SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                                   (Mark One)

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 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: 0-28123

                               eCHAPMAN, INC.
                 (Name of Small Business Issuer in Its Charter)
                 ----------------------------------------------

          MARYLAND                                              52-2184621
-------------------------------                              -------------------
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

401 EAST PRATT STREET, SUITE 2800, BALTIMORE, MARYLAND             21202
------------------------------------------------------           ----------
(Address of Principal Executive Offices)                         (Zip Code)


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

      Securities registered pursuant to Section 12(b) of the Exchange Act:
    No Securities registered pursuant to Section 12(b) of the Exchange Act:

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

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

Check if disclosure of delinquent  filers pursuant to Item 405 of Regulation S-B
is not contained  herein,  and no disclosure  will be contained,  to the best of
registrant's   knowledge,   in  definitive   proxy  or  information   statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB.                                                            [X]

The  issuer's  revenues  for its most  recent  fiscal year were:  $ 5,107,000

The aggregate market value of the voting stock and non-voting common equity held
by non-affiliates computed by reference to the average bid price of such common
equity on February 28, 2003 was $368,433.

APPLICABLE ONLY TO CORPORATE REGISTRANTS The number of outstanding shares of
Common Stock of the registrant as of February 28, 2002 was 12,281,096.
Transitional Small Business Disclosure Format (check one). Yes [ ] No [X]


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                                TABLE OF CONTENTS






<TABLE>
<CAPTION>

                                                                                                          PAGE
                                                                                                           ----
<S>        <C>                                                                                              <C>
Part I ......................................................................................................3
Item 1.    Description Of Business ..........................................................................3
Item 5a.   Risk Factors ....................................................................................12
Item 6.    Management's Discussion And Analysis Of Financial Condition And Results Of Operations ...........15
Item 7.    Financial Statements ............................................................................21
           Other Information Previously Omitted From Echapman's Proxy Statement Pursuant To Securities
           Exchange Act Of 1934, As Amended, Release No. 34-45589 ..........................................22
Item 13.   Exhibits List And Reports On Form 8-K ........................................................23-28



</TABLE>



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

                                        2

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

                                     GENERAL

eChapman (eChapman) is a strategically integrated financial service organization
designed to provide innovative financial service offerings and asset management
solutions. eChapman brings together the financial services capabilities of The
Chapman Co., Chapman Capital Management, Inc. and The Chapman Insurance Agency,
Inc., . Effective June 20, 2000, Chapman Holdings, Inc. (CHI), Chapman Capital
Management Holdings, Inc. (CCMHI) and subsidiary and Chapman Insurance Holdings,
Inc. (CIH) and subsidiary merged into separate wholly owned subsidiaries of
eChapman (collectively, the Company).

                                        3

<PAGE>


                                    STRATEGY

Our management team has recognized the broad economic, market and sector
challenges faced by the U.S. economy during calendar year 2002. Our online
brokerage operation is symbolic and reflective of the operating climate. During
this period, several portals have discontinued operations and others
have merged with similar web sites in order to achieve economies of scale and
continue operations. Our on-line strategy and projected internet marketing
strategy, subject to broader market forces has been reevaluated to be in line
with current industry demand. As a consequence of this reevaluation, we have
discontinued operations in both Chapman Network, Inc. and Chapman On Line. This
change will permit us to focus our resources on our core businesses of
investment management, investment banking and brokerage.

              SECURITIES BROKERAGE AND INVESTMENT BANKING SERVICES

BROKERAGE SERVICES

The Chapman Co. is registered as a broker-dealer with the SEC and in 50 states,
the District of Columbia, and Puerto Rico and is a member firm of the NASD. The
Chapman Co. provides brokerage services to institutional and retail clients.

The Chapman Co. charges commissions to these clients for executing buy and sell
orders for securities on national and regional exchanges and in the
over-the-counter market. The Chapman Co.'s primary source of revenue for its
brokerage business has historically been commissions generated from
institutional brokerage. The Chapman Co.'s institutional clients include
investment managers, corporate retirement plans and municipal retirement plan
sponsors. The Chapman Co. maintains floor broker relationships on the New York
Stock Exchange, and executes buy and sell orders in the over-the-counter
markets. Approximately 14.79% of our revenue during the year ended December 31,
2002 was derived from our brokerage business.

The Chapman Co. clears all transactions for its brokerage customers on a
fully-disclosed basis with its clearing agent, which carries and clears all
customer securities accounts. The clearing agent may lend funds to our brokerage
customers through the use of margin credit. These loans will be made to
customers on a secured basis, with the clearing agent maintaining collateral in
the form of salable securities, cash or cash equivalents. Under the terms of our
agreement with the clearing agent, in the event that customers fail to pay for
their purchases, to supply the securities that they have sold, or to repay funds
they have borrowed, we would be obligated to indemnify the clearing agent for
any resulting losses.

The Chapman Co. also participates in fixed income secondary market trading in
government securities primarily for fixed income investment managers, municipal
treasurers and other investment professionals. This business is done on a
competitive basis where The Chapman Co. acts as a broker. Approximately 5.64% of
our revenue during the year ended December 31, 2002 was derived from secondary
market trading.



The Chapman Co.'s trading activities involve the purchase, sale or short sale of
securities as a principal, and, accordingly, involve risks of a change in market
price of these securities and of a decrease in the liquidity of markets, which
can limit our ability to sell securities purchased or to purchase securities
sold in such transactions.

The stock of eChapman held by The Chapman Co. in its market making inventory is
recorded in the equity section of our balance sheet at cost like treasury stock.
The Chapman Co. experienced a gain on trading of $ 40,000 for the year ended
December 31, 2002 and a gain of $50,000 for the year December 31, 2001. As of
March 11, 2002, The Chapman Company dicontinued making markets in equity
securities.

                                        4

<PAGE>


GOVERNMENT FINANCE

The Chapman Co. participates in the tax-exempt public finance market and has
managed, primarily as co-manager, more than 500 transactions in 23 states and
the District of Columbia, including approximately 51 transactions in the past
year. More than half of the total dollar amount of these transactions has been
with jurisdictions located in California, Pennsylvania, Mississippi and
Tennessee.

Approximately 4.87% of our revenue during the year ended December 31, 2002 was
derived from management fees, financial advisory fees and selling concessions in
public finance transactions. The Chapman Company is in the process of revamping
its approach to the public finance business. Our goal is to be more cost
effective, customer focused, and to moderate the volatility of this business.


INVESTMENT ADVISORY SERVICES

Our investment advisory subsidiary, Chapman Capital Management, liquidated two
mutual funds it had managed: the DEM Equity Fund and The Chapman U.S. Treasury
Money Fund, each a portfolio of The Chapman Funds, Inc., an open-end management
investment company registered under the Investment Company Act of 1940.

Chapman Capital Management provides investment advisory services to separate
accounts under individual investment advisory agreements. Chapman Capital
Management manages equity and debt portfolios with varied investment objectives
including long term capital appreciation and current income.

As January 1 , 2003, Chapman Capital Management managed approximately $92
million in assets for separate accounts.

                                        5

<PAGE>


MARKETING AND CUSTOMER SERVICE

Chapman Capital Management's marketing strategy focuses on distribution of its
separate account and proprietary investment products through a variety of
channels. We seek to market our investment products to public pension fund
sponsors, defined contribution plan distributors, and high net worth
individuals. Our marketing strategy encompasses distribution of our proprietary
products through separate account assignments, and wholesale agreements with
financial intermediaries. In 2002 Chapman Capital Managment terminiated the
Domestic Emerging Market-minority Equity Trust, DEM Equity Fund, and The Chapman
U.S. Treasury Fun. These products represent Chapman proprietary [JOE]

Chapman Capital Management targets its marketing efforts to the various types of
customers that use its investment advisory and asset management services.
Chapman Capital Management's separate accounts are typically large institutional
investors. Chapman Capital Management markets to these accounts through customer
support activities and personal sales efforts by officers of Chapman Capital
Management.

Chapman Capital Management's proprietary investment products are distributed by
The Chapman Co. Chapman Capital Management offers its proprietary investment
funds to banks, insurance companies, providers of 401(k) deferred compensation
plans and other institutions for resale to their customers. Chapman Capital
Management provides support to The Chapman Co. in marketing to institutional
resellers and to the institutional resellers own retail sales forces.


ANNUITY PRODUCTS

Our insurance subsidiary, The Chapman Insurance Agency, sells annuity products
on an agency basis for insurance underwriters however, Chapman Insurance Agency
has not had significant operations to date. Chapman Insurance Agency currently
offers only variable annuities. Policyholders are able to choose among several
available separate account options offered by the insurance underwriter and may
transfer monies between the various annuity options on a tax-deferred basis.

The Chapman Insurance Agency sells products on an agency basis only, meaning
that it sells insurance products underwritten by other insurance companies.

                                        6

<PAGE>


ON-LINE TRADING

Chapman On-Line, Inc. is registered as a broker-dealer with the SEC and in the
District of Columbia, Maryland, Virginia and South Carolina and is a member firm
of the NASD. Chapman On-Line provides brokerage services to retail clients
through the eChapman web site. Chapman On-Line has recently terminated all of
it's state registrations.

Chapman On-Line carried all transactions for its brokerage customers on a
fully-disclosed basis with its clearing agent, which carried and cleared all
customer securities accounts. The clearing agent may lend funds to our brokerage
customers through the use of margin credit. These loans are made to customers on
a secured basis, with the clearing agent maintaining collateral in the form of
salable securities, cash or cash equivalents. Under the terms of our agreement
with the clearing agent, in the event that customers fail to pay for their
purchases, to supply the securities that they have sold, or to repay funds they
have borrowed, we would be obligated to indemnify the clearing agent for any
resulting losses.

Chapman On-Line charged commissions to these clients for executing buy and sell
orders for securities on national and regional exchanges and in the
over-the-counter market. Chapman On-Line commenced operations in April 2000 and
was not a significant source of our revenue during the year ended December 31,
2002. The on-line brokerage market has been impacted by uncertantity in the
market, the effects of September 11, and the economic recession. The Firm has
reevaluated its on-line brokerage strategy and has discontinued operations in
on-line brokerage.


                              GOVERNMENT REGULATION

SECURITIES BROKERAGE AND INVESTMENT BANKING SERVICES

The securities business is subject to extensive and frequently changing federal
and state laws and substantial regulation under such laws by the SEC and various
state agencies and self-regulatory organizations, such as the NASD.

The Chapman Co. and Chapman On-Line are each registered as broker-dealers with
the SEC and are member firms of the NASD. Much of the regulation of broker-
dealers has been delegated to self-regulatory organizations, principally the
NASD, which has been designated by the SEC as The Chapman Co.'s primary
regulator. The NASD adopts rules, which are subject to approval by the SEC, that
govern its members and conducts periodic examinations of member firms'
operations. Securities firms are also subject to regulation by state securities
administrators in those states in which they conduct business. The Chapman Co.
is registered as a broker-dealer in 50 states and the District of Columbia and
Puerto Rico. Chapman On-Line has terminated its registrations.

