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, 2001


             [ ] 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)

                                3005 47th Street,
                                    Suite F3
                             Boulder, Colorado 80301
                             -----------------------
                 (Former address, if changed since last report)

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, 2001,  25,532,439  shares of the issuer's  common  stock,  par
value $.001, were outstanding.

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



<PAGE>

                            FRONT PORCH DIGITAL INC.
                                   FORM 10-QSB
                                      INDEX

                                                                            PAGE

PART I.     Financial Information                                             3

Item 1.     Financial Statements (Unaudited):

            Balance Sheet - September 30, 2001                                3

            Statements of Operations - Three Months ended September 30, 2001  4
            and 2000, Nine Months ended September 30, 2001 and for the
            period beginning February 1, 2000 (commencement of
            operations) to September 30, 2000

            Statements of Cash Flows - Nine Months ended September 30, 2001   5
            and for the period beginning February 1, 2000
            (commencement of operations) to September 30, 2000

            Notes to Financial Statements                                     6

Item 2.     Management's Discussion and Analysis                              9

PART II.    Other Information:                                               14

Item 1.     Legal Proceedings                                                14

Item 2.     Changes in Securities and Use of Proceeds                        14

Item 5.     Other Information                                                14

Item 6.     Exhibits and Reports on Form 8-K                                 14

Signatures                                                                   15

                                        2
<PAGE>


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS -


                       Front Porch Digital, Inc.

                             Balance Sheet

                          September 30, 2001
                              (Unaudited)

ASSETS
Current assets:
  Cash and cash equivalents                                            $356,015
  Accounts receivable                                                   268,806
  Other current assets                                                  282,109
                                                                ---------------
Total current assets                                                    906,930

Property and equipment, net                                           1,310,682

Software development costs                                              298,968

Software and intellectual property, net of accumulated
amortization of $225,000                                              1,425,213
Excess cost over fair value of net assets acquired, net of
accumulated amortization of $747,000                                  4,803,628
Other assets                                                             55,398
                                                                ---------------
Total assets                                                         $8,800,819
                                                                ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of note payable - employee                           $160,000
  Notes payable                                                         200,000
  Accounts payable                                                      788,914
  Accrued expenses                                                      291,354
  Accrued expenses - employees                                          568,000
  Accrued vacation                                                      146,202
  Deferred revenue                                                      576,229
                                                                ---------------
Total current liabilities                                             2,730,699

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, 25,503,503 shares and
  outstanding                                                            25,504
  Additional paid-in capital                                         20,329,869
  Accumulated deficit                                               (14,869,216)
                                                                ---------------
Total stockholders' equity                                            5,486,157
                                                                ---------------
Total liabilities and stockholders' equity                           $8,800,819
                                                                ===============


SEE ACCOMPANYING NOTES.

                                  3
<PAGE>

                       Front Porch Digital, Inc.

                       Statements of Operations
                              (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                  PERIOD BEGINNING
                                                                                                                  FEBRUARY 1, 2000
                                                                                                                  (COMMENCEMENT OF
                                                  THREE MONTHS ENDED   THREE MONTHS ENDED   NINE MONTHS ENDED      OPERATIONS) TO
                                                  SEPTEMBER 30, 2001   SEPTEMBER 30, 2000   SEPTEMBER 30, 2001   SEPTEMBER 30, 2000
                                                ------------------------------------------------------------------------------------
<S>                                                 <C>                 <C>                  <C>                   <C>
Revenues:
Products                                                 $2,700               $   -              $51,660               $38,722
Services                                                169,244               3,224              227,144                17,959
Services - affiliate                                          -                   -              169,716                     -
                                                ------------------------------------------------------------------------------------
Total revenue                                           171,944               3,224              448,520                56,681

Cost of revenue:
Products                                                  2,100                   -               25,098                23,550
Services                                                136,537                 200              559,984                 1,658
                                                ------------------------------------------------------------------------------------
                                                        138,637                 200              585,082                25,208
                                                ------------------------------------------------------------------------------------
Gross margin                                             33,307               3,024             (136,562)               31,473
                                                ------------------------------------------------------------------------------------

Selling, general and administrative expenses          1,315,976             306,836            4,435,917             1,448,895
Research and development                                 92,082                   -              502,146                     -
Depreciation                                            146,266              53,151              429,351                61,813
Amortization                                            256,756                   -              770,268                     -
Consulting fees                                               -           1,928,724                    -             1,928,724
                                                ------------------------------------------------------------------------------------
                                                      1,811,080           2,288,711            6,137,682             3,439,432
                                                ------------------------------------------------------------------------------------

