ONLINETRADINGINC COM CORP, SB-2/A, 1999-05-12

ONLINETRADINGINC COM CORP
SB-2/A, 1999-05-12
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 12, 1999

REGISTRATION NO. 333-75119
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- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1

TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ONLINETRADINGINC.COM CORP.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

<TABLE>
<S> <C> <C>
FLORIDA 6211 65-0607814
(STATE OR JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

2700 N. MILITARY TRAIL, SUITE 200
BOCA RATON, FLORIDA 33431
(561) 995-1010
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)

2700 N. MILITARY TRAIL, SUITE 200, BOCA RATON, FLORIDA 33431
(ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR INTENDED PRINCIPAL PLACE OF BUSINESS)
------------------------
ANDREW A. ALLEN

CHIEF EXECUTIVE OFFICER
ONLINETRADINGINC.COM CORP.
2700 N. MILITARY TRAIL, SUITE 200
BOCA RATON, FLORIDA 33431
(561) 995-1010
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

COPIES OF COMMUNICATIONS TO:

<TABLE>
<S> <C>
DALE S. BERGMAN, P.A. NEIL BARITZ, ESQ.
LINDA C. FRAZIER, ESQ. DREIER & BARITZ, LLP
BROAD AND CASSEL 150 EAST PALMETTO PARK ROAD
201 SOUTH BISCAYNE BOULEVARD, SUITE 3000 SUITE 401
MIAMI, FLORIDA 33131 BOCA RATON, FLORIDA 33432
TELEPHONE NO.: (305) 373-9400 TELEPHONE NO.: (561) 750-0910
FACSIMILE NO.: (305) 373-9443 FACSIMILE NO.: (561) 750-5045
</TABLE>

------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
------------------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
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Common Stock, $0.01 par value.................... 2,587,500(2) $7.00 $18,112,500 $5,343.19
- ---------------------------------------------------------------------------------------------------------------------------------
Underwriter's Warrants, each to purchase one
share of Common Stock(3)....................... 225,000 $0.001 $225 (5)
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Common Stock, par value $0.01 per share, issuable
upon exercise of the Underwriter's
Warrants(4).................................... 225,000 $8.40 $1,890,000 $495.60
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Total............................................ $5,838.79(6)
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</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee and
pursuant to Rule 457.

(2) Includes 337,500 shares of Common Stock which may be issued upon exercise of
a 45-day option granted to the Underwriters solely to cover over-
allotments, if any.

(3) Represents warrants to be issued by us to the Underwriter at the time of
delivery and acceptance of the securities to be sold by us to the public.

(4) Pursuant to Rule 416 under the Securities Act, this Registration Statement
also covers additional shares as may become issuable as a result of the
anti-dilution provisions contained in the warrants.

(5) No fee required pursuant to Rule 457(g) under the Securities Act.

(6) Previously paid.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
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<PAGE> 2

SUBJECT TO COMPLETION, DATED MAY 12, 1999

INITIAL PUBLIC OFFERING PROSPECTUS

ON LINE TRADING INC LOGO

2,250,000 SHARES OF COMMON STOCK

$7.00 PER SHARE

onlinetradinginc.com corp.

onlinetradinginc.com corp

2700 North Military Trail, Suite 200

Boca Raton, Florida 33431

(561) 995-1010

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----------
<S> <C> <C>
THE OFFERING
Public offering
price.............. $7.00 $15,575,000
Underwriting
discounts and
commissions........ $0.70 $ 1,557,500
Proceeds to us....... $6.30 $14,017,500
</TABLE>

We provide financial brokerage services to experienced investors and small to
mid-sized financial institutions through a variety of communication mediums.

This is our initial public offering. Prior to this offering there was no public
market for our shares.

The offering price may not reflect the market price of our shares after the
offering.

Proposed Nasdaq SmallCap Market Symbol -- LINE

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES
ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE RISK FACTORS BEGINNING ON PAGE 5 OF
THIS PROSPECTUS.

THESE SHARES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION. THESE ORGANIZATIONS HAVE NOT DETERMINED WHETHER THIS PROSPECTUS IS
COMPLETE OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

We have entered into a firm commitment underwriting agreement with
Werbel-Roth Securities, Inc. for the sale of the shares in this offering. We
have granted to the underwriter a 45-day option to purchase up to an additional
337,500 shares of common stock to cover over-allotments.

The underwriters expect to deliver the shares to purchasers on
, 1999.

WERBEL-ROTH SECURITIES, INC.

The date of this prospectus is , 1999

THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
SUMMARY........................... 1
RISK FACTORS...................... 5
FORWARD-LOOKING STATEMENTS........ 14
ONLINETRADINGINC.COM CORP. ....... 14
USE OF PROCEEDS................... 14
DIVIDEND POLICY................... 16
DILUTION.......................... 17
CAPITALIZATION.................... 18
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS....... 19
</TABLE>

<TABLE>
<CAPTION>
PAGE
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<S> <C>
BUSINESS.......................... 23
MANAGEMENT........................ 33
PRINCIPAL SHAREHOLDERS............ 37
CERTAIN TRANSACTIONS.............. 37
DESCRIPTION OF CAPITAL STOCK...... 38
SHARES ELIGIBLE FOR FUTURE SALE... 40
UNDERWRITING...................... 41
LEGAL MATTERS..................... 43
EXPERTS........................... 43
WHERE YOU CAN FIND MORE
INFORMATION..................... 43
</TABLE>

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of our common stock.

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<PAGE> 4

SUMMARY

Because this is a summary, it does not contain all of the information that
may be important to you. You should read the more detailed information contained
in this prospectus. Except as otherwise indicated, all information in this
prospectus (1) assumes no exercise of the underwriters' over-allotment option;
(2) does not give effect to 400,000 shares of common stock issuable upon the
exercise of outstanding options under our 1999 Stock Option Plan; and (3) gives
effect to a recapitalization of our capital stock effected in March 1999.

ABOUT US

GENERAL

onlinetradinginc.com provides financial brokerage services to experienced
investors and small to mid-sized financial institutions through a variety of
communication mediums, including the Internet. Unlike our name suggests, we are
not merely a real time online financial brokerage firm which allows clients to
trade directly over the Internet. We are a full-service financial services firm
with direct access to the securities markets via our computerized intranet
infrastructure. This direct access enhances our ability to obtain the simplest,
most direct execution of orders for our clients at the best possible price. In
addition, as a result of the technology we use, our brokers and our clients have
access to the most up-to-date electronic information on stocks, market indices,
analysts' research and news. We provide our clients, through experienced
brokers, the ability to execute orders before and after traditional market
hours. Moreover, we are in the process of upgrading our software and technology
to enable our clients to execute trades more efficiently over the Internet.

Our manner of executing trades using our computerized intranet
infrastructure eliminates middlemen (like market makers and other
broker-dealers) to save costs and increase investing efficiency. We believe we
have a strategic advantage over existing discount, deep discount, and Internet
brokerage firms as a result of:

- our commitment to providing the best stock execution prices directly to
our clients;

- our refusal to accept payment for directing orders to market makers or
other broker-dealers (i.e., accepting payment for order flow); and

- our combination of information and research tools.

THE MARKET

The financial services market has changed considerably over the last 25
years. In 1975 when commissions for securities transactions became deregulated,
the era of negotiated commissions began. The unbundling of brokerage services
from other financial services has permitted investors to pick and choose among
various financial providers for specific services. At the same time, individuals
have greater education, technical capabilities, access to information and
investment choices. Investors are also more self-reliant and value conscious
and, as a result, are managing their own money and are increasingly reluctant to
pay high fees to full-service retail brokers. As a result, discount brokerage
firms willing to accept stock trades for lower commissions have begun to
proliferate. However, many discount brokerage firms do not typically provide the
full breadth of products and services offered by full-service firms, such as
regular access to a broker willing to make
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recommendations or discuss possible investments, elaborate research reports or
access to initial public offerings.

As a result of increased competition among brokerage firms, deep discount
brokerage firms who advertise very low commission rates also entered the market.
However, many of these firms either (1) sell the order received from its clients
to another brokerage firm that makes a market in the stock being traded, or (2)
charge the client a mark-up or mark-down. We believe the selling of order flow
creates inefficiency in the trade execution which may increase the clients'
overall cost of the transaction.

OUR BUSINESS STRATEGY

We believe that we have been successful in creating a new level of service
in the financial services industry by using technology to provide experienced
clients direct access, through brokers, intranets and the Internet, to a trading
desk which goes directly to the source and avoids the middleman to obtain the
best possible execution price. We call this a "Wall Street style trading desk."
Our strategy is designed to ensure that our clients obtain the best possible
execution price and access to relevant market information. We believe
opportunities exist in the financial services industry for a brokerage firm that
is able to provide experienced investors with the cost-savings created by (1)
direct access to professional trade executions, (2) access to up-to-date market
information and (3) the convenience of trading over the Internet.
onlinetradinginc.com was founded on the principle philosophy of providing our
brokers and our clients the best execution prices along with the most relevant
market information and investment research. We consistently analyze new
communication technologies, including the Internet, that will enable our brokers
to better serve our clients. We are determined to offer our clients, regardless
of the communication medium used, the simplest, most direct form of stock
execution.

Our goal is to become a leader in the financial services industry by
capitalizing on the changes occurring in the financial services industry and
providing our clients with specialized services for competitive, fully disclosed
commission rates. We intend to achieve our goal by:

- targeting experienced investors and small to mid-sized financial
institutions who typically (1) execute more trades per year than other
categories of investors, (2) require access to market information, and
(3) require fast professional execution of their orders;

- providing value to our clients at the lowest overall cost, including
direct access to our trading desk which enables them to realize the best
possible execution price;

- providing our clients with value-added services, including access to
well-trained brokers and up-to-date market information;
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- creating technologically innovative solutions to satisfy client needs,
including efficient order execution directly over the Internet; and

- providing our brokers with the tools to meet the needs of our clients.

ABOUT THE OFFERING

Common stock offered......... 2,250,000 shares

Common stock to be
outstanding after the
offering................... 11,138,888 shares

Use of net proceeds.......... Approximately $13,437,500 for sales and
marketing, website enhancement, potential
acquisitions, net capital, additional personnel,
expansion of client services, branch office
expansion, network expansion, Year 2000
readiness, working capital and general corporate
purposes. See "Use of Proceeds."

Proposed Nasdaq Symbol....... LINE

Prior to this offering there has been no public market for our common
stock. We cannot assure you that a trading market for the common stock will
develop or how liquid that market might be. You may not be able to resell your
shares at or above the initial public offering price.

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<PAGE> 7

SUMMARY FINANCIAL INFORMATION

The following is a summary of our Financial Statements for the years ended
January 31, 1998 and 1999, and should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Financial Statements including the notes thereto included in this
prospectus.

<TABLE>
<CAPTION>
YEAR ENDED
JANUARY 31,
------------------------
1999 1998
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<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Commissions................................... $5,525,427 $3,673,728
Total revenues................................ $5,992,064 $3,548,385
Net income (loss)............................. $ 117,298 $ (19,428)
========== ==========
Net income (loss) per share................... $ 0.0132 $ (0.0023)
========== ==========
Weighted average number of common shares
outstanding................................. 8,857,233 8,444,444
========== ==========
</TABLE>

<TABLE>
<CAPTION>
JANUARY 31, 1999
--------------------------
ACTUAL PRO FORMA(1)
---------- ------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital.............................. $ 980,822 $14,418,322
Cash and cash equivalents.................... $1,005,944 $14,443,444
Total assets................................. $2,154,588 $15,592,088
Total liabilities............................ $1,534,622 $ 1,534,622
Shareholders' equity......................... $ 619,966 $14,057,466
</TABLE>

- -------------------------

(1) Adjusted to reflect the sale of the shares of common stock in this offering
(based on an initial public offering price of $7.00 per share) and the
application of the net proceeds therefrom.

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<PAGE> 8

RISK FACTORS

WE HAVE A LIMITED OPERATING HISTORY UPON WHICH TO EVALUATE OUR PERFORMANCE.

We were incorporated in September 1995. However, we only commenced doing
business in February 1996. Accordingly, we have only a limited operating history
upon which you can evaluate our prospects and future performance. While we
reported net income of $117,298 for the year ended January 31, 1999, we reported
a net loss of $19,428 for the year ended January 31, 1998. You should consider
our prospects based on the risks, expenses and difficulties frequently
encountered in the operation of a new business in a rapidly evolving industry
characterized by intense competition.

PERIODS OF DECLINING PRICES AND INACTIVITY OR UNCERTAINTY IN THE MARKET MAY HARM
OUR BUSINESS.

The securities business is volatile and is directly affected by the
following factors (many of which are beyond our control):

- national and international political and economic conditions;

- broad trends in business and finance;

- fluctuations in volume and price levels of securities transactions;

- client default on commitments (such as margin obligations);

- litigation;

- employee's misconduct, errors and omissions;

- regulation at federal and state levels;

- the emergence of numerous discount brokers;

- increased use of technology; and

- a steady decrease in the commissions charged to clients of discount
brokerage services.

Losses associated with these risks could harm our business. These factors
have not harmed our business in the past. However, we cannot assure you that
these trends and/or future changes will not harm our business in the future.

WE MAY NOT BE ABLE TO KEEP UP IN A COST-EFFECTIVE WAY WITH THIS EVOLVING MARKET.

The market for brokerage services, particularly over the Internet, is
rapidly evolving. As a result, the level of demand for online brokerage services
is uncertain. Our offering of brokerage services over the Internet involves a
relatively new approach to securities trading. As a result, intensive marketing
and sales efforts may be necessary to educate prospective clients regarding the
uses and benefits of our brokerage services and products. If the market for
online brokerage services does not develop as we expect, our business may be
harmed.

WE RELY ON A LIMITED CLIENT BASE FOR A SUBSTANTIAL PORTION OF OUR BUSINESS.

Many of our clients are active investors. Active investors can lose a
significant amount of money quickly and become unable to continue to trade. Our
client base has expanded

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from approximately 450 accounts at January 31, 1998, to approximately 730
accounts at January 31, 1999. However, we are still dependent on a limited
client base for a substantial portion of our revenues.

WE MAY NOT BE ABLE TO KEEP UP IN A COST-EFFECTIVE WAY WITH RAPID TECHNOLOGICAL
CHANGES.

The market for brokerage services and, particularly, electronic brokerage
services over the Internet is characterized by rapid technological change,
changing client requirements, frequent service and product enhancements and
introductions, and emerging industry standards. The introduction of services or
products embodying new technologies and the emergence of new industry standards
can render existing services or products obsolete and unmarketable. Our future
success will depend, in part, on our ability to develop and use new
technologies, respond to technological advances, enhance our existing services
and products, and develop new services and products on a timely and
cost-effective basis. We cannot assure you that we will be successful in
pursuing new opportunities or will compete successfully in any new markets.

WE DEPEND ON ANDREW ALLEN, FARSHID TAFAZZOLI, STEVEN ZUM TOBEL AND DEREK
HERNQUIST AND THE LOSS OF ANY OF THEIR SERVICES COULD HARM OUR BUSINESS.

Our business is dependent upon a small number of key executive officers,
principally Andrew Allen, our Chairman and Chief Executive Officer; Farshid
Tafazzoli, our Chief Information Officer; Steven zum Tobel, our President and
Chief Financial Officer; and Derek J. Hernquist, our Vice President and Director
of Operations. The loss of services of any of these individuals could harm our
business. We have employment agreements with each of these officers, and we
maintain "key person" life insurance for our benefit on Mr. Allen and Mr.
Tafazzoli. Competition for key personnel and other highly qualified technical
and managerial personnel is intense. The loss of the services of any of the key
personnel or the inability to identify, hire, train and retain other qualified
personnel in the future could harm our business.

INTENSE COMPETITION FROM EXISTING AND NEW ENTITIES MAY ADVERSELY AFFECT OUR
REVENUES AND PROFITABILITY.

The market for brokerage services and, particularly, electronic brokerage
services, is new, rapidly evolving, intensely competitive and has few barriers
to entry. We expect competition to continue and intensify in the future. A
number of our competitors have significantly greater financial, technical,
marketing and other resources than us. Some of our competitors also offer a
wider range of services and financial products than us and have greater name
recognition and more extensive client bases than us. These competitors may be
able to respond more quickly to new or changing opportunities, technologies, and
client requirements than us and may be able to undertake more extensive
promotional activities, offer more attractive terms to clients, and adopt more
aggressive pricing policies than us. Moreover, current and potential competitors
have established or may establish cooperative relationships among themselves or
with third parties or may consolidate to enhance their services and products. We
cannot assure you that we will be able to compete effectively with current or
future competitors or that the competitive pressures faced by us will not harm
our business.

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THERE ARE SIGNIFICANT COSTS ASSOCIATED WITH OUR PROPOSED NETWORK INFRASTRUCTURE
EXPANSION AND SUCH EXPANSION COULD CAUSE POTENTIAL DISRUPTIONS IN SERVICE.

We will need to expand our network infrastructure and client support
capabilities in anticipation of an expanded client base. Such expansion will
require us to make significant capital expenditures for servers, routers and
computer equipment, to increase bandwidth for internet connectivity, and to hire
and train additional client service personnel. Such expansion must be completed
without system disruptions, slower response times or degradation in speed of
order fulfillment and levels of client service. System disruptions, or
degradation in the level of client service during this process could harm our
business. We anticipate that the costs of expansion over the next 12 months will
be approximately $600,000.

WE DEPEND HEAVILY ON COMPUTER SYSTEMS AND SYSTEM FAILURES COULD HARM OUR
BUSINESS.

We rely heavily on various electronic mediums. We receive trade orders
using the Internet and telephone. In addition, we process trade orders through
various avenues including, but not limited to, Instinet Corporation, SelectNet,
intranets, floor brokers, and Bear Stearns Securities Corp. These methods of
trading are heavily dependent on the integrity of the electronic systems
supporting them. Heavy stress placed on these systems during peak trading times
could cause our systems to operate at unacceptably low speeds or fail
altogether. Any significant degradation or failures of our computer systems,
those of Bear Stearns Securities Corp., or any other systems in the trading
process (e.g., online service providers, record keeping and data processing
functions performed by third parties and third-party software such as Internet
browsers) could cause clients to suffer delays in trading. These delays could
cause substantial losses for our clients and could subject us to claims from
clients for losses, including litigation claiming fraud or negligence. We have
created operating redundancies in our systems and regularly conduct backups to
protect against system failures. In addition, if one of our offices was not
operational, under certain circumstances, some of our other offices could
continue to service clients through their facilities. These systems and/or
safeguards may not be sufficient in all circumstances.

EMPLOYEE MISCONDUCT IS DIFFICULT TO DETECT AND COULD HARM OUR BUSINESS.

There have been a number of highly publicized cases involving fraud or
other misconduct by employees in the financial services industry in recent
years, and we run the risk that employee misconduct could occur. Misconduct by
employees could include binding us to transactions that exceed authorized limits
or present unacceptable risks, or hiding from us unauthorized or unsuccessful
activities. In either case, this type of misconduct could result in unknown and
unmanaged risks or losses. Employee misconduct could also involve the improper
use of confidential information, which could result in regulatory sanctions and
serious reputational harm. It is not always possible to deter employee
misconduct, and the precautions we take to prevent and detect this activity may
not be effective in all cases. We have not experienced employee misconduct in
the past. We cannot assure you, however, that we will not experience it in the
future.

ANY POSSIBLE COMPROMISES OF OUR SYSTEMS OR SECURITY COULD HARM OUR BUSINESS.

The secure transmission of confidential information over public networks is
a critical element of our operations. We rely on encryption and authentication
technology to provide the security and authentication necessary to effect secure
transmission of confidential information over the Internet. To the best of our
knowledge, to date, we have not
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experienced any security breaches in the transmission of confidential
information. Moreover, we continually evaluate advanced encryption technology to
ensure the continued integrity of our systems. However, we cannot assure you
that advances in computer capabilities, new discoveries in the field of
cryptography or other events or developments will not result in a compromise of
the technology or other algorithms used by us and our vendors to protect client
transaction and other data. Any compromise of our systems or security could harm
our business.

WE RELY VERY HEAVILY ON BEAR STEARNS SECURITIES CORP. AND TERMINATION OF OUR
AGREEMENT WITH BEAR STEARNS COULD HARM OUR BUSINESS.

Our clearing agreement with Bear Stearns may be terminated by either party
upon 60 days prior written notice. Termination of this agreement could harm our
business. Pursuant to our agreement, Bear Stearns, on a fee basis, processes all
securities transactions for our account and the accounts of our clients.
Services of Bear Stearns include billing and credit extension, control and
receipt, custody and delivery of securities, for which we pay a transaction
charge. We are dependent on the operational capacity and the ability of Bear
Stearns for the orderly processing of transactions. In addition, by engaging the
processing services of a clearing firm, we are exempt from certain capital
reserve requirements and other complex regulatory requirements imposed by
federal and state securities laws. Moreover, we have agreed to indemnify and
hold Bear Stearns harmless from certain liabilities or claims, including claims
arising from the transactions of our clients.

OUR SUCCESS WILL DEPEND HEAVILY ON THE ACCEPTANCE OF ONLINE COMMERCE AND THE
INTERNET, OF WHICH THERE IS NO ASSURANCE.

Acceptance of our Internet trading technology will depend upon the
continued adoption of the Internet as a widely used medium for commerce and
communication. The Internet may not prove to be a viable commercial marketplace
because of inadequate development of the necessary infrastructure, such as a
reliable network backbone, or timely development of complementary services and
products, such as high speed modems and high speed communication lines. The
Internet has experienced, and is expected to continue to experience, significant
growth in the number of users and amount of traffic. However, the Internet
infrastructure may not be able to support the demands placed on it by this
continued growth. In addition, the Internet could lose its viability due to
delays in the development or adoption of new standards and protocols to handle
increased levels of Internet activity or due to increased governmental
regulation. Moreover, critical issues concerning the commercial use of the
Internet, including security, reliability, cost, ease of use, accessibility and
quality of service, remain unresolved. These issues may negatively affect the
growth of Internet use or the attractiveness of commerce and communication on
the Internet. Our business will be materially harmed if critical issues
concerning the commercial use of the Internet are not favorably resolved, the
necessary infrastructure is not developed, or the Internet does not become a
viable commercial marketplace.

WE EXTEND CREDIT TO OUR CLIENTS AND ARE SUBJECT TO RISKS AS A RESULT.

We are subject to the risks inherent in extending credit to the extent that
we permit our clients to purchase securities on a "margin" basis. A portion of
our clients' securities activities are transacted on a margin basis (through the
clearing broker which we have agreed to indemnify), pursuant to which credit is
extended to the client and secured by cash and securities in the client's
account or "short sales" (i.e., the sale of securities not

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yet purchased). These risks are increased during periods of volatile markets in
which the value of the collateral held by us could fall below the amount
borrowed by the client. If margin requirements are not sufficient to cover
losses, we may be required to sell or buy securities at prevailing market prices
and incur losses to satisfy client obligations. As of January 31, 1999, we have
approximately $20,392,000 in credit extended to our clients through Bear
Stearns, our clearing firm.

WE ARE CURRENTLY SUBJECT TO SECURITIES REGULATION AND FAILURE TO COMPLY COULD
SUBJECT US TO PENALTIES OR SANCTIONS THAT COULD HARM OUR BUSINESS.

The securities industry in the United States is subject to extensive
regulation under both federal and state laws. In addition, the Securities and
Exchange Commission, National Association of Securities Dealers, Inc. and other
self-regulatory organizations, such as the various stock exchanges and state
securities commissions, require strict compliance with their rules and
regulations. Broker-dealers are subject to regulations covering all aspects of
the securities business, including sales methods, trade practices among
broker-dealers, use and safekeeping of clients' funds and securities, capital
structure, record keeping and the conduct of directors, officers and employees.
Failure to comply with any of these laws, rules or regulations could result in
censure, fine, the issuance of cease-and-desist orders or the suspension or
expulsion of a broker-dealer or any of its officers or employees, any of which
could harm our business.

POTENTIAL GOVERNMENTAL REGULATION OF THE INTERNET AND ONLINE COMMERCE COULD HARM
OUR BUSINESS.

Due to the increasing popularity and use of the Internet and other online
services, various regulatory authorities are considering laws and/or regulations
with respect to the Internet or other online services covering issues such as
user privacy, pricing, content copyrights, and quality of services. Furthermore,
the growth and development of the market for online commerce may prompt more
stringent consumer protection laws that may impose additional burdens on those
companies conducting business online. Moreover, the recent increase in the
number of complaints by online traders could lead to more stringent regulations
of online trading firms and their practices by the SEC, NASD and other
regulatory agencies. The adoption of any additional laws or regulations may
decrease the growth of the Internet or other online services, which could, in
turn, decrease the demand for our trading systems and services and increase our
cost of doing business. Moreover, the applicability to the Internet and other
online services of existing laws in various jurisdictions governing issues such
as property ownership, sales and other taxes and personal privacy is uncertain
and may take years to resolve. In addition, as our services are available over
the Internet in multiple states and foreign countries, and as we have numerous
clients residing in these states and foreign countries, these jurisdictions may
claim that we are required to qualify to do business as a foreign corporation in
each state and foreign country. While we are registered as a broker-dealer in 47
states, we are qualified to do business as a foreign corporation in only a few
states; our failure to qualify as a broker-dealer in other jurisdictions or as
an out-of-state or "foreign" corporation in a jurisdiction where it is required
to do so could subject us to taxes and penalties for the failure to qualify. Our
business could be harmed by any new legislation or regulation, the application
of laws and regulations from jurisdictions whose laws do not currently apply to
our business or the applications of existing laws and regulations to the
Internet and other online services.

9
<PAGE> 13

WE CONDUCT PROPRIETARY TRADING AND ANY POTENTIAL LOSSES WOULD REDUCE OUR ASSET
VALUE AND HARM OUR BUSINESS.

We operate a small proprietary trading department separate and distinct
from all client commission business. The trading department maintains
inventories of equity securities on both a long and short basis. To the extent
we have any long positions (i.e., own assets), a downturn in these markets could
result in a decline in the value of our positions resulting in losses and
reduced asset values. Conversely, to the extent we have short positions (i.e.,
have sold assets we do not own), an upturn in those markets could expose us to
unlimited losses as we attempt to cover our short position by acquiring assets
in a rising market. As of April 30, 1999, the inventory in our proprietary
trading account had a market value of $172,647 and a cost basis of $168,386.

FAILURE TO COMPLY WITH NET CAPITAL REQUIREMENTS COULD SUBJECT US TO SUSPENSION
OR REVOCATION BY THE SEC OR EXPULSION BY THE NASD.

The SEC, the NASD and various other regulatory agencies have stringent
rules with respect to the maintenance of specific levels of net capital by
securities brokers. Failure to maintain the required net capital may subject a
firm to suspension or revocation of registration by the SEC and suspension or
expulsion by the NASD and other regulatory bodies and ultimately could require
our liquidation. In addition, a change in the net capital rules, the imposition
of new rules or any unusually large charge against net capital could limit our
operations that require the intensive use of capital, such as the financing of
client account balances. A significant operating loss or any unusually large
charge against net capital could adversely affect our ability to expand or even
maintain our present levels of business, which could harm our business.

WE MAY NEED ADDITIONAL CAPITAL AND MAY NOT BE ABLE TO OBTAIN IT.

We currently anticipate that our available cash resources, combined with
the net proceeds from the offering, will be sufficient to meet our presently
anticipated working capital and capital expenditure requirements for the next 12
months. However, if we need to raise additional funds in order to support
further expansion, develop new or enhanced services and products, respond to
competitive pressures, acquire complementary businesses or technologies or
respond to unanticipated requirements, we cannot assure you that additional
financing will be available when needed on terms favorable to us.

WE RELY HEAVILY ON OUR INTELLECTUAL PROPERTY BUT HAVE LIMITED INTELLECTUAL
PROPERTY PROTECTION.

Our success and ability to compete is dependent to a significant degree on
our proprietary technologies, ideas, know-how and other proprietary information.
We rely primarily on confidentiality agreements and non-compete agreements to
protect our proprietary technology. We have no patents, no trademarks and no
registered copyrights. Notwithstanding the precautions we take to protect our
intellectual property rights, third parties may copy or otherwise obtain and use
our proprietary technology without authorization or otherwise infringe on our
proprietary rights. In addition, third parties may independently develop
technologies similar to ours. Policing unauthorized use of our intellectual
property rights may be difficult, particularly because it is difficult to
control the ultimate destination or security of information transmitted over the
Internet. In addition, the laws of foreign countries may afford inadequate
protection of intellectual property rights. Our business may be harmed if we are
unable to protect our intellectual property rights.
10
<PAGE> 14

OWNERSHIP OF OUR COMMON STOCK IS CONCENTRATED WITH OUR DIRECTORS AND EXECUTIVE
OFFICERS WHO CAN CONTROL THE COMPANY.

