|UNITED STATESSECURITIES
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 March 31, 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 ofincorporation 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 May 13, 2002:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Title of ClassCommon Stock, $0.01 par value | Number of
SharesOutstanding34,217,620
|------------------------------------------- | -------------------------------------

|This
filing includes unreviewed financial statements in lieu of reviewed financial
statements as the registrant elected not to have Arthur Andersen LLP review the
interim condensed consolidated financial statements.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 - March 31, 2002 and December 31, 2001 | 3
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- | -

| |  | Condensed Consolidated
Statements of Operations - For the Quarters Ended     March 31, 2002 and
2001 | 4
| |  | ---------------------------------------------------------------------------------------------------- | -

| |  | Condensed Consolidated
Statements of Cash Flows - For the Quarters Ended     March 31, 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 | 13
|------- |  | ------------------------------------------------------------------------------------------ | --

|Item 3. |  | Quantitative and Qualitative Disclosure about Market
Risk | 15
|------- |  | --------------------------------------------------------- | --

PART II OTHER INFORMATION

|Item 1. |  | Legal
Proceedings | 16
|------- |  | ----------------- | --

|Item 6. |  | Exhibits and Reports on Form
8-K | 16
|------- |  | -------------------------------- | --

|SIGNATURE |  |  | 17
|--------- |  |  | --

|On
May 13, 2002, New Century Equity Holdings Corp. (the Company)
terminated its relationship with Arthur Andersen as its independent public
accountants. In accordance with Temporary Note 2T to Article 3 of Regulation
S-X, the Company elected not to have Arthur Andersen LLP review the accompanying
interim condensed consolidated financial statements and notes thereto
(collectively, the Financial Statements). No auditor has reviewed
nor reported that the Financial Statements present fairly, in all material
respects, the financial position, results of operations and cash flows of the
Company as of and for the quarter ended March 31, 2002, in accordance with
accounting principles generally accepted in the United States.


The
Company has not yet engaged a new independent public accounting firm to act as
the Companys auditors, but anticipates an engagement no later than June
30, 2002. Upon the engagement of a new independent public accounting firm, the
Financial Statements will be reviewed by the new independent accounting firm.
Upon completion of the review, if there is a change to the Financial Statements,
the Company will amend this quarterly report to present the reviewed interim
condensed consolidated financial statements and notes thereto and a discussion
of any material changes from the Financial Statements and any other section of
this quarterly report. If, upon completion of the review, there is not a change
to the Financial Statements, the Company will disclose that there are no
material changes as a result of the review prior to the submission of the
quarterly report for the quarter ended June 30, 2002.



2
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART I
FINANCIAL INFORMATION


Item 1.
Interim Condensed Consolidated Financial Statements


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

|                                                                | March 31,2002 | December 31,2001
|--------------------------------------------------------------- | ------------- | ----------------
|
|ASSETS                                                          |               |                 
|Current assets:                                                 |              
|Cash and cash equivalents                                       |               | $   6,326       
|Accounts receivable, net                                        |               | 965             
|Inventory                                                       |               | 919             
|Executive deferred compensation assets                          |               | 646             
|Prepaid and other assets                                        |               | 457             
|                                                                |               |                 
|Total current assets                                            |               | 9,313           
|Property and equipment, net                                     |               | 698             
|Executive deferred compensation assets                          |               |                
|Other assets, net                                               |               | 196             
|Investments in and advances to affiliates                       |               | 14,667          
|                                                                |               |                 
|Total assets                                                    |               | $ 24,874        
|                                                                |               |                 
|LIABILITIES AND STOCKHOLDERS EQUITY                            |              
|Current liabilities:                                            |              
|Accounts payable                                                |               | $      420      
|Accrued liabilities                                             |               | 1,240           
|Revolving credit note                                           |               |                
|Executive deferred compensation liabilities                     |               | 742             
|Net current liabilities from discontinued operations            |               | 148             
|                                                                |               |                 
|Total current liabilities                                       |               | 2,550           
|Executive deferred compensation liabilities                     |               |                
|Other liabilities                                               |               | 64              
|Long-term debt to minority stockholders, net of discount        |               | 401             
|                                                                |               |                 
|Total liabilities                                               |               | 3,015           
|Commitments and contingencies (see Note 7)                      |              
|Minority interest in consolidated affiliate (see Note 3)        |               | 709             
|Stockholders equity:                                           |              
|Preferred stock, $0.01 par value, 10,000,000 shares authorized; |              
|no shares issued or outstanding at March 31 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      |              
|March 31 and December 31, respectively                          |               | 342             
|Additional paid-in capital                                      |               | 70,346          
|Retained deficit                                                |               | (49,538         
|                                                                |               |                 
|Total stockholders equity                                      |               | 21,150          
|                                                                |               |                 
|Total liabilities and stockholders equity                      |               | $ 24,874        
|                                                                |               |                 

