~~Table~~UNITED ofSTATES ~~Contents~~

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~Washington, ~~AND~~D.C. ~~EXCHANGE~~20549 ~~COMMISSION~~

~~Washington,~~FORM ~~D.C.~~10-K ~~20549~~

~~FORM~~x ~~10-K~~ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

xFor ~~ANNUAL~~the ~~REPORT~~fiscal ~~PURSUANT~~year TOended ~~SECTION~~March 1331, OR2004 ~~15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~OR ~~the fiscal year ended March 31, 2003~~

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

¨For ~~TRANSITION~~the ~~REPORT~~transition ~~PURSUANT~~period ~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~from to

~~For~~Commission ~~the~~File ~~transition~~Number: ~~period~~001-11747 ~~from to~~

~~Commission~~VIE ~~File~~FINANCIAL ~~Number:~~GROUP, ~~001-11747~~INC.

VIE FINANCIAL GROUP, INC.


Delaware		22-6650372
(State of incorporation)		(I.R.S. ID)

~~(formerly The~~1114 ~~Ashton~~AVENUE ~~Technology~~OF ~~Group~~THE AMERICAS, ~~Inc.)~~22ND FLOOR

Delaware		22-6650372
(State of incorporation)		(I.R.S. ID)

NEW YORK, NEW YORK 10036

~~1835~~(212) ~~MARKET~~575-8200 ~~STREET, SUITE 420~~

~~PHILADELPHIA,~~1835 ~~PENNSYLVANIA~~MARKET ~~19103~~STREET, SUITE 420

~~(215)~~PHILADELPHIA, ~~789-3300~~PENNSYLVANIA 19103

~~Securities registered pursuant to Section 12~~(b215) of789-3300 ~~the Act: None~~

~~Securities~~(Former ~~registered~~address ~~pursuant~~of toprincipal ~~Section~~executive ~~12(g~~offices) ~~of the Act:~~

Common Stock, $0.01 par value		OTC Bulletin Board
(Title of class)		(Name of exchange on which registered)
Aggregate market value of the voting stock held by non-affiliates of the Registrant by September 30, 2002:		Number of shares outstanding of the Registrant’s Class of common stock at June 27, 2003:
$4,148,363		692,974,817

Securities registered pursuant to Section 12(b) of the Act: None

~~Indicate~~Securities byregistered ~~check~~pursuant ~~mark whether the registrant (1) has filed all reports required~~ to ~~be filed by~~ Section ~~13 or 15~~12(dg) of the ~~Securities~~ ~~Exchange~~ Act: of 1934 during the preceding 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 x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this form 10-K ¨


Common Stock, $0.01 par value		OTC Bulletin Board
(Title of class)		(Name of exchange on which registered)

Aggregate market value of the voting stock held by non-affiliates of the Registrant on September 30, 2003:		Number of shares outstanding of the Registrant’s Class of common stock at June 30, 2004:
$7,118,792		21,139,245

Indicate by check mark whether the registrant is(1) anhas ~~accelerated~~filed ~~filer~~all ~~(as~~reports ~~defined~~required to be filed by Section 13 or 15(d) of the Securities Exchange Act ~~Rule 12b-~~of 1934 during the preceding 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 x ¨ No x ¨

~~DOCUMENTS~~Indicate ~~INCORPORATED~~by BYcheck ~~REFERENCE:~~mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this form 10-K x

~~Proxy~~Indicate ~~Statement~~by ~~relating~~check tomark whether the ~~2003~~registrant ~~Annual~~is ~~Meeting~~an ofaccelerated ~~Stockholders~~ filer (~~incorporated,~~as indefined ~~part,~~by inExchange Act ~~Form~~Rule 1012b-K2) ~~Part~~Yes ~~III)~~¨ No x

~~Table~~DOCUMENTS ofINCORPORATED ~~Contents~~BY REFERENCE:

~~VIE~~Proxy ~~FINANCIAL~~Statement ~~GROUP~~relating to the 2004 Annual Meeting of Stockholders (incorporated, ~~INC.~~in part, in Form 10-K Part III)

~~FORM~~VIE ~~10-K~~FINANCIAL GROUP, INC.

~~For~~FORM ~~the~~10-K ~~Fiscal Year Ended March 31, 2003~~

~~INDEX~~For the Fiscal Year Ended March 31, 2004

		Page
PART 1
ITEM 1.	BUSINESS	4
ITEM 2.	PROPERTIES	8
ITEM 3.	LEGAL PROCEEDINGS	9
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	10
PART II
ITEM 5.	MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	10
ITEM 6.	SELECTED FINANCIAL DATA	11
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS	12
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	25
ITEM 8	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	27
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	61
PART III
ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	61
ITEM 11.	EXECUTIVE COMPENSATION	61
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	61
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	61
ITEM 14.	CONTROLS AND PROCEDURES	61
PART IV
ITEM 15.	EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8–K	63
SIGNATURES		69
CERTIFICATIONS		72

INDEX


		Page
PART I
ITEM 1.	BUSINESS	4
ITEM 2.	PROPERTIES	10
ITEM 3.	LEGAL PROCEEDINGS	10
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	11

PART II
ITEM 5.	MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	12
ITEM 6.	SELECTED FINANCIAL DATA	13
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	29
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	31
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	65
ITEM 9A.	CONTROLS AND PROCEDURES	65

PART III
ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	65
ITEM 11.	EXECUTIVE COMPENSATION	65
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	66
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	66
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	66

PART IV
ITEM 15.	EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K	66

SIGNATURES		72

~~Table~~2 ~~of Contents~~

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included in this document constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance, or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others:

• our ability to ~~become~~continue ~~profitable~~as a “going concern”;

• availability and terms of debt and/ or equity capital to fund our operations;

• our ~~dependence~~ability onto ~~arrangements~~become ~~with our clearing firm, external liquidity providers, execution venues and self-regulatory organizations~~profitable;

• ~~changes~~our independence ~~business~~on ~~strategy~~arrangements orwith ~~development~~our ~~plans~~clearing firm, external liquidity partners, execution venues and self-regulatory organizations;

• ~~our~~changes ~~dependence~~in onbusiness ~~proprietary~~strategy ~~technology~~or development plans;

• ~~fluctuations~~our independence ~~securities~~on ~~trading~~proprietary ~~volumes,~~and ~~prices~~third-party technology and ~~market~~demand ~~liquidity~~for such technology;

• ~~industry~~fluctuations ~~trends~~in securities trading volumes, prices and market liquidity;

• ~~competition~~industry trends;

• our ability to ~~develop~~broaden ~~markets for~~ our ~~products~~customer mix;

• ~~our ability to develop intended future products~~competition;

• ~~availability~~our ofability ~~qualified~~to ~~personnel~~expand existing markets and develop new markets for our products;

• ~~changes~~our inability ~~government~~to ~~regulation~~develop intended future products;

• ~~general~~availability ~~economic~~ and ~~business~~retention ~~conditions;~~of ~~and~~qualified personnel;

• ~~other~~changes ~~risk factors referred to~~ in ~~this~~government ~~Form 10-K under the heading “Additional Factors That May Affect Future Results”.~~regulation;

In• ~~some~~general ~~cases,~~economic ~~you~~and ~~can~~business ~~identify~~conditions; forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” or “continue” or other forms of or the negative of those terms or other comparable terms. and

~~Although~~• weother ~~believe~~risk ~~that~~factors ~~the~~referred ~~expectations~~to ~~reflected~~ in ~~the~~this ~~forward~~Form 10-~~looking~~K ~~statements~~under ~~are based on reasonable assumptions, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for~~ the ~~accuracy~~heading ~~and~~“Additional ~~completeness~~Factors ofThat ~~such~~May ~~statements.~~Affect WeFuture ~~do not have a duty to update any of the forward-looking statements after the date of this filing~~Results”.

3In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” or “continue” or other forms of or the negative of those terms or other comparable terms.

~~Table~~Although we believe that the expectations reflected in the forward-looking statements are based on reasonable assumptions, we cannot guarantee future results, levels of ~~Contents~~activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. We do not have a duty to update any of the forward-looking statements after the date of this filing.

~~PART~~3 1

~~ITEM~~PART 1.I ~~BUSINESS~~

InITEM ~~this Form 10-K, the terms “Vie,” “we,” “our” and “us” refer to Vie Financial Group, Inc~~1. ~~and its subsidiaries, unless the context suggests otherwise.~~ BUSINESS

~~Overview~~In ofthis ~~Our~~Form ~~Business~~10-K, the terms “Vie,” “we,” “our” and “us” refer to Vie Financial Group, Inc. and its subsidiaries, unless the context suggests otherwise.

~~Vie~~Overview ~~Financial~~of Group, Inc. (formerly The Ashton Technology Group, Inc.) and its subsidiaries provide electronic trading services to institutional investors and broker-dealers. We strive to remove the human element from the trading and order execution process in order to eliminate information leakage. Our ~~objective is to~~ ~~provide~~Business ~~our clients with high-performance electronic trading that is fast, efficient and nearly invisible to the market.~~

~~Our~~Vie ~~principal~~Financial Group, Inc. and its subsidiaries provide ~~include:~~electronic trading services to institutional investors and broker-dealers. Our sophisticated proprietary trading algorithms and licensed trading technology enable us to deliver superior trade execution quality while considerably reducing information leakage. Our objective is to provide our clients with high-performance trading that is fast, efficient and nearly invisible to the market.

•Our subsidiaries include Vie Securities, LLC, Universal Trading Technologies Corporation, Electronic Market Center, Inc., and Ashton Technology Canada, Inc.

•Our ~~Universal~~current ~~Trading~~product ~~Technologies~~offering ~~Corporation~~consists of various trade execution services that we provide through our broker-dealer subsidiary Vie Securities, LLC. We offer a suite of proprietary algorithms designed to minimize market impact, provide our customers an anonymous presence in the marketplace, and ~~its~~achieve various ~~subsidiaries:~~benchmarks including, but not limited to, the volume-weighted average price (VWAP).

• Vie ~~Institutional~~Financial ~~Services~~Group, Inc. was formed as a Delaware corporation in 1994. Vie’s subsidiary Universal Trading Technologies Corporation (UTTC) was incorporated in February 1995 with the business objective of designing, developing and utilizing products for the securities trading market. In September 1995, UTTC entered into an agreement with the Philadelphia Stock Exchange to employ its Universal Trading System (later renamed eVWAP) as a facility of the Exchange through its subsidiary REB Securities. eVWAP was a fully automated system that permitted market participants to trade eligible securities before the market open at the volume-weighted average price for the day. The VWAP is a widely accepted benchmark used by broker-dealers and institutional traders, and is derived from adding up the dollars traded for each transaction during a specified interval of time and then dividing by the total shares traded during the interval. In August 1999, we launched eVWAP, which was our primary product offering through the fiscal year ended March 31, 2002. Our last trade through the eVWAP system was in March 2002, and we mutually agreed with the Philadelphia Stock Exchange not to seek an extension of the eVWAP pilot facility on November 29, 2002 in order to focus on the business we now operate through Vie Securities.

•We ~~REB~~began operating Vie Securities in July 2000 as a broker-dealer and a member of the Philadelphia Stock Exchange. In September 2002, ~~Inc~~Vie Securities received approval to operate as a member of the NASD. Effective September 2003, Vie Securities is our sole operating entity. Vie Securities provides liquidity for block trades to our buy-side institutional clients and broker-dealer customers. We anonymously match customers’ orders with liquidity from various sources, thereby protecting our client trade information. Our trading products include Limit VWAP, Point-to-Point VWAP, Best Efforts VWAP, and other program trade execution products, including our new RapidEx product. We have added intelligent systematic program trading tools to our “flagship” VWAP products, and we expect the percentage of our revenues derived from these offerings to increase in the next fiscal year. We collect commissions from our customers and pay execution fees to our liquidity partners and trade execution venues on a per-share basis.

Prior to September 2003, Vie ~~Financial~~Institutional ~~Group~~Services, Inc., ~~was formed as~~ a ~~Delaware corporation in 1994. Vie’s~~ subsidiary ~~Universal Trading Technologies Corporation (~~of UTTC), ~~was incorporated~~served inour ~~February~~buy-side ~~1995~~institutional ~~with the business objective of designing~~customers, ~~developing~~while ~~and~~Vie ~~utilizing~~Securities ~~products~~served ~~for~~our ~~the~~broker-dealer ~~securities trading market~~customers. InOn September ~~1995~~15, ~~UTTC~~2003, ~~entered~~we ~~into~~withdrew anour ~~agreement~~broker-dealer registration with the ~~Philadelphia~~Securities ~~Stock~~and Exchange toCommission ~~employ~~for ~~its Universal~~Vie ~~Trading~~Institutional ~~System~~Services and ~~(later~~we ~~renamed~~withdrew ~~eVWAP)~~its asmemberships awith ~~facility of~~ the ~~Exchange~~NASD ~~through~~and ~~its~~the ~~subsidiary~~Philadelphia ~~REB~~Stock ~~Securities~~Exchange. ~~eVWAP~~We ~~was~~retained athe ~~fully~~customers ~~automated~~of ~~system~~Vie ~~that~~Institutional ~~permitted~~Services ~~market~~by ~~participants~~establishing toaccount ~~trade~~relationships ~~eligible~~with ~~securities~~those ~~before~~customers ~~the~~through ~~market~~Vie ~~open~~Securities, ~~at the volume-weighted average price (VWAP) for the day~~LLC. The ~~VWAP~~decision isto concentrate aall ~~widely~~of ~~accepted~~our ~~benchmark used by~~ broker-~~dealers~~dealer ~~and~~operations ~~institutional~~in ~~traders,~~one ~~and~~entity ishas ~~derived~~enabled ~~from~~us ~~adding~~to upconcentrate ~~the~~our ~~dollars~~capital ~~traded~~resources ~~for each transaction during a specified interval of time~~ and ~~then~~ ~~dividing~~eliminate byinfrastructure ~~the~~redundancies ~~total~~that ~~shares~~existed ~~traded~~in ~~during~~our ~~the~~prior ~~interval~~organizational structure. ~~In August 1999~~Further, weduring ~~launched eVWAP, which was our primary product offering through~~ the fiscal year ended March 31, ~~2002.~~2004, ~~Our~~we ~~last~~merged ~~trade~~Vie ~~through~~Institutional ~~the~~Services ~~eVWAP system was in March 2002,~~ and ~~on November~~REB 29Securities, ~~2002,~~Inc. weinto ~~mutually~~their ~~agreed~~parent ~~with~~company, ~~the~~UTTC ~~Philadelphia Stock Exchange not~~ to ~~seek~~further ansimplify ~~extension of the eVWAP pilot facility. Our current product offering consists of VWAP and other trade execution services which we provide through~~ our ~~broker-dealer~~ ~~subsidiaries~~corporate ~~Vie~~organizational ~~Institutional Services, Inc~~structure. ~~and Vie Securities, LLC.~~

~~Vie~~4 Institutional Services was formed in February 1999 as a broker-dealer registered with the Philadelphia Stock Exchange and the National Association of Securities Dealers (NASD). Vie Institutional Services provides liquidity for block trades to our buy-side institutional clients through our VWAP trading products, direct access service, and market-on-close products. We anonymously match customers’ orders with liquidity from various providers, thereby protecting our client trade information. Since May 2002, we launched four new trading products including Limit VWAP, Point-to-Point VWAP, Best Efforts VWAP and Market on Close. We operate Vie Institutional Services as an agency broker that matches buy-side institutional orders with other buy-side or liquidity provider orders. We collect commissions from our customers and pay fees to our liquidity providers on a per share basis.

~~Vie~~During ~~Securities~~the ~~began~~fiscal ~~operating~~year inended ~~July~~March ~~2000~~31, as2004 our three largest customers, including a ~~proprietary~~hedge ~~trading~~fund, a market maker, and a broker-dealer, ~~registered~~accounted ~~with~~for ~~the~~approximately ~~Philadelphia~~21%, ~~Stock Exchange.~~9% Onand ~~September 19~~8%, ~~2002~~respectively of our revenues, ~~Vie~~or ~~Securities~~a ~~received~~total ~~approval~~of toapproximately ~~operate~~37.5% asof our revenues. Our top three customers for the fiscal year ended March 31, 2003 accounted for a ~~member~~total of approximately 65% of the ~~NASD.~~revenues ~~Through~~during ~~Vie~~that ~~Securities~~year, weand ~~operate~~two ~~our~~of ~~proprietary~~those ~~trading~~customers ~~algorithm,~~were ~~which~~also ~~allows~~in usthe totop ~~provide~~three ~~liquidity~~customers atfor the ~~VWAP~~fiscal year ended March 31, 2004. Our customer base is susceptible to frequent change. Because our ~~broker-dealer~~customer arrangements are ~~customers~~not contractual, ~~including~~customers ~~Vie~~are ~~Institutional~~free ~~Services~~to trade with multiple service providers. Further, ~~and~~there ~~specialized~~is ~~trading~~intense ~~firms~~competition in the market for algorithmic trade execution services. ~~Using~~Because our ~~trading~~customers ~~algorithm~~trade with us at will, weand ~~attempt~~their torelationship ~~achieve~~with ~~the~~us can ~~VWAP~~be ofterminated ~~the~~at ~~securities~~any time, we ~~trade~~have inno ~~order~~control toover ~~minimize~~whether our ~~cost~~current ofcustomers ~~providing~~will ~~liquidity~~continue to ~~our~~do ~~customers~~business with us. WeAlthough ~~also collect~~our ~~commissions~~customer ~~from~~base continues to become less concentrated as our ~~broker-dealer~~revenues ~~customers~~increase, onif we are unable to maintain a diversified ~~per~~customer ~~share~~base, ~~basis~~then the loss of individual customers may materially and adversely affect our business, financial condition and results of operations.

4In September and October 2003, we raised an aggregate of $5 million through the issuance of our series H convertible preferred stock. On September 30, 2003, we issued shares of our series H preferred for an aggregate of $3.5 million to SOFTBANK Capital Partners LP, SOFTBANK Capital Advisors Fund LP and SOFTBANK Capital LP, each a Delaware limited partnership (SOFTBANK). On October 9, 2003, we issued additional shares of series H preferred for an aggregate of $1.5 million to Draper Fisher Jurvetson ePlanet Ventures L.P., a Cayman Islands limited partnership, Draper Fisher Jurvetson ePlanet Partners Fund, LLC, a California limited liability company, and Draper Fisher Jurvetson ePlanet Ventures GmbH & Co. KG, a German partnership (DFJ ePlanet), on the same terms as the series H preferred shares issued to SOFTBANK. Also on October 9, 2003, DFJ ePlanet converted the $1,062,889 of outstanding principal and accrued interest on their subordinated convertible notes issued in December 2002 into shares of series H preferred, and on October 29, 2003, SOFTBANK converted the $1,493,333 of outstanding principal and accrued interest on their subordinated convertible notes issued in December 2002 into shares of series H preferred. As a result of these transactions, SOFTBANK and DFJ ePlanet are entitled to 40% and 21%, respectively, of the aggregate voting rights with respect to all classes of our outstanding common and preferred voting stock. SOFTBANK and DFJ ePlanet are also investors in OptiMark Innovations, Inc. a Delaware corporation that controls approximately 26% of the aggregate voting rights with respect to all classes of our common and preferred voting stock. Pursuant to an Investors’ Rights Agreement, Innovations has the right to approve certain significant corporate matters such as (i) the issuance of additional shares of common stock; (ii) the repurchase or redemption of our securities; (iii) a merger, consolidation, or sale of substantially all of our assets; or (iv) our involvement in any business other than our current line of business.

~~Table~~On April 8, 2004, our stockholders voted to amend our certificate of ~~Contents~~incorporation to authorize a 1-for-100 reverse split of our common stock. We completed the reverse split on April 20, 2004. The purposes of the reverse stock split were to create a sufficient number of authorized but unissued shares of our common stock to permit the full conversion of the series H preferred and the conversion or exercise of all other existing convertible securities, for future issuances of common stock or convertible securities, and to reduce the number of outstanding shares of common stock to a number that is more comparable with the market capitalization of similar companies in our industry. On April 21, 2004, all of the shares of series H preferred were converted into 14,179,437 shares of common stock. All common share and per share numbers in this document have been restated to reflect the reverse split.

~~During~~We ~~the~~have ~~year~~recognized ~~ended~~recurring ~~March~~operating ~~31,~~losses ~~2003~~since ~~three~~our ~~customers,~~inception ~~including~~and ahave ~~money~~financed ~~manager,~~our aoperations ~~hedge~~primarily ~~fund,~~through ~~and~~the ~~a broker-dealer,~~issuance ~~accounted~~of ~~for~~debt ~~approximately 33%, 22%~~ and ~~10%,~~equity securities. ~~respectively~~As of ~~our~~March ~~revenues.~~31, ~~Although~~2004, ~~our~~we ~~revenues~~had ~~for~~an ~~the~~accumulated ~~fiscal~~deficit ~~year~~of ~~were~~$111,531,101 ~~concentrated~~and ~~among~~stockholders’ ~~these~~deficiency ~~three~~of ~~customers~~$4,647,497, ~~our~~which ~~customer~~raises ~~base~~doubt isas ~~susceptible~~ to ~~frequent~~our ~~change.~~ability ~~Our~~to ~~customer arrangements~~continue ~~are~~as ~~not~~a ~~contractual,~~going soconcern. ~~customers~~We are ~~free~~actively toexploring ~~trade~~alternative ~~with~~sources ~~multiple service providers. Further~~of capital, ~~there~~including isadditional ~~intense~~financing ~~competition~~arrangements inand ~~the~~strategic ~~market~~relationships ~~for~~with ~~VWAP~~other ~~trade~~firms. ~~execution~~If ~~services.~~we ~~Because~~are ~~our~~unable ~~customers~~to ~~trade~~accomplish ~~with~~either usof atthese ~~will,~~objectives ~~and~~or ~~their relationship~~generate ~~with~~sufficient uscash ~~can~~flows befrom ~~terminated~~operations atto ~~any~~fund ~~time,~~our webusiness ~~have~~within nothe ~~control~~next ~~over~~three months, ~~whether~~we ~~our~~will ~~current~~be ~~customers~~unable ~~will~~to continue tooperating doas ~~business~~an ~~with~~independent usentity. ~~Although~~There weis ~~believe~~no ~~our~~assurance ~~customer~~that ~~base~~we will be ~~less~~successful ~~concentrated~~in ~~during~~accomplishing ~~the~~these ~~fiscal year ended March 31~~objectives, ~~2004,~~ ifnor can we ~~are~~predict ~~unable~~the toterms ~~maintain~~or athe ~~diversified~~impact ~~customer~~on ~~base,~~existing ~~then~~holders ~~the loss~~ of ~~individual~~our ~~customers~~common ~~may~~stock ~~materially~~of ~~and~~any potential ~~adversely~~financing ~~affect~~or ~~our~~strategic ~~business, financial condition and operating results~~transaction.

WeOur ~~are a subsidiary of OptiMark Innovations Inc., a Delaware corporation. On~~principal ~~May~~executive 7,offices ~~2002,~~are ~~Innovations~~at ~~acquired~~1114 ~~approximately~~Avenue ~~88%~~ of ~~our~~the ~~outstanding shares of common stock~~Americas, ~~and~~22nd ~~we issued a senior secured convertible note to Innovations for $2~~Floor,~~727,273,~~ ~~which~~New ~~is convertible into 52~~York,~~870,757~~ ~~shares~~New ofYork ~~our common stock~~10036. ~~Assuming conversion~~Our oftelephone ~~this~~number note, Innovations would own approximately 89% of our common stock. As long as Innovations owns a majority of our outstanding common stock, Innovations will be able to elect a majority of our board of directors and control theis ~~outcome of any other matter submitted to a vote of our stockholders. Pursuant to an Investors’ Rights Agreement, Innovations has the right to approve certain significant corporate matters such as~~ (i212) ~~the~~575-8200. ~~issuance~~Our ofwebsite ~~additional~~is ~~shares~~www.viefinancial.com. ofInformation ~~common stock;~~on ~~(ii) the repurchase or redemption of~~ our ~~securities;~~website ~~(iii)~~does anot ~~merger,~~constitute ~~consolidation,~~part ~~or sale~~ of ~~substantially~~this ~~all of our assets; or (iv) our involvement in any business other than our current line of business~~document.

On5 October 9, 2002, we hired Dean Stamos as our Chief Executive Officer. Mr. Stamos is co-founder and the former president of NYFIX Millennium, a New York-based alternative trading system and registered broker-dealer. Also on October 9, 2002, we launched our new identity with the announcement of our name change to Vie Financial Group, Inc. from The Ashton Technology Group, Inc. We also changed the name of our subsidiaries, Croix Securities, Inc. and ATG Trading, LLC to Vie Institutional Services, Inc. and Vie Securities, LLC, respectively.

WeOther ~~have~~Affiliates recognized recurring operating losses since our inception and have financed our operations primarily through the issuance of equity securities. As of March 31, 2003, we had an accumulated deficit of $96,513,500 and stockholders’ deficiency of $4,039,795, which raises doubt as to our ability to continue as a going concern. We have developed a plan that we believe will enable us to continue operating until we are able to generate sufficient revenues to fund our operations. Our primary initiatives include reducing the cost of providing liquidity to our customers, reducing our current operating expenses and streamlining our corporate structure. There is no assurance however that the plan will be successful.

~~Our~~Ashton ~~principal~~Technology ~~executive offices are at 1835 Market Street~~Canada, ~~Suite 420, Philadelphia, Pennsylvania 19103~~Inc. ~~Our telephone number is (215) 789-3300. Our website is www.viefinancial.com. Information on our website does not constitute part of this document.~~

~~Other~~Ashton ~~Affiliates~~Technology Canada, Inc. is one of our majority-owned subsidiaries. On December 20, 1999, we entered into an agreement to create Ashton Canada to develop, market and operate intelligent matching, online transaction systems and distribution systems for use by U.S. and Canadian financial intermediaries. On June 8, 2000, Ashton Canada entered into an agreement with the Toronto Stock Exchange to market, deploy, and operate our proprietary eVWAP, as a facility of the Toronto Stock Exchange for Canadian securities. On January 12, 2001, the Ontario Securities Commission approved an amendment to the Rules and Policies of the Toronto Stock Exchange, allowing the implementation of eVWAP as a facility of the Toronto Stock Exchange and allowing participating organizations and eligible institutional clients access to the eVWAP facility. The Toronto Stock Exchange deferred implementing eVWAP in 2002, and Ashton Canada reduced its expenses and staffing to address the reduced prospects for near-term revenues from such a facility.

On June 11, 2003, Ashton ~~Technology~~Canada filed an arbitration claim against the Toronto Stock Exchange for breach of contract under the June 7, 2000 agreement to introduce the eVWAP trading system. Ashton Canada is no longer operational, ~~Inc~~has no employees, and currently has the sole objective of focusing on the arbitration claim with the Toronto Stock Exchange. The arbitration claim states that Ashton Canada designed, developed and was prepared to deploy eVWAP as a facility of the primary Canadian exchange when the Toronto Stock Exchange circumvented the deployment of eVWAP without proper excuse. The Ashton Canada arbitration claim was filed in Toronto, Ontario and seeks substantial damages. On August 22, 2003, the Toronto Stock Exchange filed a counterclaim against Ashton Canada seeking specific performance of the integration agreement, or in the alternative, a declaration that it is entitled to terminate the agreement without penalty. The arbitration case began in May 2004, and closing arguments were submitted to the arbitrator in June 2004.

~~Ashton~~Electronic ~~Technology~~Market ~~Canada~~Center, Inc. is(Discontinued ~~one~~Operations) of our majority-owned subsidiaries. On December 20, 1999, we entered into an agreement to create Ashton Canada to develop, market and operate intelligent matching, online transaction systems and distribution systems for use by U.S. and Canadian financial intermediaries. On June 8, 2000, Ashton Canada entered into an agreement with the Toronto Stock Exchange to market, deploy, and operate our proprietary eVWAP, as a facility of the Toronto Stock Exchange for Canadian securities. On January 12, 2001, the Ontario Securities Commission approved an amendment to the Rules and Policies of the Toronto Stock Exchange, allowing the implementation of eVWAP as a facility of the Toronto Stock Exchange and allowing participating organizations and eligible institutional clients access to the eVWAP facility. The Toronto Stock Exchange deferred implementing eVWAP in 2002, and Ashton Canada reduced its expenses and staffing to address the reduced prospects for near-term revenues from such a facility.

OnWe ~~June~~formed ~~11,~~Electronic ~~2003~~Market Center, ~~Ashton~~Inc. ~~Canada~~(eMC) ~~filed~~as ana ~~arbitration~~wholly ~~claim~~owned ~~against~~subsidiary ~~the~~in ~~Toronto~~June ~~Stock~~1998 ~~Exchange~~to develop, operate and market a global electronic distribution channel for ~~breach~~financial ofproducts ~~contract~~and ~~under~~services. ~~the~~In ~~June~~April 72000, ~~2000~~Vie’s ~~agreement~~board of directors agreed to ~~introduce~~fund ~~the~~eMC’s ~~eVWAP~~initial ~~trading~~development ~~system~~efforts. ~~The~~After ~~arbitration~~being ~~claim~~unable ~~states~~to ~~that~~find ~~Ashton~~other ~~Canada designed,~~funding ~~developed~~sources ~~and~~or ~~was~~consummate ~~prepared~~a tosale ~~deploy~~of ~~eVWAP~~eMC asto a ~~facility~~third party, eMC’s board of ~~the~~directors ~~primary~~voted ~~Canadian~~on ~~exchange~~March ~~when~~29, 2001 to begin the ~~Toronto~~orderly ~~Stock~~winding ~~Exchange~~down ~~circumvented~~of ~~the~~its ~~deployment~~operations, including terminating all of ~~eVWAP~~its ~~without~~employees, ~~proper~~selling ~~excuse.~~its ~~The~~assets, ~~Ashton~~and ~~Canada~~negotiating ~~arbitration~~the ~~claim~~settlement ~~was~~of ~~filed~~its inoutstanding ~~Toronto,~~liabilities. eMC’s ~~Ontario~~results ~~and~~are ~~seeks~~reflected ~~substantial~~as ~~damages~~discontinued operations in the consolidated financial statements for all periods presented.

5Products and Services

~~Table~~Our primary source of ~~Contents~~revenues during the three fiscal years ended March 31, 2004 has been our flagship VWAP product line. We believe VWAP has worldwide recognition as a benchmark used by broker-dealers and buy-side institutions to measure traders’ performance. VWAP is derived from adding up the dollars traded for each transaction during a specified interval of time and then dividing by the total shares traded during the interval. Our VWAP products were developed to help our customers meet this widely accepted yet difficult to achieve benchmark. Our VWAP products include the following:

~~Ashton~~• ~~Canada~~Full-Day ~~is no longer operational, has no employees, and currently has the sole objective of focusing on the arbitration claim with the Toronto Stock Exchange.~~ VWAPSM

~~Electronic~~With ~~Market~~Full-Day ~~Center~~VWAP, ~~Inc.~~traders ~~(Discontinued~~can ~~Operations)~~execute large transactions prior to market open and lock in the VWAP for their buy and sell orders. This product permits short sales that are exempt from the SEC’s up-tick rules for a large group of listed securities.

We• ~~formed~~Limit Electronic Market Center, Inc. (eMC) as a wholly owned subsidiary in June 1998 to develop, operate and market a global electronic distribution channel for financial products and services. In April 2000, Vie’s board of directors agreed to fund eMC’s initial development efforts. After being unable to find other funding sources or consummate a sale of eMC to a third party, eMC’s board of directors voted on March 29, 2001 to begin the orderly winding down of its operations, including terminating all of its employees, selling its assets, and negotiating the settlement of its outstanding liabilities. eMC’s results are reflected as discontinued operations in the consolidated financial statements for all periods presented. VWAPSM

~~Products~~This unique and flexible product significantly reduces trade execution risk by allowing customers to achieve limit order protection and anonymity for large blocks that are incrementally filled using VWAP tracking algorithms. With Limit VWAP, a customer can place an order to buy at the VWAP benchmark without exceeding a price specified by the buyer in advance. Conversely, the Limit VWAP also allows a

We6 believe VWAP has worldwide recognition as a benchmark used by broker-dealers and buy-side institutions to measure traders’ performance. VWAP is derived from adding up the dollars traded for each transaction during a specified interval of time and then dividing by the total shares traded during the interval. Our VWAP products were developed to help our customers meet this widely accepted yet difficult to achieve benchmark. Our VWAP products include the following:

• customer ~~Full~~to sell at the VWAP benchmark without going below a pre-~~Day~~specified price. Limit VWAP is designed not to go outside of the boundaries of the customer’s price.

~~With~~• ~~Full~~Point-~~Day VWAP, traders can execute large transactions prior~~ to ~~market open and lock in the VWAP for their buy and sell orders. This product permits short sales that are exempt from the SEC’s up~~-~~tick~~Point ~~rules for a large group of listed securities.~~ VWAPSM

•This ~~Limit~~product gives traders the flexibility to benchmark off the VWAP in fifteen-minute intervals during the trading day. A sample Point-to Point VWAP trade can be placed at 11:15 am and end at 3:45 pm. Buy and sell orders for each point-to-point session are priced at the primary market VWAP for the specified interval. Point-to-Point VWAP orders generally must be received five minutes before the beginning of the fifteen-minute trading interval.

~~This~~• ~~unique~~Best ~~and~~Efforts flexible product significantly reduces trade execution risk by allowing customers to achieve limit order protection and anonymity for large blocks that are incrementally filled using VWAP tracking algorithms. With Vie Limit VWAP, a customer can place an order to buy at the VWAP benchmark without exceeding a price specified by the buyer in advance. Conversely, the Limit VWAP also allows a customer to sell at the VWAP benchmark without going below a pre-specified price. Vie Limit VWAP is designed not to go outside of the boundaries of the customer’s price. VWAPSM

•Best ~~Point-to-Point~~Efforts VWAP uses our proprietary and licensed VWAP trading algorithms to achieve pricing that closely tracks the volume weighted average price. Best efforts orders have a cancellation feature and receive the composite price achieved over the specified interval.

~~This~~In ~~product~~addition ~~gives traders the flexibility~~ to ~~benchmark off the~~ VWAP ~~in fifteen~~-~~minute~~based ~~intervals during the~~ trading, ~~day.~~we Aoffered ~~sample~~the ~~Point-to~~following ~~Point~~trade ~~VWAP~~execution ~~trade~~services ~~can~~during bethe ~~placed~~fiscal atyear ~~11:15~~ended amMarch ~~and~~31, ~~end at 3~~2004:45 pm. Buy and sell orders for each point-to-point session are priced at the primary market VWAP for the specified interval. Point-to-Point VWAP orders generally must be received five minutes before the beginning of the fifteen-minute trading interval.

• ~~Best Efforts VWAP~~RapidExSM

~~Best~~This ~~Efforts~~direct ~~VWAP~~access ~~uses~~service ~~our~~enables ~~VWAP~~clients ~~tracking~~to trade ~~algorithms~~NYSE, toNasdaq ~~achieve~~and ~~pricing~~AMEX ~~that~~stocks ~~closely~~on ~~tracks~~a ~~the~~single ~~volume~~platform, ~~weighted~~offering ~~average~~a ~~price.~~connection ~~Best~~to ~~efforts~~multiple ~~orders~~liquidity ~~have~~sources. ~~a cancellation~~We ~~feature~~accept ~~and~~these ~~receive~~orders ~~the~~via ~~composite~~a ~~price~~FIX ~~achieved~~connection, ~~over~~e-mail, ~~the~~FTP, ~~specified~~fax ~~interval~~and phone.

In• ~~addition~~Market toon ~~VWAP-based~~OpenSM ~~trading,~~(MOO) weand ~~offer~~Market ~~the~~on ~~following~~CloseSM ~~trade execution services:~~ (MOC)

•For ~~Direct~~program ~~Access~~and quantitative traders who need to trade large baskets of securities, including Nasdaq issues, at the opening or closing price, we offer MOO and MOC, which guarantee the beginning-of-day opening price or the end-of-day closing price on orders received within specified time parameters.

~~This~~• service enables clients to trade NYSE, Nasdaq and AMEX stocks on a single platform, offering a connection to multiple liquidity sources. We currently accept these orders via a FIX connection, e-mail, FTP, fax and phone. In the near future, we plan to provide these services through a direct access workstation, fully integrated into leading trade order management systems. PairsSM

6This strategy allows traders to employ market neutral trading strategies by trading highly correlated stock and acting upon their convergence or divergence.

~~Table~~Since the beginning of ~~Contents~~2004, we have increasingly focused on bringing electronic trade execution algorithms to institutional clients. As awareness has increased among institutional investors of the benefits of algorithmic “low-touch” trading methods, we have seen the beginning of a race among institutional brokerages to provide such low-touch trading services. These services enable investors to not only tap most markets directly, but to also form automated buy and sell strategies that create minimal market impact, without the type of human interaction that has driven trading for decades.

•The ~~Market~~value onproposition ~~Close~~for algorithmic trading performance lies in the various proprietary trading methods employed by brokerage firms. These strategies track a wide range of current, historical and long- and short-term investment data to develop their electronic trading algorithms. In addition to RapidExSM, we have added the following products to compete in this space:

~~For~~• ~~program~~Orders ~~and~~using ~~quantitative traders~~Statistical ~~who~~Price ~~need~~Predictive ~~to trade large baskets of securities, including Nasdaq issues, at the closing price, we offer Market on Close, which guarantees the end-of-day closing price on orders received by 3~~MethodsSM:~~30 pm.~~

~~Competition~~An algorithmic stock-specific, multi-factor and multi-venue model based on historical data. When conditions are predicted to be favorable for short-term movement in the trade direction, the model opens the trading “window”. The model closes the window and cancels all open orders when direction is predicted to be unfavorable.

We• ~~face competition from traditional broker~~10b-~~dealers,~~18 proprietary trading firms, and alternative trading systems offering similar trade execution services, including companies such as Investment Technology Group, Instinet, Bloomberg and LiquidNet. The marketplace for VWAP execution products and services has become highly competitive with the increasing customer demand for VWAP executions. Customers demand guaranteed VWAP pricing, confidentiality, and competitive commission rates. Recently, our key customer mix is susceptible to constant change as a result of customers’ sensitivity to commission rates, their willingness to engage multiple VWAP service providers, and the non-contractual nature of our relationships with customers. AlgorithmSM:

WeAn ~~believe~~algorithm ~~the factors~~ that ~~distinguish~~is ~~our~~designed ~~products from those of our competitors include high fill rates, minimal market impact, anonymity, quality of trade execution and pricing, and client service. We provide a real alternative~~ to ~~the~~accommodate ~~traditional~~corporate ~~and~~repurchases ~~proprietary brokerage relationships; we execute orders on behalf of clients,~~ and ~~we act as principal only to guarantee clients the VWAP. We do not hold securities positions and we do not trade for our own account. This eliminates an inherent conflict of interest~~ that wecomplies ~~believe~~with ~~will become an influencing factor as~~ regulatory, ~~audit,~~requirements ~~compliance~~applicable ~~and ethical standards increase due~~ to ~~recent~~ corporate ~~abuses, declining institutional fund performance and an overall difficult economic climate~~repurchases. Our network of clients and liquidity partners enables us to match natural buyers and sellers, giving us the ability to offer higher fill rates than many of the alternative trading systems that we compete with and to work large orders anonymously to prevent client orders from negatively impacting market price.

~~Although~~7 we feel our products offer improved trading performance, flexibility and other benefits, there is no assurance that our products will adequately address all the competitive criteria in a manner that results in a competitive advantage.

~~Regulation~~• Post-Trade Performance MeasurementSM:

~~Government~~Through ~~Regulation~~our collaboration with a highly regarded market impact measurement service, we provide our clients with a customer-specific trade performance report. We expect to realize both customer relationship benefits, in a market where customers are increasingly focused on execution quality, and benefits in monitoring our own execution performance.

