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 September 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 September  30, 2002:  9,188,709  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)
                                                                       September 30,     December 31,
                              ASSETS                                        2002             2001
                                                                       -------------    -------------
<S>                                                                    <C>              <C>
Cash and cash equivalents                                              $      14,986    $     261,761
Accounts receivable                                                           31,618          338,747
Prepaid expenses and deposits                                                456,040          227,449
Developed software, net of accumulated amortization                        2,014,393        1,739,257
Property and equipment, net of accumulated depreciation                      285,983          413,598
Goodwill, net                                                                132,441        1,253,932
Deferred financing fees, net                                                  38,105             --
Intangibles                                                                   60,000             --
                                                                       -------------    -------------
                          Total assets                                 $   3,033,566    $   4,234,744
                                                                       =============    =============

               LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
        Accounts payable                                               $   1,158,189    $   1,012,529
        Notes payable                                                        144,708          150,154
        Convertible notes payable                                            300,000             --
        Convertible bonds payable                                             65,000             --
        Liabilities acquired in 2001 acquisition                             332,098          375,812
        Accrued expenses and other liabilities                               199,821          136,751
                                                                       -------------    -------------
                          Total liabilities                                2,199,816        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;
              96,480 shares issued and outstanding                           964,800          864,800
        Common stock - $0.01 par value, 10,000,000 shares
              authorized; 9,875,587 shares issued at September 30,
              2002; 7,229,633 shares issued at December 31, 2001              98,755           72,296
        Common stock subscriptions receivable                                 (3,277)          (4,118)
        Additional paid in capital                                        12,698,959       12,154,388
        Treasury stock, at cost - 686,878 shares                            (421,022)        (421,022)
        Accumulated deficit                                              (12,645,095)     (10,247,476)
                                                                       -------------    -------------
                          Total shareholders' equity                         833,750        2,559,498
                                                                       -------------    -------------
                          Total liabilities and shareholders' equity   $   3,033,566    $   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 nine months ended September 30,
                                   (unaudited)

                                                         For the Three Months           For the Nine Months
                                                          Ended September 30,           Ended September 30,
                                                      --------------------------    --------------------------
                                                          2002           2001           2002           2001
                                                      -----------    -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>            <C>
 Revenue:
    Direct access brokerage services
            Commissions and fees                      $   169,470    $    66,978    $   669,462    $   191,652
    Retail brokerage services
            Commissions and fees                          251,628      2,045,845      2,992,693      5,739,291
    Other revenue                                             278         20,799         15,969         57,861
                                                      -----------    -----------    -----------    -----------
                  Total revenue                           421,376      2,133,622      3,678,124      5,988,804
                                                      -----------    -----------    -----------    -----------
 Expenses:
    Direct access brokerage services
           Commission expense                              93,063           (704)       487,714          2,065
           Other Direct access brokerage services
             expenses                                     125,563        159,779        425,535        409,496
    Retail brokerage services
           Commission expense                              52,639      1,542,137      2,042,617      4,207,032
           Other retail brokerage services expenses         6,351         34,540         24,516        226,428
    General and administrative                            316,197        945,415      1,686,019      2,933,782
                                                      -----------    -----------    -----------    -----------
                  Total expenses                          593,813      2,681,167      4,666,401      7,778,803
                                                      -----------    -----------    -----------    -----------
 Operating loss                                          (172,437)      (547,545)      (988,277)    (1,789,999)
 Other income (expense):
   Write off of impaired goodwill                            --             --        1,042,028           --
   Depreciation and amortization                          213,995         15,406        331,125        106,673
   Interest expense                                        12,719         10,460         36,189         30,293
                                                      -----------    -----------    -----------    -----------
 Loss from continuing operations                         (399,151)      (573,411)    (2,397,619)    (1,926,965)
                                                      -----------    -----------    -----------    -----------

Discontinued operations
   Loss from discontinued operations                         --             --             --          (95,743)
   Loss from disposition of discontinued operations          --       (2,897,473)          --       (2,897,473)

                                                      -----------    -----------    -----------    -----------
 Net income (loss)                                    $  (399,151)   $(3,470,884)   $(2,397,619)   $(4,920,181)
                                                      ===========    ===========    ===========    ===========

 Basic and diluted loss per share of
   common stock, continuing operations                $     (0.05)   $     (0.09)   $     (0.31)   $     (0.34)
                                                      ===========    ===========    ===========    ===========
 Basic and diluted loss per share of
   common stock, discontinued operations              $      --      $     (0.47)   $      --      $     (0.53)
                                                      ===========    ===========    ===========    ===========
 Basic and diluted net loss per share of
   common stock                                       $     (0.05)   $     (0.56)   $     (0.31)   $     (0.87)
                                                      ===========    ===========    ===========    ===========

Weighted average common shares outstanding              8,290,595      6,185,154      7,638,313      5,669,580
                                                      ===========    ===========    ===========    ===========

</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 nine months ended September 30,
                                   (unaudited)

