U.S. Securities and Exchange Commission
                       Washington, D.C. 20549
-------------------------------------------------------------------------
                              FORM 10-KSB

[X]  Annual report under Section 13 or 14(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 2002.

[ ]  Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from 		to

                   Commission File Number: 000-27507
-------------------------------------------------------------------------


                           e-PERCEPTION, INC.
             (Name of Small Business Issuer in its Charter)

          Nevada                                        88-0350448
(State or other jurisdiction                          (I.R.S. Employer
of incorporation or organization)                      Identification No.)

           27555 Ynez Road, Suite 203, Temecula, California 92591
           ------------------------------------------------------
                    (Address of principal executive offices)

                            (909) 587-8773
                            ---------------
                      (Issuer's telephone number)

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

                      Common Stock, $.001 par value
                     -------------------------------
                            (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 [X]    No [  ]

   Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, 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. [X]

   Issuer's revenues for the year ended December 31, 2002 were
$2,421,865.

   The aggregate market value for the Issuer's voting stock held by
non-affiliates of the Issuer based upon the $0.53 per share closing
sale price of the Common Stock on March 19, 2003 as reported on the
Over-the-Counter Bulletin Board, was approximately $6,793,216.  Shares
of Common Stock held by each officer and director and by each person
who owns 5% or more of the outstanding common stock have been excluded
in that such persons may be deemed to be affiliates.  This
determination of affiliate status is not necessarily a conclusive
determination for other purposes.

   As of March 19, 2003, Registrant had 14,076,554 shares of Common
Stock outstanding.

   Transitional Small Business Disclosure Format (check one):
      Yes  [  ]   No  [X]

                                                                          1

<PAGE>


                           e-PERCEPTION, INC.
                       FORM 10-KSB ANNUAL REPORT

                           TABLE OF CONTENTS
                                                        Page
                     PART I


   ITEM 1   Description of Business                       3

   ITEM 2   Description of Properties                    10

   ITEM 3   Legal Proceedings                            10

   ITEM 4   Submission of Matters to a Vote
            of Security Holders                          10

                     PART II

   ITEM 5   Market for Common Equity and Related
            Shareholder Matters                          10

   ITEM 6   Management's Discussion and Analysis
            or Plan of Operation                         12

   ITEM 7   Consolidated Financial Statements        F1-F23

   ITEM 8   Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure       24


                     PART III

   ITEM 9   Directors, Executive Officers, Promoters
            and Control Persons: Compliance With Section
            16(a) of the Exchange Act                    24

   ITEM 10   Executive Compensation                      24

   ITEM 11   Security Ownership of Certain Beneficial
             Owners and Management and Related
             Stockholders                                24

   ITEM 12   Certain Relationships and Related Party
             Transactions                                24

   ITEM 13   Exhibits and Reports on Form 8-K            24

   ITEM 14   Controls and Procedures                     25


                                                                          2
<PAGE>


                               PART I

This annual report on Form 10-KSB contains certain forward-looking
statements within the meaning of Section 21E of the Securities and
Exchange Act of 1934, as amended, and is subject to the Safe Harbor
provisions created by that statute.  In this report, the words
"anticipates," "believes," "expects," "future", "interests,"
and similar expressions identify forward-looking statements.  Such
statements are subject to risks and uncertainties, including, but not
limited to, those discussed herein that could cause actual results to
differ materially from those projected.  You are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of the date hereof.  We undertake no obligation to publicly
release the result of any revisions to these forward-looking
statements that may be needed to reflect events or circumstances after
the date of this report or to reflect the occurrence of unanticipated
events.

Item 1.   Description of Business

Introduction

   e-Perception, Inc., a Nevada corporation (the "Company" or "e-
Perception" or "we" or "our") is the parent corporation of e-
Perception Technologies, Inc., a Delaware corporation ("e-Perception
Technologies"), which develops, markets and supports web services for
real-time Human Capital Management ("HCM").

   e-Perception, Inc., was incorporated in the State of Nevada on
August 29, 1995. From its incorporation in August 1995 until January
2002, the Company had no significant operations.

   On January 9, 2002, e-Perception Technologies, Inc. completed a
tender offer with Corporate Development Centers, Inc., a Nevada
corporation ("CDC") that traded its common stock on the Over-the-
Counter Bulletin Board.  In connection with the tender offer, the
stockholders of e-Perception Technologies received one (1) share of
CDC common stock for each four (4) shares of e-Perception Technologies
common stock they owned prior to the tender offer.  As a result, e-
Perception Technologies became a wholly owned subsidiary of CDC.  CDC
changed its name to e-Perception, Inc.  The Company is in the process
of changing its name to PeopleView, subject to shareholder approval.
The stock currently trades on the OTC Bulletin Board under the symbol,
"EPER.OB".

   The current business operations of e-Perception Technologies
constitutes all of the business operations of the Company.

   Where appropriate, references to "e-Perception", the
"Company," "we" or "our" include both e-Perception, Inc. and e-
Perception Technologies, Inc.

   Our executive offices are located at 27555 Ynez Road, Suite 203,
Temecula, California 92591.  Our Web site is located at www.e-
perception.com.

   e-Perception develops, markets and supports web based assessment
and reporting tools and provides consulting services that enable
companies to manage their Human Capital Management (HCM) needs in
real-time.  Companies ranging in size from 50 person firms to Fortune
500 companies implement our solutions in order to have deep insight
into their human capital assets.  The Company's mission is to help
corporations improve their financial results by aligning corporate
strategy with employee perception, productivity and performance.


General

   Our common stock is currently listed on the Over-the-Counter
Bulletin Board.


Principal Products or Services

                                                                          3
<PAGE>

   The company provides Human Capital Management ("HCM") solutions
to Fortune-1000 enterprises, mid-size companies, organization
development and human resource consultants and governmental
institutions. Our core competency is providing management with real-
time decision support tools and services to better manage human
capital in the organization. We accomplish this through a series of
highly configurable HCM hosted assessment tools as well as
professional services that are rapidly deployed as stand-alone, or
loosely linked modules. These assessment tools identify opportunities
for improvement in the organization, prioritize them, and embeds
management tool.  Furthermore, our Professional Services group
provides training and consulting to our customers in order for them to
derive a higher return on investment once their assessments are
complete. Our primary product suite, known as Actionable InsightsT,
includes our Employee Climate Assessment, Skills Inventory
Assessments, and 360 Multi-Rator Assessments.

   Our solutions represent a large step away from the traditional
monolithic integrated software applications. Because each module we
deploy has stand-alone value, implementation is a low risk, low cost
and minimally disruptive process. Our modules also share data with
each other, with existing systems, or can be rolled up into an
executive dashboard.

   We market our products primarily through our direct sales force
and strategic alliance partners to companies across a wide variety of
industries.   As of March 2003, we provided our products and solutions
to Dell Computer, Haliburton, Sharp HealthCare, StorageTek,
Northwestern Mutual and Electronic Data Systems, among others.


Competition

   The traditional paper-and-pencil survey companies such as
Performaworx, Real-Time 360, the Gallup Organization and Accenture
Consulting present the greatest present competition for e-Perception,
and will represent a growing source of competition as these firms
continue to develop their suites of online technologies.
Additionally, corporations that use the Internet for online data
acquisition are a growing source of competition. There are also a
group of companies that compete with e-Perception in the arena of
human performance assessment, and these companies include Watson Wyatt
and Exult.  We have also identified two competitors in the area of
skills inventory, which are Skillview and ITG.

   Each area of our business segments is highly competitive, and
there currently are only minor economic barriers to entry into any of
them. We face competition from many other companies offering employee
and customer surveys, assessments, and reviews, including the internal
HR department of corporations and many consulting based entities. Some
of our competitors have access to greater resources and capital than
are currently available to us.

   Based on our research, none of the online survey companies
existing today deliver online results in real time with the level of
analysis provided by the Company.  The normal time cycle to deliver
results includes tabulation, scoring, specific segmentation of data
based on focus group input, and then finally report generation.  This
process can take weeks, or even months to complete, and presents the
strong possibility that the survey information will be outdated or
stale upon delivery.  Management believes that e-Perception's
advantage over the competition lies in our ability to provide robust
analysis, on-line available as soon as the survey is launched.
Customers watch results accumulate and begin analysis of perceptions
and comments with the first response.

   Our analysis of our competitors' capabilities demonstrates a
strong move toward online surveys.  Although our research has found no
direct competitors currently, we anticipate that they will emerge.
The strength of e-Perception is that it can be first to market with
capabilities that have been developed over the last four years.

   In addition to browser-accessed Internet surveys, e-Perception
collects data from all traditional sources including pencil-and-paper,
telephone (if required), and bulk data upload.  Our products can
accommodate

                                                                          4
<PAGE>

virtually any version of any type of survey, and, in many
cases, we expect they will improve the methods of asking those
questions.



Intellectual Property

   Our future success depends in part on legal protection of our
technology. To protect our technology, we rely on a combination of the
following methods, among others: Copyright laws, trademark laws, trade
secret laws, and employee and third-party nondisclosure agreements and
confidentiality procedures.

   Our contracts with clients are designed to prohibit unauthorized
use, copying and disclosure of our software and technology. However,
these provisions may be unenforceable under the laws of some
jurisdictions and foreign countries. There are other factors that may
impact our ability to protect our intellectual property (See "Risk
Factors").  The Company has not applied for or been granted any
patents with respect to its technology.


Government Regulation

   We are subject to federal, state and local regulations concerning
the environment, occupational safety and health standards. We have not
experienced significant difficulty in complying with such regulations
and compliance has not had a material effect on our business or our
financial results.


Research and Development

   Our research and development organization is responsible for
product architecture, core technology, product testing and quality
assurance and ensuring the compatibility of our products with leading
hardware platforms, operating systems and database systems. In
addition, this organization supports some pre-sale and customer
support activities. Our professional services staff works with the
product development team to identify potential new product features.
In 2002, we incurred research and development expenses of $396,077. In
2001, we incurred research and development expenses of $201,755.


Employees

   As of March 14, 2003, we had sixteen (16) full-time employees.
Of these employees, two (2) were engaged in research and development,
five (5) were engaged in sales and marketing, seven (7) were engaged
in professional services/project management and two (2) were engaged
in finance and administration.  None of our employees are represented
by a labor union or a collective bargaining agreement. We have not
experienced any work stoppages and consider our relations with our
employees to be good.

Plan of Operations

THE E-PERCEPTION SOLUTION

   e-Perception's web-based assessment tools and professional
services are perfectly positioned to take advantage of the new
paradigm in HCM, being the real-time automation of HCM engagements.
The philosophy that drives e-Perception's product development is
grounded in automating and collapsing the time and effort required to
capture insights and information so that clients can manage critical
performance issues in real-time and in multiple languages.  In this
way, the technology is a tool that supports business and operating
decisions that affect employee loyalty, performance, productivity and
ultimately profitability.  e-Perception's technology differentiation
lies in its diagnostic assessment engine, which allows virtually
limitless segmentation of data and automatically presents Actionable
Insights? specific to a company, a business unit or an individual.
The Company's diagnostic engine supports planning, designing,
deploying, analyzing and delivering results to clients

                                                                          5
<PAGE>

by leveraging real-time access to business analytics.  The Company's delivery
methodology includes the development of possible scenarios, discussion
of potential outcomes, mapping gaps in performance to best practices
and next-steps to customize the configuration of business rules.  This
approach is intended to produce replicable solution delivery that
ensures customization to client needs, consistent quality in
deployment and high margins.

   e-Perception's suite of Insight Solutions(TM) integrates
information from employees, to build a composite view of the
enterprise and to focus management's energy on issues that drive
employee perception, performance and productivity.   The Company
provides tailored data models and reporting templates that address
critical issues, department-by-department, in specific vertical
markets.  These data models integrate quantitative operational data
with importance rankings that are fundamental to establishing the high
levels of confidence required to act confidently on business
information.  Insight Solutions? leverage the Company's expertise in
maximizing human performance with a sophisticated, yet user-friendly,
web-based assessment engine to equip management teams to pinpoint
challenges and opportunities within their corporations.

   -   Each module in the suite of Insight Solutions(TM)
delivers assessment results online with drill-down capability
into insights and corrective actions that are tailored to each
client company, its organization, its culture, its best practices
and its individual requirements.  The suite of Insight
Solutions(TM) includes cultural and employee surveys, pre-
employment profiling and employee profiling, skills inventories
and training assessments, and 360 Multi-Rator  performance
assessments.

   -   Scorecards integrate the insights generated by the
individual modules and combine them with key operational data to
give managers a complete, easy-to-understand view of their area's
performance.

   -   The Executive Dashboard incorporates Insight
Solutions(TM) data from throughout the organization, providing
corporate management with comprehensive, up-to-the-minute
assessments of overall corporate performance as it relates to the
areas of HCM such as retention, training, turn-over and strategic
goal alignment.

Customers that use e-Perception's suite of Insight Solutions(TM) receive
the following benefits:

   -  Better internal strategic alignment
   -  Increased workforce productivity
   -   Rapid process improvement
   -   Improved organizational deployment
   -   Increased customer satisfaction
   -   Decreased information technology costs.

e-Perception's partners receive the following benefits:

   -   Increased margin by utilizing fully integrated, automated
processes for web-based fulfillment.
   -   Decreased hours dedicated to supervision of Web-based assessment
projects and production of printed reports.
   -   Increased ability to work multiple simultaneous engagements due
to automation
   -   Decreased cost-of-sales.


Professional Services

   Our professional services organization plays an integral role in
delivering our solutions to our customers as well as supporting and
training them. We believe that providing high-level tailored
solutions, customer service and technical support is critical to the
satisfaction of our customers and our own success. As of March 31,
2003,

                                                                          6
<PAGE>

our professional services staff consisted of seven employees.
Our professional services offerings include:

   -   Consulting services. We offer industry-specific consulting
services focused on configuring and implementing solutions to
meet each of our customers' unique needs. These services are
delivered by our consulting specialists as well as through our
implementation partners. We believe that our consulting services
enhance implementation, improve the time to market and integrity
of the solution and share best practices with client project
teams.

