|UNITED STATES
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM 10-Q


(Mark One)
|--------------------------------------------------------------------------------------------------

||X| |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2002
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------

||_| |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934For the transition period from _______ to _______
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------

|Commission File Number 0-28536


NEW CENTURY EQUITY
HOLDINGS CORP.(Exact name of registrant as
specified in its charter)
|------------------------------------------------------------------------------------------------------------------------

|Delaware
(State or other jurisdiction of
incorporation or organization) | 74-2781950
(I.R.S. Employer
Identification Number)
|----------------------------------------------------------------------- | --------------------------------------------------

|10101 Reunion Place, Suite 450, San Antonio, Texas
(Address of principal executive offices) | 78216
(Zip code)
|------------------------------------------------------------------------------------------- | ----------------

|(210) 302-0444
(Registrant's telephone number, including area code)



Indicate
by check mark whether the registrant (1) has 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 periods that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. |X|
Yes |_| No



Indicated
below is the number of shares outstanding of the registrants only class of common
stock at October 28, 2002:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Title of Class
Common Stock, $0.01 par value | Number
of SharesOutstanding
34,217,620
|-------------------------------------------- | --------------------------------------

|
|

|
|

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES


INDEX
|----------------------------------------------------------

| |  |  |  | PAGE
| |  |  |  | ----

|PART I FINANCIAL INFORMATION
|----------------------------

|Item
      1. |  | Interim
      Condensed Consolidated Financial Statements (Unaudited)                                                               |  |   
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------- |  | --
|              |  | Condensed
      Consolidated Balance Sheets  September 30, 2002 and December 31, 2001                                              |  | 3 
|              |  | Condensed
      Consolidated Statements of Operations  For the Quarters and Nine Months
         Ended September 30, 2002 and 2001 |  | 4 
|              |  | Condensed
      Consolidated Statements of Cash Flows  For the Nine Months Ended
         September 30, 2002 and 2001              |  | 5 
|              |  | Notes
      to Interim Condensed Consolidated Financial Statements                                                                  |  | 6 
|Item
      2. |  | Managements
      Discussion and Analysis of Financial Condition and Results
         of Operations                                |  | 14
|Item
      3. |  | Quantitative
      and Qualitative Disclosure about Market Risk                                                                     |  | 16
|Item
      4. |  | Controls
      and Prodedures                                                                                                       |  | 16

|PART II OTHER INFORMATION
|-------------------------

|Item
      1. |  | Legal
      Proceedings                |  | 17
|------------- |  | -------------------------------------- |  | --
|Item
      6. |  | Exhibits
      and Reports on Form 8-K |  | 17

|SIGNATURE     |  |  |  | 18
|------------- |  |  |  | --
|CERTIFICATION |  |  |  | 19

|2
|-

|PART I FINANCIAL INFORMATION






Item 1. Interim Condensed Consolidated Financial Statements






NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                            | September 30,2002 |         | December 31,2001
|--------------------------------------------------------------------------- | ----------------- | ------- | ----------------
|
|ASSETS                                                                     
|Current assets:                                                            
|Cash
      and cash equivalents                                             | $                 | 9,169   |                 
|Accounts
      receivable, net                                              |                   | 971     |                 
|Inventory                                                                   |                   | 485     |                 
|Prepaid
      and other assets                                              |                   | 249     |                 
|                                                                            |                   |         |                 
|Total
      current assets                                                  |                   | 10,874  |                 
|Property
      and equipment, net                                           |                   | 525     |                 
|Other assets,
      net                                                     |                   | 185     |                 
|Investments
      in affiliates                                             |                   | 10,634  |                 
|                                                                            |                   |         |                 
|Total
      assets                                                          | $                 | 22,218  |                 
|                                                                            |                   |         |                 
|                                                                           
|LIABILITIES AND STOCKHOLDERS EQUITY                                       
|Current liabilities:                                                       
|Accounts
      payable                                                      | $                 | 665     |                 
|Accrued
      liabilities                                                   |                   | 1,162   |                 
|Revolving
      credit note                                                 |                   | 262     |                 
|Net
      current liabilities from discontinued operations                  |                   | 131     |                 
|                                                                            |                   |         |                 
|Total
      current liabilities                                             |                   | 2,220   |                 
|Executive
      deferred compensation and other liabilities                 |                   | 39      |                 
|Long-term
      debt to minority stockholders, net of discount and minority
|interest
      in consolidated affiliate                                    |                   | 265     |                 
|                                                                            |                   |         |                 
|Total
      liabilities                                                     |                   | 2,524   |                 
|Commitments
      and contingencies                                        
|Minority
      interest in consolidated affiliate                           |                   |        |                 
|Stockholders
      equity:                                                
|Preferred
      stock, $0.01 par value, 10,000,000 shares authorized;      
|no
      shares issued or outstanding at September 30 or December 31        |                   |        |                 
|Common
      stock, $0.01 par value, 75,000,000 shares authorized;         
|34,217,620
      and 34,205,920 shares issued and outstanding at           
|September
      30 and December 31, respectively                            |                   | 342     |                 
|Additional
      paid-in capital                                            |                   | 70,346  |                 
|Accumulated
      deficit                                                   |                   | (50,994 | )               
|                                                                            |                   |         |                 
|Total
      stockholders equity                                            |                   | 19,694  |                 
|                                                                            |                   |         |                 
|Total
      liabilities and stockholders' equity                            | $                 | 22,218  |                 
|                                                                            |                   |         |                 

|The accompanying notes are an integral part of these interim condensed consolidated financial statements.
|---------------------------------------------------------------------------------------------------------

