balance of
$4,127,702, previously capitalized in connection with PCS Securities merger,
were relieved through discontinued operations in 2003.

In December 2002, the unamortized amount of certain identifiable intangible
assets, and the entire amount of goodwill previously capitalized in connection
with the PCS Securities merger in 2001, in the aggregate amount of $17,073,874,
were evaluated for impairment and written off.

                                      F-18
<PAGE>

Guaranteed Contract
-------------------

As part of the merger with PCS Securities, Inc., a research marketing company
that is wholly owned by one of the former owners of PCS Securities, Inc.
contractually guaranteed the Company a specified volume of " soft dollar"
business for a period of 5 years. The Company recorded an intangible asset of
$8,466,000 associated with this contract, which was amortized over a 5-year
period. During 2002, the soft dollar business delivered to the PCS reporting
unit, in connection with the research and marketing agreement, approximated 50%
of the PCS subsidiary's revenues. In December 2002, as a result of the Company
non-performance of a condition of the research and marketing contract, the
contract automatically terminated. The termination of contract caused an
automatic impairment of this asset and as a result, the Company recorded an
impairment loss of $6,726,412 representing the unamortized balance at the date
of termination, which is included in income (loss) from discontinued operations

Goodwill
--------

Goodwill recorded in connection with the acquisition of PCS Securities, Inc.
totaled $9,233,007. Management evaluated goodwill for impairment at December 31,
2002 in accordance with SFAS No. 142. The PCS subsidiary was unprofitable in
2002. Further, the termination of the research and marketing contract referred
to above resulted in a significant loss in the subsidiary's future revenues
without a corresponding loss in future expenses. Consequently, the PCS
subsidiary was expected to generate losses for the foreseeable future. As
discussed in Note D, in January 2003, the Board of Directors of the Company
approved the wind-down of the PCS subsidiary and also authorized an agreement to
sell certain assets of the subsidiary (specifically, the customer list and PCS
trademark) to the former owners of PCS. The subsidiary's lack of profitability,
together with the decision to sell certain of its key assets and the Company's
decision to discontinue the subsidiary's business in 2003 resulted in impairment
to the subsidiary's goodwill. As a result, the Company recorded an impairment
loss of $9,233,007 in December 2002.

Customer List and Trademark
---------------------------

In connection with the acquisition of PCS Securities, Inc., the Company also
acquired the customer list and PCS trademark. The values of these assets were
based on independent valuation. The carrying amount of the customer list is
amortized over 10 years. Management evaluated these intangibles for impairment
at December 31, 2002. In connection with the Company's decision to sell the
customer list and trademark in January 2003 to the former owners of PCS,
management determined that the unamortized carrying amounts of these assets at
December 31, 2002 were in excess of the anticipated consideration to be
received/realized under the agreement, less costs to sell, by $1,114,455.
Consequently, the Company recorded an impairment loss totaling $1,114,455
related to the PCS customer list and trademark in the fourth quarter. The
impairment loss was allocated to these two assets based on their pro-rata
carrying amounts. After the impairment charges, the adjusted carrying amounts at
December 31, 2002, net of accumulated amortization, for the customer list and
trademark were $3,285,966 and $841,736, respectively.

                                      F-19

<PAGE>

NOTE E - PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31:

                                                       2003             2002
                                                -----------      -----------
     Computer equipment and software            $ 1,317,281      $ 1,263,498
     Furniture and fixtures                          37,797           37,797
     Office equipment                                76,248           81,590
                                                -----------      -----------
                                                  1,431,326        1,382,885
   Less accumulated depreciation                   (937,833)        (657,968)
                                                -----------      -----------
                                                $   493,493      $   724,917
                                                ===========      ===========

During the years ended December 31, 2003 and 2002, the Company capitalized
$47,832 and $193,620, respectively of payroll costs directly associated with
upgrades and enhancements that have added functionalities and new features to
its software. Depreciation expense was $279,038 and $2,519,287 during the years
ended December 31, 2003 and 2002, respectively.


NOTE F- INTANGIBLE ASSETS AND GOODWILL

Identifiable intangible assets and goodwill resulted from the merger with PCS
Securities and the PCH Securities Acquisition in the fourth quarter of 2001.

In August 2002, the Company's Board of Directors elected to close the trading
desk operations of DP Securities, Inc., a wholly owned subsidiary of the
Company. The trading desk operations were established in connection with the
acquisition of certain assets from PCH Securities. The decision to close the
trading desk represented an indicator of impairment affecting the intangible
assets and goodwill recorded during the PCH Acquisition. The carrying amounts of
intangible assets and goodwill which management believes were impaired totaled
$640,591 and $282,493, respectively and an impairment loss of $923,084 was
recorded in the second quarter of 2002.

In December 2002, the unamortized amount of certain identifiable intangible
assets, and the entire amount of goodwill previously capitalized in connection
with the PCS merger in 2001, in the aggregate amount of $17,073,873, were
evaluated for impairment and written off. See Note D - Discontinued Operations.