                                                                                  2002          2001
                                                                              -----------    -----------
<S>                                                                           <C>            <C>
Cash flows from operating activities:
         Net loss                                                             $(2,397,619)   $(1,926,965)
         Adjustments to reconcile net loss from continuing operations
           to net cash used in operating activities
                Common stock issued for compensation, services and expenses        40,602         87,000
                Fair value of common stock options issued for services            167,491           --
                Write off of impaired goodwill                                  1,042,028           --
                Depreciation and amortization                                     331,125        194,571
                Change in assets and liabilities, net of effect
                   of acquisitions:
                (Increase) decrease in assets:
                     Accounts receivable                                          325,354        226,740
                     Prepaid expenses and deposits                                 88,510         (9,300)
                Increase (decrease) in liabilities:
                     Accrued expenses and other liabilities                       127,568        287,330
                                                                              -----------    -----------
Net cash used in operating activities-continuing operations                      (274,941)    (1,140,624)
                                                                              -----------    -----------
Cash flows from investing activities:
         Purchase of equipment                                                    (25,011)       (76,699)
         Capitalization of software development costs                            (448,047)      (904,885)
         Cash received from sale of certain assets of RSC                          79,464           --
         Cash received on the 2001 acquisition                                       --           11,047
                                                                              -----------    -----------
Net cash used in investing activities                                            (393,594)      (970,537)
                                                                              -----------    -----------
Cash flows from financing activities:
         Proceeds from sale of Common Stock                                           390        530,820
         Proceeds from sale of Preferred Stock                                    100,000        365,929
         Preferred Stock subscriptions received                                      --           31,016
         Preferred Stock dividends paid                                           (38,184)       (38,244)
         Payments on notes payable                                                (40,446)      (134,274)
         Proceeds from notes payable                                               35,000        303,456
         Proceeds from convertible debentures                                     300,000           --
         Proceeds from convertible bonds                                           65,000           --
                                                                              -----------    -----------
Net cash provided by financing activities                                         421,760      1,058,703
                                                                              -----------    -----------

Net cash used in continuing operations                                           (246,775)    (1,052,458)

Net cash provided by discontinued operations                                         --          (30,319)
                                                                              -----------    -----------

Net decrease in cash and cash equivalents                                        (246,775)    (1,082,777)
Cash and cash equivalents at beginning of period                                  261,761      1,218,317
                                                                              -----------    -----------
Cash and cash equivalents at end of period                                    $    14,986    $   135,540
                                                                              ===========    ===========
Supplemental Disclosure of Cash Flow Information:
         Cash paid for interest                                               $      --      $    26,533
         Cash paid for income taxes                                           $      --      $      --

Supplemental Disclosure of Non-Cash Information:
         Preferred stock dividend accrued                                     $    22,622    $      --
         Warrants issued in connection with debt financing                    $    41,569    $      --
         Common stock issued as dividends on preferred stock                  $     2,126    $      --
         Common stock issued in the GRO acquisition                           $    80,500    $      --
         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 September 30, 2002, the Company had
$2,199,816 in liabilities,  $14,986 of cash and accounts  receivable of $31,618.
Also,  the  Company  had  incurred  net losses  from  continuing  operations  of
$1,057,635 in 2000,  $2,203,896 in 2001, and $2,397,619 in the first nine 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 third quarter of 2002 the Company raised $100,000
in cash, $65,000 through the sale of bonds in the 12% Senior Secured Convertible
Bond Offering (see Note 12 for a more detailed description of this offering) and
$35,000 from short-term borrowings. 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,  assets,
trademarks and other  technology  assets of RushTrade  Software  Services,  Inc.
including the domain names RushTrade.com and daytrade.com.

     In 2000, Rushmore launched a $4 million proprietary  technology development
initiative  in  response  to the  burgeoning  market  for direct  access  online
trading.  After two years of development and successful beta testing the Company
introduced  its direct access  technology  platform in the third quarter of 2002
under its RushTrade(TM)  brand.  Through the remainder of 2002 and into 2003 and
beyond,  management  expects to aggressively  ramp up revenues of RushTrade with
that business unit  expected to become the Company's  primary  source of revenue
and profit.

     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 new  release  of the  RushTrade  software  products.  RushTrade  Direct  was
released on July 1, 2002 and RushTrade Direct Pro was released on August 9, both
products have generated $34,158 in revenue through the third quarter.


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.

     The   Direct   Access   Brokerage   Services    division,    operating   as
"RushTrade(TM)",  has been  developed  to meet the needs of the  active  on-line
investor. RushTrade(TM) offers two distinct and proprietary products to meet the
needs of active online investors:  RushTrade(TM) Direct, a Level I browser-based
product and RushTrade(TM) Direct Pro, a Level II software-based product.

     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").  As part of the  Company's  repositioning  as a technology
development and direct access online financial  services company,  this division
is being downsized and resources are being  redirected to  RushTrade(TM) as part
of the Company's  narrowing  focus.  As of the date of this filing,  the Company
does not have any independent off site registered representatives.

