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

                                   Form 10-QSB
                                   (Mark One)

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                       For the period ended March 31, 2002


             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
               For the transition period from _______ to _______.


                        Commission File Number 333-16031



                            FRONT PORCH DIGITAL INC.
                            ------------------------
           (Name of small business issuer as specified in its charter)

                  NEVADA                             86-0793960
                  ------                             ----------
       State or other jurisdiction                (I.R.S. Employer
    of incorporation or organization)           Identification No.)

                               20000 Horizon Way,
                                    Suite 120
                          MT. LAUREL, NEW JERSEY 08054
                          ----------------------------
                    (Address of principal executive offices)

                                 (856) 439-9950
                                 --------------
                           (Issuer's telephone number)


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

As of April 30, 2002,  26,923,074 shares of the issuer's common stock, par value
$.001, were outstanding.

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

<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS --

                            Front Porch Digital, Inc.
                                  Balance Sheet
                                 March 31, 2002
                                   (Unaudited)

<TABLE>
<S>                                                                <C>
ASSETS
Current assets:
  Cash and cash equivalents ...................................    $    361,336
  Accounts receivable .........................................         261,904
  Other current assets ........................................         431,292
                                                                   ------------
Total current assets ..........................................       1,054,532

Property and equipment, net ...................................       1,100,219

Software development costs ....................................         190,951

Software and intellectual property, net of accumulated
  amortization of $343,000 ....................................       1,307,355
Excess cost over fair value of net assets acquired, net
  of accumulated amortization of $945,000 .....................       3,740,801
Other assets ..................................................          32,044
                                                                   ------------
Total assets ..................................................    $  7,425,902
                                                                   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of note payable-- employee ..................    $    160,000
  Notes payable ...............................................         550,000
  Accounts payable ............................................       1,272,352
  Accrued expenses ............................................         481,123
  Accrued expenses-- employees ................................         343,000
  Accrued vacation ............................................         141,847
  Deferred revenue ............................................         952,377
                                                                   ------------
Total current liabilities .....................................       3,900,699

Note payable -- employee, net of current portion ..............         583,963

Stockholders' equity:
  Preferred stock, nonvoting, $.001 par value, 5,000,000
    shares authorized, none issued or outstanding; ............              --
  Common stock, $.001 par value; 50,000,000 shares
    authorized, 26,873,614 shares issued and outstanding ......          26,874
    Additional paid-in capital ................................      20,555,072
    Accumulated deficit .......................................     (17,640,706)
                                                                   ------------
Total stockholders' equity ....................................       2,941,240
                                                                   ------------
Total liabilities and stockholders' equity ....................    $  7,425,902
                                                                   ============
</TABLE>


SEE ACCOMPANYING NOTES.


                                        2
<PAGE>

                            Front Porch Digital, Inc.
                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED MARCH 31,
                                                       2002            2001
                                                   ------------    ------------
<S>                                                <C>             <C>
Revenues:
Products .......................................   $    111,200    $     37,980
Services .......................................        138,986          51,810
Services -- affiliate ..........................             --         169,716
                                                   ------------    ------------
Total revenue ..................................        250,186         259,506

Cost of revenue:
Products .......................................         44,735          17,498
Services .......................................         60,982         227,085
                                                   ------------    ------------
                                                        105,717         244,583
                                                   ------------    ------------
Gross margin ...................................        144,469          14,923
                                                   ------------    ------------

Selling, general and administrative expenses ...        766,234       1,441,573
Research and development .......................        102,849         252,221
Depreciation ...................................        153,096         149,814
Amortization ...................................         58,929         256,756
                                                   ------------    ------------
                                                      1,081,108       2,100,364
                                                   ------------    ------------

Loss from operations ...........................       (936,639)     (2,085,441)

Other income (expense):
Interest income ................................            897          24,106
Interest expense ...............................         (4,500)         (4,500)
                                                   ------------    ------------
                                                         (3,603)         19,606
                                                   ------------    ------------
Net loss .......................................      ($940,242)    ($2,065,835)
                                                   ============    ============

Weighted average number of common shares
  outstanding -- basic and diluted .............     25,959,646      24,566,967
                                                   ============    ============

Loss per common share -- basic and diluted .....         ($0.04)         ($0.08)
                                                   ============    ============
</TABLE>


SEE ACCOMPANYING NOTES.


