UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                   FORM 10-QSB

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

                  For the Quarterly Period Ended March 31, 2005

                                       OR

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

       For the transition Period from ________________ to ________________

                        Commission file number 000-24057

                        Rush Financial Technologies, Inc.
                        ---------------------------------
             (Exact name of registrant as specified in its charter)

             Texas                                     75-2375969
             -----                                     ----------
    (State of Incorporation)              (I. R. S. Employer Identification No.)

                 13355 Noel Road, Suite 300, Dallas, Texas 75240
                ------------------------------------------------
                                  972-450-6000
                ------------------------------------------------
                (Issuer's telephone number, including area code)

       Check  whether the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

                                 Yes XXX No ____

       State the number of shares outstanding of each of the issuer's classes of
common equity as of April 30, 2005: 28,155,783 shares of common stock, $0.01 par
value.

       Transitional Small Business Disclosure Format;

                                 Yes ____ No XXX

<PAGE>


PART I.         FINANCIAL INFORMATION
Item 1.         Financial Statements


















                                       2
<PAGE>
<TABLE>
<CAPTION>

                  RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

                             CONSOLIDATED BALANCE SHEETS

                                                                                   (Unaudited)
                                                                                     March 31,     December 31,
                                        ASSETS                                         2005            2004
                                                                                   ------------    ------------
<S>                                                                                <C>             <C>
Current assets
      Cash and cash equivalents                                                    $    298,571    $    343,510
      Accounts receivable                                                                40,627          54,235
      Prepaid expenses and other current assets                                          94,208          76,332
                                                                                   ------------    ------------
         Total current assets                                                           433,406         474,077
                                                                                   ------------    ------------
Capitalized software development costs, net of
      accumulated amortization                                                          731,837         817,631
Property and equipment, net of accumulated depreciation                                  91,842          80,127
Intangibles, net                                                                        160,833         205,863
Deferred financing fees, net                                                              2,310           5,774
Goodwill                                                                                395,247         200,247
Other assets                                                                             17,267          31,786
                                                                                   ------------    ------------
         Total assets                                                              $  1,832,742    $  1,815,505
                                                                                   ============    ============

                        LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
      Accounts payable                                                             $    588,215    $    631,684
      Accrued preferred stock dividends                                                 166,111         150,464
      Accrued payroll tax obligation                                                    580,835         442,697
      Accrued expenses and other liabilities (including $95,050 and $85,194 of
         accrued interest expense due to related parties at March 31, 2005 and
         December 31, 2004, respectively)                                               843,633         859,916
      Liabilities acquired in 2001 acquisition                                          332,098         332,098
      Convertible notes payable (including $318,333 due to related parties
         at March 31, 2005 and December 31, 2004),  net of unamortized debt
         discount of $1,139 and $2,725 March 31, 2005 and December 31,
         2004, respectively                                                             483,861         482,725
                                                                                   ------------    ------------
         Total current liabilities                                                    2,994,753       2,899,584
                                                                                   ------------    ------------

Convertible bonds payable, net of unamortized debt discount of $15,275
      and $20,915 at  March 31, 2005 and December 31, 2004, respectively                329,725         464,085
                                                                                   ------------    ------------
         Total liabilities                                                            3,324,478       3,363,669
                                                                                   ------------    ------------

Commitment and contingencies

Shareholders' deficit
      Preferred stock - cumulative; $10 par value; 38,792 shares authorized;
         14,063 shares  issued and  outstanding;  liquidation  preference of $10
         per share                                                                      140,630         140,630
      Preferred stock - convertible cumulative; $10 par value; 800,000 shares
         authorized; 51,980 shares issued and outstanding; liquidation
         preference of $10 per sahre                                                    519,800         519,800
      Common stock - $0.01 par value; 50,000,000 shares authorized;
         28,155,783 and 24,715,790 shares issued and outstanding at March
         31, 2005 and December 31, 2004, respectively                                   281,557         247,157
      Additional paid in capital                                                     16,603,555      15,895,945
      Accumulated deficit                                                           (19,037,278)    (18,351,696)
                                                                                   ------------    ------------
         Total shareholders' deficit                                                 (1,491,736)     (1,548,164)
                                                                                   ------------    ------------
         Total liabilities and shareholders' deficit                               $  1,832,742    $  1,815,505
                                                                                   ============    ============
</TABLE>

                See accompanying notes to consolidated financial statements

                                       3
<PAGE>
<TABLE>
<CAPTION>

               RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months ended March 31, 2005 and 2004
                                   (unaudited)

                                                                       2005            2004
                                                                   ------------    ------------
<S>                                                                <C>             <C>
Revenue:
         Investment services                                       $    483,021    $    518,854
         Software services                                                2,595          44,790
         Corporate                                                        6,409          10,137
                                                                   ------------    ------------
                      Total revenue                                     492,025         573,781

Expenses:
         Investment services                                            442,803         397,397
         Software services                                              167,801         193,392
         General and administrative                                     272,508         397,362
         Depreciation and amortization                                  232,458         208,392
         Loss on settlement of liabilities                               26,458          25,030
                                                                   ------------    ------------
                      Total expenses                                  1,142,028       1,221,573
                                                                   ------------    ------------

Operating loss                                                         (650,003)       (647,792)

Interest expense (including $9,856 and $6,220 to related parties
          during 2005 and 2004, respectively)                           (35,579)       (103,363)
                                                                   ------------    ------------

Net loss                                                           $   (685,582)   $   (751,155)
                                                                   ============    ============

Basic and diluted net loss per share attributable
         to common shareholders                                    $      (0.03)   $      (0.05)
                                                                   ============    ============

Weighted average common shares outstanding,
         basic and diluted                                           25,660,546      16,833,181
                                                                   ============    ============

</TABLE>





           See accompanying notes to consolidated financial statements

                                       4
<PAGE>
<TABLE>
<CAPTION>

               RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months ended March 31, 2005 and 2004
                                   (unaudited)

                                                                                2005           2004
                                                                            -----------    -----------
<S>                                                                         <C>            <C>
Cash flows from operating activities:
     Net loss                                                               $  (685,582)   $  (751,155)
     Adjustments to reconcile net loss to net cash used in operating
          activities:
          Common stock issued for compensation and services                       3,313         25,245
          Depreciation and amortization                                         232,458        208,392
          Loss on settlement of liabilities                                      26,458         25,030
          Amortization of deferred financing fees                                 3,464          3,464
          Amortization of debt discount                                           6,776         67,954
          Change in assets and liabilities, net of effect of acquisition:
             (Increase) decrease in assets:
               Accounts receivable                                               13,608        (13,533)
               Prepaid expenses and other current assets                        (17,876)        (9,294)
               Other assets                                                      14,519           --
             Increase (decrease) in liabilities:
               Accounts payable                                                 (43,469)        13,454
               Accrued payroll tax obligation                                   138,138         76,953
               Accrued expenses and other liabilities                            23,414        149,668
                                                                            -----------    -----------
Net cash used in operating activities                                          (284,779)      (203,822)
                                                                            -----------    -----------

Cash flows from investing activities:
     Cash acquired in acquisition                                                  --            4,446
     Purchase of equipment                                                      (26,065)        (5,678)
     Capitalization of software development costs                               (87,295)       (30,018)
                                                                            -----------    -----------
Net cash used in investing activities                                          (113,360)       (31,250)
                                                                            -----------    -----------

Cash flows from financing activities:
     Proceeds from sale of common stock                                         350,000        175,000
     Proceeds from exercise of stock options                                      3,200           --
     Payments on notes payable                                                     --           (5,065)
     Proceeds from convertible bonds                                               --           43,000
                                                                            -----------    -----------
Net cash provided by financing activities                                       353,200        212,935
                                                                            -----------    -----------

Net decrease in cash and cash equivalents                                       (44,939)       (22,137)
Cash and cash equivalents at beginning of period                                343,510        171,088
                                                                            -----------    -----------
Cash and cash equivalents at end of period                                  $   298,571    $   148,951
                                                                            ===========    ===========

Supplemental Disclosure of Cash Flow Information:
     Cash paid for interest                                                 $      --      $      --
     Cash paid for income taxes                                             $      --      $      --

Supplemental Disclosure of Non-Cash Information:
     Preferred stock dividends accrued                                      $    15,647    $    15,422
     Common stock issued as payment for accrued interest and accrued
          dividends                                                         $    66,145    $    47,310
     Common stock issued in the Lostview acquisition                        $   195,000    $   337,500
     Receipt of asset purchased with common stock                           $      --      $    36,000
     Conversion of bonds into common stock                                  $   140,000    $   203,000
     Common stock issued for pending issuances                              $      --      $ 1,007,319

</TABLE>

           See accompanying notes to consolidated financial statements

                                       5
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation and Company Information

         The  financial  statements  included  herein have been prepared by Rush
Financial  Technologies,   Inc.,  without  audit,  pursuant  to  the  rules  and
regulations of the Securities and Exchange  Commission.  Certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted  pursuant to such rules and  regulations,
although we believe that the disclosures  contained  herein are adequate to make
the  information  presented not  misleading.  In the opinion of management,  the
information  furnished  in  the  unaudited   consolidated  financial  statements
reflects all  adjustments  which are ordinary in nature and necessary to present
fairly our financial  position,  results of operations  and changes in financial
position for such interim period.  These interim financial  statements should be
read in  conjunction  with our financial  statements and the notes thereto as of
and for the year ended December 31, 2004,  included in our annual report on Form
10-KSB for the year ended December 31, 2004.

         Rush  Financial  Technologies,  Inc.,  dba  RushTrade(R)Group  ("RSHF,"
"RushTrade  Group," "Rush," "we," "our" or the "Company"),  is a holding company
that operates through the following primary subsidiaries:  a real-time financial
technology development company,  RushGroup Technologies,  Inc., a new generation
direct-access  online  brokerage firm,  RushTrade  Securities,  Inc., along with
LostView  Development  Corporation,  a financial  technology and web development
company.

