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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 _______________

                                   FORM 10-K/A
                                 Amendment No. 1

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

                   For the fiscal year ended December 31, 2002
                                       OR
     [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

           For the transition period from ____________ to ____________

                        Commission File Number 000-25781
                                 _______________

                              NET PERCEPTIONS, INC.
             (Exact Name of Registrant as Specified in its Charter)
                                 _______________

                 Delaware                                    41-1844584
       (State or Other Jurisdiction                       (I.R.S. Employer
     of Incorporation or Organization)                   Identification No.)

7700 France Avenue South, Edina, Minnesota                     55435
 (Address of Principal Executive Offices)                    (Zip Code)

                                 (952) 842-5000
              (Registrant's telephone number, including area code)
                                 _______________

                    Securities registered pursuant to Section
                               12(b) of the Act:

          Title of each class Name of each exchange on which registered
                               None Not applicable

           Securities registered Pursuant to Section 12(g) of the Act:

                    Common Stock, par value $.0001 per share
                                (Title of class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).  Yes [  ]  No [X]

The aggregate market value of voting and non-voting stock held by non-affiliates
of the registrant, based upon the last sale price of the registrant's Common
Stock, par value $0.0001 per share, reported on the Nasdaq National Market on
June 30, 2003 was $41,726,354.

As of January 12, 2003, there were outstanding 28,145,338 shares of the
registrant's Common Stock, $0.0001 par value.


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<PAGE>


                                Explanatory Note

         This Amendment No. 1 to the Annual Report on Form 10-K (the "Form
10-K") of Net Perceptions, Inc. (the "Company") for the fiscal year ended
December 31, 2002 is being filed solely for the purpose of including Exhibit
10.12 under Item 15(a)(3), which exhibit was inadvertently omitted from the
Company's original filing of the Form 10-K. In accordance with Rule 12b-15
under the Securities Exchange Act of 1934 (the "Exchange Act"), the complete
text of Item 15(a)(3) as amended is set forth herein. In addition, in
connection with the filing of this Amendment No. 1 and pursuant to Rule
12b-15, the Company is including a currently dated certification required by
Rules 13a-14(a) and 15d-14(a) under the Exchange Act. The remainder of the
Form 10-K is unchanged and is not reproduced in this Amendment No. 1. This
Amendment No. 1 speaks as of the original filing date of the Form 10-K and
does not reflect events occurring after the filing of the original Form 10-K,
or modify or update the disclosures therein in any way other than as required
to reflect the amendment set forth below.










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<PAGE>


                                    PART IV

   ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)
3. Exhibits

  Exhibit
  Number                                Description
  -------        --------------------------------------------------------------
    3.1(a)       Amended and Restated Certificate of Incorporation(1).
    3.1(b)       Certificate of Amendment to the Amended and Restated
                 Certificate of Incorporation (2).
    3.2          Amended and Restated Bylaws as amended through April 18,
                 2001(4).
    4.1          Amended and Restated Investor Rights Agreement, dated
                 December 18, 1997, among Net Perceptions, Inc. and the
                 investors and founders named therein, as amended (1).
    4.2          Specimen common stock certificate (1).
    4.3          Specimen common stock certificate (including Rights Agreement
                 Legend) (5).
    4.4          Rights Agreement between Net Perceptions,  Inc. and Wells
                 Fargo Bank Minnesota, as Rights Agent (6).
    4.5          Form of Certificate of Designation of Series A Junior
                 Participating Preferred Stock (attached as Exhibit A to the
                 Rights Agreement filed as Exhibit 4.4 hereto) (6).
    4.6          Form of Rights Certificate (attached as Exhibit B to the
                 Rights Agreement filed as Exhibit 4.4 hereto) (6).
    10.1*        Form of Indemnification Agreement entered into between Net
                 Perceptions, Inc. and its directors and officers (1).
    10.2*        1996 Stock Plan (1).
    10.3*        1999 Equity Incentive Plan (1).
    10.4*        Amended and Restated 1999 Non-Employee Director Option Plan,
                 as amended through April 2, 2001 (4).
    10.5*        Employee Stock Purchase Plan (1)
    10.6*        Knowledge Discovery One, Inc. 1996 Stock Option/Stock Issuance
                 Plan (7).
    10.7         Office Lease Agreement between DRF Holding LLC and Net
                 Perceptions,  Inc. dated April 5, 2000 (8).
    10.8*        2000 Stock Plan (3).
    10.9*        Change in Control Severance Plan and Summary Plan Description
                 (1).
    10.10*       Employment Agreement, dated as of May 24, 2001, between Net
                 Perceptions, Inc. and Donald C. Peterson (5).
    10.11*       Severance Agreement, dated as of November 9, 2001, between
                 Net Perceptions, Inc. and Thomas M. Donnelly(9).
    10.12+       Full Recourse Secured Promissory Note and Security Agreement,
                 dated December 7, 2000, entered into by Thomas M. Donnelly in
                 favor of Net Perceptions, Inc.
    21.1         List of Subsidiaries(9).
    31+          Certification of Principal Executive Officer and Principal
                 Financial Officer required by Rule 13a-14(a) or Rule
                 15d-14(a) of the Securities Exchange Act of 1934, as adopted
                 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

