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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                               ------------------

                                    FORM 10-K

                                  ANNUAL REPORT
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)
|X|  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE
     ACT OF1934
     For the Fiscal Year ended December 31, 2006

|_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the Transition Period from          to
                                    --------    --------

                         Commission File Number 0-28536

                               ------------------

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

                   Delaware                            74-2781950
        (State or other jurisdiction of               (IRS Employer
        incorporation or organization)           Identification Number)

 200 Crescent Court, Suite 1400, Dallas, Texas            75201
   (Address of principal executive offices)            (Zip Code)

                                 (214) 661-7488
              (Registrant's telephone number, including area code)

        Securities Registered Pursuant to Section 12(b) of the Act: NONE

           Securities Registered Pursuant to Section 12(g) of the Act:
                     COMMON STOCK, PAR VALUE $0.01 PER SHARE
          SERIES A JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS
                                (Title of Class)

      Indicate by check mark if the registrant is a well-known  seasoned issuer,
as defined in Rule 405 of the Securities Act. |_| Yes |X| No

      Indicate by check mark if the  registrant  is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. |_| Yes |X| No

      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  period  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


                                       1


      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. |X|

            Indicate by check mark whether the registrant is a large accelerated
filer,  an accelerated  filer,  or a  non-accelerated  filer.  See definition of
"accelerated  filer and large  accelerated  filer" in Rule 12b-2 of the Exchange
Act. (Check one):

Large Accelerated Filer  |_|  Accelerated Filer |_|   Non-Accelerated Filer  |X|

      Indicate  by check mark  whether  the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act). |_| Yes |X| No

      The aggregate  market value of the registrant's  outstanding  Common Stock
held by non-affiliates  of the registrant  computed by reference to the price at
which  the  Common  Stock  was  last  sold as of the  last  business  day of the
registrant's most recently completed second fiscal quarter was $8,280,745.

      As of March 30, 2007, the registrant had 53,883,872 shares of Common Stock
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Items  10,  11,  12,  13 and 14 of Part III of this  Form  10-K  incorporate  by
reference portions of an amendment to this Form 10-K or portions of a definitive
proxy statement of the registrant for its 2007 Annual Meeting of Stockholders to
be held on a date to be determined,  which in either case will be filed with the
Securities and Exchange  Commission  within 120 days after the end of the fiscal
year ended December 31, 2006.


                                       2


               NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES

                           ANNUAL REPORT ON FORM 10-K

                      FOR THE YEAR ENDED DECEMBER 31, 2006

                                                                        PAGE
                                                                        ----

                                     PART I

Item 1.  Business.......................................................  4
Item 1A. Risk Factors.....................................................7
Item 1B. Unresolved Staff Comments.......................................11
Item 2.  Properties..................................................... 11
Item 3.  Legal Proceedings.............................................. 11
Item 4.  Submission of Matters to a Vote of Security Holders............ 13

                                     PART II

Item 5.  Market for Registrant's Common Equity, Related Stockholder
         Matters and Issuer Purchases of Equity Securities...............13
Item 6.  Selected Financial Data........................................ 14
Item 7.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.......................................15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk......21
Item 8.  Financial Statements and Supplementary Data.................... 22
Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure........................................44
Item 9A. Controls and Procedures.........................................44
Item 9B. Other Information...............................................44

                                    PART III

Item 10. Directors, Executive Officers and Corporate Governance..........45
Item 11. Executive Compensation..........................................45
Item 12. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters......................45
Item 13. Certain Relationships and Related Transactions,
         and Director Independence.......................................45
Item 14. Principal Accountant Fees and Services..........................45

                                     PART IV

Item 15. Exhibits and Financial Statement Schedules......................45

         Signatures......................................................49


                                       3


                                     PART I

ITEM 1.  BUSINESS

      THIS  ANNUAL  REPORT  ON  FORM  10-K  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, THE INTEREST RATE
ENVIRONMENT,  GOVERNMENTAL REGULATION AND SUPERVISION,  SEASONALITY,  CHANGES IN
INDUSTRY  PRACTICES,  ONE-TIME EVENTS AND OTHER FACTORS  DESCRIBED HEREIN AND IN
OTHER FILINGS MADE BY THE COMPANY WITH THE  SECURITIES  AND EXCHANGE  COMMISSION
("SEC").  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.

INTRODUCTION

      New Century Equity  Holdings Corp.  ("NCEH" or the "Company") is a company
in  transition.  The  Company is  currently  seeking to  redeploy  its assets to
enhance  stockholder  value and is seeking,  analyzing and evaluating  potential
acquisition  and merger  candidates.  On October 5, 2005,  the  Company  made an
investment  in  ACP  Investments   L.P.  (d/b/a  Ascendant   Capital   Partners)
("Ascendant").  Ascendant  is a Berwyn,  Pennsylvania  based  alternative  asset
management  company whose funds have investments in long/short  equity funds and
which  distributes  its registered  funds primarily  through  various  financial
intermediaries  and  related  channels.  The  Company's  interest  in  Ascendant
currently represents the Company's sole operating business.

HISTORICAL OVERVIEW

      The Company,  which was formerly known as Billing Concepts Corp.  ("BCC"),
was  incorporated  in the  state of  Delaware  in  1996.  BCC was  previously  a
wholly-owned  subsidiary of U.S. Long Distance  Corp.  ("USLD") and  principally
provided third-party billing  clearinghouse and information  management services
to the  telecommunications  industry (the  "Transaction  Processing and Software
Business").   Upon  its  spin-off   from  USLD,   BCC  became  an   independent,
publicly-held  company.  In October  2000,  the  Company  completed  the sale of
several wholly-owned  subsidiaries that comprised the Transaction Processing and
Software  Business  to  Platinum  Holdings  ("Platinum")  for  consideration  of
$49,700,000  (the "Platinum  Transaction").  The Company also received  payments
totaling  $7,500,000  for  consulting  services  provided to  Platinum  over the
twenty-four month period subsequent to the Platinum Transaction.

      Beginning in 1998, the Company made multiple investments in Princeton eCom
Corporation  ("Princeton") totaling approximately $77,300,000 before selling all
of its interest for $10,000,000 in June 2004. The Company's strategy,  beginning
with its investment in Princeton, of making investments in high-growth companies
was also facilitated through several other investments.


                                       4


      In early  2004,  the  Company  announced  that it would  seek  stockholder
approval to liquidate  the Company.  In June of 2004,  the board of directors of
the Company  determined  that it would be in the best interest of the Company to
accept an investment from Newcastle Partners, L.P. ("Newcastle"),  an investment
fund with a long track record of investing in public and private  companies.  On
June 18, 2004, the Company sold 4,807,692 newly issued shares of its Series A 4%
Convertible  Preferred  Stock (the "Series A Preferred  Stock") to Newcastle for
$5,000,000  (the  "Newcastle  Transaction").  The Series A  Preferred  Stock was
convertible into approximately thirty-five percent of the Company's common stock
(the "Common Stock"), at any time after the expiration of twelve months from the
date of its issuance at a conversion  price of $0.26 per share of Common  Stock,
subject to adjustment for dilution.  The holders of the Series A Preferred Stock
were  entitled  to  a  four  percent   annual  cash  dividend  (the   "Preferred
Dividends"). Following the investment by Newcastle, the management team resigned
and new executives and board members were appointed.  On July 3, 2006, Newcastle
converted its Series A Preferred Stock into 19,230,768 shares of Common Stock.

      During May 2005, the Company sold its equity interest in Sharps Compliance
Corp.  ("Sharps") for approximately  $334,000.  Following the sale of its Sharps
interest,  the Company no longer holds any investments made by former management
and which  reflected  former  management's  strategy of investing in high-growth
companies.

DERIVATIVE LAWSUIT

      On August 11, 2004,  Craig Davis,  allegedly a stockholder of the Company,
filed a lawsuit  in the  Chancery  Court of New  Castle  County,  Delaware  (the
"Lawsuit").  The Lawsuit asserted direct claims,  and also derivative  claims on
the Company's  behalf,  against five former and three  current  directors of the
Company.  On April 13, 2006, the Company  announced that it reached an agreement
with all of the  parties to the  Lawsuit to settle all claims  relating  thereto
(the  "Settlement").   On  June  23,  2006,  the  Chancery  Court  approved  the
Settlement,   and  on  July  25,   2006,   the   Settlement   became  final  and
non-appealable.  As part  of the  Settlement,  the  Company  set up a fund  (the
"Settlement  Fund"),  which was distributed to stockholders of record as of July
28, 2006,  with a payment date of August 11, 2006. The portion of the Settlement
Fund  distributed to  stockholders  pursuant to the Settlement was $2,270,017 or
approximately $.04 per common share on a fully diluted basis,  provided that any
Common Stock held by defendants  in the Lawsuit who were  formerly  directors of
the Company would not be entitled to any distribution  from the Settlement Fund.
The total  Settlement  proceeds  of  $3,200,000  were  funded  by the  Company's
insurance  carrier and by Parris H.  Holmes,  Jr.,  the  Company's  former Chief
Executive  Officer,  who  contributed  $150,000.  Also  included  in  the  total
Settlement proceeds is $600,000 of reimbursement for legal and professional fees
paid to the Company by its insurance carrier and subsequently contributed by the
Company to the Settlement Fund. Therefore,  the Company has recognized a loss of
$600,000 related to the Lawsuit for the year ended December 31, 2006. As part of
the Settlement,  the Company and the other  defendants in the Lawsuit agreed not
to oppose the  request  for fees and  expenses  by counsel to the  plaintiff  of
$929,813.  Under  the  Settlement,  the  plaintiff,  the  Company  and the other
defendants (including Mr. Holmes) also agreed to certain mutual releases.

      In connection  with the resolution of the Lawsuit,  the Company has ceased
funding  of legal and  professional  fees of the  current  and  former  director
defendants.  The  funding of legal and  professional  fees was made  pursuant to
indemnification  arrangements  that were in place during the respective terms of
each of the defendants. The Company has met the $500,000 retention as stipulated
in the  Company's  directors'  and officers'  liability  insurance  policy.  The
directors' and officers'  liability  insurance policy carries a maximum coverage
limit of  $5,000,000.  As of December  31,  2006,  the  Company  has  recorded a
receivable   from  the   insurance   carrier  of   approximately   $300,000  for
reimbursement  of legal and  professional  fees incurred in excess of the policy
retention,  net of the $600,000 reimbursement from the insurance carrier as part
of the  Settlement.  The Company is currently  negotiating a settlement with the
insurance carrier with respect to remaining  reimbursement  amounts. The Company
is vigorously  pursuing  enforcement of its rights under the policy and believes
its claims to be valid.  Nonpayment of the claim for  reimbursement of legal and
professional  fees  could  have a  material  adverse  effect on the  results  of


                                       5


operations  of the Company.  The  Settlement  does not preclude the Company from
seeking  reimbursement of legal and professional fees up to the amount remaining
within the policy limit.

ALTERNATIVE ASSET MANAGEMENT OPERATIONS

      On October 5, 2005, the Company  entered into an agreement (the "Ascendant
Agreement")  with Ascendant to acquire an interest in the revenues  generated by
Ascendant. Pursuant to the Ascendant Agreement, the Company is entitled to a 50%
interest,  subject to certain adjustments,  in the revenues of Ascendant,  which
interest  declines if the assets under  management  of Ascendant  reach  certain
levels.  Revenues  generated by  Ascendant  include  revenues  from assets under
management or any other sources or investments,  net of any agreed  commissions.
The Company  also agreed to provide  various  marketing  services to  Ascendant.
Steven J. Pully,  CEO of the Company,  was appointed to the Investment  Advisory
Committee of Ascendant.  The total  potential  purchase price under the terms of
the Ascendant  Agreement is $1,550,000,  payable in four equal  installments  of
$387,500.  The  first  installment  was  paid  at the  closing  and  the  second
installment  was paid on  January  5, 2006.  Subject  to the  provisions  of the
Ascendant Agreement,  including  Ascendant's  compliance with the terms thereof,
the third  installment  was payable on April 5, 2006 and the fourth  installment
was payable on July 5, 2006. On April 5, 2006,  the Company  elected not to make
the  April  installment  payment  and  subsequently  determined  not to make the
installment payment due July 5, 2006.

      Subject to the terms of the Ascendant  Agreement,  if the Company does not
make an  installment  payment and  Ascendant  is not in breach of the  Ascendant
Agreement,  Ascendant has the right to acquire the Company's revenue interest at
a price which would yield a 10%  annualized  return to the Company.  The Company
has been  notified by Ascendant  that  Ascendant is  exercising  this right as a
result of the  Company's  election not to make its third and fourth  installment
payments.  The Company  believes that  Ascendant has not satisfied the requisite
conditions to repurchase the Company's revenue interest.

      Ascendant had assets under  management of  approximately  $27,100,000  and
$17,800,000 as of December 31, 2006 and December 31, 2005,  respectively.  Under
the  Ascendant  Agreement,  revenues  earned by the Company  from the  Ascendant
revenue  interest (as  determined in accordance  with the terms of the Ascendant
Agreement)  are  payable in cash  within 30 days after the end of each  quarter.
Under the terms of the  Ascendant  Agreement,  Ascendant  has 45 days  following
notice by the Company to cure any material  breach by Ascendant of the Ascendant
Agreement,  including with respect to payment  obligations.  Ascendant failed to
make the required revenue sharing payments for the quarters ended June 30, 2006,
September  30, 2006 and December 31, 2006,  in a timely  manner and did not cure
such  failures  within  the  required  45 day  period.  Under  the  terms of the
Ascendant  Agreement,  upon notice of an uncured material  breach,  Ascendant is
required to fully  refund all amounts  paid by the  Company,  and the  Company's
revenue interest remains outstanding.

      As part of the parties' discussions regarding non-payment of amounts under
the  Ascendant  Agreement  by each party,  the Company has proposed an amendment
that would  permit  Ascendant  to  temporarily  defer  certain  payments  to the
Company,  including  the payments  owed  related to the quarters  ended June 30,
2006,  September 30, 2006 and December 31, 2006.  There is no assurance  that an
amendment will be effected on such terms or that any resolution of the foregoing
matter will be reached.

      Based on the parties' discussions, the Company has charged off the revenue
interest  receivable  of  $34,000,  which was accrued by the Company at June 30,
2006, for its portion of the 50% revenue interest for that quarter.  The Company
has not recorded any revenue or  corresponding  receivable  for revenue  sharing
payments  for the  quarters  ended  September  30, 2006 and  December  31, 2006.
According to the Agreement  with  Ascendant,  if Ascendant  acquires the revenue
interest  from the  Company,  Ascendant  must pay the  Company  a return  on the
capital that it invested.  Pursuant to the Agreement,  the required  return will
not be  impacted  by any  payments  missed by  Ascendant  or written  off by the
Company.


                                       6


      In connection with the Ascendant Agreement,  the Company also entered into
the Principals  Agreement with  Ascendant and certain  limited  partners and key
employees of Ascendant (the  "Principals  Agreement")  pursuant to which,  among
other  things,  the  Company  has the  option to  purchase  limited  partnership
interests of Ascendant under certain circumstances. Effective March 14, 2006, in
accordance with the terms of the Principals Agreement, the Company acquired a 7%
limited  partnership  interest  from a limited  partner of Ascendant for nominal
consideration.   The  Principals   Agreement  contains  certain  noncompete  and
nonsolicitation obligations of the partners of Ascendant that apply during their
employment and the twelve month period following the termination thereof.

EMPLOYEES

      As of  December  31,  2006,  the Company  had two  employees.  None of the
Company's  employees are represented by a union.  The Company  believes that its
employee relations are good.

ITEM 1A. RISK FACTORS

      The  following  paragraphs  discuss  certain  factors  that may affect the
Company's business,  financial condition and operating results. For the purposes
of the following  paragraphs,  unless the context otherwise requires,  the terms
"we", "us" and "our" refer to NCEH. You should consider  carefully the risks and
uncertainties  described  below and the other  information  in this report.  The
risks  set  forth  below  are not the only  ones we face.  Additional  risks and
uncertainties that we are not aware of or that we currently deem immaterial also
may become  important  or impair our  business.  If any of the  following  risks
actually  occur,  our  business,   financial  condition  and  results  could  be
materially  adversely  affected,  the  trading  price of our Common  Stock could
decline and the likelihood of there being any potential  return to  stockholders
would diminish.

OUR RESULTS OF OPERATIONS COULD BE HARMED AS A RESULT OF CERTAIN ISSUES RELATING
TO THE  SETTLEMENT  OF THE DAVIS  LITIGATON,  INCLUDING  IF WE DO NOT  COLLECT A
RECEIVABLE FROM OUR INSURANCE CARRIER WITH RESPECT TO DEFENSE COSTS.

