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 September 30, 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 October 31, 2002,  33,768,573  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.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2002
                                   [UNAUDITED]


ASSETS
Current assets:
  Cash and cash equivalents                                        $    622,876
  Accounts receivable - trade & other                                 1,167,733
  Other current assets                                                  519,929
                                                                   ------------
Total current assets                                                  2,310,538

Property and equipment, net                                           1,160,158

Software development costs, net                                         215,443

Software and intellectual property, net
 of accumulated amortization of $460,500                              1,870,170

Excess cost over fair value of net assets acquired, net
 of accumulated amortization of $946,093                              3,792,149

Other assets                                                            109,699
                                                                   ------------
Total assets                                                       $  9,458,157
                                                                   ============

Liabilities and stockholders' equity:
Current liabilities:
  Current portion of note payable                                       160,000
  Current portion of lease obligation                                    67,105
  Notes payable (net of discount)                                       425,000
  Accounts payable                                                    1,614,867
  Accrued expenses                                                    1,607,020
  Accrued expenses - employees                                          302,142
  Accrued vacation                                                      134,070
  Deferred revenue                                                      451,470
                                                                   ------------
Total current liabilities                                             4,761,674
                                                                   ============

Note payable, net of current portion                                    583,963
Other long-term liabilities                                              50,205

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
   32,278,206 shares issued and outstanding                              32,331
  Additional paid in capital                                         23,538,683
  Accumulated deficit                                               (19,508,699)
                                                                   ------------
Total stockholders' equity                                            4,062,315
                                                                   ============

Total liabilities and stockholders' equity                         $  9,458,157
                                                                   ============


                             SEE ACCOMPANYING NOTES
<PAGE>


                            FRONT PORCH DIGITAL, INC.
                 Condensed Consolidated Statements of Operations
                                   [Unaudited]

<TABLE>
<CAPTION>
                                               Three months ended September 30,       Nine months ended September 30,
                                                     2002              2001               2002               2001
                                               ---------------------------------------------------------------------
<S>                                            <C>                <C>                <C>                <C>
Revenues:
  Products                                     $    659,748       $      2,700       $    866,204       $     51,660
  Services                                          556,367            169,244          1,380,259            227,144
  Services - affiliate                                   --                 --                 --            169,716
                                               ------------       ------------       ------------       ------------
Total revenue                                     1,216,115            171,944          2,246,463            448,520

Cost of revenue:
  Products                                          220,019              2,100            300,228             25,098
  Services                                          219,092            136,537            468,268            559,984
                                               ------------       ------------       ------------       ------------
                                                    439,111            138,637            768,496            585,082
                                               ------------       ------------       ------------       ------------
Gross margin (loss)                                 777,004             33,307          1,477,967           (136,562)


Selling, general and administrative               1,271,782          1,315,976          2,933,267          4,435,917
Research and development                            212,176             92,082            430,953            502,146
Depreciation                                        278,569            146,266            584,761            429,351
Amortization                                         60,073            256,756            177,931            770,268
                                               ------------       ------------       ------------       ------------
                                                  1,822,600          1,811,080          4,126,912          6,137,682
                                               ------------       ------------       ------------       ------------
Loss from operations                             (1,045,596)        (1,777,773)        (2,648,945)        (6,274,244)

Other income (expense):
Interest and other income                             1,297              6,072              2,697             35,076
Interest expense                                   (144,049)            (4,500)          (161,987)           (13,500)
                                               ------------       ------------       ------------       ------------
                                                   (142,752)             1,572           (159,290)            21,576
                                               ------------       ------------       ------------       ------------
Net loss                                       $ (1,188,348)      $ (1,776,201)      $ (2,808,235)      $ (6,252,668)
                                               ============       ============       ============       ============

Weighted average number of common
shares outstanding - basic and diluted           29,886,714         25,313,200         27,565,231         24,820,070

Loss per common share - basic and diluted      $      (0.04)      $      (0.07)      $      (0.10)      $      (0.25)
                                               ============       ============       ============       ============
</TABLE>



