<PAGE>   1

                     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 June 30, 2001

                          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.

                                 [X] YES NO [ ]

                    As of June 30, 2001, there were 3,045,165
                       shares of common stock outstanding.


                                       1
<PAGE>   2

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
June 30, 2001 and December 31, 2000                                 3-4

Condensed Consolidated Statements of Operations for the Three
And Six Months Ended June 30, 2001 and 2000                           5

Condensed Consolidated Statement of Stockholders' Equity for
The Six Months Ended June 30, 2001                                    6

Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2001 and 2000                             7-8

Notes to Condensed Consolidated Financial Statements               9-14

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

Other Information and Signatures                                  18-19
</TABLE>

               SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

This report contains forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
Reference is made in particular to the description of our plans and objectives
for future operations, assumptions underlying such plans and objectives, and
other forward-looking statements included in this report. Such statements may be
identified by the use of forward-looking terminology such as "may," "will,"
"expect," "believe," "estimate," "anticipate," "intend," "continue," or similar
terms, variations of such terms or the negative of such terms. Such statements
are based on management's current expectations and are subject to a number of
factors and uncertainties, which could cause actual results to differ materially
from those, described in the forward-looking statements. Such statements address
future events and conditions concerning capital expenditures, earnings,
regulatory matters, market for products and services and liquidity and capital
resources. Actual results in each case could differ materially from those
anticipated in such statements by reason of factors such as future economic
conditions, changes in consumer demand, legislative, regulatory and competitive
developments in markets in which we operate, and other circumstances affecting
anticipated revenues and costs. We expressly disclaim any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in our expectations with
regard thereto or any change in events, conditions or circumstances on which any
such statement is based. Additional factors that could cause such results to
differ materially from those described in the forward-looking statements are set
forth in connection with the forward-looking statement.


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<PAGE>   3

                         PARTS.COM, INC. AND SUBSIDIARY
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                     ASSETS

<TABLE>
<CAPTION>
                                                           June 30          December 31
                                                             2001              2000
                                                          ----------        -----------

<S>                                                       <C>               <C>
CURRENT ASSETS:

Cash                                                      $   61,636        $    8,683
Accounts receivable, net of allowance for doubtful
  accounts of $0 and $77,863 respectively                     10,000            10,751
Prepaid expenses and
  other current assets                                        33,110            67,323
                                                          ----------        ----------
Total Current Assets                                         104,746            86,757

PROPERTY AND EQUIPMENT, net of accumulated
  depreciation of $334,996 and 257,216,
  respectively                                               828,562           929,084

DEFERRED LOAN COSTS, net of accumulated
  amortization of $32,945 and $25,343,
  respectively                                               225,555           233,157

OTHER ASSETS, net of accumulated
  amortization of $955,291 and $897,351,
  respectively                                                39,230           104,634

PATENT, net of accumulated amortization of
  $2,036,980 and $1,532,950, respectively
                                                           3,360,202         3,864,232
                                                          ----------        ----------
Total Assets                                              $4,558,295        $5,217,864
                                                          ==========        ==========
</TABLE>

      See Accompanying Notes to Condensed Consolidated Financial Statements


                                       3
<PAGE>   4

                         PARTS.COM, INC. AND SUBSIDIARY
          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED), CONTINUED

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                   June 30           December 31
                                                                                     2001                2000
                                                                                 ------------        ------------

<S>                                                                              <C>                 <C>
CURRENT LIABILITIES:

Accounts payable and accrued expenses                                            $    584,424        $    915,455
Other current liabilities                                                             646,545             801,070
Current portion of mortgage notes payable                                             398,083             381,562
Convertible promissory notes, net of unamortized debt discount of
  $43,157 and $0, respectively                                                      1,641,010           1,050,000
Notes payable - related party                                                         123,800              61,928
Deferred revenue                                                                      261,561             513,108
                                                                                 ------------        ------------
Total Current Liabilities                                                           3,655,423           3,723,123


LONG-TERM PORTION OF MORTGAGE NOTES PAYABLE                                                --              16,521
                                                                                 ------------        ------------
Total Liabilities                                                                   3,655,423           3,739,644
                                                                                 ------------        ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

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, 3,045,165 and
  2,778,569 shares issued and outstanding, respectively                                 3,045               2,778

Additional paid-in capital                                                         23,666,879          22,592,466

