<PAGE>   1

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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

                                    FORM 10-K


                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

     FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

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

For the transition period from _____________________ to________________________

                        Commission file number: 000-29319
                               EPRISE CORPORATION
             (Exact name of registrant as specified in its charter)

         DELAWARE                                                 04-3179480
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                                Identification No)

                             200 CROSSING BOULEVARD
                              FRAMINGHAM, MA 01702
                    (Address of principal executive offices)

                                 (508) 661-5200
              (Registrant's telephone number, including area code)

            SECURITIES REGISTERED PURSUANT TO 12(b) OF THE ACT: None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

COMMON STOCK, PAR VALUE $0.001; PREFERRED SHARE PURCHASE RIGHTS, $0.01 PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                               Yes _X_    No __

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

                                       [ ]

The aggregate market value of the voting stock held by stockholders who are not
affiliates of the registrant was approximately $19.6 million based on the last
reported sale price of the registrant's Common Stock on the Nasdaq National
Market on March 15, 2001.

As of March 15, 2001, there were outstanding 24,926,964 shares of the
registrant's Common Stock, $0.001 par value per share.


<PAGE>   2


                       DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement to be filed by Eprise in connection
with its annual meeting of stockholders, to be held on May 15, 2001, are
incorporated by reference in Part III of this annual report on Form 10-K. The
proxy statement, except for the parts that have been specifically incorporated
herein by reference, shall not be deemed "filed" as part of this annual report
on Form 10-K.


                                       2
<PAGE>   3


                               EPRISE CORPORATION
                         2000 ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS


PART I

Item 1.  Business
Item 2.  Properties
Item 3.  Legal Proceedings
Item 4.  Submission of Matters to a Vote of Security Holders

PART II

Item 5.  Market for Registrant's Common Stock and Related Stockholder Matters
Item 6.  Selected Financial Data
Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Item 8.  Financial Statements and Supplementary Data
Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

PART III

Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions

PART IV

Item 14. Exhibits, Consolidated Financial Statement Schedules and Reports on
         Form 8-K

Signatures


                                       3
<PAGE>   4


                                     PART I

ITEM 1. BUSINESS

     Some of the statements in this Form 10-K constitute forward-looking
statements that involve risks and uncertainties. Any statements that are not
purely historical are forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, including statements
regarding expectations, beliefs, intentions or strategies regarding the future.
All forward-looking statements included in this document are based on the
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such forward-looking statement. Actual events or
results may differ materially from the results discussed herein. In evaluating
these statements, you should specifically consider various important factors,
including those outlined under "Factors Affecting Future Results" below and the
risk factors set forth in other reports or documents we file from time to time
with the Securities and Exchange Commission, such as our quarterly reports on
Form 10-Q. These factors may cause our actual results to differ materially from
any forward-looking statements.

OVERVIEW

     Eprise provides software products and services that enable businesses to
create and publish effective Web content quickly and easily. Our core product,
Eprise Participant Server, enables a business organization to distribute this
Web content management function among the appropriate individuals within the
enterprise who are charged with particular aspects of the Web business. These
individuals need no knowledge of programming languages or other technical skills
to use Eprise Participant Server, thereby minimizing a customer's reliance on
information technology professionals and consultants. Eprise Participant Server
allows businesses to carefully manage changes to Web content through rules
contained in the software which govern Web content access and approval rights.
Eprise Participant Server enables an enterprise to have Web site content which
is dynamic, up to the minute and responsive to the needs of customers, business
partners, employees and others who visit the enterprise's Web site. Our product
can be easily integrated with a customer's existing Web site infrastructure and
it can be extended to provide enhanced, customized functionality. We believe
that Eprise Participant Server's comprehensive, out-of-the-box functionality
makes it the most cost-effective Web content management solution currently
available.

     Eprise was incorporated in Delaware in 1992 under the name Inner Circle
Technologies, Inc. In 1994 it changed its name to NovaLink USA Corporation, and
became Eprise Corporation in 1997.

INDUSTRY BACKGROUND

     The Internet has evolved into a critical sales, service and communications
channel for businesses. This development has permanently altered the way
organizations manage relationships with customers, suppliers, business partners,
employees and others interested in the business enterprise. Business
organizations worldwide have realized that an effective Web site can help the
organization to achieve higher revenues as well as to build and strengthen
relationships with its many constituencies.

     Effective Web sites must communicate business information to one or more
target audiences. In order to do this, many enterprises maintain:

     -    an intranet site, which is used for internal communications with and
          among employees and which may contain information about corporate
          policies and employee benefits, other non-public announcements, and
          internal product and sales support.

     -    an extranet site, which is used for restricted external communications
          with business partners and which may contain information about
          products and pricing, distribution channels, contract terms and
          conditions and promotional material.


                                       4
<PAGE>   5


     -    an Internet site, which is used for communications with customers and
          the general public and which often contains information about
          products, customer service and support, company contacts, and investor
          and financial information.

    Because Web sites provide critical business information, they must be
carefully managed and kept up to date. Given the large amount of information
that can be made available on an organization's Web sites, and the number of
people who may be responsible for delivering and maintaining that information, a
business must determine who will contribute and manage what content, and how and
to whom that content will be presented. This means that software which manages
Web site content must:

     -    distribute Web site content contribution, editing and approval
          functions to the most appropriate individuals in the organization to
          enable them to modify content quickly and easily without the
          assistance of technical personnel;

     -    organize and store content so that it is presented consistently
          throughout the Web site, and so that it can be easily formatted,
          retrieved, re-used and revised over time;

     -    target content to the intended audience that is consistent with the
          organization's business strategy and marketing messages; and

     -    permit integration with existing Web site content and software,
          without the need for complex conversions or extensive programming.

     Businesses have found it difficult and expensive to build in-house systems
or to customize commercially available software to manage their Web site
content. Businesses first attempted to manage the content of their Web sites
through in-house software development efforts. These efforts often failed
because the organization did not have sufficient resources and internal
technical personnel. These difficulties led to the development of commercially
available software that businesses could use to manage their Web site content
without substantial commitment of internal technical personnel. Many of these
solutions required a high degree of costly and time-consuming customization in
connection with both implementation and ongoing Web site management and
enhancement. Customized software solutions have also made businesses dependent
upon proprietary technology, which is difficult to integrate with other existing
and future business applications.

     Because of these difficulties, business organizations require a new
approach to Web content management. This new approach requires software that is
as fully functional as possible upon installation, without requiring extensive
customization or consulting services. The software should be easy for
non-technical personnel to use, should be easy to integrate with the user's
existing databases, information systems and other technology and it should
permit a business to manage the content of its Web site on a decentralized basis
so that the appropriate individuals within the organization are responsible for
managing the content. Finally, the software should permit the business
organization to deliver timely, targeted information to its various audiences.

OUR SOLUTION

     Eprise Participant Server provides a solution that addresses all of the
requirements for effective Web content management software.

     Comprehensive, Out-of-the-Box Functionality. We believe that Eprise
Participant Server is the most complete out-of-the-box content management
software solution available today, with built-in functionality that results in
low implementation and customization costs.

     Rapid Deployment. Typically, a customer can quickly install Eprise
Participant Server and begin using it commercially within a week. Our software
is designed to be intuitive and easy to use, so there is no need for technical
scripting or programming. This means that business people can begin contributing
to and modifying content on the Web site immediately after deployment,
dramatically reducing the time to market of the enterprise's Web initiatives.


                                       5
<PAGE>   6


     Easy Integration with Existing Web Site Infrastructure and Technology.
Eprise Participant Server uses widely accepted, non-proprietary industry
standards to communicate with other Internet infrastructure software. This
permits a customer to easily integrate Eprise Participant Server with its
back-office systems, databases, e-commerce and application servers and existing
Web content. In addition, customers can use readily available software
development tools to adapt and customize Eprise Participant Server to address
their specific needs. Our architecture also permits a software developer to
enhance the functionality of our product to address a customer's specific
requirements.

     Distribution of Content Management Responsibility. Eprise Participant
Server distributes Web site content creation, editing and approval
responsibilities throughout an organization, enabling the appropriate
individuals to implement and manage the Web site, in most cases without
assistance from a Webmaster or other technical personnel. At the same time,
Eprise Participant Server enables an organization to establish rules to control
those aspects of the Web site which are most appropriately managed by the
Webmaster, such as rules to provide a consistent look and feel. As a result of
this distribution of responsibility, a customer using our solution can provide
more timely and targeted information that is consistent with the organization's
business objectives.

     Delivery of Information Targeted to Particular Audiences. Through the
creation of unique business rules and individually assigned roles, Eprise
Participant Server allows the appropriate people within an enterprise to create
targeted, up-to-date content for the specific audiences that the enterprise is
trying to reach. Similarly, by assigning roles to Web site users within and
outside the enterprise, such as "employee," "manager" or "business partner," and
allowing those persons to select user preferences relevant to their role or the
available content, an enterprise can ensure that each member of its audience is
receiving the most relevant content.

     Because Eprise Participant Server has all of this functionality, we believe
that it is the most cost-effective Web content management solution currently
available. Using Eprise Participant Server, a customer can create and maintain a
dynamic Web site that can be seamlessly integrated with other aspects of its
business with minimal reliance on internal or external information technology
professionals.

OUR STRATEGY

     Our objective is to become a leading provider of Web content management
solutions. To achieve this goal we will seek to expand our product offerings to
provide new releases of Eprise Participant Server and to add new products that
respond to our customers' requirements. We will also seek to achieve greater
geographical coverage and increased market penetration by expanding our
distribution capabilities; continue to form and develop strategic alliances with
systems integrators, application service providers and original equipment
manufacturers to give us greater marketing presence and sales coverage; and
expand our international presence to take advantage of the growing global demand
for Web content management solutions.


                                       6
<PAGE>   7


PRODUCTS

     The Eprise product line consists of Eprise Participant Server, which is our
Web content management software, and a series of add-on products for Eprise
Participant Server. The following table highlights the key functionality and
features of Eprise Participant Server.

              Eprise Participant Server Functionality and Features

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
        Product                                    Features
     Functionality
----------------------------------------------------------------------------------------
<S>                          <C>
Content Management           - Enterprise-wide distributed content contribution and
                               editing
                             - Categorization and organization of content
                             - Ability to store and retrieve previous versions of
                               content
                             - Ability to track access and editing history
                             - Re-useable page components (i.e., headers, footnotes)
                               and templates
----------------------------------------------------------------------------------------
User Management              - Ability to assign roles to view and manage content
                             - Authentication of user identity using a variety of
                               industry standards
                             - Ability of Web site visitors to select content
                               preferences
                             - Ability to configure user interface to create easy-to-use
                               forms for business managers
----------------------------------------------------------------------------------------
Business Rule Management     - Ability to provide for multiple levels of content
                               approval
                             - Ability to create rules governing an individual's rights
                               to view, modify or manage content
                             - Ability to target content to appropriate
                               audiences
----------------------------------------------------------------------------------------
</TABLE>

     Eprise Participant Server provides all of the functionality shown in the
above chart directly to non-technical business people within an enterprise, in
most cases without intervention by information technology personnel.

     Eprise also offers a variety of add-on products to maximize the effective
use of Eprise Participant Server by the broadest range of users. The current
add-on products offered by Eprise are shown in the following table.


                                       7
<PAGE>   8


                             Eprise Add-On Products

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
        PRODUCT                                FEATURES
------------------------------------------------------------------------------------------
<S>                       <C>
Integration Agents        -  Facilitates communication and exchange of information and
                             services between Eprise Participant Server and e-commerce
                             and applications servers, with XML or HTML delivery

  for ASP                    --  Supports products based on Microsoft Active Server
                                 Pages including Site Server Commerce

  for Cold Fusion            --  Supports Allaire Cold Fusion Application Servers

  for Java technologies      --  Supports Java Server Pages applications and other
                                 applications servers that use Java technologies

------------------------------------------------------------------------------------------
Full Text Options         -  Allows a searchable full-text index to be created for content
                             managed in Eprise Participant Server

                          -  Provides permission system for search requests and
                             displaying search results

  for Windows NT             --  Uses Microsoft Index Server that ships with Windows
                                 NT 4.0 and Windows 2000

  for Solaris                --  Uses technology from Verity, a leading full-text search
                                 provider for the Unix platform
------------------------------------------------------------------------------------------
Companion for Microsoft   -  Allows business users to create content using Microsoft
Word                         Word
------------------------------------------------------------------------------------------
</TABLE>

     We typically charge for Eprise Participant Server and add-on product
licenses based on the number of servers the customer will need to support its
Web sites, but occasionally we will provide our customers with the option to
license our products on an enterprise, divisional, or site license basis. As a
result, if the customer's Web sites prosper and site visits and transaction
volume grow, the client will need to purchase more licenses for the additional
servers deployed.

TECHNOLOGY

     Eprise Participant Server incorporates a number of important technological
and design features. Its open architecture is based on the programming language
XML and supports other programming standards such as COM and Java through our
optional add-ons. The user interface for Eprise products is delivered through a
Web browser and is based upon standard Web programming languages such as HTML,
DHTML, Java and JavaScript. Eprise Participant Server is also portable, allowing
customers to use different database products for their information repository,
such as Microsoft SQL Server or Oracle, as well as different operating systems
and Web servers such as Windows NT and Solaris.

     Eprise Participant Server's architecture is highly scalable because it uses
technology that allows dynamically rendered content to be stored in memory to
improve transactional performance and speed, as well as a two-tier architecture
that permits multiple Eprise servers to be "clustered" to share a database
server.

     Eprise Participant Server is also extensible, allowing a business to create
customized Web pages for specialized business process automation. Eprise
Participant Server's business rule management can incorporate information
provided by other corporate systems, such as directories. Using widely available
Web software development tools, a customer can easily integrate Eprise
Participant Server with other systems, such as application and e-commerce
servers, sales and service systems and back-office systems.


                                       8
<PAGE>   9


SERVICES

     While the effective use of Eprise Participant Server requires little or no
customization, we do offer a variety of optional services to our customers.

     Eprise Advantage Program. Through our Eprise Advantage Program, available
for a standard fee, an Eprise professional will evaluate a customer's Internet
initiatives in conjunction with its overall business strategy. Based on this
evaluation, we will deliver a discovery and design analysis providing
recommendations on how Eprise Participant Server can best be used to implement
the customer's business goals, either through the customer's own technology
department, Eprise professional services or third party service providers.

     Professional Services. If a customer wishes to work with Eprise in the
implementation phase of a project, including projects arising out of Eprise
Advantage Program recommendations, our professional services team will provide
development services ranging from graphics design to building applications using
complex database and development tools, either on a fixed fee or a time and
materials basis.

     Customer Training. Our professional services team provides customer
training, either as a component of our Eprise Advantage Program or as a
stand-alone service offering for a fixed fee.

     Maintenance and Support. We provide technical support and maintenance
services through annual maintenance agreements with our customers. These
services include delivery of software product bug fixes, enhancements and new
versions of Eprise Participant Server. We deliver support and maintenance
services primarily through telephone and e-mail communications. We also address
customer questions involving product operation, installation and application
development.

CUSTOMERS

     To date, we have licensed Eprise Participant Server to over 130 clients in
a broad spectrum of industries, including the financial services, technology and
manufacturing industries. The following is a partial list of clients that have
licensed our products and that we believe are representative of our overall
client base: American Cancer Society, American Express, American Heart
Association, Bausch & Lomb, BP Amoco, Eastman Chemical, Hewlett-Packard, Lincoln
Financial Group, McKesson HBOC, Providence Health Systems, Sanwa Bank, Sharp
Electronics, and Sulzer Management.

SALES, MARKETING AND BUSINESS DEVELOPMENT

     We license our product through both our direct sales force and indirect
sales channels. As of March 2, 2001, our sales, marketing and business
development organization consisted of 79 individuals, 72 of whom were based in
North America, including 30 direct sales representatives, who are supported by
15 sales support personnel, and 13 marketing personnel.