|3
|-

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------

|                                                      | Quarter Ended
      September 30, |   | Nine Months
      Ended
      September 30,
|----------------------------------------------------- | --------------------------------- | - | -------------------------------------------
|
|Operating
      revenues                              |                                   | $ | 889                                        
|Cost
      of revenues                                |                                   |   | 983                                        
|                                                      |                                   |   |                                            
|Gross
      (loss) profit                             |                                   |   | (94                                        
|Selling,
      general and administrative expenses    |                                   |   | 1,069                                      
|Research
      and development expenses               |                                   |   | 285                                        
|Depreciation
      and amortization expenses          |                                   |   | 65                                         
|Impairment
      loss                                 |                                   |   |                                           
|                                                      |                                   |   |                                            
|Operating
      loss from continuing operations       |                                   |   | (1,513                                     
|                                                      |                                  
|Other
      income (expense):                         |                                  
|Interest
      (expense) income, net                  |                                   |   | (169                                       
|Equity
      in net loss of affiliates                |                                   |   | (1,189                                     
|Consulting
      income                               |                                   |   | 938                                        
|Realized
      gains on available-for-sale securities |                                   |   |                                           
|Other
      income, net                               |                                   |   | 48                                         
|Minority
      interest in consolidated affiliate     |                                   |   | 543                                        
|                                                      |                                   |   |                                            
|Total
      other income (expense), net               |                                   |   | 171                                        
|                                                      |                                   |   |                                            
|Loss
      from continuing operations before income   |                                  
|tax
      (expense) benefit                           |                                   |   | (1,342                                     
|Income
      tax (expense) benefit                    |                                   |   |                                           
|                                                      |                                   |   |                                            
|Net
      loss from continuing operations             |                                   |   | (1,342                                     
|                                                      |                                  
|Discontinued
      operations:                        |                                  
|Net
      income from disposal of discontinued        |                                  
|operations                                            |                                   |   |                                           
|                                                      |                                   |   |                                            
|Net
      loss                                        |                                   | $ | (1,342                                     
|                                                      |                                   |   |                                            
|Basic
      and diluted:                              |                                  
|Net
      loss from continuing operations per         |                                  
|common
      share                                    |                                   | $ | (0.04                                      
|Net
      income from disposal of discontinued        |                                  
|operations
      per common share                     |                                   |   |                                           
|                                                      |                                   |   |                                            
|Net
      loss per common share                       |                                   | $ | (0.04                                      
|                                                      |                                   |   |                                            
|Weighted
      average common shares outstanding      |                                   |   | 34,218                                     
|                                                      |                                   |   |                                            

|The accompanying notes are an integral part of these interim condensed consolidated financial statements.
|---------------------------------------------------------------------------------------------------------

|4
|-

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|-----------------------------------------------------------------------------------------------------------------------------

|                                                                               | Nine Months
      Ended
      September 30,
|------------------------------------------------------------------------------ | -------------------------------------------
|
|Cash
      flows from operating activities:                                    |                                            
|Net
      loss from continuing operations                                      | $                                          
|Adjustments
      to reconcile net loss from continuing operations to net cash
|provided
      by (used in) operating activities:                             
|Depreciation
      and amortization expenses                                   |                                            
|Impairment
      loss                                                          |                                            
|Equity
      in net loss of affiliates                                         |                                            
|Amortization
      of discount on long-term debt to minority stockholders      |                                            
|Realized
      gains from sale of available-for-sale securities                |                                            
|Minority
      interest in consolidated affiliate                              |                                            
|Changes
      in operating assets and liabilities:                            
|Decrease
      in accounts receivable                                          |                                            
|Decrease
      in inventory                                                    |                                            
|Decrease
      (increase) in prepaid and other assets                          |                                            
|Increase
      in accounts payable                                             |                                            
|Decrease
      in accrued liabilities                                          |                                            
|Increase
      (decrease) in other liabilities and other noncash items         |                                            
|                                                                               |                                            
|Net
      cash provided by continuing operating activities                     |                                            
|Net
      cash provided by (used in) discontinued operating activities         |                                            
|                                                                               |                                            
|Net
      cash provided by (used in) operating activities                      |                                            
|                                                                              
|Cash
      flows from investing activities:                                   
|Purchases
      of property and equipment                                      |                                            
|Investments
      in available-for-sale securities                             |                                            
|Proceeds
      from sale of available-for-sale securities                      |                                            
|Investment
      in consolidated affiliate                                     |                                            
|Investments
      in and advances to affiliates                                |                                            
|Redemption
      of investments in affiliates                                  |                                            
|Other
      investing activities                                               |                                            
|                                                                               |                                            
|Net
      cash used in investing activities                                    |                                            
|                                                                              
|Cash
      flows from financing activities:                                   
|Proceeds
      from issuance of common stock                                   |                                            
|Purchases
      of treasury stock                                              |                                            
|Borrowings
      on revolving credit note                                      |                                            
|Repayments
      on revolving credit note                                      |                                            
|                                                                               |                                            
|Net
      cash provided by (used in) financing activities                      |                                            
|                                                                               |                                            
|Net
      increase (decrease) in cash and cash equivalents                     |                                            
|Cash
      and cash equivalents, beginning of period                           |                                            
|                                                                               |                                            
|Cash
      and cash equivalents, end of period                                 | $                                          
|                                                                               |                                            
|Supplemental
      disclosure of financial information:                       
|Cash
      paid for interest                                                   | $                                          
|Cash
      paid for income taxes                                               | $                                          

|The accompanying notes are an integral part of these interim condensed consolidated financial statements.
|---------------------------------------------------------------------------------------------------------

|5
|-

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Note 1. Basis of Presentation


The
interim condensed consolidated financial statements included herein have been
prepared by New Century Equity Holdings Corp. and subsidiaries, formerly known
as Billing Concepts Corp., (collectively, the Company), without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations. In the opinion of the
Companys management, the accompanying interim condensed consolidated
financial statements reflect all adjustments, of a normal recurring nature, that
are necessary for a fair presentation of the Companys financial position,
results of operations and cash flows for such periods. It is recommended that
these interim condensed consolidated financial statements be read in conjunction
with the consolidated financial statements and the notes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2001.
Results of operations for the interim periods are not necessarily indicative of
results that may be expected for any other interim periods or the full fiscal
year.