Broker-dealers are subject to regulations which cover all aspects of the
securities business, including:

o Sales methods and supervision

o Trading practices among broker-dealers

o Use and safekeeping of customers' funds and securities

o Record keeping

o Conduct of directors, officers, and employees.

                                        7

<PAGE>


The principal purpose of regulation and discipline of broker-dealers is the
protection of customers and the integrity of the securities markets. Additional
legislation, changes in rules promulgated by the SEC and self-regulatory
organizations, or changes in the interpretation or enforcement of existing laws
and rules, may directly affect the mode of operation and profitability of
broker-dealers.

The SEC, self-regulatory organizations and state securities commissions may
conduct administrative proceedings which can result in censure, fines, the
issuance of cease-and-desist orders or the suspension or expulsion of a
broker-dealer, its officers or employees.

The Chapman Co.'s mutual fund distribution business is subject to extensive
regulation as to its duties, affiliations, conduct and limitations on fees under
the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the
regulations of the NASD. The NASD has prescribed rules with respect to maximum
commissions, charges and fees related to investment in any mutual fund
registered under the 1940 Act.

As registered broker-dealers and member firms of the NASD, The Chapman Co. and
Chapman On-Line are subject to the net capital rule of the SEC. The net capital
rule, which specifies minimum net capital requirements for registered
broker-dealers, is designed to measure the general financial integrity and
liquidity of a broker-dealer and requires that at least a minimum part of its
assets be kept in relatively liquid form. Net capital is essentially defined as
net worth, which consists of assets minus liabilities, plus qualifying
subordinated borrowings less certain mandatory deductions that result from
excluding assets not readily convertible into cash and from valuing certain
other assets, such as a firm's positions in securities, conservatively. Among
these deductions are adjustments in the market value of securities to reflect
the possibility of a market decline prior to disposition.

The Chapman Co. has elected to compute its net capital under the standard
aggregate indebtedness method permitted by the net capital rule, which requires
that the ratio of aggregate indebtedness to net capital, both as defined, shall
not exceed a 15-to-1 ratio.

Failure to maintain the required net capital may subject a firm to suspension or
expulsion by the NASD, the SEC and other regulatory bodies and ultimately may
require its liquidation.

As of December 31, 2002, The Chapman Co., a subsidiary of eChapman, was in
compliance with the SEC net capital rule and had net capital of $386,000, a net
capital requirement of $250,000 and a ratio of aggregate indebtedness to net
capital of .84 to 1.

INVESTMENT ADVISORY SERVICES

Chapman Capital Management's business is subject to various federal and state
laws and regulations. These laws and regulations are primarily intended to
protect investment advisory clients and stockholders of registered investment
companies. Under these laws and regulations, agencies that regulate investment
advisors have broad administrative powers, including the power to limit,
restrict, or prohibit an advisor from carrying on its business in the event that
it fails to comply with applicable laws and regulations. Possible sanctions that
may be imposed include:

o Suspension of individual employees

o Limitations on engaging in certain lines of business for specified periods of
  time

o Revocation of investment advisor and other registrations

o Censures

o Fines

                                        8

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Chapman Capital Management is registered with the SEC under the Investment
Advisers Act of 1940 and is subject to examination by the SEC. Under Section 206
of the Advisers Act, it is unlawful for any investment advisor to:

o Employ any device, scheme, or artifice to defraud any client or prospective
  client

o Engage in any transaction, practice, or course of business which operates as a
  fraud or deceit upon any client or prospective client

o Engage in any act, practice, or course of business which is fraudulent,
  deceptive or manipulative. The Advisers Act imposes numerous other obligations
  on registered investment advisors including:

        - Fiduciary duties

        - Recordkeeping requirements

        - Operational requirements

        - Disclosure obligations

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

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

The mutual funds managed by Chapman Capital Management are registered with the
SEC under the Investment Company Act, and the sale of shares in these funds has
been registered under the Securities Act. Investment companies such as The
Chapman Funds, Inc. and any future registered investment companies established
and/or advised by Chapman Capital Management, are subject to considerable
substantive regulation. Such companies must comply with periodic reporting
requirements. Proxy solicitations are subject to the general proxy rules as well
as to special proxy rules applicable only to investment companies. Shares of
open-end investment companies, such as the DEM Equity Fund and The Chapman U.S.
Treasury Money Fund, can only be offered at a uniform public offering price
based on the current net asset value per share plus the sales load.

No more than 60% of the directors of registered investment companies can be
interested persons, defined to include, among others, persons affiliated with
the management company or underwriter, and a majority of the directors must not
be affiliated with the underwriter. In the case of investment companies, such as
The Chapman Funds, which have adopted 12b-1 plans for their portfolios in order
to permit these portfolios to pay for distribution expenses, the rules under the
Investment Company Act require that no more than 50% of the fund's directors can
be interested persons.

The advisory agreement must have initially been approved by a majority of the
outstanding shares and, after two years, must be annually approved, either by
the board or by a majority of the outstanding voting shares. The advisory
agreement must be subject to termination upon 60 days notice by the board or by
a majority of the outstanding voting shares.

                                        9

<PAGE>


The underwriting agreement must be annually approved by the board or by a vote
of a majority of the outstanding voting shares, and must provide for automatic
termination in the event of an assignment. With limited exceptions, transactions
between the investment company and an affiliate can be entered into only if
approved by the SEC, after notice and opportunity for hearing, as fair and
equitable.

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

ECOMMERCE AND THE INTERNET

There are currently a limited number of federal or state laws or regulations
that specifically regulate communications or commerce on the Internet. However,
federal and state governments are increasingly asserting an intent to more
actively regulate the Internet. These efforts include attempts to apply existing
laws of general applicability to the Internet, including actions involving:

o User privacy, including sending of unsolicited email or spamming

o Consumer protection to ensure quality products and services and fair dealing

o Media regulation, such as libel and obscenity

                                   COMPETITION

We encounter intense competition in our securities and investment advisory
businesses. Both The Chapman Co. and Chapman Capital Management compete directly
with other larger national securities firms and investment advisors, a
significant number of which have greater capital and other resources, including,
among other advantages, more personnel and greater marketing, financial,
technical and research capabilities. In addition, these firms offer a broader
range of financial services than The Chapman Co. and Chapman Capital Management
and compete not only with The Chapman Co. and Chapman Capital Management and
among themselves but also with commercial banks, insurance companies and others
for retail and institutional clients. This competition has intensified with the
passage of the Gramm-Leach-Bliley Act, which removed barriers to affiliation
between banks, insurance companies and securities firms.

The mutual investment funds managed by Chapman Capital Management are similarly
subject to competition from nationally and regionally distributed funds offering
equivalent financial products with returns equal to or greater than those
offered by Chapman Capital Management's affiliated investment funds. The
investment advisory industry is characterized by relatively low cost of entry
and the formation of new investment advisory entities which may compete directly
with Chapman Capital Management. Chapman Capital Management's ability to
increase and retain assets under management could be materially adversely
affected if client accounts or the Chapman Capital Management's affiliated
mutual funds under-perform specified market benchmarks. Chapman Capital
Management's ability to compete with other investment management firms also
depends, in part, on the relative attractiveness of their investment
philosophies and methods under prevailing market conditions.

Our securities brokerage and investment banking businesses are concentrated in
the securities industry, which is subject to numerous and substantial risks,
particularly in volatile or illiquid markets and in markets influenced by
sustained periods of low or negative economic growth. Such risks include the
risk of losses resulting from:

o Underwriting and ownership of securities

o Trading and principal activities

o Counterparty failure to meet commitments

o Customer fraud

o Employee errors

o Misconduct and fraud (including unauthorized transactions by traders)

o Failures in connection with the processing of securities transactions

                                       10

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In addition, our investment banking revenues may decline in periods of reduced
demand for public offerings or reduced activity in the secondary markets and
when there are reduced spreads on the trading of securities.

                                   TRADEMARKS

We have the right to use the following registered trademarks and common law
trademarks pursuant to our non-exclusive royalty-free Service Mark Licensing
Agreement with Nathan A. Chapman, Jr.:

o Domestic Emerging Markets(R)

o DEM(R)

o C-Eagle Logo(TM)appearing on the front of this prospectus

o DEM Index(TM)

o DEM Profile(TM)

o DEM Universe(TM)

o DEM Community(TM)

o DEM Company(TM)

o DEM Multi-Manager(TM)

o Chapman(TM)

o Chapman Education(TM)

o Chapman Network(TM)

o Chapman Trading(TM)

o Chapman Marketplace(TM)

o Chapman Kids Club(TM)

o eChapman(TM)


                                       11

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We regard our trademarks and other intellectual property as critical to our
success. We rely on trademark law to protect our intellectual property rights.
Despite our precautions, it may be possible for third parties to obtain and use
our intellectual property without authorization. Furthermore, the validity,
enforceability and scope of protection of intellectual property in
Internet-related industries is uncertain and still evolving. The laws of some
foreign countries do not protect intellectual property to the same extent as do
the laws of the United States.

                                    EMPLOYEES

As of February 28, 2003, we had 14 full-time employees, including 10 registered
representatives.

We consider our relationship with our employees to be good. Our future success
will depend on our ability to identify, attract, retain and motivate highly
skilled technical, managerial, sales, marketing and customer service personnel.
Competition for these persons is intense.

ITEM 5A. RISK FACTORS

               WARNING AS TO OUR USE OF FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements concerning eCHAPMAN.
These forward-looking statements are based on the beliefs of our management, as
well as on assumptions made by and information currently available to us at the
time such statements are made. The discussion of our business strategy is not
based on historical facts but is comprised of forward looking statements based
upon numerous assumptions about future conditions, which may ultimately prove to
be inaccurate. When we use words such as anticipate, believe, estimate, intend
and similar expressions in this prospectus, we intend to identify
forward-looking statements. Actual results could differ materially from those
projected in the forward-looking statements as a result of the risk factors set
forth below, the matters set forth or incorporated in this report generally and
economic and business factors, some of which are beyond our control. In
analyzing our company, you should carefully consider, along with other matters
referred to in this report, the risk factors detailed in this Risk Factors
section and throughout this report and future reports issued by our company.

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

                                       12
<PAGE>


WE HAVE RETAINED NEW INDEPENDENT AUDITORS EFFECTIVE MARCH 14, 2002

As a result of eChapman's termination of Arthur Andersen, LLP, eChapman has
retained the accounting firm of Wilkins McNair P.C. to serve as its new
independent auditors. eChapman has a limited history with Wilkins McNair, P.C.
and cannot guarantee that the new independent auditors can adequately fulfill
the needs of eChapman in connection with the preparation of its audited
financial statements.