     Direct Sales. To date, we have sold our products primarily through our
direct sales force. We currently have nationwide sales coverage, organized
principally by geographic regions. In addition, we have direct sales coverage in
Europe. We intend to increase our direct sales force in the U.S. and overseas.
We are focusing our sales efforts on well-defined market segments where the need
for our solution is greatest and where technology innovation is the norm, such
as the financial services, technology and manufacturing industries. We target
enterprise-level accounts for whom the Internet is a fundamental part of their
corporate strategy.

     Marketing. We support our sales efforts through various marketing efforts
to generate brand awareness and to qualify leads for the sales organization. We
intend to continue to invest selectively in high value marketing programs to
support our marketing efforts.

     Business Development. It is the goal of our business development staff to
extend our market reach and increase our sales opportunities through the
establishment of relationships with systems integrators, Web developers and


                                       9
<PAGE>   10


application service providers who build customer solutions based on Eprise
Participant Server. In many cases, these business partners will recommend a Web
content management solution to their customers as part of the e-business
application that they deliver. We anticipate that these business partners will
reduce our current three- to six-month sales cycle while adding value to the
planning and deployment phase of projects that require an Eprise solution. Our
current business partner arrangements include lead sharing, product training,
joint marketing and access to engineering resources. These relationships are
important to our strategy because of our business partners' technical knowledge
and extensive customer relationships across many industries. Eprise has formal
agreements with more than 30 such partners, including EDS, Agency.com, Lante,
Sira Technologies, Proxicom, and PSINet. We intend to devote significant
resources to developing these relationships further.

     Our Business Development organization is also focused on forming and
expanding alliance relationships with complementary technology vendors. Because
Eprise Participant Server is generally used as a central element of an
enterprise-scale Web presence, our product must be able to integrate with
leading Web infrastructure software applications, including application servers,
personalization vendors, search technologies, security and authentication
protocols, and portal solutions. We seek to identify and establish alliances
with leading providers of this key technology. The scope of these relationships
varies but may include lead sharing, co-marketing, joint development of
pre-integrated solutions, and joint selling. To date, our alliance relationships
include Microsoft, Sun, IBM, Art Technology Group (ATG), BEA, Idiom, Screaming
Media, and Plumtree.

     ISV Sales. We believe that many independent software vendors (ISVs) have
recognized a need to offer sophisticated content management functionality
directly to their customers. Rather than building a content management product
themselves, or purchasing technology through an acquisition, some ISVs are
licensing content management products such as Eprise Participant Server,
embedding them in their own solution, and then selling and supporting the end
product directly. Eprise recently has begun to license its products to ISVs,
including Haht Commerce. While Eprise offers a significant per-copy discount to
ISV customers, our cost of sales and associated operating expenses are also
dramatically reduced.

     Global Expansion. We currently sell our products primarily in the United
States, but are taking steps to expand our global sales efforts to domestically
based global companies and companies based outside the United States. We intend
to do this with a combination of direct sales and support personnel, indirect
sales channels and partnerships. We have formed alliances with a Japanese
integrator, Teijin Systems Technology Ltd., to co-develop and distribute
Japanese-language versions of our products, and with a Stockholm-based systems
integrator, Adcore, to distribute our products. Additionally, we have
established subsidiary offices in Reading, U.K. and Munich and Hamburg, Germany,
and are in the process of forming partnerships in the European market.

RESEARCH AND DEVELOPMENT

     We have invested significantly in research and development to enhance our
current products and develop new products. Our research and development expenses
were approximately $2.1 million for the year ended December 31, 1998,
approximately $2.4 million for the year ended December 31, 1999, and
approximately $5.8 million for the year ended December 31, 2000. We expect that
we will increase the dollar amount of our research and development expenditures
substantially in the future. As of March 2, 2001, 46 employees were engaged in
research and development activities and we plan to continue to hire additional
engineers to further our research and development activities.

     Our research team, led by the Chief Technology Officer, identifies market
opportunities and develops prototypes for new product features, product updates,
add-ons and new products. This team is responsible for defining and guiding our
product strategy and vision, and maintaining our reputation as an innovator in
content management solutions. Our development team, led by the Senior Vice
President of Products, designs, develops and enhances new and existing products.
This team is responsible for product development, quality and assurance testing,
product documentation, product release and maintenance, and overall execution of
our product development strategy. We intend to continue to expand and enhance
the capabilities of Eprise Participant Server, as well as develop and extend our
content management product offerings, to provide our customers with complete
flexibility in choosing the most desirable environment for creating and managing
content.


                                       10
<PAGE>   11


COMPETITION

     The market for Web content management solutions is intensely competitive,
subject to rapid technological changes and significantly affected by new product
introductions and other market activities of industry participants. Many of our
competitors currently have a greater market share than Eprise. We have four
primary sources of competition:

     -    file-based content management systems from providers such as
          Interwoven.

     -    legacy document management systems from providers such as Documentum;

     -    specialized application servers from providers such as Vignette;

     -    other specialized content management providers such as Intranet
          Solutions; and

     -    in-house development efforts by potential clients and partners.

     In addition, we currently partner with a number of companies that provide
complementary products such as Web tools and application servers. Any of these
companies might introduce competitive product offerings in the future.

     We believe that the primary factors upon which we compete favorably are the
out-of-the-box functionality and rapid deployment capability of Eprise
Participant Server and Eprise Participant Server's ease of integration with our
customers' existing and future application server products. Other areas in which
we compete favorably include the ability to distribute content management
responsibilities within an organization, the ability to deliver information
targeted to specific audiences, and the cost-effectiveness of our product.

     Despite these competitive advantages, we also face competitive
disadvantages because many of our competitors have longer operating histories
and significantly greater financial, technical, marketing and other resources
than we have. As a result, they may be able to undertake more extensive
promotional efforts, adopt more aggressive pricing strategies, and offer more
attractive terms to purchasers than we.

     We expect competition to persist and intensify in the future. Competition
could materially and adversely affect our ability to obtain revenues from
license fees from new or existing customers and service fees from existing
customers. Further, competitive pressure may force us to reduce the price of our
products. In either case, our operating results and financial condition would be
materially and adversely affected.

PROPRIETARY RIGHTS AND LICENSING

     Our success depends upon our ability to maintain the proprietary aspects of
our technology and operate without infringing the proprietary rights of others.
We rely on a combination of trademark, trade secret and copyright law, and
contractual restrictions, to protect the proprietary aspects of our technology.
We seek to protect the source code for our software, documentation and other
written materials under trade secret and copyright laws. These legal protections
provide limited protection for our technology. Our license agreements prohibit
our customers from using our software other than for internal business purposes.
We also seek to protect our intellectual property by requiring employees and
consultants with access to our proprietary information to execute
confidentiality agreements with us and by restricting access to our source code.
Due to rapid technological change, we believe that factors such as the
technological and creative skills of our personnel, new product developments and
enhancements to existing products are at least as important to establishing and
maintaining a technology leadership position. Eprise also licenses third party
software that is incorporated into Eprise Participant Server and certain add-on
products. We believe these licenses are not material to our business and the
technology could be replaced, if necessary or appropriate, by commercially
available third party software or internally developed technology without
material disruption to our business or operations. See "Factors Affecting Future
Results -- We have a limited ability to protect our intellectual property
rights, and others could infringe on or misappropriate our proprietary rights
and information."


                                       11
<PAGE>   12


EMPLOYEES

     As of March 2, 2001, we had a total of 216 employees, including 79 in sales
and marketing, 46 in research and development, 69 in professional services and
support and 22 in information technology, administration and finance. None of
our employees is represented by a collective bargaining agreement, nor have we
experienced any work stoppage. We consider our relations with our employees to
be good.

ITEM 2. PROPERTIES

     Our principal office occupies approximately 78,000 square feet of new
office space in Framingham, Massachusetts. Initial annual lease payments on the
Framingham facility are approximately $2.1 million, with periodic increases over
the ten-year term of the lease. In addition, we lease sales and service offices
in Oakbrook, Illinois; Dallas, Texas; San Diego, California; San Jose,
California; Denver, Colorado; Reston, Virginia; Hamburg, Germany; Munich,
Germany; and Reading, U.K. Eprise does not own any real property.

ITEM 3. LEGAL PROCEEDINGS

     We are not a party to any material legal proceedings. We may from time to
time become a party to various legal proceedings arising in the ordinary course
of our business.

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

     No matter was submitted to a vote of our stockholders, through the
solicitation of proxies or otherwise, during the fourth quarter of fiscal year
2000.


                                     PART II

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

PRICE RANGE OF COMMON STOCK

     Our common stock has been quoted on the Nasdaq National Market under the
symbol "EPRS" since our initial public offering on March 24, 2000. Before then,
there was no public market for our common stock. The following table shows, for
the periods indicated, the high and low prices per share of our common stock.

<TABLE>
<CAPTION>
                                                                PRICE
                                                                -----
                                                       HIGH                LOW
                                                       ----                ---

<S>                                                   <C>                <C>
2000:
     Second quarter                                   $18.94             $8.72
     Third quarter                                     20.13              7.88
     Fourth quarter                                     8.25              1.50
</TABLE>

     On March 15, 2001, the closing sale price of our common stock was $0.938
per share. On that date, there were 523 holders of record. This does not include
the number of persons whose stock is held in nominee or "street name" accounts
through brokers.

DIVIDENDS

     We have never declared or paid any cash dividends on our capital stock and
do not anticipate paying any cash dividends on our capital stock in the
foreseeable future. Future dividends, if any, will be determined by the board of
directors. Our current loan agreement prohibits the payment of any dividends on
our capital stock.


                                       12
<PAGE>   13


     On December 18, 2000, the Board of Directors declared a dividend
distribution, payable to stockholders of record on December 29, 2000, of one
preferred share purchase right for each outstanding share of common stock. The
rights expire on December 18, 2010, and will be exercisable only if a person or
group (an "Acquiring Person") becomes the beneficial owner of 15% or more of the
Company's common stock or commences a tender or exchange offer which would
result in the offeror beneficially owning 15% or more of the common stock. Each
right entitles the registered holder to purchase one one-hundredth of a share of
newly issued Series A Junior Participating Preferred Stock at an exercise price
of $21.00 (subject to certain adjustments). Each one one-hundredth of a share of
Series A Preferred Stock has designations and powers, preferences and rights
which make its value approximately equal to the value of a share of the
Company's common stock. The Company generally will be entitled to redeem the
rights at $0.01 per right at any time prior to the tenth day following a public
announcement of the existence of an Acquiring Person. The description and terms
of the rights are set forth in a Stockholder Rights Agreement dated December 18,
2000 between the Company and Fleet Bank c/o EquiServe, L.P., as rights agent.
The Rights Agreement was filed as an exhibit to the Company's Current Report on
Form 8-K filed with the SEC on December 19, 2000. The rights have certain
anti-takeover effects, and will cause substantial dilution to a person or group
that attempts to acquire the Company on terms not approved by the Board of
Directors.

USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES

     Our initial public offering of common stock was effected through a
registration statement on Form S-1 (Registration No. 333-94777) that was
declared effective by the SEC on March 23, 2000 and pursuant to which we sold
4,600,000 shares of our common stock.

     As of December 31, 2000, the aggregate net proceeds, after expenses of the
offering and underwriting discounts, of $63.2 million from our initial public
offering were held in cash and short-term investments.

RECENT SALES OF UNREGISTERED SECURITIES

     From January 1, 2000 through August 29, 2000, we granted options to
purchase an aggregate of 758,648 shares of common stock under our 1997 Stock
Option Plan, as amended, and our 2000 Non-Employee Director Stock Option Plan,
exercisable at a weighted average price of $9.84 per share. These grants were
made in reliance upon the exemption provided by Rule 701 under the Securities
Act of 1933, as amended. On August 29, 2000, we filed a registration statement
on Form S-8 with the SEC to cover the issuance and sale of our securities under
our stock option plans and our 2000 Employee Stock Purchase Plan.

ITEM 6. SELECTED FINANCIAL DATA

     The selected financial data presented below as of December 31, 1999 and
2000 and for the years ended December 31, 1998, 1999 and 2000 have been derived
from our audited financial statements, included elsewhere in this report on Form
10-K. Selected financial data as of August 31, 1997, and December 31, 1997 and
1998 and for the year ended August 31, 1997 and the four months ended December
31, 1997 have been derived from our audited financial statements, which are not
included herein. The selected financial data as of August 31, 1996 and for the
year ended August 31, 1996 have been derived from our unaudited financial
statements, which in the opinion of management include all adjustments necessary
for a fair presentation of such information in accordance with generally
accepted accounting principles. In 1997, Eprise changed its fiscal year end from
August 31 to December 31. The statement of operations data for the 12 months
ended December 31, 1997 has been derived by summing the unaudited results of
operations for the four fiscal quarters in the period ended December 31, 1997.
The data for pro forma loss per share treats our preferred stock as though it
were common stock from the date of original issuance. The information set forth
below should be read along with our "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our financial statements and
notes to those statements appearing elsewhere in this Form 10-K.



                                       13
<PAGE>   14


<TABLE>
<CAPTION>
                                                                              TWELVE
                                         YEARS ENDED             FOUR         MONTHS
                                         -----------           MONTHS         ENDED                    YEARS ENDED
                                          AUGUST 31,            ENDED        DEC. 31,                  DECEMBER 31,
                                          ----------           DEC. 31,      --------      ------------------------------------
                                     1996          1997          1997          1997          1998          1999          2000
                                   --------      --------      --------      --------      --------      --------      --------
                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                <C>           <C>           <C>           <C>           <C>           <C>           <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
  Software licenses ..........     $     --      $     33      $     65      $     65      $    345      $  2,355      $ 13,192
  Services ...................        1,192         1,387           238         1,157           462         1,304         5,836
                                   --------      --------      --------      --------      --------      --------      --------
    Total revenues ...........        1,192         1,420           303         1,222           807         3,659        19,028
Cost of revenues .............          567           518           285           579           460         1,125         7,699
                                   --------      --------      --------      --------      --------      --------      --------
Gross profit .................          625           902            18           643           347         2,534        11,329
Operating expenses:
  Research and development ...          131           180           327           459         2,149         2,360         5,769
  Selling and marketing ......          291           800           392           879         2,349         5,056        20,412
  General and administrative .          332           501           363           710         1,246         2,005         5,901
                                   --------      --------      --------      --------      --------      --------      --------
    Total operating expenses .          754         1,481         1,082         2,048         5,744         9,421        32,082
                                   --------      --------      --------      --------      --------      --------      --------
Operating loss ...............         (129)         (579)       (1,064)       (1,405)       (5,397)       (6,887)      (20,753)
Other income (expense), net ..          (26)         (154)         (100)         (210)          136           287         4,096
                                   --------      --------      --------      --------      --------      --------      --------
Loss before income taxes .....         (155)         (733)       (1,164)       (1,615)       (5,261)       (6,600)      (16,657)
Income taxes .................           --            --            --            --            --            --           (47)
                                   --------      --------      --------      --------      --------      --------      --------
Net loss .....................         (155)         (733)       (1,164)       (1,615)       (5,261)       (6,600)      (16,704)
Accretion of redeemable
convertible preferred stock ..           --            --            (2)           (2)          (15)      (21,630)          (94)
                                   --------      --------      --------      --------      --------      --------      --------
Loss to common shareholders ..     $   (155)     $   (733)     $ (1,166)     $ (1,617)     $ (5,276)     $(28,230)     $(16,798)
                                   ========      ========      ========      ========      ========      ========      ========
Loss per share ...............     $  (0.08)     $  (0.35)     $  (0.54)     $  (0.76)     $  (2.40)     $ (11.42)     $   (.83)
                                   ========      ========      ========      ========      ========      ========      ========
Weighted average common shares
outstanding ..................        2,064         2,073         2,156         2,118         2,200         2,473        20,301
                                   ========      ========      ========      ========      ========      ========      ========
Pro forma loss per share .....                                                                           $  (0.50)     $  (0.70)
                                                                                                         ========      ========
Pro forma weighted average
common shares outstanding ....                                                                             13,274        23,920
                                                                                                         ========      ========
</TABLE>



<TABLE>
<CAPTION>
                                     AUG. 31,      AUG. 31,      DEC. 31,      DEC. 31,       DEC. 31,     DEC. 31,
                                       1996          1997          1997          1998           1999         2000
                                     --------      --------      --------      --------      ---------     --------
                                                                     (IN THOUSANDS)
<S>                                  <C>           <C>           <C>           <C>           <C>           <C>
BALANCE SHEET DATA:
Cash and cash equivalents ......     $     --      $    105      $  3,136      $  6,357      $ 22,456      $ 68,631
Working capital (deficit) ......         (508)       (1,358)        2,389         5,829        22,978        68,383
Total assets ...................          408           335         3,647         7,075        25,534        81,071
Long-term debt .................          144            --            --           158            79            --
Redeemable convertible preferred
stock ..........................           --            --         5,004        13,740        35,316            --
Total stockholders' equity
(deficiency) ...................         (521)       (1,220)       (2,327)       (7,583)      (11,759)       72,900
</TABLE>

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

     The following discussion should be read in conjunction with our financial
statements and related notes included herein.