   -   Facilitation services. We offer facilitation services to help
companies gather consensus on issues and project goals.  These
services are delivered by our facilitation specialists as well as
by our implementation partners. We believe that our facilitation
services increase consensus and focus the organization's energy
on specific economic value-added solutions.

   -   Training services. We offer extensive training programs to our
customers and partners to accelerate implementation and end user
adoption. Fees for our training services are typically charged
separately from our software use fees and consulting fees. We
outsource these training services.

   -   Customer support services. We provide our customers with
extensive support services including telephone support, Web-based
support and updates to our products and documentation.



E-PERCEPTION STRATEGY

   Our objective is to be the leading provider of web-based
assessment tools and services in the Human Capital Management Market
with a focus on providing real-time analysis of the workforce. Our go-
to-market strategy has the following major components:  sales, product
development through "purposefully opportunistic" customer
engagements, maximizing account penetration within existing customers,
public sector expansion and a marketing campaign.  This section will
discuss each of these components.

Sales

   A central piece of e-Perception's strategy is to increase market
penetration by expanding our sales capabilities. The Company's sales
strategy is based on three elements:  strategic alliances, direct
sales and private-label distribution.

Strategic Alliances

   We have developed a number of highly strategic relationships with
leading HR consultancies and referral partners that allow us to
leverage our sales presence.  We have formed strategic relationships
with Alignment Strategies, the Odyssey Group, BT.Novations,
Trendspotters, the Hay Group, the California Training Cooperative, and
Strategic Management Group, among others.  Each of these partners has
committed resources to training their consultants on our solutions,
engaging in co-marketing programs and incorporating our products into
their customer strategies.  In order to extend the reach of our
solutions, we have entered into referral agreements with key vendors.
These relationships allow us to leverage the sales professionals of
their corporations as well as extend our presence in new markets. We
currently have referral arrangements with SMG, Brendler Associates,
Mondo and other firms.

   The Company also is currently engaged in various stages of
discussions with major bellwethers in the HCM consulting space, and
major e-learning LMS vendors including Deloitte & Touche, Towers
Perrin, Watson Wyatt, Thinq Learning Solutions, The Interpersonal
Technology Group (ITG) and others.  There can be no assurance that we
will actually enter into contracted relationships with any of these
parties.

   e-Perception's strategic alliances are long-term account
relationships that provide significant revenue

                                                                          7
<PAGE>

opportunities for
specific products, developed to support the existing business of an
alliance partner. These partners are chosen for their industry
experience, market leadership, and ability to create revenue
opportunities for e-Perception.  Consulting partners provide a
referral channel that leverage extensive networks of professional
consultants and gain introductions to potential client accounts.  The
partner typically delivers performance management or training services
that can be enhanced by the addition of one or more standard e-
Perception products.  e-Perception enables these partners to decrease
their own investment in information technology, increase billable
hours and define measurable return on investment by adding assessments
to existing content and delivery.

   e-Perception's competitive advantage in this channel is our
unique diagnostic assessment engine that supports unattended delivery
of web-based assessments using automated setup and deployment.  It is
management's belief that the suite of e-Perception products offer a
level of integrated and comprehensive analysis that is scientific and
result-oriented and has predictive capabilities that is superior to e-
Perception's competitors who provide web-based assessments and those
who focus on discrete elements of business analytics or human
performance.  The Company believes that it has a sustainable
competitive advantage because its solutions and analyses are

replicable (as opposed to labor intensive) and therefore offer higher
profit margins for e-Perception.

Direct Sales

   The Company's direct sales team currently is comprised of three
people, located in Southern California.  The Company plans to expand
to a total of five direct sales people in 2003 in geographies where
Fortune 1000 enterprises are located, including the Chicago area, New
York, Texas and Washington DC.   e-Perception's direct sales channel
focuses on delivering enterprise-wide HCM solutions.  This channel
emphasizes a major account strategy designed to maximize penetration
throughout the client company.  Sales consist of multi-year rollouts,
including assessments, skills inventories and Executive Summaries, and
Dashboards deployed across multiple corporations or product lines.
The Company's sales executives have proven business acumen and track
records in selling strategic solutions to major enterprises. We
typically approach both senior HR and Training executives within these
corporations. Initial sales activities typically include a
demonstration of our product capabilities followed by one or more
detailed technical reviews.  e-Perception's competitive advantage in
this channel is its unique value proposition of converting disparate
data sources into business intelligence that is communicated
throughout the customer's organization, globally, in terms relevant to
business needs.  The Company believes that it has a sustainable
competitive advantage because its solutions and analyses are very
scalable and replicable.

Private Label

   The Company will also target firms seeking to deploy branded,
web-based content using on-line assessments.  These firms include
training and leadership development firms, especially those
specializing in organization development and e-learning.   e-
Perception's competitive advantage in this channel is its' unique web-
based engine that supports personalization and unattended delivery of
web-based content using automated setup and deployment.  Unlike its
competitors who primarily process and distribute paper-based content
and results, the e-Perception engine provides automated
personalization and web-based delivery.

   For example, TEC International is a professional development and
leadership training firm with 8,000 current and 8,000 alumni corporate
clients.  The Company is currently negotiating a transaction with TEC
under which e-Perception would provide its survey tool on a private
label basis to all of TEC's current and former corporate clients in
exchange for an annual subscription fee.  Specifically, the Company
would make available employee climate, employee satisfaction and
customer satisfaction surveys for use by TEC's member firms.  There
can be no assurance that the Company will actually enter into a
transaction with TEC.


Product Development Funded by "Purposefully Opportunistic" Customer
Engagements

   We intend to extend our leadership in the market for HCM
solutions by continuing to develop the depth and breadth of our
product line.  In many cases, this development occurs as a by-product
of a client engagement.

                                                                          8
<PAGE>

Our clients retain the Company to analyze a
specific issue, and the Company develops an issue-specific feature to
complete the engagement.  The Company is paid extra for this
"customized" enhancement, which may then become part of the standard

product offering.  e-Perception also will continue to invest in
research and development. We intend to leverage the extensibility of
our existing system to design and implement new features that increase
the range of problems we can solve for our customers.

Maximizing Account Penetration Within Existing Customers

   The Company has several tools in the suite of Insight
Solutions?: Employee Climate Surveys, 360-degree employee performance
reviews, and Skills Inventory/Assessments, and other customized
modules relating to HCM issues.  Each of these solutions is designed
to integrate perceptions and data that are specific to a single
business issue.  However, each solution stores results into a common
framework for data analysis. The data from each additional project
delivers a more complete picture of a company's business, thus
increasing the economic value delivered from each project.  The
Company is finding that once it delivers a survey to a client in one
area, the client often calls upon e-Perception to perform a different
assessment within the organization.  For example, in the case of
StorageTek, the Company was initially asked to perform an
organizational climate assessment.  Since this initial engagement,
StorageTek has requested a 360-degree employee performance assessment,
a performance management project, and a skills inventory and
assessment project.  We now have four solutions that are being
employed enterprise-wide within StorageTek.

Public Sector Expansion

   The most recent addition to the company's strategy involves the
sale of Management, Organization and Business Improvement Services
(MOBIS) under the GSA Federal Supply Service. GSA provides and
contracts for billions of dollars worth of products and services for
federal agencies.  Through this program, the existing Company services
are leveraged through this channel as they become available through an
online catalog to public sector agencies.  The services offered by the
Company through this program include consulting, facilitation, survey
services and training.  The Company has identified a major opportunity
with the Federal Government for its Skills Inventory tools and
services.  The company is currently negotiating with the Office of
Naval Intelligence (ONI) for a major Skills Inventory engagement.
According to our contact at ONI, the entire Federal Government has a
White House mandate to report on skills gaps due to the pending
retirement of 40% of the Federal workforce.  The Company plans to
invest major effort in exploring these opportunities.

Marketing

   The Company has an aggressive segmented marketing campaign
planned for 2003 that is focused on sales lead generation and includes
the following tactical activities:

     -   Trade show exhibits
     -   Speaking engagements at industry events
     -   Advertising in major HR publications
     -   Web seminars
     -   Web advertising
     -   Sponsorship activity
     -   Direct mail campaign

   Our Marketing efforts will be focused as follows:  (1) The Global
2000, (2) regional bellwether firms and state and municipal
institutions, and (3) normal mid-sized firms who express interest
through our lead generation efforts.  We will primarily focus on the
HR and Learning/Training titles within these organizations but branch
our marketing to go after Government Executives and other Line
Management titles within corporations.

RELATIONSHIPS AND ALLIANCES

   An important element of our sales plan is to establish
relationships and alliances to assist us in marketing,

                                                                          9
<PAGE>

 selling and
developing our analytic solutions. This approach is intended to
increase the number of personnel available to perform application
design and development services for our customers and provide
additional sales, marketing and customer support expertise in selected
vertical industry segments.

   As discussed above in the "e-Perception Strategy" section, we
are currently negotiating or have formed strategic relationships with
OD and training industry experts to enable the rapid adoption and
deployment of our solutions and expand them into new vertical markets.
We currently are negotiating or have formed strategic relationships
with BT.Novations, the Hay Group, Trendspotters, the California
Training Cooperative (and list from previous section) and Strategic
Management Group.  Each of these partners has committed resources to
training their consultants on our software, co-marketing programs and
incorporating our products into their customer strategies.

   In order to extend the reach of our solutions, we have entered
into partnership and referral agreements with key vendors. These
relationships allow us to leverage the sales professionals of their
corporations as well as extend our presence in new markets. We
currently have referral arrangements with The Odyssey Group, Alignment
Strategies, SMG and Brendler Associates, among others.  Each of these
referral partners has committed resources to training their employees,
co-marketing programs and incorporating our products into their
customer relationship management strategies.


Item 2.   Description of Properties

   We currently lease approximately 6,240 square feet of office
space in one building located in Temecula, California.  The lease
terminates on May 31, 2004 and grants the Company the option to renew
the lease for an additional three-year term.  We also sublease
approximately 2,500 square feet of office space in Newport Beach,
California, which serves as the Company's sales and marketing office.
This sublease has a six-month term.  The sublease, which terminates
July 31, 2003, grants the Company the right to extend the term for an
additional six-month period.  We may need to locate additional space
to meet our needs in the future.


Item 3.   Legal Proceedings

   From time to time, we may become involved in litigation relating
to claims arising from our ordinary course of business. We are aware
of no claims or actions pending or threatened against us, the ultimate
disposition of which would have a material adverse effect on us.



Item 4.   Submission of Matters to a Vote of
Security Holders

   In January 2002, the Company submitted for vote by the shareholders
a change in name from CDC to e-Perception, Inc.



                                                                         10
<PAGE>

                              PART II

Item 5.   Market for Registrant's Common Equity and Related
Shareholder Matters

   The Company's common stock currently trades on the Over-the-
Counter Bulletin Board, under the trading symbol of "EPER.OB". The
Company had lost its trading symbol in or about September 1999.  The
Company was re-listed on the Over-the-Counter Bulletin Board on
November 29, 2001.  In January 2002, the Company changed its stock
symbol to "EPER.OB".  Because we are listed on the Over-the-Counter
Bulletin Board, our securities may be less liquid, receive less
coverage by security analysts and news media, and generate lower
prices than might otherwise be obtained if they were listed on a
NASDAQ market or other exchange.

     The following table sets forth for each quarter during fiscal years
     2002 and 2001 the high and low bid quotations for the Common Stock
     as reported by NASDAQ.

    Quarter                                           Low      High
January 1, 2001-March 31, 2001----------------------  $-        $-
April 1, 2001-June 30, 2001-------------------------  $-        $-
July 1, 2001-September 30, 2001---------------------  $-        $-
October 1, 2001-December 31, 2001------------------- $ 2.00   $ 3.30
January 1, 2002-March 31, 2002---------------------- $ 3.25   $ 4.00
April 1, 2002-June 30, 2002------------------------- $ 2.80   $ 3.80
July 1, 2002-September 30, 2002--------------------- $ 2.30   $ 3.25
October 1, 2002-December 31, 2002------------------- $ 2.00   $ 3.25

   On March 14, 2003, the Company had approximately 130 stockholders
of record.

   To date, no dividends have been declared or paid on any capital
stock of the Company, and the Company does not anticipate paying any
dividends in the foreseeable future.


Equity Compensation Plan Information

   The following table provides certain information as of December
31, 2002 with respect to the Company's equity compensation plans under
which equity securities of the Company are authorized for issuance.

                              Number of         Weighted       Number of
                              securities        average        securities
                              to be issued      exercise       remaining
                              upon exercise     price of       available
                              of outstanding    outstanding    for future
                              options,          options,       issuances
                              warrants and      warrants and   under plan
            Plan              rights            rights
           ------             ---------------   -------------  -----------
Equity compensation plans
approved by security
holders(1):                        1,536,500           $1.03       363,500

Equity compensation plans
not approved by security
holders(2):                          434,666           $0.55             0

Total:                             1,971,166                       363,500


   (1)   These plans consist of the 2000 Stock Option Plan, and the
         2001 Stock Option Plan.
   (2)   Warrants and rights.


   The Company completed a private placement of its common stock on
January 15, 2003. As of December 31, 2002, the company sold 988,163
shares of common stock (as of January 15, 2003, the closing of the
offering, the Company sold a total of 1,028,163 shares of common stock
in this offering) at a purchase price of $1.00 per share.  The Company
decided to re-price the shares sold in this offering because of the
Company's inability to meet the revenue projections described to
investors in the offering.  The Company re-priced the common stock
sold in the offering to $0.25 per share (the "Re-pricing").  The
Company gave each purchaser the election to

                                                                         11
<PAGE>

either rescind his
investment, or accept four shares of common stock for each share
purchased in the offering.  Four investors elected to rescind their
investment, totaling $68,000. After the re-pricing, and after the
rescission, as of December 31, 2002, $920,163 had been collected,
resulting in 3,680,652 shares sold.

