<PAGE>



                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                       ----------------------------------
                                   FORM 10-QSB/A

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

                           Commission File No. 0-23587

                             CHAPMAN HOLDINGS, INC.
                 (Name of small business issuer in its charter)

             Maryland                                    52-206977
-----------------------------               ------------------------------------
(State or Other Jurisdiction                (I.R.S. Employer Identification No.)
 of Incorporation)

          401 East Pratt Street, Suite 2800, Baltimore, Maryland 21202
      --------------------------------------------------------------------
                     (Address of Principal Executive Office)

Issuer's telephone number, including area code:      (410) 625-9656

             -------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days:
                       Yes [X ]No  [   ]

Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:

                    Common Stock, Par Value $0.001 Per Share
                                (Title of Class)


As of September 30, 1999, 2,953,622 shares of the issuer's common stock, par
value $0.001 per share, were outstanding.

Transitional Small Business Disclosure Format:  Yes [  ]  No [X]


<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                          <C>
PART I......................................................................  1

      ITEM 1      FINANCIAL STATEMENTS......................................  1
      ITEM 2      MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.......................  7


PART II..................................................................... 14

      ITEM 2      CHANGES IN SECURITIES AND USE OF PROCEEDS................. 14
      ITEM 6      EXHIBITS AND REPORTS ON FORM 8-K.......................... 14

</TABLE>


<PAGE>


                                     PART I

                              FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

         The consolidated financial statements for the nine months ended
September 30, 1999 have not been audited, but in the opinion of management,
contain all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position and results of operations of
the Company as of such date and for such periods. The unaudited consolidated
financial statements should be read in conjunction with the Consolidated
Financial Statements of the Company and the Notes thereto appearing in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1998. The
results of operations for the nine months ended September 30, 1999 are not
necessarily indicative of the results of operations that may be expected for the
year ending December 31, 1999 or any future periods.


                                       1

<PAGE>

                     CHAPMAN HOLDINGS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                 AS OF DECEMBER 31, 1998, AND SEPTEMBER 30, 1999

<TABLE>
<CAPTION>

                                                                    December 31,     September 30,
                                                                       1998             1999
                                                                    ------------     ------------
                                                                                     (Unaudited)
<S>                                                                 <C>              <C>

ASSETS:
    Cash and cash equivalents                                       $  3,090,000     $  1,775,000
    Cash deposits with clearing organization                           2,389,000        2,477,000
    Investments                                                          204,000          239,000
    Securities owned                                                   2,080,000        1,813,000
    Receivables from brokers and dealers                                 331,000          576,000
    Receivables from affiliates                                          380,000          237,000
    Income taxes receivable                                              294,000          300,000
    Advances to officer/employee                                         657,000          723,000
    Office equipment, net                                                 38,000           95,000
    Prepaids and other assets                                            583,000          570,000
    Intangible assets                                                    145,000          113,000
    Deferred tax asset                                                    14,000          345,000
                                                                    ------------     ------------
          Total assets                                              $ 10,205,000     $  9,263,000
                                                                    ============     ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
    Accounts payable and accrued expenses                           $    261,000     $    676,000
    Margin loan payable                                                2,559,000        2,050,000
    Accrued compensation                                                 243,000          238,000
    Deferred rent                                                         78,000           45,000
                                                                    ------------     ------------
          Total liabilities                                            3,141,000        3,009,000
                                                                    ------------     ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
    Common stock, $.001 par value, 20,000,000 shares authorized,
        2,953,622 shares issued and outstanding                            3,000            3,000
    Additional paid-in capital                                         7,903,000        7,903,000
    Accumulated deficit                                                 (842,000)      (1,652,000)
                                                                    ------------     ------------
           Total stockholders' equity                                  7,064,000        6,254,000
                                                                    ------------     ------------
           Total liabilities and stockholders' equity               $ 10,205,000     $  9,263,000
                                                                    ============     ============

</TABLE>

              The accompanying notes are an integral part of these
                          consolidated balance sheets.