                             SEE ACCOMPANYING NOTES

<PAGE>


                            FRONT PORCH DIGITAL, INC.
                            Statements of Cash Flows
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                              Nine Months Ended September 30,
                                                                                   2002            2001
<S>                                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                       $(2,808,235)    $(6,252,668)
Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation and amortization                                                    762,692       1,199,619
  Amortization of debt discount                                                    125,000              --
  Non-cash issuance of common stock to employees and consultants                   392,387              --
  Stock option compensation cost                                                   131,486       1,193,236
  Cost in excess of fair market value of subsidiary                                     --              --
  Changes in operating assets and liabilities:
    Decrease in accounts receivable - affiliate                                         --         222,410
    Decrease (increase) in accounts receivable                                      68,912        (268,806)
    Decrease (increase) in other current assets                                    471,868        (205,467)
    (Decrease) increase in accounts payable                                        (24,665)        307,506
    Increase (decrease) in accrued expenses                                        303,226         (84,687)
    (Decrease) increase in accrued expenses - employees                           (167,861)        300,000
    (Decrease) increase in accrued vacation                                        (12,132)         72,248
    (Decrease) increase in deferred revenue                                       (327,730)        576,229
    Other changes in operating activities                                           86,257         (38,812)
                                                                               -----------     -----------
Net cash used in operating activities                                             (998,795)     (2,979,192)
                                                                               -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures                                                              (206,569)       (303,259)
Cash acquired from ManagedStorage                                                  859,706              --
Software development costs                                                         (59,917)       (298,968)
Other investing activities                                                         (14,988)        (28,881)
                                                                               -----------     -----------
Net cash used in investing activities                                              578,232        (631,108)
                                                                               -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable                                                         600,000              --
Proceeds from issuance of common stock                                              50,000       1,521,788
                                                                               -----------     -----------
Net cash provided by financing activities                                          650,000       1,521,788
                                                                               -----------     -----------

Net increase (decrease) in cash and cash equivalents                               229,437      (2,088,512)
Cash and cash equivalents, beginning of period                                     393,439       2,444,527
                                                                               -----------     -----------
Cash and cash equivalents, end of period                                           622,876         356,015
                                                                               ===========     ===========

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid for interest                                                         $    53,342     $        --
                                                                               ===========     ===========

Intellectual property acquired from ManagedStorage                             $   721,126     $        --
                                                                               ===========     ===========

Other non-cash net assets aquired from ManagedStorage                          $   537,122     $        --
                                                                               ===========     ===========
</TABLE>



                             SEE ACCOMPANYING NOTES

<PAGE>


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


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION

Front  Porch  Digital  Inc.  and its  subsidiaries  (the  "Company")  are 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.  The Company's  software-based
methodologies and intellectual property are incorporated  throughout its service
offerings to allow content to be captured, converted, managed and distributed in
digital form efficiently and cost effectively.

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 nine months ended September 30, 2002, the Company incurred
net losses and negative cash flows from operating activities of $2.8 million and
$1.0 million,  respectively.  The Company has incurred losses since commencement
of  operations  in its current line of business  and expects  losses to continue
during the fourth quarter of 2002.  Further,  at September 30, 2002, the Company
has a working capital deficit of $2.5 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  September  2001,  has been awarded new contracts
worth  approximately $5 million.  The Company has completed  approximately  $2.0
million of these  contracts  through  September 30, 2002 and expects to complete
the remainder during 2002 and the first half of 2003.  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  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 and nine months ended September 30, 2002 are not
necessarily  indicative  of the operating  results  expected for the year ending
December 31, 2002.

PRINCIPLES OF CONSOLIDATION

The  consolidated  financial  statements  include  the  accounts  of Front Porch
Digital,  Inc. and its  wholly-owned  subsidiary.  All significant  intercompany
transactions and balances have been eliminated in consolidation.



                                       5
<PAGE>


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


USE OF ESTIMATES

The  preparation  of the  financial  statements in  conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

RECLASSIFICATIONS

Certain  reclassifications  have been made to prior year amounts and balances to
conform with the 2002 presentation.