The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.


In
October 2000, the Company completed the sale of the Transaction Processing and
Software divisions to Platinum Holdings (Platinum) of Los Angeles,
California (the Transaction), for initial consideration of $49.7
million. In conjunction with the Transaction, the Company may be entitled to
receive additional consideration consisting of potential royalty payments,
assuming the achievement of certain post-closing revenue targets, of $10.0
million related to the LEC Billing division, $5.0 million related to the Aptis
division and $5.0 million related to the OSC division. The post-closing revenue
target for the LEC Billing division applied to the eighteen-month period
subsequent to the Transaction, while the post-closing revenue targets for the
Aptis and OSC divisions apply to the three-year period subsequent to the
Transaction. In May 2002, it was determined that the post-closing revenue
targets for the LEC Billing division were not achieved and therefore, the
Company will not receive the corresponding $10.0 million royalty payment.
Management cannot assess the probability of the Aptis division or the OSC
division achieving its respective post-closing revenue targets necessary to
generate any remaining potential royalty payments to the Company.


The
Company is also entitled to receive payments totaling $7.5 million for
consulting services provided to Platinum over the twenty-four month period
subsequent to the Transaction. The Company has received aggregate payments of
$7.2 million for consulting services through September 30, 2002, which have been
reported in other income (expense) as consulting income.


Note 2. Acquisitions and
Investments


During
the quarter ended March 31, 2002, the Company invested $1.5 million, of a total
$2.5 million equity financing, in Princeton eCom Corporation
(Princeton). In exchange for its investment, the Company received
1.5 million shares of Princetons mandatorily redeemable convertible
preferred stock. In April 2002, the Company committed to finance $3.75 million,
of a total $8.5 million equity commitment, to Princeton during the year ended
December 31, 2002. During April and May 2002, the Company funded $2.4 million of
its total $3.75 million commitment in exchange for shares of Princetons
mandatorily redeemable convertible preferred stock.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6
|-

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)


In conjunction
with the completion of
Princetons equity financing in June 2002, the Company received $1.5 million in proceeds from the redemption
of mandatorily redeemable convertible preferred stock of Princeton. In addition,
the Company is no longer required to fund its remaining $1.4 million commitment
to Princeton. As of September 30, 2002, the Companys ownership of the
outstanding and fully diluted shares (considering all issued options and
warrants) of Princeton was 38.2% and 35.2%, respectively.


Note 3. Financial Information of
Consolidated Affiliate


In
August 2001, the Company invested $1,060,000 in Tanisys Technology, Inc.
(Tanisys). For accounting purposes, the Company consolidates Tanisys
into the financial statements of the Company under the purchase method of
accounting. As the Company is consolidating Tanisys on a three-month lag (due to
the difference in fiscal year ends of the Company and Tanisys), Tanisys
balance sheets as of June 30, 2002 and September 30, 2001, including adjustments
made under the purchase method of accounting, have been consolidated with the
Companys balance sheets as of September 30, 2002 and December 31, 2001,
respectively. Tanisys balance sheets consolidated herein are as follows
(in thousands):
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                               | June 30,2002 |       | September 30,2001
|-------------------------------------------------------------- | ------------ | ----- | -----------------
|Cash
      and cash equivalents                                | $            | 24    |                  
|Accounts
      receivable, net                                 |              | 959   |                  
|Inventory:                                                    
|Raw
      materials                                            |              | 318   |                  
|Work
      in process                                          |              | 46    |                  
|Finished
      goods                                           |              | 121   |                  
|                                                               |              |       |                  
|Total
      inventory                                          |              | 485   |                  
|Prepaid
      and other assets                                 |              | 59    |                  
|                                                               |              |       |                  
|Total
      current assets                                     |              | 1,527 |                  
|Property
      and equipment, net                              |              | 250   |                  
|Other
      assets, net                                        |              | 132   |                  
|                                                               |              |       |                  
|Total
      assets                                             | $            | 1,909 |                  
|                                                               |              |       |                  
|Accounts
      payable                                         | $            | 631   |                  
|Accrued
      liabilities                                      |              | 640   |                  
|Revolving
      credit note                                    |              | 262   |                  
|                                                               |              |       |                  
|Total
      current liabilities                                |              | 1,533 |                  
|Other
      liabilities                                        |              | 36    |                  
|Long-term
      debt to minority stockholders, net of discount
|and
      minority interest in consolidated affiliate          |              | 265   |                  
|                                                               |              |       |                  
|Total
      liabilities                                        | $            | 1,834 |                  
|                                                               |              |       |                  
|Minority
      interest in consolidated affiliate              | $            |      |                  
|Accumulated
      deficit                                      | $            | (985  | )                

|
|

|7
|-

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)


