<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2000

                              OR

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

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

                         Commission File No. 000-28243


                                PARTS.COM, INC.
                                ---------------
               (Name of Small Business Issuer 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
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

                          COMMON STOCK, $.001 PAR VALUE
                                (Title of Class)

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 [X] NO [ ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

The Registrant's sales for the most recent fiscal year were $903,162.

The aggregate market value of the voting stock held by non-affiliates of the
Company (12,532,698 shares), based upon the average closing bid and asked prices
of the Company's common stock on February 28, 2001, was approximately
$4,308,000.

There were 27,985,599 shares of common stock outstanding as of February 28,
2001.

Transitional Small Business Disclosure Format (check one): YES [ ] NO [X]

<PAGE>   2


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>


<S>     <C>                                                                                           <C>
                                                PART I

   Item 1.  Description of Business................................................................   2

   Item 2.  Description of Properties..............................................................  16

   Item 3.  Legal Proceedings......................................................................  16

   Item 4.  Submission of Matters to a Vote of Security Holders....................................  16

                                               PART II

   Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters..................  17

   Item 6.  Selected Financial Data................................................................  20

   Item 7.  Management's Discussion and Analysis of Financial Condition and Results
                of Operations......................................................................  20

   Item 8.  Financial Statements and Supplementary Data............................................  F-1

   Item 9.  Changes in and Disagreements with Accountants on Accounting and
                Financial Disclosure...............................................................  25


                                               PART III

   Item 10. Directors, Executive Officers of the Registrant, Promoters and Control
                Persons; Compliance with Section 16(a) of the Exchange Act.........................  25

   Item 11. Executive Compensation.................................................................  27

   Item 12. Security Ownership of Certain Beneficial Owners and Management.........................  32

   Item 13. Certain Relationships and Related Transactions.........................................  33

   Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K........................  34

            Signatures.............................................................................  35

</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"). 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" 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 7 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.

                                       1
<PAGE>   3


PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

           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 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.

           The principal offices of the Company are located at 121 East First
Street, Sanford, Florida 32771 and its telephone number is (407) 302-1314. Our
web sites are located at www.parts.com, www.parts.net, www.theparts.com,
www.theparts.net, www.miracomcorp.com, www.miracomcorp.net, www.miratouch.com.,
www.reallyknow.com.

         The Company was incorporated in Nevada on September 13, 1995, under the
name I.E.L.S., Inc., which company had no material operations and whose common
stock was traded on the OTC Electronic Bulletin Board. In September 1998,
I.E.L.S. completed an exchange agreement with Direct Touch Research, Inc.
("DTR"), a closely held Florida corporation that also had no material
operations. Pursuant to the exchange agreement, all outstanding shares of DTR
common stock were exchanged for 5,542,000 shares of I.E.L.S. common stock. As a
result, DTR became a wholly owned subsidiary of I.E.L.S. and I.E.L.S. changed
its name to Miracom Corporation. On January 5, 2000, Miracom Corporation changed
its name to parts.com, Inc. DTR was subsequently dissolved as a corporation in
August 1999. As a result of this transaction, DTR stockholders became owners of
approximately 61% of the Company's then outstanding common stock and assumed
100% control of the Company's board of directors. The effect of the transaction
was a reverse acquisition of I.E.L.S. by DTR. The purpose of the transaction was
to provide the founders of DTR with a more viable structure in the form of a
publicly-traded company that would enable them to facilitate the growth of their
business plan through acquisitions and to attract and retain necessary technical
personnel. For additional information regarding the transaction, see "Item 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

         In September 1998, the Company acquired all of the assets, liabilities
and business of United Equity Partners, Inc., a Florida corporation ("UEP"). In
that transaction, the Company issued a total of 150,000 shares of common stock
to UEP. UEP subsequently distributed those shares to its shareholders and UEP
was dissolved in August 1999. For additional information regarding the
transaction, see "Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

         Also in September 1998, the Company acquired all of the assets,
liabilities and business of MTV/Pinnacle Advertising Group, Inc., a Florida
corporation ("Pinnacle"). In that transaction, the Company issued a total of
582,000 shares of common stock to Pinnacle. Pinnacle subsequently distributed
those shares to its shareholders and Pinnacle was dissolved in August 1999. For
additional information regarding the transaction, see "Item 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."

         In May 1999, the Company acquired all of the assets and business
operations and assumed all the outstanding liabilities of LiveCode, Inc.
("LiveCode") a Florida corporation in exchange for 600,000 shares of the
Company's common stock and a six-month non-interest bearing $20,000 promissory
note in favor of the LiveCode stockholders. Effective September 30, 1999, the
note was repaid by the issuance of 40,000 shares of the Company Common Stock.
For additional information regarding the transaction, see "Item 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."



                                       2
<PAGE>   4


         In October 1999, the Company acquired all of the outstanding common
stock of FlexRadio, Inc. ("FlexRadio"), a Florida corporation, in exchange for
6,200,000 shares of the Company's common stock which shares were issued to the
shareholders of FlexRadio. For additional information regarding this
transaction, see "Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

Market and Industry Overview

         The Internet is an increasingly significant global medium for
communications, content and online commerce. It is the most advanced and fastest
growing means of communications in history. Currently, there are more than 100
million people on-line in the United States alone, and according to estimates by
the International Data Corporation, more than 200 million Americans will be
on-line by 2005. E-commerce applications are increasing exponentially; market
research firm Forester Research estimates that by 2004, nearly 20% of all
business trade will be transacted on the Internet and business-to-business
e-commerce will likely grow to more than $2.7 trillion. Estimates from research
firm Gartner Group, Inc. indicate that within the next four years, more than
500,000 companies will be buyers and/or sellers in e-marketplaces. Reflecting
their increasing functionality, accessibility and overall usage, the Internet
and online services are evolving into an attractive commercial medium and a
unique sales and marketing channel that can successfully compete with retail
stores, mail-order catalogs and television home shopping networks. Online
retailers can interact directly with customers and update their featured
selections, shopping interfaces, product pricing and visual presentations on a
continuous basis. As more and more companies join the e-commerce revolution, it
is expected that there will be a sizeable demand for e-commerce applications.
The global market for Internet-based e-commerce procurement and order management
applications topped $1.8 billion in 1999, up 305% from $444 million in 1998,
according to International Data Corporation. Tremendous growth is predicted for
the Web-based e-commerce applications market and International Data Corporation
estimates an increase to $10 billion in 2001.

         AUTO PARTS INDUSTRY. The worldwide auto parts industry is large,
growing and relatively fragmented. Business Week magazine estimates the value of
the auto parts market at nearly $600 billion ("Big Dents in Auto Parts," April
12,1999). As reported by Automotive News, there are six automotive parts
suppliers worldwide with sales in excess of $10 billion each ("Biggest Suppliers
Cleared Hurdles to Grow In 1998," June 21, 1999). The estimated United States
market for automotive parts is $127 billion, as reported by Motor Equipment
Manufacturer's Association (MEMA Market Analysis, The Report of the Vehicle
Parts Industry). Although parts.com is initially focusing on the United States
market, we intend to make the company the global business-to-business e-commerce
parts exchange that eliminates the inefficiencies of current parts distribution
methods through the maximization of the efficiencies afforded through the
Internet. See "Our Strategy."

         DATA GATHERING AND MARKET RESEARCH INDUSTRY. The need for quantifiable
information and computer equipment and data in the automotive industry is
growing rapidly. Automotive News reported that the market for these products
amounted to $900 million in 1998 ("Small Computer Firms Are Making Inroads,"
March 2, 1998). For many years, dealers have relied on information from Arbitron
radio surveys, Nielsen Diaries or a particular broadcast "representative" that
somehow instinctively knew each particular automobile dealer's market. We intend
to make ReallyKnow.com one of the leading real time electronic data gathering
businesses.

Our Strategy

                                    Parts.com

           We commenced development of our parts.com division in March 1998 and
our parts.com web site went "live" on January 23, 2000. We developed our
parts.com division to capitalize on the unrealized opportunities in
business-to-business e-commerce by bringing new value to suppliers, buyers and
distributors. We intend to use the parts.com proprietary technology and
logistics model to bring strong brand recognition, customer loyalty and supplier
relationships in the on-line auto parts industry. We believe our e-commerce
business-to-business model will be superior to that of the capital and real
estate-intensive, traditional original equipment manufacturer component
business.



                                       3
<PAGE>   5


         Our initial focus of operations for our parts.com division is the
automotive component 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 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 warehousing,
distributing and ordering 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 supplier and buyer 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.

         Through parts.com, we intend to make the supply chain operate more
efficiently and more profitably for customers than the current distribution
system. Currently, automobile dealerships, service centers and garages order
automotive parts from certain "middle men" such as warehouse distributors (i.e.,
NAPA, Carquest, General parts, etc.), "jobbing stores" (i.e., Anderson
Wholesale, Barnes Motor & parts, etc.), and retailers (i.e., Pep Boys, Auto
Zone, Discount parts, etc.). Each warehouse distributor has its own platform and
related software managing its inventory and sales information. There are
currently many such different systems and a customer's operating system must be
compatible with that of the vendors from whom they buy parts. Auto parts are
warehoused by distributors in regional or district warehouses and are
transported to local stores and thereafter local service centers or garages.
These storage and transportation costs are factored into the price of the parts.
When a dealer or garage needs a part that they do not have on hand, they may
have to call several warehouses, jobbers, retailers or other service centers or
garages before locating the part - all of which is time consuming and labor
intensive. If parts they do not have on hand are required for different vehicle
lines (i.e., Ford, Subaru, Chevrolet), then the same calls must be made for each
part to several different sources. Once the part is located, the buyer and the
seller then have to process the order, and the seller must collect the funds -
all of which is time consuming and labor intensive.

         In addition, automobile manufacturers normally sell to large retailers
and warehouse distributors only, while other automotive businesses are normally
restricted from buying product directly from those manufacturers because they do
not order on the same volume as large retailers and warehouse distributors.
Parts.com plans to include in its parts.com inventory base OEM inventory (i.e.,
parts sold by Ford, Chrysler, General Motors and other automobile and truck
manufacturers) and aftermarket inventory which automotive businesses such as
dealerships, service centers and garages can access directly without having to
order from the warehouse distributor or other "middle man." The benefits to both
the manufacturer and the buyer are two-fold. On the manufacturer's side, through
the parts.com web site, the manufacturer will be able to track in "real time"
sales from the point-of-sale of its parts inventory and plan its manufacturing
and inventory needs accordingly. Currently, manufacturers rely on information
provided on a delayed basis by retailers and warehouse distributors who are the
middle men providing product to other automotive businesses. As a result,
manufacturers and warehouse distributors must maintain certain levels of
inventory at all times to meet demand. Inventory that is not utilized in a
certain period of time, must be replaced with updated inventory - thus
necessitating write-offs. The manufacturer may also increase its margin on
products sold through parts.com since it will not have to factor in the mark-ups
of various middle men down the distribution chain. On the buyer's side, the


                                       4
<PAGE>   6


buyer will have access to the additional part numbers provided by the
manufacturer and potentially better prices (and therefore better margins) than
it could get by buying products from a warehouse distributor or a retailer.

         Our strategy is to provide a more efficient mechanism for:
communication between customers and suppliers; locating parts; delivering those
parts to the customer through our suppliers; increasing sales for the
dealerships, service centers and garages; processing orders for parts; tracking
inventory and sales trends in "real time" to enable suppliers to more accurately
project inventory needs in market areas. We intend to accomplish this by using
the Internet to create a "standardized" means of communication by linking
manufacturers, warehouse distributors, dealerships, service centers and garages,
providing them access to a "virtual" inventory of automotive parts where they
can enter into our parts.com site, locate the parts they need and order them
from the nearest available source, and process those orders - thus saving time
and labor costs in the search for and ordering of parts. We make available
real-time information on inventory location and availability to both buyers and
sellers of parts via the Internet. Our site offers "real-time" information on
the availability of inventory and the type of parts actually being sold and the
geographic locations of those sales. We anticipate that such point-of-sale
information will assist parts suppliers in the planning of production schedules
and inventory strategies-focusing on inventory that is in demand and decreasing
inventory that is slow-moving, and thus decreasing over-all inventory carrying
costs and potential write-offs of over-stocked parts. In addition,
labor-intensive menial tasks such as phone calls, sales history review, and
inventory charting will be replaced with the advent of real-time inventory data.
Labor associated with the processing of transactions will be minimized as our
e-commerce site processes transactions and deposits sales proceeds directly into
the vendor's account.

         Parts.com utilizes a unique business model concurrent with our
e-commerce web site to reward suppliers throughout the network chain. We have
divided the United States into various regions. Each region has three levels of
suppliers for 34 vehicle lines. Examples of vehicle lines are Chrysler, Ford,
Chevrolet, Dodge, Nissan, Jeep, Eagle, Mercedes Benz, etc. Each region will have
one Platinum Supplier for each vehicle line. The Platinum Supplier will have the
first opportunity to pick, pack, ship or deliver all parts orders which
originate in its region and vehicle line responsibility. If the Platinum
Supplier cannot fulfill an order or portion of an order as a result of not
having the part available or not being able to fulfill the order within the
customer's time parameters, the order will then be automatically referred to the
next level of supplier, the Gold Supplier.

         The Gold Supplier Network is comprised of a much broader base of
suppliers who reside within the same regions as the Platinum Suppliers and
support the same product lines. The Gold Supplier acts as a fail-safe or
secondary fulfillment source if the Platinum Supplier does not have or cannot
timely deliver the part. The broad base of Gold Suppliers within a region also
facilitates meeting a customer's time-sensitive delivery deadlines. Certain
ratios are applied for the Platinum Supplier to share in the sale generated by
the Gold Supplier.

         Completing the supply chain is the Silver Supplier Network, which
serves as the ultimate fail-safe parts locator network and back-up to the Gold
Supplier Network. The Silver Supplier is the final source to which a parts
request will default in the rare instance when neither the Platinum Supplier nor
the Gold Supplier can fulfill an order. If an order is filled by a Silver
Supplier, the Platinum Supplier participates in the revenue generated from that
sale.

           The Company sets the price at which suppliers fill orders from their
inventory in retail and wholesale transactions conducted through parts.com,
which price is a percentage (set by parts.com) over the supplier's cost for the
automotive part. The only variables for the pricing model are shipping costs
which may vary from region to region, and the supplier's cost if that cost
should vary from region to region. Platinum Suppliers receive an overriding
percentage transaction fee on all orders in their respective regions (even if
they do not pick, pack and ship the orders). Platinum Suppliers do not
necessarily have first pick on all orders within their region. Speed of delivery



                                       5
<PAGE>   7

and availability of product will dictate whether the Platinum, Gold or Silver
Suppliers will fulfill the order. Since parts.com customers ultimately determine
the time frame in which they need the product, our system will route the order
to the closest member-dealer that can fulfill the order within the specified
time parameters, regardless of dealer/supplier status.

         Thus, our business model creates a "virtual inventory" to those seeking
automotive parts and accessories and likewise increases the probability of
locating a part. Dealerships, service centers and garages can save the expense
of carrying duplicative inventory and inventory that is not commonly needed. Our
business model offers better cash flow management by limiting multi-layers of
labor. We process the orders, collect payment and distribute the revenue from
the suppliers' sales directly to their accounts. They can track in real-time the
sales orders fulfilled, the potential orders missed by that location, inventory
source and the status of their respective inventories.

           The parts.com website and marketplace are powered by multiple
applications the Company has named "TradeMotion Solutions." TradeMotion
Solutions are applications within platforms that fuel Web-based marketplaces.
TradeMotion facilitates sales, procurement and distribution processes, gives
centralized management the ability to monitor and track order progression, links
end-users, approvers and financial services, and ensures superior customer
service. As a whole, parts.com's TradeMotion Solutions enable users to monitor,
evaluate and collaborate on part location and procurement via the Web, allowing
for optimal inventory management as well as prompt evaluation of-and maximum
capitalization on-market trends.

         Initially, revenue for parts.com was derived from capturing a small
transaction fee on each business-to-business and consumer sale and from
charging supplier/territory fees for signing up as Platinum, Gold or Silver
Suppliers. In order to increase the number of suppliers that act as parts.com's
distribution base, the Company implemented an aggressive marketing plan in Q3
2000 and offered for free its TradeMotion Storefront software and membership as
a Silver Supplier to its nationwide dealership base. The marketing plan allowed
the Company to significantly increase its dealership base to nearly 9%
penetration of the dealership population (see below). Additional revenue streams
that the Company intends to develop further are: collecting service fees for the
use of software applications that we make available through parts.com (i.e.,
vendor-managed inventory applications, VIN identification packages); license
fees to other service industries, associations or companies that may desire to
use our system to develop and operate portals for products; fees for
web-enabling/integrating organizations to the Internet in connection with our
parts.com system; fees for providing virtual training sessions; fees for
advertising and real-time trend reporting; subscriptions for reports on buying
habits, sales, lost sales, trends, etc.

         As of February 29, 2001, parts.com has signed up 2086 dealership
franchises throughout the United States, representing 34 vehicle lines and more
than 1,000 individual distribution points. Many of these dealers have multiple
locations for several different automotive lines and they have signed contracts
as Platinum, Gold Suppliers and/or Silver Suppliers. Some Platinum Suppliers are
also Gold Suppliers in certain defined market areas. Of those dealerships, there
are approximately 89 Platinum Suppliers and 113 Gold Suppliers. The balance of
the dealership base is represented by the Silver Supplier Network. And, at
February 29, 2001, more than 700 dealerships had purchased or received a
complimentary Storefront software package in order to process their own
transactions. Beginning for periods after December 31, 2001, the Company intends
to charge a fee for the continued use of these Storefronts.

         Parts.com is currently working to bring its software solutions, systems
development capabilities, marketplace and business model to the European market.
The Company is targeting areas with the largest potential subscriber base and
growth potential, in particular France, UK, Germany, Italy and Spain.

         Parts.com has conducted extensive research of the European market and
has been actively seeking strategic alliances in order to establish itself in
Europe. The Company's first strategic alliance, with Cap Gemini Ernst & Young
(CGEY), served as a major endorsement of the Company's technology, which was



                                       6
<PAGE>   8

subjected to a rigorous qualification process. A team of CGEY consultants has
now been trained to integrate TradeMotion solutions into several of the CGEY OEM
projects currently under negotiation. Parts.com is currently negotiating similar
alliances to cover the European automotive aftermarket.

         The parts.com global rollout will begin in France, which is an
exceptionally attractive market. Through the use of localized Web sites, local
content, local sponsors and local partners, the Company could achieve global
impact.