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


3
|-------------------------------------------------------------------------------------------------------------

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

|                                                                     | Quarter EndedMarch 31,
|-------------------------------------------------------------------- | ----------------------
|
|Operating revenues                                                   |                       
|Cost of revenues                                                     |                       
|                                                                     |                       
|Gross profit (loss)                                                  |                       
|                                                                     |                       
|Selling, general and administrative expenses                         |                       
|Research and development expenses                                    |                       
|Depreciation and amortization expenses                               |                       
|                                                                     |                       
|Operating loss from continuing operations                            |                       
|                                                                     |                       
|Other income (expense):                                              |                       
|Interest (expense) income, net                                       |                       
|Equity in net loss of affiliates                                     |                       
|Consulting income                                                    |                       
|Other income, net                                                    |                       
|Minority interest in consolidated affiliate                          |                       
|                                                                     |                       
|Total other expense, net                                             |                       
|                                                                     |                       
|                                                                     |                       
|Loss from continuing operations before income tax benefit            |                       
|Income tax benefit                                                   |                       
|                                                                     |                       
|Net loss from continuing operations                                  |                       
|                                                                     |                       
|Discontinued operations:                                             |                       
|Net income from disposal of discontinued operations                  |                       
|                                                                     |                       
|Net loss                                                             |                       
|                                                                     |                       
|                                                                     |                       
|Basic and diluted:                                                   |                       
|Net loss from continuing operations per common share                 |                       
|Net income from disposal of discontinued operations per common share |                       
|                                                                     |                       
|Net loss per common share                                            |                       
|                                                                     |                       
|                                                                     |                       
|Weighted average common shares outstanding                           |                       
|                                                                     |                       

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


4
|-------------------------------------------------------------------------------------------------------------

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

|                                                                         | Quarter EndedMarch 31,
|------------------------------------------------------------------------ | ----------------------
|
|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                                   |                       
|Equity in net loss of affiliates                                         |                       
|Amortization of discount on long-term debt to minority stockholders      |                       
|Changes in operating assets and liabilities:                             |                       
|Decrease in accounts receivable                                          |                       
|Decrease in inventory                                                    |                       
|Increase in prepaid and other assets                                     |                       
|(Decrease) increase in accounts payable                                  |                       
|Increase (decrease) in accrued liabilities                               |                       
|Increase (decrease) in other liabilities and other noncash items         |                       
|                                                                         |                       
|Net cash provided by (used in) continuing operating activities           |                       
|                                                                         |                       
|Net cash 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                             |                       
|Investments in and advances to 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                                              |                       
|Repayments on revolving credit note                                      |                       
|Minority interest in consolidated affiliate                              |                       
|                                                                         |                       
|Net cash used in financing activities                                    |                       
|                                                                         |                       
|                                                                         |                       
|Net decrease in cash and cash equivalents                                |                       
|                                                                         |                       
|Cash and cash equivalents, beginning of period                           |                       
|                                                                         |                       
|                                                                         |                       
|Cash and cash equivalents, end of period                                 |                       
|                                                                         |                       

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


5
|-------------------------------------------------------------------------------------------------------------

|NEW CENTURY
EQUITY HOLDINGS CORP. AND SUBSIDIARIESNOTES TO
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



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. Certain prior period amounts have been reclassified for comparative
purposes.