~~Our~~We ~~broker-dealer entities~~ are ~~subject~~in tolimited ~~significant~~production ~~government regulation, under both federal and state laws, as well as the rules of several self-regulatory organizations, or SROs. The SEC is primarily responsible for the administration~~with ofall ~~the federal securities laws, while SROs are responsible for the day-to-day regulation~~ of ~~their~~these ~~broker-dealer~~products ~~members. The SEC~~ and ~~SROs~~services ~~are also charged with protecting the interests of the investing public~~ and ~~the integrity of the securities markets. Our broker-dealer affiliates, Vie Institutional Services, Vie Securities and REB Securities~~ are ~~subject~~beginning to ~~regulation~~recognize byrevenue ~~the~~from ~~SEC,~~each ~~the~~of ~~NASD,~~them ~~and/or~~during the ~~Philadelphia~~first ~~Stock~~quarter ~~Exchange, with respect to all aspects~~ of the ~~securities~~fiscal ~~business, including~~year ~~sales~~ending ~~practices,~~March ~~record keeping~~31, ~~capital structure, and conduct of directors, officers and employees~~2005. The SEC, SROs and state securities commissions may conduct periodic examinations of broker-dealers, which can result in censures, fines, orders to cease and desist, or the suspension of broker-dealers, their officers or employees. The principal purpose of these regulations is to protect clients of broker-dealers and the securities markets, rather than to protect the creditors and stockholders of the broker-dealers.

~~Net~~Competition ~~Capital Requirement and Credit Risk~~

AsThe ~~registered~~algorithmic ~~broker-dealers,~~trade ~~our subsidiaries~~execution ~~Vie~~and ~~Institutional~~analysis ~~Services,~~services ~~Vie~~that ~~Securities~~we ~~and~~offer ~~REB~~compete ~~Securities~~with ~~are~~services ~~subject~~offered toby ~~the~~leading ~~SEC’s~~brokerage ~~Uniform~~firms ~~Net~~and ~~Capital~~transaction ~~Rule~~processing firms, ~~(Rule~~and ~~15c3-1)~~with ~~under~~providers ~~the~~of ~~Securities~~electronic ~~Exchange~~trading, ~~Act~~trade oforder ~~1934~~management systems and financial information services. ~~The~~We ~~net~~also ~~capital~~compete ~~rule~~with isvarious ~~designed~~national toand ~~measure~~regional ~~the~~securities ~~general integrity~~exchanges and ~~liquidity~~execution offacilities, aalternative ~~broker-dealer~~trading systems, electronic crossing networks and ~~requires~~other ~~that~~share atmatching ~~least~~systems afor ~~minimum~~trade ~~part~~execution ofservices. ~~its~~The ~~assets~~marketplace befor ~~kept~~algorithmic inand aVWAP ~~relatively~~execution ~~liquid~~products ~~form~~and toservices ~~promptly~~has ~~satisfy~~become highly competitive with the ~~claims~~increasing ofcustomer ~~customers~~demand iffor ~~the~~these products. ~~broker-dealer~~Customers ~~goes~~demand ~~out~~confidentiality ofand ~~business~~competitive trade execution quality and commission rates. IfOur ~~our~~key ~~broker-dealer affiliates~~customer ~~fail~~mix is susceptible to ~~maintain~~constant ~~the~~change ~~required~~as ~~net~~a ~~capital,~~result ~~the~~of ~~SEC,~~customers’ ~~Philadelphia~~sensitivity ~~Stock~~to ~~Exchange~~commission ~~and/or~~rates, ~~NASD~~their ~~may~~willingness ~~impose~~to engage ~~regulatory~~multiple ~~sanctions~~service providers, ~~which~~and ~~may~~the ~~include~~non-contractual ~~suspension~~nature orof our relationships with customers.

7We believe the factors that distinguish our products from those of our competitors include high fill rates, minimal market impact, anonymity, quality of trade execution and pricing, and client service. We provide a real alternative to the traditional and proprietary brokerage relationships; we execute orders on behalf of clients, and we act as principal only to guarantee clients the VWAP. We do not hold securities positions and we do not trade for our own account. This eliminates an inherent conflict of interest that we believe will become an influencing factor as regulatory, audit, compliance and ethical standards increase due to recent corporate abuses, declining institutional fund performance and an overall difficult economic climate. We are beginning to gain access to large firms that previously would not have considered doing business with a firm of our size as a result of recent broad acceptance of algorithmic executions. We believe firms that provide the best services will attract the business, regardless of size. Finally, our network of clients and liquidity partners enables us to match buyers and sellers, giving us the ability to offer higher fill rates than many of the alternative trading systems that we compete with and to work large orders anonymously to prevent client orders from negatively impacting market price.

~~Table~~Although ofwe ~~Contents~~feel our products offer improved trading performance, flexibility and other benefits, there is no assurance that our products will adequately address all the competitive criteria in a manner that results in a competitive advantage.

~~revocation~~Regulation of our broker-dealer licenses. Also, a change in the net capital rules, the imposition of new rules or any unusually large charge against any of our broker-dealer affiliates’ net capital could limit our operations, particularly Vie Securities that requires higher net capital levels in order to engage in principal trades. A significant operating loss or any unusually large charge against any of our broker-dealer affiliates’ net capital could adversely affect our ability to expand or even maintain our present levels of business, which could have a material adverse effect on our business, financial condition and operating results. Also, these net capital requirements limit our ability to transfer funds from our broker-dealer affiliates to Vie Financial Group.

WeGovernment ~~have~~Regulation elected to use the basic method permitted by Rule 15c3-1, which requires that we maintain minimum net capital equal to the greater of $5,000 for Vie Institutional Services and REB and $100,000 for Vie Securities, or 6 2/3% of aggregate indebtedness. At March 31, 2003, Vie Institutional Services, Vie Securities and REB had net capital of $140,154, $1,370,490 and $9,594, respectively, of which $88,420, $1,270,490 and $4,594, respectively, was in excess of required net capital.

As a registered broker-dealer, Vie Securities ~~engages~~is insubject ~~principal~~to ~~trading~~significant ~~activities~~government regulation, ~~which~~under ~~may~~both ~~include~~federal and state laws, as well as the rules of ~~purchase,~~several ~~sale~~self-regulatory organizations, or ~~short~~SROs. ~~sale~~The ofSEC ~~securities~~is ~~and~~primarily ~~derivative~~responsible for the administration of the federal securities. ~~These~~laws, ~~activities~~while SROs are ~~subject~~responsible tofor athe ~~number~~day-to-day regulation of ~~risks~~their ~~including~~broker-dealer ~~price~~members. ~~fluctuations~~The SEC and ~~rapid~~SROs ~~changes~~are also incharged with protecting the ~~liquidity~~interests of ~~markets,~~the ~~all~~investing ofpublic ~~which~~and ~~subjects~~ the ~~capital~~integrity of ~~Vie~~the ~~Securities to~~securities ~~substantial risks~~markets. Vie ~~Institutional~~Securities ~~Services~~is ~~does~~subject ~~not~~to ~~act~~regulation asby athe ~~principal~~SEC and the NASD with respect to all aspects of the securities ~~transactions;~~business, itincluding ~~acts~~sales practices, ~~only~~record onkeeping, ancapital ~~agency~~structure, ~~basis.~~and ~~Although~~conduct ~~REB~~of isdirectors, ~~registered~~officers asand aemployees. ~~broker-dealer~~The SEC, itSROs ~~does~~and ~~not~~state ~~perform~~securities ~~any~~commissions ~~traditional~~may conduct periodic examinations of broker-~~dealer services;~~dealers, itwhich ~~previously~~can ~~acted~~result ~~only~~in ascensures, afines, ~~facilities~~orders ~~manager~~to ~~for~~cease and desist, or the ~~eVWAP~~suspension ~~system~~of broker-dealers, ~~and~~their isofficers ~~currently~~or ~~inactive~~employees. The ~~relatively~~principal ~~low~~purpose ~~credit risk~~ of these ~~businesses~~regulations is ~~evidenced~~to byprotect ~~their~~clients ~~minimal~~of ~~net~~broker-dealers ~~capital~~and ~~requirements.~~the securities markets, rather than to protect the creditors and stockholders of the broker-dealers.

~~Proprietary~~8 ~~Rights~~

WeNet ~~regard~~Capital ~~our~~Requirement ~~products~~ and ~~services~~Market ~~and~~Risk the research and development that went into developing them as our property. Unauthorized third parties could copy or reverse engineer certain portions of our products or obtain or use information that we regard as proprietary. In addition, our trade secrets could become known to or be independently developed by our competitors.

WeAs ~~rely~~a ~~primarily~~registered onbroker-dealer, aVie ~~combination~~Securities ofis ~~patent,~~also subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1) under ~~trademark~~the ~~and~~Securities ~~trade~~Exchange ~~secret~~Act ~~protection,~~of ~~employee~~1934. ~~and~~The ~~third~~net ~~party~~capital ~~confidentiality~~rule is designed to measure the general integrity and ~~non-disclosure~~liquidity ~~agreements,~~of ~~license~~a ~~agreements,~~broker-dealer and ~~other~~requires ~~intellectual~~that ~~property~~at ~~protection~~least ~~methods~~a minimum part of its assets be kept in a relatively liquid form to ~~protect~~promptly ~~these~~satisfy the ~~property~~claims ~~rights~~of customers if the broker-dealer goes out of business. ~~While~~If our ~~competitive~~broker-dealer ~~position may~~fails beto ~~adversely~~maintain ~~affected~~the byrequired net capital, the ~~unauthorized~~SEC, ~~use~~and/or NASD may impose regulatory sanctions, which may include suspension or revocation of our ~~proprietary~~broker-dealer license. ~~information~~Also, wea ~~believe~~change in the ~~ability~~net tocapital ~~protect~~rules, ~~fully~~the imposition of new rules or any unusually large charge against our ~~intellectual~~broker-dealer ~~property~~affiliate’s isnet ~~less~~capital could limit our operations. A significant operating loss or any unusually large charge against our broker-dealer affiliate’s net capital could adversely affect our ability to expand or even maintain our ~~success~~present ~~than~~levels ~~other~~of ~~factors~~business, ~~such~~which ascould ~~the~~have ~~knowledge~~a material adverse effect on our business, ~~ability~~financial condition and ~~experience~~ results of operations. ~~our~~Also, ~~employees~~these ~~and~~net capital requirements limit our ~~ongoing~~ability ~~product~~to ~~development~~transfer ~~and~~funds ~~customer~~from ~~support~~our ~~activities~~broker-dealer affiliate to Vie Financial Group.

~~Although~~We wehave ~~believe~~elected ~~our~~to ~~services~~use ~~and products do not infringe on~~ the ~~intellectual~~basic ~~property~~method ~~rights~~permitted ofby ~~others~~Rule 15c3-1, ~~there~~which ~~can~~requires ~~be no assurance~~ that ~~third~~we ~~parties~~maintain ~~will~~minimum ~~not~~net ~~assert~~capital ~~infringement~~equal ~~claims~~to ~~against us in~~ the ~~future. Any~~greater ~~such~~of ~~assertions by third parties could result in costly litigation~~$100,000 inor 62/3% ~~which~~of weaggregate ~~may~~indebtedness. ~~not~~At ~~prevail.~~March ~~Also~~31, ~~in such event~~2004, weVie ~~may~~Securities behad ~~unable~~net tocapital ~~license~~of ~~any patents or other intellectual property rights from third parties on commercially reasonable terms~~$2, ~~if at all. Litigation~~100,873, ~~regardless~~ of ~~its outcome~~which $2,000,873 ~~could~~was ~~also result~~ in ~~substantial~~excess ~~cost and diversion~~ of ~~our~~required ~~already~~net ~~limited resources~~capital. ~~Any infringement claims or other litigation against us could materially impact our business, operating results, and consolidated financial condition.~~

~~Employees~~Vie Securities engages in principal trading activities in order to guarantee the VWAP on certain customer orders, which may include the purchase, sale or short sale of securities and derivative securities. These activities are subject to a number of risks including price fluctuations and rapid changes in the liquidity of markets, all of which subjects the capital of Vie Securities to substantial risks.

AsProprietary ofIntellectual ~~March~~Property ~~31,~~Rights ~~2003, we employed a total of 40 people.~~

~~ITEM~~Our 2success is dependent, in part, upon our proprietary intellectual property. ~~PROPERTIES~~We generally protect these property rights as trade secrets through employee and third party confidentiality and non-disclosure agreements, license agreements, and other intellectual property protection methods. We are also exploring protecting our proprietary intellectual property through patents, registered trademarks, and registered copyrights.

OnUnauthorized third ~~December~~parties 23could copy or reverse engineer certain portions of our products or obtain or use information that we regard as proprietary. In addition, ~~1999~~our trade secrets could become known to or be independently developed by our competitors. While our competitive position may be adversely affected by the unauthorized use of our proprietary information, we ~~entered~~believe ~~into~~the aability ~~ten-year~~to ~~lease~~protect ~~for~~fully ~~approximately~~our ~~11,000~~intellectual ~~square~~property ~~feet~~is ofless ~~office~~significant ~~space~~to atour ~~1835~~success ~~Market~~than ~~Street~~other factors, ~~Suite~~such ~~420,~~as ~~Philadelphia~~the knowledge, ability ~~Pennsylvania~~and ~~19103.~~experience ~~Our~~of ~~principal~~our ~~executive~~employees ~~offices~~and ~~are~~our atongoing ~~this~~product ~~location~~development and customer support activities.

8Although we believe our services and products do not infringe on the intellectual property rights of others, there can be no assurance that third parties will not assert infringement claims against us in the future. Any such assertions by third parties could result in costly litigation, in which we may not prevail. Also, in such event, we may be unable to license any patents or other intellectual property rights from third parties on commercially reasonable terms, if at all. Litigation, regardless of its outcome, could also result in substantial cost and diversion of our already limited resources. Any infringement claims or other litigation against us could materially impact our business, results of operations, and consolidated financial condition.

~~Table~~Employees ~~of Contents~~

WeAs ~~also lease approximately 1,675 square feet~~ of ~~office space at 1900 Market Street, Suite 701,~~March ~~Philadelphia~~31, ~~Pennsylvania 19103~~2004, ~~pursuant~~we toemployed a ~~sublease~~total ~~expiring~~of in23 ~~May~~full-time ~~2005~~personnel. ~~This is the principal location for our computer operations.~~

~~Effective~~Availability ~~June 20, 2002, we entered into a three-year sublease for approximately 6,000 square feet~~ of ~~office~~Public ~~space~~Reports ~~at 1114 Avenue of the Americas, 22nd Floor, New York, New York 10036. This location serves our New York-based staff, which includes administrative, marketing and technology employees.~~

~~ITEM~~Our 3annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are available without charge on our web site at http://www.viefinancial.com. ~~LEGAL~~You ~~PROCEEDINGS~~may also obtain copies of our reports without charge by writing to: Vie Financial Group, Inc., 1114 Avenue of the Americas, New York, NY, 10036, Attention: Investor Relations.

~~In May~~9 2003, a former employee and a current employee filed separate claims against us with the U.S. Department of Labor/ Occupational Safety & Health Administration (DOL). The claims both allege employment practice issues under the Sarbanes-Oxley Act of 2002. On June 12, 2003, we responded to both claims and denied all allegations. Under the Sarbanes-Oxley Act, claimants can file a civil suit after exhausting administrative remedies before the DOL. Although we believe the allegations are without merit, the outcome of the administrative and court proceeding, if filed, is uncertain. We do not expect a material adverse impact on our financial condition and results of operations as a result of these claims.

OnITEM ~~June 7, 2000, our subsidiary, Ashton Canada, entered into a written agreement with the Toronto Stock Exchange Inc~~2. for the integration of Ashton Canada’s eVWAP trade match software, equipment and communications facilities with the Toronto Stock Exchange’s continuous auction market for securities. After Ashton Canada had designed and implemented the eVWAP software and assisted the Toronto Stock Exchange in securing all necessary approvals of the Ontario Securities Commission, the Toronto Stock Exchange, without proper justification or excuse, suspended the integration of eVWAP. Thereafter, following failure by the parties to resolve this matter, on June 11, 2003, Ashton Canada filed an arbitration claim against the Toronto Stock Exchange seeking damages of US $30 million for breach of contract, interest in the amount for a period as may be determined by the arbitrator, and costs of the arbitration. The arbitration was filed under the Ontario Arbitrations Act. The outcome of Ashton Canada’s claims is uncertain at this time. PROPERTIES

OnEffective ~~May~~June 20, 2002, ~~Finova~~we ~~added~~entered usinto as a ~~defendant in the case Finova Capital Corporation v. OptiMark Technologies, Inc., OptiMark, Inc and OptiMark Holdings, Inc., Docket No.: HUD~~three-~~L-3884-01,~~year ~~Superior~~sublease ~~Court~~for ofapproximately New Jersey—Hudson County. Finova asserts claims arising out of an equipment lease agreement pursuant to which Finova alleges that OptiMark Technologies, Inc (now known as OptiMark US Equities, Inc.) agreed to lease certain equipment from Finova. Finova has made claims in unspecified amounts exceeding $6 ~~million (plus interest~~,000 ~~late charges,~~square ~~litigation~~feet ~~costs and expenses) for, among other things, fraudulent conveyance~~ of ~~certain~~office ~~assets~~space ~~comprised,~~ at ~~least~~1114 inAvenue ~~part,~~ of the ~~intellectual property and non-cash assets acquired by us from Innovations on May 7~~Americas, ~~2002. Pursuant to an~~ ~~indemnification~~22nd ~~agreement~~Floor, ~~OptiMark~~New ~~US Equities~~York, ~~Inc.~~New ~~will~~York ~~indemnify Vie from any claims relating to the alleged fraudulent conveyance~~10036. ~~The~~Effective ~~parties~~October ~~have entered into a settlement agreement and mutual release~~1, ~~effective as of June 19,~~ 2003 ~~whereby OptiMark Technologies~~, ~~Inc.,~~we ~~OptiMark,~~moved ~~Inc.,~~our ~~OptiMark~~principal ~~Holdings,~~executive ~~Inc.~~offices ~~and~~to ~~OptiMark US Equities, Inc~~this location. ~~(the~~Prior ~~OptiMark Payees) have agreed~~ to ~~pay~~October ~~Finova $~~1,~~000,000~~ ~~over three installment payments. In accordance with the agreement~~2003, wethis ~~and~~location served our ~~parent, OptiMark~~New ~~Innovations~~York-based ~~Inc.~~staff, ~~are unconditionally released from any claims by Finova once the OptiMark Payees have paid Finova the first $200,000 installment,~~ which isincluded due within 30 days of the effective date of the settlement agreement. We are not required to make any cash contribution or otherwise to the settlement. Should the OptiMark Payees default in making the first installment paymentadministrative, wemarketing ~~would not be released from the Finova claims~~ and wetechnology ~~would seek indemnification from OptiMark US Equities, Inc~~employees. If we are found liable for damages and OptiMark US Equities, Inc. is unable to fulfill its obligations under the indemnification agreement, then such litigation could have a material adverse impact on our financial condition and results of operations.

9On December 23, 1999, we entered into a ten-year lease for approximately 11,000 square feet of office space at 1835 Market Street, Suite 420, Philadelphia, Pennsylvania 19103. This location served as our corporate headquarters prior to October 1, 2003. On June 3, 2004, we entered into an agreement to sublease this space for its entire remaining term.

~~Table~~We also previously leased approximately 1,675 square feet of ~~Contents~~office space at 1900 Market Street, Suite 701, Philadelphia, Pennsylvania 19103, pursuant to a sublease expiring in May 2005; however, we mutually agreed to terminate the sublease effective May 31, 2004. This was previously the principal location for our data center, which is now primarily located at a third-party “co-location” facility in Manhattan at 33 Whitehall Street, New York, New York 10004. We lease the Manhattan data center facility pursuant to a one-year lease agreement expiring in August 2004.

ITEM 43. ~~SUBMISSION~~LEGAL ~~OF MATTERS TO A VOTE OF SECURITY HOLDERS~~PROCEEDINGS

~~There~~In ~~were~~May no2003, ~~matters~~two ~~submitted~~former employees filed separate claims against us with the U.S. Department of Labor/ Occupational Safety & Health Administration (DOL). The claims both allege employment practice issues under the Sarbanes-Oxley Act of 2002. On June 12, 2003, we responded to both claims and denied all allegations. Under the Sarbanes-Oxley Act, claimants can file a ~~vote~~civil suit if the DOL has not issued a final decision within 180 days of ~~security~~the ~~holders~~filing ~~during~~of the ~~quarter~~complaint. ~~ended~~On ~~March~~January 3130, ~~2003~~2004, the former employees filed a complaint in the United States District Court for the Eastern District of Pennsylvania. Although we believe the allegations are without merit, the outcome of these proceedings is uncertain. We do not expect a material adverse impact on our financial condition and results of operations as a result of these claims.

~~PART~~On IIJune 7, 2000, our subsidiary, Ashton Canada, entered into a written agreement with the Toronto Stock Exchange Inc. for the integration of Ashton Canada’s eVWAP trade match software, equipment and communications facilities with the Toronto Stock Exchange’s continuous auction market for securities. After Ashton Canada had designed and implemented the eVWAP software and assisted the Toronto Stock Exchange in securing all necessary approvals of the Ontario Securities Commission, the Toronto Stock Exchange, without proper justification or excuse, suspended the integration of eVWAP. Thereafter, following failure by the parties to resolve this matter, on June 11, 2003, Ashton Canada filed an arbitration claim against the Toronto Stock Exchange seeking damages of US $30 million for breach of contract, interest in the amount for a period as may be determined by the arbitrator, and costs of the arbitration. The arbitration was filed under the Ontario Arbitrations Act. On August 22, 2003, the Toronto Stock Exchange filed a counterclaim against Ashton Canada seeking specific performance of the integration agreement, or in the alternative, a declaration that it is entitled to terminate the agreement without penalty. The arbitration case began in May 2004, and closing arguments were submitted to the arbitrator in June 2004. The outcome of these claims is uncertain at this time.

~~ITEM~~On 5May 20, 2002, Finova added us as a defendant in the case Finova Capital Corporation v. ~~MARKET~~OptiMark ~~FOR~~Technologies, ~~COMMON~~Inc., ~~EQUITY~~OptiMark, ~~AND~~Inc ~~RELATED~~and ~~STOCKHOLDER~~OptiMark ~~MATTERS~~Holdings, Inc., Docket No.: HUD-L-3884-01, Superior Court of New Jersey-Hudson County. Finova asserted claims arising out of an equipment lease agreement pursuant to which Finova alleged that OptiMark Technologies, Inc (now known as OptiMark US Equities, Inc.) agreed to lease certain equipment from Finova. Finova made claims in unspecified amounts exceeding $6 million (plus interest, late charges, litigation costs and expenses) for, among other things, fraudulent conveyance of certain assets comprised, at least in part, of the intellectual property and non-cash assets acquired by us from Innovations on May 7, 2002. Pursuant to an indemnification agreement, OptiMark US Equities, Inc. will indemnify Vie from any claims relating to the alleged fraudulent conveyance. The parties entered into a settlement agreement and mutual release, effective as of June 19, 2003, whereby OptiMark Technologies, Inc., OptiMark, Inc., OptiMark Holdings, Inc. and OptiMark

~~The~~10 initial public offering of our stock was in May 1996, for 2,472,500 shares at an offering price of $4.50 per share. 2,472,500 redeemable common stock purchase warrants were also offered at a price of $0.25 per warrant. The warrants expired on May 2, 2002 in accordance with their original terms. Our common stock trades on the OTC Bulletin Board under the symbol “VIEF”. The following sets forth, by calendar quarter, the range of high and low closing prices per share for the common stock as reported on the OTC Bulletin Board:

	High		Low
2003
First Quarter	$	0.09	$	0.03
2002
Fourth Quarter	$	0.08	$	0.02
Third Quarter	$	0.14	$	0.04
Second Quarter	$	0.24	$	0.10
First Quarter	$	0.40	$	0.14
2001
Fourth Quarter	$	0.32	$	0.09
Third Quarter	$	0.96	$	0.31
Second Quarter	$	1.38	$	0.84
First Quarter	$	2.62	$	0.94

US Equities, Inc. (the OptiMark Payees) agreed to pay Finova $1,000,000 over three installment payments. In accordance with the agreement, we and our parent, OptiMark Innovations Inc., are not required to make any cash contribution or otherwise to the settlement and are unconditionally released from any claims by Finova once the OptiMark Payees have paid Finova the first $200,000 installment. Thereafter, Finova’s sole remedy under the agreement would be to enter judgment only against the OptiMark Payees by way of a Consent Judgment. The first installment was paid on July 28, 2003, thus, we and OptiMark Innovations are relieved of any future liability related to this matter. Additionally, related to the first installment having been paid, a Stipulation of Dismissal with Prejudice executed by the parties was filed with and accepted by the Court on August 1, 2003.

OnITEM ~~June 25, 2003, the closing price of the common stock was $0~~4.~~06.~~ AsSUBMISSION ofOF ~~March~~MATTERS ~~31,~~TO ~~2003,~~A ~~there~~VOTE ~~were~~OF ~~approximately~~SECURITY ~~409 holders of record of common stock.~~ HOLDERS

~~Since~~At ~~our~~a ~~inception~~special inmeeting ~~1994, we issued seven classes~~ of ~~convertible~~stockholders ~~preferred~~held ~~stock~~on inApril ~~private~~8, ~~placements~~2004, ~~exempt~~our ~~from~~stockholders ~~registration~~approved ~~under~~a ~~Section~~proposal ~~4(2)~~to ~~of the~~amend ~~Securities~~our ~~Act~~certificate of ~~1933~~incorporation ~~and~~to ~~Regulation~~effectuate Da 1-for-100 ~~thereunder~~reverse ~~(See~~common ~~Notes~~stock ~~9 and 17 to the Consolidated Financial Statements)~~split.

WeUnder ~~have~~Delaware ~~never~~law, adoption ~~declared~~of orthe ~~paid~~reverse ~~any~~stock ~~dividends~~split onamendment ~~our~~required the affirmative vote of the holders of a majority of the “Voting Stock”, which, for purposes of the special meeting, is defined as the aggregate number of votes that holders of our common stock, our Series G convertible preferred stock and ~~the~~our ~~board~~Series ofH ~~directors~~convertible ~~has~~preferred nostock ~~current~~were ~~plans~~entitled to ~~declare~~cast orat ~~pay~~the ~~any~~special ~~dividends~~meeting. onUnder the certificates of designations for our Series G convertible preferred stock and our Series H convertible preferred stock, holders of our Series G convertible preferred stock and our Series H convertible preferred stock voted together as a single class with holders of our common stock inon ~~the~~an ~~foreseeable~~as-converted ~~future~~basis.

10Upon the recommendation of the Company’s special committee of independent directors, adoption of the reverse stock split amendment was conditioned upon the requirement that the holders of a majority of the Minority Shares do not vote against such amendment (the “reverse majority-of-the-minority” condition). “Minority Shares” means outstanding shares of our common stock owned other than by OptiMark Innovations Inc., holders of outstanding shares of our Series G convertible preferred stock (and the common stock into which such shares are convertible) and holders of outstanding shares of our Series H convertible preferred stock (and the common stock into which such shares are convertible). This reverse majority-of-the-minority voting condition was implemented upon the recommendation of the special committee to permit the holders of a majority of the Minority Shares to determine whether the reverse stock split would occur by enabling them to affirmatively vote against such transaction.

~~Table~~There were a total of ~~Contents~~23,393,504 shares of Voting Stock entitled to vote at the special meeting, which consisted of 22,550,831 Majority Shares (defined as all shares of Voting Stock other than the Minority Shares) and 842,673 Minority Shares. The Reverse Stock Split had to be approved by at least 11,696,752 shares of the Voting Stock. In addition, under the reverse majority-of-the-minority condition, adoption the Reverse Stock Split required that at least 421,337 Minority Shares not vote against the Reverse Stock Split. The number of votes cast for, against or withheld, as well as the number of abstentions was as follows:

ITEM 6. SELECTED FINANCIAL DATA


	For	Against	Abstain
Majority Shares	21,611,306	—	—
Minority Shares	501,089	16,867	516

~~The~~11 following selected consolidated financial data are derived from our consolidated financial statements. Goldstein Golub Kessler LLP, our independent auditors, have audited the financial statements. You should read this data in conjunction with the consolidated financial statements and related notes, contained in Item 8, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in Item 7.

	(In thousands, except per share amounts)
	Year Ended March 31,
	2003			2002			2001			2000			1999
Statement of Operations Data:
Total revenues	$	4,297		$	2,489		$	225		$	3,869		$	1,434
Total expenses		14,631			13,611			14,881			19,062			16,032
Loss from continuing operations		(12,076	)		(12,421	)		(15,196	)		(6,232	)		(14,276	)
Income (loss) from discontinued operations		(1	)		(1	)		(2,596	)		—			—
Gain (loss) on disposal of discontinued operations		—			667			(3,146	)		—			—
Net loss		(12,077	)		(11,755	)		(20,938	)		(6,232	)		(14,276	)
Net loss per common share	$	(0.02	)	$	(0.29	)	$	(0.79	)	$	(0.32	)	$	(1.80	)
Weighted average shares outstanding		627,566			45,988			29,395			24,930			10,954
Balance Sheet Data:
Cash and cash equivalents	$	2,251		$	172		$	5,529		$	15,365		$	2,667
Securities available for sale		—			—			1,483			9,906			—
Investments in affiliates		—			225			141			1,091			—
Total assets		4,600			2,787			13,066			31,024			5,654
Long-term obligations		6,954			4,711			4,364			8,000			—
Total stockholders’ (deficiency) equity	$	(4,040	)	$	(4,284	)	$	2,898		$	17,163		$	4,445

PART II

11ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

~~Table~~We completed a 1-for-100 reverse split of ~~Contents~~our common stock on April 20, 2004. All common share and per share numbers in this document have been restated to reflect the reverse split.

~~ITEM~~The 7initial public offering of our stock was in May 1996, for 24,725 shares at an offering price of $450 per share. ~~MANAGEMENT’S~~Our ~~DISCUSSION~~common ~~AND~~stock ~~ANALYSIS~~trades OFon ~~FINANCIAL~~the ~~CONDITION~~OTC ~~AND~~Bulletin ~~RESULTS~~Board OFunder ~~OPERATIONS~~the symbol “VIFI”, effective as of April 20, 2004, the date of the reverse split. The following sets forth, by calendar quarter, the range of high and low closing prices per share for the common stock as reported on the OTC Bulletin Board:

You should read the following discussion of our results of operations and liquidity and capital resources in conjunction with the consolidated financial statements and related notes for the years ended March 31, 2003, 2002, and 2001, contained in Item 8 of this Form 10-K.


	High		Low
2004
First Quarter	$	4.00	$	1.40

2003
Fourth Quarter	$	4.50	$	1.10
Third Quarter	$	7.00	$	2.50
Second Quarter	$	18.00	$	5.00
First Quarter	$	9.00	$	3.00

2002
Fourth Quarter	$	8.00	$	2.00
Third Quarter	$	14.00	$	4.00
Second Quarter	$	24.00	$	10.00
First Quarter	$	40.00	$	14.00

~~Overview~~On June 25, 2004, the closing price of the common stock was $0.32. As of March 31, 2004, our common stock was held by 496 stockholders of record.

~~Vie~~Since ~~Financial~~our ~~Group,~~inception ~~Inc. was formed as a Delaware corporation~~ in 1994., Wewe ~~provide~~issued ~~electronic~~eight ~~trading~~classes ~~services~~of toconvertible ~~institutional~~preferred ~~investors~~stock ~~and broker-dealers.~~in Weprivate ~~strive~~placements toexempt ~~remove~~from ~~the~~registration ~~human~~under ~~element~~Section ~~from~~4(2) of the ~~trading~~Securities ~~and~~Act ~~order~~of ~~execution~~1933 ~~process~~and inRegulation ~~order~~D tothereunder ~~eliminate~~(See ~~information~~Notes ~~leakage.~~8 ~~Our objective is to provide our clients with high-performance electronic trading that is fast, efficient~~ and ~~nearly~~9 ~~invisible~~ to the ~~market~~Consolidated Financial Statements).

We ~~conduct~~have never declared or paid any dividends on our ~~business through~~common ~~the~~stock, ~~following~~and ~~operating~~we ~~affiliates:~~do not anticipate paying any dividends on our common stock at this time.

•There ~~Vie~~were ~~Securities~~no ~~LLC~~repurchases of registered equity securities during the last quarter of the fiscal year ended March 31, 2004.

•12 ~~Universal Trading Technologies Corporation (UTTC), and its subsidiaries:~~

•ITEM ~~Vie~~6. ~~Institutional~~SELECTED ~~Services,~~FINANCIAL ~~Inc.~~DATA

•The ~~REB~~following ~~Securities~~selected consolidated financial data are derived from our consolidated financial statements. Goldstein Golub Kessler LLP, ~~Inc~~our independent auditors, have audited the financial statements. Net loss per share information has been retroactively restated to reflect our 1-for-100 reverse stock split on April 20, 2004. You should read this data in conjunction with the consolidated financial statements and related notes, contained in Item 8, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in Item 7.

During the year ended March 31, 2003, we made substantive changes to our business model and operation of our subsidiaries, including deploying the majority of our resources to Vie Institutional Services, Inc. and Vie Securities LLC in order to 1) expand the trading products we offer to our customers, 2) expand the universe of securities in which we provide liquidity, 3) develop and implement a proprietary trading algorithm which allows us to provide guaranteed liquidity to our customers at the VWAP, and 4) lower our total cost of executing, clearing and settling trades. We launched four new trading products and implemented our trading algorithm and related proprietary technology, allowing us to optimize the allocation of orders to our liquidity sources and execute trades electronically.


	*(In thousands, except per share amounts)*
	Fiscal Year Ended March 31,
	2004			2003			2002			2001			2000
Statement of Operations Data:
Total revenues	$	8,920		$	4,297		$	2,489		$	225		$	3,869
Total expenses		17,152			14,631			13,611			14,881			19,062
Loss from continuing operations		(10,117	)		(12,076	)		(12,421	)		(15,196	)		(6,232	)
Income (loss) from discontinued operations		(2	)		(1	)		(1	)		(2,596	)		—
Gain (loss) on disposal of discontinued operations		—			—			667			(3,146	)		—
Net loss		(10,119	)		(12,077	)		(11,755	)		(20,938	)		(6,232	)
Net loss per common share	$	(2.16	)	$	(1.93	)	$	(28.76	)	$	(78.94	)	$	(31.88	)
Weighted average shares outstanding		6,953			6,276			460			294			249

Balance Sheet Data:
Cash and cash equivalents	$	2,249		$	2,251		$	172		$	5,529		$	15,365
Securities available for sale		—			—			—			1,483			9,906
Receivables - brokers, dealers and other		787			736			—			—			—
Investments in affiliates		—			—			225			141			1,091
Total assets		3,688			4,600			2,787			13,066			31,024
Long-term obligations		6,547			6,954			4,711			4,364			8,000
Total stockholders’ (deficiency) equity	$	(4,647	)	$	(4,040	)	$	(4,284	)	$	2,898		$	17,163

~~Despite~~13 these recent developments, we have also recognized recurring operating losses since our inception and have financed our operations primarily through the issuance of equity securities. As of March 31, 2003, we had an accumulated deficit of $96,513,500 and stockholders’ deficiency of $4,039,795, which raises doubt as to our ability to continue as a going concern. We have developed a plan that we believe will enable us to continue operating until we are able to generate sufficient revenues to fund our operations. Our primary initiatives include reducing the cost of providing liquidity to our customers, reducing our current operating expenses and streamlining our corporate structure. There is no assurance however that the plan will be successful.

~~Critical~~ITEM ~~Accounting~~7. ~~Policies~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Revenue~~You ~~Recognition~~should read the following discussion of our results of operations and liquidity and capital resources in conjunction with the consolidated financial statements and related notes for the fiscal years ended March 31, 2004, 2003, and 2002, contained in Item 8 of this Form 10-K.

~~Revenues~~Overview earned during the year ended March 31, 2003 consist of commissions earned on a per share basis from our customers’ use of our trading services. During the years ended March 31, 2002 and March 31, 2001, we generated revenues on a per transaction basis for each share traded through the eVWAP trading system and commission revenue from our customers’ orders executed through Vie Institutional Services. Our last trade through the eVWAP system was in March 2002, and on November 29, 2002, we mutually agreed with the Philadelphia Stock Exchange not to seek an extension of the eVWAP pilot facility. Our current line of products is offered directly through our subsidiaries Vie Institutional Services and Vie Securities. Transactions in securities, including commission revenues and related expenses, are recorded on a trade-date basis.

~~Stock~~Vie Financial Group, Inc. and its subsidiaries provide electronic trading services to institutional investors and broker-~~Based~~dealers. ~~Compensation~~Our sophisticated proprietary trading algorithms and licensed trading technology enable us to deliver superior trade execution quality while considerably reducing information leakage. Our objective is to provide our clients with high-performance trading that is fast, efficient and nearly invisible to the market. Our current product offering consists of various trade execution services which we provide through our broker-dealer subsidiary Vie Securities, LLC.

WeDuring ~~have~~the ~~elected~~fiscal toyear ~~apply~~ended ~~APB~~March ~~Opinion~~31, ~~No.~~2004, 25our business faced a challenging economic environment as a result of continued pricing pressure and ~~related~~lower ~~interpretations~~levels of portfolio turnover in the U.S. equity markets. In addition to difficult market conditions, 2003 brought an increase in competition from electronic trade execution ~~accounting~~providers ~~for~~and ~~stock~~from ~~options~~traditional ~~issued~~broker-dealers. In a year where market volatility reached historic lows, large broker-dealers aggressively used capital to ~~employees~~compete for the portfolio trades that are a core component of our revenues. IfIn this environment however, we ~~had~~have ~~elected~~managed to ~~recognize~~increase ~~compensation~~revenues ~~cost~~by ~~based~~108% onas a result of new customer acquisitions and additional product offerings. We have made substantial progress in growing revenues by expanding the ~~fair~~trading ~~value~~products ofwe offer to our customers and expanding the ~~options~~universe of securities in which we provide liquidity. We launched four new trading products and implemented several new licensed and proprietary trading algorithms.

12In May 2003, we began implementing a plan to streamline our corporate structure, reduce our operating expenses and reduce the cost of providing liquidity to our customers. We consolidated our broker-dealer operations into one entity effective September 15, 2003. Effective as of October 1, 2003, we consolidated our Philadelphia and New York offices by relocating our corporate headquarters and all operations to offices in the Grace Building, 1114 Avenue of the Americas, in New York, New York. Additionally, in September 2003, we instituted salary reductions for executives and a majority of non-executive employees. We also reduced our headcount by 44% to 23 employees during the fiscal year ended March 31, 2004. We have secured additional liquidity sources and made improvements to our trading algorithms, resulting in lower costs, more competitive pricing in our product offering, and increased trading volumes from both existing and new customers during the current fiscal year.

~~Table~~Despite these recent developments, we have recognized recurring operating losses since our inception and have financed our operations primarily through the issuance of ~~Contents~~debt and equity securities. As of March 31, 2004, we had an accumulated deficit of $111,531,101 and stockholders’ deficiency of $4,647,497, which raises doubt as to our ability to continue as a going concern. We are actively exploring alternative sources of capital, including additional financing arrangements and strategic relationships with other firms. If we are unable to accomplish either of these objectives or generate sufficient cash flows from operations to fund our business within the next three months, we will be unable to continue operating as an independent entity. There is no assurance that we will be successful in accomplishing these objectives, nor can we predict the terms or the impact on existing holders of our common stock of any potential financing or strategic transaction.