-------------------------------------------------------------------------------
+        Filed herewith.
*        Represents a management contract or compensatory plan or arrangement.

(1)      Incorporated by reference to Net Perceptions' Registration Statement on
         Form S-1 (Registration No. 333-71919).

(2)      Incorporated by reference to Net Perceptions' Annual Report on Form
         10-K for the Fiscal Year Ended December 31, 2002 (File No. 000-25781)
         filed with the Commission on March 26, 2003.

(3)      Incorporated by reference to Net Perceptions' Quarterly Report on
         Form 10-Q for the Quarter Ended June 30, 2000 (File No. 000-25781).

(4)      Incorporated by reference to Net Perceptions' Quarterly Report on
         Form 10-Q for the Quarter Ended March 31, 2001 (File No. 000-25781).

(5)      Incorporated by reference to Net Perceptions' Quarterly Report on
         Form 10-Q for the Quarter Ended June 30, 2001 (File No. 000-25781).

(6)      Incorporated by reference to Net Perceptions' Registration Statement
         on Form 8-A filed June 6, 2001 (File No. 000-25781).

(7)      Incorporated by reference to Net Perceptions' Registration Statement
         on Form S-1 (Registration No. 333-31230).

(8)      Incorporated by reference to Net Perceptions' Quarterly Report on
         Form 10-Q for the Quarter Ended March 31, 2000 (File No. 000-25781).

(9)      Incorporated by reference to Net Perceptions' Annual Report on Form
         10-K for the Fiscal Year Ended December 31, 2001 (File No.
         000-25781).


<PAGE>


                                   SIGNATURES

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

                                        NET PERCEPTIONS, INC.

                                        By: /s/ Thomas M. Donnelly
                                          -----------------------------------
                                        Thomas M. Donnelly
                                        President and Chief Financial Officer

Date: January 22, 2004

<PAGE>


                                                            Exhibit 10.12



                              NET PERCEPTIONS, INC.
          FULL RECOURSE SECURED PROMISSORY NOTE AND SECURITY AGREEMENT

                                ("RECOURSE NOTE")


$300,000.00                                             Date: December 7, 2000
-----------                                             ----------------------

         FOR VALUE RECEIVED, the undersigned, Thomas M. Donnelly (the
"Borrower"), hereby promises to pay to Net Perceptions, Inc., a Delaware
corporation (the "Company"), or to the legal holder of this Recourse Note at
the time of payment, in lawful money of the United States of America the
principal sum of Three Hundred Thousand Dollars ($300,000.00), or such lesser
amount as shall have been advanced by the Company to the Borrower pursuant to
the letter agreement by the Company in favor of the Borrower dated December 7,
2001 (the "Loan Commitment Letter") and be outstanding hereunder (the
"Principal Sum"). The Borrower also agrees to pay interest (computed on the
basis of a 365 or 366 day year, as the case may be) on any portion of the
Principal Sum outstanding until the entire Principal Sum has been paid in
full, at an annual rate equal to 8% per annum; provided, however, that in no
event shall such interest be charged to the extent it would violate any
applicable usury law. The obligations represented by this Recourse Note shall
be with full recourse to the Borrower.

