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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the period ended December 31, 2002

OR

¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                          to                         

Commission File Number: 001-11747

VIE FINANCIAL GROUP, INC.

(formerly The Ashton Technology Group, Inc.)

1835 MARKET STREET, SUITE 420

PHILADELPHIA, PENNSYLVANIA 19103

(215) 789-3300

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) 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  ¨

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practical date:

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VIE FINANCIAL GROUP, INC.

INDEX

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PART I—FINANCIAL INFORMATION

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:

In 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.

Although we believe that the expectations reflected in the forward-looking statements 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 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.

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ITEM 1.

FINANCIAL STATEMENTS

VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

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VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

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

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VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(Continued)

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

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VIE FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    BASIS OF PRESENTATION

On October 9, 2002, we changed our name 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.

The consolidated financial statements included herein have been prepared without audit pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The accompanying consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Such adjustments are of a normal recurring nature. Certain amounts in prior periods have been reclassified for comparative purposes.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

These consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended March 31, 2002. The results for the nine months ended December 31, 2002 are not necessarily indicative of the results that may be expected for the year ending March 31, 2003.

During the nine months ended December 31, 2002, we conducted our business through the following subsidiaries:

The accounts of each of our majority-owned subsidiaries, Vie Securities, UTTC, 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 of which 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. During the nine months ended December 31, 2002 and 2001, we used the equity method to account for our investments in Gomez, Inc. and Kingsway-ATG Asia, Ltd. (KAA).

The results 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 by and among Vie Financial Group and its subsidiaries are eliminated in consolidation.

We are a subsidiary of OptiMark Innovations, Inc. (Innovations), a Delaware corporation, and an indirect subsidiary of OptiMark Holdings, Inc., a Delaware corporation. On May 7, 2002, Innovations acquired approximately 88% of our outstanding shares of common stock, and we issued a senior secured convertible note to Innovations for $2,727,273. Assuming conversion of the note, Innovations would own approximately 89% of our common stock.

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Discontinued Operations

We formed 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, our board of directors agreed to fund eMC’s initial development efforts. In March 2001, eMC’s board of directors voted, after being unable to find other funding sources or consummate a sale of eMC to a third party, 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 our consolidated financial statements for all periods presented.

Gomez, Inc.

Gomez, Inc. was one of our majority-owned subsidiaries through December 1999, when our ownership of Gomez fell below 50% as a result of our not participating in subsequent rounds of their financing. In July 2001, Gomez raised approximately $1 million of capital from certain existing investors through their issuance of senior secured notes. We participated in that financing in the amount of $38,633. The balance of the note and accrued interest thereon of $41,289 was included in “Investments in and advances to affiliates” on our March 31, 2002 consolidated balance sheet. Pursuant to EITF 99-10, Percentage Used to Determine the Amount of Equity Method Losses, during the nine months ended December 31, 2002 we recognized our share of Gomez’s losses to the extent of our advances in the amount of $44,190.

2.    RECENT DEVELOPMENTS

Financial Condition

We have never realized an operating profit and have reported significant losses. As of December 31, 2002, we have accumulated losses of approximately $94.3 million. We presently have a stockholders’ deficiency of approximately $1.8 million.

We were founded in 1994 as a development stage company. We derived all of our revenues in the three-and nine- month periods ended December 31, 2002 on a per transaction basis for securities trades executed through our broker-dealer subsidiaries. During the nine months ended December 31, 2002 and 2001, two customers accounted for approximately 76% and 75%, respectively, of our revenues. We can give no assurance that we will become profitable or be able to successfully develop additional products, obtain additional customers, or that the marketplace will accept any new products we are able to develop. If demand for our products and services fails to grow at the rate we anticipate and we are unable to increase revenues, then our business, financial condition and operating results will be materially and adversely affected.

We believe that our cash should be sufficient to fund our operations until we are able to generate sufficient operating revenues to fund our operations. Our cash position as of December 31, 2002 is $4, 387, 051, including approximately $1.7 million which is invested in the net capital of our broker-dealer operations. We believe the current level of net capital is sufficient to allow us to expand our business as planned and to achieve our targeted revenues, however we can give no assurance that we will be able to do so. If necessary, we may seek to use a portion of our excess net capital to fund our operations. However, if we use net capital for such purposes, our broker-dealer business operations may be limited, and we may be unable to grow and increase revenues at the rate we anticipate, which could adversely affect our financial condition and operating results.

We are seeking to raise additional financing which may 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. These financing strategies would likely impose operating restrictions on us or be dilutive to holders of our common stock. Further, additional financing may not be available on attractive terms or at all.

Investment by SOFTBANK and DFJ ePlanet

On December 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 and SOFTBANK Capital Partners LP, SOFTBANK Capital Advisors Fund LP and SOFTBANK Capital LP, each a Delaware limited partnership (SOFTBANK), and 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

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Draper Fisher Jurvetson ePlanet Ventures GmbH & Co. KG, a German partnership (DFJ ePlanet). The lenders are investors in entities that own or control a majority of our outstanding common stock. Directors designated by the lenders, these entities or their affiliates recused themselves from deliberation on the loan agreement and the transaction. The loan agreement and the terms of the transaction were approved by a majority of disinterested directors.

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. Each Lender’s note is due and payable on May 4, 2006 and accrues simple interest at 8% per annum. We may prepay the loan at any time without penalty on 30 days prior written notice to the lenders. The notes are 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 may convert all or any portion of the outstanding loan amount into shares of our common stock at a conversion price of $0.0448 per share.

Additionally, upon our completion of any issuance and sale of equity securities during the term of the loan, the lenders may convert the outstanding principal amount and accrued and unpaid interest, in whole or in part, into securities of the same class as those issued and sold in such financing at a conversion price equal to the price paid by the purchasers of such financing. The lenders shall have 30 days from the closing date or written notice of such financing to exercise their conversion rights with respect to the applicable financing. If the lenders do not exercise their conversion rights within such 30-day period, then those rights will expire.

The conversion prices will be subject to anti-dilution adjustment in the event of stock dividends, stock splits and combinations, and to broad-based, weighted–average anti-dilution adjustment with respect to any equity issuance, including warrants, to our vendors, service providers or sales representatives up to 2% of our outstanding common stock on December 30, 2002. In the event we do not have equity securities available for conversions under the loan agreement, then upon such conversions, the loan will convert, on an interim basis, into shares of a new series of preferred stock designed to have voting and economic rights substantially equivalent to such unavailable securities. We have committed to use our best efforts to cause our certificate of incorporation to be amended promptly to permit the loan and such preferred stock to convert into an equivalent number of shares of our common stock.

In connection with the loan agreement, we also issued warrants to purchase 8,928,571 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 $0.0448 per share. If we complete the issuance and sale of shares of common stock or securities convertible into common stock by June 30, 2003 for gross proceeds of at least $2 million, then the exercise price of the warrants will be the lowest price per share at which shares of our common stock were sold or are convertible into upon conversion of securities sold in such financing. In addition, the exercise price is subject to anti-dilution adjustments in the event of stock dividends, stock splits and combinations, and to broad-based, weighted-average anti-dilution adjustments with respect to subsequent issuances of common stock at a price per share that is less than the applicable exercise price. 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, which are reflected on the December 31, 2002 consolidated balance sheet net of such discount.

We agreed with SOFTBANK to use approximately $387,000 of the 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.

Chief Executive Officer

We hired Dean Stamos as our Chief Executive Officer on October 9, 2002. Mr. Stamos is co-founder and the former president of NYFIX Millennium. Robert J. Warshaw resigned his position as our acting Chief Executive Officer upon Mr. Stamos’ employment, and continues to serve as a director on our board of directors. Mr. Stamos was appointed to the board of directors to fill the vacancy left by Fred Weingard, who continues to serve as an Executive Vice President and our Chief Technology Officer.