      As discussed  in Item 3 "Legal  Proceedings",  on August 11,  2004,  Craig
Davis,  allegedly a stockholder of the Company,  filed a lawsuit in the Chancery
Court of New Castle County,  Delaware.  The lawsuit asserted direct claims,  and
also derivative  claims on the Company's  behalf,  against five former and three
current  directors of the  Company.  On April 13,  2006,  we  announced  that we
reached an agreement with all of the parties to the lawsuit to settle all claims
relating   thereto.   On  July  25,  2006,  the  Settlement   became  final  and
non-appealable.

      In  connection  with the  resolution  of the Lawsuit,  the Company  ceased
funding  of legal and  professional  fees of the  current  and  former  director
defendants.  The  funding of legal and  professional  fees was made  pursuant to
indemnification  arrangements  that were in place during the respective terms of
each of the defendants.  We have met the $500,000 retention as stipulated in our
directors'  and  officers'   liability  insurance  policy.  The  directors'  and
officers'  liability  insurance  policy  carries  a  maximum  coverage  limit of
$5,000,000.  As of December 31,  2006,  we have  recorded a receivable  from the
insurance  carrier of  approximately  $300,000  for  reimbursement  of legal and
professional  fees  incurred  in  excess  of the  policy  retention,  net of the
$600,000 reimbursement from the insurance carrier as part of the Settlement.  We
are currently  negotiating a settlement with the insurance  carrier with respect
to remaining  reimbursement  amounts. We are vigorously pursuing  enforcement of
our rights under the policy.  Nonpayment of the claim for reimbursement of legal
and  professional  fees could have a material  adverse  effect on the results of
operations  of the  Company.  The  Settlement  does not preclude us from seeking
reimbursement of legal and  professional  fees up to the amount remaining within
the policy limit.


                                       7


      The  Settlement  provides that, if the Company has not acquired a business
that generates  revenues by the date of March 1, 2007,  the plaintiff  maintains
the right to pursue a claim to liquidate the Company.  This custodian  claim was
one of several claims  asserted in the Lawsuit.  Even if such a claim is elected
to be pursued,  there is no assurance that it will be  successful.  In addition,
the  Company  believes  that it has  preserved  its  right  to  assert  that the
Ascendant investment meets the foregoing requirement to acquire a business.

THE SEC OR A COURT MAY TAKE THE  POSITION  THAT THE  COMPANY WAS  PREVIOUSLY  IN
VIOLATION OF THE INVESTMENT COMPANY ACT OF 1940.

      Among the claims filed by Mr.  Davis is a claim that the Company  operated
as an illegal  investment  company in violation of the Investment Company Act of
1940 (the  "Investment  Company  Act").  Although we do not believe that we have
violated the Investment Company Act in the past, or at present,  there can be no
assurance that we have not, or are not, in violation of, the Investment  Company
Act.  In the  event  the  SEC or a  court  took  the  position  that  we were an
investment  company,  our failure to register as an investment company would not
only raise the  possibility  of an  enforcement or other legal action by the SEC
and  potential  fines and  penalties,  but also could  threaten  the validity of
corporate  actions and  contracts  entered  into by us during the period we were
deemed to be an unregistered investment company, among other remedies.

WE MAY BE UNABLE TO REDEPLOY OUR ASSETS SUCCESSFULLY.

      As part of our  strategy  to  limit  operating  losses  and  enable  us to
redeploy our assets and use our cash and short-term investment assets to enhance
stockholder   value,  we  are  pursuing  a  strategy  of  identifying   suitable
acquisition  candidates,  merger  partners or otherwise  developing new business
operations.  We may  not be  successful  in  acquiring  such  a  business  or in
operating any business that we acquire, merge with or develop.  Although we made
an  investment  in  Ascendant,  we may  not be  successful  in  investing  in or
acquiring other  businesses.  Failure to redeploy our assets  successfully  will
prevent us from becoming  profitable.  Future cash  expenditures are expected to
consist of funding  corporate  expenses,  the cost associated with maintaining a
public  company and  expenses  incurred in pursuing and  operating  new business
activities, during which time operating losses are likely to be generated.

ANY ACQUISITIONS  THAT WE ATTEMPT OR COMPLETE COULD PROVE DIFFICULT TO INTEGRATE
OR REQUIRE A SUBSTANTIAL COMMITMENT OF MANAGEMENT TIME AND OTHER RESOURCES.

      Our strategy of  acquiring  other  businesses  involves a number of unique
risks  including:  (i) completing due diligence  successfully;  (ii) exposure to
unforeseen liabilities of acquired companies; and (iii) increased risk of costly
and time-consuming litigation,  including stockholder lawsuits. We may be unable
to address these problems  successfully.  Moreover, our future operating results
will depend to a significant degree on our ability to integrate acquisitions (if
any) successfully and manage operations while also controlling our expenses.  We
may be unable to select,  manage or absorb or integrate any future  acquisitions
successfully,  particularly  acquisitions of large  companies.  Any acquisition,
even if effectively integrated, may not benefit our stockholders.

THE SUCCESS OF THE INVESTMENT IN ASCENDANT WILL BE IMPACTED BY THE GROWTH OF ITS
ASSETS UNDER  MANAGEMENT  AND THE SUCCESS OF THE  PERFORMANCE  OF ITS UNDERLYING
FUNDS, EACH OF WHICH MAY BE IMPACTED BY THE SECURITIES MARKETS.

      The  operations of Ascendant  will be affected by many  economic  factors,
including the performance of the securities markets.  Declines in the securities
markets, in general, and the equity markets, in particular,  would likely reduce
Ascendant's  assets under  management and consequently  reduce our revenues.  In
addition, any continuing decline in the equity markets, failure of these markets
to sustain their prior rates of growth, or continued volatility in these markets
could  result in investors  withdrawing  from the equity  markets or  decreasing
their  rate of  investment,  either  of  which  would  likely  adversely  affect
Ascendant which, in turn, could impair our revenue  interest.  In addition,  our
decision  not to  make  additional  installment  payments  under  the  Ascendant
Agreement, and thereby cease funding Ascendant,  could have a material impact on
Ascendant's  operations  if  Ascendant  is  unable  to  grow  its  assets  under
management in order to sustain  itself and could cause  Ascendant to take one or
more of several actions,  including to seek financial support from other sources
and/or cease operations.


                                       8


WE MAY BE UNABLE TO REALIZE THE BENEFITS OF OUR NET  OPERATING  LOSS ("NOL") AND
CAPITAL LOSS CARRYFORWARDS.

      NOLs and capital losses may be carried forward to offset federal and state
taxable  income and capital gains,  respectively,  in future years and eliminate
income taxes otherwise payable on such taxable income and capital gains, subject
to certain adjustments. Based on current federal corporate income tax rates, our
NOL and capital loss carryforwards,  if fully utilized,  could provide a benefit
to us of future tax savings.  However,  our ability to use these tax benefits in
future  years will depend upon the amount of our  otherwise  taxable  income and
capital gains. If we do not have sufficient  taxable income and capital gains in
future  years to use the tax  benefits  before  they  expire,  we will  lose the
benefit of these NOL and capital loss carryforwards,  permanently. Consequently,
our ability to use the tax  benefits  associated  with our NOL and capital  loss
carryforwards will depend largely on our success in identifying  suitable merger
partners and/or  acquisition  candidates,  and once  identified,  consummating a
merger with and/or acquisition of these candidates.

      Additionally,  if we underwent an ownership  change  within the meaning of
Sections  382 and 383 of the  Internal  Revenue  Code,  the NOL and capital loss
carryforward  limitations  would  impose  an annual  limit on the  amount of the
taxable  income and capital  gain that may be offset by our NOL and capital loss
generated prior to the ownership  change.  If an ownership change were to occur,
we would be unable to use a  significant  portion  of our NOL and  capital  loss
carryforwards  to offset  taxable  income and  capital  gains.  In  general,  an
ownership  change  occurs when,  as of any testing  date,  the  aggregate of the
increase in percentage points of the total amount of a corporation's stock owned
by  "5-percent  shareholders"  (within the meaning of Section 382 and 383 of the
Internal Revenue Code) whose percentage  ownership of the stock has increased as
of such  date  over the  lowest  percentage  of the  stock  owned  by each  such
"5-percent  shareholder" at any time during the three-year period preceding such
date, is more than 50 percentage points. In general,  persons who own 5% or more
of a corporation's stock are "5-percent shareholders," and all other persons who
own less than 5% of a  corporation's  stock are  treated,  together as a single,
public  group  "5-percent  shareholder,"  regardless  of  whether  they  own  an
aggregate of 5% of a corporation's stock.

      The amount of NOL and capital loss carryforwards that we have claimed have
not been audited or otherwise  validated by the U.S.  Internal  Revenue Service.
The IRS could  challenge  our  calculation  of the amount of our NOL and capital
loss or our  determinations as to when a prior change in ownership  occurred and
other  provisions  of the  Internal  Revenue Code may limit our ability to carry
forward our NOL and capital loss to offset  taxable  income and capital gains in
future years. If the IRS was successful with respect to any such challenge,  the
potential tax benefit of the NOL and capital loss  carryforwards  to us could be
substantially reduced.

ANY TRANSFER RESTRICTIONS IMPLEMENTED BY THE COMPANY TO PRESERVE OUR NOL MAY NOT
BE EFFECTIVE OR MAY HAVE SOME UNINTENDED NEGATIVE EFFECTS.

      The board of  directors  previously  adopted  an  amendment  to our former
Shareholders  Rights Plan ("Rights  Plan") which  reduced the  triggering of the
Rights Plan from 15% of the Common Stock to 5% of the Common  Stock.  During the
year ended December 31, 2006,  the board of directors  replaced this Rights Plan
with a new plan  with the same  lowered  5%  threshold.  This 5%  threshold  was
adopted to help  preserve  our NOL and capital loss  carryforwards.  There is no
guarantee  that the new Rights Plan will prevent a  stockholder  from  acquiring
more than 5% of the Common Stock.


                                       9


      Any transfer  restrictions will require any person attempting to acquire a
significant  interest  in the  Company  to seek  the  approval  of our  board of
directors.  This  may  have an  "anti-takeover"  effect  because  our  board  of
directors may be able to prevent any future takeover.  Similarly,  any limits on
the amount of capital stock that a stockholder  may own could have the effect of
making  it more  difficult  for  stockholders  to  replace  current  management.
Additionally,  because transfer restrictions will have the effect of restricting
a stockholder's ability to dispose of or acquire our Common Stock, the liquidity
and market value of our Common Stock might suffer.

OUR COMMON STOCK IS ILLIQUID.

      Our Common Stock is currently  quoted on the OTC Bulletin Board ("OTCBB"),
and has traded as low as $0.15 per share during 2006. Since our Common Stock was
delisted  from a national  exchange  and is trading at a price  below  $5.00 per
share,  it is subject to certain other rules of the  Securities  Exchange Act of
1934, as amended.  Such rules require additional disclosure by broker-dealers in
connection with any trades involving a stock defined as a "penny stock".  "Penny
stock" is defined as any non-NASDAQ  equity  security that has a market price of
less than $5.00 per share, subject to certain exceptions. Such rules require the
delivery of a  disclosure  schedule  explaining  the penny stock  market and the
risks  associated  with  that  market  before  entering  into  any  penny  stock
transaction.  Disclosure is also required to be made about compensation  payable
to  both  the  broker-dealer  and  the  registered  representative  and  current
quotations  for the  securities.  The rules also impose  various sales  practice
requirements  on  broker-dealers  who sell penny  stocks to  persons  other than
established customers and accredited investors. For these types of transactions,
the  broker-dealer  must  make  a  special  suitability  determination  for  the
purchaser and must receive the  purchaser's  written  consent to the transaction
prior  to  the  sale.  Finally,  monthly  statements  are  required  to be  sent
disclosing recent price information for the penny stocks. The additional burdens
imposed upon broker-dealers by such requirements could discourage broker-dealers
from effecting  transactions in our Common Stock.  This could severely limit the
market  liquidity of our Common Stock and the ability of a  stockholder  to sell
the Common Stock.

OUR SUCCESS IS DEPENDENT ON OUR KEY PERSONNEL WHOM WE MAY NOT BE ABLE TO RETAIN,
AND WE MAY NOT BE ABLE TO HIRE ENOUGH ADDITIONAL QUALIFIED PERSONNEL TO MEET OUR
GROWING NEEDS.

      Our  performance  is  substantially  dependent  on the services and on the
performance of our officers and directors.  Our performance  also depends on our
ability to attract,  hire,  retain, and motivate our officers and key employees.
The loss of the services of any of the executive officers or other key employees
could have a  material  adverse  effect on our  business,  prospects,  financial
condition,  and  results of  operations.  We have not  entered  into  employment
agreements  with any of our key personnel  and currently  have no "Key Man" life
insurance  policies.  Our  future  success  may also  depend on our  ability  to
identify,  attract,  hire,  train,  retain,  and motivate  other highly  skilled
technical, managerial, marketing and customer service personnel. Competition for
such  personnel are intense,  and there can be no assurance that we will be able
to successfully attract,  assimilate or retain sufficiently qualified personnel.
The failure to attract and retain the necessary technical, managerial, marketing
and  customer  service  personnel  could have a material  adverse  effect on our
business.

THE ASSETS ON OUR BALANCE SHEET INCLUDE A REVENUE INTEREST IN ASCENDANT, AND ANY
IMPAIRMENT  OF THE  REVENUE  INTEREST  COULD  ADVERSELY  AFFECT  OUR  RESULTS OF
OPERATIONS AND FINANCIAL POSITION.

      As of December 31, 2006, our total assets were  approximately  $13,490,000
of which  approximately  $803,000 were intangible assets relating to the revenue
interest in Ascendant.  We cannot be certain that we will ever realize the value
of such  intangible  assets.  If we were to record an impairment  charge for the
intangible asset, our results of operations could be adversely affected.


                                       10


ITEM 1B. UNRESOLVED STAFF COMMENTS

      Not applicable

ITEM 2. PROPERTIES

      In February 2004, the Company  leased  approximately  1,700 square feet of
space at 10101 Reunion Place, Suite 970, San Antonio, Texas, which served as the
corporate headquarters from April 2004 until September 2004. On October 8, 2004,
the Company entered into a sublease agreement to sublet the office space located
at 10101 Reunion Place,  Suite 970, San Antonio,  Texas.  Under the terms of the
original lease, the Company was obligated to make monthly rental installments of
approximately  $3,000 through January 31, 2007, the expiration of the lease. The
sublease   agreement   provides  for  the  subtenant  to  make  monthly   rental
installments  of  approximately  $2,500 per month through  January 31, 2007. The
Company's  corporate  headquarters are currently  located at 200 Crescent Court,
Suite 1400, Dallas, Texas 75201, which are also the offices of Newcastle Capital
Management,  L.P. ("NCM"). NCM is the general partner of Newcastle.  The Company
occupies a portion of NCM's space on a month-to-month basis at $2,500 per month,
pursuant to a services  agreement entered into between the parties on October 1,
2006.

ITEM 3.  LEGAL PROCEEDINGS

      On August 11, 2004,  Craig Davis,  allegedly a stockholder of the Company,
filed a lawsuit  in the  Chancery  Court of New  Castle  County,  Delaware  (the
"Lawsuit").  The Lawsuit asserted direct claims,  and also derivative  claims on
the Company's  behalf,  against five former and three  current  directors of the
Company.  On April 13, 2006, the Company  announced that it reached an agreement
with all of the  parties to the  Lawsuit to settle all claims  relating  thereto
(the  "Settlement").   On  June  23,  2006,  the  Chancery  Court  approved  the
Settlement,   and  on  July  25,   2006,   the   Settlement   became  final  and
non-appealable.  As part  of the  Settlement,  the  Company  set up a fund  (the
"Settlement  Fund"),  which was distributed to stockholders of record as of July
28, 2006,  with a payment date of August 11, 2006. The portion of the Settlement
Fund  distributed to  Stockholders  pursuant to the Settlement was $2,270,017 or
approximately $.04 per common share on a fully diluted basis,  provided that any
Common Stock held by defendants  in the Lawsuit who were  formerly  directors of
the Company would not be entitled to any distribution  from the Settlement Fund.
The total  Settlement  proceeds  of  $3,200,000  were  funded  by the  Company's
insurance  carrier and by Parris H.  Holmes,  Jr.,  the  Company's  former Chief
Executive  Officer,  who  contributed  $150,000.  Also  included  in  the  total
Settlement proceeds is $600,000 of reimbursement for legal and professional fees
paid to the Company by its insurance carrier and subsequently contributed by the
Company to the Settlement Fund. Therefore,  the Company has recognized a loss of
$600,000 related to the Lawsuit for the year ended December 31, 2006. As part of
the Settlement,  the Company and the other  defendants in the Lawsuit agreed not
to oppose the  request  for fees and  expenses  by counsel to the  plaintiff  of
$929,813.  Under  the  Settlement,  the  plaintiff,  the  Company  and the other
defendants  (including  Mr.  Holmes) also agreed to certain  mutual  releases of
claims arising out of transactions referenced in the Lawsuit.


