<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-KSB
(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, 1998
                                       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 0-24213

                     CHAPMAN CAPITAL MANAGEMENT HOLDINGS, INC. 
                 -----------------------------------------------
                  (Name of Small Business Issuer in Its Charter)
            MARYLAND                                            52-2097010 
       ----------------                                       ---------------
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                             Identification No.)

           401 EAST PRATT STREET, 28TH FLOOR, BALTIMORE, MARYLAND 21202 
           ------------------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)

Issuer's telephone number, including area code: (410) 625-9656 
                                               ----------------
Securities registered pursuant to Section 12(b) of the Exchange Act: None 
Securities registered pursuant to Section 12(g) of the Exchange Act: 

                   COMMON STOCK, PAR VALUE $0.001 PER SHARE
                   ----------------------------------------
                                (Title of Class)

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

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation 
S-B is not contained herein, and no disclosure will 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-KSB or any amendment to 
this Form 10-KSB. [ ]

The issuer's revenues for its most recent fiscal year were:  $3,218,326.

The aggregate market value of the voting stock and non-voting common equity 
held by non-affiliates computed by reference to the average bid and asked 
price of such common equity on March 10, 1999 was $6,990,221.

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS 

The number of outstanding shares of Common Stock of the registrant as of 
March 10, 1999 was 3,351,334. Transitional Small Business Disclosure Format 
(check one).  Yes [   ]  No [ X ]

                       Documents Incorporated by Reference

Selected portions of the Registrant's Annual Report to Stockholders for the 
year ended December 31, 1998 and selected portions of the Proxy Statement 
pertaining to the Annual Meeting are incorporated herein by reference into 
Parts II and III.

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                                TABLE OF CONTENTS
                                                                           PAGE
                                                                           ----

PART I


   ITEM 1.  DESCRIPTION OF BUSINESS....................................... 3

   ITEM 2.  DESCRIPTION OF PROPERTY....................................... 8

   ITEM 3.  LEGAL PROCEEDINGS............................................. 9

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........... 9

PART II


   ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...... 9

   ITEM 5A. RISK FACTORS..................................................10

   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
            CONDITION AND RESULTS OF OPERATIONS...........................15

   ITEM 7.  FINANCIAL STATEMENTS..........................................15

   ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 
            ACCOUNTING AND FINANCIAL DISCLOSURE...........................15

PART III


   ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL   
            PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT....15

   ITEM 10. EXECUTIVE COMPENSATION........................................15

   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 
            AND MANAGEMENT................................................16

   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................16

   ITEM 13. EXHIBITS LIST AND REPORTS ON FORM 8-K.........................16




Domestic Emerging Markets(R) and DEM(R) are registered trademarks and DEM
Profile(TM), DEM Universe(TM), DEM Company(TM) DEM Index (TM) and the stylized
C-Eagle logo are trademarks of Nathan A. Chapman, Jr.


                                       2


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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

         Chapman Capital Management Holdings, Inc. (the "Company") is an
African-American owned and controlled holding company. The Company's
wholly-owned operating subsidiary, Chapman Capital Management, Inc. ("CCM"), is
an investment management company that is registered with the Securities and
Exchange Commission (the "Commission") as an investment adviser. CCM manages the
assets of registered investment companies and the funds of individual and
institutional investors on a separate account basis. As of February 28, 1999,
CCM had approximately $619.0 million in total assets under management. (Unless
the context otherwise indicates, the Company and CCM are hereinafter referred to
collectively as the "Company")

         The Company manages assets for two registered open-end investment
portfolios, the DEM Equity Fund and The Chapman U.S. Treasury Money Fund, each a
portfolio of The Chapman Funds, Inc. The DEM Equity Fund and The Chapman U.S.
Treasury Money Fund are sometimes referred to herein as the "Funds." In December
1996, the Company established a private group trust, the Domestic Emerging
Markets-Minority Equity Trust Fund for Qualified Employee Benefit Plans (the
"DEM-MET Trust") for which it provides investment management services.

         The Company is headquartered at the World Trade Center--Baltimore, 401
East Pratt Street, 28th Floor, Baltimore, Maryland 21202 and its telephone
number is (410) 625-9656. The Company was incorporated in Maryland on January 8,
1998. CCM, a District of Columbia corporation, was established as an investment
advisor in 1988.

STRATEGY

         The Company has implemented a strategic initiative called the Domestic
Emerging Markets ("DEM") strategy which seeks investment in domestic companies
controlled by African-Americans, Asian-Americans, Hispanic-Americans and women
(the "DEM Profile"). The Company believes that there exists a substantial
demand, especially from government entities and large institutions, to invest in
companies that meet the DEM Profile ("DEM Companies") and has designed its
investment products to provide a single source for meeting this objective while
achieving a competitive rate of return.