We entered into an employment contract with Mr. Stamos, effective October 9, 2002. The contract has an initial one-year term, and we may extend it for additional one-year terms with 60 days’ advance notice before expiration. The agreement provides for a salary of $300,000 per year, performance bonuses of up to $200,000 for

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the first year (with $100,000 of the bonus guaranteed assuming continued employment), and the potential for additional discretionary bonuses. The contract provides that we will pay the two one-time performance bonuses of $100,000 each if, respectively, (i) we achieved net proceeds from financing of $10 million or more before January 31, 2003 and/or (ii) we achieve earnings before interest and taxes in any two consecutive months before May 1, 2003. Since we have not completed the financing described in (i) above, Mr. Stamos will not have the ability to earn both of the one-time bonuses, and will be paid the $100,000 guaranteed bonus assuming continued employment, regardless of whether we achieve the earnings target described in item (ii). If we terminate Mr. Stamos’ employment without cause or if a constructive termination occurs, we will be required to pay him amounts ranging from six months’ to one year’s base salary, depending upon the date of termination, and vesting of his options will partially accelerate. The agreement also contains customary definitions of “cause” and “constructive termination” and contains customary confidentiality and non-competition provisions.

Also in connection with Mr. Stamos’ employment, our board granted him options to acquire 47,555,279 shares of our common stock under the 2002 Option Plan at an exercise price of $0.08 per share. The options are incentive stock options to the extent the tax laws allow and nonqualified stock options for the remainder. The options become exercisable over four years, assuming continued service, with the exercisability partially accelerated if Mr. Stamos’ employment is terminated without cause, if he resigns as a result of constructive termination, or upon a change in control of the company. Mr. Stamos has anti-dilution rights on 50% of his options with respect to the first post-employment round of financing (defined as our receiving net proceeds of $1 million or more from a single funding source or $3 million or more from more than one source). These anti-dilution rights will entitle him to receive additional options to purchase shares at an exercise price of $0.08 per share, subject to the same exercise schedule as the initial options, to preserve his relative ownership percentage on a fully-diluted shares outstanding basis in place on the date of grant of his initial options.

Termination of eVWAP Pilot Facility on the Philadelphia Stock Exchange

We reached an agreement with the Philadelphia Stock Exchange to terminate the operation of the eVWAP pilot facility effective November 29, 2002. eVWAP was the fully automated system that permitted market participants to trade eligible securities before the market open at the volume-weighted average price for the day. We launched eVWAP as a facility of the Philadelphia Stock Exchange during August 1999. Our current line of products is offered directly through our subsidiaries Vie Institutional Services and Vie Securities.

Investment by OptiMark Innovations Inc.

On May 7, 2002, we closed the transactions contemplated by the securities purchase agreement with Innovations dated as of February 4, 2002, and as amended. Pursuant to the purchase agreement, we issued 608,707,567 shares of common stock to Innovations in consideration for $7,272,727 in cash, 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 52,870,757 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, Innovations and us.

Since the Innovations note was convertible into shares of our common stock at a rate of $0.05158 per share, and the market price of our common stock was $0.17 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 $353,030 as interest expense through December 31, 2002. Also during the nine months ended December 31, 2002, we accrued the contractual interest at a rate of 7.5%, or $132,534, on the Innovations note. The note is reflected on the December 31, 2002 consolidated balance sheet net of the remaining unamortized discount of $2,374,243, plus the accrued interest of $132,534.

The intellectual property and non-cash assets transferred to us by Innovations as partial consideration for the purchase of our common stock consisted of:

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The provisional patent application will not provide us with any exclusive rights unless and until a patent is issued. There can be no assurance that the provisional patent application will result in a patent being issued.

We have not obtained an independent third party valuation of the intellectual property and other non-cash assets received from Innovations. In accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, the recorded amount of the intellectual property and non-cash assets should be based upon either the quoted market price of the shares sold to Innovations on the date of closing, or the fair value of the assets acquired, whichever is more clearly evident and thus, more reliably measurable. Although the fair value of securities traded in the market is generally more clearly evident than the fair value of assets acquired, we have concluded that the quoted market price of the stock was not reflective of the fair value of the transaction as a result of the following factors: (i) our stock is thinly-traded on the OTC Bulletin Board; (ii) the market price of our stock has historically experienced significant fluctuations; and (iii) Innovations’ ownership percentage after the closing of the transaction is substantially greater than the public float, and therefore, Innovations’ shares were valued at a discount to the market price of the public float. Alternatively, we considered a more appropriate measure of the value of the transaction to be based on the fair value of the assets acquired, or $7,272,727, the amount of cash received. The consolidated balance sheet reflects no value for the intellectual property and non-cash assets received in the transaction due to our inability to sell, transfer, license, rent or exchange those assets.

On 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. Additionally, 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.

RGC Bridge Loan and Exchange Agreement

On April 11, 2002, RGC agreed to lend us up to $250,000, repayable upon the closing of the securities purchase agreement with Innovations. The loan accrued interest at a rate of 15% and was secured by a blanket, first priority lien on all of our assets. We borrowed the entire $250,000 in April 2002, and repaid it on May 7, 2002.

Also on April 11, 2002, we entered into a securities exchange agreement with RGC pursuant to which RGC exchanged its 9% secured convertible note for a four-year, 7.5% non-convertible zero-coupon senior secured note in the principal amount of $4,751,876 and a five-year warrant to purchase 9 million shares of our common stock at an exercise price of $0.0448 per share, subject to customary anti-dilution adjustments. The exchange note is secured by a blanket, first priority lien on our assets (except for certain intellectual property assets received by us as consideration in the transaction with Innovations). We recorded the fair value of the warrant, or $1,188,000, as an initial discount on the exchange note, and have amortized $192,225 as interest expense through December 31, 2002. Also during the nine months ended December 31, 2002, we recorded contractual interest of $40,477 on the 9% note prior to the exchange, and $230,922 on the 7.5% note after the exchange. The note is reflected on the December 31, 2002 consolidated balance sheet net of the remaining unamortized discount of $995,775, plus the accrued interest of $230,922.

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We may redeem the exchange note at any time, in whole but not in part, for an amount equal to: 30% of the principal amount thereof plus all accrued and unpaid interest in year one; 53.3% of the principal amount thereof plus all accrued and unpaid interest in year two; 76.6% of the principal amount thereof plus all accrued and unpaid interest in year three; or 100% of the principal amount thereof plus all accrued and unpaid interest thereafter.

The warrant was immediately exercisable as to 2,250,000 shares of common stock, and becomes exercisable in quarterly installments of 2,250,000 shares each, beginning October 11, 2002. In addition, the warrant becomes immediately exercisable in full in the event of a change of control of Vie, as such term is defined in the warrant agreement. In no event, however, is RGC entitled to exercise and purchase shares of our common stock in excess of the number of shares of common stock which would result in RGC’s beneficially owning more than 4.9% of our outstanding shares of common stock.

Intercreditor, Subordination and Standstill Agreement

On May 7, 2002, in connection with the closing of the transactions contemplated by the purchase agreement with Innovations and the securities exchange agreement with RGC, Vie, UTTC, RGC and Innovations entered into an intercreditor, subordination and standstill agreement memorializing the agreements of the parties as to the priority of payment and security with respect to the obligations arising under the Innovations note and the RGC exchange note, respectively, and the rights and remedies of Innovations and RGC with respect to such obligations. Pursuant to this agreement, RGC has a blanket, first-priority lien on all of our assets, except for certain intellectual property assets we received as consideration in the Innovations transaction.

Short-Term Note with HK Weaver Group, Ltd.

On January 30, 2002, HK Weaver Group, Limited, formerly known as Kingsway Electronic Services, Limited, agreed to lend us up to $500,000 under a bridge loan agreement. $250,000 of the loan amount was repayable through our mandatory issuance of 5 million shares of common stock, and the remaining $250,000 was either convertible into an additional 5 million shares of our common stock or repayable in cash, at the option of HK Weaver. The HK Weaver loan was secured by the 47 million shares of common stock of KAA owned by us. HK Weaver is our joint venture partner in KAA, and is a holding company and a subsidiary of Kingsway International Holdings Limited (KIHL).

