UNITED STATES
--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-QSB/A

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

                  For the Quarterly Period Ended June 30, 2002

                                       OR

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

       For the transition Period from ________________ to ________________

                        Commission file number 000-24057

                         Rushmore Financial Group, 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 filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by the court.

                              Yes ______ No ______

         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 June 30, 2002:  7,901,684  shares of common stock,  $0.01
par value.

         Transitional Small Business Disclosure Format;

                              Yes ______ No XXX


                                                                               1
<PAGE>

PART I.    FINANCIAL INFORMATION
Item 1.    Financial Statements















                                                                               2
<PAGE>
<TABLE>
<CAPTION>

                 RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                    (Unaudited)
                                                                      June 30,      December 31,
                             ASSETS                                     2002            2001
                                                                    ------------    ------------
<S>                                                                 <C>             <C>
Cash and cash equivalents                                           $       --      $    261,761
Accounts receivable                                                      170,737         338,747
Prepaid expenses and deposits                                            489,724         227,449
Developed software, at cost                                            2,076,417       1,739,257
Property and equipment, net of accumulated depreciation                  317,368         413,598
Goodwill, net                                                            211,905       1,253,932
Deferred financing fees                                                   41,569            --
                                                                    ------------    ------------
                   Total assets                                     $  3,307,720    $  4,234,744
                                                                    ============    ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
          Bank overdraft                                            $      3,857    $       --
          Accounts payable                                             1,201,850       1,012,529
          Notes payable                                                  416,992         150,154
          Liabilities acquired in 2001 acquisition                       349,318         375,812
          Accrued expenses and other liabilities                         169,946         136,751
                                                                    ------------    ------------
                   Total liabilities                                   2,141,963       1,675,246
                                                                    ------------    ------------

Shareholders' equity:
          Preferred stock - cumulative; $10 par value; 14,063
             shares issued and outstanding                               140,630         140,630
          Preferred stock - convertible cumulative; $10 par
             value; 86,480 shares issued and outstanding                 864,800         864,800
          Preferred stock issuances pending                              100,000            --
          Common stock - $0.01 par value; 10,000,000 shares
             authorized;8,588,562 shares issued at June 30, 2002;
             7,229,633 shares issued at December 31, 2001                 85,886          72,296
          Common stock subscriptions receivable                           (3,277)         (4,118)
          Additional paid in capital                                  12,644,684      12,154,388
          Treasury stock, at cost - 686,878 shares                      (421,022)       (421,022)
          Accumulated deficit                                        (12,245,944)    (10,247,476)
                                                                    ------------    ------------
                   Total shareholders' equity                          1,165,757       2,559,498
                                                                    ------------    ------------
                   Total liabilities and shareholders' equity       $  3,307,720    $  4,234,744
                                                                    ============    ============

</TABLE>

           See accompanying notes to consolidated financial statements

                                                                               3
<PAGE>
<TABLE>
<CAPTION>

                 RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   For the three and six months ended June 30,
                                   (unaudited)

                                                   For the Three Months           For the Six Months
                                                       Ended June 30,                Ended June 30,
                                                --------------------------    --------------------------
                                                    2002           2001           2002           2001
                                                -----------    -----------    -----------    -----------
<S>                                             <C>            <C>            <C>            <C>
 Revenue:
         Direct access brokerage services
              Commissions and fees              $   266,598    $    72,040    $   499,992    $   124,674
         Retail brokerage services
              Commissions and fees                1,337,510      2,308,034      2,737,480      3,693,446
         Other revenue                                6,614         14,211         19,276         37,062
                                                -----------    -----------    -----------    -----------
              Total revenue                       1,610,722      2,394,285      3,256,748      3,855,182
                                                -----------    -----------    -----------    -----------
 Expenses:
         Direct access brokerage services
              Commission expense                    211,006          1,009        394,651          2,769
              Other direct access brokerage
                 services expenses                  155,620        145,028        300,972        249,716
         Retail brokerage services
              Commission expense                    927,941      1,714,783      1,989,978      2,664,895
              Other retail brokerage services
                 expenses                            20,175        101,677         40,629        191,889
         General and administrative                 863,732        921,297      1,346,358      1,983,384
                                                -----------    -----------    -----------    -----------
               Total expenses                     2,178,474      2,883,794      4,072,588      5,092,653
                                                -----------    -----------    -----------    -----------
 Operating loss                                    (567,752)      (489,509)      (815,840)    (1,237,471)
 Other expense:
        Write off of impaired goodwill            1,042,028           --        1,042,028           --
        Depreciation and amortization                58,553         44,284        117,130         96,250
        Interest expense                             15,593         12,403         23,470         19,833
                                                -----------    -----------    -----------    -----------
 Loss from continuing operations                 (1,683,926)      (546,196)      (956,441)    (1,353,554)
                                                -----------    -----------    -----------    -----------

 Loss from discontinued operations                     --          (41,469)          --          (95,743)

                                                -----------    -----------    -----------    -----------
               Net loss                         ($1,683,926)   ($  587,665)   ($1,998,468)   ($1,449,297)
                                                ===========    ===========    ===========    ===========

 Basic and diluted loss per share of
     common stock, continuing operations        ($     0.21)   ($     0.10)   ($     0.27)   ($     0.25)
                                                ===========    ===========    ===========    ===========
 Basic and diluted loss per share of
     common stock, discontinued operations      $      0.00    ($     0.01)   $      0.00    ($     0.02)
                                                ===========    ===========    ===========    ===========
 Basic and diluted net loss per share of
     common stock                               ($     0.21)   ($     0.11)   ($     0.27)   ($     0.27)
                                                ===========    ===========    ===========    ===========