                                        3
<PAGE>

                            Front Porch Digital, Inc.
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED MARCH 31,
                                                               2002           2001
                                                           -----------    -----------
<S>                                                        <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ...............................................   ($  940,242)   ($2,065,835)
Adjustments to reconcile net loss to net cash used
  in operating activities:
  Depreciation and amortization ........................       212,025        406,570
  Non-cash issuance of common stock to employees
    and consultants ....................................        83,774             --
  Stock option compensation cost .......................        68,987        201,389
  Changes in operating assets and liabilities:
    Increase in accounts receivable -- affiliates ......            --        (88,453)
    Increase in accounts receivable ....................       (86,655)       (44,338)
    (Increase) decrease in other current assets ........      (173,901)        14,504
    Increase in accounts payable .......................       179,968         22,103
    Increase (decrease) in accrued expenses ............         7,332        (46,162)
    (Decrease) increase in accrued expenses -- employees        (9,000)       100,000
    (Decrease) increase in accrued vacation ............        (4,355)        38,900
    Increase in deferred revenue .......................       173,177             --
    Other ..............................................        83,381         18,533
                                                           -----------    -----------
Net cash used in operating activities ..................      (405,509)    (1,442,789)
                                                           -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures ...................................       (13,506)      (155,379)
Software development costs .............................       (13,088)            --
Other investing activities .............................            --        (18,042)
                                                           -----------    -----------
Net cash used in investing activities ..................       (26,594)      (173,421)
                                                           -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible notes payable ....       350,000             --
Proceeds from issuance of common stock .................        50,000             --
                                                           -----------    -----------
Net cash provided by financing activities ..............       400,000             --
                                                           -----------    -----------

Net decrease in cash and cash equivalents ..............       (32,103)    (1,616,210)
Cash and cash equivalents, beginning of period .........       393,439      2,444,527
                                                           -----------    -----------
Cash and cash equivalents, end of period ...............   $   361,336    $   828,317
                                                           ===========    ===========
</TABLE>


SEE ACCOMPANYING NOTES.


                                        4
<PAGE>

                            Front Porch Digital, Inc.
                          Notes to Financial Statements
                                   (Unaudited)


1.   ORGANIZATION AND BASIS OF PRESENTATION

Front Porch  Digital Inc. (the  "Company") is in the emerging  market of digital
information  asset  management.  The  Company  utilizes  a suite of  proprietary
products and services that enable the conversion of analog and digital  content,
including text, images, audio, graphics, video and rich media into other digital
formats   or   platforms.   Incorporating   software-based   methodologies   and
intellectual  property  throughout  its service  offerings  allows content to be
captured,  converted,  managed and  distributed in digital form  efficiently and
cost effectively.

The Company's customers are primarily located within the United States.

The financial  statements  of the Company have been prepared on a  going-concern
basis,  which  contemplates  the  realization  of assets and  liabilities in the
normal course of business.  Accordingly, the financial statements do not include
any adjustments that might be necessary should the Company be unable to continue
in existence.  For the three months ended March 31, 2002,  the Company  incurred
losses and  negative  cash flows  from  operating  activities  of  $940,000  and
$406,000,  respectively.  The Company has incurred losses since  commencement of
operations in its current line of business and expects losses to continue during
2002.  Further,  at March 31, 2002, the Company has a working capital deficit of
$2.8 million.  These factors create significant  uncertainty about the Company's
ability to continue as a going concern.