                                 ReallyKnow.com

         We formed the ReallyKnow.com division in 1999 for the purpose of
revolutionizing the market research industry through our patent-pending
technologies by offering real-time data gathering capability. We commenced
development of the Miratouch product in 1998, initially as on-site kiosks and
most recently as PC-based software. Both versions feature a touch-screen on-site
survey used in conjunction with value added read/write business cards of
accurate, unbiased, concrete facts for use by a myriad of businesses. While the
concept of on-site surveys is not new, the touch screen on-site survey is in its
infancy. Department/specialty stores, grocery/supermarkets, hotels,
restaurants/food service, retail, sporting events, theatres and many more
industries all benefit from real-time data gathering. We believe that the
Miratouch product can save both time and money over the conventional
face-to-face interviewing, mail surveys or costly one time customized research.
All software application changes (Questions and Answers, Reports) are handled
entirely through on-line technology. This reduces time-consuming and costly
travel expenses and allows Miratouch clients to change the questions to address
different needs. ReallyKnow.com's latest addition, FlexRadio, offers a radio
frequency detection device that is designed to provide real time data, superior
research, technical proficiency and market analysis.

         Our revenue from our ReallyKnow.com product initially will be derived
from three sources: First, sales to dealerships of the research system. Second,
sales of value business cards to automobile dealerships for their salesmen to
use in connection with our research system. Each business card will have a
magnetic strip and when given to the customer, the customer will be offered
incentives to participate in the on-line survey. Points will be recorded on the
magnetic strip each time the customer inserts the card into the Miratouch system
and answers survey questions. Points can be redeemed for promotions - such as
free or discounted oil changes, car washes, etc. The third revenue stream is
derived from consulting services when we are retained by dealerships to
interpret the data gathered through our Miratouch system.

           With regard to the Company's ReallyKnow.com (Miratouch) product, as
of February 29, 2001, the Miratouch system is installed in two dealerships in
Florida, one in Ohio and one in Massachusetts. Due to cash constraints, the
Company has focused its limited resources for product development on its
parts.com division; however, it still believes that ReallyKnow.com is a viable
business and the Company intends to further develop the product when resources
become available.

         The Company's FlexRadio product of its ReallyKnow.com division is
designed to provide real-time marketing information through tracking the radio
listening habits of consumers. The Company's target market for our FlexRadio
technology is any industry sector that relies upon qualitative and quantitative
information pertaining to the listening habits of consumers (i.e., radio,
automotive and advertisers). Consumers may in fact resist having their listening
habits monitored. At the time they purchase a vehicle, consumers will be
notified of the monitoring device; they will be presented with a form which, if
they elect to have the monitoring device activated, will indicate their
acknowledgement and consent in writing prior to activation. Consumers will also
have the option to deactivate the device at any time. While it remains to be
determined at what point the FlexRadio monitoring device will be installed in
the automotive radio, whether at the dealerships or at the manufacturing level,
it is the Company's goal to have the system installed by the automobile



                                       7
<PAGE>   9


manufacturer. As the Company's primary focus has been on its parts.com division,
this business product has not been fully developed and the Company will work to
produce a saleable product when resources become available.

Our Solution

         With our parts.com division, businesses and customers enter the
parts.com domain through our Internet site. To purchase auto parts, buyers
simply click on a buy button and follow prompts that guide them in supplying
shipping and payment information. In addition to ordering parts, buyers can post
request for proposals/request for quotes, conduct targeted searches for hard to
find auto parts, browse through highlighted selections of the web site, shop for
accessories, read and post reviews on automobiles and automobile parts, register
for personalized services, participate in promotions and check their order
status. Suppliers can post overstocked or obsolete parts, post catalogs and
display their company news instantly. A patent application is pending for the
parts.com business model. See "Intellectual Property."

         The Company's TradeMotion Solutions provide its users with the
following functions and uses: electronic automation of company processes,
multi-platform architecture, ease of use, information access and real-time
reporting. TradeMotion Solutions offer the following values to buyers: increased
productivity and reduced processing costs, reduced market fragmentation,
reduction in purchasing costs and increased availability of product and pricing
information. TradeMotion Solutions offer the following values to suppliers:
increased volume and revenue opportunities, reduction of costs and brand
preservation.

         Our ReallyKnow.com division provides a real-time electronic data
gathering system (Miratouch) that permits real time data gathering and market
analysis of consumer information. The Miratouch kiosk is an automated
computer-assisted marketing research product that is conducted on-site at a
merchant's location and online through use of the Internet. With the Miratouch
solution, the merchant can receive collected marketing research results
on-demand. We believe that we have created multiple user-friendly front-end
designs (i.e., user interfaces) which allow customers the ability to offer
different looks, types of information and varied narration, develop the
applications, customize the hardware and create reporting via the Internet to
maximize usage of our system. A patent application is pending for the Miratouch
system and its related intellectual property. The Company has also filed and is
awaiting registration for Miratouch trademarks and copyrights. See "Intellectual
Property."

Our ReallyKnow.com's FlexRadio division will rely upon a technology for which we
have a pending patent, namely the installing of data transmission units in
automobiles to monitor radio-listening habits on a real time basis. See
"Intellectual Property."

Sales and Marketing

         Through our parts.com division, our goal is to be the worldwide source
for automotive parts. Our marketing strategy is designed to strengthen the
parts.com brand name, increase customer traffic to the parts.com Marketplace,
build strong customer loyalty, maximize repeat purchases and develop incremental
revenue opportunities. Parts.com provides increasingly targeted and customized
services by using the extensive customer preference and behavioral data obtained
through its online sales. As a marketing channel, the Internet has proven to be
unique in facilitating rapid and effective experimentation analysis, instant
user feedback and efficient "redecorating of the store" for each customer. We
have employed a variety of media, program and product development and value
added promotional activities to achieve our marketing goals for parts.com. We
intend to place advertisements on various high profile and high-traffic conduit
Internet sites. We also plan to extend parts.com's market presence through an
Affiliates Program, that we hope will grow to include thousands of enrolled
members. The program will enable Affiliate web sites in each product category to
offer parts to their customer base for fulfillment by parts.com.




                                       8
<PAGE>   10


         Our marketing program for parts.com to date continues to include
several direct mail campaigns to the 22,000 dealer/supplier candidates
throughout the United States for our parts.com Marketplace. We have taken out
full-page advertisements in leading automotive dealer trade publications and
have run advertising spots on local radio stations in several parts of the
United States. We have attended industry trade shows and conventions and
presented an exhibit booth at the automotive industry's largest OEM dealership
convention, the National Automobile Dealers' Association Convention held in
Orlando, Florida in January 2000. We also presented an exhibit booth at the
Automotive Aftermarket Parts Exposition (AAPEX), the largest U.S. automotive
parts convention, held in October 2000 in Las Vegas, Nevada.

         ReallyKnow.com's marketing strategy incorporates plans to sell its
products through several channels including conventions, advertising agencies,
direct mail, print, outbound telemarketing and referrals. ReallyKnow.com's
advertising and promotion plan is to position itself as one of the leaders in
real time electronic data gathering. ReallyKnow.com will use media strategies
that include: developing a program to advertise its message, image and products
in trade magazines; developing a video/direct-mail campaign targeted at specific
audiences that benefit from utilizing ReallyKnow.com's research products and
services; developing relationships with advertising agencies with respect to
their hardware and software and enhancing these agencies' performance which will
enable them to maintain long-term relationships with their clients.

         As of this date, we have created marketing materials for ReallyKnow.com
and distributed them to over 22,000 auto dealers throughout the United States in
order to market the product and assess potential levels of customer interest. We
have also placed demonstration units with various automobile dealerships to
gather feedback from the dealers regarding the effectiveness of the user
interface and web-enabled software. Based upon the feedback from these
demonstration units and upon consulting with several focus groups, we have
created a newer release of our product which is due to be introduced into the
marketplace shortly. We also showcased our latest ReallyKnow.com product at the
National Automotive Dealers' Association convention held in Orlando in January
2000.

Customers

         For our parts.com division, the majority of our customer base has been
Original Equipment Manufacturer ("OEM") dealerships locating parts for their
business trading partners, as well as their at-location customers and consumers.
In December 2000, through use of TradeMotion Storefront (a private-label
e-business application integrated seamlessly into suppliers' own websites), our
dealership base has begun to sell auto parts directly to their own customers.
Although the Storefront software was initially sold to dealerships, through
limited offer, the Company offered free use of the software for a limited time.
Finally, by allowing buyers to list "want ads" for hard-to-find items and
suppliers to post over-stocked or obsolete products, parts.com should be
positioned to realize a significant source of revenue through its
trade-out/auction service as well, which has yet to be developed.

         We believe our ReallyKnow.com's initial market segment will be the
retail automotive industry where Automotive News estimates that there are more
than 23,000 new car dealers, 70,000 used car dealers, 130,000 automobile repair
and service shops and 22,000 rental car locations in the U.S. The expansion
markets for the ReallyKnow.com market research include:

-        supermarkets;
-        hotels/motels;
-        restaurants and food service companies;
-        retailers;
-        sporting event/attraction companies; and
-        theatres and others.

         We expect the typical customer of ReallyKnow.com's real-time electronic
data gathering technology business products to be people who control the


                                       9
<PAGE>   11


expenditure of advertising and marketing dollars for their companies and people
who currently use advertisements to generate sales leads.

Competition

         Competition for our parts.com business comes from a variety of other
online companies. These competitors include:

-        various online parts sellers and vendors of other component based
         products;

-        indirect competitors specializing in online commerce or deriving a
         substantial portion of their revenues from electronic commerce who may
         offer component parts as an extension to their existing product lines;
         and

-        manufacturers and retail vendors of parts and accessories, including
         large specialty parts sellers that have significant brand awareness,
         sales volume and customer bases.

The following is a list of specific competitors of the parts.com Marketplace:

     Carparts.com - Bills itself as "the total parts solution," Carparts claims
to have available "1.5 million automotive parts, easy and secure online
ordering, fast home delivery, a 100% guarantee, and easy returns." According to
our research, we believe that Carparts only offers a Toyota OEM catalog and
engages in minimal business-to-business transactions. The majority of the sites'
customers are retail consumers, which are not the main focus of parts.com.

     Wrenchead.com - This site if for automotive enthusiasts ranging from
professionals to weekend mechanics. Wrenchead represents itself as "the best
place on-line for automotive parts and accessories." According to the Company's
research, we believe Wrenchead does not have an OEM catalog, nor does it have
OEM suppliers. We believe that the majority of Wrenchead's customers are retail
consumers and that they facilitate a nominal number of business-to-business
transactions.

     PartsVoice (a division of The Cobalt Group) - PartsVoice has begun locating
a number of auto parts through an on-line Web site for dealerships. Through
research, we believe that PartsVoice has no OEM suppliers, nor do they have an
OEM catalog. PartsVoice appears to be a locator service only.

     oeconnection.com - This is a collaboration between the "Big Three" U.S.
Automakers and Bell & Howell. Bell & Howell is a traditional catalog provider
for linking up collision repair facilities with the "Big Three" dealerships
through its collision link system. Through our research, we believe that this
company plans to generate revenue through transaction fees and subscription fees
to the service.

     GA eXpress, a provider of enterprise-wide database solutions and data
migration tools, announced in February 2000 that it will partner with The
Reynolds and Reynolds Company, a provider of information systems, to develop a
system whereby automotive retailers may engage in eCommerce and exchange data
via the Internet with trading partners.

     ChoiceParts.com - This alliance was formed through a collaboration of CCC,
a collision estimating software company, and ADP Dealer Services ("ADP") and
Reynolds & Reynolds ("R&R"), providers of Dealer Management Systems to
dealerships nationwide. Through our research, we believe that the service was
formed to perpetuate the use of ADP and R&R existing dealer management systems.
The service is primarily focused on the collision industry and linking car
dealerships with body shops to expedite the procurement of OEM parts. The
service is being tested in several cities.

     In February 2000, the "Big 3" Automakers (General Motors, Ford and
DaimlerChrysler) announced that they would join forces to create an auto parts
procurement network on the Internet, combining Ford's current exchange, run by
Oracle, and GM's exchange, run by Commerce One. The collaboration was later
named "Covisint." This network focuses on the procurement, manufacture and
distribution of parts to be used for the production of new vehicles. The primary
area of focus for parts.com is one which parts are being procured, manufactured,
and distributed in order to replace original parts when they fail. Although



                                       10
<PAGE>   12


these two areas have some overlap, they are completely different with respect to
operations - so different, in fact that each is a separate industry within
itself.

           The manufacturers are the companies that actually make the majority
of the parts for the "Big 3". Covisint strives to create a standard means of
communication and purchasing process between the "Big 3" and manufacturers that
supply them.

           It is important to note that the "Big 3" cannot circumvent their
existing dealerships with regard to new car sales and automotive parts sales,
due to the strength of the state franchise laws and current dealership sales and
service agreements between the "Big 3" and their dealer network. Nearly every
state has legislation with respect to dealer operating policies and procedures,
thus mandating that new vehicle sales and original equipment manufacturer parts
must be sold through a state licensed franchised dealer.

           As a result of the foregoing, the Company does not believe that the
"Big 3" alliance will have a significant negative impact on its operations.

         Although our belief is speculative, we believe that over-all our
business model will prove to have a competitive edge over that of our current
and potential competitors because our parts.com system is not designed
exclusively for the automotive parts industry but is adaptable to any parts
industry (i.e., consumer electronics, airplanes, appliances, computers, marine
products, housewares, etc). Thus, once our model is proven in the automotive
parts industry, we plan on expanding it to other parts industries. Further, we
believe our name and web site, "parts.com," is adaptable to any parts industry,
not only automotive parts (unlike names such as "Wrenchead.com"), and the
building of our brand name will be leveraged by its adaptability to any kind of
part. For example, once we expand into other parts industries, anyone needing a
part can log onto the Internet with the word "parts.com" or "parts.net" and will
access our site.

         Competition for ReallyKnow.com exists from some companies in a broad
sense related to the data research gathering industry. Companies such as Nielsen
Media Research, The Arbitron Company, JD Power and Associates all produce
research largely through telemarketing. These companies however, do not produce
statistical data in a real-time format. We believe our Miratouch solution is the
first "real-time" web-enabled research data gathering system that will be made
available to automobile dealerships through which they will be able to
accumulate qualitative and quantitative data on consumers who visit their
showrooms and take the time to complete the survey. Unlike other possible
competitors in market research, we believe that the Miratouch solution is one of
the few systems that relies on the Internet as its conduit of information for
data storage and retrieval. Our current competitors in the research marketplace
for automobile dealerships are The Dohring Corporation and Friedman/Swift. These
companies utilize systems whereby they survey consumers who have purchased from
their client's dealerships as well as customers who have purchased from their
client's competition. After surveying these consumers, companies like Dohring
and Friedman/Swift provide their clients with quantitative and qualitative data
relative only to the survey results that they receive. Typical surveys cost
thousands of dollars and only provide their clients with information that is not
only dated, but is only a measure of a specific point in time. The Miratouch
system allows dealerships the ability to generate questions and receive similar
types of feedback in a "real-time" and continuous format, thus enabling
dealerships to gather specific types of information over any period of time.
Thus, dealerships will be able to see changes in consumer trends as they occur
and not on a delayed basis. We believe only one company - The Dohring Company -
has a similar product that offers an on-line feature for data collection.
However, its product is currently being marketed for use at special events for
users of the product to obtain a "snapshot" of marketing data obtained over a
short time span (rather than a continuing "real time" format) and is not
specifically geared to the automobile industry.

Relationships With Suppliers

         We do not rely on any single vendor or group to fulfill our auto parts
orders for parts.com. We do rely on two main suppliers to manufacture and
produce ReallyKnow.com's proprietary products--Factura and MicroTouch, Inc. We



                                       11
<PAGE>   13


have no minimum purchase commitment requirements or minimum inventory level
requirements with these vendors and there exist alternative sources from which
we may contract for the manufacture of the ReallyKnow kiosk and related
components.

Intellectual Property

         In February 1999, we purchased for cash and stock the exclusive rights,
title and interest in and to the Internet Domain Names (a.k.a. "Uniform Resource
Locator" or "URL") and any trademarks or service marks in connection with
"www.parts.com" and "www.parts.net." We also own the URL's for many web-hosting
sites on behalf of our customers. Our primary URL's that are the property of the
Company include the following: www.theparts.com, www.theparts.net,
www.miratouch.com, www.reallyknow.com, www.reallyknow.net, www.flexradio.com and
www.flexradio.net.

         In October 1998, Shawn Lucas and Scott Andersen, officers, directors
and shareholders of the Company, assigned to us all of their right, title and
interest in and to a pending patent application with respect to the technology
for the Miratouch product (subsequently renamed "ReallyKnow.com.") A utility
patent for the technology was filed with the U. S. Patent & Trademark Office in
October 1998. The Miratouch solution is an automated computer-assisted marketing
research product that is conducted on-site at a merchant's location and online
through use of the Internet. With the Miratouch (ReallyKnow.com) solution, the
merchant can receive collected marketing research results on-demand.

         In May 1999, Messrs. Shawn Lucas and Scott A. Anderson assigned to
FlexRadio, Inc. all of their right, title and interest in and to a provisional
patent application filed in May 1999 for a radio frequency detection and
reporting service. These pending patent rights were acquired by the Company when
it acquired all of the common stock of FlexRadio, Inc. This technology is being
developed for real time marketing research and will be a part of our
ReallyKnow.com division.

         In December 1999, we filed a provisional patent application for our
parts.com system and have followed that up with a utility patent application
filed in December 2000. The parts.com technology is an automated
computer-assisted system for searching for and selecting automotive parts from a
virtual inventory of parts from various sources in the distribution chain,
processing orders and distributing revenue among the vendors, and tracking
inventory, orders and revenue.

         The provisional patent applications provide the basis for filing a U.S.
utility application and any desired foreign applications, which must be filed
within 12 months of the filing of the provisional applications. Once the utility
application is filed, the review process by the U.S. Patent and Trademark Office
normally takes two to three years. Once patents are issued, the term of the
patent is normally 20 years from the date of the utility patent application.

Certain Factors Affecting Future Results

         You should carefully consider the following risks and the other
information in this Report and our other filings with the SEC before you decide
to invest in our Company or maintain or increase your investment. The risks and
uncertainties described below are not the only ones facing us. Additional risks
and uncertainties may also adversely impact and impair our business. If any of
the following risks actually occur, our business, results of operations or
financial condition would likely suffer. In such case, the trading price of our
common stock could decline, and you may lose all or part of your investment.

