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


                                    FORM 10-Q





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


                  For the quarterly period ended March 31, 2001

                                       OR


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


                  For the transition period from         to

                        Commission File Number 000-29727
--------------------------------------------------------------------------------

                               PartsBase.com, Inc.
             (Exact name of registrant as specified in its charter)

                       Texas                            76-0604158
         (State or other jurisdiction of    (I.R.S. Employer Identification No.)
          incorporation or organization)



                              621 N.W. 53rd Street
                         Boca Raton, Florida 33487-8233
                    (Address of principal executive offices)

        Registrant's telephone number, including area code: 561.953.0700
--------------------------------------------------------------------------------


     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required 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 [ ]



APPLICABLE ONLY TO CORPORATE ISSUERS:

     The registrant  had an aggregate of 14,177,557  shares of its common stock,
no par value, outstanding as of the close of business on April 27, 2001.

<PAGE>

                               PARTSBASE.COM, INC.
                                TABLE OF CONTENTS

                                                                            Page
                                                                           -----
PART I-   FINANCIAL INFORMATION

  ITEM 1.   Financial Statements.................................              3

   ITEM 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations................              9

   ITEM 3.  Quantitative and Qualitative Disclosure about Market
              Risk...............................................             12


PART II-   OTHER INFORMATION

   ITEM 1.  Legal Proceedings....................................             13

   ITEM 2.  Changes in Securities................................             14

   ITEM 3.  Default Upon Senior Securities.......................             14

   ITEM 4.  Submission of Matters to a Vote of Security Holders..             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


<TABLE>
                              PARTSBASE.COM, INC.
                            Condensed Balance Sheets
<CAPTION>


                                                      March 31,   2001         December 31,
                                                        (unaudited)                2000
                                                     -------------------    ------------------

Assets:
Current assets:
<S>                                                    <C>                     <C>
Cash and cash equivalents                              $  20,977,774           $  23,045,491
Accounts receivable, net of an allowance for
 doubtful accounts of $235,759 at March 31, 2001
 and $221,559 at December 31, 2000                         1,278,058               1,510,645
Investments, at amortized cost                             6,117,876               7,139,052
Prepaid expenses and other current assets                    380,796                 647,213
                                                        -------------           -------------
 Total current assets                                     28,754,504              32,342,401
Property and equipment, net                                3,572,354               3,655,310
Certificates of deposit - restricted cash                  2,189,008                 524,008
Other assets                                                  57,473                 629,387
                                                        -------------           -------------
 Total assets                                          $  34,573,339           $  37,151,106
                                                        ============            =============

Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable                                       $    501,997            $   1,075,032
Accrued expenses and other current liabilities              464,290                  419,696
Deferred revenue, net                                     3,174,665                3,219,422
                                                        ------------            -------------
 Total current liabilities                                4,140,952                4,714,150

Other liabilities                                            96,656                   89,055
                                                        ------------            -------------
 Total liabilities                                        4,237,608                4,803,205
                                                        ------------            -------------

Commitments and Contingencies                                    --                       --

Stockholders' equity:
Preferred stock                                                  --                       --
Common stock, no par                                             --                       --
Additional paid-in capital                               53,866,172               55,478,819
Treasury stock, at cost                                    (122,285)                (330,202)
Accumulated deficit                                     (22,915,367)             (21,216,659)
Unearned compensation                                      (492,789)              (1,584,057)
                                                       -------------            -------------
 Total stockholders' equity                              30,335,731               32,347,901
                                                       -------------            -------------
  Total liabilities and stockholders' equity          $  34,573,339            $  37,151,106
                                                       =============            =============




  The accompanying notes are an integral part of these condensed financial statements.
</TABLE>


                                       3
<PAGE>



<TABLE>
                                                          PARTSBASE.COM, INC.
                                                  Condensed Statements of Operations
                                                              (unaudited)



<CAPTION>
                                                                                     THREE MONTHS ENDED
                                                                                 ----------------------------
                                                                                   MARCH 31,       MARCH 31,
                                                                                     2001            2000
                                                                                 ----------------------------

<S>                                                                             <C>             <C>
Net revenues                                                                    $  1,599,233    $    549,024
Cost of revenues                                                                   1,488,761       1,395,000
                                                                                 ------------    ------------
Gross profit (loss)                                                                  110,472        (845,976)
                                                                                 ------------    ------------

Operating expenses:
General and administrative expenses                                                2,264,256       1,284,791
Stock-based compensation expense                                                      43,011       1,462,233
                                                                                 ------------    ------------
Total operating expenses                                                           2,307,267       2,747,024
                                                                                 ------------    ------------

Operating loss                                                                    (2,196,795)     (3,593,000)
Other income (expense), net                                                          498,087          16,944
                                                                                 ------------    ------------
Net loss                                                                        $ (1,698,708)   $ (3,576,056)
                                                                                 ============    ============
Basic and diluted net loss per share                                            $      (0.12)   $      (0.37)
                                                                                 ============    ============
Weighted average of common shares
 outstanding                                                                      14,277,075       9,783,000
                                                                                 ===========     ============



The accompanying notes are an integral part of these condensed financial statements.
</TABLE>


                                       4
<PAGE>



<TABLE>
                                                          PARTSBASE.COM, INC.
                                                  Condensed Statements of Cash Flows
                                                              (unaudited)





<CAPTION>
                                                                                    THREE MONTHS ENDED
                                                                          -------------------------------------
                                                                            March 31, 2001     March 31, 2000
                                                                          -----------------  ------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                           <C>                 <C>
Net loss                                                                      $ (1,698,708)       $ (3,576,056)
Adjustments to reconcile net loss to net cash
  used in operating activities:
   Depreciation and amortization                                                   146,536             368,463
   Provision for doubtful accounts                                                 212,153              16,830
   Recognition of unearned compensation                                             43,011           1,462,233
   Changes in assets and liabilities:
     Accounts receivable                                                            20,434            (236,212)
     Prepaid expenses and other current assets                                     266,417             255,017
     Deferred charges and other assets                                              70,063              10,550
     Accounts payable                                                             (573,035)            440,987
     Accrued expenses and other current liabilities                                 44,594             (12,994)
     Deferred revenue, net                                                         (44,757)            718,738
     Other liabilities                                                               7,601                  --
                                                                               ------------        ------------
Net cash used in operating activities                                           (1,505,691)           (552,444)
                                                                               ------------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                                               (63,580)           (639,044)
Proceeds from redemption of investments                                          1,523,027                  --
Web site development costs                                                              --             (24,000)
Purchase of certificate of deposit-restricted cash                              (1,665,000)                 --
                                                                               ------------        ------------
Net cash used in investing activities                                             (205,553)           (663,044)
                                                                               ------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net                                             --          40,839,720
Purchase of treasury stock                                                        (520,668)                 --
Exercise of employee non-qualified stock options                                   164,195                  --
                                                                               ------------        ------------
Net cash provided by (used in) financing activities                               (356,473)         40,839,720
                                                                               ------------        ------------

Net change in cash and cash equivalents                                         (2,067,717)         39,624,232
Cash and cash equivalents at beginning of period                                23,045,491             735,276
                                                                               ------------        ------------
Cash and cash equivalents at end of period                                    $ 20,977,774        $ 40,359,508
                                                                               ------------        ------------


Supplemental disclosures of cash flow information:
 Cash paid during the period for:
  Interest                                                                       $      --           $  16,923
                                                                                    ======              ======
  Taxes                                                                          $      --           $      --
                                                                                    ======              ======


Supplemental schedule of noncash financing activities:
 Issuance of common stock in exchange for notes payable                          $      --           $ 962,500
                                                                                   =======             =======
 Retirement of treasury stock                                                    $ 728,564           $      --
                                                                                   =======             =======





The accompanying notes are an integral part of these condensed financial statements.
</TABLE>





                                       5
<PAGE>


                               PARTSBASE.COM, INC.
                     Notes to Condensed Financial Statements
                                   (unaudited)

The Company and Basis of Presentation

     PARTSBASE.COM, INC. ("PartsBase" or the "Company") is an online provider of
Internet business-to-business e-commerce services for the aviation industry. The
Company's  global  e-marketplace  provides a means for aviation parts buyers and
sellers  to buy and sell new,  repaired  and  overhauled  aviation  parts,  list
products,  services and  catalogs,  and hold auctions for slow moving and excess
inventory.