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.  During the nine months  ended  September
30,2002,  the Company  completed the initial  impairment  test as required under
SFAS No. 142 and determined  that the fair value of its reporting units exceeded
their carrying values as of January 1,2002.  The Company will perform an ongoing
annual impairment test, as required under SFAS No. 142, during the third quarter
of each year.

The  Company's  net loss and loss per share for the nine months ended  September
30, 2001 adjusted to exclude  goodwill  amortization  was $5.7 million and $.23,
respectively.  Net loss and loss per share for the three months ended  September
30, 2001 adjusted to exclude  goodwill  amortization  was $1.6 million and $.06,
respectively.

3. ACQUISITION OF MANAGED STORAGE INTERNATIONAL FRANCE, INC

On July 31, 2002,  the Company  acquired all the  outstanding  shares of capital
stock of  ManagedStorage  International  France,  a French  SOCIETE  PAR ACTIONS
SIMPLIFEE("MSI  France"),  and certain assets of  ManagedStorage  International,
Inc., a Delaware corporation  ("ManagedStorage"),  pursuant to a Stock and Asset
Purchase Agreement dated as of July 31, 2002 (the "Purchase Agreement"), between
the Company and  ManagedStorage.  The consideration paid by the Company pursuant
to the Purchase Agreement consisted of (a) 5,000,000 shares of common stock, par
value $.001 per share,  of the Company  (the  "Company  Common  Stock");  (ii) a
warrant for the purchase of up to 1,750,000  shares of Company Common Stock at a
price of $2.00 per share, exercisable immediately and expiring on July 31, 2012;
and (iii) a warrant for the purchase of up to 1,750,000 shares of Company Common
Stock at a price of $4.00 per share,  exercisable  immediately  and  expiring on
July 31,  2012.  In  addition,  the  Company  agreed to issue and  deliver up to
2,500,000  additional shares of Company Common Stock pursuant to the terms of an
earn-out as more fully described in Section 1.3(b) of the Purchase Agreement.

Pursuant  to the terms of the  Purchase  Agreement,  the Company  acquired  from
ManagedStorage  (i) all of the issued and outstanding shares of capital stock of
MSI France and (ii) certain software and related  intellectual  property rights,
including   DIVArchive,   a  software   solution   designed  to  assist   media,
entertainment  and  medical  companies  in  the  preservation,   management  and
accessing of digital content consisting of large digital data files.

Pursuant  to the  Purchase  Agreement,  ManagedStorage  entered  into a  Lock-Up
Agreement   with  the   Company   whereby,   subject  to   certain   exceptions,
ManagedStorage agreed not sell, assign, transfer, pledge or otherwise dispose of
any Company  Common Stock owned or acquired by it or any interest  therein prior
to July 31, 2003, except as expressly



                                       6
<PAGE>


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


permitted  by  the  Lock-Up  Agreement.  In  connection  with  the  transaction,
ManagedStorage  was granted certain demand  registration  rights with respect to
the shares of Company  Common Stock acquired by  ManagedStorage  pursuant to the
terms of the Purchase Agreement.

The  acquisition  has been accounted for as a purchase  consistent with SFAS No.
141, "Business Combinations". Results of operations from the date of acquisition
for the acquired entity are included in the consolidated statement of operations
for the three months ended  September 30, 2002.  The total purchase price of the
acquisition  at closing and  recorded as of  September  30, 2002  excluding  any
earn-out was $2.1 million, which has been allocated as follows:

Purchase price allocation at September 30, 2002:

         Net assets acquired                $ 1,400,000
         Intellectual property                  700,000
                                            -----------
         Total purchase price               $ 2,100,000
                                            ===========

This purchase price allocation does not include any contingent  consideration as
a result of the earn-out  provisions of the Purchase  Agreement.  As of November
14, 2002,  management has determined  that the realization of the full amount of
the contingent consideration under the earn-out provisions of the acquisition is
probable.  The full amount of  contingent  consideration  is $750,000,  and this
amount will be recorded as goodwill  during the fourth quarter of fiscal 2002 if
realized.