Upon completion of this offering, our directors and executive officers will
beneficially own approximately 80% of our common stock. Accordingly, following
completion of this offering, management will be in a position to control us,
elect all directors, cause an increase in our authorized capital or our
dissolution or merger or sale of assets, and, generally, to direct our affairs.

INVESTORS WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION.

This offering involves an immediate and substantial dilution of $5.74 per
share (555%) between the net tangible book value per share after the offering
and the initial public offering price per share assuming an initial public
offering price of $7.00 per share.

WE HAVE CONTRACTUAL OBLIGATIONS TO WERBEL-ROTH SECURITIES, INC. WHICH COULD
REQUIRE US TO INCUR ADDITIONAL EXPENSES AND/OR LIMIT OUR FLEXIBILITY.

We will have certain ongoing contractual obligations to Werbel-Roth
Securities, Inc., the Representative of the underwriters, following the
consummation of this offering. We have agreed to sell to the Representative and
its designees for an aggregate of $100, warrants to purchase up to 225,000
shares of common stock at an exercise price of $8.40 per share (120% of the
public offering price per share). In addition, we have agreed to register, at
our expense, the re-sale of the warrants and the shares of common stock issuable
upon exercise of the warrants on one occasion during their exercise term and to
include these securities in any appropriate registration statement which is
filed by us during the seven years following the date of this prospectus.

NO DIVIDENDS HAVE BEEN PAID AND NONE ARE CONTEMPLATED.

We have not paid any dividends on our common stock and do not presently
intend to. We anticipate that for the foreseeable future all earnings, if any,
will be retained for the operation and expansion of our business.

THERE WAS NO PRIOR PUBLIC MARKET FOR OUR COMMON STOCK AND THERE IS THE
POSSIBILITY OF VOLATILITY OF THE STOCK PRICE.

Prior to this offering, there has been no public market for our common
stock. It is anticipated that our common stock will be listed on The Nasdaq
SmallCap Market; however, we cannot assure you that an active trading market
will develop or be sustained. The initial public offering price will be
determined by negotiations between us and the Representative, and may not be
indicative of the actual value of the common stock and may bear no relationship
to the price at which the common stock will trade after completion of this
offering. The market price of our common stock is subject to wide fluctuations
in response to variations in operating results, general trends in our industry,
actions taken by competitors, the overall performance of the stock market and
other factors.

THERE ARE MANY SHARES ELIGIBLE FOR FUTURE SALE AND SALES OF THOSE SHARES COULD
AFFECT THE MARKET PRICE NEGATIVELY.

Upon completion of the offering, we will have approximately 11,138,888
shares of common stock outstanding, including 2,250,000 shares of common stock
offered hereby and 8,888,888 "restricted" shares of common stock. The shares of
common stock offered

11
<PAGE> 15

hereby will be freely tradable without restriction or further registration under
the Securities Act of 1933, as amended the "Securities Act"), by persons other
than "affiliates" within the meaning of Rule 144 promulgated under the
Securities Act. The holders of restricted shares generally will be entitled to
sell these shares in the public securities market without registration under the
Securities Act to the extent permitted by Rule 144 (or Rule 145, as applicable)
promulgated under the Securities Act or any exemption under the Securities Act.
All of the 8,888,888 restricted shares are currently eligible for sale under
Rule 144 (with the exception of 296,296 of the 444,444 shares owned by Mr.
Steven zum Tobel, our President and Chief Financial Officer, which are subject
to a right of redemption). However, the holders of the 8,888,888 restricted
shares have agreed not to sell or dispose of those shares for a period of 12
months from the date of this prospectus without the written consent of the
Representative. Future sales of a substantial amount of common stock in the
public market, or the perception that future sales may occur, could adversely
affect the market price of the common stock prevailing from time to time in the
public market.

DELISTING OUR SECURITIES FROM THE NASDAQ STOCK MARKET WOULD SUBJECT US TO THE
PENNY STOCK RULES WHICH COULD AFFECT THE LIQUIDITY OF THE SECURITIES.

It is currently anticipated that the common stock will be eligible for
listing on The Nasdaq SmallCap Market upon the completion of this offering. In
order to continue to be listed on The Nasdaq SmallCap Market, however, we must
maintain $2,000,000 in net tangible assets, a $1,000,000 market value of the
public float, have two market makers, a minimum bid price of $1.00 per share,
and maintain a minimum of two independent directors on our Board of Directors.
Although we believe that we will be able to satisfy these maintenance criteria,
failure to do so in the future may result in the delisting of our securities
from The Nasdaq SmallCap Market, and trading, if any, in our securities would
thereafter be conducted in the OTC Bulletin Board. As a result of any delisting,
an investor could find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, our securities. In addition, if the common
stock were to become delisted from trading on The Nasdaq SmallCap Market and the
trading price of the common stock were to fall below $5.00 per share on the date
our securities were delisted, trading in these securities would also be subject
to the requirements of certain rules promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), which require additional
disclosure by broker-dealers in connection with any trades involving a stock
defined as a penny stock (generally, any non-Nasdaq equity security that has a
market price of less than $5.00 per share, subject to certain exceptions). These
rules require the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith, and impose various sales practice requirements on broker-dealers who
sell penny stocks to persons other than established clients and accredited
investors (generally institutions). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. The additional burdens imposed upon broker-dealers by these requirements
may discourage broker-dealers from effecting transactions in our securities,
which could severely limit the market price and liquidity of our securities and
the ability of purchasers in this offering to sell their securities in the
secondary market.

12
<PAGE> 16

WE MAY ISSUE PREFERRED STOCK WITH PREFERENTIAL RIGHTS WHICH MAY ADVERSELY AFFECT
YOUR RIGHTS.

The rights of the holders of common stock will be subject to and may be
adversely affected by the rights of holders of any preferred stock that may be
issued in the future. Our Articles of Incorporation authorize our Board of
Directors to issue 1,000,000 shares of "blank check" Preferred Stock and to fix
the rights, preferences, privileges and restrictions, including voting rights,
of these shares, without further shareholder approval. Of the 1,000,000 shares
of Preferred Stock authorized, 300 shares have been designated Series A
Redeemable Preferred Stock.

CERTAIN ANTI-TAKEOVER PROVISIONS INCLUDED IN OUR ARTICLES OF INCORPORATION AND
THE FLORIDA STATUTES MAY DISCOURAGE, DELAY OR PREVENT A CHANGE OF CONTROL WHICH
MIGHT OTHERWISE BE BENEFICIAL TO THE HOLDERS.

Preferred stock could be issued to discourage, delay or prevent a change in
our control. Our Articles of Incorporation authorize the issuance of "blank
check" preferred stock with the designations, rights and preferences determined
by our Board of Directors. Accordingly, the Board of Directors can, without
shareholder approval, issue shares of preferred stock with dividend,
liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the holders of our common stock. As of the date
of this prospectus, 300 shares of preferred stock have been designated Series A
Redeemable Preferred Stock and are currently issued and outstanding. Currently,
we do not have any plans to issue any additional series of our preferred stock.

Additionally, certain provisions of the Florida Business Corporation Act
could delay, defer or impede the removal of incumbent directors and could make
more difficult a merger, tender offer or proxy contest involving us, even if
these events could be beneficial to our shareholders. These provisions could
also limit the price that certain investors might be willing to pay in the
future for our common stock. In addition, Florida has certain laws that may
deter or frustrate takeovers of Florida corporations.

WE MAY NOT BE PREPARED FOR THE YEAR 2000 AND/OR THIRD-PARTIES ON WHICH WE RELY
MAY NOT BE PREPARED WHICH COULD HARM OUR BUSINESS.

Because we depend to a very substantial degree upon the proper functioning
of our computer systems, a failure of our systems to be Year 2000 compliant
could harm our business. Failure of this kind could, for example, cause
settlement of trades to fail, lead to incomplete or inaccurate accounting,
recording or processing of trades in securities, currencies, commodities and
other assets; result in generation of erroneous results; or give rise to
uncertainty about our exposure to trading risks and our need for liquidity. If
not remedied, potential risks include business interruption or shutdown,
financial loss, regulatory actions, reputational harm and legal liability.

In addition, we depend upon the proper functioning of third-party computer
and non-information technology systems. If third parties with whom we interact
have Year 2000 problems that are not remedied, the following problems could
result:

- in the case of vendors, in disruption of important services upon which we
depend, such as telecommunications and electrical power;

- in the case of third-party data providers, in the receipt of inaccurate
or out-of-date information that would impair our ability to perform
critical data functions;

13
<PAGE> 17

- in the case of financial intermediaries such as exchanges and clearing
agents, in failed trade settlements, an inability to trade in certain
markets and disruption of funding flows;

- in the case of banks and other lenders, in the disruption of capital
flows potentially resulting in liquidity stress; and

- in the case of counterparties and customers, in financial and accounting
difficulties for those parties that expose us to increased credit risk
and lost business.

Disruption or suspension of activity in the world's financial markets is
also possible. In addition, uncertainty about the success of remediation efforts
generally may cause many market participants to reduce the level of their market
activities temporarily as they assess the effectiveness of these efforts during
a "phase-in" period beginning in late 1999. This in turn could result in a
general reduction in trading and other market activities (and lost revenues) as
well as reduced funding availability in late 1999 and early 2000. We cannot
predict the impact that any reduction would have on our business.

FORWARD-LOOKING STATEMENTS

Certain important factors may affect our actual results and could cause
those results to differ materially from any forward-looking statements made in
this prospectus or that are otherwise made by us or on our behalf.
"Forward-looking statements" are not based on historical facts and are typically
phrased using words such as "may," "will," "expect," "believe," "anticipate,"
"intend," "could," "estimate" or "continue" and similar expressions or
variations.

Investing in our common stock is risky. You should carefully consider the
preceding risks before making an investment decision. These risks are not the
only ones that we face. Additional risks that generally apply to publicly traded
companies and companies in our industry, that we have not yet identified or that
we think are immaterial may also impair our business operations. Our business,
operating results and financial condition could be adversely affected by any of
the preceding risks. The trading price of our common stock could decline due to
any of these risks, and you could lose all or part of your investment. You
should also refer to the other information set forth in this prospectus,
including our financial statements and the related notes.

ONLINETRADINGINC.COM CORP.

We were incorporated in Florida in September 1995 as Online Trading, Inc.
In February 1999, we changed our name to onlinetradinginc.com corp. and began
doing business under the name onlinetradinginc.com.

Our principal executive offices are located at 2700 North Military Trail,
Suite 200, Boca Raton, Florida 33431, and our telephone number is (561)
995-1010. Our World Wide Web site address is www.onlinetradinginc.com.
Information contained in our web site should not be considered part of this
prospectus.

USE OF PROCEEDS

We estimate we will receive $13,437,500 from the sale of 2,250,000 shares
of common stock offered at an initial public offering price of $7.00 per share
after deducting the underwriting discount, underwriters' non-accountable expense
allowance and additional

14
<PAGE> 18

offering expenses payable by us (estimated to be $265,000). The net proceeds are
expected to be used as follows:

<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
AMOUNT PERCENTAGE
----------- -----------
<S> <C> <C>
Sales and Marketing(1)....................... $ 3,500,000 26.0%
Website Enhancement and Programming(2)....... 2,000,000 14.9
Potential Acquisitions(3).................... 2,000,000 14.9
Increase Net Capital(4)...................... 1,500,000 11.1
Hiring Additional Management and Personnel... 1,150,000 8.5
Expansion of Client Service Department(5).... 1,000,000 7.4
Branch Office Expansion(6)................... 1,000,000 7.4
Network Expansion and Upgrade................ 600,000 4.8
Year 2000 Readiness and Testing.............. 100,000 .7
Working Capital and General Corporate
Purposes................................... 587,500 4.3
----------- -----
13,437,300 100.0%
</TABLE>

- -------------------------
(1) Represents costs associated with a national marketing and advertising
campaign, including advertisements in national newspapers and trade
publications and on the Internet, as well as salaries of personnel engaged
in these activities.

(2) Represents amounts to be used to enhance our website and complete the
programming to allow for more efficient execution of transactions over the
Internet, including the acquisition of additional computer equipment and
software.

(3) We are continually evaluating potential acquisitions to provide our clients
with the best possible service and products. Currently, we have no
agreements for any specific acquisition.

(4) Represents amounts we will maintain in relatively liquid form as part of the
net capital we are required by the NASD to maintain.

(5) Represents costs of additional personnel and systems to provide additional
client support and continue software and program development.

(6) Management frequently explores possible locations for branch offices. We
currently have no agreement for any specific location in place.

If the underwriter exercises its over-allotment option in full, we will
realize additional net proceeds of $2,040,375 which will be added to our working
capital.

The foregoing represents our best estimate of the allocation of the net
proceeds of this offering based upon the current status of our business. This
estimate is based on certain assumptions, including continued expansion of our
client base and corresponding increases in revenues and that our proposed
network expansion can be completed and new services can be introduced without
unanticipated delays or costs. If any of these factors change, we may find it
necessary to reallocate a portion of the proceeds within the above-described
categories or use portions of the proceeds for other purposes. Our estimates may
prove to be inaccurate, new programs or activities may be undertaken which will
require considerable additional expenditures or unforeseen expenses may occur.

Based on currently proposed plans and assumptions relating to the
implementation of our business plans, we believe that the proceeds of this
offering, combined with cash flow

15
<PAGE> 19

from operations, will enable us to fund our planned operations for a period of
at least 12 months from the date of this prospectus. However, we cannot assure
you we will realize cash flow from operations or that the cash flow will be
sufficient. If our plans change, our assumptions change or prove to be
inaccurate or if the proceeds of this offering otherwise prove to be
insufficient to implement our business plans, we may find it necessary or
desirable to reallocate a portion of the proceeds within the above-described
categories, use proceeds for other purposes, seek additional financing or
curtail our operations. We cannot assure you that any additional financing will
be available to us on acceptable terms, or at all.

Proceeds not immediately required for the purposes described above will be
invested principally in United States government securities, short-term
certificates of deposit, money market funds or other short-term interest-bearing
investments.

DIVIDEND POLICY

We have never paid dividends on our common stock and do not intend to pay
dividends for the foreseeable future. We intend to retain any earnings to
finance the development and expansion of our business. Payment of dividends in
the future will be subject to the discretion of our Board of Directors and will
depend upon our ability to generate earnings, our need for capital and our
overall financial condition, and as legally permissible, among other factors.

16
<PAGE> 20

DILUTION

The difference between the initial public offering price per share of
common stock and the net tangible book value per share after this offering
constitutes the dilution to investors in this offering. Net tangible book value
per share of common stock is determined by dividing our net tangible book value
(total tangible assets less total liabilities) by the number of shares of common
stock outstanding.

As of January 31, 1999, our net tangible book value was $619,966 or $0.07
per share of common stock. Net tangible book value represents the amount of our
total assets, less any intangible assets and total liabilities. After giving
effect to the sale of the 2,250,000 shares of common stock offered through this
prospectus (at an initial public offering price of $7.00 per share), and after
deducting the underwriting discount and other estimated expenses of the
offering), our adjusted pro forma net tangible book value as of January 31,
1999, would have been $14,057,466 or $1.26 per share. This represents an
immediate increase in net tangible book value of $1.19 per share to existing
shareholders and an immediate dilution of $5.74 per share to investors in the
offering. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Initial public offering price............................... $7.00
Net tangible book value before offering................... $0.07
Increase attributable to investors in this offering....... $1.19
-----
Net tangible book value after offering.................... $1.26
-----
Dilution to new investors................................... $5.74
=====
</TABLE>

If the underwriters exercise their over-allotment option in full, the pro
forma adjusted net tangible book value per share of common stock after the
offering would be $1.40, which would result in dilution to your investment of
$5.60 per share of common stock.

The following table shows, at January 31, 1999, a comparison of the total
number of shares of common stock purchased from us, the total consideration paid
and the average price paid per share by existing common shareholders and to be
paid by investors who purchase shares of common stock in this offering (at an
assumed initial public offering price of $7.00 per share):

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
-------------------- --------------------- PRICE
NUMBER PERCENT DOLLARS PERCENT PER SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing Common Shareholders... 8,888,888 79.8% $ 175,026 1.1% $0.02
New Investors.................. 2,250,000 20.2 15,750,000 98.9 $7.00
---------- ----- ----------- -----
Total........................ 11,138,888 100.0% $15,925,026 100.0%
========== ===== =========== =====
</TABLE>

The above tables assume no exercise of the underwriter's over-allotment
option. If the option is exercised in full, the new investors will have paid
$18,112,500 for 2,587,500 shares of common stock, representing approximately
23.2% of the total number of shares of common stock outstanding.

17
<PAGE> 21

CAPITALIZATION

The following table sets forth our capitalization as of January 31, 1999,
adjusted to give effect to the sale of 2,250,000 shares of common stock offered
in this offering at an assumed initial public offering price of $7.00 per share
and the receipt of the net proceeds from the sale. You should read this table in
conjunction with our financial statements and the notes included elsewhere in
this prospectus.

<TABLE>
<CAPTION>
JANUARY 31, 1999
-------------------------
AS
ACTUAL ADJUSTED(1)
---------- -----------
<S> <C> <C>
Short-term borrowings................................ $ 125,000 $ 125,000
Long-term borrowings................................. 400,000 400,000
Shareholders' equity:
Preferred stock, $0.01 par value, 1,000,000 shares
authorized, 300 shares of Series A Redeemable
Preferred Stock, stated value of $1,000 per
share, issued and outstanding................... 300,000 300,000
Common stock, $0.01 par value, 100,000,000 shares
authorized; 8,888,888 shares (actual),
11,138,888 shares (as adjusted) issued and
outstanding..................................... 88,888 111,389
Additional paid-in capital......................... 86,138 13,501,137
Retained earnings.................................. 144,940 144,940
---------- -----------
Total shareholders' equity........................... 619,966 14,057,466
---------- -----------
Total capitalization................................. $1,144,966 $14,582,466
========== ===========
</TABLE>

- -------------------------

(1) Adjusted to reflect the sale of 2,250,000 shares of common stock in this
offering at an initial public offering price of $7.00 per share and the
application of the net proceeds therefrom (after deducting the underwriting
discount, non-accountable expense allowance and the estimated expenses of
this offering).

18
<PAGE> 22

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

INTRODUCTION

onlinetradinginc.com is a fully-disclosed brokerage firm registered with
the SEC, the NASD, the Municipal Securities Rulemaking Board ("MSRB") and 47
state securities divisions and the District of Columbia. We have applications
pending with the remaining 2 continental states, and expect to be registered in
every state (except Hawaii and Puerto Rico) by June, 1999.

We are a full-service financial services firm targeting experienced
investors and small to mid-sized financial institutions (such as hedge funds,
money managers, mutual funds and pension funds.) We have generated positive
operating cash flows since inception, and we intend to continue our business
strategy while increasing brand awareness and customer loyalty.

We plan to expand our business and operations by utilizing, among other
things, the Internet to efficiently market and distribute our services to
additional potential clients. The anticipated expansion will require additional
capital to advertise nationally, improve the functionality of our web site,
expand our computer network, purchase additional equipment and hire additional
administrative and customer service personnel.

RESULTS OF OPERATIONS

YEAR ENDED JANUARY 31, 1999 COMPARED WITH YEAR ENDED JANUARY 31, 1998

Our total revenue for the fiscal year ended January 31, 1999 ("Fiscal
1999") was $5,992,064, a 69% increase over the total revenue of $3,548,385 for
the fiscal year ended January 31, 1998 ("Fiscal 1998"). Total revenue increased
as a result of an additional $1,851,699 in commissions, an additional $75,512 in
interest revenues due to an improved interest sharing agreement with the
Clearing Firm, and $328,495 in trading profits.

The increase in commission revenues was primarily due to servicing new
institutional and retail customer business. In Fiscal 1999, we began doing
business with ten new banks and three new mutual funds. In addition, our client
base expanded by 162% from approximately 450 accounts at January 31, 1998, to
approximately 730 accounts at January 31, 1999. We intend to continue to attract
new institutional business through targeted marketing directed towards the small
to midsize financial institution and experienced institutional brokers. We added
one new branch office late in the last quarter of Fiscal 1999 which also added
an additional $127,864 in commission revenue. The increase in trading profits
was due to our implementing stricter internal trading risk parameters in order
to limit losses and our decreasing the losses in the error accounts because of
our increased effectiveness.

We had pretax earnings of $176,948 and net income of $117,298 for Fiscal
1999 compared to net losses of $19,428 for Fiscal 1998. The increase in net
income resulted from an increase in operating revenues combined with an overall
increase in our operating gross margins. We intend to continue our focus on
reducing transaction costs as our transaction volume continues to increase. We
paid $1,460,000 in management bonuses for Fiscal 1999 and $602,000 for Fiscal
1998. Pursuant to new employment agreements effective as of February 1, 1999,
the compensation of executive shareholder management has been set and
limitations have been placed on the amount of bonuses executive shareholder
management may receive.

19
<PAGE> 23

Our largest operating expense is our cost to clear trades through the
Clearing Firm, Instinet and Floorbrokers, i.e., our clearing costs. Our clearing
costs increased from $1,592,325 for Fiscal 1998 to $1,840,003 for Fiscal 1999.
Although the dollar amount of this expense increased, the expense as a
percentage of commission income earned decreased from 43.3% to 33.3%. This
decrease in variable costs percentage was primarily a result of negotiating
lower clearing rates with the Clearing Firm. The commission expense paid to
brokers increased from $200,499 in Fiscal 1998 to $1,144,616 in Fiscal 1999.
This increase was a result of hiring an additional five commission-based brokers
late in Fiscal 1998 and seven additional commission-based brokers in Fiscal
1999. Our salaries and benefits increased from $599,603 in Fiscal 1998 to
$736,385 for Fiscal 1999. The increase was a result of hiring our President and
Chief Financial Officer in March 1998, and instituting a retirement plan whereby
eligible employees may contribute up to $500 per month for which we match dollar
for dollar up to 3% of the employee's compensation. We contributed a total of
$46,987 for Fiscal 1999.

Occupancy and administrative expenses were $406,814 in Fiscal 1999 as
compared to $324,499 in Fiscal 1998. Although the expense increased in terms of
actual dollars, it declined as a percentage of revenues. We anticipate that
occupancy and administrative expenses will increase in the future as we expand
our number of branch offices and incur additional office lease expense. Included
in our occupancy and administrative expense was our telephone expense. Our
telephone and communication expenses increased from $96,150 in Fiscal 1998 to
$108,389 in Fiscal 1999. We anticipate these costs to continue to increase in
terms of dollar amounts, but as we grow, our telephone rates per minute have
declined and should continue to decline as a result of our increased long
distance volume.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have financed our operations primarily by raising
$465,000 in private equity and $525,000 in debt via subordinated loans.
Subordinated loans are traditional promissory notes that conform to NASD
standards and are, by agreement with the lender, subordinated to the claims of
all other creditors. Due to the fact that these loans are subordinated and that
they contain certain prepayment and repayment restrictions, SEC and NASD rules
permit us to consider our subordinated loans as part of our net capital. We
intend to repay the subordinated loans as they reach their maturity. In
addition, as co-underwriters of this offering, we may, if necessary, accept
temporary subordinated loans that will increase our net capital during the days
prior to the consummation of the offering to provide a reserve against the
anticipated increase in securities we will be holding and corresponding decrease
in liquid assets.

Cash and cash equivalents at January 31, 1999 were $1,005,944 as compared
to $218,335 at January 31, 1998. Working capital at January 31, 1999 was
$980,822 as compared to $864,489 at January 31, 1998. Our ratio of current
assets to current liabilities was almost 2 to 1 at January 31, 1999, compared to
3.5 to 1 at January 31, 1998.

Pursuant to the SEC's net capital rule, we are currently required to
maintain net capital of $100,000 and a ratio of aggregate indebtedness to net
capital (the "net capital ratio") not to exceed 15 to 1. As of January 31, 1999,
our net capital ratio was 1.11 to 1. SEC rules also prohibit "equity capital"
(which, pursuant to the net capital rule includes the subordinated loans) from
being withdrawn or cash dividends from being paid if our net capital ratio would
exceed 10 to 1 or if we would have less than our minimum required net capital.
Accordingly, our ability to repay the subordinated loans may be restricted
pursuant

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to the net capital rule. At January 31, 1999, we had net capital of $894,395,
which was $794,395 in excess of our minimum required net capital.

Net cash provided by operating activities was $837,167 in Fiscal 1999 and
$92,246 in Fiscal 1998. The increase in cash flow from operating activities was
primarily the result of $117,298 in net income and an increase in accounts
payable and accrued liabilities.

Net cash used in investing activities was $74,558 during Fiscal 1999 and
$83,345 during Fiscal 1998. Net cash used in investing activities was primarily
a result of purchasing additional computer systems, office equipment and
leasehold improvements. In addition, we signed a three-year operating lease in
March 1999 to secure the use of additional computers, equipment, and office
furniture.

Net cash provided by financing activities was $25,000 in Fiscal 1999 and $0
in Fiscal 1998. The increase in cash flows from financing activities was a
result of securing a $25,000 subordinated loan.

Based on currently proposed plans and assumptions relating to the
implementation of our business plan, we believe that the proceeds of this
offering, combined with cash flow from operations, will enable us to fund our
planned operations for a period of at least 12 months from the date of this
prospectus. However, we cannot assure you that we will realize cash flow from
operations or that the cash flow will be sufficient. If not, or if our plans
change, our assumptions change or prove to be inaccurate, or if the proceeds of
this offering otherwise prove to be insufficient to implement our business
plans, we may require additional financing and may seek to raise funds through
subsequent equity or debt financings or other sources. We cannot assure you that
additional funds will be available in adequate amounts or on acceptable terms.
If funds are needed but are not available, our business would be harmed.

We anticipate that we will incur capital expenditures of approximately
$2,700,000 through the fiscal year ended January 31, 2000. These acquisitions
will be primarily computer equipment and software to increase the number of
users capable of accessing our systems and continue to enhance our worldwide
website.

ACCOUNTING STANDARDS

We intend to grant stock options to certain employees and consultants with
an exercise price not less than the fair market value at the date of grant.
Certain of these options will be granted as of the date of this prospectus. We
will account for stock option grants to employees in accordance with Financial
Accounting Standards Board Statement No. 123, "Accounting for Stock-Based
Compensation."

YEAR 2000 READINESS

With the new millennium approaching, many institutions around the world are
reviewing and modifying their computer systems to ensure that they are Year 2000
compliant. The issue, in general terms, is that many existing computer systems
and microprocessors with data functions (including those in non-information
technology equipment and systems) use only two digits to identify a year in the
date field with the assumption that the first two digits of the year are always
"19." Consequently, on January 1, 2000, computers that are not Year 2000
compliant may read the year as 1900. Systems that calculate, compare or sort
using the incorrect date may malfunction.

We have conducted an assessment of the Year 2000 issue and the potential
effect it will have on us and our business. We have determined that we will not
be required to

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materially modify or replace our information and non-information technology
systems to properly recognize and utilize dates beyond December 31, 1999. We
presently believe that with modifications previously made to existing software,
conversions to new software and replacement of some hardware, the Year 2000
issue will be satisfactorily resolved in our own systems. However, even if these
changes are successful, failure of third parties, to which we are financially or
operationally linked, to address their own system problems could have a material
adverse effect on us. Furthermore, the investing and trading patterns of clients
may be affected by Year 2000 issues as clients become concerned about the Year
2000 issue and the effect it will have on the U.S. and international stock
markets and the securities industry generally. Changes in these patterns may
harm our business.

We continue to monitor and review the Year 2000 issue and, as appropriate,
modify or replace the software (and replace some hardware) in our computer
systems in our main and branch offices. We continue to monitor our own internal
systems to prepare for Year 2000 compliance. Our testing is expected to involve
major market participants, including competing firms and financial
intermediaries, such as stock exchanges and clearing agencies that are prominent
in the U.S. We have also initiated communications with counter-parties,
intermediaries and vendors with whom we have important financial and operational
relationships to determine the extent to which they are vulnerable to the Year
2000 issue. We have not yet received sufficient information from these parties
about their remediation plans to predict the outcome of their efforts.

To date, Year 2000 readiness has cost us an estimated $85,000 (including
upgrades to existing systems) and will cost approximately $100,000 more to
complete. Our Year 2000 program costs will be funded from the proceeds of this
offering. These costs are expensed as incurred. We cannot assure you that these
estimates will be correct; actual results could differ materially from our
plans.

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BUSINESS

OVERVIEW

onlinetradinginc.com provides financial brokerage services to experienced
investors and small to mid-sized financial institutions through a variety of
communication mediums, including the Internet. Unlike our name suggests, we are
not merely a real time online financial brokerage firm which allows clients to
trade directly over the Internet. We are a full-service financial services firm
with direct access to the various securities markets via our computerized
intranet infrastructure. This direct access enhances our ability to obtain the
simplest, most direct execution of orders for our clients at the best possible
price. In addition, as a result of the technology we use, our brokers and our
clients have access to the most up-to-date electronic information on stocks,
market indices, analysts' research and news. We provide our clients, through
experienced brokers, the ability to execute orders before and after traditional
market hours. Moreover, we are in the process of upgrading our software and
technology to enable our clients to execute trades more efficiently over the
Internet.