Weighted average common shares
       outstanding                                7,901,684      5,664,538      7,306,766      5,411,793
                                                ===========    ===========    ===========    ===========

</TABLE>

           See accompanying notes to consolidated financial statements

                                                                               4
<PAGE>
<TABLE>
<CAPTION>

                 RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        For the six months ended June 30,
                                   (unaudited)

                                                                             2002           2001
                                                                         -----------    -----------
<S>                                                                      <C>            <C>
Cash flows from operating activities:
            Loss from continuing operations                              ($1,998,468)   ($1,353,554)
            Adjustments to reconcile loss from continuing
            operations to net cash used in operating activities
                Common stock issued for compensation and
                    expenses                                                  31,335           --
                Fair value of common stock options issued for
                    services                                                 167,491           --
                Write off of impaired goodwill                             1,042,028           --
                Depreciation and amortization                                117,130         96,250
                Change in assets and liabilities, net of effect of the
                    2001 acquisition:
                (Increase) decrease in assets:
                           Accounts receivable                               168,009        (14,596)
                           Prepaid expenses and deposits                      39,853        (91,956)
                Increase (decrease) in liabilities:
                           Accrued expenses and other liabilities            196,017        131,920
                                                                         -----------    -----------
Net cash used in operating activities-continuing operations                 (236,605)    (1,231,936)
                                                                         -----------    -----------

Cash flows from investing activities:
            Bank overdraft                                                     3,857           --
            Purchase of equipment                                            (20,900)       (60,594)
            Capitalization of software development costs                    (337,160)      (626,174)
            Cash received on the 2001 acquisition                               --           11,047
                                                                         -----------    -----------
Net cash used in investing activities                                       (354,203)      (675,721)
                                                                         -----------    -----------

Cash flows from financing activities:
            Proceeds from sale of Common Stock                                   390        498,165
            Proceeds from sale of Preferred Stock                            100,000        355,929
            Preferred Stock dividends paid                                   (38,184)       (21,538)
            Payments on notes payable                                        (33,160)       (60,543)
            Proceeds from notes payable                                      300,000        303,456
                                                                         -----------    -----------
Net cash provided by financing activities                                    329,046      1,075,469
                                                                         -----------    -----------

Net cash used in continuing operations                                      (261,762)      (832,188)

Net cash provided by discontinued operations                                    --             --
                                                                         -----------    -----------

Net decrease in cash and cash equivalents                                   (261,762)      (832,188)
Cash and cash equivalents at beginning of period                             261,762      1,218,317
                                                                         -----------    -----------
Cash and cash equivalents at end of period                                      --      $   386,129
                                                                         ===========    ===========

Supplemental Disclosure of Cash Flow Information:
            Cash paid for interest                                      ($     6,645)  ($    19,833)
            Cash paid for income taxes                                   $      --      $      --
Supplemental Disclosure of Non-Cash Information:
            Warrants issued in connection with obtaining debt
                 financing                                               $    41,569    $      --
            Common stock issued as dividends on preferred stock          $     2,126    $      --
            Common stock issued in the 2001 acquisition                  $      --      $      --
            Common stock issued in the OTA client acquisition            $   300,000    $      --

</TABLE>

           See accompanying notes to consolidated financial statements
                                                                               5
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation

     The  financial  statements  included  herein have been prepared by Rushmore
Financial Group, Inc. ("Company" or "RFGI") 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 the Company believes 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 the Company's  financial  position,  results of operations and changes in
financial position for such interim period.  These interim financial  statements
should be read in conjunction  with the Company's  financial  statements and the
notes thereto as of December 31, 2001,  included in the Company's  annual report
on Form 10-KSB for the year ended December 31, 2001.

     The accompanying  financial statements have been prepared assuming that the
Company will  continue as a going  concern.  At June 30,  2002,  the Company had
$2,141,963 in liabilities,  no cash and accounts  receivable of $170,737.  Also,
the Company had net losses from  continuing  operations  of  $1,057,635 in 2000,
$2,203,896 in 2001, and $1,998,468 in the first six months of 2002. Although the
Company  believes that it will be able to continue to raise the necessary  funds
until it reaches a  sustainable  level of  profitability,  these  matters  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.

     The  Company  has  taken  several  steps  to  increase  cash  by the use of
borrowings and equity. In the second quarter of 2002 the Company raised $100,000
through  the  sale of  convertible  debentures  and  $35,000  from  the  sale of
preferred stock. The Company will attempt to raise additional  capital through a
Senior Secured  Convertible Bond Offering whereby the bonds will be secured by a
lien on RushTrade's proprietary software and other technology assets.

     The Company has also  undergone an extensive  internal  reorganization  and
reduction  of  staff  to  adjust  to the  current  level  of  activity  and  has
implemented  additional  steps  to more  closely  monitor  expenses.  Additional
marketing efforts are being implemented to enhance revenue and take advantage of
the RushTrade software products. The RushTrade products were released on July 1,
2002, and have so far generated only minimal revenue.

     Rushmore  Insurance  Services,   Incorporated  ("Rushmore  Agency")  is  an
insurance agency and an affiliate of the Company by means of service agreements.
The Company has entered into an  administrative  services  agreement whereby net
revenues and expenses are charged via a management fee to the Company.  Rushmore
Agency has been consolidated in the Retail Brokerage segment of the accompanying
consolidated financial statements.