WE ARE CURRENTLY THE SUBJECT OF A FORMAL NON-PUBLIC INVESTIGATION UNDERTAKEN BY
THE SECURITIES AND EXCHANGE COMMISSION RELATING TO THE INITIAL PUBLIC OFFERING
OF THE COMPANY AND CERTAIN SALES AND RECORD-KEEPING PRACTICES OF THE CHAPMAN
COMPANY.

Although we cannot not express an opinion as to the final outcome of the
Securities and Exchange Commission inquiry, an adverse finding with respect to
the aforementioned investigation could impact the Company's ability to properly
conduct its business and could negatively impact eChapman's results of
operations, financial position, cash flows or changes in shareholders' equity
and share price. The investigation is ongoing.

WE HAVE BEEN DELISTED BY THE NASDAQ FOR FAILURE TO COMPLY WITH THE MINIMUM BID
PRICE REQUIREMENT FOR CONTINUED LISTING AS SET FORTH IN MARKETPLACE RULE 4310.

On August 19, 2002, we received a Nasdaq Staff Determination Letter that the
minimum bid price for eChapman failed to comply with the continued listing
requirements under Marketplace Rule 4310 and that eChapman's common stock,
therefore, would be delistied from the Nasdaq National Market effective on
August 20,2002. Our common stock is now traded on the OTC Bulletin Board. There
is no guarantee that eChapman will be able to sustain an adequate market for its
securities on either the Over-The Counter Bulletin Board or the "Pink sheets". A
listing on either the Over-The Counter Bulletin Board or the " Pink Sheets" will
substantially and materially impair the market that exists for the trade of our
securities, which in turn may have a material adverse effect on eChapman's
results of operations, financial position, cash flows or changes in
shareholders' equity.

MARKET DRIVEN ADJUSTMENTS TO ON-LINE STRATEGY

We intend to limit future investment in our website and Internet business and
focus our resources on our core businesses of investment management, investment
banking and brokerage. In doing so, we will seek to lower our operating expenses
as a percentage of revenue. If we are unsuccessful in lowering our operating
expenses as a percentage of revenue or if our efforts to lower expenses result
in less revenue, our business, results of operations and financial condition may
be materially and adversely affected.

                                       13

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THE CHAPMAN CO. NET CAPITAL VIOLATION

As of December 31, 2002, The Chapman Co., a subsidiary of eChapman, was in
compliance with the SEC net capital rule and had net capital of $386,000, a net
capital requirement of $250,000 and a ratio of aggregate indebtedness to net
capital of .84-to-1.

As of December 31, 2001, The Chapman Co., a subsidiary of eChapman, was in
compliance with the SEC net capital rule and had net capital of $797,000, a net
capital requirement of $250,000 and a ratio of aggregate indebtedness to net
capital of .33-to-1.

As of December 31, 2000, The Chapman Co., a subsidiary of eChapman, had less
than the minimum net capital required to meet the SEC net capital rule. This net
capital deficiency was corrected as of March 8, 2001, at which time The Chapman
Co. was in compliance with the net capital rule and had net capital of $627,000,
a net capital requirement of $250,000 and a ratio of aggregate indebtedness to
net capital of 1.68-to-1. On March 9, 2001, The Chapman Co. filed a notice of
noncompliance with the net capital rule with the SEC and the NASD. The SEC and
NASD have not indicated what, if any, action either may take as a result of The
Chapman Co.'s net capital noncompliance.

LIQUIDITY

To the extent that eChapman's liquid resources and cash provided by operations
are not adequate to meet its operating expenses and capital requirements,
eChapman may need to raise additional capital through loans or equity. There can
be no assurance that eChapman will be able to borrow funds or raise additional
capital.

OUR INVESTMENT ADVISORY SUBSIDIARY IS DEPENDENT ON A FEW MAJOR INVESTMENT
MANAGEMENT CLIENTS, AND IF ANY OF THESE CLIENTS TERMINATED THEIR ADVISORY
ARRANGEMENTS WITH US, OUR ADVISORY FEE REVENUE WOULD BE MATERIALLY REDUCED.

All of Chapman Capital Management's agreements with its advisory clients are
terminable by the client upon short notice (typically 30-60 days prior written
notice).

At December 31, 2001 the DEM-MET Trust had two clients with total assets of $211
million. The DEM-MET Trust was liquidated on February 5, 2002. Chapman Capital
Management, Inc. has terminated all sub-advisor relationships. Our advisory fee
revenue will be reduced by the impact of these withdrawals. Because of the
concentration of our assets under management with a limited number of customers,
our assets under management at any time can fluctuate. If any of our key
investment management clients terminate their advisory arrangements with us or
make substantial withdrawals of their assets under management, our advisory fee
revenue would be materially affected.

VOLATILITY OF BUSINESS

The Company's revenues and operating results may fluctuate from month to month,
quarter to quarter and year to year due to a combination of factors, including
the number of underwriting transactions in which the Company participates,
access to public markets for companies in which the Company has invested as a
principal, the level of institutional and retail brokerage transactions, and
expenses of establishing new business units. The Company's revenues from an
underwriting transaction are recorded only when the underwritten security
commences trading; accordingly, the timing of the Company's recognition of
revenue from a significant transaction can materially affect the Company's
operating results. As a result, the Company could experience losses if demand
for the above transactions declines faster than the Company's ability to change
its cost structure.

In the normal course of operations of an investment manager, clients add
investments to and withdraw investments from the asset portfolio. This activity
is done by clients as they continue to make investment decisions and diversify
their portfolio. The earnings from investment management is effected by the
additions and withdrawals of investments under management.

                                       14

<PAGE>


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

OVERVIEW

eChapman is a strategically integrated financial service organization designed
to provide innovative financial service offerings and asset management
solutions. The initial public offering of common stock of eChapman occurred on
June 15, 2000, and as a result of the mergers, which closed on June 20, 2000,
eChapman indirectly controls The Chapman Co., Chapman Capital Management and The
Chapman Insurance Agency. eChapman's common stock began trading on the NASDAQ
National Market under the symbol ECMN on June 20, 2000, and it commenced
consolidated operations on June 20, 2000.

The Chapman Company is a full service securities brokerage and investment
banking company that engages in corporate and government finance, retail and
institutional brokerage, research and trading. Chapman Capital Management is a
registered investment advisor that acts as financial advisor to separate
accounts, and a family of mutual funds. The Chapman Insurance Agency sells
annuity products on an agency basis.

RESULTS OF OPERATIONS

                            PRO FORMA FINANCIAL DATA

The following audited pro forma consolidated statements of operations are
provided for informational purposes only and do not purport to present the
actual results of operations of eChapman. The audited pro forma consolidated
statements of operations should be read in conjunction with the historical
audited consolidated financial statements of eChapman, including the related
notes, included elsewhere in this document.

The audited pro forma consolidated statement of operations gives effect to the
consolidation of eChapman for the period December 31, 2002 compared to the year
ended December 31, 2001. Because the eChapman, Chapman Holdings, Chapman Capital
Management Holdings and Chapman Insurance Holdings merger was a merger of
companies under common control, their merger was accounted for similar to a
pooling of interest.

                                       15

<PAGE>


RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>

                                                  eCHAPMAN.COM, INC. AND SUBSIDIARIES
                                     COMBINED AND CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
                                                              (Audited)


                                                         Twelve Months Ended December 31, 2002
                                       -----------------------------------------------------------------
                                                    2002                                2001
                                       -------------------------------      ----------------------------
                                                 Percentage of                      Percentage of
                                          Amounts       Total Revenue        Amounts      Total Revenue
                                       -------------------------------      ----------------------------
<S>                                     <C>                   <C>           <C>                <C>
REVENUE:
Commissions                             $ 2,748,000           53.8%      $  3,702,000         48.8%
Underwriting and management fees            246,000            4.8%           642,000          8.5%
Investment management fees                1,741,000           34.1%         3,779,000         49.8%
Interest, dividends and other income        396,000            7.8%           406,000          5.3%
Gain (loss) on trading                       40,000            0.8%            50,000          0.7%
Loss on investments, net                                       0.0%          (898,000)       (11.8)%
                                        ----------------------------     -----------------------------
     Total revenue                        5,171,000          101.3%         7,681,000        101.2%
Interest expense                             64,000            1.3%            90,000          1.2%
                                        ----------------------------     -----------------------------
     Net revenue                          5,107,000          100.0%         7,591,000        100.0%

OPERATING EXPENSE:
Compensation and benefits                 2,712,000           53.1%         3,851,000         50.7%
Floor brokerage and clearing fees           264,000            5.2%           470,000          6.2%
Management fees                             882,000           17.3%         1,074,000         14.1%
Depreciation and amortization expense       132,000            2.6%         1,884,000         24.8%
Impairment Adjustment                                          0.0%                            0.0%
Other operating expense                   1,614,000           31.6%         4,630,000         61.0%
                                        ----------------------------     -----------------------------
     Total expenses                       5,604,000          109.7%        11,909,000        156.9%
                                        ----------------------------     -----------------------------

Operating loss                             (497,000)          -9.7%        (4,318,000)       (56.9)%
Other income (expense)                            -                        (6,676,000)
                                        ----------------------------     -----------------------------
Net loss                                 $ (497,000)          -9.7%      $(10,994,000)      (144.8)%
                                        ============================     =============================
</TABLE>

                                       16

<PAGE>


PRO FORMA RESULTS OF OPERATIONS

Net revenue decreased $ 2,484,000 or 32.7%, to $ 5,107,000 for the year ended
December 31, 2002 from $ 7,591,000 for the prior comparable period. The decline
in net revenues for the year ended December 31, 2002 reflects weakness in the
overall equity market and the effects of September 11, resulting in a reduction
in assets under management.

Commission revenue decreased by $ 954,000, or 25.8%, to $ 2,748,000 for the year
ended December 31, 2002 from $ 3,702,000 for the prior comparable period. The
decrease was primarily due to an decrease in equity commission activity.
Commission revenue from municipal participation increased $ 408,000, or 29.84%,
to $ 1,774,000 for the year ended December 31, 2002 from $ 1,366,000 for the
prior comparable period. eChapman participated in 51 municipal deals during the
twelve month period ended December 31, 2002 compared to 58 municipal deals in
the prior comparable period. The increase in municipal revenue can be attributed
to larger deal sizes. This increases were partially offset by a decrease in
institutional commission revenue and 12b1 fee commission. Commission revenue
from the sale of institutional brokerage decreased $ 963,000, or 64.59%, to
$ 528,000 for the year ended December 31, 2002 from $ 1,492,000 for the prior
comparable period. 12b1 fee commission decreased $ 37,000, or 63.77%, to
$ 21,000 for the year ended December 31, 2002 from $ 58,000 for the prior
comparable period.