         In addition, in December 1996, the Company established and currently
acts as advisor to the DEM-MET Trust. As advisor, the Company allocates a
portion of the investment responsibility for the trust's assets among investment
management companies that meet the DEM Profile. The Company introduced this
strategy, the DEM Multi-Manager strategy, with the DEM-MET Trust and will seek
to increase its assets under management through the development of additional
products under this strategy.

         The Company's DEM and DEM Multi-Manager strategies are in the early
stages of implementation. The Company has not conducted any marketing surveys to
test their marketability nor has the Company engaged in any significant
marketing of these strategies. 

                                       3

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Therefore, the viability of the DEM and DEM Multi-Manager strategies and 
their level of market acceptance is largely unknown.

INVESTMENT PRODUCTS

         The Company currently manages two registered investment portfolios, the
DEM Equity Fund and The Chapman U.S. Treasury Money Fund, each a portfolio of
The Chapman Funds, Inc. The Company has formed and manages one private
investment trust, the DEM-MET Trust. The Company also advises corporate,
institutional and individual investors on a separate account basis.

         DEM EQUITY FUND is a non-diversified portfolio of The Chapman Funds,
Inc., a diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"). The
principal investment objective of the DEM Equity Fund is aggressive long-term
growth through investment in equity securities of companies meeting the DEM
Profile. As of February 28, 1999, the DEM Equity Fund had approximately $9.96
million in assets. The DEM Equity Fund commenced operations in April 1998.

         THE CHAPMAN U.S. TREASURY MONEY FUND, also a portfolio of The Chapman
Funds, Inc., invests solely in short-term direct obligations of the U.S.
Government and repurchase agreements collateralized fully by direct obligations
of the U.S. Government. This fund is intended primarily for state and local
governments and their authorities and agencies. As of February 28, 1999, The
Chapman U.S. Treasury Money Fund had approximately $74.4 million in assets. The
Chapman U.S. Treasury Money Fund began operations in June 1989.

         DEM-MET TRUST was organized in 1996 under New York law. The DEM-MET
Trust is intended to qualify as a tax-exempt pooled trust for qualified employee
benefit plans and certain governmental plans. The DEM-MET Trust is the first
product introduced by the Company that employs the DEM Multi-Manager strategy.
See "--Strategy." The DEM-MET Trust allocates its assets to investment
portfolios managed by money managers meeting the DEM Profile. These money
managers invest their allocated assets in the securities of domestic and foreign
issuers which may consist of common stock, or other types of equity investments,
or temporary money market funds chosen by the Company. The Company acts as
investment advisor to the DEM-MET Trust and in such capacity is responsible for
selecting and monitoring the sub-advisors, all of whom meet the DEM Profile. As
of February 28, 1999, the Company had sub-advisory relationships with fourteen
investment advisors, all of which meet the DEM Profile. The Company evaluates
such sub-advisors monthly and reallocates assets among existing sub-advisors and
new sub-advisors as necessary. The DEM-MET Trust was created in December 1996
pursuant to an agreement between The Chapman Co. and Bankers Trust Company, as
custodial trustee. As of February 28, 1999, the DEM-MET Trust had approximately
$265.5 million in assets.

         SEPARATE ACCOUNTS The Company also provides investment advisory
services to separate accounts under individual investment advisory agreements.
The Company manages equity and debt portfolios with varied investment objectives
including long term capital appreciation and current income. As of February 28,
1999, approximately 40.5% of the separate accounts under management incorporate
the DEM strategy as an investment objective. The Company will continue to
attempt to differentiate itself from other investment managers by providing the
DEM strategy as an investment objective. As of February 28, 1999, the Company

                                       4

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managed approximately $269.1 million in assets for separate accounts, of 
which $109.1 million was invested pursuant to the DEM Strategy.

         Compensation for individual investment advisory services is typically
based upon assets under management.

         All of the Company's investment advisory services including portfolio
management, marketing, research and customer service are provided from the
Company's Baltimore headquarters and each of Company's affiliated investment
companies maintains its office at the Baltimore headquarters.

MARKETING AND CUSTOMER SERVICE

         The Company's marketing strategy is to provide a single source for
investing in DEM companies while achieving a competitive rate of return. The
Company aggressively markets to large corporations, government entities and
other institutions seeking investment in DEM Companies.

         The Company targets its marketing efforts to the various types of
customers that use its investment advisory and asset management services. The
Company's separate accounts are typically large institutional investors. The
Company markets to these accounts through customer support activities and
personal sales efforts by officers of the Company. This strategy has also been
utilized with the DEM-MET Trust due to the small number of large investors that
have invested in the trust.