                                       2
<PAGE>

                     CHAPMAN HOLDINGS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999

            AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                 Three Months Ended              Nine Months Ended
                                                    September 30,                  September 30,
                                             ---------------------------     ---------------------------
                                                1998            1999            1998            1999
                                             -----------     -----------     -----------     -----------
<S>                                          <C>             <C>             <C>             <C>
REVENUE:
    Commissions                              $   749,000     $   895,000     $ 1,909,000     $ 3,243,000
    Underwriting and management fees             233,000         175,000         376,000         554,000
    Interest and dividends                        81,000          58,000         247,000         163,000
    (Loss) gains on trading                     (174,000)        (63,000)       (174,000)        246,000
                                             -----------     -----------     -----------     -----------
          Total revenue                          889,000       1,065,000       2,358,000       4,206,000
                                             -----------     -----------     -----------     -----------
EXPENSES:
    Compensation and benefits                    546,000         739,000       1,317,000       2,324,000
    Floor brokerage and clearing fees            102,000         174,000         302,000         528,000
    Communications                                43,000          84,000         130,000         216,000
    Occupancy, equipment rental, and
       depreciation                              136,000         160,000         331,000         489,000
    Travel and business development               70,000          49,000         167,000         260,000
    Professional fees                            133,000         225,000         192,000         656,000
    Other operating expense                      152,000         334,000         326,000         874,000
                                             -----------     -----------     -----------     -----------
          Total expenses                       1,182,000       1,765,000       2,765,000       5,347,000
                                             -----------     -----------     -----------     -----------
          Loss from continuing operations
              before income tax benefit         (293,000)       (700,000)       (407,000)     (1,141,000)
INCOME TAX BENEFIT                                62,000         236,000         102,000         331,000
                                             -----------     -----------     -----------     -----------
          Net loss                           $  (231,000)    $  (464,000)    $  (305,000)    $  (810,000)
                                             ===========     ===========     ===========     ===========

BASIC AND DILUTIVE EARNINGS PER
    SHARE DATA:
          Net loss                           $     (0.08)    $     (0.16)    $     (0.11)    $     (0.27)
                                             ===========     ===========     ===========     ===========
    Weighted average shares outstanding        2,954,000       2,954,000       2,744,000       2,954,000
                                             ===========     ===========     ===========     ===========

</TABLE>

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

                                       3
<PAGE>

                     CHAPMAN HOLDINGS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999

<TABLE>
<CAPTION>

                                                                    Nine months ended
                                                                      September 30,
                                                              ---------------------------
                                                                  1998            1999
                                                              -----------     -----------
                                                                       (Unaudited)

<S>                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                  $  (305,000)    $  (810,000)
    Adjustments to reconcile net loss to net cash used in
       operating activities:
       Depreciation/amortization expense                               --          38,000
       Unrealized loss/(gain) on securities owned                  36,000        (246,000)
       Deferred tax assets                                             --        (331,000)
       Effect from changes in assets and liabilities-
          Deposits with clearing organization                  (1,599,000)        (88,000)
          Receivables from brokers and dealers                    (48,000)       (245,000)
          Income tax receivable                                        --          (6,000)
          Receivables from affiliates                             801,000         143,000
          Prepaids and other assets                              (309,000)         13,000
          Net assets from discontinued operations                   6,000              --
          Accounts payable and accrued expenses                   120,000         415,000
          Accrued compensation                                     47,000          (5,000)
          Deferred rent                                            (8,000)        (33,000)
          Payable to affiliated partnership                        (5,000)             --
          Income taxes payable                                   (131,000)             --
                                                              -----------     -----------
              Net cash used in operating activities            (1,395,000)     (1,155,000)
                                                              -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of office equipment, net                              (4,000)        (63,000)
    Purchase of investments                                       (69,000)        (35,000)
    Proceeds from sale of investments                                  --           4,000
    Advances to officer/employee                                 (448,000)        (66,000)
                                                              -----------     -----------
              Net cash used in investing activities              (521,000)       (160,000)
                                                              -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Net proceeds from issuance of common stock                  6,812,000              --
                                                              -----------     -----------
NET INCREASE (DECREASE) IN CASH AND CASH
    EQUIVALENTS                                                 4,896,000      (1,315,000)
CASH AND CASH EQUIVALENTS, beginning of year                      211,000       3,090,000
                                                              -----------     -----------
CASH AND CASH EQUIVALENTS, end of year                        $ 5,107,000     $ 1,775,000
                                                              ===========     ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash Paid for:
    Interest                                                  $     3,000     $    66,000
                                                              ===========     ===========
    Income taxes                                              $    22,000     $     5,000
                                                              ===========     ===========

</TABLE>

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

                                       4
<PAGE>

                      CHAPMAN HOLDINGS, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1999

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION

Chapman Holdings, Inc. provides securities brokerage and investment banking
services. The accompanying unaudited consolidated financial statements
include the accounts of Chapman Holdings, Inc. (CHI) and its wholly owned
subsidiaries, The Chapman Co. and Charles A. Bell (collectively, the Company).
All significant intercompany accounts and transactions have been eliminated
in consolidation. The accompanying consolidated financial statements are
presented on the accrual basis of accounting in accordance with generally
accepted accounting principles. 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 as of 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.

