<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-QSB

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

                  For the quarterly period ended March 31, 2002

                           Commission File No. 000-28243


                                PARTS.COM, INC.
               ------------------------------------------------------
               (Exact Name of Registrant as specified in its Charter)


                   NEVADA                                88-0344869
      ---------------------------------              -------------------
        (State or Other Jurisdiction                   (IRS Employer
      of Incorporation or Organization)              Identification No.)


            121 EAST FIRST STREET
              SANFORD, FLORIDA                                 32771
    ----------------------------------------                 ----------
    (Address of Principal Executive Offices)                 (Zip Code)


               Registrant's telephone number:(407) 302-1314

               Former name, former address and former fiscal year,
                        If changed since last report: N/A


Check whether the Registrant (1) has filed all reports to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such a shorter period that the Registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.

                               YES [ ]     NO [X]

As of June 17, 2002, there were 4,952,799 shares of common stock outstanding.
<PAGE>

PART I. FINANCIAL INFORMATION

<TABLE>
<CAPTION>

                                                                                 Page
                                                                                 ----
<S>                                                                              <C>
Item 1. Index to Financial Statements

PARTS.COM, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets at
      March 31, 2002 (Unaudited) and December 31, 2001                           4-5

Condensed Consolidated Statements of Operations (Unaudited) for
         the Three Months Ended March 31, 2002 and 2001                            6

Condensed Consolidated Statement of Stockholders' Equity (Unaudited)
         for the Three Months Ended March 31, 2002                                 7

Condensed Consolidated Statements of Cash Flows (Unaudited) for the
      Three Months Ended March 31, 2002 and 2001                                 8-9

Notes to Consolidated Financial Statements   (Unaudited)                        10-14

Item 2.  Management's Discussion and Analysis  of
         Financial Condition and Results of Operations.                         15-17

Other Information and signatures                                                17-18


</TABLE>

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in this Annual Report on Form 10-KSB, including
information with respect to the Company's future business plans, constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Private
Litigation Securities Reform Act of 1995. For this purpose, any statements
contained herein that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes," "plans," "expects," "goals," "should," "anticipate," "intend,"
"plan," foresee and similar expressions are intended to identify forward-looking
statements. There are a number of important factors that could cause the results
of the Company to differ materially from those indicated by such forward-looking
statements. These factors include those set forth in the Business section below
and in Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations and in other documents filed from time to time with the
Securities and Exchange Commission. Specific events addressed by these forward
looking statements include, but are not limited to:

         o        future acquisitions;

         o        industry trends;

         o        general economic trends, including employment rates and
                  consumer confidence levels;

         o        parts sales rates and subscriber sales growth;

         o        our financing plans;

         o        our business and growth strategies.

These forward-looking statements are based on our current estimates and
assumptions and involve various risks and uncertainties. As a result, you are
cautioned that these forward looking statements are not guarantees of future
performance, and that actual results could differ materially from those
projected in these forward looking statements. Factors which may cause actual
results to differ materially from our projections, as well as:

         o        our ability to generate sufficient cash flows or obtain
                  additional financing to support acquisitions, capital
                  expenditures and general operating activities;

         o        the reputation and financial condition of vehicle
                  manufacturers and dealers whose brands we represent;


                                       2
<PAGE>

         o        our relationships with dealers

         o        changes in laws and regulations governing the operation of
                  automobile franchises, accounting standards, taxation
                  requirements, and environmental laws;

         o        general economic conditions in the markets in which we
                  operate, including fluctuations in interest rates, employment
                  levels, and the level of consumer spending;

         o        high competition in the automotive B2B ecommerce parts
                  industry which creates pricing pressures on the products and
                  services we offer;

         o        our ability to successfully integrate past and potential
                  future acquisitions.




                                       3
<PAGE>

                         PARTS.COM, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                     ASSETS



<TABLE>
<CAPTION>

                                                        March 31,      December 31,
                                                          2002             2001
                                                       (UNAUDITED)
                                                        ---------      ------------
<S>                                                     <C>             <C>
CURRENT ASSETS:

Cash                                                    $    185        $    223
Accounts receivable, net of allowance for
  doubtful accounts of $147,000 and $72,000,
  respectively                                            17,521          27,780
Prepaid expenses and other current assets                 20,285          19,567
                                                        --------        --------
Total Current Assets                                      37,991          47,570
                                                        --------        --------

PROPERTY AND EQUIPMENT, net                              154,339         185,310

OTHER ASSETS, net                                         31,577          33,595
                                                        --------        --------
Total Assets                                            $223,907        $266,475
                                                        ========        ========


</TABLE>

See Accompanying Notes to Condensed Consolidated Financial Statements



                                       4
<PAGE>
                         PARTS.COM, INC. AND SUBSIDIARY
               CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED


<TABLE>
<CAPTION>

                      LIABILITIES AND STOCKHOLDERS' DEFICIT



                                                    March 31,          December 31,
                                                      2002                 2001
                                                  (UNAUDITED)
                                                  ------------         ------------
<S>                                               <C>                  <C>
CURRENT LIABILITIES:

Accounts payable and accrued expenses             $    151,418         $    790,746
Other current liabilities                              874,086              831,593
Current Portion of Note Payable                         13,685               13,685
Line of credit                                         343,569              210,939
Convertible promissory notes                         1,925,433            1,954,934
Notes Payable - related party                           12,317               15,785
Deferred revenue                                        59,783               55,501
                                                  ------------         ------------
Total Current Liabilities                            3,380,291            3,873,183