   San Clemente Capital, LLC ("SCC"), an affiliate of two of the
Company's shareholders (one who is a past and one who is a current
director), has provided the Company with a revolving loan commitment
of up to $400,000 based on eligible collateral levels.  The loan was
secured by certain assets of the Company.  As of December 30, 2002,
the outstanding balance on such loan (including unpaid interest which
accrued at the rate of 20% per annum) was approximately $417,000.  The
loan was originally due and payable in full on June 30, 2002, but SCC
agreed to extend the maturity date until December 31, 2002.  Pursuant
to the terms of the loan, the Company is required to pay a monthly fee
of $1,000 to SCC for its services as administrative agent with respect
to the loan.   On December 30, 2002, SCC agreed to convert all amounts
outstanding under this loan to equity in the Company.  For each dollar
of indebtedness discharged by SCC, SCC received one unit (each, a
"Unit") consisting of four-shares of the Company's common stock and
the option to convert these shares into an equivalent number of preferred
shares
once the Company has completed the filing of its Amended and Restated
Articles of Incorporation authorizing the issuance of such preferred
stock.   The preferred stock will have an annual coupon of 10%, and
will be convertible into an equivalent number of the Company's common
stock at the holder's discretion, and contains certain liquidation and
anti-dilution protections.


   On April 29, 2002, Avintaquin Capital, LLC ("Avintaquin"), an
affiliate of three of the Company's shareholders (one of whom is a
director and one of whom is a former director), provided the Company
with a bridge loan of $60,000, which matures on April 29, 2003, and
which was initiated in anticipation of the closing of a private
placement of the Company's common stock.  The bridge loan has an
interest rate of 12% per annum and is secured by a first-priority lien
on the Company's assets.  As additional consideration for the bridge
loan, Avintaquin received a warrant to purchase 60,000 shares at a

purchase price equal to 80% of the price per share of the common stock
sold in the Company's next round of financing.  The warrant is
exercisable for three years from the date of issuance.  On December
30, 2002, Avintaquin agreed to convert $10,000 of indebtedness under
this loan in exchange for 10,000 Units, on the terms and conditions
described above.



   As of December 30, 2002, the Company owed Eric Richardson $65,000
in connection with various legal and advisory services he provided for
the Company.  On December 30, 2002, Mr. Richardson agreed to
extinguish this obligation in exchange for 65,000 Units, on the terms
and conditions described above.

   Avintaquin served as a member of the selling group in connection
with the private placement of the Company's common stock that
terminated on January 15, 2003.    Based upon the number of shares
issued in this offering upon the effectiveness of the re-pricing,
Avintaquin received 199,264 warrants in connection with the placement
of 1,992,640 shares of the Company's common stock.  The warrants have
an exercise price equal to 110% of the 5-day trailing average of the
public market price of the Company's stock following the final closing


of the offering, subject to adjustment, and have a term of three
years.  In addition, Avintaquin agreed to accept 199,264 shares of the
Company's common stock in connection with this offering in lieu of a
cash placement fee of $49,816.


                                                                         12
<PAGE>


Item 6.   Management's Discussion and Analysis of Financial Condition
and Results of Operations

   In addition to historical information, the statements set forth
below include forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  These forward-looking statements include
statements regarding potential strategic collaborations, future
capital needs and funding requirements, product development plans, and
market assessments.  These statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements.  These risks and
uncertainties include:

   -   General economic and business conditions;
   -   Industry trends;
   -   Our overall market penetration and competition from providers of
       alternative products and services;
   -   Our actual funding requirements; and
   -   Availability, terms and deployment of capital.


   OVERVIEW


   e-Perception develops, markets and supports web based assessment
and reporting tools and provides consulting services that enable
companies to manage their Human Capital Management (HCM) needs in
real-time.  Companies ranging in size from 50 person firms to Fortune
500 companies implement our solutions in order to have deep insight
into their human capital assets.  The Company's mission is to help
corporations improve their financial results through by aligning
corporate strategy with employee perception, productivity, and
performance.

   As the pace of globalization and business complexity increases,
rapid data gathering and real-time analysis have become a competitive
necessity for corporations.  The Company's web-based assessment tools
gather feedback from employees, customers and suppliers and then
integrate such data with existing business information to produce
strategic solutions for clients.  The Company's offerings consist of a
suite of web-based assessment tools focused on three key products:
Employee Climate Assessments, Skills Inventory Assessments and 360
Multi-Rator Performance Reviews.  Each one of these assessments can be
provided as stand-alone modules or integrated into an entire suite of
solutions.  Furthermore, our tools can be customized to fit any
Organization Development ("OD") methodology in the market, in order
to take advantage of private label opportunities with established OD
consultants.  In addition to the web-based tools, e-Perception has the
ability to provide ongoing training and consulting to our customers
through our on-staff OD specialists and through partnership
arrangements with OD-focused consulting firms.

   Using online assessments and professional consulting, e-
Perception Insight Solutions? provides information and insights that
empower management to maximize organizational effectiveness, employee
performance and workforce productivity, resulting in cost savings,
high rates of retention, employee satisfaction and ultimately customer
satisfaction.  We market our products through three channels; our
geographically dispersed direct sales force, strategic alliance
partners and value-added resellers.



Application of Critical Accounting Policies

   Our discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which
have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these
financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities.
On an on-going basis, we evaluate these estimates, including those
related to customer programs and incentives, product returns, bad
debts, inventories, investments, intangible assets, income

                                                                          13
<PAGE>

taxes,
warranty obligations, contingencies and litigation. We base our
estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

   We consider the following accounting policies to be both those
most important to the portrayal of our financial condition and those
that require the most subjective judgment:

   -   Revenue recognition
   -   Inventory valuation and related reserves
   -   Accounting for income taxes

See disclosures in Note 1 of the financial statements for the
Company's accounting policies and procedures.


RESULTS OF OPERATIONS

For the Fiscal Year ended December 31, 2002

Net Revenue

   Net revenue increased $1,077,785 or 80 percent, to $2,421,865 for
the fiscal year ended December 31, 2002, as compared to the same
period in 2001.  This increase was primarily due to the expansion of
the Company's internal sales force and the development and completion
by the Company of new product applications.


Cost of Revenue

   Cost of revenue consists of referral fees paid to third parties,
operations overhead (including launching and deploying assessment
surveys), outsourced trainers and outsourced software development.
Cost of revenue increased by $262,755 to $966,180, or 40 percent of
sales for the fiscal year ended December 31, 2002, as compared to

$703,425, or 52 percent of sales in the same period in 2001.  This
increase was primarily due to increased staffing in the operations
department and an increase in outsourced services.


Research and Development

   Research and development expenses consist of personnel expenses
and associated overhead. The Company's investment in research and
development increased $194,322 to $396,077, or 16 percent of sales for
the fiscal year ended December 31, 2002, as compared to $201,755, or
15 percent of sales in the same period in 2001.  The increase was
primarily attributable to staffing increases and product development.

   Costs incurred in the research and development of new software
products are expensed as incurred. e-Perception expects research and
development expenses to continue to increase in absolute dollars as
the Company continues to invest in the enhancement of existing
products and the development of new products.


Sales and Marketing

   Sales and marketing expenses include salaries and expenses of
sales and marketing personnel, advertising and promotion expenses,
travel and entertainment, and other selling and marketing costs. Sales
and marketing expenses decreased by $195,661 to $1,174,892, or 48
percent of sales for the fiscal year ended December 31, 2002, as
compared to $1,370,553, or 102 percent of sales in the same period in
2001. This decrease was primarily due to a decrease is sales staff
that had been hired at the beginning of the year.


                                                                          14
<PAGE>

General and Administrative

   General and administrative expenses, which include personnel
costs for finance, administration, information systems, and general
management, as well as facilities expenses, professional fees, legal
expenses, and other administrative costs, decreased by $159,093 to
$1,597,668 or 66 percent of sales for the fiscal year ended December
31, 2002, as compared to $1,756,761 or 131 percent of sales in the
same period in 2001.  The decrease was primarily due to a decrease in
staffing related to the reduction in force of July 15, 2002.


Other Income (Expense)

   Other income and expense includes interest income net of interest
expense. Interest income is primarily derived from short-term
interest-bearing securities and money market accounts.  Interest
expense for the fiscal year ended December 31, 2002 was $85,706
compared to $20,293 for the same period in 2001, primarily due to
borrowings during the year.  Interest income for the fiscal year ended
December 31, 2002 was $652 compared to $15,538 for the same period in
2001, primarily due to a decrease in the average balance of invested
cash and short-term investments.


Cost of Rescission

   The Company decided to reprice the shares sold in the June 2002
Private Placement offering because of the Company's inability to meet
the revenue projections described to investors in the offering.  The
Company re-priced the common stock sold in the offering to $0.25 per
share (the "Re-pricing").  The Company gave each purchaser the
election to either rescind his investment, or accept four shares of
common stock for each share purchased in the offering.



Loss from Operations

   During the fiscal year ended December 31, 2002, we sustained a
net loss in the amount of $2,490,290.  A portion of that loss, in the
amount of $690,122, was due to the cost of repricing the shares sold
in the private placement and is shown separately in the statement of
operations.


Liquidity and Capital Resources

   At December 31, 2002, our cash and cash equivalents and short-
term investments were equal to $320,364.  The Company's principal cash
requirements are for operating expenses, including employee costs,
funding of accounts receivable, capital expenditures and funding of
the operations. The Company's primary sources of cash had been from
private placements of the Company's common stock and a revolving line
of credit.

   During the fiscal year ended December 31, 2002, the Company used
$1,227,585 for operating activities, as compared to $2,330,280 for the
same period in 2001.  The decrease in cash use was primarily due to an
overall decrease in expenses, and a decrease in accounts receivable.

   San Clemente Capital, LLC, an affiliate of two of the Company's
shareholders who are former directors, had provided the Company with a
revolving loan commitment of up to $400,000 based on eligible
collateral levels.  The loan was secured by certain assets of the
Company.  On December 31, 2002, the outstanding balance on such loan
of $417,031 was converted into Common Stock. The revolving loan
commitment is no longer available.

   On April 29, 2002, Avintaquin Capital, LLC, ("Avintaquin"), an
affiliate of three of the Company's shareholders, provided the Company
with a bridge loan in the original principal amount of $60,000. The
bridge loan is secured by certain assets of the Company. The bridge
loan bears interest at a rate of 12% per annum. On June 29, 2002,
Avintaquin and the Company entered into an amendment to the bridge
loan and extended the

                                                                          15
<PAGE>

maturity date of the loan until April 29, 2003.
In connection with this amendment, and, as additional consideration
for extending the bridge loan, the Company issued a warrant to
Avintaquin for the purchase of 60,000 shares on the Company's common
stock at an exercise price of $1.60 per share.  This warrant has a
term of four years.  On December 31, 2002, the Company converted
$10,000 of the principal balance outstanding to common stock of the
Company.  As of December 31, 2002, the outstanding balance on the
bridge loan was $54,971 including principal and interest.

   The Company completed a private placement of its common stock on
January 15, 2003. As of December 31, 2002, the company sold 988,163
shares of common stock (as of January 15, 2003, the closing of the
offering, the Company sold a total of 1,028,163 shares of common stock
in this offering) at a purchase price of $1.00 per share.  The Company
decided to re-price the shares sold in this offering
because of the Company's inability to meet the revenue projections
described to investors in the offering.  The Company re-priced the
common stock sold in the offering to $0.25 per share (the "Re-
pricing").  The Company gave each purchaser the election to either
rescind his investment, or accept four shares of common stock for each
share purchased in the offering.  Four investors elected to rescind
their investment, totaling $68,000. After the re-pricing, and after
the rescission, as of December 31, 2002, $920,163 had been collected,
resulting in 3,680,652 shares sold.

   At December 31, 2002, we had cash and cash equivalents totaling
$320,364.  This cash position is sufficient to sustain the business
operations of the Company for approximately three months.  We expect
that we will need an additional $1,200,000 in equity capital in order
to sustain the business operations of the Company over the next 12
months.

    Given the lack of the Company's current cash position, such
external sources of financing will be critical to the Company's future
operations.  Our need for such additional financing depends in part on
our future performance, which, in turn, is subject to general economic
conditions, and business and other factors beyond our control. There
can be no assurance that we would be able to obtain such financing, or
that any financing would result in a level of net proceeds required.



FACTORS THAT MAY AFFECT FUTURE RESULTS

   Certain statements contained in this Annual Report on Form 10-
KSB, including, without limitation, statements containing the words
"believes," "anticipates," "estimates," "intends," "expects" and words
of similar import, constitute forward-looking statements within the
meaning of the Private Securities Reform Act of 1995. Actual results
could vary materially from those expressed in those statements. If any
of the following risks actually occurs, our business, financial
condition or operating results could be materially adversely affected.
The risks set forth below are not the only risks facing us.
Additional risks and uncertainties not presently known to us, or that
we currently see as immaterial, may also harm our business.

WE ARE A NEW COMPANY WITH UNDER THREE YEARS OF OPERATING HISTORY

   Our business was incorporated in March 2000, and we have commenced
operations and introduced products and services, yielding a total of
$1.344 million in revenues through December 31, 2001, and $2.296
million for the fiscal year ended December 31, 2002.  Because we have
had only a limited operating history on which to base an evaluation of
our business and prospects, any investment decision must be considered
in light of the risks and uncertainties encountered by companies in
the early stages of development. Such risks and uncertainties are
frequently more severe for those companies operating in new and
rapidly evolving markets.

   Some of the factors upon which our success will depend include (but
are not limited to) the following:

   -   The rate and timing, if at all, of the additional growth and
use of Internet-based survey and assessment tools.

                                                                          16
<PAGE>

   -   The rate and timing, if at all, at which existing survey
providers will migrate their existing products to the
Internet.

   -   The existence of a demand for Internet-based survey and
assessment tools.

   -   The emergence of competitors in our target market, and the
quality and development of their products and services.

   -   The market's acceptance of our products and services.