- our commitment to providing the best stock execution prices directly to
our clients;

- our refusal to accept payment for directing orders to market makers or
other broker-dealers (i.e., accepting payment for order flow); and

- our combination of information and research tools.

We were incorporated in Florida in September 1995 as Online Trading, Inc.
In February 1999, we changed our name from Online Trading Inc. to
onlinetradinginc.com corp. and began doing business under the name
onlinetradinginc.com.

THE MARKET

The financial services industry has changed considerably over the last 25
years. Before 1975, all stock exchanges required brokers to charge fixed minimum
commissions for trades of listed stock. Under pressure from Congress, the
Department of Justice and the SEC, in 1975, these policies were changed, which
allowed for negotiated commissions and the unbundling of investment services.
The unbundling of brokerage services from other financial services has permitted
investors to pick and choose among various financial providers for specific
services. All of these developments brought about the advent and proliferation
of the discount brokerage firm, which could separate financial advisory services
from execution services, and could execute trades at a lower cost than a full-
service broker.

As a result, discount brokerage firms willing to accept stock trades for
lower commissions have begun to proliferate. Like full service brokerage firms,
discount brokerage firms are covered by the government-sponsored Securities
Investor Protection Corporation ("SIPC") that insures accounts up to $100,000 in
cash and up to $400,000 in other assets. Unlike full service brokerage firms,
however, many discount brokerage firms do not typically provide the full breadth
of products and services offered by full-service

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firms, such as regular access to a broker willing to make recommendations or
discuss possible investments, elaborate research reports or access to initial
public offerings.

As a result of increased competition among brokerage firms, deep discount
brokerage firms who advertise very low commission rates also entered the market.
These firms generally provide very little, if any, services and merely effect
trades for an extremely low price. However, many of these firms either (1) sell
the order received from their clients to another brokerage firm that makes a
market in the stock being traded, or (2) charge the client a mark-up or
mark-down. We believe the selling of order flow creates inefficiency in the
trade execution which may increase the client's overall cost of the transaction.

At the same time, the use of the Internet as a tool for obtaining
information, communicating and effecting commerce is also changing the financial
services industry. The Internet provides investors with a wealth of information
about investing, including stock picks, technical charts, analysis and financial
corporate news. As a result, investors are more self-reliant and value
conscious, are managing their own money and are increasingly reluctant to pay
high fees to full-service retail brokers. This has led to significant growth in
online investing and the entry into the market of electronic or online trading
which has experienced phenomenal growth since the Internet "e-brokerages" were
introduced in 1994.

As a result of the growth of the Internet as a tool to obtain information,
online trading is now the fastest growing segment of the brokerage industry and
is expected to continue to grow significantly. In a report dated March 11, 1999,
Forrester Research, Inc., an independent research firm, estimates that during
1998, the number of North American households investing online nearly doubled,
reaching just under 2.4 million by the start of 1999 and that the number of
households investing online will increase to 4.3 million by the end of 2000. In
addition, industry experts project that retail commissions generated by the
online trading market will grow from approximately $268 million, or 15% of the
commissions generated by discount brokerages in 1996, to as much as $2.2
billion, or 60% of total discount brokerage commissions, by 2001. Customers at
the biggest online brokerage firms average 20 to 25 trades per year, four to
five times the number of trades per account executed at traditional full-service
brokerage firms. We believe that we are positioned to service financially
sophisticated and technologically capable brokerage customers. The marketplace
is demanding lower commissions, better trade executions, access to more
information and the convenience of 24 hour account monitoring.

OUR BUSINESS

GENERAL FINANCIAL BROKERAGE SERVICES

We provide financial brokerage services to experienced investors, including
both individuals and small to mid-sized institutions (such as hedge funds, money
managers, mutual funds and pension funds). To support the investment services
provided to these investors, we effect transactions in equity securities
strictly on an agency basis for our clients. This means that we always charge
only an agreed upon commission and never earn income from marking up or marking
down our clients' stock orders. Our retail sales division consists of 30
registered representatives of which six are registered principals. Our retail
customer accounts are carried on a "fully disclosed" basis by the Clearing Firm,
pursuant to a clearing agreement. This agreement provides that our clients'
securities positions and credit balances carry unlimited insurance through
Travelers Casualty Company that is supplemental to standard SIPC protection. All
customer credit balances

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are subject to immediate withdrawal from the Clearing Firm, at the discretion of
the client.

We pride ourselves on effecting equity transactions only on an agency basis
as opposed to on a principal basis, meaning, we act as the agent for our clients
directly in the market. The opposite of an agency trade in the brokerage
industry is considered a principal trade. When performing a transaction on a
principal basis, brokerage firms are permitted to accept a client's order to
purchase, immediately purchase the securities in the market for the firm, and
then sell the securities to the client for a mark-up. Notwithstanding that, we
will not specifically preclude effecting transactions on a principal basis where
a client demands that we do so.

We also provide our clients with direct access to our trading desks which
are online directly with the various stock exchanges and institutional buyers
and sellers via various electronic crossing networks. Our brokers are committed
to using their trading desks to obtain for our clients the fastest execution of
their order at the best possible price at the time the order is given. In
addition, as a result of the technology we use, we can access the most
up-to-date electronic news information and research reports.

Given the trend towards communicating, obtaining information and effecting
transactions through electronic means, we are committed to serving the changing
needs of our clients. As a result, we have a team of well-trained registered
brokers available to assist our clients by telephone, our intranet or the
Internet. Brokers are available 12 hours a day from 7:00 AM to 7:00 PM EST
Monday through Friday.

INTERNET-BASED BROKERAGE SERVICES

Through our Internet site, our clients currently have on-line access to
their account information. This electronic access enables our clients to review
the securities positions in their portfolio, confirm their buying power and
margin balances (if applicable), obtain stock quotes, enter orders for
execution, and review their recent trading activity. In addition to providing
information for their particular account, we also provide our clients, via the
Internet, pertinent market information regarding timely analysts' reports,
relevant earnings reports sorted by those companies that exceeded earnings
expectations and those that fell below expected earnings. We also provide our
clients with information about the overnight markets and the futures markets,
stocks that are trading before the market opens, and major company news through
the Internet.

We intend to use the Internet in various ways to help expand our business.
First, we intend to use the Internet to help our existing brokers serve our
clients better. The Internet will help our brokers disseminate information to
clients simultaneously, thereby allowing our brokers to efficiently serve more
clients. Second, we intend to use the Internet to serve an ever growing number
of investors who want to make 100% of their trading and investment decisions on
their own. Prior to providing this service, based upon express representations
and qualifications of prospective clients, we pre-qualify these prospective
clients to help ensure they are capable of making their own trading and
investing decisions.

We have a strong commitment to technology and are in the process of
upgrading the software and technology that enables our brokers and clients to
more efficiently use the Internet. A portion of the net proceeds of this
offering will be used to complete this upgrade. We anticipate introducing this
improved service to our clients by August, 1999.

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PROPRIETARY TRADING

We operate a small proprietary trading department separate and distinct
from all customer commission business. This department operates as a profit
center under strict internal controls. We charge the proprietary trading desk
commission rates above our costs, and we pay the department a percentage of the
trading profits generated. As a result, we at times maintain inventories in
equity securities on both a long and short basis. We never fill clients' orders
from the firm's inventories. While long inventory positions represent our
ownership of securities, short inventory positions represent obligations to
deliver specified securities at the current market price, which may differ from
market prices prevailing at the time of completion of the transaction.
Accordingly, both long and short inventory positions may result in losses or
gains as market values of securities fluctuate. To reduce the risk of losses,
long and short positions are revalued to the current market price each day and
are continuously monitored by us.

OUR BUSINESS STRATEGY

We believe that we have been successful in creating a new level of service
in the financial services industry by using technology to provide experienced
clients direct access, through brokers, intranets and the Internet, to a trading
desk which goes directly to the source and avoids the middleman to obtain the
best possible execution price. We call this a "Wall Street style trading desk".
Our strategy is designed to ensure that our clients obtain the best possible
execution price and access to relevant market information. We believe that
opportunities exist in the financial services industry for a company that is
able to provide experienced investors with the overall cost-savings created by
(1) direct access to professional trade executions, (2) access to up-to-date
market information, and (3) the convenience of trading over the Internet.
onlinetradinginc.com was founded on the principle philosophy of providing our
brokers and clients the best execution prices along with the most relevant
market information and investment research. We consistently analyze new
technologies and communication mediums, including the Internet, that will enable
our brokers to better serve our clients. We are determined to offer our clients,
regardless of the communication medium used, the simplest, most direct form of
stock execution.

Our goal is to become a leader in the financial services industry and build
market share by capitalizing on the changes occurring in the financial services
industry and providing our clients with specialized services for competitive,
fully disclosed commission rates. We intend to achieve our goal by:

- providing value to our clients at the lowest overall cost, including
direct access to our trading desk which enables them to realize the best
possible execution price;

- providing our clients with value-added services, including access to
well-trained brokers and up-to-date market information;

- creating technologically innovative solutions to satisfy client needs,
including efficient trading directly over the Internet; and

- providing our brokers with the tools to serve the needs of our
experienced clients.

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Targeting Experienced Investors. Our clients are typically experienced
investors and small to mid-sized financial institutions, including professional
money managers, hedge fund managers and registered investment advisors. These
active market participants on average execute more trades per year than
traditional retail investors. Experienced investors also demand lower
commissions, real-time access to information and quick order execution in order
to effectuate their trading and investing strategies. We believe that the market
for these clients is currently under-serviced and, as a result, intend to
continue to target this market. We have established specific guidelines and
suitability minimums for un-assisted Internet trading accounts. The requirements
include, $100,000 minimum initial deposit, at least two years of trading or
investing experience, and net worth of at least $300,000. Through a standard
interview and based upon specific representations and qualifications of each
prospective client, we pre-qualify our accounts in an attempt to screen out less
experienced investors. In addition, we typically do not establish active trading
accounts for retirement or pension accounts.

Providing Value to our Clients at the Best Possible Price. Direct access
to our trading desk enables our clients to realize the best possible execution
price. While many discount brokerage firms may charge a significantly lower flat
fee for trades, many of these firms actually realize a gain on these
transactions by either (1) selling the order to another firm that will earn a
spread between the bid and ask price, or (2) charging the client a mark up or
mark down. As a result, the firm is compensated by the difference between what
the firm pays for the stock and what the client ultimately pays for the stock or
receives from the sale of the stock. Thus, any savings the client may have
realized by paying less in commissions are lost when the client eventually pays
more for the stock or sells the stock for less. We do not benefit from either of
these types of activities. We primarily utilize electronic execution systems
that enable money managers, professional traders, large institutions and
investors the ability to trade efficiently. We pass on the savings realized from
the electronic execution systems, which historically have been kept by
professionals and large institutions, directly to our clients.

Providing our Clients with Value-Added Services. In addition to providing
our clients with lower overall costs for effecting trades, we also provide our
clients with some of the products and services provided by full-service firms,
including access to a pool of well-trained brokers and the most current
electronic news information and research reports. Most discount and online
brokerage firms do not have a staff of well-trained brokers readily available to
assist clients if they need investment advice. Our brokers are also available by
telephone in the event of electronic systems failures. We believe our team of
well-trained brokers offers our clients more than just execution services. At
onlinetradinginc.com, we provide our clients and brokers with electronic
research and electronic news from an ever growing database of news vendors to
enable them to make better informed business decisions. As the Internet expands,
research and market news become available 24 hours per day. We have the ability
to trade before and after traditional market hours (7:00 a.m. to 7:00 p.m.) and
provide this service to our clients.

Creating Technologically Innovative Solutions to Satisfy Clients' Needs.
We are actively pursuing additional technologies to service the rapidly evolving
financial services industry. Specifically, we are developing technology to
enable our clients to trade equity securities more efficiently via the Internet.
We are also exploring other solutions to improve our products and services to
satisfy our clients' needs. We believe that a demand exists for a brokerage firm
that can provide experienced traditional retail brokers with the technology to
directly execute their own clients' orders. We also believe that significant
demand exists from experienced brokers who want more market information to
better serve

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clients. We have found that even though clients have access to more information
via the Internet, the majority of clients still desire the assistance of an
experienced broker to help guide their investment decisions. We intend to
enlarge our existing branch offices and expand our branch office locations to
every major metropolitan city across the U.S. and provide brokers at their own
locations with their own "Wall Street style trading desk".

In addition to the above, we are continually exploring strategic alliances,
acquisitions and other opportunities to provide our clients with the best
possible service and products. We do not currently have any understandings,
commitments, arrangements or agreements with respect to any of those types of
arrangements.

STRATEGIC RELATIONSHIPS

We currently utilize the services of Bear Stearns Securities Corp. (the
"Clearing Firm") for all custody and clearing issues associated with brokerage
transactions. The Clearing Firm is the seventh largest securities firm in the
U.S. We realize the following benefits from our relationship with the Clearing
Firm:

- quality safekeeping and protection on entire net equity (cash and
securities) on all accounts;

- ability to participate in initial public offerings and other investment
banking transactions;

- ability to participate in a large database of no-load mutual funds; and

- professional and prompt handling of institutional and managed accounts.

Our relationship with Instinet Corporation affords us access to information
and enables us to trade directly and anonymously with other brokerage firms,
money managers, professional traders and large financial institutions on behalf
of our clients. As a result of this relationship, we are also able to trade
equities before the market opens at 9:30 a.m. and after the market closes at
4:00 p.m. We pass on these advantages and efficiencies directly to our clients,
thereby affording them many more trading and investment opportunities than they
would have otherwise. Management believes that some of our clients' best
opportunities have come from the ability to take advantage of market moving news
outside of traditional market hours.

We are actively pursuing additional alliances with various companies to
increase trading volume and operational efficiencies and to further enhance name
recognition. In addition, we regularly examine new ways to provide additional
products and services to our clients.

SALES AND MARKETING

As evidence that a demand exists for our services, to date we have
experienced significant revenue growth and positive cash flows, all without a
formal marketing program. However, upon completion of the offering, we will seek
to increase onlinetradinginc.com's brand recognition to attract new brokers and
clients. We are developing a comprehensive marketing plan to attract more
clients, experienced brokers, as well as build market awareness, educate the
investing public and develop brand name recognition and loyalty. We believe that
our unique approach to doing business will create a loyal client base. We intend
to expand our market share through, among other things, direct-response
advertising, advertising on our own and other Web sites, a public relations
program, live seminars and television airtime. From time to time, we may choose
to increase spending

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on advertising to target specific groups of investors or to decrease advertising
expenditures in response to market conditions.

Initially, we intend to focus our marketing efforts on direct-mail or
direct-response advertising of our brokerage services as a less expensive and
more efficient way of building awareness about us, our products and our
services. Print advertisements will be placed in a broad range of business,
technology and financial publications, including, but not limited to THE WALL
STREET JOURNAL, BARRON'S, INVESTOR'S BUSINESS DAILY, AND FORBES. Online
advertising may be conducted through America Online, CompuServe and popular Web
sites such as: Yahoo!, theStreet.com, Wall Street Journal Interactive and
Barron's Online. We also may advertise on CNBC, CNNFN and other major business
cable television networks.

COMPETITION

The market for discount brokerage services, and particularly electronic
brokerage services, is new, rapidly evolving and intensely competitive and has
few barriers to entry. We expect competition to continue and intensify in the
future. We encounter direct competition from numerous other brokerage firms,
many of which provide electronic brokerage services which we currently do not
provide. These competitors include discount brokerage firms like Charles Schwab
& Co., Inc., Quick & Reilly, Inc. and E*Trade Group, Inc. We also encounter
competition from established full-commission brokerage firms as well as
financial institutions, mutual fund sponsors and other organizations, some of
which provide electronic brokerage services.

We believe that the principal competitive factors affecting the market for
our brokerage services are speed and accuracy of order execution, price and
reliability of trading systems, quality of client service, amount and timeliness
of information provided, ease of use, and innovation. Based on management's
experience and the success we have enjoyed to date, we believe that we presently
compete effectively with respect to each of these factors.

A number of our competitors have significantly greater financial,
technical, marketing and other resources. Some of our competitors also offer a
wider range of services and financial products and have greater name recognition
and more extensive client bases. These competitors may be able to respond more
quickly to new or changing opportunities, technologies, and client requirements,
and may be able to undertake more extensive promotional activities, offer more
attractive terms to clients, and adopt more aggressive pricing policies.
Moreover, current and potential competitors have established or may establish
cooperative relationships among themselves or with third parties or may
consolidate to enhance their services and products. We expect that new
competitors or alliances among competitors will emerge and may acquire
significant market share.

There can be no assurance that we will be able to compete effectively with
current or future competitors or that the competitive pressures we face will not
harm our business.

GOVERNMENT REGULATION

BROKER-DEALER REGULATION

The securities industry is subject to extensive regulation under federal
and state law. The SEC is the federal agency responsible for administering the
federal securities laws. In general, broker-dealers are required to register
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). We are a broker-dealer

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registered with the SEC. Under the Exchange Act, every registered broker-dealer
that does business with the public is required to be a member of and is subject
to the rules of the NASD. The NASD has established Conduct Rules for all
securities transactions among broker-dealers and private investors, trading
rules for the over-the-counter markets, and operational rules for its member
firms. The NASD conducts examinations of member firms, investigates possible
violations of the federal securities laws and its own rules, and conducts
disciplinary proceedings involving member firms and associated individuals. The
NASD administers qualification testing for all securities principals and
registered representatives for its own account and on behalf of the state
securities authorities.

We are also subject to regulation under state law. We are currently
registered as a broker-dealer in 47 states and the District of Columbia. We have
applications pending with the remaining 2 continental states and expect to be
registered in every state (except Hawaii and Puerto Rico) by June 1999. An
amendment to the federal securities laws prohibits the states from imposing
substantive requirements on broker-dealers which exceed those imposed under
federal law. The recent amendment, however, does not preclude the states from
imposing registration requirements on broker-dealers that operate within their
jurisdiction or from sanctioning these broker-dealers for engaging in
misconduct.

NET CAPITAL REQUIREMENTS; LIQUIDITY

As a registered broker-dealer and member of the NASD, we are subject to the
Net Capital Rule. The Net Capital Rule, which specifies minimum net capital
requirements for registered brokers-dealers, is designed to measure the general
financial integrity and liquidity of a broker-dealer and requires that at least
a minimum part of its assets be kept in relatively liquid form. In general, net
capital is defined as net worth (assets minus liabilities), plus qualifying
subordinated borrowings and certain discretionary liabilities, and less certain
mandatory deductions that result from excluding assets that are not readily
convertible into cash and from valuing conservatively certain other assets.
Among these deductions are adjustments (called "haircuts"), which reflect the
possibility of a decline in the market value of an asset prior to disposition.

Failure to maintain the required net capital may subject a firm to
suspension or revocation of registration by the SEC and suspension or expulsion
by the NASD and other regulatory bodies and ultimately could require the firm's
liquidation. The Net Capital Rule prohibits payments of dividends, redemption of
stock, the prepayment of subordinated indebtedness and the making of any
unsecured advance or loan to a shareholder, employee or affiliate, if the
payment would reduce the firm's net capital below a certain level.

The Net Capital Rule also provides that the SEC may restrict for up to 20
business days any withdrawal of equity capital, or unsecured loans or advances
to shareholders, employees or affiliates ("capital withdrawal") if the capital
withdrawal, together with all other net capital withdrawals during a 30-day
period, exceeds 30% of excess net capital and the SEC concludes that the capital
withdrawal may be detrimental to the financial integrity of the broker-dealer.
In addition, the Net Capital Rule provides that the total outstanding principal
amount of a broker-dealer's indebtedness under certain subordination agreements,
the proceeds of which are included in its net capital, may not exceed 70% of the
sum of the outstanding principal amount of all subordinated indebtedness
included in net capital, par or stated value of capital stock, paid in capital
in excess of par, retained earnings and other capital accounts for a period in
excess of 90 days.

30
<PAGE> 34

A change in the Net Capital Rule, the imposition of new rules or any
unusually large charge against net capital could limit those of our operations
that require the intensive use of capital, such as the financing of client
account balances, and also could restrict our ability to pay dividends, repay
debt and repurchase shares of our outstanding stock. A significant operating
loss or any unusually large charge against net capital could adversely affect
our ability to expand or even maintain our present levels of business, which
could harm our business.

We are a member of SIPC which provides, in the event of the liquidation of
a broker-dealer, protection for clients' accounts up to $500,000, subject to a
limitation of $100,000 for claims for cash balances. Our clients are carried on
the books and records of the Clearing Firm. The Clearing Firm has obtained
unlimited insurance through Travelers Casualty Company for the benefit of our
clients' accounts that is supplemental to SIPC protection.

ADDITIONAL REGULATION

Due to the increasing popularity and use of the Internet and other online
services, various regulatory authorities are considering laws and/or regulations
with respect to the Internet or other online services covering issues such as
user privacy, pricing, content copyrights, and quality of services. In addition,
the growth and development of the market for online commerce may prompt more
stringent consumer protection laws that may impose additional burdens on those
companies conducting business online. Moreover, the recent increase in the
number of complaints by online traders could lead to more stringent regulations
of online trading firms and their practices by the SEC, NASD and other
regulatory agencies. Furthermore, the applicability to the Internet and other
online services of existing laws in various jurisdictions governing issues such
as property ownership, sales and other taxes and personal privacy is uncertain
and may take years to resolve. Finally, as our services are available over the
Internet in multiple states and foreign countries, and as we have numerous
clients residing in these states and foreign countries, these jurisdictions may
claim that our company is required to qualify to do business as a foreign
corporation in each such state and foreign country. While our company is
currently registered as a broker-dealer in 47 states, we are qualified to do
business as a foreign corporation in only a few states; failure by our company
to qualify as a broker-dealer in other jurisdictions or as an out-of-state or
"foreign" corporation in a jurisdiction where it is required to do so could
subject our company to taxes and penalties for the failure to qualify. Our
business could be harmed by any new legislation or regulation, the application
of laws and regulations from jurisdictions whose laws do not currently apply to
our business or the applications of existing laws and regulations to the
Internet and other online services.

EMPLOYEES

We currently have 34 full-time employees, of which 31 are registered
representatives and one of the remaining three has begun the registration
process. The employees are operating from the following branch locations:

Boca Raton, FL
Boston, MA
Osterville, MA (Cape Cod)
Pittsburgh, PA
Troy, MI
Hudson, OH

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<PAGE> 35

We have five people in management, 24 in sales, and four people in
administration. No employee is covered by a collective bargaining agreement or
is represented by a labor union. We consider our employee relations to be
excellent. We also have entered into independent contractor arrangements with
other individuals on an as-needed basis to assist with programming and
developing proprietary technologies.

FACILITIES

Our principal executive offices are located in an approximately 6,700
square foot facility in Boca Raton, Florida. This facility is occupied pursuant
to a lease expiring February 28, 2007 at a current annual rent of approximately
$118,000. We also lease approximately 1,200 square feet of office space for our
branch office in Osterville, Massachusetts. This space is occupied pursuant to a
lease expiring on November 30, 2003, at an annual rent of $24,000, with an
option to renew for an additional five-year term period. Additionally, we lease
approximately 1,300 square feet of office space for our branch office in
Pittsburgh, Pennsylvania. This office is occupied pursuant to a lease expiring
in February 2000 at an annual rent of $21,384. Finally, we lease approximately
500 square feet of office space for our branch office in Troy, Michigan pursuant
to a lease expiring in April, 1999 with an option to renew month-to-month for a
period of up to six additional months, at an annual rent of $7,200.

We have branch offices in Boston, Massachusetts, and Hudson, Ohio; however,
we are not a party to any lease agreements. The brokers established in those
offices have entered into the lease agreements and are responsible for the lease
obligations.

Management believes the existence of these branch offices and the manner in
which they are set up will be helpful if the company were to experience systems
failure. If one of our offices were not operational, under certain
circumstances, some of our other offices would continue to service clients
through their facilities. By way of example and not limitation, our phone system
has the ability to re-route calls to different locations in the event the phone
system for one location were to fail.

LEGAL PROCEEDINGS

We are not a party to any material proceedings.

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<PAGE> 36

MANAGEMENT

The following table sets forth the names, ages and positions held with
respect to each Director and Executive Officer:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Andrew A. Allen.............. 39 Chairman of the Board, Chief Executive
Officer and Director
E. Steven zum Tobel.......... 32 President, Chief Financial Officer, and
Director
Farshid Tafazzoli............ 26 Chief Information Officer and Director
Derek J. Hernquist........... 27 Vice President of Operations, Secretary and
Director
Benedict S. Gambino.......... 41 Director
</TABLE>

ANDREW A. ALLEN. Mr. Allen is our Chairman and co-founder. He co-founded
the company in September 1995. Mr. Allen served as President until January 1999
and is presently serving as Chief Executive Officer. Prior to that, Mr. Allen
was employed by Schonfeld Securities, LLC as a firm trader and trainer of other
proprietary traders from May 1995 through September 1995. Mr. Allen has over 19
years experience working in various capacities in the brokerage industry from
sales, marketing, trading, operations, and training at the following firms:
Prudential Securities, Oppenheimer & Company, and Schonfeld Securities, LLC. Mr.
Allen was also a member of the Chicago Board of Options Exchange ("CBOE") from
1985 to 1993. While at the CBOE, Mr. Allen also served on the Appeals Committee.

E. STEVEN ZUM TOBEL. Mr. zum Tobel joined us as Chief Compliance Officer
and Chief Financial Officer in March 1998. Mr. zum Tobel became President in
March 1999. Mr. zum Tobel has over 10 years experience surrounding the brokerage
industry with areas of expertise in financial reporting, compliance, and
operations. From September 1996 through February 1998, Mr. zum Tobel was
managing partner of zum Tobel & Ling, LLP, an audit and tax practice that
specialized in the brokerage industry. Prior to establishing his own accounting
and consulting practice, Mr. zum Tobel was Vice President of Securities
Consultants International LLC, a national brokerage consulting firm, from
December 1994 through September 1996. Prior to that, from May 1994 through
December 1994, Mr. zum Tobel was a systems consultant with Vilarino Plaza, Inc.
He has a B.A. degree in finance and an MBA with a concentration in finance from
Florida Atlantic University. Mr. zum Tobel is also a certified public
accountant.

FARSHID TAFAZZOLI. Mr. Tafazzoli is our Chief Information Officer and
co-founder. He co-founded the Company in September 1995. In 1993, Mr. Tafazzoli
joined Gulfstream Partners as a systems specialist. Mr. Tafazzoli applied his
systems experience in a trading environment, and accepted an opportunity to join
Spear Leeds & Kellog, the largest specialist firm on the New York Stock
Exchange, beginning in March 1994. Mr. Tafazzoli soon became a registered trader
capitalizing on his systems experience. Mr. Tafazzoli combined his technical
computer systems experience with his trading and investing experience and
co-founded onlinetradinginc.com in September 1995. Mr. Tafazzoli received a B.S.
in Administrative Studies from Nova Southeastern University.

DEREK J. HERNQUIST. Mr. Hernquist joined the firm in January 1997 as the
manager of the trading desk. Mr. Hernquist is presently serving as Vice
President of Operations and Director. Mr. Hernquist began his career at Olde
Discount Brokerage in June 1992 where

33
<PAGE> 37

he remained until December 1995. In January, 1996, Mr. Hernquist established his
own trading and investing partnership and became one of our clients. In January
1997, Mr. Hernquist accepted a position to run our trading desk. Mr. Hernquist
has a BA in finance from the University of Arizona.

BENEDICT S. GAMBINO. Mr. Gambino co-founded the company in September 1995
as a passive shareholder and director. Mr. Gambino was a member on the CBOE from
1981 to 1996. Mr. Gambino has been retired since 1996 although he continues to
act as a private investor.

There is no family relationship between any of the officers, key employees
and directors.

Within 90 days of the consummation of this offering, we intend to secure
the services of at least two non-employee directors. We also intend to establish
audit and compensation committees.

Directors hold their offices until the next annual meeting of our
shareholders and until their successors have been duly elected and qualified or
their earlier resignation, removal from office or death. There are currently no
committees of the Board of Directors. Upon consummation of this offering, we
intend to establish audit and compensation committees, each consisting of a
majority of non-employee directors.

Officers serve at the pleasure of the Board of Directors and until the
first meeting of the Board of Directors following the next annual meeting of our
shareholders and until their successors have been chosen and qualified.

DIRECTOR COMPENSATION

We do not currently pay our directors any fees for attending Board
meetings. We anticipate that following this offering we will pay non-employee
directors $500 plus travel reimbursements per Board meeting attended.