GENERAL

     Eprise, originally named Inner Circle Technologies and then NovaLink, was
founded in 1992 as a provider of online interactive games. Between 1994 and
1997, our principal business shifted to creating and hosting Web sites for
corporate clients. During this period, we encountered recurring problems arising
out of the inadequacy of software tools that were commercially available to
build and maintain Web sites. Recognizing that there was an opportunity to
streamline and automate these processes, we began to develop a software product
called Eprise Participant Server to facilitate the construction and updating of
Web sites. We shipped our first commercial product in early 1998. Eprise now
markets and sells version 3.0 of Eprise Participant Server.

     We completed three rounds of venture capital financing between December
1997 and November 1999, with over $38.0 million in gross proceeds. We completed
our initial public offering in March 2000, with gross proceeds of $69.0 million.


                                       14
<PAGE>   15


OVERVIEW

     We changed our fiscal year end from August 31 to December 31 in 1997. Our
financial information, to the extent provided, for the last eight months of the
fiscal year ended August 31, 1997 and the four months ended December 31, 1997
has been combined in order to present a comparable accounting period for 1997 to
the audited year ended December 31, 1998. Future references to the year 1997 or
1998 mean the twelve months ended December 31 unless otherwise indicated.

     We generate revenues from two principal sources: (1) license fees for our
software products and (2) professional services and technical support revenues
derived from consulting, implementation, training and maintenance services
related to our software products. In the year ended December 31, 2000 no
customer accounted for more than 10% of the Company's revenue. In the year ended
December 31, 1999, two customers accounted for 23% of our total revenues. In the
year ended December 31, 1998, one customer accounted for 58% of our total
revenues.

     License revenue represented 60% of total revenue for the year ended
December 31, 2000. License sales produce significantly higher margins than
service sales due to lower costs associated with licenses and their delivery.

     Software licenses. Customers typically pay an up-front, one-time fee for a
perpetual non-exclusive license of our software. Generally, the amount of the
fee is based on the number of licensed servers. To date, software license
revenues have principally come from direct sales to customers. The sales cycle
for our products is typically three to six months. Although we have limited
historical financial data, we believe that our quarterly operating results may
experience seasonal fluctuations due to clients' fiscal year budgeting cycles
and purchasing patterns. Because of our server-based licensing, we experience
significant variation in the size of our licensing transactions.

     We generally recognize license fee revenues upon delivery of the product.
If the product is subject to acceptance and/or return and refund, we defer
revenues until acceptance has occurred or the refund period has expired.

     Services. Services revenues consist principally of revenues derived from
professional services associated with the implementation and integration of our
software products, training of customers' employees and ongoing customer
support, which primarily includes customer technical support services and
product enhancements. We deliver professional services on either a fixed price
basis or a time and materials basis. We generally complete implementation and
training services within three to six months following license contract signing.

     We recognize revenues from professional services as such services are
performed. We recognize maintenance revenues, which are invoiced annually in
advance, ratably over the term of the maintenance agreement, which is generally
12 months. Our maintenance revenues currently account for less than 10% of total
revenues. As part of these agreements, we provide product enhancements and
technical support services to customers for an annual fee, which typically
amounts to 20% of the license fee. While a 60-day warranty is included in the
software license, maintenance agreements typically are entered into as of the
date of the software license. Maintenance agreements are renewable at the
discretion of the customer. As of December 31, 2000, there have been 118
customers who have entered into maintenance agreements with Eprise. Of the 118
contracts, to date 18 have expired, of which 7 have been renewed. The remaining
contracts have not yet come up for renewal.

     Backlog. Delivery lead times for our products are very short and,
consequently, substantially all of our license fee revenues in each quarter
result from orders received in that quarter. Accordingly, we generally only
maintain a backlog for our professional services and maintenance activities, and
we believe that our backlog at any point in time is not a reliable indicator of
future revenues and earnings.

     Cost of revenues. Cost of software licenses revenues includes royalties
paid to certain software companies for products sold or distributed with or
embedded in Eprise Participant Server. In 2000, these royalties amounted to 1.2%
of total revenues, and may increase in the future as license sales increase.
Other costs associated with software licenses, including CDs and packaging,
arise primarily from the production of software products, and have not been
significant in any period presented, nor are they expected to be significant in
the foreseeable future. Cost of services


                                       15
<PAGE>   16


revenues consists primarily of salaries and related personnel costs, costs of
third party contractors, and other allocated expenses of our consulting, support
and training organizations.

     Research and development. We maintain a product development staff to
enhance our existing products and to develop new products. Software costs are
expensed as incurred until technological feasibility of the software is
determined, after which any additional costs are capitalized. To date, we have
expensed all software development costs because development costs incurred
subsequent to the establishment of technological feasibility have been minimal.

     Selling and marketing. We license our products primarily through our direct
sales force. Selling and marketing expenses consist primarily of costs
associated with personnel, sales commissions, office facilities, travel and
promotional events such as trade shows, seminars and technical conferences,
advertising and public relations programs.

     General and administrative. General and administrative expenses include
salaries and related personnel expenses and other costs of the finance, human
resources, information technology and administrative functions at Eprise.

RESULTS OF OPERATIONS

     The following table sets forth our operating results for the periods
indicated as a percentage of revenues.

<TABLE>
<CAPTION>
                                                    YEAR ENDED
                                                   DECEMBER 31,
                                           --------------------------
                                           1998       1999       2000
                                           ----       ----       ----
<S>                                        <C>        <C>        <C>
Revenues:
  Software licenses.................         43%        64%        69%
  Services..........................         57         36         31
                                           ----       ----       ----
         Total revenues.............        100        100        100
                                           ----       ----       ----
Cost of revenues....................         57         31         40
                                           ----       ----       ----
Gross profit........................         43         69         60
Operating expenses:
  Research and development..........        266         65         31
  Selling and marketing.............        291        138        107
  General and administrative........        154         55         31
                                           ----       ----       ----
         Total operating expenses...        711        258        169
                                           ----       ----       ----
Operating loss......................       (668)      (188)      (109)
Other income (expense), net.........         17          8         21
                                           ----       ----       ----
Net loss............................       (651)%     (180)%      (88)%
                                           ====       ====       ====
</TABLE>

YEAR ENDED DECEMBER 31, 2000 COMPARED TO THE YEAR ENDED DECEMBER 31, 1999

     Software licenses. Revenues from software licenses increased by 460.2% to
approximately $13.2 million for the year ended December 31, 2000 compared to
approximately $2.4 million for the year ended December 31, 1999. Software
license revenues represented 69% and 64% of total revenues for the years ended
December 31, 2000 and 1999, respectively. The increase in revenues from software
licenses was primarily due to the release of version 2.0 of Eprise Participant
Server in April 1999 and the continued resulting increases in licenses
delivered, as well as follow-on orders received from our existing customers.
License revenue from follow-on orders was approximately $2.3 million for the
year ended December 31, 2000.

     Services. Revenues from services increased by 347.5% to approximately $5.8
million for the year ended December 31, 2000 compared to approximately $1.3
million for the year ended December 31, 1999. Services revenues represented 31%
and 36% of total revenues for the years ended December 31, 2000 and 1999,
respectively. Approximately 74% of the increase in absolute dollars is
attributable to consulting, 11% to training, and 15% to maintenance revenue
generated by new software license sales. The decrease as a percentage of total


                                       16
<PAGE>   17


revenues is attributable to the fact that more extensive implementation services
were required by customers for the initial commercial release (version 2.0) of
Participant Server in 1999.

     Cost of revenues. Cost of software licenses primarily includes royalties
paid to certain software companies for products sold or distributed with or
embedded in Eprise Participant Server. The other costs of software licenses
relate to the production of software products, including CDs and packaging. Cost
of services revenues primarily include salaries, related personnel costs, and
costs of third party contractors of our consulting, support and training
organizations. These costs of revenues increased by 584.4% to approximately $7.7
million for the year ended December 31, 2000 compared to approximately $1.1
million for the year ended December 31, 1999. As a percentage of total revenues,
cost of revenues increased to 40% for the year ended December 31, 2000 from 31%
for the year December 31, 1999. The increase in absolute dollars was due to the
expansion of our professional services organization, including technical
consulting, technical support, and training from a staff of 14 in 1999 to 62 in
2000. The increase as a percentage of total revenues was primarily due to the
period of time needed to train our expanding service organization as well as an
increase in the use of third party contractors. In 2000, the cost of license
revenues was 1.6% of total revenue. Since services revenues have substantially
lower margins than license revenues, growth of our services business will result
in a lower gross profit if our license revenues do not increase significantly in
the same period. We expect cost of services revenues as a percentage of total
revenues to vary from period to period depending on the mix of services we
provide, whether the services are provided by our staff or third party
contractors, and on the utilization rates of our staff. Depending on the mix of
software licenses sold, the cost of license revenues as a percentage of total
revenue may increase in the future due to our existing royalty agreements.

     Research and development. Research and development expenses increased by
144.4% to approximately $5.8 million for the year ended December 31, 2000
compared to approximately $2.4 million for the year ended December 31, 1999.
Research and development expenses represented 31% and 65% of total revenues for
the years ended December 31, 2000 and 1999, respectively. The increase in
absolute dollars was primarily attributable to an increase in personnel,
employee-related expenses, and the use of third-party contractors in the year
ended December 31, 2000 for the development of Version 3.0 of Eprise Participant
Server which was released in November 2000. We believe that continued investment
in research and development is critical to achieving our corporate objectives,
and we expect that the absolute dollar amounts of research and development
expenses will increase in future periods. To date, all software development
costs have been expensed as incurred.

     Selling and marketing. Selling and marketing expenses increased by 303.7%
to approximately $20.4 million for the year ended December 31, 2000 compared to
approximately $5.1 million for the year ended December 31, 1999. Selling and
marketing expenses represented 107% and 138% of total revenues for the years
ended December 31, 2000 and 1999, respectively. Approximately 64% of the
increase in selling and marketing expenses was attributable to an increase in
the number of sales and sales support personnel from 24 in 1999 to 61 in 2000 as
we expanded our direct sales force nationally and globally. In addition,
approximately 25% of the increase was attributable to significant cost increases
in marketing programs and public relations activities as we expanded our
presence in the market and further developed our brand. We expect to increase
our investment in selling and marketing efforts in order to increase brand
awareness, build strategic partnerships, and continue our global expansion. We
also anticipate that selling and marketing expenses will fluctuate from period
to period as a percentage of total revenue as new sales personnel become
productive, and based on the timing of marketing programs and new product
releases.

     General and administrative. General and administrative expenses consist
primarily of salaries and related costs of finance, human resources, information
technology, legal and other administrative functions. General and administrative
expenses increased by 194.3% to approximately $5.9 million for the year ended
December 31, 2000 compared to approximately $2.0 million for the year ended
December 31, 1999. General and administrative expenses represented 31% and 55%
of total revenues for the years ended December 31, 2000 and 1999, respectively.
The increase in general and administrative expenses primarily reflects personnel
increases and the related costs associated with supporting our recent and
anticipated revenue growth. We expect general and administrative costs to
increase in absolute dollars as we continue to add the infrastructure and
personnel needed to support our future growth.


                                       17
<PAGE>   18


     Compensation cost for stock options. Options were granted during 1999 at
exercise prices which were the best estimate of our board of directors as to the
fair value of the underlying common stock on the date of grant. However,
subsequent to the grant date, we concluded that for grants after the release of
the new version of Eprise Participant Server, these estimates may not have fully
reflected the impact of this release. We have determined that for grants made
from May to August 1999, $3.93 is a more reliable estimate of the fair value of
the common stock during this period. For grants subsequent to August 1999, we
determined that the mid-point of the preliminary price range for our anticipated
public offering represented the best estimate of the fair value of the common
stock during this period. For grants during 1999, compensation cost aggregated
approximately $6.8 million, which will be amortized to expense over the four
year vesting period of the option grants. For the years ended December 31, 2000
and 1999, compensation expense recorded related to these grants aggregated
approximately $1.9 million and $524,000, respectively.

     Other income (expense). Other income and expense consisted primarily of
interest income on invested cash balances and interest expense on borrowings.
The increase in other income between the two periods was the result of higher
cash balances generated from our private placement financing in November 1999
and our initial public offering in March 2000.

     Income taxes. During the years ended December 31, 2000 and 1999, we
reported losses for both financial and income tax purposes. No provision or
benefit for income taxes was recorded in either period, other than a provision
related to income earned on investments in a securities corporation as discussed
below. At December 31, 2000, we had net operating loss carry forwards for
federal and state income tax purposes aggregating $27.7 million available to
offset future taxable income. These loss carry forwards expire in varying
amounts through 2020. At December 31, 2000, we had federal and state tax credits
aggregating $610,000 available to reduce future taxes payable, expiring through
2014. Because of changes in ownership that have occurred, including our initial
public offering, our ability to fully utilize these carry forwards is likely to
be limited. The income tax expense of $47,000 for the year ended December 31,
2000 represents taxes paid on income earned on assets held by Eprise Securities
Corporation, a wholly-owned subsidiary of Eprise Corporation.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR ENDED DECEMBER 31, 1998

     Software licenses. Revenues from software licenses increased by 582.6% to
approximately $2.4 million for the year ended December 31, 1999 compared to
$345,000 for the year ended December 31, 1998. The increase in revenues from
software licenses was primarily due to the release of version 2.0 of Eprise
Participant Server in April 1999 and the resulting increases in license
deliveries during 1999. All license revenues for the year ended December 31,
1999 were attributable to new customers compared to 30% attributable to new
customers for the year ended December 31, 1998.

     Services. Revenues from services increased by 182.3% to approximately $1.3
million for the year ended December 31, 1999 compared to $462,000 for the year
ended December 31, 1998. Approximately 88% of the increase in revenues from
services is attributable to consulting, 9% to training, and 3% to implementation
revenue generated by new software license sales. Approximately 58% of services
revenues for the year ended December 31, 1999 were attributable to new customers
compared to 51% for the year ended December 31, 1998.

     Cost of revenues. Cost of revenues primarily relate to services because
costs of licenses were insignificant. Cost of revenues increased by 144.6% to
approximately $1.1 million for the year ended December 31, 1999 compared to
$460,000 for the year ended December 31, 1998. However, as a percentage of total
revenues, cost of revenues decreased to 31% for the year ended December 31, 1999
from 57% for the year December 31, 1998. This was primarily due to a larger
percentage of total revenues being derived from software license fees (which
have significantly higher gross profit margins) in the year ended December 31,
1999 compared to the year ended December 31, 1998, more efficient implementation
of our products and better utilization of service personnel.

     Research and development. Research and development expenses increased by
9.8% to approximately $2.4 million for the year ended December 31, 1999 compared
to approximately $2.1 million for the year ended December 31, 1998. The increase
was primarily attributable to employee-related expenses incurred in the year


                                       18
<PAGE>   19


ended December 31, 1999 for the continued development of Version 2.0 of Eprise
Participant Server and future product releases.