We drew a total of $500,000 on the bridge loan during February 2002. Since the note was convertible into shares of our common stock at a rate of $0.05 per share, and the market price of our common stock was $0.25 on the date of the bridge loan 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 $500,000 on the note, and amortized $322,581 as interest expense through March 31, 2002. During the nine months ended December 31, 2002, we recorded interest expense for the remaining unamortized discount of $177,419. On May 7, 2002, HK Weaver converted the entire $500,000 note into 10 million shares of our common stock.

Also in connection with the bridge loan, we granted HK Weaver a three-year option to purchase two million shares of our common stock at an exercise price equal to the price per share paid by Innovations upon closing of the securities purchase agreement with Innovations, or $0.0448. The options began vesting in quarterly installments of 500,000 each, beginning on August 7, 2002.

Separation Agreement with Frederic W. Rittereiser

On April 15, 2002, we entered into a separation agreement with our former Chief Executive Officer, Frederic W. Rittereiser, that became effective on May 7, 2002. As consideration for Mr. Rittereiser’s resignation, release of claims and on-going non-solicitation, non-competition and non-disclosure obligations, Mr. Rittereiser received: (i) a $100,000 cash payment, (ii) reimbursement of expenses incurred by Mr. Rittereiser from January 18, 2002 through May 7, 2002 totaling $6,000 and (iii) 4 million shares of our common stock to be registered with the first registration statement we file within 60 days of the effective date. According to the terms of the separation agreement, Mr. Rittereiser would also receive (i) a $50,000 payment within one year of the effective date and (ii) healthcare insurance paid by us for one year following the effective date. During the nine months ended December

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31, 2002, we recorded a non-cash compensation charge of $720,000 related for the value of the shares issued. On July 3, 2002, we paid the final $50,000 payment to Mr. Rittereiser.

Purchase of KAA Shares by Weaver Capital Limited.

On January 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. 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 to Weaver Capital Limited, a wholly 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 instrument or should neither Weaver Capital nor Weaver International shares not be listed on GEM by April 30, 2003, our sole recourse is to redeem the note and receive the return of our KAA shares. Because of the uncertainty as to 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 nine months ended December 31, 2002 of $189,653.

2002 Option Plan

On June 13, 2002, our board of directors approved the 2002 Option Plan, which is designed to enable us to offer employees, directors and consultants options to purchase our common stock in order to attract, retain and reward such individuals and to strengthen the mutuality of interests between such individuals and our stockholders. We have reserved 190,221,115 shares of common stock for issuance pursuant to the plan. Our compensation committee that has been designated by the board administers the plan.

During the nine months ended December 31, 2002, the administrator awarded employees as a group 153,647,150 incentive stock options at an exercise price per share of eight cents ($0.08), and non-employee directors as a group 19,222,111 nonstatutory stock options at an exercise price per share of eight ($0.08) cents. The grants were all made with a standardized four (4)-year vesting schedule where 1/6^th of each individual’s grant shall vest six months from the vesting commencement date, 1/6^th shall vest one year from the vesting commencement date, and 2/9ths shall vest on each of the second, third, and fourth anniversary dates from the vesting commencement date, subject in each case to the individual optionee’s continuing to be affiliated with our company on such dates. On September 11, 2002 we also issued 4,755,528 stock options to Robert J. Warshaw, our interim Chief Executive Officer. Mr. Warshaw’s options became fully vested upon the hiring of our current Chief Executive Officer on October 9, 2002. Our stockholders approved the 2002 Option Plan at the annual meeting of stockholders held on September 13, 2002.

Meetings of Stockholders

At a special meeting of stockholders held on April 18, 2002, our stockholders approved proposals to (i) amend our certificate of incorporation to increase our authorized common stock from 100 million shares to one billion shares and (ii) amend our certificate of incorporation to clarify the circumstances under which certain business opportunities that may be brought to the attention of Innovations, OptiMark Holdings, Inc. (Holdings) or an officer or director of Vie, who simultaneously serves as an officer or director of Innovations or Holdings, shall be deemed to be opportunities of Vie, Innovations and Holdings.

At the annual meeting of stockholders held on September 13, 2002, our stockholders approved proposals to (i) elect nine directors to serve until the next annual meeting and until their successors have been duly elected and qualified; (ii) approve the 2002 Option Plan; and (iii) amend our certificate of incorporation to authorize a reverse stock split by October 31, 2002. The board determined it would not effect the reverse stock split at this time as a result of current market conditions and the expected negative impact on our stock price. The board may reconsider whether to implement a reverse stock split in the future, and would again seek stockholder approval to do so at that time.

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Consulting Agreement with Arthur J. Bacci

On January 7, 2002, we entered into a consulting agreement with Mr. Bacci, our former President and Chief Operating Officer, and a former director. In consideration for his services in the negotiation of definitive agreements with Innovations, Mr. Bacci received a cash payment of $10,000, and payment of his medical coverage through April 1, 2002. Further, on June 13, 2002, we agreed to issue 275,000 shares of our common stock to Mr. Bacci in connection with his services in the Innovations transaction. We included a charge of $41,250 in professional fees during the nine months ended December 31, 2002 related to the issuance of these shares.

Settlement of Final Arbitration Award

On April 30, 2002, we entered into a final settlement agreement with Matthew Saltzman, the former President of eMC, in connection with the arbitration award in the amount of $510,750 granted to Mr. Saltzman by the American Arbitration Association on January 14, 2002. Pursuant to the settlement, we agreed to pay an aggregate of $200,000 cash, issue 400,000 shares of common stock, and grant certain rights related to eMC to satisfy the award in its entirety. We paid an initial payment of $50,000 in February 2002. We made an additional payment of $100,000 and issued 400,000 shares of our common stock on May 7, 2002. Pursuant to the final settlement agreement we will pay a final payment of $50,000 together with interest accrued at a rate of 9% per annum on or before May 7, 2003. For such consideration, Mr. Saltzman executed a release and waiver of all claims against us, including without limitation, claims in connection with the arbitration. We accrued $54,125 and $266,000 related to the unpaid portion of the settlement as of December 31, 2002 and March 31, 2002, respectively.

3.    RELATED PARTY TRANSACTIONS

Relationship with Innovations

On May 7, 2002, we closed the transactions contemplated by the securities purchase agreement with Innovations dated as of February 4, 2002, as amended. Pursuant to the purchase agreement, we issued 608,707,567 shares of our common stock to Innovations in consideration for $7,272,727 in cash, 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 52,870,757 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, Innovations and Vie Financial Group.

As of December 31, 2002, Innovations owned approximately 88% of our outstanding shares of common stock. Assuming conversion of the note issued to Innovations, Innovations would own approximately 89% of our common stock.

Robert J. Warshaw was our interim Chief Executive Officer for the period May 8, 2002 through October 9, 2002. Mr. Warshaw is also the Chief Executive Officer of OptiMark, Inc. (OptiMark), a stockholder of Innovations and a wholly-owned subsidiary of OptiMark Holdings, Inc. (Holdings), and is paid a base salary and a guaranteed bonus by OptiMark. We reimbursed OptiMark for the portion of Mr. Warshaw’s base salary and guaranteed bonus that was attributable to his performance as our acting Chief Executive Officer. From May 8, 2002 through October 9, 2002, we have reimbursed OptiMark $137,261 related to Mr. Warshaw’s compensation. We entered into an employment agreement with Mr. Warshaw effective September 15, 2002, whereby we also granted him 4,755,528 stock options at an exercise price of $0.08. The options became fully vested upon the employment of Dean Stamos, our current Chief Executive Officer, on October 9, 2002.

Also during the three months ended December 31, 2002, we agreed to purchase computer equipment and consulting services related to development of the VWAP trading system software from OptiMark for a total price of $222,622. We owed a balance of $72,622 to OptiMark for these purchases at December 31, 2002.