2.   Industry Segment Information

     The  Company's  assets,  revenue,  and expenses are  attributable  to three
identifiable  business  segments:   Direct  Access  Brokerage  Services,  Retail
Brokerage Services, and Corporate.

                                                                               6
<PAGE>
<TABLE>
<CAPTION>

     The   Direct   Access   Brokerage   Services    division,    operating   as
"RushTrade(TM)",  has been  developed  to meet the needs of the  active  on-line
investor.  RushTrade  offers two products to meet the needs of the active online
investor,  RushTrade Direct,  our Level I browser-based  product,  and RushTrade
Direct Pro, our Level II software-based  product. The RushTrade software and its
associated Penson Back Office Administrative Tool will attempt to derive various
additional  revenue  streams in the form of licensing  fees and  royalties  from
expected licensing arrangements.

     The  Retail  Brokerage  Services  division  consists  of retail  securities
brokerage  services,  mutual fund  distribution,  variable  life  insurance  and
annuities  sales and other  financial  services  offered by Rushmore  Securities
Corporation ("Rushmore Securities"). In addition, Rushmore Investment Management
Corporation  ("Rushmore  Management")  provides  fee-based  investment  advisory
services and portfolio management.  The Company's insurance services business is
conducted  through its affiliated  agency,  Rushmore  Insurance  Services,  Inc.
("Rushmore Agency").

     The Corporate  division  includes all business  assets and  activities  not
directly related or allocated to the other two divisions.

     The  following   summarizes  the  Company's   identifiable  assets, capital
expenditures,  and depreciation and  amoritization by industry segment as of the
dates indicated:
                                               June 30,
                                        -----------------------
                Identifiable Assets        2002         2001
              -----------------------   ----------   ----------
              Direct Access Brokerage   $2,280,235   $1,034,442
              Retail Brokerage             360,288    2,623,578
              Corporate                    667,197      822,322
                                        ----------   ----------
                         Total          $3,307,720   $4,480,342
                                        ==========   ==========

                                               June 30,
                                        -----------------------
                Capital Expenditures       2002         2001
              -----------------------   ----------   ----------
              Direct Access Brokerage   $  350,901   $  646,855
              Retail Brokerage               4,772       20,681
              Corporate                      2,386       10,341
                                        ----------   ----------
                         Total          $  358,060   $  677,878
                                        ==========   ==========

                                               June 30,
                  Depreciation and      -----------------------
                    Amortization           2002         2001
              -----------------------   ----------   ----------
              Direct Access Brokerage   $   44,997   $   17,256
              Retail Brokerage              27,124       26,951
              Corporate                     97,382       76,117
                                        ----------   ----------
                         Total          $  169,503   $  120,324
                                        ==========   ==========

     The following  summarizes the Company's industry segment operating data for
the periods indicated:

                          Three Months Ended June 30,    Six Months Ended June 30,
                          ---------------------------   ---------------------------
        Revenues              2002           2001           2002           2001
-----------------------   ------------   ------------   ------------   ------------
<S>                       <C>            <C>            <C>            <C>
Direct Access Brokerage   $    266,598   $     72,040   $    499,992   $    124,674
Retail Brokerage             1,344,124      2,308,034      2,737,748      3,693,446
Corporate                         --           14,211              8         37,062
                          ------------   ------------   ------------   ------------
            Total         $  1,610,722   $  2,394,285   $  3,256,748   $  3,855,182
                          ============   ============   ============   ============

                          Three Months Ended June 30,    Six Months Ended June 30,
                          ---------------------------   ---------------------------
        Expenses              2002           2001           2002           2001
-----------------------   ------------   ------------   ------------   ------------
Direct Access Brokerage   $    439,780   $    253,034   $    835,786   $    465,235
Retail Brokerage             2,393,431      2,281,079      3,683,924      3,854,598
Corporate                      461,437        406,368        735,506        888,903
                          ------------   ------------   ------------   ------------
            Total         $  3,294,648   $  2,940,481   $  5,255,216   $  5,208,736
                          ============   ============   ============   ============

                                                                               7
<PAGE>

                          Three Months Ended June 30,    Six Months Ended June 30,
   Income (Loss) from     ---------------------------   ---------------------------
 Continuing Operations        2002           2001           2002           2001
-----------------------   ------------   ------------   ------------   ------------
Direct Access Brokerage      ($173,182)     ($180,994)     ($335,794)     ($340,561)
Retail Brokerage            (1,050,307)        26,955       (927,176)      (161,152)
Corporate                     (461,437)      (392,157)      (735,498)      (851,841)
                          ------------   ------------   ------------   ------------
            Total          ($1,683,926)     ($546,196)   ($1,998,468)   ($1,353,554)
                          ============   ============   ============   ============

</TABLE>

3.   Capitalized Software Development Costs

     The Company  capitalizes  certain costs  associated with the development of
the  RushTrade  software  products.  During  the first six  months of 2002,  the
Company  capitalized  $337,160 in costs  versus  $626,174 for the same period in
2001. As of June 30, 2002, the total of all  capitalized  costs was  $2,076,417.
Upon release of each of the RushTrade products or modules, costs related to that
product  or module  will be  charged  to  operating  expenses  instead  of being
capitalized.  Additionally,  all  presently  capitalized  costs  relating  to  a
released  product or module  will be  amortized  by the  greater of the  revenue
method or the  straight-line  method over a three-year  period. On July 1, 2002,
the Company  released its RushTrade Direct and RushTrade Direct Pro products and
began  amortizing  the  capitalized   development  cost  associated  with  these
products.