                                       11


      In  connection  with the  resolution  of the Lawsuit,  the Company  ceased
funding  of legal and  professional  fees of the  current  and  former  director
defendants.  The  funding of legal and  professional  fees was made  pursuant to
indemnification  arrangements  that were in place during the respective terms of
each of the defendants. The Company has met the $500,000 retention as stipulated
in the  Company's  directors'  and officers'  liability  insurance  policy.  The
directors' and officers'  liability  insurance policy carries a maximum coverage
limit of  $5,000,000.  As of December  31,  2006,  the  Company  has  recorded a
receivable   from  the   insurance   carrier  of   approximately   $300,000  for
reimbursement  of legal and  professional  fees incurred in excess of the policy
retention,  net of the $600,000 reimbursement from the insurance carrier as part
of the  Settlement.  The Company is currently  negotiating a settlement with the
insurance carrier with respect to remaining  reimbursement  amounts. The Company
is vigorously  pursuing  enforcement of its rights under the policy and believes
its claims to be valid.  Nonpayment of the claim for  reimbursement of legal and
professional  fees  could  have a  material  adverse  effect on the  results  of
operations  of the Company.  The  Settlement  does not preclude the Company from
seeking  reimbursement of legal and professional fees up to the amount remaining
within the policy limit.

      Pursuant  to the sale of  4,807,692  newly  issued  shares of the Series A
Preferred  Stock to Newcastle on June 18, 2004,  the Company agreed to indemnify
Newcastle  from any  liability,  loss or  damage,  together  with all  costs and
expenses related thereto that the Company may suffer which arises out of affairs
of the Company,  its board of directors or employees prior to the closing of the
Newcastle Transaction. The Company's obligation to indemnify may be satisfied at
the option of the purchaser by issuing  additional  Series A Preferred  Stock to
the purchaser, modifying the conversion price of the Series A Preferred Stock, a
payment of cash or a redemption of Series A Preferred  Stock or a combination of
the foregoing. On July 3, 2006, Newcastle converted its Series A Preferred Stock
into 19,230,768 shares of the Common Stock.

      On December 12, 2005, the Company received a letter from the SEC, based on
a review of the Company's  Form 10-K filed for the year ended December 31, 2004,
requesting  that the  Company  provide a written  explanation  as to whether the
Company is an  "investment  company" (as such term is defined in the  Investment
Company Act of 1940).  The Company provided a written response to the SEC, dated
January 12, 2006,  stating the reasons why it believes it is not an  "investment
company". The Company has provided certain confirmatory information requested by
the SEC. In the event the SEC or a court took the  position  that the Company is
an  investment  company,  the  Company's  failure to register  as an  investment
company would not only raise the  possibility  of an  enforcement or other legal
action by the SEC and potential fines and penalties, but also could threaten the
validity of corporate  actions and contracts  entered into by the Company during
the period it was deemed to be an unregistered  investment company,  among other
remedies.

      During  February 2006, the Company entered into an agreement with a former
employee to settle a dispute over a severance agreement the employee had entered
into with the Company.  The  severance  agreement,  which was executed by former
management,  provided for a payment of approximately $98,000 upon the occurrence
of certain events. The Company paid  approximately  $85,000 to settle all claims
associated  with the severance  agreement.

      During May 2006, the Company entered into an agreement to settle a dispute
with a law firm that had  previously  been hired by the Company.  In  accordance
with the terms of the  agreement,  the  Company  received  a refund of legal and
professional  fees of $125,000  during May 2006. In connection with this matter,
the  Company  reversed  accrued  legal and  professional  fees of  approximately
$38,000 during the quarter ended March 31, 2006.


                                       12


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      During the fourth  quarter of fiscal 2006,  no matter was submitted by the
Company to a vote of its  stockholders  through the  solicitation  of proxies or
otherwise.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
         ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

      The Company's Common Stock, par value $0.01 per share, is currently quoted
on the OTCBB under the symbol "NCEH.OB". The table below sets forth the high and
low bid prices for the Common Stock from  January 1, 2005  through  December 31,
2006.  These  price  quotations  reflect  inter-dealer  prices,  without  retail
mark-up,  mark-down or  commission,  and may not  necessarily  represent  actual
transactions:

                                          High         Low
                                        --------     --------
      Year Ended December 31, 2005:
        1st Quarter                     $   0.31     $   0.23
        2nd Quarter                     $   0.25     $   0.21
        3rd Quarter                     $   0.28     $   0.19
        4th Quarter                     $   0.31     $   0.18

      Year Ended December 31, 2006:
        1st Quarter                     $   0.23     $   0.15
        2nd Quarter                     $   0.25     $   0.19
        3rd Quarter                     $   0.26     $   0.18
        4th Quarter                     $   0.23     $   0.20

STOCKHOLDERS

      As of March 30,  2007,  there  were  53,883,872  shares  of  Common  Stock
outstanding,  held by 502 holders of record as of December  31,  2006.  The last
reported sales price of the Common Stock was $0.29 per share on March 30, 2007.

DIVIDEND POLICY

      The Company has never  declared or paid any cash  dividends  on its Common
Stock. Approximately $2,270,017 was distributed to certain stockholders pursuant
to the Settlement in August 2006. On June 30, 2006, Newcastle elected to receive
Preferred  Dividends  in cash for the period from June 19, 2005 through June 30,
2006.  On July 3,  2006,  Newcastle  elected  to  convert  all of its  Series  A
Preferred Stock into 19,230,768  shares of Common Stock. The Company may not pay
dividends on its Common Stock unless all declared and unpaid Preferred Dividends
have been paid.  In  addition,  whenever  the Company  shall  declare or pay any
dividend  on its  Common  Stock,  the  holders of Series A  Preferred  Stock are
entitled to receive such Common Stock dividends on a ratably as-converted basis.

PERFORMANCE GRAPH

      The Company's  Common Stock has been traded publicly since August 5, 1996.
Prior to such date,  there was no established  market for the Common Stock.  Set
forth  below is a line  graph  comparing  the  yearly  percentage  change in the
cumulative total stockholder return on our Common Stock to the cumulative return
of the  S&P 500  Stock  Index,  the  Russell  MicroCap  Index  and the S&P  Data
Processing and Outsourced  Services Index for the period  commencing on December
31, 2001 and ending  December  31, 2006 (the  "Measuring  Period").  The Company
selected the S&P Data  Processing  and  Outsourced  Services Index as a basis of
comparison as it believes the issuers comprising this index are in the same line
of business as Princeton eCom Corporation ("Princeton"), the investment in which
the  Company  held an interest up until June 2004.  The graph  assumes  that the
value of the investment in the Company's Common Stock and each index was $100 on
December 31, 2001.  The yearly change in cumulative  total return is measured by
dividing (1) the sum of (i) the cumulative amount of dividends for the Measuring
Period,  assuming  dividend  reinvestment,  and (ii) the  change in share  price
between the beginning and end of the Measuring Period, by (2) the share price at
the beginning of the Measuring Period.

                               [GRAPHIC OMITTED]

                                             Cumulative Total Return
                                 --------------------------------------------------
                                 12/01   12/02    12/03   12/04     12/05    12/06
                                 -----   -----    -----   -----     -----    -----
New Century Equity Holdings      100.00   52.00    64.00    60.00    42.50    51.09
S&P 500 Index                    100.00   77.90   100.24   111.15   116.61   135.03
S&P Data Processing &
Outsourced Services Index        100.00   71.08    83.19    87.71    92.54   102.12
Russell MicroCap Index           100.00   83.90   139.57   159.31   163.40   190.43


                                       13


      The  Performance  Graph is based on historical data and is not necessarily
indicative  of future  performance.  The  Performance  Graph is not deemed to be
"soliciting  material"  or to be  "filed"  with the SEC or  subject to the SEC's
proxy rules or to the  liabilities  of Section 18 of the  Exchange  Act, and the
Performance  Graph shall not be deemed  incorporated by reference into any prior
or  subsequent  filing by the Company under the  Securities  Act or the Exchange
Act,  except to the extent  that the  Company  specifically  incorporates  it by
reference to such filing.

ITEM 6.  SELECTED FINANCIAL DATA

      The following  table  presents  selected  financial and other data for the
Company. The statement of operations data for the years ended December 31, 2006,
2005,  2004,  2003 and 2002 and the balance  sheet data as of December 31, 2006,
2005,  2004,  2003  and 2002  presented  below  are  derived  from  the  audited
Consolidated  Financial  Statements of the Company. The data presented below for
the years ended  December 31, 2006,  2005 and 2004 should be read in conjunction
with the Consolidated  Financial Statements and the notes thereto,  Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
other financial information included in this report.

                                                                      Year Ended December 31,
                                                      ---------------------------------------------------------

(in thousands, except per share data)                   2006        2005        2004        2003       2002
                                                      ---------   ---------   ---------   ---------   ---------
Consolidated Statement of Operations Data:
Operating revenues ................................   $     69    $     33    $   --      $   --      $   --
Gross profit ......................................         69          33        --          --          --
Operating loss from continuing operations .........       (573)     (1,009)     (4,854)     (3,174)     (3,560)
Net loss from continuing operations ...............       (591)       (543)     (1,903)     (6,486)    (18,538)
Net loss from discontinued
     operations, net of income taxes ..............       --          --          --          --          (962)
Net (loss) income from disposal of
     discontinued operations, net of income
     taxes ........................................       --          --          --           (30)      2,254
Net loss ..........................................       (591)       (543)     (1,903)     (6,516)    (17,246)
Preferred stock dividend ..........................       (100)       (200)       (107)       --          --
Net loss applicable to common stockholders ........       (691)       (743)     (2,010)     (6,516)    (17,246)

Basic and diluted net loss per common share:
Net loss from continuing operations ...............   $   (.01)   $   (.02)   $   (.06)   $  (0.19)   $  (0.54)
Net loss from discontinued
     operations, net of income taxes ..............       --          --          --          --         (0.03)
Net income from disposal of
     discontinued operations, net of
     income taxes .................................       --          --          --          --          0.07
Net loss ..........................................   $   (.01)   $   (.02)   $   (.06)   $  (0.19)   $  (0.50)

Dividends per common share ........................   $   --      $   --      $   --      $   --      $   --

Weighted average common shares
     outstanding ..................................     44,268      34,653      34,653      34,379      34,217

                                                                            December 31,
                                                      ---------------------------------------------------------
(in thousands)                                          2006        2005        2004        2003       2002
                                                      ---------   ---------   ---------   ---------   ---------
Consolidated Balance Sheet Data:
Working capital ...................................   $ 12,513    $ 13,554    $ 14,428    $  4,357    $  8,454
Total assets ......................................     13,490      14,578      15,095      13,036      20,124
Long-term obligations and redeemable
     preferred stock ..............................       --             2           2        --          --
Additional paid-in capital ........................     75,340      75,450      75,428      70,476      70,346
Accumulated deficit ...............................   $(62,563)   $(61,872)   $(61,107)   $(59,097)   $(52,581)


                                       14


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

      The following  discussion  should be read in conjunction with the Business
section discussion,  the Consolidated Financial Statements and the Notes thereto
and the other financial information included elsewhere in this Report.

CONTINUING OPERATIONS

OPERATING REVENUES

      On October 5, 2005,  the Company  entered into the Ascendant  Agreement to
acquire an interest in the  revenues  generated  by  Ascendant.  Pursuant to the
Ascendant  Agreement,  the  Company is entitled  to a 50%  interest,  subject to
certain  adjustments,  in the revenues of Ascendant,  which interest declines if
the  assets  under  management  of  Ascendant  reach  certain  levels.  Revenues
generated by Ascendant  include  revenues  from assets under  management  or any
other sources or investments,  net of any agreed  commissions.  The Company also
agreed to provide various marketing services to Ascendant.  Steven J. Pully, CEO
of the Company, was appointed to the Investment Advisory Committee of Ascendant.
The total potential purchase price under the terms of the Ascendant Agreement is
$1,550,000,   payable  in  four  equal  installments  of  $387,500.   The  first
installment  was paid at the  closing  and the  second  installment  was paid on
January 5, 2006. Subject to the provisions of the Ascendant Agreement, including
Ascendant's compliance with the terms thereof, the third installment was payable
on April 5, 2006 and the fourth  installment  was payable on July 5, 2006. As of
April 5, 2006, the Company elected not to make the April installment payment and
subsequently determined not make any additional installment payments.

      Subject to the terms of the Ascendant  Agreement,  if the Company does not
make an  installment  payment and  Ascendant  is not in breach of the  Ascendant
Agreement,  Ascendant has the right to acquire the Company's revenue interest at
a price which would yield a 10%  annualized  return to the Company.  The Company
has been  notified by Ascendant  that  Ascendant is  exercising  this right as a
result of the  Company's  election not to make its third and fourth  installment
payments.  The Company  believes that  Ascendant has not satisfied the requisite
conditions to repurchase the Company's revenue interest.

      Ascendant had assets under  management of  approximately  $27,100,000  and
$17,800,000 as of December 31, 2006 and December 31, 2005,  respectively.  Under
the  Ascendant  Agreement,  revenues  earned by the Company  from the  Ascendant
revenue  interest (as  determined in accordance  with the terms of the Ascendant
Agreement)  are  payable in cash  within 30 days after the end of each  quarter.
Under the terms of the  Ascendant  Agreement,  Ascendant  has 45 days  following
notice by the Company to cure any material  breach by Ascendant of the Ascendant
Agreement,  including with respect to payment  obligations.  Ascendant failed to
make the required revenue sharing payments for the quarters ended June 30, 2006,
September  30, 2006 and December 31, 2006,  in a timely  manner and did not cure
such  failure  within  the 45 day  period.  Under  the  terms  of the  Ascendant
Agreement,  upon notice of an uncured material breach,  Ascendant is required to
fully refund all amounts paid by the Company, and the Company's revenue interest
remains outstanding.

      As part of the parties' discussions regarding non-payment of amounts under
the  Ascendant  Agreement  by each party,  the Company has proposed an amendment
that would  permit  Ascendant  to  temporarily  defer  certain  payments  to the
Company,  including  the payments  owed  related to the quarters  ended June 30,
2006,  September 30, 2006 and December 31, 2006.  There is no assurance  that an
amendment will be effected on such terms or that any resolution of the foregoing
matter will be reached.


                                       15


      Based on the parties' discussions, the Company has charged off the revenue
interest  receivable  of  $34,000,  which was accrued by the Company at June 30,
2006 for its portion of the 50% revenue  interest for that quarter.  The Company
has not recorded any revenue or  corresponding  receivable for a revenue sharing
payment for the  quarters  ended  September  30,  2006 and  December  31,  2006.
According to the Agreement  with  Ascendant,  if Ascendant  acquires the revenue
interest  from the  Company,  Ascendant  must pay the  Company  a return  on the
capital that it invested.  Pursuant to the Agreement,  the required  return will
not be  impacted  by any  payments  missed by  Ascendant  or written  off by the
Company.

      In connection with the Ascendant Agreement,  the Company also entered into
the Principals  Agreement with  Ascendant and certain  limited  partners and key
employees of Ascendant (the  "Principals  Agreement")  pursuant to which,  among
other  things,  the  Company  has the  option to  purchase  limited  partnership
interests of Ascendant under certain circumstances. Effective March 14, 2006, in
accordance with the terms of the Principals Agreement, the Company acquired a 7%
limited  partnership  interest  from a limited  partner of Ascendant for nominal
consideration.   The  Principals   Agreement  contains  certain  noncompete  and
nonsolicitation obligations of the partners of Ascendant that apply during their
employment and the twelve month period following the termination thereof.