Investors’ Rights Agreement

On May 7, 2002, we also entered into an Investors’ Rights Agreement (the Rights Agreement) with Innovations. Pursuant to the Rights Agreement, Innovations acquired certain rights, including but not limited to: (i)

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preemptive rights to subscribe to future sales of our common stock, (ii) registration rights and (iii) the right to designate a number of directors to our board of directors proportionate to Innovations’ ownership of our common stock. In addition, so long as Innovations holds at least 20% of our common stock, we have agreed that we will not take certain actions without Innovations’ prior approval, including, among other things, (i) the issuance of additional common stock (with certain exceptions), (ii) the repurchase or redemption of our securities, (iii) a merger, consolidation or sale of substantially all of our assets or (iv) engaging in any business other than the business we currently engage in. So long as Innovations has the right to appoint at least one director, certain actions by our board of directors cannot be taken without the approval of at least one of the directors appointed by Innovations. Such actions include, among other things, making capital expenditures in excess of certain limits, acquisitions or sales of assets with a value in excess of $50,000 within any fiscal year, incurring debt in excess of $100,000 (with certain exceptions) and repurchasing or redeeming our securities.

Non-Competition Agreement

We executed a non-competition agreement with Innovations and Holdings upon the closing of the transaction. The parties currently do not compete. This agreement precludes Innovations, OptiMark, Holdings or any entity that they control from competing with us on a worldwide basis in designing, implementing or operating volume-weighted average pricing trading systems or related services in U.S. and Canadian securities for themselves or any third party. The agreement expires in May 2007.

Indemnification Agreement

OptiMark US Equities, Inc. (f/k/a OptiMark Technologies, Inc.), a wholly-owned subsidiary of Holdings (“Equities”), is a defendant in a litigation captioned Finova Capital Corporation v. OptiMark Technologies, Inc., OptiMark, Inc. and OptiMark Holdings, Inc., Docket No.: HUD-L-3884-01, Superior Court of New Jersey—Hudson County. Finova alleges, among other things, that Equities has effected fraudulent conveyances of certain assets of Holdings (the “Fraudulent Conveyance Claim”). Finova added us as a defendant in the case in May 2002. On May 7, 2002, we entered into an Indemnification Agreement with Equities whereby Equities has indemnified us from and against the entirety of any actions resulting from, arising out of, relating to, in the nature of, or caused by the Fraudulent Conveyance Claim.

OptiMark’s Control Over Vie’s Business Decisions And Board Of Directors

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 the composition of our board of directors and, through it, decisions with respect to our business direction and policies, including the appointment and removal of officers; any determinations with respect to mergers or other business combinations; acquisition or disposition of assets; our capital structure; payment of dividends on our common stock; and other aspects of our business direction and policies.

In addition, while Innovations owns at least 20% of our common stock, Innovations will retain certain veto rights over certain corporate decisions affecting us. See the description of the Rights Agreement set forth above.

Investment by SOFTBANK and DFJ ePlanet

On December 30, 2002, we entered into a loan agreement that provided $2.4 million in principal amount to us and required us to issue convertible notes and warrants to purchase shares of our common stock. The loan agreement was executed by and between Vie and SOFTBANK Capital Partners LP, SOFTBANK Capital Advisors Fund LP and SOFTBANK Capital LP, and Draper Fisher Jurvetson ePlanet Ventures L.P., Draper Fisher Jurvetson ePlanet Partners Fund, LLC, and Draper Fisher Jurvetson ePlanet Ventures GmbH & Co. KG. The lenders are investors in Innovations, which controls a majority of our outstanding common stock. Directors designated by the lenders, these entities or their affiliates recused themselves from consideration of the loan agreement and the transaction. The loan agreement and the terms of the transaction were approved by a majority of disinterested directors.

In accordance with the loan agreement, we issued notes with an aggregate principal loan amount of $1.4 million to the SOFTBANK entities, and issued notes with an aggregate principal loan amount of $1 million to the DFJ ePlanet entities. Each Lender’s note is due and payable on May 4, 2006 and accrues simple interest at 8% per annum. We may prepay the loan at any time without penalty on 30 days prior written notice to the lenders. The

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notes are 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 may convert all or any portion of the outstanding loan amount into shares of our common stock at an initial conversion price of $0.0448 per share, subject to certain adjustments. (See Note 2, Recent Developments.)

Separation Agreement with Frederic W. Rittereiser

On April 15, 2002, we entered into a separation agreement with Frederic W. Rittereiser, our former Chief Executive Officer, that became effective as of May 7, 2002. (See Note 2, Recent Developments.)

Adirondack Capital, LLC

In 1997, we retained Adirondack Capital, LLC (Adirondack) to provide investment banking and financial advisory services. K. Ivan F. Gothner, a member of our board of directors through May 7, 2002, is the managing director of Adirondack. We paid consulting fees to Adirondack amounting to $80,000 during the nine months ended December 31, 2001. We terminated the consulting agreement with Adirondack effective December 1, 2001, and therefore did not pay any consulting fees to Adirondack during the current period. Mr. Gothner received a monthly board retainer through May 7, 2002 when he resigned from the board of directors.

Consulting Agreement with Arthur J. Bacci

On January 7, 2002, we entered into a consulting agreement with Mr. Bacci, our former President and Chief Operating Officer, and a former director, pursuant to which Mr. Bacci received a cash payment of $10,000, and payment of his medical coverage through April 1, 2002. Further, on June 13, 2002, we agreed to issue 275,000 shares of common stock to Mr. Bacci (see Note 2, Recent Developments).

4.    NET LOSS PER SHARE

Net loss per share is computed in accordance with SFAS No 128, Earnings per Share. 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 per share includes the effect of such items. The effect of potential common stock issuances is not included in diluted earnings per share for the three- and nine- month periods ended December 31, 2002 and 2001 because we have incurred net losses; therefore, the effect of our dilutive securities is anti-dilutive in those periods.

5.    COMPREHENSIVE LOSS

Total comprehensive loss, which includes net loss, unrealized gains and losses on available-for-sale securities, and foreign currency translation adjustments, amounted to $2,824,060 and $3,048,534, respectively, for the three months ended December 31, 2002 and 2001, and $9,890,648 and $9,951,351, respectively for the nine months ended December 31, 2002 and 2001, respectively.

6.    RECENT ACCOUNTING PRONOUNCEMENTS

In 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, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair 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 will adopt the disclosure requirements of SFAS 148 beginning with the year ending March 31, 2003.

In June 2002, the FASB issued Statement of Financial Accounting Standards No. 147, Accounting for Costs Associated with Exit or Disposal Activities (SFAS 147). SFAS 147 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue

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No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other costs to Exit an Activity (including Certain Costs Incurred in a Restructuring.” Statement 147 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, instead of at the date of an entity’s commitment to an exit plan.

In May 2002, the FASB issued Statement of Financial Accounting Standards 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections (SFAS 145). SFAS 145 eliminates Statement 4 (and Statement 64, as it amends Statement 4), which requires gains and losses from extinguishments of debt to be aggregated and, if material, classified as an extraordinary item, net of the related income tax effect. As a result, the criteria in APB Opinion No. 30 will now be used to classify those gains and losses. SFAS 145 amends FASB Statement No. 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions are accounted for in the same manner as sale-leaseback transactions. SFAS 145 does not have a material impact on our financial statements.

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Overview

Vie Financial Group, Inc., formerly The Ashton Technology Group, Inc., was formed as a Delaware corporation in 1994. Vie Financial Group and its subsidiaries provide electronic trading services to institutional investors and broker-dealers. Through our automated trading platform we remove human elements of the trading and order execution process, eliminating information leakage. Our objective is to provide clients with high-performance electronic trading that is fast, efficient and nearly invisible to the market.

We conduct our business primarily through the following operating subsidiaries:

Vie 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 volume-weighted average price (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, Market on Close and Best Efforts VWAP. 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 Securities was formed in July 2000 as a broker-dealer engaged in proprietary trading. On September 19, 2002, Vie Securities received approval to operate as a member of the NASD. Through Vie Securities, we are implementing our proprietary trading algorithm that allows us to minimize our cost of providing guaranteed liquidity at the VWAP to our broker-dealer customers, including Vie Institutional Services, and specialized trading firms.

We are a subsidiary of OptiMark Innovations, Inc., a Delaware corporation, and an indirect subsidiary of OptiMark Holdings, Inc., a Delaware corporation. On May 7, 2002, Innovations acquired approximately 88% of our outstanding shares of common stock, and we issued a senior secured convertible note to Innovations for $2,727,273, which is convertible into 58,870,757 shares of our common stock. Assuming conversion of this 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 the 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 (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.