The  following  pro forma  results of  operations  for the three months and nine
months  ended  September  30,  2002  and  2001  are  presented  to  reflect  the
acquisition as if it had occurred as of the beginning of the periods presented.

PRO FORMA RESULTS OF OPERATIONS:

<TABLE>
<CAPTION>
                                                              [Pro forma]
                                                              [Unaudited]
                                          Three months ended                Nine months ended
                                             September 30,                    September 30,
                                         2002            2001             2002             2001
                                     ------------------------------------------------------------
<S>                                  <C>              <C>            <C>               <C>
Revenues                             $ 1,433,011        763,544      $ 4,543,059        2,765,320
Loss from continuing operations        1,227,947      4,103,939        4,114,428       13,099,642
Net loss                               1,382,172      4,122,967        4,365,991       13,384,766
Net loss per share                          $.04           $.14             $.14             $.45

</TABLE>

4. NOTES PAYABLE

At September 30, 2002, notes payable consisted of:

Approximately  $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;



                                       7
<PAGE>


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


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

$100,000 of an unsecured note payable that bears interest at 7% per annum and is
payable on demand; and

$500,000  aggregate  principal  amount  of  convertible  secured  notes  to  two
investors.  The notes mature on March 27, 2003,  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 at any time at the option of the note
holders into a number of shares of common  stock of the Company  equal to 14% of
the  outstanding  shares of  common  stock,  subject  to  certain  anti-dilution
adjustments.  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  November  2000,  the  Emerging  Issues  Task Force  (EITF) of the  Financial
Accounting   Standards   Board  (FASB)  reached  a  consensus  on  Issue  00-27,
Application of EITF Issue 98-5,  "Accounting  for  Convertible  Securities  with
Beneficial  Conversion Features or Contingently  Adjustable Conversion Ratios to
Certain Convertible Instruments," whereby it was concluded that an issuer should
calculate  the  intrinsic  value of a  conversion  option  using  the  effective
conversion price,  based on the proceeds  received  allocated to the convertible
instrument  instead  of the  specified  conversion  prices  in  the  instrument.
Accordingly,  the Company  recorded a debt discount on the  convertible  secured
notes of $500,000  that will be amortized  to interest  expense over the term of
the debt.  The  Company  recorded  non-cash  interest  expense  related  to debt
discount of $125,000 during the three and nine months ended September 30, 2002.

5. SIGNIFICANT CUSTOMERS

For the nine months ended September 30, 2002, revenue from one customer exceeded
10% of total revenue,  aggregated  41% of total revenue.  At September 30, 2002,
this customer accounted for 6% of accounts receivable.

For the nine months ended September 30, 2001, revenue from three customers, each
exceeding 10% of total revenue, aggregated 72% of total revenue. The Company was
a subcontractor  for its largest customer during the nine months ended September
30, 2001, which owned  approximately 25% of the outstanding  common stock of the
Company as of September 30, 2001.

6. PER SHARE DATA

The  Company  reports  its loss per share in  accordance  with the SFAS No. 128,
"Accounting  for Earnings Per Share".  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.



                                       8
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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.


RESULTS OF OPERATIONS

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



                                       9
<PAGE>



United States. The preparation of these financial statements requires management
to make  estimates  and  judgments  that affect 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.


FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001.

For the three months ended  September 30, 2002, the Company  reported a net loss
of $1.2 million, or ($.04) per share, compared to a net loss of $1.8 million, or
($.07) per share, for the three months ended September 30, 2001.

         REVENUE. Total revenue for the three months ended September 30, 2002 of
$1.2 million has  increased  from total revenue of $172,000 for the three months
ended  September  30,  2001.  For the three  months  ended  September  30, 2002,
$660,000,  or 54% of total revenue,  was  attributable  to sales of software and
related products.  The remaining $556,000,  or 46%, was attributable to data and
video conversion  services.  The significant increase in revenue was largely due
to new  customer  contracts  generated  during  2002  in the  delivery  of  data
conversion services and the acquisition of MSI France,  which generated $542,000
of the $660,000 in software and related services  revenue.  Substantially all of
the Company's  revenue has been derived from  customers in the United States and
through the acquisition of MSI France, Europe.