Accumulated deficit                                                               (22,446,203)        (20,623,965)

Deferred stock-based employee compensation                                           (320,849)           (493,059)
                                                                                 ------------        ------------
Total Stockholders' Equity                                                            902,872           1,478,220
                                                                                 ------------        ------------
Total Liabilities and Stockholders' Equity                                       $  4,558,295        $  5,217,864
                                                                                 ============        ============
</TABLE>

      See Accompanying Notes To Condensed Consolidated Financial Statement


                                       4
<PAGE>   5

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

<TABLE>
<CAPTION>
                                            Three Months Ended               Six Months Ended
                                                  June 30                         June 30
                                        ----------------------------    ----------------------------
                                            2001            2000            2001            2000
                                        ------------    ------------    ------------    ------------

<S>                                     <C>             <C>             <C>             <C>
NET SALES                               $    493,058    $    336,886    $    627,184    $    382,130

COST OF SALES                                121,744         188,856         253,302         469,397
                                        ------------    ------------    ------------    ------------

         GROSS PROFIT (LOSS)                 371,314         148,030         373,882         (87,267)
                                        ------------    ------------    ------------    ------------
SELLING, GENERAL AND
    ADMINISTRATIVE EXPENSES:

   Stock-based employee compensation          71,160         203,400         338,634       2,040,061

   Stock-based consulting fees               129,623         139,918         155,216         139,918

   Other                                     320,479       1,262,317         683,478       2,912,075

   Amortization                              258,210         439,920         516,420         974,767

   Depreciation                               38,145          47,111          77,779          72,198

INTEREST, Net (inclusive of noncash
 interest of $121,669, $0, $352,657,
 and $0, respectively)                       161,736          14,802         424,593          22,264

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

         TOTAL EXPENSES                      979,353       2,107,468       2,196,120       6,161,283
                                        ------------    ------------    ------------    ------------

NET LOSS                                $   (608,039)   $ (1,959,438)   $ (1,822,238)   $ (6,248,550)
                                        ============    ============    ============    ============
BASIC AND DILUTED NET LOSS
    PER COMMON SHARE                    $      (0.20)   $      (0.82)   $      (0.63)   $      (2.66)
                                        ============    ============    ============    ============
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                 2,966,810       2,385,813       2,884,252       2,348,071
                                        ============    ============    ============    ============
</TABLE>

      See Accompanying Notes To Condensed Consolidated Financial Statements


                                       5
<PAGE>   6

                         PARTS.COM, INC. AND SUBSIDIARY
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
             FOR THE SIX MONTHS ENDED JUNE 30, 2001 (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, 2000          2,778,569    $2,778    $ 22,592,466    $  (20,623,965)   $ (493,059)   $  1,478,220

Issuance of common stock
  for cash in private placements        60,000        60         119,940                                         120,000

Issuance of common stock to
  employees                            125,577       126         331,443                         (10,800)        320,769

Issuance of convertible
  debt with warrants and
  a beneficial conversion
  feature                                                        395,814                                         395,814

Issuance of common stock
  for services                          81,019        81         227,216                                         227,297

Amortization of employee
  stock-based compensation                                                                       183,010         183,010

Net loss for the period                                                         (1,822,238)                   (1,822,238)
                                    ----------    ------    ------------    --------------    ----------    ------------
Balance - June 30, 2001              3,045,165    $3,045    $ 23,666,879    $  (22,446,203)   $ (320,849)   $    902,872
                                    ==========    ======    ============    ==============    ==========    ============
</TABLE>

      See Accompanying Notes To Condensed Consolidated Financial Statements


                                       6
<PAGE>   7

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

<TABLE>
<CAPTION>
                                                                                 Six Months Ended June 30
                                                                               ----------------------------
                                                                                   2001            2000
                                                                               ------------    ------------

<S>                                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                                                       $ (1,822,238)   $ (6,248,550)

Adjustments to reconcile net loss to net cash used in operating activities:
  Amortization                                                                      516,420         974,767
  Depreciation                                                                       77,779          72,198
  Noncash interest expense                                                          352,657              --
  Stock-based compensation                                                          493,850       2,179,979