Tanisys
statements of operations for the quarter and nine months ended June 30, 2002,
including adjustments made under the purchase method of accounting, have been
consolidated with the Companys statements of operations for the quarter
and nine months ended September 30, 2002, respectively. Tanisys statements
of operations consolidated herein are as follows (in thousands):
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                    | Quarter
      ended
      June 30,
      2002 |      | Nine Months
      ended
      June 30,
      2002
| | -------------------------------------------------- | --------------------------------------------- | ---- | -------------------------------------------------
|
| | Operating
      revenues                           | $                                             | 889  |                                                  
| | Cost
      of revenues                             |                                               | 983  |                                                  
| |                                                    |                                               |      |                                                  
| | Gross (loss) profit                                |                                               | (94  | )                                                
| | Selling,
      general and administrative expenses |                                               | 381  |                                                  
| | Research
      and development expenses            |                                               | 285  |                                                  
| | Depreciation
      and amortization expenses       |                                               | 35   |                                                  
| |                                                    |                                               |      |                                                  
| | Operating
      loss from continuing operations    |                                               | (795 | )                                                
| | Other
      income (expense):                     
| | Interest
      expense, net                        |                                               | (203 | )                                                
| | Other
      income, net                            |                                               | 35   |                                                  
| | Minority
      interest in consolidated affiliate  |                                               | 543  |                                                  
| |                                                    |                                               |      |                                                  
| | Total
      other income, net                      |                                               | 375  |                                                  
| |                                                    |                                               |      |                                                  
| | Net
      loss                                     | $                                             | (420 | )                                                
| |                                                    |                                               |      |                                                  
| |                                                    |                                               |      |                                                  
| | Net
      loss                                     | $                                             | (420 | )                                                
| | Preferred
      stock dividend                     |                                               | (63  | )                                                
| | Minority
      interest in consolidated affiliate  |                                               | 63   |                                                  
| |                                                    |                                               |      |                                                  
| | Net
      loss applicable to common stockholders   | $                                             | (420 | )                                                
| |                                                    |                                               |      |                                                  

|Revolving credit note


In
March 2002, Tanisys entered into a new Accounts Receivable Purchase Agreement
(Debt Agreement) with Silicon Valley Bank (Silicon),
replacing the former Accounts Receivable Financing Agreement, to fund accounts
receivable and provide working capital up to a maximum of $2.5 million. The
applicable interest rate is 1.5% per month of the average daily balance
outstanding during the month. As of June 30, 2002, Tanisys owed $262,000 under
the Debt Agreement.


Advances


During
the quarter ended September 30, 2002, the Company advanced $43,000 to Tanisys.
These advances are due to the Company under the terms of promissory notes
bearing interest at twelve percent (12%) and maturing during the quarter ending
December 31, 2002.


Inventory write-down


Due
to the decline in the semiconductor business cycle and the impact on revenues
since the end of 2000, and continued uncertainty of future sales volumes,
Tanisys continues to monitor its inventory levels in light of product
development changes and future sales forecasts. As a result, Tanisys recorded an
inventory write-down of $0.5 million during the quarter ended June 30, 2002
(included in cost of revenues), for excess and obsolete inventories. In the
future, Tanisys may be required to take additional charges for excess and
obsolete inventory if the industry downturn causes further reductions to the
current inventory valuations or changes the Companys current product
development plans.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8
|-

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)


Going Concern


Numerous
factors affect Tanisys operating results, including, but not limited to,
general economic conditions, competition, the uncertainty of the semiconductor
market and changing technologies. All of these factors have had an adverse
effect on Tanisys financial position, results of operations and cash
flows. Tanisys incurred operating losses of $2.0 million and $2.1 million for
the nine months ended June 30, 2002 and the year ended September 30, 2001,
respectively. At June 30, 2002, Tanisys had minimal cash resources. The current
economic slowdown continues in the worldwide semiconductor industry resulting in
concern over the sustainability of Tanisys revenues and its operations. No
assurances can be made that Tanisys will be able to continue its operations.


Note 4. Investments in Affiliates


Investments
in affiliates is comprised of the following (in thousands):
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                 | September
      30,
      2002 |         | December 31,
      2001
| | ----------------------------------------------- | ------------------------------ | ------- | -----------------------
|
| | Investment
      in Princeton:                  |                                |         |                        
| | Cash
      investments                          | $                              | 77,547  |                        
| | In-process
      research and development costs |                                | (4,465  | )                      
| | Amortization
      and equity loss pick-up      |                                | (59,117 | )                      
| | Impairment
      of investment                  |                                | (1,777  | )                      
| | Redemption
      of investment                  |                                | (1,471  | )                      
| | Other                                           |                                | (1,209  | )                      
| |                                                 |                                |         |                        
| | Net
      investment in Princeton               |                                | 9,508   |                        
| | Investment
      in Sharps Compliance Corp.:   
| | Cash
      investments                          |                                | 770     |                        
| | Other                                           |                                | 2       |                        
| |                                                 |                                |         |                        
| | Net
      investment in Sharps Compliance Corp. |                                | 772     |                        
| | Investment
      in Microbilt Corp.:           
| | Equity
      investments                        |                                | 348     |                        
| | Other                                           |                                | 6       |                        
| |                                                 |                                |         |                        
| | Net
      investment in Microbilt Corp.         |                                | 354     |                        
| |                                                 |                                |         |                        
| | Total
      investments in affiliates           | $                              | 10,634  |                        
| |                                                 |                                |         |                        

|Note 5. Impairment Loss


During
the quarter ended September 30, 2001, the Company evaluated the long-lived
assets of its wholly owned subsidiary FIData, Inc. (FIData) for
impairment in accordance with Statement of Financial Accounting Standards
(SFAS) No. 121, Accounting for the Impairment of Long-lived
Assets and for Long-lived Assets to be Disposed of. The Company compared
the net realizable value of the long-lived assets of FIData to the carrying
value of those assets to determine the impairment. The Company recorded a $4.7
million impairment expense, which consisted of $4.5 million related to goodwill
(carrying value prior to impairment was $4.5 million) and $0.2 million related
to capitalized software (carrying value prior to impairment was $0.6 million).
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9
|-

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)



Note 6. Comprehensive Loss


In
January 2001, the Company invested $15.0 million in a portfolio of fixed income
securities. The Company classified these investments as available-for-sale
securities in accordance with SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities. These available-for-sale
securities were measured at fair value, with unrealized holding gains (losses)
included as a component of other comprehensive loss, in accordance with SFAS No.
130, Reporting Comprehensive Income. During the quarter ended June
30, 2001, the Company sold $1.5 million of the investments and subsequently
reinvested the $1.5 million in the investments during the same quarter. During
the quarter ended September 30, 2001, the Company sold all of the investments in
fixed income securities due to changes in the market conditions of fixed income
securities.