Underwriting and management fee revenue decreased by $ 396,000, or 61.7%, to
$ 246,000 for the year ended December 31, 2002 from $ 642,000 for the prior
comparable period. This decrease was due to shrinkage in the overall equity
market volume. The decrease in underwriting and management fee revenue was due
to a decrease in corporate finance revenue of $ 65,000, or 100%, to $ 0 for the
year ended December 31, 2002 from $ 65,000 for the prior comparable period. This
decreases was also due to a deccrease in management fee revenue of $ 121,000, or
48.94%, to $ 126,000 for the year then ended December 31, 2002 from $ 247,000
for the prior comparable period.

The firm's revenue from its asset management business was impacted by the
ongoing weakness in the equity market and the effect of September 11, resulting
in lower fee revenue for the year ended December 31, 2002 compared to the prior
comparable period. Investment management fee revenue decreased $ 2,038,000, or
53.9%, to $ 1,741,000 for the year ended December 31, 2002 from $ 3,779,000 for
the prior comparable period. The decrease was primarily due to a net decrease of
$ 431.3 million in assets under management to $92 million as of December 31,
2002, from $ 523,3 million as of December 31, 2001.

Interest, dividends and other income decreased by $ 10,000, or 2.5%, to
$ 396,000 for the year ended December 31, 2002 from $ 406,000 for the prior
comparable period. The decrease in interest, dividends and other income was due
to a decrease in interest and dividend revenue.

                                       17

<PAGE>


Total expenses, decreased by $ 6,305,000, or 52.9%, to $ 5,604,000 for the
year ended December 31, 2002 from $ 11,909,000 for the prior comparable period.
The reduction in expenses is the direct result of the cost containment strategy
designed to offset market volatility and position the company for profitable
growth during 2003.

Compensation and benefits decreased by $ 1,139,000, or 29.6%, to $ 2,712,000 for
the year ended December 31, 2002 from $ 3,851,000 for the prior comparable
period. The decrease in compensation and benefits is due to a cost containment
strategy and attrition. As a percentage of total revenue, these expenses were
53.1% and 50.7%, respectively, for the year ended December 31, 2002 and the
prior comparable period. Compensation expense includes salaries and sales
commissions paid to brokers, which varies in relation to changes in commission
revenue.

Floor brokerage and clearing fees decreased by $ 206,000, or 43.8%, to $ 264,000
for the year ended December 31, 2002 from $ 470,000 for the prior comparable
period. The decrease is due to a decline in equity trading resulting from market
volatility.

Management fees, which consist primarily of Chapman Capital Management's
payments to sub-advisors associated with its multi-manager investment product,
the DEM-MET Trust, decreased by $ 192,000, or 17.9%, to $ 882,000 for the year
ended December 31, 2002 from $ 1,074,000 for the prior comparable period. The
decrease in management fee expense largely due to the closing of DEM_MET..

Depreciation and amortization expense decreased by $ 1,752,000, or 93.0% to
$ 132,000 for the year ended December 31, 2002 from $ 1,884,000 for the prior
comparable period. The decrease was due to depreciation for capitalized website
development costs which began during the last quarter of calendar year 2000.
These expenses primarily include merger related amortization.

Other expenses decreased by $ 3,016,000, or 65.1%, to $ 1,614,000 for the year
ended December 31, 2002 from $ 4,630,000 for the prior comparable period. The
decrease was primarily due to a decrease in advertising and promotion expense,
travel expense, and conference and seminar costs. The decrease in these costs is
the result of a change in business strategy.

Excluding the prior period non-cash adjustment of $6,676,000 eChapman realized
an operating loss of $497,000 a decrease of $3,821,000 or 88.5% for the year
ending December 31, 2002 from an operating loss of $4,318,000 for prior
comparable period.

The net loss decreased by $ 10,497,000 or 95.5%, to $ 497,000 for the year
ended December 31, 2002 from $ 10,994,000 for the prior comparable period,
included in prior period is a net non-cash adjustment of $6,676,000 for the
impairment of merger related goodwill.

                                       18

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2002, eChapman had cash and cash equivalents of $ 102,000 and a
$ 558,000 cash deposit held by its clearing agent related to its investment in
proprietary
stock.

With the exception of goodwill and other intangible assets which amount to
$15,257,000 as of December 31, 2002, our assets are reasonably liquid, with a
consisting of cash and cash equivalents, deposits with our clearing
organization, investment securities, and receivables from clients, all of which
fluctuate depending upon the levels of customer business and trading activity.
Receivables from clients turn over rapidly. Both our total assets as well as the
individual components as a percentage of total assets may vary significantly
from period to period because of changes relating to customer demand, economic
and market conditions, and proprietary trading strategies. Our total assets as
of December 31, 2002 were $16,958,000.

                                       19

<PAGE>


The Chapman Co. and Chapman On-Line are subject to the net capital rules of the
SEC. As such, The Chapman Co. and Chapman On-Line are subject to certain
restrictions on the use of capital and their related liquidity.

As of December 31, 2001, eChapman had a subscription stock receivable from its
majority stockholder in the amount of $1,291,000 reserved as an adjustment to
equity.

On July 20, 2001, eChapman purchased the net assets of NetNoir, Inc. This
acquisition, made by a combination of cash and eChapman stock, will enable the
strategic expansion of media distribution by the Chapman Network, Inc.
affiliate.

eChapman's overall capital and funding needs are continually reviewed to ensure
that its capital base can support the estimated needs of the business. These
reviews take into account business needs as well as regulatory capital
requirements. To the extent that eChapman's liquid resources and cash provided
by operations are not adequate to meet its operating expenses and capital
requirements, eChapman may need to raise additional capital through loans or
equity, and may be unable to participate in some brokerage or underwriting
opportunities. There can be no assurance that eChapman will be able to borrow
funds or raise additional equity. Currently, eChapman has no debt obligations.
eChapman does not presently maintain a line of credit or other credit facility
to fund its operations.

INFLATION

We believe the effects of inflation have not had a significant impact on our
results of operations.

NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operation" and elsewhere in this report
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, general economic and business conditions in the
Company's market area, inflation, fluctuations in interest rates, changes in
government regulations, competition and the ability of the Company to implement
its business strategy and other risks discussed in the Company's Registration
Statement on Form SB-2 (File No. 333-90987) as it was declared effective by the
Securities and Exchange Commission, and in this and other reports filed by the
Company.

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

The following discussion and analysis should be read in conjunction with
eChapman's consolidated financial statements and related notes included
elsewhere in this document. The discussion of results, causes and trends should
not be construed to imply any conclusion that such result or trend will
necessarily continue in the future.

Our future operating results are also dependent upon the level of our operating
expenses, which are subject to fluctuation for the following or other reasons,
changes in the level of advertising expenses in response to market conditions,
variations in the level of compensation expense due to among other things,
changes in the employee count and mix, and competitive factors; expenses and
capital costs, such as technology assets, and research and development, incurred
to maintain and enhance our operating services infrastructure including Internet
capabilities.

Our business is also subject to substantial governmental regulation and changes
in the legal, regulatory, accounting, tax, and compliance requirements may have
a substantial effect on our operations, and results, including but not limited
to effects on costs we incur and effects on investor interest in mutual funds
and investing in general.

                                       20



<PAGE>
ITEM 7. FINANCIAL STATEMENTS

The audited financial statements of eChapman and related notes, are set forth at
pages F-1 through attached hereto.

OTHER INFORMATION PREVIOUSLY OMITTED FROM eCHAPMAN'S PROXY STATEMENT PURSUANT TO
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, RELEASE NO. 34-45589.



                                       21
<PAGE>

Fiscal 2002 Audit Fee Summary

                                   Audit Fees

Wilkins McNair, PC billed eChapman an aggregate of $57,000 in fees for
professional services rendered in connection with the audit of eChapman's
financial statements for the most recent fiscal year and the reviews of the
financial statements included in each of the Company's Quarterly Reports on Form
10QSB during the fiscal year ended December 31, 2002. Wilkins McNair, P.C.
billed eChapman an aggregate of $24,212 in fees for professional services
rendered in connection with the audit of eChapman's financial statements for the
fiscal year ended December 31, 2001.


                                       22
<PAGE>


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

(a) EXHIBITS


EXHIBIT
NUMBER                                 DESCRIPTION
------                                 -----------

3.1      Articles of Amendment and Restatement of the Company (Filed as Exhibit
         3.1 to Pre-Effective Amendment No. 3 to the Company's Registration
         Statement on Form S-4 (File No. 333-91251) as filed with the Securities
         and Exchange Commission on March 30, 2000 and hereby incorporated by
         reference)

3.2      Amended and Restated Bylaws of the Company (Filed as Exhibit 3.2 to
         Pre-Effective Amendment No. 3 to the Company's Registration Statement
         on Form S-4 (File No. 333-91251) as filed with the Securities and
         Exchange Commission on March 30, 2000 and hereby incorporated by
         reference)

4        Form of common stock certificate (Filed as Exhibit 4 to Amendment No. 1
         to Company's Registration Statement on Form SB-2 (File No. 333-90987)
         as filed with the Securities and Exchange Commission on January 18,
         2000 and hereby incorporated by reference

10.1     eChapman, Inc. 1999 Omnibus Stock Plan (Filed as Exhibit 10.1 to
         the Company's Registration Statement on Form SB-2 (File No. 333-90987)
         as filed with the Securities and Exchange Commission on November 15,
         1999 and hereby incorporated by reference)

10.2     Service Mark License Agreement between the Company and Nathan A.
         Chapman, Jr. dated November 12, 1999 (Filed as Exhibit 10.2 to the
         Company's Registration Statement on Form SB-2 (File No. 333-90987) as
         filed with the Securities and Exchange Commission on November 15, 1999
         and hereby incorporated by reference.)

10.3     Agreement and Plan of Merger by and among the Company, CHI Merger
         Subsidiary, Inc. and Chapman Holdings, Inc. dated November 15, 1999
         (Filed as Exhibit 10.3 to Amendment No. 1 to Company's Registration
         Statement on Form SB-2 (File No. 333-90987) as filed with the
         Securities and Exchange Commission on January 18, 2000 and hereby
         incorporated by reference)

10.4     Agreement and Plan of Merger by and among the Company, CCMHI Merger
         Subsidiary, Inc. and Chapman Capital Management, Inc. dated November
         15, 1999 (Filed as Exhibit 10.4 to Amendment No. 1 to Company's
         Registration Statement on Form SB-2 (File No. 333-90987) as filed with
         the Securities and Exchange Commission on January 18, 2000 and hereby
         incorporated by reference)

                                       23

<PAGE>


EXHIBIT
NUMBER                                 DESCRIPTION
------                                 -----------

10.5     Agreement and Plan of Merger by and among the Company, CIH Merger
         Subsidiary, Inc. and Chapman Insurance Holdings, Inc. dated November
         15, 1999 (Filed as Exhibit 10.5 to Amendment No. 1 to Company's
         Registration Statement on Form SB-2 (File No. 333-90987) as filed with
         the Securities and Exchange Commission on January 18, 2000 and hereby
         incorporated by reference)

10.6     Support Agreement between the Company and Nathan A. Chapman, Jr. dated
         November 12, 1999 (Chapman Holdings, Inc.) (Filed as Exhibit 10.6 to
         the Company's Registration Statement on Form SB-2 (File No. 333-90987)
         as filed with the Securities and Exchange Commission on November 15,
         1999 and hereby incorporated by reference.)

