UNITED STATES
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                   FORM 10-QSB

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

                  For the Quarterly Period Ended March 31, 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
                 -----------------------------------------------
                                  972-450-6000
                 -----------------------------------------------
                 (Issuer's telephone number, including area code)

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

                                 Yes XXX  No ____

         State the number of shares  outstanding of each of the issuer's classes
of common equity as of March 31, 2004:  18,261,934 shares of common stock, $0.01
par value.

         Transitional Small Business Disclosure Format;

                                 Yes ____ No XXX


<PAGE>


PART I.  FINANCIAL INFORMATION
Item 1.           Financial Statements
























                                       2
<PAGE>
<TABLE>
<CAPTION>

                    RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES

                               CONSOLIDATED BALANCE SHEETS

                                                                               (Unaudited)
                                                                                March 31,     December 31,
                                        ASSETS                                    2004            2003
                                                                              ------------    ------------
<S>                                                                           <C>             <C>
Current assets
      Cash and cash equivalents                                               $    148,951    $    171,088
      Accounts receivable                                                           43,154          17,008
      Other receivables                                                               --            43,000
      Prepaid expenses and deposits                                                 93,337          84,043
                                                                              ------------    ------------
            Total current assets                                                   285,442         315,139
                                                                              ------------    ------------
Capitalized software development costs, net of
      accumulated amortization                                                   1,145,184       1,288,245
Property and equipment, net of accumulated depreciation                             82,457          81,359
Intangibles, net                                                                   340,953         213,500
Deferred financing fees, net                                                        16,166          19,630
Goodwill                                                                           200,247            --
                                                                              ------------    ------------
            Total assets                                                      $  2,070,449    $  1,917,873
                                                                              ============    ============

                          LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities
      Accounts payable                                                        $    804,271    $    788,826
      Accrued expenses and other liabilities                                     1,187,580         967,817
      Liabilities acquired in 2001 acquisition                                     332,098         332,098
      Convertible notes payable to related parties                                 185,000         185,000
      Notes payable                                                                 26,387          31,452
      Advances from related parties                                                 55,000          55,000
                                                                              ------------    ------------
            Total current liabilities                                            2,590,336       2,360,192
                                                                              ------------    ------------

Convertible notes payable (including $130,867 and $122,007 due
      to related parties),  net of unamortized debt discount of $5,683
      and $15,872 at March 31, 2004 (unaudited) and December 31, 2003,
      respectively                                                                 294,317         284,128
Convertible bonds payable, net of unamortized debt discount of
      $49,884 and $107,649 at March 31, 2004 (unaudited) and
       December 31, 2003, respectively                                             462,116         564,351

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; 54,480
            shares issued and outstanding; liquidation preference of $10
            per share                                                              544,800         544,800
      Common stock - $0.01 par value, 50,000,000, and 10,000,000 shares
            authorized  at March 31, 2004 and December  31, 2003,
            respectively; 18,261,934 and 9,960,444  shares issued and
            outstanding at March 31, 2004 and December 31, 2003,
            respectively                                                           182,619          99,604
      Common stock subscriptions receivable                                         (3,277)         (3,277)
      Common stock pending issuance                                                   --         1,050,319
      Common stock issued for assets not yet received                                 --           (36,000)
      Additional paid in capital                                                14,465,122      12,768,184
      Accumulated deficit                                                      (16,606,214)    (15,855,059)
                                                                              ------------    ------------
            Total shareholders' deficit                                         (1,276,320)     (1,290,799)
                                                                              ------------    ------------
            Total liabilities and shareholders' deficit                       $  2,070,449    $  1,917,873
                                                                              ============    ============

</TABLE>

                See accompanying notes to consolidated financial statements

                                       3
<PAGE>
<TABLE>
<CAPTION>

               RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months ended March 31, 2004 and 2003
                                   (unaudited)

                                                                    2004            2003
                                                                ------------    ------------
<S>                                                             <C>             <C>
 Revenue:
         Investment services                                    $    528,991    $    173,798
         Software services                                            44,790            --
                                                                ------------    ------------
                      Total revenue                                  573,781         173,798

 Expenses:
         Investment services                                         464,378         116,996
         Software services                                           268,876            --
         General and administrative                                  254,897         382,053
         Depreciation and amortization                               208,392         194,271
                                                                ------------    ------------
                      Total expenses                               1,196,543         693,320
                                                                ------------    ------------

 Operating loss                                                     (622,762)       (519,522)

Other expenses:
         Interest expense                                           (103,363)        (36,084)
         Loss on settlement of liabilities                           (25,030)           --
                                                                ------------    ------------

 Net loss                                                       $   (751,155)   $   (555,606)
                                                                ============    ============


Basic and diluted net loss per share attributable to common
         shareholders                                           $      (0.05)   $      (0.06)
                                                                ============    ============

Weighted average common shares outstanding, basic and diluted     16,833,181       9,698,710
                                                                ============    ============


</TABLE>

     See accompanying notes to consolidated financial statements

                                       4
<PAGE>
<TABLE>
<CAPTION>

               RUSH FINANCIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months ended March 31, 2004 and 2003
                                   (unaudited)

                                                                                2004           2003
                                                                            -----------    -----------
<S>                                                                         <C>            <C>
Cash flows from operating activities:
     Net loss                                                               $  (751,155)   $  (555,606)
     Adjustments to reconcile net loss to net cash used in operating
          activities:
          Common stock issued for compensation and services                      25,245           --
          Depreciation and amortization                                         186,392        188,438
          Loss on settlement of liabilities                                      25,030           --
          Amortization of deferred financing fees                                 3,464          3,464
          Amortization of debt discount                                          67,954          2,946
          Amortization of intangible                                             22,000          5,833
          Change in assets and liabilities, net of effect of acquisition:
              (Increase) decrease in assets:
                  Accounts receivable                                           (13,533)        (5,092)
                  Other receivable                                               43,000           --
                  Prepaid expenses and deposits                                  (9,294)        52,817
               Increase (decrease) in liabilities:
                 Accounts payable                                                13,454         49,427
                 Accrued expenses and other liabilities                         226,621         67,510
                                                                            -----------    -----------
Net cash used in operating activities                                          (160,822)      (190,263)
                                                                            -----------    -----------

Cash flows from investing activities:
     Cash acquired in acquisition                                                 4,446           --
     Purchase of equipment                                                       (5,678)          --
     Capitalization of software development costs                               (30,018)       (26,814)
                                                                            -----------    -----------
Net cash used in investing activities                                           (31,250)       (26,814)
                                                                            -----------    -----------