Loss from operations                                 (1,777,773)         (2,285,687)          (6,274,244)           (3,407,959)

Other income (expense):
Interest income                                           6,072              77,429               35,076                77,429
Interest expense                                         (4,500)            (50,795)             (13,500)              (69,170)
Other expense                                                 -            (245,015)                   -              (245,015)
                                                ------------------------------------------------------------------------------------
                                                          1,572            (218,381)              21,576              (236,756)
                                                ------------------------------------------------------------------------------------
Net loss                                            ($1,776,201)        ($2,504,068)         ($6,252,668)          ($3,644,715)
                                                ====================================================================================

Weighted average number of common shares
outstanding-basic and diluted                        25,313,200          18,243,762           24,820,070            16,817,959
                                                ====================================================================================

Loss per common share-basic and diluted                  ($0.07)             ($0.14)              ($0.25)               ($0.22)
                                                ====================================================================================
</TABLE>


SEE ACCOMPANYING NOTES.

                                  4
<PAGE>

                       Front Porch Digital, Inc.

                       Statements of Cash Flows
                              (Unaudited)

<TABLE>
<CAPTION>
                                                                                                            PERIOD BEGINNING
                                                                                                            FEBRUARY 1, 2000
                                                                                                            (COMMENCEMENT OF
                                                                                 NINE MONTHS ENDED           OPERATIONS) TO
                                                                                SEPTEMBER 30, 2001         SEPTEMBER 30, 2000
                                                                               ------------------------------------------------
<S>                                                                                    <C>                        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                               ($6,252,668)               ($3,644,715)
Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                        1,199,619                     61,813
    Stock based compensation cost                                                        1,193,236                     33,150
    Non-cash consulting expense to related party                                                 -                  1,928,724
    Changes in operating assets and liabilities:
        Decrease in accounts receivable - affiliate                                        222,410                          -
        Increase in accounts receivable                                                   (268,806)                    (4,075)
        Increase in other current assets                                                  (205,467)                   (80,305)
        Increase in accounts payable                                                       307,506                    120,201
        (Decrease) increase in accrued expenses                                            (84,687)                   608,854
        Increase in accrued expenses - employees                                           300,000                          -
        Increase in accrued vacation                                                        72,248                          -
        Increase in deferred revenue                                                       576,229                          -
        Other                                                                              (38,812)                    (3,008)
                                                                               ------------------------------------------------
Net cash used in operating activities                                                   (2,979,192)                  (979,361)
                                                                               ------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures                                                                      (303,259)                  (262,594)
Software development costs                                                                (298,968)                         -
Other investing activities                                                                 (28,881)                   (93,176)
Purchase of investment                                                                           -                   (300,000)
                                                                               ------------------------------------------------
Net cash used in investing activities                                                     (631,108)                  (655,770)
                                                                               ------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable                                                                      -                    800,000
Proceeds from issuance of common stock                                                   1,521,788                    977,440
                                                                               ------------------------------------------------
Net cash provided by financing activities                                                1,521,788                  1,777,440
                                                                               ------------------------------------------------

Net (decrease) increase in cash and cash equivalents                                    (2,088,512)                   142,309
Cash and cash equivalents, beginning of period                                           2,444,527                     14,483
                                                                               ------------------------------------------------
Cash and cash equivalents, end of period                                                  $356,015                   $156,792
                                                                               ================================================
</TABLE>


SEE ACCOMPANYING NOTES.


                                  5
<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.

On May 2, 2000, the Company,  formerly  Empire  Communications,  Inc., and Front
Porch Digital Inc., a Delaware  corporation which was formed on February 1, 2000
("Front Porch"),  executed an Agreement and Plan of  Reorganization  pursuant to
which 100% of Front  Porch's stock was  effectively  exchanged for a controlling
interest in a publicly-held  "shell"  corporation that concurrently  changed its
name to Front Porch Digital Inc. This  transaction is commonly  referred to as a
"reverse acquisition".  For financial accounting purposes,  this transaction has
been  treated  as the  issuance  of stock  for the net  monetary  assets  of the
Company,  accompanied by a recapitalization  of Front Porch, with no goodwill or
other intangible assets recorded.