LIMITATION ON LIABILITY OF DIRECTORS

As permitted by Florida law, our Articles of Incorporation contain an
article limiting the personal liability of directors. The Articles of
Incorporation provide that each of our directors shall not be personally liable
for monetary damages for a breach of fiduciary duty as director except for
liability (i) for any breach of the director's duty of loyalty, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under the Florida Business Corporation Act, which
prohibits the unlawful payment of dividends or the repurchase or redemption of
stock, or (iv) for any transaction from which the director derived an improper
personal benefit. This article is intended to afford directors additional
protection, and limit their potential liability, from suits alleging a breach of
duty of care by a director.

EXECUTIVE COMPENSATION

The following table summarizes all compensation paid by us during the
fiscal year ended January 31, 1999 for our Chief Executive Officer and each
other executive officer whose annual compensation exceeded $100,000 during the
fiscal year ended January 31,

34
<PAGE> 38

1999 (collectively the "Named Executive Officers"). Our directors do not receive
compensation for serving in this capacity.

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
---------------------------------------------------
OTHER
COMPENSATION FOR
COMPENSATION FOR THE THE FISCAL YEAR
FISCAL YEAR ENDED ENDED
JANUARY 31, 1999 JANUARY 31,
--------------------- 1999
FISCAL SALARY BONUS ----------------
NAME AND PRINCIPAL POSITION YEAR $ $(1) $
- --------------------------- ------ -------- --------- ----------------
<S> <C> <C> <C> <C>
Andrew Allen....................... 1999 74,000 525,000 0
Chairman and Chief
Executive Officer
Farshid Tafazzoli.................. 1999 72,000 293,100 0
Chief Information Officer
and Director
E. Steven zum Tobel................ 1999 60,000 55,000 9,075(3)
Chief Financial Officer,
President and Director(2)
Derek J. Hernquist................. 1999 60,000 82,000 0
Vice President of Operations,
Secretary and Director
Benedict S. Gambino................ 1999 72,000 300,000 28,000(5)
Director(4)
</TABLE>

- -------------------------
(1) We paid $1,460,000 in management bonuses for Fiscal 1999 and $602,000 for
Fiscal 1998. Pursuant to new employment agreements effective as of February
1, 1999 for the fiscal year ended January 31, 2000, the compensation of
executive shareholder management has been set and limitations have been
placed on the amount of bonuses executive shareholder management may
receive.

(2) Mr. zum Tobel began his employment with the company in March 1998.

(3) Represents the value of shares issued in connection with Mr. zum Tobel's
employment.

(4) Mr. Gambino received his compensation in consideration for his duties as a
non-executive employee, and not as an executive officer or director.

(5) Represents interest paid to the director with respect to an outstanding loan
to us.

EMPLOYMENT AGREEMENTS

We have entered into three-year employment agreements with each of Messrs.
Allen, Tafazzoli, zum Tobel and Hernquist which provide for an annual base
compensation of $200,000, $200,000, $120,000 and $50,000 respectively, and
bonuses as the Board of Directors may in its sole discretion from time to time
determine. Notwithstanding the foregoing, the employment agreements limit the
aggregate amount of bonuses that may be paid to employees to 5% of pre-tax
earnings. Moreover, Messrs. Allen, Tafazzoli, zum Tobel, Hernquist and Gambino
have agreed not to receive any bonuses until such time as the company earns
$3,300,000 in pre-tax earnings in any fiscal year.

35
<PAGE> 39

The employment agreements provide for employment on a full-time basis and
contain a provision that the employee will not compete or engage in a business
competitive with our current or anticipated business during the term of the
employment agreement and for a period of one year thereafter. A state court may
determine not to enforce this provision or to otherwise limit its
enforceability.

Mr. zum Tobel received 400,000 shares of common stock in connection with
his employment. However, the unvested portion of these shares is subject to
redemption by the company if Mr. zum Tobel resigns from his employment or is
terminated for cause prior to February 28, 2001. These shares vest in equal
amounts over a three-year period commencing February 28, 1999.

STOCK OPTION PLAN

Under our 1999 Stock Option Plan (the "1999 Plan"), 1,000,000 shares of
common stock are reserved for issuance upon exercise of the options. The 1999
Plan is designed to serve as an incentive for retaining qualified and competent
directors, employees, consultants and independent contractors. Options will be
granted to certain persons in proportion to their contributions to the overall
success of the company as determined by the Board of Directors and our
Compensation Committee in their sole discretion.

Our Board of Directors, or a committee thereof, administers and interprets
the 1999 Plan and is authorized to grant options thereunder to all eligible
employees, including our directors and executive officers (whether current or
former employees), as well as consultants and independent contractors. The 1999
Plan provides for the granting of both "incentive stock options" (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended) and nonstatutory
stock options. Incentive stock options may only be granted, however, to
employees. Options can be granted under the 1999 Plan on the terms and at the
prices determined by the Board, or a committee thereof, except that the per
share exercise price of incentive stock options granted under the 1999 Plan will
not be less than the fair market value of the common stock on the date of grant
and, in the case of an incentive stock option granted to a 10% shareholder, the
per share exercise price will not be less than 110% of the fair market value as
defined in the 1999 Plan.

Options under the 1999 Plan that would otherwise qualify as incentive stock
options will not be treated as incentive stock options to the extent that the
aggregate fair market value of the shares covered by the incentive stock options
which are exercisable for the first time by any individual during any calendar
year exceeds $100,000.

Options granted under the 1999 Plan will be exercisable after the period or
periods specified in the option agreement. Incentive stock options granted to
employees will vest in equal installments over a period of five years commencing
on the first anniversary of the date of grant. Options granted under the 1999
Plan are not exercisable after the expiration of ten years from the date of the
grant and are not transferable other than by will or by the laws of descent and
distribution. Adjustments in the number of shares subject to options granted
under the 1999 Plan can be made by the Board of Directors or the appropriate
committee in the event of a stock dividend or recapitalization resulting in a
stock split-up, combination or exchange of shares.

As of the date of this prospectus, we have granted options under the 1999
Plan to purchase 400,000 shares of common stock to certain of our employees,
none of which are executive officers. These options will be exercisable at a
price equal to the initial public offering price per share of the shares of
common stock offered hereby and will expire ten

36
<PAGE> 40

years from the date of grant. In addition, exercise of the options is contingent
on the optionee's continued employment by us.

PRINCIPAL SHAREHOLDERS

The following table sets forth information regarding beneficial ownership
of our common stock as of the date of this prospectus, by (1) each person who
owns beneficially more than 5% of our outstanding common stock, (2) each of the
Named Executive Officers, and (3) all directors and executive officers as a
group.

<TABLE>
<CAPTION>
PERCENT BENEFICIALLY
OWNED
--------------------
NUMBER OF SHARES PRIOR TO AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED OFFERING OFFERING
- --------------------------------------- ------------------ -------- --------
<S> <C> <C> <C>
COMMON STOCK:
Andrew A. Allen........................... 2,725,926(2) 30.7% 24.5%
Farshid Tafazzoli......................... 2,725,926 30.7 24.5
E. Steven zum Tobel....................... 444,444(3) 5.0 4.0
Derek J. Hernquist........................ 266,666 3.0 2.4
Benedict S. Gambino....................... 2,725,926 30.7 24.5
All directors and executive officers as a
group (5 persons)....................... 8,888,888 100.0% 79.9%
PREFERRED STOCK:
Benedict S. Gambino....................... 300 100.0% 100.0%
</TABLE>

- -------------------------
(1) The business address of all directors and executive officers is c/o the
company, 2700 North Military Trail, Suite 200, Boca Raton, Florida 33431.

(2) Includes shares held as custodian for minor children.

(3) Includes shares which may be redeemed by us if Mr. zum Tobel terminates his
employment with us on or before March 1, 2001.

CERTAIN TRANSACTIONS

LOANS BY SHAREHOLDERS

In December 1998, Benedict Gambino, one of our directors and shareholders,
renewed a subordinated loan to us in the amount of $400,000. The outstanding
principal balance accrues interest at the rate of 5% per annum and is due and
payable on February 11, 2002.

RIGHT TO REDEEM SHARES OF STEVEN ZUM TOBEL

In February 1998, we issued 400,000 shares of common stock to Steven zum
Tobel as additional consideration for Mr. zum Tobel agreeing to join us.
Pursuant to the terms of Mr. zum Tobel's employment agreement, we may redeem the
unvested portion of these shares in the event Mr. zum Tobel resigns from his
employment or is terminated with cause, as defined in the Employment Agreement,
on or before February 28, 2001. See "Management -- Employment Agreements."

37
<PAGE> 41

APPROVAL OF AFFILIATED TRANSACTIONS

We believe that each of the foregoing transactions were on terms no less
favorable than those which could have been obtained from unaffiliated third
parties. Following completion of this offering, all transactions between us and
our directors, executive officers and principal shareholders will be on terms no
less favorable than could be obtained from unaffiliated third parties and have
been and will be approved by a majority of our independent outside directors,
when elected.

SUBORDINATED LOANS BY MANAGEMENT

As co-underwriters of this offering, we may, if necessary, accept temporary
subordinated loans that will increase our net capital during the days prior to
the consummation of the offering to provide a reserve against the anticipated
increase in securities we will be holding and corresponding decrease in liquid
assets.

DESCRIPTION OF CAPITAL STOCK

After this offering, our authorized capital stock will consist of (1)
100,000,000 shares of common stock, par value $0.01 per share, 11,138,888 shares
of which will be outstanding and (2) 1,000,000 shares of preferred stock, par
value $0.01 per share, 300 of which will be outstanding.

COMMON STOCK

Subject to the rights of the holders of any preferred stock that may be
outstanding and that may have preferential dividend rights, each holder of
common stock on the applicable record date is entitled to receive the dividends
declared by the Board of Directors out of funds legally available therefor, and,
in the event of liquidation, to share pro rata in any distribution of our assets
after payment or providing for the payment of liabilities and the liquidation
preference of any outstanding preferred stock.

Each holder of common stock is entitled to one vote for each share held of
record on the applicable record date on all matters presented to a vote of
shareholders, including the election of directors. Holders of common stock have
no cumulative voting rights or preemptive rights to purchase or subscribe for
any stock or other securities, and there are no conversion rights or redemption
or sinking fund provisions with respect to this stock. All outstanding shares of
common stock are, and the shares of common stock offered hereby will be, when
issued, fully paid and nonassessable.

PREFERRED STOCK

Our Board of Directors has the authority to issue 1,000,000 shares of
preferred stock in one or more series and to fix, by resolution, conditional,
full, limited or no voting powers, and the designations, preferences and
relative, participating, optional or other special rights, if any, and the
qualifications, limitations or restrictions thereof, if any, including the
number of shares in the series (which the Board may increase or decrease as
permitted by Florida law), liquidation preferences, dividend rates, conversion
or exchange rights, redemption provisions of the shares constituting any series
and such other special rights and protective provisions with respect to any
class or series as the Board may deem advisable without any further vote or
action by the shareholders. Any shares of preferred stock so issued could have
priority over the common stock with respect to dividend or liquidation rights or
both and could have voting and other rights of shareholders.

38
<PAGE> 42

Of the 1,000,000 authorized shares of preferred stock, 300 shares have been
designated Series A Redeemable Preferred Stock (the "Series A Stock") and all of
these shares are issued and outstanding. These shares were issued to Benedict
Gambino, a director, effective December 1997. The holder of the shares of the
Series A Stock has voting rights and is entitled to one vote per share of Series
A Stock. The stated value of each share of Series A Stock is $1,000. The holder
of Series A Stock is not entitled to dividends. The shares of Series A Stock are
not convertible into common stock. The shares of Series A Stock are redeemable
by the company, in whole or in part, at any time and from time to time, from and
after June 1, 1999, at a price of $1,100 per share.

We have no present plans to issue any additional shares of preferred stock.

ANTI-TAKEOVER EFFECTS OF OUR ARTICLES OF INCORPORATION AND BYLAWS

GENERAL

Certain provisions of our Articles of Incorporation and Bylaws may be
deemed to have an anti-takeover effect and may delay, defer or prevent a tender
offer or takeover attempt, including attempts that might result in a premium
being paid over the market price for the shares held by shareholders. The
following provisions may not be amended in our Articles of Incorporation or
Bylaws without the affirmative vote of the holders of two-thirds of the
outstanding shares of common stock.

SPECIAL MEETING OF SHAREHOLDERS

Our Articles of Incorporation and Bylaws provide that special meetings of
our shareholders be called only by a majority of the Board of Directors, our
Chief Executive Officer or holders of not less than one-third of our outstanding
voting stock.

ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

Our Articles of Incorporation and Bylaws provide that shareholders seeking
to bring business before an annual meeting of shareholders, or to nominate
candidates for election as directors at an annual or special meeting of
shareholders, must provide timely notice thereof in writing. To be timely, a
shareholder's notice must be delivered to or mailed and received at our
principal executive offices not less than 60 days nor more than 90 days prior to
the meeting; provided, however, that in the event that less than 70 days' notice
or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder, to be timely, must be received no later
than the close of business on the 10th day following the day on which the notice
of the date of the meeting was mailed or the public disclosure was made,
whichever is first. The Bylaws also specify certain requirements as to the
content and form of a shareholder's notice. These provisions may preclude
shareholders from bringing matters before the shareholders at an annual or
special meeting or from making nominations for directors at an annual or special
meeting.

AMENDMENT OF BYLAWS

The Bylaws may only be altered, amended or repealed by the Board or the
affirmative vote of the holders of at least a majority of our outstanding shares
of common stock.

39
<PAGE> 43

TRANSFER AGENT

The transfer agent for our common stock is American Securities Transfer &
Trust, Inc., Denver, Colorado.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the offering, we will have 11,138,888 shares of common
stock outstanding. Of these shares, the 2,250,000 shares of common stock sold in
the offering will be freely tradeable without restriction under the Securities
Act. The remaining 8,888,888 shares of common stock will be "restricted
securities" as defined in Rule 144 and will become eligible for public sale
subject to the restrictions of Rule 144 commencing one year from their issuance.
All of the 8,888,888 restricted shares are currently eligible for sale under
Rule 144 (with the exception of 296,296 of the 444,444 shares owned by Mr.
Steven zum Tobel, our President and Chief Financial Officer, which are subject
to a right of redemption).

In general, under Rule 144, if a period of at least one year has elapsed
since the later of the date the "restricted shares" (as that phrase is defined
in Rule 144) were acquired from us and the date they were acquired from an
"affiliate" of ours, as that term is defined in Rule 144 (an "Affiliate"), then
the holder of the restricted shares (including an Affiliate) is entitled to sell
a number of shares within any three-month period that does not exceed the
greater of 1% of the then outstanding shares of the common stock or the average
weekly reported volume of trading of the common stock on The Nasdaq SmallCap
Market during the four calendar weeks preceding the sale. The holder may only
sell the shares through unsolicited brokers' transactions or directly to market
makers. Sales under Rule 144 are also subject to certain requirements pertaining
to the manner of the sales, notices of the sales and the availability of current
public information concerning us. An Affiliate may sell shares not constituting
restricted shares in accordance with the foregoing volume limitations and other
requirements but without regard to the one-year holding period.

Under Rule 144(k), if a period of at least two years has elapsed between
the later of the date restricted shares were acquired from us and the date they
were acquired from an Affiliate, as applicable, a holder of these restricted
shares who is not an Affiliate at the time of the sale and has not been an
Affiliate for at least three months prior to the sale would be entitled to sell
the shares immediately without regard to the volume limitations and other
conditions described above.

Our directors, executive officers and shareholders who own an aggregate of
8,888,888 shares of common stock (representing all of the issued and outstanding
shares prior to this offering) have entered into written agreements not to sell
or otherwise dispose of the shares of common stock beneficially owned by them
for 12 months after the date of this prospectus without the consent of the
Representative.

We can make no predictions as to the effect, if any, that sales of shares
or the availability of shares for sale will have on the market price prevailing
from time to time. Nevertheless, sales of significant amounts of the common
stock in the public market, or the perception that these sales may occur, could
adversely affect prevailing market prices.

40
<PAGE> 44

UNDERWRITING

Subject to certain terms and conditions contained in the Underwriting
Agreement among us, Werbel-Roth Securities, Inc., as the representative of the
underwriters (the "Representative"), the underwriters named below have severally
agreed to purchase from us, and we have agreed to sell to the several
underwriters, the number of shares of common stock set forth opposite their
names below:

<TABLE>
<CAPTION>
NUMBER OF
NAME OF UNDERWRITER SHARES
- ------------------- ---------
<S> <C>
Werbel-Roth Securities, Inc.................................
onlinetradinginc.com corp...................................
---------
Total..................................................... 2,250,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
underwriters to purchase the common stock are subject to approval of certain
legal matters by counsel and to various other conditions. If any of the shares
of common stock are purchased by the underwriters pursuant to the Underwriting
Agreement, all the shares of common stock (other than shares of common stock
covered by the over-allotment option described below) must be so purchased.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, or to contribute to certain
payments that the underwriters may be required to make in respect thereof.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers or controlling persons, we have been
advised that in the opinion of the SEC the indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.

The underwriters propose to offer the shares of common stock directly to
the public at $7.00 per share. The underwriters may allow certain dealers, who
are members of the NASD, concessions, not in excess of $ per share of common
stock of which not in excess of $ per share of common stock may be reallowed
to other dealers who are members of the NASD. The offering prices, reallowances
and concessions will not be changed until after this offering has been
completed.

We have granted a 45-day over-allotment option to the underwriters to
purchase up to 337,500 additional shares of common stock at the offering price
less the underwriting discount. If the underwriters exercise such over-allotment
option, then each of the underwriters will be committed, subject to certain
conditions, to purchase the additional shares in approximately the same
proportion as set forth in the above table. The underwriters may exercise this
option only to cover over-allotments made in connection with the sale of the
shares of common stock offered hereby.

We have has agreed to pay the Representative a nonaccountable expense
allowance of 3% of the gross proceeds of this offering, of which $40,000 has
been paid as of the date of this prospectus. We have also agreed to pay all
expenses in connection with qualifying the shares of common stock offered hereby
for sale under the laws of the states the Representative designates, including
expenses of counsel retained for that purpose by the Representative.

We have agreed to sell to the Representative and its designees for an
aggregate of $100, warrants (the "Underwriter's Warrants") to purchase up to
225,000 shares of

41
<PAGE> 45

common stock at an exercise price of $8.40 per share (120% of the public
offering price per share). The Underwriter's Warrants may not be sold,
transferred, assigned or hypothecated for one year from the date of this
prospectus, except to the officers and partners of the Representative and
members of the underwriting syndicate and selling group and are exercisable at
any time and from time to time, in whole or in part, during the five-year period
commencing on the date of this prospectus (the "Warrant Exercise Term"). During
the Warrant Exercise Term, the holders of the Underwriter's Warrants are given,
at nominal cost, the opportunity to profit from a rise in the market price of
the common stock. To the extent that the Underwriter's Warrants are exercised,
dilution to the interests of our shareholders will occur. Further, the terms
upon which we will be able to obtain additional equity capital may be adversely
affected since the holders of the Underwriter's Warrants can be expected to
exercise them at a time when we would, in all likelihood, be able to obtain any
needed capital on terms more favorable to us than those provided in the
Underwriter's Warrants. Any profit realized by the Underwriter on the sale of
the Underwriter's Warrants or the underlying shares of common stock may be
deemed additional underwriting compensation. We have agreed, at the request of
the holders of a majority of the Underwriter's Warrants, at our expense, to
register the Underwriter's Warrants and the shares of common stock underlying
the Underwriter's Warrants under the Securities Act on one occasion during the
Warrant Exercise Term and to include the Underwriter's Warrants and the shares
of common stock underlying the Underwriter's Warrants in any appropriate
registration statement which is filed by us during the seven years following the
date of this prospectus.

This offering is being conducted in accordance with Rule 2720 of the NASD.
That rule requires, among other things, that the initial public offering price
can be no higher than that recommended by a "qualified independent underwriter,"
as defined by the NASD, which underwriter has served in that capacity and
performed due diligence investigations and reviewed and participated in the
preparation of the Registration Statement of which this prospectus forms a part.
The Representative in this offering served as the qualified independent
underwriter and received no additional compensation for serving in this
capacity.

Our directors, executive officers and our shareholders who own an aggregate
of 8,888,888 shares of common stock have entered into written agreements not to
sell or otherwise dispose of any of their common stock for a period of 12 months
from the date of this prospectus, without the prior written consent of the
Representative.

Prior to this offering, there has been no public market for the common
stock. Consequently, the initial public offering price for the common stock has
been determined by negotiations between us and the underwriters and is not
necessarily related to our asset value, net worth or other established criteria
of value. The factors considered in these negotiations, in addition to
prevailing market conditions, included the history of and prospects for the
industry in which we compete, an assessment of our management, our prospects,
our capital structure and certain other factors as were deemed relevant.

In connection with this offering, certain underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the common stock.
These transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M, pursuant to which the underwriters or selling
group members may bid for or purchase common stock for the purpose of
stabilizing its market price.

42
<PAGE> 46

The underwriters also may create a short position for the account of the
underwriters by selling more common stock in connection with the offering than
they are committed to purchase from us and in that a case may purchase common
stock in the open market following completion of the offering to cover all or a
portion of that short position.

The underwriters may also cover all or a portion of that short position, up
to 333,750 shares of common stock, by exercising the over-allotment option. In
addition, the Representative may impose "penalty bids" under contractual
arrangements with the underwriters, whereby it may reclaim from an underwriter
(or dealer participating in the offering) for the account of other underwriters,
the selling concession with respect to common stock that is distributed in any
offering but subsequently purchased for the account of the underwriters in the
open market. Any of the transactions described in this paragraph may result in
the maintenance of the price of the common stock at a level above that which
might otherwise prevail in the open market. None of the transactions described
in this paragraph is required, and, if they are undertaken, they may be
discontinued at any time.

Under the securities laws of certain states, the shares may be sold in
those states only through registered or licensed broker-dealers or pursuant to
available exemptions from such requirements. In addition, in certain states the
securities may not be sold unless the securities have been registered or
qualified for sale in that state or an exemption from that requirement is
available and is complied with.

LEGAL MATTERS

Broad and Cassel, a partnership including professional associations, Miami,
Florida will give an opinion regarding the validity of the common stock offered
under this prospectus. Certain legal matters relating to the offering will be
passed upon for the Representative by Dreier & Baritz, LLP, Boca Raton, Florida.

EXPERTS

The statements of financial condition of onlinetradinginc.com corp. as of
January 31, 1999 and January 31, 1998 and the related statements of operations,
changes in shareholders' equity and cash flows for the years then ended included
in this prospectus and incorporated by reference in the Registration Statement,
have been audited by Ahearn, Jasco + Company, P.A., independent auditors, as
stated in their report appearing herein and incorporated by reference in the
Registration Statement, and are included and incorporated by reference in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a Registration Statement containing this
prospectus and encompassing any amendments thereto on Form SB-2 pursuant to the
Securities Act with respect to the common stock being offered in this offering.
This prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain portions
of which are omitted as permitted by SEC rules and regulations. Statements made
in this prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete; with respect to any contract,
agreement or other document filed as an exhibit to the Registration Statement,

43
<PAGE> 47

please refer to the exhibit for a more complete description of the matter
involved, and each statement shall be deemed qualified in its entirety by
reference to the Registration Statement and to the financial statements,
schedules and exhibits filed as a part thereof.

The Registration Statement filed by us with the SEC can be inspected and
copied at the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the Regional
Offices of the SEC located in the Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and at 7 World Trade Center, 13th Floor,
New York, New York 10048. Copies of those filings can be obtained from the SEC's
Public Reference Section, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates and may also be obtained from the website that
the SEC maintains at http://www.sec.gov. You may also call the SEC at
1-800-SEC-0330 for more information.

As of the date of this prospectus, we will become subject to the reporting
requirements of the Exchange Act and, in accordance therewith, will file
reports, proxy statements and other information with the Commission. These
reports, proxy statements and other information can be inspected and copied at
the public reference facilities of the Commission set forth above, and copies of
these materials can be obtained from the Commission's Public Reference Section
at prescribed rates. We intend to furnish our shareholders with annual reports
containing audited financial statements and any other periodic reports we deem
appropriate or as may be required by law.

44
<PAGE> 48

ITEM 28. UNDERTAKINGS.

(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this Registration Statement to:

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.

(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.

(4) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in such
names as required by the Underwriters to permit prompt delivery to each
purchaser.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense or any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

<PAGE> 49

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Boca Raton,
State of Florida, on March 25, 1999.

onlinetradinginc.com corp.

By: /s/ Andrew A. Allen
-----------------------------------
Andrew A. Allen,
Chairman and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints
Andrew A. Allen and E. Steven zum Tobel or any one of them, as his or her true
and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution for him or her and in his or her name, place and stead in any and
all capacities to execute in the name of each person who is then an officer or
director of the Registrant any and all amendments (including post-effective
amendments) to this Registration Statement, and any registration statement
relating to the offering hereunder pursuant to Rule 462 under the Securities Act
of 1933, as amended, and to file the same with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents and each of them full power and
authority to do and perform each and every act and thing required or necessary
to be done in and about the premises as fully as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>

SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Andrew A. Allen Chairman, Chief Executive Officer March 25, 1999
- ----------------------------------- and Director
Andrew A. Allen (Principal Executive Officer)

/s/ E. Steven zum Tobel President, March 25, 1999
- ----------------------------------- Chief Financial Officer and Director
E. Steven zum Tobel (Principal Accounting Officer)

/s/ Farshid Tafazzoli Chief Information Officer and Director March 25, 1999
- -----------------------------------
Farshid Tafazzoli

/s/ Derek J. Hernquist Vice President of Operations, Secretary March 25, 1999
- ----------------------------------- and Director
Derek J. Hernquist

/s/ Benedict S. Gambino Director March 25, 1999
- -----------------------------------
Benedict S. Gambino

</TABLE>
<PAGE> 50

ONLINETRADINGINC.COM CORP.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INDEPENDENT AUDITORS' REPORT................................
FINANCIAL STATEMENTS
Statements of Financial Condition......................... F-
Statements of Operations.................................. F-
Statement of Changes in Stockholders' Equity.............. F-
Statements of Cash Flows.................................. F-
NOTES TO FINANCIAL STATEMENTS...................... F- through F-
</TABLE>

F-1
<PAGE> 51

INDEPENDENT AUDITORS' REPORT

Board of Directors
onlinetradinginc.com corp.

We have audited the accompanying statements of financial condition of
onlinetradinginc.com corp. (the "Company") as of January 31, 1999 and 1998, and
the related statements of operations, changes in stockholders' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of onlinetradinginc.com corp.
as of January 31, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

/s/ AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants

Pompano Beach, Florida
March 2, 1999, except for Note 9, for
which the date is March 25, 1999

F-2
<PAGE> 52

ONLINETRADINGINC.COM CORP.

STATEMENTS OF FINANCIAL CONDITION
AS OF JANUARY 31, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................... $1,005,944 $ 218,335
Receivable from clearing organization................... 572,433 300,900
Other receivables....................................... 6,163 --
Securities owned, at market value....................... 381,084 683,335
Deferred tax asset...................................... -- 4,250
Other current assets.................................... 9,420 561
---------- ----------
Total Current Assets.................................. 1,975,044 1,207,381
Property and Equipment, net............................. 136,146 117,174
Other Assets............................................ 43,398 17,730
---------- ----------
$2,154,588 $1,342,285
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities................ $ 948,422 $ 211,110
Income taxes payable.................................... 45,800 --
Securities sold but not yet purchased, at market
value................................................. -- 131,782
---------- ----------
Total Current Liabilities............................. 994,222 342,892
---------- ----------
Deferred Income Taxes................................... 15,400 5,800
---------- ----------
Subordinated Loans...................................... 525,000 500,000
---------- ----------
Stockholder's Equity:
Preferred stock, $0.01 par value; 1,000,000 shares
authorized; issued and outstanding, 300 shares of Series
A, stated value $1,000, voting, redeemable at 110% of
stated value............................................ 300,000 300,000
Common stock, $0.01 par value; 30,000,000 shares
authorized; issued and outstanding, 8,000,000 in 1999
and 7,600,000 and 1998.................................. 80,000 76,000
Additional paid-in capital.............................. 95,026 89,951
Retained earnings....................................... 144,940 27,642
---------- ----------
Total Stockholder's Equity............................ 619,966 493,593
---------- ----------
$2,154,588 $1,342,285
========== ==========
</TABLE>

See notes to financial statements.

F-3
<PAGE> 53

ONLINETRADINGINC.COM CORP.