10.7     Support Agreement between the Company and Nathan A. Chapman, Jr. dated
         November 12, 1999 (Chapman Capital Management Holdings, Inc.) (Filed as
         Exhibit 10.7 to the Amendment No. 1 to Company's Registration Statement
         on Form SB-2 (File No. 333-90987) as filed with the Securities
         and Exchange Commission on January 18, 2000 and hereby incorporated by
         reference)

10.8     Support Agreement between the Company and Nathan A. Chapman, Jr. dated
         November 12, 1999 (Chapman Insurance Holdings, Inc.) (Filed as Exhibit
         10.8 to the Amendment No. 1 to Company's Registration Statement on Form
         SB-2 (File No. 333-90987) as filed with the Securities and Exchange
         Commission on January 18, 2000 and hereby incorporated by reference)

10.9     Fully Disclosed Clearing Agreement between the Pershing Division,
         Donaldson, Lufkin & Jenrette Securities Corporation and The Chapman Co.
         dated March 16, 1999 (Filed as Exhibit 10.9 to the Company's
         Registration Statement on Form SB-2 (File No. 333-90987) as filed with
         the Commission on November 15, 1999 and hereby incorporated by
         reference.)

10.10    Distribution Agreement between The Chapman Co. and The Chapman Funds,
         Inc. on behalf of The Chapman U.S. Treasury Money Fund and The Chapman
         Institutional Cash Management Fund dated April 30, 1997 (Filed as
         Exhibit 5(A) to Post-Effective Amendment No. 13 to The Chapman Funds,
         Inc.'s Registration Statement on Form N-1A (File Nos.
         33-25716;811-5697) as filed with the Securities and Exchange Commission
         on August 7, 1997 and hereby incorporated by reference)

10.11    Distribution Agreement between The Chapman Co. and The Chapman Funds,
         Inc. on behalf of the DEM Equity Fund dated October 28, 1997 (Filed as
         Exhibit 5(B) to Post-Effective Amendment No. 15 to The Chapman Funds,
         Inc.'s Registration Statement on Form N-1A (File No. 33-25716;811-5697)
         as filed with the Securities and Exchange Commission on March 2, 1998
         and hereby incorporated by reference)

                                       24

<PAGE>

EXHIBIT
NUMBER                                 DESCRIPTION
------                                 -----------


10.12    Distribution Agreement between The Chapman Co. and The Chapman Funds,
         Inc. on behalf of the DEM Index Fund dated October 28, 1997 (Filed as
         Exhibit 5(C) to Post-Effective Amendment No. 16 to The Chapman Funds,
         Inc.'s Registration Statement on Form N-1A (File Nos.
         33-25716;811-5697) as filed with the Securities and Exchange Commission
         on May 29, 1998 and hereby incorporated by reference.)

10.13    Distribution Agreement between The Chapman Co. and The Chapman Funds,
         Inc. on behalf of the DEM Fixed Income Fund dated February 11, 1998
         (Filed as Exhibit 5(D) to Post-Effective Amendment No. 17 to The
         Chapman Funds, Inc.'s Registration Statement on Form N-1A (File Nos.
         33-25716;811-5697) as filed with the Securities and Exchange Commission
         on June 12, 1998 and hereby incorporated by reference.)

10.14    Distribution Agreement between The Chapman Co. and The Chapman Funds,
         Inc. on behalf of the DEM Multi-Manager Equity Fund dated February 11,
         1998 (Filed as Exhibit 5(E) to Post-Effective Amendment No. 18 to The
         Chapman Fund, Inc.'s Registration Statement on Form N-1A (File Nos.
         33-25716;811-5697) as filed with the Securities and Exchange Commission
         on September 30, 1998 and hereby incorporated by reference.)

10.15    Distribution Agreement between The Chapman Co. and The Chapman Funds,
         Inc. on behalf of the DEM Multi-Manager Bond Fund dated February 11,
         1998 (Filed as Exhibit 5(F) to Post-Effective Amendment No. 21 to The
         Chapman Funds, Inc.'s Registration Statement on Form N-1A (File Nos.
         33-25716;811-5697) as filed with the Securities and Exchange Commission
         on July 15, 1999 and hereby incorporated by reference.)

10.16    Equipment Lease Agreement between The Chapman Co. and Chapman Limited
         Partnership dated October 1, 1993 (Filed as Exhibit 10.7 to Chapman
         Holdings, Inc.'s Registration Statement on Form SB-2 (File No.
         333-43487) as filed with the Securities and Exchange Commission on
         December 30, 1997 and hereby incorporated by reference)

10.17    Trademark Assignment from The Chapman Co. to Nathan A. Chapman, Jr.
         dated December 24, 1997 (Filed as Exhibit 10.8 to Chapman Holdings,
         Inc.'s Registration Statement on Form SB-2 (File No. 333-43487) as
         filed with the Securities and Exchange Commission on December 30, 1997
         and hereby incorporated by reference)

10.18    Trademark Assignment from The Chapman Co. to Nathan A. Chapman, Jr.
         dated December 24, 1997 (Filed as Exhibit 10.9 to Chapman Holdings,
         Inc.'s Registration Statement on Form SB-2 (File No. 33343487) as filed
         with the Securities and Exchange Commission on December 30, 1997 and
         hereby incorporated by reference)

10.19    License Agreement between The Chapman Co. and Nathan A. Chapman, Jr.
         dated December 26, 1997 (Filed as Exhibit 10.10 to Chapman Holdings,
         Inc.'s Registration Statement on Form SB-2 (File 333-43487) as filed
         with the Securities and Exchange Commission on December 30, 1997 and
         hereby incorporated by reference)

                                       25

<PAGE>


EXHIBIT
NUMBER                                 DESCRIPTION
------                                 -----------

10.20    Advisory and Administrative Services Agreement between Chapman Capital
         Management, Inc. and The Chapman Funds, Inc. on behalf of The Chapman
         U.S. Treasury Money Fund and The Chapman Institutional Cash Management
         Fund dated April 30, 1997 (Filed as Exhibit 5(A) to Post-Effective
         Amendment No. 13 to The Chapman Funds, Inc.'s Registration Statement on
         Form N-1A (file Nos. 33-25716;811-5697) as filed with the Securities
         and Exchange Commission on August 7, 1997 and hereby incorporated by
         reference)

10.21    Advisory and Administrative Services Agreement between Chapman Capital
         Management, Inc. and The Chapman Funds, Inc. on behalf of the DEM
         Equity Fund dated October 28, 1997 (Filed as Exhibit 5(B) to
         Post-Effective Amendment No. 15 to The Chapman Funds, Inc.'s
         Registration Statement on Form N-1A (File No. 33-25716;811-5697) as
         filed with the Securities and Exchange Commission on March 2, 1998 and
         hereby incorporated by reference)

10.22    Advisory and Administrative Services Agreement between Chapman Capital
         Management, Inc. and The Chapman Funds, Inc. on behalf of the DEM Index
         Fund dated October 28, 1997 (Filed as Exhibit 4(C) to Post-Effective
         Amendment No. 16 to The Chapman Funds, Inc.'s Registration Statement on
         Form N-1A (File Nos. 33-25716;811-5697) as filed with the Securities
         and Exchange Commission on May 29, 1998 and hereby incorporated by
         reference.)

10.23    Advisory and Administrative Services Agreement between Chapman Capital
         Management, Inc. and The Chapman Funds, Inc. on behalf of the DEM Fixed
         Income Fund dated February 11, 1998 (Filed as Exhibit 4(D) to
         Post-Effective Amendment No. 17 to The Chapman Funds, Inc.'s
         Registration Statement on Form N-1A (File Nos. 33-25716;811-5697) as
         filed with the Securities and Exchange Commission on June 12, 1998 and
         hereby incorporated by reference.)

10.24    Advisory and Administrative Services Agreement between Chapman Capital
         Management, Inc. and The Chapman Funds, Inc. on behalf of the DEM
         Multi-Manager Equity Fund dated October 23, 1999 (Filed as Exhibit 4(E)
         to Post-Effective Amendment No. 18 to The Chapman Funds, Inc.'s
         Registration Statement on Form N-1A (File Nos. 33-25716;811-5697) as
         filed with the Securities and Exchange Commission on September 30, 1998
         and hereby incorporated by reference.)

10.25    Advisory and Administrative Services Agreement between Chapman Capital
         Management, Inc. and the Chapman Funds, Inc. on behalf of the DEM
         Multi-Manager Bond Fund dated October 23, 1998 (Filed as Exhibit 4(F)
         to Post-Effective Amendment No. 21 to The Chapman Funds, Inc.'s
         Registration Statement on Form N-1A (File Nos. 33-25716;811-5697) as
         filed with the Securities and Exchange Commission on July 15, 1999 and
         hereby incorporated by reference.)