As a result of the transaction with OptiMark Innovations, as more fully described in the notes to the unaudited consolidated financial statements, we have made substantive changes to our existing 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. Revenues for the quarter ended December 31, 2002 have increased by $246,158 or 42% from the previous quarter ended September 30, 2002. We have successfully 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.

On 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 began the launch of 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

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subsidiaries, Croix Securities, Inc. and ATG Trading, LLC to Vie Institutional Services, Inc. and Vie Securities, LLC, respectively.

Since our inception we have not realized an operating profit and have reported significant losses. Our business is subject to significant risks, as discussed further in the section entitled “Additional Factors That May Affect Future Results.”

For the Three Months Ended December 31, 2002 Compared to the Three Months Ended December 31, 2001

We incurred a net loss from continuing operations totaling $2,823,939, or $0.00 per share, for the three months ended December 31, 2002, compared to $3,031,012 or $0.06 per share, for the three months ended December 31, 2001. The decrease is primarily due to a decrease in brokerage, clearing and exchange fees and selling, general and administrative expenses during the current year period.

Our revenues totaled $830,119 for the three-month period ended December 31, 2002, and $750,296 for the three-month period ended December 31, 2001. 100% of the revenues in the current year period were from securities commissions on trades executed through Vie Institutional Services, while the revenues in the prior year also included fees from the operation of the eVWAP system. The increase in revenues for the three months ended December 31, 2002 compared to the same period last year is the result of higher average commission rates per share in the current period, partially offset by fewer shares traded. eVWAP has a substantially lower fee structure than the commission structure in place for the Vie Institutional Services guaranteed liquidity program we currently offer, and we have not traded through the eVWAP system during the current period. We continue to focus on building profitable volume, expanding our relationships with liquidity providers, and refining the results of our proprietary trading algorithm, all in accordance with our new business model. Approximately 68% of the revenues during the three-month period ended December 31, 2002 were from transactions with two customers, while approximately 85% of the revenues during the three-month period ended December 31, 2001 were from transactions with two customers.

Salaries and employee benefits decreased slightly to $1,423,891 for the three-month period ended December 31, 2002 from $1,425,213 for the three-month period ended December 31, 2001. During the three-month periods ended December 31, 2002 and 2001, we employed an average of 42 and 39 employees, respectively.

Professional fees increased 136.7% to $368,678 during the three months ended December 31, 2002 from $155,753 during the three months ended December 31, 2001. The increase was primarily a result of an increase in legal expenses, consulting, and recruiting costs. Legal expenses increased $64,896 for the period, and we recognized $296,234 in legal costs as a reduction to additional paid-in capital related to the closing of the Innovations transaction during the three months ended December 31, 2002. We paid $122,622 in consulting fees to OptiMark for development of software related to our VWAP trading system during the current period. Recruiting costs of $31,286 were incurred in the three months ended December 31, 2002 related to the hiring of our Chief Executive Officer, while no such costs were incurred in the prior year period.

Brokerage, clearing and exchange fees decreased 46.2% to $403,900 for the three months ended December 31, 2002 from $751,152 for the three months ended December 31, 2001. This decrease is a result of a decrease in certain clearing and execution costs per share, and fewer fees paid to third party liquidity providers.

Depreciation for the three-month period ended December 31, 2002 decreased 6.4% to $208,750 from $222,920 for the three-month period ended December 31, 2001. Capital expenditures increased to $107,732 for the three months ended December 31, 2002 compared to $0 in the same period last year, as a result of computer equipment purchased from OptiMark during the period.

We recorded a loss on proprietary trading activities of $114,522 and $747 during the three months ended December 31, 2002 and 2001, respectively. The loss on trading in the current period related to the use of our VWAP algorithm to offer liquidity to our customers, whereas we used external liquidity providers almost exclusively in the same period last year. The costs paid to external liquidity providers are included in brokerage, clearing and exchange fees.

Selling, general and administrative expenses decreased 4.5% to $789,751 for the three months ended December 31, 2002 from $827,203 for the three months ended December 31, 2001. The decrease is primarily a result of decreases in communications expenses, travel, meals and entertainment, marketing, and other costs,

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partially offset by increases in insurance premiums and software licensing fees. Communications expenses decreased $68,869 or 32% due to the cancellation or renegotiation of various contracts. Travel, meals and entertainment costs decreased $36,520 or 38% as a result of our focus on reducing such costs. Marketing and advertising expenses decreased by $40,211 or 87%, due primarily to non-recurring costs incurred last year. Insurance premiums increased by $120,933 or 94% as a result of increased directors’ and officers’ coverage, higher premiums, and an additional policy covering the directors who resigned from the board of directors upon the completion of the transactions with Innovations for one year. We paid $75,000 during the three months ended December 31, 2002 in connection with a license agreement related to our VWAP trading algorithm.

Interest income decreased to $8,380 for the three months ended December 31, 2002 from $8,928 for the three months ended December 31, 2001, primarily as a result of lower interest rates.

Interest expense of $351,972 for the three months ended December 31, 2002 was comprised primarily of $187,500 related to the secured convertible note that we executed with Innovations on May 7, 2002, and $163,348 related to the secured convertible notes with RGC (see “Notes to Unaudited Consolidated Financial Statements”).

Other expense for the three-month periods ended December 31, 2002 and 2001 was $0 and $551,815, respectively. The December 31, 2001 expense includes a charge of $515,600 related to the arbitration award in favor of the former president of eMC. The award was granted by the American Arbitration Association on January 14, 2002 related to the arbitration proceedings between Ashton and eMC’s former president regarding his employment contract. The charge includes the award of $510,750 and related expenses of $4,850. Other expense for the three months ended December 31, 2001 also includes a loss of $36,215 on a note receivable from CSI.

Equity in (loss) income of affiliates amounted to ($974) and $262,580 for the three-month periods ended December 31, 2002 and 2001, respectively. The current period amount relates to the write-down of our investment in Gomez in accordance with the equity method of accounting. The prior year amount represents our portion of the net income of KAA, an equity investment, which was primarily a result of realized gains on the trading portfolio.

For the Nine Months Ended December 31, 2002 Compared to the Nine Months Ended December 31, 2001

We incurred a net loss from continuing operations totaling $9,889,808, or $0.02 per share, for the nine months ended December 31, 2002, compared to $10,545,464 or $0.32 per share, for the nine months ended December 31, 2001. The decrease is primarily due to a decrease in salaries, professional fees, brokerage, clearing and exchange fees, losses on trading activities, and general and administrative costs, offset by increases in non-cash compensation, interest expense, and other non-operating expenses.

Our revenues totaled $1,668,061 for the nine-month period ended December 31, 2002, and $2,162,760 for the nine-month period ended December 31, 2001. 100% of the revenues in the current year period were from securities commissions on trades executed through Vie Institutional Services, while the revenues in the prior year also included fees from the operation of the eVWAP system. The decrease in revenues for the nine months ended December 31, 2002 compared to the same period last year is the result of fewer shares traded, partially offset by higher commissions per share in the current period. We recognized higher commissions per share because eVWAP has a substantially lower fee structure than the commission structure in place for the Vie Institutional Services guaranteed liquidity program we currently offer, and we have not traded through the eVWAP system during the current period. We continue to focus on building profitable volume, expanding our relationships with liquidity providers, and refining the results of our proprietary trading algorithm, all in accordance with our new business model. Approximately 76% of the revenues during the nine-month period ended December 31, 2002 were from transactions with two customers, while approximately 75% of the revenues during the nine-month period ended December 31, 2001 were from transactions with two customers.

Salaries and employee benefits decreased 4.9% to $4,137,918 for the nine-month period ended December 31, 2002 from $4,349,846 for the nine-month period ended December 31, 2001. The decrease was primarily due to a decrease in the number of employees. During the nine-month periods ended December 31, 2002 and 2001, we employed an average of 42 and 50 employees, respectively.

We recorded a non-cash compensation charge of $720,000 during the nine months ended December 31, 2002 for the cost of shares issued to Frederic W. Ritterieser, our former Chief Executive Officer, in connection with his separation agreement on April 15, 2002.