         GROSS MARGIN. Total gross margin was $777,000, or 64% of total revenue,
for the three months ended  September  30, 2002  compared to $33,000,  or 19% of
total  revenue,  for the three months ended  September 30, 2001. The increase in
total  gross  margin was  principally  due to  increased  throughput  within the
Company's service delivery function.  In September 2001, the Company reduced its
headcount  within the service  delivery  group by 45% and took other  actions to
reduce costs.  For the three months ended September 30, 2002,  sales of software
and related products  resulted in gross margins of 67% and the provision of data
and video  conversion  services  resulted in gross margins of 61%. For the three
months ended September 30, 2001, sales of software and related products resulted
in gross margins of 22% and the provision of data and video conversion  services
resulted in negative  gross margins of 19%. The Company  plans to  significantly
increase its revenue,  and therefore  expects  expenses in this category to also
increase substantially.

         SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES.  Selling,  general and
administrative expenses for the three months ended September 30, 2002 were $1.27
million,  as compared to $1.3 million for the three months ended  September  30,
2001. The slight reduction in expenses reflects additional costs associated with
supporting  the  increased  revenue  levels and an increase in costs for the MSI
France acquisition, offset by a decrease in expenses that were 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.  Selling, general and
administrative  expenses for the three months ended September 30, 2002 consisted
primarily  of $755,000  for salaries  and related  benefits  for  employees  not
directly  related to the  production of revenue,  $160,000 in  professional  and
consulting fees, $74,000 for travel,  $118,000 of facilities costs, and $164,000
for general office expenses.  Selling,  general and administrative  expenses for
the three months ended  September 30, 2001  consisted  primarily of $900,000 for
salaries  and  related  benefits  for  employees  not  directly  related  to the
production  of  revenue,  $150,000  in  professional  fees,  $59,000 for travel,
$81,000 of facilities costs, and $110,000 for general office expenses.  When the
Company secures additional funding, it plans to increase its sales and marketing
efforts  and,  to a lesser  extent,  continue to build its  infrastructure  and,
therefore, expects expenses in this category to increase significantly.



                                       10
<PAGE>


         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 third
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 nine months of 2002 have been
focused on adding features and functionality to enhance the  competitiveness  of
these  products.  Research and  development  expenses for the three months ended
September 30, 2002 were $212,000  compared to $92,000 for the three months ended
September 30, 2001.

         DEPRECIATION AND  AMORTIZATION.  Depreciation and amortization  expense
was $339,000 for the three months ended  September 30, 2002 compared to $403,000
for the three months ended September 30, 2001.  Amortization  expense  primarily
consisted of  amortization  of the excess cost of the media services  operations
over the fair value of the net assets acquired and other intangible  assets. The
decrease in these  expenses was primarily  attributable  to the issuance in July
2001 of 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 ($197,000 for the three months ended September 30, 2001) be
eliminated.   Depreciation   expense  consists  of  depreciation  of  furniture,
equipment, software and improvements.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001.

For the nine months ended September 30, 2002, the Company reported a net loss of
$2.8 million,  or ($.10) per share,  compared to a net loss of $6.3 million,  or
($.25) per share, for the nine months ended September 30, 2001.

         REVENUE. Total revenue for the nine months ended September 30, 2002 was
$2.2  million,  an increase of 400% from total  revenue of $449,000 for the nine
months ended  September 30, 2001.  Revenue from the sale of software and related
products for the nine months ended  September 30, 2002  increased  $815,000,  or
1577%,  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  and  the
acquisition  of MSI  France  in the third  quarter  of 2002,  which  acquisition
generated  $542,000  of  the  $815,000  increase.  Revenue  generated  from  the
provision  of data and  video  conversion  services  for the nine  months  ended
September 30, 2002 increased $983,000,  or 248%, over the year ago period due to
delays  experienced  by customers  in providing  the data to be converted in the
prior period and  substantial  growth in the current  period in the sale of data
conversion services. Substantially all of the Company's revenue has been derived
from  customers in the United States and through the  acquisition of MSI France,
Europe.

