UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934, as amended

Filed by the Registrantx

Filed by a Party other than the Registrant¨

Check the appropriate box:

ASCENDANT SOLUTIONS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Your vote is important

ASCENDANT SOLUTIONS, INC.

Proxy Statement

20032004 ANNUAL MEETING OF STOCKHOLDERS

Ascendant Solutions, Inc.

16250 Dallas Parkway, Suite 102

Dallas, Texas 75248

972-250-0945

April 23, 200319, 2004

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 22, 200319, 2004

Ascendant Solutions, Inc. (“Ascendant Solutions” or the “Company”) will hold its Annual Meeting of Stockholders at its corporate headquarters located at 16250 Dallas Parkway, Suite 102, Dallas, Texas 75248 on May 22, 200319, 2004 at 1:00 pm.

We are holding this meeting:

Your board of directors recommends that you vote in favor of the proposal outlined in this proxy statement.

Your board of directors has selected April 14, 20035, 2004 as the record date for determining stockholders entitled to vote at the meeting. A list of stockholders on that date will be available for inspection at Ascendant Solutions, Inc., 16250 Dallas Parkway, Suite 102, Dallas, Texas, for at least ten days before the meeting.

This notice of annual meeting, proxy statement, proxy and our 20032004 Annual Report to Stockholders are being distributed on or about April 23, 2003.19, 2004.

You are cordially invited to attend the meeting in person. However, to ensure your representation at the meeting, you are urged to mark, sign, date and return the enclosed Proxy as soon as possible in the envelope enclosed for that purpose. Any stockholder attending the meeting may vote in person even if he or she previously returned a Proxy.

By Order of the Board of Directors,

Susan K. Olson

Assistant Corporate Secretary

TABLE OF CONTENTS

YOUR VOTE IS IMPORTANT.

PLEASE REMEMBER TO PROMPTLY

RETURN YOUR PROXY CARD.

QUESTIONS AND ANSWERS

In addition, pursuant to Rule 14a-4 of the Exchange Act, the Company may exercise discretionary voting authority at the 2004 Annual Meeting under proxies it solicits to vote on a proposal made by a stockholder that the stockholder does not seek to include in the Company’s proxy statement pursuant to Rule 14a-8, unless the Company is notified about the proposal no later than March 9, 2004 (assuming that the Company’s 2004 Annual Meeting of Stockholders is held on a date that is within 30 days from the date on which the 2003 Annual Meeting was held), and the stockholder satisfies the other requirements of Rule 14a-4(c).

ITEMPROPOSAL 1.

ELECTION OF DIRECTORS

TheOur business affairs are managed under the direction of the board of directors, or the Board, consisting of Ascendant Solutions has currently set the number of directors constituting the whole board at five. Currently four of these positions are filled and one is vacant. As established by our amended and restated bylaws, these directors arefive persons, divided into three classes serving staggered three-year terms. The termclasses. Members of each class serve offset terms of three years so that only one class expiresis elected each year. Class B, consisting of Richard L. Bloch, who has been nominated by the Board for re-election at each Annual Meeting. At this Annual Meeting twoof Stockholders, and a vacancy for which no nominee has been named, will serve for a term that will expire at the Annual Meeting of Stockholders in 2007. Class C, consisting of James C. Leslie (who was reclassified from Class B as the result of the resignation of the only Class C director), will continue to serve following this Annual Meeting of Stockholders for a term that will expire at the Annual Meeting of Stockholders in 2005. Class A, directors will be elected to serve until the 2006 Annual Meeting and until their respective successors are duly elected and qualified. The nominees for Class A directors areconsisting of Jonathan R. Bloch and David E. Bowe. Mr. Bowe, currently serves as President and Chief Executive Officer. Mr. Jonathan R. Bloch is the son of Mr. Richard L. Bloch, a director of Ascendant Solutions. Mr. Richard L. Bloch is classified as a Class B director electedwill continue to serve untilfollowing this Annual Meeting of Stockholders for a term that will expire at the 2004 Annual Meeting. Mr. Richard L. Bloch is classified as a Class C director elected to serve until the 2005 Annual Meeting. In October 2002, Melissa F. Crane, a Class C director, resigned from the BoardMeeting of Directors. On March 13, 2003, the Board of Directors voted to reclassify the directorship of Mr. James C. Leslie from Class B to Class C. There remains a Class B director vacancy on the Board of Directors.Stockholders in 2006.

The persons designated as proxies will vote the enclosed proxy for the election of the nominee unless you direct them to withhold your votes. If the nominee becomes unable to serve as a director before the meeting (or decides not to serve), the individuals named as proxies may vote for a substitute or we may reduce the number of members of the board. The board of directorsBoard recommends that stockholders voteFOR the nominees.nominee.

Below are the names and ages of the nomineesnominee for Class A directors,B director, and the continuing Class BA and Class C directors, the years they became directors, their principal occupations or employment for at least the past five years and certain of their other directorships, if any.

NomineesNominee for Election for Term Ending with the 2007 Annual Meeting

Class B Director

Director Continuing in Office Until the 2005 Annual Meeting

Class C Director

		The Staubach Company, a full-service international real estate strategy and services firm. From 1988 through March 2001, Mr. Leslie also served as a director of The Staubach Company. Mr. Leslie was President of Staubach Financial Services from January 1992 until February 1996. From 1982 until January 1992, Mr. Leslie served as Chief Financial Officer of The Staubach Company. Mr. Leslie serves on the board of Stratus Properties, Inc. and serves on boards of several private companies. Mr. Leslie holds a B.S. degree from The University of Nebraska and an M.B.A. degree from The University of Michigan Graduate School of Business.

Directors Continuing in Office Until the 2006 Annual Meeting

Class A Directors

•   David E. Bowe		Age 44, a45, director since 2000.   Mr. Bowe has served as our Chief Executive Officer since August, 2000, President since March 2000 and as our Chief Financial Officer since September 1999. Prior to accepting the position of President, Mr. Bowe also acted as our Executive Vice President from September 1999. Before joining us, Mr. Bowe served as President of U.S. Housewares Corporation (a consumer products company) from September 1998 to September 1999. Prior to that, Mr. Bowe was Executive Vice President of Heartland Capital Partners L.P. (a private equity firm) from 1993 to 1997 where he was responsible for

		making private equity investments. From 1987 to 1992, Mr. Bowe served in various executive capacities for The Thompson Company (a (a private investment firm) where he participated in the acquisition, development and operation of several portfolio companies. From 1980 to 1987, Mr. Bowe held various executive positions with Brown Brothers Harriman & Co. (a Wall Street private bank). Mr. Bowe is a Chartered Financial Analyst and received a BSBA in Finance from Georgetown University.

All of the foregoing persons are currently directors. Their positions on standing committees of the Board of Directors Continuing in Office Untilare shown below under “Committees of the 2004 Annual MeetingBoard of Directors; Meetings”.

Class B Directors

Director Continuing in Office UntilExcept as described above, there are no family relationships among the 2005 Annual Meetingexecutive officers or directors. There are no arrangements or understandings pursuant to which any of these persons were elected as an executive officer or director.

Class C Director

Services from January 1992 until February 1996. From 1982 until January 1992, Mr. Leslie served as Chief Financial Officer of The Staubach Company. Since March 2001, Mr. Leslie has focused on managing his personal investments. Mr. Leslie serves on the board of Stratus Properties, Inc. and serves as an advisor to the Board of Directors of CRESA Partners, LLC, a national real estate services firm. Mr. Leslie holds a B.S. degree from The University of Nebraska and an M.B.A. degree from The University of Michigan Graduate School of Business.

Compensation of Directors

Non-Employee Directors of Ascendant Solutions will beRichard and Jonathan Bloch as non-employee directors are compensated $500.00$500 for each board meeting attended in person or $250.00$250 for each board meeting attended telephonically, in addition to reimbursement of out-of-pocket expenses. Our directors are eligible to receive stock option grants under our 1999 Long-Term Incentive Plan and our 2002 Equity Incentive Plan. For descriptions of the 1999 Long-Term Incentive Plan and the 2002 Equity Incentive Plan, please see the discussions set forth in the section titled “Management.” In addition, James C. Leslie, Chairman of the Board, was paid an annual salaryretainer of $50,000 for his service as Chairman of the Board in 2002.