In order to address these risks, we must (among other things) be
able to:

   -   Successfully complete the development of our products.

   -   Modify our products as necessary to meet the demands of our
market.

   -   Continue our efforts to develop our core products.

   -   Attract and retain highly skilled employees.

   -   Respond to competitive influences.

On an ongoing basis, we cannot be certain that we will be able to
successfully address any of these risks.

WE FACE SUBSTANTIAL COMPETITION FROM BETTER ESTABLISHED COMPANIES THAT
MAY HAVE SIGNIFICANTLY GREATER RESOURCES WHICH COULD LEAD TO REDUCED
SALES OF OUR PRODUCTS.

   The market for our products is competitive and is likely to become
even more competitive in the future.  Increased competition could
result in pricing pressures, reduced sales, reduced margins or the
failure of our products to achieve or maintain market acceptance, any
of which would have a material adverse effect on our business, results
of operations and financial condition.  Many of our current and
potential competitors enjoy substantial competitive advantages, such
as:

   -   Greater name recognition and larger marketing budgets and
resources.

   -   Established marketing relationships and access to larger
customer bases.

   -   Substantially greater financial, technical and other
resources.

   -   Larger technical and support staffs.

   As a result, they may be able to respond more quickly than we can to
new or changing opportunities, technologies, standards or customer
requirements.  For all of the foregoing reasons, we may not be able to
compete successfully against our current and future competitors.

THE COMPANY HAS A HISTORY OF LOSSES AND MAY NEED ADDITIONAL FINANCING
TO CONTINUE ITS OPERATIONS, AND SUCH FINANCING MAY NOT BE AVAILABLE
UPON FAVORABLE TERMS, IF AT ALL.

   The Company experienced a net operating loss of approximately
$2.699 million for the fiscal year ended December 31, 2001, and a net
operating loss of approximately $2.490 million for the fiscal year
ended December 31, 2002.  There can be no assurances that the Company
will be able to operate profitably in the future. In the event that
the Company is not successful in implementing its business plan, the
Company will require additional financing in order to succeed.  There
can be no assurance that additional financing will be available now or
in the

                                                                         17
<PAGE>

future on terms that are acceptable to the Company. If adequate
funds are not available or are not available on acceptable terms, the
Company may be unable to develop or enhance its products and services,
take advantage of future opportunities or respond to competitive
pressures, all of which could have a material adverse effect on the
Company's business, financial condition or operating results.

OUR FINANCIAL PROJECTIONS ARE INHERENTLY UNCERTAIN.

   We prepared the projections contained in this Memorandum in good
faith based upon assumptions that we believe to be reasonable.
However, we cannot guarantee we will attain the projections or that
the assumptions on which they are based are reliable.  The projections
are subject to the uncertainties inherent in predicting the results of
operations for the future fiscal periods.  Certain assumptions that we
used will inevitably not materialize and unanticipated events will
occur.  Therefore, the actual results of operations are likely to vary
from our projections, and the variations may be material and adverse.
Our historical financial information is also of limited value in
projecting our future operating results because of our limited
operating history and the emerging nature of our market.  Accordingly,
you should not rely on the financial projections contained in this
Memorandum in making your investment decision.

WE ARE DEPENDENT ON OUR MANAGEMENT TEAM AND THE UNEXPECTED LOSS OF ANY
KEY MEMBER OF THIS TEAM MAY PREVENT US FROM IMPLEMENTING OUR BUSINESS
PLAN IN A TIMELY MANNER OR AT ALL.

   In December 2002, we changed our management team.  We hired many
of our key employees in January of 2003, including our Chief Executive
Officer and our Chief Financial Officer.  Our future success depends
on the successful integration of the members of this management team
and their ability to work together effectively.   If our management
team fails to work together effectively, our business could be harmed.

   Our success depends largely upon the continued services of our
executive officers and other key management and development personnel.
We are also substantially dependent on the continued service of our
existing technology personnel because of the complexity of our
products and technologies.  The loss of one or more of our key
employees could seriously harm our business, financial condition and
results of operations.  We cannot assure you that in such an event we
would be able to recruit personnel to replace these individuals in a
timely manner and on acceptable terms.

EVOLVING REGULATION OF THE INTERNET MAY AFFECT US ADVERSELY.

   As the Internet continues to evolve, increasing regulation by
federal, state or foreign agencies becomes more likely.  Such
regulation is likely in the areas of user privacy, pricing, content
and quality of products and services.  Taxation of Internet use or
other charges imposed by government agencies or by private
organizations for accessing the Internet may also be imposed.  Laws
and regulations applying to the solicitation, collection or processing
of personal or consumer information could affect our activities.
Furthermore, any regulation imposing fees for Internet use could
result in a decline in the use of the Internet and the viability of
Internet commerce, which could have a material adverse effect on our
business, results of operations and financial condition.

THE SUCCESS OF OUR BUSINESS DEPENDS ON THE CONTINUED GROWTH AND
ACCEPTANCE OF THE INTERNET AS A BUSINESS TOOL.

   Continued expansion in the sales of our products depends on the
adoption of the Internet as a widely used channel for corporate
information, products and services.  This business model is not yet
proven and may not be successful.  The Internet may not prove to be a
viable commercial medium due to inadequate development of the
necessary infrastructure, such as a reliable network backbone, or
timely development of complementary products, such as high-speed
modems.  Additionally, the Internet could lose its viability due to
delays in the development or adoption of new standards and protocols
to handle increased levels of Internet activity, security,
reliability, cost, ease of use, accessibility, and quality of service.
If the Internet does not continue to become a widespread

                                                                         18
<PAGE>

communications medium and commercial marketplace, the demand for our
products could be significantly reduced, which could have a material
adverse effect on our business, results of operations, and financial
condition.

OUR SYSTEMS MAY BE VULNERABLE TO SECURITY RISKS OR SERVICE DISRUPTIONS
THAT COULD HARM OUR BUSINESS.

   Our system servers are vulnerable to physical or electronic
break-ins and service disruptions, which could lead to interruptions,
delays, loss of data or the inability to process customer requests.
Such events could be very expensive to remedy and could damage our
reputation, discouraging existing and potential customers from using
our products.  Although in the past we have not experienced attempts
at physical or electronic break-ins, we may experience break-ins in
the future.  Any such events could substantially harm our business,
financial condition and results of operations.

WE MAY NOT BE ABLE TO DEVELOP ACCEPTABLE NEW PRODUCTS OR ENHANCEMENTS
TO OUR EXISTING PRODUCTS AT A RATE REQUIRED BY OUR RAPIDLY CHANGING
MARKET.

   Our future success depends on our ability to develop new products
or enhancements to our existing products that keep pace with rapid
technological developments and that address the changing needs of our
customers.  Although our products are designed to operate with a
variety of network hardware and software platforms, we will need to
continuously modify and enhance our products to keep pace with changes
in Internet-related hardware, software, communication, browser and
database technologies.  We may not be successful in either developing
such products or timely introducing them to the market.  In addition,
uncertainties about the timing and nature of new network platforms or
technologies or modifications to existing platforms or technologies
could increase our research and development expenses.  The failure of
our products to operate effectively with the existing and future
network platforms and technologies used by our customers would limit
or reduce the market for our products, result in customer
dissatisfaction and seriously harm our business, results of operations
and financial condition.

IN ORDER TO EXECUTE OUR GROWTH PLAN WE MUST CONTINUE TO ATTRACT,
RETAIN, AND MOTIVATE HIGHLY SKILLED EMPLOYEES, AND WE FACE SIGNIFICANT
COMPETITION FROM OTHER SOFTWARE AND INTERNET COMPANIES IN DOING SO.

   To execute our growth plan we must attract and retain highly
qualified personnel.  We need to hire additional personnel in
virtually all operational areas, including sales, marketing, research
and development, operations and technical support, customer service
and administration.  Competition for these personnel is intense,
especially for engineers with high levels of experience in designing
and developing software and Internet-related products.  We cannot
assure you that we will be successful in attracting and retaining
qualified personnel.  We have from time to time in the past
experienced, and we expect to continue to experience in the future,
difficulty in hiring and retaining highly skilled employees with
appropriate qualifications.  Many of the companies we compete against
for experienced personnel have greater resources than us.  If we fail
to attract new personnel or retain and motivate our current personnel,
our business and future growth prospects could be severely harmed.

OUR PRODUCT FEATURES ARE STILL BEING DEVELOPED.

   Although our basic products have been developed, a number of
significant product enhancements are still under development, and we
still need to undertake significant effort to "fine tune" the
assessment capabilities of the products.  Furthermore, e-Perception
faces the difficult task of creating working systems that will
interface with client companies' database systems.  If we fail to
create working systems that interface with client companies' systems
to their satisfaction, our revenues and operating results would be
harmed.

                                                                         19
<PAGE>

THE MARKET MAY NOT ACCEPT OUR PRODUCTS AND OUR PRODUCTS MAY NOT
ADDRESS THE MARKET'S REQUIREMENTS.

   Our products are targeted to the survey and assessment market, a
market in which there are many competing service providers and
technologies in use.  Accordingly, the demand for our products and
services is very uncertain.  Our products provide a new alternative
solution for the market.  The market may not accept our products.
Even if our products achieve market acceptance, our products may fail
to address the market's requirements adequately.  If the products
using our technologies do not achieve or sustain market acceptance,
our business will be materially harmed.

WE MAY FACE UNKNOWN PRODUCT DEFECTS THAT COULD PREVENT MARKET
ACCEPTANCE AND INTEGRATION OF OUR PRODUCTS AND COULD RESULT IN LOSS OF
REVENUES AND/OR BUSINESS FAILURE.

   Products as complex as those that we offer frequently contain
undetected defects or errors.  Despite testing, defects or errors may
occur which could result in loss of or delay in revenues, loss of
market share, failure to achieve market acceptance, diversion of
development resources, injury to our reputation, increased insurance
costs and/or increased service costs, any of which could materially
harm our business.  In addition, we provide implementation,
customization, consulting and other technical services in connection
with the implementation and ongoing maintenance of our products.  Such
services typically involve working with sophisticated software,
computing and communication systems.  Our failure or inability to meet
customer expectations or project milestones in a timely manner could
also result in a loss of or delay in revenues, loss of market share,
failure to achieve market acceptance, injury to our reputation and
increased costs.

   Any significant defects or errors in our products might
discourage customers from purchasing our products and services.  Such
defects or errors could also result in tort or warranty claims.
Although we attempt to reduce the risk of losses resulting from such
claims through warranty disclaimers and liability limitation clauses
in our sales and licensing agreements, these contractual provisions
may not be enforceable in every instance.  Furthermore, insurance
coverage may not adequately cover us for such claims.  If the
liability-limiting provisions in our contracts are not upheld for any
reason, or if liabilities arise that are not contractually limited or
adequately covered by insurance, our business could be materially
harmed.

IF WE FAIL TO PROVIDE SERVICES TO SUPPORT OUR PRODUCTS, OUR REVENUES
AND PROFITABILITY WOULD BE HARMED.

   Our services are integral to the successful deployment of our
solutions. If our professional services organization does not
effectively implement and support our products or if we are unable to
expand our professional services organization and effectively use
strategic third-party partners to provide services directly to
customers to keep pace with sales, our revenues and operating results
would be harmed. In addition, if we are unable to expand our
professional services organization and effectively use these strategic
third party partners to provide these services directly to our
customers, we may be required to increasingly subcontract with third
parties to help provide these services to implement and support our
products, which will result in lower gross margins. In addition, since
we generally recognize revenues on performance of a client assessment
sold together with our implementation services over the period those
services are performed, delays in providing implementation services
will delay our recognition of revenue.

WE NEED ADDITIONAL FINANCING TO MAINTAIN AND EXPAND OUR BUSINESS,
FINANCING MAY NOT BE AVAILABLE ON FAVORABLE TERMS, IF AT ALL.

   We will need additional funds to expand or meet all of our
operating needs.  We cannot be certain that it will be available on
favorable terms, if at all.  Further, if we issue equity securities,
stockholders will experience additional dilution and the equity
securities may have seniority over our common stock.  If we need funds
and cannot raise them on acceptable terms, we may not be able to:
- Develop or enhance our products.

                                                                         20
<PAGE>

   -   Take advantage of future opportunities.
   -   Respond to customers and competition.

CHANGES IN TECHNOLOGIES COULD RESULT IN A FAILURE OF OUR PRODUCTS TO
ACHIEVE MARKET ACCEPTANCE.

   The emerging nature of the Internet requires us to continually
refine our products, particularly in response to competitive products.
This rapid rate of change also means that any refinements to our
future products will need to be introduced as quickly as possible.  In
addition, if new Internet, networking or communication technologies or
standards are widely adopted, or if other technological changes occur,
we may need to expend significant resources to adapt our products.  We
may not succeed in developing and marketing new products that respond
to competitive and technological developments and changing customer
needs.  This could materially harm our business.

WE MUST MANAGE GROWTH TO ACHIEVE PROFITABILITY.

   To be successful, we will need to implement additional management
information systems, develop further our operating, administrative,
financial and accounting systems and controls and maintain close
coordination among our executive, engineering, accounting, finance,
marketing, sales and operations organizations.  Any failure to manage
growth effectively could materially harm our business.

SHAREHOLDERS WILL EXPERIENCE DILUTION AS A RESULT OF THE COMPANY'S
STOCK OPTION PLANS.

   The Company has granted stock options to its employees and
anticipates granting additional stock options to its employees in
order to remain competitive with the market demand for such qualified
employees.  As a result, investors could experience dilution.

USE OF THE PROCEEDS OF THIS OFFERING IS UNSPECIFIED, AND WE CANNOT
PREDICT WHETHER WE WILL PUT THE PROCEEDS TO THE BEST USE FOR THE
COMPANY.

   We plan to use the proceeds from this Offering for general
corporate purposes.  Therefore, we will have discretion as to how we
will spend the proceeds, which could be in ways with which the
shareholders may not agree.  We cannot predict that the proceeds of
this Offering will be invested to yield a favorable return.