     Selling and marketing. Selling and marketing expenses increased by 115.2%
to approximately $5.1 million for the year ended December 31, 1999 compared to
approximately $2.3 million for the year ended December 31, 1998. Approximately
72% of the increase in selling and marketing expenses was attributable to an
increase in the number of sales and sales support personnel as we expanded our
direct sales force. In addition, approximately 19% of the increase was
attributable to significant cost increases in marketing programs and public
relations activities as we expanded our presence in the market and further
developed our brand.

     General and administrative. General and administrative expenses increased
by 61.0% to approximately $2.0 million for the year ended December 31, 1999
compared to $1.2 million for the year ended December 31, 1998. The increase in
general and administrative expenses primarily reflects personnel increases and
the related costs associated with supporting our recent and anticipated revenue
growth.

     Compensation cost for stock options. For grants during 1999, compensation
cost aggregated approximately $6.8 million, which will be amortized to expense
over the four year vesting period of the option grants. For the year ended
December 31, 1999, compensation expense recorded related to these grants
aggregated $524,000.

     Other income (expense). Other income and expense consisted primarily of
interest income on invested cash balances and interest expense on borrowings.
The increase in other income between the two periods was the result of higher
cash balances generated from our second round of venture capital financing in
August 1998 and our private placement financing in November 1999.

     Income taxes. During the years ended December 31, 1999 and 1998, we
reported losses for both financial and income tax purposes. No provision or
benefit for income taxes was recorded in either period. At December 31, 1999, we
had net operating loss carry forwards for federal and state income tax purposes
aggregating $13.5 million available to offset future taxable income. These loss
carry forwards expire in varying amounts through 2014. At December 31, 1999, we
had federal and state tax credits aggregating $319,000 available to reduce
future taxes payable, expiring through 2014. Because of changes in ownership
that have occurred, our ability to fully utilize these carry forwards is likely
to be limited.


QUARTERLY RESULTS OF OPERATIONS

     The following table presents our unaudited results of operations for each
of our last eight quarters up to and including the quarter ended December 31,
2000, and also presents such information as a percentage of our total revenue
for the periods indicated. The unaudited results of operations have been
prepared on substantially the same basis as the audited statements of operations
contained in this Form 10-K and include all adjustments, consisting of normal
recurring accruals, that we consider necessary to present this information
fairly when read in conjunction with our financial statements and accompanying
notes appearing elsewhere in this Form 10-K. The operating results in any
quarter are not necessarily indicative of the results that may be expected for
any future period.


                                       19
<PAGE>   20


<TABLE>
<CAPTION>
                                                                        QUARTER ENDED
                                 ---------------------------------------------------------------------------------------------------
                                 MAR. 31,     JUNE 30,     SEP. 30,     DEC. 31,     MAR. 31,     JUNE 30,     SEP. 30,     DEC. 31,
                                   1999         1999         1999         1999         2000         2000         2000         2000
                                 --------     --------     --------     --------     --------     --------     --------     --------

                                                                          (IN THOUSANDS)
<S>                              <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
STATEMENT OF
 OPERATIONS DATA:
Revenues:
  Software licenses ..........   $   108      $   223      $   524      $ 1,500      $ 2,230      $ 3,600      $ 4,090      $ 3,272
  Services ...................        53          305          399          547          367        1,079        1,786        2,604
                                 -------      -------      -------      -------      -------      -------      -------      -------
    Total Revenues ...........       161          528          923        2,047        2,597        4,679        5,876        5,876
                                 -------      -------      -------      -------      -------      -------      -------      -------
Cost of revenues .............       126          161          415          423          922        1,721        1,987        3,069
                                 -------      -------      -------      -------      -------      -------      -------      -------
Gross profit .................        35          367          508        1,624        1,675        2,958        3,889        2,807
                                 -------      -------      -------      -------      -------      -------      -------      -------
Operating expenses:
  Research and development ...       568          545          558          689          939        1,343        1,652        1,835
  Selling and marketing ......       765        1,099        1,203        1,989        3,854        5,602        5,130        5,826
  General and administrative..       364          410          444          788          949        1,283        1,658        2,011
                                 -------      -------      -------      -------      -------      -------      -------      -------
    Total operating expenses       1,697        2,054        2,205        3,466        5,742        8,228        8,440        9,672
                                 -------      -------      -------      -------      -------      -------      -------      -------
Operating loss ...............    (1,662)      (1,687)      (1,697)      (1,842)      (4,067)      (5,270)      (4,551)      (6,865)
Other income (expense), net...        55           33           18          182          332        1,270        1,289        1,205
                                 -------      -------      -------      -------      -------      -------      -------      -------
Loss before income taxes .....    (1,607)      (1,654)      (1,679)      (1,660)      (3,735)      (4,000)      (3,262)      (5,660)
                                 -------      -------      -------      -------      -------      -------      -------      -------
Income taxes .................        --           --           --           --           --           --          (47)          --
                                 -------      -------      -------      -------      -------      -------      -------      -------
Net loss .....................   $(1,607)     $(1,654)     $(1,679)     $(1,660)     $(3,735)     $(4,000)     $(3,309)     $(5,660)
                                 =======      =======      =======      =======      =======      =======      =======      =======
</TABLE>



<TABLE>
<CAPTION>
                                                                        QUARTER ENDED
                                 ---------------------------------------------------------------------------------------------------
                                 MAR. 31,     JUNE 30,     SEP. 30,     DEC. 31,     MAR. 31,     JUNE 30,     SEP. 30,     DEC. 31,
                                   1999         1999         1999         1999         2000         2000         2000         2000
                                 --------     --------     --------     --------     --------     --------     --------     --------

                                                           (AS A PERCENTAGE OF TOTAL REVENUES)
<S>                              <C>          <C>          <C>          <C>          <C>          <C>          <C>          <C>
PERCENT OF TOTAL REVENUES:
  Revenues:
  Software licenses ..........         67%          42%          57%          73%          86%          77%          70%        56%
  Services ...................         33           58           43           27           14           23           30         44
                                   ------       ------       ------       ------       ------       ------       ------     ------
    Total revenues ...........        100          100          100          100          100          100          100        100
                                   ------       ------       ------       ------       ------       ------       ------     ------
Cost of revenues .............         78           30           45           21           36           37           34         52
                                   ------       ------       ------       ------       ------       ------       ------     ------
Gross profit .................         22           70           55           79           64           63           66         48
                                   ------       ------       ------       ------       ------       ------       ------     ------
Operating expenses:
  Research and development ...        353          103           60           34           36           29           28         31
  Selling and marketing ......        475          208          130           97          148          120           87         99
  General and administrative .        226           79           48           38           37           27           28         34
                                   ------       ------       ------       ------       ------       ------       ------     ------
    Total operating expenses..      1,054          390          238          169          221          176          143        164
                                   ------       ------       ------       ------       ------       ------       ------     ------
Operating loss ...............     (1,032)        (320)        (183)         (90)        (157)        (113)         (77)      (116)
Other income (expense), net ..         34            6            2            8           13           27           22         20
                                   ------       ------       ------       ------       ------       ------       ------     ------

Loss before income taxes .....       (998)        (314)        (181)         (82)        (144)         (86)         (55)       (96)
Income taxes .................         --           --           --           --           --           --           (1)        --
                                   ------       ------       ------       ------       ------       ------       ------     ------
Net loss .....................       (998)%       (314)%       (181)%        (82)%       (144)%        (86)%        (56)%      (96)%
                                   ======       ======       ======       ======       ======       ======       ======     ======
</TABLE>

     Our quarterly operating results have varied in the past and may vary
significantly in the future depending on many factors including, among others:

     -    demand for our products and services;

     -    the timing of sales of our products and services;

     -    the timing of customer orders and product implementation;

     -    unexpected delays in introducing new products and services;

     -    increased expenses, whether related to selling and marketing, product
          development or general administration;

     -    changes in the rapidly evolving market for Web content management
          solutions;

     -    the mix of product license and service revenue; and


                                       20
<PAGE>   21


     -    the timing and size of sales derived through our strategic partners.

     Furthermore, we believe that the purchase of our products is relatively
discretionary and generally involves a significant commitment of capital. As a
result, purchases of our products may be deferred or canceled in the event of a
downturn in any potential customer's business or the economy in general.

LIQUIDITY AND CAPITAL RESOURCES

     From our inception through 1997, we primarily financed our operations and
met our capital expenditure requirements through funds generated from
operations, funds borrowed from several stockholders and a director, and funds
borrowed from Silicon Valley Bank. Since December 1997, we have raised over
$107.0 million in venture capital, private placement and initial public offering
financing in order to expand the product development and sales and marketing
efforts of our business and the infrastructure to support our future growth.

     At December 31, 2000, our primary source of liquidity consisted of cash
totaling approximately $68.6 million as well as accounts receivable of
approximately $6.4 million. Accounts receivable increased by approximately $4.4
million in 2000, primarily as a result of our increase in revenues during the
fourth quarter of 2000 over the fourth quarter of 1999. We expect that as we
continue to expand our revenue base, our accounts receivable will increase
proportionally. On March 29, 2000, we raised cash proceeds of approximately
$63.2 million, after expenses, from the sale of 4,600,000 shares of our common
stock in our initial public offering. In addition, we have a borrowing agreement
with Silicon Valley Bank that provides us with a working capital revolving line
of credit. The working capital line of credit, which expires on June 30, 2001,
provides for borrowings up to a maximum amount equal to the lesser of $1.0
million or a percentage of eligible accounts receivable. Borrowings under the
line are subject to financial performance covenants, bear interest at a rate per
annum equal to the bank's prime rate plus 1/2%, and are collateralized by all of
our tangible assets. There have been no borrowings to date under the working
capital line of credit and as of December 31, 2000 there was $1.0 million
available under the line. At December 31, 2000, there was a term note
outstanding relating to a previous equipment line of credit with Silicon Valley
Bank totaling $78,749. At December 31, 1999 and 2000, we were in compliance with
all of the terms of our line of credit agreements.

     Our operating activities have used cash in the current calendar year and
each of the last two calendar years. During the calendar years 2000, 1999, and
1998, cash used for operating activities of approximately $13.4 million, $6.9
million, and $5.3 million, respectively, resulted from net losses of
approximately $16.7 million, $6.6 million, and $5.3 million, respectively. For
the year ended December 31, 2000, cash used for operating activities consisted
primarily of payroll and related expenditures, as well as expenditures for
marketing programs representing approximately 36%, and expenditures for research
and development representing approximately 15% (excluding payroll and related
expenditures). For the year ended December 31, 1999, cash used for operating
activities consisted primarily of payroll and related expenditures, as well as
expenditures for marketing programs representing approximately 15%, and
expenditures for research and development representing approximately 10%
(excluding payroll and related expenditures). We expect cash operating losses to
decrease over time as our revenues increase. However, we will continue to incur
cash operating losses in the short-term as we increase and expand our
distribution capability and continue our product development.

     Cash used for investing activities was approximately $4.5 million,
$366,000, and $350,000 in the calendar years 2000, 1999, and 1998, respectively.
The cash used for investing activities was primarily used for purchases of
computer systems and software for internal development used to support our
growth, as well as leasehold improvements for our new corporate office facility,
and furniture and equipment to accommodate the increased number of personnel.

     Cash provided by financing activities amounted to approximately $64.0
million, $23.4 million, and $8.8 million in the calendar years 2000, 1999, and
1998, respectively. In March 2000, approximately $63.2 million, net of expenses,
was provided from the sale of common stock in our initial public offering. In
November 1999,


                                       21
<PAGE>   22


approximately $23.4 million, net of expenses, was provided from the sale of
Series C preferred stock to approximately 200 venture capital investors and
other qualified investors who were existing stockholders of Eprise or clients of
our private placement agent. In 1998, approximately $8.5 million was provided
from the sale of Series B Preferred Stock to seven institutional venture capital
investors and their affiliates and one accredited individual.

     We currently anticipate that our current cash and equivalents and line of
credit will be sufficient to meet our anticipated cash needs for working capital
and capital expenditures for at least the next 12 months. However, we may need
to raise additional funds in future periods through public or private
financings, or other arrangements. Any additional financings, if needed, might
not be available on reasonable terms or at all. Failure to raise capital when
needed could harm our business, financial condition and results of operations.
If additional funds are raised through the issuance of equity securities,
additional dilution could result. In addition, any equity securities issued
might have rights, preferences or privileges senior to our common stock.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," effective for
fiscal years beginning after June 15, 2000. The new standard requires that all
companies record derivatives on the balance sheet as assets or liabilities,
measured at fair value. Gains or losses resulting from changes in the values of
those derivatives would be accounted for based on the use of the derivative and
whether it qualifies for hedge accounting. Eprise has adopted this accounting
standard effective January 1, 2001, as required. The adoption of SFAS No. 133
will not have a material impact on our financial position or results of
operations.


FACTORS AFFECTING FUTURE RESULTS

              RISKS RELATED TO OUR FINANCIAL RESULTS AND CONDITION

WE HAVE A HISTORY OF LOSSES, AND MAY NOT BE ABLE TO ACHIEVE OR SUSTAIN
PROFITABILITY.

     We incurred net losses of $6.6 million for the year ended December 31, 1999
and $16.7 million for the year ended December 31, 2000. As of December 31, 2000,
we had an accumulated deficit of $52.8 million. We have not yet achieved
profitability and we expect to incur net losses for the foreseeable future. To
date, we have funded our operations from the sale of equity securities and have
not generated cash from operations. We expect to continue to incur significant
research and development, selling and marketing, and general and administrative
expenses and, as a result, we will need to generate significant revenues to
achieve and maintain profitability. Although our revenues have grown
significantly in recent quarters, we cannot be certain that we can sustain these
growth rates or that we will achieve sufficient revenues for profitability. If
we do achieve profitability, we cannot be certain that we can sustain or
increase profitability on a quarterly or annual basis in the future. See
"Summary Financial Information," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and the financial statements and
notes to those statements found elsewhere in this Form 10-K.

OUR LIMITED OPERATING HISTORY MAKES EVALUATING OUR BUSINESS DIFFICULT.

     Eprise was founded in 1992 as a provider of online interactive games. We
made the transition to our current business in 1997 and, as a result, have a
limited operating history. We are still in the early stages of our development,
which makes the evaluation of our business operations and our prospects
difficult. We shipped our first commercial Web content management software
product in February 1998. Since that time, we have derived substantially all of
our revenues from licensing our Eprise Participant Server product and related
services. As a result of our limited operating history, we cannot forecast
operating expenses based on our historical results. Our ability to forecast
accurately our quarterly revenue is limited because our software products have a
long sales cycle, making it difficult to predict the quarter in which sales
revenue will be recognized. We would expect our business,


                                       22
<PAGE>   23


operating results and financial condition to be materially adversely affected if
our revenues do not meet our projections, and that net losses in a given quarter
could be even greater than expected.

UNCERTAINTY IN THE OVERALL ECONOMY AND IN THE INTERNET BUSINESS SECTOR IN
PARTICULAR COULD HAVE A NEGATIVE IMPACT ON OUR FUTURE REVENUES.

     The economy, and the Internet business sector in particular, have been
unstable and declining over the past year, and particularly in the past quarter.
We cannot predict whether this instability will continue, and if it does
continue, how long it will last. Potential purchasers of our products are more
carefully considering their technology expenditures and/or reducing their
information technology budgets. As a result of this less favorable economic
climate, potential purchasers may decide not to purchase our products or may
delay their purchases indefinitely. Such decisions would have a negative impact
on future revenues and our ability to grow our business.

OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY AND YOU SHOULD NOT
RELY ON THEM TO PREDICT OUR FUTURE PERFORMANCE.