INTERIM FINANCIAL STATEMENTS

The consolidated financial statements for the three and nine months ended
September 30, 1998 and 1999, are unaudited, but in the opinion of management,
such financial statements have been presented on the same basis as the audited
consolidated financial statements and include all adjustments, consisting only
of normal recurring adjustments necessary for a fair presentation of the
financial position and results of operations, for the periods.

As permitted under the applicable rules and regulations of the Securities and
Exchange Commission, these financial statements do not include all disclosures
normally included with audited consolidated financial statements, and
accordingly, should be read in conjunction with the consolidated financial
statements and notes thereto as of December 31, 1998, included in the Company's
Form 10K-SB filed. The results of operations presented in the accompanying
consolidated financial statements are not necessarily representative of
operations for an entire year and because of the nature of the Company's
operations can be materially different between periods.

PLAN OF MERGER

Subsequent to September 30, 1999, the Company signed a merger agreement which is
subject to stockholders approval and the completion of an initial public stock
offering of common stock by eChapman.com, among other things, to merge into a
wholly owned subsidiary of eChapman.com. This merger would result in the
Company, Chapman Capital Management Holdings, Inc. and Chapman Insurance
Holdings, Inc. becoming wholly-owned subsidiaries of eChapman.com. eChapman is
a newly formed corporation designed to bring these companies together to take
advantage of the unique opportunities presented by the growth of the Internet.
eChapman.com is owned by the major stockholder of the Company.

This planned merger and the operations of eChapman.com after the merger are
subject to certain risks. The negative impact from these risks could have
material adverse effects on the future results of operations and financial
position

                                       5
<PAGE>

of the Company. These risk items include the fact that eChapman.com has not
launched a web site and has no internet-related operating history; the web
site must be designed, developed, hosted by a service provider and marketed;
eChapman.com must raise at least $20 million from its planned public offering
to complete this merger; the eChapman.com brand must be successful in order
for it to attract users, advertisers and strategic partners; and the success
of the "Domestic Emerging Markets" strategy through the use of the internet.

SECURITIES OWNED AND NOT YET PURCHASED

Securities owned consist of trading proprietary stock, which is carried at
market. The proprietary stock is primarily stock of CHI and Chapman Capital
Management Holdings, Inc. (CCMH), an affiliate. The Chapman Co. is a market
maker for CHI and for CCMH and, thus, holds this stock in inventory. As of
September 30, 1999, the Chapman Co. held 121,133 shares of common stock of CHI.
The proprietary stock was purchased on margin.

EARNINGS PER SHARE

As of September 30, 1999, there were 43,900 stock options outstanding; however
the common stock equivalents of these options was not included in the diluted
earnings per share as the stock options are antidilutive.

RELATED PARTY TRANSACTIONS

In July 1999, the Company borrowed $3,220,000 from Chapman Capital Management
Holdings, Inc., an affiliate, in connection with the Company's participation
in a municipal underwriting syndicate. The note was payable on demand and
accrued interest at an interest rate equal to the brokers call rate as in
effect from time to time. The loan and accrued interest were repaid September
14, 1999.

                                       6
<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Note Regarding Forward-Looking Information

         Certain statements under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere in this
Report constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, general economic and business conditions in the
Company's market area, inflation, fluctuations in interest rates, changes in
government regulations, competition and the ability of the Company to implement
its business strategy and other risks discussed in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1998, and in this and other
reports filed by the Company.

         Forward-looking statements are intended to apply only at the time they
are made. Moreover, whether or not stated in connection with a forward-looking
statement, the Company undertakes no obligation to correct or update a
forward-looking statement should the Company later become aware that it is not
likely to be achieved. If the Company were to update or correct a
forward-looking statement, investors and others should not conclude that the
Company will make additional updates or corrections thereafter.

         The following discussion should be read in conjunction with the
financial statements contained in Item 1 of Part I of this Form 10-QSB.

RESULTS OF OPERATIONS

The following table reflects items in the Statements of Operations as dollar
amounts and as percentages of total revenue.