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Professional fees decreased 20.6% to $1,074,525 during the nine months ended December 31, 2002 from $1,353,656 during the nine months ended December 31, 2001. 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 $349,313 for the nine months ended December 31, 2002 from $837,580 during the nine months ended December 31, 2001. Legal fees increased 69% to $431,531 during the nine months ended December 31, 2002 from $255,378 during the three months ended December 31, 2001. Recruiting fees of $152,811in the nine months ended December 31, 2002 related to the hiring of our Chief Executive Officer were not incurred in the same period last year.

Brokerage, clearing and exchange fees decreased to $1,151,915 for the nine months ended December 31, 2002 from $2,502,9442 for the nine months ended December 31, 2001. This decrease is a result of a decrease in certain clearing and execution costs per share, and fewer fees paid to third party liquidity providers.

Depreciation for the nine-month period ended December 31, 2002 decreased 9.7% to $636,578 from $705,091 for the nine-month period ended December 31, 2001. Capital expenditures increased to $177,849 for the nine months ended December 31, 2002 compared to $142,585 in the same period last year.

We recorded a loss on proprietary trading activities of $265,866 and $375,479 during the nine months ended December 31, 2002 and 2001, respectively. We began trading in July 2002 through Vie Securities after being inactive since January 2002, to test our proprietary VWAP algorithm and to offer liquidity to Vie Institutional Services on a limited basis. $134,260 of the loss during the nine months ended December 31, 2002 was related to the algorithm testing, and the balance represents the cost of providing liquidity to Vie Institutional Services for its customers.

Selling, general and administrative expenses totaled $2,250,351 and $2,508,030 for the nine months ended December 31, 2002 and 2001, respectively. The 10.3% decrease is primarily a result of a decrease in occupancy expenses, communication expenses, and travel and entertainment expenses. Occupancy expenses decreased $155,330 or 23% due primarily to the renegotiation of our lease at 1900 Market Street in Philadelphia. Our communications expenses decreased approximately $149,160 or 27% due to the cancellation or renegotiation of various contracts. Travel and entertainment expenses decreased by approximately $137,638 or 51% due to less traveling and a focus on decreasing such costs during the period. Insurance premiums increased $284,041 or 68% as a result of increased directors’ and officers’ coverage, higher premiums, and an additional policy covering the directors who resigned from the board of directors upon the completion of the transactions with Innovations for one year.

Interest income decreased to $44,717 for the nine months ended December 31, 2002 from $99,376 for the nine months ended December 31, 2001, as a result of the lower interest rates and lower average cash and cash equivalents balances.

Interest expense of $1,132,668 for the nine months ended December 31, 2002 was comprised primarily of $485,565 related to the secured convertible note that we executed with Innovations on May 7, 2002, $423,147 related to the secured convertible notes with RGC and $177,419 on the short-term note with HK Weaver (see “Notes to Unaudited Consolidated Financial Statements”). Interest expense of $205,976 for the nine months ended December 31, 2001 was related to the secured convertible note that we executed with RGC on July 10, 2001.

Other expense for the nine months ended December 31, 2001 includes a charge of $515,600 related to the arbitration award in favor of the former president of eMC, a loss of $36,215 on the note receivable from CSI, 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.

Equity in (loss) income of affiliates amounted to ($233,852) and $251,485 for the nine-month periods ended December 31, 2002 and 2001, respectively. The amount in 2002 represents the write off of our investment in KAA of $189,653 and the write-down of our investment in Gomez of $44,200. The amount in 2001 represents our portion of the net income of KAA.

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Discontinued Operations

On March 29, 2001, after being unable to find external funding or consummate a sale of our majority-owned subsidiary eMC to a third party, eMC’s board of directors voted 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.

We recognized a loss on the discontinued operations of eMC of $840 during the nine months ended December 31, 2002, compared to a loss of $6,943 and a gain on the disposal of eMC of $601,267, or net income of $0.02 per share during the nine months ended December 31, 2001. The gain on the disposal of eMC during the nine months ended December 31, 2001 was a result of liabilities settled during the period.

Liquidity and Capital Resources

At December 31, 2002, we had total assets of $5,915,352 compared to $2,786,631 at March 31, 2002. Current assets at December 31, 2002 totaled $4,542,546 and current liabilities from continuing operations were $1,055,033. Stockholders’ deficiency decreased to $1,817,227 at December 31, 2002 from $4,284,276 at March 31, 2002 due primarily to the equity investments made by Innovations, SOFTBANK, and DFJ ePlanet.

At December 31, 2002, our principal source of liquidity was cash and cash equivalents of $4,093,564, compared to cash and cash equivalents of $635,087 at March 31, 2002. The increase in cash and cash equivalents is primarily a result of the investments by Innovations, SOFTBANK, and DFJ ePlanet.

We believe our current cash position of $4,093,564 will be sufficient to fund our operations until we are able to generate sufficient revenues to fund our operations. If we are unable to attain profitability or obtain additional funding in the near term, we may be unable to continue operating.

Included in our cash balance is approximately $1.7 million which is invested in the net capital of our broker-dealer operations. We believe that our current cost structure and level of net capital are sufficient to allow us to expand our business as planned and to achieve our targeted revenues, however there is no assurance that we will be able to do so. If necessary, we may seek to further reduce our cost structure or use a portion of our excess net capital to fund our operations. If we use net capital for such purposes, our broker-dealer business operations may be limited, and we may be unable to grow and increase revenues at the rate we anticipate, which could adversely affect our financial condition and operating results.

We are seeking 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 or 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.

Investment by OptiMark Innovations, Inc.

On May 7, 2002, we closed the transactions contemplated by the securities purchase agreement with Innovations dated as of February 4, 2002, as amended. Pursuant to the purchase agreement, we issued 608,707,567 shares of our common stock to Innovations in consideration for $7,272,727 in cash, 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 52,870,757 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, Innovations and Vie Financial Group.

Investment by SOFTBANK and DFJ ePlanet

On December 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 and SOFTBANK Capital Partners LP, SOFTBANK Capital Advisors Fund LP and SOFTBANK Capital LP, each a

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Delaware limited partnership (SOFTBANK), and 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). The lenders are investors in entities that own or control a majority of our outstanding common stock. The lenders may convert all or any portion of the outstanding loan until their maturity on May 4, 2006 into shares of our common stock at a conversion price of $0.0448 per share, subject to certain adjustments.

Equity Line of Credit

On July 10, 2001, we entered into an amended equity line arrangement with Jameson Drive LLC. The equity line is in the form of a securities purchase agreement and provides for the purchase by Jameson of up to $15 million worth of shares of our common stock over a 24-month period. We may request a draw on the equity line by selling common stock to Jameson, and Jameson is obligated to buy the shares, subject to the terms of the agreement. During the year ended March 31, 2002, we drew down gross proceeds of $1.8 million on the equity line by selling 12,132,865 shares of common stock to Jameson.

There are a number of conditions that we must satisfy before Jameson is obligated to buy our shares under the equity line, including that a registration statement covering the resale of the shares purchased by Jameson is declared effective by the SEC and remains effective. We filed a registration statement on Form S-2 covering the resale of 7,500,000 shares of stock issued under the equity line. That registration statement was declared effective on August 20, 2001, and we have already issued the maximum number of shares covered by that registration statement. Therefore, we are unable to access the equity line by issuing any additional shares until another registration statement covering the resale of such shares is filed by us and declared effective by the SEC. There is no guarantee that in the future we will be able to meet these or any other conditions under the securities purchase agreement or the registration rights agreement with Jameson, or that we will be able to make any additional draws on the equity line.

Under the agreement, we must draw a minimum of $2.5 million over the term of the agreement, and are limited to drawing a maximum of $15 million. In order for us to fulfill our obligation to sell a minimum of $2.5 million to Jameson, we would be required to draw an additional $700,000. Based on the November 4, 2002 closing price of our common stock of $0.06 per share, we would be required to issue an additional 12,962,963 shares of common stock to satisfy this obligation. We have informed Jameson that our preference is to terminate this agreement without drawing down additional funds. We have not concluded discussions with Jameson and there is no certainty that we will be successful in terminating this agreement on terms acceptable to both parties.