For financial  reporting  purposes,  Front Porch is considered  the acquirer and
therefore the historical  operating results of Empire  Communications,  Inc. are
not presented.  The accompanying  financial  information includes the results of
operations  and cash flows of Front Porch for the period  beginning  February 1,
2000 (commencement of operations) to May 2, 2000.

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, 2001, the Company incurred
losses and negative  cash flows from  operating  activities  of $6.3 million and
$3.0 million,  respectively.  These factors create significant uncertainty about
the Company's ability to continue as a going concern.

During 2001, the Company has been focused on completing  the  development of its
products and service offerings that facilitate the distribution of digital video
content.  The  Company  has also  been  marketing  its  suite of data and  video
solutions to the marketplace.  During the third quarter,  the Company reached an
agreement  with a video  production  company to  install a  complete  end-to-end
digital  media archive  system before the end of the year.  The Company has also
been awarded a contract to assist a financial  institution in the implementation
of a document  management  system.  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.  Management  believes  that these
actions will enable the Company to obtain sufficient cash to continue as a going
concern.  There can be no assurance that additional capital will be available on
terms that are acceptable to the Company.

                                        6


<PAGE>

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, 2000.

Operating  results for the three and nine month periods ended September 30, 2001
are not necessarily  indicative of the operating  results  expected for the year
ending December 31, 2001.

2. CHANGE IN ESTIMATE

The Company had originally recorded a preliminary estimated charge to Consulting
fees of $1.9 million in its interim  period  financial  statements for the three
and nine-month  periods ended September 30, 2000.  However,  based on additional
information  received from independent third parties subsequent to September 30,
2000, it was  determined  that $1.2 million was more  indicative of the value of
these shares.  This change in estimate was recorded during the fourth quarter of
2000.  This  change  has  not  been  reflected  in  the  accompanying  financial
statements for three and nine-month periods ended September 30, 2000.

3.  REVENUE RECOGNITION

The Company  recognizes  revenue  when  persuasive  evidence  of an  arrangement
exists,   delivery  has  occurred,  the  fee  is  fixed  or  determinable,   and
collectibility is reasonably assured.

Revenue from product sales is recognized  upon shipment and the passage of title
to the customer.

Revenue  under service  contracts is recognized on the  percentage of completion
method  of  accounting  or when  services  have  been  performed  and  accepted,
depending on the nature of the project.

4.  RELATED PARTY TRANSACTIONS

The Company  leases office space on a  month-to-month  basis from Formal Systems
America Inc. ("FSAI"). Certain shareholders of FSAI are also shareholders of the
Company.  Rent  expense  on this  lease  for the  three  and nine  months  ended
September 30, 2001 was approximately $35,000 and $105,000 respectively.

                                        7


<PAGE>

5. PENDING ACCOUNTING CHANGES

In July 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standard (SFAS) No. 142,  "Goodwill and Other  Intangible
Assets".  This  statement  addresses  financial  accounting  and  reporting  for
acquired goodwill and other intangible  assets. The provisions of this statement
become effective for the Company  beginning  January 1, 2002 and are required to
be  applied  to all  goodwill  and other  intangible  assets  recognized  in the
Company's financial  statements at the date of adoption.  At that time, goodwill
will no  longer  be  amortized,  but will be  tested  for  impairment  annually.
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.  The Company is currently  assessing the
impact this statement will have on the Company's financial statements when it is
adopted at the beginning of 2002.

6. NOTES PAYABLE

At September 30, 2001, the Company had $200,000 of unsecured  notes payable that
bear  interest  at 9% per annum and are  payable on  demand.  In  addition,  the
Company had a non-interest  bearing note payable to an employee of approximately
$744,000.  This note is payable  based on a percentage of revenue from the media
services  operations,  ranging  between  2% and 3% per  year.  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.  SIGNIFICANT CUSTOMERS

For the nine months ended September 30, 2001, revenue from three customers, each
exceeding 10% of total revenue,  aggregated 38%, 19% and 15%,  respectively.  At
September 30, 2001 these customers accounted for 1%, 78% and 14%,  respectively,
of accounts receivable. The Company is a subcontractor for its largest customer,
which owned  approximately 25% of the Company's  outstanding  common stock as of
September 30, 2001.