         RushGroup   Technologies,   Inc.,   ("RushGroup")  is  a  wholly  owned
subsidiary of the Company.  RushGroup is a registered  Service Bureau and member
of the Certified Partners program with the Nasdaq Stock Market. RushGroup serves
as our financial technology development subsidiary,  which develops and operates
proprietary  real-time portfolio  management  software products,  advanced order
management  systems,  direct-access  trading  software  applications  and a data
service center. Utilizing a number of proprietary technologies and its exclusive
Direct  Access  Routing  Technology  (DART(TM)),  an  intelligent  order routing
system,  RushGroup  offers  real-time  market data  platforms  and direct access
trading systems to National  Association of Securities  Dealers  ("NASD") member
broker/dealers, institutional portfolio managers and traders.

         RushTrade Securities,  Inc., ("RushTrade") is a wholly owned subsidiary
of the Company.  RushTrade,  a  fully-disclosed  introducing  broker/dealer  and
member NASD, PCX and SIPC, offers securities and direct access online brokerage,
trading and advanced order routing  services to its retail  customers  utilizing
RushGroup's software products. RushTrade customer accounts are insured up to $25
million and are held at a third-party  clearing firm. RushTrade is registered in
all 50 states  and  accepts  customers  from most  foreign  countries.  Customer
accounts are self-directed,  and RushTrade does not provide advice or make trade
recommendations.  For more information about RushTrade and our products,  please
visit www.rushtrade.com and www.rushgroup.com.

         In  February,  2004  we  acquired  LostView  Development   Corporation,
("LostView").  LostView is a financial  technology and web  development  company
providing  professional  software  development  services for online  trading and
document management systems.  We are utilizing  LostView's software  development
capabilities to accelerate our options  trading  development and better position
the Company to quickly add new product enhancements,  and gain additional levels
of redundancy and fault tolerance for our products and services.

         The accompanying  financial statements have been prepared assuming that
we will continue as a going concern.  At March 31, 2005, our current liabilities
exceeded our current assets by $2,561,347.  Additionally, we incurred a net loss
of $685,582 during the three months ended March 31, 2005 and $2,496,637 in 2004.
Also, we used cash in operations of $284,779 during the three months ended March
31, 2005 and  $1,008,245  in 2004.  We have unpaid  payroll  tax  obligation  of
approximately  $581,000 and past due debt  totaling  $185,000 at March 31, 2005.
Although  we believe  that we will be able to  continue  to raise the  necessary
funds until we reach a sustainable level of  profitability,  these matters raise
substantial  doubt  about  our  ability  to  continue  as a going  concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

         We have taken  several  steps to increase cash by the use of borrowings
and equity. During the three months ending March 31, 2005, we were able to raise
operating  capital of $350,000  through a private  placement of common stock and
warrants.  We sold 1,458,333 shares of common stock at an average price of $0.24
per share for total net  proceeds  of  $350,000.  We expect to continue to raise
additional  equity and/or debt funding until we begin to generate  positive cash
flows from  operations.  However,  at this time we have no  commitments  for any
additional funding.

                                       6
<PAGE>

2.   Use of Accounting Estimates

         The  preparation of financial  statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported  financial
statement amounts and disclosures.  Accordingly, the actual amounts could differ
from those estimates.

3.   Industry Segment Information

         Our  segments  have been  identified  based on  products  and  services
offered as well as risks assumed in a manner  consistent  with the data utilized
by the Chief  Executive  Officer  in  evaluating  operations.  RushTrade  offers
broker/dealer  services, and its operations have been included in the Investment
Services  segment.  The Software  Services segment is comprised of RushGroup and
LostView which offer licensing of the RushTrade direct access software and other
arrangements and are expected to become a new stream of revenue for us. There is
ongoing  development  activity  on the  software  to enhance  its use to outside
entities;  however, we have received only minimal revenue to date related to the
Software Services segment.

         The assets of the parent company,  Rush Financial  Technologies,  Inc.,
are used to support the operations of the the primary operating  divisions.  The
expenses  of the parent  company  are  included  in general  and  administrative
expenses.

         The following summarizes our identifiable assets,  capital expenditures
and depreciation and amortization by industry segment as of the dates indicated:

                                                    March 31,
                                         -------------------------------
            Identifiable Assets               2005             2004
        --------------------------       --------------   --------------
        Investment Services                $    184,503     $    168,017
        Software Services                     1,244,201        1,520,708
        Corporate                               404,038          381,724
                                         --------------   --------------
                   Total                   $  1,832,742     $  2,070,449
                                         ==============   ==============

                                           Three Months Ended March 31,
                                         -------------------------------
            Capital Expenditures              2005             2004
        --------------------------       --------------   --------------
        Investment Services                $        728     $       --
        Software Services                        87,295           30,018
        Corporate                                25,337            5,678
                                         --------------   --------------
                   Total                   $    113,360     $     35,696
                                         ==============   ==============

                                           Three Months Ended March 31,
            Depreciation and             -------------------------------
              Amortization                    2005            2004
        --------------------------       --------------   --------------
        Investment Services                $     33,074     $     27,731
        Software Services                       195,268          173,672
        Corporate                                 4,116            6,989
                                         --------------   --------------
                   Total                   $    232,458     $    208,392
                                         ==============   ==============



                                       7
<PAGE>

         The following  summarizes our industry  segment  operating data for the
periods indicated:

                                           Three Months Ended March 31,
                                         -------------------------------
            Revenue                           2005             2004
        --------------------------       --------------   --------------
        Investment Services                $    483,021     $    518,854
        Software Services                         2,595           44,790
        Corporate                                 6,409           10,137
                                         --------------   --------------
                   Total                   $    492,025     $    573,781
                                         ==============   ==============

                                           Three Months Ended March 31,
                                         -------------------------------
            Interest Expense                  2005             2004
        --------------------------       --------------   --------------
        Investment Services                $       --       $       --
        Software Services                            34             --
        Corporate                                35,545          103,363
                                         --------------   --------------
                   Total                   $     35,579     $    103,363
                                         ==============   ==============

                                           Three Months Ended March 31,
                                         -------------------------------
            Net Income (Loss)                 2005             2004
        --------------------------       --------------   --------------
        Investment Services                $      7,144     $     93,726
        Software Services                      (360,508)        (322,274)
        Corporate                              (332,218)        (522,607)
                                         --------------   --------------
                   Total                   $   (685,582)    $   (751,155)
                                         ==============   ==============

                                           Three Months Ended March 31,
                                         -------------------------------
                 Expense                      2005             2004
        --------------------------       --------------   --------------
        Investment Services                $    475,877     $    425,128
        Software Services                       363,103          367,064
        Corporate                               338,627          532,744
                                         --------------   --------------
                   Total                   $  1,177,607     $  1,324,936
                                         ==============   ==============

4.   Capitalized Software Development Costs

         In accordance  with SFAS No. 86,  "Accounting for the Costs of Computer
Software  to be  Sold,  Leased  or  Otherwise  Marketed,"  internally  generated
software   development  costs  associated  with  new  products  and  significant
enhancements  to existing  software  products  are  expensed  as incurred  until
technological feasibility has been established.  Software development costs that
qualify for  capitalization  include the  salaries  and benefits of the software
engineers  assigned to the  products,  internal and external  quality  assurance
testing  costs,   overhead  allocations   primarily  associated  with  rent  and
facilities costs and the costs of outsourced  development  activities.  Software
development  costs not  qualifying  for  capitalization  are recorded as product
development expense. Capitalized software development costs, including purchased
software,  if any, are amortized  using the greater of the revenue method or the
straight-line method generally with useful lives of three years or less. At each
balance  sheet date we  evaluate  the  estimated  net  realizable  value of each
software product and when required,  record write-downs of net book value to net
realizable  value of any  products  for which the net book value is in excess of
net realizable  value.  The net realizable  value is the estimated  future gross
revenue of each product reduced by the estimated  future costs of completing and
disposing  of that  product,  including  the  costs  of  completing  in  process
development  and customer  support.  Estimated  future gross  revenues have been
based on market potential,  other competitive  platforms,  product  penetration,
platforms,  current  customer  account growth rate and other market factors.  We
determined  that no write-down of  capitalized  software  development  costs was
required  during the three months ended March 31, 2005 and 2004. As of March 31,
2005, the total of all capitalized software development costs was $2,635,304 and
accumulated  amortization  of  capitalized  software  development  costs totaled
$1,903,467.  During the three months ended March 31, 2005 and 2004, we amortized
$173,089 and $173,672 of software costs, respectively, using an estimated useful
life of three years.

                                       8
<PAGE>
<TABLE>
<CAPTION>

5.   Reclassification

         Certain prior period balances have been  reclassified to conform to the
current period presentation.

6.   Net Loss Per Share

         Loss per  share  applicable  to  common  shareholders  for the  periods
indicated are computed using the following information:

                                                        Three months ended March 31,
                                                        ----------------------------
                                                            2005           2004
                                                        ------------   ------------
<S>                                                     <C>            <C>

Net loss                                                $   (685,582)  $   (751,155)
Dividends on preferred stock                                 (15,647)       (15,422)
                                                        ------------   ------------

Net loss attributable to common shareholders            $   (701,229)  $   (766,577)
                                                        ============   ============

Net loss per share applicable to common shareholders,
         basic and diluted                              $      (0.03)  $      (0.05)
                                                        ============   ============

</TABLE>

7.   Acquisition

         We acquired LostView  Development  Corporation  ("LostView")  through a
stock purchase  agreement  effective  February 27, 2004. We purchased all of the
outstanding  stock of LostView in exchange for 750,000  shares of our restricted
common  stock at closing and an  additional  750,000  shares  issued on March 2,
2005.  LostView is a financial  technology and web development company providing
professional  software  development  services  for online  trading and  document
management  systems.  RushTrade  Group benefits from the addition of LostView in
several  significant  ways.  By  utilizing  LostView's  resources,   RushGroup's
software development  capabilities have increased,  accelerating our options and
futures trading development.  RushGroup is also better positioned to quickly add
new product enhancements,  including the ability to capture market data directly
from the financial  exchanges.  Moreover,  RushTrade gained additional levels of
redundancy  and fault  tolerance for its products and services.  RushGroup  also
retained key employees of LostView,  bringing  valuable  experience in real-time
financial software development, market data collection and distribution.