WE MAY BE SUED BY THIRD PARTIES FOR INFRINGEMENT OF THEIR PROPRIETARY
RIGHTS.

   The software and Internet industries are characterized by the
existence of a large number of patents, trademarks and copyrights and
frequent litigation based on allegations of patent infringement or
other violations of intellectual property rights.  As the number of
entrants into our market increases, the possibility of an intellectual
property claim against us grows.  Our technology, products and
services may not be able to sustain any third party claims or rights
against their use.  Any intellectual property claims, with or without
merit, could be time-consuming and expensive to litigate or settle and
could divert management attention from administering our core
business.

IT MAY BE DIFFICULT FOR A THIRD PARTY TO ACQUIRE US EVEN IF DOING SO
WOULD BE BENEFICIAL TO OUR SHAREHOLDERS.

   Some provisions of our Articles of Incorporation, as amended, and
Bylaws, as well as some provisions of Nevada or California law, may
discourage, delay or prevent third parties from acquiring us, even if
doing so would be beneficial to our shareholders.

                                                                         21
<PAGE>


WE DO NOT INTEND TO PAY DIVIDENDS.

   We have never declared or paid any cash dividends on our common
stock.  We currently intend to retain any future earnings to fund
growth and, therefore, do not expect to pay any dividends in the
foreseeable future.

WE ARE DEPENDENT FOR A PORTION OF OUR REVENUES ON RESELLERS, AND IF
THEY ARE NOT SUCCESSFUL MARKETING OUR TECHNOLOGY, OUR ABILITY TO
MAINTAIN OR INCREASE OUR REVENUES WILL BE HARMED.

   We sell a percentage of our technology through referral partners
in the United States and abroad. We have no control over our third-
party distributors, their shipping dates, or the volumes of systems
shipped by them. These companies may not use our products in volumes
anticipated by us. If they fail to do so, our revenues will be harmed.

OUR FAILURE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS COULD
SERIOUSLY HARM OUR BUSINESS.

   We generally rely on copyrights, trademarks, trade secret laws
and software security measures, along with employee and third-party
nondisclosure agreements, to establish and protect our proprietary
intellectual property rights, products and technology. Our products
are typically sold pursuant to contracts that restrict the use of the
products to the customer's internal purposes. We distribute our
software under agreements that are signed by our distribution partners
and our end-users. Despite our precautions taken to protect our
software, unauthorized parties may attempt to reverse engineer, copy,
or obtain and use information we regard as proprietary. Policing
unauthorized use of our products is difficult and software piracy is a
persistent problem. Additionally, the laws of some foreign countries
do not protect our proprietary rights to the same extent as do the
laws of the United States. We cannot assure you that our reliance on
contracts with third parties, or copyright, trademark, trade secret
protection or our software security measures, will be enough to be
successful and profitable in the industry in which we compete.
Unauthorized third parties may be able to copy some portions of our
products or reverse engineer or obtain and use information and
technology that we regard as proprietary. Third parties could also
independently develop competing technology or design around our
technology. If we are unable to successfully detect infringement and
enforce our rights in our technology, we may lose competitive position
in the market. We cannot assure you that our means of protecting its
proprietary rights in the United States or abroad will be adequate or
that competing companies will not independently develop similar
technology. In addition, some of our users may allow additional
unauthorized users to use our software, and if we do not detect such
use we could lose potential fees.  From time to time, we may encounter
disputes over rights and obligations concerning intellectual property.
We believe that our products do not infringe the intellectual property
rights of third parties. However, we cannot assure you that we will
prevail in all intellectual property disputes. We have not conducted a
search for existing patents and other intellectual property
registrations, and we cannot assure you that our products do not
infringe upon issued patents. In addition, because patent applications
in the United States are not publicly disclosed until the patent is
issued, applications may have been filed which would relate to our
products.  We indemnify some of our customers against claims that our
products infringe upon the intellectual property rights of others. We
could incur substantial costs in defending ourselves and our customers
against infringement claims. In the event of a claim of infringement,
we or our customers may be required to obtain one or more licenses
from third parties. We cannot assure you that such licenses could be
obtained from third parties at a reasonable cost, or at all. Defense
of any lawsuit or failure to obtain any such required license would
have a material adverse effect on our business.

FUTURE SALES OF RESTRICTED SHARES COULD ADVERSELY AFFECT THE PRICE OF
OUR COMMON STOCK AND LIMIT OUR ABILITY TO COMPLETE ADDITIONAL
FINANCING.

   Although our shares are currently trading on the OTC Bulletin
Board, the volume of trading of our common stock and the number of
shares in the public float are small.  Sales of a substantial number
of shares of our common stock into the public market in the future
could materially adversely affect the prevailing market price for our
common stock.  In connection with our acquisition of our Delaware
subsidiary, we issued 6,872,314

                                                                         22
<PAGE>

shares of common stock, all of which
will become eligible for resale pursuant to Rule 144 of the
Securities Act in early 2003.  Such a large "over-hang" of stock
eligible for sale in the public market, including shares of common
stock offered pursuant to this Memorandum which may become eligible
for resale in the future, may have the effect of depressing the price
of our common stock, and make it difficult or impossible for us to
obtain additional debt or equity financing.

OUR STOCK PRICE HAS FLUCTUATED AND COULD CONTINUE TO FLUCTUATE
SIGNIFICANTLY.

   The market price for our common stock has been, and is likely to
continue to be, volatile. The following factors may cause significant
fluctuations in the market price of our ordinary shares:

   -  Fluctuations in our quarterly revenues and earnings or those of
our competitors.
   -  Shortfalls in our operating results compared to levels expected
by the investment community.
   -  Announcements concerning our competitors or us.
   -  Announcements of technological innovations.
   -  Sale of shares or short-selling efforts by traders or other
investors.
   -  Market conditions in the industry.
   -  The conditions of the securities markets.

   The factors discussed above may depress or cause volatility of
our share price, regardless of our actual operating results.

THE SECURITIES BEING OFFERED ARE SUBJECT TO RESTRICTIONS ON TRANSFER,
WHICH MAY ADVERSELY AFFECT THEIR VALUE AND THE RISKS OF INVESTMENT.

   The shares of Common Stock that are the subject of this Offering
will be restricted securities and cannot be transferred without
registration or an exemption from registration under the Securities
Act and applicable state securities laws.  Because the securities
offered pursuant to this Memorandum will not initially be readily
transferable, investors should be prepared to bear the economic risk
of their investment for an indefinite period of time.








                                                                         23
<PAGE>


Item 7.   Consolidated Financial Statements

See the consolidated financial statements attached to and made a part of
this report.

Item 8.   Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

      Not applicable.


                             PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons:
Compliance With Section 16(a) of the Exchange Act.

   The information to be set forth under the captions "Executive
Officers" and "Proposal No. 1: Election of Directors" in the Company's
Proxy Statement to be filed in April 2003 for the Annual Meeting of
Stockholders to be held in 2003 (the "Proxy Statement"), is incorporated
herein by reference.


Item 10.   Executive Compensation

   The information to be set forth under the caption "Executive
Compensation and Related Information" in the Proxy Statement is
incorporated herein by reference.


Item 11.   Security Ownership of Certain Beneficial Owners and Management
and Related Stockholders.

   Security ownership of certain beneficial owners and management to be set
forth under the caption "Security Ownership of Directors, Nominees and
Principal Stockholders" in the Proxy Statement is incorporated herein by
reference.


Item 12.   Certain Relationships and Related Transactions.

   The information to be set forth under the caption "Transactions with
Related Parties" in the Proxy Statement is incorporated herein by
reference.


Item 13.   Exhibits and Reports on Form 8-K.

None.

Reports on Form 8-K.

None.

Item 14.   Controls and Procedures.


   Disclosure controls are procedures that are designed with an objective
of ensuring that information required to be disclosed in e-Perceptions'
periodic reports filed with the SEC, such as this Annual Report on Form 10-
KSB, is recorded, processed, summarized and reported within the time
periods specified by the SEC. Disclosure controls are also designed with an
objective of ensuring that such information is accumulated and communicated
to e-Perceptions' management, including the CEO and CFO, in order to allow
timely consideration regarding required disclosures.

                                                                          24
<PAGE>


   The evaluation of e-Perceptions' disclosure controls by the CEO and
CFO included a review of the controls' objectives and design, the operation
of the controls, and the effect of the controls on the information
presented in this Annual Report. E-Perceptions' management, including the
CEO and CFO, does not expect that disclosure controls can or will prevent
or detect all errors and all fraud, if any. A control system, no matter how
well designed and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Also,
projections of any evaluation of the disclosure controls and procedures to
future periods are subject to the risk that the disclosure controls and
procedures may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

   Based on their review and evaluation as of a date within 90 days of
the filing of this Form 10-KSB, and subject to the inherent limitations all
as described above, e-Perceptions' Chief Executive Officer and Chief
Financial Officer have concluded that e-Perceptions' disclosure controls
and procedures (as defined in Rules 13a-14 and 15d-14 under the Securities
Exchange Act of 1934) are effective. They are not aware of any significant
changes in e-Perceptions' disclosure controls or in other factors that
could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

                                                                         25
<PAGE>

Signatures

In accordance with section 13 or 15(d) with the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 15th
day of April 2003.

                    e-PERCEPTION, INC.

                     By:/s/ Joseph Flynn
                        ---------------------------
                        Joseph Flynn
                        Chief Executive Officer
                        Principal Executive Officer

                     By:/s/ James P. Stapleton
                        ---------------------------
                        James P. Stapleton
                        Chief Financial Officer
                        Principal Financial Officer

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

       Signature               Title                           Date
      -----------             -------                         ------

/s/ Joseph Flynn
--------------------------
Joseph Flynn                Chief Executive Officer         April 15, 2003
                           (Principal Executive Officer)
                            and Director
/s/ James P. Stapleton
--------------------------
James P. Stapleton          Chief Financial Officer         April 15, 2003
                           (Principal Financial and
                            Accounting Officer)


/s/ Michael Vanderhoof
---------------------------        Director                 April 15, 2003
Michael Vanderhoof


/s/ Ray Gerrity
--------------------------         Director                 April 15, 2003
Ray Gerrity




/s/ Robert Miller
--------------------------         Director                 April 15, 2003
Robert Miller


/s/ Shelly Singhal
--------------------------          Director                April 15, 2003
Shelly Singhal

                                                                         26
<PAGE>
                    e-PERCEPTION, INC. AND SUBSIDIARY
                    CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 2002 AND 2001

                    WITH INDEPENDENT AUDITORS' REPORT







                                CONTENTS

                                                               Page

Independent Auditors' Report                                    F-1

Financial Statements:
  Consolidated Balance Sheet                                    F-2
  Consolidated Statements of Operations                         F-3
  Consolidated Statements of Stockholders' Equity               F-4
  Consolidated Statements of Cash Flows                     F-5-F-6
  Notes to Consolidated Financial Statements               F-7-F-23


<PAGE>


                     REPORT OF INDEPENDENT ACCOUNTANTS








Audit Committee and Board of Directors
e-Perception, Inc. and Subsidiary
Temecula, California


We have audited the accompanying consolidated balance sheet of e-
Perception, Inc. and Subsidiary as of December 31, 2002, and the
related consolidated statements of operations, stockholders' equity,
and cash flows for the years ended December 31, 2002 and 2001.  These
consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on
the consolidated 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 audit
provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of e-Perception, Inc. and Subsidiary as of December 31, 2002, and the
results of its operations and its cash flows for the years ended
December 31, 2002 and 2001, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern.  As
discussed in Note 1 to the accompanying consolidated financial
statements, the Company's significant operating losses raise
substantial doubt about its ability to continue as a going concern.
The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


/s/Stonefield Josephson, Inc.

CERTIFIED PUBLIC ACCOUNTANTS

Irvine, California
April 3, 2003








                              F-1
<PAGE>


               e-PERCEPTION, INC. AND SUBSIDIARY

                   CONSOLIDATED BALANCE SHEET

                       December 31, 2002

                            ASSETS





Current assets:

Cash and cash equivalents                          $  320,364
Accounts receivable, net                              359,681
Prepaid and other current assets                       62,812
                                                 -----------------
Total current assets                                  742,857


Property and equipment, net                           623,963


Software, net of accumulated
   amortization of $133,385                            14,958
License                                               100,500
Goodwill, net of accumulated
   amortization of $35,827                             66,532
Deposits                                               13,637
                                                 -----------------

                                                $   1,562,447
                                                 =================

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Line of credit and note payable                 $      69,765
Current portion of long-term debt                      18,450
Accounts payable and accrued expenses                 567,733
Deferred revenue                                       52,690
                                                 -----------------
Total current liabilities                             708,638

Long-term debt, excluding current portion               1,764

Stockholders' equity:
Common stock, par value at $0.001,
 25,000,000 shares authorized, 13,894,954
 shares issued and outstanding                         13,895
Additional paid-in capital                          7,301,591
Accumulated deficit                                (6,463,441)
                                                 -----------------
    Total stockholders' equity                        852,045
                                                 -----------------

                                              $     1,562,447
                                                 =================

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

                              F-2
<PAGE>

               e-PERCEPTION, INC. AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF OPERATIONS



                                                December 31,
                                    ----------------------------------
                                           2002            2001
                                    ----------------- ----------------
Net Revenues                        $     2,421,865   $     1,344,080
Cost of revenues                            966,180           703,425
                                    ----------------- ----------------
Gross profit                              1,455,685           640,655

Operating expenses:
Sales and marketing                       1,174,892         1,370,553
Research and development                    396,077           201,755
General and administrative expenses       1,597,668         1,756,761
                                    ----------------- ----------------
Total operating expenses                  3,168,637         3,329,069
                                    ----------------- ----------------
Loss from operations                     (1,712,952)       (2,688,414)
                                    ----------------- ----------------
Other income (expense):
Interest expense                            (85,706)          (20,293)
Interest income                                 652            15,538
Repricing of private placement             (690,122)               -
Gain on disposal of fixed assets             (1,362)           (3,602)
                                     ---------------- ----------------
Total other income (expense)               (776,538)           (8,357)
                                     ---------------- ----------------