         The proceeds received by the Borrower shall be used solely to pay the
federal income tax owed by the Borrower as a result of the Borrower's exercise
on March 22, 2000 of an option to purchase shares of the Company's common
stock, par value $.0001 per share (the "Common Stock"), 33,000 of which shares
are vested as of the date hereof (such vested shares being hereinafter
referred to as the "Pledged Securities"). As provided in paragraph 5 hereof,
the Pledged Securities are being pledged to secure the payment of this
Recourse Note.

         This Recourse Note is subject to the following further terms and
conditions:

         1. Payment Upon Maturity. The Principal Sum then outstanding and all
accrued interest thereon shall become due and payable on the third anniversary
of the date that the Company first advances funds to the Borrower pursuant to
the Loan Commitment Letter (such date being referred to herein as the "Loan
Advancement Date" and such third anniversary being referred to as the
"Maturity Date"). If a Maturity Date is a Saturday, Sunday or legal holiday,
then such payment shall be made on the next succeeding business day.

         2. Payment and Prepayment. All payments and prepayments of the
Principal Sum of and accrued interest on this Recourse Note shall be made to
the Company or its order, or to the legal holder of this Recourse Note or such
holder's order, in lawful money of the United States of America at the
principal offices of the Company (or at such other place as the holder hereof
shall notify the Borrower in writing). The Borrower may, at his option, prepay
this Recourse Note in whole or in part at any time or from time to time
without penalty or premium. Any prepayments of any portion of the Principal
Sum of this Recourse Note shall be accompanied by payment of all interest
accrued but unpaid on the portion of Principal Sum so repaid. Upon full and
final payment of the Principal Sum of and interest accrued on this Recourse
Note, it shall be surrendered to the Borrower and the Pledged Securities shall
be released. From the date of this Recourse Note through June 30, 2001, any
and all dividends received by the Borrower in respect of the Pledged
Securities, and any and all proceeds received by the Borrower upon the sale of
any shares of Common Stock, up to a total of 33,000 shares (adjusted
appropriately for any stock split, combination or the like), shall immediately
be paid to the Company in prepayment of this Recourse Note.

         3. Acceleration of Repayment. Upon (i) the Borrower's voluntary
termination of employment with the Company or (ii) the Borrower's termination
of employment with the Company for Cause (as defined below), the holder of
this Recourse Note may at any time thereafter declare, by written notice given
to the Borrower as provided in paragraph 6 hereof, the entire outstanding
Principal Sum to be immediately due and payable, whereupon such Principal Sum,
and any accrued and unpaid interest thereon, shall become due and payable
without presentment, demand, protest, notice of dishonor and all other demands
and notices of any kind, all of which are hereby expressly waived. For
purposes of this Recourse Note, termination for Cause shall mean termination
of employment upon the Borrower's negligent or willful engagement in
misconduct which is materially injurious to the Company.

         4. Loan Forgiveness.

            (a) For each year that the Borrower remains continuously employed
by the Company from the Loan Advancement Date through the third anniversary of
such date, thirty-three and one-third percent (33 1/3%) of the original
Principal Sum and accrued interest thereon shall be forgiven and deemed for
all purposes no longer to be owed or outstanding.

            (b) If (i) the Borrower's employment with the Company is terminated
other than voluntarily by the Borrower or by the Company for Cause or (ii)
there is a Change in Control (as defined below) of the Company, then all of
the Principal Sum then outstanding and accrued interest thereon shall be
forgiven and deemed for all purposes to be no longer owed or outstanding. For
purposes of this Recourse Note, a Change in Control of the Company means (i)
the consummation of a merger or consolidation of the Company with or into
another entity or any other corporate reorganization, if more than 50% of the
combined voting power of the continuing or surviving entity's securities
outstanding immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders of the Company
immediately prior to such merger, consolidation or other reorganization or
(ii) the sale, transfer or other disposition of all or substantially all of
the Company's assets.

         5. Grant of Security Interest.

            (a) As security for the full and punctual payment of the Principal
Sum and accrued interest on this Recourse Note when due and payable (whether
upon stated maturity, by acceleration or otherwise), the Borrower hereby
grants and pledges a continuing lien on and security interest in, and, as a
part of such grant and pledge, hereby pledges, assigns, transfers and conveys
to the Company as collateral security, the Pledged Securities and the proceeds
of any and all dividends and other distributions made in respect of the
Pledged Securities (collectively, the "Collateral").