                                                                               6
<PAGE>
<TABLE>
<CAPTION>

     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  amortization by industry segment as of the
dates indicated:

                                                September 30,
                                       -----------------------------
              Identifiable Assets            2002            2001
          -------------------------    -------------   -------------
          Direct Access Brokerage        $ 2,091,449     $   915,356
          Retail Brokerage                   302,225       2,010,105
          Corporate                          639,892       1,176,795
                                       -------------   -------------
                     Total               $ 3,033,566     $ 4,102,256
                                       =============   =============

                                                September 30,
                                       -----------------------------
             Capital Expenditures            2002            2001
          -------------------------    -------------   -------------
          Direct Access Brokerage         $  461,788      $  923,352
          Retail Brokerage                     4,772          38,012
          Corporate                            6,498          20,220
                                       -------------   -------------
                     Total                $  473,058      $  981,584
                                       =============   =============

                                                September 30,
              Depreciation and         -----------------------------
                Amortization                 2002            2001
          -------------------------    -------------   -------------
          Direct Access Brokerage         $  219,602      $   15,112
          Retail Brokerage                    30,178          24,001
          Corporate                           81,345          67,560
                                       -------------   -------------
                     Total                $  331,125      $  106,673
                                       =============   =============

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

                           Three Months Ended September 30,   Nine Months Ended September 30,
                           --------------------------------  --------------------------------
          Revenues                2002             2001             2002             2001
-------------------------  ---------------  ---------------  ---------------  ---------------
<S>                        <C>              <C>              <C>              <C>
Direct Access Brokerage      $    169,470     $     66,978     $    669,462     $    191,652
Retail Brokerage                  251,906        2,045,845        3,008,654        5,739,291
Corporate                               -           20,799                8           57,861
                           ---------------  ---------------  ---------------  ---------------
            Total            $    421,376     $  2,133,622     $  3,678,124     $  5,988,804
                           ===============  ===============  ===============  ===============


                           Three Months Ended September 30,   Nine Months Ended September 30,
                           --------------------------------  --------------------------------
          Expenses                2002             2001             2002             2001
-------------------------  ---------------  ---------------  ---------------  ---------------
Direct Access Brokerage      $    542,915     $     75,269     $  1,378,684     $    199,943
Retail Brokerage                  179,816        2,148,450        3,863,740        6,363,442
Corporate                          97,796          483,314          833,319        1,352,384
                           ---------------  ---------------  ---------------  ---------------
           Total             $    820,527     $  2,707,033     $  6,075,743     $  7,915,769
                           ===============  ===============  ===============  ===============


                           Three Months Ended September 30,   Nine Months Ended September 30,
    Income (Loss) from     --------------------------------  --------------------------------
  Continuing Operations           2002             2001             2002             2001
-------------------------  ---------------  ---------------  ---------------  ---------------
Direct Access Brokerage      $   (373,445)    $     (8,291)    $   (709,222)    $     (8,291)
Retail Brokerage                   72,090         (102,605)        (855,086)        (624,151)
Corporate                         (97,796)        (462,515)        (833,311)      (1,294,523)
                           ---------------  ---------------  ---------------  ---------------
            Total            $   (399,151)    $   (573,411)    $ (2,397,619)    $ (1,926,965)
                           ===============  ===============  ===============  ===============

</TABLE>

                                                                               7
<PAGE>

3.   Capitalized Software Development Costs

     The Company  capitalizes  certain costs  associated with the development of
software products. During the first nine months of 2002, the Company capitalized
$448,047 in costs versus  $904,885 for the same period in 2001.  As of September
30, 2002, the total of all capitalized costs net of accumulated  amortization of
$172,911 was $2,014,393.  The RushTrade  products were released on July 1, 2002,
at which  point,  additional  costs  related to these  products  were charged to
operating  expenses instead of being  capitalized.  Additionally,  all presently
capitalized  costs  relating  to  the  RushTrade  released  products  are  being
amortized over a three-year period. The Penson Backoffice product is expected to
be  released  no  earlier  than  the end of 2002.  Upon  release  of the  Penson
Backoffice  product,  costs related to this product will be charged to operating
expenses instead of being capitalized.  Additionally,  all presently capitalized
costs related to the Penson  Backoffice  product,  110,887 at September 30, 2002
will be  amortized  upon the  release  of the  product  over the  greater of the
revenue method or the straight-line method over a three-year period.

4.   Certain 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  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 September  30, 2002, 30 trader  accounts
have been certified and accordingly, $60,000 has been reclassified to intangible
assets  and is being  amortized  over  three  years,  the  expected  life of the
traders.  Amortization  of this intangible will begin on October 1, 2002. OTA is
behind  schedule in delivering  trader  accounts to the Company.  All 150 trader
accounts  were to have been  delivered by September 30, but to date only 37 have
been  delivered and  certified.  The Company has extended the agreement to March
31, 2003 and expects OTA to fulfill the agreement.  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.

     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 in November 2002 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.  The receipt of the first  payment  from Empire of $79,464 was applied
against  the  goodwill  balance.  Thus,  the  remaining  goodwill is $132,441 at
September 30, 2002. The goodwill balance will continue to be reduced as payments
from Empire are received.

     The  Company  and  GRO  Corporation  ("GRO")  finalized  a  stock  purchase
agreement  effective  August 31,  2002 where the  Company  purchased  all of the
outstanding  stock of GRO in  exchange  for  1,150,000  shares of the  Company's
restricted common stock at closing and an additional 350,000 shares to be issued
all or in part on  December  31,  2002,  to the  extent  that GRO meets  certain
performance  criteria.  This  acquisition  provides  the  Company an  additional
broker-dealer  with a proven expertise in direct access  brokerage,  licensed in
fifty states and two additional trading platforms.

     The consideration for the purchase of GRO has been valued at $80,500, based
on the  fair  value  of the  stock  issued  on the  date  of the  purchase.  The
contingent  consideration  will be recorded when the contingency is resolved and
the  consideration  is  issued  or  becomes  issuable.  This  will  result in an
additional  element of the cost of the acquired  entity and will be valued using
the current fair value of the stock  issued.  The results of  operations  of the
acquired entity are included in the consolidated  operations of the Company from
the acquisition date.