         The  consideration  for the  purchase  of  LostView  has been valued at
$532,500,  based on the fair  value of the stock  issued on  February  27,  2004
valued at $337,500 plus the  contingent  consideration  issued on March 2, 2005,
valued at $195,000 on the day the contingency was resolved and the shares became
issuable.  The  contingency  was resolved  when the LostView  primary  employees
fulfilled the terms of their employment agreements.

         The  acquisition  was  accounted  for  using  the  purchase  method  of
accounting.  As such, the assets and  liabilities of LostView have been recorded
at their  estimated fair value and the results of operations  have been included
in the  consolidated  results of operations  from the date of  acquisition.  The
excess purchase price over the fair value of the tangible and intangible  assets
acquired in the acquisition totaled $395,247 and was allocated to goodwill.

Allocation of Purchase Price

         Following  is a summary  of the  amounts  assigned  to the  assets  and
liabilities of LostView:

             Cash                                     $     4,446
             Accounts receivable                           12,612
             Property and equipment                         8,733
             Goodwill                                     395,247
             Employment agreement                          63,453
             Intellectual property                         50,000
             Accounts payable                              (1,991)
                                                      -----------

             Total purchase price                        $532,500
                                                      ===========

                                       9
<PAGE>

None of the goodwill  recorded as a result of the  acquisition is expected to be
deductible for tax purposes.

Unaudited Pro Forma Results

         The following  unaudited pro forma  consolidated  results of operations
have been prepared as if the acquisition discussed above had occurred at January
1, 2004:

                                                          For the Three Months
                                                             Ended March 31,
                                                          --------------------
                                                                   2004
                                                          --------------------
     Revenues                                                  $   605,668
     Net loss attributed to common shareholders                $  (751,155)
     Net loss per share attributed to common
             shareholders, basic and diluted                   $     (0.04)
     Weighted average shares outstanding, basic and
             diluted                                            17,311,203

8.   Intangibles

         In  January  2002,  we  entered  into a  non-exclusive  agreement  with
NewportX.com,  an affiliate of Online Training Academy, ("OTA"), for referral of
active online traders. The initial term of the agreement was for three years and
cancelable by either party after the initial term with twelve months notice. The
agreement  called  for us to pay to  NewportX.com  50% of net  commissions  on a
monthly basis for any traders referred by OTA for which RushTrade agreed to open
an account.  Additionally,  RushTrade  agreed to reimburse the traders'  tuition
paid to OTA by reducing  RushTrade's  standard published commission rate by 25%.
In March 2002 an  alternate  method of payment was agreed to by amendment to the
original agreement, whereby we agreed to pay OTA $2,000 in common stock for each
trader referred. The amendment was for six months, or until 150 traders had been
acquired by RushTrade.  We issued 1,200,000 shares of restricted common stock to
NewportX.com  during March 2002,  and recorded a prepaid asset of $300,000,  the
fair value of the stock on the date of  issuance.  This amount was recorded as a
prepaid asset as we issued common stock,  consideration  in advance of receiving
the assets acquired.  As the active trader accounts were received and certified,
we reclassified  these amounts to an intangible  asset. As of December 31, 2004,
all 150 of the trader  accounts  were  delivered  and certified and $300,000 was
reclassified to intangible  assets and is being amortized over three years,  the
estimated life of the trader  accounts.  Amortization of this intangible for the
three   months   ended  March  31,  2005  and  2004  was  $25,000  and  $22,000,
respectively.  At March 31, 2005  accumulated  amortization  of this  intangible
totaled $172,500.

         In February 2004, we completed the acquisition of LostView.  The assets
acquired included  $113,453 of intangible  assets,  other than goodwill.  Of the
$113,453 of intangible  assets,  $50,000 was assigned to  intellectual  property
subject to  amortization  over 3 years and  $63,453 was  assigned to  employment
agreements  subject  to  amortization  over 1 year (the  term of the  employment
agreements).  Amortization  expense related to these intangibles was $20,030 and
$0 for the periods  ending March 31, 2005 and 2004,  respectively.  At March 31,
2005, accumulated amortization of these intangibles totaled $80,120.

9.   Convertible Notes

         We have two convertible  notes due to a related party totaling $185,000
that are past due. We are in  discussion  with the holder to repay,  and we have
agreed to repay these notes. We have convertible  notes  totaling  $200,000 plus
accrued interest presently due and payable and additional notes of $100,000 plus
accrued interest that will become due on May 10, 2005.

10.  Convertible Bonds

         Early in 2004 our $1,500,000 offering of 12% Senior Secured Convertible
Bonds ("Bonds") was fully  subscribed.  The Bonds bear interest at 12% per annum
and are convertible into our common stock at a rate of 50% of the average market
price of the  stock  for the ten days  preceding  conversion,  but not less than
$0.15 per share. Principal and interest will be repaid on or before December 27,
2007, if not converted  prior. We may force conversion if the stock trades above
$2.00 per share for 10 consecutive trading days.

                                       10
<PAGE>

         During  the three  months  ended  March  31,  2005,  $140,000  of Bonds
converted  into  933,333  shares of common  stock  and at March 31,  2005  Bonds
payable totaled $329,725 net of unamortized debt discount of $15,275.

11.  Stock-Based Compensation

         We account for our  stock-based  employee  compensation  plan using the
intrinsic  value-based method prescribed by Accounting  Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
As such, compensation expense is recorded on the date of grant to the extent the
current market price of the underlying  stock exceeds the option exercise price.
We did not record any  compensation  expense in the three months ended March 31,
2005 and 2004 as the exercise prices of the options issued,  if any,  equaled or
exceeded  the fair market  value of the stock on the date of  issuance.  Had the
Company  determined  compensation  based on the fair value at the grant date for
its stock options under Statement of Financial Accounting Standards ("SFAS") No.
123,  "Accounting  for  Stock-Based  Compensation,"  as amended by SFAS No. 148,
"Accounting  for  Stock-Based  Compensation  -  Transition  and  Disclosure - an
amendment  of FASB  Statement  No.  123," net loss and loss per share would have
been increased as indicated below:
                                                          Three Months
                                                         Ended March 31,
                                                    ------------------------
                                                       2005          2004
                                                    ----------    ----------
   Net loss attributable to common shareholders,
        as reported                                 $ (701,229)   $ (766,577)
   Add:  Stock-based employee compensation
        expense included in reported net loss             --            --
   Deduct:  Stock-based employee compensation
        expense determined under fair value based
        method                                            --         (26,368)
                                                    ----------    ----------
   Pro forma net loss                               $ (701,229)   $ (792,945)
                                                    ==========    ==========

   Net loss per share
        As reported                                 $    (0.03)   $    (0.05)
                                                    ==========    ==========
        Pro forma                                   $    (0.03)   $    (0.05)
                                                    ==========    ==========

         In December 2004, the Financial  Accounting Standards Board issued SFAS
No. 123 (revised 2004),  "Share-Based Payment" ("SFAS No. 123R"), which replaces
SFAS No. 123 and  supersedes  APB Opinion No. 25.  SFAS No.  123R  requires  all
share-based  payments to employees,  including grants of employee stock options,
to be recognized in the financial statements based on their fair values. The pro
forma disclosures  previously  permitted under SFAS No. 123 will no longer be an
alternative to financial  statement  recognition.  For us, SFAS No. 123R will be
effective January 1, 2006.

         We plan on adopting  the new standard  using the  modified  prospective
method. Under the modified prospective method,  companies are required to record
compensation expense for new and modified awards over the related vesting period
of such awards prospectively and record compensation  expense  prospectively for
the  unvested  portion,  at the  date of  adoption,  of  previously  issued  and
outstanding  awards  over  the  remaining  vesting  period  of such  awards.  No
amendments  to  prior  periods   presented  are  permitted  under  the  modified
prospective method. The future impact of the adoption of SFAS No. 123R cannot be
predicted at this time because it will depend on levels of share-based  payments
granted by us in the  future.  However,  had we adopted  SFAS No.  123R in prior
periods,  the impact of that standard would have approximated the impact of SFAS
No. 123 as described in the disclosure of pro forma net loss above.

12.  Shareholders' Deficit

         During the first quarter of 2005 we issued 1,250 shares of common stock
(valued  at $313  based on the fair  value  of our  common  stock on the date of
issuance) to employees as compensation, holders of $140,000 of convertible bonds
elected to convert  their bonds into  933,333  shares of common  stock,  750,000
shares of common  stock were issued for the  purchase  of  LostView  Development
Corporation  (valued at $195,000  based on the fair  market  value of our common

                                       11
<PAGE>

stock on the date of  issuance),  12,498  shares of common  stock were issued as
directors  fees  (valued  at $3,000  based on the fair value of our stock on the
date of issuance),  20,000 stock  options were  exercised for proceeds of $3,200
and $39,687 of accrued  interest was  converted  into  264,580  shares of common
stock with a fair market value of $66,145 at issuance.  A loss on the settlement
of liabilities was recorded for $26,458,  the difference  between the fair value
of  the  common  stock  issued  and  the  amount  of  the  interest  obligation.
Additionally,  1,458,333  shares of common stock and an equal number of warrants
were issued for  proceeds of  approximately  $350,000.  The warrants are for the
purchase of our common stock at $0.24 per share with a term of four years.