On March 14, 2002, in an attempt to further align the interests of management and members of its Board of Directors with its stockholders, options to purchase 75,000 shares of common stock were granted to each of Jonathan R. Bloch, Richard L. Bloch and Melissa F. Crane, each directors of Ascendant Solutions, under our 1999 Long-Term Incentive Plan for an exercise price of $0.24 per share. Jonathan R. Bloch was also granted options to purchase an additional 150,000 shares of common stock under such plan for an exercise price of $0.24 per share. In addition, we granted, under our 1999 Long-Term Incentive Plan, 1,000,000 performance-based options, of which 400,000 were granted to James C. Leslie, Chairman of the Board, and 600,000 were granted to David E. Bowe, President and Chief Executive Officer and director, for an exercise price of $0.24 per share. The performance-based options vest annually over six years, with the potential to vest earlier upon achievement of pre-established objectives for EBITDA of the Company. Additionally, in March 2002, the Board of Directors authorized the cancellation of an aggregate 450,000 options previously granted to Mr. Bowe in consideration for the issuance of 425,000 shares of restricted stock under our 2002 Equity Incentive Plan. Melissa F. Crane resigned from the Board of Directors in October 2002. As a result of her resignation, Ms. Crane’s options were cancelled See “Certain Relationships and Related Transactions.”2003.

Committees of the Board of Directors; Meetings

Ascendant SolutionsDuring the year ended December 31, 2003, the entire Board met three times and acted three times by unanimous written consent. During fiscal 2003, no director attended fewer than 75% of the aggregate number of meetings of the Board and committees on which such director served.

The Board has two standing committees, the Audit Committee and the Compensation Committee. ItThe Board does not have a separate Nominating Committee.Committee and performs all of the functions of that committee.

The Audit CommitteeCommittee.

this Proxy Statement. During the year ended December 31, 2002,2003, the Audit Committee met one time.five times. Jonathan R. Bloch and Richard L. Bloch are the current members of the Audit Committee. Melissa F. Crane resigned from

The Securities and Exchange Commission (“SEC”) has adopted rules to implement certain requirements of the Sarbanes-Oxley Act of 2002 pertaining to public company audit committees. One of the rules adopted by the SEC requires a company to disclose whether the members of its Audit Committee are “independent”. Since we are not a “listed” company, we are not subject to rules requiring the members of our Audit Committee to be independent. The SEC also requires a company to disclose whether it has an “Audit Committee Financial Expert” serving on its audit committee.

Based on its review of the applicable rules of The Nasdaq National Market governing audit committee membership, the Board of Directors in October 2002 and is no longer adoes not believe that either member of the Audit Committee is “independent” within the meaning of such rules. The Board does believe that both members of the Audit Committee satisfy the general definition of an independent director under Nasdaq’s Rule 4200, but that neither of them satisfies the more stringent requirements applicable to audit committees under Rule 4350 in view of Richard L. Bloch’s beneficial ownership of 16.3% of our common stock and shared power to vote 35.2% of our outstanding common stock under the voting agreement described in the footnotes in “Stock Ownership” and Jonathan Bloch’s family relationship with Richard Bloch.

Based on its review of the criteria of an Audit Committee Financial Expert under the rule adopted by the SEC, the Board does not believe that either member of the Audit Committee would be described as an Audit Committee Financial Expert. Each of Richard L. Bloch and Jonathan R. Bloch have made significant contributions and provided valuable service to Ascendant Solutions and its stockholders as members of the Audit Committee and the Board believes that each of them has demonstrated that he is capable of (i) understanding generally accepted accounting principles (“GAAP”) and financial statements, (ii) assessing the general application of GAAP principles in connection with the accounting for estimates, accruals and reserves, (iii) analyzing and evaluating our financial statements, (iv) understanding internal controls and procedures for financial reporting, and (v) understanding audit committee functions, all of which are attributes of an Audit Committee Financial Expert under the rule adopted by the SEC. Given the business experience and acumen of Richard L. Bloch and Jonathan R. Bloch and their service as members of the Audit Committee, the Board believes that each of them is qualified to carry out all duties and responsibilities of the Audit Committee.

The Board believes that two of its members, Mr. Leslie and Mr. Bowe, would qualify as an Audit Committee Financial Expert. As Chief Executive and Financial Officer of the Company, Mr. Bowe has made and will make certain certifications required under the Sarbanes-Oxley Act of 2002 and the related rules adopted by the SEC with respect to (i) our financial statements and other financial information included in periodic reports filed with the SEC, (ii) our disclosure controls and procedures regarding the disclosure to the certifying officers of material information relating to us, and (iii) our internal controls and whether there are any deficiencies in the design or operation of such internal controls. As a certifying officer, Mr. Bowe will meet with and make reports to the Audit Committee with respect to the items which are the subject matter of his certifications. The Board believes that it is important to maintain independence between the Audit Committee and our certifying officers, and that the significance and importance of maintaining such an independent relationship outweigh the importance of having a person who technically satisfies the definition of an Audit Committee Financial Expert serve on the Audit Committee.

At this time, the Board does not believe that it is necessary to actively search for an outside person to serve on the Board who would qualify as an Audit Committee Financial Expert.

Compensation Committee.    The Compensation Committee

During the year ended December 31, 2002,2003, the Compensation Committee had no formal meetings, instead the full Board performed theses functions. Thethese functions.The current members of the Compensation Committee are Jonathan R. Bloch and Richard L. Bloch. Melissa F. Crane resigned

Corporate Governance

Nomination Process.    The Board does not have a separate Nominating Committee and performs all of the functions of that committee. The Board believes that it does not need a separate nominating committee because the full Board is relatively small, has the time to perform the functions of selecting Board nominees and in the past has acted unanimously in regard to nominees. The Board has also considered that two of its members, Richard L. Bloch and James C. Leslie, constitute two of the three persons who share voting control with respect

to 7,622,300 shares of common stock, or 35.2% of the shares entitled to vote, as discussed in the footnotes in “Stock Ownership.”

In view of Ascendant’s size, resources and limited scope of operations, the Board has determined that it will not increase the size of the Board from its current size of four members. In the future, the Board may determine that increased size, scope of operations or other factors would make it advisable to add additional directors. In considering an incumbent director whose term of office is to expire, the Board reviews the director’s overall service during the person’s term, the number of meetings attended, level of participation and quality of performance. In the case of new directors, the directors will consider suggestions from many sources, including stockholders, regarding possible candidates for directors. The Board may engage a professional search firm to locate nominees for the position of director of the Company. However, to date the Board has not engaged professional search firms for this purpose. A selection of a nominee by the Board requires a majority vote of the Company’s directors.

The Board seeks candidates for nomination to the position of director who have excellent decision-making ability, business experience, particularly those relevant to consumer products, personal integrity and a high reputation and who meet such other criteria as may be set forth in a writing adopted by a majority vote of the Board of Directors.

Pursuant to a policy adopted by the Board, the directors will take into consideration a director nominee submitted to the Company by a stockholder; provided that the stockholder submits the director nominee and reasonable supporting material concerning the nominee by the due date for a stockholder proposal to be included in the Company’s proxy statement for the applicable annual meeting as set forth in rules of the Securities and Exchange Commission then in effect. See “Annual Meeting Advance Notice Requirements” below.

Director Attendance at Annual Meetings.    We do not have a policy regarding attendance by members of the Board of Directors in October 2002at our annual meeting of stockholders. The Board has always encouraged its members to attend its annual meeting. In 2003, two directors (Mr. Leslie and is no longer a memberMr. Bowe) attended our annual meeting of the Compensation Committee.stockholders.

MeetingsStockholder Communications With The Board.    Historically, we have not had a formal process for stockholder communications with the Board. We have made an effort to insure that views expressed by a stockholder are presented to the Board. During the upcoming year, the Board may give consideration to the adoption of a formal process for stockholder communications with the BoardBoard.

DuringCode of Business Conduct and Ethics.    The Board expects to adopt a Code of Ethics on or before the year ended December 31, 2002,2004 Annual Meeting of Stockholders and intends to post the entire boardCode of directors of Ascendant Solutions met five times and acted by consent an additional one time. During fiscal 2002, no director attended fewer than 75% ofEthics on the aggregate number of meetings of the board and committees on which such director served.