4.   Recent Transactions

     In March 2002, the Company entered into an Agreement, as an amendment to an
earlier  revenue-sharing  agreement,  with NewportX.com,  an affiliate of Online
Trading  Academy of Irvine,  CA.  ("OTA") to acquire a block of up to 150 active
trader  accounts which are to be referred or directed to RushTrade over the next
six months in exchange for 1,200,000  shares of RFGI common stock.  These shares
were issued  during March 2002 and the Company has  recorded a prepaid  asset of
$300,000,  the fair  value of the stock on the date of  issuance.  As the active
trader accounts are received and certified,  the Company will  reclassify  these
amounts to an intangible  asset.  As of June 30, 2002,  no trader  accounts have
been certified. OTA is an education provider and conducts classroom training for
those  interested  in day trading or other active  investors who seek the latest
investment  tools and  techniques  in the active  trader  market.  RushTrade has
entered  into a  strategic  relationship  with OTA as an  industry  partner  for
training  and  education   whereby  OTA  will  conduct  training  classes  using
RushTrade's Direct Pro software trading platform.

5.   Subsequent Events

     The Company and Empire Financial Holding Company,  Inc.  ("Empire") entered
into an agreement in June 2002 where Empire  would  purchase  certain  assets of
Rushmore Securities Corporation,  a wholly owned subsidiary of the Company. This
transaction  was  completed  on August 9, 2002 with the transfer of $79,464 from
Empire to the Company.  The total  consideration for the sale of these assets is
25% of the gross revenues generated by these assets for a 12-month period.  This
consideration, which is subject to adjustment, has been estimated to be $211,905
based on actual prior revenues from these assets. The Company expects to receive
an  additional  $26,488 in cash  within 90 days and the  remainder,  $105,953 in
either  cash or  restricted  stock of Empire  within 180 days of the close.  The
purchase price of $211,905 is substantially  less than the carrying value of the
assets.  As a result,  during the second  quarter of 2002, the Company wrote off
$1,042,028  of goodwill to state it at its  estimated  net  realizable  value of
$211,905 at June 30, 2002.

6.   Discontinued Operations

     In September 2001 the Company entered into an agreement,  with an effective
date of August 1, 2001, to sell Rushmore  Investment  Advisors,  Inc. ("Rushmore
Advisors") to Mr. John Vann in exchange for the redemption and  cancellation  of
597,405 shares of the Company's  common stock plus a note for $200,000.  As part
of the sale,  Mr. Vann also  retained the right to prepay his  existing  note of
$280,319 to the Company at a discount.  Both notes were subsequently  discounted
to a total of  $250,000  and  paid.  The sale,  including  the  discounted  note
payoffs,  resulted in a one-time non-operating loss of approximately  $2,900,000
in  September  2001.  The  financial  data  relating  to  Rushmore  Advisors  is
classified as discontinued operations for all periods presented.

                                                                               8
<PAGE>
<TABLE>
<CAPTION>

7.   Reclassification

     Certain  2001  balances  have  been  reclassified  to  conform  to the 2002
presentation.

8.   Earnings (Loss) Per Share

     Earnings (loss) per share for the periods  indicated are computed using the
following information:


                                Three months ended June 30,      Six months ended June 30,
    Loss From Continuing       ----------------------------    ----------------------------
         Operations                2002            2001            2002            2001
----------------------------   ------------    ------------    ------------    ------------
<S>                            <C>             <C>             <C>             <C>
Loss from continuing
operations                     ($ 1,683,926)   ($   546,196)   ($ 1,998,468)   ($ 1,353,554)
Dividends on preferred stock        (18,252)        (10,769)        (40,310)        (21,538)
                               ------------    ------------    ------------    ------------
Loss from continuing
operations applicable to
common shareholders            ($ 1,702,178)   ($   556,965)   ($ 2,036,652)   ($ 1,375,092)
                               ============    ============    ============    ============

</TABLE>

9.   Goodwill

     In July 2001 the FASB issued  Statement of Financial  Accounting  Standards
No. 142 (SFAS 142), Goodwill and Intangible Assets, which revises the accounting
for  purchased  goodwill and  intangible  assets.  Under SFAS 142,  goodwill and
intangible assets with indefinite lives will no longer be amortized, but will be
tested  for  impairment  annually,  and  also  in  the  event  of an  impairment
indicator.  SFAS 142 is effective for fiscal years  beginning after December 15,
2001. The elimination of the  amortization of goodwill upon adoption of SFAS 142
is expected to reduce annual operating  expenses by approximately  $89,000.  The
Company adopted SFAS 142 on January 1, 2002.

     As  discussed  in Note 5,  during the second  quarter of 2002,  the Company
entered into an agreement to sell certain  assets,  which relate to the goodwill
recorded on the Company's books. As a result the Company wrote off $1,042,028 of
goodwill to state it at its  estimated  net  realizable  value of  $211,905  the
purchase price of the assets being sold.

10.  Deferred Financing Fees

     During the second quarter of 2002, the Company recorded deferred  financing
fees of  $41,569  that  represent  the  fair  value  of  warrants  issued  to an
individual that assisted the Company in obtaining  certain debt  financing.  The
deferred financing fees are amortized on a straight-line  basis over the term of
the related notes, which is three years.