~~granted~~Critical toAccounting ~~directors~~Policies ~~and employees at the grant date as prescribed by SFAS No. 123, our net loss for the year ended March 31, 2003 would have been increased by $1,470,641.~~

~~Results~~Revenue ~~of Operations for the Year Ended March 31, 2003~~Recognition ~~Compared to the Year Ended March 31, 2002~~

WeRevenues ~~incurred~~earned ~~a net~~during ~~loss~~the ~~from~~fiscal ~~continuing~~years ~~operations~~ended ~~totaling~~March ~~$12.1 million~~31, 2004 orand ~~$0.02~~2003 consist of commissions earned on a per share, ~~for~~basis from our customers’ use of our trade execution services. During the fiscal year ended March 31, ~~2003~~2002, ~~compared~~we togenerated ~~$12.4~~revenues ~~million,~~on ora ~~$0.30~~ per ~~share,~~transaction basis for each share traded through the ~~year~~eVWAP ~~ended~~trading ~~March~~system ~~31,~~and ~~2002.~~commission ~~The~~revenue ~~decrease~~from inour ~~net~~customers’ ~~loss~~orders isexecuted athrough ~~result~~our ofbroker-dealer asubsidiaries. ~~$787,115 decrease~~Our inlast trade through the ~~loss~~eVWAP ~~from~~system ~~operations,~~was ~~partially~~in ~~offset~~March by2002, anand ~~aggregate~~on ~~increase~~November in29, ~~non-operating~~2002, ~~expenses~~we ofmutually ~~$442,246.~~agreed with the

~~Revenues~~14 totaled $4,296,618 for the year ended March 31, 2003, and $2,489,470 for the year ended March 31, 2002. The increase in revenues is primarily a result of the increase in the aggregate number of shares executed on behalf of customers during the year ended March 31, 2003. 100% of the revenues in the current year were from securities commissions on trades executed through Vie Institutional Services and Vie Securities, while the revenues in the prior year also included fees from the operation of the eVWAP system.

~~Salaries~~ Philadelphia ~~and~~Stock ~~employee~~Exchange ~~benefits~~not ~~increased 9%~~ to ~~$5,584,839~~seek ~~for~~an ~~the~~extension ~~year ended March 31, 2003 from $5,139,312 for the year ended March 31, 2002, primarily due to the furlough program that was in place during the fourth quarter~~ of the ~~year~~eVWAP ~~ended~~pilot ~~March~~facility. ~~31,~~Our ~~2002,~~current ~~and~~line ~~recognition~~ of ~~$113,053~~products inis ~~sales~~offered ~~commissions~~directly ~~during~~through ~~the~~our ~~three~~broker-dealer subsidiary ~~months~~Vie ~~ended March 31, 2003~~Securities. ~~During~~Transactions ~~the~~in ~~years ended March 31~~securities, ~~2003~~including ~~and~~commission ~~2002, we~~revenues ~~employed an average of 41~~ and 44related ~~employees~~expenses, ~~respectively.~~are Asrecorded ofon ~~March 31, 2003, we had~~ a ~~total~~trade-date ~~of 40 employees~~basis.

~~Professional~~Stock-Based ~~fees~~Compensation decreased 14% to $1,321,676 from $1,529,175 during the years ended March 31, 2003 and 2002, respectively. The decrease was primarily a result of a decrease in outsourced labor and temporary personnel working on the development of our trading systems and the elimination of monthly fees paid to our board of directors as of September 2001, partially offset by an increase in legal expenses and recruiting fees. Consulting and temporary personnel decreased to $449,535 for the year ended March 31, 2003 from $901,485 during the year ended March 31, 2002. Legal fees increased 153% to $548,220 during the year ended March 31, 2003 from $216,535 during the year ended March 31, 2002. Recruiting fees of $153,945 in the year ended March 31, 2003 related to the hiring of our Chief Executive Officer were not incurred in the same period last year. Finally, board fees amounting to $129,500 during the year ended March 31, 2002 were eliminated during the year ended March 31, 2003.

~~Brokerage,~~We ~~clearing~~have ~~and~~elected ~~exchange~~to ~~fees~~apply ~~decreased~~APB ~~31%~~Opinion toNo. ~~$1,856,340~~25 and related interpretations in accounting for ~~the~~stock ~~year~~options ~~ended~~issued ~~March~~to ~~31,~~employees. ~~2003~~We ~~from~~recorded a non-cash compensation charge of $2621,~~701,243~~224 ~~for~~during the fiscal year ended March 31, ~~2002. This~~2004 ~~decrease~~for isoptions athat ~~result~~were ofgranted ato ~~decrease~~directors inand ~~certain~~an ~~clearing~~outside ~~and~~advisor ~~execution~~at ~~costs~~strike ~~per~~prices ~~share,~~below ~~and~~the ~~fewer~~market ~~fees~~price ~~paid~~of toour ~~third~~common ~~party~~stock ~~liquidity~~on ~~providers~~the asdate aof ~~result~~grant. ofIf ~~increased~~we ~~use~~had ofelected ~~our~~to recognize ~~proprietary~~compensation ~~trading~~cost ~~algorithm~~based ~~during~~on the ~~year.~~fair Wevalue ~~expect~~of toall ~~send~~options ~~a substantial~~granted ~~portion~~to ofdirectors ~~our~~and ~~order~~employees ~~flow~~at tothe ~~liquidity~~grant ~~providers~~date ~~during~~as ~~the~~prescribed ~~next~~by ~~fiscal~~SFAS ~~year~~No. 123, ~~which~~our ~~may~~net ~~increase~~loss ~~these~~for ~~fees~~the fiscal year ended March 31, ~~while~~2004 wewould ~~continue~~have tobeen ~~improve~~increased ~~our~~by ~~algorithm~~$3,050,848.

~~Depreciation~~Results ~~and amortization expense consists primarily~~ of ~~depreciation~~Operations ~~of property and equipment. Depreciation~~ for the ~~year~~ ~~ended~~Year Ended March 31, ~~2003~~2004 ~~decreased~~Compared 3% to ~~$886,745 from $914,728 in~~ the ~~year ended March 31, 2002. The decrease was caused by a significant number of our assets becoming fully depreciated during the current year. Capital expenditures increased to~~ ~~$182,654~~Year ~~for~~Ended ~~the year ended~~ March 31, 2003 ~~compared to $111,078 last year, primarily as a result of computer equipment purchased from OptiMark, Inc. to support our proprietary trading algorithm.~~

We ~~recorded~~incurred a ~~non-cash~~net ~~compensation~~loss ~~charge~~from continuing ofoperations totaling $~~720,000~~10.1 inmillion for the fiscal year ended March 31, ~~2003~~2004, compared to $12.1 million for the ~~cost~~fiscal ofyear ~~shares~~ended ~~issued~~March to31, ~~Fredric W~~2003. ~~Ritterieser,~~The ~~our~~decrease ~~former~~in ~~Chief~~net ~~Executive~~loss ~~Officer,~~from incontinuing ~~connection~~operations ~~with~~before ~~his~~preferred ~~separation~~stock ~~agreement~~dividends onis ~~April~~a result 15of a $2,102,037 ~~2002.~~decrease Noin ~~such~~the ~~charges~~loss ~~were~~from ~~incurred~~operations, inpartially ~~the~~offset ~~year~~by ~~ended~~an ~~March~~aggregate ~~31,~~increase ~~2002~~in non-operating expenses of $142,550.

WeRevenues ~~recorded~~for ~~losses~~the onfiscal ~~proprietary~~year ~~trading~~ended ~~activities~~March ~~of $1~~31,~~294,917~~ ~~and $375,480~~2004 ~~during~~increased 107.6% over the ~~years~~fiscal year ended March 31, 2003 ~~and 2002~~, ~~respectively.~~primarily Weas ~~used~~a ~~our~~result ~~trading~~of ~~account~~an increase in the aggregate number of shares executed on behalf of customers during the fiscal year ended March 31, ~~2002~~2004, toand ~~provide~~despite ~~limited~~a ~~liquidity~~decrease toin ~~our~~the ~~customers~~average ~~and~~commission torate ~~provide~~per ~~our~~share. ~~management~~The ~~with~~increase ~~expertise~~ in ~~VWAP~~the ~~trading techniques.~~number Weof ~~did~~shares ~~not~~traded ~~engage~~is inmainly ~~principal~~a ~~trading~~result ~~from~~of ~~January~~new customer ~~2002~~acquisitions ~~through~~and ~~July~~additional ~~2002,~~product ~~when~~offerings weduring ~~began~~the ~~testing~~current ~~our~~fiscal ~~proprietary~~year. ~~VWAP~~Our ~~algorithm.~~top ~~Vie~~three ~~Securities~~customers ~~began~~generated ~~offering~~approximately ~~liquidity~~21%, to9% ~~its~~and ~~customers~~8%, onrespectively, aof ~~full-scale~~the ~~basis~~revenues induring ~~October~~the ~~2002~~fiscal year ended March 31, 2004. ~~$134~~Approximately 33%,~~260~~ 22% and 10%, respectively, of the ~~loss~~revenues during the fiscal year ended March 31, 2003 ~~was~~were ~~related~~from ~~solely~~transactions towith ~~the~~our ~~testing~~three largest customers, only two of which are included in the ~~algorithm,~~top ~~and~~three customers in the current fiscal year.

13Salaries and employee benefits decreased 25.9% to $4,136,741 for the fiscal year ended March 31, 2004 from $5,584,839 for fiscal year ended March 31, 2003. The decrease is primarily due to salary reductions and a decrease in the number of employees. During the fiscal years ended March 31, 2004 and 2003, we employed an average of 29 and 41 employees, respectively, including those participating in the furlough programs. This decrease in the number of employees was part of our plan to reduce operating expenses, and was a result of our view that employee head count and related costs were too high in relation to the level of revenues that were being generated. It should be expected that we will add employees in the near term as necessary in response to the growth of our business, in terms of customer acquisitions and revenues. We also paid approximately $184,000 in sales commissions during the fiscal year ended March 31, 2004, compared to approximately $113,000 during the fiscal year ended March 31, 2003. The substantial decrease in sales commissions as a percentage of revenues is due to a change from guaranteed commission payments in the prior fiscal year to a sales commission structure based on gross profits for each account during the fiscal year ended March 31, 2004.

~~Table~~Professional fees decreased 17.2% to $1,094,701 during the fiscal year ended March 31, 2004 from $1,321,676 during the fiscal year ended March 31, 2003. The decrease was primarily a result of ~~Contents~~a decrease in outsourced labor and temporary personnel costs of approximately $276,000, and a decrease in recruiting expenses of approximately $150,000. Outsourced labor and temporary personnel costs for work on the development of our trading systems, and recruiting fees related to the hiring of our CEO were not incurred this fiscal year. Legal fees for the fiscal year ended March 31, 2004 increased 34.3% to $736,806 from $548,220 during the fiscal year ended March 31, 2003, mainly due to the Ashton Canada arbitration case, employment matters, the retention of special counsel to our independent board members, each of whom resigned from our board in February 2004, and costs related to the special proxy statement in connection with the reverse stock split.

~~remainder~~Brokerage, ofclearing ~~the~~and ~~loss~~exchange ~~related~~fees increased to ~~our~~$4,829,908 ~~providing~~for ~~liquidity~~the tofiscal ~~customers~~year atended ~~the~~March ~~VWAP.~~31, ~~The~~2004 ~~higher~~from ~~loss~~$1,856,340 infor the fiscal year ended March 31, 2003. ~~compared~~This toincrease ~~March~~in ~~31, 2002~~transaction iscosts areflects ~~result~~the ofincrease ~~increased~~in ~~use~~shares ofexecuted ~~the~~on ~~algorithm~~behalf asof anour ~~alternative~~customers toduring ~~sending~~the ~~orders~~fiscal toyear ~~third~~ended ~~party~~March ~~liquidity~~31, ~~providers.~~2004 Inas ancompared ~~effort~~ to ~~reduce~~the ~~our~~fiscal ~~cost~~year ofended ~~providing~~March ~~liquidity~~31, ~~including~~2003. ~~these~~A ~~trading~~significant ~~losses,~~component weof ~~expect to send a substantial~~brokerage, ~~portion~~clearing ofand ~~our~~exchange ~~order~~fees ~~flow~~are ~~to liquidity providers during~~ the ~~next~~fees ~~fiscal year while~~ we ~~continue~~pay ~~to improve our algorithm.~~

~~Selling,~~15 general and administrative expenses increased less than 1% to $2,966,768 from $2,951,314 during the years ended March 31, 2003 and 2002, respectively. The increase is primarily a result of higher insurance premiums, partially offset by lower occupancy, communications, and travel and entertainment expenses. Occupancy expenses decreased $166,910 or 20% due primarily to the renegotiation of our lease at 1900 Market Street in Philadelphia. Our communications expenses decreased approximately $146,000 or 23% due to the cancellation or renegotiation of various contracts. Travel and entertainment expenses decreased by $101,368 or 36% due to less traveling and a focus on decreasing such costs during the period. Insurance premiums increased $539,501 or 128% as a result of increased directors’ and officers’ coverage, higher premiums, and an additional one-year directors’ and officers’ run-off policy covering the directors who resigned from the board of directors pursuant to the agreement with Innovations on May 7, 2003.

~~Interest~~ to ~~income~~third ~~decreased~~parties to ~~$53,241~~provide inliquidity for our customers’ orders. These costs are driven by the ~~year~~number ~~ended~~of ~~March~~orders ~~31,~~executed ~~2003~~by ~~from~~our ~~$105,514~~liquidity inpartners versus traded through our proprietary algorithms. We relied heavily on these liquidity partners during a substantial portion of the fiscal year, ~~ended~~and ~~March~~are ~~31,~~now ~~2002,~~using a combination of these liquidity partners and our trading algorithms to provide liquidity for our customer’s orders. We expect these costs to decline as a ~~result~~ percentage of ~~lower~~revenues ~~interest~~over ~~rates~~the ~~and~~next ~~lower~~fiscal ~~average~~year ~~cash~~as ~~and~~we ~~cash~~increase ~~equivalents~~the ~~balances~~use of our proprietary trading algorithms.

~~Interest~~Depreciation ~~expense of $1,558,480~~ for ~~the~~fiscal year ended March 31, ~~2003~~2004 ~~was~~decreased ~~comprised~~59.9% ~~primarily~~to of$355,354 from $~~673~~886,~~064~~745 ~~related~~for to the ~~secured~~fiscal ~~convertible~~year ~~note~~ended ~~that~~March ~~we executed with Innovations on May 7~~31, ~~2002~~2003, ~~$626,971~~primarily ~~related~~as toa ~~the secured~~result ~~notes~~of ~~with~~the ~~RGC,~~write-off ~~$73,629~~of ~~related~~assets toin ~~the~~connection ~~subordinated convertible notes~~ with ~~the~~our ~~SOFTBANK~~restructuring ~~and~~as ~~DFJ~~well ~~ePlanet~~as ~~entities,~~a ~~and~~portion ~~$177,419~~of onour ~~the~~assets ~~short-term~~becoming ~~note~~fully ~~with~~depreciated HKduring ~~Weaver (see Note 7 to~~ the ~~Consolidated~~current ~~Financial~~fiscal ~~Statements)~~year. ~~Interest~~Capital expenditures ~~expense~~were of $~~626~~76,~~790~~420 ~~for~~and ~~the year ended March 31, 2002 was comprised of~~ $~~304~~182,~~209~~654 ~~related to the secured convertible note that we executed with RGC in exchange~~ for the ~~outstanding~~fiscal ~~shares~~years ofended ~~series~~March ~~F convertible preferred stock in July 2001~~31, 2004 and ~~$322~~2003,~~581~~ ~~on the short-term note with HK Weaver~~respectively.

~~Other~~We ~~expense~~recorded ~~for~~a ~~the~~non-cash ~~year ended~~compensation ~~March 31, 2002 includes a~~ charge of $~~316~~621,~~000~~224 ~~related~~during to the ~~final~~fiscal ~~settlement~~year ofended ~~the~~March ~~arbitration~~31, ~~award~~2004 infor ~~favor~~the cost of ~~Matthew~~245,642 ~~Saltzman.~~stock ~~The~~options ~~award~~that ~~was~~were granted to bymembers of the ~~American~~board ~~Arbitration~~of ~~Association~~directors onand ~~January~~an ~~14,~~outside ~~2002~~advisor ~~related~~ to the ~~arbitration proceedings~~company ~~between~~on ~~Vie~~February ~~and~~3, ~~eMC’s former president regarding his employment contract~~2004. The ~~expense~~options ~~includes~~were ~~$200,000~~granted inwith ~~cash~~strike ~~payments~~prices ~~and~~below athe ~~charge~~market ofvalue ~~$116,000 for 400,000 shares~~ of ~~Vie~~our common stock weon ~~agreed~~the todate ~~issue~~of ~~pursuant to the settlement agreement~~grant. ~~Other~~During ~~expense for~~ the fiscal year ended March 31, ~~2002 also includes a loss of $36~~2003,~~215~~ we onrecorded ~~the note receivable from CSI,~~ a ~~$91,900~~charge ~~loss on the sale~~ of ~~one of our memberships on the Philadelphia Stock Exchange, and a~~ $~~500~~720,000 ~~loss on the exchange of our investment in JAGfn~~ for the ~~outstanding~~cost ~~shares~~ of ~~UTTC~~shares ~~series~~issued TKto ~~convertible~~Frederic ~~preferred~~W. ~~stock~~Ritterieser, ~~200,000~~our ~~series~~former TChief ~~warrants,~~Executive ~~309~~Officer,~~500~~ ofin ~~the~~connection ~~500,000~~with ~~outstanding~~his ~~series~~separation Kagreement ~~warrants,~~on ~~and~~April ~~an additional 39~~15,~~000~~ ~~shares of the class B common stock of Ashton Canada~~2002.

~~Equity~~We inrecorded ~~income~~a (loss) on principal trading activities of ~~affiliates~~$2,141,137 ~~for~~and $1,294,917 during the ~~year~~fiscal years ended March 31, ~~2003~~2004 and ~~2002~~2003, ~~totaled~~respectively. ~~($234~~The increase in the trading loss during the fiscal year ended March 31,~~805)~~ ~~and~~2004 ~~$172~~reflects the use of our trading algorithms to provide liquidity to our customers,~~373,~~ ~~respectively~~primarily at the guaranteed VWAP. ~~The~~We ~~amount~~provided inliquidity ~~2002~~at ~~represents~~the VWAP to our customers during the ~~write~~fiscal ~~off~~year by using a combination of liquidity partners and our ~~investment~~proprietary trading algorithms. The variable cost of providing this liquidity is reflected in ~~Kingsway-ATG~~the loss ~~Asia~~on trading activities and in the fees we pay to the liquidity partners, ~~Ltd.~~which ~~(KAA)~~is a component of ~~$189~~brokerage,~~653~~ clearing and ~~the~~exchange ~~write-down~~fees on our statements of operations. We realize trading gains or losses from the difference between the prices we achieve when trading through our ~~investment~~algorithms and the prices we guarantee our customers. A combination of factors, including market fluctuations, trading errors and technical and operational issues, resulted in ~~Gomez~~higher than expected trading losses, especially ~~Inc~~during the first three months of the fiscal year ended March 31, 2004. In an effort to reduce our cost of ~~$45~~ providing liquidity,~~152~~ including these trading losses, ~~both~~we began sending a substantial portion of our order flow to external liquidity sources in ~~accordance~~June ~~with~~2003. We expect to continue to utilize a mix of liquidity partners and proprietary or licensed trading algorithms over the ~~equity~~next ~~method~~fiscal year for our guaranteed VWAP products. This mix allows us to have a greater degree of ~~accounting~~control over risk and, consequently, have more consistent profit margins than experienced in the past. ~~For~~The loss on principal trading activities during the fiscal year ended March 31, ~~2002,~~2003 ~~this~~was ~~amount~~lower ~~includes~~also ~~our~~as ~~share~~a result of providing such liquidity to our customers and testing our proprietary trading algorithms only for the ~~income~~period from ~~our~~July ~~joint~~2002 ~~venture~~through ~~KAA~~March 2003.

~~Results~~Selling, ofgeneral ~~Operations~~and administrative expenses totaled $2,620,680 and $2,966,768 for the ~~Year~~fiscal ~~Ended~~years ended March 31, ~~2002~~2004 ~~Compared~~and 2003, respectively. The 11.7% decrease is primarily a result of a decrease in insurance premiums, rent and occupancy costs, and marketing and advertising expenses. Insurance premiums decreased $268,960 or 27.8% as a result of an additional one-year directors’ and offers’ run-off policy that was purchased last fiscal year to cover the ~~Year~~directors ~~Ended~~who resigned from the board of directors pursuant to the agreement with Innovations on May 7, 2002. No such run-off policy was purchased in the current fiscal year. Rent and occupancy costs decreased $110,139 or 16.2% as a result of the consolidation of our New York and Philadelphia office locations in October 2003. Marketing and advertising expenses decreased approximately $111,232 or 66.7% as a result of the launch of our name change and branding initiative during the fiscal year ended March 31, ~~2001~~2003. No such costs were incurred during the fiscal year ended March 31, 2004. These decreases were partially offset by slight increases in travel and entertainment and data and communications costs.

WeIn ~~incurred~~connection with athe ~~net~~relocation ~~loss~~of ~~from~~our ~~continuing~~offices ~~operations~~from ~~totaling~~Philadelphia ~~$12.4~~to ~~million~~New York, ~~or $0.30~~we ~~per~~recorded ~~share~~restructuring charges of $1,352,406 ~~for~~during the fiscal year ended March 31, ~~2002, compared to $15~~2004.2 ~~million,~~The orcharges ~~$0.59~~include ~~per share~~$197,083 ~~for~~in ~~the~~severance ~~year~~paid ~~ended~~to ~~March~~terminated 31employees, ~~2001.~~$655,982 ~~The~~related to ~~decrease~~our inlease ~~net~~obligations ~~loss~~on isthe ~~primarily~~Philadelphia aoffice ~~result~~location, ofand a $2499,~~264,402~~340 ~~increase~~related into ~~revenues,~~the disposition and aimpairment $1of assets,~~269,988~~ ~~decrease~~including ~~in total~~furniture ~~costs~~ and ~~expenses.~~fixtures, ~~Non-operating~~computer ~~expenses~~equipment ~~increased~~and byour anPhiladelphia ~~aggregate~~Stock ofExchange ~~$759,023~~memberships.

~~Revenues~~Interest ~~totaled~~income decreased to $210,~~489,470~~727 for the fiscal year ended March 31, ~~2002,~~2004 from ~~and~~ $~~225~~53,~~068~~241 for the fiscal year ended March 31, ~~2001.~~2003, ~~The~~as ~~revenues~~a inresult ~~each~~of ~~period were generated entirely by~~ the ~~operation~~lower ofaverage ~~eVWAP~~cash and ~~securities~~cash ~~commissions on~~equivalents ~~trades executed through Vie Institutional Services~~balances. ~~The increase in revenues is a result of the~~

1416

~~Table~~Interest expense of ~~Contents~~$1,838,737 for the fiscal year ended March 31, 2004 was comprised primarily of $750,000 related to the secured convertible note that we executed with Innovations on May 7, 2002, $653,391 related to the secured note with RGC, and $425,451 related to the subordinated convertible notes with SOFTBANK and DFJ ePlanet. Interest expense of $1,558,480 for the fiscal year ended March 31, 2003 was comprised primarily of $673,064 related to the Innovations secured convertible note, $626,971 related to the secured notes with RGC, $73,629 related to the subordinated convertible notes with the SOFTBANK and DFJ ePlanet entities, and $177,419 on the short-term note with HK Weaver (see Notes 3 and 8 to the Consolidated Financial Statements).

~~increase~~Other expense of $47,793 for the fiscal year ended March 31, 2004 represents a loss on the disposal of computer equipment in our majority-owned subsidiary, Ashton Canada. On June 11, 2003, Ashton Canada filed an arbitration claim against the ~~aggregate~~Toronto ~~number~~Stock Exchange for breach of ~~shares~~contract ~~executed~~under our agreement to ~~107.0~~introduce ~~million~~a ~~during~~VWAP trading system as a facility of the ~~year~~exchange. Ashton ~~ended~~Canada ~~March~~is 31no longer operational, ~~2002~~has ~~from~~no ~~35.2~~employees, ~~million~~and ~~shares~~currently ~~during~~has the ~~year~~sole ~~ended March~~objective 31of focusing on the arbitration claim with the Toronto Stock Exchange. (See Part I, ~~2001~~Item 3. “Legal Proceedings”.)

~~Salaries~~Equity ~~and~~in ~~employee~~income ~~benefits~~(loss) ~~decreased~~of ~~11% to~~affiliates ~~$5,139,312~~ for the fiscal year ended March 31, 2004 ~~2002~~and ~~from~~2003 totaled ($51,~~784,936~~619) ~~for~~and ~~the year ended March 31~~($234,805), ~~2001~~respectively. asThe aamount ~~result~~in of2003 ~~fewer~~represents ~~employees~~the ~~and~~write ~~the~~off ~~furlough~~of ~~program~~our ~~that~~equity ~~was~~investment in ~~place~~Kingsway-ATG ~~during the three months ended March 31~~Asia, ~~2002~~Ltd. ~~During~~(KAA) ~~the~~of ~~years ended March 31~~$189,653 ~~2002~~ and ~~2001,~~the wewrite-down ~~employed an average~~ of 44our ~~and~~investment 51in ~~employees~~Gomez, ~~respectively~~Inc. As of ~~March 31~~$45, ~~2002~~152, weboth ~~had~~in accordance awith ~~total~~the ofequity 30method ~~employees~~of accounting.

~~Professional~~Results ~~fees~~of ~~decreased~~Operations ~~53% to $1,529,175 from $3,265,768 during~~ for the ~~years~~Year ~~ended~~Ended March 31, ~~2002~~2003 ~~and~~Compared ~~2001, respectively. The decrease was primarily a result of a decrease in consulting and outsourced labor used~~ to ~~develop technology. We paid $901,485 and $2,483,217 for consulting and outsourced labor during~~ the ~~years~~Year ~~ended~~Ended March 31, 2002 ~~and 2001, respectively.~~

~~Brokerage,~~We ~~clearing~~incurred ~~and~~a ~~exchange~~net ~~fees~~loss ~~increased~~from tocontinuing operations totaling $~~2,701,243~~12.1 million for the fiscal year ended March 31, ~~2002~~2003, ~~from~~compared to $~~680,960~~12.4 million for the fiscal year ended March 31, ~~2001~~2002. ~~This~~The ~~increase~~decrease in net loss from continuing operations is a result of ~~the~~a ~~costs~~$787,115 ~~associated~~decrease ~~with~~in ~~increased~~the ~~trades~~loss ~~executed~~from ~~through~~operations, ~~Vie~~partially ~~Institutional~~offset ~~Services~~by ~~and~~an ~~Vie~~aggregate ~~Securities,~~increase ~~including~~in ~~clearing~~non-operating ~~costs~~expenses ~~and~~of ~~fees paid to liquidity providers~~$442,246.

~~Depreciation~~Revenues for the fiscal year ended March 31, ~~2002~~ 2003 increased 3172.6% compared to ~~$914,728 from $700,484 in~~ the fiscal year ended March 31, ~~2001.~~2002, primarily ~~The~~as ~~increase was caused by~~ a ~~full~~result ~~year~~ of ~~depreciation~~the ~~recorded~~increase ~~during~~in the ~~year~~aggregate ~~ended~~number ~~March~~of ~~31,~~shares ~~2002~~executed on ~~capital~~behalf ~~expenditures~~of ~~made~~customers ~~throughout~~during the fiscal year ended March 31, ~~2001 for~~2003. ~~furniture~~100% ~~and~~of ~~fixtures~~the ~~and~~revenues ~~computer~~in ~~equipment~~the ~~purchased~~current ~~for~~fiscal ~~the~~year ~~development~~were ~~and~~from ~~operation~~securities ofcommissions ~~our~~on ~~trading~~trades ~~systems.~~executed through ~~Capital~~Vie ~~expenditures~~Institutional ~~decreased~~Services toand ~~$111~~Vie Securities,~~078~~ ~~for~~while the ~~year~~revenues ~~ended~~in ~~March~~the ~~31,~~prior ~~2002~~fiscal ~~compared~~year toalso ~~$2,043,315~~included infees from the ~~year~~operation ~~ended~~of ~~March~~the ~~31, 2001~~eVWAP system.

WeSalaries ~~recorded~~and aemployee ~~non-cash~~benefits ~~compensation~~increased ~~charge~~8.6% ofto $405,~~108~~584,839 in for the fiscal year ended March 31, ~~2001~~2003 from $5,139,312 for the ~~issuance~~fiscal ofyear ~~stock~~ended ~~options~~March 31, 2002, primarily due to ~~non-employee~~the ~~consultants~~furlough ~~and~~program ~~professional~~that ~~advisors.~~was Noin ~~such~~place ~~charges~~during ~~were~~the ~~incurred~~fourth inquarter of the fiscal year ended March 31, 2002, and recognition of $113,053 in sales commissions during the three months ended March 31, 2003. During the fiscal years ended March 31, 2003 and 2002, we employed an average of 41 and 44 employees, respectively. As of March 31, 2003, we had a total of 40 employees.

WeProfessional ~~recorded~~fees ~~losses~~decreased on13.6% ~~proprietary~~to ~~trading activities of~~ $~~375~~1,~~480~~321,676 ~~and~~from $~~335~~1,~~137~~529,175 during the fiscal years ended March 31, ~~2002~~2003 and ~~2001~~ 2002, respectively. The decrease was primarily a result of a decrease in outsourced labor and temporary personnel working on the development of our trading ~~account~~systems ~~was~~and ~~used~~the byelimination ~~Vie~~of ~~Securities~~monthly fees paid to ~~provide~~our ~~liquidity~~board toof ~~participants~~directors as of September 2001, partially offset by an increase in ~~eVWAP~~legal expenses and recruiting fees. Consulting and temporary personnel decreased to ~~provide~~$449,535 ~~our~~for ~~management~~the ~~with~~fiscal ~~real-time~~year ~~experience~~ended ~~with~~March ~~volume-weighted~~31, ~~average~~2003 ~~price~~from ~~trading~~$901,485 ~~and~~during ~~risk~~the ~~management~~fiscal ~~techniques~~year ended March 31, 2002. Legal fees increased 153% to $548,220 during the ~~Beginning~~fiscal inyear ~~July~~ended ~~2001~~March 31, we2003 ~~substantially~~from ~~decreased~~$216,535 during the ~~use~~fiscal year ended March 31, 2002. Recruiting fees of $153,945 in the ~~trading~~fiscal ~~account~~year ~~upon~~ended ~~establishing~~March ~~relationships~~31, ~~with~~2003 ~~external~~related ~~liquidity~~to ~~providers~~the hiring of our Chief Executive Officer were not incurred in the same period last fiscal year. InFinally, ~~January~~board ~~2002~~fees amounting to $129,500 ~~Vie~~during ~~Securities~~the ~~became~~fiscal ~~inactive~~year ended March 31, 2002 were eliminated during the fiscal year ended March 31, 2003.

~~Selling~~Brokerage, ~~general~~clearing and ~~administrative~~exchange ~~expenses~~fees decreased 31.3% to $21,~~951~~856,~~314~~340 ~~from $4,066,386~~for ~~during~~ the ~~years~~fiscal year ended March 31, ~~2002~~2003 ~~and~~from ~~2001~~$2, ~~respectively. The 27% decrease is primarily a result of lower marketing and travel expenses~~701, ~~partially offset by higher information processing and communications expenses. Marketing expenses~~243 ~~decreased~~for ~~approximately $537,173 due to marketing activities during~~ the fiscal year ended March 31, ~~2001~~2002. ~~which~~This ~~did~~decrease ~~not~~is ~~recur~~a inresult ~~the~~of ~~year~~a ~~ended~~decrease ~~March~~in ~~31,~~certain ~~2002.~~clearing ~~Travel~~and ~~expenses~~execution ~~were~~costs ~~down~~per ~~approximately $318~~share,~~624~~ orand ~~53%~~fewer ~~due~~fees paid to ~~fewer~~third ~~employees~~party ~~and~~liquidity anproviders ~~effort~~as ~~to reduce~~a ~~such~~result ~~costs~~of inincreased ~~the~~use ~~year~~of ~~ended~~our ~~March~~proprietary ~~31,~~trading algorithm ~~2002~~during the fiscal year.

~~Interest income~~17 decreased to $105,514 in the year ended March 31, 2002 from $1,135,078 in the year ended March 31, 2001, as a result of the lower average cash and cash equivalents balances. Interest expense of $626,790 for the year ended March 31, 2002 was comprised of $304,209 related to the secured convertible note that we executed with RGC International Investors, LDC in exchange for the outstanding shares of series F convertible preferred stock on July 13, 2001, and $322,581 on the short-term note with HK Weaver (see Note 7 to the Consolidated Financial Statements).

~~Other~~Depreciation ~~expense~~and ~~for~~amortization ~~the~~expense ~~year~~consists ~~ended~~primarily ~~March 31, 2002 includes a charge~~ of ~~$316,000~~depreciation ~~related to the final settlement~~ of ~~the~~property ~~arbitration~~and ~~award in favor of Matthew Saltzman~~equipment. Depreciation ~~Other expense~~ for the fiscal year ended March 31, ~~2002~~2003 ~~also~~decreased ~~includes~~3.1% ato ~~loss~~$886,745 of from $36914,~~215~~728 onin the ~~note~~fiscal ~~receivable~~year ~~from~~ended ~~CSI~~March 31, a2002. ~~$91,900~~The ~~loss~~decrease onwas ~~the~~caused ~~sale~~by ofa ~~one~~significant number of our ~~memberships~~assets onbecoming ~~the~~fully ~~Philadelphia~~depreciated ~~Stock~~during ~~Exchange, and a $500,000 loss on~~ the ~~exchange~~current fiscal ofyear. ~~our~~Capital ~~investment~~expenditures inincreased ~~JAGfn~~to $182,654 for the ~~outstanding~~fiscal ~~shares~~year ofended ~~UTTC~~March ~~series TK convertible preferred stock~~31, ~~200,000~~2003 ~~series~~compared Tto ~~warrants~~$111,078 ~~309,500~~during of the ~~500,000~~fiscal ~~outstanding~~year ~~series~~March K31, ~~warrants~~2002, ~~and~~primarily anas ~~additional~~a ~~39,000~~result ~~shares~~ of ~~the~~computer ~~class~~equipment Bpurchased ~~common~~from ~~stock~~OptiMark, ofInc. ~~Ashton~~to ~~Canada~~support our proprietary trading algorithm.

15We recorded losses on proprietary trading activities of $1,294,917 and $375,480 during the fiscal years ended March 31, 2003 and 2002, respectively. We used our trading account in the fiscal year ended March 31, 2002 to provide limited liquidity to our customers and to provide our management with expertise in VWAP trading techniques. We did not engage in principal trading from January 2002 through July 2002, when we began testing our proprietary VWAP algorithm. Vie Securities began offering liquidity to its customers on a full-scale basis in October 2002. $134,260 of the loss during the fiscal year ended March 31, 2003 was related solely to the testing of the algorithm, and the remainder of the loss related to our providing liquidity to customers at the VWAP. The higher loss in the fiscal year ended March 31, 2003 compared to March 31, 2002 is a result of increased use of the algorithm as an alternative to sending orders to third party liquidity providers.

~~Table~~Selling, general and administrative expenses increased less than 1% to $2,966,768 from $2,951,314 during the fiscal years ended March 31, 2003 and 2002, respectively. The increase is primarily a result of ~~Contents~~higher insurance premiums, partially offset by lower occupancy, communications, and travel and entertainment expenses. Occupancy expenses decreased $166,910 or 20% due primarily to the renegotiation of our lease at 1900 Market Street in Philadelphia. Our communications expenses decreased approximately $146,000 or 23% due to the cancellation or renegotiation of various contracts. Travel and entertainment expenses decreased by $101,368 or 36% due to less traveling and a focus on decreasing such costs during the period. Insurance premiums increased $539,501 or 128% as a result of increased directors’ and officers’ coverage, higher premiums, and an additional one-year directors’ and officers’ run-off policy covering the directors who resigned from the board of directors pursuant to the agreement with Innovations on May 7, 2003.

~~Other~~Interest income ~~for~~decreased ~~the~~to ~~year ended March 31, 2001 includes a charge of~~ $~~106~~53,~~875~~241 ~~for 30,000 shares of Vie common stock we issued to acquire Hudson Knights Securities LLC (renamed Vie Securities)~~ in ~~July 2000, and income of $413,980 for~~ the ~~reimbursement of legal costs by Fredric W. Rittereiser, our former chairman and chief executive officer, and the~~ ~~Dover~~fiscal ~~Group,~~year ofended ~~which~~March ~~Mr. Rittereiser is the sole stockholder~~31, ~~director~~2003 ~~and~~from ~~officer. In November 2000~~$105,514 ~~we accepted 216,805 shares of Gomez common stock owned by Dover equal~~ in ~~value to~~ the ~~amounts~~fiscal ~~owed~~year toended usMarch ~~under a loan and an agreement to pay legal costs~~31, ~~or $884~~2002,~~564,~~ as ~~full and complete satisfaction of those debts. Both the loan and the agreement to pay legal costs were made in connection with~~ a ~~lawsuit~~result ~~that we settled in 1998, filed by David Rosensaft, a founder~~ of ~~UTTC.~~lower ~~Although~~interest ~~we valued~~rates the Gomez stock at $884,564, since we account for our investment in Gomez using the equity method of accounting, we recorded a corresponding loss in affiliates for the entire amount. We recorded the loss to reduce the carrying amount of the investment in Gomez by our share of Gomez’s net losses to the extent of our investment balance, as required under the equity method of accounting. The loss in affiliates offsets the $413,980 of other income and ~~the~~lower ~~$470,584~~average ~~reduction~~cash ~~of the note receivable~~ and ~~related~~cash ~~accrued~~equivalents ~~interest~~balances.

~~Equity~~Interest inexpense ~~income (loss)~~ of ~~affiliates~~$1,558,480 for the fiscal year ended March 31, ~~2002~~2003 ~~and~~was ~~2001~~comprised ~~totaled~~primarily of $~~172~~673,~~373~~064 ~~and~~related ~~($1~~to the secured convertible note that we executed with Innovations on May 7,~~963~~ 2002,~~976)~~ $626,971 ~~respectively.~~related ~~For~~to the ~~year~~secured ~~ended~~notes ~~March~~with 31RGC, ~~2002~~$73,629 ~~this~~related ~~amount~~to ~~includes~~the ~~our~~subordinated ~~share~~convertible ofnotes with the ~~income~~SOFTBANK ~~from~~and ~~our~~DFJ ~~joint~~ePlanet ~~venture~~entities, ~~KAA.~~and ~~For~~$177,419 on the short-term ~~year~~note ~~ended~~with ~~March 31,~~HK ~~2001,~~Weaver ~~this~~(see ~~amount~~Notes ~~includes~~3 ~~($1,079,412),~~and ~~which~~8 isto ~~our~~the ~~share~~Consolidated Financial Statements). Interest expense of $626,790 for the ~~losses~~fiscal ~~from~~year ~~KAA~~ended March 31, ~~and~~2002 ~~the~~was (comprised of $~~884~~304,~~564)~~209 ~~loss~~related onto ~~our~~the ~~investment~~secured convertible note that we executed with RGC in ~~Gomez,~~exchange ~~described~~for ~~above.~~the ~~The~~outstanding ~~results~~shares of ~~KAA~~series ~~are~~F ~~primarily~~convertible apreferred ~~result~~stock ofin ~~unrealized~~July ~~gains~~2001, and ~~losses~~$322,581 on ~~its~~the ~~trading portfolio~~short-term note with HK Weaver.

~~Discontinued~~Other ~~Operations~~ expense for the fiscal year ended March 31, 2002 includes a charge of $316,000 related to the final settlement of the arbitration award in favor of Matthew Saltzman. The award was granted by the American Arbitration Association on January 14, 2002 related to the arbitration proceedings between Vie and eMC’s former president regarding his employment contract. The expense includes $200,000 in cash payments and a charge of $116,000 for 400,000 shares of Vie common stock we agreed to issue pursuant to the settlement agreement. Other expense for the fiscal year ended March 31, 2002 also includes a loss of $36,215 on the note receivable from CSI, a $91,900 loss on the sale of one of our memberships on the Philadelphia Stock Exchange, and a $500,000 loss on the exchange of our investment in JAGfn for the outstanding shares of UTTC series TK convertible preferred stock, 200,000 series T warrants, 309,500 of the 500,000 outstanding series K warrants, and an additional 39,000 shares of the class B common stock of Ashton Canada.