Changes in operating assets and liabilities:
  Receivables                                                                           751          15,821
  Prepaid expenses and other current assets                                          34,213         (41,439)
  Deferred revenue                                                                 (251,547)        378,721
  Accounts payable and accrued expenses                                              67,725         242,287
  Other current liabilities                                                        (154,525)        104,165
                                                                               ------------    ------------
Net cash used in operating activities                                              (684,915)     (2,322,051)
                                                                               ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property and equipment                                                  (2,258)       (180,385)
Payments for other assets                                                                --          (1,410)
                                                                               ------------    ------------
Net cash used in investing activities                                                (2,258)       (181,795)
                                                                               ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from note payable                                                               --          23,600
Repayments of note payable                                                               --         (23,600)
Proceeds from convertible promissory notes                                          581,667              --
Proceeds from related party notes payable                                           128,500              --
Repayment of related party notes payable                                            (90,041)             --
Proceeds from issuance of common stock                                              120,000       1,334,959
Repayments of bank and other note payable                                                --          (1,298)
Repayments of capitalized leases                                                         --         (10,113)
                                                                               ------------    ------------
Net cash provided by financing activities                                           740,126       1,323,548
                                                                               ------------    ------------
INCREASE/(DECREASE) IN CASH                                                          52,953      (1,180,298)
CASH, AT BEGINNING OF PERIOD                                                          8,683       1,180,833
                                                                               ------------    ------------
CASH, AT END OF PERIOD                                                         $     61,636    $        535
                                                                               ============    ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for interest                                       $      3,225    $     29,712
                                                                               ============    ============
</TABLE>


                                       7
<PAGE>   8

                        SUPPLEMENTAL SCHEDULE OF NONCASH
                        INVESTING & FINANCING ACTIVITIES

Six Months Ended June 30, 2001:

Accounts payable and accrued expenses in the amount of $297,843 settled through
         issuance of common stock.

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

Accounts payable and accrued expenses in the amount of $23,413 converted to
         related party notes payable.

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

Debt discount in the amount of $56,515 (unamortized balance of $43,157 as of
         June 30, 2001) due to issuance of convertible debt with detachable
         warrants.

Six Months Ended June 30, 2000:

Issuance of 6,000 shares of common stock in connection with the appointment of
         two independent directors, in the aggregate amount of $719,100.

Issuance of 13,500 shares of common stock in connection with employment
         contracts and employee bonuses, in the aggregate amount of $1,350,308.

Issuance of 4,250 shares of common stock in payment of $165,089 of consulting
         fees.

Issuance of 1,000 shares for advertising costs valued at $65,250. At June 30,
         2000, $43,500 of such costs were recorded as prepaid expenses.

      See Accompanying Notes To Condensed Consolidated Financial Statements


                                       8
<PAGE>   9

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

1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

         ORGANIZATION - Parts.com, Inc. and its wholly owned subsidiary,
         FlexRadio, Inc. (the "Company") is a provider of Internet-based
         business and online buying solutions. 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 OTC Bulletin Board.

         Parts.com 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 fits 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. While the Company has two principal
         divisions, "parts.com" and "ReallyKnow.com," it has chosen to focus its
         resources on "parts.com" as the latter division is still in an early
         marketing stage.

         GOING CONCERN - The accompanying condensed 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. Since its inception, the Company has
         sustained recurring losses from operations that to date, total
         $22,446,203. The Company used $684,915 and $2,322,591 of cash in
         operations for the six months ended June 30, 2001 and 2000,
         respectively, and anticipates additional cash needs in the remainder of
         2001. At June 30, 2001, the Company had a working capital deficiency of
         $3,550,677 and cash of $61,636. The Company has not deposited all of
         the back payroll taxes with the Internal Revenue Service ("IRS") for
         the period April 2000 through November 2000. Through June 30, 2001,
         $50,000 was deposited, reducing the accrual for back payroll taxes to
         approximately $341,000 as of June 30, 2001, including penalties and
         interest. An additional deposit was made subsequent to June 30, 2001 in
         the amount of $25,000.

