OPTIMARK HOLDINGS INC - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

/x/ Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934

For the fiscal year 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 000-30527

OPTIMARK HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 22-3730995
(State or Other Jurisdiction of (I.R.S.-Employer
Incorporation or Organization) Identification No.)

1114 Avenue of the Americas, 22nd Floor,
New York, NY 10036
(Address of Principal Executive Offices) (Zip Code)

(212) 575-9314
(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

None

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, Par Value $.01 Per Share

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 / / No / X /

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

No sales of the common equity of the Registrant have been
consummated within sixty days of this filing and the
Registrant's common equity is not publicly traded on an exchange
for purposes of establishing bid and ask prices. Therefore, the
Registrant is unable to state the aggregate market value of the
voting and non-voting common equity held by non-affiliates of
the Registrant.

As of March 31, 2003, there were 33,369,913 shares of the
Registrant's common stock outstanding.

Documents Incorporated by Reference

None.

OPTIMARK HOLDINGS, INC.
FORM 10-K
DECEMBER 31, 2002

TABLE OF CONTENTS

PART I

Item 1. Business

Item 2. Properties

Item 3. Legal Proceedings

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

PART II

Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters

Item 6. Selected Financial Data

Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations

Item 7A. Quantitative and Qualitative Disclosure
About Market Risk

Item 8. Financial Statements

Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure

PART III

Item 10. Directors and Executive Officers of the
Registrant

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial
Owners and Management

Item 13. Certain Relationships and Related
Transactions

Item 14. Controls and Procedures

PART IV

Item 15. Exhibits, Financial Statement Schedules and
Reports on Form 8-K

Signatures

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K includes forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. These statements are based on
our beliefs and assumptions, and on information currently
available to us. Forward-looking statements include the
information concerning our possible or assumed future results of
operations set forth in Part II, Item 7 - " Management's
Discussion and Analysis of Financial Condition and Results of
Operations." Forward-looking statements also include statements
in which words such as "expect", "anticipate", "contemplate",
"intend", "plan", "believe", "estimate", "consider" or similar
expressions are used.

Forward-looking statements are not guarantees of future
performance. They involve risks, uncertainties and assumptions,
including the risks discussed under the heading, "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and elsewhere in this Form 10-K. Such risks,
uncertainties and assumptions include, but are not limited to,
those factors described in Part II, Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," under the sub-heading "Factors that may affect
future results." The factors described in that section are
incorporated herein by reference.

Our future results and stockholder values may differ
materially from those expressed in these forward-looking
statements. Many of the factors that will determine these
results and values are beyond our ability to control or predict.
Investors are cautioned not to put undue reliance on any
forward-looking statements. In addition, we disclaim any
intention or obligation to update forward-looking statements
after the filing of this Annual Report, even if new information,
future events or other circumstances have made them incorrect or
misleading. For these statements, we claim the protection of
the safe harbor for forward-looking statements contained in
Section 21E of the Exchange Act.

Statements made in this Annual Report on Form 10-K as to
the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each
such contract, agreement or other document filed as an exhibit
to this Annual Report on Form 10-K, we refer you to the exhibit
to this Annual Report on Form 10-K referencing the item for a
more complete description of the matter involved, and each such
statement is qualified in its entirety by such reference.

PART I

ITEM 1. BUSINESS

OptiMark Holdings, Inc. ("Holdings") was established as a
holding company on June 12, 2000 as the result of a
reorganization of the company formerly known as OptiMark
Technologies, Inc. OptiMark Technologies, Inc. was the successor
to the company founded in 1996 to begin development of software
for use in an electronic system for trading stocks and other
financial instruments, goods and services.

Holdings has two wholly-owned subsidiaries: (1) OptiMark,
Inc. ("OptiMark") and (2) OptiMark US Equities, Inc.
("Equities"). On December 28, 2001, OptiMark formed a majority-
owned subsidiary, OptiMark Innovations Inc. (formerly known as
OTSH, Inc. and referred to below as "Innovations"). Innovations
was capitalized on December 31, 2001, and OptiMark currently
holds 33% of the voting interests in Innovations as more fully
described below.

In this report, Holdings, OptiMark and Equities are
referred to collectively as the "Company," "our," and/or "we."

HOLDINGS

Holdings' principal business is to hold the securities of
OptiMark and, through OptiMark, Innovations. Until September
19, 2000, Holdings operated in two segments, the Exchange
Solutions Services Business and the US Equities Business. The
Exchange Solutions Services Business operated by OptiMark was
formerly referred to as the Electronic Markets Business and
developed software and provided design, development and
maintenance services for building and operating electronic
markets and exchanges. On or about January 30, 2002, OptiMark
effectively suspended development, sales and marketing efforts
related to its Exchange Solutions Services Business.

The second segment, the US Equities Business, was operated
by Equities. Prior to September 19, 2000, the US Equities
Business owned and operated exchanges or exchange facilities
which used the OptiMark software and services. This business
was discontinued on September 19, 2000 due to high fixed costs
and lack of revenue resulting from the failure of these
proprietary exchange facilities to attract users or liquidity.

As a result of the suspension of the Exchange Solutions
Services Business and the discontinuation of the US Equities
Business, the future value of Holdings' common stock will depend
principally on the value of the investment that Innovations made
in Vie Financial Group, Inc. ("Vie," formerly known as The Ashton
Technology Group, Inc.) on May 7, 2002 and on other transactions
that the Company may consummate.

OptiMark continues to attempt to solicit interest from or
opportunities with third parties concerning possible additional
investments or strategic alliances. However, no binding or
definitive arrangements have been reached with any third parties
and there can be no assurances that any such transactions will
be consummated.

In the event that the Company cannot obtain additional
financing or capital contributions by the end of May 2003,
Holdings would not have access to sufficient financial capital
to permit continued business operations. Accordingly, Holdings
would face the imminent and likely potential for bankruptcy or
liquidation. If Holdings is forced to declare bankruptcy or
pursue liquidation, the value of Holdings' assets may not be
sufficient to pay its creditors in full and, accordingly,
Holdings' common and preferred stock would have no value.

INNOVATIONS

Formation of Innovations

Innovations was incorporated in Delaware on December 28,
2001. Innovations has authorized capital stock of 7,000 shares
of common stock, par value $.01 per share (the "Innovations
Common Stock"), and 3,000 shares of preferred stock, par value
$.01 per share (the "Innovations Preferred Stock"). Innovations
has designated 2,000 shares of the Innovations Preferred Stock
as "Non-Qualified Preferred Stock," which has a cumulative
preferred dividend at an annual rate of $500 per share, payable
when and if declared by the Board of Directors of Innovations.
The liquidation preference of the Non-Qualified Preferred Stock
is equal to $10,000 per share plus the aggregate amount of
accrued and unpaid dividends or distributions. The Non-
Qualified Preferred Stock is also subject to a mandatory
redemption, at a price equal to the liquidation preference
amount, in four equal quarterly installments on December 31,
2016, March 31, 2017, June 30, 2017 and September 30, 2017.

Innovations has designated 1,000 shares of the Innovations
Preferred Stock as "Series B Preferred Stock," which has a
cumulative preferred dividend at an annual rate of $519.21 per
share, payable when and if declared by the Board of Directors of
Innovations. The liquidation preference of the Innovations
Series B Preferred Stock is equal to $10,389.61 per share plus
the aggregate amount of accrued and unpaid dividends or
distributions.

All of the Innovations Preferred Stock is non-voting.

Investment Structure

On December 31, 2001, OptiMark received 200 shares of
Innovations Common Stock in exchange for a cash payment of
$500,000 and 2,000 shares of Non-Qualified Preferred Stock in
exchange for the transfer to Innovations of certain intangible
assets consisting of software, a patent application and other
assets relating to a securities trading technology which is
under development (the "Assets"). The stated value of the Non-
Qualified Preferred Stock was the result of the evaluation by
the board of directors of Innovations of the value of the Assets
based, in part, upon preliminary discussions with independent
parties regarding an approximate $10,000,000 investment for a
one-third interest in Innovations (see below). SOFTBANK Capital
Partners LP, SOFTBANK Capital LP and SOFTBANK Capital Advisors
Fund LP (collectively, "SOFTBANK") received 100 shares of
Innovations Common Stock (the "SOFTBANK Shares") for $250,000
cash. Simultaneously, SOFTBANK's remaining obligation to
purchase shares of Series E Cumulative Preferred Stock ("Series
E Preferred Stock") from Holdings pursuant to that certain
Series E Preferred Stock Purchase Agreement, dated as of June
29, 2001 (as amended on August 16, 2001 and November 16, 2001),
by and among Holdings and SOFTBANK was reduced by $250,000.
Upon its formation and initial capitalization, Innovations'
aggregate assets consisted of the Assets and $750,000 in cash.

On April 30, 2002, Draper Fisher Jurvetson ePlanet
Ventures, L.P., Draper Fisher Jurvetson ePlanet Partners Fund,
L.L.C. and Draper Fisher Jurvetson ePlanet Ventures GmbH & Co.
KG (collectively, "Draper") purchased 150 shares of the
Innovations Common Stock for an aggregate cash purchase price of
$375,000. On May 7, 2002, Draper purchased 963 shares of the
Innovations Series B Preferred Stock for an aggregate cash
purchase price of $9,630,000.

In connection with the Series B Preferred Stock
subscription, Holdings, OptiMark, Innovations, Draper and
SOFTBANK entered into an amended and restated Investors' Rights
Agreement (the "Innovations Rights Agreement"). Pursuant to the
terms of the Innovations Rights Agreement, Draper received (i)
preemptive rights to subscribe for future sales by Innovations
of any shares of, or securities convertible into or exercisable
for any shares of, any class of Innovations capital stock, (ii)
registration rights and (iii) the right to designate two (2)
directors to Innovations' board of directors.

Through the subscription for Innovations Common Stock and
Series B Preferred Stock by Draper, Innovations obtained the
cash financing necessary to (a) pay the approximately $7.3
million portion of the purchase price for Vie's common stock and
(b) provide the principal amount of approximately $2.7 million
for the senior loan to Vie evidenced by Vie's secured
convertible note.

Put and Call Rights of SOFTBANK and Holdings

Pursuant to the terms of the Innovations Rights Agreement,
SOFTBANK and Holdings agreed to certain put and call rights
applicable to the SOFTBANK Shares as follows:

First Call Right of Holdings on SOFTBANK Shares

The Independent Committee (the "Independent Committee") of
Holdings' Board of Directors has the right commencing October
1, 2002 and exercisable until September 30, 2003, to recommend
to the Board of Directors that Holdings purchase all, but not
less than all, of the SOFTBANK Shares for $100,000 in cash and
13,334 shares of Series E Preferred Stock of Holdings. If the
Board of Directors accepts such recommendation, SOFTBANK would
be obligated to sell the SOFTBANK shares for that consideration.

Liquidity Event Discretionary Call of Holdings on SOFTBANK Shares

Upon the occurrence of a Liquidity Event (defined below) on
or before September 30, 2003, the SOFTBANK Shares will be
purchased by Holdings for $100,000 in cash and 13,334 shares of
Series E Preferred Stock of Holdings. A "Liquidity Event" means
any of the following: (i) Innovations' sale, conveyance or other
disposition of all or substantially all of its assets; (ii) the
acquisition of Innovations by another entity by means of merger
or consolidation resulting in the exchange of the outstanding
shares of Innovations for securities or other consideration
issued, or caused to be issued, by the acquiring entity or its
subsidiary, unless the stockholders of Innovations immediately
prior to the consummation of such transaction hold at least 50%
of the voting power of the surviving corporation as a result of
such transaction; (iii) the consummation by Innovations of a
transaction or series of related transactions, including the
issuance or sale of voting securities, if the stockholders of
Innovations immediately prior to such transaction (or, in the
case of a series of transactions, the first of such
transactions) hold less than 50% of the voting power of
Innovations immediately after the consummation of such
transaction (or, in the case of a series of transactions, the
last of such transactions); or (iv) any initial underwritten
public offering of Innovations Common Stock. Notwithstanding
the foregoing, Holdings will not exercise this call option in
the event that the Independent Committee recommends that
Holdings not purchase the SOFTBANK Shares.