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JANUARY 31, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
REVENUES:
Commissions............................................. $5,525,427 $3,673,728
Net dealer inventory and investment gains and losses.... 328,495 (187,973)
Interest and dividends.................................. 138,142 62,630
---------- ----------
Total Revenues........................................ 5,992,064 3,548,385
---------- ----------
OPERATING EXPENSES:
Employee compensation and benefits...................... 3,339,763 1,402,102
Clearing and other transaction costs.................... 2,002,055 1,751,472
Occupancy and administration............................ 406,814 324,499
Interest expense........................................ 36,566 71,805
Depreciation............................................ 29,918 20,485
---------- ----------
Total Operating Expenses.............................. 5,815,116 3,570,363
---------- ----------
Income (Loss) Before Income Taxes....................... 176,948 (21,978)
Income Tax (Provision) Benefit.......................... (59,650) 2,550
---------- ----------
Net Income (Loss)....................................... $ 117,298 $ (19,428)
========== ==========
EARNINGS (LOSS) PER SHARE:
Basic................................................... $ 0.0147 $ (0.0026)
========== ==========
Diluted................................................. $ 0.0147 $ (0.0026)
========== ==========
Weighted average common shares outstanding.............. 7,971,510 7,600,000
========== ==========
</TABLE>

See notes to financial statements.

F-4
<PAGE> 54

ONLINETRADINGINC.COM CORP.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JANUARY 31, 1999 AND 1998

<TABLE>
<CAPTION>
SERIES A
PREFERRED STOCK COMMON STOCK
--------------------- --------------------- ADDITIONAL
SHARES AMOUNT AT SHARES AMOUNT AT PAID-IN RETAINED
ISSUED STATED VALUE ISSUED PAR VALUE CAPITAL EARNINGS TOTALS
------ ------------ --------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES, February 1,
1997, as restated
[see Note 9(a)]...... 300 $300,000 7,600,000 $76,000 $89,951 $ 47,070 $513,021
Net loss for the year
ended January 31,
1998................. -- -- -- -- -- (19,428) (19,428)
--- -------- --------- ------- ------- -------- --------
BALANCES, January 31,
1998................. 300 300,000 7,600,000 76,000 89,951 27,642 493,593
Common stock issued for
services............. -- -- 400,000 4,000 5,075 -- 9,075
Net income for the year
ended January 31,
1999................. -- -- -- -- -- 117,298 117,298
--- -------- --------- ------- ------- -------- --------
BALANCES, January 31,
1999................. 300 $300,000 8,000,000 $80,000 $95,026 $144,940 $619,966
=== ======== ========= ======= ======= ======== ========
</TABLE>

See notes to financial statements.

F-5
<PAGE> 55

ONLINETRADINGINC.COM CORP.

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JANUARY 31, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................ $ 117,298 $ (19,428)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation........................................... 29,918 20,485
Common stock issued for services....................... 9,075 --
Deferred income taxes.................................. 13,850 (2,550)
Changes in certain assets and liabilities:
Receivable from clearing organization............... (271,533) (172,401)
Other receivables................................... (6,163) --
Securities owned at market value.................... 302,251 84,619
Other current assets................................ (8,859) (561)
Accounts payable and accrued expenses............... 737,312 170,867
Income taxes payable................................ 45,800 (12,504)
Securities sold but not yet purchased, at market
value............................................. (131,782) 23,719
---------- ---------
Net Cash Provided by Operating Activities......... 837,167 92,246
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment....................... (48,891) (83,345)
Net change in other assets............................... (25,667) --
---------- ---------
Net Cash Used in Investing Activities............. (74,558) (83,345)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of subordinated loan.............. 25,000 --
---------- ---------
Net Increase in Cash.............................. 787,609 8,901
Cash and Cash Equivalents, Beginning of year............. 218,335 209,434
---------- ---------
Cash and Cash Equivalents, End of year................... $1,005,944 $ 218,335
========== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for income taxes............... $ -- $ 12,504
========== =========
Cash paid during the year for interest................... $ 35,831 $ 75,936
========== =========
</TABLE>

See notes to financial statements.

F-6
<PAGE> 56

ONLINETRADINGINC.COM CORP.

NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED JANUARY 31, 1999 AND 1998

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

onlinetradinginc.com corp. (the "Company") was incorporated in the State of
Florida on September 7, 1995 and operates as a registered securities
broker/dealer under the rules of the National Association of Securities Dealers
("NASD"). The Company is headquartered in Boca Raton, Florida and has branch
offices in Massachusetts, Pennsylvania, Michigan, and Ohio.

The Company manages its customer accounts through Bear Stearns Securities
Corp., (the "clearing firm"), on a fully disclosed basis. The clearing firm
provides services, handles the Company's customers' funds, holds securities, and
remits monthly activity statements to the customers on behalf of the Company.
The amount receivable from brokers and dealers relates to commissions earned by
the Company for trades executed by the other broker/dealer on behalf of the
Company.

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

MARKETABLE SECURITIES

Marketable securities are valued at market value and securities not readily
marketable are valued at fair value as determined by the board of directors. The
resulting difference between cost and market (or fair value) is included in
income.

PROPERTY AND EQUIPMENT

Furniture, equipment and leasehold improvements are recorded at cost and
depreciated over the estimated useful lives of those assets using the
straight-line and accelerated methods. Expenditures for routine maintenance and
repairs are charged to expenses as incurred.

SECURITIES TRANSACTIONS

Proprietary securities transactions in regular-way trades are recorded on
the trade date, as if they settled. Profit and loss arising from all securities
and commodities transactions entered into for the account and risk of the
Company are recorded on a trade date basis. Customers' securities and
commodities transactions are reported on a settlement date basis with related
commission income and expenses reported on a trade date basis. Results from the
use of the settlement date basis would not be materially different from the
trade date basis.

Amounts receivable and payable for securities transactions that have not
reached their contractual settlement date are recorded net on the statement of
financial condition.

F-7
<PAGE> 57
ONLINETRADINGINC.COM CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

COMMISSIONS

Commissions and related clearing expenses are recorded on a trade-date
basis as securities transactions occur.

ADVERTISING

The costs of advertising, promotion, and marketing programs are charged to
operations in the year incurred. Such expense items totaled $30,382 and $29,062,
respectively, for the years ended January 31, 1999 and 1998.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all highly liquid investments purchased
with an original maturity of three months or less. The Company occasionally
maintains cash balances in financial institutions in excess of the federally
insured limits.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash, accounts receivable, and accounts payable and accrued expenses are
reflected in the financial statements at cost, which approximates fair value
because of the short-term maturity of those instruments. The fair value of the
Company's subordinated loans payable, as described in Note 7, approximate their
recorded values.

INCOME TAXES

The Company accounts for income taxes in accordance with the Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," which
requires the recognition of deferred tax liabilities and assets at currently
enacted tax rates for the expected future tax consequences of events that have
been included in the financial statements and tax returns. A valuation allowance
is recognized, if necessary, to reduce the net deferred tax asset to an amount
that is more likely than not to be realized.

NET INCOME PER COMMON SHARE

The Company has adopted SFAS No. 128, "Earnings Per Share," which requires
companies with complex capital structures or common stock equivalents to present
both basic and diluted earnings per share ("EPS") on the face of the income
statement. Basic EPS is calculated as income available to common stockholders
divided by the weighted average number of common shares outstanding during the
period. Diluted EPS is calculated using the "if converted" method for
convertible securities and the treasury stock method for options and warrants as
previously prescribed by Accounting Principles Board Opinion No. 15, "Earnings
Per Share." The adoption of SFAS 128 did not have an impact on the Company's
reported results.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" and SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information." SFAS 130 and 131 are effective for fiscal years beginning
after December 15, 1997. Adoption of these standards had no material impact on
the
F-8
<PAGE> 58
ONLINETRADINGINC.COM CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Company's results of operations. A statement of comprehensive income is not
presented since the Company had no items of other comprehensive income.

NOTE 2. NET CAPITAL REQUIREMENTS

The Company is subject to the Securities and Exchange Commission uniform
net capital rule (rule 15c3-1), which requires the maintenance of minimal net
capital and requires that the ratio of aggregate indebtedness to net capital,
both as defined, shall not exceed 15 to 1. As of January 31, 1999, the Company
had net capital of $894,395, which was $794,395 in excess of its required net
capital of $100,000.

NOTE 3. PENSION PLAN

During the year ended January 31, 1999, the Company established a "SIMPLE"
retirement plan. Eligible employees may contribute up to $500 per month for
which the Company will match dollar-for-dollar, up to 3% of the employees'
compensation. Contributions by the Company under this plan totaled $46,987 for
the year ended January 31, 1999.

NOTE 4. SECURITIES OWNED AND SECURITIES SOLD BUT NOT YET PURCHASED

Securities owned and securities sold but not yet purchased consist of
marketable trading and investment securities at quoted market values. These
securities consist of the following:

<TABLE>
<CAPTION>
1999 1998
-------------------- --------------------
SOLD, SOLD,
NOT YET NOT YET
OWNED PURCHASED OWNED PURCHASED
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Corporate stocks........................ $224,428 $ -- $528,788 $131,782
Obligations of U.S. Government.......... 156,656 -- 154,547 --
Total......................... $381,084 $ -- $683,335 $131,782
</TABLE>

NOTE 5. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at January 31, 1999 and
1998:

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Computers and equipment.................................... $145,009 $127,661
Furniture and fixtures..................................... 36,651 19,499
Leasehold improvements..................................... 14,521 --
-------- --------
Total cost............................................... 196,181 147,160
Less: Accumulated depreciation............................. (60,035) (29,986)
-------- --------
Property and equipment, net.............................. $136,146 $117,174
======== ========
</TABLE>

Depreciation expense for the years ended January 31, 1999 and 1998 was
$29,918 and $20,485, respectively.

F-9
<PAGE> 59
ONLINETRADINGINC.COM CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at January 31, 1999 and 1998
consist of the following:

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Accounts payable........................................... $163,074 $119,622
Accrued liabilities:
Research fees............................................ 124,828 --
Payroll, and related expenses............................ 644,148 78,989
Interest payable......................................... 8,734 7,999
Professional fees and other.............................. 7,638 4,500
-------- --------
Total................................................. $948,422 $211,110
======== ========
</TABLE>

NOTE 7. SUBORDINATED LOANS

The borrowings under subordinated agreements as of January 31, 1999 and
1998 are as follows:

<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Subordinated equity loan with a shareholder, unsecured, at
a rate of 7% with a scheduled maturity date of February 12,
1999. Renewed on December 17, 1998, to be effective
February 12, 1999, at a rate of 5%. Scheduled maturity on
February 11, 2002.......................................... $400,000 $400,000
Subordinated loan, unsecured, at a rate of 5% with a
scheduled maturity on February 1, 2000..................... 100,000 100,000
Subordinated loan, unsecured, at a rate of 6% with a
scheduled maturity on August 31, 1999...................... 25,000 --
-------- --------
$525,000 $500,000
======== ========
</TABLE>

By being designated as subordinated, these loans are available in computing
net capital under the SEC's uniform net capital rule. To the extent that the
subordinated loans are required for the Company's continued compliance with
minimum net capital requirements, they may not be repaid.

NOTE 8. INCOME TAXES

A summary of the income tax provision (benefit) for the years ended January
31, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Currently payable:
Federal................................................... $36,360 $ --
State..................................................... 9,440 --
Deferred provision (benefit)................................ 13,850 (2,550)
------- -------
Income tax provision (benefit)............................ $59,650 $(2,550)
======= =======
</TABLE>

F-10
<PAGE> 60
ONLINETRADINGINC.COM CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Temporary differences between the reported amounts in the financial
statements and tax bases of assets and liabilities that give rise to deferred
income tax (assets) liabilities relate to the following:

<TABLE>
<CAPTION>
1999 1998
------- ------
<S> <C> <C>
Property and equipment, due to differences in
depreciation.............................................. $15,400 $5,800
Net operating loss carryovers............................... -- (4,250)
------- ------
Net deferred income tax liability......................... $15,400 $1,550
======= ======
</TABLE>

The effective income tax rate varied from the statutory Federal tax rate as
follows:

<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Federal statutory rate (benefit)............................ 34% (34%)
State income taxes, net of federal income tax effect........ 5% (4%)
Other, including permanent differences, non-deductible
adjustments to deferred taxes expenses and the effect of
the rate brackets......................................... (5%) 26%
-- ---
Effective income tax rate (benefit)....................... 34% (12%)
== ===
</TABLE>

NOTE 9. STOCKHOLDERS' EQUITY

(A) CAPITAL STOCK

On March 24, 1999, the shareholders and Directors affected an amendment to
the Company's articles of incorporation to change the number of authorized
common shares to 30,000,000 with a par value per share of $0.01 and to change
the number of authorized preferred shares to 1,000,000 with a par value of $0.01
per share. Prior to that date, the Company had 1,000 authorized common shares
with no par value and authorized preferred shares of 300,000 with a par value
per share of $1,000. All of the shares outstanding at that date were converted
into 8,000,000 shares of the new $0.01 par value common stock, and into 300
shares of Series A preferred stock, stated value $1,000 per share. The reported
shares of the Company have been restated to February 1, 1997, as well as other
share and per share amounts, as if a stock split had occurred.

Each holder of the new $0.01 par value common stock is entitled to one vote
for each share held on all matters presented to a vote of shareholders,
including the election of directors. Holders of common stock have no cumulative
voting rights or preemptive rights to purchase or subscribe for any stock or
other securities, and there are no conversion rights or redemption or sinking
fund provisions with respect to this stock.

The Company's Directors have the authority to issue 1,000,000 shares of the
new $0.01 par value preferred stock in one or more series and to fix, by
resolution, conditional, full, limited or no voting powers, and the
designations, preferences and relative, participating, optional or other special
rights, if any, and the qualifications, limitations or restrictions thereof, if
any, including the number of shares in the series (which the Board may increase
or decrease as permitted by Florida law), liquidation preferences, dividend
rates, conversion or exchange rights, redemption provisions of the shares
constituting any series and such other special rights and protective provisions
with respect to any class or series as the Board may deem advisable without any
further vote or action by the

F-11
<PAGE> 61
ONLINETRADINGINC.COM CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

shareholders. Any shares of preferred stock so issued could have priority over
the common stock with respect to dividend or liquidation rights or both and
could have voting and other rights of shareholders. The Board has authorized and
issued a Series A preferred with the following terms: 300 shares with a stated
value of $1,000 per share, one vote per share, and redeemable at 110% of stated
value at the option of the Company.

(B) STOCK OFFERING

On or about March 26, 1999, the Company expects to file an SEC Registration
Statement to register its common shares, and following its being declared
effective, the Company, through its underwriter, proposes to sell a maximum of
2,000,000 shares of its common stock and 2,000,000 warrants. Each warrant will
entitle the holder to purchase one share of common stock at a price to be
determined (depending on the initial public offering price) for a period of five
years. Under certain conditions, the Company may repurchase the warrants after
the expiration of a twelve-month period following the initial issuance. The
underwriter is entitled to an over-allotment of 300,000 common shares and
300,000 warrants, and is also entitled to purchase an additional block of
200,000 warrants to purchase an aggregate of 200,000 shares of common stock at a
price equal to 120% of the public offering price, and 200,000 warrants to
purchase warrants having an exercise price of 120% above the exercise price of
the publicly sold warrants at the closing of the offering.

NOTE 10. CONCENTRATIONS AND CREDIT RISKS

MAJOR CUSTOMERS

For the year ended January 31, 1998, one customer accounted for $395,491 of
the Company's gross revenues, while another accounted for $369,086. For fiscal
1999, there were no individual customers that accounted for over 10% of the
Company's revenues.

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Company will periodically sell securities that it does not currently
own and will therefore be obligated to purchase such securities at a future
date. The Company had recorded these obligations in the financial statements at
January 31, 1998, at market values of the related securities and would have
incurred a loss if the market value of the securities increases subsequent to
January 31, 1998. As of January 31, 1999, the Company was not holding any of
these securities.

The Company's customer securities activities are transacted on either a
cash or margin basis. In margin transactions, the Company extends credit to its
customers, subject to various regulatory and internal margin requirements,
collateralized by cash and securities in the customers' accounts. In connection
with these activities, the Company executes and clears customer transactions
involving the sale of securities not yet purchased, substantially all of which
are transacted on a margin basis subject to individual exchange regulations.
Such transactions may expose the Company to significant off-balance-sheet risk
in the event margin requirements are not sufficient to fully cover losses that
customers may incur. In the event the customer fails to satisfy its obligations,
the Company may be required to purchase or sell financial instruments at
prevailing market prices to fulfill the customer's obligations. The Company
seeks to control the risks associated with its

F-12
<PAGE> 62
ONLINETRADINGINC.COM CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

customer activities by requiring customers to maintain margin collateral in
compliance with various regulatory and internal guidelines. The Company and its
clearing firm monitor required margin levels daily and, pursuant to such
guidelines, require the customers to deposit additional collateral or to reduce
positions when necessary.

The Company's customer financing and securities settlement activities
require the Company to pledge customer securities as collateral in support of
various secured financing sources such as bank loans and securities loaned. In
the event the counterparty is unable to meet its contractual obligation to
return customer securities pledged as collateral, the Company may be exposed to
the risk of acquiring the securities at prevailing market prices in order to
satisfy its customers obligations. The Company controls this risk by monitoring
the market value of securities pledged on a daily basis and by requiring
adjustments of collateral levels in the event of excess market exposure. In
addition, the Company establishes credit limits for such activities and monitors
compliance on a daily basis.

CONCENTRATIONS OF CREDIT RISK

The Company is engaged in various trading and brokerage activities in which
counterparties primarily include broker-dealers, banks, and other financial
institutions. In the event counterparties do not fulfill their obligations, the
Company may be exposed to risk. The risk of default depends on the
creditworthiness of the counterparty or issuer of the instrument. It is the
Company's policy to review, as necessary, the credit standing of each
counterparty.

NOTE 11. COMMITMENTS AND CONTINGENCIES

The Company is obligated under four non-cancelable operating leases for
office space. Rent expense for the years ended January 31, 1999 and 1998 was as
follows:

<TABLE>
<CAPTION>
1999 1998
-------- -------
<S> <C> <C>
Base rent................................................. $119,705 $89,634
Sublease income........................................... (14,300) (27,846)
-------- -------
Rent expense, net......................................... $105,405 $61,788
======== =======
</TABLE>

Future minimum rental payments required under the leases are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
JANUARY 31,
- -----------
<S> <C>
2000........................................................ $ 32,443
2001........................................................ 27,248
2002........................................................ 27,926
2003........................................................ 30,855
2004........................................................ 28,490
Thereafter.................................................. 2,989
--------
$149,951
========
</TABLE>

F-13
<PAGE> 63
ONLINETRADINGINC.COM CORP.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Operating lease commitments have been reduced for rental income from
noncancelable subleases totaling $1,079,255. If the sublessees were to default
on their obligations, the Company would ultimately be responsible for the rental
payments.

NOTE 12. NET INCOME (LOSS) PER COMMON SHARE

For the years ended January 31, 1999 and 1998, basic and diluted weighted
average common shares include only common shares outstanding since there were no
common share equivalents.

A reconciliation of the number of common shares shown as outstanding in the
financial statements with the number of shares used in the computation of
weighted average common shares outstanding is shown below:

<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Common shares outstanding at January 31st................. 8,000,000 7,600,000
Effect of weighting....................................... (28,490) --
--------- ---------
Weighted average common shares outstanding................ 7,971,510 7,600,000
========= =========
</TABLE>

The number of shares were restated to reflect the number of shares issued
upon the amendment of the articles of incorporation as if a stock split had
occurred (see Note 9).

F-14
<PAGE> 64

------------------------------------------------------
------------------------------------------------------

NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, THE
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY US OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE HEREOF OR SINCE THE DATES AS OF
WHICH INFORMATION IS SET FORTH HEREIN. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER
IN SUCH JURISDICTION.
-------------------------

TABLE OF CONTENTS

-------------------------

UNTIL , 1999 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE SHARES OF COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------

ON LINE TRADING INC LOGO

2,250,000 SHARES
OF COMMON STOCK
-------------------------

PROSPECTUS

-------------------------

WERBEL-ROTH
SECURITIES, INC.

, 1999

------------------------------------------------------
------------------------------------------------------
<PAGE> 65

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant has authority under the Florida Business Corporation Act to
indemnify its directors and officers to the extent provided for in such statute.
The Registrant's Articles of Incorporation and Bylaws provide that the
Registrant may insure, shall indemnify and shall advance expenses on behalf of
its officers and directors to the fullest extent not prohibited by law. The
Registrant is also a party to indemnification agreements with each of its
directors and officers.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The Registrant estimates that expenses payable by the Registrant in
connection with the offering described in this registration statement (other
than underwriting discounts and commissions) will be as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 11,632.88
NASD filing fee............................................. 4,440.41
Nasdaq SmallCap Market listing fee.......................... 10,000.00
Printing and engraving expenses*............................ 60,000.00
Accounting fees and expenses*............................... 40,000.00
Legal fees and expenses*.................................... 100,000.00
Blue Sky fees and expenses*................................. 20,000.00
Transfer Agent's fees and expenses*......................... 4,500.00
Miscellaneous*.............................................. 14,426.71
-----------
TOTAL..................................................... $265,000.00
===========
</TABLE>

- -------------------------
* Estimated.

All amounts except the Securities and Exchange Commission registration fee,
the NASD filing fee and the Nasdaq listing fee are estimated.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

In February 1997, the Registrant issued 240,000 shares of Common Stock to
Derek J. Hernquist as additional consideration for Mr. Hernquist agreeing to
become employed by the Registrant.

In December 1997, the Registrant issued 300,000 shares of Series A
Redeemable Preferred Stock to Benedict Gambino in consideration for $300,000.

In February 1998, the Registrant issued 400,000 shares of Common Stock to
Steven zum Tobel as additional consideration for Mr. zum Tobel agreeing to
become employed by the Registrant. Pursuant to the terms of an agreement between
the Registrant and Mr. zum Tobel, the shares vest over a period of time and the
Registrant may redeem the unvested portion of these shares if Mr. zum Tobel
resigns from his employment or is terminated with cause, as defined in the
Employment Agreement, on or before March 1, 2001.

II-1
<PAGE> 66

In connection with the above-referenced issuances, we relied on Section
4(2) under the Securities Act of 1933, as amended, as transactions by an issuer
not involving any public offering. Each of the above investors had full access
to information relating to us and represented to us that he had the required
investment intent. In addition, the above-referenced securities will bear
appropriate restrictive legends, and stop transfer orders will be placed against
such securities.

ITEM 27. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<C> <S>
1.1 Form of Underwriting Agreement(2)
3.1 Registrant's Amended and Restated Articles of Incorporation,
as amended(3)
3.2 Registrant's Amended and Restated Bylaws(1)
4.1 Form of Underwriter's Warrant Agreement, including Form of
Warrant Certificate*(3)
4.2 Form of Registrant's Common Stock Certificate(3)
5.1 Opinion of Broad and Cassel(3)
10.1 1999 Stock Option Plan*(1)
10.2 Employment Agreement with Farshid Tafazzoli*(2)
10.3 Employment Agreement with Andrew Allen*(2)
10.4 Employment Agreement with E. Steven zum Tobel*(2)
10.5 Employment Agreement with Derek Hernquist*(2)
10.6 Office Lease dated August 13, 1998 between Registrant and
Highwoods/Florida Holdings, L.P.(1)
10.7 Form of Indemnification Agreement between the Registrant and
each of its directors and executive officers*(1)
10.8 Clearing Agreement with Bear Stearns Securities Corp.(1)
23.1 Consent of Broad and Cassel (included in its opinion filed
as Exhibit 5.1)(3)
23.2 Consent of Ahearn, Jasco + Company, P.A.(2)
25.1 Power of Attorney (included on the signature page of this
Registration Statement)
</TABLE>

- -------------------------
* Compensation Plan or Arrangement

(1) Previously filed.

(2) Filed herewith.

(3) To be filed by amendment.

II-2
<PAGE> 67

ITEM 28. UNDERTAKINGS

(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:

(3) To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense or any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

II-3
<PAGE> 68

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereto duly authorized, in the City
of Boca Raton, State of Florida, on May 12, 1999.

onlinetradinginc.com corp.

By: /s/ ANDREW A. ALLEN
----------------------------------
Andrew A. Allen,
Chairman and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ ANDREW A. ALLEN Chairman, Chief Executive May 12, 1999
- --------------------------------------------------- Officer and Director (Principal
Andrew A. Allen Executive Officer)

/s/ E. STEVEN ZUM TOBEL President, Chief Financial May 12, 1999
- --------------------------------------------------- Officer and Director (Principal
E. Steven zum Tobel Accounting Officer)

/s/ FARSHID TAFAZZOLI Chief Information Officer and May 12, 1999
- --------------------------------------------------- Director
Farshid Tafazzoli

/s/ DEREK J. HERNQUIST Vice President of Operations, May 12, 1999
- --------------------------------------------------- Secretary and Director
Derek J. Hernquist

* Director May 12, 1999
- ---------------------------------------------------
Benedict S. Gambino

*By: /s/ ANDREW A. ALLEN
- --------------------------------------------------
Andrew A. Allen
Attorney in Fact
</TABLE>

II-4

<PAGE> 1
EXHIBIT 1.1

onlinetradinginc.com corp.
2700 North Military Trail, Suite 200
Boca Raton, Florida 33431

FORM OF UNDERWRITING AGREEMENT

, 1999
--------

Werbel-Roth Securities, Inc.
150 East Palmetto Park Road, Suite 501
Boca Raton, Florida 33432

Dear Sirs:

The undersigned, onlinetradinginc.com corp., a Florida corporation (the
"Company"), hereby confirms its agreement with Werbel-Roth Securities, Inc.
(being referred to herein as "you" or the "Underwriter"), as follows:

1. Introduction. The Company proposes to engage you to sell on
its behalf, 2,250,000 shares of Common Stock (the "Shares"). The Shares are
hereinafter referred to as the "Firm Securities." The Company also proposes to
issue and sell to you, pursuant to the terms of the Underwriter's Warrant
Agreement, warrants (the "Underwriter's Warrants") for the purchase of up to an
additional 225,000 Redeemable Warrants to Purchase 225,000 shares of Common
Stock. The Underwriter's Warrants shall be exercisable during the four year
period commencing one year from the date of the Prospectus at an exercise price
of 120% of the Offering Price per Warrant, subject to adjustments in the number
of Shares issuable upon the exercise thereof and in the exercise price of the
Underwriter's Warrants as a result of certain events, including subdivisions and
combinations of the Common Stock. The Shares and the Underwriter's Warrants are
more fully described in the Registration Statement and the Prospectus referred
to below.

2. Representations and Warranties of the Company. The Company
represents and warrants to the Underwriter that:

a. The Company has filed with the Securities and Exchange
Commission (the "SEC") a registration statement and an amendment or amendments
thereto, on Form SB-2 (No. 333-75119), including any related preliminary
prospectus (the "Preliminary Prospectus"), for the registration of the Shares
and the Underwriter's Warrants (the "Common Shares"), under the Securities Act
of 1933, as amended (the "Act"), which registration statement and amendment or
amendments have been prepared by the Company in conformity with the requirements
of the Act, and the rules and regulations (the "Regulations") of the SEC
promulgated under the Act. The Company will promptly file a further amendment to
said registration statement, which has been similarly prepared, in the form
heretofore delivered to you and will not, before the registration statement
becomes effective, file any other amendment thereto to which you shall have
reasonably objected after having been furnished with a copy thereof. Except as
the context may otherwise

<PAGE> 2

require, such registration statement, as amended, on file with the SEC at the
time the registration statement becomes effective (including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a
part thereof or incorporated therein and all information deemed a part thereof
as of such time pursuant to paragraph (b) of Rule 430(A) of the Regulations), is
hereinafter called the "Registration Statement," and the form of prospectus, in
the form first filed with the SEC pursuant to Rule 424(b) of the Regulations, is
hereinafter called the "Prospectus."

b. On the date upon which the Registration Statement is
declared effective by the SEC (the "Effective Date") and all times subsequent
thereto up to the Closing Date (as such term is defined in Section 4.c. hereof),
the Registration Statement and the Prospectus will comply in all material
aspects with the applicable provisions of the Act and the Regulations; neither
the Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, will contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. When any Preliminary Prospectus was first filed with the SEC
(whether filed as a part of the Registration Statement for the registration of
the securities or any amendment thereto or pursuant to Rule 424(a) of the
Regulations) and when any amendment thereof or supplement thereto was first
filed with the SEC, such Preliminary Prospectus complied or will comply in all
material respects with the applicable provisions of the Act and the Regulations
and did not and will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The representation and warranty made in this Section
2.b. does not apply to statements made or statements omitted in reliance upon
and in conformity with written information furnished to the Company with respect
to the Underwriter by the Underwriter expressly for use in the Registration
Statement or Prospectus or any amendment thereof or supplement thereto.

c. This Agreement and the Underwriter's Warrant Agreement have
been (or as of the Closing Date will have been) duly and validly authorized by
the Company, and this Agreement constitutes and the Underwriter's Warrant
Agreement, when executed and delivered pursuant to this Agreement, will
(assuming due execution by the Underwriter) constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
respective terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (ii) as enforceability of any indemnification provision may be
limited under the federal and state securities laws, and (iii) that the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to the equitable defenses and the discretion of the court before
which any proceeding therefor may be brought. The Shares, the Underwriter's
Warrants and the Shares issuable upon exercise of the Underwriter's Warrants to
be issued and sold by the Company pursuant to this Agreement, have been duly
authorized and, when issued and paid for pursuant to the terms of the
Underwriter's Warrant, will be validly issued, fully paid and non-assessable;
the holders thereof are not and will not be subject to personal liability by
reason of being such holders; the Shares and the Underwriter's Warrants are not
and will not be subject to the preemptive rights of any holders of any security
of

<PAGE> 3

the Company or similar contractual right granted by the Company; and all
corporate action required to be taken for the authorization, issuance and sale
of the Shares and the Underwriter's Warrants has been duly and validly taken.
The Underwriter's Warrants constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, to issue and sell, upon
exercise in accordance with the terms thereof, the number and type of the
Company's securities called for thereby; except (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (ii) as enforceability of any indemnification
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and the discretion of
the court before which any proceeding therefor may be brought.

d. All issued and outstanding securities of the Company have
been duly authorized and validly issued and are fully paid and non-assessable;
the issuance and sales of all such securities complied in all respects with
applicable federal and state securities laws; the holders thereof have no rights
of rescission with respect thereto, and are not subject to personal liability by
reason of being such holders; and none of such securities were issued in
violation of the preemptive rights of any holders of any security of the Company
or similar contractual rights granted by the Company.

e. The Company has good and marketable title to, or valid and
enforceable contractual or leasehold estate in, all items of real and personal
property stated in the Prospectus to be owned or leased by it, free and clear of
all liens, encumbrances, claims, security interests, defects and restrictions of
any material nature whatsoever, other than those referred to in the Prospectus
and liens for taxes not yet due and payable.

f. There is no action, suit, proceeding, inquiry,
investigation, litigation or governmental proceeding pending or threatened
against, or involving the properties or business of the Company which might
materially and adversely affect the financial position, or prospects, or
business of the Company, except as referred to in the Prospectus.

g. All contracts and other documents required to be described
in the Registration Statement or the Prospectus fairly present the financial
position and the results of operations of the Company at the dates and for the
periods to which they apply; and such financial statements have been prepared in
conformity with generally accepted accounting principles, consistently applied
throughout the periods involved. There has been no material adverse change in
financial condition or results of operations of the Company or development
involving a prospective change in the condition or prospects of the Company,
financial or otherwise, since the date of the financial statements included in
the Prospectus, except as disclosed therein.

h. Ahearn, Jasco + Company, P.A., whose report is filed with
the SEC as part of the Registration Statement, are independent accountants as
required by the Act and the Regulations, and are qualified in all respects to
provide the services contemplated by this Agreement.