GENERAL AND ADMINISTRATIVE EXPENSES

      General and  administrative  ("G&A")  expenses are  comprised of all costs
incurred in direct support of the business operations of the Company. During the
year ended  December  31,  2006,  G&A  expenses  totaled  $642,000,  compared to
$1,035,000  during the year ended  December 31, 2005 and  $4,826,000  during the
year ended December 31, 2004. The major  components of G&A expenses for the year
ended December 31, 2006 are as follows:  officers and directors compensation and
benefits of approximately $241,000; audit and tax fees of approximately $95,000;
directors and officers insurance coverage of approximately  $76,000;  legal fees
and other  public  company  costs of  approximately  $88,000;  and legal fees of
approximately  $183,000  which  relate to the  derivative  action filed by Craig
Davis (see "Part I - Item 3. Legal  Proceedings").  These  costs were  partially
offset by a refund of legal and  professional  fees of $125,000  received during
May 2006 in connection with the settlement of a dispute with a law firm that had
been previously hired by the Company.

      The decrease in G&A for the year ended December 31, 2005, when compared to
the year ended December 31, 2004, is the result of the decrease in the number of
salaried  employees  from five to one and a  significant  reduction in executive
compensation  and benefits.  G&A expenses for the year ended  December 31, 2004,
included a total of  approximately  $2,600,000  of  severance  paid to Parris H.
Holmes,  Jr. and David P. Tusa, the Company's former Chief Executive Officer and
Chief  Financial  Officer,  respectively.  G&A expenses  for 2004 also  included
approximately   $700,000  for  legal  and   professional   expenses,   of  which
approximately  $240,000 relates to the Complaint filed by Craig Davis (see "Part
I - Item 3. Legal Proceedings") and approximately $500,000 relates to completing
the proposed  proxy  statement  seeking  stockholder  approval to liquidate  the
Company  (which  was   subsequently   withdrawn)  and  completing  the  sale  of
approximately  4,807,692  newly issued shares of the Series A Preferred Stock to
Newcastle on June 18, 2004.  The Company  also  decreased  its rent expense as a
result of the sublease  entered into on October 8, 2004 to sublet the  Company's
office space located at 10101 Reunion Place, Suite 970, San Antonio, Texas.

DEPRECIATION AND AMORTIZATION

      Depreciation and amortization  expense is incurred with respect to certain
assets,  including computer  hardware,  software,  office equipment,  furniture,
goodwill  and other  intangibles.  During  the year  ended  December  31,  2006,
depreciation and amortization  expense totaled $0, compared to $7,000 during the
year ended  December  31, 2005 and $28,000  during the year ended  December  31,
2004.  The  decrease in  depreciation  and  amortization  from prior  periods is
principally  the result of fixed asset  sales.  The Company  made no fixed asset
purchases during the year ended December 31, 2006.


                                       16


INTEREST INCOME

      Interest income totaled  $582,000 during the year ended December 31, 2006,
compared to $423,000 and $121,000  during the years ended  December 31, 2005 and
2004, respectively.  The increase in interest income for the year ended December
31, 2006, as compared to the year ended December 31, 2005, was  attributable  to
increased yields available for short-term investments.  The increase in interest
income for the year ended  December  31,  2005,  as  compared  to the year ended
December  31, 2004,  was  attributable  to higher cash  balances  available  for
short-term  investment as the Company's  cash  resources  were  increased by the
Newcastle  Transaction  and the  sale  of  Princeton  (see  Notes 1 and 4 of the
accompanying Consolidated Financial Statements).

EQUITY IN NET LOSS OF AFFILIATES

      Equity in net loss of affiliates totaled $0 during the year ended December
31, 2006, compared to $0 and $2,985,000 during the years ended December 31, 2005
and 2004,  respectively.  In June 2004,  the Company sold all of its holdings in
Princeton, which offers electronic bill presentment and payment services via the
Internet and telephone.

GAIN ON SALE OF EQUITY AFFILIATE

      The sale of Princeton  for  $10,000,000  in June 2004  generated a capital
loss for federal  income tax purposes of  approximately  $67,000,000  and a book
gain of approximately $5,817,000 during the year ended December 31, 2004.

DERIVATIVE SETTLEMENT COSTS

      On April 13, 2006, the Company announced that it reached an agreement with
all of the parties to the  Lawsuit to settle all claims  relating  thereto.  The
total Settlement  proceeds of $3,200,000 were funded by the Company's  insurance
carrier and by Parris H. Holmes,  Jr.,  the  Company's  former  Chief  Executive
Officer,  who  contributed  $150,000.  Also  included  in the  total  Settlement
proceeds is $600,000 of reimbursement  for legal and  professional  fees paid to
the Company by its insurance carrier and subsequently contributed by the Company
to the  Settlement  Fund.  The  Company  has  recognized  a net loss of $600,000
related to the Lawsuit for the year ended December 31, 2006.

INCOME TAXES

      As a result of the operating losses incurred in recent years, no provision
or benefit for income taxes was recorded for the years ended  December 31, 2006,
2005 and 2004.


                                       17


LIQUIDITY AND CAPITAL RESOURCES

      The Company's cash balance  decreased to $12,319,000 at December 31, 2006,
from  $12,487,000  at December 31, 2005.  The  decrease is  attributable  to the
following:  G&A  expenses  incurred  during the year ended  December  31,  2006;
funding of legal and  professional  fees related to the Lawsuit,  including  the
$600,000 of reimbursement for legal and professional fees paid to the Company by
its insurance  carrier which was subsequently  contributed by the Company to the
Settlement  Fund;  the  settlement  of a dispute with a former  employee  over a
severance  agreement;  the second installment paid under the Ascendant Agreement
and a cash dividend paid on the Series A Preferred  Stock;  partially  offset by
interest  income,  revenues  from  Ascendant  and  settlement  proceeds from the
resolution  of a dispute with a law firm that had  previously  been hired by the
Company.  There were no capital  expenditures  during  the twelve  months  ended
December 31, 2006.

      In connection  with the resolution of the Lawsuit,  the Company has ceased
funding  of legal and  professional  fees of the  current  and  former  director
defendants.  The  funding of legal and  professional  fees was made  pursuant to
indemnification  arrangements  that were in place during the respective terms of
each of the defendants. The Company has met the $500,000 retention as stipulated
in the  Company's  directors'  and officers'  liability  insurance  policy.  The
directors' and officers'  liability  insurance policy carries a maximum coverage
limit of  $5,000,000.  As of December  31,  2006,  the  Company  has  recorded a
receivable   from  the   insurance   carrier  of   approximately   $300,000  for
reimbursement  of legal and  professional  fees incurred in excess of the policy
retention,  net of the $600,000 reimbursement from the insurance carrier as part
of the  Settlement.  The Company is currently  negotiating a settlement with the
insurance carrier with respect to remaining  reimbursement  amounts. The Company
is vigorously  pursuing  enforcement of its rights under the policy and believes
its claims to be valid.  The  Settlement  does not  preclude  the  Company  from
seeking  reimbursement of legal and professional fees up to the amount remaining
within the policy limit.

      During the next 12 months,  the Company's  operating cash requirements are
expected  to  consist  principally  of  funding  corporate  expenses,  the costs
associated with  maintaining a public company and expenses  incurred in pursuing
the Company's  business plan.  Additionally,  the total potential purchase price
under the terms of the Ascendant Agreement was $1,550,000, payable in four equal
installments of $387,500.  Subject to the provisions of the Ascendant Agreement,
the third  installment  was payable on April 5, 2006 and the fourth  installment
was payable on July 5, 2006. On April 5, 2006,  the Company  elected not to make
the  April  installment  payment  and  subsequently  determined  not to make the
installment  payment  due July 5, 2006.  Subject  to the terms of the  Ascendant
Agreement,  if the Company does not make an installment payment and Ascendant is
not in breach of the Ascendant Agreement, Ascendant has the right to acquire the
Company's  revenue interest at a price which would yield a 10% annualized return
to the Company.  The Company has been  notified by Ascendant  that  Ascendant is
exercising  this  right as a result of the  Company's  election  not to make its
third and fourth installment  payments.  The Company believes that Ascendant has
not  satisfied the requisite  conditions  to  repurchase  the Company's  revenue
interest,  including as a result of Ascendant's failure to make required revenue
sharing  payments for the quarters  ended June 30, 2006,  September 30, 2006 and
December 31, 2006, and at this time the Company  believes it is not obligated to
make the third and fourth  installment  payments  to  Ascendant.  As part of the
parties'  discussions  regarding  non-payment  of  amounts  under the  Ascendant
Agreement by each party, the Company has proposed an amendment that would permit
Ascendant to temporarily  defer certain  payments to the Company,  including the
payments owed in respect of the quarters ended June 30, 2006, September 30, 2006
and December 31, 2007.  There is no assurance that an amendment will be effected
on such terms or that any  resolution of the  foregoing  matter will be reached.
The Company  expects to incur  additional  operating  losses through fiscal 2007
which  will  continue  to  have a  negative  impact  on  liquidity  and  capital
resources.


                                       18


LEASE GUARANTEES

      In October 2000, the Company completed the Platinum Transaction. Under the
terms of the  Platinum  Transaction,  all leases and  corresponding  obligations
associated with the Transaction Processing and Software Business were assumed by
Platinum.  Prior  to  the  Platinum  Transaction,  the  Company  guaranteed  two
operating leases for office space of the divested companies.  The first lease is
related to office space located in San Antonio,  Texas, and expired in 2006. The
second lease is related to office space located in Austin, Texas, and expires in
2010.  Under the  original  terms of the second  lease,  the  remaining  minimum
undiscounted rent payments total approximately  $4,255,000 at December 31, 2006.
In conjunction with the Platinum  Transaction,  Platinum agreed to indemnify the
Company should the underlying operating companies not perform under the terms of
the office  leases.  The  Company  can  provide no  assurance  as to  Platinum's
ability, or willingness,  to perform its obligations under the  indemnification.
The Company does not believe it is probable  that it will be required to perform
under the  remaining  lease  guarantee  and,  therefore,  no liability  has been
accrued in the Company's financial statements.

OFF-BALANCE-SHEET ARRANGEMENTS

      The Company  guaranteed two operating  leases for office space for certain
of  its  wholly-owned  subsidiaries  prior  to  the  Platinum  Transaction  (see
Liquidity and Capital Resources-Lease  Guarantees above). One such lease expired
in 2006.

CONTRACTUAL OBLIGATIONS

      The Company's contractual obligations are as follows (in thousands):

                                                     Payments Due by Period
                                         ---------------------------------------------
                                                 Less than    1-3     3-5    More than
    Contractual Obligations               Total    1 Year    Years   Years    5 Years
-------------------------------------    ------    ------    -----   -----    -------

Long-term debt obligations ............     $--     $--     $--      $--        $--
Capital lease obligations .............      --      --      --       --         --
Operating lease obligations ...........      6       6       --       --         --
Purchase obligations ..................      --      --      --       --         --
Other long-term liabilities
 reflected on balance sheet
 under GAAP ...........................      --      --      --       --         --
                                           ----    ----     ----     ----       ----
Total .................................     $6      $6      $--      $--        $--
                                           ====    ====     ====     ====       ====

      The operating lease obligations reflected in the table above represent the
Company's  lease for office  space,  which is discussed  further under Item 2 of
this annual report.

SEASONALITY

      The  Company's  current  operations  are  not  significantly  affected  by
seasonality.

EFFECT OF INFLATION

      Inflation has not been a material factor affecting the Company's business.
General operating expenses, such as salaries,  employee benefits,  insurance and
occupancy costs, are subject to normal inflationary pressures.


                                       19


NEW ACCOUNTING STANDARDS

      In June 2006, the Financial Accounting Standards Board ("FASB") issued FIN
48,  "Accounting  for  Uncertainty in Income  Taxes--an  interpretation  of FASB
Statement No. 109," which seeks to reduce the  diversity in practice  associated
with the accounting and reporting for uncertainty in income tax positions.  This
Interpretation  prescribes a  comprehensive  model for the  financial  statement
recognition, measurement, presentation and disclosure of uncertain tax positions
taken or expected to be taken in an income tax return.

      FIN 48 presents a two-step  process for  evaluating  a tax  position.  The
first  step  is to  determine  whether  it is  more-likely-than-not  that  a tax
position will be sustained upon  examination,  based on the technical  merits of
the position.  The second step is to measure the benefit to be recorded from tax
positions  that  meet  the   more-likely-than-not   recognition  threshold,   by
determining  the largest  amount of tax benefit  that is greater than 50 percent
likely of being realized upon ultimate  settlement,  and recognizing that amount
in the  financial  statements.  FIN 48 is effective  for fiscal years  beginning
after  December 15, 2006.  The Company does not expect the adoption of FIN 48 to
have a material  impact on its  consolidated  results of  operations,  financial
position, and cash flows.

      In September 2006, the SEC issued Staff  Accounting  Bulletin  ("SAB") No.
108,  "Considering  the  Effects of Prior Year  Misstatements  when  Quantifying
Misstatements in Current Year Financial  Statements".  SAB No. 108 was issued in
order to eliminate the diversity in practice  surrounding  how public  companies
quantify  financial   statement   misstatements.   SAB  No.  108  requires  that
registrants  quantify errors using both a balance sheet (iron curtain)  approach
and an income  statement  (rollover)  approach and then evaluate  whether either
approach results in a misstated amount that, when all relevant  quantitative and
qualitative  factors are considered,  is material.  SAB No. 108 is effective for
fiscal years ending after  November 15, 2006.  The Company  adopted the bulletin
during 2006. See Note 15 of the accompanying Consolidated Financial Statements.

      FASB Statement of Financial  Accounting  Standards  ("SFAS") No. 157, Fair
Value Measurements, issued in September 2006, establishes a formal framework for
measuring fair value under GAAP. It defines and codifies the many definitions of
fair value included among various other authoritative literature, clarifies and,
in  some  instances,  expands  on  the  guidance  for  implementing  fair  value
measurements,  and  increases  the level of  disclosure  required for fair value
measurements.  Although  SFAS No. 157  applies to and amends the  provisions  of
existing FASB and AICPA pronouncements,  it does not, of itself, require any new
fair value measurements, nor does it establish valuation standards. SFAS No. 157
applies to all other  accounting  pronouncements  requiring or  permitting  fair
value  measurements,  except  for:  SFAS No. 123 (R),  share-based  payment  and
related   pronouncements,   the   practicability   exceptions   to  fair   value
determinations allowed by various other authoritative pronouncements,  and AICPA
Statements  of  Position   97-2  and  98-9  that  deal  with  software   revenue
recognition.  This  statement is effective for financial  statements  issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. The Company does not expect the adoption of SFAS No. 157 to have a
material impact on its consolidated  results of operations,  financial position,
and cash flows.


                                       20


CRITICAL ACCOUNTING POLICIES

IMPAIRMENT OF INVESTMENTS

      The Company evaluates its investments in affiliates when events or changes
in circumstances,  such as a significant  economic  slowdown,  indicate that the
carrying value of the investments may not be recoverable.  Reviews are performed
to  determine  whether  the  carrying  value is impaired  and if the  comparison
indicates that impairment  exists, the investment is written down to fair value.
Significant  management  judgment  based on  estimates  is required to determine
whether and how much an investment is impaired.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company is exposed to interest rate risk through its portfolio of cash
equivalents and short-term investments. The Company does not believe that it has
significant  exposure to market risks associated with changing interest rates as
of December 31, 2006,  because the  Company's  intention is to maintain a liquid
portfolio.  The Company has not used  derivative  financial  instruments  in its
operations.


                                       21


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The  Consolidated  Financial  Statements  of the  Company  and the related
reports of the Company's independent  registered public accounting firm thereon,
are included in this report at the page indicated.

                                                                        Page
                                                                        ----
Report of Management.................................................... 23
Report of Independent Registered Public Accounting Firm................. 24
Consolidated Balance Sheets as of December 31, 2006 and 2005............ 25
Consolidated Statements of Operations for the Years Ended
  December 31, 2006, 2005 and 2004.......................................26
Consolidated Statements of Stockholders' Equity for the Years Ended
  December 31, 2006, 2005 and 2004...................................... 27
Consolidated Statements of Cash Flows for the Years Ended
   December 31, 2006, 2005 and 2004......................................28
Notes to Consolidated Financial Statements.............................. 29


                                       22


                              REPORT OF MANAGEMENT

      The financial  statements included herein have been prepared in conformity
with accounting  principles  generally accepted in the United States of America.
Management is responsible for preparing the  consolidated  financial  statements
and  maintaining  and  monitoring  the Company's  system of internal  accounting
controls.  The Company  believes that the existing  system of internal  controls
provides  reasonable  assurance  that  errors or  irregularities  that  could be
material to the  financial  statements  are  prevented or would be detected in a
timely manner. Key elements of the Company's system of internal controls include
careful   selection  of  management   personnel,   appropriate   segregation  of
conflicting  responsibilities,  periodic  evaluations  of Company  financial and
business practices, communication practices that provide assurance that policies
and managerial  authorities are understood  throughout the Company, and periodic
meetings  between the Company's audit  committee,  senior  financial  management
personnel and independent public accountants.

