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, 2004

                                       OR

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

       For the transition Period from ________________ to ________________

                        Commission file number 000-24057

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

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

                 13355 Noel Road, Suite 300, Dallas, Texas 75240
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)
               ---------------------------------------------------
                                  972-450-6000
               ---------------------------------------------------
                           (Issuer's telephone number)


         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, 2004:  21,615,250  shares of common stock,
$0.01 par value.

         Transitional Small Business Disclosure Format;

                                 Yes ____ No XXX


<PAGE>


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
















                                       2
<PAGE>
<TABLE>
<CAPTION>


               RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                                                                                       September 30,   December 31,
                                         ASSETS                                                            2004            2003
                                                                                                       ------------    ------------
<S>                                                                                                    <C>             <C>
Current assets
         Cash and cash equivalents                                                                     $    338,397    $    171,088
         Accounts receivable                                                                                 27,549          17,008
         Prepaid expenses and deposits                                                                       96,281          84,043
                                                                                                       ------------    ------------
             Total current assets                                                                           462,227         272,139
                                                                                                       ------------    ------------
Capitalized software development costs, net of accumulated amortization                                     908,690       1,288,245
Property and equipment, net of accumulated depreciation                                                      66,835          81,359
Intangibles, net                                                                                            250,893         213,500
Goodwill                                                                                                    200,247            --
Deferred financing fees, net                                                                                  9,238          19,630
                                                                                                       ------------    ------------
             Total assets                                                                              $  1,898,130    $  1,874,873
                                                                                                       ============    ============

                          LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities
         Accounts payable                                                                              $    854,885    $    788,826
         Accrued expenses and other liabilities                                                           1,382,296         967,817
         Common stock pending issuance (including $513,045 to related
             parties at December 31, 2003)                                                                     --         1,007,319
         Liabilities acquired in 2001 acquisition                                                           332,098         332,098
         Convertible notes payable (including $314,922 and $185,000 due to related
             parties, respectively), net of unamortized debt discount of $3,411 and $0, respectively        481,589         185,000
         Advances from related parties                                                                         --            55,000
                                                                                                       ------------    ------------
             Total current liabilities                                                                    3,050,868       3,336,060
                                                                                                       ------------    ------------

Long-term notes payable                                                                                      18,675          31,452
Convertible notes payable (including $122,007 due to related parties),
         net of unamortized debt discount of $15,872                                                           --           284,128
Convertible bonds payable, net of unamortized debt discount of $20,815
          and $107,649, respectively                                                                        464,185         564,351
                                                                                                       ------------    ------------
             Total liabilities                                                                            3,533,728       4,215,991
                                                                                                       ------------    ------------

Commitments and contingencies

Shareholders' deficit
         Preferred stock - cumulative; $10 par value; 14,063 shares
             issued and outstanding; liquidation preference of $10 per share                                140,630         140,630
         Preferred stock - convertible cumulative; $10 par value; 51,980 and 54,480
             shares issued and outstanding, respectively; liquidation preference of $10 per share           519,800         544,800
         Common stock - $0.01 par value, 50,000,000 and 10,000,000 shares
             authorized, respectively; 21,615,250 and 9,960,444 shares issued
             and outstanding, respectively                                                                  216,152          99,604
         Common stock subscriptions receivable                                                               (3,277)         (3,277)
         Common stock issued for assets not yet received                                                       --           (36,000)
         Additional paid in capital                                                                      15,260,937      12,768,184
         Accumulated deficit                                                                            (17,769,840)    (15,855,059)
                                                                                                       ------------    ------------
             Total shareholders' deficit                                                                 (1,635,598)     (2,341,118)
                                                                                                       ------------    ------------
             Total liabilities and shareholders' deficit                                               $  1,898,130    $  1,874,873
                                                                                                       ============    ============
</TABLE>

               See accompanying notes to consolidated financial statements

                                       3
<PAGE>
<TABLE>
<CAPTION>

               RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

                                                   For the Three Months             For the Nine Months
                                                    Ended September 30,             Ended September 30,
                                               ----------------------------    ----------------------------
                                                   2004            2003            2004            2003
                                               ------------    ------------    ------------    ------------
<S>                                            <C>             <C>             <C>             <C>
Revenue:
         Investment services                   $    429,985    $    366,928    $  1,478,747    $    815,131
         Software services                            8,350            --            96,258            --
                                               ------------    ------------    ------------    ------------
                    Total revenue                   438,335         366,928       1,575,005         815,131
                                               ------------    ------------    ------------    ------------
Expenses:
         Investment services                        394,848         398,896       1,166,534         858,167
         Software services                          122,616            --           634,716            --
         General and administrative                 271,152         197,084         729,052         832,425
         Depreciation and amortization              229,178         201,514         666,072         594,547
         (Gain) from sale of certain assets            --          (225,000)           --          (225,000)
         (Gain) loss on settlement of
              liabilities                              --           (53,891)        108,130         (53,891)
                                               ------------    ------------    ------------    ------------
                     Total expenses               1,017,794         518,603       3,304,504       2,006,248
                                               ------------    ------------    ------------    ------------

Operating loss                                     (579,459)       (151,675)     (1,729,499)     (1,191,117)

Interest expense                                     35,572          61,534         185,282         152,151
                                               ------------    ------------    ------------    ------------

Net loss                                       $   (615,031)   $   (213,209)   $ (1,914,781)   $ (1,343,268)
                                               ============    ============    ============    ============


Basic and diluted net loss per share
         attributable to common shareholders   $      (0.03)   $      (0.02)   $      (0.11)   $      (0.14)
                                               ============    ============    ============    ============

Weighted average common shares
         outstanding, basic and diluted          19,190,658       9,850,513      18,289,524       9,783,356
                                               ============    ============    ============    ============

</TABLE>

          See accompanying notes to consolidated financial statements

                                       4
<PAGE>
<TABLE>
<CAPTION>

               RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             For the Nine Months ended September 30, 2004 and 2003
                                   (unaudited)

                                                                          2004           2003
                                                                       -----------    -----------
<S>                                                                    <C>            <C>
Cash flows from operating activities:
     Net loss                                                          $(1,914,781)   $(1,343,268)
     Adjustments to reconcile net loss to net cash used in operating
     activities:

          Common stock issued for compensation, services and
               expenses                                                    108,795         22,052
          Depreciation and amortization of property and equipment          554,012        565,214
          Amortization of debt discount                                     99,295         10,201
          Amortization of deferred financing fees                           10,392         10,392
          Amortization of intangible                                       112,060         29,333
          (Gain) loss on settlement of liabilities                         108,135        (53,891)
          Gain on sale of certain assets                                      --         (225,000)
          Change in assets and liabilities:
              (Increase) decrease in assets:
                  Accounts receivable                                        2,072         18,690
                  Prepaid expenses and deposits                            (12,238)        44,130
               Increase (decrease) in liabilities:
                 Accounts payable                                           64,069        (27,467)
                 Accrued expenses and other liabilities                    394,034        296,123
                                                                       -----------    -----------
Net cash used in operating activities                                     (474,155)      (653,491)
                                                                       -----------    -----------

Cash flows from investing activities:
     Cash acquired in acquisition                                            4,446           --
     Purchase of equipment                                                 (12,111)          --
     Capitalization of software development costs                         (139,089)       (82,586)
     Proceeds from sale of certain assets                                     --          150,000
                                                                       -----------    -----------
Net cash provided by (used in) investing activities                       (146,754)        67,414
                                                                       -----------    -----------

Cash flows from financing activities:
     Decrease in bank overdraft                                               --          (37,750)
     Proceeds from sale of common stock                                    758,000           --
     Payments on notes payable                                             (12,777)       (16,099)
     Net advances from related parties                                        --           80,000
     Proceeds from convertible bonds                                        43,000        645,000
                                                                       -----------    -----------
Net cash provided by financing activities                                  788,223        671,151
                                                                       -----------    -----------

Net increase in cash and cash equivalents                                  167,314         85,074
Cash and cash equivalents at beginning of period                           171,088         64,278
                                                                       -----------    -----------
Cash and cash equivalents at end of period                             $   338,402    $   149,352
                                                                       ===========    ===========



                                       5
<PAGE>


               RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS -- CONTINUED
             For the Nine Months ended September 30, 2004 and 2003
                                   (unaudited)

                                                                          2004           2003
                                                                       -----------    -----------
Supplemental Disclosure of Cash Flow Information:
     Cash paid for interest                                            $      --      $      --
     Cash paid for income taxes                                        $      --      $      --

Supplemental Disclosure of Non-Cash Information:
     Preferred stock dividend accrued                                  $    45,929    $    48,854
     Preferred stock converted into convertible bonds                  $      --      $    85,000
     Preferred stock converted to common stock                         $    25,000    $      --
     Common stock issued as payment for accrued interest
          and accrued dividends                                        $    51,947    $      --
     Common stock issued in the LostView acqusition                    $   337,500    $      --
     Common stock issued in the GRO acquisition                        $      --      $    80,500
     Common stock issued for pending issuances                         $ 1,007,319    $      --
     Receipt of asset purchased with common stock                      $    36,000    $   124,000
     Conversion of bonds to common stock                               $   230,000    $   143,000
     Convertible bonds issued as payment for accrued interest          $      --      $    13,930
     Convertible bonds issued as payment for accrued dividends         $      --      $    17,818
     Bonds issued with beneficial conversion feature
          recorded as debt discount                                    $      --      $    33,513
     Sale of certain assets in exchange for a receivable               $      --      $   225,000
     Common stock issued for repayment of advances
          from related parties                                         $   136,667    $      --
     Conversion of advances to related parties to
          convertible bonds                                            $      --      $    15,000

</TABLE>

    See accompanying notes to consolidated financial statements

                                       6
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation and Company Information

     The  financial  statements  included  herein  have  been  prepared  by Rush
Financial  Technologies,   Inc.,  without  audit,  pursuant  to  the  rules  and
regulations of the Securities and Exchange  Commission.  Certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted  pursuant to such rules and  regulations,
although we believe that the disclosures  contained  herein are adequate to make
the  information  presented not  misleading.  In the opinion of management,  the
information furnished in the unaudited interim consolidated financial statements
reflects all  adjustments  which are ordinary in nature and necessary to present
fairly our financial  position,  results of operations  and changes in financial
position for such interim period.  These interim financial  statements should be
read in  conjunction  with our financial  statements and the notes thereto as of
and for the year ended December 31, 2003,  included in our annual report on Form
10-KSB for the year ended December 31, 2003.