Loss before provision for income taxes   (2,489,490)       (2,696,771)

Income taxes                                    800             2,512
                                     ---------------- ----------------
Net loss                            $    (2,490,290)  $    (2,699,283)
                                     ================ ================
Net loss per share -
basic and diluted                   $         (0.27)  $         (0.93)
                                     ================ ================
Number of weighted average shares -
basic and diluted                         9,068,153         2,906,700
                                     ================ ================

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

                              F-3


<PAGE>

                   e-PERCEPTION TECHNOLOGIES, INC.
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               YEARS ENDED DECEMBER 31, 2002 AND 2001

                             Additional                 Stock        Total
              Common stock   Paid-in   Accumulated  subscription stockholder's
            Shares   Amount  Capital      deficit    receivable     equity
           -------- -------- --------  ------------ ------------ -------------
Balance at
January 1,
2001, as
restated
for effect
of reverse
merger with
CDC (see
note 1) and
one to four
reverse stock
split on
January 15,
2002 (see
note 7)     1,556,689 $ 1,556 $3,123,000 $(1,273,868) $     -   $1,850,688

Issuance
of common
stock       5,315,625   5,316  2,138,434          -    (54,950)  2,088,800

Fair Value
for warrants
issued in
relation to
private
placement          -       -       4,461          -         -        4,461

Net loss           -       -          -   (2,699,283)       -    (2,699,283)
           ----------- ------- ---------- ----------- ---------- -----------
Balance at
December
31, 2001    6,872,314   6,872  5,265,895  (3,973,151)  (54,950)   1,244,666

Shares
issued in
connection


with reverse
merger with
CDC,January
9, 2002(see
Note 1)     1,100,000   1,100     (1,100)         -         -            -

Shares
issued in
private
placement,
net of
offering
costs         920,163     920    731,448          -         -       732,368

Receipt of
stock
subscription       -       -          -           -     54,950       54,950

Conversion
of debt to
equity      1,708,124   1,708    425,323          -         -       427,031

Repricing
of stock
sold in
private
placement   2,760,489   2,761    687,361          -         -       690,122

Fair value
of warrants
issued in
relation to
private
placement          -       -      51,271          -        -         51,271

Fair value
of warrants
issued for
services           -       -       8,461          -         -         8,461

Shares
issued for
payables      533,864     534    132,932          -         -       133,466

Net loss           -       -          -   (2,490,290)       -    (2,490,290)
           ----------- ------- ---------- ----------- --------- ------------
Balance at
December
31, 2002   13,894,954 $13,895 $7,301,591 $(6,463,411)  $    -    $  852,045
           =================================================================

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

                              F-4
<PAGE>



                 e-PERCEPTION TECHNOLOGIES, INC.
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    December 31,
                                             -------------------------
                                                 2002         2001
                                             ------------  -----------
Cash flows used for operating
   Net loss                                 $ (2,490,290)  $ (2,699,283)
Adjustments to reconcile
    net income to net cash
    used for operating activities:
   Depreciation and amortization                 239,940        208,820
   Bad debt expense                               99,400         73,956
   (Gain) loss on disposal of
     property and equipment                       (1,362)         3,602
   Interest expense                               79,224             -
   Non-cash compensation to
     employees and outside vendors                    -          20,000
   Expense related to warrants issued              8,461          4,461
   Management fee for Line of Credit              12,000             -
   Expense for repricing of
     stock in private placement                  690,122             -
Changes in assets and liabilities:
   (Increase) decrease in assets
   Accounts receivable                            44,285       (324,980)
   Prepaid and other current assets              (37,010)       (27,630)
   Other assets                                  (39,863)            -
Increase (decrease) in liabilities
   Accounts payable and accrued expenses         154,397        371,195
   Deferred revenues                              13,111         39,579
                                               -----------    -----------
   Net cash used for operating activities     (1,227,585)    (2,330,280)
                                               -----------    -----------
Cash flows used for investing activities:
   Purchases of property and equipment           (24,177)      (445,467)
   Proceeds from sale of
    property and equipment                         4,807          9,251
                                               -----------    -----------
     Net cash used for investing activities       (19,370)      (436,216)
Cash flows provided by financing activities:
   Principal proceeds from
    line of credit agreement                      250,000        145,092
   Proceeds from notes payable                         -         200,000
   Payments on notes payable                      (19,328)      (200,000)
   Gross proceeds from issuance
    of common stock                               920,165      2,050,050
   Collection of stock subscription receivable     54,950             -
                                               -----------    -----------
     Net cash provided by financing activities  1,205,787      2,195,142
                                               -----------    -----------
Net increase (decrease) in cash
 and cash equivalents                             (41,168)      (571,354)
Cash and cash equivalents, beginning of year      361,532        932,886
                                               -----------    -----------
Cash and cash equivalents, end of year         $  320,364     $  361,532
                                               ===========    ===========

The accompanying notes are an integral part of these consolidated financial
Statements

                              F-5
<PAGE>


              e-PERCEPTION, INC. AND SUBSIDIARY

      CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

       INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

                                                    December 31,
                                             --------------------------
2002 2001
                                             ------------  ------------
Supplemental disclosure of cash flow
  information:
   Interest paid                              $    3,443    $   20,293
                                             ============  ============
   Income tax paid                            $      800    $    2,512
                                             ============  ============

Non-cash investing and financing activities:
   Increase in line of credit from
     accrued interest payable                 $   61,548    $   14,658
                                             ============  ============
   Issuance of shares of common stock in lieu
     of accrued expenses to vendors           $  133,466    $   18,750
                                             ============  ============
   Conversion of Debt to Equity               $  427,031    $       -
                                             ============  ============
Expenses incurred and not paid, related to
private placement of stock                    $  136,526    $       -
                                             ============  ============
Warrants issued for expenses of private
Placement                                     $   51,271    $       -
                                             ============  ============
Note payable incurred for acquisition of
Equipment                                     $    3,751    $       -















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

                              F-6
<PAGE>

                   e-PERCEPTION, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001

(1)   Summary of Significant Accounting Policies:

Business Activity:

e-Perception, Inc., a Nevada corporation (the "Company" or
"e-Perception") is the parent corporation of e-Perception
Technologies, Inc., a Delaware corporation, which develops,
markets and supports web services for real-time human
capital management.

e-Perception, Inc., was incorporated in the State of Nevada
on August 29, 1995. From its incorporation in August 1995
until January 2002, the Company had no significant
operations.

On January 9, 2002, e-Perception Technologies, Inc.
completed a tender offer with Corporate Development Centers,
Inc., a Nevada corporation ("CDC") that traded its common
stock on the Over-the-Counter Bulletin Board.  In connection
with the tender offer, the stockholders of e-Perception
Technologies received one (1) share of CDC common stock for
each four (4) shares of e-Perception Technologies common
stock they owned prior to the tender offer.  As a result, e-
Perception Technologies became a wholly owned subsidiary of
CDC and CDC changed its name to e-Perception, Inc.  The
transaction was accounted for as a reverse merger as the
stockholders of e-Perception Technologies, Inc. became the
controlling stockholders of the entity after the exchange of
shares.  Accordingly e-Perception Technologies was treated
as the acquirer for accounting purposes.    The Company is
in the process of changing its name to PeopleView, subject
to shareholder approval.  The stock currently trades on the
OTC Bulletin Board under the symbol, "EPER.OB".

e-Perception develops, markets and supports web based
assessment and reporting tools and provides consulting
services that enable companies to manage their Human Capital
Management (HCM) needs in real-time.  Companies ranging in
size from 50 person firms to Fortune 500 companies implement
the Company's solutions in order to have deep insight into
their human capital assets.  The Company's mission is to
help corporations improve their financial results by
aligning corporate strategy with employee perception,
productivity, and performance.

All intercompany transactions have been eliminated upon
consolidation.

Basis of Presentation:

The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in
the United States of America, which contemplate continuation
of the Company as a going concern.  However, the Company has
reported net losses of $2,490,290 for the year ended December
31, 2002, and has an accumulated deficit of $6,463,441 at
December 31, 2002.

                              F-7
<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001

(1)   Summary of Significant Accounting Policies, continued:

   Basis of Presentation, continued:

Management has taken or plans to take the following steps that it
believes will be sufficient to provide the Company with the
ability to continue in existence:

   -   Hire a new management team to focus on sales and
financing of the Company.
   -   Streamline the product line to offer prefabricated
products at a reasonable price that could be customized.
   -   Raise funds through the sale of its stock in private
placements.
   -   Hire additional personnel and focusing sales and
marketing efforts on the distribution of product through
key marketing channels currently being developed by the
Company.

The accompanying financial statements do not include any
adjustments relative to the recoverability and classification of
assets carrying amounts or the amount and classification of
liabilities that might result from the outcome of this
uncertainty.

Use of Estimates:

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

Revenue Recognition:

The Company recognizes revenues when earned in the period in
which the projects are completed and electronically delivered to
the customers.  The Company's revenue recognition policies are in
compliance with all applicable accounting regulations, including
American Institute of Certified Public Accountants ("AICPA")
Statement of Position ("SOP") 97-2, Software Revenue Recognition,
as amended by SOP 98-4 and SOP 98-9.  Any revenues from software
arrangements with multiple elements are allocated to each element
of the arrangement based on the relative fair values using
specific objective evidence as defined in the SOPs.  If no such
objective evidence exists, revenues from the arrangements are
deferred and not recognized until the entire arrangement is
completed and accepted by the customer.  Once the amount of the
revenue for each element is determined, the Company recognizes
revenues as each element is completed and accepted by the
customer.

Service and license fees are deferred and recognized over the
life of the agreement.

                              F-8
<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001

(1)	Summary of Significant Accounting Policies, continued:

	Cash and Cash Equivalents:

For purposes of the statement of cash flows, cash equivalents
include all highly liquid debt instruments with original
maturities of three months or less which are not securing any
corporate obligations.  The Company had no cash equivalents at
December 31, 2002.

The Company maintains its cash in bank deposits accounts, which,
at times, may exceed federally insured limits.  At December 31,
2002, the Company had approximately $220,000 in excess of FDIC
insured limits.  The Company has not experienced any losses in
such accounts.

Accounts Receivable:

The Company provides an allowance for doubtful accounts equal to
the estimated uncollectible amounts.  The Company's estimate is
based on historical collection experience and a review of the
current status of trade accounts receivable.  It is reasonably
possible that the Company's estimate of the allowance for
doubtful accounts will change.  Accounts receivable are presented
net of an allowance for doubtful accounts of $25,000 at December
31, 2002.

Property and Equipment:

Property and equipment are valued at cost.  Depreciation and
amortization are provided over the estimated useful lives of
three to seven years using the straight-line method.  Leasehold
improvements are amortized on a straight-line basis over the
economic lives.  Expenditures that materially increase an assets
life are capitalized while ordinary repairs and maintenance are
charged to operations as incurred.

Intangible Assets:

The Company has adopted Statement of Financial Accounting
Standard ("SFAS") No. 142 (SFAS 142), "Goodwill and Other
Intangibles."  Under this pronouncement, if an asset has a
definite life, then the guidelines under SFAS 144 "Accounting
for the Impairment or Disposal of Long-Lived Assets" apply.  The
capitalized software is stated at cost and has a definite life of
2-3 years.  Amortization is calculated using the straight-line
method over the estimated useful life.  Software is periodically
analyzed for impairment of the carrying amount as compared to the
fair value of the assets under the guidelines of SFAS No. 142.
In order to measure any impairment, the Company evaluated whether
there were any events or circumstances that occurred that may
have affected the carrying amount of the intangible.  Management
believes that no such events have occurred as of December 31,
2002.  In the event that management determines that a triggering
event has occurred, the Company would estimate the future cash
flows expected to result from the use of the asset and its
eventual disposition.  The future cash flows that would be used
are the future cash inflows expected to be generated by the asset
less the future cash outflows expected to be necessary to obtain
those inflows.  When the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the
carrying amount of the asset, an impairment loss would be
recognized.

                              F-9
<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001

 (1)   Summary of Significant Accounting Policies, continued:
Intangible Assets, continued:

Under SFAS 142, if an asset has an indefinite life, the
guidelines of this pronouncement apply.  Accordingly the Company
has ceased amortizing goodwill and licenses, due to their having
an indefinite life.  The remaining useful life will be reviewed
each reporting period for changes.  Licenses are
stated at cost and are periodically analyzed for impairment of
the carrying amount as compared to the fair value of the assets.
In order to measure any impairment, the Company evaluated whether
there were any events or circumstances that occurred that may
have affected the carrying amount of the intangible.  Management
believes that no such events have occurred as of December 31,
2002.  In the event that management determines that a triggering
event has occurred, the Company would first determine the fair
market value of the reporting unit.  If the value of the asset
exceeds the fair value of the reporting unit, then the Company
would estimate the undiscounted cash flows from continuing to use
the asset and compare that amount to the assets carrying amount.
If the carrying amount of the asset is greater than the expected
future cash flows then an impairment loss would be recognized.
Goodwill is no longer amortized but is tested annually for any
indication of impairment.

   Long-Lived Assets:

In accordance with SFAS Nos. 142 and 144, long-lived assets to be
held and used are analyzed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.  SFAS No. 142 relates to assets with
an indefinite life where as SFAS 144 relates to assets that can be
amortized and the life determinable.  The Company evaluates at
each balance sheet date whether events and circumstances have
occurred that indicate possible impairment.  If there are
indications of impairment, the Company uses future undiscounted
cash flows of the related asset or asset grouping over the
remaining life in measuring whether the assets are recoverable.
In the event such cash flows are not expected to be sufficient to
recover the recorded asset values, the assets are written down to
their estimated fair value.  Long-lived assets to be disposed of
are reported at the lower of carrying amount or fair value of
asset less the cost to sell.


   Advertising:

The Company expenses advertising costs when incurred.
Advertising expense totaled $46,122 and $277,290, respectively,
for the years ended December 31, 2002 and 2001.