The combination of the impairment charges discussed above aggregated to an
impairment loss totaling $17,996,957 related to intangibles and goodwill for the
year ended December 31, 2002, which is reflected in the accompanying
consolidated statement of operations for the year ended December 31, 2002.

There was no amortization of goodwill in the year ended December 31, 2003, and
aggregate amortization expense, related to identifiable intangible assets for
the year ended December 31, 2002 was $2,252,403. The remaining balance of
unamortized intangibles was written off by March 31, 2003, with the wind-down of
the PCS subsidiary. See Note D - Discontinued Operations.

                                      F-20
<PAGE>

NOTE G- REVOLVING LINE OF CREDIT

Bear Stearns Credit Facility
----------------------------

The Company obtained a $3,000,000 revolving credit facility from Bear Stearns, a
U.S. brokerage firm (the "Lender"), in connection with the merger with PCS
Securities in December 2001.

At December 31, 2002, borrowings outstanding under this revolving credit
facility totaled $2,891,975. At that date, the credit facility was secured by
$500,000 in restricted cash of the Company and personal guarantees by the
Company's President and Chief Executive Officer and the two former owners of
PCS Securities.

In connection with the Company's decision to close its PCS Securities subsidiary
during 2003 and the agreement reached with the former owners of PCS Securities
pursuant to which the Company agreed not to draw any additional funds from the
credit facility subsequent to January 1, 2003, the parties agreed that the
Company would transfer the remaining $500,000 restricted cash deposit balance to
pay down the outstanding credit facility balance, and that all commissions
generated by PCS Securities subsequent to January 1, 2003 that clear through the
Lender will be applied against the outstanding balance of the credit facility.

As a result of the security deposit balance transfer in February 2003, and
commissions applied subsequent to January 1, 2003, the outstanding balance of
the credit facility was paid in full as of April 30, 2003, and the credit
facility and related promissory note were cancelled.

Bank of America Credit Facility
-------------------------------

On June 12, 2003, the Company entered into a promissory note agreement with Bank
of America, pursuant to which a $100,000 revolving credit line was made
available to the Company through June 10, 2006. During this period, the Company
is obligated to pay interest only, based on the outstanding principal balance,
on a monthly basis. The interest rate on the note is variable and is calculated
based on the published Wall Street Journal prime rate listing plus 4.5%. As of
December 31, 2003 the interest rate on the note was 8.75%.

Following this initial period, the outstanding principal balance, together with
interest based on the applicable interest rate, shall be repaid monthly, on a
fully amortized basis, over the remaining term of the note that runs through
June 12, 2010.

As of December 31, 2003 the outstanding principal balance under the credit line
was $100,000.

The credit line is guaranteed by the United States Small Business
Administration, as well as by the Company's President and CEO.

NOTE H- NOTES PAYABLE

On November 22, 2001, the Company borrowed $300,000 under a promissory note
payable to an investor. The note is unsecured, bears interest at 15%, and had an
original maturity date in April 2002 which has subsequently been extended to
July 1, 2004. In connection with the promissory note, the Company issued 150,000

                                      F-21
<PAGE>

NOTE H- NOTES PAYABLE (Continued)

detachable warrants to the note holder exercisable for 150,000 shares of the
Company's common stock at a price of $2.30 per share. The warrants are
exercisable at the option of the holder and expire in five years.

Proceeds from the issuance of this promissory note have been allocated to the
warrants based on their fair value of $281,200. During the years ended December
31, 2003 and 2002 the Company recorded interest expense associated with this
note of $45,000 and $45,625 ($42,875 of which was paid in November 2002),
respectively. In addition, the Company recorded $210,600 of interest expense
associated with the amortization of debt discounts arising from the allocation
of proceeds in 2002.

The Company entered into a Securities Purchase Agreement, dated as of March 6,
2002 (the "Securities Purchase Agreement") with an institutional investor (the
"Purchaser"), pursuant to which the Company borrowed $500,000 for which the
Company issued to the Purchaser a promissory note in the aggregate principal
amount of $500,000 originally due in April 2002 (the "Bridge Note") and 100,000
shares of the Company's common stock. In May 2002, the Company received an
extension of the Bridge Note in conjunction with a partial repayment of
$200,000, and in July and August 2002, the Company made additional repayments of
$150,000 each, plus accrued interest in the amount of $10,050, in full payment
of its outstanding obligations under the Bridge Note.

The Bridge Note was recorded net of discounts totaling $245,000 comprised of
$220,000 for the fair value of the shares issued and $25,000 original issue
discount. During the year ended December 31, 2002, debt discounts related to the
Bridge Note were fully amortized resulting in the recognition during the year of
$245,000 in interest expense.

NOTE I -CONVERTIBLE DEBT

On December 17, 2001, the Company issued convertible debentures in the aggregate
principal amount of $1,600,000. These debentures had a maturity date of December
17, 2003, and bore interest at a rate of 10% per annum, which was due and
payable on the last day of each calendar quarter until they were paid in full or
converted into shares of the Company's common stock

At issuance, proceeds from the debentures were allocated to the warrants based
on the fair value of the warrants using a Black Scholes valuation model totaling
$259,182. In addition, a discount of $541,536 was applied to account for the
beneficial conversion feature at the closing date of December 17, 2001.