13.  Payroll Tax Obligation

         We have an  estimated  federal  and state  payroll  tax  obligation  of
$580,835 at March 31, 2005. We have estimated  this  obligation to be the actual
amounts  of tax  withheld  from  employees  and the  employer  portion of Social
Security  Federal Tax Obligation for the second and fourth quarters of 2003, all
four  quarters  of 2004 and a portion of the taxes due for the first  quarter of
2005 in addition to an estimated accrual for interest and penalties. There is no
obligation  outstanding  for the first and third  quarters  2003, as these taxes
have been  submitted and the  remaining  taxes due for the first quarter of 2005
were  submitted  subsequent  to period end but were an  obligation  at March 31,
2005.

14.  Legal Proceedings

         The Company and its subsidiaries  are engaged in legal  proceedings and
arbitrations  from time to time.  Management  believes some of these proceedings
could have a material  effect upon the operations or financial  condition of the
Company if the Company is unsuccessful in defending against the actions.

         Company  Proceedings.  On June 24,  2003,  in Sumner  Group Inc.  d/b/a
Datamax Office Systems Leasing Division v. Rushmore  Financial Group;  Cause No.
CC-03-7400-b;  County Court at Law No. 2, Dallas County,  Texas, a former vendor
filed a claim in the  Dallas  County  Court  claiming  that we failed to pay for
services  rendered  on a  copier  in the  amount  of  $39,710.  We have  filed a
counterclaim  alleging  overcharges  and  improper  installation  of a  software
product causing us incalculable harm. This matter was  unsuccessfully  mediated,
and a jury trial is set for July 11, 2005. We believe the range of possible loss
is up to $55,000.  We have not recorded a provision for this matter as we intend
to vigorously defend these allegations and believe that payment is not probable.

         On  December  27,  2004,  in Waymark  Internet  Services,  Inc. v. Rush
Financial  Technologies,  Inc.; Cause No.  04-12776-K;  192nd Judicial  District
Court,  Dallas County,  Texas,  a vendor filed a claim in Dallas  District Court
claiming a total of $52,870 in damages.  We dispute the amount of the claims and
plan to  vigorously  defend  ourselves  in this  matter.  At March  31,  2005 we
estimate  our  liability  for  this  claim  to  be  approximately  $11,000,  and
accordingly  have  recorded a  liability  for this  amount.  We are in the early
stages of discovery and a trial setting has not been set.

         RSC was  subject  to a joint  NASD and SEC  examination  in the  second
quarter of 2002.  As a result of this  examination  the  Company  has  accrued a
liability of $25,000 at March 31, 2005 to account for a possible NASD fine. This
is management's best estimate of the ultimate liability to RSC.

         RSC Subsidiary  Proceedings.  On April 17, 2003, in E.F. (Mickey) Long,
II, et al. v. Rushmore Financial Group, Inc.,  Rushmore  Securities  Corporation
and D.M. "Rusty" Moore;  NASD Dispute  Resolution  Arbitration No.  03-01451,  a
group of  former  securities  representatives  of RSC  filed  for  NASD  Dispute
Resolution,  naming  the  Company  and  Mr.  Moore  as  defendants.  The  former
representatives  are claiming  $178,288 in commissions.  At December 31, 2003 we
estimated  our  liability to be $43,000 and recorded an accrual for this amount.
In 2004 we  negotiated a settlement  with the  representatives  in the amount of
$98,750 but RSC has been unable to pay this claim.  Since no payments  have been
made RSC  became  subject  to an  agreed  arbitration  award in the total sum of
$129,425. The entire liability of $129,425 has been accrued at March 31, 2005.

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

1.   Recent Developments

         We have taken  several  steps to increase cash by the use of borrowings
and equity.  During the three months ended March 31, 2005, we were able to raise
operating  capital of  approximately  $350,000  through a private  placement  of
common stock.  We sold  1,458,333  shares at an average price of $0.24 per share
for total net proceeds of approximately $350,000.

                                       12
<PAGE>

2.   RushTrade and RushGroup Business Summary

Overview

         Rush  Financial  Technologies,  Inc.,  dba  RushTrade(R)Group  ("RSHF,"
"RushTrade  Group," "Rush," "we," "our" or the "Company"),  is a holding company
that operates through two primary subsidiaries: a real-time financial technology
development  company,  RushGroup  Technologies,  Inc.,  ("RushGroup")  and a new
generation  direct-access  online brokerage firm,  RushTrade  Securities,  Inc.,
("RushTrade").

         RushGroup   Technologies,   Inc.,   ("RushGroup")  is  a  wholly  owned
subsidiary of the Company.  RushGroup is a registered  Service Bureau and member
of the Certified Partners program with the Nasdaq Stock Market. RushGroup serves
as our financial technology development subsidiary,  which develops and operates
proprietary  real-time portfolio  management  software products,  advanced order
management  systems,  direct-access  trading  software  applications  and a data
service center. Utilizing a number of proprietary technologies and its exclusive
Direct  Access  Routing  Technology  (DART(TM)),  an  intelligent  order routing
system,  RushGroup  offers  real-time  market data  platforms  and direct access
trading systems to National  Association of Securities  Dealers  ("NASD") member
broker/dealers, institutional portfolio managers and traders.

         RushTrade Securities,  Inc., ("RushTrade") is a wholly owned subsidiary
of the Company.  RushTrade,  a  fully-disclosed  introducing  broker/dealer  and
member NASD, PCX and SIPC, offers securities and direct access online brokerage,
trading and advanced order routing  services to its retail  customers  utilizing
RushGroup's software products. RushTrade customer accounts are insured up to $25
million and are held at a third-party  clearing firm. RushTrade is registered in
all 50 states  and  accepts  customers  from most  foreign  countries.  Customer
accounts are self-directed,  and RushTrade does not provide advice or make trade
recommendations.  For more information about RushTrade and our products,  please
visit www.rushtrade.com and www.rushgroup.com.

         We were originally founded in 1990, commencing operations in March 1991
as Rushmore Capital  Corporation,  a traditional  financial services company and
grew  rapidly  from a  start-up  into a  retail  brokerage  organization  with a
nationwide  account base and network of agents and  registered  representatives,
completing our Initial Public  Offering (IPO) on the NASDAQ  SmallCap  Market at
$5.50 per share in April 1998.  Less than one year later,  on February 10, 1999,
upon the announcement of RushTrade, our common stock soared 422% as the NASDAQ's
"Top Gainer," becoming the first publicly traded company to offer  direct-access
order  routing to retail  customers.  In 1997,  prior to our IPO, we changed our
name to Rushmore  Financial Group,  Inc., and on January 26, 2004 to our current
name,  Rush  Financial  Technologies,   Inc.  to  more  accurately  reflect  our
repositioning as a real-time financial technology development company and direct
access online  brokerage firm. We are  headquartered  in Dallas,  Texas, and our
common stock is traded on the OTC.BB market under the symbol "RSHF."

         In 1999, we embarked on a multi-million  dollar proprietary  technology
development  initiative  in  response  to the  burgeoning  market for  real-time
financial  technologies  and  direct-access  online trading and moved quickly to
acquire the technology assets of Block Trading,  Inc. of Houston,  Texas. During
this  period,  management  divested  and  redeployed  assets  in  an  aggressive
re-positioning  strategy,  redirecting  our emphasis  away from the  traditional
retail brokerage  business with its lower operating margins to capitalize on the
rapidly  expanding  market for real-time  financial  services  technologies  and
direct-access  online trading that is  revolutionizing  the online brokerage and
institutional trading industry.

         After more than three years of development and successful beta testing,
RushTrade Group launched its technology  platform in 2003 under its RushTrade(R)
brand,  offering multi direct-access  software applications to meet the needs of
active online investors,  semi-professional  traders,  institutional traders and
portfolio  managers.  RushGroup  provides  real-time market data and the highest
quality of trade executions in U.S.  equities with  direct-access  routes to all
major  exchanges and Electronic  Communications  Networks  ("ECN's"),  streaming
real-time  quotes,  charts,  news,  research,  and other  advanced  trading  and
portfolio management tools.

         The  RushTrade  Group  business  model   integrates  a   multi-channel,
multi-product  offering  with a  state-of-the-art  technology  and a high  gross
margin,  low cost operational  infrastructure.  RushTrade's  sales and marketing
programs,   strategic  alliances  and  potential  licensing  arrangements  drive
RushTrade Group's growth strategy.

Products

         RushGroup has exclusively  developed and supports  several  proprietary
products:  RushTrade Direct, a Level I browser-based  product,  RushTrade Direct
Plus, a streaming Level I  software-based  product,  and RushTrade Direct Pro, a

                                       13
<PAGE>

Level II software-based  product.  RushGroup offers real-time financial services
technologies,  direct access trading applications, and Advanced Order Management
Systems  (OMS),  to the online  brokerage and  institutional  trading  industry.
RushGroup's products have been fully validated in the market,  having executed a
total share market value of over $2.3 billion in its first year of operations.

         RushTrade,  along with other  providers,  was featured in Bear Stearns'
Financial  Technology  report  dated  August 2004 and has also been  featured in
Barron's and in Active  Trader  magazine.  In the Barron's  March 8, 2004 Online
Brokers Survey, RushTrade was rated "...among the Best Direct-Access Brokers for
Active Traders." In the March 7, 2005 issue of Barron's,  awarded  RushTrade its
Four Star Rating.  RushTrade  provides  customers  direct-access to the markets,
electronically  bypassing  third party Market Makers in most cases. In contrast,
most on-line  brokerage firms route orders to the firm's Market Maker desk or to
third party wholesalers with "payment for order flow" arrangements that normally
inhibit the customer's price, speed and quality of execution.

         With    portfolio    management    tools   that    include    real-time
"straight-through"   posting  of  trade  positions  and  account  balances,  the
technological  advancements made in RushTrade Direct Pro software constitute the
third  generation (3G) trading software that is much more efficient than that of
the  traditional  online  firms.  RushGroup's  software  is thin  and  efficient
compared to older "legacy"  software  trading  platforms and we believe our data
center can host 200% to 300% more users per server than our competitors.