     The Company was  incorporated  in Texas on April 27, 1999 and prior to such
date operated as a division of Aviation Laboratories, Inc.

     The accompanying  unaudited condensed interim financial  statements reflect
all  adjustments,  which in the opinion of  management  are necessary for a fair
presentation of the results of operations for the periods shown.  The results of
operations  for such  periods  are not  necessarily  indicative  of the  results
expected for the full fiscal year or for any future period.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting  principles
have been  condensed or omitted  pursuant to Article 10 of Regulation S-X of the
Securities and Exchange Commission.  These condensed financial statements should
be read in conjunction with the financial  statements and notes thereto included
in the  Company's  Annual  Report on Form 10-K for the year ended  December  31,
2000.

Revenue Recognition

     PartsBase records subscription and banner advertising revenue over the life
of the  subscription,  which is  typically  12 months.  Sales  costs,  including
commissions, are expensed as incurred, and are included in the cost of revenues.
Gross revenue  represents total  subscription and advertising  sales made during
the period  presented,  of which a portion is deferred and recognized as earned.
Net revenue  represents that portion of gross revenue that was earned during the
period  presented.  Therefore,  during quarters with large gross revenue growth,
gross margins will be negatively impacted due to the effect of sales commissions
being expensed in their entirety,  whereas the corresponding sales are amortized
over the subscription term.

Cash and Cash Equivalents

     Cash and cash equivalents  consists of highly liquid investments  purchased
with an original maturity of three months or less.


                                       6
<PAGE>

Marketable Securities

     The Company's investments, whose maturities are typically one year or less,
are held to maturity and valued at amortized cost. Investments in securities are
summarized as follows at March 31, 2001 and December 31, 2000, respectively:
<TABLE>


<CAPTION>
                                                     Gross Unreal.    Gross Unreal.     Amortized
                                        Fair Value   Holding Gain     Holding Loss        Cost
                                       ------------- -------------    -------------   -------------
<S>                                    <C>           <C>              <C>             <C>
As of March 31, 2001:
Current:
Corporate debt securities              $  6,042,134  $         --     $   (75,742)    $  6,117,876
                                        ============  ============     ============    ============

As of December 31, 2000
Current:
U.S. government agencies               $    774,162  $        939     $        --     $    773,223
Corporate debt securities                 6,440,416        74,587              --        6,365,829
                                        ------------  ------------     ------------    -----------
Totals                                 $  7,214,578  $     75,526     $        --     $  7,139,052
                                        ============  ============     ============    ===========

Non-Current:
Corporate debt securities              $    500,110  $         --     $    (1,741)    $    501,851
                                        ============  ============     ============    ===========
</TABLE>


     On January 15, 2001, corporate debt securities owned by the Company, issued
by a State of California  electrical utility (the "Utility"),  with a face value
of $400,000  and maturing on January 15, 2001,  were  defaulted  on. The current
market value of this  security as of March 31,  2001,  was $340,000 and its debt
rating was recently lowered to Caa3 by Moody's Investor Service.  The Utility is
currently in negotiations with its banks and the Public Utilities  Commission of
California  to resolve its  financial  difficulties  and pay amounts owed to its
secured and unsecured creditors.  While there can be no assurances,  the Company
currently  believes  that it is  probable it will be able to collect all amounts
due the Company  according to the  contractual  terms of the debt  security.  On
April 19, 2001  outstanding  accrued interest on this obligation was paid to the
Company  and,  as a result,  the  decline in fair value of the debt  security is
judged to be temporary as of March 31, 2001 and December 31, 2000, respectively.

Basic and Diluted Net Loss per Share

     Basic net loss per share is computed  using the weighted  average number of
common  shares  outstanding  during the  period.  Diluted  net loss per share is
computed  using the  weighted  average  number of common and  common  equivalent
shares  outstanding  during the period.  Common equivalent shares consist of the
incremental  common  shares  issuable  upon the  exercise  of stock  options and
warrants  (using the treasury stock  method).  For the three month periods ended
March 31,  2001 and 2000,  common  share  equivalents  are not  included  in the
computation  of diluted  loss per share since  inclusion of such shares would be
anti-dilutive.

Segment Information

     Based on the criteria  established  by  Statement  of Financial  Accounting
Standards  ("SFAS")No.131,  "Disclosures  about  Segments of an  Enterprise  and
Related  Information," the Company currently  operates in one principal business
segment globally, the development and marketing of an online marketplace for the
purchasing and distribution of products.

                                       7
<PAGE>

     Summarized  information  by  revenue  source  as  excerpted  from  internal
management reports is as follows (in thousands):

                                                      Three Months Ended
                                                          March 31,
                                                      ------------------
                                                        2001       2000
                                                      ------------------

Net revenues:
Advertising                                          $    58    $    53
Subscriptions                                          1,501        496
Other                                                     40         --
                                                      ------     ------
 Total                                               $ 1,599    $   549
                                                      ======      =====


Reclassifications

     Certain  amounts  in  the  prior  year's  financial  statements  have  been
reclassified to conform to the current year presentation.

Commitments and Contingencies

     During  May 2000 the  Company  entered  into a sublease  agreement  with an
unaffiliated  third party for 35,668 square feet of general  office  space.  The
sublease agreement expires October 31, 2006. In lieu of a security deposit,  the
Company has entered into an irrevocable standby letter of credit in favor of the
sublessor in the amount of $500,000  which is  classified  as a  Certificate  of
deposit-  restricted  cash on the balance  sheets of March 31, 2001 and December
31, 2000,  respectively.  From the  commencement  date of the  sublease  through
February 28, 2001 the Company was  obligated  to pay rent on only 25,000  square
feet.  Effective  March 1, 2001 the Company became  obligated to pay all minimum
annual rent required by the prime lease.

     The  Company is party to a Content  License  and  Reseller  Agreement  (the
"Agreement") with USA Information Systems Inc. ("USAIS"),  an exclusive owner of
an  Internet-based  government  parts,  logistic and digital document  database,
whereby USAIS provides access to that database to paid subscribers through a Web
site owned, operated and maintained by USAIS ("the Subscription Services").  Per
the Agreement,  as amended on March 15, 2001,  USAIS licenses to the Company the
non-exclusive rights to resell the Subscription  Services and to offer access to
certain segments of the USAIS content to the Company's existing  customers.  The
Agreement  commenced on June 1, 2000 and has an initial term of three years. The
Agreement will be  automatically  renewed for two one-year terms,  unless either
party  notifies the other in writing of its intention not to renew the Agreement
within ninety (90) days prior to the  expiration of the  then-current  term. The
Company is  obligated  to pay USAIS the sum of $100,000 in monthly  installments
through  May 15,  2001.  Commencing  June 15,  2001  and  continuing  until  the
expiration  of the  Agreement,  the Company is obligated to pay USAIS $60,000 in
monthly installments. In conjunction with the amended Agreement, the Company was
also  obligated  to  obtain,  and  delivered  to,  USAIS on March 20,  2001,  an
irrevocable,  transferable standby Letter of Credit in the amount of $1,665,000,
collateralized  by a  certificate  of  deposit  of  the  same  amount  which  is
classified as  Certificate of deposit-  restricted  cash on the balance sheet in
the accompanying financial statements at March 31, 2001.

     In September 2000 we sued a third party financial  institution because such
financial  institution  paid a check in the  amount of  $161,000  despite a stop
payment order duly issued by us. The check,  along with a replacement check, was
cashed by the payee.  Before we learned  that both checks had been cashed by the
payee,  we entered into a binding  settlement with the payee ending our business
relationship  with the payee.  The payee  refused to return the  amounts and the
financial institution failed to credit our account. We filed suit, and discovery
has  commenced.  The only  claim  against  us in this  matter  is the  financial
institution's demand for legal fees if the financial  institution prevails. In a
separately  filed  lawsuit,  the payee of the  checks  has  filed an action  for
declaratory relief against the financial  institution and the Company requesting
that the court declare its settlement agreement with the Company to be valid and
binding.  In this  declaratory  relief action,  the payee has requested that the
Company and the financial institution reimburse it for costs and fees associated
with the action.