      The  consolidated  financial  statements  as of and  for the  years  ended
December 31, 2006 and 2005,  were audited by Burton  McCumber & Cortez,  L.L.P.,
independent  public   accountants,   who  have  also  issued  a  report  on  the
consolidated financial statements.

/s/ STEVEN J. PULLY
--------------------------
Steven J. Pully
   CHIEF EXECUTIVE OFFICER


/s/ JOHN P. MURRAY
--------------------------
John P. Murray
  CHIEF FINANCIAL OFFICER


                                       23


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
New Century Equity Holdings Corp.

We have  audited the  accompanying  consolidated  balance  sheets of New Century
Equity Holdings Corp. (a Delaware  corporation)  and Subsidiaries as of December
31,  2006 and 2005,  and the  related  consolidated  statements  of  operations,
stockholders'  equity and cash flows for the years ended December 31, 2006, 2005
and 2004.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting  Oversight  Board (U.S.).  Those  standards  require that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of New
Century Equity Holdings Corp. and Subsidiaries as of December 31, 2006 and 2005,
and the  consolidated  results of their operations and their  consolidated  cash
flows for the years ended  December 31, 2006,  2005 and 2004 in conformity  with
accounting principles generally accepted in the United States of America.

                                       /s/ BURTON McCUMBER & CORTEZ, L.L.P.

Brownsville, Texas
March 7, 2007


                                       24


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

                                                                             December 31,
                                                                         2006           2005
                                                                     -----------    -----------

                                               ASSETS

Current assets:
  Cash and cash equivalents ......................................   $    12,319    $    12,487
  Accounts receivable ............................................          --               33
  Insurance receivable and other assets ..........................           368          1,637
                                                                     -----------    -----------

    Total current assets .........................................        12,687         14,157

Other non-current assets .........................................          --                6
Revenue interest .................................................           803            415
                                                                     -----------    -----------

     Total assets ................................................   $    13,490    $    14,578
                                                                     ===========    ===========

                               LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable ...............................................   $        13    $        53
  Accrued liabilities ............................................           161            550
                                                                     -----------    -----------

    Total current liabilities ....................................           174            603
Other non-current liabilities ....................................          --                2
                                                                     -----------    -----------

       Total liabilities .........................................           174            605
Commitments and contingencies
Stockholders' equity:
  Preferred stock, $0.01 par value,  10,000,000 shares authorized;
    4,807,692 Shares designated as Series A convertible preferred
    stock issued and outstanding in 2005 .........................          --               48
  Common stock, $0.01 par value, 75,000,000 shares authorized;
    53,883,872 and 34,653,104 shares issued and outstanding ......           539            347
  Additional paid-in capital .....................................        75,340         75,428
  Accumulated deficit ............................................       (62,563)       (61,850)
    Total stockholders' equity ...................................        13,316         13,973
                                                                     -----------    -----------

         Total liabilities and stockholders' equity ..............   $    13,490    $    14,578
                                                                     ===========    ===========


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


                                                 25


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

                                                                    Year Ended December 31,
                                                               2006          2005          2004
                                                             ---------     --------     ---------

Operating revenues ........................................  $     69      $     33           $-

Operating expenses:
  General and administrative expenses .....................       642         1,035        4,826
  Depreciation and amortization expense ...................      --               7           28
                                                             --------      --------     --------

Operating loss ............................................      (573)       (1,009)      (4,854)

Other income (expense):
 Derivative settlement costs ..............................      (600)         --           --
 Interest income ..........................................       582           423          121
 Equity in net loss of affiliates .........................      --            --         (2,985)
 Gain on sale of equity affiliate .........................      --
                                                                               --          5,817
 Other, net ...............................................      --              43           (2)
                                                             --------      --------     --------

Total other income (expense), net .........................       (18)          466        2,951
                                                             --------      --------     --------

Net loss ..................................................      (591)         (543)      (1,903)

Preferred stock dividend ..................................      (100)         (200)        (107)

Net loss applicable to common stockholders ................  $   (691)     $   (743)    $ (2,010)
                                                             ========      ========     ========

Basic and diluted net (loss) income per common share:
 Net loss .................................................  $   (.02)     $   (.02)    $   (.06)
                                                             ========      ========     ========

Weighted average common shares outstanding ................    44,268        34,653       34,653
                                                             ========      ========     ========


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


                                                 26


                                         NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                        for the Years Ended December 31, 2006, 2005 and 2004
                                                           (In thousands)

                                                                                                                Accumulated
                                                               Additional                                          Other
                                               Common Stock      Paid-in   Accumulated      Preferred Stock    Comprehensive
                                             Shares   Amount     Capital     Deficit       Shares      Amount      Income     Total
                                             ------   ------     -------     -------       ------      ------      ------     ------

Balances at December 31, 2003 ...........  34,653        347     70,476     (59,097)       --          --          --        11,726
  Issuance of preferred stock ...........    --         --        4,952        --         4,808          48        --         5,000
  Comprehensive income (loss):
      Unrealized gain on investment .....    --         --         --          --          --          --            49          49
      Net loss applicable to common
       stockholders .....................    --         --         --        (2,010)       --          --          --        (2,010)
  Comprehensive loss ....................    --         --         --        (2,010)       --          --            49      (1,961)
                                           ------   --------     ------     -------       -----       ----       ----      ---------

Balances at December 31, 2004 ...........  34,653        347     75,428     (61,107)      4,808          48          49      14,765
  Comprehensive income (loss):
      Reclassification of unrealized
        gain on investment ..............    --         --         --          --          --          --           (49)        (49)
      Net loss applicable to common
       stockholders .....................    --         --         --          (743)       --          --          --          (743)
  Comprehensive loss ....................    --         --         --          (743)       --          --           (49)       (792)
                                           ------   --------     ------     -------       -----       ----       ----      ---------

Balances at December 31, 2005 ...........  34,653        347     75,428     (61,850)      4,808          48        --        13,973
                                           ------   --------     ------     -------       -----       ----       ----      ---------

SAB 108 cumulative effect adjustment
 (note 15) ..............................    --         --           22         (22)       --          --          --          --
                                           ------   --------     ------     -------       -----       ----       ----      ---------

Balance January 1, 2006, as adjusted ....  34,653        347     75,450     (61,872)      4,808          48        --          --
                                           ------   --------     ------     -------       -----       ----       ----      ---------

Fair market value of services ...........    --         --           17        --          --          --          --            17
Share based payment expense .............    --         --           17        --          --          --          --            17
Comprehensive income (loss):
     Conversion of preferred stock ......  19,231        192       (144)       --        (4,808)        (48)       --          --
      Net loss applicable to common
       stockholders .....................    --         --         --          (691)       --          --          --          (691)
 Comprehensive loss .....................    --         --         --          (691)       --          --          --          (691)
                                           ------   --------     ------     -------       -----       ----       ----      ---------
Balances at December 31, 2006 ...........  53,884   $    539   $ 75,340    $(62,563)       --          --        $ --      $ 13,316
                                           ======   ========     ======    ========       =====       ====       ====      ========


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


                                                                 27


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

                                                                                      Year Ended December 31,
                                                                                2006             2005              2004
                                                                              ---------        ---------        ---------

Cash flows from operating activities:
  Net loss ................................................................   $   (591)        $   (543)        $ (1,903)
  Adjustments to reconcile net loss to
   net cash provided by (used in) operating activities:
   Depreciation and amortization expense ..................................       --                  7               27
   Equity in net loss of and impairment of investments in affiliates ......       --               --              2,985
   Gain on sale of equity affiliate .......................................       --               --             (5,817)
   Loss on sale of treasury bill ..........................................       --                 14             --
   Gain on sale of Sharps Compliance Corp. common stock ...................       --                (57)            --
   Share based payment expense ............................................         17             --               --
   Charge off of revenue interest receivable ..............................         34             --               --
   Fair market value of services ..........................................         17
   Loss on disposition of fixed assets ....................................       --               --                 30
   Accretion of discount on securities ....................................       --               (185)             (36)
   Changes in operating assets and liabilities:
    (Increase) decrease in accounts receivable ............................         (1)             (33)              28
    (Increase) decrease in insurance receivable and other assets ..........      1,275           (1,492)             171
    Increase (decrease) in accounts payable ...............................        (40)               8              (13)
    Increase (decrease) in accrued liabilities ............................       (284)             267             (687)
                                                                              --------         --------         --------

Net cash provided by (used in) operating activities .......................        427           (2,014)          (5,215)

Cash flows from investing activities:
  Purchases of property and equipment .....................................       --               --                 (3)
  Proceeds from sale of short-term investments ............................       --             27,186             --
  Purchase of short-term investments ......................................       --            (13,786)         (12,858)
  Purchase of revenue interest ............................................       (388)            (415)
  Proceeds from sale of equity affiliate (all holdings in Princeton) ......       --               --             10,000
  Proceeds from sale of equity affiliate (all holdings in Princeton)
  allocated to former chief executive officer .............................       --               --               (600)
  Other investing activities ..............................................       --               --                 62
                                                                              --------         --------         --------

Net cash provided by (used in) investing activities .......................       (388)          12,985           (3,399)

Cash flows from financing activities:
  Cash dividends paid on preferred stock ..................................       (207)            (200)            --
  Proceeds from sale of preferred stock ...................................       --               --              5,000
                                                                              --------         --------         --------

Net cash used in financing activities .....................................       (207)            (200)           5,000
                                                                              --------         --------         --------

Net increase (decrease) in cash and cash equivalents ......................       (168)          10,771           (3,614)
Cash and cash equivalents, beginning of period ............................     12,487            1,716            5,330
                                                                              --------         --------         --------

Cash and cash equivalents, end of period ..................................   $ 12,319         $ 12,487         $  1,716
                                                                              ========         ========         ========

Supplemental disclosure of non-cash transactions:
 Increase in fair market value of investments .............................   $   --           $   --           $     49
 Preferred stock dividend .................................................   $    107         $   --           $    107


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


                                                            28


               NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2005, 2004 and 2003

NOTE 1.  BUSINESS ACTIVITY

      New Century Equity Holdings Corp. is a company in transition.  The Company
is currently seeking to redeploy its assets to enhance  stockholder value and is
actively  seeking,  analyzing and evaluating  potential  acquisition  and merger
candidates.  On  October  5,  2005,  the  Company  made  an  investment  in  ACP
Investments L.P. (d/b/a Ascendant Capital Partners) ("Ascendant").  Ascendant is
a Berwyn,  Pennsylvania  based alternative asset management  company whose funds
have investments in long/short equity funds and which distributes its registered
funds primarily through various financial intermediaries and related channels.

      The Company,  which was formerly known as Billing Concepts Corp.  ("BCC"),
was  incorporated  in the  state of  Delaware  in  1996.  BCC was  previously  a
wholly-owned  subsidiary of U.S. Long Distance  Corp.  ("USLD") and  principally
provided third-party billing  clearinghouse and information  management services
to the  telecommunications  industry (the  "Transaction  Processing and Software
Business").   Upon  its  spin-off   from  USLD,   BCC  became  an   independent,
publicly-held  company.  In October  2000,  the  Company  completed  the sale of
several wholly-owned  subsidiaries that comprised the Transaction Processing and
Software  Business  to  Platinum  Holdings  ("Platinum")  for  consideration  of
$49,700,000  (the "Platinum  Transaction").  The Company also received  payments
totaling  $7,500,000  for  consulting  services  provided to  Platinum  over the
twenty-four month period subsequent to the Platinum Transaction.

      Beginning in 1998, the Company made multiple investments in Princeton eCom
Corporation  ("Princeton") totaling approximately $77,300,000 before selling all
of its interest for $10,000,000 in June 2004. The Company's strategy,  beginning
with its investment in Princeton, of making investments in high-growth companies
was also facilitated through several other investments.

      In early  2004,  the  Company  announced  that it would  seek  stockholder
approval to liquidate  the Company.  In June of 2004,  the board of directors of
the Company  determined  that it would be in the best interest of the Company to
accept an investment from Newcastle Partners, L.P. ("Newcastle"),  an investment
fund with a long track record of investing in public and private  companies.  On
June 18, 2004, the Company sold 4,807,692 newly issued shares of its Series A 4%
Convertible  Preferred  Stock (the "Series A Preferred  Stock") to Newcastle for
$5,000,000  (the  "Newcastle  Transaction").  The Series A  Preferred  Stock was
convertible into approximately  thirty-five  percent of the Common Stock, at any
time after the  expiration  of twelve  months from the date of its issuance at a
conversion  price of $0.26 per share of Common Stock,  subject to adjustment for
dilution.  The holders of the Series A Preferred  Stock were  entitled to a four
percent  annual  cash  dividend  (the  "Preferred  Dividends").   Following  the
investment by Newcastle,  the  management  team resigned and new  executives and
board members were appointed.  On July 3, 2006, Newcastle converted its Series A
Preferred Stock into 19,230,768 shares of Common Stock.

      During May 2005, the Company sold its equity interest in Sharps Compliance
Corp.  ("Sharps") for approximately  $334,000.  Following the sale of its Sharps
interest,  the Company no longer holds any investments made by former management
and which  reflected  former  management's  strategy of investing in high-growth
companies.

      On August 11, 2004,  Craig Davis,  allegedly a stockholder of the Company,
filed a lawsuit  in the  Chancery  Court of New  Castle  County,  Delaware  (the
"Lawsuit").  The Lawsuit asserted direct claims,  and also derivative  claims on
the Company's  behalf,  against five former and three  current  directors of the
Company.  On April 13, 2006, the Company  announced that it reached an agreement
with all of the  parties to the  Lawsuit to settle all claims  relating  thereto
(the  "Settlement").   On  June  23,  2006,  the  Chancery  Court  approved  the
Settlement, and on July 25, 2006, the Settlement became final and non-appealable
(See Note 6).


                                       29


NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

      The accompanying consolidated financial statements include the accounts of
the Company, its wholly owned subsidiaries and subsidiaries in which the Company
is deemed to have control for accounting  purposes.  The Company's investment in
Princeton was accounted for using the equity method of accounting. The Company's
investment in Sharps was accounted for in accordance with Statement of Financial
Accountings   Standards  No.  115  (SFAS  No.  115),   "Accounting  for  Certain
Investments  in  Debt  and  Equity  Securities".  All  significant  intercompany
accounts and transactions have been eliminated in consolidation.

ESTIMATES IN THE FINANCIAL STATEMENTS

      The  preparation  of financial  statements in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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.

CASH AND CASH EQUIVALENTS

      The  Company  considers  all  highly  liquid   investments  with  original
maturities of three months or less to be cash and cash equivalents.

REVENUE RECOGNITION

      The Company's  consolidated  revenues  represent  revenue from the revenue
interest in  Ascendant.  Such  revenues are  recognized  monthly as services are
rendered  and are based upon a  percentage  of the market  value of assets under
management (see Note 3).

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

      Accounts  receivable are accounted for at fair value, do not bear interest
and are  short-term in nature.  The Company  maintains an allowance for doubtful
accounts  for  estimated  losses  resulting  from the  inability  to  collect on
accounts receivables. Based on management's assessment, the Company provides for
estimated uncollectible amounts through a charge to earnings and a credit to the
valuation allowance. Balances that remain outstanding after the Company has used
reasonable  collection efforts are written off through a charge to the valuation
allowance and a credit to accounts  receivable.  The Company  generally does not
require collateral.

FINANCIAL INSTRUMENTS

      SFAS No. 107,  "Disclosures  About Fair Value of  Financial  Instruments",
requires the disclosure of fair value information  about financial  instruments,
whether or not recognized on the balance  sheet,  for which it is practicable to
estimate the value. SFAS No. 107 excludes certain financial instruments from its
disclosure  requirements.  Accordingly,  the aggregate fair market value amounts
are not intended to represent the underlying value of the Company.  The carrying
amounts of cash and cash  equivalents,  current  receivables  and  payables  and
long-term  liabilities  approximate  fair  value  because of the nature of these
instruments.


                                       30


REVENUE INTEREST

      The Company has determined  that the revenue  interest that it acquired in
2005 meets the indefinite life criteria outlined in SFAS No. 142,  "Goodwill and
Other  Intangible  Assets"  ("SFAS  142").  Accordingly,  the  Company  does not
amortize this  intangible  asset,  but instead  reviews this asset quarterly for
impairment.  Each  reporting  period,  the Company  assesses  whether  events or
circumstances have occurred which indicate that the indefinite life criteria are
no longer met. If the  indefinite  life  criteria are no longer met, the Company
assesses  whether the carrying value of the asset exceeds its fair value, and an
impairment loss is recorded in an amount equal to any such excess.