         The Company's proprietary investment products are distributed by The
Chapman Co., an affiliate of the Company. To date, the Company's investment
product marketing activities have been providing "wholesale" marketing
assistance to support The Chapman Co.'s direct retail selling efforts. The
Company intends to offer proprietary investment funds to banks, insurance
companies, providers of 401(k) deferred compensation plans and other
institutions ("Institutional Resellers") for resale to their customers. The
Company will provide support to The Chapman Co. in marketing to Institutional
Resellers and to the Institutional Resellers' own retail sales forces. The
Company may also undertake some limited advertising of its proprietary
investment products.

         In addition to separate accounts and proprietary investment products,
the Company will seek to enter into agreements with other investment advisors
whereby the Company will act as a sub-advisor with respect to their proprietary
investment products. The Company will provide wholesale marketing assistance to
the distributors of such third-party proprietary investment products to ensure
that such products are effectively marketed by the third-party distributors to
the investment community.

RESEARCH

         As of February 28, 1999, the Company employed two portfolio managers.
The Company intends to hire additional portfolio managers to support its
existing investment advisory and management services and to facilitate the
introduction and maintenance of new investment products.

                                       5

<PAGE>

         The Company currently employs a buy-side analyst to assist the
portfolio managers in investment research, monitoring of investment
opportunities and the development and maintenance of the Company's proprietary
DEM valuation and screening model. The Company also utilizes the research
services of The Chapman Co. for coverage on certain companies meeting the DEM
Profile. The Company intends to expand its research staff by hiring additional
buy-side analysts.

INDUSTRY

         Revenues in the investment management industry are fee-based and
determined primarily by assets under management. Therefore, the principal
determinant of growth in the industry is the growth of assets under management.
The major factors which influence changes in assets under management are changes
in the market value of securities; net cash flow into or out of existing
accounts; gains of new or losses of existing accounts; and the introduction of
new products by the industry or by particular firms.

         In general, assets under management in the industry have increased
steadily. According to the Investment Company Institute, the combined assets of
the nation's mutual funds increased by $1,062.2 billion in 1998 to a total of
$5.530 trillion under management. Assets under management rose approximately 24%
for the year 1998, reflecting both the performance of the stock markets as well
as new investment by mutual fund owners. Net new cash flow into mutual funds
rose for the fourth straight year to a record $478.9 billion in 1998 with
increases in all fund categories including equity, bond and income, and money
market.

         Although as of February 28, 1999, the Company's total assets under
management attributable to mutual funds are approximately 13.6% of its total
assets under management, the Company intends to emphasize the creation of new
mutual fund investment products as part of its ongoing strategy.

GOVERNMENT REGULATION

         The Company's business is subject to various federal and state laws and
regulations. These laws and regulations are primarily intended to protect
investment advisory clients and stockholders of registered investment companies.
Under these laws and regulations, agencies that regulate investment advisors
have broad administrative powers, including the power to limit, restrict, or
prohibit an advisor from carrying on its business in the event that it fails to
comply with applicable laws and regulations. Possible sanctions that may be
imposed include the suspension of individual employees, limitations on engaging
in certain lines of business for specified periods of time, revocation of
investment advisor and other registrations, censures, and fines. The Company
believes that it is in substantial compliance with all material laws and
regulations.

         The Company is registered with the Commission under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and is subject to
examination by the Commission. Under Section 206 of the Advisers Act, it is
unlawful for any investment advisor to: (i) employ any device, scheme, or
artifice to defraud any client or prospective client; (ii) engage in any
transaction, practice, or course of business which operates as a fraud or deceit
upon any client or prospective client; or (iii) engage in any act, practice, or
course of business which is fraudulent, deceptive or manipulative. The Advisers
Act imposes numerous other obligations on registered investment advisors
including fiduciary duties, recordkeeping requirements, operational

                                       6

<PAGE>

requirements, and disclosure obligations. The Commission is authorized to
institute proceedings and impose sanctions for violations of the Advisers Act,
ranging from censure to termination of an investment adviser's registration. The
failure of the Company to comply with the requirements of the Commission could
have a material adverse effect on the Company.

         An investment advisor to a registered investment company, its
principals, and its employees may also be subject to proceedings initiated by
the Commission to impose remedial sanctions for violation of any provision of
the federal securities laws and the regulations adopted thereunder, and the
Commission may prohibit such investment advisor to an investment company from
continuing to act in such capacity. Stockholders of registered investment
companies or the Commission may also bring an action against the officers,
directors, and investment advisor for breach of fiduciary duty in establishing
the compensation paid to the investment advisor.