                                       8
<PAGE>

     In December 2000, a third party (the "Third Party"),  unaffiliated with us,
instituted  arbitration against us in Dallas,  Texas based upon allegations that
we breached a February 18, 2000 professional services agreement. The Third Party
claims damages of $308,083 plus unliquidated amounts for copyright infringement,
interest,  attorney's fees and costs. We filed a counterclaim denying the breach
and claiming  entitlement  to a refund of $73,496  previously  paid to the Third
Party  plus  damages of  $250,000  because  of the Third  Party's  breach of its
obligations  to us. We intend to  vigorously  defend the  arbitration  claim and
prosecute  the  counterclaim,  , but  there  can be no  assurance  that  we will
ultimately prevail.  Because this matter is in its early stages, we have not yet
determined the impact, if any, upon our financial statements.

     In April and May 2001,  the Company  received  notice of or has been served
with three purported class action lawsuits (Foderaro vs. Partsbase.com,  Inc. et
al, Case No.: 01-8319 CIV- FERGUSON;  IKCYBERINVESTMENTS vs. PartsBase.com, Inc.
et al, Case No.: 01-8368  CIV-SEITZ;  and Webb vs.  Partsbase,  et.al.  Case No.
01-8376 CIV-GRAHAM).  The lawsuits name as defendants,  the Company,  certain of
its current and former  officers  and  directors,  and the  underwriters  of its
initial  public  offering of  securities.  The  lawsuits  allege  violations  of
Sections  11,  12(a)(2)  and 15 of the  Securities  Act of 1933 and  allege  the
Company's  March  2000  registration  statement  misrepresented  and  failed  to
disclose  matters  related to the Company's  business  operations and membership
sales.  The lawsuits  seek damages and  certification  of a class  consisting of
purchasers of the Company's  common stock in the offering during the period from
March 22, 2000 through April 25, 2000. The Company believes that the allegations
contained  in the lawsuits are without  merit and intends to  vigorously  defend
this action.  Nevertheless,  an  unfavorable  resolution of these lawsuits could
have a material adverse effect on the Company in one or more future periods. The
Company  maintains a  directors  and  officers  liability  insurance  policy and
intends to establish a litigation reserve in the second quarter of 2001.

     The Company does not intend to file further  Current Reports on Form 8-K or
other  disclosures  describing  additional  lawsuits,  if any,  purporting class
action status, in either federal or state court,  which are based on allegations
substantially similar to those contained in the lawsuits described herein.


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
          of Operations

     This  Report  contains  forward-looking  statements  within the  meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange Act of 1934,  including,  without limitation,  statements regarding the
Company's  expectations,  beliefs,  intentions  or  future  strategies  that are
signified  by the words  "expects",  "anticipates",  "intends",  "believes",  or
similar language.  All forward-looking  statements included in this document are
based on  information  available  to the  Company  on the date  hereof,  and the
Company  assumes no  obligation to update any such  forward-looking  statements.
Actual   results   could  differ   materially   from  those   projected  in  the
forward-looking statements as a result of a number of factors, including but not
limited  to thise  set forth  under  "Risk  Factors"  included  in  Ehibit  99.1
elsewhere in this report .

Overview

     PARTSBASE.COM, INC. ("PartsBase" or the "Company") is an online provider of
Internet business-to-business e-commerce services for the aviation industry. The
Company's  global  e-marketplace  provides a means for aviation parts buyers and
sellers  to buy and sell new,  repaired  and  overhauled  aviation  parts,  list
products,  services and  catalogs,  and hold auctions for slow moving and excess
inventory.

     The Company was  incorporated  in Texas on April 27, 1999 and prior to such
date operated as a division of Aviation Laboratories, Inc.


Results of Operations

Net Revenues

     Net revenues consist of subscription  fees charged to subscribers and, to a
lesser extent,  banner-advertising  and product listings  revenue.  Net revenues
were $1,599,233 for the first quarter of 2001 and $549,024 for the first quarter
of 2000,  which  represent  an increase  of 191% in 2001 over the  corresponding
period in 2000.  During the first quarter of 2001,  PartsBase  signed up 694 new


                                       9
<PAGE>

subscribers at an average subscription fee of $1,584 and 437 subscribers renewed
their  subscription  for another year at an average  subscription fee of $1,284.
The  aggregate  average  subscription  fee of both new and  renewal  subscribers
during the first  quarter of 2001 was $1,469.  During the first quarter of 2000,
PartsBase   signed  up  1,178  new  subscribers  at  an  annual  average  annual
subscription  fee of  $960  and 59  renewal  subscribers  at an  annual  average
subscription  fee of $864. The average new  subscriber fee increased  during the
first quarter of 2001 due to higher prices charged for competing  services,  and
PartsBase's ability to offer additional value added services to its subscribers,
such as  government  procurement  data.  At March 31, 2001,  PartsBase had 4,837
paying subscribers as compared to 4,756 paying subscribers at December 31, 2000,
and 1,952 paying  subscribers at December 31, 1999. A paid subscriber is defined
as a member of the PartsBase web site who has purchased a  subscription  that is
currently   active,   and  therefore,   does  not  include   subscribers   whose
subscriptions  have  expired,  nor  potential  subscribers  who are trialing the
service.

     For the first three months of 2001 and 2000, gross revenues were $1,660,429
and $1,310,249,  respectively which represent increases of 27% for 2001 over the
corresponding period in 2000.

     PartsBase records earned  subscription and banner advertising  revenue over
the life of the  subscription,  which is  typically  12  months.  Gross  revenue
represents  total  subscription  and  advertising  sales made  during the period
presented, of which a portion is deferred and recognized as earned. Net revenues
represent  that portion of gross  revenues of all periods that was earned during
the current period presented.  Sales costs, including commissions,  are expensed
as incurred,  and are included in the cost of revenues.  Deferred  revenue,  net
decreased to $3,174,665 at March 31, 2001, compared to $3,219,422 as of December
31, 2000, and increased from $2,742,619 at September 30, 2000, and $2,323,915 at
June 30, 2000.

     The  following  table sets forth gross  revenue by product line for each of
the four  quarters in fiscal year 2000 and the first quarter of 2001, as well as
sequential  quarter-to-quarter  revenue growth percentage for the second, third,
and fourth  quarters of fiscal  year 2000 and first  quarter of 2001 and related
operating data for the same periods:

<TABLE>
                               PartsBase.com Inc.
                        Revenue Detail by Quarter (000's)

<CAPTION>
                                                                 Three Months Ended
                                               -------------------------------------------------------------
                                              3/31/00      6/30/00         9/30/00     12/31/00      3/31/01
                                              -------      -------         -------     --------      -------
<S>                                            <C>          <C>             <C>         <C>          <C>
Subscription                                   $1,182       $1,191          $1,607      $2,083       $1,557
Advertising                                       128           95              48          20           60
Other                                               1           17               5           -           43
                                              -------      -------        --------     -------       ------
Total Gross Revenue                            $1,311       $1,303          $1,660      $2,103       $1,660
                                              =======       ======       =========      ======       ======
Sequential Gross Rev. Growth                      30%         (1%)             27%         27%        (21%)
                                              =======       ======       =========     =======       ======
Total Net Revenue                                $549         $935          $1,228      $1,386       $1,599
                                              =======       ======       =========     =======      =======
Sequential Net Rev. Growth                       128%          70%             31%         13%          15%
                                              =======       ======       =========     =======      =======
Salesperson Compensation                         $643*        $352            $720      $1,109         $730
                                              =======       ======       =========     =======      =======
Sales Comp/Gross Revenue                          49%          27%             43%         53%          44%
                                              =======       ======       =========     =======      =======
Deferred Revenue Balance                       $1,983       $2,324          $2,742      $3,219       $3,175
                                              =======       ======       =========     =======      =======
</TABLE>
----------------------------
* -  Net of sales  related  salary costs  reclassified  to selling,  general and
      administrative expenses.