      The  Company  assesses  whether the entity in which the  acquired  revenue
interest  exists meets the indefinite life criteria based on a number of factors
including:  the  historical  and potential  future  operating  performance;  the
historical and potential future rates of attrition among existing  clients;  the
stability and longevity of existing client relationships; the recent, as well as
long-term,  investment  performance;  the characteristics of the firm's products
and investment  styles;  the stability and depth of the management  team and the
history and perceived franchise or brand value.

INVESTMENTS IN EQUITY SECURITIES

      The Company follows the standards of SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity  Securities," for those  investments in which the
securities are publicly  traded.  For those  investments in which the securities
are privately  held, the Company  follows the guidance of Accounting  Principles
Board ("APB")  Opinion No. 18, "The Equity Method of Accounting for  Investments
in Common Stock".  The Company accounted for its investment in Sharps under SFAS
No. 115, as Sharps' common stock is publicly  traded.  SFAS No. 115  establishes
standards for accounting and reporting for investments in equity securities that
have  readily   determinable  fair  values  and  for  all  investments  in  debt
securities.  Unrealized  holdings gains and losses,  other than those considered
permanent,  related to the Company's  investment in Sharps are excluded from net
loss and reported as a separate component of other comprehensive income.

SHORT-TERM INVESTMENTS

      The  Company  invests  its  excess  cash in money  market  accounts,  U.S.
Treasury bills,  and short-term debt  securities.  Investments  with an original
maturity  at the time of  purchase  over  three  months but less than a year are
classified as short-term  investments.  Investments with an original maturity at
the time of  purchase  of  greater  than one year are  classified  as  long-term
investments. Management determines the appropriate classification of investments
at the time of purchase and  reevaluates  such  designations  at the end of each
period.

CONCENTRATIONS OF CREDIT RISK

      Financial  instruments that potentially subject the Company to significant
concentrations  of credit risk  consist  principally  of cash  investments.  The
Company  maintains cash and cash  equivalents and short-term  investments.  Cash
deposits at a financial institution may from time to time exceed Federal Deposit
Insurance Corporation insurance limits.

TREASURY STOCK

      In 2000,  the  Company's  board of  directors  approved  the adoption of a
common stock repurchase program. Under the terms of the program, the Company may
purchase an  aggregate  $25,000,000  of the  Company's  Common Stock in the open
market or in privately negotiated transactions.  The Company records repurchased
Common Stock at cost (see Note 8).


                                       31


INCOME TAXES

      Deferred tax assets and  liabilities  are recorded based on enacted income
tax rates that are  expected to be in effect in the period in which the deferred
tax asset or liability  is expected to be settled or  realized.  A change in the
tax  laws or rates  results  in  adjustments  to the  deferred  tax  assets  and
liabilities.  The  effects of such  adjustments  are  required to be included in
income in the period in which the tax laws or rates are changed.

RECLASSIFICATIONS

      Certain amounts have been reclassified in the prior year to conform to the
current year presentation.

NET LOSS PER COMMON SHARE

      SFAS No. 128,  "Earnings Per Share",  establishes  standards for computing
and presenting earnings per share ("EPS") for entities with publicly-held common
stock or potential  common stock.  As the Company had a net loss from continuing
operations  for the years ended  December 31, 2006,  2005 and 2004,  diluted EPS
equals  basic  EPS,  as  potentially   dilutive  common  stock  equivalents  are
anti-dilutive in loss periods.

STOCK-BASED COMPENSATION

      Effective January 1, 2006, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 123(R),  "Share-Based Payment" (SFAS 123R)
using the modified prospective transition method. Under this method,  previously
reported  amounts should not be restated to reflect the provisions of SFAS 123R.
SFAS 123R  requires  the Company to record  compensation  expense for all awards
granted after the date of adoption,  and for the unvested  portion of previously
granted awards that remain  outstanding at the date of adoption.  The fair value
concepts have not changed  significantly in SFAS 123R; however, in adopting this
standard,   companies  must  choose  among  alternative   valuation  models  and
amortization  assumptions.  After  assessing  alternative  valuation  models and
amortization assumptions, the Company will continue using both the Black-Scholes
valuation model and straight-line  amortization of compensation expense over the
requisite  service period for each separately  vesting portion of the grant. The
Company will  reconsider  use of this model if  additional  information  becomes
available in the future that indicates  another model would be more appropriate,
or if grants  issued in  future  periods  have  characteristics  that  cannot be
reasonably  estimated using this model. The Company utilizes  stock-based awards
as a form of compensation for employees, officers and directors.

      The fair value of the stock option  grants  included in the  Company's net
loss totaled  approximately  $17,000 for the year ended  December 31, 2006.  The
expense relates to the unvested portion of previously granted awards that remain
outstanding at the date of adoption.

      Previously,   the  Company  had  applied  the   provisions  of  Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB
25) and related  interpretations and elected to utilize the disclosure option of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123).


                                       32


      For the year ended  December 31, 2005 and December 31, 2004, the following
table  illustrates  the  effect  on net loss and net loss per  common  share had
compensation expense for the Company's stock option grants been determined based
on the fair value at the grant dates consistent with the methodology of SFAS No.
123 and SFAS No. 148, "Accounting for Stock-Based  Compensation - Transition and
Disclosure". For purposes of the pro forma disclosures, the estimated fair value
of options is  amortized  to pro forma  compensation  expense  over the options'
vesting periods.

                                                                       Year Ended December 31,
(in thousands, except per share data)                                    2005          2004
                                                                       ---------     --------
Net loss, as reported ..............................................   $  (743)      $(1,903)
Less:  Total stock based employee compensation expense
  determined under the fair value based method for all awards,
  net of related tax effects .......................................       (32)         (100)
                                                                       -------       -------
Net loss, pro forma ................................................   $  (775)      $(2,003)
                                                                       =======       =======

Basic and diluted net loss per common share:
  Net loss, as reported ............................................   $ (0.02)      $ (0.06)
                                                                       =======       =======
  Net loss, pro forma ..............................................   $ (0.02)      $ (0.06)
                                                                       =======       =======

      The fair value for these  options was  estimated at the  respective  grant
dates using the Black-Scholes  option-pricing  model with the following weighted
average assumptions:  expected volatility of 99.2% and 99.2% for the years ended
December 31, 2005 and 2004,  respectively;  no dividend yield;  expected life of
2.5 years and risk-free interest rates of 4.75% for the years ended December 31,
2005 and 2004, respectively.

NOTE 3. REVENUE INTEREST

      On October 5, 2005, the Company entered into the Ascendant  Agreement (the
"Agreement")  to acquire an interest in the  revenues  generated  by  Ascendant.
Pursuant to the Ascendant Agreement,  the Company is currently entitled to a 50%
interest,  subject to certain adjustments,  in the revenues of Ascendant,  which
interest  declines if the assets under  management  of Ascendant  reach  certain
levels.  Revenues  generated by  Ascendant  include  revenues  from assets under
management or any other sources or investments,  net of any agreed  commissions.
The Company  also agreed to provide  various  marketing  services to  Ascendant.
Steven J. Pully,  CEO of the Company,  was appointed to the Investment  Advisory
Committee of Ascendant.  The total  potential  purchase price under the terms of
the Ascendant  Agreement was $1,550,000,  payable in four equal  installments of
$387,500.  The  first  installment  was  paid  at the  closing  and  the  second
installment  was paid on  January  5, 2006.  Subject  to the  provisions  of the
Ascendant Agreement,  including  Ascendant's  compliance with the terms thereof,
the third  installment  was payable on April 5, 2006 and the fourth  installment
was payable on July 5, 2006. On April 5, 2006,  the Company  elected not to make
the  April  installment  payment  and  subsequently  determined  to not make the
installment payment due July 5, 2006.

      Subject to the terms of the Ascendant  Agreement,  if the Company does not
make an  installment  payment and  Ascendant  is not in breach of the  Ascendant
Agreement,  Ascendant has the right to acquire the Company's revenue interest at
a price which would yield a 10%  annualized  return to the Company.  The Company
has been  notified by Ascendant  that  Ascendant is  exercising  this right as a
result of the  Company's  election not to make its third and fourth  installment
payments.  The Company  believes that  Ascendant has not satisfied the requisite
conditions to repurchase the Company's revenue  interest,  including as a result
of  Ascendant's  failure  to make  required  revenue  sharing  payments  for the
quarters  ended June 30, 2006,  September 30, 2006 and December 31, 2006, and at
this time the Company  believes it is not obligated to make the third and fourth
installment payments to Ascendant.


                                       33


      Ascendant had assets under  management of  approximately  $27,100,000  and
$17,800,000 as of December 31, 2006 and December 31, 2005,  respectively.  Under
the  Ascendant  Agreement,  revenues  earned by the Company  from the  Ascendant
revenue  interest (as  determined in accordance  with the terms of the Ascendant
Agreement)  are  payable in cash  within 30 days after the end of each  quarter.
Under the terms of the  Ascendant  Agreement,  Ascendant  has 45 days  following
notice by the Company to cure any material  breach by Ascendant of the Ascendant
Agreement,  including with respect to payment  obligations.  Ascendant failed to
make the required revenue sharing payments for the quarters ended June 30, 2006,
September  30, 2006 and  December  31, 2006 in a timely  manner and did not cure
such  failure  within  the 45 day  period.  Under  the  terms  of the  Ascendant
Agreement,  upon notice of an uncured material breach,  Ascendant is required to
fully refund all amounts paid by the Company, and the Company's revenue interest
remains outstanding.

      As part of the parties' discussions regarding non-payment of amounts under
the  Ascendant  Agreement  by each party,  the Company has proposed an amendment
that would  permit  Ascendant  to  temporarily  defer  certain  payments  to the
Company,  including  the payments  related to the quarters  ended June 30, 2006,
September  30,  2006  and  December  31,  2006.  There is no  assurance  that an
amendment will be effected on such terms or that any resolution of the foregoing
matter will be reached.

      Based on the parties' discussions, the Company has charged off the revenue
interest  receivable  of  $34,000,  which was accrued by the Company at June 30,
2006 for its portion of the 50% revenue  interest for that quarter.  The Company
has not recorded any revenue or  corresponding  receivable for a revenue sharing
payment for the  quarters  ended  September  30,  2006 and  December  31,  2006.
According to the Agreement  with  Ascendant,  if Ascendant  acquires the revenue
interest  from the  Company,  Ascendant  must pay the  Company  a return  on the
capital that it invested.  Pursuant to the Agreement,  the required  return will
not be  impacted  by any  payments  missed by  Ascendant  or written  off by the
Company.

      In connection with the Ascendant Agreement,  the Company also entered into
the Principals  Agreement with  Ascendant and certain  limited  partners and key
employees of Ascendant (the  "Principals  Agreement")  pursuant to which,  among
other  things,  the  Company  has the  option to  purchase  limited  partnership
interests of Ascendant under certain circumstances. Effective March 14, 2006, in
accordance with the terms of the Principals Agreement, the Company acquired a 7%
limited  partnership  interest  from a limited  partner of Ascendant for nominal
consideration.   The  Principals   Agreement  contains  certain  noncompete  and
nonsolicitation obligations of the partners of Ascendant that apply during their
employment and the twelve month period following the termination thereof.

NOTE 4.  ACQUISITIONS AND INVESTMENTS

PRINCETON

      The Company made its initial  investment  in Princeton in September  1998.
Princeton was  previously a privately  held company  located in  Princeton,  New
Jersey,  that specialized in electronic bill  presentment and payment  solutions
utilizing  the  Internet and  telephone.  Beginning in 1998 and through 2003 the
Company  invested a total of  approximately  $77,300,000  in Princeton.  In June
2004, the Company sold all its interest in Princeton for  $10,000,000.  The sale
generated  a capital  loss for  federal  income tax  purposes  of  approximately
$67,000,000 and a book gain of approximately $5,800,000.

SHARPS

      In October 2001, the Company participated in a private placement financing
with publicly traded Sharps.  Sharps,  a Houston,  Texas-based  company provides
medical-related  waste  services  to the  healthcare,  retail,  residential  and
hospitality  markets.  The Company  purchased  700,000  shares of Sharps' common
stock for $770,000. In January 2003, the Company purchased an additional 200,000
shares of Sharps' common stock for $200,000.


                                       34


      In January  2004,  the Company  entered into an agreement  with the former
majority  stockholders of Operator  Service Company ("OSC") to settle all claims
related to the April 2000 acquisition of OSC by the Company.  Under the terms of
the agreement,  the Company transferred to the former OSC majority  stockholders
525,000  shares of the common stock of Sharps  owned by the  Company,  valued at
approximately  $389,000.  During the period  from April 1, 2005  through  May 5,
2005, the Company sold its equity interest in Sharps for approximately $334,000,
resulting in a $57,000 gain for financial reporting purposes.

NOTE 5.  ACCRUED LIABILITIES

      Accrued liabilities are comprised of the following:
                                                            December 31,
      (in thousands)                                     2006          2005
                                                        ------        ------
      Accrued public company cost ..................     $108          $129
      Accrued preferred stock dividend .............      --            107

      Accrued legal ................................       13           223
      Accrued settlement ...........................      --             85
      Other ........................................       40             6
                                                         ----          ----

        Total accrued liabilities ..................     $161          $550
                                                         ====          ====

      During  February 2006, the Company entered into an agreement with a former
employee to settle a dispute over a severance agreement the employee had entered
into with the  Company.  The  severance  agreement  which was executed by former
management  provided for a payment of approximately  $98,000 upon the occurrence
of certain events. The Company paid  approximately  $85,000 to settle all claims
associated with the severance agreement.

      During May 2006, the Company entered into an agreement to settle a dispute
with a law firm that had  previously  been hired by the Company.  In  accordance
with the terms of the  agreement,  the  Company  received  a refund of legal and
professional  fees of $125,000  during May 2006. In connection with this matter,
the  Company  reversed  accrued  legal and  professional  fees of  approximately
$38,000 during the quarter ended March 31, 2006.

NOTE 6.  COMMITMENTS AND CONTINGENCIES

      In October 2000, the Company completed the Platinum Transaction. Under the
terms of the  Platinum  Transaction,  all leases and  corresponding  obligations
associated with the Transaction Processing and Software Business were assumed by
Platinum.  Prior  to  the  Platinum  Transaction,  the  Company  guaranteed  two
operating leases for office space of the divested companies.  The first lease is
related to office space located in San Antonio,  Texas, and expired in 2006. The
second lease is related to office space located in Austin, Texas, and expires in
2010.  Under the  original  terms of the second  lease,  the  remaining  minimum
undiscounted rent payments total approximately  $4,255,000 at December 31, 2006.
In conjunction with the Platinum  Transaction,  Platinum agreed to indemnify the
Company should the underlying operating companies not perform under the terms of
the office  leases.  The  Company  can  provide no  assurance  as to  Platinum's
ability, or willingness,  to perform its obligations under the  indemnification.
The Company does not believe it is probable  that it will be required to perform
under the  remaining  lease  guarantee  and,  therefore,  no liability  has been
accrued in the Company's financial statements.


                                       35


      On August 11, 2004,  Craig Davis,  allegedly a stockholder of the Company,
filed a lawsuit  in the  Chancery  Court of New  Castle  County,  Delaware  (the
"Lawsuit").  The Lawsuit asserted direct claims,  and also derivative  claims on
the Company's  behalf,  against five former and three  current  directors of the
Company.  On April 13, 2006, the Company  announced that it reached an agreement
with all of the  parties to the  Lawsuit to settle all claims  relating  thereto
(the  "Settlement").   On  June  23,  2006,  the  Chancery  Court  approved  the
Settlement,   and  on  July  25,   2006,   the   Settlement   became  final  and
non-appealable.  As part  of the  Settlement,  the  Company  set up a fund  (the
"Settlement  Fund"),  which was distributed to stockholders of record as of July
28, 2006,  with a payment date of August 11, 2006. The portion of the Settlement
Fund  distributed to  stockholders  pursuant to the Settlement was $2,270,017 or
approximately $.04 per common share on a fully diluted basis,  provided that any
Common Stock held by defendants  in the Lawsuit who were  formerly  directors of
the Company would not be entitled to any distribution  from the Settlement Fund.
The total  Settlement  proceeds  of  $3,200,000  were  funded  by the  Company's
insurance  carrier and by Parris H.  Holmes,  Jr.,  the  Company's  former Chief
Executive  Officer,  who  contributed  $150,000.  Also  included  in  the  total
Settlement proceeds is $600,000 of reimbursement for legal and professional fees
paid to the Company by its insurance carrier and subsequently contributed by the
Company to the Settlement Fund. Therefore,  the Company has recognized a loss of
$600,000 related to the Lawsuit for the year ended December 31, 2006. As part of
the Settlement,  the Company and the other  defendants in the Lawsuit agreed not
to oppose the  request  for fees and  expenses  by counsel to the  plaintiff  of
$929,813.  Under  the  Settlement,  the  plaintiff,  the  Company  and the other
defendants  (including  Mr.  Holmes) also agreed to certain  mutual  releases of
claims arising out of transactions referenced in the Lawsuit.