Mandatory Call of Holdings on SOFTBANK Shares

In the event that: (i) the call rights of Holdings
described above have not been exercised on or before September
30, 2003, (ii) the Independent Committee no longer exists and
(iii) no independent directors serve on the Holdings Board of
Directors and, after reasonable good faith efforts by the
remaining members of the Holdings Board of Directors, no
independent persons qualified to serve on the Holdings Board of
Directors have been found or, if found, are not willing to serve
on the Holdings Board of Directors, then the Holdings Board of
Directors will engage an independent investment banking,
accounting or third party valuation firm to evaluate whether or
not it is in the best interests of Holdings that it purchase the
SOFTBANK Shares. If such third party determines it is in the
best interests of Holdings to purchase the SOFTBANK Shares,
Holdings will be obligated to purchase such shares on or before
December 31, 2003 for $100,000 in cash and 13,334 shares of
Series E Preferred Stock of Holdings.

First Put Right to Holdings of SOFTBANK Shares

SOFTBANK has the right, commencing on October 1, 2002 and
continuing until September 30, 2003, to put all, but not less
than all, of the SOFTBANK Shares to Holdings in exchange for
16,667 shares of Series E Preferred Stock of Holdings.

Second Put Right to Holdings of SOFTBANK Shares

In the event that no put of, or call on, the SOFTBANK
Shares has been exercised by October 31, 2003, then commencing
on November 1, 2003 and continuing until November 30, 2003,
SOFTBANK has the right to require Holdings to purchase all, but
not less than all, of the SOFTBANK Shares for 16,667 shares of
Series E Preferred Stock of Holdings.

Business of Innovations

The principal business of Innovations is to hold Vie's
common stock for the benefit of the shareholders of Holdings and
Innovations. Holdings believes that the future value of its
stock will depend principally on the value of Ashton's common
stock held by Innovations and its ability to consummate
financing and strategic transactions with other parties.

On February 4, 2002, Vie and Innovations entered into a
securities purchase agreement (as amended on March 6, 2002 and
May 3, 2002, the "Securities Purchase Agreement"). Pursuant
to the terms of the Securities Purchase Agreement, Innovations
agreed to purchase up to 633,433,600 shares of Vie common
stock, par value $.01 per share (the "Vie Common Stock"), in
exchange for $7,272,727 in cash and intellectual property and
other non-cash assets of Innovations valued by Vie and
Innovations for the purposes of the Securities Purchase Agreement
at $20 million. The value ascribed to the intellectual property
and other non-cash assets by OptiMark Innovations was based in
part on preliminary discussions with a potential investor in
Innovations. Vie did not obtain an appraisal or other third
party valuation of the fair market value of the intellectual
property and other non-cash assets. There can be no assurance
that the fair market value of the inellectual property and
other non-cash assets is equal to the value ascribed to these
assets by Innovations in the Securities Purchase Agreement.

On May 7, 2002 (the "Closing Date"), Innovations and Vie
closed the transactions contemplated by the Securities Purchase
Agreement.

In addition, pursuant to the terms of the Securities
Purchase Agreement, Innovations loaned approximately $2.7 million
in cash to Vie in exchange for a senior secured convertible note
(the "Note"). The Note will mature in five years, and may, at the
option of Innovations, be convertible into shares of Vie Common
Stock at a rate of $.0515838 per share (subject to customary
anti-dilution adjustments after the closing) and will accrue
interest at a rate of 7.5% per annum. Currently, The Note is
convertible into 52,870,757 shares of Vie Common Stock. The Note
is secured by a pledge and security agreement pursuant to which
Innovations has received a blanket lien on Vie's assets, including,
without limitation, the pledge of the equity interests of Vie and
Universal Trading Technologies Corporation, a Delaware
corporation and majority-owned subsidiary of Vie ("UTTC"), in
each of Vie Securities, LLC (formerly known as ATG Trading LLC),
wholly-owned subsidiary of Vie, Electronic Market Center, Inc., a
majority-owned subsidiary of Vie, Ashton Technology Canada, Inc.,
a majority-owned subsidiary of Vie, Vie Institutional Services,
Inc. (formerly known as Croix Securities, Inc.), a wholly-owned
subsidiary of UTTC, REB Securities Inc., a wholly-owned
subsidiary of UTTC; and NextExchange, Inc., a wholly-owned
subsidiary of UTTC.

As of the Closing Date, Innovations owned approximately 80%
of the fully-diluted outstanding shares of Vie Common Stock
calculated as of May 3, 2002. Fully-diluted shares include the
outstanding shares of Vie Common Stock and (i) shares of any
series of capital stock of Vie or its subsidiaries that vote
together with the Vie Common Stock, (ii) any outstanding options
issued to employees and third parties and (iii) shares of the
Vie Common Stock, or any securities described in clause (i)
above, issuable pursuant to or upon conversion or exercise of
all rights granted to any party. Assuming conversion of the
Note, Innovations would own approximately an additional 7% of
the fully-diluted shares of the Vie Common Stock, calculated as
of May 3, 2002.

The intellectual property and non-cash assets transferred
to Vie by Innovations as partial consideration to purchase the
Vie Common Stock are:

- - U.S. provisional patent application (No.
60/323,940 entitled "Volume Weighted Average
Price System and Method" filed on September 21,
2001) that relates to VWAP trading. The
provisional patent application relates to
processing orders for trading equity securities
at the VWAP and guaranteeing the price and
quantity of trades to users who submit orders.
The patent application will not provide any
exclusive rights to Ashton until such time as it
issues into a patent. There can be no assurance
that the patent application will issue into a
patent.

- - Trade secrets and know how relating to VWAP
trading.

- - An assignment to Vie of a license for technology
for use in a system for VWAP trading (the "VWAP
License").

- - An assignment to Vie of all rights, duties, and
obligations under a bilateral nondisclosure
agreement between the licensor of the technology
described above and Innovations.

- - Software developed to implement critical
components of the VWAP trading system, including
certain tools for testing, de-bugging and
building source code.

The intellectual property and non-cash assets described
above, with the exception of the VWAP License, constitute the
Assets transferred from OptiMark to Innovations on December 31,
2001.

While Innovations expects Vie to benefit from the cash and
non-cash assets transferred, Innovations cannot predict the
extent to which those benefits will occur. Specifically, there
can be no assurance that:

- - the performance characteristics of the software
and technology that is the subject of the VWAP
License will scale to the increased level of
operations anticipated in the New VWAP Service;

- - the intellectual property can achieve the desired
operational benchmarks; or

- - integration of the existing Vie technologies and
VWAP-related business models with the acquired
technologies and associated business models will
be feasible or possible.

As a result of obtaining the $10 million financing in
connection with the transactions contemplated by the Securities
Purchase Agreement, OptiMark's ownership percent of Innovations
was reduced to less than 50%. As a result, we will not be able
to include Innovations as a consolidated subsidiary, but will
account for our investment using the equity method of
accounting.

Vie

Because the future value of Holdings common stock is
principally dependent on the value of Innovations' investment in
transaction with Vie, a brief description of the current
business of Vie is provided.

The following description of Vie's business has been
adapted from the information contained in Vie's Quarterly Report
on Form 10-Q, filed with the SEC on February 14, 2003. We
conducted limited due diligence with respect to Vie's business.
Based solely on that limited review, we have no reason to
believe that Vie's description of its business is incorrect in
any material respect. The following description is not intended
to amend, modify or supplement Vie's disclosure regarding its
business contained in its public filings.

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
its automated trading platform Vie removes human elements of the
trading and order execution process, eliminating information
leakage. Vie's objective is to provide clients with high-
performance electronic trading that is fast, efficient and nearly
invisible to the market.

Vie conducts its business primarily through the following
operating subsidiaries:

- - Vie Securities, LLC (formerly ATG Trading, LLC)

- - Vie Institutional Services, Inc. (formerly Croix
Securities, Inc.)

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 its
buy-side institutional clients through its volume-weighted
average price (VWAP) trading products, direct access service, and
market-on-close products. Vie anonymously matches customers'
orders with liquidity from various providers, thereby protecting
its client trade information. Since May 2002, Vie launched four
new trading products including Limit VWAP, Point-to-Point VWAP,
Market on Close and Best Efforts VWAP. Vie operates Vie
Institutional Services as an agency broker that matches buy-side
institutional orders with other buy-side or liquidity provider
orders. Vie collects commissions from its customers and pay fees
to its 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, Vie is implementing its proprietary
trading algorithm that allows Vie to minimize its cost of
providing guaranteed liquidity at the VWAP to its broker-dealer
customers, including Vie Institutional Services, and specialized
trading firms.

OPTIMARK

On or about January 30, 2002, OptiMark effectively
suspended development, sales and marketing efforts related to
its Exchange Solutions Services Business. As of that date,
OptiMark became a company whose primary purpose is to hold the
securities of Innovations and to consummate financing and
strategic transactions with other parties.

Prior to and since January 30, 2002, OptiMark has engaged
in discussions with a number of potential investors and
strategic partners concerning possible investments and/or
alliances relative to the Exchange Solutions Services Business.
To date, none of these discussions has resulted in any such
investment or alliance. OptiMark continues to engage in
discussions with third parties in an effort to secure funding
for the Exchange Solutions Services Business; however, there can
be no assurances that any such transactions will be consummated.
OptiMark's VWAP assets utilized in the Vie transaction were part
of a general effort to determine ways to utilize OptiMark's
technology for trading venues to be owned and operated by
OptiMark. OptiMark has suspended development of additional
trading venues. At such time that either a third party provides
funding or OptiMark can realize a gain in the value of its
holdings in Innovations, OptiMark will determine whether to
further develop these additional platforms. However, there are
no assurances that these transactions will be consummated or
that any further development will occur.

Clients of OptiMark

As of December 31, 2001, OptiMark had definitive agreements
with two clients -- Asset International, Inc. ("Asset
International") and The Nasdaq Stock Market, Inc. ("Nasdaq").
Under an agreement dated November 3, 2000 with Asset
International, OptiMark has not received any revenues. For
approximately the past twelve months, OptiMark has not
performed, nor has Asset International requested that any
services be performed under the agreement. The Nasdaq contract,
as amended on April 27, 2001, expired on December 31, 2001. The
agreement with Asset International was terminated on May 24,
2002. OptiMark does not anticipate receiving any additional
revenues from either Asset International or Nasdaq.

Competition

Vie, Innovations, OptiMark and Holdings executed a non-
competition agreement as of May 2, 2002. The parties currently
do not compete. The Agreement precludes Innovations, OptiMark,
Holdings or any entity that they control from competing on a
worldwide basis with Vie in offering VWAP trading systems or
related services in U.S. and Canadian securities. The agreement
has a five-year term from the date of its execution.

As holding companies, Holdings, OptiMark and Innovations
face no clearly defined competition, however, the value of
Innovations' investment in Vie is, in part, contingent upon
Vie's competing effectively in its industry and marketplace.

The following description relating to the competitive
aspects of Vie's business has been adapted from the information
contained in Vie's Quarterly Report on Form 10-Q, filed with the
SEC on February 14, 2003. We have conducted limited due
diligence with respect to Vie's business. Based solely on that
limited review, we have no reason to believe that Vie's
description of the competitive aspects of its business is
incorrect in any material respect. The following description is
not intended to amend, modify or supplement Vie's disclosure
regarding competition contained in its public filings.

The SEC's regulations governing alternative trading systems
have lowered the barriers to entering the securities trading
markets. Vie faces competition from traditional securities
exchanges, which could establish similar trading systems in an
attempt to increase or retain their respective trade volumes. Vie
also faces competition from other alternative trading systems and
leading brokerage firms offering similar trade execution
services. In particular, Vie's 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 Vie's competitors have substantially greater
financial, research, development, sales, marketing and other
resources than Vie has and many of their products have
established operating histories. While Vie believes that its
products and services offer certain competitive advantages, its
ability to maintain these advantages will require continued
investment in product development, additional marketing, and
customer support activities. Vie may not have sufficient
resources to continue to make these investments, while its
competitors may continue to devote significantly more resources
to their services. Also, Vie cannot be sure that its products
will result in a competitive advantage to our customers.