LONG-TERM LIABILITIES:
Note Payable                                            23,728               25,882
                                                  ------------         ------------
Total Liabilities                                    3,404,019            3,899,065
                                                  ------------         ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:

Preferred Stock, $.001 par value,
10,000,000 shares authorized,
no shares issued and outstanding                            --                   --

Common Stock, $.001 par value,
5,000,000 shares authorized,
4,999,999 and 4,270,623 shares
issued and outstanding, respectively                     5,000                4,271

Additional paid-in capital                          25,399,921           25,160,277

Accumulated deficit                                (28,518,639)         (28,707,234)

Deferred stock-based employee compensation             (66,394)             (89,904)
                                                  ------------         ------------
Total Stockholders' Deficit                         (3,180,112)          (3,632,590)
                                                  ------------         ------------
Total Liabilities and
   Stockholders' Deficit                          $    223,907         $    266,475
                                                  ============         ============

</TABLE>

See Accompanying Notes to Condensed Consolidated Financial Statements



                                       5
<PAGE>
                         PARTS.COM, INC. AND SUBSIDIARY
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


                                                      Three Months Ended
                                               -------------------------------
                                                 March 31           March 31
                                                   2002                2001
                                               -----------         -----------
NET SALES                                      $   132,065         $   134,128
COST OF SALES                                      116,190             131,558
                                               -----------         -----------
         GROSS PROFIT                               15,875               2,570
                                               -----------         -----------
SELLING, GENERAL AND
    ADMINISTRATIVE EXPENSES:

  Stock-Based Employee Compensation                 53,210             267,474

  Stock-Based Consulting Fees                        7,740              25,593

  Other                                            238,723             363,001

  Amortization                                       2,394             258,210

  Depreciation                                      30,971              39,635

INTEREST, NET (inclusive of noncash
 interest of $23,000 for
 2002 and $230,988 for 2001                         81,263             262,856
                                               -----------         -----------
         TOTAL SELLING, GENERAL AND
                ADMINISTRATIVE EXPENSES            414,301           1,216,769
                                               -----------         -----------
OTHER INCOME (EXPENSES)
  Loss on Sale of Assets                           (63,693)                 --
  Other Income                                     650,714                  --
                                               -----------         -----------
          TOTAL OTHER INCOME, NET                  587,021                  --
                                               -----------         -----------

NET INCOME (LOSS)                              $   188,595         $(1,214,199)
                                               ===========         ===========
BASIC AND DILUTED NET INCOME (LOSS)
    PER COMMON SHARE                           $       .04         $      (.43)
                                               ===========         ===========
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                       4,489,436           2,800,787
                                               ===========         ===========


          See Accompanying Notes to Condensed Consolidated Financial Statements



                                       6
<PAGE>
                             PARTS.COM, INC. AND SUBSIDIARY
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
             FOR THE THREE MONTHS ENDED MARCH 31, 2002 (UNAUDITED)



<TABLE>
<CAPTION>

                                                                                  Deferred
                                       Common Stock             Additional      Stock-Based
                               ----------------------------      Paid-In        Accumulated        Employee
                                   Shares         Amount         Capital         Deficit        Compensation        Total
                               ------------    ------------    ------------    ------------     ------------     ------------
<S>                               <C>          <C>             <C>             <C>              <C>              <C>
Balance - December 31, 2001       4,270,623    $      4,271    $ 25,160,277    $(28,707,234)    $    (89,904)    $ (3,632,590)

Issuance of common stock to
  employees                         100,000             100          29,600         (29,700)              --               --

Issuance of convertible
  debt with a beneficial
  conversion feature                     --              --          23,000              --               --           23,000

Issuance of common stock
  to officers and
  related parties                   629,376             629         187,044              --               --          187,673

Amortization of employee
  stock-based compensation               --              --              --              --           53,200           53,200

Net Income for the
  period                                 --              --              --         188,595               --          188,595
                               ------------    ------------    ------------    ------------     ------------     ------------
Balance - March 31, 2002          4,999,999    $      5,000    $ 25,309,921    $(28,518,639)    $    (66,394)    $ (3,180,112)
                               ============    ============    ============    ============     ============     ============

</TABLE>


See Accompanying Notes To Condensed Consolidated Financial Statements





                                       7
<PAGE>

                         PARTS.COM, INC. AND SUBSIDIARY
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>

                                                                       Three Months Ended
                                                                            March 31
                                                                ---------------------------------
                                                                    2002                 2001
                                                                -----------           -----------
<S>                                                             <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)                                               $   188,595           $(1,214,199)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
   Gain on settlement of accounts payable                          (650,714)                   --
   Loss on Sale of Property and Equipment                            63,693                    --
   Amortization                                                       2,394               258,210
   Depreciation                                                      30,971                39,635
   Noncash interest expense                                          23,000               230,988
   Stock-based compensation and fees                                 60,950               293,067
   Provision for doubtful accounts                                   75,000                    --

Changes in operating assets and liabilities:
   Receivables                                                      (64,741)                9,086
   Prepaid Expense & Other assets                                    (1,094)               17,533
   Deferred revenue                                                   4,282              (120,086)
   Accounts payable & Accrued Expenses                             (117,617)              238,749
   Other current liabilities                                             --              (167,150)
                                                                -----------           -----------
Net cash used in operating activities                              (105,045)             (414,167)
                                                                -----------           -----------
CASH FLOWS FROM FINANCING ACTIVITIES:

Line of credit advances                                             132,630                    --
Proceeds from issuance of
  convertible promissory notes                                       23,000               300,000
Proceeds from related party notes payable                            10,483               128,500
Repayments of related party notes payable                           (13,951)              (62,500)
Repayments of notes payables                                         (2,155)                   --
Proceeds from issuance of common stock                                   --                40,000
                                                                -----------           -----------
Net cash provided by financing activities                           150,007               406,000
                                                                -----------           -----------

DECREASE IN CASH                                                        (38)               (8,167)
CASH, AT BEGINNING OF PERIOD                                            223                 8,683
                                                                -----------           -----------
CASH, AT END OF PERIOD                                          $       185           $       516
                                                                ===========           ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for interest:                             1,810                 1,015
                                                                ===========           ===========

</TABLE>

See Accompanying Notes to Condensed Consolidated Financial Statements



                                       8
<PAGE>
                        SUPPLEMENTAL SCHEDULE OF NONCASH
                        INVESTING & FINANCING ACTIVITIES

Three Months Ended March 2002:

Accounts payable and accrued expenses in the amount of $60,090 settled through
  the issuance of common stock (Select Media, Inc.).

Accounts Payable, accrued expenses, and note payable settled totaling $733,016
  settled through cash paid in the amount $85,357 cash and debt forgiveness in
  the amount of $650,714.

Accrued expenses in the amount of $12,307 settled through the issuance of common
stock (New Era, Inc.).

Three Months Ended March 31, 2001:

Accounts Payable and accrued expenses in the amount of $207,469 settled through
  issuance of common stock.

Accounts Payable and accrued expenses settled through the issuance of
  convertible Promissory note payable in the amount of $52,500.

Property and equipment returned to vendor for credit, with corresponding
  reduction of accounts payable and accrued expenses in the amount of $25,000.





                                       9
<PAGE>

                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

         ORGANIZATION - Parts.com, Inc. (the "Company") is a
         business-to-business and business-to-consumer electronic commerce
         software and parts procurement platform provider. The Company's
         e-procurement solutions enable corporations to use electronic
         automation to streamline business transactions, increase revenue and
         reduce costs. The Company was incorporated in Nevada on September 13,
         1995, under the name I.E.L.S., Inc., which had no revenue and
         insignificant expenses, assets, and liabilities and whose common stock
         was traded on the OCT Bulletin Board. Effective January 5, 2000, the
         Company changed its name from Miracom Corporation to parts.com, Inc.

         GOING CONCERN - The accompanying consolidated financial statements have
         been prepared on a going concern basis, which contemplates the
         realization of assets and satisfaction of liabilities in the normal
         course of business. We have never been profitable and expect
         to continue to incur operating losses until at least the end of the
         fiscal 2002. We may be unable to achieve profitability in the future.
         We have continued to suffer recurring losses from operations that to
         date, total $28,518,639. The Company used 105,045 and $414,167 of cash
         in operations for the three months ended March 31, 2002 and 2001,
         respectively and anticipates additional cash needs in the remainder of
         2002. At March 31, 2002, the Company had a working capital deficit of
         $3,342,300 and cash of $185. The Company also had undeposited payroll
         taxes to the Internal Revenue Service for the period July 1, 2000
         through March 31, 2002, resulting in an accrual for back payroll taxes
         in the amount of approximately 378,036 as of March 31, 2002, including
         estimated penalties and interest. The Company is currently negotiating
         a payment plan with the IRS, but no formal agreement has been reached.
         Due to cash deficiencies, the Company has also been unable to pay
         certain members of senior management as well as non-management
         employees their regular salaries when due, which has resulted in an
         accrual for back salaries of approximately $181,047 as of March 31,
         2002. These factors, among others, raise substantial doubt about the
         Company's ability to continue as a going concern for a reasonable
         period of time. The accompanying consolidated financial statements do
         not include any adjustments relating to the outcome of this
         uncertainty.

         The Company's continuation as a going concern is dependent upon its
         ability to generate sufficient cash flow to meet its obligations on a
         timely basis. The Company's primary source of liquidity has been from
         the cash generated by its operations and through the private placement
         of equity and debt securities. The Company has altered its business
         model and taken actions to reduce its cash needs, such as significant
         reductions in its workforce to attempt to stabilize its financial
         condition. The Company continues developing its technology known as
         "TradeMotion Solutions" and continues implementation of a marketing
         campaign in order to gain market acceptance of same and to eventually
         achieve profitable operations. However, there can be no assurance that
         the Company will be successful in achieving profitability or acquiring
         additional capital. Without short or long-term financing, in order to
         meet its current and future capital needs, the Company will depend on
         cash receipts from fee revenue generated from its e-commerce web site,
         license fees from the sale of its software and proceeds from the sale
         of additional shares of common stock or the issuance of debt
         securities. The Company is actively pursuing other sources of new cash
         financing, but has not completed such financing and cannot provide any
         assurances as to whether such financing will be completed. Furthermore,
         there can be no assurance that additional financing will be available
         when needed or that if available, such financing will include terms
         acceptable to our stockholders or management. The availability of such
         financing is essential for the Company to continue to meet operating
         obligations and continue as a going concern.