OUR AUDITORS HAVE MODIFIED THEIR REPORT ON OUR FINANCIAL STATEMENTS WITH RESPECT
TO OUR ABILITY TO CONTINUE AS A 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. Since its
inception, the Company has sustained recurring losses from operations that to
date, total



                                       12
<PAGE>   14


$20,623,965. The Company used $3,784,520 and $1,412,490 of cash in operations
for the years ended December 31, 2000 and 1999, respectively and anticipates
additional cash needs in 2001. At December 31, 2000, the Company had a working
capital deficiency of $3,636,366 and cash of $8,683. The Company also has
undeposited payroll taxes to the Internal Revenue Service ("IRS") for the period
May 2000 through November 2000, resulting in an accrual for back payroll taxes
in the amount of approximately $378,000 as of December 31, 2000, including
penalties and interest. 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
certain members of senior management their regular salaries when due, which has
resulted in an accrual for back salaries of approximately $84,000 as of December
31, 2000. The Company was also in default of mortgage note obligations
encumbering its principal offices as of December 31, 2000 (see Notes 6 and 13 to
the consolidated financial statements). 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 Company's 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.

WE NEED ADDITIONAL CAPITAL.

         The Company must raise additional capital in the near term to continue
execution of its business plan. We are working with financial sources to raise
additional capital, but there are no guarantees that we will be able to raise
sufficient capital on a timely basis and on reasonable terms.

WE HAVE A LIMITED OPERATING HISTORY AND MAY EXPERIENCE RISKS ENCOUNTERED BY
EARLY-STAGE COMPANIES.

         We have a very limited operating history for use in evaluating our
business. Our business and prospects must be considered in light of the risks,
expenses and difficulties that companies encounter in the early stages of
development, particularly companies in new and rapidly evolving markets like the
Internet and e-commerce.

THE REVENUE AND PROFIT POTENTIAL OF OUR BUSINESS MODEL IS UNPROVEN.

         Our business model and marketplace are relatively new, and our ability
to generate revenue or profits from our TradeMotion Solutions is unproven. We
have initially focused on the automotive industry; our success is dependent upon
our ability to attract customers to, and expand our supplier base for, our
parts.com Web site, as well as our ability to attract customers for our
TradeMotion Solutions.



                                       13
<PAGE>   15


OUR FINANCIAL RESULTS MAY FLUCTUATE AND BE DIFFICULT TO FORECAST.

         Our quarterly revenues, expenses and operating results will be
unpredictable. We expect that our operating results will fluctuate in the future
as a result of a number of factors, some of which are beyond our control. These
factors include:

>>       Our ability to attract customers for our TradeMotion Solutions;
>>       Our ability to attract businesses and customers to our Web site;
>>       Our ability to attract and retain suppliers with large parts
         inventories;
>>       Our ability to control our gross margins;
>>       Our ability to timely process orders and maintain customer
         satisfaction;
>>       The availability and pricing of parts from suppliers;
>>       Product obsolescence and price erosion;
>>       Consumer confidence in encrypted transactions in the Internet
         environment;
>>       Our ability to obtain cost-effective advertising on other entities' Web
         sites;
>>       The effectiveness of off-line advertising in generating additional
         traffic to our Web site;
>>       The amount and timing of costs related to expansion of our operations;
>>       Technical difficulties encountered while using our Web site;
>>       Suppliers' delays in shipments to customers/businesses as a result of
         computer system failures, strikes or other problems with their delivery
         service;
>>       Delays in processing orders as a result of computer system failures,
         Internet brown-outs or problems with our credit card processing
         providers; and
>>       General economic conditions, and economic conditions specific to the
         Internet and e-commerce.

WE MAY NOT BE SUCCESSFUL IN DEVELOPING BRAND AWARENESS, AND THE FAILURE TO DO SO
COULD SIGNIFICANTLY HARM OUR BUSINESS AND FINANCIAL CONDITION.

         We believe that the importance of brand recognition will increase as
more companies engage in commerce over the Internet. Development and awareness
of the parts.com and TradeMotion brands will largely depend on our marketing
efforts. If suppliers do not perceive us as an effective marketing and sales
channel for their parts, or if businesses and consumers do not perceive us as
offering an efficient and desirable way to purchase parts, we will be
unsuccessful in promoting and maintaining our parts.com and TradeMotion brands.

IF WE FAIL TO MAINTAIN SATISFACTORY RELATIONSHIPS WITH OUR SUPPLIERS, OUR
BUSINESS WOULD BE MATERIALLY HARMED.

         We will be highly dependent upon our suppliers to provide inventory for
sale through our parts.com site. We do not have long-term supply contracts with
any of our suppliers. We cannot be certain that our current suppliers will
continue to provide inventory for sale. We must also attract additional
suppliers. We cannot be certain that we will be able to establish new supplier
relationships to ensure that merchandise will be available through our Web site.

         Our business will be significantly harmed if we are unable to develop
and maintain satisfactory relationships with suppliers on acceptable commercial
terms, if we are unable to access sufficient parts inventories, if the quality
of service provided by these suppliers falls below a satisfactory standard, or
if our level of returns exceeds our expectations.

WE FACE INTENSE COMPETITION IN THE E-COMMERCE MARKET, AND WE CANNOT GUARANTEE
THAT WE WILL BE ABLE TO COMPETE SUCCESSFULLY.

         The e-commerce market is new, rapidly evolving and extremely
competitive. We expect competition to continue to intensify. Barriers to entry
are minimal, and our business could be severely harmed if we are not able to
compete successfully against current or future competitors.

         Virtually all of our potential competitors have significantly greater
financial, marketing, technical and other resources, as well as longer operating
histories, larger customer bases and greater brand recognition in the markets in
which we compete. Our competitors may be able to devote significantly greater
resources to marketing and promotional campaigns.



                                       14
<PAGE>   16


         Some of our competitors may establish cooperative relationships among
themselves or directly with suppliers to obtain exclusive or semi-exclusive
sources of parts. In addition, we anticipate that there will be consolidation in
our industry. Accordingly, it is possible that new competitors or alliances
among competitors and suppliers may emerge and rapidly acquire market share. In
addition, manufacturers may elect to sell their parts directly. Increased
competition is likely to reduce our operating margins, cause us to lose market
share or diminish our brand. If any of these events occur, our business would be
significantly harmed.

OUR GROWTH AND FUTURE SUCCESS DEPEND UPON OUR ABILITY TO GENERATE TRAFFIC TO OUR
WEB SITE AND PROMOTE OUR PRODUCTS

         Our ability to sell parts through our Internet site depends
substantially on our ability to attract user traffic to our Web site. If we are
unable to generate traffic to our Web site cost-effectively, or if our efforts
to promote our services and products using both online and off-line media are
not successful, our growth and business prospects will be substantially limited.

OUR BUSINESS MAY SUFFER FROM CAPACITY CONSTRAINTS OR SYSTEM INTERRUPTIONS.

         We may periodically experience systems interruptions, including
Internet disruptions. Any systems interruptions, including Internet disruptions
that make our Web site inaccessible or reduce our order fulfillment performance,
would reduce the volume of parts we are able to sell, which could harm our
business.

         In addition, an increase in the volume of traffic to our Web site could
adversely affect the capacity of the software or hardware deployed by us, which
could lead to slower response time or even system failures.

IF WE ENCOUNTER SYSTEM FAILURE, SERVICE TO OUR CUSTOMERS COULD BE DELAYED OR
INTERRUPTED. SERVICE DELAYS OR INTERRUPTIONS COULD RESULT IN A LOSS OF CUSTOMERS
AND SEVERELY HARM OUR BUSINESS.

         Our ability to successfully maintain an e-commerce Web site and provide
acceptable levels of customer service largely depends on the efficient and
uninterrupted operation of our computer and communications hardware and network
systems. Any interruptions could severely harm our business and result in a loss
of customers. Our systems and operations are vulnerable to damage or
interruption from human error, sabotage, fire, flood, earthquake, power loss,
telecommunications failure and similar events. Moreover, we may experience
delays and interruptions in our telephone and Internet access, which will
prevent customers from accessing our Web site.

OUR BUSINESS WILL SUFFER IF WE DO NOT RETAIN OUR CURRENT KEY PERSONNEL.

         Our future performance depends substantially on the continued service
of our senior management and other key personnel. The loss of the services of
one or more of our key personnel could seriously harm our business. Our future
success also depends on our continuing ability to attract, hire, train and
retain a substantial number of highly skilled managerial, technical, sales,
marketing and customer support personnel. Our failure to do so could adversely
affect our business and financial condition.

WE MAY NOT BE ABLE TO SUCCESSFULLY PROTECT OUR PROPRIETARY RIGHTS.

         Our ability to compete effectively will depend upon our ability to
maintain the proprietary nature of our services and technologies, including our
proprietary software. Although we have two patent applications pending, we hold
no patents and rely on a combination of trade secrets and copyright laws,
non-disclosure, and other contractual agreements to protect our rights in our
technological know-how and proprietary services. We depend upon confidentiality
agreements with our officers, directors, employees and consultants to maintain
the proprietary nature of our technology. These measures may not afford us
sufficient or complete protection; and others may independently develop know-how
and services similar to ours, otherwise avoid our confidentiality agreements, or




                                       15
<PAGE>   17

produce patents or copyrights that would materially adversely affect our
business, prospects, financial condition and results of operations.

OUR SUCCESS DEPENDS ON THE INTERNET'S ABILITY TO ACCOMMODATE GROWTH IN
E-COMMERCE.

         The use of the Internet for retrieving, sharing and transferring
information among businesses, buyers, suppliers and partners has only recently
begun to develop. If the Internet were not able to accommodate growth in
e-commerce, our business would suffer. The recent growth in the use of the
Internet has caused frequent periods of performance degradation. Our ability to
sustain and improve our services is limited, in part, by the speed and
reliability of the networks operated by third parties. Consequently, the
emergence and growth of the market for our services is dependent on improvements
being made to the Internet infrastructure to alleviate overloading and
congestion.

A LACK OF DEVELOPMENT OF THE E-COMMERCE MARKET WOULD NEGATIVELY AFFECT US.

         If the e-commerce market does not grow or grows more slowly than
expected, our business will suffer. The possible slow adoption of the Internet
as a means of commerce by businesses may harm our prospects.

         Even if the Internet is widely adopted as a means of commerce, the
adoption of our network for procurement -- particularly by companies that have
relied on traditional means of procurement -- will require broad acceptance of
the new approach.

Employees

         As of February 29, 2001, the Company had a total staff of 27 employees,
comprised of 11 technical professionals, 9 sales, marketing and customer service
personnel and 7 administrative personnel. All employees are full-time. No
employees are represented by a labor union or subject to a collective bargaining
agreement. Management believes that employee relations are good.

ITEM 2.  DESCRIPTION OF PROPERTIES

         We own the office building that is the Company's headquarters at 121
East First Street, Sanford, Florida 32771, which is approximately twenty miles
northeast of Orlando. The building has approximately 8,000 square feet of space
and is in historic downtown Sanford. We also own a 5,000 square foot parking lot
located one block from our office. The lot is subject to a $20,500 9% first
mortgage with monthly principal and interest payments of $260 and a final
balloon payment of $12,769 in January 2004. The office building and the lot are
subject to a first mortgage and second mortgage and loan agreements. The
promissory notes secured by the mortgage are for $380,000. Interest is
calculated at 15% per annum and is payable at $4,750 per month, with the
principal balance and any accrued but unpaid interest due and payable in full on
May 31, 2016. The President of the Company has executed a conditional personal
guaranty in connection with these mortgage notes.

         As of December 31, 2000 the Company was delinquent on monthly payments
under the first and second mortgage notes dating back to October 2000. The
Company had received a notice of demand from the lender indicating that if the
entire amount owed were not paid within 30 days, the lender would begin
foreclosure proceedings.

         The Company entered into an agreement in March 2001 with its mortgage
lender which provides for the deferral of pursuing any remedies available under
the mortgage notes payable agreements until after May 18, 2001 in exchange for
the transfer of a total of 100,000 officers' and directors' personal shares
which were pledged as collateral for the notes.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is not a party to any material legal proceedings, and there
are no pending material legal proceedings of which the Company is aware.

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

None.



                                       16
<PAGE>   18


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

Market Information.  The shares of common stock of the Company are traded on the
Over-The-Counter Electronic Bulletin Board under the symbol "MIRM." The
following table sets forth for the periods indicated the high and low bid prices
of our common stock, as obtained from Nasdaq Trading & Marketing Services. The
quotations reflect prices between dealers in securities, without retail mark-up,
markdown or commission, and may not represent actual transactions.

                                                  HIGH            LOW
                                                  ----            ---
                    Fiscal Year Ended:
                    -----------------
                    December 31, 2000
                      Fourth Quarter             $ 2.25          $  .38
                      Third Quarter                2.19            1.38
                      Second Quarter              12.50            2.00
                      First Quarter               50.50            8.25

                    Fiscal Year Ended:
                    -----------------
                    December 31, 1999
                      Fourth Quarter             $20.00            1.03
                      Third Quarter                2.19            1.06
                      Second Quarter               3.81            1.31
                      First Quarter                6.37            2.19

Holders. As of December 31, 2000 there were approximately 200 record holders of
the Company's common stock; however, there were approximately 5,000 beneficial
owners.

Dividends.  The Company has never paid a dividend on its common stock, and does
not intend to pay dividends on its common stock in the foreseeable future.

Our board of directors, without further action by the stockholders, are
authorized to issue an aggregate of 10,000,000 shares of preferred stock. No
shares of preferred stock are outstanding. The board of directors may, without
stockholder approval, issue preferred stock with dividend rates, redemption
prices, preferences on liquidation or dissolution, conversion rights, voting
rights and any other preferences, which rights and preferences could adversely
affect the voting power of the holders of common stock. Issuance of preferred
stock, while providing desirable flexibility in connection with possible
acquisitions or other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or could discourage or delay a
third party from acquiring, a majority of our outstanding stock.

Recent Sales of Unregistered Securities. The Company issued the following
unregistered securities during the fiscal year ended December 31, 2000:

On January 1, 2000, the Company issued 5,000 shares to Eugene Gramzow, an
accredited investor, in respect of consulting services. The investor was
provided information about the Company or had access to such information, and
the investor was provided opportunities to ask questions of management
concerning the information provided or made available. The investor confirmed in
writing his investment intent, and the certificates for the securities bear a
legend accordingly.

From January 3, 2000 through March 29, 2000, the Company issued a total of
10,000 shares of common stock to 8 employees pursuant to employment agreements.
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.



                                       17
<PAGE>   19


On February 11, 2000, the Board of Directors approved the contingent issuance of
34,000 shares of common stock to Mars Incorporated in connection with a NASCAR
promotion. The Company is relying on the exemption from registration provided
under Section 4(6) since Mars Incorporated is an accredited investor, no
advertising or public solicitation was conducted in connection with the
transaction, and the Company filed a notice with the SEC. On May 24, 2000, by
board resolution the Company cancelled the contingent issuance and shares were
returned to treasury.

From February 15, 2000 through March 29, 2000, the Company issued to two
employees a total of 5,500 shares of common stock as bonuses. 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.

From February 28, 2000 through March 22, 2000, the Company issued a total of
60,000 shares of common stock to two directors of the Company, both accredited
investors. 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.

On March 29, 2000, the Company issued to Ian Hart, an executive officer of the
Company and as such an accredited investor, and Jon Palazzo, an employee of the
Company, 50,000 shares of common stock and 30,000 shares of common stock,
respectively, as bonuses. 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.

From April 7, 2000 through December 12, 2000, the Company sold 1,709,585 shares
of common stock in private placements to 14 investors (12 of which were
accredited) for net proceeds of $1,694,083 (share prices ranging from $.25 to
$4). 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.

On April 10, 2000, the Company issued 2,500 shares to Jeffrey Taylor for
consulting services. The securities were issued in reliance on Section 4(2) of
the Securities Act. The investor was 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 investor confirmed in writing their investment intent, and the
certificates for the securities bear a legend accordingly.

On April 13, 2000, the Company issued 10,000 shares to an accredited investor,
Mediawise Communications, for consulting services. The securities were issued in
reliance on Section 4(2) of the Securities Act. The investor was 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 investor confirmed in writing
their investment intent, and the certificates for the securities bear a legend
accordingly.

On April 24, 2000 and July 20, 2000, the Company issued a total of 20,000 shares
to an accredited investor, Richard Lobley, for consulting services. The
securities were issued in reliance on Section 4(2) of the Securities Act. The
investor was provided information about the Company or had access to such



                                       18
<PAGE>   20

information, and the investors were provided opportunities to ask questions of
management concerning the information provided or made available. The investor
confirmed in writing their investment intent, and the certificates for the
securities bear a legend accordingly.

From April 24, 2000 through June 26, 2000, the Company issued a total of 17,500
shares of common stock to 3 employees pursuant to employment agreements. 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.

On June 8, 2000, the Company issued 25,000 shares to an accredited investor,
Anthem Communications, for consulting services. The securities were issued in
reliance on Section 4(2) of the Securities Act. The investor was 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 investor confirmed in writing
their investment intent, and the certificates for the securities bear a legend
accordingly.

From November 6, 2000 through November 27, 2000, the Company issued a total of
383,000 shares of common stock to 10 employees pursuant to employment
agreements. 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.

On December 29, 2000, the Company issued a total of 384,000 shares of common
stock to 18 employees in exchange for the cancellation and retiring of stock
options for the same amount of underlying shares. 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.

On December 29, 2000, the Company issued to Shawn Lucas, Michael Fouts, Scott
Anderson and Jeffrey Odato, executive officers of the Company and as such
accredited investors, 110,000 shares of common stock each (440,000 total shares)
in exchange for the cancellation and retiring of stock options for the same
amount of underlying shares. 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.

On December 29, 2000, the Company issued to Ian Hart, an executive officer of
the Company and as such an accredited investor, and Jon Palazzo, an employee of
the Company, 220,000 shares of common stock each (440,000 total shares) in
exchange for the cancellation and retiring of stock options for the same amount
of underlying shares. 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.

On December 29, 2000, the Company issued a total of 242,308 shares to an
accredited investor, greater than 5% shareholder and affiliate of the Company,
George Demakos for consulting services. The securities were issued in reliance
on Section 4(2) of the Securities Act. The investor was provided information
about the Company or had access to such information, and the investors were


                                       19
<PAGE>   21


provided opportunities to ask questions of management concerning the information
provided or made available. The investor confirmed in writing their investment
intent, and the certificates for the securities bear a legend accordingly.

On December 29, 2000, the Company issued to Shawn Lucas, Scott Anderson, Michael
Fouts and Jeffrey Odato, executive officers of the Company, and as such
accredited investors, 300,000, 275,000, 225,000 and 100,000 shares of common
stock respectively, as bonuses. 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.

ITEM 6.  SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with the
more detailed financial statements, related notes and other financial
information included herein.