Voting Agreement

On July 24, 2001, James C. Leslie, Richard L. Bloch, Will Cureton, and CLB Partners, Ltd., a Texas limited partnership (“CLB”) whose general partner is controlled by Mr. Bloch and Mr. Cureton, entered into a Voting Agreement. Pursuant to the Voting Agreement, the parties agreed to vote all of the shares of stock of Ascendant Solutions held by them in the manner designated by the affirmative vote ofCompany’s website at least a majority of Messrs. Leslie, Bloch and Cureton, each with one vote, subject to certain other provisions set forth in the Voting Agreement.www.ascendantsolutions.com.

STOCK OWNERSHIP

Beneficial Ownership of Certain Stockholders, Directors and Executive Officers

The following table sets forth information with respect to the beneficial ownership of our common stock at April 14, 2003,March 31, 2004, by:

In accordance with the rules of the SEC, the table gives effect to the shares of common stock that could be issued upon the exercise of outstanding options and common stock purchase warrants within 60 days of April 14, 2003.March 31, 2004. Unless otherwise noted in the footnotes to the table, and subject to community property laws where applicable, the following individuals have sole voting and investment control with respect to the shares beneficially owned by them. Unless otherwise noted in the footnotes to the table, the address of each executive officer and director is c/o Ascendant Solutions, Inc., 16250 Dallas Parkway, Suite 102, Dallas, Texas 75248. We have calculated the percentages of shares beneficially owned based on 21,665,900 shares of common stock outstanding at April 14, 2003. This number includes 435,000 shares of restricted common stock issued to our employees but not yet reflected in the records of our transfer agent.March 31, 2004.

with one vote. Each such entity or individual has sole voting and investment power with respect to their

shares of common stock, except to the extent voting power is shared pursuant to the Voting Agreement. As a result of the voting provisions contained in the Voting Agreement, each of James C. Leslie, CLB, Richard L. Bloch and Will Cureton may be deemed an indirect beneficial owner of the shares owned by the other parties thereto. Each party, however, disclaims beneficial ownership of such shares. As of March 31, 2004, there were 7,622,300 shares representing 35.2% of our outstanding common stock subject to the Voting Agreement. The beneficial ownership information contained in this table for each of James C. Leslie, CLB, Richard L. Bloch and Will Cureton does not reflect shares owned by any of the other parties to the Voting Agreement except as otherwise specified in the footnotes.

(5)

Includes 3,000,0003,500,000 shares owned of record by CLB and 25,00050,000 shares of common stock that may be acquired upon exercise of currently exercisable options.

(6)

CLB Holdings LLC, a Texas limited liability company, is the general partner of CLB. Richard L. Bloch, a director, and Will Cureton are the managers of CLB Holdings LLC and the Richard and Nancy Bloch Family Trust and Will Cureton are the members of CLB Holdings LLC. Richard L. Bloch is a co-trustee of The Richard and Nancy Bloch Family Trust. The address of CLB is 16250 Dallas Parkway, Suite 201, Dallas, Texas 75248

(7)

Includes 3,000,0003,500,000 shares owned of record by CLB. Mr. Cureton’s address is 16250 Dallas Parkway, Suite 201, Dallas, Texas 75248.

(8)

The general partner of VantagePoint Venture Partners III(Q), L.P. is VantagePoint Venture Associates III, L.L.C. The general partner of VantagePoint Communications Partners, L.P. is VantagePoint Communications Associates, L.L.C. The address for the VantagePoint funds is c/o VantagePoint Venture Partners, 1001 Bayhill Drive, Suite 300, San Bruno, California 94066.

(9)

Includes 1,076,6661,343,334 shares of common stock that may be acquired upon exercise of currently exercisable stock options and warrants.

Section 16(a) Beneficial Ownership Reporting Compliance

Under U.S. securities laws, directors, certain executive officers and persons holding more than 10% of our common stock must report their initial ownership of the common stock, and any changes in that ownership, to the SEC. The SEC has designated specific due dates for these reports. Based solely on our review of copies of the reports filed with the SEC and written representations of our directors and executive officers, we believe that all persons subject to reporting filed the required reports on time in 2002.2003, except that each of Richard L. Bloch, Jonathan R. Bloch, and James C. Leslie reported option grants made on March 14, 2002 in Form 4s filed on July 23, 2003. Additionally, VantagePoint Venture Partners III (Q), L.P. and VantagePoint Communications Partners, L.P., which were the holders of more than 10% of our common stock prior the sale of August 29, 2003 of a total of 1,921,300 shares of our common stock (or approximately 8.9% of the total outstanding shares) held by them to James C. Leslie and CLB Partners, Ltd., has not filed a Form 4 or a Form 5 with the SEC with respect to such sale.

Nasdaq Delisting

On May 11, 2001, our stock was delisted from the Nasdaq National Market for failure to satisfy the minimum bid price requirement for continued listing set forth in Marketplace Rule 4450 (a) or (b) and commenced trading on the OTC Bulletin Board. Effective June 25, 2003, our stock was delisted from the OTC Bulletin Board for failure to comply with NASD Rule 6530, as a result of our failure to timely file our Form 10-Q for the period ended March 31, 2003. Effective June 25, 2003, our common stock became eligible for trading on the National Quotation Bureau’s “Pink Sheets,” under the symbol “ASDS”. We reapplied for listing on the OTC Bulletin Board and recommenced trading effective September 18, 2003.

MANAGEMENT

Executive Officers

BelowDavid E. Bowe is the name and age of our soleonly executive officer as of March 31, 2003 and a brief description of his prior experience and qualifications.officer.

Executive Compensation

Summary compensation.    The following table provides summary information concerning compensation paid by us to our Chief Executive Officer (the “named executive officer”). In 2002,2003, no other person who served as an executive officer of Ascendant Solutions at any time during the year had total annual salary and bonus in excess of $100,000. In 2002, David E. Bowe’s salary was reduced and he was awarded certain performance-based options and restricted stock, in part, in exchange for the reduction in salary to be paid to him. The performance-based options vest annually over six years with the potential to vest earlier upon achievement of pre-established objectives for EBITDA of the Company. See “Compensation Committee Report—Chief Executive Compensation.” For a list of our current executive officers, see “—Executive Officers.”

Option Grants in Last Fiscal Year.    The following table provides information on stock options granted to the named executive officerThere were no option grants during the fiscal year ended December 31, 2002.2003.

Year-end option values.    The named executive officer did not exercise any stock options during the year ended December 31, 2002.2003. The following table provides information regarding the number of shares covered by both exercisable and unexercisable stock options as of December 31, 2002,2003, and the values of “in-the-money” options, which values represent the positive spread between the exercise price of any such option and the fiscal year-end value of our common stock.

1999 Long-Term Incentive Plan

Our 1999 Long-Term Incentive Plan, approved by the board of directors on May 12, 1999, and subsequently amended, currently provides for the issuance to qualified participants of up to 2,500,000 shares of our common stock pursuant to the grant of stock options. The purpose of our 1999 Long-Term Incentive Plan is to promote our interests and the interests of our stockholders by using investment interests in Ascendant Solutions, Inc. to attract, retain and motivate eligible persons, to encourage and reward their contributions to the performance of Ascendant Solutions and to align their interests with the interests of our stockholders. As of March 31, 2003,2004, unexercised options to purchase 1,340,000 shares of common stock were outstanding, having a weighted average exercise price of $0.26 per share, under the 1999 Long-Term Incentive Plan. Of these, options to purchase 10,000 shares of common stock are intended to qualify as Incentive Stock Options under Section 422 of the Code. The remaining options to purchase 1,330,000 shares of common stock are nonqualified stock options.

The outstanding options include 225,000 that were granted to Jonathan R. Bloch and 75,000 that were granted to Richard Bloch on March 14, 2002 at an exercise price of $0.24 per share. These options are exercisable in three installments beginning in March 2003 and expire in 2012. The outstanding options also include 600,000 performance based options granted to David E. Bowe and 400,000 performance based options granted to James C. Leslie on March 14, 2002 at an exercise price of $0.24 per share. The performance based options vest annually over six years beginning in March 2003 with the potential to vest earlier upon achievement of pre-established objectives for EBITDA and expire in 2012.