         The Funds are registered with the Commission under the Investment
Company Act and the sale of shares in the Funds has been registered under the
Securities Act of 1933, as amended (the "Securities Act"). Investment companies
such as The Chapman Funds, Inc. and any future registered investment companies
established and/or advised by the Company, are subject to considerable
substantive regulation. Such companies must comply with periodic reporting
requirements. Proxy solicitations are subject to the general proxy rules as well
as to special proxy rules applicable only to investment companies. Shares of
open-end investment companies such as the DEM Equity Fund and The Chapman U.S.
Treasury Money Fund, can only be offered at a uniform public offering price
based on the current net asset value per share plus the sales load. No more than
60% of the directors of registered investment companies can be interested
persons, defined to include, among others, persons affiliated with the
management company or underwriter, and a majority of the directors must not be
affiliated with the underwriter. The advisory agreement must have initially been
approved by a majority of the outstanding shares and, after two years, must be
annually approved, either by the board or by the outstanding voting shares. The
advisory agreement must be subject to termination upon 60 days notice by the
board or by the outstanding voting shares. The underwriting agreement must be
annually approved by the board or by a vote of a majority of the outstanding
voting shares, and must provide for automatic termination in the event of an
assignment. With limited exceptions, transactions between the investment company
and an affiliate can be entered into only if approved by the Commission, after
notice and opportunity for hearing, as fair and equitable.

         The Company derives a large portion of its revenues from its investment
company management agreements. Under the Advisers Act, the Company's investment
management agreements terminate automatically if assigned without the client's
consent. Under the Investment Company Act, advisory agreements with registered
investment companies such as the Funds terminate automatically upon assignment.
The term "assignment" is broadly defined and includes direct assignments as well
as assignments that may be deemed to occur, under certain circumstances, upon
the transfer, directly or indirectly, of a controlling interest in the Company.

COMPETITION

         The Company's investment advisory business competes with a number of
larger, more established investment advisors and securities firms. Competition
is influenced by various factors, including product offering, quality of service
and price. All aspects of Company's advisory business are competitive, including
competition for assets to manage. Large national 

                                       7

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firms, often with more personnel, have much greater marketing, financial, 
technical, research, and other capabilities. These firms offer a broader 
range of financial services than the Company and compete not only with the 
Company and among themselves but also with commercial banks, insurance 
companies and others for retail and institutional clients. The investment 
funds managed by the Company are similarly subject to competition from 
nationally and regionally distributed funds offering equivalent financial 
products with returns equal to or greater than those offered by the Company's 
affiliated investment funds.

         The Company's investment management operations compete with a large
number of other investment management firms, commercial banks, insurance
companies, broker/dealers and other financial service firms. Most of these firms
are larger and have access to greater resources than the Company. The investment
advisory industry is characterized by relatively low cost of entry and the
formation of new investment advisory entities which may compete directly with
the Company is a frequent occurrence. The Company directly competes with many
firms which are of similar or larger size. The Company's ability to increase and
retain assets under management could be materially adversely affected if client
accounts or the Company's affiliated investment funds under-perform specified
market benchmarks. The ability of the Company to compete with other investment
management firms also is dependent, in part, on the relative attractiveness of
their investment philosophies and methods under prevailing market conditions.

         A large number of investment products including mutual funds, are sold
to the public by investment management firms, broker/dealers, insurance
companies and banks in competition with the investment products offered by the
Company. Many of the Company's competitors apply substantial resources to
advertising and marketing their investment products which may adversely affect
the ability of the Company's investment products to attract new assets. The
Company expects that there will be increasing pressures among investment
advisors to obtain and hold market share.

PERSONNEL

         At February 28, 1999, the Company had approximately nine full-time
employees and shares three employees with affiliated companies. None of the
Company's personnel is covered by a collective bargaining agreement.
Management considers the Company's relationship with its employees to be good.

ITEM 2.  DESCRIPTION OF PROPERTY

         The principal executive offices of the Company are located at the World
Trade Center--Baltimore, 401 East Pratt Street, 28th Floor, Baltimore, Maryland
21202 where the Company shares approximately 10,000 square feet of office space
under a lease maintained by The Chapman Co. The Chapman Co.'s lease for these
premises expires in 2000. The Company is allocated furniture and equipment
leased by The Chapman Co. from an affiliated entity.

                                       8

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ITEM 3.  LEGAL PROCEEDINGS

         Many aspects of the Company's business involve substantial risks of
liability, including exposure under federal and state securities laws. The
Company maintains an errors and omissions insurance policy in the amount of $1
million insuring it against these risks.

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

None.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

RECENT SALES OF UNREGISTERED SECURITIES

         During the fiscal year ended December 31, 1998, the following
securities were issued by the Company without registration under the Securities
Act:

On January 8, 1998, the Company issued 1,989,235 shares of Common stock to The
Chapman Co. in exchange for all of the outstanding shares of capital stock of
Chapman Capital Management, Inc. This transaction was exempt from registration
under the Securities Act under Section 4(2) because it did not involve a public
offering. Such transaction was completed without an underwriter.