Cash flows from financing activities:
     Bank overdraft                                                                --            6,327
     Proceeds from sale of common stock                                         175,000           --
     Payments on notes payable                                                   (5,065)        (7,375)
     Advances from related parties                                                 --           95,000
     Proceeds from convertible bonds                                               --           65,000
                                                                            -----------    -----------
Net cash provided by financing activities                                       169,935        158,952
                                                                            -----------    -----------

Net decrease in cash and cash equivalents                                       (22,137)       (58,125)
Cash and cash equivalents at beginning of period                                171,088         64,278
                                                                            -----------    -----------
Cash and cash equivalents at end of period                                  $   148,951    $     6,153
                                                                            ===========    ===========

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                                       $    15,422    $    17,560
     Preferred stock converted into convertible bonds                       $      --      $    85,000
     Common stock issued as payment for accrued interest and accrued
          dividends                                                         $    47,310    $      --
     Common stock issued in the Lostview acquisition                        $   337,500    $      --
     Receipt of asset purchased with common stock                           $    36,000    $      --
     Conversion of bonds into common stock                                  $   160,000    $      --
     Common stock issued for pending issuances                              $ 1,050,319    $      --

</TABLE>

        See accompanying notes to consolidated financial statements

                                       5
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation and Company Information

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

     RushGroup  Technologies,  Inc.  ("RushGroup"),   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 its exclusive  Direct Access  Routing  Technology
(DART),  RushGroup  offers  real-time  market data  platforms  and direct access
products to meet the needs of active online investors, semi-professional traders
or institutional portfolio managers and traders.

     RushTrade Securities, Inc. ("RushTrade"),  a wholly-owned subsidiary of the
Company 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.

     The Company was 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.  Management  completed numerous  acquisitions
and  integrated  them into a retail  brokerage  organization  with a  nationwide
account base and network of agents and registered representatives. The Company's
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.

     In 2000,  RushTrade  Group  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,  the Company  introduced its direct access  technology
platform  in August 2002 under its  RushTrade(R)  brand.  Currently,  management
expects RushTrade revenues, growth in new accounts and trade volumes to continue
its  quarter-to-quarter  increases,  now that the  RushTrade  business  unit has
become the Company's primary source of revenue.

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

     The accompanying  financial statements have been prepared assuming that the
Company  will  continue as a going  concern.  At March 31, 2004,  the  Company's
current liabilities exceeded its current assets by $2,304,894. Also, the Company
had net losses from  continuing  operations of $2,475,947 in 2003 and $3,131,636
in 2002,  and  $751,155  in the first  quarter  of 2004.  Although  the  Company
believes that it will be able to continue to raise the necessary  funds until it

                                       6
<PAGE>

reaches a sustainable  level of  profitability,  these matters raise substantial
doubt about the Company's ability to continue as a going concern.  The financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

     The  Company  has  taken  several  steps  to  increase  cash  by the use of
borrowings  and  equity.  In  February  2004,  the  Company  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.

     On May 4,  2004,  the  Company  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.  The Company  retained  the
services  of Invest Linc  Securities,  LLC and  RushTrade  Securities,  Inc.,  a
wholly-owned  subsidiary of the Company  (together the "Placement  Agents"),  to
offer and sell the common stock of the Company 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 11,660,000  shares of common stock.  Assuming the minimum
offering is attained, net proceeds of $400,000,  Management believes the Company
can fund  execution of the  RushTrade  business  plan during  2004,  but will be
unable to meet any  contingent  liability  obligations or enhance and market the
RushGroup software products.  If the Company is able to raise the maximum amount
of the  offering,  net  proceeds  of  approximately  $5,000,000,  and is able to
successfully execute the business plan, Management believes the Company will not
need additional financing in the foreseeable future.

     RushTrade is executing a low-cost  "guerrilla" sales and marketing strategy
in addition to its  strategic  alliances  that are  producing  desired  results.
RushTrade's  domain  names,  www.daytrade.com,  and  www.rushtrade.com  have web
traffic that generates most of its current sales leads.  RushTrade believes that
it can position  itself as a low-cost leader in the retail direct access "space"
as the Company prepares to launch  RushGroup  products and financial market data
services in the institutional marketplace later in 2004.

2.   Use of Accounting Estimates

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

3.   Industry Segment Information

     The Company's  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.  Rushmore  Securities
Corporation  ("RSC")  and  RushTrade  offer  broker/dealer  services,  and their
operations  have  been  included  in  the  Investment  Services  segment.  RSC's
operations,  for the most  part  inactive,  have  been  included  in  Investment
Services. The Software Services segment is comprised of RushGroup,  which offers
licensing of the RushTrade direct access software and other  arrangements and is
expected to become the significant focus for the Company in the future. There is
ongoing  development  activity  on the  software  to enhance  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  the  Company's   identifiable  assets,  capital
expenditures  and  depreciation  and  amortization by industry segment as of the
dates indicated:

                                       7
<PAGE>

                                                  March 31,
                                --------------------------------------------
    Identifiable Assets                2004                    2003
----------------------------    --------------------    --------------------
Investment Services               $         181,043       $         345,626
Software Services                         1,764,375               1,723,458
Corporate                                   125,031                  71,020
                                --------------------    --------------------
           Total                  $       2,070,449       $       2,140,104
                                ====================    ====================

                                        Three Months Ended March 31,
                                --------------------------------------------
   Capital Expenditures                2004                    2003
----------------------------    --------------------    --------------------
Investment Services               $               -       $               -
Software Services                            30,018                  26,814
Corporate                                     5,678                       -
                                --------------------    --------------------
           Total                  $          35,696       $          26,814
                                ====================    ====================

     Depreciation and                   Three Months Ended March 31,
                                --------------------------------------------
       Amortization                    2004                    2003
----------------------------    --------------------    --------------------
Investment Services               $           7,632       $           9,782
Software Services                           173,672                 172,911
Corporate                                    27,088                  11,578
                                --------------------    --------------------
           Total                  $         208,392       $         194,271
                                ====================    ====================


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

                                        Three Months Ended March 31,
                                --------------------------------------------
          Revenue                      2004                    2003
----------------------------    --------------------    --------------------
Investment Services               $         528,991       $         173,798
Software Services                            44,790                       -
Corporate                                         -                       -
                                --------------------    --------------------
           Total                  $         573,781       $         173,798
                                ====================    ====================