            (b) The Borrower understands and agrees that unless and until the
Borrower has made payment in full of the Principal Sum and accrued interest on
this Recourse Note, the Borrower may not sell, transfer or otherwise dispose
of any of the Collateral. The Borrower will defend the Company's right, title
and interest in and to the Collateral against the claims and demands of all
other persons.

            (c) Concurrently with making this Recourse Note, the Borrower has
delivered to the Company the certificates representing the Pledged Securities,
together with appropriate undated stock powers duly executed in blank for the
Pledged Securities and the Borrower agrees to deliver, if necessary or
appropriate, additional undated stock powers duly executed in blank for the
Collateral from time to time hereafter.

            (d) So long as the Borrower has not defaulted in the timely payment
of principal and interest hereunder (a "Default"), the Borrower shall be
entitled to vote the Pledged Securities and to give all consents, waivers and
ratifications in respect of the Pledged Securities. Upon the occurrence of a
Default, all voting and other consensual rights of the Borrower in the Pledged
Securities shall cease and may be exercised by the Company.

            (e) Upon the occurrence of a Default, the Company shall have and may
exercise all rights and remedies afforded to a secured party under the
Delaware Uniform Commercial Code applicable thereto, and have the right to
retain the Collateral in partial or full satisfaction of the Borrower's
obligations under this Recourse Note in accordance with the provisions of the
Delaware Uniform Commercial Code, with the Borrower remaining fully liable for
any deficiency.

            (f) The Borrower agrees that at any time and from time to time upon
the written request of the Company, the Borrower will execute and deliver such
further documents and do or cause to be done such further acts and things as
the Company may reasonably request in order to effect the purposes of this
Recourse Note and the grant of the security interest hereunder.

         6. Notice. For the purposes of this Recourse Note, notices, demands
and all other communications provided for herein shall be in writing and shall
be deemed to have been duly given when delivered or (except as specified
below) five business days after being mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:

                  If to the Borrower:

                           Thomas M. Donnelly
                           6491 Nez Perce Road
                           Chanhassen, Minnesota  55317

                  If to the Company:

                           Net Perceptions, Inc.
                           7700 France Avenue South
                           Edina, Minnesota 55435
                           Attn: Steven J. Snyder

or to such other address as the Borrower or the Company (or other holder of
this Note) shall have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

         7. Miscellaneous.

            (a) No delay or failure by the Company or the holder of this
Recourse Note in the exercise of any right or remedy shall constitute a waiver
thereof, and no single or partial exercise by the holder hereof of any right or
remedy shall preclude other or future exercise thereof or the exercise of any
other right or remedy.

            (b) The headings contained in this Recourse Note are for reference
purposes only and shall not affect in any way the meaning or interpretation of
the provisions hereof.

            (c) This Recourse Note may be amended if in writing and signed by
the Borrower and the Company.

            (d) Nothing in this Recourse Note shall confer upon the Borrower
the right to continue in the employment of the Company or any of its affiliates
or affect any rights which the Company may have to terminate the employment of
the Borrower.

            (e) The provisions of this Recourse Note shall be governed by and
construed in accordance with laws of the State of Delaware.

         IN WITNESS WHEREOF, this Recourse Note has been duly executed and
delivered to the Company by the Borrower on the date first above written.


                                            BORROWER


                                            /s/ Thomas M. Donnelly
                                            ----------------------------
                                            Thomas M. Donnelly

<PAGE>



                                                                 Exhibit 31


     Certification of Principal Executive Officer and Principal Financial
    Officer Required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
                                 Act of 2002



I, Thomas M. Donnelly, certify that:

1. I have reviewed this annual report on Form 10-K/A of Net Perceptions, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:

         (a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under my supervision, 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 report is being prepared;

         (b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

         (c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

5. I have disclosed, based on my most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):

         (a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         (b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
control over financial reporting.