In November 2002, the Company made a partial prepayment of principal in the
amount of $215,686.

At December 31, 2002, debentures with an aggregate principal balance of
$1,384,314, were carried net of unamortized discounts of $417,189 related to the
intrinsic value of the beneficial conversion feature, which is inclusive of the
effect of conversion price resets, and the warrants.

In February 2003, the Company and the debenture holders restructured certain
terms and provisions of the convertible debentures. In connection with the debt
restructuring, the Company was relieved of $137,844 in liquidated damages
previously accrued. The restructuring of the convertible debt has been accounted
for as a troubled debt restructuring and, accordingly, no gain was recognized.

                                      F-22
<PAGE>

NOTE I -CONVERTIBLE DEBT (Continued)

At December 31, 2003, the restructured convertible debt principal totaled
$1,468,991 of which $564,747 is classified as the current portion. Following is
a summary of primary terms of the restructured agreements:

$1,250,000 Original Principal Amount Note
-----------------------------------------

The original debenture was amended pursuant to which the principal balance was
changed to $1,425,000. The amended principal balance includes the original
principal amount plus accrued and unpaid liquidated damages and interest of
$150,000 and $25,000, respectively. The remaining balance of accrued interest at
February 28, 2003, totaling $26,736, was paid by the Company and $125,000 of
accrued liquidated damages were waived by the debenture holder.

The debenture matures on December 28, 2005 and bears interest at an annual rate
of 14%. The debenture requires fixed monthly payments of principal and interest
beginning on March 28, 2003 of $25,000 for the first five (5) months, $50,000
thereafter through November 28, 2005 and a final payment due December 28, 2005
in the amount of $271,100. The outstanding principal balance may be converted
into shares of the Company's common stock at the option of the holder based on a
fixed conversion price of $0.20, and the warrant to purchase 160,000 shares of
the Company's common stock that were included in the original debenture have a
fixed exercise price of $0.086 for the term of the warrants. In addition, the
debenture holder agreed to waive all registration requirements with respect to
the convertible debenture, warrants and shares underlying the warrants.

In October 2003, the debenture holder agreed to defer scheduled principal
payments originally due on October 28, 2003, November 28, 2003 and December 28,
2003, and to add the deferred principal payments to the amount due with the
final payment on December 28, 2005.

$350,000 Original Principal Amount Note
---------------------------------------

The original debenture was amended pursuant to which the principal balance was
changed to $155,000. The amended principal balance includes the original
principal amount, less the partial principal payment in November 2002, of
$215,686 plus accrued and unpaid liquidated damages and interest of $16,656 and
$4,030, respectively. The debenture holder waived accrued liquidated damages in
the amount of $12,844. The debenture matures on February 28, 2005 and bears
interest at an annual rate of 14%. Payment of interest is required quarterly,
beginning March 30, 2003 and the principal balance is payable upon the maturity
date.

The outstanding principal balance may be converted into shares of the Company's
common stock at the option of the holder based on a fixed conversion price of
$0.20, and the warrant to purchase 35,000 shares of the Company's common stock
that were included in the original debenture have a fixed exercise price of
$0.086 for the term of the warrants. In addition, the debenture holder agreed to
waive all registration requirements with respect to the convertible debenture,
warrants and shares underlying the warrants.

The Company recorded interest expense totaling $1,341,078 related to the
debentures in 2002, including $158,267 pursuant to the terms of the debentures
and $1,182,311 related to amortization of discounts. Through December 31, 2002,
an aggregate of $125,847 of interest due was paid. In 2003 the company recorded
interest expense related to the debentures totaling $546,345 including 176,846

                                      F-23
<PAGE>

NOTE I -CONVERTIBLE DEBT (Continued)

related to the restructured note agreement and $369,499 related to the original
notes and amortization of discounts. At December 31, 2003 interest of $50,197
was payable in connection with the restructured note agreement.

NOTE J - DEFERRED REVENUE

Research products are generally sold by the Company on a subscription basis for
periods ranging from three (3) to twelve (12) months. Revenue on such
subscriptions is recognized on a pro-rata basis over the applicable subscription
period. Deferred revenue at December 31, 2003 totaled $752,797 and represents
revenues from research product subscriptions that will be recognized in future
periods.

NOTE K - STOCKHOLDERS' EQUITY (DEFICIT)

Authorized and Outstanding Common Stock
---------------------------------------

The Company is authorized to issue 80,000,000 shares of common stock, par value
$0.0001 per share. As of December 31, 2003, there were 34,557,052 shares of
common stock issued and 22,790,336 shares of common stock outstanding.

Common Stock Reserved for Issuance
----------------------------------

At December 31, 2003 the Company has reserved 11,723,861 shares of its common
stock for issuance in connection with shares issuable under the Company's 2001
stock option plan, convertible debentures and warrant commitments.