    Our revenues and operating results are likely to vary significantly from
quarter to quarter. A number of factors are likely to cause these variations,
including:

     -    demand for our products and services;

     -    the timing of sales of our products and services;

     -    the timing of customer orders and product implementation;

     -    unexpected delays in introducing new products and services;

     -    increased expenses, whether related to selling and marketing, research
          and development or general and administrative;

     -    changes in the rapidly evolving market for Web content management
          solutions;

     -    the mix of product license and service revenue; and

     -    the timing and size of sales derived through our strategic partners.

     Accordingly, we believe that quarter-to-quarter comparisons of our
operating results are not necessarily meaningful. Investors should not rely on
the results of one quarter as an indication of our future performance.

     We plan to increase our operating expenditures to expand our sales and
marketing operations, develop new distribution channels, fund greater levels of
research and development, broaden professional services and support and improve
operational and financial systems. If our revenues do not increase along with
these expenses, our business, operating results or financial condition could be
materially adversely affected and net losses in a given quarter could be greater
than expected. Although we have limited historical financial data, we believe
that our quarterly operating results may experience seasonal fluctuations due to
clients' fiscal year budgeting cycles and purchasing patterns.

                          RISKS RELATED TO OUR BUSINESS

ONLY A LIMITED NUMBER OF CUSTOMERS HAVE LICENSED OUR PRODUCT, AND OUR WEB
CONTENT MANAGEMENT SOLUTION MAY NEVER ACHIEVE BROAD MARKET ACCEPTANCE.

     We first introduced Eprise Participant Server in February 1998 and
delivered subsequent major releases in April 1999 and November 2000. To date,
only a limited number of customers have licensed Eprise Participant Server, and
an even smaller number are operating Web sites using the most recent version.
Therefore, we have not demonstrated


                                       23
<PAGE>   24


broad market acceptance of Eprise Participant Server. If our product does not
gain broad market acceptance, or if it fails to meet customer expectations, our
business would be harmed.

OUR QUARTERLY RESULTS OFTEN DEPEND ON A SMALL NUMBER OF RELATIVELY LARGE SALES.

     We typically derive a significant portion of our software license revenues
in each quarter from a small number of relatively large orders. Although we do
not believe that the loss of any particular customer would have a material
adverse effect on our business or financial condition, our operating results
could be materially adversely affected if we were unable to complete one or more
substantial license sales in any future period. In the first, second, third and
fourth quarters of 2000, our five largest customers accounted for approximately
50%, 26%, 33%, and 34%, respectively, of total revenues in those quarters.

IF WE DO NOT SUCCESSFULLY EXPAND OUR DIRECT SALES AND SERVICES ORGANIZATIONS, WE
MAY NOT BE ABLE TO INCREASE OUR SALES OR SUPPORT OUR CUSTOMERS.

     In the fiscal year ended December 31, 2000, we licensed substantially all
of our products through our direct sales organization. As of March 2, 2001, we
had 30 direct sales representatives. Our future success depends on substantially
increasing the size and scope of our direct sales force, both domestically and
internationally. There is intense competition for personnel, and we cannot
guarantee that we will be able to attract, assimilate or retain additional
qualified sales personnel on a timely basis. Moreover, we believe that as our
sales increase, and given the large-scale deployment required by our customers,
we will need to hire and retain a number of highly trained customer service and
support personnel. As of March 2, 2001, our customer service and support
organization included 69 individuals. We cannot guarantee that we will be able
to increase the size of our customer service and support organization on a
timely basis to provide the high quality of support required by our customers.
Failure to add additional sales and customer service representatives would have
a material adverse effect on our business, operating results and financial
condition.

IF WE DO NOT SUCCESSFULLY MAINTAIN AND EXPAND OUR RELATIONSHIPS WITH INDUSTRY
PARTNERS, OUR SALES COULD DECLINE OR GROW MORE SLOWLY THAN EXPECTED.

     To offer products and services to a larger customer base, our direct sales
force must establish and expand relationships with alliance partners, including
systems integrators, consulting firms, Web developers and application service
providers who build customer solutions based on Eprise Participant Server. We
are currently investing, and we intend to continue to invest, significant
resources to develop these relationships. If our efforts are unsuccessful, our
sales growth would be adversely affected. We cannot guarantee that we will be
able to market our products effectively through our established partners.
Further, these third parties are under no obligation to recommend or support our
products. These companies could recommend or give higher priority to the
products of other companies or to their own products. A significant shift by
these companies toward favoring competing products could negatively affect our
license and service revenues. We cannot guarantee that we will be able to
attract additional distribution partners for desired distribution arrangements.
The loss of distribution partners or failure to establish new relationships
could materially adversely affect our business, operating results and financial
condition.

WE NEED TO INCREASE MARKET AWARENESS OF OUR PRODUCT TO REMAIN COMPETITIVE AND
CONTINUE TO INCREASE OUR REVENUES.

     Our customer base is relatively small compared to some of our competitors,
and we are facing increasing competition in our business sector. We are engaged
in marketing and business development activities to increase our visibility as a
provider of content management solutions. However, if we are unable to achieve
greater market awareness of our product, it will become more difficult for us to
compete successfully for new customers, and therefore more difficult to gain
market acceptance and increase our license revenues.


                                       24
<PAGE>   25


WE NEED TO MANAGE OUR GROWTH EFFECTIVELY TO REMAIN COMPETITIVE AND CONTINUE TO
EXPAND OUR OPERATIONS.

     We have expanded our operations rapidly since inception. We intend to
expand in the foreseeable future to pursue existing and potential opportunities.
This rapid growth places a significant demand on management, administrative and
operations resources. Our ability to compete effectively and to manage our
anticipated future growth requires us to continue to improve our financial and
management controls, reporting systems and procedures on a timely basis. We
recently hired a significant number of employees, and must continue to add
personnel to maintain our ability to grow in the future. We cannot guarantee
that we will be able to do so successfully. Failure to manage our growth
effectively could have a material adverse effect upon our business, operating
results and financial condition.

WE MUST HIRE AND RETAIN SKILLED PERSONNEL IN A TIGHT LABOR MARKET.

     Qualified personnel are in great demand throughout the computer software,
hardware and networking industries. The demand for qualified personnel is
particularly acute in the New England area because of the large number of
software and other high technology companies and the low unemployment rate in
the region. Our success depends in large part upon our ability to attract,
train, motivate and retain highly-skilled employees, particularly sales and
marketing personnel, software engineers, and technical support personnel. We
have had difficulty hiring these highly-skilled employees in the past. If we are
unable to attract and retain the highly-skilled technical personnel that are
integral to our sales, marketing, product development and customer support
teams, the rate at which we can generate sales and develop new products or
product enhancements may be limited. This inability could have a material
adverse effect on our business, operating results and financial condition.

COMPETITION COULD REDUCE OUR REVENUES AND MARKET SHARE, AND PREVENT US FROM
EXPANDING IN THE FUTURE.

     The market for Web content management software and services is rapidly
evolving and highly competitive and there are a number of products that compete
directly with our software solutions. Our clients' requirements and the
technology available to satisfy those requirements continually change. Some of
our current and potential competitors have significantly greater financial,
marketing, technical and other competitive resources than we do. This may enable
them to adapt more quickly to new or emerging technologies and changes in
customer requirements, or to devote greater resources to the development,
promotion and sale of their products. In addition, other companies could develop
new products or incorporate additional functionality into their existing
products that could directly compete with our products. Barriers to entering the
software market are relatively low. Furthermore, cooperative relationships among
our competitors could increase their ability to address the Web site content
management needs of our prospective customers, and they could rapidly acquire
significant market share. We cannot guarantee that we will compete successfully
against existing or new competitors. Further, competitive pressures may require
us to lower the prices of our software and services. Failure to compete
successfully would have a material adverse effect on our business, operating
results and financial condition.

IF WE ARE UNABLE TO ENHANCE AND EXPAND OUR PRODUCT LINE TO MEET THE RAPID
CHANGES IN THE MARKET FOR WEB CONTENT MANAGEMENT TECHNOLOGY, OUR BUSINESS WILL
BE UNABLE TO GROW.

     To succeed, we will need to enhance our current Eprise Participant Server
product and develop new products on a timely basis to keep pace with
developments related to Internet technology and to satisfy the increasingly
sophisticated requirements of our customers. The market for our products is
marked by rapid technological change, frequent new product introductions and
Internet-related technology enhancements, uncertain product life cycles, changes
in client demands and evolving industry standards. We cannot be certain that we
will successfully develop and market new products or new product enhancements
compliant with present or emerging Internet technology standards. New products
based on new technologies or new industry standards can rapidly render existing
products obsolete and unmarketable. Internet commerce technology is complex and
new products and product enhancements can require long development and testing
periods. Any delays in developing, testing and releasing enhanced or new
products could harm our business. New products or upgrades may not be released
according to schedule or may contain defects when released. Either situation
could result in adverse publicity, loss of sales, delay in market acceptance of
our products or customer claims against us, any of which could harm our
business. If we do not


                                       25
<PAGE>   26


develop, license or acquire new software products, or deliver enhancements to
existing products on a timely and cost-effective basis, our business will be
harmed.

WE HAVE RELIED ON AND EXPECT TO CONTINUE TO RELY ON SALES OF OUR EPRISE
PARTICIPANT SERVER LINE FOR OUR REVENUES.

     Since 1998, we have derived substantially all of our revenues from licenses
of, and services related to, Eprise Participant Server. We expect that revenues
from this product will continue to account for a significant portion of our
revenues for the foreseeable future. A decline in the price of Eprise
Participant Server or our inability to increase license sales of Eprise
Participant Server would seriously harm our business and operating results. In
addition, our future financial performance will depend upon the successful
development, introduction and customer acceptance of enhanced versions of Eprise
Participant Server and future products. Failure to deliver the enhancements or
products that customers want could have a material adverse effect on our
business, operating results and financial condition.

OUR LENGTHY SALES CYCLES REQUIRE EXPENDITURE OF RESOURCES THAT WILL NOT
NECESSARILY RESULT IN A SALE.

     We typically experience long sales cycles. These sales cycles generally
vary by customer from three to six months. Because the licensing of our products
generally involves a significant capital expenditure by the customer, our sales
process is subject to lengthy approval processes and delays. We often devote
significant time and resources to a prospective customer, including costs
associated with multiple site visits, product demonstrations and feasibility
studies, without any assurance that the prospective customer will decide to
license our products.

IF OUR PRODUCTS FAIL TO REMAIN COMPATIBLE WITH MAJOR COMMERCIAL OPERATING
PLATFORMS, OUR SALES WOULD DECREASE.

     Our products currently operate on the Microsoft Windows NT and Sun Solaris
operating systems. In addition, our products are required to interoperate with
Web servers, browsers and database servers. We must, therefore, continually
modify and enhance our products to keep pace with changes in these operating
systems and servers. If our products are not compatible with new operating
systems, Web servers, browsers or database servers that achieve sufficient
market penetration, our business will be harmed. In addition, uncertainties
related to the timing and nature of new product announcements, or introductions
or modifications by vendors of operating systems or browsers, could also harm
our business.

POTENTIAL DEFECTS IN OUR PRODUCTS COULD CAUSE SALES TO DECREASE AND COULD
SUBJECT US TO FUTURE WARRANTY CLAIMS.

     Our products are complex and might contain undetected software errors or
failures when new versions are released. We cannot guarantee that, despite
testing by us and by current and prospective customers, we will not find errors
in existing products, new products or product enhancements after commercial
release. These errors may result in loss or delay of market acceptance, which
could have a material adverse effect upon our business, operating results and
financial condition.

IF WE LOSE ANY KEY PERSONNEL, OR FAIL TO ATTRACT AND RETAIN ADDITIONAL
PERSONNEL, WE MAY BE UNABLE TO CONTINUE EXPANDING OUR BUSINESS AND PRODUCT LINE.

     The loss of the services of one or more of our key personnel could have a
material adverse effect on our business, operating results and financial
condition. We do not maintain key person life insurance on any executive
officers other than our Chief Executive Officer and Chief Technology Officer. We
cannot guarantee that we will be able to retain our key personnel. Our future
success also depends on our continuing ability to attract, assimilate and retain
highly qualified sales, technical and managerial personnel. Competition for
these individuals is intense, and there can be no assurance that we can attract,
assimilate or retain necessary personnel in the future.


                                       26
<PAGE>   27


WE HAVE A LIMITED ABILITY TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, AND
OTHERS COULD INFRINGE ON OR MISAPPROPRIATE OUR PROPRIETARY RIGHTS AND
INFORMATION.

     Our software is proprietary and is protected by trade secret, copyright and
trademark laws, license agreements, confidentiality agreements with employees
and nondisclosure and other contractual requirements imposed on our customers,
consulting partners and others. We cannot guarantee that these protections will
adequately protect our proprietary rights or that our competitors will not
independently develop products that are substantially equivalent or superior to
our products. In addition, the laws of countries in which our products may be
licensed in the future may not protect our products and intellectual property
rights to the same extent as the laws of the United States. Although we believe
that our products, trademarks and other proprietary rights do not infringe upon
the proprietary rights of third parties, we cannot guarantee that third parties
will not assert infringement claims against us. The cost of pursuing, enforcing
or defending infringement claims can be substantial and can also require
significant management attention.

                     RISKS RELATED TO THE INTERNET INDUSTRY

IF THE USE OF THE INTERNET DOES NOT EXPAND, THE DEMAND FOR OUR PRODUCTS MAY
STAGNATE OR DECLINE.

     Our future success depends heavily on the Internet being accepted and
widely used. If Internet use does not continue to grow or grows more slowly than
expected, our business, operating results and financial condition would be
materially adversely affected. Consumers and businesses may reject the Internet
as a viable communications medium for a number of reasons, including potentially
inadequate network infrastructure, security concerns, slow development of
enabling technologies or insufficient commercial support. The Internet
infrastructure may not be able to support the demands placed on it by increased
Internet usage and bandwidth requirements. In addition, delays in the
development or adoption of new standards and protocols required to handle an
increased level of Internet activity or increased government regulation could
cause the Internet to lose its viability as a commercial medium. Even if the
required infrastructure, standards, protocols or complementary products,
services or facilities are developed, we may incur substantial expenses adapting
our solutions to changing or emerging technologies.

WE CANNOT BE SURE THAT A SUSTAINABLE MARKET FOR OUR PRODUCTS WILL DEVELOP.

     The market for Web content management software and services is new and
rapidly evolving, and the size and potential growth of this new market and the
direction of its development are uncertain. We have licensed our products to a
small number of customers. We expect that we will continue to need intensive
marketing and sales efforts to educate prospective clients about the uses and
benefits of our products and services. Enterprises that have invested
substantial resources in other methods of conducting business over the Internet
may be reluctant to adopt a new approach that may replace, limit or compete with
their existing systems. Any of these factors could inhibit the growth and market
acceptance of our products and services. Accordingly, we cannot be certain that
a viable market for our products will emerge, or if it does emerge, that it will
be sustainable.

IF THE INTERNET OR E-COMMERCE BECOMES SUBJECT TO GOVERNMENTAL REGULATION OR
OTHER FUTURE LAWS, USE OF AND DEMAND FOR OUR PRODUCTS COULD DECLINE.

     We are not currently required to comply with direct regulation by any
domestic or foreign governmental agency, other than regulations applicable to
businesses generally and any laws or regulations directly applicable to the
Internet. However, due to the increasing popularity of the Internet, it is
possible that laws may be adopted regarding the Internet, any of which could
materially harm our business. For example, because our products can be used for
the solicitation of personal data from individual consumers, our business could
be limited by laws regulating the solicitation, collection or processing of this
data. The Telecommunications Act of 1996 prohibits the transmission of some
types of information and content over the Internet. Legislation imposing
potential liability for information collected or disseminated through our
products could adversely affect our business. In addition, the increased
attention focused upon liability issues as a result of the Telecommunications
Act could limit the growth of Internet commerce, which could decrease demand for
our products.


                                       27
<PAGE>   28


     Export regulations, either in their current form or as may be subsequently
enacted, may limit our ability to distribute our software outside the United
States. The unlawful export of our software could also harm our business.
Although we take precautions against unlawful export of our software, the global
nature of the Internet makes if difficult to effectively control the
distribution of software.