Technology

         RushGroup's  Technology Unit and Software  Development  Team align well
with its strategic  direction to expand rapidly in the financial  technology and
direct  access  online  trading  space.  As evidenced by our rapidly  increasing
customer accounts, trade volumes and revenue,  RushGroup continues to strengthen
its product offerings and bolster its market presence.

         RushGroup's Data Service Center processes and delivers real-time market
data,  quotes,  charts,  advanced  studies,  etc., and its  "Execution  Server,"
utilizing  DART, a proprietary  intelligent or "smart" order routing  technology
which has connections to the major Exchanges and ECNs,  empowers  customers,  in
most cases,  to bypass the "middlemen" or Market Makers that seek to profit from
customer order flow. Within milliseconds, DART automatically scans the available
market  for the best  price  and  routes  the  order to that  particular  market
participant.  RushTrade's  marketable limit orders are usually routed,  executed
and filled in less than 1-2 seconds.

         Developed  by  RushGroup's  software  engineers in  collaboration  with
experienced  traders,  DART's  "smart"  order  routing  is  accomplished  by  an
innovative  proprietary trading algorithm along with other proprietary features.
RushGroup  currently has under development  additional  Advanced Order Types and
systems with OTO and OCO  functionality,  as well as other trade  management and
portfolio risk management tools.

Market Opportunity

         Demographic shifts and new technologies always drive change; electronic
brokerage,  electronic  clearing and  electronic  order matching is changing the
retail  brokerage  and  institutional  trading  industry.  In  addition,  recent
regulatory actions are opening up new opportunities for RushGroup's products and
services.   Various   regulatory   agencies  are  requiring   modifications   to
long-established  practices  such  as  "payment-for-order-flow"  between  market
makers,  "soft  dollar"  arrangements  to trading firms in exchange for research
coverage,  and more  disclosure  and  transparency  in other trading  practices.
RushTrade  Group is positioning  itself to benefit from the convergence of these
industry trends and regulatory  changes.  We believe that new technologies  have
begun to erode the dominance  previously  enjoyed by a few large players such as
Bloomberg,  Sunguard,  ILX/Thompson,  and Reuters. New market opportunities have
emerged for new providers like  RushGroup,  who we believe can more  efficiently
and cost effectively deliver financial tools and information.

         We believe that  RushTrade  will be able to  capitalize on these market
opportunities  with  its  easy-to-use,  multi-product  offering,  and  low  cost
operational  infrastructure,  and  therefore  can position  itself as a low cost
leader in the direct access market.

         Today,  electronic and algorithmic  trading is becoming a dynamic force
representing  over  one-third  of total  trading  volume  on the New York  Stock
Exchange and NASDAQ.  According to Bear Stearns & Co. Inc.,  at the beginning of
2003,  there were over 20.5 million online retail trading  accounts in the U.S.,
up 8% from 19 million in 2002,  which was up from 17.4  million,  an increase of
20% from 2001. "Semi-professionals" accounted for 83% of this trading volume.

                                       14
<PAGE>

         According to Active Trader,  an industry  magazine,  many trade experts
expect "direct-access to become an increasingly large part of trading operations
and hedge  funds in the U.S.  and abroad and  continue  to  dominate  retail day
trading  with order  volumes to  steadily  increase  the next few  years."  With
superior  functionality  and ease of use, we believe  RushTrade's  multi-product
offering  can  maximize  market   opportunity.   With  a  low  cost  operational
infrastructure  and a highly  motivated and effective sales and customer service
support team,  RushTrade is positioning itself to penetrate receptive markets in
both retail direct access online space as well as the institutional market.

Growth Strategy

         RushTrade Group has two core businesses and a multiple product offering
with various channels of distribution. Our growth strategy is to acquire "active
trader"  customers  through  strategic  alliances  and  implementing  a low cost
"guerrilla"   sales  and   Internet   marketing   strategy.   To  maximize   its
effectiveness,  this advertising program employs, among other things, the use of
a  targeted  keyword  Internet  search and a timing  strategy  that is more cost
efficient  than  traditional   advertising   programs.   RushTrade   coordinates
web-advertising  programs on Google,  CBS Market Watch,  Big Charts,  Kiplinger,
Yahoo Finance, and others, which drives to its web domains, www.daytrade.com and
www.rushtrade.com,  the web traffic  that  generates  most of its current  sales
leads.  As it prepares to launch its products and services in the  institutional
marketplace,  RushTrade Group believes that it can position itself as a low cost
leader in the retail direct access "space."

         The RushTrade  business unit is currently driving the Company's revenue
growth.  Later in 2005,  we expect  RushGroup to produce an  additional  revenue
stream by licensing versions of the RushGroup software products and by providing
real-time  financial  data  services  to other  brokerage  firms  and  financial
institutions.  Eventually,  RushGroup  is  expected  to  take  the  lead  in the
Company's  consolidated revenue growth by offering, to the institutional market,
a $14 billion industry, a new-age platform that is efficient and extremely price
competitive.  As the industry  consolidates  both vendors and costs,  we believe
that RushTrade Group can position itself to gradually weaken the market share of
the current industry leaders through aggressive marketing,  competitive pricing,
flexible  deployment,  strategic  alliances,  efficient  delivery  and  creative
consolidation.

Strategic Alliances

         We have established strategic alliances or joint marketing arrangements
with eSignal,  Knobias,  Trade-Ideas,  Online Trading Academy and others.  These
arrangements,  depending  on  the  terms  of  the  relationship,  provide  joint
marketing  opportunities that are expected to enhance our ability to acquire new
customers,  lower our customer  acquisition  costs and/or provide  education and
other resources that improve our customer retention.

         eSignal,  a division of Interactive  Data  Corporation  (NYSE:  "IDC"),
provides  global,  real-time  market data and decision  support  tools to active
investors  worldwide.  We plan to integrate  our Advanced  Order  Execution  OMS
platform into the eSignal product in connection with a joint marketing  alliance
with eSignal. The terms of the agreement call for a joint marketing  arrangement
and a proposed product integration where the RushTrade-eSignal  product offering
will be targeted to the "high end" segment of the long-term investor, hedge fund
manager and active trader market. RushTrade and eSignal pay their own costs with
the product integration. No fees are charged to either party. The agreement also
calls for a non-exclusive,  non-transferable limited license that has no revenue
sharing  or  co-branding  provision  and is for a one year  term,  automatically
renewing  for  successive  one year  terms,  and which can be canceled by either
party on 120 day notice.  The agreement is expected to bolster our marketing and
brand  awareness,  and is expected to expand our customer  account  base,  trade
volume and revenue. Revenues associated with the agreement will be accounted for
as RushTrade transaction based revenue.

         Online Trading  Academy  ("OTA") is an education  provider of classroom
training,  interactive CDs, and online  education for individuals  interested in
learning the latest tools and trading  techniques in direct access trading.  OTA
is a recognized  leader in the unique  educational  niche of live Direct  Access
Trading education.  Using the RushTrade Direct Pro platform, OTA offers teaching
facilities  and  professional  instruction,  and to make the education even more
attractive,   we  reimburse  OTA's  students'  tuition  by  offering  commission
discounts at RushTrade.  The agreement calls for a revenue  sharing  arrangement
with  NexportX.com,  the broker dealer affiliate of OTA, whereby RushTrade is to

                                       15
<PAGE>

pay 50% of its net revenue after clearing charges and other costs to NewportX on
a monthly  basis.  The  agreement is for a three-year  term with a provision for
annual renewals upon agreement by the parties. Currently, customer accounts from
OTA account for less that 10% of our customer  accounts and approximately 20% of
our  trade  volume  and  revenue.  We  account  for  the  revenue  as  RushTrade
transaction  based  revenue and the revenue  sharing  portion as a commission or
customer acquisition cost expense. An amendment to the agreement was executed in
2002 that  substituted the revenue  sharing  provision by the acquisition of 150
customer  accounts  in  exchange  for our  common  stock,  which  is more  fully
described  in Note 8 to the  Unaudited  Consolidated  Financial  Statements.  We
believe this relationship  allows us to acquire high quality customers,  trained
on the RushTrade software platform, and enhances the knowledge and effectiveness
of the individual trader and therefore the longevity of our customer.

         Knobias  Holdings,  Inc.  is a real-time  news and  content  technology
development  company.  RushTrade  and  Knobias  have each  separately  developed
certain proprietary products,  services and real-time direct access technologies
which both  companies  believe  complement  each  other's  product  and  service
offerings.  Knobias  supplies  RushTrade its "News,  Research,  Fundamental" and
other data in exchange for RushTrade  supplying  Knobias with RushGroup's  "Real
Time Charts" and other real-time market data which lowers our costs of providing
this data to our  customers  and provides  joint  marketing  opportunities.  The
arrangement  currently has no revenue sharing provision and may be terminated by
either party giving ninety days notice to the other.

         Trade-Ideas is a web-based stock streaming tool that provides real-time
statistical  and  technical  analysis  of  stocks  trading  on  U.S.  exchanges.
Trade-Ideas  is a  third-party  software  vendor and  RushTrade  customers  must
individually   subscribe  to  the  service.  The  Trade-Ideas  software  product
automatically  and continuously  scans thousands of stocks and indices providing
users with new trading opportunities and real-time decision support tools. Under
the terms of the  agreement,  the  integration  of  Trade-Ideas  with  RushTrade
provides our customers with a third party resource tool for technical indicators
and analysis.  The arrangement currently has no revenue sharing provision and is
operated on a month-to-month basis. We believe our relationship with Trade-Ideas
enhances the knowledge and  effectiveness of the individual trader and therefore
the longevity of our customers.

         Strategic alliances and business  development account for approximately
40% of RushTrade's trade volume and revenue. As these are a key component of our
growth strategy, we are aggressively  pursuing additional  relationships such as
these.

         Our other  subsidiaries and former business units are inactive,  except
for residual revenues and certain legal proceedings.