Intellectual property and proprietary rights

As of December 31, 2001, the Company owned or controlled
six issued United States patents and nine pending United
States patent applications. One of the pending United States
patent applications was transferred to Vie as part of the
consideration for the purchase of the Vie Common Stock. As
of that date, the Company also owned or controlled seven pending
international patent applications. The Company plans to file one
additional patent application domestically and may file related
patent applications internationally. The Company has
discontinued prosecution of patent applications and maintenance
of patents that were deemed to be strategically unimportant,
either because of geography or subject matter.

The Company seeks to protect its trade secrets, service
marks, trademarks and copyrights through a combination of laws
and contractual restrictions, such as confidentiality and
license agreements. The Company attempts to register our
trademarks and service marks in the United States and
internationally. The Company has registered a corporate logo
and the mark "OPTIMARK," among others, in the United States and
internationally in several countries. However, effective
trademark, service mark, trade secret, and copyright protection
may not be available in all countries. The Company also has
discontinued prosecution of trademark applications and
maintenance of trademarks that were deemed to be strategically
unimportant, either because of geography or subject matter.

Employees

As of December 31, 2002, the Company had five full-time and
one part time employee, all of whom were engaged in executive,
finance, administration and personnel functions.

The Company has never had a work stoppage and our employees
are not represented by any collective bargaining unit.

The Company plans to continue to retain personnel to carry
out its duties and obligations as a holding company, including
its administration and financial reporting obligations.

Financial information about industry segments

Please refer to the financial statements for financial
information about our industry segments.

Discontinued operations

Until September 19, 2000, Holdings operated in two
segments, the Exchange Solutions Services Business and the US
Equities Business. The first segment, the Exchange Solutions
Services Business, was formerly referred to as the Electronic
Markets Business. On or about January 30, 2002, OptiMark
effectively suspended development, sales and marketing efforts
related to its Exchange Solutions Services Business, which
developed software and provided design, development and
maintenance services for building and operating electronic
markets and exchanges. The second segment, the US Equities
Business, was operated by Equities. Holdings discontinued the
operations of the US Equities Business on September 19, 2000.
As of that date all criteria for the measurement date per APB
30, "Reporting the Results of Operations -- Reporting the
Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," had been met. The Company expects the process of
disposing of the net liabilities of the discontinued business to
be completed by December 31, 2003 as a result of the continuing
settlement negotiations with certain companies from which we had
previously leased equipment. Disposition includes negotiated
payments to be made after December 31, 2003.

ITEM 2. PROPERTIES

The Company's headquarters are located in Jersey City, New
Jersey. We sublease approximately 32,000 square feet under a
sublease that expires in February 2014 and approximately 3,300
square feet with a remaining term to September 30, 2008. The
foregoing space consists of standard commercial office premises
in a metropolitan area. We believe that our present facilities
exceed our current needs and are attempting to reduce our office
space commitments.

ITEM 3. LEGAL PROCEEDINGS

Holdings and/or its subsidiaries are subject to
the following legal proceedings which the Company
believes arise out of the discontinuation of the
business of Optimark Equities in September 2000:

1. Finova Capital Corporation (Plaintiff) v.
OptiMark Technologies, Inc., OptiMark, Inc. and OptiMark
Holdings, Inc. (Defendants), Superior Court of New Jersey -
Hudson County. Plaintiff filed this action on June 15,
2001, asserting claims that allegedly arise out of an
equipment lease agreement pursuant to which it is alleged
that OptiMark Technologies, Inc. (now known as OptiMark US
Equities, Inc.) agreed to lease certain equipment.
Plaintiff contends that OptiMark Technologies, Inc.
breached the equipment lease by, among other things,
failing to pay the amounts due under the equipment lease.
Based on these allegations, Plaintiff has made claims for
breach of contract, tortuous interference, fraudulent
conveyance of such equipment lease agreement and/or the
related equipment and/or other assets from OptiMark
Technologies, Inc. to OptiMark, Inc. and/or OptiMark
Holdings, Inc. and damages in unspecified amounts exceeding
$6,000,000, plus interest, late charges, litigation costs
and expenses, and reasonable counsel fees. In the fourth
quarter of 2001, most, if not all, of the equipment that
was the subject of the equipment lease was returned
consensually to Plaintiff. Pursuant to motions filed by
the Plaintiff, Innovations and Vie were added as defendants
in the case. On February 14, 2002, Plaintiff made a motion
to add Innovations as a defendant in the case.

On March 19, 2003, subject to execution of definitive
documentation, we reached a settlement with Finova. The
terms of this settlement provide that we will pay Finova
the combined sum of $1,000,000 in the following manner: a)
$200,000 within thirty (30) days of the execution of the
written settlement agreement; b) $400,000 in January 2004;
and c) $400,000 in June 2004. We will provide Finova with
a consent judgment for the outstanding balance due on the
lease agreements in dispute - to be used only in the event
of a default under the terms of the settlement agreement.
The exact amount of the consent judgment shall be agreed to
by the parties based upon the amount due and owing under
the subject leases. In consideration of the foregoing,
Finova, upon receipt of the first payment of $200,000, will
provide all defendants to the litigation (namely, Optimark
U.S. Equities, Inc., Optimark, Inc., Optimark Holdings,
Inc., Optimark Innovations, Inc. (plead as OTSH, Inc.) and
Vie Financial Group (plead as Ashton Technology Group,
Inc.)) a release for all claims arising out of the lease
transaction between the parties as well as those additional
claims asserted, or those that could have been asserted, by
Finova against all defendants in the pending litigation.
Additionally, Finova also shall cause a Stipulation of
Dismissal, with prejudice, to be filed in the pending
action.

2. Comdisco, Inc. (Plaintiff) v. OptiMark Technologies, Inc.
(now known as OptiMark US Equities, Inc.) (Defendant) and
Avnet, Inc. State of Connecticut Superior Court, Judicial
District of Fairfield at Bridgeport. Plaintiff filed a
Complaint on December 18, 2000. The action seeks possession
of leased equipment, proceeds from the sale of
leased equipment, a deficiency judgment in an
unspecified amount, and fees and costs and interest. Since
the complaint was filed, most, if not all, of the equipment
was returned consensually to Plaintiff. Based on the
complaint filed in a related action in New Jersey
(described below) and on other information received from
Comdisco, it is believed that amount of damages claimed is
approximately $6,500,000. On March 30, 2001, the parties
agreed to consolidate a related case captioned Comdisco,
Inc. v. OptiMark Technologies, Inc., Superior Court of New
Jersey Law Division Hudson County (filed on January 23,
2001) with the Connecticut proceeding. To effect the
consolidation, on or about April 2, 2001, the parties filed
a stipulation withdrawing Defendant's motion to dismiss
Comdisco's Complaint filed in the Superior Court of New
Jersey. That motion had sought dismissal principally on
grounds that an identical action alleging breach of
contract had previously been filed by Comdisco in
Connecticut State Court. In exchange for Defendant's
agreement to withdraw its motion, Comdisco agreed to
withdraw its New Jersey Complaint without prejudice. In
June 2001, Comdisco made a motion for summary judgment with
respect to a claim against Avnet relating to a guaranty by
Avnet of Defendant's obligations under a Master Lease
Agreement for computer equipment leased from Comdisco.
Avnet responded to Comdisco's motion by denying liability
under the guaranty and asserting a variety of special
defenses. In addition, Avnet filed a cross claim against
Defendant. The cross claim alleges that if Avnet is found
liable under the guaranty, then Avnet becomes subrogated to
Comdisco's rights under the Master Lease Agreement to the
extent of the payments Avnet makes to Comdisco and that
OptiMark is liable to Avnet for any such payments.
Defendant has responded to the complaint and cross-claim
by denying its material allegations and asserting special
defenses. In December of 2002, Avnet, Inc. amended its
cross claim to include a claim for subrogation relating to
a payment made on OptiMark's behalf on a guaranty to Finova
and now also seeks to collect additional sums against
Defendant in an unspecified amount. Defendant intends to
defend this action vigorously. In the event a settlement
is not reached, the case is scheduled for a jury trial
commencing the week of of June 25, 2003. The outcome of
this litigation cannot be predicted at this time, although
it may have a material affect on the Company's financial
condition and results of operations.

3. The Company entered into a ten (10) year lease (the
"Lease") with Montgomery Associates, L.P. ("Montgomery") on June
26, 1998, with respect to a data center at 30 Montgomery Street,
Jersey City, New Jersey (the "Premises"). In December 2002, the
Company defaulted on the Lease when it failed to pay its monthly
rent. Montgomery commenced an action against the Company in the
Superior Court of New Jersey to collect the outstanding rent due
under the Lease.

On January 6, 2003, the Company and Montgomery entered into
a Stipulation of Settlement to resolve this litigation. Pursuant
to the terms of the Stipulation of Settlement, the Company agreed to
cure its default under the Lease by paying Montgomery the sum of
$15,000.00 by January 10, 2003 and the sum of $5,549.68 by
January 31, 2003 (collectively, the "Back Rent"). The Company
also agreed to continue to make future rental payments to
Montgomery as they became due. The Stipulation of Settlement
further provided that in the event the Company failed to timely
remit the Back Rent, Montgomery could declare the Stipulation of
Settlement void and immediately obtain an entry of Judgment
for Possession and a Warrant for Removal.

The Company did not pay Montgomery the Back Rent as required
by the Stipulation of Settlement. Accordingly, Montgomery obtained
a Judgment for Possession and Warrant for Removal for the Premises,
which denied the Company assess to the Premises. The Company does
not have any present need for this space. There is, however,
certain computer equipment located at the Premises. The Company
is presently negotiating with Montgomery to recover this Equipment.

Although it has obtained a Judgment for Possession for the
Premises, Montgomery may also seek monetary damages with respect
to the Company's alleged breach of the Lease. However, as of the
date hereof, Montgomery has not commenced an action against the
Company to obtain such monetary damages.

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

None.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

There is no established public trading market for the
shares of our common stock and we do not currently intend to
seek inclusion of the shares of common stock in any established
public trading market. As of December 31, 2002, we had
33,369,913 outstanding shares of common stock, including 740,000
shares of non-voting common stock, owned by approximately 860
holders.

Including shares of common stock issuable on conversion of
outstanding shares of the Company's various series of preferred
stock, there are 54,442,645 outstanding shares of common stock
on an as converted basis that can be sold currently pursuant to
Rule 144. As of December 31, 2002, we have

- - issued options to purchase an aggregate of 1,996,600
shares of common stock and 3,470,199 shares of
Series F Preferred Stock to our directors, officers
and current and former employees;
- - issued warrants to purchase an aggregate of
12,710,900 shares of common stock to investors,
consultants and strategic partners; and
- - granted registration rights to holders of
approximately 40,113,000 shares of common stock, on
an as converted basis.

Equity Compensation Plan Information

The following table provides, as of December 31, 2002,
information with respect to compensation plans (including
individual compensation arrangements) under which our equity
securities are authorized for issuance.

Number of securities to be Weighted-average exercise Number of securities
issued upon exercise of price of outstanding remaining available for
outstanding options, options, warrants and future issuance under
warrants and rights rights equity compensation plans
(excluding securities
reflected in column (a))
Plan Category (a) (b) (c)
- ------------- -------------------------- ------------------------- -------------------------

Equity compensation
plans approved by
security holders:
Common Stock:... 1,478,100 $1.27 12,672,624

Series F Preferred
Stock:.......... 2,138,012 $ .10 3,929,801

Equity compensation
plans not approved by
security holders.. -0- -0- -0-

Total............. 3,616,112 .45 16,602,425

Since our inception, we have not declared any dividends or
other distributions on our shares of common stock. We do not
anticipate paying any other cash dividends in the foreseeable
future and anticipate that future earnings would be retained to
finance operations.