11.  Convertible Notes Payable

     During the  current  quarter,  the  Company  issued two  convertible  notes
totaling  $100,000.  These notes bear  interest at 9% per annum,  principal  and
accrued interest payable in quarterly  installments  beginning October 15, 2002,
mature  April 1, 2005 and are  convertible  into  shares of common  stock at the
lesser of $0.25 per share or the average  closing  price of the common  stock on
its  principal  trading  market for the 30 trading days  preceding the notice of
conversion, but in no event less than $0.175 per share.

12.  Stock Options and Warrants

     During the current  quarter,  the Company granted  1,031,000 stock options.
100,001  options  were granted to  employees  for common stock as  compensation,
these options are exercisable at $0.16 per share;  expire in five years and vest
50% in six months and 100% after one year.  930,000  options  valued at $167,491
were granted to  non-employees  for services.  The options have exercise  prices
ranging from $0.22-$0.26 per share, expire in five years and vest immediately.

                                                                               9
<PAGE>

     Additionally,  during the  current  quarter,  the  Company  issued  200,000
warrants to  purchase  common  stock  valued at $41,569 to a  non-employee  as a
finders fee in  connection  with the Company  obtaining  debt  financing.  These
warrants have an exercise price of $0.25 per share and expire in five years. See
additional discussion in Note 10.


13.  Insurance Claims Payable

     During the second  quarter of 2002, the plan  administrator  of our partial
self-insured  program  notified  the Company  that the  Company had  outstanding
claims due to health care providers  totaling  $168,093.  The plan administrator
has been unable to provide the Company with  information  documenting the period
to  which  these  claims  relate.   The  Company  had  recorded  an  accrual  of
approximately  $60,000 related to these claims. The additional liability related
to these claims was recorded in the second quarter of 2002. As of June 30, 2002,
the Company has accrued this  liability in full along with an estimated  accrual
of $20,000 for future  funds that will be required to cover  additional  claims.
Insurance  claims payable  totaled  $188,093 at June 30, 2002. The  self-insured
plan was  terminated on May 31, 2002 and the Company's  employees  were enrolled
under a fully insured plan on June 1, 2002.


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

1.   Recent Development

     In March 2002 the Company's technology  development  subsidiary,  RushTrade
Software Services,  Inc. entered into a non-exclusive agreement with CentraTrade
Services,  Ltd.  of Houston  whereby  CentraTrade  would  become a licensee  and
distributor of RushTrade's  RushTrade  Direct and RushTrade  Direct Pro software
platforms to other NASD member  broker/dealers.  The Company expects to begin to
derive various  revenue streams in the form of licensing fees and royalties from
these expected licensing arrangements.

2.   RushTrade(TM)Direct Access Online Services Software Development

     RushTrade      Direct      Access      Online       Services--RushTrade.com
(http://www.rushtrade.com),   a  division  of  Rushmore  Securities,   has  been
developed to meet the needs of the active on-line investor. RushTrade offers its
clients  real-time  Level I and Level II investment  price quotes  combined with
direct  access to  Electronic  Communications  Networks  ("ECN"s)  and the major
Exchanges.  The RushTrade product was developed by RushTrade  Software Services,
Inc.,  and will be  distributed  through  RushTrade.com,  a division of Rushmore
Securities.  The RushTrade  product was released on July 1, 2002 and is expected
to provide various  additional revenue streams in the form of licensing fees and
royalties assuming these expected licensing arrangements materialize.

     RushTrade  offers  two  distinct  products  to meet the needs of the active
online  investor,  RushTrade  Direct,  our Level I  browser-based  product,  and
RushTrade Direct Pro, our Level II software-based product.

     RushTrade  Direct  attempts  to meet the needs of the  online  investor  by
delivering  real-time quotes and information,  RushTrade's Direct Access Routing
Technology  (DART(TM)),  and customer service provided by experienced registered
representatives.  This product is delivered to investors via the  Internet,  and
therefore is able to be accessed from virtually any computer with a web browser.

     RushTrade  Direct  Pro,  RushTrade's  proprietary  software-based  Level II
product,  attempts to meet the more sophisticated  on-line investors' demands by
providing the latest trading  technologies and tools available in an easy-to-use
trading system.  Significant features of the Level II product include streaming,
real-time Level II securities quotes,  news, charts,  research,  and RushTrades'
proprietary  Direct  Access  Routing  Technology  (DART(TM)).  DART(TM)  enables
investors  to route their orders  directly to the specific ECN or Exchange  with
the best market  price,  thus saving the  investor  time and money by  providing
improved trade execution  quality.  RushTrade  Direct Pro clients have access to
the same customer service support that all RushTrade Direct users receive.

     The RushTrade  products were released into various stages of testing during
2001-2002.  Beta testing began for RushTrade  Direct in July 2001.  Beta testing
for  RushTrade  Direct Pro began in  November  2001,  and again with  additional
features  in  February  2002.  Both  products  were  released  on July 1,  2002.
RushTrade's  Penson Back Office  Administrative  tool,  a module  necessary  for
licensing the software to other  broker/dealers  who have clearing  arrangements
with Penson  Financial,  is currently under  development,  and is expected to be
ready for beta testing in late 2002.  Final release of the module is expected to
occur no sooner than December 2002.