Plan of Operation

         The accompanying  financial statements have been prepared assuming that
we will continue as a going concern.  At March 31, 2005, our current liabilities
exceeded our current assets by  $2,561,347.  Also, we had net losses of $685,582
for the three months ended March 31, 2005 and  $2,496,637  in 2004.  Although we
believe that we will be able to continue to raise the  necessary  funds until we
reach a sustainable  level of  profitability,  these  matters raise  substantial
doubt about our ability to continue as a going concern.

         We have taken  several  steps to increase cash by the use of borrowings
and equity. During the three months ending March 31, 2005, we were able to raise
operating  capital of  approximately  $350,000  through a private  placement  of
common stock and warrants.  During 2004 we raised approximately  $1,378,000 from
the sale of common stock through private placements and $43,000 through the sale
of 12% Senior Secured  Convertible  Bonds (the  "Bonds").  During 2003 we raised
$794,500  through  the sale of the  Bonds.  The Bonds bear  interest  at 12% per
annum,  principal and interest are due on or before  December 31, 2007,  and are
convertible into shares of common stock at a rate of 50% of the preceding 10 day
volume weighted  average market price of the stock,  but not less than $0.15 per
share. The Bonds are secured by the RushTrade  software,  trade name,  websites,
customer  accounts and other  assets.  The Bond  offering  was fully  subscribed
shortly after the year ended December 31, 2003.

         RushTrade  is  executing  a low-cost  "guerrilla"  sales and  marketing
strategy in addition  to its  strategic  alliances  that are  producing  desired
results. RushTrade's domain names, www.daytrade.com,  and www.rushtrade.com have
web traffic that generate most of its current  sales leads.  RushTrade  believes
that it can position  itself as a low-cost  leader in the retail  direct  access
"space" as the  Company  prepares to launch  RushGroup  products  and  financial
market data services in the institutional marketplace late in 2005.

         Our sales and marketing  efforts are  beginning to show results.  Since
the release of the RushTrade  products in late 2002  RushTrade  has  experienced
substantial quarter to quarter increases in new accounts, share/trade volume and
customer account assets.

                                       16
<PAGE>
<TABLE>
<CAPTION>

         The number of RushTrade  customer accounts and  corresponding  customer
assets has grown as follows:

  As of     Total     Securities       Cash          Total        Margin         Total
  Date     Accounts     Value         Balance        Assets         Debt         Equity
--------   --------   -----------   -----------   -----------   -----------   -----------
<S>        <C>        <C>           <C>           <C>           <C>           <C>
 9/30/02      95      $ 1,492,474   $ 1,671,317   $ 3,163,791   $  (27,652)   $ 3,136,139
12/31/02     140        4,335,121     1,984,429     6,319,550     (318,152)     6,001,398
 1/31/03     190        5,608,639     4,501,291    10,109,930     (829,355)     9,280,575
 2/28/03     225       10,415,611     5,188,474    15,604,085   (1,426,446)    14,177,639
 3/31/03     301       11,552,613     4,803,235    16,355,848   (1,169,472)    15,186,376
 4/30/03     421       14,054,217     6,765,568    20,819,785   (1,468,478)    19,351,307
 5/31/03     522       15,434,623     8,304,606    23,739,229   (1,799,998)    21,939,231
 6/30/03     636       18,794,159     9,141,242    27,935,402   (2,598,923)    25,336,479
 7/31/03     751       20,419,951     9,993,480    30,413,430   (2,701,092)    27,712,338
 8/31/03     856       22,312,506    10,612,005    32,924,511   (3,148,393)    29,776,118
 9/30/03    1,001      20,740,815    10,992,947    31,733,762   (2,075,382)    29,658,380
10/31/03    1,116      21,590,111    11,396,924    32,987,035   (1,261,640)    31,725,395
11/30/03    1,185      23,325,859    12,693,979    36,019,838   (1,467,801)    34,552,037
12/31/03    1,272      27,818,441    12,940,421    40,758,862   (1,811,751)    38,947,111
 1/31/04    1,422      28,824,596    14,083,292    42,907,888   (2,090,120)    40,817,768
 2/29/04    1,587      31,161,088    13,797,508    44,958,596   (2,327,977)    42,630,619
 3/30/04    1,775      31,222,653    16,627,495    47,850,148   (2,342,976)    45,507,172
 4/30/04    1,884      31,875,885    18,555,467    50,431,352   (2,665,504)    47,765,848
 5/31/04    2,007      33,398,506    18,875,300    52,273,806   (3,040,401)    49,233,405
 6/30/04    2,080      34,677,309    18,767,608    53,444,917   (3,319,895)    50,125,022
 7/31/04    2,161      30,450,573    20,212,429    50,663,002   (2,345,174)    48,317,828
 8/31/04    2,217      30,317,735    19,241,788    49,559,523   (2,551,375)    47,008,148
 9/30/04    2,297      32,766,520    18,542,788    51,309,308   (3,160,483)    48,148,825
10/31/04    2,345      31,835,458    21,344,875    53,180,332   (2,421,150)    50,759,182
11/30/04    2,406      36,789,079    19,561,429    56,350,508   (2,637,219)    53,713,290
12/31/04    2,503      40,056,557    19,558,461    59,615,018   (3,017,523)    56,597,496
 1/31/05    2,581      37,194,729    19,573,235    56,767,964   (2,036,440)    54,731,524
 2/28/05    2,657      41,026,103    17,574,439    58,600,543   (1,894,213)    56,706,329
 3/31/05    2,717      42,087,506    19,144,181    61,231,687   (2,514,089)    58,717,598

</TABLE>

                                       17
<PAGE>

         The  following  table  shows  the  2003,  2004 and  2005  month to date
activity level of the RushTrade Securities, Inc. customer base:

             For the           Number        Number        Number of
             Month of        of Trades     of Shares     New Accounts
         ----------------   -----------   -----------   --------------
         January 2003           3,414       3,596,532         50
         February 2003          3,851       3,583,894         35
         March 2003             4,521       3,039,325         76
         April 2003             7,019       4,242,451        120
         May 2003               8,178      10,029,062        101
         June 2003             11,054       8,772,640        114
         July 2003             10,839      11,632,790        115
         August 2003           10,112      12,672,975        105
         September 2003        13,315      32,177,054        145
         October 2003          15,700      39,072,872        115
         November 2003         14,746      54,738,776         69
         December 2003         16,311      47,055,892         87
         January 2004          18,362      69,948,879        150
         February 2004         16,270      46,033,738        165
         March 2004            20,307      78,024,289        159
         April 2004            21,873      98,027,673        129
         May 2004              14,616     122,286,369         80
         June 2004             17,161     173,243,821         73
         July 2004             15,378     128,038,074         81
         August 2004           13,725     129,097,987         56
         September 2004        15,108     169,176,496         80
         October 2004          14,391     222,908,308         48
         November 2004         16,342     243,255,421         61
         December 2004         16,987     870,807,259         97
         January 2005          17,924     448,590,449         78
         February 2005         16,569     565,446,899         76
         March 2005            16,887     834,633,493         60

         Later in 2005,  we expect  RushGroup to begin to produce an  additional
revenue stream by licensing  versions of the RushGroup  Software products and by
providing  order  routing  services  to  other  brokerage  firms  and  financial
institutions.  RushGroup  plans to offer to the  institutional  market a new-age
platform that is efficient and price competitive.  As the industry  consolidates
both  vendors and costs,  we believe  that we can  position  ourselves to obtain
market share from the current  industry  leaders through  aggressive  marketing,
competitive  pricing,  flexible  deployment,   strategic  alliances,   efficient
delivery and creative consolidation.

3.   Results of Operations

Three Months Ended March 31, 2005 and 2004:

Revenues

         The following  table sets forth the  components of our revenues for the
periods indicated:

                                           Three Months Ended March 31,
                                         -------------------------------
            Revenue                           2005             2004
        --------------------------       --------------   --------------
        Investment Services                $    483,021     $    518,854
        Software Services                         2,595           44,790
        Corporate                                 6,409           10,137
                                         --------------   --------------
                   Total                   $    492,025     $    573,781
                                         ==============   ==============

                                       18
<PAGE>

         Total revenue for the first  quarter  decreased  $81,756,  or 14%, from
2004 to 2005. This decrease  reflects the reduction of Software Services revenue
from LostView, and reflects the decreased revenue from in the RushTrade business
unit in 2005 compared to 2004.

         Investment  Services  revenue  decreased  $35,833,  or 7%, from 2004 to
2005.  RushTrade  was unable to continue its  aggressive  marketing  for much of
2004. We believe that this  reduction  restricted our revenue growth for much of
the last half of 2004 and has  continued to limit growth in the first quarter of
2005.  In late 2004 we began an aggressive  advertising  campaign and expect our
revenue growth rate to increase in the coming periods. However,  RushTrade, like
most  broker/dealers,  is dependent on the overall activity in the United States
equity markets. RushTrade will continue to devote resources toward marketing its
online trading  platforms and increasing the overall customer base, which should
drive increases in trade volumes and revenues.

         Software Services had revenue of $2,595, a decrease of $42,195,  or 94%
from 2004 to 2005. The decrease is due to the diversion of LostView's  resources
from its  related  sources of revenue to further  enhance  RushGroup's  software
products.   We  believe  that  devoting  Software  Services'  resources  to  our
proprietary  software is a better  long-term use. When we launched the RushTrade
business  model and began our software  development  project in 2000, the intent
was to develop our own proprietary software for internal use, a software-trading
platform for the purpose of opening new  customer  accounts  subscribing  to the
RushTrade software and making  self-directed  trades.  However, as the RushTrade
software  applications  developed,  management  identified  other  opportunities
available in the marketplace to derive an additional revenue stream from sale or
licensing of "private label" versions of the software to other users.  From this
came the introduction of the RushGroup software services business model.