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 Equity Holdings (Platinum) of Los Angeles, California
(the Transaction). At this time, management does not believe it is probable
that the portion of the royalty related to the LEC Billing division of $10.0 million will
be earned. Management cannot assess the probability of the divested Aptis and OSC
divisions achieving the revenue targets necessary to generate the remaining $10.0 million
in royalty payments to the Company.


In
addition, the Company will 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 payments of $5.3 million for
consulting services through March 31, 2002, which are included 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 an aggregate $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. Subsequent to this investment, the
Companys ownership percentage of the outstanding and fully diluted shares of
Princeton was approximately 57.5% and 49.5%, respectively.


In
April 2002, the Company committed to finance $3.75 million, of an aggregate $8.5
million equity commitment, to Princeton during the year ended December 31, 2002.
Through 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. Assuming the completion of the above noted $8.5
million equity financing, the Companys ownership of the outstanding and
fully diluted shares of Princeton will be approximately 55.5% and 51.6%,
respectively.


6
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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


Note 3.
Consolidated Financial Statements 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 years of the Company
and Tanisys), Tanisys balance sheets as of December 31, 2001 and September 30, 2001,
including adjustments made under the purchase method of accounting, have been
consolidated with the Companys balance sheets as of March 31, 2002 and December 31,
2001, respectively. Tanisys balance sheets consolidated herein are as follows (in
thousands):
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | December 31,2001                                         | September 30,2001
| | -------------------------------------------------------- | -----------------
| | Cash and cash equivalents                                |                  
| | Accounts receivable, net                                 |                  
| | Inventory:                                               |                  
| | Raw materials                                            |                  
| | Work in process                                          |                  
| | Finished goods                                           |                  
| |                                                          |                  
| | Total inventory                                          |                  
| | Prepaid and other assets                                 |                  
| |                                                          |                  
| | Total current assets                                     |                  
| | Property and equipment, net                              |                  
| | Other assets, net                                        |                  
| |                                                          |                  
| | Total assets                                             |                  
| |                                                          |                  
| | Accounts payable                                         |                  
| | Accrued liabilities                                      |                  
| | Revolving credit note                                    |                  
| |                                                          |                  
| | Total current liabilities                                |                  
| | Other liabilities                                        |                  
| | Long-term debt to minority stockholders, net of discount |                  
| |                                                          |                  
| | Total liabilities                                        |                  
| |                                                          |                  
| | Minority interest in consolidated affiliate              |                  
| | Retained deficit                                         |                  

|7
|-

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



Tanisys
statement of operations for the quarter ended December 31, 2001, including
adjustments made under the purchase method of accounting, has been
consolidated with the Companys statement of operations for the quarter
ended March 31, 2002. Tanisys statement of operations consolidated herein
is as follows (in thousands):
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Quarter endedDecember 31,2001               
| | --------------------------------------------
| | Operating revenues                          
| | Cost of revenues                            
| |                                             
| | Gross profit                                
| | Selling, general and administrative expenses
| | Research and development expenses           
| | Depreciation and amortization expenses      
| |                                             
| | Operating loss from continuing operations   
| | Other income (expense):                     
| | Interest expense, net                       
| | Other expense, net                          
| | Minority interest in consolidated affiliate 
| |                                             
| | Total other income, net                     
| |                                             
| | Net loss                                    
| |                                             
| | Net loss                                    
| | Preferred stock dividend                    
| | Minority interest in consolidated affiliate 
| |                                             
| | Net loss applicable to common stockholders  
| |                                             

|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 March 31, 2002, Tanisys owed nothing under
the Debt Agreement.


No Assurance of Operating Results
and Ability to Raise Capital


Numerous
factors could affect Tanisys operating results, including, but not limited
to, general economic conditions, competition, the uncertainty of the
semiconductor market and changing technologies. Any of these factors could have
an adverse effect on Tanisys financial position, results of operations or
cash flows. Tanisys incurred operating losses of $0.5 million and $2.1 million
for the quarter ended December 31, 2001 and the year ended September 30, 2001,
respectively. Tanisys cash position was $0.5 million and $1.4 million at
December 31, 2001 and September 30, 2001, respectively. Tanisys raised
additional capital in August 2001 in order to continue its operations. The
current economic slowdown continues in the worldwide semiconductor industry
resulting in concern over the sustainability of Tanisys revenues and its
ability to attract additional capital. No assurances can be made that additional
capital may be obtained.