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<PAGE> 4

i. The Company has no subsidiaries. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of its state of incorporation. Except as otherwise set forth in the
Prospectus, the Company does not own, directly or indirectly, an interest in any
corporation, partnership, joint venture, trust or other business entity. The
Company is duly qualified and licensed and in good standing as a foreign
corporation in each jurisdiction in which operations require such qualification
or licensing. The Company has all requisite corporate power and authority, and
the Company has all necessary authorizations, approvals, orders, licenses,
certificates and permits of and from all governmental regulatory officials and
bodies (collectively, the "Approvals"), to own or lease its properties and
conduct its business as described in the Prospectus, except where the failure to
have such Approvals would not have a material adverse effect on the Company. The
Company is and has been doing business in compliance with all such material
authorizations, approvals, orders, licenses, certificates and permits and all
federal state and local laws, rules and regulations except where the failure to
do so would not have a material adverse effect on the Company. The Company has
all requisite corporate power and authority to enter into this Agreement and the
Underwriter's Warrant Agreement and to carry out the provisions and conditions
hereof, and all consents, authorizations, approvals and orders required in
connection therewith have been obtained. No consent, authorization or order of,
and no filing with, any court, government agency or other body is required for
the issuance of the Shares and the Underwriter's Warrant Agreement, pursuant to
the Agreement, and as contemplated by the Prospectus, except with respect to
applicable federal and state securities laws.

j. The outstanding debt, the property and the business of the
Company, conform in all material respects to the descriptions thereof contained
in the Registration Statement and Prospectus.

k. The Shares and the Underwriter's Warrants and other
securities issued or to be issued by the Company on or before the Closing Dates
described herein conform, or will conform when issued, in all material respects,
to all statements with respect thereto contained in the Registration Statement
and the Prospectus.

l. No material default exists in the due performance and
observance of any term, covenant or condition of any license, contract,
indenture, mortgage, deed of trust, note, loan or credit agreement, or any other
agreement or instrument evidencing instrument to which the Company, is a party
or by which the Company may be bound or to which any of the property or assets
of the Company, is subject.

m. The Company is not in violation of any term or provision of
its respective Articles of Incorporation or By-laws. Neither the execution and
delivery of this Agreement, nor the issue and sale of the Shares, the
Underwriter's Warrants, nor the consummation of any of the transactions
contemplated herein, nor the compliance by the Company with the terms and
provisions hereof has materially conflicted with or will materially conflict
with, or has resulted in or will result in a material breach of, any of the
terms and provisions of, or has constituted or will constitute a material
default under, or has resulted in or will result in the creation or imposition
of any lien,

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<PAGE> 5

charge or encumbrance upon the property or assets of the Company, pursuant to
the terms of any indenture, mortgage, deed of trust, note, loan or credit
agreement or any other agreement or instrument evidencing an obligation for
borrowed money, or any other agreement or instrument to which the Company is a
party or by which the Company is or may be bound or to which any of the property
or assets of the Company, is subject; nor will such action result in any
material violation of the provisions of the respective Articles of Incorporation
or the By-laws of the Company or any contract or agreement, or any statute or
any order, rule or regulation applicable to the Company or any other regulatory
authority or other governmental body having jurisdiction over the Company.

n. All taxes which are due from the Company have been paid in
full, and the Company has no tax deficiency or claim outstanding or assessed
against it.

o. Subsequent to the respective dates as of which information
is given in the most recently circulated Preliminary Prospectus included as a
part of the Registration Statement, and except as may otherwise be indicated or
contemplated herein or therein, the Company has not issued any securities
(except for the issuance of securities described under the caption
"Capitalization") or (ii) declared or paid any dividend or made any other
distribution on or in respect to its capital stock; and the Company has not (i)
incurred any liability or obligation, direct or contingent, for borrowed money;
or (ii) entered into any transaction other than in the ordinary course of
business.

p. The SEC has not issued any order preventing or suspending
the use of any Preliminary Prospectus or part thereof.

q. On the Effective Date, (i) the authorization of capital
stock of the Company is as set forth in Registration Statement, and (ii) not
more than an aggregate of 100,000,000 shares of Common Stock shall be issued and
outstanding (including any and all (A) securities with equivalent rights as the
Common Stock, (B) 2,250,000 shares of Common Stock, or such equivalent
securities, issuable upon exercise of options, warrants and other contract
rights, and (C) securities convertible, directly or indirectly, into shares of
Common Stock or such equivalent securities, and excluding any warrants issuable
to the Underwriter in connection with the public offering of the Shares and any
options which may be outstanding to employees).

r. Except for the registration rights granted under the
Underwriter's Warrant Agreement, no holders of any securities of the Company or
of any options, warrants or convertible of exchangeable securities of the
Company exercisable for or convertible or exchangeable for securities of the
Company have the right to include any securities issued by the Company in the
Registration Statement or any registration statement to be filed by the Company.

s. The Company has entered employment agreements with Andrew
S. Allen, Farshid Tafazzoli, E. Steven zum Tobel and Derek Hernquist in the form
filed as Exhibit 10.4 to the Registration Statement, and intends to procure
keyman life insurance policies in the amount of $2,000,000 on the lives of
Andrew S. Allen and Farshid Tafazzoli.

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<PAGE> 6

t. The Company has filed a Registration Statement with the SEC
pursuant to Section 12(g) of the Exchange Act, and has used its best efforts to
have same declared effective by the SEC on an accelerated basis on the Effective
Date. In addition, the Company has taken all actions necessary to qualify the
Shares for listing on the Nasdaq Stock Market System ("Nasdaq") on the Effective
Date.

u. Except as described in the Prospectus, there are no claims,
payments, issuances, arrangements or understandings for services in the nature
of a finder's or origination fee with respect to the sale of the Securities
hereunder or any other arrangements, agreements, understandings, commitments,
payments or issuances of securities with respect to the Company that may affect
the Underwriters' compensation, as determined by the National Association of
Securities Dealers, Inc. ("NASD").

v. Neither the Company nor any of its officers, directors or
partners, nor, to the knowledge of the Company, any of its employees, agents or
any other person acting on behalf of the Company has, directly or indirectly,
given or agreed to give any money, gift or similar benefit (other than legal
price concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer, supplier or official or
governmental agency or instrumentality of any government (domestic or foreign)
or person who was, is, or may be in a position to help or hinder the business of
the Company (or assist it in connection with any actual or proposed transaction)
which (i) might subject the Company to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not given in the
past, might have had a materially adverse effect on the assets, business or
operations of the Company as reflected in any of the financial statements
contained in the Prospectus, or (iii) if not continued in the future, might
adversely affect the assets, business, operations or prospects of the Company.

w. The Company owns or possesses the requisite licenses or
rights to use all trademarks, service marks, service names, trade names, patents
and patent applications, copyrights, methods, protocols, techniques,
technologies, procedures and other rights (collectively the "Intangibles")
described as owned or used by the Company in the Registration Statement. There
is no claim, action or proceeding by any person pending or, to the Company's
knowledge, threatened, which pertains to or challenges the rights of the Company
with respect to any Intangibles used in the conduct of the business of the
Company, except as described in the Prospectus. To the Company's knowledge, the
Company's current products, services and processes do not infringe on any
Intangibles held by any third party.

x. Except as set forth in the Registration Statement, the
Company is under no obligation to pay royalties or fees of any kind whatsoever
to any third party with respect to Intangibles it has developed, uses, employees
or intends to use or employ.

y. The Company has generally enjoyed a satisfactory
employer/employee relationship with its respective employees and is in
compliance in all material respects with all federal, state and local laws and
regulations respecting the employment of their respective employees

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<PAGE> 7

and employment practices, terms and conditions of employment wages and hours
relating thereto. There are no pending or, to the Company's knowledge,
threatened investigations involving the Company by the U.S. Department of Labor,
or any other governmental agency responsible for the enforcement of such
federal, state or local laws and regulations. There is no unfair labor practice
charge or complaint against the Company pending before the National Labor
Relations Board or any strike, picketing, boycott, dispute, threatened against
or involving the Company, or any predecessor entity, and none has occurred. No
representation question exists respecting the employees of the Company. No
collective bargaining agreement or modification thereof is currently being
negotiated by the Company. No grievance or arbitration proceeding is pending
under any expired or existing collective bargaining agreements of the Company.

z. Neither the Company nor, to the Company's knowledge, any
of its employees, directors or shareholders has taken, directly or indirectly,
any action designed to or which has constituted or which might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.

aa. Except as described in the Registration Statement and
financial statements included therein, the Company does not maintain or has not
maintained, sponsored or contributed to any program or arrangement that is an
"employee pension benefit plan," and "employee welfare benefit plan" or a
"multi-employer plan" as such terms are defined in Sections 3(2), 3(1) and
3(37), respectively of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") ("ERISA Plans"), except for the Company's 1999 Stock Option
Plan. The Company does not presently maintain or contribute to or at any time in
the past, maintained or contributed to a defined benefit plan, as defined in
Section 3(35) of ERISA. The Company has never completely or partially withdrawn
from a "multi-employer plan."

ab. Except as set forth in the Prospectus under "Certain
Transactions," the Company is not a party to any agreement with any officer,
director or shareholder of the Company, or any affiliate or associate of any
such person or entity which is required to be disclosed in the Prospectus
pursuant to Regulation S-B. Except as set forth in the Prospectus, to the
Company's knowledge, no officer, director or shareholder of the Company or any
"affiliate" or "associate" (as these terms are defined in Rule 405 promulgated
under the Regulations) of any such person or entity or the Company, has or has
had, either directly or indirectly, (i) an interest in any person or entity
which (A) furnishes or sells services or products which are furnished or sold or
are proposed to be furnished or sold by the Company, or (B) purchases from or
sells or furnishes to the Company, any goods or services, or (ii) a beneficial
interest in any contract or agreement to which the Company is a party or by
which it may be bound or affected.

ac. The minute books of the Company have been made available
to Underwriter's counsel and contain a complete summary of all meetings and
actions by unanimous consent of directors and shareholders since the time of
incorporation and reflect all transactions referred to in such minutes
accurately in all material respects.

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<PAGE> 8

ad. The number of Shares to be offered to the public pursuant
to the Registration Statement represents at least 20% of the issued and
outstanding shares of the Common Stock after giving effect to the conversion of
all convertible securities and the exercise of all outstanding options and
warrants (excluding the shares reserved for issuance under the Company's Stock
Option Plan, Overallotment Option and the Underwriter's Warrant), and any
securities issued with the Underwriter's prior written consent.

ae. The Company is in the process of reviewing its operations
and any third parties with which the Company has a material relationship to
evaluate the extent to which the business or operations of the Company will be
affected by the Year 2000 Problem. As a result of such review to date, the
Company has no reason to believe, and does not believe, that the Year 2000
Problem will have a material adverse effect or result in any material loss or
interference with the Company's business or operations. The "Year 2000 Problem,"
as used herein, means any significant risk that computer hardware or software
used in the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000.

af. Each officer and director of the Company and each record
owner of shares of Common Stock named in Schedule A hereto has agreed in writing
that such person will not, for a period of one year after the date of the
Prospectus (the "Lock-Up Period"), offer to sell, contract to sell, or otherwise
sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, "Securities") now
owned or hereafter acquired directly by such person or with respect to which
such person has or hereafter acquires the power of disposition, otherwise than
(i) as a bona fide gift or a distribution to limited partners, members or
partners or shareholders of such person, provided that the donees or
distributees thereof (as the case may be) agree in writing to be bound by the
terms of this restriction or (ii) with the prior written consent of the
Underwriter. The foregoing restriction has been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-Up Period, even if such Securities would be disposed
of by someone other than such holder. Such prohibited hedging or other
transactions would include any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including any put or call option) with
respect to any Securities or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from the Securities. Notwithstanding the
foregoing, this restriction shall not prohibit (i) the sale of Option Shares to
the Underwriters pursuant to this Agreement or (ii) resales of shares of Common
Stock acquired either in the public offering to which the Registration Statement
relates or in subsequent open-market purchases. Furthermore, such person also
has agreed and consented to the entry of stop transfer instructions with the
Company's transfer agent against the transfer of the Securities held by such
person except in compliance with this restriction. The Company has provided to
Dreier &

8
<PAGE> 9

Baritz, LLP, counsel for the Underwriter ("Underwriters' Counsel"), a complete
and accurate list of all security holders of the Company and the number and type
of securities held by each security holder. The Company has provided to
Underwriters' Counsel true, accurate and complete copies of all of the
agreements pursuant to which its officers, directors and shareholders have
agreed to such or similar restrictions (the "Lock-Up Agreements") presently in
effect or effected hereby. The Company hereby represents and warrants that it
will not release any of its officers, directors or other shareholders from any
Lock-Up Agreements currently existing or hereafter effected without the prior
written consent of the Underwriter.

ag. In accordance with the provisions of Section 517.075,
Florida Statutes, the Company represents and warrants that it does not now do
business nor has it ever done business in or with the government of Cuba

3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER. The
Underwriter represents and warrants to the Company that it is a member of the
NASD and registered as a broker/dealer with the SEC. There are no past, pending
or, to the best of the Underwriter's knowledge, threatened proceedings involving
the NASD, the Commission or any state regulatory authority which would impair
the ability of the Underwriter to conduct the Offering contemplated hereunder.

4. PURCHASE, SALE AND DELIVERY OF THE SECURITIES AND
UNDERWRITER'S WARRANTS.

a. On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to sell to the Underwriter 2,250,000 Shares, and the Underwriter agrees
to purchase from the Company such 2,250,000 Shares at a purchase price of 90% of
the public offering price per Share at the time described herein to be sold by
the Underwriter, at an initial purchase price of $7.00 per Share.

b. On the Closing Date, the Company shall issue and sell to
the Underwriter, the Underwriter's Warrants at a total purchase price of $0.001
per warrant, which warrants shall entitle the holders thereof to purchase an
aggregate of up to 225,000 Shares. All of the Underwriter's Warrants shall be
exercisable for a period of four (4) years commencing one year from the date of
the Prospectus at an initial exercise price of 120% of the Offering Price per
Share. The Underwriter's Warrant Agreement and form of Warrant Certificate shall
be substantially in the form filed as Exhibit 4.1 to the Registration Statement.

c. Payment for the Underwriter's Warrants shall be made on the
Closing Date. Payment for the Firm Securities shall be made on the Closing Date
at the Underwriter's election by certified or bank cashier's check in New York
Clearing House funds, payable to the order of the Company at the offices of the
Underwriter or at such other place as agreed upon by the Underwriter or at such
other place as agreed upon by the Underwriter and the Company by wire transfer,
upon delivery of certificates (in form and substance satisfactory to the
Underwriter) representing the Securities or by confirmation of electronic
transfer of the Securities by or on behalf of the Company

9
<PAGE> 10

to the Underwriter, through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to the Underwriter at
least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). Delivery and payment for the Firm Securities shall be made at 10:00
a.m. New York time, on or before the fifth business day following each of the
closings or at such other time as shall be agreed upon by the Underwriter and
the Company. The hour and date of delivery and payment for the Firm Securities
are called the "Closing Date." The Firm Securities shall be registered in such
name or names and in such authorized denominations as the Underwriter may
request in writing at lease two (2) full business days prior to the Closing
Date. The Company will permit the Underwriter to examine and package any
certificates representing the Firm Securities for delivery, at least one (1)
full business day prior to the Closing Date.

d. The Company shall not be obligated to sell or deliver Firm
Securities except upon tender of payment by the Underwriter for the Firm
Securities.

5. PUBLIC OFFERING. The Underwriter is to make a public offering
of the Firm Securities, on a firm commitment basis. The Securities are to be
initially offered to the public at the offering price set forth on the cover
page of the Prospectus (such price being hereinafter called the "Public Offering
Price"). The Underwriter may, at its own expense, enter into one or more
agreements as the Underwriter, in its sole discretion, deems advisable, with one
or more broker-dealers who shall act as dealers in connection with such public
offering.

6. COVENANTS OF THE COMPANY. The Company covenants and agrees
that it will:

a. Use its best efforts to cause the Registration Statement to
become effective and will notify the Underwriter immediately and confirm the
notice in writing, (i) when the Registration Statement and any post-effective
amendment thereto becomes effective, (ii) of the issuance by the SEC of any stop
order or of the initiation, or the threatening, of any proceeding for that
purpose, (iii) of the issuance by any state securities commission of any
proceedings for the suspension of the qualification of the Shares, or the
Underwriter's Warrants for offering or sale in any jurisdiction or of the
initiation, or the threatening, of any proceeding for that purpose, and (iv) of
the receipt of any comments from the SEC. If the SEC or any state securities
commission shall enter a stop order or suspend such qualification at anytime,
the Company will make every reasonable effort to obtain promptly the lifting of
such order.

b. File the Prospectus (in form and substance satisfactory to
the Underwriter) or transmit the Prospectus by a means reasonably calculated to
result in filing with the SEC in accordance with Rule 424.

c. During the time when a prospectus is required to be
delivered under the Act,

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<PAGE> 11

use all reasonable efforts to comply with all requirements imposed upon it by
the Act and the Exchange Act, as now and hereafter amended and by the
Regulations, as from time to time are in force, so far as necessary to permit
the continuance of sales of or dealings in the Shares and the Underwriter's
Securities in accordance with the provisions hereof and the Prospectus. If at
any time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which, in the
opinion of counsel for the Company or counsel for the Underwriter the
Prospectus, as then amended or supplemented, includes an untrue statement of a
material fact or omits to state any material fact required to be stated in light
of the circumstances under which they were made, not misleading or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will notify the Underwriter promptly and prepare and file with the SEC
an appropriate amendment or supplement in accordance with Section 10 of the Act.

d. Deliver to the Underwriter, without charge, such number of
copies of each Preliminary Prospectus and the Prospectus as the Underwriter may
reasonably request and, as soon as the Registration Statement or any amendment
or supplement thereto becomes effective, deliver to the Underwriter two signed
copies of the Registration Statement, including exhibits, and all post-effective
amendments thereto and copies of all exhibits filed therewith or incorporated
therein by reference and signed copies of all consents of certified experts.

e. Endeavor in good faith, in cooperation with the
Underwriter, at or prior to the time the Registration Statement becomes
effective, to qualify the Shares and the Underwriter's Securities for offering
and sale under the securities' laws of such jurisdictions as the Underwriter may
reasonably designate, provided that no such qualification shall be required in
any jurisdiction where, as a result thereof, the Company would be subject to
service of general process or to taxation as a foreign corporation doing
business in such jurisdiction. In each jurisdiction where such qualification
shall be effected, the Company will, unless the Underwriter agrees that such
action is not at the time necessary or advisable, use all reasonable efforts to
file and make such statements or reports at such times as are or may reasonably
be required by the laws of such jurisdiction.

f. Make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full calendar
month following the Closing Date, an earnings statement (which need not be
certified by independent public or independent certified public accounts unless
required by the Act or the Regulations, but which shall satisfy the provisions
of Section 11(a) of the Act) covering a period of at least twelve consecutive
months beginning after the Effective Date.

g. For a period of five years from the Effective Date, furnish
to the Underwriter copies of such financial statements and other periodic and
special reports as the Company from time to time furnishes generally to holders
of any class of its securities, and promptly furnish to the Underwriter (i) a
copy of each periodic report the Company shall be required to file with the SEC,
(ii) a copy of each press release and every news item and article with respect
to the Company or any Subsidiary or their respective affairs which was released
by the Company, (iii) a copy of each Form 8-K or Schedules 13D, 13G, 14D-1 or
13E-4 received or prepared by the Company, and (iv) such

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<PAGE> 12

additional documents and information with respect to the Company or any
Subsidiary and their respective affairs or any future subsidiaries of the
Company as the Underwriter may from time to time reasonably request.

h. Apply the net proceeds from the offering received by it in
a manner consistent with the caption "USE OF PROCEEDS" in the Prospectus.

i. Deliver to the Underwriter, prior to filing, any amendment
or supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and not file any such amendment or supplement to which
the Underwriter shall reasonably object, after being furnished such copy, in
writing with reasonable specificity as to the nature and extent of any
objection.

j. Furnish to the Underwriter as early as practicable prior to
the date hereof and the Closing Date, but not later than two (2) full business
days prior thereto, a copy of the latest available unaudited interim financial
statements of the Company (which in no event shall be as of a date more than
thirty (30) days prior to the Effective Date) which have been read by the
Company's independent accountants as stated in their letter to be furnished to
the Underwriter pursuant to Section 8(g) hereof.

k. For a period of three (3) years from the Closing Date,
provide the Underwriter, upon its request, at the Company's sole expense, with
access to daily consolidated financial transfer sheets and weekly Depository
Trust Company reports, relating to the Common Stock, such Common Stock reports
to be transmitted by facsimile and designate American Securities Transfer &
Trust Company, Inc., as transfer agent for the Company's securities or such
other transfer agent mutually agreeable by the Company and the Underwriter.

l. For a period of three (3) years after the Effective Date,
engage an advisor (the "Advisor") designated in writing by the Underwriter to
the Board of Directors of the Company (the "Board"), if requested by the
Underwriter. In the event the Underwriter shall not have designated such
individual at the time of any meeting of the Board of such person is unavailable
to serve, the Company shall notify the Underwriter of each meeting of the Board.
All individual designated by the Underwriter shall receive all notices and other
correspondence and communications sent by the Company to members of the Board.
In addition, such Advisor shall be entitled to receive reimbursement for all
reasonable costs incurred in attending such meetings, including, but not limited
to food, lodging and transportation. The Company further agrees that, during
said three (3) year period, it shall schedule not less than four (4) formal and
"in person" meetings of its Board of Directors in each such year at which
meetings such Advisor shall be permitted to attend as set forth herein; said
meetings shall be held quarterly each year and thirty (30) days advance notice
of such meetings shall be given to the Advisor. Further, during such three (3)
year period, the Company and its principal stockholders shall give notice to the
Underwriter with respect to any proposed acquisitions, mergers, reorganizations
or other similar transactions.

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<PAGE> 13
The Company agrees to indemnify and hold the Underwriter and
such Advisor harmless against any and all claims, actions, damages, costs and
expenses, and judgments arising solely out of the attendance and participation
of the Advisor at any such meeting described herein. In the event the Company
maintains a liability insurance policy affording coverage for the acts of its
officers and directors, it agrees, if possible (without any additional premium
or other related cost to the Company) to include the Advisor as an insured under
such policy.

m. Until the sooner of (i) seven (7) years from the date
hereof, or (ii) the sale to the public of the Underwriter's Warrant Shares, the
Company will not take any action or actions which may prevent or disqualify the
Company's use of Form SB-2 (or other appropriate form) for the registration
under the Act of the Underwriter's Securities.

n. For a period of five (5) years from the date hereof, use
its best efforts to maintain the quotation by Nasdaq of the Common Stock.

o. Supply the Underwriter with one, and Dreier & Baritz,
counsel to the Underwriter, with two (2) bound volumes of the underwriting
materials within a reasonable time after the latest Closing Date.

p. For a period of two years from the Effective Date, not
issue any shares of Common Stock or Preferred Stock or any warrants, options or
other rights to purchase Common Stock or Preferred Stock at a price less than
120% of the initial public offering price without the prior written consent of
the Underwriter; provided, however, that the Company may issue securities upon
the conversion of any securities outstanding on the date hereof pursuant to the
terms thereof and upon the exercise of any warrants or options outstanding on
the date hereof pursuant to the terms thereof.

q. So long as the Shares or Underwriter's Securities are
registered under the Exchange Act, the Company will hold an annual meeting of
shareholders for the election of directors within 180 days after the end of each
of the Company's fiscal years or at such other date as mutually agreed upon by
and between the Underwriter and the Company, and, within 150 days after the end
of each of the Company's fiscal years will provide the Company's shareholders
with the audited financial statements of the Company as of the end of the fiscal
year just completed prior thereto. Such financial statements shall be those
required by Rule 14a-3 under the Exchange Act and shall be included in an annual
report pursuant to the requirements of such Rule.

r. Enter into the Underwriter's Warrant Agreement in
substantially the form filed as Exhibit 4.1 to the Registration Statement.

s. The Company has or shall purchase term keyman insurance on
the lives of Andrew S. Allen and Farshid Tafazzoli in the amount of $2,000,000
naming the Company as the sole beneficiary thereof, as soon as possible after
the Closing Date.

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<PAGE> 14

t. Take all necessary and appropriate actions to be included
in Standard and Poor's Corporation Descriptions.

7. PAYMENT OF EXPENSES.

a. The Company hereby agrees to pay all reasonable expenses
(other than fees of counsel to the Underwriter, except as provided in (iii)
below) in connection with the offering, including but not limited to, (i) the
preparation, printing, filing and mailing (including the payment of postage with
respect to such mailing) of the Registration Statement and the Prospectus and
the printing and mailing of this Agreement and related documents, including the
cost of all copies thereof and of the Preliminary Prospectus and of the
Prospectus and any amendments thereof or supplements thereto supplied to the
Underwriter in quantities of herein above state, (ii) the printing, engraving,
issuance, and delivery of the Shares and the Underwriter's Warrants, including
any transfer or other taxes payable thereon, (iii) the qualification of the
Shares and the Underwriter's Warrants under state or foreign securities or "Blue
Sky" laws and determination of the status of such securities under legal
investment laws, including the costs of printing and mailing the "Preliminary
Blue Sky Memorandum," and "Legal Investments Survey," if any, and fees of
counsel for the Underwriter (which fees shall be payable by the Company in the
sum of up to $25,000) and disbursements of counsel for the Underwriter, (iv)
advertising costs and expenses including but not limited to the costs and
expenses in connection with the "road show", information meetings and
presentations, bound volumes and "tombstones" in publications selected by the
Underwriter and prospectus memorabilia, (v) costs and expenses in connection
with due diligence investigations, including but not limited to the fees of any
independent counsel or consultant retained, and all reasonable travel and
lodging expenses incurred by you and/or counsel to the Underwriter in connection
with visits to, and examination of, the Company's premises, (vi) fees and
expenses of the transfer agent and warrant agent, (vii) applications for
assignments of a rating of the Securities by qualified rating agencies, and
(viii) the fees payable to NASD and Nasdaq. The $25,000 payment to counsel for
the Underwriter shall not include fees of special counsel if same is required to
be incurred in a merit review state which may require local counsel. In this
connection, Blue Sky applications shall be made in such states and jurisdictions
as shall be requested by the Underwriter. Payments with regard to items (iii),
(iv), and (v) shall be made on or before the Closing Date. The Underwriter shall
provide the Company with a written statement itemizing such expenses. In
addition to the foregoing, the Company shall subscribe to Blue Sky Data, a data
and reporting concern, for the purpose of tracking and maintaining compliance
with all applicable Blue Sky laws.

b. The Company additionally agrees to pay to the Underwriter
an aggregate non-accountable expense allowance in addition to the expenses
payable, pursuant to Section 6(a), equal to three (3%) percent of the gross
proceeds received by the Company from the sale of Firm Securities and, on its
part, the Underwriter agrees to deduct from the said three (3%) percent
allowance $40,000 previously paid by the Company to the Underwriter as an
advance against payment due pursuant to the provisions of this Section 6(b). In
the event the Underwriter terminates the offering or is unable to consummate the
offering within one year of the date hereof, the advances toward the
non-accountable expenses shall be non-refundable and deemed fully earned in
connection

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<PAGE> 15

with its due diligence efforts and all services provided to the date of such
termination.