         INTERIM RESULTS AND BASIS OF PRESENTATION - The unaudited condensed
         financial statements as of and for the three months ended March 31,
         2002 and 2001 have been prepared by management of the Company and are
         unaudited. In management's opinion, the unaudited financial statements
         have been prepared on the same basis as the annual financial statements
         and reflect all adjustments, which include only normal recurring
         adjustments,




                                       10
<PAGE>

         necessary to present fairly the financial position as of March 31, 2002
         and the results of the Company's operations and its cash flows for the
         three months ended March 31, 2002 and 2001. The financial data and
         other information disclosed in these notes to the interim financial
         statements related to these periods are unaudited. The results for the
         three-month period ended March 31, 2002 are not necessarily indicative
         of the results to be expected for any subsequent quarter or the entire
         fiscal year ending December 31, 2002. The condensed consolidated
         balance sheet at December 31, 2001 has been derived from the audited
         financial statements at that date.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with accounting principles
         generally accepted in the United States of America have been condensed
         or omitted as permitted by the Securities and Exchange Commission's
         rules and regulations. It is suggested that these unaudited condensed
         financial statements be read in conjunction with our audited financial
         statements and notes thereto for the year ended December 31, 2001 as
         included in our report on Form 10-KSB as filed with the Securities and
         Exchange Commission on May 20, 2002.


2.       CONVERTIBLE PROMISSORY NOTES

         JAMES HALL NOTES - On July 20, 2000, the Company executed a Convertible
         Promissory Note (the "Note") with an individual for up to a Principal
         amount of $500,000. The note was subsequently modified on March 30,
         2001 to allow for additional advances totaling $165,000, which were
         received during the six months ended June 30, 2001 ($125,000 was
         received in the form of cash and $38,767 was incurred through legal
         expense and the conversion of accrued interest). The new Note bears
         interest at 10% per annum and was due and payable in a single balloon
         payment of principal and interest on July 20, 2001; however, the note
         holder has extended the maturity date to April 30, 2002. As of June 24,
         2002, the Company is past due on all amounts due under these notes. The
         Note, including accrued interest, may be prepaid in full prior to
         maturity, without penalty. The note is collateralized by the Company's
         Uniform Resource Locator ("URL"), "parts.com," its "TradeMotion"
         software as well as its tangible and intangible property and equipment.

         The holder may convert the principal balance plus any accrued interest,
         before or at the scheduled maturity date of the note into shares of the
         Company's common stock. Of the $665,000 outstanding as of March 31,
         2002, $538,767 is convertible at the lower of $3.60 per share or 80% of
         the 5-day average closing bid price prior to the conversion date while
         $125,000 is convertible at the lower of $2.00 per share or 80% of the
         lowest closing bid price within five trading days preceding conversion.

         On September 28, 2001, the Company executed another convertible
         promissory with this same individual for up to a principal amount of
         $250,000, at the lenders option. At March 31, 2002, $185,000 was due
         under this agreement. The note bears interest at 10% per annum and all
         outstanding principal and interest was originally due and payable on
         December 4, 2001 and was extended to April 30, 2002. The holder may
         convert the principal and interest, or any portion thereof in an amount
         not less than $50,000, to shares of common stock of the Company at the
         lower of $0.75 per share or 80% of the average closing ask price for
         the 5 trading days preceding the conversion. The remaining $60,000 of
         principal plus related accrued interest thereon may be converted by the
         holder at the lower of $1.00 per share or 80% of the lowest closing bid
         price within five trading days preceding




                                       11
<PAGE>

         conversion. The note, including accrued interest, may be prepaid in
         full prior to maturity without penalty and is collateralized by the
         Company's tangible and intangible property consistent with the original
         note dated July 20, 2000 (as modified on March 30, 2001) described
         above.

         DOUGLAS NAGEL NOTES - On September 1, 2000, the Company executed a
         $250,000 Unsecured Convertible Promissory Note with an individual. The
         note bears interest at 10% per annum and was due and payable in a
         single balloon payment of principal and interest on September 1, 2001.
         The note, including accrued interest could have been prepaid in full
         prior to maturity, without penalty. Provided the note was not prepaid
         prior to maturity, the holder could have converted the principal
         balance of the note plus any accrued interest, before or at the
         scheduled maturity date of the note into shares of the Company's common
         stock at a conversion price of $3.75 per share.

         In December 2000, the Company revised the terms of the $250,000 note
         and the holder advanced an additional $300,000 under a new note. The
         outstanding principal under the replacement note ($550,000) plus
         interest at 10% is due and payable December 31, 2002. The note is
         collateralized by the Company's URL "parts.com" and the source code for
         the Company's TradeMotion Software only to the extent of the
         indebtedness under the note. The Company has the right to prepay the
         entire principal under the note and in the event that the Company
         repays the principal, the holder loses all collateral rights. The
         holder may convert the $300,000 in additional principal plus interest
         into common stock at a conversion price of $3.00 per share. The
         previously funded $250,000 remains convertible into common stock at
         $3.75 per share.

         In 2001, the holder advanced the Company an additional $411,667 and
         executed addendums to the note with the same terms as above. The holder
         received short-term options to acquire the Company's common stock, all
         of which expired in 2001. Also, as inducements to the rate at which the
         outstanding principal and interest is convertible into the Company's
         common stock. The new note agreement calls for conversion at the option
         of the holder any time prior to the maturity date on all outstanding
         principal and interest at the lower of $0.75 per share or 80% of the
         average closing price of the Company's common stock for the 5 business
         days preceding the date of conversion.