8
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



Note 4.
Investments in and Advances to Affiliates


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

| | March 31,2002                                   | December 31,2001
| | ----------------------------------------------- | ----------------
| | Investment in Princeton:                        |                 
| | Cash investments                                |                 
| | In-process research and development costs       |                 
| | Amortization and equity loss pick-up            |                 
| | Impairment of investment in Princeton           |                 
| | Other                                           |                 
| |                                                 |                 
| | Net investment in Princeton                     |                 
| |                                                 |                 
| | Investment in Sharps Compliance Corp.:          |                 
| | Cash investments                                |                 
| | Other                                           |                 
| |                                                 |                 
| | Net investment in Sharps Compliance Corp.       |                 
| |                                                 |                 
| | Investment in Microbilt Corp.:                  |                 
| | Equity investments                              |                 
| | Other                                           |                 
| |                                                 |                 
| | Net investment in Microbilt Corp.               |                 
| |                                                 |                 
| |                                                 |                 
| | Total investments in and advances to affiliates |                 
| |                                                 |                 

|Note 5.
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 Statement of Financial Accounting Standards
(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. For the quarter ended March 31, 2001, the Company
incurred unrealized gains on the investments in available-for-sale securities of
$123,000, net of income tax expense of $72,000, for a total comprehensive loss
of $1,844,000. These investments in fixed income securities were sold in
September 2001 due to changes in the market conditions of fixed income
securities.



9
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



Note 6.
Summarized Financial Information for Unconsolidated Subsidiary


Summarized Financial Information


The
Company accounts for its investment in Princeton under the equity method of accounting.
The Companys ownership percentage of the outstanding stock of Princeton was 57.4%
and 41.5% as of December 31, 2001 and September 30, 2001, respectively. As the Company
records the equity in net loss of Princeton on a three-month lag, the summarized
financial information for Princeton as of December 31, 2001 is as follows (in thousands):
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | December 31,2001                   | September 30,2001
| | ---------------------------------- | -----------------
| | Current assets                     |                  
| | Non-current assets                 |                  
| | Current liabilities                |                  
| | Non-current liabilities            |                  
| | Mandatorily redeemable convertible |                  
| | preferred stock                    |                  

| | Quarters EndedDecember 31,
| | --------------------------
|
| | Total revenues            
| | Gross profit              
| | Loss from operations      
| | Net loss                  

|The
loss from operations of $20.9 million for the quarter ended December 31, 2001,
includes impairment charges totaling $10.6 million. Approximately $7.8 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 components of the restructuring charges
include $4.1 million for employee separations, $3.3 million for contract
settlements and $0.4 million for facility closings. 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.


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 quarter ended March 31, 2001, based upon the assumption that Princeton had
acquired Quicken Bill Manager as of October 1, 1999.


10
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



For
the quarter ended March 31, 2001, the Company recorded
equity in net loss of affiliates of $2.4 million, loss from
continuing operations before income tax benefit of $3.8
million, net loss from continuing operations of $3.5 million and net
loss of $2.0 million. The basic and diluted net loss from
continuing operations per share and net loss per share were
$0.10 and $0.06, respectively. Had the transaction
occurred on October 1, 1999, the Company would have recorded an additional
equity in net loss of affiliates of $2.9 million. Including the pro
forma adjustment, the Company would have recorded total equity in net loss of
affiliates of $5.3 million, loss from operations before income tax benefit of
$6.7 million, net loss from continuing operations of $6.4
million and net loss of $4.9 million. The basic and diluted
net loss from continuing operations per share and net loss per share
would have been $0.18 and $0.14, 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 the front-end
technology acquired from Intuit, but is currently placing greater emphasis on
its core transaction processing businesses.