                                        Three Months Ended March 31,
                                --------------------------------------------
     Interest Expense                  2004                    2003
----------------------------    --------------------    --------------------
Investment Services               $               -       $             379
Software Services                                 -                       -
Corporate                                   103,363                  35,705
                                --------------------    --------------------
           Total                  $         103,363       $          36,084
                                ====================    ====================

                                        Three Months Ended March 31,
                                --------------------------------------------
     Net Income (Loss)                 2004                    2003
----------------------------    --------------------    --------------------
Investment Services               $          56,981       $        (149,975)
Software Services                          (397,758)               (172,911)
Corporate                                  (410,378)               (232,720)
                                --------------------    --------------------
           Total                  $        (751,155)      $        (555,606)
                                ====================    ====================

4.   Capitalized Software Development Costs

     In  accordance  with SFAS No.  86,  "Accounting  for the Costs of  Computer
Software  to be  Sold,  Leased  or  Otherwise  Marketed,"  internally  generated
software   development  costs  associated  with  new  products  and  significant
enhancements  to existing  software  products  are  expensed  as incurred  until
technological feasibility has been established.  Software development costs that
qualify for  capitalization  include the  salaries  and benefits of the software
engineers  assigned to the  products,  internal and external  quality  assurance
testing  costs,   overhead  allocations   primarily  associated  with  rent  and
facilities costs and the costs of outsourced  development  activities.  Software
development  costs not  qualifying  for  capitalization  are recorded as product
development expense. Capitalized software development costs, including purchased
software,  if any, are amortized  using the greater of the revenue method or the
straight-line method generally with useful lives of three years or less. At each


                                       8
<PAGE>

balance sheet date the Company  evaluates the estimated net realizable  value of
each software product and when required,  records  write-downs of net book value
to net  realizable  value of any  products  for which  the net book  value is in
excess of net realizable value. The net realizable value is the estimated future
gross  revenue  of  each  product  reduced  by the  estimated  future  costs  of
completing  and disposing of that product,  including the costs of completing in
process  development  and  customer  support.  The  Company  determined  that no
write-down of capitalized  software  development  costs was required  during the
years ended  December  31, 2003 and 2002.  For the three  months ended March 31,
2004 and 2003, the Company  amortized  $173,672 and $172,911 of software  costs,
respectively,  using an estimated  useful life of three  years.  As of March 31,
2004 the total of all capitalized software development costs was $2,356,401.  At
March 31,  2004 and  2003,  accumulated  amortization  of  capitalized  software
development costs totaled $1,211,217 and $518,733, respectively.

5.   Reclassification

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

6.   Net Loss Per Share

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

                                                 Three months ended March 31,
                                               --------------------------------
                                                     2004              2003
                                               --------------    --------------
Net loss                                          $ (751,155)       $ (555,606)
Dividends on preferred stock                         (15,422)          (17,560)
                                               --------------    --------------
Net loss applicable to common shareholders        $ (766,577)       $ (573,166)
                                               ==============    ==============
Net loss per share applicable to common
         shareholders                             $    (0.05)       $    (0.06)
                                               ==============    ==============

     7.  Acquisition

     The Company acquired LostView Development Corporation  ("LostView") through
a stock  purchase  agreement  effective  February  27,  2004,  where the Company
purchased  all of the  outstanding  stock of LostView  in  exchange  for 750,000
shares of the  Company's  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.


                                       9
<PAGE>

Allocation of Purchase Price

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

      Cash                                                    $     4,446
      Accounts receivable                                          12,612
      Property and equipment                                        8,733
      Goodwill                                                    200,247
      Intellectual Property and Other Intangibles                 113,453
      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 acquisitions  discussed above had occurred at January 1,
2003:

                                                        For the Three Months
                                                          Ended March 31,
                                                   ----------------------------
                                                        2004           2003
                                                   ------------    ------------
  Revenues                                         $    605,668    $    177,890
  Net loss attributed to common shareholders       $   (751,155)   $   (555,606)
  Net loss per share attributed to common
          shareholders, basic and diluted          $      (0.03)   $      (0.05)
  Weighted average shares outstanding, basic and
          diluted                                    17,311,203      10,448,710


8.   Intangibles

     In March 2002, the Company entered into an Agreement, as an amendment to an
earlier  revenue-sharing  agreement,  with NewportX.com,  an affiliate of Online
Trading  Academy  of  Irvine,  CA ("OTA") to acquire a block of up to 150 active
trader  accounts  which were to be referred or  directed to  RushTrade  over six
months in exchange for 1,200,000 shares of RFGI common stock.  These shares were
issued  during March 2002 and the Company  recorded a prepaid asset of $300,000,
the fair  value  of the  stock on the date of  issuance.  As the  active  trader
accounts are received and certified,  the Company  reclassifies these amounts to
an intangible  asset.  During the first quarter of 2004, 25 trader accounts were
certified and accordingly $36,000 has been reclassified to intangible assets. In
total as of March 31, 2004, 150 trader accounts have been certified and $300,000
has been  reclassified  to intangible  assets and is being  amortized over three
years,  the  estimated  life  of  the  trader  accounts.  Amortization  of  this
intangible  in the  first  quarter  of 2004  and 2003 was  $22,000  and  $5,833,
respectively.  At March 31, 2004  accumulated  amortization  of this  intangible
totaled  $72,500  and  $10,833,  respectively.  As of  March  31,  2004  OTA has
fulfilled the agreement and no additional trader accounts are due.

9.   Convertible Bonds

     As of December  31,  2003 the  $1,500,000  offering  of 12% Senior  Secured
Convertible Bonds ("Bonds") was fully subscribed. The Bonds bear interest at 12%
per annum and are convertible  into the Company's  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.  The  Company  may force
conversion if the stock trades above $2.00 per share for 10 consecutive  trading
days. The Company  calculated the beneficial  conversion feature embedded in the
Bonds in accordance with EITF 98-5 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
months ended March 31, 2004 and 2003 was $57,765 and $0, respectively.


                                       10
<PAGE>

     During the three months ended March 31, 2004,  $160,000 of Bonds  converted
into 702,996 shares of common stock and at March 31, 2004 Bonds payable  totaled
$462,116 net of unamortized debt discount of $49,884.