                                       10
<PAGE>

Cost of Revenues

     Cost of  revenues  consists  of  compensation  for our sales and  marketing
personnel,  telephone  expenses,  web site  development,  contract payments to a
third party for  procurement  data  functionality  and a proportion  of rent and
office expenses.  Compensation  costs for our sales and marketing  personnel are
incurred  in the month paid  while the  revenue is  pro-rated  over the  related
subscription  period,  generally a 12-month period.  Therefore,  during quarters
with large gross revenue growth,  gross margins will be negatively  impacted due
to the effect of sales commissions being expensed in their entirety, whereas the
corresponding  sales are amortized over the subscription  term. Cost of revenues
were  $1,488,762  for the first  quarter  of 2001 and  $1,395,000  for the first
quarter of 2000. As a percent of net revenues, cost of revenues were 93% for the
first  quarter  of  2001  and  254%  for the  first  quarter  2000.  Salesperson
compensation,  $730,392 in the first  quarter of 2001,  as a percentage of gross
revenue and net revenue was 44% and 46%, respectively. Salesperson compensation,
$642,664 in the first  quarter of 2000, as a percentage of gross revenue and net
revenue was 49% and 117%, respectively. The decrease in percentage from 2000 was
attributable to a lowering of commission  rates on  subscriptions  sold at lower
price  points.  At March 31, 2001,  PartsBase  employed 100 persons in sales and
customer  service,  compared  to 55  persons  at March 31,  2000.  Additionally,
included  in cost of  revenues  in the first  quarter of 2001 was  $314,000  for
contract payments to a third party for government  procurement data. These costs
were not incurred in the 2000 period. In the first quarter of 2000, $253,444 was
incurred  for initial  start-up  costs  relating to  transactional  software the
Company had  purchased.  Such costs were not  incurred  in the first  quarter of
2001.

General and Administrative Expenses

     General and  administrative  expenses were  $2,264,256,  exclusive of stock
based compensation  expense,  or 142% of net revenues,  for the first quarter of
2001, and $1,284,791,  exclusive of stock based compensation expense, or 234% of
net  revenues,  for  the  first  quarter  of  2000,  respectively.  General  and
administrative expenses consisted primarily of personnel costs of $1,436,125 and
$575,500,  advertising  costs of $98,732 and $228,137,  and other costs totaling
$729,399 and $481,654 consisting of professional fees, rent, utilities, supplies
and other related  administrative costs, for the first quarter of 2001 and 2000,
respectively.  The  increase  in other  costs is  primarily  attributable  to an
increase in facilities  expense  associated with the Sublease  Agreement entered
into  in May  2000.  At  March  31,  2001,  PartsBase  employed  52  persons  in
administrative  and executive  management  positions,  compared to 27 persons at
March 31, 2000.

     In connection  with the issuance of employee  stock options issued prior to
our  IPO,  stock-based  compensation  expense  of  $43,011  and  $1,462,233  was
recognized in the first quarter of 2001 and 2000, respectively.  The significant
decrease in the current  quarter  compared to the same quarter of the prior year
was a  result  of a  decrease  in the  number  of  shares  vesting.  Stock-based
compensation  expense will continue to decrease in magnitude  each quarter until
fully recognized by April 2002.

Other Income (Expense), Net

     Other income, net was $498,087 for the first quarter of 2001 as compared to
$16,944 for the first quarter of 2001. The significant  increase in other income
for the three  months  ended March 31,  2001 is  attributable  to  dividend  and
interest income earned on the Company's investments and cash equivalents.

Net Loss

     As a result of the foregoing,  the net loss decreased to $1,698,708 for the
first quarter of 2001 compared to $3,576,056 for the first quarter of 2000.

Liquidity and Capital Resources

Financial Condition

     As of  March  31,  2001,  the  Company  had  $20,977,774  of cash  and cash
equivalents,  restricted cash totaling $2,189,008,  and $6,117,876 of marketable
securities. At March 31, 2001, the Company had $24,613,552 of working capital.



                                       11
<PAGE>

     The Company  currently  anticipates  that its operating  expenses will be a
material use of its cash resources.  Additionally,  the Company will continue to
evaluate possible acquisitions of, or investments in, businesses,  products, and
technologies that are complementary to those of the Company's, which may require
the  use of  cash.  The  Company  believes  that  its  existing  cash  and  cash
equivalents and marketable securities will be sufficient to meet its anticipated
cash needs for working  capital and capital  expenditures  for at least the next
twelve months.

Cash Flows

     Net cash used in  operating  activities  totaled  $1,505,691  for the first
three months of 2001, compared to cash used in operating  activities of $552,444
for the first  three  months of 2000.  The  increase of $953,247 in cash used in
operating activities for the first three months of 2001 was primarily due to the
Company's  ability to  liquidate  accounts  payable on a more timely  basis as a
result of its IPO  completed in the first  quarter of 2000 and the result of the
Company  experiencing  higher  sequential  growth rate in gross  revenues in the
first  quarter of 2000 as opposed  to the first  quarter of 2001.  The growth in
gross revenues resulted in a commensurate  increase in Accounts  Receivable with
normal net 30 payment terms, while commissions for these sales are paid the week
following  the  recording  of the sale,  having a negative  impact on cash flow.
Additionally,  the net loss for the first quarter 2001 was reduced by $1,877,348
as compared to the first quarter of 2000.

     Net cash used in investing  activities totaled $205,553 for the first three
months of 2001,  compared to $663,044  for the first three  months of 2000.  The
decrease of $457,491 in cash used in  investing  activities  for the first three
months of 2001 was primarily the result of the  requirement  under the Company's
amended  agreement with a provider of government  procurement  functionality  to
issue it an  irrevocable  letter of credit  collateralized  by a certificate  of
deposit in the amount of $1,665,000 as security for the balance of the Company's
obligation  under  the  amended  agreement.  During  the 2001  quarter  cash was
provided from proceeds from  redemptions  of  investments  totaling  $1,523,027.
Additionally,  the Company reduced its capital expenditures in the first quarter
of 2001 by  $575,464  as  compared  to the same 2000  quarter as the Company has
decided to improve its technology at a slower pace in 2001.

     Net cash used in financing  activities totaled $356,473 for the first three
months of 2001,  compared to net cash provided by financing  activities totaling
$40,839,720 for the first three months of 2000. The decrease for the first three
months of 2001 is primarily the result of net proceeds  received by PartsBase in
connection with the issuance of common stock related to the Company's IPO during
the first  quarter of 2000. In addition,  during the first quarter of 2001,  the
Company  repurchased  291,900  shares  of its no par  common  stock at a cost of
$520,668.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

    The Company is exposed to the impact of interest rate changes.

Interest Rate Risk

     The primary  objective of investment  activities  is to preserve  principal
while at the same time maximizing yields without significantly  increasing risk.
At  March  31,  2001,   PartsBase's   portfolio   consisted  of  investments  in
institutional  money market funds and  corporate  bonds rated A or higher at the
time of  purchase.  PartsBase's  investment  policy is focused on ensuring  that
PartsBase has liquid cash balances  available to meet its  day-to-day  operating
cash needs. The policy establishes guidelines for the investment of surplus cash
balances that will maximize  return with minimum credit and liquidity  risk. All
investments  are  held  in  U.S.  Dollars.  Specific  instruments  approved  for
inclusion  in the  portfolio  are  limited  to:  obligations  issued by the U.S.
Treasury and U.S. Federal Agencies, obligations of U.S. commercial banks such as
bankers'  acceptances  and  certificates  of deposit  and  obligations  of major
corporations  and bank holding  companies such as direct issue  commercial paper
and medium term notes.

     The Company intends to hold its investments until maturity,  however, it is
exposed to the impact of interest  rate changes and change in the market  values
of its  investments.  Investments  in both fixed rate and floating rate interest
earning  instruments  carries  a  degree  of  interest  rate  risk.  Fixed  rate
securities may have their fair market value adversely  impacted due to a rise in
interest  rates,  while  floating rate  securities  may produce less income than


                                       12
<PAGE>

expected if interest  rates fall.  Due in part to these  factors,  the Company's
future  investment  income  may fall  short of  expectations  due to  changes in
interest  rates or the Company may suffer  losses in principal if forced to sell
securities which have declined in market value due to changes in interest rates.