         Although  the  RushGroup  software  products  are  not  yet  ready  for
deployment, the additional revenue stream from RushGroup that management expects
to  develop  in the  future is for the sale and  licensing  of the  software  to
unrelated  third party entities.  We have had contact with several  institutions
and brokerages about the licensing  potential of various software  components or
applications  of the  RushTrade  platforms  when they are ready for  deployment.
While  there  remain  additional  development  requirements  and we  continue to
enhance and strengthen our various  software  applications,  management  expects
RushGroup  software  services  and  licensing  potential  to be a new  source of
revenue.

Expenses

         The following  table sets forth the  components of our expenses for the
periods indicated:

                                           Three Months Ended March 31,
                                         -------------------------------
                 Expense                      2005             2004
        --------------------------       --------------   --------------
        Investment Services                $    475,877     $    425,128
        Software Services                       363,103          367,064
        Corporate                               338,627          532,744
                                         --------------   --------------
                   Total                   $  1,177,607     $  1,324,936
                                         ==============   ==============

         Total expenses,  including interest expense, decreased $147,329 or 11%,
from 2004 to 2005.  Investment  Services  expenses  increased  12%,  or $50,749,
Software  Services  expenses  decreased  $3,961,  or 1%, and Corporate  expenses
decreased 36%, or $194,117.

         Investment  Services expenses increased  $50,749,  or 12%, from 2004 to
2005. In general, this is attributable to the increase in marketing related cost
associated  with  the  RushTrade  business  model  and an  increase  in  payroll
expenses.  In the first quarter of 2005, RushTrade  participated in a trade show
to  generate  further  awareness.  Trade  show  expenses,  in  combination  with
traditional advertising and marketing expenses,  increased marketing expenses by
approximately  $32,000 to $128,000 for the first  quarter of 2005 as compared to
$96,000 for the first quarter of 2004. Additionally,  for the three months ended
March 31, 2005  compensation  and benefits  expenses  increased by approximately
$16,000 from the same period in 2004. We are  continuing to execute our business
plan and, accordingly,  as the number of employees focused on sales,  marketing,
and business  development  activities has increased,  compensation  and benefits
expenses have increased.  We will continue to tightly control costs and expenses
and limit  expenditures  to necessary items to support the addition of sales and
sales resources.

                                       19
<PAGE>

           Software Services expenses  decreased 1% or $3,961 from 2004 to 2005.
Software  Services has ongoing  development  activity on the software to enhance
its use and ability to license its proprietary products to outside entities.  We
have not, however,  received any revenue from this source.  Software Services in
2005 consisted of the amortization and  capitalization  of software  development
costs and a full period of expenses  related to LostView as compared to only one
month  of  expenses  in  2004.  We  capitalized  software  development  costs of
approximately  $87,000 in 2005  compared to  approximately  $30,000 in 2004.  In
part, this  capitalization  of development cost explains why Software  Services'
expenses did not increase  from the addition of LostView  related  expenses.  As
overall  market  activity  and  acceptance  of the products  increases  and when
RushGroup begins to market to outside entities, costs will increase.

         Corporate  expenses decreased  $194,117,  or 36%, from 2004 to 2005. In
part,  this is due to costs related to the annual  shareholders'  meeting during
the first  quarter  of 2004 of  $32,000  which is being  held  during the second
quarter of 2005,  a decrease  in  accounting  fees of $6,000,  and a decrease in
interest  expense of  approximately  $64,000  due to the  conversion  of debt to
common stock during 2004 combined with an increase in penalties of approximately
$19,000  for  the  late  payment  of  payroll  taxes.  Additionally,  legal  and
settlement  expenses  decreased  for the three  months  ended  March 31, 2005 by
approximately $111,000 in comparison to the same period in 2004.

Net income (loss)

         The following  table sets forth the components of our net income (loss)
for the periods indicated:

                                           Three Months Ended March 31,
                                         -------------------------------
            Net Income (Loss)                 2005             2004
        --------------------------       --------------   --------------
        Investment Services                $      7,144     $     93,726
        Software Services                      (360,508)        (322,274)
        Corporate                              (332,218)        (522,607)
                                         --------------   --------------
                   Total                   $   (685,582)    $   (751,155)
                                         ==============   ==============

         Net losses decreased $65,573,  or 9%, from 2004 to 2005. The net income
from Investment  Services  decreased  86,582 or 92% from 2004 to 2005.  This, in
part, is due to more aggressive marketing undertaken during the first quarter of
2005  combined  with the results of less  aggressive  marketing  in 2004,  which
limited  revenue  growth for the three months  ending  March 31, 2005.  Software
Services  net loss  increased  $38,234,  or 12% from 2004 to 2005,  which is, in
part, due to the increased  focus on the  development  of  RushGroup's  software
products  instead of focusing on LostView's  customer  base.  Corporate net loss
decreased  from  $522,607 to $332,218.  The  decrease in  Corporate  net loss is
partially due to lower legal and settlement expenses during the first quarter of
2005 of approximately  $111,000,  $32,000 for the annual  shareholders'  meeting
held  during the first  quarter  in 2004  which is being held  during the second
quarter in 2005,  and  approximately  $64,000 less interest  expense  during the
three months  ending  March 31, 2005  compared to the same period in 2004 due to
the conversion of debt to common stock during 2004.

Liquidity

         Cash  Flows  from  Operating  Activities  - We  incurred  a net loss of
$685,582 for the three months ended March 31, 2005. This amount was adjusted for
non-cash expenses totaling $272,469,  as well as an increase in accrued expenses
and other liabilities of $23,414,  an increase in accrued payroll tax obligation
of  $138,138,  a decrease  in accounts  receivable  of $13,608 and a decrease in
other assets of $14,519 and offset by a decrease in accounts  payable of $43,469
and by an increase in prepaid expenses and other current assets of $17,876; thus
yielding a net cash flow used in operating activities of $284,779. Our operating
liabilities  increased  primarily  due to our lack of available  cash to pay our
payroll tax  obligations  in the first  quarter of 2005.  We believe  that as we
continue to execute our business plan and if we are able to increase our current
revenue growth rate, we have the necessary  infrastructure  to support  customer
accounts that will enable us to become cash flow positive in the fourth  quarter
of 2005. Our operating margins are such that with revenue growth we will be able
to meet fixed  costs and our current  customer  support  levels  will  support a
profitable operation.

         We incurred a net loss of $751,155 for the three months ended March 31,
2004. This amount was adjusted for non-cash expenses totaling $330,085,  as well
as an  increase  in accrued  expenses  and other  liabilities  of  $149,668,  an
increase in accounts  payable of $13,454 and an increase in accrued  payroll tax
obligation  of $76,953  and offset by an increase  in  accounts  receivable  and
prepaid  expenses and other current assets of $22,827;  thus yielding a net cash
flow used in operating activities of $203,822.

                                       20
<PAGE>

         Cash  Flows From  Investing  Activities  - Cash flow used in  investing
activities  during the three  months ended March 31, 2005 was  $113,360,  due to
capitalizing $87,295 in development costs related to the RushTrade direct access
software and purchasing various fixed assets for $26,065.

         Cash flow used in  investing  activities  during the three months ended
March 31, 2004 was $31,250,  due to  capitalizing  $30,018 in development  costs
related to the RushTrade direct access software, purchasing various fixed assets
for $5,678  offset by cash  acquired in the  acquisition  of  LostView  totaling
$4,446.

         Cash Flows from  Financing  Activities  - During the three months ended
March 31,  2005,  we raised  $353,200  from the sale of common  stock and common
stock warrants.

         During the three months ended March 31, 2004,  we raised  $175,000 from
the sale of common stock,  $43,000 from the sale of the Bonds and paid $5,065 as
payments on notes.

         The accompanying  financial statements have been prepared assuming that
we will continue as a going  concern.  At March 31, 2005,  we had  $2,994,753 in
current  liabilities,  and current  assets of $433,406.  Also, we incurred a net
loss of $685,582  during the three months ended March 31, 2005 and $2,496,637 in
2004.  Although  we  believe  that we will be able  to  continue  to  raise  the
necessary  funds  until we reach a  sustainable  level of  profitability,  these
matters  raise  substantial  doubt  about our  ability  to  continue  as a going
concern.  The  financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.

         We have received  minimal revenue from licensing our software  products
and services to outside entities and do not expect any additional revenues above
current levels until the last quarter of 2005. Due to our lack of resources,  we
have been limited to only  preliminary  marketing  efforts.  If we are unable to
successfully  market our products to outside entities it will severely  restrict
our revenue growth, profitability and liquidity, and could impact our ability to
continue as a going concern.

         We are  presently  engaged in  several  legal  proceedings,  more fully
described  on page 24,  which  could  have an adverse  effect on our  ability to
continue as a going  concern if the outcomes are  unfavorable.  The  outstanding
claims are in excess of $250,000.  We would be unable to pay the claims in total
in the short term.

         We have been unable to meet many of our obligations as they have become
due. We have two convertible notes due to a related party totaling $185,000 that
are past due. We are in discussion with the holder to repay,  and we have agreed
to repay this note. Two additional  notes  totaling  $200,000  became due in the
first quarter of 2005 and two additional notes totaling $100,000 will become due
in the second  quarter of 2005.  We have been  negotiating  with the  holders to
extend  these  notes.  Failure to negotiate  repayment  or  conversion  on terms
favorable to us will severely and adversely affect our liquidity.

         We have an  estimated  federal  and state  payroll  tax  obligation  of
$580,835 at March 31, 2005. We have estimated this  obligation to be the amounts
of tax  withheld  from  employees  and the employer  portion of Social  Security
Federal Tax  Obligation  for the second and fourth  quarters  of 2003,  all four
quarters of 2004 and a portion of the taxes due for the first quarter of 2005 in
addition  to an  estimated  accrual  for  interest  and  penalties.  There is no
obligation  outstanding  for the first and third  quarters  2003, as these taxes
have been  submitted and the  remaining  taxes due for the first quarter of 2005
were  submitted  subsequent  to period end but were an  obligation  at March 31,
2005.