                                                                               8
<PAGE>
<TABLE>
<CAPTION>

5.   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.

6.   Reclassification

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

7.   Loss Per Share

     Loss per share for the periods  indicated are computed  using the following
information:


                                      Three months ended September 30,   Nine months ended September 30,
                                      --------------------------------  --------------------------------
                                             2002             2001             2002             2001
                                      ---------------  ---------------  ---------------  ---------------
<S>                                   <C>              <C>              <C>              <C>
Loss from continuing operations         $   (399,151)    $   (573,411)    $ (2,397,619)    $ (1,926,965)
Dividends on preferred stock                 (22,622)         (16,706)         (62,932)         (38,244)
                                      ---------------  ---------------  ---------------  ---------------
Loss from continuing operations
     applicable to common
     shareholders                       $   (421,773)    $   (590,117)    $ (2,460,551)    $ (1,965,209)
                                      ===============  ===============  ===============  ===============

</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 4,  during the second  quarter of 2002,  the Company
entered  into an  agreement  to sell  certain  assets,  which  consisted  of 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. During the third quarter
of 2002,  the Company  received the first  payment of $79,464.  This payment was
applied against the goodwill balance.  Thus, the remaining  goodwill is $132,441
at September  30,  2002.  The  goodwill  balance will  continue to be reduced as
payments from this sale are received.

10.  Convertible Notes Payable

     During the second quarter 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.

     During the first quarter 2002,  the Company  issued two  convertible  notes
totaling  $200,000.  These notes bear  interest at 9% per annum,  principal  and
accrued  interest  payable in quarterly  installments  beginning  July 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.


                                                                               9
<PAGE>

11.  Notes Payable

     During the third quarter 2002, the Company issued a short-term note payable
in the amount of $35,000.  This note bears  interest at 7% per annum;  principal
and interest are due upon the earlier of six months from the date of the note or
upon the  Company's  receipt  of  proceeds  of at least  $2,000,000  from a debt
offering.

12.  Convertible Bonds

     During  the third  quarter  2002,  the  Company  issued  convertible  bonds
totaling  $65,000.  These 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 market price of the stock at the time of
conversion,  but not less than $0.15 per share. The Company may force conversion
if the stock trades above $2.00 per share for 10 consecutive trading days.

13.  Shareholders' Equity

     During the nine months ended  September 30, 2002, the Company issued 40,000
shares of restricted common stock to employees valued at $2,800,  249,095 shares
of common stock to non-employees for services valued at $36,961, 6,859 of common
stock shares for preferred  stock  dividends of $2,216 and  2,350,000  shares of
common stock in connection with acquisitions valued at $380,500.

     During the nine months ended  September 30, 2002, the Company issued 10,000
shares of Series 2002A  Convertible  Preferred  Stock,  par value $10 per share,
issue price $10 per share for a total of  $100,000.  The Series  2002A pays a 9%
cumulative annual dividend,  payable quarterly in shares of the Company's common
stock,  at the rate of $0.25 per  share,  until the  Company  achieves  positive
earning in two  consecutive  quarters;  thereafter,  either in cash or in common
stock at the election of the holder.  The issue is callable after three years at
the option of the Company,  is non-voting and is convertible  into the Company's
common  stock at a rate of $0.25 per share of common  stock at  anytime,  by the
holder,  and by the Company  when the  average  closing  price of the  Company's
common stock exceeds $1.00 for 10 consecutive trading days.

14.  Stock Options and Warrants

     During the second  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.

     Additionally,  during  the  second  quarter,  the  Company  issued  200,000
warrants 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.

15.  Insurance Claims Payable

     During the second quarter of 2002, the plan  administrator of the Company's
partially  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.  At September 30, 2002, the
Company has recorded an accrual of $221,247  related to these claims,  including
an estimated  accrual for future funds that will be required to cover additional
claims.  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,  which is
expected to limit this type of exposure in the future.




                                                                              10
<PAGE>

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


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

     RushTrade      Direct      Access      Online       Services--RushTrade.com
(http://www.rushtrade.com),  developed and  initially  launched as a division of
Rushmore Securities,  has been developed to meet the needs of the active on-line
investor. On October 23, 2002 all the direct access online accounts of RushTrade
were transferred to GRO Corporation ("GRO"), dba RushTrade Securities. 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 products were developed by RushTrade Software
Services, Inc., and will be distributed through RushTrade.com, a division of GRO
dba RushTrade  Securities.  The  RushTrade  products were released on July 1 and
August 9, 2002 and are 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 and August 9,
2002 respectively.  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.

     Both  RushTrade(TM)  Direct and RushTrade (TM) Direct Pro provide customers
or other  users and  licensees  of the  RushTrade(TM)  software  with  real-time
quotes,  fast and reliable access to multiple  market makers,  a 30-second trade
execution guarantee and advanced decision support tools.

     Using the RushTrade(TM) products, customers purchasing or selling shares of
stock  receive the best possible  price because  orders are sent directly to the
particular Exchange or Electronic Communications Network (ECN) offering the best
price on any  particular  stock at any  given  time.  In  contrast,  most of the
traditional   on-line   brokerage   firms  process   customer   orders   through
browser-based  software that routes the order through the firm's trading desk or
to third-party  wholesalers with "payment for order flow" arrangements which has
historically impaired the customer's price and quality of execution.