Additional Factors That May Affect Future Results

Forward-looking statements in 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:

Risks Related to Our Financial Condition

If demand for our products and services fails to grow, we may never achieve profitability

We have never realized an operating profit and have reported significant losses. As of December 31, 2002, we have accumulated losses of approximately $94.3 million. If we are unable to attain profitability or obtain additional funding in the near term, we may be unable to continue operating.

We were founded in 1994 as a development stage company. We derived all of our revenues in the three-and nine- month periods ended December 31, 2002 on a per transaction basis for securities trades executed through our broker-dealer subsidiaries. Approximately 76% of the revenues during the nine months ended December 31, 2002 were from transactions with two customers. We can give no assurance that we will successfully develop additional products or obtain additional customers, or that the marketplace will accept any new products we are able to develop. Our future success will depend on continued growth in demand for our electronic trade execution services, and our ability to respond to regulatory and technological changes and customer demands. If demand for

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our products and services fails to grow at the rate we anticipate and we are unable to increase revenues, then our business, financial condition and operating results will be materially and adversely affected.

We may need additional financing to fund our operations and strategic initiatives

We believe that our cash should be sufficient to fund our operations until we are able to generate sufficient revenues to fund our operations. Our cash position as of December 31, 2002 is $4,387,051. Included in our cash balance is approximately $2.3 million which is invested in the net capital of our broker-dealer operations. We believe the current level of net capital is sufficient to allow us to expand our business as planned and to achieve our targeted revenues. If necessary, we may seek to use a portion of our excess net capital to fund our operations. However, if we use net capital for such purposes, our broker-dealer business operations may be limited, and we may be unable to grow and increase revenues at the rate we anticipate, which could adversely affect our financial condition and operating results.

We are seeking to raise additional financing which may 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. These financing strategies would likely impose operating restrictions on us or 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.

Our business is highly volatile and our quarterly results may fluctuate significantly

We have experienced an increase in volatility of trading volume executed through our systems from session to session during the past year. These fluctuations have a direct impact on our operating results and cause significant fluctuations in our day-to-day profitability. We cannot be certain that the volatility in our daily trading volume will not continue. Moreover, the continued volatility in the securities markets could result in significant proprietary trading losses. These losses could have a material adverse effect on our business, financial condition and operating results. If demand for our current services declines and/or never materializes for our future products and services, and we are unable to adjust our cost structure on a timely basis, it could have a material adverse effect on our business, financial condition and operating results.

Our revenues may 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 from our trading activities. Lower price levels of securities also may result in reduced trading activity and reduce our revenues from 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.

We are subject to net capital requirements that could limit our operations

A significant operating loss or any unusually large charge against our net capital could adversely affect our ability 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 sanctions, 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.

We may be subject to lawsuits that could seriously harm our operating results and financial condition

We may be subject to claims as a result of one or more of the matters described below. 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.

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Risks Related to Your Investment in Our Common Stock

Sales of our shares by Innovations and other stockholders may depress our stock price

Our 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 to register the resale of these shares of common stock under certain conditions. SOFTBANK and DFJ ePlanet also have rights to acquire 53,571,429 shares of our common stock upon conversion of notes and an additional 8,928,571 shares of our common stock upon exercise of warrants. In addition, we have certain contractual obligations to register the resale of additional shares of common stock owned by other stockholders. The future public sale of our common stock by Innovations and other stockholders that may control blocks of our common stock, and the conversion of our derivative securities and public sale of the common stock underlying these derivative securities, could dilute our common stock and depress its market value. These factors could also make it more difficult for us to raise funds through future offerings of common stock.

If we issue additional shares of our common stock upon the exercise of options or warrants or the conversion of our convertible note, or if we raise additional capital through the issuance of new securities, you will incur dilution and our stock price may decline

Innovations 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 December 31, 2002, we have outstanding options and warrants that may be exercised for an aggregate of 200,745,174 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

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common stock increases without a corresponding increase in the number of shares of common stock that you hold, you will incur dilution.

Your common stock may be adversely affected by our delisting from the Nasdaq National Market

On November 7, 2001, our common stock was delisted from the Nasdaq National Market and began trading on the OTC Bulletin Board. Our stock was delisted as a result of our inability to maintain compliance with the minimum net tangible assets/ shareholders’ equity requirement for continued listing on the Nasdaq National Market as required by Nasdaq Marketplace Rules. Our delisting could have an adverse effect on the liquidity of our common stock and upon your ability to obtain an accurate quotation as to the price of our common stock. In addition, it could be more difficult for us to raise funds through future offerings of common stock.

We do not expect to pay common stock dividends

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 and financial condition.

Risks Related to Our Management

Recent management changes will impact our business direction

Our future success depends upon the experience, skills and working relationship of our new management team. On October 9, 2002, we hired Dean Stamos to be our new Chief Executive Officer. We also have a new President and Chief Operating Officer, and a new Chief Financial Officer. The near-term success of our business will depend on the successful integration of these new members of our management team. The longer-term success of our operations will depend in large part upon the hiring and retention of key personnel, which may require, among other things, execution of acceptable employment 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.

Sales or grants of stock to our employees and key individuals will reduce your 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 190,221,115 shares of common stock for issuance pursuant to our 2002 Option Plan, 6,450,000 shares of common stock for issuance pursuant to our 1998 Stock Option Plan, 2,550,000 shares of common stock for issuance pursuant to our 1999 Stock Option Plan and 3,000,000 shares of common stock for issuance pursuant to our 2000 Incentive Plan.

Our principal stockholder exercises control over all matters submitted to a vote of stockholders and may not act in the interests of our other stockholders

Our principal stockholder, Innovations, owns 608,707,567 shares of our common stock and has rights to acquire an additional 52,870,757 upon conversion of a note. Innovations’ holdings represent approximately 88% of our outstanding capital stock, and approximately 89% of our outstanding common stock assuming conversion of the convertible 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:

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As a result of Innovations’ control, potential acquirers may be discouraged from seeking to acquire control through the purchase of our common stock, which could have a depressive effect on the price of our securities and will make it less likely that stockholders receive a premium for their shares as a result of any such attempt.

In addition, as long as Innovations owns at least 20% of our common stock, Innovations will retain control over certain corporate decisions affecting us, including:

As disclosed in a Schedule 13D filed by OptiMark Holdings, Inc. on May 17, 2002, OptiMark Holdings, Inc., OptiMark, Inc., a subsidiary of OptiMark Holdings, Inc., and the other stockholders of Innovations have entered into an agreement whereby the parties agreed to use their best efforts to consummate a merger of Innovations with and into Vie Financial Group. Pursuant to the agreement, upon consummation of the merger, each stockholder of Innovations would receive the number of shares of our common stock proportionate to such stockholder’s interest in Innovations prior to the merger. The agreement contemplates that the merger shall take place any time after December 31, 2003, but not later than December 31, 2008.

Risks Related to Our Operations

Our growth may place strains on our managerial, operational and financial resources

Our business is characterized 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.

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 may require implementation of new and improved trading, communications and information systems. There can be no assurance that a significant increase in trading volumes or the introduction of new or multiple products will not result in systems failures or have a material adverse effect on our operating results.

Our trading activities expose our capital to potential losses

We engage in securities trading activities, predominantly through our subsidiary Vie Securities acting as principal. These activities include the purchase, sale or short sale of securities and derivative securities for our own account. These activities are subject to a number of risks including price fluctuations and rapid changes in the liquidity of markets, all of which subjects our capital to significant risks.

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Our compliance and risk management methods might not be fully effective in reducing our exposure to losses

There can be no assurance that our risk management and compliance procedures will be adequate or effective 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 for assuring compliance with applicable rules and regulations has changed as the size and complexity of our business has increased. We plan to continue to revise formal compliance procedures for the proprietary trading system we are operating through our subsidiary Vie Securities.