                                                                              10
<PAGE>

2.   Results of Continuing Operations

Three Months Ended June 30, 2002 and 2001

Revenues

The following table sets forth the components of the Company's  revenues for the
periods indicated:

                                       Three Months Ended June 30,
                                       ---------------------------
                    Revenues               2002          2001
             -----------------------   ------------   ------------
             Direct Access Brokerage   $    266,598   $     72,040
             Retail Brokerage             1,344,124      2,308,034
             Corporate                         --           14,211
                                       ------------   ------------
                         Total         $  1,610,722   $  2,394,285
                                       ============   ============

     Total revenue for the second quarter decreased $783,563,  or 33%, from 2001
to 2002.  This  decrease was  comprised  primarily of decreases of $963,910 from
Retail Brokerage  operations and $14,211 from corporate  revenues,  offset by an
increase of $194,558 in Direct Access Brokerage revenue.

     Direct Access Brokerage revenue increased  $194,558,  or 270%, from 2001 to
2002.  This  increase  was  primarily  the result of adding a new  trading  firm
customer  licensed in late December  2001.  The agreement with this trading firm
was terminated in July 2002 and thus we expect Direct Access  Brokerage  revenue
to decrease in the third quarter of 2002.

     Retail Brokerage revenue decreased $963,910, or 42%, from 2001 to 2002. The
decrease in revenue is primarily due to management's  decision to reposition its
retail  securities  brokerage and insurance  marketing  resources and efforts to
concentrate on the development and launch of its RushTrade direct access on-line
trading  system.  Overall  market  conditions  also  contributed  to the overall
decline in the Retail Brokerage revenue.

     Corporate  revenue  decreased  primarily  due to the  decrease  in interest
income from 2001 to 2002, as  interest-earning  assets such as  investments  and
notes receivable decreased.


Expenses

     The following table sets forth the components of the Company's expenses for
the periods indicated:

                                       Three Months Ended June 30,
                                       ---------------------------
                    Expenses               2002           2001
             -----------------------   ------------   ------------
             Direct Access Brokerage   $    439,780   $    253,034
             Retail Brokerage             2,393,431      2,281,079
             Corporate                      461,437        406,368
                                       ------------   ------------
                         Total         $  3,294,648   $  2,940,481
                                       ============   ============

     Total expenses  increased $354,167 or 12%, from 2001 to 2002. Direct Access
Brokerage  expenses  increased  $186,746,  Retail Brokerage  expenses  increased
$112,352 and corporate expenses increased $55,069.

     Direct Access Brokerage expenses increased  $186,746,  or 74%, from 2001 to
2002.  This increase is primarily due to commissions of $183,645 paid to the new
trading firm licensed in December 2001. The agreement with this trading firm was
terminated in July 2002 and thus we expect Direct Access  Brokerage  expenses to
decrease in the third quarter of 2002.

                                                                              11
<PAGE>

     Retail Brokerage  expenses  increased  $112,352,  or 5%, from 2001 to 2002.
This increase is the result of a write off of impaired  goodwill  related to the
Retail  Brokerage  assets of $1,042,028  offset by a decrease in expenses due to
Management's  decision to  reposition  its  insurance  marketing  resources  and
efforts to concentrate  on the  development  and launch of its RushTrade  direct
access on-line trading system.

     Corporate  expenses  increased  $55,069,  or 14%,  from  2001 to 2002.  The
Company  instituted cost reduction  policies after the Northstar  acquisition in
2001 and  continues  to reduce  cost.  In the second  quarter of 2002  Corporate
expenses  were  increased  due to a  non-cash  charge  for  consulting  fees  of
$167,491.

Operating income (loss) from continuing operations

     The  following  table sets forth the  components  of the  Company's  income
(loss) for the periods indicated:

                                       Three Months Ended June 30,
                Income (Loss) from     ---------------------------
              Continuing Operations        2002           2001
             -----------------------   ------------   ------------
             Direct Access Brokerage      ($173,182)     ($180,994)
             Retail Brokerage            (1,050,307)        26,955
             Corporate                     (461,437)      (392,157)
                                       ------------   ------------
                         Total          ($1,683,926)     ($546,196)
                                       ============   ============

     Operating losses increased  $1,137,730,  or 208%, from 2001 to 2002. Direct
Access  Brokerage  operating losses decreased by $7,812 or 4% from 2001 to 2002.
Retail  Brokerage  recorded  operating  losses of  ($1,050,307)  in 2002  versus
operating  income of $26,955 in 2001.  The change was  primarily a result of the
write off of  goodwill  of  $1,042,028.  Corporate  operating  losses  increased
$69,280 or 18%, from 2001 to 2002. Corporate operating losses increased in spite
of the continued cost cutting. This was primarily due to the non-cash consulting
fees.


Six Months Ended June 30, 2002 and 2001

Revenues

The following table sets forth the components of the Company's  revenues for the
periods indicated:

                                        Six Months Ended June 30,
                                       ---------------------------
                    Revenues               2002           2001
             -----------------------   ------------   ------------
             Direct Access Brokerage   $    499,992   $    124,674
             Retail Brokerage             2,756,748      3,693,446
             Corporate                            8         37,062
                                       ------------   ------------
                         Total         $  3,256,748   $  3,855,182
                                       ============   ============

     Total revenue for the six months ended June 30, 2002 decreased $598,434, or
16%, from 2001 to 2002.  This  decrease was comprised  primarily of decreases of
$936,698 from Retail Brokerage  operations and $37,054 from corporate  revenues,
offset by an increase of $375,318 in Direct Access Brokerage revenue.

     Direct Access Brokerage revenue increased  $375,318,  or 300%, from 2001 to
2002.  This  increase  was  primarily  the result of adding a new  trading  firm
customer  licensed in late December  2001.  The agreement with this trading firm
was terminated in July 2002 and thus we expect Direct Access  Brokerage  revenue
to decrease in the third quarter of 2002.