8.  STOCKHOLDERS' EQUITY

In June and July 2001, the Company sold 30.3 units in a private placement,  each
unit  consisting of 25,000 shares of  unregistered  common stock and warrants to
purchase  25,000  shares of  unregistered  common stock at an exercise  price of
$3.00 per share.  These warrants  expire on June 30, 2004. The Company  received
aggregate proceeds of $1.5 million from this offering.

                                        8


<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.

These  forward-looking  statements 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

The Company is establishing  itself as a leading provider in the emerging market
for the conversion and formatting of text, images,  audio,  graphics,  video and
rich  media  from any format to any other  format,  for  access via any  digital
platform,  including  broadband,  Internet,  DVD and HDTV.  The  Company is also
seeking to capitalize on its enterprise media services  operations status as one
of the only  providers  of onsite,  offline  information  migration  services to
businesses  and  governmental  agencies  that seek to migrate  tape and  optical
assets from old to new formats.

The  Company  intends  to  use  these  and  other  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.

                                        9


<PAGE>

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000.

For the three months ended  September 30, 2001, the Company  reported a net loss
of $1.8 million, or ($.07) per share, compared to a net loss of $2.5 million, or
($.14) per share, for the three months ended September 30, 2000.

Total  revenue  for the three  months  ended  September  30,  2001 was  $172,000
compared to $3,000 for the three months ended  September 30, 2000.  The increase
in total  revenue  was  primarily  due to the start of several  data  conversion
engagements  during the three months  ended  September  30, 2001.  For the three
months  ended  September  30,  2001 and  2000,  substantially  all  revenue  was
attributable to data and video conversion services. All of the Company's revenue
has been derived from customers in the United States.

Total  gross  margin was $33,000 or 19% of total  revenue  for the three  months
ended  September  30, 2001  compared  to $3,000 or 94% of total  revenue for the
three months ended  September  30, 2000.  The increase in total gross margin was
primarily  due to the start of several data  conversion  engagements  during the
three months ended  September 30, 2001. The 19% gross margin  percentage for the
three months ended  September 30, 2001 reflects the excess capacity that existed
within the  Company's  service  delivery  function  for the first 45 days of the
period before the new data conversion  engagements  began. The decrease in gross
margin  percentage from the year-ago period is not considered  significant as it
was based on minimal  revenue for the three months ended September 30, 2000. For
the three months ended  September  30, 2001 and 2000,  substantially  all of the
Company's gross margins were attributable to data and video conversion services.
The Company plans to significantly  increase its revenue,  and therefore expects
expenses in this category to also increase substantially.

Selling,  general  and  administrative  expenses  for  the  three  months  ended
September  30, 2001 were $1.3 million  compared to $307,000 for the three months
ended  September 30, 2000. The increase in these expenses was primarily  related
to  selling,   general  and  administrative   expenses  of  the  media  services
operations,  which was  acquired in October  2000,  the  addition of several key
senior managers, and the creation of a sales and marketing department.  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,  $110,000 for general office expenses,  $81,000 of facilities
costs, and $59,000 for travel.  Should the Company secure 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.

Research and development  expenses for the three months ended September 30, 2001
were $92,000  compared to a nominal amount for the three months ended  September
30, 2000. The increase was due to the development of software tools and products
that  facilitate  the  conversion  and  migration  of data from legacy  media to
current  technology,  convert analog content to multiple  digital  formats,  and
manage and reformat digital content on demand.

                                       10


<PAGE>

Depreciation  and  amortization  expense was $403,000 for the three months ended
September 30, 2001 compared to $53,000 for the three months ended  September 30,
2000.  Amortization  expense 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.  Depreciation  expense  consisted of  depreciation of
furniture,  equipment, software and improvements. The increase in these expenses
was  primarily  attributable  to the assets  acquired  in  conjunction  with the
acquisition of the media services operations in October 2000.

Consulting  fees for the three months ended  September  30, 2000  consisted of a
non-cash  charge of $1.9  million,  which was  recorded in  connection  with the
issuance of common stock in consideration of consulting services rendered.  This
consultant  rendered  no  consulting  services  during  the three  months  ended
September 30, 2001.

Interest  expense  was $4,500 for the three  months  ended  September  30,  2001
compared to $51,000 for the three months  ended  September  30,  2000.  Interest
expense  represented  interest on the notes payable.  The outstanding balance on
these  notes was  $200,000  and  $800,000  as of  September  30,  2001 and 2000,
respectively.