GROSS MARGIN.  For the nine months ended September 30, 2002,  revenue  generated
from the  provision  of data and video  conversion  services  resulted  in gross
margins of  $912,000,  or 61% of service  revenue,  compared  to a gross loss of
$163,000, or (41)%, for the nine months ended September 30, 2001. The gross loss
generated from the provision of data and video  conversion  services  during the
nine months ended September 30, 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 nine months  ended  September  30,  2002,  sales of software and related
products  resulted  in gross  margins of  $566,000,  or 39% of product  revenue,
compared to $27,000,  or 51%, for the nine months ended September 30, 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.



                                       11
<PAGE>


         SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES.  Selling,  general and
administrative  expenses for the nine months ended  September 30, 2002 were $2.9
million  compared to $4.4 million for the nine months ended  September 30, 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. Selling, general and administrative expenses for the nine
months ended September 30, 2002 consisted of $1,496,000 for salaries and related
benefits  for  employees  not  directly  related to the  production  of revenue,
$698,000 in  professional  and  consulting  fees,  $355,000  for general  office
expenses,  $237,000 of  facilities  costs,  and  $147,000  for travel.  Selling,
general and administrative expenses for the nine months ended September 30, 2001
consisted of $3.1 million for salaries and related  benefits for  employees  not
directly  related to the production of revenue,  $449,000 in professional  fees,
$288,000  for travel,  $249,000 of  facilities  costs and  $355,000  for general
office  expenses.  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.  As discussed above, the Company  maintains a
software  development staff that designs and develops the Company's new products
and services. Development efforts during the first nine months of 2002 have been
focused on adding features and functionality to enhance the  competitiveness  of
the Company's products.  Research and development expenses decreased to $431,000
for the nine months ended  September  30, 2002 from $502,000 for the nine months
ended September 30, 2001.

         DEPRECIATION AND  AMORTIZATION.  Depreciation and amortization  expense
was $763,000 for the nine months ended  September  30, 2002 and $1.2 million for
the nine months ended  September  30, 2001.  The decrease in these  expenses was
primarily  attributable to the issuance in July 2001 of 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 ($593,000 for
the nine months ended  September 30, 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
nine months ended  September  30, 2001,  amortization  of the excess cost of the
media services operations over the fair value of the net assets acquired. During
the six months ended June 30, 2002,  The Company  completed  the initial test as
required under SFAS No. 142 and determined  that the fair value of its reporting
units  exceeded  their  carrying  value as of January 1, 2002.  The Company will
perform an ongoing  annual  impairment  test,  as  required  under SFAS No. 142,
during the third quarter of each year.


LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2002,  the Company had liquid assets (cash and cash
equivalents and accounts  receivable) of $1.8 million and current assets of $2.3
million.  These assets were primarily derived from financing  activities and the
acquisition  of MSI France.  Long-term  assets of $7.2 million  consisted of the
excess of cost over fair value of the media services assets acquired during 2000
of $3.8 million,  software and intellectual  property of $2.1 million,  property
and equipment of $1.2 million and other assets of $0.1 million.

         Current  liabilities of $4.8 million at September 30, 2002 consisted of
$1.6 million of accounts payable;  $451,000 of deferred revenue, which consisted
of progress payments received on engagements currently in progress;  $800,000 of
notes payable offset by the  unamortized  portion of debt discount in the amount
of $375,000,  $1.6 million of accrued expenses;  $302,000 of accrued expenses to
employees,  of which  $168,000 is 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,  $134,000 of accrued vacation, and
$67,000 of current lease liability.



                                       12
<PAGE>


         The Company's  working capital deficit was $2.5 million as of September
30, 2002 for the reasons described above.

         The  Company  used net cash of $1.0  million  in  operating  activities
during the nine months  ended  September  30, 2002 and $3.0 million in operating
activities  during the nine months  ended  September  30,  2001,  primarily as a
result of the net losses incurred during the periods.