During
the quarter ended September 30, 2001, the Company incurred a reclassification
adjustment for gains of $79,000 (included in net loss), net of income tax
expense of $47,000. Comprehensive loss equals net loss for the quarter and nine
months ended September 30, 2001.


Note 7. Investment in Unconsolidated
Affiliate


Summarized Financial Information


The
Company has made numerous  investments in Princeton since  September  1998. The Company
 accounts for its investment in Princeton  under the equity method of accounting (as the
Company does not exhibit  control over Princeton) and records the equity in net loss of
Princeton on a three-month  lag. The Company's  ownership  percentage  of the
 outstanding  stock of Princeton was 38.3% and 41.5% as of June 30, 2002 and September
30, 2001, respectively.


Princetons
summarized balance sheets as of June 30, 2002 and September 30, 2001, are as
follows (in thousands):
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                          | June 30,
      2002 |        | September
      30,
      2001
| | ---------------------------------------- | ------------------- | ------ | ------------------------------
|
| | Current
      assets                     | $                   | 29,668 |                               
| | Non-current
      assets                 |                     | 19,074 |                               
| | Current
      liabilities                |                     | 25,429 |                               
| | Non-current
      liabilities            |                     | 783    |                               
| | Mandatorily
      redeemable convertible
| | preferred
      stock                    |                     | 31,092 |                               

|10
|--

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)



Princetons
statements of operations for the quarters and nine months ended June 30, 2002 and
2001, have been used to calculate the equity in net loss recorded in the
Companys statements of operations for the quarters and nine months ended
September 30, 2002 and 2001, respectively. Princetons summarized
statements of operations, including earnings before interest, taxes,
depreciation and amortization (EBITDA), are as follows (in
thousands):
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                            | Quarter Ended
      June 30, |        | Nine Months
      Ended
      June 30,
| | -------------------------- | ---------------------------- | ------ | --------------------------------------
|
| | Total
      revenues       | $                            | 8,228  |                                       
| | Gross
      profit         |                              | 4,119  |                                       
| | Loss
      from operations |                              | (1,950 | )                                     
| | EBITDA                     |                              | (543   | )                                     
| | Net
      loss             |                              | (2,599 | )                                     

|For
the quarter ended June 30, 2002, EBITDA of $(0.5) million includes severance
charges totaling $0.2 million related to Princetons restructuring plan to
streamline its operations. For the nine months ended June 30, 2002, EBITDA of
$(21.0) million includes impairment charges totaling $11.7 million.
Approximately $8.5 million of the impairment charges relate to the
implementation of a strategic restructuring plan to streamline Princetons
operations by reducing operating expenses primarily through workforce reductions
and renegotiating significant contracts and leases. The primary components of
the restructuring charges include $5.2 million for employee separations and $3.2
million for contract settlements. The additional impairment charges relate to
the write-down of a portion of the asset value of Princetons property and
equipment. The impairment was recognized as the future undiscounted cash flows
for Princeton were estimated to be insufficient to recover the related carrying
values of the property and equipment.


Equity Financing


In
June 2002, Princeton completed an aggregate $31.0 million equity financing,
which commenced in November 2001. Princeton expects to use the funds for the
development of more advanced billing and payment technologies, products and
services, as well as for working capital purposes. As of September 30, 2002, the
Companys ownership of the outstanding and fully diluted shares
(considering all issued options and warrants) of Princeton was 38.2% and 35.2%,
respectively.


Acquisition of Quicken Bill Manager


In
May 2001, Princeton announced its acquisition of Quicken Bill Manager from
Intuit Inc. (Intuit). Quicken Bill Manager provides online bill
presentment and payment services by processing payments for customers utilizing
Intuits Quicken personal financial management software. Under the terms of
the acquisition agreement, Princeton acquired the assets of Intuits
Quicken Bill Manager through the purchase of certain technologies from Intuit
and all of the outstanding shares of Venture Finance Services Corp., a wholly
owned subsidiary of Intuit.


The
pro forma adjustments to the Companys financial statements relate to the
additional equity in net loss of affiliates the Company would have recorded had
Princeton acquired Quicken Bill Manager at the beginning of the period
presented. The following pro forma financial information for the Company is
provided for the nine months ended September 30, 2001, based upon the assumption
that Princeton had acquired Quicken Bill Manager as of October 1, 1999.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11
|--

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)


For
the nine months ended September 30, 2001, the Company recorded equity in net
loss of affiliates of $15.2 million, loss from continuing operations before
income tax benefit of $23.3 million, net loss from continuing operations of
$22.7 million and net loss of $21.2 million. The basic and diluted net loss from
continuing operations per share and net loss per share were $0.64 and $0.60,
respectively. Had the transaction occurred on October 1, 1999, the Company would
have recorded an additional equity in net loss of affiliates of $4.1 million.
Including the pro forma adjustment, the Company would have recorded total equity
in net loss of affiliates of $19.3 million, loss from operations before income
tax benefit of $27.4 million, net loss from continuing operations of $26.8
million and net loss of $25.3 million. The basic and diluted net loss from
continuing operations per share and net loss per share would have been $0.75 and
$0.71, respectively.