      The  Settlement  provides that, if the Company has not acquired a business
that generates  revenues by the date of March 1, 2007,  the plaintiff  maintains
the right to pursue a claim to liquidate the Company.  This custodian  claim was
one of several claims  asserted in the Lawsuit.  Even if such a claim is elected
to be pursued,  there is no assurance that it will be  successful.  In addition,
the  Company  believes  that it has  preserved  its  right  to  assert  that the
Ascendant investment meets the foregoing requirement to acquire a business.

      In  connection  with the  resolution  of the Lawsuit,  the Company  ceased
funding  of legal and  professional  fees of the  current  and  former  director
defendants.  The  funding of legal and  professional  fees was made  pursuant to
indemnification  arrangements  that were in place during the respective terms of
each of the defendants. The Company has met the $500,000 retention as stipulated
in the  Company's  directors'  and officers'  liability  insurance  policy.  The
directors' and officers'  liability  insurance policy carries a maximum coverage
limit of  $5,000,000.  As of December  31,  2006,  the  Company  has  recorded a
receivable   from  the   insurance   carrier  of   approximately   $300,000  for
reimbursement  of legal and  professional  fees incurred in excess of the policy
retention,  net of the $600,000 reimbursement from the insurance carrier as part
of the  Settlement.  The Company is currently  negotiating a settlement with the
insurance carrier with respect to remaining  reimbursement  amounts. The Company
is vigorously  pursuing  enforcement of its rights under the policy and believes
its claims to be valid.  Nonpayment of the claim for  reimbursement of legal and
professional  fees  could  have a  material  adverse  effect on the  results  of
operations  of the Company.  The  Settlement  does not preclude the Company from
seeking  reimbursement of legal and professional fees up to the amount remaining
within the policy limit.

      Pursuant  to the sale of  4,807,692  newly  issued  shares of the Series A
Preferred  Stock to Newcastle on June 18, 2004,  the Company agreed to indemnify
Newcastle  from any  liability,  loss or  damage,  together  with all  costs and
expenses related thereto that the Company may suffer which arises out of affairs
of the Company,  its board of directors or employees prior to the closing of the
Newcastle Transaction. The Company's obligation to indemnify may be satisfied at
the option of the purchaser by issuing  additional  Series A Preferred  Stock to
the purchaser, modifying the conversion price of the Series A Preferred Stock, a
payment of cash or a redemption of Series A Preferred  Stock or a combination of
the foregoing. On July 3, 2006, Newcastle converted its Series A Preferred Stock
into 19,230,768 shares of the Common Stock.


                                       36


      On December 12, 2005, the Company received a letter from the SEC, based on
a review of the Company's  Form 10-K filed for the year ended December 31, 2004,
requesting  that the  Company  provide a written  explanation  as to whether the
Company is an  "investment  company" (as such term is defined in the  Investment
Company Act of 1940).  The Company provided a written response to the SEC, dated
January 12, 2006,  stating the reasons why it believes it is not an  "investment
company". The Company has provided certain confirmatory information requested by
the SEC. In the event the SEC or a court took the  position  that the Company is
an  investment  company,  the  Company's  failure to register  as an  investment
company would not only raise the  possibility  of an  enforcement or other legal
action by the SEC and potential fines and penalties, but also could threaten the
validity of corporate  actions and contracts  entered into by the Company during
the period it was deemed to be an unregistered  investment company,  among other
remedies.

NOTE 7.  SHARE CAPITAL

      On July 10, 2006, the Company entered into a stockholders rights plan (the
"Rights Plan") that replaced the Company's  stockholders  rights plan dated July
10, 1996 (the "Old Rights Plan") that expired according to its terms on July 10,
2006.  The Rights Plan  provides for a dividend  distribution  of one  preferred
share purchase right (a "Right") for each outstanding share of Common Stock. The
dividend was payable on July 10, 2006 to the Company's stockholders of record at
the close of business on that date (the "Record Date").  The terms of the Rights
and the Rights  Plan are set forth in a Rights  Agreement,  dated as of July 10,
2006, by and between New Century Equity  Holdings Corp. and The Bank of New York
Trust Company, N.A., as Rights Agent.

      The  Company's  Board of  Directors  adopted  the  Rights  Plan to protect
stockholder value by protecting the Company's ability to realize the benefits of
its net operating loss carryforwards ("NOLs") and capital loss carryforwards. In
general terms, the Rights Plan imposes a significant  penalty upon any person or
group that acquires 5% or more of the outstanding Common Stock without the prior
approval of the Company's Board of Directors.  Stockholders  that own 5% or more
of the  outstanding  Common Stock as of the close of business on the Record Date
may acquire up to an  additional  1% of the  outstanding  Common  Stock  without
penalty  so long as they  maintain  their  ownership  above  the 5% level  (such
increase  subject to downward  adjustment by the Company's Board of Directors if
it determines that such increase will endanger the availability of the Company's
NOLs and/or its capital loss carryforwards). In addition, the Company's Board of
Directors has exempted  Newcastle,  the Company's largest  stockholder,  and may
exempt  any  person  or group  that  owns 5% or more if the  Board of  Directors
determines  that  the  person's  or  group's  ownership  will not  endanger  the
availability  of the  Company's  NOLs and/or its capital loss  carryforwards.  A
person or group that  acquires  a  percentage  of Common  Stock in excess of the
applicable  threshold  is called an  "Acquiring  Person."  Any Rights held by an
Acquiring  Person  are void and may not be  exercised.  The  Company's  Board of
Directors  authorized  the  issuance of one Right per each share of Common Stock
outstanding  on the Record Date.  If the Rights become  exercisable,  each Right
would allow its holder to purchase from the Company one one-hundredth of a share
of the Company's Series A Junior Participating  Preferred Stock, par value $0.01
(the "Preferred  Stock"),  for a purchase price of $10.00. Each fractional share
of Preferred Stock would give the stockholder  approximately  the same dividend,
voting  and  liquidation  rights  as does one share of  Common  Stock.  Prior to
exercise,  however,  a Right does not give its holder  any  dividend,  voting or
liquidation rights.


                                       37


      The Company has never  declared or paid any cash  dividends  on its Common
Stock,  other than  approximately  $2,270,017  distributed  to the  stockholders
pursuant  to the  Settlement  in August  2006  (See  Note 6). On June 30,  2006,
Newcastle  elected to receive  Preferred  Dividends  in cash for the period from
June 19, 2005  through  June 30,  2006.  On July 3, 2006,  Newcastle  elected to
convert all of its Series A  Preferred  Stock into  19,230,768  shares of Common
Stock.

NOTE 8.  TREASURY STOCK

      In 2000,  the  Company's  board of  directors  approved  the adoption of a
common stock repurchase program. Under the terms of the program, the Company may
purchase an  aggregate  $25,000,000  of the  Company's  Common Stock in the open
market or in privately negotiated  transactions.  Through December 31, 2006, the
Company had purchased an aggregate $20,100,000, or 8,300,000 shares, of treasury
stock under this program.  The Company made no treasury stock  purchases  during
the year ended December 31, 2006,  and has no plans to make any future  treasury
stock purchases.

NOTE 9.  STOCK OPTIONS AND STOCK PURCHASE WARRANTS

      The Company has adopted the NCEH 1996  Employee  Comprehensive  Stock Plan
("Comprehensive  Plan") and the NCEH 1996 Non-Employee  Director Plan ("Director
Plan")  under  which  officers  and  employees,   and  non-employee   directors,
respectively,  of the Company and its  affiliates  are eligible to receive stock
option grants.  Employees of the Company are also eligible to receive restricted
stock grants under the Comprehensive  Plan. The Company has reserved  14,500,000
and  1,300,000  shares  of  its  Common  Stock  for  issuance  pursuant  to  the
Comprehensive Plan and the Director Plan, respectively. Under each plan, options
vest and expire pursuant to individual award agreements; however, the expiration
date of  unexercised  options  may not  exceed  ten years from the date of grant
under the  Comprehensive  Plan and seven  years from the date of grant under the
Director Plan.

      Option  activity for the years ended December 31, 2006,  2005 and 2004, is
summarized as follows:

                                                     Number      Weighted Average
                                                   of Shares      Exercise Price
                                                   ----------    ----------------

      Outstanding, December 31, 2003 ............   5,778,187       $   3.98
        Granted .................................     300,000       $   0.28
        Canceled ................................  (3,308,583)      $   4.54
                                                    ---------

      Outstanding, December 31, 2004 ............   2,769,604       $   2.90
        Granted .................................      90,000       $   0.24
        Canceled ................................    (643,406)      $   2.68
                                                    ---------

      Outstanding, December 31, 2005 ............   2,216,198       $   2.86
        Granted .................................          --             --
        Canceled ................................  (1,241,198)      $   1.73
                                                    ---------

      Outstanding, December 31, 2006 ............     975,000       $   4.30
                                                    =========

      At  December  31,  2006,  2005 and 2004,  stock  options  to  purchase  an
aggregate of 908,334,  2,082,865 and 2,500,854,  shares were exercisable and had
weighted  average  exercise  prices  of  $4.59,   $3.02  and  $3.13  per  share,
respectively.


                                       38


      Stock options  outstanding  and  exercisable at December 31, 2006, were as
follows:

                                     Options Outstanding                        Options Exercisable
                         ---------------------------------------------     -----------------------------
                                      Weighted Average
         Range of                         Remaining        Remaining         Weighted          Weighted
         Exercise           Number          Life           Average           Number           Average
         Prices          Outstanding       (Years)      Exercise Price     Exercisable     Exercise Price
      --------------     -----------       -------      --------------     -----------     --------------

      $0.24 - $1.24        394,000           6.8           $  0.28           327,334          $  0.28
      $2.03 - $4.88        401,000           0.7           $  3.07           401,000          $  3.07
      $8.31 - $16.84       180,000           0.7           $ 15.42           180,000          $ 15.42
                           -------                                           -------

                           975,000           3.2           $  4.30           908,334          $  4.59
                           =======                                           =======

      The weighted  average fair value and weighted  aver age exercise  price of
options  granted  where the exercise  price was equal to the market price of the
underlying  stock at the grant  date  were,  $0.24 and $0 .24 for the year ended
December  31,  2005 and $0.25 and $0.28 for the year ended  December  31,  2004,
respectively. There were no option grants for the year ended December 31, 2006.

NOTE 10. SHORT-TERM INVESTMENTS

      In October 2004,  the Company  purchased a 26 week U.S.  Treasury bill for
approximately  $12,859,000 which matured on May 5, 2005 for $13,000,000.  In May
2005,  the Company  purchased  a 26 week U.S.  Treasury  bill for  approximately
$13,786,000 which was sold on July 27, 2005 for approximately $13,863,000. As of
December 31, 2006, the Company held all short-term investments in cash.

NOTE 11.  LEASES

      The Company  leases  certain  office space and equipment  under  operating
leases.  Rental expense was approximately  $45,000,  $36,000 and $58,000 for the
years ended December 31, 2006, 2005 and 2004, respectively. Future minimum lease
payments  under  non-cancelable  operating  leases as of  December  31, 2006 are
$6,000 for the year ending  December  31, 2007 and $0 for all years  thereafter.
Future minimum  sub-lease  receipts under sub-lease  rentals for the year ending
December 31, 2007, are $5,000 and $0 for all years thereafter.


                                       39


NOTE 12. INCOME TAXES

      The income tax benefit is comprised of the following:

                                                       Year Ended December 31,
                                                   2006        2005         2004
      (in thousands)                             -------     -------     -------
      Current:
      Federal ...........................          $--         $--         $--
      State .............................           --          --          --
                                                   ---         ---         ---
       Total ............................          $--         $--         $--
                                                   ===         ===         ===

      The income tax benefit  differs  from the amount  computed by applying the
statutory  federal  income  tax rate of 35% to the net loss  before  income  tax
benefit. The reasons for these differences were as follows:

                                                                         Year Ended December 31,
     (in thousands)                                                 2006         2005         2004
                                                                  --------     --------     ---------

Computed income tax benefit at statutory rate ...............     $    207     $    190     $    666
(Decrease) increase in taxes resulting from:
Nondeductible losses in and impairments of affiliates .......            --        --         (1,045)
Book gain on sale of equity affiliate .......................            --        --          2,036
Tax capital loss on sale of equity affiliate ................            --        --         23,547
Permanent and other deductions, net .........................            9           20         (754)
Valuation allowance .........................................         (216)        (210)     (24,450)
                                                                               --------     --------
Income tax benefit ..........................................     $   --       $   --       $   --
                                                                  ========     ========     ========

      The tax effect of significant  temporary  differences,  which comprise the
deferred tax liability, is as follows:
                                                              December 31,
            (in thousands)                                 2006          2005
                                                        ---------      ---------
      Deferred tax asset:
        Net operating loss carryforward ..............  $  4,577       $  4,361
        Capital loss carryforward ....................    24,574         24,574
        Valuation allowance ..........................   (29,151)       (28,935)
      Deferred tax liability:
        Estimated tax liability ......................      --             --
                                                        --------       --------
         Net deferred tax liability ..................  $   --         $   --
                                                        ========       ========

      As of  December  31,  2006,  the  Company  had a federal  income  tax loss
carryforward  of  approximately  $13,000,000,  which begins expiring in 2019. In
addition,  the Company had a federal capital loss  carryforward of approximately
$70,000,000 which expires in 2009. Realization of the Company's carryforwards is
dependent on future taxable income and capital gains.  At this time, the Company
cannot assess whether or not the  carryforward  will be realized;  therefore,  a
valuation allowance has been recorded as shown above.

      Ownership  changes,  as defined in the  Internal  Revenue  Code,  may have
limited  the amount of net  operating  loss  carryforwards  that can be utilized
annually to offset future taxable  income.  Subsequent  ownership  changes could
further affect the limitation in future years.


                                       40


NOTE 13.  BENEFIT PLANS

      The Company  established  the NCEH 401(k) Plan (the  "Plan") for  eligible
employees of the  Company.  Generally,  all  employees of the Company who are at
least  twenty-one  years of age and who have completed  one-half year of service
are eligible to participate in the Plan. The Plan is a defined contribution plan
which   provides  that   participants   may  make  voluntary   salary   deferral
contributions,  on a pretax basis,  between 1% and 15% of their  compensation in
the form of voluntary payroll deductions,  up to a maximum amount as indexed for
cost-of-living  adjustments.  The  Company  will  match a  participant's  salary
deferral,  up  to 5% of a  participant's  compensation.  The  Company  may  make
additional discretionary contributions. No discretionary contributions were made
during the years ended December 31, 2006,  2005 or 2004. The Company's  matching
contributions to this plan totaled approximately $7,500, $7,500, and $22,000 for
the years ended December 31, 2006, 2005 and 2004, respectively.

NOTE 14.  SUMMARIZED FINANCIAL INFORMATION FOR UNCONSOLIDATED SUBSIDIARY

      In June 2004,  the  Company  sold all of its  interest  in  Princeton  for
$10,000,000.  The sale of Princeton  generated a capital loss for federal income
tax  purposes of  approximately  $67,000,000.  Prior to selling its  interest in
Princeton in June 2004,  the Company  accounted for its  investment in Princeton
under the equity  method of  accounting  and  recorded the equity in net loss of
Princeton  on a  three-month  lag.  As a  result  of the  sale of the  Company's
holdings in Princeton,  the Company  accelerated  the recording of its equity in
net loss of Princeton to the date of sale.  Princeton's  statement of operations
for the eight months ended May 31, 2004 was used to calculate  the equity in net
loss  recorded  in the  Company's  statement  of  operations  for the year ended
December 31, 2004.