Other expense for the three months ended  September 30, 2000 includes a break-up
fee and legal expenses,  aggregating $245,000,  which was incurred in connection
with a proposed  acquisition.  The Company terminated this proposed  acquisition
prior to  September  30,  2000 and no  additional  costs have been  incurred  in
connection with this transaction.

FOR THE NINE  MONTHS  ENDED  SEPTEMBER  30,  2001 AND FOR THE  PERIOD  BEGINNING
FEBRUARY 1, 2000 (COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 2000

For the nine months ended September 30, 2001, the Company reported a net loss of
$6.3 million,  or ($.25) per share,  compared to a net loss of $3.6 million,  or
($.22) per share, for the period ended September 30, 2000.

Total  revenue for the nine months ended  September  30, 2001 was  $449,000,  an
increase of 691% from total  revenue of $57,000 for the period  ended  September
30, 2000.  The increase in total revenue was primarily due to the  completion of
ongoing  projects  acquired in  conjunction  with the  acquisition  of the media
services operations in October 2000 and the start of several new data conversion
engagements  during the three months  ended  September  30,  2001.  For the nine
months  ended  September  30,  2001,  $52,000,  or 12%  of  total  revenue,  was
attributable to sales of software and related products.  The remaining $397,000,
or 88%, was attributable to data and video conversion  services.  For the period
ended September 30, 2000, $39,000, or 68% of total revenue,  was attributable to
sales of software  and related  products.  The  remaining  $18,000,  or 32%, was
attributable to video conversion  services.  Substantially  all of the Company's
revenue has been derived from customers in the United States.

Total gross margin was negative  $(137,000),  or (30)% of total revenue, for the
nine  months  ended  September  30, 2001  compared  to $31,000,  or 56% of total
revenue,  for the period ended  September 30, 2000.  The decrease in total gross
margin was primarily  due to the excess  capacity  within the Company's  service
delivery  function.  For the nine months  ended  September  30,  2001,  sales of
software and related products resulted in gross margins of 51% and the provision
of data and video  conversion  services  resulted in negative  gross  margins of
(41%).  For the period ended  September 30, 2000,  sales of software and related
products  resulted in gross margins of 39% and the provision of video conversion
services  resulted in gross  margins of 91%.  The Company  plans to increase its
revenue,  and  therefore  expects  expenses in this  category  to also  increase
substantially.

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<PAGE>

Selling, general and administrative expenses for the nine months ended September
30,  2001 were $4.4  million  compared  to $1.4  million  for the  period  ended
September 30, 2000. The increase in these expenses is for the reasons  described
above.  Selling,  general and administrative  expenses for the nine months ended
September 30, 2001 consisted  primarily of $3.1 million for salaries and related
benefits  for  employees  not  directly  related to the  production  of revenue,
$449,000 in professional  fees,  $331,000 for general office expenses,  $288,000
for travel,  $249,000 of  facilities  costs,  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,  continue to build its infrastructure
and, therefore, expects expenses in this category to increase significantly.

Research and  development  expenses for the nine months ended September 30, 2001
were $502,000  compared to a nominal  amount for the period ended  September 30,
2000.  The increase was due to the  development  of software  tools and products
that  facilitate  the  conversion  and  migration  of data from legacy  media to
current  technology,  convert analog content to multiple  digital  formats,  and
manage and reformat digital content on demand.

Depreciation and amortization expense was $1.2 million for the nine months ended
September 30, 2001 compared to $62,000 for the period ended  September 30, 2000.
Amortization  expense  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.  Depreciation expense consisted of depreciation of furniture,
equipment,  software  and  improvements.  The  increase  in these  expenses  was
primarily   attributable  to  the  assets  acquired  in  conjunction   with  the
acquisition of the media services operations in October 2000.

Consulting  fees for the period ended September 30, 2000 consisted of a non-cash
charge  of  $1.9  million  as  discussed  above.  This  consultant  rendered  no
consulting services during the nine months ended September 30, 2001.

Interest  expense  was  $14,000 for the nine  months  ended  September  30, 2001
compared to $69,000 for the period ended  September 30, 2000.  Interest  expense
represented  interest on the notes  payable.  The  outstanding  balance on these
notes was $200,000 and $800,000 as of September 30, 2001 and 2000 respectively.

Other  expense for the period ended  September  30, 2000 includes a break-up fee
and legal expenses, aggregating $245,000, as discussed above.