WeEquity ~~formed~~in ~~Electronic~~income ~~Market Center, Inc.~~ (~~eMC~~loss) asof aaffiliates ~~wholly~~for ~~owned~~the ~~subsidiary in~~fiscal ~~June~~year ~~1998~~ended toMarch ~~develop~~31, ~~operate~~2003 and ~~market~~2002 atotaled ~~global~~($234,805) ~~electronic distribution channel for financial products~~ and ~~services. During the year ended March 31~~$172, ~~2001~~373, ~~eMC~~respectively. ~~focused~~The onamount ~~developing~~in 2003 arepresents ~~private~~the ~~label~~write ~~and~~off ~~rebrandable~~of ~~global~~our ~~electronic~~investment ~~network~~in ~~for financial~~Kingsway-ATG ~~services~~Asia, ~~and~~Ltd. ~~products~~(KAA) ~~geared~~of ~~primarily~~$189,653 toand the ~~needs~~write-down of ~~small~~our ~~and~~investment ~~midsize~~in ~~financial~~Gomez, ~~intermediaries~~Inc. ~~eMC’s~~of ~~approach~~$45,152, ~~was~~both toin ~~select~~accordance ~~distribution partners~~ with ~~existing~~the ~~brands~~equity ~~and~~method ~~business~~of ~~models~~accounting. ~~and~~For tothe ~~provide~~fiscal ~~them~~year aended ~~technology~~March ~~platform~~31, ~~they~~2002, ~~could~~the ~~leverage~~income torepresents ~~expand~~our ~~their~~share ~~existing~~of ~~client~~the ~~relationships~~income ~~and~~from ~~attract~~our ~~new~~joint ~~clients~~venture KAA.

In18 March 2001, eMC completed its initial development phase. At that time, we conducted a review of current market conditions, eMC’s strategy, and the resources and funding required to complete the development of eMC. Due to the lack of available external funding, and the overall market conditions which we believed would limit the demand for eMC’s products and services, Vie’s board of directors determined not to provide any additional funding to eMC. After being unable to find other funding sources or consummate a sale of eMC to a third party, eMC’s board of directors voted on March 29, 2001 to begin the orderly winding down of its operations, including terminating all of its employees, selling its assets, and negotiating the settlement of its outstanding liabilities.

~~During~~Discontinued the year ended March 31, 2001, we recorded a loss from discontinued operations totaling $2,596,006, primarily for salaries, benefits, and consulting fees for the people hired to develop the technology platform. We also recorded a loss on the disposal of eMC during the year ended March 31, 2001 of $3,145,926, including $63,423 in severance payments, and $3,082,503 in write-offs of eMC’s assets. The write-offs included $2,033,088 related to eMC’s investments in TeamVest, approximately $796,000 in system development costs, and approximately $254,000 related to software, computer equipment, prepayments and other assets. During the year ended March 31, 2002, we recorded a loss from discontinued operations of $1,161 for administrative costs, and a gain on the disposal of eMC of $667,137 as a result of the settlement of some of its obligations. During the year ended March 31, 2003, we recorded a loss from discontinued operations of $885 for administrative costs.Operations

~~Liquidity~~We formed Electronic Market Center, Inc. (eMC) as a wholly owned subsidiary in June 1998 to develop, operate and ~~Capital~~market ~~Resources~~a global electronic distribution channel for financial products and services. During the fiscal year ended March 31, 2001, eMC focused on developing a private label and rebrandable global electronic network for financial services and products geared primarily to the needs of small and midsize financial intermediaries. eMC’s approach was to select distribution partners with existing brands and business models and to provide them a technology platform they could leverage to expand their existing client relationships and attract new clients.

At In March 312001, ~~2003,~~eMC wecompleted ~~had~~its ~~total~~initial ~~assets~~development ofphase. ~~$4,600,065 compared~~At tothat $2time,~~786,631~~ atwe ~~March~~conducted ~~31,~~a ~~2002.~~review ~~Current~~of ~~assets~~current atmarket ~~March~~conditions, 31eMC’s strategy, ~~2003~~and ~~totaled~~the ~~$3,122,724~~resources and ~~current~~funding ~~liabilities~~required ~~from~~to ~~continuing~~complete ~~operations~~the ~~were~~development ~~$1,580,205~~of eMC. ToDue ~~date,~~to wethe ~~have~~lack ~~recognized~~of ~~recurring~~available external ~~operating~~funding, ~~losses~~ and ~~have~~the ~~financed~~overall ~~our~~market ~~operations primarily~~conditions ~~through~~which ~~the~~we ~~issuance~~believed ofwould ~~equity~~limit ~~securities.~~the Asdemand offor ~~March~~eMC’s ~~31,~~products ~~2003~~and services, weVie’s ~~had~~board anof ~~accumulated~~directors ~~deficit~~determined ofnot ~~$96,513,500~~to ~~and~~provide ~~stockholders’~~any ~~deficiency~~additional offunding ~~$4,039,795,~~to ~~which~~eMC. ~~raises~~After ~~doubt~~being asunable to ~~our~~find other ~~ability~~funding tosources ~~continue~~or asconsummate a ~~going~~sale ~~concern.~~of WeeMC ~~have developed~~to a ~~plan~~third ~~that~~party, weeMC’s ~~believe~~board ~~will~~of ~~enable~~directors usvoted on March 29, 2001 to ~~continue~~begin ~~operating~~the ~~until~~orderly wewinding ~~are~~down ~~able~~of toits ~~generate~~operations, ~~sufficient~~including ~~revenues~~terminating toall ~~fund~~of ~~our~~its employees, selling its assets, and negotiating the settlement of its outstanding liabilities.

16During the fiscal year ended March 31, 2002, we recorded a loss from discontinued operations of $1,161 for administrative costs, and a gain on the disposal of eMC of $667,137 as a result of the settlement of some of its obligations. During the fiscal years ended March 31, 2004 and 2003, respectively, we recorded a loss from discontinued operations of $1,826 and $885 for administrative costs.

~~Table~~Liquidity ofand ~~Contents~~Capital Resources

~~operations.~~At ~~Our~~March ~~primary~~31, ~~initiatives~~2004, ~~include~~we ~~reducing~~had ~~the~~total ~~cost~~assets of ~~providing~~$3,688,098 ~~liquidity~~compared to ~~our~~$4,600,065 ~~customers~~at March 31, ~~reducing~~2003. ~~our~~Current assets at March 31, 2004 totaled $3,160,795 and current liabilities from continuing operations were $1,686,119. Since our inception, we have recognized recurring operating ~~expenses~~losses and have financed our operations primarily through the issuance of debt and equity securities. As of March 31, 2004, we had an accumulated deficit of $111,531,101 and ~~streamlining~~stockholders’ deficiency of $4,647,497, which raises doubt as to our ~~corporate~~ability ~~structure~~to continue as a going concern.

AtWe ~~March~~are ~~31, 2003,~~actively ~~our~~exploring ~~principal~~alternative ~~source~~sources of ~~liquidity~~capital, ~~was~~including ~~cash~~additional financing arrangements and ~~cash~~strategic relationships ~~equivalents~~with ofother ~~$2,250,601,~~firms. ~~compared~~If we are unable to ~~cash~~accomplish ~~and~~either of these objectives or generate sufficient cash ~~equivalents~~flows offrom ~~$172,187~~operations atto ~~March~~fund 31our business within the next three months, ~~2002~~we will be unable to continue operating as an independent entity. ~~The~~There ~~increase~~is no assurance that we will be successful in ~~cash~~accomplishing ~~and~~these ~~cash~~objectives, ~~equivalents~~nor iscan ~~primarily~~we apredict ~~result~~the ofterms or the ~~investments~~impact byon existing holders of our common stock of any potential financing or strategic transaction. Further, any such financing or strategic transaction we enter into would be subject to approval by Innovations, ~~SOFTBANK,~~pursuant ~~and~~to ~~DFJ~~the ~~ePlanet~~Investors’ Rights Agreement.

~~Between~~At ~~May~~March 2931, ~~2003 and June 16~~2004, ~~2003,~~our weprincipal ~~sold~~source ~~10,394 shares~~ of ~~our~~liquidity ~~series~~was Gcash ~~convertible~~and ~~preferred~~cash ~~stock,~~equivalents ~~par~~of ~~value~~ $~~0.01~~2,249,187, and ~~warrants~~receivables tofrom ~~purchase an aggregate of 12~~brokers,~~992,077~~ ~~shares~~dealers ofand ~~our~~other ~~common stock at an exercise price~~ of $~~0.08~~787,245, compared to ~~certain~~cash ~~investors~~and ~~for~~cash ~~gross proceeds~~equivalents of $12,~~039~~250,~~366.~~601 ~~The~~and ~~series~~receivables Gfrom ~~preferred stock~~brokers, ~~with~~dealers ~~respect~~and ~~to dividend rights or rights upon liquidation, ranks junior to all~~ other ~~series~~ of ~~preferred~~$736,306 ~~stock and pari passu with shares of Vie common stock. Each share of series G preferred stock is convertible~~ at ~~the~~March ~~option of the holder into a number of shares of common stock as is determined by dividing the series G preferred original issue price ($100) by the series G conversion price~~31, ~~initially $0~~2003.~~05.~~

WeAlthough ~~can~~we ~~fund~~made ~~our~~substantial ~~operating~~progress ~~expenses~~during ~~without generating any revenues until at least September 30, 2003 with our current cash position, including~~ the ~~proceeds~~fiscal ~~from~~year ~~the~~ended ~~series~~March ~~G convertible preferred stock we issued. We have developed a plan that we believe will allow us to continue operating beyond then~~31, ~~which~~2004 ~~includes~~in ~~using alternative~~increasing ~~methods of offering liquidity to~~ our ~~customers~~revenues inand ~~order~~reducing ~~to lower~~ our ~~variable~~operating costs ~~structure~~, ~~offering~~we ~~more~~have been ~~competitive~~unable ~~pricing~~ to ~~our~~generate ~~customers~~sufficient inrevenues ~~order~~ to ~~increase~~fund ~~order flow, and streamlining~~ our ~~corporate~~operations ~~structure~~as anticipated. WeDuring ~~began implementing~~the ~~aspects~~fiscal ofyear ~~this~~ended ~~plan~~March in31, ~~May 2003~~2004, ~~and~~we ~~intend~~received toproceeds ~~make~~from ~~further~~financing ~~progress~~activities onof ~~these~~approximately ~~initiatives during the next six months~~$6.2 ~~While~~million, weprimarily ~~believe~~from the ~~combination~~issuance of ~~current cash and receivables~~equity securities, ~~cash~~which ~~flows~~was ~~from~~used ~~operations and cost savings from planned expense reductions will enable us~~ to ~~continue operating until we are able to generate sufficient revenues to~~ fund our operations~~, there can be no assurance that our plan will be successful~~.

~~Included~~On September in30, ~~our~~2003, ~~cash~~we ~~balance~~issued ~~at March 31~~35,000 ~~2003~~shares isof ~~approximately~~our ~~$1.9~~series ~~million that~~H ~~was~~convertible ~~invested~~preferred instock ~~the~~for ~~net~~gross ~~capital~~proceeds of ~~our~~$3.5 ~~broker-dealer~~million ~~operations~~to SOFTBANK. WeOn ~~believe~~October ~~that~~9, ~~planned~~2003, ~~reductions~~we toissued ~~our~~an ~~cost~~additional ~~structure~~15,000 ~~and~~shares ~~the~~of ~~current~~series ~~level~~H ofpreferred ~~net~~for ~~capital~~an ~~are~~aggregate ~~sufficient~~of $1.5 million to ~~allow~~DFJ usePlanet toon ~~expand~~the ~~our~~same ~~business~~terms as ~~planned~~the ~~and~~series toH ~~achieve~~preferred ~~our targeted~~shares ~~revenues,~~issued ~~however~~to ~~there~~SOFTBANK. isEach noshare ~~assurance~~of ~~that~~series weH ~~will~~preferred beis ~~able~~convertible toat doour ~~so.~~election Weat ~~may~~any ~~need~~time tointo ~~use~~such anumber ~~portion~~of shares of ~~our~~common ~~excess~~stock ~~net~~that ~~capital~~is todetermined ~~fund~~by ~~our~~dividing ~~operations.~~the Ifseries weH preferred ~~use~~purchase ~~net~~price ~~capital~~per ~~for~~share ~~such~~($100) ~~purposes,~~by ~~our~~the ~~broker-dealer~~conversion ~~business~~price, ~~operations~~which ~~may~~is ~~be limited,~~initially ~~and~~$.5329 weper ~~may~~share. beAlso ~~unable~~during toOctober ~~grow~~2003, SOFTBANK and ~~increase~~DFJ ~~revenues~~ePlanet ateach converted the ~~rate~~outstanding weprincipal ~~anticipate,~~balance ~~which~~and ~~could~~accrued ~~adversely~~interest ~~affect~~on ~~our~~their ~~financial~~subordinated convertible ~~condition~~notes ~~and~~into ~~operating~~14,933 ~~results.~~

We19 continue to seek to raise additional financing which could take the form of equity or debt offerings, spin-offs, joint ventures, or other collaborative relationships that may require us to issue shares or share revenue. Any such financing strategies would likely impose operating restrictions on us and be dilutive to holders of our common stock, and may not be available on attractive terms or at all. Further, any additional financing we enter into would be subject to approval by Innovations pursuant to the Investors’ Rights Agreement. We currently have outstanding convertible securities including debt, preferred stock, options and warrants, all of which may be dilutive to our stockholders, as more fully described below in “Additional Factors That May Affect Future Results”.

~~Related~~ and ~~Party~~10,629 ~~Transactions~~shares, respectively, of series H preferred as described above. On April 21, 2004, all of the outstanding shares of series H preferred were converted into 14,179,439 shares of common stock.

WeDuring ~~have~~the fiscal ayear ~~number~~ended March 31, 2004, we also sold 12,013 shares of ~~business~~our ~~relationships~~series ~~with~~G ~~related~~convertible ~~parties~~preferred stock, par value $0.01, ~~For~~and ~~more~~warrants to purchase an aggregate of 150,168 shares of our common stock at an exercise price of $8.00 to certain investors ~~information~~for gross proceeds of $1,201,346. The series G preferred stock, with respect to ~~these~~dividend ~~transactions,~~rights ~~see~~or ~~Note~~rights 10upon liquidation, ranks junior to ~~the~~all ~~Consolidated~~other ~~Financial~~series ~~Statements~~of inpreferred ~~Item~~stock 8and pari passu with shares of Vie common stock. Each share of series G preferred stock is convertible at the option of the holder into a number of shares of common stock as is determined by dividing the series G preferred original issue price ($100) by the series G conversion price, which is currently $0.5329.

~~Additional~~Included ~~Factors~~in ~~That~~our ~~May~~cash ~~Affect~~and ~~Future~~receivables ~~Results~~balances at March 31, 2004 is approximately $2.1 million that is invested in the net capital of our broker-dealer operations. We expect to use a portion of our excess net capital to fund our operations, which may limit our broker-dealer business operations. We may therefore be unable to grow and increase revenues at the rate we anticipate, which could adversely affect our financial condition and results of operations.

~~Forward-looking~~Aggregate ~~statements~~Contractual inObligations this document and those made from time to time by members of our senior management are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements concerning the expected future financial results or concerning expected financing, business plans, product development, as well as other estimates are only estimates, and there can be no assurance that actual results will not materially differ from our expectations. Factors that could cause actual results to differ materially from results anticipated in forward-looking statements include, but are not limited to, the following:

17As of March 31, 2004, our contractual obligations and other commercial commitments amounted to $11,066,466 in the aggregate and consisted of the following (dollars in thousands):


	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	($ thousands)
Contractual obligations
Long-term debt obligations	$	9,717	$	—	$	6,174	$	3,543	$	—
Capital lease obligations		16		6		10		—		—
Operating lease obligations		1,011		435		246		194		136
Purchase obligations		322		253		69		—		—
Other long-term liabilities reflected on balance sheet under GAAP		—		—		—		—		—

Total	$	11,066	$	694	$	6,499	$	3,737	$	136

~~Risks~~ Related toParty ~~Our Financial Condition~~ Transactions

We ~~may~~have bea ~~unable~~number of business relationships with related parties. For more information with respect to ~~continue~~these ~~operating~~transactions, assee aNote ~~going~~10 ~~concern~~to the Consolidated Financial Statements in Item 8.

WeAdditional ~~have~~Factors ~~not~~That ~~realized~~May anAffect ~~operating~~Future ~~profit~~Results and have reported significant losses since our inception in 1994. As of March 31, 2003, we have accumulated losses of approximately $96.5 million. The opinion of our independent auditors on our March 31, 2003 financial statements is subject to a “going concern” qualification and states that our recurring losses from operations and stockholders’ deficiency raise substantial doubt about our ability to continue as a going concern. We have developed a plan that includes reducing the cost of providing liquidity to our customers, reducing our current operating expenses and streamlining our corporate structure. While we believe our plan will enable us to fund our operations using our current cash on hand and the proceeds from the issuance of the series G convertible preferred stock that we issued until we are able to generate sufficient revenues to fund our operations, there is no assurance that the plan will be successful. If we are unable to attain profitability or obtain additional funding in the near term, we may be unable to continue operating.

~~The “going~~Forward-looking ~~concern”~~statements ~~opinion~~in this document and those made from ~~our~~time ~~independent~~to ~~auditors~~time ~~could~~by ~~make~~members itof ~~difficult~~our ~~for~~senior usmanagement are made pursuant to ~~maintain~~the ~~our~~safe ~~existing~~harbor provisions ~~customers~~of the Private Securities Litigation Reform Act of 1995. Forward-looking statements concerning the expected future financial results or concerning expected financing, business plans, product development, as well as other estimates are only estimates, and tothere ~~gain~~can ~~new~~be ~~customers~~no assurance that actual results will not materially differ from our expectations. Factors that could cause actual results

~~The~~20 opinion of our independent auditors on our March 31, 2003 financial statements is subject to a “going concern” qualification and states that our recurring losses from operations and stockholders’ deficiency raise substantial doubt about our ability to continue as a going concern. Our existing customers may be unwilling to continue to do business with a company the financial statements of which are subject to a going concern qualification. Potential new customers may also be unwilling to even discuss doing business with a company the financial statements of which are subject to a going concern qualification. For these reasons, the going concern qualification may have a material adverse effect on our existing business and prospects for the future.

~~Most~~ to ofdiffer ~~our~~materially ~~revenues~~from ~~were~~results ~~derived~~anticipated ~~from~~in ~~only~~forward-looking astatements ~~few~~include, ~~customers~~but are not limited to, the following:

~~Although~~Risks ~~our~~Related ~~revenues have historically been concentrated among a small number of customers, our customer mix is susceptible~~ to frequent change. Approximately 65% of the revenues earned during the year ended March 31, 2003 were from transactions with three customers. We can give no assurance that these customers will continue to do business with us, or that we will successfully obtain additional customers. Our ~~arrangements~~Financial ~~with~~Condition customers are not contractual, so our customers are free to trade with multiple service providers. Our future success will depend on continued growth in demand for our electronic trade execution services, and our ability to maintain customers. Further, if we are unable to achieve and maintain a diversified customer base, then the loss of individual customers may materially and adversely affect our business, financial condition and operating results.

~~Our~~We ~~business~~may isbe ~~highly~~unable ~~volatile~~to ~~and~~continue ~~our~~operating ~~quarterly~~as ~~results~~a ~~may~~“going ~~fluctuate significantly~~concern”

We have ~~experienced~~not realized an ~~increase~~operating ~~in volatility~~profit ofand ~~trading~~have ~~volume~~experienced ~~executed~~significant net ~~through~~operating ~~our~~losses ~~systems~~since ~~from~~our ~~session~~inception toin ~~session~~1994. ~~during~~As ~~the~~of ~~past~~March ~~year.~~31, ~~These~~2004, ~~fluctuations~~we have aaccumulated ~~direct~~losses ~~impact~~of onapproximately ~~our~~$112 ~~operating~~million. ~~results~~The ~~and~~opinion ~~cause~~of ~~significant~~our ~~fluctuations~~independent inauditors on our ~~day-to-day~~March ~~profitability.~~31, We2004 ~~cannot~~financial ~~be certain~~statements ~~that~~is ~~the~~subject ~~volatility~~to ina ~~our~~“going concern” ~~daily~~qualification ~~trading~~and ~~volume~~states ~~will~~that ~~not~~our ~~continue.~~recurring ~~Moreover,~~losses ~~the~~from ~~continued~~operations ~~volatility~~and instockholders’ ~~the~~deficiency ~~securities~~raise ~~markets~~substantial ~~could~~doubt ~~result~~about inour ~~significant~~ability ~~proprietary~~to ~~trading~~continue ~~losses.~~as ~~These~~a ~~losses~~going ~~could~~concern. ~~have~~We aare ~~material~~actively ~~adverse~~exploring ~~effect~~alternative onsources ~~our business~~of capital, including ~~financial~~additional ~~condition~~financing arrangements and ~~operating~~strategic ~~results~~relationships with other firms. If ~~demand~~we ~~for~~are ~~our~~unable ~~current~~to ~~services~~accomplish ~~declines~~either ~~and/~~of these objectives or ~~never~~generate ~~materializes~~sufficient ~~for~~cash flows from operations to fund our ~~future~~business ~~products~~within ~~and~~the ~~services,~~next ~~and~~three months, we ~~are~~will be unable to ~~adjust~~continue ~~our~~operating ~~cost~~as ~~structure~~an onindependent aentity. ~~timely~~There ~~basis~~is no assurance that we will be successful in accomplishing these objectives, itnor ~~could~~can ~~have~~we ~~a material~~predict ~~adverse~~the ~~effect~~terms or the impact on existing holders of our ~~business,~~common ~~financial~~stock ~~condition~~of ~~and~~any ~~operating~~potential financing ~~results~~or strategic transaction.

~~Our~~The ~~revenues~~“going ~~may~~concern” ~~fluctuate due to a decline in securities trading volumes, prices or liquidity. Declines in the volume of securities transactions and in market liquidity generally result in lower revenues~~ opinion from our ~~trading~~ ~~activities.~~independent ~~Lower~~auditors ~~price~~could ~~levels~~make ofit ~~securities~~difficult ~~also~~for ~~may~~us ~~result~~to inmaintain ~~reduced~~our ~~trading~~existing ~~activity~~customers and ~~reduce~~to ~~our~~gain ~~revenues~~new ~~from~~customers ~~electronic brokerage transactions. Any decline in securities trading volumes, price or market liquidity or other market variables could have a material adverse effect on our operating results.~~

18The opinion of our independent auditors on our March 31, 2004 financial statements is subject to a “going concern” qualification and states that our recurring losses from operations and stockholders’ deficiency raise substantial doubt about our ability to continue as a going concern. Our existing customers may be unwilling to continue to do business with a company the financial statements of which are subject to a going concern qualification. Potential new customers may also be unwilling to even discuss doing business with a company the financial statements of which are subject to a going concern qualification. For these reasons, the going concern qualification may have a material adverse effect on our existing business and overall prospects for the future.

~~Table~~Most of ~~Contents~~our revenues were derived from only a few customers

Although our revenues have historically been concentrated among a small number of customers, our customer mix is susceptible to frequent change. Approximately 21% of the revenues earned during the fiscal year ended March 31, 2004 were from transactions with one customer that individually comprised greater than 10% of the total revenues for the period. During the fiscal year ended March 31, 2003, approximately 65% of the revenues were from transactions with three customers that each individually comprised greater than 10% of the total revenues for the period. We ~~are~~can ~~subject~~give no assurance that any of these customers will continue to ~~net~~do business ~~capital~~with ~~requirements~~us, or that ~~could~~we ~~limit~~will successfully obtain additional customers. Our arrangements with customers are not contractual, so our customers are free to trade with multiple service providers. Our future success will depend on continued growth in demand for our electronic trade execution services, and our ability to maintain customers. Further, if we are unable to achieve and maintain a diversified customer base, then the loss of individual customers may materially and adversely affect our business, financial condition and results of operations.

AOur ~~significant operating loss or any unusually large charge against our net~~business ~~capital~~is ~~could~~highly ~~adversely~~volatile ~~affect~~and our ~~ability~~quarterly ~~to expand as planned or to maintain our present levels of business, which could have a material adverse effect on our operating~~ results. ~~The SEC and the NASD have strict rules that require each of our broker-dealer affiliates to maintain sufficient net capital. If we fail to maintain the required net capital, the SEC or the NASD~~ may ~~impose~~fluctuate ~~sanctions,~~significantly including suspending or revoking our broker-dealers’ registrations or memberships. Also, a change in the net capital rules, the imposition of new rules, a change in interpretation of the rules, or any unusually large charge against our net capital could limit our operations. In addition, the net capital requirements limit our ability to transfer funds from our broker-dealer affiliates to the parent company, which may affect our ability to repay our debts or fund our operations.

WeDuring the past few years, the financial markets in the United States have experienced increased volatility and many worldwide financial indices have continued to decline. The demand for our trade execution services is directly affected by factors such as economic and political conditions that may lead to decreased trading activity and prices in the securities markets generally. The future economic environment may be subject to ~~lawsuits~~periodic ~~that~~economic downturns, such as recessions, which could ~~seriously~~also result in reduced trading volumes and prices, and could materially harm our ~~operating~~business, financial condition and results of operations. Additionally, these economic factors have resulted in intense price competition in the trade execution business. Although we have experienced decreasing margins on our guaranteed VWAP business as a result, we believe we will realize higher margins from our other program trade execution products as that part of our business grows. Any decline in securities trading volumes, market liquidity and ~~financial~~the ~~condition~~resulting compression of commission rates could have a material adverse effect on our results of operations.

We21 may be subject to claims as a result of one or more legal matters, as more fully described in Note 14 to the Consolidated Financial Statements in Item 8 and “Legal Proceedings” in Item 3. Any of these matters could give rise to claims or litigation that could subject us to liability for damages. We have limited liquidity and financial resources to satisfy any such claims. Moreover, any lawsuits, regardless of their merits, could be time-consuming, require us to incur significant legal expenses and divert management time and attention.

WeProblems ~~may~~in ~~need~~our ~~additional~~relationships ~~financing~~with tothird ~~fund~~parties could have an adverse effect on our ~~operations~~business and ~~strategic~~our ~~initiatives~~results of operations

We ~~believe~~place ~~that~~substantial ~~our~~reliance ~~cash~~on ~~position and the proceeds from~~our ~~the~~relationships ~~series~~with Gthird ~~convertible~~parties ~~preferred~~including ~~stock~~liquidity ~~that we issued should be sufficient to allow us to continue to operate until we are able to generate sufficient revenues to fund our operations. Our cash position as of March 31~~partners, ~~2003~~clearing ~~was $2~~agents,~~250,601.~~ ~~Included in~~exchanges ~~our~~and ~~cash~~other ~~balance~~financial ~~was approximately $1~~intermediaries.9 ~~million~~Any ~~which~~disagreements ~~was~~with ~~invested~~or disruptions in ~~the~~service ~~net~~from ~~capital~~these ofthird ~~our~~parties ~~broker-dealer~~could ~~operations.~~have Wea ~~believe~~material ~~the~~adverse ~~current~~effect ~~level~~on ~~of net capital is sufficient to allow us to expand~~ our business ~~as planned~~ and toresults ~~achieve~~of ~~our targeted revenues~~operations. We ~~may~~are ~~need~~also exposed to ~~use~~credit arisk ~~portion~~from ofthird ~~our~~parties ~~excess~~that ~~net~~owe ~~capital~~us tomoney, ~~fund our operations. However~~securities, ifor weother ~~use~~obligations. ~~net~~Any ~~capital~~failure ~~for~~by ~~such~~these ~~purposes,~~third ~~our~~parties ~~broker-dealer~~to ~~business~~discharge ~~operations~~adequately ~~may~~their beobligations ~~limited,~~in ~~and~~a wetimely ~~may~~manner beor ~~unable~~any event toadversely ~~grow~~affecting ~~and~~these ~~increase revenues~~third atparties ~~the~~could ~~rate~~have wea ~~anticipate,~~material ~~which~~adverse ~~could~~effect ~~adversely~~on ~~affect~~ our financial condition and ~~operating~~ results of operations.

We are ~~seeking~~subject to ~~raise~~net ~~additional~~capital ~~financing~~requirements ~~which may take the form of equity or debt offerings, spin-offs, joint ventures, or other collaborative relationships~~ that ~~may~~could ~~require~~limit ~~us to issue shares or share revenue. These financing strategies would likely impose operating restrictions on us and be dilutive to holders of~~ our ~~common~~operations stock, and may not be available on attractive terms or at all. Further, any additional financing we enter into would be subject to approval by Innovations pursuant to the Investors’ Rights Agreement.

~~Risks~~A ~~Related~~significant operating loss or any unusually large charge against our net capital could adversely affect our ability to expand ~~Your~~as ~~Investment~~planned or to maintain our present levels of business, which could have a material adverse effect on our results of operations. The SEC and the NASD have strict rules that require each of our broker-dealer affiliates to maintain sufficient net capital. If we fail to maintain the required net capital, the SEC or the NASD may impose sanctions, including suspending or revoking our broker-dealers’ registrations or memberships. Also, a change in ~~Our~~the ~~Common~~net ~~Stock~~capital rules, the imposition of new rules, a change in interpretation of the rules, or any unusually large charge against our net capital could limit our operations. In addition, the net capital requirements limit our ability to transfer funds from our broker-dealer affiliates to the parent company, which may affect our ability to repay our debts or fund our operations.

~~Sales~~We ofmay ~~our~~be ~~shares~~subject byto ~~Innovations~~lawsuits ~~and~~that ~~other~~could ~~stockholders~~seriously ~~may~~harm ~~depress~~ our ~~stock~~results ~~price~~of operations and financial condition

~~Our~~We principal stockholder, Innovations owns 608,707,567 shares of our common stock and has rights to acquire an additional 52,870,757 shares upon conversion of a note. Pursuant to an agreement with Innovations, we may be ~~obligated~~subject to ~~register~~claims ~~the~~as ~~resale~~a ofresult ~~these shares~~ of ~~common~~one ~~stock~~or ~~under~~more ~~certain~~legal ~~conditions. SOFTBANK and DFJ ePlanet also have rights to acquire 53~~matters,~~571,429~~ ~~shares~~as ofmore ~~our~~fully ~~common~~described ~~stock~~in ~~upon~~“Legal ~~conversion~~Proceedings” ofin ~~notes~~Part ~~and an additional 8~~I,~~928,571~~ ~~shares~~Item of3. ~~our common stock upon exercise~~ Any of ~~warrants.~~these Inmatters ~~addition,~~could wegive ~~have~~rise ~~certain contractual obligations~~ to ~~register~~claims ~~the~~or ~~resale~~litigation ofthat ~~additional~~could ~~shares~~subject ~~of common~~us ~~stock~~to ~~owned~~liability byfor ~~other stockholders~~damages. ~~The~~We ~~future~~have ~~public~~limited ~~sale~~liquidity ~~of our common stock by Innovations~~ and ~~other~~financial ~~stockholders~~resources ~~that~~to ~~may~~satisfy ~~control~~any ~~blocks~~such ofclaims. ~~our~~Moreover, ~~common~~any ~~stock~~lawsuits, ~~and~~regardless ~~the conversion~~ of ~~our~~their ~~derivative~~merits, ~~securities~~could ~~and public sale of the common~~be ~~stock underlying these derivative securities~~time-consuming, ~~could~~require ~~dilute our common stock and depress its market value. These factors could also make it more difficult for~~ us to ~~raise~~incur ~~funds~~significant ~~through~~legal ~~future~~expenses ~~offerings~~and ofdivert ~~common~~management ~~stock~~time and attention.

19We need additional financing to fund our operations

~~Table~~We are actively exploring alternative sources of ~~Contents~~capital, which could result in additional financing arrangements or a strategic relationship with another firm. If we are unable to accomplish either of these objectives or attain profitability within the next three months, we will be unable to continue operating as an independent entity. There is no assurance that we will be successful. Further, additional financing could take the form of equity or debt offerings, spin-offs, joint ventures, or other collaborative relationships that may require us to issue shares or share revenue. Any such financing strategies would likely impose operating restrictions on us and be dilutive to holders of our common stock, and may not be available on attractive terms or at all. Further, any additional financing we enter into would be subject to approval by Innovations pursuant to the Investors’ Rights Agreement.

IfOur wecash ~~issue~~position ~~additional~~as ~~shares~~ of March 31, 2004 was $2,249,187 and receivables from brokers, dealers and others was $787,245. Included in our ~~common~~cash ~~stock~~and ~~upon~~receivables ~~the~~balances ~~exercise~~was ofapproximately ~~options~~$2.1 ormillion ~~warrants~~which orwas invested in the ~~conversion~~net capital of our ~~convertible~~ ~~note,~~broker-dealer oroperations. ifWe weexpect ~~raise~~to ~~additional~~use a portion of our excess net capital ~~through~~to fund ~~the~~our ~~issuance~~operations ofwhich ~~new~~may ~~securities,~~limit ~~you~~our ~~will~~broker-dealer ~~incur~~business ~~dilution~~operations. We may therefore be unable to grow and increase revenues at the rate we anticipate, which could adversely affect our ~~stock~~financial ~~price~~condition ~~may~~and ~~decline~~results of operations.

~~Innovations~~22 currently holds a note that entitles it to acquire an additional 52,870,757 shares of common stock upon conversion of the note, and SOFTBANK and DFJ ePlanet hold notes that entitle them to acquire an aggregate of 53,571,429 shares upon conversion of their notes. In addition, as of March 31, 2003, we have outstanding options and warrants that may be exercised for an aggregate of 149,513,804 shares of common stock. If Innovations exercises its conversion rights to acquire the shares of common stock, our option and warrant holders exercise their securities, or if we raise additional capital through the issuance of new securities, the number of outstanding shares of our common stock will increase. To the extent that the number of outstanding shares of our common stock increases without a corresponding increase in the number of shares of common stock that you hold, you will incur dilution.

WeRisks doRelated ~~not~~to ~~expect~~Your toInvestment ~~pay~~in ~~common~~Our ~~stock~~Common ~~dividends~~ Stock

~~You~~Sales ~~will not receive payment~~ of ~~any dividends in the foreseeable future and the return on your investment may be lower than anticipated. We have never paid or declared any cash dividends upon~~ our ~~common~~shares ~~stock,~~by ~~nor do we intend to. Our board of directors has discretion to declare cash dividends on~~ our ~~common~~ ~~stock~~principal ~~and~~stockholders onor ~~our~~others ~~Series~~may Bdepress ~~preferred stock. While there are no contractual limitations on~~ our ~~ability to pay cash dividends on our common~~ stock, ~~based on our present financial status and contemplated future financial requirements, we do not~~price anticipate declaring any cash dividends on the common stock. In determining whether to pay dividends, our board of directors considers many factors, including our earnings, capital requirements and financial condition.

~~Risks~~Our ~~Related~~principal tocommon ~~Our~~stockholders ~~Management~~and their respective ownership amounts as of June 30, 2004 are as follows:

Recent board and management changes will impact our business direction


Entity	Shares Owned	% of Voting Stock Owned
SOFTBANK	9,370,115	40%
DFJ ePlanet	4,809,324	21%
Innovations	6,117,038	26%

~~Our~~SOFTBANK ~~future~~and ~~success~~DFJ ePlanet ~~depends~~also ~~upon~~have ~~the~~rights ~~experience,~~to ~~skills~~acquire ~~and~~an ~~working relationship~~additional 89,286 shares of our ~~new~~common ~~board~~stock ~~and~~upon ~~management~~exercise ~~team~~of warrants. ~~Since~~Innovations ~~May~~also 7,has ~~2002,~~rights weto ~~experienced~~acquire aan ~~complete~~additional ~~change~~528,708 inshares ~~the~~upon ~~members~~conversion of ~~our~~a ~~board~~secured ofconvertible ~~directors~~note. OnPursuant ~~October~~to 9agreements with SOFTBANK, ~~2002~~DFJ ePlanet and Innovations, we ~~hired~~may ~~Dean~~be ~~Stamos~~obligated to beregister ~~our~~the ~~new~~resale ~~Chief~~of ~~Executive~~shares ~~Officer~~of common stock held by each of those entities under certain conditions. WeThe ~~also~~series G preferred investors have arights ~~new non-executive~~to ~~Chairman~~acquire 2,256,856 shares of our common ~~board,~~stock aupon ~~new~~the ~~President~~conversion of the series G preferred and ~~Chief~~an ~~Operating~~additional ~~Officer~~150,168 ~~and~~shares aof ~~new~~our ~~Chief~~common ~~Financial~~stock ~~Officer~~upon exercise of warrants. The ~~near-term~~series ~~success~~G ofpreferred ~~our~~investors ~~business~~are ~~will~~currently ~~depend~~entitled onto ~~the~~10% ~~successful~~of ~~integration~~the ofaggregate ~~these~~voting ~~new~~rights ~~members~~of all classes of our ~~management~~common ~~team~~and preferred stock outstanding. ~~The longer-term~~We ~~success~~also ofhave ~~our~~certain ~~operations~~contractual ~~will~~obligations ~~depend~~to inregister ~~large~~the ~~part~~resale of the shares of common stock issuable upon conversion of the ~~hiring~~series ~~and~~G ~~retention~~preferred. The future public sale of ~~key~~our ~~personnel~~common stock by SOFTBANK, ~~which~~DFJ ~~may~~ePlanet, ~~require~~Innovations, ~~among~~or ~~other~~the ~~things,~~series ~~execution~~G ofpreferred ~~acceptable~~holders ~~employment~~could ~~agreements~~dilute ~~with~~our ~~these~~common ~~individuals.~~stock ~~Our~~and ~~ability~~depress toits ~~operate successfully~~market ~~may~~value. beThese ~~jeopardized~~factors ifcould wealso ~~are~~make ~~unable~~it more difficult for us to ~~attract~~raise ~~and~~funds ~~retain~~or ~~skilled~~complete ~~management~~strategic ~~and~~transactions ~~personnel~~through tofuture offerings ~~conduct~~of ~~our~~common ~~business~~stock.

~~Sales~~We orcompleted ~~grants~~a of1-for-100 reverse stock tosplit which ~~our~~could ~~employees~~adversely affect the market price and ~~key~~liquidity ~~individuals~~in ~~will~~our ~~reduce~~common stock and could dilute your ownership ~~percentage~~

We ~~seek~~completed toa ~~attract~~1-for-100 ~~and~~reverse ~~retain~~stock ~~officers,~~split ~~directors,~~of ~~employees~~our ~~and~~common ~~other key individuals in part by offering them~~ stock ~~options~~ ~~and~~on ~~other~~April ~~rights~~20, ~~to purchase shares of common stock~~2004. The ~~exercise~~purposes of ~~these options,~~ the ~~grant~~reverse ofstock ~~additional~~split ~~options,~~were ~~and~~to ~~the~~create ~~exercise thereof, could have~~ a ~~dilutive~~sufficient number ~~effect~~of onauthorized ~~our~~but ~~existing~~unissued ~~stockholders~~shares ~~and may adversely affect the market price~~ of our common stock. ~~The~~to ~~exercise~~permit ofthe ~~options~~full ~~granted~~conversion ~~under~~of ~~our~~the ~~stock~~series ~~option~~H ~~plans~~preferred ~~will~~and ~~reduce~~ the ~~percentage~~conversion ~~ownership~~or exercise of ~~our~~all ~~then-~~other existing ~~stockholders.~~convertible Wesecurities, ~~have~~for ~~reserved~~future ~~190,221,115~~issuances ~~shares~~ of common stock ~~for~~or ~~issuance pursuant to our 2002~~convertible ~~Option Plan~~securities, ~~6,450,000~~and ~~shares of common stock for issuance pursuant~~ to ~~our~~reduce ~~1998~~the ~~Stock~~number ~~Option~~of ~~Plan,~~outstanding ~~2,550,000~~ shares of common stock ~~for~~to ~~issuance~~a ~~pursuant~~number tothat ~~our~~is ~~1999~~more ~~Stock~~comparable ~~Option~~with ~~Plan~~the ~~and~~market ~~3,000,000~~capitalization ~~shares~~ of ~~common~~similar ~~stock~~companies ~~for~~in ~~issuance pursuant to~~ our ~~2000~~ ~~Incentive Plan~~industry.