         On August 31, 2001, the Company also executed a credit line with this
         individual for a maximum principal draw of $500,000 at not more than a
         proposed amount of $50,000 per month at the lender's discretion. The
         monies were placed in an escrow account held by the Company's legal
         counsel. This credit line was effective beginning August 31, 2001 and
         ended on March 31, 2002. The credit line bears interest at 10% per
         annum. Through March 31, 2002, approximately $243,569 had been drawn
         against this line of credit agreement of which the lender has disputed
         a portion of these funds being released out of escrow.

         OTHER NOTES - On January 23, 2001 the Company executed a convertible
         promissory note with an individual in the amount of $50,000. The note
         bears interest at 10% per annum and is due and payable in a single
         balloon payment on January 23, 2002. As of June 24, 2002, the Company
         is past due on all amounts due under this note. The note, including
         accrued interest may be prepaid in full prior to maturity without
         penalty. The holder may convert the principal balance of the note plus
         any accrued interest, before or at the scheduled maturity date of the
         note into shares of the Company's Common Stock at a conversion price of
         $2.00 per share. The holder of the note had an option to loan up to an
         additional $150,000 prior to April 27, 2001, which the holder failed to
         exercise.

         In April 2001, the Company settled an outstanding payable balance in
         the amount of $107,562 by issuing a convertible promissory note payable
         in the amount of $52,500 with payments beginning August 16, 2001, and
         ending in December 2001. If the Company fails to make the initial
         payment, the balance owed is converted to common stock at $2.75 per
         share. As a result of this transaction, the Company recorded non-cash
         interest expense in the amount of $7,159 for the six months ended June
         30, 2001, for the beneficial conversion feature. On January 15, 2002,
         the Company settled this outstanding note payable through a lump-sum
         cash payment of $9,000. The remaining debt was forgiven by the lender
         and was recorded to other income-debt forgiveness on the income
         statement.

         The Company's real property was sold on October 17, 2001 to a
         shareholder of the Company. The Company issued a new note payable for
         $25,000 to the mortgage holder to cover the deficiency in the proceeds
         from the sale. Monthly principal and interest payments of $1,000 are
         due on this note.



                                       12
<PAGE>

3.       MORTGAGE NOTES PAYABLE

         On October 17, 2001, parts.com sold its real property located at 121
         East First Street, Sanford, FL and a nearby parking lot to a related
         party and entered into a new note payable in the amount of $25,000 with
         25 monthly payments of $1,000 each including principal and interest.

4.       STOCKHOLDERS' EQUITY

         The Company accounts for stock-based compensation using the intrinsic
         value method prescribed in Accounting Principles Board Opinion No. 25
         "Accounting for Stock Issued to Employees" (APB 25). Compensation cost
         for stock options, if any, is measured as the excess of the quoted
         market price of the Company's stock at the date of grant over the
         amount the employee must pay to acquire the stock. Restricted stock is
         recorded as compensation cost over the requisite vesting periods based
         upon the market value on the date of grant.

         Statement of Financial Accounting Standards No. 123, "Accounting for
         Stock-Based Compensation," (SFAS 123) established accounting and
         disclosure requirements using a fair-value based method of accounting
         for stock-based employee compensation plans. The Company has elected to
         remain on its current method of accounting as described above, and has
         adopted the disclosure requirements of SFAS No. 123.

         For the three months ended March 31, 2002, no employees of the Company
         or non employees were issued options to purchase any shares of the
         Company's common stock.

         During the three months ended March 31, 2002, the Company settled one
         outstanding payable and accrued expenses in the amount of $60,090 by
         issuing 200,000 shares of common stock of the Company to a related
         party (see Note 5).

         During the three months ended March 31, 2002, the Company issued
         250,000 shares of common stock of the Company to a related party as
         further consideration of the sale of real property located at 121 E.
         1st Street, Sanford, FL (the Company's headquarters) (see Note 5).

         During the three months ended March 31, 2002, the Company issued
         100,000 shares of common stock as bonus to one employee.

         During the three months ended March 31, 2002, the Company issued
         179,376 shares of common stock as payment for back salary owed to two
         officers and recognized additional stock-based compensation of
         approximately $8,000 as a result of this transaction.

5.       RELATED PARTY TRANSACTIONS

         During the three months ended March 31, 2002, Select Media Ltd., owned
         by an individual who indirectly owns more than 10% of the Common Stock
         of the Company, accepted 200,000 shares of common stock as payment for
         $60,090 worth of consulting fees for the period of July 2000 ($48,090
         in accrued expenses at December 31, 2001) through February 2002.

         During the three months ended March 31, 2002, New Era, Inc., a company
         owned by George Demakos, an affiliate who owns more then 10% of
         Parts.com, received 250,000 shares of common stock as additional
         consideration towards the property sold on October 17, 2001 and in
         consideration of approximately $12,000 due New Era, Inc. The Company
         recognized an additional loss on sale of property of approximately
         $63,000 in the March 31, 2002 financial statements as a result of this
         transaction.

         During the three months ended March 31, 2002, Hotel Discount Network,
         whose partial ownership owns more than 10% of the Common Stock of the
         Company, loaned the Company a total of $3,150, payable on demand and
         bearing interest at 10%. The Company has not re-paid any of this note
         payable or interest as of March 31, 2002.

         During the three months ended March 31, 2002, Scott Anderson, a related
         party and employee of the Company received $6,618 in principal payments
         against his January 1, 2001 $20,000 note, which is payable on demand
         and bears interest at 10%. During the three months ended March 31,
         2001, all accrued interest was paid in full as well.