Foreign Exchange Risk

     The  Company has minimal  exposure to foreign  exchange  risk as all of its
sales to customers outside of the United States are collected in U.S. dollars.



PART II---OTHER INFORMATION

Item 1.  Legal Proceedings

     In September 2000 we sued a third party financial  institution because such
financial  institution  paid a check in the  amount of  $161,000  despite a stop
payment order duly issued by us. The check,  along with a replacement check, was
cashed by the payee.  Before we learned  that both checks had been cashed by the
payee,  we entered into a binding  settlement with the payee ending our business
relationship  with the payee.  The payee  refused to return the  amounts and the
financial institution failed to credit our account. We filed suit, and discovery
has  commenced.  The only  claim  against  us in this  matter  is the  financial
institution's demand for legal fees if the financial  institution prevails. In a
separately  filed  lawsuit,  the payee of the  checks  has  filed an action  for
declaratory relief against the financial  institution and the Company requesting
that the court declare its settlement agreement with the Company to be valid and
binding.  In this  declaratory  relief action,  the payee has requested that the
Company and the financial institution reimburse it for costs and fees associated
with the action.

     In December 2000, a third party (the "Third Party"),  unaffiliated with us,
instituted  arbitration against us in Dallas,  Texas based upon allegations that
we breached a February 18, 2000 professional services agreement. The Third Party
claims damages of $308,083 plus unliquidated amounts for copyright infringement,
interest,  attorney's fees and costs. We filed a counterclaim denying the breach
and claiming  entitlement  to a refund of $73,496  previously  paid to the Third
Party  plus  damages of  $250,000  because  of the Third  Party's  breach of its
obligations  to us. We intend to  vigorously  defend the  arbitration  claim and
prosecute  the  counterclaim,  , but  there  can be no  assurance  that  we will
ultimately prevail.  Because this matter is in its early stages, we have not yet
determined the impact, if any, upon our financial statements.

     In April and May 2001,  the Company  received  notice of or has been served
with three purported class action lawsuits (Foderaro vs. Partsbase.com,  Inc. et
al, Case No.: 01-8319 CIV- FERGUSON;  IKCYBERINVESTMENTS vs. PartsBase.com, Inc.
et al, Case No.: 01-8368 CIV-SEITZ; and and Webb vs. Partsbase,  et.al. Case No.
01-8376 CIV-GRAHAM).  The lawsuits name as defendants,  the Company,  certain of
its current and former  officers  and  directors,  and the  underwriters  of its
initial  public  offering of  securities.  The  lawsuits  allege  violations  of
Sections  11,  12(a)(2)  and 15 of the  Securities  Act of 1933 and  allege  the
Company's  March  2000  registration  statement  misrepresented  and  failed  to
disclose  matters  related to the Company's  business  operations and membership
sales.  The lawsuits  seek damages and  certification  of a class  consisting of
purchasers of the Company's  common stock in the offering during the period from
March 22, 2000 through April 25, 2000. The Company believes that the allegations
contained  in the lawsuits are without  merit and intends to  vigorously  defend
this action.  Nevertheless,  an  unfavorable  resolution of these lawsuits could
have a material adverse effect on the Company in one or more future periods. The
Company  maintains a  directors  and  officers  liability  insurance  policy and
intends to establish a litigation reserve in the second quarter of 2001.

     The Company does not intend to file further  Current Reports on Form 8-K or
other  disclosures  describing  additional  lawsuits,  if any,  purporting class
action status, in either federal or state court,  which are based on allegations
substantially similar to those contained in the lawsuits described herein.


Item 2.  Changes in Securities

     On  September  27, 2000 the  Company's  Board of Directors  authorized  the
Company to  repurchase  up to 500,000  shares of its  outstanding  no par common
stock from time to time on the open market  over the next  twelve  months at the


                                       13
<PAGE>

prevailing  market  price.  Once  purchased,  such shares would become  treasury
stock.  Through March 31, 2001,  the Company had  repurchased a total of 429,585
shares of its outstanding no par common stock at an aggregate  purchase price of
$850,870  inclusive of brokerage  fees, of which 291,900  shares at an aggregate
cost of $520,668 had been purchased  during the quarter ended March 31, 2001. As
of April 30, 2001, the Company had completed the repurchase of 500,000 shares of
its common stock.

     During the quarter ended March 31, 2001,  pursuant to the exercise of stock
options  granted  pursuant to the  Company's  1999 Stock Option Plan (the " 1999
Plan") the Company issued 260,627 shares of its common stock. In connection with
these exercises, the Company generated gross exercise proceeds of $164,195.

     In March 2001, pursuant to the 1999 Plan, the Company granted to several of
its  employees  non-qualified  stock  options to acquire an aggregate of 315,000
shares of the Company's  common stock at a per share exercise price of $5.00 per
share. The options vest on a pro-rata basis over a 48 month period from the date
of grant and expire 10 years from the date of the grant. Additionally,  a member
of the Board of Directors was granted the option to acquire 20,000 shares of the
Company's  common  stock at an  exercise  price of $3.00  per  share at any time
through March 2011.


Item 3.  Defaults Upon Senior Securities

    None.


Item 4.  Submission of Matters to a Vote of Security Holders

    None.


Item 5.  Other Information

     On May 7, 2001, the Company's Board of Directors  authorized the Company to
repurchase an additional  500,000 shares of its  outstanding no par common stock
from  time to time on the  open  market  over  the  next  twelve  months  at the
prevailing  market  price.  Once  purchased,  such shares would become  treasury
stock.


Item 6.  Exhibits and Reports on Form 8-K

     On April 19,  2001,  we filed a Current  Report on Form 8-K dated April 19,
2001 reporting that a purported class action lawsuit against Partsbase.com, Inc.
("Partsbase" or the  "Company"),  certain of its current and former officers and
directors, and the underwriters of its initial public offering has been filed in
the United States District for the Southern  District of Florida.  (Foderaro vs.
Partsbase.com,  Inc. et al, Case No.: 01-8319 CIV- FERGUSON) The lawsuit alleges
violations  of Sections 11,  12(a)(2) and 15 of the  Securities  Act of 1933 and
alleges the  Company's  March 2000  registration  statement  misrepresented  and
failed to disclose  matters  related to the Company's  business  operations  and
membership sales. The Company does not intend to file further Current Reports on
Form 8-K or other disclosures describing additional lawsuits, if any, purporting
class  action  status,  in either  federal  or state  court,  which are based on
allegations  substantially  similar to those contained in the lawsuits described
herein.


                                       14
<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.




Date:  May 14, 2001                   /s/Robert A. Hammond
                                     -----------------------------
                                     ROBERT A. HAMMOND, JR.
                                     President,Chief Executive Officer,
                                     And Chairman
                                     (Principal Executive Officer)



Date:  May 14, 2001                  /s/Michael Siegel
                                     ------------------------------
                                     MICHAEL W. SIEGEL
                                     Chief Financial Officer
                                     (Principal Financial Accounting Officer)


                                       15
<PAGE>



                              PARTSBASE.COM, INC.

                                Index to Exhibits



Title                                                        Exhibit No.
--------------------------------                             -----------
Safe Harbor Compliance Statement                              99.1



                                       16
<PAGE>


                                                                    Exhibit 99.1

                        SAFE HARBOR COMPLIANCE STATEMENT

     The Company  believes  that the  following  risks could cause the Company's
actual results to differ materially from those anticipated.

                 RISKS RELATING TO OUR COMPANY AND OUR BUSINESS

WE HAVE NEVER BEEN PROFITABLE,  ANTICIPATE CONTINUED LOSSES AND CANNOT GUARANTEE
PROFITABILITY  IN THE  FUTURE.  We have  never  been  profitable  and  expect to
continue to incur operating losses until at least the end of fiscal 2001. We may
be unable to ever  achieve  profitability  in the future.  We have  incurred net
losses  in each  accounting  period  since we began  operations  in April  1996,
totaling  $22,915,367 as of March 31, 2001. We will need to generate significant
revenues and reduce our expenses to achieve profitability. Although our revenues
have  grown in  recent  periods,  we  cannot  assure  you  that we will  achieve
sufficient revenues for profitability.  Even if we do achieve profitability,  we
cannot assure you that we can sustain or increase  profitability  on a quarterly
or annual basis in the future. If revenues grow slower than we anticipate, or if
operating  expenses exceed our  expectations or cannot be adjusted  accordingly,
our business,  results of operations and financial  condition will be materially
and adversely affected.