Statement of Operations Data:
                                      Year Ended             Year Ended
                                   December 31, 2000      December 31, 1999
                                   ----------------       ------------------


Net Sales                         $     903,162            $   1,364,694
Cost of Sales                           850,803                1,137,223
Operating and other Expenses         13,814,308                5,223,679
                                  -------------            -------------
Net Loss                          $ (13,761,949)           $  (4,996,208)
                                  =============            =============






Balance Sheet Data:
                                    December 31, 2000      December 31, 1999
                                  ---------------------    ------------------


Current Assets                      $      86,757            $   1,363,843
Total Assets                        $   5,217,864            $  10,970,767
Current Liabilities                 $   3,723,123            $   1,321,707
Total Liabilities                   $   3,739,644            $   1,719,683
Working Capital (Deficiency)        $  (3,636,366)           $      42,136
Stockholders' Equity                $   1,478,220            $   9,251,084



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

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S
FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED IN ITEM 8 OF THIS ANNUAL
REPORT. ALL STATEMENTS RELATED TO THE COMPANY'S CHANGING FINANCIAL OPERATIONS
AND EXPECTED FUTURE GROWTH CONSTITUTE FORWARD-LOOKING STATEMENTS. THE ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED OR EXPRESSED IN SUCH
STATEMENTS.

Overview

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. Since its inception, the Company



                                       20
<PAGE>   22
has sustained recurring losses from operations that to date, total $20,623,965.
The Company used $3,784,520 and $1,412,490 of cash in operations for the years
ended December 31, 2000 and 1999, respectively, and anticipates additional cash
needs in 2001. At December 31, 2000, the Company had a working capital deficit
of $3,636,366 and cash of $8,683. The Company also has undeposited payroll taxes
to the Internal Revenue Service ("IRS") for the period May 2000 through November
2000, resulting in an accrual for back payroll taxes in the amount of
approximately $378,000 as of December 31, 2000, including penalties and
interest. 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 certain
members of senior management their regular salaries when due, which has resulted
in an accrual for back salaries of approximately $84,000 as of December 31,
2000. The Company was also in default of mortgage note obligations encumbering
its principal offices as of December 31, 2000 (see Notes 6 and 13 to the
consolidated financial statements). 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 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.

There are many events and factors in connection with the development,
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

Year ended December 31, 2000 compared to December 31, 1999

For the year ended December 31, 2000, the Company's total revenue amounted to
$903,162 versus last year's revenue of $1,364,694. In year 2000, the Company was
in a state of transition with its expansion focused on its parts.com e-commerce
business-to-business, the sale of its TradeMotion Software Solutions and the
development of its online real-time data gathering business, ReallyKnow.com. The
Company collected approximately $1.3 million in annual territory fees from
dealerships participating in its e-commerce initiative. Of this amount, $513,108
has been recorded as deferred revenue at December 31, 2000. The launch of the
Company's web site occurred in late-January 2000 and the Company processed a
minimal amount of transactions for the year, resulting in minimal transaction
revenue of approximately $8,000. Due to the lower-than-expected



                                       21
<PAGE>   23


transactions for the web site, the Company extended the terms of its Platinum
and Gold dealer territory contracts through December 31, 2001. In connection
with the implementation of its current business plan for ReallyKnow.com which
concentrates the Company's advertising activities in the e-commerce sector, the
Company is no longer actively involved in the production of radio and television
advertising. For the years ended December 31, 2000 and 1999, the Company
generated gross revenues of approximately $20,000 and $780,000, respectively,
from the production of radio and television media. Additionally, for the year
ended December 31, 1999, the Company recognized $198,000 in software development
revenue for services related to a contract that was deferred at December 31,
1998.

The Company generated a gross profit of $227,471 for the year ended December 31,
1999 compared to a gross profit of $52,359 for the year ended December 31, 2000.
The primary reason for the lower gross profit from 1999 to 2000 is due to the
Company focusing its efforts and resources on selling auto parts over its web
site in 2000 and licensing its TradeMotion Software Solutions. Significant
expenditures incurred during year 2000 include web site hosting costs and
related telephone, internet and T-1 expenses, as well as technical support
salaries to develop the web site. The Company generated minimal transaction fee
revenue from its web site in year 2000 and recognized approximately 60% of the
collected territory fees. The balance of territory fees collected have been
recorded as deferred revenue and will continue to be amortized as income on a
quarterly basis through December 31, 2001. The Company has continually seen a
steady increase in its web site transactions and believes that increased site
traffic will result in increased sales as its product becomes known and gains
market acceptance; however, there can be no assurance that such market
acceptance shall be attained.

Operating and other expenses increased $8,590,629 or 164% for the year ended
December 31, 2000 compared to the same period last year as a result of several
factors. During year 2000, the Company incurred $195,000 in marketing and
advertising costs in connection with the launch of the web site parts.com, its
e-commerce business-to-business exchange, at the National Automobile Dealers
Association convention in Orlando, Florida. The Company also incurred
approximately $100,000 in marketing costs related to its presentation at the
Automotive Aftermarket Products Expo in Las Vegas, Nevada. Additionally, the
Company incurred $318,000 in expenses related to its marketing efforts through
NASCAR and its associate sponsorship with M&M's/Mars Incorporated. During year
2000, the Company increased its workforce from 18 employees at December 31, 1999
to 42 employees at the end of the third quarter, subsequently trimming its
workforce to 27 by December 31, 2000. Finally, in the year ended December 31,
2000, the Company spent more than $150,000 in professional fees (accounting and
legal) directly attributable to becoming a "reporting" entity with the SEC as a
result of new guidelines established by the NASD. Depreciation and amortization
for the year ended December 31, 2000 rose $1,015,565 or 114% to $2,000,635 as a
result of amortization of goodwill associated with the Company's Livecode
acquisition (May 1999) and the acquisition of the FlexRadio patent (October
1999), not present in the same period in the prior year. The Company recorded a
goodwill and patent impairment charge of $1,485,935 and $1,019,818,
respectively, and non-cash interest expense of $950,000 in year 2000, also not
present in the prior year. Stock based compensation totaled $3,644,388 for the
year ended December 31, 2000 as compared to $1,815,264 for the same period last
year reflecting a conservation of cash resources by management and in order to
attract and retain key personnel.

Year ended December 31, 1999 compared to the period from Inception (January 27,
1998) to December 31, 1998

For the year ended December 31, 1999, the Company's revenue increased $987,095
or 261% compared to the period from Inception (January 27, 1998) to December 31,
1998 due to sales from its UEP/MTV Pinnacle acquisition reflective of one year,
whereas in the prior period, this division produced sales for only three months
(from the date of acquisition, September 30, 1998 through December 31, 1998.)
The date of inception is reported as January 27, 1998 (the incorporation date of
DTR) rather than September 13, 1995 (the incorporation date of I.E.L.S.) because
the consummation of the exchange agreement between DTR and I.E.L.S. was in
effect a recapitalization of DTR, similar to a reverse acquisition of I.E.L.S.
by DTR. Therefore, this annual report presents the financial statements of
DTR. In connection with the implementation of its current business plan for
ReallyKnow.com which concentrates the Company's advertising activities in the
e-commerce sector, the Company is no longer involved in the production of radio



                                       22
<PAGE>   24

and television advertising. For the year ended December 31, 1999 and the period
ended December 31, 1998, the Company generated gross revenues of approximately
$777,000 and $233,000, respectively, from the production of radio and television
media.

Operating and other expenses increased $3,282,381 or 169% from the prior period
arising primarily from the increased level of operations, amortization of
goodwill associated with the Company's acquisitions and the asset impairment
charge of $74,000 related to property and equipment.

Liquidity and Sources of Capital

           Year 2000

During the year ended December 31, 2000, the Company's operations used
approximately $3.78 million of cash. In order to fund its operating losses, the
Company sold approximately 1.7 million shares of its common stock through
private placements raising approximately $1.7 million. Additionally, the Company
executed two convertible promissory notes for $500,000 and $550,000 with private
parties in July, September and December, 2000. One of the promissory notes was
increased by $100,000 on similar terms subsequent to year-end. Further, the
Company paid approximately $2,304,858 of accounts payable, fees owed for
consulting services, and employment contracts and salary bonuses by issuing
2,275,808 shares of common stock.

The Company's internally generated cash flow has not been sufficient to finance
its operations. The cumulative losses of the Company continue to be financed
through the private placement of common stock, the issuance of convertible
promissory notes and through the increase in other current liabilities.

The Company has not been able to make timely payments to trade suppliers and
other vendors; however, deferred payment terms are being negotiated with these
vendors. In addition, the Company did not remit payroll taxes to the Internal
Revenue Service ("IRS") for the period April 2000 through November 2000,
resulting in an accrual for back payroll taxes in the amount of $378,000 as of
December 31, 2000, including penalties and interest. The Company is currently
negotiating a payment plan with the IRS, but no formal agreement has been
reached. 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.

The ability of the Company to continue to satisfy its obligations depends in
part on its ability to reach a profitable level of operations and secure both
short and long-term financing for the development and expansion of its business.
The Company is currently in negotiations with financial institutions and other
private investors and lenders to provide additional funding through equity or
debt financing to fund its business plan. Without short or long-term financing,
in order to meet its current and future capital needs, the Company will continue
to depend on cash receipts from sales of its software, fee revenue generated
from its e-commerce website, proceeds from the sale of additional shares of



                                       23
<PAGE>   25

common stock and proceeds from the issuance of convertible promissory notes.
There can be no assurance, however, that the Company will be successful in
obtaining any such additional financing through equity or debt financing.

           Year 1999

During the year ended December 31, 1999, the Company's operations used
approximately $1.4 million of cash. In order to fund its operating losses, the
Company sold approximately 2.8 million shares of its common stock through
private placements raising approximately $2.5 million. Additionally, the Company
executed three $50,000 convertible promissory notes with private parties in
September and October, 1999. These promissory notes were each increased to
$100,000. At or near year-end, the holders of these notes converted $304,888 of
principal and accrued interest into 609,776 shares of common stock. Further, the
Company converted approximately $2,676,211 of accounts payable, outstanding
notes and fees owed for consulting services and employment contracts and salary
bonuses into 1,515,907 shares of common stock.

In May 1999, the Company financed the acquisition of its office building and
adjacent parking lot with a $380,000 loan from a private party and gave the
lender a first mortgage on the office building and a second mortgage on the
parking lot.



                                       24
<PAGE>   26


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


The financial statements required by this report appear beginning at page F-1 as
follows:

                                                                     Page
                                                                     ----


PARTS.COM, INC. AND SUBSIDIARY
(FORMERLY MIRACOM CORPORATION)

Independent Auditors' Reports                                        F-2

Consolidated Balance Sheets as of December 31, 2000                  F-4
         and 1999

Consolidated Statements of Operations for the Years Ended            F-6
         December 31, 2000 and 1999

Consolidated Statements of Stockholders' Equity for the Years        F-7
         Ended December 31, 2000 and 1999

Consolidated Statements of Cash Flows for the Years Ended            F-8
         December 31, 2000 and 1999

Notes to Consolidated Financial Statements                           F-11














                                      F-1
<PAGE>   27

INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
  parts.com, Inc. and subsidiary
  Sanford, Florida

We have audited the accompanying consolidated balance sheet of parts.com, Inc.
and subsidiary (the Company) as of December 31, 2000 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2000, and the
results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1, the Company has
substantial losses since inception, has a working capital deficiency at December
31, 2000, is experiencing difficulty in generating sufficient cash flow to meet
its obligations and sustain its operations, was in default of mortgage note
obligations (see Notes 6 and 13), and is subject to federal tax liens (see Note
11), which raises substantial doubt about the Company's ability to continue as a
going concern. Management's plans related to these matters are also described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ Deloitte & Touche LLP
Certified Public Accountants

Orlando, Florida
April 13, 2001


                                      F-2
<PAGE>   28
              REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
parts.com, Inc. and Subsidiary
Sanford, Florida


We have audited the accompanying consolidated balance sheet of parts.com, Inc.
and Subsidiary (the Company) as of December 31, 1999, and the related
consolidated statements of operations and stockholders' equity, and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
parts.com, Inc. and Subsidiary as of December 31, 1999, and the consolidated
results of it's operations and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. During the year ended
December 31, 1999, the Company incurred a net loss of approximately $4,996,000
and had negative cash flows from operations of approximately $1,412,000. In
addition, a substantial portion of its assets are intangible; the ultimate
realization of which is uncertain. These matters raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans
concerning these matters are described in Note 1. The consolidated financial
statements do not include any adjustments that might result from the outcome of
these uncertainties.



/s/ Moore Stephens Lovelace, P.A.
---------------------------------
Certified Public Accountants


Orlando, Florida
February 25, 2000


                                      F-3
<PAGE>   29

                         PARTS.COM, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                         December 31
                                                 ----------------------------
                                                      2000             1999
                                                 -----------      -----------


CURRENT ASSETS:

    Cash                                         $     8,683      $ 1,180,833
    Accounts receivable trade, net of
         allowance for doubtful accounts of
         $77,863 and $53,885, respectively            10,751           50,597
    Inventory                                             --           54,589
    Prepaid expenses                                  67,323           77,824
                                                 -----------      -----------
         Total Current Assets                         86,757        1,363,843
                                                 -----------      -----------

PROPERTY AND EQUIPMENT, net                          929,084          823,221

DEFERRED LOAN COSTS, net of
    accumulated amortization of
    $25,343 and $10,137 for 2000
    and 1999, respectively                           233,157          248,363

OTHER ASSETS, net                                    104,634          415,400

PATENT, net of accumulated amortization
    of $1,532,950 and $249,550 for 2000
    and 1999, respectively                         3,864,232        6,167,450

GOODWILL, net of accumulated amortization
    of $0 and $380,288, for
    2000 and 1999, respectively                           --        1,952,490
                                                 -----------      -----------
    Total Assets                                 $ 5,217,864      $10,970,767
                                                 ===========      ===========







          See Accompanying Notes to Consolidated Financial Statements


                                      F-4
<PAGE>   30







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

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                        December 31
                                                 -----------------------------
                                                      2000             1999
                                                 ------------     ------------


CURRENT LIABILITIES:

    Accounts payable and accrued expenses        $    915,455     $    565,814
    Other current liabilities                         801,070          158,352
    Current portion of mortgage notes payable         381,562            1,428
    Current portion of capitalized leases                  --           10,113
    Convertible promissory notes                    1,050,000               --
    Notes payable - related party                      61,928               --
    Deferred revenue                                  513,108          586,000
                                                 ------------     ------------
         Total Current Liabilities                  3,723,123        1,321,707

LONG-TERM PORTION OF MORTGAGE NOTES PAYABLE            16,521          397,976
                                                 ------------     ------------
         Total Liabilities                          3,739,644        1,719,683
                                                 ------------     ------------
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,
    50,000,000 shares authorized,
    27,785,599 and 23,051,206 shares
    issued and outstanding, respectively               27,786           23,051

    Additional paid-in capital                     22,567,458       16,090,049

    Accumulated deficit                           (20,623,965)      (6,862,016)

    Deferred stock-based employee
       compensation                                  (493,059)              --
                                                 ------------     ------------
         Total Stockholders' Equity                 1,478,220        9,251,084
                                                 ------------     ------------
         Total Liabilities and
               Stockholders' Equity              $  5,217,864     $ 10,970,767
                                                 ============     ============



          See Accompanying Notes to Consolidated Financial Statements


                                      F-5
<PAGE>   31

                         PARTS.COM, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                           Year Ended        Year Ended
                                          December 31,      December 31,
                                              2000              1999
                                         ------------       ------------


NET SALES                                $    903,162       $  1,364,694

COST OF SALES                                 850,803          1,137,223
                                         ------------       ------------

         GROSS PROFIT                          52,359            227,471
                                         ------------       ------------

SELLING, GENERAL AND ADMINISTRATIVE
    EXPENSES:

  Stock-Based Employee Compensation         3,005,605          1,180,028

  Stock-Based Consulting Fees                 638,783            635,236

  Other                                     4,733,093          2,380,179

  Amortization                              1,774,735            824,815

  Depreciation                                130,933             65,288

Interest, net (inclusive of noncash
 interest of $950,000 for 2000
 and $0 for 1999)                           1,025,406             64,133

Goodwill Impairment Charge                  1,485,935                 --

Patent Impairment Charge                    1,019,818                 --

Asset Impairment Charge                            --             74,000
                                         ------------       ------------

         TOTAL EXPENSES                    13,814,308          5,223,679
                                         ------------       ------------

NET LOSS                                 $(13,761,949)      $ (4,996,208)
                                         ============       ============
BASIC AND DILUTED NET LOSS
    PER COMMON SHARE                     $       (.57)      $       (.34)
                                         ============       ============
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                 24,128,345         14,513,144
                                         ============       ============







          See Accompanying Notes to Consolidated Financial Statements




                                      F-6
<PAGE>   32


                         PARTS.COM, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>


                                                                                                              Deferred
                                            Common Stock         Additional      Stock                       Stock-based
                                       --------------------      Paid-in       Subscription  Accumulated     Employee
                                       Shares        Amount      Capital        Receivable     Deficit      Compensation    Total
                                       ------        ------    -----------    -------------  ------------   ------------    -----

<S>                                  <C>             <C>         <C>            <C>          <C>             <C>            <C>
Balance - December 31, 1998          11,187,500   $  11,188   $  2,323,183   $  (17,000)   $ (1,865,808)   $      --   $    451,563

Issuance of common stock, for
   cash in private placements,
   net of $50,000 of common stock
   for offering costs                 2,810,153       2,810      2,431,214           --              --           --      2,434,024

Issuance of stock options to
   officers and directors                    --          --        253,000           --              --           --        253,000

Issuance of common stock to acquire
   LiveCode, Inc.                       600,000         600      1,501,200           --              --           --      1,501,800

Issuance of common stock
   to acquire FlexRadio, Inc.         6,200,000       6,200      6,410,800           --              --           --      6,417,000

Issuance of Common Stock
   for accounts payable, conversion
   of notes payable and services      2,253,553       2,253      3,170,652           --              --           --      3,172,905

Collection of stock subscription
   receivable                                --          --             --       17,000              --           --         17,000

Net loss for the period                      --          --             --           --      (4,996,208)          --     (4,996,208)
                                     ----------   ---------   ------------   ----------    ------------    ---------   ------------

Balance - December 31, 1999          23,051,206   $  23,051   $ 16,090,049   $       --    $ (6,862,016)   $      --   $  9.251,084

Issuance of stock options to
   Directors                                 --          --        206,326           --              --           --        206,326

Issuance of stock options for
   consulting services                       --          --         10,514           --              --           --         10,514