On June 29, 2001, Holdings and certain stockholders entered
into a Preferred Stock Purchase Agreement whereby the
stockholders agreed to purchase up to an aggregate of 1,000,000
shares of the Series E Preferred Stock at a price of $15.00 per
share. The purchase of shares took place at approximately one-
month intervals from June 2001 through January 2002.

In monthly closings from June 2001 through January 2002,
investors purchased 983,335 shares of the Series E Preferred
Stock for an aggregate amount of approximately $14,750,000.

The Series E Preferred Stock is entitled to certain
preferences over existing classes of the Company's stock in the
event of liquidation, sale of assets or merger involving the
Company equal to twice its purchase price plus 80% of proceeds
above that amount up to $200 million, plus 76.56% of proceeds
above $200 million up to and including $304.5 million, plus 56%
of amounts in excess of $304.5 million. The Series E Preferred
Stock will vote together with the Company's common stock and
have 32 votes per share. Calculated based on shares outstanding
as of December 31, 2002, the Series E Preferred Stock represents
36.9 % of the votes of the outstanding common stock (and shares
entitled to vote with the common stock) and, in the aggregate,
if fully subscribed to, could represent up to 37.3% of the votes
of the outstanding common stock (and shares entitled to vote
with the common stock). Holders of the Series E Preferred are
entitled to preemptive and registration rights.

In 2001, the Company adopted a new stock option plan under
which employees and others may receive options to acquire the
Company's Series F Preferred Stock. The Series F Preferred
Stock is entitled to certain preferences over existing classes
of the Company's stock in the event of liquidation, sale of
assets or merger involving the Company, equal to 20% of proceeds
greater than $30 million up to and including $200 million,
19.14% of proceeds in excess of $200 million up to and including
$304.5 million and 14% of proceeds in excess of $304.5 million.
Holders of Series F Preferred Stock will be entitled to one vote
per share. No options on the Series F Preferred Stock have been
exercised.

In connection with the settlement of litigation of the
action captioned "Transamerica Business Credit Corporation,
Wells Fargo Equipment Finance, Inc., Diamond Lease (U.S.A.),
Inc. and Linc Capital, Inc. v. OptiMark US Equities, Inc. f/k/a
OptiMark Technologies, Inc., OptiMark, Inc. and OptiMark
Holdings, Inc.", Holdings authorized and issued 300,000 shares
of a new Series G Preferred Stock of the Company, par value $.01
per share (the "Series G Preferred Stock") to the plaintiffs
that ranks junior to the existing Series E Preferred Stock and
Series F Preferred Stock but senior to all other classes or
series of capital stock with respect to liquidation. In
particular, the Series G Preferred Stock is entitled to receive
an amount, in the event of a liquidation, sale of assets or
merger involving the Company, equal to 4.30% of the total amount
distributed in excess of $200,000,000 up to and including
$304,500,000.

The issuance of the Series E Preferred Stock and the Series
G Preferred Stock was solely to accredited investors and exempt
from registration pursuant to Rule 506 of Regulation D of the
Securities Act of 1933, as amended.

ITEM 6. SELECTED FINANCIAL DATA

Our selected financial data for and as of the end of
each of the years ended December 31, 2002, 2001, 2000, 1999 and
1998 have been derived from our audited consolidated financial
statements, including notes thereto. The information set forth
below is qualified in its entirety by reference to, and should
be read in conjunction with, "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and notes thereto included
elsewhere in this Form 10-K.

Years Ended December 31,
2002 2001 2000 1999 1998
---- ---- ---- ---- ----

Revenue....................... $ 706,118 $ 11,425,722 $ 15,234,063 $ 1,620,454 -

Operating expenses............ 6,832,882 28,615,352 53,285,111 63,811,183 $ 9,924,040

Other expense (income), net... 6,024,213 40,335 (1,206,432) (3,497,459) (2,159,512)

Loss from continuing operations (12,150,977) (17,229,965) (36,844,616) (58,693,270) (7,764,528)

Loss from continuing operations
per share (basic and diluted). $ (0.36) $ (0.49) $ (1.00) $ (1.67) $ (0.25)

Weighted average common shares
outstanding (basic and diluted) 33,369,913 35,004,561 36,603,854 35,193,208 31,067,059

Cash and cash equivalents..... $ 135,668 $ 1,624,017 $ 2,919,548 $ 62,637,410 $63,839,270

Working (deficit) capital..... (14,889,532) (13,671,141) (2,942,555) 59,127,384 61,803,570

Property and equipment - net.. 22,692 1,381,435 5,845,760 12,881,116 6,085,506

Intangible assets - net....... - 59,347 120,748 26,733,541 -

Total assets.................. 605,291 5,122,962 13,841,498 114,511,939 63,806,571

Redeemable preferred stock.... 14,440,427 13,633,854 - - -

Stockholders' (deficiency)
equity........................ (29,023,234) (25,027,141) 4,561,688 106,524,760 59,318,827

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with
the accompanying audited financial statements and related
footnotes. This document contains, in addition to historical
information, forward-looking statements that involve risk and
uncertainties. Our actual results could differ materially from
the results discussed in the forward-looking statements.
Factors that could cause or contribute to such differences
include those discussed below, as well as those discussed
elsewhere in this document. See "Item 1 - Business."

Discontinued and Suspended Operations

On September 19, 2000, the Company discontinued its US
Equities Business. The Company has discontinued all operations
of the equities trading system for the US Equities Business and
terminated all communications networks and other related systems
that were necessary to support that business. Accordingly,
results of this operation have been classified as discontinued
operations in the consolidated financial statements and prior
periods have been reclassified to conform to this presentation.
The discussion of results of operations in this section relates
only to the Company's Exchange Solutions Services Business, its
only business segment in 2002. The Company expects the process
of disposing of the net liabilities of the discontinued business
to be completed by December 31, 2003 as a result of the
continuing settlement negotiations with certain companies from
which we had previously leased equipment. This disposition
includes negotiated payments to be made after December 31, 2003.

In January 2002, the Company effectively suspended
development, sales and marketing efforts related to its Exchange
Solutions Services Business. As of that date, OptiMark became a
company whose primary purpose is to hold the securities of
Innovations and to consummate financing and strategic
transactions with other parties. OptiMark continues to engage
in discussions with third parties in an effort to secure funding
for the Exchange Solutions Services Business; however, there can
be no assurances that any such transactions will be consummated.
OptiMark's VWAP assets utilized in the Vie transaction were part
of a general effort to determine ways to utilize OptiMark's
technology for trading venues to be owned and operated by
OptiMark. OptiMark has suspended development of additional
trading venues. At such time that either a third party provides
funding or OptiMark can realize a gain in the value of its
holdings in Innovations, OptiMark will determine whether to
further develop these additional platforms. However, there are
no assurances that these transactions will be consummated or
that any further development will occur.

Continuation as a Going Concern

The accompanying financial statements have been prepared on
a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course
of business. The Company has realized net losses from
operations each year since inception. The Company's current
cash and cash equivalents, plus the expected cash flows for
2003, are not expected to be sufficient to meet its 2003
operating and financial commitments. Accordingly, if the
Company is unable by the end of May 2003 to raise additional
cash either directly or through sale or borrowing against
Innovations' holdings of Vie stock, the Company would face the
imminent and likely potential for bankruptcy or liquidation. If
the Company is forced to declare bankruptcy or pursue
liquidation, the value of the Company's assets may not be
sufficient to pay its creditors in full and, accordingly, the
Company's common and preferred stock would have no value.

Critical Accounting Policies

As a result of the Company's having discontinued its US
Equities Business and suspended its Exchange Solutions Services
Business, the Company considers the two critical policies
described below to be most important to the portrayal of its
financial condition and that require the most subjective
judgment and, as a result decrease the inherent level of
precision in our financial statements.

Reserve Related to Contract Renegotiations and
Terminations. At the time we discontinued the US Equities
Business, this reserve was recorded to reflect the contingent
liability to those companies from which we had previously
contracted for leased equipment and related services. The
reserve balance is substantially less than the gross claims made
by the former suppliers and management must use substantial
judgment based on, among other factors, disputing the size of
the gross claims based on contractual provisions, asserting
counterclaims and affirmative defenses, mitigating the claims
through returns or sales of leased equipment and negotiating
substantial reductions in the net amounts claimed after
mitigation.

Impairment of Property and Equipment. As a result of the
Company having discontinued its US Equities Business in
September 2000 and having suspended its Exchange Solutions
Services Business in January 2002, certain property and
equipment is no longer in use and must be considered impaired.
Some of these assets may be directly identifiable to the
discontinued business; however many others are shared and/or
non-specific and careful judgment is required to determine the
appropriate impairment reserve.

History of Losses

We have experienced losses each quarter since our
inception. Because we have discontinued one business segment
and suspended operations in our other business segment, losses
will continue for the foreseeable future. As of December 31,
2002, our accumulated deficit was approximately $375,247,000.

Results of Operations

Year ended December 31, 2002 compared to year ended December 31,
2001

Revenue. Total revenue for the year ended December 31,
2002 was approximately $706,000 as compared to approximately
$11,426,000 for the year ended December 31, 2001. Of these
amounts, approximately $0 and $2,818,000 were derived from
development services provided to our affiliate, Japan OptiMark
Systems, Inc. ("JOS"), for the years ended December 31, 2002 and
2001, respectively. The balance in 2002 was derived from the
recognition of revenue previously deferred and from services
rendered to Vie. The balance in 2001 was derived from services
to The Nasdaq Stock Market, Inc. ("Nasdaq") and the recognition
of revenue previously deferred. The reduction in services to
JOS resulted from completion of the development phase and
initiation of an enhancement and maintenance phase with a lower
level of monthly billing. Billings for enhancement and
maintenance ceased as of August 31, 2001. The development
contract with Nasdaq and the related billings terminated on
December 31, 2001.

All of the approximately $706,000 in revenue that was
earned for the twelve months ended December 31, 2002 was from
development services. Of the approximately $11,426,000 in
revenue that was earned for the twelve months ended December 31,
2001, $9,287,000 was from development services, $2,139,000 was
from maintenance and support fees.

Operating Expenses. Operating expenses for the twelve
months ended December 31, 2002 totaled approximately $6,833,000
as compared to approximately $28,615,000 for the twelve months
ended December 31, 2001. The following is a discussion of the
decrease as it relates to each of the expense components:

Cost of Sales. Cost of sales includes expenses incurred in
order to develop and implement our products. Cost of sales for
the twelve months ended December 31, 2002 totaled $0 as compared
to approximately $6,417,000 for the twelve months ended December
31, 2001. The decrease of $6,417,000 is due to the absence of
revenue generating projects in 2002.

Sales and Marketing. Sales and marketing expense for the
twelve months ended December 31, 2002 totaled approximately
$395,000 as compared to approximately $1,738,000 for the twelve
months ended December 31, 2001. The decrease of $1,343,000 is
primarily due to a decrease in personnel related expenses,
communication expense, travel and entertainment expense and
public relations expenses in connection with the decrease in
resources utilized in promoting the company's products and
headcount reductions within the marketing department.

Research and Development. Research and development expense
totaled approximately $1,861,000 for the twelve months ended
December 31, 2002 as compared to approximately $5,842,000 for
the twelve months ended December 31, 2001. The decrease of
$3,981,000 is primarily due to reduced expenditures to customize
and develop OptiMark's proprietary matching technology for use
in future applications. The decrease consists primarily of
personnel related expenses and communication expense.

General and Administrative. General and administrative
expense totaled approximately $3,213,000 for the twelve months
ended December 31, 2002 as compared to approximately $9,122,000
for the twelve months ended December 31, 2001. The decrease of
$5,909,000 is primarily due to a decrease in the cost of
OptiMark's bonus program and decreases in personnel related
expenses, corporate insurance expense, professional fees,
recruiting expense, communication expense and other general
office expenses, offset by an increase in rent expense. The
cost of the bonus program was $0 for the twelve months ended
December 31, 2002 and approximately $2,216,000 for the twelve
months ended December 31, 2001.