      Princeton's summarized balance sheet is as follows:

                                                             May 31,  September 30,
(in thousands)                                                2004        2003
                                                             -------     -------
Current assets .........................................     $47,528     $34,750
Non-current assets .....................................       9,464      12,681
Current liabilities ....................................      38,188      30,386
Non-current liabilities ................................       1,209         486
Mandatorily redeemable convertible preferred stock .....      49,845      39,587

      Princeton's summarized statements of operations are as follows:

                                                    Eight
                                                 Months Ended     Year Ended
                                                   May 31,        September 30,
      (in thousands)                                2004             2003
                                                  ---------        ----------
      Revenues ...............................    $ 16,695         $ 35,309
      Gross profit ...........................       7,258           16,026
      Loss from operations ...................      (9,188)          (7,965)
      Net loss ...............................      (9,214)          (7,674)


                                       41


NOTE 15.  RELATED PARTIES

      In June 2004, in connection with the Newcastle Transaction,  Mark Schwarz,
Chief  Executive  Officer and Chairman of  Newcastle  Capital  Management,  L.P.
("NCM"),  Steven J. Pully,  President of NCM, and John Murray,  Chief  Financial
Officer of NCM,  assumed  positions  as Chairman of the Board,  Chief  Executive
Officer and Chief Financial  Officer,  respectively,  of the Company.  Mr. Pully
receives an annual salary of $150,000 as Chief Executive Officer of the Company.
NCM is the general partner of Newcastle,  which owns 19,380,768 shares of Common
Stock of the Company.

      The Company's corporate headquarters are currently located at 200 Crescent
Court, Suite 1400,  Dallas,  Texas 75201, which are also the offices of NCM. The
Company occupies a portion of NCM space on a month-to-month  basis at $2,500 per
month, pursuant to a services agreement entered into between the parties. NCM is
the general  partner of  Newcastle.  The Company also  receives  accounting  and
administrative  services from  employees of NCM at market rates pursuant to such
agreement.  The expense  for the year  totaled  $7,500  which was owed to NCM at
December 31, 2006.

      In September 2006, the SEC staff issued Staff Accounting  Bulletin No. 108
("SAB  108"),  which  provides  interpretive  guidance on how the effects of the
carryover  or  reversal  of prior year  misstatements  should be  considered  in
quantifying  a current year  misstatement.  SAB 108 requires the use of both the
"iron  curtain"  and  "rollover"  approach in  quantifying  the  materiality  of
misstatements.  SAB 108 provides  transitional  guidance for the  correction  of
errors in prior periods.

      SAB 108 is  effective  for the  Company  no later  than  the  year  ending
December 31, 2006.  The Company  adopted SAB 108 as of September 30, 2006.  Upon
initial application of SAB 108, the Company evaluated the uncorrected  financial
statement  misstatements  that were previously  considered  immaterial under the
"rollover" method using the dual methodology required by SAB 108. As a result of
this dual methodology  approach of SAB 108, the Company corrected the cumulative
error in its accounting for the fair market value of office space provided at no
charge and  accounting  and  administrative  services  received  for the current
fiscal year by recording an expense of $16,500  with a  corresponding  credit to
additional paid-in capital. In accordance with the transitional  guidance in SAB
108, the Company also made an adjustment of $22,500 within  stockholders' equity
that increased additional paid-in capital and increased  accumulated deficit for
such costs prior to January 1, 2006.


                                       42


NOTE 16.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

                                                                               Three Months Ended
                                                             -------------------------------------------------------
                                                             December 31,   September 30,    June 30,       March 31,
     (in thousands, except per share data)                       2006           2006           2006            2006
                                                                ------         ------         ------         -------
Operating revenues ........................................     $--            $--            $  56          $  13
Operating income (loss) ...................................      (275)          (235)            20            (83)
Net income (loss) .........................................      (123)           (82)           173           (559)
Preferred stock dividend ..................................      --             --              (50)           (50)
Net income (loss) available to common stockholders ........      (123)           (82)           123           (609)
Basic and diluted net income (loss) per common share:
Net income (loss) .........................................      (0.0)          (0.0)           .01           (.02)

                                                                               Three Months Ended
                                                             -------------------------------------------------------
                                                             December 31,   September 30,    June 30,       March 31,
     (in thousands, except per share data)                       2005           2005           2005            2005
                                                                ------         ------         ------         -------
Operating revenues ........................................     $  33          $--            $--            $--
Operating loss from continuing operations .................      (121)          (287)          (246)          (355)
Net (loss) income .........................................        13           (193)           (89)          (274)
Preferred stock dividend ..................................       (50)           (50)           (50)           (50)
Net loss available to common stockholders .................       (37)          (243)          (139)          (324)
Basic and diluted net income (loss) per common share:

Net income (loss) .........................................       0.0           (.01)          (0.0)          (.01)


                                       43


ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

      None.

ITEM 9A.  CONTROLS AND PROCEDURES

      Disclosure controls are procedures that are designed with the objective of
ensuring  that  information  required to be disclosed in the  Company's  reports
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), such
as this  Form  10-K,  is  reported  in  accordance  with  the  rules of the SEC.
Disclosure  controls are also  designed with the objective of ensuring that such
information  is  accumulated   appropriately  and  communicated  to  management,
including  the  chief  executive  officer  and  chief  financial   officer,   as
appropriate, to allow for timely decisions regarding required disclosures.

      As of the end of the period  covered by 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 Rules
13a-15(e) and 15d-15(e). 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.  There were no  significant
changes  in the  Company's  internal  controls  or in other  factors  that could
significantly  affect these  controls  subsequent  to the date of the  Company's
evaluation.

ITEM 9B.    OTHER INFORMATION

      None.


                                       44


                                    PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

      The information required by Item 10 will be furnished on or prior to April
30, 2007 (and is hereby  incorporated  by reference)  by an amendment  hereto or
pursuant to a definitive proxy statement of the Company's 2007 Annual Meeting of
Stockholders for the fiscal year ended December 31, 2006.

ITEM 11.  EXECUTIVE COMPENSATION

      The information required by Item 11 will be furnished on or prior to April
30, 2007 (and is hereby  incorporated  by reference)  by an amendment  hereto or
pursuant to a definitive proxy statement of the Company's 2007 Annual Meeting of
Stockholders for the fiscal year ended December 31, 2006.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
            AND RELATED STOCKHOLDER MATTERS

      The information required by Item 12 will be furnished on or prior to April
30, 2007 (and is hereby  incorporated  by reference)  by an amendment  hereto or
pursuant to a definitive proxy statement of the Company's 2007 Annual Meeting of
Stockholders for the fiscal year ended December 31, 2006.

ITEM  13.  CERTAIN   RELATIONSHIPS  AND  RELATED   TRANSACTIONS,   AND  DIRECTOR
INDEPENDENCE

      The information required by Item 13 will be furnished on or prior to April
30, 2007 (and is hereby  incorporated  by reference)  by an amendment  hereto or
pursuant to a definitive proxy statement of the Company's 2007 Annual Meeting of
Stockholders for the fiscal year ended December 31, 2006.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

      The information required by Item 14 will be furnished on or prior to April
30, 2007 (and is hereby  incorporated  by reference)  by an amendment  hereto or
pursuant to a definitive proxy statement of the Company's 2007 Annual Meeting of
Stockholders for the fiscal year ended December 31, 2006.

                                     PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

   (a)   DOCUMENTS FILED AS PART OF REPORT

         1. Financial Statements:

            The Consolidated Financial Statements of the Company and the related
            report of the Company's  independent public accountants thereon have
            been filed under Item 8 hereof.

         2. Financial Statement Schedules:

            The information required by this item is not applicable.


                                       45


         3. Exhibits:

            The exhibits  listed below are filed as part of or  incorporated  by
            reference in this report. Where such filing is made by incorporation
            by  reference  to a  previously  filed  document,  such  document is
            identified in parentheses.  See the Index of Exhibits  included with
            the exhibits filed as a part of this report.

Exhibit
Number                         Description of Exhibits

2.1      Plan of Merger and Acquisition  Agreement  between BCC, CRM Acquisition
         Corp.,  Computer Resources  Management,  Inc. and Michael A. Harrelson,
         dated June 1, 1997  (incorporated by reference from Exhibit 2.1 to Form
         10-Q, dated June 30, 1997).
2.2      Stock Purchase Agreement between BCC and Princeton TeleCom Corporation,
         dated September 4, 1998  (incorporated by reference from Exhibit 2.2 to
         Form 10-K, dated September 30, 1998).
2.3      Stock Purchase  Agreement  between BCC and Princeton eCom  Corporation,
         dated February 21, 2000  (incorporated by reference from Exhibit 2.1 to
         Form 8-K, dated March 16, 2000).
2.4      Agreement  and Plan of Merger  between  BCC,  Billing  Concepts,  Inc.,
         Enhanced Services Billing,  Inc., BC Transaction  Processing  Services,
         Inc., Aptis, Inc.,  Operator Service Company, BC Holding I Corporation,
         BC Holding II Corporation, BC Holding III Corporation, BC Acquisition I
         Corporation,   BC  Acquisition  II  Corporation,   BC  Acquisition  III
         Corporation and BC Acquisition IV Corporation, dated September 15, 2000
         (incorporated  by  reference  from  Exhibit  2.1  to  Form  8-K,  dated
         September 15, 2000).
2.5      Stock  Purchase  Agreement  by and among New  Century  Equity  Holdings
         Corp., Mellon Ventures, L.P., Lazard Technology Partners II LP, Conning
         Capital Partners VI, L.P. and Princeton eCom  Corporation,  dated March
         25, 2004  (incorporated  by  reference  from  Exhibit 10.1 to Form 8-K,
         dated March 29, 2004).
2.6      Series A  Convertible  4%  Preferred  Stock  Purchase  Agreement by and
         between New Century Equity Holdings Corp. and Newcastle  Partners,  LP,
         dated June 18, 2004 (incorporated by reference from Exhibit 2.1 to Form
         8-K, dated June 30, 2004).
3.1      Amended and Restated  Certificate of Incorporation of BCC (incorporated
         by reference from Exhibit 3.1 to Form 10/A, Amendment No. 1, dated July
         11, 1996);  as amended by  Certificate  of Amendment to  Certificate of
         Incorporation,  filed with the Delaware  Secretary  of State,  amending
         Article I to change the name of the Company to Billing  Concepts  Corp.
         and amending Article IV to increase the number of authorized  shares of
         common stock from  60,000,000 to  75,000,000,  dated  February 27, 1998
         (incorporated  by reference from Exhibit 3.4 to Form 10-Q,  dated March
         31, 1998).
3.2      Amended and Restated  Bylaws of BCC  (incorporated  by  reference  from
         Exhibit 3.3 to Form 10-K, dated September 30, 1998).
3.3      Certificate of Elimination of Series A Junior  Participating  Preferred
         Stock,  filed with the  Secretary of State of Delaware on July 10, 2006
         (incorporated by reference from Exhibit 3.1 to Form 8-K, dated July 10,
         2006).
4.1      Form of Stock  Certificate  of  Common  Stock of BCC  (incorporated  by
         reference from Exhibit 4.1 to Form 10-Q, dated March 31, 1998).
4.2      Rights Agreement, dated as of July 10, 2006, by and between New Century
         Equity  Holdings  Corp.  and The Bank of New York Trust  Company,  N.A.
         (incorporated by reference from Exhibit 4.2 to Form 8-K, dated July 10,
         2006).
4.3      Certificate of Designation of Series A Junior  Participating  Preferred
         Stock,  filed with the  Secretary of State of Delaware on July 10, 2006
         (incorporated by reference from Exhibit 3.2 to Form 8-K, dated July 10,
         2006).
4.4      Form of Rights Certificate  (incorporated by reference from Exhibit 4.1
         to Form 8-K, dated July 10, 2006).


                                       46


*10.1    BCC's 1996 Employee  Comprehensive  Stock Plan amended as of August 31,
         1999  (incorporated  by reference from Exhibit 10.8 to Form 10-K, dated
         September 30, 1999).
*10.2    Form of Option  Agreement  between BCC and its employees under the 1996
         Employee  Comprehensive  Stock Plan  (incorporated  by  reference  from
         Exhibit 10.9 to Form 10-K, dated September 30, 1999).
*10.3    Amended and Restated 1996 Non-Employee Director Plan of BCC, amended as
         of August 31, 1999  (incorporated  by reference  from Exhibit  10.10 to
         Form 10-K, dated September 30, 1999).
*10.4    Form  of  Option  Agreement  between  BCC  and  non-employee  directors
         (incorporated  by  reference  from  Exhibit  10.11 to Form 10-K,  dated
         September 30, 1998).
 10.5    Office Building Lease  Agreement  between  Billing  Concepts,  Inc. and
         Medical Plaza Partners (incorporated by reference from Exhibit 10.21 to
         Form 10/A,  Amendment No. 1, dated July 11, 1996),  as amended by First
         Amendment to Lease Agreement, dated September 30, 1996 (incorporated by
         reference  from  Exhibit  10.31 to Form 10-Q,  dated  March 31,  1998),
         Second   Amendment  to  Lease   Agreement,   dated   November  8,  1996
         (incorporated by reference from Exhibit 10.32 to Form 10-Q, dated March
         31, 1998),  and Third Amendment to Lease  Agreement,  dated January 24,
         1997  (incorporated by reference from Exhibit 10.33 to Form 10-Q, dated
         March 31, 1998).
10.6     Office Building Lease Agreement between Prentiss Properties Acquisition
         Partners,  L.P. and Aptis,  Inc., dated November 11, 1999 (incorporated
         by  reference  from Exhibit  10.33 to Form 10-K,  dated  September  30,
         1999).
*10.7    BCC's 401(k)  Retirement Plan  (incorporated  by reference from Exhibit
         10.14 to Form 10-K, dated September 30, 2000).
10.8     Office  Building  Lease  Agreement  between  BCC and  EOP-Union  Square
         Limited Partnership,  dated November 6, 2000 (incorporated by reference
         from Exhibit 10.16 to Form 10-K, dated December 31, 2001).
10.9     Office Building Sublease  Agreement between BCC and CCC Centers,  Inc.,
         dated February 11, 2002  (incorporated  by reference from Exhibit 10.17
         to Form 10-K, dated December 31, 2001).
10.10    Office Building Lease Agreement between SAOP Union Square, L.P. and New
         Century Equity Holdings Corp., dated February 11, 2004 (incorporated by
         reference from Exhibit 10.18 to Form 10-K, dated December 31, 2003).
10.11    Sublease  agreement  entered  into by and between  New  Century  Equity
         Holdings  Corp.  and  the  Law  Offices  of  Alfred  G.  Holcomb,  P.C.
         (incorporated  by  reference  from  Exhibit  10.1 to Form  10-Q,  dated
         September 30, 2004).
10.12    Revenue  Sharing  Agreement,  dated as of October 5, 2005,  between New
         Century Equity Holdings Corp. and ACP Investments LP  (incorporated  by
         reference  from Exhibit 10.1 to Form 10-Q,  dated  September 30, 2005).


                                       47


10.13    Principals  Agreement,  dated as of October  5, 2005,  by and among New
         Century Equity Holdings Corp. and ACP Investments LP  (incorporated  by
         reference from Exhibit 10.2 to Form 10-Q, dated September 30, 2005).
14.1     New Century  Equity  Holdings  Corp.  Code of Ethics  (incorporated  by
         reference from Exhibit 14.1 to Form 10-K, dated December 31, 2003).
21.1     List of  Subsidiaries:  New  Century  Equity  Holdings  of Texas,  Inc.
         (incorporated   in  Delaware)  New  Century   Equity   Holdings,   Inc.
         (incorporated in Texas)
23.1     Consent of Burton, McCumber & Cortez, L.L.P. (filed herewith).
31.1     Certification of Chief Executive Officer in Accordance with Section 302
         of the Sarbanes-Oxley Act (filed herewith).
31.2     Certification of Chief Financial Officer in Accordance with Section 302
         of the Sarbanes-Oxley Act (filed herewith). 32.1 Certification of Chief
         Executive Officer in Accordance with Section 906 of the  Sarbanes-Oxley
         Act (filed herewith).
32.2.1   Certification of Chief Financial Officer in Accordance with Section 906
         of the  Sarbanes-Oxley  Act (filed herewith).

* Includes  compensatory plan or arrangement.


                                       48


                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) 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: March 30, 2007                   By:        /s/ Steven J. Pully
                                           -------------------------------------
                                                   Steven J. Pully
                                               CHIEF EXECUTIVE OFFICER

      Pursuant to the  requirements  of the Securities  Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities indicated on the 30th day of March 2007.

           SIGNATURE                                 TITLE

      /s/ Steven J. Pully
   ------------------------                  Chief Executive Officer
        Steven J. Pully                   (Principal Executive Officer)


      /s/ John P. Murray
   ------------------------                  Chief Financial Officer
        John P. Murray               (Principal Financial and Accounting Officer)


      /s/ Mark E. Schwarz
   ------------------------                      Director and
        Mark E. Schwarz                    Chairman of the Board


       /s/ James Risher
   ------------------------                         Director
         James Risher


       /s/ Jonathan Bren                            Director
   ------------------------
         Jonathan Bren`