10.  Stock-Based Compensation

     The Company accounts for its 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.  The Company did not record any  compensation  expense in
the quarters ended March 31, 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 the Company determined compensation based on the fair value at the
grant  date for its  stock  options  under  Statement  of  Financial  Accounting
Standards  ("SFAS")  No. 123,  "Accounting  for  Stock-Based  Compensation,"  as
amended by SFAS No. 148,  net loss and loss per share would have been  increased
as indicated below:

                                                         Three Months
                                                        Ended March 31,
                                                    ----------------------
                                                      2004          2003
                                                    ---------    ---------
   Net loss attributable to common shareholders,
        as reported                                 $(766,577)   $(573,166)
   Add:  Stock-based employee compensation
        expense included in reported net loss               -            -
   Deduct:  Stock-based employee compensation
        expense determined under fair value based
        method                                        (26,368)      (1,915)
                                                    ---------    ---------
   Pro forma net loss                               $(792,945)   $(575,081)
                                                    =========    =========

   Net loss per share
   As reported                                      $   (0.05)   $   (0.06)
                                                    =========    =========
   Pro forma                                        $   (0.05)   $   (0.06)
                                                    =========    =========

11.   Shareholders' Deficit

     During the first quarter of 2004 the Company issued 63,458 shares of common
stock (valued at $21,744  based on the fair value of the Company's  common stock
on the date of issuance) to  employees as  compensation,  holders of $160,000 of
convertible  bonds elected to convert their bonds into 702,996  shares of common
stock,  750,000  shares of common stock 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 the  Company's  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
accrued  dividends was greater than the amount owed, a loss was recorded  during
the three months ended March 31, 2004 for the difference  which totaled $25,030.
Additionally,  538,178  shares of common  stock  were  issued  for  proceeds  of
approximately $175,000.

     During the first quarter of 2004, the Company also issued  6,138,501 shares
of common stock to settle pending issuances from 2003.

     During the first quarter of 2004,  the Company  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.



                                       11
<PAGE>

12.  Payroll Tax Obligation

     The Company has an estimated  federal and state  payroll tax  obligation of
$255,589 at March 31, 2004. The Company has 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  quarter of 2004 in  addition  to an  estimated  accrual  for
interest and penalties. There is no obligation outstanding for the third quarter
2003,  as these  taxes have been  submitted.  This amount is included in accrued
expenses and other liabilities in the accompanying consolidated balance sheets.

13.  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 June 6, 2004. We
are currently unable to estimate the ultimate liability, if any, related to this
complaint.

     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 we are currently  unable to estimate
the ultimate liability, if any, related to this complaint.

     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.  At March 31, 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  Proceedings.  On  January  16,  2002,  in Eichof,  et al. v.  Rushmore
Securities Corporation;  NASD Dispute Resolution Arbitration No. 02-07677, eight
former customers of a former registered  representative of RSC filed a complaint
contending  that they made numerous  investments in securities  which the former
account  representative sold outside and away from RSC. The claimants allege the
investments were fraudulent,  speculative and unsuitable, and that RSC failed to
properly  supervise  the  representative.  The  claimants  contend they invested
$808,000 in these  securities  and  virtually the entire amount was lost through
such  investments.  RSC denies the allegations,  contends they are barred by the
applicable statutes of limitations,  that RSC owed no legal duty to three of the
claimants  who never had an account with RSC,  that RSC did not fail to properly
supervise its former registered representative, and intends to vigorously pursue
our defense.  The matter is being  defended by RSC's former errors and omissions
insurance  carrier under a reservation  of rights.  Currently,  we are unable to
estimate the ultimate  liability,  if any,  related to this complaint.  However,
should this  complaint be resolved in favor of the  claimants,  any liability to
RSC not covered by our  insurance  may have an adverse  effect on our  financial
condition.

     On April 17, 2003, in E.F. (Mickey) Long, II, et al. v. Rushmore  Financial
Group,  Inc.,  Rushmore  Securities  Corporation  and D.M.  "Rusty" Moore;  NASD
Dispute  Resolution  Arbitration  No.  03-01451,  a group of  former  securities
representatives of RSC filed for NASD Dispute Resolution, naming the Company and
Mr. Moore. The former  representatives are claiming $178,288 in commissions.  At
December  31, 2003 we  estimated  our  liability  to be $43,000 and  recorded an
accrual  for this  amount.  During  the first  quarter  of 2004 we  successfully
negotiated a settlement with the representatives in the amount of $98,750.  This
amount has been recorded as a liability at March 31, 2004.

     On  November  14,  2003,  in William  E.  McMahon  v.  Rushmore  Securities
Corporation,  Chicago  Investment  Group,  LLC, et al; NASD  Dispute  Resolution
Arbitration No. 03-07986,  a former  securities  account customer filed for NASD

                                       12
<PAGE>

arbitration against RSC, their former account  representative and their previous
brokerage  firm  claiming  his account  decreased  in value by  $100,000  due to
improper and unauthorized sales and trading practices. We have filed a response,
and at present are unable to estimate the ultimate liability, if any, related to
this complaint.

     In May 2003,  in Watson,  et al. v. Rushmore  Securities,  et al., a former
securities account customer of RSC filed for NASD arbitration against his former
account  representative,  the account  representative's  account manager,  their
local  office and their  successor  brokerage,  claiming  the  investments  were
unsuitable  and  speculative  and  that  their  accounts  decreased  in value by
$125,000. This matter was settled in the first quarter of 2004 for $5,000.

      In May 2003, in Jaffy v. Rushmore  Securities,  et al. a former securities
account  customer of RSC filed for NASD  arbitration  against her former account
representative  and their  successor  brokerage firm claiming their  investments
were unsuitable,  speculative,  negligent,  grossly negligent and with negligent
supervision. The complaint was settled in March 2004 for $1,500.

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

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

1.   Recent Developments

     The  Company  has  taken  several  steps  to  increase  cash  by the use of
borrowings  and  equity.  In  February  2004,  the  Company  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  proceeds  of  approximately  $175,000.  Subsequent  to the end of the
quarter,  funds were received  under this placement for 401,666 shares that were
sold to subscribers at an average price of $0.32, for total offering proceeds of
$303,000.

     On May 4,  2004,  the  Company  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.  The Company  retained  the
services of Invest Linc Securities,  LLC, and of RushTrade  Securities,  Inc., a
wholly-owned  subsidiary of the Company  (together the "Placement  Agents"),  to
offer and sell the common stock of the Company 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 11,660,000  shares of common stock.  Assuming the minimum
offering is attained, net proceeds of $400,000,  Management believes the Company
can fund  execution of the  RushTrade  business  plan during  2004,  but will be
unable to meet any  contingent  liability  obligations or enhance and market the
RushGroup software products.  If the Company is able to raise the maximum amount
of the  offering,  net  proceeds  of  approximately  $5,000,000  and are able to
successfully execute the business plan, Management believes the Company will not
need additional financing in the foreseeable future.