     RushTrade(TM)  Direct fulfills the needs of online  investors by delivering
real-time quotes and information combined with RushTrade's Direct Access Routing
Technology (DART(TM)).  Experienced registered representatives provide RushTrade
customer  service.  RushTrade  Direct is delivered to customers via the Internet
and can be accessed from virtually any computer with a web browser.

     RushTrade(TM) Direct features include:

     |X|  Intraday and historical charts
     |X|  A list of upcoming stock splits
     |X|  Analyst upgrades and downgrades
     |X|  News headlines and advanced news search
     |X|  Company and symbol lookup
     |X|  Market commentary
     |X|  Market summary
     |X|  Company fundamental data
     |X|  A calendar of upcoming economic events including estimates
     |X|  A listing of several market indices with quotes


                                                                              11
<PAGE>

     RushTrade(TM)  Direct Pro meets the  demands of more  sophisticated  online
investors by providing the latest trading  technologies and service 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  RushTrade's   proprietary  Direct  Access  Routing  Technology  (DART(TM)).
RushTrade(TM)  Direct  Pro  clients  have  access to the same  customer  service
support that RushTrade(TM) Direct users receive.

     The technological  advancements made in RushTrade(TM) Direct Pro constitute
the third generation (3G) of trading software  platforms.  RushTrade(TM)  Direct
Pro provides a clean and intuitive  user  interface  through the use of multiple
methods of accessing each tool and performing  each task and the  utilization of
advanced Windows(TM) functionality.  RushTrade's Level II product user interface
is designed to be much more efficient than that of the competition.

     RushTrade  Direct  Pro  software  can be  downloaded  with  less than a 1.6
megabyte  requirement  verses 8 to 10  megabytes  required for most of the other
competitive  software  platforms.  While  other  competitive  platforms  require
broadband data  connections  such as ISDN, DSL or T-1  connections,  the Company
believes  that  RushTrade  Direct  Pro is  the  only  known  Level  II  software
application that will operate  effectively with as little as a 56K modem dial up
connection.

     RushTrade  believes  that  its  data  center  can  host  200% to 300%  more
customers  per server  than its  competitors.  The Company  believes  that these
features  give  RushTrade  a  distinguished  advantage  in the  marketplace  and
substantial  advantages as a low cost services provider in its operations and in
the proposed licensing the RushTrade software to other firms.

     While  improving  upon the  user  interface,  RushTrade(TM)  simultaneously
developed  decision  support  tools that  provide  many of the  latest  advanced
trading  technologies.  These  3G  technologies  include  multiple  order  entry
methods,   sophisticated  basket  trading   capabilities,   conditional  orders,
parametric  alerts and a stock market  screening tool.  These advanced  decision
support tools enable traders and active  investors to quickly make more informed
decisions.

     In addition, RushTrade(TM) Direct Pro features include:

     |X|  User defined alarms and screen alerts
     |X|  Most actives, top % gainers, top % decliners
     |X|  Streaming, real-time Level II Quotes
     |X|  Direct access trading utilizing DART(TM)
     |X|  Conditional Orders i.e.: Trailing Stops, Make Best, etc.
     |X|  Market Matrix(TM)stock screening tools
     |X|  Powerful charting package including intra-day charts and studies
     |X|  3G Board View (Watch list)
     |X|  Real-time news available and fully customizable format

2.   Acquisition of GRO Corporation

     The  Company  and  GRO  Corporation  ("GRO")  finalized  a  stock  purchase
agreement  effective  August 31,  2002 where the  Company  purchased  all of the
outstanding  stock of GRO in  exchange  for  1,150,000  shares of the  Company's
restricted common stock at closing and an additional 350,000 shares to be issued
all or in part on  December  31,  2002,  to the  extent  that GRO meets  certain
performance  criteria.  This  acquisition  provides  the  Company an  additional
broker-dealer  with a proven expertise in direct access  brokerage,  licensed in
fifty states and two additional trading platforms.

     GRO  Corporation,  founded  in 1984 in New York  City,  has  established  a
reputation  for its  direct  access  online  trading  platform,  which  provides
customers,  many of whom are based in Europe, with technologies,  services,  and
decision-support  tools  that were  previously  available  only to  professional
traders and institutions.  GRO Corporation,  dba RushTrade Securities is an NASD
member  broker/dealer  and will  operate  as a wholly  owned  subsidiary  of the
Company.


                                                                              12
<PAGE>

     In addition to the GRO Corporation  customer base, the acquisition includes
advanced software and technology assets, such as the TradeSweeper(TM) fast trade
execution platform, GRO Instant Messenger,  GRO Secure Document Delivery System,
and GRO Secure Web Message Center.

3.   Results of Continuing Operations

Three Months Ended September 30, 2002 and 2001

Revenues

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

                                     Three Months Ended September 30,
                                     --------------------------------
                  Revenues                   2002             2001
          -------------------------  ---------------  ---------------

          Direct Access Brokerage       $    169,470     $     66,978
          Retail Brokerage                   251,906        2,045,845
          Corporate                                -           20,799
                                     ---------------  ---------------
                      Total             $    421,376     $  2,133,622
                                     ===============  ===============

     Total revenue for the third quarter decreased $1,712,246, or 80%, from 2001
to 2002.  This decrease was comprised  primarily of decreases of $1,793,939 from
Retail Brokerage  operations and $20,799 from corporate  revenues,  offset by an
increase of $102,492 in Direct Access Brokerage revenue.