On April 30, 1998, the Company issued 497,308 shares of Common Stock to its
stockholders of record as of April 29, 1998 as a stock dividend. This
transaction was exempt from registration under the Securities Act under Section
4(2) because it did not involve a public offering. Such transaction was
completed without an underwriter.

PROCEEDS OF THE OFFERING

         On June 30, 1998, the Company's Registration Statement on Form SB-2
(File No. 333-51883) pertaining to its initial public offering of shares of the
Company's common stock, par value $0.001 (the "Offering") was declared
effective.

          During this reporting period the Company applied Offering proceeds 
in the amount of approximately $813,000 for the repayment of indebtedness to 
affiliates of the Company. The Company applied approximately $179,000 to the 
creation of new investment products, $230,000 to expand sales and marketing 
efforts; $134,000 to promote the DEM strategies, $813,000 for repayment of 
indebtedness to affiliates of the Company and $500,000 for working capital 
and general corporate purposes. The remaining Offering proceeds have been 
invested by the Company in The Chapman U.S. Treasury Money Fund, an 
affiliate, pending final application of such proceeds.

         The remainder of the information required by Item 5 is incorporated by
reference from the information set forth under the heading "Stockholder
Information" in the selected portions of the 1998 Annual Report filed as Exhibit
13.01 to this Form 10-KSB.

                                       9

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ITEM 5A. RISK FACTORS

         The words "believes," "intends," "anticipates," and "expects," and
similar expressions are intended to identify forward-looking statements. These
forward-looking statements are based on our current expectations and are subject
to a number of risks and uncertainties. In light of these risks and
uncertainties, many of which are described in detail in the risk factors set
forth below, actual results could differ materially from the forward-looking
statements contained in this document.

NET LOSS; RISK OF INABILITY TO MANAGE GROWTH

         We have experienced and expect to continue to experience significant
growth in our business activities and the number of our employees. This growth
requires increased investment in personnel, financial and management systems and
controls and facilities. In addition, we intend to add personnel to support the
increase in assets under management that we will seek in executing our
strategies. Unless we achieve revenue growth in line with our growth in
expenses, we will continue to incur operating losses. Furthermore, our inability
to manage such growth could have a material adverse effect on our continued
operations. During 1998, we had a net loss of $106,000.

         Further, as is common in the investment advisory business, we are, and
will continue to be, highly dependent on the effective and reliable operation of
our communications and information systems. Any difficulty in the operation of
existing systems, the implementation of new systems or the training of personnel
could adversely affect our ability to manage growth. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Year
2000 Software Issue."

DEPENDENCE ON KEY INVESTMENT MANAGEMENT CLIENTS

         All of our agreements with our advisory clients are terminable by the
client upon short notice (typically 30-60 days prior written notice). If the
DEM-MET Trust or any of our key investment management clients were to terminate
their advisory arrangements with us or if large investors of the DEM-MET Trust
were to withdraw their funds, our advisory fee revenue would be materially and
adversely affected.

         The DEM-MET Trust, with $265.5 million in assets under management,
represents approximately 42.8% of our assets under management as of February 28,
1999, 58.6% of our revenues in 1998 and 22.6% of our net advisory and
administrative fees in 1998 after deducting fees paid by the Company to
sub-advisers on behalf of the DEM-MET Trust. The largest of four investors in
the DEM-MET Trust represents approximately 30.2% of our assets under management
as of February 28, 1998. Excluding the DEM-MET Trust and its clients, the
Company's two largest clients represent 26.8% of the Company's assets under
management as of February 28, 1999 and 14.4% of the Company's revenues for 1998.

                                       10

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HIGHLY COMPETITIVE INDUSTRY

         The investment advisory business is extremely competitive. We encounter
intense competition in all aspects of the investment advisory business and
compete directly with other firms, a significant number of which have greater
capital, experience and other resources than ours. Competition also exists for
experienced personnel including technical personnel and account executives. In
addition to competition from firms currently in the investment advisory
business, recently there has been increasing competition from other sources,
such as commercial banks and insurance companies offering financial services.

UNPROVEN NATURE OF DEM AND DEM MULTI-MANAGER STRATEGIES

         We have implemented and intend to use substantial resources to promote
our DEM and DEM Multi-Manager strategies. The Domestic Emerging Markets, or DEM,
strategy seeks investment in domestic companies that meet the DEM Profile in
that they are controlled by African-Americans, Asian-Americans,
Hispanic-Americans and women. The DEM Multi-Manager strategy seeks investment
management clients who wish to allocate investment responsibility for their
assets among multiple investment managers that meet the DEM Profile. As of
February 28, 1999, we had approximately $119.1 million and $265.5 million in
assets under management using the DEM and DEM-Multi-Manager investment
strategies, respectively.