     The Company and LostView Development  Corporation  ("LostView") finalized a
stock  purchase  agreement  effective  February  27,  2004,  where  the  Company
purchased  all of the  outstanding  stock of LostView  in  exchange  for 750,000
shares of the  Company's  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 complete 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 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.

                                       13
<PAGE>

2.   RushTrade and RushGroup Business Summary

Overview

     Rush  Financial  Technologies,  Inc.  is a holding  company  that  operates
through two primary subsidiaries:

     RushGroup  Technologies,  Inc.  ("RushGroup"),   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 its exclusive  Direct Access  Routing  Technology
(DART),  RushGroup  offers  real-time  market data  platforms  and direct access
products to meet the needs of active online investors, semi-professional traders
or institutional portfolio managers and traders.

     RushTrade Securities, Inc. ("RushTrade"),  a wholly-owned subsidiary of the
Company 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.

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.

     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.


                                       14
<PAGE>

     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,  a
hybrid of the Direct Pro and Direct platforms.  Direct Plus 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.

     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

                                       15
<PAGE>

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 of customers is expected to be persons and firms to
license versions of RushGroup software,  which is still in development.  See "--
Growth Strategy."

     RushTrade's  marketing and sales efforts are currently  underway to acquire
new  active  trader/customer   accounts  that  are  expected  to  generate  both
subscription-based and transaction-based  revenue. RushTrade believes it has the
low cost  operational  infrastructure  and a relatively  low  threshold to reach
profitability in the near future.  Since December 2002, we have begun hiring new
sales  representatives  to  produce  new  customer  accounts  from  sales  leads
generated  from our  Internet  advertising.  We  believe we have  embarked  on a
successful  marketing strategy to generate the necessary active  trader/customer
accounts  to  capture  customer  assets  with  trade  volumes  that can  produce
increased  revenues.  There can be no assurances that these steps will result in
our being able to settle our  liabilities  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.

Technology

     Our 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
we are  positioning  ourselves to benefit from the convergence of these industry
trends and in the midst of all the regulatory changes.

     Online trading remains a dynamic force today representing over one-third of
total  trading  volume on the New York Stock  Exchange and Nasdaq.  According to
Bear Stearns & Co.,  Inc.  there were over 20.5 million  online  retail  trading
accounts in the U.S.  at the  beginning  of 2003,  up 8% from 19 million in 2002
which was up from 17.4 million,  an increase of 20% from 2001.  The more active,
self-directed  traders, also known as semi-professional  traders or day traders,
accounted for 83% of this trading volume.

                                       16
<PAGE>
<TABLE>
<CAPTION>

     The institutional market consists of proprietary and institutional  trading
firms,  hedge funds,  mutual fund and other private portfolio  managers,  banks,
other  financial  institutions,  broker/dealers,  market data  vendors and media
content  providers.  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.  Technological  and regulatory  trends have opened up
opportunities  for new  providers  like us that  can more  efficiently  and cost
effectively deliver financial tools and information.

     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 a 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.  We do 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.  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,  have  created a growing web
traffic that has generated  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.

     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

</TABLE>

                                       17
<PAGE>

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

                  For the            Number            Number
                  Month of          of Trades        of Shares
               ---------------     -----------     ------------
               January 2003             3,414        3,596,532
               February 2003            3,851        3,583,894
               March 2003               4,521        3,039,325
               April 2003               7,019        4,242,451
               May 2003                 8,178       10,029,062
               June 2003               11,054        8,772,640
               July 2003               10,839       11,632,790
               August 2003             10,112       12,672,975
               September 2003          13,315       32,177,054
               October 2003            15,700       39,072,872
               November 2003           14,746       54,738,776
               December 2003           16,311       47,055,892
               January 2004            18,362       69,948,879
               February 2004           16,270       46,033,738
               March 2004              20,307       78,024,289
               April 2004              21,873       98,027,673

     RushTrade's  marketing and sales efforts are currently  underway to acquire
new active trader/customer  accounts that will generate both  subscription-based
and  transaction-based   revenue.   RushTrade  believes  it  has  the  low  cost
operational infrastructure and a relatively low threshold to reach profitability
in the near future.  Since  December  2002 new sales  representatives  have been
hired to generate  additional  sales leads.  Additionally,  the Company is using
Internet advertising to provide leads for its sales representatives. The Company
believes it has  embarked on a  successful  marketing  strategy to generate  the
necessary  active  trader/customer  accounts to capture customer assets with the
trade volumes and related  revenues  necessary to reach a  sustainable  level of
profitability.  However,  there can be no assurances that the steps taken by the
Company will result in the Company being able to settle its  liabilities as they
become due, or that the Company will be able to generate  revenues or cash flows
from financings sufficient to support its operations in the short term.

Financial Highlights

     With the launch of the  RushTrade  products  in the third  quarter of 2002,
RushTrade  began a marketing  effort to acquire new customer  accounts.  Despite
limited funds for advertising and marketing personnel,  RushTrade has grown from
a total of 95 customer  accounts at September 30, 2002 to a total of 1775 at the
end of the current  period,  representing a compound annual growth rate ("CAGR")
of  251%  in  customer   accounts.   Total  customer   assets  have  grown  from
approximately  $3,100,000 to over $47,000,000 in the same period, an increase of
over 1400%.  Trades  executed have grown from less than 3,500 in January 2003 to
over 20,000 in March 2004, an increase of 471%.

     Acceptance  of  the  RushTrade  trading  platforms,  as  evidenced  by  the
increases,  is the primary factor behind revenue growth from only $34,000 in the
third  quarter of 2002 to over  $519,000  in the  current  period,  a  quarterly
revenue growth at a CAGR of 228%.  RushTrade's  clearing costs,  including third
party clearing fees,  exchange fees and ECN order routing fees,  averaged 30% in
the current period giving RushTrade a gross operating margin of 70%.

     Continued growth of customer accounts,  customer assets and customer trades
are  necessary to drive  revenue  increases  and coupled with the current  gross
margins,  should  enable the  Company to become  cash flow  positive in the near
term.