~~Our~~The ~~principal~~market ~~stockholder~~price ~~exercises~~of ~~control~~our ~~over~~common ~~all matters~~stock ~~submitted~~after the reverse stock split has not risen in proportion to the reduction in the number of shares of our common stock outstanding as a ~~vote~~result of ~~stockholders~~the reverse stock split. We cannot predict the effect of the reverse stock split upon the future market price for our common stock, and the history of reverse stock splits for companies in similar circumstances is varied. Now that the reverse stock split has been completed, a decline in the market price of our common stock may ~~not~~result ~~act~~in a greater percentage decline than would occur in the ~~interests~~absence of a reverse stock split. Moreover, over the long term, the trading price of our ~~other~~common ~~stockholders~~stock is likely to be a function of fundamental business factors, such as our overall financial condition, revenues, earnings, cash flows and prospects, and overall economic conditions, as opposed to capital restructuring measures.

~~Our~~The ~~principal~~possibility ~~stockholder,~~exists ~~Innovations,~~that liquidity ~~owns~~in ~~608,707,567~~the ~~shares~~market price of our common stock ~~and~~could ~~has~~be ~~rights~~adversely toaffected ~~acquire~~by anthe ~~additional~~reduced ~~52,870,757~~number ~~upon~~of ~~conversion~~shares ~~of a~~that ~~note~~are outstanding after the reverse stock split. ~~Innovations’~~In ~~holdings~~addition, ~~represent~~the ~~approximately~~reverse ~~88%~~stock split may increase the number of ~~our~~stockholders ~~outstanding~~who ~~capital~~own “odd ~~stock~~lots” (i.e., ~~and~~a ~~approximately~~number ~~89%~~of shares of our ~~outstanding~~ common stock ~~assuming~~not ~~conversion~~divisible ofby 100). Stockholders who hold odd lots may experience difficulty selling their shares and may experience an increase in the cost of selling their shares.

20We have a significant number of additional authorized but unissued shares of common stock as a result of a reverse stock split. If we issue additional shares in the future, the dilution to the ownership interest of our existing stockholders may be greater than would otherwise occur had a reverse stock split not been effectuated because the board of directors will have more authorized shares available for issuance.

~~Table~~The increase in the authorized shares of ~~Contents~~common stock available for issuance also could have an anti-takeover effect. Future issuances of additional shares of common stock could dilute the voting power of a person seeking control of the Company, thereby making it more difficult for a takeover attempt opposed by the Company to succeed, and thus limiting the opportunity for the stockholders to realize a higher price for their shares than that generally available in the public markets. The board of directors is unaware of any attempt, whether potential or actual, to take over the Company

~~convertible~~23 note. As long as Innovations owns a majority of our outstanding common stock, Innovations will be able to elect a majority of our board of directors and control the outcome of any other matter submitted to a vote of our stockholders. Such matters could include:

•If ~~the~~we ~~composition~~issue additional shares of our ~~board~~common stock upon the exercise of ~~directors~~options ~~and,~~or ~~through~~warrants itor the conversion of our convertible preferred stock, ~~decisions~~or ~~with~~if ~~respect~~we toraise ~~our~~additional ~~business~~capital ~~direction~~through ~~and~~the ~~policies~~issuance of new securities, ~~including~~you ~~the~~will ~~appointment~~incur dilution and ~~removal~~our ofstock ~~officers;~~price may decline

•Innovations ~~any~~currently ~~determinations~~holds ~~with~~a ~~respect~~secured convertible note that entitles it to ~~mergers~~acquire an additional 528,708 shares of common stock upon conversion of the note, and the series G preferred investors are entitled to acquire an aggregate of 2,254,356 shares upon conversion of their preferred stock. In addition, we have outstanding options and warrants that may be exercised for an aggregate of 5,852,734 shares of common stock. If Innovations or ~~other~~the ~~business~~series ~~combinations;~~G preferred investors exercise their conversion rights to acquire shares of common stock, our option and warrant holders exercise their securities, or if we raise additional capital through the issuance of new securities, the number of outstanding shares of our common stock will increase. To the extent that the number of outstanding shares of our common stock increases without a corresponding increase in the number of shares of common stock that you hold, you will incur dilution.

•We will ~~acquisition~~not orpay ~~disposition~~common ofstock ~~assets;~~dividends in the foreseeable future

•You will not receive payment of any dividends in the foreseeable future and the return on your investment may be lower than anticipated. We have never paid or declared any cash dividends upon our common stock, nor do we intend to. Our board of directors has discretion to declare cash dividends on our common stock and on our Series B preferred stock. While there are no contractual limitations on our ability to pay cash dividends on our common stock, based on our present financial status and contemplated future financial requirements, we do not anticipate declaring any cash dividends on the common stock. In determining whether to pay dividends, our board of directors considers many factors, including our earnings, capital requirements ~~structure;~~and financial condition.

•Risks ~~payment~~Related ofto ~~dividends~~Our Management ~~on our common stock; and~~

•Our ~~other~~future ~~aspects~~success ofis ~~our~~dependent ~~business~~on ~~direction~~the ~~and~~retention ~~policies.~~of certain key personnel

AsOur afuture ~~result~~success ofdepends ~~Innovations’~~upon ~~control~~the experience, ~~potential~~skills ~~acquirers~~and ~~may~~working berelationship ~~discouraged~~of ~~from~~our ~~seeking~~management toteam. ~~acquire~~Since ~~control~~May ~~through~~7, 2002, we experienced a complete change in the ~~purchase~~members of our ~~common~~management ~~stock~~team. On October 9, ~~which~~ ~~could~~2002, we hired Dean Stamos to be our new Chief Executive Officer. We have also aexperienced ~~depressive~~turnover ~~effect~~in onthe roles of President, Chief Operating Officer and Chief Financial Officer during the ~~price~~current fiscal year. The near-term success of our ~~securities~~business will depend on the successful integration and reputation of these members of our management team. The longer-term success of our operations will ~~make~~depend itin ~~less~~large ~~likely~~part ~~that~~upon ~~stockholders~~the ~~receive~~hiring aand ~~premium~~retention ~~for~~of ~~their~~key ~~shares~~personnel, aswhich amay ~~result~~require, among other things, execution of ~~any~~acceptable ~~such~~employment ~~attempt~~agreements with these individuals. Our ability to operate successfully may be jeopardized if we are unable to attract and retain skilled management and personnel to conduct our business.

InSales ~~addition,~~or asgrants ~~long as Innovations owns at least 20%~~ of ~~our common~~ stock, ~~Innovations~~to ~~will~~our ~~retain~~employees ~~control~~and ~~over~~key ~~certain corporate~~individuals ~~decisions~~will ~~affecting~~reduce ~~us,~~your ~~including:~~ownership percentage

•We seek to attract and retain officers, directors, employees and other key individuals in part by offering them stock options and other rights to purchase shares of common stock. The exercise of these options, the grant of additional options, and the exercise thereof, could have a dilutive effect on our existing stockholders and may adversely affect the market price of our common stock. The exercise of options granted under our stock option plans will reduce the percentage ownership of our then-existing stockholders. We have reserved 5,493,168 shares of common stock for issuance pursuant to our 2002 Option Plan, 64,500 shares of common stock for issuance pursuant to our 1998 Stock Option Plan, 25,500 shares of common stock for issuance pursuant to our 1999 Stock Option Plan and 30,000 shares of common stock ~~(with~~for ~~certain~~issuance ~~exceptions);~~pursuant to our 2000 Incentive Plan.

•Our ~~the~~principal ~~repurchase~~stockholders ormay ~~redemption~~exercise control over all matters submitted to a vote of stockholders and may not act in the interests of our ~~securities;~~other stockholders

•Innovations, aSOFTBANK ~~merger~~and DFJ ePlanet are entitled to 26%, ~~consolidation~~40% orand ~~sale~~21%, respectively, of ~~substantially~~the aggregate voting rights with respect to all classes of our outstanding ~~assets;~~common and preferred voting stock. SOFTBANK and DFJ ePlanet are also investors in Innovations. As long as SOFTBANK, DFJ ePlanet and

•24 ~~any changes in our business direction.~~

As Innovations ~~disclosed~~own in a ~~Schedule~~majority ~~13D filed by OptiMark Holdings, Inc. on May 17, 2002, OptiMark, Inc., a subsidiary~~ of ~~OptiMark~~our ~~Holdings,~~outstanding ~~Inc.,~~common and ~~the~~preferred ~~other stockholders~~stock, ofthese ~~Innovations~~entities ~~have~~will ~~entered~~collectively ~~into~~be anable ~~agreement whereby the parties agreed~~ to ~~use~~elect ~~their best efforts to consummate~~ a ~~merger~~majority of ~~Innovations~~our ~~with~~board ~~and into Vie Financial Group. Pursuant to the agreement, upon consummation~~ of ~~the merger, each~~ ~~stockholder~~directors ofand ~~Innovations~~control ~~would receive~~ the ~~number~~outcome of ~~shares~~any ofother ~~our~~matter ~~common~~submitted ~~stock proportionate~~ to ~~such~~a ~~stockholder’s~~vote ~~interest~~of inour ~~Innovations prior to the merger~~stockholders. ~~The~~Such ~~agreement~~matters ~~contemplates~~could ~~that~~include: ~~the merger shall take place any time after December 31, 2003, but not later than December 31, 2008.~~

~~Risks~~• ~~Related~~the composition of our board of directors and, through it, decisions with respect to ~~Our~~our ~~Operations~~business direction and policies, including the appointment and removal of officers;

~~Our~~• ~~growth~~any ~~may~~determinations ~~place strains~~with onrespect ~~our~~to ~~managerial,~~mergers ~~operational~~or ~~and~~other ~~financial~~business ~~resources~~ combinations;

~~Our~~• ~~business~~acquisition isor ~~characterized~~disposition by rapid technological change, changing customer demands and evolving industry standards. Our future success depends, in part, on how we respond to these demands. These demands will require us to introduce new products and services, enhance existing products and services and adapt our technology in a timely fashion. There can be no assurance that we will be capable of ~~introducing new products and services, enhancing products and services or adapting our technology.~~ assets;

~~Our~~• ~~current trading, communications and information systems have been designed to perform within finite capacity parameters. Although we believe we can accommodate a substantial increase in activity,~~ our ~~growth~~capital ~~may require implementation of new and improved trading, communications and information systems. There can be no~~ structure;

21• payment of dividends on our common stock; and

~~Table~~• other aspects of ~~Contents~~our business direction and policies.

~~assurance~~As ~~that~~ a ~~significant~~result ~~increase~~of inour ~~trading~~principal ~~volumes~~stockholders’ orcontrol, ~~the~~potential ~~introduction~~acquirers ofmay ~~new~~be ordiscouraged ~~multiple~~from ~~products~~seeking ~~will~~to ~~not~~acquire ~~result~~control inthrough ~~systems~~the ~~failures~~purchase orof our common stock, which could have a ~~material~~ ~~adverse~~depressive effect on the price of our ~~operating~~securities ~~results~~and would make it less likely that stockholders receive a premium for their shares as a result of any such attempt.

~~Our~~In ~~trading~~addition, ~~activities expose~~as long as Innovations owns at least 20% of our ~~capital~~common tostock, Innovations ~~potential~~will ~~losses~~retain control over certain corporate decisions affecting us, including:

We• ~~engage in securities trading activities, predominantly through our subsidiary Vie Securities acting as principal. These activities include~~ the ~~purchase,~~issuance ~~sale or short sale~~ of ~~securities~~shares ~~and derivative securities for our own account in order to provide liquidity to our customers at the VWAP. We guarantee our customers the VWAP for specified intervals~~ of ~~time at the time customer orders are executed, or at the beginning of the intervals. We then trade the orders through~~ our ~~proprietary~~common ~~trading algorithm~~stock (with ~~the~~certain intention of achieving the same price we have guaranteed the customer. We realize trading gains or losses to the extent of the difference between the prices we achieve and the prices we guaranteed our customers. These activities are subject to a number of risks including price fluctuations, rapid changes in the liquidity of markets, and trading errors, all of which subjects our capital and our financial condition to substantial risks on a daily basis. exceptions);

~~Our~~• ~~compliance~~the ~~and~~repurchase ~~risk~~or ~~management~~redemption ~~methods~~of ~~might not be fully effective in reducing~~ our ~~exposure~~ ~~to losses~~ securities;

~~There~~• ~~can~~a bemerger, noconsolidation ~~assurance that our risk management and compliance procedures will be adequate~~ or ~~effective~~sale to detect and deter compliance systems failures. Nor can we assure you that we will be able to manage our systems, technology and regulatory compliance growth successfully. Our inability to do so could have a material adverse effect on our business and our financial condition. The scope of ~~procedures~~substantially ~~for~~all ~~assuring compliance with applicable rules and regulations has changed as the size and complexity~~ of our ~~business~~assets; ~~has increased. We plan to continue to revise formal compliance procedures for the proprietary trading system we are operating through our subsidiary Vie Securities.~~ and

~~Our~~• ~~brokerage~~any ~~operations~~changes ~~expose us to liability for errors~~ in ~~handling~~our ~~customer~~business ~~orders~~ direction.

~~Errors~~As disclosed in ~~performing~~a ~~clearing~~Schedule ~~services~~13D orfiled ~~execution~~by ~~services~~OptiMark Holdings, ~~including~~Inc. ~~clerical~~on ~~and~~May ~~other~~17, ~~errors~~2002, ~~related~~OptiMark, toInc., ~~the~~a ~~handling customer~~subsidiary ~~orders~~of ~~could~~OptiMark ~~lead~~Holdings, toInc., ~~regulatory~~and ~~sanctions~~the ~~and~~other stockholders ~~civil~~of ~~penalties~~Innovations ~~imposed~~have byentered ~~applicable~~into ~~authorities~~an asagreement ~~well~~whereby asthe ~~potential~~parties ~~trading~~agreed ~~losses~~to ~~and~~use ~~potential~~their ~~liability~~best ~~resulting~~efforts ~~from~~to ~~lawsuits~~consummate ~~brought~~a bymerger ~~customers~~of orInnovations ~~others.~~with Weand ~~provide~~into ~~execution services~~Vie Financial Group. Pursuant to ~~each~~the agreement, upon consummation of ~~our~~the ~~trading~~merger, ~~system~~each stockholder ~~customers~~of ~~and~~Innovations ~~execute~~would ~~orders~~receive onthe ~~behalf~~number of ~~each~~shares of our ~~broker-dealer~~common ~~affiliates.~~stock Inproportionate ~~conjunction~~to ~~with~~such ~~our~~stockholder’s ~~clearing~~interest ~~brokers,~~in weInnovations ~~provide~~prior ~~clearing~~to ~~services,~~the ~~which~~merger. ~~include~~The agreement contemplates that the ~~confirmation,~~merger ~~receipt,~~shall ~~settlement~~take ~~and~~place any time after ~~delivery~~December ~~functions~~31, ~~involved~~2003, inbut ~~securities~~not ~~transactions~~later than December 31, 2008.

~~Our~~Risks ~~clearing agents~~Related ~~may fail~~ to ~~provide~~Our ~~our~~Operations ~~customers or us with accurate information about securities transactions~~

WeOur ~~rely~~growth onmay ~~our clearing brokers to discharge their obligations to our customers and us on a timely basis. If they fail to do so, our trading operations~~place ~~may~~strains ~~suffer. Our trading and information systems are coordinated with the clearing and information systems of our clearing brokers. We rely~~ on ~~these systems to furnish us with certain information necessary to run~~ our ~~business~~managerial, ~~including~~operational ~~transaction summaries, data feeds for compliance~~ and ~~risk~~financial ~~management,~~resources ~~execution reports and trade confirmations. These systems may experience systems failure, interruptions, capacity constraints, or other errors.~~

~~Financial~~Our orbusiness ~~other~~is ~~problems~~characterized ~~experienced~~ by ~~third~~rapid ~~parties~~technological ~~could~~change, ~~have~~changing ancustomer ~~adverse~~demands ~~effect~~and evolving industry standards. Our future success depends, in part, on how we respond to these demands. These demands will require us to introduce new ~~our~~products ~~business~~and services, enhance existing products and services and adapt our ~~operating~~technology ~~results~~in a timely fashion. There can be no assurance that we will be capable of introducing new products and services, enhancing products and services or adapting our technology.

WeOur ~~are~~current ~~exposed to credit risk from third parties that owe us money~~trading, ~~securities,~~communications orand information ~~other~~systems ~~obligations.~~have ~~Any~~been ~~failure~~designed ~~by these third parties~~ to ~~discharge~~perform ~~adequately~~within ~~their~~finite ~~obligations~~capacity inparameters. aAlthough ~~timely~~we ~~basis~~believe orwe ~~any~~can ~~event~~accommodate ~~adversely affecting these third parties could have~~ a ~~material~~ ~~adverse~~substantial ~~effect~~increase onin activity, our ~~financial~~growth ~~condition~~may ~~and~~require ~~results~~implementation of ~~operations.~~new ~~These~~and ~~parties~~improved ~~include our customers,~~ trading ~~counter parties~~, ~~clearing~~communications ~~agents,~~and information ~~exchanges~~systems. ~~and~~There ~~other~~can ~~financial~~be ~~intermediaries.~~no

~~Conditions~~25 ~~beyond our control could adversely affect our business and operating results~~

~~Our business and operating results are very dependent~~ ~~upon~~assurance ~~equity~~that ~~trading~~a ~~volumes.~~significant ~~Many~~increase ~~conditions~~in ~~beyond our control can adversely effect such~~ trading volumes, ~~including~~or ~~national and international economic, political and market conditions, investor sentiment,~~ the ~~availability~~introduction of ~~funding~~new ~~and~~or ~~capital, the~~multiple ~~level~~products ~~and~~will ~~volatility~~not ofresult ~~interest~~in ~~rates,~~systems ~~legislative~~failures ~~and~~or ~~regulatory~~have ~~changes,~~a material ~~inflation,~~adverse ~~and~~effect ~~similar~~on ~~broad~~our ~~trends.~~results ~~With~~of ~~reduced trading volumes, we may expect to receive fewer transactions and thus earn fewer commissions from our broker-dealer~~ operations.

22Our trading activities expose our capital to potential losses

~~Table~~We engage in securities trading activities through our subsidiary Vie Securities, which sometimes acts as principal to guarantee the VWAP for customer trades. These trading activities include the purchase, sale or short sale of ~~Contents~~securities and derivative securities. We sometimes guarantee our customers the VWAP for specified intervals of time at the time customer orders are executed, or at the beginning of the intervals. We then trade the orders through our proprietary trading algorithms with the intention of achieving the same price we have guaranteed the customer. We realize trading gains or losses to the extent of the difference between the prices we achieve and the prices we guaranteed our customers. These activities are subject to a number of risks including price fluctuations, rapid changes in the liquidity of markets, and trading errors, all of which subjects our capital and our financial condition to substantial risks on a daily basis.

~~Risks~~Our ~~Related~~compliance toand ~~Our~~risk ~~Technology~~management ~~and~~methods ~~Products~~might not be fully effective in reducing our exposure to losses

WeThere can be no assurance that our risk management and compliance procedures will be ~~dependent~~adequate onor ~~new~~effective to detect and ~~existing~~deter ~~transaction~~compliance ~~products~~systems failures. Nor can we assure you that we will be able to ~~generate~~manage ~~revenues~~our systems, technology and regulatory compliance growth successfully. Our inability to do so could have a material adverse effect on our business and our financial condition. The scope of procedures for assuring compliance with applicable rules and regulations has changed as the size and complexity of our business has increased.

Our ~~future~~brokerage ~~revenues~~operations ~~will~~expose ~~depend~~us primarily on the volume of securities traded on our systems and generated by our transaction-related products. The success of these systems and products is heavily dependent upon their acceptance by broker-dealers, institutional investors and other market participants. Failure to ~~obtain~~liability ~~such~~for ~~acceptance~~errors ~~could result~~ in ~~lower volumes and a lack of liquidity in these systems and products. While we continue to solicit customers to use our systems and products, there can be no assurance that we will attract a~~ ~~sufficient~~handling ~~number~~customer oforders ~~such customers.~~

WeErrors ~~may~~in ~~receive~~performing aclearing ~~substantial~~services ~~portion~~or ofexecution ~~our~~services, ~~order~~including ~~flow~~clerical ~~through~~and ~~electronic~~other ~~communications~~errors ~~gateways,~~related ~~including~~to athe ~~variety~~handling of ~~computer-to-computer~~customer ~~interfaces~~orders ~~and~~could ~~the~~lead ~~Internet.~~to ~~Our~~regulatory ~~electronic~~sanctions ~~brokerage~~and ~~services~~civil ~~involve~~penalties ~~alternative~~imposed ~~forms~~by ofapplicable ~~order~~authorities ~~execution.~~as ~~Accordingly, substantial~~well ~~marketing,~~as ~~sales~~potential ~~efforts~~trading losses and ~~strategic~~potential liability ~~relationships~~resulting ~~may~~from belawsuits ~~necessary~~brought toby ~~educate~~customers ~~and~~or ~~acquire~~others. ~~prospective~~In ~~customers~~conjunction ~~regarding~~with our ~~electronic~~clearing ~~brokerage~~brokers, ~~services~~we ~~and~~provide ~~products.~~clearing ~~There~~services, ~~can~~which beinclude nothe ~~assurance~~confirmation, ~~that our marketing~~receipt, ~~sales~~settlement ~~efforts~~ and ~~strategic~~ ~~initiatives~~delivery ~~will~~functions, beinvolved ~~successful~~ in ~~educating and attracting new customers~~securities transactions.

IfOur ~~any~~clearing ofagents ~~our~~may ~~computer~~fail ~~and~~to ~~communications~~provide ~~systems~~our ~~fail,~~customers ~~our~~or ~~business~~us with ~~will~~accurate beinformation ~~adversely~~about ~~affected~~securities transactions

~~Any~~We ~~computer~~rely oron ~~communications~~our ~~system~~clearing ~~failure~~brokers orto ~~decrease~~discharge intheir ~~computer~~obligations ~~systems~~to ~~performance~~our ~~that~~customers ~~causes~~and ~~interruptions~~us inon a timely basis. If they fail to do so, our trading operations ~~could~~may ~~have~~suffer. aOur trading and information systems are coordinated with the clearing and ~~material~~information ~~adverse~~systems ~~effect~~of our clearing brokers. We rely on these systems to furnish us with certain information necessary to run our business, ~~financial~~including ~~condition~~transaction ~~and~~summaries, ~~operating~~data ~~results.~~feeds Wefor ~~currently~~compliance doand ~~not~~risk ~~provide~~management, ~~our~~execution ~~customers~~reports ~~with~~and ~~backup~~trade confirmations. ~~trading~~These systems ormay ~~complete~~experience ~~disaster~~systems ~~recovery~~failure, ~~systems~~interruptions, capacity constraints, or other errors.

~~Our~~Financial ~~trading systems and proprietary trading activities depend on the integrity and performance of the computer and communications systems supporting them. Extraordinary trading volumes~~ or other ~~events~~problems ~~could~~experienced ~~cause~~by ~~our~~third ~~computer~~parties ~~systems~~could tohave ~~operate at~~ an ~~unacceptably~~adverse ~~low~~effect ~~speed~~on ~~or even fail. We cannot assure you that~~ our ~~network~~ ~~protections~~business ~~will~~and ~~work. Any significant degradation or failure of~~ our ~~computer~~operating ~~systems~~results or any other systems in the trading process could cause customers to suffer delays or errors in trading. These problems could cause substantial losses for customers and could subject us to claims from customers.

~~Software~~We are exposed to credit risk from third parties that owe us money, ~~“bugs~~securities,” ~~errors~~or ~~and~~other ~~malfunctions~~obligations. ~~may~~Any ~~expose~~failure usby these third parties to ~~losses~~discharge adequately their obligations in a timely basis or any event adversely affecting these third parties could have a material adverse effect on our financial condition and results of operations. These parties include our customers, trading counter parties, clearing agents, exchanges and other financial intermediaries.

~~Complex~~Conditions ~~software~~beyond ~~such as ours often contains undetected errors, defects or imperfections. These bugs could result in service interruptions or other problems for us and~~ our ~~customers.~~control ~~Despite rigorous testing, the software used in our products~~ could ~~still~~adversely beaffect ~~subject to various risks associated with systems errors, malfunctions and employee errors. In addition, because~~ our ~~products~~business ~~often work with software developed by others, including vendors~~ and ~~customers,~~results ~~bugs in others’ software could damage the marketability and reputation~~ of ~~our~~operations products. Given the competitive environment for electronic equity trading execution, investors could elect to use our competitors’ products on a temporary or permanent basis to complete their trades. Prolonged service interruptions resulting from natural disasters could also result in decreased trading volumes and the loss of customers. Problems regarding our VWAP trading algorithms, which we use to provide proprietary trading commitments, could result in material tracking errors and in significant proprietary trading losses.

Our ~~networks~~business ~~may~~and beresults ~~vulnerable~~of tooperations ~~security~~are ~~breaches~~very dependent upon equity trading volumes. Many conditions beyond our control can adversely effect such trading volumes, including national and international economic, political and market conditions, investor sentiment, the availability of funding and capital, the level and volatility of

~~Our~~26 networks may be vulnerable to unauthorized access, computer viruses and other security problems. Persons who circumvent security measures could wrongfully use our confidential information or our customers’ confidential information or cause interruptions or malfunctions in our operations. The secure transmission of confidential information over public networks is a critical element of our operations. We have not in the past experienced network security problems. We may be required to expend significant additional resources to protect against the threat of security breaches or to alleviate problems caused by any breaches. We can provide no assurance that our current or future security measures will protect against all security risks in the future.

23 interest rates, legislative and regulatory changes, inflation, and similar broad trends. With reduced trading volumes, we may expect to receive fewer transactions and thus earn fewer commissions from our broker-dealer operations.

~~Table~~Risks ofRelated ~~Contents~~to Our Technology and Products

We ~~may~~are ~~not~~dependent ~~receive~~on ~~accurate~~new and ~~timely~~existing ~~financial~~transaction ~~data~~products ~~from our third-party suppliers, which may cause us~~ to ~~lose customers~~generate ~~and~~revenues ~~be subject to litigation~~

WeOur ~~receive consolidated~~future ~~New~~revenues ~~York~~will ~~Stock~~depend ~~Exchange~~primarily ~~listed~~on ~~trading~~the ~~information,~~volume ~~including~~of ~~real-time~~securities ~~quotes,~~we ~~last~~trade. ~~sale~~The ~~reporting,~~success ~~volume~~of ~~and~~our ~~price~~program ~~information~~trade ~~and~~execution ~~error~~products ~~reports~~is ~~from~~heavily adependent upon ~~number~~their ofacceptance ~~third~~by ~~parties~~broker-dealers, ~~including~~institutional ~~the~~investors ~~New~~and ~~York~~other ~~Stock~~market ~~Exchange,~~participants. ~~the~~Failure ~~Consolidated Tape~~to ~~Association~~obtain ~~and~~such ~~the~~acceptance ~~Securities~~could ~~Industry~~result ~~Automation~~in ~~Corporation.~~lower Wevolumes ~~then~~and ~~calculate~~a ~~the~~lack ~~volume~~of ~~weighted~~liquidity ~~average~~in ~~price~~our ~~information~~products. ~~for~~While ~~the~~we ~~listed~~continue ~~securities~~to ~~traded~~solicit incustomers to use our ~~systems~~trade ~~and~~execution ~~distribute~~services, ~~this~~there ~~information~~can tobe ~~our~~no ~~customers.~~assurance Wethat ~~also~~we ~~use~~will ~~this information~~attract ~~for~~a ~~pricing~~sufficient ~~matched~~number ~~orders~~of ~~executed~~such ~~in our systems~~customers.

IfWe ~~these~~may ~~suppliers~~receive ~~fail~~a tosubstantial ~~supply~~portion ~~accurate~~of orour ~~timely~~order ~~information,~~flow ~~our~~through ~~customers~~electronic ~~may~~communications ~~develop~~gateways, anincluding ~~adverse~~a ~~perception~~variety of ~~our~~computer-to-computer ~~trading~~interfaces and ~~systems~~the ~~and~~Internet. ~~cease~~Our ~~doing~~electronic ~~business~~brokerage ~~with~~services ~~us.~~involve Wealternative ~~may~~forms ~~also~~of beorder ~~subject~~execution. toAccordingly, ~~claims~~substantial ~~for~~marketing, ~~negligence~~sales orefforts ~~other~~and ~~theories based~~strategic onrelationships ~~the~~may ~~nature~~be ~~and~~necessary ~~content~~to ofeducate ~~information~~and weacquire ~~provide~~prospective customers regarding our ~~customers~~electronic brokerage services and products. ~~Any~~There ~~liability~~can ~~arising~~be ~~from~~no ~~third~~assurance ~~party~~that ~~supplied~~our ~~data~~marketing, ~~could~~sales ~~have~~efforts aand ~~material~~strategic ~~adverse~~initiatives ~~effect~~will onbe ~~our~~successful ~~financial~~in ~~condition~~educating and ~~operating~~attracting ~~results~~new customers.

~~Our~~If ~~competitive~~any ~~position~~of ~~may~~our becomputer ~~adversely~~and ~~affected~~communications bysystems ~~others’~~fail, ~~unauthorized~~our ~~use~~business ofwill ~~our~~be adversely ~~intellectual~~affected ~~property~~

~~Although~~Any wecomputer ~~believe~~or ~~our~~communications ~~services and~~system ~~products~~failure door decrease ~~not~~in ~~infringe~~our ontrading ~~the~~support ~~intellectual~~system ~~property~~performance ~~rights of others, there can be no assurance~~ that ~~third~~causes ~~parties~~interruptions ~~will not assert infringement claims against us~~ in ~~the future. Our competitive position may also be adversely affected by the unauthorized use of~~ our ~~proprietary~~operations ~~information. Any such assertions by third parties~~ could ~~result~~have ina ~~costly~~material ~~litigation,~~adverse ineffect ~~which we may not prevail. Also, in such event, we may be unable to license any patents or other intellectual property rights from third parties~~ on ~~commercially~~our ~~reasonable terms~~business, iffinancial atcondition ~~all. Litigation, regardless of its outcome, could also result in substantial cost~~ and ~~diversion~~results of ~~our already limited resources~~operations. ~~Any~~We ~~infringement~~currently ~~claims~~do ornot ~~other~~provide ~~litigation~~our ~~against~~customers uswith ~~could~~backup ~~materially~~trading ~~impact~~systems ~~our~~or ~~operating~~complete ~~results~~disaster ~~and~~recovery ~~financial condition~~systems.

WeOur trading ~~regard~~systems ~~our~~and ~~products~~proprietary ~~and~~trading activities depend on the ~~research~~integrity and ~~development~~performance ~~that~~of ~~went~~the ~~into~~computer ~~developing~~and ~~them~~communications assystems ~~our~~supporting ~~property~~them. ~~Unauthorized~~Extraordinary ~~third~~trading ~~parties~~volumes ~~could copy~~ or ~~reverse~~other ~~engineer~~events ~~certain~~could ~~portions~~cause of our ~~products~~computer orsystems ~~obtain~~to oroperate ~~use~~at ~~information that we regard~~an asunacceptably ~~proprietary.~~low Inspeed ~~addition, our trade secrets could become known to~~ or beeven ~~independently developed by our competitors~~fail. We ~~rely~~cannot ~~primarily~~assure onyou athat ~~combination~~our ofnetwork ~~trademark~~protections ~~and~~will ~~trade~~work. ~~secret~~Any ~~protection,~~significant ~~employee~~degradation ~~and~~or ~~third~~failure ~~party~~of ~~confidentiality~~our ~~and non-disclosure~~computer ~~agreements,~~systems ~~license~~or ~~agreements,~~any ~~and~~ other ~~intellectual~~systems ~~property~~in ~~protection~~the ~~methods~~trading toprocess ~~protect~~could ~~these~~cause ~~property~~customers ~~rights.~~to ~~However,~~suffer wedelays ~~have~~or errors ~~not~~in ~~received~~trading. ~~any~~These ~~patent~~problems ~~awards,~~could ~~nor~~cause ~~have~~substantial welosses ~~filed~~ for ~~federal~~customers ~~copyright~~and ~~protection~~could ~~relating~~subject us to ~~current~~ ~~product~~claims ~~lines~~from customers.

~~Risks~~Software ~~Related~~“bugs,” errors and malfunctions may expose us to ~~Our~~losses ~~Industry~~

WeComplex ~~are~~software such as ours often contains undetected errors, defects or imperfections. These bugs could result in service interruptions or other problems for us and our customers. Despite rigorous testing, the software used in our products could still be subject to various risks associated with systems errors, malfunctions and employee errors. In addition, because our products often work with software developed by others, including vendors and customers, bugs in others’ software could damage the ~~securities~~marketability ~~industry~~and reputation of our products. Given the competitive environment for electronic equity trading ~~generally~~execution, investors could elect to use our competitors’ products on a temporary or permanent basis to complete their trades. Prolonged service interruptions resulting from natural disasters could also result in decreased trading volumes and the loss of customers. Problems regarding our licensed and proprietary trading algorithms could result in material tracking errors, significant principal trading losses, and the loss of customers.

~~The~~Our ~~securities~~networks ~~business~~may isbe ~~subject~~vulnerable to ~~various risks,~~security ~~including~~breaches customer default, employees’ misconduct, errors and omissions by traders and order takers, and litigation. These risks are often difficult to detect beforehand or to deter. Losses associated with these risks could have a material adverse effect on our business, financial condition and operating results.

WeOur ~~derive~~networks ~~most~~may ofbe ~~our~~vulnerable ~~revenue~~to ~~from~~unauthorized ~~trading~~access, incomputer ~~existing~~viruses ~~equity~~and other ~~securities,~~security ~~including~~problems. ~~most~~Persons ofwho ~~the~~circumvent ~~securities~~security inmeasures ~~the~~could ~~S&P~~wrongfully ~~500,~~use ~~Russell~~our ~~1000,~~confidential ~~and~~information ~~Nasdaq~~or ~~100~~our ~~indices.~~customers’ ~~Any~~confidential ~~reduction~~information inor ~~revenues~~cause ~~resulting~~interruptions ~~from~~or amalfunctions ~~decline~~ in ~~the~~our ~~secondary~~operations. ~~market~~The ~~trading~~secure ~~volume~~transmission ~~for~~of confidential ~~these~~information ~~equity~~over ~~securities~~public ~~could~~networks ~~have~~is a ~~material~~critical ~~adverse~~element ~~effect~~of on our ~~business and operating results~~operations. ~~Additionally,~~We ~~further~~have ~~declines~~not in ~~cash flows into~~ the ~~U.S.~~past ~~equity~~experienced ~~markets~~network orsecurity aproblems. ~~slowdown~~We ~~in equity trading activity by broker-dealers and other institutional investors~~ may ~~have~~be anrequired ~~adverse~~to ~~effect~~expend onsignificant ~~the~~additional ~~securities~~resources ~~markets~~to ~~generally,~~protect ~~and could result in lower revenues from our trading systems.~~

~~Our~~27 ~~business could be adversely affected by extensive government regulation~~

~~The~~ against ~~regulatory~~the ~~environment~~threat inof ~~which~~security webreaches ~~operate~~or isto ~~subject~~alleviate toproblems ~~change~~caused by any breaches. ~~New~~We ~~or revised~~can ~~legislation~~provide orno ~~regulations~~assurance ~~imposed~~that byour ~~the~~current ~~SEC,~~or ~~other~~future ~~United~~security measures ~~States~~will orprotect ~~foreign~~against ~~governmental~~all ~~regulatory~~security ~~authorities,~~risks ~~self-regulatory~~in the future.

24We may not receive accurate and timely financial data from our third-party suppliers, which may cause us to lose customers and be subject to litigation

~~Table~~We receive consolidated New York Stock Exchange listed trading information, including real-time quotes, last sale reporting, volume and price information and error reports from a number of ~~Contents~~third parties, including the New York Stock Exchange, the Consolidated Tape Association and the Securities Industry Automation Corporation. We use this information to develop trading strategies and execute orders, as well as provide information to our customers.

If these ~~organizations~~suppliers fail to supply accurate or ~~the~~timely ~~NASD~~information, ~~could~~our ~~have~~customers amay ~~material~~develop an adverse ~~effect~~perception onof our ~~business.~~trading ~~Changes~~services inand ~~the~~cease ~~interpretation~~doing orbusiness ~~enforcement~~with ofus. ~~existing~~We ~~laws~~may ~~and~~also ~~rules~~be ~~by these~~subject ~~governmental~~to ~~authorities,~~claims ~~self-regulatory~~for ~~organizations~~negligence ~~and~~or ~~the~~other ~~NASD~~theories ~~could~~based ~~also~~on ~~have~~the anature and ~~material~~content ~~adverse~~of ~~effect~~information onwe provide our ~~business,~~customers. ~~financial~~Any ~~condition~~liability ~~and~~arising ~~operating~~from ~~results.~~third ~~The~~party ~~SEC,~~supplied ~~the~~data ~~NASD,~~could ~~other~~have ~~self-regulatory~~a ~~organizations~~material ~~and~~adverse ~~state securities~~effect ~~commissions~~on ~~require~~our ~~strict~~financial ~~compliance~~condition ~~with~~and ~~their~~results ~~rules~~of ~~and regulations~~operations.

~~Failure~~Our tocompetitive ~~comply~~position ~~with~~may ~~any~~be ofadversely ~~these~~affected ~~laws,~~by ~~rules~~others’ orunauthorized ~~regulations~~use ~~could~~of ~~result in adverse consequences. An adverse ruling against us and/or~~ our ~~officers and other employees could result in us and/or our officers and~~ ~~other~~intellectual ~~employees~~property ~~being required to pay a substantial fine or settlement and could result in suspension or expulsion. This could have a material adverse effect on our business and results of operations.~~

~~Additional~~Our ~~regulation,~~success ~~changes~~is dependent, in ~~existing~~part, upon ~~laws~~our ~~and~~proprietary ~~rules,~~intellectual orproperty. ~~changes~~We ~~in interpretations~~generally orprotect ~~enforcement~~these ofproperty ~~existing~~rights ~~laws~~as trade secrets through employee and ~~rules~~third ~~often~~party ~~directly~~confidentiality ~~affect~~and ~~securities~~non-disclosure ~~firms~~agreements, license agreements, and other intellectual property protection methods. We ~~cannot~~have ~~predict~~applied ~~what~~for ~~effect~~federal ~~any~~patent ~~such~~protection ~~changes~~relating ~~might~~to ~~have.~~current ~~Our~~product ~~business~~lines, ~~financial~~but ~~condition~~no ~~and~~patents ~~operating~~have ~~results~~been ~~may~~issued. beWe ~~materially~~have ~~affected~~not byfiled ~~both regulations~~for ~~that~~federal ~~are~~copyright ~~directly~~or ~~applicable~~trademark protection relating to uscurrent ~~and~~product ~~regulations~~lines. ofUnauthorized ~~general~~third ~~application.~~parties could ~~Our~~copy ~~levels~~or reverse engineer certain portions of ~~trading~~our ~~system~~products ~~activity~~or ~~and~~obtain or use information that we regard as proprietary. ~~trading~~In ~~can~~addition, beour ~~affected~~trade ~~not~~secrets ~~only~~could bybecome ~~such~~known ~~legislation~~to or ~~regulations~~be ofindependently ~~general~~developed ~~applicability~~by our competitors, ~~but~~and ~~also~~third byparties may ~~industry-specific~~try ~~legislation~~to challenge, invalidate or ~~regulations~~circumvent the mechanisms we select to protect our rights.