Our brokerage operations expose us to liability for errors in handling customer orders

Errors in performing clearing services or execution services, including clerical and other errors related to the handling customer orders could lead to regulatory sanctions and civil penalties imposed by applicable authorities as well as potential losses and liability resulting from lawsuits brought by customers or others. We provide execution services to each of our trading system customers and execute orders on behalf of each of our broker-dealer affiliates. In conjunction with our clearing brokers, we provide clearing services, which include the confirmation, receipt, settlement and delivery functions, involved in securities transactions.

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

We rely on 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 may 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, including transaction summaries, data feeds for compliance and risk management, execution reports and trade confirmations. These systems may experience systems failure, interruptions, capacity constraints, or other errors.

Financial or other problems experienced by third parties could have an adverse effect on our business and our operating results

We are exposed to credit risk from third parties that owe us money, securities, or other obligations. Any failure by these third parties to 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.

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

Our business and operating results are 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 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.

Risks Related to Our Technology and Products

We will be dependent on new and existing transaction products to generate revenues

Our future revenues will depend 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 such acceptance 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 number of such customers.

We may receive a substantial portion of our order flow through electronic communications gateways, including a variety of computer-to-computer interfaces and the Internet. Our electronic brokerage services involve alternative forms of order execution. Accordingly, substantial marketing, sales efforts and strategic relationships may

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be necessary to educate and acquire prospective customers regarding our electronic brokerage services and products. There can be no assurance that our marketing, sales efforts and strategic initiatives will be successful in educating and attracting new customers.

If any of our computer and communications systems fail, our business will be adversely affected

Any computer or communications system failure or decrease in computer systems performance that causes interruptions in our operations could have a material adverse effect on our business, financial condition and operating results. We currently do not provide our customers with backup trading systems or complete disaster recovery systems.

Our 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 could cause our computer systems to operate at an unacceptably low speed or even fail. We cannot assure you that our network protections will work. Any significant degradation or failure of our computer systems 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 “bugs,” errors and malfunctions may expose us to losses

Complex 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 marketability and reputation of our 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 may be vulnerable to security breaches

Our 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.

We 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

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 third parties, including the New York Stock Exchange, the Consolidated Tape Association and the Securities Industry Automation Corporation. We then calculate the volume weighted average price information for the listed securities traded in our systems and distribute this information to our customers. We also use this information for pricing matched orders executed in our systems.

If these suppliers fail to supply accurate or timely information, our customers may develop an adverse perception of our trading systems and cease doing business with us. We may also be subject to claims for negligence or other theories based on the nature and content of information we provide our customers. Any liability arising from third party supplied data could have a material adverse effect on our financial condition and operating results.

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Our competitive position may be adversely affected by others’ unauthorized use of our intellectual property

Although 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. Our competitive position may also be adversely affected by the unauthorized use of our proprietary information. 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 operating results and financial condition.

We regard our products and 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. We rely primarily on a combination of trademark and trade secret protection, employee and third party confidentiality and non-disclosure agreements, license agreements, and other intellectual property protection methods to protect these property rights. However, we have not received any patent awards, nor have we filed for federal copyright protection relating to current product lines.

Risks Related to Our Industry

We are subject to risks associated with the securities industry generally

The securities business is subject to various risks, including 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.

We derive most of our revenue from trading in existing equity securities, including most of the securities in the S&P 500, Russell 1000, and Nasdaq 100 indices. Any reduction in revenues resulting from a decline in the secondary market trading volume for these equity securities could have a material adverse effect on our business and operating results. Additionally, further declines in cash flows into the U.S. equity markets or a slowdown in equity trading activity by broker-dealers and other institutional investors may have an adverse effect on the securities markets generally, and could result in lower revenues from our trading systems.

Our business could be adversely affected by extensive government regulation

The regulatory environment in which we operate is subject to change. New or revised legislation or regulations imposed by the SEC, other United States or foreign governmental regulatory authorities, self-regulatory organizations or the NASD could have a material adverse effect on our business. Changes in the interpretation or enforcement of existing laws and rules by these governmental authorities, self-regulatory organizations and the NASD could also have a material adverse effect on our business, financial condition and operating results. The SEC, the NASD, other self-regulatory organizations and state securities commissions require strict compliance with their rules and regulations.

Failure to comply with any of these laws, rules or regulations could 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 employees 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 regulation, changes in existing laws and rules, or changes in interpretations or enforcement of existing laws and rules often directly affect securities firms. We cannot predict what effect any such changes might have. Our business, financial condition and operating results may be materially affected by both regulations that are directly applicable to us and regulations of general application. Our levels of trading system activity and proprietary trading can be affected not only by such legislation or regulations of general applicability, but also by industry-specific legislation or regulations.

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Our industry is highly competitive

The SEC’s regulations governing alternative trading systems have lowered the barriers to entering the securities trading markets. We face competition from traditional securities exchanges, which could establish similar trading systems in an attempt to increase or retain their respective trade volumes. We also face competition from other alternative trading systems and leading brokerage firms offering similar trade execution services. In particular, our guaranteed liquidity program competes with services provided by traditional broker-dealers, proprietary trading firms such as Susquehanna, Timberhill/Interactive Brokers, and alternative trading systems established by companies such as Investment Technology Group, Instinet and Bloomberg.

Many of our competitors have substantially greater financial, research, development, sales, marketing and other resources than we have and many of their products have established operating histories. While we believe that our products and services offer certain competitive advantages, our ability to maintain these advantages will require continued investment in product development, additional marketing, and customer support activities. We may not have sufficient resources to continue to make these investments, while our competitors may continue to devote significantly more resources to their services. Also, we cannot be sure that our products will result in a competitive advantage to our customers.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We use various management tools to monitor our exposure to market risks. Our exposure to market risk has not changed materially from that described in our Annual Report on Form 10-K, as amended, for the fiscal year ended March 31, 2002. For a further discussion of our market risks and risk management policy, refer to Item 7AQuantitative and Qualitative Disclosure About Market Risk in our Annual Report on Form 10-K, as amended, for the fiscal year ended March 31, 2002.

ITEM 4.    CONTROLS AND PROCEDURES

(a)  Within 90 days prior to the date of the filing of this report, our Chief Executive Officer and Chief Financial Officer reviewed and evaluated the effectiveness of the design and operation of our disclosure controls and procedures, with the participation of our management. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have each concluded that our disclosure controls and procedures are effective and sufficient to ensure that we record, process, summarize and timely report information required to be disclosed by the Company under the Securities Exchange Act of 1934.

(b)  There have not been any significant changes in our internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies and material weaknesses subsequent to the date of our most recent evaluation of our internal controls. Internal controls and procedures are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial statements in conformity with generally accepted accounting principles.

PART II—OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

On May 20, 2002, Finova added us as a defendant in the case Finova Capital Corporation v. OptiMark Technologies, Inc., OptiMark, Inc and OptiMark Holdings, Inc., Docket No.: HUD-L-3884-01, Superior Court of 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, late charges, litigation costs and expenses) for, among other things, fraudulent conveyance of certain assets comprised, at

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least in part, of the intellectual property and non-cash assets we acquired from Innovations pursuant to our securities purchase agreement with them. Pursuant to an indemnification agreement OptiMark US Equities, Inc. will indemnify us from any claims relating to the alleged fraudulent conveyance. 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.

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.    OTHER INFORMATION

None.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

A current report on Form 8-K was filed on November 14, 2002 that included Item 7. “Financial Statements and Exhibits” and Item 9. “Regulation FD Disclosure.”

A current report on Form 8-K was filed on January 3, 2003 that included Item 5. “Other Events.”

SIGNATURES

In accordance with the requirements of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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CERTIFICATIONS PURSUANT TO RULE 13A-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Dean Stamos, Chief Executive Officer, certify that:

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

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

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

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

a)  designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)  evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c)  presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

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

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

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

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

February 14, 2003

/s/ Dean Stamos                    

Dean Stamos

Chief Executive Officer

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CERTIFICATIONS PURSUANT TO RULE 13A-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, James S. Pak, Chief Financial Officer, certify that:

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

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

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

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

a)  designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)  evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c)  presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

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

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

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

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

February 14, 2003

/s/ James S. Pak                    

James S. Pak

Chief Financial Officer

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