         The success of the DEM and DEM Multi-Manager strategies will be
dependent upon our ability to attract funds earmarked for investment in such
strategies on both an institutional and retail basis. The DEM strategy is
further dependent on our ability to identify appropriate investments from the
universe of DEM companies. Because the DEM and DEM Multi-Manager strategies are
in the initial stages of introduction, their market acceptance is unknown and
there can be no assurance that we will be able to attract significant amounts of
investment capital for management under such strategies. Moreover, our belief
that these strategies offer a significant opportunity for the growth of our
business is not based upon marketing studies, or demographic or feasibility
reports, but is based solely upon the judgment of our management team and our
experience to date from our limited marketing of DEM and DEM Multi-Manager
products. Further, we have and will continue to incur significant marketing,
legal and accounting expenses in the creation of new investment products. Such
expenses are ordinarily incurred significantly in advance of the introduction of
such products. If such products do not gain broad market acceptance, we would
likely lose such initial investments. Although, we have identified approximately
180 publicly-traded companies that meet the DEM Profile, there can be no
assurance that the investment portfolios of such companies will attract initial
or continued investment or that the companies meeting the DEM Profile will be
able to maintain continued growth.

DEPENDENCE ON KEY PERSONNEL; DUTIES TO OTHER COMPANIES

         For the foreseeable future, we will place substantial reliance upon the
personal efforts and abilities of Nathan A. Chapman, Jr., our President, who
will not devote his full time to our activities. The loss of the services of Mr.
Chapman may have a material adverse effect on our business, operations, revenue
and/or business prospects.

                                       11

<PAGE>


POTENTIAL ADVERSE EFFECTS OF CHANGES IN ECONOMY AND MARKET CONDITIONS

         The financial markets and businesses operating in the securities
industry are highly volatile and are directly affected by, among other factors,
domestic and foreign economic conditions and general trends in business and
finance, all of which are beyond our control. There can be no assurance that
broad market performance will be favorable in the future. Any decline in the
financial markets or a lack of sustained growth may result in a corresponding
decline in performance by our investment products and separate accounts, which
may adversely affect assets under management and/or fees. Our revenues from
investment management are directly related to fluctuations in the dollar amount
of assets under management.

RELATIONSHIPS WITH OTHER CHAPMAN ENTITIES AND POTENTIAL CONFLICTS OF INTEREST

         We act as investment advisor, pursuant to investment advisory
agreements, for two active registered investment portfolios, the DEM Equity
Fund, and The Chapman U.S. Treasury Money Fund, each an open-end portfolio of
The Chapman Funds, Inc. Our revenues in connection with these related-party
agreements accounted for 12.4% and 12.7% of our revenues in the years ended
December 31, 1997 and 1998, respectively. At our request, Nathan A. Chapman,
Jr., our President and Chairman of the Board; Earl U. Bravo, Sr., our Vice
President, Secretary and Assistant Treasurer; and M. Lynn Ballard, our Treasurer
and Assistant Secretary; serve as President and Chairman of the Board; Secretary
and Assistant Treasurer; and Treasurer and Assistant Secretary, respectively, of
The Chapman Funds, Inc. In addition, several of our key executives, including
Mr. Chapman, are also officers and/or directors of holding companies owning all
of the outstanding equity securities of The Chapman Co. and The Chapman
Insurance Agency Incorporated. The common management and/or ownership among the
Company and these other companies may involve potential conflicts of interest
with respect to the terms of business transactions, allocations of shared
expenses for overhead (including compensation of shared employees, lease
payments and other expenses) and the allocation of business opportunities
between us and such other companies. Further, because our key executives are
also senior executives of other companies, they will not be able to devote all
of their time to our business affairs. Although there is no written agreement,
we expect that Mr. Chapman will devote no less than 33% of his time to our
operations and entities that he serves at our request. All business transactions
and allocations of overhead between us and such other companies are approved by
a committee of the Board of Directors composed of independent, outside
directors. Furthermore, the compensation of our President will be approved by
the Compensation Committee of the Board of Directors, a majority of the members
of which are independent, outside directors.


                                       12

<PAGE>

EFFECT ON MARKET PRICE OF SHARES ELIGIBLE FOR FUTURE SALE/CONTROL BY 
PRINCIPAL STOCKHOLDER

         Nathan A. Chapman, Jr. directly holds 2,285,143 shares, or
approximately 68.1%, of the outstanding shares of Common Stock. All of such
shares are available for resale in the public market under Rule 144 promulgated
pursuant to the Securities Act. As of February 28, 1998, an additional 151,620
shares, or approximately 4.5% of the outstanding Common Stock, where held in
inventory by a subsidiary of an affiliate of the Company and Mr. Chapman, The
Chapman Co., in its capacity as market-maker for the Common Stock. All of the
shares held by The Chapman Co. are available for immediate resale. Sales of a
significant number of shares of Common Stock in the public market could have a
material adverse effect on the market price of the Common Stock. Further, due to
his share ownership, Mr. Chapman controls the outcome of all matters submitted
to our stockholders for approval, including the election of all of our
directors.