Preferred Stock
---------------

In March 1999 the Company authorized the issuance of 10,000,000 shares of
preferred stock par value $.0001. At December 31, 2003 and 2002, no preferred
shares are outstanding.

Common Stock
------------

In February 2003, 10,300,000 shares of the Company's common stock were cancelled
in connection with an agreement between the Company and the two former owners of
PCS Securities at fair market value, $0.07, and totaling $721,000.

In April 2003, an aggregate of 5,688,750 shares of common stock were issued in
connection with the exercise of 5,765,626 performance warrants by officers of
the Company.

In April 2003, an aggregate of 293,750 shares of common stock were cancelled as
a result of a legal settlement. In September 2003, an aggregate of 755,000
shares of the common stock were cancelled in connection with default judgments
obtained by the Company against four defendants in the case.

In September 2003 150,000 shares were issued in connection with the exercise of
150,000 performance warrants.

                                      F-24
<PAGE>

NOTE K - STOCKHOLDERS' EQUITY (DEFICIT) (Continued)

In January 2002, the Company issued 94,731 shares of common stock to an officer
of the Company as a payment of bonus earned in 2001 totaling $169,000. The
number of shares issued for such services was determined based on the fair value
of the stock at date of issuance.

In March 2002, the Company issued 100,000 shares of common stock to an
institutional investor as part of a Securities Purchase Agreement and promissory
note.

In connection with the issuance of these shares, the Company recorded debt
discount totaling $220,000 based on the fair market value of the stock at date
of issuance.

In April 2002, the Company issued 12,500 shares of common stock for legal
services performed. In connection with the issuance of these shares, the Company
recorded legal expense in the amount of $21,875 based on the fair market value
of the stock at date of issuance.

Treasury Stock
--------------

In October 2002, the Company repurchased 417,866 shares of its common stock, at
an aggregate cost of $58,501 that were originally issued during 2001 in
connection with the PCH acquisition.

NOTE L - WARRANTS AND PERFORMANCE WARRANTS

Common Stock Warrants
---------------------

During 2001 the Company issued a total of 424,843 of common stock warrants in
connection with private equity and convertible debt placements. The warrants are
exercisable for a period of five (5) years from the date of grant at exercise
prices ranging from $0.80 to $2.30 per share. In February 2003, the exercise
price related to 160,000 of these warrants with an original exercise price of
$1.94 was reduced to $0.086. (See Note I - Convertible Debt).

The following tables summarize the number of outstanding common stock warrants
in 2003 and 2002:
                                                                    Weighted
                                                                    Average
                                                                    Exercise
                                                        Number       Price
                                                      ----------   ----------

   Outstanding at December 31, 2001                      663,906         1.41
      Granted                                                 --           --
         Forfeited                                            --           --
         Exercised                                            --           --
                                                      ----------   ----------
   Outstanding at December 31, 2002                      663,906   $     1.41

      Granted                                                 --           --
         Forfeited                                            --           --
         Exercised                                            --           --
                                                      ----------   ----------
   Outstanding at December 31, 2003                      663,906   $     0.97
                                                      ==========   ==========

                                      F-25
<PAGE>

NOTE L - WARRANTS AND PERFORMANCE WARRANTS (Continued)

Performance Warrants
--------------------

Performance warrants were issued to all Company shareholders concurrent with and
in connection with the reverse merger in 2001. Performance warrants are
exercisable for shares of common stock, on a one-for-one basis, upon the
satisfaction of certain performance targets (the "Share Exchange"). The
performance warrants are exercisable until May 31, 2011 at an exercise price of
$.0001 per share and vest based upon the satisfaction by the Company of certain
performance targets. The first fifty percent (50%) of the shares issuable upon
the exercise of the performance warrants (the "Warrant Shares") shall vest upon
(i) the Company (or any subsidiary thereof) reporting cumulative total revenues
commencing with the quarter ending June 30, 2001 (the "Initial Quarter") and
thereafter during the Exercise Period ("Cumulative Total Revenues") of not less
than $10 million, or (ii) the Company (or any subsidiary thereof) reporting
cumulative EBITDA (earnings before the payment of interest and taxes and before
any deduction for depreciation and amortization) commencing with the Initial
Quarter and thereafter during the Exercise Period ("Cumulative EBITDA") of not
less than $1 million; or (iii) the Company (or any subsidiary thereof) reporting
cumulative Gross Placements (as hereinafter defined) commencing with the Initial
Quarter and thereafter during the Exercise Period ("Gross Placements") of not
less than $50 million. The remaining Warrant Shares shall vest upon (i) PPI (or
any subsidiary thereof) reporting Cumulative Total Revenues commencing with the
Initial Quarter and thereafter during the Exercise Period of not less than $20
million, or (ii) PPI (or any subsidiary thereof) reporting Cumulative EBITDA
commencing with the Initial Quarter and thereafter during the Exercise Period of
not less than $2 million; or (iii) the Company (or any subsidiary thereof)
reporting Cumulative Gross Placements commencing with the Initial Quarter and
thereafter during the Exercise Period of not less than $100 million
(collectively, the "Remaining Warrant Share Targets"). Satisfaction of 25% of
either of the Remaining Warrant Share Targets accelerates the vesting with
respect to 25% of the remaining Warrant Shares. "Gross Placements" means the
gross proceeds received by third party issuers resulting from the sale or
placement of its securities by the Company and/or its subsidiaries to investors
without reduction, offset, or decrease for any costs or expenses incurred by
such issuer and its subsidiaries in connection therewith. As of December 31,
2003 all remaining performance warrants outstanding are fully vested and
exercisable.