     Retail Brokerage revenue decreased $936,698, or 25%, from 2001 to 2002. The
decrease is primarily  due to  management's  decision to  reposition  its retail
brokerage and insurance  marketing  resources and efforts to  concentrate on the
development  and launch of its RushTrade  direct access on-line  trading system.
Overall market  conditions also contributed to the overall decline in the Retail
Brokerage revenue.


                                                                              12
<PAGE>

     Corporate  revenue  decreased  primarily  due to the  decrease  in interest
income from 2001 to 2002, as  interest-earning  assets such as  investments  and
notes receivable decreased.


Expenses

     The following table sets forth the components of the Company's expenses for
the periods indicated:

                                        Six Months Ended June 30,
                                       ---------------------------
                     Expenses              2002           2001
             -----------------------   ------------   ------------
             Direct Access Brokerage   $    835,786   $    465,235
             Retail Brokerage             3,683,924      3,854,598
             Corporate                      735,506        888,903
                                       ------------   ------------
                         Total         $  5,255,216   $  5,208,736
                                       ============   ============

     Total expenses  increased  $46,480 or 1%, from 2001 to 2002.  Direct Access
Brokerage  expenses  increased  $370,551,  Retail Brokerage  expenses  decreased
$170,674 and Corporate expenses decreased $153,397.

     Direct Access Brokerage expenses increased  $370,551,  or 80%, from 2001 to
2002. This increase is primarily due to commissions paid to the new trading firm
licensed in December  2001.  The agreement with this trading firm was terminated
in July 2002 and thus we expect Direct Access Brokerage  expenses to decrease in
the third quarter of 2002.

     Retail Brokerage  expenses  decreased  $170,674,  or 4%, from 2001 to 2002.
This decrease is the result of a write off of impaired  goodwill  related to the
Retail  Brokerage  assets of $1,042,028  offset by a decrease in expenses due to
Managements decision to reposition its insurance marketing resources and efforts
to  concentrate  on the  development  and launch of its RushTrade  direct access
on-line trading system.

     Corporate  expenses  decreased  $153,397,  or 17%,  from 2001 to 2002.  The
Company  instituted cost reduction  policies after the Northstar  acquisition in
2001 and  continues  to reduce  cost.  In the second  quarter of 2002  Corporate
expenses are increased due to a non-cash charge for consulting fees of $167,491.

Operating income (loss) from continuing operations

     The  following  table sets forth the  components  of the  Company's  income
(loss) for the periods indicated:

                                        Six Months Ended June 30,
                Income (Loss) from     ---------------------------
              Continuing Operations        2002           2001
             -----------------------   ------------   ------------
             Direct Access Brokerage      ($335,794)     ($340,561)
             Retail Brokerage              (927,176)      (161,152)
             Corporate                     (735,498)      (851,841)
                                       ------------   ------------
                         Total          ($1,998,468)  ($1,353,554)
                                       ============   ============

Operating losses increased  $644,914,  or 48%, from 2001 to 2002.  Direct Access
Brokerage  operating losses decreased by $4,767 or 1% from 2001 to 2002.  Retail
Brokerage  operating  losses  increased  $766,024  in 2002  versus 2001 or 475%.
Retail  Brokerage  losses were caused  primarily by the write-off of goodwill of
$1,042,028.  Corporate  operating losses decreased $116,343 or 14%, from 2001 to
2002.  Corporate  operating  losses  increased  in spite of the  continued  cost
cutting. This was primarily due to the non-cash consulting fees.

Liquidity

     Cash  Flows  from  Operating  Activities  - The  Company  had a  loss  from
continuing operations of $1,998,463 for the six months ended June 30, 2002. This
amount was adjusted for non-cash expenses totaling  $1,190,493.  Cash flows from
operating activities were increased by a decrease in receivables of $168,009 and
by  various  other  cash flow  adjustments  aggregating  a net source of cash of
$235,865;  thus  yielding  a net  cash  flow  used by  operating  activities  of
$236,605.

                                                                              13
<PAGE>

     Cash  Flows  From  Investing  Activities  - Cash  flow  used  by  investing
activities  during  the six  months  ended June 30,  2002 was  $354,203,  due to
capitalizing  $337,160 in  development  costs  related to the  RushTrade  direct
access software and purchasing various fixed assets for $20,900.

     Cash Flows from Financing Activities - During the six months ended June 30,
2002,  the Company raised  $100,390 from the sale of common and preferred  stock
and  $300,000  from  borrowings.  The Company  paid $33,160 as payments on notes
payable and $38,184 as preferred stock dividends.

     The Company's  cash and cash  equivalents  available for operations at June
30,  2002  were  zero,  and the  Company's  liabilities  exceeded  its  cash and
receivables  by  $1,971,226.   The  Company's   requirements   for  normal  cash
expenditures,  as well as costs for the  further  development  and launch of the
proprietary on-line RushTrade software, have historically been supplemented with
borrowings  and  equity   capital  raised  through  the  private   placement  of
securities;  however,  there can be no assurance that these sources of cash will
be available in the future.

     The accompanying  financial statements have been prepared assuming that the
Company will  continue as a going  concern.  At June 30,  2002,  the Company had
$2,141,963 in liabilities,  and cash and accounts receivable of $170,737.  Also,
the Company had net losses from  continuing  operations  of  $1,057,635 in 2000,
$2,203,896  in 2001,  and  $1,998,468  for the six months  ended June 30,  2002.
Although  the  Company  believes  that it will be able to  continue to raise the
necessary  funds until it reaches a sustainable  level of  profitability,  these
matters raise  substantial  doubt about the  Company's  ability to continue as a
going  concern.  The financial  statements do not include any  adjustments  that
might result from the outcome of this uncertainty.