YEAR 2000 SOFTWARE ISSUE

         As the year 2000 approaches, an issue has emerged regarding how
existing application software programs and operating systems can accommodate
information that employs dates after December 31, 1999. We are working with our
software vendors to prepare our systems for the year 2000. Based on information
currently available, we do not anticipate that we will incur significant
operating expenses or be required to incur material costs to be year 2000
compliant. We are, however, still analyzing and modifying our systems and
requirements. In addition, we have relationships with third parties that have
computer systems that may not be year 2000 compliant. To the extent that their
systems are not fully year 2000 compliant, we can not be sure that potential
systems interruptions or the cost necessary to update software would not have a
material adverse effect on our business, financial condition, results of
operations, or business prospects. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Year 2000 Software Issue."

REGULATORY RISKS

         Our business, and the investment management industry generally, are
subject to regulation at both the federal and state levels. Pursuant to the
National Securities Markets Improvement Act of 1996, regulatory oversight of
investment advisors is divided between the Securities and Exchange Commission
and state regulatory authorities. Because our wholly-owned subsidiary, Chapman
Capital Management, Inc., or CCM, has assets under management in excess of $25
million, CCM is required to be registered with, and is subject to regulation by,
the Securities and Exchange Commission and, with the exception of state
anti-fraud regulations, CCM is generally exempt from registration and regulation
at the state level. These regulations are designed primarily for the protection
of our clients rather than our stockholders. Failure of CCM or its employees to
comply with any of the laws, rules or regulations of any state or federal
regulatory authority could result in a fine, injunction, suspension or expulsion
from the industry, which could have a material adverse impact upon us. Although
we have implemented procedures designed to achieve compliance with such laws,
rules and regulations, we cannot be sure that a failure to comply will not have
a material adverse effect upon us. Furthermore, amendments to existing statutes
and regulations or the adoption of new statutes and regulations could require us
to alter our methods of operation at costs which could be substantial.

NO DIVIDENDS

                                       13

<PAGE>

         To date, we have not paid any cash dividends on our Common Stock and do
not expect to declare or pay any cash dividends in the foreseeable future. We
intend to retain all earnings, if any, for the foreseeable future for our
continued growth.

                                       14


<PAGE>



ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         Information required by Item 6 is incorporated by reference from the
information set forth under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the selected portions of the
1998 Annual Report filed as Exhibit 13.01 to this Form 10-KSB.

ITEM 7.  FINANCIAL STATEMENTS

         Information required by Item 7 is incorporated by reference from the
information set forth under the heading "Financial Statements" in the selected
portions of the 1998 Annual Report filed as Exhibit 13.01 to this Form 10-KSB.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

         None.


                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; 
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         The information regarding directors and executive officers required by
Item 9 is incorporated by reference from the information set forth under the
heading "Proposal 1 - Election of Directors -- Directors and Executive Officers"
and "-- Section 16(a) Beneficial Ownership Reporting Compliance" in the
Company's definitive proxy statement for its annual meeting of stockholders to
be held on May 25, 1999.

ITEM 10. EXECUTIVE COMPENSATION

         The information required by Item 11 is incorporated by reference from
the information set forth under the heading "Executive Compensation" in the
Company's definitive proxy statement for its annual meeting of stockholders to
be held on May 25, 1999.

                                       15

<PAGE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by Item 11 is incorporated by reference from
the information set forth under the heading "Principal Stockholders" in the
Company's definitive proxy statement for its annual meeting of stockholders to
be held on May 25, 1999.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by Item 12 is incorporated by reference from
the information set forth under the heading "Certain Relationships and Related
Transactions" in the Company's definitive proxy statement for its annual meeting
of stockholders to be held on May 25, 1999.