During 2003, a total of 5,915,626 performance warrants were exercised, of which
5,765,626 were exercised by two officers of the Company and an entity owned by
one of these officers, and a total of 5,925,000 performance warrants were
forfeited and cancelled by twelve (12) individuals or entities in connection
with litigation settlements and judgments.

                                      F-26

<PAGE>

NOTE L - WARRANTS AND PERFORMANCE WARRANTS (Continued)

The following tables summarize the number of outstanding performance warrants in
2003 and 2002:

                                                                    Weighted
                                                                    Average
                                                                    Exercise
                                                      Number         Price
                                                   -----------    -----------
   Outstanding at December 31, 2001                 18,281,250          0.001
                                                   -----------    -----------
      Granted                                               --             --
         Forfeited                                          --             --
         Exercised                                  (5,765,624)         0.001
                                                   -----------    -----------
   Outstanding at December 31, 2002                 12,515,626          0.001
                                                   -----------    -----------
      Granted                                               --             --
         Forfeited                                  (5,925,000)         0.001
         Exercised                                  (5,915,626)         0.001
                                                   -----------    -----------
   Outstanding at December 31, 2003                    675,000    $     0.001
                                                   ===========    ===========

The following table summarizes additional information about the Company's
outstanding common stock warrants and performance warrants at December 31, 2003:

                                                  Number
      Exercise                                 Remaining              Number
        Prices           Outstanding      Life in Months         Exercisable
   -----------      ----------------      --------------      --------------
         $0.001              675,000                  89             675,000
         $0.086              160,000                  35             160,000
         $0.80               114,843                  30             114,843
         $0.80               239,063                  15             239,063

         $2.30               150,000                  34             150,000

NOTE M- INCOME TAXES

Under SFAS No. 109, Accounting for Income Taxes, the liability method is used in
accounting for income taxes. Under this method, deferred income tax assets and
liabilities result from temporary differences between the income tax basis of
assets and liabilities and their reported amounts in the financial statements
that will result in taxable income and deductions in future years.

In assessing the realization of deferred tax assets, management considers
whether it is more likely than not that such benefit will be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income. For the year ended December 31, 2003, management
increased the deferred tax asset valuation allowance by $315,470 due to taxable
losses incurred for the year ended December 31, 2003.

                                      F-27
<PAGE>

NOTE M- INCOME TAXES  (Continued)

At December 31, 2003, the Company had net operating loss carry-forwards of
approximately $8.0 million and $5.5 million for federal income tax and state tax
purposes, respectively. The federal net operating loss carryforwards expire 2019
through 2023 and the state net operating loss carryforwards expire 2007 through
2013. Internal Revenue Code Section 382 and similar state rules place a
limitation on the amount of taxable income that can be offset by carryforwards
after a change in control (generally greater than 50% change in ownership). The
utilization with regard to timing and amount of the Company's net operating loss
carryforwards may be limited due to changes in the Company's ownership pursuant
to Section 382 of the Internal Revenue Code.

Significant components of the Company's deferred tax assets at December 31, 2003
and 2002 are as follows:

                                                     2003               2002
                                              -----------        -----------
   Deferred tax assets
      Net operating losses                    $ 3,224,536        $ 2,557,563
      Other                                       460,269            933,756
                                              -----------        -----------
                                                3,684,805          3,491,319
   Deferred tax liabilities
      State taxes                                (190,703)          (171,423)
      Section 481 adjustment                     (171,057)          (342,114)
      Depreciation                               (150,049)          (120,256)
                                              -----------        -----------
                                                 (511,809)          (633,793)
                                              -----------        -----------
   Net deferred tax assets                      3,172,996          2,857,526
   Valuation allowance                         (3,172,996)        (2,857,526)
                                              -----------        -----------
   Total                                      $        --        $        --
                                              ===========        ===========

The reconciliation of income taxes computed at the U.S. Federal statutory rate
to income tax expense is as follows:

                                                               2003       2002
                                                             ------     ------
Federal income tax at statutory rate                           34.0%      34.0%

State taxes, net of federal income tax benefit                  5.8        5.8
Intangible assets and goodwill                                 (0.2)     (33.6)
Changes in valuation allowance                                (27.6)      (6.0)
Other                                                         (12.0)      (0.2)
                                                             ------     ------
Total                                                           0.0%       0.0%
                                                             ======     ======

                                      F-28
<PAGE>

NOTE N- LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per
share:

                                                        2003            2002
                                                ------------    ------------
   Numerator
      Net Loss                                  $ (1,459,736)   $(25,238,062)
   Denominator
      Denominator for basic and diluted
      loss per share-weighted average shares      23,229,494      25,032,607

   Basic and Diluted loss per share             $      (0.06)   $      (1.01)

Shares issuable upon conversion of debt, stock options, warrants and performance
warrants disclosed in notes B, I, and L-K have not been included in the above
calculation since their inclusion in 2003 and 2002 would be anti-dilutive.