     The  Company  has  taken  several  steps  to  increase  cash  by the use of
borrowings and equity. In the second quarter of 2002 the Company raised $100,000
through  the  sale of  convertible  debentures  and  $35,000  from  the  sale of
preferred stock. The Company will attempt to raise additional  capital through a
Senior Secured  Convertible Bond Offering whereby the bonds will be secured by a
lien on RushTrade's proprietary software and other technology assets.

     The Company has also  undergone an extensive  internal  reorganization  and
reduction  of  staff  to  adjust  to the  current  level  of  activity  and  has
implemented  additional  steps  to more  closely  monitor  expenses.  Additional
marketing efforts are being implemented to enhance revenue and take advantage of
the release of the RushTrade  software  products.  The  RushTrade  products were
released on July 1, 2002, and have so far generated only minimal revenue.

Forward-looking statements

     This document  includes  statements  that may constitute  "forward-looking"
statements,  usually  containing  the words  "believe",  "estimate",  "project",
"expect", or similar expressions. These statements are made pursuant to the safe
harbor  provisions  of the  Private  Securities  Litigation  Reform Act of 1995.
Forward-looking statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the  forward-looking  statements.
Factors that would cause or contribute to such differences  include, but are not
limited to, continued  acceptance of the Company's  products in the marketplace,
competitive  factors,  changes  in  regulatory  environments,  and  other  risks
detailed in the  Company's  periodic  report  filings  with the  Securities  and
Exchange Commission.  By making these  forward-looking  statements,  the Company
undertakes  no obligation  to update these  statements  for revisions or changes
after the date of this filing.


PART II. OTHER INFORMATION

Item 2.  Changes in securities and use of proceeds

Recent Sales of Unregistered Securities

     On May 21, 2002 the Company issued two convertible notes totaling $100,000.
These  notes bear  interest  at 9% per annum,  principal  and  accrued  interest
payable in quarterly  installments  beginning  October 15, 2002, mature April 1,
2005 and are convertible  into shares of common stock at the lesser of $0.25 per
share or the average closing price of the common stock on its principal  trading
market for the 30 trading days  preceding  the notice of  conversion,  but in no
event less than $0.175 per share.

                                                                              14
<PAGE>

     During the current  quarter the Company  sold 3,500  shares of series 2002A
convertible  preferred,  $10 par value,  convertible  into the Company's  common
shares at $0.25 per share and pays a 9%  cumulative  dividend  in common  shares
payable quarterly.

     During the current quarter, the Company issued 200,000 warrants to purchase
common stock valued at $41,569 to a non-employee  as a finders fee in connection
with  the  Company  obtaining  debt  financing.  As  discussed  in Note 10 these
warrants have an exercise price of $0.25 per share and expire in five years.

     During the current  quarter,  the Company granted  1,031,000 stock options.
100,001 options were granted to employees for common stock  exercisable at $0.16
per share that expire in five years as  compensation.  930,000 options valued at
$167,491 were granted to non-employees  for services.  The options have exercise
prices ranging from $0.22-$0.26 per share that expire in five years.


Item 5.  Other Information

     The Nasdaq Stock  Market  notified the Company that it had until August 13,
2002 to comply with its minimum continued  listing  requirement by maintaining a
minimum closing bid price of $1.00 for at least 10 consecutive trading days. The
Company failed to maintain a minimum closing bid price of $1.00. The Company has
also been  reminded by the Nasdaq Stock Market that,  to comply with its minimum
continued listing requirements, it must maintain a minimum balance of $2,500,000
in  Shareholder's  Equity and a minimum  of  $1,000,000  in market  value in the
public  float.  On August 5, 2002 the Nasdaq Stock  Market  notified The Company
that its common stock had failed to maintain a minimum  market value of publicly
held shares  ("MVPHS") of  $1,000,000  as required.  The Nasdaq Stock Market has
given the company 90 days, or until November 4, 2002 to comply.  With the filing
of this  report  The  Company  has  failed  to  maintain  a minimum  balance  of
$2,500,000  in  Shareholder's  Equity and  expects to receive a letter  from the
Nasdaq Stock  Market to that effect.  At some point in the last half of the year
the Company  expects to be delisted  from the exchange.  The Company  expects to
move to the OTC  market and will apply  when  available  for  listing on the OTC
Bulletin Board Exchange.


Item 6.  Exhibits and Reports on Form 8-K

     a)    Exhibits

     99.1  Certification pursuant of 18 U.S.C. Section 1350, as adapted pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002.

     99.2  Certification pursuant to 18 U.S.C. Section 1350, as adapted pursuant
           to Section 906 of the Sarbanes-Oxley Act of 2002.

     99.3  OTA Agreements

     99.4  CentraTrade Agreement

     99.5  Common Stock Issued & Outstanding

     b)    Reports on Form 8-K

     None



                                                                              15
<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.

                                            Rushmore Financial Group, Inc.

Dated: August 21, 2002                      By /s/ Dewey M. Moore, Jr.
                                            ------------------------------------
                                            Dewey M. Moore, Jr.
                                            Chief Executive Officer


Dated: August 21, 2002                      By /s/ Randy Rutledge
                                            ------------------------------------
                                            Randy Rutledge
                                            Chief Financial Officer









                                                                              16