During
the quarter ended March 31, 2002, Princeton suspended its development of the
Quicken Bill Manager as a result of an overall corporate shift in focus and an
effort to reduce expenditures. Princeton continues to retain front-end
technology acquired from Intuit, but is currently placing greater emphasis on
its core transaction processing businesses.


Note 8. Discontinued Operations


In
June 2002, the Company filed its federal income tax return with the Internal
Revenue Service for the tax fiscal year ended September 30, 2001 (which includes
the Transaction completed in October 2000, as discussed in Note 1). The Company
received a refund claim totaling $2.2 million in July 2002. The income tax
refund is reflected as net income from disposal of discontinued operations
during the nine months ended September 30, 2002, as the refund relates to those
companies sold in the Transaction.


The
Company continually reviews the accruals related to discontinued operations to
assess the adequacy of the accruals. During the nine months ended September 30,
2001, the Company reduced such accruals and recognized income from the disposal
of discontinued operations of $1.5 million, based upon estimates of future
liabilities related to the divested entities. The $1.5 million is reflected as
net income from disposal of discontinued operations during the nine months ended
September 30, 2001.


Note 9. Commitments and
Contingencies


During
the year ended September 30, 1999, the Company entered into an agreement to
guarantee the terms of Princetons lease for office space at 650 College
Road, Princeton, New Jersey. This guarantee terminates should Princeton raise
$25.0 million of capital through an initial public offering. The landlord of the
office space has agreed, subject to lender approval, to replace the
Companys guarantee with an alternative security. Although no assurances
can be made, it is Princetons intention to provide sufficient security in
order to eliminate the need for the Companys guarantee. The Company does
not believe it is probable that the lease guarantee will be exercised.


Note 10. Related Party Transactions


In
April 2000, the Companys Board of Directors approved a restricted stock
grant to the Companys CEO. The restricted stock grant consists of
Princeton stock, equal to 2% of Princetons fully diluted shares. The
restricted stock grant vests on April 30, 2003. The Company expenses the fair
market value of the restricted stock grant over the three-year period ending
April 30, 2003. The Company recognized $150,000 and $150,000 during the quarters
ended September 30, 2002 and 2001, respectively, and $450,000 and $450,000
during the nine months ended September 30, 2002 and 2001, respectively, as
compensation expense related to the stock grant. The Company estimates it will
recognize $600,000 as compensation expense related to the stock grant during the
year ending December 31, 2002.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12
|--

|NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)



The
Companys CEO served as Chairman of the Board of Tanisys at the time of the
Companys investment in Tanisys and until his resignation in February 2002.
Upon his resignation as Chairman of the Board of Tanisys, a member of the
Companys Board became Tanisys Chairman of the Board and CEO. This
Board member is entitled to receive approximately $15,000 per month from Tanisys
as compensation for such services. As of September 30, 2002, Habitek
International, Inc. (a company owned by this Board member) has received payments
totaling $42,000 of the total $105,000 of costs incurred. The Company also
appointed the Companys CFO and another one of its Board members to
the Board of Tanisys. As such, three of the four members of the Board of Tanisys
are officers or directors of the Company.


The
Companys CEO serves as a member of the Board of Princeton. The
Companys CFO served as a member of the Board of Princeton from August 2001
until June 2002.


The
Companys CEO and one of its Board members serve on the Board of
Sharps Compliance Corp. (Sharps) and did so at the time the Company
invested in Sharps. The Companys CFO serves as an advisor to the Board of
Sharps.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13
|--

|Item 2.


This
Quarterly Report on Form 10-Q contains certain forward-looking
statements as such term is defined in the Private Securities Litigation Reform
Act of 1995 and information relating to the Company and its subsidiaries that
are based on the beliefs of the Companys management as well as assumptions
made by and information currently available to the Companys management.
When used in this report, the words anticipate, believe,
estimate, expect and intend and words or
phrases of similar import, as they relate to the Company or its subsidiaries or
Company management, are intended to identify forward-looking statements. Such
statements reflect the current risks, uncertainties and assumptions related to
certain factors including, without limitation, competitive factors, general
economic conditions, customer relations, relationships with vendors, the
interest rate environment, governmental regulation and supervision, seasonality,
distribution networks, products introductions and acceptance, technological
change, changes in industry practices, onetime events and other factors
described herein and in other filings made by the Company with the Securities
and Exchange Commission. Based upon changing conditions, should any one or more
of these risks or uncertainties materialize, or should any underlying
assumptions prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated, expected or intended. The
Company does not intend to update these forward-looking statements.





MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


General


The
following is a discussion of the interim condensed consolidated financial
condition and results of operations for New Century Equity Holdings Corp. and
subsidiaries (collectively, the Company), for the quarter and nine
months ended September 30, 2002. It should be read in conjunction with the
unaudited Interim Condensed Consolidated Financial Statements of the Company,
the notes thereto and other financial information included elsewhere in this
report, and the Companys Annual Report on Form 10-K for the year ended
December 31, 2001. For purposes of the following discussion, references to year
periods refer to the Companys fiscal year ended December 31 and references
to quarterly periods refer to the Companys fiscal quarter ended September
30.


Results of Operations


Continuing Operations


For
the quarter and nine months ended September 30, 2002, revenues are generated by
the Companys consolidated affiliate Tanisys Technology, Inc.
(Tanisys) and are comprised of sales of production-level equipment
along with related hardware and software, less returns and discounts. For the
quarter and nine months ended September 30, 2001, revenues were generated by the
Companys former subsidiary FIData, Inc. (FIData) and were
comprised of transaction fees for processing loan applications, implementation
fees for new customers and a variety of customer service related fees.