During 2001, the Company began  marketing its suite of data and video  solutions
to the  marketplace  and since June 2001,  has been awarded new contracts  worth
approximately $3.9 million. The Company has completed approximately $1.1 million
of these contracts  through March 31, 2002 and expects to complete the remainder
during 2002. Management of the Company recognizes that additional resources will
be  required to continue  as a going  concern  and has been  seeking  additional
sources of capital. The Company has implemented cash saving measures,  including
the  deferral of payment of certain  expenses.  Management  believes  that these
actions will enable the Company to obtain sufficient cash to continue as a going
concern.  However,  there can be no assurance that sufficient additional capital
will be available on terms that are acceptable to the Company.

The accompanying unaudited financial statements have been prepared in accordance
with accounting  principles  generally accepted in the United States for interim
financial  information  and  pursuant  to  the  rules  and  regulations  of  the
Securities  and Exchange  Commission.  Accordingly,  they do not include all the
information and footnotes required by generally accepted  accounting  principles
for complete financial  statements.  Management of the Company believes that the
disclosures  are adequate to make the information  presented not misleading.  In
the opinion of  management,  all  adjustments  considered  necessary  for a fair
presentation  have  been  included  and such  adjustments  are of a  normal  and
recurring nature. For further information, refer to the financial statements and
footnotes  included in the  Company's  Annual Report on Form 10-KSB for the year
ended December 31, 2001.

Operating  results for the three months ended March 31, 2002 are not necessarily
indicative of the operating  results  expected for the year ending  December 31,
2002.


                                        5
<PAGE>

                            Front Porch Digital, Inc.
                    Notes to Financial Statements (continued)
                                   (Unaudited)

2.   INTANGIBLE ASSETS

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142
no longer permits the amortization of goodwill and  indefinite-lived  intangible
assets.  Instead,  these  assets must be reviewed  annually  for  impairment  in
accordance with this statement. Accordingly, the Company has ceased amortization
of all  goodwill  as of January  1, 2002.  Impairment  losses for  goodwill  and
indefinite-lived  intangible assets that arise due to the initial application of
this  statement  would be  reported  as  resulting  from a change in  accounting
principle.  During the first half of 2002, the Company will perform the first of
the required  impairment  tests of goodwill.  The Company has not yet determined
what effect,  if any,  this initial  test will have on the  Company's  financial
position or results of operations.

The  Company's  net loss and loss per share for the three months ended March 31,
2001  adjusted  to  exclude  goodwill   amortization  was  $1,868,000  and  $.07
respectively.

3.   NOTES PAYABLE

At March 31, 2002, Notes Payable consisted of:

$744,000 of an unsecured non-interest bearing note payable to an employee.  This
note is payable  based on a percentage  of revenue of certain  operations of the
Company, ranging between 2% and 3% per year, to be payable in full no later than
December 31, 2004. In the event the Company exits the media conversion  business
prior to December 31,  2004,  the  remaining  balance of this note is payable on
demand;

$200,000 of unsecured  notes  payable that bear interest at 9% per annum and are
payable on demand;

$350,000  aggregate  principal  amount  of  convertible  secured  notes  to  two
investors.  The notes have a one year term,  bear interest at the rate of 7% per
annum,  which is payable on a quarterly  basis, and are secured by all assets of
the Company.  The notes are convertible  into a number of shares of common stock
of the Company  equal to 10% of the  outstanding  shares of common  stock at any
time at the  option  of the  note  holders,  subject  to  certain  anti-dilution
adjustments  for the one-year term. The note holders were granted certain rights
for the  registration  of these  shares  under the  Securities  Act of 1933,  as
amended,  which  requires the Company to register these shares on the earlier of
April  2003,  or upon the  filing  of  certain  registration  statements  by the
Company. The notes contain restrictions that, among others, prohibit the Company
from  issuing new debt,  paying  creditors in excess of  specified  amounts,  or
prepaying the notes  without the consent of the note  holders.  In the event the
Company raises $2.5 million of equity  capital,  the Company may deposit into an
escrow account an amount equal to the outstanding  principal and interest on the
notes,  at which time all  restrictions  and liens on the assets of the  Company
will be  released.  Upon the sale or  liquidation  of  substantially  all of the
assets of the  Company,  or a business  combination  in which a majority  of the
issued and outstanding shares of common stock of the Company is transferred, the
note holders are entitled to receive all  outstanding  principal and interest on
the notes and a liquidation  preference  equal to three times the amount of such
outstanding  principal  and  interest.  In April  2002,  the  Company  issued an
additional  $150,000 aggregate  principal amount of convertible secured notes to
the same two investors with substantially the same terms.