2002 Equity Incentive Plan

The board of directors adopted the 2002 Equity Incentive Plan on March 14, 2002 and the stockholders approved it at the 2002 Annual Meeting. The purpose of the 2002 Equity Incentive Plan is to provide a means by which selected employees of and consultants to the Company and its affiliates may be given an opportunity to acquire a proprietary interest in the Company. Under the 2002 Equity Incentive Plan, the Company may provide various types of long-term incentive awards, including Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock, Stock Reload Options and Other Stock-Based Awards, in order to retain the services of persons who are now employees of or consultants to the Company and its affiliates, to secure and retain the services of new employees and consultants, and to provide incentives for such persons to exert maximum efforts for the success of the Company and its affiliates. The 2002 Equity Incentive Plan currently provides for the issuance of awards of up to 2,000,000 shares of our common stock. As of March 31, 2003,2004, 435,000 shares of restricted stock had been granted under the 2002 Equity Incentive Plan.

401(k) Plan

The 401(k) Plan was terminated during 2001. In April 2001, we entered into an agreement with Administaff Companies, Inc. to provide personnel management services to us. Our employees arewere eligible to participate in Administaff’s 401(k) plan. The Company did not make anyWe made no contributions in 2002.

Employment Contracts

On May 11, 2001, we entered into an Executive Retention Agreement In September 2003, the Company terminated the relationship with David E. Bowe, which such agreement supersededAdministaff and terminated his prior Employment Agreement with us dated August 8, 2000. The Executive Retention Agreement terminated on December 31, 2001. See “Certain Relationships and Related Transactions” and “Compensation Committee Report—Chief Executive Officer Compensation.”began participating in a new 401(k) plan that matches 4%. Total contributions by the Company were $2,160 in 2003.

Compensation Committee Interlocks and Insider Participation

The board of directorsBoard has appointed a Compensation Committee consisting of Jonathan R. Bloch and Richard L. Bloch. The Compensation Committee had no formal meetings during 2002;2003; instead the full board performed those functions. The Compensation Committee studies, advises and consults with management respecting the compensation of our officers, and administers our stock-based compensation plans. It also recommends for the board’s consideration any plan for additional compensation that it deems appropriate. During the last fiscal year, no executive officer or employee of Ascendant Solutions served as a member of the Compensation Committee. However, since the Compensation Committee did not meet and the full board performed these functions, both David Bowe and James Leslie participated in the board’s deliberations concerning executive compensation.

Certain Relationships and Related Transactions

On July 24, 2001, James C. Leslie and CLB purchased an aggregate 5,000,000 shares of the Company’s common stock at $0.08 per shareSince May 1, 2002, we have sublet our office space from Norman Charney (former Chairman and Chief Executive Officer) and CCLP, Ltd., a Texas limited partnership, of which David Charney (son of Norman Charney) is the sole general partner, for an aggregate purchase price of $400,000.

On July 24, 2001, James C. Leslie, Richard L. Bloch, Will Cureton, and CLB entered into a Voting Agreement. Pursuant to the Voting Agreement, the parties agreed to vote all of the shares of stock of the Company held by them in the manner designated by the affirmative vote of at least a majority of Messrs. Leslie, Bloch and Cureton, each with one vote, subject to certain other provisions set forth in the Voting Agreement.

After the Company reviewed its preliminary operating results for the first quarter of 2001, as well as the overall economic and market environment for e-commerce businesses, the Company determined that the capital requirements under its existing business plan for fiscal year 2001 were greater than the capital resources then currently available. As a result, in May 2001, the Company reduced the size and scope of its operations and implemented a plan to preserve assets and reduce its expenditures, liabilities and commitments. In connection with this action, the Company effected a reduction in workforce, whereby 58 employees were terminated during May and June 2001. Additional reductions in personnel and overhead were made throughout the remainder of 2001. The Company effected a 98% reduction in its workforce through December 31, 2001. The Company currently has two remaining full time employees. In addition, as of December 31, 2002, VTE, L.P. (“VTE”)JamJen, Inc., an entity controlled by James Leslie. Mr. Leslie controls, and Richard Bloch is indirectly a limited partner in, the Company, had one full time employee, whileentity that owns the building in which the office space is leased by JamJen. We currently pay monthly rent of approximately $1,800. CRESA Capital Markets Group, L.P. (“Capital Markets”), a limited partnership we control and in which we hold an entity 80% owned byinterest, also shares the Company, employed, or used the servicesspace and pays monthly rent to JamJen of five people, including Mr. James C. Leslie, the Company’s Chairman, and certain other affiliates. In addition to our own employees, we use from time to time, and are dependent upon, various outside consultants or contractors to perform various support services including, legal, accounting and software development among others.

approximately $1,300. In connection with our sharing of office space with JamJen, we incur certain shared costs with JamJen, which gives rise to reimbursements from us to JamJen. These costs were approximately $3,400 in 2003. During the Company’s implementation of its plan to preserve assets, the Companyyear ended December 31, 2003, we paid approximately $21,400 and Capital Markets paid approximately $23,600 in rent. We have not entered into an Executive Retention Agreementa lease with Mr. BoweJamJen, but rather are renting our office space on May 11, 2001 in which the Company agreed to pay to Mr. Bowe an initial retention bonus in the amount of $125,000 and an aggregate monthly base salary of $16,666. In addition to the initial retention bonus and the base salary, the Company agreed to pay to Mr. Bowe a monthly retention bonus in the amount of $20,715. Pursuant to the terms of the Executive Retention Agreement,

Mr. Bowe and the Company also agreed to release each other from all potential claims. The Executive Retention Agreement terminated on December 31, 2001. See “Compensation Committee Report—Chief Executive Officer Compensation.”

On March 14, 2002, in an attempt to further align the interests of management and members of its Board of Directors with its stockholders, the Company granted to each of Jonathan R. Bloch, Richard L. Bloch and Melissa F. Crane, each directors of the Company, options to purchase 75,000 shares of common stock under the Company’s 1999 Long-Term Incentive Plan for an exercise price of $0.24 per share. Jonathan R. Bloch was also granted an additional 150,000 shares of common stock under such plan for an exercise price of $0.24 per share. In addition, the Company granted an aggregate 1,000,000 performance-based options under its 1999 Long-Term Incentive Plan, 400,000 to James C. Leslie, Chairman of the Board and 600,000 to David E. Bowe, President and Chief Executive Officer and director of the Company for an exercise price of $0.24 per share. These management options, having an exercise price of $0.24 per share, are intended to provide an incentive to management by vesting upon achievement of certain levels of EBITDA generated by the Company. Additionally, in March 2002, the Board of Directors authorized the cancellation of an aggregate 450,000 options previously granted to Mr. Bowe in consideration for the issuance of 425,000 shares of restricted stock under the Company’s 2002 Equity Incentive Plan. The award of performance-based options and restricted stock to Mr. Bowe and the award of performance-based options to Mr. Leslie was made, in part, in exchange for a reduction of salary paid to Mr. Bowe and for a nominal salary to be paid to Mr. Leslie for his service as Chairman of the Board. Melissa F. Crane resigned from the Board of Directors in October 2002. As a result of her resignation, Ms. Crane’s options were cancelled.

In September 2001, the Company paid The Staubach Company, of which James C. Leslie is the former President and Chief Operating Officer, $71,500 for real estate services rendered in connection with the negotiation and termination of the lease for the Company’s previous corporate office. The Company believesmonth-to-month basis. We believe that such services werearrangement has been on terms no less favorable to the Companyus than could have been obtained in a transaction with an independent third party.