NOTE O - RELATED PARTY TRANSACTIONS

Loans and Advances
------------------

In January 2002, the Company borrowed $42,500 from a company controlled by an
officer/stockholder. In connection therewith, the Company issued an unsecured
promissory note to the lender, which was due and payable on January 31, 2003 and
bears interest at 12 % per annum. In May 2001 and October 2001, the Company
borrowed an aggregate of $145,000 from the same company. These notes are
unsecured, bear interest at 12% and were due on May 14, 2003 and October 31,
2003, respectively. In December 2003, the due dates for all three loans were
extended to July 1, 2004. At December 31, 2002 and 2003, the aggregate
outstanding balance of these notes was $187,500. During the twelve months ended
December 31, 2002 the Company recorded interest expense in connection with these
notes totaling $22,067, and paid $24,009, including interest accrued in prior
year. During the twelve months ended December 31, 2003 the Company recorded
interest expense related to these notes of $22,500, and made no payments.

Consulting Services
-------------------

In April 2001, the Company entered into advisory agreement with Kleega Corp., a
company owned by stockholder. Pursuant to the advisory agreement, Kleega Corp.
agreed to serve as management consultant and deal finder and technology
consultant to the Company from May 1, 2001 to April 30, 2002. During 2002, the
agreement was extended to December 31, 2003 and will automatically continue to
renew for further 1-year terms unless otherwise cancelled. As compensation for
Kleega Corp.'s services, the Company shall pay Kleega Corp. (i) an initial
retainer of $25,000; (ii) a monthly retainer of $15,000 during the term of the
agreement.

For the years ended December 31, 2002 and 2003, the Company paid Kleega Corp.
consulting fees of $184,565 and $183,394, respectively.

                                      F-29
<PAGE>

NOTE O - RELATED PARTY TRANSACTIONS (Continued)

PCS Securities, Inc.
--------------------

In connection with the acquisition of PCS Securities, Inc., the Company agreed
to pay the former owners of PCS Securities, Inc. as part of the purchase price a
cash adjustment equal to the Net Tangible Book Value (as defined) of PCS at
December 31, 2001. The total estimated additional purchase price of $700,000 was
accrued, and included on the balance sheet at December 31, 2001 as Purchase
Price Consideration Due to Related Parties. In July 2002, the additional
purchase price consideration was agreed upon between the Company and the former
owners of PCS and $565,926 was paid by the Company to fully settle this
obligation. Accordingly, the difference between the estimated liability and
final settlement amount of $134,074 was applied to reduce goodwill in the second
quarter of 2002.

Subsequent to the acquisition of PCS Securities Inc. on December 21, 2001, the
Company had the following transactions with a director/stockholder and former
owner of PCS:

An entity owned by the director/stockholder provided research products to a
subsidiary of the Company under a guaranteed contract. The research products
were marketed to institutional investor customers under "soft dollar"
arrangements at cost plus margins. Pursuant to the contract, the entity owned by
the director/stockholder was required to provide the Company's subsidiary with a
guaranteed volume of its research per year. The contract was terminated in
December 2002. For the year ended December 31, 2002, $2,828,506 was paid to this
entity for research products purchased.

The director/stockholder was a guarantor of the Company's line of credit with
Bears Stearns, along with other officers/stockholders of the Company, through
April 30, 2003 when the credit line was paid in full and terminated.

The director/stockholder provided services under a consulting agreement to
increase the Company's customer base. The consulting agreement was for a
five-year term (beginning January 1, 2002), was subject to renewal annually, and
required the payment of a monthly base fee of approximately $95,833 ($1,150,000
annually). In addition, the consulting agreement provided for incentive fees
payable to the director/stockholder when certain specified revenue and targets
were met. For the year ended December 31, 2002, the Company recorded an
aggregate of $1,650,000 in consulting and incentive fees under this agreement,
of which $1,054,167 was paid during the year, and $595,833 was owed at year end.
The consulting agreement was terminated in January 2003. In connection with the
termination of this agreement, it was agreed that the Company would no longer be
obligated for amount owed as of December 31, 2003, and the elimination of this
obligation was included in the calculation of net loss on transfer of assets
recorded in connection with the closing of PCS Securities (see Note D -
Discontinued Operation).

Rent expense of $25,244 was paid during the year ended December 31, 2002 on a
property co-owned between the director/stockholder and another stockholder and
former owner of PCS.

                                      F-30

<PAGE>

NOTE P  - COMMITMENTS AND CONTINGENCIES

Litigation
----------

The Company's commitment and contingencies include claims and litigation in the
normal course of business. In the opinion of management, based in part on
outside counsel, there are no matters pending or threatened that are expected to
have a material adverse effect on the Company's results of operations and
financial position.