     Furthermore, the growth and development of the Internet may lead to more
stringent consumer protection laws that may impose additional burdens on
companies conducting business online. The adoption of any additional laws may
decrease Internet use or impede the growth of Internet use, which may lead to a
decrease in the demand for our products and services or an increase in the cost
of doing business. Further, the imposition of new sales or other taxes could
limit the growth of Internet commerce generally and, as a result, the demand for
our products. Although recent federal legislation limits the imposition of state
and local taxes on Internet-related sales, there is a possibility that Congress
may not renew this legislation, in which case state and local governments would
be free to impose taxes on goods and services purchased on the Internet.

                     RISKS RELATED TO THE SECURITIES MARKETS

THE MARKET FOR OUR COMMON STOCK HAS BEEN VOLATILE.

     The market for securities of most high technology companies, including
Eprise, has been highly volatile. It is likely that the market price of our
common stock will fluctuate widely in the future. Factors affecting the trading
price of our common stock are likely to include:

     -    responses to quarter-to-quarter variations in our results of
          operations;

     -    the announcement of new products or product enhancements by us or our
          competitors;

     -    technological innovation by us or our competitors;

     -    general market conditions or market conditions specific to particular
          industries; and

     -    changes in earnings estimates by analysts.

WE HAVE ADOPTED ANTI-TAKEOVER PROVISIONS THAT COULD AFFECT THE MARKETABILITY OF
OUR COMMON STOCK.

     Our amended and restated certificate of incorporation and by-laws contain
provisions that could make it more difficult for a third party to acquire us or
effect a change of control in our management, even if doing so would be
beneficial to our stockholders. We have also adopted a shareholder rights plan
designed to encourage potentially hostile acquirors to negotiate with the board
before attempting a takeover of the company. In addition, the provisions of
Delaware law and our stock incentive plans relating to an acquisition or change
in control of Eprise may also have the effect of discouraging, delaying or
preventing a sale.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

     As of December 31, 2000, we had approximately $68.6 million in cash
equivalents and short-term investments that was subject to interest rate risk.
The average interest rate as of December 31, 2000 was approximately 6.6%.

     The primary objective of our investment activities is to preserve principal
while at the same time maximizing yields without significantly increasing risk.
To achieve this objective, we maintain our portfolio of cash equivalents and
short-term investments in a limited number of securities, including both
government and corporate obligations and money market funds. As of December 31,
2000, all of our portfolio matures in one year or less. See Note 1 of Notes to
Consolidated Financial Statements.


                                       28
<PAGE>   29


     We did not hold derivative financial instruments as of December 31, 2000,
and have never held such instruments in the past. We had outstanding debt at
December 31, 2000 of $78,749.

FOREIGN CURRENCY RISK

     Currently, the majority of our sales and expenses are denominated in U.S.
dollars. As a result, we have experienced no significant foreign exchange gains
or losses to date. While we do expect to effect some transactions in foreign
currencies in 2001, we do not anticipate that foreign exchange gains or losses
will be significant. We have not engaged in foreign currency hedging activities
to date.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The response to this item is submitted as a separate section of this Form
10-K entitled "Financial Statements," following Part IV, Item 14.

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

Not applicable


                                       29
<PAGE>   30


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by this item is incorporated herein by reference
to the section entitled "Election of Directors" included in the Company's Proxy
Statement for the Annual Meeting of Stockholders to be held on May 15, 2001,
which will be filed with the Securities and Exchange Commission within 120 days
after the end of the Company's fiscal year to which this Annual Report on Form
10-K relates (the "Proxy Statement"). The disclosure required by Item 405 of
Regulation S-K is incorporated by reference to the section entitled "Section
16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this item is incorporated herein by reference
to the section entitled "Executive Compensation" included in the Proxy
Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item is incorporated herein by reference
to the section entitled "Security Ownership of Certain Beneficial Owners and
Management" included in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item is incorporated herein by reference
to the section "Certain Transactions" included in the Proxy Statement.


                                       30
<PAGE>   31


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     a.   (1) Financial Statements

               All financial statements are set forth following the caption
               "Financial Statements," below.

     a.   (2) Financial Statement Schedules

               Financial statement schedules required by this section are
               omitted as they are either not required or the information
               contained therein is included in the financial statements or
               notes thereto.

     a.   (3) Exhibits

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                              Incorporated by Reference From
-------------------------------------------------------------------------------------------------------------------
No.         Exhibit Title                                              Form               Date         Number
-------------------------------------------------------------------------------------------------------------------
<S>         <C>                                                        <C>                <C>          <C>
3.1         Amended and Restated Certificate of Incorporation of       S-1/A              3/23/00      3.4
            Eprise
-------------------------------------------------------------------------------------------------------------------
3.2+        Certificate of Designation of Series A Junior
            Participating Preferred Stock
-------------------------------------------------------------------------------------------------------------------
3.3         Amended and Restated By-Laws of Eprise                     S-1/A              3/3/00       3.6
-------------------------------------------------------------------------------------------------------------------
4.1         Specimen certificate for shares of the common stock of     S-1/A              3/23/00      4.1
            Eprise
-------------------------------------------------------------------------------------------------------------------
4.2         Description of capital stock (contained in Exhibits 3.1
            and 3.2)
-------------------------------------------------------------------------------------------------------------------
4.3         Warrant to purchase 50,307 shares of common stock,         S-1                1/14/00      4.3
            issued to Silicon Valley Bank on July 18, 1997
            (exercised in part)
-------------------------------------------------------------------------------------------------------------------
4.4         Warrant to purchase 326,995 shares of Series A Preferred   S-1                1/14/00      4.4
            Stock, issued to Prism Venture Partners I, L.P. on
            October 9, 1997
-------------------------------------------------------------------------------------------------------------------
4.5         Warrant to purchase 75,460 shares of common stock,         S-1                1/14/00      4.5
            issued to Silicon Valley Bank on December 5, 1997
-------------------------------------------------------------------------------------------------------------------
4.6         Antidilution Agreement with Silicon Valley Bank, dated     S-1                1/14/00      4.6
            December 5, 1997
-------------------------------------------------------------------------------------------------------------------
4.7         Warrant to purchase 649,227 shares of common stock,        S-1                1/14/00      4.7
            issued to Deutsche Bank Securities Inc. as of September
            8, 1999 (exercised in part)
-------------------------------------------------------------------------------------------------------------------
4.8         Stockholder Rights Agreement dated December 18, 2000       8-K                12/19/00     4
            between the Company and Fleet Bank c/o EquiServe, L.P.
-------------------------------------------------------------------------------------------------------------------
10.1        Lease dated as of February 22, 2000 between NDNE 9/90      S-1/A              3/23/00      10.1
            200 Crossing Boulevard, LLC and Eprise, relating to the
            principal executive offices of Eprise at 200 Crossing
            Boulevard, Framingham, Massachusetts
-------------------------------------------------------------------------------------------------------------------
10.2        Eprise 1997 Amended and Restated Stock Option Plan*        S-1/A              3/3/00       10.5
-------------------------------------------------------------------------------------------------------------------
10.3        Inner Circle Technologies, Inc. 1994 Stock Option Plan*    S-1                1/14/00      10.6
-------------------------------------------------------------------------------------------------------------------
10.4        Eprise 2000 Non-Employee Director Stock Option Plan*       S-1/A              3/3/00       10.7
-------------------------------------------------------------------------------------------------------------------
10.5        Employment Agreement between Eprise Corporation and        S-1                1/14/00      10.8
            Joseph A. Forgione dated as of November 4, 1997*
-------------------------------------------------------------------------------------------------------------------
10.6        Employment Agreement between Eprise Corporation            S-1                1/14/00      10.9
-------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       31
<PAGE>   32


<TABLE>
-------------------------------------------------------------------------------------------------------------------
<S>         <C>                                                        <C>                <C>          <C>
            and Jonathan B. Radoff dated as of December 17, 1997*
-------------------------------------------------------------------------------------------------------------------
10.7        Eprise 2000 Employee Stock Purchase Plan dated January     S-1/A              3/3/00       10.10
            5, 2000, as amended
-------------------------------------------------------------------------------------------------------------------
10.8        Eprise Corporation Retirement Saving Plan dated October    S-1                1/14/00      10.11
            14, 1998, as amended
-------------------------------------------------------------------------------------------------------------------
10.9        Second Amended and Restated Registration Rights            S-1                1/14/00      10.13
            Agreement dated as of November 8, 1999 among Eprise and
            the preferred stockholders of Eprise
-------------------------------------------------------------------------------------------------------------------
10.10       Registration Rights Agreement dated July 18, 1997 among    S-1                1/14/00      10.14
            Eprise and Silicon Valley Bank
-------------------------------------------------------------------------------------------------------------------
10.11       Registration Rights Agreement dated December 5, 1997       S-1                1/14/00      10.15
            among Eprise and Silicon Valley Bank
-------------------------------------------------------------------------------------------------------------------
10.12       Loan and Security Agreement among Eprise and Silicon       S-1                1/14/00      10.16
            Valley Bank dated January 28, 1998
-------------------------------------------------------------------------------------------------------------------
10.13       Negative Pledge Agreement among Eprise and Silicon         S-1                1/14/00      10.17
            Valley Bank dated 1997
-------------------------------------------------------------------------------------------------------------------
10.14       First Loan Modification Agreement among Eprise and         S-1                1/14/00      10.18
            Silicon Valley Bank dated March 1999
-------------------------------------------------------------------------------------------------------------------
10.15+      10.15 Eprise Corporation Stock Loan Program Summary*
-------------------------------------------------------------------------------------------------------------------
21.1+       List of Subsidiaries
-------------------------------------------------------------------------------------------------------------------
23.1+       Independent Auditors' Consent -- Deloitte & Touche LLP
-------------------------------------------------------------------------------------------------------------------
</TABLE>
________________________________________________________________________________

+ Filed herewith.
* Management compensatory plan or agreement.

b.   Reports on Form 8-K

     Eprise filed a Current Report on Form 8-K with the SEC on December 11, 2000
to disclose the Company's adoption of a stock repurchase program. The Company
filed a second Current Report on Form 8-K on December 19, 2000, to disclose the
Company's adoption of a shareholder rights plan.


                                       32
<PAGE>   33


                               EPRISE CORPORATION
                        CONSOLIDATED FINANCIAL STATEMENTS


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>                                                                                        <C>
         Independent Auditors' Report.................................................     F-2
         Consolidated Balance Sheets as of December 31, 1999 and 2000.................     F-3
         Consolidated Statements of Operations for the fiscal years ended December 31,
         1998, 1999 and 2000..........................................................     F-4
         Consolidated Statements of Stockholders' Equity for the fiscal years ended
         December 31, 1998, 1999 and 2000.............................................     F-5
         Consolidated Statements of Cash Flows for the fiscal years ended December 31,
         1998, 1999 and 2000..........................................................     F-6
         Notes to Consolidated Financial Statements...................................     F-7
</TABLE>


                                      F-1
<PAGE>   34


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Eprise Corporation

We have audited the accompanying consolidated balance sheets of Eprise
Corporation and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on the financial statements based on our
audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Eprise Corporation and subsidiaries
as of December 31, 2000 and 1999, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America.


/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
January 23, 2001


                                      F-2
<PAGE>   35


                               EPRISE CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                                           DECEMBER 31,
                                                                                  -----------------------------
                                                                                    2000                1999
                                                                                  ---------           ---------
<S>                                                                               <C>                 <C>
ASSETS
Current Assets:
     Cash and cash equivalents                                                    $  68,631           $  22,456
     Accounts receivable (less allowance for doubtful
       Accounts of  $296 and $189 at December 31, 2000 and 1999,
       Respectively)                                                                  6,361               2,045
     Due from related parties                                                            44                  58
     Prepaid expenses and other current assets                                        1,518                 317
                                                                                  ---------           ---------
           Total current assets                                                      76,554              24,876
                                                                                  ---------           ---------
Property and equipment:
     Computers and equipment                                                          3,540                 987
     Furniture and fixtures                                                           1,119                 135
     Leasehold improvements                                                           1,011                  30
                                                                                  ---------           ---------
           Total                                                                      5,670               1,152
     Less accumulated depreciation and amortization                                  (1,319)               (539)
                                                                                  ---------           ---------
           Property and equipment, net                                                4,351                 613
                                                                                  ---------           ---------
Other Assets, net                                                                       166                  45
                                                                                  ---------           ---------
Total Assets                                                                      $  81,071           $  25,534
                                                                                  =========           =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
     Current portion of equipment line of credit                                  $      79           $      86
     Accounts payable                                                                   763                 148
     Accrued compensation and benefits                                                2,204                 597
     Other accrued expenses                                                           2,635                 495
     Deferred revenue                                                                 2,490                 572
                                                                                  ---------           ---------
           Total current liabilities                                                  8,171               1,898
Long-term equipment line of credit, less current portion                                 --                  79
                                                                                  ---------           ---------
Total liabilities                                                                     8,171               1,977
                                                                                  ---------           ---------
Redeemable convertible preferred stock (Aggregate liquidation
     preference of $38,818)                                                              --              35,316
Stockholders' equity (deficiency):
     Preferred stock, $.01 par value; authorized 10,000 shares;
        no shares issued or outstanding                                                  --                  --
     Common stock, $.001 par value; authorized 90,000 shares; issued
        25,192 and 2,838 shares in 2000 and 1999, respectively                           25                   3
     Additional paid-in capital                                                     126,093              24,332
     Accumulated deficit                                                            (52,823)            (36,025)
     Notes receivable from officers                                                    (344)                (69)
     Treasury stock, at cost, 34 shares in 2000                                         (84)                 --
     Accumulated other comprehensive income                                              33                  --
                                                                                  ---------           ---------
Total stockholders' equity (deficiency)                                              72,900             (11,759)
                                                                                  ---------           ---------
Total liabilities and stockholders' equity (deficiency)                           $  81,071           $  25,534
                                                                                  =========           =========
</TABLE>


     See notes to the consolidated financial statements.


                                      F-3
<PAGE>   36


                               EPRISE CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                         YEAR ENDED
                                                                                        DECEMBER 31,
                                                                        ----------------------------------------------
                                                                          2000               1999               1998
                                                                        --------           --------           --------

<S>                                                                     <C>                <C>                <C>
Revenues:
     Software licenses                                                  $ 13,192           $  2,355           $    345
     Services                                                              5,836              1,304                462
                                                                        --------           --------           --------
         Total net revenues                                               19,028              3,659                807
Cost of revenues (includes compensation costs of $179
     and $15 for stock options in 2000 and 1999, respectively)             7,699              1,125                460
                                                                        --------           --------           --------
Gross profit                                                              11,329              2,534                347

Operating expenses:
     Research and development (includes compensation
         costs of $209 and $73 for stock options in 2000 and
         1999, respectively)                                               5,769              2,360              2,149
     Selling and marketing (includes compensation costs
         of $1,062 and $381 for stock options in 2000 and
         1999, respectively)                                              20,412              5,056              2,349
     General and administrative (includes compensation
         costs of $431 and $55 for stock options in 2000 and
         1999, respectively)                                               5,901              2,005              1,246
                                                                        --------           --------           --------
         Total operating expenses                                         32,082              9,421              5,744
                                                                        --------           --------           --------
Operating loss                                                           (20,753)            (6,887)            (5,397)
Other income (expense):
     Interest income                                                       4,144                314                164
     Interest expense                                                        (48)               (27)               (28)
                                                                        --------           --------           --------
         Other income (expense), net                                       4,096                287                136
                                                                        --------           --------           --------
Loss before income taxes                                                 (16,657)            (6,600)            (5,261)
Income taxes                                                                 (47)                --                 --
                                                                        --------           --------           --------
Net loss                                                                 (16,704)            (6,600)            (5,261)
Accretion of redeemable convertible preferred stock                          (94)           (21,630)               (15)
                                                                        --------           --------           --------

Net loss to common stockholders                                         $(16,798)          $(28,230)          $ (5,276)
                                                                        ========           ========           ========

Net loss per share                                                      $  (0.83)          $ (11.42)          $  (2.40)
                                                                        ========           ========           ========

Weighted-average common shares outstanding                                20,301              2,473              2,200
                                                                        ========           ========           ========

Pro forma loss per share                                                $  (0.70)          $  (0.50)
                                                                        ========           ========

Pro forma weighted-average common shares outstanding                      23,920             13,274
                                                                        ========           ========
</TABLE>


     See notes to the consolidated financial statements.