                     CHAPMAN HOLDINGS INC. AND SUBSIDIARIES
                      Consolidated Statement of Operations


<TABLE>
<CAPTION>
                                                                     Three Months Ended September 30,
                                                       ------------------------------------------------------------
                                                                  1999                           1998
                                                       --------------------------       ---------------------------
                                                                    Percentage of                     Percentage of
                                                       Amount       Total Revenue       Amount        Total Revenue
                                                       ------       -------------       ------        -------------
<S>                                                 <C>             <C>               <C>             <C>
                                                                                 (Unaudited)
Revenue:
              Commissions                           $   895,000          84.0%        $   749,000          84.3%
              Underwriting and management fees          175,000          16.4             233,000          26.2
              Interest and dividends                     58,000           5.5              81,000           9.1
              Loss on trading                           (63,000)         (5.9)           (174,000)        (19.6)
                                                    -----------          ----           -----------        ----

              Total revenue                           1,065,000         100.0%            889,000         100.0
                                                    -----------          ----           -----------        ----

Expense:
              Compensation and benefits                 739,000          69.4%            546,000          61.4
              Floor Brokerage and clearing              174,000          16.3             102,000          11.5
              Communications                             84,000           7.9              43,000           4.8
              Occupancy and equipment                   160,000          15.0             136,000          15.3
              Professional fees                         225,000          21.1             133,000          15.0
              Travel and business development            49,000           4.6              70,000           7.9
              Other operating expense                   334,000          31.4             152,000          17.1
                                                    -----------          ----           -----------        ----

              Total expenses                          1,765,000         165.7           1,182,000         133.0
                                                    -----------          ----           -----------        ----

Loss from continuing operations before
 income tax benefit                                    (700,000)        (65.7)           (293,000)        (33.0)

Income tax benefit                                      236,000          22.2              62,000           7.0
                                                    -----------          ----           -----------        ----

Net loss                                            $  (464,000)        (43.6)%        $  231,000         (13.0)%
                                                    ===========          ====           ===========        ====
</TABLE>



                     CHAPMAN HOLDINGS INC. AND SUBSIDIARIES
                      Consolidated Statement of Operations


<TABLE>
<CAPTION>
                                                                   Nine Months Ended September 30,
                                                       -------------------------------------------------------------
                                                                1999                              1998
                                                       ---------------------------       ---------------------------
                                                                     Percentage of                     Percentage of
                                                       Amount        Total Revenue       Amount        Total Revenue
                                                       ------        -------------       ------        -------------
<S>                                                 <C>              <C>              <C>              <C>
                                                                                 (Unaudited)
Revenue:
              Commissions                           $ 3,243,000          77.1%        $ 1,909,000          81.0%
              Underwriting and Management fees          554,000          13.2             376,000          15.9
              Interest and dividends                    163,000           3.9             247,000          10.5
              Gain on trading                           246,000           5.8            (174,000)         (7.4)
                                                    -----------          ----         -----------          ----

              Total revenue                           4,206,000         100.0           2,358,000         100.0
                                                    -----------          ----         -----------          ----

Expense:
              Compensation and benefits               2,324,000          55.2           1,317,000          55.9
              Floor Brokerage and clearing              528,000          12.6             302,000          12.8
              Communications                            216,000           5.1             130,000           5.5
              Occupancy and equipment                   489,000          11.6             331,000          14.0
              Professional fees                         656,000          15.6             192,000           8.2
              Travel and business development           260,000           6.2             167,000           7.1
              Other operating expenses                  874,000          20.8             326,000          13.8
                                                    -----------          ----         -----------          ----

              Total expenses                          5,347,000         127.1           2,765,000         117.3
                                                    -----------          ----         -----------          ----

Loss from continuing operations before
 income tax benefit                                  (1,141,000)        (27.1)           (407,000)        (17.3)

Income tax benefit                                      331,000           7.9             102,000           4.3
                                                    -----------          ----         -----------          ----

Net loss                                            $  (810,000)        (19.2)        $  (305,000)        (13.0)%
                                                    ===========          ====         ===========          ====
</TABLE>


         Total revenue increased $176,000, or 19.8% to $1,065,000 for the three
months ended September 30, 1999 from $889,000 for the prior comparable period.
Total revenue increased by $1,848,000, or 78.4%, to $4,206,000 for the nine
months ended September 30, 1999 from $2,358,000 for the prior comparable period.
Revenue was higher due to an increase in commission revenue and municipal
designations combined with a gain on trading.