         Excluding  the  $860,000  in cash  acquired in the  acquisition  of MSI
France, the Company used net cash of $282,000 in investing activities during the
nine months ended  September  30, 2002,  of which  $207,000 was used for capital
expenditures  and $75,000 was used for the development of the Company's suite of
video software solutions and development  efforts.  During the nine months ended
September 30, 2001, the Company used $631,000 in investing activities,  of which
$303,000  was  used  for  capital  expenditures  and  $328,000  was used for the
development of the Company's suite of video software solutions.

Financing  activities provided net cash of $650,000 during the nine months ended
September  30,  2002.  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.  In March and April  2002,  the Company  issued
$500,000  aggregate  principal  amount  of  convertible  secured  notes  to  two
investors. In July 2002, the Company borrowed $100,000 from one investor. During
the nine months ended  September 30, 2001, net cash of $1.5 million was provided
by financing  activities  due to the sale of 863,000  shares of common stock and
warrants to purchase 863,000 shares of common stock.

         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 first
quarter of 2003. 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.


  ITEM 3. CONTROLS AND PROCEDURES

         (a) Based upon an evaluation  performed  within 90 days of this Report,
our Chief Executive  Officer  ("CEO") and Chief  Financial  Officer ("CFO") have
each  concluded  that our  disclosure  controls and  procedures are effective to
ensure  that  material  information  relating  to our  Company  is made known to
management,  including the CEO and CFO,  particularly during the period when our
periodic  reports  are  being  prepared,  and that  our  internal  controls  are
effective to provide reasonable assurances that our financial condition, results
of operations and cash flows are fairly presented in all material respects.



                                       13
<PAGE>


         (b) The CEO and CFO each note  that,  since the date of his  evaluation
until  the date of this  Report,  there  have  been no  significant  changes  in
internal controls or in other factors that could  significantly  affect internal
controls,   including  any   corrective   actions  with  regard  to  significant
deficiencies and material weaknesses.








                                       14
<PAGE>


PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS -

                  The Company is not subject to any material legal proceedings.


ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

                  No changes in securities and use of proceeds.


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 July 31, 2002  announcing
the acquisition of all the outstanding shares of capital stock of ManagedStorage
International France and certain assets of ManagedStorage International, Inc.

The Company filed a Current  Report on Form 8-K dated August 14, 2002  providing
certifications  of its Chief Executive  Officer and Chief Financial Officer with
respect to its  Quarterly  Report on Form  10-QSB for the period  ended June 30,
2002 as required by 18 U.S.C.  1350  (Section 906 of the  Sarbanes-Oxley  Act of
2002).











                                       15
<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:  November 14, 2002                FRONT PORCH DIGITAL INC.

                                         By: /s/ Donald Maggi
                                             ---------------------------------
                                             Donald Maggi
                                             Chief Executive Officer (principal
                                             executive officer)


                                         By: /s/ Paul McKnight
                                             ---------------------------------
                                             Paul McKnight
                                             Chief Financial Officer (principal
                                             financial and accounting officer)











                                       16
<PAGE>


                  Certification of Principal Executive Officer
                           Pursuant to 18 U.S.C. 1350
                 (SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)


I, Donald Maggi, certify that:

1. I have reviewed this  quarterly  report on Form 10-QSB of Front Porch Digital
Inc.;

2. Based on my  knowledge,  this  quarterly  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 quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  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 quarterly 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 we 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 quarterly 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
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly 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 function):

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
quarterly  report  whether or not 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.


                                             By: /s/ Donald Maggi
                                                 -------------------------
                                                 Name:  Donald Maggi
                                                 Title: Executive Officer

November 14, 2002





                                       17
<PAGE>


                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                           Pursuant to 18 U.S.C. 1350
                 (SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)


I, Paul McKnight, certify that:

1. I have reviewed this  quarterly  report on Form 10-QSB of Front Porch Digital
Inc.;

2. Based on my  knowledge,  this  quarterly  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 quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  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 quarterly 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 we 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 quarterly 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
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly 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 function):

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
quarterly  report  whether or not 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.


                                             By: /s/ Paul McKnight
                                                 ------------------------------
                                                 Name:  Paul McKnight
                                                 Title: Chief Financial Officer

November 14, 2002





                                       18