Cost
of revenues for the quarter and nine months ended September 30, 2002, are
generated by Tanisys and are comprised of the costs of all components and
materials purchased for the manufacture of products, direct labor and related
overhead costs. Cost of revenues for 2002 includes a $0.5 million inventory
write-down for excess and obsolete inventories of Tanisys, due to the decline in
the semiconductor industry and the uncertainty of future sales volumes. Cost of
revenues for the quarter and nine months ended September 30, 2001, were
generated by FIData and consisted of the costs incurred to offer a variety of
customer service opportunities to its customers.


Selling,
general and administrative (SG&A) expenses are comprised of all
selling, marketing and administrative costs incurred in direct support of the
business operations of the Company. SG&A expenses for the quarter ended
September 30, 2002, were $1.1 million ($0.7 million for corporate expenses and
$0.4 million for Tanisys expenses), compared to $2.3 million for the
quarter ended September 30, 2001 ($1.0 million for corporate expenses and $1.3
million for FIDatas expenses). For the quarter ended September 30, 2002,
the cash portion of the corporate expenses was $0.5 million of the total
corporate expenses of $0.7 million. SG&A expenses for the nine months ended
September 30, 2002, were $3.8 million ($2.6 million for corporate expenses and
$1.2 million for Tanisys expenses), compared to $6.8 million for the nine
months ended September 30, 2001 ($2.9 million for corporate expenses and $3.9
million for FIDatas expenses). For the nine months ended September 30,
2002, the cash portion of the corporate expenses was $2.0 million of the total
corporate expenses of $2.6 million.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14
|--

|Research
and development (R&D) expenses, generated entirely by
Tanisys operations, consist of all costs associated with the engineering
design and testing of new technologies and products. These costs reflect the
ongoing development of test systems for both Double Data Rate (DDR)
and Flash memory technologies, as well as a new distributed networking
architecture that can be applied to all memory technologies.


Net
other income totaled $0.2 million during the quarter ended September 30, 2002,
compared to net other expense of $4.5 million during the quarter ended September
30, 2001. Net other income for the quarter ended September 30, 2002, primarily
included (i) the equity in net loss of Princeton of $1.2 million, (ii)
consulting income from Platinum of $0.9 million and (iii) the minority interest
of $0.5 million related to Tanisys. Net other expense for the quarter ended
September 30, 2001, primarily included (i) the equity in net loss of Princeton
of $7.0 million, (ii) consulting income from Platinum of $0.9 million and (iii)
the realized gains from the sales of the available-for-sale securities of $0.6
million.


Discontinued Operations


In
June 2002, the Company filed its federal income tax return with the Internal
Revenue Service for the tax fiscal year ended September 30, 2001. The Company
received a refund claim totaling $2.2 million in July 2002. The income tax
refund is reflected as net income from disposal of discontinued operations
during the nine months ended September 30, 2002, as the refund relates to those
companies sold in the Transaction.


The
Company continually reviews the accruals related to discontinued operations to
assess the adequacy of the accruals. During the nine months ended September 30,
2001, the Company reduced such accruals and recognized income from the disposal
of discontinued operations of $1.5 million, based upon estimates of future
liabilities related to the divested entities. The $1.5 million is reflected as
net income from disposal of discontinued operations in the nine months ended
September 30, 2001.


Princeton


Princetons
revenues increased to $8.2 million during the quarter ended June 30, 2002, from
$5.3 million during the quarter ended June 30, 2001. Revenues for the nine
months ended June 30, 2002, increased to $20.4 million from $14.3 million during
the nine months ended June 30, 2001. The increases in revenue are due to the
increase in Princetons customer base coupled with an increase in adoption
rates experienced in the electronic bill presentment and payment industry.
Princetons net loss of $2.6 million for the quarter ended June 30, 2002
decreased from the $12.2 million net loss for the quarter ended June 30, 2001.
The decrease in the net loss is the result of the increase in revenues generated
as well as the reductions made to operating expenses during 2002.
Princetons net loss of $29.2 million for the nine months ended June 30,
2002, decreased from the $32.7 million net loss for the nine months ended June
30, 2001. The net loss for the nine months ended June 30, 2002, included
impairment charges totaling $11.7 million, related to the impairment of property
and equipment, employee separations and contract settlements.


Liquidity and Capital Resources


The
Companys cash balance increased to $9.2 million at September 30, 2002,
from $8.6 million at December 31, 2001. This increase is primarily related to
the $2.2 million income tax refund and the $1.5 million redemption of the
Companys investment in Princeton, offset by the $3.9 million invested in
Princeton. The Companys working capital position decreased to $8.7 million
at September 30, 2002, from $9.5 million at December 31, 2001. The decrease in
the working capital was primarily attributable to the decrease in the inventory
balance. Net cash provided by operating activities for the nine months ended
September 30, 2002, was $2.7 million, compared to net cash used in operating
activities of $3.3 million for the nine months ended September 30, 2001.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15
|--

|Capital
expenditures totaled $6,000 during the nine months ended September 30, 2002. The
Company anticipates minimal capital expenditures before acquisitions, if any,
during the quarter ending December 31, 2002. The Company believes it will be
able to fund future expenditures with cash on hand.


Princeton


During
the year ended September 30, 1999, the Company entered into an agreement to
guarantee the terms of Princetons lease for office space at 650 College
Road, Princeton, New Jersey. This guarantee terminates should Princeton raise
$25.0 million of capital through an initial public offering. The landlord of the
office space has agreed, subject to lender approval, to replace the
Companys guarantee with an alternative security. Although no assurances
can be made, it is Princetons intention to provide sufficient security in
order to eliminate the need for the Companys guarantee. The Company does
not believe it is probable that the lease guarantee will be exercised.