                                       7
<PAGE>

         Commissions revenue increased by $146,000, or 19.5% to $895,000 for
the three months ended September 30, 1999 from $749,000 for the prior
comparable period. Commission revenue increased by $1,334,000, or 69.9%, to
$3,243,000 for the nine months ended September 30, 1999 from $1,909,000 in
the comparable prior period. The increase was due to growth in revenues from
municipal designations which increased $613,000, or 190.0%, to $936,000 for
the nine months ended September 30, 1999 from $323,000 for the prior
comparable period. The company participated in 36 municipal designations
during the nine months ended September 30, 1999 compared to 28 in the prior
comparable period. Commission revenue from the sale of equities increased
$318,000, or 21.3%, to $1,807,000 for the nine months ended September 30,
1999 from $1,489,000 for the prior comparable period. Commission revenue on
fixed income securities increased $375,000, or 396.6%, to $471,000 for the
nine months ended September 30, 1999 from $96,000 for the prior comparable
period. This increase in fixed income can be attributable to favorable
interest rates during the first nine months of the year.

         Underwriting and management fees revenue decreased $58,000, or 24.9%
to $175,000 for the three months ended September 30, 1999 from $233,000 for
the prior comparable period. Underwriting and management fee revenue
increased by $178,000, or 47.3%, to $554,000 for the nine months ended
September 30, 1999 from $376,000 for the prior comparable period. The
decrease for the quarter is due to a decrease in underwriting syndication's of
$112,000 offset by an increase in management fees of $54,000. The overall
increase is due to an increase in underwriting syndications of $58,000, or
33.3% to $232,000 from $174,000 and an increase in management and advisory
fees of $126,000, or 62.7% to $327,000 from $201,000 for the nine months
ended September 30, 1999.

         Interest and dividends revenue decreased by $23,000, or 28.4% to
$58,000 for the three months ended September 30, 1999 from $81,000 for the
prior comparable period. Interest and dividend revenues decreased by $84,000,
or 34.0%, to $163,000 for the nine months ended September 30, 1999 from
$247,000 for the prior comparable period. This decrease is due to lower
earnings due to lower cash balances resulting from the Company's business
expansion strategy.

         The unrealized loss on trading was $63,000 for the three months
ended September 30, 1999. An unrealized gain on trading of $246,000 was
reported for the nine months ended September 30, 1999. The Company's
unrealized gain on trading is attributable to an increase in the market value
of the market making securities inventory.

         Total expenses increased by $583,000, or 49.3%, $1,765,000 for the
three months ended September 30, 1999 from $1,182,000 for the prior
comparable period. Total expenses increased by 2,582,000, or 93.4%, to
$5,347,000 for the nine months ended from $2,765,000 for the prior

                                       8

<PAGE>

comparable period. The largest components of the increase in expenses are
associated with the opening of new regional offices in selected markets,
business development costs associated with the Company's marketing strategy
and increased staffing pursuant to the Company's business expansion strategy.

         Compensation and benefits increased by $193,000, or 35.3%, to
$739,000 for the three months ended September 30, 1999 from $546,000 for the
prior comparable period. As a percentage of total revenue, these expenses
were 69.4% and 61.4% respectively. Compensation and benefits increased by
$1,007,000, or 76.5%, to $2,324,000 for the nine months ended September 30,
1999 from $1,317,000 for the prior comparable period. As a percentage of
revenue, these expenses were 55.2% and 55.9% respectively. Compensation
expense includes sales commissions paid to brokers and varies in relation to
changes in commission revenue. The increase in compensation and benefits is
attributable to the increase in commissions paid to brokers due to increased
retail and municipal sales volume and the addition of 29 employees compared
to September 30, 1998.

         Floor brokerage and clearing fees increased by $72,000, or 70.6%, to
$174,000 for the three months ended September 30, 1999 from $102,000 for the
prior comparable period. Floor brokerage and clearing fees increased by
$226,000, or 74.8%, to $528,000 for the nine months ended September 30, 1999
from $302,000 for the prior comparable period. This increase is mainly due to
an increase in the number of broker's and related transaction volume offset
by a slight decline in the average dollar amount per transaction as a result
of changing clearing firms.

         Communications expense increased by $41,000, or 95.3%, to $84,000
for the three months ended September 30, 1999 from $43,000 for the prior
comparable period. Communications expense increased by $86,000, or 66.2%, to
$216,000 for the nine months ended September 30, 1999 from $130,000 for the
prior comparable period. This increase was primarily attributable to
increased usage associated with new offices and the Company's business
expansion strategy.