     Rush  Financial   Technologies,   Inc.,  dba  RushTrade(R)  Group  ("RSHF,"
"RushTrade  Group,"  "we," "our" or "the  Company"),  is a holding  company that
operates through two primary subsidiaries.  We were formed in September 1990 and
commenced operations in March 1991 as Rushmore Capital Corporation.  In 1997, we
changed our name to Rushmore  Financial Group,  Inc., and on January 26, 2004 to
our current name.

     RushTrade Securities, Inc. ("RushTrade"),  a wholly-owned subsidiary of the
Company,   is  registered   under  federal  and  state   securities  laws  as  a
broker-dealer and is a member of the National  Association of Securities Dealers
("NASD"). RushTrade does not offer advice or trade recommendations. All customer
accounts are self-directed and strict suitability  requirements along with other
disclosures  must be met and  agreed to before the firm  accepts a new  account.
RushTrade is a "fully disclosed introducing broker-dealer," meaning that it does
not hold any customer funds or securities nor have a seat on any stock exchange.
RushTrade  "clears" its  securities  trades  through a third party,  which holds
customer funds and securities and executes trades for such transactions.

     RushGroup Technologies,  Inc., formerly RushTrade Software Services,  Inc.,
("RushGroup"),  a  wholly-owned  subsidiary  of  the  Company,  is  the  primary
technology  development  unit,  and is expected to become a Service Bureau and a
licensor of real-time market data services and various software  applications of
the  RushTrade  platform to  broker-dealers  and other  financial  institutions.
Through September 30, 2004, RushGroup had generated only minimal revenue.

     Rushmore Securities  Corporation ("RSC"), a wholly-owned  subsidiary of the
Company,  was also  registered  under  federal  and state  securities  laws as a
broker-dealer and was a member of the National Association of Securities Dealers
("NASD") during the years prior to and including  2003. RSC is largely  inactive
due to our decision to transition  away from the  traditional  retail  brokerage
business  with its lower  operation  margins and the  inherent  risks of outside
independent registered representatives offering advice and recommendations.  RSC
filed a  broker-dealer  withdrawal of membership  ("Form BD/W") with the NASD in
December 2003. RSC has no substantial revenue-producing assets and no longer has
any outside independent registered representatives.

     Rushmore  Insurance  Services,   Incorporated  ("Rushmore  Agency")  is  an
insurance agency and an affiliate of the Company by means of service agreements.
The agency formerly offered life, health, and disability insurance and annuities
through a network of agents,  most of which were terminated during 2002 and 2003
in accordance with our repositioning  plan.  Rushmore Agency is 100% owned by D.
M.  "Rusty"  Moore,  Jr.  The  Company  and  Mr.  Moore  have  entered  into  an
administrative  services agreement whereby net revenues and expenses are charged
via a management fee to Rushmore  Agency by the Company as allowed by regulatory
requirements.   Rushmore  Agency  has  been  consolidated  in  the  accompanying
consolidated  financial  statements.  Rushmore Agency is largely inactive due to
our  decision  to  transition  away  from  the  traditional   financial  service
businesses.

     We were founded as a traditional  financial  services  company,  which grew
from a start-up into a retail  brokerage  organization for the sale of insurance
and investment products.  We completed numerous acquisitions and integrated them
into a retail brokerage  organization with a nationwide account base and network
of agents and registered representatives.  Our common stock began trading on the
Nasdaq  SmallCap  Market under the symbol "RFGI"  following  its initial  public
offering  in April  1998.  On August 23,  2002 the stock moved to the Nasdaq OTC
Bulletin Board Market.

                                       7
<PAGE>

     In  2000,  we  launched  a  multi-million  dollar  proprietary   technology
development  initiative in response to the  burgeoning  market for direct access
online  trading.  After more than three years of development and successful beta
testing,  we  introduced  our direct access  technology  platform in August 2002
under our RushTrade(R) brand. Currently, we expect RushTrade revenues, growth in
new  accounts  and trade  volumes  to  continue  their  increases,  now that the
RushTrade business unit has become our primary source of revenue.

     As  part  of  our  repositioning  as  a  real-time   financial   technology
development and direct access online financial  services  company,  the board of
directors  approved a name change to Rush Financial  Technologies,  Inc.,  which
became effective upon shareholder approval and the filing of amended articles of
incorporation with the Secretary of the State of Texas in January 2004. With the
name change,  our ticker symbol on the OTC Bulletin  Board Market was changed to
"RSHF."

     The accompanying  financial  statements have been prepared assuming that we
will continue as a going concern. At September 30, 2004, our current liabilities
exceeded our current assets by $2,588,641.  Current liabilities include past due
payroll tax obligations of  approximately  $393,000 at September 30, 2004. Also,
we incurred net losses from  continuing  operations  of  $2,475,947  in 2003 and
$3,131,636 in 2002, and $1,914,781 in the first nine months of 2004. Although we
believe that we will be able to continue to raise the  necessary  funds until we
reach a sustainable  level of  profitability,  these  matters raise  substantial
doubt  about our  ability  to  continue  as a going  concern.  The  accompanying
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

     We have taken several  steps to increase cash by the use of borrowings  and
equity  offerings.  In February 2004, we commenced a private placement of common
stock to raise operating capital. The offering closed in March 2004, and we sold
538,178  shares at an average price of $0.32 per share for total net proceeds of
approximately $175,000.  Additionally, in the second quarter of 2004, we sold an
additional 406,666 shares for total net proceeds of approximately $128,000.

     On May 4, 2004, we filed with the Securities and Exchange  Commission  (the
"Commission")  a  Registration   Statement  on  Form  SB-2,  together  with  all
amendments,  schedules and exhibits thereto,  pursuant to the Securities Act for
the purpose of raising  additional  capital.  We retained the services of Invest
Linc Securities, LLC (the "Placement Agent"), to offer and sell our common stock
on a "best  efforts"  basis  which is  contingent  upon the sale of a minimum of
1,000,000 shares of our common stock and up to a maximum of 11,000,000 shares of
common stock.  The offering was withdrawn on September 28, 2004 without  raising
any funds.

     Subsequent  to closing the  offering we  commenced a private  placement  of
common stock to raise operating capital. The offering closed in October 2004 and
we sold  2,275,000  shares at an average  price of $0.20 per share for total net
proceeds of approximately $455,000.  Additionally, to date in the fourth quarter
of 2004,  we have sold an  additional  800,000  shares for total net proceeds of
approximately $160,000.

     We are  executing  a low cost  "guerrilla"  sales  and  Internet  marketing
strategy in addition to our strategic  alliances  that are  producing  sustained
rates of sales growth.  This strategy employs,  among other things, the use of a
targeted keyword search Internet advertising program,  with a timing strategy to
maximize  its  effectiveness  that is,  we  believe,  more cost  efficient  than
traditional  advertising  programs.  In addition, we have received the exclusive
endorsement of Steve  Crowley's  nationally  syndicated  American Scene Business
Talk Radio,  which has been heard live daily in over 75 major  markets from over
250 radio stations  across the USA.  Through our Internet  advertising,  we have
been seen on Google,  CBS Market Watch,  Big Charts,  Kiplinger,  CNN.com,  MSN,
C/Net, Ask Jeeves,  Elite Trader, Info Space, AOL, Alta Vista and Yahoo Finance.
Visits to our web domains,  www.daytrade.com and  www.rushtrade.com,  create the
web traffic that generates  most of our current sales leads.  We believe that we
can position  ourselves as a low cost leader in the retail  direct access market
as we  prepare  to  launch  our  products  and  services  in  the  institutional
marketplace.

2.   Use of Accounting Estimates

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

                                       8
<PAGE>
<TABLE>
<CAPTION>

3.   Industry Segment Information

     Our segments have been identified  based on products and services  offered,
as well as risks assumed,  in a manner  consistent with the data utilized by the
Chief  Executive  Officer in  evaluating  operations.  RSC and  RushTrade  offer
broker/dealer   services,  and  their  operations  have  been  included  in  the
Investment  Services segment.  Rushmore Agency's  operations,  for the most part
inactive,  have been  included in  Investment  Services.  The Software  Services
segment  is  comprised  of  RushGroup,  which  plans to offer  licensing  of the
RushTrade  direct  access  software  and other  arrangements  and is expected to
become  the  significant  focus for the  Company  in the near  future.  There is
ongoing  development  activity on the software in preparation  for launch in the
institutional  market and licensing its use to outside  entities;  however,  the
Company has received  minimal  revenue to date related to the Software  Services
segment.