Depreciation and Amortization. Depreciation and
amortization expense totaled approximately $798,000 for the
twelve months ended December 31, 2002 as compared to
approximately $4,035,000 for the twelve months ended December
31, 2001. The decrease of $3,237,000 is primarily due to the
write off of assets deemed permanently impaired during the
latter part of 2001 and the first quarter of 2002.

Impairment of Fixed Assets. The Company recorded charges
of approximately $566,000 and $1,147,000 in 2002 and 2001,
respectively, representing an impairment of various property and
equipment in its continuing operations for items that no longer
provided economic value.

Restructuring Expense. We recorded a restructuring charge
of approximately $316,000 for the twelve months ended December
31, 2001, representing severance costs associated with a
workforce reduction of forty employees.

Other Income and Expense. Other income and expense
includes interest income on cash and cash equivalents, interest
expense on loans and capital leases, loss on equity investment,
gain realized by the recovery of an investment previously
written off and equity in the loss of an investee. Other
expense, net, was approximately $6,024,000 for the twelve months
ended December 31, 2002 as compared to other expense, net, of
approximately $40,000 for the twelve months ended December 31,
2001. The increase of $5,984,000 is primarily due to the equity
in the loss of an investee, OptiMark Innovations, Inc., an
increase in interest expense generated by shareholder loans, the
financing of insurance policies and the beneficial conversion
feature of the loans with certain of the Company's shareholders,
loss realized on the partial disposal of an equity investment
and a decrease in interest income and the gain on the recovery
on an investment realized in 2001.

Year ended December 31, 2001 compared to year ended December 31,
2000

Revenue. Total revenue for the year ended December 31,
2001 was approximately $11,426,000 as compared to approximately
$15,234,000 for the year ended December 31, 2000. Of these
amounts, approximately $2,818,000 and $11,684,000 were derived
from development services provided to our affiliate, Japan
OptiMark Systems, Inc. ("JOS"), for the years ended December 31,
2001 and 2000, respectively. The balance in 2001 was derived
from services to The Nasdaq Stock Market, Inc. ("Nasdaq") and
the recognition of revenue previously deferred. The reduction
in services to JOS resulted from completion of the development
phase and initiation of an enhancement and maintenance phase
with a lower level of monthly billing. Billings for enhancement
and maintenance ceased as of August 31, 2001. The development
contract with Nasdaq and the related billings terminated on
December 31, 2001.

Of the approximately $11,426,000 in revenue that was earned
for the twelve months ended December 31, 2001, $9,287,000 was
from development services, $2,139,000 was from maintenance and
support fees. Of the approximately $15,234,000 in revenue that
was earned for the twelve months ended December 31, 2000,
$15,033,000 was from development services, $201,000 was from
maintenance and support fees.

Operating Expenses. Operating expenses for the twelve
months ended December 31, 2001 totaled approximately $28,615,000
as compared to approximately $53,285,000 for the twelve months
ended December 31, 2000. The following is a discussion of the
decrease as it relates to each of the expense components:

Cost of Sales. Cost of sales includes expenses incurred in
order to develop and implement our products. Cost of sales for
the twelve months ended December 31, 2001 totaled approximately
$6,417,000 as compared to approximately $8,256,000 for the
twelve months ended December 31, 2000. The decrease of
$1,839,000 was primarily due to the decrease in resources
utilized in the JOS project. The decrease consisted of lower
personnel related expenses incurred in connection with JOS and
equipment lease expense due to the termination of the majority
of the Company's operating leases in the third quarter of 2000,
offset by increases in warranty expense, communication expense
and rent expense allocated to the Nasdaq project.

Sales and Marketing. Sales and marketing expense for the
twelve months ended December 31, 2001 totaled approximately
$1,738,000 as compared to approximately $1,893,000 for the
twelve months ended December 31, 2000. The decrease of $155,000
was attributable to a decrease in costs associated with JOS.
The decrease consisted primarily of personnel related expenses
and travel and entertainment expenses offset by increases in
public relations expenses and communication expense associated
with marketing the Company's new product offerings.

Research and Development. Research and development expense
totaled approximately $5,842,000 for the twelve months ended
December 31, 2001 compared to approximately $3,460,000 for the
twelve months ended December 31, 2000. The increase of
$2,382,000 was primarily due to expenditures to customize and
develop OptiMark's proprietary matching technology for use in
future applications. The increase consisted primarily of
personnel related expenses.

General and Administrative. General and administrative
expense totaled approximately $9,122,000 for the twelve months
ended December 31, 2001 as compared to approximately $9,601,000
for the twelve months ended December 31, 2000. The decrease of
$479,000 was primarily due to a decrease in professional fees,
personnel related expenses, travel and entertainment expenses
and other general office expenses offset by an increase in
corporate insurance expense, recruiting expense, communication
expense and rent expense. In addition to general and
administrative expenses, OptiMark also includes the total cost
of its employee bonus program in this cost classification. The
cost of this program was approximately $2,216,000 for the twelve
months ended December 31, 2001 and approximately $2,169,000 for
the twelve months ended December 31, 2000.

Depreciation and Amortization. Depreciation and
amortization expense totaled approximately $4,035,000 for the
twelve months ended December 31, 2001 as compared to
approximately $3,950,000 for the twelve months ended December
31, 2000. The increase of $85,000 was primarily due to the
Company's decision to identify assets, chiefly computer
equipment, previously used in the discontinued business, and
redeploy them in the continuing business, offset by the absence
in 2001 of amortization from certain non-securities industries
rights, which were written off in the fourth quarter of 2000 as
well as lower depreciation resulting from certain property and
equipment, written off in the second half of 2000.

Impairment of Fixed Assets. The Company recorded charges
of approximately $1,147,000 and $1,879,000 in 2001 and 2000,
respectively, representing an impairment of various property and
equipment in its continuing operations for items that no longer
provided economic value.

Write-off of Intangible Asset. The Company recorded a
charge of $23,940,000 in 2000 to write off the net book value of
an intangible asset. The write off was based on the Company's
analysis, which indicated that the asset presented no future
economic value.

Restructuring Expense. We recorded a restructuring charge
of approximately $316,000 for the twelve months ended December
31, 2001, representing severance costs associated with a
workforce reduction of forty employees. We had taken a
restructuring charge of approximately $292,000 for the twelve
months ended December 31, 2000. Included in this amount was
approximately $1,890,000 representing charges associated with
the revaluation of employee options, $750,000 related to a
settlement payment to a vendor, approximately $4,000 related to
the write off of security deposits and the remaining
approximately $268,000 included notice period salaries of
approximately $167,000, severance of approximately $68,000 and
vacation pay and other related employee costs of approximately
$33,000. The restructuring charges were reduced by
approximately $2,620,000 from a net reduction in vendor
obligations.

Warrant Compensation Expense. We incurred a non-cash
warrant compensation expense for the twelve months ended
December 31, 2000 of approximately $15,000. This amount was
attributable to certain warrants being charged to expense in
accordance with the Emerging Issues Task Force 96-18,
"Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with, Selling Goods
or Services."

Other Income and Expense. Other income and expense
includes interest income on cash and cash equivalents, interest
expense on capital leases, corporate insurance vendor financing
and stockholder notes, writedown of an investment and gain
realized by the recovery of an investment previously written
off. Other expense, net, was approximately $40,000 for the
twelve months ended December 31, 2001 as compared to other
income, net, of approximately $1,206,000 for the twelve months
ended December 31, 2000. The decrease of $1,246,000 was due to
(a) a reduction in interest bearing deposits over the course of
the prior twelve months, (b) payments on capital leases over the
same period of time, which reduced the interest portion of
current payments (c) interest incurred on financing provided by
a vendor in connection with the Company's corporate insurance
policy and (d) interest incurred on the stockholder notes. In
addition, the Company wrote off its investment in a customer.
These were offset by a gain realized by the recovery of an
investment written off in a prior year.

Liquidity and Capital Resources

As of December 31, 2002, our principal sources of liquidity
consisted of approximately $136,000 of cash and cash equivalents
as compared to approximately $1,624,000 of cash and cash
equivalents as of December 31, 2001.

Net cash used in continuing operating activities was
approximately $5,629,000 and approximately $11,061,000 for the
twelve months ended December 31, 2002 and 2001, respectively.
The change in net operating cash flows was attributable to net
losses in both periods, partially reduced by non-cash charges
including depreciation and amortization, non-cash loan
repayment, equity in loss of unconsolidated subsidiary,
impairment of fixed assets, non-cash interest expense, loss on
equity investment and gain/loss on disposal of assets. The
fluctuation between periods was also affected by net changes in
working capital.

Net cash provided by investing activities was approximately
$454,000 for the twelve months ended December 31, 2002 and net
cash used in investing activities was approximately $696,000 for
the twelve months ended December 31, 2001. The cash provided by
investing activities in 2002 primarily consisted of the proceeds
received from the sale of assets, chiefly computer equipment.
The uses of cash in 2001 for investing activities primarily
consisted of the purchase of a mainframe computer as part of a
settlement of all amounts owed to a company from which OptiMark
had previously leased equipment and the purchase of software
licenses.

Net cash provided by financing activities was approximately
$4,231,000 and approximately $14,161,000 for the twelve months
ended December 31, 2002 and 2001, respectively. In 2002, cash
was provided from the sale of Series E Preferred Stock and
shareholder loans. In 2001, cash was provided from the sale of
Series E Preferred Stock, stockholder loans, the recovery of an
investment previously written off and the issuance of a minority
interest in a subsidiary of the Company. Uses of cash in 2001
consisted of principal payments on capital leases. On June 29,
2001, the obligation to repay the stockholder loans was
cancelled in exchange for shares of Series E Preferred Stock.

On March 21, 2002, the Company entered into a loan
agreement with certain of its shareholders (SOFTBANK). Under
the terms of the agreement, the Company borrowed $500,000 for a
period of 180 days at an interest rate of 10% per annum
compounded every ninety days. The loan is secured by
substantially all of the assets of the Company. In lieu of
repayment of principal in cash, the lenders had the right to
require the Company to repay the principal amount of the loan
by causing OptiMark to transfer eight shares of Innovations
Common Stock and forty-eight shares of the Non-Qualified
Preferred Stock of Innovations subject to adjustment as
provided in the loan agreement with accrued interest payable
in cash at maturity.

On April 11, 2002, the Company entered into a second loan
agreement with these shareholders. Under this second loan
agreement, the Company borrowed $570,000 for a period of 180
days at an interest rate of 10% per annum compounded every
ninety days. The second loan is secured by substantially all of
the assets of the Company. In lieu of repayment of principal in
cash, the lenders had the right to require the Company to repay
the principal amount of the loan by causing OptiMark to transfer
twelve shares of Innovations Common Stock and fifty-four shares
of the Non-Qualified Preferred Stock of Innovations subject to
adjustment as provided in the second loan agreement with
accrued interest payable in cash at maturity. The value of the
securities transferred at the time of repayment for the loan
exceeded the value of the loan by $570,000, which was recorded
as a beneficial conversion feature. This amount was charged as
interest expense ratably over the life of the loan.

On May 31, 2002, the Company entered into a third loan
agreement with these shareholders. Under this third loan
agreement, the Company borrowed $1,650,000 for a period of 180
days at an interest rate of 10% per annum compounded every
ninety days. The third loan is secured by substantially all of
the assets of the Company. In lieu of repayment of principal in
cash, the lenders had the right to require the Company to repay
the principal amount of the loan by causing OptiMark to transfer
twenty-eight shares of Innovations Common Stock and one hundred
fifty-eight shares of the Non-Qualified Preferred Stock of
Innovations subject to adjustment as provided in the third
loan agreement with accrued interest payable in cash at maturity.
The value of the securities transferred at the time of repayment
for the loan exceeded the value of the loan by $1,640,000, which
was recorded as a beneficial conversion feature. This amount
was charged as interest expense ratably over the life of the loan.