WE CANNOT PREDICT OUR SUCCESS BECAUSE OUR BUSINESS MODEL IS UNPROVEN AND WE HAVE
OPERATED OUR BUSINESS FOR ONLY A SHORT PERIOD OF TIME. Our business model is new
to the  aviation  industry  and our ability to  generate  revenues or profits is
unproven. We have a limited operating history,  which will make it difficult for
you to evaluate  our  performance.  Our  prospects  will be  dependent  upon our
ability to effectively  implement our business model and adapt to changes in the
business-to-business  e-commerce  market. If our business model is not viable or
if we are unable to identify and address changes in our markets,  we will not be
able to grow our business,  compete effectively or achieve profitability.  These
factors could cause our stock price to fall significantly.

WE  PRIMARILY  RELY  ON  REVENUE  FROM  SUBSCRIPTIONS  AND WE MAY NOT BE ABLE TO
SUCCESSFULLY EXPAND OUR MEMBERSHIP BASE OR ESTABLISH ADDITIONAL REVENUE SOURCES.
We  currently  generate  revenues  from  e-commerce  customers  in the  aviation
industry  who  subscribe  to our  service.  Our success will be dependent on our
ability to expand our  membership  base within the aviation  industry.  While we
have  experienced  increases in our subscriber  base,  there can be no assurance
that our recent growth in subscriber  base can be  continued.  In addition,  our
success will depend on our ability to generate  additional  revenues through the
introduction of a transaction-based  model and/or the expansion into new markets
and  industries.  We cannot assure you that we will be successful in any efforts
to generate additional revenues.

WE RECEIVE  SUBSTANTIALLY  ALL OF OUR REVENUE FROM  PARTICIPANTS IN THE AVIATION
INDUSTRY,  SO A DOWNTURN IN THE AVIATION INDUSTRY COULD DAMAGE OUR BUSINESS.  We
receive  substantially  all of our  revenue  from  members  associated  with the
aviation  industry,  and we expect these revenues will account for substantially
all of our  revenues  for the  foreseeable  future.  Our  dependence  on members
associated  with the aviation  industry makes us vulnerable to downturns in that
industry. A downturn could lead our members to reduce their level of activity on
our e-marketplace and cause some to cancel their subscription.

INTENSE COMPETITIVE PRESSURES IN THE BUSINESS-TO-BUSINESS  E-COMMERCE MARKET MAY
IMPEDE OUR ABILITY TO ESTABLISH A  SUBSTANTIAL  MARKET SHARE THAT WOULD ALLOW US
TO BE PROFITABLE.  The  business-to-business  e-commerce  market is new, rapidly
evolving,  and  intensely  competitive,  and we expect  competition  to  further
intensify in the future.  Barriers to entry are  minimal,  and  competitors  may
develop and offer services  similar to ours in the future.  Recent entrants into
the business-to-business  aviation parts market include an alliance of prominent
aircraft  parts  manufacturers  and  aviation  industry  participants  that have
superior  capital  resources and  established  reputations  in the industry.  In
addition,  we expect that additional  companies will offer competing  e-commerce
solutions in the future, and our business could be severely harmed if we are not
able to compete successfully against current or future competitors. In addition,
our  members  and  partners  may become  competitors  in the  future.  Increased
competition  is  likely to result in price  reductions,  reduced  gross  margins
and/or loss of market share,  any of which could harm our  business.  Our actual
and  potential  competitors  vary in size and in the  scope and  breadth  of the
services they offer.

                                       1
<PAGE>

QUARTERLY  OPERATING  RESULTS  ARE  SUBJECT  TO  SIGNIFICANT  FLUCTUATIONS.  Our
revenues and operating  results may vary  significantly  from quarter to quarter
due to a number of factors,  not all of which are in our control.  These factors
include:

         - subscriber and advertiser demand for our solutions;

         - user traffic levels and activity on our e-marketplace;

         - seasonal fluctuations in Internet usage;

         - changes in the growth rate of Internet usage;

         - the commitment of e-commerce customers in the aviation industry who
           subscribe to our service;

         - the timing and amount of costs relating to the expansion of our
           operations;

         - changes in our pricing policies or those of our competitors;

         - the introduction of new solutions by us or our competitors;

         - costs related to acquisitions of technology or businesses; and

         - general economic and market conditions.

     Our  revenues  for the  foreseeable  future will remain  dependent  on user
traffic  levels and the  commitment  of  e-commerce  customers  in the  aviation
industry who  subscribe to our service.  Such future  revenues are  difficult to
forecast. In addition, we plan to continue our expansion, to upgrade and enhance
our  technology,  and to market and support our  solutions.  We may be unable to
adjust spending quickly enough to offset any unexpected revenue shortfall. If we
have a shortfall  in revenues in relation to our  expenses,  or if our  expenses
precede  increased  revenues,  then our  business,  results  of  operations  and
financial  condition would be materially and adversely  affected.  Such a result
would  likely  affect the market price of our common stock in a manner which may
be unrelated to our long-term operating performance.

     Due to all of the foregoing  factors and the other risks  discussed in this
section, you should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future  performance.  It is possible that in some
future periods our results of operations may be below the expectations of public
market analysts and investors.  In this event, the price of our common stock may
fall.

IF WE FAIL TO  EFFECTIVELY  MANAGE  OUR  RAPIDLY  EXPANDING  OPERATIONS  AND THE
INCREASING  USE OF OUR  SERVICES,  WE MAY  LOSE  MEMBERS  OR  INCUR  SIGNIFICANT
EXPENSES.  Our success depends on effective planning and growth  management.  We
will  need to  continue  to  improve  our  financial  and  managerial  controls,
reporting systems, and procedures, and we will need to continue to expand, train
and manage our  workforce.  We continue to increase the scope of our  operations
and we have grown our workforce substantially.  Our rapid growth has placed, and
will continue to place, a significant  strain on our management and  operational
systems and resources.  If we do not successfully  implement and integrate these
new systems or if we fail to scale these systems to our growth,  the performance
of our Web site may suffer  which would cause us to lose  members.  In addition,
any failure could make us unable to operate with  adequate,  accurate and timely
financial  and  operational  information  which  could  result  in us  incurring
unnecessary and possibly damaging expenses.

BECAUSE  OUR  REVENUE  IS  DERIVED  FROM  PROVIDING   E-MARKETPLACE   ACCESS  TO
SUBSCRIBERS FOR AN ANNUAL  SUBSCRIPTION  FEE, THE CANCELLATION OR NON-RENEWAL OF
THESE SUBSCRIPTIONS WOULD HURT OUR BUSINESS. We have generated substantially all
of our revenues to date through subscriber fees for access to our e-marketplace.
Generally,  our  subscription  fees  are  paid on an  annual  basis,  and  these
subscriptions  may  be  terminated  on  short-term   notice.  We  have  expended
significant  financial and personnel  resources and have expanded our operations
on the assumption that our subscribers will renew these annual subscriptions. We
do not have a  sufficiently  long  history of  operations  to be able to predict
renewal  rates.  If our  subscribers  fail  to  continuously  renew,  or if they
terminate, their subscriptions,  our revenues would be significantly reduced and
our business could suffer dramatically.

THERE IS A FINITE  NUMBER  OF  POTENTIAL  SUBSCRIBERS  AND WE MAY BE  UNABLE  TO
DEVELOP OTHER MEANS OF GENERATING REVENUE, SO OUR GROWTH MAY BE LIMITED. A major


                                       2
<PAGE>

element of our growth  strategy is the  expansion of our  subscriber  base.  Our
potential  subscriber  base is  limited  by the  number of  participants  in the
aviation market. Additionally, the barriers to entry which exist in the aviation
market may limit the entry of  additional  subscribers  into our  e-marketplace.
Accordingly,  the number of potential subscribers to our e-marketplace is likely
finite,  in which  case our  revenues  may be  similarly  limited  if we  cannot
generate revenue through other means.