                                       26

<PAGE>

EXHIBIT
NUMBER                                 DESCRIPTION
------                                 -----------

10.26    Advisory Agreement for Separate Account dated June 1, 1995 (Filed as
         Exhibit 10.5 to Amendment No. 2 to Chapman Capital Management Holdings,
         Inc.'s Registration Statement on From SB-2 (File No. 333-51883) as
         filed with the Securities and Exchange Commission on June 22, 1998 and
         hereby incorporated by reference)

10.27    Agreement & Declaration of Trust between Chapman Capital Management,
         Inc. and Bankers Trust Company dated November 1, 1996 (Filed as Exhibit
         10.6 to Chapman Capital Management Holding's Registration Statement on
         Form SB-2 (File No. 333-51883) as filed with the Securities and
         Exchange Commission on May 5, 1998 and hereby incorporated by
         reference)

10.28    Agreement between Bankers Trust Company and Chapman Capital Management,
         Inc. dated November 1, 1996 (Filed as Exhibit 10.7 to Chapman Capital
         Management Holding's Registration Statement on Form SB-2 (File No.
         333-51883) as filed with the Securities and Exchange Commission on May
         5, 1998 and hereby incorporated by reference)

10.29    Agreement between Bankers Trust Company and Chapman Capital Management
         and Tremont Partners, Inc. and Stamberg Prestia, Ltd. dated November 1,
         1996 (Filed as Exhibit 10.8 to Chapman Capital Management Holding's
         Registration Statement on Form SB-2 (File No. 333-51883) as filed with
         the Securities and Exchange Commission on May 5, 1998 and hereby
         incorporated by reference)

10.30    Service Mark License Agreement between Chapman Capital Management
         Holdings, Inc., Chapman Capital Management, Inc. and Nathan A. Chapman,
         Jr. dated as of June 9, 1998 Filed as Exhibit 10.10 to Amendment No. 2
         to Chapman Capital Management Holdings, Inc.'s Registration Statement
         on Form SB-2 (File No. 333-51883) as filed with the Securities and
         Exchange Commission on June 22, 1998 and hereby incorporated by
         reference)

10.31    $242,000 Promissory Note to Chapman Capital Management Holdings, Inc.
         from Nathan A. Chapman, Jr. dated as of July 29, 1999 (Filed as Exhibit
         10.2 to Chapman Capital Management Holdings, Inc.'s Quarterly Report on
         Form 10Q-SB (File No. 0-24213) as filed with the Securities and
         Exchange Commission on August 20, 1999 and hereby incorporated by
         reference)

10.32    Lock-up Agreement between Nathan A. Chapman, Jr. and The Chapman Co.
         dated March 14, 2000 (Filed as Exhibit 10.41 to Pre-Effective Amendment
         No. 3 to the Company's Registration Statement on Form S-4 (File No.
         333-91251) as filed with the Securities and Exchange Commission on
         March 30, 2000 and hereby incorporated by reference)

10.33    $32,836.53 Promissory Note to The Chapman Co. from Nathan A. Chapman,
         Jr. dated December 31, 1999 (Filed as Exhibit 10.42 to Pre-Effective
         Amendment No. 3 to the Company's Registration Statement on Form S-4
         (File No. 333-91251) as filed with the Securities and Exchange
         Commission on March 30, 2000 and hereby incorporated by reference)

                                       27

<PAGE>


EXHIBIT
NUMBER                            DESCRIPTION
------                            -----------


10.34    Amended and Restated Expense Limitation Agreement by and among The
         Chapman Funds, Inc., on behalf of The Chapman U.S. Treasury Money Fund,
         DEM Equity Fund, DEM Index Fund, DEM Multi-Manager Equity Fund and DEM
         Multi-Manager Bond Fund, and Chapman Capital Management, Inc. dated
         March 17, 2000 (Filed as Exhibit 10.43 to Pre-Effective Amendment No. 3
         to the Company's Registration Statement on Form S-4 (File No.
         333-91251) as filed with the Securities and Exchange Commission on
         March 30, 2000 and hereby incorporated by reference)

10.35    Amendment No. 1 dated November 9, 2000 to Amended and Restated Expense
         Limitation Agreement dated March 17, 2000 between Chapman Capital
         Management, Inc. and The Chapman Funds, Inc. (Filed as Exhibit 4J to
         Post-Effective Amendment 25 to the Registration Statement of The
         Chapman Funds, Inc. on Form N-1A (File Nos.: 33-25716; 811-5697) as
         filed with the Securities and Exchange Commission on December 31, 1999
         and hereby incorporated by reference)

10.36    $1,149,639 Promissory Note to eChapman. from Nathan A. Chapman, Jr.
         dated February 22, 2001 (Filed herewith)

21       Subsidiaries of the Company (Filed as Exhibit 21 to Amendment No. to
         the Company's Registration Statement on Form SB-2 (File No. 333-90987)
         as filed with the Securities and Exchange commission on January 18,
         2000 and hereby incorporated by reference.)

23.1     Consent of Wilkins McNair, P.C.

24.1     Power of Attorney (Filed herewith)

(b)      REPORTS ON FORM 8-K:

         The Company filed no reports on Form 8-K during the Fourth Quarter of
2001.



                                       28

<PAGE>

                                   SIGNATURES

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

eChapman, Inc.





Dated: March 31, 2003                         By: /s/ Nathan A. Chapman, Jr.
                                                 --------------------------
                                                 Nathan A. Chapman, Jr.
                                                 PRESIDENT



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



<TABLE>
<CAPTION>

SIGNATURES                          TITLE & CAPACITY                   DATE
----------                          ----------------                   ----
<S>                                <C>                                <C>
                                    President and Director
/s/ Nathan A. Chapman, Jr.          (Principal Executive Officer)      March 31, 2003
--------------------------
Nathan A. Chapman, Jr.
                                    Chief Financial Officer
/s/ Lynn Ballard                    (Principal Financial and           March 31, 2003
---------------------               Accounting Officer)
Lynn Ballard

</TABLE>

The Board of Directors

    /s/  Nathan A. Chapman, Jr.                /s/  Adolph D. Washington
----------------------------------        --------------------------------------
         Nathan A. Chapman, Jr.                     Adolph D. Washington


    /s/  Earl U. Bravo, Sr.
----------------------------------             /s/  Theron Stokes
         Earl U. Bravo, Sr.               --------------------------------------

                                                  Theron Stokes
    /s/  Donald V. Watkins
----------------------------------
         Donald V. Watkins


    /s/  Lottie H. Shackelford
----------------------------------
         Lottie H. Shackelford


By: /s/ Nathan A. Chapman, Jr.                                    March 31, 2002
    --------------------------
     Nathan A. Chapman, Jr.
     Attorney-in-Fact

                                       29

<PAGE>


March 28, 2003


                                 CERTIFICATIONS

I, Nathan A. Chapman Jr., certify that:

1. I have reviewed this annual report on Form 10-K of eChapman Inc.

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. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-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 us 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 our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
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. The registrant's other certifying officers and 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 our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 31, 2003


        /s/  Nathan A. Chapman Jr.
        -------------------------
        Nathan A. Chapman Jr.,  President  and  Chief  Executive  Officer

<PAGE>

                                 CERTIFICATIONS

I, Lynn Ballard certify that:

1. I have reviewed this annual report on Form 10-K of eChapman Inc.

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. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-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 us 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 our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;

5. The registrant's other certifying officers and I have disclosed, based on our
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. The registrant's other certifying officers and 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 our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 31, 2003





        /s/  Lynn Ballard
        ---------------------------
        Lynn Ballard, Acting Chief Financial Officer


<PAGE>







                               ECHAPMAN.COM, INC.
                    AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                           DECEMBER 31, 2002 AND 2001






                                      F-1

<PAGE>

                                 eCHAPMAN, INC.
                    AUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                           DECEMBER 31, 2002 AND 2001


                                TABLE OF CONTENTS


                                                                        PAGE(S)
                                                                        -------

INDEPENDENT AUDITORS' REPORT......................................       F-3

FINANCIAL STATEMENTS:

     Consolidated Balance Sheets..................................       F-4
     Consolidated Statements of Operations........................       F-5
     Consolidated Statements of Changes in Stockholders' Equity...       F-6
     Consolidated Statements of Cash Flows........................       F-7
     Notes to Consolidated Financial Statements...................    F-8 - F-14



                                      F-2
<PAGE>




                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
eChapman, Inc.:

We have audited the accompanying consolidated balance sheets of eChapman, Inc.
(a Maryland corporation) as of December 31, 2002 and 2001, and the related
statements of operations, changes in stockholders' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

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



/s/ Wilkins McNair, PC

March 28, 2003

                                      F-3

<PAGE>


                            eCHAPMAN, INC.
                     CONSOLIDATED BALANCE SHEETS
                      DECEMBER 31, 2002 AND 2001

--------------------------------------------------------------------------------
                   SEE INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


ASSETS                                                                            2002                    2001
------                                                                        ------------            ------------
<S>                                                                           <C>                     <C>

     Cash                                                                     $    102,000            $    426,000
     Cash deposits with clearing organization                                      558,000                 654,000
     Investments, available for sale                                               349,000                 349,000
     Receivables from brokers and dealers                                          126,000                 176,000
     Receivables, other                                                             27,000                  78,000
     Management fees receivable                                                    186,000                 321,000
     Advances to officer/employee                                                  186,000                 103,000
     Office equipment, net                                                         118,000                  42,000
     Prepaids and other assets                                                     125,000                 446,000
     Intangible assets, net                                                     15,257,000              15,312,000
                                                                              ------------            ------------

TOTAL ASSETS                                                                  $ 16,958,000            $ 17,983,000
                                                                              ============            ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

     Accounts payable                                                         $    825,000            $  1,389,000
     Other liabilities                                                             187,000                 150,000
                                                                              ------------            ------------

TOTAL LIABILITIES                                                             $  1,012,000            $  1,539,000
                                                                              ------------            ------------

STOCKHOLDERS' EQUITY
     Common stock, $.001 par value, 50,000,000 shares
        authorized, 12,281,096  shares issued and outstanding
        and 2,288,326 treasury shares                                         $      9,000            $      9,000
     Additional paid-in-capital                                                 36,602,000              36,602,000
     Accumulated deficit                                                       (19,199,000)            (18,702,000)
     Subscription stock receivable                                              (1,291,000)             (1,291,000)
     Cumulative realized loss on trading of proprietary
        stock of company held by subsidiary                                       (174,000)               (173,000)
     Proprietary stock of company held by subsidiary
        at cost                                                                     (1,000)                 (1,000)
                                                                              ------------            ------------

TOTAL STOCKHOLDERS' EQUITY                                                    $ 15,946,000            $ 16,444,000
                                                                              ------------            ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $ 16,958,000            $ 17,983,000
                                                                              ============            ============

</TABLE>





SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------

                                      F-4



<PAGE>

                         eCHAPMAN, INC.
             CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

--------------------------------------------------------------------------------
                SEE INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


REVENUE                                                 2002             2001
-------                                            ------------    ------------
<S>                                                <C>             <C>

     Commissions                                   $  2,748,000    $  3,702,000
     Underwriting and management fees                   246,000         642,000
     Investment management fees                       1,741,000       3,779,000
     Interest, dividends and other income               396,000         406,000
     Gain on trading                                     40,000          50,000
     Loss on investments                                     --        (898,000)
                                                   ------------    ------------

TOTAL REVENUE                                      $  5,171,000    $  7,681,000

     Interest expense                                    64,000          90,000
                                                   ------------    ------------

NET REVENUE                                        $  5,107,000    $  7,591,000
                                                   ------------    ------------


EXPENSES
--------
     Compensation and benefits                     $  2,712,000    $  3,851,000
     Floor brokerage and clearing fees                  264,000         470,000
     Management fees                                    882,000       1,074,000
     Travel and business development                     55,000         415,000
     Professional fees                                  288,000       1,324,000
     Advertising, promotion and publicity               232,000          41,000
     Depreciation and amortization expense              132,000       1,884,000
     Other operating expense                          1,039,000       2,850,000
                                                   ------------    ------------

TOTAL EXPENSE                                      $  5,604,000    $ 11,909,000
                                                   ------------    ------------

OPERATING LOSS                                         (497,000)     (4,318,000)