         The IRS issued a levy against two of the Company's three bank accounts
         on April 30, 2001. 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 a member of senior management his regular
         salary when due, which has resulted in an accrual for back salaries of
         approximately $27,000 as of June 30, 2001. The Company is also in
         default of mortgage note obligations encumbering its principal offices
         as of June 30, 2001 (see Note 3). 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
         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 an aggressive


                                       9
<PAGE>   10

         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 annual territory
         fees, 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 the
         Company's 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 quarters and six months ended
         June 30, 2001 and 2000 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, necessary to present fairly the financial
         position as of June 30, 2001 and the results of the Company's
         operations and its cash flows for the six months and quarter ended June
         30, 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 six-month period ended June 30, 2001 are
         not necessarily indicative of the results to be expected for any
         subsequent quarter or the entire fiscal year ending December 31, 2001.
         The condensed consolidated balance sheet at December 31, 2000 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 the Company's audited
         financial statements and notes thereto for the year ended December 31,
         2000 as included in the Company's report on Form 10-KSB as filed with
         the SEC on April 17, 2001.

         PRINCIPLES OF CONSOLIDATION - The accompanying condensed consolidated
         financial statements include the accounts of parts.com Inc., and its
         wholly owned subsidiary FlexRadio, Inc. All significant intercompany
         transactions and balances have been eliminated for all periods
         presented.

         STOCK SPLIT - On June 15, 2001, the Board of Directors approved a
         reverse stock split of common stock of 1 share for 10 shares effective
         June 27, 2001. All common stock and per share information has been
         retroactively restated to reflect this reverse split for all periods
         presented.

         USE OF ESTIMATES - 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 reported period. Actual results could differ from these
         estimates.

         REVENUE AND EXPENSE RECOGNITION - Revenues are generally recognized
         when the service has been performed and related costs and expenses are


                                       10
<PAGE>   11

         recognized when incurred. Contracts for the development of software
         that extend over more than one reporting period are accounted for using
         the percentage-of-completion method of accounting. Revenue recognized
         at the financial statement date under these contracts is that portion
         of the total contract price that costs expended to date bears to the
         total anticipated final cost, based on current estimates of cost to
         complete. Revisions in total costs and earnings estimates during the
         course of the contract are reflected in the accounting period in which
         the circumstances necessitating the revisions become known. At the time
         a loss on a contract becomes known, the entire amount of the estimated
         loss is recognized in the financial statements. Costs attributable to
         contract disputes are carried in the accompanying condensed
         consolidated balance sheet only when realization is probable. Amounts
         received on contracts in progress in excess of the revenue earned,
         based upon the percent of completion method, are recorded as deferred
         revenue and the related costs and expenses incurred are recorded as
         deferred costs.

         Parts.com transaction fee revenues on business-to-business and consumer
         sales will be recognized at the time the transaction is completed.
         Because individual sellers, rather than the Company, make the actual
         product sale, the Company will have no cost of goods sold, no
         procurement, carrying or shipping costs and no inventory. A substantial
         majority of consumer accounts will be settled by directly charging
         credit card numbers provided by sellers. Provisions for estimated
         uncollectible accounts and authorized credits will be recorded as
         percentages of revenues and will be provided for at the time of revenue
         recognition.

         The Company charges annual territory fees to customers based upon each
         level of distribution and vehicle line that the customer purchases.
         Initially, annual fees were to be amortized into income over a period
         not to exceed 12 months commencing with the date the customer begins
         fulfilling parts orders for the web site. Effective October 2000, the
         Company extended the customer contracts through December 31, 2001. As a
         result of the change, fees are now amortized into income over a total
         of 21 months. Unamortized fees are recorded as deferred revenue. Sales
         commissions associated with annual territory fees are recorded as
         prepaid expenses and are charged against income as the revenue is
         recognized.

         RECENT PRONOUNCEMENTS - In June 2001, the Financial Accounting
         Standards Board (FASB) issued two new pronouncements: Statement of
         Financial Accounting Standards (Statement) No. 141, "Business
         Combinations" (Statement 141) and Statement No. 142, "Goodwill and
         Other Intangible Assets" (Statement 142). Statement 141 prohibits the
         use of the pooling-of-interest method for business combinations
         initiated after June 30, 2001 and also applies to all business
         combinations accounted for by the purchase method that are completed
         after June 30, 2001. There are also transition provisions that apply to
         business combinations completed before July 1, 2001, that were
         accounted for by the purchase method. Statement 142 is effective for
         fiscal years beginning after December 15, 2001 to all goodwill and
         other intangible assets recognized in an entity's statement of
         financial position at that date, regardless of when those assets were
         initially recognized. The Company is currently evaluating the impact of
         the provisions of Statement 141 and Statement 142 on the Company's
         financial statements and has not adopted such provisions in its June
         30, 2001 financial statements.