                                        6
<PAGE>

                            Front Porch Digital, Inc.
                    Notes to Financial Statements (continued)
                                   (Unaudited)

4.   SIGNIFICANT CUSTOMERS

For the three  months ended March 31, 2002,  revenue  from two  customers,  each
exceeding  10% of  total  revenue,  aggregated  42%  and 39% of  total  revenue,
respectively.  At March 31,  2002,  these  customers  accounted  for 6% and 32%,
respectively, of accounts receivable.

For the three  months ended March 31, 2001,  revenue  from two  customers,  each
exceeding  10% of  total  revenue,  aggregated  65%  and 11% of  total  revenue,
respectively.  The Company was a subcontractor  for its largest  customer during
the three  months  ended March 31, 2001,  which owned  approximately  25% of the
outstanding common stock of the Company as of March 31, 2001.

5.   PER SHARE DATA

The  Company  reports  its  earnings  (loss)  per share in  accordance  with the
Statement of Financial  Accounting  Standards No. 128,  "Accounting for Earnings
Per Share" ("FAS 128").  Basic loss per share is  calculated  using the net loss
divided by the  weighted  average  common  shares  outstanding.  Shares from the
assumed  conversion  of  outstanding  warrants  and options are omitted from the
computations of diluted loss per share because the effect would be antidilutive.


                                        7
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

GENERAL

         When  used in this  discussion,  the words  "believes",  "anticipates",
"expects"  and similar  expressions  are  intended  to identify  forward-looking
statements.  Such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected.

         The Company's business and results of operations are affected by a wide
variety of factors that could  materially  and adversely  affect the Company and
its actual  results,  including,  but not  limited to: (1) the  availability  of
additional funds to enable the Company to successfully pursue its business plan;
(2) the uncertainties related to the effectiveness of the Company's technologies
and the development of its products and services;  (3) the Company's  ability to
maintain,  attract and integrate  management  personnel;  (4) the ability of the
Company to complete the development of its proposed products in a timely manner;
(5) the  Company's  ability  to  effectively  market and sell its  products  and
services to current and new  customers;  (6) the Company's  ability to negotiate
and maintain suitable strategic  partnerships and corporate  relationships;  (7)
the intensity of competition;  and (8) general economic conditions.  As a result
of these and other factors, the Company may experience material  fluctuations in
future operating results on a quarterly or annual basis,  which could materially
and adversely affect its business,  financial  condition,  operating results and
stock price.

         Any forward-looking statements herein speak only as of the date hereof.
The Company  undertakes  no  obligation  to publicly  release the results of any
revisions to these forward-looking statements that may be made to reflect events
or  circumstances  after  the  date  hereof  or to  reflect  the  occurrence  of
unanticipated events.

OVERVIEW

         Front Porch  Digital Inc. is a leader in the  conversion,  preservation
and management of analog and digital  content,  including text,  images,  audio,
graphics,  video and rich media. The Company has developed  proprietary software
products and performs  services  that convert  content into digital  formats for
subsequent  storage  and  on-demand  delivery  in the same or other  formats  or
digital   platforms.   This  software,   which  is  based  on  proprietary   and
patent-pending  technology,  enables  a new  paradigm  in the way  broadcasters,
content  owners,  and medical,  education and law enforcement  personnel  manage
their workflow -- a shift from  tape-oriented  warehousing  to a  fully-digital,
instant access automated archive. With additional expertise in providing onsite,
offline  data  management  services  for tape and  optical  assets,  the Company
believes it is uniquely  positioned to enable  clients to preserve,  protect and
manage information assets.