         Occupancy and equipment expense increased by $24,000, or 17.6%, to
$160,000 for the three months ended September 30, 1999 from $136,000 for the
prior comparable period. Occupancy and equipment expense increased by $158,000,
or 47.7%, to $489,000 for the nine months ended September 30, 1999 from
$331,000 for the prior comparable period. The increase is mainly attributable
to the opening of new offices and the Company's business expansion strategy.

         Professional fees increased by $92,000, or 69.2%, to $225,000 for the
three months ended September 30, 1999 from $133,000 for the prior comparable
period. Professional fees increased by $464,000, or 241.7%, to $656,000 for
the nine months ended September 30, 1999 from $192,000 for the prior
comparable period. The increased use of legal services, independent audit
review services and marketing consultants is directly related to the
Company's business expansion strategy.

         Travel and business development expense decreased by $21,000, or 30.0%,
to $49,000 for the three months ended September 30, 1999 from $70,000 for the
prior comparable period. Travel and business development expense increased by
$93,000, or 55.7%, to $260,000 for the

                                       9

<PAGE>

nine months ended September 30, 1999 from $167,000 for the prior comparable
period due to increased travel related to business development activities.

         Other operating expenses increased by $182,000, or 119.7%, to $334,000
for the three months ended September 30, 1999 from $152,000 for the prior
comparable period. Other operating expenses increased by $548,000, or 168.1%,
to $874,000 for the nine months ended September 30, 1999 from $326,000 for
the prior comparable period. This increase primarily reflects increases in
advertising, telephone, postage, printing and filing fees.

         The income tax benefit increased by $174,000, or 280.6% to a tax
benefit of $236,000 for the three months ended September 30, 1999 from
$62,000 for the prior comparable period. The income tax benefit increased by
$229,000, or 224.5%, to a tax benefit of $331,000 for the nine month period
ended September 30, 1999 from $102,000 for the prior comparable period. The
income tax benefit is due to a increase in loss from continuing operations
for the nine months ended September 30, 1999.

The net loss increased by $233,000, or 100.9%, to $464,000 for the three
months ended September 30, 1999 from a net loss of $231,000 for the prior
comparable period. The net loss increased by $505,000, or 165.6%, to $810,000
for the nine months ended September 30, 1999 from a net loss of $305,000 for
the prior comparable period. The change was a result of items discussed above.


                                       10
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         The Company's assets are reasonably liquid with a substantial majority
consisting of cash and cash equivalents, investment securities, and
receivables from other broker-dealers and the company's clearing agent, all
of which fluctuate depending upon the levels of customer business and trading
activity. Receivables from broker-dealers and the Company's clearing agent
turnover rapidly. Both the Company's total assets as well as the individual
components as a percentage of total assets may vary significantly from period
to period because of changes relating to customer demand, economic and market
conditions, and proprietary trading strategies. The Company's total assets as
of September 30, 1999 were $9,263,000.

         Failure to maintain the required net capital may subject a firm to
suspension or expulsion by the NASD, the SEC and other regulatory bodies and
ultimately may require its liquidation. In 1995 and 1998, The Chapman Co. and
Mr. Chapman entered into consent agreements with the NASD regarding alleged
violations of the net capital rules in late 1993 and early 1994 and early
1996, respectively. The 1998 consent agreement also addressed alleged
violations of Rule 144 under the Securities Act with respect to the alleged
1996 net capital violation. The Chapman Co. and Mr. Chapman were censured and
jointly fined $30,000, and Mr. Chapman was suspended from association with
The Chapman Co. for 10 days pursuant to the 1995 consent agreement. Pursuant
to the 1998 consent agreement, The Chapman Co. was censured and fined $7,500,
and Mr. Chapman was censured, fined $7,500 and required to requalify by
examination as a Financial and Operations Principal. Mr. Chapman has not
requalified as a Financial and Operations Principal. The Chapman Co. has
exceeded all net capital requirements since such alleged violations.

         The Chapman Co., the Company's wholly-owned broker-dealer subsidiary,
is subject to the net capital rules of the NASD. As such, The Chapman Co. is
subject to certain restrictions on the use of capital and its related
liquidity. The net capital position of The Chapman Co. as of September 30,
1999 was $355,000, which was $105,000 in excess of its minimum NASD net
capital requirement.