2.       CONVERTIBLE PROMISSORY NOTES

         On July 20, 2000, the Company executed a convertible promissory 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, all of which were received during the six
         months ended June 30, 2001 ($50,000 received March 30; $65,000 received
         April 5; and $50,000 received June 8), resulting in an outstanding
         balance of $665,000 as of June 30, 2001. The 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 September 4, 2001. The note, including
         accrued interest may be prepaid in full prior to maturity without
         penalty. The note is collateralized by the Company's real property
         located in Sanford, Florida, and the Company's Uniform Resource Locator
         ("URL"), "parts.com," and is subordinate to $380,000 of existing
         indebtedness applicable to such property.

         Provided the note has not been prepaid prior to maturity, 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 June 30,
         2001, $540,000 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 $2.00 per share.

         On September 1, 2000, the Company executed a $250,000 unsecured
         Convertible Promissory Note with a second individual. The note bears
         interest


                                       11
<PAGE>   12

         at 10% per annum and is due and payable in a single balloon payment of
         principal and interest on September 1, 2001. The note, including
         accrued interest can be prepaid in full prior to maturity, without
         penalty. Provided the note has not been prepaid prior to maturity, the
         holder can 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 $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, 2001. 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 repay 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 February and March 2001, the holder advanced the Company an
         additional $200,000 and executed addendums to the note with the same
         terms as above, except that the additional $200,000 is convertible into
         common stock at the price of $2.00 per share. Also, as an inducement to
         fund the additional $200,000, the holder received a 90-day option to
         acquire 50,000 shares of the Company's stock at $2.00 per share, which
         expired April 30, 2001. In May 2001, the holder advanced an additional
         $100,000 under an amended convertible promissory note; this installment
         is convertible into common stock at the price of $2.00 per share. As an
         inducement to fund the additional $100,000, the holder received a
         96-day option to acquire 100,000 shares of the Company's stock at $2.00
         per share. In June 2001, the holder advanced the Company an additional
         $66,667 under an amended convertible promissory note; this installment
         is convertible into common stock at the price of $1.00 per share.

         On January 23, 2001 the Company executed a convertible promissory note
         with a third 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. The note, including accrued interest may
         be prepaid in full prior to maturity without penalty. Provided the
         note has not been prepaid prior to maturity, 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.

         Due to the fair value of the beneficial conversion feature and
         detachable warrants associated with the notes issued during the six
         months ended June 30, 2001 totaling $581,667, the Company recorded a
         $395,814 debt discount and corresponding credit to additional paid in
         capital, $352,657 of which was recorded as noncash interest expense.

3.       MORTGAGE NOTES PAYABLE

         As of December 31, 2001 the Company was in default of a mortgage note
         payable for failure to remit monthly principal and interest payments.
         However, the Company entered into an agreement in March 2001 with its


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<PAGE>   13

         mortgage lender which provided for the deferral of pursuing any
         remedies available under the mortgage note payable agreement until
         after May 18, 2001 in exchange for the transfer of 10,000 total
         officers' and directors' personal shares, which were pledged as
         collateral for the notes. As payments have not resumed and no other
         agreements have been entered into deferring action by the mortgagor,
         the Company is in default. The Company is currently negotiating the
         assignment of the mortgage note payable to a related party; however, no
         formal agreement has been reached.

4.       STOCKHOLDERS' EQUITY

         For the six months ended June 30, 2001, no employees of the Company or
         nonemployees were issued options to purchase any shares of the
         Company's common stock.

         During the six months ended June 30, 2001, the Company settled several
         outstanding payables in the amount of $297,843 by issuing common stock
         of the Company.

5.       RELATED PARTY TRANSACTIONS

         During the six months ended June 30, 2001, Select Media Ltd., owned by
         an individual who indirectly owns more than 10% of the common stock of
         the Company, loaned the Company a total of $28,500, payable on demand
         and bearing interest at 10%. The Company repaid the loans in full
         during the six months ended June 30, 2001. Also during the six months
         ending June 30, 2001, the Company repaid this individual $8,000 as
         partial payment on other loans made to the Company prior to 2001.
         Additionally, the Company converted $21,106 of expense reimbursements
         owed to this individual accrued through June 30, 2001 to a note payable
         bearing 13% annual interest which is due and payable on demand.