On September 17, 2002, the loan the Company executed with
these shareholders on March 21, 2002, came due. In accordance
with the terms of the agreement, the lenders caused the Company
to transfer eight shares of Innovations' common stock and forty-
eight shares of Innovations' Non-Qualified Preferred Stock. The
Company recorded a loss of approximately $945,000 on the
exchange, which is included in loss on equity investment on the
accompanying statement of operations and other comprehensive
loss.

On October 8, 2002, the loan the Company executed with
these shareholders on April 11, 2002, came due. In accordance
with the terms of the agreement, the lenders caused the Company
to transfer twelve shares of Innovations' common stock and
fifty-four shares of Innovations' Non-Qualified Preferred Stock.

On November 27, 2002, the loan the Company executed with
these shareholders on May 31, 2002, came due. In accordance
with the terms of the agreement, the lenders caused the Company
to transfer twenty-eight shares of Innovations' common stock and
one hundred fifty-eight shares of Innovations' Non-Qualified
Preferred Stock.

The repayment of the loans resulted in additional paid in
capital of $1,433,150.

On November 27, 2002, the Company entered into a fourth
loan agreement with these shareholders. Under this fourth loan
agreement, the Company borrowed $750,000 for a period of 180
days at an interest rate of 10% per annum compounded every
ninety days. The fourth loan is secured by substantially all of
the assets of the Company. In lieu of repayment of principal in
cash, the lenders may require the Company to repay the principal
amount of the loan by causing OptiMark to transfer twelve shares
of Innovations Common Stock and seventy-two shares of the Non-
Qualified Preferred Stock of Innovations subject to adjustment
as provided in the fourth loan agreement with accrued interest
payable in cash at maturity. The value of the securities
to be given in consideration at the time of repayment for the loan
will exceed the value of the loan by $92,000, which was recorded
as a beneficial conversion feature. This amount is being charged
as interest expense ratably over the life of the loan.

On December 17, 2002, the lenders and the Company executed
a Letter Agreement pursuant to which the lenders will receive
three shares of Innovations Common Stock and fifteen shares of
Innovations Non-Qualified Preferred Stock in lieu of cash
payment of all remaining obligations, including accrued and
unpaid interest, the Company owed the lenders under the terms of
the first three loan agreements.

On February 6, 2003, the Company entered into a fifth loan
agreement with these shareholders. Under this fifth loan
agreement, the Company borrowed $940,000 for a period of 180
days at an interest rate of 10% per annum compounded every
ninety days. The fifth loan is secured by substantially all of
the assets of the Company. In lieu of repayment of principal in
cash, the lenders may require the Company to repay the principal
amount of the loan by causing OptiMark to transfer eighty-nine
shares of the Non-Qualified Preferred Stock of Innovations and
the reduction of the Company's First Call Right by twenty shares
subject to adjustment as provided in the fifth loan agreement
with accrued interest payable in cash at maturity.

Pursuant to the Innovations Rights Agreement, Holdings and
SOFTBANK have certain call and put rights described below. The
Independent Committee of the Board has the right commencing
October 1, 2002 and exercisable until September 30, 2003, to
recommend to the Board that Holdings purchase all, but not less
than all, of the SOFTBANK Shares for $100,000 in cash and 13,334
shares of Series E Preferred Stock of Holdings. If the Board of
Directors accepts such recommendation, SOFTBANK would be
obligated to sell the SOFTBANK shares for that consideration.

Upon the occurrence of a Liquidity Event (defined below) on
or before September 30, 2003, the SOFTBANK Shares will be
purchased by Holdings for $100,000 in cash and 13,334 shares of
Series E Preferred Stock of Holdings. A "Liquidity Event" means
any of the following: (i) Innovations' sale, conveyance or other
disposition of all or substantially all of its assets; (ii) the
acquisition of Innovations by another entity by means of merger
or consolidation resulting in the exchange of the outstanding
shares of Innovations for securities or other consideration
issued, or caused to be issued, by the acquiring entity or its
subsidiary, unless the stockholders of Innovations immediately
prior to the consummation of such transaction hold at least 50%
of the voting power of the surviving corporation as a result of
such transaction; (iii) the consummation by Innovations of a
transaction or series of related transactions, including the
issuance or sale of voting securities, if the stockholders of
Innovations immediately prior to such transaction (or, in the
case of a series of transactions, the first of such
transactions) hold less than 50% of the voting power of
Innovations immediately after the consummation of such
transaction (or, in the case of a series of transactions, the
last of such transactions); or (iv) any initial underwritten
public offering of Innovations Common Stock. Notwithstanding
the foregoing, Holdings will not exercise this call option in
the event that the Independent Committee recommends that
Holdings not purchase the SOFTBANK Shares.

In the event that: (i) the call rights of Holdings
described above have not been exercised on or before September
30, 2003, (ii) the Independent Committee no longer exists and
(iii) no independent directors serve on the Holdings Board of
Directors and, after reasonable good faith efforts by the
remaining members of the Holdings Board of Directors, no
independent persons qualified to serve on the Holdings Board of
Directors have been found or, if found, are not willing to serve
on the Holdings Board of Directors, then the Holdings Board of
Directors will engage an independent investment banking,
accounting or third party valuation firm to evaluate whether or
not it is in the best interests of Holdings that it purchase the
SOFTBANK Shares. If such third party determines it is in the
best interests of Holdings to purchase the SOFTBANK Shares,
Holdings will be obligated to purchase such shares on or before
December 31, 2003 for $100,000 in cash and 13,334 shares of
Series E Preferred Stock of Holdings.

SOFTBANK has the right, commencing on October 1, 2002 and
continuing until September 30, 2003, to put all, but not less
than all, of the SOFTBANK Shares to Holdings in exchange for
16,667 shares of Series E Preferred Stock of Holdings.

In the event that no put of, or call on, the SOFTBANK Shares
has been exercised by October 31, 2003, then commencing on
November 1, 2003 and continuing until November 30, 2003,
SOFTBANK has the right to require Holdings to purchase all, but
not less than all, of the SOFTBANK Shares for 16,667 shares of
Series E Preferred Stock of Holdings.

During 2001, the Company raised additional capital and
settled certain liabilities through the sale or issuance of its
Series E and Series G Preferred Stock. These issuances
contained certain provisions and rights for the preferred
stockholder that required that they be classified as redeemable
stock on our balance sheet. These terms were part of the
negotiated provisions of these preferred stock financings.

Factors that may affect future results

The following factors may affect our future results:

WE ARE DEPENDENT ON THE SUCCESS OF VIE AND/OR FUTURE
TRANSACTIONS

Holdings, OptiMark and Innovations do not have any revenue
generating operations. The business of Equities was
discontinued in September 2000. As such, the Company believes
that the future value of Holdings' stock will depend principally
on the value of the Vie Common Stock held by Innovations or on
other transactions that the Company can consummate.

The Company's investment in Vie is subject to additional
risks including the risks attendant to Vie's business.
Innovations has conducted limited due diligence with respect to
Vie's business. Based solely on that limited review,
Innovations has no reason to believe that Vie's description of
its business is incorrect in any material respect.

There may be additional risks of which we and/or Vie do not
currently know or of which are deemed to be immaterial based on
the information available. All of these risks may impair
business operations.

There are no assurances that the value of the Vie Common
Stock will appreciate or other transactions will occur.

The Company continues to attempt to solicit interest from
or opportunities with third parties concerning possible
additional investments or strategic alliances. However, no
binding or definitive arrangements have been reached with any
third parties and there can be no assurances that any such
transactions will be consummated. OptiMark's VWAP assets
utilized in the Vie transaction were part of a general effort to
determine ways to utilize OptiMark's technology for trading
venues to be owned and operated by OptiMark. OptiMark has
suspended development of additional trading venues. At such
time that either a third party provides funding or OptiMark can
use a gain in the value of its holdings in Innovations, OptiMark
will determine whether to further develop these additional
platforms. However, there are no assurances that these
transactions will be consummated or that any further development
will occur.

WE DO NOT HAVE SUFFICIENT WORKING CAPITAL TO CONTINUE AS A GOING
CONCERN

The Company's current cash and cash equivalents, plus the
expected cash flows for 2003, are not expected to be sufficient
to meet its 2003 operating and financial commitments. We will
need working capital to fund the relatively limited operations
necessary to carry out our duties and obligations as a holding
company, including the administration and financial reporting
obligations. We currently do not generate any revenues from
continuing operations in order to provide this working capital.
We will need to raise additional capital to meet our operating
requirements. Accordingly, if the Company is unable by the end
of May 2003 to raise additional cash either directly or
through sale or borrowing against Innovations' holdings of
shares of the Vie Common Stock or the Note, the Company would
face the imminent and likely potential for bankruptcy or
liquidation. If the Company is forced to declare bankruptcy or
pursue liquidation, the value of the Company's assets may not be
sufficient to pay its creditors in full and, accordingly, the
Company's common stock and preferred stock would have no value.
The Company will continue to seek additional funding both to
support its operation as a holding company as well as its very
limited efforts related to potential new product development.
While the Company hopes to be able to obtain additional
financing for these limited product development activities,
continue to borrow money from SOFTBANK or raise capital through
the sale or borrowing against the shares of Innovations related
to its holdings of shares of the Vie Common Stock and the Note,
the Company may not be able to raise this capital before it runs
out of cash. In addition, the Company has pledged a portion of
its shares of Capital Stock in Innovations to SOFTBANK as
payment for loans that have already been provided. In the event
that the Company does not have enough cash to pay the principal
and interest on these loans as they come due, the Company's
holdings in Innovations would be reduced accordingly. This
would reduce the Company's ability to utilize these assets to
raise additional capital necessary to ensure continuation as a
going concern. There is no assurance that the Company's
holdings in Innovations, as represented by Innovations' holdings
of shares of the Vie Common Stock, will have any value as
collateral for a loan or that could be sold to raise cash at any
time or in a time frame that would let the Company continue as a
going concern.

If we raise additional funds through the issuance of
securities, these securities may have rights, preferences or
privileges senior to those of our common stock and existing
series of preferred stock, and our stock holders may experience
dilution to their equity ownership.

WE DO NOT GENERATE REVENUES FROM CLIENTS

We currently do not have any clients who generate revenues
for the Company. We may not seek to re-start the development,
sales, and marketing efforts related to our Exchange Solutions
Services Business and therefore may not have clients from whom
we can generate revenues in the future. As such, there are no
assurances that we can generate revenues to support operations.

WORKOUT AND DEBT RESTRUCTURING

We are currently engaged in litigation and/or settlement
negotiations with, or may face unasserted claims from, certain
large creditors of Equities. The aggregate gross claims of these
creditors are approximately $14,500,000. The Company is
attempting to conclude the negotiations in a manner which allows
the Company as a whole to continue to pursue its business. The
negotiated settlements are attempting to be achieved through a
combination of disputing the size of the gross claims based on
contractual provisions, asserting counterclaims and affirmative
defenses, mitigating the claims through returns or sales of
leased equipment, negotiating substantial reductions in the net
amounts claimed after mitigation, agreeing on deferred payment
of the net claims and converting some of the debt into equity.
To the extent that we can and do settle with these creditors,
the ability to make payments to them under any settlement
agreement would depend upon securing additional financing.
There can be no assurance that these negotiations will be
successful or that the creditors will not seek to put Equities
or the Company into bankruptcy in the near future. A bankruptcy
proceeding will materially and negatively affect the ability of
the Company to continue operations.

On January 25, 2002, OptiMark Holdings, Inc. and its
subsidiaries, OptiMark US Equities, Inc. (f/k/a OptiMark
Technologies, Inc.) and OptiMark, Inc. (collectively, "OptiMark
Parties"), settled, without any admission of liability, the
arbitration captioned International Exchange Networks, Ltd.
("IXNET") against OptiMark Technologies, Inc., OptiMark
Holdings, Inc., OptiMark, Inc. and OptiMark US Equities, Inc.,
(American Arbitration Association Case No. 131170016601). Under
the terms of the settlement, the OptiMark Parties agreed to pay
IXNET, on or before eleven (11) business days after December 31,
2006, the amount of $6,000,000. However, if the OptiMark
Parties have paid to IXNET (a) $500,000 immediately upon
execution of a settlement agreement (which it did on January 30,
2002), and pay (b) $1,000,000 on or before December 31, 2003 and
(c) $1,000,000 on or before December 31, 2004, then in that
event, IXNET has agreed to accept such payments as full and
complete satisfaction of the OptiMark Parties' obligations under
the settlement and to forgo and forgive irrevocably any and all
other sums due to IXNET under the settlement. The OptiMark
Parties currently intends to make payments to IXNET in
accordance with this payment schedule. However, our ability to
make the two payments of $1 million dollars on or before
December 31, 2003 and 2004, respectively, will depend on the
Company securing additional financing or realizing additional
value from our current assets.