Issuance of common stock for cash
   in private placements, net of
   $66,840 in offering costs          1,709,585       1,710      1,692,373           --              --           --      1,694,083

Issuance of common stock to
   Directors                             60,000          60        719,040           --              --           --        719,100

Issuance of convertible debt with a
   beneficial conversion feature             --          --        950,000           --              --           --        950,000

Issuance of common stock for
   accounts payable and services      2,275,808       2,276      2,302,582           --              --           --      2,304,858

Stock granted for employee
   compensation                         689,000         689        596,574           --              --     (597,263)            --

Amortization of employee stock-
   based compensation                        --          --             --           --              --      104,204        104,204

Net loss for the period                      --          --             --           --     (13,761,949)          --    (13,761,949)
                                     ----------   ---------   ------------   ----------    ------------    ---------   ------------
Balance - December 31, 2000          27,785,599   $  27,786   $ 22,567,458   $       --    $(20,623,965)   $(493,059)  $  1,478,220
                                     ==========   =========   ============   ==========    ============    =========   ============

</TABLE>












          See Accompanying Notes to Consolidated Financial Statements


                                      F-7
<PAGE>   33



                         PARTS.COM, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                  Year Ended      Year Ended
                                                 December 31,    December 31,
                                                     2000            1999
                                                 ------------    ------------

CASH FLOWS FROM OPERATING
  ACTIVITIES:

  Net loss                                       $(13,761,949)   $ (4,996,208)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
       Goodwill impairment charge                   1,485,935              --
       Patent impairment charge                     1,019,818              --
       Amortization                                 1,774,735         824,815
       Depreciation                                   130,933          65,288
       Non-cash interest expense                      950,000              --
       Stock-based compensation                     3,644,388       1,815,264
       Asset impairment charge                             --          74,000
       Provision for doubtful accounts                 38,680          46,962

  Changes in operating assets and liabilities,
       net of acquisitions:
             Receivables                                1,166         (48,772)
             Inventory                                     --         (54,589)
             Prepaid expenses                          10,501          82,405
             Other assets                               1,806              --
             Deferred revenue                         (72,892)        388,500
             Accounts payable and accrued
                 expenses                             349,641         288,427
             Other current liabilities                642,718         101,418
                                                 ------------    ------------
  Net cash used in
       operating activities                        (3,784,520)     (1,412,490)
                                                 ------------    ------------
CASH FLOWS FROM INVESTING
  ACTIVITIES:

  Payments for property and
       equipment                                     (182,207)       (561,025)
  Payments for other assets                                --         (30,078)
                                                 ------------    ------------
  Net cash used in
       investing activities                          (182,207)       (591,103)
                                                 ------------    ------------








                                      F-8
<PAGE>   34




                         PARTS.COM, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED



                                               Year Ended           Year Ended
                                              December 31,         December 31,
                                                  2000                 1999
                                             -------------       --------------

CASH FLOWS FROM FINANCING
    ACTIVITIES:

    Proceeds from issuance of
         convertible promissory notes           1,050,000              300,000
    Borrowing under mortgages
         payable                                       --              400,500
    Repayments of mortgages payable                (1,321)              (1,096)
    Repayments of other liabilities                    --              (24,250)
    Proceeds from notes payable                   228,528                   --
    Repayments of bank note payable                    --              (37,788)
    Repayment of notes payable                   (166,600)                  --
    Repayments of capitalized leases              (10,113)             (19,473)
    Proceeds from issuance of
         common stock                           1,760,923            2,501,024
    Payments for offering costs                   (66,840)                  --
                                              -----------          -----------
    Net cash provided by
         financing activities                   2,794,577            3,118,917
                                              -----------          -----------

(DECREASE) INCREASE IN CASH                    (1,172,150)           1,115,324

CASH, AT BEGINNING OF YEAR                      1,180,833               65,509
                                              -----------          -----------

CASH, AT END OF YEAR                          $     8,683          $ 1,180,833
                                              ===========          ===========
SUPPLEMENTAL DISCLOSURES OF
    CASH FLOW INFORMATION:

    Cash paid during the period for
         interest                             $    61,519          $    62,737
                                              ===========          ===========

SUPPLEMENTAL SCHEDULE OF NON
CASH INVESTING & FINANCING
ACTIVITIES:



    Year Ended December 31, 2000:

    Issuance of 2,660,000 shares of common stock in connection with employment
       contracts and employee bonuses, in the aggregate amount of $2,562,311.

    Issuance of 294,808 shares of common stock in payment of $274,560 of
       consulting fees.

    Issuance of 10,000 shares for advertising costs valued at $65,250.

    Reclassification of inventory to property and equipment in the amount
       of $54,589.




                                      F-9
<PAGE>   35

                         PARTS.COM, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED


SUPPLEMENTAL SCHEDULE OF NON
    CASH INVESTING & FINANCING
    ACTIVITIES, CONTINUED:

Year Ended December 31, 1999:

    Issuance of 600,000 shares of Common Stock in connection with the
       acquisition of LiveCode, Inc., valued at $1,501,800.

    Issuance of promissory note in the original principal amount of $20,000 in
       connection with the acquisition of LiveCode, Inc.

    Issuance of 40,000 shares of Common Stock, valued at $.50 per share, in
       satisfaction of the $20,000 promissory note issued in connection with the
       acquisition of LiveCode, Inc.

    Issuance of 246,407 shares of Common Stock in satisfaction of $157,139 of
       amounts due to officers and directors.

    Issuance of 615,000 shares of Common Stock in payment of consulting fees,
       deferred loan costs and deferred consulting fees, in the aggregate amount
       of $1,529,014.

    Issuance of 189,500 shares of Common Stock in connection with employment
       contracts and employee bonuses, in the aggregate amount of $228,964.

    Issuance of 6,200,000 shares of Common Stock in connection with the
       acquisition of FlexRadio, Inc. valued at $6,417,000.

    Issuance of 609,776 shares of Common Stock in satisfaction of $300,000 of
       convertible promissory notes and $4,888 of accrued interest.

    Issuance of 127,870 shares of Common Stock in satisfaction of the third
       mortgage in the amount of $182,000 and $9,806 of accrued interest.

    Issuance of 425,000 shares of Common Stock in payment of $741,094 in bonuses
         to officers and key employees.



          See Accompanying Notes to Consolidated Financial Statements


                                      F-10
<PAGE>   36


                         PARTS.COM, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

               ORGANIZATION - Parts.com, Inc. and its subsidiary (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.

               Effective September 8, 1998, the Company acquired 100% of the
         outstanding common stock of Direct Touch Research, Inc. ("DTR") a
         closely held corporation that had no revenue and insignificant
         expenses, assets and liabilities, in exchange for 5,542,000 shares of
         the Company's common stock. As a result of this transaction DTR
         stockholders became owners of approximately 61% of the Company's then
         outstanding common stock and assumed 100% control of the Company's
         Board of Directors. For accounting purposes, the acquisition has been
         treated as a recapitalization of DTR with DTR as the acquirer (reverse
         acquisition) with no goodwill. Accordingly, the historical financial
         statements prior to September 1998 are those of DTR. DTR was
         incorporated on January 27, 1998. In connection with the reverse
         acquisition, the Company issued 987,000 shares of Common Stock in
         payment of consulting services in the amount of $444,150. The shares
         were valued at $.45 per share, which represents a 10% discount from
         market on the date of the reverse acquisition. Market price for the
         Company's Common Stock was determined based upon private sales to
         unrelated parties, since no active trading market existed at that time.
         In connection with the DTR transaction, stockholders of I.E.L.S., Inc.
         agreed to return 1,610,000 restricted shares of Common Stock for
         cancellation.

               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. Since its inception, the Company has
         sustained recurring losses from operations that to date, total
         $20,623,965. The Company used $3,784,520 and $1,412,490 of cash in
         operations for the years ended December 31, 2000 and 1999, respectively
         and anticipates additional cash needs in 2001. At December 31, 2000,
         the Company had a working capital deficiency of $3,636,366 and cash of
         $8,683. The Company also has undeposited payroll taxes to the Internal
         Revenue Service ("IRS") for the period April 2000 through November
         2000, resulting in an accrual for back payroll taxes in the amount of
         approximately $378,000 as of December 31, 2000, including penalties and
         interest. The Company is currently negotiating a payment plan with the
         IRS, but no formal or informal payment plan or forbearance agreement
         has been reached (See Note 11). Due to cash deficiencies, the Company
         has also been unable to pay certain members of senior management their
         regular salaries when due, which has resulted in an accrual for back
         salaries of approximately $84,000 as of December 31, 2000. The Company
         was also in default of mortgage note obligations encumbering its
         principal offices as of December 31, 2000 (see Notes 6 and 13). 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.


                                      F-11
<PAGE>   37



                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

                  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.

                  ACQUISITIONS - On May 28, 1999, the Company acquired all of
         the assets and business operations and assumed all of the outstanding
         liabilities of LiveCode, Inc. ("LiveCode") a closely held corporation
         in exchange for 600,000 shares of the Company's Common Stock and a
         promissory note in the original principal amount of $20,000. LiveCode
         was engaged in the business of software development and from its
         inception through May 28, 1999, its major source of operating revenues
         was from services performed under one contract for United Equity
         Partners, Inc. ("UEP"). The purchase price of $1,521,800 was determined
         by valuing the 600,000 shares of the Company's common stock at $2.50
         per share, which represents a 10% discount from market, based upon the
         average of the high and low trading prices on the OTC Bulletin Board on
         May 28, 1999, plus the promissory note of $20,000.

                  Approximately $47,000 was distributed to the LiveCode
         stockholders as of the effective date of the acquisition. Subsequent to
         the acquisition, the operations of LiveCode were merged into the
         Company. The excess of the purchase price over the fair value of the
         net assets acquired was $1,521,800 and was to be amortized on a
         straight line basis over 5 years beginning June 1, 1999. In fourth
         quarter 2000, the Company recorded a $1,039,897 impairment charge to
         eliminate goodwill related to this acquisition (see note 12).

                  On September 30, 1999, the promissory note was repaid by the
         issuance of 40,000 shares of the Company's Common Stock.

                  On October 21, 1999, parts.com, Inc. acquired all of the
         outstanding common stock of FlexRadio, Inc. ("Flex") for 6,200,000
         shares of the common stock of parts.com, Inc. The majority stockholders
         of Flex were also stockholders, directors and officers of parts.com,
         Inc. Under the terms of the purchase, parts.com, Inc. obtained the
         rights to Flex's provisional patent application (its sole asset) for a
         radio frequency detection and reporting service for providing real time
         research. From its


                                      F-12
<PAGE>   38


                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

         inception through October 21, 1999, Flex had no significant operations.
         Flex will be able to improve current methods of monitoring consumers
         radio listening habits which to this date, utilizes paper, telephone
         and limited electronic surveys to quantify and tabulate data for the
         advertising industry. Flex intends to provide improved customer service
         by assisting clients in making advertising/media decisions which best
         fit their needs.

                  The purchase price of Flex was based upon an independent
         valuation of the estimated fair value of Flex as of the date of
         acquisition. The 6,200,000 shares were valued at $1.035 per share,
         which represents a 10% discount from the market price per share based
         upon the average high and low trading prices on October 21, 1999 as
         reported on the OTC Electronic Bulletin Board. The total purchase price
         of $6,417,000 was allocated to Flex's provisional patent application
         which represented Flex's sole asset at the date of acquisition.

                  Due to the uncertainty surrounding the ultimate development of
         the technology supported by the Flex patent, an independent valuation
         of the patent was again performed effective for the fourth quarter of
         2000. The valuation was based on the income approach, which generally
         uses discounted, projected free cash flows to determine the present
         value of the asset. As a result of such valuation, a patent impairment
         loss in the amount of $1,019,818 was recognized in the fourth quarter
         of 2000.

                  The above acquisitions were accounted for by the purchase
         method of accounting for business combinations. Accordingly, the
         accompanying consolidated statements of operations do not include any
         revenues, costs or expenses related to these acquisitions prior to
         their respective closing dates.

                  Following are the Company's unaudited pro-forma results for
         the year ended December 31, 1999, assuming the business combinations
         described above occurred on January 1, 1999:

<TABLE>
<CAPTION>

                                         Year Ended December 31, 1999, Unaudited
                         ------------------------------------------------------------------------
                                                                       Pro-Forma          Pro
                            Parts        LiveCode(D)        Flex(E)    Adjustments        Forma
                         ------------    -----------     ---------    -----------     -----------
<S>                      <C>             <C>             <C>           <C>            <C>
Revenues                 $  1,364,694    $   161,450     $      --     $(161,450)(A)  $ 1,364,694
                                                                         161,450 (A)
                                                                        (126,817)(B)

Costs and expenses         (6,360,902)       (92,586)       (7,926)     (784,336)(C)   (7,211,117)
                         ------------    -----------     ---------    -----------     -----------
Net (loss) income        $ (4,996,208)   $    68,864     $  (7,926)   $  (911,153)    $(5,846,423)
                         ============    ===========     =========    ===========     ===========
Basic and dilutive
  net loss per common
  share                                                                               $      (.32)
                                                                                      -----------
Weighted average
  common shares                                                                        18,236,684
                                                                                      ===========
</TABLE>


(A) Pro forma adjustment to eliminate LiveCode revenues earned from UEP and
    related UEP costs.

(B) Pro-forma adjustment for amortization of excess of costs over net assets
    acquired of LiveCode assuming the business combination occurred on July 7,
    1998 (date of inception of LiveCode).

(C) Pro-forma adjustment for amortization of patent costs of Flex assuming the
    business combination occurred on March 10, 1999 (date of inception of Flex).

(D) Represents operations of LiveCode through the date of its merger with the
    Company on May 28, 1999.

(E) Represents operations of Flex through the date of its merger with the
    Company on October 21, 1999.


                                      F-13
<PAGE>   39


                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

         These unaudited pro-forma results have been prepared for comparative
         purposes only and do not purport to be indicative of the results of
         operations which would have actually resulted had the business
         combinations been in effect on January 1, 1999, or of future results of
         operations.

               PRINCIPLES OF CONSOLIDATION - The accompanying consolidated
         financial statements include the accounts of parts.com, Inc. and its
         wholly-owned subsidiary Flex. All significant intercompany
         transactions and balances have been eliminated 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 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 expanded 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
         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. For the year ended December 31, 1999, the Company
         performed services under one significant software development contract
         which was completed during the quarter ended March 31, 1999.

               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.



                                      F-14
<PAGE>   40

                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

                   The e-commerce web site became operational on January 23,
         2000. During the years ended December 31, 2000, the Company recognized
         approximately $8,000 from e-commerce transactions.

                   The ReallyKnow.com division was formed in 1999 for the
         purpose of offering real-time data gathering through patent-pending
         technologies, but currently has no significant operations.
         ReallyKnow.com revenues and all costs and expenses related to sales of
         Kiosks will be recognized at the time the products are delivered. In
         connection with the implementation of its current business plan for
         ReallyKnow.com which concentrates the Company's advertising activities
         in the e-commerce sector, the Company is no longer involved in the
         production of radio and television advertising. For the years ended
         December 31, 2000 and 1999, the Company generated gross revenues of
         approximately $20,000 and $780,000, respectively, from the production
         of radio and television media.

                   FAIR VALUE OF FINANCIAL INSTRUMENTS - Cash, accounts
         receivable, accounts payable, accrued expenses and other current
         liabilities are reflected in the consolidated balance sheets at fair
         value because of the short-term maturity of these instruments. The
         carrying value of capitalized lease obligations approximate their fair
         value. The fair value of mortgage notes payable and other debt are
         based upon the present value of future cash flows discounted at
         estimated current borrowing rates available to the Company for each
         type of debt instrument.

                   CONCENTRATIONS OF CREDIT RISK - Financial instruments which
         potentially subject the Company to concentrations of credit risk
         consist principally of cash and accounts receivable. Cash is held in
         banks and other financial institutions and at times may exceed
         federally insured limits. The Company has not incurred any losses on
         its cash deposits and it does not believe it is exposed to any
         significant credit risk. Concentrations of credit risk with respect to
         trade receivables, in the opinion of management, are limited due to the
         lack of concentration of large balances due from any one customer.

                   PROPERTY AND EQUIPMENT - Property and equipment is stated at
         cost. Depreciation is provided on the straight-line method at rates
         based on the estimated useful lives of individual assets or classes of
         assets. Building and related improvements are depreciated over 25 years
         and furniture and fixtures and computers and related equipment are
         depreciated over three to five years.

                   Leased property meeting certain criteria is capitalized and
         the present value of the related lease payment is recorded as a
         liability. Amortization of capitalized leased assets is computed on the
         straight-line method over the estimated useful lives of assets acquired
         ranging from three to five years.

                   Expenditures for repairs and maintenance are expensed as
         incurred. Expenditures which materially increase values, or extend
         useful lives are capitalized.

                   DEFERRED LOAN COSTS - Deferred loan costs in connection with
         the acquisition of the mortgage financing to purchase the Company's
         office building are being amortized on a straight line basis, which
         approximates the effective interest method, over the 17 year term of
         the loan, commencing in May 1999.

                   OTHER ASSETS - Deferred consulting fees included in other
         assets are being amortized over the terms of the related consulting
         Internet domain names is being amortized over a period of five years
         commencing with the activation of the website in January 2000.



                                      F-15
<PAGE>   41

                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

               PATENT - Patents are carried at cost less accumulated
         amortization which is calculated on a straight-line basis over the
         estimated useful life of the asset of five years. Patent amortization
         expense for the years ended December 31, 2000 and 1999 was $1,283,400
         and $249,550, respectively.

               GOODWILL - Goodwill, is amortized on the straight-line method
         over three years. Amortization expense for the years ended December 31,
         2000 and 1999 was $466,555 and $339,739, respectively.

               IMPAIRMENT OF LONG-LIVED ASSETS - In the event that facts and
         circumstances indicate the carrying value of a long-lived asset,
         including associated intangible assets, may be impaired, an evaluation
         of recoverability is performed by comparing the estimated undiscounted
         future cash flows associated with the asset to the asset's carrying
         amount to determine if a write-down to market value or discounted cash
         flow is required. As a result of such analysis, the Company recognized
         a loss on impairment of goodwill (see Note 12) and the patent (see
         "ACQUISITIONS") of $1,485,935 and $1,019,818, respectively, for the
         year ended December 31, 2000, and a loss on impairment of land,
         building and improvements (see Note 4) of $74,000 for the year ended
         December 31, 1999.