         We  have  identified  vendors  that  are  critical  to  our  day-to-day
operations.  For those we have attempted to pay for their services within ninety
days and for RushTrade within 45 days. If we are unable to maintain this payment
schedule,  we risk  losing  valuable  services  that could  limit our ability to
service new and existing  customers.  This could severely restrict our continued
revenue growth and prevent us from reaching profitability.

         There  is a large  group  of  vendors,  not  affecting  our  day-to-day
operations, which have not been paid and are severely past due. If these vendors
were to initiate  legal  proceedings,  it would divert our attention from day to
day  operations  and require an  allocation of resources to defend the action or
attempt to settle these obligations.

         We have made it a priority to pay for goods and  services  necessary to
operate our  business in a timely  manner.  When we have been able to  negotiate
settlements  on past due  obligations  on terms  that we have  determined  to be
favorable to us, we have made it a priority to pay those.  We have not made it a
priority to make payments to related parties.

                                       21
<PAGE>

Forward-looking statements

          Certain  statements  contained in this 10-QSB Report and other written
material and oral statements made from time to time by us do not relate strictly
to historical or current facts.  As such,  they are considered  "forward-looking
statements"  that provide  current  expectations  or forecasts of future events.
Such statements are typically  characterized  by terminology  such as "believe,"
"anticipate,"   "should,"   "intend,"  "plan,"  "will,"  "expect,"   "estimate,"
"project,"  "strategy" and similar expressions.  Our forward-looking  statements
generally  relate to the  prospects  for future sales of our  products,  and the
success of our strategic  corporate  relationships.  These  statements are based
upon  assumptions  and  assessments  made  by our  management  in  light  of its
experience and its perception of historical trends, current conditions, expected
future developments and other factors our management believes to be appropriate.
These  forward-looking   statements  are  subject  to  a  number  of  risks  and
uncertainties,  including  the  following:  our  ability to  achieve  profitable
operations and to maintain  sufficient cash to operate our business and meet our
liquidity  requirements;  our ability to obtain financing, if required, on terms
acceptable  to us, if at all;  the  success  of our  research  and  development;
competitive   developments  affecting  our  current  products;  our  ability  to
successfully  attract  strategic  partners  and to market both new and  existing
products;  exposure  to  lawsuits  and  regulatory  proceedings;  our ability to
protect our intellectual  property;  governmental laws and regulations affecting
operations; our ability to identify and complete diversification  opportunities;
and  the  impact  of   acquisitions,   divestitures,   restructurings,   product
withdrawals  and other unusual items.  Except as required by applicable law, the
Company  undertakes  no  obligation  to update any  forward-looking  statements,
whether as a result of new information, future events or otherwise.


Item 3.  Controls and Procedures

     (a)  Within the 90-day period prior to the date of this report,  we carried
          out an evaluation, under the supervision and with the participation of
          our  management,  including  the  Chief  Executive  Officer  and Chief
          Financial Officer, of the effectiveness of the design and operation of
          our disclosure  controls and procedures pursuant to Rule 13a-14 of the
          Securities  Exchange Act of 1934 (the "Exchange Act"). Based upon that
          evaluation,  the Chief Executive  officer and Chief Financial  Officer
          concluded that our disclosure controls and procedures are effective in
          timely alerting them to material  information  relating to the Company
          (including it  consolidated  subsidiaries)  required to be included in
          our Exchange Act filings.

     (b)  There have been no significant  changes in our internal controls or in
          other factors,  which could  significantly  affect  internal  controls
          subsequent to the date we carried out our evaluation.





                                       22
<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         The Company and its subsidiaries  are engaged in legal  proceedings and
arbitrations  from time to time.  Management  believes some of these proceedings
could have a material  effect upon the operations or financial  condition of the
Company if the Company is unsuccessful in defending against the actions.

         Company  Proceedings.  On June 24,  2003,  in Sumner  Group Inc.  d/b/a
Datamax Office Systems Leasing Division v. Rushmore  Financial Group;  Cause No.
CC-03-7400-b;  County Court at Law No. 2, Dallas County,  Texas, a former vendor
filed a claim in the  Dallas  County  Court  claiming  that we failed to pay for
services  rendered  on a  copier  in the  amount  of  $39,710.  We have  filed a
counterclaim  alleging  overcharges  and  improper  installation  of a  software
product causing us incalculable harm. This matter was  unsuccessfully  mediated,
and a jury trial is set for April 25,  2005.  We believe  the range of  possible
loss is up to $55,000.  We have not  recorded a provision  for this matter as we
intend to  vigorously  defend these  allegations  and believe the payment is not
probable.

         On  December  27,  2004,  in Waymark  Internet  Services,  Inc. v. Rush
Financial  Technologies,  Inc.; Cause No.  04-12776-K;  192nd Judicial  District
Court,  Dallas County,  Texas,  a vendor filed a claim in Dallas  District Court
claiming a total of $52,870 in damages.  We dispute the amount of the claims and
plan to  vigorously  defend  ourselves  in this  matter.  At March  31,  2005 we
estimate  our  liability  for  this  claim  to  be  approximately  $11,000,  and
accordingly  have  recorded a  liability  for this  amount.  We are in the early
stages of discovery and a trial setting has not been set.

         RSC was  subject  to a joint  NASD and SEC  examination  in the  second
quarter of 2002.  As a result of this  examination  the  Company  has  accrued a
liability of $25,000 at March 31, 2005 to account for a possible NASD fine. This
is management's best estimate of the ultimate liability to RSC.

         RSC Subsidiary  Proceedings.  On April 17, 2003, in E.F. (Mickey) Long,
II, et al. v. Rushmore Financial Group, Inc.,  Rushmore  Securities  Corporation
and D.M. "Rusty" Moore;  NASD Dispute  Resolution  Arbitration No.  03-01451,  a
group of  former  securities  representatives  of RSC  filed  for  NASD  Dispute
Resolution,  naming  the  Company  and  Mr.  Moore  as  defendants.  The  former
representatives  are claiming  $178,288 in commissions.  At December 31, 2003 we
estimated  our  liability to be $43,000 and recorded an accrual for this amount.
In 2004 we  negotiated a settlement  with the  representatives  in the amount of
$98,750 but RSC has been unable to pay this claim.  Since no payments  have been
made RSC  became  subject  to an  agreed  arbitration  award in the total sum of
$129,425. The entire liability of $129,425 has been accrued at March 31, 2005.

Item 2.  Changes in Securities and Use of Proceeds

         During the first quarter of 2005 we issued 1,250 shares of common stock
to employees as compensation,  holders of $140,000 of convertible  bonds elected
to convert their bonds into 933,333  shares of common stock,  750,000  shares of
common stock were issued for the purchase of LostView  Development  Corporation,
12,498  shares of common  stock were  issued as  directors  fees,  20,000  stock
options were  exercised  for proceeds of $3,200 and $39,687 of accrued  interest
was  converted  into 264,580  shares of common  stock.  Additionally,  1,458,333
shares of common stock and an equal number of warrants  were issued for proceeds
of approximately $350,000.

Item 3.  Defaults Upon Senior Securities

         None.

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

         None.

Item 5.  Other Information

         None.


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<PAGE>

Item 6.  Exhibits and Reports on Form 8K

     a.  Exhibits.

         Exhibit 3.1.1 Articles of Incorporation, as amended.

         Exhibit 31.1  Certification of Chief Executive Officer Pursuant to Rule
         13a-14(a) or Rule 15d-14(a).

         Exhibit 31.2  Certification of Chief Financial Officer Pursuant to Rule
         13a-14(a) or Rule 15d-14(a).

         Exhibit 32.1  Certification of Chief Executive Officer Pursuant to Rule
         13a-14(b) or Rule  15d-14(b)  and 18 U.S.C.  Section  1350,  as Adopted
         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         Exhibit 32.2  Certification of Chief Financial Officer Pursuant to Rule
         13a-14(b) or Rule  15d-14(b)  and 18 U.S.C.  Section  1350,  as Adopted
         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

     b.  Reports on Form 8-K.

         On January 5, 2005,  Rush Financial  Technologies,  Inc. issued a press
         release  announcing  its trade volume  report for the month of December
         2004.

         On January 19, 2005, Rush Financial  Technologies,  Inc. issued a press
         release   announcing  the  release  of  its  RushTrade  Advanced  Order
         Management  System (OMS),  which includes One Cancels Other (OCO),  One
         Triggers Other (OTO), and a number of added conditional order types.

         On February 7, 2005, Rush Financial  Technologies,  Inc. issued a press
         release  announcing  its trade  volume  report for the month of January
         2005.

         On March 3, 2005,  Rush  Financial  Technologies,  Inc.  issued a press
         release  announcing  its trade volume  report for the month of February
         2005.

         On March 29, 2005, Rush Financial Technologies, Inc. closed the sale of
         an  additional  1,458,333  shares  of  common  stock  to an  investment
         partnership,  without commission, for a cash price of $ 0.24 per share.
         Such  issuance was exempt from  registration  under Section 4(2) of the
         Securities Act of 1933. On March 30, 2005, Rush Financial Technologies,
         Inc.  issued a news release  announcing it has raised  $350,000 for its
         working  capital  requirements  through  the  issuance of shares of its
         restricted common stock and warrants.  The Company also announced a new
         co-location  facility  designed to provide  redundancy  and  additional
         security for the Company's network environment.





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<PAGE>

SIGNATURE

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

                                            Rush Financial Technologies, Inc.

Dated: May 13, 2005                 By       /s/ Dewey M. Moore, Jr.
                                            -----------------------------------
                                            Dewey M. Moore, Jr.
                                            Chief Executive Officer

Dated: May 13, 2005                 By       /s/ Randy Rutledge
                                            -----------------------------------
                                            Randy Rutledge
                                            Chief Financial Officer
















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