                                       18
<PAGE>

3.   Results of Operations

Three Months Ended March 31, 2004 and 2003:

Revenues

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

                                       Three Months Ended March 31,
                                   ------------------------------------
               Revenue                    2004                2003
        -----------------------    ----------------    ----------------
        Investment Services          $     528,991       $     173,798
        Software Services                   44,790                   -
        Corporate                                -                   -
                                   ----------------    ----------------
                   Total             $     573,781       $     173,798
                                   ================    ================


     Total revenue for the first quarter increased $399,983,  or 230%, from 2003
to 2004. This increase  reflects the additional  Software  Services revenue from
the LostView  acquisition,  and reflects the increased  revenue from 1,775 total
customer accounts in the RushTrade  business unit in 2004 compared to 301 in the
same period of 2003.

     Investment Services revenue increased $355,193, or 204%, from 2003 to 2004.
The increase in revenue is primarily due to management's  efforts to concentrate
on the  continued  development,  launch and  marketing of its  RushTrade  direct
access on-line  trading  system.  The RushTrade  business unit continues to show
revenue  growth from quarter to quarter.  For the quarter  ending March 31, 2003
RushTrade  revenue was $95,925 compared to $519,018 for the same period in 2004,
an increase of $423,093 or 441%. The current period revenue  increased  $108,815
over the quarter ending December 31, 2003, where RushTrade revenue was $420,176,
an increase  of almost 26%.  The Company  expects  revenues  from the  RushTrade
business  unit to continue to increase  during the  remainder of 2004.  However,
RushTrade, like most broker/dealers, is dependent on the overall activity in the
United States equity markets. RushTrade will continue to devote resources toward
marketing its online trading platforms and increasing the overall customer base,
which should continue to drive increases in trade volumes and revenues.

     RushGroup   Technologies,   Inc.,   the  Company's   financial   technology
development subsidiary, had revenue of $44,790, an increase of $44,790 from 2003
to 2004.  The  increase is due to the  acquisition  of LostView  and its related
sources of revenue. The Company plans to offer licensing of the RushTrade direct
access software and other  arrangements and this segment is expected to become a
significant  stream of revenue for the  Company in the future.  There is ongoing
development  activity on the  software  to enhance its use to outside  entities;
however the Company has  received  minimal  revenue  from  licensing.  RushGroup
released the RushTrade  platforms in late 2002 with a marketing effort beginning
in December  2002.  The Company has had contact  with several  institutions  and
brokerages about the licensing of various software components or applications of
the RushTrade platforms, but at present none have been consummated.

Expenses

     The following table sets forth the components of the Company's expenses for
the periods indicated:
                                     Three Months Ended March 31,
                                  ---------------------------------
               Expense                 2004               2003
        ----------------------    --------------    ---------------
        Investment Services         $   472,010       $    333,426
        Software Services               442,548            172,911
        Corporate                       410,378            223,067
                                  --------------    ---------------
                   Total            $ 1,324,936       $    729,404
                                  ==============    ===============

     Total  expenses  increased  $595,532 or 82%, from 2003 to 2004.  Investment
Services  expenses  increased  42%,  or  $138,584,  Software  Services  expenses
increased $269,637, or 156%, and Corporate expenses increased 84%, or $187,311.

                                       19
<PAGE>

     Investment Services expenses increased $138,584, or 42%, from 2003 to 2004.
In general  this is  attributable  to the  increase in  marketing  related  cost
associated with the new RushTrade business model and the increase in transaction
based  expenses.  In 2003  advertising  cost related to the  acquisition  of new
RushTrade customer accounts was approximately $8,000 compared to over $90,000 in
2004,  an  increase  of  $82,000.  From 2003 to 2004,  transactions  based  cost
increased due to the increase in shares traded from approximately  10,000,000 to
over 220,000,000.  As RushTrade revenues increase, the infrastructure  necessary
to support the expansion of the customer base will further  increase.  RushTrade
will need to add  customer  support  personnel  and  additional  software  sales
representatives  in order to  continue  to  increase  revenue  and  support  the
acquisition of additional customer accounts.

     Software Services expenses increased 156% or $269,637 from 2003 to 2004. As
the business unit transitioned  from development stage to the  implementation of
the products through the RushTrade business unit it became necessary to increase
the  infrastructure  supporting the products.  Among the major  increases was an
increase in payroll of  approximately  $130,000,  $15,500 in subscription  fees,
$35,000 in quotation  services,  $4,000 in general  office  expenses,  $7,500 in
stock-based  compensation,  and an increase in data line costs of $45,000, which
includes the  incorporation of LostView  Development into this business unit. As
overall  market  activity and acceptance of the products  increases,  costs will
continue to increase.

     Corporate expenses increased  $187,311,  or 84%, from 2003 to 2004. In part
this is due to an  increase in  amortization  of deferred  financing  fee,  debt
discount and intangibles of $93,000, cost related to the stockholders meeting of
$32,000,  an  increase  in  accounting  fees of  $15,000,  an  increase in legal
expenses of $37,000 and an increase in payroll of $26,000.

Net loss

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

                                        Three Months Ended March 31,
                                    ------------------------------------
           Net Income (Loss)              2004                2003
        ------------------------    ----------------    ----------------
        Investment Services           $      56,981       $    (149,975)
        Software Services                  (397,758)           (172,911)
        Corporate                          (410,378)           (232,720)
                                    ----------------    ----------------
                   Total              $    (751,155)      $    (555,606)
                                    ================    ================

Net operating  losses  increased  $195,549,  or 35%, from 2003 to 2004.  The net
income  (loss) from  Investment  Services  increased  from a loss of $149,975 to
income of $56,981 or 138% from 2003 to 2004. This in part is a reflection of the
margins offered by the direct access online business  model.  Software  Services
net loss increased  $224,847,  or 130% from 2003 to 2004. This is due in part to
the  increase  in  infrastructure  to support  the  increased  activity  levels.
Corporate  net loss  increased  from  $232,720  to  $410,378.  The  increase  in
Corporate  net loss is in part due to the  Company's  loss on the  settlement of
liabilities of $25,030,  an increase of $15,000 in accounting fees,  $32,000 for
the stockholder meeting held on January 26, 2004, $37,000 in legal expenses, and
the  amortization  of deferred  financing  fee,  debt  discount and  intangibles
totaling $93,418.

Liquidity

    Cash  Flows  from  Operating  Activities  - The  Company  had a net  loss of
$751,155  for the quarter  ended March 31,  2004.  This amount was  adjusted for
non-cash expenses totaling $330,085.  Cash flows from operating  activities were
increased by an increase in accrued  expenses  and accounts  payable of $240,075
and a decrease in other receivables of $43,000 offset by an increase in accounts
receivable  and other assets of $22,827;  thus  yielding a net cash flow used by
operating activities of $160,822. The Company had a net loss of $555,606 for the
quarter  ended March 31, 2003.  This amount was  adjusted for non-cash  expenses
totaling $200,681. Cash flows from operating activities decreased by an increase
in  receivables  of $5,092  offset by a decrease  in  prepaids  and  deposits of
$52,817 and an increase in accounts  payable and accrued  expenses of  $116,937;
thus yielding a net cash flow used by operating activities of $190,263.