Operating Leases
----------------

The Company leases approximately 4,400 square feet of office space in San Diego,
California under a lease, which expires December 31, 2007. The Company also
leases certain office equipment under operating leases. The approximate future
minimum annual rental payments under operating leases are as follows:

                        2004                       $    135,455
                        2005                            139,351
                        2006                            141,890
                        2007                            146,125
                                                   ------------
                       Total                       $    562,821
                                                   ============

Total rental expense for the years ended December 31, 2003 and 2002 was
approximately $136,600 and $199,698, respectively.

NOTE Q- NONCASH INVESTING AND FINANCING ACTIVITY

Supplemental disclosure of non-cash investing and financing activity is
presented below:

In February 2003, 10,300,000 shares of the Company's common stock were cancelled
in connection with an agreement between the Company and the two former owners of
PCS Securities.

In April 2003, an aggregate of 5,688,750 shares of common stock were issued in
connection with the exercise of 5,765,626 performance warrants.

In April 2003, 293,750 shares of the Company's common stock were cancelled in
connection with a litigation settlement agreement.

In January 2002, the Company issued 94,731 shares of common stock at market
value to an officer of the Company as payment of bonus earned and accrued in
2001 totaling $169,000.

In July 2002, purchase price consideration payable recorded in December 2001 in
connection with the acquisition of PCS Securities was reduced by $134,074, with
a corresponding decrease to goodwill, based on an agreement reached between the
Company and the former owners of PCS Securities.

In August 2002, an aggregate of 5,752,215 shares of common stock were issued in
connection with the exercise of 5,765,634 performance warrants.

                                      F-31
<PAGE>

NOTE R - SELECTED QUARTERLY DATA

Summarized quarterly information for the Company for December 31, 2003 and 2002
follows:
<TABLE>
<CAPTION>
                   2003                        Quarter         Quarter         Quarter         Quarter
                   ----                         Ended           Ended           Ended           Ended
                                                31-Mar          30-Jun          30-Sep          31-Dec          Total
                                             ------------    ------------    ------------    ------------    ------------
<S>                                          <C>             <C>             <C>             <C>             <C>
Continuing Operations:
Revenues                                     $    376,457    $    541,003    $    586,939    $    622,952    $  2,127,351
Expenses                                          869,559         755,512         728,615         763,843       3,117,529
                                             ------------    ------------    ------------    ------------    ------------

Operating Loss                                   (493,102)       (214,509)       (141,676)       (140,891)       (990,178)

Other income (expense), primarily interest       (468,247)        (51,691)        (65,081)        (58,657)       (643,675)
                                             ------------    ------------    ------------    ------------    ------------

Net Loss Continuing Operations                   (961,349)       (266,200)       (206,757)       (199,548)     (1,633,853)

Income from Discontinued Operations               174,117              --              --              --         174,117
                                             ------------    ------------    ------------    ------------    ------------

Net Loss                                     $   (787,232)   $   (266,200)   $   (206,757)   $   (199,548)   $ (1,459,736)
                                             ============    ============    ============    ============    ============

Loss per share                               $      (0.03)   $      (0.01)   $      (0.01)   $      (0.01)   $      (0.06)

Weighted Average # of shares                   24,523,769      22,471,329      23,152,438      22,709,336      23,229,494


                   2002                        Quarter         Quarter         Quarter         Quarter
                   ----                         Ended           Ended           Ended           Ended
                                                31-Mar          30-Jun          30-Sep          31-Dec          Total
                                             ------------    ------------    ------------    ------------    ------------

Continuing Operations:
Revenues                                     $    291,550    $  1,128,058    $    310,397    $    394,229    $  2,124,234
Expenses                                        1,541,870       3,241,604       1,914,356       1,720,387       8,418,217
                                             ------------    ------------    ------------    ------------    ------------

Operating Loss                                 (1,250,320)     (2,113,546)     (1,603,959)     (1,326,158)     (6,293,983)

Other income (expense), primarily interest       (547,704)       (429,125)       (582,207)       (822,745)     (2,381,781)
                                             ------------    ------------    ------------    ------------    ------------

Net Loss Continuing Operations                 (1,798,024)     (2,542,671)     (2,186,166)     (2,148,903)     (8,675,764)

Income from Discontinued Operations               (57,062)         (4,310)        237,890     (16,738,816)    (16,562,298)
                                             ------------    ------------    ------------    ------------    ------------

Net Loss                                     $ (1,855,086)   $ (2,546,981)   $ (1,948,276)   $(18,887,719)   $(25,238,062)
                                             ============    ============    ============    ============    ============

Loss per share                               $      (0.08)   $      (0.11)   $      (0.08)   $      (0.67)   $      (1.01)

Weighted Average # of shares                   22,861,483      22,965,948      25,842,194      28,391,276      25,032,607
</TABLE>

                                      F-32
<PAGE>

NOTE S - ACQUISITIONS

PCH Acquisition
---------------

On October 26, 2001, the Company acquired certain assets of PCH Securities, Inc.
("PCH"), an institutional trading firm offering agency execution services.
Pursuant to the Asset Purchase Agreement, the Company purchased substantially
all of the assets of PCH to conduct its financial services business, including
among other things, the equipment and customer list of PCH. The total purchase
price was $1,000,000 consisting of an aggregate of 417,866 of shares of the
Company's common stock with a fair market value of $2.39 per share (the quoted
price of the stock on the date of acquisition). The acquisition was accounted
for by the purchase method of accounting. The total value of the purchase
consideration was allocated among assets acquired, including identifiable
intangible assets, based upon estimated fair values. The excess of the value of
the consideration over the net assets acquired was allocated to goodwill.