                                      F-4
<PAGE>   37


                               EPRISE CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                 YEAR ENDED
                                                                                                DECEMBER 31,
                                                                               ----------------------------------------------
                                                                                 2000               1999               1998
                                                                               --------           --------           --------

<S>                                                                            <C>                <C>                <C>
Cash flows from operating activities
     Net loss                                                                  $(16,704)          $ (6,600)          $ (5,261)
     Adjustments to reconcile net loss to net cash used for operating
        activities:
        Depreciation and amortization                                               780                198                146
        Provision for doubtful accounts                                             776                156                  3
        Compensation cost for stock options                                       1,881                524                 --
        Loss on disposal of fixed assets                                             --                  4                 --
        Exchange of redeemable preferred stock for services                          --                 --                 91
        Increase (decrease) in cash from:
           Accounts receivable                                                   (5,092)            (2,098)                27
           Due from related parties                                                  14                (58)                --
           Prepaid expenses and other current assets                             (1,201)              (187)               (40)
           Other assets                                                            (121)               (10)                 6
           Accounts payable                                                         615               (116)                45
           Accrued expenses                                                       3,782                772                (20)
           Deferred revenue                                                       1,918                482               (256)
                                                                               --------           --------           --------
            Net cash used for operating activities                              (13,352)            (6,933)            (5,259)
                                                                               --------           --------           --------

Net cash used for investing activities - purchases of
     property and equipment                                                      (4,520)              (366)              (350)

Cash flows from financing activities:
     Proceeds from issuance of redeemable preferred stock, net of
        issuance costs                                                               --             23,365              8,630
     Proceeds from issuance of common stock, net of
        issuance costs                                                           63,121                 --                 --
     Payments on notes payable                                                      (86)               (79)               (77)
     Proceeds from issuance of note payable                                          --                 --                258
     Proceeds from exercise of stock options and warrants                           816                112                 19
     Repayments of stockholder notes                                                298                 --                 --
     Repurchases of common stock                                                   (102)
                                                                               --------           --------           --------
            Net cash provided by financing activities                            64,047             23,398              8,830
                                                                               --------           --------           --------
Net increase in cash                                                             46,175             16,099              3,221
Cash and cash equivalents, beginning of period                                   22,456              6,357              3,136
                                                                               --------           --------           --------
Cash and cash equivalents, end of period                                       $ 68,631           $ 22,456           $  6,357
                                                                               ========           ========           ========

Supplemental disclosures of cash flow information - cash
     paid for interest
                                                                               $     48           $     --           $     47
                                                                               ========           ========           ========
Summary of noncash investing and financing activities
     Issuance of stock for notes receivable                                    $    573           $     69           $     --
                                                                               ========           ========           ========
     Issuance of preferred stock for services at fair value
                                                                               $     --           $     --           $     91
                                                                               ========           ========           ========
     Issuance of warrants for common stock for services                        $     --           $    331           $     --
                                                                               ========           ========           ========
</TABLE>


See notes to the consolidated financial statements.


                                      F-5
<PAGE>   38
                               EPRISE CORPORATION
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                              ACCUMULATED
                                  COMMON STOCK       TREASURY STOCK     ADDITIONAL                 NOTES         OTHER
                               ------------------  -------------------   PAID IN    ACCUMULATED  RECEIVABLE  COMPREHENSIVE
                                SHARES    AMOUNT    SHARES     AMOUNT    CAPITAL      DEFICIT   FROM OFFICER     INCOME      TOTAL
                               --------  --------  --------   --------  ----------  ----------- ------------ -------------   -----

<S>                            <C>       <C>       <C>        <C>       <C>         <C>         <C>          <C>           <C>
Balance, January 1, 1998          2,162  $      2        --   $     --   $    190     $ (2,519)  $     --      $     --    $ (2,327)
  Exercise of stock options          75        --        --         --         19           --         --            --          19
  Accretion of redeemable
    preferred stock to
    redemption value                 --        --        --         --         --          (15)        --            --         (15)
  Net loss                           --        --        --         --         --       (5,261)        --            --      (5,261)
                               --------  --------  --------   --------   --------     --------   --------      --------    --------

Balance, December 31, 1998        2,237         2        --         --        209       (7,795)        --            --      (7,584)
  Exercise of stock options         601         1        --         --        180           --        (69)           --         112
  Issuance of Series C
    preferred stock                  --        --        --         --     21,555           --         --            --      21,555
  Accretion of redeemable
    preferred stock
    to redemption value              --        --        --         --         --      (21,630)        --            --     (21,630)
  Compensation cost for stock
    options                          --        --        --         --        524           --         --            --         524
  Issuance of warrant for
    services                         --        --        --         --      1,864           --         --            --       1,864
  Net loss                           --        --        --         --         --       (6,600)        --            --      (6,600)
                               --------  --------  --------   --------   --------     --------   --------      --------    --------

Balance, December 31, 1999        2,838         3        --         --     24,332      (36,025)       (69)           --     (11,759)
  Common stock issued upon
    initial public offering,
    net of issuance costs of
    approximately $5.8 million    4,600         5        --         --     63,116           --         --            --      63,121
  Mandatorily redeemable
    convertible preferred
    stock converted to common
    stock                        16,106        16        --         --     35,394           --         --            --      35,410
  Accretion of redeemable
    preferred stock to
    redemption value                 --        --        --         --         --          (94)        --            --         (94)
  Exercise of stock options
    and warrants                  1,648         1         9         18      1,370           --       (573)           --         816
  Repurchases of common stock        --        --       (43)      (102)        --           --         --            --        (102)
  Compensation cost for stock
  options                            --        --        --         --      1,881           --         --            --       1,881
  Repayment of notes
    receivable                       --        --        --         --         --           --        298            --         298
  Translation adjustments            --        --        --         --         --           --         --            33          33
  Net loss                           --        --        --         --         --      (16,704)        --            --     (16,704)
                               --------  --------  --------   --------   --------     --------   --------      --------    --------
Balance, December 31, 2000       25,192  $     25       (34)  $    (84)  $126,093     $(52,823)  $   (344)     $     33    $ 72,900
                               ========  ========  ========   ========   ========     ========   ========      ========    ========
</TABLE>


                                      F-6
<PAGE>   39


                               EPRISE CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS

     Eprise Corporation and its subsidiaries develop, market and implement web
content management solutions that help businesses shape and direct e-business
communications effectively and efficiently. We also provide design and other
consultative services designed to help organizations maximize the value they
derive from the our web content management solutions. Business is conducted
primarily in the United States.

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

     The consolidated financial statements include our accounts and the accounts
of our subsidiaries. All significant intercompany accounts and transactions are
eliminated.

FOREIGN CURRENCY TRANSLATION

     Assets and liabilities of foreign operations are translated into dollars
using exchange rates as of the balance sheet date. The results of operations are
translated at rates in effect during the periods transactions occur. Translation
gains and losses are accumulated as separate components of comprehensive loss.
Transaction gains and losses are recorded to the statement of operations
currently; such gains and losses have not been material to date.

SIGNIFICANT ACCOUNTING POLICIES

     USE OF ESTIMATES

     The preparation of financial statements requires us to make estimates that
affect the reported amounts of assets, liabilities and reported results of
operations. Actual results could differ from those estimates.

     REVENUE RECOGNITION

     Revenue from products is recognized when persuasive evidence of an
arrangement exists, delivery has occurred, the fee is fixed and determinable,
and collectibility is probable. When arrangements contain multiple elements and
vendor specific objective evidence exists for all undelivered elements, we
recognize revenue for the delivered elements using the residual method. For
arrangements containing multiple elements wherein vendor specific objective
evidence does not exist for all undelivered elements, revenue for the delivered
and undelivered elements is deferred until vendor specific objective evidence
exists or all elements have been delivered. Maintenance services revenues,
whether sold separately or as part of a multiple element arrangement, are
deferred and recognized ratably over the term of the maintenance contract,
generally twelve months. Consulting revenue is recognized as services are
performed. Our revenue recognition practices are in conformity with Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements."

     COSTS OF REVENUE

     Costs of revenue consist primarily of personnel costs related to the
provision of services. Costs of licenses, which are comprised of media and
documentation costs, are not material in any period presented.

     COMPREHENSIVE LOSS

     Comprehensive loss represents the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
nonowner sources. For 1999 and 1998, the only item included in comprehensive
loss is the Company's net loss. The components of the Company's comprehensive
loss in 2000 are as follows:

<TABLE>
<S>                                                         <C>
Net loss                                                    $(16,704)
Foreign currency translation adjustment                           33
                                                            --------
Comprehensive loss                                          $(16,671)
                                                            ========
</TABLE>

     CASH AND CASH EQUIVALENTS

     Cash and cash equivalents consist primarily of demand deposits and highly
liquid short-term instruments purchased with remaining maturities of three
months or less.


                                      F-7
<PAGE>   40


                               EPRISE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


     DEPRECIATION AND AMORTIZATION

     Property and equipment are stated at cost. Repairs and maintenance are
expensed as incurred, while betterments are capitalized. Depreciation and
amortization are provided using the straight-line method over estimated useful
lives. Furniture and fixtures are depreciated over 7 years using the half year
convention. Computers/Telecom are depreciated over 3 years using the half year
convention. Any software with a value greater than $1,000 is capitalized over 36
months, with the use of the half month convention rule. Leasehold improvements
are amortized over the life of the lease or the useful life, whichever is
shorter.

     LONG-LIVED ASSETS

     Upon occurrence of certain events or changes in circumstances, we review
the carrying value of its long-lived assets to determine if impairment has
occurred and, if necessary, adjusts the carrying value accordingly. No
adjustments have been required to date.

     STOCK-BASED COMPENSATION

     Compensation expense associated with awards of stock or options to
employees is measured using the intrinsic-value method. Compensation expense
associated with awards to nonemployees is measured using the fair-value method.
(See Note 6)

     INCOME TAXES

     Deferred income taxes are provided for differences between the financial
statement carrying amounts and tax basis of the Company's assets and liabilities
and tax loss and credit carryforwards, using enacted tax rates expected to be in
effect in the years in which the differences are expected to reverse. Valuation
allowances are provided to the extent realization of deferred tax assets is not
considered more likely than not.

     RESEARCH AND DEVELOPMENT COSTS

     Research and development costs, other than software development costs, are
expensed as incurred. Software development costs are capitalized upon
achievement of technological feasibility. To date, no costs have been incurred
which qualify for capitalization.

NET LOSS PER SHARE

     PRO FORMA NET LOSS PER SHARE

     Pro forma net loss per share has been computed using the weighted-average
number of shares of common stock outstanding during each period. In addition,
for purposes of pro forma net loss per share, all shares of Series A, B and C
preferred stock, which were converted to common upon closing of our initial
public offering in March of 2000, have been treated as though they were common
stock in all periods in which such shares were outstanding. In addition, no
effect is given to accretion of the preferred stock for purposes of this
computation.

     HISTORICAL NET LOSS PER SHARE

     Historical net loss per share has been computed using the weighted-average
number of shares of common stock outstanding during each period. Diluted amounts
per share would include the impact of our outstanding potential common shares,
such as options and warrants (computed using the treasury stock method) and
convertible preferred stock. However, the effect of these items would be
antidilutive in all periods presented and they are excluded from the
computation.


                                      F-8
<PAGE>   41


                               EPRISE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

     Our revenues are derived from various customers who generally are not
required to provide collateral for amounts owed to the Company. We operate in
one segment. Our customers are dispersed over a wide geographic area.

     In 1999 major customers accounted for 13% and 10% of our revenues. In 1998,
one customer accounted for 58% of our revenues. No other customers accounted for
more than 10% of revenue in any of the other years presented.

DUE FROM RELATED PARTIES

     Amounts shown as due from related parties represent cash advances due from
our employees as well as loans issued under the stock loan program (see Note 6).

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     DERIVATIVE INSTRUMENTS

     On June 1998, the Financial Accounting Standards Board released Statement
of Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," effective for fiscal years beginning after
June 15, 2000. The adoption of SFAS No. 133 on January 1, 2001 will not have a
material impact on its financial position or results of operations.

3. LINES OF CREDIT

     We have lines of credit with a bank providing for borrowings of up to
$1,000,000 for working capital ($800,000 prior to March 26, 1999) and borrowings
of up to $500,000 for equipment purchases ($400,000 prior to March 26, 1999).

     Borrowings under the working capital commitment are limited to the lesser
of $1,000,000 or 80% of eligible accounts receivable. The revolving line of
credit expires on June 30, 2001. Any borrowings outstanding under the working
capital line of credit bear interest at the bank's prime rate plus .5%. As of
December 31, 1999 and 2000, there were no borrowings under the working capital
line of credit. The equipment line of credit was available to acquire equipment
through December 26, 1999, at which time outstanding borrowings converted to a
term loan. Borrowings under the equipment line of credit bear interest at the
bank's prime rate plus 1.5%. At December 31, 2000, $78,757 was outstanding under
the initial tranche of the equipment line of credit, all of which is due in
2001. As of December 31, 2000, there were no borrowings under the second tranche
of the equipment line of credit.

     The revolving line of credit is collateralized by substantially all of our
assets. Borrowings under the equipment line of credit are collateralized by the
related assets. The lines of credit contain covenants requiring minimum levels
of liquidity and tangible net worth, and prohibit the payment of cash dividends.
At December 31, 1999 and 2000, we were in compliance with the terms and
covenants contained in the amended lines of credit.

4. STOCKHOLDERS' EQUITY

     In November 1999, the number of authorized shares of common stock was
increased to 58,500,000. In March 2000, the number of authorized shares of
common stock was further increased to 90,000,000.

     On December 11, 2000, our board of directors authorized a plan to
repurchase, from time to time, an aggregate of up to $4,000,000 in shares of its
outstanding Common Stock.

    On December 18, 2000, the Board of Directors declared a dividend
distribution, payable to stockholders of record on December 29, 2000, of one
preferred share purchase right for each outstanding share of common stock.


                                      F-9
<PAGE>   42


                               EPRISE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The rights expire on December 18, 2010, and will be exercisable only if a person
or group (an "Acquiring Person") becomes the beneficial owner of 15% or more of
the Company's common stock or commences a tender or exchange offer which would
result in the offeror beneficially owning 15% or more of the common stock. Each
right entitles the registered holder to purchase one one-hundredth of a share of
newly issued Series A Junior Participating Preferred Stock at an exercise price
of $21.00 (subject to certain adjustments). Each one one-hundredth of a share of
Series A Preferred Stock has designations and powers, preferences and rights
which make its value approximately equal to the value of a share of the
Company's common stock. The Company generally will be entitled to redeem the
rights at $0.01 per right at any time prior to the tenth day following a public
announcement of the existence of an Acquiring Person. The description and terms
of the rights are set forth in a Stockholder Rights Agreement dated December 18,
2000.

     REDEEMABLE CONVERTIBLE PREFERRED STOCK

     Prior to the completion of our initial public offering of common stock in
March 2000, we had three series of redeemable convertible preferred stock
outstanding; Series A, Series B and Series C. These series were issued at
various times from 1997 through 1999, and all contained preferences over our
common stock, including liquidation preferences, cash redemption requirements,
dividend preferences, and voting privileges. When we closed upon the initial
public offering, all outstanding shares of redeemable convertible preferred
stock were automatically converted into 16,105,845 shares of our common stock,
and those classes of preferred stock were cancelled and all privileges they
contained before conversion were terminated.