8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriter to purchase and pay for the Securities, as provided herein,
shall be subject to the continuing accuracy of the representations and
warranties of the Company as of the date hereof and as of the Closing Date, to
the accuracy of the statements of officers of the Company made pursuant to the
provisions hereof and to the performance by the Company of its obligations
hereunder and to the following conditions:

a. The Registration Statement shall have become effective not
later than 5:00 p.m., New York time, on the date of this Agreement or such later
date and time as shall be consented to in writing by you, and, at the Closing
Date, no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or contemplated by the SEC and any request on the
part of the SEC for additional information shall have been complied with to the
reasonable satisfaction of Underwriter's Counsel.

b. At the Closing Date, the Underwriter shall have received
the favorable opinion of Broad and Cassel, counsel to the Company dated the
Closing Date, addressed to the Underwriter and in form and substance
satisfactory to Underwriter's Counsel, to the effect that:

(1) the Company (A) has been incorporated under the Florida
Business Corporations Act and its status is active, (B) is qualified
and in good standing as a foreign corporation in each jurisdiction in
which, to such counsel's knowledge, its ownership or leasing of any
properties or the character of its operations requires such
qualifications, except where failure to do so would have a material
adverse effect on the Company, and (C ) has all requisite power and
authority to own or lease its properties and conduct its business as
described in the Prospectus;

(2) the Shares, Underwriter's Warrants and the Common Shares
have been duly authorized and are, or in the case of the Underwriter's
Warrants, will be, upon exercise and payment therefor, validly issued,
fully paid and non-assessable securities of the Company, and the
holders thereof are not and will not be subject to personal liability
by reason of being such holders; none of the Shares, Underwriter's
Warrants or the Common Shares (i) are subject to any preemptive or
similar contractual rights of any stockholder of the Company by reason
of the Company's certificate of incorporation, as amended, or any
applicable statute; or (ii) are subject to any preemptive, or, to such
counsel's knowledge, similar contractual rights of any stockholder of
the Company by reason of any agreement to which the Company is a party;
all corporate action required to be taken for the authorization, issue
and sale of such securities has been duly and validly taken; if issued,
the Underwriter's Warrants shall constitute, valid and binding
obligations of the Company to issue and sell, upon exercise thereof and
payment therefor, the number and type of securities of the Company
called for thereby; and the certificates representing the Shares and
the

15
<PAGE> 16

Underwriter's Warrant are in due and proper form;

(3) except as described in the Prospectus, to such counsel's
knowledge, the Company does not own an interest in any corporation,
partnership, joint venture, trust or other business entity.

(4) this Agreement and the Underwriter's Warrant Agreement
have each been duly and validly authorized, executed and delivered by
the Company, assuming due execution by the parties thereto other than
the Company, and are valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective
terms, except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (B) as enforceability of any indemnification provision may
be limited under the federal and state securities laws, and C) that the
remedy of specific performance, injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought;

(5) to such counsel's knowledge, there are no contracts or
other documents required to be described in the Prospectus or to be
filed as exhibits to the Registration Statement other than those
described and filed as required, and to such counsel's knowledge, there
are no statutes, rules or regulations or legal governmental proceedings
required to be described in the Prospectus which are not described as
required and no legal or governmental proceedings pending or threatened
which could materially adversely affect the business or financial
conditions of the Company which have not been disclosed in the
Prospectus;

(6) the Registration Statement is effective under the Act, and
to such counsel's knowledge, no proceedings for a stop order are
pending or, to such counsel's knowledge threatened under the Act;

(7) all consents, approvals, authorizations or orders of any
court or governmental agency or body (other than such as may be
required under Blue Sky laws, as to which no opinion need be rendered)
required in connection with the consummation of the transactions
contemplated by this Agreement have been obtained and are in effect;

(8) neither the execution and delivery of this Agreement, the
Underwriter's Warrant Agreement nor the issue and sale of the Shares,
Underwriter's Warrants or the Common Shares, nor the consummation of
the transactions contemplated hereby, nor the compliance by the Company
with the terms and provisions hereof, constitute a default under, any
agreement that the Company is a party to, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any mortgage, deed of
trust, note, indenture or loan or credit agreement or any other
agreement or instrument known to such counsel (after due inquiry) to
which the Company is a party or by which the Company may be bound or
which any of the property or assets of

16
<PAGE> 17

the Company is subject; nor will such action result in any violation
of the provisions of the Articles of Incorporation or the By-laws of
the Company, or any statute or any order, rule or regulation
applicable to the Company of any court or of any federal, state or
other regulatory authority or other governmental body having
jurisdiction over the Company;

(9) the Registration Statement, each preliminary Prospectus
and the Prospectus and any post-effective amendments or supplements
thereto (other than the financial statements included therein, as to
which no opinion need be rendered) comply as to form in all material
respects with the requirements of the Act and Regulations. Such counsel
shall state that such counsel has participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accounts for the Company and representatives of
the Underwriter at which the contents of the Registration Statement,
the Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and Prospectus, on the basis of the
foregoing, no facts have come to the attention of such counsel which
lead them to believe that either the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective or the Prospectus as of the date of such opinion
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading (it being understood that such
counsel need express no opinion with respect to the financial
statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus);

(10) the terms and provisions of the Shares, the Underwriter's
Warrants, the Common Shares and all other securities issued or issuable
by the Company conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus;

(11) to such counsel's knowledge, the Company is not in breach
of, or in default under, any term or provision of any indenture,
mortgage, deed of trust, lease, note, loan or credit agreement or any
other agreement or instrument evidencing an obligation for borrowed
money, or any other agreement or instrument to which the Company is a
party or by which the Company or any of their respective properties may
be bound or affected; the Company is not in violation of any term or
provision of its Articles of Incorporation or By-laws, and the Company
is not in violation of any franchise, license, permit, judgment,
decree, order, statute, rule or regulation, except as referred to in
the Prospectus;

(12) the statements in the Prospectus under "RISK FACTORS",
"BUSINESS", "CERTAIN TRANSACTIONS", "MANAGEMENT" and "DESCRIPTION OF
SECURITIES" have been reviewed by such counsel, and insofar as they
refer to statements of law, descriptions of statutes, licenses, rules
or regulations or legal conclusions are correct in all material
aspects;

17
<PAGE> 18

(13) the authorized and outstanding capital stock of the
Company is as set forth under the caption stock of the Company is as
set forth under the caption "CAPITALIZATION" in the Prospectus; all of
the issued and outstanding capital stock, options and warrants of the
Company have been duly authorized and validly issued and all of the
issued and outstanding shares of capital stock of the Company are fully
paid and non-assessable; and none of such securities or interests were
issued in violation of the preemptive rights or similar rights of any
holder of any security of interest of the Company or of any applicable
federal or state securities law;

(14) to such counsel's knowledge, the Company is conducting
its operations in compliance with applicable federal, state and local
laws, statutes, rules and regulations;

(15) to such counsel's knowledge, the Company has good and
marketable title to, or valid and enforceable leasehold estates in the
item of real and personal property stated in the Prospectus to be owned
or leased by it as lessee, free and clear of all liens, encumbrances,
claims, security interests, defects and restrictions of any material
nature whatsoever, other than those referred to in the Prospectus and
liens for taxes not yet due and payable;

(16) to such counsel's knowledge, there are no claims,
payments, issuances, arrangements or understandings for services in the
nature of a finder's or origination fee with respect to the sale of the
Securities hereunder or financial consulting arrangement or any other
arrangements, agreements, understandings, payments or issuances that
may affect the Underwriter's compensation, as determined by the NASD;

(17) to such counsel's knowledge, persons listed under the
caption "PRINCIPAL STOCKHOLDERS" in the Prospectus are the respective
"beneficial owners" (as such phrase is defined in Regulation 13d-3
under the Exchange Act) of the shares of Common Stock set forth
opposite their respective names thereunder as and to the extent set
forth herein;

(18) to such counsel's knowledge, other than as set forth in
the Prospectus, no person, corporation, trust, partnership, association
or other entity has the right to include and/or register any securities
of the Company in the Registration Statement therefore; and

In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such option, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to Underwriter's
counsel) of other counsel reasonably acceptable to Underwriter's counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates and written statements of responsible officers of
the Company and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company, provided that copies of any
such statements or certificates shall be delivered to Underwriter's counsel if
requested. The opinion of such counsel for the Company shall state that

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<PAGE> 19

the opinion of any such other counsel is in form satisfactory to such counsel
and, in their opinion, the Underwriter and they are justified in relying
thereon.

c. On or prior to the Closing Date, counsel for the
Underwriter shall have been furnished such documents, certificates and opinions
as they may reasonably require for the purpose of enabling them to review or
pass upon the matters referred to in Section 8(b.), or in order to evidence the
accuracy, completeness or satisfaction of any of the representation, warranties
or conditions herein contained.

d. Prior to the Closing Date, (i) there shall have been no
material adverse change nor development involving a prospective change in the
condition or prospects of the business activities, financial or otherwise, of
the Company from the latest dates as of which such condition is set forth in the
Registration Statement and Prospectus; (ii) there shall have been no
transaction, not in the ordinary course of business, entered into by the Company
from the latest date as of which the financial condition of the Company is set
forth in the Registration Statement and Prospectus which is materially adverse
to the Company; (iii) the Company shall not be in default under any provision of
any instrument relating to any outstanding indebtedness which default would have
a material adverse effect on the Company; (iv) no material amount of the assets
of the Company shall have been pledged or mortgaged, except as set forth in the
Registration Statement and Prospectus; (v) no action, suit or proceeding, at law
or in equity, shall have been pending or threatened against the Company wherein
any unfavorable result or decision could materially adversely affect any of
their respective properties or business before or by any court or federal or
state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business,
operations, prospects of financial condition or income of the Company, except as
set forth in the Registration Statement and Prospectus; (vi) no stop order shall
have been issued under the Act and no proceedings thereof shall have been
initiated or threatened by the SEC; and (vii) the market for securities in
general or for the Company's Shares in particular, or political, financial or
economic conditions shall have materially changed from those reasonably
foreseeable as of the date hereof as to render it impracticable in the
Underwriter's judgment to make a public offering of the Shares, or there has
been a material adverse change in market levels for securities in general (or
those of the Company in particular) or financial or economic conditions which
render it inadvisable in the Underwriter's judgment to proceed.

e. At the Closing Date, the Underwriter shall have received a
certificate of the Company signed by the Chairman of the Board or the President
and Secretary of the Company, dated the Closing Date to the effect that the
conditions set forth in subsections d. (i) through (vi) above have been
satisfied and that, as of the Closing Date, the representations and warranties
of the Company set forth in Section 2 hereof are true and correct.

f. By the Closing Date, the Underwriter shall have received
clearance from NASD as to the amount of compensation allowable or payable to the
Underwriter, as described in the Registration Statement.

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<PAGE> 20

g. At the time this Agreement is executed, and at the Closing
Date, the Underwriter shall have received a letter, addressed to the Underwriter
and in form and substance satisfactory in all respects (including the
non-material nature of the changes or decreases, if any, referred to in clause
(iii) below) to the Underwriter and to Dreier & Baritz, counsel for the
Underwriter, from Ahearn, Jasco + Company, P.A. dated, respectively, as of the
date of this Agreement and as of the Closing Date.

(1) confirming that they are independent accountants with
respect to the Company within the meaning of the Act and the applicable
Regulations, appropriately qualified to perform the services
contemplated by their engagement;

(2) stating that in their opinion the financial statements of
the Company included in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable
accounting requirements of the Act and the published Regulations
thereunder;

(3) stating that, on the basis of a reading of the latest
available minutes of the stockholders and board of directors and the
various committees of the board of directors of the Company,
consultations with officers and other employees of the Company
responsible for financial and accounting matters and other specified
procedures and inquiries, nothing has come to their attention which
would lead them to believe that (A) either the audited financial
statements for the years ended January 31, 1998 and 1999 of the Company
in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the Act, and
the Regulations or are not fairly presented in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements of the Company included in the Registration
Statement, (B) at a date not later than five (5) days prior to the
Effective Date, there was any change in the capital stock or long-term
debt of the Company, or any decrease in the stockholders' equity of the
Company as compared with amounts shown in the January 31, 1999 balance
sheet included in the Registration Statement, other than as set forth
in or contemplated by the Registration Statement, or, if there was any
decrease, setting forth the amount of such decrease, and (C) during the
period from ____________ to a specified date not more than five (5)
days prior to the Effective Date there was any decrease in net
revenues, increase in net losses or increases in net losses per common
share of the Company, in each case as compared with the corresponding
period beginning ______________ other than as set forth in or
contemplated by the Registration Statement, or, if there was any such
decrease, setting forth the amount of such decrease;

(4) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, statements and
other financial information pertaining to the Company set forth in the
Prospectus in each case to the extent that such amounts, numbers,
percentages, statements and information may be derived from the general
account records, including worksheets, of the Company and excluding any
questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified

20
<PAGE> 21

readings, inquiries and other appropriate procedures (which procedures
do not constitute an examination in accordance with generally accepted
auditing standards) set forth in the letter and found them to be in
agreement; and

(5) statements as to such other matters incident to the
transaction contemplated hereby as the Underwriter may reasonably
request.

h. All proceedings taken in connection with the authorization,
issuance or sale of the Shares, the Underwriter's Warrants and the Common Shares
as herein contemplated shall be satisfactory in form and substance to the
Underwriter and to Underwriter's Counsel.

i. On the Closing Date, there shall have been duly tendered to
you for your account the appropriate number of Securities and individually for
your own account the Underwriter's Warrants.

j. No order suspending the sale of the Securities in any
jurisdiction designated by you pursuant to Section 5(d) hereof shall have been
issued on the Closing Date (unless requested by the Underwriter), and no
proceedings for that purpose shall have been instituted or to its knowledge or
that of the Company shall be contemplated.

Any certificate signed by any officer of the Company and
delivered to the Underwriter or to counsel to the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to the
statements made therein. If any condition to the Underwriter's obligations
hereunder to be fulfilled prior to or at the Closing Date is not so fulfilled,
the Underwriter may terminate this Agreement or, if the Underwriter so elects,
may waive any such conditions which have not been fulfilled or extend the time
for their fulfillment.

9. INDEMNIFICATION.

(1) The Company shall indemnify and hold the Underwriter, and
each person, if any, who controls the Underwriter ("Controlling Person") within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act),
harmless against any and all liabilities, claims, lawsuits, including any and
all awards and/or judgments to which it may become subject under the Act, the
Exchange Act or any other federal or state statute, at common law or otherwise,
insofar as said liabilities, claims and lawsuits (including awards and/or
judgments) arise out of or are in connection with the Registration Statement,
Prospectus and related Exhibits filed under the Act. In addition, the Company
shall also indemnify and hold the Underwriter harmless against any and all costs
and expenses, including reasonable counsel fees, incurred or relating to the
foregoing.

The Underwriter shall give the Company prompt notice of
any such liability, claim or lawsuit which the Underwriter contends is the
subject matter of the Company's indemnification, and the Company thereupon shall
be granted the right to take any and all necessary and proper action, at its
sole cost and expense, with respect to such liability, claim and lawsuit,

21
<PAGE> 22

including the right to settle, compromise and dispose of such liability, claim
or lawsuit, excepting therefrom any and all proceedings or hearings before any
regulatory bodies and/or authorities.

The Underwriter shall indemnify and hold the Company, and
each Controlling Person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, harmless against any
and all liabilities, claims, lawsuits, including any and all awards and/or
judgments to which it may become subject under the Act, the Exchange Act or any
other federal or state statute, at common law or otherwise, insofar as said
liabilities, claims and lawsuits (including awards and/or judgments) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact required to be stated or necessary to make the statement therein,
not misleading, which statement or omission was made in reliance upon
information furnished in writing to the Company by or on behalf of the
Underwriter for inclusion in the Registration Statement or Prospectus or any
amendment or supplement thereto. In addition, the Underwriter shall also
indemnify and hold the Company harmless against any and all costs and expenses,
including reasonable counsel fees, incurred or relating to the foregoing.

The Company shall give to the Underwriter prompt notice
of any such liability, claim or lawsuit which the Company contends is the
subject matter of the Underwriter's indemnification and the Underwriter
thereupon shall be granted the right to take any and all necessary and proper
action, at its sole cost and expense, with respect to such liability, claim and
lawsuit, including the right to settle, compromise or dispose of such liability,
claim or lawsuit, excepting therefrom any and all proceedings or hearings before
any regulatory bodies and/or authorities.

In order to provide for just and equitable contribution
under the Act in any case in which (i) any person entitled to indemnification
under this Section 9 makes claim for indemnification pursuant hereto but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced
notwithstanding the fact that this Section 9 provides for indemnification in
such case, or (ii) contribution under the Act may be required on the part of any
such person for which indemnification is provided under this Section 9, then,
and in each such case, the Company and the Underwriter shall contributed to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after any contribution from others) in such proportion taking into
consideration the relative benefits received by each party from the offering
covered by the Prospectus (taking into account the portion of the proceeds of
the offering realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was assessed,
the opportunity to correct and prevent any statement or omission and other
equitable considerations appropriate under the circumstances; provided, however,
that notwithstanding the above in no event shall the Underwriter be required to
contribute any amount in excess of 10% of the initial public offering price of
the Securities; and provided, that, in any such case, no person guilty of a
fraudulent misrepresentation (within the meaning of Section 11 (f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

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<PAGE> 23

Within fifteen (15) days after receipt of any party to
this Agreement (or its representative) of notice of the commencement of any
action, suit or proceeding, such party will, if a claim for contribution in
respect thereof is to be made against another party (the "Contributing Party"),
notify the Contributing Party of the commencement thereof, but the omission so
to notify the Contributing Party will not relive it from any liability which it
may have to any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and such party
notifies a Contributing Party of his or its representatives of the commencement
thereof within the aforesaid fifteen (15) days, the Contributing Party will be
entitled to participate therein with the notifying party and any other
Contributing Party similarly notified. Any such Contributing Party shall not be
liable to any party seeking contribution on account of any settlement of any
claim, action or proceeding effected by such party seeking contribution without
the written consent of such Contributing Party. The indemnification provisions
contained in this Section 9 are in addition to any other rights or remedies
which either party hereto may have with respect to the other or hereunder.

10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except
as the context otherwise required, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date and such representations,
warranties and agreements of the Underwriter and the Company, including the
indemnity agreements contained in Section 9 hereof, shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
any of the Underwriter, the Company or any controlling person, and shall survive
termination of this Agreement or the issuance and delivery of the Securities to
the Underwriter until the earlier of the expiration of any applicable statue of
limitations and the seventh anniversary of the Closing Date, at which time the
representations, warranties and agreements shall terminate and be of no further
force and effect.

11. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION HEREOF.

(1) This Agreement shall become effective at 9:30 a.m., New
York time, on the first full business day following the day on which the
Registration Statement becomes effective or at the time of the initial public
offering by the Underwriter of the Securities, whichever is earlier. The time of
the initial public offering, for the purpose of this Section 11, shall mean the
time, after the Registration Statement becomes effective, of the release by the
Underwriter for publication of the first newspaper advertisement which is
subsequently published relating to the Securities or the time, after the
Registration Statement becomes effective, when the Securities are first released
by the Underwriter for offering by the Underwriter or dealers by letter or
telegram, whichever shall first occur. The Underwriter may prevent this
Agreement from becoming effective without liability to any other party, except
as noted below, by giving the notice indicated below in this Section 11 before
the time this Agreement becomes effective. The Underwriter agrees to give the
undersigned notice of the commencement of the offering described herein.

(2) The Underwriter shall have the right to terminate this
Agreement if any of the conditions enumerated in Section 8 are not fulfilled or
waived by the Underwriter on or before any

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<PAGE> 24

Closing Date.

(3) If the Underwriter elects to prevent this Agreement from
becoming effective or to terminate this Agreement as provided in this Section
11, the Company shall be notified on the same day as such election is made by
the Underwriter by telephone or telegram, confirmed by letter.

(4) Anything herein to the contrary notwithstanding, the
Underwriter shall retain the initial non-refundable $40,000 advance against
expenses, previously paid.

Notwithstanding any contrary provision contained in this
agreement, any election hereunder or termination of this Agreement, and whether
or not this Agreement is otherwise carried out, the provisions of Section 9
shall not be in any way affected.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

Witnesses: onlinetradinginc.com corp.

By:
- ---------------------------- ---------------------------------
Name:
-------------------------------
Title:
- ---------------------------- ------------------------------

WERBEL-ROTH SECURITIES, INC.

By:
- ---------------------------- ---------------------------------
Name:
- ---------------------------- -------------------------------
Title:
- ---------------------------- ------------------------------

<PAGE> 1
EXHIBIT 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement is made on the 1st day of February 1999,
between onlinetradinginc.com corp. ("Employer"), whose principal place of
business at 2700 N. Military Trail, Suite 200, Boca Raton, Florida 33431, and
FARSHID TAFAZZOLI ("Employee").

WHEREAS, Employer is actively engaged in the business of a securities
broker dealer; and,

WHEREAS, Employer wishes to employ Employee and Employee wishes to be
employed pursuant to the terms of this Employment Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements
contained in this Employment Agreement, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound, agree as follows:

Article 1
Employment of Employee

Employer agrees to employ Employee, and Employee accepts employment
with Employer, on and subject to the terms and conditions set forth in this
Employment Agreement.

Article 2
Position of Employee

Employer agrees to employ Employee to act as Employer's Chief
Information Officer.

Article 3
Place of Employment

Section 3.1. PLACE OF EMPLOYMENT. Employee shall be based at Employer's
principal office at 2700 N. Military Trail, Suite 200, Boca Raton, Florida 33431
and shall not be required to travel away from that office on business more than
fourteen (14) days during a calendar year. Employer agrees that during the term
of this Employment Agreement it shall not assign Employee to work at any
location which is more than ten (10) miles from said principal office without
Employee's consent.

Section 3.2. MOVING EXPENSES. If Employer relocates its principal
office more than ten (10) miles from its current principal office, or requests
that Employee relocates to one of its offices which is more than ten (10) miles
from its current principal office, and Employee consents to relocate to that new
location, Employer shall promptly pay or reimburse Employee for all reasonable
moving expenses incurred by Employee in connection with the relocation plus an
amount to reimburse Employee for any federal and state income taxes that it has
to pay on amounts reimbursed. Employer also shall indemnify Employee against any
loss incurred in connection with the sale of Employee's principal residence. The
amount of any loss shall be

<PAGE> 2

determined by taking the difference between the average of two appraisal prices
set by two independent appraisers agreed to by Employer and Employee and the
actual sales price of Employee's principal residence.

Article 4
Compensation of Employee

Section 4.1. BASE SALARY. For all services rendered by Employee under
this Employment Agreement, Employer agrees to pay Employee an annual base salary
of $200,000, which shall be payable to Employee in such installments, but not
less frequently than monthly, as are consistent with Employee's practice for its
other Employees. Employee's base salary shall be reviewed at least once a year
by Employer and shall be increased at a minimum by the percentage increase in
the Consumer Price Index for the previous year.

Section 4.2. INCENTIVE COMPENSATION. In addition to the base salary,
Employee shall be entitled to receive incentive compensation, as determined by
Employer in accordance with Employer's Incentive Compensation Plan.
Notwithstanding the foregoing, Employee agrees the Employer will not pay and the
Employee will not receive any bonuses until the earlier of (i) 24 months from
the date of this Agreement and (ii) such time as Employer earns $3,300,000 in
pre-tax earnings in any fiscal year. Thereafter, Employee acknowledges and
agrees that, for the fiscal years ended January 31, 2000, January 31, 2001, and
January 31, 2002, the total amount of bonuses payable to all of Employee, Andrew
Allen, Steve zum Tobel, Derek Hernquist and Benedict Gambino shall not exceed in
the aggregate 5% of pre-tax earnings in each of such fiscal years.

Section 4.3. REIMBURSEMENT FOR BUSINESS EXPENSES. Employer shall
promptly pay or reimburse Employee for all reasonable business expenses incurred
by Employee in performing Employee's duties and obligations under this
Employment Agreement, but only if Employee properly accounts for expenses in
accordance with Employer's policies.

Article 5
Vacations and Other Paid Absences

Section 5.1. VACATION DAYS. Employee shall be entitled to forty-five
(45) paid vacation days each calendar year during the term of this Employment
Agreement. During the first calendar year of this Employment Agreement, Employee
shall be entitled to forty-five (45) paid vacation days.

Section 5.2. HOLIDAYS. Employee shall be entitled to the same paid
holidays as authorized by Employer for its other Employees.

Section 5.3. SICK DAYS AND PERSONAL ABSENCE DAYS. Employee shall be
entitled to the same number of paid sick days and personal absence days
authorized by Employer for its other Employees.

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<PAGE> 3

Article 6
Life Insurance

Employer may, in its sole discretion, maintain in effect during the
term of Employee's employment a life insurance policy on the life of Employee in
such amount as Employer shall in its sole discretion decide to maintain during
the term of this Employment Agreement. Any proceeds payable under the policy
shall be paid to the beneficiary or beneficiaries designated in writing from
time to time by Employee.

Article 7
Fringe Benefits

Section 7.1. EMPLOYER'S EMPLOYEE BENEFIT PLANS. Employee shall be
entitled to participate in and receive benefits from all of Employer's Employee
benefit plans that currently are maintained by Employer for its Employees.
Employee shall be entitled to participate in and receive benefits under any
retirement plan, profit-sharing plan, or other Employee benefit plan that
Employer establishes for the benefit of its Employees after the date of this
Employment Agreement. No amounts paid to Employee from an Employee benefit plan
shall count as compensation due Employee as base salary or incentive
compensation. Nothing in this Employment Agreement shall prohibit Employer from
modifying or terminating any of its Employee benefit plans in a manner that does
not discriminate between Employee and other Employees of Employer.

Section 7.2. MOTOR VEHICLE. Employer may, in its sole discretion,
provide Employee with the use of a motor vehicle to be selected in the
reasonable discretion of Employer considering Employee's position. If Employer
does provide Employee with the use of a motor vehicle, Employer shall procure,
maintain, and pay for appropriate insurance on the motor vehicle, including
liability insurance of at least $100,000.00 per person and $300,000.00 per
occurrence for personal injury and $50,000.00 for property damage.

Article 8
Disability

Section 8.1. COMPENSATION DURING PERIODS OF DISABILITY.

(a) Employee shall receive, or continue to receive, Employee's base
salary and incentive compensation while Employee is unable to work full or part
time unless Employee is actually receiving of disability insurance provided
pursuant to this Employment Agreement. While Employee is receiving the benefits
of disability insurance provided pursuant to this Employment Agreement, and for
so long as such benefits are received, Employer shall pay Employee an amount
sufficient to equal any difference between said disability insurance benefits
and Employee's base salary and incentive compensation, including any increases
in base salary and/or incentive compensation that would have occurred pursuant
to this Employment Agreement.

<PAGE> 4

(b) While Employee is unable to work full time because of illness or
injury and through the full term of this Employment Agreement, including
extensions, Employer shall maintain for Employee's benefit all Employee benefit
plans in which Employee was participating at the time Employee was replaced. If
Employee is barred from participating in any Employee benefit plan because of
Employee's disability, Employer shall pay Employee an amount equal to what
Employer would have contributed on Employee's behalf to the Employee benefit
plan if Employee's participation had not been barred.

(c) If Employee gives notice that Employee is terminating employment
because Employee's health has become so impaired that continued performance of
Employee's duties under this Employment Agreement would be hazardous to
Employee's physical or mental health, in addition all other compensation and
benefits provided hereunder and any disability insurance benefits provided
pursuant to Section 8.3 below, Employer shall pay Employee an amount equal to
the sum of Employee's then current annual base salary plus the annualized amount
of incentive compensation paid to Employee most recently before the date
Employee's employment was terminated, multiplied by the number of full and
partial years remaining in the term of this Employment Agreement, including any
extensions.

(d) Employee is not required to seek other employment to mitigate any
amounts payable under this Employment Agreement. Nor will amounts due Employee
under this Employment Agreement be reduced by any amounts received by Employee
for other employment.