No Assurance of Operating Results


Since
its inception, Princeton has incurred significant costs to develop and enhance
its technology, to establish marketing and customer relationships and to build
its capital infrastructure and administrative organization. As a result,
Princeton has historically incurred significant operating losses and expects to
generate an operating loss for the year ended December 31, 2002. During the
quarter ended March 31, 2002, Princeton received proceeds of $2.5 million from
the sale of its mandatorily redeemable convertible preferred stock (of which the
Company contributed $1.5 million (see
Note 2)). Additionally, in April 2002,
Princeton secured an unconditional commitment from four investors to purchase
$8.5 million of mandatorily redeemable convertible preferred stock during the
year ended December 31, 2002 (of which the Company committed $3.75 million (see Note
2)).
Through May 2002, Princeton has received $5.3 million of the aggregate
$8.5 million commitment (of which the Company contributed $2.4 million).
Princeton believes that its current cash and cash equivalents coupled with
the additional capital available under the investor commitment will be
sufficient to fund its operations and execute its strategy through March 2003.
To the extent that Princeton does not meet its targeted financial goals for
2002, Princetons business, financial position, results of operations or
cash flows may be materially and adversely affected.


Note 7.
Commitments and Contingencies


The
Company is involved in various other claims, legal action and regulatory
proceedings arising in the ordinary course of business. The Company believes it
is unlikely that the final outcome of any of the claims, litigation or
proceedings to which the Company is a party will have a material adverse effect
on the Companys financial position or results of operations; however, due
to the inherent uncertainty of litigation, there can be no assurance that the
resolution of any particular claim or proceeding would not have a material
adverse effect on the Companys results of operations for the fiscal period
in which such resolution occurs.



11
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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


Note 8.
Related Party Transactions


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. Subsequent to March
31, 2002, 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.


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 March 31, 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 ended December
31, 2002.


The
Companys CEO also 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. The Company also appointed the Companys CFO and one of
its Board members to the Board of Tanisys. In March 2002, upon the
resignation of the Companys CEO as Chairman of the Board of Tanisys,
another member of the Companys Board became Chairman of the Board and CEO
of Tanisys. Therefore, three of the five members of the Board of Tanisys are
officers or directors of the Company.


The
Companys CEO also serves as Chairman of the Board of Princeton. In August
2001, the Company also appointed the Companys CFO to the Board of
Princeton.


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.


The
Companys CFO serves on the Board of Microbilt Corporation.


Note 9.
Subsequent Events


In
April 2002, the Company committed to finance $3.75 million, of an aggregate $8.5
million equity commitment, to Princeton during the year ended December 31, 2002.
Through 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. Assuming the completion of the above noted $8.5
million equity financing, the Companys ownership of the outstanding and
fully diluted shares of Princeton will be approximately 55.5% and 51.6%,
respectively.



12
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|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 FINANCIALCONDITION
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 quarters ended
March 31, 2002 and 2001. 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 March 31.


Results of
Operations


Continuing
Operations


For
the quarter ended March 31, 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 ended March 31, 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 ended March 31, 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 the quarter ended March 31, 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
March 31, 2002, were $1.4 million ($1.0 million for corporate expenses and $0.4
million for Tanisys expenses), compared to $2.1 million for the quarter
ended March 31, 2001 ($1.0 million for corporate expenses and $1.1 million for
FIDatas expenses). For the quarter ended March 31, 2002, the cash portion
of the corporate expenses was $0.7 million of the total corporate expenses of
$1.0 million.


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|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 expense of $12.7 million in the quarter ended March 31, 2002, compared to
$1.2 million in the quarter ended March 31, 2001. Net other expense for the
quarter ended March 31, 2002, primarily included (i) the equity in net loss of
Princeton of $14.3 million, (ii) consulting income from Platinum of $0.9
million, (iii) receipt of payment on a promissory note of $0.3
million from an Austin, Texas-based technology company and (iv) the minority
interest of $0.5 million related to Tanisys. Net other expense for the quarter
ended March 31, 2001, primarily included the equity in net loss of Princeton of
$2.4 million and consulting income from Platinum of $0.9 million.


Discontinued
Operations



The
Company continually reviews the accruals related to discontinued operations to
assess the adequacy of the accruals. During the quarter ended March 31, 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 quarter ended March
31, 2001.