     Direct Access Brokerage third quarter revenue increased $102,492,  or 153%,
from 2001 to 2002.  This increase was primarily the result of the release of the
RushTrade  platforms.  The  Company  expects  revenue to  increase in the fourth
quarter as new accounts are added as a result of increased marketing efforts.

     Retail Brokerage revenue decreased  $1,793,939,  or 88%, 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.  Management  expects Retail Brokerage
revenues to decrease in the fourth quarter,  when compared to previous quarters,
and then stabilize.

     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 September 30,
                                     --------------------------------
                    Expenses                 2002             2001
          -------------------------  ---------------  ---------------
          Direct Access Brokerage       $    542,915     $     75,269
          Retail Brokerage                   179,816        2,148,450
          Corporate                           97,796          483,314
                                     ---------------  ---------------
                      Total             $    820,527     $  2,707,033
                                     ===============  ===============

     Total  expenses  decreased  $1,886,506  or 70%,  from 2001 to 2002.  Direct
Access  Brokerage  expenses  increased   $467,646,   Retail  Brokerage  expenses
decreased $1,968,634 and corporate expenses decreased $385,518.

     Direct Access Brokerage expenses increased $467,646,  or 621%, from 2001 to
2002. This increase is partly due to commissions of $169,470 paid to the trading
firm licensed in December  2001 to July 2002 and partly due to the  amortization
of the capitalized  software  development  cost. The agreement with this trading
firm was terminated in July 2002.

                                                                              13
<PAGE>

     Retail Brokerage expenses decreased $1,968,634,  or 92%, from 2001 to 2002.
This decrease is primarily due to a corresponding decrease in commission revenue
resulting from Management's  decision to scale down and reposition its insurance
and retail  brokerage  marketing  resources  and efforts to  concentrate  on the
development and launch of its RushTrade direct access on-line trading system.

     Corporate  expenses  decreased  $385,518,  or 80%, from 2001 to 2002.  This
reduction is a result of a series of cost reduction policies  instituted in 2001
and continued through 2002.

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 September 30,
              Income (Loss) from     --------------------------------
            Continuing Operations            2002             2001
          -------------------------  ---------------  ---------------
          Direct Access Brokerage      $   (373,445)    $     (8,291)
          Retail Brokerage                   72,090         (102,605)
          Corporate                         (97,796)        (462,515)
                                     ---------------  ---------------
                      Total            $   (399,151)    $   (573,411)
                                     ===============  ===============

     Operating  losses  decreased  $174,260,  or 30%, from 2001 to 2002.  Direct
Access  Brokerage  operating  losses  increased  by $365,154  from 2001 to 2002.
Retail Brokerage  recorded  operating income of $72,090 in 2002 versus operating
loss of $102,605 in 2001.  Corporate operating losses decreased $364,719 or 79%,
from 2001 to 2002 as a result of the continued cost cutting.


Nine Months Ended September 30, 2002 and 2001

Revenues

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

                                      Nine Months Ended September 30,
                                     --------------------------------
                    Revenues                 2002             2001
          -------------------------  ---------------  ---------------
          Direct Access Brokerage      $    669,462     $    191,652
          Retail Brokerage                3,008,654        5,739,291
          Corporate                               8           57,861
                                     ---------------  ---------------
                      Total            $  3,678,124     $  5,988,804
                                     ===============  ===============

     Total  revenue  for the nine months  ended  September  30,  2002  decreased
$2,310,680,  or 39%, from 2001 to 2002. This decrease was comprised primarily of
decreases of $2,730,637 from Retail Brokerage revenue and $57,853 from corporate
revenues, offset by an increase of $477,810 in Direct Access Brokerage revenue.

     Direct Access Brokerage revenue increased  $477,810,  or 249%, from 2001 to
2002.  This  increase  was  primarily  the result of adding a new  trading  firm
customer  licensed  in late  December  2001 and partly  from the  release of the
RushTrade  software  products  beginning  July 1, 2002.  The agreement  with the
trading firm was  terminated  in July 2002.  There was minimal  revenue from the
trading firm in the third  quarter and the Company will see no revenue from this
firm in the fourth quarter.

     Retail Brokerage revenue decreased  $2,730,637,  or 48%, 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.  Management expects Retail Brokerage revenues to decrease in
the fourth quarter, when compared to previous quarters, and then stabilize.

     Corporate  revenue  decreased  by  $57,853,  or  99%  primarily  due to the
decrease in interest income from 2001 to 2002, as  interest-earning  assets such
as investments and notes receivable decreased.


                                                                              14
<PAGE>

Expenses

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

                                      Nine Months Ended September 30,
                                     --------------------------------
                   Expenses                  2002             2001
          -------------------------  ---------------  ---------------
          Direct Access Brokerage      $  1,378,684     $    199,943
          Retail Brokerage                3,863,740        6,363,442
          Corporate                         833,319        1,352,384
                                     ---------------  ---------------
                      Total            $  6,075,743     $  7,915,769
                                     ===============  ===============

     Total  expenses  decreased  $1,840,026  or 23%,  from 2001 to 2002.  Direct
Access  Brokerage  expenses  increased  $1,178,741,  Retail  Brokerage  expenses
decreased $2,499,702 and Corporate expenses decreased $519,065.