               INCOME TAXES - The Company accounts for income taxes under the
         Liability method which requires recognition of deferred tax liabilities
         and assets for the expected future tax consequences of events that have
         been included in the financial statements or tax returns. Under this
         method, deferred tax liabilities and assets are determined based upon
         the difference between the financial statement carrying value and tax
         bases of assets and liabilities using enacted tax rates in effect for
         the year in which the differences are expected to reverse. The Company
         has incurred losses since its inception. Due to the uncertainty of the
         realization of the tax loss carryforward, the Company has established a
         100% valuation allowance against the carryforward benefit.

               SEGMENT INFORMATION - The Company has adopted Statement of
         Financial Accounting Standards No. 131, "Disclosures About Segments of
         an Enterprise and Related Information" (SFAS 131). The Company operates
         in one segment, which provides a business-to-business electronic
         commerce software and parts procurement platform. Since the Company
         operates in one segment, all financial segment information required by
         SFAS 131 can be found in the consolidated financial statements.


               NET LOSS PER SHARE OF COMMON STOCK - The basic and diluted net
         loss per common share in the accompanying consolidated statements of
         operations are based upon the net loss divided by the weighted average
         number of shares outstanding during the periods presented.

                  For the year ended December 31, 2000 and 1999, the Company had
         securities that could potentially dilute earnings per share in the
         future but were excluded from the computation of diluted net loss per
         share in the periods presented since their affect would have been
         anti-dilutive. The potential number of common shares into which these
         outstanding securities are convertible are as follows:

                                                             YEAR ENDED
                                                             DECEMBER 31,
                                                         ------------------
                                                         2000          1999
                                                         ----          ----
         Outstanding options                            406,000       790,000
         Convertible promissory notes                 3,055,556            --
                                                      ---------       -------
         Total                                        3,461,556       790,000
                                                      =========       =======

               STOCK OPTION PLAN - 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." 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.

               RECENT PRONOUNCEMENTS - Statement of Financial Accounting
         Standards No. 133, "Accounting for Derivative Instruments and Hedging
         Activities" (SFAS 133), is effective for all fiscal years beginning
         after June 15, 2000. SFAS 133, as amended, establishes accounting and
         reporting


                                      F-16
<PAGE>   42



                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

         standards for derivative instruments, including certain derivative
         instruments embedded in other contracts and for hedging activities.
         Under SFAS 133, certain contracts that were not formerly considered
         derivatives may now meet the definition of a derivative. The Company
         adopted SFAS 133 effective January 1, 2001 and has concluded the
         adoption of SFAS 133 will not have any impact on the financial
         position, results of operations or cash flows of the Company.

                  RECLASSIFICATIONS - Certain amounts in the 1999 consolidated
         financial statements have been reclassified to conform to the 2000
         presentation.

2.       MERCHANT ACCOUNT:

                  The Company maintains a merchant account for the electronic
         processing of its transactions with a credit card processor. Pursuant
         to the terms of the account, the Company was required to maintain a
         deposit of $100,000 with the credit card processor. In June 2000, the
         credit card processing company returned the deposit to the Company in
         full.

3.       PREPAID EXPENSES:

                  In February 2000, the Company, entered into an agreement with
         M&M/Mars Incorporated to be an associate sponsor of a NASCAR Winston
         Cup race car for the entire NASCAR season from February 17, 2000
         through November 19, 2000. The Company made an initial payment of
         $200,000 and was committed to make an additional payment of $200,000 in
         May 2000. The Company was also obligated to issue 34,000 shares of
         Common Stock, valued at $550,800, to Mars Incorporated. Initially, the
         Company recorded a $950,800 prepaid expense composed of the $200,000
         payment to M&M/Mars, the value of the common stock issuable to M&M/Mars
         and the additional $200,000 payment. It also recorded a $200,000
         accrual for the second $200,000 payment due in May. These costs were to
         have been amortized over the 2000 NASCAR season. On May 24, 2000, the
         Company terminated its relationship with M&M/Mars. As a result of the
         cancellation of the agreement, the Company terminated the pending share
         issuance; reduced prepaid expenses by $719,500; reduced accrued
         expenses by $200,000 and reduced stockholders' equity by $550,800.

4.       PROPERTY AND EQUIPMENT:

               A summary of property and equipment at December 31, 2000 and
         December 31, 1999 is as follows:

                                           December 31,         December 31,
                                               2000                 1999
                                           -----------          -----------
Land, building and improvements            $   600,966          $   600,966
Furniture and fixtures                          22,855               22,855
Assets acquired under capitalized
      leases                                    60,483               60,483
Software                                       146,053                   --
Computers and related equipment                355,943              265,201
                                           -----------          -----------
                                             1,186,300              949,505
Less: accumulated depreciation and
      amortization                            (257,216)            (126,284)
                                           -----------          -----------
                                           $   929,084          $   823,221
                                           ===========          ===========
Depreciation and amortization
      expense                              $   130,933          $    65,288
                                           ===========          ===========
Depreciation and amortization
      of assets acquired under
      capitalized leases                   $    12,097          $    12,097
                                           ===========          ===========





                                      F-17
<PAGE>   43

                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

               Assets acquired under capitalized leases consist primarily of
         computers and related equipment.

               The carrying value of land, building and improvements at December
         31, 1999, was reduced by $74,000, which amount represents the excess of
         the purchase price of the property over its appraised value at the date
         of purchase. The amount has been included in asset impairment charge.
         The property was purchased from Stonestreet Investments, Inc., which is
         owned by four directors and one key employee of the Company who are
         also major stockholders of the Company. The Company's property and
         equipment are encumbered by convertible promissory notes and a federal
         tax lien (see Notes 6 and 8).

5.       OTHER ASSETS:

               Other assets at December 31, 2000 and December 31, 1999 are as
         follows:

                                        December 31,        December 31,
                                           2000                 1999
                                       -----------          -----------
Deferred consulting fees               $   940,929          $   588,064
Internet domain                             47,870               47,870
Deposits                                    13,186               14,992
                                       -----------          -----------
                                         1,001,985              650,926
Less: accumulated amortization            (897,351)            (235,526)
                                       -----------          -----------
                                       $   104,634          $   415,400
                                       ===========          ===========
Amortization expense                   $   661,825          $   235,526
                                       ===========          ===========


6.       NOTES AND MORTGAGE NOTES PAYABLE:

               CONVERTIBLE PROMISSORY 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 bears interest at 10% per annum and is due
         and payable in a single balloon payment of principal and interest on
         July 20, 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. As of December 31, 2000, the holder of the Note had advanced
         $500,000 to the Company under the Note.

                   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 at a conversion price of the lower of $.36 per
         share or 80% of the 5-day average closing bid price prior to the
         conversion date.

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



                                      F-18
<PAGE>   44

                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

         penalty. Provided the note has not been 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
         $.375 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 prepay the
         entire principal under the note and in the event that the Company
         prepays $300,000 in principal, the holder loses all collateral rights
         and the remaining $250,000 in principal becomes unsecured. The holder
         may convert the $300,000 in additional principal plus interest into
         common stock at a conversion price of $.30 per share. The previously
         funded $250,000 remains convertible into common stock at $.375 per
         share. In January 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 $.20 per share. Since the $200,000 advance
         under the note was convertible at any time, the Company will record a
         debt discount of $200,000 as non-cash interest expense in first quarter
         2001. Also, as an inducement to fund the additional $200,000, the
         holder received a 90-day option to acquire 500,000 shares of the
         Company's stock at $.20 per share.

               Due to the fair value of the beneficial conversion feature
         associated with the notes issued in 2000, the Company recorded a debt
         discount as non-cash interest expense in the amount of $950,000 for
         the year ended December 31, 2000 (see Note 9).

               During the year ended December 31, 1999, the Company issued
         convertible promissory notes in the original principal amount of
         $300,000. The notes bore interest at rates ranging from 9% to 10% and
         were payable in full, including accrued interest one year from their
         date of issuance. The holders also had the option to convert the notes
         plus accrued interest into shares of common stock at a conversion price
         of $.50 per share. The conversion price was based on recent private
         placement transactions. In December 1999, the holders converted the
         notes plus all accrued interest into 609,776 shares of common stock.

               MORTGAGE NOTES PAYABLE - The Company's real property is subject
         to the following mortgages at December 31, 2000:
<TABLE>

<S>                                                                             <C>
First mortgage note, with interest at 15% per annum, interest payable
    monthly in the amount of $4,375, principal and unpaid
    interest payable on May 31, 2016                                           $350,000

Second mortgage note, with interest at 15% per annum, interest payable
    monthly in the amount of $375, principal and unpaid interest
    payable on May 31, 2016                                                      30,000

Other, with interest at 9% per annum, payable in monthly installments
    of principal and interest of $260, final balloon payment of $12,769
    due January 2004                                                             18,083
                                                                               --------
                                                                                398,083
         Less current portion                                                   381,562
                                                                               --------
         Long-term portion                                                     $ 16,521
                                                                               ========
</TABLE>



                                      F-19
<PAGE>   45

                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

                   The first and second mortgages are also collateralized by a
         pledge of 100,000 shares of the Company's common stock owned by four
         officers of the Company, and by the conditional guarantee of the
         President of the Company.

                   At December 31, 2000, the Company was delinquent on monthly
         payments under the first and second mortgage notes dating back to
         October 2000. The Company had received a notice of demand from the
         lender indicating that if the entire amount owed were not paid within
         30 days, the lender would begin foreclosure proceedings. As a result of
         the delinquency, the mortgages are classified as current at December
         31, 2000 (See Note 13).

                   As of December 31, 2000, the net book value of the real
         property collateralizing the above mortgages was approximately
         $576,000.

                   DEBT MATURITIES - Debt maturities subsequent to December 31,
         2000, are as follows:

                  Year Ending
                  December 31,                                   Amount
               -----------------                               -----------

                        2001                                   $  381,562
                        2002                                        1,708
                        2003                                        1,869
                        2004                                       12,944
                        2005                                           --
                       Thereafter                                      --
                                                                ---------
                             Total                              $ 398,083
                                                                =========


7.       CAPITALIZED LEASES:

                   Prior to December 31, 2000, the Company leased certain
         equipment under capital lease arrangements. There are no future minimum
         lease payments under these agreements at December 31, 2000 as the
         Company liquidated the balances due under the capitalized leases in
         January 2000. At December 31, 1999, the present value of minimum lease
         payments was classified as a current liability in the accompanying
         consolidated balance sheet.

8.       INCOME TAXES:

                   The difference between the Company's effective income tax
         rate and the federal statutory rate at December 31, 2000, and December
         31, 1999, is reconciled below:

                                                         2000          1999
                                                          ---           ---
                  Federal benefit expected                (34)%         (34)%
                  State taxes                              (4)           (4)
                  Permanent items                          11             3
                  Increase in valuation allowance          27            35
                                                          ---           ---
                                                          0.0%          0.0%
                                                          ===           ===



                                      F-20
<PAGE>   46


                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

               Significant components of the Company's deferred tax assets and
         liabilities at December 31, 2000, and December 31, 1999, are
         approximately as follows:

                                               2000                 1999
                                           -----------          -----------

         Deferred Tax Assets

         Net operating losses              $ 3,912,000          $ 1,814,000
         Noncash interest expense              375,000                   --
         Allowance for bad debts                31,000                   --
         Stock-based compensation            1,580,000              365,000
         Deferred income                       203,000              220,000
         Other                                  66,000               28,000
                                           -----------          -----------
              Gross deferred tax asset       6,167,000            2,427,000
         Less valuation allowance           (6,167,000)          (2,427,000)
                                           -----------          -----------
              Deferred tax asset           $        --          $        --
                                           ===========          ===========

               There were no deferred tax liabilities as of December 31, 2000,
         and December 31, 1999.

               As of December 31, 2000, the Company had estimated net operating
         loss carryforwards of approximately $9,904,000 available to offset
         future taxable income. The net operating loss carryforwards expire
         through the year 2020. Under U.S. federal tax law, certain changes in
         ownership of a company may cause a limitation on future utilization of
         these loss carryforwards.

9.       STOCKHOLDERS' EQUITY:

               On November 12, 1999, the Company amended its articles of
         Incorporation to grant the Board of Directors of the Company the
         authority to issue up to 10,000,000 shares of preferred Stock, par
         value $.001 per share, and to determine the price, rights, preferences,
         privileges, and restrictions, including voting rights of these shares
         without further vote or action by stockholders.

               For the year ended December 31, 2000, employees, officers and
         directors of the Company were issued options to purchase a total of
         1,047,000 shares of the Company's common stock at exercise prices
         ranging from $1.15 to $20.00 per share. In December 2000, employees,
         officers and directors of the Company voluntarily cancelled and retired
         1,431,000 stock options in exchange for the same number of underlying
         shares. As a result, 296,000 stock options issued during year 2000 were
         still outstanding at December 31, 2000. For the year ended December 31,
         1999, officers, directors and a key employee of the Company were issued
         options to purchase 790,000 shares of the Company's common stock.

               Had compensation cost for the Company's issuances of stock
         options during the years ended December 31, 2000 and 1999 been
         determined based on the fair value at the date of grant consistent with
         the provisions of SFAS 123, the Company's 2000 and 1999 net loss and
         loss per share would have been increased to the pro forma amounts
         indicated below:


                                      F-21
<PAGE>   47

                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

                                                       December 31,
                                             ---------------------------------
                                                    2000               1999
                                             --------------      -------------

         Net loss as - reported              $ (13,761,949)      $ (4,996,208)
         Proforma net loss                   $ (15,303,601)      $ (7,034,925)
         Basic and diluted Net loss
           per common share - as reported    $        (.57)      $       (.34)
         Basic and diluted Net loss
           Per common share - proforma       $        (.63)      $       (.48)

               The Company utilizes the Black-Scholes option pricing model to
         calculate the fair value of each individual issuance of options with
         the following assumptions used for grants during the years ended
         December 31, 2000 and 1999: dividends yield of 0%; expected average
         annual volatility of 133.86%; average annual risk-free interest rate of
         6%; and expected terms averaging approximately three years.

               The Company's stock option plan provides for the granting of
         either incentive stock options or non-qualified stock options to key
         employees and non-employee members of the Company's Board of Directors
         for up to a maximum of 1,650,000 shares of common stock. Options
         outstanding at December 31, 2000 consist of 110,000 non-qualified
         options and 296,000 incentive options with contractual lives expiring
         from March 2003 to February 2009. Options outstanding at December 31,
         1999 consisted of 550,000 non-qualified options and 240,000 incentive
         options. Employee options are generally exercisable one year from date
         of grant in cumulative annual installments of 33% and no options are
         exercisable after ten years from date of grant.

               There were no stock options outstanding prior to February 12,
         1999.

               The following table summarizes stock option activity for the
         years ended December 31, 2000 and 1999:

<TABLE>
<CAPTION>

                                                                                       Weighted
                                                                      Exercise          Average
                                                     Shares          Price Range      Exercise Price
                                                   ----------        -----------     ---------------


<S>                                                   <C>            <C>                      <C>
          Outstanding as of December 31, 1998              --                 --      $         --
               Granted                                790,000        $1.50-$3.00              2.58
               Exercised                                   --           --    --                --
               Forfeited/Retired                           --           --    --                --
                                                   ----------       ------------      ------------

          Outstanding as of December 31, 1999         790,000        $1.50-$3.00              2.58
             Granted                                1,047,000         1.15-20.00              6.50
             Exercised                                     --           --    --                --
             Forfeited/Retired                     (1,431,000)        1.15-20.00              4.56
                                                   ----------       ------------      ------------
         Outstanding as of December 31, 2000          406,000         1.50-15.25              5.71
                                                   ==========       ============      ============
</TABLE>


<TABLE>
<CAPTION>

                                          OPTIONS OUTSTANDING        OPTIONS EXERCISABLE
                                          -------------------       -----------------------
                                                     WEIGHTED                     WEIGHTED
                                                      AVERAGE                     AVERAGE
                                         REMAINING   EXERCISE                     EXERCISE
          PRICE RANGE       NUMBER         LIFE       PRICE          NUMBER       PRICE
          -----------       ------       ---------   --------       --------       -----

<S>                         <C>            <C>        <C>             <C>         <C>
         $1.50 - $ 3.00     251,000      5.1 years    $ 2.36          251,000     $ 2.36
          9.00 -  15.25     155,000      2.3 years     11.14          155,000      11.14

</TABLE>



                                      F-22
<PAGE>   48


                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

               The outstanding options expire at various dates through February
         2009. At December 31, 2000, a total of 406,000 were exercisable, with a
         weighted average exercise price of $5.71. The weighted average
         remaining contractual life of options at December 31, 2000 with
         exercise prices ranging from $1.50 to $15.25 is 4.0 years. The weighted
         average fair value of the options issued for the years ended December
         31, 2000 and 1999 was $5.19 and $2.70.

               The weighted average exercise prices and fair values of options
         whose exercise price is greater than, equals, or is less than, the
         market price on the grant date are as follows for the years ended
         December 31:

                                           2000                 1999
                                   -------------------   -------------------
                                    EXERCISE    FAIR      EXERCISE    FAIR
                                     PRICE      VALUE      PRICE      VALUE
                                   --------    -------   --------    -------
         OPTIONS ISSUED:

         Greater than market price   $  --      $  --      $1.75      $0.97
         Equal market price          $6.50      $5.19      $1.50      $1.16
         Less than market price      $  --      $  --      $3.00      $3.42




               At December 31, 2000, a total of 1,244,000 shares of the
         Company's common stock were available for future grants of stock
         options and warrants.

               During the year ended December 31, 2000, the Company issued
         1,709,585 shares of common stock, in private placements at per share
         prices ranging from $.25 to $4 per share and received net cash proceeds
         of $1,694,083. During the year ended December 31, 1999, the Company
         issued 2,810,153 shares of common stock, in private placements at per
         share prices ranging from $.50 to $1.50, and received net cash proceeds
         of $2,434,024.

               During the years ended December 31, 2000 and 1999, the Company
         issued 2,275,808 and 2,253,553 shares of common stock, respectively, in
         payment of accounts payable, conversion of notes payable and services
         related to consulting and employment contracts. Except for the December
         2000 issuance of shares to a consultant who is also a related party
         (see below), all shares issued to liquidate recorded liabilities were
         valued based upon the amount of the recorded liability satisfied and
         all other shares issued were valued at a 10% discount to market for
         shares issued for services rendered or goods received and were recorded
         as an asset or charged to expense based upon the nature of the
         transaction. Of the shares issued in the year ended December 31, 2000
         included in the amount above, 384,000 relate to the voluntary
         cancellation and retiring of stock options by employees in exchange for
         the same number of underlying shares. Such options were added back to
         the option pool at December 31, 2000. Certain of the above shares were
         treated as deferred compensation and are subject to one and two-year
         vesting requirements.