ITEM 13. EXHIBITS LIST AND REPORTS ON FORM 8-K

(a)      Exhibits

The following exhibits are filed as part of this Registration Statement:

EXHIBIT
 NO.                                 DESCRIPTION

       1.1       Form of Underwriting Agreement between the Company and 
                 The Chapman Co. (1)

       1.2       Form of Qualified Independent Underwriter Agreement between
                 the Company and Ferris Baker Watts Incorporated (1)

       1.3       Form of Escrow Agreement between the Company and 
                 UMB Bank, N.A (1).

       3.1       Articles of Incorporation (2)

       3.2       Bylaws (3)

       4         Form of Common Stock Certificate (4)

      10.1       Advisory and Administrative Services Agreement between Chapman
                 Capital Management, Inc. and DEM Equity Fund dated 
                 October 28, 1997 (2)

      10.2       Advisory and Administrative Services Agreement between Chapman
                 Capital Management, Inc. and The Chapman Funds, Inc. dated 
                 April 30, 1997 (2)

                                       16

<PAGE>


      10.3       Advisory and Administrative Services Agreement between 
                 Chapman Capital Management, Inc. and DEM, Inc. dated 
                 November 30, 1995 (2)

      10.4       Chapman Capital Management Holdings, Inc. 1997 Omnibus 
                 Stock Plan (2)

      10.5       Advisory Agreement for Separate Account dated June 1, 1995 (1)

      10.6       Agreement & Declaration of Trust between Chapman Capital 
                 Management, Inc. and Bankers Trust Company dated 
                 September 1996 (2)

      10.7       Agreement between Bankers Trust Company and Chapman Capital 
                 Management, Inc. dated November 1, 1996 (2)

      10.8       Agreement between Bankers Trust Company and Chapman Capital 
                 Management, Inc. dated November 1, 1996, Tremont Partners, Inc.
                 and Stamberg Prestia, Ltd. (2)

      10.9       Agreement between the Company and Chapman Holdings, Inc. as to
                 Allocation of Shared Expenses dated as of June 19, 1998 (1)

      10.10      License Agreement between the Company. and Nathan A. 
                 Chapman, Jr. dated as of June 9, 1998 (1)

      10.11      Lock-up Agreement between the Company and Nathan A. 
                 Chapman, Jr. dated December 28, 1997 (1)

      10.12      $100,000 Promissory Note of Nathan A. Chapman, Jr. to the 
                 Company dated May 1, 1998 (4)

      10.13      $285,587 Promissory Note of Nathan A. Chapman, Jr. to the 
                 Company dated March 11, 1998 (4)

      13         Certain Information from Registrant's Annual Report to 
                 Stockholders for the year ended December 31, 1998 which is 
                 incorporated by reference in this Form 10-KSB (3)

      21         Subsidiaries of Company (2)

      23.1       Consent of Arthur Andersen, LLP (3)

      24         Power of Attorney (3)

                                       17

<PAGE>


      27         Financial Data Schedule (3)

--------------------
(1) Incorporated by reference to Pre-Effective Amendment 2 to the Company's
Registration Statement on Form SB-2 (File No. 333-51883) as filed with the
Securities and Exchange Commission on June 22, 1998.

(2) Incorporated by reference to the Company's Registration Statement on Form
SB-2 (File No. 333-51883) as filed with the Securities and Exchange Commission
on May 5, 1998.

(3) Filed herewith.

(4) Incorporated by reference to the Company's Quarterly Report on Form 10-QSB
for the quarter ended June 30, 1998, as filed with the Securities and Exchange
Commission.

(b) Reports on Form 8-K:

    The Company has filed no reports on Form 8-K during the fourth quarter
of fiscal year 1998.



                                       18

<PAGE>


                                   SIGNATURES

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

                                                     CHAPMAN CAPITAL MANAGEMENT
                                                     HOLDINGS, INC.



Dated:   March 30, 1999                     By:  /S/ NATHAN A. CHAPMAN, JR.     
                                                 -------------------------------
                                                     Nathan A. Chapman, Jr.
                                                     Chairman of the Board of 
                                                     Directors, and President

In accordance with the Exchange Act, this report is signed below by the
following persons on behalf of the Registrant in the capacities and on the dates
indicated.


SIGNATURES                      TITLE AND CAPACITY                DATE

/S/ NATHAN A. CHAPMAN, JR.      President and Chairman of the     March 30, 1999
--------------------------      Board (Principal Executive
Nathan A. Chapman, Jr.          Officer)

/S/ MARIA MARKHAM-THOMPSON      Chief Financial Officer           March 30, 1999
--------------------------      (Principal Financial Officer
Maria Markham-Thompson          and Principal Accounting
                                Officer)

The Entire Board of Directors

   Nathan A. Chapman, Jr.
   Theron Stokes
   Earl U. Bravo, Sr.
   Robert L. Wallace

/S/ NATHAN A. CHAPMAN, JR.                                        March 30, 1999
------------------------------
     Nathan A. Chapman, Jr.
     Attorney-in-Fact




                                       19

<PAGE>



                                  EXHIBIT INDEX


Exhibit                          Exhibit Description
No.

13.1           Certain information from Registrant's Annual Report to
               Stockholders for the year ended December 31, 1998 which is
               incorporated by reference in this Form 10-KSB

23.1           Consent of Arthur Andersen, LLP

24             Power of Attorney

27             Financial Data Schedule












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