         The Company intends to use these proprietary technologies to accelerate
revenue growth and generate positive cash flows. Management has recently focused
on (i) completing the development of its products and service offerings that are
designed  to  facilitate  the  distribution  of  digital  video  content,   (ii)
developing  sales and  marketing  programs to build  awareness of the  Company's
product and service  offerings  and (iii)  building  an  infrastructure  that is
capable of effectively meeting anticipated demand for the Company's products and
services.

         The Company is in the early stages of executing  its business  strategy
and anticipates  beginning  numerous new engagements  during the next 12 months.
This expansion is contingent upon several factors, including the availability of
adequate cash resources,  the price of its products and services relative to its
competitors, and general economic and business conditions, among other factors.


                                        8
<PAGE>

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001.

         The  following  discussion  and  analysis of  financial  condition  and
results of operations are based upon the Company's financial  statements,  which
have been prepared in accordance with accounting  principles  generally accepted
in the United States.  The  preparation of these financial  statements  requires
management to make estimates and judgments  that offset the reported  amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities.  These estimates are based on historical  experience and
on various  other  assumptions  that are  believed  to be  reasonable  under the
circumstances,  the results of which form the basis for making  judgments  about
the carrying values of assets and liabilities that are not readily apparent from
other sources.  Actual results may differ from these  estimates  under different
assumptions or conditions.

         REVENUE.  Total  revenue for the three  months  ended March 31, 2002 of
$250,000 is  substantially  the same as revenue for the three months ended March
31, 2001. Revenue from the sale of software and related products for the current
quarter  increased  $73,000,  or  193%,  over the  year  ago  period  due to the
introduction  of the Company's  suite of video  software  solutions  late in the
third quarter of 2001.  Revenue  generated  from the provision of data and video
conversion  services for the current quarter has decreased $83,000, or 37%, over
the  year ago  period  primarily  due to  delays  experienced  by  customers  in
providing the data to be converted.  Substantially  all of the Company's revenue
has been derived from customers in the United States.

         GROSS  MARGIN.  For the three  months  ended  March 31,  2002,  revenue
generated from the provision of data and video conversion  services  resulted in
gross margins of $78,000, or 56% of service revenue, compared to a gross loss of
$6,000,  or (2%),  for the three  months  ended March 31,  2001.  The gross loss
generated from the provision of data and video  conversion  services  during the
quarter  ended March 31, 2001 was below the Company's  anticipated  gross margin
and resulted from the excess capacity that existed within the Company's  service
delivery function at that time.

         For the three  months  ended  March 31,  2002,  sales of  software  and
related  products  resulted  in gross  margins  of  $66,000,  or 60% of  product
revenue, compared to $20,000, or 54%, for the three months ended March 31, 2001.
This  increase  was due to the  introduction  of the  Company's  suite  of video
software solutions late in the third quarter of 2001.

         The Company plans to increase  substantially  its sales of software and
related  products and services,  and therefore  expects costs of revenue also to
increase substantially.


                                        9
<PAGE>

         SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES.  Selling,  general and
administrative  ("SG&A") expenses for the three months ended March 31, 2002 were
$766,000 compared to $1.4 million for the three months ended March 31, 2001. The
decrease in these  expenses  was  primarily  related to an overall  reduction in
employee headcount,  including the elimination of certain positions; the closing
of the office in Boulder,  Colorado; and the relocation of the New Jersey office
to a smaller  facility.  SG&A expenses for the three months ended March 31, 2002
consisted  of $550,000  for salaries  and related  benefits  for  employees  not
directly  related to the production of revenue,  $77,000 in  professional  fees,
$59,000 of facilities  costs,  $41,000 for general office expenses,  and $39,000
for travel. SG&A expenses for the three months ended March 31, 2001 consisted of
$907,000 for salaries and related benefits for employees not directly related to
the production of revenue,  $126,000 in professional fees, $80,000 of facilities
costs,  $154,000 for general office expenses,  $151,000 for travel,  and $24,000
for leased equipment.  Should the Company secure additional funding, it plans to
increase its sales and marketing efforts and, to a lesser extent, to continue to
build its infrastructure  and,  therefore,  expects expenses in this category to
increase significantly.