                   During the year ended December 31, 2000, the Company recorded
         $597,263 in deferred compensation representing 90% of the fair market
         value of common stock issued to employees with vesting periods of one
         to two years. Such amount has been presented as a reduction to
         stockholders' equity and is being amortized over the applicable vesting
         period. The Company amortized $104,203 of this deferred compensation
         during the year ended December 31, 2000.


                                      F-23
<PAGE>   49


                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

               In July, September and December, 2000, the Company entered into
         two convertible promissory notes with individuals. The notes contained
         a nondetachable beneficial conversion feature that allowed the
         individuals to convert the notes and accrued interest thereon into the
         Company's common stock at conversion prices of $.30, $.375 per share
         and the lower of $.36 per share or 80% of the 5-day average closing bid
         price prior to the conversion date. The fair value of the beneficial
         conversion feature exceeded the value of the notes. Since the notes
         were convertible at any time, the Company recorded debt discount of
         $950,000 as "non-cash" interest expense upon issuance of the notes and
         correspondingly charged additional paid-in capital.


10.        RELATED PARTY TRANSACTIONS:

               During the year ended December 31, 2000, the Company issued a
         total of 980,000 shares of common stock to officers and directors and a
         key employee in payment of bonuses, at per share prices ranging from
         $.39375 to $9.90 for an aggregate of $1,146,375 in stock-based employee
         compensation expense. These shares are subject to "lock-up" documents
         executed by the officers, directors and key employee, whereby such
         shares cannot be sold for a minimum time period. In addition, the
         shares are also subject to "leakout" agreements signed by these same
         individuals that provide for restriction on the sale of these shares
         according to maximum specified monthly amounts over a two-year period.

               During the year ended December 31, 2000, the Company issued a
         total of 1,264,000 shares of common stock to officers and directors, a
         key employee, and other employees valued at $679,373, of which,
         $404,576 was immediately charged or amortized to stock-based employee
         compensation expense in exchange for the cancellation and retiring of
         stock options for the same number of underlying shares. These shares
         are subject to "lock-up" documents executed by the officers, directors
         and key employee, whereby such shares cannot be sold for a minimum time
         period. In addition, the shares are also subject to "leakout"
         agreements signed by these same individuals that provide for
         restriction on the sale of these shares according to maximum specified
         monthly amounts over a two-year period.

               In April 2000, the President loaned the Company $23,600, payable
         on demand and bearing interest at 8%. The Company repaid the loan with
         $41 in interest in April 2000.

               In July 2000, Walter Anderson, father of the Co-CEO and indirect
         owner of more than 5% of the common stock of the Company, loaned the
         Company $20,000, payable on demand and bearing interest at 8%. The
         Company repaid the loan with $233 in interest in July and September
         2000.

               In July 2000, Select Media Ltd., owned by an individual who
         indirectly owns more than 10% of the common stock of the Company,
         loaned the Company $35,000, payable on demand and bearing interest at
         8%. The Company repaid the loan with $167 in interest in July 2000.

               In August 2000, Select Media Ltd. loaned the Company $2,500,
         payable on demand and bearing interest at 8%. The Company repaid the
         loan with $9 interest in September 2000.

               In August 2000, New Era, Inc., owned by an individual who
         indirectly owns more than 10% of the common stock of the Company,
         loaned the Company $45,000, payable on demand and bearing interest at
         8%. The Company repaid the loan with $170 interest in September 2000.



                                      F-24
<PAGE>   50

                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

               From October to November 2000, New Era, Inc. loaned the Company
         $47,428, payable on demand and bearing interest at 8%. The Company
         repaid $40,500 worth of principal under the loans from October through
         December 2000. At December 31, 2000, the Company owed New Era, Inc.
         $6,928; this amount has been included in "Notes payable - related
         party." In January 2001, New Era, Inc. loaned the Company $50,000,
         payable on demand and bearing interest at 13%. The Company repaid
         $34,000 in principal against this loan in February 2001. In February
         and March 2001, New Era,Inc. loaned the Company $30,000, payable on
         demand and bearing interest at 8%.

               In November 2000, Select Media Ltd. loaned the Company $55,000,
         payable on demand and bearing interest at 8%. At December 31, 2000 this
         amount has been included in "Notes payable - related party." In January
         2001, Select Media Ltd. loaned the Company $20,000, payable on demand
         and bearing interest at 8%. The Company repaid the $20,000 in principal
         only in January 2001.

               In December 2000, the Company liquidated $38,769 of amounts due
         for consulting fees to George Demakos, a related party who indirectly
         owns more than 10% of the common stock of the Company, by issuance of
         242,308 shares of common stock. At the time of the issuance, the
         Company's stock had a fair value of $.39 per share, thus, the Company
         recognized stock-based consulting expense in the amount of $56,640 for
         the bargain purchase price element.

               During the year ended December 31, 1999, the Company liquidated
         $157,139 of amounts due to officers and directors by issuance of
         246,407 shares of Common Stock.

               In connection with the purchase of the land, building and
         improvements, the Company issued a third mortgage note to Stonestreet
         Investments, Inc., which is owned by five officers of the Company who
         are also major stockholders of the Company. The note bore interest at
         9.5% per annum and required payments of principal and interest in
         varying amount through June 30, 2002, with all remaining principal and
         accrued interest due and payable on July 30, 2002. By agreement among
         the parties all required payments under the mortgage were deferred
         indefinitely. On November 30, 1999, the Company issued 127,870 shares
         of Common Stock in full satisfaction of the $182,000 principal balance
         of the note plus $9,806 of accrued interest.

               The shares of common stock issued in the above transactions were
         valued at per share prices approximating recent private placements of
         common stock less a 10% discount from market.

               During the year ended December 31, 1999, the Company issued a
         total of 425,000 shares of common stock to officers and directors and a
         key employee for bonus. The imputed per share price for the bonus was
         $1.74 based on a per-share closing price of $1.9375. Compensation of
         $741,094 was recorded for the transaction.

11.      COMMITMENTS AND CONTINGENCIES:


               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 December 31, 2000 the Company's unpaid
         payroll taxes amounted to $300,939 and are included in "Other current
         liabilities." The Company has


                                      F-25
<PAGE>   51


                         PARTS.COM, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                     DECEMBER 31, 2000 AND DECEMBER 31, 1999

         recorded an accrual of $78,000 at December 31, 2000 for penalties and
         interest related to these taxes. The amount is also included in "Other
         current liabilities."

               The Company leased office space from an unrelated third party
         through mid-August 1999. Total rental expense was $36,885 for the year
         ended December 31, 1999.

               The Company has entered into employment agreements with certain
         officers and key employees which provide for annual base salaries
         aggregating $501,000. The agreements range from fourteen months to
         three years. Certain of the agreements provide for automatic one-year
         and three- year extensions of the term on the annual anniversary date
         of the agreement. Each agreement provides that the officer or key
         employee is entitled to participate in all employment benefit programs
         generally available to company employees, including health care and
         disability plans, stock option plans and any retirement plan.

12.      GOODWILL IMPAIRMENT CHARGE:

               In November 2000, David Lampert, Senior Vice President of
         Software Development, a member of the board of directors and former
         principal of LiveCode, Inc. left the Company. Due to weaker than
         anticipated revenue growth from LiveCode, Inc. coupled with Mr.
         Lampert's departure, the Company determined that goodwill related to
         the LiveCode acquisition was fully impaired. And, in conformity with
         Staff Accounting Bulletin No. 100, "Restructuring and Impairment
         Charges," a $1,039,897 impairment charge related to LiveCode's goodwill
         was recorded in the fourth quarter. In addition, due to 2000's
         operating loss and negative cash flow from operations, combined with a
         history of operating losses and negative cash flow from operations, the
         Company determined in the fourth quarter of 2000, that goodwill related
         to the September 30, 1998 MTV Pinnacle Advertising Group, Inc. ("MTV")
         and United Equity Partners, Inc. ("UEP") acquisitions was fully
         impaired. Accordingly, $446,038 impairment charge related to MTV and
         UEP's goodwill was recorded in the fourth quarter.

13.      SUBSEQUENT EVENTS:

               The Company entered into an agreement in March 2001 with its
         mortgage lender which provides for the deferral of pursuing any
         remedies available under the mortgage notes payable agreements until
         after May 18, 2001 in exchange for the transfer of 100,000 total
         officers' and directors' personal shares which were pledged as
         collateral for the notes.

               In March, 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 (see Note 1), 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
         the total amount of $42,000, and issue a total of 1,161,858 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 will, therefore, be
         recognized as expense during the first quarter of 2001.


                                      F-26
<PAGE>   52


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

         There have been no disagreements between the Company and its certified
public accountants on any matter of accounting principles or practices or
financial statement disclosure.

                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

         The Company's officers and directors and their respective ages as of
February 29, 2000 were as follows:

<TABLE>
<CAPTION>

     NAME                       AGE                       POSITION
     ----                       ---                       --------
<S>                             <C>    <C>
Shawn D. Lucas                  32     Chairman, Co-Chief Executive Officer and President

Scott A. Anderson               32     Co-Chief Executive Officer, Chief Technology Officer,
                                       Director

Michael R. Fouts                43     Director of Business Affairs, Director

</TABLE>


         The following sets forth a description of the officers' and directors'
business experience during the past five years or more and other biographical
information:

         Shawn D. Lucas has served as the Chairman, Co-Chief Executive Officer
of the Company since September 1998. He co-founded the original entity, Direct
Touch Research, Inc., Sanford, Florida, in January 1998 and has also been the
Company's President since June 1999. Prior to co-founding the Company, Mr. Lucas
was the Vice President of Media for MTV/Pinnacle Advertising Group, Inc.,
Sanford, Florida from January 1997 to September 1998. MTV Pinnacle Advertising
Group provided advertising services primarily to automobile dealerships. From
January 1996 to January 1997, Mr. Lucas was the Vice President of Media for
Defalco Advertising, Inc., Heathrow, Florida. From April 1992 to January 1996,
he was Vice President of Media for DeFalco West Advertising, Inc., Los Angeles,
California. Both DeFalco companies are automotive marketing and advertising
companies.

         Scott A. Anderson has served as Co-Chief Executive Officer and Chief
Technology Officer of the Company since September 1998. He co-founded the
original entity, Direct Touch Research, Inc. in January 1998. From January 1996
through September 30, 1998, he was President of United Equity Partners, Inc.,
Sanford, Florida, an Internet technology and work flow solutions company. From
May 1995 through January 1997, he was the MIS Director for DeFalco Advertising,
Inc., Heathrow, Florida.

         Michael R. Fouts has been a director of the Company since September
1998 and has served as our Director of Business Affairs since November 1999.
From September 1998 to November 1999, Mr. Fouts was Senior Executive Vice
President of Business Affairs and Human Resources for the Company. Mr. Fouts was



                                       25
<PAGE>   53

the Chief Executive Officer of MTV Pinnacle Advertising Group, Inc., Sanford,
Florida, from January 1997 to September 1998. Prior to that time, he was Chief
Operating Officer of DeFalco Advertising, Inc., Heathrow, Florida from February
1992 through December 1996.

Change in Management

         David Lampert was appointed director of the Company in April 1999.
Effective November 2000, Mr. Lampert resigned as director, and as Senior Vice
President of Software Development for the Company.

         David McComas was appointed director of the Company in September 1998.
In February 2000, Mr. McComas resigned as a director and subsequently left the
company in July 2000.

         Jeffrey Odato was appointed director of the Company in September 1998.
In March 2000, Mr. Odato resigned as a director and remained in the employ of
the Company as its Vice President, National Sales. In March 2001, Mr. Odato
entered into a settlement agreement and left the Company (see below).

         In October 1999, the Company entered into an employment agreement with
Jon Palazzo to serve as the Company's Vice President of AfterMarket Operations.
In March 2001, Mr. Palazzo terminated his employment agreement for cause due to
non-payment of salary. Subsequently, Mr. Palazzo entered into a settlement
agreement with the Company (see below.)

         In February 2000, DuWayne Peterson was appointed a director of the
Company. In March 2000, Richard D'Onofrio was appointed a director of the
Company. In December 2000, Mr. D'Onofrio and Mr. Peterson resigned as directors
of the company.

         Ian Hart was appointed as our Chief Financial Officer in October 1999.
Mr. Hart terminated his employment agreement for cause due to non-payment of
salary for the period November 2000 through March 2001 and left the Company in
March 2001. Effective March 2001, President Shawn Lucas assumed the role of
Chief Financial Officer.

Director Compensation for Attendance at Meetings

         During 1999, the Company paid its employee-directors $7,500 for their
service as directors, but ceased paying those fees as of April, 1999. The
Company has no plan of reinstating director fees for directors who are also
employees of the Company. Although the Company intended to compensate its
outside board members for their time spent at board and committee meetings at
the rate of $4,000 per quarter, due to cash constraints, the outside board
members forgave such fees during their tenure in year 2000.

Significant Employees

The following individuals, although not executive officers of the Company, are
significant employees:

           Steven O'Sullivan, 34, joined the Company in April 2000 as its
Operations Manager. He was appointed Executive Vice President of Operations in
September 2000. Mr. O'Sullivan provides leadership to the managers of the
parts.com marketing, development, quality assurance, legal and documentation
departments, while also serving as parts.com's source for creative problem
solving and elimination of roadblocks. He establishes and maintains project
plans for all parts.com departments, schedules and monitors project tasks, sets
budget and revenue expectations, and creates policies and procedures for a




                                       26
<PAGE>   54

productive and efficient work environment. Prior to joining parts.com, Mr.
O'Sullivan served as the Vice President of customer service for KeyTrak, Inc.,
the authority in electronic key control device in the automotive and
multi-family industry. He joined KeyTrak as a team leader in 1991 and was
promoted to management within a year. In his role as Vice President of customer
service, Mr. O'Sullivan was responsible for all customer support functions
including installations, on-site and telephone support, employee training, parts
ordering and processing, as well as network infrastructure and system
administration.

           Michael Third, 25, joined the Company in November 1999 as its Chief
Software Architect and brings to the company his extensive experience in
software development with companies ranging from small Internet startups to
large organizations, such as Intel, Fiserv - and most recently, Computer
Sciences Corporation, where he designed and developed a large-scale workflow
system for the financial services industry. He also served as senior programmer
at LiveCode and as principal consultant at Planet X Software. Mr. Third is
involved in all facets of development, including architecture, strategic
partnerships, and day-to-day operations.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who beneficially own more than 10% of a registered class
of our equity securities to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Officers, directors and greater than
10% beneficial owners are required by SEC regulations to furnish the Company
with copies of all reports they file under Section 16(a). Based on its review of
the copies of such forms received by it, the Company believes that during its
fiscal year ended December 31, 2000, filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with,
except as follows: Mr. Lucas, Mr. Anderson, Mr. Odato, Mr. Fouts and Mr. Hart
were late in filing their Initial Statement of Beneficial Ownership of
Securities on Form 3; Mr. Lucas, Mr. Anderson, Mr. Odato, Mr. Fouts and Mr. Hart
filed one late report with the SEC relating to grants of common stock to the
individual.

ITEM 11.  EXECUTIVE COMPENSATION

Summary Compensation Table

         The following table sets forth compensation paid by the Company for
services by our co-Chief Executive Officers and by each other executive officer
or key employee of the Company who received in excess of $100,000 during the
fiscal years ended December 31, 2000, 1999 and 1998.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                                       Long-Term
                                                         Annual Compensation(1)       Compensation
                                                       ------------------------       ------------
                                                                                       Securities
                                             Fiscal                      Stock         Underlying       All Other
Name and Principal Position                   Year        Salary         Bonus           Options       Compensation
---------------------------                   ----        ------         -----           -------       ------------


<S>                                           <C>      <C>           <C>               <C>            <C>        <C>
Shawn D. Lucas                                2000     $  63,797     $  131,250(4)         -0-        $63,905(5),(7)
  President, Chairman, Co-CEO                 1999     $ 121,875(2)  $   96,875(3)     110,000(6)     $11,566(5),(7)
                                              1998     $  33,394     $      -0-            -0-        $   -0-

Scott A. Anderson                             2000     $  60,923     $  120,313(4)         -0-         $63,905(5),(7)
  Co-CEO and Chief Technology Officer         1999     $ 113,908(2)  $   96,875(3)     110,000(6)      $14,732(5),(7)
                                              1998     $  31,950     $      -0-            -0-         $   -0-

Michael R. Fouts                              2000     $  64,763     $   98,438(4)         -0-         $63,905(5),(7)
  Director of Business Affairs                1999     $ 113,908(2)  $  145,313(3)     110,000(6)      $   -0-
                                              1998     $  29,550     $      -0-            -0-         $   -0-

</TABLE>


                                       27
<PAGE>   55


--------------
(1)  The amounts reflected in the above table do not include any amounts for
     perquisites and other personal benefits extended to those named above. The
     aggregate amount of such compensation is less than 10% of the total annual
     salary and bonus.

(2)  Includes $5,508 of salary for the period August 30, 1999 to October 22,
     1999 paid in 3,672 shares of restricted common stock. The closing price of
     a share of common stock on November 30, 1999, the date of payment, was
     $5.00 per share.

(3)  Bonus paid in an aggregate of 175,000 shares of restricted stock to these
     officers and directors. The closing price of a share of common stock on the
     dates of grant was $1.9375 per share.

<TABLE>
<CAPTION>

                                                                                     Closing Price of a
Name                                  Bonus Shares              Date of Grant        Share on Grant Date
----                                  ------------              -------------        -------------------

<S>                                      <C>                      <C>                      <C>
Shawn D. Lucas                           50,000                   11/11/99                 $1.9375
Scott A. Anderson                        50,000                   11/11/99                 $1.9375
Michael R. Fouts                         75,000                   11/11/99                 $1.9375
</TABLE>


(4)  Bonus paid in an aggregate of 800,000 shares of restricted stock to these
     officers and directors. The closing price of a share of common stock on the
     date of grant was $.4375 per share.

<TABLE>
<CAPTION>

                                                                                     Closing Price of a
Name                                  Bonus Shares              Date of Grant        Share on Grant Date
----                                  ------------              -------------        -------------------
<S>                                     <C>                       <C>                      <C>
Shawn D. Lucas                          300,000                   12/29/00                 $0.4375
Scott A. Anderson                       275,000                   12/29/00                 $0.4375
Michael R. Fouts                        225,000                   12/29/00                 $0.4375
</TABLE>


(5)  On December 29, 2000 the Company issued a total of 330,000 shares of common
     stock to these officers and directors, valued at $144,375 in exchange for
     the cancellation and retiring of stock options for the same number of
     underlying shares. The closing price of a share of common stock on the date
     of exchange was $.4375.