     Direct Access Brokerage expenses increased  $1,178,741,  or 589%, from 2001
to 2002. This increase is primarily due to commissions  paid to the trading firm
licensed in December 2001 through July 2002 and the amortization of the software
development  cost.  The agreement  with this trading firm was terminated in July
2002 and thus we expect Direct Access Brokerage  commission expenses to decrease
in the remainder of 2002.

     Retail Brokerage expenses decreased $2,499,702,  or 39%, 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 and retail brokerage marketing
resources  and  efforts  to  concentrate  on the  development  and launch of its
RushTrade direct access on-line trading system.

     Corporate  expenses  decreased  $519,065,  or 38%, from 2001 to 2002.  This
reduction is a result of a series of cost reduction policies  instituted in 2001
and continued through 2002. In the second quarter of 2002 Corporate expenses are
increased due to a non-cash charge for consulting fees of $167,491.

Operating loss from continuing operations

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

                                      Nine Months Ended September 30,
                  Loss from          --------------------------------
            Continuing Operations            2002             2001
          -------------------------  ---------------  ---------------
          Direct Access Brokerage      $   (709,222)    $     (8,291)
          Retail Brokerage                 (855,086)        (624,151)
          Corporate                        (833,311)      (1,294,523)
                                     ---------------  ---------------
                      Total            $ (2,397,619)    $ (1,926,965)
                                     ===============  ===============

    Operating  losses  increased  $470,654,  or 24%,  from 2001 to 2002.  Direct
Access  Brokerage  operating  losses  decreased  by $700,931  from 2001 to 2002.
Retail Brokerage operating losses increased $230,935 in 2002 versus 2001 or 37%.
Retail  Brokerage  losses were caused  primarily by the write-off of goodwill of
$1,042,028.  Corporate  operating losses decreased $461,212 or 36%, from 2001 to
2002.

Liquidity

    Cash  Flows  from  Operating  Activities  -  The  Company  had a  loss  from
continuing  operations  of  $2,397,619  for the nine months ended  September 30,
2002. This amount was adjusted for non-cash expenses totaling  $1,581,246.  Cash
flows from operating  activities were also increased  primarily by a decrease in
receivables  of $325,354,  a decrease in prepaids and deposits of $88,510 and an
increase in accounts payable and other liabilities of $127,568;  thus yielding a
net cash flow used by operating activities of $274,941.

    Cash  Flows  From  Investing  Activities  -  Cash  flow  used  by  investing
activities during the nine months ended September 30, 2002 was $393,549,  due to
capitalizing $448,047 in software development costs and purchasing various fixed
assets of $25,011. The Company received $79,464 from the sale of certain assets.

                                                                              15
<PAGE>

    Cash  Flows  from  Financing  Activities  -  During  the nine  months  ended
September  30, 2002,  the Company  raised  $100,390  from the sale of common and
preferred  stock and  $400,000  from  borrowings.  The Company  paid  $40,446 as
payments on notes payable and $38,184 as preferred stock dividends.  The Company
has suspended paying cash dividends on the preferred stock, but continues to pay
stock dividends for the holders that selected that method of payment.

     The  Company's  cash and  cash  equivalents  available  for  operations  at
September 30, 2002 were $14,986, and the Company's liabilities exceeded its cash
and net receivables by $2,153,212.  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.  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 September 30, 2002, the Company had
$2,199,816 in liabilities,  and cash and accounts  receivable of $46,604.  Also,
the Company had net losses from  continuing  operations  of  $1,057,635 in 2000,
$2,203,896 in 2001, and $2,397,619 for the nine months ended September 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 through borrowings and
equity.  During the nine months ended  September  30, 2002,  the Company  raised
$300,000  through the issuance of convertible  debentures,  $65,000  through the
sale of bonds in RFGI's 12% Senior Secured Convertible Bond Offering and $35,000
from a short-term  note.  The Company will attempt to raise  additional  capital
through it's 12% Senior Secured Convertible Bond Offering whereby the bonds will
be secured by a lien on RushTrade's  proprietary software,  trademarks and other
technology  assets.   Management   believes  the  Company  will  need  to  raise
approximately $500,000 to fund operations for the next twelve months.

     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 in the third  quarter of 2002,  and have  generated  $34,158 in revenue
through the third quarter.

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.

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.


                                                                              16
<PAGE>

PART II. OTHER INFORMATION

Item 2.  Changes in securities and use of proceeds

Recent Sales of Unregistered Securities

     During the nine months ended  September 30, 2002, the Company issued 40,000
shares of restricted common stock to employees valued at $2,800,  249,095 shares
to  non-employees  for services  valued at $36,961,  6,859 shares for  preferred
stock dividends of $2,216 and 2,350,000  shares in connection with  acquisitions
valued at $380,500.

     During the nine months ended  September 30, 2002, the Company issued 10,000
shares of Series 2002A  Convertible  Preferred  Stock,  par value $10 per share,
issue price $10 per share for a total of $100,000.

     During the second quarter 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.

     During the first quarter 2002,  the Company  issued two  convertible  notes
totaling  $200,000.  These notes bear  interest at 9% per annum,  principal  and
accrued  interest  payable in quarterly  installments  beginning  July 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.