6.       COMMITMENTS AND CONTINGENCIES

         In March 2002, the Company entered into new employment agreements with
         Shawn Lucas, President, CEO and interim CFO and Scott Anderson, Chief
         Technology Officer, both of




                                       13
<PAGE>

         whom are the only active members of the Company's Board of Directors.
         Generally, the employment agreements provide for annual salaries of
         $190,000 each subject to increases in the subsequent years. The
         agreements also provide for a special one-time performance and merit
         bonus of 10% of Employees then Base Salary by January 4, 2003.

         These agreements provide for the grant of three types of options to
         purchase shares of the Company's common stock with preferred shares
         being issued in the event common shares are not available at the time
         of conversion. A total of 150,000 shares of common stock a year for
         term of the agreement at a strike price of $0.01 per share.
         Additionally, The Performance Options have a $0.32 strike price and a
         ten (10) year contractual life. Each employee is entitled to receive
         100,000 Performance options, subject to immediate vesting, if the per
         share closing price of the Company's common stock is $0.75 or greater
         for five (5) consecutive closes. Furthermore, each executive was
         entitled to receive an additional 100,000 shares of common stock for
         each additional increment of $0.25 in stock price (e.g. $1.00, $1.25,
         $1.50, etc.) for which the closing price is at or above that level for
         five (5) consecutive closes. As these targets have not yet been
         achieved, no Performance Options have been awarded and, therefore, no
         compensation expense has been recorded. The Performance Options, once
         awarded, will be subject to variable accounting treatment prescribed by
         APB 25, which generally provides that estimated compensation cost will
         be measured and recorded based on the fair value of the Company's
         common stock as of each reporting date (in this instance, March 31,
         2002) until the options are exercised, forfeited, or expire
         unexercised.

         The Company was unable to meet its payroll obligations to Shawn Lucas
         and Scott Anderson and, accordingly, was in violation of their
         employment agreements described above.

         The Company does not have enough shares of common stock authorized to
         cover the potential shares that could be issued as a result of the
         convertible promissory notes and unexercised stock options.


7.       SUBSEQUENT EVENTS

         Between April 5, 2002 through June 11, 2002, the Company executed
         promissory notes and received $51,500 from Hotel Discount Network. The
         notes are all payable in 12 months and bear 10% interest.

         On April 10, 2002, the Company returned to treasury 47,200 shares,
         which were originally issued primarily to various former employees.

         Between April 24, 2002 through June 20, 2002, the Company executed
         various promissory notes and received $50,000 from an accredited
         investor. The notes are payable in 12 months and bear 10% interest.

         On June 13, 2002, the Company executed a promissory note and received
         $1,050 from New Era, Inc., a company owned by George Demakos, an
         affiliate who owns more then 10% of Parts.com. The note is payable in
         12 months and bears 10% interest.





                                       14
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES THERETO
INCLUDED IN THIS QUARTERLY REPORT, AS WELL AS THE AUDITED FINANCIAL STATEMENTS
AND NOTES THERETO INCLUDED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE
YEAR ENDED DECEMBER 31, 2001 AS FILED WITH THE SEC ON MAY 20, 2002.

The statements contained in this Report on Form 10-QSB, that are not purely
historical, are forward looking information and statements within in the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These include statements regarding our expectations,
intentions, or strategies regarding future matters. All forward looking
statements included in this document are based on information available to us on
the date hereof. It is important to note that our actual results could differ
materially from those projected in such forward looking statements contained in
this Form 10QSB. The forward looking statements contained herein are based on
current expectations that involve numerous risks and uncertainties. Assumptions
relating to the foregoing involve judgments regarding, among other things our
ability to secure financing or investment for capital expenditures, future
economic and competitive market conditions, and future business decisions. All
these matters are difficult or impossible to predict accurately and many of
which may be beyond our control. Although we believe that the assumptions
underlying our forward looking statements are reasonable, any of the assumptions
could be inaccurate and, therefore, there can be no assurance that the forward
looking statements included in this form 10QSB will prove to be accurate.

OVERVIEW

All references to "we", "us", "our", "our company", the "Company" or "Parts.com"
in this report refer to Parts.com, Inc., a Nevada Corporation. Parts.com (the
"Company") is a business-to-business electronic commerce software and parts
procurement platform provider. The Company's e-procurement solutions enable
corporations to use electronic automation to streamline business transactions
and reduce costs. The Company's line of cost-effective, scalable, Web-based
business-to-business and business-to-consumer sales and procurement software may
fit the needs of any parts business serving any vertical industry. In addition
to automating existing relationships between buyers and sellers, parts.com also
provides a marketplace where buyers and sellers can conduct transactions
electronically.

Our focus of operations is the franchised new car dealer industry with our
e-commerce web site located at www.parts.com. We believe the automotive industry
is particularly well suited for on-line services for the procurement and
distribution of automotive parts and accessories (hereinafter collectively
referred to as "automotive parts") for several reasons. First, it is an existing
business community linked on-line for the distribution of automotive parts.
Second, there is a large market for automotive parts. Third, the national,
regional and local dynamics are excellent for implementing our Internet-based
business model. Fourth, we perceived a need in the automotive parts industry for
a more efficient method to access inventory and distribute automotive parts
because there exists no standardized means of communication between businesses
in that industry. We believe our business model will afford us a competitive
advantage over the current methods of parts procurement and locating of
automotive parts. We have designed our Internet-based business model to provide
access to a "virtual" inventory of automotive parts. We anticipate that our
Internet-based business model will offer cost advantages to both the franchised
dealer, mechanical and collision repair facilities and consumers of automotive
parts as a result of: improving inventory management by having access to "real
time" information on inventory status and sales trends; minimizing the time and
labor involved in trying to locate a part; improving margins on automotive parts
for certain automotive businesses by providing them access, through parts.com,
to the inventory of manufacturers of automotive parts who are part of the
parts.com automotive parts community.