     As of December 31, 1999, the number of shares and liquidation value of the
three classes of our redeemable convertible preferred stock were as follows:

     Number of shares:
         Series A                                    10,515,925
         Series B                                    14,320,446
         Series C                                    16,233,766

     Redemption and liquidation value:
         Series A                                 $   5,225,889
         Series B                                 $   8,592,268
         Series C                                 $  25,000,000

     Because the issuance of the Series C was close to the commencement of the
Company's initial public offering, we concluded that a beneficial conversion
feature was present in the Series C stock on the date of issuance. For purposes
of evaluating this beneficial conversion feature, we determined that the
mid-point value implied in the preliminary range of prices for the initial
public offering ($9.00) represented the fair value of our common stock on the
date the Series C was issued.

     As a result of this beneficial conversion feature, the proceeds from the
Series C financing were allocated between the conversion feature and the Series
C stock; because the fair value of the common stock ($9.00) was significantly in
excess of the conversion price implicit in the Series C stock ($3.93), the
entire amount of net proceeds ($21,555,501) were allocated to the conversion
feature. Since the Series C was immediately convertible into common stock, an
immediate dividend or accretion of $21,555,501 was recorded from common
stockholders' equity to the carrying value of the Series C preferred stock.

     WARRANTS

     In connection with the private placement the Series C preferred stock, we
issued to the placement agent a warrant to purchase 254,598 shares of our common
stock at an exercise price of $3.93 per share. The warrant expires five years
from the issuance date (September 1999). The estimated fair value of the warrant
as of the date of grant was


                                      F-10
<PAGE>   43


                               EPRISE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

$1,863,759. The warrant has been recorded as an issuance cost and was offset
against the initial carrying value of the Series C Stock.

     The warrant was valued on the date of grant using the Black-Scholes option
pricing model and the assumptions we used to value the warrant were:

<TABLE>
<S>                                                                                                               <C>
Risk-free interest rate.........................................................................................     6.0%
Expected life of warrant........................................................................................  5 years
Expected dividend payment rate, as a percentage of the stock price on the date of grant.........................      --
Assumed volatility..............................................................................................      51%
Fair value of underlying common stock...........................................................................   $9.00
</TABLE>

     STOCK OPTIONS

     In August 1997, we adopted the 1997 Stock Option Plan (the "1997 Plan"),
which provides for the issuance of common stock as either incentive stock
options ("ISOs") or nonqualified stock options ("NSOs"). Under the terms of the
1997 Plan, ISOs are to be granted at the fair market value of our common stock
on the date of grant and NSOs are to be granted at a price determined by the
Board of Directors. ISOs and NSOs generally vest over four years and have
contractual lives of up to ten years. In December 1999, we amended the plans to
allow the holder of options to exercise their options immediately, with a
requirement that the employees rights to the shares vest over a period that is
identical to the original vesting schedule. Should the employee terminate prior
to vesting, the employee is required to resell the shares to us at the original
purchase price. This amendment did not result in a new measurement date.

     In December 1999, the 1997 Plan was amended to provide for automatic
increases in options available for grant on January 1 of each of 2000, 2001 and
2002. The increase in options available (and the related reserved shares of
common stock) in any given year is limited to the lesser of 5% of the total
outstanding shares of common stock as of December 31st of the previous year or
1,372,549 additional options.

     As of the effective date of the 1997 Plan, any unvested or unexercised
options that were issued under the 1997 Plan's predecessor, the 1994 Plan, that
are forfeited will become available for issuance under the 1997 Plan thereby
increasing the options available for grant under the 1997 Plan to a maximum of
4,144,281 shares. Option activity under both the 1997 and 1994 plans is as
follows:

<TABLE>
<CAPTION>
                                                                    WEIGHTED-       WEIGHTED-
                                                                     AVERAGE         AVERAGE
                                                 NUMBER OF           EXERCISE         FAIR
                                                  SHARES              PRICE           VALUE
                                                 ---------          ---------       ---------
<S>                                             <C>                  <C>            <C>
Outstanding, January 1, 1998..........           1,153,493           $ 0.64
  Granted ............................             962,393             0.28          $ 0.08
  Exercised ..........................             (75,196)            0.26
  Canceled ...........................            (239,706)            0.26
                                                ----------

Outstanding, December 31, 1998 .......           1,800,984           $ 0.26
  Granted ............................           1,380,940             0.99          $ 2.37
  Exercised ..........................            (680,287)            0.30
  Canceled ...........................            (356,373)            0.29
                                                ----------

Outstanding, December 31, 1999........           2,225,264           $ 0.71
  Granted.............................           1,370,936             8.49          $ 6.84
  Exercised...........................          (1,519,774)            0.60
  Canceled............................            (370,118)            6.38
                                                ----------

Outstanding, December 31, 2000........           1,706,308           $ 5.85
                                                ==========
Vested, December 31, 2000 ............           1,366,802           $ 0.35
                                                ==========
Vested, December 31, 1999 ............             586,549           $ 0.26
                                                ==========
Vested, December 31, 1998 ............             337,902           $ 0.26
                                                ==========
</TABLE>


                                      F-11
<PAGE>   44


                               EPRISE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


     In July, 1999, the Board of Directors approved a stock loan program, which
allows specified employees to fund the purchase of common stock pursuant to the
exercise of stock options through loans from the Company. Borrowings are limited
to 50% of the employee's annual salary. Loans under this program bear interest
at a fixed rate of 0.5% over the Company's cost of funds on the date of the loan
and are secured by the underlying shares, with the exception of the interest
charges which are on a full-recourse basis. All loans are due no later than five
years from the date of the loan. At December 31, 2000, $641,936 had been
advanced to employees under this program.

     In January 2000, the Board of Directors approved the 2000 Employee Stock
Purchase Plan, which allows our employees to purchase our common stock through
payroll deductions at 85% of the then fair market value of the Company's stock.
The Company reserved 588,235 shares for issuance under the plan. The plan
provides for automatic increases in shares available for purchase under the
plan. In general, the increase in shares available in any given year is limited
to the lesser of 1% of the total outstanding shares of common stock as of
December 31st of the previous year or 294,118 additional shares.

The 2000 Non-Employee Director Stock Plan provides for the issuance of options
covering up to 274,510 shares of common stock to non-employee directors. Under
the plan, non-employee directors receive a one-time grant of 15,686 options upon
election to the Board of Directors. In addition, each year all non-employee
directors will automatically receive an additional grant of 7,843 shares
following our annual meeting. Options granted under the plan will be immediately
exercisable, but will be subject to repurchase restrictions which will lapse
over a three year period following the grant. Options granted under the plan
contain exercise prices equal to the fair market value of the underlying common
stock on the date of grant.

     At December 31, 2000, there were 221,122 options available for grant under
the 1997 Plan, including those shares forfeited under the 1994 Plan.

     Grants made during 1999 contained exercise prices which were our best
estimate of fair value of the underlying common stock on the date of grant.
However, subsequent to the grant date, we concluded that for grants after the
release of the new version of our principal product, these estimates may not
have fully reflected the impact of this event. We concluded that for grants made
between May and August 1999, $3.93 was a more reliable estimate of the fair
value of the common stock during this period. For grants made in periods after
August 1999, we concluded that the mid-point value implied in the preliminary
range of prices for our initial public offering ($9.00) was a more reliable
estimate of the fair value of the common stock during the period. For grants
during this period, compensation cost aggregated $6,796,000, which is being
amortized to expense over the four year vesting period of the option grants. For
the years ended December 31, 1999 and 2000, compensation expense recorded
related to these grants aggregated $523,726 and $1,881,445 respectively.

     The fair value of the options on their grant date was measured using the
Black-Scholes option pricing model. Key assumptions used to apply this option
pricing model are as follows:

<TABLE>
<CAPTION>
                                                   YEAR ENDED      YEAR ENDED      YEAR ENDED
                                                  DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                      1998            1999            2000
                                                  ------------    ------------    ------------

<S>                                               <C>             <C>             <C>
Risk-free interest rate .................              6.0%            6.0%            5.5%
Expected life of option grants...........           5 years         5 years         5 years
Expected dividend payment
  rate, as a percentage
  of the stock price on
  the date of grant .....................               --              --              --
Assumed volatility ......................               --%             --%            168%
</TABLE>


                                      F-12
<PAGE>   45


                               EPRISE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


     The option-pricing model used was designed to value readily tradable stock
options with relatively short lives. However, we believe that the assumptions
used to value the options and the model applied yield a reasonable estimate of
the fair value of the grants made under the circumstances.

     The following table sets forth information regarding options outstanding
and vested at December 31, 2000:

<TABLE>
<CAPTION>
                                OPTIONS OUTSTANDING                                       OPTIONS VESTED
----------------------------------------------------------------------------         -------------------------
                                                  WEIGHTED          WEIGHTED                         WEIGHTED
                                                  AVERAGE           AVERAGE                           AVERAGE
                             EXERCISE             REMAINING         EXERCISE                         EXERCISE
    SHARES                    PRICE                 LIFE             PRICE           SHARES            PRICE
    ------                   --------             ---------         --------         ------          ---------

<S>                       <C>                    <C>                <C>            <C>                <C>
1,706,308.......          $0.26 - 17.75          9.04 years          $5.85          1,366,802          $0.35
</TABLE>

     As described in Note 2, we use the intrinsic value method to measure
compensation expense associated with grants of stock options to employees. If we
had used the fair value method to measure compensation, reported net loss would
have been as follows:

<TABLE>
<CAPTION>
                                           YEAR ENDED            YEAR ENDED             YEAR ENDED
                                          DECEMBER 31,          DECEMBER 31,           DECEMBER 31,
                                              1998                   1999                  2000
                                          ------------          ------------           ------------
<S>                                       <C>                   <C>                    <C>
As reported ....................          $    (5,261)          $     (6,600)          $    (16,704)
                                          ===========           ============           ============
Pro forma ......................          $    (5,337)          $     (8,277)          $    (19,991)
                                          ===========           ============           ============
Pro forma loss per share........          $     (2.42)          $     (12.09)          $      (0.99)
                                          ===========           ============           ============
</TABLE>

     RESERVED SHARES

     At December 31, 2000, 4,891,534 shares of common stock were reserved for
issuance under our stock option plans and outstanding warrants.

6. INCOME TAXES

     The components of the provision (benefit) for income taxes consisted of the
following:


<TABLE>
<CAPTION>
                                                       YEAR ENDED            YEAR ENDED            YEAR ENDED
                                                      DECEMBER 31,          DECEMBER 31,          DECEMBER 31,
                                                          1998                  1999                  2000
                                                      ------------          ------------          ------------

<S>                                                   <C>                   <C>                   <C>
Federal -- deferred ........................          $(1,619,000)          $(2,144,000)          $(4,786,000)
State -- deferred ..........................             (500,000)             (627,000)           (1,606,000)
State -- current............................                   --                    --                47,000
Increase in valuation allowance.............            2,119,000             2,771,000             6,392,000
                                                      -----------           -----------           -----------
Provision (benefit) for income
  taxes.....................................          $        --           $        --           $    47,000
                                                      ===========           ===========           ===========
</TABLE>


                                      F-13
<PAGE>   46


                               EPRISE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


     A reconciliation of the statutory federal rate to the effective rate for
all periods is as follows:

<TABLE>
<S>                                               <C>
Statutory Federal rate benefit..........          (34)%
State, net of Federal effect ...........           (6)
Valuation allowance provided ...........           40
                                                  ---
Effective rate .........................           --%
                                                  ===
</TABLE>

     Deferred tax assets and liabilities consisted of the following:

<TABLE>
<CAPTION>
                                               DECEMBER 31,           DECEMBER 31,
                                                   1999                   2000
                                               -----------            ------------

<S>                                           <C>                    <C>
Deferred tax assets (liabilities):
  Property and equipment ...........          $    (58,000)          $   (153,000)
  Accounts receivable -
     allowance for doubtful accounts                76,000                117,000
  Accrued liabilities ..............                72,000                231,000
  Net operating loss carryforwards .             5,336,000             11,165,000
  Research and development credits .               133,000                610,000
  Valuation allowance ..............            (5,559,000)           (11,970,000)
                                              ------------           ------------
                                              $         --           $         --
                                              ============           ============
</TABLE>

     At December 31, 2000, we had net operating loss carryforwards for federal
and state tax purposes aggregating approximately $27.7 million available to
offset future taxable income. These net operating loss carryforwards expire in
varying amounts through 2020. At December 31, 2000, we had federal and state tax
credits aggregating $610,000 available to offset future taxable income, expiring
through 2014. Due to changes in ownership due to stock issuances during 1997,
1998 and 1999, our ability to utilize these carryforwards and credits is likely
to be limited.

     The valuation allowance increased by $2,771,000 and $6,392,000 in 1999 and
2000, respectively, primarily due to the generation of net operating loss
carryforwards and credits for which realization is more likely than not.

7. EMPLOYEE BENEFIT PLAN

     We have a qualified 401(k) retirement plan (the "Plan") under which
eligible employees may contribute up to 20% of their annual compensation,
subject to limitations imposed by the Internal Revenue Code. We provide
matching contributions of 50% of the employee salary deferral, up to 5% of
eligible earnings. Employees vest immediately in their contributions and
earnings thereon and ratably over six years in our contributions. During the
years ended December 31, 1998, 1999, and 2000, we made matching contributions of
approximately $55,800, $81,880 and $174,225 respectively.


                                      F-14
<PAGE>   47


                               EPRISE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


8. COMMITMENTS AND CONTINGENCIES

     LEASE COMMITMENTS

     We have operating lease agreements for facilities. In 2000, we entered into
a short-term lease for an operating facility. This lease called for rental
payments of $171,126 and expired at the end of September 2000. We also entered
into a ten year lease, commencing in October 2000, for a 78,260 sq. ft.
operating facility.

     Future minimum lease commitments for all noncancelable operating leases at
December 31, 2000 approximated the following:

<TABLE>
<S>                                                <C>
Years Ending December 31:
  2001...........................................  $ 2,108,000
  2002...........................................    2,114,000
  2003...........................................    2,136,000
  2004...........................................    2,251,000
  2005...........................................    2,251,000
  Thereafter.....................................    5,486,000
</TABLE>

     Rent expense under operating lease agreements approximated (including the
termination fee) $198,400, $255,835 and $1,170,551 for the years ended December
31, 1998, 1999 and 2000 respectively.


                                   * * * * *


                                      F-15
<PAGE>   48


                                   SIGNATURES

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

                                             EPRISE CORPORATION


Dated:  March 30, 2001                       By: /s/ Joseph A. Forgione
                                                 -------------------------------
                                                 Joseph A. Forgione
                                                 President and Chief Executive
                                                  Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities indicated below on the 30th day of March, 2001.

<TABLE>
<CAPTION>
               Signature                                              Title
               ---------                                              -----

<S>                                                     <C>
/s/ Joseph A. Forgione                                  President, Chief Executive Officer,
------------------------------------------              and Director
          (Joseph A. Forgione)                          (Principal Executive Officer)

/s/ Milton A. Alpern                                    Senior Vice President, Finance and Administration,
------------------------------------------              and Chief Financial Officer
           (Milton A. Alpern)                           (Principal Financial and Accounting Officer)

/s/ Edson D. de Castro                                  Chairman of the Board and Director
------------------------------------------
          (Edson D. de Castro)

/s/ Deborah M. Besemer                                  Director
------------------------------------------
          (Deborah M. Besemer)

/s/ Robert C. Fleming                                   Director
------------------------------------------
          (Robert C. Fleming)

/s/ Alain J. Hanover                                    Director
------------------------------------------
          (Alain J. Hanover)

/s/ Nicholas A. Papantonis                              Director
------------------------------------------
       (Nicholas A. Papantonis)

/s/ Jonathan B. Radoff                                  Director
------------------------------------------
         (Jonathan B. Radoff)

/s/ Joseph J. Tischler                                  Director
------------------------------------------
         (Joseph J. Tischler)
</TABLE>