~~Our~~Risks ~~industry~~Related isto ~~highly competitive~~Our Industry

We ~~face competition from traditional~~are ~~broker-dealers,~~subject proprietary trading firms, and alternative trading systems offering similar trade execution services, including companies such as Investment Technology Group, Instinet, Bloomberg and LiquidNet. The marketplace for VWAP execution products and services has become highly competitive with the increasing customer demand for VWAP executions. Customers demand guaranteed VWAP pricing, confidentiality, and competitive commission rates. Recently, our key customer mix is susceptible to ~~constant~~risks ~~change~~associated as a result of customers’ sensitivity to commission rates and willingness to engage multiple VWAP service providers. As our customer relationships are not contractual, there is no guarantee that our customers will continue to do business with ~~us. Because our customer base has historically been concentrated among a few firms, there is no guarantee that~~ the ~~loss~~securities ofindustry ~~individual~~generally ~~firms will not have a material adverse effect on our business, results of operations or financial condition.~~

WeThe ~~believe~~securities ~~the~~business ~~factors~~is ~~that~~subject ~~distinguish~~to ~~our products~~various ~~from~~risks, ~~those~~including ofcustomer ~~our competitors include high fill rates~~default, ~~minimal~~employees’ ~~market impact~~misconduct, ~~anonymity,~~errors ~~quality~~and ofomissions ~~trade~~by ~~execution~~traders and ~~pricing~~order takers, and ~~client service~~litigation. ~~Although~~These werisks ~~feel~~are ~~our~~often ~~products~~difficult ~~offer~~to ~~benefits~~detect ~~over~~beforehand ~~those~~or ofto ~~our~~deter. Losses ~~competitors,~~associated ~~there~~with isthese ~~no assurance~~risks ~~that~~could ~~our~~have ~~products~~a ~~will~~material ~~adequately~~adverse ~~address~~effect ~~all~~on ~~the~~our ~~competitive~~business, ~~criteria~~financial incondition aand ~~manner that~~ results inof ~~a competitive advantage~~operations.

~~Many~~We derive most of our ~~competitors~~revenue ~~have~~from ~~substantially~~trading ~~greater~~in ~~financial,~~existing ~~research,~~equity ~~development~~securities, ~~sales,~~including ~~marketing~~most ~~and~~of ~~other~~the ~~resources~~securities ~~than~~in wethe ~~have~~S&P ~~and~~500, ~~many~~Russell of1000, ~~their~~and Nasdaq ~~products~~100 ~~have~~indices. ~~established~~Any ~~operating~~reduction ~~histories.~~in ~~While~~revenues weresulting ~~believe~~from ~~that~~a ~~our~~decline ~~products~~in ~~and~~the ~~services~~secondary ~~offer~~market ~~certain~~trading ~~competitive~~volume ~~advantages,~~for ~~our~~these ~~ability~~equity tosecurities ~~maintain~~could ~~these~~have ~~advantages~~a ~~will~~material ~~require~~adverse ~~continued~~effect ~~investment~~on inour ~~product~~business ~~development,~~and ~~additional marketing~~results of operations. Additionally, ~~and~~further ~~customer~~declines ~~support~~in ~~activities~~cash flows into the U.S. Weequity ~~may~~markets ~~not~~or ~~have~~a ~~sufficient~~slowdown ~~resources~~in toequity ~~continue~~trading toactivity ~~make~~by ~~these~~broker-dealers ~~investments,~~and ~~while~~other ~~our~~institutional ~~competitors~~investors may ~~continue~~have toan ~~devote~~adverse ~~significantly~~effect ~~more~~on ~~resources~~the tosecurities ~~their~~markets generally, and could result in lower revenues from our trading services.

~~ITEM~~Our ~~7A.~~business ~~QUANTITATIVE~~could ~~AND~~be ~~QUALITATIVE~~adversely ~~DISCLOSURE~~affected ~~ABOUT~~by ~~MARKET~~extensive ~~RISK~~government regulation

~~Market~~The ~~risk~~securities ~~refers~~markets toand the ~~potential~~brokerage industry ~~for adverse changes~~ in ~~the~~which ~~value~~we ofoperate ~~financial~~are ~~instruments~~subject asto aextensive ~~result of changes in market conditions~~regulation. We ~~are~~face ~~exposed to~~the ~~market~~ risk ~~associated~~of ~~with~~significant ~~equity~~intervention ~~prices,~~by ~~changes~~regulatory authorities in ~~interest~~all ~~rates,~~jurisdictions ~~and~~in ~~foreign~~which ~~currency~~we ~~exchange~~conduct ~~rates~~business. WeIn ~~continually evaluate~~ our ~~exposure~~case, tothe ~~market~~impact ~~risk~~of ~~and~~regulation ~~oversee~~extends ~~the~~beyond “traditional” ~~establishment~~areas of ~~policies~~securities regulation, ~~procedures~~such as disclosure and ~~controls~~prohibitions toon ~~ensure~~fraud ~~that~~ and manipulation by market ~~risks~~participants, ~~are~~to ~~identified~~the ~~and~~regulation ~~analyzed~~of onthe anstructure ~~ongoing~~of ~~basis~~markets.

~~Equity~~The ~~Price~~securities industry has been subject to several fundamental regulatory ~~Risk~~changes. In the future, the industry may become subject to new regulations or changes in the interpretation or enforcement of existing regulations, which may adversely affect our business. The markets for equity securities have been subject to the

~~Equity~~28 price risk results from exposure to changes in the prices of equity securities. We engage in trading activities with Vie Securities acting as a principal, including the purchase, sale or short sale of securities and derivative securities. These activities are subject to a number of risks, including risks of price fluctuations and rapid changes in the liquidity of markets, all of which may subject our capital to significant risks.

25 most significant regulatory changes. We cannot predict the extent to which any future regulatory changes can affect our business.

~~Table~~On February 26, 2004, the SEC published proposed “Regulation NMS” for public comment. If adopted, Regulation NMS would incorporate four substantive rules related to the regulatory structure of ~~Contents~~the U.S. equity markets. Subject to expressly delineated exceptions, Proposed Rule 611 of Regulation NMS would require national securities exchanges, national securities associations, and order execution facilities (which would include, among other persons, broker-dealers such as Vie Securities that execute orders internally by crossing orders as agent) to establish, maintain, and enforce policies and procedures reasonably designed to prevent the execution of “trade-throughs.” For purposes of the proposed rule, a trade-through means the purchase (or sale) of a security listed on the NYSE, American Stock Exchange (“Amex”) or Nasdaq at a price that is higher (lower) than the best offer (best bid) disseminated through the market at the time the transaction was executed. Proposed Rule 610 would impose new standards governing access to quotations and the execution of orders for equity securities by requiring market centers and market participants that make their quotes publicly available through a national securities exchange or national securities association to permit all market participants access to their limit order books on a non-discriminatory basis. The proposal also would limit the fees that market participants could charge for access to their quotations to a de minimis amount, and require SROs to reduce the incidence of so-called “locked” and “crossed” markets. Proposed Rule 612 generally would prohibit market participants from accepting, ranking or displaying orders, quotes or indications of interest in increments finer than one penny. Finally, Regulation NMS would amend various national market system joint industry quotation and trade reporting plans to modify the formulas for allocating net income among the exchanges and national securities associations that are the participants of such plans. We cannot predict whether or when any or all of Proposed Regulation NMS, either as currently proposed or as may be later modified by the SEC, ultimately will be adopted by the SEC. As a result, we cannot predict the extent to which any future regulatory changes associated with Regulation NMS would affect our business.

WeOur ~~generally~~industry do not hold securities positions overnight, although we do hold positions overnight at times due to errors caused by our customers or us. Equity price risk can arise from liquidating such positions. It is ~~our~~highly ~~policy~~competitive ~~to attempt to trade out of all positions arising from errors immediately while balancing our exposure to market risk.~~

WeThe ~~manage~~algorithmic ~~equity~~trade ~~price~~execution ~~risk~~and ~~associated~~analysis services that we offer compete with ~~proprietary trading~~services ~~and~~offered ~~open~~by ~~positions~~leading ~~through~~brokerage ~~the~~firms ~~establishment~~and transaction processing firms, and ~~monitoring~~with providers of electronic trading, ~~policies~~trade order management systems and ~~through~~financial ~~controls~~information ~~and~~services. ~~review~~We ~~procedures~~also ~~that~~compete ~~ensure~~with ~~communication~~various national and ~~timely~~regional ~~resolution~~securities ofexchanges and execution facilities, alternative trading ~~issues.~~systems, ~~Our~~electronic ~~operations~~crossing ~~department~~networks ~~reviews~~and ~~all~~other ~~intraday trading~~share ~~activity~~matching insystems anfor trade ~~effort~~execution toservices. ~~ensure~~The ~~that~~marketplace ~~any~~for ~~open~~algorithmic ~~issues~~trade ~~are~~execution ~~addressed~~products and ~~resolved~~services byhas ~~the~~become ~~close~~highly ofcompetitive with the ~~trading~~increasing ~~day~~customer demand for such executions. ~~Additionally,~~Customers ~~our~~demand ~~clearing~~confidentiality ~~broker~~and ~~notifies~~competitive ustrade execution quality and commission rates. Our key customer mix is susceptible to constant change as a result of ~~all~~customers’ ~~known~~sensitivity ~~trade~~to ~~discrepancies~~commission onrates ~~the~~and ~~day~~willingness ~~following~~to ~~the~~engage ~~trade~~multiple ~~date~~service providers. WeAs ~~have~~our ~~also~~customer relationships are not ~~established~~contractual, ~~approval~~there ~~policies~~is no guarantee that ~~include~~our ~~review~~customers bywill continue to do business with us. Because our customer base has historically been concentrated among a ~~supervisory~~few ~~principal~~firms, there is no guarantee that the loss of ~~any~~individual ~~proprietary~~firms ~~trading~~will ~~activity~~not have a material adverse effect on our business, results of operations or financial condition.

~~Interest~~Although ~~Rate~~we ~~Risk~~feel our products offer benefits over those of our competitors, there is no assurance that our products will adequately address all the competitive criteria in a manner that results in a competitive advantage.

~~Our~~Many ~~cash~~of ~~management~~our ~~strategy~~competitors ~~seeks~~have tosubstantially ~~optimize~~greater financial, ~~excess~~research, ~~liquid~~development, ~~assets by preserving principal~~sales, ~~maintaining~~marketing ~~liquidity~~and toother ~~satisfy~~resources ~~working~~than ~~capital~~we ~~and regulatory~~have ~~requirements,~~ and ~~minimizing~~many ~~risk~~of ~~while~~their ~~maximizing~~products ~~return.~~have ~~Our~~established ~~exposure~~operating tohistories. ~~interest~~While ~~rate~~we ~~risk~~believe ~~relates~~that ~~primarily to the interest-bearing portion of~~ our ~~cash~~products and ~~cash~~services ~~equivalents~~offer ~~balances.~~certain Ascompetitive ~~of March 31~~advantages, ~~2003,~~our ~~the~~ability ~~cash and cash equivalents~~to ~~balance~~maintain ofthese ~~$2,657,662~~advantages ~~was~~will ~~comprised~~require ofcontinued ~~balances~~investment in ~~our~~product ~~interest-bearing~~development, ~~demand~~additional ~~checking~~marketing, and ~~savings~~customer ~~accounts~~support ~~and~~activities. aWe ~~certificate~~may ofnot ~~deposit.~~have ~~Due~~sufficient resources to ~~the~~continue ~~conservative~~to ~~nature~~make of these ~~accounts~~investments, awhile ~~sudden~~our ~~change~~competitors inmay ~~interest rates would not have a material~~continue ~~effect~~to ondevote ~~our~~significantly ~~financial~~more ~~condition~~resources orto ~~results~~their ~~of operations~~services.

~~Foreign Currency~~ITEM ~~Risk~~7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

~~Vie~~Market ~~has~~risk ~~joint~~refers ~~ventures in Canada and in Hong Kong, which were formed~~ to ~~develop,~~the ~~market~~potential ~~and operate our trading systems~~ for ~~seamless~~adverse ~~use~~changes ~~by U.S., Canadian and Asian financial intermediaries. Our investments~~ in ~~these joint ventures expose us to currency exchange fluctuations between~~ the ~~U.S.~~ ~~Dollar~~value ~~and~~of ~~the~~financial ~~Canadian~~instruments ~~Dollar,~~as ~~and~~a ~~between~~result ~~the~~of ~~U.S.~~changes ~~Dollar and the Hong Kong Dollar. To the extent our international activities recorded~~ in ~~their~~market ~~local currencies increase in the future, the exposure to fluctuations in currency exchange rates will correspondingly increase~~conditions. We ~~have not engaged in any foreign currency hedging activities because our foreign currency cash balances~~ are ~~generally kept at levels necessary~~ exposed to ~~meet~~market ~~current~~risk ~~operating~~associated ~~and~~with ~~capitalization~~equity ~~needs~~prices, ofchanges ~~these~~in ~~foreign~~interest ~~joint ventures.~~rates,

2629

~~Table~~ and foreign currency exchange rates. We continually evaluate our exposure to market risk and oversee the establishment of ~~Contents~~policies, procedures and controls to ensure that market risks are identified and analyzed on an ongoing basis.

~~ITEM~~Equity 8.Price ~~FINANCIAL~~Risk ~~STATEMENTS AND SUPPLEMENTARY DATA~~

~~INDEX~~Equity TOprice ~~CONSOLIDATED~~risk ~~FINANCIAL~~results from ~~STATEMENTS~~exposure to changes in the prices of equity securities. We engage in trading activities with Vie Securities sometimes acting as a principal, including the purchase, sale or short sale of securities and derivative securities. These activities are subject to a number of risks, including risks of price fluctuations and rapid changes in the liquidity of markets, all of which may subject our capital to significant risks.

Independent Auditor’s Report		28
Consolidated Balance Sheets at March 31, 2003 and 2002		29
Consolidated Statements of Operations for the years ended March 31, 2003, 2002, and 2001		30
Consolidated Statements of Cash Flows for the years ended March 31, 2003, 2002, and 2001		31
Consolidated Statements of Stockholders’ (Deficiency) Equity and Comprehensive Loss for the years ended March 31, 2003, 2002, and 2001		33
Notes to Consolidated Financial Statements		36

We generally do not hold securities positions overnight, although we do hold positions overnight at times due to errors caused by our customers or us. Equity price risk can arise from liquidating such positions. It is our policy to attempt to trade out of all positions arising from errors immediately while balancing our exposure to market risk.

27We manage equity price risk associated with principal trading and open positions through the establishment and monitoring of trading policies and through controls and review procedures that ensure communication and timely resolution of trading issues. Our operations department reviews all intraday trading activity in an effort to ensure that any open issues are addressed and resolved by the close of the trading day. Additionally, our clearing broker notifies us of all known trade discrepancies on the day following the trade date. We have also established approval policies that include review by a supervisory principal of any principal trading activity.

~~Table~~Interest ofRate ~~Contents~~Risk

Our ~~INDEPENDENT~~cash ~~AUDITOR’S~~management ~~REPORT~~strategy seeks to optimize excess liquid assets by preserving principal, maintaining liquidity to satisfy working capital and regulatory requirements, and minimizing risk while maximizing return. Our exposure to interest rate risk relates primarily to the interest-bearing portion of our cash and cash equivalents balances. As of March 31, 2004, our cash and cash equivalents totaling $2,599,187 was comprised of balances in our interest-bearing demand checking and savings accounts, our clearing account and a certificate of deposit. Due to the conservative nature of these accounts, a sudden change in interest rates would not have a material effect on our financial condition or results of operations.

ToForeign ~~the~~Currency ~~Stockholders~~Risk ~~and Board of Directors~~

Vie ~~Financial~~has ~~Group~~joint ventures in Canada and in Hong Kong, ~~Inc~~which were formed to develop, market and operate our trading systems for seamless use by U.S., Canadian and ~~Subsidiaries~~Asian financial intermediaries. Neither of these entities is operational, however our investments in these joint ventures could expose us to currency exchange fluctuations between the U.S. Dollar and the Canadian Dollar, and between the U.S. Dollar and the Hong Kong Dollar. To the extent our international activities recorded in their local currencies increase in the future, the exposure to fluctuations in currency exchange rates will correspondingly increase. We have not engaged in any foreign currency hedging activities because our foreign currency cash balances are nominal.

We30 have audited the accompanying balance sheets of Vie Financial Group, Inc. and Subsidiaries (formerly The Ashton Technology Group, Inc. and Subsidiaries) as of March 31, 2003 and 2002, and the related consolidated statements of operations, cash flows, and stockholders’ (deficiency) equity and comprehensive loss for each of the three years in the period ended March 31, 2003. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

WeITEM ~~conducted our audits in accordance with auditing standards generally accepted in the United States of America~~8. ~~Those~~FINANCIAL ~~standards~~STATEMENTS ~~require~~AND ~~that~~SUPPLEMENTARY we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. DATA

InINDEX ~~our~~TO ~~opinion,~~CONSOLIDATED ~~the~~FINANCIAL ~~consolidated~~STATEMENTS financial statements referred to above present fairly, in all material respects, the financial position of Vie Financial Group, Inc. and Subsidiaries (formerly The Ashton Technology Group, Inc. and Subsidiaries) as of March 31, 2003 and 2002 and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2003 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has recurring losses from operations and has a stockholders’ deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


Report of the Independent Registered Accounting Firm		32
Consolidated Balance Sheets at March 31, 2004 and 2003		33
Consolidated Statements of Operations for the years ended March 31, 2004, 2003, and 2002		34
Consolidated Statements of Cash Flows for the years ended March 31, 2004, 2003, and 2002		35
Consolidated Statements of Stockholders’ Deficiency and Comprehensive Loss for the years ended March 31, 2004, 2003, and 2002		37
Notes to Consolidated Financial Statements		41

~~/s/ Goldstein~~31 ~~Golub Kessler LLP~~

~~GOLDSTEIN~~ REPORT ~~GOLUB~~OF ~~KESSLER~~THE ~~LLP~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~New~~To ~~York,~~the ~~New~~Stockholders ~~York~~and Board of Directors

~~May~~Vie ~~30,~~Financial ~~2003~~Group, Inc. and Subsidiaries

~~except~~We have audited the accompanying balance sheets of Vie Financial Group, Inc. and Subsidiaries as of March 31, 2004 and 2003, and the related consolidated statements of operations, cash flows, and stockholders’ deficiency and comprehensive loss for each of the ~~ninth~~three ~~paragraph~~years in the period ended March 31, 2004. These consolidated financial statements are the responsibility of ~~note~~the 7Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

asWe conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to ~~which~~obtain reasonable assurance about whether the ~~date~~financial isstatements ~~June~~are 18free of material misstatement. An audit includes examining, ~~2003~~on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

28In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Vie Financial Group, Inc. and Subsidiaries as of March 31, 2004 and 2003 and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2004 in conformity with United States generally accepted accounting principles.

~~Table~~The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has recurring losses from operations and has a stockholders’ deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of ~~Contents~~this uncertainty.

~~VIE~~/s/ ~~FINANCIAL~~Goldstein ~~GROUP~~Golub Kessler LLP GOLDSTEIN GOLUB KESSLER LLP New York, ~~INC.~~New ~~AND~~York ~~SUBSIDIARIES~~June 3, 2004

~~CONSOLIDATED~~32 ~~BALANCE SHEETS~~

	March 31,
	2003			2002
Assets
Cash and cash equivalents	$	2,250,601		$	172,187
Securities owned, at fair value		7,114			—
Receivables from brokers, dealers and other		736,306			4,798
Prepaid expenses and other current assets		128,703			144,025
Total current assets		3,122,724			321,010
Property and equipment, net of accumulated depreciation		811,339			1,515,430
Exchange memberships		159,752			159,752
Investments in and advances to affiliates		—			224,757
Debt issuance costs		40,960			—
Other assets		58,229			102,782
Total assets	$	4,600,065		$	2,786,631
Liabilities and Stockholders’ Deficiency
Accounts payable and accrued expenses	$	1,068,386		$	1,935,926
Payables to brokers, dealers and others		97,374			—
Securities sold, not yet purchased, at fair value		353,604			—
Net liabilities of discontinued operations		60,841			59,956
Short-term note, net of discount		—			322,581
Total current liabilities		1,580,205			2,318,463
Secured note		4,150,370			4,711,400
Secured convertible note		673,064			—
Subordinated convertible notes		2,130,772			—
Other liabilities		105,449			41,044
Total liabilities		8,639,860			7,070,907
Commitments and contingencies
Preferred Stock—shares authorized: 3,000,000
590,000 shares designated as Series B—(liquidation preference equals $240,000); shares issued and outstanding; 24,000		240,000			240,000
Common stock—par value: $.01; shares authorized: 1,000,000,000 and 100,000,000; shares issued and outstanding; 691,674,817 and 68,282,250		6,916,749			682,823
Additional paid-in capital		85,357,668			79,217,625
Accumulated deficit		(96,513,500	)		(84,414,829	)
Accumulated other comprehensive loss		(40,712	)		(9,895	)
Total stockholders’ deficiency		(4,039,795	)		(4,284,276	)
Total liabilities and stockholders’ deficiency	$	4,600,065		$	2,786,631

VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES

~~The accompanying~~ ~~notes~~CONSOLIDATED ~~are~~BALANCE anSHEETS ~~integral part of these consolidated financial statements.~~


	March 31,
	2004			2003
Assets
Cash and cash equivalents	$	2,249,187		$	2,250,601
Securities owned, at fair value		17,244			7,114
Receivables from brokers, dealers and other		787,245			736,306
Prepaid expenses and other current assets		107,119			128,703

Total current assets		3,160,795			3,122,724
Property and equipment, net of accumulated depreciation		120,535			811,339
Exchange memberships		—			159,752
Debt issuance costs		—			40,960
Other assets		406,768			465,290

Total assets	$	3,688,098		$	4,600,065

Liabilities and Stockholders’ Deficiency
Accounts payable and accrued expenses	$	1,403,431		$	1,068,386
Payables to brokers, dealers and others		—			97,374
Securities sold, not yet purchased, at fair value		103,902			353,604
Accrued severance and current portion of lease termination liability		178,785			—
Net liabilities of discontinued operations		62,667			60,841

Total current liabilities		1,748,785			1,580,205
Secured note		4,803,761			4,150,370
Secured convertible note		1,218,519			673,064
Subordinated convertible notes		—			2,130,772
Lease termination liability		524,579			—
Other liabilities		39,951			105,449

Total liabilities		8,335,595			8,639,860

Commitments and contingencies
Preferred Stock – shares authorized: 3,000,000
590,000 shares designated as Series B – (liquidation preference equals $240,000); shares issued and outstanding; 24,000		240,000			240,000
100,000 shares designated as Series G – par value: $0.01; shares issued and outstanding: 12,013 and none		120			—
100,000 shares designated as Series H – par value: $0.01; shares issued and outstanding; 75,562 and none		756			—
Common stock - par value: $.01; shares authorized: 1,000,000,000; shares issued and outstanding; 6,959,711 and 6,916,749		6,959,711			6,916,749
Additional paid-in capital		99,723,729			85,357,668
Accumulated deficit		(111,531,101	)		(96,513,500	)
Accumulated other comprehensive loss		(40,712	)		(40,712	)

Total stockholders’ deficiency		(4,647,497	)		(4,039,795	)

Total liabilities and stockholders’ deficiency	$	3,688,098		$	4,600,065

~~Table~~The accompanying notes are an integral part of ~~Contents~~these consolidated financial statements.

~~VIE~~33 ~~FINANCIAL GROUP, INC. AND SUBSIDIARIES~~

~~CONSOLIDATED~~VIE ~~STATEMENTS~~FINANCIAL OFGROUP, ~~OPERATIONS~~INC. AND SUBSIDIARIES

	Year Ended March 31,
	2003			2002			2001
Revenues	$	4,296,618		$	2,489,470		$	225,068
Expenses:
Salaries and employee benefits		5,584,839			5,139,312			5,784,936
Professional fees		1,321,676			1,529,175			3,265,768
Brokerage, clearing and exchange fees		1,856,340			2,701,243			680,960
Development costs		—			—			7,461
Depreciation and amortization		886,745			914,728			700,484
Non-cash compensation charges		720,000			—			40,108
Loss on trading activities		1,294,917			375,480			335,137
Selling, general and administrative		2,966,768			2,951,314			4,066,386
Total costs and expenses		14,631,285			13,611,252			14,881,240
Loss from operations		(10,334,667	)		(11,121,782	)		(14,656,172	)
Interest income		53,241			105,514			1,135,078
Interest expense		(1,558,480	)		(626,790	)		(12,156	)
Debt issue costs		(2,557	)		—			—
Other income (expense)		1,087			(950,365	)		300,809
Equity in (loss) income of affiliates		(234,805	)		172,373			(1,963,976	)
Loss from continuing operations		(12,076,181	)		(12,421,050	)		(15,196,417	)
Loss from discontinued operations of eMC		(885	)		(1,161	)		(2,596,006	)
Gain (loss) on disposal of eMC		—			667,137			(3,145,926	)
Total discontinued operations of eMC		(885	)		665,976			(5,741,932	)
Net loss		(12,077,066	)		(11,755,074	)	$	(20,938,349	)
Dividends attributed to preferred stock		—			(1,329,200	)		(1,868,705	)
Dividends in arrears on preferred stock		(21,605	)		(144,358	)		(397,857	)
Net loss applicable to common stock	$	(12,098,671	)	$	(13,228,632	)	$	(23,204,911	)
Basic and diluted net loss per common share from continuing operations	$	(0.02	)	$	(0.30	)	$	(0.59	)
Basic and diluted net income (loss) per common share from discontinued operations		0.00			0.01			(0.20	)
Basic and diluted net loss per common share	$	(0.02	)	$	(0.29	)	$	(0.79	)
Weighted average number of common shares outstanding, basic and diluted		627,566,484			45,987,870			29,394,565

CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these consolidated financial statements.


	Year Ended March 31,
	2004			2003			2002
Revenues	$	8,919,521		$	4,296,618		$	2,489,470

Expenses:
Salaries and employee benefits		4,136,741			5,584,839			5,139,312
Professional fees		1,094,701			1,321,676			1,529,175
Brokerage, clearing and exchange fees		4,829,908			1,856,340			2,701,243
Depreciation and amortization		355,354			886,745			914,728
Non-cash compensation charges		621,224			720,000			—
Loss on trading activities		2,141,137			1,294,917			375,480
Selling, general and administrative		2,620,680			2,966,768			2,951,314
Restructuring charges		1,352,406			—			—

Total costs and expenses		17,152,151			14,631,285			13,611,252

Loss from operations		(8,232,630	)		(10,334,667	)		(11,121,782	)

Interest income		10,727			53,241			105,514
Interest expense		(1,838,737	)		(1,558,480	)		(626,790	)
Debt issue costs		(6,642	)		(2,557	)		—
Other income (expense)		(47,793	)		1,087			(950,365	)
Equity in (loss) income of affiliates		(1,619	)		(234,805	)		172,373

Loss from continuing operations		(10,116,694	)		(12,076,181	)		(12,421,050	)

Loss from discontinued operations of eMC		(1,826	)		(885	)		(1,161	)
Gain (loss) on disposal of eMC		—			—			667,137

Total discontinued operations of eMC		(1,826	)		(885	)		665,976

Net loss		(10,118,520	)		(12,077,066	)		(11,755,074	)

Dividends attributed to preferred stock		(4,877,425	)		—			(1,329,200	)
Dividends in arrears on preferred stock		(21,656	)		(21,605	)		(144,358	)

Net loss applicable to common stock	$	(15,017,601	)	$	(12,098,671	)	$	(13,228,632	)

Basic and diluted net loss per common share from continuing operations	$	(2.16	)	$	(1.93	)	$	(30.21	)
Basic and diluted net income (loss) per common share from discontinued operations		0.00			0.00			1.45

Basic and diluted net loss per common share	$	(2.16	)	$	(1.93	)	$	(28.76	)

Weighted average number of common shares outstanding, basic and diluted		6,952,602			6,275,665			459,879

30The accompanying notes are an integral part of these consolidated financial statements.

~~Table~~34 ~~of Contents~~

VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended March 31,
	2003			2002			2001
	2004			2003			2002
Cash Flows from Operating Activities—Continuing Operations
Cash Flows from Operating Activities – Continuing Operations
Net loss from continuing operations	$	(1210,~~076~~116,~~181~~194	)	$	(12,~~421~~076,~~050~~181	)	$	(1512,~~196~~421,~~417~~050	)
Adjustments to reconcile net loss from continuing operations to net cash used in continuing operations:
Depreciation and amortization		~~886~~355,~~745~~354			~~914~~886,~~728~~745			~~707~~914,~~945~~728
Common stock issued in connection with consulting agreement		~~41,250~~—			—41,250			—
Common stock issued in connection with separation agreement		~~720,000~~—			—720,000			—
Non-cash compensation charge for common stock options		—621,224			—			~~40,108~~—
Amortization of discount on securities available for sale		—			—			(20,229	)
Amortization of debt issue costs		6,642			2,557			—
Amortization of debt issue costs		2,557			—			—
Loss on disposition and impairment of assets		559,622			—			628,116
Non-cash reimbursement of legal expenses		—			—			(413,980	)
Non-cash interest expense		1,828,841			1,556,332			626,789
Common stock issued for Hudson Knights acquisition		—			—			106,875
Equity in loss (income) of affiliates		1,619			234,806			(172,373	)
Loss on sale of investments		—			628,116			—
Non-cash interest expense		1,556,332			626,789
Equity in loss (income) of affiliates		234,806			(172,373	)		1,963,976
Changes in operating assets and liabilities:
Securities owned, at fair value		(710,~~114~~130	)		(7,114	)
Receivables from brokers, dealers and other		(~~731~~50,~~508~~939	)		61(731,~~897~~508	)		161,~~933,305~~897
Prepaid expenses and other current assets		1521,~~322~~584			~~643~~15,~~615~~322			~~(432~~643,~~157~~615	)
Advances to affiliates		(101,~~049~~619	)		88(10,~~760~~049	)		~~(130~~88,~~049~~760	)
Other assets		~~100~~70,~~392~~524			90100,~~940~~392			~~(398~~90,~~426~~940	)
Accounts payable and accrued expenses		~~(778~~178,~~394~~296	)		~~921~~(778,~~007~~394	)		~~113~~921,~~078~~007
Payables to brokers, dealers and other		(97,374	)		—97,374			—
Securities sold, not yet purchased		353,604			—			—
Securities sold, not yet purchased expenses		(249,702	)		353,604			—
Other liabilities		64,405			22,606			18,438
Accrued severance and current portion of lease termination liability		178,786			—			—
Net cash used in continuing operations		(9,530,459	)		(8,594,965	)		(11,707,533	)
Secured convertible note interest payment		(50,000	)		—			—
Cash Flows from Investing Activities—Continuing Operations
Lease termination liability		631,468			—			—
Purchase of securities available for sale		—			—			(1,500,000	)
Other liabilities		(37,295	)		64,405			22,606
Proceeds from maturities and sales of securities available for sale		—			1,500,000			10,000,000
Net cash used in continuing operations		(6,159,793	)		(9,530,459	)		(8,594,965	)
Purchase of property and equipment		(182,654	)		(111,078	)		(2,043,315	)
Cash Flows from Investing Activities – Continuing Operations
Sale (purchase) of exchange memberships		—			105,000			(90,000	)
Proceeds from maturities and sales of securities available for sale		—			—			1,500,000
Issuance of notes receivable		(200,000	)		—			—
Purchase of property and equipment		(76,420	)		(182,654	)		(111,078	)
Cash received from notes receivable		200,000			189,496			121,305
Sale (purchase) of exchange memberships		—			—			105,000
Capitalized software development costs		—			—			(19,897	)
Issuance of notes receivable		—			(200,000	)		—
Investment in affiliates		—			—			—
Cash received from notes receivable		—			200,000			189,496
Purchase of other investments		—			—			(1,500,000	)
Net cash (used in) provided by investing activities		(76,420	)		(182,654	)		1,683,418
Net cash (used in) provided by investing activities		(182,654	)		1,683,418			4,968,093

The accompanying notes are an integral part of these consolidated financial statements.

3135

~~Table~~VIE ofFINANCIAL ~~Contents~~GROUP, INC. AND SUBSIDIARIES

~~VIE~~CONSOLIDATED ~~FINANCIAL~~STATEMENTS ~~GROUP,~~OF ~~INC.~~CASH ~~AND~~FLOWS ~~SUBSIDIARIES~~(continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)


	Year Ended March 31,
	2004			2003			2002
Cash Flows from Financing Activities – Continuing Operations
Proceeds from issuance of short term note	$	—		$	550,000		$	500,000
Repayment of short term notes		—			(550,000	)		—
Issuance costs on common and preferred stock		(24,787	)		(534,137	)		(687,357	)
Proceeds from issuance of common stock		—			7,272,725			1,800,000
Proceeds from issuance of preferred stock		6,201,346			—			—
Proceeds from issuance of secured convertible note		—			2,727,273			—
Proceeds from issuance of subordinated convertible note		—			2,400,000			—
Debt issuance costs		—			(43,517	)		—
Proceeds from exercise of stock options and warrants		58,240			—			—

Net cash provided by financing activities		6,234,799			11,822,344			1,612,643

Foreign currency translation adjustment		—			(30,817	)		22,306

Discontinued Operations
Net cash used in operating activities		—			—			(87,322	)
Net cash provided by (used in) investing activities		—			—			7,224
Net cash provided by financing activities		—			—			—

Net cash used in discontinued operations		—			—			(80,098	)

Net increase (decrease) in cash and cash equivalents		(1,414	)		2,078,414			(5,356,696	)
Cash and cash equivalents, beginning of year		2,250,601			172,187			5,528,883

Cash and cash equivalents, end of year	$	2,249,187		$	2,250,601		$	172,187

Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	—		$	—		$	—

Supplemental schedule of non-cash investing and financing activities:
Conversion of interest on secured convertible note into common stock	$	154,545		$	—		$	—

Common stock issued in final arbitration settlement	$	—		$	116,000		$	—

Warrants issued in connection with exchange agreement	$	—		$	1,188,000		$	—

Beneficial conversion feature of secured convertible note	$	—		$	2,727,723		$	—

Conversion of short-term note to common stock	$	—		$	500,000		$	—

Discount on subordinated convertible note	$	—		$	342,857		$	—

Issue common stock in exchange for UTTC stock	$	—		$	—		$	4,500,000

Conversion of subordinated convertible notes to preferred stock	$	2,556,223		$	—		$	—

Non-cash and accrued dividends on preferred stock	$	4,899,081		$	21,605		$	1,473,558

Conversion of preferred stock to common stock	$	—		$	—		$	202,000

Exchange series F preferred stock for secured convertible note	$	—		$	—		$	5,111,526

Conversion of secured convertible note principal and interest	$	—		$	—		$	704,334

	Year Ended March 31,
	2003			2002			2001
Cash Flows from Financing Activities—Continuing Operations
Proceeds from issuance of short term note	$	550,000		$	500,000		$	—
Repayment of short term notes		(550,000	)		—			—
Line of credit borrowings		—			—			4,109,360
Line of credit borrowings		—			—			(4,109,360	)
Preferred stock dividends paid in cash		—			—			(53,753	)
Issuance costs on common stock		(534,137	)		(687,357	)		(155,884	)
Proceeds from issuance of common stock		7,272,725			1,800,000			2,000,000
Proceeds from issuance of secured convertible note		2,727,273			—			—
Proceeds from issuance of subordinated convertible note		2,400,000			—			—
Debt issuance costs		(43,517	)		—			—
Proceeds from exercise of stock options and warrants		—			—			65,624
Net cash provided by financing activities		11,822,344			1,612,643			1,855,987
Foreign currency translation adjustment		(30,817	)		22,306			(32,201	)
Discontinued Operations
Net cash used in operating activities		—			(87,322	)		(1,789,976	)
Net cash provided by (used in) investing activities		—			7,224			(3,145,926	)
Net cash provided by financing activities		—			—			15,000
Net cash used in discontinued operations		—			(80,098	)		(4,920,902	)
Net increase (decrease) in cash and cash equivalents		2,078,414			(5,356,696	)		(9,836,556	)
Cash and cash equivalents, beginning of year		172,187			5,528,883			15,365,439
Cash and cash equivalents, end of year	$	2,250,601		$	172,187		$	5,528,883
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	—		$	—		$	12,156
Supplemental schedule of non-cash investing and financing activities:
Common stock issued in final arbitration settlement	$	116,000		$	—		$	—
Warrants issued in connection with exchange agreement	$	1,188,000		$	—		$	—
Beneficial conversion feature of secured convertible note	$	2,727,723		$	—		$	—
Conversion of short-term note to common stock	$	500,000		$	—		$	—
Discount on subordinated convertible note	$	342,857		$	—		$	—
Issue common stock in exchange for UTTC stock	$	—		$	4,500,000		$	1,000,000
Receipt of Gomez common stock for repayment of Dover note and reimbursement of legal costs	$	—		$	—		$	884,563
Non-cash and accrued dividends on preferred stock	$	21,605		$	1,473,558		$	2,212,809
Conversion of preferred stock to common stock	$	—		$	202,000		$	3,836,283
Exchange series F preferred stock for secured convertible note	$	—		$	5,111,526		$	—
Conversion of secured convertible note principal and interest	$	—		$	704,334		$	—

The accompanying notes are an integral part of these consolidated financial statements.

~~The~~36 ~~accompanying notes are an integral part of these consolidated financial statements.~~

32VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES

~~Table~~ CONSOLIDATED ofSTATEMENTS ~~Contents~~OF STOCKHOLDERS’ DEFICIENCY AND COMPREHENSIVE LOSS

VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES


	Year Ended March 31,
	2004			2003			2002
	Shares	Amount		Shares	Amount		Shares		Amount
Common stock
Balance at beginning of year	6,916,749	$	6,916,749	682,823	$	682,823	332,288		$	332,288
Issue common stock in connection with puts	—		—	—		—	121,329			121,329
Issue common stock for cash	—		—	6,087,076		6,087,076	—			—
Conversion of preferred stock to common stock	—		—	—		—	1,212			1,212
Conversion of secured convertible note to common stock	29,962		29,962	—		—	43,601			43,601
Conversion of short-term note to common stock	—		—	100,000		100,000	—			—
Issue common stock in connection with separation agreement	—		—	40,000		40,000	—			—
Issue common stock in final arbitration settlement	—		—	4,000		4,000	—			—
Issue common stock for consulting services	—		—	2,750		2,750	(500	)		(500	)
Issue common stock in exchange for UTTC stock	—		—	100		100	184,893			184,893
Exercise of stock options and warrants	13,000		13,000	—		—	—			—

Balance at end of year	6,959,711		6,959,711	6,916,749		6,916,749	682,823			682,823

Series B preferred stock
Balance at beginning of year	24,000		240,000	24,000		240,000	44,200			442,000
Conversion of series B to common stock	—		—	—		—	(20,200	)		(202,000	)

Balance at end of year	24,000		240,000	24,000		240,000	24,000			240,000

Series G preferred stock
Balance at beginning of year	—		—	—		—	—			—
Issue series G preferred stock	12,013		120	—		—	—			—

Balance at end of year	12,013		120	—		—	—			—

Series H preferred stock
Balance at beginning of year	—		—	—		—	—			—
Issue series H preferred stock	50,000		500
Conversion of subordinated convertible note to preferred stock	25,562		256	—		—	—			—

Balance at end of year	75,562		756	—		—	—			—

~~CONSOLIDATED~~The ~~STATEMENTS~~accompanying notes OFare ~~STOCKHOLDERS’~~an ~~(DEFICIENCY)~~integral ~~EQUITY~~part ~~AND~~of ~~COMPREHENSIVE~~these ~~LOSS~~consolidated financial statements.