         During the six months ended June 30, 2001, New Era, Inc., owned by an
         individual who indirectly owns more than 10% of the common stock of the
         Company, loaned the Company a total of $80,000 under two notes payable,
         both due and payable on demand and bearing interest at 13% for $50,000
         and 8% for $30,000. The Company repaid the $50,000 note in full
         (including interest) and $2,000 of the other note during the six months
         ended June 30, 2001.

         During the six months ended June 30, 2001, Scott Anderson, a related
         party and employee of the Company loaned the Company a total of
         $20,000, payable on demand and bearing interest at 10%. No amounts were
         repaid on this note for the six months ended June 30, 2001.
         Additionally, the balance of this individual's expense reimbursements
         accrued through June 30, 2001 in the amount of $2,307 were converted to
         a note payable bearing 13% interest due and payable on demand. No
         amounts were repaid for the six months ending June 30, 2001; however,
         this note was paid in full subsequent to June 30, 2001 (including
         accrued interest).

         During the second quarter of 2001, the Company incurred and paid a
         commission in the amount $66,000 to an officer of the Company for
         completion of a software sale and design contract.

6.       COMMITMENTS AND CONTINGENCIES

         On March 29, 2001, the Company entered into new employment agreements
         with three of its executives and settlement agreements with two other
         executives. These agreements generally provided for the (1) settlement
         of breaches of their original employment agreements (2) the payment of
         back salary due to these individuals, and (3) the commitment of the
         company to pay a lump sum amount ranging from $50,000 to $100,000 per
         employee, only in the event the Company does not adhere to the terms of
         the new employment agreements.

         Pursuant to the terms of the new employment agreements and the
         settlement agreements, the Company agreed to pay the employees cash in


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<PAGE>   14

         the total amount of $42,000, and issue a total of 119,575 shares of
         common stock valued at $315,909. Total value assigned to the stock was
         based on the market value on the date of the new employment agreements
         and settlement agreements, less a 10% discount.

         Of the total consideration paid or payable in the amount of $357,909 to
         these employees, $244,419 related to settlement of the contracts
         breached or for salaries earned in year 2000. Accordingly, this amount
         was accrued as an expense for the year ended December 31, 2000 and is
         included in "Other current liabilities." The remaining consideration
         paid or payable and valued at $113,490, was related to salaries earned
         in the first quarter of 2001 and was, therefore, recognized as expense
         during the first quarter of 2001.

         On January 4, 2001 and March 20, 2001, the Internal Revenue Service
         filed federal tax liens against the assets of the Company totaling
         $349,990 for undeposited payroll taxes for the period April 2000
         through November 2000. At June 30, 2001 the Company's unpaid payroll
         taxes amounted to $341,000, including penalties and interest, and are
         included in "Other current liabilities" in the accompanying financial
         statements. On July 16, 2001 the Company deposited its second
         installment to the IRS for undeposited payroll taxes in the amount of
         $25,000.


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<PAGE>   15

                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, 2000 AS FILED WITH THE SEC ON APRIL 17, 2001.

Overview

As noted in the Company's Form 10-KSB for the year ended December 31, 2000, the
Company has experienced significant operating losses and an accumulated deficit,
which raise substantial doubt about the Company's ability to continue as a going
concern. The Company incurred additional net losses of $1,822,238 for the six
months ended June 30, 2001 and had an accumulated deficit of $22,446,203 at
June 30, 2001. 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.

Results of Operations - Six Months Ending June 30, 2001

During the six months ended June 30, 2001, total revenues amounted to $627,184
versus $382,130 for the six months ended June 30, 2000. This increase is due
primarily to the commencement and completion of a contract for software sale and
development during the second quarter of 2001. The Company is in a state of
transition with its expansion focused on its parts.com e-commerce
business-to-business and software solutions. The Company has collected a total
of approximately $1.3 million in annual territory fees from dealerships
participating in its e-commerce initiative. Of this amount, $261,561 is recorded
as deferred revenue at June 30, 2001.