Liquidity and
Capital Resources



The
Companys cash balance decreased to $6.3 million at March 31, 2002, from
$8.6 million at December 31, 2001. This decrease is primarily related to the
$2.7 million invested in Princeton during the quarter ended March 31, 2002. The
Companys working capital position decreased to $6.8 million at March 31,
2002, from $9.5 million at December 31, 2001. The decrease in the working
capital was primarily attributable to the decrease in the cash balance. Net cash
provided by operating activities for the quarter ended March 31, 2002, was $0.8
million, compared to net cash used in operating activities of
$2.5 million for the quarter ended March 31, 2001.



There
were no capital expenditures during the quarter ended March 31, 2002. The
Company anticipates minimal capital expenditures before acquisitions, if any,
during the year ended December 31, 2002. The Company believes it will be able to
fund expenditures with cash on hand.


During
the nine months ended December 31, 2002, the Companys corporate cash
balance ($5.8 million at March 31, 2002, excluding Tanisys cash) is
expected to increase as a result of (i) the receipt of the $2.2 million
consulting income from Platinum through October 2002, (ii) the receipt of $0.3
million on a promissory note due from an Austin, Texas-based technology company
in May 2002 and (iii) the receipt of interest income of $0.1 million. The total
cash inflow of $2.6 million is expected to be less than the anticipated cash
expenditures of $4.6 million for the nine months ended December 31, 2002. The
anticipated cash expenditures of $4.6 million are comprised of corporate cash
expenses of $2.0 million, investments of $1.2 million in Princeton funded
subsequent to March 31, 2002 and the Companys remaining commitment to
Princeton of $1.4 million (see further discussion below). The anticipated cash
receipts and expenditures result in an expected cash balance of $3.8 million at
December 31, 2002, assuming the funding of the entire $1.4 million remaining
commitment to Princeton.


In
addition to the above anticipated items, the cash balance could be further
decreased by additional investments in Princeton or investments in or purchases
of additional companies or investments. The cash balance could be increased by
the liquidation of one or more of the Companys investments or
subsidiaries.



14
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|Since
its inception, Princeton has incurred significant costs to develop and enhance
its technology, to establish marketing and customer relationships and to build
its capital infrastructure and administrative organization. As a result,
Princeton has historically incurred significant operating losses and expects to
generate an operating loss for the year ended December 31, 2002. During the
quarter ended March 31, 2002, Princeton received proceeds of $2.5 million from
the sale of its mandatorily redeemable convertible preferred stock (of which the
Company contributed $1.5 million). Additionally, in April 2002, Princeton
secured an unconditional commitment from four investors to purchase $8.5 million
of mandatorily redeemable convertible preferred stock during the year ended
December 31, 2002 (of which the Company committed $3.75 million). Through May
2002, Princeton has received $5.3 million of the aggregate $8.5 million
commitment (of which the Company contributed $2.4 million). Princeton believes
that its current cash and cash equivalents coupled with the additional capital
available under the investor commitment will be sufficient to fund its
operations and execute its strategy through March 2003. To the extent that
Princeton does not meet its targeted financial goals for 2002, Princetons
business, financial position, results of operations or cash flows may be
materially and adversely affected.


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 March 31, 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.




15
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|PART II
OTHER INFORMATION


Item 1. Legal
Proceedings


The
Company is involved in various other claims, legal actions and regulatory
proceedings arising in the ordinary course of business. The Company believes it
is unlikely that the final outcome of any of the claims, litigation or
proceedings to which the Company is a party will have a material adverse effect
on the Companys financial position or results of operations; however, due
to the inherent uncertainty of litigation, there can be no assurance that the
resolution of any particular claim or proceeding would not have a material
adverse effect on the Companys results of operations for the fiscal period
in which such resolution occurs.


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

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

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

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

| | Form
8-K, dated March 13, 2002, filed March 14, 2002, announcing the termination of Arthur Andersen LLP as
the Companys independent auditors.
| | ----------------------------------------------------------------------------------------------------------------------------------------------

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



16
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|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:
May 14, 2002 |  | By:                         /s/ DAVID P. TUSA
|------------------ |  | ---------------------------------------------

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

|17
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