	Year ended March 31,
	2003			2002					2001
	Shares	Amount		Shares		Amount			Shares		Amount
Common stock
Balance at beginning of year	68,282,250	$	682,823	33,228,830		$	332,288		28,118,594		$	281,186
Issue common stock in connection with puts	—		—	12,132,865			121,329		—			—
Issue common stock for cash	608,707,567		608,706	—			—		1,333,333			13,333
Conversion of preferred stock to common stock	—		—	121,200			1,212		2,877,358			28,774
Conversion of secured convertible note to common stock	—		—	4,360,081			43,601		—			—
Conversion of short-term note to common stock	10,000,000		100,000	—			—		—			—
Issue common stock in connection with separation agreement	4,000,000		40,000	—			—		—			—
Issue common stock in final arbitration settlement	400,000		4,000	—			—		—			—
Issue common stock for consulting services	275,000		2,750	(50,000	)		(500	)	50,000			500
Issue common stock in exchange for UTTC stock	10,000		100	18,489,274			184,893		733,945			7,339
Exercise of stock options and warrants	—		—	—			—		85,600			856
Issue common stock for asset acquisition	—		—	—			—		30,000			300
Balance at end of year	691,674,817		6,916,749	68,282,250			682,823		33,228,830			332,288
Series B preferred stock
Balance at beginning of year	24,000		240,000	44,200			442,000		64,200			642,000
Conversion of series B to common stock	—		—	(20,200	)		(202,000	)	(20,000	)		(200,000	)
Balance at end of year	24,000		240,000	24,000			240,000		44,200			442,000

~~The~~VIE ~~accompanying notes~~FINANCIAL ~~are~~GROUP anINC. ~~integral~~AND ~~part~~SUBSIDIARIES ~~of these consolidated financial statements.~~

33CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY AND COMPREHENSIVE LOSS (continued)


	Year ended March 31,
	2004			2003			2002
	Shares	Amount		Shares	Amount		Shares	Amount
Additional paid-in capital
Balance at beginning of year		85,357,668			79,217,625			73,358,849
Issue common stock in connection with puts		—			—			1,678,671
Issue common stock for cash		—			1,185,651			—
Issue preferred stock for cash		6,200,726			—			—
Conversion of preferred stock to common stock		—			—			200,788
Conversion of short-term note to common stock		—			400,000			—
Conversion of secured convertible note to common stock		124,583			—			660,733
Conversion of subordinated convertible note to preferred stock		2,555,967			—			—
Issue common stock in connection with separation agreement		—			680,000			—
Issue common stock in final arbitration settlement		—			112,000			—
Issue common stock for consulting services		—			38,500			500
Issue common stock in exchange for UTTC stock		—			(100	)		2,815,107
Discount on notes issued		—			4,258,129			500,000
Common and preferred stock issuance costs		(59,104	)		(534,137	)		(687,357	)
Preferred stock dividends		4,877,425			—			1,438,143
Issue common stock options		621,224			—			—
Exercise of stock options and warrants		45,240			—			—
Exchange series F preferred stock for secured convertible note		—			—			(747,809	)

Balance at end of year		99,723,729			85,357,668			79,217,625

~~VIE~~The ~~FINANCIAL~~accompanying notes ~~GROUP~~are ~~INC.~~an ~~AND~~integral ~~SUBSIDIARIES~~part of these consolidated financial statements.

~~CONSOLIDATED~~38 ~~STATEMENTS OF STOCKHOLDERS’ (DEFICIENCY) EQUITY~~

~~AND~~VIE ~~COMPREHENSIVE~~FINANCIAL ~~LOSS~~GROUP, ~~(continued)~~INC. AND SUBSIDIARIES

	Year ended March 31,
	2003			2002			2001
	Shares	Amount		Shares	Amount		Shares	Amount
Additional paid-in capital
Balance at beginning of year		79,217,625			73,358,849			64,294,258
Issue common stock in connection with puts		—			1,678,671			—
Issue common stock for cash		1,185,651			—			1,986,667
Conversion of preferred stock to common stock		—			200,788			3,807,509
Conversion of short-term note to common stock		400,000			—			—
Conversion of secured convertible note to common stock		—			660,733			—
Issue common stock in connection with separation agreement		680,000			—			—
Issue common stock in final arbitration settlement		112,000			—			—
Issue common stock for consulting services		38,500			500			(500	)
Issue common stock in exchange for UTTC stock		(100	)		2,815,107			992,661
Discount on notes issued		4,258,129			500,000			—
Common stock issuance costs		(534,137	)		(687,357	)		(155,886	)
Preferred stock dividends		—			1,438,143			2,207,687
Issue common stock options		—			—			40,108
Exercise of stock options and warrants		—			—			64,770
Exchange series F preferred stock for secured convertible note		—			(747,809	)		—
Issue common stock for asset acquisition		—			—			106,575
Issue common stock of subsidiaries to third parties					—			15,000
Balance at end of year		85,357,668			79,217,625			73,358,849

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY AND COMPREHENSIVE LOSS (continued)

The accompanying notes are an integral part of these consolidated financial statements.


	Year Ended March 31,
	2004				2003				2002
	Shares	Amount			Shares	Amount			Shares	Amount
Accumulated deficit
Balance at beginning of year			(96,513,500	)			(84,414,829	)			(71,186,197	)
Preferred stock dividends			(4,899,081	)			(21,605	)			(1,473,558	)
Net loss			(10,118,520	)			(12,077,066	)			(11,755,074	)

Balance at end of year			(111,531,101	)			(96,513,500	)			(84,414,829	)

Accumulated other comprehensive loss
Balance at beginning of year			(40,712	)			(9,895	)			(48,851	)

Unrealized loss on securities available for sale			—				—				950
Reclassification adjustment			—				—				15,700
Foreign currency translation adjustment			—				(30,817	)			22,306

Other comprehensive (loss) income			—				(30,817	)			38,956

Balance at end of year			(40,712	)			(40,712	)			(9,895	)

Total stockholders’ deficiency		$	(4,647,497	)		$	(4,039,795	)		$	(4,284,276	)

Comprehensive loss
Net loss		$	(10,118,520	)		$	(12,077,066	)		$	(11,755,074	)
Other comprehensive (loss) income per above			—				(30,817	)			38,956

Total comprehensive loss		$	(10,118,520	)		$	(12,107,883	)		$	(11,716,118	)

34The accompanying notes are an integral part of these consolidated financial statements.

~~Table~~39 ~~of Contents~~

~~VIE~~1. ~~FINANCIAL~~SUMMARY ~~GROUP,~~OF ~~INC.~~SIGNIFICANT ~~AND~~ACCOUNTING ~~SUBSIDIARIES~~ POLICIES

~~CONSOLIDATED~~Description ~~STATEMENTS~~of OFCompany ~~STOCKHOLDERS’ (DEFICIENCY) EQUITY~~

~~AND~~Vie ~~COMPREHENSIVE~~Financial ~~LOSS~~Group, ~~(continued)~~Inc. was formed as a Delaware corporation in February 1994. Vie Financial Group, Inc. and its subsidiaries provide electronic trading services to institutional investors and broker-dealers. Our sophisticated proprietary trading algorithms and licensed trading technology enable us to deliver superior trade execution quality while considerably reducing information leakage. Our objective is to provide our clients with high-performance trading that is fast, efficient and nearly invisible to the market.

	Year ended March 31,
	2003				2002				2001
	Shares	Amount			Shares	Amount			Shares	Amount
Accumulated deficit
Balance at beginning of year			(84,414,829	)			(71,186,197	)			(47,981,286	)
Preferred stock dividends			(21,605	)			(1,473,558	)			(2,266,562	)
Net loss			(12,077,066	)			(11,755,074	)			(20,938,349	)
Balance at end of year			(96,513,500	)			(84,414,829	)			(71,186,197	)
Accumulated other comprehensive loss
Balance at beginning of year			(9,895	)			(48,851	)			(73,551	)
Unrealized loss on securities available for sale			—				950				50,605
Reclassification adjustment			—				15,700				6,296
Foreign currency translation adjustment			(30,817	)			22,306				(32,201	)
Other comprehensive (loss) income			(30,817	)			38,956				24,700
Balance at end of year			(40,712	)			(9,895	)			(48,851	)
Total stockholders’ (deficiency) equity		$	(4,039,795	)		$	(4,284,276	)		$	2,898,089
Comprehensive loss
Net loss		$	(12,077,066	)		$	(11,755,074	)		$	(20,938,349	)
Other comprehensive (loss) income per above			(30,817	)			38,956				24,700
Total comprehensive loss		$	(12,107,883	)		$	(11,716,118	)		$	(20,913,649	)

Our subsidiaries include Vie Securities, LLC, Universal Trading Technologies Corporation (UTTC), Electronic Market Center, Inc., and Ashton Technology Canada, Inc.

~~The~~On ~~accompanying~~September 15, 2003 we withdrew our ~~notes~~broker-dealer ~~are~~registration anwith ~~integral~~the ~~part~~Securities and Exchange Commission for our subsidiary, Vie Institutional Services, Inc., and we withdrew its memberships with the NASD and the Philadelphia Stock Exchange. We retained the customers of ~~these~~Vie Institutional ~~consolidated~~Services, ~~financial~~Inc. ~~statements~~by establishing account relationships with those customers through our other broker-dealer subsidiary, Vie Securities LLC, which is now our sole operating entity. The decision to concentrate all of our broker-dealer operations in one entity has enabled us to concentrate our capital resources and eliminate infrastructure redundancies that existed in our prior organizational structure. Further, during the fiscal year ended March 31, 2004, we merged Vie Institutional Services and REB Securities, Inc. into their parent company, UTTC, to further simplify our corporate organizational structure.

35Our current product offering consists of various trade execution services which we provide through our broker-dealer subsidiary Vie Securities, LLC. We offer a suite of proprietary algorithms designed to minimize market impact, disguise our customer’s presence in the marketplace, and achieve various benchmarks including but not limited to the volume-weighted average price (VWAP).

~~Table~~Our principal stockholders are SOFTBANK Capital Partners LP, SOFTBANK Capital Advisors Fund LP and SOFTBANK Capital LP, each a Delaware limited partnership (SOFTBANK), Draper Fisher Jurvetson ePlanet Ventures L.P., a Cayman Islands limited partnership, Draper Fisher Jurvetson ePlanet Partners Fund, LLC, a California limited liability company, and Draper Fisher Jurvetson ePlanet Ventures GmbH & Co. KG, a German partnership (DFJ ePlanet), and OptiMark Innovations, Inc. a Delaware corporation (Innovations). SOFTBANK and DFJ ePlanet are entitled to 40% and 21%, respectively, of ~~Contents~~the aggregate voting rights with respect to all classes of our outstanding common and preferred voting stock. SOFTBANK and DFJ ePlanet are also investors in Innovations, which controls approximately 26% of the aggregate voting rights with respect to all classes of our common and preferred voting stock. Pursuant to an Investors’ Rights Agreement, Innovations has the right to approve certain significant corporate matters such as (i) the issuance of additional shares of common stock; (ii) the repurchase or redemption of our securities; (iii) a merger, consolidation, or sale of substantially all of our assets; or (iv) our involvement in any business other than our current line of business.

1Since our inception, we have recognized recurring operating losses and have financed our operations primarily through the issuance of debt and equity securities. ~~SUMMARY~~As OFof ~~SIGNIFICANT~~March ~~ACCOUNTING~~31, ~~POLICIES~~2004, we had an accumulated deficit of $111,531,101 and stockholders’ deficiency of $4,647,497, which raises substantial doubt as to our ability to continue as a going concern. We are actively exploring alternative sources of capital, including additional financing arrangements and strategic relationships with other firms. If we are unable to accomplish either of these objectives or generate sufficient cash flows from operations to fund our business within the next three months, we will be unable to continue operating as an independent entity. There is no assurance that we will be successful in accomplishing these objectives, nor can we predict the terms or the impact on existing holders of our common stock of any potential financing or strategic transaction.

~~Description~~40 ~~of Company~~

~~Vie~~Basis ~~Financial~~of ~~Group,~~Presentation Inc. (formerly The Ashton Technology Group, Inc.) was formed as a Delaware corporation in February 1994. Vie Financial Group and its subsidiaries provide electronic trading services to institutional investors and broker-dealers. We strive to remove the human element from the trading and order execution process in order to eliminate information leakage. Our objective is to provide our clients with high-performance electronic trading that is fast, efficient and nearly invisible to the market.

~~During~~The ~~the~~consolidated ~~year~~financial ~~ended~~statements ~~March~~have ~~31,~~been ~~2003,~~prepared assuming that we ~~operated~~will ~~our~~continue ~~business~~as ~~through~~a going concern. The financial statements do not include any adjustments that might result from the ~~following~~outcome ~~principal~~of ~~subsidiaries:~~this uncertainty.

•The accounts of each of our majority-owned subsidiaries, Vie Securities, ~~LLC~~UTTC, ~~(formerly~~and Ashton Technology Canada, Inc. are consolidated with those of Vie Financial Group in our consolidated financial statements. We generally account for investments in businesses that we own between 20% and 50% of the outstanding equity using the equity method. Under this method, the investment balance, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliate as they occur, limited to the extent of our investment in and advances to the investee. These adjustments are included in “equity in loss of affiliates” in our consolidated statements of operations. We used the equity method to account for our investments in Gomez, Inc. and Kingsway-ATG ~~Trading~~Asia, ~~LLC~~Ltd. (KAA) (see Note 3 “Investments in Subsidiaries and Affiliated Companies”) for all periods presented.

•The ~~Universal~~results ~~Trading~~of ~~Technologies~~operations ~~Corporation~~for ~~(UTTC),~~each of our subsidiaries and equity method investees are accounted for from their dates of formation or investment. All significant intercompany accounts and transactions between Vie Financial Group and its subsidiaries: are eliminated in consolidation.

•Discontinued ~~Vie~~Operations ~~Institutional Services, Inc. (formerly Croix Securities, Inc.)~~

•Electronic ~~REB~~Market ~~Securities,~~Center ~~Inc.~~

We ~~are~~formed aElectronic ~~subsidiary~~Market ~~of OptiMark Innovations~~Center, Inc. (~~Innovations~~eMC), as a ~~Delaware~~wholly ~~corporation.~~owned Onsubsidiary ~~May~~in 7,June ~~2002~~1998 to develop, ~~Innovations~~operate ~~directly~~and ~~acquired~~market ~~approximately~~a ~~88%~~global electronic distribution ofchannel ~~our~~for ~~outstanding~~financial ~~shares~~products ofand ~~common~~services. ~~stock~~During inthe ~~consideration~~fiscal ~~for~~year $7ended March 31,~~272~~ 2001,~~727~~ ineMC ~~cash,~~focused ~~intellectual~~on ~~property~~developing a private label and ~~other~~rebrandable ~~non-cash~~global ~~assets,~~electronic ~~and~~network wefor ~~issued~~financial aservices ~~senior~~and ~~secured~~products ~~convertible~~geared ~~note~~primarily to ~~Innovations~~the ~~for~~needs ~~$2,727,273~~of small and midsize financial intermediaries. ~~Assuming~~eMC’s ~~conversion~~approach ofwas ~~the~~to ~~note, Innovations~~select ~~would~~distribution ~~own~~partners ~~approximately~~with ~~89%~~existing ofbrands ~~our~~and ~~outstanding~~business ~~common~~models ~~stock~~and to provide them a technology platform they could leverage to expand their existing client relationships and attract new clients.

ToOn ~~date~~August 9, we2000, ~~have~~eMC ~~recognized~~agreed ~~recurring~~to ~~operating~~lend TeamVest, ~~losses~~Inc., a Delaware corporation based in Charlotte, North Carolina $2,000,000 under a convertible loan agreement. eMC and ~~have~~TeamVest ~~financed~~also ~~our~~entered ~~operations~~into ~~primarily~~an ~~through~~operating agreement on that date. Under the ~~issuance~~operating agreement, eMC gained the right to access, distribute and rebrand TeamVest’s electronic investment advice and Internet-based 401(k) investment advice programs, which eMC planned to offer as part of ~~equity~~its ~~securities~~distribution channel. AsThe TeamVest loan and accrued interest were convertible into shares of ~~March~~TeamVest common stock at eMC’s option at any time prior to December 31, ~~2003~~2000, weor ~~had~~automatically, anthirty ~~accumulated~~days ~~deficit~~after all proceeds of ~~$96~~the loan were drawn down and expended by TeamVest. On October 31,~~513~~ 2000,~~500~~ ~~and~~TeamVest created TeamVest ~~stockholders’~~Retirement ~~deficiency~~Plan ofServices, $4LLC,~~039~~ a North Carolina limited liability company,~~795,~~ to which ~~raises~~it ~~substantial~~contributed ~~doubt~~its asdefined tocontribution ~~our~~services ~~ability~~business. toOn ~~continue~~November as30, 2000, the TeamVest loan plus accrued interest was converted into shares of TeamVest, Inc. common stock. In addition, eMC received a ~~going~~7.4% ~~concern~~membership interest in TeamVest Retirement Plan Services, LLC.

WeIn ~~have~~March ~~developed~~2001, aeMC ~~plan~~completed ~~that~~its weinitial ~~believe~~development ~~will enable us to continue operating for at least the next 12 months~~phase. ~~Our~~At ~~primary~~that ~~initiatives include~~time, ~~reducing~~we ~~the~~conducted ~~cost~~a review of ~~providing~~current ~~liquidity~~market toconditions, ~~our~~eMC’s ~~customers~~strategy, ~~reducing~~and ~~our~~the resources ~~current operating expenses~~ and ~~streamlining~~funding ~~our~~required ~~corporate structure. We are currently exploring alternative methods of offering liquidity~~ to ~~our~~complete ~~customers with~~ the ~~objective~~ development of ~~lowering~~eMC. ~~our~~Due ~~variable cost structure, which includes both commissions paid~~ to ~~third party liquidity providers and trading losses resulting from~~ the ~~use~~lack of ~~our~~available ~~proprietary~~external ~~trading algorithm. By lowering these variable costs~~funding, weand ~~can become more competitive in~~ the ~~pricing~~overall wemarket ~~offer~~conditions ~~our customers,~~ which we ~~believe~~believed ~~will~~would ~~substantially~~limit ~~facilitate~~the ~~both~~demand ~~new~~for ~~account~~eMC’s ~~acquisition~~products and ~~increased~~services, ~~trading~~Vie’s ~~volumes~~board ~~from~~of directors ~~our~~determined ~~existing~~not ~~customers. We also plan~~ to ~~substantially~~provide ~~reduce~~any ~~our~~additional ~~operating expenses~~funding ~~while minimally impacting our ability~~ to ~~grow revenues~~eMC. ~~The~~After ~~cost-cutting~~being ~~initiatives~~unable weto ~~are~~find ~~considering~~other ~~include~~funding ~~staff~~sources ~~reductions,~~or ~~outsourcing~~consummate ~~technology~~a ~~infrastructure,~~sale ~~replacing~~of ~~certain~~eMC ~~vendor~~to ~~agreements~~a ~~with~~third ~~less expensive alternatives~~party, ~~consolidating~~ ~~our~~eMC’s ~~current~~board ~~Philadelphia~~of ~~and~~directors ~~New~~voted ~~York~~on ~~offices,~~March ~~consolidating our corporate structure~~29, ~~disposing~~2001 ~~of certain non-core assets subject~~ to ~~creditor~~begin ~~approval, revamping~~ the ~~current~~orderly ~~compensation~~winding ~~structure, and other similar such initiatives.~~down ~~While~~of weits ~~believe this plan will enable us to continue operating until we are able to generate sufficient revenues to fund our~~ operations, ~~there~~including isterminating noall ~~assurance~~of ~~that~~its ~~the~~employees, ~~plan~~selling ~~will~~its beassets, ~~successful.~~and Ifnegotiating ~~we are unable to attain profitability or obtain additional funding in~~ the ~~near~~settlement ~~term,~~of weits ~~may~~outstanding ~~be unable to continue operating~~liabilities.

~~Basis~~The accompanying consolidated financial statements reflect eMC’s operations as discontinued operations in accordance with APB Opinion No. 30 – Reporting the Effects of ~~Presentation~~Disposal of a Segment, and

~~The~~41 consolidated financial statements have been prepared assuming that we will continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

36 Extraordinary, Unusual and Infrequently Occurring Events and Transactions. During the fiscal year ended March 31, 2002, we recorded a loss from discontinued operations of $1,161 for administrative costs, and a gain on the disposal of eMC of $667,137 as a result of the settlement of some of its obligations. During the fiscal years ended March 31, 2003 and 2004, we recorded a loss from discontinued operations of $885 and $1,826, respectively, for administrative costs. Also included in the consolidated balance sheets are eMC’s remaining net liabilities of $62,667 and $60,841 as of March 31, 2004 and 2003, respectively.

~~Table~~Use of ~~Contents~~Estimates

The ~~accounts~~preparation of ~~each~~financial ~~of our majority-owned subsidiaries~~statements, ~~Vie~~in ~~Securities,~~conformity ~~UTTC,~~with ~~and Ashton Technology~~accounting ~~Canada,~~principles ~~Inc.~~generally ~~are~~accepted ~~consolidated with those of Vie Financial Group~~ in ~~our~~the ~~consolidated~~United ~~financial~~States, ~~statements.~~requires Weus ~~generally~~to ~~account~~make ~~for~~estimates ~~investments~~and inassumptions ~~businesses~~ that weaffect ~~own~~the ~~between~~reported ~~20%~~amounts ~~and 50%~~ of ~~the~~assets ~~outstanding~~and ~~equity~~liabilities, ~~using~~ the ~~equity~~disclosure ~~method.~~of ~~Under this~~contingent ~~method,~~assets ~~the~~and ~~investment~~liabilities ~~balance, originally recorded~~ at ~~cost,~~the isdate ~~adjusted to recognize our share~~ of ~~net~~the ~~earnings~~financial statements, orand ~~losses of~~ the ~~affiliate~~reported asamounts ~~they~~of ~~occur,~~revenues ~~limited~~and toexpenses during the ~~extent~~reporting ofperiod. ~~our~~See ~~investment~~“Management’s inDiscussion and ~~advances~~Analysis to– ~~the~~Additional ~~investee.~~Factors ~~These~~That ~~adjustments are~~Could ~~included~~Affect inFuture ~~“equity~~Results” in ~~loss~~Item 7. of ~~affiliates”~~this inForm ~~our~~10-K ~~consolidated~~for ~~statements~~a discussion of ~~operations.~~some Weof ~~used~~ the ~~equity~~factors ~~method~~that tocould ~~account~~cause ~~for~~ our ~~investments~~actual inresults ~~Gomez,~~to ~~Inc.~~differ ~~and~~from ~~Kingsway-ATG~~those ~~Asia, Ltd~~estimates. ~~(KAA) (see Note 3 “Investments in Subsidiaries and Affiliated Companies”) for all periods presented.~~

~~The~~Fair ~~results~~Value of ~~operations for each of our subsidiaries and equity method investees are accounted for from their dates of formation or investment. All significant intercompany accounts and transactions between Vie~~ Financial ~~Group~~Instruments ~~and its subsidiaries are eliminated in consolidation.~~

~~Discontinued~~Substantially ~~Operations~~all of our financial instruments are carried at fair value or amounts approximating fair value. Securities owned and securities sold, not yet purchased consist entirely of highly liquid, equity securities, and are carried at quoted market prices with unrealized gains and losses included in loss on trading activities in the consolidated statements of operations. Current liabilities are carried at amounts that approximate fair value. Similarly, the estimated fair values of long-term notes approximate the principal and accrued interest amounts because the interest rates approximate those presently available for similar debt with similar terms and maturities.

~~Electronic~~Revenue ~~Market~~Recognition ~~Center~~

WeRevenues ~~formed~~earned ~~Electronic~~during ~~Market~~the ~~Center,~~fiscal ~~Inc.~~years ~~(eMC)~~ended asMarch ~~a wholly~~31, ~~owned~~2004 ~~subsidiary~~and in2003 ~~June~~consist ~~1998~~of tocommissions ~~develop,~~earned ~~operate~~on ~~and market~~ a ~~global~~per ~~electronic~~share ~~distribution~~basis from ~~channel~~our ~~for~~customers’ ~~financial~~use ~~products~~of ~~and~~our trading services. During the fiscal year ended March 31, ~~2001~~2002, ~~eMC~~we ~~focused~~generated revenues on ~~developing~~ a ~~private~~per ~~label~~transaction basis for each share traded through the eVWAP trading system and ~~rebrandable~~commission ~~global~~revenue from our ~~electronic~~customers’ ~~network~~orders ~~for~~executed ~~financial~~through ~~services~~our ~~and~~broker-dealer ~~products~~subsidiaries. ~~geared~~Our ~~primarily~~last totrade through the ~~needs~~eVWAP ofsystem ~~small~~was ~~and~~in ~~midsize~~March ~~financial~~2002, ~~intermediaries.~~and ~~eMC’s~~on ~~approach~~November ~~was~~29, to2002, ~~select~~we ~~distribution~~reached ~~partners~~an agreement with ~~existing~~the ~~brands~~Philadelphia ~~and~~Stock ~~business~~Exchange ~~models~~to ~~and~~terminate tothe ~~provide~~operation ~~them~~of athe ~~technology~~eVWAP ~~platform~~pilot ~~they~~facility. ~~could~~Our ~~leverage~~current toline ~~expand~~of ~~their~~products ~~existing~~is ~~client~~offered ~~relationships~~solely ~~and~~through ~~attract~~our ~~new~~subsidiary ~~clients~~Vie Securities.

OnTransactions ~~August 9, 2000, eMC agreed to lend TeamVest, Inc., a Delaware corporation based~~ in ~~Charlotte~~securities, ~~North~~including ~~Carolina~~commission ~~$2,000,000~~revenues ~~under a convertible loan agreement. eMC~~ and ~~TeamVest~~related ~~also~~expenses, ~~entered~~are ~~into~~recorded ~~an operating agreement~~ on ~~that~~a trade-date. Under the operating agreement, eMC gained the right to access, distribute and rebrand TeamVest’s electronic investment advice and Internet-based 401(k) investment advice programs, which eMC planned to offer as part of its distribution channelbasis. ~~The~~eVWAP ~~TeamVest~~revenues ~~loan and accrued interest~~ were ~~convertible~~recorded ~~into~~net ~~shares~~ of amounts ~~TeamVest~~paid ~~common stock at eMC’s option at any time prior~~ to ~~December 31, 2000, or automatically, thirty days after all proceeds of~~ the ~~loan~~Philadelphia ~~were~~Stock ~~drawn~~Exchange ~~down~~pursuant ~~and expended by TeamVest. On October 31, 2000, TeamVest created TeamVest Retirement Plan Services, LLC, a North Carolina limited liability company,~~ to ~~which~~our itSeptember ~~contributed~~1995 ~~its defined contribution services business~~agreement. OnUnder ~~November~~this 30agreement, ~~2000,~~ the ~~TeamVest~~Philadelphia ~~loan~~Stock ~~plus~~Exchange ~~accrued~~employed ~~interest~~the ~~was~~eVWAP ~~converted~~on ~~into~~its ~~shares~~equity-trading offloor ~~TeamVest,~~in ~~Inc.~~exchange ~~common~~for ~~stock. In addition, eMC received~~ a ~~7.4%~~portion ~~membership~~of ~~interest~~the inrevenues ~~TeamVest~~eVWAP ~~Retirement Plan Services, LLC~~generated.

InCash ~~March 2001, eMC completed its initial development phase. At that time, we conducted a review of current market conditions, eMC’s strategy,~~ and ~~the~~Cash ~~resources~~Equivalents and funding required to complete the development of eMC. Due to the lack of available external funding, and the overall market conditions which we believed would limit the demand for eMC’s products and services, Vie’s board of directors determined not to provide any additional funding to eMC. After being unable to find other funding sources or consummate a sale of eMC to a third party, eMC’s board of directors voted on March 29, 2001 to begin the orderly winding down of its operations, including terminating all of its employees, selling its assets, and negotiating the settlement of its outstanding liabilities.

~~The~~We ~~accompanying~~consider ~~consolidated financial~~all ~~statements~~cash ~~reflect~~and ~~eMC’s~~highly ~~operations~~liquid asinvestments ~~discontinued operations in accordance~~ with ~~APB~~maturities ~~Opinion No. 30—Reporting the Effects~~ of ~~Disposal~~three months ofor aless ~~Segment,~~to ~~and~~be ~~Extraordinary,~~cash ~~Unusual and Infrequently Occurring Events and Transactions~~equivalents. ~~During~~Cash ~~the year ended March 31~~equivalents, ~~2001,~~which weconsist ~~recorded a loss from discontinued operations totaling $2,596,006,~~ primarily ~~for salaries, benefits, and consulting fees for the people hired to develop the technology platform. We also recorded a loss on the disposal~~ of ~~eMC~~money ~~during~~market ~~the year ended March 31~~accounts, ~~2001~~are ofcarried ~~$3,145,926,~~at ~~including $63~~cost,~~423~~ inwhich ~~severance~~approximates ~~payments,~~market ~~and $3,082,503 in write-offs of eMC’s assets~~value. ~~The write-offs included~~

37Accounts Receivable and Concentration of Credit Risk

~~Table~~Receivables from brokers, dealers and other consist of ~~Contents~~commissions receivable and amounts receivable for securities transactions that have not yet reached their contractual settlement date. Vie Securities clears all securities transactions through another broker-dealer on a fully disclosed basis.

~~$2,033,088~~42 related to eMC’s investments in TeamVest, approximately $796,000 in system development costs, and approximately $254,000 related to software, computer equipment, prepayments and other assets. During the year ended March 31, 2002, we recorded a loss from discontinued operations of $1,161 for administrative costs, and a gain on the disposal of eMC of $667,137 as a result of the settlement of some of its obligations. During the year ended March 31, 2003, we recorded a loss from discontinued operations of $885 for administrative costs. Also included in the consolidated balance sheets are eMC’s remaining net liabilities of $60,841, $59,956 and $806,030 as of March 31, 2003, 2002 and 2001, respectively.

~~Computer~~During ~~Science~~the ~~Innovations~~fiscal year ended March 31, ~~Inc~~2004, one customer individually accounted for 21% of our revenues, while three customers individually accounted for 33%, 22% and 10%, respectively, of our revenues during the fiscal year ended March 31, 2003, and two customers individually accounted for 57% and 18%, respectively, of our revenues during the fiscal year ended March 31, 2002. We can give no assurance that these customers will continue to do business with us. If we are unable to achieve and maintain a diversified customer base sufficient to reduce the risk related to the concentration of our revenues from a small number of customers, then the loss of individual customers may materially and adversely affect our business, financial condition and results of operations.

~~On November~~In 4,the ~~1997~~normal course of business, ~~Vie~~we ~~sold~~are ~~its~~involved ~~majority-owned~~in ~~subsidiary,~~the ~~Computer~~execution ~~Science~~of ~~Innovations,~~various ~~Inc.~~customer ~~(“CSI®”)~~securities transactions. ~~CSI®~~Securities transactions ~~was~~are ~~sold~~subject to athe ~~trust~~credit ~~created~~risk byof ~~the~~counter ~~CSI®~~party ~~leveraged~~or ~~ESOP~~customer nonperformance. InHowever, ~~connection~~transactions ~~with~~are collateralized by the ~~sale~~underlying security, wethereby ~~received~~reducing, ~~cash~~but not eliminating, the ~~forgiveness~~associated ofrisk ~~amounts~~to ~~due~~changes toin the market value ~~CSI®,~~of ~~and~~the asecurity ~~$594,125~~through ~~five-year~~the ~~8¼%~~settlement ~~note~~date. OnTherefore, ~~October~~the 3,settlement ~~2001,~~of ~~Vie~~these ~~accepted~~transactions ~~$125~~is not expected to have a material effect on our financial position. Additionally,~~000~~ ~~in full~~it ~~satisfaction~~is ofour policy to review the ~~note~~credit ~~balance~~worthiness of ~~$161,215,~~all counter parties and ~~recorded~~customers aprior ~~loss~~to ofengaging ~~$36,215~~in transactions with them.

~~Use~~Property ofand Equipment ~~Estimates~~

~~The~~Property ~~preparation~~and ofequipment ~~financial statements,~~are inrecorded ~~conformity~~at ~~with~~cost ~~accounting~~and are ~~principles~~depreciated ~~generally~~using ~~accepted in~~ the ~~United~~straight-line ~~States,~~method ~~requires~~over usthe toestimated ~~make~~useful ~~estimates~~lives ~~and~~of ~~assumptions that affect~~ the ~~reported amounts of~~ assets ~~and~~(generally ~~liabilities,~~three ~~the~~to ~~disclosure~~five ofyears). ~~contingent~~Leasehold ~~assets~~improvements ~~and liabilities~~are atamortized over the ~~date~~lesser of the ~~financial~~term ~~statements,~~of ~~and~~ the ~~reported~~lease ~~amounts~~or ~~of revenues and expenses during~~ the ~~reporting~~estimated ~~period.~~useful ~~See~~life ~~“Management’s Discussion and Analysis—Additional Factors That Could Affect Future Results” in Item 7.~~ of ~~this Form 10-K for a discussion of some of~~ the ~~factors that could cause our actual results to differ from those estimates~~leasehold improvements.

~~Reclassifications~~Net Loss per Share

~~Certain~~Net ~~reclassifications~~loss ~~have~~per ~~been~~share ~~made~~is computed in ~~the~~accordance ~~consolidated~~with ~~financial~~SFAS ~~statements~~No. to128, ~~prior~~Earnings per ~~year~~Share. ~~amounts~~SFAS to128 ~~conform~~requires companies to present basic and diluted earnings per share. Basic earnings per share excludes the ~~current~~dilutive ~~year’s~~effect of outstanding stock options, warrants and convertible securities, whereas diluted earnings per share ~~presentation~~includes the effect of such items. The effect of potential common stock is not included in diluted earnings per share for the fiscal years ended March 31, 2004, 2003 and 2002, because we incurred net losses; therefore, the effect of the dilutive securities is anti-dilutive in those years.

~~Fair~~Common ~~Value~~Stock ofReverse ~~Financial Instruments~~ Split

~~Substantially~~On ~~all~~April of8, 2004, our ~~financial~~stockholders ~~instruments~~approved ~~are~~a ~~carried at fair value or~~1-for-100 ~~amounts~~reverse ~~approximating~~stock ~~fair~~split ~~value.~~of ~~Securities~~our ~~owned~~common ~~and securities sold~~stock, ~~not~~which ~~yet~~became ~~purchased~~effective ~~consist~~April ~~entirely of highly liquid~~20, ~~equity~~2004. ~~securities,~~All ~~and~~references ~~are carried at quoted market prices with unrealized gains and losses included~~ in ~~loss on trading activities in~~ the consolidated financial statements ofto ~~operations.~~common ~~Current~~shares ~~liabilities~~and ~~are~~common ~~carried~~stock atoptions ~~amounts~~have ~~that~~been ~~approximate~~adjusted ~~fair~~retroactively ~~value.~~for ~~Similarly,~~ the ~~estimated fair values of long-term notes approximate the carrying amounts because the interest rates approximate those presently available for similar debt with similar terms and maturities~~split.

~~Revenue~~Foreign ~~Recognition~~Currency Translation

~~Revenues~~Assets ~~earned~~and ~~during~~liabilities ~~the~~denominated ~~year~~in ~~ended~~non-U.S. ~~March~~currencies ~~31,~~are ~~2003~~translated ~~consist~~at rates of ~~commissions~~exchange ~~earned~~prevailing onat athe ~~per~~end ~~share basis from our customers’ use~~ of ~~our trading services. During~~ the ~~years ended March 31~~period, ~~2002~~ and ~~March 31, 2001, we generated~~ revenues ~~on a per transaction basis for each share traded through the eVWAP trading system~~ and ~~commission~~expenses ~~revenue~~are ~~from~~translated ~~our~~at ~~customers’~~average ~~orders~~rates ~~executed~~of ~~through~~exchange ~~Vie~~during ~~Institutional~~the ~~Services~~period. ~~Our~~Gains ~~last~~or ~~trade~~losses ~~through~~on ~~the~~translation ~~eVWAP~~of ~~system~~the ~~was~~financial instatements ~~March~~of ~~2002,~~a ~~and~~foreign ~~on November 29~~operation, ~~2002,~~where ~~we reached an agreement with~~ the ~~Philadelphia~~functional currency ~~Stock~~is ~~Exchange~~other tothan ~~terminate~~ the ~~operation~~U.S. ofdollar, ~~the~~are ~~eVWAP~~reflected ~~pilot~~as ~~facility.~~a ~~Our~~component ~~current line~~ of ~~products~~accumulated isother ~~offered~~comprehensive ~~directly~~loss ~~through~~in our ~~subsidiaries~~consolidated ~~Vie~~statements ~~Institutional~~of ~~Services~~stockholders’ ~~and Vie Securities~~deficiency.

~~Transactions in securities, including commission revenues and related expenses, are recorded on a trade~~Stock-~~date~~Based ~~basis.~~Compensation ~~eVWAP revenues were recorded net of amounts paid to the Philadelphia Stock Exchange pursuant to our September 1995 agreement. Under this agreement, the Philadelphia Stock Exchange~~

38We use the intrinsic value-based method to account for stock options issued to employees and have adopted the disclosure-only alternative of SFAS No. 123 “Accounting for Stock-Based Compensation”, as amended by SFAS No. 148, “Accounting for Stock-Based Compensation”. We are required to disclose the pro forma effects on results of operations as if we had elected to use the fair value approach to account for all our stock-based employee compensation plans. We recorded a non-cash compensation charge of $621,224 during the fiscal year ended March 31, 2004 for the cost of 245,642 stock options that were granted to members of the board of directors and an outside advisor to

~~Table~~43 ~~of Contents~~

~~employed~~the company on February 3, 2004. The options were granted with strike prices below the ~~eVWAP~~market value of our common stock on ~~its~~the ~~equity-trading~~date ~~floor~~of ingrant. ~~exchange~~If ~~for~~we ahad elected ~~portion~~to recognize compensation cost based on the fair value of all options granted to directors and employees at the ~~revenues~~grant ~~eVWAP~~date ~~generated~~as prescribed by SFAS No. 123, net loss per share would have been adjusted to the pro forma amounts indicated in the table below:

Cash and Cash Equivalents


	As Reported
	For the year ended March 31,
	2004			2003			2002
Net loss – as reported	$	(10,118,520	)	$	(12,077,066	)	$	(11,755,074	)
Stock based employee compensation cost	$	(3,050,848	)	$	(1,470,641	)	$	(1,123,444	)

Net loss – pro forma	$	(13,169,368	)	$	(13,547,707	)	$	(12,878,518	)

PER SHARE DATA
Basic and diluted
Net loss per common share – as reported	$	(2.16	)	$	(1.93	)	$	(28.76	)

Net loss per common share – pro forma	$	(2.60	)	$	(2.16	)	$	(31.21	)

WeThe ~~consider~~assumptions ~~all~~we used ~~cash~~to ~~and~~calculate ~~highly~~the ~~liquid~~fair ~~investments~~values ~~with~~of ~~maturities~~options ofissued ~~three months~~to oremployees ~~less~~during tothe befiscal ~~cash~~year ~~equivalents.~~ended ~~Cash~~March ~~equivalents~~31, ~~which~~2004 ~~consist~~include: ~~primarily~~(i) a risk-free interest rate of ~~money~~1.4%, ~~market~~(ii) ~~accounts~~an average expected life of 4.9 years, ~~are~~(iii) ~~carried~~average atstock ~~cost~~volatility of 418%, ~~which~~(iv) expected ~~approximates~~stock ~~market~~dividends ~~value~~of zero, and (iv) an average turnover rate of 5.81%.

~~Accounts~~2. ~~Receivable~~RECENT ~~and~~ACCOUNTING ~~Concentration of Credit Risk~~ PRONOUNCEMENTS

~~Receivables~~In ~~from~~July ~~brokers~~2002, ~~dealers~~the Financial Accounting Standards Board (FASB) issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS 146 addresses financial accounting and ~~other~~reporting ~~consist~~for ofcosts ~~commissions~~associated ~~receivable~~with exit or disposal activities and ~~amounts~~nullifies ~~receivable~~EITF Issue No. 94-3, Liability Recognition for ~~securities~~Certain ~~transactions~~Employee ~~that~~Termination ~~have~~Benefits ~~not~~and ~~yet~~Other ~~reached~~Costs to Exit ~~their~~an ~~contractual~~Activity ~~settlement~~(including ~~date~~Certain Costs Incurred in a Restructuring). ~~Vie~~The ~~Institutional~~principal ~~Services~~difference between SFAS 146 and ~~Vie~~EITF ~~Securities~~94-3 ~~clear~~relates ~~all~~to ~~securities~~SFAS ~~transactions~~146’s ~~through~~timing ~~another~~for ~~broker-dealer~~recognition onof a ~~fully~~liability ~~disclosed~~for ~~basis~~a cost associated with an exit or disposal activity. SFAS ~~Receivables~~146 ~~from~~requires ~~brokers,~~that ~~dealers~~a ~~and~~liability ~~other~~for ~~also~~a ~~included~~cost ~~$0,~~associated ~~$4,798~~with ~~and $66,695~~an ~~due~~exit ~~from~~or disposal activity be recognized when the ~~Philadelphia~~liability ~~Stock~~is ~~Exchange~~incurred. Under EITF 94-3, a liability for ~~eVWAP~~an ~~revenues~~exit cost as generally defined in EITF 94-3 was recognized at the date of ~~March~~an entity’s commitment to an exit plan. The requirements of SFAS 146 were effective prospectively for exit or disposal activities initiated after December 31, ~~2003,~~ 2002. ~~and~~Adoption ~~2001~~of SFAS 146 did not have a significant effect our financial position, results ~~respectively~~of operations, or cash flows.