As of May 1, 2002, the Company sublets its office space from JamJen, Inc. (“Landlord”), an entity controlled by James C. Leslie, the Company’s Chairman of the Board of Directors. Richard L. Bloch, one of our directors, is a member of CLB Holdings LLC, the general partner of CLB, is a limited partner of Fairways 2001 Office Partners Ltd., a limited partnership that owns the building in which the office space is leased by Landlord. Mr. Leslie controls Fairways 2001 Office Partners Ltd. This partnership owns the building in which the office space is leased by the Landlord. The Company currently pays monthly rentalso an employee of approximately $1,800. Total rent paid to current Landlord duringCapital Markets. In 2002, was approximately $15,500. In addition, VTE and Capital Markets paid rent to the Landlord of $4,000entered into a licensing and $1,633, respectively. In connectionco-marketing agreement with the sharing of office space with the Landlord, the Company incurs certain additional shared costs with the Landlord and other affiliated companies who share the office space. These costs were approximately $3,600. This gives rise to reimbursements to both the Company, the Landlord, and the other companies. In addition to the rent paid, the Company paid approximately $15,000 to an entity controlled by the Landlord in connection with the build-out of its office space. One of the other companies who shares office costs is Eligius Holding Company (“Eligius”), which is a holding company for two individuals who are associated with Capital Markets. The gross costs paid on behalf of Eligius by the Company for 2002 were approximately $9,136, which costs have been reimbursed to the Company. The Company believes that such lease arrangement has been on terms no less favorable to the Company than could have been obtained in a transaction with an independent third party.

James C. Leslie, the Company’s Chairman of the Board of Directors, also serves as an advisor to the Board of Directors of CRESA Partners, LLC, a national real estate services firm.firm, under which Capital Markets currently employs, or usesis obligated to pay 15% of its gross revenues to CRESA Partners (in excess of $500,000 annually through 2004) and to pay additional referral fees in certain circumstances. During 2003, we paid $40,000 to CRESA Partners. Mr. Leslie serves as an advisor to the servicesboard of five people, includingdirectors of CRESA Partners.

During the fourth quarter of 2003, we entered into a participation agreement (the “Participation Agreement”) with Fairways Equities LLC (“Fairways”), an entity controlled by Mr. Leslie and certainthe other affiliates.principals of Capital Markets, pursuant to which we will receive up to 20% of the profits realized by Fairways in connection with all real estate acquisitions made by Fairways. Additionally, we will have an opportunity, but not the obligation, to invest in the transactions undertaken by Fairways. Our profit participation with the principals of Fairways is subject to modification or termination by Fairways at the end of 2005 in the event that the aggregate level of cash flow (as defined in the Participation Agreement) generated by acquired operating entities has not reached $2 million for the twelve months ended December 31, 2005. During December 2003, we advanced approximately $145,000 as a deposit related to a transaction that closed later that month, at which time the deposit was returned to us. In that transaction, Fairways, through a partnership with an institutional investor, acquired the stock of a company whose sole asset was a single tenant office building and entered into a long-term credit tenant lease with the former owner of the building. During December 2003, we earned approximately $19,000 from our share of net rental payments. We do not have an investment in Fairways, but rather have a profits interest through our Participation Agreement.

During 2003, Mr. Leslie and Mr. Bowe made additional investments in VTE, L.P. of $50,000 and $12,500, respectively. In September 2002, the Company’s Boardaggregate, Mr. Leslie and Mr. Bowe have made investments of Directors authorized$100,000 and $37,500, respectively, in VTE, L.P. In the extensionaggregate, Mr. Leslie and Mr. Bowe personally own 15.5% and 5.8%, respectively, of the maturitylimited partnership interests of 800,000 warrants held by Jonathan Bloch, a director, from February 5, 2004 to February 5, 2006. The warrants have an exercise price ranging from $1.00—$3.00 per share.VTE, L.P..

COMPENSATION COMMITTEE REPORT

Ascendant Solutions’ executive compensation program is administered by the Compensation Committee of the Board of Directors. The Compensation Committee, which is composed of non-employee directors, is responsible for approving and reporting to the Board on all elements of compensation for the elected corporate officers.

General

In May 2001, the Company reduced the size and scope of its operations and implemented a plan to preserve assets and reduce its expenditures, liabilities and commitments. In connection with this action, the Company effected a reduction in workforce throughout the remainder of fiscal 2001 with the result that David E. Bowe, President, Chief Executive Officer and Chief Financial Officer, was the sole executive officer serving throughout fiscal year 2001.2003. Because Mr. Bowe’s compensation was approved by the entire Board of Directors in 2002,2003, the Compensation Committee did not meet during the fiscal year 2002. Executive compensation packages for former executive officers who have since left the Company were determined pursuant to previously approved employment agreements and our existing policies.2003.

In December 2001, the Company revised its strategic direction to seek acquisition possibilities throughout the United States, to make acquisitions or enter into other business endeavors. In connection with this action,As a result of a recent acquisition and another proposed acquisition, the Company will evaluate its need to hire additional executive officers in fiscal 20032004 and beyond. To the extent that the Company makes a determination to hire additional executive officers, a compensation package will be offered that is consistent with the policies of the Compensation Committee. The general policies of the Compensation Committee are set forth below.

Compensation Policy

Base Salary.    Our goal is to attract, retain and reward a highly competent and productive employee group. Currently, David E. Bowe is our sole executive officer. See “Chief Executive Officer Compensation” below for a discussion of Mr. Bowe’s compensation package. We expect that any future executive officers of the Company would be eligible to receive compensation packages that include a mix of base salary and long-term incentive opportunities and other employee benefits. Changes in compensation are typically based on the individual’s performance, Ascendant Solutions’ financial performance, and the competitive marketplace. Currently, we do not utilize any formal mathematical formulaeformula or objective thresholds in determining base salary adjustments. We believe that strict formulaeformulas restrict flexibility and are too rigid as the Company continues working through its acquisition and other business strategies.

1999 Long-Term Incentive Plan.    The purpose of the 1999 Long-Term Incentive Plan is to promote our interests and the interests of our stockholders by using common stock to attract, retain and motivate eligible persons, to encourage and reward their contributions to the performance of Ascendant Solutions, and to align their interests with the interests of our stockholders. Our directors, officers, employees, consultants and advisors are eligible to receive grants under this plan. With respect to all of our employees other than directors and executive officers, the Compensation Committee has the authority to administer the plan, including the discretion to determine which eligible persons will be granted stock options, the number of shares subject to options, the period of exercise of each option and the terms and conditions of such options. The entire board of directors administers the plan for directors and executive officers. No grants of stock options were made during fiscal 2003 to Mr. Bowe pursuant to the 1999 Long-Term Incentive Plan.

2002 Equity Incentive Plan.Plan.    The purpose of the 2002 Equity Incentive Plan is to provide a means by which selected employees of and consultants to the Company and its subsidiaries may be given an opportunity to acquire an equity interest in Ascendant Solutions. Our employees, officers, directors, consultants and other persons are deemed to have contributed or to have the potential to contribute to our success. The 2002 Equity Incentive Plan is administered by our Compensation Committee. If from time to time no Compensation Committee is so designated, then the 2002 Equity Incentive Plan will be administered by the Board. No grants of stock options were made during fiscal 2003 to Mr. Bowe pursuant to the 2002 Equity Incentive Plan.

Executive Compensation

Because of the Company’s reduction in workforce in 2001, David E. Bowe was the sole executive officer serving throughout fiscal year 2002.2003. See “Chief Executive Officer Compensation” below for a discussion of Mr. Bowe’s compensation package.

In March 2002, the Board of Directors appointed James C. Leslie to serveserved as the Chairman of the Board.Board throughout fiscal year 2003. In connection with such service, Mr. Leslie was paid an annual salaryretainer of $50,000 for 2002 and received 400,000 performance-based options under the Company’s 1999 Long-Term Incentive Plan. The award of options to2003. In addition, during 2003 Mr. Leslie was made, in part, in exchange for Mr. Leslie accepting the $50,000 salarypaid $45,038 by Capital Markets for his services as Chairman of the Board. The performance-based options vest annually over six years, with the potential to vest earlier upon achievement of pre-established objectives for EBITDA of the Company.services.

Chief Executive Officer Compensation

In connection with the Company’s implementation of its plan to preserve assets, the Company entered into an Executive Retention Agreement with David E. Bowe, President, Chief Executive Officer, and Chief Financial Officer, on May 11, 2001 in which the Company agreed to continue to pay a salary of approximately $200,000 and retention bonuses of approximately $270,000 in return for Mr. Bowe’s service during the Company’s implementation of such plan. The Executive Retention Agreement terminated on December 31, 2001. No grants of stock options were made during fiscal 2001 to Mr. Bowe pursuant to the 1999 Long-Term Incentive Plan.