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

     The following  summarizes our industry segment data of identifiable assets,
capital expenditures and depreciation and amortization:


                                                 September 30,
                                       -------------------------------
            Identifiable Assets              2004             2003
        ----------------------------   --------------   --------------
        Investment Services              $    345,699     $    356,024
        Software Services                   1,214,125        1,433,408
        Corporate                             338,306          272,344
                                       --------------   --------------
                   Total                 $  1,898,130     $  2,061,776
                                       ==============   ==============

                                Three Months Ended September 30,    Nine Months Ended September 30,
                               ---------------------------------   ---------------------------------
   Capital Expenditures               2004              2003              2004              2003
----------------------------   ---------------   ---------------   ---------------   ---------------
<S>                            <C>               <C>               <C>               <C>
Investment Services              $        --       $        --       $        --       $        --
Software Services                       77,973            27,662           139,089            82,586
Corporate                                3,019              --              12,111              --
                               ---------------   ---------------   ---------------   ---------------
           Total                 $      80,992     $      27,662     $     151,200     $      82,586
                               ===============   ===============   ===============   ===============

                                Three Months Ended September 30,    Nine Months Ended September 30,
     Depreciation and          ---------------------------------   ---------------------------------
       Amortization                   2004              2003              2004              2003
----------------------------   ---------------   ---------------   ---------------   ---------------
Investment Services              $      23,962     $      15,072     $      63,260     $      26,820
Software Services                      198,208           172,911           561,899           518,733
Corporate                                7,008            13,531            40,913            48,994
                               ---------------   ---------------   ---------------   ---------------
           Total                 $     229,178     $     201,514     $     666,072     $     594,547
                               ===============   ===============   ===============   ===============




                                        9
<PAGE>


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

                                Three Months Ended September 30,    Nine Months Ended September 30,
                               ---------------------------------   ---------------------------------
         Revenue                      2004              2003              2004              2003
----------------------------   ---------------   ---------------   ---------------   ---------------
Investment Services              $     427,514     $     366,928     $   1,476,176     $     805,115
Software Services                        8,350                 -            96,258                 -
Corporate                                2,471                 -             2,571            10,016
                               ---------------   ---------------   ---------------   ---------------
           Total                 $     438,335     $     366,928     $   1,575,005     $     815,131
                               ===============   ===============   ===============   ===============

                                Three Months Ended September 30,    Nine Months Ended September 30,
                               ---------------------------------   ---------------------------------
     Interest Expense                 2004              2003              2004              2003
----------------------------   ---------------   ---------------   ---------------   ---------------
Investment Services              $          35     $         713     $          68     $       2,292
Software Services                          111                 -               458                 -
Corporate                               35,426            60,821           184,726           149,859
                               ---------------   ---------------   ---------------   ---------------
           Total                 $      35,572     $      61,534     $     185,252     $     152,151
                               ===============   ===============   ===============   ===============

                                Three Months Ended September 30,    Nine Months Ended September 30,
                               ---------------------------------   ---------------------------------
          Expense                     2004              2003              2004              2003
----------------------------   ---------------   ---------------   ---------------   ---------------
Investment Services              $     267,509     $     136,527     $   1,183,159     $     899,995
Software Services                      316,822           172,911         1,196,615           524,566
Corporate                              469,034           270,699         1,110,012           733,838
                               ---------------   ---------------   ---------------   ---------------
           Total                 $   1,053,365     $     580,137     $   3,489,786     $   2,158,399
                               ===============   ===============   ===============   ===============

                                Three Months Ended September 30,    Nine Months Ended September 30,
                               ---------------------------------   ---------------------------------
     Net Income (Loss)                2004              2003              2004              2003
----------------------------   ---------------   ---------------   ---------------   ---------------
Investment Services              $     160,005     $     230,401     $     293,018     $     (94,880)
Software Services                     (308,472)         (172,911)       (1,100,357)         (524,566)
Corporate                             (466,564)         (270,699)       (1,107,442)         (723,822)
                               ---------------   ---------------   ---------------   ---------------
           Total                 $    (615,031)    $    (213,209)    $  (1,914,781)    $  (1,343,268)
                               ===============   ===============   ===============   ===============


4.   Reclassifications

     Certain  2003  balances  have  been  reclassified  to  conform  to the 2004
presentation.

5.   Net Loss Per Share

     Basic and  diluted  net loss per share is  computed  by  dividing  net loss
applicable  to common  shareholders  by the  weighted  average  number of common
shares outstanding for the period.  Common stock equivalents  representing stock
options and warrants,  convertible  bonds,  notes,  and preferred stock were not
included  in the  computation  of diluted net loss per share  because  they were
antidilutive.

     Net loss per  share  applicable  to  common  shareholders  for the  periods
indicated is computed using the following information:

                                Three Months Ended September 30,    Nine Months Ended September 30,
                               ---------------------------------   ---------------------------------
                                      2004              2003              2004              2003
                               ---------------   ---------------   ---------------   ---------------
Net loss                         $    (615,031)    $    (213,209)    $  (1,914,781)    $  (1,343,268)
Dividends on preferred stock           (15,647)          (15,647)          (45,929)          (48,854)
                               ---------------   ---------------   ---------------   ---------------
Net loss applicable to
common shareholders              $    (630,678)    $    (228,856)    $  (1,960,710)    $  (1,392,122)
                               ===============   ===============   ===============   ===============
Net loss per share applicable
to common shareholders           $       (0.03)    $       (0.02)    $       (0.11)    $       (0.14)
                               ===============   ===============   ===============   ===============

</TABLE>

                                       10
<PAGE>

6.   Acquisition

     We acquired LostView Development  Corporation  ("LostView") through a stock
purchase  agreement  effective  February 27, 2004, where we purchased all of the
outstanding  stock of LostView in exchange for 750,000  shares of our restricted
common stock at closing and an additional  750,000 shares to be issued all or in
part on December  31,  2004,  to the extent that  LostView's  primary  employees
fulfill  the  terms of their  employment  agreements.  LostView  is a  financial
technology  and  web  development   company  providing   professional   software
development  services  for  online  trading  and  document  management  systems.
RushTrade  Group  expects to benefit  from the  addition  of LostView in several
significant  ways.  By  utilizing  LostView's  resources,  RushGroup's  software
development  capabilities  will increase,  accelerating  its options and futures
trading development. RushGroup will also be better positioned to quickly add new
product enhancements, including the ability to capture market data directly from
the financial  exchanges.  Moreover,  RushTrade will gain  additional  levels of
redundancy  and fault  tolerance for its products and services.  RushGroup  will
also retain key employees of LostView, bringing valuable experience in real-time
financial software development, market data collection and distribution.

     The consideration for the purchase of LostView has been valued at $337,500,
based on the fair value of the stock issued on February 27, 2004. The contingent
consideration  will  be  recorded  when  the  contingency  is  resolved  and the
consideration is transferred.  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  acquisition was accounted for using the purchase method of accounting.
As such,  the assets and  liabilities  of LostView  have been  recorded at their
estimated  fair value and the results of  operations  have been  included in the
consolidated  results of  operations  from the date of  acquisition.  The excess
purchase  price  over  the fair  value of the  tangible  and  intangible  assets
acquired in the acquisition totaled $200,247 and was allocated to goodwill.

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

        Cash                                                        $ 4,446
        Accounts receivable                                          12,612
        Property and equipment                                        8,733
        Goodwill                                                    200,247
        Employment agreement (1 year amortization period)            63,453
        Intellectual Property (3 year amortization period)           50,000
        Accounts payable                                             (1,991)
                                                                -----------

        Total purchase price                                       $337,500
                                                                ===========

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

Pro Forma Results

     The following  unaudited pro forma consolidated  results of operations have
been prepared as if the  acquisition  discussed above had occurred at January 1,
2003:

                                               Nine months ended September 30,
                                               -------------------------------
                                                    2004              2003
                                               -------------    --------------
        Revenues                                $  1,755,826      $  1,084,955
        Net loss attributed to
               common shareholders              $ (1,743,571)     $ (1,385,309)
        Net loss per share attributed to
               common shareholders, basic
               and diluted                      $      (0.09)     $      (0.13)
        Weighted average shares outstanding,
                basic and diluted                 18,448,283        10,533,356



                                       11
<PAGE>
<TABLE>
<CAPTION>

7.   Convertible Bonds

     As of December  31,  2003 the  $1,500,000   offering  of 12% Senior  Secured
Convertible Bonds ("Bonds") was fully subscribe d. The Bonds bear interest at 12%
per  annum and are  convertible  into our  common  stock at a rate of 50% of the
average market price of the stock for the ten days preceding conversion, but not
less than $0.15 per share.  Principal  and interest  will be repaid on or before
December 27, 2007, if not converted  prior. We may force conversion if the stock
trades above $2.00 per share for 10 consecutive  trading days. We calculated the
beneficial conversion feature embedded in the Bonds in accordance with EITF 98-5
and EITF 00-27 and recorded  $485,175 as a debt  discount.  The debt discount is
being amortized as interest expense over the term of the Bonds. Interest expense
related to the  amortization  of the debt discount for the three and nine months
ended September 30, 2004 was $11,380 and $86,834, respectively.

     During  the  nine  months  ended  September  30,  2004,  $230,000  of Bonds
converted into 1,107,845 shares of common stock and at September 30, 2004, Bonds
payable totaled $464,185 net of unamortized debt discount of $20,815.

8.   Stock-Based Compensation

     We  account  for our  stock-based  employee  compensation  plan  using  the
intrinsic  value-based method prescribed by Accounting  Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
As such, compensation expense is recorded on the date of grant to the extent the
current market price of the underlying  stock exceeds the option exercise price.
We did not record any  compensation  expense in the three and nine months  ended
September 30, 2004 and 2003 as the exercise prices of the options issued equaled
or exceeded the fair market  value of the stock on the date of issuance.  Had we
determined  compensation based on the fair value at the grant date for its stock
options  under  Statement of Financial  Accounting  Standards  ("SFAS") No. 123,
"Accounting for Stock-Based  Compensation," as amended by SFAS No. 148, net loss
and loss per share would have been increased as indicated below:

                                                          Three Months                       Nine Months
                                                       Ended September 30,               Ended September 30,
                                                 ------------------------------    ------------------------------
                                                      2004             2003             2004             2003
                                                 -------------    -------------    -------------    -------------
<S>                                              <C>              <C>              <C>              <C>
Net loss attributable to common stockholders,
     as reported                                 $    (630,678)   $    (228,856)   $  (1,960,710)   $  (1,392,122)
Add:  Stock-based employee compensation
     expense included in reported net loss                --               --               --               --
Deduct:  Stock-based employee compensation
     expense determined under fair value based
     method                                               --               --           (133,344)            --
                                                 -------------    -------------    -------------    -------------
Pro forma net loss attributable to common
     shareholders                                $    (630,678)   $    (228,856)   $  (2,094,054)   $  (1,392,122)
                                                 =============    =============    =============    =============

Net loss per share attributable to common
     shareholders
As reported                                      $       (0.03)   $       (0.02)   $       (0.11)   $       (0.14)
                                                 =============    =============    =============    =============
Pro forma                                        $       (0.03)   $       (0.02)   $       (0.09)   $       (0.14)
                                                 =============    =============    =============    =============

</TABLE>

9.   Shareholders' Deficit

     During the first  quarter of 2004 we issued  63,458  shares of common stock
(valued  at $21,744  based on the fair value of our common  stock on the date of
issuance) to employees as compensation, holders of $203,000 of convertible bonds
elected to convert  their bonds into  989,664  shares of common  stock,  750,000
shares of common  stock  valued at  $337,500  were  issued for the  purchase  of
LostView  Development  Corporation,  9,212 shares of common stock were issued as
directors  fees  (valued  at $3,501  based on the fair value of our stock on the
date of issuance)  and $22,280 of accrued  interest and accrued  dividends  were
converted  into 99,195  shares of common  stock valued at $47,310 on the date of
issuance.  Since the fair value of common stock issued for accrued  interest and
accrued  dividends was greater than the amount owed, a loss was recorded  during
the nine months  ended  September  30,  2004 for the  difference  which  totaled
$25,030.  Additionally,  538,178 shares of common stock were issued for proceeds
of approximately $175,000.