Research and Development:

Research, development, and engineering costs are expensed in the
year incurred.  These costs were $396,077 and $201,755,
respectively, for the years ended December 31, 2002 and 2001.

                              F-10
<PAGE>


                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001


(1)   Summary of Significant Accounting Policies, continued:

Income Taxes:

Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the
financial reporting requirements and those imposed under federal
and state law.  Deferred taxes are provided for timing
differences in the recognition of revenue and expenses for income

tax and financial reporting purposes and are measured using
enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled.  The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.  Deferred income tax
expense represents the change during the period in the deferred
tax assets and liabilities.  The components of the deferred tax
assets and liabilities are individually classified as current and
non-current based on their characteristics.  Realization of the
deferred tax asset is dependent on generating sufficient taxable
income in future years.  Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is
more likely than not that some portion or all of the deferred tax
assets will not be realized.

Fair Value of Financial Instruments:

The carrying amount of the Company's cash and cash equivalents,
accounts receivable, notes payable, accounts payable, and accrued
expenses, none of which is held for trading, approximates their
estimated fair values due to the short-term maturities of those
financial instruments.

Comprehensive Income:

SFAS No. 130, "Reporting Comprehensive Income," establishes
standards for the reporting and display of comprehensive income
and its components in the financial statements.  As of
December 31, 2002, the Company has no items that represent other
comprehensive income and, therefore, has not included a Statement
of Comprehensive Income in the financial statements.

Stock-Based Compensation:

The Company accounts for employee stock options in accordance with
Accounting Principles Board Opinion No. 25 ("APB 25"),
"Accounting for Stock Issued to Employees."  Under APB 25, the
Company does not recognize compensation expense related to
options issued under the Company's employee stock options plans,
unless the option is granted at a price below market price on the
date of grant.

For non-employees stock based compensation, the Company
recognizes an expense in accordance with SFAS No. 123 and values
the equity securities based on the fair value of the security on
the date of grant.  For stock-based awards, the value is based on
the market value for the stock on the date of grant and if the
stock has restrictions as to transferability, a discount is
provided for lack of tradability.  Stock option awards are valued
using the Black-Scholes option-pricing model.

                              F-11
<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001


(1)   Summary of Significant Accounting Policies, continued:

Basic and Diluted Loss Per Share:

In accordance with SFAS No. 128, "Earnings Per Share," the
basic loss per common share is computed by dividing net loss
available to common stockholders by the weighted average number
of common shares outstanding.  Diluted loss per common share is
computed similarly to basic loss per common share, except that
the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares
were anti-dilutive.  At December 31, 2002 and 2001, the Company
had approximately 1,000,729 and 638,750, respectively, of
securities, not included in the computation of diluted earnings
per share as their effect would be anti-dilutive.

   Segment Reporting:

Based on the Company's integration and management strategies, the
Company operated in a single business segment.  For the years
ended December 31, 2002 and 2001, all revenues have been derived
from domestic operations.

   New Accounting Pronouncements:

In October 2001, the FASB issued SFAS No. 143, "Accounting for
Asset Retirement Obligations," which requires companies to
record the fair value of a liability for asset retirement
obligations in the period in which they are incurred.  The
statement applies to a company's legal obligations associated
with the retirement of a tangible long-lived asset that results
from the acquisition, construction, and development or through
the normal operation of a long-lived asset.  When a liability is
initially recorded, the company would capitalize the cost,
thereby increasing the carrying amount of the related asset.  The
capitalized asset retirement cost is depreciated over the life of
the respective asset while the liability is accreted to its
present value.  Upon settlement of the liability, the obligation
is settled at its recorded amount or the company incurs a gain or
loss.  The statement is effective for fiscal years beginning
after June 30, 2002.  The Company does not expect the adoption to
have a material impact to the Company's financial position or
results of operations.

In October 2001, the FASB issued SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets."  Statement 144
addresses the accounting and reporting for the impairment or
disposal of long-lived assets.  The statement provides a single
accounting model for long-lived assets to be disposed of.  New
criteria must be met to classify the asset as an asset held-for-
sale.  This statement also focuses on reporting the effects of a
disposal of a segment of a business.  This statement is effective
for fiscal years beginning after December 15, 2001.  The adoption
of this statement did not have a material impact to the Company's
financial position or results of operations.

                              F-12
<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001

(1)   Summary of Significant Accounting Policies, Continued:

New Accounting Pronouncements, Continued:

In April 2002, the FASB issued Statement No. 145, "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections."  This Statement rescinds FASB
Statement No. 4, "Reporting Gains and Losses from Extinguishment
of Debt," and an amendment of that Statement, FASB Statement No.
64, "Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements" and FASB Statement No. 44, "Accounting for
Intangible Assets of Motor Carriers."  This Statement amends
FASB Statement No. 13, "Accounting for Leases," to eliminate an
inconsistency between the required accounting for sale-leaseback
transactions and the required accounting for certain lease
modifications that have economic effects that are similar to
sale-leaseback transactions.  The Company does not expect the
adoption to have a material impact to the Company's financial
position or results of operations.

In June 2002, the FASB issued Statement No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities." This
Statement addresses financial accounting and reporting for costs
associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." The provisions of this Statement are effective
for exit or disposal activities that are initiated after December
31, 2002, with early application encouraged. The Company does not
expect the adoption to have a material impact to the Company's
financial position or results of operations.

In October 2002, the FASB issued Statement No. 147,
"Acquisitions of Certain Financial Institutions-an amendment of
FASB Statements No. 72 and 144 and FASB Interpretation No. 9,"
which removes acquisitions of financial institutions from the
scope of both Statement No. 72 and Interpretation No. 9 and
requires that those transactions be accounted for in accordance
with Statements No. 141, "Business Combinations," and No. 142,
"Goodwill and Other Intangible Assets."  In addition, this
Statement amends SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," to include in its scope long-
term customer-relationship intangible assets of financial
institutions such as depositor- and borrower-relationship
intangible assets and credit cardholder intangible assets.  The
requirements relating to acquisitions of financial institutions
are effective for acquisitions for which the date of acquisition
is on or after October 1, 2002.  The provisions related to
accounting for the impairment or disposal of certain long-term
customer-relationship intangible assets are effective on October
1, 2002.  This pronouncement does not currently apply to the
Company.

                              F-13
<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001


(1)   Summary of Significant Accounting Policies, Continued:

New Accounting Pronouncements, Continued:

In December 2002, the FASB issued Statement No. 148, "Accounting
for Stock-Based Compensation-Transition and Disclosure," which
amends FASB Statement No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for
stock-based employee compensation.  In addition, this Statement
amends the disclosure requirements of Statement No. 123 to
require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-
based employee compensation and the effect of the method used on
reported results.  The transition guidance and annual disclosure
provisions of Statement No. 148 are effective for fiscal years
ending after December 15, 2002, with earlier application
permitted in certain circumstances.  The interim disclosure
provisions are effective for financial reports containing
financial statements for interim periods beginning after December
15, 2002.  The adoption of this Statement did not have a material
impact on the Company's financial position or results of
operations as the Company has not elected to change to the fair
value based method of accounting for stock-based employee
compensation.

In January 2003, the FASB issued Interpretation No. 46,
"Consolidation of Variable Interest Entities." Interpretation
46 changes the criteria by which one company includes another
entity in its consolidated financial statements.  Previously, the
criteria were based on control through voting interest.
Interpretation 46 requires a variable interest entity to be
consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entity's
activities or entitled to receive a majority of the entity's
residual returns or both. A company that consolidates a variable
interest entity is called the primary beneficiary of that entity.
The consolidation requirements of Interpretation 46 apply
immediately to variable interest entities created after January
31, 2003. The consolidation requirements apply to older entities
in the first fiscal year or interim period beginning after June
15, 2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003, regardless of
when the variable interest entity was established. The Company
does not expect the adoption to have a material impact to the
Company's financial position or results of operations.


(2)	Accounts Receivable:

      A summary is as follows:

                                                    2002
                                                   ------
       Trade                                    $    384,681
       Allowance for doubtful accounts               (25,000)
                                                -------------
                                       	      $    359,681
                                                =============

                              F-14
<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001


(3)	Property and Equipment:

A summary is as follows:

                                                    2002
                                                   ------
   Furniture and fixture                      $	     124,499
   Computers                                         685,809
   Office equipment                                   60,827
   Leasehold improvement                              99,662
                                                -------------
                                                     970,797
     Less accumulated depreciation and
      amortization                                   346,834
                                                -------------
                                              $      623,963

Depreciation and amortization expense for property, equipment,
and improvements amounted to $176,937 and $132,050 for the years
ended December 31, 2002 and 2001 respectively.


(4)   Intangible and Other Assets:

The Company has certain software that it owns and is amortizing
over a 3-year period which is its useful life.  The software
will not have a residual value at the end of its life.

During 2002, the Company paid for the rights to use certain software
(license agreement) for an indefinite period of time.  The value
of these licenses has been capitalized as an intangible asset
with an indeterminate life.  The value of the license will be
analyzed for impairment at each reporting period.  In order
to keep the software updated with the latest versions, the
Company pays a minimal maintenance fee.

Amortization expense for intangible assets amounted to $63,003
and $76,770 for the year ended December 31, 2002 and 2001,
respectively.  Future amortization expense is as follows:

                        Year ended
                        December 31,
                       -------------
                           2003               $   14,958
                           2004                       -
                           2005                       -
                           2006                       -
                           2007                       -
                                              -----------
                                              $   14,958
                                              ===========

                                  F-15
<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001



(5)   Line of Credit and Notes Payable:

The Company has a $60,000 loan with an affiliate of a

stockholder. In December, the Company entered into an agreement
whereby $10,000 of the outstanding balance was converted into
common shares.  (See Note 7).  The outstanding balance at
December 31, 2002 is $54,971, including accrued interest.  The
loan bears interest at 12% per annum, matures on April 29, 2003,
and is secured by substantially all assets of the Company.

The Company has an unsecured note payable in the amount of
$14,794 at December 31, 2002.  The note matures on June 2003 and
carries an interest rate of 5.9%.

During 2002, the Company had a revolving line of credit, with an
affiliate of a stockholder.  The line of credit carried an
interest rate of 20% per annum. As of December 31, 2002, the
balance of $417,031 was converted to equity.  (See Note 7)


(6)   Long-Term Debt:

A summary is as follows:

                                                 2002
                                                ------
   Unsecured 6% note payable to a vendor,
    payable in monthly installments of
    $2,104,
    including interest through June 2003      $   16,716

   Computer lease agreement, payable in
    monthly installments of $144.54,
    including interest through February 2005       3,498
                                              -----------

                                                  20,214

   Less current maturities                        18,450
                                              -----------
                                              $    1,764

A summary of the maturities of long-term debt at December 31,
2002 follows:

Year ending December 31,
   2003                                       $    18,450
   2004                                             1,764
                                               -----------
                                              $    20,214

                            F-16

<PAGE>


                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001




(7)   Equity Transactions:

On January 15, 2002 the shareholders of the Company approved a
one-for-four reverse split of the Company's outstanding common
stock shares.  All information regarding common stock shares and
per share data have been adjusted to reflect the one-for-four
reverse stock split for all periods presented.

During 2002, the Company raised funds through the sale of 920,163
shares in a private placement with an initial price of $2.00 per
share and which was then reduced to $1.00 per share.  Gross
proceeds of $920,163 were raised.  Total costs related to the
placement were $187,795.  Included in this amount is $51,271 of
expense related to the fair market value of warrants issued.  The
fair value of the warrants was determined using the Black Scholes
pricing mode.  See Note 8 for the assumptions used.

The Company repriced the
private placement from $1.00 per share to $0.25, resulting in
2,760,489 additional shares of stock being issued.  Expense
totaling $690,122 has been recognized at December 31, 2002.
These shares have been presented as if issued from original date
of private placement.

In December 2002, the Company agreed to convert $427,031 of debt
to 1,708,124 shares of common stock and the option to convert to an
equal number of preferred shares upon authorization of the preferred
share class of stock by the shareholders.

In December 2002, the Company agreed to issue 533,864 shares of
common stock in settlement of payables totaling $133,466.  The
fair market value of the stock exchanged was determined based on
the price of the shares sold under the private placement, which
was more indicative of the fair value of the Company's shares
than the trading value of the thinly traded stock.  The number of
shares of stock issued considered the repricing discussed above.

In April 2002, the Company issued 60,000 warrants to a lender as
consideration to extend the terms of the debt.  Total fair value
of the warrants was $16,922 as determined using the Black Scholes
pricing model.  See Note 8 for the fair value assumptions used.
The warrants vest over a one-year period.  (See Note 8.)

                                   F-17

<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001



(8)   Warrants:

   The warrant activities as December 31, 2002 and 2001 follow:
                                                             Weighted
                                             Number           average
                                           of Shares       exercise price
                                          -----------     ----------------
Outstanding at January 1, 2001                 25,000         $     1.00
  Granted                                     256,250               0.10
                                           ----------         -----------
Outstanding at December 31, 2001              281,250               0.18
  Granted                                     153,416               1.26
                                           ----------         -----------
Outstanding at December 31, 2002              434,666          $    0.55
                                           ==========         ===========
Warrants exercisable at
December 31, 2001                             281,250          $    0.18
                                           ==========         ===========
Warrants exercisable at
December 31, 2002                             434,666          $    0.55
                                           ==========         ===========

The following tables summarize information about warrants
outstanding and exercisable at December 31, 2002:

                        Weighted      Outstanding               Exercisable
Range of   Number of    average         options     Number of     options
exercise    shares      remaining       weighted     shares       weighted
prices    outstanding      in           average    exercisable    average
                       contractual      exercise                  exercise
                       life in year     price                     price
-------- ------------- ------------- ------------- ------------ ------------
$.40 to     434,666         8.68         $  .55       434,666      $  .55
$1.60

During 2002, the Board of Directors approved and issued 60,000
warrants at an exercise price of $1.60 per share.  The total
expense to be recognized is $16,922.  The Company has recognized
$8,461 in 2002 due to vesting.  The fair value of the warrants
was determined using the Black-Scholes option-pricing model, with
the following assumptions: (i) no expected dividends, (ii) a risk
free interest rate of 4.19%, (iii) expected volatility of 30.73%,
and (iv) an expected life of one year.