    Cash  Flows  From  Investing  Activities  -  Cash  flow  used  by  investing
activities  during  the  quarter  ended  March  31,  2004  was  $31,250,  due to
capitalizing $30,018 in development costs related to the RushTrade direct access
software,  purchasing  various fixed assets for $5,678 and from cash acquired in
the acquisition of LostView.  Cash flow used by investing  activities during the
quarter  ended  March 31,  2003 was  $26,814,  due to  capitalizing  $26,814  in
development  costs related to the RushTrade  direct access  software Back Office
Management Tool.

                                       20
<PAGE>

    Cash Flows from  Financing  Activities - During the quarter  ended March 31,
2004, the Company raised $175,000 from the sale of common stock, and paid $5,065
as payments  on notes.  During the quarter  ended  March 31,  2003,  the Company
raised  $65,000 from the sale of 12% Senior  Secured  Convertible  Bonds and had
advances from related parties totaling $95,000. The Company also had an increase
in its bank  overdraft  of  $6,327  during  the  first  quarter  of 2003.  These
increases were off set by repayments of notes payable totaling $7,375.

     The Company's cash and cash  equivalents  available for operations at March
31, 2004 were  $148,951,  and the  Company's  current  liabilities  exceeded its
current  assets by  $2,304,894.  The  Company's  requirements  for  normal  cash
expenditures,  as well as costs for the further  development of the  proprietary
online RushTrade  software,  have historically been supplemented with borrowings
and equity capital raised through the private placement of securities;  however,
there can be no  assurance  that these  sources of cash will be available in the
future.

     The accompanying  financial statements have been prepared assuming that the
Company will  continue as a going  concern.  At March 31, 2004,  the Company had
$2,590,336 in current  liabilities,  and current  assets of $285,442.  Also, the
Company  had net  losses  of  $2,475,947  in 2003 and  $3,131,636  in 2002,  and
$751,155 in the first  quarter of 2004.  Although the Company  believes  that it
will be able to  continue  to raise  the  necessary  funds  until it  reaches  a
sustainable level of profitability,  these matters raise substantial doubt about
the Company's ability to continue as a going concern.  The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

     The Company has taken  several  steps to increase  cash  through the use of
borrowings  and  equity.  In  February  2004,  the  Company  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. Subsequent to the end of
the quarter,  funds were received  under this  placement for 401,666 shares that
were  sold to  subscribers  at an  average  price of $0.32,  for total  offering
proceeds of $303,000.

     On May 4,  2004,  the  Company  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.  The Company  retained  the
services of Invest Linc Securities, LLC, and of and RushTrade Securities Inc., a
wholly-owned  subsidiary of the Company  (together the "Placement  Agents"),  to
offer and sell the common stock of the Company 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  11,660,000.  Assuming the minimum  offering is attained,
net proceeds of $400,000,  Management believes the Company can fund execution of
the  RushTrade  business  plan  during  2004,  but  will be  unable  to meet any
contingent  liability  obligations or enhance and market the RushGroup  software
products.  If the Company is able to raise the maximum  amount of the  offering,
net proceeds of approximately  $5,000,000,  and is able to successfully  execute
the business  plan,  Management  believes  the Company will not need  additional
financing in the foreseeable future.

     RushTrade's  marketing and sales efforts are currently  underway to acquire
new  active  trader/customer  accounts  that  will  generate   transaction-based
revenue.  RushTrade believes that it has the low cost operational infrastructure
and a relatively low threshold to reach profitability in the near future.  Since
December 2002 new sales  representatives  have been hired to generate additional
sales leads. Additionally,  the Company is using Internet advertising to provide
leads for the sales  representatives,  at an average  cost of less than $100 per
new account. The Company believes that it has embarked on a successful marketing
strategy to generate the necessary  active  trader/customer  accounts to capture
customer assets with the trade volumes and related revenues necessary to reach a
sustainable  level of  profitability.  There can be no assurances that the steps
taken by the  Company  will  result in the  Company  being  able to  settle  its
liabilities  as they  become due or that the  Company  will be able to  generate
revenues or cash flows from  financings  sufficient to support its operations in
the short term.

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

                                       21
<PAGE>

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.

Item 3.  Controls and Procedures

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

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



                                       22
<PAGE>

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

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

     Company  Proceedings.  On June 24, 2003, in Sumner Group Inc. d/b/a Datamax
Office  Systems  Leasing  Division  v.  Rushmore   Financial  Group;  Cause  No.
CC-03-7400-b;  County Court at Law No. 2, Dallas County,  Texas, a former vendor
filed a claim in the  Dallas  County  Court  claiming  that we failed to pay for
services  rendered  on a  copier  in the  amount  of  $39,710.  We have  filed a
counterclaim  alleging  overcharges  and  improper  installation  of a  software
product causing us  incalculable  harm. A jury trial is set for June 6, 2004. We
are currently unable to estimate the ultimate liability, if any, related to this
complaint.

     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 we are currently  unable to estimate
the ultimate liability, if any, related to this complaint.

     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.  At March 31, 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  Proceedings.  On  January  16,  2002,  in Eichof,  et al. v.  Rushmore
Securities Corporation;  NASD Dispute Resolution Arbitration No. 02-07677, eight
former customers of a former registered  representative of RSC filed a complaint
contending  that they made numerous  investments in securities  which the former
account  representative sold outside and away from RSC. The claimants allege the
investments were fraudulent,  speculative and unsuitable, and that RSC failed to
properly  supervise  the  representative.  The  claimants  contend they invested
$808,000 in these  securities  and  virtually the entire amount was lost through
such  investments.  RSC denies the allegations,  contends they are barred by the
applicable statutes of limitations,  that RSC owed no legal duty to three of the
claimants  who never had an account with RSC,  that RSC did not fail to properly
supervise its former registered representative, and intends to vigorously pursue
our defense.  The matter is being  defended by RSC's former errors and omissions
insurance  carrier under a reservation  of rights.  Currently,  we are unable to
estimate the ultimate  liability,  if any,  related to this complaint.  However,
should this  complaint be resolved in favor of the  claimants,  any liability to
RSC not covered by our  insurance  may have an adverse  effect on our  financial
condition.