         Subsequent to September 30, 1999, the Company signed a merger
agreement which is subject to stockholders approval and the completion of an
initial public stock offering of common stock by eChapman.com, among other
things, to merge into a wholly owned subsidiary of eChapman.com. This merger
would result in the Company, Chapman Capital Management Holdings, Inc. and
Chapman Insurance Holdings, Inc. becoming wholly-owned subsidiaries of
eChapman.com. eChapman is a newly formed corporation designed to bring these
companies together to take advantage of the unique opportunities presented by
the growth of the Internet. eChapman.com is owned by the major stockholder of
the Company.

         This planned merger and the operations of eChapman.com after the
merger are subject to certain risks. The negative impact from these risks
could have material adverse effects on the future results of operations and
financial position of the Company. These risk items include the fact that
eChapman.com has not launched a web site and has no internet-related
operating history; the web site must be designed, developed, hosted by a
service provider and marketed; eChapman.com must raise at least $20 million
from its planned public offering to complete this merger; the eChapman.com
brand must be successful in order for it to attract users, advertisers and
strategic partners; and the success of the "Domestic Emerging Markets"
strategy through the use of the internet.

         On December 14, 1998, The Chapman Co. advanced to Chapman Limited
Partnership I $19,536 for payment of certain taxes and related payments,
interest, and penalties. On October 22, 1999, Chapman Holdings, Inc. advanced
the partnership $49,037 for payment of certain taxes and related payments. As
of September 30, 1999, all of these advances remained outstanding. Future
lease payments will be applied to such advances until repaid in full.

         The Company's cash and cash equivalents were $1,775,000 as of September
30, 1999.

         The Company's overall capital and funding needs are continually
reviewed to ensure that its capital base can support the estimated needs of its
business. These reviews take into account business needs as well as the
Company's regulatory capital requirements. The Company believes that its
capital structure is adequate for current operations.

                                       11
<PAGE>

YEAR 2000 SOFTWARE ISSUE

         As the Year 2000 approaches, existing software programs and
operating systems must be reviewed to determine if they can accommodate
information that employs dates after December 31, 1999. As of September 30,
1999, Chapman Holdings' Year 2000 readiness costs were approximately $115,000
to cover assessment of systems, internal testing, point-to-point testing,
training, replacement and modification of existing systems, and contingency
planning.

         Chapman Holdings' estimates its Year 2000 readiness costs at
approximately $133,000. Chapman Holdings estimates that its total Year 2000
readiness costs will be approximately $230,000.

         Chapman Holdings has prepared a written plan detailing Chapman
Holdings' software and operating systems readiness issues for the Year 2000.
The plan identifies mission-critical and non mission-critical operating
systems of Chapman Holdings. Working with its hardware and software vendors
and other third parties to prepare for the Year 2000, Chapman Holdings
substantially completed necessary hardware and software renovations during
the second quarter of 1999. We tested during the third quarter of 1999 to
determine the effect of our readiness efforts, and we are currently working
with our hardware and software vendors and other third parties to complete
our Year 2000 contingency plan.

         Chapman Holdings' Year 2000 readiness plan involves four phases:

         PHASE I--ASSESSMENT. This phase involved the identification of all
systems that are date dependent. This phase was substantially completed
during the first quarter of 1998.

         PHASE II--RENOVATION. This phase involved the identification and
replacement of mission-critical systems which Chapman Holdings was unable to
update or certify as Y2K ready. This phase commenced in the first quarter of
1998 and was substantially completed in the second quarter of 1999. Remaining
activities relate to monitoring and following up with third parties as part
of our contingency planning activities in Phase IV.

         PHASE III--TESTING. This phase involves testing all systems that are
date dependent and upgrading all non[cad 220]compliant systems. Chapman Holding
completed this phase during the third quarter of 1999.

         PHASE IV--CONTINGENCY PLANNING. This phase involves an assessment of
all mission-critical systems for potential problems that would result from
Year 2000 related failures of software or hardware and also the development
of plans and strategies to continue operations should such failures occur.
The Chapman Co. has prepared an initial plan and will continue to refine and
expand it as required through the first quarter of 2000.

         Within Chapman Holdings' Year 2000 readiness plan, systems are
identified as "mission-critical" and "non mission-critical". Systems were
identified as "mission critical" if the loss of the system, software or
facility would cause an immediate stoppage of activity or a significant
impairment of a core business area. Systems were determined to be non-Y2K
ready based on information from manufacturers. Systems were identified as
"not mission critical" if loss of the system, although inconvenient, would
not cause an immediate stoppage of activity or significant impairment of a
core business area. The following table summarizes Chapman Holdings' estimate
of the status of mission-critical elements of Chapman Holdings' Year 2000
readiness plan.