         RESEARCH AND DEVELOPMENT.  The Company maintains a software development
staff that designs and develops the  Company's  new products and  services.  The
Company believes that by performing most of its own software development, it can
more quickly and cost-effectively  introduce new and innovative technologies and
services.  In  addition,  the  Company  believes  it will be better  equipped to
incorporate  customer  preferences into its development plans.  During the first
quarter of 2001, the Company focused its  development  efforts on the completion
of software  tools and products that  facilitate the conversion and migration of
data from legacy media to current  technology,  the conversion of analog content
to multiple  digital  formats,  and the management and  reformatting  of digital
content on demand.  In the third  quarter of 2001,  upon the  completion  of its
initial development  efforts, the Company introduced its suite of video software
solutions.  Development  efforts  during  the  first  quarter  of 2002 have been
focused on adding features and functionality to enhance the  competitiveness  of
the products.  As a result,  research and development expenses have decreased to
$103,000 for the three  months ended March 31, 2002 from  $252,000 for the three
months ended March 31, 2001.

         DEPRECIATION AND  AMORTIZATION.  Depreciation and amortization  expense
was  $212,000  for the three  months  ended March 31, 2002 and  $407,000 for the
three months ended March 31, 2001.  The decrease in these expenses was primarily
attributable  to the issuance in July 2001 of Statement of Financial  Accounting
Standard (SFAS) No. 142, "Goodwill and Other Intangible Assets" by the Financial
Accounting  Standards Board, which requires that all amortization of goodwill as
a charge to earnings  ($198,000  for the three  months  ended March 31, 2001) be
eliminated.   Depreciation  expense  consisted  of  depreciation  of  furniture,
equipment,   software  and  improvements.   Amortization  expense  consisted  of
amortization  of  intangible  assets,  and for the three  months ended March 31,
2001,  amortization of the excess cost of the media services operations over the
fair value of the net assets acquired.


                                       10
<PAGE>

         LOSS FROM OPERATIONS. During the three months ended March 31, 2002, the
Company incurred a loss from operations of $937,000.  The loss was primarily the
result of $766,000 in selling,  general and administrative expenses and $103,000
of research and development expenses previously  discussed.  These expenses were
incurred to enable the Company to continue its technology  development and begin
marketing its new suite of video software solutions.

LIQUIDITY AND CAPITAL RESOURCES

         At  March  31,  2002,  the  Company  had  $361,000  of  cash  and  cash
equivalents.  For the first quarter of 2002, the issuance of convertible secured
notes and the issuance of common stock were the  principal  sources of liquidity
for the Company.  In March 2002, the Company issued $350,000 aggregate principal
amount of convertible secured notes to two investors. In March 2002, the Company
issued 400,000 shares of unregistered  common stock to an individual investor in
consideration of aggregate proceeds of $50,000.

         The  current  level of cash flows  from  operating  activities  are not
sufficient  to enable the  Company to  continue  to operate  and to execute  its
business strategy.  As a result, the Company is seeking additional  capital.  In
the interim,  the Company is managing its investments in infrastructure based on
its cash position and the near term cash flow  generated  from  operations.  The
Company anticipates having sufficient cash to continue operations into the third
quarter of 2002. These conditions  raise  substantial  doubt about the Company's
ability to continue as a going concern.  The Company's actual financial  results
may differ  materially  from the stated plan of  operations.  Factors  which may
cause a change from the Company's plan of operations vary, but include,  without
limitation,  decisions of the Company's management and board of directors not to
pursue the stated plan of operations  based on its reassessment of the plan, and
general economic conditions.  If the Company is successful in raising additional
capital,  the Company anticipates that its operating expenses will increase over
the next 12 months as it accelerates  execution of its business strategy.  There
can be no assurance that additional  capital will be available on terms that are
acceptable  to the Company.  Additionally,  there can be no  assurance  that the
Company's  business  will  generate  cash  flows  at or  above  current  levels.
Accordingly,  the  Company  may choose to defer  capital  expenditure  plans and
extend vendor payments for additional cash flow flexibility.