     During the third quarter the Company  raised  $100,000 in cash,  $65,000 in
the 12 % Senior Secured Convertible Bond Offering and an additional $35,000 in a
short-term note which is expected to be converted into the bond offering.  As of
the filing  date the  Company  has raised a total of  $270,000 in the 12% Senior
Secured  Convertible Bond Offering including  $185,000 in short-term  borrowings
that the Company  expects to be converted to the 12% Senior Secured  Convertible
Bond Offering.

     During the second  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.

     Additionally,  during  the  second  quarter,  the  Company  issued  200,000
warrants 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.

Item 5.  Other Information

     On August 22,  2002 the  Company  was  delisted  from the Nasdaq  Small Cap
Market and  subsequently  moved to the OTC  Bulletin  Board  Exchange  where its
common stock is traded under the same ticker symbol, RFGI.

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  OTA Agreements

     99.3 Empire Holding Company Agreement

     99.4  Stock Purchase Agreement with GRO Corporation

     b)   Reports on Form 8-K

     None



                                                                              17
<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: November 14, 2002            By /s/ Dewey M. Moore, Jr.
                                    --------------------------------
                                    Dewey M. Moore, Jr.
                                    Chief Executive Officer

Dated: November 14, 2002            By /s/ Randy Rutledge
                                    --------------------------------
                                    Randy Rutledge
                                    Chief Financial Officer











                                                                              18
<PAGE>

                                  CERTIFICATION

I, Dewey M. Moore, Jr., certify that:

     1.   I have  reviewed  this  quarterly  report on Form  10-QSB of  Rushmore
          Financial Group, Inc.;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other certifying  officers and I are responsible for
          the  establishing and maintaining  disclosure  controls and procedures
          (as  defined  in  Exchange  Act  Rules  13a-14  and  15d-14)  for  the
          registrant and we have;

               a.   Designed such  disclosure  controls and procedures to ensure
                    that  material   information  relating  to  the  registrant,
                    including its consolidated subsidiaries, is made known to us
                    by others  within those  entities,  particularly  during the
                    period in which this quarterly report is being prepared;
               b.   Evaluated the  effectiveness of the registrant's  disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this  quarterly  report (the  "Evaluation
                    Date"); and
               c.   Presented in this quarterly report our conclusions about the
                    effectiveness  of the  disclosures  controls and  procedures
                    based on our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function);

               a.   All  significant  deficiencies in the design or operation of
                    internal   controls   which  could   adversely   affect  the
                    registrant's  ability  to  record,  process,  summarize  and
                    report   financial   data  and  have   identified   for  the
                    registrant's  auditors any material  weaknesses  in internal
                    controls; and

               b.   Any fraud, whether or not material, that involves management
                    or  other  employees  who  have a  significant  role  in the
                    registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly  report  whether  or not there  were  significant  changes in
         internal controls or in other factors that could  significantly  affect
         internal controls subsequent to the date of our most recent evaluation,
         including an corrective actions with regard to significant deficiencies
         and material weaknesses.

         Date: November 14, 2002


                                                      /s/ Dewey M. Moore, Jr.
                                                      -----------------------
                                                      Dewey M. Moore, Jr.
                                                      Chief Executive Officer



                                                                              19
<PAGE>

                                  CERTIFICATION

I, Randy Rutledge, certify that:

     1.   I have  reviewed  this  quarterly  report on Form  10-QSB of  Rushmore
          Financial Group, Inc.;

     2.   Based on my  knowledge,  this  quarterly  report  does not contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary to make the statements  made, in light of the  circumstances
          under which such  statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge,  the financial statements,  and other financial
          information  included in this quarterly report,  fairly present in all
          material respects the financial  condition,  results of operations and
          cash flows of the registrant as of, and for, the periods  presented in
          this quarterly report;

     4.   The registrant's  other certifying  officers and I are responsible for
          the  establishing and maintaining  disclosure  controls and procedures
          (as  defined  in  Exchange  Act  Rules  13a-14  and  15d-14)  for  the
          registrant and we have;

               a.   Designed such  disclosure  controls and procedures to ensure
                    that  material   information  relating  to  the  registrant,
                    including its consolidated subsidiaries, is made known to us
                    by others  within those  entities,  particularly  during the
                    period in which this quarterly report is being prepared;
               b.   Evaluated the  effectiveness of the registrant's  disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this  quarterly  report (the  "Evaluation
                    Date"); and
               c.   Presented in this quarterly report our conclusions about the
                    effectiveness  of the  disclosures  controls and  procedures
                    based on our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent  evaluation,  to the registrant's  auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing the equivalent function);

               a.   All  significant  deficiencies in the design or operation of
                    internal   controls   which  could   adversely   affect  the
                    registrant's  ability  to  record,  process,  summarize  and
                    report   financial   data  and  have   identified   for  the
                    registrant's  auditors any material  weaknesses  in internal
                    controls; and
               b.   Any fraud, whether or not material, that involves management
                    or  other  employees  who  have a  significant  role  in the
                    registrant's internal controls; and

     6.   The  registrant's  other  certifying  officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly  affect
          internal   controls   subsequent  to  the  date  of  our  most  recent
          evaluation, including an corrective actions with regard to significant
          deficiencies and material weaknesses.

          Date: November 14, 2002


                                                      /s/ Randy Rutledge
                                                      ------------------
                                                      Randy Rutledge
                                                      Chief Financial Officer




                                                                              20