                                       12
<PAGE>

     During the first quarter of 2004, we also issued 5,851,833 shares of common
stock to settle pending issuances from 2003.

     During the first  quarter of 2004, we granted  70,000  options to employees
and  directors.  The options have an exercise price of $0.38, a term of 10 years
and vest immediately.

     During the second  quarter of 2004 we issued 233,333 shares of common stock
(valued at $116,667  based on the fair value of our common  stock on the date of
issuance) to settle an advance of $35,000 from a related  party.  Since the fair
value of the common stock issued as repayment of the advance exceeded the amount
owed, a loss was recorded  during the nine months ended  September  30, 2004 for
the difference,  which totaled $81,667. 56,000 shares of common stock (valued at
$28,300  based on the fair  value of our common  stock on the date of  issuance)
were issued to  employees  as  compensation,  holders of $12,000 of  convertible
bonds elected to convert their bonds into 50,000 shares of common stock, holders
of 2,500 shares of preferred stock elected to convert their preferred stock into
25,000 shares of common stock, and $1,360 of accrued interest was converted into
5,665 shares of common stock valued at $2,793 on the date of issuance. Since the
fair value of common  stock  issued for accrued  interest  was greater  than the
amount owed, a loss was recorded during the nine months ended September 30, 2004
for the difference which totaled $1,433. Additionally,  406,666 shares of common
stock were issued for proceeds of approximately $128,000.

     During the third quarter of 2004 we issued 2,275,000 shares of common stock
for proceeds of $455,000. Additionally, we issued 100,000 shares of common stock
(valued  at $20,000  based on the fair value of the common  stock at the date of
issuance) as repayment of a $20,000 advance from a related party. 125,000 shares
of common  stock  (valued at $55,250 on the date of  issuance)  were  issued for
consulting.  Additionally,  76,565  shares of common  stock were  issued for the
conversion of $15,000 of bonds and as repayment of the accrued  interest related
to these bonds.

10.  Payroll Tax Obligation

     We have an estimated  federal and state payroll tax  obligation of $392,938
at September 30, 2004. We have  estimated  this  obligation to be the amounts of
tax withheld from employees and the employer  portion of Social Security Federal
Tax Obligation for the first,  second and fourth quarters of 2003 and the first,
second and third  quarters  of 2004 in  addition  to an  estimated  accrual  for
interest and  penalties.  This amount is included in accrued  expenses and other
liabilities in the accompanying consolidated balance sheets.

11.  Legal Proceedings

     From time to time the  Company  and its  subsidiaries  are engaged in legal
proceedings and arbitrations.  We believe some of these proceedings could have a
material effect upon the operations or financial  condition of the Company if we
are unsuccessful in defending against the actions.

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

     On February 10, 2004, in Great Southern Life Insurance  Company v. Dewey M.
Moore, Jr. and Rushmore Insurance Services, Inc.; Cause No. CC-04-01666-C in the
County  Court at Law No. 3,  Dallas  County,  Texas,  a  provider  of  insurance
products for whom Rushmore Agency and D. M. Moore, Jr. acted as an agent,  filed
a claim in the Dallas County Court for overpaid commissions in excess of $70,000
plus  attorney's fees and interest.  Rushmore  Agency and D. M. Moore,  Jr. have
filed a response  disputing the claim,  and a non-jury trial is set for February
10, 2005.  We believe the range of possible  loss is up to $95,000.  The Company
has not recorded a liability for this matter as we intend to  vigorously  defend
these allegations and believe the payment is not probable.

                                       13
<PAGE>

     On March 18, 2004,  in  Citicapital  Technology  Finance,  Inc. v. Rushmore
Financial Group, Inc.; Cause No. 04-02267; 101st Judicial District Court, Dallas
County,  Texas,  a vendor filed a claim in the Dallas  District Court claiming a
total of $39,810 in delinquent  lease  payments,  plus  interest and  attorney's
fees,  and return of  equipment.  We dispute  the claims and plan to  vigorously
defend  ourselves in this matter.  A non-jury trial is set for April 5, 2005. At
September  30, 2004 and December 31, 2003 we estimated  our  liability  for this
claim to be approximately $16,000, and accordingly have recorded a liability for
this amount.

     RSC was subject to a joint NASD and SEC  examination  in the second quarter
of 2002. As a result of this  examination the Company has accrued a liability of
$25,000 at  September  30, 2004 and  December 31, 2003 to account for a possible
NASD fine. This is management's best estimate of the ultimate liability to RSC.

     RSC Proceedings. In the second quarter of 2004, we terminated the following
matters,  which were previously disclosed  in the second  quarter 10QSB filed on
August 17, 2004:

          1.   Eichhof, et al. v. Rushmore Securities Corporation;  NASD Dispute
               Resolution Arbitration No. 02-07677;
          2.   E.F. (Mickey) Long, II, et al. v. Rushmore Financial Group, Inc.,
               Rushmore Securities Corporation and D.M. "Rusty" Moore;
          3.   William E. McMahon v. Rushmore  Securities  Corporation,  Chicago
               Investment Group, LLC, et al.











                                       14
<PAGE>

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

Forward-looking statements

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

1.   Recent Developments

     We have taken  several steps to increase cash through the use of borrowings
and equity  offerings.  In February  2004,  we commenced a private  placement of
common stock to raise operating capital.  The offering closed in March 2004, and
we sold  538,178  shares  at an  average  price of $0.32 per share for total net
proceeds of  approximately  $175,000.  During 2004,  approximately  $128,000 was
received  under this  placement for 406,666 shares that were sold to subscribers
at an average price of $0.32, for total offering proceeds of $303,000.

     On May 4, 2004, we filed with the Securities and Exchange  Commission  (the
"Commission")  a  Registration   Statement  on  Form  SB-2,  together  with  all
amendments,  schedules and exhibits thereto,  pursuant to the Securities Act for
the purpose of raising  additional  capital.  We retained the services of Invest
Linc Securities, LLC (the "Placement Agent"), to offer and sell our common stock
on a "best  efforts"  basis  which is  contingent  upon the sale of a minimum of
1,000,000  shares of our  common  stock and up to a maximum of  11,000,000.  The
offering was withdrawn on September 28, 2004 without raising any funds.

     Subsequent  to closing the  offering we  commenced a private  placement  of
common stock to raise operating capital. The offering closed in October 2004 and
we sold  2,275,000  shares at an average  price of $0.20 per share for total net
proceeds of approximately  $455,000 and issued 100,000 shares of common stock as
a repayment of a $20,000  advance  from a related  party.  Additionally,  in the
fourth  quarter  of 2004,  we sold an  additional  800,000  shares for total net
proceeds of approximately $160,000.

     At any level of funding,  we must be able to execute our  business  plan to
secure our long-term  survival.  We believe that we will reach  profitability in
the  next  twelve  months  if we are  able to  continue  funding  operations  to
successfully  execute our business  plan.  At the minimum  funding  level of the
$635,000  received in the September  and October 2004 private  placement we were
able to bring some of our more pressing  accounts payable current,  provide some
additional net capital to RushTrade,  provide funds for litigation,  provide for
minimal system upgrades and provide additional  working capital.  If we are able
to obtain additional  funding of $2,000,000 through a private placement or other
arrangement  we will be able to bring  our  accounts  payable  current,  provide
sufficient net capital to fund RushTrade's  continued  growth,  provide funds to
litigate  and settle  some of the  litigation,  provide  for an  increase in our
advertising to accelerate continued revenue growth,  provide sufficient funds to
upgrade our network and provide  sufficient  working capital to provide for many
foreseeable contingencies.


                                       15
<PAGE>

     Effective  February 27, 2004 we acquired LostView  Development  Corporation
("LostView").  LostView is a financial  technology and web  development  company
providing  professional  software  development  services for online  trading and
document  management systems. We expect to benefit from the addition of LostView
in several ways. By utilizing  LostView's  resources,  our software  development
capabilities  will  increase,  accelerating  our  options  and  futures  trading
development.  We will also be  better  positioned  to  quickly  add new  product
enhancements,  including  the ability to capture  market data  directly from the
financial exchanges.  Moreover, we will gain additional levels of redundancy and
fault  tolerance  for  our  products  and  services.  Under  the  terms  of  the
acquisition  agreement,  up to 1,500,000  shares of our restricted  common stock
will be issued,  depending  on various  contingencies,  in exchange  for 100% of
LostView's outstanding common stock and intellectual property assets. LostView's
existing and ongoing  development  contracts and business  relationships will be
evaluated  in  light  of our own  development  plan.  We will  also  retain  key
employees of  LostView,  bringing  valuable  experience  in real-time  financial
software development, market data collection and distribution.