As discussed in Note F- Identifiable Intangibles and Goodwill, based on the
closing in August 2002 of the Company's trading desk operations that were
established in based on the acquisition of assets from PCH Securities, all
intangible assets and goodwill recorded in connection with the PCH asset
acquisition were written off in 2002.

PCS Securities, Inc.
--------------------

On December 21, 2001, the Company acquired all of the outstanding shares of PCS
Securities, Inc., a leading provider of independent financial research products
to the institutional investment community. The total purchase price
consideration approximated $23,275,000 consisting of an aggregate of 10,500,000
shares of the Company's common stock, with a fair market value of $2.15 per
share (the quoted market price at the date of acquisition) and additional cash
consideration based on the Net Tangible Book Value of PCS Securities, Inc., at
December 31, 2001 as defined. The Company accrued $700,000 as an estimate for
the additional purchase price consideration based on information provided by the
former owners of PCS Securities, Inc., $500,000 of which became due and payable
on March 29, 2002. The Company obtained an extension of this due date and in
July 2002, the final additional purchase price consideration was agreed upon
between the Company and the former owners of PCS and $565,926 was paid by the
Company to fully settle this obligation. Accordingly, the difference between the
estimated liability accrued at December 31, 2001 and the final settlement amount
of $134,074 was applied to reduce goodwill in the second quarter of 2002.

The acquisition was accounted for by the purchase method of accounting. The
total value of the purchase consideration was allocated among PCS Securities
Inc.'s assets and liabilities acquired, including identifiable intangible
assets, based upon estimated fair values based on independent valuation. The
excess of the value of the consideration over the net assets acquired was
allocated to goodwill.

As discussed in Note D - Discontinued Operations and Note F- Identifiable
Intangibles and Goodwill, the Company closed its PCS Securities Subsidiary
effective April 30, 2003. As a result of the closing of PCS Securities, all
intangible assets and goodwill recorded in connection with the PCS Securities
acquisition were written off in 2002 and 2003, and the Company has accounted for
the activities of the subsidiary as discontinued operations in all periods
presented.

                                      F-33
<PAGE>

NOTE T - JOINT VENTURE

During 2002, the Company entered into a Joint Venture agreement with Btech
Investor, Inc. ("Btech"). Pursuant to this agreement, both the Company and Btech
Investor formed DPBT, LLC through which it jointly developed a web-based
independent healthcare research service, BiotechTracker. This product was
introduced in October 2002 and through December 2003 was marketed exclusively by
the Company.

Effective October 20, 2003, the Company and BTech entered into an agreement
pursuant to which the joint venture was terminated. In accordance with the terms
of the agreement, BiotechTracker, may be marketed by the Company through
December 31, 2003, and all subscriptions in effect as of that date will be
continued through the earlier of the end of the subscription term, or July 31,
2004. Subsequent to the termination of the joint venture, the Company used the
intellectual property it had contributed to the joint venture to launch
BioMedTracker in January 2004 as a replacement for BiotechTracker.

NOTE U - SUBSEQUENT EVENTS

In January 2004, the Company began doing business under the name Sagient
Research Systems, and plans to formally adopt this new name following its annual
shareholder meeting, which will be held during the second quarter of 2004, where
the name change will be submitted for shareholder approval.

In March 2004, the Company's subsidiary, DP Securities, entered into a
correspondent relationship with a broker-deal with an institutional trading
desk, that will enable the Company's clients to begin trading for the benefit of
DP Securities. In addition, in March 2004, DP Securities began doing business as
Sagient Securities.

                                      F-34
<PAGE>

                                    SIGNATURE

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to the
Annual Report on Form 10-KSB to be signed on its behalf by the undersigned,
thereunto duly authorized.

Dated:  San Diego, California
        March 30, 2004

                                       PCS Research Technology, Inc.


                                       By: /s/ BRIAN M. OVERSTREET
                                           -------------------------------------
                                           Name:  Brian M. Overstreet
                                           Title: President & CEO

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

Signature                                    Title                          Date
---------                                    -----                          ----

/s/ BRIAN M. OVERSTREET                 President, CEO            March 30, 2004
------------------------------           and Director
Brian M. Overstreet


/s/ ROBERT F. KYLE                 Vice President Secretary       March 30, 2004
------------------------------   General Counsel and Director
Robert F. Kyle


/s/ WILLIAM J. JACKSON                     Director               March 30, 2004
------------------------------
William J. Jackson