<TABLE>
<CAPTION>

Name                                 Exchange Shares           Date of Exchange
----                                  ------------              -------------
<S>                                     <C>                       <C>
Shawn D. Lucas                          110,000                   12/29/00
Scott A. Anderson                       110,000                   12/29/00
Michael R. Fouts                        110,000                   12/29/00
</TABLE>


(6)  Represents the number of shares of common stock subject to options on
     February 12, 1999, the date of grant. The closing price of a share of
     common stock on the date of grant was $3.50. On December 29, 2000, the
     Company issued shares of restricted common stock in exchange for the
     cancellation and retiring of stock options for the same number of
     underlying shares (see "5" above).

(7)  Represents sales commissions paid.


                                       28
<PAGE>   56



Stock Option Grants

         The following table sets forth information concerning individual grants
of options to purchase common stock made to executives during 2000 and 1999.

<TABLE>
<CAPTION>

                                                                              Potential Realizable
                                                                                   Value at
                                                                              Assumed Annual Rates
                                                                                      of
                              Number of  Percent of                               Stock Price
                             Securities    Total       Exercise                 Appreciation for
                             Underlying   Options         or                     Option Term(1)
                                Options  Granted to   Base Price  Expiration  ----------------------
Name                            Granted  Employees    ($/Share)      Date       5%($)       10%($)
---------------------------  ----------  ----------   ----------  ----------  ----------  ----------
<S>                           <C>            <C>         <C>       <C>        <C>         <C>
Shawn D. Lucas                110,000(2)     16%         $3.00     2/12/09    $537,535    $855,935

Scott A. Anderson             110,000(2)     16%         $3.00     2/12/09    $537,535    $855,935

Michael R. Fouts              110,000(2)     16%         $3.00     2/12/09    $537,535    $855,935
</TABLE>

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

(1)  In accordance with the rules of the Commission, the potential realizable
     values for such options shown in the table are based on assumed rates of
     stock price appreciation of 5% and 10% compounded annually from the date
     the respective options were granted to their expiration date. These assumed
     rates of appreciation do not represent the Company's estimate or projection
     of the appreciation of shares of Common Stock of the Company.

(2)  Options were granted on February 12, 1999 and vest in thirds over three
     years commencing October 1, 1999. In December 2000, the Company issued
     common stock in exchange for the cancellation and retiring of these stock
     options for the same number of underlying shares.

         In December 2000, the Company issued a total of 330,000 shares of
common stock to the executives above, valued at $144,375 and charged to
stock-based employee compensation expense in exchange for the cancellation and
retiring of the stock options. The shares are subject to "lock-up" documents
executed by each executive, whereby such shares cannot be sold for a minimum
time period. In addition, the shares are also subject to "leakout" agreements
signed by these same individuals that provide for restriction on the sale of
these shares according to maximum specified monthly amounts over a two-year
period.

         No options were exercised during years 2000 and 1999.

Stock Option Plan

         The Company's stock option plan currently authorizes the award of
1,650,000 shares of common stock in the form of stock options. As of December
31, 2000, stock options to purchase 406,000 shares of common stock were
outstanding under the plan. Accordingly, 1,244,000 shares of common stock are
available for future awards under the plan. The plan is designed as a means to
retain and motivate qualified and competent persons who provide services to the
Company and its subsidiary.

         All employees of the Company are eligible to be granted awards under
the plan, as are directors, consultants and independent contractors of the
Company or its subsidiaries. Awards under the plan are made by the board of
directors, or if instituted by the board of directors, by the compensation


                                       29
<PAGE>   57


committee, in its sole discretion, from among those eligible. In granting
options, the compensation committee considers current levels of compensation,
the need to provide incentives to particular employees, past performance,
comparison to employees at comparable companies and the Company's overall
performance.

         The plan is currently administered by the board of directors. The board
makes all decisions or determinations by either a majority vote of its members
at a meeting or by the unanimous written approval of its members. The board may
adopt, alter or repeal any administrative rules, guidelines and practices for
carrying out the purposes of the plan. The board has the right to determine,
among other things, the persons to whom awards are granted, the terms and
conditions of any awards granted, the number of shares of common stock covered
by the awards, the exercise price of options and the term thereof.

         If there is a change in the common stock due to a stock dividend or
recapitalization, the plan provides for appropriate adjustment in the number of
shares available for grant under the plan and the number of shares and the
exercise price per share under any option then outstanding under the plan, so
that the same percentage of the Company's issued and outstanding shares shall
remain subject to being optioned under the plan or subject to purchase at the
same aggregate exercise price under any such outstanding option, as applicable.
Unless otherwise provided in any option, the committee may change the option
price and/or number of shares under any outstanding option when, in its
discretion, such adjustment becomes appropriate so as to preserve but not
increase benefits under the plan. The aggregate number of shares subject to
options granted to any one optionee under the Plan may not exceed 660,000,
subject to adjustment as described above. However, no incentive stock options
(as defined in Section 422 of the Internal Revenue Code) may be granted to a
person who is not also an employee of the Company.

         The plan provides for the granting of both incentive stock options and
nonqualified stock options. Options may generally be granted under the plan on
such terms and at such prices as determined by the committee, except that the
per share exercise price of any incentive stock options cannot be less than the
fair market value of a share of the common stock on the date of grant. Each
option is exercisable after the period or periods specified in the option
agreement, but no option may become exercisable after the expiration of ten
years from the date of grant. The committee may accelerate the exercisabilty or
vesting of any option or shares previously acquired by the exercise of any
options, and, in the event of a change in control, unless otherwise provided in
the option, each outstanding option will become immediately fully exercisable.
Incentive stock options granted to an individual who owns (or is deemed to own)
at least 10% of the total combined voting power of all classes of stock of the
Company or any of its subsidiaries must have an exercise price of at least 110%
of the fair market value of the Common stock subject to such option on the date
of grant and a term of no more than five years. Incentive stock options granted
under the plan are not transferable other than by will or by the laws of descent
and distribution. Nonqualified stock options are also not transferable unless
the prior written consent of the committee is obtained and such transfer does
not violate Rule 16b-3 under the Exchange Act.

         The committee may permit the option price to be paid by cash, certified
or official bank check, personal check if accepted by the committee, money
order, shares of common stock that have been held for at least 6 months (or such
other shares as the Company determines will not cause the Company to recognize
for financial accounting purposes, a charge for compensation expense),
withholding of shares of common stock, any cashless exercise procedure approved
by the committee, other consideration deemed appropriate by the committee, or a
combination of the above. The plan also authorizes the Company to make or
guarantee loans to optionees to enable them to exercise their options. Such
loans must (i) provide for recourse to the optionee, (ii) bear interest at the
prime rate of the Company's principal lender, (iii) be secured by the shares of
Common Stock purchased, and (iv) contain such other terms as the committee in
its sole discretion shall reasonably require. The committee has the authority to
amend or terminate the plan or any options, provided that no such action may
substantially impair the rights or benefits of the holder of any outstanding
option without the consent of such holder, and provided further that certain
amendments to the plan are subject to shareholder approval.



                                       30
<PAGE>   58


Employment Agreements

We entered into employment agreements (as amended) with the following
Executives:
<TABLE>
<CAPTION>

Officer                       Term              Salary            Position
-------                       ----            ----------          --------

<S>                    <C>                    <C>           <C>
Shawn D. Lucas         Oct. 1998-July 2001    Commission    Co-CEO, President
Scott A. Anderson      Oct. 1998-July 2001    Commission    Co-CEO, Chief Technology
                                                              Officer
Michael R. Fouts       Oct. 1998-July 2001    Commission    Director of Business
                                                               Affairs and Human Resources

</TABLE>

         In March, 2001, the Company entered into new employment agreements
with the three executives above. 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 (see Note 1), 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 821,613 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 144,036
shares of common stock in lieu of $28,807.15 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.

         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. Mr. Palazzo also agreed to accept
196,209 shares of common stock in lieu of $30,241.94 worth of back salary.


                                       31
<PAGE>   59

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The table below sets forth information regarding the beneficial
ownership of the Company's common stock as of February 29, 2000, held by persons
or groups believed by the Company to beneficially own more than 5% of the
Company's outstanding stock, by directors and officers of the Company, and by
all directors and officers and affiliates of the Company as a group. Unless
otherwise indicated, and subject to community property laws where applicable,
the persons named in the table have sole voting and investment power with
respect to all shares of common stock held by them. The address of each of the
individuals listed in the table is c/o the Company, 121 East First Street,
Sanford, Florida 32771.

         Percentage ownership in the following table is based on 27,985,599
shares of common stock outstanding as of February 28, 2000. Beneficial ownership
is determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect to
securities. Shares of common stock subject to options, warrants or other
conversion rights that are presently exercisable or exercisable within 60 days
of February 28, 2001 are deemed to be outstanding and beneficially owned by the
person holding the options, warrants or conversion rights for the purpose of
computing the percentage of ownership of that person, but are not treated as
outstanding for the purpose of computing the percentage of any other person.
<TABLE>
<CAPTION>

                                                     NUMBER OF SHARES            SHARES BENEFICIALLY OWNED AS A
   NAME OF BENEFICIAL OWNER                         BENEFICIALLY OWNED          PERCENTAGE OF CLASS OUTSTANDING
   ------------------------                         ------------------          -------------------------------
<S>                                                      <C>                                  <C>
  Shawn D. Lucas (1)                                    5,737,580                            20%

  Scott A. Anderson                                       952,342                             3%

  Michael R. Fouts                                      1,697,642                             6%

  Select Media Ltd.                                     1,116,500                             4%
      57 Kinkel Street
      Westbury, N.Y. 11590

  SML, Inc.                                             1,851,800                             7%
      320 Golf Brook Circle #102
      Longwood, FL 32779

  Flex Technologies, Inc. (2)                           2,194,000                             8%

  Douglas J. Nagel (3)                                  1,231,035                             4%
    4585 40th S.E.
      Grand Rapids, MI 49512

  All directors and officers                           15,452,901                            55%
   and affiliates as a
   group (14 persons)
</TABLE>

--------------------
(1)  Includes 2,194,000 shares owned by Flex Technologies, Inc. for which Shawn
     D. Lucas holds a proxy.
(2)  Shawn D. Lucas holds a voting proxy for these shares.
(3)  Nagel holds 405,667 shares individually and 825,368 shares are held in a
     trust for which he is the sole trustee and sole beneficiary.


                                       32
<PAGE>   60


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         In September 1998, I.E.L.S., Inc., a Nevada corporation with no
material operations, completed an exchange agreement with Direct Touch
Research, Inc. a Florida corporation with no material operations, pursuant to
which all shares of DTR common stock were exchanged for 5,542,000 shares of
I.E.L.S. common stock. Three of the original shareholders and promoters of
I.E.L.S. agreed to have 1,610,000 shares of their stock redeemed by I.E.L.S.
for an aggregate consideration of $1,610.00. At the time of the completion of
the share exchange, the prior shareholders and promoters of DTR held 5,542,000
shares and the I.E.L.S. shareholders held 4,200,000 shares (prior to redemption
and cancellation of the 1,610,000 referenced above). As a result, DTR became a
wholly owned subsidiary of I.E.L.S. and I.E.L.S. changed its name to the
Company. A total of 987,000 additional shares were issued to the following
persons for related consulting services: Consolidated Capital Group, Inc.
(300,000 shares); Roger Tichenor (300,000 shares); Pow Wow, Inc. (300,000
shares) and Douglas Hackett (87,000 shares). The Company subsequently dissolved
DTR in August 1999.

         In September 1998, the Company acquired all of the business, assets and
liabilities of United Equity Partners, Inc., a Florida corporation, for 150,000
shares of the Company common stock. UEP, a company owned by Scott A. Anderson
and Michael R. Fouts, provided website design and maintenance services for
businesses. The assets acquired consisted primarily of computer equipment,
accounts receivable and maintenance contracts. The Company also assumed trade
payables of approximately $90,000. UEP was subsequently dissolved in August
1999.

         In September 1998, the Company acquired all of the business, assets and
liabilities of MTV/Pinnacle Advertising Group, Inc., a Florida corporation
("Pinnacle"), for 582,000 shares of the Company common stock. Pinnacle, a
company owned by Jeffrey M. Odato and Michael R. Fouts, provided advertising
services primarily to automobile dealerships. The assets acquired consisted
primarily of accounts, receivables, computer and office equipment. The Company
also assumed trade payables of approximately $469,000.

         In September 1998, the Company retired a $40,000 obligation owed to
Michael Fouts, an officer, director and shareholder of the Company, by issuing
him 40,000 shares of the Company's Common Stock.

         In September 1998, the Company issued 400,000 shares of common stock to
Select Media, Inc., a beneficial owner of over 5% of the Company's issued and
outstanding common stock, pursuant to the terms of a consulting agreement
entered into with Select Media, Inc.

         In May 1999, the Company acquired all of the assets and business
operations and assumed all of the outstanding liabilities of LiveCode, Inc.
("LiveCode") a Florida corporation in exchange for 600,000 shares of the
Company's common stock and a six-month non-interest bearing $20,000 promissory
note in favor of the stockholders of LiveCode. The Company, whose President was
David Lampert, provides software solutions and other computer-related services
to various industries. Effective September 30, 1999, the $20,000 note was repaid
by the issuance of 40,000 shares of the Company common stock.

           In May 1999, the Company purchased the office building that is its
headquarters and a future parking facility for $562,000. The sellers of the
property were Karl and Helen Stairs and StoneStreet Investments, Inc., a
Florida corporation ("StoneStreet"), owned by Messrs. Lucas, Fouts, Odato,
Anderson and McComas. Messrs. Lucas, Amderson, Fouts and Odato are directors and
shareholders of the Company. Mr. McComas is a significant employee and a major
shareholder of the Company. The purchase was financed with secured loans
totaling $380,000 from an unrelated party, Eugene E. Gramzow, Trustee for the
Eugene W. Gramzow Revocable Trust (the "Gramzow Loan") and an unsecured loan in
the amount of $182,000 in favor of StoneStreet Investments, Inc. $432,000 of the
loans were used to purchase the property and the remaining loan proceeds were




                                       33
<PAGE>   61

used to complete approximately $160,000 worth of improvements to the property
and the building. The Gramzow Loan is secured by the following: (i) a first
mortgage against the Company's headquarters and second mortgage against the
parking lot; (ii) a conditional personal guaranty by Shawn D. Lucas; and (ii) a
pledge of a total of 100,000 shares of the Company common stock by Scott A.
Anderson, Michael R. Fouts, Jeffrey M. Odato and David McComas (each of whom
pledged 25,000 shares). In December 1999, the StoneStreet loan was retired by
payment to StoneStreet of 127,870 shares of the Company's common stock. The
carrying value of land, building and improvements at December 31, 1999, has been
reduced by $74,000, which amount represents the excess of the purchase price of
the property over its appraised value at the date of purchase.

          Effective October 4, 1999, November 29, 1999, and November 30, 1999,
the Company repaid and aggregate of $157,139 of amounts due to its principal
shareholders, directors and/or officers with the issuance of 246,407 shares of
common stock. Messrs. Lucas, Anderson, McComas, Odato Fouts, Lambert and Hart
received 3,672; 59,435; 6,508; 20,737; 99,099; 36,504 and 10,000 shares
respectively.

          On October 21, 1999, the Company acquired all of the outstanding
common stock of FlexRadio, Inc., ("FlexRadio") for 6,200,000 shares of the
Company common stock, a transaction valued at $6,417,000. The 6,200,000 shares
of stock were issued to FlexRadio's stockholders according to their respective
ownership percentages-Flex Technologies, Inc. (a Florida corporation owned by
Walter Anderson, father of the Company Co-CEO and Chief Technology Officer Scott
Anderson-2,294,000 shares), Shawn Lucas (our co-CEO and President-1,922,000
shares), Official Sports Management, Inc. (a Florida corporation owned by Ross
Reback-496,000 shares) and Select Media, Inc. (a Florida corporation owned by
George DeMakos-1,488,000 shares). Under the terms of the acquisition, the
Company obtained the rights to FlexRadio's provisional patent application for a
radio frequency detection and reporting device. FlexRadio technology will enable
radio stations to track program and advertising effectiveness in a real time
format. The Company will combine FlexRadio's technology with its
ReallyKnow.com's Miratouch division's web-enabled real time market research
business, thus expanding the reach of real time data gathering for businesses.

See "Summary Compensation Table" and "Stock Option Grants" in Item 11 of this
report for information concerning bonuses and stock options granted to the
Company's officers, directors and a key employee.

ITEM 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)      Exhibits

None.

(b)      Reports on Form 8-K.

On July 19, 2000, the Company filed a Form 8-K Current Report to disclose that
Deloitte & Touche LLP will act as its new independent auditors replacing Moore
Stephens and Lovelace, P.A. On August 3, 2000, the Company filed an amended Form
8-K Current Report modifying paragraph 2 of the July 19, 2000 report in order to
conform to SEC disclosure rules.

On November 13, 2000, the Company filed a Form 8-K Current Report to disclose
that effective November 6, 2000, David Lampert resigned as a director, and as
Senior Vice President of Software Development of parts.com, Inc. In the same
report, the Company disclosed that Jeffrey Odato and David McComas resigned as
directors of the Company effective March 22, 2000 and February 28, 2000,
respectively and that Mr. McComas had left the employ of the Company in July
2000.



                                       34
<PAGE>   62

                                   SIGNATURES

In accordance with Section 13 or 15(a) of the Exchange Act of 1934, as amended,
the Registrant has caused this Report on Form 10-KSB to be signed on its behalf
by the undersigned, thereunto duly authorized in Sanford, Florida on the 16th
day of April 2001.

                           PARTS.COM, INC. AND SUBSIDIARY
                           (FORMERLY MIRACOM CORPORATION)


                            By:      /s/ Shawn D. Lucas
                           --------------------------------------------
                                 Shawn D. Lucas
                                 President, Chairman, Co-Chief Executive
                                 Officer, and Chief Financial Officer


         In accordance with Section 13 or 15(a) of the Exchange Act of 1934, as
amended, this Report on Form 10-KSB has been signed by the following persons on
behalf of the Registrant in the capacities and on the dates indicated below.

Signature                            Title                         Date
---------                            -----                         ----


 /s/ SHAWN LUCAS                Director, President
------------------------        and Co-Chief Executive
Shawn Lucas                     Officer (Principal Executive
                                Officer)                        April 16, 2001

/s/ SCOTT ANDERSON
------------------------        Director, Co-Chief Executive
Scott Anderson                  Officer and Chief Technology
                                Officer                         April 16, 2001

/s/ MICHAEL FOUTS               Director                        April 16, 2001
------------------------
Michael Fouts










                                       35