IF OUR  SELLERS DO NOT  PROVIDE  TIMELY,  PROFESSIONAL  AND LAWFUL  DELIVERY  OF
PRODUCTS TO OUR BUYERS,  OUR MEMBERSHIP MAY DECREASE AND WE MAY HAVE  LIABILITY.
We rely on our sellers to deliver  purchased parts and products to our buyers in
a professional,  safe and timely manner. If our sellers do not deliver the parts
and products to our buyers in a professional,  safe and timely manner,  then our
service will not meet customer expectations and our reputation and brand will be
damaged.  In  addition,  deliveries  that  are  nonconforming,  late  or are not
accompanied by information  required by applicable  laws or  regulations,  could
expose us to liability or result in decreased  adoption and use of our solution,
which could have a negative  effect on our business,  results of operations  and
financial condition.

WE CANNOT GUARD AGAINST HARM TO OUR BUSINESS FROM THE  FRAUDULENT  ACTIVITIES OF
THIRD  PARTIES ON OUR WEB SITE.  Our future  success  will depend  largely  upon
sellers reliably  delivering and accurately  representing  their listed products
and buyers paying the agreed purchase price. We do not take  responsibility  for
the  delivery of payment or goods to any member.  We have  received in the past,
and anticipate that we will receive in the future,  communications  from members
who  did  not  receive  the  purchase  price  or the  products  that  were to be
exchanged.  While we can suspend the  privileges  of members who fail to fulfill
their delivery or payment  obligations,  we do not currently have the ability to
require  sellers  to  deliver  products  or buyers to make  payments.  We do not
compensate  members who believe they have been defrauded by other  members.  Any
negative  publicity  generated as a result of fraudulent or deceptive conduct by
members of our e-marketplace  could damage our reputation and diminish the value
of our brand  name.  We may in the future  receive  requests  from  members  for
reimbursement or threats of legal action against us if no reimbursement is made.
Any resulting  litigation could be costly for us, divert  management  attention,
result in  increased  costs of doing  business,  lead to adverse  judgments,  or
otherwise harm our business.

IF WE ARE UNABLE TO  IMPLEMENT  ADEQUATE  MEASURES TO MAINTAIN  THE VALUE OF OUR
INTELLECTUAL  PROPERTY AND INTERNET  DOMAIN NAME,  OUR ABILITY TO COMPETE MAY BE
SEVERELY  HARMED.  As an Internet  company,  our current and future  copyrights,
service  marks,  trademarks,  patents,  trade  secrets,  domain name and similar
intellectual property, if any, are especially vital to our success.  Despite our
precautions,  unauthorized  third  parties may  infringe or  misappropriate  our
intellectual  property,  copy  portions of our  services or reverse  engineer or
obtain and use information  that we regard as proprietary.  Any  infringement or
misappropriation of our intellectual  property or proprietary  information could
make it  difficult  for us to compete.  In addition,  we currently  hold various
Internet  Web  addresses  relating  to our  network,  including  the domain name
"PARTSBASE.COM."  If we are not able to prevent third parties from acquiring Web
addresses that are similar to our addresses, third parties could acquire similar
domain names which could  create  confusion  that diverts  traffic away from our
e-marketplace to other competing Web sites.

OTHER PARTIES MAY ASSERT  CLAIMS  AGAINST US THAT WE ARE  INFRINGING  UPON THEIR
INTELLECTUAL  PROPERTY  RIGHTS,  WHICH COULD HARM OUR  FINANCIAL  CONDITION  AND
ABILITY TO COMPETE.  We cannot be certain that our services do not infringe upon
the intellectual  property rights of others.  Because patent applications in the
United  States  are  not  publicly   disclosed   until  the  patent  is  issued,
applications  may have been  filed  which  relate to  services  similar to those
offered by us. We may be subject to legal  proceedings  and claims  from time to
time in the  ordinary  course  of our  business,  including  claims  of  alleged
infringement of the trademarks and other  intellectual  property rights of third
parties.  If our services  violate  third-party  proprietary  rights,  we cannot
assure you that we would be able to obtain  licenses to continue  offering  such
services on  commercially  reasonable  terms,  or at all. Any claims  against us
relating to the  infringement  of third-party  proprietary  rights,  even if not
meritorious,  could  result in the  expenditure  of  significant  financial  and
managerial  resources and for injunctions  preventing us from distributing these
services. Such claims could severely harm our financial condition and ability to
compete.


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IF WE ARE UNABLE TO LICENSE  THIRD-PARTY  TECHNOLOGIES OR EFFECTIVELY  INTEGRATE
THEM, WE MAY EXPERIENCE DELAYS IN DEVELOPMENT OR EXPANSION OF OUR BUSINESS.  The
e-commerce market is rapidly evolving and we have and will depend on third-party
software and other  technology  for the effective  operation of our Web site and
business.  We may not be  able  to  license  or  renew  the  license  for  these
technologies  on  terms  favorable  to us or at all.  Our  inability  to  obtain
necessary  third-party  licenses  could delay the continued  development  of our
business and services  which could result in a loss of members,  slow our growth
and severely  harm our  business.  In  addition,  even if we are able to license
needed technology,  we may not be able to successfully integrate such technology
into our  operations  which  could also  result in a loss of  members,  slow our
growth and severely harm our business.

RISKS RELATED TO THE INTERNET AND E-COMMERCE INDUSTRIES

OUR GROWTH MAY BE IMPAIRED IF THE  INTERNET IS UNABLE TO  ACCOMMODATE  GROWTH IN
E-COMMERCE.  Our success  depends on the widespread use of and growth in the use
of the Internet  for  retrieving,  sharing and  transferring  information  among
buyers  and  sellers  in the  aviation  parts  market.  If the  Internet  cannot
accommodate growth in e-commerce or experiences periods of poor performance, the
growth of our  business  may  suffer.  Our  ability to sustain  and  improve our
services is  limited,  in part,  by the speed and  reliability  of the  networks
operated by third parties.  Consequently, the emergence and growth of the market
for our  services  is  dependent  on  improvements  being  made to the  Internet
infrastructure  to  alleviate  overloading  and  congestion.  Additionally,  the
possible slow adoption of the Internet as a means of commerce by businesses  may
harm  our  prospects.  Even if the  Internet  is  widely  adopted  as a means of
commerce, the adoption of our network for procurement, particularly by companies
that  have  relied on  traditional  means of  procurement,  will  require  broad
acceptance of e-commerce and online purchasing. In addition, companies that have
already invested substantial resources in traditional methods of procurement, or
in-house  e-commerce  solutions,  may  be  reluctant  to  adopt  our  e-commerce
solution, thus impairing the growth of our member base and revenue potential.

THE SECURITY  RISKS RELATED TO E-COMMERCE MAY CAUSE MEMBERS TO REDUCE THE USE OF
OUR SERVICES,  AND ATTEMPTING TO GUARD AGAINST THESE RISKS MAY CAUSE US TO INCUR
SIGNIFICANT   COSTS  AND  EXPENSES.   A  fundamental   requirement   to  conduct
business-to-business  e-commerce is the secure  transmission of information over
public networks. If our members are not confident in the security of e-commerce,
they  may  not  effect   transactions  on  our   e-marketplace  or  renew  their
subscriptions, which would severely harm our business. There can be no guarantee
that  advances  in  computer  capabilities,  new  discoveries  in the  field  of
cryptography,  or other developments will not result in the compromise or breach
of the  algorithms  that  we use to  protect  content  and  transactions  on our
e-marketplace or proprietary information in our databases. We may be required to
incur  significant  costs to protect against  security  breaches or to alleviate
problems caused by breaches.  Further, a well-publicized  compromise of security
could deter people from using the Internet to conduct  transactions that involve
transmitting confidential information. Our failure to prevent security breaches,
or well-publicized  security breaches  affecting the Internet in general,  could
adversely affect the willingness of our members to use our services.