Section 8.3. DISABILITY INSURANCE. Employer may, in its sole
discretion, purchase and use its best efforts to maintain disability insurance
in force for the benefit of Employee throughout the term of this Employment
Agreement, including extensions. The policy shall provide that if Employer fails
to make a premium payment, Employee shall have the right in Employee's sole
discretion to advance such funds as may be required to maintain the policy in
force and shall thereafter be entitled to recover amounts paid from Employer.

Article 9
Termination of Employment

Section 9.1. TERM OF EMPLOYMENT. Employee's employment shall commence
on the execution of this Employment Agreement and shall continue for five (5)
years ("end-of-employment date"), unless extended or terminated sooner, as
provided by this article of the Employment Agreement. However, no compensation
or benefits described hereunder shall be due or payable unless and until the
settlement of Employer's initial public offering of stock. Should Employer's
initial public offering of stock fail to settle on or before September 30, 1999,
this Employment Agreement shall automatically terminate and become null and void
retroactive to its commencement and Employer shall not be obligated to pay
Employee any compensation or benefits stated herein or continue the same
thereafter.

Section 9.2. EXTENSION OF EMPLOYMENT. On the end-of-employment date and
every five (5) years thereafter, Employee's employment with Employer
automatically shall be extended for an additional five (5) years unless, at
least ninety (90) days prior to the end-of-employment date, or

<PAGE> 5

successive five (5) year anniversary thereof, Employer or Employee delivers to
the other a written notice that Employee's employment with Employer is not to be
extended.

Section 9.3. TERMINATION AT EMPLOYEE'S DEATH. Employee's employment
with Employer shall terminate at Employee's death.

Section 9.4. TERMINATION BY EMPLOYEE. Employee may, but is not
obligated to, terminate this Employment Agreement at any time under the
following circumstances:

(a) Employee's health becomes so impaired that continued performance of
Employee's duties under this Employment Agreement would be hazardous to
Employee's physical or mental health.

(b) There is a change in control of Employer. There is a change in
control of Employer if someone other than a current owner of Employer becomes
the beneficial owner of 20 percent or more of the voting power of Employer.

(c) Employee is assigned duties that are significantly different than
those described in this Employment Agreement, or duties assigned Employee by
this Employment Agreement are eliminated or transferred to someone else.

(d) Employee is removed from any of the positions described in Section
2.1 of this Employment Agreement (other than by Employer for cause).

(e) Employee's fringe benefits or other compensation are materially
reduced.

(f) Employer requires Employee to travel more frequently than
contemplated by this Employment Agreement.

(g) Employer fails to have a successor assume this Employment
Agreement.

(h) Employer becomes insolvent or files a bankruptcy petition.

Section 9.5. TERMINATION BY EMPLOYER.

(a) TERMINATION FOR CAUSE. Employer may terminate Employee's employment
for cause.

(b) "CAUSE" DEFINED. Employer shall have cause to terminate Employee's
employment if Employee willfully fails to substantially perform any duties
required by this Employment Agreement (unless Employee's failure is due to a
physical or mental incapacity), Employee is consistently, flagrantly, and
grossly negligent in the performance of required duties, Employee engages in
conduct that demonstrably and substantially damages Employer, Employee is
convicted of a felonious act of moral turpitude that demonstrably and
substantially damages Employer, or Employee willfully discloses material
confidential information in violation of Article 10 of this Employment
Agreement. No act or failure to act by Employee may be

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<PAGE> 6

considered "willful" unless Employee acted or failed to act without any
reasonable belief that the act or omission was in Employer's best interests and
without good faith.

Section 9.6. NOTICE OF TERMINATION. Any termination of Employee's
employment by Employer or Employee must be communicated to the other party by a
written notice of termination. The notice must specify the provision of this
Employment Agreement authorizing the termination and must set forth in
reasonable detail the facts and circumstances providing the basis for
termination of Employee's employment.

Section 9.7. DATE TERMINATION IS EFFECTIVE. If Employee's employment
terminates because this Employment Agreement expires, then Employee's employment
will be considered to have terminated on that expiration date. If Employee's
employment terminates because of Employee's death, then Employee's employment
will be considered to have terminated on the date of Employee's death. If
Employee's employment is terminated by Employee, then Employee's employment will
be considered to have terminated on the date that notice of termination is
given. If Employee's employment is terminated by Employer for cause, then
Employee's employment will be considered to have terminated on the date
specified by the notice of termination. If, within thirty (30) days after a
notice of termination is given, the party receiving the notice notifies the
other party that there is a dispute concerning the termination, then Employee's
employment will not be considered to have terminated, and Employer shall
continue to compensate Employee pursuant to this Employment Agreement, until the
dispute is ended by a written agreement between the parties or a final judgment,
order, or decree of a court of competent jurisdiction. A judgment, order, or
decree of a court of competent jurisdiction will be considered final if the time
for appealing the decision has expired and no notice of appeal has been filed.

Section 9.8. COMPENSATION FOLLOWING TERMINATION.

(a) If Employee's employment terminates because of Employee's death,
Employer shall pay a lump sum death benefit to the person or persons designated
in a written notice filed with Employer by Employee or, if no person has been
designated, to Employee's estate. The amount of the lump sum death benefit will
equal the amount of Employee's then current annual base salary plus the
annualized amount of incentive compensation paid Employee most recently prior to
Employee's death, multiplied by the number of full and partial years multiplied
by the number of full and partial years remaining in the term of this Employment
Agreement, including extensions. This lump sum death benefit shall be in
addition to any life insurance payable pursuant to Article 6 and/or any other
amounts that Employee's beneficiaries and estate may be entitled to receive
under any Employee benefit plan maintained by Employer.

(b) If Employee's employment is terminated by Employer for cause,
Employer shall pay Employee/Employee's then current base salary through the date
employment is terminated, and Employer shall have no further obligations to
Employee under this Employment Agreement.

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<PAGE> 7

under this Employment Agreement. In addition, Employer shall pay Employee as
liquidated damages an amount equal to the sum of Employee's then current annual
base salary plus the annualized amount of incentive compensation paid to
Employee most recently before the date Employee's employment was terminated,
multiplied by the number of full and partial years remaining in the term of this
Employment Agreement, including extensions.

(d) If Employee's employment is terminated by Employer or Employee in
accordance with the provisions of this Employment Agreement, in addition to all
other compensation or benefits provided hereunder, Employer shall pay Employee
severance pay in an amount equal to the sum of Employee's then current annual
base salary plus the annualized amount of incentive compensation paid to
Employee most recently before the date Employee's employment was terminated,
multiplied by a fraction, the numerator of which shall be the number of full and
partial years employed pursuant to this Employment Agreement and the denominator
of which shall be ten (10).

Article 10
Confidential Information

Section 10.1. DISCLOSURES WHILE EMPLOYED BY EMPLOYER. While employed by
Employer, Employee shall not disclose any material confidential information
about Employer to anyone, other than an Employee of Employer or someone to whom
disclosure is reasonably necessary to perform Employee's duties, without the
written consent of Employer. The Employer's duly appointed president shall be
the only person authorized by Employer to give such consent. "Confidential
information" does not include any information that is known generally by the
public, other than as a result of unauthorized disclosure by Employee, or
information that is not the type of information considered confidential by
persons engaged in a business that is the same or similar to that conducted by
Employer. Confidential information is material if its disclosure would be
materially damaging to Employer.

Section 10.2. DISCLOSURES AFTER EMPLOYMENT TERMINATES. For three (3)
years after Employee's employment with Employer terminates or, if longer, the
period of time remaining in the term of this Employment Agreement, Employee
shall not disclose any material confidential information (as described in
Section 10.1) except as required in connection with any judicial or
administrative proceeding or inquiry.

Article 11
Noncompetition Agreement

Section 11.1. AGREEMENT NOT TO COMPETE. For two (2) years after
Employee's employment with Employer terminates, Employee agrees not to directly
or indirectly own, manage, control, or operate; serve as an officer, director,
partner, or Employee of; have any direct or indirect financial interest in; or
assist in any way; any person or entity that competes with any business
conducted by Employer or any of Employer's affiliates or subsidiaries in any
geographic region in which Employer conducts business.

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<PAGE> 8

Section 11.2 COMPETITIVE BUSINESS. For purposes of this Article 11, a
competitive business shall be any person or entity which operates as a
securities broker dealer whose primarily business is to provide its clients with
the ability to buy, sell, or trade securities via the internet or world wide
web, or via some similar system, network, method, or service.

Section 11.3. OWNERSHIP OF PUBLIC CORPORATION NO VIOLATION. Employee
will not be considered to have violated this provision merely because Employee
owns no more than twenty percent (20%) of the stock of any publicly held
corporation.

Article 12
Notices

Any notice given under this Employment Agreement to either party shall
be made in writing. Notices shall be deemed given when delivered by hand or when
mailed by registered or certified mail, return receipt requested, postage
prepaid, and addressed to the party at the address set forth below.

Employee's address: 5965 Michaux Street
Boca Raton, FL 33433

Employer's address: 2700 N. Military Trail, Suite 200
Boca Raton, FL 33431

Each party may designate a different address for receiving notices by giving
written notice of the different address to the other party. The written notice
of the different address will be deemed given when it is received by the other
party.

Article 13
Binding Agreement

Section 13.1. EMPLOYER'S SUCCESSORS.

(a) The rights and obligations of Employer under this Employment
Agreement shall inure to the benefit of and shall be binding in all respects
upon the successors and assigns of Employer.

(b) Employer shall require any direct or indirect successor (by
purchase, merger, consolidation, or otherwise) of all or substantially all of
Employer's stock, business and/or assets to expressly agree to assume Employer's
obligations under this Employment Agreement and perform them in the same manner
and to the same extent as Employer would have been required to do if no
succession had occurred. The agreement must be in a form and substance
satisfactory to Employee.

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<PAGE> 9

entitled to if Employee had terminated Employee's employment in accordance with
the terms of this Employment Agreement, calculated as though Employee's
employment had terminated on the effective date of the succession. However,
Employer's failure to obtain such agreement shall not affect said successor's
obligations pursuant to paragraph 13.1(a) above.

Section 13.2. EMPLOYEE'S SUCCESSORS. This Employment Agreement shall
inure to the benefit and be enforceable by Employee's personal representatives,
legatees, and heirs. If Employee dies while amounts are still owed, such amounts
shall be paid to Employee's legatees or, if no such person or persons have been
designated, to Employee's estate.

Article 14
Waivers

The waiver by either party of a breach of any provision of this
Employment Agreement shall not operate or be construed as a waiver of any
subsequent breach.

Article 15
Entire Agreement

Section 15.1. NO OTHER AGREEMENTS. This instrument contains the entire
agreement of the parties. The parties have not made any agreements or
representations, oral or otherwise, express or implied, pertaining to the
subject matter of this Employment Agreement other than those specifically
included in this Employment Agreement.

Section 15.2. PRIOR AGREEMENTS. This Employment Agreement supersedes
any prior agreements pertaining to or connected with or arising in any manner
out of the employment of Employee by Employer. All such prior agreements are
terminated and are of no force or effect whatsoever.

Article 16
Amendment of Agreement

No change or modification of this Employment Agreement shall be valid
unless it is in writing and signed by the party against whom the change or
modification is sought to be enforced. No change or modification by Employer
shall be effective unless it is approved by Employer's Board of Directors and
signed by an officer specifically authorized to sign such documents.

Article 17
Severability of Provisions

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<PAGE> 10

enforceable while maintaining the intent of said provision(s). No such
modification shall affect the validity or enforceability of any other provision
of this Employment Agreement.

Article 18
Assignment of Agreement

Employer shall not assign this Employment Agreement without Employee's
prior written consent, but failure to obtain such consent shall not affect said
assignee's obligations pursuant to paragraph 13.1(a) above, which consent shall
not be unreasonably withheld.

Article 19
Governing Law, Venue & Attorneys Fees

This Employment Agreement shall be governed by, construed, and enforced
in all respects in accordance with the laws of the State of Florida. Venue for
any action arising in any manner out of the Employee's employment, this
Employment Agreement, or any of the terms contained herein shall be the Federal
and or State courts located in Palm Beach County, Florida, regardless of where
this Employment Agreement is to be performed. In the event either party engages
legal counsel to enforce any provision contained in this Employment Agreement,
the prevailing party shall be entitled to all reasonable attorneys fees,
investigative expenses, costs, and court costs, whether or not a suit is
actually filed, but including all levels of appeal.

IN WITNESS WHEREOF, the parties have executed this Employment Agreement
in duplicate on the date and year first above written.

EMPLOYEE:

-----------------------------------
Farshid Tafazzoli

EMPLOYER:

onlinetradinginc.com corp.

By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------

<PAGE> 11

ADDENDUM

This Addendum, entered into as of the 1st day of February, 1999 by and
between onlinetradinginc.com corp. ("Employer"), whose principal place of
business at 2700 N. Military Trail, Suite 200, Boca Raton, Florida 33431, and
FARSHID TAFAZZOLI ("Employee").

Recitals

A. Employer is contemplating becoming a publicly held company. Employer
considers it essential to the best interests of its shareholders to foster the
continuous employment of key management personnel. In this connection, Employer
recognizes that, as is the case with many publicly held companies, the
possibility of a change in control may exist and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of Employer
and its shareholders.

B. Employer has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of Employee to
his assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of Employer.

C. In order to induce Employee to remain in the employ of Employer and
in consideration of Employee's agreement set forth below, Employer agrees that
Employee shall receive the severance benefits set forth in this Agreement.

NOW THEREFORE, in consideration of Employee's continued employment, the
mutual covenants and agreements contained in this Addendum, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, agree as follows:

1. PURPOSE OF ADDENDUM. This Addendum shall supplement that certain
Employment Agreement entered between Employer and Employee dated the 1st day of
February, 1999 (the "Employment Agreement") and where inconsistent with said
Employment Agreement, this Addendum shall control. In the event Employee's
employment with Employer is terminated subsequent to a "change in control of
Employer" (as defined in Section 2 below) under the circumstances described
below, Employer agrees that, in addition to all compensation and benefits
payable to Employee pursuant to the Employment Agreement, Employee shall receive
the additional severance benefits set forth in this Addendum.

2. CHANGE IN CONTROL. No benefits shall be payable under this Addendum
unless there shall have been a change in control of Employer, as set forth
below. For purposes of this Addendum, a "change in control of Employer" shall
mean a change of control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
Employer is in fact required to comply with that regulation, provided that,
without limitation, such a change in control shall be deemed to have occurred
if:

<PAGE> 12

(A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than a trustee or other fiduciary
holding securities under an Employee benefit plan of Employer or an
Employer owned, directly or indirectly, by the shareholders of Employer
in substantially the same proportions as their ownership of stock of
Employer, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
Employer representing 20% or more of the combined voting power of
Employer's then outstanding securities; or

(B) during any period of two consecutive years (not including
any period prior to the execution of this Addendum), individuals who at
the beginning of such period constitute Employer's board of directors
and any new director (other than a director designated by a person who
has entered into an agreement with Employer to effect a transaction
described in clauses (A), (D) or (E) of this Section) whose election by
the Board or nomination for election by Employer's shareholders was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority; or

(C) Employer enters into any agreement, the consummation of
which would result in the occurrence of a change in control of
Employer; or

(D) the shareholders of Employer approve a plan of complete
liquidation of Employer or an agreement for the sale or disposition by
Employer of all or substantially all Employer's assets; or

(E) the shareholders of Employer approve a merger or
consolidation of Employer with any other entity (other than a merger or
consolidation which would result in the voting securities of Employer
outstanding immediately prior to it continuing to represent (either by
remaining outstanding or by being converted into voting securities of
the surviving entity) greater than 80% of the combined voting power of
the voting securities of Employer or such surviving entity outstanding
immediately after such merger or consolidation).

3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events
described in Section 2 above constituting a change in control of Employer shall
have occurred, and the Employee is terminated by Employer for any reason,
including termination due to Employer's failure to extend the Employment
Agreement pursuant to its terms, or if Employee terminates the Employment
Agreement for Good Reason (as defined below), Employee shall be entitled to the
benefits provided in Subsection 4(ii) below upon the subsequent termination of
Employee's employment during the term of this Addendum, unless such termination
is because of Employee's death or for "Cause" (as defined in the Employment
Agreement).

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(i) GOOD REASON. Employee shall be entitled to terminate employment for
Good Reason. For purposes of this Addendum, "Good Reason" shall mean, without
Employee's express written consent, the occurrence after a change in control of
Employer of any of the following circumstances unless, in the case of paragraph
(A), (E), (F), (G) or (H), such circumstances are fully corrected prior to the
Date of Termination specified in the Notice of Termination, as defined in
Subsections 3(iii) and 3(ii), respectively, given in respect of them:

(A) the assignment to Employee of any duties inconsistent with
Employee's status and position as it exists immediately prior to the
change in control of Employer or a substantial adverse alteration in
the nature or status of Employee's responsibilities from those in
effect immediately prior to the change in control of Employer;

(B) a reduction by Employer in Employee's annual base salary
and/or incentive compensation in effect immediately prior to the change
in control of Employer or as the same may be increased from time to
time pursuant to the Employment Agreement except for across-the-board
salary reductions similarly affecting all key Employees of Employer and
all key Employees of any person or entity in control of Employer;

(C) Employee's relocation to a location not within ten (10)
miles of Employee's present office or job location, except for required
travel on Employer's business pursuant to the Employment Agreement;

(D) the failure by Employer, without Employee's consent, to
pay to Employee any portion of Employee's current compensation, or to
pay to Employee any portion of an installment of deferred compensation
under any deferred compensation program of Employer, within seven days
of the date such compensation is due;

(E) the failure by Employer to continue in effect any bonus to
which Employee were entitled, or any compensation or benefit plan set
forth in the Employment Agreement or in which Employee participated
immediately prior to the change in control of Employer which is
material to Employee's total compensation and/or benefits, including
but not limited to Employer's Stock Option Plans, 401(k) Pre-Tax
Retirement Savings Plan, and Flexible Benefit Plan, or any substitute
plans adopted prior to the change of control in Employer, unless an
equitable arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure by
Employer to continue Employee's participation in it (or in such
substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the
level of Employee's participation relative to other participants, as
existed at the time of the change in control;

(F) the failure by Employer to continue to provide Employee
with benefits substantially similar to those enjoyed by Employee under
any of Employer's life insurance, medical, health and accident, or
disability plans in which Employee were participating at the time of
the change in control of Employer, the failure to continue to

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provide Employee with an automobile or allowance in lieu of it, if
Employee were provided with such an automobile or allowance in lieu of
it at the time of the change of control of Employer, the taking of any
action by Employer which would directly or indirectly materially reduce
any of such benefits or deprive Employee of any material fringe benefit
enjoyed by Employee at the time of the change in control of Employer,
or the failure by Employer to provide Employee with the number of paid
vacation days to which Employee are entitled on the basis of years of
service with Employer in accordance with Employer's normal vacation
policy in effect at the time of the change in control of Employer;

(G) the failure of Employer to obtain a satisfactory agreement
from any successor to assume and agree to perform the Employment
Agreement or this Addendum, as contemplated in Section 5 of this
Addendum; or

(H) any purported termination of Employee's employment which
is not effected pursuant to a Notice of Termination satisfying the
requirements of Subsection (ii) below; for purposes of this Addendum,
no such purported termination shall be effective.

Employee's rights to terminate Employee's employment pursuant to this
Subsection shall not be affected by Employee's incapacity due to physical or
mental illness. Employee's continued employment shall not constitute consent to,
or a waiver of rights with respect to, any circumstance constituting Good Reason
under this Addendum. In the event Employee delivers Notice of Termination based
upon circumstances set forth in Paragraph (A), (E), (F), (G) or (H) above, which
are fully corrected prior to the Date of Termination set forth in Employee's
Notice of Termination, such Notice of Termination shall be deemed withdrawn and
of no further force or effect.

(ii) NOTICE OF TERMINATION. Any purported termination of Employee's
employment by Employer or by Employee shall be communicated by written Notice of
Termination to the other party hereto in accordance with Article 12 of the
Employment Agreement. For purposes of this Addendum, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Addendum relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated.

(iii) DATE OF TERMINATION. "Date of Termination" shall be determined
pursuant to Section 9.7 of the Employment Agreement.

4. COMPENSATION UPON TERMINATION. Following a change in control of
Employer, as defined by Section 2, upon termination of Employee's employment
Employee shall be entitled to the following benefits:

(i) If Employee's employment shall be terminated by Employer for Cause
(as defined in the Employment Agreement) or by Employee other than for Good
Reason (as defined in this Addendum), or death, Employer shall pay Employee
pursuant to the terms of the Employment

4
<PAGE> 15

Agreement, plus all other amounts and benefits to which Employee is entitled
under any compensation plan of Employer at the time such payments are due, and
Employer shall have no further obligations to Employee under this Addendum.

(ii) If Employee's employment by Employer is (a) terminated by Employer
other than for Cause (as defined in the Employment Agreement) or (b) terminated
by Employee for Good Reason, then Employee shall be entitled to the benefits
provided below:

(A) Employer shall pay Employee's full base salary through the
Date of Termination at the rate in effect at the time Notice of
Termination is given, plus all other amounts and benefits to which
Employee are entitled under any compensation plan of Employer, at the
time such payments are due, except as otherwise provided below.

(B) In lieu of any further salary payments to Employee for
periods subsequent to the Date of Termination, Employer shall pay as
severance pay to Employee a lump sum severance payment (together with
the payments provided in paragraphs (C) and (D), below, the "Severance
Payments") equal to 2.99 times the sum of Employee's annual base salary
in effect immediately prior to the occurrence of the circumstance
giving rise to the Notice of Termination given in respect of them.

(C) Employer shall pay to Employee any deferred compensation,
including, but not limited to deferred salary, incentive and/or
bonuses, allocated or credited to Employee or Employee's account as of
the Date of Termination.

(D) At Employee's sole discretion, in lieu of shares of common
stock of Employer (the "Employer's Shares") issuable upon exercise of
outstanding options ("Options"), if any, granted to Employee under
Employer's Stock Option Plans (which Options shall be cancelled upon
the making of the payment referred to below) Employee shall receive an
amount in cash equal to the product of (i) the excess of the closing
price of Employer's Shares as reported by the exchange currently
trading said stock (or, if not so reported, on the basis of the average
of the lowest asked and highest bid prices on or nearest the Date of
Termination), over the per share exercise price of each Option held by
Employee (whether or not then fully exercisable) plus the amount of any
applicable cash appreciation rights, times (ii) the number of
Employer's Shares covered by each such Option.

(E) Employer shall also pay to Employee all legal fees and
expenses incurred by Employee as a result of such termination
(including all such fees and expenses, if any, incurred in contesting
or disputing any such termination or in seeking to obtain or enforce
any right or benefit provided by the Employment Agreement, this
Addendum, or in connection with any tax audit or proceeding to the
extent attributable to the application of Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") to any payment or benefit
provided under this Addendum)).

(F) The payments provided for in paragraphs (B), (C), and (D)
above, shall be made no later than the fifth day following the Date of
Termination, provided, however,

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<PAGE> 16

that if the amounts of such payments cannot be finally determined on or
before such day, Employer shall pay to Employee on such day an
estimate, as determined in good faith by Employer, of the minimum
amount of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section 1274(b)(2)(B)
of the Code) as soon as the amount can be determined but in no event
later than the 30th day after the Date of Termination. In the event
that the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall constitute
a loan by Employer to Employee payable on or before the 30th day after
demand by Employer (together with interest from the date of the
Employer's demand at the rate provided in Section 1274(b)(2)(B) of the
Code).

(iii) In the event that Employee is a "disqualified individual" within
the meaning of Section 280G of the Code, the parties expressly agree that the
payments described in this Section 4 and all other payments to Employee under
any other agreements or arrangements with any persons which constitute
"parachute payments" within the meaning of Section 280G of the Code are
collectively subject to an overall maximum limit. Such maximum limit shall be $1
less than the aggregate amount which would otherwise cause any such payments to
be considered a "parachute payment" within the meaning of Section 280G of the
Code, as determined by Employer. Accordingly, to the extent that such payments
would be considered a "parachute payment" with respect to Employee, then the
portions of such payments shall be reduced or eliminated in the following order
until the remaining change of control termination payments with respect to
Employee is within the maximum described in this subsection (iii):

(A) First, any cash payment to Employee;

(B) Second, any change of control termination payments not
described herein; and

Employee expressly and irrevocably waives any and all rights to receive
any change of control termination payments, which exceed the maximum limit
described in this subsection (iii).

(iv) Employee shall not be required to mitigate the amount of any
payment provided for in this Section 4 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 4 be
reduced by any compensation earned by Employee as the result of employment by
another Employer, by retirement benefits, by offset against any amount claimed
to be owed by Employee to Employer, or otherwise except as specifically provided
in this Section 4.

(v) In addition to all other amounts payable to Employee under this
Section 4, Employee shall be entitled to receive all benefits payable to
Employee under Employer's 401(k) Pre-Tax Retirement Savings Plan and any other
plan or agreement relating to retirement benefits.

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<PAGE> 17

5. SUCCESSORS; BINDING AGREEMENT

(i) Employer will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of Employer to expressly assume and agree to perform the
Employment Agreement and this Addendum in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken
place. Failure of Employer to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of the Employment
Agreement and this Addendum and shall entitle Employee to compensation from
Employer in the same amount and on the same terms as Employee would be entitled
to under this Addendum if Employee terminate Employee's employment for Good
Reason following a change in control of Employer, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. However, Employer's failure
to obtain such agreement shall not affect said successor's obligations pursuant
to this Addendum. As used in this Addendum, "Employer" shall mean Employer as
defined above and any successor to its business and/or assets as which assumes
and agrees to perform this Addendum by operation of law, or otherwise.

(ii) This Addendum shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators, heirs,
distributees, and legatees. If Employee should die while any amount would still
be payable to Employee if Employee had continued to live, all such amounts,
unless otherwise provided in this Addendum, shall be paid in accordance with the
terms of this Addendum to Employee's legatee or other designee or, if there is
no such designee, to Employee's estate.

6. MISCELLANEOUS. No provision of this Addendum may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by Employee and such officer as may be specifically
designated by the Board. No waiver by either party to the Employment Agreement
or this Addendum at any time of any breach by the other party of, or compliance
with, any condition or provision of the Employment Agreement or this Addendum to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. All references to sections of the Exchange Act or the Code shall be deemed
also to refer to any successor provisions to such sections. Any payments
provided for shall be paid net of any applicable withholding or deduction
required under federal, state or local law. The obligations of Employer under
Section 4 shall survive the expiration of the term the Employment Agreement and
this Addendum.

7. VALIDITY. The invalidity or unenforceability of any provision of the
Employment Agreement or of this Addendum shall not affect the validity or
enforceability of any other provision of this Addendum, which shall remain in
full force and effect.

8. COUNTERPARTS. This Addendum may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

9. ENTIRE ADDENDUM. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter of this
Addendum have been made by either party which are not expressly set forth in the
Employment Agreement or this Addendum.

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<PAGE> 18

IN WITNESS WHEREOF, the parties have executed this Addendum on the date
and year first above written.

onlinetradinginc.com corp.

By:
- -------------------------- --------------------------------
Farshid Tafazzoli Name:
-------------------------------
Title:
------------------------------

<PAGE> 1
EXHIBIT 10.3

EMPLOYMENT AGREEMENT

This Employment Agreement is made on the 1st day of February, 1999,
between onlinetradinginc.com corp. ("Employer"), whose principal place of
business at 2700 N. Military Trail, Suite 200, Boca Raton, Florida 33431, and
ANDREW A. ALLEN ("Employee").

WHEREAS, Employer is actively engaged in the business of a securities
broker dealer; and,

WHEREAS, Employer wishes to employ Employee and Employee wishes to be
employed pursuant to the terms of this Employment Agreement.

Article 1
Employment of Employee

Employer agrees to employ Employee, and Employee accepts employment
with Employer, on and subject to the terms and conditions set forth in this
Employment Agreement.

Article 2
Position of Employee

Employer agrees to employ Employee to act as Employer's Chief Executive
Officer.

Article 3
Place of Employment

<PAGE> 2

Article 4
Compensation of Employee

Section 4.2. INCENTIVE COMPENSATION. In addition to the base salary,
Employee shall be entitled to receive incentive compensation, as determined by
Employer in accordance with Employer's Incentive Compensation Plan.
Notwithstanding the foregoing, Employee agrees the Employer will not pay and the
Employee will not receive any bonuses until the earlier of (i) 24 months from
the date of this Agreement and (ii) such time as Employer earns $3,300,000 in
pre-tax earnings in any fiscal year. Thereafter, Employee acknowledges and
agrees that, for the fiscal years ended January 31, 2000, January 31, 2001, and
January 31, 2002, the total amount of bonuses payable to all of Employee,
Farshid Tafazzoli, Steve zum Tobel, Derek Hernquist and Benedict Gambino shall
not exceed in the aggregate 5% of pre-tax earnings in each of such fiscal years.