Mr. Bowe’s salary is not currently covered by an employment agreement but onin March 14, 2002, the Board approved a salary in the amount of $118,750$100,000 be paid to Mr. Bowe during 2002 in order that Mr. Bowe continue his efforts with the Company’s asset preservation plan and acquisition and other business strategies on behalf of the Company.2003. In addition, in an attempt to further align the interests of management and members of the Board of Directors with the Company’s stockholders,March 2002, the Company granted to Mr. Bowe 600,000 performance-based options under its 1999 Long-Term Incentive Plan for an exercise price of $0.24 per share and 425,000 shares of restricted stock under the Company’s 2002 Equity Incentive Plan. The award of these performance-based options and restricted stock to Mr. Bowe was made, in part, in exchange forlight of a reduction in salary paid to Mr. Bowe. Bowe that was made to reduce corporate cash expenses. No grants under the 1999 Long-Term Incentive Plan or the 2002 Equity Incentive Plan were made to Mr. Bowe during fiscal 2003.

The performance-based options vest annually over six years, withCompensation Committee believes that the potential to vest earlier upon achievement of pre-established objectives for EBITDA of the Company. For 2003, the Board approved a base salary of $100,000 for Mr. Bowe for calendar year 2003, when considered in additionlight of the March 2002 grant of performance based options and restricted stock, is appropriate in light of his contribution and efforts with respect to the equity incentives listed above.Company’s operations, the value of his job in the marketplace. When evaluating Mr. Bowe’s contributions to the Company for the past fiscal year the Compensation Committee considered, among other things, Mr. Bowe’s ongoing efforts to seek acquisition possibilities throughout the United States, make acquisitions or enter into other business endeavors.

Company Policy on Qualifying Compensation

The Board of Directors periodically reviews the applicability of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), which disallows a tax deduction for compensation to an executive officer in excess of $1.0 million per year. In connection with the Board’s periodical review of the potential consequences of Section 162(m), the Board may, in the future, structure the performance-based portion of its executive officer compensation to comply with certain exemptions provided in Section 162(m).

The information contained in the Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference into such filing.

Compensation Committee

Jonathan R. Bloch

Richard L. Bloch

PERFORMANCE GRAPH

The following performance graph compares the performance of the Ascendant Solutions common stock to the Nasdaq Market Index and an industry peer group, selected in good faith, for the period from November 11, 1999, the first day of trading for our shares, through December 31, 2002.2003. The graph assumes that the value of the investment in our common stock and each index was $100.00 at November 11, 1999, and that all dividends were reinvested. We have not paid any dividends. Performance data is provided for the last trading day closest to each calendar year end. Ascendant Solutions has elected to change its peer group because it believes the companies reflected in the New Peer Group are more reflective of Ascendant Solutions’ business and therefore provide a more meaningful comparison of stock performance. Because of the change in the index, both the Old Peer Group Index and the New Peer Group Index are included in the following graph.

On May 11, 2001, Ascendant Solutions’ stock was delisted from The Nasdaq National Market for failure to satisfy the minimum bid price requirement for continued listing set forth in Marketplace Rule 4450(a) or (b) and commenced trading on the OTC Bulletin Board. Effective June 25, 2003, our stock was delisted from the OTC Bulletin Board for failure to comply with NASD Rule 6530, as a result of our failure to timely file our Form 10-Q for the period ended March 31, 2003. Effective June 25, 2003, our common stock became eligible for trading on the National Quotation Bureau’s “Pink Sheets,” under the symbol “ASDS”. We reapplied for listing on the OTC Bulletin Board and recommenced trading effective September 18, 2003.

COMPARISON OF 49 MONTH CUMULATIVE TOTAL RETURN

AMONG ASCENDANT SOLUTIONS, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX,

A NEW PEER GROUP AND AN OLD PEER GROUP

* $100 invested on 11/10/99 in stock or on 11/30/99 in index including reinvestment of dividends.

Fiscal year ending December 31.

AUDIT COMMITTEE REPORT

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors and operates under a written charter adopted by the Board of Directors. EachOne of the rules adopted by the SEC requires a company to disclose whether the members of its Audit Committee are “independent”. Since we are not a “listed” company, we are not subject to rules requiring the members of our Audit Committee to be independent.

Based on its review of the applicable rules of The Nasdaq National Market governing audit committee membership, the Board does not believe that either member of the Audit Committee is “independent” within the meaning of such rules. The Board does believe that both members of the Audit Committee satisfy the general definition of an independent director under Nasdaq’s Rule 4200, but that neither of them satisfies the definitionmore stringent requirements applicable to audit committees under Rule 4350 in view of independent director as establishedRichard L. Bloch’s beneficial ownership of 16.3% of our common stock and shared power to vote 35.2% of our outstanding common stock under the voting agreement described in the NASDAQ Stock Exchange Listing Standards.footnotes in “Stock Ownership” and Jonathan Bloch’s family relationship with Richard Bloch.

Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the committee reviewed the audited financial statements in the Annual Report with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

On April 2, 2003, Ernst & Young LLP notified the Company that it did not intend to stand for re-election as the Company’s independent public accountants. The Audit Committee engaged BDO Seidman, LLP as its new independent accountants with the engagement commencing as of June 25, 2003. See “Change in Company’s Certifying Accountant.”

The committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the committee under generally accepted auditing standards. The committee has discussed with the independent auditors the matters required to be discussed by Statement of Auditing Standards No. 61. The Committee has received the written disclosures and the letter from the independent auditors required by the Independence Standards Board No. 1, which included the independent auditors’ non-audit related tax work, and has discussed with the independent auditors the auditor’s independence from management and the Company.

The committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits. The committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting. The committee held one meetingfive meetings during the fiscal year ended 2002.2003.

In reliance on the reviews and discussions referred to above, the committee recommended to the board of directors (and the board has approved) that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 20022003 for filing with the Securities and Exchange Commission.

In accordance with the rules of the Securities and Exchange Commission, the foregoing information, which is required by paragraphs (a) and (b) of Regulation S-K Item 306, shall not be deemed to be “soliciting material” or to be “filed” with the Commission or subject to the Commission’s Regulation 14A, other than as provided in that Item, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, except to the

extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Audit Fees

For the year ended December 31, 2002, Ernst & Young LLP, the Company’s independent public accountants, billed the Company an aggregate $38,550 for professional services rendered for the audit of the Company’s financial statements for such period and the reviews of the financial statements included in the Company’s Quarterly Reports on Forms 10-Q during such period.

All Other Fees

For the year ended December 31, 2002, Ernst & Young LLP billed the Company an aggregate $25,432 for all other services not described above under the captions “Audit Fees”.

The Audit Committee has determined that the provision of the services covered in the preceding paragraphs of this section is compatible with maintaining the independence of Ernst & YoungBDO Seidman, LLP.

Audit Committee

Jonathan R. Bloch

Richard L. Bloch

INDEPENDENT AUDITORS

The boardEffective June 25, 2003, the Audit Committee of directorsthe Board of Directors of Ascendant Solutions, Inc. engaged BDO Seidman, LLP as the independent accountants for the year ended December 31, 2003, and has appointed Ernst & Young LLP (“Ernst & Young”)them as independent auditors to examine our consolidated financial statements for the fiscal year ending December 31, 20022004 and to render other professional services as required. As previously reported on Form 8-K filed on April 9, 2003, Representatives of BDO Seidman, LLP will be present at the meeting, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to questions.

Change in Company’s Certifying Accountant

Ernst & Young notified us that they decline to stand for re-electionLLP served as our independent public accountants.

Although not required to do so, we have historically sought shareholder ratification of our appointment of an independent auditor at our annual stockholders’ meeting. However, due toaccountants since the recent termination of Ernst & Young as our independent auditor, we have not yet completed the process of selecting an independent auditor for the 2003 fiscal year. As a result, the board of directors is not seeking shareholder ratification for its independent auditor selection at the Annual Meeting of Stockholders. The board of directors (including the Audit Committee) will continue to consider new auditors and will, in its discretion, appoint a new independent auditor who it feels would best serve the interestsinception of the Company and its stockholders.

A representative of Ernst & Young will not attend the annual meeting.

In the filing with the Securities and Exchange Commission on Form 8-K, our management represented the following:

(i)Company. On April 2, 2003, Ernst & Young LLP (“Ernst & Young”) notified Ascendant Solutions, Inc. (the “Company”)us that it did not intend to stand for re-election as the Company’s independent public accountants.