The Company generated a gross profit of $373,882 for the six months ended June
30, 2001 compared to a gross loss of $87,267 for the six months ended June 30,
2000. The primary reason for the higher profit margin from 2000 to 2001 is due
to the Company focusing its efforts and resources on selling auto parts over its
web site in 2001 and licensing its e-commerce software solutions. Significant
expenditures incurred during the six months ended June 30, 2001 include web site
hosting costs and related telephone, Internet and T-1 expenses, as well as
technical support salaries. The Company generated minimal transactions from its
web site during the first two quarters of 2001. The balance of territory fees
collected through June 30, 2001 have been recorded as deferred revenue and will
continue to be amortized as income on a monthly basis. The Company has
continually seen a steady increase in its web site transactions and believes
that increased site traffic will result in sales as its product becomes known
and gains market acceptance; however, there can be no assurance that such market
acceptance shall be attained.

The net loss for the six months ended June 30, 2001 decreased by 71% to
$1,822,238 compared with a net loss of $6,248,550 for the six months ended June
30, 2000. This decrease was primarily attributable to a decrease in operating
and other expenses of $3,965,163 or 64% for the six months ended June 30, 2001
compared to the same period last year as a result of several factors. First, the
Company decreased its workforce from 42 full-time employees and 3 full Time
consultants/programmers at June 30, 2000 to 18 full-time employees at June 30,
2001. Second, stock-based employee compensation totaled $338,634 for the six
months ended June 30, 2001 as compared to $2,040,061 for the same period last
year reflecting a decrease of $1,701,427 or 83% and representing a reduction in
the use of stock grants and the Company's stock value. Finally, amortization
expense for the six months ended


                                       15
<PAGE>   16

June 30, 2001 decreased by 458,347, or 47%, to $516,420 as a result of (1) a
fourth quarter 2000 impairment charge reducing the value of the FlexRadio, Inc.
patent acquired in October 1999 by $1,019,818, and (2) fourth quarter 2000
impairment charges completely eliminating goodwill associated with the Company's
acquisitions of UEP Inc., MTV Pinnacle Advertising Group Inc., and Livecode Inc.
Offsetting these decreases was $352,657 in noncash interest recorded during the
six months ended June 30, 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.

Liquidity and Sources of Capital

Since its inception, the Company has sustained recurring losses from operations
that to date, total $22,446,203. The Company used $684,915 and $2,322,051 of
cash in operations for the six months ended June 30, 2001 and 2000, respectively
and anticipates additional cash needs in the remainder of 2001. At June 30,
2001, the Company had a working capital deficiency of $3,550,677 and cash of
$61,636. The Company also has not deposited all of the back payroll taxes with
the Internal Revenue Service ("IRS") for the period April 2000 through November
2000; however, $50,000 was deposited through June 30, 2001 resulting in an
accrual for back payroll taxes in the amount of approximately $341,000 as of
June 30, 2001, including penalties and interest. Subsequent to June 30, 2001, an
additional $25,000 was paid to the IRS.

The IRS issued a levy against two of the Company's three bank accounts on April
30, 2001. 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 a member of
senior management his regular salary when due, which has resulted in an accrual
for back salaries of approximately $27,000 as of June 30, 2001. The Company is
also in default of mortgage note obligations encumbering its principal offices
as of June 31, 2001. 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 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 an aggressive 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 annual territory fees, 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.

During the six months ended June 30, 2001, the Company's operating cash
requirement was $684,915 attributable to a net loss of $1,822,238 mitigated by
non-cash charges for interest of $352,657, depreciation and amortization of
$594,199 and stock-based compensation of $493,850. The net remaining shortfall
was primarily funded by the net sale of common stock of $120,000; proceeds from


                                       16
<PAGE>   17

the issuance of convertible promissory notes of $581,667; and, related party
promissory notes of $128,500 received during the six months ended June 30, 2001.
Partially offsetting this funding were the repayments of related party
promissory notes of $90,041 during the six months ended June 30, 2001.

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. At June 30, 2001, the Company had $61,636
of cash and a working capital deficiency of $3,550,677. 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.


                                       17
<PAGE>   18

                                OTHER INFORMATION

Changes in Securities and Use of Unregistered Securities

From January 2001 through June 2001, the Company sold 60,000 shares of common
stock in private placements to 4 investors (all accredited) for net proceeds of
$120,000 (share price of $2.00). The securities were issued in reliance on
Section 4 (2) of the Securities Act. The investors were provided information
about the Company or had access to such information, and the investors were
provided opportunities to ask questions of management concerning the information
provided or made available. The investors confirmed in writing their investment
intent, and the certificates for the securities bear a legend accordingly.