FINANCIAL CONDITION

The  Company's  principal  sources  of  liquidity  have  been its cash  reserves
received from a private placement completed by the Company in June and July 2001
and from cash received from  operations.  At September 30, 2001, the Company had
$356,000 of cash and cash equivalents.

The Company  used net cash of $3.0 million in  operating  activities  during the
nine  months  ended  September  30, 2001  compared  to  $979,000  for the period
beginning  February 1, 2000  (commencement of operations) to September 30, 2000.
This  increase  was  primarily  due to the  acquisition  of the  media  services
operations in October 2000, the addition of several key senior managers, and the
creation of a sales and marketing department.

                                       12


<PAGE>

The Company  used net cash of $631,000 in investing  activities  during the nine
months  ended  September  30,  2001,  which  consisted  of $303,000  for capital
expenditures,  $299,000  for  software  development  costs and $29,000 for other
investing activities.  For the period ended September 30, 2000, the Company used
net cash of $656,000 in investing  activities,  which  consisted of $263,000 for
capital expenditures, a $300,000 investment in an unrelated company, and $93,000
for other investing  activities.  The Company expects capital expenditures to be
approximately $1.0 million during the next twelve months.

Financing  activities  provided net cash of $1.5 million  during the nine months
ended  September 30, 2001 due to the sale of 863,000  shares of common stock and
warrants to purchase  863,000 shares of common stock.  Financing  activities for
the period ended September 30, 2000 provided net cash of $1.8 million,  of which
$800,000 was proceeds received from notes payable and $977,000 was received from
the sale of 488,000 shares of common stock.

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.

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 current cash
position and the cash flow generated from operations.  Additionally,  in October
2001, the Company further reduced its operating expenses by eliminating  certain
positions and relocating the corporate offices.  The Company  anticipates having
sufficient cash to continue  operations  through 2001.  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 seek other means to gain cash flow flexibility.

As of  September  30,  2001,  the  Company  had  liquid  assets  (cash  and cash
equivalents and accounts receivable) of $625,000 and current assets of $907,000.
These assets were primarily derived from operating and financing activities.

Long-term assets of $7.9 million at September 30, 2001,  consisted  primarily of
the excess of cost over fair value of the media services assets acquired of $4.8
million,  software  and  intellectual  property of $1.4  million,  property  and
equipment of $1.3 million, and software development costs of $300,000.

Current  liabilities of $2.7 million at September 30, 2001 consisted of $789,000
of accounts payable; $291,000 of accrued expenses;  $568,000 of accrued expenses
to employees, of which $168,000 is payable to an employee upon the closing of an
offering of securities which raises gross proceeds of at least $5.0 million, and
$400,000 of bonuses payable to select employees; $576,000 of deferred revenue on
projects currently in process; $200,000 of notes payable due on demand; $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  $146,000  of  accrued
vacation.

The Company's  working capital deficit was $1.8 million as of September 30, 2001
for the reasons described above.

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<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

In June  and  July  2001,  the  Company  sold to six  accredited  investors,  an
aggregate of 30.3 units in a private  placement,  each unit consisting of 25,000
shares of  unregistered  common stock and warrants to purchase  25,000 shares of
unregistered  common stock at an exercise price of $3.00 per share.  The Company
received  aggregate  proceeds of $1.5  million from this  offering.  The Company
intends to use the net proceeds from this private placement  primarily for sales
and marketing expenses; research and development; the purchase of equipment; and
working capital and general  corporate  purposes.  Such transaction was effected
pursuant to Rule 506 under the Securities Act of 1933, as amended.

ITEM 5.     OTHER INFORMATION

In October 2001,  Jean Reiczyk and Saeed Karim  resigned  from their  respective
positions as chief executive  officer and  president/chief  operating officer of
the  Company.  Mr.  Reiczyk  will remain as Chairman of the Board of  Directors.
Chief technology officer, Dr. Jay Yogeshwar,  has been appointed president,  and
Timothy Petry,  chief  financial  officer,  has been appointed  chief  operating
officer. In addition,  Don Maggi, a director of the Company,  has been appointed
lead director and acting chief executive officer.

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
                               None.




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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:  November 12, 2001                   FRONT PORCH DIGITAL INC.

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


                                            By: /s/ Timothy M. Petry
                                                -------------------------------
                                                 Timothy M. Petry
                                                 Chief Financial Officer
                                                 (principal financial and
                                                 accounting officer)





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