(ii)  The reports of Ernst & Young on the Company’s financial statements for the fiscal years ended December 31, 2001 and December 31, 2002 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

(iii) In connection with the audits of the Company’s financial statements for each of the fiscal years ended December 31, 2001 and December 31, 2002, and in the subsequent interim periods, there were no disagreements with Ernst & Young on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures which, if not resolved to the satisfaction of Ernst & Young, would have caused Ernst & Young to make reference to such matter in connection with its report.

(iv) During the two most recent fiscal years and through the date of dismissal there have been no reportable events (as defined in Regulation S-K Item 304(a)(1)(v)) except for the following matter related to the Company’s internal control:

As disclosed in the Company’s 10-K filed March 31, 2003, Item 14, management concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. However, due to the limited size of the Company’s staff, there is inherently a lack of segregation of duties related to the authorization, recording, processing and reporting of transactions. We periodically assess the cost versus benefit of adding the resources that would remedy this situation and currently, with the concurrence of the board of directors, do not consider the benefits to outweigh the costs of adding additional staff in light of the limited number of transactions related to the company’s operations.

In connection with the audit of the consolidated financial statements for the year ended December 31, 2002, Ernst & Young LLP advised the Company that the lack of segregation of duties is a material weakness. A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control components does not reduce to a relatively low level the risk that errors or fraud in amounts that would be material in relation to the consolidated financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.

(v)  The Company has furnished Ernst & Young with a copy of the foregoing disclosure and requested Ernst & Young to furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not it agreesagreed with the foregoing statements. A copy of the letter of Ernst & Young to the Securities and Exchange Commission, dated April 9, 2003, is filed as Exhibit 16 to the Company’s Current Report on Form 8-K filed on April 9, 2003.

(vi)  The Company’s Board of Directors has authorized Ernst & Young to respond fully to any inquiries made by any successor accountants.

Our Board

Additionally, the Company has furnished Ernst & Young and BDO Seidman with a copy of Directors is engagedthis disclosure and acknowledged that each such firm may present its views in a brief statement to be included in this Proxy Statement if it believes that the above statements regarding the change in the process of selecting new independent accountants and the Audit Committee held a meeting on Friday, April 11, 2003 to discussCompany’s certifying accountant are incorrect or incomplete. Neither Ernst & Young’s decision not to standYoung nor BDO Seidman submitted such a statement for re-election and the Company’s internal controls. We will file a Form 8-K when the selection of the new auditor has been made.

The Audit Committee intends to adopt policies and procedures requiring the pre-approval of non-audit services that may be provided to the Company by its independent auditor. The Company will also comply with the provisions of the Sarbanes-Oxley Act of 2002 and the related SEC rules pertaining to auditor independence and audit committee pre-approval of audit and non-audit services.inclusion in this Proxy Statement.

Fees Paid to Ernst & Young

The following table shows the fees that we paid or accrued for the audit and other services provided by Ernst & Young for fiscal years 2002 and 2001.year 2002.

Fees Paid to BDO Seidman

The following table shows the fees that we paid or accrued for the audit and other services provided by BDO Seidman for fiscal year 2003.

Audit Fees ($38,550; $63,500).    This category includes the audit of our annual financial statements included in our Form 10-K Annual Report, review of financial statements included in our Form 10-Q Quarterly Reports and services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements and the preparation of an annual “management letter” on internal control matters.

Audit-Related Fees ($0.00; $0.00).    This category consists of assurance and related services by Ernst & Young LLPthe independent auditor that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.”

Tax Fees ($11,865; $15,225).    This category consists of professional services rendered by Ernst & Young LLPthe independent auditor for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees ($13,567; $23,850).    This category consists of fees for consultation regarding equity incentive plans, revenue recognition, other compliance matters and other miscellaneous items.

All non-audit services provided to the Company by its independent auditor must be pre-approved by the Audit Committee.

ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS

Stockholder Proposals.    Our bylaws provide that stockholder proposals and director nominations by stockholders may be made in compliance with certain advance notice, informational and other applicable requirements. With respect to stockholder proposals (concerning matters other than the nomination of directors), the individual submitting the proposal must file awritten notice with the Assistant Corporate Secretary of Ascendant Solutions at 16250 Dallas Parkway, Suite 102, Dallas, Texas 75248 setting forth certain information, including the following:

The notice must be received by the Assistant Corporate Secretary no later than December 24, 200320, 2004 (assuming that the Company’s 20042005 Annual Meeting of Stockholders is held on a date that is within 30 days from the date on which the 20032004 Annual Meeting was held) for inclusion in the proxy statement and form of proxy relating to that meeting. In order to introduce an item of business at an annual meeting that is not included in the proxy statement the stockholder’s notice must be received by the Assistant Corporate Secretary not less than 30 days nor more than 60 days prior to the meeting, unless less than 40 day’s notice or prior public disclosure of the date of the meeting is given or made to stockholders, in which case notice by the stockholder must be so received not later than the close of business on the 10th day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date was made.

Board Nominations.    A stockholder may recommend a nominee to become a director of Ascendant Solutions by giving the Assistant Corporate Secretary of the Company (at the address set forth above) awritten notice setting forth certain information, including the following:

As to each person whom the stockholder proposes to nominate:

As to the proposing stockholder:

Such nominationsnotice must be madereceived by the Assistant Corporate Secretary pursuant to the same advance notice requirements forthat apply to stockholder proposals set forth in the preceding section. We do not maintain a formal nominating committee.

Generally.    Our annual meetings are customarily held during May each year. Copies of our bylaws are available upon written request made to the Assistant Corporate Secretary of Ascendant Solutions at the above address. The requirements described above do not supersede the requirements or conditions established by the Securities and Exchange CommissionSEC for stockholder proposals to be included in our proxy materials for a meeting of stockholders. The chairman of the meeting may refuse to bring before a meeting any business not brought in compliance with applicable law and our bylaws.

OTHER MATTERS

The board of directorsBoard knows of no matters other than those described in this Proxy Statement which are likely to come before the Annual Meeting. If any other matters properly come before the Annual Meeting, or any

adjournment thereof, the persons named in the accompanying form of proxy intend to vote the proxies in accordance with their best judgment, and in accordance with Rule 14a-4 promulgated under the Exchange Act.

In addition, pursuant to Rule 14a-4 of the Exchange Act, the Company may exercise discretionary voting authority at the 2004 Annual Meeting under proxies it solicits to vote on a proposal made by a stockholder that the stockholder does not seek to include in the Company’s proxy statement pursuant to Rule 14a-8, unless the Company is notified about the proposal no later than March 9, 2004 (assuming that the Company’s 2004 Annual Meeting of Stockholders is held on a date that is within 30 days from the date on which the 2003 Annual Meeting was held), and the stockholder satisfies the other requirements of Rule 14a-4(c).

The CompanyWe will provide without charge a copy of the Company’sour Annual Report on Form 10-K for the fiscal year ended December 31, 2002,2003, including the financial statements, to each stockholder upon written request to Susan K. Olson, Assistant Corporate Secretary, Ascendant Solutions, Inc., 16250 Dallas Parkway, Suite 102, Dallas, Texas 75248.

Appendix A

ASCENDANT SOLUTIONS, INC.

Charter of the Audit Committee

of the Board of Directors

(Revised April 13, 2004)

This Charter specifies the scope of the responsibilities of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Ascendant Solutions, Inc. (the “Company”) and the manner in which those responsibilities shall be performed, including its structure, processes and membership requirements. The primary purpose of the Committee is to oversee the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements. The Committee shall also review the qualifications, independence and performance, and approve the terms of engagement of the Company’s independent auditor, review the performance of the Company’s internal audit function and prepare any reports required of the Committee under rules of the Securities and Exchange Commission (“SEC”).

Management of the Company is responsible for the preparation, presentation and integrity of the Company’s financial statements. Management is responsible for maintaining appropriate accounting and financial reporting principles, policies, internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent accountants are responsible for planning and carrying out proper audits and reviews, including reviews of the Company’s financial statements prior to the filing of reports with the SEC and other procedures. In fulfilling their responsibilities hereunder, it is recognized that members of the Committee are not full-time employees of the Company and are not, and do not represent themselves to be, accountants or auditors by profession or experts in the fields of accounting and auditing. It is not the duty or responsibility of the Committee or its members to conduct any type of auditing or accounting review or procedure, and each member of the Committee shall be entitled to rely on (i) the integrity of those persons and organizations within and outside the Company that it receives information from and (ii) the accuracy of the financial and other information provided to the Committee by such persons or organizations, absent actual knowledge to the contrary (which shall be promptly reported to the Board).