Legal Proceedings

As of December 31, 2000 the Company was in default of a mortgage note payable
for failure to remit monthly principal and interest payments. However, the
Company entered into an agreement in March 2001 with its mortgage lender which
provided for the deferral of pursuing any remedies available under the mortgage
note payable agreement until after May 18, 2001 in exchange for the transfer of
10,000 total officers' and directors' personal shares which were pledged as
collateral for the notes. As payments have not resumed and no other agreements
have been entered into deferring action by the mortgagor, the Company is in
default. The Company is currently negotiating the assignment of the mortgage
note payable to a related party, however, no formal agreement has been reached.

Employment Agreements

In March 2001, the Company entered into new employment agreements with three
executives. These agreements generally provide for the following: (1) settlement
of breaches of their original employment agreements (2) the payment of back
salary due to these individuals, and (3) the commitment of the Company to pay a
lump sum amount of $100,000 per employee, only in the event the Company does not
adhere to the terms of the new employment agreements and settlement terms.

Pursuant to the terms of the settlement agreements, the Company agreed to pay
the employees above cash in the total amount of $15,000, and issue a total of
85,551 shares of common stock valued at $221,836. Total value assigned to the
stock was based on the market value on the date of the new employment agreements
and settlement agreements, less a 10% discount.

All provisions contained in the employment agreements for the above-named
executives are identical. Under each agreement, the individual is entitled to
participate in all employee benefit programs generally available to Company
employees, including participation in health care and disability plans, stock
option plans and any retirement plan. The original term of the agreements is
three years; however, as a result of the settlement agreements with these
individuals, the agreements expire on July 1, 2001. The agreements provide for
payment of commissions related to any sales directly generated by the Company as
a result of the individual's efforts.

The Company may terminate the executives' and/or key employee's employment for
cause or without cause at any time with no notice.

The individuals may terminate their employment at any time upon 90 days' written
notice to the Company, except in the event of a change of control, when 10 days'
notice is required. The Agreements contain nonsolicitation and noncompetition
provisions that are intended to survive the termination of employment for a
period of two years.

In March 2001, the Company entered into a settlement agreement regarding Jeffrey
Odato's breached employment agreement. Under the terms of the agreement, Mr.
Odato received a one-time cash payment of $2,000 and 14,404 shares of common


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<PAGE>   19

stock in lieu of $28,807 worth of back salary. The agreement contains a
commitment of the Company to pay a lump sum amount of $50,000, to Odato, only in
the event the Company does not adhere to its terms.

On July 9, 2001, based on the recommendations of a compensation committee of
outside advisors, the Board of Directors approved new employment agreements for
Shawn Lucas and Scott Anderson. Both agreements are for five-year terms and
generally provided for an initial annual salary of $72,000 and stock options
based on performance. In addition, the agreements addressed stock options,
unpaid wages and risks assumed by the employees. No additional shares of stock
were issued to the employees.

In March 2001, the Company entered into a settlement agreement regarding Jon
Palazzo's breached employment agreement. Under the terms of the agreement, Mr.
Palazzo is to receive $25,000 cash paid in monthly installments beginning May
2001 through December 2001. Through June 30, 2001 Mr. Palazzo has received the
first two monthly installments per his agreement. Subsequent to June 30, 2001
Mr. Palazzo has received an additional monthly installment per his agreement.
Mr. Palazzo also agreed to accept 19,621 shares of common stock in lieu of
$30,242 worth of back salary.

Reports on Form 8-K

The following items were reported on a Form 8-K during the three months ended
June 30, 2001:

June 26, 2001 - On June 15, 2001, the directors approved a one-for-ten reverse
stock split, wherein every ten shares of parts.com common stock will convert
into one share of the effective date of the split. Shareholders will receive an
additional share for fractional shares. The reverse stock split is scheduled to
become effective at the close of business on June 27, 2001 and reduce the number
of shares issued and outstanding from approximately 30,145,197 million shares to
3,014,519 million shares and the public float from 8,398,646 shares to
approximately 839,864 shares with approximately 4,000 shareholders of record.
The number of authorized common shares will be reduced from 50,000,000 to
5,000,000.

On June 15, 2001, the Company also announced new CUSIP #702140203 and new stock
symbol PART, effective Thursday morning, June 28, 2001.

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.


August 20, 2001                     By: /s/ Shawn D. Lucas
                                        ----------------------------------------
                                        Shawn D. Lucas, President and
                                        Chief Financial Officer


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