     The consideration for the purchase of LostView has been valued at $337,500,
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 transferred.  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.

2.   RushTrade and RushGroup Business Summary

Overview

     Rush Financial Technologies,  Inc., dba RushTrade Group ("RSHF," "RushTrade
Group" or  "Rush")  is a holding  company  that  operates  through  two  primary
subsidiaries.  We are a Texas corporation  formed in September 1990,  commencing
operations in March 1991 as Rushmore Capital Corporation. In 1997 we changed our
name to Rushmore  Financial Group,  Inc., and on January 26, 2004 to our current
name.

     RushGroup   Technologies,   Inc.,  our  financial  technology   development
subsidiary,  develops and operates  proprietary  real-time portfolio  management
software  products,  order  management  systems,  direct access trading software
applications  and  data  services  center.  Utilizing  a number  of  proprietary
technologies  and our exclusive DART,  RushGroup  offers  real-time  market data
platforms  and  direct  access  products  to meet  the  needs of  active  online
investors,  semi-professional  traders and institutional  portfolio managers and
traders.

     RushTrade Securities, Inc., a wholly-owned subsidiary and a fully disclosed
introducing  broker/dealer  and member of NASD and SIPC,  offers  securities and
online brokerage services to its retail customers utilizing RushGroup's software
products.  RushTrade customer trades are cleared through,  and customer accounts
are held at, Penson Financial  Services,  Inc. RushTrade is registered in all 50
U.S. states and accepts customers from most foreign countries. Customer accounts
are  self-directed,  and  RushTrade  does  not  provide  advice  or  make  trade
recommendations.

     As  we  began  2002,   Rushmore  Securities  Corp.  ("RSC")  was  our  only
broker/dealer  operating  primarily  as  a  traditional  retail  brokerage  with
independent sales representatives. A traditional brokerage operation requires an
infrastructure  for support and operates on a very small margin  because most of
the revenue is paid to the  independent  representatives  as sales  commissions.
During the second quarter of 2002 we changed our focus from  traditional  retail
brokerage  to  online  brokerage  which  yields  higher  margins  and  has  less
compliance  risk.  The online  brokerage  services were to be provided using the
software  we  developed.  As a  result,  we no  longer  had the need  for  sales
representatives  and certain  customer  accounts were no longer  desired as they
were traditional retail accounts. In August of 2002 we acquired GRO Corporation,
now known as RushTrade, a registered broker/dealer.  As a result of ongoing NASD
investigations  and litigation  against RSC, among other factors,  we decided to
conduct our direct online brokerage operations through RushTrade instead of RSC.
At  that  point,  any  customer  accounts  that  fit  with  our new  focus  were


                                       16
<PAGE>

transferred  from  RSC to  RushTrade  and  all  new  business  was  directed  to
RushTrade.  We began a systematic  reduction of our independent  sales force and
their books of  business  through  sales to other  broker/dealers  and  outright
releases.  By the end of the third quarter 2002,  RSC had  eliminated its entire
sales  force  and was no  longer  originating  new  retail  brokerage  business.
Subsequent to the  acquisition of GRO, RSC revenue  consisted of renewals on old
business and trail commissions paid on mutual funds and insurance products. Late
in 2003, RSC sold most of the remaining trail commissions to Brazos Holdings, an
unrelated party, and transferred many of the remaining retail brokerage accounts
to SamCo in exchange for a portion of any revenue  generated by those  accounts,
which to date has been minimal.

     Following  more than a decade of  experience in the  traditional  financial
services industry, management over the past two years has divested or redeployed
assets in an  aggressive  re-positioning  strategy to  capitalize on the rapidly
expanding market for real-time financial services technologies and direct access
online  trading  that we believe is  revolutionizing  the online  brokerage  and
institutional  trading  industry.  In 2000, we launched a  multi-million  dollar
proprietary  technology  development  initiative  in response to the  burgeoning
market  for  direct  access  online  trading.  After  more than  three  years of
development  and  successful  beta  testing,  we  introduced  our direct  access
technology  platform  in August  2002  under  the  RushTrade  brand.  Management
currently expects RushTrade  revenues,  growth in new accounts and trade volumes
to continue their  quarter-to-quarter  increases now that the RushTrade business
unit has  become  our  primary  source of  revenue.  Management  expects  future
revenues  from  licensing   RushGroup's  software  trading  platforms  to  other
broker-dealers,  institutional investors and financial institutions, but to date
has received minimal revenue from this source.

     RushTrade's   premier  online  trading  platform  utilizes  our  exclusive,
proprietary  DART  offering  various  software  applications  and direct  access
trading  products  to  meet  the  needs  of  active  online   investors.   These
technologies  are designed to provide  real-time  quotes and high quality  trade
executions  in the U.S.  equities  markets,  including  multiple  direct  access
trading routes,  streaming real-time quotes,  charts and other advanced decision
support tools.

     The RushTrade business model integrates state-of-the-art technology and low
cost operational  infrastructure  with a trader education program that serves to
generate  end-user  customers.  We believe  our  marketing  programs,  strategic
alliances and  potential  licensing  arrangements  give us the  opportunity  for
significant revenue growth.

Products

     We develop and support software  applications for active on-line  investors
who trade in the stock market. We offer three platforms: RushTrade Direct Pro--a
"Level  II"   software-based   product,   RushTrade  Direct  Plus--a  "Level  I"
software-based   platform,  and  RushTrade  Direct--a  "Level  I"  browser-based
product.

     Level I access systems  provide current inside market  quotations,  highest
bid price and lowest  offer  price that make up the best  available  price.  Our
Level  II  system  provides  this  same  service,  as  well as  detailed  quotes
(including  each Market  Maker and ECN  posting bid and ask and other  real-time
market data), and the most recently executed trades (including the size and time
of the transactions). Our trading platforms provide customers and licensees with
real-time quotes and charts,  fast and reliable access to various  markets,  and
many other advanced decision support tools and portfolio management tools.

     Using our products,  we believe that customers purchasing or selling shares
of stock receive the best possible  price,  because  orders are sent directly to
the  particular  Exchange  or ECN in most cases  offering  the best price on any
particular stock at any given time. In contrast,  most of the traditional online
brokerage firms process customer orders through standard  browser-based software
that  routes  the  order  through  the  firm's  trading  desk or to  third-party
wholesalers with "payment for order flow"  arrangements  that normally  increase
the customers' price, and inhibit speed and quality of execution.

     RushTrade  Direct  Pro  meets  the  demands  of more  sophisticated  online
investors  and  semi-professional   traders  by  providing  the  latest  trading
technologies   and  services   available  in  an  easy-to-use   trading  system.
Significant features of the Level II product include streaming,  real-time Level
II  stock  quotes,  news,  advanced  charting,  time  and  sales,  research  and
RushTrade's   proprietary  DART.  Registered   securities   representatives  are
available by telephone to provide customer service.


                                       17
<PAGE>

     The technological  advancements made in RushTrade Direct Pro constitute the
third generation of trading software platforms.  RushTrade 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.  We believe that  RushTrade's  Level II product user
interface is designed to be much more efficient and "user friendly" than that of
the competition.

     RushTrade   Direct  Pro  software  can  be  downloaded  with  less  than  a
1.6-megabyte  requirement  versus 10 to 15  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, we believe that
RushTrade  Direct Pro is one of the only Level II software  applications  of its
kind that will operate effectively with as little as a 56K dial up connection.

     While  improving  upon  the user  interface,  we  simultaneously  developed
decision  support  tools  that  provide  many  of the  latest  advanced  trading
technologies.   These   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.

RushTrade Direct Pro features include:
     o   User defined alarms and screen alerts
     o   Streaming, real-time Level II quotes
     o   Direct access order routing utilizing DART
     o   Conditional Orders, i.e., Trailing Stops, Make Best, etc.
     o   Powerful charting package including intra-day charts with numerous
         advanced studies
     o   3G Board View (Watch list)
     o   Real-time news available
     o   A listing of several market indices with quotes
     o   Multiple Level II books
     o   Customizable tickers
     o   Real-time portfolio and account balances
     o   Multiple account and sub-account management
     o   Advanced order management and automated trading features
     o   Customizable hot key setup
     o   Time and sales studies

     RushTrade Direct Plus is the newest member of our family of products. It is
a hybrid of the Direct Pro and Direct platforms,  is available without a monthly
software fee, and was developed for the active trader that needs streaming Level
I data,  advanced charting,  real-time news and other functions available on the
Direct Pro  platform.  RushTrade  Direct  Plus  clients  have access to the same
customer service support that RushTrade Direct Pro users receive.

     RushTrade Direct Plus features include:

     o   Streaming Level I data
     o   Advanced order execution
     o   User defined alarms and screen alerts
     o   Powerful  charting  package  including  intra-day  charts with numerous
         advanced studies
     o   3G Board View (a customizable watch list for up to 30 securities)
     o   Real-time news

     RushTrade  Direct  fulfills  the needs of online  investors  by  delivering
real-time quotes and aggregated  information from third party providers combined
with RushTrade's DART. RushTrade Direct clients have access to the same customer
service  support that RushTrade  Direct Pro users receive.  RushTrade  Direct is
delivered to customers via the Internet and can be accessed  from  virtually any
computer with a web browser.


                                       18
<PAGE>

     RushTrade Direct features include:

    o    Intraday and historical charts
    o    Most active, % losers, % gainers
    o    News headlines by symbol and by industry
    o    Company and symbol lookup
    o    Market summary
    o    Online direct access order execution
    o    A listing of several market indices with quotes

Customers

     We market our products and services to the general  public via the Internet
and other media.  According to Bear Stearns & Co.,  Inc., the retail user market
is  estimated  at 20  million  and grew by 20% in 2001 and 8% in 2002  (during a
period of market decline).  Our target is the active traders in this market, who
we believe offer the greatest  profit  potential.  Since September 2002, when we
began opening  accounts in RushTrade,  until  December 2003, we have added 1,272
customer  accounts.  We are not  dependent  upon  any one  customer  or group of
customers. Our average customer account has a net asset value as of December 31,
2003 of  approximately  $30,600  and makes an average of more than 12 trades per
month.