On March 19, 2003, subject to execution of definitive
documentation, we reached a settlement with Finova Capital
Corporation ("Finova") in the litigation captioned Finova
Capital Corporation v. Optimark Technologies, Inc. Optimark,
Inc. and Optimark Holdings, Inc., which is described in "Item 3
- - Legal Proceedings." The terms of this settlement provide as
follows. We will pay Finova the combined sum of $1,000,000 in
the following manner: a) $200,000 within thirty (30) days of
the execution of the written settlement agreement; b) $400,000
in January 2004; and c) $400,000 in June 2004. We will provide
Finova with a consent judgment for the outstanding balance due
on the lease agreements in dispute - to be used only in the
event of a default under the terms of the settlement agreement.
The exact amount of the consent judgment shall be agreed to by
the parties based upon the amount due and owing under the
subject leases. In consideration of the foregoing, Finova, upon
receipt of the first payment of $200,000, will provide all
defendants to the litigation (namely, Optimark U.S. Equities,
Inc., Optimark, Inc., Optimark Holdings, Inc., Optimark
Innovations, Inc. (plead as OTSH, Inc.) and Vie Financial Group
(plead as Ashton Technology Group, Inc.)) a release for all
claims arising out of the lease transaction between the parties
as well as those additional claims asserted, or those that could
have been asserted, by Finova against all defendants in the
pending litigation. Additionally, Finova also shall cause a
Stipulation of Dismissal, with prejudice, to be filed in the
pending action.

Recent Accounting Pronouncements

Management does not believe any recently issued, but not
yet effective, accounting standards, if currently adopted, would
have a material effect on the accompanying financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK

Our only exposure to market risk is related to changes in
interest rates and foreign currency exchange rates. As of
December 31, 2002, we did and do not consider these risks to be
material. This discussion contains forward-looking statements
that are subject to risks and uncertainties. Actual results
could vary materially as a result of a number of factors
including those mentioned in Part I above.

Interest Rate Risk. As of December 31, 2002, we had cash
and cash equivalents of $135,668 that consisted of cash and
highly liquid short-term investments. These investments may be
subject to interest rate risk and would decrease in value if
interest rates increased in the marketplace. A hypothetical
increase or decrease of 10 percent from market interest rates in
effect at December 31, 2002 would have caused the fair value of
these short-term investments to change by an immaterial amount.
Declines in interest rates over time would, however, reduce our
interest income.

Equity Price Risk. As of December 31, 2002, we were not
subject to equity price risk.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the accompanying consolidated financial statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

On September 26, 2002, Deloitte & Touche LLP ("D&T")
resigned as the independent auditors for the Company. The
reports of D&T on the balance sheets of the Company as of
December 31, 2001 and 2000 and the related statements of
operations, stockholders' equity and cash flows for each of the
years in the two-year period ended December 31, 2001 did not
contain any adverse opinion or disclaimer of opinion, nor were
they modified as to uncertainty, audit scope or accounting
principles, except for disclosures of going concern
uncertainties.

In connection with the audits by D&T of the periods
described above, and the subsequent interim period through
September 26, 2002, there were no disagreements between the
Company and D&T on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to D&T's
satisfaction, would have caused D&T to make reference to the
subject matter of the disagreement(s) in connection with its
reports.

The Company has selected Goldstein Golub Kessler LLP as
independent auditors for the year ending December 31, 2002. The
decision to change independent auditors and the selection of
Goldstein Golub Kessler LLP as independent auditors for the year
ending December 31, 2002 was approved by the Board of Directors.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following list sets forth certain biographical
information concerning the Board of Directors of OptiMark
Holdings, Inc. ("OptiMark" or the "Company") as of December 31,
2002.

WILLIAM A. LUPIEN (61), Chairman of the Board of
Directors since 2000. Mr. Lupien was the founder and co-
inventor of the OptiMark matching engine technology. Mr. Lupien
has served as Chairman of the Board of Directors of OptiMark
Technologies, Inc. and its predecessor, MJT Holdings, Inc.,
since its formation in 1988. From inception through November
1998, Mr. Lupien served as the Chief Executive Officer of
OptiMark Technologies, Inc. Mr. Lupien also serves as a
Director of Broker Tec Futures Exchange, L.L.C. Mr. Lupien
received his Bachelor of Science degree from San Diego State
University.

RONALD D. FISHER (55), Director since November 1999. Mr.
Fisher is the Vice Chairman of SOFTBANK Holdings Inc. and a
Managing Partner of SOFTBANK Capital Partners. Mr. Fisher also
serves as a member of the boards of directors of SOFTBANK Corp.,
E*Trade Group, InsWeb Corporation, GSI Commerce, Key3Media and
Vie Financial Group. Mr. Fisher received his M.B.A. from Columbia
University, New York and Bachelor of Commerce degree from the
University of Witwatersand in South Africa.

ROBERT J. WARSHAW (49), Chief Executive Officer since
March 2001. Mr. Warshaw also serves as Chief Executive Officer
of OptiMark, Inc. Mr. Warshaw previously served as Co-Chief
Executive Officer, Executive Vice President and Chief Technology
Officer of OptiMark, Inc. From November 1999 to June 2000, Mr.
Warshaw served as Executive Vice President and Chief Technology
Officer of OptiMark Technologies, Inc. From October 1993 to
October 1999, Mr. Warshaw was Chief Information Officer at
Lazard Freres & Co. LLC., an international investment banking
firm. Mr. Warshaw received his bachelor's degree in English
from the University of Pennsylvania and a Masters in Management
from Northwestern University's Kellogg School of Management.
The executive officers serve at the discretion of the Board
of Directors. The following table sets forth certain
information concerning the executive officers of the Company as
of December 31, 2002 (none of whom has a family relationship
with another executive officer).

Name Age Position
- ---- --- --------
Robert J. Warshaw 49 President, Chief Executive Officer
and Director

Matthew L. Morgan 31 Secretary

Information regarding the business experience of Mr.
Warshaw is set forth above.

MATTHEW L. MORGAN (31), Controller and Corporate Secretary
since July 10, 2002. Prior to joining OptiMark, Mr. Morgan was
an auditor with Deloitte and Touche LLP from 1998 to 2000 and
Richard A. Eisner LLP from 1997 to 1998. While at these firms,
Mr. Morgan concentrated on the technology and service-related
industries. Mr. Morgan has an undergraduate degree from the City
University of New York, Queens College and is a certified public
accountant.

Section 16(a) Beneficial Ownership Reporting Compliance

The Company's executive officers, directors and ten percent
shareholders are required under Section 16(a) of the Securities
Exchange Act of 1934 as amended (the "Exchange Act"), to file
reports of ownership and changes in ownership on Forms 3, 4 and
5 with the Commission. Copies of these reports must also be
furnished to the Company. Based upon its review of copies of
such reports furnished to the Company through the date hereof,
or written representations that no reports were required to be
filed, the Company believes that during the year ended December
31, 2002, all filing requirements applicable to its officers,
directors and ten percent shareholders were complied within a
timely manner, with the exception of one Form 4 for Mr. William
A. Lupien and one Form 4 for Ronald D. Fisher, which were not
filed in a timely manner.

ITEM 11. EXECUTIVE COMPENSATION

Compensation of Directors

Upon initial election to the Board of Directors, each non-
employee Director was granted an option to purchase 50,000
shares of common stock, par value $.01 per share (the "Common
Stock"), pursuant to the OptiMark Holdings, Inc. 1999 Stock Plan
(the "Common Stock Plan"). In addition, on the first business
day following each annual meeting of OptiMark's shareholders,
each non-employee Director was granted an option to purchase
10,000 shares of Common Stock pursuant to the Common Stock Plan.
Options granted under the Common Stock Plan to non-employee
Directors vest ratably over five years, subject to continuing
service on the Board of Directors, and have a term of ten years.

In November 2001, the Company adopted OptiMark Holdings,
Inc. 2001 Series F Preferred Stock Plan (the "Series F Stock
Plan") pursuant to which certain individuals would receive
grants of options to purchase Series F Preferred Stock.
Following the adoption of the Series F Stock Plan in November
2001, no further options have been or will be granted to non-
employee Directors under the Common Stock Plan. In November
2001, each current non-employee Director (Messrs. Fisher, Lupien
and Riese) was granted an option to purchase 25,000 shares of
Series F Preferred Stock pursuant to the Series F Stock Plan,
which vested immediately following stockholder approval of the
Series F Stock Plan and has a term of ten years. Thereafter,
upon initial election to the Board of Directors and on the first
business day following each annual meeting of OptiMark's
shareholders, each non-employee Director will be granted an
option to purchase 10,000 shares of Series F Preferred Stock
pursuant to the Series F Stock Plan. Options granted under the
Series F Stock Plan to non-employee Directors in accordance with
the preceding sentence shall fully vest on the first anniversary
of the date of grant, subject to continuing service on the Board
of Directors, and have a term of ten years. In addition, each
non-employee Director shall have one year from resignation or
expiration of his term as a Director to exercise vested options
granted under the Series F Stock Plan.

Directors do not receive cash compensation for service as
members of the Board of Directors or committees thereof. All
Directors are reimbursed for out-of-pocket expenses.

Executive Summary Compensation Table

The following table provides a summary of compensation
earned by the named executive officers of the Company, which
include the Company's Chief Executive Officer and the other
former executives whose total salary and bonus for 2002 exceeded
$100,000, for services rendered in all capacities to the Company
and its subsidiaries for each of the last three fiscal years:

Long Term
Compensation
Annual Compensation Awards
------------------------ ------------
Securities
Other Underlying
Fiscal Salary Bonus Compensation Options
Name and Principal Position Year ($) ($) ($) (#)
- --------------------------- ---- ------ ----- ------------ ------------

Robert J. Warshaw 2002 250,000 325,000 - -
Chief Executive Officer 2001 257,291 175,000 - 1,950,000
2000 225,000 175,000 - 250,000

Matthew L. Morgan 2002 127,000 - - -
Secretary & Controller 2001 104,374 8,063 - 30,000
2000 48,747 - - 25,000

Neil G. Cohen 2002 92,948 50,000 - -
Former Secretary & 2001 200,000 38,374 - 185,000
General Counsel 2000 162,500 21,875 - 55,000

Options to purchase shares of Series F Preferred Stock.

Options to purchase shares of Common Stock.

All outstanding options on Common Stock of Executive Officer
were repriced to an exercise price of $0.50 per share in
December 2000 upon the execution of Amendment No. 1 to Stock
Option Agreements.

Mr. Cohen resigned as Secretary and General Counsel effective
May 31, 2002.

Option Grants

During fiscal year 2002 there were no options granted to
any of the Company's executive officers.

Fiscal 2002 Year End Option Values

No options were exercised during fiscal year 2002 by the
named executive officers. The following table describes the
named executive officers' exercisable and unexercisable options
held as of December 31, 2002. The "Value of Unexercised In-the-
Money Options at Fiscal Year End" is the value as of December
31, 2002, in each case as determined by the Board of Directors,
less the exercise price. All options were granted under either
the Series F Stock Plan or the Common Stock Plan as indicated.

Number of Securities Value of Unexercised
Underlying Unexercised Options at In-the-Money Options at
Fiscal Year End (#) Fiscal Year End ($)
--------------------------------- -------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------

Robert J. Warshaw 853,125 1,096,875 -0- -0-
460,000 290,000 -0- -0-

Matthew L. Morgan 13,125 16,875 -0- -0-
10,000 15,000 -0- -0-

Neil G. Cohen 92,500 185,000 -0- -0-
34,000 41,000 -0- -0-

Options to purchase shares of Series F Preferred Stock.