Tanisys


In
March 2002, Tanisys entered into a new Accounts Receivable Purchase Agreement
(Debt Agreement) with Silicon Valley Bank (Silicon),
replacing the former Accounts Receivable Financing Agreement, to fund accounts
receivable and provide working capital up to a maximum of $2.5 million. The
applicable interest rate is 1.5% per month of the average daily balance
outstanding during the month. As of June 30, 2002, Tanisys owed $262,000 under
the Debt Agreement.


Numerous
factors affect Tanisys operating results, including, but not limited to,
general economic conditions, competition, the uncertainty of the semiconductor
market and changing technologies. All of these factors have had an adverse
effect on Tanisys financial position, results of operations and cash
flows. Tanisys incurred operating losses of $2.0 million and $2.1 million for
the nine months ended June 30, 2002 and the year ended September 30, 2001,
respectively. At June 30, 2002, Tanisys had minimal cash resources. The current
economic slowdown continues in the worldwide semiconductor industry resulting in
concern over the sustainability of Tanisys revenues and its operations. No
assurances can be made that Tanisys will be able to continue its operations.





Item 3. Quantitative and
Qualitative Disclosure about Market Risk


The
Company is exposed to interest rate risk primarily through its portfolio of cash
equivalents and short-term marketable securities. The Company does not believe
that it has significant exposure to market risks associated with changing
interest rates as of September 30, 2002, because the Companys intention is
to maintain a liquid portfolio to take advantage of investment opportunities.
The Company does not use derivative financial instruments in its operations.





Item 4. Controls and Procedures


Within
the ninety days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the
Companys management, including the Companys Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the Companys disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Companys disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in the Companys periodic SEC filings.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16
|--

|PART II OTHER INFORMATION





Item 1. Legal Proceedings


The
Company is not currently involved in any material litigation, claims or
assessments.







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

| |  | (a) |  | Exhibits:
| |  | --- |  | ---------

| | Not
applicable
| | --------------

| |  | (b) |  | Current
Reports on Form 8-K:
| |  | --- |  | ----------------------------

| | Form
 8-K, dated August 15, 2002, filed August 16, 2002, announcing the receipt from The
Nasdaq Stock Market, Inc. of a 180-day extension to regain compliance with the listing
requirements.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Items 2, 3, 4 and 5 are not
applicable and have been omitted.
|-------------------------------------------------------------

|17
|--

|SIGNATURE


Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | NEW
CENTURY EQUITY HOLDINGS CORP.          (Registrant)
| |  | -------------------------------------------------------

|Date:
October 28, 2002 |  | By:                         /s/ DAVID P. TUSA
|---------------------- |  | ---------------------------------------------

| |  | David P. TusaExecutive Vice President, Chief Financial Officer and Corporate Secretary (Duly authorized
and principal financial officer)
| |  | ----------------------------------------------------------------------------------------------------------------------------------------

|18
|--

|CERTIFICATION


I, Parris H. Holmes, Jr.,
certify that:
|-------------------------------------------------------

|1. |  | I
have reviewed this quarterly report on Form 10-Q of New Century Equity Holdings Corp.;
|-- |  | ----------------------------------------------------------------------------------------

|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Based on my
knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) |  | designed
such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b) |  | evaluated
the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and
| |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | c) |  | presented
in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | The
registrants other certifying officers and I have disclosed, based on           our
most recent evaluation, to the registrants auditors and the audit
          committee of registrants board of directors (or persons performing the
          equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) |  | all
significant deficiencies in the design or operation of internal controls which
could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b) |  | any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal controls; and
| |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

|6. |  | The
registrants other certifying officers and I have indicated in this
          quarterly report whether or not there were significant changes in internal
          controls or in other factors that could significantly affect internal controls
          subsequent to the date of our most recent evaluation, including any corrective
          actions with regard to significant deficiencies and material weaknesses.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date:
October 28, 2002 |  | /s/ PARRIS H. HOLMES JR.
|---------------------- |  | ------------------------

| |  | Parris H. Holmes, Jr. Chairman of the Board and  Chief Executive Officer
| |  | ------------------------------------------------------------------------

|19
|--

|CERTIFICATION


I, David P. Tusa, certify
that:
|-----------------------------------------------

|1. |  | I
have reviewed this quarterly report on Form 10-Q of New Century Equity           Holdings
Corp.;
|-- |  | --------------------------------------------------------------------------------------------------

|2. |  | Based
on my knowledge, this quarterly report does not contain any untrue           statement of
a material fact or omit to state a material fact necessary to make           the
statements made, in light of the circumstances under which such statements           were
made, not misleading with respect to the period covered by this quarterly
          report;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Based
on my knowledge, the financial statements, and other financial information
          included in this quarterly report, fairly present in all material respects the
          financial condition, results of operations and cash flows of the registrant as
          of, and for, the periods presented in this quarterly report;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | The
registrants other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as defined in
          Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) |  | designed
such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this quarterly report is being prepared;
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b) |  | evaluated
the effectiveness of the registrants disclosure controls and procedures as
of a date within 90 days prior to the filing date of this quarterly report (the
Evaluation Date); and
| |  | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | c) |  | presented
in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| |  | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | The
registrants other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | a) |  | all
significant deficiencies in the design or operation of internal controls which
could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b) |  | any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal controls; and
| |  | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

|6. |  | The
registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date:
October 28, 2002 |  | /s/ DAVID P. TUSA
|---------------------- |  | -----------------

| |  | David P. Tusa  Executive Vice President  Chief Financial Officer and  Corporate Secretary
| |  | -----------------------------------------------------------------------------------------

|20
|--