As noted in the Company's Form 10-KSB for the year ended December 31, 2001, the
Company has experienced significant operating losses and an accumulated deficit,
which raise doubt about the Company's ability to continue as a going concern.
However, the Company showed net profit of $188,595 for the three months ended
March 31, 2002 primarily as a result of a non cash gain of approximately
$650,000 from the settlement of various outstanding payables. The Company had an
accumulated deficit of $28,518,639 at March 31, 2002. The Company is continuing
its efforts to increase its sales volume and attain a profitable level of
operations. However, there is no assurance that the Company's efforts will be
successful. There are many events and factors in connection with the development
of, manufacture and sale of the Company's products over which the Company has
little or no control, including without limitation, marketing difficulties, lack
of market acceptance of our products, superior competitive products based on
future technological innovation and continued growth of e-commerce businesses.
There can be no assurance that future operations will be profitable or will
satisfy future cash flow requirements.




                                       15
<PAGE>

RESULTS OF OPERATIONS - Three Months Ending March 31, 2002

During the three months ended March 31, 2002, total revenues amounted to
$132,065 versus $134,128 for the three months ended March 31, 2001. In the first
quarter 2002, revenue was primarily derived from software development sales of
$$86,500. Additional revenue in the amount of $16,450 was derived from the
recognition of 2001 storefront contracts, while the remaining revenue was
derived from 2002 storefront contract sales. In contrast, first quarter 2001
revenue was recognized due primarily to territory fees from Platinum, Gold, and
Silver sales, which such sales have since been discontinued. Additional revenues
in the amount of $4,040 were generated from storefront sales.

The Company generated a gross profit of $15,875 for the three months ended March
31, 2002 compared to a gross profit of only $2,570 for the three months ended
March 31, 2001. The primary reason for the higher profit margin from 2002 to
2001 is due a significant decrease in COGS-Payroll expenditures. The Company
incurred $100,165 for COGS-Payroll expense in the three months ended 2001 as
opposed to only $49,608 for the three months ended March 31, 2002.

The Company experienced a net profit for the three months ended March 31, 2002
of $188,595 as compared with a net loss of $1,214,199 for the three months ended
March 31, 2001. This decrease in net loss was primarily attributable to two main
factors. First the company decreased operating and other expenses by $934,000
for the three months ended March 31, 2002 as compared to the same period last
year. Secondly, the company settled a significant amount of outstanding accounts
payable through a settlement offer, which averaged $0.12/dollar. This settlement
offer resulted in debt forgiveness other income in the amount of $650,714.

A detailed review of the decrease in operating expenses reveals the following.
First, the Company decreased its workforce from 26 full-time employees at March
31, 2001 to 7 full-time employees at March 31, 2002. This decrease resulted in
approximately $78,000 (48%) less in payroll expense for the three months ended
March 31, 2002 as compared to the three Months ended March 2001. Second,
stock-based employee compensation totaled $53,210 for the three months ended
March 31, 2002 as compared to $267,474 for the same period last year. Finally,
amortization expense for the three months ended March 31, 2002 totaled only
$2,394 for the three months ended March 31, 2002 as compared to 258,210 for the
three months ended March 31, 2001. Amortization expense was significantly
reduced in 2002 because the Flex Patent was fully impaired in the fourth quarter
of 2001. Mortgage interest expense was also eliminated in 2002 since the real
property owned by the Company was sold in the fourth quarter 2001, resulting in
a savings of approximately $14,250 during the first quarter 2002. Additionally,
commissions for territory fees and software development income were eliminated
in 2002, resulting in a savings of approximately $19,542 during the first
quarter 2002. Also, noncash interest recorded during the three months ended
March 31, 2002 $23,000 as compared to $230,988 during the three months ended
March 31, 2001 due to beneficial conversion features associated with the
issuance of promissory notes which are convertible into shares of Company's
common stock at prices below the fair market value of the stock on the dates the
notes were issued. Further, professional fees during the three months ended
March 31, 2002 totaled only $3,442 as compared to $87,887 during the three
months ended March 31, 2001, resulting in a savings of approximately $84,445.

Partially offsetting the significant reductions during the first quarter 2002
was a credit recorded to Shareholder Relations associated with the settlement of
$55,062 of outstanding accounts payable.

LIQUIDITY AND SOURCES OF CAPITAL

Since its inception, the Company has sustained recurring losses from operations
that to date, total $28,518,639. The Company used $105,045 and $414,167 of cash
in operations for the three months ended March 31, 2002 and 2001, respectively
and anticipates additional cash needs in the remainder of 2002. At March 31,
2002, the Company had a working capital deficiency of $3,342,300 and cash of
$185. The Company also has not deposited all of the back payroll taxes with the
Internal Revenue Service ("IRS") for the period July 1, 2000 through March 31,
2002, resulting in an accrual for back payroll taxes in the amount of
approximately $378,036 as of March 31, 2002, including penalties and interest.
Subsequent to March 31, 2002, there have been no additional deposits paid to the
IRS towards this obligation.