OTHER EXPENSES
     Impairment loss                                         --      (7,252,000)
                                                   ------------    ------------

NET LOSS                                           $   (497,000)   $(11,570,000)
                                                   ============    ============

BASIC AND DILUTIVE EARNINGS PER SHARE DATA:

Net Loss                                           $      (0.04)   $      (0.91)
                                                   ============    ============

Weighted average shares outstanding                  12,281,000      12,662,000
                                                   ============    ============

</TABLE>


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------


                                      F-5


<PAGE>

                                 eCHAPMAN, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>


                                                                     CUMULATIVE
                                                                  REALIZED LOSS ON
                                                                     TRADING
                                                                 PROPRIETARY STOCK
                                        ADDITIONAL                  OF COMPANY BY              ACCUMULATED SUBSCRIPTION    TOTAL
                             COMMON      PAID-IN      ACCUMULATED  SUBSIDIARY OF PROPRIETARY COMPREHENSIVE   STOCK     STOCKHOLDERS'
                             STOCK       CAPITAL        DEFICIT       COMPANY      STOCK        INCOME     RECEIVABLE     EQUITY
                            -------    -----------   -------------  ------------ ----------- ------------- ----------- ------------

<S>                         <C>        <C>           <C>            <C>          <C>          <C>         <C>          <C>
Balance, December 31, 2000  $13,000    $37,774,000   $ (7,220,000)  $(307,000)   $(884,000)   $(568,000)  $       --   $ 28,808,000

Stock issued in acquisition      --        250,000             --          --           --           --            --       250,000
Subscription stock
  receivable                     --             --             --          --           --           --    (1,291,000)   (1,291,000)
Conversion of stock          (4,000)         4,000             --          --           --           --            --            --
Comprehensive income:
    Net loss                     --             --    (11,570,000)         --           --           --            --   (11,570,000)
    Unrealized gain on
     securities                  --             --             --          --           --      568,000            --       568,000
    Proprietary stock, net       --     (1,426,000)        88,000          --      883,000           --            --      (455,000)
    Net realized gain on
     trading                     --             --             --     134,000           --           --            --       134,000
                            -------    -----------   ------------   ---------    ---------    ---------   -----------  ------------
Balance, December 31, 2001  $ 9,000    $36,602,000   $(18,702,000)  $(173,000)   $  (1,000)   $      --   $(1,291,000) $ 16,444,000


Net Loss                                                 (497,000)                                                         (497,000)
Additional Realized Loss on
       Proprietary Stock                                                            (1,000)                                  (1,000)
Proprietary Stock, Net      -------    -----------   ------------   ---------    ---------    ---------   -----------  ------------
Balance, December 31, 2002  $ 9,000    $36,602,000   $(19,199,000)  $(174,000)   $  (1,000)   $      --   $(1,291,000) $ 15,946,000
                            =======    ===========   ============   =========    =========    =========   ===========  ============


</TABLE>














SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------

                                      F-6

<PAGE>

                                 eCHAPMAN, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

--------------------------------------------------------------------------------
                        SEE INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


CASH FLOWS FROM OPERATING ACTIVITIES:                                   2002                       2001
                                                                    ------------              ------------
<S>                                                                 <C>                       <C>
      Net Loss                                                      $   (497,000)             $(11,570,000)
Adjustments to reconcile net loss to net cash from
operating activities:
      Depreciation and amortization expense                              132,000                 1,884,000
      Goodwill impairment                                                     --                 7,252,000
      Effect from changes in assets and liabilities
           Receivables                                                   101,000                   230,000
           Management fees receivable                                    135,000                   168,000
           Prepaids and other assets                                     376,000                 1,338,000
           Accounts payable and accrued expenses                        (527,000)                  (28,000)
                                                                    ------------              ------------

      NET CASH FROM OPERATING ACTIVITIES                            $   (280,000)             $   (726,000)
                                                                    ------------              ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      (Increase)/Decrease in equipment                              $    (56,000)             $    (25,000)
      Purchase of Netnoir assets                                              --                  (150,000)
      Purchase of investments                                                 --                  (593,000)
      Advances to officer/employee                                       (83,000)                 (244,000)
      Decrease in proprietary stock                                       (1,000)                       --
                                                                    ------------              ------------

      NET CASH FROM INVESTING ACTIVITIES:                           $   (140,000)             $ (1,012,000)
                                                                    ------------              ------------

CASH FLOW FROM FINANCING ACTIVITIES:
      Payment on retirement of treasury stock                                 --                (1,108,000)
                                                                    ------------              ------------

      NET CASH FROM FINANCING ACTIVITIES                                      --              $ (1,108,000)
                                                                    ------------              ------------

      NET DECREASE IN CASH AND CASH EQUIVALENTS                         (420,000)             $ (2,846,000)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                         1,080,000                 3,926,000
                                                                    ------------              ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                            $    660,000              $  1,080,000
                                                                    ============              ============




</TABLE>




SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------

                                      F-7


<PAGE>

                              eCHAPMAN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002
--------------------------------------------------------------------------------


1. ORGANIZATION AND BUSINESS:

eChapman, Inc. (eChapman), a Maryland corporation, was formed on May 14, 1999
and is designed to bring together the financial services capabilities of The
Chapman Co., Chapman Capital Management, Inc. and Chapman Insurance Agency
Incorporated.

Effective June 20, 2000, Chapman Holdings, Inc., Chapman Capital Management
Holdings, Inc. and Chapman Insurance Holdings, Inc. merged into separate wholly
owned subsidiaries of eChapman (collectively, the Company). Also, effective on
June 20, 2000, eChapman completed its initial public offering (IPO) of 1,260,000
shares of common stock at $13 per share. eChapman received net proceeds of
approximately $12,060,000. The merger of Chapman Holdings, Inc. (CHI), Chapman
Capital Management Holdings, Inc. (CCMHI), and Chapman Insurance Holdings, Inc.
(CIH) into wholly owned subsidiaries of eChapman was accounted for as a
combination of entities under common control; thus the portion of the combined
entities not under common control was stepped-up in basis to the fair market
value at date of the IPO.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION
---------------------

The accompanying consolidated financial statements are presented on the accrual
basis of accounting in accordance with accounting principles generally accepted
in the United States. All significant intercompany balances have been eliminated
in the consolidation. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.


MANAGEMENT FEES
---------------

The Company's investment management fees are based on a percentage of the funds
managed and when the value of these funds are increased or reduced, the
Company's management fee is increased or reduced.


CASH
----

As of December 31, 2002 all cash invested in the Chapman U.S. Treasury Money
Fund, a fund managed by the Chapman Capital Management, Inc. and affiliate, was
removed due to the closing of this fund. All cash removed from this fund, at the
time of closure, was deposited into standard operating accounts. Cash now wholly
consists of monies intended for operational use.


INVESTMENTS
-----------

Investments as of December 31, 2002 and 2001, consist of investments in common
stock private companies. The cost of those investments approximate market.

TREASURY STOCK
--------------

As of March, 11, 2002, The Chapman Co. was no longer a market maker for
eChapman. However, as eChapman is the parent of The Chapman Co., all purchases
and sales of eChapman's stock by The Chapman Co. during its months as market
maker have been accounted for as treasury stock transactions in the accompanying
consolidated

                                      F-8


<PAGE>

                                 eCHAPMAN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002
--------------------------------------------------------------------------------


TREASURY STOCK (CONT'D)
----------------------

financial statements. The Company had cash on deposit with the clearing agent of
$558,000 as of December 31, 2002. During 2002, cash held on deposit with the
clearing agent was used for the payment on proprietary stock. The securities
purchased with the funds are held by the clearing agent as collateral.

FINANCIAL INSTRUMENTS
---------------------

The carrying amounts reported in the consolidated balance sheets for cash
equivalents, receivables, investments, securities owned, advances, accounts
payable and accrued expenses, and other liabilities approximate fair value.

EARNINGS PER SHARE
------------------

Earnings per share are based on the weighted average number of common and
dilutive common equivalent shares outstanding during the period the calculation
is made. Common equivalent shares consist of shares usable upon the exercise of
stock options, using the treasury stock method. The weighted basic and diluted
average shares outstanding for the years ended December 31, 2002 and 2001, were
the weighted basic average common shares outstanding because the loss for the
periods presented made the common stock equivalents antidilutive.

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No,
141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 141 requires business combination initiated after June 30,
2001 to be accounted for using the purchase method of accounting and broadens
the criteria for recording intangible assets separately from goodwill. Recorded
goodwill and intangibles will be evaluated against these new criteria and may
result in certain intangibles being subsumed into goodwill, or alternatively,
amounts initially recorded as goodwill may be separately identified and
recognized apart from goodwill. SFAS No. 142 requires the use of a
non-amortization approach to account for purchased goodwill and certain
intangibles. Under a non-amortization approach, goodwill and certain intangibles
will not be amortized into results of operations, but instead would be reviewed
for impairment and written down and charged to the results of operations only in
the periods in which the recorded value of goodwill and certain intangibles is
more than its fair value. The provisions of each statement, which apply to
goodwill and intangible assets acquired prior to June 30, 2001, will be adopted
by the Company on January 1, 2002. The Company expects the adoption of these
accounting standards will result in certain intangibles being subsumed into
goodwill and will have the impact of reducing its amortization of goodwill and
intangibles commencing on January 1, 2002; however, impairment reviews may
result in future periodic write-downs.


INTANGIBLE ASSETS
-----------------

Intangible assets consist of goodwill of $24.2 million, being amortized over 20
years, and $70,000 being amortized over 15 years related to Chapman On-Line.
Amortization expense for the year ended December 31, 2002, was $ 132,000.


IMPAIRMENT OF GOODWILL
----------------------

The merger of Chapman Holdings, Inc. (CHI), Chapman Capital Management, Inc.
(CCMH), and Chapman Insurance Holdings, Inc. (CIH) into wholly owned
subsidiaries of eChapman, Inc. was accounted for as a combination of entities
under common control; thus, the portion of the combined entities not under
common control was stepped-up in basis to the fair market value at the date of
the Initial Public Offering (IPO). The step-up in basis generated approximately
$24.2 million in goodwill. Subsequent to the distribution date, the market value
of

                                      F-9

<PAGE>


                                 eCHAPMAN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002
--------------------------------------------------------------------------------


IMPAIRMENT OF GOODWILL (CONT'D)
-------------------------------

eChapman's stock declined substantially below its market value recorded at the
date of the IPO. In 2001 management concluded that as a result of this decline
in market value and management's expectations that market value in the
investment industry would continue to fall due to the events of September 11,
2001 and other pending factors, management evaluated the recoverability of its
goodwill. Management measured the amount of impairment, by assessing current and
future levels of income and cash flows as well as other factors, such as
business trends, prospects, market and economic conditions. Based upon the
assessments in 2001, management concluded that goodwill had been impaired.
Accordingly, the Company recorded goodwill impairment in the amount of
$7,252,000.