     Our second target group is expected to be that of  institutional  customers
to license versions of RushGroup software, which is still in development.

Technology

     DART is a proprietary smart order routing technology that provides advanced
direct  access  trading  capabilities  to  online  investors.  DART is  directly
connected to multiple  Exchanges and Electronic  Communication  Networks (ECNs),
allowing customers,  in most cases, to bypass the "middlemen," brokers or Market
Makers that have  traditionally  executed  customer orders.  ECNs receive orders
that are executed against other orders within the ECN's electronic order book.

     These market participants include:

     o    Nasdaq SuperMontage(TM)System
     o    ISI with connection to the NYSE SuperDOT
     o    ABN Amro
     o    Archipelago ECN
     o    Instinet/Island ECN
     o    BRUT ECN
     o    Globe NET ECN
     o    Crown Financial
     o    NITE Trading Group
     o    TRAC ECN

     Utilizing  these  multiple  direct  connections,   DART  automatically  and
continuously  searches  the  entire  market  for the best  price  available  and
automatically  sends  the  order  to that  particular  market  participant  in a
fraction of a second. DART continues to send the order until it is completed.

Market Opportunities

     Demographic shifts and new technologies always drive change, and electronic
brokerage,  electronic  clearing and  electronic  order matching is changing the
retail  brokerage  and  institutional  trading  industry.  In  addition,  recent
regulatory  actions  are  opening  up new  opportunities  for our  products  and
services.  Various regulatory agencies are requiring changes in long established
practices, such as "payment-for-order-flow" between market makers, "soft dollar"
arrangements  to  trading  firms in  exchange  for  research  coverage  and more
recently, Mutual Fund managers' after-market hours trading practices. We believe
the dominant  market leaders can no longer rely on those  industry  practices to
justify the higher rates they generally obtained from their clients.  We believe
we are  positioning  ourselves to benefit from the convergence of these industry
trends in the  midst of all the  regulatory  changes  because  of our  efficient
proprietary product design and our low cost scalable system. We believe that new
technologies have begun to erode the dominance previously enjoyed by a few large
players  such as  Bloomberg,  ILX/Thompson  and  Reuters  and  that  new  market
opportunities  have opened up for new  providers,  like  RushGroup  who can more
efficiently and cost- effectively  deliver  financial tools and information.  We
believe that  RushTrade  will be able to capitalize  on this market  opportunity
with  our  easy-to-use,  multi-product  offering  and our low  cost  operational
infrastructure  and therefore can position RushTrade as a low cost leader in the
direct access market.


                                       19
<PAGE>

     Online trading remains a dynamic force today representing over one-third of
the total trading  volume on the New York Exchange and Nasdaq.  According to the
Bear Stearns & Co.,  Inc.  report,  there were over 19.8 million  online  retail
trading  accounts in the U.S. at the end of the fourth quarter of 2003. The more
active,  self-directed  traders, also known as semi-professional  traders or day
traders accounted for 75% of this volume.  The institutional  market consists of
proprietary and institutional  trading firms, hedge funds, mutual fund and other
private portfolio managers, banks, other financial institutions,  broker/dealer,
market data vendor and media content provider.

     According to Active Trader,  an industry  magazine,  many industry  experts
expect  direct-access to become an increasingly large part of trading operations
and hedge  funds in the U.S.  and abroad and  continue  to  dominate  retail day
trading with order volumes to increase over the next few years.  We believe that
our market  opportunity can be maximized by our multi-product  offering with its
superior  functionality and ease of use; a low cost operational  infrastructure;
and a motivated and effective customer service support team to address receptive
markets in both retail direct  access online space as well as the  institutional
market.

Growth Strategy

     We have two core businesses with two primary  channels of distribution  for
our  products  and  services.  Currently  driving our revenue  growth is our new
generation,  direct-access broker/dealer subsidiary, RushTrade Securities, Inc.,
an NASD and SIPC member that is registered in all 50 U.S. states and accepts new
customers from most foreign countries. RushTrade does not provide advice or make
trade recommendations,  all accounts are self-directed and customers meet strict
suitability requirements.

     We are  executing  a low cost  "guerrilla"  sales  and  Internet  marketing
strategy in addition to our strategic  alliances  that are  producing  sustained
rates of sales growth.  This strategy employs,  among other things, the use of a
targeted keyword search Internet advertising program,  with a timing strategy to
maximize  its  effectiveness  that is,  we  believe,  more cost  efficient  than
traditional  advertising  programs.  In addition, we have received the exclusive
endorsement of Steve  Crowley's  nationally  syndicated  American Scene Business
Talk Radio,  which has been heard live daily in over 75 major  markets from over
250 radio stations  across the USA.  Through our Internet  advertising,  we have
been seen on Google,  CBS Market Watch,  Big Charts,  Kiplinger,  CNN.com,  MSN,
C/Net, Ask Jeeves,  Elite Trader, Info Space, AOL, Alta Vista and Yahoo Finance.
Visits to our web domains,  www.daytrade.com and  www.rushtrade.com,  create the
web traffic that generates  most of our current sales leads.  We believe that we
can position  ourselves as a low cost leader in the retail  direct access market
as we  prepare  to  launch  our  products  and  services  in  the  institutional
marketplace.

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












                                       20
<PAGE>
<TABLE>
<CAPTION>

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

     As of     Total      Securities       Cash         Total         Margin        Total
     Date     Accounts      Value        Balance       Assets          Debt         Equity
---------------------------------------------------------------------------------------------
<S>          <C>         <C>           <C>           <C>           <C>            <C>
    9/30/02         95   $ 1,492,474   $ 1,671,317   $ 3,163,791   $   (27,652)   $ 3,136,139
   12/31/02        140     4,335,121     1,984,429     6,319,550      (318,152)     6,001,398
    1/31/03        190     5,608,639     4,501,291    10,109,930      (829,355)     9,280,575
    2/28/03        225    10,415,611     5,188,474    15,604,085    (1,426,446)    14,177,639
    3/31/03        301    11,552,613     4,803,235    16,355,848    (1,169,472)    15,186,376
    4/30/03        421    14,054,217     6,765,568    20,819,785    (1,468,478)    19,351,307
    5/31/03        522    15,434,623     8,304,606    23,739,229    (1,799,998)    21,939,231
    6/30/03        636    18,794,159     9,141,242    27,935,402    (2,598,923)    25,336,479
    7/31/03        751    20,419,951     9,993,480    30,413,430    (2,701,092)    27,712,338
    8/31/03        856    22,312,506    10,612,005    32,924,511    (3,148,393)    29,776,118
    9/30/03      1,001    20,740,815    10,992,947    31,733,762    (2,075,382)    29,658,380
   10/31/03      1,116    21,590,111    11,396,924    32,987,035    (1,261,640)    31,725,395
   11/30/03      1,185    23,325,859    12,693,979    36,019,838    (1,467,801)    34,552,037
   12/31/03      1,272    27,818,441    12,940,421    40,758,862    (1,811,751)    38,947,111
    1/31/04      1,422    28,824,596    14,083,292    42,907,888    (2,090,120)    40,817,768
    2/29/04      1,587    31,161,088    13,797,508    44,958,596    (2,327,977)    42,630,619
    3/30/04      1,775    31,222,653    16,627,495    47,850,149    (2,342,976)    45,507,172
    4/30/04      1,884    31,875,885    18,555,467    50,431,352    (2,665,504)    47,765,848
    5/31/04      2,007    33,398,506    18,875,300    52,273,807    (3,040,401)    49,233,406
    6/30/04      2,080    34,677,309    18,767,608    53,444,917    (3,319,895)    50,125,023
    7/31/04      2,161    30,450,573    20,212,429    50,663,002    (2,345,174)    48,317,828
    8/31/04      2,217    30,317,735    19,241,788    49,559,523    (2,551,375)    47,008,148
    9/30/04      2,297    32,766,520    18,542,788    51,309,308    (3,160,483)    48,148,825

</TABLE>




                                       21
<PAGE>

     The following  table shows the 2003 through July 2004 activity level of the
RushTrade Securities, Inc. customer base:

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


     In the third  quarter of 2005,  we expect  RushGroup to begin to produce an
additional  revenue  stream by  licensing  versions  of the  RushGroup  Software
products and by providing  real-time  financial data services to other brokerage
firms and financial institutions.  RushGroup plans to offer to the institutional
market, a $14 billion industry,  a new-age platform that is efficient,  complete
and price competitive.  As the industry  consolidates both vendors and costs, we
believe that we can position  ourselves to obtain  market share from the current
industry leaders through aggressive  marketing,  competitive  pricing,  flexible
deployment, strategic alliances, efficient delivery and creative consolidation.

3.   Results of Continuing Operations

Three Months Ended September 30, 2004 and 2003

Revenues

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

                                        Three Months Ended September 30,
                                       ---------------------------------
                 Revenue                      2004              2003
        ----------------------------   ---------------   ---------------
        Investment Services              $     427,514     $     366,928
        Software Services                        8,350                 -
        Corporate                                2,471                 -
                                       ---------------   ---------------
                   Total                 $     438,335     $     366,928
                                       ===============   ===============

     Total revenue for the third quarter increased $71,407, or 19%, from 2003 to
2004.  This  increase  reflects  our  repositioning  as a  real  time  financial
technology  development and direct access online financial services company from
a traditional  financial services holding company with traditional insurance and
broker/dealer   services  and  reflects  the  continued  increase  in  RushTrade
revenues.

                                       22
<PAGE>

     In the third quarter, Investment Services revenue increased $60,586 or 17%,
from 2003 to 2004.  The  increase  in  revenue  is  primarily  due to  increased
customer  accounts  and trade volume  revenues of the  RushTrade  direct  access
on-line  business unit.  Overall market  conditions may have also contributed to
the overall increase in Investment Services revenue.