The IRS issued a levy against the Company's three bank accounts on April 23,
2002. The Company is currently negotiating a payment plan with the IRS, but no
formal or informal payment plan or forbearance agreement has been reached. Due
to cash deficiencies, the Company has also been unable to pay former members of
senior management and other non-management regular salary when due, which
resulted in an accrual for back salaries of approximately $181,047 as of March
31, 2002. These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern for a reasonable period of
time. The accompanying condensed




                                       16
<PAGE>

consolidated financial statements do not include any adjustments relating to the
outcome of this uncertainty.

The Company's continuation as a going concern is dependent upon its ability to
generate sufficient cash flow to meet its obligations on a timely basis. The
Company's primary source of liquidity has been from the cash generated by its
operations and through the private placement of equity and debt securities. The
Company has altered its business model and taken actions to reduce its cash
needs, such as significant reductions in its workforce to attempt to stabilize
its financial condition. The Company continues developing its technology known
as "TradeMotion Solutions" and continues implementation of a marketing campaign
in order to gain market acceptance of same and to eventually achieve profitable
operations. However, there can be no assurance that the Company will be
successful in achieving profitability or acquiring additional capital. Without
short or long-term financing, in order to meet its current and future capital
needs, the Company will depend on cash receipts from transaction fee revenue
generated from its e-commerce web site, license fees from the sale of its
software and proceeds from the sale of additional shares of common stock or the
issuance of debt securities. The Company is actively pursuing other sources of
new cash financing, but has not completed such financing and cannot provide any
assurances as to whether such financing will be completed. Furthermore, there
can be no assurance that additional financing will be available when needed or
that if available, such financing will include terms acceptable to our
stockholders or management. The availability of such financing is essential for
the Company to continue to meet operating obligations and continue as a going
concern.

Since its reverse merger and 504 offering conducted in September 1998, the
Company has financed its operations primarily through cash receipts from annual
territory fees, equity private placements and most recently, proceeds from the
issuance of convertible notes payable and software development fees. At March
31, 2002, the Company had $185 of cash and a working capital deficiency of
$3,342,300. As these funds have been largely used for operating purposes as of
the date of this report, the Company requires additional financing in the near
future to fund operations. The Company is actively pursuing other sources of new
cash financing, but has not completed such financing and cannot provide any
assurances to whether such financing will be completed. Furthermore, there can
be no assurance that additional financing will be available when needed or that
if available, such financing will include terms favorable to our stockholders or
us. The availability of such financing is essential for the Company to continue
to meet operating obligations and continue as a going concern.


                                OTHER INFORMATION

CHAGNES IN SECURITIES AND USE OF UNREGISTERED SECURITIES

From January 1, 2002 through March 31, 2002, the Company did not issue any
common stock for the purpose of raising capital in private placements.


EMPLOYMENT AGREEMENTS

In March 2002, the Company entered into new employment agreements with Shawn
Lucas, President, CEO and interim CFO and Scott Anderson, Chief Technology
Officer, both of whom are the only active members of the Company's Board of
Directors. Generally, the employment agreements provide for annual salaries of
$190,000 each subject to increases in the subsequent years. The agreements also
provide for a special one-time performance and merit bonus of 10% of Employees
then Base Salary by January 4, 2003.

These agreements provide for the grant of three types of options to purchase
shares of the Company's common stock with preferred shares being issued in the
event common shares are not available at the time of conversion. A total of
150,000 shares of common stock a year for term of the agreement at a strike
price of $0.01 per share. Additionally, The Performance Options have a $0.32
strike price and a ten (10) year contractual life. Each employee is entitled to
receive 100,000 Performance options, subject to immediate vesting, if the per
share closing price of the Company's common stock is $0.75 or greater for five
(5) consecutive closes. Furthermore, each executive was entitled to receive an
additional 100,000 shares of common stock for each additional increment of $0.25
in stock price (e.g. $1.00, $1.25, $1.50, etc.) for which the closing price is
at or above that level for five (5) consecutive closes. As these targets have
not yet been achieved, no Performance Options have been awarded and, therefore,
no compensation expense has been recorded. The Performance Options, once
awarded, will be subject to variable accounting treatment prescribed by APB 25,
which generally provides that estimated compensation cost will be measured and
recorded based on the fair value of the Company's common stock as of each
reporting date (in this instance, March 31, 2002) until the options are
exercised, forfeited, or expire unexercised.




                                       17
<PAGE>

The Company was unable to meet its payroll obligations to Shawn Lucas and Scott
Anderson and, accordingly, was in violation of their employment agreements
described above.

LEGAL PROCEEDINGS

The company is subject to lawsuits and claims arising out of the conduct of its
business. Management believes that the probable resolution of such matters will
not materially affect the financial position, results of operations or cash
flows of the company.

On or about, March 11, 2002, we received a lawsuit from Mr. Douglas Nagel
requesting that the company wire back $302,061.21 being held in the company's
trust account. Subsequently, the company authorized its counsel to wire back the
balance of the funds in escrow which totaled $236,406.70. The difference of
$65,654.51 was used in the settlement of various account payables. Mr. Nagel and
the company have not pursued additional legal action, claims or counter claims
and continue to negotiate the terms of a new agreement.

We believe that there are no other claims or actions pending or threatened
against us, the ultimate disposition of which would have a material adverse
effect on us.


SIGNATURES

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


                                        PARTS.COM, INC.



June 24, 2002                           By: /s/ Shawn D. Lucas
                                            ------------------------------------
                                            Shawn D. Lucas, President and
                                            Chief Financial Officer









                                       18