<TABLE>
<CAPTION>
                                                                NUMBER OF
                                      NUMBER OF   NUMBER OF     CRITICAL
                          NUMBER OF   CRITICAL    CRITICAL     SYSTEMS FOR
                          CRITICAL     SYSTEMS   SYSTEMS IN    WHICH PHASE
Y2K PLAN PHASE             SYSTEMS    COMPLETED    PROCESS    NOT APPLICABLE
--------------           ----------  ----------  -----------  --------------
<S>                      <C>         <C>         <C>          <C>
Assessment............      32           32          --            --
Renovation............      32           23          --             9
Testing...............      32           23          --             9
Contingency Planning..      32           --          32            --

</TABLE>
         Chapman Holdings has relationships with third parties that may have
computer systems that are not Year 2000 ready. Chapman Holdings has
identified the third parties upon which it relies for mission-critical
systems and has contacted such third parties to confirm that their systems
are Year 2000 ready. Responses from the majority of these vendors during the
first and second quarters indicated that they expected to reach readiness by
the third quarter of 1999. Chapman Holdings continues to monitor the progress
of its vendors and suppliers. Chapman Holdings' contingency plan calls for
the replacement, whenever feasible, of any vendors of mission critical
systems that have not certified readiness by September 30, 1999. As of
November 11, 1999, only four such vendors had not verified readiness. We have
identified alternative vendors in the event these vendors are not year 2000
ready.

         While Chapman Holdings believes that it is taking prudent and
necessary action to become with Year 2000 requirements, there can be no
assurance that the Year 2000 issue will not result in information or
communications systems interruptions. Any such interruptions could be
expected to have a material adverse effect on Chapman Holdings' business,
financial condition, results of operations and business prospects and may
subject Chapman Holdings to liability to its clients. Chapman Holdings is
currently building upon its existing contingency plan in the event that
Chapman Holdings or third parties do not successfully complete their
readiness efforts, or if vendors or third parties controlling systems
critical to Chapman Holdings are unable to confirm that their systems will be
Year 2000 ready. These efforts may result in additional costs in excess of
current allocations and estimates.
                                      12
<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 2- CHANGES IN SECURITIES AND USE OF PROCEEDS

         On February 23, 1998, the Company's Registration Statement on Form SB-2
(File No. 333-43487) pertaining to its initial public offering of shares of the
Company's common stock, par value $0.001 (the "Offering") was declared
effective.

         The Company has applied Offering proceeds in the amount of
approximately $3 million to expand net capital to participate in corporate and
government finance transactions, $384,000 to expand market-making and research
capabilities, $150,000 to implement the DEM strategy, $1,093,000 to expand sales
and marketing efforts, $1,234,000 to hire sales personnel to staff additional
sales offices and corporate finance staff to implement the DEM strategy and
$1,000,000 for working capital and general corporate purposes.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.       Exhibits required by Item 601 of Regulation S-B:

         Exhibit 10.1: Fully Disclosed Clearing Agreement between the Pershing
                       Division, Donaldson, Lufkin & Jenrette Securities
                       Corporation and The Chapman Co. dated March 16, 1999.

         Exhibit 10.2: Agreement and Plan of Merger by and among
                       eChapman.com, Inc., CHI Merger Subsidiary, Inc. and the
                       Company dated November 15, 1999 (Filed as Exhibit 10.3
                       to eChapman.com, Inc. Registration Statement on Form SB-2
                       (File No. 333-90987) as filed with the Securities and
                       Exchange Commission on November 15, 1999 and hereby
                       incorporated by reference)

         Exhibit 27:   Financial Data Schedule


                                       13
<PAGE>


                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                   CHAPMAN HOLDINGS, INC.


                             By:   /s/ NATHAN A. CHAPMAN, JR.
                                   ----------------------------------------
                                   Nathan A. Chapman, Jr.
                                   President, Chairman of the Board and Director

                                   /s/ DEMETRIS B. BROWN
                                   ----------------------------------------
                                   Demetris B. Brown
                                   Chief Financial Officer
                                   (Principal Financial Officer and Principal
                                   Accounting Officer)


Date:  November 15, 1999

                                       14
<PAGE>

                                  EXHIBIT INDEX

Exhibit No.                Description of Exhibit

10       Fully Disclosed Clearing Agreement between the Pershing Division,
         Donaldson, Lufkin & Jenrette Securities Corporation and The Chapman Co.
         dated March 16, 1999.

27       Financial Data Schedule

                                       15