As of December 31, 2002 goodwill was $15.2 million, net of accumulated
amortization of approximately $1.3 million.

SEGMENT REPORTING
-----------------

The Company has adopted SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information as of December 31, 1998, and has identified
three distinct operating segments: securities brokerage and investment banking
services, investment advisory and management services, and internet portal
operations. The accounting policies for those segments are the same as those
described in the summary of significant accounting policies. Certain intangible
assets are not allocated to distinct segments and are recorded at the corporate
level. The Company evaluates performance based on profit or loss from operations
before income taxes. The Company's reportable segments for the years ended
December 31, 2002 and 2001 are strategic business units that offer different
services.

All revenue and Company activities are within the United States.

REVENUE RECOGNITION
-------------------

The Company records commission revenue and related expenses on a trade date
basis as the securities transactions occur. Management fees are recognized in
the period the services are provided, and underwriting fees are recognized when
the transactions close.

VOLATILITY OF BUSINESS
----------------------

The Company's revenues and operating results may fluctuate from month to month,
quarter to quarter and year to year due to a combination of factors, including
the number of underwriting transactions in which the Company participates,
access to public markets for companies in which the Company has invested as a
principal, the level of institutional and retail brokerage transactions, and
expenses of establishing new business units. The Company's revenues from an
underwriting transaction are recorded only when the underwritten security
commences trading; accordingly, the timing of the Company's recognition of
revenue from a significant transaction can materially affect the Company's
operating results. As a result, the Company could experience losses if demand
for the above transactions declines faster than the Company's ability to change
its cost structure.

In the normal course of operations of an investment manager, clients add
investments to and withdraw investments from the asset portfolio. This activity
is done by clients as they continue to make investment decisions and diversify
their portfolio. The earnings from investment management are affected by the
additions and withdrawals of investments under management.

                                      F-10

<PAGE>


                                 eCHAPMAN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002
--------------------------------------------------------------------------------


PROPERTY AND EQUIPMENT
----------------------

Property and equipment are stated at cost. Depreciation and amortization are
provided for financial reporting purposes principally on the straight-line
method over the following estimated useful lives:

Office equipment           3 - 5 years
Furniture                      5 years

Straight-line and accelerated methods of depreciation are used for income tax
purposes. Depreciation expense for the years ended December 31, 2002 and
December 31, 2001 were $76,000 and $25,000 respectively.


TRANSACTIONS WITH CLEARING ORGANIZATION
---------------------------------------

The Company is required to have cash on deposit with its clearing agent for
general trading purposes. In addition, receivables from and payables to the
clearing organization arise from cash settlements on ordinary trading activity
and clearing expenses.

Proprietary accounts held at the clearing organization (PAIB Assets) are
considered allowable assets in the computation of net capital pursuant to an
agreement between the Company and the clearing organization which requires,
among other things, for the clearing organization to perform a computation of
PAIB Assets similar to the customer reserve computation set forth in Rule
15c3-3.

INCOME TAXES
------------

The Company accounts for income taxes under the liability method, whereby
deferred income taxes are recognized for the tax consequences of temporary
differences by applying enacted statutory tax rates applicable to future years
to differences between the financial statement carrying amounts and the tax
bases of existing assets and liabilities.

3.  COMMITMENTS AND CONTINGENCIES:

The Company has an operating lease agreement for its office facilities, which
expires on October 15, 2005. Rent expense under this agreement was $203,000 in
2002. Under the lease agreement, a proportionate share of real estate taxes and
building expenses in excess of base year amounts are charged to the Company.

During 2000, the Company leased furniture and equipment from the Chapman Limited
Partnership I (the Partnership), an entity in which certain officers and
stockholders of the Company are partners. The lease required monthly payments of
approximately $10,000 and contained one year renewable terms, at the option of
the Company, through September 2000, at which time the Company could purchase
the furniture and equipment at fair value. As of December 31, 2001, the Company
exercised its option to purchase the furniture and equipment. The appraisal
value of the equipment, of $11,000 was recorded to reflect the obligation of the
purchase. Rent expense under this lease agreement was $98,000 in 2001.

The Company clears all transactions for its brokerage customers through its
clearing agent, which carries and clears all customer securities accounts. The
clearing agent also lends funds to the Company's brokerage customers through the
use of margin credit. These loans are made to customers on a secured basis, with
the clearing agent maintaining collateral in the form of saleable securities,
cash or cash equivalents. Pursuant to the terms of the agreement between the
Company and the clearing agent, in the event that customers fail to pay for
their purchases, to supply the securities that they have sold, or to repay funds
they have borrowed, and the clearing agent satisfies any customer obligations,
the Company would be obligated to indemnify the clearing agent for any resulting
losses. For the years ended December 31, 2002 and 2001, the Company did not
incur such losses.


                                      F-11
<PAGE>

                                 eCHAPMAN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002
--------------------------------------------------------------------------------


3.  COMMITMENTS AND CONTINGENCIES (CONT'D)

Securities brokerage firms become parties to arbitration's brought by
dissatisfied customers in the general course of business. The Company is
currently party to such proceedings. The company was advised in late November
2001 that the Securities Exchange Commission (SEC) has entered an order of a
formal non-public investigation relating to the initial public offering of
eChapman, Inc. and certain sales and record-keeping practices of The Chapman
Company. Losses, if any, associated with the proceedings cannot be estimated at
this time.

4.  REGULATORY REQUIREMENTS:

Pursuant to the requirements of the Securities and Exchange Commission's (SEC)
Uniform Net Capital Rule (Rule 15c3-1), the Chapman Co. is required to maintain
net capital, as defined, of not less than $250,000 and a ratio of aggregate
indebtedness to net capital, as defined not to exceed 15 to 1. As of December
31, 2002, the Company had consolidated net excess capital of $386,000 and a
ratio of aggregate indebtedness to net capital of .84 to 1. As of December 31,
2001, The Chapman Co. an affiliate broker dealer, had deficit net capital of
$547,000 and a ratio of aggregate indebtedness to net capital of .33 to 1. A
notice of noncompliance was filed on March 9, 2001, with the SEC and the
National Association of Securities Dealers, Inc. (NASD). Subsequent to December
31, 2000, management took actions to cure the net capital noncompliance.

The Company is subject to compliance with various SEC and NASD regulations.
During 2000, the SEC and NASD performed a periodic review of the Company's
records and procedures for compliance with its requirements. This review
identified several items for which the Company was in violation. These
violations may subject the Company to fines and other penalties. As the SEC and
NASD have not completed their review, the amount, if any, of fines or other
penalties, is not known and not recorded in the consolidated financial
statements.


5.  STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURE:

Supplemental cash flow disclosure for the years ended December 31, 2002 and 2001
is a follows:

                        DESCRIPTION                 2002          2001
                        --------------------------------------------------
                        Cash paid - interest      $ 11,107       $ 9,000
                        --------------------------------------------------

6.  EMPLOYEE SAVINGS PLAN:

The Company's Retirement Savings Plan, a 401(k) plan, provides participants a
mechanism for making contributions for retirement savings. Each participant may
make pre-tax and after-tax contributions based upon eligible compensation. The
Company may make discretionary contributions based on the participants'
compensation for the plan year. The Company elected not to contribute to the
plan for the years ended December 31, 2002 and 2001.


7.  OMNIBUS STOCK PLAN:

In 1998, Chapman Holdings and Chapman Capital Management Holdings started an
Omnibus Stock Plan (the Plan) to enable selected management, employees,
consultants and directors to acquire interest in Chapman Holdings and Chapman
Capital Management Holdings through ownership of common stock. The options
vested on the grant date and have a three-year term. Those options were
converted to eChapman options in June 2000. The grant date, expiration date and
vesting period did not change.

                                      F-12

<PAGE>
                                 eCHAPMAN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002
--------------------------------------------------------------------------------


7.  OMNIBUS STOCK PLAN (CONT'D)

A summary of the status of the Company's option plan as of December 31, 2002,
and changes during the year is presented below:

                                                          Weighted-Average
                                             Shares        Exercise Price
                                            --------      ----------------

Outstanding as of May 14, 1999              136,510            $4.49
         Exercised                               --               --
         Forfeited                               --               --
                                            -------
Outstanding as of June 20, 2000             136,510             4.49
         Exercised                           (3,966)            4.27
         Forfeited                           (1,352)            4.92
                                            -------
Outstanding as of December 31, 2000         131,192             4.51
         Exercised                               --             4.51
         Forfeited                          (86,524)            4.51
                                            -------
Outstanding as of December 31, 2001          44,668             4.51
         Exercised                               --             4.51
         Forfeited                          (44,668)            4.51
                                            -------       ----------------
Outstanding as of May 14, 2002                   --               --


The range of exercise prices for the stock options was $3.76 to $4.92. The
weighted average exercise price was $4.51.

The Company accounts for its stock-based compensation plans as permitted by FASB
No. 123, Accounting for Stock-Based Compensation, which allows the Company to
follow Accounting Principles Board Opinion No. 25 (APB No. 25), Accounting for
Stock Issued to Employees and recognized no compensation cost for options
granted at fair market prices.

8.  RELATED PARTY TRANSACTIONS:

As of December 31, 2000, the Company had outstanding advances to its majority
stockholder of $1,134,000. The advances to the majority stockholder were
reflected in five notes. Four of the notes were three-year notes that accrued
interest at a range of 4.33 to 5.54 percent per annum. No interest or principal
payments were due until maturity, which was February through December 2001.
There was also a demand note that accrued interest at 5.5 percent per annum. The
interest rates on the note were based on the IRS applicable federal rate in
effect from time to time. All of the above notes were rolled into one demand
note on February 22, 2001. The new note bears interest at the IRS applicable
federal rate as in effect on February 22, 2001, which was 5.18%. As of December
31, 2002, the advance to the majority stockholder of $1,291,000 was reserved as
a subscription stock receivable.

During 2001, the Company issued an additional advance to the majority
shareholder of $74,000. This is classified on the Consolidated Balance Sheet as
Due from officer/employee.

9.  SUBSEQUENT EVENT

Chapman on Line, a related company ceased to its operations effective December
31, 2002. As a result, it will have no operating activities for 2003.


                                      F-13

<PAGE>

                                 eCHAPMAN, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2002
--------------------------------------------------------------------------------


10.      OTHER INFORMATION:

Chapman Capital Management acts as an investment advisor to the DEM-MET Trust,
which is intended to qualify as a tax-exempt pooled trust for qualified employee
benefit plans and certain governmental plans. The DEM-MET Trust was organized in
1996 under New York law. As of December 31, 2001, the DEM-MET trust had assets
of $211 million. The DEM-MET Trust was liquidated on February 5, 2002. Chapman
Capital Management, Inc. has terminated all sub-advisor relationships.

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





                                      F-14