     On April 17, 2003, in E.F. (Mickey) Long, II, et al. v. Rushmore  Financial
Group,  Inc.,  Rushmore  Securities  Corporation  and D.M.  "Rusty" Moore;  NASD
Dispute  Resolution  Arbitration  No.  03-01451,  a group of  former  securities
representatives of RSC filed for NASD Dispute Resolution, naming the Company and
Mr. Moore. The former  representatives are claiming $178,288 in commissions.  At
December  31, 2003 we  estimated  our  liability  to be $43,000 and  recorded an
accrual  for this  amount.  During  the first  quarter  of 2004 we  successfully
negotiated a settlement with the representatives in the amount of $98,750.

     On  November  14,  2003,  in William  E.  McMahon  v.  Rushmore  Securities
Corporation,  Chicago  Investment  Group,  LLC, et al; NASD  Dispute  Resolution
Arbitration No. 03-07986,  a former  securities  account customer filed for NASD
arbitration against RSC, their former account  representative and their previous
brokerage  firm  claiming  his account  decreased  in value by  $100,000  due to
improper and unauthorized sales and trading practices. We have filed a response,
and at present are unable to estimate the ultimate liability, if any, related to
this complaint.

     In May 2003,  in Watson,  et al. v. Rushmore  Securities,  et al., a former
securities account customer of RSC filed for NASD arbitration against his former
account  representative,  the account  representative's  account manager,  their
local  office and their  successor  brokerage,  claiming  the  investments  were
unsuitable  and  speculative  and  that  their  accounts  decreased  in value by
$125,000. This matter was settled in the first quarter of 2004 for $5,000.

                                       23
<PAGE>

     In May 2003, in Jaffy v. Rushmore  Securities,  et al. a former  securities
account  customer of RSC filed for NASD  arbitration  against her former account
representative  and their  successor  brokerage firm claiming their  investments
were unsuitable,  speculative,  negligent,  grossly negligent and with negligent
supervision. The complaint was settled in March 2004 for $1,500.

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

Item 2.  Changes in Securities and Use of Proceeds

     During the first quarter of 2004 the Company issued 63,458 shares of common
stock (valued at $21,744  based on the fair value of the Company's  common stock
on the date of issuance) to employees  as  additional  compensation,  holders of
$160,000 of convertible bonds elected to convert their bonds into 702,996 shares
of common stock,  750,000 shares of common stock 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 the Company's  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.  Additionally,  538,178  shares of common  stock  were  issued for
proceeds  of  approximately  $175,000.  During the first  quarter  of 2004,  the
Company also issued 6,138,501 shares of common stock to settle pending issuances
from 2003.

Item 3.  Defaults Upon Senior Securities

     None.

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

     On January  26,  2004 the Company  held the annual  stockholders'  meeting.
Proxies  representing  7,513,935  of  9,960,396  shares  eligible  to vote  were
present. The security holders voted to approve the following:

          1)   To elect two classes of three  members of the Board of Directors.
               All six directors were affirmed as follows:

                  Directors       For           Against       Abstain
              -------------------------------------------------------
              Steve Watson        7,453,672           -         3,100
              Charles Brewer      7,453,672           -         3,100
              D. M. Moore         7,453,672           -         4,846
              Philip Ritz         7,458,672           -         3,100
              Gayle Tinsley       7,025,472           -       431,300
              James Keller        7,453,672           -         3,100

          2)   A majority of the stockholders  voted to approve KBA Group as the
               Company's auditors as follows:

                           For          Against        Abstain
                        --------------------------------------
                        7,446,572             -         10,200

          3)   A  majority  of the  stockholders  voted to amend  the  Company's
               Articles of  Incorporation  to increase the number of  authorized
               shares  to  50,000,000  from  10,000,000.  A copy of the  Amended
               Articles of  Incorporation is attached as Exhibit 3.1.1. The vote
               was as follows:

                           For          Against        Abstain
                        --------------------------------------
                       7,421,536         18,536         16,722

          4)   A  majority  of the  stockholders  voted to amend  the  Company's
               Articles  of  Incorporation  to change the name of the Company to
               Rush Financial Technologies,  Inc. from Rushmore Financial Group,

                                       24
<PAGE>

               Inc. A copy of the Amended  Articles of Incorporation is attached
               as Exhibit 3.1.1. The vote was as follows:

                           For          Against        Abstain
                        --------------------------------------
                        7,451,932          4,840      -

          5)   A  majority  of the  stockholders  approved  the  2000  and  2002
               Incentive Stock Option Plans as follows:

                           For          Against        Abstain
                        --------------------------------------
                        7,433,435         20,137         3,200


Item 5.  Other Information

     None.

Item 6.  Exhibits and Reports on Form 8K

a.   Exhibits.

Exhibit 3.1.1 Articles of Incorporation, as amended.

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

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

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

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

b.   Reports on Form 8-K.

On January 13, 2004,  the Company  filed a Current  Report on Form 8-K reporting
its trade volume for December 2003 and for the fourth quarter ended December 31,
2003.

On February 2, 2004,  the Company  filed a Current  Report on Form 8-K reporting
its trade volume for January 2004.

On March 1, 2004,  the Company filed a Current  Report on Form 8-K reporting its
acquisition of LostView Development Corporation.

On March 12, 2004,  the Company filed a Current Report on Form 8-K reporting the
change of its trade symbol and cusip number.

On April 14, 2004,  the Company filed a Current Report on Form 8-K reporting the
filing of its 10K-SB Annual Report for year-end 2003.

On May 3, 2004, the Company  issued a press release  announcing its trade volume
report for the month of April 2004.

On May 6,  2004,  the  Company  issued  a press  release  announcing  it filed a
Registration  Statement on Form SB-2 with the Securities and Exchange Commission
("SEC") for a secondary  offering of up to 10,000,000 shares of its common stock
(excluding   shares  which  may  be  sold  pursuant  to  the  Placement  Agent's
over-allotment option).


                                       25
<PAGE>

SIGNATURE

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

                                      Rush Financial Technologies, Inc.

Dated: May 20, 2004                   By /s/ Dewey M. Moore, Jr.
                                      ----------------------------------
                                      Dewey M. Moore, Jr.
                                      Chief Executive Officer

Dated: May 20, 2004                   By /s/ Randy Rutledge
                                      ----------------------------------
                                      Randy Rutledge
                                      Chief Financial Officer













                                       26