Date:  January 22, 2004

                                           /s/ Thomas M. Donnelly
                                           -----------------------------------
                                               Thomas M. Donnelly
                                               President and Chief Financial
                                               Officer
<PAGE>


                                 EXHIBIT INDEX

  Exhibit
  Number                                Description
                 --------------------------------------------------------------
    3.1(a)       Amended and Restated Certificate of Incorporation(1).
    3.1(b)       Certificate of Amendment to the Amended and Restated
                 Certificate of Incorporation(2).
    3.2          Amended and Restated Bylaws as amended through April 18,
                 2001(4).
    4.1          Amended and Restated Investor Rights Agreement, dated
                 December 18, 1997, among Net Perceptions, Inc. and the
                 investors and founders named therein, as amended (1).
    4.2          Specimen common stock certificate (1).
    4.3          Specimen common stock certificate (including Rights Agreement
                 Legend) (5).
    4.4          Rights Agreement between Net Perceptions, Inc. and Wells
                 Fargo Bank Minnesota, as Rights Agent (6).
    4.5          Form of Certificate of Designation of Series A Junior
                 Participating Preferred Stock (attached as Exhibit A to the
                 Rights Agreement filed as Exhibit 4.4 hereto) (6).
    4.6          Form of Rights Certificate (attached as Exhibit B to the
                 Rights Agreement filed as Exhibit 4.4 hereto) (6).
    10.1*        Form of  Indemnification  Agreement entered into between Net
                 Perceptions,  Inc. and its directors and officers (1).
    10.2*        1996 Stock Plan (1).
    10.3*        1999 Equity Incentive Plan (1).
    10.4*        Amended and Restated 1999 Non-Employee Director Option Plan, as
                 amended through April 2, 2001 (4).
    10.5*        Employee Stock Purchase Plan (1)
    10.6*        Knowledge Discovery One, Inc. 1996 Stock Option/Stock Issuance
                 Plan (7).
    10.7         Office Lease Agreement between DRF Holding LLC and Net
                 Perceptions, Inc. dated April 5, 2000 (8).
    10.8*        2000 Stock Plan (3).
    10.9*        Change in Control Severance Plan and Summary Plan
                 Description (1).
    10.10*       Employment Agreement, dated as of May 24, 2001, between Net
                 Perceptions, Inc. and Donald C. Peterson (5).
    10.11*       Severance Agreement, dated as of November 9, 2001, between
                 Net Perceptions, Inc. and Thomas M. Donnelly(9).
    10.12+       Full Recourse Secured Promissory Note and Security Agreement,
                 dated December 7, 2000, entered into by Thomas M. Donnelly in
                 favor of Net Perceptions, Inc.
    21.1         List of Subsidiaries(9).
    31+          Certification of Principal Executive Officer and Principal
                 Financial Officer Required by Rule 13a-14(a) or Rule
                 15d-14(a) of the Securities Exchange Act of 1934, as adopted
                 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

------------------------------------------------------------------------------
+        Filed hereweith.
*        Represents a management contract or compensatory plan or arrangement.

(1)      Incorporated by reference to Net Perceptions' Registration Statement on
         Form S-1 (Registration No. 333-71919).

(2)      Incorporated by reference to Net Perceptions' Annual Report on Form
         10-K for the Fiscal Year Ended December 31, 2002 (File No. 000-25781)
         filed with the Commission on March 26, 2003.

(3)      Incorporated by reference to Net Perceptions' Quarterly Report on
         Form 10-Q for the Quarter Ended June 30, 2000 (File No. 000-25781).

(4)      Incorporated by reference to Net Perceptions' Quarterly Report on
         Form 10-Q for the Quarter Ended March 31, 2001 (File No. 000-25781).

(5)      Incorporated by reference to Net Perceptions' Quarterly Report on
         Form 10-Q for the Quarter Ended June 30, 2001 (File No. 000-25781).

(6)      Incorporated by reference to Net Perceptions' Registration Statement
         on Form 8-A filed June 6, 2001 (File No. 000-25781).

(7)      Incorporated by reference to Net Perceptions' Registration Statement
         on Form S-1 (Registration No. 333-31230).

(8)      Incorporated by reference to Net Perceptions' Quarterly Report on
         Form 10-Q for the Quarter Ended March 31, 2000 (File No. 000-25781).

(9)      Incorporated by reference to Net Perceptions' Annual Report on Form
         10-K for the Fiscal Year Ended December 31, 2001 (File No.
         000-25781).