~~During~~In December 2002, the FASB ~~year~~issued ~~ended~~Statement ~~March~~of ~~31,~~Financial ~~2003~~Accounting ~~three~~Standards ~~customers~~No. ~~individually~~148, ~~accounted~~Accounting for ~~approximately~~Stock-Based ~~33%,~~Compensation ~~22%~~— Transition and ~~10%,~~Disclosure ~~respectively~~(SFAS 148). SFAS 148 amends SFAS 123, ofAccounting ~~our~~for ~~revenues~~Stock-Based Compensation, ~~while~~to ~~only~~provide ~~two~~alternative ~~customers~~methods ~~accounted~~of transition for ~~approximately~~a ~~57%~~voluntary ~~and~~change ~~18%,~~to ~~respectively,~~the fair value method of ~~our~~accounting ~~revenues~~for ~~during~~stock-based ~~the~~employee ~~year~~compensation. ~~ended~~SFAS ~~March~~148 ~~31,~~also ~~2002.~~amends Wethe ~~can~~disclosures ~~give~~in noboth ~~assurance~~annual ~~that~~and ~~these~~interim ~~customers~~financial ~~will~~statements ~~continue~~about the method used to account dofor ~~business~~stock-based ~~with~~employee ~~us.~~compensation Ifand wethe ~~are~~effect ~~unable~~of tothe ~~achieve~~method ~~and maintain~~used aon ~~diversified~~reported ~~customer~~results. ~~base~~We ~~sufficient~~will continue to ~~reduce~~apply ~~the~~Accounting ~~risk~~Principles ~~related~~Board toOpinion ~~the~~No. ~~concentration~~25 ofas ~~our~~the ~~revenues~~method ~~from~~used ato ~~small~~account ~~number~~for ofstock-based ~~customers~~compensation, ~~then~~where applicable, but have adopted the ~~loss~~disclosure requirements of ~~individual~~SFAS ~~customers~~148. ~~may~~This ~~materially~~adoption ~~and~~had ~~adversely~~no ~~affect~~impact on our ~~business,~~ financial condition ~~and~~or ~~operating~~ results of operations.

In ~~the~~January ~~normal course of business~~2003, ~~we are involved in~~ the ~~execution~~FASB ofissued ~~various~~FASB ~~customer~~Interpretation ~~securities transactions~~No. ~~Securities~~46 ~~transactions~~(FIN ~~are~~46), ~~subject~~Consolidation ~~to the credit risk~~ of ~~counter~~Variable ~~party~~Interest ~~or customer nonperformance~~Entities. ~~However,~~This ~~transactions~~interpretation ~~are collateralized by the underlying~~provides ~~security,~~guidance ~~thereby~~on ~~reducing~~how ~~the~~to ~~associated~~identify ~~risk~~a tovariable ~~changes~~interest inentity ~~the~~and ~~market~~determine ~~value~~when of the ~~security~~assets, ~~through~~liabilities, ~~the~~non-controlling ~~settlement~~interests, ~~date.~~and ~~Therefore,~~results ~~the~~of ~~settlement~~operations of ~~these~~a ~~transactions~~variable isinterest ~~not~~entity ~~expected~~need to ~~have~~be aincluded ~~material~~in ~~effect~~a oncompany’s ~~our~~consolidated financial ~~position.~~ ~~Additionally,~~statements. itThe isnew ~~our policy to review the credit worthiness of all counter parties and customers prior to engaging in transactions with them.~~

~~Capitalized~~44 ~~Software Development Costs~~

In accounting ~~accordance~~provisions ~~with~~of ~~AICPA~~this ~~Statement~~interpretation ofbecame ~~Position~~effective ~~No.~~upon ~~98-1~~issuance ~~Accounting~~ for ~~the~~all ~~Costs~~new ofvariable ~~Computer~~interest ~~Software~~entities ~~Developed~~created orafter ~~Obtained~~January ~~for~~31, ~~Internal Use~~2003, ~~the~~and to ~~costs~~variable ofinterest ~~software~~entities ~~developed~~in ~~for~~which ~~internal~~an ~~use~~enterprise ~~incurred~~obtains ~~during~~an ~~the~~interest ~~preliminary~~after ~~project~~that ~~stage are expensed as incurred~~date. ~~Direct~~It ~~costs~~applies ~~incurred~~to ~~during~~ the ~~application~~first ~~development~~fiscal ~~stage~~year ~~are~~or ~~capitalized.~~interim ~~Costs~~period ~~incurred~~beginning ~~during~~after ~~the post-implementation/~~June ~~operation~~15, ~~stage~~2003, ~~are~~to ~~expensed~~variable asinterest ~~incurred.~~entities ~~During~~in ~~the~~which ~~year~~an ~~ended~~enterprise ~~March~~holds 31a ~~2001,~~variable interest wethat ~~capitalized~~it ~~$19,897,~~acquired inbefore ~~costs~~February ~~for financial software developed for internal use~~1, ~~which we amortized over two years~~2003. WeThe ~~did~~adoption ~~not~~of ~~capitalize~~FIN ~~any software~~46 ~~development~~will ~~costs~~have ~~during~~no ~~the~~impact ~~years~~on ~~ended~~our ~~March~~results ~~31,~~of ~~2003~~operations ~~and~~or ~~2002~~financial position.

~~Property~~3. ~~and~~INVESTMENTS ~~Equipment~~IN SUBSIDIARIES AND AFFILIATED COMPANIES

~~Property~~Vie ~~and~~Securities ~~equipment are~~LLC recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the assets (generally three to five years). Leasehold improvements are amortized over the lesser of the term of the lease or the estimated useful life of the leasehold improvements.

~~Net~~On ~~Loss~~March ~~per~~31, ~~Share~~2000, we agreed to purchase the assets of a broker-dealer, Hudson Knights Securities, LLC, a proprietary trading firm and member of the Philadelphia Stock Exchange. On July 25, 2000, we completed the purchase of Hudson Knights Securities, LLC, and formed ATG Trading, LLC. We issued 300 shares of our common stock to effect the acquisition. On October 9, 2002, we changed the name of ATG Trading, LLC to Vie Securities LLC. Vie Securities is now our sole operating entity.

~~Net~~Ashton ~~loss~~Technology ~~per share is computed in accordance with SFAS No. 128~~Canada, ~~Earnings per Share~~Inc. SFAS 128 requires companies to present basic and diluted earnings per share. Basic earnings per share excludes the dilutive effect of outstanding stock options, warrants and convertible securities, whereas diluted earnings

39In December 1999, we entered into an agreement to create Ashton Canada to develop, market and operate intelligent matching, online transaction systems and distribution systems for use by U.S. and Canadian financial intermediaries. On June 7, 2000, Ashton Canada entered into an agreement with the Toronto Stock Exchange to market, deploy, and operate eVWAP, as a facility of the Toronto Stock Exchange for Canadian securities. The Toronto Stock Exchange deferred implementing eVWAP in 2002, and Ashton Canada reduced its expenses and staffing to address the reduced prospects for near-term revenues from such a facility.

~~Table~~On June 11, 2003 Ashton Canada filed an arbitration claim against the Toronto Stock Exchange for breach of ~~Contents~~contract under the June 7, 2000 agreement to introduce the eVWAP trading system. The arbitration claim states that Ashton Canada designed, developed and was prepared to deploy eVWAP as a facility of the primary Canadian exchange when the Toronto Stock Exchange circumvented the deployment of eVWAP without proper excuse. The Ashton Canada arbitration claim was filed in Toronto, Ontario and seeks substantial damages. Ashton Canada is no longer operational, has no employees, and currently has the sole objective of focusing on the arbitration claim with the Toronto Stock Exchange.

We provided ~~per~~the ~~share~~initial ~~includes~~funding for Ashton Canada on December 20, 1999 with $333,400 in cash for 51% of the ~~effect~~voting equity, and subsequently funded an additional $1,542,930 as of ~~such~~March ~~items~~31, 2004. ~~The~~In ~~effect~~connection with the agreement to form Ashton Canada, we issued series K warrants to purchase 5,000 shares of ~~potential~~our common stock isat ~~not~~an ~~included~~exercise inprice ~~diluted~~of ~~earnings~~$250 per share to TK Holdings, Inc. The warrants were exercisable for ~~the~~a period of two years ~~ended~~beginning ~~March~~on 31June 4, 2000. The series K warrants began vesting in ~~2003~~quarterly installments on December 20, ~~2002~~2000, and were fully vested on September 30, 2001. During the fiscal year ended March 31, ~~because~~2002 we ~~incurred~~recorded ~~net~~a ~~losses;~~dividend ~~therefore~~of $1,024,900 upon vesting of the ~~effect~~series K warrants. Vie received 3,095 of the ~~dilutive~~series ~~securities~~K warrants isfrom ~~anti-dilutive~~TK Holdings in ~~those~~an ~~years~~exchange on September 24, 2001. This exchange increased our ownership in Ashton Canada from 51% of the voting equity to 90%.

~~UTTC~~Kingsway-ATG ~~Common~~Asia, ~~Stock~~Ltd. ~~Reverse Split~~

On ~~April~~December 716, ~~2000~~1999, ~~the~~we ~~Board~~signed ofa ~~Directors~~joint ofventure ~~UTTC~~agreement ~~approved~~with aKingsway ~~three-for-four~~International ~~reverse~~to ~~stock~~create ~~split~~Kingsway-ATG Asia, ~~effective~~Ltd. ~~April~~(KAA). 10On January 13, 2000, Vie purchased 47,000,000 shares of KAA’s voting common stock for $1,000,000 for a 47% interest in KAA. ~~All~~Because ~~references~~we own less than 50% of the equity of KAA, we account for our investment in KAA under the equity method. Our investment in KAA, ~~consolidated~~originally ~~financial~~recorded ~~statements~~at cost, has been adjusted to ~~UTTC~~recognize ~~common~~our ~~shares~~share ~~and~~of ~~common~~KAA’s ~~stock~~net ~~options~~losses. ~~have~~The ~~been~~balance ~~adjusted~~of ~~retroactively~~our ~~for~~investment ~~the~~in ~~split~~KAA at was $0 at March 31, 2004 and 2003.

~~Foreign~~On ~~Currency~~January ~~Translation~~30, 2002, we entered into an “Agreement For Sale And Purchase Of Shares in Respect of the Shares in Kingsway-ATG Asia Limited” with HK Weaver Group, Inc., a British Virgin Islands company formerly known as Kingsway Electronic Services, Limited. Pursuant to the agreement, we sold

~~Assets~~45 and liabilities denominated in non-U.S. currencies are translated at rates of exchange prevailing at the end of the period, and revenues and expenses are translated at average rates of exchange during the period. Gains or losses on translation of the financial statements of a foreign operation, where the functional currency is other than the U.S. dollar, are reflected as a component of accumulated other comprehensive loss in our consolidated statements of stockholders’ (deficiency) equity.

~~Stock~~ all of our KAA shares to HK Weaver in exchange for a HK$23,400,000 zero-~~Based~~coupon ~~Compensation~~note, effective as of May 7, 2002. On October 3, 2002, we entered into a “Deed of Novation” allowing HK Weaver to assign its rights under the agreements to Weaver Capital Limited, a wholly owned subsidiary of Weaver International Limited. The note was convertible into Weaver Capital or Weaver International common stock upon an IPO of either entity and listing of such stock on the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong. Since the Weaver International shares were not listed on GEM by the deadline of December 31, 2003, our sole recourse is to redeem the note and receive the return of our KAA shares. Because of the uncertainty as to the IPO of Weaver Capital or Weaver International, we determined the fair value of our investment in KAA is $0, and we recorded a loss during the fiscal year ended March 31, 2003 of $189,653.

WeGomez, ~~have elected to apply APB Opinion No~~Inc. ~~25 and related interpretations in accounting for stock options issued to employees. If we had elected to recognize compensation cost based on the fair value of the options granted to directors and~~ ~~employees at the grant date as prescribed by SFAS No. 123, net loss per share would have been adjusted to the pro forma amounts indicated in the table below:~~

	As Reported
	For the year ended March 31,
	2003			2002			2001
Reported net loss	$	(12,077,066	)	$	(11,755,074	)	$	(20,938,349	)
Compensation cost	$	(1,470,641	)	$	(1,123,444	)	$	(1,204,925	)
Pro forma net loss	$	(13,547,707	)	$	(12,878,518	)	$	(22,143,274	)
Pro forma net loss per share	$	(0.02	)	$	(0.28	)	$	(0.83	)

Gomez, Inc. was one of our majority-owned subsidiaries until December 1999, when our equity ownership of Gomez decreased to less than 50% of the total outstanding equity. As of December 31, 1999, we began accounting for our equity investment in Gomez under the equity method of accounting due to the decrease in ownership and our reduced representation on Gomez’s board. On November 7, 2001, Gomez completed the sale and transfer of substantially all of its assets and liabilities to GZ Advisors, Inc. Gomez, Inc. was then liquidated and GZ Advisors, Inc. was renamed Gomez, Inc. Our equity investment in the new Gomez, Inc. consists of common stock representing less than 1% of the fully diluted ownership.

~~The~~In ~~fair~~July ~~value~~2001, Gomez raised approximately $1 million of ~~stock~~ ~~options~~capital ~~granted~~through ~~during~~their ~~the~~issuance ~~years~~of ~~ended~~senior ~~March~~secured ~~31,~~notes. ~~2003,~~We participated ~~2002~~in ~~and~~that ~~2001~~financing ~~was~~in the amount of $~~504~~38,~~698~~633, $which is convertible into approximately 1.4% of the fully diluted common stock of Gomez,~~219~~ Inc. The balance of the note and accrued interest thereon of $~~382~~41,~~583~~289 was included in the caption investments in and advances to affiliates on our March 31, ~~respectively~~2002 consolidated balance sheet. ~~The~~Pursuant ~~assumptions~~to weEITF ~~used~~99-10, Percentage Used to ~~calculate~~Determine the ~~fair~~Amount ~~values~~ of ~~options~~Equity ~~issued~~Method toLosses, ~~employees~~ during the fiscal year ended March 31, 2003 we recognized our ~~include:~~share ~~(i)~~of aGomez’s ~~risk-free~~losses ~~interest~~to ~~rate~~the extent of ~~2.1%,~~our ~~(ii)~~advances anand ~~expected~~accrued ~~life~~interest in the amount of 4$45,153.72 ~~years,~~The ~~(iii)~~notes ~~expected~~were ~~stock~~converted ~~volatility~~into common stock of ~~15%~~Gomez, ~~and~~Inc. ~~(iv)~~during ~~expected~~the ~~stock~~fiscal ~~dividends~~year ofended ~~zero~~March 31, 2004.

24. ~~RECENT~~PROPERTY ~~ACCOUNTING~~AND ~~PRONOUNCEMENTS~~EQUIPMENT

InProperty ~~December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation—Transition~~ and ~~Disclosure (SFAS 148). SFAS 148 amends SFAS 123~~equipment, ~~Accounting~~at ~~for Stock-Based Compensation~~cost, toconsist ~~provide alternative methods~~ of ~~transition for a voluntary change to~~ the ~~fair~~following value method of accounting for stock-based employee compensation. SFAS 148 also amends the disclosures in both annual and interim financial statements about the method used to account for stock-based employee compensation and the effect of the method used on reported results. We will continue to apply Accounting Principles Board Opinion No. 25 as ~~the method used to account for stock-based compensation, where applicable, but have adopted the disclosure requirements~~ of ~~SFAS 148 for the year ended~~ March 31, ~~2003.~~2004 ~~This~~and ~~adoption~~2003: ~~had no impact on our financial condition or results of operations.~~


	March 31,						Estimated Useful Life
	2004			2003
Office equipment	$	50,325		$	132,527		3 - 5 years
Computer equipment		133,481			1,459,714		3 years
Computer software		56,074			126,693		3 years
Furniture and fixtures		33,552			596,061		5 years
Leasehold improvements		1,160			312,995		Term of lease

		274,592			2,627,990
Less accumulated depreciation		(154,057	)		(1,816,651	)

Property and equipment, net	$	120,535		$	811,339

~~Table~~46 ~~of Contents~~

~~In January 2003, the FASB issued FASB Interpretation No~~5. 46SECURITIES ~~(FIN 46)~~OWNED, ~~Consolidation~~SECURITIES ~~of Variable Interest Entities. This interpretation provides guidance on how to identify a variable interest entity and determine when the assets~~SOLD, ~~liabilities,~~NOT ~~non-controlling~~YET ~~interests,~~PURCHASED ~~and~~AND ~~results~~OTHER of operations of a variable interest entity need to be included in a company’s consolidated financial statements. The new accounting provisions of this interpretation became effective upon issuance for all new variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies to the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. The adoption of FIN 46 will have no impact on our results of operations or financial position. INVESTMENTS

3.Securities ~~INVESTMENTS~~Owned INand ~~SUBSIDIARIES~~Securities ~~AND~~Sold, ~~AFFILIATED~~Not ~~COMPANIES~~Yet Purchased

~~Vie~~The ~~Securities~~balance ~~LLC~~of securities owned and securities sold, not yet purchased as of March 31, 2004 and 2003 consist of the following:

On March 31, 2000, we agreed to purchase the assets of a broker-dealer, Hudson Knights Securities, LLC, a proprietary trading firm and member of the Philadelphia Stock Exchange. On July 25, 2000, we completed the purchase of Hudson Knights Securities, LLC, and formed ATG Trading, LLC. We issued 30,000 shares of our common stock to effect the acquisition and recorded a charge of $106,875 for the issuance of the shares during the year ended March 31, 2001. On October 9, 2002, we changed the name of ATG Trading, LLC to Vie Securities LLC.


	Securities Owned				Securities Sold, Not Yet Purchased
	2004		2003		2004		2002
Common stock	$	17,244	$	7,114	$	103,902	$	353,604

~~Vie~~Other ~~Securities~~Investments is our principal trading entity that provides liquidity to our broker-dealer customers, including Vie Institutional Services, Inc. Using our trading algorithm, which we began using in September 2002, we attempt to achieve the volume-weighted average price (VWAP) that we are giving to our customers in order to minimize the cost of providing them liquidity. During the years ended March 31, 2002 and 2001, Vie Securities provided liquidity to participants in eVWAP and provided our management with real-time experience with volume-weighted average price trading and risk management techniques. We recorded losses on proprietary trading activities of $1,294,917, $375,480 and $335,137 during the years ended March 31, 2003, 2002 and 2001, respectively.

~~Ashton~~On ~~Technology~~February 6, 2001, we made a $1,500,000 equity investment in JAGfn Broadband, LLC. On September 24, 2001, we entered into an exchange agreement with the UTTC series TK preferred stock investors. We exchanged our investment in JAGfn for 72,850 shares of series TK preferred stock, all of the outstanding 200,000 series T warrants, 309,500 of the 500,000 outstanding series K warrants, and an additional 39,000 shares of the class B common stock of Ashton Canada. As a result of this exchange, ~~Inc~~we recorded a reduction in other assets of $1,500,000, a reduction in minority interest of $1,000,000 and a loss of $500,000 during the fiscal year ended March 31, 2002.

~~In December 1999, we entered into an agreement to create Ashton Canada to develop, market and operate intelligent matching, online transaction systems and distribution systems for use by U~~6.S. ~~and~~EXCHANGE Canadian financial intermediaries. On June 7, 2000, Ashton Canada entered into an agreement with the Toronto Stock Exchange to market, deploy, and operate eVWAP, as a facility of the Toronto Stock Exchange for Canadian securities. The Toronto Stock Exchange deferred implementing eVWAP in 2002, and Ashton Canada reduced its expenses and staffing to address the reduced prospects for near-term revenues from such a facility. MEMBERSHIPS

OnAs ~~June~~of 11March 31, ~~2003~~2004 ~~Ashton~~we ~~Canada~~do ~~filed~~not anown ~~arbitration~~any ~~claim~~exchange ~~against~~memberships. ~~the~~As ~~Toronto~~ of March 31, 2003, we owned two Philadelphia Stock Exchange ~~for~~memberships ~~breach~~through ofVie Securities ~~contract~~and ~~under~~Vie ~~the~~Institutional ~~June~~Services. 7,In July 2000, ~~agreement~~Vie toSecurities ~~introduce~~purchased ~~the~~an ~~eVWAP~~exchange ~~trading~~membership ~~system.~~with ~~The~~options ~~arbitration~~trading ~~claim~~privileges ~~states~~for ~~that~~$90,000 ~~Ashton~~in ~~Canada~~cash. ~~designed~~In January 2000, ~~developed~~Vie ~~and~~Institutional ~~was~~Services ~~prepared~~purchased toa ~~deploy~~regular ~~eVWAP~~exchange asmembership afor $69,752 ~~facility~~in ofcash. We sold the ~~primary~~Vie ~~Canadian~~ Institutional Services exchange ~~when~~membership ~~the~~in ~~Toronto~~November ~~Stock~~2003 ~~Exchange~~for ~~circumvented~~$5,000, and reduced the ~~deployment~~value of ~~eVWAP~~our ~~without~~Vie ~~proper~~Securities ~~excuse~~membership to its estimated fair value. The ~~Ashton~~resulting ~~Canada~~loss ~~arbitration~~of ~~claim~~$142,752 ~~was~~is ~~filed~~included in ~~Toronto,~~the restructuring ~~Ontario~~charge ~~and~~on ~~seeks~~our ~~substantial~~March ~~damages~~31, 2004 statement of operations. ~~Ashton~~Our ~~Canada~~Vie isSecurities nomembership ~~longer~~was ~~operational,~~converted ~~has~~into ~~no employees~~shares upon the demutualization of the Philadelphia Stock Exchange in January 2004, and ~~currently~~is ~~has~~recorded ~~the~~at ~~sole~~its ~~objective~~estimated fair value of $12,000 ~~focusing~~as ona ~~the~~component ~~arbitration~~of ~~claim~~other ~~with~~assets on the ~~Toronto~~March ~~Stock~~31, ~~Exchange~~2004 balance sheet.

WeOn ~~provided~~January ~~the initial funding for Ashton Canada on December 20~~23, ~~1999 with $333~~2002,~~400~~ inREB ~~cash~~sold ~~for~~its ~~51%~~membership ofseat ~~the~~that ~~voting~~it ~~equity,~~purchased ~~and~~in ~~subsequently funded an additional $1,366,628 as of~~ March ~~31,~~1999 ~~2003. In connection with the agreement to form Ashton Canada, we issued series K warrants to purchase 500,000 shares of our common stock~~ at ana ~~exercise~~cost ~~price~~ of $2196,900.50 ~~per~~REB ~~share~~received toproceeds TKof ~~Holdings~~$105,000 ~~Inc.~~and ~~The~~recorded ~~warrants were exercisable for~~ a ~~period~~loss of ~~two years beginning on June 4~~$91,900, ~~2000.~~which ~~The~~is ~~series~~included ~~K warrants began vesting~~ in ~~quarterly~~other ~~installments~~income (expense) on the ~~December~~March 2031, ~~2000,~~2002 ~~and~~statement ~~were~~of ~~fully vested on September 30, 2001~~operations. ~~During each~~

417. RESTRUCTURING CHARGES AND RELATED LIABILITIES

~~Table~~During the first quarter of ~~Contents~~the fiscal year ended March 31, 2004, we began implementing a plan to streamline our corporate organizational structure, reduce our operating expenses and reduce the cost of providing liquidity to our customers. Since then, we have made substantial progress by merging a number of our wholly-owned subsidiaries and consolidating our physical locations, resulting in ongoing operating cost reductions. Effective as of October 1, 2003, we consolidated our Philadelphia and New York offices by relocating our corporate headquarters and all operations to offices in the Grace Building, 1114 Avenue of the Americas, 22nd Floor, New York, New York, which we have occupied since June 2002. On June 3, 2004, we completed an agreement to sublease our prior headquarters space at 1835 Market Street, Philadelphia, Pennsylvania. Additionally, in September 2003, we instituted salary reductions for executives and a majority of non-executive employees. We also reduced our headcount by 44% to 23 employees during the fiscal year ended March 31, 2004.

ofIn ~~the~~connection ~~years~~with ~~ended~~this ~~March 31~~restructuring, ~~2002 and 2001,~~ we recorded acharges ~~dividend~~ of $1,~~024~~352,~~900~~406 ~~upon~~during ~~vesting~~the offiscal ~~the~~year ~~series~~ended KMarch ~~warrants~~31, 2004. ~~Vie~~The ~~received~~charges ~~309,500~~include ofseverance ~~the~~paid ~~series~~to ~~K warrants~~terminated ~~from~~employees, TKa ~~Holdings~~charge infor anour ~~exchange~~remaining lease obligations on ~~September~~the Philadelphia 24office location, ~~2001~~and ~~(see~~losses ~~Note~~on 9the ~~“Stockholders’~~disposition ~~(Deficiency)~~and ~~Equity”).~~impairment ~~This~~of ~~exchange~~assets, ~~increased~~including ~~our~~furniture ~~ownership~~and infixtures, ~~Ashton~~computer ~~Canada~~equipment ~~from~~and ~~51%~~our ofPhiladelphia ~~the~~Stock ~~voting~~Exchange ~~equity~~memberships. toThe ~~90%.~~charges are as follows:

Kingsway-ATG Asia, Ltd.


	Restructuring Charges
Severance costs	$	197,083
Lease termination costs		655,983
Loss on disposition and impairment of assets		499,340

Total	$	1,352,406

~~On December 16, 1999, we signed a joint venture agreement with Kingsway International to create Kingsway-ATG Asia, Ltd. (KAA). On January 13, 2000, Vie purchased~~ 47~~,000,000~~ shares of KAA’s voting common stock for $1,000,000 for a 47% interest in KAA. Because we own less than 50% of the equity of KAA, we account for our investment in KAA under the equity method. Our investment in KAA, originally recorded at cost, has been adjusted to recognize our share of KAA’s net losses. The balance of our investment in KAA at March 31, 2003 and 2002 was $0 and $183,468, respectively.

OnThe ~~January~~activity 30, 2002, we entered into an “Agreement For Sale And Purchase Of Shares in Respect of the Shares in Kingsway-ATG Asia Limited” with HK Weaver Group, Inc., a British Virgin Islands company formerly known as Kingsway Electronic Services, Limited. Pursuant to the agreement, we sold all of our KAA shares to HK Weaver in exchange for ~~a HK$23,400,000 zero-coupon note, effective as of May 7, 2002. On October 3, 2002, we entered into a “Deed of Novation” allowing HK Weaver to assign its rights under~~ the ~~agreements~~fiscal toyear ~~Weaver~~ended ~~Capital~~March ~~Limited~~31, ~~a wholly~~2004 owned subsidiary of Weaver International Limited. The note is convertible into Weaver Capital or Weaver International common stock upon an IPO of either entity and listing of such stock on the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong. Upon conversion of the note, we will receive Weaver Capital or Weaver International shares equal to the total principal amount of the note divided by the IPO price. Such shares will be subject to a lockup for 18 months from their issuance date. In the event of certain defaults identified in the ~~note~~restructuring ~~instrument~~liabilities ~~or should neither Weaver Capital nor Weaver International shares not be listed on GEM by December 31, 2003, our sole recourse~~ is ~~to redeem the note and receive the return of our KAA shares. Because of the uncertainty~~ as tofollows: whether an IPO of Weaver Capital or Weaver International will eventually occur, we have determined the fair value of our investment in KAA is $0, and we recorded a loss during the year ended March 31, 2003 of $189,653.

Gomez, Inc.


	Beginning Restructuring Liabilities		Additions		Reductions			Ending Restructuring Liabilities
Severance costs	$	—	$	197,083	$	(153,390	)	$	43,693
Lease termination costs		—		713,209		(53,537	)		659,672

Total	$	—	$	910,292	$	(206,927	)	$	703,365

~~Gomez,~~The ~~Inc.~~remaining severance ~~was~~costs ~~one~~will ofbe ~~our~~paid ~~majority-owned~~out ~~subsidiaries~~by ~~until~~June ~~December 1999~~30, ~~when~~ ~~our~~2004. ~~equity~~The ~~ownership~~expected oflease ~~Gomez~~termination ~~decreased~~costs towill ~~less~~be ~~than~~paid ~~50%~~over of the ~~total~~remaining ~~outstanding~~lease ~~equity.~~term Asexpiring ofin ~~December~~July ~~31,~~2010. ~~1999,~~In weaccordance ~~began~~with ~~accounting~~SFAS ~~for~~No. ~~our~~146 ~~equity~~“Accounting ~~investment~~for incosts ~~Gomez~~Associated ~~under~~with ~~the~~Exit ~~equity~~or ~~method~~Disposal Activities”, ofwe ~~accounting~~recorded ~~due to~~ the ~~decrease~~lease intermination ~~ownership~~liability ~~and our~~at ~~reduced~~its ~~representation~~fair ~~on Gomez’s board. On November 7~~value, ~~2001,~~based ~~Gomez~~on ~~completed~~ the ~~sale~~present ~~and~~value ~~transfer~~ of ~~substantially~~expected ~~all~~future ofcash ~~its~~flows, ~~assets~~net ~~and~~of ~~liabilities~~estimated tosub-rental ~~GZ Advisors, Inc~~income. ~~Gomez~~The $67,292 ~~Inc.~~balance ~~was~~of ~~then~~deferred ~~liquidated~~rent ~~and~~that ~~GZ Advisors, Inc.~~ was ~~renamed Gomez,~~related ~~Inc.~~to ~~Our equity investment in~~ the ~~new~~Philadelphia lease ~~Gomez,~~was ~~Inc.~~recorded ~~consists~~as ofa ~~common~~reduction ~~stock~~in ~~representing less than 1% of~~ the ~~fully~~lease ~~diluted~~termination ~~ownership~~charge.

~~In July 2001, Gomez raised approximately $1 million of capital through their issuance of senior secured notes~~8. WeSHORT-TERM ~~participated~~AND in that financing in the amount of $38,633, which is convertible into approximately 1.4% of the fully diluted common stock of Gomez, Inc. The balance of the note and accrued interest thereon of $41,289 was included in the caption investments in and advances to affiliates on our March 31, 2002 consolidated balance sheet. Pursuant to EITF 99LONG-~~10,~~TERM Percentage Used to Determine the Amount of Equity Method Losses, during the year ended March 31, 2003 we recognized our share of Gomez’s losses to the extent of our advances and accrued interest in the amount of $45,153. The notes are scheduled to mature in November 2006. OBLIGATIONS

42Investment by SOFTBANK and DFJ ePlanet – Subordinated Convertible Notes

~~Table~~On ofDecember ~~Contents~~30, 2002, we entered into a loan agreement that provided $2.4 million in principal amount to us and required us to issue notes and warrants to the lenders. The loan agreement was executed by and between Vie, SOFTBANK and DFJ ePlanet.

In accordance with the loan agreement, we issued SOFTBANK notes with an aggregate principal loan amount of $1.4 million, and issued notes to DFJ ePlanet with an aggregate principal loan amount of $1 million. ~~PROPERTY~~Each ~~AND~~lender’s ~~EQUIPMENT~~note was due and payable on May 4, 2006 and accrued simple interest at 8% per annum. We had the ability to prepay the loan at any time without penalty on 30 days prior written notice to the lenders. The notes were subordinate and junior in all respects to the promissory note, dated as of May 3, 2002, to RGC International Investors, LDC (RGC) to the extent required by the terms of the RGC note. The lenders had the ability to convert all or any portion of the outstanding loan amount into shares of our common stock at an initial conversion price of $4.48 per share.

~~Property~~The lenders also had the right to convert the outstanding principal amount and ~~equipment~~accrued and unpaid interest, atin ~~cost~~whole or in part, ~~consist~~into securities of the same ~~following~~class as those issued and sold in any subsequent financing completed during the term of ~~March~~the ~~31,~~loan. During October 2003, SOFTBANK and ~~2002:~~DFJ ePlanet each converted the outstanding principal balance and accrued interest on their notes, or $1,493,333 and $1,062,889, respectively, into 14,933 and 10,629 shares, respectively, of series H preferred.

	March 31,						Estimated Useful Life
	2003			2002
Office equipment	$	132,527		$	215,040		3 - 5 years
Computer equipment		1,459,714			1,655,613		3 years
Computer software		126,693			223,218		3 years
Furniture and fixtures		596,061			625,133		5 years
Leasehold improvements		312,995			312,995		Term of lease
		2,627,990			3,031,999
Less accumulated depreciation		(1,816,651	)		(1,516,569	)
Property and equipment, net	$	811,339		$	1,515,430

In connection with the loan agreement, we also issued warrants to purchase 89,286 shares of common stock, which number is equal to $400,000 divided by the exercise price of the warrants. The exercise price of the warrants is initially $4.48 per share. The warrants will expire on December 30, 2005. We recorded the fair value of the warrants, or $342,857, as an initial discount on the notes. The unamortized balance of the discount of $265,971 was charged to interest expense upon conversion of the notes during the fiscal year ended March 31, 2004. Additionally, we amortized $51,258 of the discount as

~~Depreciation~~48 ~~and amortization expense related to property and equipment for the years ended March 31, 2003, 2002 and 2001 was approximately $887,000, $915,000, and $688,000, respectively.~~

5 interest expense and we recorded interest expense of $108,222 at the contractual rate of 8% prior to the conversions during the fiscal year ended March 31, 2004. ~~SECURITIES~~During ~~OWNED~~the fiscal year ended March 31, ~~SECURITIES~~2003, ~~SOLD~~we amortized $25,629 ~~NOT~~of ~~YET~~the ~~PURCHASED~~discount ~~AND~~as ~~OTHER~~interest ~~INVESTMENTS~~expense and recorded interest expense of $48,000 at the contractual rate of 8%. The notes were reflected on the March 31, 2003 consolidated balance sheet net of the unamortized discount of $317,228, plus accrued interest of $48,000.

~~Securities~~We ~~Owned~~agreed ~~and~~with ~~Securities~~SOFTBANK ~~Sold~~to use approximately $387,000 ~~Not~~of ~~Yet~~the ~~Purchased~~proceeds from the SOFTBANK notes to satisfy our outstanding obligation to reimburse the reasonable fees and expenses of SOFTBANK’s special counsel incurred in the OptiMark Innovations transaction described below.

~~The~~Investment ~~balance~~by ofOptiMark ~~securities~~Innovations ~~owned~~Inc. and ~~securities~~Secured ~~sold,~~Convertible ~~not~~Note ~~yet purchased as of March 31, 2003 and 2002 consist of the following:~~

	Securities Owned				Securities Sold, Not Yet Purchased
	2003		2002		2003		2002
Common stock	$	7,114	$	—	$	353,604	$	—

On May 7, 2002, we closed the transactions contemplated by the securities purchase agreement with OptiMark Innovations dated as of February 4, 2002, and as amended. Pursuant to the purchase agreement, we issued 6,087,076 shares of common stock to Innovations in consideration for $7,272,727 in cash, and certain intellectual property and other non-cash assets. In addition, Innovations loaned us $2,727,273 in cash, evidenced by a senior secured convertible note in favor of Innovations. The note accrues interest at a rate of 7.5% per annum, matures in May 2007, and is convertible at any time into 528,708 shares of our common stock, subject to customary anti-dilution adjustments. The note is secured by a pledge and security agreement pursuant to which Innovations received a blanket lien on our assets, subject to the terms and conditions of the intercreditor, subordination and standstill agreement by and among RGC International Investors, LDC, Innovations and us.

~~Other~~Since ~~Investments~~the Innovations note was convertible into shares of our common stock at a rate of $5.158 per share, and the market price of our common stock was $17.00 per share on the date of the agreement, we recorded the beneficial conversion feature of the note in accordance with EITF 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingency Adjustable Conversion Ratios. We recorded the beneficial conversion feature as an initial discount of $2,727,273 on the note, and have amortized $545,455 and $489,394 as interest expense during the fiscal years ended March 31, 2004 and 2003, respectively. Also during the fiscal years ended March 31, 2004 and 2003, we accrued the contractual interest at a rate of 7.5%, or $204,545 and $183,670, respectively, on the Innovations note. The note is reflected on the March 31, 2004 consolidated balance sheet net of the unamortized discount of $1,692,424, plus accrued interest of $183,670, and is reflected on the March 31, 2003 consolidated balance sheet net of the unamortized discount of $2,237,879, plus accrued interest of $183,670.

OnWe ~~February~~paid 6,Innovations ~~2001,~~interest weof ~~made a~~ $120,~~500,~~000 ~~equity~~on ~~investment~~May ~~in JAGfn Broadband~~24, ~~LLC.~~2004 Onagainst ~~September~~the ~~24,~~annual ~~2001,~~interest wepayment ~~entered~~due ~~into~~on anMay ~~exchange~~7, ~~agreement~~2004 ~~with~~in the ~~UTTC~~amount ~~series~~of TK$204,545. ~~preferred~~Innovations agreed ~~stock~~to ~~investors.~~defer Wepayment ~~exchanged~~of ~~our~~the ~~investment~~remaining ininterest ~~JAGfn~~payment ~~for~~until ~~72,850~~a ~~shares~~later ofdate. ~~series~~On TKJune ~~preferred~~18, ~~stock~~2003, ~~all~~Innovations ofelected ~~the~~to ~~outstanding 200~~receive $50,000 ~~series~~in Tcash ~~warrants,~~and ~~309,500~~to ofconvert the ~~500,000~~remaining ~~outstanding series K warrants~~$154,545 ~~and~~into ~~an additional 39~~29,~~000~~962 shares of ~~the~~our ~~class B~~ common stock ~~of Ashton Canada. As a result of this exchange, we recorded a reduction~~ in ~~other~~full ~~assets~~satisfaction of the $1204,~~500,000,~~545 ~~a reduction in minority~~ interest ofpayment ~~$1,000,000~~due ~~and~~to aInnovations ~~loss~~on ofMay ~~$500~~7,~~000~~ ~~during the year ended March 31, 2002~~2003.

6On April 30, 2002, Innovations agreed to lend us $300,000 to be credited against the purchase price of the common stock to be purchased by Innovations. ~~EXCHANGE~~Additionally, ~~MEMBERSHIPS~~on April 30, 2002, we agreed to lend OptiMark, Inc., the parent company of Innovations, $200,000 to be credited at the closing against reimbursable expenses we owed to OptiMark, Inc. pursuant to the securities purchase agreement with Innovations. Each of the notes was satisfied on May 7, 2002 at the closing of the securities purchase agreement with Innovations.

WeRGC ~~own~~Bridge ~~two~~Loan ~~Philadelphia Stock Exchange memberships through Vie Securities~~ and ~~Vie Institutional Services. In July 2000, Vie Securities purchased an~~ ~~exchange membership with options trading privileges for $90,000 in cash. In January 2000, Vie Institutional Services purchased a regular exchange membership for $69,752 in cash.~~ Exchange ~~memberships~~Agreement ~~are~~– ~~recorded~~Secured atNote cost and are evaluated periodically for impairment in value. If a permanent impairment is considered to have occurred, the membership will be recorded at a value that reflects our estimate of the impairment.

On ~~January~~April 2311, 2002, we ~~REB~~entered ~~sold~~into ~~its~~a ~~membership~~securities ~~seat~~exchange ~~that~~agreement itwith ~~purchased~~RGC inInternational ~~March~~Investors, ~~1999~~LDC at(RGC) apursuant ~~cost~~to which RGC exchanged its 9% secured convertible note (see “RGC Exchange of ~~$196~~Series F Redeemable Convertible Preferred Stock” below) for a four-year,~~900~~ 7.5% ~~REB~~non-convertible ~~received proceeds~~zero-coupon senior secured note in the principal amount of $~~105~~4,~~000~~751,876 and ~~recorded~~ a ~~loss~~five-year ofwarrant ~~$91~~to purchase 90,~~900,~~000 ~~which~~shares isof

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