     RushGroup   Technologies,   Inc.,  our  financial  technology   development
subsidiary,  plans to license  later  versions of the  RushTrade  direct  access
software and provide  real-time  financial  data  services to the  institutional
market and broker/dealers and financial institutions which is expected to become
a  significant  stream of  revenue  for us in the  future.  There is an  ongoing
development  initiative  on the  software to modify and enhance  versions of the
RushTrade  software for  licensing to this market,  however we have not received
any revenue  from this  source.  We expect to be able to market the  software to
outside entities in the third quarter of 2005. The increase in Software Services
revenue is related to the acquisition of LostView.

Expenses

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

                                        Three Months Ended September 30,
                                       ---------------------------------
                  Expense                     2004              2003
        ----------------------------   ---------------   ---------------
        Investment Services              $     267,509     $     136,527
        Software Services                      316,822           172,911
        Corporate                              469,034           270,699
                                       ---------------   ---------------
                   Total                 $   1,053,365     $     580,137
                                       ===============   ===============

     Total third quarter expenses  increased $473,228 or 82%, from 2003 to 2004.
Investment  Services expenses  increased 96%, or $130,982 and Corporate expenses
increased  73%, or $198,335.  In 2003 Software  Services  expenses  consisted of
amortization of software  development costs and had remained constant since July
2002 but increased $143,911 or 83%, from 2003 to 2004.

     Investment  Services expenses in the third quarter increased  $130,982,  or
96%,  from 2003 to 2004.  This increase is due to a one time gain on the sale of
certain  assets of  $225,000  in 2003  offset by a  decrease  due to  allocating
communication  and data related expenses to Software  Services in 2004 that were
charged  to  Investment  Services  in 2003.  We  believe  that  this is a better
reflection of our two core  businesses  and that this  positions  them as future
profit centers.

     Software  Services  has ongoing  development  activity  on the  software to
enhance  its use and  ability to license  its  proprietary  products  to outside
entities;  however, we have not received any revenue from this source.  Software
Services expenses in 2003 consisted of amortization of the capitalized  software
development costs.  Expenses in 2004 reflect the acquisition of LostView and the
allocation of expenses that were being charged to Investment Services in 2003 to
Software Services.

     Corporate  expenses in the third quarter increased  $198,335,  or 73%, from
2003 to 2004.  This is primarily due to increased  legal,  accounting  and other
costs related to the 2004 offering which was withdrawn in September 2004.

Net loss

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

                                        Three Months Ended September 30,
                                       ---------------------------------
             Net Income (Loss)                2004              2003
        ----------------------------   ---------------   ---------------
        Investment Services*             $     160,005     $     230,401
        Software Services                     (308,472)         (172,911)
        Corporate                             (466,564)         (270,699)
                                       ---------------   ---------------
                   Total                 $    (615,031)    $    (213,209)
                                       ===============   ===============

*The net income from  investment  services for the three months ended  September
30, 2003 includes  $278,891  resulting from a gain on the sale of certain assets
and a gain on the settlement of liabilities.

                                       23
<PAGE>

     Net losses in the third quarter increased  $401,822,  or 188%, from 2003 to
2004. The net income from  Investment  Services  decreased $70,431 from 2003 to
2004. This included a one-time gain of $225,000 on the sale of certain assets to
Brazos  Holdings  and  a  one-time  gain  of  $53,891  from  the  settlement  of
liabilities in 2003.  Additionally,  in 2004 we allocated communication and data
related  expenses  to  the  Software  Services  segment  that  were  charged  to
Investment  Services  in 2003.  The net loss from  Software  Services  increased
$135,561 or 78% from 2003 to 2004.  The  increase in the  Software  Services net
loss is  attributable  to the  allocation  of  Communication  and  data  related
expenses  to this  segment  that were  charged to  Investment  Services in 2003.
Corporate  net loss  increased  from  $270,699  to  $466,564.  The  increase  in
Corporate net loss is in part due to the increased  legal,  accounting and other
costs related to the 2004 offering which was withdrawn in September 2004,  along
with an increase  in  consulting  expense in  connection  with a new  consulting
arrangement that did not exist in 2003.

Nine Months Ended September 30, 2004 and 2003

Revenues

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

                                         Nine Months Ended September 30,
                                      --------------------------------------
              Revenue                      2004                  2003
    ----------------------------      ----------------      ----------------
    Investment Services                 $    1,476,176        $      805,115
    Software Services                           96,258                     -
    Corporate                                    2,571                10,016
                                      ----------------      ----------------
               Total                    $    1,575,005        $      815,131
                                      ================      ================

     Total revenue for the first nine months  increased  $759,874,  or 93%, from
2003 to 2004. This increase  reflects the acceptance of the direct access online
financial services model and the addition of LostView related revenue.

     Investment Services revenue increased $671,062,  or 83%, from 2003 to 2004.
The increase in revenue is primarily due to the continued development and launch
of our RushTrade direct access on-line trading system. Overall market conditions
may have  also  contributed  to the  overall  increase  in  Investment  Services
revenue.  We believe that this is a better reflection of our two core businesses
and positions them as future profit centers.

     RushGroup   Technologies,   Inc.,  our  financial  technology   development
subsidiary,  plans to license  versions of the RushTrade  direct access software
and  provide  real-time  financial  data  services to other  broker/dealers  and
financial  institutions  which is  expected  to become a  significant  stream of
revenue.  There is an ongoing  development  initiative on the software to modify
and enhance  versions of the  RushTrade  software for  licensing to this market,
however we have not received any revenue from this source.  We expect to be able
to market the software to other  entities in the third  quarter of 2005.  All of
the Software  Services  revenue  relates to the  acquisition  of LostView in the
first quarter of 2004.

     Corporate  revenue decreased from 2003 to 2004 primarily due to the sale of
the URL www.gro.com for $10,000 in 2003. This was a one-time event. Corporate is
not a significant source of revenue.

Expenses

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

                                           Nine Months Ended September 30,
                                      --------------------------------------
              Expense                      2004                  2003
    ----------------------------      ----------------      ----------------
    Investment Services                 $    1,183,159        $      899,995
    Software Services                        1,196,615               524,566
    Corporate                                1,110,012               733,838
                                      ----------------      ----------------
               Total                    $    3,489,786        $    2,158,399
                                      ================      ================


                                       24
<PAGE>

     Total expenses increased  $1,052,496 or 43%, from 2003 to 2004.  Investment
Services expenses  increased 31%, or $283,164 and Corporate  expenses  increased
51%, or $376,174. Software Services expenses increased $672,049, or 128%.

     Investment Services expenses increased $283,164, or 31%, from 2003 to 2004.
As Investment Service revenue increased the infrastructure needed to support the
increase  in  revenue  caused  a  related  increase  in  expenses,  but this was
partially  offset by the  allocation of expenses that were charged to Investment
Services  in 2003 to  Software  Services in 2004.  Additionally,  2003  expenses
include a one time gain or sale of certain assets of $225,000.

     Software  Services  has ongoing  development  activity  on the  software to
enhance its use to outside entities;  however,  we have not received any revenue
from this  source.  In 2003  amortization  for  three  quarters  of  capitalized
software  development  cost was the only  expense.  Software  Services  expenses
reflect  the  addition  of the cost  related to  LostView  in 2004 along with an
allocation of other expenses that were charged to Investment Services in 2003.

     Corporate expenses increased  $376,174,  or 51%, from 2003 to 2004. This is
primarily due to increased legal,  accounting and other cost related to the 2004
offering which was withdrawn in September 2004, an increase in connection with a
new  consulting  agreement  that did not  exist  in 2003 and a one time  loss on
settlement of liabilities of $108,000 in 2004.

Net loss

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

                                           Nine Months Ended September 30,
                                      --------------------------------------
         Net Income (Loss)                    2004                  2003
    ----------------------------      ----------------      ----------------
    Investment Services*                $      293,018        $      (94,880)
    Software Services                       (1,100,357)             (524,566)
    Corporate                               (1,107,442)             (723,822)
                                      ----------------      ----------------
               Total                    $   (1,914,781)       $   (1,343,268)
                                      ================      ================

*The net loss from  investment  services for the nine months ended September 30,
2003 includes $278,891 resulting from a gain on the sale of certain assets and a
gain on the settlement of liabilities.

     Net  losses  increased  $571,513  or 43%,  from  2003 to  2004.  Investment
Services  had net  income of  $293,018  in 2004  versus a net loss of $94,880 in
2003.  The  increase in  Investment  Services  net income in 2004  reflects  our
repositioning as a real time financial technology  development and direct access
online financial services company which yields higher margins from a traditional
financial  services  holding  company which yield lower margins and reflects the
continued increase in RushTrade revenues.  Additionally, the Investment Services
expenses  decreased  due to the  allocation  of  communication  and data related
expenses  to the  Software  Services  segment  in 2004 that were  charged to the
Investment  Services  segment  in 2003.  We  believe  this  reallocation  better
reflects our two core businesses and the cost associated with them. The Software
Services net loss increased  $575,791 from 2003 to 2004. This increase is due to
the  reallocation  of  communication  and data related  expenses to the Software
Services segment in 2004 that were charged to the Investment Services segment in
2003. Additionally, in 2004, the Software Services segment includes the activity
of LostView.  Corporate  net loss  increased  from $723,822 to  $1,107,442.  The
increase in the Corporate net loss is the result of increased legal,  accounting
and other costs  related to the 2004  offering  that was  withdrawn in September
2004, an increase in  consulting  expense in  connection  with a new  consulting
agreement  that  did not  exist in 2003 and a one  time  loss on  settlement  of
liabilities of $108,000 in 2004.