The Company shall provide appropriate funding, as determined by the Committee, to permit the Committee to perform its duties under this Charter, to compensate its advisors and to compensate any registered public accounting firm engaged for the purpose of rendering or issuing an audit report or related work or performing other audit, review or attest services for the Company. The Committee, at its discretion, has the authority to initiate special investigations, and, hire special legal, accounting or other outside advisors or experts to assist the Committee, as it deems necessary to fulfill its duties under this Charter. The Committee may also perform such other activities consistent with this Charter, the Company’s Bylaws and governing law, as the Committee or the Board deems necessary or appropriate.

The Committee shall comprise one or more directors selected by the Board. Each member of the Committee must be able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement. The members of the Committee shall be appointed by the Board and shall serve until their successors are duly elected and qualified or their earlier resignation or removal. Any member of the Committee may be replaced by the Board. Unless a chairman is elected by the full Board, the members of the Committee may designate a chairman by majority vote of the full Committee membership.

III.

Meetings

The Committee shall meet as often as it determines, but not less frequently than quarterly. A majority of the members shall represent a quorum of the Committee, and, if a quorum is present, any action approved by at least a majority of the members present shall represent the valid action of the Committee. The Committee may form and delegate authority to subcommittees, or to one or more members of the Committee, when appropriate. The Committee shall meet with management and the independent auditor in separate executive sessions as appropriate. The Committee shall meet with the independent auditor and management on a quarterly basis to review the Company’s financial statements and financial reports. The Committee shall maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.

To fulfill its responsibilities and duties, the Committee shall:

1.    Be directly and solely responsible for the appointment, compensation, retention, oversight (including resolution of disagreements between management and the independent auditor regarding financial reporting) and, if necessary, termination and replacement of any independent auditor engaged by the Company.

2.    Periodically review and discuss with the independent auditor (i) the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, and (ii) any formal written statements received from the independent auditor consistent with and in satisfaction of Independence Standards Board Standard No. 1, as amended, including without limitation, descriptions of (x) all relationships between the auditor and the Company, (y) any disclosed relationships or services that may impact the independent auditor’s objectivity and independence and (z) whether any of the Company’s senior finance personnel were recently employed by the independent auditor.

3.    Evaluate annually the qualifications, performance and independence of the independent auditor and report to the Board on its conclusions, together with any recommendations for additional action.

4.    Consult with the independent auditor to assure the rotation of the lead audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit every five years.

5.    Approve in advance the engagement of the independent auditor, including fees and other terms of any such engagement, for all audit services and non-audit services in accordance with applicable law (including SEC and Nasdaq rules), based on independence, qualifications and, if applicable, performance.

6.    Meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit.

7.    Establish policies for the hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company, taking into account the impact of such policies on auditor independence.

8.    Regularly review with the independent auditor any significant difficulties encountered during the course of the audit, any restrictions on the scope of work or access to required information and any significant disagreement among management and the independent auditor in connection with the preparation of the financial statements. Review with the independent auditor any accounting adjustments that were noted or proposed by the auditor but that were “passed” (as immaterial or otherwise), any “management” or “internal control” letter or schedule of unadjusted differences issued, or proposed to be issued, by the auditor to the Company, or any other material written communication provided by the auditor to the Company’s management.

9.    Review with the independent auditor the critical accounting policies and practices used by the Company, including the auditor’s assessment of the quality, not just acceptability, of the accounting principles, all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that the independent auditor has discussed with management, the ramifications of the use of such alternative disclosures and treatments and the treatment preferred by the independent auditor.

1.    Review and discuss with management and the independent auditor the Company’s annual audited financial statements and any certification, report, opinion or review rendered by the independent auditor.

2.    Review and discuss with management and the independent auditor the Company’s quarterly financial statements.

3.    Review and discuss with management and the independent auditor the Company’s disclosure under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing in the Company’s periodic reports.

4.    Review and discuss earnings press releases.

5.    Periodically meet with management and with the independent auditor in separate sessions to discuss any matters that the Committee, management or the independent auditors believe should be discussed privately with the Committee.

6.    Review with management and the independent auditor any significant judgments made in management’s preparation of the financial statements and the view of each as to appropriateness of such judgments.

7.    Review with management its assessment of the effectiveness, integrity and adequacy of the Company’s internal control structure and procedures for financial reporting (“Internal Controls”) and, when relevant SEC rules are in effect, review annually with the independent auditor the attestation to and report on the assessment made by management.

8.    Review with management its evaluation of the Company’s procedures and controls designed to assure that information required to be disclosed in its periodic public reports is recorded, processed, summarized and reported in such reports within the time periods specified by the SEC for the filing of such reports (“Disclosure Controls”).

9.    Review and discuss with management and the independent auditor any off-balance sheet transactions or structures and their effect on the Company’s financial results and operations, as well as the disclosure regarding such transactions and structures in the Company’s public filings.

10.    Review with management and the independent auditor the effect of any regulatory and accounting initiatives on the financial statements. Review any major issues regarding accounting principles and financial statement presentations, including any significant changes in selection of an application of accounting principles.

11.    Review any analyses prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including the effects of alternative GAAP methods on the financial statements.

12.    Review any special audit steps adopted in light of any material control deficiencies. Review with the independent auditor and management the extent to which changes or improvements in financial or accounting practices, as approved by the Committee, have been implemented.

1.    Review with the chief executive and chief financial officer of the Company as well as the auditors any report on significant deficiencies in the design or operation of the Internal Controls and any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s Internal Controls.

2.    Review and approve any related-party transactions, after reviewing each such transaction for potential conflicts of interests and other improprieties, including the adequate disclosure thereof.

3.    Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

4.    As required by applicable law, present to the Board for adoption a Code of Business Conduct and Ethics (“Code of Conduct”) applicable to all employees and directors which meets the requirements of the SEC and any applicable securities market or exchange, including the adoption of procedures for monitoring and enforcing compliance with such Code of Conduct. If such Code of Conduct is adopted, as requested by the Board, review and investigate conduct alleged by the Board to be in violation of the Company’s Code of Conduct, and adopt as necessary or appropriate, remedial, disciplinary, or other measures with respect to such conduct.

5.    Prepare the report required by the rules of the SEC to be included in the Company’s annual proxy statement.

6.    Regularly report to the Board on the Committee’s activities, recommendations and conclusions.

7.    Periodically review and reassess the Charter’s adequacy and recommend any proposed changes to the Board for approval.

DETACH PROXY CARD HERE

1.    ELECTION OF DIRECTORS:

1.      ELECTION OF DIRECTOR:

S C A N     L I N E

Please mark, date and sign as your name appears hereon. If acting as executor, administrator, trustee, guardian, etc., you should so indicate when signing. If the signer is a corporation, please sign the full corporate name, by a duly authorized officer and indicate the title of such officer. If shares are held jointly, each stockholder named should sign. If you receive more than one proxy card, please date and sign each card and return all proxy cards in the enclosed envelope.

ASCENDANT SOLUTIONS, INC.

REVOCABLE PROXY

Annual Meeting of Stockholders – May 22, 200319, 2004

This Proxy is solicited on behalf of the Board of Directors

The undersigned, as a holder of Common Stock of Ascendant Solutions, Inc. (the “Company”), hereby appoints David E. Bowe and Susan K. Olson as Proxies, with full power of substitution, to represent and to vote as designated on this card, all of the shares of Common Stock of the Company which the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held on May 22, 2003,19, 2004, or any adjournment thereof.

Unless otherwise marked, this Proxy will be voted FOR the election of the Class A nomineesB nominee for the Board of Directors. If any other business is presented at the Annual Meeting of Stockholders, the Proxy will be voted in accordance with the discretion of the Proxies named above.

The Board of Directors recommends a vote“FOR”the nominees listed below.

ASCENDANT SOLUTIONS, INC.

P.O. BOX 11474

NEW YORK, N.Y. 10203-0474