IF OUR SELLERS FAIL TO PROVIDE TIMELY AND ACCURATE  INFORMATION,  OUR MEMBERSHIP
BASE AND  POTENTIAL  REVENUE MAY  DECLINE.  Our members use our service in large
part because of the comprehensive  breadth and accuracy of our databases.  It is
our  responsibility  to load seller  product  information  into our database and
categorize the information for search purposes. However, we are dependent on our
sellers to provide us in a timely manner with  accurate,  complete,  and current
information  regarding  inventory.  If our timely loading of this information is
impaired, this could result in member dissatisfaction and a loss of members.

WE MAY NOT BE ABLE TO KEEP  UP  WITH  TECHNOLOGICAL  ADVANCEMENTS,  WHICH  COULD
RESULT IN A LOSS OF  MEMBERS  AND HARM OUR  ABILITY TO  COMPETE.  The market for
Internet commerce is characterized by rapid change,  evolving industry standards
and the frequent  introduction of new technological  products and services.  The
introduction of new technology,  products, services or standards may prove to be
too  difficult,  costly or simply  impossible  to  integrate  into our  existing
systems. Moreover,  innovations could render obsolete our existing or any future
products  and  services.  Our  ability to remain  competitive  will also  depend
heavily  upon our ability to maintain  and upgrade our  technology  products and
services.  We must continue to add hardware and enhance  software to accommodate
any increased  content and use of our Web site. If we are unable to increase the
data  storage and  processing  capacity of our systems at least in pace with the
growth in  demand,  our Web site may fail to  operate  at an  optimal  level for
unknown  periods  of time.  As a  relatively  small  company  in the  market for
Internet  commerce,  we will be in a position  of  responding  to  technological


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changes  rather  than  establishing  them.  Any  difficulty  keeping  pace  with
technological advancements could hurt our ability to retain members and
effectively compete.


BECAUSE WE DO NOT MAINTAIN A REDUNDANT SYSTEM, ANY SYSTEM FAILURE COULD DELAY OR
INTERRUPT  OUR SERVICE  WHICH COULD  SEVERELY  HARM OUR BUSINESS AND RESULT IN A
LOSS OF MEMBERS. Our ability to successfully maintain an e-commerce  marketplace
and  provide  acceptable  levels of  customer  service  depends  largely  on the
efficient  and  uninterrupted  operation  of  our  computer  and  communications
hardware and network systems. Any interruptions could severely harm our business
and result in a loss of members.  Our  computer and  communications  systems are
located in Boca Raton,  Florida.  Although we periodically back up our databases
to tapes and store the backup tapes offsite,  we have not maintained a redundant
site. As a result,  our systems and  operations are  particularly  vulnerable to
damage or interruption from human error, sabotage, fire, flood, hurricane, power
loss,  telecommunications  or equipment  failure,  and similar events. We cannot
assure you that we will not experience system failures in the future.  Moreover,
we have  experienced  delays and  interruptions  in our  telephone  and Internet
access  which have  prevented  members  from  accessing  our  e-marketplace  and
customer  service  department.  Furthermore,  we do not have a  formal  disaster
recovery plan and do not carry  sufficient  business  interruption  insurance to
compensate us for losses that may occur as a result of any system  failure,  and
therefore the  occurrence of any system  failure or similar event could harm our
business dramatically.

DEFECTS IN THE COMPLEX SOFTWARE ON WHICH OUR SERVICES DEPEND COULD CAUSE SERVICE
INTERRUPTIONS  THAT COULD DAMAGE OUR  REPUTATION  AND HARM OUR BUSINESS.  Unlike
many  traditional  suppliers and  distributors  of aviation parts, we are wholly
dependent  on the  error-free  functioning  of our Web site  and its  associated
software. Our e-marketplace depends on complex software developed internally and
by third parties.  Moreover, we are relying on third-party software to implement
our transaction-based model, which software has not yet been integrated into our
system.  Software often contains defects,  particularly when first introduced or
when new versions are released. Our testing procedures may not discover software
defects that affect our new or current services or enhancements until after they
are  deployed.  These defects  could cause  service  interruptions,  which could
damage our reputation or increase our service  costs,  cause us to lose revenue,
delay market acceptance, or divert our development resources, any of which could
severely harm our business, financial condition, and results of operations.

WE COULD FACE LIABILITY FOR INFORMATION  RETRIEVED FROM OR TRANSMITTED  OVER THE
INTERNET AND LIABILITY FOR AIRCRAFT PRODUCTS SOLD OVER THE INTERNET. We could be
exposed  to  liability  with  respect  to  third-party  information  that may be
accessible through our Web site. If any third-party content information provided
on our Web site contains errors, consumers potentially could make claims against
us for losses  incurred in reliance on that  information.  In addition,  because
defective  aviation  products  can result in  substantial  losses of property or
life, we have a relatively  greater risk of being  exposed to product  liability
claims  arising out of or relating to aviation  parts and products  sold through
our Web site, which could result in us incurring  substantial defense costs and,
if successful,  liability,  either of which could severely harm our business. We
currently  carry no policies  which would  insure us against  product  liability
claims.

RISKS ASSOCIATED WITH POTENTIAL  ACQUISITIONS OR INVESTMENTS.  We may acquire or
make   investments   in   complementary   businesses,   products,   services  or
technologies. From time to time we may have discussions with companies regarding
our  acquiring,  or  investing  in,  their  businesses,  products,  services  or
technologies.  We cannot  assure you that we will be able to  identify  suitable
acquisition  or  investment   candidates.   Even  if  we  do  identify  suitable
candidates,  we cannot assure you that we will be able to make such acquisitions
or investments on commercially  acceptable terms. If we buy a company,  we could
have difficulty in  assimilating  that company's  personnel and  operations.  In
addition,  the key personnel of the acquired  company may decide not to work for
us.  If we make  other  types of  acquisitions,  we  could  have  difficulty  in
assimilating  the  acquired   products,   services  or  technologies   into  our
operations.  These difficulties could disrupt our ongoing business, distract our
management and employees, increase our expenses and adversely affect our results
of operations due to accounting requirements such as goodwill.  Furthermore,  we
may incur debt or issue equity  securities  to pay for any future  acquisitions.
The   issuance  of  equity   securities   could  be  dilutive  to  our  existing
stockholders.

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FUTURE  GROWTH  OF OUR  OPERATIONS  MAY MAKE  ADDITIONAL  CAPITAL  OR  FINANCING
NECESSARY.  We anticipate  that we have  sufficient  working capital to meet our
working capital needs for at least the next 12 months.  However,  we may need to
raise additional funds in the future in order to:

         - finance unanticipated working capital requirements;
         - develop or enhance existing services or products;
         - respond to competitive pressures; and
         - acquire complementary businesses, technologies, content or products.


We cannot be certain  that we will be able to obtain  needed  funds on favorable
terms,  if at all.  If we decide to raise  funds by  issuing  additional  equity
securities, investors in our common stock may experience additional dilution.

WE MAY BE UNABLE TO OBTAIN SUFFICIENT FUNDS TO EFFECTIVELY  OPERATE OUR BUSINESS
WHICH COULD DAMAGE OUR COMPETITIVE  POSITION. In the rapidly evolving and highly
competitive e-commerce industry, our future prospects will depend heavily on our
ability  to  take  advantage  of  new  business  opportunities  and  respond  to
technological  developments.  There  can be no  assurances  that  we  will  have
sufficient capital resources to respond to business opportunities, technological
advancements  and  competitive  pressures.  A lack of  capital  resources  could
seriously damage our competitive position and prospects.

YOU MAY EXPERIENCE SIGNIFICANT VOLATILITY IN THE MARKET VALUE OF YOUR SHARES AND
MAY BE UNABLE TO SELL OUR STOCK ON TERMS  FAVORABLE  TO YOU.  Because we have no
history of  profitability,  it will be  difficult  for  investors  in the public
market to determine the intrinsic value of our shares. In addition,  our initial
market  capitalization  and  public  float is  small  relative  to other  public
companies in the business-to-business  e-commerce or other sectors. As a result,
the price at which our common  stock trades may be more  volatile  than those of
other public  companies  and, as a result,  it may be more  difficult for you to
sell  our  stock  on  terms  favorable  to you.  In  addition,  any  significant
volatility  in the  market  price  of  our  common  stock  could  result  in the
initiation  of  securities  class  action  litigation  which  could  divert  our
management and financial resources from more productive uses.



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