During 2002, the Board of Directors approved and issued 93,416
warrants related to the Private Placement at an exercise price of
$1.00 per share, with a fair market value of $51,271.  The fair
value of the warrants was determined using the Black-Scholes
option-pricing model, with the following assumptions: (i) no
expected dividends, (ii) a risk free interest rate of 1.45%,
(iii) expected volatility of 149.61%, and (iv) an expected life
of one year.

                             F-18

<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001





(9)   Stock Option Plans:

Effective June 15, 2000, the Company adopted the Stock Option
Plan A (Plan A) under which all employees may be granted options
to purchase shares of the Company's authorized but unissued
common stock.  The maximum number of shares of the Company's
common stock available for issuance under the Plan A is 550,000
shares.  As of December 31, 2002, the maximum number of shares
available for future grants under the Plan is 313,750.  Under the
Plan, the option exercise price is equal to the fair market value
of the Company's common stock at the date of grant.  Options
expire no later than 10 years from the grant date and generally
vest within five years.  In 2001, the Company elected to fully
vest all outstanding options.

In October 2001, the Company approved a Stock Option Plan B (Plan
B) under which all employees may be granted options to purchase
shares of the Company's authorized but unissued common stock.
The maximum number of shares of the Company's common stock
available for issuance under the Plan B is 1.35 million shares.
As of December 31, 2002, the remaining number of shares available
for future grants under the Plan is 49,750 shares.  Under the
Plan, the option exercise price is equal to the fair market value
of the Company's common stock at the date of grant.  Options
expire no later than 10 years from the grant date and generally
vest within five years.

Additional information with respect to these two Plans' stock
option activity is as follows:

                                          Number      Weighed average
                                          of shares   exercise price
                                         -----------  ---------------
Outstanding at January 1, 2001              130,000       $    0.50
  Granted                                 1,143,750            0.18
                                         -----------         -------
Outstanding at December 31, 2001          1,273,750            0.22
  Granted                                   552,750            1.57
  Cancelled                                (290,000)           2.15
                                         -----------         -------
Outstanding at December 31, 2002          1,536,500        $   1.03
                                         ===========         =======
Options exercisable at December 31,
2001                                        357,500        $   0.54
                                         ===========         =======
Options exercisable at December 31,
2002                                        566,063        $   1.27
                                         ===========         =======

The following tables summarize information about stock options
outstanding and exercisable at December 31, 2002:

                        Weighted      Outstanding               Exercisable
Range of   Number of    average         options     Number of     options
exercise    shares      remaining       weighted     shares       weighted
prices    outstanding      in           average    exercisable    average
                       contractual      exercise                  exercise
                       life in year     price                     price
-------- ------------- ------------- ------------- ------------ ------------
$.40 to    1,435,750         9.05         $  0.67      477,813      $ 0.66
$2.00
$2.25 to     100,750         9.89           4.23        88,250        5.18
$6.00
-------- ------------- ------------- ------------- ------------ ------------
           1,536,500         9.10           1.03       566,063      $ 1.27
         ============= ============= ============= ============ ============

                                  F-19

<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001



(9)  Stock Option Plans, continued:

The Company has elected to follow APB Opinion No. 25 (Accounting
for Stock Issued to Employees) in accounting for its employee
stock options.  Accordingly, no compensation expense is
recognized in the Company's financial statements because the
exercise price of the Company's employee stock options equals the
market price of the Company's common stock on the date of grant.
If under Financial Accounting Standards Board Statement No. 123
(Accounting for Stock-Based Compensation) the Company determined
compensation costs based on the fair value at the grant date for
its stock options, net loss and loss per share would have been
increased to the following pro forma amounts:

2002     2001
                                               ------         ------
Net loss:
  As reported                             $  2,490,290    $  2,699,283
  Pro forma                               $  2,875,261    $  2,722,146

Basic and diluted loss per share:
  As reported                             $       (.31)   $       (.93)
  Pro forma                               $       (.36)   $       (.93)

The weighted average estimated fair value of stock options
granted during 2002 and 2001 was $0.70 and $.03 per share,
respectively.  These amounts were determined using the Black-
Scholes option-pricing model, which values options based on the
stock price at the grant date, the expected life of the option,
the estimated volatility of the stock, the expected dividend
payments, and the risk-free interest rate over the expected life
of the option.  The assumptions used in the Black-Scholes model
were as follows for stock options granted in 2002 and 2001:


                                                  2002         2001
                                                 ------       ------

Risk-free interest rate                       1.45 to 2.48%   4.5 to 5%
Expected volatility of common stock           149.61%         1.0%
Dividend yield                                0%              0%
Expected life of options                      1 year          3 Years

The Black-Scholes option valuation model was developed for
estimating the fair value of traded options that have no vesting
restrictions and are fully transferable.  Because option
valuation models require the use of subjective assumptions,
changes in these assumptions can materially affect the fair value
of the options.  The Company's options do not have the
characteristics of traded options; therefore, the option
valuation models do not necessarily provide a reliable measure of
the fair value of its options.

(10)   Income Taxes:

Realization of deferred tax assets is dependent on future
earnings, if any, the timing and amount of which is uncertain.
Accordingly, a valuation allowance, in an amount equal to the net
deferred tax asset as of December 31, 2002 has been established
to reflect these uncertainties.  As of December 31, 2002 and 2001
the deferred tax asset before valuation allowances is
approximately $1,882,300 and $1,327,800, respectively, for
federal income tax purposes, and $277,200 and $227,000,
respectively for state income tax purposes.

                             F-20

<PAGE>

               e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001

(10)  Income Taxes, continued:

Utilization of the net operating loss carryforwards may be
subject to a substantial annual limitation due to ownership
change limitations provided by the Internal Revenue Code of 1986.
The annual limitation may result in the expiration of net
operating loss carryforwards before utilization.

Income tax provision amounted $800 and $2,512 for 2002 and 2001,
respectively, (an effective rate of 0% for both 2002 and 2001).
A reconciliation of the provision (benefit) for income taxes with
amounts determined by applying the statutory U.S. federal income
tax rate to income before income taxes is as follows:

                                           2002          2001
                                          ------        ------
Computed tax at federal
 statutory rate of 34%                 $  (846,400)   $  (916,900)
State taxes, net of
 federal benefit                               500       (114,400)
Meals and entertainment                      5,100          8,800
Penalties                                    2,100          9,500
Cost of repricing                          234,700             -
Other                                           -          (1,388)
Change in valuation allowance              604,800      1,016,900
                                         ----------     ----------
                                       $       800    $     2,512
                                         ==========     ==========

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes.  Significant components of the Company's
deferred tax assets and liabilities are as follows:

Deferred tax assets:
  Allowance for doubtful accounts      $    10,700     $   22,100
  Accrued vacation                          13,300          7,600
  State taxes                                  300            300
  Net operating loss carryforwards       2,256,200      1,561,600
                                       ------------    -----------
  Total deferred tax assets              2,280,500      1,591,600
                                       ------------    -----------

Deferred tax liabilities:
  Fixed and intangible assets             (120,900)       (36,800)
                                       ------------    -----------
  Total deferred tax liabilities          (120,900)       (36,800)
                                       ------------    -----------
Net deferred assets before valuation
Allowance                                2,159,600      1,554,800
  Valuation allowance                   (2,159,600)    (1,554,800)
                                       ------------    -----------
Net deferred tax assets                 $       -       $      -
                                       ============    ===========

                                 F-21

<PAGE>

                  e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001

(10)  Income Taxes, continued:

At December 31, 2002, the Company has available unused net
operating losses carryforwards of approximately $5,761,000 for
federal and $3,300,000 for state that may be applied against
future taxable income and that, if unused, expire through 2022.
For 2002 and 2003, the state of California has suspended the use
of net operating loss carryforwards.


(11)   Retirement Plan:

The Company sponsors a 401(k) plan (the "Plan") for the
benefits of employees who are at least 21 years of age.  The
Company's management determines, at its discretion, the annual
and matching contribution.  The Company elected not to contribute
to the Plan for the years ended December 31, 2002 and 2001.


(12)   Commitments:

Leases

The Company leases its facility under a noncancellable operating
lease.  The following is a schedule by years of future minimum
rental payments required under operating leases that have
noncancellable lease terms in excess of one year as of December
31, 2002:

Year ending December 31,
   2003                                     $   127,505
   2004                                          53,764
                                            -----------
        Total                               $   181,269
                                            ===========
All leases expire prior to June 2004.  Real estate taxes,
insurance, and maintenance expenses are obligations of the
Company.  It is expected that in the normal course of business,
leases that expire will be renewed or replaced by leases on other
properties.  At the end of the lease term, the Company has an
option to renew the lease for an additional three years (Option
Term).  Rent expense for the years ended December 31, 2002 and
2001 totaled $130,998 and $94,646, respectively.

Employment Agreements

On December 16, 2002, the Company entered into an employment
agreement with Joseph Flynn to serve as its Chief Executive
Officer, effective January 1, 2003.  Mr. Flynn's agreement has a
term of three years and provides for a base annual salary of
$120,000.  On April 1, 2003, the base annual salary will be
increased to $160,000.  After the 90th day of employment, Mr.
Flynn will receive a bonus of 15,000 shares of restricted common
stock.  Compensation expense equal to the market value on the
90th day will be recorded.  Mr. Flynn may receive annual bonuses,
at the discretion of the Board of Directors.

                              F-22

<PAGE>

                e-PERCEPTION, INC. AND SUBSIDIARY
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
           FOR THE YEARS ENDING DECEMBER 31, 2002 AND 2001

(12)  Commitments, continued:

On October 31, 2002, the Company entered into an employment
agreement with Etienne Weidemann, to serve as VP of Marketing
effective January 1, 2003.  Mr. Weidemann's agreement provides
for a base annual salary of $120,000 with an increase to $150,000
on April 1, 2003.  Mr. Weidemann will receive 30,000 shares of
common stock in lieu of salary for the months of November and
December 2002.  Mr. Weidemann may receive an annual bonus, at the
discretion of the Board of Directors, at an amount to be
determined.

(13)   Major Customers:

For the years ended December 31, 2002 and 2001, three and four
customers, respectively represent a total of 40.0% and 63.5%,
respectively, of revenues.  Total accounts receivable balance due
from these three and four customers, respectively amounted to
approximately $95,200 and $409,000, respectively, as of December
31, 2002 and 2001.


(14)   Related Party Transactions:

The Company has a loan from an affiliate of one of its
stockholders.  Included in interest expense is accrued interest
of $4,971, which was unpaid and was added to the outstanding
balance of the line of credit.  (See Notes 5 and 7.)

During 2002, the Company had a revolving loan made available by
an affiliate of one of its stockholders.  As of December 31, 2002
the loan had been retired and all outstanding balances, principle
and accrued interest converted into equity (see Note 7).  The
Company paid $61,548 in interest and $12,000 in management fees
during 2002.  (See Note 5.)


(15)   Severance Agreement:

In December 2002, the Company entered into a severance agreement
with a former officer.  Under the agreement, the former officer
receives monthly severance pay and health benefits for a period
of 5 months beginning December 2002.  The Company paid $9,583 to
the former officer in 2002.


(16)   Subsequent Event:

In March 2003, the Company entered into a consulting agreement
with the former chief technology officer of the Company.  The
agreement calls for compensation of $20,000 per month for
six months.


                              F-23

<PAGE>

CERTIFICATION

In connection with the Annual Report of e-Perception, Inc. and
Subsidiary (the "Company") on Form 10-KSB for the year ending
December 31, 2002 as filed with the Securities and Exchange Commission
on the date hereof (the "Report"), we, Joseph Flynn, Chief Executive
Officer and James P. Stapleton Principal Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the
best of my knowledge:

(1)   The Report fully complies with the requirements of section
      13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in
      all material respects the financial condition and results of
      the Company.

Date:  April 15, 2003
                             By: /s/ Joseph Flynn
                                -------------------------------------
                                Joseph Flynn, Chief Executive Officer

                             By: /s/ James P. Stapleton
                                -------------------------------------
                               James P. Stapleton, Principal Financial
                               Officer

<PAGE>


CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
2002

I, Joseph Flynn, certify that:

1. I have reviewed this Annual Report on Form 10-KSB of e-Perception,
Inc. (the "Registrant");

2. Based on my knowledge, this Annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this Annual Report;

3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this Annual Report;

4. e-Perceptions' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14) for the registrant and have:
a)   designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within
those entities, particularly during the period in which this
annual report is being prepared;
b)   evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this Annual Report (the "Evaluation Date"); and
c)   presented in this Annual Report my conclusions about the
effectiveness of the disclosure controls and procedures based on
my evaluation as of the Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a)   all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b)   any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. I have indicated in this annual report whether there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of
my most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Dated:  April 15, 2003


 /s/ Joseph Flynn
--------------------
Joseph Flynn,
Chief Executive Officer
(Principal Executive Officer)


<PAGE>


CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
2002

I, James P. Stapleton, certify that:

1. I have reviewed this Annual Report on Form 10-KSB of e-Perception,
Inc. (the "Registrant");

2. Based on my knowledge, this Annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this Annual Report;

3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this Annual Report;

4. e-Perceptions' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14) for the registrant and have:
a)   designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to me by others within
those entities, particularly during the period in which this
annual report is being prepared;
b)   evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this Annual Report (the "Evaluation Date"); and
c)   presented in this Annual Report my conclusions about the
effectiveness of the disclosure controls and procedures based on
my evaluation as of the Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a)   all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b)   any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. I have indicated in this annual report whether there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of
my most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Dated:  April 15, 2003


 /s/ James P. Stapleton
--------------------------
James P. Stapleton,
Chief Financial Officer
(Principal Financial Officer)