Liquidity

    Cash Flows from Operating  Activities - We incurred a net loss of $1,914,781
for the nine months ended  September  30, 2004.  This amount  included  non-cash
expenses totaling $992,684.  Cash flows from operating activities were increased
by a decrease in  receivables  of $2,072,  an  increase  in accounts  payable of
$64,069 and an increase in accrued  expenses and other  liabilities  of $394,034
and decreased by an increase in prepaid  expenses and deposits of $12,238;  thus
yielding a net cash flow used in operating activities of $474,160. We incurred a
net loss of $1,343,268 for the nine months ended September 30, 2003. This amount
included net non-cash  expenses  totaling  $358,301.  Cash flows from  operating
activities  increased by an decrease in receivables of $18,690 and by a decrease
in prepaids and deposits of $44,130 offset by a net increase in accounts payable
and  accrued  expenses  of  $268,656  due to our lack of  available  cash;  thus
yielding a net cash flow used in operating activities of $653,491.


                                       25
<PAGE>

    Cash  Flows  From  Investing  Activities  -  Cash  flow  used  in  investing
activities during the nine months ended September 30, 2004 was $139,089 from the
capitalization  of  development  costs  related to the  RushTrade  direct access
software  RushTrade Back Office Tool and $12,211 from the purchase of equipment.
This outflow was  partially  offset by the receipt of $4,446 of cash acquired in
the acquisition of LostView.  The net cash used by investing  activities for the
first nine months of 2004 was $146,754.  Cash flow used in investing  activities
during  the  nine  months  ended   September  30,  2003  was  $82,586  from  the
capitalization  of  development  costs  related to the  RushTrade  direct access
software  RushTrade Back Office Tool.  This outflow was offset by the receipt of
$150,000 of proceeds from the sale of certain  assets.  The net cash provided by
investing activities for the first nine months of 2003 was $67,414.

    Cash  Flows  from  Financing  Activities  -  During  the nine  months  ended
September 30, 2004, we raised $758,000 from the sale of common stock and $43,000
from the sale of 12% Senior Secured  Convertible  Bonds.  Additionally,  we paid
$12,777 as payments on notes payable. During the nine months ended September 30,
2003, we raised $645,000 from the sale of 12% Senior Secured  Convertible  Bonds
and received net advances from related parties totaling $80,000. These increases
were off set by repayments of notes payable  totaling  $16,099 and a decrease in
the Company's bank overdraft of $37,750 during the first quarter of 2003.

     Our cash and cash equivalents at September 30, 2004 were $338,397,  and our
current liabilities exceeded current assets by $2,588,641.  Our requirements for
normal cash  expenditures,  as well as costs for the further  development 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 we
will continue as a going concern. At September 30, 2004, our current liabilities
exceeded our current  assets by  $2,588,641.  Also,  we incurred net losses from
continuing  operations of $3,131,636 in 2002, $2,475,947 in 2003, and $1,914,781
in the first nine months of 2004.  Although  we believe  that we will be able to
continue  to raise the  necessary  funds until we reach a  sustainable  level of
profitability,  these  matters  raise  substantial  doubt  about our  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

     We have taken  several steps to increase cash through the use of borrowings
and equity  offerings.  In February  2004,  we commenced a private  placement of
common stock to raise operating capital.  The offering closed in March 2004, and
the Company sold 538,178 shares at an average price of $0.32 per share for total
net proceeds of approximately $175,000.  Additionally,  in the second quarter of
2004, an additional  406,666 shares were sold to subscribers at an average price
of $0.32, for total offering proceeds of $303,000.

     On May 4, 2004, we filed with the Securities and Exchange  Commission  (the
"Commission")  a  Registration   Statement  on  Form  SB-2,  together  with  all
amendments,  schedules and exhibits thereto,  pursuant to the Securities Act for
the purpose of raising  additional  capital.  We retained the services of Invest
Linc Securities, LLC (the "Placement Agent"), to offer and sell our common stock
on a "best  efforts"  basis  which is  contingent  upon the sale of a minimum of
1,000,000 shares of our common stock and up to a maximum of 11,000,000 shares of
common stock.  The offering was withdrawn on September 28, 2004 without  raising
any funds.

     Subsequent  to closing the  offering we  commenced a private  placement  of
common stock to raise operating capital. The offering closed in October 2004 and
we sold  2,275,000  shares at an average  price of $0.20 per share for total net
proceeds of approximately $455,000. Additionally, in the fourth quarter of 2004,
we sold an  additional  800,000  shares for total net proceeds of  approximately
$160,000.

     At any level of funding,  we must be able to execute our  business  plan to
secure our long-term  survival.  We believe that we will reach  profitability in
the  next  twelve  months  if we are  able to  continue  funding  operations  to
successfully  execute our business  plan.  At the minimum  funding  level of the
$635,000 raised in the September and October 2004 private placement we were able
to bring  some of our more  pressing  accounts  payable  current,  provide  some
additional  net capital to  RushTrade,  provide  funds to  litigate  some of the
litigation,  provide for minimal  system  upgrades  and provide some much needed
working capital.  If we are able to obtain  additional  funding of $2,000,000 in
another  private  placement or other  arrangements  we will be able to bring our
accounts  payable  current,  provide  sufficient net capital to fund RushTrade's
continued  growth,  provide funds to litigate and settle some of the litigation,
provide for an increase  in our  advertising  to  accelerate  continued  revenue
growth,  provide  sufficient funds to upgrade our network and provide sufficient
working capital to provide for many foreseeable contingencies.

                                       26
<PAGE>

     Our sales and  marketing  efforts are  beginning to show  results.  We have
grown from 190 accounts in January 2003 with approximately  $10,000,000 in total
assets  producing  about 3,400 trades,  to 2,797 accounts in September 2004 with
approximately  $51,000,000 in total assets producing about 15,000 trades.  Since
the  release of the  RushTrade  products  in late  2002,  the  increases  in new
accounts,  share/trade  volume  and  customer  account  assets  has  driven  our
increased   revenue.   We  believe  that  we  have  the  low  cost   operational
infrastructure and a relatively low threshold to reach profitability in the near
future.  There can be no assurances  that the steps we have taken will result in
our being able to settle our  liabilities as they become due, or that we will be
able to generate  revenues or cash flows from  financings  sufficient to support
our operations in the short term.


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 its 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.







                                       27
<PAGE>

PART II.      OTHER INFORMATION

Item 1.  Legal Proceedings

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

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

     On February 10, 2004, in Great Southern Life Insurance  Company v. Dewey M.
Moore, Jr. and Rushmore Insurance Services, Inc.; Cause No. CC-04-01666-C in the
County  Court at Law No. 3,  Dallas  County,  Texas,  a  provider  of  insurance
products for whom Rushmore Agency and D. M. Moore, Jr. acted as an agent,  filed
a claim in the Dallas County Court for overpaid commissions in excess of $70,000
plus  attorney's fees and interest.  Rushmore  Agency and D. M. Moore,  Jr. have
filed a response  disputing the claim,  and a non-jury trial is set for February
10, 2005.  We believe the range of possible loss is up to not more than $95,000.
The  Company  has not  recorded  a  provision  for this  matter  as we intend to
vigorously defend these allegations and believe the payment is not probable.

     On March 18, 2004,  in  Citicapital  Technology  Finance,  Inc. v. Rushmore
Financial Group, Inc.; Cause No. 04-02267; 101st Judicial District Court, Dallas
County,  Texas,  a vendor filed a claim in the Dallas  District Court claiming a
total of $39,810 in delinquent  lease  payments,  plus  interest and  attorney's
fees,  and return of equipment.  We dispute the amount of the claims and plan to
vigorously defend ourselves in this matter. A non-jury trial is set for April 5,
2005.  At December  31, 2003 we  estimated  our  liability  for this claim to be
approximately  $16,000,  and  accordingly  have  recorded a  liability  for this
amount.

     RSC was subject to a joint NASD and SEC  examination  in the second quarter
of 2002. As a result of this  examination the Company has accrued a liability of
$25,000 at  September  30, 2004 and  December 31, 2003 to account for a possible
NASD fine. This is management's best estimate of the ultimate liability to RSC.

     RSC Proceedings. In the second quarter of 2004, we terminated the following
matters, which were previously  disclosed  in the second  quarter 10QSB filed on
August 17, 2004:

          1.   Eichhof, et al. v. Rushmore Securities Corporation;  NASD Dispute
               Resolution Arbitration No. 02-07677;
          2.   E.F. (Mickey) Long, II, et al. v. Rushmore Financial Group, Inc.,
               Rushmore Securities Corporation and D.M. "Rusty" Moore;
          3.   William E. McMahon v. Rushmore  Securities  Corporation,  Chicago
               Investment Group, LLC, et al.

Item 2.  Changes in securities and use of proceeds

Recent Sales of Unregistered Securities

     During the third quarter of 2004 we issued  100,000  shares of common stock
to settle an advance of $20,000 from a related party (valued at $20,000 based on
the fair value of our common stock on the date of issuance).  Holders of $15,000
of convertible bonds elected to convert their bonds into 68,181 shares of common
stock,  and $1,844 of accrued interest was converted into 8,384 shares of common
stock.  Additionally,  2,275,000 shares of common stock were issued for proceeds
of approximately  $455,000. An additional 125,000 shares of common stock (valued
at $55,250 on the date of issuance) were issued for consulting services.

Item 3.  Defaults Upon Senior Securities

     None.

                                       28
<PAGE>

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

     None.

Item 5.  Other Information

     None.














                                       29
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

a.       Exhibits.

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

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

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

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

     b.      Reports on Form 8-K.

     On  October  12,  2004  the  Company  filed a  Current  Report  on Form 8-K
     reporting a sale of unregistered equity securities.

     On  November  5,  2004  the  Company  filed a  Current  Report  on Form 8-K
     reporting its Monthly Trade Volume Press Release.



                                    SIGNATURE

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

                                    Rush Financial Technologies, Inc.

Dated: November 15, 2004            By /s/ Dewey M. Moore, Jr.
                                    -----------------------------------
                                    Dewey M. Moore, Jr.
                                    Chief Executive Officer

Dated: November 15, 2004            By /s/ Randy Rutledge
                                    -----------------------------------
                                    Randy Rutledge
                                    Chief Financial Officer







                                       30