Options to purchase Common Stock.

Repricing Discussion

On September 19, 2000, the Company's Board of Directors
authorized a repricing of options on Common Stock. The
repricing reduced the exercise price of all outstanding options
on Common Stock that had been granted to those employees,
officers, and directors who remained with the Company after that
date from exercise prices ranging from $1.50-$14.00 per share to
$0.50 per share.

The options on Common Stock were intended to provide
incentives for option holders to continue as employees,
officers, and directors of the Company based on the potential
for appreciation of the stock price of the Company to a level in
excess of the exercise price of the options. The Board of
Directors determined that the fair market value as of September
19, 2000 of a share of Common Stock of the Company was $0.50 per
share, which was significantly below the prices at which options
on Common Stock had originally been granted. The Board of
Directors further determined that the fair market value caused
the stock options to lose much of their intended motivating
effect on employees, officers, and directors. The repricing was
intended to reinstate the original intent of the options on
Common Stock.

Options to purchase 500,000 shares of Common Stock at an
exercise price of $12.00 per share and options to purchase
250,000 shares of Common Stock at an exercise price of $10.00
per share held by Mr. Warshaw were repriced to an exercise price
of $0.50 per share and have remaining terms of one year and two
years, respectively.

Management Contracts

On August 16, 2001, OptiMark entered into a written
employment agreement with Robert J. Warshaw that replaced an
earlier oral agreement reached on September 19, 2000. On August
8, 2002, OptiMark amended the agreement dated August 16, 2001.
Under the terms of the amended agreement, Mr. Warshaw retained
the position of Chief Executive Officer of the Company, received
a base salary of $250,000 per year, and was granted a bonus in
the amount of $200,000, , which was to be paid bi-monthly through
August, 2003. In addition, the amendment provided Mr. Warshaw
with the right to receive a bonus in the amount of $45,000 upon
execution of the agreement and a bonus in the amount of $80,000
upon the employment of a full- time Chief Executive Officer of
Vie. These bonus amounts were paid in full by December 16, 2002.
On January 31, 2003, OptiMark further amended the agreement dated
August 16, 2001 to change Mr. Warshaw's employment status to
part-time as of January 15, 2003. Mr. Warshaw retains the
position of Chief Executive Officer and will work the equivalent
of one day per week. Under the terms of the agreement, Mr.
Warshaw is to receive $125,000 in cash and make himself available
for service to the Company for ten days from February 1, 2003 to
March 31, 2003. After the tenth day of service during this
period, Mr. Warshaw is entitled to receive $2,000 per day.
Commencing April 1, 2003, Mr. Warshaw will receive a salary
$2,000 per week and will receive $2,000 per day if he works more
than one day in any given week. Under the terms of the
agreement, the Company will pay for the continued coverage of Mr.
Warshaw and each of his dependents in the Company's medical,
dental, vision and hospitalization programs until December 31,
2003.

The Company, on May 31, 2002, made a loan to Mr. Warshaw in
the amount of $45,000. The principal and accrued interest (at
6% per annum) on such loan is due and payable on May 31, 2003.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following tables set forth, as of December 31, 2002,
certain information regarding the beneficial ownership of the
Common Stock, Series A Convertible Participating Preferred
Stock, $.01 par value (the "Series A Preferred Stock"), Series B
Convertible Participating Preferred Stock, $.01 par value (the
"Series B Preferred Stock"), Series C Convertible Preferred
Stock, $.01 par value (the "Series C Preferred Stock"), Series D
Convertible Preferred Stock, $.01 par value (the "Series D
Preferred Stock"), the Series E Preferred Stock and the Series G
Preferred Stock (collectively, the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stock, the Series E Preferred Stock, the
Series F Preferred Stock and the Series G Preferred Stock are
referred to herein as the "Preferred Stock") for (i) each of
the Company's executive officers named in the Executive Summary
Compensation Table in Item 11; (ii) each current Director of the
Company; (iii) each person who is known to the Company to own
beneficially more than 5% of the voting securities of the
Company of any class; and (iv) all executive officers and
Directors of the Company as a group. Such information is based,
in part, upon the information provided by certain shareholders
of the Company. In the case of persons other than executive
officers and Directors of the Company, such information is based
solely on an internal review of the Company's files, the filings
made by such shareholders pursuant to the Exchange Act and
information received from the Company's transfer agent.

Except as indicated in the footnotes to these tables, all
persons listed have sole voting and investment power for all
shares shown as beneficially owned. With respect to each series
of Preferred Stock, only those executive officers and Directors
who beneficially own shares of that series are named in the
tables. Unless otherwise indicated, the address of each person
named in the following tables is c/o OptiMark Holdings, Inc., 10
Exchange Place, 24th Floor, Jersey City, New Jersey 07302.

COMMON STOCK

Number of
Name and Address of Beneficial Owners Shares Percent
- ------------------------------------- ------------ -------

The Nasdaq Stock Market, Inc. 11,250,000(1) 25.6
Ronald D. Fisher 8,270,000(2) 20.2
SOFTBANK Affiliates 8,250,000(2) 20.2
William A. Lupien 5,624,914(3) 17.2
Dow Jones & Company, Inc. 5,459,592(4) 15.3
Richard W. Jones 4,767,427(5) 14.6
American Century Companies, Inc. 2,800,000(6) 8.4
Robert J. Warshaw 460,000(7) 1.4
Neil G. Cohen 34,000(8) *
Matthew L. Morgan 10,000(9) *

All current directors and executive
officers as a group (4 persons) 14,364,914(10) 34.7
_______
* Less than one percent

(1) Represents shares of Common Stock issuable on exercise of
warrants exercisable within 60 days of December 31, 2002. The
address of The Nasdaq Stock Market, Inc. is 1735 K Street, N.W.,
Washington, D.C. 20006.

(2) Represents 4,101,264, 4,030,761, and 117,975 shares of Common
Stock issuable currently on conversion of 4,101,264, 4,030,761,
and 117,975 shares of Series C Preferred Stock held by SOFTBANK
Capital Partners L.P. ("SOFTBANK Partners"), SOFTBANK Capital
L.P. ("SOFTBANK Capital") and SOFTBANK Capital Advisors Fund
L.P. ("SOFTBANK Advisors"), respectively. SOFTBANK Partners,
SOFTBANK Capital and SOFTBANK Advisors are referred to
collectively herein as the "SOFTBANK Affiliates." In addition,
Mr. Fisher's amount includes 20,000 shares of Common Stock which
could be acquired upon exercise of options within 60 days of
December 31, 2002 held by him. Mr. Fisher, a Director of the
Company, is a managing director of the general partner of each
of the SOFTBANK Affiliates. Mr. Fisher disclaims beneficial
ownership of these shares, except to the extent of his pecuniary
interest. The address of the SOFTBANK Affiliates is 1188 Centre
Street, Newton Center, MA 02459.

(3) Includes 4,725,676 shares held jointly by Mr. Lupien and his
spouse, 792,400 shares held by a family partnership controlled
by Mr. Lupien and 52,419 shares held by Mr. Lupien's spouse.
Mr. Lupien disclaims beneficial ownership of the shares held by
his spouse.

(4) Includes 3,157,028 shares of Common Stock issuable currently
on conversion of 789,257 shares of Series A Preferred Stock.
The address of Dow Jones & Company, Inc. is 200 Liberty Street,
New York, NY 10281.

(5) Includes 3,772,047 shares held by a trust of which Mr. Jones
is the trustee and 90,004 shares held in an IRA of which Mr.
Jones is the beneficiary. Mr. Jones' term as a Director of the
Company expired on May 21, 2001. The address of Mr. Jones is
442 S. Marengo Avenue, Pasadena, CA 91101.

(6) Includes 740,000 shares of Common Stock issuable currently on
conversion of 740,000 shares of non-voting Common Stock. The
address of American Century Companies, Inc. is 4500 Main Street,
Kansas City, MO 64141.

(7) Represents 460,000 shares of Common Stock issuable on
exercise of options exercisable within 60 days of December 31,
2002.

(8) Represents 34,000 shares of Common Stock issuable on exercise
of options exercisable within 60 days of December 31, 2002.

(9) Represents 10,000 shares of Common Stock issuable on exercise
of options exercisable within 60 days of December 31, 2002.

(10) Includes 524,000 shares of Common Stock issuable upon
exercise of options exercisable within 60 days of December 31,
2002.

SERIES A CONVERTIBLE PARTICIPATING PREFERRED STOCK

Number of
Name and Address of Beneficial Owners Shares Percent
- ------------------------------------- ---------- -------

Alice L. Walton 136,426(1) 14.7
Dow Jones & Company, Inc. 789,257 85.3
__________

(1) The address of Alice L. Walton is 10587 Highway 281, South
Mineral Wells, TX 76067.

SERIES B CONVERTIBLE PARTICIPATING PREFERRED STOCK

Number of
Name and Address of Beneficial Owners Shares Percent
- ------------------------------------- ----------- -------

Merrill Lynch affiliates 1,500,000(1) 17.5
PaineWebber Capital, Inc. 1,060,000(2) 12.4
Credit Suisse First Boston 1,000,000(3) 11.7
The Goldman Sachs Group, Inc. 1,000,000(4) 11.7
CIBC Wood Gundy Capital Corp. 850,000(5) 10.0
Nihon Keizai Shimbun, Inc. 800,000(6) 9.3
Bankers Trust Investment Partners 500,000(7) 5.8
__________

(1) Represents 750,000 shares held by ML IBK Positions, Inc.,
562,500 shares held by Merrill Lynch KECALP L.P. 1997 and
187,500 shares held by Merrill Lynch KEKALP International L.P.
1997. The address of the Merrill Lynch entities is 250 Vesey
Street, 5th Floor, New York, NY 10281.

(2) The address of PaineWebber Capital, Inc., is 1285 Avenue of
the Americas, 14th Floor, New York, NY 10019.

(3) The address of Credit Suisse First Boston is c/o OptiMark
Investors, Inc. 11 Madison Avenue, 3rd Floor, New York, NY
10004.

(4) The address of The Goldman Sachs Group, Inc. is 85 Broad
Street, 12th Floor, New York, NY 10004.

(5) The address of CIBC Wood Gundy Capital Corp. is 425 Lexington
Avenue, 9th Floor, New York, NY 10017.

(6) The address of Nihon Keizai Shimbun, Inc. is 9-5, Ohtemachi
1-chome, Chiyoda-ku Tokyo 100-0004, Japan.

(7) The address of Bankers Trust Investment Partners is 130
Liberty Street, 24th Floor, New York, New York 10006.

SERIES C CONVERTIBLE PREFERRED STOCK

Number of
Name and Address of Beneficial Owners Shares Percent
- ------------------------------------- ----------- -------

SOFTBANK Affiliates 8,250,000(1) 100
Ronald D. Fisher 8,250,000(1) 100
All directors and executive officers
as a group (1 person) 8,250,000 100
__________

(1) Represents 4,101,264, 4,030,761, and 117,975 shares held by
SOFTBANK Partners, SOFTBANK Capital and SOFTBANK Advisors,
respectively. Each share of Series C Preferred Stock is
convertible into one share of Common Stock. Mr. Fisher, a
Director of the Company, is a managing director of the general
partner of each of these SOFTBANK Affiliates. Mr. Fisher
disclaims beneficial ownership of these shares, except to the
extent of his pecuniary interest.

SERIES D CONVERTIBLE PREFERRED STOCK

Number of
Name and Address of Beneficial Owners Shares Percent
- ------------------------------------- --------- -------
BancBoston Capital 250,000(1) 100
__________

(1) Represents shares held by BancBoston Capital Inc., whose
address is 175 Federal Street, Boston, MA 02110.

SERIES E CUMULATIVE PREFERRED STOCK

Number of
Name and Address of Beneficial Owners Shares Percent