         It is expected  that the  Company's  principal  uses of cash will be to
provide  working  capital  and to  finance  capital  expenditures  and for other
general  corporate   purposes,   including  financing  its  marketing  strategy.
Depending  upon the  level of sales  generated  in the near  term,  the  Company
expects capital expenditures to be approximately $500,000 during the next twelve
months.  The amount of spending in each  respective  area is dependent  upon the
total capital available to the Company.


                                       11
<PAGE>

         As of March 31,  2002,  the  Company had liquid  assets  (cash and cash
equivalents  and accounts  receivable)  of $623,000  and current  assets of $1.1
million.  These assets were  primarily  derived  from  operating  and  financing
activities.  Long-term  assets of $6.4  million  consisted of the excess of cost
over fair  value of the  media  services  assets  acquired  during  2000 of $3.7
million,  software  and  intellectual  property of $1.5 million and property and
equipment of $1.1 million.

         Current liabilities of $3.9 million at March 31, 2002 consisted of $1.3
million of accounts payable;  $952,000 of deferred  revenue,  which consisted of
deposits and progress  payments  received on engagements  currently in progress;
$550,000 of notes  payable,  $481,000 of accrued  expenses;  $343,000 of accrued
expenses to  employees,  of which  $168,000 was payable to an employee  upon the
closing of an  offering  that  raises  gross  proceeds  of at least $5  million;
$160,000  for the  current  portion of a note  payable to an  employee  that was
assumed upon the acquisition of the media services  operations,  and $142,000 of
accrued vacation.

         The Company's  working capital deficit was $2.8 million as of March 31,
2002 for the reasons described above.

         The Company  used net cash of $406,000 in operating  activities  during
the three months  ended March 31, 2002 and $1.4 million in operating  activities
during the three months  ended March 31, 2001,  primarily as a result of the net
losses incurred during the periods.

         The Company used net cash of $27,000 in investing activities during the
three  months  ended  March 31,  2002,  of which  $14,000  was used for  capital
expenditures  and $13,000 was used for the development of the Company's suite of
video  software  solutions.  During the three months  ended March 31, 2001,  the
Company used $173,000 in investing  activities,  of which  $155,000 was used for
capital expenditures.

         Financing  activities  provided  net cash of $400,000  during the three
months  ended March 31, 2002.  During the three months ended March 31, 2001,  no
cash was provided by, or used in, financing activities.

         It is expected  that the  Company's  principal  uses of cash will be to
provide  working   capital,   to  finance  capital   expenditures   and  product
development, and for other general corporate purposes. The amount of spending in
each respective  area will be dependent upon the total capital  available to the
Company.


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<PAGE>

PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS --

         The Company is not subject to any material legal proceedings.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K:

         The following exhibits are filed herewith:

         (a)  Exhibits None

         (b)  Current Reports on Form 8-K or 8-K/A

The Company  filed a Current  Report on Form 8-K dated March 1, 2002  announcing
the termination of its consulting  agreement with the Armand Group, Inc. and the
concurrent  resignations  of Timothy  Petry as an officer  and  director  of the
Company, and the resignation of Jean Reiczyk, Thomas Sweeney and Robert Kocol as
directors of the Company.



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<PAGE>

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned,  thereunto
duly authorized.

Dated:  May 14, 2002                   FRONT PORCH DIGITAL INC.

                                       By: /S/ DONALD MAGGI
                                           -------------------------------
                                           Donald Maggi
                                           Chief Executive Officer
                                           (principal executive officer)


                                       By: /S/ KENNETH LYNCH
                                           -------------------------------
                                           Kenneth Lynch
                                           Chief Financial Officer
                                           (principal financial and
                                            accounting officer)



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